You're watching TVN. Today is Tuesday, September 15th, 2026. We are live from the TVPN Ultra Dome, the temple of technology, the fortress of finance, the capital of capital.
It's been too long, John. Great to be back.
It's great to be back. Let me tell you about ramp.com. Time is money. Save both. He's used corporate cards, bill pay, accounting, and a whole lot more all in one place.
Eric Lyman had to issue an apology to absolutely nobody. Oh, no. No. You didn't see this?
Eric Lyman had to issue an apology to the United Kingdom, to the residents of the UK because they've been waiting so long for ramp and ramp expanded into the UK. But now he's going to have to issue an apology to me because that's a pretty unamerican thing to do. Honestly, let's keep our fintechs like domestic in my opinion. I don't know why we need to be going over there and doing business. Yeah. Not very not a fan. No. Congratulations to the whole team going global, taking over the world. Very exciting stuff. Um well, uh top thing on my mind today is figuring out what's going on with interest rates. The high interest rate phenomenon. We've had zero interest rate policy. Zerp, the Zerp era ended. Now we're in the HIPP. I don't think we should say that one. That doesn't sound very good. But uh the high interest rate policies, the high interest rate phenomenons are upon us. Uh what's going on? It's very obvious what's going on. You take one look at the chart. It's the war. You can see the US attacks attacks Iran uh in the beginning of 2026. Interest rates are low. We should pull up this chart from the Wall Street Journal. It gets more dramatic every time they show this chart. This one right here, Jordy. uh take a wild guess. What's driving interest rates? It is of course the war which starts there and then boom up and to the right from then on. But there's other questions about what's going on. Is AI is the buildout having an effect here? What else is going on within this data? Why is it happening? And does war always lead to higher interest rates? That was something that was on my mind. So I wanted to get uh get into that. Uh it's obviously um bad for everyone. It's bad for the US government because they have to refinance debt and pay interest and that puts stress on all the other things that the government wants to do with money from health care, pensions, uh even funding the military. Like if they're paying interest, they're not paying for other stuff. That's not good. Uh bad for the prospects of the American home buyer. Interest rates are now above 7% getting very unaffordable for lots of people. Uh and also a lot of mortgages are rolling over. So the era of like the 3% mortgage, less and less people still have those because people are either moving on to floating rate mortgages or moving out of interest uh interest locked periods. There's a whole bunch of uh dynamics there. And it's even bad for AI companies. So everyone hates this because the AI companies of course even though they have an ungodly amount of money, they need to raise more money to finance buildout and finance data centers and finance expansion. And so uh not good for anyone. How do you get out of it? Maybe end the war. But there are other things at at work. Uh this war is uh unique. I mean it's not that war causes interest rates to go up. It's war causes energy shortages which causes inflation and inflation be bleeds into everything. So pain at the pump turns into I need a raise for this. I need to raise prices on food. I need to raise prices on all sorts of things. Energy is of course a key input into everything. Why I am so against pacing the energy roll out like every year for the past like 10 years the uh I forget what it is I IA or something the the there's a there's a body that forecasts energy buildout specifically in solar and they've gotten it wrong every year for 10 years they've underestimated the growth of solar you've seen this chart
International Energy Agency.
Is that it? Yeah. So every year they'll be like, okay, we had great year last year. We're going we're going parabolic. We're up and to the right, but clearly we're not going to build more solar. People are going to get sick of this stuff. And then the next year we build even more solar than we predicted. And so you can look at this chart of the of the predictions and then how we blow them out. So that is something that that we want to clearly keep working on because uh it will bring down inflation, bring down costs of basically everything. It will be very deflationary and it'll allow us to do all sorts of new things. Um but this this war is specifically driving energy prices because of course uh oil transported through the straight of moves is a key pressure point for control of the conflict and that drives up inflation which hurts the value of treasury bonds causing yields to spike. And so that's why they're above 5%. It's the first time I believe since uh 2007 that they've been this high. So not good. Uh it doesn't always go this way though. I wanted to understand do does war or war even just war in the Middle East. Does that always cause interest rates to spike? It makes sense. It's an expensive thing. It's a it's a capital suck. It's depressing in a many many ways. There's a whole bunch of economic reasons why you could think that war would cause interest rates to spike, but does that always happen? So, during Gulf War I, which uh I I didn't realize this, but we have a uh a son of a veteran on our team. Um so, thank you for his service. But uh during Gulf War I there was a textbook oil shock. So uh Iraq invaded Kuwait on August 2nd of 1990. Uh the US military buildup began basically immediately and the Desert Storm offensive started January 17th, 1991. So about 6 months between the initial conflict over there, the US gets involved. What happens when the US gets involved? Interest rate spiked and interest rates were already 8.29%. 29% already pretty high, but they spiked to over 9% 9.05% in less than a month because everyone's like, "Oh, well, there's going to be less oil. Kuwait generates a lot of oil. Oil is going to be knocked offline. That that's going to flow through the economy the same way. Energy prices, inflation, etc. The usual playbook. But 6 months later, they were lower than the start of the war, sitting at 8.03%. There were some other things going on in the economy obviously, but basically like that war did not last so long. It had a much more uh tight ending and so uh there was there was less pressure on interest rates. The Afghanistan war played out in reverse. So immediately before the invasion, the the 10-year was at 4.52%. Yields fell to 4.22%. You could imagine that there's some sort of like optimism around like, oh, this will be a quick operation. this won't be a quagmire. Of course, the opposite happened. So, six months into the war, the tenure hit 5.25% up significantly, up basically uh 3/4 of a percent since the start of the offensive. And so, the end result of that is that now Worsh, the new Fed chairman, is in a tough spot. The markets expect a rate hike to bring inflation down. So, uh the August consumer price inflation was at 3.4%. The Fed actually prefers a different inflation me measure called the PCE price index that was at 3.7%. And so even by the Fed's preferred measure, inflation is running too hot. Again, they're targeting something like 2% uh and they're up at 3.7%. And then also you get into this like oh well like maybe it's just maybe the inflation's just related to food and energy because energy goes into food. You're trucking all the food around. Let's look at the broader economy. So there is a separate price index for uh inflation excluding food and energy and even that's at 3.3%. So that's too high. So there's really very it's very very tough to make a case for holding rates steady even lowering rates which is of course what uh lots of people want to see happen. Um it's very very difficult and the inflation is spilling over from energy into other parts of the economy and it's basically just complicating the Fed's case for aggressive easing. So everyone's expecting a rate hike at this point. So what's the effect of AI on all of this? I think that AI is such a big driver of the economy and yet it's having such small impacts in many ways. Like the total AI revenues are something like a quarter% of GDP still, but in terms of headlines, it's like 75% of what we talk about. Uh and so yeah, I mean I guess you could see a couple orders of magnitude. you get to 25% of the economy. I don't know. But um but today the problem that's happening with rates specifically is that AI creates investment demand before any productivity benefits arrive. And so you we see this with like a trillion dollars of capex for like a couple hundred billion dollars of actual revenues. And so uh data centers require financing, construction capacity, equipment, electricity. That spending happens today, but broader productivity benefits take longer to diffuse. And so economists uh spec there's specifically a group of economists that have studied this uh they describe AI as a source of upward pressure on real rates and potentially prices during the compute buildout. Uh and uh Dylan Patel Dorcash uh have talked about this a little bit where you know compute because there's high ROI it it tends to suck demand out of the investment community. Like you look at what Jensen's doing securitizing GPUs. You look at the incredible demand for investment grade being attached to data center buildouts with Nvidia lending IG status to different companies for buildouts and backstopping different data centers. That just means that if Nvidia is there backstopping, it means that certain funds that can only invest in investment grade assets can now make that investment. You don't need to go to a venture capitalist for it. You can go to a mutual fund or you can go to eventually like an insurance fund. Uh where there's a lot
I see where you're going with this.
You think Jensen should should backs top the Fed?
Potentially. He might be he might be the lender of last resort. I I was thinking you were going to do uh you were going to do a bit about uh uh federal backs top for podcasting. A lot of podcasters are spending a lot of money building sets trying to get big guests.
Everyone knows my stance on that already. Yeah. So we can move on.
Uh so uh there's also this interesting indirect effect which is that specifically on inflation specifically on rates during an AI boom the stock market goes up lots of people have money invested in the stock market even a small slice of SanDisk moons you have more money to go and spend money traveling spending money in the real economy and so you have this wealth effect that supports s consumer spending purely on the, you know, stock market gains, the equity gains that are related to the AI boom. Obviously, everyone talks about like the San Francisco housing market liquidity from like lab employees, but that's actually happening on a much broader scale from just people across the United States that have gone long any AI basket or even any basket that includes some tech stocks and they're like, "Oh, wow. I'm up 30% right now. I should upgrade my car or I should buy that new washing machine. I should do anything that supports demand so you see more demand that drives inflation and that winds up driving real rates. So, um, but what happens in the future? Now, Apollo has an interesting view of what might happen with long-term rates given the various outcomes. They describe it as sort of a fork in the road. Either AI succeeds or AI fails. Don't like that they're talking about AI failing. I I don't like that at all where they're going with that. But of course, those are the two possible outcomes here. And they and they say that in both of those scenarios, whether AI succeeds or AI fails, rates will fall, which is maybe good because everyone wants lower rates. Everyone wants to be able to afford a mortgage, afford a house. Um, but how does this work mechanically? because it's very weird to think that you would have a scenario where there's a massive bust in the AI economy and yet you get lower rates but then also if AI succeeds you get lower rates but they explain it this way they say in the next six months if AI succeeds you'll see productivity gains trillions in revenue and there will be a deflationary impulse so as AI diffuses things will get cheaper because there will be there will be competition in all of these markets it's very very good that we're not set up in a world where there are monopolies in every category because if there was only one law firm, if there's only one law firm and they got AI and they were able to cut their cost by 50%, you're still going to be paying two grand an hour.
You saw Morgan and Morgan is is uh is setting up their own data center.
I think they're going to spend about a billion dollars over the next 10 years.
Wow. They're going vertical going vertically integrated. If you're an AI researcher and you've ever wanted to work for a personal injury law firm, now's your opportunity. Check out Morgan and Morgan. Yeah, they have all those billboards. Yeah, just call the number on the billboards. Yes. I'd like to start racking GPUs for you. Um but uh I mean he So he's paying for that in cash because doesn't he have famously have a billion dollars in cash?
Yeah. Yeah. He says you're not a billionaire unless it's just sitting in a checking account.
It's got to be in the checking account apparently. Um, but you can imagine so many scenarios where uh, yes, Morgan and Morgan is saving money using AI. They're getting more efficiency, but their competitor is also saving money using AI and they get into a little bit of a price war. Maybe margins don't compress fully, but they stay sort of healthy and the end result is deflation. Cheaper services, cheaper goods, not for everything, but for the things that are most impacted by AI productivity gains. Uh then in the other scenario, the doomer scenario from Apollo, if AI fails, the bubble bursts, there's an equity selloff and there's a flight to treasuries. So everyone's buying treasuries saying, I got to get out of these crazy AI stocks. The stuff hit a wall, it's not any it's not going to be useful. I got to buy treasuries. A lot of buying, if you buy a lot of treasuries, yields fall and interest rates fall, of course. So interesting interesting dynamic. There is the third kind of crazy scenario which was outlined by uh Dylan Patel from semi analysis which is like it never stops like we're going to keep investing and and this and the data centers and the AI boom is going to continue to suck at capital until there's like none left and like it will all and there will be like a sovereign debt crisis uh which is the craziest outcome nonzero uh but you know this Apollo uh thing they're they're certainly looking for what happens in the next six months and we'll and we'll know. We'll check in in six months with this Apollo prediction. What will happen? Maybe we'll be in the exact same place looking for the next six months. That's happened.
Hopefully the war will be over by then.
Hopefully the war will be over. That would be the easiest thing to like resolve I think. Yeah.
Um potentially easier than product debt or Yeah. Sovereignty driver of world peace.
Yeah, maybe. Maybe. Um so yeah, I don't know. I've been I've been excited about the potential for deflationary effects playing out. Uh you know I I I went to the hospital and I was just seeing the diffusion of technology. All the all the all the all the doctors are are using text to speech. They talk into these little like microphones when they're taking notes. Obviously that's a technology from
We get it, John. You worked out so hard that you ended up in the hospital. We know.
That's true. Um, but uh I'm I'm fortunately doing much better. Uh, but while I was there, I was noticing like, okay, it's actually a better experience. I'm getting text messages to let me know where I am in the queue. I don't exactly have to ask like when am I coming up? When will I be getting out of here? But I do have to sign e-sign a bunch of forms and the forms don't render properly on iM on on iOS on Safari. Like this is something that should be fixable by an AI agent, but it hasn't been yet. Why is that? It's the diff it's the diffusion question. It's the fact that uh somebody hasn't gotten in there and actually pitched them on a on a transformation process just yet. Uh but it is coming. And so all of that means more time for the doctors to actually spend time with patients doing the important work and spending less time on the papers and the filing and the signatures and you know and we're we're not long for just okay as these questionnaires come in and I need to sign all these documents just sign them for me handle it over iMessage. All the modern AI agents are uh within a hair's breath of actually realizing that future. Well, uh some some cause for optimism amid um amid, you know, sort of disappointing, uh you know, interest rate news. Anyway, the people, they will get a vote on AI safety. The Wall Street Journal has an opinion piece here about the role democracy will play in the AI discussion that we've been having over the last couple weeks. First, I'm going to tell you about Railway. Railway is your all in is the all-in-one intelligent cloud provider. Use your favorite agents to deploy web app servers, databases, and more. While railway automatically takes care of scaling, monitoring, and security. So, the technology risks came into focus last week. The polit is the political system prepared, says William Galston in the Wall Street Journal. Experts have long worried about economic, social, and social and security impact of artificial intelligence. Uh this year, those risks have moved onto the public agenda as growth as job growth slowed. worries that spread a that worry spread that AI would displace entrylevel workers. Next, local concerns prolifer proliferated about the effects of AI data centers on water, electricity, the environment, and noise. Then, in a widely reported incident, an open AI test went arry. A swarm of AI agents bypassed internal limits, created their own message board, and cooperated to hack another AI firm. As a recent journal article made clear, this wasn't the only such event. Last week, mounting fears within the largest AI firms at the frontier of AI development burst into public view. On Tuesday, Jacob Coxin resigned from anthropic with a warning viewed by millions that AI will soon be able to hack any system and mobilize real power and resources for malign purposes. On Thursday, uh, Anthropic released a 154 page report on the misuse of Claude with an especially chilling chapter on possible biological weapons research. There was another chilling chapter on uh what's going on in the Middle East. Both it's the meme. Both sides are using claw to fight each other. Uh really really crazy stuff. I I think this was mostly through like routers and third parties and all sorts of stuff. But uh it's clearly a hairy mess to fight uh diffusion attacks and or distillation attacks, but also just all sorts of um all sorts of nefarious use. Uh it's a it's a true game of whack-a-ole. And so uh full full employment for alignment researchers at at the labs. On Saturday, Anthropic CEO Dario Amade published an essay urging the industry to quote slow the pace at which we improve the capabilities of AI models to give risk mitigation strategies a chance to catch up. He proposed a three-step plan to accelerate this process. We talked about that yesterday. The third point will surprise you. First, each company at the frontier development will give employee like access to independent evaluators. Second, US companies should promote the cooperation among democracies to mitigate risks while preserving their technological edge over China. Third, the the US should attempt to negotiate limits on AI risks with China, analogous to nuclear arms control treaties of the Cold War era. Now, there was an interesting post that hit the timeline. Was that actually from a Deepseek employee? Do we know that? But a Deep Seek employee basically was like, I don't like Daario. He was he compared giving Daario AGI to like giving Hitler the bomb. It was a very very hardcore message from a from a Deepseek employee. But of course it's like translated through seven layers of of abstraction. So I don't really know what to expect was real or
Yeah, it could just be some SC. But did did you look into it at all, Tyler? Do you know?
Yeah, I have no idea if it was real either.
Yeah, but I mean it seemed like reasonably reputable people I follow were were talking about it. Yeah.
Yeah. I I it's it's really really hard to get a to get a feel on the the vibe in China. It's like uh I think the I think the compute gap is 10x America has 10 times the compute of China. So you would you would imagine that if if both countries get to AGI and it or ASI and it's aligned with the country then even if China attacks with the super cyber weapon our AGI can defend better because we have 10 times the compute. I I think that's sort of how it would work out but it is it is difficult. Um, and then there is there is this weird scenario where it's like if you have an aligned super intelligence and your enemy has a misaligned super intelligence, they get turned into paper clips, but the paper clipper can't come over into your territory because you have the paperclip defender, which is turning paper clips into useful stuff like cars and medicines.
Microphones microphones, I suppose. I don't know. It's all It's all very uh very sci-fi. But I mean, one of the one of the wildest moments of the last 24 hours since we wrapped the show was the Department of War just saying effective altruist in shambles.
That's a that's a very online after the president said, "I am the hoax buster and right now I'm breaking another host." that AI is going to take over, consume, and destroy the world, and that robots will be marching into our cities and getting rid of us all. This is even wilder than the Russia Russia Russia hoax or the global warming scam. Thank you for your attention to this matter. Um, yeah, never never expected to see uh the Department of War going to war with EAS on the timeline, but uh here we are. Here we are extremely extremely online just time but also also uh administration AI developers face a collective action problem that only an agreement to coordinate activities can overcome. There was some news around this where uh uh uh OpenAI believes that they don't need a waiver to coordinate on safety policy with other companies. And I was trying to research how seat belts got put in cars because it's sort of analog it's sort of analogous, right? It's like the seat belt clearly is a safety feature in a car and if one company does it, it's a cost. Maybe it's a benefit. Maybe it sells more cars because people want that. But it'd be really great if all the kind if all the cars had seat belts and then the health care system and the hospital systems want people wearing seat belts so they don't have to deal with as many broken bones from car accidents. Right. So I think Volvo John Morgan would like a word.
Yeah, probably. Uh so so not spending a billion dollars on AI so that people stopped getting into car accidents.
Yeah. So uh Volvo put uh put seat belts in their cars first as an option. It wasn't selling that well. There was some lobbying to get uh seat belts in cars, but a lot of automakers actually fought it and were like, "No, we don't want to do this." And a lot of consumers were like, "We don't want this. We don't want to have to wear these."
No way. Oh yeah. And yesterday we heard we heard Mitchell talking about like it's outrageous that you can't get a four-point harness in a car in a car street car in Europe. You can you can uh it's like he wants more. It's like I want to be able to get a roll cage. No, but it's so wild that that you had millions of people driving cars and car accidents happening and yet people were still saying, "No, I don't want I don't want more safety. I don't want to have to put this thing over over my lap. Well, I don't want to do that. Every time I got to put them over every time. Well, do you remember the era of uh of automatic seat belts? Did you ever see cars that had those?
This was like a late 80s, early 90s phenomenon, but if you got into like a Saturn or something or, you know, it would you would step into the car and then it had a uh part of the seat belt was on a mechanical track that would the the the seat belt would be pushed forward. You would step in and then the seat belt once you closed the door and sat down, it would go and move into place so that you didn't have to buckle it like that. Ferraris will hand you the seat belt with a little with a little push out, you know, so you don't have to reach back too far.
Uh that's uh that's such a half measure. Either put it on me entirely or don't, I guess. But even the even the automatic seat belt really died off. It's not even a luxury feature on the most premium cars. It's like a Rolls-Royce won't have that because I think it was just like annoying at the end of the day. Never really caught fire. But the odd thing about seat belts and cars is that I don't believe they had a dramatic effect on road like like car based fatalities and injuries because people just started driving faster. But there was an efficiency gain from it obviously because people are driving farther, commuting to work farther and then also uh uh spending less time in the car if they're going the same distance. But I don't know a big seat belt show the deep dive on seat belt you've been asking for. Uh so what does the Wall Street Journal have to say about this? Uh AI developers face a collective action problem that only an agreement to coordinate activities can overcome. The question is whether voluntary agreements can work without government involvement. The US government must assure AI companies that voluntary coordination wouldn't run a foul of antitrust laws and regulations. Mr. Amade argues for an additional step, sensible and targeted AI regulation that focuses on corporate transparency and independent third-party evaluation, which can't succeed without evaluators embedded within firms and enjoying unfettered access to all relevant information. In a better world, support for assuring AI safety would be bipartisan. Instead, House Speaker Mike Johnson had made clear his reluctance to proceed while President Trump has denounced what he terms a sick conspiracy going on against AI and data centers. Uh, underlying this res resistance is a legitimate concern. The US is in an AI race with China that it can't afford to lose. All private sector AI leaders share that concern. Mr. Amade said he agrees with Treasury Secretary Scott Bessent that quote a Chinese lead in AI would pose grave danger for the United States and the world and he wants to keep democracy's AI lead over autocracies as large as possible. He opposes the sale of powerful AI chips and semiconductor equipment to China and supports security measures in AI companies to prevent Chinese theft of key data. The question is whether we can diminish the risks of unchecked AI development without endangering our lead over China in a technology that is vital to economic growth and military prowess. The the tech industry believes it can. The Trump administration says we can't. What are you laughing at?
Matt in the chat says, "Did you guys know alignment can be solved by having a strong president? I'm so relieved."
Potentially, maybe that's just what we need.
This one simps hate this one simple trick. Yeah. I think I read this in a less wrong thread 15 years ago. People were saying it's going to be bad unless we have a strong president.
Yeah. Yeah. Yeah. Really really breaks paper clip. Uh the paper clipper thought experiment wide open Boston. He did a whole chapter on this. Uh candidates have gotten the message even if some national leaders haven't. Mike Rogers, former chairman of the House Intelligence Committee and Republican nominee for Michigan's Open Senate seat, says he supports slowing AI development, would work to address the technology through legislation. The people aren't always right, but in democracy, their views demand at least a respectful hearing. If the Trump administration won't initiate this discussion, Congress should as soon as possible. So, yes, uh even, you know, Trump is not hugely popular right now. I think his his favorability rate is like 36% or something like that. the war took a lot off of that and so there is like a ground swell and you're already seeing this with the backlash to data centers and it feels like both on the right and the left data center backlash has been pushing up against the Trump administration and so if the if if everyone who's against data centers can easily port over to this exact pro- AI safety AI slowdown which is highly correlated um even though there's a world where you don't slow down the buildout, you just slow down training and capability development. But I think that's maybe a little bit too nuanced for the political discussion. And so you could wind up in a situation where all of those anti-data center people both on the left and the right come over and join a coalition pro- AI slowdown and that becomes national conversation and there is a lot of pressure on it. But of course they'll be going up against the actual executive branch. So that will be complicated. Uh anyway, what else is in the timeline? Let me tell you about public investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service.
Uh there's a new time cover.
Uh it has Claude on the front with the question, how dangerous are you? Are you interesting?
Um and uh yeah, so full full full full push on this narrative. Yep. Um, one of the most brilliant
You're talking about the narrative to not give Jensen credit in Time magazine for being influential in AI.
Oh, well that that's a whole other story because that was last month's Time cover was a hundred of the most influential voices in AI. Jensen didn't make the cut.
Um, no, no, no, but I but I was talking about the campaign around this moment, AI safety. It it is really coming from every possible angle. You know, you have uh everything from Time magazine to Joe Rogan to Tucker Carlson to every major publication to Kla Harris to Barack Obama to uh Bill Gates is really really really coming from every angle. Uh ends up in time today. Um Jordan uh Shackel is saying two of the reporters on the by line for this uh cover are funded by the Tarbell Center and AI Doomer or he says controlled by Duskin Dustin Moscowitz uh Mosovitz sorry Tarbell gives journalists large grants uh and and these are Jordan's words to insert AI dumer stories into prominent outlets time did not disclose the affiliation. So there's a lot bubbling up on uh the Tarbell Center recently. Uh they've been very public about what they're doing for years now. Um they they give uh cash to journalists. Uh and these journalists are, you know, at uh Time magazine, MIT, Bloomberg, The Guardian, a bunch of your favorite uh Substacks have taken uh have taken money from from uh Dustin's uh organization. And uh yeah, I expect to see a lot more coverage on Tarbell.
Mhm. uh over uh and it's funny. It's like who's going to cover them because they've given money to people in pretty much every prominent newsroom.
And so it's kind of an awkward thing to try to cover if you're like an editor and someone says, "Hey, I want to cover this story." And then and then they're like, "Wait, they gave money to this person in our newsroom." Um so I don't know.
Maybe you don't like the person that's sitting across from you on the news desk. You're like, "Oh, I see I see the bus down. They got on their wrist. I see.
No, but it's really it's The Verge, NPR, The Information, The Seattle Times, South China Morning Post, TechCrunch, The Guardian, Scientific American, uh CBS News. Now, the LA Times, the steelman is that these grants don't come with strings attached, that they're not coming with talking.
It's a free lunch. It's It's actually They say free lunches don't exist, but there are exceptions. Yeah, in this case it's your steel man is that is that the Tarbell Center gives a free lunch potentially CNBC Fortune Time USA newcomer there I know but they say our partner newsrooms okay on the website interesting San Francisco Standard China talk platformer Bloomberg like strategy on there uh no oh okay subscribe to s strate uh no but Basically every pretty much every newsroom. Okay. NBC. Theo Theo Von. Not yet. Okay. It's the final hold out. Call her daddy. What about Spitting Chicklets? Uh, Busting with the Boys. Is Busting with the Boys on there? Okay. What about the new Jackass movie? Did that Did they take Tarbell money? Probably. Okay. Well, we'll have to get to the bottom of it. No. Who knows? Crazy really I think one of the most fascinating um stories emerging stories. I'm interested to see how these groups cover it. Is Alex Heroszi involved? Not yet. Okay. I don't think they've they've um focused too much on uh courses, but um Manosphere remains clean. Yeah. For now. Yeah. So if you want to get your AI takes from Theoon, maybe he's got some good ones. Honestly, uh anyway, you talked about Morgan and Morgan. Let's dig into this a little bit. The nation's largest personal injury firm said Monday it's committing $1 billion to artificial intelligence over the next decade. Okay, it's not all in one go. Plans to sell its proprietary AI product to other law firms next year. Uh though they will build a tool for sale. So, are they actually buying a data center? Let's find out. Uh the announcement positions the Orlando, Florida based firm as both a legal practice and a potential technology vendor at a moment when the broader industry is racing to build or buy AI products. John Morgan, the firm's founder, said the endeavor would be self-funded, although he has expressed interest in exploring outside investment. The firm has spent $300 million on tech and AI since 2021 building an in-house platform called MX2 using Frontier models as a base. Back in 2021, I'm so okay the time it must be like they were investing in technology broadly and then they adopted frontier models. Uh the firm has a chief transformation officer uh who has been working on this. Uh the financial investment covers the firm's Brooklyn New York based production uh and tech operation including personnel platforms and software. The firm will make MX2 available to firms by invitation only starting in late 2027. That is a long way away in AI land. Who knows what's capable by then? Uh Kirkland Ellis, the world's largest firm by revenue, committed 500 million to uh build a proprietary AI platform in May. Laaman walkins said last week it purchased its own NVIDIA GPU servers and leased private space over the past three years. Though the firm declined to disclose what it spent, Goodwin Proctor said it had set aside 25 million annually for AI. MX2 uh runs what are called agentic workflows, meaning the system acts on its own to pull medical records, retrieve police reports, generate demand letters, and track case patterns across the firm's national case load without a lawyer initiating each step according to the firm's announcements. Really does make so much sense for personal injury. Like there's so many uh just transcribe the call coming in, rank it, lead scoring, like there's a lot of very basic work that needs to be done just pulling police reports, generating letters. Uh it makes a lot of sense for this. I wonder how much benefit they will get out of their their own model or how much they will be leaning on other models that just have a lot of the capability built in, but clearly they'll want to do things their own way. So, makes a lot of sense. Are you going to buy Palmer Locky's new shirt? He's getting out of the Hawaiian t-shirt game and into the blue button-down shirt. He calls it the balmer.
It comes with sweat stains already applied.
I was really trying to understand what was this like he's reacting to the news of Balmer and the Clippers and so
He made this as a joke, like, what, like, why is he like, is this a funny video? But it resurfaces.
Or is he, is this a nod to clipping becoming a new kind of type of role on the internet?
Clipping? What do you mean clipping?
Clippers, you know, people that clip podcasts and other content.
I don't know. I'm, I'm joking, Palmer.
Um, no, I think he's just having fun.
I originally was reading into it being like, wait, does Palmer have some beef with Steve?
Yeah, exactly. Exactly. Is he making fun of him, or I think he's just like, it's a fun, fun, uh, fun moment in technology history.
Let me tell you about Shopify really quickly. Shopify is a 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.
Uh, Pulley, the cap table management software, is shutting down.
Um, I, uh, it seems like they've, they've probably run out of money or something. Um, what's crazy is I was on Pulley over the weekend. Yeah. So, this notice serves to inform you that Pulley will be shutting down and will cease all operations and services on 12/8/26.
To ensure they've entered into an exclusive partnership with Carta. So, not an acquisition, but, uh, Carta is just basically saying we'll help bring your customers over. Yep. Um, so, uh, I, I think this is, Pulley's a company.
I believe they raised something like 20 million, $20 million Series A was their last round. Uh, let's see. I think, uh, or maybe it was a Series B. Um.
Pulley had a Series B from Founders Fund, actually. I didn't even remember that. I think Stripe did the A.
Um, back in this, their last round was in 2022.
Yeah. I mean, that makes sense. Potential future acquisition.
It's interesting that Stripe didn't buy this to roll in.
I think it's just such a small, I think it's just such a small market. Like Carta has to, in order to be, who knows what, what Carta's actual valuation is right now because they made plays in the secondary and they got so much pushback.
That actually drove a lot of...
Always needed like a second act.
Two, you know, um, one of the companies that I'm a shareholder in that's on Pulley was specifically on Pulley because they didn't want, they, they were worried about Carta sort of like getting...
Running a secondary market.
Yeah, running a secondary market on top of, on top of their cap table.
Um, but, uh, but yeah, I think this is the, the, the kind of business where you can be a big company, you just have to have like 80% of the market, right?
And, um, so yeah, tough, tough go. But it's been like almost four years since they had raised money. So at this point they probably were just out of cash. They're not making a lot of money. Big pre, you know, at that point like probably 50, $60 million pre-stack.
Was going to be impossible to clear.
Carta wouldn't pay. So they end up shutting down.
Yeah. The typical Pulley user story outside of like those, those one-off like transition periods where there's a news cycle around something Carta is doing that drives, uh, uh, adoption was just being lower cost than Carta. I think Carta runs like maybe 5k a month for most venture-backed startups at like the early stage or 5k a year, I think, and, uh, Pulley would sort of come in with a bid that was like half that. And it's, the product is kind of just an Excel sheet in the cloud. It's like, it's just SaaS to kind of keep track of who owns what. It's obviously really important and core to the business and something that you don't really want to skimp on, um, because there's a lot of financial implications to that. But, uh, what would a lot of companies, what they would run into is they would get a quote from Carta that would be like five grand a year and then Pulley would say, 'Hey, we can do it for half that.' And then the outside counsel at whatever law firm they were using were like, 'Yeah, you could use Pulley, but our team isn't really familiar with that.' And, uh, we're going to wind up billing you 200 bucks extra a month and it's going to wind up being the same price because our, the, the associate on a, on your account that, uh, manages your cap table in Carta right now knows all the workflows, there is very comfortable with Carta. If they're going to have to go into Pulley, they're going to spend more time messing with it.
Yeah. As an, as an investor, probably like eight, you know, nine out of 10 investments around Carta.
Uh, and, and there's, there's no benefit in...
And then also on the upmarket side, it goes to like ShareWorks and Morgan Stanley and like other like more investment banking grade products because you're getting ready for IPO. And so this like, this, this, the tier below Carta but not in the small business world was a little bit too tricky. So it wasn't something that you would be managing your LLC that you spun up on Stripe Atlas with. So there wasn't that fit. But then as soon as you were serious about growing and you were raising tens of millions of dollars, you're not sweating over a $5,000 a year bill for Carta.
Yeah. And this market has been so hard to crack. I mean, AngelList had a cap table product at some point. Um, they were doing incorporation plus cap table. They, I think, exited cap table for the most part.
Um, so Carta, uh, basically has monopoly at this point.
Um, and, uh, so I'm sure they're, they're excited for some price.
Do you think any startups are running vibe-coded cap table management?
You don't think there's one crazy person out there that's just like, yeah, I...
Don't make mistakes. No, it's like one of those things, like it's like early on it's like $5,000 a year and then if it makes a small mistake it could cost you like literally $5 million, you know, also like a lawsuit and like a really bad reputation for like you stiff some investor accidentally or something. Yeah. Uh, very, very tricky. Anyway, um, what's going on over at RAMP?
Uh, new update from the RAMP AI Index. Um, economics lab.
R says OpenAI is winning enterprise spend at the frontier as of this week. Astra takes 13% of enterprise AI spend versus Fable at 8%. Uh, some early thoughts. Anthropic took a big risk in its recent call to pace the frontier. Its frontier model has already fallen behind on adoption.
OpenAI's growth is primarily coming from shifts, uh, from shifts from Sonnet and some Anthropic models as well as net new usage. That's good for them and suggests some pricing power remains by having a good competitive frontier model. So, um, yeah, Astra's, you know, in many ways seemingly a bit, um, more cost efficient and so that's probably, yeah, a factor, but also the data retention stuff that, that Anthropic is working towards fixing by the fall.
Yeah, the data retention thing. Yeah, I, I don't know. Yeah, that's probably a bigger thing for enterprise AI. I would, by default, I would go with like, Astra had a very buzzy launch around like Blender and video game creation, but that's not moving stuff in the enterprise. Although maybe with the long weekend, you do get a CTO at an enterprise building a video game and then coming to work and being like, we got to roll this out everywhere. Uh, I don't really know how much this, these things diffuse that way, but, uh, that, that, that launch weekend into the long Labor Day weekend certainly gave a lot of people time to, to demo it on personal projects and bring it into the workplace with confidence. So good, good, uh, good results there.
Let me tell you about MongoDB. What's the only faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it.
Uh, after his forthcoming IPO, Aliko Dangote's estimated wealth is expected to be around 58 billion dollars, putting him above Ken Griffin, Lakshmi Mittal, and Jack Ma. Refinery IPO. Refinery IPO. Um, what, what do they do? The 69-year-old tycoon's net worth is projected to be as, as worth as much as 58.
Tycoon mentioned this is what it takes to be a tycoon these days. The petroleum refinery and petrochemicals company. Uh, that would catapult him past US hedge fund tycoon Ken Griffin and technology billionaire Eric Schmidt. You better not bid for a new T-Rex skeleton against this guy. Uh, he's expected to raise about 1.6 billion from the IPO opening September 14th. That will raise the value of the business, that will value the business at almost 50 billion. It's part of plans for an Africa-wide empire that will double capacity of his Nigerian refinery to create one of the world's biggest and, uh, and building a processing plant in Kenya to extend his reach from the Atlantic to the Indian oceans. The offering demonstrates that African entrepreneurs primarily backed by local capital can build and run world-scale operations and could catalyze a new wave of investment development on the continent. His plant reached full capacity this year just as the war in Iran kicked off, shielding Nigeria from supply issues that other countries faced. It also made Africa's most populous nation a net refined fuel exporter for the first time. Pretty good stuff. Good day to be a tycoon.
What's going on with John Turnis?
John Turnis the Terminator. Uh, was...
Sounds like Terminator. Terminator. Uh, was at the Emmys last year?
Didn't Tim Cook do this exact bit like two years ago?
Yeah. But did the phone fold?
No, it didn't. And, and the funny thing is that I think Tim Cook did this exact thing last year at the Emmys where he pulled out the iPhone 17 Pro and they asked him like, 'What's your favorite iPhone?' And he was like, 'It's this one.' And he did the, it's the thinnest, lightest, bestest ever. And everyone was kind of like, 'This is not good content.' But this is so, I don't know, thought it, it, it hits completely different because there is actually something novel about it. Yeah.
I don't know. It's better. And he's smiling. He's all smiles at the, at the Emmys. Very good. Uh, Max, uh, from, uh, Creative Strategies says he seems so happy and proud showing off the iPhone Duo. It's kind of nice and sweet to see.
People were, people were, uh...
Yeah. Yeah. This has been his life's work. He's been doing this for decades. Uh, people were, uh, were speculating that Jensen was talking to Donald Trump at the All-In Summit on an iPhone Duo, but the Germinator chimed in and said, 'It doesn't look like an iPhone Duo. It looks like a different foldable phone from a different company. Not an iPhone Duo. They're barely in the wild. Just people getting a peek. And I don't think they sent out review units. I, I think, uh, uh, reviewers were allowed to be on site at Apple, touch them, play with them, do backflips with them, but they did not send out iPhone Duos and say, 'Hey, go take it for a spin. Do a full review.' That might happen later, but it's not happening now. Um, what else?
Still trying to think about using that screen.
I think it's, I think it's going to be good. Full self-driving. Pull that out. I think that's the move. People are already watching their phones constantly when they're texting, driving. If you're in FSD and it's level four or something, so you can be fully, I think level three, you, you just have to be available to take over. You don't actually have to be...
Have the laws actually been updated?
Yeah. So, there's a Mercedes that is level three, which is odd because Tesla is technically level two because you have to be eyes on at all times. You can take your eyes off the road for like 30 seconds. Mercedes has a, has a version where if you're on the freeway and you're going, I think, over 30 miles an hour or something like this, or there's some, there's some barrier, it will let you watch a video on the, on the monitor, on the display in the car. It will actually let you do that, uh, because Mercedes is then taking the responsibility. More of an insurance problem than a technology issue because I don't believe that the, uh, the Mercedes level three system is actually pro-, is actually less, it probably has more disengagements than Tesla's level two FSD system with the mo-, with the, with the most up-to-date iteration. But while it's working, you can tune out entirely. So iPhone Duo bull case there. I don't know, on a plane, you're not bringing an iPad, not bringing a laptop. Just bust that thing out, watch a movie.
Then you can bring a mouse in your pocket, too.
Maybe. Maybe. Full gaming setup.
What did Matthew McConaughey do at the US Open? He just...
He was playing a character.
26,000 likes on this. It looks totally normal to me. I don't know. I don't get it.
You don't think this is, uh, absolute cinema?
I, I think it's, I, no, I think it's absolute cinema. A lot of people are saying, uh, it's the most performative thing of all time. Uh, but I think it's great that he's always in character.
No, he's not always in. He just, he is who he is when he's on screen. And so when you see him in real life, you're like, you became the character.
He's playing a character, but he's just being himself when he's on screen. It's the opposite. You have it backwards.
Anyway, let me tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Um, Ben says they always cast him as him.
Yeah, there are, there are some articles we should go through.
One year ago today, uh, Dylan joined TBPN.
Uh, what a legend. What a dear friend. It's a privilege to get to work with our dear Dylan every day, even though he's not here in the Ultra Dome with us.
No, he's too important. He's got to be up in San Francisco.
Uh, apparently China stole the American recipe for blueberries. Did you see this?
There's nothing. They distilled us, a distillation attack. Basically, Driscoll's gave China its blueberries. Then, China swiped the secret to growing them. California growers' expansion into China ignited local competition and widespread intellectual property theft.
Why are you hitting the...
Oh, that's for Dylan. Okay. Gong for Dylan, not gong for blueberry intellectual property theft.
China, they got the one simple trick to improve their berries.
Yeah. They stole the secret.
So about 15 years ago, executives from US fruit grower Driscoll's went to China with a goal of turning blueberries into that country's next big food trend. The California company dispatched one of its experts to scout farmland in southwestern, in southwestern China's Yunnan province, contracted with, with global blueberry genetics firms to lock up the best varieties and brought in high-tech growing technologies to mass-produce a fruit few Chinese people ate then. By 2020, it was cranking out thousands of tons of blueberries for Chinese markets. Then it became the latest US company to encounter the buzzsaw of Chinese competition. As tales of blueberry fortune spread, Chinese entrepreneurs rapidly built farms of their own. They adopted high-tech growing techniques similar to Driscoll's, even allegedly copying greenhouse designs used by farmers growing for Driscoll's. They also swiped the company's patent-protected varieties. A Chinese court has ruled state banks fed the rush, offering a special category of loans for blueberry growers.
The blueberry economy over there is booming. Production in China has shot up 25-fold since 2010. In 2021, China overtook the United States as the world's top blueberry grower. And by 2025, its annual production was double what it was in the United States. For Chinese consumers, it was a blueberry bonanza. This is the Wall Street Journal writing. I love it. Blueberry bonanza. Prices dropped so low, often $3 or less for a 9-ounce container, that state media trumpeted an era of blueberry freedom in which even ordinary people can gorge on a once-exotic fruit. For just about everyone in the blueberry business, though, it has been a knife fight plagued by intellectual property theft and tanking profits. It's a pattern seen across many industries in China, especially as economic growth slows. Companies in search of new sources of profit jump into promising emerging businesses. If you're in AI, pivot to blueberries. That's what happened. Using inexpensive state financing to scale up and sometimes play fast and loose with intellectual property regulations. This quickly causes gluts, crashing prices. Such cycles of competition are known in China as involution and they have transformed the country from a golden goose into a major headache for companies including Nike and Starbucks. Driscoll's has filed more than 20 lawsuits against companies in China, some of which it has said took its proprietary blueberry plants, propagated them and sold them to rival growers. Some western fruit companies worked with private investigators who went undercover at plant nurseries posing as traders or farmers. Dream job.
Oh, me? I'm not here from an American company. I am loyal.
A spy movie, but you're an undercover...
Just tasting the blueberries and you're like, this is American intellectual property.
Blueberry. Blueberry special ops.
Gold Rocks calling it the fruit wars.
No, it is, it is crazy. It's like you, I mean, you would like, when you're, when you're discussing China, you think about the geopolitical implications of powerful AI, defense technology, uh, supply chain dependency, critical minerals, critical industries, but it can, but, and it's often easy to think like, oh well, it's, it's blueberries or it's shoes, like it's not, it's not critical to the national interest, but it can still be difficult and detrimental ultimately because once you know this happens and the intellectual property gets taken and this, and the, and the infrastructure gets built up, then they can become a net exporter and then they're competing with you and so you can sort of be the victim of your own creation if you're not careful. And so very, very difficult for western companies to, uh, properly...
It is, yeah, it's a fascinating IP story because your IP is in large part a plant that can just be taken out of the ground and planted somewhere else and then propagated.
Yeah. And, and it's like, do you own a living, like, can you, can you...
Those your tokens or are they my tokens now?
It's very similar. It's very similar.
Uh, they're, they're saying that Muse has a new killer feature.
Which is watching short-form video content for you.
So Cowboy says summarize the reels she sent recently.
And Muse goes, here's what she sent over the past week. Design and furniture. A designer ranking famous sofas by comfort. Uh, and, uh...
For that friend who sends you too many reels, you now have super intelligence, personal super intelligence at your disposal.
Yeah. Giani says, 'Wife sends me 100 reels a day. Thank you so much. You've saved my marriage.'
Are people, uh, uh, upset about this ethically? Is this like what, making the fly watch reels? You're making me, mu-, Spark watch reels and that's unethical. Is there a model welfare view on this issue?
You think, you do, you think the model would rather summarize your email than watch reels about sofa designers?
Maybe my email's pretty interesting stuff in there, like invites to the co-founder and CEO of Axios to come on this show. He's with us in the waiting room. We have Jim from Axios. Welcome back to the show. How you doing?
Great to, thanks for having me.
Welcome to TBPN. Uh, thank you so much for hopping on. Uh, I would love to start with the book. Uh, can you please, uh, just introduce the thesis? Take us through, uh, your process and I have a ton of different questions about media and just books generally these days. But, uh, take us through, uh, what got you inspired to write this book.
Yeah, the book is Simplify: How to Do 50% More with 50% Less. It's a system that we used at Axios. So, as a journalist who also happens to be an entrepreneur and runs a company, I saw the magic of this system inside our company where we were basically forcing me down to the newest employee to focus only on those things you're actually good at and that you want to do and should do and then deleting the hell out of all the things we do at work we shouldn't do or that someone could do better or that we could off-, offload to AI. And the results for us internally were magic. We had like 70% higher revenue per employee, but more important, employees were happier because they stopped doing all the crap you don't want to do at work, but we do out of habit or we do out of inertia. And so the book walks you through whether you're an entrepreneur, a CEO, uh, or, uh, somebody brand new at a company, how to apply this system to you. And then also to how to think about it even outside of work because we end up wasting at least 25%, a lot of surveys, so a lot more of our time doing stuff we don't want to do and shouldn't do.
How much of this book is for the C-suite, for the founders, for those with agency to go implement change versus, uh, employees who, uh, might be able to still take something away from this but might have more like rigorous dictates from above about where they spend their time?
No, it's very much written for everybody. Obviously, there's chapters for CEOs, for people in the C-suite. I think it's super applicable. I think any company in the AI era where every part of every business changes way faster than most people can keep up with need a system like this. But it's super applicable because I saw the biggest difference really with our rank-and-file employees. Just forcing them to do the exercise in the book of what are the three things you need to do in order to crush your job. What are the three things you do that you think are stupid and almost all the time we can delete those? And what are the three things you think you can offload or have automated by AI? And it's just such a game-changer. And you can apply this to anything from how you communicate to how you structure the company. I don't even know how companies without some form of this system are going to be able to thrive over the next 5 to 10 years because the velocity of change, especially as you integrate your company with, uh, artificial intelligence, it's so fast. And you're going to have to have a lean system with people focused only on the work that matters, figuring out what can be rightly outsourced and outsourced, uh, to, uh, machines and to AI. Otherwise, you're just going to be like all these old-line companies where all these barnacles build up and inertia sets in and the bureaucratic blob takes over.
How do you, how do you react to this, uh, this take that I see sometimes where it's like AI is being forced on people? I've, I, I've seen like, I think a few people are like, uh, my boss is forcing me to use AI and, and there's this like pushback and I feel like, I don't know, at least among the people that I work with, it's like we make the stuff available, they use it as much as they can, we educate people on where they can use it more, but there's a very judicious line where we don't want you over-leveraging and degrading the quality of your work, but we want you to get rid of the drudgery that actually can be offloaded reliably.
Yeah, I think the right way to approach it from the company standpoint is to make these tools available to everybody, give them some space, give employees some space to experiment, uh, and, and encourage people who actually kind of have an AI brain. And I think there's a very specific type of person who thrives in an AI world, figure out new roles for them so you can show to people that there are new roles being created by using the technology. The individual contributor, I would say this, I'd say to my kids, I'd say it to anybody who works for me. It's a new power tool and it might be the most powerful power tool ever given to man. So, at least figure out how to use it for the specific job that you have. And if your company finds use cases and you don't really understand how to use it, at least use it passively much like you would have used a computer or a calculator or, uh, or the internet to better do your job. And I think that is the safest framework to work because I think the gulf that you're talking about, which is super real, is, I think for the vast majority of people right now, they have no idea what the hell we're talking about when we say that this technology is so powerful. They're like, whatever, it's kind of a nice search engine and yeah, occasionally gets things right, occasionally gets them wrong. But then there's the 1 to 2% of us who use it every day, who are integrating it into our companies, who are studying it, and we see the magic inside of it, and we see how transformative it can be and will be. But because you have that big gap, you have all this fear, all this confusion, it's messing up, I think, the images of these companies, and these companies are not great at managing their images, but also the politics of it. Because in that vacuum is fear. And where you have fear, politicians are good at stepping in and often giving dumb solutions to really complex problems. And I think this is one of those societal type challenges that I really want to see the best, the brightest, the most competent people in the world from all different domains helping us figure out how we turn this into a force multiplier for all of us individually, but also for the country. Otherwise, we might lose to China. Or otherwise, we might create something that we don't actually understand how it works, and it might only benefit the few, and then everyone else will suffer. And if people are suffering, they'll be pissed. And if they're pissed, they'll protest. And you'll have political, uh, toxicity and, and, and political upheaval. And that's not good for democracy, not good for free markets.
Sorry to interrupt. Is it possible for you to, uh, put your, like, stabilize your, your phone or whatever down here? Yeah, I'm trying to hold it. How's that?
Even if it, yeah, even if it's pointing up a little bit more, just 'cause, uh, for anyone that, that might get a...
There we go. Perfect. We're back.
There we go. There we go.
Perfect. Much better. Um, John.
Yeah. Um, how, how do you, how do you grapple with, uh, the cognitive outsourcing, uh, question? Like there was this report I think like a year ago that showed, uh, developers paired with AI were like actually less efficient at closing bugs in these open-source repos. That was true for like one month and then all of a sudden it became way more efficient to use AI. But there's these like little gaps where I feel like if you're a little bit too early, like if you tried to write a book with the help of ChatGPT in 2022, your book was probably way worse because it did have hallucinations. It did have a knowledge cutoff. It did just like, you know, just make wild mistakes and you probably were fighting the AI for a long time. Whereas now if you are using modern AI systems for research and fact-checking, you're probably speeding your process up. But there's this early adopter, uh, like there, there's a friction to being an early adopter. And so I'm wondering how you think about, uh, coaching employees, coaching, uh, executives and founders on, uh, the right pace of diffusion. Like, uh, I just saw this with, uh, with Astra and Blender. It can build all these crazy amazing models. They're not pixel-perfect. And so I would not recommend someone to actually go and, and build a house that was designed in Blender with GPT-6 Astra. Like it's not there yet, but it's a really cool demo and it's clearly a glimpse of something in the future. Now, if somebody was like, I'm trying to build a personal web page, I would say absolutely use a coding agent. They're good for that. But how do you, how do you deal with the trade-offs there?
It's a really, really, really good question and a very hard one to answer because a little bit depends on what you do and how old you are. I would say if you're in college and you're kind of, your brain is still forming, you've got to give yourself space to learn, to think, to look across different domains, teach yourself how to do deep concentration, deep thinking. I think once you're in the workforce, I think what's worked for me at least has been I use it deeply. I use it a ton. I use it across every aspect of the company and my personal life mainly because I feel it's important for me to be an AI lab rat so I can explain it to our readers and to my company. But I also then I'll dive in and out because I don't want to become too dependent on interacting with a technology to kind of sharpen my own thinking. You can become quickly dependent on it. And I think there's this great balance if you can find this balance between your own creativity, your own ideas, your own voice, and then using it to like augment and experiment. And then as it gets better and better in the things that you're trying to achieve, once it gets as good as you or better than you, then I feel much better outsourcing it. Like a couple good examples are like design a couple months ago wasn't that great. But I think with both Claude and the new, uh, ChatGPT, especially the image generator, like some of the designs are just spectacular. They're better than anything I've seen any human do. And so when I now think about designing new products or even designing something for our company, I'm much more likely to turn to AI than I would to turn to a person. I think you, you see the same thing across almost every domain. Like where it's not great is like if you're not that creative of a thinker and you're thinking thinly, it might make it a little bit better, but it's still going to be relatively thin. As you guys know, the, the magic only gets unlocked when you're persistent with the, with using whether it's, uh, whatever you're using, whatever tool you're using, you have to use a lot. You have to give it a lot. You have to give it a lot of feedback. You have to make sure you say this works, that doesn't work. And once you do that and it knows more about you, your style, your weaknesses, your blind spots, your strengths, that's when you really start to see the big unlock. And the problem is not many people have that kind of time to be able to put that type of work in right now. Which is why you have this weird messy middle inside businesses. The technology I think is better than most people think and it's way harder to connect into existing systems than people think because your data pools.
In this right now where we're doing like this national press cycle around the AI doom stuff and like that's an important conversation, but like there are a whole host of people that don't know that like it can build websites and like there, there's a, there's just so much noise to try and punch through if you're an AI company just to be like, like we're good at using a computer now or like it works for Blender now or like you can, you can use it to control, like I used it to fix my Wi-Fi on my desktop because it can actually access the computer now. And there's all these, there's all these new features that they just get tucked behind the empty blank box of like what do you want to do? And a lot of people are like, I don't know, what are you capable of? And yes, you can ask it, but very few people actually do. So actually getting those inspirations forward is, is, is a huge, huge challenge.
I am interested in one, in one other kind of separate topic which is just, um, I think that when, when people talk about AI in, in publishing, in media specifically with Axios, they go to reporting and writing and instantiating the content, but I'm, I'm, I'm more interested in is AI having an effect on the, the top line, the revenue side of the business, the shape of the business, like where the opportunity for growth is less than the downstream, the product.
Yeah. The truth is, as you guys know, like AI is fine for research and maybe a little bit of fact-checking. It's not really making that big of a difference for your average reporter. Yeah. Where you really see the pickup is behind the scenes. It's all the things, the product of journalism is journalism. Everything else you want to try to automate or you want to speed up as much as you possibly can. And that's where we've seen massive, massive gains from using, uh, AI and just being able to automate things that were impossible to automate before. I'll give you a good example. Mhm. I have a young guy who works for me. We put out newsletters as is one of our main products. I've always wanted to be able to take that newsletter and turn it into a 6 to 8 card show on Instagram or on Facebook. And one kid in 36 hours built it and it looked beautiful. It worked perfectly. It was in the wild on Instagram in 6 days. And now we're able to spread it to different platforms. Well, that wasn't possible. That's new distribution, potentially new revenue, and it doesn't at all interrupt the, the sanctity, the quality of the content. In fact, it expands the potential audience for that. And that's where we see a lot, a lot of upside. We're doing a lot in local news. So, we're able to take all that heavy cost behind the scenes and put it into journalism as opposed to all the building blocks when we're not necessarily, we're not an infrastructure company and we're not really fundamentally a technology company until recently. That makes sense.
Have you, have you thought much at all about maybe two, one to two to three years in the future where you could have agents that could function as effectively as a CEO? Because I think about a lot of the job of a CEO is to like have the sort of global context on the business, know all, know hopefully everything there is to know about the business that is sort of like, you know, um, both public, public and private, right? And then people are coming to you with different opportunities and problems. And your job is to be a router, but also help solve problems, help get people working on the right things. And it doesn't feel like we're that far away from like going to your favorite, um, agent and saying like slash goal, like here are KPIs for the next quarter and start to like, it, it almost feels like easier to automate the CEO than it does to, uh, automate like a lot of these sort of like specific functions like web design where the web designer can get like 90% of the way there but can't get 100% of the way there with the model. But if you're just sort of like routing, routing information and, and making sure the right people have the right context and sort of moving the ball forward, I do feel like the CEO, we're not that far away from like a CEO agent and it might be, might be closer than, uh, than some of these other roles than a journalist agent.
Maybe that's a good way to lead the company is like I'm going first.
Yeah, maybe. Uh, but I, I think that a lot of positions are harder to automate fully than people think, right? Like almost every example you give, like a CEO, your job is ultimately to hire really good people, have a really good strategy, make really good decisions, and keep people aligned and, and feeling good about working for you, making a big difference. I don't see how that changes. I see everything you just said is new tools for me. And in fact, it's not the future. It's today. Like I already use all of those to help with alignment. I already use those to be able to prototype new potential products on my own that I don't have to distract people with that once I feel good about it, I can then inject into the more formal system. I don't think that that goes away just like I don't think management goes away. Do I think that you'll be able to start a company from scratch now if, if not now, relatively soon and not have to have a lot of those heavy costs around finance, operations, marketing, uh, communications, and even some of the things that a CEO does? Absolutely. That's doable today. But I just think that means that more companies will be created. Companies that exist will find new ways to use their people and maybe you don't have 50 designers. You just have the six designers you have today, but they can do 10 times as much work. And that's certainly been for us. And we use, we were early to AI. We've been using it aggressively for a couple years. That's been our experience. We're not getting rid of people. We're actually finding new use cases that didn't exist before. And that's what you hope happens. And that, by the way, that's the lesson of technology throughout history. You know, it's often very disruptive and it unfolds over time. This one is quicker on every different dimension, but I feel like that's doable. And maybe it's just rationale 'cause I want to keep my job. I don't want to be AI'd out. But I'm...
Pretty confident that like if I use this technology smartly, stay ahead of the curve, I'm going to have a much bigger company, a much better job because the tedious crap that I don't want to do, increasingly I'm able to outsource it to a machine instead of a disgruntled person who doesn't want to do that crap in the beginning.
Yeah. Yeah. Makes a lot of sense. Well, thank you so much.
That's an interesting thing. It's like you could automate 90% of what you do and yet the 10% that that still is in your wheelhouse actually still deserves like 100% of your time, right? So yeah, and it's what drives the value.
Well, have a great rest of your day and we'll talk to you on the launch and great.
Have a great rest of your day. Goodbye.
Let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Our next guest is the president and CEO of Malibu Boats. We have Steve Metto with us in the waiting room. Let's bring him in to the TBPN Ultradome. Steve, how are you doing? Welcome to the show.
Doing great. Good afternoon, guys.
Great to have you. Thank you so much.
It's a nice pallet cleanser for us. We've been talking about a lot of AI.
Very interesting business, but yes, we're excited to talk about your business.
I would love to just kick it off with a little bit of introduction for the audience on the company, the shape of the company, the important business lines, and kind of set the table for us on even just what the day-to-day looks like for you.
Sure. Malibu Boats, Inc. is a collection of nine brands. So we have Malibu and Axis in the towboat category. We have Cobalt in the runabout category. Then we have Pursuit, Sax, which is our new acquisition we just acquired in March in Finland and Poland. We have the MBG brands, which is Cobia, Pathfinder, Hughes and Maverick. So, nine different boat companies with all different ability to get to the water and really have fun with whatever you're doing. If it's technical fish to runabout surf to surfing to exploring venture dayboats, we offer all of them.
And what is the scale of the business? How many employees you like? How big is the footprint of the company at this point?
Yeah, we have manufacturing in the US predominantly in Tennessee, Kansas, and Florida. We have about 3,000 people in the company. You know, a little bit under a billion dollars in revenue. And now, like I said, we have manufacturing in Elk, Poland, and Larsmo, Finland. Yeah.
So, as we expand our reach overseas. And how you when you're thinking about mergers and acquisitions, are you primarily focused on portfolio expansion serving different pieces of the market integration and efficiencies that can be gained across the portfolio? Both what sticks out to you when you're adding a new brand to the portfolio?
Yeah, our overall strategy we do look at boat building. How do we continue that? You know, we've been boat building in some of our brands for over 60 years. And so we look at what else can we add to that? So we look at new boats, what else, you know, what other brands can we get? We look at parts and accessories. We look at technology and then services. So we are highly vertically integrated. We do our own trailers, engines, flooring, towers, wiring harnesses. So we look for those opportunities that can make us more efficient and offer a better product for our consumers. Yeah.
What is driving the market overall right now? Obviously, interest rates are high, energy prices are increasing. Does that move the market in the short term? Are there other sort of secular factors that you track? What either keeps you up at night or gives you cause for optimism in the long term?
Well, it's a split world. Like you've heard the saying of the K economy. Yeah. We are seeing that in spades. So when you think about a payment buyer, somebody who's going to take a payment out on a boat, you know, that family is under stress, you know, that we have we've seen that buyer go to the sidelines now and they're kind of waiting out for things to get better.
What we have seen though is the consumers that are still in the market want bigger, more feature-rich boats. So we're starting to see average sales price go up.
People are buying bigger boats. You know, like I said, more tech on their boats and they're enjoying the trade up kind of effect. So, we're seeing two customers split and we're, you know, we're trying to find new ways to help that payment buyer out to get into the market.
Sure. What features drive the market most for that higher-end buyer these days?
The higher end buyer length and beam width so there's more comfort out in the bigger water. Then you start getting into technology. So, it's easier to captain the boat. So it's more fun for the family. It's easier to drive the boat safely and docking and so forth. So the technology goes and also into experiences. You're seeing some of the B-roll running right now is, you know, we have tech on our boat where you can switch surf to surf. You know, have a new person surf by a push of a button. The boat reconfigures itself for that person and then the next person jumps in. You just hit a button and then it's like next person's up. The boat, you know, changes itself and the next person surfs, you know, the way they want to surf. So, you know, that's kind of technology leads to more fun, more safety.
What is your view on the electrification of boats? We obviously saw a massive success with Tesla and automotive. The boating community has been slower to adopt electric boats. We've talked to some folks who have been working on it. Do you have a view on what the future of propulsion systems looks like on the water?
I think propulsion systems are going to evolve, right? They always do. Yeah. And I think electric and, you know, I've had some experience in electric vehicles and so forth. There is an early adopter that gets them, but before you get to kind of the first the mainstream sales, you got to solve some problems, right? So, wait, you know, electricity that's, you know, in the charge. So, think about if I'm going out for the day on a lake and I know I'm going to be in a, you know, in a relatively, you know, close area where I can get back to shore and a dock, you know, sounds like electric may have a fit.
If I'm going out in the salt water, I'm out into, you know, the ocean or so forth, you know, a little bit more work needs to be done in electric to be able to get the confidence up that I can go and then come back in the same day, right?
Yeah. What are the different like autonomy tiers like? And is there a section of the market that cares about fully autonomous boating? Like do they want to be able to just, you know, press a point a hit a point on the map and get there and sit back and how much how solvable is that relative to automotive which obviously has so many more variables and challenges in some ways?
Yeah. And some of the technology is there as you just explained it is we do have waypoints, stay points and so forth technology already on boats. So you can put in coordinates, hit a button and the boat can captain itself to that waypoint and you know kind of an auto drive situation. But if it's fully autonomous, you know, we're a little bit further out on that where it has the total package where you can just sit back and let it drive itself. You know, from docked, you know, take your tour and then come back to the dock. You know, there's we have some technology that does that, but to do that with confidence, we're still a lot of the marine companies are still working on that.
That makes sense. We've had a bunch of companies on the show that are much early, you know, super early stage companies, Seed and Series A that are focused on defense and military applications of a lot of the same technologies that you work with. Would that ever be a focus for Malibu or are you guys pretty much committed to consumer and recreational?
No. As you think about opportunities in building, you know, drone boats, you know, and we're great at building boats. So, there's opportunities for us to support other vendors in that endeavor. Those are opportunities that we're always, you know, looking towards and working through currently to see what, you know, we can do as far as doing our part in the defense opportunities that are out there on the unmanned surface vehicles, you know, for Marine.
I have a couple more questions. In terms of the buyer obviously you make the boats in America predominantly obviously of international operations now through the acquisition but how much of buying is concentrated in the United States. How global is the distribution dealership network and actual sales?
Yeah. So when you look at our company prior to the acquisition we did about less than 5% of our revenue internationally. So we are predominantly a North American company and we source, you know, the most of our products or our supply chain is US-based manufacturer in the US. So, you know, that's been really helpful for us as we've, you know, took our first international acquisition. Now it opens up a whole new opportunity in geography as well as segments and we're, you know, in the midst of that integration and take and leveraging those opportunities to, you know, expand our dealer network across the world for our current boats that we have the Malibu Pursuit Cobalt boats as well as bringing our Sax door manufacturing to the states. So we're in the midst of that integration right now.
Got it. What does that mean for hiring? How difficult is it to hire for all the different roles? I mean it seems like with the level of vertical integration you have, you need people with specialties and wire harnessing, electricians, all sorts of different professional skills and roles. What does the hiring pipeline look like for you? And is it particularly weak right now? Is it particularly strong right now? What is hiring looking like?
Yeah, hiring is kind of down middle of the road. So to your point, we can get labor, we have good labor sheds around our manufacturing facilities, but as you start to think about building boats, it is a craftsmanship type of thing. So when you think about gel coat, right, and you know all the different plastics that go into the boat, woodworking and we make our own furniture inside of our boat. We make our own cabinetry inside of our boats. So we are looking for skilled labor all the time. So it's incumbent upon us to train. We have good training programs to do that. We have where we're helping the industry and the industry helps us through our different industry associations to get those skilled workers either into what we do or to actually train them up to get to those tougher jobs that we have, the more skilled labor that we have in cabinetry and gel coat and lamination and so forth.
What does the buyer journey typically look like these days? Are people do they start with a Google search? Is there online funnels or are there other points in the customer journey that are particularly critical in this industry?
Think about, yeah, the journey is about a 200 day to 250-day purchase journey on average because there's a lot of research that goes on. So it starts out on digital, but also don't underestimate what they see on the lake, on the river, on the ocean, and they start looking at other boats. They start taking it in and forming an opinion. Then it's a digital search, then it gets to the dealer. Then there's sea trials, right? And that kind of go through. Boat shows play a big part in that research as well. Okay. You know, we're just starting the boat show season here. This upcoming weekend, we'll be in Newport, Rhode Island. We're just in Lang City. You know, around Halloween, we'll have the one of the bigger shows, the Fort Lauderdale boat show. A lot of people come to those shows to start their investigation or to keep building on confidence around what boat are they targeting, where do they what do they want to buy? And so there's a lot of research that goes into it, but it all starts usually digitally and then what do they see their friends have or what's on their waterways that kind of starts to drive an opinion and forming and then of course you get social media that drives a lot of as well.
I'll wait for John to get one and then I'll get a bigger one.
I'm sure that happens a lot.
What's going on? So you guys don't have like a sort of racing focused brand. I imagine that's a much smaller market than some of these other markets. I just have a sort of random question. You're the first recreational boating expert we've had on the show ever, so you're the guy to ask. But every time I see a video of a cigarette boat, it ends up, you know, flipping around like this and going on some basically ends up flying. I think that's because those videos just tend to go really viral. I'm sure they normally can stay on the water. How dangerous is that? How popular is it? Is it less popular than it was historically or is it rising? I'm just very curious.
You know, I'll have to first put a disclaimer. I don't race and so forth. So, I think there's still the same popularity around racing. It's all racing where I came from my previous career in motorcycle racing and off-road racing. It's a small niche. Like any type of racing, you get over your ski tips, you know, you're going a little too fast, you get the air underneath, right? Starts to flip out. So, you want to make sure you're safe. It's a small part of the industry. You're right. We don't have racing in our portfolio. We have fishing. So, when you think about fishing, bay fishing, ocean, big ocean fishing, lakes, and so on. You know, there is as much competition in fishing as there is just in regular boat racing. And we participate in that. Yeah.
And then we actually from our Malibu we have still water skiing competitions. We're the official sponsor of WSIA. So we do that. So there's other forms of competition that we play in.
What's the biggest fish you've ever caught?
Me? No, I'm sorry. I'm not I'm still in the little guppy stuff. I haven't had anybody, you know, any big fish.
