I see a large IPO on the horizon. You're surrounded by journalists. Hold your position. Overnight success. The Placemarker 3000. Double. Right. There's misinformation. Clearing order inbound. Let's just roll.
We are surrounded by journalists. Hold your position. Get up. Trust the experts here. Five. We are experts. Founder Melod. I see multiple journalists on the horizon. Stand by. UAV online. Blaze.
Double blaze. Triple blaze. Double kill. Fly is team deathmatch. We are experts. Triple blades. That's just wrong. Right.
Hardy, clearing order inbound. We are surrounded by journalists. Hold your position. Strike two. Activate golden retriever mode. Market clearing order inbound. Five. Perfect. I see more journalists on the horizon.
You're watching TBPN. Today is Tuesday, March 24th. We are live from the TBPN Ultradome, the temple of technology, the fortress of finance, the capital of capital. Do you know how I got here today? I drove through the Hollywood Hills, drove through the San Fernando Valley, because we're covering Hill & Valley today, but we're doing it from the TBPN Ultra. A whole bunch of meetings. Who doesn't like it? Anyway, what do you think about this, Jordi? Ramp.com. Time is money. Save both. Easy. Use corporate cards, bill pay, accounting, and a whole lot more all in one place.
Now, we are covering Hill & Valley today. We are unfortunately unable to make it in person, so we will be covering it remotely, but we have an amazing setup there with a whole bunch of folks on the ground. So if you're watching this from DC, go say hello to Tyler Cosgrove live in person at Hill & Valley. 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. We have Chase Lochmiller, Ryan Petersen, Scott Nolan, Sarah Guo, Shaun Maguire, Delian Asparouhov, Zach Dell. We have an amazing lineup and we're very excited to talk to all of them starting at 11:45 today.
But first, we have to recap some things. There's been a whole bunch of news. First, we had the great peptide debate of 2026. Brandon Gell on our team wrote about this in the newsletter today, tbpn.com. You can go subscribe. Who do you think won?
I was talking to a lot of people. Very interesting because you had scheduled this. I wasn't even really aware that there was a peptide debate going on. We'd talked to some other folks on the show about peptides and how there was a debate brewing, and I was aware of the meme, like the Chinese peptides in Silicon Valley, all of that stuff. But I wasn't aware that the debate was boiling to a particular point and that there were a lot of people discussing it. So it was great timing. So thank you for organizing that, and thank you to our guests Max and Martin, who took the time to come and talk to us and I thought did a really good job of being simultaneously entertaining and also very cordial. Like they weren't actually going at each other's throats. They were scoring points, but I don't think that either of them crossed any lines. There was some discussion over, like, should we have done more fact-checking?
I genuinely think that the chat is good for fact-checking, or the experts.
Yeah, it's kind of like your view, but I don't know. There was a bunch of people that made very fair points and pointed out, you know, a study here or a patent here. And, you know, I don't think we actually got...
It would have been great if we got to a conclusion yesterday and it was like, yeah, this is all bad and they should all be banned, or no, they're all good, or figured it out.
But that's where we started. We started with like, yeah, everyone there agrees that GLP-1s that are owned by pharmaceutical companies are probably net beneficial, blah blah blah. And then the really far-out stuff that hasn't been studied that's made in, you know, a basement is probably risky.
And we actually had a good friend of the show sum it up. Creatine Cycle Atlas, of course, said the peptide debate is as follows: Against, I would be worried about unknown unknowns. Pro, while there isn't much human data, the anecdotal evidence is pretty strong. Against, anecdotes are not enough for me. Pro, fair, it is for me. Against, okay, fair. And I think that's a good point. And truthfully, you know, people can make their own decisions here. I do think interjecting with a ton of fact-checking during the debate would be disruptive. I'm not a fan of that. I sort of just like having one person, like the guest, the debater, fact-check the other person, because if they know the fact and the other person who they're debating against drops something that's not factual, that's their opportunity to come in and say, 'No, that's not accurate.'
Throw that canister, whatever Martin had. Throw the flashbang. Throw the smoke grenade.
But I do, so I like leaving some of the fact-checking up to them and then just trying to re-enter the debate as a moderator, but I don't know. Should we do more of these? Let us know. It seems like a lot of people had a lot of fun with it and were entertained. It's hard to come up with, you know, if we were going to try and do this weekly, it'd be very hard to come up with like 52 really hot topics that everyone cares about and there are two opposing experts who are willing to hash it out and be entertaining on a live show. Probably not going to happen all that much, but when the time is right, I think there's an opportunity for us to do another debate because it was a lot of fun. And it wasn't our first one.
We've done the SaaS versus steel debate between Evvaard and Delian Asparouhov, who are former colleagues turned bitter rivals, and that was fun just because it was like the most insider of insider topics around, like, you know, revenue multiples and AI companies versus hard tech. And we're going to be talking to Delian later today. But that was really fun. That was very cordial. I think that one was less viral because there aren't that many people who are in the chair of 'I need you to decide how...'
It's so personal too, so it becomes hyper-political, like how dare you try to ban something that I benefited from. And I totally, I totally see that side of it. But yeah.
And there's the other side, which is there just aren't that many people that are in the seat of how will I allocate capital between hard tech companies in the private markets and AI software companies and SaaS companies in the private markets. It's just a little bit more niche, but it was really fun and I hope we can do more there. Someone was saying we should do an accelerationist versus decelerationist debate. I think Be Jazos was proposing that. I think that would be sort of interesting. I think I could maybe sit in the middle of that and have some interesting discussions there.
Kind of like 60 mph, stay under the speed limit kind of acceleration.
Yes, yes, yes. On that vector, I am an extreme accelerationist. Let's see what else Brandon Gell wrote in the newsletter today. So leading up to the debate yesterday, we had several guests on the show discuss peptides. In February, Andrew Huberman came on and predicted that essentially a more aggressive Ozempic would become a trillion-dollar drug. That same day, we had longevity entrepreneur Brian Johnson on the show. He encouraged people thinking about taking peptides to be cautious because we don't know what the negative effects of these drugs are. And last week, Maximus CEO Cameron Maximus, which I don't think is his real name. Is his last name Maximus? No, it's not. It's...
But I like to think of him as Dr. Cameron Maximus.
Oh, okay, okay, that makes sense. He argued that there's no real reason to be taking Rea β not FDA approved, only available in the gray market β when people who are, you know, in the market or, you know, their doctor recommends something, they could be taking β which essentially has the same benefits, can be bought legally and it's FDA approved. So yesterday, Shkreli argued, Martin Shkreli argued that the current peptide craze is more psychology-driven than science-driven and is essentially a passing fad among Silicon Valley elites who aren't really expert-trusters. In his view, there is no rational reason to experiment with compounds like Retta when proven regulated drugs like Ozempic already exist. He thinks gray markets should be shut down entirely. And there was a big debate over how feasible is it to actually try and shut down the gray markets.
Gray markets have existed in a whole bunch of other categories. I'm very familiar with the gray market for illegal flavored vaporizers because they have been the bane of the legitimate industry, the nicotine industry β it's been the bane of their existence. And so Martin argued that the FDA's rigorous approval process exists for a reason. Now, we had Max arguing the peptide bull case. He argued that he doesn't believe all peptides are safe and effective, but that a subset of them likely have real therapeutic value. He said that since people are already using peptides, a regulated white market would reduce harm compared to the current gray market. So, lots to debate there. We'll let you make your own decisions. You can go listen to the full debate and you can see where you weigh in.
Before we move on to our next story, 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 let's also tell you about Vibe.co, where DTC brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta. And man, not having Tyler Cosgrove in the TBPN Ultradome is a death knell for our clapping-during-the-ad-read strategy. We need to get some soundboard going. We need to show these supporters, these sponsors, some love, because we're fighting two men down right now, maybe three men down. We're on our last leg over here in the TBPN Ultra.
Anyway, Apple is in a completely different situation. They have their heir apparent, John Ternus, the nice guy, potentially taking the reins. Maybe this year, maybe next year. It could happen any day now. Tim Cook doesn't want to talk about retirement, but John Ternus is emerging as his most likely successor. This is from friend of the show, Mark Gurman in Bloomberg. Go subscribe. And there's an interesting β this is an interesting profile of John Ternus from March 22nd, 2026. Just two days ago, this was published, 5:00 p.m. Eastern. And it tells an interesting story of John Ternus. I think Gurman does a great job of going deeper than some of the other reporting that had like one quote from an employee that left Apple a decade ago and was sort of vague, and that person doesn't have any sort of profile, and it was very hard to read into who is John Ternus as a person. I think we're getting a clearer picture now. So, thank you to Mark Gurman for this reporting. So, let's read through some of this and then I want you to cosplay as John Ternus and let me know, would you do things differently? Do you agree with his management style? Because this might be the management style of all of Apple soon if he takes the reins.
We're basically recreating a live version of the Turnus sim.
Yeah, we're getting into an armchair and we're going to be armchair-quarterbacking Apple. So during an all-hands meeting at Apple in January, an employee asked about a spate of executive moves. The company's chief operating officer recently retired. The CFO and general counsel took smaller roles as a way to prepare for their own retirements. And in a single week in December, its heads of artificial intelligence, user interfaces, and environmental initiatives all announced their departures. While part of the exodus was related to Apple's well-documented struggles in AI, it also reflected a logical transition at a company that turns 50 on April 1st. Wow. Apple was founded on April Fool's Day. That's amazing.
Apple stock made everyone at the top of its org chart fabulously wealthy, and many are entering the stage of life that often inspires people to prioritize family β finally spending some time with their families instead of the next generation of iPhones. In his response to the employee's question, Tim Cook, the company's 65-year-old CEO, struck an atypically reflective tone. He said, 'When people get to a certain age,' some, he said, 'are going to retire.' Letting the word 'some' hang out there in a way that suggested he wasn't talking about himself, drawing laughter from the audience. It's like some people, they can't hang, but look at Warren Buffett, 65 to 95, most productive era of his career.
Tim Cook generational run starts now.
I like the idea of Cook for the next 30 years. I'm still bullish Tim Cook. I mean, I love John Ternus, but I think the 30-year run from Tim Cook going 65 to 95 would be particularly fun to watch.
Tim Cook was going to retire, then he started experimenting with some Chinese peptides.
Oh, you think that's what's going on? He's always looked...
Like now he's like, I actually got another few decades in me.
I hope so. He's like, actually, it's BBC-57 having remarkable effects on me. All right. So he said, 'The thing we have to do is to make sure that Apple moves on, reaches the next level and the next level and the next level.' Cook added, and he said he spends a lot of time thinking about who's in the room in 5, 10, 15 years. I'm obsessed with this. This is Tim Cook at his best. This guy can't leave. They can't leave. He's firing me up here. I'm obsessed.
Somebody's been listening to Senra.
Yes. It's amazing. So Cook, who's run Apple since taking over from co-founder Steve Jobs in 2011, probably doesn't expect to be in the room himself for another 15 years, but I do. I'm betting on him. While he's given no indication of an imminent transition, he's made it clear he wants his heir to come from within the company so he can serve as a mentor. The central candidate is John Ternus, senior vice president for hardware engineering, who oversees development of the devices that generate roughly 80% of Apple's revenue. At 50, Ternus is also younger than many of the company's other senior leaders, meaning he could be in the top job longer.
Ternus has spent about half of his life at Apple. Half of his life, generational run. He cut his teeth developing computer monitors, oversaw product design for the original iPad, and eventually took over development of the Mac, getting the top hardware engineering role in 2021. He's overseen an expansion in Apple's product lineup, improving quality and focusing on functional improvements around battery life, performance, and connectivity. Earlier this month, when Apple held an event in New York to announce the MacBook Neo, a $599 laptop, it was Ternus, not Cook, who did the big reveal. Little foreshadowing there.
The next day, Ternus also appeared on Good Morning America to talk up the device, the type of media appearance Cook has generally done himself. Such public signs of confidence in Ternus have been accompanied by steady expansion of his portfolio. Last year, he took control of a secretive unit developing robots, including a tabletop device with a screen that swivels to focus on a speaker moving around the room.
The smart lamp. Is this what it is? No, it's not a smart lamp. It's the iPad on a swivel arm.
Yeah, the iPad that follows you around so that you can ask it questions and FaceTime with your friends. I think there's a rumor that it can do kickflips, but...
I mean, if it has a motor, you've seen those robots that are on the bikes and it's just a big battery pack with a robotic arm attached to it. Have you seen this? Oh, this is amazing.
Apple comes out with a smart iPad device that's just called a bicycle for the iPad. It's just a little bicycle.
No, no, no. If you have a weight up here and you have a robotic arm that can hinge down, if you pull that up really quickly, you can actually jump up. And so there's these crazy videos of these robot bikes jumping up onto tables and stuff. It's very fun.
So he, Ternus, has taken a bigger role in Apple's product marketing, sometimes personally editing copy for the website and even product event materials, and he has become central to the company's work to make its devices more environmentally sustainable. Ternus has also assumed oversight of the hardware and software design teams, making him a key liaison between Apple's vaunted design organization and senior management, meaning he's already one of the most influential people in the company's history. Current and former executives who've worked closely with Ternus, most of whom requested anonymity, say he has made a mark on Apple's hardware portfolio, reversing a trend of declining product quality as the company prioritized thinness and sleekness over performance. Quote, 'He is a very meticulous engineer and a judicious executive,' says Tony Blevins, the company's chief procurement officer until 2022, who described Ternus as an outstanding and obvious choice to succeed Cook. So, this is sort of the other side of the Ternus story from that random quote that went into the Wall Street Journal that I was sort of like, I don't know if this person is β it didn't feel like they were operating on the more recent run that he's been on.
Yeah, he's been there for 25 years. If you go back a decade, he could be a completely different executive. So anyway,
He's a car racing enthusiast. He's a cycling enthusiast. I assume cycling means performance-enhancing drugs. Cycles, tren, testosterone.
No. He is a bicyclist and a car racing enthusiast. Ternus is known to take his colleagues to upstate Washington for off-road rally car racing. Let's go. Excellent choice, Tim Cook. I see why you picked him. His love of motorsports notwithstanding, Ternus, like Cook, is risk-averse and reluctant to, as one person close to him puts it, upset the apple cart. It's a good pun. As one longtime executive says, 'If you think Tim Cook is doing a good job, then you'll think John Ternus is doing a good job, too.'
That also feels like an underhanded compliment.
It's maybe a dig. I have been a staunch defender of Tim Cook. Did well on the supply chain, did well on the tariffs, did well negotiating all sorts of tough things, wound up with a great partnership with Gemini, always looks bad as you're investigating one feature on a one-month timeline, but when you zoom out over a decade, incredible amount of value created, incredible performance, and very few weaknesses in the business from my perspective. But you can take the other side of that because I know you're frustrated by every app that they release lately. But who knows?
Not just the apps. The operating system itself.
Also, I mean, the new material is rough. Like I dropped this phone a lot and it's very scratched. Whereas the old one...
The old one, I think, was titanium and really held up well.
Also, the blue β this is what Gurman was saying. He was saying that with this new material, I think it's aluminum now, they went back to aluminum. Getting the paint to actually stick is much harder than the titanium, which couldn't have been as rich. They never could have done that bright orange phone on the titanium.
You should just take sandpaper to yours and turn it into silver like mine.
Yeah. Maybe like the Casey Neistat style on the Ray-Ban frames. You know what he does where he spray-paints them white and then scratches off the white so it has β Oh, it's a really, really cool design. He's very popular for those. All right, let's maybe skip forward and talk about kind of the decision, the debate that's been raging internally about some of his recent decision-making.
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So, despite his reputation for personable management β so he's known as a very nice manager, nice guy, he's the nice guy at Apple β Ternus has at times broken with that style in ways that raised eyebrows internally. Late in the lead-up to the release of the Vision Pro headset, my favorite Apple device ever, unironically, for instance, engineers uncovered a flaw that threatened one of the device's marquee features, which is odd because this is not one of the marquee features for me, but it's the ability to stream.
Well, you're not the average user, John. You use your...
I'm a power user. I'm a power user.
Well, no. The average user doesn't use this.
Yeah. I'm like five standard deviations above on the usage. So the ability to stream ultra-low-latency audio from the headset to AirPods. This apparently was a capability central to Apple's pitch of a seamless experience for immersive video and gaming.
And this real thing. So you just bought this $3,500 device.
And $3,500 was the β And they're telling me...
When I bought one, it was close to five grand because I upgraded the storage and there were taxes and stuff and I think I threw in a case and so I was up in the high four-something. I took it back.
But I thought you still had one.
I got a new one. I got a new one later, but I took like two years off. I'm a fake fan. Fair-weather fan. They did one good Red Bull video and I was like, I gotta get back into this.
Okay. I just think it's so funny that they shipped this, you know, three to five thousand dollar computer for your head that's super heavy and they're like, and you're going to need to grab some AirPods.
Yeah. Well, you're not. That's the thing. You're not, because the audio quality that comes out of the actual strap on the headset is fantastic. It sounds great.
But other people can hear it.
Kind of barely. Like you can turn the volume down and it's so close. It's like the headphones β turn the volume down a lot and keep it really quiet, the other people can't hear.
Pretty much. Unless you were truly in like a library context, in any normal scenario...
the speaker, although it is exposed and if someone put their ear up next to yours they could hear what you were listening to, it's just not loud enough for anyone to hear it. So I never really used the AirPods linked to the headset because it's just like a separate thing. It's just extra stuff to put on.
Anyway, it was clearly important to Apple. Apple's always prided itself on device integration, hardware integration, and they are great at that. Like, you put in the AirPods and you switch over to a YouTube video on your MacBook and it just plays right there. You switch over to your phone, you take a call, it switches right back. The connectivity with their Bluetooth strategy and their wireless strategy has always been fantastic, but apparently it wasn't going well with the development of the Vision Pro headset.
So, the ability to stream ultra-low-latency audio from the headset to AirPods. This was a capability central to Apple's pitch of a seamless experience for immersive video and gaming. The problem stemmed from a missing wireless frequency in the then-newest AirPods Pro. The only practical fix was to ship a revised version of the earbuds, which the company did at the end of 2023.
So normally the AirPods Pro were on a normal revision cycle β AirPods Pro 1, AirPods Pro 2, AirPods Pro 3 β but that year they had to do like a half step and it was like AirPods Pro 2.5, and all they updated was this one little frequency thing in the wireless connection. And so it was sort of a weird move. Probably cost them some extra money to do. It was a mistake that was caused by a particular hardware engineer on this team. So when they launched the Apple Vision Pro in February of 2024, that meant that anyone who wanted this feature, they just paid $3,500, they had to spend another $250 on new AirPods that added the ultra-low-latency support and not much else. So it wasn't like, oh, you also got translation or some AI feature or better audio quality or better noise cancelling. It was the exact same thing that you had. You just have to pay an extra $250 for this. And so this was a debacle, and the debacle reverberated through multiple teams, including hardware, software, testing, and the Vision Pro group. People involved said Ternus alienated some people on staff by focusing initially on finding out whom to blame.
In the aftermath, a senior AirPods executive was reassigned. And I'm laughing because I asked Jordi this morning. I said, okay, I gave him like the overall broad strokes of what happened, and what was your first recommendation for...
Shut down both product lines. Shut down both product lines.
Just shut down both entirely. And then I would have focused on coming out with a pair of wired headsets made of wood using horsehair.
For the actual connectivity. And then no wires at all.
Yeah. And then sort of like with a leather kind...
Certainly no plastics. No macroplastics or microplastics.
Yeah. Probably creating some type of tallow to make them more comfortable.
You don't want the wood splinters. Like a beef β so you lubricate your ear canal with beef tallow.
Just go back to basics. This is introducing AirPods. Caveman.
Caveman. Yeah. That's where I would have started.
That's where you would have started. Okay. But then I went to Jordan and I said, okay, but assuming that Ternus had the mandate of Apple, like you got to ship this product. It's got to be good. You have to continue this product line. You can't pivot to beef tallow and sandalwood earpods. What we're doing is like a touch-grass product. So basically, you say, hey, we're shutting down the Vision Pro, but we're just going to sell your little patch of grass. So if you want to be immersed in something, you can just go to your desk and...
Maybe they could become like a tour guide, a vacation guide. So if you want to go see a beautiful vista, you can just go see it in person. That would be more of your idea.
But I was trying to get at what should Ternus have done? Should he have gone softer? Because it appears that he reassigned a senior AirPods executive.
Yeah. And so this issue comes down, to my understanding β this senior executive who is responsible for... It was the AirPod, right? Yeah. He did not process that the Apple Vision Pro was coming out and they were selling against this feature.
And Apple, the thing that I think they still do really well to this day, even though almost all their other software on the iPhone is a total disaster, is connectivity between the devices and syncing them and things like that. So they still do that well. And so to come out with this in just a blatant unforced error, didn't communicate properly with the other teams...
Creating Apple products for the AirPods, which are just designed to sync perfectly with all the other...
It would be like if one of the cameras was blurry or something like that. It's like, well, the iPhone, yeah, it's not dominating AI crazy features yet, but everyone counts on the iPhone for having a good set of cameras. They're always good. And so if you mess up something that is the basis of the strategy, that is risky. And there's been this debate over, is he a nice guy or is he too hard. Ternus looks at mistakes as systemic problems that could be solved with better leadership instead of putting the onus on the engineers. Someone who worked for him said this, and adds, Ternus is a nice guy. And I think it is the nice-guy thing to just reassign someone instead of this super cutthroat culture. It also is a throwback. This is what Ben Thompson was talking about today. It's a throwback to the Steve Jobs era. Steve Jobs would have said, hey, I demanded this, you made a mistake, heads must roll. And that was a bit of the company culture, at least in the lore, and who knows how true that is, but this doesn't seem like it goes too far into ruthless business behavior. But that's sort of where the discussion is around Ternus β is he a pure nice guy? Does he have a harder edge? I don't know. At a certain point, the buck has to stop with someone.
Yeah. The fact that this executive just got reassigned, they weren't effectively terminated, to me shows that...
Well, it depends on what... like, what would Steve have done?
What if they got reassigned to assembling iPhones by hand? You're going to make the first American iPhone.
Hey, it's been done. It won't be the first because we did it here first. Not by Apple. Anyway, let's move on.
So anyways, I think Ternus didn't go hard enough.
Yeah. Should have got after him personally. Said you caused a million in damages. AirPods is a $20 billion business and we had to give people refunds and create a new product line for this, the AirPods 2.5. You owe us $200 million and we're coming after your 401k. No, do not do that. That is far too aggressive. And Ternus didn't do that. He reassigned the person, put a new leader in place to make sure mistakes like that don't happen. This is the nature of running a big company that's high stakes like Apple. And overall, this profile still continues to give me confidence in Ternus and, honestly, Tim Cook.
Agreed. Tim Cook. Really quickly, let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange.
Friendly IPO inbound. And let me also tell you about Turbopuffer, serverless vector and full-text search built from first principles on object storage. Fast, 10x cheaper, and extremely scalable.
So there is a whole bunch of other news. We're in Fast Company. We are on the cover of Fast Company.
It's hard to see, but that is John.
This is Steve Huffman who came on our show last week. We had a very fun conversation with him. But we were featured in the world's 50 most innovative companies, the definitive guide to the future of business. We're up there with OpenAI, Google, Walmart, BYD. These are some big companies. Ramp got a nod and TBPN got a nod right next to Ramp. And they sent us a very nice letter and we are sitting here with a nice little mural of a bunch of our guests. Who'd we get? We got Brian...
Argo. Tell me who we got.
We were the number two media company. We got beat out by a CDN. Matthew Prince over at Cloudflare smoked us. Smoked us.
Smoked us. We didn't stand a chance. Just look at the scale of Cloudflare.
They distribute so much media. That's what it is β a content delivery network. They deliver content. We try and deliver content. We deliver three hours a day. They deliver probably billions of hours a second. I can't even imagine the scale of that business. It's everywhere. But Matthew Prince is a very innovative leader and I completely agree with the ranking, but we're coming for you next year.
We're coming next year, Matthew. It's on. It's on.
But this is a fun, fun article. We gave them some quotes. 'Producers at CNBC wake up in the morning to look at the public markets in order to plan the day's lineup. John Coogan and Jordi Hays, co-hosts of TBPN, a daily talk show devoted to the business of technology, wake up and look at what's trending on X.' That's true. 'And then they gab.' That's us. Quote, says Hays, 'We cover something like 50 to 100 topics rapid-fire 50 days a week in bespoke suits.' The duo riff on the news for three uninterrupted hours accompanied by a revolving cast of venture investors, startup founders, and the occasional single-name elite like Zuck. On good days, the live stream draws more than 130,000 simultaneous viewers. Millions more watch the highlighted clips and listen to the podcast. 'We basically leverage the algorithms,' Hays says of TBPN's programming strategy. 'Love them or hate them, they do a really good job of sorting what people are interested in.' Anyway, you can go check it out. They did this moment. That's fun.
As a boy, I subscribed to the print edition of Fast Company and always looked forward to getting it in the physical mailbox at home and reading through it.
Unwell. Alex Cooper's network is 23. So she must be media. She must be higher than us.
What's the category though?
Oh, I don't know. Because if Cloudflare is a media company, Unwell might be. It might be a CDN. Who knows?
Let's see. Unwell was ranked β oh, Unwell is in the advertising and marketing category, but not media. Cloudflare is media news and we are second behind Cloudflare. That is interesting. I would say Unwell beat us fair and square.
All I have to say is, in the words of the Canadian Olympic team, silver shines just as bright.
We've been on a bit of a silver tear lately. We're the second-highest-ranked technology show on Spotify. Thank you to everyone who's been subscribing and leaving us five-star reviews over there.
And yeah, thank you to Team Canada for pioneering cope as a strategy, as a marketing strategy.
Walmart, Databricks is in here. Adidas is in here. Of course, Ramp is in here.
Ramp is in the lemonade category.
Yes, definitely. It actually does look like the lemon category because the accompanying image has some yellow circles, but that's not Ramp-related.
This is of course related to MacKenzie Scott, who's been donating money for funding American colleges and universities. So very, very fun. Sundar Pichai got a nice photo spread, has done a ton of good stuff at Google, but it leads with 'Sundar Pichai blindsided by ChatGPT'.
Madic was number three most innovative company in consumer electronics.
Yeah, there's some other good stuff.
This is innovative too. Lists inside of lists.
Oh yeah, there's lists inside of lists. Oh wait, the category rank. Yeah. Unitree Robotics is at 39. I'm really disappointed that we couldn't beat Unitree, but I love that IMAX beat Unitree. American excellence right there. We're gonna do it. Diplo's Run Club is at 50. The Onion. We beat The Onion. That's crazy. I love The Onion. The Onion was foundational to me. Anyway, lots of fun in the Fast Company rankings.
Thanks to the Fast Company team.
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OpenAI's new nonprofit foundation announces plans to spend $1 billion this year and has appointed OpenAI co-founder... Wajek. Am I saying that correctly?
Woj. And Jacob of Coefficient to leadership positions. Still searching for an executive director.
Sam says AI will help discover new science such as cures for diseases, which is perhaps the most important way to increase quality of life long-term. AI will also present new threats to society that we have to address. No company can sufficiently mitigate these on their own. We will need a society-wide response to things like novel bio threats, a massive and fast change to the economy, extremely capable models causing complex emergent effects across society, and more. So it's great that this has gotten set up. I can imagine just how much has...
I would love to see them β I mean, they have a lot of money here. They're going to be donating a lot of money. I think it's going to be the best-funded nonprofit in the history of humanity. That's very exciting. I would love just a little carve-out for developing like consumer apps or consumer technology. Just a little...
Or at least foundational technology that could be spun out.
Yeah. I would like this. I mean, they've had so much success spinning things out. It's funded the nonprofit so effectively. Why not keep it going?
Yeah. Why change horses in the middle of a stream? If it ain't broke, don't fix it, right? So I'd like to see a little bit there and then also some high-frequency trading probably, because you got to do something with the balance sheet. So why not get some Wall Street folks in there and start eking out fractions of a penny on every trade.
In other news, Bosworth is taking over supervision of the company's efforts to become AI-native.
He's going to be overseeing Meta's AI for Work initiative that was previously led by another exec. He has been with...
Yeah, he's been there for so long. AI for Work is their internal initiative. These are going to be internal products that help the company operate more efficiently. And of course this signals a shift, a deprioritization of the metaverse, which has been in the works in different ways for quite a while. But I love Bos. I think he's a great fit to lead this internally.
In other news, Ares and Apollo cap private credit fund withdrawals as exodus grows.
This is in the news like every day now. We've been sort of nibbling at the edges of this story because it's intriguing. I mean, a lot of people aren't familiar with these names because they're of course private, or they invest in private credit. But it's increasingly more and more...
Yeah, it's a big enough story. If you have any personal exposure to private credit, you probably are thinking, hey, I'd like to reduce some of that exposure.
Yeah, totally. So two of the biggest names in private credit, Ares Management and Apollo Global, blocked investors from getting even half of the money they wanted out of their funds, a sign of the mounting strain on the $1.8 trillion market. The $10 billion Ares Strategic Income Fund limited withdrawals to 5% of shares after clients sought to redeem 11.6%. So that's not a total run. Some of this has been framed like people are trying to withdraw 50%. They're trying to withdraw 11.6% and Ares limited that to 5%. There's the $15.1 billion business development company Apollo Debt Solutions, which said it was imposing the same cap after a request to pull 11.2%. So very similar numbers.
The redemption requests, larger on a percentage basis than those earlier this month at Blackstone and BlackRock, suggest that investors are growing anxious about a liquidity squeeze in the illiquid private credit market. The world's largest alternative asset managers, which for years have fueled the private credit boom, are suddenly grappling with investors skittish about the industry's lending practices and exposure to businesses vulnerable to artificial intelligence. It was very interesting talking to the CEO of BNY yesterday, where I asked him a pretty broad question about private credit exposure and risks, and he gave a little bit of backstory and history which was helpful, but sort of agreed with the Jamie Dimon take that when a lot of people are talking about cockroaches and jitters, where there's smoke there's fire, was how I interpreted his answer.
Money managers are handling the surge of negative sentiment in a variety of ways. Funds from Blue Owl Capital moved to sell assets and Blackstone injected employee cash to help meet redemption requests. For the most part, however, managers have limited redemptions and emphasized the benefits of doing so. At one point Tuesday, the latest wave of investor jitters wiped out $10 billion of market cap from the likes of Ares, Apollo, and rivals Blackstone and KKR as shares of all four asset managers fell more than 2%.
At the same time, inflows into the asset class have slowed. Weakening demand and more investors looking to cash out could constrain liquidity further for the funds, making it harder to underwrite new loans. Limiting redemptions could also increase negative sentiment. Investment in non-traded business development companies was down around 43% last month compared to the year prior. Ares, for its part, emphasized that only a small portion of shareholders sought to redeem. Notably, the majority of repurchase requests were made by a limited number of family offices and smaller institutions in select geographies that represent less than 1% of our over 20,000 shareholders.
What do you think they mean by select geographies? Is that the Middle East that they're trying to gesture towards, that there's more liquidity demands among wealthy families and family offices in the Middle East? And so it might be more of a geopolitical issue. I don't know, 'select geography' just feels like choice language deliberately meant to point the finger or the arrow somewhere, but it's unclear.
I wonder if we will see more reporting from what the sovereign wealth funds are doing, what the family offices in the Middle East are doing, because certainly there's new requirements and money needs to flow all over the place. The firm expects the granted redemptions to amount to roughly 524.5 million. Ares said that the fund had around five billion in undrawn capacity, including debt facilities, repayments from existing investors, inflows, and a performing liquid credit sleeve. Some money managers are already indicating that they're ready for the strain to continue. Apollo Debt Solutions and Ares Strategic Income Fund both said they will offer withdrawals of up to 5% of shares again next quarter. Anyway, let me tell you about Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system context. It's in beta starting today. Go check it out. And let me also tell you about Restream. One live stream, 30 plus destinations. If you want to multistream, go to restream.com. So Dreamer, what's going on? Is joining Meta Super Intelligence Labs.
David Singleton shared excited to announce that his co-founders and the entire team over at Dreamer are joining Meta. The last few months have been extraordinary. We built Dreamer, put the beta in the world just a month ago, and saw magic come to life for real people. Since then, thousands of people have used Dreamer to build personal intelligent software with our sidekick in the world's newest and most popular programming language, English. Huh. They're building and sharing agents to manage email, calendar, to-dos, create learning tools for their kids, learn new languages, plan trips with friends, become better cooks, help them with work, achieve their health goals, or simply to creatively express themselves. All sorts of surprising and unique personal needs. These agents are as unique as the people building them because they're built exactly the way each person wants them to be. We've captured some of our favorites. And let's go over here.
They, yeah, people are building timers, receipt scanners, citation assistant. This is great if you're using ChatGPT to do your homework. You can build a little citation assistant.
People are building personal financial apps. Yeah. I'm curious again with any of these sort of Meta MSL acquisitions, you know, you have to wonder is this... can you read into their product direction at all with the acquisition? Is Meta going to be making... is Meta AI going to have the ability to make your own agents? That is still to be seen. But congratulations to the whole team.
Well, let me tell you about ElevenLabs. Build intelligent real-time conversational agents. Reimagine human technology with ElevenLabs. And let me also tell you about Vanta. Automate compliance and security. Vanta is the leading AI trust management platform. So I mean, I think with that most people will think like acqui-hire rolled into Manus, rolled into other products. At the same time, there is an interesting like diffusion in consumer question that's going on that I think might be a little bit underrated, just the question of what will adoption and retention be like when you don't have to buy a MacBook or a Mac mini, when you don't have to, you know, get any API keys at all, versus it's an app on your phone, versus it's in ChatGPT, or it's in Instagram, like bundling those things together. Actually, you know, we never really got firm data on how much Llama's...
I really want to build an agent that can predict which videos... funny videos that I would send to you and just have it do it automatically because I think our feeds are pretty synced up right now where sometimes John will send me a video and then 10 minutes later I'll send him the same video but I didn't see that he sent it. Then you look at... and then we could both log off forever.
Well, let's go over to the Chinese billionaire who says America's EV market is doomed without him. Not a problem because we're building V8s and V12s over here, baby. We're going back. We're going back. No, this is serious.
Bad timing for all of this. Bad timing for our desires to get the Tesla Roadster to have a naturally aspirated V12.
Well, maybe good timing given energy prices.
Yeah. Yeah. Yeah. It's rough.
Anyway, Robin Zeng of CATL can't build a factory in America, but Tesla, Ford, and GM rely on its technology. Inside a headquarters that's shaped like a giant battery cell. You got to give it to them. That's design. That's what we need to be seeing from our tech leaders. Apple did it well with the UFO campus. I want to see more headquarters that are shaped like the product that you sell. The billionaire who runs the world's largest battery company is confident that Americans will come calling eventually. We will return to the story later in the show. But without further ado, we have Chase Lochmiller from Crusoe in the Restream waiting room. Chase, how are you doing?
What's up, guys? How you doing?
We're doing great. How is Hill and Valley? You're the first person that we've talked to today. Give us a read on what's happening on the ground. How are you feeling?
You know, it's great. It's great to see the partnership between Silicon Valley and DC really come together. I think you know you can really feel that there's a very pro-business climate here and a lot of members of the administration here, you know, helping support a lot of the big technology initiatives across, you know, everything from AI to defense tech to, you know, other software businesses. So I think it's very, very good vibes here.
How are you introducing Crusoe when you meet new folks in Capitol Hill today? I mean, the company has been... How many years have you been working on this? It's been a number of years, correct?
Yes. So, the company's about eight years old.
There we go. Overnight success. But, yes, how are you... to the right? Yeah. I really introduce the company as a vertically integrated AI infrastructure business where, you know, we focus on both the physical aspects of bringing AI infrastructure to life β land, power, data center development, design, engineering, and deployment of large-scale clusters of GPUs β as well as the software aspects of bringing AI to life, between orchestration of workloads across large clusters of GPUs, management of GPU clusters with, you know, self-healing aspects like our AutoClusters product, and our managed Kubernetes product, as well as, you know, serving applications as they scale with things like our Crusoe managed inference product where we can serve and host models and really give the key AI applications the tokens they need.
We've been talking a ton about bottlenecks. You outlined sort of like four or five pieces of the stack there. It feels like the managed Kubernetes cluster, the software development, maybe that's getting easier with AI. It feels like we have a lot of land. Are energy and chips the real bottleneck for you these days? Like what are you seeing in terms of things that need to be unblocked? Things that the industry needs to be focused on going forward over the next few years.
I think data center capacity at large is absolutely a bottleneck, and you know that with that broad bottleneck, I think there's a lot of underlying aspects, whether it's, you know, the power to energize the data center, the people to build the facility. So like labor is a major constraint, and you know I think there's incredible blue-collar workforce opportunities across the entire ecosystem to help build this infrastructure of intelligence for the future. You know, I think chips are not a bottleneck today necessarily, but you know, energized chips are. So, you know, again, it comes back to this, you know, power and data centers really being the critical bottlenecks.
Is there something that equates to a 10x engineer in electricians? Is there a 10x electrician? And are there recruiters that can help you find those people, or is it a whole new game?
So there are definitely like, you know, like anything, there's like dispersion amongst performance for, you know, folks like electricians, but I would say the impact of it is different than, you know, in engineering. Like, you know, with a 10x engineer, you know, sometimes it's like that's the difference between actually being able to build a product and not being able to build a product. You know, I think with a, you know, call it a 2x engineer or 2x electrician or something like that, you know, it's the difference between like this thing taking, you know, 40 hours and it taking 30 hours or something like that. So it's less of a, you know, game-changing aspect versus like it just may take more time.
Do you have thoughts on what we as a society, as a tech industry, as a country can do to reskill, upskill towards this like higher-end blue-collar work? Do there need to be new training programs? Do more taxpayer funds need to flow into retraining programs? Like I've seen some policy proposals kicked around that all seem exciting, but is there anything that sticks out to you as particularly beneficial over the next few years?
Absolutely. This is something that, you know, I'm personally spending quite a bit of time on, is like how do we, you know, reskill the labor force to, you know, prepare them for this, you know, incredible opportunity that's underway in the big AI data center buildout. I think, you know, look, there's existing trade school programs, and a lot of them are older. They're, you know, sort of these very legacy training programs, and it's great. We need people to go through them, but I think there are certainly incredible opportunities to innovate across that trade school training program. I think like, you know, looking at a model like Alpha School and what they were able to do in terms of accelerating personalized education journeys and development journeys to, you know, have really high-performing students in sort of the core K through 12 metrics. I think applying that same sense of like AI-driven teaching, assisted teaching and curriculums, I think can be a huge unlock to, you know, get the folks we need here. And as well as I think like, you know, we're exploring ways to have, you know, and naturally I think a lot of trades sort of work this way, but we're exploring ways to basically have, you know, apprenticeship programs where there's a lot of on-the-job training and, you know, there's huge projects that these folks can be a part of and really learn by doing. And, you know, I think there's ways we can sort of guarantee jobs, you know, when they graduate. And, you know, things like what Lambda School did for coding, I think, you know, there's an opportunity similar here in the blue-collar trades. And then the final piece is like I think in the K through 12 education programs, we've gotten away from a lot of the, you know, working with your hands programs like things like auto shop and wood shop and, you know, where people are building things with their hands and being taught that in, you know...
I would love to take data center shop class.
Data center shop... server. Yeah.
Unironically, that would be like class.
Yeah. Sorry, Jordi, you have a question.
Yeah, I want... So, with the conflict in the Middle East impacting energy markets, capital markets, what are you paying most attention to? What is Crusoe doing to kind of mitigate any of that impact? Obviously, it's, you know, very unknown how long it'll last right now, but I'm sure it's, you know, extremely top of mind.
Yeah, this has actually been pretty amazing because, you know, while oil markets have, you know, reacted quite a bit and you've seen oil prices go up and gasoline prices as a result going up quite a bit, natural gas really hasn't. And that's largely because of the energy independence that's been achieved here in the United States through, you know, investments from, you know, the energy innovators and private sector, as well as support from the Trump administration to be a more energy independent nation. And so what you saw in the natural gas market was that there was initially a big spike up in the price of gas, natural gas, and then it came right back down to basically where it was before the conflict started. And, you know, I think that speaks volumes to, you know, the investments the administration's made and the private sector's made in terms of creating that energy independence for America. And it's insulated folks like us from massive price fluctuations in one of the key operating expenses for these data centers, which is the cost of power.
Interesting. Talk to us about the ratepayer protection pledge.
Yeah. Before we go any further, I'm just curious like, you know, with so much of global production and supply being taken offline, how long can you realistically expect prices in the US to stay stable? Is there some dynamic?
Well, that, I mean, that's my point is like natural gas is inherently more regionally priced. Like it's more affected by regional supply demand aspects. Like the global price market really is only impacted if you're entirely reliant on LNG. And so, you know, markets like, you know, Japan are more, you know, LNG driven, but like domestically here in the US, like the main spot market people are focused on is Henry Hub. And Henry Hub, like we're producing a lot of natural gas and we're consuming that natural gas, which is different than the oil markets where we might be fracking, but then we are dependent, we need to, we're not necessarily refining it and consuming it locally. Do I have that correct?
There's a couple of different dynamics there. The US is a net exporter of natural gas via LNG. But the difference between gas and oil is that with gas, the LNG process where you're actually liquefying the gas, that is a huge expense. So it basically upticks sort of the overall cost of that gas versus oil. You don't have that same challenge, right? So if there's a shortage, even if we produce all the oil we need here in the United States to serve American consumers, we're more impacted by the global market because, you know, we could basically export that oil and it's like not a huge cost uplift. The price is so much higher to sell oil in Europe or whatever, you just put it on a barge and, you know, send it across the ocean.
Okay. But with natural gas, you have to liquefy it. That's a big cost increase. And so it kind of even evens out, normalizes.
Exactly. So we're, you know, because of the amount of production of natural gas and the natural gas resources we have here in the United States, we've been pretty insulated against some of these, you know, conflict-driven commodity price action.
Okay, last question. We'll let you get back to Hill and Valley Conference. Ratepayer protection program. This feels like what Crusoe was built to do, and your experience has been generating power on site going back to, you know, flared natural gas. But walk me through how you've processed the actual rollout of that pledge, how feasible it is, how realistic is it for all the different market participants to adhere to it because it is just a pledge. It doesn't feel like it's a law, not yet at least. But how have you been interpreting it and how optimistic are you that it will have the intended effects?
Look, I think it's a wonderful trend. You know, I think the technology industry as a whole, the last thing we want to do is drive up the cost of power for grandma, right? That's like not at all, you know, the intent of the technology industry and sort of the investments that are being made by AI. So I think we have some of the most well-capitalized businesses in the history of business that are, you know, making huge investments in the future of AI infrastructure and they're willing to make those investments across the data centers, the chips as well as the power. And to me, this is a generational opportunity for society at large to basically upgrade, you know, generation infrastructure, upgrade transmission infrastructure, upgrade the grid to be able to support far more capacity than we have in the past. And, you know, the ratepayer protection pledge basically, I think, helps create a platform for companies to be investing in the energy to power these AI, you know, these AI factories. And, you know, this has been sort of the Crusoe philosophy all along. I think the trend is going to be, you know, a new term that I've been using is this term called across the meter. And, you know, people have maybe heard behind the meter power where you have like, you know, power gen on site behind the meter. The notion of across the meter is that you have both a generation resource that can be a gas power plant, it could be a wind farm, it could be a solar farm, it could be a battery, you know, a large cluster of batteries. You have a load, which is, you know, a data center, and then you have a point of interconnection. And, you know, the load can basically consume all of the power that's generated on site that it needs. Any shortfalls can be pulled in and be firmed up by the grid interconnection, and then any excess power that you have from, you know, the on-site generation can actually be supplied back to the grid. And so you get this like bidirectional aspect of the grid interconnection point, and that's really why it's called across the meter. But, you know, why this is beneficial is, you know, the investment in AI data centers ultimately leads to energy abundance because you actually have all this on-site generation where you're not using a lot of it some portion of the time, and that excess energy can be supplied to the grid and actually drive down the cost for local ratepayers. So that's kind of the, you know, the future and the vision that we're really building towards.
Yeah, I'm extremely excited about it, and it feels like just the perfect thing at the right time where a lot of Americans are asking for an answer, and this is like the first step in the right direction.
Yeah. If that can be done at scale, the people are like, 'Hey, I actually like these AI videos after all. They're driving my cost down. They're driving my rates down.'
Well, thank you so much for taking the time to join us. Have a fantastic remainder of Hill and Valley, and we'll see you soon.
God bless everyone. Thanks, guys.
Talk to you soon. Goodbye. Let me tell you about Graphite.dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And let me tell you about Lambda. Lambda is the superintelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Sabrina Halper says easy talent Hill and Valley. Briefcase equals hell. Backpack equals valley.
What is the third option?
What is the third option?
Restream briefcase. Not briefcase, the full luggage. Do you bring your full luggage with you? How do you stand out? Backpacker backpack.
What about trunks? We got to bring trunks back.
Yes. Yes. Have a porter with you that brings your trunk with you.
Four porters. Is it like Louis Vuitton that's known for doing this huge trunks? Is that it? Yeah.
Anyway, our next guest is Ryan Petersen from Flexport. He is now in the Restream waiting room. So, we'll bring him in the TV room. Ryan, how are you doing? Oh, look at this setup you guys. You look like president material. You look presidential. That's my president.
This is my president, Ryan. Great to see you. How are you doing?
What's... I'm great, man. I'm back in my... This, people don't know this is my hometown. I'm in Washington DC.
I didn't know this was your hometown.
Yeah, I'm son of a government economist.
There you go. Born to be president, forced to handle global logistics for fast-growing companies.
Okay. Well, I mean, the first question that everyone's got to be asking you is like how is the geopolitical conflict affecting your business? Because a lot of the Flexport stuff that happens, I imagine across the Pacific, across the Atlantic, you're not moving crude oil, but is it affecting you? What are the knock-on effects? Have you been processing the last couple weeks? How are you holding up? We got to print out a picture of Ryan with his face on Ben Affleck, you know, smoking a cigarette because I feel like you should just put that up in the office like every day.
There's so many... there are so many completely insulated from there. Yeah, I run a SaaS company that, you know, the 99% retention and you're like whatever happened on the front page of the journal affects me. But take me through... and like a month and a half ago I told my comms team, 'Hey guys, I'm going to take a break. I'm not going to do any press. I just want to lock in on AI. I'm just gonna... we got to apply AI everywhere in our business.' And then since then, we had the tariffs get overturned and now this Strait of Hormuz and I've been asked to do press like more than in my whole life ever combined almost. So... but I, you know, the impact on container shipping, which is what a lot of people think about Flexport, is relatively negligible. Like prices have gone up. But other than that, it's not that big of a deal.
Yes. The reality is that the Strait of Hormuz and the Persian Gulf is a cul-de-sac. It's really not that important that you go in there. Yeah. For container shipping. It's a huge deal for oil and of course the price increases due to fuel costs.
Fuel costs and like people get away with what they can get away with in logistics. So some of it is just like, ah, you know, disruption, let's raise the prices.
The bigger impact is actually on the air freight market.
Where the Middle Eastern airlines own about 18% of the world's air cargo capacity. So air freight prices have doubled and we're a big air freight provider too. So that's been helping companies navigate that, especially air freight Asia to Europe is really disrupted. A lot of that would fly into Dubai and kind of get... planes would refuel, get transshipped and then sent on. So, we've actually built like a new product that's actually working really well where we ship cargo via ocean from Asia to Los Angeles and then hot-shot truck it to LAX and put it on a plane to Europe. Which is very strange, but apparently, I mean, it saves people a lot of money and time versus air freight direct from Asia.
It's like this concept where the truck doesn't make any stops. It just goes directly to the...
Okay, I love it. I might have made that up.
I know. It sounds good to me.
Talk to me about the tool that you rolled out for tariff refunds. Was that the first AI-driven product? I mean, I imagine you've been using AI for years, but was that the first like, wow, okay, we built something new very, very quickly moment for you? Because I know you've been doing a ton of investing in AI tooling, AI software development, all sorts of things. And I want to get into that, but I want to focus on the tariff tool first.
Yeah. Well, we've been... there's a ton of stuff that we do with AI that a lot... not all of it's customer-facing. In fact, most of it's just automating work and making ourselves cheaper and more reliable. But the tariff refund calculator, not that much AI actually. What we do is basically just take your data from the government. Whenever you import something, you have a record that sits with Customs and Border Protection in their technology system. It's not a very easy to use system. They'll give it to you as a CSV file. And then we clean that CSV file and give you a report showing you exactly what you're owed. It's not rocket science, but we were able to build it really quickly. Thanks AI. So we launched it... I think it came out... the tariffs were announced on a Friday. We launched this on Monday. I was very proud of it because Monday we worked all weekend and Monday morning at 7 a.m. I was on CNBC talking about our new tariff refund calculator, which is pretty showing you, I think, how the modern world's going to look. Like you got to be really good at responding to what's happening in your industry and if you're that fast, you know, I don't... I think it'll be a long time before our competitors have anything comparable.
Are Flexport employees allowed to buy tariff refunds?
I don't know if our employees are, but Flexport is. We will be announcing... No, I can't announce it right now, but we will be announcing a program to buy people's refunds at a discount and get them cash up front. Makes sense for businesses. So that's something we're actively working on. It's a very hot market right now. I think we can build something unique because, you know, the secondary market for this is very interesting. It was trading in the 20 cents on the dollar range, 20, 25 cents, and then the day of the Supreme Court ruling it went to 50 cents and it's now in the 60s and even I'm hearing some trades in the 70s if your claim is big enough, 70 cents on the dollar to get paid now. But I think those guys are going to run into real problems because they have an agency problem. Like if you're a hedge fund, you bought someone's tariff refund. How hard is that guy going to work to actually go get the refund when push comes to shove? Like you're going to have to file paperwork and the government's going to reject your claim and then you got to file more paperwork and like...
Oh, because the original owner of the refund still has to go fight for it, but they've already sold it so they're not incentivized to go work. Whereas like it's not like you're trading the claim and then the hedge fund can go fight it because I feel like the hedge fund would be very motivated to get that claim, but they don't have the right to it.
Ultimately, it's the original importer that still has to go get the claim. And so we're going to be there to hold your hand and make sure we actually go get the claim. So I think we're uniquely positioned to help with that and create the trust across the market. So we're going to try to launch that soon. We're very active right now.
Yeah. Talk to me about the other AI initiatives. What's your approach? Is it to just tell every employee like buy as many AI products as you can, do a million demos, or is it more like build, focus on... I'm joking there. That sounds like something you would never do, but is it more like, you know, you have like an internal team that's like focused on like shipping experiments? I'm assuming it's like more internal tools because Flexport customers don't necessarily care what's happening. They just want things fast, to run on time and all that stuff.
Yeah. We have a... Yeah, we're in this incredible moment. I've declared code red a few months ago around AI because what we saw... we built this product for AI audit of customs back in October... we launched it in October of last year. And basically what we do... we're a customs broker, we help people clear customs. So we built this and as a customs brokerage you have to review... we review about 5% of all customs entries a second time with a human compliance team. And our error rate in that process was 1.8%. It doesn't mean that we violated customs law 1.8% of the time. Just to clarify, it's like, oh, maybe we didn't declare like some free trade agreement that it was eligible for, sure, etc. Those types of things. So we then built in October, we launched this AI auditor. So now we audit 100% of entries before we transmit it to the government. And then by November we started to see the data. We had gotten our error rate down to 0.2%. So it's 10 times better than the humans are. And that was like the first giant wakeup call. You're like, 'Oh my god.' And there's a lot of work at our company that looks like a customs audit. Like you're like wrangling unstructured data, doing some reasoning about it. Submitting, you know, moving documents around, submitting data to a government or some other party. So by early Q1 this year we're like, oh, it's code red. Like we have to be the company that takes AI and automates and does everything with AI and with AI agents in particular in this industry. And we have massive... like if we don't do it, it's only because of ourselves. Like and I'm paranoid as hell that we're like a boomer company that can't get this done because we've got a lot of people who don't have the skill set and like a lot of people who are set in their ways. So I've been just like leading from the front on this. We've got small teams that are kind of really cracked and building stuff and some proofs of concept where the AI agents can do most of the work that people do. And we're telling everyone at Flexport like, yo, this is the new reality of our business. And if you're not at the head of the curve in learning how to use AI, how to automate work, how to make yourself more productive... Yeah. Like let's just live in reality. Everybody's job's at risk, including mine. Like if I'm not able to lead from the front and be the best at this, then someone else needs to be the CEO of the company.
Yeah. Someone's going to build the AI native, truly AI native Flexport. Like you're not going to let it be anyone else.
I think it'll be us, but there's a chance that it's not, right? And like we're either going to become the most valuable company in the world or we're worthless. Like it's a crazy fork in the road.
One tip instead of doing... we're trying to push companies instead of doing code reds like Mountain Dew code red to do Baja Blast instead. So you declare a Baja Blast when you get back to the office.
It's just like a little bit more like positive messaging.
No. No. It's okay to declare code red, but every code red must be followed by a Baja Blast.
Once things are really turning and you're Baja blasted, just rolling out AI feature after AI feature, you need to declare Baja Blast and then everyone doubles down and goes even harder on everything. But at least you know that you're operating from an even stronger position of strength. That's the goal.
Yeah. Well, I'll tell you... I've been texting... one of my jobs here is to go learn like who's the best at this. And it's very interesting. There's not that much consensus. I've texted probably 10 CEOs of kind of like really well-established tech companies that they don't look like Flexport, but they have profiles where there's some manual labor and processes and compliance and things like this. And there's a lot of figuring it out right now. Everybody's... the CEOs are super energized and leading from the front, but I don't think there's yet a playbook for how to come in and use AI agents to do most of the work in a company. But the companies that figure this out are going to run through the economy. And I think you're going to be able to... whole industries are going to get replaced by companies that are good at this or the companies that are in the industry have to be the ones doing that. And that's our... if we don't do it, I really think the company could be worthless in a few years. It's kind of a crazy moment.
Yeah. So many assets and so much experience, like it's definitely your fight to win. Are you updating your timelines on more self-driving technology or automation in the physical world based on what you're seeing with Waymo, what you're seeing with GPT models getting better and better? Like it just feels like mass driver. Yeah. Are you going to the moon?
We are very close to that space. So, we operate five sort of mega fulfillment centers. 5 million square ft of fulfillment and they're pretty manual operations right now. I've been a robot skeptic in these buildings. I just think our teams in those buildings are not that expensive and they're pretty good. Like if you... I mean I'm on the record saying like if you have a humanoid robot that has the IQ of a, you know, AGI of a human and it's only 20 bucks an hour, like I'll hire a thousand of them in each of my buildings. And that's kind of what we've done. That said, it sort of messes with the aura of the company if we've got AI everything, automated everything, and then the cargo shows up at this, you know, building full of workers picking items manually and putting away. So there's some argument there. We've been spending a lot of time with our robotics fulfillment companies that have pitches here. It seems kind of commodified. The ROI pitches are pretty good, like maybe too good. I'm a skeptic. And we'll probably be investing in that space and we'll be a consumer of it. I don't really see us building the robots, like I think they're very competitive market. So that makes a lot of sense. And there I think the main question is like how do the robot companies actually price this? Are they going to basically lease them to you like it's on some type of hourly rate based on runtime? Are they going to ask you to actually shell out like 20, 30, 40, 50 grand for these things? And then you have to be running the math on, okay, how quickly is this thing going to depreciate? You know, how often am I going to have to replace all these motors? And I'm sure there's a bunch of different things they can do to mitigate that. But yeah, and I don't think a humanoid form factor is right for fulfillment centers anyways. Like I mean, you just want wheels and conveyor belts. That's like the number one demo that at least one humanoid company is doing.
I know. I don't get it. I mean, you just... you don't need the feet. Like, you just need the arm.
And then wheels to bring you the project.
You can ride a hoverboard around. You just add the wheels and, you know, hoverboard.
$200 hoverboard gets it done. No, I don't know.
I know that. That's... I mean, there are a lot of companies working on a lot of... What happened to the hoverboards, by the way? A while. Yeah, they came and went so fast.
You can't commute on them. If there's any cracks in the street, you'll fall on your face. It's not good. You need to be in a warehouse. Basically, that's the only use case.
Were you a hoverboard user, John?
We had a hoverboard. Do you know Rob? He actually injured himself on one. It was very dramatic at the office. Rob from... Yes. And then we had a ban issued on hoverboards in the office because we were like, I don't know if our... You have a photo of Rob on a... I think I do. Text me that please. Yes. Yeah. Yeah. It was a dramatic day where we were like, I don't know if our insurance policy covers this. It's mostly for like carpal tunnel because a lot of people on keyboards, not many people on hoverboards, and so we'll stick to the keyboards.
Anyway, have a fantastic time in DC, Ryan. We hope to see you soon. Have a great day.
Thank you. Thanks for having me on. See you guys there. Cheers.
Let me tell you about Cognition. They're the makers of Devin, the AI software engineer. Crush your backlog with your personal AI engineering team. And let me also tell you about Okta. Okta helps you assign every AI agent a trust identity. So you get the power of AI without the risk. Secure every agent, secure any agent with Okta. Our next guest is Scott Nolan from General Matter. We will be bringing him in just a minute. We can go back to the timeline. There was a very important post in here that we need to see. A gentleman got a tattoo that we need to investigate. So, someone got a 2026 Louis Vuitton glasses as a tattoo. And we will have to pull up this video because a lot of people have been wondering what tattoo they should get as a first tattoo. And Louis Vuitton glasses looks great. It looks great.
And I like the monogram across the forehead, too.
This is ad space that has previously been unconsidered. No one's thought about this before. NASA administrator Jared Isaacman announced a 20 billion dollar plan to build a permanent US base on the moon. We can move on from the Louis Vuitton glasses. Thank you. Over the next seven years, NASA is cancelling plans to deploy a space station into lunar orbit. The quote here is: NASA is committed to achieving the near impossible once again to return to the moon before the end of President Trump's term. Build a moon base, establish an enduring presence, and do the other things needed to ensure American leadership in space.
Say anything about making it a state?
Not yet. But there are some very interesting... the moon is sort of up for grabs. Whoever lands there first, whenever you land, you kick up a bunch of dust and you by default in international space law, you sort of claim like a number of miles in every direction that you land. And so you can sort of just rush the moon. This is a controversial strategy.
But let's see how it plays out for us.
No, no, no. So you can't claim the moon according to space law, which is sort of flimsy. But you can't just say, 'Hey, we planted the flag as ours or we reclaim this part of the territory.' But when you land, by law, I can't just land on top of you because I would just destroy whatever you built. And so if I build up a bunch of stuff, then I sort of claimed it. And so there is a new space race afoot. But we will come back to that story later because we have Scott Nolan who is the founder and CEO of General Matter in the room. Let's bring Scott in. How are you doing?
Good. Thank you guys. Thanks for having me.
Good to see you. Thanks so much for taking the time on such a busy day. How is Hill and Valley going for you?
Hill and Valley is great. Seems like everyone's here. Great discussions, great event.
What is the latest and greatest from General Matter? Can you get us up to speed on the development? Every time we talk to you, is the job finished? Is the job finished?
Not yet. No, it's going to be a few years. As you guys know, we're aiming for production before the end of the decade, but there's a lot of work to do to get there. The latest updates on our end are really January we got a contract from the DOE. I think we've talked about that in the past. That's $900 million to build our capacity in Paducah, Kentucky. A week ago we actually announced a new deal with EXIM Bank working together towards financing of offtake in Japan and Korea. So that's going to be our first international markets and moving into there to provide enriched uranium to our allies so that they don't have to depend on our adversaries. So step one is really domestic. Domestic production for needs at home and then overseas is the latest update.
Double click on offtake for me. What exactly is happening? Because I know the uranium's in the ground, it gets refined, eventually it goes into a nuclear reactor. There's a couple other steps. What step is this?
Yeah, we should give the overall update again. But the big picture is every reactor that you hear about needs fuel. And it needs one of two types of fuel, either low enriched or higher enriched fuel to 20%. And to make fuel, there's five steps. It's really get it out of the ground, mine it, turn it into a gas, enrich it, turn it back into a solid, and then make your fuel pellets. That middle step is one that the US used to be the world leader in. 86% of worldwide production, and now we're less than 1%. And so we're trying to bring that back. Doing that in Kentucky, all clean sheet engineering, just focus on cost and scalability. So that's what we're doing. The offtake is we have this, you know, capacity to sell and to enrich. And so utilities work with us, you know, they'll contract with us for us to take their uranium and enrich it to the level they need it to operate in a reactor.
Okay. Yeah, that makes sense. Has the... do you think the ratepayer protection plan or pledge is going to be overall bullish for the nuclear industry? I imagine that as we move towards more behind-the-meter energy production, people should be thinking more nuclear, but is that how the energy market will play out in the United States?
I think it's a genius move. So we were talking about concepts like this even before that announcement where, you know, you started to see things where communities were starting to get concerned about data centers coming to their community, driving up electricity prices. It's this, you know, when you're talking about how much you're spending in a data center, why not just produce a little bit more energy production capacity? Maybe produce 110% of what you need. And internally, we nickname that 'bring your own energy.' And so I think that's the way that you get data centers to be not just neutral, but highly beneficial to the communities that they're in. Reduce rates for everybody. I don't think it's just ratepayer protection. I think it's ratepayer reduction. And so that's how we should be getting to cheaper rates on the meter and how we should actually build out the grid again. So I think that's a genius move. I think nuclear should be a big part of it. I think enrichment is going to be the bottleneck to scaling that, which is why we're trying to solve enrichment.
Yeah. Whenever we talk about actually turning uranium into energy, at some point we start talking about new reactor development. We talked to Doug Bernau from Radiant. We've talked to Isaiah from AR. Is there another side of the industry that's waking up? Are we going to be seeing new things from the Westinghouses of the world, these old companies that maybe the capital markets are more receptive to, regulations more receptive to, and they have a unique product that can actually generate megawatt... hundreds of megawatts. I don't know how big the biggest Westinghouse reactors are, but the criticism has not been for a while that they don't work. It's been they take too long or they're too expensive.
Yep. I think it's, you know, just like people talk about all the above energy, I think it's all the above reactors. So micro reactors might work in one area, but a gigawatt scale like AP-1000 reactor is going to work on the grid. And so that side of things has always been about how do we do faster, more affordable, more predictable construction projects for those gigawatt scale reactors. Everything else is about how do we build it in a factory? How do we bring down the cost of the reactor? And so the world really is divided into those two camps. Either, hey, we're committed to it being a construction project. Let's do that better. And there's companies working on doing that better. And then there's all the reactor companies that are focused on either like 1 megawatt, 10 to 50 megawatt, a little bit bigger than that for data centers and tiling those together. So I think there's a lot of people with different strategies and all of them can make sense for their own end markets.
Curious to ask, how do nuclear energy providers respond to, you know, geopolitical events the last week where you have, you know, fluctuating energy prices and, you know, the LNG markets? Is it possible for nuclear energy providers and let's say China to see rising fuel costs and react to that, or are we more talking about they just are kind of steadily providing energy as they always do and it's less of a sector that can be kind of responsive to changes in global fuel costs?
Yeah, I think it's just on the nuclear side, it's just extremely stable. More of the same. I think you see the volatility in the fossil fuel markets and I think that if anything is probably viewed as a tailwind for nuclear where, hey, nuclear is going to be here. You know, you buy a reactor, you buy a few years of inventory on fuel which can easily be stored and you're going to have predictability in your energy costs. And for the really big reactors, the fuel cost is not a major cost. So they haven't worried about it as much. Really on their mind is how do we get diversification and a stable supply base. On the advanced reactor side, the fuel cost is actually pretty meaningful and so that's why we're really focused on not just scalability and reliability but also cost structure. So nuclear in general, I think the more volatility there is in the fossil fuel space, the more obvious it is that that needs to be a huge part of the grid. And then the fuel for nuclear is, you know, we're trying to produce more of it and we're bringing the cost down so that the advanced reactor companies can at some point potentially beat fossil fuels on a cost basis, not just on a safety and, you know, low carbon basis.
