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>> You're watching TBPN. Today is Tuesday, June 2nd, 2026. We are live from the TBPN Ultra Dome, the temple of technology, >> the fortress of finance, >> the capital of capital. Let me tell you about Ramp, baby. Time is money. Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more. All in one place.
>> It feels so good to be back. Uh, you know who else is back? Google with a huge fund raise, an equity fund raise. Unsurprising to a lot of people. They haven't raised equity in years and years and years, but they raised a cheeky 80 billion. The Wall Street Journal has the story.
>> Alphabet's mega fundraising show. Let's be honest, John. The real story >> is that you got a haircut.
>> I did. I didn't just get a haircut. I got them all cut. I got them all cut. Hey, we got the team there. There we go. That's a new... that's a new angle. I like that.
Uh well, Alphabet. Uh in AI, money talks, says the Wall Street Journal. The ability to tap stock market capital is important again after a quarter century of being all but irrelevant. So, let's run through it. 80 billion stock-based fundraising should be taken as a rebuke to those salivating over the forthcoming IPOs of SpaceX, OpenAI, Anthropic. Uh the search giant is showing its competitive advantage in an area that increasingly matters for artificial intelligence: access to money. Ben Thompson has a great breakdown too of how capital is so important in the age of AI and the war for AI.
Uh, in AI money talks, the biggest companies are paying out hundreds of millions of dollars to lure top researchers and tens of billions to build data centers while financing losses as they build their AI businesses. The money being funneled into AI is probably already making it harder for non-AI startups to raise capital, with 61% of all venture capital last year going to AI. It's really like... I was... I was talking to somebody um...
>> that... >> who was trying to... >> feels low... >> like based on... based on... but but there's a lot of... there was a lot of heart attack.
>> Well, everything sort of gets wrapped into AI. I was talking to someone about... >> that's why it feels low. >> How to have a conversation about AI and it was like you can talk about supply chain, you can talk about data centers and water and energy and uh and like being an eyesore, and then you can also talk about enterprise sales and SaaS, and you can talk about consumer, and it just touches absolutely everything. And so it's... it's almost... it feels like if you're trying to have the AI conversation...
>> um rude... rude about the Jared Isaacman years. We love Jared Isaacman. Uh, >> I don't think that's weird. >> Secret. I don't know. >> Our great space leader Jared. >> Yeah. >> He's incredibly handsome.
>> People like saying that about getting a haircut. I got my ears lowered. That's another dad joke. Got my ears lowered. Uh, anyway, uh, yesterday Alphabet announced a massive $80 billion equity raise, says Brandon Grow in the TBPN newsletter. You can go sign up at tbpn.com. Uh, the raise will be broken up into a few milestones over the course of this year. Berkshire Hathaway, Greg Abel at the helm, Warren Buffett obviously still at the table. Uh,
>> but a lot of people... a lot of people were... there was a viral post yesterday. Somebody was saying >> uh uh Buffett retires and they immediately invest in Google at all-time highs. >> Yeah. >> What other company did they invest in at all-time highs? >> Was that Apple? >> Apple. >> Apple. >> Apple. And look what they did. >> Pretty fantastic. Yeah.
Uh I mean for a long time, for what, 30, 40 years, uh Warren Buffett was known as like not a tech investor, couldn't wrap his mind around it, valuations always too high, business too uh too frothy or too high growth like...
>> well I think he knew vibe coding was coming >> for sure
>> and and he thought how are you... how can I value a software company when the cost of producing software is obviously going to zero. He was saying that back in 2010.
>> Yeah. He wanted to get in on Gen AI a decade early. Yeah.
>> No, obviously like the business was printing. It fit the Warren Buffett mold. I was actually uh doing this uh this deep dive on like where would Warren Buffett find value in the AI supply chain. I was trying to dig into, you know, if you apply that framework because there's a lot of froth, there's a lot of excitement, there's a lot of high growth opportunities. But >> where would Berkshire trade if Warren came out of retirement and just said, >> "I'm coming out of retirement to invest in AI bottlenecks." Not only does Berkshire re-rate, I think everything goes way higher.
>> I think so. I think so. Uh, let's see. I want to... I want to see because I... I... I did look at this and I pulled uh... >> John, they want you to crack another Diet Coke.
>> Another Diet Coke. Here you go. Boom. Satisfying. >> Another one. >> Uh the uh when I did this analysis, the... the name that popped up was...
>> Buffett saw Gstack and knew that the AI revolution was real. It is god mode after all. It is god mode >> in the... in the memo. >> Well, >> it's like god mode.
>> If you are trying to get in on the action, head over to public.com. Investing for those that take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service.
Um, so, uh, my... my previous analysis identified Qualcomm has enough AI optionality for the AI investors, but enough business model durability for Buffett. An evaluation that does not require heroic assumptions compared with many AI semiconductor names. Uh most admired but disputed uh TSMC. Buffett actually bought this company but then he sold because he was worried about geopolitical risk. Um and there were some other options but he wound up going with Google and we will break it down.
So uh Berkshire is buying 10 billion worth of shares at a roughly 6% discount from Monday's closing price. Another $30 billion will consist of underwritten public offerings. And the last 40 billion will be staggered common stock offerings beginning in Q3 2026. And overall, the dilution is very low. All the shares Alphabet will sell are brand new, meaning the plan is slightly dilutive for existing shareholders, but at their 4 trillion market cap, where are they right now? They're way, way up. Uh 80 billion just isn't that much dilution for the shareholders, fortunately.
Um a lot of opinions on the timeline about this deal this morning. Uh, I've seen a number of people, or Brandon Carell has seen a number of people theorizing that Alphabet is sucking up liquidity AI demand from investors before they'd be able to buy an Anthropic or OpenAI IPO. Richard Richard Jark gave a few less conspiratorial explanations. One,
>> yeah, a lot of people were saying that about SpaceX. Yeah.
>> But the other... the... the... the more simple answer is you should probably raise capital when it's cheap.
>> Yeah. And there's a lot of demand. There's a lot of capital out there and so uh there's a lot of demand for basically all of these names uh when there's a new trend. Uh and we've seen liquidity pull out of other sectors of the market and so it has to go somewhere. Certainly makes sense that it would go into the latest and greatest technology.
So, uh Alphabet seeing demand for Gemini go up and so it's going to invest more in compute and scale. Ben Thompson had per usual a solid piece on the race this morning. He wrote, quote, the first question is why did Google issue equity instead of debt. So there's some rumors that debt might be coming uh and the equity is sort of a precursor to that, but Ben Thompson writes, debt is all things being equal the preferred instrument for investment. The proceeds of the latter pay off better than the former and existing equity holders reap all of the benefits. Equity on the other hand removes the risk of debt but at the cost of giving up a future share of profits.
Uh that leads to why uh what may be the... AAM's Razer... AAM's 1D Razer, 2D Razer. No, a Razer is three-dimensional, right? So it's a 3D Razer, like 4D chess, 3D chess, 4D chess. Anyway, Google is going to start issuing a lot more debt as well. Uh, which is to say that everyone continues to underestimate the amount of demand there is for compute. Of course, that's not far off from a more bearish interpretation: Google is uncertain about the return on investment of all of that capex and would prefer to share the risk along with the upside. If there isn't a substantial debt issuance down the road, then this might be the right answer.
Um, yeah, I mean, compute is remarkably expensive. We're looking at, you know, even... even within the... the COGS or the... or the cost of inference for the labs, we're seeing, you know, dollars per task. It's a lot of money, a lot of dollars flowing into these data centers. But when you actually run the numbers on the tasks that they are completing, uh compare that to other sources to get something done, um you're seeing positive ROI. So, it's all just a productivity uplift, which is uh good to... uh good to see.
Uh the... the Wall Street Journal continues and says, "Bond investors think the hundreds of billions of dollars of debt being raised by big tech is pushing up the yield and other borrowers have to pay, and it's even affecting government bond yields. Uh the hyperscalers of Alphabet, Microsoft, Amazon, and Meta have become major bond issuers as they ramp up spending, with Alphabet alone raising 85 billion in a series of record-breaking issues around the world. In the past year, they might raise more in debt. But the stock market is the obvious place to raise capital to spend on the exciting bits of AI where the returns are unknown, technology is rapidly developing, and business models are in flux. Unlike debt, companies don't have to repay their shareholders. And if it takes longer to make money from AI or never makes money, the company can simply wait it out if it was financed by stock, though investors would be very unhappy."
Uh, Alphabet is one of a tiny number of companies capable of raising so much cash without tanking its stock. What did the stock do, Jordi?
>> It's down a couple points today, but I don't...
>> Okay, not too bad necessarily. Thanks to its near monopoly in online search and credibility with Wall Street in new ventures. That's a really good point.
Uh for a long time, tech has been uh sort of cold on Google's side projects. Uh but they're starting to bear so... so much fruit. You look at the progress with Waymo and it's very clear that just one win in Waymo will be a power law that will wash out all of the side chat apps that never went anywhere or little... little software projects and April Fool's jokes that they launched. And some of them will become really big businesses as well. They have other stuff. Calico,
>> they have the mosquitoes right now. Mosquitoes are crazy. That was a weird... weird headline. I didn't know.
>> I'm excited about releasing, you know, billions of genetically modified mosquitoes into the environment to try to kill all the mosquitoes.
>> Wait, they're mosquitoes that kill mosquitoes? They do. Okay.
>> They're like infertile or something basically. Something that uh I'm excited because there's like almost certainly could never possibly be any unexpected downside to disrupting the circle of life.
>> Who knows? Who knows? People have been studying this for like 20 years. So, I'm... I'm optimistic.
>> It would be one of those things like... Yeah, one of those things would be amazing if we can just nuke all the mosquitoes off the map.
>> But I got a feeling they're doing something important. >> Yeah. there. >> Let's be... Let's actually... >> Let's actually try to get to the bottom of this.
>> Wait, is the... Should we be selling the bug repellent industry short right now? Should we be going turbo short uh all mosquito repellent companies? They're probably going to go out of business if they get rid of all the mosquitoes, right? This is uh finance 101 right here. Anyway, I can keep reading.
>> Don't... don't give our little retail troll over there any ideas.
>> He's going to go short. Uh while 80 billion is huge, it amounts to less than 2% of the market value of a company trading at $4.5 trillion. The stock was down just 2.6% in pre-market trading. There seems to be an unlimited supply of willing buyers to fund AI. If it turns out there is a limit, Alphabet can only benefit by going first. From a societal standpoint, says the Wall Street Journal, the purpose of the stock market is to funnel money from millions of savers into giant projects, just as in the 19th century railroads.
Uh for the past 25 years, that role has been less important as private capital funds grew large enough to finance companies for much longer before they needed to go public. AI's vast consumption of cash is beyond even the capability of private markets. However, sure there are other reasons to list, such as allowing employees to cash out their stock options. 30 billion, you mentioned this earlier today, 30 billion of Alphabet's stock issuance is earmarked for paying tax on employee stock awards.
Um, but the ability to tap stock market capital is important again after a quarter century of being all but irrelevant. As we move into a new era of capital-heavy industries, the stock market stops being merely a way for private investors to exit, but an attractive source of capital. The bear in me worries that all this equity raising is also about taking advantage of record stock prices and could be a sign that the top is near, says the Wall Street Journal. They're almost calling the top, but they near...
mosquitoes do have some environmental value, >> though most of it is not unique to mosquitoes, which is why people debate how much the world would miss them. They're a food source >> for spiders.
>> Uh mosquito larvae are eaten by fish, frogs, dragonflies, beetles, birds, bats, and other insects.
>> And uh adult mosquitoes are eaten by birds, bats. So, so we already have friends in the animal kingdom >> that are just eating these... eating them alive. >> Yeah. >> So, that's good.
>> So, you'd be pollination... birds and frogs around.
>> Um, no. But the argument is that a lot of other animals >> like contribute the same sort of general environmental value. >> Sure. >> So, if you took out some of these disease spreaders,
>> pro mosquito. He's in the pocket of big mosquito over here. He's like, "Oh, I love... Oh, I have a pet mosquito at home. I love mosquitoes." Not a dog person. I'm a mosquito guy. I... I like mosquitoes. This is you. You're a mosquito, dude.
>> Yeah. Wow. That's weird. I've never met you. You... >> ever get an eye like swollen, shot by a mosquito?
>> No. Never. >> That was me.
>> I've gotten a few like bites on my legs. You kind of X them out or try not to scratch them. They say don't scratch them because that spreads the poison a little bit. But it's like a minor... minor nuisance. But I think that they spread a lot of disease and that's the real reason why people are... are so aggressive about illness.
>> Somebody should do a street interview. Yeah. >> Where they go around asking people >> Yeah. >> Would you want to... if you had the chance to eliminate all >> Yeah. mosquitoes in the world with no downsides to the environment? >> Yeah. >> Or $100,000 in dinner with Jay-Z? >> Yeah. >> What would you choose? >> Yeah. We... >> There would be some interesting answers.
Are they releasing these in America, in California? >> I think so. >> That's crazy. A private company could just release animals.
Like, could... could Microsoft just release like a million bears or something? Like... like what... what's the limit of this? Can you just release like, hey yeah, like we're... we're releasing 25,000...
>> That was an early idea on this show, right? It was like bear defense companies. >> Yeah. Domesticated bears. Just, you know, wild dogs. More coyotes. More deer maybe. What? Pick your poison. Whatever animal you want, just get it out there.
>> I think if we put enough Monster Energy... >> I heard Truth Social is going to release like a million bald eagles. That's their goal. >> That's the next thing. >> Oh, that's why the company's so unprofitable. >> Yeah. They've been buying bald eagles and breeding them continuously.
>> No, I think... I think one of the reasons mosquitoes bite humans is there's not enough cans of like cracked open Monster Energy. Yeah.
>> So, if I think if you put a bunch of Monsters out when you camped, you'd probably be safe. Mosquitoes would obviously much rather have Monster Energy than blood, right?
>> And does that sterilize them? I think that might... I think that might do the trick.
>> It might do the opposite actually. >> Yeah, >> it might make them even more powerful.
>> Here's an idea. Release 100,000 bulls charging through Manhattan as a sponsorship opportunity, as a marketing stunt for the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. They... they have the golden bull. There's the bull. Why not release a ton of... a ton of real-life bulls? Who knows? Maybe it has a positive... positive externality on the... on the life cycle of Manhattan. You know, they... they... they wind up finding a home in Central Park and the bulls run through Manhattan.
>> Do you... do you think Meta follows suit and does an equity raise like this?
>> Maybe. I can imagine Zuck not wanting to do this right now given where they're trading.
>> The stock's down. I mean, it's not... it's not that down, but it isn't like popping like the rest of the AI hyperscalers.
>> Yeah, I was comparing Meta to Tesla today according to companiesmarketcap.com, which... which doesn't seem to be... companiesmarketcap.com has one job, which is to track the market caps >> of companies, >> and I find the data to be somewhat inconsistent.
>> Meta's like sort of near all-time highs. It's not that far off. It's certainly... it's certainly up from the trough of when the... when the stock was 100 bucks in 2022.
>> Anyways, so yeah, I was looking at the two. Meta had 200 billion of 2025 uh revenue, 164 billion of gross profit, 82% gross margins, growing 22% a year. Tesla >> had 94 billion, 17 billion of gross profit. >> Uh uh actually shrunk 3% uh year-over-year and uh Tesla is getting close to being worth the same amount of... >> 1.3 trillion. 1.3 versus...
>> I mean if you look at the Mag 7, if you're just doing the... the... the biggest seven tech companies, it's... it's like completely changed hands in terms of like Samsung, Micron, there's so many uh... there's so many companies deeper in the supply chain that are uh absolutely uh mooning on the AI boom. Um so maybe... maybe we need a new term. We had FANG for a while. Now we have Mag 7. It feels like we're in the dawn of a new one. Uh we'll see. We'll see.
Um anyway, anyway, where I was going with that, I... I can see Zuck feeling like I'm not being properly... properly valued right now.
>> Should buy the stock back if anything.
>> Yeah, if anything, although they should buy... they don't have a lot of... >> because they're spending a lot on capex. Yeah.
Uh anyway, Matt D has some takes on Google on the raise. He says, "First, I don't think this has anything to do with their view of equity value. So, they don't necessarily think they're overvalued. Larry and Sergey want to spend. Sundar and the CFO said our debt rating though, and so we are here. They don't want to raise more debt. Of the 80 billion, 40 billion is for infrastructure, but I suspect that the equity check for a Meta-like SPV structure will be levered 5 to 6x. In other words, the spending implications are much greater than the headline."
Can't believe it's only Monday. So they're going to take 40 billion, lever that up across their infrastructure efforts and put something closer to 200 billion to work over the next year, and that pays for their capex bill for probably just next year because they'll probably be around there in like the AWS tier, especially on the back of that Google Cloud growth is growing faster than AWS, growing faster than Azure. So, lots of reasons to spend, spend, spend. Um,
>> John, they're saying we need a L'Oreal ad read from John. Okay, >> that new hair. >> Shout out Jasper.
>> I... I like that company. They're a great... great team. Uh anyway, uh Google raising 80 billion in equity, more compute, more AI spend, full send, downrange. Jack Raines says the gigabrain move by Google is sucking up some of the AI demand via equity issuance instead of debt before Anthropic and OpenAI go public. We'll see what happens. We'll see how much demand is out there. SpaceX is going out in just a couple weeks. So, we'll see how that goes. But, uh there's a lot of... there's a lot of money, John.
>> Couple days. >> Next week. >> Next week.
Um, I mean there's, yeah, there's a lot of... there's a lot of liquidity across all of the retirement funds that are funneling into these things. There's a whole bunch of different things. Uh, Sergey... uh, Alex Shenkman has the chart of Google Alphabet equity raises. This can't possibly include... Oh, their... their venture round.
>> So, SpaceX going out on a Friday. >> That is going to be insane. >> After the market closes or something? >> No, I mean, obviously >> open. Yeah. >> uh but then immediately goes into 48 hours.
>> Yeah, th... this chart... this chart can't possibly include the venture rounds that happened pre-IPO, right? But I guess they might be so small that they don't even show up on here in 1998 >> uh because it's less than 1 billion. I mean, Google famously did not raise a lot of money. It was very profitable when they went out uh to go public.
Um, and Toptick Crypto has pivoted to the memory trade and says the memory trade can't keep going because the hyperscalers can't spend more than 100% of cash flow. And while Google would like a word because they can spend more than 100% cash flow because they can raise equity and they can raise debt and they can get all sorts of money from all over the place.
So, uh, what else is Berkshire doing these days? Berkshire is investing 10 billion into Google in a private placement as part of the broader $80 billion equity capital raise. Uh Warren Buffett is here watching Greg Abel take 10 billion of money that he painstakingly made over his entire investment lifetime and put it into Google at all-time highs. I don't think this is an accurate reaction to Warren Buffett because this play worked with Apple and Google's in a fantastic position to continue doing this.
Uh uh Ben Thompson broke this whole de... this whole thing down comparing what Warren Buffett had done with See's Candy to buy a railroad, which is a fascinating uh example. So um they... they bought See's... Berkshire Hathaway bought See's Candy for 25 million when sales were 30 million. So less than a 1x revenue multiple. Pre-tax earnings were less than 5 million. So they paid roughly 5x uh pre-tax earnings. So EBITDA, uh the capital then required to conduct the business was 8 million locked away in See's Candy. Uh then they had some seasonal debt but generally the company was earning 60% pre-tax on invested capital, 5 million out every year, 8 million locked up.
So last year, uh, this is from 2007, the shareholder letter. Last year, See's sales in 2007 or 2006 were $383 million. Pre-tax profits were $82 million. And the capital to run the business, it was only $40 million. So they'd grown the amount of capital by 4x, 5x, but they'd grown the actual cash flow from that business significantly from 5 million to 82 million. And so, uh, Warren Buffett says, "This means we have had to reinvest only 32 million since 1972." 1972 to 2007, he's reinvesting 32 million. And every year he gets a check for $82 million. That's a fantastic cash-flowing business.
What did he do with that business, which generated pre-tax earnings of 1.35 billion or something like that, uh, which was sent to Berkshire? Well, he bought a railroad. So um uh BNSF railways. The railways require a ton of capital to operate. BNSF consumed 3.8 billion last year. They also make a lot of money. The net income was 5.5 billion on revenue of 23.4 billion, but it requires a lot of business, a lot of revenue, a lot of uh cash tied up in the business to run that.
And so to put that in perspective, the total amount of money that Berkshire has made from See's Candy is probably less than three billion, uh so less than BNSF made last year. Um so which is a better business? And he goes on to talk about cloud and Google and how they have the search engine that throws off cash and they can use that to build the railroad of the future, which is all the data centers and AI infrastructure. And so uh a lot to like and it's not as much of like, oh, this is wildly outside of the wheelhouse. Berkshire's never seen a business like this. Uh that's not true. That's it. This isn't that out of characteristic. It is a wonderful business and it actually pattern matches to what Berkshire has done with Apple and also with the railroad and See's Candy before. So, uh, don't be that surprised.
But what is more surprising is this story. You want to take us through it? But first, let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches.
In the journal today, Berkshire is convinced the American dream of home... home ownership will stay alive. I realize, John, there's a bunch of soundboard effects that I would only hit when we were doing ads. That's true. So, I miss them.
>> Oh, it's so... >> ads back. >> I love it.
>> Uh, Berkshire is convinced the American dream of home... home ownership will stay alive under its new chief executive, Greg Abel. Berkshire >> raises its bet on a market recovery by adding another housing company to its portfolio. >> Fantastic. >> Uh Berkshire Hathaway $6.8 billion deal uh to acquire... What are you laughing at?
>> I'm just laughing at the fact that like... like, you know, they did two 10 billion deals and one was buying like an entire home builder and the other was buying like 0.01%... 0.01% of Google and uh just the scale of these different things. Like... like the... it's an extremely cool deal. We'll get into it. It's very interesting. But at the same time, it's like total peanuts compared to like the AI buildout.
>> Well, yeah. Potentially like a work harder or work smarter not harder moment. Like we'll see which one of these ends up generating a better return.
>> This seems extremely important. I'm extremely excited... like one data center or an entire homebuilder that is their entire business and probably very storied. We'll get into it.
>> Well, we don't know. He might be pivoting it into a data center. >> Maybe... >> that would be the ultimate. >> Maybe a couple 2x4s, rack 'em, you know, Meta using tents. Maybe the next uh data center looks like a house. A lot less controversial. You know, the NIMBY... if you just see a nice craftsman home next to you, you're like, "Yeah, whatever. It looks nice." You know, I don't... I don't have a problem with that. You know, oh, the chimney smoking. That's the diesel generator. It's a diesel center among us.
>> This might be the solution. Tyler, what you got? I... I was going to say um like these two deals are still small compared to like the actual cash that they're holding. Something I... I think uh most recently it was 397 billion. >> That's so much. >> So even then it's like, oh wow, you know, he's still... but you know, he's still cash Chad right now.
>> Oh hopefully inflation doesn't get him. We'll see. Anyway continue >> uh with an all-cash agreement Sunday for Taylor Morrison Home Corporation. The Omaha-based conglomerate is poised to become a top five US home builder, >> adding to its growing portfolio of housing-related companies.
Berkshire's home builder deal is a sign that a prominent investor thinks the housing slump will eventually pass and it wants to be positioned to take advantage of any market turn. More than 75% of young renters still think they someday will own a home. That is great. Uh glad that... um I... I would have thought it was less than that given... given like sentiment online. Uh and so it's great.
>> There's been a bunch of... there's been a bunch of weird studies where like when you zoom out, you look at Gen Z home ownership and it's actually pretty high, but that's driven by non-coastal cities because people move to San Francisco. Obviously, house prices are through the roof and a lot of people are like, "Yeah, I want to rent and go to some local house party. Like, I... I want to be in the mix." And then at some point people make the decision. So it's more about like family planning, but of course there's all sorts of, you know, affordability issues. But >> chat says, "White pill, never doom. >> Never doom."
>> Uh, this investment is grounded in a long-term belief in the strength of America's housing market and its underlying fundamentals, which we see as enduring over time.
>> Uh, Berkshire is raising its exposure to a housing market in its fourth year of dismal sales. High mortgage rates, job market uncertainty, and the rising cost of living have kept many prospective buyers on the sidelines. Builders have been forced to offer incentives such as paying part of buyers' mortgage costs just to unload their inventory. Builder confidence is low. Single-family home >> starts declined 9% in April, the steepest drop since August. A third of builders said they had cut their prices last month. Moreover, many Americans now think home ownership is beyond their budget. More people are renting for longer or putting their savings into the stock market rather than investing in a home.
>> But analysts think... analysts say the US housing shortage of more than four million homes means new homes need to be built. >> They expect more buyers will return to the market once mortgage rates, which recently hit a 9-month high, >> come down and trigger pent-up buyer demand.
>> Berkshire has agreed to pay a 24% premium to Taylor Morrison's closing stock price of 58... uh 58. >> That's an incredible bargain. Friday analysts see the price is a good deal for Berkshire because the actual value of the builder's home portfolio uh belies its lagging stock... stock price. "That is an incredible bargain," says Tony Avila, chief executive of Builder Advisor Group. Uh Taylor Morrison's stock shot up 22% Monday.
This is a quote by Warren Buffett. This is the first deal for Abel, Greg Abel, the new CEO of Berkshire Hathaway. And Warren Buffett said... gave a quote to the journal. "He has launched." Yeah, that's launched. I love it. On Monday. Uh then they talk about the... the Google deal.
Uh Taylor Morrison is a safer bet in a precarious home building market. The company tends to focus on the higher end of the market, which has performed better. A significant part of its business is built around buyers looking to upgrade to nicer homes rather than entry-level buyers who are struggling the most. In addition, the company is part of a smaller segment of builders that have leaned into so-called build-to-rent communities of single-family homes constructed for the sole purpose of renting.
Uh Congress recently... recently threatened build-to-rent developers with a proposal that would force them to sell their properties within seven years of building them. But House lawmakers removed that proposal in an attempt to rescue the burgeoning sector. The Taylor Morrison deal is the latest example of consolidation in the residential construction industry. Last month, AvalonBay Communities and Equity Residential agreed to merge in the largest multifamily uh combination on record. Years after sluggish profits, uh this puts pressure on others to find a dance partner, says Alan Ratner. Uh interesting. Well, we'll continue following up on that.
Well, uh, they own railroads and you should be on Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more, while Railway automatically takes care of scaling, monitoring, and security. Uh we have some time.
>> What do you think the odds that the admin does some type of mega project around >> home building?
>> Almost zero. >> Like I... I don't see... I don't see the government building homes. I think that the number one lever that any administration has over housing affordability is interest rates. Sure. And doing something >> program. >> Yeah. But... but specifically just the... like the Fed funds rate, like if you can do something to bring that.
>> Yeah. I just... I just mean we're at a time... we're at a time with like at least in modern history... history like relatively unprecedented government >> involvement. Yeah. >> You know, government taking a stake in Intel.
>> You think they might build the cube? You know the cube? >> What's a cube? >> There's a cube that if you built it in Central Park one mile by one mile by one mile it would fit a billion people inside. So, housing... housing crisis solved. No windows, but if you build the cube, no more housing issues.
>> Wait. Uh, not Buffett. But, um, who's the guy that built the... the... the... the... Nolan? >> No, the dorm at UCSB. >> Oh, yeah. Charlie Mun... >> Charlie. >> Charlie Munger. >> Yeah, Mun... >> He was building cubes. >> He was... he was early the cube.
>> Not a member of the government, not doing a mega project. I would be surprised if there's something that's first party. But Tyler has another take.
>> I was just gonna say the admin is not supposed to be able to like interfere with interest rates, right? >> Yeah. But >> that is independent. >> But there's a lot of things that you can do where >> interest rates were declining until we got into... >> Yeah. Like... like if you strengthen the economy, pull back from... from uh geopolitical risks and whatnot like... >> fiscal dominance. >> Yeah. This kind of... there's just... there will be things that open up the Fed to cutting rates potentially. Um, but yeah, I... I don't know. It's a very clearly it's not within the admin's uh abilities. What?
>> Well, let's head over to James Walker. >> Okay, what's James Walker up to? >> He's boarding this morning's flight with an emotional support trout.
>> Is this AI? Is this real? This is insane. >> Honestly, I don't think AI could nail this era of Instagram filter. >> Bringing a... Is the fish alive? This is crazy.
Bringing a fish on a plane is hilarious, but that does not feel very uh humane. It feels like a very uncomfortable situation for a fish. But I guess if you got to get somewhere, uh you got to go... you got to go in the tube.
>> Think about it though, John. >> Yeah. >> Think about the things this fish will have seen >> that many fish would never see in a lifetime. >> Yeah. >> So, is it... is it inhumane? >> Yeah. >> Or is it inhumane not to let the fish...
>> Yeah. If you got a trout, it's like, "I think the Earth is flat. I've never seen the curvature." You're like, "Well, you're going into a 747 and I'm showing you out the window. You look out the window, you'll see the curvature of the Earth potentially." Or maybe it's just the windows. Maybe the windows on the plane are curving it.
>> This was a good post from Key. He said, "This dude is effing Sherlock Holmes." Okay. >> Somebody says 100% this ad is sponsored by OpenAI from >> the OpenAI >> from the official OpenAI account. >> It's not even sponsored. >> It's actually posted by OpenAI. >> It's not even marketing. It's just communications.
>> This is a wild... This is a wild post. It's so funny. Uh, Terence Tao, AI creates more room to experiment, test unexpected paths, and discover what might otherwise stay out of touch. Terence Tao, goat mathematician from UCLA. Uh, very fun to see him talking about his process, where he's still seeing value, how he's using models. He talks about this a lot. A lot of times it just allows him to flesh out his work, build a chart that he wouldn't otherwise build. Very synergistic, fully in like the centaur... uh centaur... uh centaur era. Uh I don't know who got paid to say what, but that ad is sponsored by OpenAI. I think it's best to show real results. That's so interesting. This is so funny.
Anyway, uh what else is going on in the timeline? Joe Weisenthal has something. Price of whey is going bananas. It's a protein crisis. This is not good. >> So, so... >> what's going on?
>> Here's what's a little funny. >> Okay, break it down. >> We know why the price of whey is going bananas. We don't need Joe to tell us. It's because Joe is going bananas on his whey consumption. >> Oh, you think he is responsible? >> I think he's the problem. He's like, we're all trying to figure out who did this.
>> He has been looking bigger. >> Much bigger. >> His traps specifically, they've been eating his head. >> Yeah. >> Yeah. And he has those Death Star delts on his... on the cap... on the shoulders. It's really... it's really crazy. And the lats when he does the lat spread on Odd Lots, it's... it gets... it gets aggressive. Uh it's a little too much. So cool with the whey, Joe.
Uh but here we have some news. In earlier May... in early May, a supplier delivered bad news to baking and beverage company Hello Amino. It had run out of whey protein. Canada-based Hello Amino uses the ingredient in all of the 30 high-protein baking mixes it sells. Founder Ali Swift found another supplier, but it means importing whey protein isolate from the US at a price that's 50% higher and due to increase again soon.
The new whey protein delivered other complications that dried out the company's baking goods due to the manufacturer's different processing methods. That's true. A lot of different ingredients will change the... the output. Not all whey is created equal. "Our pancakes came out like sawdust," Swift said. The company plans to reformulate using a different combination of proteins. Protein has really leaked into everything. Um, I...
I have not found... I've been surprised whenever I see the trend pieces about like protein's packed with everything. Everything has protein in it because I feel like, I don't know, it hasn't snuck into that many of the things that I eat throughout the day. Like there isn't protein in my Diet Coke. I don't know what else I consume. But this whole trend of like protein-packed cereals and salads and lunches and dinners and protein-packed pastas and stuff, I never really kind of stuck with the normal stuff.
Yeah. The idea that, you know, if you eat two to three solid meals a day, you have some protein, that you also need to be snacking on protein in between is just insane. It's completely unnecessary.
I don't know. Protein shake gets it done. Well, let's check in with one of the nation's largest mortgage lenders.
Because they've launched an athleisure clothing line.
Guaranteed Rate has rolled out RateFit, a wellness-driven lifestyle brand. They were the seventh largest mortgage lender in the country last year. Colin is baffled.
I had to check if this was real. Is it?
And ratefitit.com. It is. You can get pretty much all the things that you would get over at Lululemon, Alo, or Vuori.
20% time project or something.
No, I bet you this was just... Shopify is just so good at sales.
They were doing a little outbound campaign and they're like, 'Sorry, we're a mortgage lender. We're not really set up.'
Maybe it's a rogue agent. Maybe someone just at Guaranteed Rate just said like...
Make my business make money. And it was just like, I'll set up a Shopify store and contact a distributor and a manufacturer. You're now in the clothing business. How long until that happens? I don't know. Any day now, I'm sure.
The sooner I get a Porsche, the better for my mental health. Good luck, Mason Hughes. Good luck on your Porsche pursuit. Maybe a very depreciated Taycan, cheaper than you think, right?
The fact Eleazar isn't looksmaxing is the ultimate condemnation of rationalism. People have asked about this before. He should get into looksmaxing. Why not? It's a good time. Well, I had another question come up from a friend of the show about why are companies filing IPOs confidentially? It's an interesting question and I sort of pulled, tugged on the thread. Liz Hoffman was talking about this a little bit. So Anthropic confidentially submitted a draft S-1 registration statement to the SEC June 1st. That was yesterday. Liz Hoffman said, reminder that the ability to confidentially file an IPO was a 2012 rule change meant to ease small companies, meaning less than a billion dollars of revenue, into the markets. And it was later expanded to what we're...
Meant to be like a smoke grenade.
A smoke grenade. Let you talk to investors before you get out. Do we change the camera? So she asked the question of like, what are we even doing here? And I was curious like, what are we doing here? Why do all these companies file confidentially and then the S-1 comes out? This is what SpaceX did. It's not like Anthropic's unique in this. This is very much standard practice at this point. But how did we get here? And why is this good? Do I like this? I don't know. Let's find out. So, first the basics. A confidential IPO filing doesn't mean that you IPO in secret. It means the company submits a draft S-1 to the SEC for private staff review by SEC employees. It's a smoke grenade. Yeah. Great analogy. Before releasing the prospectus on EDGAR, which then every hedge fund can download, anyone can download, it becomes public. So this lets companies run the SEC review process while keeping the sensitive financial details private. And there's a few reasons why you might want to do that. So any regulatory stumbling blocks can be dealt with in advance. And so the final filing is clean and ready to go. SpaceX did the same thing, filing a draft submission confidentially before the public S-1 dropped a week or two ago. So after the 2008 financial crisis, this is where this all starts. There's a lot of regulation that results from the fallout. Sarbanes-Oxley is the main one. And the financial markets slowly built back and started opening up as the economy rebuilt. So post-Dodd-Frank, post-Sarbanes-Oxley, you get a lot of regulation and then over the next few decades, certain pieces get relitigated, renegotiated, and different paths open up to slightly less regulatory burdensome pathways in the financial markets. And so before 2012, the S-1 became public early in the process, which was great for journalists who wanted to report on IPOs. It wasn't really that beneficial to very many other people. But it raised the stakes for companies because if anything was off, it could result in a botched IPO, which would be damaging for morale. You hear that your company filed publicly and immediately something comes up and you can't fix it. So then you have to pull back and it's seen as damaging, seen as weakness. No one wants to be running a company that publicly failed to IPO. And so in 2012 the JOBS Act passed and they created a new class of company with some relaxed filing requirements. These are called emerging growth companies. It's defined by the SEC. They're called EGCs. And EGCs were defined as any company with less than a billion in revenue. Later it was inflation adjusted to be 1.235 billion. But that doesn't really matter though because in 2017 staff at the SEC under Trump 1 expanded the confidential filing flow to include all issuers, not just EGCs. So anyone, no matter how much your revenue was, you could go through this process. And so the JOBS Act was driven by Republicans but broadly supported, and the 2017 change happened under Trump 1, but again it didn't face strong opposition. So private market investors like IPOs for liquidity. VCs love to come on the show and do a victory lap when they take a company public and it's great to return capital to LPs. And then on the other side, public market investors like access to more names. So it's sort of win-win. In 2017, this was a huge year for large growth stage companies. These decacorns, you had Uber, Airbnb, DoorDash, Palantir, they were all well past the billion dollar revenue threshold. But there was still a lot of uncertainty about how the market would value these companies because they had sort of new business models. There were some questions about different margin profiles, how the market would price these. There weren't direct comps to Uber and Airbnb already in the market. Are you going to just trade Airbnb like it's a hotel chain? Not really. It's asset light. So the market needs to digest that. And confidentially filing was beneficial and it was encouraging to these companies to say, 'Yeah, we'll go try the IPO thing because it's less burdensome.' So...
Stripe should file confidentially for IPO, but then never actually go.
I think that's a Collison brother nightmare. I think they wake up in cold sweats.
No, I know, but it would be kind of funny to like confidentially file, but then...
Let it just kind of sit there for another decade.
Troll IPO. So the confidential filing rules were expanded again in 2025 under Trump 2 SEC staff to include other financial offerings. So new issuance of stock, other classes of securities, these things can be reviewed before going out in the market. This allows companies to test the waters on follow-on financings, spin-offs, other capital markets transactions. You can go and test the waters. So there's no question that companies are staying private longer. Everyone knows this. The private markets are incredibly deep, driven both by mega fundraisers from the largest venture capital firms, crossover investors from like hedge funds coming into the market, and then also plenty of activity from the hyperscalers and strategics who can write a 10 billion dollar check into a private company, no problem. So the end result is that the public markets have been losing companies to private markets for years. Exchanges don't want this. Public markets investors don't want this. And so there's a huge demand to make going public less painful. Confidential filings don't fully obscure investor protections because all the traditional data needs to be released before any money changes hands, but it speeds up the time to market and increases coordination between private companies and their future shareholders in public markets. And so that's why companies are allowed to file confidentially. And I don't know, after reading that, I don't really have a problem with it. You let us know. What do you think? Should it be illegal? Should it be straight to jail if you file confidentially? I don't know. We can roll it back.
Couple more notes before our first guest. Joe Weisenthal is reporting that on the eve of the IPO, SpaceX employees are organizing. More than a thousand current and former SpaceX employees have banded together to negotiate with wealth management firms for better pricing and access to sophisticated tax-saving financial products ahead of the IPO.
Interesting. I imagine the wealth management firms are thrilled about this. They were joking, of course.
One more note. Friday IPOs.
I think there's going to be a lot of fanfare. If the images in the S-1 were anything to judge, I think the actual coverage will be a spectacle. We will see Starbase in full force. It will be a lot of great entertainment and a pretty wild day. Pretty wild day for financial history. Before we bring in our next guest, 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 without further ado, we can bring in Jack Doohan. He is the founder and CEO of Muse. Welcome to the show. How are you doing, Jack?
Doing well, thanks. How are you guys?
Thank you so much for taking the time to talk. Great to have you on. Great to speak. Why don't you kick us off with a little bit of an introduction on yourself?
Certainly. No, thanks for having me on, boys. Myself, a bit of a whirlwind last 12 months, sort of my whole life. Been driving towards being a Formula 1 driver. So, you know, in that realm, let's say. And I was always in the mindset of doing one thing properly or two things averagely, right? So I always wanted to build and wanted to do many things, but that was full focus. Ended up getting to Formula 1 the end of 2024 for the final round, Abu Dhabi, signed for three years, which was obviously a huge, huge thing for me and from a kid from Australia. And then yeah, six races into that season, sort of sidelined for some circumstances outside of my control, let's say. And it was a big moment for me of realizing not that you're set, right? You're never set in stone, nothing's ever guaranteed. But I definitely thought with security, with the three years and with how things work, that it was a little bit more stable. So it was a big reality check. I said, okay, for what I'm locking into for my life and what I'm carrying the next 10, 20 years is not going to be from something that's decided by these political circumstances. So then to be honest, I had an interest in AI since late 2020. I was teaching myself to code since 2019 on a low basis. Definitely not, I'm not engineering behind Muse at all. So, but just from understanding, and then ended up founding Muse sort of at the end of December, doing some small passive tech investments, setting up some SPVs and some opportunities. But yeah, it's crazy the distribution that has been gathered now since being actually in this paddock and around this world.
Yeah, I want to talk about tech and business. But I have two questions about racing. First, I'd love to know a little bit more about your early path. Did you go through the typical kart racing, Formula 3? Like walk me through the steps to actually get to F1. A little bit of the history there. And then I would love your view on the future of the sport, where things are now, what's changed, what you've observed as you've been probably not just competing in F1, but also a fan.
Yeah. No, certainly, you know, started from karting as you mentioned. Then in Australia, you have a ceiling, you know, like I guess like any not small country, we're a big country. We're 25 million population compared to the US. You know, very, very different. But you always have the goal of going to the top of what you're doing. And even for the karting, the main space was Europe, so that's where the world championships were, the European championships were. So as a kid I always wanted to be over here. Ended up moving over on my own when I was 13, just before I was 14 years old. Did a year of karting, was then picked up by Red Bull for...
On your own, that means like you said see you to your parents or what did that look like?
It was the first seven days was with my father and then I was on my own with like people that I was sort of connected into the European region. And then...
Still, that's wild. That's crazy.
It was weird. I think when I came over I was wearing shorts when I was in Europe and the guys who were mentoring me said I looked too Australian. I remember I walked in, I was a 13-year-old kid. I walked in the go-kart track and it was the first time I was in Europe and there was a Scottish guy who was mentoring me. And I walked in, I high-fived a couple kids and I sat down into my awning and he looks at me and he goes, 'What was that?' And I said, 'What do you mean?' And he's like, 'You're happy, you're high-fiving. What was that?' I said, 'Oh, they're just my friends.' He looks at me and he goes, 'The only friend you need is me. There's no other friend, you know, if you're gonna...
There's no friends out there.
And I just came from Australia where we're racing and then we come off on our scooters, we're running around, we're having fun, you know, and then racing and obviously it's fully competitive but it wasn't to that aspect. So it was a big wake up and the realm to get there and then climbed up Formula 4, Formula 3, Formula 2 and then was a reserve driver in 2024 for the Alpine team and then mid-year, July, signed for the three years.
That's great. How important was the sim during that time? Did it become more important, you know, throughout that early part of your racing career when you're kind of moving up the ranks? Or was it important the entire time?
It's important the entire time. I guess like the simulators we have obviously at home or to an extent on a junior level are very obviously on a low caliber. When you're a reserve driver, you're doing the sim overnight on your Saturdays. So you're typically at the track on a Friday. You do the first free practice session, free practice session 2, and then you'll fly back to the factory, do the simulator from, let's say, 6:00 p.m. until 3:00 a.m. So all of the things they wanted to try throughout Friday that they weren't able to then try overnight because they have curfew. So obviously the engineers can't keep working towards it. So you're working it overnight and then I'd get in, you know, a transfer, head straight to the airport and then head back to the track to sort of deliver this and more in a driver's perspective rather than just engineering feedback that's been delivered. So...
It's very rare. So you're not flying commercial in that situation, right?
No, unfortunately. Unfortunately, yeah. Like a G650.
I mean, it's just crazy because it seems like a pretty tight window, you know? You're going to the factory, getting on the sim, getting off, headed straight to the airport, but then I imagine you're arriving shortly before the race on Sunday, right?
Yeah. It just means not great, let's say preferable flight times and options of sleep. But it's weird, like you dread it and then you get to like your 12, your midnight, your 1:00 a.m., it's tough and then you sort of then push through, your coffee's deep. You're also doing some cool things. And you enjoy it, you know, definitely after a while. And it's not, you know, doesn't become, you know, you get some bad time zones like when you're doing, you're in the UK and you're doing for Australia or you're in, well, the sim's always in UK doing Mexico, some weird places where you're having to do some very strange times.
Bryan Johnson's nightmare.
Literally no good therapy there. So I mean throughout this whole process you're also learning about technology, I'm sure meeting people, thinking about the company. What is your workflow like? What is your free time? Does it track with seasons? Does it track with certain days of the week? Do you have downtime where it just doesn't make sense to put any more time on the track or in the simulator? And so you do have free time. Like what is the work-life balance like as you're sort of grinding up the ranks? I imagine it's pretty full tilt, but you obviously had a little bit of time to think about what was next.
Yeah, exactly. I like to think about it now because I went from that being my full life. And you had very little time off in the sense of every one of your spare days was a marketing day or was a media day or a partnership day. And then if you did have a free day then it was more time on the sim or doing more correlation. And not doing it effectively, you'll be going back to maybe a race six races ago and redoing things with what you have now and how that's changed. And then when you had time off though it was off, right? It was fully just like, you know, you were completely done. Where now I'm a reserve driver for this year doing 10 races. It's, you know, what will be what will be with what might happen, but I'm very limited on the control that I have on getting back into the car. So I'm not, you know, they only have X amount of time with simulators. I'm not on the sim. I'm currently not testing. So when I'm here or if I'm off, and I guess you are when you're in this world, it's never fully off, right? Even if you are on the weekends or away, you're constantly still taking that 2 a.m. call. You're still, you know, working through things. There's still communication going on. So it was quite a difference. You didn't have any flat-out commitments of these partnership gigs, you know, you're constantly doing something.
Is part of what attracted you to entrepreneurship, like I feel like the challenge in Formula 1, there's only, you know, in entrepreneurship you're getting like nos all the time and sometimes you get an opportunity, sometimes you don't. But in Formula 1, you're like almost entirely reliant. There's like a set number of teams on the grid. There's a lot of stuff that's out of your control. Whereas in entrepreneurship, there's a lot of stuff that's out of control. But if you get a no from one customer or one investor or a hire you want to make, there's always like another one and you can keep working towards where I feel like as an athlete it can be very frustrating where you're like, I'm doing everything that I possibly can and yet I'm relying on these external parties in order to push my career forward. Does that resonate at all?
Yeah, massively. I think even once you're a Formula 1 driver and you can be in an airtight situation, your seat is always for sale in essence, right? Like, you know, maybe not depending, there might not be any buyers that are able to compete with the ticket size that you're sitting on, but there's never any certainty, right? At the end of the day, you're an employee. You're still contracted. You can be fired. Yes, that can happen in entrepreneurship if you're CEO, founder, depends on your structure, what stage things are at. But I definitely wanted to be, like I said, more in control. And I've been through, you know, although I'm young, I'm not super young anymore. But still young and been through quite a lot of, let's say, networking and navigating different realms, whether it's trying to source a client in a specific region. For instance, the old CEO of the Alpine F1 team didn't really read the media, didn't watch the news, but he just specifically had a little newspaper for his local town in Italy that he always read each morning. So I ensured that what I was doing in my testing and my work that was getting correlated was made sure that it was published in that specific newspaper because I knew...
And it's the same thing if you're trying to target a market in MENA or in India, the Philippines, that are overlooked by, let's say, Western innovation or the technology and looking at things from a different perspective. I think these are all aspects that I've learned that sort of tried to target, have a scope on things that I wouldn't have known at all.
So tell us more about Muse and tell me specifically like why this company, like what was the opportunity discovery moment?
Yeah, I think what I wanted to do was solving a little bit of the fragmentation issue for your, you know, non, let's say, high enterprise institutions, but that they have everything aggregated, have these things that are together in order to then implement and optimize AI. So I didn't really know where that was. It was quite horizontal of that factor, especially targeting, like I said, your, let's say, lower-served countries, whether that's South America, Brazil, India, Philippines, or things that are more fragmented, Indonesia. And our first contract came actually in the food and beverage space with Oakberry, which is an acai company. And it was an extreme eye-opener of how many systems that they run on, how they don't communicate, how things are just not tracked obviously over three full days because your inputters, your tracking sources are 17, 18-year-old kids, whether it's an Oakberry or whether it's a QSR. Your employees that you're managing and that you're relying on to track all this reliable data that you end up will be having automated or optimized was done by someone who doesn't really want to be there, who is checking in at the latest point and is checking out at the earliest point, and things are not being done with, let's say, top-level accuracy. So that's where we wanted to really tighten down and thought if we're going to try to do many other things, especially in this realm, it's so important to find that trust. And so we really wanted to niche down and capture one vertical properly. And as we could dive into it, you just get further and further into the rabbit hole of finding your niche, right? And getting into the area where you really want to solve. And it went from, okay, supporting on agents for your POS systems, your inventory, your waste, your invoicing, and then finding that none of this can be optimized until these are communicating because each QSR system is using between 16 to 80 different software systems, can be very, very large, that are all third parties, and none of them obviously are coerced, none of them communicate, all this data is fragmented. So no AI agent, let's say, or AI is going to be wrong on proprietary data unless it has access to all of it at one time. And your big institutions, your Burger King, your Restaurant Brands International, McDonald's are very tech-forward. They have their own agents, but they're only accessing menu queries, maybe staff training. And because in order to aggregate all that data, it would mean shutting some part of their system down to do it.
Is it hard to get companies to pay for this? I feel like a lot of the traction in SMB restaurant, it's driven by the POS system like Toast because you just take a small cut of the credit card fee and it's sort of like this invisible cost that then can scale really dynamically. But if you're going in and you're saying I'm going to sell a solution, like how are you justifying actually getting someone to open up and put down a credit card or pay for a recurring service which I imagine is the business model?
Yeah, definitely. You know, it's not easy on the aspect if you think you come in and you're trying to sell something that is, oh, this is better than what you currently have, right? By going to replace X, they get pitched how many tech software has daily emails come through that what we have is better than what you have. And not them, we have a great AI agent for F&B, false, you know, fast, no one's got a good AI agent until operating on the data. But what we're trying to operate is it's like headless as default, right? It's an underlying layer that is almost like super good. So in essence, AI cloud systems, whether you want to call it a company brain where it's unifying all their current systems into one aggregated location, which then if they're not optimizing AI, as long as we have at least three months of that data, you know, up towards three years, then we're able to really act and create for that. Or if it's your larger companies who have already an agent with Burger King BK Assistant or others, then you're feeding this, let's say, aggregated and orchestrated data to this agent, which before they're all individual third-party softwares and now they're in one hub which can be orchestrated. They're all communicating together and you're actually going to get that optimization.
So it's much easier to sell like that than actually saying this platform is going to replace what you have, let's say.
Yeah, that makes a lot of sense. Well, last question please. How's the grid reacting to the LaFerrari?
The Ferrari LaFerrari, the new electric vehicle from Ferrari just locked in.
It does sound like that. No, I think, look, I'm with, and we have a relationship with, we're running a Ferrari engine, so I think it's amazing. It looks terrific. It's unbelievable. Cannot bless it more. I'm sure we'll chat about that more, Jordi. But guys, I'm sure that's my time, so it's great to...
Yeah. So great to meet you. I love the energy and the focus and let's do it again soon.
Awesome. Have a good one.
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I think our next guest is joining in just a minute. But in the meantime, we can talk about the AI executive order. This was signed today by the president. And Dean Ball has some context here. He says, 'Wow, this EO is almost exactly similar to the leaked text from the EO the president chose not to sign because it was too regulatory. The only major difference is that the voluntary pre-deployment review process is now only 30 days rather than 90 days. That's a concession, but a very small one compared to what I would have expected based on the president's remarks about the earlier draft.' So, if you haven't been following along, AI companies will be able to voluntarily submit their new models to the US government for review. Now, the government will get back to them in 30 days as opposed to 90 days, evaluate them, and make a call or give advice or give some sort of commentary. Every word that comes from the government is a potential lawsuit in the future, or will show up in a potential lawsuit. And so you can expect a lot of thought and care given to whatever the government responds to. A lot of government applications from the FDA previously, the response would be no comment, and no comment is tacit approval. The FDA with some products, with a lot of nutritional supplements and food ingredients, they don't necessarily want to say this is FDA approved because that's a very high bar. There's a lot of regulatory and risk and legal ramifications from approving something, but they can decline to comment. They can decline to not permit the company to move forward. And I would expect that even a small result like we sent them their model, they reviewed it for 30 days and they didn't say it was bad, will be a good signal for AI labs that submit through this process. So, but Dean Ball continues. He says this is a fairly major win for the safety contingent within the admin and a significant loss for the Sacks accelerationist wing and is surprising to me. I continue to think this EO is a mistake. This is clearly teeing up the infrastructure for a model licensing regime and the fact that the administration is classifying the details of how this voluntary system will work is egregious. So everyone wants to know what are they going to be evaluating? Are they going to be doing ARC-AGI tests or some other benchmark or Humanity's Last Exam or just red teaming it or just talking to it? Who knows? It's classified. Everyone is interested to know. Dean Ball certainly interested to know, but we don't know yet. But maybe in the future. The public, he continues, the public and the employees of the labs have a right to know how this works. It is very frustrating when you're interacting with the federal government and you don't know their rubric for grading you. That is one of the most frustrating pieces of going back and forth with the regulatory body. It's best when there's a very clear test for the DMV. You show up. If you know the answers to the questions, you get a driver's license. If they were like, 'We test you on a mystery rubric,' that would be very frustrating for anyone looking for a driver's license. He continues, 'Most lab staff don't have clearances, but some do.' But if the literal regulatory thresholds that trigger pre-deployment review are classified, researchers themselves won't know whether what they are training is regulated by this EO, all for a benefit that is barely articulable. What exactly is the intelligence community going to do in 30 days to make the model safer? I don't know, there's a lot of tests you could run in 30 days. You know, try and hack this thing, try and design a bioweapon. These are things people are worried about. In 30 days, you can certainly get these models to attempt those and see how they respond. So, he says it's not a huge mistake, but a small medium-sized one, but I am fairly confident this is a mistake nonetheless. Well, we will dig into it more in the future, but our next guest is here in the waiting room. We have Nate Cavanaugh from Special. He is the co-founder. Welcome to the show. Both of you, please introduce yourselves and tell us about the company.
Hey guys, good to see you. Appreciate you having us.
Yeah, great to have you on.
Yeah, my name is Nate Cavanaugh. Justin Fox is my co-founder on the line. Today we were excited to announce Special, which is a new holding company that we really view as an extension of the work we did at DOGE. So Justin and I worked together at the Department of Government Efficiency for the past year. But we're now building effectively DOGE but for the private sector. And so we're focused on this $10 trillion main street services economy, which in many ways is like the federal government. It's massive. It's inefficient. And in a lot of cases is still funded in part at least by the government. And so we announced that today and excited to chat with you guys about it.
Do you have a particular industry that you want to focus on? Do you want to be general? I mean, I see this loosely in the bucket of management consulting, delayering, understanding inefficiencies. There's a tried-and-true track record. I'm interested to hear how you're differentiating from other management consulting firms that might already be doing some of this work for large companies. But then also I'm interested to know where you're focusing, where you see the most opportunity.
Yeah, it's a good question. I mean, the main point of differentiation is there's two components to Special's business model. So Special is developing a set of AI tools that we can apply to these main street industries. We're starting with healthcare and more specifically a bet on the aging population demographic of the US. And so we identified that as our first vertical. We're actually incubating a new brand to become category leader and we're going out and acquiring these great independent small businesses and applying those AI tools into the businesses that then we will own forever.
So just to guess, are these like Medicare related businesses, hospital, or like a primary care or like an urgent care? Like what are we actually talking about in terms of healthcare?
The specific market is at-home senior care. So it would be a nurse going to a senior citizen's house, provide them with care in the home. It's the lowest cost way to provide care for senior citizens in the country. And as I'm sure you guys have seen, there's a lot of fraud in Medicare and Medicaid. We're focused on trying to provide the nurses, the critical workers in these industries with the best AI tools so that they can provide better care for seniors.
And there's probably a lot of back office work that goes into scheduling and all of those things can be enhanced with AI tools, I imagine.
That's exactly right, Jordi.
Yeah, why a holdco? I'm curious, like this feels like healthcare is like a multi-million dollar industry to start. You guys sounds like you have a playbook that you feel like can be applied across different categories, but is healthcare not big enough for you guys?
Justin, you want to take this?
Yeah, look, first of all, it's great to be on with you guys today. Look, I think with Special at the top parent co and developing these AI tools, I think to limit the expertise that we've learned from DOGE and from prior careers to just healthcare, I think would be narrow. The point of having the parent co with engineering talent is that we can deploy into multiple verticals. And so, I mean, as you can imagine, the main street economy is massive. And so if we're just going to address healthcare, I think that's too narrow. And frankly, there's so many independent business owners that we're looking to problem solve for. So, Nate alluded to it, but Figure is our newly incubated strategic brand in healthcare. And so that brand is going to inevitably be carrying the torch for these business owners through development of AI. So we're going to be working hand-in-hand in the weeds with these operators to develop the tools that they need to succeed.
How do you think about the size of a company that you want to acquire and fold in? Obviously there's some organizations that have already been sort of rolled up. They're large. They're private. There's probably public companies that you could do a take-private of at the biggest scale. There's also probably very small businesses with owner operators who might be getting older looking for liquidity. Like what is in your strike zone?
Yeah, it's a great question. I mean, today we announced our new financing led by Andreessen Horowitz and a lot of our DOGE teammates, guys like Steve Davis, Antonio Gracias. And in that same announcement we announced our first acquisition that's under contract. It's a business that's doing, we'll say, tens of millions of dollars in annual revenue. They have about 1,500 senior patients that they care for and about 200 nurses on the payroll. So it's a pretty big business based in Texas. And we have a pipeline of others that we plan to do. So I'd say it's a business where it already has some management sophistication and some real scale, but is not at the scale of doing a public take-private.
Yeah. Out of curiosity, how significant is the back office opex? Because I imagine seniors want to be cared for by individuals. I imagine they don't want to just jump on a Zoom call and get care that way. So is this a play that you think you can use AI to grow the business much faster and you feel like there's significant back office savings? Or like where do you think you'll get the most return?
Yeah, look, I think what we're not suggesting is that a robot is going to replace a nurse in grandma's home. That's not at all the case here. Look, I think when we think about the delivery of service, if that takes up about 50% of the costs to pay your nurses, there's something like 40% of the remaining dollars are getting spent on a lot of administrative tasks that can be solved with AI. And so our view, the way that we think about it at Figure is let's make the jobs of our back office team members easier and instead of what maybe a traditional PE or strategic would do, which is pocket those savings and market a huge margin accretion, let's share those savings with our workers. So one of the things that's unique about this space is there's a massive shortage of nurses and caregivers. And so to the extent that you can be in a market and be able to pay your team the most, everybody will flood into your business. And so then you can provide care for millions of Americans who sometimes don't have access to it. So that's the underlying thesis. I think it's share the pie, grow the pie with everybody and it'll help you grow and deliver better service.
And Jordi, to your point, this is the playbook that we plan to replicate across not just healthcare, but markets like construction, manufacturing, other very labor-intensive, highly regulated markets that a lot of the learnings we had from DOGE can then get applied back into the private sector.
Yeah. More leverage on the key workers that are doing the most important tasks, the things that are actually aligned with the mission and more efficient back offices. Makes sense.
You guys sticking with a five-day work week? It's been a hot debate. I got a feeling you guys might be putting in a few more hours.
I don't think we're as... we're somewhere between five days and Doge. I think is a...
That feels healthy. That feels sustainable.
Better than tattoos, I suppose.
Congratulations and thank you so much.
Yeah. Thanks for coming on, guys. Congrats on the raise, and I'm sure you'll be back on with more news soon.
Have a great rest of your day.
Up next, we have Tom Mueller from Impulse Space. He's the founder, CEO, and CTO. Two job titles, three job titles. We're very excited to have Tom Mueller back on the show. He's been on before, but great to see you. How are you doing?
I'm doing great. Great to see you guys.
First question, Ferrari Luche reactions. What you got?
What I got? What do I have?
Ferrari Luche reactions. Ferrari Luche. The electric Ferrari. It's coming out at $640,000. Do you think it's underpriced? Overpriced? What do you think?
Uh, overpriced for that styling. It is an odd positioning, but uh it got everyone talking.
I think the F40 is going to hold value. I don't think it's going to be an F40 disruptor. Not many people trading those in. Anyway, we're not here to talk about Ferrari. We're here to talk about Impulse Space. Uh can you uh reset the table for us? Uh reintroduce the company, give us the news, tell us what's happening, and then I have a million questions about the space broadly, but let's kick it off with that.
Impulse Space. I started this company 5 years ago. It's uh space mobility success, which basically means that um we take over where launch leaves off. So um we move things around in space. So starting at LEO, we move things up to GEO, like up to 22,000 mi up. We can you know take things to the moon. We can greatly increase the amount of payloads you can take to Mars. Um we have our Mira spacecraft. Three of those are flying uh right now and a bunch are in build.
Yeah, those things uh do precision maneuvering in orbit. They can host payloads, they can deploy payloads, they can do rendezvous. Um we are hopefully we'll get um on-ramped onto the new lunar um cargo uh program and do big some ton uh one ton class uh lunar landers. Um it's a lot happening right now.
I can imagine. Um, so there's been so much excitement about LEO, Starlink, uh, Planet Labs, you put a camera up there, you put a Wi-Fi router up there, basically, not to simplify too much, but, uh, even Varda manufacturing in LEO, like all so much of the attention's been on LEO that I think a lot of people have sort of lost the reference classes for what happens in higher orbits. Can you give us some examples of what's interesting at higher orbits? Whether that's uh Medium Earth Orbit, I think, is that what it's called? MEO.
Medium Earth is just hilarious because it's a Lord of the Rings reference, but uh MEO, uh GEO, I understand geostationary orbits are sometimes useful, but give us the 101 on why someone would be unsatisfied with just uh yoloing endless satellites into LEO in perpetuity.
Well, the nice thing about GEO uh you know is where really comms started is that you can cover the whole earth with just three satellites.
Um and of course geosynchronous means or geostationary means that it's a 24-hour orbit. So you're always located at the same point in the sky. Super important. Still an important um orbit. Um it's kind of been overshadowed by all the LEO launches, but there's still um you know, a dozen uh launches or more that go uh to that orbit. It's becoming more important of an orbit for the Space Force. Um there's a lot happening up there.
Um that I don't even know about. I don't have the need to know, but there's a lot going on up there and um you know, our adversaries, China and Russia are maneuvering around our satellites up there. So, we need to go to have mobility to go up there and defend and find out what's going on and be able to protect our assets.
So, we have the capability to get to GEO. Obviously, there are satellites currently in GEO. You mentioned there's maybe a dozen launches that sounded annual like maybe something like going up there. So we have the capability like the rockets exist but it's uneconomical and so the value prop of Impulse just to say it back to you is get on a rocket that's going to LEO but end up in GEO and you don't need to pull all of those resources and so uh you're sort of unlocking GEO based on all of the LEO capability that we have in spades. Is that right?
So, what we're talking about here is our Helios product, which is what we call a rocket on a rocket. We add basically a third stage to a Falcon 9. It's got 12 tons of liquid oxygen and liquid methane, very high performance uh pump-fed staged combustion engine, and it can get you from LEO to GEO in a day. So, it basically uh helps Falcon 9 do what Falcon Heavy does.
For tens of millions of dollars less.
Or for an example of a you know commercial guys usually don't fly on Heavy, they'll fly Falcon 9 and then they'll spend months using electric propulsion to get to where they want to get. We'll get you there.
I didn't realize that was an option. That's so interesting. Uh I'll have to research more of that. I'm fascinated by that. Uh talk to me about how Starship changes things for you. Is that an accelerant for you? I mean you're raising a $500 million Series D, I can imagine, and you worked at SpaceX obviously for a very long time. I imagine that that's not a nail in the coffin, that's not a threat, but I imagine it's a benefit. But how is it a benefit? Because uh the intuitive, you know, uh the lay person might think bigger rocket that'll get me to go easily, why do I need Impulse now? So talk to me about how Starship fits into the future of the space economy.
I mean, Starship is going to be the ultimate uh LEO um you know, workload. Yeah. Cargo ship. Yeah, because it doesn't need to refuel um to get to LEO. It can get to LEO and be fully reusable, come back and fuel and go again.
So, it's going to greatly reduce the cost uh per kilogram or per ton to get cargo to orbit. And that's why I started the company basically cuz I worked on Starship the last six years I was there realizing that now we have such an efficient way like I mentioned at the beginning, launch is solved, now we need to figure out how to move all that cargo around um once it's up in orbit. Of course, Starship can refuel and go to these high energy orbits, but I think it's going to be more efficient if you need Starship there, that's what you need to do. Like if you're taking cargo to the moon or humans to the moon or to Mars, that's the right thing. But I don't know that it's the right thing if you don't actually need the Starship up there because if you think about it, Starship's 120 tons of stainless steel you got to bring up there and then you got to bring it back to get it back. So we'll see how the economics work out.
Okay. Speaking of, how did the space sort of like founder startup community react to Blue Origin? Obviously you know, massive setback and disappointing uh hopefully for all humanity.
I don't think anybody was cheering that on. It's obviously bad for the industry. um launch is still constrained. Even though SpaceX is flying so often, there's just so many payloads that need to go that we need all of them to be successful. And I think it's been mentioned many times, SpaceX is not going to lower their price until they have a true competitor and we need true competitors to come online. It's happening, but um you know, these setbacks delay it.
Yeah.
What uh what have you heard around how big of a setback it actually is? Is this setting the program? Dave Limp, the CEO, just um I think last night tweeted that they think it's not as bad as it initially looked and they think they can fly again this year, which is great. It's great news.
Yeah, I was looking at the aerial photography of the launchpad and the headline was billion dollar launchpad, the only one they have completely destroyed, but some of the buildings looked pretty usable. I was optimistic, so I'm glad to hear that Dave Limp is sharing some optimism there as well.
Uh, I would love for you to uh sort of walk me through some of the trade-offs and economic uh considerations about getting to the moon because uh we just saw with the Artemis launch that uh single rocket seemed to be able to just fly right up there, come back. And then when I see the Starship plan, I'm like, it's as big or bigger rocket. It should just be able to go straight there. But then when I see the actual plans, it's like seven different refueling stages and it seems much more complicated and it seems like you have the ability to potentially get to the moon with certain plans. And so it feels like there's an ensemble approach, there's different tradeoffs. Like what is the logic as we try and get to the moon more regularly? How will this actually play out?
Yeah, I think you know there's two ways to do it. You use a large um partially reusable where you basically throw away those upper stages.
And take a lander to the moon. That's kind of the Blue Origin uh approach. Or there's the fully reusable with multiple refueling to get there and back, which is the SpaceX approach. But what we do with Helios is sort of the former. We're adding this expendable third stage and now we can 10x the amount of payload on a Falcon 9 to the moon. So imagine that lever like you basically um for the same cost of the launch vehicle plus a little bit more for the Helios, you're getting 10 times the amount of cargo and we've looked at missions to Mars where we get uh five times the payload to Mars just by adding a Helios. So it's a huge leverage. It's going to be a really compelling product when it starts flying. It's already selling really well. I think once we're flying it, we won't be able to make them fast enough.
So you have the money raised. Uh what are you actually working on in terms of uh creating reliable manufacturing, your supply chain uh because I imagine that it's not enough to build one prototype, a few prototypes, something hand-built. That might be something you're experimenting with in the early stages but the name of the game is industrial capacity here. Uh what do the next few years look like in terms of scale?
Yeah, ramping up production. We're hiring more people and we're hiring a lot of people in the production area, you know, manufacturing engineers, technicians, um all kinds of people now where earlier in the company's history, we were mostly hiring a lot of development engineers. So now we're really getting into production on our products. Um and we just moved into or starting to move into a much larger facility here. We're filling that out with uh you know production capability and we're always um the same thing that we did at SpaceX. We're constantly um uh bringing more things in-house like becoming even more vertically integrated.
Vertical integration takes a lot of capital which is why we've raised a lot. Um but once you vertically integrate you have a huge advantage. We see this with SpaceX able to execute very quickly, very efficiently uh at low cost. Uh basically you can control cost, schedule and quality if you're vertically integrated.
And take me through the shape of that vertical integration. Are you buying like tube bending machines, CNC machines, 3D printers? Like what is the shape of the vertical integration? Are you building like specific machinery that will just make one product over and over and over again?
I mean that's the tooling part of it, but certainly you know milling machines, lathes, uh 3D printers, um and uh building out test capability. Um so like raw materials in and you finished product eventually. Yeah. You know, you bring in raw material and spacecraft come out the other end of the factory.
I love it. Uh what do you think the impact of the SpaceX IPO will be on, you know, the space economy broadly? Uh you know talking about maybe people that have been there for a decade maybe ready to do something new. How do you think it'll uh impact the industry?
Well, certainly, you know, the space economy has been accelerating, you know, since the time that I've started this company a lot. And I think that's just really the general effect of SpaceX and other startups have on the industry. And now with the announcement, it's just supercharged the space industry. Um which is great. And I love what Elon's talked about, you know, uh building, you know, basically he's talking about building mega structures now in space. You know, millions of AI servers in space. And he's already talking about using the resources of the moon in order to build when they max out what they can launch. And this is the theme of my company is like this is something I've talked about a lot is you need to use the resources of the moon to build these mega structures in space because it's going to be destructive to the earth to launch it from earth or grab it from earth or in the case of compute power, to the amount of compute power we're going to need in the next 30 years as it's growing at 15% annually is just crushing. So moving that to space is the obvious thing in the long term. I'm glad to see it's happening sooner.
Seems like you're excited about both the moon and Mars. Uh Elon was like a Mars maxi for a long time. Now he's interested in the moon. It's been exciting. I'm obviously excited about both, but uh what is different about these two missions? Obviously, the moon's closer, but uh like what's uniquely unlocked by the moon? Why is the moon important? Why do you see Mars as important as well? Obviously, you should never stop. I hope you wind up going to Alpha Centauri soon. But let's just uh narrow in on Moon and Mars. What are the unique opportunities? What are the risks? What are the trade-offs?
Yeah, I've always been uh more of a moon person myself. I think the moon is more important in near term. Uh it's easier to have a permanent base there. And I think everything we need to build in space is on the moon. The metals, you know, water, um you know, oxygen. So everything we need to be self-sufficient uh of building mega structures in space is there. And I would also add near-Earth objects. Some of them are easier to get to uh than the moon. Mars is super important. Uh
Wait, what's a near-earth object that's closer? There's secret planets or asteroids out there you know about? And I don't. Near asteroid.
Okay. Near Earth asteroid. Yeah. The thing about the moon is it still has a gravity well. You know, we talk in kilometers per second.
Earth has a gravity well of like 9 km per second and the moon has a gravity well of like 2.4.
But you still have that's a lot of propulsion to break down onto the moon at 2.4 and then come back. You're talking 5 km per second total.
And you got to bring that with you.
You got to bring the propellant to do that. That's why the moon is still pretty tough. Whereas a small asteroid is, you know, it's just meters per second maybe or centimeters per second because the gravity is so low. So you don't have to um use all that uh propellant in order to get there and back. So it's
And those meteors, I'm not trying to quiz you on something that you might not have dug into, but I'm fascinated. Are these like meteors that are just passing by and the whole point is that they pass by regularly enough that we could go up and back or are there actual meteors that are like orbiting the earth right now that I don't know about?
There are, I mean there are, I think there's one right now right that these things get temporarily captured and orbit and then they eventually run the table and they get thrown out like the moon will throw them out or something.
But there's you know there's a lot, most of them are you know further than the moon but once you escape Earth's gravity, it just takes time to get there. But you don't have a gravity well once you get there to get the material to come back. But the moon is easier in just that you have surface gravity and you know and a nice surface you can land on and build on. So I think the moon is super important also.
Yeah. Uh sorry Drew, do you have something or uh not right now? I can keep going. Um I'm interested in both the footprint of the company. You mentioned you're expanding. I know uh the original headquarters was in El Segundo, correct?
Yeah, I still have that little building over in El Segundo. Started a little 7,000 foot building,
but I imagine you've outgrown. So, what is the footprint of the company? What's the workforce like today? Where do you see that going? What are you hiring for? This feels like a great company to join if you're, you know, uncertain about how AI will change the world. Well, we're going to be shooting rockets for 30 years, as you said. We have a lot of work to do. So, this feels like a fantastic opportunity for folks.
Yeah. Yeah. So, like I mentioned, we started in the 7,000 foot garage, people call it over there. We maxed that out and then we moved into our facility that had an interim that's about 60,000 ft and we just acquired another 240,000 square ft uh on the same block, basically at the other end of the block that we're just starting to build out. We've got 500 uh employees right now. We just passed 500 a few weeks ago and we've got uh 200 open job reqs. So, we're hiring.
Whoa. That is fantastic. Take me through the shape of the uh There we go. Hiring 200 people. That's serious. Uh take me through the shape of those job reqs. Are you hiring software engineers? Are you using AI everywhere? Are you hiring everything?
Like I mentioned earlier, we're hiring a lot in the production area.
Um we're hiring uh software uh people uh just I mean, we're a spacecraft company. Um we do, you know, we have to do comms, we have radios, we have antennas, we have reaction wheels, all kinds of stuff. Lots of avionics, lots of propulsion, lots of structures, lots of software to control it. There's, you know, no such thing as being a tech company without software to operate your hardware. So, yeah, all of the above. Guidance, navigation, and control. Um, orbital mechanics are I'm a rocket scientist. I don't understand most orbital mechanics. That's really tough stuff. Super smart guys that figure out how to navigate in space.
That's great.
Awesome. Uh, we have a gong. We'd love to hit it. Tell us about the fund raise. You raised $500 million from 137 Ventures.
We love Christians over at 137. Uh well, thank you so much for coming on the show. Have a fantastic rest of your week.
