2:39[applause and music] [cheering] [applause] Welcome to ETM. Thursday, 5th of November 12 on the dots. Welcome back to ETM. What a show yesterday. Absolute banger show yesterday. Uh another banger show today. for you today. Uh we can get into that. Uh we will be departing slightly earlier earlier today than usual. We will tell you why after the show.
3:09Uh we will put an announcement out. Get ready for a special edition of ETM tomorrow, but you'll have to wait until tomorrow. Uh we will drop a hint after the show so you get to see. Um but today is a new day. It's Thursday and uh let me pull up the Else agenda just to show you the lineup that we've got on today.
3:25We've got Charles Teno, CEO at Lemlist tuning in at 12:30. As I said, a little bit earlier than usual. And we've got John Burn-Murdoch, 12:45 Chief Data Reporter at the Financial Times. What an honor it is to have John into uh the show. First time we've had someone from the Financial Times on the show as well actually. We're always covering the work they do.
3:46We're huge fans of those at the Financial Times. It's a great institution and we've got John to come in and break down his recent thread, his recent post around uh AI productivity.
3:56What does the data suggest? Is it AI that's driving these improvements? Is it not? Why is it concentrated in the US?
4:02Uh a lot of discussions we had. And we've got Joel Pinyo, Chief AI Officer at Coherent, coming live into the arena for a sit-down. First Coherent representative coming live and direct to sit down with us for a great conversation about everything they're doing, the recent updates, the recent raise, where the focus is today, sovereign AI and all that good stuff that comes with it.
4:22All the fun stuff. And then we'll be off. You don't know where, we do, and you'll know tomorrow.
4:28You'll know I Well, I think we might announce it Okay, you'll know you'll know this evening where we go.
4:33You'll know very soon. You'll know very soon.
4:34Indeed. We'll be taking our partners, including Ewolx. Ewolx, the all-in-one financial platform built for the pace of modern business. Multi-currency accounts, corporate cards, expense management, online payments, all in one platform. Go to ewolx.com.
4:47A quick debrief from yesterday.
4:49Obviously had Cedric Clegg on the show.
4:52Yeah, we didn't quite debrief on that, did we?
4:53No, it was a great It was like it was a great conversation. I was really Cheers, everyone.
4:59I was really impressed by Well, obviously everything you were saying, you were incredibly tuned in, giving really cool, authentic thoughts, very, very novel conversation. But the smoothness It was It was like a conversation. I said on the timeline I said that Steve Ho reposted it and was basically like, you know, look at this guy, like true Englishman over here, like being so smooth and whatnot.
5:26And I said to Steve, I said, you know, I I felt like I was getting more chilled as the conversation went on. You know, I felt like we were like an interview. It felt like a conversation.
5:36had a pint of the old Guinness in front of us. And it would have been I think just a similar setup, which is great. And then Steve did reply to that saying, I feel the same when I go on ETN Show. And then I said to Steve, Steve, you are a true Englishman with how smooth you are.
5:54Wow. That's That's a big a big accolade to give to give Steve.
5:59Steve Steve is the GOAT.
6:01He is the GOAT. He really is the GOAT.
6:02of the all-time greats.
6:04Great partner. Thank you, Steve, for joining us whenever you do. We really appreciate it. But, yeah, overall, great conversation. Very cool to have that to have Sir Nick in the studio. Hopefully, there will be many more. We did hear that, you know, he enjoyed the conversation and obviously we did too.
6:18If you want to look at the full interview, you can see it now. It is live on X. It's live on Spotify. It's live on YouTube. It's live everywhere you get your delicious ETN content. Delicious for your ears, that is, not your mouth. But let's get into the news. We had some pretty London-relevant news drop yesterday. Sequoia, they have closed down their London office.
6:43Is it bad? Is it good? No one really I don't really know whether, you know, the consensus is good or bad because there are a few good takes, a few bad takes. Obviously, there's going to be a bunch of bad takes. I had good takes. I don't really care. Doesn't matter, I don't think. And not that's not to, you know, to to poo on Sequoia. It's more there shouldn't be, you know, building great companies isn't doesn't need locality. It doesn't matter.
7:08So I I do think that, you know, there are conversations around like the there is no longer like early stage. It's now there is no early stage in growth. It's just Sequoia. Like those two are kind of combining. And I think it does make sense when we look at the overall ecosystem right now. We look at the valuations that we're getting so early on. We're looking at the speed in which these are progressing from pre-seed, seed, A, B, D, like all all all the way up.
7:29I I think that the the process in which investors analyze companies, invest, checks, deploy capital is reacting to the pace in which the market is going. So I don't really think it makes sense that much to be, you know, early stage typically they wouldn't really want to touch because okay, we'll wait till the company proves itself out.
7:48But the upside of getting in early today compared to 5 years ago is absolutely astonishing, right? Like if we look at an instinct, for example, and we brought them up quite a lot, the pace in which they were raising was insane. The pace in which all these companies are raising is insane. So I I think it just does make general sense.
8:03Obviously, it's you know, I I'm a fan of the brand. I'm a fan of the partners who are based in London. We've had many of them on the show. Um, and uh, yeah, I'm obviously sad about the news, but from like a macro sense and how they operate the firm and that they they they broke this down in their in their tweet thread that they put out.
8:19Um, it obviously does make a lot of sense. And we did see a little bit of feisty action from Pat Grady on the timeline.
8:26Which is quite cool to see.
8:27Um, I just want to mention the I think the fact that so when I read the X article that they posted when they announced the news, um, they were talking about their focus. And um, very kind of um, very interesting way of focusing in terms of high concentration, very high conviction. Um, but I think concentration was the word that kind of stood out and it's like look like, you know, these companies are trying to find you know, these venture firms that are operating at the tier ones. Um, they are
8:57trying to find the next open AI, the next Anthropic. Um, they don't necessarily need to be everywhere to be able to do that.
9:03The next ETM, maybe. Um, exactly.
9:06But what what what they do need to do is situate themselves in the position where um, they have they are the smoothest kind of engine to be able to facilitate an investment like that. And so having, you know, a bunch of things going on all the time, um, you know, having different offices, having different people in different places is obviously great, but it does add a level of um, I think uh, I think complexity and therefore friction on the way that you go and
9:35invest if you're investing in that high concentration, very small number of bets kind of way. And Sequoia are in a position um, to be able to to to to win a deal like that. Um, and I think yeah, I think generally it was a smart move, obviously.
9:53You know, not good that they've left London, um, but also it doesn't hurt the trajectory that London was on. Um, I I I actually want to pull up my tweet that I post posted because it's now just coming into my head that I did post one uh, that was about London and it said this is not the beginning of the end.
10:08Uh, building world defining businesses does not always need locality. The phrase being global from day one has been put through the wringer by a bunch of VCs, but it is genuinely true. This does not change the trajectory of the UK. Uh we are directionally moving more positively than ever before.
10:24Sequoia are world-class, but they do not need physical office presence for our direction to change. Stay heads down like the US are doing and keep building and investing like we are. And I think um it called to the fact that look like you do not need to be here to uh invest here. Uh what was that stat? It was like the was it do they lead isomorphic labs or something? They they led a big round. Monty?
10:47Ineffable intelligence.
10:49They Sequoia led ineffable intelligence.
10:54Um and so like you know that's an example that calls to that and so you don't necessarily need to to be here.
11:00You don't need to have a physical presence here. Yes, it's obviously great that they feel it's valuable enough to have an office here, but does it change the direction of the of the country and the way that the VC ecosystem and startup ecosystem is moving?
11:12Not at all. Literally nothing. And that doesn't mean you know Sequoia are bad investors or you know I don't value them, but um I think they're valuable enough that they don't need to have boots on the ground here 24/7.
11:25Yeah, yeah, yeah. And the the the the overarching thing that stuck out was basically just like operationally this is just not how we want to run the company.
11:35There's no point that we're doing this why we can do everything from from SF anyway. Um but the the FT uh the Wow, it did a million views that.
11:42Well, they are the ghost to be fair.
11:46But the FT right the problem in tech investors Sequoia Capital is closing its European headquarters in London in a setback to the UK's ambitions to become a major player in the booming AI industry. Again, do not agree with the tone you know that it's phrasing here in London in a setback to the UK's ambitions.
12:03Yeah, exactly. That's the thing. That's why I felt compelled to write something like like do not think this is a bad thing.
12:09Yeah, yeah, yeah. And they've done the same like they have a retreat from from China, retreat from India.
12:14But one of the quotes, we simply don't see the need for a local presence in Europe, the venture capital firm said, we believe that Europe will continue to produce outlier founders and companies and that we can continue to provide world-class support from our home base in the Bay Area. And we're seeing like a lot of people as well, like obviously some have left the firm and they they they mentioned that they had to obviously [snorts] individuals who are based in the London office, some of those were some of those parted ways with with with Sequoia, which is sad. Some of them probably happy about that, some of them probably sad.
12:40But like some of them were also brought over to SF.
12:44And you know, a couple of announcements were made like I'll be moving to San Francisco to continue my job. I am still backing European founders. I'm still backing UK-based founders.
12:53You know, anyone who knows about the talent in the UK, but specifically the town in King's Cross with all the neo labs and all the AI talent, they would be bad investors if they were not looking at all the talent coming out of London, UK. And like so and they're not bad investors. So like they will obviously still be ultimately their goal is to return capital to their LPs at a higher a higher rate. Like if you were to not look at the UK or not look at when I say the UK to me like I mean London and like Cambridge, I guess.
13:22Then you would be a bad investor because there is alpha there, which they aren't doing. So I don't think I I don't agree with this this setback of UK's ambitions. Obviously you can take a headline and see how it could be perceived as as as a as a knock, but if you understand how, you know, a typical VC would run their investment thesis, these individuals are becoming global founders from day one. It's a lot more common. You would know that it's not exactly a a setback to the UK's ambitions. There will still be capital flowing into the ecosystem.
13:46I mean, Sequoia's position in the ecosystem means that they have like they are going to be concentrating in those businesses that will be global from literally day one. They will be going to raise, you know, the the the kind of the standard growth stage investments obviously at the pre-seed and seed level. You know, they'll be raising the billion dollars straight off the gate.
14:07And Sequoia know that they don't need physical presence to be able to get into those deals. We just pull up the article quickly.
14:15A great example is A16Z. Like they had a London office. They decided to close it down. I think it was quite crypto skewed. But they decided to close it down. And it's like They turned it down. But like we know that we're incredibly close with the team there. We chat to them once a week.
14:34The amount of individuals that they're backing, the amount of London-based founders particularly they're backing, that has only gone up into the right ever since the office was closed. It's got more frequent. So like take that as an example as to how this Yeah.
14:53Capital will still flow to good talent.
14:54There is still good talent here.
14:57Hurrah. Let me just pull up the focus thing. So we are best at high conviction. This is why they made the changes. So we are best at high conviction, highly selective venture capital investing. This is our focus. We have removed much of the complexity associated with the Sequoia Capital Fund, Sunset, our Batch Accelerator, Arc, and Scouts programs and streamlined both operating and investing teams, putting more energy behind fewer people and things means and things mean means better support for
15:29Our team, there is no early in growth. It is only Sequoia. We are one team operating under one shared mission. This should make things more seamless for founders as they go from stage to stage. And now look, I don't want to keep pulling up the Thrive example, but it is literally what they do. It is keeping things simple. Their investment team is I think probably like eight people. It's really not very big.
15:51They manage like tens of billions of dollars and I want to say they manage 80 billion, but I don't know exactly. Maybe double check that.
16:01And they they have streamlined the process and exactly what Sequoia are going to go and do. And so moving out of London was a necessary step to go and do that. Does that mean that they're not going to be investing in the you know, the next in effable intelligence or the next round that comes out of a, you know, one of the deep minds mafia or whatever it is or 11 Labs mafia or I mean I could go on, right? Like there are these people who are able to go and garner
16:30investment from these incredible tier one firms, but it doesn't mean they need to be in London.
16:35Yeah, look if it was 2010 I'd be like oh that sucks and that would have a material impact on the ecosystem for sure. I'd agree with the FT's comments, but you know that just doesn't add up today. It doesn't need to be like that.
16:45Um Exactly. Exactly.
16:47Um But yeah as I don't think there's any really there's anything else that I need to that I need to pull up from here so we can turn it down.
16:53Yeah. No, but ultimately yeah I think just taking A16Z one times have changed. You don't need to have a physical base in any area like we see all the investments they make in Europe and all these like front leading companies. Two taking the A16Z example as as a literal case study they scrapped their office. Fair enough it was crypto focused.
17:13They have you know an amazing scout program, but what was interesting actually that I do want to discuss is the fact that they also decided to shut down their scout program and another bit let me just get that arc and the the accelerator arc.
17:29Yes. Yeah yeah yeah yeah yeah.
17:30Why do you think that's bad? I don't think that's bad.
17:32No no no no It's interesting is the word I used. Not bad. I think it's interesting because they I agree again they just do not need it.
17:42No yeah it's it remove friction. Just remove all complexity.
17:45it's extra Do we want do do we want to be managing hackathons and whatever like demo days at our accelerator or whatever it is like do we want to go and have the the cognitive burden of that? No. Is that going to go and get us the next OpenAI Anthropic the next thousand you know million X? No.
18:05Mm yeah So no need no need to do that.
18:09Or it might do but the I think the you know you have to weigh the the the risk and return and I think the return on spending the time yeah you you can't you can't hedge that.
18:20Yeah yeah. I completely agree.
18:23Uh, not, you know, I think it's a it's a non-argument for a non-problem, essentially. Um.
18:28Exactly. We are still bullish, of course. We're still in London. Uh, we will not be moving like Sequoia. Uh, but we respect uh what they do. Um, let me quickly tell you about AdQuick, the intelligence platform for out-of-home advertising plans modified faster to measure everything, one platform connecting you to 1,700 media partners across 30 plus countries. Go to adquick.com. Uh, just saying I did spend some time with the AdQuick team last night and uh How was that?
18:50they're very good fun. I had a great time. Um, so uh if you're watching, you guys know who you are. Uh, I had a great time and uh we should we should definitely do it again. Um, you guys are legends. Uh, we love the AdQuick team over there. Um, let me tell you about Apple. Um, they are in the news again with uh AI budgets and cuts, trying to reduce spending. They're really not having a good time. Um, and uh we explained it uh in our newsletter, I think it was on Monday or Tuesday. Uh,
19:19we did an op-ed on why they're not investing in data centers. What are they doing in the AI build out? Nothing. Uh, why are they not doing that? Cook obviously built an incredible um uh an incredible business for the procurement side of the business. Um, but did they build an incredible business on the AI build out, which is what all the other hyperscalers are doing? Uh, no, they did not. Um, and so now it's Turners's time to go and figure out if that's the right path uh to go and take. And uh it seems like uh they
19:48aren't doing that right now, although they have Did they have earnings? They just had earnings, right? So um yeah, maybe next earnings they'll be they'll be pumping a little bit more money into uh into their compute stack um because at the moment they're renting and it's really not going very well for them. Uh, so this was in Bloomberg this morning. Uh, Apple Inc. is reducing employee budgets for artificial intelligence usage as part of a cost-cutting effort, even as the employees uh even as the company seeks to put AI
20:17at the center of its operations. Last month, Apple quietly lowered the daily spending cap for some people, um, including engineers using AI models, from $200 uh, to $200 from $300 according to people familiar with the change.
20:33Uh, the company is now planning further costs, uh, cuts, sorry, for some engineering teams, potentially reducing their daily allowances to as little as $100 um, that's insane. That's like they're just like that, you know, cut it in third thirds. Uh, the changes underscore the balancing act Apple faces as it tries to rein in costs while encouraging employees to incorporate AI more deeply into their daily work. The company is pushing to modernize its engineering processes and other internal operations
21:02with AI, um, even as it uh, it places tighter restrictions on how much employees can spend using the technology. Seems pretty um, In contrast to OpenAI, I think they were doing about $7,000 per employee uh, like sorry, for some of the top um, uh, top individuals there.
21:21But this is for AI engineers, so this will be their some of their best employees.
21:24I don't think it was per day. I think it was Per week?
21:27Yeah, maybe per week.
21:28I mean, that's still like still over $1,000 Well, that is $1,000 a day.
21:31Yeah, yeah, yeah. Um, uh, so yeah, surprised to see it's it's that list. I mean, maybe it's in response to like memory chip uh, prices.
21:38Well, it will be and they're renting their compute, so they don't want to spend any more money. Um, many groups outside of engineering already face a $100 cap, but Apple has considered reducing that limit to as little as $25 for some teams. Um, employees who require higher allowances to perform their jobs will be able to seek exemptions from senior leadership team.
21:57Uh, the budgets cover tokens, the units of text and other data processed by AI models when handling requests. AI providers typically charge based on the volume of tokens consumed, of course, with more advanced models generally costing more. Complex tasks such as writing and debugging software uh, can consume larger quantities of tokens. Um, this is now a little bit about their strategy. So the restrictions reflect a broader shift across the technology industry where companies that initially encouraged wide widespread experimentation with AI are increasingly
22:26scrutinizing the costs. The challenge is determining um how much spending can be eliminated without undermining the efficiency gains that prompted companies to embrace the technology in the first place. Now you'd be pretty worried as a CEO if [snorts] you know six months ago uh you were AI pilled and you were saying to all of your employees let's experiment, let's you know get into the AI chatbots and let's let's rip some tokens, let's
22:53token max and whatever. Um everyone was in the token maxing era and they didn't know it was going to end and then suddenly they switch and say hey guys uh your budget's gone from $300 to $25 a day and you can only do you know 10 prints a day.
23:10it it has happened it happened everywhere right? We had like the the token maxing hype, everyone just going crazy. Then it was like oh my god we're spending so much money and nothing's actually happening at the company. Like even with the token maxing what's actually happening exactly.
23:21Then we had like let's be slightly more cost conscious with this. Uh it was even started before this. It was let's fire everyone because AI is so great. Uh you know Klarna a great example of that.
23:33Fired everyone, nothing was getting done so they were like oh god let's hire them all back, AI is actually not that good, hire them all back. Then it went into token maxing, AI's great again. Then it was like okay wow nothing's actually getting done, there's no value in this. Let's restrict that and maybe like run budgets or look at like some sort of routing function and then now I think we're coming into like a hey guys let's just be a little bit more cautious on I don't think that every you'd be much better having the top 0.01% of engineers in the company, burning them as opposed to just giving everyone like you know $100.
24:03Like that's just I think that's that would be a much better way to to handle it. Um but that's Apple, that's Apple doing their doing that cost It's worth mentioning at the end of the article they do say Apple isn't isn't the only company seeking to control AI spending. Microsoft Corp, oh dear, has also tightened internal AI spending allowances while Tesla Inc imposed a 200 weekly uh weekly limit on employee AI spending.
24:27Uber Tech um meanwhile capped usage of individuals uh AI coding tools at $1,500 per month and Meta introduced token budgets and encouraged employees to shift towards internally developed AI tools. So I mean look they they are all doing it. They're all burning a bunch of tokens. They don't see the ROI here but what they do see is um well what Apple can't see is the fact that they probably need to go and invest down the stack and in the AI
24:56infrastructure but that is going to definitely take you know five plus years. This stock's going to take a bit of a tumble considering huge AI spend and whether Turners wants to go down that road is is completely up to him but he's definitely not sleeping as well as he he he would have been hoping the CEO.
25:16[laughter] Got to release the you know the water bottle pad to you. You can watch Netflix on your water bottle. Come over that one. Anyway let's go let go. No I love I love I love the stock.
25:29I love the stock. Let me quickly tell you about Charge B. Charge B is the billing and monetization infrastructure built for the AI era. Scale prepaid credits, complex enterprise contracts and all the other commercial constructs. All in one system. Monetize your intelligence at chargeb.com Legends.
25:44So the Pope. Let's talk about the Pope. The Pope has met with Bob Dylan and it has created some of the greatest photos of all time.
25:58Honestly it's just one of the most insane vis-a-vis like [laughter] it's like a Sith Lord meeting a Jedi. It is absolutely stunning and I cannot help but think there must have been a conscious decision to equip such a such a robe and I'm not talking about the Pope. I'm talking to talking about my guy Bob over there. Very very much needed.
26:23So what's going on? What what's going on here? The New York Times reported everyone likes to quote Bob Dylan. Even Popes when the singer-songwriter met with Pope John Paul II in 1997, the pontiff named checked a lyric from the Dylan classic Blowing in the Wind.
26:481963 Dylan protest song titled Go Away You Bomb. But on Wednesday, Dylan, 85, visited Leo, 71, at the Vatican and gave him a different book. Those familiar with the singer's not insubstantial self-esteem will be little surprised to learn that it was a copy of his autobiography, Chronicles Volume 1. In choosing his own gift for the singer, the Vatican said Leo, like Dylan an American, went for one perhaps equally unsurprising, a rosary.
27:14Leo's garb was also unsurprising. White papal vestments. Dylan wore a dark hooded sweatshirt evoking a monk-like look or a Star Wars character, according to the internet. He also wore a vaguely knotted polka dot tie. I think we just have to take a second. If you are meeting the Pope and you know what's the Pope going to wear? The Pope's going to wear the white the white get up, you know, he's going to have all of his Pope Yeah, he's going to have his, you know, white Pope setup going on.
27:43It takes a certain king Takes an aura.
27:47to have the confidence or the know-how or the self-belief or the yeah, the internal aura to dress up literally as a Sith Lord.
27:56Especially hooded as well. I feel like hooded is uh uh is just a step too far.
28:01It's amazing. And and the hood was worn when they were when they were when they were having conversations. But you have to think about his wardrobe crew thinking like, okay, like Bob, like let's just have a look at what you're thinking. He's like, I'm thinking uh you know, Sith Lord.
28:15Look at that guy in Star Wars.
28:18Uh you know, back in the 2000s.
28:19evil guy in Star Wars.
28:21Uh I want to look like that guy.
28:22Evil Emperor, I think I'll I think I'll go for. Uh it's just generational. I honestly can't get over how amazing it is to see.
28:28Um they go on to say according to the Vatican, Leo met with Dylan at the uh apostolic palace. The the said, was brief, consisting of greetings and a few lighthearted exchanges. Um, addressing the gathering, the Vatican recorded on Wednesday, John Paul riffed off a Dylan lyric. You asked me, how many roads must a man walk down before you can call him a man? Only one. Only road for man, and that is the road of Jesus Christ.
28:53[laughter] So, so cool. I mean, what, what, what like I don't I don't know why we're seeing and look, maybe this is a common thing and mentioned like Bob Bob Dylan has met a previous Pope. Um, but this Pope I think is maybe one of the greatest Popes of all time just because he's he's he's getting Woah, here we go.
29:12Hey, I know I know it's tough to call that, but like That is big stuff.
29:15He's getting stuck in with the AI narrative. He's writing threads on X. He's sparring with folks on the timeline. He's linking up with Bob Dylan. He's like just generational. Like the the the and obviously that we're seeing the intersection of like the philosophical debates, religion, the second coming of Christ, the Armageddon. It's all somehow now becoming entangled in the AI era debate.
29:38But how can you look at that photo and not just be like, what a gangster? Obviously for Bob Dylan as well, but for the Pope to sit down Like do you think there was a comment maybe about like Hey man, you look like a You look like evil emperor coming to his meeting. Um, but yeah, I thought it was worth worth touching on uh Pope Leo.
29:55yin and yang going on.
29:56Yeah, Pope Leo is uh is a gangster.
30:00We can see here why that is.
30:03Uh anyway, we can we can move on. Just thought that was worth bringing up for all of our lovely fans. Um We're 4 minutes. Um shall we go through the uh the highlights on the timeline?
30:12Yes, let's just have I mean, there's not too much there, but I do want to show you have that much time and then we're we've got three guests and we've got to we've got to dip.
30:19We've got to run. Uh Taylor Lorenz uh comes out on the timeline and this is happening a lot by the way. Taylor Lorenz says, I'm once again being offered a lot of money to promote anti-AI content. This individual reached out to to and says, hey, this is blah blah Uh, we recently launched an anti-ai campaign called hell with AI.
30:40So hashtag hell with AI, and would like to do a paid collab with you to inspire millions to join this fight because everything is at stake. Uh, and they say that they've looked at some of her previous work. Is it since you create or have created videos about AI, couldn't be a better match for this collab. Found you through the video of yours, billionaires are funding anti-ai content and liked it so much. I ended up watching a few more videos on your channel.
31:03It's like I liked it so much that like I would like to spelled fund you, you know?
31:08Um, Taylor is getting a lot of slack. I think Taylor became a little bit more AI pill traditionally was sitting on the left and then has become a little bit more centrist recently. Um, and she's been very vocal about this about the amount of hate she gets from anti-ai people for her new stance. But you look at some of the stuff that they're asking her to do. Here's the hell with AI uh, campaign. These greedy billionaires and AI companies killing humanity, but you can save it. Proud to say we're anti-ai because it is ruining environment with huge CO2 emissions and e-waste.
31:39Uh, Electronic waste.
31:41Yes. Uh, I mean, that's what it is, but what is that?
31:45I how is that different?
31:46GPUs chucked in the bin?
31:49I don't know. I don't know if they know that much about AI. Uh, Sam doesn't know.
31:52Massive energy and water usage causing high electricity bills and drought killing jobs. Act now, fight together, save humanity before it is too late. AI has [laughter] this is a hilarious start at the bottom. AI kills 500,000 plus jobs already. Next it's coming for yours.
32:09Woah, fighting talk.
32:10sort of like guidelines here. Don't use any AI products or software. Find and use alternative with no AI.
32:17The most hilarious thing is the fact that this logo looks like so AI generated. Go back. Go back. That's been made by the Claude.
32:26To be fair, it's so bad that I could even probably say that has been done on by some idiot human because it looks dreadful. But look at some of the guidelines. Don't use any AI product or software. Find and used an alternative with no AI. Refuse AI customer support. Ask for a human reps. That one's kind of fine to be fair. Millions of companies use AI support blah blah blah.
32:48How do you know? We've we've crossed the Turing We've hit the Turing test.
32:51fair, yeah. Some of these people won't actually know other types. I are you are you AI? No, I'm not.
32:55Great. Cool. Thank god.
32:57And then turns out they are AI because they are literally past the Turing test.
33:01Uh never ever I love how they have to like add these extra It could just be never. Never ever pay for any AI tool. Your money will be used to replace you. Don't pay. AI companies must stop their project. They can't survive huge bill needed to train That doesn't even make the right sense. They can't survive huge bill needed to train AI.
33:25Wouldn't Should not be plural?
33:27I think the AI must have hallucinated at that point.
33:29a pretty bad job. They should probably use AI. Uh don't watch This is a good one. Don't watch any AI slop content. Don't watch creators. You creators You don't watch And then a comma for some reason. Uh creators who use AI will be forced This makes no sense. You don't watch comma. [laughter] Creators who use AI will be forced to create original content. No AI. AI companies lose tons of money.
33:54This is not a very well thought out argument. Uh Here's what will work.
33:58do some good copy here. Come on.
33:59Here's what will work guaranteed.
34:02Your actions will raise serious public awareness powerful enough to bring down these AI CEOs and billionaires. If they I love how like even billionaires just thrown in there even if they're not like AI billionaires. Uh if this movement reaches even half of the American people, all these AI companies are done for good. They want to eliminate us.
34:18Take action and eliminate AI. Users using and paying for AI is the oxygen of these evil AI companies. Let's stop the oxygen supply.
34:28Fighting talk. Uh guaranteed if it reaches half of America, the AI companies are done for good. Uh and it's guaranteed.
34:36go. Stop watching AI slop the movement.
34:39I think uh I think you know what your next job is.
34:41Uh let me quickly tell you about Valerian before we jump into our Oh oh no. Here we go. We have them on. Let's do this. Charles, welcome to the show.
34:48[laughter] Yeah, it's great.
34:50Very good. Very good.
34:51great. Charles, we we are we are honored to have you joined us today. We're we're huge fans of Lemlist. Uh it's been one of those ones when I first started in my tech career, I used to see all the LinkedIn posts about Lemlist, about the way you guys scaled it, about all the all the amazing things you do. So yeah, I'm I'm I'm truly grateful that you you've joined us today. Thank you for your time. Um I'd love to just start by asking like you are acting CEO of Lemlist. What what does your job look like today? How do you operate the company?
35:18Yeah, so thank you so much for the kind words. Like uh I actually I'm very happy and lucky to work here. Uh we have a lot of fun and we are a bootstrap company. Uh so it's a it's a pretty unique and cool spot because we we spend our customers' money first and we're a 65 million ARR.
35:36And so my day as a CEO is basically like making sure um everyone operates as well as they can.
35:42Uh so the way I see the company is like how can we create more value for customers?
35:48And to do that, we we just basically try to have uh as much as possible like the smile of the customer and the smile of the employee. And so my role is to make sure that we know what we want to build, that everyone understands that and agrees with that because of course uh with lots of feedback from the team and and that helps to improve the the vision. And then making sure that everyone can build and that we can we can we can have a happy customers. So pretty simple. So that's very broad, right?
36:13It is. It is. But I think um obviously the main the the I think the main [clears throat] interesting thing uh on the business side is the fact that you guys are bootstrapped. And you know, we talk to a lot of companies who uh you know, raising lots and lots of money. We speak uh you know, we speak about a lot of companies that that are raising insane valuations. Um talk to us about the bootstrapped uh kind of strategy.
36:34Like how do you guys strategize um that's maybe different from basically like 99% of the the kind of startup market?
36:42Yeah, I think generally speaking, we are very let's say that we need to be very agile. When we grow faster, we just hire more people. When we grow slower, we just stop hiring. So it's it's pretty lean.
36:51So in in traditional company what you do is that you do a business plan and a budget. We we do that but we really don't mind so much. Like we check on a month-to-month basis and basically we earn one euro, we can invest 0.7 euro.
37:03We we we we try to keep 30% margin all the time. So of course sometimes you hire a bit more and so it's a bit lagging so you can you can fall at 25% margin, but then you stop for a bit of and and then you get go back higher and you know the other way is the opposite is is true.
37:20So we we just we just run the business this way and and because we are we are only 12 people but we are very close leadership team and so we always like work hand in hand to say okay if I have to cut some some some hiring in my team I prefer this other team hire more and so basically we work as one team and we try to avoid you know politics and gossip like I want more people, I want more budget.
37:43We just try to be one team and this is this is I think very very important when you are bootstrapped. So basically it's very simple. It's like the most simple thing on earth. Like basically you invest the money that you get. Every month you have more money, every month you invest more. If you have less money you you invest less.
37:58So so so interesting and but the follow-up question was basically can Europe build generational tech companies without VC funding? You guys are a testament to the fact that you can. I wanted to ask like do you think this is for everyone? Like can like are these valuations getting too insane? Like Luke and I saw a great phrase a few weeks back about someone called it basically like suicide rounds. Like you raise so much that you're never able to meet the demands or the expectations of your investors and your board and the company's basically dead from day one.
38:27I think it's it's what I wanted to escape. Before I was in VC backed companies and what happened is that you raise I don't know 50 million, 100 million, basically you have to deploy money. You have to hire very fast. So basically what you do you give hiring targets. So you say as a CMO you need to hire 30 people at the end of the year. As a CRO you need to hire 80 sales at the end of the year. And then what happens is that because trees don't go to the sky, bending spoon is always a winner, you know, because like you grow, you grow, you grow, and then after, you cannot meet the valuation at one point. And then things
38:57change, you know, when and I I think I think it's it's not a bad playbook if you accept to you you cannot make an omelette without scratching eggs, you know? And so it's it's a playbook and you you know the rules, so why not? But there is another playbook and our playbook is like we focus a lot on quality, we hire lesser people, we don't have hiring targets, we hire only the best people.
39:18So potentially if we have a job open for three months, it's fine. It's fine that I know my manager is doing their best and I will never say you're not doing your job right because you didn't hire this guy. I will never do that. I will I will say okay, have you done your best?
39:30Yeah, I trust you. Of course I will challenge and make sure that it's true. But sometimes a a role can take six months to be filled and I prefer that and that we when we find someone it's actually someone very good, very strong. And so we maintain what we call talent density, which is the number one KPI that I'm trying to monitor.
39:48It's very difficult to monitor because it's not a KPI that you find in a bank account or in a spreadsheet. It's something that you feel by working with people. And and so the talent density is like the the number one obsession. How can you keep the the the people like in the team as much as possible like very small, very committed in the job? And it's kind of a flywheel because when you have very smart people, they they they challenge everyone else.
40:10And so very often because we are remote, so people here can work from their home and you could say that it's a lot of trust and so people can, you know, I don't know, like do whatever they want during the day. And very often people say I've never worked as hard as I work at Lemlist. And I say okay, but why? Because we don't ask you to work hard, so why do you work so hard? They say just because I'm I love what we do and I'm in in in in the middle of people who are very passionate and that pushes me to be as good as them, you know? And and this creates this kind of flywheel, but this flywheel can break easily
40:40because when you start to have people who are less good, what you say is that it's okay to be a bit less good than the others. Like it's okay, we accept that as a company. And so people see it and they say, why would I, why would I, would I do 100% all the time if it's, it's okay to be only 80% you know? And so then you break the circle. And so my role is to make sure that we keep the circle because we hire people who want to learn, who want to grow, who thrive and enjoy life this way.
41:05We make sure that we give them a lot of trust and freedom and and to be surrounded and my promise is that they will be surrounded with smart people. And this is, this is my promise. This is the most important thing I need to preserve in the team. And so it's not very, very easy every day but I think it, I think people like it there.
41:20And one thing I'm very proud of is that we, we had our annual employee NPS survey which is anonymous and we had a 9.1 over 10 score and only like two people scored six. And everyone like and the, and the score itself like plus 74% and for me this says a lot because I've never been in a company that had this high score and and VC back I think it's pretty impossible. I think you have this type kind of score when you raise, just raise the around and everyone is so exciting you know? And maybe you have this type of scores but you don't have that in in a very long time.
41:50Yeah yeah yeah. Um can you talk to us about I think you know in 2026 the AI era you know there are a lot of companies building very, very, very quickly, hitting milestones incredibly quickly but yes like you, you feel like it can't necessarily been sustainable.
42:04And you as the CEO you know of Lemlist, I think you're in a very unique position in basically the, you know the, the very broad market in terms of building an incredibly sustainable business. Can you can you explain maybe give some insight into maybe what people should be thinking that you feel like they might not be doing you know in this AI era growing incredibly quickly but maybe not building the most sustainable business possible?
42:31Yeah that's a very good question. I think like what I'm realizing more and more it's like AI is like unlocking so much you know and what I realized that the most important skill that you need to have and no matter what the team is is business acumen. And this is the problem with very deep specialists. When you're a coder and you've been coding for 25 years, Yeah.
42:52if your if your self-value and and you you've been focusing on like coding better and better, uh today is a hard time because like you're seeing that AI can code as good as you. And uh and so it doesn't mean that you're screwed. Um you the it mean that you need to develop new skills, which is understanding what the product is about and and getting more business acumen. And so what I'm seeing is that we are going to have more and more people who have like very deep business acumen that are able to execute much more. And so uh one example is like video making.
43:21Let's say that yesterday to do a video you had to have someone to um take the shots, to do all the mounting, etc. etc.
43:28Today you can do all of that on your own. And so um the the barrier to creation is very low. And so the people who win are the ones who understand uh what people want to consume, what people want to use at the product. And so this is what I call business acumen. And so I think what you need to develop in your team is like making sure that you hire people who can have this business acumen and make sure that they can develop it. And on the meantime make sure that they adopt the new technologies and new tools because it's it's really going to happen that five people team can do what 500 people
43:57could could do before. And and I I really believe in that. I don't believe in one one people company. I I rather believe in like 100 200 people doing like the work of 10,000. Um and and I I think it's really happening. And and the type of profiles will thrive in this environment are different from those who who were using to to be successful before in my opinion.
44:16Yeah yeah. You you you mentioned the the the intersection of like coding and AI and you know what's happened in terms of advancements has has been insane. Uh however I remember my first role was it was a BDR pigment. Um uh so you know close to the French ecosystem. We had Eleanor on the other day uh you know great great interview. But I remember when all these like AI SDRs were coming out, right? It was like 11X, Artisan.
44:37And they never really got going. Like there was a lot of hype around them. And I wanted to ask you like why why do you think uh AI won't replace sales people and why why do you think the AI SDRs never really worked?
44:50Yeah. I think uh AI SDR was uh basically like saying to people like you can be fit but you don't need to do sports.
44:57And and and this is like everybody love this promise. Like if I tell you that, if I tell you you can be rich but you don't need to work. You you every every like dream outcome that doesn't require any effort is like like what people want to buy. The problem is when then you have to deliver. And what happened with is that there was disconnect between the promise and the delivery. And so that creates a lot of disappointment. And so my my belief is that I do outbound mostly. So we we do sales generally speaking but we do outbound.
45:25And outbound is a lot about creativity.
45:26For me it's like ads. So you have ads in the streets but you will notice one ads in 1,000, one ads in 10,000s. But you will only notice some because these ads they are very good. They are great, you know? And and what separates like good from great is what actually brings the most value. And so I think AI will have a lot of trouble to really reproduce that just because AI is the average. So it's it's you can ask AI to suggest 10 different hooks, 10 different titles and maybe in the 10 you will take some part of each each title and we say okay if I
45:56take this and this it's actually very good. But the odds that AI produce like very very good content and very very good hooks and catch alone is very is very unlikely. And so my belief is that this is why we are building to be like human in the loop. And we think that where AI is like amazing is really like to to navigate in very large data sets. And before a rep they had like 500 accounts and they they didn't know all the accounts by heart and they were they didn't have all the information about the accounts. And so what we are
46:24building is really AI will will screen your 500 accounts once a day, twice a day, 10 times a day if you want. And they will check everything happening on these companies like news raising, funding, any information that can be relevant to you.
46:36And it will tell you what to do, what to prioritize. Then it will give you all this intelligence. But as a sales you will still have to think of a unique way to get in touch and to get the attention of the prospect. And building the trust is something that is singular to human. It's only to human to to build trust. And people will always buy to human. They we don't really want to buy from machines. I mean we can buy online and I think there will be some kind of buying process where people buy online a bit like you have PLG, which is like product led growth. There will be I
47:05think AI led growth. So things that you buy through a sales AI sales, but there will still be human sales because people prefer to buy from from another human. And you there is one thing very important is like many companies claim that they close deals with AI only and they're they're missing one part of the picture. It's like yes, they do, but how many deals would they have closed with a human instead of the AI? So the the question is not whether or not AI can close deals. Yes, AI can close deals. The question is what are you
47:32ready to pay for having the customers?
47:35And even in a very very competitive world, the willingness to pay for for customers and revenue is high. And so it's a world where human is making a differentiator. If tomorrow everyone has AI and you are the only one to offer human, you will close more deals because people will prefer to speak with an actual an actual human. And I think having human in the loop will be the differentiators. Then the question is how do you make sure that humans are as much empowered as possible? So they are the best advisor and they are the best sales that they could ever be. And this is what we are building Lemlist for.
48:05And it's like we are at time and we have our next guest coming in, but it's so insane to hear because I remember back in the day at Pigment like they had an insane growth function. It was known throughout France how good the growth team was there and like how much they employed like AI to enable the BDRs. It it was world class for the time, but man, I think I looking back now like these BDRs must be so powerful, bro.
48:23Like they must be they must have like yeah, insane insane tech stack. Um unfortunately yeah, we are we are at time. Charles, I'd love to have you back on. This has been such a fascinating conversation. Um we're we're such huge fans of Lemlist and yeah, keep crushing it.
48:36Yeah, thanks so much. Very honored to be here and uh keep crushing it. You you you're doing a great job too. So thanks so much guys.
48:41appreciate it. Take care of yourself.
48:42Thank you. Have a good day, man.
48:44Uh let me quickly tell you about Valerian. Valerian lets your organization deploy AI. You control your data, your agents, your keys. Stop renting your intelligence. Go and own it. Get your sovereign intelligence from valerian.com. We have John joining us very very soon. Uh John recently published this AI productivity piece. It was in the FT. It went viral on X, and then he gave his own thoughts breaking down like what does he think that the data represents.
49:09We obviously had Steve Ho on the day of that drop to talk a bit more about it, give his thoughts. And then Nick Clegg was actually citing some of the information yesterday in his interview, which is which is really cool to see. So really a huge pleasure to have John in the studio today to break this down for us, and also our first ever correspondent from the Financial Times.
49:29We've had Sky News, we've had The Economist, we've had we've had all of them. We've not had FT. Let's get John in here.
49:34Hello John. How are you sir?
49:36Hey guys, how's it going?
49:37Very well, very well. John, thank you so much for joining us, especially on sort of like relatively short notice as well. I know I pinged you on X, and I know how busy you are, so I really appreciate you you taking the time to chat with us today.
49:49I wanted to start by just asking basically your thread, the data that we were looking at like what what was your take based off the data? Because I felt like it was a slight narrative violation to be quite honest. Would love to hear it from you.
50:03Yeah, I mean look, I sometimes pivot while writing a sentence for this kind of stuff. Like the the data is so it's so ambiguous.
50:12My essentially this piece that I wrote was prompted by seeing I just think some kind exaggerated claims about the extent to which AI is showing up in the productivity data. So there are a couple of charts last week looking at things like the fact that there's been this uptick in productivity in the US, especially in tech over the last few years. Kind of looks like it might be might have coincided with the launch of ChatGPT. The same time there's some analysis from Goldman which was showing that the more the sectors that have
50:41adopted AI more heavily seem to be seeing a decline in employment. And I was a bit skeptical of that for a couple of reasons. So the first thing is when you look at a lot of these charts that show productivity taking off in the US, first of all, they actually start before even ChatGPT came out.
50:57But secondly, I've always been skeptical of this idea that November 2022 firms were suddenly saying, right, we're going to start plugging AI straight into our workflows and making hiring decisions off this. So my initial point is just that if you're looking at a line that slopes upwards in 2022, that is almost certainly not starting because of AI.
51:17And in addition, the interesting thing here is that we see this uptick in productivity in the US, uh tech, finance, professional services, but we don't see that in Europe, even in countries like Sweden where you've actually got quite a mature tech sector.
51:32So it I think the one thing I think I'm probably not saying here, even if it maybe comes out that way, is that AI is not doing anything here.
51:42But I think what I'm trying to say is that first of all, I don't buy that AI is moving these numbers until at the very least the last 12 months or so when you start getting agent tooling agent tools coming online.
51:53And and in addition, my I think my more subtle point is that it's not a simple question of is AI being used in this company. It is what are the norms, cultures, rules, practices in that firm or that sector or that country that interact with AI? So for me, I look at these charts that show maybe something's happening in the US, but even in tech sectors in Europe, we're not seeing the same thing.
52:18And within the US, you see something big in tech, you don't see it in finance, even though they're both using a lot of AI.
52:23And my point is just that to the extent that we are saying AI is starting to show up in the economic data, what we're really seeing is how the combination of AI with how gutsy, how gung-ho the bosses are at these firms, that is what is showing up. So you can have two firms, same sector, but they each have different approaches to how quickly they make that bet, you can do more with less. And that is really it's it's that combination rather than
52:54So going forward, what is the main data point that you're like tracking? Like what what what is that main thing that you're thinking, okay, if this if this happens in the data, um I can then draw like some form of like real conclusion on productivity in AI.
53:11I think first of all it would be to see this happening outside of tech.
53:14So I guess I'm already conceding the point there that maybe we are starting to see the impact of AI in tech.
53:20Um I was actually reading a research note from Oxford Economics this morning which is looking at this in Europe and saying that they're seeing maybe some hint that AI is starting to take jobs there. There was a paper out of Denmark recently. So always love a study out of Denmark because they've got these population data sets where they have literally one data point for every single person.
53:39And they saw that yeah like the the firms in Denmark that have been adopting AI do seem to be hiring slightly fewer young people than the ones who are not adopting AI. But again it's that's a tiny slice of the population. So for me what I would want to see is this showing up elsewhere. Like I was just chatting to a colleague about how in management consultancy where we're all hearing about AI in the UK management consulting firms actually increased graduate intake last year.
54:08And salaries are going up as well. Yeah. Up by about 10 per Yeah up by about 10% over the last over the last year.
54:14And you know we've had this debate back and forth over the last couple of years about if you realize that AI makes your workers way more productive, do you hire fewer or do you hire more?
54:25[clears throat] And certainly it seems like some of the consulting firms are saying instead of saying like right all of our slide monkeys can be [clears throat] automated, [laughter] they're saying you know to use a very harsh Yeah but like let's Well or not or not even that not not let's create more slides but let's actually bring in really really smart people and instead of saying go and make slides, do much more that do do all the extra valuable things you can do with AI. I mean that's what the firms are saying is
54:53that they are rethinking what what a like BCG McKinsey graduate trainee now actually is. And and a lot of firms are doing this as well right? You see in the job descriptions that junior roles that are being hired now, they're asking for people judgment, people with high agency, people who are not just going to come in and be told pull some numbers and put them into a deck or pull some numbers and put them in a spreadsheet.
55:15They want much more rounded um workers. So so there's my point I guess is that there's so much going on and we really don't know yet how firms outside of software are going to respond to this.
55:28So for me the signal that something really unprecedented is happening would be if we start to see downturns in junior hiring outside of tech or even if we actually see a big uptick in hiring outside of tech. Again, AI's impact doesn't have to be negative. So so yeah that it it's that sort of contagion outside of software which for me is when we'll be able to say right something really novel is happening here.
55:51Yeah it's super fascinating. So and in a way then like well two two two questions. The first one would be what what sort of um you know basket of goods in terms of variables do we look at to to to define productivity for a firm? Is it you know output with less employees?
56:07Is it you know hours worked? How do we how do we figure it out?
56:11Yeah I mean that's a massive one right. So um there is [snorts] there's a business school in the US called Wharton and they do this report every year about how different firms are using AI and whether they're seeing a return on investment.
56:23And the latest survey they did this year 40% of tech firms said they were seeing a strongly positive ROI from AI. And you hear that and you think well that's crazy like this is clearly already a big deal. But then we look at what are firms talking about when they say they're seeing a big positive ROI? And one of the examples in fact the most common KPI they're using is is this saving us time?
56:45Now I have a lot of questions there. First of all if it saves you time that's only valuable if you then invest that time into other valuable things.
56:52But there's the additional question of what do you even mean by saving you time? Like you can like I see this in my own work. I can do certain tasks way more quickly than I could two years ago but I'm then often spending more time checking the outputs of those and like do I do I spend that time in like doing two columns a week instead of one for example like or do I spend coming down and talking to you guys?
57:15Maybe that's the the real [laughter] ROI of creating That's that's ROI right there and you know.
57:19No, exactly. But I mean that I think even the like a lot of the punchy numbers we're getting from firms saying that this is making a big difference, there's actually big questions over how they're measuring that. I mean at at the FT's Future of AI Summit yesterday um there was an executive from Meta and he was saying that in their pure sort of engineering data warehousing operation there is no question that AI is improving productivity whereas that's much much less clear across the organisation as a whole. Now it's possible that if someone at Meta had
57:48filled out this Wharton survey about ROI they would have said yes we're seeing seeing strong positive ROI and they wouldn't have cavilled at it by it but only in our data warehousing too.
57:58So I just think there's what I'm not saying is that AI is not having an impact, clearly it is on a micro level in in pockets of certain sectors and firms but when that like to what extent that generates into things that really start moving the bottom line of firms or the aggregate economic statistics is like a completely different question and that is something that may lag by a year but there may be some cases where it just doesn't happen like it changes how we work and we do things certain things quicker but the actual like net revenue impact never really moves that much.
58:27Yeah. What I um what I found most interesting the the the the quote that I found most interesting from uh when you released it was uh was Gavin Baker's uh I'm sure you saw it um saying it's hard for me to look at these charts from the FT especially the first one and not see some evidence of ROI from from from AI um [snorts] and uh you know he he disagreed with your conclusion. I I'd love to I'd love to understand like what was your um what was your first thought when you saw when you saw Gavin Baker
58:55reply like that and say hey look I think I disagree with this this conclusion like um you know do do do you disagree with his conclusion like what's the like where where do you stand on that? I'm very curious.
59:06Yeah. I mean I think one of the the problems of writing threads on X is that you are incentivised to reach a punchy conclusion even when you Like I I did I did include a couple of um like screenshots from my actual article where, you know, I say in the article I'm not saying AI is not showing up in the numbers here somewhere.
59:24just that it's not nearly as clear-cut as some people are saying. So that productivity uptick in US tech is a straight line that starts before ChatGPT comes out.
59:35So what I guess I guess what I'm saying is the the the way you can reconcile what Gavin's saying with what I'm saying is that maybe firms in 2022 tech firms in 2022 were pulling back on hiring because of other things. There was the rate hikes.
59:49Uh there was some people say it was a sort of unwinding of the overhiring boom after after the pandemic hit. There are all sorts of things going on. There's wider uncertainty. Some of that uncertainty is about like what did the AI mean. Um and maybe that has now evolved so that in like Q3 Q4 2026 certainly AI is explicitly part of the calculus that those firms are using when they're making these head count reductions. So my point is not that there's no AI there, but it's more that
1:00:16tech is very punchy when it comes to making bets on what technology and efficiencies can do for their head count. We see that with offshoring. We see that with pulling back on hiring. We see it with layoffs. We see it with all of these things. And we've seen that in 2022 2023 2024 2025 2026. So maybe AI is becoming part of that calculus now. But I I guess what I 'm saying is I sort of think that even if we didn't have AI that line would still be straight. There would still be tech CEOs saying we've we're
1:00:45sure we can get leaner and do things more efficiently.
1:00:47Yeah yeah. We we we're seeing it like it's becoming more and more common in like you referenced some of these like uh like in terms of like a pendulum swinging. We we we noticed like Klarna's um sort of last five years where they were like AI's amazing. Let's lay everyone off. And then they were like okay AI is actually not that good. Let's bring everyone back. And now we're seeing like the market has been responding incredibly positively to, you know, pretty large companies doing like huge layoffs. Their their stock used to bounce 5% in the green uh after these announcements which I always thought was really interesting. Kind of like a message like we are an AI pilled company
1:01:17now, and the market favored that. Do you think we're I don't know. Do you think we're coming into a time now where I can imagine right now if this is the case, I don't think the market would respond as favorably at why do you think sentiment around, you know, basically signaling to the market we are productive and we are AI focused was like a positive thing so early? Because it does seem to be a little bit too soon.
1:01:37I mean, I think at the very beginning people were so buzzed and hyped about these tools, and they were they were seeing all these productivity spurts in their own work that it felt like an unambiguously positive thing to say.
1:01:48Whereas now a lot of firms have see loads of their employees, loads of different teams using AI for about a year or two, and some of those teams have seen great results, and other ones they're looking around and going like, what are those people doing with those tools? Like they're they're making a lot of stuff, but there's some slop involved. So so I think it's it's more that every like so many workers now in in these sectors have seen for themselves how this can make you feel productive without making making you productive. So suddenly firms saying that they're doing loads of this, it almost sounds like feels like you're doing a bit too much. Like there was
1:02:18that interesting line from Goldman the other day, right? That they are starting to ban bankers and traders from using AI tools. And that again for me that has become like the new smart message is we're using AI, but we're being much more deliberate in where we are and aren't using it.
1:02:32That's a really interesting point. Yeah, we we we covered that and well I I kind of didn't know like why why the hell are these guys using it in the first place?
1:02:38[laughter] Like you don't want one of your traders slide decks. Come on. Like you know, they they got to use better Clorox every now and then.
1:02:44traders like vibe coding a to do app for the day is is obviously not necessary or or productive. Do you think that pendulum will swing just quickly before you let you go? Do you think uh you know, a Goldman, a JPM, whatever like that that they'll then the smart message again will be, hey, uh everyone is using AI now. We have figured out the routing problem or we have our own internal model or whatever it is. Do you feel like that pendulum might swing again?
1:03:06I think there's a bit it's a bit of the Gartner hype cycle, right? So we we've gone through the bit where it's like token maxing. Now we're at the rationalization of you guys should be using it at all. You guys may be using it. But I reckon in a couple of years it will be a lot more sensibly embedded.
1:03:20There'll be a lot more decision making about in your role use AI for this and we don't want to use it for that. And that is actually where I think we might see maybe even more productivity tonight. Using AI a bit less and a bit more smartly and that might unlock some.
1:03:32Yeah, really cool. John, we are we are at time. We have our next guest coming on. Thank you so much for making the time to us today. As you know, we're huge fans and we'd love to have you back anytime.
1:03:41We appreciate it. Thanks for your time, mate. Nice one.
1:03:43Um yeah, really interesting conversation. We'd love to run that back. Let me quickly tell you about 11 Labs. AI that communicates at a human level across every channel and modality, deploy conversational agents across every customer interaction and create on brand content at scale. Go to 11labs.io. We have Joelle coming into the studio.
1:04:02[applause and cheering] I appreciate it. Please take a seat.
1:04:14Well, let's get uh I'm wearing one of mine. Can the camera see this? Yeah, it can. I'm getting this one right now. Uh thank you so much for joining us. What do you think about the Arena? First time.
1:04:24Great to be here. This is fun.
1:04:26[laughter] Good setup you guys have.
1:04:28Thank you very much. Um thank you for joining us. Thank you for coming in person as well. Um we have so much to discuss. I mean, you guys are an absolute tear right now.
1:04:36Maybe we just start with I'd love to know Chief AI Officer. We'd love to just know a bit more about your role if you can break it down for us. What are you What What does your day look like on a day-to-day, Joelle?
1:04:45It's a good question, especially like when your whole company is doing AI. Um honestly, I spend a lot of time making sure we have like a really complete strategy around, you know, from the work we're doing in research to modeling to the product, the platform we build, how did we deliver the solutions.
1:05:02Um I came in really from a research background. I spent a number of years in academia, spent eight years at Meta leading fundamental AI research teams and moving into Cohere actually I was really curious to understand what works and what doesn't work in AI. Like there's so much talk about AI, but [clears throat] like getting that signal and in this case Cohere is completely focused on enterprise customers, so getting that signal from paying customers you get to hear what works and what doesn't work.
1:05:27Um it's been super fun. So day-to-day really you know I lead the product team, core product platform. North is an Agentic Foundry and with a strong governance layer. Um and I also lead the delivery teams. So forward deployed engineers, applying machine learning, custom models, custom solutions, going in understanding the pain points, figuring out how do we build the right solutions with the models and and the platform that we have.
1:05:51And I wanted to quickly touch on the strategy um because I imagine the strategy is basically changing pretty much you know every week uh or whatever it is. Like how do you guys as as Cohere as a as a company um are you looking like three months in advance and going let's let's you know run in one direction then regroup and then run in another direction. We had Max at Lagora kind of talk a little bit about how they strategize with how things you know are moving, how fast things are moving and they run on a you know three month cycle. How do Cohere go and do it?
1:06:20It's super interesting. I I came in a bit over a year ago and I think that's definitely you know what it was at the time. Obviously like we've more than doubled in size this year and that means we have I think an opportunity to look a little bit further ahead. We've just announced our E round uh last week. Gives us a bit of a runway. So thank you, thank you.
1:06:43[applause] We love it.
1:06:45That's super fun. Um and so I would say right now we can actually afford to run at a few levels of granularity. Like there's the three month cycle that definitely you know where the teams operate and we have enough visibility especially on the product side of what needs to be done. I would say on the delivery side honestly it's like week to week, what do we need to do, what do we need to do.
1:07:03And company wide we're starting to develop a thesis on like a five year horizon of what we want to be as a company. But you know what are we going to do in terms of product and modeling?
1:07:13That's about on a one year kind of planning cycle. So we operate across this and and as the company matures you know you want to have like more of a longer like it's a privilege to have a longer term view, but you want to keep the agility and the speed. You know, you can't be about that takes like, you know, six months to move your product strategy when suddenly you're getting signals that everyone's going differently.
1:07:34Yeah, it's a huge balance there.
1:07:35Um speaking of signal, the round that you guys raised, it was the largest round ever by a private Canadian company. That is an obvious signal.
1:07:44A clap for that. Another one. You got to do it. You got to do it.
1:07:48An obvious signal of the the strategic value you guys have, the strategic value that you guys can pass on to your customers, but also the strategic value you guys have, you know, for the nation and for for for continents and and and all the all the good work you're doing, especially in a time like today. I'd love to ask like what does that mean in terms of sovereignty? I think it's like an indicator for you guys that, you know, this is a company that needs backing, it needs support. It it's it's incredibly valuable for everyone.
1:08:12How do you rest that on your shoulders?
1:08:14How do you wrestle that with with with, you know, when you guys do what you do and you go out there?
1:08:19It's interesting, right?
1:08:21There's I profoundly believe this company needs to exist.
1:08:25Like, you know, not just for me, not just for investors, like this company needs to exist because we need companies that are building frontier technology that don't necessarily sit in Silicon Valley or in China. We need to have a path to creating this technology in a more global sense. And so, you know, the co-founders of Cohere, Aidan Gomez, our CEO, and Nick and Ivan, co-founders, started this in 2019 with the conviction you could build
1:08:54a competing AI company based in Toronto, which was like took a lot of conviction at the time, straight out of universities. It took some good investors and so on. But through that, they've been able to push over and over again in in putting that trajectory on a on a great path. And and today, you know, I still think more than ever it's important that we have that ability to build the technology, to have different points of views. We have offices in London, Paris as well as like
1:09:21New York, California, Montreal, Toronto, now Berlin coming in as a really important pole for us. Um, the ambition is to build a global AI company. Uh, I think we have a lot of possibility. The fact that we're focused on enterprise gives us really um particular point of view of how we build the models, how we build the platform, how much, you know, observability, trust, controllability is an integral part of the of the approach.
1:09:48Um, and we do a lot of deployment on-premise air-gapped places where actually the hyperscalers aren't deploying today, and there's a lot of demand for that.
1:09:57Yeah, I wanted to Yeah, just right at the start you mentioned, and we've never had an answer like that on the show before, and I thought it was so cool.
1:10:02Uh, you said that that this I fundamentally believe that this company needs to exist. I'd just love to blow that up a little bit more and dig into that. Like what like why strategically for, you know, Toronto or Canada or for any other sovereign lab that, you know, we've talked about Mistral all the time on the show. We were heartbroken when Demis stepped aside with DeepMind and he's doing great work at Isomorphic Labs, obviously. Um, but why do you fundamentally believe this company needs to exist?
1:10:27I mean, I've you know, I've had a chance to work I've I've lived in Montreal for 20 years, but I've worked with people across the globe, first as an academic, then leading the AI research team at Meta, now, you know, as part of Cohere.
1:10:39You just get a different point of view on how to solve problems. Whether it's technology problems, but we're seeing AI is going everywhere. It's completely changing how we solve scientific problems. It's changing education. It's changing the workforce. You need people who have a different perspective on the world and coming to the table and building this technology.
1:10:58Um, it it's been interesting. Really early days, Cohere invested a lot in building multilingual models. There's a whole, you know, direction of work called Aya models. We've got thousands of people around the globe building on this technology, and we had Frontier multilingual technology, which then like we turned into commercial products, landing big contracts in Asia because we had superior capabilities for Korean, for Japanese, Middle East, and the ability to have Arabic language inside the model and so on. And so
1:11:27there's it's something it's a bet that the company decide to make. It paid off in terms of you know fostering more collaboration across the globe, but it also paid out commercially.
1:11:36Um and so it's been fun to figure out these things, right? Like how do we see the world in a way that like lets us talk take on certain problems that others aren't and still push the frontier and challenge the big the big companies.
1:11:48No, that's amazing. Um yeah we we we commend you guys. Um uh you mentioned on premise uh and we we're having a lot of conversations about uh you know where the frontier AI model labs sit. Uh you know what what does that mean? What does the business model look like in 10 years when you know the potential commoditization of these models is uh you know is is kind of biting at their ankles. Um we we I I'm very bullish on on on prem and and and I think um you know a lot of these companies who are operating in regulated industries and
1:12:17all this kind of stuff um you know probably looking at this uh and thinking hey like we want to own this stuff. Like we want to stay sovereign as a you know as a company as well. Um I'd love to understand like what is that demand like for on prem? Like what are the conversations you're having? Um and then following on from that uh where do you think the the AI model labs like sit in this uh kind of dynamic?
1:12:41A lot of the cases um where we've deployed on prem we were working with companies that already had their own infrastructure. Um you know whether it's a bank, a big telco, big energy company, they've already invested in an AI stack.
1:12:55They have some many cases locally deployed hardware, the teams that can do it. Um and and they want to own their technology. They don't want to be in a situation where access to the models is turned off. Uh they want to understand what the technology is and they want to feel like they will always have maintain access to that. And so we deploy models on their hardware. We give them full guarantees in terms of privacy, security. Um many of them already you know you're talking 10 years, but already in many ways like models are
1:13:24getting commoditized. They're swapping models in and out. Our platforms actually model agnostic.
1:13:29That's like a choice we've made early on. We build our own models. We, of course, customize the platform um for our models, but we actually like ingest models every week, the new best open source model. We put them through their paces, you know, like, you know, company drops their weights a week later. I have like a full view in terms of performance. Some of them are external benchmarks, but we've got our own internal benchmarks where we're tracking on a bunch of use cases that matter to enterprises that may not be tracked in like Artificial Analysis Index or or
1:13:58some of these other indexes. Um and that gives us the ability then to, you know, like work with different customers and figure out what's the right solution for them. Many of them also want different models for different workflows. So they'll have some teams where they need frontier model, whether it's for coding, cybersecurity type of capabilities.
1:14:16They've got other teams like if you're just going to process emails and write briefs and so on, there's actually models that are very good, much more efficient, smaller footprint, you lower your cost.
1:14:27And that brings me to the other point, which is a lot of companies are really concerned about their costs. Like, you know, started 2026. Let's go, everyone use the tokens. [laughter] We're closing 2026 and like the bills are coming in and like you're going to have to close your books by end of year and suddenly you're really changing your strategy in terms of like what level of model capability do you want to offer to different teams and for different types of workflows.
1:14:49Yeah, yeah. We we we we been talking about that so much on the show like the the We just had a conversation with uh John about it. Yeah, yeah.
1:14:55Like the token maxing here and all this kind of stuff. Um uh there's there's something you mentioned there that like Luke and I have said recently on the show like our job is to try and keep up with what's going on uh in AI every day and I do think that is a full-time job now. I think the only if you're either unemployed, work in AI, or run a daily live tech news show, that's the only way that you can probably keep up with the pace at which all these model releases are coming out. And we kind of started to think that you know, we're looking at all these benchmark releases so frequently.
1:15:19And I I think people are generally becoming a little bit desensitized a little bit to the pace in which like, you know, something six months ago was incredible and like now it like the pace at which it's accelerating. We we kind of came up with this take in that we're we're maybe sat in like a post-benchmark world and like you keep mentioning customers and uh the different sort of ways in which they can take value from a certain model. And I think that's such an important point because when we look at these benchmarks you know a question that some of the enterprise clients that maybe looking at them are like cool I I
1:15:48don't really care about what the benchmarks say. I care about whether you can turn my $1 into $2 or $3 or help me with a certain problem. I wanted to ask like how how do you guys navigate this like ROI play with these enterprise clients?
1:16:01Because it is a bit of a tricky word and like we're seeing the narrative now get a lot more pronounced than it was previously.
1:16:06Yeah. I mean you know I've spent most of my career as a researcher. So I Yeah. No no no shade on that.
1:16:13[laughter] What are you going to do? Um so I'm still a huge believer in benchmarks but a lot of the benchmarks that we've been paying attention to are getting saturated, are getting benchmarked, are probably not the best indicators especially for enterprises.
1:16:30And so they're they're necessary, they're not sufficient and that's where like we've been we've been building investing a lot in building our own benchmarks. Also environments like you need to be able to run this in simulation. Some cases we have a customer we have essentially like an instance of their environment on which we do testing before we do product releases so that we can really harden to that. Um the the other thing I will say is we've invested a lot in building like an internal analytics platform. To talk to your question about you know ROI, how
1:17:00do we know you know the first thing is to bring in AI into the into particular you know environment. Then you need to track usage. If people aren't using it then you're obviously not going to get to ROI but then usage isn't the same as really bringing value.
1:17:15So we build in a lot of analytics which are again like they can be deployed locally. We don't necessarily have to have access to all that but most customers like want us to see want us to work with them to develop that thesis about where the value is going to come.
1:17:28Yeah. You think there's been a lot of stick on companies kind of testing their own models and creating their own benchmarks and saying hey we've just beaten this, this, this, um, and almost like, you know, marking their own homework, I think is the, it is, you know, is the phrase. Um, do you, uh, do you feel that there there needs to be that third party, uh, kind of model tester, uh, and benchmark creator? Um, and how do we, you know, how how do you feel like that's, you know, going to going to happen? Because, you know, obviously the the these model makers are
1:17:57going to be testing their own and saying it's amazing. Um, but, um, you know, you need to have that third party, I think.
1:18:02Like how how do you feel like that's going to happen?
1:18:04I'm a huge believer that like we all have our own biases, you know, as you're building some tech, like obviously you're going to love the tech you're building. You should, otherwise you should be building something else. Um, but we have biases, we have blind spots. Um, I've spent a large part of my career pushing for open source, open weight models, open source research in general, but then specifically open weight models.
1:18:28Um, spent a lot of energy, you know, just making the case inside Meta to open source the early Llama models as well as many, many others, you know, dozens of libraries, models and so on, exactly for that reason.
1:18:40Because I believe the biggest value was the feedback loop you get from the community when you release a package or a model and within 48 hours you've got millions of people downloading it, trying it out, putting it through its paces. Some of the feedback you're not going to like, Mhm.
1:18:57but that's where you're going to learn the fastest. And so in terms of like quality of the tech, you know, the faster you can get that signal, the faster you're going to improve. Today where I think we most need that signal is in terms of the security aspects of our technology. Like there's a lot that is baked into these models.
1:19:16Um, we talk a lot about like, you know, better alignment in terms of that, but actually like just uncovering the flaws as fast as we can and patching the models as fast as we can is going to be a super important part of, uh, the next, you know, the next few months.
1:19:30Uh, so I'm still a big believer on on using open resources and and Cohere, you know, releases models on a regular basis and the biggest value we get is that feedback from the community.
1:19:42From from from from like your academic background, research background, you know, these insanely well-respected companies. What what what security is such a big topic right now. We cover it as much as we can on the show, but again, it's it's quite hard to keep up.
1:19:54We're seeing Europe had the freezer hack recently, and there was a blood bank hack, and we've obviously seen like OpenAI and Hugging Face and everything that came after that with with rogue agents. What where are we at today? Like where where is there something that keeps you up at night that may you can see happening in the next 3 months? Like Luke and I are sort of firm believers that we will see a lot more of these, especially with the PHP Armageddon day. Like I I think it has to get worse first until it can start getting better potentially, but like what what keeps what keeps the chief AI officer at Cohere up at night?
1:20:21[laughter] Not a lot keeps me up at night. Like the days are full, the days are busy. I need to sleep and then just get up the next morning and keep going.
1:20:30I think about security strategy for for our company, but also, you know, what I often talk about with with folks across the industry in sort of three phases, right? Because we build models, we have a responsibility to think about security from how the model is built from from day one, what's the data that's going in, what's the fine tuning that we're doing, so on so forth. So that's part of the work that we do, and obviously everyone who uses our model hopefully benefits from from that work.
1:20:56The second place we we spend a lot of our efforts on is the harness. So north our platform essentially is a harness. It's a harness for our own models, but it's a harness for third-party models. So we have to make sure that the security of that is very robust. Our employees use it daily, and so there's a lot of work that goes into the security strategy of that platform. It's work that's across our own product teams, but also our own internal security team.
1:21:23And the third side is really the the defensive side, you know, that in the OpenAI Hugging Face incident, that's the piece that I find wasn't discussed very much. And and you know, I can only presume that Hugging Face is quite sophisticated in terms of its own security. And yet and yet agents, you know, were in there operating for a number of weeks before they were detected, before the the access route could be patched.
1:21:47Um, and we're going to see a lot more of that. I I tend to believe that, you know, right now the the um the the powers of AI to increase the surface, the complexity, the volume of attacks is going to grow very quickly over the next few months.
1:22:02And we're going to have to get the defensive side up and ready and there's a ton of organizations which today are not ready for the speed at which they need to uplevel their their defensive security solutions. Um, we are we've just uh I don't know if it crossed your path or not, but we've also announced uh a new partnership with a company called Ale.
1:22:25Based in Prague, uh cyber security company. You should get their CEO or one of their topics that on the show. They are amazing. They have shown the ability with the cyber security harness to actually detect software vulnerabilities in well-established code bases, a bunch of vulnerabilities that like a model like Mythos didn't detect. Um, they're going to be joining Cohere. Our teams are already working together, so we're looking at combining their harness, our models, and really building up some some, you know, world-class um product
1:22:53solutions on the security side because there's a huge need on the enterprise side for this.
1:22:58of work to get done.
1:22:59and we are at time, but I want to ask just one quick one if we can. I'd love to just ask about the Aleph Alpha acquisition you mentioned. The huge European footprint you guys have right now. Um, what why this acquisition? Why was this the right one for Cohere?
1:23:09Yeah. I'm actually really excited to be working with the Aleph Alpha team. Um, they have a really strong technical team, frankly. Like I've spent some time with their modeling team, partly in Heidelberg, partly in Berlin. Really good people. Um, I think they got to a point where they didn't have the resources to continue to the next generation of models, like bringing our resources together. Uh, we have Schwartz Group, which was an early investor uh in Aleph Alpha coming in as an investor in Cohere in this new round that we've
1:23:38announced. So at some point you need to sort of put the investments together to keep on going. And so that's part the story. Part of the story also is Cohere, you know, definitely wanting to build a global company. Europe is an amazing market with a strong appetite for sovereign AI. Having a team that is in Europe, that understands the use cases, the needs, the market, that speaks the language makes it much easier to do that. So I think it's going to be a really good partnership. I've been spending some time in Berlin and I think
1:24:07we'll we'll see good things coming out of this.
1:24:09Awesome. So awesome. Joel, we are at time. Thank you so much for joining us.
1:24:12Really appreciate it.
1:24:15[applause] There we go. Awesome conversation.
1:24:25have Hatem Halal coming into the show any minute now. I think I'm going to quickly tell you about Framer though. Framer is the website builder for creators, teams of businesses, agencies, and humans working in tandem. Agencies been speeding and scaling people been taste judged and under control. Go to framer.com.
1:24:41What an interview. That was really really interesting. I really wanted to ask about the compute stack. We didn't have time. Should have kept it in for 30 minutes. Yeah, we were going to I really wanted to go down the stack and talk about compute and sovereignty and everything else that's going on. But hey ho, we did not talk about that, but we will. One day we'll get them back on.
1:25:02Getting this right, Hatem Halal has just come out of stealth.
1:25:05just come out of stealth.
1:25:07Yes, this was a Yeah, a quick a quick little And what an honor it is to have him here so soon.
1:25:14Here we go. Here we go.
1:25:17Hatem just come out of stealth. Here we go. I was emailing them this morning and then they they just they just got in straight away.
1:25:24Shout out to James over at PostHog for hacking this one up as well. Absolute absolute gangster over there. We love their work.
1:25:32So we're we're getting the drum roll. Let's get him in here. Hello, sir. How are we?
1:25:38Yeah, I'm good. I'm good. Double shout out to to James as well, my favorite SAS action hero.
1:25:45a legend. We love his work. We love posting ability. He's one of the goats of the timeline. Uh, Hatem, thank you so much for joining us. Am I right in thinking you came in out of stealth maybe less than 30 minutes ago?
1:25:56Uh, yeah, we're like I don't know, 13 minutes in, something like that. [laughter] Okay, as exclusive as it gets.
1:26:07Hatem, give us the lowdown. Why are you out of stealth today? What are you out of stealth for? What is Potential Sciences?
1:26:14Yeah, yeah, thanks so much for for having us. Um, so Potential Sciences is a new frontier lab focused on chemistry. Uh, and in many ways, it's kind of the accumulation of various insights from different fields that I've been fortunate to be a part of. Um, I've been an academic physicist working uh, on computational chemistry algorithms. I've been a software engineer, um, a compiler engineer, and most recently an AI researcher.
1:26:40Applying all of that in in kind of one entity to you know, ideally the the biggest outcome we're going after is to uh, make it a lot faster and cheaper to discover new drugs, new materials, and and just keep going where all the phenomena that you know, matter in the world are fundamentally governed by basic physics. And if we build the systems that uh, learn how to navigate
1:27:09the both length scales and um, the the kind of time coupling that you have between electrons interacting with each other all the way up to human biology, Yeah.
1:27:20um, we think we can you know, demonstrably improve outcomes for patients.
1:27:27Yeah, well, it's so nice that you know, we talk about Tech for Good quite a lot on the show, but it's um, you know, this this intersection of biology and chemistry with regards to AI is something that fascinates us, and we're we're looking to speak to the the the pros that are leading the field like yourself. Tell us like um, where are we at today? Uh, like Luke, you know, we've had like Cuspy AI founders on. We've had other people that sit at this intersection broadly from like physics background, chemistry background, biology background, but what where is the frontier of that intersection at today?
1:27:54Yeah, it's a really good question. I think, you know, Cusp is a, you know, team we really admire. Uh they're another, you know, great group of researchers, scientists that are advancing what's possible with AI for materials. Our take is maybe slightly different. We're going really deep on advanced simulation methods.
1:28:12Um for us that means, um it probably won't mean anything to you guys, but uh we've implemented a coupled cluster solver uh that's 100 times cheaper than existing tools, and that allows us to build much larger simulated data sets than have been possible. They're much more diverse. And, you know, chemistry, materials, uh this whole space, you know, no big surprise, it follows similar sort of patterns that we've seen in other domains. If you can build
1:28:40larger data sets that are more varied, um and, you know, with really high quality, uh you can bootstrap much better uh algorithms, systems that learn from those data sets.
1:28:52Um let's double click on the uh on the simulation stuff because uh we've had a bunch of uh founders on some some building in in, you know, the biological chemistry space, but then also some building in the kind of physical AI space uh for robotics and everything else. Um and simulation [snorts] is is becoming a a kind of very quick um yeah, like enabler for uh for um uh just general progress, but also uh cheaper progress. Um I'd love to understand like where is simulation at and what what is it allowing you to do that you couldn't
1:29:24Yeah, so you know, in many ways we're we're part of this long progression that dates back, you know, a whole century of uh you know, developments that you know, actually started in Cambridge where where I met, you know, our favorite SAS action hero James Hawkins. [snorts and laughter] That history is all kind of coupled together.
1:29:42And um the you know, the state of simulation today in particularly at the like electronic structure is the field that that we're building within.
1:29:52Um, is, you know, unfortunately hasn't really adapted to modern hardware. And that's where we've been able to uh find these the largest gains for our simulation methods. Um, you know, beyond that it's uh you know, comparing to experimental observables. So a way to turn these systems into um you know, full end-to-end systems that can predict the outcome of an experiment is a you know,
1:30:21an overarching goal.
1:30:23And there's plenty of evidence across the field of this working. You know, there's a Nobel Prize well over 20 years ago um for a related method called density functional theory um for exactly this uh kind of correspondence with so many different experimental measurements that one can make.
1:30:39Yeah. And when when we extrapolate this further down uh like time horizon, when do we you know, we're seeing uh uh Dario when he's speaking to investors, I'm going to cure all diseases in in the next decade. Uh we saw a little bit of pushback from from some like pharma CEOs saying this isn't realistic. Yes, we are using AI. It's helping across a broad range of means in which we yeah drug discovery, research, analysis. But this is overarching pretty uh that timeline maybe too compressed. Um, I'd love to ask you like how do you see this playing
1:31:09out over the next few years in terms of like commercialization, in terms of um you know, AI being the main driver in which we can accelerate the time to cure certain diseases? Is a you know, a 10-year horizon uh realistic? Do you think we're more in just this discovery kind of phase right now? What what what should take?
1:31:25Well, uh yeah. I I think you know, my prior here is I'm somewhat giving up on trying to predict timelines for anything because [laughter] you know, the the you know, building this company you know, we're at a point where I thought optimistically our simulation methods could be ready in two years. Uh we've got there in just a few months.
1:31:49Um, really just massively accelerated by um both the focus of the team uh but also obviously all the coding agents that will allow us to do so much more with a small team. Translating that to clinical outcomes is a huge challenge and you know part you know part of my career was spent at Recursion Pharmaceuticals and there's many you know sobering walls that one can run into.
1:32:20And I think that's where we want to try to find and I think you know we're not the only ones Anthropic are doing this they they built out their own lab facilities.
1:32:29I don't know if we'll go down that route but we do want to find partners that are you know have that appetite to let's actually move really fast let's set this really ambitious goal of getting you know rare diseases that at the moment aren't at all the focus of pharma companies because you end up with this clustering around modalities or kind of biological mechanisms that are well understood and have a commercial payout on a
1:32:58timeline that's reasonable for the bigger pharma companies and I think that's a real missed opportunity and that's kind of part of my you know broader thesis that there's enough science to go around for everyone so sometimes when I hear the you know more experienced pharma side kind of push back against you know modernizing through AI through
1:33:26advanced simulation methods to me it comes back to why aren't we trying to you know shift the economics at every layer that we possibly can and that's where you know Potential Sciences exists for that there's a number of other exciting companies you know looking much further out like once you have a drug that's ready for clinical trials how do you make those run really efficiently even really boring problems like
1:33:55coordinating with the doctors and getting them to respond to your emails is an important problem that needs to be solved.
1:34:03there's so there's so many things. Just quickly, I think we brushed past the the fact that you guys came out of stealth literally 20 minutes ago.
1:34:11What is you know, why now? Like what what is the plan now you're out of stealth? What does it mean for Potential Sciences now you guys are out in the world?
1:34:20Yeah, I mean we're we're ready to kind of show off this new data modality, this capability that we've built. You know, we're we're measuring a performance improvement that's you know, 100 times cheaper than tools that have existed before. And we're still going. Just in the last few weeks, we found another 3x performance boost across workloads that matter for the simulation tools.
1:34:44There's no reason we can't keep pushing that out, which is really exciting. And so it means that the you know, in recent years there have been you know, large-scale chemical data sets that have been curated both internally and you know, those aren't really known about exactly how much investment has been put into those. But there's one really clear data point from from Meta actually.
1:35:07They released the the Omol data set within last year. And you know, there are some estimates out there that would have cost somewhere between 100 million to to half a billion on cloud compute spend. Now Meta don't doesn't have to pay that because they they own a global data center capacity. But it it sort of makes it very exclusive to play this game.
1:35:31If you make that 100 times cheaper with our simulation methods, suddenly we can create highly curated data sets for very specific chemical chemical space that you know, previously you're kind of you're trying to build a system that learns from fewer data points and kind of hoping for the best.
1:35:53It's a testament to the good work you guys are doing. Hatem, we are we are three minutes over, so we'll have to end it there unfortunately, but congratulations on the launch. We'd love to you back on in the future. There's no doubt you guys will probably Really interesting.
1:36:03announcing another round very soon, given all the amazing results and the productivity you guys are finding. Thank you so much for joining us, especially on this this busy day and this busy moment for you congratulations on everything you've done so far.
1:36:13Yeah. Thanks, guys. It's been a pleasure.
1:36:15Cheers. See you soon.
1:36:15Have a good one, man. Appreciate the time.
1:36:17And boom. Guys, we are off to our We can't tell you. We'll tell you soon, but before I do that, let me quickly tell you about Metaview, AI agents for winning teams, the agent at recruiting platform built for rapid, clear efficient hiring end to end source engage and hire better with agents to truly get your brief. Go to metaview.ai. Guys, see you tomorrow. You won't know where we are, but you will when we go live.
1:36:40Or we'll we'll we'll maybe we'll maybe do a thing. Guys, thank you very much for joining us. And ciao. [music] We love you loads.