Ellison's Media Empire, Ken Burns Joins, New Anduril Round, Cursor Mic Drop

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You're watching TBPN. Today's Tuesday, March 3rd, 2026. We are live from the TBPN Ultra, 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. You use corporate cards, bill pay, accounting, and a whole lot more all in one place. And you know who's going to be a Ramp card? David Ellison, 'cause he owns Warner Brothers now. So, David, if you're listening, just do it. Just onboard to Ramp. We have a fantastic show for you today, folks. Let's pull up the linear lineup because we got...

It's Hollywood day basically on TBPN. We got Matthew Belloni from Puck. He's the founding partner coming on to help us understand David Ellison's mission with Warner Brothers Discovery, Paramount, HBO, CNN, he's got CNBC, CBS, he's got everything now. Then Ken Burns is coming on to talk about his whole career in filmmaking. And of course we have a fantastic...

Explain film. Film for anyone listening that might be like myself.

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Film is the process of capturing images digitally or using celluloid. Do you know about celluloid? This is right. Right. Right. The filmmakers in the back know. So you used to need a specific chemical process. You'd probably be very hands-off on this process, but you used to create a strip of film with the thin clear and you put some chemicals on it and then when light hits it, what does it do? It makes, if a lot of light hits it, it makes it black and then that's the negative and then they flip that around by shining light through it to then expose the final picture and then you get a beautiful movie that you get to watch at the cinema.

Interesting to know how Netflix will change their tune on theaters. So Ted Sarandos has been basically trash talking movie theaters for a long time being like Netflix is the future. Tech is the future. He hasn't been super rude or anything, but he's been like, it's not really key to our strategy. Then as soon as he was in the deal for Warner Brothers, he was like, 'Yeah, the theater's amazing. It's not going anywhere. Like we're excited to invest.' And we will talk to Matt Belloni about how long that lasts until he starts talking trash again. But he's already...

Netflix is up 22%.

Oh yeah. The stock, the shareholders hated the idea. They hated the idea...

loves their enemy to overpay for a handful, a basket of legacy assets. There is another thesis on why Netflix stock has mooned and it's mostly around this concept that Ted Sarandos just stunned in a pair of jeans at the SAG Awards. So look at this. I mean you see this, how can you not want to buy the stock? This is not financial advice, but you see a guy pull up in a fit like that, you're like, 'This is going to moon. I got to get in. I'm going turbo long. I'm top blasting.' You're buying the dip if it's dipping.

Top blasting. You're top blasting and you're buying the dip when you see a man pull up in $2.8 billion jeans because that's the amount of money that Netflix got wired because of this deal. That was the breakup fee. For some reason, I had it in my head that the breakup fee would be the other way, but not too shabby.

In fact, Netflix got paid and Matthew Belloni got a thousand likes on this post. So, my question is, there's a ton of debt going into this deal. Will I be able to watch The Sopranos on Netflix? Will I be able to watch The Dark Knight on Netflix? It's a complicated question because content licensing deals are not one-size-fits-all. They're subject to windowing and certain markets. So, if Netflix has really high penetration in Germany and HBO doesn't, it might make sense to license it there but not elsewhere. But I just want to know broadly, what do we expect from Paramount, Skydance, Warner Brothers, Discovery, CBS, CNN, like what is their plan? I think they have Shark Week now, right? In Discovery. They got the Food Network on HGTV. HG, you can watch the Property Brothers.

Maybe on Netflix one day. Who knows? But this is like the most extreme scenario. We talked about a post where someone was like, 'Oh, like you know, masterful 3D chess. They got Netflix to overpay for this and now they're going to be so indebted because the deal got so big that they're just going to have to come to us and license 100% of the catalog on day one.' I don't know if that's true, so I wanted to dig into it. Let's talk about it.

So, just to recap and set the table, David Ellison, who is the chairman and the CEO of Paramount Skydance, agreed to raise his offer for Warner Brothers Discovery to $31 a share. A lot of people, myself somewhat included, thought that Netflix was at least going to counter a little bit, but they folded immediately. And so the co-CEOs, Ted Sarandos and Greg Peters, they didn't counter and they said, 'You got it. Wire us the 2.8B.' And they did.

So the result is that David Ellison is handing over $111 billion in exchange for Warner Brothers, HBO Max, CNN, and the other cable networks. There was this whole political angle in DC about how interested would Trump be in the deal? And apparently as soon as he found out that Netflix was not interested in the cable TV assets, he became less interested in the deal because I think he watches a lot of news, but he probably doesn't watch a lot of Batman reboots and doesn't really care what happens there. And so, you know, it's just like a different thing. It's like, no, you know, he's not turning on the latest DC cinematic universe film and be like, they're taking shots of me. But if he turns on CNN and they're taking shots of him, he's like, I care about that. Right?

So in terms of the financial situation, they're levering up. They took our advice when we started the show. We told everyone rule number one is lever up and they did. So Paramount is already levered. 10 billion in debt.

Yeah. To the gills.

10 billion of net debt. It's like 13 billion, but they have three billion in cash. So 10 billion in net debt, three billion of adjusted EBITDA with which to service that debt. Reasonable but still pretty high leverage, 3x. Paramount will be adding 60 billion of debt. So all combined the company will have something like 70 billion of net debt, 79 billion of total debt with roughly 12 billion of adjusted EBITDA. And so when you're operating north of 6x leverage, that leads to different decision-making, higher discount rates, higher interest rates, it can shift the focus to near-term cash.

So Netflix is a logical counterparty here because it can pay, it has the cash, it has a lot of cash flow to pay for global rights at scale and has a long history of paying top dollar to deploy capital to known franchises. And also Netflix is in a particularly interesting financial position. So, they've been an incredible case study for operating leverage, a true overnight success. Something like 20 years grinding up the subscribers, grinding up the revenue, investing more and more in content.

And if we can pull up the chart, either scrolling down on the tbpn.com newsletter or going to the third post in the timeline, you will see the small bars, the red bars are the revenue and the little dots that have the numbers on them, which you can't really see, show how much they're investing in content. And so for a long time, for something like almost from 2002 to 2018, so 16 years, Netflix was like, we made a hundred million. Let's make a hundred million worth of content. Let's buy $100 million worth of content. And then they were like, wait, we made a billion dollars. You're never going to guess what we're going to spend on content. Exactly $1 billion. And then they were like, okay, we made $10 billion. This is going to shock you, but we're spending $10 billion on content. And so they would just spend exactly what they made on content.

But that changed. That changed in 2019, 2020 COVID, the amount of subscribers spiked, the amount of revenue spiked, then they launched the ad model. Took them a while to figure that out, but eventually worked. And the business kept growing. The top line kept growing, but they ran out of stuff to buy. They ran out of stuff to make. And even though they were paying top dollar for all these different assets, they sort of held their content budget flat, their revenue went up and that's of course operating leverage. So profits to pay for Warner Brothers Discovery assets potentially and so they have the money to spend.

But also they're direct competitors in streaming with Paramount Plus and HBO Max. And so there's a question about how friendly will they be? You know, if you license all the good HBO stuff, people will unsubscribe from HBO.

Yeah. Or Paramount.

Or Paramount. Yeah. Exactly.

It just makes the Paramount subscription offering less competitive.

Totally. Totally. So, it's this delicate balance. There's also potentially, and this was from the president of Fox, there's potentially this idea that regulators might attach a condition to the deal or at least signal or put pressure that the combined entity should maintain its tradition of licensing and selling content.

Yeah, Lachlan yesterday said, this is Fox CEO Lachlan Murdoch, expects that regulators will impose a third-party content licensing condition on Paramount and Warner Brothers Discovery $110 billion merger. He said, 'We wish them the best of luck. We've seen this regardless of whether it was Netflix acquiring Warner Brothers Discovery or Paramount acquiring Warner Brothers Discovery. There will be conditions put on this transaction which would require a producer of that size to continue to sell their content to third-party platforms.' This was yesterday up in SF.

Yeah. So I ballparked it at like maybe 70% chance that in the next two years there's some sort of meaningful content licensing deal between Paramount, Warner Brothers Discovery and Netflix. And so, but I do think that there will be limited windows, some selection in markets where content is available and pretty much everything will be non-exclusive. So if you know some, you know like the original Dark Knight trilogy goes on Netflix, it'll probably still be on HBO, on Paramount Plus. The real key brand assets like the Sopranos and the DC Universe properties, those are much less likely to be licensed. And there's basically no world where Netflix gets the first streaming rights to like tentpoles. You want to maintain those. You want to give the super fans a reason to stay subscribed to begin a subscription on your now two streaming platforms.

There is a lot of potential upside for the Ellison Empire. I think of this like buying a house and then getting a roommate. Like you're levered up. You got a crazy mortgage.

That's such a good example, right? You buy a house, you're living large, but you got a roommate.

Yeah.

And the roommate's Netflix and they're paying the rent to you, you pay the mortgage,

and you kind of hate your roommate.

You kind of hate your roommate, but you're long the real estate market. And then as you get promotions, as you get more cash flow, as you get more adjusted, you can pay your mortgage.

And as you pay your mortgage down, you wind up with a really cool asset, which is this nice house that actually has the extra bedroom.

They're like, 'Look, we had a good run. I really love the way you would put dishes in the sink and not do them. I really love the way you would watch movies loud into the night and yell.'

Yeah.

But I think it's time for you to move out and I'm going to take the mortgage myself. I'm good for the full bill every month. I'm good.

But there are a lot of similarities, right? Because what are you getting with Warner Brothers? You're getting a whole library of IP that's very valuable potentially for like a hundred years. Porky Pig is from 1935 and I still know this guy's name and I know like I could draw a picture if I needed to. And so if you believe that intellectual property will have a very very long lifespan and it's incredibly valuable, but you have to finance it with debt. You have to work really hard to pay the bills in the short term. You could wind up with a really great asset even if you have that roommate for the short term.

The other interesting question was what does this reveal about the Ellison family's worldview for the future? Because on the one end of the spectrum, you have Larry Ellison who seems incredibly AGI-pilled. He's going crazy into AI data centers. You disagree with this?

Well, I think remember I think we did like the chart of who's the most AGI versus AGI-pilled.

So he needs AGI but he's not AGI-pilled.

Why is he not AGI-pilled? Oh, just because of his rhetoric and he just doesn't do that many podcasts. Get him on Dries.

Yeah. Yeah.

We'll see what he says. Maybe his timeline's like ASI next month, you know? Who knows?

Yeah, his...

You need to sit down your family today.

Is obviously very AGI-pilled.

Does he have a Mac Mini? That's the real question.

Funding data centers is generally aligned with a future where AI is an important technology.

Yeah. Levering up massively, right?

Yes. Levering up.

He believes that AI is going to be big, right?

Yes. Yeah. He believes AI is going to be big. But then he also believes or in concert with David his son believes that AI will not destroy legacy Hollywood assets that like no matter how many dollars you have, no matter how much compute you have, no matter how many generations you can use the latest video model, you will not just be able to create a superhero that kids will dress up as at Halloween. And I think that's true. And I believe both of these.

You're going to be dressing up as Slot Man next Halloween. Slot Man.

You're going to be like, 'Whoa, you don't know this superhero that I prompted myself and no one knows but me. It's a highly... Don't you know the internet's highly personalized now?'

No, but you can dress up as like a superhero who has like these black ears and looks very similar to Batman, but it's not Batman.

Not the non-IP infringing Batman. I think the... Yeah, the...

literally describing Slot Man.

Yeah, Slot Man. You're going to dress up as the knockoff Slot Man. I don't think anyone's going to do that. I think Batman's super...

I think broadly media becomes like every piece of media that the audience gets smaller and smaller. Everything becomes more and more personalized.

I like maybe, yeah, like I think IP still has like a fairly big role in that, but you want to be on the cutting edge. This idea of like Schelling points and like things that like yes, I can have a video that's perfectly tailored to me, but I like talking about movies with Ken Burns. I don't...

They're calling you Temu Batman.

Yeah, Temu Batman over here. Get out of here. Temu Batman. I don't know. But so maybe that's not your worldview, Tyler, but it's clearly the worldview of the Ellison family because they believe in this barbell effect. They believe in the value of...

Yeah. I would, you know, another way to look at it is like you could get this hyperpersonalization but it could be around existing IP so you get to...

watch a personalized version of Batman content that's targeted just for you individually but the kids are still dressing up as Batman.

And we've already seen a glimpse of this with video games. There are video games that leverage existing intellectual property but allow you to customize your character in some way. Put more skill points into intelligence and cast spells versus strength and use a sword, right? Like you can have your own experience if you play, I mean even like the Arkham Batman series, it's pretty linear, but you can play it more aggressively. You can play it more stealthily and you can experience a Batman world that is more stealth focused or more fighting game focused and that allows you to experience something that is unifying and we can discuss. Okay, you played the same game as me. You understand the same character as me, but we had a different experience. And I think AI accelerates that and makes it more valuable, not less. I don't know. I'm somewhat pilled on this, but I respect your differing worldview that you will be enjoying Slot Man.

Enjoy. So by the loosest counts, this is the ninth or tenth time that Warner Brothers has changed hands since it became an independent movie studio in 1923. There's some of those acquisitions that have been like divestitures or reorganizations within other companies. But just like a fascinating thing and I do think that David Ellison is going to go the long distance with this. I think with a little careful financial management and probably a few content licensing deals like this might be the last one. He might be running this organization for his entire career. He's been working in Hollywood since he was a kid and has been very dedicated to this particular industry for a very long time. And so I don't think he's going anywhere. And so get ready for a whole bunch more content. Apparently they're going to make like 30 movies a year which is a dramatic step up. I think that they're going to try and actually ramp up the production.

Are you sure that's not per day?

I would hope so. With AI, it's totally possible. As long as Tyler over there is buying tickets to see Slot Man number 17, Revenge of the Slot Man. I think that there's money to be printed. Let me tell you about...

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Slot Man 2: Revenge of the Trough. Revenge of is going to hit a ton of breaks for sure. Let me also tell you about Vibe.co where DTC brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta.

And if you are inspired by the whole Netflix, Warner Brothers saga, you should head over to the Goodwill in downtown Brooklyn. Tom from Vanity Fair says for $14.99 you can Zaslav Max. This spring they're selling a nice Port Authority puffer vest from Warner Brothers Discovery. That is a good pickup. Zaslav is a deals guy, Hall of Famer for sure. He was involved in launching CNBC.

He also helped create MSNBC, became the CEO of Discovery in 2006. And just a whole bunch of other crazy deals. Love to have him on the show once all this settles down. Like his full career is fascinating and he's been loved, he's been hated, he's been everything in between. Lots of people have opinions, but there's no way to be unhappy if you've been riding with him as a shareholder because he got every penny out of this thing. He certainly did.

According to the Washington Post, there was a researcher skeptical of Havana syndrome. So he tested a secret weapon on himself. In 2024, a Norwegian researcher skeptical that pulsed energy weapons could do damage to human brains built a device and tested it on himself. It didn't go well. So this is crazy. He built it, tested it.

Working in secrecy, working in strict secrecy, a government scientist in Norway built a machine capable of emitting powerful pulses of microwave energy. And in an effort to prove such devices are harmless to humans, in 2024, he tested on himself. He suffered neurological symptoms similar to those of Havana syndrome, the unexplained malady that has struck hundreds of US spies and diplomats around the world.

Yeah, we don't know how to make scientists like this anymore.

This is glad they're still out there. Extremely bullish for the tinfoil hat industry.

Because I believe that the actual underlying basis for the idea of a tinfoil hat, of course we use it somewhat sarcastically here when we're discussing hypothetical conspiracy theories, but the tinfoil hat is supposed to eliminate microwave radiation and various EMF pulses. And so if you're worried about getting Havana syndrome, maybe pick up an EMF-proof tinfoil hat or maybe just some sort of other, there's probably a better way than just tin foil around a ball cap. But startup idea, startup idea, build a real tinfoil hat that actually protects you from Havana syndrome. That's the real American dynamism startup.

Thomas Maxwell says, 'We have to stop this. I'm not eating a quote Jacob. Eat a Jacob.' I haven't seen this one before. It's 20g of grass-fed protein, no seed oils, nothing artificial, sweetened with organic honey. This definitely resonated. 24,000 people agree. But I think there's Tyler, you should do a taste test of all the different...

protein bars named after just regular dudes. David bar, the Jacob bar. There's probably more. You got to get on it.

There are a lot of these. The name, I mean Lucy named after a person, it was a whole trend for a while.

It was Cursor would like a word.

Yeah.

This was great.

Incredible.

They came out yesterday. They had heard the FUD on the timeline around Cursor.

They came out yesterday and Bloomberg got some of their data. Their annual revenue topped two billion in February according to a source, a figure that underscores the fast growth of the coding assistant. Sasha summed it up well. He said, 'Cursor sees a timeline turning against them. Quietly give Bloomberg a two-billion-dollar press release. No post from the company or founders. Haters squashed. True comms masterclass.' And Michael Tru actually did come out this morning and says, 'We believe Cursor discovered a novel solution to problem six of the first proof challenge, a set of math research problems that approximate the work of Stanford, MIT, Berkeley. Cursor solution yields stronger results than the official human-written solution. Notably, we use the same harness that we built a browser from scratch a few weeks ago. It ran fully autonomously without nudging or hints for four days. This suggests that our technique for scaling agent coordination might generalize beyond coding.'

So very very cool to see the progress from them and clearly doing something right in the enterprise, right? Just because like everything you see on the timeline is like totally so many enthusiasts.

One of my buddies is Kyle Russell. I worked with him like a decade ago. He's at a company called Valon. And he posted, so Valon, they make SaaS for mortgage services. He says it's very boring. But we're basically getting them all to flip from legacy software and are rate-limited by BizOps people being able to onboard them. So we're going to try instead to think about it in terms of what tokens do we need to extract from the org in order to deploy fast. So he's in this like AI deployment lead role. And he went I think pretty viral saying this morning one person of his team said, 'Hey, can you unsub me from Cursor?' And somebody says, 'Done.' And then a bunch of people said, 'Same, same. Like I don't need it. I'm happy with another program.' And Kyle said, 'Today we announced we're removing 90 Cursor seats because they haven't had any use in two weeks.' And it is like it's flipped from like the most cutting-edge thing to like it's clearly very sticky because you see the ARR numbers that this like ultra-frontier coolest hottest thing is getting some like FUD.

And then Sasha broke this down where he was like the timeline's turning against them. So you have to provide some evidence that like you're not cooked because like the timeline is very much like, oh well, like you're not the hottest thing anymore. You're not the coolest little thing for like the people that are on the most frontier. And so no, you know, just squashing the haters with a two-billion ARR number, which is fantastic.

Up from 1 billion in Q4, which is just insane.

Yeah. And so yeah, I mean I think like there's just something about the, it goes back to diffusion. We were, I was debating this with Tyler last night about how much of AI adoption is just actually getting the forward-deployed engineer in, actually getting people to change their workflows, onboarding. Like there are certain people that will just bounce from the most frontier thing, oh this model is better, I'm on Codex, I'm on Claude, I'm on Codex, I'm on Claude back and forth. But for a lot of companies they need a little bit more handholding. And so there's a whole massive chunk of the economy that can be transformed by developing great products and then actually getting them in the hands of businesses.

R for Rock is hearing Cursor maybe in the midst of a new raise at 50 billion to be a meaningful markup from 30 where they were sitting again in Q4.

Yeah. What does DD say? Everyone in the tech-adjacent bubble thinks they are wholesale ditching Cursor but enterprise diffusion is glacial. Most of the world just got a hold of it. It's a good point. It's a very good point.

Well, in some good news, Mark Zuckerberg has purchased a mansion in Miami for $170 million. This was such big news that we had to pull it forward from the mansion section on Friday to talk about today, but there is a little bit of a black pill here. We can go into it. First, let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and mobile while Railway automatically takes care of scaling, monitoring, and security. And let me also tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco.

So of course, Mark got this because of California's wealth tax, which if it goes through, he would still be subject to at least a one-time payment, you know, which would get litigated, of course. What we need now is a picture of him in his backyard recreating the Ben Affleck smoking meme.

Wait, why?

Because there's this new national wealth tax that Ro Khanna and Bernie Sanders are pushing. So he's like, he just moved. He just got this new place across the country.

Yeah.

Probably overpaid to a degree.

People are just going to be like, actually, I live in international waters full-time. I don't live in America. I don't live in any country actually. I live in space. I live on the International Space Station or something. Very very tricky. $170 million sounds staggering. A 5% tax on Mark Zuckerberg's wealth over 11 billion. That should have been his shopping budget because in dude math if you save money you just have a free license to spend it. So you're like by moving to Florida I'm effectively saving myself 11 billion. I can spend that right. Isn't that how that works?

Exactly. Meta chief executive Mark Zuckerberg and his wife Priscilla Chan have paid $170 million for an under-construction mansion on Miami's sought-after Indian Creek Island. The deal closed Monday. The purchase set a record in one of the country's most expensive to date. The current US record is held by billionaire Ken Griffin. He spent $238 million for an apartment. That is a crazy amount of money for an apartment, but I guess it's in a good building.

This is a lot of apartments. The Florida record was set last year when a waterfront compound in Naples traded for 225 million. I feel like this isn't counting Ken Griffin's compound that he's building because he's built...

Yeah, 'cause it's multiple properties.

He's bought multiple properties.

Okay, here's where it gets crazy, though. The sellers are Dr. Aaron Rollins, a cosmetic surgeon to the stars, and his wife, real estate agent Marine Rollins. The Rollinses paid more than 30 million for the roughly two-acre site in 2020.

Wow. Flip and not real estate agent. Don't want to go up against them. They know what they're doing.

Plans called for a nine-bedroom home measuring about 30,000 square feet with a dock and a swimming pool. Amenities were to include gym, hair salon, and massage room as well as a 1,500-gallon aquarium and library with a secret passageway.

Zuck does need a hair salon in his house 'cause he's always changing his hairstyle. Sometimes he's got the Caesar going, sometimes he's got the fro going. So this is the Gen Z.

This is elite for him. Who knows what'll go next? Maybe he'll have long flowing locks like Fabio. That would be the good next move for him, I think. How many gallons is the aquarium?

1,500.

Is that a lot?

That doesn't seem like that much.

What can you put in there? Can you put a shark in there? No way. Some fish.

How big is Keith's? Keith's aquarium is massive in Miami. You can scuba dive in it to clean it up. Anyway, congratulations to the Zuckerbergs on their new property. It looks beautiful. And without further ado, we have our next guest in the Riverside waiting room. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And we have Matthew Belloni from Puck. How are you doing?

Well, what's going on?

Doing great. Thanks for having me.

Thanks for hopping on.

Great to meet you.

I enjoyed your podcast with Dylan earlier today and I wanted to dig further into the actual merger. I mean, it seems like we're sort of done now. But how has the process of covering this been for you? What were the key turning points? Like what was most exciting for you?

Well, I'm learning a lot. Certainly didn't know what a ticking fee was until covering this deal. Learning a lot about the debt market, learning a lot about the contours of raising money in the Middle East. All sorts of fun things. But yeah, it's been a wild moment in Hollywood for the past five years. Basically, it's a time of tremendous change, tremendous disruption. A lot of people are really scared and don't know what's going to happen. So it's been interesting for sure.

Is that just a combination of like COVID plus streaming plus consolidation plus AI or is there like one story that sticks out to you?

You can throw in a pretty crippling labor strike in the middle of that and it's been one thing after another. About five years ago, the end of the peak TV era, the Netflix correction, where the market decided that Netflix had to make money, streaming subscribers was not the end-all be-all. That created an absolute correction and pretty much I would call it a content recession within Hollywood. And that's trickled down throughout the industry. Fewer jobs, fewer productions. You add that in with the flight of productions overseas, everything from the strike that happened in 2023, which gave these companies an excuse to really re-evaluate the level of production. Throw in the LA fires that disrupted so many different people. And it's, you know, you guys are in LA. It's a really interesting and for many people scary time.

Yeah. Explain the overseas thing because I'm familiar with Atlanta and I believe Toronto. But are productions really moving to other continents now?

Oh, yeah. I mean, the UK has been extremely aggressive. They have for many productions a 40% incentive and they're willing to give you incentives on what's called above-the-line costs. Those are the actor, director, writer. Those are the main talents in the film. That is a huge incentive because it essentially subsidizes you for Tom Cruise's salary, Ryan Gosling's salary, and even in some of the more aggressive US states. You won't get that in California. So you know, it's a game changer when they are doing the line. I just reported on this movie today, Project Hail Mary, an Amazon movie that's coming out in two weeks. The gross budget for that movie is $248 million. The actual net budget is a little under 200.

Okay.

So you're saving 25% by shooting this movie overseas?

Interesting. And do those come as like tax credits upfront or is it more like a tax deduction on profits where if the movie costs 250 to make and it makes 500 then I'm saving 25% or do I just get the money basically upfront?

It's a rebate. I'm actually not sure. I think it depends on when you actually receive it. But it's a rebate for the qualified spend in the jurisdiction that is giving the incentive. Yeah. So if you are going to get an incentive from the UK, you actually have to have the work done in the UK. And that means hiring local crews. It means using a sound stage in the UK and having the production actually shoot there. And you can have films with multiple incentives from multiple jurisdictions for multiple aspects of the production. Everything from the post-production to visual effects, those can be subject to incentives for doing the work in a particular jurisdiction.

Really quickly, I think we have the wrong mic selected. Would you mind adjusting it? Because I think we're on your laptop mic and I'd love to get that Shure SM7B working because I know it has higher audio quality if you can switch it. And while you look at that, I will tell the audience about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Any...

How we doing there?

Is that better?

No.

Almost.

Almost better.

You're flipping.

Um,

it's okay.

How about...

Let's see.

Same as...

Any luck?

How about this? Is this...

Oh, that's much better.

There we go. There we go. I really...

Wow, you have sound effects. I'm very...

Yes. Yes. Everyone I wish I had an air horn.

Some of these are not sound effects on a soundboard. Some of these are real folks in the studio clapping with their hands. We have both. That's true.

I can't be trusted with an air horn.

Yeah. Yeah. We had a lot of fun. So talk about the reaction. I know that we talked to Ashlee Vance who's a documentary filmmaker and he was voicing a little bit of worry that if Netflix acquired Warner Brothers Discovery that there would be one less buyer and is this any better for the average filmmaker who wants to go out and get the best price for their product, for the film that they've been working on? Are we still telling the same consolidation narrative or is this somehow structurally a little bit different?

It depends who you talk to, but I would argue that this is actually worse, okay, for creatives because this is the actual smooshing together of two legacy studios. When you talked about Netflix buying Warner Brothers, Netflix is not in the theatrical movie distribution business currently. They do not do movie theaters. So there was a certain class of movie that was going to remain a Warner Brothers movie. Now Netflix makes a lot of movies on its own but those are often smaller. They don't have as much ambition as the big theatrical movies. They do some of those too but that Netflix was at least positioning it as we are going to leave Warner Brothers alone. They also were not in the production business in television for other buyers. Everything that Netflix made was for Netflix. Whereas Warner Brothers makes shows for its own platform HBO Max, but also for Apple and for Netflix and for many other different platforms. So they claim that that would be at least another opportunity for buyers. Here with...

Paramount buying Warner Brothers, this is going to be the combination of two television studios, the combination of two film studios, and ultimately down the line that is going to mean fewer jobs. Now, if you talk to the Paramount people, they say they are committed to making 15 movies for theaters for each Warner Brothers and Paramount. That's 30 movies a year, which would be an escalation for both of those companies. So, they're saying they're going to be more. But the history of the movie business has shown that when two studios merge, ultimately the output is reduced and that trickles down to creators.

What do you think about Netflix's future theatrical plans? Ted Sarandos was talking about the future of movie theaters, painting a more optimistic vision. Do you think any of that sticks?

2.8 billion burning a hole in the pocket.

Yeah, I mean, I...

I don't think Ted is going to use that $2.8 billion to all of a sudden make movies for theaters. Yeah, I just don't think so. I think it's going to be a continuation of their current model, which in many ways is designed to put the theaters out of business. It's designed to give you first-run A-list filmmaker, A-list star movies at home. Even 10 years ago, a movie like The Rip with Matt Damon and Ben Affleck, that would have had a nice robust theatrical run before hitting home video. Not true with Netflix. Now, what Ted is saying is that they have had some constructive stunt experiences with theaters lately. They put K-pop Demon Hunters in theaters. They've done a couple of other things. They did Stranger Things in theaters. And I could see Netflix doing more of that, using theaters essentially as a marketing device for Netflix, but I don't see Ted all of a sudden saying, 'Oh, you know, through this process of looking at Warner Brothers, we have determined that the theatrical model is a good one, and we're going to all of a sudden give our movies a 45-day theatrical window.' Don't think that's happening.

And do you think, how much of that do you think is Netflix just, well, if we have a crown jewel asset, we want people to go subscribe to Netflix and see it there first, versus a lot of times they don't know what's actually going to work and the beauty of the Netflix model is they can stuff something like K-pop Demon Hunters on there, it can effectively like go viral in their algorithm and they don't need to do the billboard campaign, the theatrical rollout and take all that risk. So focusing more on like downstream, we got something that's already working. Let's make a musical singalong version or a promotional version for theater.

That is absolutely the benefit and Sarandos has said multiple times that the best marketing platform for Netflix content is Netflix. Now, I recently had the head of Sony Pictures on the town and he, I think correctly said, you do not make stars on Netflix. You do not make franchises that last for decades on Netflix. And the way you do that is in movie theaters with a big robust marketing campaign that tells the world about the product. So that even if you don't see the movie, you're at least aware of it so that when a sequel comes out in four years, maybe you see that one, but if a sequel to a Netflix movie comes out, nobody except the people on Netflix know about it.

Yep.

Yeah. Yeah. I saw Ryan Gosling on the Hail Mary billboard and I was like, 'Oh, like we should go see that.' And somebody was like, 'Well, what is it?' And I was like, 'It's a Ryan Gosling movie.' Like...

Right, what else?

And that's a perfect example. I mean, Amazon had the choice whether to make movies just for Prime Video or to do theaters. They are going big on theaters this year with a full slate of theatrical releases. And they and many others in town believe that the best way to create movie franchises and to create demand is to first put the movie in theater and then debut it on the service.

Yeah, it's interesting. It reminds me of like an apparel brand doing popups specifically not as like a real revenue driver but to just deepen relationship...

with their...

Now don't get me wrong, these traditional studios, they need these movies to make money in theaters. That's their whole business. And the reason you are spending $50 to $100 million on a marketing campaign globally is to generate profitability in theaters. And then you get the waterfall, we call it in Hollywood, the waterfall of revenue that first you go to premium video on demand, then you go to subscription video, then you go to TV, then you go to free TV, then all of a sudden you're syndicating the content all around the world and it's in your library forever. The reason why Warner Brothers is going for $111 billion is not because they had a nice run in theaters last year or because HBO has had some hits lately. It's because they have a 100-year-old library of films that is incredibly valuable to exploit across all platforms and because HBO has an amazing brand.

Yeah. So, talk about content licensing at the new entity, the combined entity. It feels like with 79 billion dollars of debt, cash flow is going to be important in the short term. What's the probability that we're watching Sopranos on Netflix or watching something from the catalog on Netflix in the next couple years?

It's funny because Sopranos has been the one title that Netflix has not gotten.

Yeah.

And HBO has kept that. Not the one, but the one big one that everyone's waiting for. And this debt issue is not new. The Warner Brothers Discovery transaction, putting those two companies together, that created 50-some billion dollars in debt and they needed to make money fast. And the past three years have largely been about servicing that debt and bringing it down. So, you've seen tons of Warner Brothers shows and movies on Netflix and they do it because they have to. I mean, at one point, I looked on the Netflix top 10, and six, I believe, of the 10 movies in the top 10 were Warner Brothers titles, and they do it because they need the money. I mean, we know Sony Pictures just did a reup of their Pay One deal. We call it Pay One because it's the first pay platform for subscription viewing of these movies. They got $7 billion out of Netflix over a long period and globally. But that is for the first run pay one window for Sony Pictures movies to go to Netflix. Incredibly lucrative. That's what Netflix was buying when they wanted to buy Warner Brothers.

So Sony and Netflix already have this relationship. Is there any chance that Sarandos goes shopping with his 2.8 billion bonus and all the cash flow that he has? He's sort of, you know, kick the tires on one big deal. Is Sony Pictures in play at any point in time?

The Sony Corporation in Japan has said that they are not interested in selling Sony Pictures. It would seem to be the obvious choice because Sony is the one Hollywood studio, the traditional studio that does not have a general interest streaming platform. They chose not to enter the streaming wars. And that would make it an attractive buy for Netflix because Netflix doesn't need a global streaming service. They already have one. They could pick off the Spider-Man franchise. They could pick off, you know, all the production and distribution capabilities that Sony has for theaters. Would seem to make sense for Netflix, but there has been no indication that Japan is willing to sell.

Yeah.

Is any part of the Ellison's strategy, does AI kind of factor in at all? I've had this kind of like loose theory that this IP, Warner Brothers IP, could potentially be more valuable as AI gets better because you can create so many different variations on top of that IP. But...

It's also unique. It's not replicable.

That's it. That's it. It's like you have a monopoly on the IP and if it becomes substantially less expensive to create new film and television, you know, TV shows, movies, etc., maybe the IP is more valuable. But what's your take?

Yeah, I have always thought that one of the reasons why Netflix wanted Warner was because they saw what's going on with YouTube and the volume of content that YouTube is soon going to be able to host and eventually create themselves and Netflix is saying to themselves, okay, so if anything is possible in streaming and with AI you can create AI-generated shows, music content, movie stars, whatever, what are we doing? What do we have that is defensible here? And they're looking at Warner and they're saying, 'Okay, well, we don't have a Batman. We don't have Harry Potter. We don't have, you know, this hundred-year-old library of known quantities that cannot be replicated by AI, at least not yet. So, we need that.' And Netflix has had a hard time creating franchises. If you can count on one hand the Netflix franchises, the things that they own that are meaningful in the world. Stranger Things they own. Wednesday, they don't own. Amazon actually owns the Addams Family because they bought MGM. There are not that many franchises. You guys probably don't even know what they are.

Yeah. Yeah.

Yeah. Yeah. That's fascinating. Can you take us on a tour of who is actually involved financially in this deal? You mentioned that it was sort of like a whirlwind tour in the Middle East. A lot of different funds coming in. I imagine that it's some overlap with the tech investors that we typically talk about in this show, but...

Yeah, Apollo is in this.

Yeah.

I believe Blackstone is. I'm not 100%. There are three big PE firms that are providing a lot of the debt financing here. And then there's an interesting question of whether the Middle East money that was initially floated as being part of this deal is still in there. There was a Saudi fund, there were Qataris, there was one other fund and they were not in the press release.

Okay. So, I actually need to ask Jerry Cardnali of Redbird whether they are still in this deal. Sure. Because, Redbird has been kind of the big financial backer and consultant on raising this bid together. And obviously Larry is backstopping the whole thing. We would not be having this conversation about a company with a $15 billion market cap, which is Paramount Skydance, acquiring a company like Warner Discovery in a $111 billion deal if not for the backstopping of Larry Ellison himself.

Yeah.

And that was the key factor. He didn't want to personally backstop it. And then once he did, the levers started moving.

Yeah. What is Larry Ellison's history with investments in Hollywood? I know it's not just David that's been involved. He's invested before. Obviously, David has a, you know, almost multi-decade career at this point. What's been Larry's strategy? What can we learn from his past adventures in Hollywood?

It's a good question because people think this is out of nowhere and it's all of a sudden Larry Ellison deciding to dip his toe into Hollywood. Although if you can call over a hundred billion dollars dipping your toe.

Big toe.

She's dipping the big toe.

Right. But Megan Ellison, David's sister, she had a very artistically successful production company called Annapurna, which she still has, but there was a period in the 2010s when she was the dominant producer of so-called art house and, you know, independently financed auteur-driven movies. And she actually got two Oscar nominations in the same year for herself for Best Picture when she had, I believe it was Her and The Master in the same year. And she's done a ton of movies with big-time auteur-driven filmmakers and then the wheels came off. She just lost too much money. And Larry basically had an intervention with her and said the money's not coming in anymore. You're done. I'm not doing this anymore. And he had his people step in. They pulled way back. They downscaled the company. And Annapurna still exists. They had a big Sundance movie this year directed by Olivia Wilde and starring Seth Rogen. But they're not doing a whole lot. So, if we learn from this, it's that Larry is happy to indulge his children, but there is a limit on what he's willing to do. And she hit that limit. We'll see what happens with David.

Yeah. Is... Sorry, Jordi, you can go...

if you...

Just, I'm curious if, I mean, it sounds like Annapurna had a very different financial underwriting strategy in the sense that Warner Brothers is very much like this basket of assets that are so proven. Yes, it's high leverage. Yes, it's expensive. But it's this mortgage on land that if you pay the bills on time, you will get the value of because there's this catalog value that you can license. You can continue to merchandise these assets. So, it feels like a different financial strategy.

Absolutely. I mean, there are not a lot of legacy studios with 100-year-old libraries sitting around. It is a pretty unique asset. Whereas Annapurna was creating its library from the ground up which is a much more difficult business. The corners of Hollywood are littered with the corpses of companies that try to take on the studios and do this on their own because you have to have that 100-year-old asset to float you when you have bombs because this is a portfolio business in the sense that if you release 20 movies, 10 of them probably not going to make money if you're lucky and you've got to make a lot of money on the ones that do make money and those will make money forever.

Yeah. Can you bridge that to A24? We're more familiar with that because there's some tech investors involved. I personally like a lot of the movies, but what is the strategy of A24? How do they fit into the modern Hollywood landscape?

A24 has been incredibly successful on the low-budget model. They are one of the few film studios that have created a brand for themselves. I would argue that the A24 brand is more meaningful to moviegoers than the Warner Brothers brand. I mean, everybody knows what Warner Brothers is, but what does Warner Brothers stand for? What is that brand? You don't really know. And you never had to know because that wasn't a direct-to-consumer business. They put their movies on other branded platforms whether they are theaters or whether they were television or now streaming on HBO Max. But A24 has created a brand. They sell branded candles and hats and things that are meaningful to their fans. But they succeeded on betting small on specific auteur filmmakers and they had a nice run. They also raised a bunch of money as you mentioned and they have recapitalized a couple times now and because they got what I believe it was a $3.5 billion valuation a couple years ago, they have essentially now been forced to go bigger and they are releasing movies that cost $70 million.

Yeah. The Smashing Machine with The Rock that also cost a lot more than their typical A24 movie. And they're still buying the small movies at festivals and releasing smaller movies, but they now have more of a portfolio of bigger-budgeted movies. And the jury's out on whether that model is going to be successful for them because again, there are many companies that have had small-level success in Hollywood and when they try to scale up and compete more directly with the traditional studios they've faltered and we'll see if A24 is able to pull it off. They got really smart people there. So I would hope so.

What is Hollywood actually doing with AI today?

Not like what do they want to do? Not what are Silicon Valley companies pitching them on doing but how is it actually being used today? Well, there's two answers to that question because there's one in the general what is AI doing for all businesses and that is, you know, streamlining processes and creating faster workflows. That's all the boring aspect. What you're probably asking about is how is Hollywood using AI to create content...

instead of in place of a camera is...

Right. Exactly. And there it has been much more limited there. The toe is in the water and each of these companies has an initiative to incorporate more AI specifically and more and more aggressively in the animation divisions. The goal is to bring down the cost of animated movies significantly and you do that by using AI to automate a lot of different functions and they're being coy about exactly how but I have heard like the storyboarding process and the physical production of the animated images once the artists have done their work to create the character design and the movements they want. AI can be used to essentially effectuate a shot. And you're seeing more and more of that. Where they're treading a little bit more cautiously is where the traditional labor unions are involved, where actors and directors and writers are involved. You're not seeing studios greenlighting scripts that are written by AI. You're just not. Screenwriters are using AI as a tool...

that they know of.

That they know of. Sure. But screenwriters are using AI as a tool and they will freely admit that much like they were very happy to use Google when it first came about and they didn't have to have a researcher that would go to a library and tell them what the interior of the FBI looked like. They don't have to do that anymore. And with AI, they can create scenarios or create drafts or create things that will help them. And all that the guilds want is for their members to get paid. So the studios are not allowed to buy a script or greenlight a script without paying a human writer.

And that's a big deal. It's the same for actors. You can use AI to accentuate or to, you know, do a quick reshoot, but you have to pay the people involved. And we're headed into a new labor negotiation where the studios will try to chip away at that and the guilds are going to try to be more aggressive and make sure that their members are getting paid for any use of AI here.

Mhm.

Where do you think AI, what kind of scenes do you think AI will end up coming for first? Is it the...

Is it the stunt, well animation but then what about stuntmen? I feel like there's a...

there's...

like Transformers-level CGI where it's so expensive. Scene, visual effects. Do you think that the dynamic between the studios and the guilds could allow kind of like an entirely alternate kind of industry to form that is sort of broken away from traditional Hollywood norms? Like, you know, you could imagine a group of people in some suburb of LA that aren't a part of the guilds that have never engaged with the unions in any capacity just decide we're going to start making movies ourselves and kind of just ignore the legacy process.

I think that's already happening, right? I mean, you see it, but the difference is, I mean, we all went nuts over that seed dance video of Brad Pitt and Tom Cruise fighting. But that's because it was Brad Pitt and Tom Cruise. If it was two dudes fighting, nobody would care if it was two AI-generated dudes that did not look like Brad Pitt and Tom Cruise. And that's the power the Hollywood people have.

Yeah.

Yeah. I mean, there's going to be, I think what's going to happen is there is going to be a class system of AI-generated content that will live and have an audience and generate revenue at scale but it will be perceived as lesser than the more professional and union-supported Hollywood-style work. And I could be wrong about that. It could just bowl over everything. But there's still value in Ryan Gosling's face. And for now, the unions and the Hollywood studios have been able to protect that from AI.

Yeah. Yeah. You can imagine, you know, the luxury houses versus fast fashion, like a similar dynamic playing out where like, yeah, you can get a jacket that functions in the same way as something that Gucci made. Maybe it's the same even material but it costs less and it has obviously much less prestige.

And I think that there will be a middle ground too where the cost of movies is brought down because of advances in AI where things can be done without, you know, outsourcing something to five artists to work on at a visual effects company for two months. It could be done in-house for less money with an AI tool. I think that's already happening and there are much lesser guild protections for that aspect of the business.

Post the OpenAI Disney deal, I was expecting to see another deal of the similar shape happen. It hasn't happened yet. Are you hearing rumors? Do you think other studios with big intellectual property and character libraries will take a similar approach?

I think that there are a lot of talks going on. Yeah.

And they're trying to figure it out. Disney was in an interesting spot there because that deal with OpenAI was as much about putting pressure on Google...

to come to the table and to not go rogue as Google has been doing.

Sure.

As it was to do OpenAI. Got it.

Also, there was a pre-existing relationship there. Bob Iger, the CEO, he worked for Thrive, which, you know, is a big investor in OpenAI. And Disney is, you know, if you're going to go after one company, that's the one to go after because they have the best characters. And if you note about that deal, that deal does not include any voices or any likenesses of real people. Even the Luke Skywalker is the animated Luke Skywalker. So, it's a lot less compelling for people to play around with. If you're playing around with Lightning McQueen or Yoda, and they don't sound like Lightning McQueen or Yoda, it's a lot less compelling than if they did.

Interesting. Yeah, that'll be interesting to see how they roll that out. Maybe that happens down the road. Jordi, anything else? This was great.

Thank you so much for taking the time.

Great to finally meet.

Great to finally meet, and fantastic reporter.

And come in person next time.

Yeah, we'd love to have you here in LA. We'll talk to you soon. Listen on the town or you can read me at Puck.

Yes.

Perfect.

Thank you so much for hopping on the show.

We will talk to you soon. Goodbye.

Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. And let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. And Christian Kyle has a post here. Credit where credit is due. China really nailed the Bond villain aesthetic with their Antarctic research base. Quinn Ling Chin Lingling.

Okay, these are just renders though.

These are renders. This is what they're thinking about.

Because if it was real, I'd be telling Tyler to get a boat immediately.

Tyler was in Arizona over the weekend and sent us a very cool picture of him out at TSMC.

Yeah. Give us a review. Did you feel the power? Did it feel like visiting a raptor? I mean, yeah, it was like 91 degrees.

Extremely hot. It was a massive, massive facility. They're still building like there's like...

There were two kind of main sections. I couldn't actually tell like what parts they were. There were signs there. There were a bunch of fabs. I think I took a picture next to like Fab 21 or something.

Wow.

But there's so much building going on. And it's basically north of Phoenix.

Yeah.

And so there's like a 10-mile radius where it's just basically empty land. They're flattening the desert.

Whoa.

But yeah, very, very cool. Really fun to walk.

Any gift shop?

No, they didn't let us in. There's a ton of security around at every gate. I wanted to go in and take a tour or something.

I want to get a wafer that didn't make it through quality control and get some of the chip CEOs to sign those. I think a Lisa Su signed TSMC wafer would be amazing. Or a Morris Chang signed wafer. That would go pretty hard. I would love that.

Love it.

Moving on. The billionaire tax has gone national. Bernie Sanders is proposing bringing it to the United States broadly at the federal level. Bad news for everyone who migrated to Miami or Florida because it is going to follow you wherever you go. Ro Khanna and Bernie Sanders are proposing a national wealth tax on billionaires going even further than California. They want a 5% unrealized wealth tax to be annual.

Every year.

Every year. That would be...

And I've seen some people running the numbers on like, oh, if this tax had been in place since 1999, Jeff Bezos would still be worth 61 billion and he could still afford his $500 million mega yacht. Just like not actually processing all the negative externalities of something like this. So yeah, I just...

got into like a PE-backed shell pretty quickly because you lose control, right?

Yeah, that or Amazon never even gets the level of investment that it got because of capital flight. I would be so much more sympathetic to Ro Khanna and Bernie Sanders on this if they had like, here's five case studies where wealth taxes worked and they can't come up with a single one.

And so it just feels like...

50% over 10 years, that is a lot. But the implementation of this tax would ultimately create wealth flight, says Chris with Withings. The wealthy are wealthy because they fight to preserve their wealth. So in year one the base is already decimated. Then every single year afterwards the remaining billionaires leave or hide their assets. Meanwhile the markets are all declining all this time because they see that America has been infiltrated by wealth-destroying communists. Chris is not a fan. Bernie...

Dave Friedberg has a bunch of good content around this talking about how there's something like 8 trillion of billionaire wealth and 160 to 170 of middle-class wealth. So that is the real prize pool.

Yeah.

And again, hopefully our lawmakers and voters process how ridiculous this is,

find another way.

And reject it. Write the balance sheet of the US government. Let me tell you about Vanta, automate compliance and security. Vanta is the leading AI trust management platform. And let me also tell you about Graphite code review for the age of AI. Graphite helps teams on GitHub ship higher quality data, higher quality. Sorry.

Clue Investment says the market is only down 0.08% year to date. Things must be really calm, right?

This is actually crazy. If you asked me where the market was and I hadn't looked, what is this from? What movie is this? Is this AI or something? This is a crazy scene. I really like this, this is a good meme template. I haven't used this before. Just RPGs flying around.

All-out war.

It is all-out war. I mean, a lot of stocks are down like 50%. Other stuff's way up. Things are all over the place and it has been absolute turmoil. A lot of red days in our favorite companies. Is it from Maze Runner?

Oh, maybe Maze Runner. Okay.

GoPro is one of the stocks that is particularly far down. We did a deep dive on GoPro very early in this show's history. They are now at a $150 million market cap. Josh Wolf has a quote here. GoPro's global market share of action cameras dropped to 18% as of September 2025 compared with 84% in 2022 according to Beijing-based consultancy Meritago Services. At the same time, DJI share rose to 66% and Insta360 is up at 13%. So this is going to count Meta Ray-Ban...

just out-executed on the product side but cell phones are probably even a bigger factor here kind of capping the overall TAM. Cell phones at some point just got really durable and the video quality got really good. I remember back in the day skiing or snowboarding, I was a little bit more hesitant to be like, I'm going to take my iPhone out and use it while skiing and just because it wasn't waterproof and then they got waterproof, they got really durable and most people aren't good enough at what they do to actually warrant needing like a, you know, effectively bulletproof.

The dust collection problem is very real with action cameras. You buy it thinking you're going to be shredding, going downhill, you're going to be surfing, and then you go for a hike once, the video is kind of underwhelming, and then it collects dust. Skiing this weekend, a friend of mine, I didn't see any GoPros among my friend group. One friend of mine was wearing the Meta Ray-Ban Vanguards and enjoyed taking videos and images with those. I've been seeing a lot of Meta Ray-Ban content on Reels. It feels like they're promoting that. They have a little tag and it feels like that's getting a little boost in the algorithm. So, if you're a Reels creator, maybe go pick up a pair and then post some stuff on the algorithm because you might get a little boost. But should Meta buy GoPro for 150? That's like what, one-tenth of an AI researcher and you get a whole suite of products. And I just have no idea if they would get anything through approval. Like it just feels like this is a company that you can't do a zombie acquisition with because you need the assets, you need the IP, you need the supply chain, you need the products, the distribution. You need the whole company. And Meta can't acquire like a VR fitness company without getting disapproved. Granted, it's a different FTC, so who knows? But if you were Mark Zuckerberg and you were trying to get into the action camera market broadly with Meta Ray-Bans, would you buy GoPro for 150?

Absolutely not.

Absolutely.

You partner with Oakley.

Partner with Oakley.

It's a better... It does exactly.

It's just the future.

Yeah. It's just they made a pair of Oakleys, the action sunglasses, that function just as well as a GoPro for 99% of people. Yeah.

And it's your phone.

And you can watch Instagram while you're backflipping off of the terrain park. But the crazy thing, GoPro still did somewhere around 670 million of revenue last year. So trading at less than a quarter times revenue.

But absolutely brutal out there. Some other people were suggesting like a foundation model lab should acquire the company for like... and that felt like a...

this feels like a stretch.

A silly, silly idea.

Doomer says the past looks more like the future than the present does. Let's pull up this. What is this? PM's Phoenix. An expandable van you can build for $2,000.

This is sick.

What? What company is this? PMS. What? How old is this? Is this AI-generated or something? This looks incredible. Most companies and most campers and vans these days that are roomy enough to live in are too large for comfortable driving. Conversely, the compact, fun, drivable rigs are usually too small to live in. And no matter what its size, the seller will probably want all the money you have now, plus most of what you'll make in the next five years. This is good copy. I like that.

So, this was in Popular Mechanics in 1978.

This is a good daily. Someone should pick...

Built on a Volkswagen minibus chassis.

I like that they restyled the front cab as well. Someone's mentioning that the Cybertruck camper back end looks pretty similar. But it still feels odd to take an electric vehicle into the wilderness. I don't know why because it's not like you're bringing a bunch of... it's not like there's a gas station out in the middle of nowhere but this would give me range anxiety even though I think that's deeply fake at this point.

New model alert.

New model alert. What we got?

Introducing Gemini 3.1 Flash Lite. A huge step forward on the boundary of intelligence beating 2.5 Flash on many tasks.

Tyler, you should try to do a speed check. OpenAI also came out this morning with 5.3 Instant.

Okay.

Touting increased accuracy.

Is this in ChatGPT? Because I feel like I've had 5.3 in Codex but not in... Oh, I got... Yeah, I have 5.3 Instant in chatgpt.com now. Interesting.

I do not yet.

Very cool.

And then they're also teasing 5.4. They say 5.4 sooner than you think.

So,

let's see. 5.3. It's designed for very, very low latency. It still feels slower than the Cerebras response that I got from 5.3 Spark because I think that the Cerebras chips, although they are faster, they're probably in more limited supply, more relevant to the long-running coding agent models and so they are still rolling that out but I'm excited for Cerebras in ChatGPT as a product and yeah, 5.4 sooner than you think with a capital T.

Very fun. Interesting. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. And let me also tell you about Figma. No matter where your idea starts, Figma makes cloud code, codecs, or a sketch. The Figma canvas is where ideas connect and products take shape.

Kalshi partnered with Bezel. Oh yeah.

To collab, allow people to trade price movements of iconic watches. So we can pull up this video here. This basically allows you to trade on the prices of Rolexes for the month of March. Basically is price going to move up or down? So Quaid over at Bezel has been telling us about this one. So you could in theory buy a watch on Bezel and then take out a short position on Kalshi and have a market-neutral Submariner or something, right? Because if the price goes up, you own it.

Not just any. It's market-neutral stuff.

It's market-neutral because if the market crashes, you make money on Kalshi, but you lost money on the watch and you're neutral. So you can hedge yourself now. That's very bizarre.

Yeah, I saw somebody pushing back and being like, 'Oh, this is silly. You could just buy the watches and actually trade them,' but obviously it's quite a bit more complicated.

Well, you can't sell one that you don't have. Now, you can short watches effectively.

True.

Anyway, let me tell you about AppLovin. Profitable advertising made easy with Axon.ai. Get access to over 1 billion daily active users and grow your business today. And I believe we have Ken Burns in the waiting room. So, we will bring him into the TVP Ultra.

Well, that's going on. Ken, thank you so much for taking the time to join us today. How are you doing?

My pleasure. I'm great. Great to be with you.

I would love to start with the first project you worked on ever because I'm fascinated. Your career has such clarity, but finding a life's work is often the hardest part of going on the type of journey that you've been on. And I'd love to understand who you were as a child, where you found a love for filmmaking, for documentary work, for history, and sort of go through from there.

Well, I was born in tragedy. My mom had cancer almost all of my life and died when I was 11. And a few months later, when I was 12, my dad, who had a pretty strict curfew, would allow me to stay up late at night watching TV shows, even on a school night. And he started to cry at an old movie called Odd Man Out. And right then and there, I'd never seen him cry before, not when my mom was sick or when she died and not at the terribly sad funeral. And all of a sudden, I said, I want to be a filmmaker. That meant Hollywood. But I ended up going to Hampshire College in Amherst, Massachusetts, a brand new and experimenting, still there, still experimenting school and most of the teachers were social documentary, still photographers and reminded me there is as much drama in what is and was and all of that sort of combined by age 22 to realize that I had a latent and untrained interest all of my life in American history and 50 years later I'm still doing the same thing.

How, walk me through your process. Do you have a list? Like has your filmography played out the way you would have predicted a decade ago? How many twists and turns have you run into in your career?

Zero. I mean obviously life throws a lot of stuff at you. I live in rural New Hampshire. That's what I made a decision to leave New York City because I thought that becoming a documentary filmmaker, strike one in American history, strike two on PBS, strike three meant I'd taken a vow of anonymity and poverty and I moved up here, finished the first film on the Brooklyn Bridge, got nominated for an Academy Award and everybody said you're coming back. They'd warned me that if I went up there I'd die if I...

And in public broadcasting, I imagine we were just talking about some of the changes that are happening in Hollywood and how there's often a pressure to go bigger, and that usually means bigger budgets. Okay, you made a $20 million film, your next one's going to be 70 million. How have you thought about where the business changes, what more money means, what more success, what more confidence means? How has the business side of your work evolved throughout your career?

That's great. Has fundraising gotten any easier? Is it just as hard every time? Did you ever kind of hit a moment where you decided to maybe pick up, return the calls from people that wanted to be more traditional financial backers in a particular project?

After the adoption of digital editing, what was the next technological advance that you found useful?

Can you tell me the story of the Ken Burns effect?

It's remarkable. What is your process for truth-seeking and understanding history?

It's amazing. Another sound effect. Thank you. Can you help me understand some of the through lines, emotional elements or takeaways, or the fingerprints that you try and leave on your work across projects, not just single ones?

Yeah. The dialectic. I love it. You have been very fortunate in that it feels like there's no project too big for you to undertake. And I'm wondering if there's ever a desire, how you balance going big with a massive story that everyone has at least some conception of versus going back to something like the Brooklyn Bridge and refocusing on something very narrow. Is that something that appeals to you? Do you feel like you've graduated, you've done that, you never want to go back, or is there something, talk about the tension there.

Yeah. When I think about what has changed in America throughout my life, I go to Apple, I go to technology, I go to business. And your work has focused, you know, you've obviously touched on business, but you focused on politicians and generals and athletes and musicians and artists. And I'm wondering about your perception of the business community, the technologists over the history of America, their interaction with your other subjects, how you want to integrate them into the stories that you tell.

Yeah. No, that makes a lot of sense. I'm sure you get asked this question all the time, but walk me through some of the advice that you give for aspiring documentarians.

Is it refreshing to change centuries? Do you think your life would be different? Do you think the projects, the quality might suffer if you had, at some point when you realized that this was going to be the career, you had started linearly and done American Revolution, Civil War, World War II, then Vietnam, and you just go year by year as opposed to bouncing around a little bit?

I just have to pass something along. A lot of people in the chat are saying that they love your work, obviously, but particularly that they became much closer with their fathers through watching your documentaries.

You make the chat also wants us to ask about AI. I already have an idea of your reaction. I appreciate your approach of not letting technology guide the work, but are you at all excited at some point in the future of being able to, you know, recreate a scene from history using image or video generation tools?

Yeah. Very cool. You mentioned McCullough, and I'm a fan of Robert Caro.

I can imagine. Are you excited about where that genre of historical writing is going right now?

Yeah. Well, thank you so much for taking the time to come chat with us, Ken. This was very informative and fun.

What's her name?

Marjorie, thank you for watching. Good job.

Great stuff, Ken. Thank you for joining.

Have a great rest of your day. Goodbye.

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Good to see you.

Welcome to the show. Is software dead? First, introduce yourself. Sorry, we'll get there.

So, yeah, it's about time. Long overdue. Yeah, walk us through how you have been processing the SaaS apocalypse, the Catrini article, all the different narratives that have kind of shaken the tech industry both to the upside in many cases and also to the downside in others throughout the start of this year.

How did you process them? There's a whole new class of AI-native ERPs that have come online and raised over the last one to two years. There's certainly like a long graveyard of startups as well. But part of the challenge is there's just so much software to build with a system like that. And maybe now is the right time given that we can create software a lot faster than we could historically.

Yeah. What do you think is happening in the private markets for software companies where their public comps have declined by 50%? We sort of went through this, and I'd love to know how you process the end of ZERP. I remember reading Logan Bartlett on this at Redpoint a lot. He was pulling public comps and seeing how multiple compression had happened in the public software SaaS market and the effect that was happening in the private markets. It feels like they haven't fully digested the SaaS apocalypse in the same way because a lot of the startups are earlier on the AI narrative. But at the same time, there's like a bigger question there.

Yeah. You can't exactly do that. You know, that happened in 2008, where you did see — when the 2008 thing happened — you did see people pull term sheets right after that happened that were outstanding. But those kind of things happen on the edge. But the biggest thing that's happening is there are certain classes of business models that have maybe raised a seed or an A that are now unable to raise a B, or will be unable to raise financing. And those are business models that are primarily application layer. I think if you're just doing workflows, it better be a deep and complex workflow that is deeply, deeply, deeply embedded. Because now with OpenAI — you guys might have seen this — OpenAI actually does the work. It's not just workflows; it actually goes and does the job. So if you're just putting software workflows that's enabling other people but not doing the job yourself, it becomes harder to justify that you will exist. Because remember, the VC time frame is not a year; it is five to seven years. And if you think about compounding over five to seven years, that's insane. Why? Because the capabilities of these models are doubling — what, once every six months, say. And if it's once every six months, it's quadrupling every year. That means in five to seven years it's two to the power of two to the power of twelve, which is a thousandfold better than what it is today.

And my human brain is unable to comprehend what it means for these models to be 500 to 1,000 times better than they are today, what it means for software. So I think everybody's trying to figure out, over a venture time frame, what does this mean if you extrapolate the performance of these models and make them a thousand times better — what survives and what doesn't. What survives: things that are deeply rooted, that have atoms. We think as software investors that things that have atoms — yes, there are humanoid robots, but I personally feel general humanoid robots that are machinists or HVAC repair people, whatever the case is, that's going to be slightly further out. So things that have atoms are generally protected over the five to seven year time frame. Things that have regulatory moats are protected. Things that have money flowing through them are protected. So there's a few classes of things that are protected.

If somebody came to you and wanted to vibe code DoorDash, what advice would you give them about the challenges that they might face on building a competitor?

You know, I'll give you a story. I'll give you two stories, actually. Assume it's June 2028, right? Which is what I think — you know, that 30% drop in stock. Assume you're hungry. You open your phone. You ask Claude, say, or whatever your new startup is — the food ordering startup — to order your sandwich with gluten-free bread. It routes your order directly to the restaurant because it's figured out how to connect to all the restaurants, and it saves you $2, but it takes an hour and a half to show up. It was cold, and they forgot to make the bread gluten-free, so you can't eat it anymore. Who owes you a refund? Does Anthropic have a customer service number? No. So basically, you open DoorDash, the sandwich is the first recommendation, you tap on it, 90 minutes later you're holding your sandwich, still fresh, and guess what? Remember the gluten-free bread. So that's one story where if something goes wrong in the physical world, who takes care of it? DoorDash is a managed marketplace. I'll get back to that. The better, more pertinent story is from 2016 or 2017. Google launched a product called Google Food Ordering. You might have seen this — Google Food Ordering. You can actually order from a restaurant, and it literally was driving at that point multiples of traffic to any restaurant compared to what DoorDash was driving, because Google, still massive back then, was massive. You could search for a restaurant, you could order directly from Google. However, the retention of people who ordered through Google Food Ordering was basically zero. It was negligible. Why? Because after you place the order, there are tons of things that go wrong in the physical world, and you couldn't really call Google, and the restaurant didn't take responsibility there. So that product doesn't exist today. And I think that's the fundamental reason. There are things that happen in the digital world that are not enough to replicate something like DoorDash. DoorDash manages not just aggregation and supply of restaurants. It manages everything afterwards. It manages figuring out how to get you the right Dasher. It manages how to basically refund if there's something that goes wrong. It manages customer support in case you want to. There's a collection of systems that work together. Discovery is something that I think agentic AI will do well, and hopefully DoorDash will incorporate many of those. But discovery is not enough. If you think about Google and digital, what did Google disintermediate? What do we use Google for today? It did really well with Expedia and flights and hotels, and also things like mortgages. So the types of marketplaces that Google has been able to disrupt through search are things that are more lead gen or just, I would call, light marketplaces where payment happens through Google. You can book hotels or flights through Google. You don't have to take care of what happens afterwards. But a managed marketplace in the physical world is the most durable thing. It is not a piece of software. Right? This is the thing I think people get wrong about DoorDash. DoorDash — the first piece of software they built after the website. If you remember, DoorDash had a stall-to-delivery. It had this website with a PDF. But the first piece of software they built was not a consumer app. It was a Dasher app. It was the app for Dashers, because that was what was needed to get the food properly — to make sure the Dasher got the order, accepted the order, picked up the food, delivered it before the consumer.

Can you talk a little bit about what it takes to build liquidity on a marketplace? It feels like that's also underrated. If you need to spend billions of dollars to actually create the scale of a marketplace, that's something that can't necessarily be vibe coded.

Exactly. So the biggest moat here — one of the moats is density. Density leads to liquidity, which means the more orders you have in a given geography at a given time, the better you can batch deliveries, which increases driver utilization and reduces cost per order. And that's what you have to do. If you were to actually pay the actual cost of delivering, it would be $10, $11, $12, $15. The reason you're only paying $2 or $3 is because these orders are batched, and you're basically not having a single person — you're basically batching it to the best Dasher driver. That's why you might see in busy times that there are drivers waiting outside certain restaurants, because they literally know that that order they can pick up, and there is massive density of orders. So density and liquidity — that's what drives marketplace economics. And so whoever wants to replicate DoorDash doesn't just need to improve aggregation at the consumer level, but build a massively dense, geography-by-geography marketplace in every city and every suburb that DoorDash operates in. And that's a massive endeavor. That's what DoorDash spent a few billion dollars building.

Yeah. Just a few. What does it take to be a great public company board member?

It's interesting. I think, you know, it has changed over the last several years. I think a few years ago, a decade ago, say, the profile of a board member was quite uniform. It was people from the finance or corporate worlds, and that's still important. I think you need a finance person who runs your audit committee. You need a CEO. I think every public board member — if you would go to any public CEO and say what is the archetype you want in your board, most of them want CEOs. They want to see you on the board because you want a CEO who you can confide in and you can ask for help from. But there are new archetypes that have emerged over the last few years. One: product engineering leader, someone who's led product and engineering at a company. Why? Because every company, like I said, has become a software company, a technology company. So every public company wants someone with product engineering chops. Second, you want someone who represents your customer. At DoorDash, for example — sorry, at Square — we had the CEO of Shake Shack. And why? Because Shake Shack was a prototypical customer for Square. No, Danny's — it was Randy Garutti. Danny was a chairman. So Randy was a CEO. I mean, yeah, Danny was a founder and Randy was a CEO, and so he was excellent. He always — he would really assume. And then typically what happens is, especially if it's a company that came through venture capital, typically one or two of the VCs that have been early in the journey of the company stay with the company, and the CEO trusts them. In Square's case it was Roelof Botha at Sequoia. In DoorDash's case, it's Alfred Lin, ironically again from Sequoia. But in Pinterest's case, it was Jeff Jordan from Andreessen. So each company has one VC probably who's — and then in Coinbase's case, it's Fred Wilson and Marc Andreessen from Union Square and Andreessen. So VC, product engineering chops, voice of the customer, CEO, finance person — those are the five archetypes. One of the best practices today that I've seen companies using is a notion of a board buddy. What it means is every exec at a company should actually be paired up with a board member who's an expert in the same area. So for example, I typically will work with the head of product and the head of engineering at the companies I'm on the board of, and I meet with them once a month outside of the board meeting. Those meetings are actually really good. I am essentially listening to them in a judgment-free zone and trying to be helpful and getting feedback from them. How can we be helpful? And the same is happening with the finance person, the finance-oriented board member — they meet with the CFO, the customer board member, they meet with the CRO, etc., etc. So I think that board buddy system I've seen helps dramatically, because that's what your board member should be — helpful not just to the CEO but to the exec team. It also helps get exposure for us to the exec team, who they are, and as we think about succession planning and stuff like that, we can evaluate who these people are and who should succeed the CEO, who are the people.

Yeah. What are your forecasts around M&A in 2026? Last year was the year of the licensing deal, the zombie acquisition, the ghost ship. Yeah, the ghost ship acquisition. But it still feels like we could see a lot of activity this year. There's a lot of cheap companies out there. GoPro's at 150. There's a lot of — yeah, in the public markets, but also public companies that want to bolt on fast-growing teams. Yeah. I think there's going to be both. I mean, you saw, for example, MyFitnessPal bought this company Cal AI, and that thing is 18 months old, right? 50 million. And so I think there's going to be a tremendous amount. Why? Because, like you said, there's a few things happening. One, software companies are valued — and the valuations have gone down. And so I myself, in a portfolio, I've seen if the CEO has courage, they can actually — the stock market is already telling you that the terminal value of your business is zero, so there's really no downside to burning the hoards and going all in on AI. And I have a company, Podium — I mean, you should actually get the guy, he's amazing. He's similar to Intercom, very similar to Intercom. He had a business that grew to 200 million, was kind of growing very slowly, and he said, you know what, I'm going to go build an AI agent. I'm going to — it's basically a product for SMBs. And he's basically gone from 0 to 100 million in 24 months and is accelerating by just saying, you know what, I'm not going to worry about the legacy business, we're going to start a new business. So I think — but the assets are there. These companies have assets. Yeah. They need that. And so it might be PE buying these companies for cheaper, but the PE can no longer have the playbook of 'we'll operationalize.' No, it's not about operationalizing or improving costs. It's about building a new product, a net-new product, an AI-native product. Then, like you said, I think there's a tremendous number of — for example, inference clouds are a new thing: Fireworks, Modal, Base10. There's multiple 5 to 10 billion dollar companies. I have to assume the hyperscalers are not sitting around saying, 'inference in AI is happening on these completely different cloud platforms different than what I have. What the hell am I? I'm going to be a commodity cloud platform.' So almost certainly, I think you're going to see one of the hyperscalers buy one of these neo-clouds. I think CoreWeave was one kind of cloud, but together there's like six or seven different next-generation cloud companies. So cloud software — you saw chips with Nvidia buying Groq. There's a bunch of next-gen chip — I think you're going to see — and of course the whole Warner Brothers thing at the application level, the consumer side. There's a tremendous amount now that I think we are in an administration which is much more open to this, for lack of a better word. You're going to see — I think there's going to be amazing activity next year.

Do you think that the Square — you were at Square for almost six and a half years — do you think the Square RIF from last week will be an anomaly, or are you expecting 40% to be the new 10% RIF?

The latter. I'm almost certain there's going to be multiple 20 to 30% cuts, maybe even 40. The reality is nobody's hiring. I think almost every public company has basically — net new hiring is almost zero. Why? Because you can do much more. Every function can do more with AI. So it's equaling to a 30% boost in productivity. And that's the first year. Next year, if you get another 30% boost, you need 30% fewer people. So over the 18 months, almost certainly every public company is going to have a 30% cut. If they don't, I question the leadership.

So yeah, so a lot of people's reactions to the Square RIF was, okay, AI is just a convenient excuse. It kind of is a narrative that the market will be able to process. Do you think there's more? You think they're actually seeing the efficiency to be able to make a decision like that, and it's not just marketing?

100%. I think they realize that they could basically do the same job and probably more efficiently with fewer coordination. The fewer people you have, the easier it is to coordinate, as you know. I mean, the two of you run the shows — assume you had four hosts, how hard it would be — like some of the ESPN shows, right? It's just the two of you. Every time you add a person, it's m times n. It increases exponentially, the coordination problem. Yeah. So I think a 12,000-person company, 6,000-person company — night and day. I bet they're going to move faster, be more innovative, and drive more productivity than they were doing before.

What's the update on Marathon? Like, where are you guys focused in Q1? What's most exciting for you?

We are an early-stage software and fintech-focused firm. We focus — some of the best companies to do are at the intersection of the two. But in software, we look at infrastructure, security, and application. I think the themes we're looking at are some of the themes that we talked about. One is what are durable companies at the application layer. There are lots of interesting things on the security side we're looking at. For example, phishing is something which is going — I mean, I have been phished now. I mean, I feel almost on a daily basis I'll get an email that looks like it's coming from a human being, but it's actually AI. And then the third area is around infrastructure. Like I said, there's a lot of new infrastructure that has been built because every piece of infrastructure that existed until two years ago was built for humans. Mhm. Every piece of infrastructure has to be rebuilt for AI agents. On fintech, you know, stablecoins — I'm in love with stablecoins. I think USDC — I have so many people I know outside the US now who basically want all their money to be not in their local currency but in USDC, a stablecoin, because it's pegged to the US dollar. It gives the opportunity for everyone in the world to not suffer a 10% daily inflationary reduction in their purchasing power, but to hold money in a way that is pegged to the US dollar. So I think stablecoin is one of the greatest — so far I think it's the best real — outside of tokenization, it's the best real-world application of the crypto industry in some ways, and I'm extremely bullish on it.

Amazing. Well, thank you so much for taking the time to come chat with us. Yeah, great to finally have you on the show. It should have happened a long time ago. Yeah, always a huge fan. Yep, always welcome. It's been amazing. Has it been two years since you started? It's been incredible. One year. Isn't that crazy? Yeah. That is incredible. Congratulations, guys. Thank you so much. We'll talk to you soon. Cheers. Have a good rest of your day.

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Board member Coinbase, board member Pinterest, board member The Trade Desk, spent four and a half years at DoorDash, six and a half years at Square, overnight success, three years at Meta. Let me tell you, there is a talent shakeup going on at Qwen, at Alibaba's AI lab. I want Tyler Cosgrove to take us through it, but there are a number of posts. Junyang Lin says, 'Me stepping down from my beloved Qwen.' And another individual highlighted by Zephyr says, 'Alibaba Qwen disintegrating in real time.' Why?

Yeah. I mean, it's kind of unclear, right? The Chinese labs are like very not open about what they're doing. Also, it's not like an independent lab, right? It's Alibaba. Yeah. But yeah, it's very interesting. I mean, Qwen has like — recently has been like kind of the main — they're the staple in open source, and like in Chinese open source, but in open source broadly, right? Even the American open source labs are still like pretty far behind Qwen. So, yeah, it's very interesting. People are saying that there was like new leadership. Apparently, Alibaba brought over people from DeepMind. And then maybe they're just like completely transferring the leadership there. And then some people are saying, 'Oh, these guys are all going to come to the US. Maybe they're going to go to xAI or something like this.' Yeah. But yeah, it's — I mean, definitely very interesting.

Do you know where these folks are located physically? I believe they are in mainland China, correct? I think, yeah, I think that's — that's reasonable to assume because there is a world where there's a whole bunch of AI talent that's missing or, you know, looking for the next gig. You sign up for some golden visas, even at $5 million a pop, that's completely affordable for an AI lab these days. It'll be interesting to see where these folks land. Euchin Jin says, 'The end of an era. Qwen lost its tech lead. When we launched the Qwen 3 Next endpoints on Hyperbolic with Junyang and his team, they were still online at 6 a.m. Beijing time. They were grinding. Thank you for pushing open source AI forward.' Do you think they were caught distilling other American models and then they were fired? I mean, I — busted. Yeah, I don't think that's like a fireable offense, right? That's the best way to — But that was probably the top-down mandate: please spend as little money as possible. Well, maybe they were fired for not distilling fast enough. Maybe, maybe. Nathan Lambert has an extra take here. He says, 'The gaping hole that Qwen imploding will leave in the open source research ecosystem will be hard to fill. The small models are irreplaceable. I'll do my best to keep carrying that torch. Not that I've reached the level of impact of Qwen by any means, but every bit matters.' It will be interesting seeing how DeepSeek responds to this, whether these folks go to DeepSeek, whether DeepSeek adjusts their strategy when it comes to small models. That feels like something that High-Flyer could potentially fulfill. But also, who knows? We don't know how large the Qwen team is, how sizable this is, what they have planned. Sometimes there's large departures because there's a whole bunch of new people coming in, and so they might have just hired a ton of people that just haven't announced. It also will be interesting if this is one of those situations where it's clear that there is a raid going on, but people aren't announcing where they're landing for another couple weeks, and so they just announced their departure. We see this a lot at the American AI labs where people will say it's my last day, and then two weeks later they'll be like, 'I joined the competitor,' and then two weeks later they'll be like, 'I'm back at the original company,' and they'll go back and forth all day long. Anyway, let me tell you about Okta.

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I want to talk about fast food CEOs. Yeah. Let's pull up this video of McDonald's CEO. We never watched this all the way through. I want to see for myself. This is McDonald's CEO Chris Kempczinski. He went viral after seeming reluctant to eat his own burgers. He takes a tiny bite, looks uncomfortable, and calls the food product. That's the size of — you've heard about it. The Big Arch. Here it is. The Big Arch. This is something that we have tested already in Germany, Canada. I love this product. It is so good. I'm going to do a tasting right now, but I'm going to eat this for my lunch, just so you know. So, here we go. First — if I can survive a single meal, that is good enough for you. We've got a very unique kind of sesame poppy sort of bun. Public presentation. We got two quarter-pound patties, a delicious Big Arch sauce. It's probably his first. So, oh, there's so much going on with this. First of all, let's try to get this thing. I don't even know how to attack it. Got so much to it. There's also some crispy onions on here as well. I see those kind of coming out. He's stoked. All right. I met the CEO of McDonald's, the previous CEO, at South by Southwest in like 2013. So good. That's a big bite for a Big Arch. That's a huge burger. It's distinctively McDonald's only. Undeniably not that big of a bite. Yeah. Not that big of a bite. He just kind of — But eating on camera is so hard. If you just start housing that thing, there's going to be a whole different set of backlash. It definitely looked like his first ever bite of a burger. Yeah. It's not a strong performance. Lulu said, 'Layup opportunity for the number two ranked fast food chain CEO to film a brutal.' And I think somebody did. We can pull up another video here. Someone did it. Someone saying Japanese manga writer trying to write Americans. The CEO would perhaps compete over would take the manliest of burger. No, that's ridiculous. Surely America could not be like that. Okay, watch this. Burger King. Oh, that's a real bite. That's a real bite. Yeah. I'm a Burger King guy now. He won me over very, very well. This guy seems like he can flip burgers. He can take bites of burgers. I saw another video of Chris, the McDonald's CEO, coming out on his personal Instagram saying he wanted to clarify that he does eat McDonald's three or four times a week. He said — so he is defending his honor. McDonald's is great. I'm — But yeah, saying — Gabby Goldberg called it out. 'I love this product.' Yeah, 'I love this product.' That's what every chef says, you know, after they bring out a meal, they say, 'I love this product.' I think you will, too. He's a business guy. I don't have a problem with that. Refer to it as product. Go off. I stand by it. I think it's great. I think it is. I think even though it technically is a product, I think people want their food to be food. Yeah. Probably should just use food next time. Well, good luck on the comms front.

What is happening with Claude? Their traffic is spiking due to all of the news, and people are having fun with it. Has it actually been going down? I've been seeing mixed things. I checked Claude to see if it was down. It was fine for me, but — it went down last night for enough time for people to pay attention, but — to the tune of 4,000 likes. I do wonder if there's — like the compute debate over, you know, how many servers you need, how many chips you need to marshal, how much investment do you need from various hyperscalers — does that equation change if there's a new sudden influx of consumer adoption? It's unclear that consumers are driving, you know, insane inference loads compared to, you know, your OpenClaw folks who might be firing off 12 hours of agentic programming. That feels a lot more inference-heavy than people that are like, 'Yeah, I'm replacing my daily driver LLM app,' and then they fire off the usual like one query a day. That's maybe not — but at the same time, lots of people coming in, scaling challenges come for us all. We need a new whale for AI. You remember the Twitter whale, the fail whale? Twitter had such a funny, whimsical culture. There was this thing when Twitter was scaling — they had this monolithic Ruby on Rails app, I believe, and they couldn't scale the app fast enough because things would go viral. Big moments would happen in the news, in the media — basketball, NBA finals would happen, everyone would get on, be talking about it, and the site would just go down for everyone. And so their 404 page, their page that you would land on when the service was not responding or populating tweets or showing you any content at all, had a fail whale — a whale that was being lifted up by some birds, if I remember that correctly. And it became like loved by the Twitter community, and the rest is history. Eventually they did scale. Our next guest is here. First, let me tell you about Labelbox — reinforcement learning environments, voice robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And without further ado, we have Nick from Wraithwatch. He's the founder and CEO. How are you doing, Nick?

What's going on? Good to meet you. What's going on, fellas? Good to be here. How you doing? Welcome to the show. You have a big gong. You've got a big deal. Yeah. Yeah. Kick us off with that. No, introduce yourself first. Tell us what the company does.

Yeah, thanks guys. Well, I'm Nick. I'm Wraithwatch CEO, one of the founders. Former CIO, chief information officer at Anduril. No way. Joined Anduril when it was about 100 people. Scaled it through when it was about 4,500. I think they've doubled since then since I left a couple years ago. SpaceX and Palantir before that, leading cyber defense teams at both companies. And then prior to entering the private sector, was responsible for pre-assault electronic warfare and cyber warfare in support of United States Special Operations Command. So — but you worked at Palantir, SpaceX, and — that's insane. Yeah, it's served and served. Wow. Well, thank you for your service. So it was really hard to raise — it was really hard to raise your first — Thank you for your service to the venture-backed defense tech industry and the LPs. Thank you on behalf of — it was tough. Sprinkle some AI in the deck and it was all good. The rest is history. So yeah, where is the product today? What are the key landing zones that you're going after? Because cybersecurity is pretty broad these days, right?

Yeah. So fundamentally what Wraithwatch does is we build autonomous cyber defense systems for the United States government and its allies. That includes private sector and Fortune 500 as well. So we're deployed today to Fortune 500, commercial nuclear, aerospace, defense, manufacturing. But the byline on the screen is our recent announcement with the federal government where we just landed a $30 million deal to deploy Wraithwatch in parallel — clean hits, clean hit — to deploy Wraithwatch to almost a dozen federal agencies in parallel. So pretty exciting time for us, and ironic time given that we're in the middle of a shooting war with Iran, which is known for its offensive cyber warfare capabilities. Yeah. Can you explain to me cyber defense? I mean, like you can go and look for holes in systems and scan code bases. You can also be, you know, rerouting, dealing with firewalls if you're getting DDoS. Like, what's the nature of the threats that you're seeing? What's in the wheelhouse? What do you leave to other cybersecurity firms at this point?

Yeah. So just to set the stage here a bit. So historically cyber is kind of the last mover when it comes to any kind of advance in software engineering or tech in general. Like we're always the last to adopt stuff for whatever reason. Maybe it's because we're just at the end of the day a bunch of skeptical neckbeards. I don't know why. Well, is that because like basically people want to develop a new capability and that's really exciting, and then people realize, okay, now we need to defend against said new capability, now we need to secure it, and so it definitely — the Gartner hype curve applies to the cyber adoption curve, I would say, and it's precisely because of what you just said. Like OpenClaw is a great example, right? There's all this excitement around it, and then two days later it's like, well, this entire ecosystem is open to attack. There's API keys floating around in the wild. There's people injecting prompts. There's all kinds of stuff going on. And so what you'll find is just a default sense of skepticism across the industry when it comes to anything new, and AI is no stranger to this. Makes sense, right? But what we're seeing is that the attackers on the attack side of the equation have no such compunctions. They are generally willing to try and take on any new technology that comes on board. And they certainly have adopted AI in order to industrialize and weaponize their exploits and their attacks and campaigns in general. And they're moving at warp speed. Like when we started the company a few years ago, you know, we were met with, you know, skepticism like, you know, do you guys really think this is a thing? No one really knew what an agentic workflow was with AI — like to everyone it was still a chatbot. Now everyone knows what an agent is. Everyone knows you can string them together, and the adversaries have been kind of one step ahead of everybody, and they've been wiring these things up to offensive frameworks, offensive tools, and now you're seeing this kind of asymptotic attack pressure that's targeting organizations, and that's just coming up with novel new exploits, attack techniques, and so on every single day. Now the problem is there's no corresponding defensive counter pressure. So you have this mounting attack pressure on the outside, and then organizations and their cyber defenders are still moving at human speed on the inside. It's like, what do we do? Every six months a red team comes around, tells us, you know, how screwed we are, and then we scramble around and then deploy a bunch of controls. Okay, what knobs do I have to turn over there? And as this is happening out here in the attack landscape moving at human speed in here just isn't sufficient. So what we intend to do is essentially drive a similar asymptotic curve for defenders internally. Yeah, that's ultimately, you know, what the strategic landscape is and the way that that needs to happen. And I don't care if it's us, I don't care if it's another company — essentially the same problem that Palantir set out to solve. Mhm. And we can get into the reasons why cyber tools don't talk to each other. The tools don't like to talk to each other. Your CrowdStrikes don't like to talk to your Oktas, don't like to talk to your Splunks. Splunk in general is like an old model of let me just send data there and then worry about it later. And so Splunk to me is where data goes to die. And so what we do is tackle multiple things in parallel. Number one, break down all these silos, force these tools to talk to each other. Number two, for any dead data sources that are sitting around your organization, whether it's Splunk, whether it's data in S3 — all right, let's light those things up. We can dispatch swarms of agentic whatevers to get in there and start asking questions about, okay, what kind of data exists in here? What kind of aggregations can we do? Let's just build swarms of these little mini data scientists and throw them at these dead data structures, light them up, and then bring them into the greater cyber defense ecosystem. So you can almost think of the thing that's necessary as we move forward into this future as like the cyber version of JADC2, essentially, for anyone that's familiar with the defense tech ecosystem. JADC2 is Joint All-Domain Command and Control system, and it was an initiative by the US military, still is, to tie together sensors, fuse that sensor telemetry into a common, cohesive command and control layer, and then allow the warfighter to make decisions at speed against it. And cyber defense just has no analog to that capability, and that's the capability that we're bringing to the table for our USG partners. Very cool. Walk me through a little bit more of like why I would want to investigate dead data. Is that like if I'm a business, I have a bunch of data in S3, and it happens to have customer credit cards. If that got hacked, that would be bad, and so maybe I want to lock that down, delete it if I'm not using it. Or is there some other shape of like the threat of this like dead data concept?

Yeah, so dead data exists in one of two dimensions. So the data exists in the sort of pre-attack dimension of, okay, there's data that could tell you about latent risks in your organization. So I'll rewind you guys back to 2019, and there was a massive malware attack called Triton against oil and gas facilities in the Middle East. And the reason that attack was able to go down is because no one put the pieces of the puzzle together that, hey, we've got a senior engineering dude with a system that has weak controls applied to it that also serves as a jump-off point into the OT or critical infrastructure sector of the network. Now, to put those four pieces of data points together, you need a board security engineer. You need a red team to come in and find it for you. And they might not ever find it, even though they might spend three months trying to look for it. So, you know, that could be one of a hundred attack paths that exist in your environment. So that's kind of the pre-attack latent risk piece. And then on the post-attack side, you've got data that's being emitted from everyone's devices inside these environments. And what that data can tell you is, all right, all this latent risk back here — is anyone actually taking advantage of it or exploiting it? This is where this second half of the equation is where you discover that. But what we've done over the past 20 years, because I don't know, the big four consulting firms of the world have told us to do it, is we send data to these data stores like S3 or Splunk or what have you, and then we just don't have the bandwidth to come around and then do something useful with it. You know, you need some kind of sophisticated data analytics people that think along the lines of how to make use of this data appropriately. You need to think along the lines of joins and tables and, you know, objects and ontologies, and that kind of skill set seems to just not be there when it comes to cyber defense. You know, Palantir I think was the first one to kind of break through and show people that this could be done for cyber defense as well. And there's a multitude of reasons why it didn't work — like Foundry was early at the time when we were trying to break cyber. And so what we're trying to do is close the gap and just have a turnkey solution and say, 'Okay, you've got dead data here. You've got dead data here. So you don't even know where the adversary is going to come from. Like, we can't predict the next breach because no one's looking at it. We can't tell you whether a breach is actually underway because no one's looking at it. So let's break all of this down, fuse it into this cohesive layer, and then we can tell you where the next breach is going to come from, and we can tell you if it's actually going down right now as we speak.' So that's where we view the kind of like lighting up these —

Dead data structures, because otherwise you needed a person to kind of sit there and come up with, okay, what queries are we going to ask and what automations are we going to put into place. And it's like, dude, when the dimensionality of some of these attacks is so large, you can't predict what queries you want, right? Like, you don't know how that attack is going to go down, you don't know how it's going to manifest itself until it does. And so the only way to solve it is by generating and evaluating those queries and their results at machine speed.

Can you give us a brief history of cyber warfare with Iran?

Wow.

Well, good luck out there, and we have a really... congrats on all the progress in the business.

Thank you so much for taking the time to come on the show.

Let me tell you about ElevenLabs. Build intelligent realtime conversational agents. Reimagine human technology interaction with ElevenLabs. And let me also tell you about Cognition. They're the makers of Devin, the AI software engineer. Crush your backlog with your personal AI engineering team. And without further ado, we will begin the Lambda Lightning Round. Let's see that cloud in all of its glory. There we go.

That is the moment that building towards working on this. We're doing live TV and we have our first guest of the late. How are you doing?

Good to meet you.

Thanks so much for hopping on the show. Since this is your first appearance, please give us an introduction on yourself and the company.

Okay. Um, how much did you raise?

So, tell me about how this fits in with CrowdStrike, Okta, Wiz. You have a lot of experience with those firms, some investors in common. Um, how do you see yourself fitting into the market and going to market?

So yeah, what's an example of this? Because if you build a tool in-house using AI, you probably know exactly what model you're using. You might not have the weights, but you can read all about the various model, the capabilities, the context window size, all everything else will be made available to you in the API. Is this more for SaaS products that are vending in AI features that you might have less insight into, or more interpretability of the models themselves?

Will you be learning to drive a Le Mans prototype so you can hang out with George Kurtz?

That's amazing. You're a swimmer though. You're a swimmer.