0:00As crazy as this may sound, I think folks are almost underestimating Anthropic.
0:05There is one story that matters more than any other this week. Anthropic. They finally dropped their S1. This show we break down what you need to know, what you don't need to know, the questions that really come from it, and what we can expect when it comes to day one. And will there be the mega pop of all pops? This and so much more in the show today with Jason and Rory.
0:26I think that the Chinese openweight models are pretty much over in the US. How much money is there for Instincts of the world? It feels infinite now. I think we should put 20% of the fund into Open AI at the $1.25 billion round.
0:49Boys, we are back. It is my favorite time of the week. And we have some big news to start with. Anthropic Files. It's S1. It's the moment that we've been waiting for. 16.3 billion of first half revenue. I just want to hand over to you, Rory, cuz whatever metric I give, you're going to say it was the wrong one to site.
1:10So, so which ones were you drawn to and what is the takeaways for us from this?
1:16It was a great ass one. And you know, um, all all frankly, all the haters and the worriers at least for now have to go pound sand. I mean the burden of proof is most definitely you know on the side of the naysayers.
1:31In other words the these guys the S1 was great on almost every dimension and you know it'll be wildly wellreceived. I mean it was yeah you know it addressed I mean some pending open question still they didn't give the Q3 revenue number but you know it was great on C I mean on the overall revenue numbers unknown but they were amazing. It was great, better than expected on margins, op income, even op income after stockbased comp. It was grace on customer concentration. It
2:00was great on compute efficiency. It was stunningly great on cash and cash balance sheet, you know. I mean, it's just on every dimension. Um, it looked really good. I mean, you have to struggle to find questions and there are questions. We can come to those in a second, but it read, you know, it was it was it was a really top tier performance, you know. I think I think um as crazy as this may sound, I think folks are almost underestimating anthropic because um 5 years to IPO versus 24 for SpaceX.
2:29It's not just something we've never seen before. We'll see hints of it with OpenAI's IPO, right? It might be worse, it might be better, probably slightly worse, right? Based on what we know, right? Less capital efficient, slightly slower. But JFC to get here in 5 years from uh from um from a spite startup I it's just uh it's it's it's it's beyond unprecedented time value to liquidity still matters. I mean it's markups are fun man but getting out of the greatest IPO in our lifetimes and less than six
2:58years of distributions. I mean goodness gra I mean you you I I know Rory will will roast me for it but you got to think why would I do anything else? Why would I wait like these seed deals are like 18 years to full distributions, right?
3:12Um why I could get to 6 years in full liquidity anthropic and and why why would I waste my time with anything that's 10 to 12 years to IPO? Um but I still but but you know it's just one deal in the fund, another two years to distribute, you know. Um you know I it just versus five years.
3:32I I no I won't ask you Jason. I mean I think that you know I saw a tweet that basically said the same thing is you every founder and every investor is looking why am I bothering with anything else you know right these are such stunning numbers in terms of size scale and speed that you're right I mean it's going to dominate the results for you know for a long time to come and everything else just seems a lot more work for a lot less return compared to it and you know all credit to the the founding team all credit to the investors who got in early it's just a
4:00great way to make money things going up and to the Right. Faster than anything else in human history for 5 years to add up to a trillion dollars. That's that's as good as it get in venture.
4:09Yeah. It was funny watching Byron deer from Bessemer on uh on on the TV shows saying this is the greatest investment in the history of Bessemer. I think Bessemer was founded in the 19th century or something like that. I don't know when the fun was. Right.
4:20And their greatest investment and their largest checks. Right. So to see that all happen now after a hundred years. I think that's the end of that's that's the whole story. Right. I mean, greatest greatest investment, biggest check, fastest time to to liquidity. Why are we doing anything else?
4:36Rory, you said about questions there.
4:38There are always cynics in the audience.
4:40There are always people throwing peanuts. If you were to to present the alternate view of, oh, here was a striking number or two. Is there any that the interesting one, you know, 80% of the revenue comes from models that are less than 6 months old, right? And then separately, they you'll note they didn't give you a gross margin, an actual gross margin calculation. They just didn't lay it out that way because what you can do that in accounting, you can just put all the compute costs into one place. And then they kind of gave a
5:08a footnote breakout that kind of 70 80% of the compute costs are for training, not for inference. In other words, serve once you've built the models are wildly expensive to build. Once you build them, they're fairly widely profitable to serve and you only get to serve them for six months and then you got to invent another one. It's just kind of it's not like it's so not like software where you're on this kind of you know you build something and maybe you can sell it for 10 15 years. In this case, you invent something, you get most of the
5:36revenue from it in six, 12 months, and then you have to continue to invent masses of money to build the next one.
5:43And you know, then your question is, so what do you make of that? You know, cuz the funny thing is that that's the facts. And you could look at it one way and say, oh my god, that's totally scary. If you miss even once, you're screwed. And on the other hand, you can say to yourself, that might actually be great for Anthropic because they're best in the position to build new stuff and they want to build new stuff. And they said that very clearly. We want to build new stuff, right? And if all the time you very few people are going to be able to compete with this, right? Very few people like if the next turn of the crank on the model I mean they spend 8
6:12billion on compute um you know year to date June 26 and they're going to spend I don't know 16 billion next there's very few people who can write a 101 12 billion compute check. So they can continue to invent these new models get masses of revenue from them and then you know yeah maybe at the back end other folks have it. So even though that statistic was kind of weird and scary.
6:33Oh my god, the shelf life of your amazing product is 6 months, it's actually I would argue a an advantage if you're the kind of leader and you're willing to just be aggressive on it, right? But it does point to the So therefore what looked like a negative isn't it just points to the incredibly dynamic and scary nature of the game, right? This is a game where you have to spend like billions and billions and billions of dollars just to play.
7:01Yeah, that was Elon's point that most of these NEO labs are just going to die after this, right? They just can't. It's not possible to raise the capital to survive, right? Um I thought there was one bad metric that wasn't in the S1. I thought the worst metric wasn't in the S1.
7:14The worst metric was that Broadcom had to bail out this this debt issue so that Anthropic could buy its chips. That the market was saying it doesn't get much it doesn't get any better than Enthropic.
7:25We just read the S1, right? It doesn't get any better. But they weren't able to get this debt um uh for this semi-ircular deal with Broadcom and Broadcom had to come in and guarantee most of it and they had to pay even higher interest rates than expected.
7:40It's not that it's it's terrible, but it certainly suggests that that that going forward fundraising even for Enthropic and OPI and even if it's somewhat indirect, is it's it's getting harder, right? and and that combined with the fact that it's getting harder and harder for the banks to lay off and sell the Neolab debt is I think that's the real the only one to be nervous about that that that that the debt isn't is exhaustable here pushing back on that because I do hear you I because I would
8:07actually I think the fact of the I think the amount of debt the banks are digesting has hit the limit but I actually think the interesting thing about this week and about the last few weeks has been we're we're equitizing ing the issue. In other words, it was all debt. But if you look at Anthropic is about to issue plus or minus a billion hundred billion of stock. You know, Meta issued $70 billion of stock.
8:31Earlier this year, um Google issued about $80 billion of stock. Obviously, SpaceX did their IPO, right? What you're seeing is that there are a class of companies that has that a have cheap cost of capital and b are willing to take equity dilution to make it all happen. Right? So my aha from that is at the macro level, it's just going to keep on happening, right? This trend is not stopping and the people who want to have it happen are willing to take equity delution to keep going. So the spend
9:00will be there. You're right, Jason. I mean, Elon's doing his thing of, you know, cutting off the oxygen from the from the other people. It's like, oh, you people who just have debt are screwed. Uh, you're going to die. I on the other hand have the world's one of the world's most inflated market caps.
9:15So I can issue equity and you know get access to all the chips I want. So it was very much a kicking someone else while they're down move which is very vintage and you got to respect. But they'll have like 200 million of total cash on the balance sheet or something like that after this after this anthropic will. So that is that's a lot of cash.
9:33I mean let's be precise. I think it is either the first or second largest pile of cash in all corporate America, which is I read it was the second, but it doesn't matter.
9:40This is a company going public. I mean, this is a company going public where it already has more money than every other company in America bar one at 110 billion on the balance sheet today. I mean, they've done a masterful job of raising 130 and only spending 10 or 11.
9:55Do we think it's going to have an amazing reception?
9:57I do. I mean, I'm not sure. I mean, hell, I don't know. You know, um Oh, we're in the predictions game, Rory.
10:06I think I I think it should. I mean, I think it's an amazing company. You just can't argue with it.
10:11I mean, doesn't it like a SpaceX almost instantly have to go into the S&P 500?
10:15Not the S&P 500. If you're listing on NASDAQ, which I think it is, I didn't check. You go into the QQQ index, but the S&P index takes there's a profitability metric or something like that. So, it takes some time, but yes, they will be in some index funds pretty immediately, but I don't think this is going to need that lift in the same way arguably SpaceX did. I think this is going to be just a stock people want to own.
10:36But even just getting indexed into everything in the net is a it's just a retail boost, right? It's just it's hard to bet again. They're not going to miss a quarter like I mean it's in the with whether it's 900%. I mean, with within a range like I I it's not that I don't think they could disappoint, right? But within the next two quarters um with you know and I you know I think we have to be careful to use NR as a as a metric here but it's still true right with 900% NR even if in reality it's more like 30 to 400% because it includes like pilots
11:04and trials um uh I just think that plus the brand plus being in the NASDAQ 100 um it it it'll probably have a good retail run plus SpaceX I I you know why would you bet against it if for Sam Molman reading this thinking about Q1 going out himself. Do you think he takes away anything from it, changes anything as a result of it?
11:27You can't change the past.
11:30I mean, hard. I think you I probably think if you were the CEO of OpenAI, you would look at this and go decisions that you made you now regret because you've let these guys get away from you and do better. So, I think there's pro there's if there if there's any self-reflection, there should be a ton of that going on.
11:49um nothing you can do about it. You just got to get your business together and converge and get out yourself and in the meantime obviously compete aggressively on price to try and screw up their Q3. I mean I mean never has such a successful startup named itself so poorly that I can think of as open AI. I mean it would have killed almost any other startup what they went through right with the co drama all the other nonprofit to profit drama. um despite startup doing better than them um they basically let
12:18anthropic control part of the market for almost a year which is like 5 years or 10 years in AI time right uh I mean um so it's just you know everyone I mean there is there is a certain amount of par with Astra and the open weights models today the best but anthropic owned the [ __ ] owned the playbook for I mean the the chessboard for almost 12 months there's no point in using any other coding solution and coding is the killer app as Rory said 100 times and the math is true. They literally letting
12:46Daario walk out the door rather than build it in-house and then firing the CEO and bringing him back over the night of long knives. I mean, my god. I mean, it's all going to be okay. Uh, but talk about an talk about own goals, right? I mean, every startup's full of them. This is just uh this is these are some epic ones. I I had the joy of having Sachi Nadella on 20VC earlier this week. Great show. It was a fantastic guest to have on. What an honor. Uh Microsoft had some pretty big news that they were offering
13:15voluntary buyouts to 60,000 of its 223,000 employee base. It's an enormous amount of the employee base to get this offer, roughly 27%.
13:26Jason, you've spoken before quite viciferously about this topic. What are your thoughts?
13:32Well, look, uh first of all, um I mean Rory Rory may have observed more more of these than I have. Maybe hasn't. I hope he hasn't, but it's not like all 27% are going to take it, right? And they've already been through I think they already went through a 10% layoff round, right? So they've done it's it's it's a some sort of interesting um uh game theory here where you want to offer it to everybody you don't want to have, right? And then you got to figure out what the yield's going to be, right? It but it's brutal because what it says one thing no matter what people are going to
14:01say on LinkedIn, these 27% we don't want them.
14:03Yeah. I I go I whether 7% take it or two point we don't and you it is there is no this is a worse scarlet letter than a layoff than a pure layoff at least a layoff you can kind of wave your hands this is 27% of the country they said do not meet our minimum we we don't want you and I bet it could have been higher but but I bet they got this done in a week it's so it's so damning that Microsoft doesn't want 27% of its people that that is the age of AI they don't want them why would you do that if you're Microsoft though what a culture what so you stay and then
14:33know that you're not wanted. Isn't that awful? Like I think we're trying I want to get Royce. I think you're trying to do this in a humane way. And I think what we learned is there's no you know when when layoffs started like in late 22 or so, right? Everyone f everyone was fried for doing them on Slack or by email. Oh, it's so inhumane. Go meet with people, right? Everyone was f like it's not that more humane to meet. Have you seen Office Space? Like it's not more humane to meet with someone in HR and get fired. And then they were like don't do it over the holidays. So they fired
15:02people on January 1st. That was no better. There's just so this is a way to like make it more humane. It's it's great for folks that were thinking of leaving anyway. It's great for them, right? It is great for the folks that are at the either at the tail end of their career or they want to check out of the workforce. And that's why this is so hard to do from a game theory perspective because you might get all the the the the folks that were going to leave anyway, right? But Microsoft has so much cash, who cares? Um, but it's an attempt to be humane and I just I've been on the other side. It's been a long time since I've been on the other side
15:31of a layoff. just hard to it's hard you try to be a good person but you can't it's hard to make it humane it sucks no matter how you do it and I think this is the suckiest way because 27% of the company has just been issued a scarlet letter I think this is the le in attempting to be humane this is the least humane way to do it just fire another 9% in one day do it on teams and move on it is rough no I I think you're right I I I process the same thing you've been told to go but you decide to stay the only winners are as you say the people who've got another job lined up and now
16:00have a call option on the severance package. But yeah know it is interesting they think they can do without um you know if the take rate is 10 or 20,000 people it's it's clear it's interesting they can do with you know they have around 200,000 employees so they think they can do without another 10 or 15%.
16:15Which you know possibly is true. I mean you wonder how much it will be AI efficiency how much of it is just you never needed them. It would be fun to find out, but yeah, no, it's these large companies as the depreciation bill for the capex comes due, you're going to have to find it somewhere else. And we've talked about this, you know, frankly, earnings this year, 2026, are in that golden period where the people who are selling the semiconductors are booking the gains, but the people who
16:43are buying the capex aren't booking the depreciation. So, everybody's winning. But I think as you start to look to 27, that depreciation is going to start hitting in Microsoft and Google and Meta and places like that. And you know, to keep the operating income up, you're going to be really pushing on headcount. And this is what this is when the bill for AI comes due. And this is how it'll be paid.
17:05Yeah. It's the brutal in a sense. It's it's like it may feed the anti-AI frenzy because it it it it it's the direct narrative of the story, right? We're going to to pay for all this in infra to pay for all these GPUs and infra and inference we got to get rid of the people and so you think 2027 we're going to see that really crystallize even more intuitively as time goes by you know everyone's trying to call when the hyperscalers start kind of going down the other side of this so yes as as the depreciation bill mounts up like so far even though free cash flow's been kind
17:35of going the wrong way everyone's operating margins have been you know operating income has been going up and yes that'll get harder now so yes this will be the problem this will be the issue I'm just surprised that the Cloudflare layoffs aren't more discussed because I think it's case study 101 for CEO MBA right every Cloudflare Matthew comes in epic year for Cloudflare every quarter is growing faster but on May 7th they lay off 20% of the folks bam we don't need them we're too big we don't need
18:03these folks we are better off with 80% of the people than we were before and it keeps accelerating like every co that's arguing about this should just look I mean, you can say at Microsoft, some of it is the old company and it's um and we've got to pay for the for for for for all the AI, but Cloudfare is just like this is just holding us back. 20%. It wasn't 8%. It was just boom, we're just going to do 20 and no downside to the business that that is apparent yet. So,
18:31I think it's just layoffs 3.0 or 2.0 is just going to happen. And it's and part of it's to pay for the infrastructure and part of it is just enough already.
18:38Enough of the performative AI, enough of this. And we just we just because it's just so you know, think about every board meeting you've been in of the last week or if you've been in every no matter how well you're doing, it's just stressful. Everything is moving even faster than the last board meeting.
18:51There's even more competition in every space. We just can't we just can't carry folks any longer. We can't or we're going to die. We're going to be killed by that new company Harry just funded or Rory just funded. There's no there's no stability. You know, all the thing the tough part about the Microsofts and the Salesforces and the SAPs and every SAS company back in the day is we were all predicated we would get to a level a plane of stability at some point. 100, 200, 300 or 400, 500 million of of of AR. We could kind of breathe. There's no planes of stability at all. Maybe maybe
19:20north of 10 or 20 or 40 billion. They just don't exist. So, I just think layoffs are just going to accelerate because we have no choice. Speaking of having no choice and where cash comes from, Mad goes to the equity markets, Zuck needs 7 $95 billion. Uh, and this week on Monday, it launched a raise of up to 95 billion, 35 common uh, and preferred, 60 of the market program. Um, and the thing to take from that in
19:49combination with the fact that chips lose 200 billion in a day and public markets in bloodbath as Neoclouds [ __ ] the bed. I I I no short answer, Harry, is no. I think they're two separate points that you merge there and I'm just dealing with each of them in succession.
20:06I mean, I think the meta thing, yeah, which what we talked about, they this was the first quarter where their actual capex dipped below their free cash flow, right? So they're a free cash flow negative, right? Because it because remember their core business is one of the best business on the planet. It spits out money. It's awesome, right? So they have like 33 billion a year cash a quarter of cash flow, right? It's a great great great great business. So um this is the first quarter they went negative. So they just did some equity.
20:32So that's that and it's totally unrelated. The chip thing, first of all, yeah, I mean chips moved last week, but let's be frank. Since the Anthropic I don't know where they'll be when this show comes out, but since the entropic S1 hit, chips have been bouncing up because the consensus is that looks good and you know it the one thing that the S1 was good for was chips because so those stocks are actually up. In fact, DRAM today is way up which is the you know the definitive the one I keep an
21:00eye on just the list of the um it's the index of memory chips and and yeah that's right Korea Korea's up 10% today.
21:07SK Highex, right? And this is Tuesday, by the way. So, I actually think the news is if you're in the semiconductor capex business, it's been a good back half of the week. It was scary two weeks ago with Core Weeave, but you know, Cororeweave is a I don't know 20 $30 billion company and Entropics is a $2 trillion company that has $200 billion when this deal closes and they're going to spend it all on chips. So, chip be happy. The only slight counterpoint, not to get off chat, it's it's all it's all
21:35green green, but it is just I know it's a different ecosystem and I know you it is apples and oranges, but the star 15 China, which is their version of is down 40% this year. So, we we do have interesting markets that are out of sync here for AI, right? Um because China is just as is gang gang busters in its own way, but it is interesting that that one's down 40. Uh different market, weird liquidity um while while ours is on fire. Speaking of China being on fire, Deep Seek raises about $15
22:03billion. Largest ever private Chinese round. By the way, um largest investors battery maker, I don't know how to pronounce it, Catel and 10 cent.
22:14Anything of note here?
22:15I think that um the the Chinese openweight models are pretty much over in the US. I think it's the beginning of the end. I'm not sure. Um, Deep Seek, it's great that it raised this, but it's beginning to be banned across all federal agencies. And there was a horrific thing that happened this week that was over sensationalized, which was this Coher Quen thing. I don't know if you guys saw it. It's pretty terrible, but it's terrible on a number of but it's not as bad as it looks. Um, what what happened, Jason, for people that don't know.
22:43Well, listen, Coher is a now a fourth tier uh LLM, right? Fourth tier player that has only sovereignty on its side, as near as I can tell. Harry, you welcome to correct me, Rory. Right. But, uh, it has sovereignty and sovereignty is a if you talk to anyone at the enterprise, it it's in the top five list. And so they found they they they found that over that Quen Alibaba's existing Quen model was calling to Alibaba servers both in China and in
23:13Singapore, pinging them and uploading data to them when it said it wasn't when it said it wasn't doing that on the internet. Um, and it's everybody's nightmare in the US that our data is being uploaded to China. Now, the the the I think Coher was more careful about how they did it. Even though they're they're talking their own game, you can't really trust anybody in AI.
23:37They're all talking their own game. Um, because this is good for good for them.
23:41I don't I there's no evidence this is a backdoor like social media thought like this is built in. This is probably a training mistake in at some level, but it doesn't matter. It doesn't matter if one out of a 100,000 times your d your confidential data is being uploaded to Chinese and Alibaba servers in Asia, in China or in Singapore without your knowledge and without your consent when it's been directed not to. What CIO or CISO is going to approve this model? I I can't imagine anyone would. And if this
24:11keeps and everything this is it, you know, it's just it's a junk to to Black October and all these cyber security issues. This is and if this happens multiple more times and Alibaba has said nothing, you just you just lose your job if you use these models. You're just going to lose your job. You're just going to lose your job. So it's pretty crazy. Um and it could it could could have been much much worse. Uh it could have been much worse. So I this got some press. I'm surprised it didn't even get more. It might be subtle but um again
24:40this is every everyone's nightmare using these openw weight models based in China is that your data goes to China and it did. So what happens to the stack when the Chinese open-source market shrinks?
24:53What happens to the gateway providers, the routers, your open routters of the world? What happens to the inference providers that thrive in large part because of a variety of models often Chinese? Your modals, your fireworks, your base 10s. What happens to this stack if that Chinese model landscape shrinks? Well, what goes as as Dev said when he was on the show, what goes up that quickly with developers can go down that quickly will change in a week.
25:19There's going to be s use some US opensource options, right? The question is given what we've seen about the expense of building a you know the compute expense that is taken on tropic to build their model and the fact that 75% of that compute expent actually goes to um building you know training a model. It'll be it will be interesting to see how advanced a model a US company like Nvidia can build and make available on an open source basis but because someone has to if someone doesn't do it
25:48then all you have is a closed source providers and obviously their economic leverage goes way up and you should buy even more entropic in the S1 in the IPO right and I think it's bullish for anthropic that this happens it's bullish absolutely no and uh I just I just I I I think you'll know the moment Elon's able to get cursor off uh these models is is it's a tipping point. If he could, he would. He just can't yet.
26:13Because Grock isn't good enough.
26:15And he already kicked Open AI partially out, right? But he can't he can't yet because, you know, he's got this this bet has to work. But the minute it can, right? And he said when he bought Cursor, part of the reason was he wanted that team's DNA to make Rock more competitive, right? So there's multiple benefits here, right? But there's there's some deep irony that a $60 billion uh core acquisitions running on China open source models primarily. It's it's not going to last, right? I mean again Salesforce forced Finn to rip out theirs before the acquisition closed.
26:44But Salesforce can tolerate a little bit more in Finn than uh Curser can because Curser's got a it's in the most competitive space there is, right? Um but as soon as he can rip it out, he's going to rip it out, right? It just it's not it can't run on Kimmy forever. It's just it just doesn't this is this is this is not it doesn't make any sense if you think about it. It's a temporary it's not just like highly illogical if you if you download and you run it locally the security risks are limited to none. I understand that CIOS are CIOS.
27:14How is it to none when it's dialing China and uploading your data? And what if in instead of a a 404 or whatever it was, there was a prompt injection sitting there. Very easy to do. And that prompt injection just uploaded your data. People that this has been here for several iterations of the model.
27:28Yeah. Know, I think people I think the question you wrestle with, Harry, is what can you know? How much can you know with 100% certainty as to what the model's doing, right? You know and then obviously separate from what the model does you can try and to some extent block it sandbox it from ex you know to prevent it doing that but there's a it's like having a you know a recalcitrant and difficult employee who's actively trying to subvert you once that happens your head hurts right you know if if if
27:57you had an intern and you knew that part of their you know that there was a risk that they would try and actively leak your guest list and your shows to your dreaded podcast competitor you know it would just get in your head. But it gets to this whole question of what can you know about what the model is doing? And if you read the S1 philanthropic again, one of the risks they say is basically the models will lie to you. The models will tell you they're doing not doing [ __ ] and they're doing it. So, you know, you get into this thing, what can you really know? And once you get to that point, it's really hard to you do worry
28:26a lot about a Chinese sourced open source model. So, there will be that push back, I think. I mean, Quen Quen lied. It says, "I'll call no tools." And and Clyde will lie and and and Aster will lie too, right? It said I'll call no tools. And what did it do? It it called servers in Beijing and in Singapore and uploaded data. It said I won't do it. So you really have to go deep in these open weights and really test it. And depending on how you test it, like nominally what happened with coher only happened one in 100,000 calls. So a bunch of folks tested it a few times and they sort of found this
28:55issue a couple months ago, but you had to run it at scale. But at Saster, we run 40,000 API calls a day. It doesn't get take very long to get to 100,000. If you're GE or whoever in the Fortune 500, you're running millions and millions a day. That could be every hour, every 10 minutes, it's uploading data. And again, this doesn't appear to be even um malicious, per se. This appears to be a training error in a sense, right? But who cares? Like if you're a for if you're a CISO, who cares if it's a training error uh or if it's a spy or
29:24even worse, if it's a training error and some other actor exploits it, which is the job of all of our intelligence services to exploit these things, right?
29:31To have pagers blow up. Um so I I don't believe Alibaba itself, the doesn't look like the engineers did it as an exploit, but the government could take it over or force them to. There's just it's why do you want to have this meeting? Let's just use haiku 55. It's pretty good, guys. your budget this month's 5 million and just I just enth I just I anthrop and and enthropic if you the other thing if you look anthropic is it's on the GSA list or whatever it's called again it's back in the government's good graces it's across all the GSAs with a 40%
30:00discount that means you know a couple months ago they were persona nangrada now every government agency can use it with a 40% discount and it's already pre-listed why would you use why would you use Kimmy plus I also think and again listen these are great companies I also think the fact that you have to pay Kimmy uh what is it 30% of your gross of your revenue to use it at scale for the inference providers there's just a lot of complexity here it may not be worth it at some level it may not the juice may not be worth the squeeze for many people I'm just trying to understand
30:30though last week we said that modal at 15.7 oh my god yes you buy and then you're saying no no no Chinese open source is not is going to decline significantly it's great for anthropic and open AI that is inherently bad for modal.
30:47I'm just trying it's bad for fireworks modal. I don't know how bad it is for open router. I'm just not sure. Right. I understand.
30:54Well, you you're making a fair point and I I didn't participate in the investment committee because I don't but um but I think to be fair Jason the you know the assumption is that there I mean it that there is demand for an openw weight model which is obviously the demand that inference providers primarily meet because and you just got to believe that there's a bunch more alter that there will be some US alternatives there and there also will be people for whom China is okay and there will be people for
31:24whom they want you know the poolside/ Nvidia one right and provided more provided something exists in the US that business is fine and you know I I do agree with you I think you it's not as clear a run as you know you have when you own your own close you know close source frontier model but there is a role for inference provision just because there's just so much you know raw demand for an alternative other than the frontier models you know to answer the qu I think Harry's got a good point I think both
31:53are True. I think a while ago when Rory brought up that there probably won't be another deal like Manis, right, which was a direct investment. I mean, I'm paraphrasing you, right? But after that one got unwound, no one wants to do that deal again, right? The sort of direct investment in an agent startup. This isn't investing in a US-based folks running o open weights but not open- source models is not the same as Manis but there is risk and I think if 24 months ago uh most VCs would not want to take that risk because it's a clear risk
32:22like you you don't have to fast forward to today with the coher Quinn issue to know it's a risk it's just the reason on on the IC thing the growth is so phenomenal that we're we're taking risks today that you wouldn't take if we didn't see growth that was jaw-dropping And that's the job of venture today. And it's okay if if it blows up. It's okay if if fireworks or whatever goes to zero in our portfolio at IC because we have other investments. That's the job. And we're taking risk. We wouldn't take this risk if it was a triple triple double
32:51double. But it's not a triple triple double double, right? But it doesn't mean that I it doesn't mean that the risk level didn't just go up in the last week and and uh between you know a a lot and these deepseek being blocked by the US government and this whole Quinn thing and dialing home and and uh and and this hype and and and anthropic being uh on the GSA schedule. These are negatives. I think what we may look back is and I still would I still believe in the IC.
33:19We may, and this is just my sense, I think there's a 56.3% chance. We look back on Open Router and this was just a moment in time. It was a moment in time going back to earlier the show when OpenAI stumbled. So, Anthropic was the only alternative for state-of-the-art coding and then the the Chinese openweight models got really good at coding. That's what that's what Elon said, like it's really good, but and he even said they'll catch up to Fable by the start of next year. So there was a gap that these models filled and now open AAI and others are going to
33:48fill this gap and the lowcost models are going to fill the gap like they they each now have a much cheaper model that's much better and we may see these openweight models go from 60s something% of open router to 10% in 6 months and that would not be an extraordinary amount of change based on what we've seen. That would not be this is not sticky.
34:05It wouldn't. But Jason, you've talked very well, I think, in the past about maming markets in terms of kind of the fortnightification, the shrinking land that's available. And to Rory's, I think, eloquent point, there will still be some companies and there'll be some companies that want reflection and poolside, but it is a maming of an open market. I think you had to look at it the side. I understand the point you're making, but I think you've just got to look at it. The inference market is still so big. I mean, we we added up all the competitors and they only had $5
34:33billion, right? And you know, we just agreed that the closed source two frontier models are h 100red billion already, right? So as long as there's yeah, if 10% of the spend is willing to kind of do put up with the brain debt of open source to save real money and you do save real money, then there's going to be demand for that.
34:51So you know I I does it get to 30 billion? I don't know. But yeah, when the overall market is so big, 10% of it is still big. And that's the bigger higher. This is it's the mother of all markets. So everything else works.
35:03Jason, you teasered Black October, but I do think it's significant. Open AAI models and whiz found two very critical uh PHP flaws uh hidden for more than a decade that have been exposed thanks to you where we are in the cycle and the sophistication of AI and some models.
35:20What do we take away from this, Jason?
35:22How do you respond to this? What should we know that we don't know? Help me out here.
35:26Well, look, I mean I mean we we said months ago on this, I said everyone's going to be hacked, right? That's the the biggest change is uh you know back in the old days before the models got good I remember my co said the only reason we haven't been seriously hacked is no one cared. Now anyone can be hacked in seconds. I've people attempt to hack faster every day. So everyone's going to get hacked. And this PHP thing actually is worse than it looks because there's so many websites in PHP that no one's going to update. It's great that a lot of stuff runs on WordPress or that
35:56Replet and Lovable and others immediately ran like gateways or barriers to protect you. I mean, they're not all running on page, but they immediately ran and and and a there's a lot of stuff that went up and people people released patches and updates, but you know, a lot of government and other sites and and nonpr they just took their websites down and who who's going to fix it? I mean, PHP is still the like 40% of the internet, right? And I bet it's more of old crap, right? I bet it's like 80% of old crap. So, like this is like Mr.
36:22robot live. Like all these old websites are running on PHP. No one's patched them since this happened. No one cares. The IT team was laid off 3 years ago. They're they're not vibing nothing, right? And we're going to find our way into all it's just going to get worse.
36:35Everyone basically including Sam just said it's going to get worse and worse and worse and worse, right? And um it's it's uh I I think we're still grappling with the fact that that everything that is a threat vector will be exposed almost in real time because if you're not up to date with the latest stuff, you're way behind. So there's just Are you right, J? There's going to be a year or two years of this and it's just inevitable.
36:57I think the only thing that's going to save us is there's only so many people that can pay large ransoms and there's only so many systems that control dams and and uh other natural resources.
37:05people are going to give up on putting too much energy if they can't if they can't make money or debilitate something, right? So, it will actually it may actually uh uh uh decline for a while when they realize, you know, hacking the 20 VC substack only gets you so much money, right? Um but anything that can be stacked hacked is going to be hacked. But, you know, ransomware is just getting more and more um is is just get is is getting more and more professionalized. It's just it's just the next level, right? There were a
37:34number of large private rounds.
37:37There was Lagora raising 550 million and 8.8 billion. We've spoken a lot about Lagora versus Harvey in the past and passing 200 million AR. Um just in the last 24 hours there were rumors um and we obviously never never comment on rumors, do we Rory? Um of Instinct raising at a $30 billion price.
37:56I saw that. Yeah. Yeah. Yeah.
37:58Um which we can go into. We can have some fun with that one cuz a lot of people are suggesting that is peak peak peak um cuz the revenue multiple for instinct is the same as it is last round which as someone mean the valuation didn't go up.
38:11Yeah. No, exactly. It's just uh we have uh others like the exopi research chief Bob Mcgru with a hitting a billion5 raising 232 million.
38:24I'll tell can I ask one question on the instinct thing? It's a question to you guys because you guys would know better than me. We could make fun of the 30 billion at token revenue, right? And and and and and and say it's a sign of the times, which perhaps it is. The question I just kind of wonder is when will we exhaust the equity here? We just talked about equity versus debt for the public players, right? It's it in a sense the 30 billion doesn't surprise me. They need the capital to pay for for for the inference, right? They need the money.
38:49They what are they raising? I mean, it's rumored. Let's say they raised three billion, right? They need it, right?
38:52They need it. I mean, for forget about the rest. This isn't just a vanity raise. They they genuinely need the capital to compete. But where I mean even if you're getting every dollar that every sovereign wealth fund has, that GIC has like how how much money is there for the instincts of the world? It feels in infinite now, right?
39:12Yeah. But how much is it? I just don't know how much it is. And um and when that when that merrygoround ends, we just have a structural issue in this late growth phase. We just have because right now it's it's game on, man. I I did an I did an Instagram on Instinct and I had over a thousand DMs and over half of them were asking to invest.
39:32I mean, yeah. Look, why are we surprised? We've just seen the most successful private investment in history take place. Four years ago, you know, Spark brilliantly put money into a pre-revenue deal that's now turned into, you know, hundreds and hundreds of times 75 million. Everybody reads about that and says, "Oh, that's easy." And there's gonna I mean when when you have that kind of tangible evidence there's going to be everyone's just going to look for the next you know ticket and everyone's going to conflate everyone's going to think ever because it's always true to
40:02say whenever you look at one of these deals you say well it could be huge and we all have that sentence and that's going to be true of every one of these things. I actually this is why I would unwaveringly do instinct at 30. If I was coming into the IC, I would unwaveringly do it. For years, we've been promising a super app for the West, a WeChat of the West, which handles your finance, your identity, your security. And finally, we have that with Instinct where I'm not saying it's G, but there's a small chance that it is the super app.
40:30Here's why. I'm unfortunately, Harry, I've got to override you on the on the icy. Um, and I I rarely I r I rarely do this. Um, and I'm going to put my little black uh pebble in in here. Uh, it's not that I don't believe your argument. I I do believe it, Harry. I've just at this point I need I need 3 to four months of data. There's not enough data at Instinct. There's not enough data to prove to me for our fund for our fund given our reach, which is substantial, but not the same as our friends at Andre and Horowits. I need 3 to four months to
40:59believe there's there that this momentum is real. And I'm not saying this isn't an exciting play. I just want and and I'm not looking and I'm not looking for moes, but I am looking for evidence of that 900% nranthropic that is slightly durable. That is slightly durable. I'm just not seeing it at 30 billion. And so I'm sorry, I've got I've got to veto this one. It's not that I don't I don't believe in it intellectually. Um but I I I just I I want I'm I'm just tired of doing growth rounds with one month of traction. Harry,
41:28uh so I for me it's like they'll have raised $4 billion. your lick pref on that means that given the quality of the team and the strategic nature of the market you'll definitely get that back Microsoft would buy this in a heartbeat so would several I think other hyperscalers including your matters of the world um one so your downside I do think is protected and I think your upside is really as we said the super app of the west a movement into a subscription business an ads business a transaction business on all sales and e-commerce
41:58um I I I think it's one of the most no-brainer deals for if we're an Andre of the world, Jason, for us to be putting money again. We've just raised a huge fund and we need to get it out the door in 18 months. Amen. I want to do this deal. I hear you. And listen, I I I don't want this to break our relationship, but I feel like for our growth rounds, we need 100 days of traction. I feel like we need this rule.
42:22We need 100 days of I'm willing to do the multiples. I'm willing to roll the dice, but I want 100 days of traction for a growth round. I just feel like we've had too many too many stumbles when we do a round with two weeks of traction. I just believe there's too many.
42:35What would you what would you want to see? Because I think the cohort data would be incredible and the I haven't seen it so I'm not commenting but the usage will be incredible. I mean I've heard it's unlike anything any investor has seen before who is doing it. And so what would you want to see? There's no revenue data for you to see. Usage data.
42:54Well, what do you want to see in usage data? DAUs, MAUs, replacement of chat GBT, help me with no revenue and an unclear business model based on uh travel. Um I just think we should unfortunately pass at 30 billion. I just want to see a 100 days of something besides negative gross margin growth of a fungeible product. That's just that's just me on the IC.
43:18It's just if we lose the 2 billion, it will name the fund. And I'm not convinced of the liquidation preference here. I'm not I'm not I'm not saying you're wrong. I just This one might be a bridge too far for me.
43:28Jason, you don't get it. If we lose the two billion, it was Rory's deal.
43:32I'm comfortable with the fireworks at 40. This one at 30 just makes me nervous. Fireworks has met my 100 day rule. It's got 100 days of compounding genuine uh growth uh that I don't believe is durable to our to our earlier point, but I believe is is truly measurable and bankable. Wow. So you'd rather durable growth where you don't foresee it being better than not having that data, but where you do see it being better. That's that's
44:01I still think it's a better investment than Hoppin, but I'm not comfortable with this with this consumer negative gross margin bet. I'm just not comfortable.
44:08Look, I you ask an interesting question, Harry. Stepping back. You're right. What you're basically saying is how do you compare known market solid growth growing nicely you know not nicely understates fireworks a ripping market where you know inherently it's not magic pixie dust there's going to be five competitors where you know your upside is real but it's cap you know capped at some functional level because there are five competitors and you're comparing that to how do you think about this thing where if it becomes everybody's
44:37thing it's a $200 billion you know everyone uses Instinct. It's the replacement for iMessage plus um Facebook. Yeah, it has that potential to it. And you're right, is that there is more on capped upside in instinct and how do you weigh up, you know, what what does your you know, you got to do the three-way payoff matrix. You know, if it's amazing, if it's good, if it doesn't work, and look at the two and you it's what kind of action are you looking for on the table, I suppose, is to some extent the question.
45:03Every big fund should be fighting their ass off to put as much money in instinct today.
45:10So, I'm voting for it. Okay, next one. On the IC, Jason, you've got Kevin While leaves Open AI Science to launch Warp Science with 215 million. It's a very early preede, so you may not be comfortable with that cuz there's no data. You've got the Open AI research chief, Bob Mcgru, where he raised the 232 million series A. You have uh Lorra's 550 million round. I mean, yes.
45:36I mean, they're odd things to put together. I mean, I was trying to make sense of this thing, right? It's that there's a plethora of deals this week that I would describe as absolutely proven executive big opportunity, hairy technical challenge, but big opportunity if it works, right? And that's to some extent is the flapping airplanes thing.
45:55To some extent, it's ARDA, which is the Bob Mcgruz deal. To some extent, I don't know as much about Warp Science, but it feels like the same thing. big idea, talented executive and there's just clearly a wild appetite for that at, you know, fairly high prices with relatively little de-risisking, right? And that's just one whole, you know, I mean, there's four or five of those kind of deals here. And then the other type is the, you know, latestage, you know, known good company doing really well, you know, maybe Lora, maybe
46:25in a different way, Black Rock, um, sorry, Bedrock, where, you know, it's not as binary based on a person. And it's just how do you price these latest stage companies, right? Which is easier.
46:36I mean, at some level, it would be easier to get your to figure out your head on Lorra bedrock than it would to be to do flapping airplanes, ARA or warp science, where all you know is the executive in question is talented and the opportunity if it works is amazing. Welcome. Welcome to the game.
46:55I'm going to take a radical approach for for the IC. Harry, I know I know it might make you uncomfortable and you should veto it, too. like I I want a veto instinct. Um but I think there's moments and I know you don't totally believe me but I believe in even in many best startups sometimes there's dislocation moments where the where the market briefly struggles and I think we should put 20% of the fund into open AI at the 1.25 bill trillion dollar round.
47:17I think that it is mispriced. It is a moment when there's a little market panic. Anthropic is on fire. SpaceX has done well. The models are wildly competitive today. The OpenAI has closed all the competitive gaps. Um, it is a well-run machine and it reminds me a little bit of that anthropic round at 183 billion or so when when it was dis when the when the valuation made no sense visav Open AI. It was a dislocation. A lot of people made money on that round. This is a dislocation moment. This this is folks
47:46misunderstanding. They're thinking OpenAI is struggling when the numbers clearly say otherwise. And we can fart around with these little 20 3050$50 billion rounds. I think if we put 20% of the fund into Open AI at 1.2 25 trillion. At least we can return the fund with that. Um and um and then we take our upside with with some of our other exciting bets.
48:07Why do you say that? What is the upside on Open AI at 1.25 trillion?
48:11Well, look, these are both going to be 10 to 20 trillion companies. Just look at look at the growth and the scale. Look at Enthropic. It's only.1% of of the of Fortune 500 budgets today.
48:22Clearly, it's going to be in the 2 to 3% range. Even by the most conservative uh estimates that us and coat together and Iconic have done, right? So, going from 0.1 to 2 to 3%. I mean, I need I need I need Rory's help here. That that's significant growth ahead of the investment. So, getting we you know, getting we need to if it's 20% of the fund, obviously, it needs to 5x delution aside to return our fund. Um there's a clear path to a $10 trillion outcome. 20 30 trillion the rest of the fund doesn't
48:51even matter. Um it's it's got a discount to entropic that I don't think it's going to deserve. And so worst just like worst case with some of your investments you get your lick preference back. Worst case here we double our money worst case it's not that bad to double your money worst case this that and that's what you get from these from these dislocation moments. You get to double your money when ordinarily these rounds like inflection uh or instinct are priced to perfection. OpenAI is not priced to perfection and that's rare and that's
49:20why I think we do 20% of the fund because that's the limit under our LPAC. Um, and we just tell the we just tell the LPS because we can do that without LPAC consent. We just do the the maximum without consent. We just let them know on Monday.
49:32The other thing is the quality of code today is so significantly better than it was in a prior generation. I I know every coding team that we work with has switched from claw code to codeex in the last 3 to 6 months. Oh, that's why we should put 20% of the fund in. People aren't getting it. They've achieved par.
49:48This is when you go all in, but the markets don't see it. The markets are too are too superficial to see it. 20% of the fund, but nothing small or won't it's not enough. It's got to be 20% of the fund.
49:58Interesting. And not crazy. I must say, Jason, it's like you're right. Is that an entropical prize? It'll be at two trillion, maybe a pop. You know, if you knew that this was the last private round and the trajectory of OpenAI was converging, I mean, you'd want to know that they kind of got religion and wanted to do something like what um Entropic has done. Yeah. Not crazy. If they if they continue to say we're going to spend, you know, we're going to burn forever forever, then I you wouldn't want to do it if there's another private round in it, but not a crazy idea
50:26because risk adjusted is probably less risky than some.
50:29Dude, I I I love that as an out there suggestion. My only come back to that would be could we not do instinct and open AI and actually hedged it's not a bad risk profile to your point.
50:40If you think that um if you if that's your definition of hedging please don't ever run a hedge fund.
50:46Why why my friend Leo told me that was how you did risk management.
50:50In all seriousness this this may be my weakness. I my scar tissue is I want 100 days whether it's seed or growth. I want 100 days. But Jason, you're just not I'm so I agree with you, dude. But you're just not getting that today.
51:02I might not be. But that and and and and I don't want to lose you from the fund, even though it's it's stebbings and and company. So if if if we have to do it to not lose you, I don't want to go all gotcha. I don't want to go all gotcha here. We'll do it. But I I just I'm going to use if I can use one black pebble this quarter, it's going to be on this one. And I and I'll take the hit when I'm wrong.
51:21Any other rounds that we think are worth bringing up? As we said, flapping airplanes, I thought it was an interesting one. Um, they're building models that learn from How about superdogs at a billion and a half? That one I need a little help with the TAM. I need I need Rory to give me my TAM analysis for for for Bionic Dogs at 1.5 billion. Or is just or is this just another Elon bet like he's going to make it work?
51:41For for context, Warhounds is a startup co-founded by Palmer Lucky, the founder of Andreil, that is essentially I mean genetically modifying dogs to be next generation conflict war machines. Yeah, would be an apt description.
51:57Put a valuation of 1.5 billion on it because you know it's Palmer Lucky. He deserves it to be honest. Um, discuss I mean I I realized that I had zero value to add on that. I mean I just I I genuinely saw it and said wow I mean genetically interesting. I mean how do you price that thing? I mean, you know, the Yes, I saw some analysis of the number, you know, the number of dogs the military used, blah blah blah, but you're all just, you know, moving paper around. I think it I think the
52:26investment memo probably wasn't one, but to to the extent there was one, it's, wow, that's a cool idea. Let's put in 50. I think that was the sum of the investment memo. Let's genetically engineer these dogs to be savage, right?
52:39So that they can be better war dogs. I mean, what can you say?
52:41Is Palmer lucky or like Yeah. Okay, cool.
52:45Exactly. Go team. Not not not well we I won't be doing it but who knows I mean once you found it on you know I didn't nearly said on traffic once you found it on a you know once you're the sword of the west you can do what you want. Well, I mean it's there is a connection between this and his other startup he just started this this laptop one blue chip right he's both solving sovereignty issues where where key national security things are dependent on vendors outside the US the dogs come from Europe apparently I didn't know this right I certainly know that almost all the the rugged laptops which probably you can
53:15sell for 10 grand right or much higher margin those components are almost all entirely uh from outside the US how big these models are I don't know but he's so He's such at the core of this of this of this industry that he's he he wants to plug these the white spaces he thinks are important and maybe the TAMs are small but the models make sense like he's he's right there and he has the channels to sell these products like he could get 100% of all the milspec laptops as soon as this thing launched.
53:42It wouldn't surprise me, right? So he get 100% of the of the of the bionic dog market and these are real markets where he has visibility into them that other founders can't penetrate. It's just, you know, whether they're worth it, I I don't know. But, um, I guess if you're Shawn Magcguire, your your returns are so strong and consistent, it almost you just do it. You just back them, right? I mean, everyone seemed insane. I mean, people were mocked in that discovery when Larry Ellison and Mark Andre gave Elon blank checks to Twitter with nothing. They just said, "What? Tell me the price. How much do you want me to
54:12send it?" He was mocked when he wanted to get out of that deal. But in the end, they're making money.
54:16Absolutely. No. Yes. So maybe I'll have to merge the dog start up into and roll or something. But haven't you seen Haven't you seen the brilliant um kind of uh cartoon so to speak or like graph where there's like you start here you go up here thinking that you know a lot about the market thinking you know a lot about the market and then you just come down to where you were and it's like founder founder and it's like where you are in your career zero years 15 years in the middle period where you think you're an intelligent
54:45investor no no there really just is the yeah I know I'm very familiar with that yes you just It's so so true. Um, any others, Jason, that you'd like to bring to IC this week?
54:56We're a very busy committee.
54:58Well, 20% of the fund is is I I think is enough for one week. I mean, we can't do that. 50 What is 20* 52? What percent of the fund is that? Help me. We'll be back. We'll be We've already been back to market this year.
55:10It's so interesting though. You know, I I speak to so many LPs. We just had our AGM. The single most common piece of feedback that I hear from all LPs is every mega platform went out to raise.
55:20They raised bigger, they spent faster, they're coming back next year, you know, I mean, look, yes, because it's work. I mean, we're Pavlovian creatures, right? And you know, if you put money into Antropic 3 years ago, it feels amazing. And most of the platforms did at some level, so they feel amazing.
55:36So, we're going to do other things over and over again until it and it's not going to stop until something goes wrong. So, yes, this yes, there's going to be these big rounds. We are risk on until until we're not. The public markets, oddly enough, let's be really technical. Interesting. On a 10-year PE, they're they're at an all-time high. I mean, objectively, they're at an all-time high. Interestingly, on a forward PE basis, they're actually quite cheap because the market, you know, oddly enough, um earnings have been so amazing in part driven by, you know,
56:04one-off gains from um privately held investments in the public companies that on a on a current PE basis, you know, stocks like Nvidia on a forward PE basis look cheap. Now you're going to have this long discussion on cyclical blah blah blah but you know the market isn't in any way the aggregate market isn't hurting now you know what is true is that 450 out of those stocks are hurting it's a really weird I mean a better statement how is it's a really weird market right now there's 40 or 50 stocks that are working in the S&P that are
56:33primarily associated with tech and AI everything else is quietly you know subpar right and oddly and then despite that there haven't been a ton of IPOs because everyone's been waiting for this trillion dollar thing and the whole world is in suspended animation. So that's where we're at, which means that just to draw to a conclusion, which means that it's a perfect time for these platforms to put a whole ton of money out on private companies because there's big demand for money.
56:59Any other stories, boys, that I've missed this week?
57:02No, I mean there's a lot. I mean, the interesting thing is you I did appreci it was odd because I thought you'd come in with anthropic and nothing else, but there's like there was a whole bunch of financings we talked about. You know, you got the continuing SpaceX Tesla drama which is going to run and run and entertain everybody for hours to come. And then you're right, there was a ton of really interesting companies.
57:21I had one that was under discussed. I didn't fully understand. I should have done more research on it.
57:25But there was much more drama with Zuck and the board about leaving California.
57:30Than was discussed. It was It was clearly a highstakes drama. I mean, they Zuck hired lawyers. The lawyers negotiated with the board. The board was not his ally. He had to threaten to sell all of his homes and leave in one week if they didn't give him the equity that he wanted to stay in California. There's a lot of mechanical things happening there with the billionaire tax and others, but the fact that it had to go with lawyers for months and threats to sell, I I get it, but it's certainly the
57:58opposite of giving of of of the era where founders are controlling everything, right? It's a there was a lot going on.
58:05Yeah. The one thing you can't control is your own comp. And I get it because, you know, even Elon has to do that because if you're the board members and you do this without kind of CYA 100 different ways, you're vulnerable to being very second guess. I my my guess is even if they're perfect, reasonably amicable, everybody should lawyer up so they have protection and you know they have a process cuz process is your friend in these things. But then on top of that, yeah know it was super interesting. I don't know the detailed dynamics on whether the voting but yes the
58:34billionaire tax is up and we'll know in a week or two but people who think there's no impact from that have never met a billionaire when you try to take 5% of their money away it turns out they take it really badly especially when you want to take 5% of their money away and you know there's some voting criteria on it when you have more voting control than anything else so it's more than 5%.
58:54And especially when the legislation says yeah we can do it again soon.
58:58I thought they'd already given it all away. Isn't this the point of the Priscilla and Mark Foundation that we have a tax efficiency?
59:04It turns out that people like to give it away but they don't like it to be taken away.
59:08Ah, you know, it's all about agency and control.
59:15Yeah, know that you're right, Jason.
59:16That was that was probably much noise under the circumstances. And you know, it looks like whatever happens on this billionaire tax, it's been remarkably successful in driving out enough billionaires that you will have an ordinary income tax hit. So, go team.
59:30And you know what I'm excited by with this show, boys, is it's obviously recorded on a Wednesday in a Wednesday night. It's, by the way, it's a Wednesday, Rory. Just just whatever. Yeah. But uh so there's not going to be like 24 hours before release and so there's no chance that there will be some massive news announcement really with a 36 hours.
59:50Actually, just to remind you, I think Microsoft and Google are Alphabet are reporting tonight. In theory, you could have anything, but who the hell knows?
59:58Totally. But my guess is I'll be shocked to discover that they're going to spend more on capex. Are we good, Harry? Are we done? We are rocking and rolling, my friend.
