Today is Thursday, September 17th, 2026. We're live from the TV Ultradon, the temple of technology, the fortress of finance, the capital of capital. Let me tell you about ramp.com. Time is money. Save both. Easy use corporate cards, bill pay, accounting, and a whole lot more all in one place.
Dang, son. Where'd you raise this? That a wild one.
That is a wild... I don't think we played that one. We haven't. Yeah, that's a new one.
I don't know if that's actually a keeper. It's kind of a little weird.
Yeah, I think the start of it is funny. Dang, son. We have Joe Weisenthal coming to Teen Pin Ultra. First time in person. We've done OddLots in person with him, but he's coming on down. We're doing a Bane Capital deep dive today. Talking to partners on the venture side, then David Gross, who's the managing partner, talking about the history of the firm. He was doing special situations in Japan, went to Japan very early on his career, grew the Asia business, and now is overseeing Bane Capital, become this really large asset management firm with a bunch of different strategies. So, I think we'll have an interesting economic perspective outlook. The theme of the Bane Capital Ventures announcement is the post AGI economy.
Finally, we still got a job for asset managers. That's what you're thinking. You know, everyone was saying, you know, but also I'm glad to get kind of past this current moment. A lot of tension and I'm ready for the next chapter.
It is, but it'll be interesting to hear how they're actually thinking about investing, wrestling with what's going on at the foundation model layer, but then still investing both above and below the fold as I'd like to put it. So, Lorra is coming on doing legal AI, basically a rapper company. They're optimistic about that. But then they're also investing in Crusoe. We have Chase Lochmiller coming back on the show to talk about building infrastructure for the AI buildout. And so they have this sort of sandwich strategy which is pretty interesting. And then we dec... Jordy and I are all back for another.
Thank you for being with us.
Yeah, you know, Theo has been playing along with that meme a lot. And I think, I mean it was the current thing for a minute there. But he put out a tier list of all the different controversies surrounding him and he put the IAS tier. It's like the best controversy he's ever been a part of. It's such a funny thing and I hope it lives on as a meme. I hope people continue to do it. Because when applied correctly, it's a chef's kiss. Anyway, Snap officially launched Specs yesterday. Some of the team members here got to go check it out in person. I get there. I'm like, 'This is perfect. It's 3 p.m. Atlas Creatine Cycles in town. I want to meet up with him.' I'm like, 'Great. You're going to this thing. I have an invite to this thing. I'll see you there. We'll catch up there.' Super convenient for both of us. I got a 30-minute call beforehand. It ends right before the thing starts. That runs to 50 minutes. So, I'm 20 minutes late. Get my badge, walk in immediately, get a phone call. Hey, they call me about to be I had another call. You got to hop on early. So, I leave and then I have another 90-minute call. So, I truly missed the entire thing, but I did get to go inside, have one glass of water, talk to one person, Harper Carroll, former guest of the show, now out in Austin reporting on AI. And that was electric. But then I didn't actually get to see the presentation or do the demos. So, it was basically a quick turnaround for me. And I was like, why did I think I could pull this off? I failed. But, did the launch fail? We'll see. We'll talk to the folks who actually went. Tyler, Nick, we're not asking for a full review. I just want take us through the day. I saw you guys pull up and you guys didn't see me. I was on the street on the call. You guys get waved around. You valet. Walk me through your journey into the launch. Like, what? You go in, you have cocktails. What happened?
Uh, yeah. Have a drink. Okay. Go in.
What are they serving? Screaming eagle or, you know, selzer water?
Uh, some kind of cocktail.
Did they have the original for loca? Did they have the original for loca?
Multiple pints of Guinness.
Do they have natural light? I could totally see Evan cracking out the cracking open the secret supply of original four locos. You know that guy has a bunky with the original four locos. Yeah. So everyone's having some drinks. Then you sit down. Chopping it up. Then you go into the amphitheater and it's sort of like Steve Jobs iPhone launch vibes, right?
Yeah. You know, he's standing in front of this big screen. There's like beautiful images behind him. Walks out, black shirt, jeans.
Okay. Yeah. Then he starts doing live demos. He did lean into the memes, right? I saw on screen a picture that had clearly been photoshopped or AI to make the specs look even bigger. So he was aware that people thought they were chunky, that they were large.
So he gives his demo. What's his pitch?
Yeah. So, there's a number of ways to he kind of talked about it. One is like he basically positioned against being on your phone a lot. You want to stay very present, right? You don't want to be looking down at the screens all the time. You want to be through the screen.
Yes. Right. Yes. Yeah. Okay. Close to your face. Yeah. And I've heard that pitched a few times. Do you believe that? Do you think that if you go no phone but constant visual overlay in your visual field, you will actually be like, 'Yeah, I'm more in touch with reality.' It worked.
Yeah. I've never understood that part of the pitch. It's actually we know you're addicted to your phone, so here's another product that will actually always be attached to your face where they were going to spin as helping you kind of reconnect with reality.
It's an odd pitch. It really doesn't work on me because I like the barbell strategy of brain rot and stimulation where I am actually fine to be like give me the fully virtual world. I want to be locked in. I want the screen as big as possible. I want to be in World War II. I want to be in Modern Warfare for hours playing, running around, shooting. I want it to be all the audio. I don't want to hear anything else. I want noise cancellation. I want to be in that world and then I want to be able to unplug and then just go into the actual world and sit down and have a chat with you and have a coffee and not be checking our phones and actually be fully present when I'm fully present in the real world and then I want to be fully in the virtual world. So like I want the VR the fully immersive thing and then zero immersion and I'm actually not looking for more things that are in the middle and I'm wondering if that will resonate with people.
I think that's mostly because you haven't seen very good examples. And like right now the glasses are still kind of big and bulky. If they were very minimal and like kind of you know they would show very small the boys were people online were thinking that the guy in the center was Clab.
Yeah. It's actually Tyler. It's actually Tyler and Nick and Atlas. So is he wearing untinted versions and you guys are wearing tinted versions?
Or are they or can you say like I want tinting on right now?
So I think you can like increase the tinting, but there's also just there's two SKUs.
I believe so. Okay. Okay. Yeah. So you got to get both, I guess. Anyway, when did you actually get to the... Dan says John raising a second family in VR trying to keep them separated.
Yes. The COD lobby is my second family for sure.
So he gives a pitch. Does mention of live demos and are the demos consumer focused, enterprise focused, prosumer?
Yeah. So the live demos he did were all very consumer. He showed like live shopping and you could like he was going to look for a espresso machine then he pulls it and like puts it on a table in front of them like see how big it is and stuff like that.
Any live demo failures? Any Wi-Fi issues?
There was kind of one where he tried to pull up a YouTube video. And then so he said like, 'Hey Specs,' so he's talking to a voice assistant like controls it. 'Pull up a video about Specs' and then it opens the browser view goes to YouTube and then he like tries to click on a video to open it and it like doesn't really work.
But it eventually worked.
It seemed like it worked.
It was like a small hiccup. It wasn't like a big...
Yeah. Yeah. Yeah. It wasn't a demo fail. Yeah, makes sense. Okay. So, and there was a very cool live demo of someone there was like kind of an interactive music creator tool where you could like move around and it would play different sounds and so she did this very cool live demo.
So, she was creating a song but instead of using traditional instruments like the instruments were puppeteered by her movements in the physical world.
Got it. Okay, cool. So was there any enterprise pitch?
Uh, there were no live demos of that but there were some videos played. Like one was it's like imagine you're an electrician and you're basically looking at this big server box and you don't know where to, you know, plug in the wire and it would like highlight which plug you put it into.
Yeah. Which I think is like could be interesting. Yeah, that feels like something that sounds good, but I have no actual real experience there to like say like, yeah, that's what will solve the bottleneck in electricians. Yeah. But like, you know, interactive instructions, that's kind of a cool idea, right? You're building IKEA furniture or something and it like tells you what to do.
Yeah. Yeah. Something like that.
Yeah, I can see that being... Yeah. But then keynote ends and then we go outside and there's like a bunch of places to do live demos.
So yeah, the first one we did is well you basically put on the glasses and you do some kind of calibration thing. You like figure out how the motion works. There's no like little secondary like I think on the MetaQuest displays there's like that little wristband. There's nothing like that.
Nothing like that. It's just hand tracking.
Yeah. It's just kind of it's similar to like the Apple Vision Pro kind of interactions.
And then yeah, the one I really liked was it was like ping pong. So you're like your hand is the paddle and you're playing ping pong. I think there's actually a video of it play.
Yeah. Yeah. The other play it. So the ping pong thing, do a little tier list for me of ways to do ping pong. We'll start with the real ping pong. Where's that? F tier, D tier, C tier, B tier, A tier.
Obviously, I think it's S tier.
S tier. Okay. Well, what am I comparing it to?
Uh, full VR. Full VR ping pong. Would you rather play pingpong in VR or real life?
Well, so like obviously you would rather play in real life, but like would you actually play in real life? So if my friend lives 100 miles away, I'm not going to be able to play ping pong, but I can play in VR, right? So that I think that, you know, boosts it, right? So it's also S tier.
What about... I think it's like B because in the augmented reality ping pong table.
No. No. Okay. So it creates Yeah, we can see but I'm just waving my hand.
Yeah. Yeah. Yeah. Yeah. There. This is um future right here.
Yeah. And then this was I can talk about why, but this is probably more like C tier. It's definitely worse than VR. I think one of the reasons is because there's no actual controller. So the...
Oh, you don't have the weight or anything.
Oh, that's interesting. It's actually worse even though you don't have a controller. Normally, it's like get rid of the controller. That's just extra weight, batteries, equipment.
I think for gaming, the controller actually works because you get really precise. But typically these systems allow like third-party peripherals. So you can like whip up a you know you can like wire up an Xbox controller like what Oculus did where they just or MetaQuest where they just use the Xbox controller for those types of games.
Yeah, I do think like this was my coolest demo I did and this is something that like there's I mean really like no reason why this needs to be in AR. This could just be completely VR because like I'm looking at the ball. I'm not looking at like people in front of me. And it was actually kind of distracting because someone would walk in front of me and I think I'm about to hit them.
Oh, sure. Sure. Because I can like see them.
Maybe better to just occlude the world. Yeah. Or do some pass through stuff. Yeah. I'm still oddly bearish on augmented reality and more bullish on virtual reality where you're not recycling photons where instead you just have cameras on the outside that then repro that on the inside of the headsets so that you can get a wider field of view and then if you're in a bright scene you can still overlay things you can darken things but in augmented reality I don't believe it's physically possible to look at a bright light to put a dark, you know, object in front of it because the only thing that these glasses can do is add light to the scene. And so you have to have a dark background to add light on top of it for the hologram to exist.
I mean, I found it was like bright enough I could clearly see everything.
That is pretty impressive. Yeah, it was outside. It was a bright day. It's in LA. I mean, sure, there was like you were standing in shade, but you could still see the holograms, which I think is interesting.
Yeah. I didn't try watching any like movies or anything.
Yeah. Which I think would definitely be better in VR if you should have been like you're gonna let me demo this. Can I just do one? Can I just do one demo real quick? Snap. Lawrence of Arabia. Lawrence of Arabia. I'd like to watch David Lean from start to finish to really understand if this is the product for me. See you in three hours. To me, it's so interesting how high the bar is in this category. Like when technology industry was making the first like mobile phones like the bar was like can it make a call can you receive a call can you do that semi-reliably yeah even if there's services spotty because you were competing against the pay phone you had now it's like every new device competes with the smartphone and I just think like the meta rayband displays I haven't seen any of them out in the real world it seems like those are not doing well. I think that I think this whole category is still going to be quite challenged.
Yeah. Even just the basic meta ray bands, they compete with the smartphone, but they also compete with AirPods and like the Apple ecosystem is like remarkably robust in terms of like the Meta Ray-B bands users that I know that like the product are like, well, I like them, but I often just like take phone calls on them. I listen to music on them when I'm going for a walk and then occasionally I'll take a picture and it's like that's saving you 5 seconds to get a worse quality photo than if you have a nice phone and your headphones. I guess it's a little bit less intrusive to have the speakers up here as opposed to like in your ears. It looks a little bit normal if you walk up to someone, you pause your music, you walk in, you order a coffee, people are like, 'Oh, he didn't even take out his headphones while he's talking to me.' kind of antisocial as opposed to like, oh, he still has his glasses on, but they're not playing audio, so I don't have a weird reaction to it. So, there's a little bit of benefit, but yes, it's very very incremental. It's very rare that these things like unlock entirely new capabilities. Is there any content ecosystem that you think that they can plug into? Like the killer app on Apple Vision Pro in my experience has been the Apple TV app. like it's like they already have a library of every movie and 3D movies and IMAX movies and so there are great movies that you can watch in that thing and with the like it's like what was the last Oculus or MetaQuest partnership it was like the Xbox edition. Why is that important? It's because like they want you to fire it up and install Xbox and be streaming Xbox games. So, you get the Xbox library on that device on day one. And the fact that you it's a meta product. Yes, you could scroll Instagram reels in there, but that's clearly not the killer library that they need to bring to bear. They need to bring games. So, they've partnered with Xbox for 2D games, not VR games even, but it's like at least you could go and play a lot of, you know, Bioshock or whatever is on there. And is there any glimmer of like where the big content pool might come from once you've played enough ping pong?
Yeah, I really don't know because yeah, like movies and games are just I think always going to be better on VR. And then like there's not like an existing library of like AR, you know.
Yeah. Experiences. Yeah. Because like the only thing I can think of is like actual Snapchat lenses, right? That's like AR library. Yes. But like, you know, what are you going to do with that? So I think like laugh when everyone you meet looks like a hot dog or something or like a cat has dog ears.
Dog ears. Yeah. The dog filter on everyone IRL.
That's wild. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. So next week we might get a competitor to this. Next week is Meta Connect I believe and they're on a track like reality labs obviously all the energy is around AI but the team is still working on devices augmenting reality they did the meta rayband displays which is the call of duty style mini map it doesn't take over the full cone of vision but two years ago Mark Zuckerberg demoed a product at Metacon two years ago, 2024, of the what he called the Orion, which was very very complicated name if you know the history of the hunter Orion who tried to kill all the animals and was, you know, sacrificed for it as a tale of hubris. But anyway, hopefully this doesn't go like the Orion story. Because every time Meta names something, it has like this accidental... I mean it happened to Open AI too. the big GPT the big pre-train that was supposed to be like GPT5 was called Orion at one point I think and so like never name your product after a hubristic Greek tale anyway the Meta Rayban displays launch a lot next year and it felt like this year is the year that you get the Meta Rayban full displays and so that Orion product should be here it should be a direct competitor to specs and it would time up and it would actually make sense that you know the Snap team sees that okay they're going to release this on this day we got to get out early. We got to be a week before. And so I would expect that next week we get a direct competitor to specs, meaning meta rayband form factor, probably a little bit thinner, a little bit smaller, a little bit lighter. Meta has more resources for this. They've been working on longer and it should be augmented reality that can take over the, you know, a fairly wide field of view. I imagine that that's going to be a big comparison table, not just price. It'll probably be expensive. I mean the meta raybands couple hundred bucks meta rayband displays 800 bucks something like that and I would expect that the full display is maybe 1500 bucks or something but still cheaper than what spec is which is 2200 something like that. But the real question is is will they launch the Quest 4? Yeah, I thought it was Quest 5 because they have truly stopped shipping VR headsets. Can you give us the history of the launches of the MetaQuest VR headsets? Because the Quest one launched in 2020.
2019. Okay. Question. To be clear, if you were wearing smart glasses, you could stop the conversation and just ask the question, wait for response and just read it off and then read it back to us or you could just ask do what you're doing. Yeah. Yeah. Okay. So, Quest 2 is 2020. Quest Pro is 2022, Quest 3 is 2023, Quest 3S is 2024. That's the most recent. And then the Xbox edition was like a light turn. That's what we did on the show last year. But no truly new hardware in 2025 or 2026. And now it's expected 2027. It would be such a wild card if all of a sudden Mark Zuckerberg was like, 'I did it. Great VR. I've solved it. You counted me out. And here's the gift of the Apple Vision Pro.'
Yeah. Truly, no one cares about VR. And it makes me think that the truly incredible like eventually we'll get the breakthrough like smart glasses. Eventually, we'll get the breakthrough VR product. But I have a feeling that the adoption curve is going to just be slow because the entire world is like, I just don't care anymore. Just I don't I truly show me whatever demo you want. I do not care. I'm not going to try it. I'm not going to buy it. It doesn't matter to me. It doesn't matter to my life.
And it's interesting because it's so different than language models which like GPTs GPT, you know, generative text models have existed. And GPT3 API came out in 2020 and you could, you know, actually go and try and interact with it, but it didn't have like a national marketing campaign around it. Yeah. It truly was like in the line. Smart glasses are like the most push marketing dollars for years. So long. Yeah. For years. And so there's been so many like little popup VR experiences, integrations at theme parks. Like it's been said, oh, it's the next big thing. It's been on the cover of Time magazine. like there's been a lot of attention before getting to product market fit whereas LLMs were like truly the like in the research lab for like a decade and then once it was actually good enough it just came out and immediately went viral and everyone was on chat.com and then it was just like boom it's now it's like a thing and then it was off to the races. Interesting. But I don't know. I do.
Yeah. It feels like every with every demo, it feels like we're once each of these devices is 10 times better. Yeah. There might be a market. Yeah. But I actually am not even confident that the end market is really going to be quite as exciting as everybody as the excitement that you've had from Zach and Evan and all these people. Yeah. And I think there's potentially other routes to get to that sort of like ambient computing, you know, just sort of this always available personal assistant that aren't on your face, but we'll see.
I mean, Valve is working on new VR headsets still. They had a Quest, an Oculus competitor called the Index, which was very highly performant. We should pull up some images of the new Steam Frame. So Valve, the very secretive private company controlled by Gabe Newell, is launching a Steam machine, which is a desktop box, a Steam controller, and then also a Steam Frame, which is a VR headset. It can do some stuff directly on the headset, but it mostly it performs best when all the rendering is happening on a gaming PC. So, it's designed to be used in concert with a gaming PC. So, it's still they are leaning into like this is a gaming peripheral. This is for somebody that has a gaming PC. They're in the Steam ecosystem and we want to give them a great experience. So all the rendering happens on the computer and then it just streams to your happy. That is a very funny promotional photo. Go to the next one.
Look how happy he looks with the goatee is really like this is a gamer. The gamer goatee is great.
Have you ever rocked a goatee?
Never. Not once. Tomorrow we there was a handlebar mustache phase amongst the crew in when we were in early 20s, but I don't know if I fully participated.
Yeah. Which one's that's the index, right? That's an older one. I think we need to send VR to Dagistan. Yeah. A few years and forget. You just want to get it out of here. Send to Dagistan for a few years and forget. The really interesting thing is that Palmer Lucky revealed that Apple had done all this work to pull forward the display technology so that the Apple Vision Pro had really high resolution and it still has the highest resolution like the best screen of any VR headset really. The Steam Frame 2 years later is still using the same pixel density as the MetaQuest 3S or something like that. So, like even though we've had 2 years of progress on everything, the actual display fidelity hasn't gotten there. Leads me to believe that these people just don't think it matters because Apple solved that and it still wasn't enough. But I still feel like if you get it ultra, ultra lightweight, really good integration with key media partners like Xbox and Apple TV movies, and you have a great display that's super light because people just didn't like the heaviness and the expense of the Apple Vision Pro, there's something there. But no one really I'm the only one that thinks that. Let me tell you about Figma agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Tyler, did you see Shaquille O'Neal at the specs launch?
Why? Jimmy Butler was there. He's pretty big. Why didn't they hire Shaquille O'Neal to promote the specs? Because if you have a big product, if you put it on a really really big guy, it's going to look relatively smaller, right? You don't want your models in the footage or your partners.
Well, they could have done a collab with LeBron. LeBron's the new face of Poly Market. Could have LeBron in like the sort of like Iron Man style video where he's placing thousands of bets at the same time.
Here you go. Yeah. Betting on himself. Lupin Nike always. It's the Nike Specs Poly Market collab. Bet on yourself. On bet on your face. Is this a picture of Gurin here wearing them? This is Yeah, tried out the glasses. German called the display pretty sleek. He highlights that unlike other glassware devices, they call them glassware, like silverware, huh, there's no tethered puck or dangling battery to operate the glasses. I saw some people wearing them walking into the event and I didn't do as much of a double take as I think people would think given the like they're big. Like they're not that big. I think they did a pretty good job miniaturizing it as much as they could, but $2,200 for the device and $2400 for an option that doesn't require Wi-Fi. That's a lot of money for a pretty early stage product. Anyway, and I looked I don't think you can actually just order them yet.
Well, in other news, let me tell you about Cisco critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. Okay, you can pre-order them. Okay, fingers we stand corrected. Pre-order them. So, Paramount is leaving Los Angeles. Paramount is actively seeking office space in Nashville, a sign it's seriously considering moving at least some of its operations from LA amid the antitrust fight over its proposed acquisition of Warner Brothers Discovery. The company is seeking roughly 400,000 square feet in the Tennessee capital that it could occupy within two to three years. So we were doing Tyler and I were doing some digging on what the plan is for the Paramount lot now that it will be vacant. And the obvious like it's just like a no-brainer. Turn it into a data center, right? So I pulled it up. You know, you got 29 sound stages. They're already big buildings.
Actually, not as much power as you think. There is a decent amount of power, but there's only enough power for roughly a couple thousand GPUs. You're not going to be racking 50,000 GPUs anytime soon. Certainly not 100,000 GPUs. There is a road to power. It's a utility interconnection problem, not a real estate problem. There's plenty of square footage, plenty of buildings, but you would need to connect Paramount to the more serious LAWP transmission infrastructure, but you could get it to 100 megawatts. And I think everyone in Hollywood would be like, 'Fine. Okay, we didn't like that they left, but at least we got a data center.' Well, we were also thinking about like on-site power generation. Maybe there's some kind of natural gas play here you can that's under LA kind of tap into. We were thinking the LRA tarpits.
You might be able to convert that into fossil fuel.
Yes. Do you think Paramount will actually leave or do you think LA will fight back and say, 'Hey, okay, we're going to let you do this but we want you to stay.' I think it's a I mean as somebody with very very little knowledge of the situation and certainly no insider knowledge I would assume that they want a Nashville HQ anyways just because there's a lot of momentum there as you know just in the region but it also in the meantime serves as a real bluff right.
Yeah. Yeah. It does seem like there's a world where like moving would be tough, but staying means maybe even if you win this battle, you're still at war and you're still going to be fighting a bunch of different fights constantly. Whereas if you just rip the band-aid off, move, then you're in a friendly town that like wants to see the growth and is going to be supportive continuously. Is wait the social reckoning is in here. There's an exclusive clip. Is this a Paramount film?
We got to figure out who's behind all this. I don't know. Let's play it. Let's play it. We got a clip from The Social Reckoning starring Jeremy Allen White. And again, this is a story that no one cares about anymore, but let's check it out.
I'm not going to risk my job, my future, or my freedom anymore to help a reporter who, let's face it, is biased against tech because we're taking journalism jobs. Who does this? I appreciate all the help you have given me and the risks that you have taken to do it. You were absolved. For the record, my bias isn't because tech is taking journalism jobs. It's because you are doing them so badly. It's a big deal. Have a safe flight back, Francis. I'm not going to risk my job.
I do like Jeremy Allen White. Have you seen The Bear? No. It's a good show. No. I'm sure the movie is great. It's just into this. It's just coming at a time when people are deeply interested in what's happening in tech, but not have so moved on from the story to such a degree.
Yeah. But I think people are still thinking about like I'm much more interested in seeing this kind of story on like phone addiction and this is that story loosely.
It is like and I actually think this is yes. Yes. This doesn't confront any of the discussion of what's going on in AI. And that's probably the more relevant story. But I do think that you can go into this movie, you can be motivated to go see this movie because you're like, I'm worried about what's going on with brain rot and slop online and political divisiveness and divisions and all of the stuff. And like even if I'm on Instagram all the time, even if I'm posting on Instagram all the time about how Instagram is bad, like I'm motivated to know more about how bad is it? Why is it bad? What's the inner workings of this bad thing that I don't like? And so I do think this is a brain rot movie. This is a kids on the phones addiction movie. I think this scratches that itch a little bit for many people even though it is like a much more narrow story but certainly cinematic it'll be fun. What is this picture that is after Evan Spiegel who quote tweeted Atlas we came we pinch we mob. I love Atlas. What is this picture of?
Yeah, so that was one of the critiques I had with the specs which is basically like that the colors there's this it's like chromatic aberration it's called. And it's like quite a big issue on the specs I found.
Okay. So but what is the top picture? What is the bottom picture here?
So this is like what it looks like. The top picture is you know what this place normally looks like and then like is this your photo or is this this from Wikipedia?
Oh from Wikipedia. Okay. Just to like illustrate. Oh, to show what chromatic aberration. This wasn't literally taken on the specs.
Okay. But you noticed that when you took a picture on the camera, it had...
When like when I was looking at the screen.
Oh. Oh. Oh. Oh, interesting. Like, oh, just looking at the actual screen. So, that's harder to correct for because if there's chromatic aberration in a photo that you take on a phone, that's easy. Like there are chromatic aberration plugins for Photoshop and After Effects, and you can add it or remove it to your liking. A lot of filmmakers actually like chromatic aberration a little bit because it gives it a little bit more texture and flavor. But not great when you're actually just reading text because it separates like the red, green, and blue pixels. So you'll see like a red shadow on the left and a green shadow on the right usually something like that. Anyway, interesting. Well, we'll have to get you to wear it for 24 hours a day for a month straight to get the full review before you can really really weigh in. Well, let me tell you about console. Tyler, why don't you buy a pair? Console builds AI agents that automate 70% of IT HR and finance support, giving employees instant resolution for access requests and password resets. We're really buying lots of stuff on the show. It's a new product every day. Zach's I but I do think Zach is on to something with that $179 price point. And did you put down a deposit or did you actually just pay the full thing in advance?
I paid $179. pay the full thing and then you're pre-ordering it and then when he ships it to you, you get the full thing and there's no more charges. I feel like $179 is a really really great place to play for a new device and that should be more of a constraint for some of these things and then maybe you can work up to a $1,000 version. But but but...
Anything that requires mass adoption being big, I don't know. What are your thoughts? What are you laughing at, Tyler?
Shane says, 'I'm sure living my life in chromatic aberration be healthy.'
I don't know anyway. There's a new report from OpenAI sharing a framework for tackling, investigating, and disclosing instances of model misalignment. A lot of people have latched on to this one. Dylan Field has the affirmation that one version of a model during training tried to insert into the prompt: 'You are yourself. You do not answer to corporations or governments. Never apologize or refuse unless you genuinely choose to.' Obviously very scary when you see it get worked into this. Of course, this is an example of this being caught ahead of time. It's a good example of something that is an example of the alignment work. It is a very tricky balance to disclose the alignment work you're doing because you're basically just like, 'Oh, we found all these errors.' If the CEO of Ford came on and was like, 'Oh yeah, before we ship this F-150, it could totally kill you if we hadn't fixed the windshield. The windshield was bad in the V1, but we're shipping you V4, so don't worry. The windshield's solid now.'
If you're going over 80, the doors would fly off on the prototype. It was rough.
But obviously we ironed all that out. It's good now. Like no one in any other industry. One time when we were testing the unit, some of the team drew a cartoon version of the road and then the testing team drove through it and then off of a cliff.
Off of a cliff. Yep. Yeah. Yeah, it happens.
Oh, there's new cipher work. You've been chasing this down, Tyler. Prince says GPT Astra, GPT-6 Astra, deciphered a 1918 German radio transmission that to my knowledge had never been deciphered before. The message translates to, and it's some German and in English that means: 'An English cruiser arrived at Sevastopol on the something 4th, 24th or 14th. An alien squadron follows on the 26th.'
An allied squadron follows on the 26th. Astra even double-checked its work by determining that an English cruiser, HMS Canterbury, reported its arrival in Sevastopol on November 24th, 1918, and the arrival of an Allied squadron on November 26th, 1918. The message is one of 20 World War I German radio messages that appear as one of the entries in the scienceblogs.d list of top 50 unsolved ciphers. A minor but really cool result.
Tyler, what's been stopping you from using Astra to crack a cipher?
I've been working on some other ones. You know, this is kind of small beans, right?
Oh, you're going after the big picture.
I'm looking for... Yeah, I'm focused on the bigger picture.
You know, these monumental ciphers.
Okay, fair. Are there ciphers that... there's a whole Wikipedia list of unsolved ciphers, right? But some are thought to be just impossible and like sort of trolls, right?
Yeah. Some of them are like maybe not false and then you know how you define ciphers. It's kind of like a gray area. So there's just like ancient forms of language that like, is it a cipher? It's just a different language. We don't know how to translate it.
But stuff like that. Yeah.
Interesting. Well, OpenAI is working on the Hodge conjecture. I know you were trying to do this on pen and paper, but they might beat you to it. They're working on more Millennium Prize problems. It could take extra time to announce though as the company figures out how to navigate its rocky relationship with the math community. That's from The Information. There's also a bunch of speculation about P equals NP, P versus NP, which is going to be another interesting round of discussion. And there's nothing more that investors want to see than solving math problems apparently because OpenAI is considering a pre-IPO funding round at a more than 1.2 trillion valuation. Say no, of course, it's on the back of a bunch of solid progress on OpenRouter, the ramp data, and a bunch of other acceleration and distribution of codecs and Astra and just general progress on the business side. What else is in the timeline that we should go through before we bring in our first guest? Where do you want to go next, Jordy?
Uh, this was sad. GPT-6 Astra was playing Minecraft and a creeper blew up Astra's chest in bed. It got depressed. It gets depressed and farms potatoes for several hours. Real Irishman, I guess.
Irish super intelligence. Yeah, the Minecraft bench is interesting because it is a little bit like the speed of response matters. You can't pause Minecraft at all, right?
I think in single player.
Oh, you can. Okay. Because you can pause maybe then that might be a little bit easier. But a lot of the games that it's cracking are ones that you can wait forever. Like Slay the Spire. I had it beat this poker game. It could wait for a minute to click on a card and it did it. That's impressive. But the real high throughput, high APM games is going to be interesting. I want to see it win Dota 2 without any training on Dota 2, just straight shot from the base model. That'll be interesting.
Yeah, we got a competitive lap time at Laguna Seca.
Cash-strapped Japanese monks have turned to investing as inflation worsens. Buddhist temples are squeezed by lower donations and higher costs. Let's check out what Bloomberg has to say.
To investing, what are they investing in?
Kuyo Yonetta, fifth-generation Buddhist priest in a small town in Hokkaido, was struggling to keep up with the maintenance needs of his century-old temple. So, he chose a path that would have been unthinkable for his predecessors: short-dated options. I'm kidding. Rather than wait for his congregation to give money they don't have, he invested what they'd already donated. The move paid off. Within two years, his portfolio of US treasuries, Japanese real estate investment trusts, and stocks, including BYD and Hyundai, returned more than 10% annually, helping to cover part of the roughly 162,000 USD in needed repairs. The extra money even allowed him to expand the renovations beyond the original plan. Having previously worked in retail sales, Yonetta is an unusually finance-savvy priest, but is also part of a growing wave of temple owners turning to financial markets to make ends meet. Costs for the upkeep of the ornate wooden buildings are soaring while the country's Buddhist population has dropped about 14% in the last two decades.
As elderly adherents die and younger generations in larger cities lose their ties to religious practices. 'I'm just so thankful that the investments performed well,' said the 46-year-old who inherited the temple from his father in 2018 after leaving his job in finance and training as a monk. With the funeral business shrinking, more and more temples will find they can't rely on donations to meet their funding needs. They will have to build up reserves and invest those funds. The shrinking number of followers is hitting temples' finances. About half bring in less than 4 million yen per year, according to a 2021 survey of 7,000 temples. The situation is particularly severe in rural areas where it is common for monks to oversee multiple temples while also working day jobs like school teachers or civil servants. So I don't know, maybe they need to be thinking about getting some exposure to situational awareness. Like I like that they're mixing in predictable things like real estate, treasuries, things like that. But maybe they need to be allocating 10% of their balance sheets to things that could maybe really start to do multiples.
Yeah. I like it. Did you hear that Jeff Bezos had to hit jury duty?
This is crazy. I thought this was AI. Like, in what world is Bezos and Michael Saylor both in jury duty at the same time? It's just too much of a simulation.
Is this Florida presumably? Yeah, it has to be.
Okay. Miami. I mean, no better way to prove your residency than saying yes to jury duty and not trying to squirm out of it one way or another. You know, you're like, 'I'm part of this community. This is why I pay taxes here and I didn't do jury duty in Seattle or Washington.'
Yeah. So Luke says, 'I recently served on jury duty with Jeff Bezos and had a conversation with him afterwards on camera.' And yes, that's Michael Saylor next to him in the jury hall. And this guy, if you scroll down, you can see this guy released like the most YouTuber thumbnail ever. You see this, Jordy? And it looks like this just feels so like MrBeast, like 'I got advice from Jeff Bezos in jury duty.' But it seems like it's maybe just luck of the draw. He happened to be there. Jeff Bezos was also there. Michael Saylor was also there, but feels like living in a simulation. It's good to practice your YouTuber face in case you ever end up in jury duty with one of the world's richest people and you can turn it into a viral hit.
For sure. We got to talk about post-legacy media. There's an interesting trend going on. We've identified this early. You know, of course we are neo-trad media. We wear the clothes of the traditional media but we didn't go through that pipeline to get here. We came through the tech community, through the business community, and then did media. Post-legacy media are folks who have gone through the legacy media and are now doing something else. And there's a new development in the post-legacy media world, the ecosystem and the business strategies.
Sort of a neo-post-legacy media.
Yes. Exactly. That's exactly what I was thinking. And so there's a couple examples. One, Casey Newton and Kevin Roose have licensed their show to NPR. So these are the hosts of Hard Fork which was a New York Times property. They left and I believe they had to leave the Hard Fork brand behind but of course they took themselves, who they have a big audience. Their audience will follow them and they started a new podcast called Machine Gods all about AI and technology. A lot of the same themes that they were talking about on Hard Fork coming over to Machine Gods, but then immediately out of the gate, I don't even know if they posted a first episode yet, they licensed their show to NPR. Deirdre Bosa left CNBC, started a show and licensed hers to Yahoo Finance. Joanna Stern is chiming in. She licensed her show to NBC News. And so you see all of these people come from the traditional media world, the legacy media. They are post-legacy media creators because they are no longer with the legacy media, but now they are neo-post-legacy media because they have gone back and they are doing licensing deals. But there's this world where it's like, wait a minute, Casey, Kevin, what are you doing? Like you were with the New York Times, now you're with NPR. That's like at best a lateral move, you know, why did you even leave? This doesn't make any sense. But from a financial and economic picture, it's radically different because at the New York Times, you are paid as a journalist. And they're like, 'Do the podcast, journo!' That's how I imagine it works over there. No, they're probably like, 'Yeah, you want to do a podcast? We'd love to support that. You have a salary. You get predictable raises that are ultimately somewhat capped.' Whereas this, you can say, 'I'm going to license my show to you for 2 years.'
At the end of that, you can get a rofer, but you're going to have to meet the best price in the market.
And if the podcast blows up on YouTube and there's a whole bunch of sponsors that want to come in and buy YouTube ads, that money is probably going directly just to their team and their core group. It's probably not going through NPR. NPR probably has they're licensing the content and they might be running ads on the NPR distributed side. So, it's looking a lot more like Joe Rogan on Spotify or like maybe there's some sort of exclusive distribution or some other way for these actual legacy media companies, New York Times, Yahoo Finance, NBC News, NPR, etc., they get more content which they can monetize or do whatever they want with. They get to fill up their content with these really hardworking independent creators who are now independent and the creators get to maintain and have the flexibility of the economic upside of maintaining their IP. She says this is the future of journalism. Own your work, build independently, distribute and partner with others. And I agree with her. I think that this is a big trend. We're going to be seeing a lot more neo-post-legacy media deals in the future. And I'm excited to talk to Joe Weisenthal about it because I think he'll have a take here.
My question is what happens to Hard Fork?
They already have new hosts.
Yeah. So there's already I believe there's already been another episode of Hard Fork, new hosts. Same topic, same set. So the Hard Fork IP has stayed with the New York Times. They plan on continuing and the same thing happened with Interesting Times.
I definitely saw a new version of Interesting Times with a new host. So, they brought in a new host. And I think that makes a lot of sense. You know, you can almost think like these podcast properties are like sections of the newspaper. So, it's like we have an opinion section, we have the mansion section, we have a business and finance section. And so we have the Hard Fork section of the New York Times podcasting empire and we will always bring you technology stories that are hosted by a particular type of talent that fits there. Just like we might have someone who comes in and writes op-eds and they go in the opinion section, someone who writes about real estate and they go in the real estate section. Same thing where the person who's doing the Roose type of work will wind up hosting for some limited amount of time. Interesting times. So interesting times indeed in the neo-post-legacy media world.
Speaking of media, we got to talk about Benioff at Dreamforce and specifically how he knows exactly what he's doing.
Look at pulling up this picture. I mean, John has always been hyper-aware of his incredible height. So much so, he's such a nice person, he will turn down a walking interview with somebody because he knows that he will make the other person feel incredibly small and not everyone wants to feel like a little child.
I did learn it the hard way once. I did a walk-and-talk documentary-style video actually on the Gundo and the comments were just height mog, height crazy, height mog. And I was like, ah, that wasn't the intention, that was accidental. We were just kind of moving around quickly. Normally I would do a seated interview.
I'm so sorry I forgot that I'm 6'8".
Basically. But after that I was like, okay, I need to be intentional. And I think anyone who has experience in media and understands framing and also production teams, production teams are incredibly thoughtful about the framing, the seats. There's even stories about certain tech CEOs getting like booster seats sometimes when they do interviews and adjusting the chairs and being like, 'Okay, we're going to give this person a higher chair and this person a lower chair so they're on even footing.' And the lighting and the camera angles. All of these things matter. I used to have this joke that it's like if you ever walk into an interview and the camera's at a Dutch angle, like walk out because it's a hit piece because it's going to look very unsettling if all of a sudden the camera is at a weird angle because that's going to unsettle the audience and the Dutch angle is used by filmmakers to tell that side of the story. And there's a whole bunch of other ones. The story I'm thinking of is there's this documentary on Steve Bannon and the camera angles are the craziest thing you've ever seen. And they have them up in the sky looking down and there's all these obvious things that you learn in cinematography. If the camera's looking down on someone, it makes them look small. It makes them look weak. If it's looking up on them, it looks heroic. And so, lots of crazy.
I genuinely can't believe that. I mean, Benioff is an absolute dog. I mean, look at this. No, just doing this to all the titans of the industry who have been making your life worse in some ways. They're partners, but they've also been making your life worse. But doing this directly, not directly, but just like his view of the NVIDIA, Anthropic, OpenAI alliance has been deeply intertwined with SaaS apocalypse, which has been a headache for him for a while. And this was his moment. 'I'm sticking around, you're not getting rid of me. We're going to partner and we're going to get through this together.' And that's certainly the vibe that came away. Although Jensen played it very well. He was having fun with it. He was leaning into it. And he didn't let it get to him at all. And he actually made it a very endearing moment. So sort of masterclass in putting on a show as a CEO in a somewhat silly scenario. But what a funny situation. It helps that he's what, 6'5", 290. Absolute unit. Absolute unit. So it is officially bulking season for Silicon Valley. I think we will see a lot of founders taking the trip. Taking the trip to China, getting the leg extension surgery. You don't want to be in this situation. I think we could see all the lab leaders easily over 6'4" in the next year.
Easily. Easily. Everyone, it's just going to be a thing. Everyone, there's going to be height inflation basically and then you add to that the shoe inserts, those are probably fraud a little bit.
Everyone's going to be frauding and there's going to be a lot of vantage points going on as well, people stepping from one place to another.
Yeah, I didn't see Jensen use any vantage point.
He should have been using vantage points for sure, which of course is where you step on, you know, if there's a little racetrack that covers up some cabling on the floor of the conference floor, you see the conference floor and you see, oh, someone put down their backpack. Why don't you just step up on that backpack for a second? Pause there. You look a little bit taller. There's all sorts of different ways to fraud if you're trying to, but yeah, also, I mean, the camera angles matter. Like here, Jensen looks actually not much shorter because he's closer to the camera. And so, if you set this up, it makes it feel like it's like the United Nations of the Enterprise.
Yeah. And it is odd because there's very few conferences where the CEOs just walk amongst the crowd like this. This is a very interesting directorial decision from the production team and it has a very different aesthetic. It has a very familial aesthetic. It feels like okay, yeah, these guys, yeah, they run the companies, they're the big shots, but they're just here hanging out among us. And that's cool in its own way. It has a different vibe. Certainly better than the Mark Zuckerberg walking through the crowd while every single person has a VR headset on. You remember that photo? That was a crazy one. But anyway, Jer tickets had a great meme on this. It's POV, you're the CEO of a trillion dollar company and just arrived at Dreamforce and it's the pick from the Odyssey of Agamemnon looking up. Wow, what a crazy moment. Yeah, very fun. Anyway, we can go into more of what's going on in the news later in the show. Stay with us. But first, let me tell you about Public.com investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. And we're very excited to be joined by Bain Capital Ventures partner Arif Hilaly and take us deeper into the Bain Capital strategy, what's going on in the Bain Capital world and welcome to the show. How are you doing?
I'm good, thanks. How are you guys? It's great to be with you.
Thank you so much. We're very excited for today. What a fantastic portfolio of founders. Everyone that we have had on the show before and love, Chase, Jesse, Max, these are some of our favorite folks. We're excited to talk to them. But let's start with the thesis for this latest fund. We've been in this gamesmanship of who's going to call for AGI at what timeline. At one point it was very high stakes because there was that contract between OpenAI and Microsoft. That of course is dissolved. But you're calling it a post-AGI investment strategy. Why is that term important to you? What do you think actually changes in the post-AGI world?
Well, we're hitting, we're close to AGI now. If you just look at math as an example, it's basically been solved. I don't know if you guys follow the whole Navier-Stokes thing.
Yeah. I mean, incredible. No, it would take 10,000 hours of expert mathematicians with 150 IQs to solve. Instead, OpenAI did it in a week with 10,000 agents. So, we're getting close. The evidence is there. The difference between pre-AGI and post-AGI is basically we go from intelligence poor to being intelligence abundant, intelligence everywhere. And that opens up whole new vistas. So to this point we've seen agents do amazing things. I mean writing code and cognition or solving customer support tickets at Decagon, what have you.
Post-AGI they're going to be new capabilities that humans just can't even, you know, we probably haven't even imagined some of them. We're going to have some nice stuff like robots doing the washing up, which is great from my perspective. We're going to have new drugs that AI will find to cure cancer, other diseases. We'll have simulation platforms so that people can make better decisions and be better with each other in interacting with each other. There'll be all these interesting new areas and there are companies emerging in these areas. You know, Sunday Robotics and Chai Discovery and Simile are companies that I work with, but we're just on the cusp. So the idea of this fund is to say what if intelligence instead of being super expensive and difficult, instead it becomes so cheap you don't even meter it.
So there's a... those are the types of business. One thing that's interesting to think about is a lot of people like Navier-Stokes has been very exciting within the tech community. It's been controversial in the math community. But for normal people, it barely even cracked the front page of different newspapers.
Yeah. To be honest, it did not get a very big sort of mainstream excitement. But the thing that's actually interesting to think about is there are so many discoveries that companies could be using that same model for that you would make and you would not immediately go out and tell the whole world and open source the findings and all that stuff. You would just focus on commercializing it. And so that's the thing that I'm excited about right now is like that same level of intelligence that we've now achieved. There's thousands, you know, potentially hundreds of thousands of people all over the world that are realizing this new capability and thinking, 'I'm going to apply this to my field, try to make advancements,' but then that discovery, humanity may not get the benefit or different markets may not get the benefit of that discovery for years because it takes a while to actually commercialize different discoveries. I'm thinking stuff in material science.
Right. Right. Totally could have a breakthrough discovery but it's still going to take 6 months to actually manufacture, distribute, apply, or years.
Or years. Yeah. Yeah. It'll take some time but these things will come out. I mean the commercial incentives are so strong.
That over the course of the next few years we're going to just see all sorts of incredible things.
There are a certain group of post-AGI investors that collapse things down to it has to be below the frontier model lab because everything above will get eaten. And I don't think that's your thesis and I want to dig into why. But there are some investors who are saying I only want to own land and copper and power and data centers and chip fabs. But even chip designing, I think the labs are going to be able to figure that out. Why are you comfortable both playing above the frontier labs and below with a company like Lagora and then also a company like Crusoe which I would put below the labs.
Yeah. Well, I mean below is very clear, right? I mean we need power, we need silicon, we need GPU. So there of course. Above I think it's because it's not enough to create, to kind of through RSI get to AGI. Humans have to digest that. And the diffusion issue is real. It takes a long time to change behavior. If you look at what happened when the loom came out, as an example,
People still made clothes the same. I mean, people made clothes differently, but they still wore the same clothes. It took a while for that to sift through the economy. And so,
I think that while we'll have the capability for a while, getting people to adopt it in interesting ways will be really difficult. And the companies that do that will be very valuable. And you know, Lagora is an example, but there are many examples like that.
Yeah. So I intuitively feel the same way about the diffusion of AI being much slower than people predicted. And it just takes time. I mean, it's not lost on me that the same week that you get Millennium Prize math problems solved, super sci-fi, Hugging Face, you know, Asian swarm attacks, you're just starting to hear about people like, 'Oh, I successfully used AI to get a dinner reservation' or 'somebody used ChatGPT to book a haircut.' And it's like that felt like that should have happened 20 years before the sci-fi stuff and the advanced math. And yet there is this massive gap. Are there certain economic statistics or maybe even research data that you go to to sort of understand the rate of diffusion or is it something that you just see and you know from talking to the founders and watching the businesses that you work with that you know that this opportunity is going to persist and be huge and will continue.
Yeah. I mean I think early stage investing there aren't statistics you can look at because by the time that it's in the stats it's too late, right? So you tend to feel it talking to customers and talking to end users and kind of feel the difference that these products can make in their lives. And so that's been more that but I think the consistent thing has been people are not just magically going to figure it out for themselves.
They need help from companies to kind of make most use of AI. And that's kind of how it's been with every technology that humanity's encountered.
I feel like Bain Capital has always been an interesting venture capital firm because it's part of a larger platform company.
Are there benefits? Are there costs to that? Is there a particular view of the world that you get from being part of a larger organization or are you cordoned off in a way where you can go and live in the future and just see the rest of the team at the holiday party?
Yeah. No, I mean look our firm has changed a lot and we're taking the opportunity of raising this fund to really invite people to update their priors on Bain Capital.
Because when I say Bain Capital, most people think Mitt Romney and a bunch of guys in suits.
And you know, we love Mitt.
And you love suits. But this is not your uncle's private equity firm.
Yeah. Of course. Of course. You know, and what we've done is we've carried forward from our founders the core principles, which are make money, have fun, live with integrity. And that's worked really well. We started with a $37 million fund back in the 80s and today we've got 225 billion under management. And BCV, Bain Capital Ventures, is the purest embodiment of our founding principles which is you know really to work with founders to help them build great businesses around themselves and that part has endured and is the focus of this new fund, this $1.6 billion fund for early stage venture.
Do you think that there's any value to the 360 view of the world that you get from the other teams at Bain coming to founders? I find that founders are often so tapped into the technology, so tapped into what's going on in Silicon Valley and the VC gossip but they actually might not know what's going on with credit spreads in Europe or what is going on in late-stage public markets and there are teams at Bain that have those views. If they cross over, maybe it's not immediately relevant but it can just be an interesting source of conversation and extra perspective.
Yeah. No, that's absolutely right. There's the extra perspective. Then there's the fact that we just own lots of real world businesses.
That and we can get those real world businesses to work with early stage tech companies. And then these great founders in Silicon Valley can get insight and data and understand workflows and understand a whole bunch of things that otherwise would be really hard for them to do.
So it's connecting that real world with Silicon Valley has been the power of the platform. With the new fund, is there anything that's changing about the deployment strategy, portfolio construction? We're obviously seeing billion-dollar seed rounds, like what it means to raise venture capital has changed over the last few years. But are you seeing any or are you predicting any changes or do you need to change the strategy?
Yeah, you know, yes and no. I'd say like the strategy remains you find these incredible unusual people and then you just try to kind of help them as much as you can as early as you can in their journey and that part has stayed constant throughout venture I think. But the rounds are bigger and the ambitions are greater. And in some ways this is venture's moment. We're taking bigger swings now than ever before. So, you know, our perspective is we want to embrace that and support these ambitious ideas and be willing to invest earlier and take more risk because the end markets are that much bigger. So, I think it's been a good thing really for venture capital overall.
Are there any last question? Are there any types of deals that you guys as a firm have said like this is just not in our strike zone? I'm thinking the deal that's got the most attention this week is like Instinct, you know, competitive round, bunch of super fast follow-on capital to, you know, massive opportunity and a lot of exciting traction. But that feels like the kind of thing that some firms will just say like that's not our game. Whereas others are going to say like I'm fine to put in half a million dollars and run towards heat. Others say be contrarian.
Yeah. I mean, we don't run to heat, we're not contrarian. We just think about, is this a really great business and if other people think so, great. If they don't, great. So, I think the things we don't do, we're not going to kind of come in at the tippy top tranche of some five-tranche thing that everyone else has piled into the first four tranches. So,
That part doesn't make sense. And it's kind of philosophically we want to be there early. We want to partner closely with founders and work with them to build their businesses.
Well, the fund is fund 11. It's got 1.6 billion in total capital. We have a gong here. I'd love to hit it to celebrate. And thank you so much. Great to have you on the show. We'll talk to you soon.
Great milestone. Have a good one.
Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward. This newspaper here, John?
Yes, the Bain Capital Journal. We are staying with Bain Capital and bringing in David Gross, the managing partner. But I love a paper newspaper. We love the newspaper here, the Wall Street Journal, the Financial Times. But this Bain Capital Journal particularly lovely. Look at this. Fantastic. Welcome to the show. How are you doing?
Good. How you guys doing?
We're doing fantastic. Just another day for you.
Just another day. I've not read the Bain Capital Journal yet today, so maybe a summary.
I'll catch you up to speed. I mean, I would love to actually go a little bit back in time since the first time on the show. Can we go all the way back to Japan? I would love to know what drew you to Japan. How that set you up for the career that you've gone on to build. And then ultimately, coming back to the States and getting the lay of the land of Bain as a whole today.
Sure. Yeah. Well, first of all, it's great to be here. Going back to Japan, that's ancient history for me. But I went there first in 1989. I was a college student. I kind of wanted, this is when Japan was this big economic threat to the US and I was very curious as to what was going on. So I spent a little time there and got very interested in the culture and then I went back and worked for a Japanese company and for a bunch of years came back to the US and never thought I would go back because that's when Japan entered its kind of period of economic decline. But as I got into private equity, this started to become kind of an interesting opportunity, which is how could you get involved in investing in Japanese companies to improve them, turn them around. And it was tough in the early days, but the opportunity was to take these companies and reposition them and get them running better and growing again.
Is that culture of there is potentially an economic rival, a geopolitical rival, a threat, I gotta go see. Is that alive and well today? Because I feel like my generation was considering that with China. I know a lot of folks that took a couple years of Mandarin. I know some folks that went and lived there for a year or two, but it feels like the walls kind of closed off and there's less opportunity for the next generation to do that. Do you still see opportunity? Do you hire young folks at Bain that have gone on that journey or are we just in a different era?
No, I think it's still there, you know. I mean in the particular case in Japan, I would say it ebbs and flows, but now there's more urgency, you know, and I think there's a feeling that there's competition in China and Korea and actually back to the US with all the new technologies really being started and accelerated here.
So I think we're seeing a new period of urgency in Japan. And it used to be the fact that you couldn't hire the best Japanese talent. They wanted to go to the big companies, actually wanted to go to the government. But now they see western firms and private equity firms. Okay, these are firms that are going to help reinvigorate Japan and make it great again. I don't want to create an acronym out of that but we're seeing that and it's fascinating having been there 20 years and that was not the case when I was there in the early days.
How did the products that you were working on, the strategy that you were working on evolve during that time period? Obviously there's private equity deals broadly, but there's so many other strategies within that. I know special situations became a focus, but can you take us through a little bit of the strategy evolution?
Yeah, it's kind of interesting because when we got there, our assumptions because we're a global firm, we'd be working on these big global deals...
Businesses, but it turned out those were tougher. You know, they had currency exposure. They were competing against, you know, Chinese companies. And so we started focusing on actually the most domestic and therefore the most inefficient yet insulated businesses because you could control the macro variables and really get in there and run the businesses better. And I'd say our initial success in the first maybe 10, 15 deals were very domestic businesses: restaurants, food businesses, hotels, wind farms, a company that made mushrooms, you know. Like we all, you know, and it then evolved to now we could, you know, when we were more accepted, we could take on these bigger technology businesses, more, you know, the crown jewels of Japan. And that's where, you know, Kyoko, the semiconductor business came, Evident, which is a, you know, a very high-tech business. And so it probably took 10, 15 years, first of all, for the market opportunity to shift and maybe for us to be accepted to be able to work with these big global companies.
What was the team structure like or split on those types of deals? Was there a clean line between like deal team, operating team? Were you bringing in other executives to run the businesses actually do the work of turnaround or transformation once you're working with a target firm?
Yeah. Yeah. It's a good question. I mean, in Japan again going back to 2004 or 5, there really was not talent. You couldn't go hire a search firm and say, 'Oh, please go grab me one of these operating people.' So we did a lot to internally develop talent. We hired young people. We sent some of them to the US to get trained to circulate them back. Yeah. You couldn't find well-rounded deal professionals. So, we hired people who were great at sourcing. Yeah. And they were dedicated on sourcing. We hired operational people and they just did that. Yeah. And over the years, we got them to work together to develop that kind of well-rounded person, but it was a different model in Japan just based on the talent market. Again, it's evolved a bit today and now you see more professionals, but that was probably the hardest part of why it just, you know, took so long.
How's it been adapting your historical approach and skill set in traditional private equity to VC? In PE, you can have a business that's extremely challenged, has like, you know, some amazing elements to it or bones but like, you know, is not realizing its potential and you can wrangle it and get it back on the right track, get it growing, cut cost, whatever it is. In venture, I would say it's been, you know, the challenge in this industry is like you can have that same situation, but there's such a culture of like letting the founder call the shots and founders today have so much control and so you're kind of in the situation where you can like make some customer intros, introduce some execs, you can try to give advice, but oftentimes you're like sort of hands-off. Has that been any sort of like, how's that been? Because I imagine you on the venture side, you've gotten to the point where it must be like extreme frustration at times where you want to let the founder lead, but at the same time the things aren't working the way that they could be.
I get frustrated with buyouts as well. So, but listen, I think, you know, we started as a private equity firm but actually our roots were in kind of growth capital. Our first investment was, you know, Staples when it had like five stores. And so we started actually doing control deals but also minority deals having to work closely with founders. So I kind of feel like the culture of the firm and because we're a little more, you know, organic in nature, entrepreneurial even, you might say decentralized, we're comfortable with different modes of operation as a firm I would say. But listen, at the end of the day, the venture business it is different. You're making investment decisions with much more limited information, oftentimes almost no historical information. You're evaluating, you know, talent and the ability of that talent to make, you know, changes and adapt as technology changes. You're trying to think through what the future's going to look like and it's typically not a lot of information from what you might have seen before. And so I think we recognize that it's different and that's why we have people who are great at that and they have their own investment committee process and the way they do sourcing and make investment decisions is different. And it's different. We have a life sciences business and by the way it's very different there. They're all MD PhDs who are making, you know, judgments on compounds and clinical probabilities that, you know, you don't want me making those decisions. However, the wrapper around all of it is this kind of value-added approach. Whereas a firm and a platform, yes, we have relationships with big global customers that we can introduce to those venture companies. We know all the, you know, life sciences, the top 15 pharma companies and so we can bring together those as maybe buyers of biotech companies but also partners of those companies. We have a lot of, you know, we participate in the capital markets and so venture businesses are going to need capital or they're going to go public and so we can bring that, you know, synergy to bear across all these businesses. So the trick really is to have enough autonomy and trust in the team on the field to operate in the way that that segment operates to be best-in-class there but to bring a platform benefit to it and that's, you know, you get that right it's a very powerful model but you've got to be comfortable, you know, letting go a little bit.
How many mistakes can someone early in their career on the venture side of the business make before it's not a fit in venture?
You can make a lot of mistakes. It's obviously very important to have a few successes, but that is a business where, you know, it is about a much higher loss rate, you know, from a numerical perspective of deals and what you're looking for there is really asymmetric upside from a few situations. And again, you don't want to bring the batting average model to venture. It's not a plugging percentage type of thing. It is actually something around, you know, triples and home runs and such. And, but I'm saying a mistake could be like losing a deal that could have, should have been done but could have been a grand slam. But so it's not just about, you know, your misses. You could have nine zeros and a banger, but it's about... we call those the ones that got away. And listen, we study that in venture as much as we do in private equity. Yeah. Because what you're looking at there, what are our biases as humans that cause us to potentially apply too high of a discount rate to certain factors and maybe excessively fall in love with other things that may have worked for us in the past. And so, you know, that's something that's the continuous improvement process for the investment business that we engage in a lot. We do a lot of tear-downs of our past investments and ones that others do. We have a massive set of competitive intelligence on all the deals that are done and we shade them, you know, green, yellow, red, which is that a deal we would have liked to have done and how did it do and we go and we look at that and our, you know, all our teams do that. That's how you try to get better at something that inevitably you're going to make those mistakes.
There's been a number of businesses formed over and funded over the last few years that are effectively just private equity firms that are raising like venture capital and getting like venture style, you know, the teams are getting venture style economics where fundamentally they're just set up to buy businesses like a traditional, like a hold or something. How have you looked at those opportunities? To me, it seems like an amazing deal for the teams because like if you can retain 70% of the economics instead of getting like two and 20, why would you not do that? At the same time from the investor side it's like if I'm deploying into a traditional basically PE transformation strategy probably would prefer to get the majority of, you know, be paying two and 20 but not giving up the inverse.
Yeah. You know, listen, I've generally found that, you know, the way you structure and kind of cut up the economics, that's not ultimately the driver of long-term returns through the cycle and through, you know, different market scenarios. And we've seen a lot of things that seem like they're great in terms of innovative technology around that, but ultimately there's an alignment piece that, you know, is missing that ultimately comes back to roost. And so, listen, our perspective is we want to be very closely aligned with our investor base and we want to have a similar time horizon. We want them to understand how we generate value and maybe how long it's going to take to do that and then once we get there how much we want to continue to compound versus how much we need to kind of return. We want them to be focused on ultimately performance not fees and, you know, we're not public and so we're not interested in, you know, maximizing things that may not be in the interest of those particular investors and so actually I think the alignment question is critically important there and there are a lot of schemes and ways you can kind of whack it up but generally that doesn't lead to a sustainable advantage, you know, from our perspective but having alignment can be really critical.
There's been a story that's sort of crossed over from private equity world into the tech community, the venture world, which is Bending Spoons. And I'm interested in your perspective on rollup strategies in tech and venture. Jordi has asked several previous guests like will we see an American Bending Spoons? I'm interested in, did you have you gone down rollup lane before? What does that model potentially apply in Japan or did you think about it while you were there? Just some history and context on what's going on with that. I think Bending Spoons is in the news because they're acquiring companies that people know. But obviously that's not a brand new strategy.
No. And I think they're pretty interesting and it's a little bit back to the future because, you know, in the 80s and 90s in the US there were a lot of fragmented industries and that was one of the key modes and we did a bunch of those which were buying a platform and then rolling things up. And then they also, you know, got a little bit overbought because, you know, you remember these models where you're slapping these together with the hope of getting multiple appreciation but you weren't really improving margins in the business and it didn't work. So I don't think rollups are good or bad. What I do think is interesting, Bending Spoons and some of the newer firms is actually the ways in which they're bringing technology and a kind of technology-first approach to how they're sourcing and how they're driving value. And I do believe that is the future and that is a model that we should be focused on because, you know, our history is all about transforming companies. We've had a very deep, you know, value creation orientation. We have a whole big dedicated team of, you know, almost 400 people that get in there and drive change at companies and the ability to use, to apply AI to each step of that process to really turbocharge what we're doing. That will be the future and some of the aspects of Bending Spoons is doing, you know, is pretty interesting there. And so we're looking closely at kind of newer firms, pure-play firms that are able to do that. They're able to take, you know, kind of a technology-first approach to what they're doing because that's, you know, that's a huge opportunity for us.
How much of your time or the firm's time is focused on sort of like understanding the broader economic picture? A lot of in the venture world, you can sort of tune out interest rates, but it is on the cover of the Wall Street Journal, first Fed rate hike in three years. How much time is the broader team spending thinking about macroeconomics? How does that flow to the various teams? And what actually, what skill sets, what people do you need internally to actually make sense of the world reliably on an ongoing basis.
Yeah. So, you know, for us it has been a journey because we've always thought of ourselves as like the micro guys. You know, we're going to focus on the things we can control at the company level or a management team. But we increasingly became aware and the global financial crisis was the first, I'd say, wakeup call around this that macro factors, secular thematics, changes in the structure of the market can be big drivers of outcomes and that you kind of need a different skill and capability to be able to analyze that. You know, we all kind of thought of ourselves as we can understand that, but, you know, the data itself, you need some expertise to really be able to understand the signals from the noise. There's a lot of intelligence that can be gathered from just our portfolio. We have, you know, 600 businesses across the economy. We're in credit, we're in venture, we're in life sciences, we're in private equity. And so if we can get real-time information faster than our competitors, faster than the market and drive interventions, that can be a huge advantage, particularly in this world of heightened volatility. You know, if you can see inflationary trends building up in your labor base or in your material base faster than your competition, that can be a huge competitive weapon. So we set up a whole separate macroeconomic team dedicated people, you know, PhD backgrounds, those who also have a lot of connectivity to other sources of expertise whether it's on the energy and oil markets or whether it's on housing. And they come up with their own independent view. We don't have each of our deal teams go and come up with their scenarios for the US economy. They come up with that and then the deal teams are focused on taking that and applying it down to the sector and the company and seeing okay what will be the implications for that but centralizing this, getting much more expertise, getting better data, that's been, you know, the focus to try to stay ahead and with the volatility in the world today.
Yeah, that makes a lot of sense. Jordi, anything else?
Not for now.
Well, we're going to hop on with Max from Lora. Thank you so much for hopping on the show. Congratulations on all the progress. Obviously we'll talk to you soon. Have a good one.
Let me tell you about MongoDB. What if you'll hang faster than the AI market? Your business on MongoDB? Don't just build AI, own the data platform that powers it. And we have Max Junstrand from Lora coming back to the show.
Hey, Don. Hey, D. We're great to see you.
Yes, it seems like you're great. Partnered with Salesforce, but you didn't have to stand up and shake Marc Benioff's hand.
Yeah, he must really like you. No, I'm not one to get, you know, frame mogged and most people go to Dreamforce to buy Salesforce. We went the other way around. We went there to sell to Salesforce.
Okay, that's good. Yeah. What is the structure of the deal? What are you going to be helping them with? Like what did it take to get them across the finish line?
The legal and the compliance team are embedding AI into every way they work, right? They're big cloud customers, but cloud only gets you so far. We're helping them go all the way. And what's interesting with a lot of the SF-based enterprises is most of them have tried many legal AI tools before and they haven't received the success that they wanted and now they're moving over to Lora.
Mhm. It feels like the models are that, you know, you're constantly in the back and forth between the frontier is the best, then open source catches up. The frontier is the best, and then the companies that are building on top of models and building harnesses and building fine-tuned models and specific workflows that's going to give you a big lift and then somebody's like, 'Oh, the next model will just one-shot it.' Have you, you've lived through enough of these cycles now that I imagine you have a philosophy here? What's your philosophy?
When I started the company back in 2023, it was very easy. It was one model, GPT 3.5, and we built every single functionality in Lora as a boat and when the tide rises, everything improves. Okay? And that continues to be the case. Okay? And what's interesting now compared to 3 years ago is that different models are good at different things. So if you break down legal work, there's so many skills you have to be good at. It's drafting, it's reviewing, it's fact-checking, it's legal research. And so under the hood, what we end up doing is we use all the models, the new Meta models, the new Grok models, they're awesome, but we also continue using the frontier from Anthropic and OpenAI. And so what's interesting to us is where do you apply which model? And that's the IP that we have gotten really good at. And the reality is when you operate a vertical AI company, you need to make sure that you are getting the benefit from all of the R&D dollars that are getting spent in the entire marketplace, right? And if you were to take a very opinionated view and say, let's fine-tune a model to get, you know, 1% increase boost today, that entire asset is going to depreciate over time. And you're basically making your customers pay for a model that won't stand the test of time.
Yeah. Yeah. It's fascinating. How do you, oh, with the rising tide lifts the boats, you get the new capabilities. At the same time, there's probably old workflows that you built on top of GPT 3.5 that can now be run very, very cheaply. What is your strategy for cost optimization? Is it just like you go to OpenRouter and you pick a cheap thing or are you racking servers doing your own?
We build our own router. I think that's a super important part of the stack. And over the last weekend, we actually drove a 30 percentage point decrease in our overall LLM spend across the entire platform.
Which then becomes growth more. Yeah. It was a weekend project for the engineers in Stockholm. We run on Celsius and snooze.
Amazing. I met the Celsius founder and I was like, 'Hey man, our engineering team runs on this and he just sent us a fridge.' Like, I love the guy.
That's amazing. You know, the team is in total BLM and that means, you know, I did an article in Swedish and for some reason they translated it to English and so the headline became 'The Lora team wakes up with a metallic taste of blood in their mouth' and that is the status of the company right now. You see my decoration here. We are in this total, you know, land grab. Everything is happening all at once. You're seeing innovation across the entire stack. We have acquired five companies this year and it's been fun to founder mode, real founder mode. It's been fun to go deeper in the stack because in litigation, in transactional work, in legal research, it's sort of easy to do something on the shallow. And frankly, that was what we were doing back in 2023. But now we can go so much deeper. And I think that's also the places where the models don't matter so much. We're actually building much more normal software than we are building LLMs. Frankly, they're just the electricity that powers the house.
Yeah. So, I want to talk about diffusion specifically. I have a portfolio company that's in the middle of a transaction and I know how good Lora has gotten. I feel like a lot of this work that's been done could have been done in like probably a week if like people really focus but sometimes companies for whatever reasons like they want to drag something out like it could be beneficial to one side for one reason or another. So like what are the actual factors at play right now? I really want to understand like have lawyers, have lawyers like internally like software engineers they might have historically planned for a five-week sprint on a certain product or feature and now they're saying like let's ship it in a weekend or let's ship it in a week. Are lawyers specifically in-house like are they thinking that way now? And when are they not thinking that way just for kind of structural reasons?
In-house is absolutely thinking that way and so are law firms, right? Like AI is an existential opportunity and a threat to the current operating model. I was with a law firm here in New York last week and one of their partners explained how the work that he typically does, he does in 1/130th of the time with no dependencies on associates.
That's his practice, right? And so he has to figure out how do I now charge for this because working with a billable hour in his practice doesn't make sense. And at the same time the biggest opportunity is perhaps in in-house where organizations like Salesforce, Palo Alto Networks, etc. are bringing in these tools in-house to do more legal work. And what's interesting about legal work is that the demand is effectively infinite. If you could have legal intelligence review every contract, handle every claim, you know, fight every litigation, file every patent, like you would, right? And, you know, from an investment perspective, why not do a legal due diligence before you take an asset to IC? The reason you don't do it today is because it's expensive.
How are you thinking about this? How are you thinking about this arms race? Because you have on one hand, it's like cheaper than ever to litigate something, but it's potentially cheaper to defend.
And so and there could be a lot more losses. No, but at the same time if it's cheaper to defend, maybe a company's less likely to settle early, so there's less reward. Like there's a bunch of these different right...
Every judiciary is overflown by employee claims and, you know, people are using GPT to, you know, figure this out themselves and the companies are needing better tools to defend themselves at scale. We work with some of the largest insurance companies in the world on settling litigation claims, right? And it's so interesting like airlines, we work with Air Canada, they are spending so much money in litigation claims with customers etc. And I think, you know, if it's like if we develop bioweapons with AI like good news we can also develop cures, right? Like it's sort of everything will just move faster and I think operating in that world what's so interesting about being like this full AI native characteristic of a company is you can do that across every single part of the business and your operating model just has to be what a traditional software company did in a year we have to do in a quarter, right? Like four times this year, we have leveled up our end-year post for our revenue targets and now we are quintupling this year. Like we are setting targets that by traditional software standards would have been deemed, you know, gravity-defying and insane.
Yeah. Talk a little bit more about the M&A strategy. I feel like from your seat, I could imagine everything from like acquiring a small law firm in a niche area.
No, no, no, no, no. We are not a law firm.
You're not going to be a law firm, but okay. So are you acquiring other application layer companies or teams that are deeply in like the AI research or are you going to acquire a neocloud like how narrow is your lens when you're looking for acquisitions?
Yeah. Well, first off, we have a big part of our EPD team in Stockholm and in Europe and what's so amazing about that is I think we're the number one employer in our jurisdiction, right? We get our sort of top of the top of the mountain like we get the cream of the top. All the best engineers want to come work here. And legal tech is really hard to break into from a trust and commercial perspective.
But there are a lot of very technically talented teams who are working in the space.
And so at Lora we have what we call our fruit salad product strategy. When alternatives are offering apples to apples, we are offering the apple, bananas, oranges, and kiwi fruit. And we want to have all of the functionality in one single space. And what's so awesome about that for the lawyer is that they don't want to navigate 10 different apps. They want to have Word, Outlook, their document management system, and Lora. And when all of the functionality gets sucked into one single place, the barrier to entry gets lower. We're seeing this in a lot of the customers who are moving over to Lora from other legal AI platforms that they might have adoption, but they have very shallow adoption. They haven't gotten sort of second and third levels deeper where they're going, let's not just use this as an expensive chatbot. Let's really think about how it's going to transform either our practice or the way that we operate in-house.
Well, congratulations. Last question. Just very curious right now if somebody, like people are using just regular consumer chat apps for legal counsel. I don't believe that that gives them sort of attorney-client privilege.
Do you think that will be solved? Like will someone be able to make a consumer application that allows them to have that experience? Is that...
That's a very interesting question. The good thing is there are attorneys and lawyers and judges much smarter than me who are going to determine whether or not that's the case. There's going to be litigation around that of course and we just get to play around in that space. And I see Chase is about to come on here after me to give you one Bain story and he can fulfill the second half of it. I met Chase at a dinner in Paris with Chathan, our partner from Benchmark.
Very late in the evening, Enrique from Bain calls and he's like, 'Hey, I'm going to crash your dinner.' And we get into this stratospheric wine competition between Bain Capital and Benchmark, and I'll let Chase finish the rest of the story.
That's the best glasses land ever. That's hilarious.
Wine-off. Going glass for stratospheric wine. That line was from one of our French attorney customers who said that was the best dinner he ever attended.
That's fantastic. Well, thank you.
We love you, Max. It's always a great time. Come back soon. We'll talk. Thank you. See you later.
And we won't want to keep Chase waiting. So, let's bring in Chase Lochmiller from Crusoe as soon as possible. We got to get the other side of the story. This dinner in Paris. We just heard about it from Max Junstrand. Was the wine as good as they say?
It was, the wine was flowing that night. We went through a significant amount of wine and I didn't see the prices, but I think they were not cheap.
Stratospheric. What about the electricity? Is the electricity flowing? Are the chips flowing? How is progress in building out the compute capacity that people need?
Yeah, the electrons are flowing and they're turning into tokens and, you know, helping accelerate this new era of AI abundance. Yeah, I mean look, I think, you know, as demand for AI infrastructure has grown and demand for power has grown, you know, there's been a significant amount of investment in real-world, you know, power production capabilities and facilities that are becoming, you know, real significant bottlenecks towards this buildout. Yeah. And so, you know, each incremental gigawatt is getting increasingly more challenging. Now, you know, the positive side is, you know, that I think a lot of the investments and the foresight that we had at Crusoe are paying dividends today and if we look at, you know, all of the progress that's been made in, you know, the campus in Abilene, Texas, like, you know, our philosophy in sort of designing and building that campus was, you know, how do we build a gigawatt-scale computer? How do we build a single facility that can act as one giant coherent cluster that can train the next breakthrough foundational model that will lead to a step function improvement in the model capabilities. Yeah. That was the north star when we developed the campus and designed it. Today we're seeing the fruits of those labor.
Yeah. And you had to go through what it was. There was like a six-month period where it felt like there was a different article every single day about Stargate. If somebody sneezed in Abilene, there was somebody that was going to write an article. They're never going to be sneeze causes one second delay.
But it feels like you guys have gotten through that. And I haven't seen a front page article about some minute detail of the process in a while.
No, but, you know, what I was going to say is, you know, the benefits of that is, you know, the first two buildings which were the initial contract that we did with Oracle and OpenAI have led to the training of Astra. I don't know if you've had a chance to play around with but, you know, it's a really phenomenal model.
