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Uh, happy July 4th, everyone. I hope everyone had a fantastic weekend. How was your fourth, Jordy?
Incredible. It was incredible cinema.
Tyler, how was your fourth?
Can you tell us about that white party that you went to?
You can't talk about that.
What about the wedding you went to? Was that a fun one? That was in New York, right?
Yeah. Madison Square Garden.
But you can't break it down for us.
Yeah. They told us not to. NDA.
Well, I'm glad you had fun. I'm glad everyone had fun. Uh, my Fourth of July was great. It was a little... Was it humid?
Did you even get sunburned? No.
You don't even look sunburned. Not sunburned. Can't say that for the rest of the team. Half the team over.
He's laring around saying, 'Oh, I had the best Fourth of July.' Not even sunburned. No.
Yeah. Shade. Shade. You stay in the shade at the right time.
You're not sunburned. Why are you...
Oh, I'm brutally sunburned.
Okay. Okay, that makes sense. Uh, UV index. Was it humid in Malibu?
Uh, a little bit. It was a little humid in Pasadena and it made it feel very East Coast. Like it felt like an East Coast Fourth of July to me. I did East Coast Fourth of July a couple years ago and it was sort of refreshing. I don't know. It was nice. Uh, but...
Uh, drone shows were in this year.
Yes, fireworks are out given the Palisades fire, the Altadena fire. So a lot of townships are playing it safe with uh drone shows instead of fireworks. Um, which is, I don't know, I feel like it's cool. I like a drone show. I've only seen one when we were in France. It was cool. I don't have a problem with it. But I'm anticipating a backlash. I'm anticipating that people will be like, we got to go back to the organic authentic fireworks. Right.
Yeah, they're like, I like when the air quality is terrible.
Okay. It's an air quality risk for you. You notice that?
I didn't notice it this year. Did you see fireworks?
I honestly... I didn't see a single firework.
I was up at 6:00 a.m. So, I went to bed at like 9.
I did not see a single firework on the 4th of July, which is crazy. I heard some around, but uh I remember when I lived in LA, the air quality would genuinely be terrible for at least a few days because it just sits in there and if there's no wind.
When I lived in Echo Park, it was like fireworks everywhere. It's the craziest neighborhood because people in the neighborhood buy the production level fireworks. You know how normally you get like a sparkler or you get something that like shoots off a little? No, they buy the same thing that you see at like Dodger Stadium, like the cannon that goes off and goes boom. But they don't coordinate them. So it's not like there's music that's playing and then it's synced up and there's a finale. It's just whenever someone feels like lighting one off, it goes uh full fireworks scale. Uh there's some really cool like helicopter video shots of Los Angeles during I think Fourth of July where they go really really crazy. But...
Delian would do is like, I'm gonna go fly my plane at 9:00 p.m. on the 4th of July. Yeah. And just get into...
I have some crazy video of the fireworks show at Dodger Stadium before there were regulations around drones. I had one of the first drones and I flew it like through the fireworks and then spectacular footage. I'll have to play it on the show one day. Uh wildly illegal by modern drone standards, but at the time no one knew uh how to regulate those things. So you could just fly them anywhere uh which was really really crazy but a lot of fun.
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So big changes at Microsoft, big changes at Xbox. Xbox is cutting 3,200 jobs by the end of next year. And here's where it gets interesting. Not because of artificial intelligence. AI, uh the new CEO of Xbox has been very clear that they're not stuffing AI everywhere. They're going back to their roots, but they are focused on efficiency. And so the newly appointed Xbox CEO Asha Sharma has announced this morning that Xbox will lay off 3,200 staffers by the end of 2027 with 1,600 layoffs taking place today. Uh she posted her full email to Xbox employees on X. Uh and it's very candid about the operational failures and trajectory of the company.
Very notable that the first major layoff from a major company just admits that the business is not healthy and doesn't blame it on AI.
Yes, we have not seen a layoff of this scale.
That wasn't at least partially credited to like the productivity increases that we're seeing from AI.
Yes. And this feels like the most honest layoff and they're sort of forced into doing it because of the gaming community is like so anti-AI, right?
Yeah.
Few things that are going on. So yeah, we need to break this debate into strategic. Should they be doing layoffs? What does this mean for the Xbox business? And then uh the communications around it as well because the communications, we can dig into what she actually said. Uh in her email she says the business is not healthy and lists a bunch of surprisingly bad trends and aspects of the operation. Uh one, Xbox is operating at margins three to 10 times lower than its competitors. Uh it released its latest console to a smaller install base while the cost structure of the console itself was higher. Of course memory prices are going up now and so the cost of these consoles is going to be even higher in the future. And in some parts of the company, work has to pass through as many as 14 layers of management. Wow, that's a lot. In a typical year, Xbox lost 64 cents for every dollar it invested. In addition to the layoffs, Asha said that Xbox will spin out game studios that it acquired over the years. Compulsion Games, Double Fine Productions, Ninja Theory, Undead Labs, and Arkane are all getting yeeted in one way or another from the company.
Has been running Xbox into the ground for the love of the game.
You mean running it unprofitably for the love of the game?
Because I do agree that they faced really fierce competition. PS5 has a ton of amazing exclusives and then Nintendo has Nintendo. The N64 used to compete directly with the PlayStation. It was like, did you get an N64 or a PlayStation? And then once Xbox came in, PlayStation and Xbox, they fought for every exclusive. And by and large, you could play Call of Duty on either. You could play most of the games. Madden was on both of them. And so you would sort of decide, oh, I got some friends on Xbox. I'm on the Xbox crew or I'm in the PlayStation world. But then Nintendo went off and just did something completely different with the Switch. PC gaming continued to grow and became more and more accessible on more and more, you know, devices. So even a laptop that you might get for school can still play most of the library on Steam. And so you have more competition. And then you also have mobile like the hyper casual games are taking mind share. People are scrolling TikTok. There are tons of free entertainment resources that they compete with. This is something all the movie studios love to say.
Podcasts like podcasts have this.
No, you can be gaming while you watch this. We approve.
No, I'm saying because you're making this, you're not gaming.
You were spending at least back in the day...
That's true. That's true. Um, so yeah, uh they're tightening up operations at Xbox.
The question I think on everyone's mind is will Xbox be spun out as a standalone entity at some point? Uh is it too far afield from the core uh Microsoft uh mission? There was a move. Xbox was seen as a foothold into consumer for Microsoft. Of course, with the way Azure's grown and their cloud platform and their cloud business, really it feels like Microsoft is having the biggest win in enterprise and Teams and uh and cloud and all of the workforce uh and productivity tools that they launch. Obviously, they're very big in AI. Um, and so the idea that the Xbox would be at one point, it came with uh the best 4K Blu-ray player, an Xbox One S. I believe you can get one of these for a hundred bucks right now. It's actually a great steal if you want to go uh physical media, which is very popular with parents these days. Instead of, oh yeah, scroll the, you know, endless feed of Netflix and Disney Plus. Instead of that, it's like, you like Toy Story, we got you Toy Story on 4K Blu-ray. You can put it in the box and it's a hundred bucks which is six months of a streaming service. So, uh a lot of people are starting to physical media max a little bit more. But, uh the idea was that you would get this Xbox and you would get it because you were a gamer, you want to play games, but you also had an HD DVD player, Blu-ray player, and it would also serve as like your home media console and they would grow from there, get the foothold into the consumer market. But that never really materialized. Most people, if they have an Xbox, they use it to play one specific set of games. They might have a PS5 as well and Nintendo Switch as well. And then if they're in the Apple ecosystem and they play Xbox games on the weekend, they're not lamenting the lack of integration there. They're like, 'Yeah, it's fine. Like, I play the games over there. I talk to people on the iPhone. It's fine.'
Um, so let's read through a little bit of Asha's post to see because there's this key decision to announce 3,200 layoffs throughout fiscal year 2027, but announce only 1,600 today. The question is strategically, what does that do for morale? Like because you sort of have this guillotine hanging over everyone. Is this a good incentive for everyone to lock in and make the cut because you know another cut is coming? Is it going to stop complacency in the organization or is it going to make everyone start looking for other jobs and think like I could get fired at any moment? They've already teed up 1,600 layoffs. If I'm likely to be in that, maybe I should be looking for another job right now. Now, that could be good because maybe those aren't the missionaries who you want on the team, but um what do you think about the idea of announcing to your company that there are layoffs today and there's also a whole bunch more coming down the pipe?
Xbox/Microsoft Gaming has around 16,000 employees. So, this cut is quite significant.
Uh I think that uh at least in startups...
It's 10% today. 10% within the next year.
Yeah. At least in startups, the uh the best advice that I've ever gotten uh and would typically talk with founders in my portfolio about is like if you need to do cuts, cut deep, right? And this is like maybe at least uh this is like a talking point for at least like five significant founders and investors, right? Like a lot of people just repeat this, right? And I think it generally holds true. It's better to... I think the question is like why did they feel like they needed to cut 1,600 today and then also keep a 1,600 cut in the tank? Like do they need like is there some... and do they know who those 1,600 people are and they're like we just 12 months to let them finish what they're doing or is it that we haven't even identified them? We just suspect... and either way doesn't necessarily seem that great, right? Because if you've identified who you're going to cut, like you should probably just do it now.
It's much better to just do a big cut and then say, 'Look, everyone who's still on the ship, we're going on the offensive. We're going to be hiring in these areas. This is where we're winning. So, everyone get on because we're going on a big run right now. Uh we, you know, had to shrink a little bit, but now we're on the offensive with this particular strategy.' Uh but who knows? They certainly understand the implications of doing this. So, there's probably... there's certainly a strategy to...
Uh Microsoft as a whole is laying off 4,800 employees, which is 2.1% of its workforce. This is a massive company and you have to wonder because they're obviously hiring as well. Like will the company shrink this year on the back of these layoffs or will they just do 2% layoffs and then wind up growing the company 3% and so they wind up a larger organization at the end of the year. Uh there's some interesting history here because Microsoft has had a long history of uh rank and yank stack ranking they invented. Uh it was always a hardcore culture. People sort of forget this about Microsoft because it's such a dominant tech company that of course they got lumped in with the, you know, nap rooms and free lunches but uh in fact uh back in the late 70s and 80s Microsoft was famously intense, very tiny teams, huge deadlines, technical arguments. Uh Gates, Bill Gates was personally reviewing work and they had a culture that rewarded extreme competence. It was sort of an Elon Musk type endeavor at that time. Who's not nice, still founder led and product obsessed. Uh Vanity Fair had a profile on the company uh in 2012 describes young Microsoft as thrilling but also unnerving with Gates demanding intense commitment from hires and Ballmer joining in 1980 as the hard charging business operator.
Maybe Asha wants the new culture at Xbox to be thrilling and a little unnerving.
Maybe, maybe so. In the 90s uh they started to develop a monopoly. Windows 95, Office, there was a lot of lock in to Excel, Word. Business was just printing cash. Uh and Microsoft became enormous, rich, internally competitive. Uh the company still had the old uh smart people, brutal review, ship or die energy but it was becoming more layered as we saw 14 layers of management at Xbox in some cases. Uh stack ranking uh became part of the culture. Um But no one really knows exactly when, exactly what date it went into effect. But a former Microsoft employee writing in GeekWire said stack ranking had been an integral part of Microsoft culture for decades and that when he joined in 1999 it was often viewed positively as a part of Microsoft's meritocracy. And so uh this... so stack ranking was you rank all the employees, you put them on this bell curve. You're sort of grading on a curve. You have a couple A players but then there's certain people that are falling behind and everyone knows where they sit in the organization.
Do this for me just with the team.
Yeah. Yeah. Um I'd give myself S tier, you F tier, and uh I think we can start and end. No. Uh but Ballmer came in and uh and people started pointing to stack ranking as a little bit more of dysfunction. Of course, there were other uh strategic missteps during the Ballmer era and the stock was flat and this is what birthed Stratechery. As soon as Ben Thompson left Microsoft, he had tons to write about because he was there during the pre-Satya era when they were trying to get into mobile and did so unsuccessfully. Then Satya comes in, the pivot to cloud, the business does very well and uh everything's off to the races again. But during the infamous Ballmer era, uh there was a forced curve performance review. Managers had to distribute employees into buckets. So even a strong team had to produce winners and losers. So even if you love everyone on your team, the bottom 10% is going to be labeled the bottom 10%. And that creates a lot of stress. But it can also create a lot of incentive and a lot of excitement. Uh it can be tough but fair sometimes. But uh ABC...
Thrilling and unnerving. Uh ABC, how would you describe your corporate environment? Thrilling and unnerving.
Better than just unnerving. I'd rather have some thrill in there. I don't know.
You sort of opt into it. You know, ideally, this is all out in the open. It comes out in the hiring process. You don't go in blind. You know what you're getting. But of course, cultures change over time. If you've been with a company for a decade, you might say, 'I signed up for, you know, a chill monopoly. Why are we wartime? I'm a peacetime employee, you know, or vice versa.' Um and then it might be time to find another opportunity. Uh so ABC summarized it as managers grading on the bell curve. Vanity Fair's critique was harsher. They said former and current employees described stack ranking as the most destructive process inside Microsoft because it made employees compete with teammates instead of competitors. It's a good point. I mean you should in some ways just be like, 'Yeah, you smoke the competition. Doesn't matter that you were the worst at smoking the competition. At least you did some smoking.'
Yeah. But uh they always did normal. So the question is like, is the layoffs that are happening at Xbox, the layoffs that happened last year at Microsoft, they laid off 9,000 people. This year it's under 5,000. Is this new? Is this a new trend or is this just a continuation of the stack ranking process? It actually is new. Stack ranking would push out low rated people sometimes, would block promotions, reduce bonuses, uh force transfers, but they weren't necessarily doing mass layoffs around it. That's sort of a misconception. So even if they look at all the stack ranking at the end of the year and they say, okay, these people are clearly in the bottom 10%. They saw it more as an opportunity to reallocate talent from different pieces, different teams. And it wasn't always, okay, at the end of every year we're just firing the bottom 10%.
Yeah. Bottom 10% on one team might be top 10% on another team.
Exactly. Which again, thrilling but unnerving.
But it's not full guillotine, you're going to be out of a job if you're in the bottom 10%. It's more, okay, you need to find a better opportunity within the organization, you're still on the team. Now we are in a different uh we're in a different world because uh the first mass layoff at Microsoft actually came in 2009 after the great financial crisis. Uh it announced a plan to cut 5,000 jobs during the financial crisis uh and it was the first mass layoff for Microsoft. I mean that's a 30-year run uh without any layoffs, just growth, growth, growth. Uh but layoffs eventually became a more normal corporate behavior. In 2014 under Satya Nadella, Microsoft announced up to 18,000 cuts, mostly tied to integrating Nokia's phone business. So post-acquisition, they duplicated some teams. Of course, Nokia has, you know, marketers and finance people and a lot of things that are not directly tied to that product. If they're bringing the companies together, uh there might be some uh reduction in force. Uh Microsoft's own announcement framed as reorganization uh focuses on this uh reorganizational simplification. Uh Reuters reported that about 12,500 of those Nokia related cuts were related to the acquisition directly. Um the system officially ended in 2013. So they're not doing stack ranking anymore. Just before Nadella took over, Microsoft killed the numerical forced ranking and moved towards more qualitative frequent reviews. I bet there's still some OG managers there that are doing a little cheeky stack ranking.
I miss it maybe. Who knows?
Um, but overall, is there cause for optimism with Xbox? It's the hardest gaming platform to be excited about when you think about Valve. It's just a money printing machine on top of PC. Uh, the PC gaming industry broadly is doing well and PlayStation's done such a good job. Sony's done such a good job with PlayStation with creating like true intellectual property. You think about Last of Us, which is now an HBO series, and that is a PlayStation exclusive, at least for a certain amount of time. I believe they own Naughty Dog, the publisher of that, or the uh the game developer. And so there's fewer and fewer exclusives. And when Microsoft bought Activision, there was talk of will Call of Duty go exclusive to Xbox because that would be sort of a killer feature that would get a lot of gamers even if they're in the PS5 ecosystem. They say, 'Well, I want to play Call of Duty. I'll get an Xbox as well.' Uh they chose not to do that for potentially antitrust reasons.
You can't necessarily cut.
Yeah. The uh I don't follow the video game industry.
Loser alerts video games. But the thing that's easy to get excited about with Xbox is Modern Warfare 2 Rust and 1v1ing your best friends.
Yes, but you buy it in the secondary market. That's not any pennies income statement. It's rough over there.
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Well, if you've done enough Forza Horizon 5, Forza Horizon 6, you've burned out on your gaming simulator with your Xbox, you got to get over to Ferrari and pick up a 12Cilindri Manuale.
Let's pull up this video.
The 12Cilindri is the first car with a gated manual shifter to come out of Maranello since 2012.
Have you noticed that they said shifter, not transmission?
Transmission. Yeah, shifter. That's what people wanted, right? We'll debate it. Let's play this video.
And a shifter. It's a six.
Let's see.
Hell's frozen over. Pigs can fly. And Ferrari is building a new car with a manual transmission. This is the 12Cilindri Manuale. As you can see, it's a manual gearbox in a Ferrari. And what it really is is a mode of the 8-speed DCT, but Ferrari has added a clutch pedal and a shifter. It's a six-speed shifter. When you switch to manual mode, the shift knob turns amber in color, but you can also leave it in automatic. Unlike the other 12Cilindris, there's no paddle shifters, which you'll notice. If you want manual mode, uh you push the clutch in, provided you're going under 62 mph, it'll go into manual mode and then you can start driving. They tell us you can stall it. So, if you are too quick with the clutch, too quick with releasing the clutch, if you try to start it in second or third gear, you pop the clutch, you'll stall it. If you push the clutch in, you can rev it to the 9500 RPM red line and do a massive clutch drop. Um it does have some safeguards. If you try to do, you know, a six to one shift or some shift that isn't allowable, it won't let you do it. Ferrari put a ton of effort into the shift feel. So, you can sort of as you move from the center plane, there is a little bit of resistance to sort of simulate the synchronizers meshing and then it sort of falls into gear. So, it feels very much like a manual gearbox in a Ferrari has always felt, provided that gearbox is warmed up. As you can see, the gated shifter is here. The clicks are very much here. Although the DCT is an 8-speed, you only get six speeds with the manual transmission, which lowers the top speed from over 200 mph, I think 211 mph in seventh gear red line to sixth gear, which is at the 9500 RPM red line to 196 miles an hour. So, if you want to go just that little bit faster for top speed, switch it into the automatic mode. The Manuale goes on sale at the beginning of next year, at the beginning of 2027. Um Ferrari has said that the price will be right around half a million dollars for starters. I'm sure most of them will be optioned out with lots of goodies and cost a lot more. They're building 1,499 of them, and I would imagine they're already spoken for. But this sort of does give us a look that Ferrari sees the value in the manual transmission. They love the connection of it. Their customers had been asking for it. They didn't really have a manual transmission to put in the car. But with this solution, this essentially a manual mode with a shifter and a clutch, they have shown us that it is possible to take a dual clutch and make the manual experience happen for buyers. So, I'm hoping this trickles down into the rest of the lineup.
Okay. Manual by wire. They're trying to answer every 'they don't make them like they used to' complaint. How does it land with you? Do you think this checks the box? Does this count as a manual Ferrari? Are they giving their manual fans what they want or is this a poor simulacrum of what it means to have three pedals?
I think it's an obvious step in the right direction. I think a lot of people will be satisfied with this.
I don't know. I think this checks enough... are in shambles. I'm in shambles over the spec that they use in that example.
Uh I just think it looks terrible.
It does look very very base spec. Yeah.
But uh but I think this is a fantastic...
TJ Parker does not like it. He says this is far more embarrassing than the Luch face plant. And people are saying, 'Wow, that's bad. As long as it's fun, who cares?' TJ Parker says he cares. Uh, it's corny, but Koenigsegg approved by the new Bugatti CEO seems...
Look, when I see this, I think that they're going to sell at least 1,499 Luches because you have to imagine if you want...
They claim they're not doing it.
Then you're going to need to buy a Luch. They claim they're not doing it. They obviously will be doing it.
You think so? Uh these are never rules that are written down anywhere, but they are understood.
The details are hilarious and kind of brilliant. Look at, listen to this. Uh you can skip gears, heel toe, downshift, and even stall the car if you mess up the clutch. But the system will also stop you from doing something truly stupid like over revving the engine or money shifting the car into the wrong gear. If you're not familiar with the money shift, that's where you shift, you skip a gear too much and it grinds the gears and you have to pay to fix your engine, which costs a lot of money, especially in a 12-cylinder Ferrari. Uh it's slower if you shift it yourself and you need automatic mode to hit the full 211 mph top speed, but that's basically the whole point. Ferrari customers apparently told the company that they were willing to trade performance for the old school physical joy of driving a gated manual.
Ultimately, I like that they're partially listening to customers. It seems like...
We're not necessarily fully listening to customers because I don't know any of Ferrari's, you know, out of the handful of Ferrari's top customers that I know.
I don't know any that were like, 'Yeah, give me a fly by wire like gated man, you know, gated manual.'
Yeah, they were not asking for that, but they were asking for the experience. They were asking for a knob that you can put your hand on, three pedals, but they want the third pedal.
Uh, I am thinking of the Hyundai Ioniq 5N. Are you familiar with this vehicle?
You've told me all about it.
So, the Hyundai Ioniq 5N is an electric hatchback essentially, but uh the gentleman who runs Hyundai's N division formerly ran BMW's M division. What's the letter that comes after M? It's N. So, he went over to Hyundai and said, 'Give me a bunch of your cars and I will create M versions, performance versions of these cars.' Now, Hyundai is funny because it's like a family car company for the most part. Not the same muscle car, German performance, ultimate driving machine base to work with at like at BMW. But that individual has done a fantastic job adding some drama to what it feels like to drive an electric Hyundai. Uh, specifically with the Hyundai Ioniq 5N, it has something like 600 horsepower, very quick on the track. Uh because of the position of the uh battery, it stays very planted even though it is a heavy vehicle. Um so it is good on the track in automatic mode, but they added paddle shifters and a simulated dual clutch transmission mode. And it pipes in fake noise from a fake engine and you can redline it virtually and it's almost like...
Can you roll it physically?
You can physically roll it if you get really crazy, I'm sure. Um, but it's very interesting uh it's very interesting because it has all the hallmarks of something that would be hated by the car community, but in fact, when I watched a lot of reviewers, a lot of car fans drive it, they said, 'Yeah, after a couple laps on the track, it just felt like a lot of fun.' And it was just fun. And also at the price point, you're getting the performance of a two to three hundred thousand dollar car probably. Uh 600 horsepower. It feels like a manual and you can really throw it around and drift it and do all sorts of fun stuff uh with a much lower entry price. And so I was surprised that we didn't see that technology quickly come to the Taycan and other electric sort of sports cars. Uh I think it will eventually. I think it takes time. Uh, also the sound choice was interesting. They used the exhaust from another Hyundai instead of like licensing something more growly or powerful or more exciting. Um, but there's clearly something there that I don't know if the car is selling very well, but it was at least satisfying to the critical eye of, you know, Matt Farah. Yeah. Which was interesting. So...
Yeah. Uh, it's funny cuz our dear friend TJ, no matter what Ferrari does, he just hates it. He's just I haven't seen there has not been a launch.
He was sort of pro Luch. He was...
But he says this is far more embarrassing than the Luch.
You're saying that's a positive stance.
He took a heretical stance on...
I'm actually the Ferrari that I'm most excited about is the street legal version of the 296 Challenge.
I think that's going to be a hit cuz that's obviously it's going to be paddles.
But uh internal combustion engine, they're ditching all the hybrid stuff.
They should have a version, you know, the really old uh Model T, like the really old cars, we had to crank them to start from the front. They should have a virtual version of that. So, it's like a fully electric car, 2,000 horsepower, 400 mile range, but you can get out a crank from the back of the trunk and crank it to start it. That would be very fun.
Yeah, something like that.
But anyways, step in the right direction.
Give them some credit. They are partially listening to their customers. I think between the Luch and the 12C manual, they're solving their emissions problems in the headed in the right direction. And I do think that uh the Luch will have been a big enough wakeup call because it's something that no one can defend.
Okay. The Luch, famously low slung, famously small windows. Should they do a version with huge square windows like this old Land Rover? Do you see this? Was just noticing how bad this has gotten. One of the primary appeals of retro cars is the big old square windows. Are you a fan of this? Is this a Discovery? I don't know which one this is, but uh I was watching an old 90s...
I don't know. Um I was watching an old '90s um like is this...
Okay, pull up the car that...
comedy or something. Which one...
Whoa, that is so ridiculous. Uh, why are we building cars where the window sills are at chin level? Why is greenhouse... Why is the greenhouse less than a third of the height of the vehicle? Oh, the greenhouse is the top. Interesting. I've never heard that term. Uh, why is the DOT... Where's the DOT? Can we maybe add seat height or reduce waistline? Maybe both.
You know where we're headed, John.
You know where we're headed?
Pod. No windows. No windows. TVs on the inside.
It's the future. Waymo. They own YouTube. YouTube Shorts. Put them right in the Waymos.
Yeah, they like to put YouTube Shorts everywhere. Yeah.
I mean, the experience of using YouTube today is just searching for a long form video. There's a lot of... Would you like 25 reels?
Would you like to scroll past 25 reels?
Before we get to what you actually want. And uh I wouldn't be surprised if we see reels going up the front of the Waymo.
Maybe, maybe separate companies. We'll see. We'll see how long they stick together.
Uh the Model Y L from Tesla is coming to the United States. It's now available in the United States and Puerto Rico. Deliveries are still a couple months out, but it's a three row, six seat configuration for the Model Y. It's longer than the standard Model Y. Uh, it brings exceptional interior space with ample headroom and leg room for all passengers. 0 to 60 in 4.4 seconds. 325 miles of range. Front row heated ventilated seats. They all have power recline. Improved airflow. More trunk space. Active damping. Staggered tires for an enhanced grip. Longer tailgate for better rear visibility. Upgraded 50 watt wireless charging pads. I haven't seen the wireless charging pads in the wild yet. That seems like a cool innovation for your home charger. Can be a little bit slower because it's overnight, but every night so you don't even need to deal with the plug.
Remember at one point Tesla was going to build that crazy robotic snake that was going to plug in. Do you remember this thing?
We got to find a video of this. Look that up, Tyler. The Tesla Powerwall at one point had a robotic snake, I can only describe as a robotic snake, and it would find your Tesla's power port no matter where you parked as long as you were in range of the robot. That's cool. And it would plug in. Uh and they were pitching this as something that they would roll out, probably extremely complicated from a mechanical perspective. Uh and so it never wound up delivering to the United States at least, or anywhere. But uh cool idea, but wireless charging pad, obviously much more uh easy to just throw on the floor. Also, uh used in the McLaren Speedtail. The McLaren Speedtail uses an inductive wireless charging pad. That is, and I think the Macan EV might also have, or maybe the Cayenne EV. One of the Porsches also has the wireless charging pad. And there's a whole bunch of smart technology in it to make sure that if like a mouse doesn't go across, it doesn't get fried or an animal is not injured by it. It's a pretty high-tech device, but um we can find the Tesla uh the Tesla charger snake. Here it is. The image. Look at this, Jordy. This is a crazy image. Look at that. This is clearly a demo unit, but you can imagine how you pull into your garage and it finds itself and plugs itself in. Seems like depending on where you park, that could be extremely annoying because if it plugs in, you have to kind of climb over, climb under this thing. That could actually be uh worse than just a normal uh...
Yeah. It will also be unfortunate when hackers discover a back door, rises up and it, you know, kills you in your sleep. Yes.
So, I can see why they didn't ship this at least yet.
Well, there's other Tesla announcements. The Tesla Model Y dual zone fridge, $600, fits in the sub trunk and has two separate compartments that can be set to different temperatures from 0 to 68 degrees Fahrenheit. You plug it into the outlet. I love this. I think it's so cool that there's like this gadget that fits into the other thing that they have. Like they have the front trunk. No one's really doing anything with it. Why not throw a couple...
Yeah. Not a lot of manufacturers are really willing to promote having 30 to 40 beers hitting the road and having 30 to 40 beers.
I don't think these are beers in this image. What is this? Lollipop. I don't know. I think it's uh blood orange. I don't know which one this is, but they did put some ice cream. The ice cream looks pretty generic. I don't know if that's a known brand. Um...
Yeah, mattress. Cybertruck mattress. That's I don't know.
They've always had those mods.
I've always thought their accessories are quite cool.
I think it's difficult for other car manufacturers to do first party accessories because they have so many SKUs. Whereas when you're selling as many Model Ys as they are and as many vehicles that have that exact trunk configuration with that exact port, uh you can underwrite the mass manufacturing a lot easier than if you're, you know, Kia or Hyundai and you have 25 different vehicles all with slightly different configurations.
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Uh there was a team that figured out how to order pizza with iMessage using artificial intelligence and uh people are not as impressed as they should be uh because the image is uh AI, please press the order me pizza button. And it is wired up to press the order pizza button. Yes, DoorDash sort of already created an artificial intelligence for having food delivered to you. There is a button and you can sort of reimagine the UI in a very different way. Uh, Vibe Code, a button that orders you the most recent thing or interfaces with a text message. Uh, somewhat cool. Uh, I think the bull case for what Arlan is working on is that uh, iMessage is a more universal interface. Text is the universal interface. Uh in a future world where uh you know everything is done via voice or via an agent or via text stream. Uh having a centralized place and not having to use a bunch of different apps and have the best app at the right time and this one's on discount, that one's not, and this one's your payments information saved. Having all of that happen below the fold is just another layer to the user experience in the modern era that it feels like it's on the way. You've been able to order an Uber with Siri for a decade but no one does because it's not ready, it was not ready for prime time but uh we are getting there to the point where this will happen uh but it is a slow slow roll out.
Uh the AI chat apps were on a dominant run for a long time. Open at the top with ChatGPT. I think Gemini and Claude were sort of going back and forth from number two and three and you were lamenting, you were saying like what's going on in the app store. It's...
Yeah, this morning I was checking the app store charts. Good indicator of interest. Uh we have Khi at number one.
Netflix game controller at number two.
Peacock at number three. Fox One at number four. Let's give it up for Fox. Trump Accounts at number five. ChatGPT at six. Threads at seven. Let's give it up for Connor Hayes.
Uh Telemundo at number eight.
Polymarket at number nine. Gemini closing out the top 10.
The fact that Google... all over the place.
Uh yeah. And then from there it's a bunch of uh a lot of uh you know Real Short, DramaWave, all these short uh there's a company called Vibe Short AI comic dramas.
Bite-size comic dramas. Tyler, can you watch like a few hours of these and report back?
No, I'm genuinely curious. This app has come out of nowhere.
Yeah. And we talked to the founder of True Short or is it Real Short? True Short is the American company. Real Short is the Chinese company. Correct.
And uh he's at True Short. He's working on true crime AI generated short form video. Uh interesting to see where that's going. I mean certainly demand for this stuff. The trough must be filled.
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Joe Rogan is uh talking to the CEO of...
Perplexity, Arvin. Two paths to curiosity: one that can kill it and one that can supercharge it. In my opinion, the one that kills curiosity is algorithmic feeds, like the brain rot that you're fed every day with just, you know, this continuous doom scrolling. That's bad. And the one that can supercharge it is AI. Okay, like now that you could just ask whatever you want if everybody...
Thank you. This is probably true from a maybe more macro sense. Like if you're, sometimes good ideas do come to you. Some people say in the shower, to me, it's in the sauna. I think there's clearly inspiration that comes when you're not doing anything at all.
But that being said, I get so many ideas from the feed.
Ooh, okay. Hot take. I like that.
Like how many, yesterday I sent you something.
Yesterday I sent you a link that I saw on X and I was like, 'Hey, we should do something like this for this other thing.'
Sure. I don't remember what you were talking about because I'm completely zoned out.
You were just in the feed. And I don't typically, once I have inspiration, then I'm going to AI right then. I'm going and exploring the idea and saying, how has this been done before in this way? Or I was looking at incidents where heads of state have interfered with the World Cup. Which was interesting.
So I think that I like your hot take pushing back on that idea. I do think because where would we, pre-internet, if you wanted inspiration you would go to the library or stumble upon, baby, stumble upon. You ever stumble upon?
Post-internet. That's not post-internet, that was like Web 1.0, boom, it was like take me to a random website.
Yeah, but I'm saying before the internet was popular, if you were an artist and you wanted inspiration, you would go buy books, you'd watch movies, you would go look at media to get ideas.
Yeah, yeah. I think my take on this is that he is pointing to something that is correct, which is that AI feels very pull. You choose what to pull out of the AI system. You prompt, you ask for information about a specific thing. So you have to come with an idea and then you're exploring that idea and that's very satisfying for curious people. Whereas the algorithms feel very push. You go to YouTube Shorts or TikTok or Instagram and you're just being fed things and you're not starting your journey with an affirmative declaration. I want to learn more about the new Dolce Trillindri Manual and I'm going down that rabbit hole. And I think your frustration that you voiced earlier about YouTube shoving a bunch of random Shorts in your face is that otherwise you would be more likely to search for something specific. You want to learn about the history of a specific thing. And this was the case at the dawn of YouTube. It was just a search box. They'd surface a couple things, the editorial front page, but by and large, you would go and be like, I want... I remember people would just go and search like 'sick backflip' and then they would just watch like the backflip videos, right? I had friends who would just search like 'cool video' and they would just find cool videos because they were in the mood for that. And it was sort of algorithmic in one sense, but it was very like the user was driving that direction. And with the algorithms, you are taking a much more passive seat. Now the odd thing is that where does AI go? Where does Perplexity, ChatGPT, where do these apps go? Do they become more push in the sense that you show up and there's already a bunch of interesting prompts already done for you? I was talking about this...
Pulse was that, but I was also, when there was the rumor about the social network features, I was saying that like I would love to just scroll a timeline of like what are the deep research reports that Tyler Cowen is doing. He probably searches a ton of stuff. If there's something interesting in there and he can just click share, I would love to scroll that feed and I'll also subscribe to Tyler and see what...
It's funny, StumbleUpon is such a good example.
Because there was random elements, but you could always also make it more focused.
And that's generally what a feed is now. It's just StumbleUpon for like, X is just StumbleUpon for like things happening online that you're interested in.
Yeah. Random is an algorithm. That is an algorithm. You know, chronological is an algorithm. But I think what we're getting at is more of this algorithmic algorithm where the optimization function is attention and time on site that people find dissatisfying because they have like regret afterwards because they're like, 'Yeah, you sucked me in with a bunch of stuff, but that's not actually what I wanted. I wanted something more focused and directed.' I wanted more CrowdStrike. I wanted to know that your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. I also want more videos of peregrine falcons flying at 390 km an hour. That is incredibly fast.
You were giving me a little bit of shade about falcons last week and so I needed to put you in the falcon zone.
Okay. The truth zone on the falcons. What is this video? This is a video of the fastest attack animal in the animal kingdom. Peregrine falcon. 390 km an hour. Also, they live all over America.
Fantastic animal. Beautiful creature.
Yeah. And you think that there's a business to be built around home defense peregrine falcons. Take me through your thesis.
I did. I did. An Anduril for the aviation, aviary world.
Anduril meets falconry. Yes. Sort of an organic Anduril for the home.
Yes. Yeah, a lot of, you know, guard dogs are popular. Why not have a peregrine falcon, you know, perched in, you know, the highest tree on your property, ready to go?
I like this chat from Nicola. A falcon with a bicycle is the most efficient animal on the planet. I completely agree.
This fits very well with the early idea from the show with like bear security. Yeah. Bear private military contractors. I think that idea early on.
Yeah, I think it's probably easier to domesticate a falcon than a bear. Many falcons are already, you know, domesticated. Falconry is a historic, historic technique.
I just reached out to a local falconer to set up some time.
You did? Before the show?
No, not for the show, but that would be cool.
Wait, no, no, no, no. Before the show, you did this.
Yeah, the team had that video pulled up and I just thought, you know.
Yes. Now the question is, can we bring back carrier pigeons? Because if we... Yeah. John, Sunday morning, he's often reading an article. He'll text me, 'Hey, you should read this.' But what if he could just take the newspaper, he didn't have to go find the link because obviously he's reading on a physical copy? What if you could just hand it to a smart bird and have it fly it over to my house? Be way more convenient for me. I wouldn't need to be on my phone. It's a weekend. I don't want to be on my phone as during the week, and you don't have to be going on your phone. So, I think there's something there.
I wonder, I know Mike Tyson was really into pigeons. I don't know if he got into carrier pigeons, but it does seem like it could have a huge boom. I feel like there's an Instagram account to be built around someone who gets really into using carrier pigeons for everything and lives some sort of like pastoral lifestyle. Millions of followers on the back of falconry and carrier pigeon home falcon missions.
Yes, home falcons. It's good content for social media. Also, if you don't want to fly on a falcon, you want to fly on a helicopter. Be like Michael Dell, get a helicopter. And then branded. He was caught on a hot mic talking to President Donald Trump. He said, 'Sir, we don't have a helicopter. We have a Delicopter.' What a funny portmanteau. And what a funny way to correct the president.
He's really speaking the president's language.
Yeah. Let's play it. See what this sounds like. 'Sir, we don't have a helicopter. We have a Delicopter.' Like, what if this is a hard line? I like how it kind of flopped in real life but is doing numbers online. It did. It did. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Let me tell you about finally some good news. Finally, finally, some good news. Circle K, the company won the lottery. Did you hear about this story?
It's true. Yeah. So, there's a crazy story out of Arizona.
They needed a win. Actually, they've been a fantastic partner to my company, Lucy. Shout out Circle K. But let's tell you about Circle K winning the lottery. So, there's a crazy story out of Arizona that's been brewing over the last six months. Back in February, a Circle K customer named Sun Chun Kim asked the cashier for $85 worth of $1 lottery tickets. So, she shows up, she wants 85 tickets. But after all 85 were printed out, Kim found out that she only had 60 bucks on her, only $60. So, the cashier gave her 60 tickets and left the remaining 25 tickets on the counter. The next morning, Circle K manager Robert Galita learned that the leftover tickets included the $13 million winning ticket. So, he clocked out, took off his Circle K shirt, and bought the tickets from another Circle K employee being like, 'What? No one's going to notice.' So when Circle K, the company, found out about the purchase, it ordered the ticket be held in its corporate office and filed a complaint against the manager who bought the tickets and the Arizona Lottery and claimed that Circle K the company is the rightful owner of the lottery ticket. As of a week ago, at least three people/entities are claiming ownership of the ticket.
Wait, so the original buyer that didn't have the cash?
Yes. The manager who's like, 'I don't care if I lose my job as long as I win the lottery.' And Circle K is like, 'We really need a win. We need this.' So, Galita got a Circle K employee to sign the back of the ticket. Not sure why he had her do all of this. And additionally, the judge presiding over the complaint has ordered that the woman who bought the tickets but couldn't pay for them, Sun Chun Kim, be found and brought into court before making a decision on who gets it. So, she's going to have to testify and explain her side to make sure that that's exactly what happened because this is just claims at this point. How did the local Circle K wind up with 25 lottery tickets?
Who are you going with? I'm going with the manager. I'm going with big corporate.
I'm going with the manager not because I think it's ethical but I think it's unlikely that there is a rule at Circle K that says...
100% there's a rule that if you work at that company you can't buy lottery tickets at all from your own store.
Obviously because you have the machine right there, you can tamper, but they don't control...
That's probably line number one in the employee handbook. No, but it seems very unlikely that Circle K... it's a machine that just prints tickets.
