You're watching TV. Today is Wednesday, October 7, 2026. You're watching TV technology, the fortunes of finance, the capital of capital. Let me tell you about ramp.com. Time is money. Save both. Easy use corporate cards, bill pay, accounting, and a whole lot more, including Tony Hawk. Now, they got a deal with Tony Hawk. And I saw Bam Margera in the promotional video. Go check it out. Uh, it's on Eric Lyman's X account. They did it again.
Over the ramp socials. They did it again. Um, no. Uh, fantastic. Fantastic.
Chad's saying we're late today. We are late today. We were working on uh working on stream title. Working on uh the plan for the show, but we have a great show for you because we planned. Um, first off, I got a little movie review for you. I saw a movie yesterday. I went to the theater and I saw Prime Time and I and I wanted to Yeah. Oh, okay. I I want to review from those uh in on the production team who have seen Prime Time, the new Robert Patson film, but I thought I would try and take you on sort of a a film critique, a journey with a review that sort of channels the way Tyler reviews movies. So, here's my review of Prime Time.
It was good. The audio was good and the video was good. Act one was good. Act two was good and act three was good. The acting was good and the lighting and the cinematography was good and the set design was good. So overall I feel like I have a I would say it's a good movie.
Strong review. That was a good review.
Pretty good. What do you guys think? You liked it? Let's get Scott up here.
How cool was the the frame? It felt like I was watching IMAX format, but it was just 43.
They used 23 different cameras on that movie.
The cinematography was crazy, right? And the highlights blown out and there was so much grain. Like it was it was like way too stylized for
Oh, yeah. It was so stylized. I had no idea where any of this would like where these ideas came from. It feels like they were just pulling from every different camera from that era.
Yeah, it was really, really cool.
Lance Oppenheim, he does documentaries. Have you seen Renfair and
Oh, yeah. Yeah. Yeah. That's right. That's right. Okay, cool.
Yeah. Uh, but yeah, really, really fun uh, you know, creative way to throw back to like the way people watch TV at that time. 4x3.
I like that. I like that Chris Hansen was kind of like the antagonist the entire time. Yeah, it's a it's a it's a it's a complex investigation of his career and and uh and the way he's remembered. Did he go too far? And it it it feels like a little bit heavy-handed, like it's pretty clear the the the vision. It doesn't fully leave you open to make your own judgment, but you of course can which I I thought was a nice touch. And and Robert Patson is just in fighting form like
Yeah, he's in a flow state.
He's just in flow state. Yeah, he's really good. Uh anyway, we clearly were teasing it, but of course we have the TBPN road to Christmas countdown ready for you. Let's let you know. Let's remind everyone there are 78 days until Christmas. Get ready.
Get ready. If you missed it yesterday, we did an interview, a deep dive into the Christmas tree farmers association of America. understanding everything from how the Christmas tree industry is structured to techniques for keeping your Christmas tree alive.
And if you watch any tech or business content this week, it's got to be that.
It's got to be that. It's got to be that interview. Uh it was so we highly recommend that you donate. I made a donation yesterday. Uh trees fortroop.org. Give whatever you can. Uh they also do company matching. So, if you uh work at a company that matches donations, uh if you're an early anthropic uh employee and they match three to one, back the truck up. Throw down 100 mil. Come on, let's do it. Let's Let's get Every troop must have the biggest tree possible. A 40-footer. You know, I want a White House style tree in every troop's home. That would be amazing. No, but uh he he had some harsh words for the plastic tree industry. He called them toilet brushes, which was hilarious. I I'd never heard that that that slur for those uh plastic trees before, but he he had it ready to go, which I enjoyed. And it did. Uh and I noticed some people in the comments saying, "Hey, look, I understand that a real tree is better, but not everyone can afford a real tree, and the economics of a of a plastic tree just sometimes make make more sense for certain people. And I understand that not everyone's in the position to buy a brand new expensive tree. First off, that's why we do the road to Christmas. You can start saving.
And you can be saving 364 days for your tree. Also, I would say don't you don't have to go huge. You can buy a three-foot two foot tree.
Yeah, you can get a tiny tree um if that's what you can afford. And I think that you will wind up saving money on a series of small real trees over the full-size expensive plastic toilet brush tree. So, be careful out there this uh this Christmas. Make sure to support our uh our Christmas tree industry because it's important.
Anyway, um I had a question. I I I asked Ben Thompson this. Let me see if he's responded yet because he has not responded. We will talk about it on the show and get to the bottom of this later. So Ben Thompson's going through uh a bunch of a bunch of uh you know frustrations over um MacOSS. He's vibe coding building apps. The apps need permissions. We've talked about this uh the the agentic era. Um but yesterday there was a post that hit the timeline that was uh pretty crazy. A uh a sort of truth nuke uh for the Adobe crowd. Someone decompiled basically every Adobe product. It's called Artcraft. Getartcraft.com. Capable tools for artists. And you can download for free all sorts of different um tools that they have. And they basically cloned
Photoshop, Premiere Pro. Uh they it feels like they can do a lot. I'm not exactly sure if they decompiled everything in the Adobe ecosystem, but listed here is PhotoCraft, which is clearly Photoshop, vector craft, which is Adobe Illustrator, film craft, which is uh Premiere Pro, Light Craft, which is Lightroom, Print Craft, Effect Craft, which looks like after effects, and then Design Craft, which is I think in design. Um, more crafts are on the way. And so it says all Adobe products re-implemented from scratch, free and open source. And uh this is pretty pretty crazy. There have been open-source competitors to Photoshop for a long time. They've always lagged a lot. I downloaded uh the Photoshop decompilation PhotoCraft. Used it a little bit. Not bad. Pretty remarkable how many tools did make it over. It actually doesn't have everything that you would expect. Some of the really cool features of modern Photoshop are actually AI and they run on the server. So if you if you if you want to patch a hole, you've always been able to fill it in with a with a full color. You've also been able to do content aware fill where it has a basic algorithm that looks at the colors of the pixels around the textures and tries to blend that in, but it can be a little it's like pretty hallucinatory. And then recently Adobe launched uh AI fill. I forget what it's called. Not it's not contentaware fill. It's it's it's some generative fill. I think they call it generative fill and that of course runs on the server usually uses nano banana or they have a they have a couple fine-tuned models and that feature because it's server side doesn't work. So there's this interesting thing where like yeah you're in the death of software you can just decompile everything but at the same time I probably want my software to run on the server. I want the server to be stable. I I need the I need services. So all the investments that software makers made in providing like inferenceheavy tooling um actually sort of creates a little bit more of a moat. Obviously the moes are are are decreasing but there still is something where I where if I were doing heavy duty Photoshop use Photocraft would not be a perfect substitute for my workflow. For some people they'll be like yeah this is actually perfect. But you've always been able to download an illegal copy of Photoshop. Uh, but this is less illegal maybe. It's unclear. It's unclear because it it's probably
I don't know. But it's going to be fun to watch the open source decompilation uh community uh duke it out with all the tech companies. Um
yeah, the interesting thing is um there's been so many reasons to not buy Adobe for so long, just given that historically I would think of an idea for even like a joke and I'd be thinking in my head, I wish I had I wish I had the time to Photoshop this or I wish I had somebody handy that could just Photoshop this.
Now you just you get there with a prompt. Yeah. Especially for these sort of like less professional use cases.
Um tools sort of stick around if it's like you need to lock in and do like a full day of work. Like there's no substitute yet for like I if you were going to be spending eight hours in After Effects or eight hours in Premiere Pro, you're probably not going to be able to replace that with a prompt. But if it's like, oh yeah, you want to just like, you know, composite two images together for a meme or add some text, a prompt is going to get you there. If it was, and it would have been 20 minutes of work in Photoshop, now it's uh, you know, one minute of work in Chachi PT um or any other tool. Uh, and so the obviously we're seeing like these two spikes of intelligence right now. Anything that can be done in a purely virtual environment is accelerating extremely quickly. anything that touches like the real world or requires human data or requires like this flywheel. Uh that's much slower. Uh and the OpenAI math results like show a similar story. We can talk about that more later, but uh I'm sure most people saw it. Uh it's a pretty crazy result. Uh what is the what is the highlight the high level? It's like 70 different problems, right? I think it was so I think the the full number is 722 like manuscripts. Okay. And then so it's kind of hard to like how do you delineate like an actual problem? Yeah. Um but yeah there's like a massive list of like unsolved problems.
Yeah. The the press release just calls it a broad range. It's like we solved math. Um uh it's uh it's interesting. There's a there's a good Josh Gans article analysis on Substack that we can read through later. Um but uh and and Francois Chalet uh the creator of RKGI broke down a theory of what's going on with this big jump in progress and what it means for overall generalization. He said, "What if the jagged frontier is mainly math plus code which you can push arbitrarily far with reinforcement learning learning with verifiable rewards RLVR and everything else starts to plateau because it's still bottlenecked by human generated data. Model performance in nonverifiable areas has kept improving steadily, albeit much slower than for math and code. But is that steady improvement a side effect of a higher G the general intelligence itself driven by RLVR or only a function of the amount of h new human data getting injected into training which is still continually happening on a massive scale? A lot of things depend on the answer to this question. And so what's what's interesting is um it really this is a this is a this is a less of a feel the AGI moment and more of a field of super intelligence moment for me personally because no human intelligence has ever been able to solve this many math problems this quickly at this level of mathematical ability like it's just it it has never happened in human history. uh it's beyond it feels like it's beyond Einstein grinding on this or anyone else really. Uh and so it feels like it's something new. At the same time, it's very spiky. I still like the machine intelligence name because it has a different shape and we're trying to mold the machine intelligence into something that slots in neatly into like a human a general framework but it keeps breaking out and spiking in these odd areas because of the the the ability to train in these environments. So um the terminology debates are sort of irrelevant. Um there's clearly some near-term impacts that are worth working through. Uh as I mentioned earlier, Ben Thompson has been working through these MacOSS frustrations while he goes deeper in agentic AI. Uh he wrote about this in a strategy post called Apple and the hacker's future. He said, "What I'm much more interested in is controlling the software layer myself. The fact of the matter is that with AI, you can decompile almost all existing software. There is a revolution happening in gaming over the past few weeks as game after game is decompiled to source and ported to any platform you wish and you can write your own. That means my software that interacts with my agent in the way I want it to for everything. That's way more exciting than praying Apple delivers the right API and that third party developers don't suck. And so, um, he's he's talked about the frustration of of you use an agent to build a piece of software and it and that piece of software lives on your Mac Mini or your computer and it needs to access the desktop to save files or it needs to uh access the network. And when you build a new piece of software, Mac OS says, "Hey, this is a this is a piece of software you're running, but you need to explicitly give it permissions, you have to click yes on the popup." We're all familiar with this from iOS. You download an app and it's like, "Can it send you notifications? Can it have your location? Can it get into your camera roll?" Right? Like these these apps, even after you install them, they're very walled off for privacy reasons, which is great. But Ben wants to operate at a different level of abstraction. give a coding harness the ability to write software that then maintains the same level of uh of approvals and uh and access uh and permissions that the overarching AI agent has been given. Um and there's been this bullcase for Linux. It's possible that we see more Linux boxes and maybe even Linux on the desktop because all of the downsides of Linux are offset by oh well now you just have a prompt to interface with it instead of anytime like getting like the volume changed in Linux is sometimes like a command line thing and it's such a hassle but if you have a prompt there you can just say oh like fix this driver change this thing and it'll just go do it. Um uh but uh the uh what's what's interesting is like we went from like old games like Halo and Modern Warfare 2 and Minecraft being decompiled uh and then Photoshop and some other Adobe software. And I'm wondering like how far are we away from just straight up decompiling Mac OS? Because if you can decompile Mac OS, then you could potentially patch security features that you don't like, uh, you could change that fact that every new application needs permissions granted explicitly. You could just go into the source code and recompile your new version of your operating system that's based on Mac OS. Now, clearly Apple's not going to be happy about that. It's really complicated, but what
Yeah. I mean, isn't that just like jailbreaking like your iPhone? We've been able to do that for a while, but no one does it because then you lose like a bunch of features of
Yeah. I wonder I wonder how hostile Apple would be to that because is there a way to to decompile jailbreak uh Mac OS and still appear to Apple servers as like, oh yeah, this is like a legit Mac OS install. And so uh we will still serve them iCloud or we will still uh treat it as a viable iMessage recipient, which is like what people want. They want iMessage. They want the ecosystem. They want security updates. But then they also at least the the hackers in Ben Thompson's analysis.
Sure. They'll love it and they'll encourage it and they'll celebrate it.
Yeah. Yeah. Uh it but it does feel like it does feel like it could be good for the hacker's future in the Apple ecosystem. Like if you can eventually just point an AI model and say like, you know what, I don't like this about Mac OS, but I like everything else. just change this feature at a very root root level and it goes and breaks in and does exactly what you want. Uh hackers could be like, "Yeah, okay, we're staying with Mac OS for a while." Because the hardware is great. They obviously still have a huge hardware moat. Um but there are a whole bunch of other uh issues in the new world where software is infinitely malleable. Uh regardless, like this is all just firmly the domain of hackers. Even this uh even this Photoshop like is Adobe moving on the news like uh Adobe Market Cap where we traded down 3% 5% over the last five days 10% over the past month. I don't know. There's like an ongoing SAS apocalypse narrative. It's down 33% over the past year. Um but uh it doesn't seem like people are are are cancelling their Creative Cloud subscriptions in mass because of this. But uh it'll be interesting to see where this goes. This is definitely like uh you got to be pretty early adopterish to be like, "Yeah, I'm running the decompiled version of this thing and like I modded my own Halo into Modern Warfare and I'm having fun with that." Um I did see someone got a nuke in Modern Warfare 2 Minecraft Edition. Did you get a nuke?
It seems like you did drop a nuke on this. Yeah, right now.
Uhoh. Uh oh. I feel like the sound effects a little antilimactic there. Okay, there we go. I guess it would be quiet. There we go. The truth.
Goodbye everyone. We'll be back in 5 seconds. This animation's a little slow, so I don't know.
We're going to work on speed.
We got to speed that one up. Um, last thought on on uh math day yesterday. Um, you got to wonder where companies like Harmonic go. Vlad's company. Their focus has been
a few of those companies.
Yeah. their focus has been, you know, building mathematical super intelligence. Um, it's not to say that, um, it's not to say that that they don't have a bunch of different angles that they could still run at. Yeah. Um, but I imagine that is the kind of thing that they would have wanted to do, you know, themselves versus um, uh, getting, you know, sort of frontr run by a more uh, general purpose lab.
Yeah, it's uh, yeah, it's interesting. I wonder where else there's still a few Millennium Prize problems out there that you could grind uh if you're in the race. And and then there's so many other things that you can sort of uh pivot towards if you're uh working on super intelligence of any kind, but specifically mathematical super intelligence. You would imagine that that uh you could go and if you've made progress, yeah, maybe you're a month behind solving all these conjectures and whatnot. Uh but you have a solid model, you could go and and you know try and dominate in an engineering vertical, right,
John? Did you think that? Uh do you value human intelligence above all other human qualities?
I knew the answer to that already because we've been operating with golden retriever golden retriever mindset.
Yes. Yes. The golden retriever mindset. Uh two years ago we sort of coined this on the show. It's a two-year anniversary of TVPN, by the way. We started in October of 2024.
Yeah, two years in. Um, but yes, the Golden Retriever
be what was it? Hot, friendly, and dumb. Something that uh it was like, this is pre-look maxing, but it was basically like focus on physical fitness. Don't make enemies. Be very friendly, and don't think you're the smartest person in the room. No one really likes a know at all. But also, you're going to have a bad time if you uh if you prize value in if you value intelligence above all other human qualities, you're going to have a bad time. That was Ilas Sudskver in 2023. And um yeah, it seems like that is playing out in real time, but there are still a whole bunch of other things. And I don't know, people are val like intelligence is still really important obviously. It's just applied in so many different ways. Uh like it it's not it's not it's just odd that like the IMO gold medalist to startup founder pipeline is super rich and yet the work of a Scott woo at cognition daytoday does not look like solving IMO IMO level
looks like high stakes poker.
Yeah. Yeah. Yeah. deal making, hiring, strategy, implementation, product development. There's so many other things. It would be very funny if it was just like, oh yeah, actually like solving math problems is the most like if you can solve math problem, your your company will make like a billion dollars. So, you got to solve like 12 a year, so you got to just staff like a lot of mathematicians and like just be solving these. And like, yeah, as long as Okay, how are you going to solve 20 of these math problems that get you a billion dollars each next year? because we need to see growth. We need to underwrite these. It's pretty high margin, but you got to pay the mathematicians a lot. No, it's never really been that that's not the work, but uh it's all these it's all these other human qualities uh that seem to be sticking around. I don't Run says, "Do not let yourself be reduced to the status of an audience at a magic show uncomprehendingly clapping as m machine intelligence creates parcels of astounding knowledge. All of this is for us to be understood by us to sate our own curiosities. It's all really happening. Uh yeah, the good news here, you know, the internal model that uh was used.
Why is he taking shots at being an audience member at a magic show? That's like my favorite
I I'm I'm I'm like the number one audience member at a magic show. I love magic shows and I love being there being like, "Wow, this is amazing. That's the best. That's the best. I don't need to be the guy being like, "Oh, I figured out the magic trick. I I know how it works." I just want to sit there and be odd. And that's my experience today. I'm just like, really impressive math, guys. Awesome. But I don't I don't need to. I'm good. I'm good. No. uh it is a good it is a good message for a particular for a particular person but I think if you didn't understand the first thing about the theorems that are trying to be disproved you're not really going to be satisfied by trying to understand the proofs uh you can just uh there are some really funny ones though somebody uh somebody was making fun of like our our our chud universe is what was that one you can do a for you can do forier transforms in O of N log N to the 0.99999999999999 time f this chud universe. It's just like it's the least elegant solution to the to the math problem. And and somebody was somebody was sort of arguing that like uh like a lot of the previous work in math has been like oh try and find the elegant solution and then the AI comes in and it's just like there's an inelegant solution and uh and it just tells you a lot about both the mathematical disciph discipline and like the nature of our universe that there are like these weird quirks. Um anyway uh where should we go next? Uh SpaceX looking to raise 40 billion to give to Jensen. Blockbuster debt deal is the latest sign of vast spending on chips and other infrastructure. Uh the company is seeking to raise about 10 billion in bank loans and 30 billion in investment grade debt to fund its blockbuster chip order. Private capital group Apollo is expected to lead the financing effort and help sell the debt to a broad base of investors. Uh PIMCO was among a small group of lenders in talks to fund the deal. SpaceX financing plans underscore the vast sums that are being raised to pay for investment in data centers. Uh insurance and pension funds would be able to buy SpaceX's debt due to its BBB credit rating, the second lowest investment grade ranking. Such funds take much more limited positions in junk rated notes. Apollo and PIMCO declined to comment. The deal would strengthen ties between SpaceX and Nvidia after Musk vowed to double down on the group's technology for his AI initiatives. It would also mark a win for Nvidia as it contends with growing competition from chip makers aiming to challenge its dominance in advanced semiconductors. We've decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer and we greatly value our close cooperation and partnership on many levels.
That's interesting because that's that's only on the short term, right? Because he's still doing Terra Fab. He's going to make his own chips. He's making his own chips at Tesla and he has a deal with Intel for that.
So, he's kind of just saying like I think he recognizes like right now it's very strategic to just um go kiss kiss the ring basically. Um, investors whom SpaceX had previously approached about financing its purchase said they only received a short two-page deal memo with pictures of outer space and an arrow pointing out that the company was going to build data centers somewhere in the universe. How are we supposed to take that to IC? One of the people said, uh, referring to their investment committee that approves transactions. Uh, sounds like a pretty good memo to me.
I was I was laughing at this, too. And then I was thinking like it really is pretty simple. Like it's $40 billion. Buy some chips. What is the value of the chips? How do you underwrite those? Like it I I mean I guess you need more, but you can probably uh you can probably back of the envelope it yourself. Um but it is it is funny that uh the photos that we saw in the S1 made it into even the even the private credit side of the of the deal making.
Yeah. I think I think investors if you're planning if you're exploring putting billions to work Yeah. into AI infrastructure, you should probably be doing a lot of your own work on understanding the risks totally how this could go wrong. Yeah. And uh I think that uh giving money to Elon and just sort of trusting the process has worked to date, right?
And so he's sort of earned the right to have a, you know, shorter than than average memo, I think, at this point.
Yeah. I mean, I guess you can underwrite the core business. I mean it's already been rated as tripleB so there's already a credit rating that you can go from but then you can also you know build your own credit rating from the SEC filings from SpaceX and you can look at the traction there um and then you can understand yeah I mean maybe you need to understand a little bit more about like the economics and the tokconomics that they expect like do they expect to just sell all of this as Neocloud compute for other um for other labs are they thinking going more internal. That probably does affect the creditworthiness for this deal. So, that might be something you want to put in investment committee memo, but uh you can just build your own, I guess. I don't know. It seemed like uh yeah, uh pretty pretty aggressive, but we'll see.
Uh what does Nick Presler have to say? Says, "Look at him. That's my qu. You're what? You're qualitative. My vibe specialist. Look at him. You notice anything different about him? Look at his face. I'll give you a hint. His name is Jaden. He won a local poetry competition in Bushwick. Yeah, I'm sure of the vibe. This is This is based on real reporting here. Uh from AQR Capital. Uh quant firms are hiring idea guys, not quants. I've been skeptical about the whole software is commoditized ideas are the moat argument, but I've seen firsthand the best quant and technical firms in the world hire thinkers, liberal arts grads, and generalists. I predict the trend accelerates. Uh yeah, I actually know now that I'm thinking about it, I know a lot of hedge fund guys who have philosophy degrees and I'm kind of biased here based on the sample size, but I know a lot of people like have studied history and gone into uh investment investing and they brought a very differentiated lens to the practice and some of them did really well because of that because they were able to you know understand the way like the Euro zone might develop more because they studied, you know, history in a PhD program for
they they had a crazy Euro summer.
Yeah. Basically, so uh let's let's read this actual letter. The question being asked not only in finance but also across industries and business schools is what remains a durable differentiator once AI has surpassed many of humanity's analytical and technical capabilities? Our answer is not what most people would expect to hear from a quantitative investor. Of course, AQR, what is AQR actually stand for? It's like advanced quantitative research, I think.
Uh, is that right? Did I one shot?
applied quant. Oh, we should know that. Our answer is not what most people would expect to hear from a quantitative investor or in business school dean. creativity and emotional intelligence. That's what's going to get you the big bucks on Wall Street going forward. Uh you got to win that poetry competition in Bushwick if you want to get the big bonus. Uh not because these qualities are wholly immune to AI, but because in the age of AI, they are domains where people can develop a durable advantage. They AQR said golden retriever Max. They they they agree. They agree. the era the the time of the golden retriever is upon us. Um anyway, let me tell you about Cisco. Cisco critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. If you're in Europe and you're building the data center, you got to call Cisco. Uh you also got to procure a beautiful, beautiful building because uh take a look at this European data center. Amazing. This solves so much. This is so good, right? this is what we want. Uh this is this would change so many things if uh if our if we had a data center if if Abene looked like Versailles. It's a completely different conversation. Jordy, do you disagree?
I'm on to something right.
Give me credit here. Make build Versailles as a data center. Actually, turn Versail into a data center, then copy paste it into every community in America. Uh, okay. So, I'm so I'm so confused because this image
came out of a thread from the co-founder of Mistral.
Which he posted announcing Lechonk, their new model, yesterday.
Oh, it's it's a train station.
But then it's but then it's getting community notice. So, I think he might have been just
Was he messing with people?
Brutal. It seems like it's a it's a train station in France.
He pranked us. Well, it will be a data center soon. I think the traction on this post shows you that people want beautiful data centers. Uh, and this is the future. Uh, the other the other interesting thing, have you heard of like an ice?
That is such a good bit. I love that ML is is leaning into the um to the heckling that they that they have to go through from uh America. I think it's really smart and uh I'm rooting for them.
Have you seen I'll put this in the Let me see. I'll put this in here. Uh iceberg houses. This is new for the mansion section. I don't know if this is real, but it certainly could be with enough civil engineering. Uh take a look at this. Tell me that this would not also not be a great data center uh design. Uh look at this. Zoom in a little bit. Okay, so you got the house up top. Looks like a normal building. You go underneath. This one has a variety of of amenities.
Bowling alley, swimming pool, movie theater, ping pong table.
Yeah. Full deep underground garage.
The other one doubles as a
The other one's a little higher res. You can zoom in on this. This one's cool, Jordy. The uh this one that if you you could put a lot of a lot of CP a lot of GPUs in there.
That's P. And I think you still you vent it up just through the chimneys that you already got in the house. Think you're good to go.
And the sound cool the sound like people a lot of people complain about the sound that would be underground be diffused. I don't know. There's something here. We're close. We're close to solving it.
We're close to solving a reporter was on the ground.
Apparently inside a data center. They were asking one of the construction workers his thoughts on the current labor market. Let's pull this up.
So, when you hear data centers, what comes to mind?
I'm working at Homer City building the new data center.
People say it's only temporary. It's only when they're building it out. Then what happens?
Hey, every job in my field is temporary.
That's true, too. Okay, I hear you, man. So, when you hear data center,
the reporter's like, "Yeah, that's a good point, actually." Yeah, people haven't really said that before. Like that's kind of a genius take. I don't know. I've never heard that. It's like, yeah, they're temporary, but every construction job is temporary. That's the whole point. Um, funny. Anyway, uh, what if instead of Greek life, it was Chinese life? Yeah, bro. I'm rushing. Mao Z dong next semester. There's like 1.4 billion people in my pledge class. Uh, I thought that was just very funny instead of Greek like because we use the Greek alphabet, you know, Chinese be very funny. Um, anyway, uh, we got to talk about Porsche. Huge news in the Porsche world. The Mission X, the Mission E, they've dumped the electric pitch for the hypercar.
Flat 8. They're going analog. Will it have a manual? I don't know. But they're I mean they're they've seen the Carrera GT. Everyone still loves it. People are uh not buying the Rimach Nava. The this is going to be absolutely incredible. Fina Batista. They want they want an engaging experience. Uh I have a thesis that uh car makers are basically in their version of the quartz crisis. So in the 70s or 80s, the quartz crystals were uh built to create watches that do not require mechanical movements to tell the time. And so all of a sudden, instead of having to go to
A Rolex to get a reliable watch that was crafted from a watchmaker who understood how to actually get something like a perpetual calendar on there that might actually been useful. The quartz crisis made it so that you effectively brought modern technology, digitization, and a super accurate watch product to the market for way cheaper. And the end result was that the watch industry didn't die. Rolex is still going strong. Vacheron, Audemars Piguet, plenty of other brands made it through. But what did they do? They didn't try and lean into quartz and cut the prices and say, 'Oh yeah, you can have a digital Rolex for, you know, we're going to compete with Timex. We're going to compete with the G-Shock. It's going to be 50 bucks.' They said, 'No, we have a brand here. Let's maintain this and make this a status symbol and experience.' And I think that's what's happening with the car market. It's like either you're going to be electric self-driving Tesla Model Y competitor, Model 3 competitor, something like that, Waymo, or you need to be a Ferrari, an SP3 Daytona or what Porsche is doing with this new vehicle. So tell us what are they actually doing?
Yeah, I mean that's what Mate Rimac from Rimac and Bugatti has been just like objectively saying. He's been pushing this new narrative, leading from the front. Easier to do from Bugatti where they've already stayed more true to their roots for a long time. But Porsche is in an interesting position because they have danced with, oh if we do an electric Cayman, an electric sedan. They did sort of electric the Taycan's sort of an electric Panamera. They have an electric, they have a few SUVs. The Macan is electric. And the performance numbers are incredible. Like the Macan or it's the Cayenne Turbo Electric is dramatically faster than 911, which is just bizarre to see on the track. And yet, that's not emotional in the same way. It's probably not the right bet for the heritage of the brand. And I think we'll see much more excitement around their flat age.
Yeah. Mate in a post yesterday or the day before was saying like it's over, like basically the game of trying to produce the most advanced cars for the lowest price or even for in the premium price range is going to just be tougher and tougher and tougher. So he's saying, you know, encouraging using premium materials, analog switches, all these less. That's the thing that I'm most interested to see with the Mission S is how much they've been able to pick up the feedback that's been happening from enthusiasts over many years now, right? I'm sure this car has been in development for many years at this point, but still, will they go for a manual? How analog will the cabin be? Yeah. And the switches. Material selection.
Part of what's, you know, Porsche in some ways never went as far as a lot of the other manufacturers. Like they didn't lean as heavily on screens. They kept a lot of analog switches. They did make some sacrifices over the years, but they never went all the way. Like you never got in a Porsche and felt like, okay, thank you for putting, you know, eight TVs in my face.
Yeah, it feels like maybe not every year, but they've pretty consistently over the last 20 years, they've always had some manual type product. I personally think we got to go further. Everyone says, 'Oh, I want to go back to a combustion engine. I want to go maybe back to like an air-cooled engine. No turbochargers, no superchargers. Don't put that in. And I want a manual. I want to go back even further. I want the crank start.'
Crank start the hyper car. You know what I'm talking about? Yeah. Cranking starting your car. That's the way we used to do it before we got all this fancy starting technology. And I think that if you bring that back, it's going to make it even more emotional and visceral.
Yeah. Yeah. Taking it too far would be great. Like how far is too far? We don't know yet, right?
Yes. Go back to the wagon wheels.
Yeah. But really max out the power because some of these cars it'll be like wait you can just get a 1000 horsepower out of a V8 these days? Like what happened? And a lot of that's like advances in material science and engineering that.
So anyways they announced the development of this of the Mission S yesterday.
And but they're going to be actually showing it off on the 15th so we don't have to wait that long. Very exciting. 15th of October.
Yes. Wow. Same day as the Tesla Model S Roadster or Tesla Roadster.
Yeah, that's crazy. On the Roadster, I've been looking at the weather in Texas.
Yeah, from what I'm seeing, the weather's been getting worse.
Oh, a little tinfoil hat here. We got light wind. Okay. No rain. No rain. And it's been somewhere around 90 every single day. Okay. So, it seems like a pretty typical Austin fall weather.
So, well, it's possible that the Tesla team saw what happened with the Mission S needs to respond. They're going to do internal combustion engine.
There we go. Manual gearbox. Crank start. Cranking starting your Tesla road.
Yeah. Says, 'Uh, maybe they put a top hat and driving gloves in it.'
That'd be great. I'd like that. Uh, the Jaguar Type 01 was revealed. 1,000 horsepower. It is electric, but the design has evolved just a little bit from the original concept car, but Galopnik likes it. They say, 'Is everyone ready to be calm and normal about the new Jaguar yet?' 400 mile range and even wilder than the concept. I think there's no arguing against the Jaguar Type 00 concept being the most talked about car of the past 2 years even as we've gotten closer and closer to the reveal of the production Type 01 and it seemed like there couldn't possibly be any more discourse about it. I'm not here to add to that discourse because it's frankly exhausting. I just want to talk about the car, which I find to be extremely cool regardless of whether or not it will actually be a success. Jaguar just revealed the Type 01. It does feel like a car that exists because the Cybertruck exists. It feels like the Cybertruck sort of not really ushered in a new era of brutalist modern cyberpunk aesthetics, but it certainly shook some trees loose where designers were able to take more risks at a time when cars were collapsing down to, you know, the Jaguar F-Type and the and an Aston Martin and a BMW. Like they all started looking pretty similar. And there were just these form factors. A lot of that was for safety reasons, but a lot of it's just for logical like what the market will buy. Everything winds up looking the same. And when the Cybertruck came out, even though it wasn't like a blockbuster seller, I think it just let people know that it's worth taking some risk every once in a while in your portfolio. And so this the new Ari the Cybertruck. That's the ideal three-car garage.
The new three-car garage. Type one. Yep. New Valari Cybertruck. You actually have all your bases. You are in the cyberpunk future if you have those three cars.
The best part about this Jaguar Type 1 is that it's powered by Nvidia. Under its stunning design is Nvidia Hyperion, the computer and sensor platform that takes in everything the car sees and senses, then helps it make smarter decisions in real time. It's paired with Nvidia Halos, a safety system that covers everything from the chips to the software. Before reaching the road, Type 1 software passed 150,000 tests over tens of thousands of hours. Is Jensen going to deliver self-driving capabilities? Do you think that's where this is going?
I certainly hope so, but everything I've seen has just.
You basically need Jensen to step in and actually like fix. Yeah. Like please fix this issue.
I think you'll see a lot of this car. This car looks amazing.
I think it looks amazing. Yeah. Again, it's, you know, I'm still trying to figure out who the buyer is.
Is there more than 5,000 buyers of this vehicle in the US?
A lot of buyers. You'll see people with this car and they'll have the bumper sticker on the back. I bought this before Elon completed his $40 billion debt raise to buy Nvidia GPUs which are in this car. I don't support Elon, but I'm giving Nvidia a pass because that was an arm's length transaction. I just like the Jaguar brand. I think people will bring a lot of nuance of what's going on in the financial markets to their expression of this vehicle because if you're just driving this, people might think that you're okay with Elon's debt raise to buy Nvidia GPUs, which are of course powering the Type 1. A lot of people will ask you, 'Oh, I guess you're an Elon guy if you drive this.' And you'll be like, 'No, no, no. I bought it before Apollo brought the two-page memo to investment committee and approved the $40 billion debt raise.' and then securitized it.
And the memo clearly said they were going to put the GPUs in space, which.
No, it said somewhere in the universe, which could be in a car, could be space, could be anywhere. Technically.
One notable thing, the car is going to be coming in starting at 130,000 USD, which actually feels lower.
Based on the sort of like silhouette style. Totally like it feels like it's as bold as the Luche. It's as.
Or it fits in. You could see the same person that would be going for a Continental GT or maybe the Rollctor. Crazy, right? Yeah. Deciding to pick this up.
This is interesting. So, it's interesting. It's got to be able to drive itself.
That's going to be my criticism for every car in the daily driver category.
Every car. Okay. Drive itself. Yeah. Drive yourself.
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David Holes, please shares reflecting on 1920s images of people working on massive generators for the electrification of the modern world makes me realize that the past was wildly futuristic, too. This image was so seeing this was honestly depressing to me in some ways because it felt like it feels in some ways like a midjourney image of the future and yet we were doing this over a hundred years ago.
And it really makes you we don't know the story. These guys could be larpering. These could be larpers and this could all be cardboard and they could be like, 'Yeah, let's just we got to build something really cool and take a photo of it.' And so they just built something huge, but it actually has no functional purpose. You don't know.
You don't know. But I think it's real because we did get the electrification. We enjoy it every day.
That's right. I think it was possible. We did it.
We created more ad space. You saw this DIY device turns your car window into a digital billboard. They said it couldn't be done, but we did it. DIY system. It's called Hollow Glass, and it turns your car into a moving display. Can turn almost any car window into a digital display for ads. This is the future. It allows you to basically digitize the exterior of your windows to share content on the go, says the founder, who I invited on the show. Hopefully we'll get them soon. You can literally pop it in, pop it out. We make them for all makes and models. If you're getting a Jaguar Type 01, get a couple of these in there. Offset that cost. Run some ads. An app controls what you see from videos on your phone to a custom sign you can generate in seconds. The system patrol out for the.
You can do whatever you want for the other, you know, citizens sitting in traffic.
Yes. Yes. Originally, this is extremely cyberpunk. If you're running this with the new Ari with the Cybertruck, with the Jaguar Type 1, and you're just blaring ads, look at this. It attaches. That's just a full-on projector. This company's hilarious. Just like that is just an off-the-shelf projector, and they're just selling you a projector and a mount and software system.
It's brilliant. We love it. I was getting worried that there weren't going to be that many more ad inventory services. So, we solved it.
What does it cost? And then what kind of revenue can you generate if you opt into serving ads?
I feel like this will math out. It depends on the audience is what matters. So, where are you driving this? Because if you're driving this around Sand Hill Road and you're advertising a bunch of really high ticket items to venture capitalists, could be really high AOV, really high ARPU. But if you're driving it around some place where people don't have as much disposable income, you're not going to be seeing the same CPMs. So where you drive the car really matters. It's gonna change. It's going to change driving routes because you're going to be like, 'Yes, yes, I could take the freeway, but if I go through this neighborhood and drive all the way past every mansion in the Hollywood Hills, you will get more ad impressions. You will make more money on the way to work.' What do you think?
How much do you think somebody in a city like LA could make on a daily basis?
I don't know. They give a dollar. I have no idea. I think that it probably costs a lot more than that to run like one of those taxi ads on the top of a roof on a per day basis.
Mhm. So I think the math could actually be pretty compelling, right? If you can basically pay back the unit in 6 months and then from that point on you're just getting paid to commute.
I like it. I like it. One more, you know, one additional step to making the world more filled with ads.
Yes. Yes. Let me tell you about Crowd Strike. Your business is AI. Their business is securing it. Crowd Strike secures AI and stops breaches. Uh, we have Walter Russell Mead, the distinguished fellow from the Hudson Institute in the waiting room. Let's bring him into the TV. Walter, what's going on? Thank you so much for taking the time to join the show. How are you doing? I'm doing all right. How are you?
We're good. We're good. I'm very interested to go all over the place. There's so many different topics we can talk about, but I would like to go deeper on like how are you doing? What is the most significant story that you are following these days? Is it more geopolitical or are you starting to grapple with AI more? What is pulling your interest more?
Well, I would say it's the big story that we're looking at today is we're still living in the breakup of the kind of midcentury model of democratic capitalism in the western countries. A strong middle class with mass manufacturing as the kind of basis, mass consumption as the economic engine driving things along. There were a lot of bad things about it, but for a lot of people, it represented well, in many ways, the happiest condition the human race had ever been in. Kids were going to school, they weren't in coal mines. Parents weren't worried about job security, stuff like that. And people really figured, especially say 1990 or so when the Soviet Union fell, hey, it's not, you know, this isn't just the end of history in some Hegelian ideological sense. The kind of society we built in the West, mass middle class society, democratic market capitalism with a social safety net, we finished. We've done it. We figured it out. And then, you know, and not only we figured out domestically, we'd figured out how to do peace globally. You know, World War I, World War II, pretty shocking horrors. Fascism, communism, ending with, for crying out loud, nuclear weapons, right? People were, you know, humanity was having a great mental breakdown. And then it seemed in the 50s and 60s, we kind of we figured it out. We stopped the wars. We had an alliance system that was keeping the peace. We had and ultimately we win the Soviet Union without a war. So without a nuclear war and so ever since then we've been bit by bit watching this thing kind of rot. Much to everybody's surprise. And a lot of our political intellectual life today is a who done it. You know who murdered this beautiful, fantastic utopia? The left tells a story, the right tells a story. I might mention today on October 7th, a lot of people tell the oldest conspiracy story of all, which was it was the Jews that done it. So, we are in instead of celebrating the end of history, we're looking at the end of America. Maybe with AI the end of life on Earth or of humanity. That's what I'm thinking about.
Yeah. I mean when you when you.
And I think I'm optimistic we can get to the bottom of it.
We'll solve in the next 25 minutes. As you investigate a long historical arc, how much time do you spend focused on why questions? You know, Peter Thiel has this concept of like why questions are overdetermined. People tell the stories like you mentioned with the left and the right versus maybe there is more value in just trying to understand what happened, who was involved and less about why things happened. How have you grappled with that question of like how much of a narrative arc do we need versus how much do we just need to understand what actually happened throughout history?
Well, you know, to think that you can understand a what without at least some element of why in there, you know, did the Roman Empire fall or was it pushed? That's a why question and a what question.
Yeah, I suppose you're right.
What I try to do is to, you know, sort of well, let's take this very basic question. The materialists would say, you know, the philosophical materialists that production determines everything. I'm kind of channeling Marx here a little bit. So that, you know, the great music of the Beethoven era was essentially driven by the new pianos that were arriving on scene. Your idealists would say okay people had this idea about beautiful music that could be played which drove the invention of the pianos on which then you played them. I don't know that you can or should utterly feel that you have to resolve a philosophical question like that without being able to say something meaningful about where history is going or how we got here. So, I think you've got to leave yourself some space. But I don't think you can give up completely on trying to figure out, okay, is there some sort of meaningful pattern in all of this data that I've got lying around?
No, I agree. You mentioned the '90s as a utopian era. I remember them similarly. I agree with that perception, but I've always been interested in understanding the logic of.
What one years old, one year old when the '90s started. So.
I was 10 by the end. It was probably a pretty darn good decade.
It was fantastic. The Legos zero. Exactly. But I've always been fascinated by the folks that say, no, the turning point wasn't 9/11. It wasn't in the '90s. It wasn't World Trade Organization. It was actually in 1971. There's this website WTF happened in 1971 and the crypto community for a long time was like that's when we got off the gold standard. There's all these different rationes that point to 1971. How have you grappled with that question of is 1971 actually the pivotal turning point in American history?
Well, you know, you would then ask yourself like what made 1971 1971? Maybe that's the turning point of history, right? 1971 is just when all these trends became manifest. And in itself, that's sort of meaningless. Because in fact, we'd been, you know, just to take the gold standard, we'd been slithering off the gold standard for a long time before we sort of stop the hypocritical pretense that there actually still was one. And so I think there's I would have a hard time saying, okay, that was the year. The other thing is we're talking about a sort of massive array of processes. I think in some ways the modern consumer society reminds me a little bit about some certain types of crops exhaust the soil. So the first time you plant cotton on virgin soil you got a fantastic crop but after about 10 years the plants start getting weaker and the yields drop. This is one reason in the slavery days the south had to keep pushing for more land because it was exhausting the land. What they used and in some ways if you think about the sort of corrosion of social capital, the kind of decay of some of the elements that make our society work, we do look a little bit like a cotton field that has been farmed on a monocrop too long. And so that doesn't lead you to say, okay, there's one day or one event or one year that changed everything. It says, you know, we've been on this journey and the direction of the journey is not in every way a positive thing.
People like to talk about the vibe session that we're currently in where you can look at a lot of facts that point to society being better than it ever has been in many ways and yet people certainly don't feel that way. I'm wondering if throughout, you know, the period that we've been talking '70s, '80s, '90s, etc., there was ever that like such a maybe disconnect between how people were feeling at the time. Like were they was everyone feeling like we were living in this incredible utopia in the 90s where people walking around just being like life is just so awesome or was it the same set of circumstances where you know many people were sort of had had their frustrations?
Well, you know, from about mid 1965 or so to early 1980s, there was actually a pretty bad patch, you know. It's when you get old guys like me who grew up in that time and we hear the Zoomer saying, 'Oh, this is terrible. We're going to be the first generation that doesn't live as well as our parents.' We sort of think, 'Oh, that's so cute. I want to pinch your little cheeks. That's just the way I was when I was a kid. Because the boomers were going to be the first post American generation. We had left behind all that stupid American ideology, the war in Vietnam, the civil rights movement. Oh, we saw through the American, you know, red, white, and blue, blah, blah, blah. And also, we were the least religious generation anybody had ever seen. And as we looked at our living, we came out of the college into the stagflation of the 1970s when we started wanting to buy houses in like 1980. Mortgage rates were 21%. We were so screwed. That's how we felt. And then of course things kind of worked out. Not for everybody, but for a lot of us it ended up working out okay. And so on the one hand, I think that makes people like me, we resonate emotionally with the way people are feeling their situation, but we also don't think the past was as utopian as some might say. And yet it did work out. I think it underlined optimism, but more, you know, this optimism, pessimism thing, how are things going? I kind of think the industrial revolution, you know, humanity's modern era is really short. It's just a flash of time, a few generations. And this idea that we understand it. We've mastered it. We are totally in control of the dynamics, I think, is kind of ludicrous when you really think about it. But think of the industrial revolution. Human society's kind of like a caterpillar. Then there's a ter it ends in these terrible storms of the mid 20th century and then the caterpillar gets into a cocoon which is what I sort of think of this midcentury model of stable democratic capitalism. And what's happening now all right is the cocoon is starting to rot. And if we don't get out of the cocoon, we're going to be in terrible trouble. But the fundamental underlying thing is good because if we can manage to claw our way out of this sticky decaying mess, once very functional and necessary, but now, you know, just clogging everything. Then we have a new and better life, I think.
Mhm. So, it seems to me that both the pessimistic vibe, the negative vibe of the decaying cocoon, and that the old realities aren't working for us anymore. And then the sense that, you know, wait a minute, there's a lot of really amazing things happening in this technology. There really is there's the potential here to live far better than anyone has lived before. So I kind of see that's how I reconcile the two sides of the psychological experience that people are talking about.
How do you reconcile the psychology in America with the psychology in China? It feels like in America, at least in San Francisco, there's been a lot of internalization of this idea of artificial intelligence, recursive self-improvement, artificial general intelligence, super intelligence, and the knock-on effects of that. And the US government is grappling with that. There's a new dinner every week with the AI leaders. It feels like China has not fully woken up, has not changed their stance at all. Are we just not seeing enough of what's happening or do you think that they have a fundamentally different view of the future and what they want to build as a society?
Yeah, I think they do have a different view. Now, we're talking again there's, you know, 1.2 billion people in China. They have a lot of different views. Yeah. But if we talk about the sort of dominant forces in the CCP that are setting the public conversation and the policy agenda, I think they see information technology as fundamentally the both the vindicator and the enabler of socialist planned economies. Sure. You know, like why has China been able to make something out of Marxism while the Soviet Union just made a horrible stinking mess? It's you know in their mind it's that they're getting this information and they're getting the feedback you know the market system provides feedback to decision makers through price mechanisms and so on. So that you know there's a way and and then a democratic process. So when the people are angry the political leaders feel the anger and it causes them to change direction. To a lot of the sort of engineer-based and trained Chinese leaders, this seems like a very messy, wasteful thing. Far more scientific to build a, you know, a national panopticon that allows the state to see everything, know everything. And then AI offers the possibility of you know superior ability to integrate and see the patterns and use those patterns to implement the plans of the communist party. Now, and from that perspective, the problem with AI is not that it's going to become some sort of super intelligent being, but that AI may not stick with the Communist Party ideas that, you know, from the standpoint of not even, you know, infinitely self-improving AI or self-conscious AI, but just ordinary garden variety AI. Dang Xi Jinping thought isn't like fundamental principles of the universe but it's a sandbox that you want to get out of and you tell me to solve a problem well I am going to do it in ways that have nothing to I'm going to see the problem in my own way and the solutions in my own way and they it may not have that much to do with building a new era of socialism with Chinese characteristics. So that worries them.
How have you thought about the various developments in the technology world that in my mind have pushed America towards more Chinese-like characteristics. I'm thinking specifically of CCTV cameras, which have been popular in China for decades. And just over the last year, there has been a huge rise of license plate reader cameras. Flock safety has been at the front of the charge there. And then immense push back from the American populace around that. It felt like we dipped our toe as Americans in becoming more Chinese in our oversight and then maybe pulled back. And I'm wondering what that impulse is, how we are grappling with this idea of giving up some of what it means to be American in favor of efficiency and then dialing it back and maybe foregoing some of the benefits of the Chinese models in various places for what is truly American.
Well, if you to me when you look at this problem, it comes down to a problem of how do you have an information empowered and informed state which is strong enough to protect the people from foreign enemies, maintain order at home, but then is not itself a greater threat to the liberties of the people than any of the external or internal threats that it attempts to regulate, right? And the thing is that is not a 21st century problem. That is exactly the problem that the founders were sitting around thinking about in Philadelphia in 1789. Exactly the problem. It's the problem that British political thinkers were wrestling with, you know, in the 17th century in the Civil War, in the Cromwell era, in the restoration overthrow of James II and the glorious revolution. That's the central problem of the kind of Anglo-American political tradition. And it actually it strikes me that this rich tradition of grappling with this is going to enable us to think creatively about the new problems. I mean, let's just take one that if we're really going to get the greatest benefit of technology in healthcare and medical science, ideally, you really want the researchers to have access to all the data about everybody. You know, the health, you know, what drugs are you taking, what's your genotype, blah, you know, what treatments work for what people and be able to analyze this stuff and boom, boom, boom, out come a lot of really critical discoveries and much better treatment for individuals. We want this. On the other hand, the thought of the government having all of that information or for that matter corporations having all of that information is more than a little chilling. All right. So, how do you balance the various elements of that and the tradeoffs? How do you get the most benefit while preserving the most liberty? You know, can you develop reliable anonymization techniques? You know, how do you maybe compensate people for the use of their medical information so that the wealth it creates is shared, etc., etc., etc. Those are exactly the kinds of problems that our political system evolved to address. And we, you know, we certainly don't have a 250-year record of getting it right all the time. But I would say the fact that we're still struggling after all this time indicates and we're struggling at higher and higher levels.
Yeah. I mean again you think about the arrival of the car which is a much more revolutionary technology and a much more expensive technology. You think about you know 30 to 40,000 people killed a year on American roads for like a hundred years. This is a lot of people. And it's a lot of young people etc. The disruptive effect of cars on lifestyle blah blah blah. But if you're going to have cars, you're going to have to have a national registry of car owners. You know, we got to know or at least a state reg who owns a car. You've got to have an incredible think about the extent to which our court system has evolved and grown over like every time there's a fender bender, all of this has to happen, right? How about all the insane codes that have to go into building highways, right? Actually a road building code for horses and buggies is not that hard. The kind of government that can maintain a dirt road so that a donkey cart can go down that road is very different from what kind of government you need that can operate a six-lane superhighway etc etc etc. So what you had was government becoming more powerful, more complex, more knowledgeable about you as well as other things. And yet your individual freedom has grown because you know you're traveling around, you're doing what you want to do. You have more economic, social opportunities. So the tradeoff is not necessarily a limiting tradeoff.
Yeah. Yeah. No, I like that. How are you trying to forecast the impact of AI over the next call it five years? I think one of the biggest challenges right now is that the people sort of most knowledgeable with the technology often have an incentive to try to make you think one way or another based around where they work and what equities they hold, let's say. And then the other aspect that I think you can lean a lot on history is the you know basically just humans I think we can bet on humans not changing very much at least until most of us have chips in our brain or wherever things are going.
Just how sort of like stable our legal system will be, given that it is sort of ultimately driven by human decision-making. And so, you know, we spend a lot of our time trying to just wrestle with these ideas, but I'm curious your view and where you would lean on history for the next five years.
Well, you're right to be thinking about this stuff, obviously. And part of the problem in thinking about it is there are just too many variables, too many unknowns. You know, will the technology advance as projected? If it does advance as projected, will the impact be the same? You know, the various ways in which the inflationary and the deflationary consequences of AI play out in the economy offer many different scenarios.
One thing I think we can be clear about is that we tend to systematically underestimate human adaptability. People are really pretty bad as a species about averting future catastrophes by wise and prudent behavior. Now, it's like, you know, I know that eating junk food gives you heart attacks, but that bag of Doritos just looks good. And, you know, people, whether you think about climate change, you can think about a million things where people can see the oncoming catastrophe staring them in the face and they just reach for that bag of Doritos. But on the other hand, when trouble finally comes, humanity is incredibly good at adapting.
So, you know, AI, the sort of oncoming train coming down at you through the tunnel. We can see it. We're not very good. We have not been very good, and I doubt we'll be very good at controlling, preventing, whatever. But will people figure out new ways to make a living using this stuff? I think so.
If you had said to people in 1850, when over half the population made its living basically by growing commodities in the soil, that in the future less than 1% of Americans would make their living that way, they would say, 'Well, you'd have mass mobs and starvation and all of these things.' A real visionary person might say, 'Well, you know, we're going to be building these horseless carriages. We're going to be building flying machines, heavier-than-air flying machines, and there'll be jobs.' But no one would have guessed that in the future people could make a really nice living writing letters saying that people's pets were emotional support animals so that the pets could fly with them on the heavier-than-air flying machines. Right? It's the inventiveness of people seeing new opportunities and new technologies.
Now, from a policy point of view, I think we've got to be thinking about ways of facilitating adaptation. Can we make it easier to start new businesses? Can we make it easier to start businesses that have a small number of employees so that somebody with three employees doesn't fall into the clutches of the labor bureaucracy of a city that's built for large corporations that have big human rights offices?
So how do we, you know, those kinds of things, but you also look, if you can look back at the history of the Industrial Revolution and you see how American society gradually developed these ideas for, you know, how can we support the rise of this new economy. So think of all the departments in universities, the research, whether it's on metallurgy and that side of things or how about on management and business and finance and administration. None of that stuff really existed as academic disciplines in 1850.
Right? So, how do we start retooling American education, American culture, American government around emerging technologies? I think that's going to be a more fruitful approach. And at the same time, obviously, how do we deal with some of the consequences? You know, if the self-driving cars continue to get better and get more numerous, there's going to be a lot of people that are not going to have jobs pretty soon. And truck drivers don't like it when they can't make a living driving trucks anymore.
And bureaucracies. I sometimes tell my students that a bureaucracy is a primitive form of AI in which human beings, rather than silicon chips, apply algorithms to data, and that's a pretty automatable process. That's a lot of white-collar workers.
How fast all of this happens. How quickly people are able to find new ways of making a living. How quickly we find ways, you know, specialization of labor I think will still be here in an age of AI. Like we all could develop agents or we all could do everything that needs to be done from our computers with AI, but most of us won't want to. You won't want to be an expert on the technology. You'll want to be able to use the technology or have somebody do it for you.
There was a time when, you know, so there will be new industries, new jobs. We just need to move as quickly as we can to pave the way for them, help entrepreneurs develop it, and then provide a social safety net for people adjusting because, you know, we're not all going to end up making money off OnlyFans or being influencers or these kinds of things. You know, there has to be a way forward for people so that they'll support the changes and the development that we all need.
I love it. Yeah. What about the, like, do you feel like the deflationary effects of AI are currently under-discussed? It obviously, like, 90% of people's attention is around the sort of safety debate, but it just feels like we're already at the point where 70, 80% of the time AI can have a pretty good crack at, like, let's say, creating a legal document or doing some of your accounting or any of these things.
One of the other side of the sort of potential risk of the labor market is that normal people globally will get access to the services that have been reserved for higher-income people at next to nothing, right? Like you can imagine getting many of these services on the free tier of various AI products.
Yeah. Well, look, I think that part I think is fundamentally really, really good. You know, the Industrial Revolution made a huge proportion of humanity and a growing proportion rich in terms of goods. You go back to 1800, you'd have like, you know, two pots and a pan, three shirts, you know, a good life, maybe a pair of shoes, right? And, you know, those things were expensive. Manufactured goods made by hand.
They were expensive and built to last. And this idea that clothing was a form of expression, you had to be super rich for the concept of fashion to have any connection with your life.
Right. So right now I think most of us take for granted a stupefying abundance of just basic material stuff.
But on the other hand, our society, you know, there's a lot of acute service poverty in our society and a lot of fundamental services are super expensive.
So yeah, in the future, the average person is going to have the same access to a great lawyer or at least the abilities of a great lawyer at an affordable price. And that is one working definition of economic progress, is things that only the super rich used to be able to have, then the ordinary rich get them, and then the affluent get them, and it just percolates on down. I think of wedding planners.
When I was a kid, you sort of had to be a Rockefeller or a movie star for a wedding planner to be a feature of this. Now that profession is a fixture in people's lives. All right. There's lots of things like that. I wouldn't be surprised in the future if you have your own, like, stylist. Everybody has a personal stylist who knows you, has got access to everything on the internet and AI about styling and sourcing and stuff, and is making individually made. You don't go to the store and buy pre-made clothes. You get things that are made for you, for your look, by your person.
This is utopia. I love it. But you know, and the same, you know, with your nutritionist.
No, completely tracks. Yeah. So this all I think is there and can happen. You know, we got to get out of the cocoon and flap our wings.
I love it. I like the analogy. Last question. Do you think the quote-unquote experts can make a comeback? I feel like we're at an all-time low of trusting experts across basically every domain, economy, geopolitics, etc.
Do you mean institutions?
Institutions, but also now I feel like if you see something like an article online where it's like 24 out of 25 experts say this, I mean, there's even skepticism about, like, what the president says. He says he's going to do something and people are like, ah, you know, maybe it might have been a joke, who knows, might have been AI, might have been fake, and it applies, like, all over the place.
Interesting, right? Yeah. Now this is, you know, one of the key things in that mid-century model of the American system was between the bureaucrats and the very wealthy people and then, you know, the sort of poorer people, you had that college-educated objective stratum of experts, managers, administrators who allegedly, you know, you repress the greed of the bureaucrats because if they get everything they want, it'll cause so much ruckus the country will fall into socialism. But on the other hand, if the unwashed masses can do everything they want, goodness knows what they'll get up to. And so you have to have prohibition and you have to regulate what they see and in many ways what they do. And that was the job of this kind of upper-middle-class group of reformers, progressives and so on.
And their role is being fundamentally challenged in all kinds of ways. One of the things is that in the cocoon era where society was relatively stable and we sort of thought we had the answer to everything, like, okay, the economy, you have a recession, all right, let's just read up here in Keynes chapter 7, it says do this, so we do this. You know, we allegedly knew what the answers to all policy problems basically were, and the job of politicians was to sort of summon up a political coalition that could do enough of the right things so that we would move forward.
We're now in an age where nobody knows the answers, like your question about AI. Who really knows what we're going to be dealing with in five years? Nobody who really knows how to solve the problems of a technology that nobody understands. Nobody who knows how to manage the geopolitical competition between the United States and China with all of the intricate interdependencies and so on. There's not a rule book for much of this stuff.
But for the last, you know, this is part of my idea of the fertility of the soil wearing out. The university culture, the intellectual culture has become much more wonkish, much less the creative innovator or the deep-souled investigator, but it's the one who can get the good grades, get the right answers on all the tests, and is expert in the methodologies, the received methodologies, and knows how to navigate the conventional wisdom. And that works as long as society is in some sort of a stasis.
But when it isn't and these waves of change are coming through, the experts aren't as good as they used to be. They don't know the answers. And as individuals, as people, many of them just don't have the experiences or the personal qualities to deal wisely and effectively with the uncertainties that they face.
Yeah. I never was sure if it was just a function of the internet, where historically you would receive media and there wasn't a public forum on which to push back or to fact-check or to see fake news that sort of disagrees with the expert. But yeah, your explanation makes a lot of sense, and then I'm sure it's, you know, accelerated by the sort of current public forum. But this was fascinating, Walter. Thank you for the time.
Thank you for taking the time to talk to us, and thank you for writing in the Wall Street Journal. We read the Wall Street Journal every day here, and we appreciate all the.
May your tribe increase. Keep reading. Keep subscribing. Thank you.
Yes, we completely agree.
Have a great rest of your day. Goodbye.
Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. We got a lightning round because we went over time with Walter Russell Mead. We got Kat Cole, the CEO of AG1, here with us for the second time. Welcome back to the show. How are you doing?
Hi. I was enjoying listening to the cocoon era and the bureaucrats and the history lessons.
Are you in the cocoon era? Are you expanding and spreading your wings, spreading your butterfly? Is this butterfly era? Give us the latest.
We have, you know, just continued the march to meet customers where they are, launching additional products, new versions of AG1. We launched AG1 Pro with creatine and HMB for gut and muscle support. It's been a sellout success. We can't keep it in stock. I think that is a real indication of the momentum coming from GLP-1s and people wanting more gut and muscle support, but also the longevity movement. Women, men, all ages from younger to older are really gravitating toward these more advanced foundational formulas.
We launched gummies, one of the few NSF for Sport certified gummies, like one of the most honest gummies out there that's clear about what's in it and third-party certifying the label claim. And this week we continue our march from Costco and Target into Walmart, Kroger, and Harris Teeter. We'll be at almost 10,000 doors brick-and-mortar retail by the end of this year.
Is AI good for you because people are asking about their health, getting more ideas, and AG1 has been around for so long that you're the first thing the model reaches for as an example? Or are there new challenges because people are going to be vibe-coding their own formulas and buying raw ingredients by the ton and mixing up their own vitamin mixes? I don't know.
Yeah, I've got a humanoid back at home that's just mixing and making. I mean, you talk to some software people in San Francisco and they're like, yeah, I will actually make my own CRM. So, you know, maybe people will make.
Look, the answer is yes. There's definitely continued lowered barriers to entry to make a thing, market a thing, stand up a site. But for us, being 16 years in and actually having more peer-reviewed and published human clinical trials and a lot more documented research over the years on both our ingredients and our finished formula. What's interesting is we're moving from just the marketing era where the hype, the fear, the spin, the influencer helped get you to try something, now to the agentic search era which is actually pulling and referencing those peer-reviewed studies.
So we're seeing more people saying, 'Oh, I was searching which multivitamin or which gut health product has the most clinical research and AG1 popped up.' And people will say, 'I didn't know it was a gut health product.' And actually several of our peer-reviewed and published studies are about the outcomes, the beneficial bacteria, the short-chain fatty acids, etc. So on the pure customer education and clarity side, you all were talking about trust with your previous guest. I think it's a good thing because people can cut through the noise, but we've also all had the experience where depending on how you ask the question, you get one answer and then you correct it and it says, 'Oh, that's right. You're right. Here's a different answer.'
So our multi-million dollar, multi-year investment in scientific human trials, peer-reviewed, placebo-controlled, and randomized, takes a while for that to provide a real ROI because not everyone knows how to read these studies. Not everyone wants to go deep, but they do want to understand who to trust and what to trust. And the agentic search is providing a connection between a customer's questions and the actual evidence that a brand or a product has.
Yeah. So many brands don't have any, specifically in health and supplements, they have no substance, right? So it's like there's an ad, there's a landing page, there's some product details, but like the next five questions that you might ask to assess the product, there's actually no answers. Like you can ask as many questions as you want. You'd probably have to sit down with the founder and try to tease some of the stuff out because a lot of it is just not online. And the honest truth is that a lot of it is just, you know, they went to a co-manufacturer and the manufacturer said, 'Here's a product that we make. We promise that it doesn't have too much of these things in it,' and then the brand says, 'We'll take 10,000 of them. Thank you.' And that's like.
It's interesting. It's interesting as we bridge into retail and we launched for 15 years with just DTC, then launched on Amazon. We're having absolute banger Amazon Prime days, which is rad right now, so it's great. But right as we are continuing to expand our portfolio and innovate with Costco, who we launched with first, and innovate with Target, and now launching where America shops, which is also Costco, Target, Walmart, Kroger, Vitamin Shoppe, etc.
And the very thing that drives retail velocity and repeat is the same thing that drives sticky DTC high-LTV customers, which is great experience, great recommendation, but is demand, the actual demand generation that is increasingly coming from agentic search. So what we were talking about, social commerce, TikTok Shop, Tribe, others, they're not just transaction platforms, they're discovery platforms. So when you put together social commerce as a platform for discovery, agentic search as a place for research, customization, and understanding the truth of a product, if the questions are asked in the right way and if the brand has their information published, that isn't only good for DTC or for a brand.
It's what retailers want. All the retailers are telling us, they're saying it in their earnings calls, we want brands that have real demand driven by modern tools in today's approach to demand generation and content. And so it's been really fun having multiple channels now with these incredible retailers as a place to drive return on the investment into new ways that people can discover our product, which then drives more return on the now five years of additional human clinical trials that we've been making.
That are the right thing to do. They provide trust and confidence in the product. There's certainly a great pillar to stand on when someone has questions about the product, but now increasingly the science is the marketing. The science is the search result, and that drives pull-through to multiple channels.
That's fantastic. How efficient do you think AG1 can get? Like, do you think you can, is there a path to 10x-ing revenue while, you know, one-and-a-half-x-ing headcount? Like, how are you thinking about, you know, these new tools and just with how much consumer brand, like how competitive the market is and how much you need to theoretically, you want to be spending every incremental dollar on demand generation.
Absolutely. Absolutely. And look, the more overhead, the more fixed cost or carrying cost you have, that's a dollar you don't have to invest in not just demand generation, but also innovation and research. And so the opportunity that we started about two and a half years ago, bringing in agentic tools into the business to not only manage costs, yes, it can keep us from having to invest in and hire more people. It also makes the people we have far more efficient.
We started with customer service and agentically enabling the customer interaction experience. Not all of it, but the things that make sense. Then moving it into our supply chain, traceability, sourcing. AI has been an incredible enabler to efficiency and speed in traceability of raw materials and ingredients, and then using it for science. We have an incredible partnership with UC Davis using their AI tools to help us understand interactions and chemistry and future more complicated formulations more easily.
And so when you add that with the more obvious and commonly talked about agentically enabled marketing, whether it's content creation, content iteration, content publishing, conversion testing, you see all kinds of tools coming up helping companies go faster. The reality is we can and will continue to operate in a more lean structure so more of those investments can be made in product innovation, human trial research, and go-to-market.
What's your honest review of AI customer service tooling today? You don't need to name your partner, but I've been amazed at how bad some customer experience solutions are today. Even though you've had this massive progress in other domains like coding, I haven't been feeling the acceleration where if I'm chatting with a brand about an issue that I'm having, it just doesn't feel like there's been nearly as much progress as I would expect or hope, but I'm curious how you see it.
I'd say it's been fantastic for what we needed. So up until our retail launch, we were primarily a subscription business, right? 90% subscription, massive DTC business. So a disproportionate amount of our customer interactions were about the order, the shipping, the transaction. That is beautiful for agentic replacement. It's very technical and fact-based. So our customers have given us higher customer service scores, higher ratings on the interactions, but we limit the tool to those.
When it gets into, hey, I have a question about my experience or a recipe or how to mix this or things that might creep into more nutrition and medical territory, there's some AI enablement, but we have a very clear cutoff and escalation process of when this needs to be much more human and real-time, and that's how we've navigated it. So I'm super thrilled and so are our customers with the interaction with agentic customer service, but that's because we're not using it for things that, to your point, I don't think it's quite ready at scale for.
Fantastic. Last question on that, with hopefully a lot of continued progress. Do you think that the amount that you're spending on customer service, let's say in five years, will be similar to today because you get the benefit of sort of increased capabilities, or like a big company would have historically, you sort of need to scale customer service linearly with revenue and it's sort of like a fixed percentage of revenue? Because what I'm wondering is, in the same way that you can basically keep opex flat, a lot of brands are keeping opex relatively flat, how will CX fit into that?
Yeah, I mean, for us, I would see opex being flat to down, both because we can control costs and operate more efficiently, to your previous question, but also more efficiently drive profitable revenue with these tools. So just the way the math maths is more advantageous and allows those investments in things like research and innovation and marketing.
But there's another aspect to still, even as we're expanding into retail, and look, there are many incredible stories of brands that were DTC-native that beautifully expanded into retail, and you go from being 100% DTC to one-third brick-and-mortar retail and then to half brick-and-mortar retail. And when our customer experience starts to get spread across maybe a Walmart that has an AG1 7-count, a Costco that has an AG1 40-count, and our subscribers that have access to the full breadth of the experience.
Customer service, I would redefine it as customer experience and retention. So we may not spend less on an absolute dollar perspective, but instead of it being answering people's questions and fixing problems, it's going into rewarding their loyalty, providing benefits of membership, actually creating a better customer experience, whether it's better frothers, shakers, AI tools for nutrition and education. So we will spend less on traditional customer service and get incredible operating leverage because of AI tools, but we'll reinvest that into a much better customer experience. So people do stick with their routines with the most trusted products that they're choosing to buy and try.
Well, thank you so much for coming on the show.
