Yeah, this weekend every time I would refresh it, you can see everything takes. Everyone had all these different opinions and takes. The one that stuck out to me was that there's this, there's a little bit of a, like, you watch the movie and most people came away thinking more positively of Elizabeth Holmes, being like, 'Oh, maybe she wasn't, maybe she's not that bad. Maybe there's more to the story. Maybe she was manipulated. She seems to be manipulated multiple times potentially. Like maybe, maybe she's more of a...'
Some people might be like, she's bad, but she'd probably be nice to me if I interacted with her.
Yeah, yeah, a little bit of that. There's some sort of like suspicion that I feel some people in Silicon Valley are having where it's like, oh, it's just like the fake it till you make it thing. It's, you know, it's not that big of a deal. I just can't stop thinking about like, it seems like she's just a bad founder. Like put aside the fraud. Like it just seems like total slop in terms of the execution of that business and gives me absolutely no faith in a Theranos 2.0.
Totally.
And the whole time I was like almost yelling at the movie screen because the way she describes Theranos is like this box and like it's in the cloud. It's just like, it's so unaware of the medical device industry, which is so frustrating to me because she's making this point like we have an invention and our invention allows you to test blood for things and like we test all this stuff and she's making it sound like it's like magical science. And it's like, I looked it up, there have been 60 plus companies since Theranos started that sold for over $100 million in that category. It's like someone coming to you and being like, I have a magical, we invented something. It takes information and it stores it on a database that you can access through a website. It's like, so you make a SaaS product. Literally, hundreds of people make those. And there are thousands of people that work in the medical device industry and they've made boxes that look kind of like a Theranos box and it runs a test and they don't go to prison for 10 years.
Yeah, they don't go to prison. And she never just says like, 'Look, this stuff happens all the time. It's not crazy that I'm going to be able to build a box that tests for something. Like this happens all the time.' Instead, it's like, I'm the only one that could possibly do this. Which is so weird. It's such a bad frame to not just admit what's really happening on the field, which is that diagnostic boxes get built and sold every few years for hundreds of millions of dollars. You could just do that, but instead it has to be this pie in the sky nonsense. And it really, really frustrates me, as you can probably tell. Nikita Bier broke down a little bit of this concept. He said, 'One of the things that hasn't been talked about with Elizabeth Holmes, she was created in the era of the TED Talk entrepreneur.' And this is exactly what I was picking up on. So between 2011 and 2015, after the release of The Social Network, there was an entire apparatus built around child prodigies, college accelerators, young entrepreneur organizations. I watched countless founders of hard tech companies present fraudulent products at conferences. They had fake studies with fudged numbers. Most of the adults in the room excused it as faking it till you make it. But Holmes was the one who rode the wave better than anyone else. When the TED Talk era came to an end and people finally came to their senses, she was still running the same playbook in the most scrutinized field there is, medical technology. When people ask how she got so far, it is largely explained by the period she did it in and she got caught when the world suddenly woke up. And so there's other things, which is that this is strictly regulated by the FDA. So if you're a founder of a medical device company, what you are going for is FDA authorization. That's marketing authorization. That's literally the ability to sell the product. It's not illegal to build a medical device. It's illegal to sell it, to market it. And so that also includes, like, you typically can't go on podcasts and media and say, 'Oh yes, we have this thing that does this thing.' We have to say, 'Oh, we're working on this progress.' Like we can't say that it actually works because we haven't been approved to say that by the FDA, spoiler alert.
Don't want to hear spoilers. Just turn, leave the stream going, but just turn the audio down.
Yeah, and we'll just talk away. What spoiler do you want to talk about?
So Billy does this side deal.
Yeah, to get a cut of profit on the back end of the movie. You would probably know what that's exactly called.
Yeah, points on the back end.
Points on the back end. So he does this thing.
And then later after the movie's totally been like finished, he decides, ah, this is going to look pretty bad. Backs out, right? Damage has already been done, right? Like he doesn't look great.
Yeah, and Elizabeth is trying to say like, 'Oh, I don't really know much about the details.' So one thing, like the damage was already done and now the movie is a massive hit and it's going to continue to be a massive hit. It seems like it'll be a cult classic. And I can't imagine being 60 years old being like, I'm going to turn on some Nathan Fielder. Just take me back to the good old days. But the funny thing is, do you think that Billy, do you think it made sense for him to do the side deal? Because she claimed in the show she has hundreds of millions of dollars of restitution to pay. So of course she wouldn't want to make, even if she wanted to make money on it, she wouldn't get any benefit of it.
So she would want to route it through Billy.
It's a good question. There's some ambiguity over whether or not they're married. I couldn't get to the bottom of this, but I think they might not be legally married, in which case it would make sense for him to get those profits and then use that for their kids and their family, but then it doesn't flow to her bank account, which immediately gets grabbed by the investors.
I think you might be on to something there.
She gets a lot of the benefit in that it's sort of funding.
Yes. And so is your point that if she's in on the deal, sitting there being like, 'We want to get paid, but just pay it to Billy's account, don't pay...' That's more tricky from a restitution perspective.
Totally. I imagine a judge would be like, 'Oh, that's an interesting wrinkle. I hadn't thought of that.'
Yeah, judge would be like, 'Yeah, you're earning money. I don't care.'
Yeah, I don't care that you did.
Billy has to like go behind her back and make it really public that he's going behind her back.
Huh, yeah, good point, good point. So, I mean, the wildest part about the whole 'you can see everything' Theranos thing is that, one, I've talked to Billy on the phone about the Twitter that he was running and all that stuff. Answered all those questions. Nothing that really was different than what you saw in the movie. But he sort of gave me the pitch for Theranos 2.0 and I was like pushing back being like, 'So you should go for like a specific diagnostic. Go for like do this.' Like I have a buddy who ran this exact playbook, made $400 million in a very short amount of time. Like this is tractable. And then he was like, 'Wait, when did you have this conversation?' I talked to him like last year. And so my pitch was, I said, 'Look, if we're going to take this Elizabeth Holmes redemption arc seriously, I want to see some great calls about biotech.' Because this is sort of what's happened with other individuals who have been rehabilitated. From a branding perspective, my point that I posted about was like, I want to see Elizabeth Holmes give an incredible take about peptides and how that market will evolve and then watch that happen and be like, 'Oh, wow, she was early.' I want her to be a good biotech analyst. I want her to be smart on the science. I want her to...
The crazy thing about the movie though, I can't remember a single point where she was locked in on anything science related.
That's the point. Learning about mitochondria.
Yeah, that's my point. Like if a genius scientist goes to jail wrongfully, I would assume that they continue reading science literature and that they come up with interesting theses around...
One simple trick that the medical industry hates.
You can actually do that. That happens. And I want Elizabeth Holmes to throw down, give me your biotech 2027, give me your AI 2027 thesis. Let's watch it play out. If you're right, at the very least a market map. At the very least, a market map. Show me that you understand what Roche... A tier list of biotech acquisitions in the medical device space. Yeah, show me you're a student of the industry you're operating in, right?
Yeah, watching Nathan have that light bulb moment where they're pitching him Theranos 2.0. And them not realizing that people have been using the phrase Theranos 2.0, you know, to describe like massive things that they perceive might be massive frauds.
Yeah, it's great. I just also, when I got to YC in 2018, my visiting partner was Diego Rey, co-founder of GenMark, who actually built and sold a real diagnostics box, a medical device. And it was basically just a lab testing machine, previously the size of a dishwasher at a lab down the street. You shrink it down to the size of a box and you put it at the actual hospital and then the hospital can test for a specific thing. They were testing for antibiotic-resistant bacteria. They developed a chemistry. It's not rocket science. Like it is hard science, but like it's not magic. It's not future sci-fi magic. And if you can get that data in an hour as opposed to two days, everything in the hospital is just going to move a little bit smoother and people are going to be a little bit healthier and you're going to sell your company for $425 million, which is exactly what happened. They raised $25 million. It was a great outcome for founders, employees. Ro eventually got the product approved by FDA. So in 2019, it got authorized for the GenMark ePlex BCID2 panel, which is like not going to be on the stage at TED anytime soon, but it should be. It's like real science and it actually moved the needle forward.
That being said, I came away from the movie feeling like, okay, Sunny had done some side deal and got way...
No, no, no. Sunny Balwani, the other co-founder. My impression was that he was getting way less jail time.
Yeah, Elizabeth for like 11 years.
Yeah, it seemed like Sunny, they were positioning it as like Sunny was able to pin it on her. He got out. Yeah.
Or at least he got a reduced sentence or whatever. And you told me afterwards Sunny is in prison for like 12 years or have like a...
It's about a year. 12 years, 11 months was the sentencing. Elizabeth got a 10-year sentence. Yeah, reduced originally from 11 years and 3 months, according to the internet. Sunny didn't sell secondary either.
I know, that's ridiculous.
So none of them, they both go down with the ship. They both don't make money.
Jaw-dropping moment for me. I was like, least shrewd person in the world potentially. No secondary selling, $11 billion.
Doing fraud purely for the love of the game.
For the love of the game. What are you doing? What are you doing? And it's not like I came away being like it wasn't a fraud. Like it was. And it was very clear that like everyone there, Sunny, they knew it didn't work. They knew they didn't have the revenue, the profits.
That's really like the TED Talk entrepreneurs. It goes to prison for the love of the game.
For the love of the game. Insane.
Just for the vision.
If you do want to sell secondary, there's one neat trick. This is a new thing. So if you're a founder and you want to sell $10 million of secondary, $100 million of secondary, you don't want it to be a negative signal. Here's what you do. So you've grown your company to the point where you're valued in the billions. You don't want to sell secondary because everyone will be like, 'Oh, he's selling out. She's selling out.' Like that's not good. That's not a good sign. So what you do is you take out an immense amount of debt. So you get like $100 million of debt. Then you sell the secondary, sell another $100 million of secondary, pay off the debt, and then you can tell everyone, 'Look, I just sold secondary to pay off my debt, my personal debt.' Yeah.
And everyone assumes it's like, oh, they think it's credit card debt. They think it's credit card debt. They don't realize that it was an equity-backed $100 million line of credit from a major financial institution. You don't need to clarify that part, but you can still get away with $100 mil out of the gate. It's possible.
I wonder if anyone's doing that.
It might be happening. Who knows?
Anyway, what's... SemiAnalysis raised its 2027 data center capacity forecast from 43 to...
50 gigawatts. That's a lot. That's a lot of compute and people are going back and forth on this, right? Did Gartner say it was two, something like that? It seems like SemiAnalysis has the data and has been pulling together a whole bunch of...
SemiAnalysis. So we looked at the data. They looked at the satellite photos. I mean, a lot of these things, like they were papered a long time ago. Even if the market's like having a hiccup right now, that's not going to stop people from actually pulling out of the...
I sent you this... what did you send this morning? What did you send from RevCap? Which is SemiAnalysis saying if you're worried about demand, don't be because there's going to be even more supply than you realize. Of course, SemiAnalysis is also saying that they have some of the most bullish forecasts for the labs. But it's funny that in the midst of like everyone being worried about ARR growth over the last two weeks that SemiAnalysis is coming out and saying, don't worry, there's an obscene amount of supply coming online within the next 12 months.
Yeah, I believe them on supply. That seems very cut and dry. I don't think anyone has a stronger read on what's actually getting built than them. I think if you look at the satellite photos and you look at the deals that have already been inked, that even though, oh, the NASDAQ sold off 5% last week, like that's not enough to be like, okay, pack up the dump trucks. We're not building this thing. Like maybe in months if things continue to get bad and the rates go up, like some projects will be delayed or stalled or deals would get unwound. But like right now it's not that, it's full speed ahead. It's just like it's a train. You can't slow it down that quickly. Like it's just going to keep going. On the demand side, I feel like the agentic stuff, the personal agentic stuff is going to be high demand for compute. I'm less clear on what the willingness to pay will be. How many people will be willing to pay the equivalent of $1,000 a year for inference related to like their semi-personal consumer life, shopping and all the little agentic features. Now, I think the tech is incredible. Like I've been using Dot a ton and I think having an agent that just runs in the background and just tries to go find little opportunities for you is amazing. It just catches things in my email that I never would have gone through or taken the time to do and it just sends me a little message being like, 'Hey, like you asked for this and you should follow up because they said that they would do it.'
