Facebook gets a movie, Anthropic gets a Fable, Vinod Khosla, Matthew Prince, Bret Taylor

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And what else?

Um, two major stories. Bunch of major stories, but the big one, Facebook got a movie, another movie, actually a third movie if you count the documentary. There's been The Social Network, The Social Dilemma, and now The Social Reckoning. Only two of those are movies. The Social Dilemma is a documentary, but it's very interesting. And Anthropic got a fable and there's been a ton of reaction. Ben Thompson was writing about it to the rollout there. The Wall Street Journal, like the announcement should have been like the really good model launches and people are amazed with what it can do. But they put the title, 'Anthropic puts curbs on AI models.' So, well, I'm sure you've seen this on the timeline, but we'll take you through some of the debates over how restricted the model is in certain areas. Bio is a big one. Cyber is another one. There's a bunch of funny examples. There's a bunch of reasonable arguments for doing this type of stuff. So we'll go through all of it. But

Can we talk about who's joining the show today?

Absolutely. We got a bunch of great guests.

We got... What a lineup.

What a lineup. Hey, Clicky founder Farza Majjid is joining. You've probably seen his viral demo last week. We're very excited to talk to him about computer use, potential consumer AI applications, what he's doing to build hands-free AI voice assistants. The CEO of Snowflake's coming on. CEO of Cloudflare is coming on. Venode Kosla from Kosla Ventures is coming on. And then Brett Taylor. Brett Taylor didn't even make the cutoff on today's lineup. What's going on here?

Brutal. And of course, we have Marky Wagner coming out announcing Emerging from Stealth with her new company.

She's fantastic.

So I want to kick it off with the Social Network sequel. I want to watch the trailer for The Social Reckoning because Jeremy Strong is playing Mark Zuckerberg. I've heard people say, 'Hey, he looks like Zuck.' Like the styling is there.

Henry says, 'No Doug from SemiAnalysis.' Oh, we got to get him on.

We should get Doug on.

Let's hit him up.

Hit up Doug.

Let's get him on and see if he's available.

So, not that we have any time, but we'll make... Well, we'll make time for Doug anytime.

So, the one critique is Jeremy Strong looks a little bit older than Mark Zuckerberg did in 2011 because he is... calling him, or it just... I think it'll color the movie a little bit in the sense that the film is telling the story of this like very difficult whistleblower situation. And it's different when it looks like a mature adult versus someone who was young and running into these problems for the first time. Anyway,

No Matthew Prince.

What?

He is joining.

Yeah, he's joining. We got the Cloudflare... 12:30 Pacific, 12:30. Get ready. We're going to go through Cloudflare. They have exciting news. I think it's public already, but I don't want to blow up if it's going to be announced later today. But anyway, I want to react to the trailer. So, let's pull up the trailer.

Listen, before I go on, I want to make something clear.

This is how it starts.

Okay.

I have a hunch you're not a fan of Facebook, but I am. I am here to help Facebook, not hurt it. Okay.

You send me a message. What would you like to talk about?

The chairman gave a session to order. You'll read your opening statement, which we'll skip past for now. That's a separate session. And we'll move to witness questioning.

Spell your name and state your current occupation for the record.

So, is it not this time?

C-E-R-P-E-R-G.

Let's see.

And your occupation?

Zuckerberg.

I'm a professional defender.

Co-produced and directed by groups where 30% of content hits multiple risk factors.

Hang on. I don't piece to the social. Are you a tech reporter?

Is this my guys are counting on the next round of professional testimony to make you mark?

I'm happy to lend a hand, but I think you do.

You wrote broken code. He was a journalist at the Wall Street Journal. He is a journalist at the Wall Street Journal and broken a number of global news stories in our lives including the Facebook files.

The fire hose of bad information you are injecting into the air supply, jet power.

I'm a free speech absolutist. I'm not the one who's lying and I'm not stopping them from seeing someone who is.

Not a bad Zuck impression. He's got the voice tone pretty down.

Got worse as a result of time spent on the platform.

Senior leadership knows and is doing nothing.

I know there are easier enemies to make. The mafia would be an easier enemy to make.

So what would you need to stand up the story? The internal documents.

This is a material violation of my NDA.

We're twice as big as the biggest country on earth. We're not frightened of Congress. We're post government around here. Please. Twice as big as the biggest country on earth.

We have 102 hours to get... from a user standpoint.

Oh, okay. Use it.

I don't want to be made an example of by a guy with unlimited resources.

H, I promise you, is imminent.

Enough.

People around here understand that when I say no, that's the end of the debate. I'm not 2 years out of a dorm room anymore. Charlie, look around.

Man, if they were trying to go as inspirational as The Social Network, they really missed the mark there. What happened?

Yeah. So their intention was to try to fire up the next generation of entrepreneurs. That seems like they missed the mark, inspire them, to inspire them, to uplift them.

You can build any business out of your dorm room.

Yep. And also it feels like if the goal of this film is to really take the viewer inside TBD and Meta Superintelligence and what's going on with Nat Friedman, Daniel Gross, Alex Wang, like it feels like they just dropped the ball potentially. It's sort of crazy.

Yeah. Like I didn't see anyone that even resembled Yann LeCun.

That is crazy to not highlight that and what's going on over there. The launch of Llama. The Llama 4 moment that could have been the crescendo. Behemoth and all the drama around that. You want drama. You want Hollywood drama. You want Oscar bait. Llama 4 Behemoth. That story is going to get butts in seats.

That's right.

No, more seriously, it's going to be really hard to not look at Jeremy Strong and...

Kendall. Yeah, cuz you're a Succession guy. So, this is the sequel to The Social Network and instead of chronicling the birth of Facebook, it's the story based on the 2021 Facebook leak by whistleblower Frances Haugen. It's going to be dramatic. It's not going to make people like Facebook more, and it's probably going to make Americans even more distrustful of tech. What's interesting here is that if you stop a random tech person on the street and ask them, 'What is The Social Reckoning about?' They might say Cambridge Analytica because that was another drama moment. And I was sort of like, is it Cambridge Analytica? Is it the Haugen thing? And a lot of people don't even remember what the whistleblower story was. Little refresher there. It was an internal document leak. The Facebook Files showed that Facebook internal employees were aware of harmful societal effects from its platforms, yet persisted in prioritizing profit over addressing these harms. Now, Nikita Bier chimed in, who now works at X, a rival platform to Threads, and said, 'Zuck makes a lot of mistakes, but this isn't one of them. Meta literally had multiple teams of $1 million per year engineers working on teen mental health, and they had the agency to override big product decisions.' They're probably a thorn in Nikita's side because he's trying to maximize click-through rates, maximize attention, and he's getting pushback from, 'Hey, there's guardrails here.' And he says the story this movie is actually about is a product manager who didn't get a promotion. And so that's the pushback.

The only thing... the only thing with that argument is like you could make the same argument is like the cigarette company has million-dollar doctors and researchers focused on making sure cigarettes are as healthy as possible, right?

Yeah. Yeah. And especially with the new fertility data, I think that there's a new cycle brewing of like exactly how bad is social media. I still don't really buy the addiction thing just because I'm familiar with like addiction defined in nicotine, which is like extremely addictive. It's chemical and like you have cravings. Like if you forget your phone, do you have the same cravings? It's sort of different. But there is like a very serious discussion going on around social media and its effects and this fits right.

The phone addiction thing is very real. I was at an event last night and they required everybody to put their phones in these sort of like locked bags so you could go outside at any point.

I didn't feel sick but I noticed probably like 20 times throughout the night I was thinking of going for my phone.

I didn't start having like physical withdrawal symptoms.

Yeah. But the craving was there.

Yeah. I just kept thinking about it. It was like phone noise, right? Phone noise.

Oh, this is real. This is real.

I was having some phone noise.

Yeah. Yeah. Yeah. Yeah. Okay. So, yeah, that's legitimate. So the question that I had really quickly is like what is the impact on Meta? We can pull up the stock chart. It's a one and a half trillion dollar company. They're trying to raise more equity for the AI buildout, hire people. Like is this good, bad? What does it look like over the short, medium, long term? So short term, I think this was amazing timing. They really got lucky because as we will talk about, the fact that this trailer dropped the same time as Anthropic's Fable 5 was incredibly fortuitous because Fable just took over the timeline. And no one was really talking about this in tech. Tech insiders won't really see or talk about The Social Reckoning this week. Case in point, I put it second in the newsletter when I wrote it up. Medium-term, I think Jeremy Strong is going to drag Mark into like the bad group of AI leaders while he's on his Oscar tour. Like, there was a version of Facebook strategy, a Meta strategy that's just like, hey, we're like Amazon, we're like Microsoft. Like, yeah, we have bets in AI, but we're not deciding the frontier. Obviously Mark has made the decision to hire some of the greatest researchers, invest very aggressively and this puts him sort of at the center of the conversation around well what will the effect of AI be on our society on kids? Should kids be talking to LLMs? Psychosis, all these different things will come up just as we saw 4o psychosis and then Claude Code psychosis a little bit pop up and people are talking about that. Like you're priming the pumps for the next wave of like oh a bunch of people went into the Meta app and like they had a bad time and now we got to talk about that. So I wouldn't be surprised to see...

What do you think Mark is going to be more annoyed about this week, the fact that SpaceX is going to be valued at meaningfully higher than Meta or this trailer?

It's actually a tough one.

I don't know. I mean, I think the real one is Fable 5 because like if Meta was using a ton of Anthropic models and then the new model comes out and says you specifically can't use it in MSL, the most important initiative in the company, like that's like a pretty rough thing where you're like, oh, I've been working with this company to develop my models for my family of apps and now I can't use them. They do, you know, Meta is spending billions of dollars a year with Anthropic. They have been for a while.

Um, are... Yeah. Yeah.

They will spend billions of dollars this year. And the question is like if Anthropic does allow Meta to use their models for Meta's AI research, what does it say about what Anthropic thinks about Meta's potential in AI?

Secretly love ads this whole time. I don't know.

No. To me, it would be them not feeling like they had the ability to get to the frontier.

Totally, totally. Totally. And then that's an ace that's up their sleeve at any time. They can always just take the guardrails off and be like, 'Hey, more AI, more intelligence on demand for everyone.' So I think the fallout of the medium-term, Jeremy Strong's going to go on this press tour for the Oscar and he's going to have a bunch of like really emotional, pathy sound bites and then also be like just viral because it's funny to see him doing this impression, and he's very good at like drawing. He's already gone viral for his Mark Zuckerberg impression in the past. So I wouldn't be surprised to see the next version of a Bernie Sanders press release about AI highlight Dario, Sam and Zuck instead of what has historically been the order which is Sam, Dario and Demis. So it's always based on like perceived industry power and negativity around personal brand. So they have to have a scary quote and then they also have to have a lot of power in the industry. Zuck's power in the industry is rising and also with this movie like there's more ways to take shots at him like oh look at what he did with the Facebook Files, remind yourself of that because a lot of people don't really remember the details. They're going to after they see this movie. Then you can say well this guy's also building crazy data centers and look at how he handled this. If he handles the AI thing like that it's going to be bad, right? So that's like a little bit of a risk in the medium term. Long term I don't think The Social Reckoning is going to matter all that much for Meta. People will complain about Meta data centers, AI plans.

Why did they not get Jeremy Strong like a wig?

They did.

Oh, they because also he is playing an older... remember when he had the Caesar haircut. Yeah. So, it's different time. So, people will complain about all this stuff, but they'll do it on Meta's family of apps. I don't think there'll be churn. And certainly advertisers won't pull out. It's impossible to pull out of Meta because it just drives up the ROAS, the return on ad spend for smaller companies and a bunch of small businesses will just jump in and say oh great like you know some big company pulled out and is boycotting Meta that's great, I'm Ridge Wallet's going to jump in or somebody else is going to jump in.

Yeah, people have... advertisers have tried to boycott it.

Yeah, you can't on Facebook, it's impossible. So the business is just too strong. And so I also don't think Mark will be singled out by a regulatory hammer should it come down hard. Like if there's a data center ban I don't think it's going to be uniquely focused on Meta. Only Dario or only Dario and Sam have like true scapegoat risk because they run pure play labs and have been so noisy about AI and they have the biggest revenues in the category. There might be data center regulation but it won't unfairly target Meta. So anyway that's my Social Reckoning take. Let's move on to Fable which launched yesterday and the model seems like incredibly impressive. I've been seeing these vibe-coded games that look really really good and for some of those I haven't seen those like the vibe-coded games hit really well on social media because you take a video of them and you show the example of what it built, you share the time and people just sort of believe it. It could be embellished but in general these feel like pretty solid. Of course like making a great game is a great mechanic and there needs to be multiple levels and like a single demo of like a forest putting in is not quite there, but really really useful and I'm sure we'll see a bunch more examples of like games as memes, simulators, and these things are going to get easier to build. That's really exciting. Of course, there was a bunch of debate on the timeline yesterday and it's bleeding into today around the latest model, Fable 5. The first Mythos-class model that both seems remarkably good at long horizon tasks like software development and knowledge work, but rejects requests related to biology, cyber security, and frontier LLM development. Interestingly, I haven't seen anyone share rejections around anything else. Like, did they remember to reject like 'build me a nuke'? Like because I haven't seen anyone try that. And it'd be very funny if it was like, oh yeah, just we didn't get around to that. Or there are so many other things, but I think a lot of those other things that you should reject, queries that you should reject have been ironed out in previous iterations. So going back, you know, 'say a slur' was a big one for a while or say something rude or different pausing a chat basically just like shutting down a conversation versus like switching you to a less performant model.

Yeah. And it creates this like screenshot that went viral pretty much continuously yesterday. And so this aligns with Anthropic's focus on safety, but as many people have pointed out, it's also just good business. You don't want competitors using your products to directly create competitors and you also don't want financial liability or negative headlines from bad actors using your models for nefarious purposes. Ben Thompson called it true alignment. The take-safety-seriously culture aligns with business value creation which is very very rare. Oftentimes the like be-good-or-your-culture limits what you can do and actually hurts your business, but it's something that you do in favor of brand. Like Apple would probably be more profitable if they were using like diesel generators for all of their data centers. They went clean energy because they wanted to have an environmental brand and over the long term it's helped them, but in the short term it's been rough. Of course inexpensive. So Ben Thompson writes, 'What is so fascinating about Anthropic, however, is that while I'm sure some executives of the company are thinking this way, I also totally believe that the employee base broadly also happen to believe that they are doing the right thing.' It's fascinating to observe. Me, the rational business analyst, sees a hard-nosed but understandable decision to cut off would-be competitors. Anthropic employees and advocates, the true believers, see a regrettable but understandable safety decision that ensures that responsible and thoughtful people, themselves of course, will be the ones guiding our AI AGI future. This is true alignment and it's an incredible accomplishment. Facebook has tussled with this a bunch. And we already talked about that. But to be clear, the Fable 5 rejection threshold really does feel way too low from what people are saying. Tons of examples on the timeline of a biologist just saying hi to the model and getting kicked down to Opus. I saw you shared someone just said cyber with the devil horns, the purple devil horn emoji, and it's like we can't, we're not going further. Of course, like bringing down like a broad hammer, you can always dial it back over time, but every rejection is this implicit invitation to hop on the phone with an Anthropic sales rep and get on the Mythos enterprise plan. And that's where the real dollars are, too. The timeline is unhappy because the idea of democratizing science, technology, all of this is very alluring, but the pool of dollars available from all the biohackers in the world probably isn't close to the budgets available from big pharma. And so again you're in this like rational business analyst situation and you fail to see how this is damaging. Except to like the hacker community. The real tricky part is how frontier AI research is handled. Instead of outright rejecting the query and bumping the user down to Opus, the model appears to answer but quietly gives a degraded answer. And this was disclosed in the model card which is interesting. So this is again reasonable business...

Not disclosed to the user in the product while they're paying for it, which is a different path than bio and cyber. So if you go LLM frontier research devil horns it will actually give you an answer apparently. It won't bump you down immediately. But so it doesn't disclose that which is odd. Outright rejecting requests for AI research and just saying hey user sorry this model doesn't work for that type of project. Please share, please use another model or contact sales if you want help with this would have been much more in line with the bio and cyber security strategies. And then they also could not have disclosed and it's also possible that they just didn't need to disclose this at all. Like they could have just released a model that was intentionally nerfed on AI research. It would have shown up in the benchmarks because people would have benchmarked it on some sort of AI research bench and been like, 'Oh, weird. It's really good at all these other things, but it's bad at LLM research.' And maybe that would have been a bit of a brand hit maybe, but users might never know that the model was intentionally degraded around this category of work. So that leaves this third more worrying position. Intentional degradation without disclosure in the model card. There's no evidence of this, but it's possible that other workflows might be nerfed and there's no law or even convention around disclosure. Again, maybe good business, but a weird situation to be in. So probably bullish for eval if you're building a business on top of a big lab. You can imagine like a legal AI company will want to be really sure that the models they're using aren't degrading unexpectedly and not telling them. It's different if you're like, 'Hey, I've been a bio researcher for a while. I'm using this and I know that this model was never intended for me or I've been using it.' But what you don't want is like I'm using it and now it's leading me astray in my work and it's also not telling me that it's going to lead me astray which would be like sort of an odd outcome that I think they'll probably address in the near future anyway.

Yeah, that aspect triggered Dean Ball. He said, 'My last observation re Anthropic secret sabotage safety policy is that it undermines actually good safety policy.' How? First, it is very plausible to describe this as anti-competitive behavior. Even if you are maximally sympathetic to Anthropic here, you must admit this. And it is behavior being justified in the name of AI safety. If you believe, as I and many Anthropic staff do, that it may end up being critically important to relax antitrust enforcement so that the frontier labs can cooperate and collaborate on some areas of AI safety, Anthropic just undermined the case for that in a large way. Overall, this massively and profoundly raises the status of the argument that AI safety has been hyped to justify monopolistic behavior by labs. I continue to believe that AI safety is a real and serious issue that is growing in importance rather than diminishing. If you agree with me, this incident is a setback, maybe a serious one. And third, he says, as I have observed elsewhere, Anthropic's official corporate policy is structurally identical to the fact pattern alleged against them by the Department of War. I still think DOW acted both falsely and wrongly in that fight, but it is no longer possible to defend Anthropic with a full throat after this incident. This raises the case for heavier-handed regulations. Anthropic is making an awfully good case here that their product ought to be treated as utilities and thus their alignment practices should be a matter of public policy rather than private property. I am starkly opposed to this sort of state power grab but Anthropic is doing more to justify it than anyone else. Thus, significant damage has been done to a community and entire approach to AI governance. It was done unilaterally by Anthropic likely motivated largely by self-interest and justified within the internal psychology of the firm through the lens of safety. I suspect this is fixable in the economic and legal senses philanthropic but I fear that trust has just been broken and the goodwill extinguished will take very much time to repair. And just to level, he wrote the AI Action Plan, but then also came out very publicly in support of Anthropic during the conflict with the Department of War, saying that the Department of War is completely overstepping by pushing towards supply chain risk designation, putting pressure on Anthropic for not wanting to work with the government in that particular way. Obviously there's a whole bunch of new data that's been released and stuff and that conversation has evolved, but he doesn't strike me as some like crazy hater. Anyway, let me tell you about 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. Doug O'Flaherty was also sort of mixed results on Fable. He says when it works it's brilliant but the unilateral guardrails make me frustrated beyond all belief. He has a folder of health information with like 100 days of Oura health data. This is a very logical thing that people would do with Codex or Claude Code. Gather up all your health data. I actually talked to a very very prominent person in tech about how they got into vibe coding and CLIs and one of the first things they did was reanalyzed some Whoop data, reanalyzed some health data and he correctly detected sleep apnea and went and got it treated. Like that is, it's not the cure for cancer, but that's like incredibly awesome and like very very good and exactly what you want to see. Who knows, maybe the thing that you detect early could lead to an increased risk of cancer in the future and that would be a really really big win for our society. And so, little bit tricky there. He says there's a private investment in the life sciences tool space. Guess what? It's not safe. Doing some code scanning for vulnerabilities, not safe. I get the safety, but it feels incredibly out of touch for a group of a few thousand people making total comp in the millions, telling me what is and isn't safe. Dario worried about inequality. I think he has to realize that he is the inequality and the unilateral gatekeeping feels whack as hell. I don't like it.

People are... people are very...

And like Doug O'Flaherty is extremely optimistic about Anthropic. Like he recognizes the power of the models in the business and has been a very very strong supporter. I feel like a strong user. He was one of the first people to admit to Claude Code psychosis and he's unhappy with the current situation but these things are very tunable. I'm optimistic with more disclosures and more fine-tuning and a smoother path. I think we can get to the good outcome here.

Last one says tell me about mitochondria. It's the powerhouse of the cell, right?

Chat pause. The chat pause is rough. Yeah. It's a screenshot.

But maybe the harness is just saying like sorry if you don't know that the mitochondria is a powerhouse of the cell like it's not worth my time.

I don't even want your...

I mean that's the thing with like the... you keep going back and forth. Good. Yeah.

Yeah. I mean, there are expensive questions and all of these screenshots are clearly from like $100, $200 a month plans and I'm sure the GPUs are on fire as they always are with any new model launch from a frontier company and it can make rational business sense. And so when everything aligns, when you're like, 'Yeah, we're maybe being a little bit too safe, but it's actually good for our business.' It's very easy to say yes to that stuff. The big question is like where do you get tested where there's a hard decision and it doesn't align with your business interest? That's always tough, right?

What's going on? Was there the new data retention policies as well? That also has to do with like does it trying to...

This one was funny because I assume that every tech company stores everything forever basically. I didn't realize that they don't. Not for these like enterprise use cases.

I know that the enterprises said that they wouldn't train on your data, but like when I go into any chat app, I expect to have my data from a year ago still there. Like I want... in fact one of my main critiques and frustrations with these apps is that when I go to them I want to be able to instead of hitting the search bar just go into the chat box and say hey remember a couple months ago we were talking about CrowdStrike and I had you pull up some data. Can you just go refresh that get the original thing? And a lot of times these apps are like I don't really have access to all your chats, but like the chats are clearly saved. But so I understand people are upset about this, but it didn't fully clock for me. Why I understand the training thing like the but...

Yeah, and they're very explicit. They're not using the data to train.

They're not. Okay. Oh, well then that's good. So the steel man I believe was that you need to hold it for 30 days because companies probably international companies competitors will set up a ton of shell corporations and send out like pseudo random queries over at random times over random accounts through VPNs and they will triangulate something that is useful to distill or learn from the model. And so by keeping it all, you can now run analyses and look at, wait, is there a pattern where 25 different accounts that seem completely unrelated all seem to be triangulating the same question? That seems reasonable to me. But stay out of my data. I'm built different. I'm not distilling anything. I don't know. Anyway,

I think it's time.

Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. And speaking of AI agents, we have a founder, a company. I don't know if we should call it an AI agent. What are we calling it? FZA. Is this... Are you creating a new category? Introduce yourself. Tell us what you're building.

What's going on, guys? Thank you so much for having me.

Of course, of course. Farza here working on Hey Clickie. Yeah. Man, what is it? It started as an AI teacher. Yeah. And I guess now it's an AI where you can essentially talk to your computer and it does whatever you want it to do from like...

It's personal super intelligence and you got there before the big man.

I love it.

Somehow I feel like the big man doesn't even know what they got sometimes, you know, and it takes the little guy to figure it out.

I love it. I love it. I'm always rooting for the little guy. So, like reintroduce the product because you went viral last week, but it feels like you've been working on this for a while. What's the nature of the team, the structure, the funding? Like what's actually building this? What's adoption been like? Like where is the product today?

Yeah, I started eight weeks ago. I just wanted to build an AI that could teach me Da Vinci basically while I'm like actually using Da Vinci. And I thought it was kind of...

This is DaVinci Resolve, the color grading and video editing suite that's free from Blackmagic Design. Got it.

Exactly. Yes. So like DaVinci Resolve, complicated program. Yep. One hour YouTube videos weren't in it. Let me just build an AI that can help teach it to me while I could talk to my screen and I could learn.

I've been there and put it out and I thought it was a really bad idea. One of my friends just decided to post it. So I posted it and it goes really big about eight weeks ago. After that I didn't keep working on it. But then the cool thing was I saw all these people, you know how when you put something new out there, you have all this emergent behavior kind of start happening. So when you let a human being talk to their screen, what did they start doing? Turns out they start doing a lot of crazy things all the way from watching anime with Clickie all the way down to like learning Blender with Clickie. Because it's so easy to just talk to your screen.

Yeah.

And that's kind of where it started. Yeah. About eight weeks ago.

Okay. So it started...

Yeah. Go ahead. Go ahead. I just want to hear about like the unhobbling path because I imagine that there's demand for... you know like these chat interfaces have existed for years where you open an app and you do the voice mode and then you have it read it back to you and there's some that are more polished than others but when I think about using a computer I think rearranging windows. I want anime over here and DaVinci Resolve over here and the YouTube video over here and I want to be able to puppeteer the mouse and the keyboard have full context. So I need to be taking screenshots every minute, every second, 30 times a second, 144 hertz, like what are we doing there? How are you getting the data in? And then what's actually under the hood? Because you need to process the voice actually produce an output and it's surprising to see a harness like break out of this so quickly.

Yeah. Yeah. It's actually so simple. We use GPT Realtime up front to give you like the first layer to give you like the really quick answer. Okay. But then if you want like a deeper kind of thought process over the image, you know, if you're in DaVinci Resolve or if you're in some complicated software, we now use Fable 5 actually by default. Yeah. So now Fable 5 is like absolutely mind-blowing in terms of how precise it is on screen understanding. So we use that now by default when you want to like understand something on your screen. But yeah, we only actually screenshot when you press a button.

Okay. Press the button. One screenshot.

Yeah. But it's really crazy because we can still detect the program you're on and stuff and that's already really helpful. Sure. Like if I know you're on Notion for example, and you're there for like 10 minutes, I can just ask you and be like, 'Hey, like what are you doing? Like can I help you?' And I think it's that sort of new modality that's been really exciting because that's something that's just not possible today with any chat interface.

Yeah. It's more like a co-worker walking up, like a co-worker just like being like present and like kind of like sometimes you don't need help until you're asked, right? Or you don't know.

I kind of describe it...

Yeah.

Yeah. I kind of describe it as like having this 23-year-old intern with like a decent like a new grad that's always watching over my shoulder and it's pretty much like seeing patterns in what I'm doing and then just tapping me and saying, 'Can I do that for you?' If I had that, of course, that would be awesome, but it'd be cool if everybody had that.

A lot of these frontier models are expensive. How are you thinking about the business model? Because it seems like you've built something useful. People should just pay 10% on top of whatever the metered rate is. But at the same time, in consumer subscriptions, flat pricing is very popular. But that introduces financial risk to you. You have to understand your costs and how they change. What do you think the business model will be as you grow the business?

Yeah, I mean believe it or not like...

People are very open to paying large amounts of money, like normal consumers, like large amounts of money for having better access to these models.

Sure. Different interfaces. So right now we just charge a straight up $20 a month. Okay. But even then there's a limit. You know, you get like for 20 bucks a month you get 150 agents on Clickie. Sure. But even that's very specific because once you pass that number, that's when we start losing money. So everything's done in such a way where it's pretty cost effective. Also, like just so you guys know, like just calling like Sonnet or Opus or Fable, it's kind of cheap overall. The expensive part is like agentic work, that's really expensive. Like just to give you an idea, on GPT-5.5, if you tell Codex right now to like go and click add to cart in Amazon, that costs 25 cents by just API. Yeah. And I know because I'm seeing the cost myself. Yeah. And so there's a lot of tricks to kind of reduce that. But no, overall there's so many tricks to making agents cheaper, more efficient, changing the model based on their quest.

And I didn't catch it. Have you raised for this or you haven't?

In the process.

In the process. There we go. There we go. If you're out there.

Yeah. But if you're in the process, that means like you didn't launch this and be like, 'I'm down to be losing like $5,000 a day,' you know. You've been focused on the economics probably earlier than you would have been if you had raised money out the gates.

I mean, yeah. I mean, I'm never the type of guy that wants to be losing thousands of dollars a day. So we can stop it early. But no, I mean, that's the thing about AI. Like, you know, if you... I've built a lot of social apps in my life, and for those, costs technically don't matter based on the number of users coming in. But in my case, for every like 10 new people I add, I'm kind of losing money or making money depending on what they're doing. So I kind of got to think about it. So yeah, it's kind of AI kind of accidentally making everybody better at business because it's kind of required.

So I'm thinking about the hilarious tradeoff in having an agent that applies a coupon code but winds up spending more money applying the coupon code than you save, because it's like, oh yeah, we put in this, it saved you 24 cents, but the API call was 25 cents. But how important to you will creating an ensemble of models that sort of maximize the parade of frontier be as you build this business? Because I'm imagining that any day now we're going to get somewhat useful on-device models on Mac from the new Siri models. The on-device models, those will probably be very limited in what they can do, but useful for some things, and that's free for you. Then you'll have open-source, you know, legacy models, GPT-4 class stuff, and then you might only call out to a Fable 5 on demand. So do you need to build your own router, or is there a tool that you'll be using? Like how important will that be from the interactions that you're seeing?

That's a great question. You're pretty much asking like what's the harness? And we just built our own. Because technically like this is all so early where there's nothing to use off the shelf. Yeah. You have to think deeply about it yourself and then build it yourself. So, for example, let's just say, you know, you're on Clickie right now and you're saying, 'Hey, Clickie, I want you to actually research the latest in the Iran war and put it in a doc for me when you're done.'

What now? Like, should it hit Opus? Should it hit Codex? Should it hit like...

It actually depends on the day, and we just route them ourselves. So, yeah, we use like four models right now underneath the hood.

And do you have a model that's doing the routing?

So GPT real-time actually does the routing.

Oh, interesting.

Yeah, that's something that we figured out that I think not even the OpenAI team really knew, and they hit us up about it, which is it's a great router. It's so good at like because it's so good at tool calling. Yeah. That means it's actually really good at routing requests. So for example, we have this tool called Fable 5. So if a user asks something that is a heavier pixel task, we call Fable 5. If it's more of like agentic work, we call GPT-5.5. And so it's kind of all being done in the background. But that's the kind of magic of the product right now, where it's like most people who use our product have never used an agent before. They don't even know what Codex is. And so for them it's magical, where it's like, oh, I'm just talking to my computer and it's doing the thing. That's awesome. That's what they want.

How do you think about the tension between, I think, you being a generational media talent and then like startups? Because I actually feel like this is our first time meeting, but I've seen your videos over many years at this point, and like you're just really, really, really, really good at it. So much so that as like somebody who's in media, I'm like, 'Well, I kind of want you to just do that podcast.' And I don't say that normally. Normally it's the exact opposite, where it's like, 'Hey, you shouldn't do this podcast. You should just work on your company,' you know, or whatever the thing is. And they obviously feed into each other really well. Like you have an edge, you can get attention for free, you know, just investing a few hours making a video, whatever. It's a very, very powerful skill set. But how do you think about that tension?

You know, it's funny, like I've been making videos for like 15 plus years, and I...

Overnight success.

Second time.

Yeah.

I always just see this as a thing I get to do for fun on the side while I get to do the main thing, which is like actually build stuff for people. At the end of the day, like I am painfully familiar with how bad of a business like making videos is and making movies is and making music is. Like I know how bad of a business it is firsthand. And so I know, but I know more than anybody the power of getting in front of a billion people every single month when there's a good engine underneath, a good business engine underneath it that's powering something else. And so I fully intend to do that. So if I have this media ability, I'm glad I got it. I think...

It's like sales.

Yeah. Sales, really scalable sales.

You got to be good at sales. WWDC, some movement on interoperability in iOS. Still feels like the Clickie iOS app is probably on the longer term and will be stuck in the walled garden for a while. But what I'm interested in is that do you see just a really, really solid market? Because there's no DaVinci Resolve iOS app that I'm aware of, and certainly people don't... there are like prosumer sort of professional tools that really only exist on a desktop or a laptop. And so are you interested in like going and hacking on crazy workarounds to build something that like maybe makes people a little upset in Cupertino but gets you into that more casual mobile space? Or do you think that you just want to focus on desktop prosumer, you know, desktop apps?

No, I want it all. I want when you talk to your computer, whether this is your computer or your computer is this computer, I want to be an interaction layer on top of it. That being said though, I have no interest in necessarily being like an OS-level controller, for example, like kind of like what Apple is doing right now. No real interest. For us, most of our customers and most of our users are essentially connecting like 15 integrations to Clickie, from G Suite to Dropbox, and doing work with it. So I'm a lot more interested in like that reality where what if I can talk to my phone in the morning and just say, 'Hey, look through all my emails and send me a brief when you're done.' And I can just talk to my phone and do that. I'm interested in that stuff, which is stuff I don't think Apple is going to do. Personally, they're not going to make like connect these 15 places to my Apple account and do work with it. I just don't think they're going to do it.

How do you think the health of like open ecosystems in desktop software is broadly? Because there's two ways that you could like update an Excel file, or there's actually probably a bunch, but you can puppeteer the mouse, move over, click, type the cell, save, you know, or you can just go edit the underlying CSV file in like raw text and then just refresh the front end. And I imagine one's way cheaper for you. So you want to like lean into getting the MCP servers, the APIs, the file writing, like the CLI, you know, interaction down. But do you think that there will be companies that lean into that or companies that fight that because they want you to stay, you know, mouse and keyboard at all times?

That's a good question. I don't think so, because at the end of the day, what Clickie is doing in the background, just so you guys know how it works, we literally took the Rust binary that's in Codex and we package it with our app. So that when you actually call the Clickie agent, you're just calling a subspawn of Codex. Yeah. And so this is on purpose, like I just want to use the best model and the best kind of thing possible. Yeah. And so no, I don't think that's going to end up happening. In fact, it's better. For example, if you ask me Clickie right now, 'Hey, how do I actually add a formula to this Google sheet here?' There's two answers there. One answer is let me show you. The second answer is I can show you, but do you want me to do that for you? Sure. And I think that's where we're going to start going with computers, where your computer's just going to say, 'Can I just do this for you? Like I see you doing it. Like I can just do this.' So that's where we're kind of...

Well, good luck with the fundraise. I'm sure you'll be back on the show soon. Let us know when it closes. Incredibly excited for you. I love watching you win and have fun in the process.

Yeah, it's great to meet you.

Congratulations. We'll talk to you soon.

Have a good one.

Later. 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 up next, we have Trent from Side Talk. He's a creator and co-founder of Side Talk. He's in the waiting room. We'll bring him into the team in Ultradome. He'll turn Knicks fandom into one of the internet's most recognizable sports media brands. How you doing? Take us through. How is New York?

How is it going?

Yo, it's crazy out here. I'm not going to lie. I was about to do this interview from my apartment and then I realized, hold on. Has anyone done a TVPN interview live from the streets of New York? You got to go to the sidewalk. The founder of Side Talk. Amazing. For those who don't know you, take us through your media empire. Take us through your strategy. Break it down for us.

Okay. So, I have a little company called Side Talk. You might see the logo, and pardon the potential loss of voice from this Knicks crowd, but you know, we kind of pretty much run around New York City and let people do and say whatever they want into our microphone. We created the bing bong trend years ago. We created these Knicks videos. Unfortunately, there's a little bit of chaos outside of Madison Square Garden due to us, but yeah, we pretty much let people say what they want in New York. And it's pretty fun and entertaining.

What's the secret to a good street interview?

You got to keep it shareable and engaging. It sounds obvious, but like why would you want to watch an interview of someone talking about something boring or low energy or anything like that? What would you want to send to your friends? And that's kind of the principle.

So you ask people about like language model diffusion and like token pricing and all private credit.

Always, always, always. That's what we love talking about.

Yep. That's what the people want to see. We're going to start talking about that outside the Knicks games, I think. Yeah. So I understand that a lot of the man-on-the-street interview format these days, it can be very prepped. There's a PR person that's pitching some successful business person for the 'what do you do for a living?' It looks candid, but in fact it's staged. Do you ever participate in that, or is everything candid? Is that part of the brand?

We're 100% natural on the streets. You don't know what you're going to expect.

Organic. Okay.

Yes, sir. Organic. But it's really cool, too.

Yeah. Then my follow-up is like, then if you aren't prepping and understand who you're going to be interacting with, like how do you vet, like where is the bar? If you see somebody walking and they have a baseball hat on and they probably don't want to be bothered, is there some sort of social contract where you shouldn't... is there a doom scenario where everyone in New York is getting asked 'what do you do for a living?' 15 times when they walk to go get their morning coffee?

Yeah, honestly it's a bit of an epidemic going on. I actually am kind of scared that I'm going to get pulled up on right now and asked what I do for a living or what song I'm listening to. Yeah. But the people of New York, I think they distinguish Side Talk a little bit from that. They know we're not there to ask them something like, I don't know, so cookie-cutter like that. And I don't know, now people come to us when they see the microphone, which is great. And yeah, we just go with the flow.

How do you think about monetization? Short-form monetization notoriously hard, but you have some merch. Break down like the business side of the business.

Yeah, it's actually very interesting. You would think that I would have made a dollar off of TikTok by now. I don't think I've ever gotten paid from TikTok or Instagram. Literally not a dime, which is fine. It's cool on TikTok though. But no, it's cool. We do a lot of branded work for companies. So we've worked with everyone from the NFL to Netflix, Nike, Google, Amazon, creating a lot of content for them. So they'll come to us with a product or an event that they want to highlight and they say, 'Hey, you know how to get clicks and views,' and we pretty much apply our formula to that and then create a really good video for them.

Okay. I have like a hot take and I want you to walk me through whether you agree or disagree. I think you should just do a mid-roll ad in a three-minute Instagram reel. Because I see the branded integrations. It's like, oh, there was this example on Subway Takes where someone's take was Android's better than iPhone. It went massively viral on r/Android. And then Google was like, 'Oh, we'd love to work with you on another take that's the same thing, but it's branded.' And those sponsored takes, they often don't go as viral. It's hard to get branded content to go viral. But in some of these longer three-minute videos, if I'm locked in after two minutes, I would sit through a 10-second mid-roll of like, 'Hey, this was brought to you by this. Thanks for sponsoring this video.' And then it's just all organic content around it. Does that work? Is that already happening? Are you thinking about that? What's the deal?

Definitely. One thing we really like doing is kind of like a natural integration. So we just did something with Nike, which is really cool, where they hit us up for these Knicks-colored shoes. Who better to get word out about these colors than Side Talk? So we had people wear them in the episode. We were talking about them. We had them react to them. I think that feels authentic because that's kind of something we would do anyway. And it did really well.

That's good. Predictions for tonight.

Let me know if you're losing me, by the way.

A little bit. We are losing you, but the energy is still there. Predictions for tonight are...

Knicks in five.

Knicks in five. What's the plan for covering the game? Like, is this performance... but isn't it kind of in your best interest for it to be all seven games? Like, you know, more attention, like you kind of want... we obviously want your Knicks to win, but you don't want them to win too fast.

If we can guarantee a win in seven, I would like seven. If we can guarantee seven, that would be great. But listen, we need to get the win more than anything.

Okay. What is the process of a shoot day? How early are you getting there? Who are you bringing with you? How big is the team?

Definitely. It depends on what we're doing. We do such a wide variety of stuff. We can randomly go to a hot dog eating contest in Coney Island. We can go highlight a random character in Brooklyn. We can go obviously film these Knicks games. So it's pretty dependent on what's going on. But with the Knicks games, we kind of show up in like the third quarter as it's ending. Unfortunately, we can't bring our equipment into the stadium. So we low-key just have to stand there and watch the game on our ESPN app and hope that the Knicks win or we hear, you know, someone discord, something like that. And then the chaos erupts. We go into the chaos. We're there for like hours and hours at a time. And at the end of the day, people see, you know, 55 seconds, but we're out shooting for like eight hours throughout these playoff games.

Got it. Wild. Well, thank you so much for coming on. We appreciate you. Good luck. Yeah, we'll feature some of your videos in tomorrow's episode from tonight. Good luck out there. Have fun. Be safe. Yeah, we'll talk to you soon. I'm hoping for Knicks in seven, personally, but can't guarantee it yet. So have fun out there. Thank you for this walking talk.

Thank you guys. Appreciate you.

Yeah, great to hang, dude. Appreciate it. Thank you. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. We will be joined by the CEO of Snowflake in just a few minutes. Thank you for tuning in. We need to move on to the next story. Canon says, 'The cashier at Home Depot just asked if I want to round up to support the SpaceX IPO.' SpaceX IPO is going to be big Friday. We might have a surprise guest. It's going to be fun. Also, there's this crazy meta story going on. Not meta the company, but like a story about a story behind Tai Morse. He's going all out trying to get an Elon interview and it's been fascinating watching him build the craziest set in podcasting history. We're rooting for you, Tai. Good luck. Hopefully you land it. It is the quiet period, so it might be difficult, but I think that there's a plan to extend the effort and everyone's rooting for it to happen. It's been viral on X many, many times. Also, Bloomberg's reporting that the SpaceX IPO is 4x oversubscribed. Do they know that already? Do you get that information at this point? That's really good news for the market, for the overall. There was an interesting article. I mean, we can go through some of this. I think this was in The Economist. SpaceX, talking about, where is it? Can the market swallow SpaceX, Anthropic, and OpenAI? Watch out for indigestion. But they talk about the float, the free float. This was very interesting. So obviously the company might be worth a trillion dollars. How much of that trillion dollars is actually actively being traded? Like sure, Fidelity might at any point in time have a price at which they're willing to buy more and a price at which they're willing to sell their stake. But founders are often locked up. Founders often want to maintain control. Employees are locked up for a certain amount of time. Certain investors might be locked up. Unless you're Bill Gurley, don't try and lock him up. Nobody can lock him up. He's a wild man. But the float is important because if it's a trillion dollar company and the CEO passed away a generation ago and there's all financial managers and it's only owned by hedge funds, this was the story of Take-Two before Strauss Zelnick came in. Take-Two, the makers of Grand Theft Auto. It was entirely held by shareholders, by financial investors, and they were unhappy with the management team and the management team didn't have any equity. And so he was able to raise his hand and say like, 'I'll run this thing.' And they were like, 'Absolutely, thank you.' And they let him take over the company without really putting anything up. He didn't need to do a hostile takeover, like bring a bunch of capital to bear to get control of that company and become the CEO. And it's been a fantastic success for him and a fantastic success for Take-Two shareholders who stuck around for the Strauss Zelnick era. But the float matters. And at Microsoft it's 100% floated. The free float is 100% because the founders have moved on and divested and they're not locked up. At Apple it's like 99%, Broadcom's also at 98%, Nvidia at 96%, Amazon's at 91%, only Jeff Bezos is considered sort of off the table. Alphabet at 90%, Tesla at 89%, and Meta is notably, of the big tech companies, the lowest free float at something like 88%, 86%. And the reason for that is because Mark Zuckerberg has a lot of control. If he sells his stake, he loses control. So no one's expecting him to sell even if the stock goes way up or whatever. Like he's going to maintain his position because he wants to run that company. Now SpaceX is in an interesting place. So 13% of Meta shares are owned by Mark Zuckerberg. SpaceX plans to release locked-up shares in a series of tranches. If its IPO issues $75 billion of shares valuing the firm at its hoped-for $1.8 trillion valuation, the initial free float, because if you buy the IPO, you're not locked up. You can sell the next day if you want. But this means technically it's not like whether somebody's investing through JPMorgan, Morgan Stanley, or Goldman, all these places, like technically you can go and sell, they just might restrict you from other IPOs. So you would expect like serious, and this happens on all the different apps, you know, Robinhood, Public, etc. If you're buying into an IPO, they basically are asking you nicely, do not sell. Don't flip. Don't flip. But people can't. And so with how many retail dollars are flowing into this, I expect a lot of people that are buying the IPO to start trading almost immediately. Exactly. But importantly, it's only 4% of the free float. So only 4% of that 1.8 trillion, it's a lot of money, but only 4% will be really free trading. And then of course during the IPO process, you're vetting investors and you're trying to get the people that will hold forever. And Elon has done a fantastic job of that with the indices. So he's gotten the NASDAQ, the S&P, and a few others to commit. So although NASDAQ has already shortened the seasoning period before index inclusion to 15 trading days, the Russell slashed its waiting time to 5 days. Most share indices weight firms in proportion to the value only of the shares released for public trading. And this is important because people look at the S&P 500 and say, 'Wait, S&P 500, a two trillion dollar company coming into that. Your weight if you're just buying the S&P 500 is going to be more than 1%. It might be in the single-digit percent. That's a lot.' And we've been talking about the S&P 499 for the bears, right? In fact, the initial weight in the S&P 500 will be around 0.1%. Because it's just that 4% free float and then it increases over time as the shares get unlocked. We actually have a chart here of how the lockups work. And it takes basically the full year, almost two, for everything to get unlocked. And it's also triggered based on share price appreciation. So if the shares trade up 30% or more, then more shares become unlocked and the road to 100% lockup ending happens slowly. And so just a little bit of an interesting deep dive into how the SpaceX IPO will fare. Anything else to talk about on that story before we move on?

No. Apparently, Senator Warren has urged the SEC to halt SpaceX's IPO, citing governance risks, Elon Musk's control, and potential foreign, especially Chinese investment concerns. She also highlighted SpaceX's role as a US defense contractor. Senator Warren has never met a business that she liked, I think, except maybe large financial institutions. Who knows? She likes those. Well, we have our next guest in the waiting room. Sridhar Ramaswamy from Snowflake. He is the CEO and we're very pleased to be joined by him. Welcome to the show. Thank you so much for taking the time. How are you doing?

I can imagine you're doing well. The company is doing fantastically. I am interested to hear, I mean obviously there's been an emotional roller coaster, but I'm more interested in the data that you're seeing that shows acceleration, so much promise, so much opportunity in this particular business.

Has there been any movement downstream for Snowflake? Whenever I hear the story of a data lake, a properly managed data warehouse, as an entrepreneur even in a small business, I think that sounds amazing. That sounds like the dream. And then I see the companies that actually have the resources to onboard be immensely large and obviously that's fantastic for your business. But I'm interested in what the future looks like. Is there a world where a 10-person startup with AI agents and these pipelines that can be built much faster can actually set up their business and then not have to go through a cumbersome migration in the future?

Got it. Where are we in the path to like fully automated migrations, fully automated new integrations? It feels like every new model release, we're like, 'This is the one. This is the one. The non-technical CEO is going to be doing the job now. He's just going to say, hey, we have two systems. Go fix it. Go integrate it. Get it into Snowflake.' It's going to happen, and then reality sets in and there's not just token costs and cost of delegating to AI, but also just the real world of other decisions that need to be made that might be outside of the context. So what are the remaining challenges that come up when you're building a new integration or working on a migration?

Yeah. No, that makes sense. What is the biggest lesson that you or the company have taken forward from Frank Slootman's era?

Then how is the role of the sales rep changing, the sales associate changing? Are you looking for any different skills or are you doubling down on what worked in the pre-agentic AI era?

Can you walk me through the partnership with Amazon Web Services? I'm sure you compete in some categories, but how did this come together? What does it mean for the future of your business?

What's been your strategy for trying to predict AI progress? Because you know, we have people on the show every single day, somebody from a lab, somebody that's an investor, you know, customers of the labs, things like that. Everyone has a different opinion. You have to weight them differently based on their incentives. But you're running a massive company that's leveraging these tools, but at the same time you want to understand what the capability will be one year out, two years out, and it feels harder than ever to actually be able to predict that.

Are you positioning Snowflake as a company that's in the token path or in the token stream? I don't know if you've heard this phrase that's sort of new coinage for a position in the AI value chain. And it feels like you're firmly in the token stream, in the token path, but I'm wondering about what you think about that category. Is that narrowing you? Is that valuable to communicate to customers and investors? What do you think of the phrase like 'in the token path'?

So my last question is, you said it's a bad time to be making two- and three-year plans. How far are you looking into the future? Do you have a one-year plan, a three-month plan? What...

Well, congratulations. Thank you so much for taking the time to get...

Yes. Stay strong in the token path.

Goodbye. Let me tell you about...

Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Yes. Apologies for the technical issues cut out. A lot of people are saying, 'Is this AI? It's not AI. Is this AI?' There was some type of clip.

I've never seen that exact technical failure before where it cuts out entirely. We've heard scratchy audio. We've heard degraded video. The video was coming through crystal clear, but the audio was cutting in and out a little bit, but I think we got a lot of good stuff. Coco, they should have called the AI agent Frosty Snowflake.

Frosty...

Probably intellectual property.

Frosty the agent...

...is a jolly happy guy.

Coder. Yeah. Something.

Anyway, Citadel Securities, former employer of mine when I was an intern, wrote a post on tokenomics. They're one of the most significant hedge funds and they just dropped tokenomics. I have it here. I have the second printout. Tyler, you want to bring that over to me? It's not what you expected is what they say. So they said, we've argued for some time that agentic and complex workflows delivered by frontier models would be expensive to run, constrained by physical bottlenecks, and vulnerable to unrealistic expectations of frictionless deployment costs. That judgment now looks less contrarian than it did when we set it out in February. They're taking a victory lap over at Citadel Securities. Amazon has now removed its token leaderboard. Microsoft has canceled Claude Code subscriptions, and there have been multiple reports of unexpectedly large token bills. The salient point is that even the most powerful technologies must pass through the prosaic discipline of cost curves, capacity constraints, and marginal returns. Adoption is therefore becoming less about what frontier models can do in principle and more about the price and scarcity of the inputs required to make AI operational at scale. Compute, power, cooling, memory, bandwidth, and inference budgets are real and binding constraints. They go into economic theory talking about the three functions that prices provide: they signal scarcity, create incentives for substitution, and ration scarce resources toward their highest value uses. This is the stuff that goes viral on TikTok. We're deep in it. You heard of keeping the viewer watching. This is the most important thing. You read the Citadel Securities macro strategy report. But they do say they ration scarce capacity toward the areas where marginal productivity in AI justifies the marginal cost of using it. They're talking about ROI maxing for the economy at large. Simpler models may be a more cost-effective productivity-augmenting pathway until physical constraints are eased. We hence see growing signs of a bifurcation in frontier versus everyday AI usage. They actually shared some data here around token expenditure index dropping, the log growth rate declining, and so folks are pulling back a little bit and shifting towards cheaper models as they figure out a new workflow, something gets unlocked, and then they say, hey, we got to actually make this ROI positive. So that's the latest from Citadel. Let's see what Amazon Web Services is saying because they're blacking on the timeline. They said more AI-generated code doesn't make your team faster. It might actually slow you down. Crazy post from AWS.

Would have expected it from like some AI thought leader, podcaster, Twitter person...

AI bear.

But yeah, it's funny coming from the AWS cloud gold check. It's funny because it's also like if you were to write this...

I think a lot of people would write this as more AI-generated code doesn't necessarily make your team faster.

No, just perfect.

No, more AI-generated code doesn't make your team faster, which is just like factually incorrect for like a lot of teams that we know, right, that are like we're actually moving faster than ever. Also, okay, read the next post in this thread. It's like very clearly AI-generated. Okay, the real bottleneck was never writing code. It's releasing it, debugging it, keeping it running well. So when Honeycomb.io CTO Charity Majors set a productivity target, she didn't chase 10x. She chose 2x and built from there.

You think this is AI because the choose 2x and ampersand built from there.

I think it was human edited, but like that...

That syntax feels a little AI. I agree. I agree. Her team also skipped the mandates and built a set of AI values instead. Every AI output has to have a human owner.

If you don't want your name on it, it's probably not good work.

Yeah, that's reasonable. Quality first, quantity second. So they had a podcast about it. Coming from AWS, that's a wild statement. This is very funny. But yes, also funny with the backdrop of a $500 million budget.

Well, yeah. And it's funny because Amazon is of course one of the largest investors in both OpenAI and Anthropic, the leading coding model provider.

Hey, they didn't say more AI-generated posts don't make your social media team faster. Entirely possible it sped them up. They certainly got 14,000 likes on this. This is a banger post from a corporate account. Rare to see those numbers put up on the timeline from a corporate account. So, congrats to the team over there putting up some fun numbers. Shriram Krishnan, I don't know how to differentiate them. He's a Kernighan Jackson.com investor, advisor to Bending Spoons. Not the former A16Z GP who worked for the government for a little bit. Shriram Krishnan says, 'Not many Silicon Valley VCs took our Bending Spoons intro in 2022. These VCs thought it was beneath them to be associated with the company. From 2024 onward, many clamored for an introduction to sell their portfolio companies.' Bending Spoons is going public. So, Bending Spoons will be a public company and they own a number of historical companies. They own AOL and have done a bunch of other stuff. Eric Seuford broke down the...

They literally own America Online.

They own America Online. And it must be electric. I can't get into my mobile dev memo email. I'm just going to skip this and move on. But you can, Eric Suford over at Mobile Dev Memo wrote a breakdown of the... wrote a breakdown of Bending Spoons' filing to go public. The Italian rollup operator that owns among many other properties AOL. They own Eventbrite and Vimeo. Don't they also own Evernote or am I getting that mixed up? Someone owned Evernote and the Evernote employee growth chart looks like a fast takeoff like post-2020 COVID. They went from like a thousand employees to like almost 6,000 employees or they tripled or doubled the workforce. And Bending Spoons, you know, known as sort of like the operational excellence, almost like a private equity firm. They're going to do cuts, they have done a few cuts, but like the actual headcount has held fairly stable. And I think the business has gotten to a much better place. So interesting to see there's a time and a place for being aggressive, expanding when there's a big moment and the market's up, and then there's also a time to consolidate and focus on operational efficiency.

Why is this guy so obsessed with GTA? John, have you ever played GTA?

Any GTA? Maybe like...

GTA 3, GTA 4. Maybe like for like two minutes.

Two minutes. And I was like, 'Wow, you just... loser. What a loser. Never gamed in his life.' I couldn't get into it. I couldn't get into it.

Yeah. You're a Rust guy. You're everything. Like I just... Even as a child, I was like, 'Okay, everything that you can do in this game, you can just go do real life minus.' No, you can't. It's all crimes. Wait. Jordi turned it down. He turned it down. There was something like 10. Maybe I'm pure of heart and I don't enjoy... I was like, okay, like crap. They were going to let me play for like 15 hours, 10 hours, maybe five hours, but I turned it down. They actually wanted to pay me. They wanted to pay me to play. Yeah, they wanted to pay you to play. Strauss said actually I would love for you to play. Um, no, one of my first jobs I was a video game tester. I got paid to play video games. Best job. Play video games all day. They got you hooked. Yeah, they got you hooked. No, I was already hooked. I was elite. So yeah, you go play the games while it's in development. You file bug reports. You're a quality assurance tester, but basically your job is to play video games all day. Worked with a guy who was super chill and he was just like, 'This is my career. I'm happy with this. I'm a video game tester.' And then I checked in with him a couple years later and I was like, 'Hey man, how's the video game testing business going?' And he was like, 'You know, I actually had a shift in my career. I'm a DVD tester now. It's even easier. So you just sit there, watch the full movie, and then tell the people like, yep, there were no audio bugs or there were no drop frames in the whole movie. I sat there, I watched the whole movie and it looked fine. Thumbs up.' And then every once in a while he'd be like, 'Oh, I was in the menus of the DVD and when I went to behind the scenes footage, it wouldn't play the correct video. It had the title for, you know, interview with the director and it actually played interview with a cinematographer. So you got to fix that. These things happen, like UI bugs pop up in DVD menus.' But what a wild job, DVD tester. It's a good one. Good one. Anyway, this fellow is obsessed with GTA 6 and he's doing anything and everything to understand whether or not GTA 6 will be released on time. There's two methods here. If you want to know if GTA 6 is going to get released on time, you can just shake down Strauss Zelnick for the truth. Or you can do what he did, which is he set up acoustics around the Rockstar headquarters to measure audio levels near a meeting room. And he discovered that his equipment had disappeared. And when he returned to check on the latest data, he didn't stop there. He started camping outside, monitoring traffic and tracking the number of cars and their estimated value. Oh, there's an executive in town. That means something for the GTA 6 release date. Uh oh, there's more cars coming in. Probably a lot of people working late nights getting it out. Burning the midnight oil. And so he believes such data can be used to speculate on how many executives may be spending time at the HQ as opposed to regular employees and that an increase in both traffic and high-value vehicles could indicate trailer 3 is coming. He's also considering an even more insane idea, which is to measure the amount of oxygen in the area to monitor how many people are around. And he did it. He started monitoring the oxygen around Rockstar North. And he believes trailer 3 is coming soon after noticing that oxygen levels dropped to about 20.3%. We actually need to use basis points this time, from 20.3 to 20.04 after 5:00 p.m., suggesting increased oxygen consumption in the area after normal working hours. He's also monitoring the number of cigarette butts. I thought it was just a GTA 6 fan. I'm excited. Everyone's excited. Maybe it's a Rockstar or a Take-Two shareholder. You had a different theory. What was your theory on his motivations?

I don't believe that people are going to go to these lengths unless they're making money on it.

Okay. And how would he make money?

There's a lot of like prediction markets with, you know, plenty of volume.

Yeah. Could be trading the stock directly, but could also be betting on a prediction market. That's...

Oh, yeah. If there is theoretically, if there were to be another delay, I'm sure the stock would probably react to that.

Yeah, absolutely.

It is very, very interesting. Fun story.

A hedge fund should hire this guy to do true other types of detective work.

Yeah, it almost feels like it's going over the line. Maybe illegal. I don't know. Like if I would be very frustrated if someone was standing outside of our Ultra Dome with a measuring everything to see if we're going to interview Matthew Prince yet next. And we are because he's in the waiting room and we're bringing him in to the TBPN Ultra Dome. Welcome to the show. Matthew, thank you so much for taking the time. How are you doing, gentlemen?

Good to see you. I'm doing well.

Great to see you.

Great to see you.

What's new in your world? You made some acquisitions. You made an acquisition. Take us through it.

Yeah. So we bought a company called Void Zero which makes Vite, which is one of the most popular developer platforms that's there. Just an incredible team. Evan You, who's the founder, is just a first-class human being. Someone who our team is super excited to work with. The team that he's assembled is just great. And I think that this is increasingly becoming the platform that is being used to power a lot of the agents that are running around the internet and a lot of those agents are running on Cloudflare and so we think it's just a really natural combination.

How simple is the synergy? Is it you'll funnel those 130 million users who download Vite every month? I think it's 130 million weekly downloads. Wow. Yeah, that's a lot. Into, you know, preferring Cloudflare, defaulting to Cloudflare or is there more synergy under the hood around developer integration, company integration? Like how are you thinking about this playing out?

Yeah, we plan to continue to leave it as an open source project and support it and invest in it that way. We want to integrate it closely with Cloudflare's developer platform and make sure that Cloudflare is the best place to run any sort of Vite project that you have. But it'll work in any of the different platforms as well. And so we just really wanted to make sure that Evan and his team had the support to make sure they could continue to really invest in what was just an incredible platform. And we think that that is going to drive more developers to Cloudflare's Workers platform as well.

What are the headaches for developers these days? I know everyone's concerned about token costs and token budgets. Sometimes that doesn't show up for the developer. It's more like the CEO that's worried about it. Is uptime more difficult to maintain? We've been seeing screenshots of different uptime tracker status pages that have more and more red and yellow on them. Like what's at the top of the stack and how are you helping?

Yeah, you know, I think that you need a different architecture than we've had to build sort of the last generation of applications for what's coming with agents. If you imagine, you know, there are about 100 million knowledge workers in the United States. If all of those knowledge workers had one agent which was working on their behalf, and each of those agents was running in a container, a traditional container like something you'd get at AWS or Google Cloud, the amount of just CPU resources that would be needed to run just those agents, assuming they've just had one agent per person, is about 50% of the total CPU capacity that's generated by all the different CPU manufacturers that are out there today. And that's just the United States knowledge workers. If you take that to the world, then it's several times, you know, 30 or 40 times the capacity of GPUs and CPUs that are existing today. And so what we really think is that as these agents are creating code, you need a different platform for it. And Cloudflare Workers was built not on containers as much, but on something called isolates, which is a much more efficient technology. And so what we're seeing is that as people are building these agents, as they're using them, it's just a much more natural place to be running them. And it's I think why you're seeing more and more of the big AI labs have Cloudflare as the preferred target for where their code gets run. You know, OpenAI released a project for their enterprise users a little while ago that again is targeting us and we want to make sure that with things like Vite as first-class citizens on Cloudflare that we can help power that future because again it's not going to be kind of the same system that we built with the hyperscalers. It's going to be something different and again I think that we have a really good shot of building that different thing.

So can you help me understand more about the problems of like CPU bottlenecks and then maybe some of the solutions? I'm just thinking about like... I would think bandwidth would be an issue obviously, CPU load, but is there a world where we get to some sort of convention around maybe it's the robots.txt or just the user agent. And when Googlebot shows up or any other AI system, AI agent shows up, you're just delivering a... it's almost an MCP server, but you're just delivering something that looks more like a JSON package, something that's a little lighter, a little less CPU intensive. Is there a path there to optimization? It feels like we're in the era of like squeeze every ounce of performance out of everything. But what's actually going to happen here? Where are we just screwed or is there an opportunity?

No, you know, I think two different problems. So the first is if you're, as you ask, these different AI systems to perform tasks on your behalf, what has to happen behind the scenes, especially as those tasks get complicated, is that they need to be coordinated in some way. So if you say plan a vacation for me or something like that, what goes on behind the scenes is that there's coordination there and the best way to make that as efficient as possible. What agents are really good at and these various LLMs are really good at is actually writing code. And so that code needs somewhere to live. And the problem is that if that lives in a container, then you've got to bring in an operating system. You've got to bring in all the tooling and everything else. And that's actually extremely heavyweight. And so that's the first place that you've got both a CPU and a GPU bottleneck that's there. And so with something like Cloudflare Workers and isolates, it's just a much lighter weight system. And so that means that you can have more agents running on the same CPU infrastructure and be able to provide that. And again, I think that's why a lot of these next-generation tools are actually built using our platform. You mentioned something else, which is as these agents go out and interact with the rest of the web, that you want to make sure that that is done in the most efficient way. And so if they're pulling down all of the HTML from a web page and those web pages are designed kind of to be consumed by humans, there's just a lot of cruft on that that isn't necessarily as important. And so some of the things that we're doing are for those customers of ours that want to make sure their content is consumed by agents. We want to make sure it's as accessible as possible. We are automatically converting things into markdown, which is a much simpler system that saves you a ton of tokens. It saves you a ton of processing. It means that your context window can fit more useful information into a context window. So I think there's a ton of optimizations and we're helping both on the developer side as well as on the content side making sure that we can have these agents be as powerful as possible and get as much done as possible.

John Gruber total victory. You know, he invented Markdown.

I did not.

Rubinator. Yeah.

No way.

Yeah. Isn't that amazing?

Yeah. And I mean it's one of these things that just, you know, it turned out it was ahead of its time but it's such a key for making sure that we can take information and make it, you know, as compact as possible.

John Gruber created the format for God. It's a funny, funny world we live in. Talk about, it was last week you guys announced that the threshold had been passed around agent versus human traffic. Talk about that moment. Did it happen sooner or later than you expected?

Much sooner.

Yeah.

I mean it was, at the end of last year, so the end of 2025, I said that I thought that we would pass bot traffic, and that's across the board. So that's like Google's crawler but also the new agents which are coming out, I thought would pass human traffic by the end of 2027. About 3 months ago I revised that based on the traffic that we were seeing to say that it would actually be in the first half of 2027. And so the fact that it actually happened in the first half of 2026 is just has just been extraordinary. And it just shows how quickly this is growing. And the real key here is that I think that if you or I as humans were researching to go buy a digital camera or something, we might visit five websites and do a little bit of research and some price comparison. You just watch as you use these agents. They have boundless attention to be able to just go to maybe 5,000 websites to find exactly what you're looking for, the best price, the best delivery, the best service, and everything that's there. And so that's just driving an enormous amount of consumption of the internet. At the same time, the other thing that's happening is that for a long time since about 2015, the web has kind of plateaued. There were more websites that were being shut down than were being created during that time. In the last 18 months though, we're back to the web growing at a rate which is exponential and it looks sort of similar to what was happening back in the early 2000s in terms of growth of the web. And so I think you're seeing both more consumption of what's online, but you're also seeing more things online as it goes forward. And so in both of those directions, that's going to continue to just drive more and more use of the internet. And I wouldn't be surprised if going forward, say, 5 years, that bot traffic will be a thousand times human traffic online. And we've got to make sure that we make the internet work for that new future.

Yeah. Like every year we're just going to add another nine to the 99.999% of internet traffic is bots. Do you know what the baseline was like pre-AI? Were we at like 1% bot traffic? I mean I've said...

It was more than that. It was about 20% for... Yes. And it's, you know, Google was the largest and then obviously there's a lot of malicious things that run around online, but that was around what it was and it was pretty stable over the history of Cloudflare at least. So where we could measure it, so since 2010, you know, it was always kind of around that 20% range and then it's grown, you know, in the last few years it started growing steadily and then it really accelerated in the first half of 2026. I want to talk about the inference stack. I guess like we're seeing two things play out, sort of a bifurcation. Like at WWDC, Apple's launching on-device inference. It's not going to be frontier but it's going to be usable for sure on your phone, on a computer. They can obviously go to their private cloud as well. And then you have like the new NVL72 models. There's stuff in between on Cerebras chip, fast but expensive. Then there's everything from, oh, it runs on commodity hardware but it's still pretty big, you need a real desktop for it. And I'm wondering about how you see Cloudflare fitting into that. It would be a logical extension to Cloudflare Workers to have inference on the edge, inference in different places. Like where do you see yourself offering inference, if at all?

Yeah. Well, it's actually kind of funny. Back in 2022, we issued a press release that there was a graphics chips company that we were going to partner with in order to put GPUs at the edge of our network.

Yeah.

That graphics chip company turned out to be Nvidia. And what was amazing was at the time it was just crickets. Like nobody cared.

Sure.