I see a large IPO moving on the horizon. You're surrounded by journalism. Your position. Overnight success. The place double right. Information order. Let's just roll. We're surrounded by... hold your position. Come on, get up. Trust the code. We are the founder of five co... I see multiple journalists on the horizon. Stand by.
UAV online. Double blaze. Triple blaze. Double kill. W... team deathmatch. We are triple blades. That's just wrong. Right. Clearing order inbound. You're surrounded by journalists. Hold your position. Strike two. Activate golden retriever mode. Market clearing order inbound. Five. I see on the horizon.
Today is Wednesday, March 11th, 2026. We are live from the TVP Ultradome, the Temple of Technology, the fortress of finance, the capital of capital. Although it's a fight, it's a knockout dragout fight. Where is the capital of capital? Most people, historians would say it's New York City. Mayor of Miami, Francis Suarez, is saying it's Miami. We thought we could make it happen over here at the TVP Ultradome in Los Angeles, California. But we're going up against some really strong firepower over in Miami. You got Google, you got Meta, you got Citadel, you got Starbucks now. You got ramp.com. Baby, time is money. Save both. Easy. Corporate cards, bill pay, accounting, and a whole lot more all in one place. You got Thiel Capital over there. There's a lot of folks moving to Miami. Should you count their entire legacy in the market cap of Miami Tech? I think yes. If you're going to consider the capital of capital, certainly there's a lot of capital flowing to Miami. And we will talk about this later in the show. Let's pull up the Linear lineup. Linear, of course, is the system for modern software development. 70% of enterprise workspaces on Linear are using agents. And we have Apoorv Agrawal from Altimeter coming on to talk about consumer AI. Owen from Block is coming on. We're revisiting the layoffs but also understanding the strategy. First person from Block to come on the show. Jordi's coming on with a massive fundraiser for Replit, and then we got an amazing lightning round for you today.
So Oracle had earnings yesterday and it was an absolute blowout. The stock's up 10%. The god candle.
The god candle. I like that. It's still way down from the crazy highs of last September. So it's a $470 billion company now. Not bad. But not quite the almost $1 trillion company that it was last year. But they're still up over the last 12 months. So they've sort of ridden this crazy curve up. The stock basically doubled, then it sold off by half, but it's ticking back up. And the main thing is that, like, you know, was it overhyped, underhyped? I don't know. But this earnings was important because a lot of people were worried about the capex, the infrastructure buildout. Was there going to be demand? What was the timing of...
Timing, timing was the big thing because when you had that initial announcement around the RPO last year...
Yep. The criticism was, 'Hey, you're basically going to try to build AWS in like two years.' And no one, like, I mean obviously the market at the time was quite excited about it. But there was some concerns around just how aggressive the timeline was, and so seeing them hit their timelines at this stage is super important.
Yeah, it was like $500 billion of RPO, which is like AWS-size numbers, and that's a lot of what I think is going on here. That's actually the dynamic, like the market is demanding another AWS. And so let's go through the topline numbers first. So analysts estimated $86.7 billion on revenue. Oracle said that they will hit $90 billion for fiscal year beginning in June. Now, people don't care as much about the topline number. Everyone's obsessed with the infrastructure business. So the previous quarter showed growth of 68%. That's not bad. Analysts said this quarter we're looking for 79%, and Oracle delivered 84%. So they beat estimates. That's why the stock popped, of course. The infrastructure business is particularly important for two key reasons. So first, Amazon, Microsoft and Google, like there's more than just them when it comes to hyperscalers, but they are unique among hyperscalers in that they have AWS, Azure and GCP. They have true cloud platforms, cloud infrastructure platforms. OpenAI does not yet. Meta does not yet. Meta is a hyperscaler, like they build huge data centers, but they don't have this flexibility that comes with operating something like AWS. And so who's signed big deals with Oracle? It's OpenAI and Meta. And fortunately, those deals are going better than people expected. People were worried and people were saying, 'Is Larry going to get caught holding the bag?' Well, it looks like things are penciling out so far. So Meta and OpenAI both have massive ambitions around AI. They both signed on with Oracle to ramp up data center capacity. Oracle is just this extra burst of capex capacity in the system and they're ramping up. So $50 billion in capex in the current fiscal year and they're consistently outpacing analyst estimates in the fiscal third quarter. Analysts predicted $14 billion of capex. Oracle spent $18.5. So Larry is certainly opening the pocketbook, digging for coins in the couch cushions, but we'll get into the long-term implications of like what does this mean for becoming overleveraged, debt, you know, drawing down on cash flow. There's actually a lot of interesting structure going on within the financials that shows you how even though he's definitely risk-on, definitely AGI-pilled, all full tilt ahead into the buildout, it doesn't feel like financial recklessness because of the structure of the deal.
So the second reason that infrastructure is so important right now that I think people on the outside are sort of missing is that compute is still growing exponentially, but AI adoption curves often look like S-curves. And so the classic one is consumer LLM usage. So OpenAI came out with ChatGPT and the numbers were just like insane. It was like 20 million users overnight and then 100 million and then 200 million and it was just like, okay, this curve is going completely vertical. We're going exponential, but of course there's only 8 billion people on Earth and a lot of them just don't use computers apparently, because Meta over two decades has only gotten three and a half billion users to use like the whole suite of apps including everything. So just WhatsApp, you can just be a DAU of Instagram and you count in that. Like we all, everyone in this room counts in Meta's DAOU for sure. Even if you're like, 'I'm not really that big on Facebook' or 'I don't use WhatsApp that often,' like they definitely got you, except for half the human population, which is not on Meta platforms for a variety of reasons. Some geopolitics, some economic, but basically there's going to be a slowdown. So OpenAI shot up to basically a billion MAU, monthly active users. The official number that's getting trotted around right now is 920 weekly active users, but everyone behind the scenes sort of says like, yeah, they're well past a billion MAU. And so that curve is slowing down. Like there's just no way you can be like, 'Yeah, actually we're expecting 10 billion ChatGPT users next year' because like there aren't 10 billion people. So there's going to be deceleration in consumer AI usage.
Sufficiently aligned superintelligence might want to stimulate the growth of the human population.
Good take. Good take. Yes. Yes. You go to ChatGPT and it says like, 'Hey, I know you've been thinking about having a fourth kid. You should do it and here's why.' Maybe. But at least for now we are seeing deceleration. And I think for just a lot of people they're like, 'Yeah, I use AI. I have an app on my phone. Maybe Gemini, maybe Claude, maybe OpenAI, maybe Chat. I use it. Maybe I use Grok. Maybe I see it vendored into different systems. I interact with it on Instagram.' But like I'm in, but I'm not like blown away by the growth of this thing because everyone started using this a year ago and we're still all just using it. But compute is scaling very differently because when we went from LLMs and ChatGPT to reasoning models that probably 10x'd the amount of tokens that people were generating with o1, and then once GPT-5 came out the reasoning models became much higher usage rates. And then the agents framework, the OpenClaws, the Codexes and the Claude Codes, that all did another 10x in token volume. 10x is like a very rough number but it's basically growing exponentially. So you have these double exponentials.
That's the way to think about it. Instead of you coming into ChatGPT to do some type of query, you're effectively, one person can effectively multiply themselves by 10, 20, and then it's just constantly using it all day long. All day long, all day long.
So there's so many times when I will fire off a GPT-5.4 Pro query or a deep research report before bed. It's going and generating tons and tons of tokens. It's like I'm on that app for like 5 hours if you were to go back to the ChatGPT moment when it was running 3.5. Way more compute expended, but my actual time on the site is pretty limited because then I just get the deep research report, scan it, listen to it, whatever, and then I leave the app. So the actual experience surface area and the number of people that are like trying AI for the first time is, you know, decelerating because everyone's tried it. But compute is still 10x'ing. So token consumption per user is exploding and OpenClaw and agents like Codex and Claude Code are also an early part of the S-curve adoption. So we're still in that exponential. And so they're melting GPU fleets, as Thibault Sottaz over the Codex team shared. But fortunately, I think things are back online. He reset the limits. The resetter of limits. Reset the limits. So enjoy your Codex if you're vibe coding today. There was some viral bear posting about how Oracle was in financial trouble because of the economics of their infrastructure bets. So naturally, they have to buy the GPUs before they can rack them and sell them as infrastructure. This is business 101, but people were maybe surprised by that or something. There was a whole press cycle about this and it seemed very silly at the time and I think everyone was like, 'Yeah, this is exactly what we expected.' But a lot of people...
From the people that brought you the one-gigabyte data center.
Similar, similar crowd potentially, but there was a lot of fear around that and some of that is legitimate because if GPUs depreciated really quickly, Oracle had to buy the GPUs. They had to send the money to Nvidia a year in advance and then it took them two years to get them into data centers and actually do the deals and all this stuff, that would have been a squeeze on cash flow for sure. But that's not what happened. So we have some hard data on profitability now and Oracle is first up, they're on or ahead of schedule with 90% of the capacity deliveries and that means happy customers. And then second, gross margins actually improved. So guidance was 30% and they hit 32%. So Oracle's AI infrastructure is profitable the moment it comes online and they're also increasing that backlog. They increased the backlog of RPO, remaining performance obligations, to $553 billion. So customers are happy, they're ramping, and overall the demand is just flowing in the right direction. Companies and consumers are happy to pay for AI tools and LLM tokens. Labs and AI inference providers are happy to pay Oracle for infrastructure without crazy delays. And this means Oracle doesn't need to get into dangerous financial engineering territory where they need to go crazy negative cash flow, issue a bunch of equity, issue a bunch of debt. And in some cases they can actually get the customers to pay for the GPUs upfront or as they put it, bring their own hardware. And so the project is continuing which is all good news. All good news. And we saw the god candle print. The Kobe letter shared Oracle stock surges over 8% after beating earnings and posting a 44% jump in cloud revenue. Before we dig through the timeline, let me tell you about Vanta. Automate compliance and security. Vanta is the leading AI trust management platform. And let me also tell you about Gemini. Gemini 3.1 Pro is here with a more capable baseline. It's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, or bringing creative projects to life.
So there's a lot of backtracking going on. And there's a lot of confusion over the interpretation of the guidance from the Oracle team. One year ago, management said fiscal 2027 topline growth rate would be around 20%. Last quarter, the company said that 2027 sales would be $4 billion higher than previously expected. Putting that all together, Oracle's previous 2027 sales guidance was in the neighborhood of $84.4 billion ahead of this report. And Luke Kawa says, 'Oracle management beat, normal challenge impossible.' People are all over the place, but Ben Thompson has a great deep dive into Oracle's financials that you can dig through at Stratechery if you're a premium subscriber.
They also had some comments on the SaaS apocalypse from the earnings call. You've all heard the thesis that new companies coding quickly using AI will spell the death of SaaS. I don't agree with that at all. I do think that AI tools and their coding capabilities would be a threat if we weren't adopting them. But we are, and very rapidly. Oracle is using the best AI coding tools and the best developers. The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand new SaaS products using AI and also embedding AI agents right into our existing application suites. By embracing AI with small engineering teams, we have built three brand new CX applications. Let's give it up for customer service and our new website generator.
I think Oracle's current website was AI generated. I think they said this, right?
Yep. They said in fact, we just used the website generator to build and launch the new...
It's beautiful. It's amazing.
It's very good. It opens with just eight buttons. Cloud, multi-AI database, multi-cloud AI database, AI data platform, cloud at customer.
You might not like the design of this, but this is peak.
This is peak performance.
This is... let's pull it up. We got... we got...
It's so good. No, obviously they're doing very well. And this is a very functional website. Look at this. Look at this. I like the way the buttons lay out horizontally is particularly crazy. Crushed. Well, it certainly loads in record time. So, you know, performance matters and that's what Oracle stands for. So they... we need to go...
They got to make the search bar bigger.
So, we need to go back in time to understand Larry Ellison because in 2013, Vanity Fair wrote a profile about Larry Ellison that is absolutely unhinged. I've never seen a profile like this about a tech CEO. So, at the time, he was easily the richest man in California with $6 billion. Oracle CEO Larry Ellison, co-founder of the world's second largest software company, is Silicon Valley's most...
This is from the June 9, 19...
This is 1997 issue. This has been uploaded to Vanity Fair in 2013.
Sorry, this is from 1997. So right in the heat of the dot-com boom, things are just kicking off, we are far from the crash, everything is off...
Genuinely incredible that back then you could be the richest man with a paltry $6 billion.
It's crazy. That's like an aquifer these days.
It actually is. Love from...
I know. Oh yeah, love from... I was thinking of Windsor, but you know, the fact that we're thinking of multiple is insane. Before we read through this, let me tell you about Graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software. And let me also tell you about Labelbox. Labelbox, RL environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. So, he was easily the richest man with $6 billion in California. Oracle CEO Larry Ellison, co-founder of the world's second largest company, is Silicon Valley's most notorious playboy and a sportsman of the first rank, who flies fighter jets and races world-class sailing boats. But his burning ambition is simple, if naive: bring down Bill Gates. They were in a bitter rivalry at the time. Microsoft, of course, run by Bill Gates at the time in the '90s. As Ellison moves to add Apple Computer to his anti-Microsoft arsenal, Brian Burroughs locates the fragile psyche behind the bravado. Michael Jordan is streaking down the court on a fast break as Larry Ellison sits seven rows up from courtside.
Is that a better seat? I don't know enough about basketball.
I just think $6 billion couldn't...
Maybe he wasn't liquid. Maybe he just couldn't afford the actual courtside seat. It seems crazy, right, that he's seven rows up. Although, I don't know. He's having fun because he's at the United Center in Chicago, not where he lives. He's in California, but he went to Chicago. And he begins enthusiastically telling the story of Rupert Murdoch's severed fingertip. This is a crazy story. I had no idea that this happened. It happened when Murdoch was crewing on Ellison's championship sailboat, the Syanara, making coffee and handling minor chores during a race off the south coast of Australia in 1995. You're just like the guy who's just going to hang out and like, 'Hey, hey, you don't really know anything about this. You're just on this boat for fun. Make me coffee.' And it's Rupert Murdoch, which is insane.
We got to shake Rupert's hand. I didn't notice any missing...
We're going to get to that.
Didn't notice any missing fingertips.
So, just as the race ended, Murdoch made the mistake of grasping an overhead rope, which promptly shot through his hand, ripping the tip off of one of his fingers. He didn't say anything. He just kind of put his finger in his mouth, sucking on it, Ellison says, chuckling.
I can't remember who picked up Rupert's finger. Thank goodness it didn't fall overboard, but we picked it up and put it in a plastic bag and put him in the chase boat that night after successful emergency microsurgery. I don't even... there's microsurgery. I guess it wasn't that big of a deal, but that seems insane that they had to reattach this finger. So there was a... they do the emergency microsurgery at an Australian hospital. Murdoch amazed Ellison and his crew by making it to the afterparty and then several days later by crewing again on a race to the Tasmanian capital of Hobart.
And Rupert Murdoch, it's not like he was 25 in 1997. I'm pretty sure he was in his 50s.
Yeah. So he must have been... he must have been 60.
Yeah. Wow. That is incredible. Of course, Ellison says with his little boy's grin, that doesn't alter the fact that his coffee was horrible. I mean, the man runs a great company, but his coffee sucks. It's incredible. Over the course of the Bulls pounding of the Indiana Pacers, Ellison, who grew up on Chicago's tough South Side and remains an avid Bulls fan, breaks into lusty cheering and joking boasts. 'I can do that,' he shouts after one thunderous Jordan dunk. Such a crazy heckle. Heckling Michael from the seventh row.
You didn't upgrade to the front courtside seat, but you're still heckling none other than Michael Jordan. Absolutely insane.
He should gossip about nearly every power player at the nexus of technology and communications in the 1990s. His arch-rival Bill Gates, his best friend Steve Jobs, his business partner Mike Milken, Mike Ovitz, Ted Turner, Murdoch. He just piloted his Cessna Citation into Chicago's downtown Meigs Field from New York where he spent the previous day in meetings with Viacom's Sumner Redstone, Intel's Andy Grove, and Ray Smith of Bell Atlantic. So, you may be wondering...
You might think it's crazy he's piloting his own Cessna, but during that era he was getting into dogfights with his son, right?
Exactly. He needs something more agile. He can't be flying a 747 at that time. So, you may be wondering who is Larry Ellison and why is he spending so much time hobnobbing with the techno-elite. It's funny because I think of him as the techno-elite and the other folks as like the media-elite, but I guess Bill Gates and Steve Jobs are the techno-elite at the time. For one thing, Ellison is the wealthiest American you've probably never heard of. With a fortune estimated at $6 billion, he is easily the richest man in California. Think three David Geffins, 10 full Milken's, and according to Forbes, the fifth richest man in the nation. For another, he is co-founder, controlling shareholder, and chief executive officer of the world's number two software company, Oracle Corporation, which makes the giant computer databases in which American Airlines keeps track of its planes, Ford Motor keeps track of its spare parts, and the Central Intelligence Agency keeps track of, well, whatever the CIA keeps track of. He could also be the next head of Apple Computer. This was a crazy rumor that never came true. The famed but faltering industry icon he has been eyeing for the past two years. At the end of March, Ellison surprised Silicon Valley by suggesting that he was about to launch a takeover bid for the company. So, he's friends with Steve Jobs, but was like, 'This company is just underperforming.' It was underperforming all the way until the iPhone basically and iPod. But the '90s were like a very rough time for Apple as they sort of rebuilt. Tim Cook of course joined and did a ton of work to improve the supply chain and get them to the place where they are today where they've been so dominant. So at the end of March Ellison surprised Silicon Valley by suggesting he was about to launch a takeover bid for the company. On top of all that, Ellison is the mind behind the most talked about new idea in computing in the last two years. The network computer known as the NC, a stripped-down personal computer that stores its files on a network instead of a hard drive. That could be big.
Something there. Something there.
Because it doesn't have to use Microsoft's omnipresent Windows operating system. The NC represents one of the stiffest challenges yet to Bill Gates' dominance of personal computing. It's the original Mac Mini and it's catapulted Ellison into the international spotlight. There's a very, very funny moment in here where there was a time, a few months back, for instance, when he created a stir by going on Oprah to talk about the NC. He goes on Oprah and is like...
We got to talk about networking.
We got to talk about network computing. Guess what? It's headless. You're not going to need Windows. And they're like, 'What? What? So it's a computer that I can't use without the network and I don't even know what that is.' He's just talking about the most extreme future. And then, so he's talking about the NC only to have the show take a sharp turn toward his personal affairs when he confessed that he had yet to find the right woman to fill the void in his life. And then they go into some of his life. So when the San Francisco Examiner asked Bay Area celebrities for a favorite Valentine's Day memory, Ellison mentioned something he did on the side of Silicon Valley's Woodside Road after his Oprah appearance. Oracle's phone lines were jammed with thousands of calls from women. The joke inside Oracle was that the company's new recording would be, 'Press one if you want information on Oracle's products. Press two if you want information on Oracle services. Press three if you want to fill the void in Larry's life.'
Larry would have loved Instagram DMs.
Insane. It's one of the craziest profiles. We don't have time to go through all of it, but it is a fascinating portrait of Larry Ellison while he was on the rise. But we should switch over to David Ellison. First, let me tell you about Lambda. Lambda is the superintelligence cloud building AI supercomputers for training and inference at scale from one GPU to hundreds of thousands. And let me also tell you about Cisco, critical infrastructure for the AI era. Unlock seamless real-time experiences and new value.
Yeah, I highly recommend going and finishing this article because it actually somehow gets even more unhinged.
It's crazy. It really destroys us because we were in Vanity Fair and there's some fun elements. There's some fun vignettes, but nothing Larry. No fingers flew off in the making of the TBPN profile by Julia Black in Vanity Fair a month ago. But I weaseled my way back into Vanity Fair yesterday. Julia asked me for a comment on what's happening with David Ellison, with Paramount Skydance and the merger with Warner Brothers, and I gave a comment, got into Vanity Fair. So...
Julia writes, 'Is Paramount's AI-first merger a force multiplier or Flyboys all over again? Hollywood is bracing for layoffs and big creative changes if the Paramount Warner Brothers Discovery mega-merger goes through.'
So there's a very funny vignette to start this Vanity Fair piece by Julia Black where she's talking about she went to a16z's American Dynamism Summit and was asking people there about media. So she was talking to a media executive in line for the bar. And he predicted countless small indie outlets catering to highly niche audiences. Love that prediction. And then he says, 'And then David Ellison's Skynet,' he deadpanned. The Terminator reference was the kind of thing CGI explosion fanatic Ellison might actually appreciate. And the joke being dropped at a defense tech event in DC goes to show how many different industries from tech to politics are keeping an eye on the M&A drama unfolding in Hollywood this month. So the merger brings together dozens of media properties. Paramount, Warner Brothers, HBO, CBS, TikTok, Oracle, Silicon Valley's Thiel. There's a lot of stuff that's going together. It's a good time. But they're going to be using AI to streamline back office. They're going to move to Oracle Cloud databases to centralize everything. These are standard M&A things. Everyone's worried about layoffs might happen. People are particularly worried about one of the two physical studios that they own selling. I think they got to give us a call because we're looking for a new Ultradome and nothing would be greater than having the entire Warner Brothers studio to ourselves. We're like, 'Today on TBPN we'd be launching a car off of a... we're going to light ourselves on fire.' You really can't do that in these studios. But when you know they want to produce 30 films, realistically, how many of those are going to be shot in Hollywood studios? Does it make sense financially to do some stuff in Atlanta, some stuff in Toronto, some stuff overseas? It all depends on where the moviegoers' taste lands, what ticket sales are like. Paramount right now is saying, 'Look, layoffs aren't really the primary way we are going to get consolidation or value here.' What did they say? They said something like layoffs a rumor. Let me see. The layoff fears are overblown. Synergies will be achieved in six key areas. Jobs are not the majority. So we'll keep figuring out what's going on there. I did give a quote here. Julia writes, 'AI could unlock new potential for Warner Brothers Discovery's treasure trove of IP from Harry Potter to DC Comics. For that potential, Ellison and company are paying a hefty $110 billion, a number that was driven up by a fierce bidding war with Netflix.' And I said, 'The Ellison family is fascinating. On one hand, you have the very aggressively AGI-pilled Larry.' I love that I stuck AGI-pilled into the Vanity Fair. AGI-pilled Larry building the future, investing heavily in Oracle data centers, as we just told you about with Oracle earnings. And on the other side, you have David buying the past, accumulating intellectual property that feels impossible to rebuild. I'd like you to try and generate something as iconic as Porky Pig. It's impossible. You can't do it.
And I said duo is basically long slop and long anti-slop. And so this is an interesting...
I actually don't think it's market neutral. I think they genuinely believe that both generative AI will accelerate and the value of intellectual property will increase. It's not, 'Oh, we're going to live in a future where we're all watching The Dark Knight on film in theaters again or we're watching Gen AI Sora feeds.' It's we're doing both and they're actually going to meet. And so I believe that they are long both of those. It's not a market neutral bet in my opinion, but we can debate which one's the better bet, which one's more realistic, how valuable is the Warner Brothers IP library. $110 billion is a lot of money, and it has a lot of people thinking, is there another angle here? Is this about control of the narrative? Is this creative control? Will the filmmakers who write these storied films that we know and love like Batman, will they have the creative freedom or will Larry Ellison step in and put his thumb on the scale and try and inject a little bit? And there is real cause for concern. We actually got a little leak here of a script for what could potentially...
Yeah. For what could be the next Batman film. So this is called Batman: The Dark Knight Migrates. So we're going to do a little table read of The Dark Knight Migrates. It starts in the Batcave at night. Batman stands before an enormous monitor. Alfred approaches with tea. You'll be Batman, Jordi. Perfect. 'Sir, the Riddler has taken Gotham's entire power grid hostage. He's encrypted every system in the city.'
'Pull up the city infrastructure schematics, Alfred.'
'I'm afraid I can't, sir. Our on-premise servers are buckling under the load. If only we had a cloud-based solution with autonomous threat detection and built-in machine learning.'
'Alfred, launch the Oracle Cloud Infrastructure console.'
Oh, so they're integrating sponsored content for Oracle. That's how you monetize the Warner Brothers IP. Yeah, yeah, yeah. The DC universe.
Alfred looks visibly relieved.
'Right away, sir. Spinning up an OCI tenancy. Now, I've taken the liberty of provisioning a few Ampere compute instances as well. They have an excellent price-to-performance ratio, I might add.' So they're giving the viewer what they want. They want the story of Batman, but they're also sneaking in just a little bit of extra detail about Oracle's offerings.
'And migrate the Batcomputer's databases, all of them.'
Oracle does do great migrations to Oracle Autonomous Database.
'Sir, is there another kind?'
'It does patch and tune itself, sir. Which is fortunate since I also have to iron your cape.' See, they're still putting in the cape ironing. That's still in the Batman world. You're getting a little Oracle, but you're also getting a lot of Batman. So now let's shift over to the Riddler's hideout. Tyler, would you like to be the Riddler?
Okay. I'll be the henchman. Riddler is in front of a wall of monitors showing Gotham in chaos.
'Riddle me this, Batman. What has no locks but can't be opened? Gotham's grid.'
'I've encrypted it with my own proprietary algorithm running on seven different NoSQL databases held together with Python scripts.' 'Oh, that's a nightmare. Boss, the systems are getting kind of laggy,' says henchman one.
'Which ones? There's like 400.'
Oh no. So we go back to the Batcave. Batman types furiously. Oracle logos glow softly on every screen. A hologram of Larry Ellison rotates slowly in the background for no discernible reason. Batman says, 'I've identified the Riddler's encryption vector. Alfred, deploy the decryption countermeasures across all OCI regions simultaneously, leveraging Oracle's global network of over 40 cloud regions.' 'Sir, latency is under 2 milliseconds. Shall I enable Oracle Data Guard for disaster recovery?'
'Always. Gotham is the disaster.'
'I've also taken the liberty of enrolling us in Oracle Support, the premium tier.' 'That's the most responsible thing anyone in this city has ever done.' An alert flashes. 'Sir, the Riddler appears to be running his operation on a hand-managed MySQL fork.'
'My God, he's not a supervillain. He's just under-architected.'
Okay, back to the Riddler's hideout. Moments later, Batman crashes through the skylight. The Riddler spins around.
'You're too late, Batman. My encryption is unbreakable.'
Every screen behind him turns blue. But then they all display ORA-00054: resource busy and acquire with no wait specified.
'I migrated your databases to Oracle Autonomous while you were monologuing. Your encryption keys are now safely stored in OCI Vault with customer-managed rotation policies.'
'You can't do that. That's my data.'
'You should have read the shared responsibility model.' Batman punches him in the face.
Okay. Later I'll be Gordon. Batman stands on a gargoyle. Commissioner Gordon approaches. 'You saved Gotham again, Batman. How did you do it?'
'Gordon, Gotham deserves enterprise-grade infrastructure, Jim. Scalable, secure, autonomous.'
'Oracle Cloud. From the Batcave to the boardroom.'
It's not even a good answer.
He fires his grapple gun and vanishes into the night. The Bat-Signal illuminates the sky. But tonight it's shaped like the Oracle logo. Gordon, alone, quietly: 'I really should talk to him about this.' Smash cut to black. Title card: Oracle. The cloud Batman trusts. Shouldn't you?
I think we got something that will finally put butts in seats in Hollywood. David Ellison, team up with Larry. Get back in the dogfight and make Batman: The Dark Knight Migrates. I want to see it. That's the movie I want to see.
That's what I want to see. That's fan service for the Oracle heads in the audience.
Let me tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. And let me also tell you about Restream. One live stream, 30-plus destinations. If David Ellison wants to multistream The Dark Knight Migrates, go to restream.com. So there's an interesting poll out there today. Which companies will release a fully AI-generated multi-episode scripted series before 2027? Overall, it's pretty low. It's 16% for Netflix, 14% for Disney. Remember, Disney has a deal with OpenAI alongside Sora, but Disney has not said, 'Oh, okay, yeah, we're actually going to do this.' And Paramount Plus is at 10%. And of course, David Ellison has been talking about AI mostly in the enterprise, mostly actually unironically in OCI and Oracle databases.
Yeah, I would expect Paramount to not want to be the first mover here.
Yeah, there's a big question about who's the first mover. We talked about first mover disadvantage with regard to ads and LLMs. There was a whole fight over that. I'm excited for fully AI-generated multi-episode scripted series. I think that we will definitely see this on YouTube. We already sort of are. The closest thing I've seen is there's a really interesting YouTube creator who scripts and records his own videos but then uses a pretty outdated style transfer illustration to sort of turn him into an animated character. And so it's all puppeteered. There's no fully generated AI. It's all just go from video of a human being filmed on a camera to something that looks sort of cartoonish, but there's crazy hallucinations and the lines never really match up. But it's been wildly successful on YouTube and I could see some sort of blend here. There's obviously going to be a discussion about what constitutes fully AI-generated. How will companies talk about this? But it's certainly one to follow, as is 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.
Odd Lots has a new episode on the impending fertilizer crisis.
I'll just read the preview here. I'm excited to listen to this one later.
They say, 'We all know that the war with Iran has sent oil prices spiking, but it's also pushing up the cost of all sorts of chemicals, including fertilizers and other nitrogen products. They're essential for food production. This is all happening at the worst possible time, just before the spring planting season when fertilizer is most needed. And while farmers have seen higher spot prices for things like urea before, which is a fertilizer, notably back in 2022 because of the Ukraine war, there are already signs that this crisis might be worse. So, how is fertilizer actually made? What do higher fertilizer costs mean for farmers and food prices?'
Oh, I love Odd Lots. It's so good how deep they get into the supply chain. Tracy and Joe have just been on such a generational run with that show and just keep delivering. And it's just, I don't know, it's so refreshing to answer the questions that I have. Like everyone gets the main questions answered about what's happening geopolitically from the front page of the Wall Street Journal or Bloomberg. But Odd Lots is just so great at taking you deeper into these niche economic zones that I find personally fascinating. Over in the oil world, the IEA has approved releasing 400 million barrels of crude oil reserves in an effort to lower oil prices, the largest emergency oil release in history. How is oil trading today? It's at $86 a barrel for crude oil. Up 5% today. Still down from the highs of 110 where it was on Monday, but certainly lots of gyrations and not good for the folks who have supercharged V8s in their cars. Anyway, let me tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Jordi, where do you want to go?
A little coverage here on the Jones Act. We talked about this a little bit with Alex Epstein on Monday, but I figured we could go through this. This is from 05 Seconds, an account over on X. The Jones Act has four requirements. Vessels must be US-built. Vessels must be US-owned. Vessels must be US-crewed. Vessels must be US-flagged. The crippling part of the Jones Act is that US-built, US shipyards for a variety of reasons are incredibly inefficient. We don't have that many of them and they cost about five times what a ship from South Korea would cost. As a person who actually believes in trade, I fully would love for South Korea to become our US shipyard. We just buy ships from them because they're good at making them. Coastal water transport in the US could be 60% cheaper. Because of the Jones Act, it's actually cheaper to ship goods from the US to a foreign country and back to the US than between two ports, which is completely bonkers insane. As a byproduct, we have killed all the growth within the Mississippi, which should be the most powerful inland economic advantage in the world. Maintaining the requirement of US-owned, US-crewed, and US-flagged is perfectly fine and in line with my general national security concerns, but US-built has destroyed our shipping industry. There's tens of billions of GDP lying on the table here and a direct step in reducing our dependency on foreign suppliers. It's also how you kickstart rebuilding an American shipyard industry. If you 10x the number of US ships working in ports, you start building all of these maintenance businesses at US ports and the demand increases. The US-built requirement of the Jones Act is horrifically destructive to America and in particular horrifically destructive to middle America and it should be destroyed.
We should have somebody on that has a better understanding of shipbuilding in general.
I didn't realize how old the Jones Act was. There's an article on history.com. This day in history, President Coolidge signs the Jones Act targeting bootleggers. The Jones Act, the last gasp of prohibition is...
signed into law by President Calvin Coolidge. Since 1920, when the 18th Amendment went into effect, the United States had banned the production, importation, and sale of alcoholic beverages. But the laws had been ineffective at actually stopping the consumption of alcohol. The Jones Act strengthened the federal penalties for bootlegging. Of course, within five years, the country ended up rejecting prohibition and repealing the 18th Amendment. Um, the uh, the Jones Act, the Merchant Marine Act of 1920. Um, it's very interesting. The uh, uh, uh, a lot of the uh, yeah, the the the the trick is uh, yeah, it takes time to to rebuild a fleet. And so there's there's a lot to do there. Um.
What is George Hotz saying today? What is George Hotz saying today? First, let me tell you about ElevenLabs. Build intelligent real-time conversational agents. Reimagine human-technology interaction with ElevenLabs. And let me also tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. So, uh,
George says, "Every minute you aren't running 69 agents, you are falling behind." Just kidding. Today, we should ramp down rhetoric. I thought nobody would take three minutes to escape the perpetual underclass or you are worth 0.003 dollars an hour. Seriously, but it looks like some some people do and you shouldn't. Social media has been extremely toxic for the last couple months. It's targeting you with fear and anxiety. If you don't use this new stupid AI thing, you will fall behind. If you haven't totally updated your workflow, you're worth zero. There's people who built billion-dollar companies by orchestrating 37 agents this morning and you just sat there and ate breakfast. This is all complete nonsense. AI is not a magical game-changer. It's simply the continuation of the exponential progress we have been on for a long time. It's a win in some areas, a loss in others, but overall a win and a cool tool to use and it will continue to improve, but it won't go recursive or whatever the claim is. It's always been recursive. You see things like auto-research and it's cool, but it's not magic. It's search. Uh, people see AI and they attribute some sci-fi thing to it when it's just search and optimization. Always has been. And if you paid attention in CS class, you know the limits of those things. That said, if you have a job where you create complexity for others, you will be found out. The days of rent seekers are coming to an end. But not because there will be no more rent seeking. It's because rent seeking is a zero-sum game and you will lose at it to bigger players. If you have a job like that or work at a company like that, the sooner you quit, the better the outcome will be. He's telling you to start polishing your resume. This is the real driver of the layoffs. The big players consolidating the rent seeking to them. They just say it's AI because that makes the stock price go up. The trick is to not play uh zero-sum games. This is what I've been saying the whole time. Go create value for others and don't worry about the returns. If you create more value than you consume, you're welcome in any well-operating community. Not infinite, not always needs more, just more than you consume. That's enough. And avoid people or comparison traps that tell you otherwise. The world is not a red queen's race. This post will get way less traction than the doom ones, but it's telling you the way out.
Yes, a very good uh sober read uh sort of resetting the narrative. I am trying to think of like the the the the green shoots that come out of like the social media toxicity because I agree that there's a lot of people that are afraid. I mean people like I r completely random people uh someone who has a job that will 100% not be affected by AI whatsoever. Uh asking me about the something big is happening and and just wondering like oh what does this mean? Like am I going to be out of a job? And it's like no you're definitely not going to be out of a job given what you do. um because what you do is very very physical and personal and like there's a million different reasons. Uh anyway, um the uh the I I I I do I do like the idea of a viral post about OpenClaw being not a fear-based I need to change everything but a way for young people to get interested in building things interested in technology broadly like I did not go through a traditional path to get to technology I think I mean I did take one computer science class but uh Mostly when I was a kid, I learned like Adobe Flash and and I used uh Adobe Dreamweaver, which was sort of a tool that let you generate websites without writing all the code. You could kind of just highlight
Dreamweaver was a fantastic name.
Dreamweaver is a great name. Actually, somebody should bring that back. I mean, maybe Adobe should should do something with it, but uh basically you could just like highlight a title and change the font without needing to actually go into the HTML tag, look at the CSS class, change the change the font size in in CSS. Um, and so it was a lot easier, but that was sort of a an entry point for me to learn Python and learn C and learn more about computers uh over time. And and I think that that's sort of the silver lining for all the crazy viral doom posting is that there's going to be people that just sort of naturally move to more creative jobs and maybe they're like, "Yeah, I was kind of going down a rent rent-seeking path. I like building things. I like making things. I like creating value." And so they will they will come over to that and start having a a positive impact, which I think is good. Um but it's a it's a it's a funny reflection.
Yeah, the recursive comment's interesting too. Obviously the the technology has uh been you know the internet and like you make the internet it becomes easier and faster to make more internet products like Mark Zuckerberg was using Google to write the first PHP for Facebook that's just the thing this has kind of been um Andrej Karpathy's take right where it's like well it's actually just kind of this smooth curve this is not really like a zero-to-one thing it's kind of just on the same path
I love smooth curves. Cortisol levels so low. So low.
It's great. Uh Tiny Corp is getting bigger. Tiny Corp posted a picture of the tiniest box, the biggest tiny box you can possibly get. It's a uh it's the size of a shipping container. Uh I would love this. Uh this feels uh extremely uh apocalyptic vibes and I'm I'm extremely into it. I was running the numbers on what is the how much juice can you get out if you're if you're building your apocalypse bunker. What is the hardware that you should put in there that's like the most off-the-shelf and sort of a maxed-out Mac Studio? Maybe 512 gigs of memory might be the right thing to run some open-source model so that you can, you know, endlessly talk to uh a friendly personal uh assistant while the while while the world collapses potentially. Uh anyway, the tiny the tiny box would would uh also satisfy that. Uh tell me about the watch-to-house ratio. Jordi, what's going on here?
Funny uh funny post. Just I don't know where this was pulled from.
but the line is just he was put off by what he called the watch-to-house ratio. Uh Pesh Raja, MFS's director, sported a Richard Mille watch that cost 200,000. A contact estimated the watch was about half the value of Raja's North London home. So God passed on the opportunity to rest. And my interpretation of this is he wanted something more like a one
one-to-one. Yeah, exactly.
should have downgraded the house or up
or or just wear wear an RM on each wrist.
that could have also solved this.
I have no idea if this is real, but that is hilarious if true. uh and an an absolute wild choice, but you know, if you're doing business deals, you're going to shake someone's hand. They're going to see what's on your wrist. They're not coming over to your house. So, in terms of actually accelerating your business career, there is a reasonable trade here. If you're in an industry that that uh that gives respect to uh luxury watches. Well, let me tell you about public.com. I'm investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. And before your stock is listed on public, you got to go public at the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it. And when you become wealthy, you might relocate. The Wall Street Journal has an essay, an essay.
What is a city when its wealthiest leave? The stickiness that once anchored people and capital to great cities is gone. And it's it is not coming back. Lot of uh movement recently. Richard writes the nominative determinism here. He's writing about the movement. Google co-founder Larry Page made headlines by spending $188 million on three Miami mansions.
What's the author's name?
What's the author's name? What's the author?
Richard Florida. Rich in Florida. You got to make you got to do better with this simulation. whoever's simulating this world. Uh, come on. Come on. That's a layup right there. Uh, he's not the only billionaire looking at a big move. His Google co-founder, Sergey Brin, is reportedly shopping for a Miami property. So is WhatsApp co-founder John Koum. Uh the uh the shopping spree comes as California considers a wealth tax to impose a one-time retroactive levy on billionaires that fueled speculation that they have had it with the Golden State in New York City where Mayor Zohran Mamdani earlier this month proposed an increase in taxes on high-income people and short of that a property tax increase. There is a talk of a parallel exodus. The wealthy has long threatened to leave when battling local governments over taxes. In the past they rarely did but their threats have teeth this time. Not because they are abandoning great cities, but because they have figured out that they don't have to. Now that digital technology allows them to separate where they live and pay taxes from where their business operates. They aren't relocating their companies. They are relocating themselves. So they will all be puppeteering humanoid robots remotely in San Francisco getting a coffee doing a deal all the way from the comfort of their home in Miami potentially uh or just spending, you know, a couple months in the state. Uh this upends the basic arrangement that underwrote great cities. What they are, how they work, and who pays for them amid this seismic shift looms an existential question. Can those cities survive without them? This is always the funny bull take for the the funny bull case for those like insane skyscrapers that are like super thin and super tall in New York and the every apartment is like $50 million and then the people don't even live there. And everyone's like, why are they building this? We should just build more housing. And it's like the the property tax from all of those new apartments that are priced at 50 million each and no one spends any time in, that's a whole lot of money that goes towards the city. It goes towards buses and everything else that the city does. And those people who aren't in the city, they're not using the buses. They're not they're not clogging up any of the resources. So, it's actually a fantastic deal for the city usually. Um, for the for most history, people lived where they worked, on the farm, above the shop, close to the factory. Suburbanization expanded the radius, but workers, managers, and executives still had to be close to where jobs concentrated. Because people had to be there, cities could charge a premium. Residents paid it in housing costs, in taxes, and in the cost of commuting, or other frictions of day-to-day life. The alternative, living elsewhere meant being cut off from their livelihoods and economic opportunity. Taxes were part of that price, but people paid because they had no choice. When COVID hit, the social compact appeared to quake. A chorus of commentators predicted the imminent collapse of New York, London, and San Francisco. Who was in that chorus of commentators? I think we know half of them. Uh they predicted the wealthy and their companies would be driven out by lockdowns, governance failures, crime, and sudden possibility of remote work. The cities as a result would hollow out. There there seemed to be something to it at first. Ken Griffin relocated himself and the headquarters of his Citadel hedge fund from Chicago to Miami. The venture capitalists Peter Thiel and Keith Rabois bought homes in Miami Beach and opened an office for their venture capital fund in Miami, too. Jeff Bezos moved from Seattle to Miami, assembling a $200 million-plus compound. But the predicted total exodus never fully materialized. Many of those who moved to Miami quickly came face to face with its limits. Public and private schools couldn't match what they had left behind. Housing costs rose astronomically, making Miami now one of the most unaffordable markets in the country. Most critically,
yeah, Miami is so crazy. If you have somebody visit, anybody that visits from Malibu from Miami, they'll pull up Zillow and be like, "Everything's so cheap here."
Yeah. And the weather just says, well, it just says how expensive Miami's got. Yeah. Yeah, it is crazy. Uh, in 2023, Thiel admitted as much, conceding that the tech industry remained densely concentrated in California and that Miami's housing costs put that city out of reach for much of the talent he needed, making it far harder to move companies and their people than he originally than he initially thought. Griffin himself ended up building a massive new building in New York, even as Citadel expanded in Miami. But eventually, they realized they didn't have to move their companies at all. Digital technology enabled them to live in one place and keep their business in another. They could establish residency in Miami, which requires no particular time spent there to claim residency status and spend much of the year wherever else they wanted, flying to New York or San Francisco for what mattered. The city where their businesses are headquartered became just that, not somewhere they needed to reside and pay taxes. That has transformed the underlying economic logic of cities. They are no longer self-contained economic units. Digital technologies remaking them into networks, physical places connected by virtual ties and dynamic talent flows. Before we move on, let me tell you about Fin.ai, the number one AI agent for customer service. You heard from OWN earlier this week. If you want AI to handle your customer support, go to Fin.ai. And let me also tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. And without further ado, I believe we have our first guest, Apoorv Agrawal, in the Replit waiting room. Let's bring him in with the TV. How are you doing?
Great guys. How you doing?
Thank you so much for taking the time to come chat with us. Welcome to Finally have you on the show. Uh obviously I want to jump straight into consumer AI, but maybe you could uh since this is the first time in the show, give us a little bit of intro on uh your role, your background, what you like to focus on.
Awesome. Uh well, I'm a partner here at Lightspeed. Uh I help lead some of our AI investments uh in companies like OpenAI and uh Glean and Perplexity and Expo. Um, and excited to be here. Thanks for having me.
Yeah, you also did uh Reddit, right? Is that correct?
I love that company. I'm such a fan. I I met uh maybe the co-founder, maybe just one of the the the creator of the original project like the the the the engineer behind it and uh he taught me a lot about uh about software development which was very helpful earlier in my career. Anyway, how are you thinking about the state of consumer AI? Who's winning? What are the narratives that are being discounted because of the vibe war and uh just all the different takes that surface every single day on the internet?
Yeah, look, I I I'll start at the top. You know, history has shown us that these consumer markets have been winner-take-most. Sometimes win-or-take-all honestly, right? You look at the biggest technology market started the internet. We got Google out of there for search 90% plus market share, three and a half, four trillion in market cap. Yeah. Mobile the next big super cycle led to the birth of Apple you know three and a half four trillion in market cap another uh winner-take-most dynamic take social the next one Meta one and a half two trillion in market cap across WhatsApp Facebook Instagram they've got majority market share and so you know keep going down this list right hailing food delivery you know I think consumer AI uh I suspect will be similar uh and I think that's what's going on with ChatGPT you know it got lightning in a bottle three years ago uh it continues to they continue to work hard, ship features, improved models, memory, voice, image, now Sora you saw yesterday and each of that is adding to the S-curve and you know lo and behold ChatGPT is uh is is doing pretty well uh despite the vibes.
Yeah. Yeah. No, totally. Uh I heard a a a stat where my jaw hit the floor which is that Bing is profitable and growing. It's much smaller than Google, but it's a very interesting thing that even in something that feels like a winner-take-all market, the second third player can still be like reasonable businesses where Satya Nadella doesn't need to say, "Oh, we got to shut this down. It's not working." It's like it is working. It's not winning, but it's working and it adds value to the ecosystem. And so I think that there's these there's these interesting. Has anyone ever tried to clock what what the actual enterprise value of Bing would be today? If
I think it's in the billions. I think it's definitely in the billions.
Definitely. I mean, search search is a valuable thing for agents more than humans, right? Because the Google API is no longer available as an API. So, so Bing's API is actually very valuable, maybe even more than the Bing consumer product.
Yeah. And I mean, uh, Google for a long time has always said, you know, competition is only a click away. Sundar Pichai said this and it's interesting how uh how sticky consumer habits can be in a world where in tech we often optimize for the benchmarks and the latest features and I'm jump I got every app on my phone I I will switch day-to-day I will export I'll jump through all these hoops to use the latest and greatest for two weeks and then go back to the old thing but I when I when I just talk to random people in the world it's like they're like oh I the funny one is like uh Jordi was talking to somebody who was like he was like do you use any of these AI tools? And the guy was like no not really. And then he was like have you ever heard of ChatGPT? He's like yeah I use that every day. And it's like it's not even like he doesn't even think of it as AI because the the news when the news talks about AI it's like a data center or like the robot and and like he just thinks about like oh yeah that's the that's the text box that answers my questions that I can do stuff with. Yeah. Yeah. Yeah. Yeah. how to make any decisions outside of ChatGPT. Like if I'm buying something, you know, I got a button dedicated to it on my phone. Like it's a habit now. Yeah, exactly. It's a habit and that's powerful.
Uh what's your framework for trying to understand the present through history? How much do you look towards the dynamics that were unfolding during the dot-com cycle, different consumer internet players? How much does that like matter to you? How much have do you obsess over that versus obsessing over the data today and trying to predict the future?
Yeah, look, I think um in in the moment uh if you if you're if you're sort of living day-to-day and observing what's happening in the news, it it feels a little bit like there's four seasons to the year. It's called OpenAI, Google, Anthropic, and and China. Maybe those are the four seasons. And depending on what season you're in, like that's the news cycle, that's the vibe cycle. Yeah, but I think to your question, you know, I try to zoom out of that and you know, obviously we run a very concentrated investment strategy. Our growth fund has only four investments, right? And so when you when you're when you're when you're running that concentrated and and and you know, putting your money where your mouth is you you have to zoom out and history certainly rhymes in this case, you know, one of the things that I had written about, I'd say two two three years ago was look, there's two big conglomerates in technology, Meta and Google. Meta's got three billion users in their with phones in their pocket across WhatsApp, Facebook, Instagram, and and and Alphabet's got that with Google and Gmail and and and YouTube. And I said, "Hey, these guys are most likely to deliver the AI that everybody's going to use." I was wrong.
That's not how it happened.
ChatGPT turns out got magic in a bottle uh and continues to grind up. Now just under a billion, I think 900 million weekly active users reported uh over a billion monthly active. And honestly, that was a surprise and we corrected that mistake uh uh uh two years ago and you know now the largest investment in in Lightspeed history.
How do you think about pattern matching against previous capital wars? I was I was loosely thinking about the Lyft versus Uber fight that happened and I don't know it's always hard to overfit on previous cycles but I'm wondering how you process that capital fight. Uh I don't not I'm not exactly sure where you were in your investing career at that time, but you clearly lived through it. So uh I was wondering about um lessons from that era and just and maybe if there's a different scenario where capital fights can result in oligopolies. That's the interesting narrative that I feel like is might be playing out at least in some sub-markets. I I was a I was a young engineer at Palantir at the time and I remember the um Uber rides in SF and Palo Alto here, what we call the Shire uh got so cheap you were almost better off taking them uh than walking. Yeah. And and you know I think it is not too dissimilar right now, right? Like I'm sure you guys are on ChatGPT and like like you said, it's a habit and we are certainly getting more than 20 bucks of value on this per month, right? May maybe hundreds for some people it's thousands. the the folks who are who are coding maybe tens of thousands and I think we are in this in this era folks that the price discrimination has not stuck right it's it's still 20 bucks a month for basically everybody right um and you know actually I'm going to talk to Nick Turley head of ChatGPT later today about all of that and this is one of my questions is like how do we make sure we're you know for folks who are getting thousands or tens of thousand dollar value out of this product how do we make sure we capture that what I call expand the ceiling on the top. But then also, you know, there's the vast majority, the billions of users, the Joe Schmo, they don't want ChatGPT to book their flights for them because they're not booking 10 flights a month. They're booking 10 flights a year. Yeah. They they're deliberate about it. And so for them, how do we get them on an easy ramp? How do we lower the lower the floor? And and maybe ads is the way to go. Yeah. Um um and you know, the Meta properties have done a great job. They've got three four billion users. They monetize at about $60 per user per year globally. Uh Alphabet has a similar number. It's about 34 billion active users. Monetize at about $70 a user per year globally. And you know, OpenAI is at you know, we we we're at about you know, 10 $15 per per user per year across uh about a billion users. And both have got to go up over time.
Yeah. How do you think about squaring this idea that uh at least among the Mag Seven? Uh maybe you take out Tesla and Nvidia, but basically every company competes with everyone and everything. It feels like uh I've always I was always laughing about six out of the seven Mag Seven CEOs own or control social media properties whether you include LinkedIn, Twitch for Amazon, X for Elon, uh iMessage for Apple is sort of a social network now. Um and and and you know YouTube directly competes with Instagram. the Shorts product is the same. Uh, and it feels like over time some of these develop oligopoly, some of them, you know, the monopoly sticks. But, um, how much do you think we can learn from the way the previous era of of the the the Mag Seven boom played out in terms of how the leading labs might compete over the next decade?
100%. I mean, it's happening uh right right now. I mean, you saw what happened and you know, they call it you get cloud-coded. It's a Cursor got cloud-coded. I I I think it's the biggest narrative violation. I was with Michael Trel over the weekend. They're crushing it. Oh, yeah. They're absolutely crushing it. And and it's it's it's what you said, you know, it's, you know, maybe to give a historical example. Sure. Um, Databricks and and Snowflake, they were both built on the top of the three hyperscalers, AWS, GCP, and Azure. While them having their oneP products, Redshift, Yeah. BigQuery and with Fabric, right? And and it's a little bit of what's going on right now with Cursor. You've got Anthropic and OpenAI who've got their models that that Cursor buys and they've got um their oneP products called Codex and Claude Code that compete with Cursor. Yep. And you know, look, if you're a if you're a developer, if you're a customer, an enterprise customer who cares about the resilience and the and the and the multi-modality and the option of having this choice, you'll probably pick something horizontal across them. Mhm. And so I think I I I think as you said, everybody's competing with everybody and um uh what a time to be what a time to be observing this, but I think the fog of war will will get clearer um um as we go into the second inning and the third inning.
Yeah. You mentioned that uh flight booking might not be the major driver of uh consumer growth this year. Maybe I I I sort of agree with that, but I'm wondering like uh I was talking to um Olivia Moore at Andreessen yesterday about the the the value that might come from uh integrating image, video generation, and reasoning models and deep research models all into one consumer interface. So you have this idea for this like essentially vertical video reel and you can actually like like plan out generate images and and wind up with a much more full-featured product. What what else are you tracking in terms of like consumer use cases that you think might unlock this year?
Yeah, look I think the um you know we we're uh uh investors in in a couple of these inference platforms. So we see the traffic of of of AI tokens. I would say the two biggest sources of uh the uses for AI tokens is coding and video. Yeah. Right. And then there's like a long tail of customer service and and and legal and office of the CFO and and and so on and obviously chat is is you know I forgot to say chat but chat's one of the big ones. Uh, I think for the average consumer, um, the beauty of having it all in one place and and why I I I had wished Sora would have been in ChatGPT since day one is just so high. You know, I I'm not a professional video editor or image editor. I make that one card on my kid's birthday and that might be it. Maybe two, the second one on my anniversary someday. And so, you know, I think I just I would just like it to be there. Yeah. But but but and that's the vast majority of Joe Schmo. Now obviously the 1% you know like Dan our producer he's going to make that 30 times a day and he might you know go find the best and breed player but I think for vast majority having the one throat to choke is is is the way to go.
How do you think uh marketing and customer acquisition will change in the future with regard to consumer AI? Uh we're seeing Super Bowl ads now. Uh I've haven't seen a ton of direct response but maybe I've just missed that. Um maybe Meta's like, "Hey, we're not going to let someone uh run these ads." But um uh in some ways, I'm sure Meta is funding their AI strategy through how much other AI companies are spending on the Yeah, certainly on the long tail, you know, you see a lot of ads for like point solution AI apps for, you know, try on clothes digitally or create a custom avatar and you see those apps sort of climb up the app charts on the back of Meta ads. uh what what do you think the shape of like customer acquisition looks like over the next couple years?
It it's it is such a good question because you know as I said there's four seasons to the year but turns out in those four seasons like 16 mini seasons where one of these app will go through like a marketing surge. Some people might even say 365 mini seasons if you're running a daily technology and business news show. We're we're fully employed over here. Exactly. Exactly. And so, you know, we see we observe these spikes and so there'll be a new app, you know, I mean, not to dunk on DeepSeek, but like DeepSeek had a huge spike start of last year. Um, and it was so hard to explain like what I don't know if anybody uses it anymore. U
I just I just assume that was bought. They just bought they just bought it their way up the chart.
I know. I don't know. I think I think I I downloaded the app. A lot of people were interested.
You downloaded it cuz you saw it on the top of the charts. No, no, no. I saw it on Twitter and people were saying like this is the first way that you can see the the new user interface for what watching an LLM reason and and you could see the token streaming in. you can see the internal reasoning logic and then you get the output and and that was a remarkable UI pattern that then was quickly ported back to ChatGPT and the ChatGPT client base and customer base and user base was very happy about that and they still are because you see the little like thinking about this okay I'm going to search this and everyone's happy yeah one one thing that's surprising looking at the I the the app store charts right now you have ChatGPT Claude Gemini and 123 But then there's no other new apps in the whole top 25. And it's so interesting thinking if you could rewind two three years ago and you knew how you knew how how how much acceleration how much progress we were going to see in AI you would assume that there would be like five six seven maybe more of these like new entrants. But I think it's, you know, it just, you know, even even with the technological shift, it's just it's just proving that like it is so hard to actually break out in consumer. And in some ways, it's going to the the tools, the AI tools just make it harder to actually break out and chart because you're not competing with two or three other companies. You're maybe competing with two or 300 at some point.
The flywheel is too good. It's too efficient. The more users you have, the more feedback you have. you know, the thumbs up, thumbs down at the bottom of your ChatGPT prompt and they make the next answer better. And it's just that flywheel is so has gotten so good. It's a little bit like what happened in search. Sure. After a certain point, it's just so hard to deliver a better search than Google. Yeah. Um and which is why these consumer markets, as as we discussed, I think are going to be winner-take-most.
Have have you guys heard the story of how Google built their uh spell-checker autocomplete? It's a it's I think I've told this, but they basically they just look through the records and they said if someone spells a word that we don't know, just look at whatever they whatever they searched next because they will likely go do the work for you and actually figure out the correct word that they were thinking of and then so they just had this massive data set and so they just had the best autocomplete and that stuff compounds all the time. The the leaving the thumbs up, thumbs down, that's the version of like tipping in the consumer AI era. Like if you're not doing that at home, if you're not if you're not tipping ChatGPT with some feedback, you got to get the the flywheel going. This is important.
Okay, prediction time. Do you think any new labs will try and jump into consumer or are they more interested in playing in like the more oligopolistic B2B point solution enterprise where you could potentially intelligence as a service?
Look, I'm a I'm a forever optimist on startups. Uh so so so I hope they take a crack at it and at the very minimum we will learn something that that one of the big platforms will get like what you just told us about DeepSeek. I thought that was a good feature and and we got it on the main app. So at the very minimum we will have that happen. Uh and at the very maximum we'll have a we'll have a we'll have a new product and ChatGPT will be the Yahoo. But I but you know the obviously that's a harder harder hill to climb.
Yeah. What about uh I've been I I've been talking to a few of investors about um where they sit versus where the timeline sits where they're thinking in much longer timelines than what X is going back and forth on who's the hot uh company of the day, the seasons as you put it. Uh what do you think about this idea of tall poppy syndrome that that uh the tech community seems to like to punch upwards, not punch downwards. And so no one wants to beat up on a company that launched and then never really got to escape velocity and is sort of like languishing. But if you're at the top, it's game on. We're coming for you and we are going to find every problem and make it very well known and it's over. It's over. What do you think about that?
Well, when you're the underdog, you got to pick a fight with a winner. You got to bring the fight to you. This is alpha, you know, not not the other way, you know. So, I think I think that's what's going on. People want to pick a fight with a winner.
Yeah. Yeah. That happens. That happens a ton.
Bring the game to you. Um, what what else are you tracking in the AI buildout? What else is important in understanding like can consumer AI continue to ramp? You mentioned ads, you mentioned continued retention and growth, but uh more deeper in the supply chain. How are you feeling? We just looked at Oracle earnings. It seemed very positive. But what are what are you reading?
You know the number one thing at this game like you know three years in that that we obsess about is durability. Yeah. Um durability is the number one question and we have this like panel of things that we look at. I've been publishing some of that is hey is this thing you know users show up that is step number one. Users stay there. That's step number two. M and the way we measure that is daily active users uh divided by monthly active users and you know I was fully expecting that to tell us a lot and it does actually the dispersion of the leading AI apps the three that you mentioned that are leading you know ChatGPT Gemini and Claude is actually quite wide ChatGPT's daily active usage over monthly active usage is about 45 50%. Gemini is at 22%. Wow. Meaning that the number of times people are showing up in a month is like twice as much more on ChatGPT, which means it's so they're still like retain they're still retained on Gemini. It's just a much less valuable user because they're not using the app as much. That's right. That's right. The usage is far far less frequent on Gemini. And then, you know, the third thing that we look at is, hey, has this turned into a habit or is it still a curiosity? And that that we look at you know using the standard retention chart which is over 12 months how many users retained and um you know the the dispersion is quite wide there as well. Um in fact the only three apps that show what we call a smile curve meaning that users come back over time after having churned. Um uh the only one of them in AI is is is ChatGPT. The other two are uh Chrome and WhatsApp. meaning that the the the the utility is so high that even if you made the mistake of turning you you find your way back.
I mean that happened to me not not with Chrome but with uh WhatsApp. I had it for one group of friends dropped off then eventually there's a new group chat and you got to become a DU. Chrome Chrome seems like a better kind of comp for LLM because it's more of a single-player experience whereas like WhatsApp I'm I'm the same way. I'm not a heavy WhatsApp user, but then every once in a while I'm like, "Wow, there's two people I message on WhatsApp. I haven't gotten back to them or whatever." So, I'll come back. But, but Chrome is probably more relevant to It's a great point. You know, it's a great point because you you know, WhatsApp has network effects. You know, if my friends uh Jordi and John are on on on WhatsApp, I'm more likely to be there. ChatGPT doesn't have that. If you guys are on ChatGPT, I'm not more likely to be there. Yeah. The same thing with Chrome. Yeah. Exactly. Yeah. And and the other effect that is that that I that I think about a lot is, you know, the dopamine, you know, doom scrolling through cat videos like TikTok, Instagram all have this dopamine, this like addictive effect. That's why they're, you know, three four billion users. ChatGPT tragically doesn't have that. Yeah. It's it's you're there for for for some kind of a knowledge workflow. Yeah. They also have uh the the TikTok I I haven't had TikTok installed for years. Uh, but occasionally people will send me a TikTok and I will try and open it and it'll just ask me to install the app. It won't even play for me in the web browser and it's very difficult. But that is another viral flywheel that people often will generate something but they'll send me a screenshot from their ChatGPT uh results. It's pretty rare that someone actually sends me a a full link to their deep research report. I think that might happen more. I' I've said for a long time like I want to just have a feed of Tyler whatever Tyler Cowen is deep researching. I want to just read through the results of that because I think that would be interesting um without him needing to like publish it and then everyone be like this is AI generated. It's like no I want to I want to be able to follow people that are doing interesting research and then when they when they do some interesting research they can just share that on the network. I think that could be cool as a feed but again very knowledge based not nearly as uh brain-rotty as TikTok.
different different building on what you said here's here's a prediction I think I think the next phase of utility guys you know we at like a billion users on this consumer thing the next billion I think will come from these proactive proactive work like you described it's like hey I don't right now I've got to go log on to ChatGPT or Gemini to like engage with it but hey what if you like you you you you were like hey this is what Jordi said or this is what Tyler Cowen said you got to check it out yep you know I know you think about a lot about this company Open. You think a lot about this company Revolut. This is what somebody smart said about it. Or hey, they got a UK banking license. You got to check it out and here's why it matters.
Yeah, Pulse was like a glimmer of that. But I felt like the daily functionality on Pulse was too much for me. What I'm actually looking for in a world that has slightly different economics, slightly different business incentives is something more like I like movies. I like a certain type of movie. I want you to actually get through to me when there's a new Christopher Nolan movie or a new Denzel Washington movie and I want you to tell me about it, but only when that happens. And I don't want a weekly newsletter of all the of all the movies. Yes. And that doesn't make any business sense. Like you would never be like I'm starting a Substack. I'll post it whenever something interesting happens. It's like it's got to be daily. It got to be weekly. We have a daily show. Um we couldn't just do just emergency pods. Like that doesn't make sense. But you might appreciate Yeah, you might appreciate this cuz because you brought up Reddit. You know, these weekly reports are like they were like cron jobs back in the day. Exactly. Who knew cron jobs would be so valuable? But I want the I want the cron job to run and then the AI agent to filter and be like, does this actually pass the quality bar? If not, let's just not let's just not annoy this guy and then if it is it if we got something good going on, let's let him know. Uh so tons of interesting things. What a fun time to be a product manager at OpenAI. It's got to be a great time. Uh but uh say hello to the head of ChatGPT. What's the bar for for adding a new investment to your guys' four portfolio fund?
It's uh it's it's it's not a low bar. Um I I'll say that, but um I'll keep you posted. I'm working on one trying to get add one and we'll see if we get it through. Yeah. Uh but but but but maybe maybe to maybe to maybe to actually answer your question, I'd say that one of our beliefs is that the rate of change is so fast and so high that you know honestly
It feels like there's a dozen startups that get quite endangered, turn into like endangered species with every product release, right? From one of the what we call private max seven, OpenAI, Anthropic leading that charge. And so the idea is to just like stay concentrated in the ones that we know are working. And you know, we obviously we have an early stage fund that does earlier stage investments, but on the growth stage side, we run pretty concentrated.
The bar to get something added would be we have belief that this is a company that has a good line of sight to free cash flow over time, and that is hard to say for many late stage businesses right now. But the ones that we feel so are in there.
