Anthropic Raises $30BN at $900BN Price | SpaceX Files S1: How Does it Trade | Cerebras Smashes Day 1

Transcript

As it's becoming painfully clear now, no one in America, other than us here in California, likes the AI trend. We have people who are brilliant scientists who politically are utter morons. And the people who are utter morons at AI but brilliant at politics are going to have us for lunch. Starting off, Andre Karpathy joins Anthropic and Anthropic Eye, a $900 billion valuation for their latest fundraise. Then we dig into the public markets, Datadog up 31%, Figma up 12%. What happens from here? Next, we have Cerebras IPO smashes expectations and breaks the $300 mark. And then finally, SpaceX, they set June the 12th for the largest IPO in history, $1.75 trillion market cap, raising $75 billion. At least when Meta was busy destroying the world, they were smart enough to pretend it was all about bringing friends together and not destroying democracy. We will regret that lack of transparency. We're going to have to reflate and hire thousands and thousands of people per tech leader to avoid social unrest. We see no signs that there's a short-term crash coming. Ready to go? [SPEAKER_02] Boys, it is so good to be back. So we're going to kick off with our This Week in Anthropic, starting as always. We have two. We have Anthropic in talks for $30 billion at above a $900 billion price, nearly tripling from $380 in February. Green Oaks, Sequoia, Altimeter, Dragonair. And then yesterday, we had Andre Karpathy announcing that he was joining Anthropic. So, boys, over to you. How did we read this news? Well, I did divide up the two. The financing, yes, we talked about it last week. There's nothing more to say. They can pick their price. They can pick their investors. They can tell the amount. And they can tell Evan to jump and Evan will say, how high, sir? So it's all happening. They're going to raise $30 billion, we discussed. Obviously, the question is how those folks pencil out the return. [SPEAKER_01] So, Rory, I don't mean to be old school here, but I'm feeling old school. Do you think ARR multiples still matter? I mean, if Anthropic is, if $900 billion is 18 times June revenue, it still feels like a better deal than any of the ones I did last year. [SPEAKER_02] Yeah. I mean, there's no doubt that statement is correct. Agreed. No, I mean, just to put it really simply for listeners is that you're writing checks in the private market for companies of $10 million in revenue. You might be paying 20, 30, 40, 50 times ARR, right? Maybe it's 3, 5X-ing, but it's five years away from an IPO. And here's the last three rounds. I mean, for the last three rounds, really from the 150 billion round at Anthropic all the way on, there have been so post-IPO that you can assume there can be an IPO. So there's no IPO risk. There's no will go away risk. Typically, when those risks don't exist anymore, the only risk you're taking is valuation risk. And the truth is every time the multiple on this has been significantly lower than the multiple on your median series A or B or series C for a higher growth rate. [SPEAKER_03] So it's been the best trade out there. [SPEAKER_03] The meta question is, listen, at some point, everything's DCF, right? At some point, it has to be, I guess. I'm not even sure I believe that anymore, but certainly that's public markets 101. Everything is ultimately the discounted present value of your future cash flows. But every growth, I haven't been a part of any of these Anthropic rounds, unfortunately, but every growth I've been a part of, it's still ARR multiples at the end of the day. No one's really doing discounts for lower gross margins like we did until, say, 2021 or 2022. So is this, I guess the meta question is, is this a fair metric for Anthropic? Its margins are improving, right? And so if 18x really is fair, geez louise, I think everyone desperate to get it is right because it's the best deal going. If an ARR multiple is still fair. [SPEAKER_01] You're asking, I'm sorry, it took me a while. The coffee's gone. By the way, we're doing this early at eight o'clock this morning. So I've been up since five, but the coffee's only kicking in. Yeah, no, I mean, that's a totally separate. I mean, look, if ARR multiples are the right metric, then you should buy the one that's at 18x ARR, growing 10x year on year, that's already so freaking large, it will clearly obviously go public. If ARR multiples are the proxy for value, then this is the best value in the venture universe, which is why I'm going to say very smart capital allocators whose mandate isn't sector specific, but range anywhere, stick your money in. People like Green Oaks, people like Altimeter are doing this deal because they're, yesterday I can do a 20 million ARR deal. Today, I can do a $50 billion ARR deal and the multiple's better. [SPEAKER_03] When it's so obviously a good deal, as we mentioned there, given the trade for investors, why would Dario and Anthropic do it at that price if it is so obviously a good deal? Because you're giving away 30 over 900, which is 3% of your business, to de-risk it for another year of monstrous burn, where you're committing to, I don't know, six, five gigawatts this year. And the mental rule of thumb is the total cost of gigawatt of high-end compute is 40 or 50 billion. So now you're not spending 40 or 50 billion, you're persuading hyperscalers to spend on your behalf. But you have to have, I mean, this is a big balance sheet war. So it's a no brainer to do it. They're going to raise and they're going to raise again, and then they're going to raise again. Do you think they'll raise again before they go public? [SPEAKER_03] I doubt it. It just depends on their trajectory now, because they're saying they're going public in November. But my point is, even after, by the way, the other comment is, when you stop having to raise, that's a disaster. Because it means that you're, why are you raising? You're raising for CapEx and you're raising for growth. If once you become a, once that hyper-growth stops, you don't have a CapEx need, you also don't have a growth story. And that'll be a very different place to be. I mean, right now, you know, right now, this is the highest ROI on equity dollars. So that's why they're getting it. So they should just keep raising it well in advance of the need, because the needs are so great. I know it sounds silly, and maybe it's my, my actually read is that Sam has been pushing the [SPEAKER_03] That's a disaster. Because it means that you're raising for CapEx and you're raising for growth. If you, once you become a, once that hyper-growth stops, you don't have a CapEx need, you also don't have a growth story. And that'll be a very different place to be. [SPEAKER_01] Right now, this is the highest ROI on equity dollars. So that's why they're getting it. So they should just keep raising it well in advance of the need, because the needs are so great. My read is that Sam has been pushing the valuation to the absolute max since he could on the thesis that he needed infinite capital. He's always been clear on that. So the last OpenAI round was more expensive than almost the contemporaneous Anthropic round, even though Anthropic appeared to be outaccelerating them because Sam just pushed it to the max, which you can if you're a great salesman and have demand of one more dollar than supply. It seemed to me Dario is the opposite. He actually does own shares in his company rather than indirectly through a VC fund, but it's pretty diluted. He's giving away 90% to charity. So he just wants to get a deal done in a week that is fair. He does this deal at 380. It seems fair. And all of a sudden he turns around, Sam's done a deal at twice the price. So he does this at 900. I think when Anthropic's worth two to three billion, he'll do around it like one six and 48 hours to get it done. He'll just do it. He won't push it to the max like Sam does and create stress. But I actually think these rounds, ironically, the last two intentionally traded at a discount in order to not rip people off and get it done low drama in days. I actually think that was the trade-off. [SPEAKER_03] We've all worked with founders like this that enjoy maximizing every penny from the round and others who wanted a 70% deal. And they truly, it's not just in the email. They truly want it done in a week. That's not just a game to get the money. They just like, give me a 70% deal in 72 hours. Yeah. It's a super point, Jason, because I'm remembering now the details. The Anthropic round is we're going to raise 30. It's going to be cash. You're going to send me an email confirming you're in, and then we'll collect the money. End of conversation. The OpenAI round is, well, Amazon, you're going to give us 50 billion, but 20 billion is going to be up front. The other 30 billion is contingent on us going public or AGI. And Masa, you're going to give us 40 billion from SoftBank, but you've got to borrow 30 billion to get that 40 billion. So we're going to give you a little time to pay that money. So we're closing on 110 billion, of which 20 billion is clearing now, 30 billion in six months' time, depending on the lending market. It's like, Jesus, give me a break. You're right, Jason. I think philosophically, the Anthropic team seems to operate on the way if I want to raise 30 billion, I should probably get a check for 30 billion and call it a day. Speaking of getting a check for 30 billion, Jason, I really wanted your thoughts on this one. Benioff was on All In, and he said that Salesforce spent 300 million on Anthropic tokens this year, almost entirely coding. The question I have for you is, when you look at your usage and how you use it today, is that about right and what you would have thought? Is that way more? Is that way less? And how do you think that will change for Salesforce over time? [SPEAKER_02] It's actually not that much per engineer. This is great. Mark's one of the great classic marketers, probably the greatest marketer in classic B2B of all time. He's just a force of nature on all vectors. Company, physical size, gravitas. But if it's, I think that works out to about 15 to 20,000 per engineer per year. Yes. It's not enough. That's, I think that's just table stakes today. What's his fully burdened cost for a developer at Salesforce? Probably 500K for an engineer for all in all costs with their share of the building and snacks. So 20 grand a year is 4% additional. Cheap, man. [SPEAKER_03] Good. First of all, I did the math on this one, because I actually think this is the most important question of the Anthropic discussion. This is the one. And actually, I'm going to give you an A, Jason, for math on the fly, which is, I think, very hard to do. I couldn't have done it on the fly. I did it this morning. This is astonishing, first of all. So the numbers are Salesforce spends 5.8 billion a year on engineers. It's roughly 4% of the spend. If you want it per head, they have 20K developers out of their total 83K heads. So it's 15K per head per year, which is 1.2K per head per month. 1,200 per month. I actually did a survey. One of my colleagues is going to publish it. We did a survey on 40 portfolio companies and external companies. What are you spending per year or per month per developer? And the average was 1.2, 1.3K, and the median was lower. So obviously, you have some token maxing and then wider dispersion. So first of all, you're exactly right. It's in the strike zone of normal. It's not, I mean, it's only a big number because they obviously have so many developers. That's the first thing. So your rough estimate, Matt's exactly right. And then the question is, what does all this mean? Where is it going? And everyone says, actually, first question is, before that, it is still astonishing. And one of the reasons that Anthropic and OpenAI are just amazing businesses, 90% of the stuff you sell to Salesforce as a vendor, if you were selling them an ERP system, obviously they have the CRM system. [SPEAKER_01] My guess is if they bought SAP, God forbid, would they spend 5 million, 10 million? This is the only product that a company like, this is probably the only vendor line item other than maybe rent that comes anywhere close to this amount. So from nothing two years ago, [SPEAKER_03] What does all this mean, right? Where is it going, right? And everyone says, [SPEAKER_03] actually, first question is, before that, it is still astonishing. And one of the reasons that Entropic and OpenAI are just amazing businesses, 90% of the stuff you sell to Salesforce as a vendor, if you were selling them an ERP system, obviously they have the CRM system. [SPEAKER_01] My guess is if they bought SAP, God forbid, right? Would they spend 5 million, 10 million? This is the only product that a company like, this is probably the only vendor line item other than maybe rent that comes anywhere close to this amount, right? So from nothing two years ago, this is the larger single external spend that every software company is making. That's the first big aha, right? Yeah. And it's both nothing and it explains Anthropic's mediocre rise. It explains everything. It's both at the same time, right? [SPEAKER_01] And then you've got to say to yourself, because remember, I kind of said it when it comes to valuation on Anthropic, is it good or not? When you try and figure out how much money these companies can make, what you figure out is trying to come up with some kind of heuristic relative to R&D spend is the key, right? In other words, how much of every knowledge worker wage and how much of every coding wage is going to get translated into tokens, right? And we did a rough and tough estimate and we're finding it more is that if you start thinking about a trillion dollars worth of token revenue across Anthropic and OpenAI, which is the four-year projections are saying, and they better get it because otherwise that CapEx is going to look pretty sick, right? If they're going to get a trillion dollars, right? My rough math says it's something roughly like five or seven percent of every knowledge worker salary and 20 percent of every engineering salary. So they're currently, so if that math is correct, that's what it takes to get a trillion, right? So in other words, Salesforce might only be a quarter of the way there. Now, one of two things is going to happen. Either they stay at 300 million, in which case, the TAM for some of these token businesses like OpenAI and Anthropic will have been overestimated and there'll be a real correction. Or they keep going, they 4X their token spend from here and in two years' time, Benny Offset is saying we spend a trillion dollars, sorry, a billion dollars on tokens. And we'll talk about the people consequences for that in a second. But one of those two things has to happen. Because even on the macro level, right, worldwide software business across everyone is about $1.2 trillion. R&D spend is roughly 20%, $240 billion, right? The interesting thing is, if you get 20% of that, you want to get $50 billion, right? So to justify these Anthropic valuations and these OpenAI valuations, you're really going to have to eat a ton of what is otherwise OPEX. You've got to replace 20% of R&D salaries. So, out of those valuations, are wrong, or Benny Offset is only a quarter of the way on the journey and he's probably ahead of most. The numbers for OpenAI and Anthropic are so large that you really have to start thinking about what percent of the total wage bill of engineering in the software development market do you get? And if you're not tracking to 20% across most R&D spends, then the three and four year projections for some of these companies will be a bit lofty. At a meta level, you have to be a bull, right? Because the trend has just begun. Mark's 300 million is just the start of what he's going to spend. On the other hand, I do think, I hate to use myself as an N equals one case, but it's SaaS for itself. Amelia and I have, now we have 21 agents of which three are autonomous, okay? [SPEAKER_03] And the direct token costs that we spend, the direct AI altogether for both of us is about two grand a month. So, and that's going to go up, but the bear case, the bear case is the models will get better and they will get more efficient and we will get more efficient. The bear case is 1K for each of us. And listen, this doesn't include third-party apps. It doesn't include tokens we buy inside a Salesforce. So it's higher. But if you think about it, there is a bear case there that everybody is using, every knowledge worker has this attached, but the numbers Mark is throwing out is about right for folks not at the bleeding edge of token maxing. This is the bear case. It's not today when SAP and Uber CIOs say we're out of tokens for the year, but I do think we're ahead of most, right? At our little team. And we're only spending 2K a month in direct token costs. That's a bear case on the next Anthropic round. I think I'll give you another example. We had Sastra annuals last week, Rory, Rory was a celebrity, Harry, we could talk about it. He was literally mobbed. You saw the pictures, but our very last speaker, it was kind of him to come because it was the last one. People are tired. It was Andrew Bilecki, who's the co-founder and CEO of Klaviyo. Very interesting because he's a true engineer and turned B2B founder. He requires every single employee at Klaviyo, if they're anywhere close to product, to be committing code. Anyone in product, anyone in design, anyone there. And every single person has to be running AI or agents to do their job. I couldn't believe it was 100%, right? And they built their own custom framework to require it. And he went through it all. It was very cool. And so my point is he knows his stuff, right? And we built this AIVP marketing, AIVP customer assist. Everyone thinks it costs like $8,000, $10,000 to run these autonomous humans. I go backstage with Andrew, we're talking about it on my phone. He's like, how much do you think it costs to run an AIVP marketing? Because he's done it. He's like, maybe $250 for both of them. The answer is $257, just to run the agents. And his point was at the end is a lot of this stuff is not as expensive as we think. We do not need to worry about token maxing at Klaviyo. And everything we're doing is agentic. We have our own agentic framework. The most junior product person, every single person has to be doing this. We have to manage it. And they have a harness that manages the model and gets it thoughtful. But he's like, if you do this right, it's not as expensive. And the fact that he guessed it within a couple, I mean, he was the only person that got it right because he's doing it. The only one that got this number right because he's doing it. And so I'm not bearish, but this is the bear case. It's just we need a half or a third or a quarter as many tokens as we think we do outside of the folks running massive workflows 24/7, right? framework. The most junior product person, every single person has to be doing this. We have to manage it. And they have a harness that manages the model and gets it thoughtful. But he's like, if you do this right, it's not as expensive. And the fact that he guessed it within a couple, I mean, he was the only person that got it right because he's doing it. The only one that got this number right because he's doing it. And so I'm not bearish, but this is the bear case. It's just we need a half or a third or a quarter as many tokens as we think we do outside of the folks running massive workflows 48-14, right? [SPEAKER_02] At 1% of R&D spend, it's lost in the noise. At 5%, it's real. That's a layoff, right? At 20%, which let me repeat, is what it takes to get to for these overall models to work, right? For these overall TAM analysis to work. That's huge. It's one-fifth of your payroll costs in engineering. [SPEAKER_01] Jason, every public company CEO wants your advice on agents and AI. [SPEAKER_01] Yeah. [SPEAKER_01] Are you more bullish on Klaviyo post seeing the inner workings of Andrew? And is he a top 1% public company CEO on AI? I am. It's a good question, right? The one thing I've been thinking a lot recently, when we kind of bounced off the lowest of the Sasspocalypse, right? You think about Atlassian, Figma, a few others that have seen, at the end of the day, compared to their highs, very, very modest bounces off the hard deck. But more importantly, growth is re-accelerating there. That's the most important. So when you see Figma re-accelerate to almost 50% growth, when you see Atlassian seemingly struggling when Mike was on the show, re-accelerate north of 30, the meta question, and with Atlassian, it's definitely from Rovio, their agent. With Figma, it's a mix, right? But when you see these, when you see Twilio come back from the dead to 20% growth, you have to ask yourself, is there a little more time than we thought? A little more time, right? The whole world is not in San Francisco of all the buyers, of all the users. So this is the, this is the, it's both the question for Andrew and for Mark Benioff and others, these founder-led companies that are iconic with great CEOs. At the end of the day, maybe they have enough time, maybe another year, if they're just getting going on their gentric journey. And sales sources further along, I am not sure that means their stock will re-accelerate until it is proven. [SPEAKER_02] I think that's what we learned from last quarter. Monday, Monday did sort of beat expectations and bounced. HubSpot said Q2 is going to be tougher and it got hit hard. So you got to show me the growth, right? That's the mantra. But I am somewhat more bullish than 90 days ago that there's just time. Klaviyo is arguably the single most beaten down public company software stock because of the Delta from Shopify. Like it's trading at three something times revenue and Shopify is at what? 12 or 14. I got to look it up. So if I were ahead, if we were a long, short team, I might propose that one on Monday. But you got to show the growth, man, you got to show, and they're not, and even though he's ahead of the internal agent, he's not, they're not way ahead of the game for the external one. And that's the bear case, right? What if, if your competitors are there, why aren't you there today? Why don't you have, this is the, so yes, I'm optimistic, but my flip side is you've had 18 months and you've had since December, since the Claude fours to destroy your space. Why do you let these dumb little startups out, out, out hustle you? You've got 2000 engineers spending $300 million a year. That's the bull case. You've had time. But I'm getting more optimistic that if the leaders build the best agents in the space, 2027 could be good for them. I'm getting more optimistic and I was pretty bearish a couple of months ago. I am in the same place. And I made some comment about that and, you know, positive reinforcement from Datadog and Figma and everyone's like, but they'll never get back to 21 prices again. And I commented on that because of course they won't, right? You never, I mean, as I said, I can never, I said in my comments, they'll never get back to 21 prices and I'll never be 21 again. Yeah. I like that. There's nothing you can do. Every tech cycle has a set of industries that for once in their life, get value on prospects and futures. It's like being 21. It literally is like being 21 and people will believe everything about you. Five years ago, that was SaaS. Today it's AI. Once you lose that veneer, you are going to be valued for the rest of your life on some variety of revenue, revenue growth and cashflow. Right. And what that means is you're highly, it's almost impossible to ever get back to 50 times ARR again. Right. All these companies, exactly. And everyone goes, it's the Figma thing. It's so annoying for them. I feel so bad for everyone's over, your stock's down 80%. Yes. From the idiot price that idiot people price to that. Right. In terms of objective performance, which is how you got to measure these companies, you're right, Jason. Somebody's like Figma's re-accelerate, Datadog's doing really well. And you know, you're going to be in a bound from, I mean, the outer edge is probably Datadog at 17 or 18 times sales. You know, your good performance Figma, six to 10 times sales. And your crap is three times. So to me, it's, yeah, you have time to become a good normal company. I mean, the big comment is the SaaS businesses are amazing, but the AI businesses are an order of magnitude of maybe two order of magnitudes larger and are at, you know, earlier in their growth life cycle. So you're never going to get the attention back on you again. That's the deal. That's the deal for sales. But you can still be worth $10 billion and, you know, as a company, be doing a billion in revenue and growing nicely. Just to provide context, Datadog had their first billion dollar revenue quarter, 32% up, all-time high, error across 4 billion. This was a great quarter. Oli and team crushed it. So to the point, it's now more realistically priced from its exuberant pricing. Is that the summary? Yes, the summary. Exactly. And in that context, it's worth trying. I mean, the difference between being in the shitter and not getting out and being in the penalty box and then getting out is quite sales. But you can still be worth $10 billion and, as a company, be doing a billion in revenue and growing nicely. Just to provide context, Datadog had their first billion dollar revenue quarter, 32% up, all-time high, error across 4 billion. This was a great quarter. Oli and team crushed it. So to the point, it's now more realistically priced from its exuberant pricing. Is that the summary? Yes, the summary. Exactly. And in that context, it's worth trying. The difference between being in the shitter and not getting out and being in the penalty box and then getting out is quite significant. You got to like where you are, as Jason said. If your team's at last thing, you got to like where you are a lot. If you're Datadog or Figma, you got to be pretty depressed about where you are if you're Wix, given you did the buyback and it hasn't worked. So there's plenty of paper here. We're going to discuss what I just want to cover Figma first. [SPEAKER_03] So Jason, you're always rather opinionated on Figma. Accelerating for the second straight quarter, NDR 139%, two-year high. This was a great quarter results. I sold all of mine at the end of last year. [SPEAKER_03] Well, you're still ahead. That was the right time to sell, to Rory's point. I'll tell you what I got wrong on Figma for sure. I got to come up with something assonance with the L, right? A limited lempkin or something like that. [SPEAKER_03] Lose or lempkin. Lose or lempkin. I like limited. Can we go with limited? Can we be a little kinder? Limited lempkin. Limited lempkin. I was completely right that make is the worst vibe coding product I've used since I've been on this journey. And I'm right that it was not important to the senior management. And I'm right that they left 500 million or more on the table by not building a repleter level. I'm a hundred percent right. And I think it's the tragedy of folks being slow. [SPEAKER_03] However, limited lempkin. I missed the captain obvious point. Figma is a building software. So everyone that is in the business of really helping, there is an AI explosion, but part of the AI explosion is a software explosion. And you can see it in companies that Harry and I have invested on like WorkOS and RevenueCap that have exploded because there's a software explosion going on. And even though Figma lost the vibe coding race so far, it is one, it is a beneficiary of the software explosion. One, right? Two and two, it has internal AI tools like Andrew from Clayville was talking about. So one, it's selling credits to make your product a little better. That almost sounds cynical, right? But what it's really rolling out now is the ability to internally vibe improvements to your Figma designs. Like the agent can look at your Figma design. It actually officially rolled out. I think today it's been in beta for a while, but it rolled out while we record this. And instead of just designing something, it can say, Hey, let's update the workflow in here. Let's update the journey. This is not incredibly difficult, but it is difficult that Figma scale. So even if they're not going to help you vibe products, the fact that they are making the building of software more efficient for their audience, it's like Atlassian, not adding massive new customers because of AI, but adding massive more value for their base. So I got, they're a little slow to that. It's in beta today. It's getting to be summer, but it looks pretty good. And I utterly limited Lemkin missed. Anyone like Figma should be modestly accelerating today because we're building more crap. Their new ability to agentically improve design likely will be a big deal for their customers. They likely can get another 50% or more of revenue out of their base. The question is to the extent that folks who would have been using Figma are now doing mock-ups for software products using Lovable, which you hear a lot about, which is using it as a way to describe your product rather than doing a Figma. That's actually a work stream that you would want to own if you're Figma, because what you don't want to have is people going around your product flow. Right? So I do think you're right, Jason. I think it's not just the extra 500 million. It's I'm willing to, they probably have an imperative to make sure that their customer doesn't leak out to a design flow. That's do your actual design and something like Lovable where you have a working prototype, not just a Figma design. I think so. That one for the moment appeared to be more of a Twitter mania overstated, the design capabilities in Lovable, which is a little bit ahead of rep, but they're pretty limited for anything that's professional grade. Like for a Figma person, they're still pretty early. What Figma missed is I create this design. It's beautiful. I loop in the product team to approve it. And then I click a button, which says push into full production prototype. And it just works. And the irony is Replit and Lovable both have that as a native insertion point for a reason. Like if you use these products today, they have it right in the prompt, upload a Figma design because they know this is our number one ICP wants to take that static design and put it into production. Why Figma doesn't have that natively is a loss of $500 million and going up. Totally is on the flip side of these two great quarters and kind of exciting, happy news, weeks down 45% since the stock repurchase. Rory, you mentioned it and touched on it. They're now a $2.2 billion market cap base 44 announced last night, actually, that they hit 150 million of ARR. [SPEAKER_01] That's because the core business isn't growing. The pre AI business is no longer growing, right? Maybe it's not. I think it says the pre AI business is terminal. That's what the public markets are saying. Right. And they don't think that the AI play is enough to rescue it from terminology, right? You've got the 150 from base 44 is very impressive, right? But it's substitution revenue at a high level, isn't it? Because it hasn't materially grown the AR, the revenue. It's substitution. [SPEAKER_01] If you would assume then that it's a terminal business in terms of the core business that's 150 million of ARR. [SPEAKER_01] That's because the core business isn't growing. The pre AI business is no longer growing, right? [SPEAKER_01] Maybe it's not. I think it says the pre AI business is terminal. That's what the public markets are saying. Right. And they don't think that the AI play is enough to rescue it from terminology, right? You've got the 150 from base 44 is very impressive, right? But it's substitution revenue at a high level, isn't it? Because it hasn't materially grown the AR, the revenue. It's substitution. [SPEAKER_01] If you would assume then that it's a terminal business in terms of the core business that's existing for getting base 44, surely you would then ascribe the same to a Squarespace, which I think it's terminal as well. I think Wix and Squarespace, one thing people forget, this is at the, if you look, it's true. Not only are they being terminated by two vectors. One is obvious. One is less obvious. The obvious one, what, but is more true than people think is it's better. In many cases, it's already better to code your own website because you get what you want. And they already have templates and they already have integrations. Not for folks that are truly tech fearful. They should still use Squarespace and Wix. They're great products, but they're so limited and you can build something in a coded platform so nicely in 10 minutes. Anyone that's not tech phobic should use these products. The other thing that we forget is that Wix and Squarespace for the last five years, they were low end Shopify competitors. That's where their growth was from merchant services, payments, e-commerce. And there was a whole world four or five years ago where you had WooCommerce from WordPress, you had Wix, you had Squarespace, and you had BigCommerce who all were viable competitors to Shopify. The other thing happened, Shopify destroyed them all. There's no reason to use, this is another category where the low end was destroyed by Shopify who amazingly went up market and down market successfully at the same time. And there's just, it's not worth it. You can't save enough money to not use Shopify for your store. So the folks that are trying to save $14 a month have evaporated for the low end of the market. They don't need these sub Shopifys and BigCommerce, even though it's not low end, it got destroyed too, right? The most visceral competitor, the just dead, it's dead in the water. So they got hit both ways. It's too bad. It's too bad currents hitting them. [SPEAKER_01] As you broadly agree. I mean, I think BigCommerce right in the strikes on a Shopify. I don't know the Wix mix between think of it as information only sites versus e-com sites, but you're right, Jason, it really matters. And if it is high on e-com sites, then you have that vector to think about. [SPEAKER_01] And it was all the growth. It was all the growth. [SPEAKER_01] Got it. [SPEAKER_01] It was all the growth. [SPEAKER_01] Interesting. Because the core, I would say this for the core, a lot of those businesses have to be customer, it's super low end SMB, especially for the non-e-com sites. It has to, if your core acquisition engine works, you should have been able to, I mean, it is still possible that if you can convert most of your customers to the new product, then over a couple of years, you can make the math work, right? If you are a Wix, at least they have a new product, they did do the acquisition, right? It is possible to get this weird compounding because when the new product is a hundred million and it's doubling and the existing product is a couple of billion and it's flat for the first year or so it's really hard to move the overall aggregate gap revenue growth rate. But if you can compound quickly enough on the new product, it does move it up, right? So that's on the revenue side. I want to come back to, I want to separate the stock buyback from that, right? That's on the revenue side, but separate comment on the stock buyback. That sucks because it's the classic investor banker thing of, oh, if you buy back the stock at four times, it's cheaper than it's ever been and that'll be good for the stock. And it sounds like it makes sense. But when things are going wrong, things can go lower than you ever think. And sometimes it pays to keep the money in your back pocket because the stock will go even lower, right? And I think that's a strategy that didn't work right now, right? You took on a bunch of capital, you bought the stock back and you didn't, by definition, if the stock is 45% down since that moment, that buyback strategy didn't work. And I'm always, frankly, it's better to have bought it back cheap than bought it back at even the crazy high prices that some people are doing stock buybacks in the past. But when your business is in trouble, things that are bad can get worse. And the actual ability to have another billion dollars on your balance sheet to maybe make an even bigger acquisition, in my view, is worth more than trying to juice the stock for the short term. So I think they look back on that stock buyback and go, that wasn't the best move to make. We optimize for the short-term value of the stock, not the long-term destiny of the business. [SPEAKER_01] The flip side is Mark Benioff said they did a buyback. What did he borrow? 20 billion or something to do it, right? Not even at the lowest interest rates, but he said, I did it to offset Slack and Tableau. I did it to offset the dilution. I got it back, right? My theory— [SPEAKER_01] What does that mean? What does that mean? [SPEAKER_01] I'm on boards where people pitch, bankers pitch to do a buyback to offset stock-based comp, and I literally want to bludgeon them to debt, right? Well, listen— Buying stock at high prices is stupid. Buying stock at low prices is clever. End of analysis. I think a lot of these deals, and even Salesforce, maybe, it's really just to hold off shareholder activists because that's their first play. That's their first play. So when you are down in the dumps, what you got to, and Rory, you've been on boards of this. You've watched it. To the extent you can, you want to placate the shareholder activists without giving them what they want. And the simplest thing you can do is use all your cash to buy back shares because that's their play. So if you take them out of the game, you've given them what they've asked for, Buying stock at high prices is stupid. Buying stock at low prices is clever. End of analysis. I think a lot of these deals, and even Salesforce, maybe, it's really just to hold off shareholder activists because that's their first play. That's their first play. So when you are down in the dumps, what you got to, and Rory, you've been on boards of this. You've watched it. To the extent you can, you want to placate the shareholder activists without giving them what they want. And the simplest thing you can do is use all your cash to buy back shares because that's their play. So if you take them out of the game, you've given them what they've asked for, and they don't really have a play if they buy you, especially if you're also doing layoffs. So if you're doing layoffs and you're doing the buybacks, maybe you keep Starboard and Friends away because their playbook has already been used up by the management team. [SPEAKER_03] Agreed. That is actually the thing. And look, if there's nowhere better you can put the money and the stock is cheap, then it pays to buy it back. And I do get the comment that you're always afraid of management with big amounts of cash that they'll waste it on a bad acquisition. On the other hand, in these times of change, hyper change, you probably have two choices as a SaaS company. You want to decide, I am the old thing and the old thing is good enough. I'm going to optimize for 30% operating margins and 10% growth. And I'm an economic machine. It is what it is. And if I have excess capital, I should buy the stock back, give it back, do whatever. Right. Or you say to yourself, I might have to do something more than that. I don't know what it is, but at least for the next 12 months, I'd like the option value of knowing if I want to do, [SPEAKER_02] what was it, a base 44 or whatever it is, acquisition, I have the money. Right. So, but I agree, Jason, cynical comment. You're right. People do it because it's one of the least disruptive activist moves that you can do. And normally you get brownie points for it. But the odd thing is if you do a buyback of the stock to appease the beast, and then the stock goes down 40%, they won't remember that they wanted you to do a buyback. They'll just say you're an idiot for doing it. In the end, you're paid to be right. And when you buy and then it goes down 45%, unfortunately, you can't say to yourself, you were right. Today, they're trading at one X revenue, one X literally. Yeah. That's the terminal, simplifying the terminal state. They also announced two years ago, they were shipping a Glean competitor and going all in, but I'm not even sure it exists. In a year's time, will they be higher than they are today or lower than they are today? I'd say higher just because, I mean, again, I don't know if they took on that, but I just think at one X revenues for any, unless you, I would like to look at their churn numbers. I haven't spent enough time. Unless the revenue is absolutely evaporating, you can get from one X revenues, especially if you had the wit and the intelligence, which they did to buy a kind of replica competitors. So this is the thing. Most mature software companies that aren't growing can easily operate at 20% operating margin. So you're now down to saying you've got your cash and do you think you can last four or five years before you go to zero? I mean, you can calculate the terminal value here, right? At one X revenues, you are nearing terminal value, right? For a company, for a product that has high gross margins and is relatively sticky. So yes, I think you can create more value. You will regret deeply buying a whole bunch of shares at three times revenues or two and a half times revenues thinking it couldn't get any worse. But yes, fatal, fatal next sentence, maybe now it can't get any worse. And if it's a 0.5 X a year from now, are the revenues have gone down by 50%, then you can call me an idiot then, Harry, which I know you're dying to do. No, no, it can't get any worse. I'll go and buy a load of Wix and then remind you of it every week. Remember, can't get worse is not the same thing as it will get a lot better. I mean, the question, a totally separate, I think Jason's right about the upside in these stories. Again, it goes back to the same thing. Your range of outcomes has compressed markedly. It's not clear to me. If someone said, what would you do to get a company, let's not pick on Square, but to make any of these things get to 30% growth and be worth 5X revenues, I'm not sure I have a single idea. I think Jason's right. You're dealing with managing, you know, as they used to say about the British empire, Harry, you're managing decline. It's okay. It's history. You wouldn't understand. I do think one of the downbeaten that we think is truly downbeaten, public software companies in the next year will become upbeat. And what I mean is, as slow as they've been to react to AI changes, they have the installed base. And so someone will get their met, someone that is still founder-led, it won't be anybody that isn't founder-led. One of these founder-led guys will put his best 50 folks in a room and say, listen, I don't even need you guys to innovate. I just need you to build a better version of, especially prosumer AI app. I just need you to build a better version, stay out of it and ship it. And we're going to sell it the hell out of their base. Arguably, that's what Canva is trying to do with 2.0. It's complicated. The startups are moving faster. The models are moving, but someone's going to pull this off with their best 50 people because they have 300,000 customers. They have 300. So for every time I'm pitching these AISDRs and I'm looking at HubSpot with 300,000, I'm like, hurry up, Breeze, because you got 300,000 HubSpot customers just waiting to buy an AISDR from you. And if HubSpot could actually make this as good as a startup, they're going to sell 150,000 Breeze AISDRs. It just isn't in market today. So I just think there's so many challenges it's hard to predict, but someone's going to, you're going to turn around and you're going to be like, holy cow, Drew pulled it off. Drew went from 0% growth. He got his last 50, got last 50 soldiers holding back the castle, put them together and holy cow, he built this thing. And, but I don't know that we can predict who it is. On the flip side of challenge, we have Nebius growing 684%, accelerating faster than ever. My question is, is it justified? Is this absolutely the sign of just compute starvation and a buy, I just think there's so many challenges it's hard to predict, but someone's going to turn around and you're going to be like, holy cow, Drew pulled it off. Drew went from 0% growth. He got his last 50 soldiers holding back the castle, put them together and holy cow, he built this thing. But I don't know that we can predict who it is. On the flip side of challenge, we have Nebius growing 684%, accelerating faster than ever. My question is, is it justified? Is this absolutely the sign of just compute starvation and a buy, or is this bluntly further signs of a bubble and concerns that this is over market exuberance? It's a mini core weave and those have been great businesses because right now everyone's compute starved. And let me make the captain obvious answer as Jason would say, if compute continues to be starved, then they will continue to be good businesses. And if they don't, if compute becomes plentiful, they will be commodity businesses and the guys who are over-leveled will go bust. So it's just that simple. Now, I actually think Gavin Baker had a very articulate comment that ironically, the slowness of permitting and the inability to bring on data centers at near the speed that people want to bring them on might save us all from ourselves. If all the data centers people want to build could be built. And then at the same time, we do the Entropic and OpenAI math that we just discussed. And that trillion dollars of token revenue turns into half a trillion dollars. [SPEAKER_03] Then you got a trillion dollars of CapEx and a half a trillion dollars of revenue and you're fucked. Right. But if on the other hand, the half a trillion dollars of revenue stays, but the inertia of building data centers means you only get half of them built, then you're saved by the bureaucratic inertia of the great American state. Right. And you only build half a billion dollars. Compute remains relatively scarce and people like Nebius and Corby who have that compute do really well. Does Benihoff spend grow faster or slower than data center capacity? That's it in a nutshell. With OpenAI and Entropic in the middle, collecting the money from the first and giving it to the second. That is the bet. And I don't have a brilliant opinion on that, but that's the action on the table, as they say at the craps game. I was driving back. We had a little Napa retreat break after Sastra A this year and the Tesla took us the long way through the South Bay, which I haven't done in a while, rather than the bridge. And I'm passing Marvell Semiconductor, SanDisk, all these folks, all these superstars of the 90s. They're on fire today. Okay. The only thing that isn't on fire today is traditional software. Every other category, optical connects, everything. The old South Bay where Harry's probably never been, he probably has never been south of Mountain View or Palo Alto. He's like, why would you go there? There's trillions down there, man. Look at the skyscrapers. Okay. And I was thinking that the only thing that isn't inflating today is old school software. Everything else is on fire. So my point on Nebius is, and Rory made this point, listen, there's an argument to short it. There's an argument that there is just surplus. There's not enough capacity in the market, but how far in the future can you short these things? Sure you can short SanDisk and memory and we've passed Micron on the drive. You can make fun of Micron, right? Micron's had more booms and busts than a California prospector from the 19th century, but you can't short three years into the future effectively. Certainly I don't have the skills to do so. So we can take potshots at Nebius and CoreWeave and friends, but what's the point? We see no signs that there's a short-term crash coming and it's interesting, but anything but traditional software, it's just on fire, right? Every single, Cisco, Cisco's back. I should have mentioned Cisco coming up South first or Zenker. Every technology company except traditional software is on fire. Again, going back to the big simplistic picture here, all these companies are on fire because the hyperscalers and the model companies have decided to spend roughly three quarters to a trillion dollars a year building stuff. And 50% of that goes to Nvidia. 10% of that goes to power. 10% of that goes to network. And you're right. Everyone just gets pulled along on the bubble. Everyone, right? One of two things has to happen. Either corporate America has to digest a trillion dollars worth of tokens without any intermediate software layer. And I think it can do some, but I don't think it can do all. Or second, software has to start working because only if software starts working, does corporate America get to spend that kind of money. And if they don't, if SaaS doesn't grow, let me put it bluntly. If SaaS doesn't grow, then at some point, OpenAI and Tropic will stop growing because their customers today are primarily software companies for coding, right? And selling through software companies to corporate America to use tokens for business purpose, right? So in a weird way, at some point, this all has to level out. I just think when we started this show, I think CoreWeave had just IPO'd or was about to IPO. And it was easy to mock CoreWeave. It's like, okay, well, this is just round trip revenue to create a little supplemental capacity that we won't need in a year, right? Fast forward a year. We need every, every, every, everything possible. So I do think at some point, SanDisk and Nebius and CoreWeave all have to crash and Marvell and even Broadcom. At some point they have to crash at some level because they always do. I think AI can grow infinite. We all approach the singularity, but eventually capacity will catch up. Things will catch up. I just don't know what's going to be near enough to the present that it matters. But this was the first. I don't know if you followed Leo Aschenbrunner, who's the famous one. He doesn't have to worry about 10 years out, does he? He'll just trade in and out of it. But if you saw his latest releases on his latest filings, he put puts across everything. The guy for the first time added very little and actually showed his first real signs of concern. He's smarter than me. He's making the opposite point I'm making. grow infinite. We all approach the singularity, but eventually capacity will catch up. Things will catch up. I just don't know what's going to be near enough to the present that it matters at some level that it matters, right? But this was the first, I don't know if you followed Leo Aschenbrunner, who's the famous, he doesn't have to worry about 10 years out, does he? He'll just trade in and out of it. But if you saw his latest releases on his latest filings, he put puts across everything. The guy for the first time added very little and actually showed his first real signs of concern. He's smarter than me. He's making the opposite point I'm making that it's, this future is coming much sooner than I think it is. The tough one is, [SPEAKER_02] would you invest in a CoreWeave or Nebius at the seed level today? That's the tougher event. This is still 20 VC, right? It's as a public investor, you can say, Hey, Sandisk looks pretty good for the rest of the year, right? As a startup investor, would you do one of these deals? I'll answer that. I saw a really excellent one with a superb team, a very good seed investor. I'm not going to name it. And I really consider it long and hard. It was still a seed round. We tend to be a investors. He was really talented team. I didn't do the seed, but when I, I always try and give a good answer to people when I turn it down, especially when I think they're A-class teams, because I say, Hey, look, here's my thinking, because hopefully they'll remember my thinking. And if they, if they prove me wrong and they come back for the A and I will admit when I wrote out my thinking on why I'm not doing this. And he responded, I thought he won the argument. So I'm actually sitting here going, Rory, was I an idiot? Because he had a compelling at the margin story around capacity that I thought was interesting. So I literally ran, I did answer the question, Jason, logically I chickened out. I didn't want to be that marginal capacity three years into the deal, three years into the CapEx boom. But there's a little part of me thinking, Rory, that might be a dumb decision. That was a clever story with a clever team. And you're relying on the capital markets being there for the next three years and being able to access them. The sobering numbers is half a billion to a billion dollars to build the capacity. Right. But maybe it could have worked. So I get the temptation, right? I literally had that. This was last week. Yeah. [SPEAKER_02] Rory, do you always give detailed explanations to founders? I remember Jason once saying to me actually about founders will always argue back and actually it's easier to be like, Hey, keep it more vanilla. Yeah. I think it depends honestly, because you can't do it to everyone. Right. So I think to some extent it depends on how much time [SPEAKER_01] you spent with them. Right. Depends on two things, right? How much time you spent with them. If you've taken one meeting and you're a no, just give a clear no. I mean, maybe minor feedback, you know, you can't write a long email, right? If you've taken two or three meetings and you felt you almost there. And sometimes I like to do it because I think it's helpful for your own self. Some CEOs don't respond well to detailed feedback and they are. Some of them are really professional about it and I like them. I'm like, yeah, I see what you're saying. If I'm right and you're wrong, I'll be back in 12 months and I'll say to you, I told you so and you'll pay three times as much. And I'm like, and I'll be glad to. Right. I think in the end, I think in the end, even if you don't share it all the time for any deal, you spend a lot of time with, this is a separate comment. For any deal you spend a lot of time with, it's actually very helpful to write out your conclusions and keep them internally. I do that, right? Because then you can test your thinking and you look back and you look back to yourself and go, my God, I turned down that for that reason. I was an idiot. Or I nearly did that deal and I was totally wrong on the market. It's a lot of, remember, in a model that only gets trained in eight or 10 year increments based on the two deals you do a year, you get a lot of additional feedback from the 20 or 30 deals you nearly did that you just don't want to lose. So I do try and write it out for myself. And then sometimes I share it with the team, especially if I think it might be of interest. Yeah. I think that is a good point. I did say that to Harry years ago. I stand by it. If you've had between zero and one meetings with the founder, there's no upside in providing feedback. It's just endless, wait, Jason, that's wrong. You misunderstand. It's, if you're, if you've gone deep on a deal, right. You should share the real reasons why it's generally appreciated. If nothing else, if they haven't already closed around, it's helpful to them to see the other side after two to three deals, but it's got to be at least two. You have to have gone deep enough to actually be able to write that email. It can't be because I don't see it. Just don't. Then you just got to be a one line. Right. I think I know the deal that Rory is talking about. But we shall move on. I want to talk about Cerebris, the biggest U.S. tech IPO since Snowflake, priced at one 85, which was a big expansion from where it started. I believe it was one 10, one 20 in the early days, which went to one 50 and then one 85. It popped 68% on day one. It was a fantastic IPO, an amazing story. Does this open the window for many more companies of that size and not the $2 trillion companies, but does this open the window for many more companies to go out and IPO? I think it's good for a SpaceX. I think it's good for anyone above their level. I think it's great. It's great. It just shows anything that is that or better. And at better in air quotes, the demand is infinite. I'm not sure if this is really going to help folks that are below that level that we don't know. Right. I doubt it. Even you're looking at Figma and you're like, I don't think anything sub Figma can IPO and have a decent IPO. This is the new grade better [SPEAKER_01] $2 trillion companies, but does this open the window for many more companies to go out and IPO? [SPEAKER_01] I think it's good for SpaceX. I think it's good for anyone above their level. I think it's great. It's great. It just shows anything that is that or better. And at better in air quotes, the demand is infinite. I'm not sure if this is really going to help folks that are below that level that we don't know. Right. I doubt it. Even you're looking at Figma and you're like, I don't think anything sub Figma can IPO and have a decent IPO. This is the new grade better than Figma BTF. Now Cerebris arguably is a different category, but if you look at the backlog of 24 billion and you're Pollyanna about it, right? That's more back. What's Figma's backlog? I don't think it's 24 billion. Right. So I'm oversimplifying it, but I think it's got to be better than Figma. And if you're better than Cerebris, then you know, this is a good time to IPO. This is very much an N of one bet. It's an extraordinarily complex technological product that they've brought to fruition just at the time when demand for that product has exploded. And unlike when they pulled an IPO two years ago, they were able to line up arguably the marquee customer for that product, OpenAI. So it's a semiconductor, it's a hot, they're a semiconductor company. Inference is hot, they're an inference company. OpenAI is hot, they're selling to OpenAI, right? It's an N of one positioning. And for a market that's starved of ways to bet on OpenAI and Anthropic, this, you know, they really only have things like CoreWeave and obviously you have Nvidia. This was a chance to play. So yeah, I'm not surprised it went with, if you remember last week, you asked, is it going to go really well? And it was, we recorded before the IPO and we appeared after the app. And I was like, of course, it's going to go really well? They've already raised the range. They're not idiots. And it went exactly like that. They went to the, they went beyond even the range. They went to the max they could do without refiling. [SPEAKER_01] It was an obvious winner category. And worth pointing out how fickle the world is. Two years ago, they couldn't get this deal done. So I think you're right, Jason, actually. It is at the margin. It's a positive tell for SpaceX. People are willing into, you know, people are very much risk on for the kind of things that look like they have the kind of upside. [SPEAKER_01] Roy, would you add it to a public book at 300? [SPEAKER_01] Probably not. I go back to the base rate. Yeah, the base rate return on IPOs, not from the day of the, not from the day of pricing, but from the first day's closing price, which is typically way above it. The base rate return on that is negative. One, six months, 12 months, one year, two years, right? Is that, in other words, across a thousand or so of them, if you buy on the pop, you know, you tend to not be a happy camper, right? Is it a company at the right price you believe can be a long-term enduring company? Absolutely. Yes. It's got technological differentiation like no one else, right? So just blindly buying the day every out of retail idiots on the planet is buying is probably not the best way to make money, just statistically. And base rates matter. [SPEAKER_01] Totally agree. We said it's good for SpaceX and SpaceX sets June 12th for the largest IPO in history. It was suspected 1.75 trillion valuation, $75 billion raise. My word, this would be epic. It will. That's one word for it. And you know, again, back in— Is that, how does this go? I don't know. I think it's funny. We're recording this the day they're due to file the S1, but I haven't seen it. I checked before I came on. The interesting thing with the S1 is in one sense, you really want to read it. In the other weird sense, there's actually going to be very little in it that actually matters at the margin. What do I mean by that? The S1 will tell us, and I'm really curious to read it because it got to the SEC really quickly. The S1 will tell us everything about SpaceX as it existed in December of this year, which was without X.ai, without the Cursor deal, without the Anthropic deal. And because if you think about it, the most recent, I don't, I presume their calendar year end is December. So they'll have last year, which is SpaceX and Starlink standalone. You know, the leaked figures are 15 to 18 billion in revenue, 20 to 30% growth rate, EBITDA positive. Would like to see the CapEx before I comment, but pretty much a bounded, understood company, right? In February of this year, they closed on X.ai, which, you know, brought them a pitiful amount of revenue and a burn as big as Croesus. You know what I mean, right? And then in, so that's going to be prorated into the S1 for maybe one quarter, right? So that's all, you literally have half a quarter's information on something that's kind of taken you from a profitable company to a loss-making company. Then the other two big deals, the Anthropic deal won't even be in the financials because it's a signed deal. And then the Cursor acquisition won't even be in the financials because it's not closed yet. So you're literally going to be reading this S1 going, and no forward projections are allowed in an S1, right? You're going to read this thing that says, here's the company we used to own on December 31st of last year. Pretty nice company it was too, dude, right? However, we've since got AI pilled and now it's totally different. By the way, we can't tell you much about that. You'll have to talk to our bankers, right? It's going to be the funniest S1 ever in one respect is that, you know, revenue, you know, 50%, 30, 40% of the revenue isn't in the S1. All the loss isn't in the S1 except for half a quarter. Yeah, some of the bankers are going to be having to tell the story via the roadshow. So in one sense, I'm looking forward to reading the S1. In the other sense, there's just a lot to come. So that's the first comment is the storytelling around these acquisitions are not going to be in the S1, and it's just going to be interesting how they get that across. There are other markets and other times where people will look back and go, you must have been mad to buy the stock on that little information. So I think it'll, again, the probabilities it gets done extraordinarily well, [SPEAKER_01] for half a quarter. Yeah, some of the bankers are going to be having to tell the story via the roadshow. [SPEAKER_01] So in one sense, I'm looking forward to reading the S1. In the other sense, there's just a lot to come. [SPEAKER_01] So that's the first comment is the storytelling around these acquisitions are not going to be in the S1, and it's just going to be interesting how they get that across. There are other markets and other times where people will look back and go, you must have been mad to buy the stock on that little information. So I think it'll, again, the probabilities it gets done extraordinarily well, and the excitement is amazing because the market is in the mood for excitement. We're selling the most exciting company on the planet at a time when the market wants excitement. If the market ever wakes up and says it wants cash flow, it's going to be a totally different story. [SPEAKER_02] Right now we're into excitement. June 12th, this goes out. It's Elon. It's Elon the pump machine. Does this have the mother of all pops? With retail getting behind Elon in a way that we haven't seen before. Got to do better than GameStop. No. Yeah. I think there's a reason it's 30% retail. I think some of it is being Robin Hood and Democratic, right? He's selling nothing, 30% to retail. [SPEAKER_01] But I just think the Robin Hooders and the GameStoppers have got to be more excited about rockets than plushy toys at GameStop. To me, it's more exciting. I agree. I think everyone will want to own some of this, which means retail will buy a lot of this. You're exactly right. I'm going to put $2,000 on my iPhone into this thing, right? And the reason I said no is because, remember, GameStop, again, I'll go back to numbers. GameStop, I think, pops 10, 30, yeah, 20X from low to high just based on retail. When you start at $1.7 trillion and the largest market cap company on the planet is $5.5 trillion, NVIDIA, it's going to be hard to 10X from here, right? [SPEAKER_02] Are you sure? [SPEAKER_01] That's what I meant. But you're right. The excitement on retail will make this a super interesting story. And then the other thing is, as you know, literally, Rory, I'm completely ignorant. Obviously, it's going to be a huge float, right? Mathematically. Could the GameStoppers and the Robin Hoods, I'm admitting my ignorance, if they could believe it, go 10X. They're not doing any DCF analysis. They're trading. Is it possible for them to trade enough shares to create a 10X pop? Is it mathematically possible to influence the float that way? Because sometimes it's a thin float when you're able to manipulate it, right? [SPEAKER_02] The float isn't that small. It's $75 billion. I think the interesting thing is if it's already healthily priced at 100 times revenues, it will be interesting to see what happens. I mean, when these things, and Harry, you can go on a comment at this point, when institutions play shares, sorry, when an IPO gets, when institutions take shares in an IPO, they have a price target, right? And if that price target gets achieved on the first day, you tend to see additional trading. I mean, it would be the 70% of, if BlackRock spends $10 billion on buying in the IPO, as has been mooted, but again, I have no clue about the facts, right? They run an internal analysis and they say, we think we should buy 10 billion because we think over the next 12 months, we can make 40% on our money. And if at the end of the first day, it's up 40%, it'll be sorely tempting to have another $10 billion come back to market because you'll be looking at your price target and going, I have a price target. I've achieved it. Time to go, right? And you see that phenomenon when IPO pops, the institutions. And I used to think, oh my God, they're disloyal. They'll leave. But in fact, it's just we bought, we wanted to be a holder, but we had a price target and you've achieved it. So it will be interesting to see that price actually, if it does in fact do a GameStop-y type of price. [SPEAKER_01] You could also have the Facebook effect where the IPO was frankly a dismal failure. It hung around its price for a day or two and then look it up in 2012 and then it dropped at $1.40, 50% below its IPO price. It was a horrible IPO, right? And obviously an amazing company, which can also happen. Price matters. I think it's going to be wild. I genuinely hope it succeeds because I think the damper effect of it not succeeding would, and trading well would be pretty profound. [SPEAKER_01] I think it'll trade up to 5 trillion. I'll take this bet, but I think there will be enough sitting in Brickell in Miami, day traders, yahoos that love the brand. Folks hate the brand. That's why he lost the trial in Oakland. I think they hate the brand too, but enough folks love the brand that it can float up three to five X based on partially influenced the float. There's not enough. There isn't enough demand. I'm this could be limited Lemkin speaking, but I'm going to take this bet that it's going to trade up three X in 2026, just based on GameStoppers driving it up. I want me to, I think it's going to go to 3 trillion. [SPEAKER_01] I don't discount the fact that it goes down. [SPEAKER_01] I don't discount the fact. I didn't say it's likely. I'm just pointing out here. You're paying a hundred times. Where's my Robinhood account? [SPEAKER_01] You boomer. You boomer. [SPEAKER_01] I am a boomer. [SPEAKER_01] Fucking boomer. [SPEAKER_01] Yeah. [SPEAKER_01] 5 trillion through each and every, I think it's going to go down. [SPEAKER_01] I didn't say, hang on. I didn't say it will go down, Harry. You got to be able to live in probability. [SPEAKER_01] Did I tell you when I got into Bitcoin? [SPEAKER_01] Yeah. [SPEAKER_01] I've made billions on my Bitcoin. This is going higher than Bitcoin. [SPEAKER_01] Okay. Good for you. [SPEAKER_01] You do realize that space is bigger than Bitcoin, right? The entire universe, there's a trillion stars just in our own galaxy. And there's a trillion galaxies that is larger than all the Bitcoins out there. You have this completely wrong. Did I tell you when I got into Bitcoin? Did I tell you guys when I got into Bitcoin? Okay. Thank you. I mean, okay. I'm just trying to be serious. That's an instant pass on a founder and a pitch telling you when they got into Bitcoin. [SPEAKER_01] Did I tell you when I got into Bitcoin? [SPEAKER_01] Yeah. [SPEAKER_01] I've made billions on my Bitcoin. This is going higher than Bitcoin. [SPEAKER_01] Okay. Good for you. You do realize that space is bigger than Bitcoin, right? The entire universe, there's a trillion stars just in our own galaxy. And there's a trillion galaxies that is larger than all [SPEAKER_03] the Bitcoins out there. You have this completely wrong. Did I tell you when I got into Bitcoin? [SPEAKER_03] Did I tell you guys when I got into Bitcoin? [SPEAKER_03] Okay. Thank you. I mean, okay. I'm just trying to be serious. [SPEAKER_03] That's an instant pass on a founder and a pitch telling you when they got into Bitcoin. That's my flip side of too much feedback after zero. If in the first 20 seconds, they tell you about when they got into Bitcoin, tell them to stay in Bitcoin. I mean, the reason I made that comment is, and I know it sounds like, again, I go back to Facebook. I remember the IPO. It was the defining company of its generation. It was far more attractively priced than here. It was profitable, right? But they pushed the limit on price. And they just hit that point where the initial trades went the other way. There was a little worry about mobile, right? They hadn't managed a mobile transition. And it really traded down over the next six months, right? So I'm just simply saying, again, it's back to my account. When everyone thinks something is guaranteed, that's just when it blows up in your face. Do I think it's the likely outcome? No. It's probably two-thirds positive. And of that, at least 30% of it is adjacent outcome, which is it pops amazingly because of retail. But again, I go back to its fundamentals. It's trading at 100 times revenues. They've effectively decided to be a Nebius, not an Anthropic, by virtue of selling their computer to Anthropic. So that whole, the AI story ain't there. So it's Starlink and Starlink. It's Starlink as the growth engine with core we've attached. It's been a while since we had a bet, Rory. This is great. Jason's five. I'm three and you're negative. [SPEAKER_03] No, yeah. Okay. I mean, there's probably some kind of spread betting I can take on that, which is, let me think about it. I'm comfortable in saying it'll be below. Okay. I'll tell you what. I'll take, I'm comfortable below three. I'll totally take that bet. [SPEAKER_03] The price is right bet. [SPEAKER_03] I mean, you're basically, you guys, you said three. Jason said five. I do not think, let me, yeah. At the end of a month, I do not think this company will be valued at $3 trillion or more. [SPEAKER_03] Oh no, neither do I. No, no. This is a meme and this is a casino. We're seeing the casinoization of public markets. This will go fast to three and it'll come fast back down. [SPEAKER_03] I don't do casino betting, but thank you. But duly noted that over the, okay. [SPEAKER_03] What are you doing in venture and AI then? [SPEAKER_03] If you, yes. Okay. Keep rolling. Keep rolling. [SPEAKER_03] Okay. Keep rolling. News last night. Mic drop moment with Y Combinator. And I do think it's actually important. Sam Altman just offered $2 million in OpenAI tokens to every YC startup in the current batch in exchange for equity. It reminded me of Yuri Milner and DST doing the exact same with the very early YC batches. What do we think about this? And does that impact the valuations that we ultimately get it at if they can get $2 million in OpenAI tokens from Sam? [SPEAKER_03] Sam Altman. First of all, it's smart. I think that it's back to, you have let Anthropic steal a march on you, more than a march, many marches, on people, on mindshare, on respect, and you got to do all you can to earn it back. And that's just one more thing, developer hearts and minds. Smart. Second is, I'm assuming it's not transferable. Because if it's transferable, then it's money. Because let's be real, compute is money, right? But so I'm sure they've thought of that. So it's not transferable. So yeah, I mean, look, so to your comment on does it impact pricing, maybe at the margin. But if you're a compute intensive, it does. But probably if you're compute intensive, you're raising $200 million anyway, right? For the most, I mean, if I think of the last YC batch and I sat to it, most of them are building software on top of AI, but where agentic spend would be, token intensity would be 10% of revenue. So it's valuable, but it's not going to replace the need for humans. You're still going to need four or five humans to build the code to build the agent for call centers or whatever. So you're still going to need revenue. At the margin, it takes a little bit of the edge off, but it's not like any of them can build the next generation, whatever with it. It's nice at the margin. I think it'll increase the valuations for sure. A little bit. Yeah. Because if nothing else, even if you don't view it as inflationary, they have 2 million of tokens now. That's a real investment. We all can use the tokens. So that is 2 million of de-risking that investment, 2 million more that they can use to add value to the deal. There's plenty of YC companies that don't raise 2 million at demo day, right? So now they've raised another, now they've radically de-risked these investments. It would make sense that typical post might go up to 60. There's some correlation I'm not smart enough to do. And it may stop at higher since they're investing at a hundred. It's hard to predict. We can come in, Harry, if you do the deal a month before demo day, it's 20. If you do it the week before it's 40. If you do it after, you're at the OpenAI price, it's a hundred. You can, but you are welcome to come in at the OpenAI price and it's not even a premium. Okay. [SPEAKER_03] We'll do it because we love the pod. We'll let you, Harry and Jason all in at, and no premium, just at the, no, no, no, no, nothing. Just at a hundred. [SPEAKER_03] You're right, Jason. If you navigate on optics, it probably causes an anchoring effect. I got 2 million at a hundred. Why would I take another four at 50? [SPEAKER_03] It may shrink the size of the rounds too. It may make it even harder on VCs to invest in YC rounds because they've, you know, the average ownership for VC rounds has already been sliced. You can, but you are welcome to come in at the open AI price and it's not even a premium. Okay. [SPEAKER_03] We'll do it because we love the pod. We'll let you, Harry and Jason all in at, and no premium, just at a hundred. [SPEAKER_03] You're right, Jason. If you navigate on optics, it probably causes an anchoring effect. I got 2 million at a hundred. Why would I take another four at 50? [SPEAKER_03] It may shrink the size of the rounds too. It may make it even harder on VCs to invest in YC rounds because the average ownership for VC rounds has already been sliced to like five or 6% at YC. This could slice it to two or three just because you don't need as much capital. That might even be the bigger impact potentially. In fact, yeah. Depending on how much of your—remember at scale, if you're successful, any software company can use up 2 million tokens without blinking. The question is how. The interesting question is how much leverage in that. I'd love to know in the first 12 months of the typical YC company's life, how much of their spend is either tokens to serve customers, tokens to build product and engineering spend that can now be replaced by tokens. It all goes back to that 20% number. Can you replace—because out of the gate, you're probably not selling so much that you're reselling, that you're using those tokens to serve customers. Most of what you're probably doing with those tokens is building your product. So if you can replace— Maybe. What if you're building a Lagora or a Replit? You could burn through all those tokens in 12 months. Yes. Serving customers. But if you are, can I make a comment? If you are, given that token intensity for a Harvey or a Lago is probably 20% in terms of revenue, that probably means, so to burn through 2 million, you're going to be at 10 million in ARR. If you are 10 million in ARR, in today's world, you're going to raise at 500 million anyway. [SPEAKER_03] Well, hold on. I love that. I don't think that's the early stage math. The early stage math might be token spend is marketing spend. So I'm going to give away $20,000 to $30,000 a month of video creation, of audio creation, of my Suno competitor, of my Replit competitor. Now I can give away $50,000 a month of tokens my first 12 months, where it would have been stressful before this deal. [SPEAKER_03] You're exactly right. I was mentally putting in two categories, which was token spend for engineering and token spend for full price customers. You're exactly right. The minute you sell it, I agree with you. What you'll now do is everyone will have destructive free token programs because you want to try them out. There'll be a bunch of freemium products. [SPEAKER_03] You're exactly right. That's how it manifests. [SPEAKER_03] And if Sam increases it to four, eight, or 10, then think about how much that could change the game. If as a startup, you get 10 million tokens to build another Legora or Replit for your first year, then you're just back to the wall because you don't have to worry about anything except shipping the best Opus 5.7 codex product if you can, because there's no issue the first year. It's all about product because for so many of the startups we invest in now, tokens are marketing. Their tokens are marketing because poor Michael Cannon Brooks, he's built an iconic company, but he can't afford to spend the number of tokens a startup can per customer. Two twos just could just be the start. I just think this is already disruptive to 200 startups and it could—why couldn't it go up? [SPEAKER_03] Well, it can. If you have spare capacity, it's also very telling. It says at the margin, if you're tapped out on capacity, that's two times 150. For Anthropic, if they really are capacity constrained, that's 150, that's 300 million you're giving up every three months. That's 1.2 billion a year. If you say four YC batches, 1.2 billion a year at 18 times valuation is about 20, 30 billion dollar hit to valuation. That's real money. But if you, on the other hand, you have spare compute, then it sleeves off your vest. So to some extent— [SPEAKER_03] Yeah, but if you believe in the open YC model, I mean, the YC model, worst case, you're going to hold it at, like once cash is less of an issue, you're going to at least be able to hold these investments at 1x. It's not going to cost you anything because if the average, if allegedly the average batch does 3x to 4x, but you're paying a hundred million, then at least I don't have to mark it down from my balance sheet. You're wrong on that part, respectfully. Up until then, you were more right than me on that. You're wrong because if you have, open AI's investments will be valued at 1x and no one will give them any credit. But if to make that investment, they gave up on revenue from selling to Bank of America, those tokens— [SPEAKER_02] Of course, you're right on that. It only works if the tokens are surplus or leftover or something like that. And therefore, my conclusion is open AI has surplus tokens and Anthropic does not. I mean, I think that's a good conclusion, right? I think it's also a bet, but it's also a thoughtful bet, right? It's a smart way to use them. It beats the alternatives. Yes. It's a smart way to use them. [SPEAKER_02] Okay. What else, Harry? I just want to hear before we do rage bait. But real Jason, Rory is a celebrity at Zesta. They loved him. Don't understate it—L O V E D. He was just eight, 10 rows standing room only deep to hear from this guy. They love him. It's all right. Did he get selfies? Okay. He did the one on stage with me. He wasn't that into the selfies, but yeah, he was mobbed. I hate this. Keep going. Yeah, no, it's okay. Do we want to do that? In all seriousness, I do think it's a reminder that there's a large subset of Rory super fans, right? They like the thoughtful deep dives. Rory's got a few skills. Harry and I are self-aware. We're not claiming we're something we're not. Rory has a set of insights and skills that I'm very self-aware that I would say to the LP listening, at least justify a six X fund. I would say at a minimum, at least justify premium carry. wasn't that into the selfies, but yeah, he was mocked. I hate this shit. Keep going. Oh yeah. No, it's okay. Do we want to do that? In all seriousness, I do think it's a reminder that there's a large threat of Rory super fans, right? They like the thoughtful deep dives. Rory's got a few skills. Harry and I are self-aware. We're not claiming we're something we're not. Rory has a set of insights and skills that I'm very self-aware that I would say to the LP listening, at least justify a six X fund. I would say at a minimum, at least justify premium carry at a bare minimum, right? At least a $1.99 fund. I'm cutting this out. We're going to move on to rage bait in a second. I just want to point out in passing because you mentioned we did call the Open AI must lawsuit correctly, not just dismissed, but dismissed on the technicality. Did you exactly what I said last week? The jury said they just said I could, I didn't too. My wife used to be a public defender and one of the real tells was how quickly the jury came back. Literally two, I actually said, they went in, had lunch, picked the foreman, said look, we can decide on the technicality of statute of limitations. We can be done in here half an hour, or we can waste a whole bunch of time arguing facts beyond that. What does the vote say? We're done. And I think there was a, and if they loved Elon, if this jury loved him, they would, I think they would have said the statute of limitations started when Microsoft flipped it to a for-profit. I think that is a black box that they could do. That's just my one experience where I saw it literally happen where the one party got a huge benefit from the statute of limitations from something 10 years old. I'm going to push back and say one, yeah, my wife, it's been years since she's practiced, but she would say generally juries are smarter than you think, and they're patronizing, people would just do what they want. There's been some places where I could argue that's happened, but in the main, juries are pretty sensible. They listen, and they try and do their civic best. I actually feel this is where I'm going to be a little touchy-feely and say I feel people try and do their best, right? And I think in this case, the real truth is this, it was a no, I mean, Elon knew that they were talking, I mean, so stepping back for people, the question came because the conversion had already been blessed by Delaware and California, you can't say it was, the conversion is legal, so the case you were making was fraudulent, in other words, that the other two guys were fraudulent when they didn't tell Elon about the planned future conversion, and they took his money on false pretenses. So they were alleging fraud, right? And that fraud took place in 2016, 17, 18, right? But there's a statute of limitations on a fraud claim. So if Elon only found out about the conversion to for-profit when it happened in 2023 or 24, then it's within the statute of limitations, and his claim could proceed. But it was obvious to anyone with the brain of a pea that given that he was discussing a conversion to for-profit back in the day, and therefore, there was a ludicrous allocation that he didn't know. That's why they took, yeah, the reason it went to a jury and also to a judge versus just being a black and white thing is that it was about knowledge. When did you know? In the case of fraud, it's when did you know you were defrauded is when the clock starts for statute of limitations. But it's pretty clear he knew. I think the real truth is anyone who was trying to, anyone saying wouldn't have taken that, wouldn't have been the plaintiff. Elon just didn't care. He didn't do it based on probability of winning. He did it because even if he doesn't win, he can damage the other side. He's really angry and pissed off about what happened. And if you worked $800 billion, so what if I wasted $40 million on a bullshit case? I yanked everyone's chain. I'm happy. So my take on this one is justice was served. Elon got his pound of flesh for the $40 million or whatever he spent on legal fees. He's going to appeal it. It won't get a second past appeal and it'll go away, right? So I actually think it came out exactly as planned. But then Jason actually found one of the news stories that came off the back of this, which I didn't actually, which is that Elon's dozens of other investigations into Sam Altman's finances on the side, creating more problems for Sam. I think that's true. I think the separate comment is that, and I feel, okay, words I never thought I'd say. I feel empathy for Sam Altman in the sense that he hasn't taken any equity in Open AI and he's been asked about that. And he said he's had no economic interest in Open AI. And we probably all talked to him and he doesn't own any equity. But what's going to happen now is a whole bunch of people, including in congressional testimony, are going to say, but you have an ownership interest in Y Combinator that has an ownership interest in Open AI. You have an ownership in these companies that are selling to Open AI and therefore you're nefariously trying to get the money. And in one sense, he may have been factually incorrect to say that. In the other sense, it's obviously bullshit. He's not because if Sam wanted to get 4% of Open AI, the board would have given him 4% of Open AI. So whatever he gets indirectly is minuscule compared to what he could have gotten had he not been so, and the reason all this is biting him in the ass is this whole, we're doing it for the good of the world, I'm not getting paid. The enjoyable part is all these bullshit good intentions are biting him in the ass. It's unfair, right? Had he been Larry Ellison and saying, I'm doing it for the money, would all have been clear, right? So yes, Elon is going to get, he's going to be able to continue to make the man's life, it turns, he's going to continue to make Open AI's executive team life a misery, which clearly makes Elon happy. And not only that, but other people are going to be able to pile on too because of the complex nature of Open AI structure in a world where a much simpler structure wouldn't attract any attention. I mean, if he owned 20%, I mean, to be fair to Samo, he was the founding idea behind Open AI. He convened that meeting. If he'd taken 10% ownership day one or 10% ownership when the conversion, no one would blink an eye, right? So it's one of those things, good intentions bite you in the ass, but yeah. [SPEAKER_01] continue to make OpenAI's executive team life a misery, which clearly makes Elon happy. And not only that, but other people are going to be able to pile on too because of the complex nature of OpenAI structure in a world where a much simpler structure wouldn't attract any attention. If he owned 20%, to be fair to Sam, he was the founding idea behind OpenAI. He convened that meeting. If he'd taken 10% ownership day one or 10% ownership when the conversion, no one would blink an eye, right? So it's one of those things, good intentions bite you in the ass, but yeah. Well, maybe, let me add just two final thoughts. We'll go forever. One, and I've said I'm on team Sam now, more importantly, I'm on team OpenAI, OpenAI. Okay. But he did not have no consideration. He set up an entire venture fund where he got all the carry and claimed it was OpenAI. If Elon keeps this going, he, this will reverberate forever. He did not, the idea that Sam took no consideration from OpenAI is the biggest load of malarkey because he set up a venture fund on the side, probably without telling the board, this is probably why he got fired and kept all the carry. [SPEAKER_02] Why do you think he did this? Because he didn't think OpenAI would be worth anything as a nonprofit. So he said, I want to do this. I'm deeply passionate about it, but I also want to monetize it. And how do I do this? Do what I did at YC, set up a fund on the side and keep all the carry, call it OpenAI venture fund and make all the investments and keep all the carry. That way, I can at least make 800 million like I did on Stripe. Ironically, if in fact, just as a commenter, if in fact you're correct, it's evidence of a belief that OpenAI is not going to make any money, which ironically would actually have helped his case. He could say, Hey, I mean, I think what it really points to, genuine commentary, what it really points to is complex arrangements, especially, complex arrangements bite in the ass. Because I go back to my comment that once it became a for profit, if you wanted to just be a paid CEO, you could have got your ownership. You didn't need to do all this other stuff. And you're right, Jason, when you do all this other stuff and then you make an enemy of the richest man on the planet, who is clearly malevolent and willing to go to the mat for this over and over again, you're in trouble. Then add to that on top, something we haven't talked about, but I think goes back to where you're wrong and your comment on the jury, right? They didn't find for OpenAI because they found OpenAI more sympathetic than Elon Musk. I think, as it's becoming painfully clear now, no one in America other than us here in California likes the AI trend. And I think probably if you asked the jury what they thought of all the people involved, they would say a curse on all your houses. What a nasty, obnoxious, arrogant, entitled bunch, but we did our job and we followed the law. And I hope I never see these buffoons again. And only bad things happen to them. My guess is that was the jury. That was probably the jury, right? And now can we get our lunch and our daily stipend and are we done? Did you guys see Eric Schmidt? Eric Schmidt got booed. Yes. I think that, again, go back to my comment here. We've spent, we have the leaders of this thing spending three years telling us how it might destroy humanity and it's going to put us all out of jobs. And then we're shocked to discover that people don't like us. Oh, and by the way, your electricity is going up in the meantime, but have a nice day, right? So in general, you know, we have people who are brilliant scientists who politically are utter morons, right? And the people who are utter morons at AI, but brilliant at politics are going to have us for lunch. That's the movie in the next three years. They're going to have Sam for lunch because he's lied to them as far as they're concerned. And they're going to have the AI industry as a whole for lunch because we're firing people left, right and center. And the politics are going to be brutal, right? And we would have done a lot better. At least when Meta was busy destroying the world, they were smart enough to pretend it was all about bringing friends together and not destroying democracy. We will regret that lack of transparency. Yeah. This is why I'm on team Sam. I think he's doing the best balance he can here. I think it's mostly a positive image. He's thought he's not doing the Dario thing. Yeah. And people still shot at his house. Yeah. Because I don't believe it. It's not funny. It's not funny. Eric Schmidt got off light. I mean, it's not funny. And it's very telling. Because actually three years ago, I was at maybe four years ago, I was at my son's graduation the year, the first year after ChatGPT. And it was the exact opposite. Someone, one of the speakers made a kind of a semi-nice reference to ChatGPT and all the kids clapped in a totally knowing fashion that basically exuded. We've all cheated for the last year using this product. We love it, right? And it was a really sweet one. I'm like, including my son. And we've gone in three years from graduations clapping about OpenAI because it was like, oh my God, that got me my final essay done in 24 hours when I didn't do it to we now boo Eric Schmidt. You might want to think about the trend here and the direction of travel. If you're representing AI and that's why there's been a message shift that Dario hasn't gotten, but most people are now trying to emphasize the positive, but it's going to be hard to do that. Because as we speak today, Meta are laying off 8,000 people. That's 8,000 lives impacted because he wants to put it all into CapEx. So I think the politics are going only one way. What did Standard Charter, what did the Standard Charter bank CEO say? We're getting rid of 8,000 jobs, but we don't have job losses. We just have job reductions in favor of the machines. [SPEAKER_01] This is the greatest graduation speech of all. No job losses at Standard Charter. 7,800 reductions. We just have job role reductions in favor of the machines. This is a level of honesty and disingenuousness as we get. He's not even seen them as job losses because they're no longer necessary. The machine, they're just in favor of the machines. This, this statement should echo through history that he accidentally said. I don't want to end on a negative, but Cisco cuts 4,000. LinkedIn cuts 875. [SPEAKER_01] We don't have job losses. We just have job reductions in favor of the machines. [SPEAKER_01] This is the greatest graduation speech of all. No job losses at Standard Charter, 7,800 reductions. [SPEAKER_01] We just have job role reductions in favor of the machines. This is a level of honesty. [SPEAKER_01] And I think is as disingenuous as we get. He's not even seen them as job losses because [SPEAKER_01] they're no longer necessary. The machine, they're just in favor of the machines. [SPEAKER_01] This statement should echo through history that he accidentally said, [SPEAKER_01] I don't want to end on a negative, but Cisco cuts 4,000, LinkedIn cuts 875, [SPEAKER_01] Meta cuts 8,000, Intuit. I think I will give LinkedIn credit. They specifically said it's not [SPEAKER_01] caused by AI, realignment, but the trends are tough here. [SPEAKER_01] The Intuit one's a big one too. Old school. [SPEAKER_01] Intuit 16,000. [SPEAKER_01] Wow. Yeah. The politics here are going to be interesting. [SPEAKER_01] That's why I honestly think we could talk. I think we will need to create policies in tech to rehire these people. [SPEAKER_01] I think we need to reflate. I think first we're going to get fit. We're going to [SPEAKER_01] realize reskilling doesn't work. We're out of time. We've got to be better than Figma. We can't screw around anymore. So we're going to get fit. [SPEAKER_01] We're going to replace our workflows. We're going to have AIs. And then we're going to have a social obligation. The Eric Schmidts can't just go to graduation and say, F you. We're going to have to reflate and hire thousands of people per tech leader to avoid social unrest. I've had this conversation with a number of high-flying AI CEOs. And at first they think I'm ridiculous. And then they think about it. And then they're like, well, maybe we need to have a 2021 social charter where we just double our headcount and they have nothing to do but play on ChatGPT all day. No, I just want to flag. That's only the case if, in fact, AI is capable of replacing these jobs. There is a scenario whereby people are overestimating what AI can do. And it may be it's not 20% of R&D headcount. It's 5%. And therefore the amount of efficiency that AI creates might be less, right? In which case, are these people being really laid off because they were surplus all along? Are they being laid off because you just spent all your money on CapEx or are you shocked, [SPEAKER_03] have you cut too deeply and you have to do a Klarna and wind some of it back? I don't know. [SPEAKER_03] So Jason, if the reality is as you articulated, then you're correct. If the tech industry really does put, let's say Dario is [SPEAKER_03] correct. If we put 20 to 50% of white collar jobs out in the next five years, then you're going to [SPEAKER_03] have to do something massive on the social thing. Otherwise they will be forming the guillotine in [SPEAKER_03] the square in San Francisco. And then I have a long list of people that I would suggest to bring up in [SPEAKER_03] the tumbles. I actually don't think that'll happen. I think we're over-exaggerating the impact [SPEAKER_03] of it, but you are right. What you cannot do is lay off a whole bunch of people saying it's AI and then act surprised [SPEAKER_03] when it bites you politically in the ass. I mean, I wonder, going back to something you said, how do you think those 8,000 ex-Facebook employees are going to vote on the wealth tax next week? They're going to vote on it worse because, first of all, two things. We can take 5% of Zuckerberg's money and he might leave the state. I'm in. Yeah, I agree. That's why I think we have to have this re-inflation of hiring. First of all, one thing, I know it's N equals 1. You do that and he'll just leave. He may have left. He may be a citizen of Nevada. You're right. My point is politics. When you're calm and rational and you can talk, I think it's a horrible idea. You can talk about it very rationally like this because if they leave, you lose all their tax, right? Politics, when you've been laid off by email at four this morning because the CEO of your company has decided he'd prefer to buy, to Jason's point, $100 million of machines than $100 million of people, that politics becomes very different. And I don't think you think as much. I think you are pretty pissed off. That's my point. I actually think it's worse than that, Rory, because I think these are going to be by far the layoffs that Harry just rattled off and the ones for this year. I believe they're going to be far worse than any layoffs in our lifetimes. And I'll tell you why. No one's going to hire these people. No one wants it. It has always been a scarlet letter to be laid off from a tech company, but it is a double scarlet letter today. And these people are going to be [SPEAKER_01] angrier. I'm interrupting because late breaking news, I got to leave in one minute, but I just saw a [SPEAKER_01] headline come in that says OpenAI might file as soon as Friday. What this says to me is they have [SPEAKER_01] figured out that the last trains are leaving for money station. I don't know if it's true or not. [SPEAKER_01] I'm literally responding in real time here, but I think when you look at the service market, [SPEAKER_01] you say to yourself, go, go, go, go, go. Right? [SPEAKER_01] So when Sarah said we need another 12 months to start the process, what we really meant was we're [SPEAKER_01] going today. So if it does happen tomorrow, we might have to do another supplemental podcast [SPEAKER_01] like Cursor. We'll find out. It'll only be a filing. It'll be a closed filing. You'll learn [SPEAKER_01] nothing. All you learn is what we've just learned, which is that their point to start the process. [SPEAKER_01] It's the April period for SpaceX, not the flip. What really counts is the flip and the flip is [SPEAKER_01] happening for us. So we'll see SpaceX tomorrow. We'll know OpenAI is filed. Two months from now, [SPEAKER_01] they'll do their flip. There you go. What an ending, Rory. There you go, man. [SPEAKER_01] My God. I got to go to a little board meeting and try and make a buck. Goodbye. [SPEAKER_01] Good luck. your good performance Figma, six to 10 times sales. And your crap is three times. So to me, it's, yeah, you have time to become a good normal company. I mean, the big comment is the SaaS businesses are amazing, but the AI businesses are an order of magnitude of maybe two order of magnitudes larger and are at, you know, earlier in their growth life cycle. So you're never going to get the attention back on you again. That's the deal. That's the deal for sales. But you can still be worth $10 billion and, you know, as a company, be doing a billion in revenue and growing nicely. Just to provide context, Datadog had their first billion dollar revenue quarter, 32% up, all-time high, error across 4 billion. This was a great quarter. Oli and team crushed it. So to the point, it's now more realistically priced from its exuberant pricing. Is that the summary? Yes, the summary. Exactly. And in that context, it's worth trying. I mean, the difference between being in the shitter and not getting out and being in the penalty box and then getting out is quite significant. I mean, you know, you got to like where you are, as Jason said, if your team's at last thing, you got to like where you are a lot. If you're Datadog or Figma, you got to be pretty depressed about where you are if you're Wix, given, you know, you did the buyback and it hasn't worked. So there's plenty of paper here. We're going to discuss what I just want to cover Figma first. So Jason, you're always rather opinionated on Figma. Accelerating for the second straight quarter, NDR 139%, two-year high. This was a great quarter results. Fucking sold all of mine at the end of last year. Well, you're still ahead. That was the right time to sell, to Rory's point. I'll tell you what I got wrong on Figma for sure. Like the cap, like dumb, dumb lempkin. Okay. I got to come up with something assonance with the L, right? A limited lempkin or something like that. Lose or lempkin. Lose or lempkin. I like limited. Can we go with limited? Can we be a little kinder? Limited lempkin. Limited lempkin. I was completely right that make is the worst vibe coding product I've used since I've been on this journey. And I'm right that it was not important to the senior management. And I'm right that they left 500 million or more on the table by not building a repleter level. I'm a hundred percent right. And I think it's the tragedy of folks being slow. However, limited lempkin. I missed the captain obvious point. Figma is a building software. So everyone that is in the business of really helping, like there is a soft, like there is an AI explosion, but part of the AI explosion is a software explosion. And you can see it in companies that Harry and I have invested on like WorkOS and RevenueCap that have exploded because there's a software explosion going on. And even though Figma lost the vibe coding race so far, it is, it is one, it is a beneficiary of the software explosion. One, right? Two and two, it has internal AI tools like, like Andrew from Clayville was talking about. So one, it's selling credits to make your product a little better. That almost sounds cynical, right? But what it's really rolling out now is the ability to internally vibe improvements to your Figma designs. Like the agent can look at your Figma design. It actually officially rolled out. I think today it's been in beta for a while, but it rolled out while we record this. And instead of just designing something, it can say, Hey, let's, let's, let's up, let's update the workflow in here. Let's update the journey. This is not like incredibly difficult, but it is difficult that Figma scale. So even if they're not going to help you vibe products, the fact that they are making the building of software more efficient for their audience, you know, it's like Atlassian, not adding massive new customers because of AI, but adding massive more value for their base. So I got, I, they're, they're a little slow to that. It's in beta today. I mean, it's, you know, it's getting to be summer, but, but it looks like it's pretty good. Um, and I utterly limited Lemkin missed. Anyone like Figma should be modestly accelerating today. Cause we're building more crap. Their new ability to agentically improve design likely will be a big deal for their customers. They likely can get another 50% or more of revenue out of their base. The question is to the extent that folks who would have been using Figma are now doing mock-ups for software products using Lovable, which you hear a lot about, you know, which is using it as a way to describe your product rather than doing a Figma. That's actually a work stream that you would want to own if you're Figma, because what you don't want to have is people going around your product flow. Right? So I do think you're right, Jason. I think it's not just the extra 500 million. It's I'm willing to, they probably have an imperative to make sure that that, that their customer doesn't leak out to a design flow. That's do your actual design and something like Lovable where you have a working prototype, not just a Figma design. I think so. That one for the moment appeared to be more of a Twitter mania overstated that the, the, the, the limited, the design capabilities in Lovable, which is a little bit ahead of rep, but they're pretty limited for anything that's professional grade. Like for a Figma person, they're still pretty, pretty early. What, what Figma missed is I create this design. It's beautiful. I, I loop in the product team to approve it. And then I click a button, which is says push into full production prototype. And it just works. It works like, and you can, and the irony is Replit and Lovable both have that as a native insertion point for a reason. Like if you use these products today, they have up, you know, it right in the prompt, upload a Figma design because they know like this, this is our number one ICP wants to take that static design and put it into production. Why, you know, I mean, um, why Figma doesn't have that natively is a loss of, uh, you know, $500 million and going up. Totally is on, on the flip side of these two great, great quarters and kind of exciting, happy news, uh, weeks down 45% since the stock repurchase. Rory, you mentioned it and touched on it. They're now a $2.2 billion market cap base 44 announced last night, actually, that they hit 150 million of ARR. That's because the core business isn't growing. The pre AI business is no longer growing, right? Maybe it's not. I think it says the pre AI business is terminal. That's what the public markets are saying. Right. And they, they don't think that the AI play is enough to, to rescue it from terminology, right? You've got the 150 from base 44 is very impressive, right? But it's substitution revenue at a high level, isn't it? Because it hasn't materially grown the AR, the revenue. It's substitution. If you would assume then that it's a terminal business in terms of the core business that's existing for getting base 44, surely you would then ascribe the same to a Squarespace, which I think it's terminal as well. I think Wix and Squarespace, one thing people forget, this is at the, if you look, it's true. Not only are they, they're, they're being terminated by two vectors. One is obvious. One is less obvious. The obvious one, what, but is more true than people think is it's better. In many cases, it's already better to vibe code your own website because you get what you want. And they already have templates and they already have integrations. Not, not for folks that are truly tech fearful. They should still use Squarespace and Wix. They're great products, but they're so limited and you can build something in a vibe coded platform so nicely in 10 minutes. Anyone that's not tech phobic should use these products. The other thing that, that we kind of forget is that Wix and Squarespace for the last five years, they, they were low end Shopify competitors. That's where their growth was from merchant services, payments, e-commerce. And there was a whole world four or five years ago where, where you had WooCommerce from WordPress, you had Wix, you had Squarespace, and you had BigCommerce who all were viable competitors to Shopify. The other thing happened, Shopify destroyed them all. There's no reason to use, this is another category where the low end was destroyed by Shopify who amazingly went up market and down market successfully at the same time. And there's just, it's not worth it. You can't save enough money to not use Shopify for your store. So, so the folks that are trying to save $14 a month have just kind of evaporated for the low end of the market. They don't need these, these sub Shopify's and BigCommerce, even though it's not low end, it got destroyed too, right? The most visceral competitor, the just dead, it's, it's dead in the water. So they got hit both ways. It's, it's too, it's too bad. It's too bad currents hitting them. As you broadly agree. I mean, I think BigCommerce right in the, right in the strikes on a Shopify. I don't know the Wix mix between think of it as kind of information only sites versus e-com sites, but you're right, Jason, it really matters. And if it is high on e-com sites, then you have that vector to think about. And it was all the growth. It was all the growth. Got it. It was all the growth. Interesting. Because, you know, the core, I would say this for the core, I mean, a lot of those businesses have to be customer, it's super low end SMB, especially for the non-e-com sites. It has to, if your core acquisition engine works, you should have been able to, I mean, it is still possible that if you can convert most of your customers to the new product, then over a couple of years, you can make, you can maybe make the math work, right? If you are a Wix, if you, at least they have a new product, they did do the acquisition, right? It is possible to, you know, you get this weird compounding because when the new product is a hundred million and it's doubling and the existing product is a couple of billion and it's flat for the first kind of year or so it's really hard to move the overall aggregate gap revenue growth rate. But if you can compound quickly enough on the new product, it does move it up, right? So that's on the revenue side. I want to come back to, I want to separate the stock buyback from that, right? That's on the revenue side, but separate comment on the stock buyback. That sucks because it's like you do the classic investor banker thing of, oh, if you buy back the stock at four times, you know, it's cheaper than it's ever been and that'll be good for the stock. And it sounds like it makes sense. But when shit's going wrong, things can go lower than you ever think. And sometimes it pays to keep the money in your back pocket because the stock will go even lower, right? And I think that's just a strategy that didn't work right now, right? You took on a bunch of capital, you bought the stock back and you didn't, you know, by definition, if the stock is 45% down since that moment, that buyback strategy didn't work. And I'm always, frankly, I'm always, it's better to have bought it back cheap than bought it back at even the crazy high prices that some people are doing stock buybacks in the past. But when your business is in trouble, things that are bad can get worse. And the actual ability to have another billion dollars on your balance sheet to maybe make an even bigger acquisition, in my view, is worth more than trying to juice the stock for the short term. So I think they look back on that stock buyback and go, that wasn't the best move to make. We optimize for the short-term value of the stock, not the long-term destiny of the business. The flip side is Mark Benioff said they did a buyback. What did he borrow? 20 billion or something like that to do it, right? Not even at the lowest interest rates, but he said, I did it to offset Slack and Tableau. I did it to offset the dilution. I got it back, right? My theory- What does that mean? What does that mean? I'm on boards where people pitch, bankers pitch to do a buyback to offset stock-based comp, and I literally want to bludgeon them to debt, right? Well, listen- Buying stock at high prices is stupid. Buying stock at low prices is clever. End of analysis. I think a lot of these deals, and even Salesforce, maybe, it's really just to hold off shareholder activists because that's their first play. That's their first play. So when you are down in the dumps, what you got to, and Rory, you've been on boards of this. You've watched it. To the extent you can, you want to placate the shareholder activists without giving them what they want. And the simplest thing you can do is use all your cash to buy back shares because that's their play. So if you take them out of the game, you've given them what they've asked for, and they don't really have a play if they buy you, especially if you're also doing layoffs. So if you're doing layoffs and you're doing the buybacks, maybe you keep Starboard and Friends away because their playbook has already been used up by the management team. Agreed. That is actually the thing. And look, if there's nowhere better you can put the money and the stock is cheap, then it pays to buy it back. And I do get the comment that you're always afraid of management with big amounts of cash that they'll waste it on a bad acquisition. On the other hand, in these times of change, hyper change, you probably have two choices as a SaaS company. You want to decide, I am the old thing and the old thing is good enough. I'm going to optimize for 30% operating margins and 10% growth. And I'm an economic machine. It is what it is. And if I have excess capital, I should buy the stock back, give it back, do whatever. Right. Or you say to yourself, I might have to do something more than that. I don't know what it is, but at least for the next 12 months, I'd like the option value of knowing if I want to do, what was it, a base 44 or whatever it is, acquisition, I have the money. Right. So, but I agree, Jason, cynical comment. You're right. People do it because it's one of the least disruptive activist moves that you can do. And normally you get brownie points for it. But the odd thing is if you do a buyback of the stock to appease the beast, and then the stock goes down 40%, they won't remember that they wanted you to do a buyback. They'll just say you're an idiot for doing it. In the end, you're paid to be right. And when you buy and then it goes down 45%, unfortunately, you can't say to yourself, you were right. Today, they're trading at one X revenue, one X literally. Yeah. That's the terminal, simplifying the terminal state. They also announced two years ago, they were shipping a glean competitor and going all in, but I'm not even sure it exists. In a year's time, will they be higher than they are today or lower than they are today? I'd say higher just because, I mean, again, I don't know if they took on that, but I just think at one X revenues for any, unless you, I would like to look at their churn numbers. I haven't spent enough time. Unless the revenue is absolutely evaporating, you can get from one X revenues, especially if you had the wit and the intelligence, which they did to buy a kind of replic competitors. So this is the thing. Most mature software companies that aren't growing can easily operate at 20% operating margin. So you're now down to saying you've got your cash and do you think you can last four or five years before you go to zero? I mean, you can calculate the terminal value here, right? At one X revenues, you are nearing terminal value, right? For a company, for a product that has high gross margins and is relatively sticky. So yes, I think you can create more value. You will regret deeply buying a whole bunch of shares at three times revenues or two and a half times revenues thinking it couldn't get any worse. But yeah, fatal, fatal next sentence, maybe now it can't get any worse. And if it's a 0.5 X a year from now, are the revenues have gone down by 50%, then you can call me an idiot then, Harry, which I know you're dying to do. No, no, it can't get any worse. I'll go and buy a load of Wix and then remind you of it every week. Remember, can't get worse is not the same thing as it will get a lot better. I mean, you know, the question, a totally separate, I think Jason's right about the upside in these stories. Again, it goes back to the same thing. Your range of outcomes has compressed markedly. It's not clear to me. If someone said, what would you do to get a company, let's not pick on squares, but to make any of these things get to 30% growth and be worth 5X revenues, I'm not sure I have a single idea. I think Jason's right. You're dealing with managing, you know, as they used to say about the British empire, Harry, you're managing decline. It's okay. It's history. You wouldn't understand. I do think one of the downbeaten that we think is truly downbeaten, public software companies in the next year will become upbeat. And what I mean is, as slow as they've been to react to AI changes, they have the installed base. And so someone will get their met, someone that is still founder-led, it won't be anybody that isn't founder-led. One of these founder-led guys will put his best 50 folks in a room and say, listen, I don't even need you guys to innovate. I just need you to build a better version of, especially prosumer AI app. I just need you to build a better version, stay out of it and ship it. And we're going to sell it the hell out of their base. Arguably, that's what Canva is trying to do with 2.0. It's complicated. The startups are moving faster. The models are moving, but someone's going to pull this off with their best 50 people because they have 300,000 customers. They have 300. So for every time I'm pitching these AISDRs and I'm looking at HubSpot with 300,000, I'm like, hurry up, Breeze, because you got 300,000 HubSpot customers just waiting to buy an AISDR from you. And if HubSpot could actually make this as good as a startup, they're going to sell 150,000 Breeze AISDRs. It just isn't in market today. So I just think there's so many challenges it's hard to predict, but someone's going to, you're going to turn around and you're going to be like, holy cow, Drew pulled it off. Drew went from 0% growth. He got his last 50, got last 50 soldiers holding back the castle, put them together and holy cow, he built this thing. And, but I don't know that we can predict who it is. On the flip side of challenge, we have Nebius growing 684%, accelerating faster than ever. My question is, is it justified? Is this absolutely the sign of just compute starvation and a buy, or is this bluntly further signs of a bubble and concerns that this is over market exuberance? You know, it's a, it's a mini core weave and those have been great businesses because you're right now, everyone's compute starved. And let me make the captain obvious answer as Jason would say, if compute continues to be starved, then they will continue to be good businesses. And if they don't, if it's not, if compute becomes plentiful, they will be, they will be commodity businesses and the guys who are over-leveled will go bust. So it's just that simple. Now, I actually think Gavin is a Gavin Baker who had a very articulate comment is that ironically, the slowness of permitting and the inability to bring on data centers at near the speed that people want to bring them on might save us all from ourselves. If all the data centers people, like the disaster scenarios, if all the data centers people want to build could be built. And then at the same time, we do the Entropic and OpenAI math that we just discussed. And that trillion dollars of token revenue turns into half a trillion dollars. Then you got a trillion dollars of CapEx and a half a trillion dollars of revenue and you're fucked. Right. But if on the other hand, the half a trillion dollars of revenue stays, but the just inertia of building data centers means you only get half of them built, then you're saved by the bureaucratic inertia of the great American state. Right. And you only bill half a billion dollars. Compute remains relatively scarce and people like Nebius and Corby who have that compute do really well. Does Benioff spend grow faster or slower than data center capacity? That's it in a nutshell. With OpenAI and Entropic in the middle, collecting the money from the first and giving it to the second. That is the bet. And I don't have a brilliant opinion on that, but that's the action on the table, as they say at the craps game. You know, I was driving back. We had a little Napa retreat break after Sastra A. I know this year and the Tesla took us the long way through the South Bay, which I haven't done in a while, rather than the bridge. And I'm passing Marvell Semiconductor, SanDisk, all these folks, all these superstars of the 90s. They're on effing fire today. Okay. The only thing that isn't on fire today is traditional software. Every other category, optical connects, everything. The old, the South Bay where Harry's probably never been, like he probably has never been south of Mountain View or Palo Alto. He's like, why would you go there? There's like trillions down there, man. Look at the skyscrapers. Okay. And I was thinking, I was thinking, you know, that the only thing that isn't inflating today is old school software. Everything else is on fire. So my point on Nebius is, and Rory made this point, listen, there's an argument to short it. There's an argument that, that, that is just surplus. There's not enough capacity in the market, but how far in the future can you short these things? How far in the, sure you can short SanDisk and memory and, and, you know, we've passed Micron on the drive. Like you can make fun of Micron, right? Micron's had more booms and busts than a California prospector from the 19th century, but how you can't shoot short three years into the future effectively. Certainly I don't have the skills to do so. So we can take potshots at, at, at Nebius and CoreWeave and friends, but what's the point? We see no signs that there's a short-term crash coming and it's, it's interesting, but anything but, but traditional software, it's just, it's just on fire, right? Every single, Cisco, Cisco's back. I should have mentioned Cisco coming up South first or Zenker. I mean, geez, every, every software, every technology company except traditional software is on F and fire. Again, going back to the big simplistic picture here, all these companies are on fire because the hyperscalers and the model companies have decided to spend, you know, roughly three quarters to a trillion dollars a year building shit. And 50% of that goes to Nvidia. 10% of that goes to power. 10% of that goes to network. And you're right. Everyone just gets pulled along on the bubble. Everyone, right? One of two things has to happen. Either corporate America has to digest a trillion dollars worth of tokens without any intermediate software layer. And I think it can do some, but I don't think it can do all. Our second software has to start working because only if software starts working, does corporate America get to spend that kind of money. And if they don't, if Sierra doesn't grow, let me put it bluntly. If Sierra doesn't grow, then at some point, open AI and Tropic will stop growing because their customers today are primarily software companies for coding, right? And selling through software companies to corporate America to use tokens for business purpose, right? So in a weird kind of, at some point, this all has to level out. I just think when we start, when we started this show, I think CoreWeave had just IPO'd or was about to IPO. And it was easy to mock CoreWeave. It's like, okay, well, this is just, this is just round trip revenue to create a little, a little supplemental capacity that we won't need in a year, right? Fast's already a year. We need every, every, every, every, every, yeah, everything possible. So I do think at some point, Sandisk and Nebius and CoreWeave all have to crash and Marvell and even Broadcom. At some point they have to crash at some level because they always, I think AI can grow infinite. Like we, we all approach the singularity, but, but eventually capacity will catch up. Things will catch up. I just don't know what's going to be near enough to the present that it matters at some level that it matters, right? But this was the first, I don't know if you followed Leo Aschenbrunner, who's the famous, uh, he doesn't have to worry about 10 years out, does he? He'll just trade in and out of it. But if you saw his latest releases on his latest filings, he put puts across everything. The guy for the first time added very little and actually showed his first real signs of concern. He's smarter than me. He's making the opposite point I'm making that it's, this is, this future is coming much sooner than I think it is. The tough one is, would you invest in a CoreWeave or Nebius at the seed level today? That's the tougher event. This is still 20 VC, right? It's as a public investor, you can say, Hey, Sandisk looks pretty good for the rest of the year, right? As a, as a startup investor, would you do one of these deals? I'll answer that. I saw a really excellent one with a superb team, a very good seed investor. I'm not going to name it. And I really consider it long and hard. It was still a seed round. We tend to be a investors. I, he was really talented team. I didn't do the seed, but when I, I always try and give a good answer to people when I turn it down, especially when I think they're A-class teams, because I say, Hey, look, here's my thinking, because hopefully they'll remember my thinking. And if they, you know, if they prove me wrong and they come back for the A and I will admit when I wrote out my thinking on why I'm not doing this. And he responded, I thought he won the argument. So I'm actually sitting here going, Rory, was I an idiot? Because he had a compelling at the margin story around capacity that I thought was interesting. So I literally ran, I did answer the question, Jason, logically I chickened out. I didn't want to be that marginal capacity three years into the deal, three years into the CapEx boom. But there's a little part of me thinking, Rory, that might be a dumb decision. That was a clever story with a clever team. And yeah, you, you are relying on the capital markets being there for the next three years and being able to access them. The sobering numbers is half a billion to a billion dollars to build the capacity. Right. But maybe it could have worked. So I get the temptation, right? I literally had that. This was, that was last week. Yeah. Rory, do you always give detailed explanations to founders? I remember Jason once saying to me actually about founders will always kind of argue back and actually it's easier to be like, Hey, keep your lash more vanilla. Yeah. I think it depends honestly, because you can't do it to everyone. Right. So I think to some extent it depends on how much time you spent with them. Right. Depends on two things, right? How much time you spent with them. If you've taken one meeting and you're a no, just give a clear no. I mean, maybe your minor feedback, you know, you can't write a long email, right? If you've taken two or three meetings and you felt you almost there. And sometimes I like to do it because I think it's helpful for your own self. Some CEOs don't respond well to detailed feedback and they are. Some of them are really professional about it and I like them. I'm like, yeah, I see what you're saying. If I'm right and you're wrong, I'll be back in 12 months and I'll say to you, I told you so and you'll pay three times as much. And I'm like, and I'll be glad to. Right. I think in the end, you, I think in the end, even if you don't share it all the time for any deal, you spend a lot of time with, this is a separate comment. For any deal you spend a lot of time with, it's actually very helpful to write out your conclusions and keep them internally. I do that, right? Because then you can test your thinking and you look back and you look back to yourself and go, my God, I turned down that for that reason. I was an idiot. Or I nearly did that deal and I was totally wrong on the market. It's a lot of, remember, in a model that only gets trained in eight or 10 year increments based on the two deals you do a year, you get a lot of additional feedback from the 20 or 30 deals you nearly did that you just don't want to lose. So I do try and write it out for myself. And then sometimes I share it with the team, especially if I think, you know, it might be of interest. Yeah. I think that is, that's a good point. I did say that to Harry years ago. I stand by it. Like if, if you've had between zero and one meetings with the founder, there's no upside in providing feedback. It's just an endless, like, wait, Jason, that's wrong. You misunderstand. Like I just, it's, it's, if you're, if you've gone deep on a deal, right. You should, you should share the real reasons why it's generally appreciated. If nothing else, if they, if they haven't already closed around, it's helpful to them to see the other side after two to three deals, but it's gotta be at least two meet two. You have to have gone deep enough to actually be able to write that email. It can't be because I, I, I just, I don't see it. Just, just don't like, then you just gotta be a one line. Right. I think I know the deal that Rory is talking about. Um, but, uh, we shall move on. Uh, I want to talk about Cerebris, the biggest U S tech IPO since Snowflake, uh, priced at one 85, which was a big expansion from where it started. I believe it was one 20 in the, or one 10, one 20 in the early days, which went to one 50 and then one 85. It popped 68% on day one. Um, it was, it was a fantastic IPO, uh, an amazing story. Does this open the window for many more companies of that size and not the $2 trillion companies, but does this open the window for many more companies to go out and IPO? I think it's good for, for a SpaceX. I think it's good for anyone above their level. I think it's great. It's great. It just shows anything that is that or better. Um, and at better in air quotes, the demand is infinite. I'm not sure if this is really going to help folks that are below that level that we don't know. Right. I doubt it. Even you're looking at Figma and you're like, I, I mean, I don't think anything sub Figma can IPO and have a decent IPO. This is the new grade better than Figma BTF. Now Cerebris arguably is a different category, but if you look at the backlog of 24 billion and you're, and you're, and you're Pollyann about it, right? That's more back. What's Figma's backlog? I don't think it's 24 billion. Right. So I'm oversimplifying it, but I think it's got to be better than Figma. And if you're better than Cerebris, then, uh, you, you know, this is a good time to IPO. This is very much an N of one bet. It's an extraordinarily complex technological product that they've brought to fruition just at the time when demand for that product has exploded. And unlike when they pulled an IPO two years ago, they were able to line up arguably the marquee customer for that product, open AI. So it's a semiconductor, it's a hot, they're a semiconductor company. Inference is hot, they're an inference company. Open AI is hot, they're selling to open AI, right? It's a N of one positioning. And, you know, for, Jason, for a market that's starved of ways to bet on open AI and Anthropic, this, you know, they really only have things like core weave and, you know, obviously you have Nvidia. This was a chance to play. So yeah, I'm not surprised it went with, if you remember last week, you asked, is it going to go really well? And it was, we recorded before the IPO and we appeared after the app. And I was like, of course, it's going to go really well. They've already raised the range. They're not idiots. And it went exactly like that. They went to the, they went beyond even the range. They, you know, went to the max they could do without refiling. It was an obvious winner category. And worth pointing out how fickle the world is. Two years ago, they couldn't get this deal done. So I think you're right, Jason, actually. It is at the margin. It's a positive tell for SpaceX. People are willing into, you know, people are very much risk on for the kind of things that look like they have the kind of upside. Roy, would you add it to a public book at 300? Probably not. I go back to the base rate. Yeah, the base rate return on IPOs, not from the day of the, not from the day of pricing, but from the first day's closing price, which is typically way above it. The base rate return on that is negative. One, six months, 12 months, one year, two years, right? Is that, in other words, across a thousand or so of them, if you buy on the pop, you know, you tend to be on a happy camper, right? Is it a company at the right price you believe can be a long-term enduring company? Absolutely. Yes. It's got technological differentiation like no one else, right? So just blindly buying the day every out of retail idiots on the planet is buying is probably not the best way to make money, just statistically. And base rates matter. Totally agree. We said it's good for SpaceX and SpaceX sets June 12th for the largest IPO in history. It was suspected 1.75 trillion valuation, $75 billion raise. My word, this would be epic. It will. That's one word for it. And, you know, again, back in- Is that, how does this go? I don't know. I mean, I think it's funny. We're recording this the day they're due to file the S1, but I haven't seen it. I checked before I came on. The interesting thing with the S1 is in one sense, you really want to read it. In the other weird sense, there's actually going to be very little in it that actually matters at the margin. What do I mean by that? Is that the S1 will tell us, and I'm really curious to read it because it got to the SEC really quickly. The S1 will tell us everything about SpaceX as it existed in December of this year, which was without X.ai, without the cursor deal, without the Antropic deal. And because if you think about it, the most recent, I don't, I presume their calendar year end is December. So they'll have last year, which is SpaceX and Starlink standalone. You know, the leaked figures are 18, you know, 15, 18 billion in revenue, 20, 30% growth rate, EBITDA positive. Would like to see the CapEx before I comment, but pretty much a bounded, understood company, right? In February of this year, they closed on X.ai, which, you know, brought them a pitiful amount of revenue and a burn as big as Croceus. You know what I mean, right? And then in, so that's going to be prorated into the S1 for maybe one quarter, right? So that's all, you literally have half a quarter's information on something that's kind of taken you from a profitable company to a loss-making company. Then the other two big deals, the Antropic deal won't even be in the financials because it's a signed deal. And then the cursor acquisition won't even be in the financials because it's not closed yet. So you're literally going to be reading this S1 going, and no forward projections are allowed in an S1, right? You're going to read this thing that says, here's the company we used to own on December 31st of last year. Pretty nice fucking company it was too, dude, right? However, we've since got AI pilled and now it's totally different. By the way, we can't tell you much about that. You'll have to talk to our bankers, right? It's going to be the funniest S1 ever in one respect is that, I mean, you know, revenue, you know, 50%, 30, 40% of the revenue isn't in the S1. All the loss isn't in the S1 except for half a quarter. Yeah, some of the bankers are going to be having to tell the story via the roadshow. So in one sense, I'm looking forward to reading the S1. In the other sense, there's just a lot to come. So that's the first comment is the storytelling around these acquisitions are not going to be in the S1, and it's just going to be interesting how they get that across. There are other markets and other times where people will look back and go, you must have been mad to buy the stock on that little information. So I think it'll, again, the probabilities it gets done extraordinarily well, and the excitement is amazing because the market is in the mood for excitement. We're selling the most exciting company on the planet at a time when the market wants excitement. If the market ever wakes up and says it wants cash flow, it's going to be a totally different story. Oh, well, you know, right now we're into excitement. June 12th, this goes out. It's Elon. It's Elon the pump machine. Does this have the mother of all pops? With retail getting behind Elon in a way that we haven't seen before. Got to do better than GameStop. No. Yeah. I think there's a reason it's 30% retail. I think some of it is being Robin Hood and Democratic, right? He's selling nothing, 30% to retail. But I just think the Robin Hooders and the GameStoppers have got to be more excited about rockets than plushy toys at GameStop. To me, it's more exciting. I agree. I think everyone will want to own some of this, which means retail will buy a lot of this. You're exactly right. I'm going to put $2,000 on my iPhone into this thing, right? And the reason I said no is because, remember, GameStop, again, I'll go back to numbers. GameStop, I think, pops 10, 30, yeah, 20X from low to high just based on retail. When you start at $1.7 trillion and the largest market cap company on the planet is $5.5 trillion, NVIDIA, it's going to be hard to 10X from here, right? Are you sure? That's what I meant. But you're right. The excitement on retail will make this a super interesting story. And then the other thing is, as you know, literally, Rory, I'm completely ignorant. Obviously, it's going to be a huge float, right? Mathematically. Could the GameStoppers and the Robin Hoods, I'm admitting my ignorance, if they could believe it, go 10X. They're not doing any DCF analysis. They're trading. Is it possible for them to trade enough shares to create a 10X pop? Is it mathematically possible to influence the float that way? Because sometimes it's a thin float when you're able to manipulate it, right? The float isn't that small. It's $75 billion. I think the interesting thing is if it's already healthily priced at 100 times revenues, it will be interesting to see what happens. I mean, when these things, and Harry, you can go on a comment at this point, when institutions play shares, sorry, when an IPO gets, when institutions take shares in an IPO, they have a price target, right? And, you know, if that price target gets achieved on the first day, you tend to see additional trading. I mean, it would be, you know, the 70% of, if BlackRock spends $10 billion on buying in the IPO, as has been Moon, but again, I have no clue about the facts, right? They run an internal analysis and they say, we think we should buy 10 billion because we think over the next 12 months, we can make 40% on our money. And if at the end of the first day, it's up 40%, it'll be sorely tempting to have another $10 billion come back to market because you'll be looking at your price target and going, I have a price target. I've achieved it. Time to go, right? And you see that phenomenon when IPO pops, the institutions. And I used to think, oh my God, they're disloyal. They'll leave. But in fact, it's just, we bought, we wanted to be a holder, but we had a price target and you've achieved it. So it will be interesting to see that price actually, if it does in fact do a GameStop-y type of price. You could all, I'm just going to say it not to be negative. You could also have the Facebook effect where the IPO was frankly a dismal failure. It, early on, it hung around its price for a day or two and then look it up in 2012 and then it dropped, you know, at 1.40, 50% below its IPO price. It was a horrible IPO, right? And obviously an amazing company, which can also happen. Price matters. I think it's, it's, it's going to be wild. I, I genuinely hope it succeeds because I think the damper effect of it not succeeding would, and trading well would be pretty profound. I think it'll trade up to 5 trillion. I'll take this bet, but I think there will be enough sitting in Brickell in Miami, day traders, yahoos that love the brand. Folks hate the brand. That's why he lost the trial in Oakland. I think they hate the brand too, but enough folks love the brand that it can float up three to five X based on partially influenced the float. There's not enough. There isn't enough demand. I'm, I'm, I'm, this could be limited Lemkin speaking, but I'm, I'm going to take this bet that it's going to trade up three X in 2026, just based on GameStoppers driving it up. I want me to, I think it's going to go to 3 trillion. I don't discount the fact that it goes down. I don't discount the fact. I didn't say it's likely. I'm just pointing out here. You're paying a hundred times. Where's my Robinhood account? You boomer. You boomer. I am a boomer. Fucking boomer. Yeah. 5 trillion through each and every, I think it's going to go down. I didn't say, hang on. I didn't say it will go down, Harry. You got to be able to live in probably. Did I tell you when I got into Bitcoin? Yeah. I've made billions on my Bitcoin. This is going higher than Bitcoin. Okay. Good for you. You do realize that space is bigger than Bitcoin, right? The entire universe, there's a trillion stars just in our own galaxy. And there's a trillion galaxies that is larger than all the Bitcoins out there. You have this completely wrong. Did I tell you when I got into Bitcoin? Did I tell you guys when I got into Bitcoin? Okay. Thank you. I mean, okay. I'm just trying to be serious. That's an instant pass on a founder and a pitch telling you when they got into Bitcoin. That's my flip side of too much feedback after zero. If in the first 20 seconds, they tell you about when they got into Bitcoin, tell them to stay in Bitcoin. I mean, the reason I made that comment is, and I know it sounds like, again, I go back to Facebook. I remember the IPO. It was the defining company of its generation. It was far more attractively priced than here. It was profitable, right? But they pushed the limit on price. And they just hit that point where the initial trades went the other way. There was a little worry about mobile, right? They hadn't managed a mobile transition. And it really traded down over the next six months, right? So I'm just simply saying, again, it's back to my account. When everyone thinks something is guaranteed, that's just when it blows up in your face. Do I think it's the likely outcome? No. It's probably two-thirds positive. And of that, at least 30% of it is adjacent outcome, which is it pops amazingly because of retail. But again, I go back to its fundamentals. It's trading at 100 times revenues. They've effectively decided to be a Nebius, not a Antropic, by virtue of selling their computer to Antropic. So that whole, the AI story ain't there. So it's Starlink and Starlink. It's Starlink as the growth engine with core we've attached. It's been a while since we had a bet, Rory. This is great. Jason's five. I'm three and you're negative. No, yeah. Okay. I mean, there's probably some kind of spread betting I can take on that, which is, let me think about it. I'm comfortable in saying it'll be below. Okay. I'll tell you what. I'll take, I'm comfortable below three. I mean, I'll totally take that bet. The price is right bet. I mean, you're basically, you guys, you said three. Jason said five. I do not think, let me, yeah. At the end of a month, I do not think this company will be valued at $3 trillion or more. Oh no, neither do I. No, no. This is a meme and this is a casino. We're seeing the casinoization of public markets. This will go fast to three and it'll come fast back down. I don't do casino betting, but thank you. But duly noted that over the, okay. What are you doing in venture and AI then? If you, yes. Okay. Keep rolling. Keep rolling. Okay. Keep rolling. News last night. Mic drop moment with Y Combinator. And I do think it's actually important. Sam Altman just offered $2 million in open AI tokens to every YC startup in the current batch in exchange for equity. It reminded me of Yuri Milner and DST doing the exact same with the very early YC batches. What do we think about this? And does that impact the valuations that we ultimately get it at if they can get $2 million in open AI tokens from Sam? Sam Altman. First of all, it's all smart. I think that it's back to, you have let Anthropic steal a march on you, more than a march, many marches, on people, on mindshare, on respect, and you got to do all you can to earn it back. And that's just one more thing, you know, developer hearts and minds. So smart. Second is, you know, I'm assuming it's not transferable. Because if it's transferable, then it's money. Because let's be real, compute is money, right? But so I'm sure they've thought of that. So it's not transferable. So yeah, I mean, look, so to your comment on does it impact pricing, maybe at the margin. But if you're a compute intensive, it does. But probably if you're compute intensive, you're raising $200 million anyway, right? For the most, I mean, if I think of the last YC batch and I sat to it, most of them are building software on top of AI, but where agentic spend would be, you know, token intensity would be 10% of revenue. So it's valuable, but it's not going to replace the need for humans. You're still going to need four or five humans to build the code to build the agent for call centers or whatever. So you're still, they're still going to need revenue. At the margin, it takes a little bit of the edge off, but it's not like any of them can build the next generation, whatever with it. It's, it's nice at the margin. I think it'll increase the valuations for sure. A little bit. Yeah. Because if nothing else, even, even, even if you don't view it as inflationary, they have 2 million of tokens now. That's a real investment. Like let's, let's take this seriously. Like we all can use the tokens. So that is 2 million, of de-risking that investment, 2 million more that they can use to add value to the deal. There's plenty of YC companies that don't raise 2 million at demo day, right? So now they've raised another, now they've radically de-risked these investments. It would make sense that typical post might go up to 60. There's some, there's some correlation I'm not smart enough to do. And it, it, it, it may even game stop at higher since they're investing at a hundred. It's hard to predict. It's you, we can come in, Harry, if you do the deal a month before demo day, it's 20. If you do it the week before it's 40, if you do it after you're at the open AI price, it's a hundred. You can, but you are welcome to come in at the open AI price and it's not even a premium. Okay. We'll do it because we love the pod. We'll let you, Harry and Jason all in at, and no premium, just at the, no, no, no, no, nothing. Just at a hundred. You're right, Jason. If you navigate on optics, it probably causes an anchoring effect. You know, I got 2 million at a hundred. Why would I take another four at 50? It may shrink the size of the rounds too. Like it may make it even harder on VCs to invest in YC rounds because they've, you know, the average ownership for VC rounds has already been sliced to like five or 6% at YC. This could slice it to two or three just because you, you just don't need as much capital that, that might even be the bigger impact potentially. Right. In fact, yeah. Depending on, depending on how much of your, remember at scale, if you're successful, any software company can use up 2 million tokens without blinking. The question is how, yeah, the interesting question is how much leverage in that. I'd love to know in the first 12 months of the typical YC company's life, how much of their spend is either today is either tokens to serve customers, tokens to build product and our engineering spend that can now be replaced by tokens. It all goes back to that 20% number. Can you replace, I mean, can, cause out of the gate, you're probably not selling so much that you're, you know, you're reselling, that you're kind of using those tokens to serve customers. Most of what you're probably doing with those tokens is building your product. So if you can replace- Maybe. What if you're building a Lagora or a Replit? You could burn through all those tokens in 12 months. Yes. Serving customers. But if you are, can I make a comment? If you are, given that token intensity for a Harvey or a Lago is probably 20% in terms of revenue, that probably means, so to burn through 2 million, you're going to be at 10 million in ARR. If you are 10 million in ARR, in today's world, you're going to raise at 500 million anyway. Well, hold on with love that. I don't think that's the early stage math. The early stage math might be like, you know, token spend is marketing spend. So I'm going to give away 20, $30,000 a month of video creation, of audio creation, of my Suno competitor, of my Repli competitor. Now I can give away $50,000 a month of tokens my first 12 months, where it would have been stressful AF before this deal. You're exactly right. I was mentally putting in two categories, which was token spend for engineering and token spend for full price customers. You're exactly right. The minute you sell it, I agree with you. What you'll now do is everyone will have destructive free token programs because you want to try them out. There'll be a bunch of freemium products. You're exactly right. That's how it manifests. And if Sam increases it to like four or eight or 10, like as open aggros, then think about how, how, how much that could change the game. If as a startup, you get 10 million of tokens to build another Legora or Replit for your, for your first year, then you're just be to the wall because you don't have to worry about anything except shipping the best Opus 5.7 codex product if you can, because there's no issue the first year. It's all about mark because for so many of the startups we invest in now, tokens are marketing. Their tokens are marketing because poor Michael Cannon Brooks, he's built an iconic company, but he can't afford to spend the number of tokens a startup can per customer. Give me two, twos just could just be the start. I just think this is already disruptive to 200 startups and it could, why couldn't it go up? Well, it can, if you have spare capacity, it's also very telling. It says at the margin, at the margin, if you're tapped out on capacity, that's two times 150. For Anthropic, if they really are capacity constrained, that's 150, that's 300 million you're giving up every three months. That's 1.2 billion a year. If you say four YC batches, 1.2 billion a year at 18 times valuation is about, you know, it's a 20, 30 billion dollar hit to valuation, that's real money. But if you, on the other hand, you have spare compute, then it sleeves off your vest. So to some extent- Yeah, but if you believe in the open M, I mean, the YC model, worst case, you're going to hold it at, like once cash is less of an issue, you're going to at least be able to hold these investments at 1x. It's not going to cost you anything because if the average, if allegedly the average batch does 3x to 4x, but you're paying a hundred million, then at least I don't have to mark it down from my balance sheet. You're wrong on that part, respectfully. Up until then, you were more right than me on that. You're wrong because if you have, open AI's investments will be valued at 1x and no one will give them any credit. But if to make that investment, they gave up on revenue from selling to Bank of America, those tokens- Of course, you're right on that. Yeah. It only sort of works if the tokens are surplus or leftover or something like that. And therefore, my conclusion is open AI has surplus tokens and Anthropic does not. I mean, I think that's a good, that's a good, good conclusion, right? I think it's also a bet, but it's also a thoughtful bet, right? It's a smart way to use them. It beats the shit. Yes. It's a smart way to use them. Okay. What else, Harry? I just want to hear before we do a rage bait, but real Jason, Rory is a celebrity at Zasta. Oh God. They loved him. Don't give me L O V E D. He was just, he was like eight, 10 rows standing room only deep to hear from this guy. They love, they love him. It's all right. Did he get selfies? Okay. Okay. He did the one on stage with me. He wasn't that into the selfies, but yeah, he was mocked. I hate this shit. Keep going. Oh yeah. No, it's okay. Do we want to do that? In all seriousness, I do think it's a reminder that there, there's a large threat of Rory super fans, right? They like the thoughtful deep dives. Rory's got a few skills. Harry, Harry and I are self-aware. We're not claiming we're something we're not, Rory has a set of insights and skills that I'm very self-aware that I would say to the LP is listening, at least justify a six X fund. I would say at a minimum, at least justify premium carry at a bare minimum, right? At least a one 99 fund. I'm cutting this out. We're going to move on to rage bait in a second. I just want to point out in passing, uh, cause you mentioned we did call the open AI, the open AI must lawsuit correctly, not just dismissed, but dismissed on the technicality. Did you exactly what I said last week? The jury said, yeah, they just said I could, I didn't too. My wife used to be a public defender and one of the real tells was how quickly the jury came back. Like literally two, I actually said, they went in, had lunch, picked the foreman, said, look, we can decide on the technicality of statute of limitations. We can be done in here half an hour, or we can waste a whole bunch of time arguing facts beyond that. What does the vote say? We're done. And I think there was a, and if they loved Elon, if this jury loved him, they would, I think they would have said the statute of limitations started when Microsoft, when they flipped it to a for-profit. I think that is a black boxing that they could do. That's just my one experience where I saw it literally happen where, where the one party got a huge benefit from the statute of limitations, from something 10 years old. I'm going to push back and say one, yeah, my wife, it's been years since she's practiced, but she would say generally juries are smarter than you think, and they're kind of patronizing, you know, people would just do what they want. There's been some places where I could argue that's happened, but in the main, juries are pretty sensible. They listen, and they try and do their civic best. I actually feel this is where I'm going to be a little touchy-feely and say I feel people try and do their best, right? And I think in this case, the real truth is this, it was a no, I mean, Elon knew that they were talking, I mean, so stepping back for people, the question came, because the conversion had already been blessed by Delaware and California, you can't say, it was, the conversion is legal, so the case you were making was fraudulent, in other words, that the other two guys were fraudulent when they didn't tell Elon about the planned future conversion, and they took his money on a false pretenses. So they were alleging fraud, right? And that fraud took place in 2016, 17, 18, right? But there's a statute of limitations on a fraud claim. So if Elon only found out about the conversion to for-profit when it happened in 2023 or 24, then it's within the statute of limitations, and his claim could proceed. But it was obvious to anyone with the brain of a pea that given that he was discussing a conversion to for-profit back in the day, and therefore, you know, there was a ludicrous allocation that he didn't know. That's why they took, yeah, the reason it went to a jury and also to a judge versus just being a black and white thing is that it was about knowledge. When did you know? In the case of fraud, it's when did you know you were defrauded is when the clock starts for statute of limitations. But it's pretty clear he knew. I think the real truth is anyone who was trying to, anyone saying wouldn't have taken that, wouldn't have been the plaintiff. Elon just didn't care. He didn't do it based on probability of winning. He did it because even if he doesn't win, he can damage the other side. He's really angry and pissed off about what happened. And if you worked $800 billion, so what if I wasted $40 million on a bullshit case? I yanked everyone's chain. I'm happy. So my take on this one is justice was served. Elon got his pound of flesh for the $40 million or whatever he spent on legal fees. He's going to appeal it. It won't get a second past appeal and it'll go away, right? So I actually think it came out exactly as planned. But then Jason actually found one of the news stories that came off the back of this, which I didn't actually, which is that Elon's dozens of other investigations into Sam Altman's finances on the side, creating more problems for Sam. I think that's true. I think the separate comment is that, and I feel, okay, words I never thought I'd say. I feel empathy for Sam Altman in the sense that he hasn't taken any equity in open AI and he's been asked about that. And he said he's had no economic interest in open AI. And we probably all talked to him and he doesn't own any equity. But what's going to happen now is a whole bunch of people, including in a congressional testimony, are going to say, but you have an ownership interest in Y Combinator that has an ownership interest in open AI. You have an ownership in these companies that are selling to open AI and therefore you're nefariously trying to get the money. And in one sense, he may have been factually incorrect to say that. In the other sense, it's obviously bullshit. He's not because if Sam wanted to get 4% of open AI, the board would have given him 4% of open AI. So whatever he gets indirectly is minuscule compared to what he could have gotten had he not been so, and the reason all this is biting him in the ass is this whole, we're doing it for the good of the world, I'm not getting paid. It's all, what I, the enjoyable part is all these bullshit good intentions are biting him in the ass. It's kind of unfair, right? Had he been a, had he been Larry Ellison and saying, I'm doing it for the money, would all have been clear, right? So yes, Elon is going to get, he's going to be able to continue to make the man's life, it turns, he's going to, he's going to continue to make open AI's executive team life a misery, which clearly makes Elon happy. And not only that, but other people are going to be able to pile on too because of the complex nature of open AI structure in a world where a much simpler structure wouldn't attract any attention. I mean, if he owned 20%, I mean, to be fair to Samo, he was the founding idea behind open AI. He convened that meeting. If he'd taken 10% ownership day one or 10% ownership when the conversion, no one would blink an eye, right? So it's, it's one of those things, good intentions bite you in the ass, but yeah. Well, maybe, let me add just two final thoughts. We'll go forever. One, and I've said I'm on team Sam now, more importantly, I'm on team open AI, open AI. Okay. But he did not have no consideration. He set up an entire venture fund where he got all the carry and claimed it was open AI. If, if Elon keeps this going, he, this will reverberate forever. He did not, the idea that Sam took no consideration from open AI is the biggest load of malarkey because he set up a venture fund on the side, probably without telling the board, this is probably why he got fired and kept all the carry. Like, you know why he did this? Cause he didn't think open AI would be worth anything as a nonprofit. So he said, said how I want to do this. I'm deeply passionate about it, but I also want to monetize it. And how do I do this? Do what I did at YC, set up a fund on the side and keep all the carry, call it open AI venture fund and make all the investments and keep all the carry. That way, I can at least make 800 million like I did on Stripe. Ironically, if in fact, just as a commenter, if in fact, you're correct, it's evidence of an, of a belief that open AI is not going to make any money, which ironically would actually have helped his case. He could say, Hey, I mean, I think what it really points genuine commentary, what it really points to is complex arrangements, especially that, you know, complex arrangements bite in the ass. Cause I go back to my comment that once it became a for profit, if you wanted to just be a paid CEO, you could have got your ownership. You didn't need to do all this other stuff. And you write, Jason, when you do all this other stuff and then you make an enemy of the richest man on the planet, who is clearly malevolent and willing to go to the mat, to the mat for this over and over again, you're in trouble. Then add to that on top, something we haven't talked about, but I think goes back to where you're wrong and your comment on the jury, right? They didn't find for open AI because they found open AI more sympathetic than Elon Musk. I think it's, as it's becoming painfully clear now, no one in America other than us here in California likes the AI trend. And I think probably if you asked the jury what they thought of all the people involved, they would say a curse on all your houses. What a nasty, obnoxious, arrogant, entitled bunch of shits, but we did our job and we followed the law. And I hope I never see these buffoons again. And only bad things happen to them. My guess is that was the jury. That was probably the jury. Right. And now can we get our lunch and our daily stipend and are we done? Did you guys see the Eric Schmidt? Eric Schmidt got booed. Yes. I think that, again, go back to my comment here. We've spent, we have the leaders of this thing spending three years telling us how it might destroy humanity and it's going to put us all out of jobs. And then we're shocked to discover that people don't like us. Oh, and by the way, your electricity is going up in the meantime, but have a nice day. Right. So in general, you know, we have people who are brilliant scientists who politically are utter morons. Right. And the people who are utter morons at AI, but brilliant at politics are going to have us for lunch. That's the movie in the next three years. They're going to have Sam for lunch because he's lied to them as far as they're concerned. And they're going to have the AI industry as a whole in lunch because we're firing people left, right and center. And the politics are going to be brutal. Right. And, you know, we'd have done a lot better. At least when Meta was busy destroying the world, they were smart enough to pretend it was all about bringing friends together and not destroying democracy. We will regret that lack of transparency. Yeah. This is why I'm on team Sam. I think he's doing the best balance he can here. I think it's mostly a positive image. He's thought he's not doing the Dario thing. Yeah. And people still shot at his house. Yeah. Cause I don't believe it's funny. It's not funny. Eric Schmidt got off light. I mean, it's not funny. And it's very telling. Cause actually three years ago, I was at maybe four years ago, I was at my son's graduation the year, the first year after chat GPT. And it was the exact opposite. Someone or the speakers made a kind of a semi nice reference to chat GPT and all the kids clapped in a totally knowing fashion that basically exuded. We've all cheated for the last year using this product. We fucking love it. Right. And it was a really sweet one. I'm like, including my son. And we've gone in three years from graduations clapping about open AI. Cause it was like, oh my God, that got me my final essay done in 24 hours when I didn't do it to we now brew Eric Schmidt. You might want to think about the trend here and the direction of travel. If you're, you know, representing AI and that's why there's been a message shift that Dario hasn't gotten, but most people are now trying to emphasize the positive, but it's going to be hard to do that. Cause as we speak today, you know, meta are laying off 8,000 people. That's 8,000 lives impacted because he wants to put it all into CapEx. So I think the politics are going only one way. What did the standard, what did the standard is British. Harry knows the British stuff. What did the CEO of standard charter bank says we're not, we're, we're getting rid of 8,000 jobs, but we don't have job losses. We just have job reductions in favor of the machines. This is the greatest graduation speech of all. No job losses at standard charter 7,800 reductions. We just have job role reductions in favor of the machines. This is a level of honesty. And I think is as disingenuous as we get. He's not even seen them as job losses because they're no longer necessary. The machine, they're just in favor of the machines. This, this, this statement should echo through history that he accidentally said, I don't want, I don't want to end on a negative, but Cisco cuts 4,000 LinkedIn cuts, 875 meta cuts, 8,000 Intuit. I think I will give LinkedIn credit. They specifically said it's not caused by AI to realignment, but yes, the trends are tough here. The Intuit's a big one too. Old school. Intuit 16,000. Wow. Yeah. I mean, yeah, the politics here are going to be interesting. That's why I honestly think we could talk. I think it is a, I don't mean to repetitive. I actually think we, we, we will need to create policies in tech to rehire these people. I think we need to reflate. I think first we're going to get fit. We're going to, we realize reskilling doesn't work. We're out of time. Okay. We've got to do, we've got to be better than Figma. We can't screw around anymore. So we're going to get fit. We're going to replace our workflows. We're going to have AIs. And then we're going to have a social obligation. The Eric Schmidt's can't just go to graduation and say, F you, like we're going to have to reflate and hire thousands and thousands of people per tech leader to avoid social unrest. We're going to have to do it. I I've had this conversation with a number of high flying AI COs. And at first they think I'm ridiculous. And then they think about it. And then they're like, well, maybe, maybe we need to go. We need to have a 2021 social charter where we, we just double our head count and we just, they have nothing to do, but play on chat GBT all day. No, I just want to flag. That's only the case. If in fact, AI is capable of replacing these jobs, there is a scenario. I just want to put it out there whereby people are overestimating what AI can do. And it may be, it's not 20% of R and D headcount. It's 5%. And therefore the amount of efficiency that AI creates might, might be less, right? In which case you have yourself, are these people being really laid off because they were surplus to voyage all along? Are they being laid off? Again, we talked about this because you just spent all your money on CapEx or, are your shocker, have you cut too deeply and you have to do a Klarna and wind some of it back? Right. I don't know. So I, Jason, if, if the, let me be clear, if the, I want to say it, if the mess, if the reality is, as you articulated, then you're correct. If the tech industry really does put, let's say Dario is correct. If we put 20 to 50% of white collar jobs out in the next five years, then you're going to have to do something massive on the social thing. Otherwise they will be forming the guillotine in the square in San Francisco. And then I have a long list of people that I would suggest to bring up in the tumbles, right? I actually don't think that'll happen. I think we're over-exaggerating the impact of it, but you are right. What you can't do is say to half, what you cannot do is what's happening right now, laying off a whole bunch of people saying it's AI and then acting surprised when it bites you politically in the ass. I mean, I wonder genuine comment, going back to something you said, how do you think those 8,000 ex Facebook employees are going to vote on the wealth tax next week? They're going to vote on, you know, it's worse because first of all, two things. Let me see. We can take 5% of fucking Zuckerberg's money and he might leave the state. I'm in. Yeah, I agree. That's why I think we have to have this re-inflation of hiring. First of all, one thing, I know it's N equals 1. You do that and he'll just leave. He may have left. He may be a citizen of Nevada. You're right. My point is politics, when you're calm and rational, and you can talk, I think it's a horrible idea. You can talk about it very rational like this because if they leave, you lose all their tax, right? Politics, when you've been laid off by email at four this morning because the CEO of your company has decided he'd prefer to buy, to Jason's point, $100 million of machines than $100 million of people, that politics becomes very different. And I don't think you think as much. I think you are pretty pissed off. That's my point. I actually think it's worse than that, Rory, because I think these are going to be by far, the layoffs that Harry just rattled off and the ones for this year, I believe are going to be far worse than any layoffs in our lifetimes. And I'll tell you why. And I know this is brutal. Okay. No one's going to hire these people. No one wants, it has always been a scarlet letter to be laid off from a tech company, but it is a double scarlet letter today. And these people are going to be angrier. No, I'm interrupting because late breaking news, I got to leave in one minute, but I just saw a headline come in that says, open AI might file as soon as Friday. What this says to me is they have figured out that the last trains are leaving for money station. I don't know if it's true or not. I mean, I'm literally responding in real time here, but I think when you look at the service market, you say to yourself, go, go, go, go, go. Right? Yeah. So when Sarah said we need another 12 months to start the process, what we really meant was we're going today. So yeah. If it does happen tomorrow, we might have to do another supplemental podcast like cursor. We'll find out. It'll only be a filing. It'll be a closed filing. You'll learn nothing. All you learn is what we've just learned, which is that their point to start the process. It's the April period for SpaceX, not the flip. What really counts is the flip and the flip is happening for us. So we'll see SpaceX tomorrow. We'll know open AI is filed. Two months from now, they'll do their flip. But there you go. What an ending, Rory. There you go, man. My God. Okay. I got to go to just a little board meeting and try and make a buck. Goodbye. Good luck.