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AI, we use it internally, we use it across all of our teams. We actually had our company wide kickoff today and our CTO challenged every one of our teams to say how can they use AI more? And it's really quite incredible what, what it's done. What I will say though is we're, we're definitely in some places for some AI companies hitting some sort of a limit, it seems, in what they're able to do. And the exception to that, I think, has been Google Gemini has continued to outperform the rest of the market. And I think that the answer to why that's the case is actually not about the chips. Obviously they've designed their own chips. I don't think it's about the people. They have incredibly smart people, but so does anthropic, so does OpenAI. I think it's actually about the data. And we are one of the few companies that actually has a view into this. And so we haven't shared this very publicly, but I guess no time like the present. And so how much more of the web would you guess that Google sees and is able to train their AI systems on versus OpenAI? Yeah, I'd probably say 50% more. Yeah. The answer is actually 3.2 times more. Wow. Which is insane, right? That means that for every one page that OpenAI says, Google is seeing 3.2 pages. So there's just so much more data that's going into it. And again, opening is the next closest after that, Microsoft sees Google sees 4.8 times more of the web than Microsoft. They see, similar to what they see with Anthropic as well. And it just drops off from there. So what I worry about is that because Google has this unique access to the web that nobody else has, that the game might just go to them. Because I think that at the end of the day, whoever has the most data wins in the era of AI. And I think what a lot of these companies are seeing is they're hitting kind of a data limitation. And one of the things we're really thinking about is how can we make sure that we level the playing field. Either bring Google back to where everyone else is, don't let them leverage search in order to get a unique advantage in AI, or how do we lift everyone else up to the same place where Google is, make sure that everybody has access to that same data. If we don't create a level playing field in terms of the data, I do feel like there's a real concern that, that Google is going to run away with this and no one else will catch them. Interesting. Yeah, we've noticed that. I mean, we test all the different LLM apps, and even just from a branding perspective, when you're in the Gemini app and it says doing a Google search.

Everyone else is having to pay for it. That seems wrong, that seems like something that we need to fix in some way. And again I either we need to either bring everyone else up or bring Google back down to everyone else's level. But that's, that's one of the things we're worried about. I think the most interesting thing that people aren't talking about today is what's going to happen to retail, what's going to happen to small businesses that are out there. AI is this massively consolidating force. And if you look at take three of the biggest retailers in the world, Walmart, Target and Amazon, what's interesting is again these are hugely well resourced companies, smart people working at them, no lack of financial resources across them to do whatever is right. And they've come to three completely different conclusions on what you should do about agentic commerce. In the case of Walmart. Throw the doors open, open it up to the catalog, let every agent in and, and in the short term I think that's clearly the right answer. But I worry over time that the agents are going to just keep trying to figure out how can we cut Walmart out over time. And I don't know what brands mean in a world where your agent is shopping on your behalf. Brands are a way for humans to have shortcuts that understand quality and value that goes away in a world of agent commerce. Agents will figure that out for you and report back and, and brands might not matter as much. And including a massive brand like Walmart, Amazon has taken the complete opposite strategy. They're literally suing perplexity saying your agents aren't welcome here again too much. But that's because they have a massive advertising business and they know that the agents aren't. Well, so does Walmart. Yeah, but it's not how material is it for Walmart versus it's a pretty. Big like there's any of the sponsored listings on Walmart, they're all doing the same stuff. I think, I think, I would, I would argue it's something different. I think Amazon thinks that they have to win the agent war themselves and so Alexa has to get much better at it, whereas Walmart doesn't have as much of a stake in it. So this is a giant bet, I think from Amazon that their agent will be able to shop better than anyone else's. That isn't my experience with Alexa yet, but again a huge amount of resources that are going into that. Target has what I think is sort of the bullets split the baby kind of approach, which is eight agents are allowed, but they have to be the ones that are listed on the Target website. That obviously is not going to be a long term sustainable approach, but I think that that shows how challenging this is going to be. And what I really worry about is going forward. Like if you think about what small businesses that you shop with, your local butcher, your local flower store, those things, a lot of it is because of the interpersonal relationships that you have with those shop owners. If those go away, if your agent is doing this all on your behalf, if we all become some version of the Jetsons where how does George his shopping. He asked Rosie the helpful robot to go do it for him and Eggs show up and he doesn't really care, you know, where they came from. I worry that that's going to put enormous pressure on small businesses and I don't know that small businesses have the tools today to be able to figure out how to exist and thrive in this world of agentic commerce. And that's something that I'm enormously worried about. Jordy. I think, yeah, I think it's. I think it's warranted. I still think at the end the day of.

So your speed to deployment increases rapidly with this. So heat is generated as they put electricity through the silicon chip and old Facebook data center. They would just open the window and blow it out with fans I assume, you know air cooled systems. Now we're seeing a lot of water cooling. Walk me through like try and explain what is the actual flow of where the heat goes, how it's moved around. Yeah, absolutely. So pretty much every single electron that goes into a day center gets turned into heat. Yeah. Comes right into these chips. They generate a huge amount of heat. So now when we're talking gigawatt scale, this is a gigawatt worth of heat. Yeah. We talked about, there's a, there's a bathhouse in New York called Bath House and they, they originally would heat the, the bath with via bitcoin mining. There's so much heat coming off of it. Yeah. And racks used to be kind of this like 5 to 20 kilowatt per rack. Now, now we've jumped up to 120 kilowatt per rack. The Vera Rubin coming will be 600 kilowatts per rack and they're trending towards a megawatt in a rack. So when you think of how much power that is, a megawatt's 1,000 homes consumption and putting that in a rack and then all gets turned into heat. So you have to move that the most efficient way possible. And today 20 to 30% of your energy is going towards cooling. That is a OPEX constraint, that is a thermal constraint and it's just, you're not generating revenue with that. Yeah. So we're trying to shift that and we reduce that at a minimum of by 25% energy consumption on the cooling side. Now you can have more headroom that you're using towards compute. Yeah. And what's the, what's the material, what's the substrate for extracting the heat? Air, water, something else. Yeah. So we interface with the existing systems that are there. So we, we integrate with the glycol loops that go to the chip level, to the CDU side of it. Okay. But inside our actual system we are using supercritical CO2. So we're running a high speed compressor that was developed in house by our team. We have a huge amount of history from SpaceX Rocket Lab. About a third of our team comes from there and we've really designed this from the ground up. Our first one we came up and running in eight months with a four person team, ran it at 30,000 RPM. The next system will be coming together in Q2 here. And, yeah, we're using supercritical CO2 due to the high density of the density. So it can absorb the heat. It absorbs the energy, it heats up, and then you move it somewhere else. Yeah, we remove it. We vent it to ambient. But why we're calling this a heat processing unit is because today we view heat as a liability and as a constraint. But heat is energy and it's an asset. And so we're building the platform that allows you to remove that heat from your system as efficiently as possible, and it opens the door for future use, cases of heat reuse. Sure, yeah.

Like that. But having that extra angle, I think is important. 100%. Yeah. How does deployment work? I mean, imagine a 911 call comes in, an address is getting collected, and then at some point is like, is it, you know, does someone type the address, hit go. And then the drone can just go from an address and route itself. Or is there a pilot that's firing it up? Like how autonomous is the actual deployment to get from the base station to an address? Yep. So we grab addresses from computer aided dispatch or other pieces of software. Computer Aided dispatch, what does that mean? Basically, that's the software that dispatchers use to deploy ground units of various kinds. Got it. Okay. But when someone calls 911, the GPS coordinate of that phone hits cat. Oh, okay. Interesting. Yes. So we'll grab that GPS coordinate, then we find the nearest drone to the emergency with sufficient battery state of charge to actually get there. The doors on our recharging pods automatically open. We launch an aircraft, and we plan a path from its launch site to the emergency, avoiding manned air traffic, no fly zones, et cetera. And then when the drone arrives, it can engage in some number of pre programmed, like on arrival behavior, like orbiting the GPS coordinate, pointing its camera in. A certain direction, saying something, totally sensing itself. Or it can then be taken over by a dispatcher or tele operator. The drone can be repositioned, camera can be moved around. Maybe that teleoperator does use the drone to communicate to someone. Or they might decide to deliver an emergency medical payload like Narcan, a defibrillator, personal flotation device, etc. How do they.

Walk me through the supply chain. What are you making? What is America good at making? Or do we at least have a good drone motor company? I've been hearing that drone motors in particular are difficult to make in America. Or at least a lot of the companies sort of offshored or left or went out of business. Yes. So Listen, I mean DJI controls 90% of the global drone market. It's really a monopoly. I think this isn't so well understood. Like the drone industry is a monopoly owned by dji Autel is their nearest competitor. They're another Chinese drone manufacturer. They have about 5% of the market. All foreign drones were just federally banned. I don't know if you guys have been tracking this, but right before Christmas. Wait, but only for government buyers or all consumers. All new foreign drones have just been banned from entering the country. Okay, so, so if I go to Best Buy right now, there might be a DJI Mavic 3 on the shelf, but there's not going to be any new ones once they go out of stock. That's the next stock. Exactly. Basically like the next Mavic won't be allowed into the country. The next Matrice series drone allowed in the country. They can hypothetically continue importing their current in market drones. Okay, okay. But in reality, in reality, even those imports are being slowed down very much at the borders. Okay. So there's this huge need for a DJI of the west or like a leading drone manufacturer for the free world. And that's the organization that we want to be. Yeah. I mention all of this though, because. Wait, so what does that mean though? Does that mean you start selling these to the public consumer? I want to make consumer drive. I think over time, yes, we probably do start engaging in those types of businesses, you know, consumers a little far from our current space. Yeah. But if it helps you get to scale, bring down costs. Yeah. There's a potentially good feedback loop, I think. I think though like private security, industrial Automation, Homeland Security, etc. Would be like more, more natural, immediate new verticals for us. But yeah, yeah, I mean over time we want to be. That was underreported. I didn't, I didn't catch that. They were. I remember, I remember some news around foreign drones with. Within purchasing from the government. I didn't, didn't. Yeah, they were. Walk us through some of the history there. There were some local bans, some state level bans, some individual agencies that might say, hey, we're not going to approve these. You heard about, you know, you can't use TikTok in Langley. That seemed obvious, but now it's grown a lot. What was the actual history of the rollout? Who's. Who's been driving this in Washington? Yeah. So the progression here was, number one, the federal government banned itself from purchasing Chinese drones. Okay. Then some states started passing similar legislation. Florida, for example, banned their public safety agencies from acquiring new Chinese systems. About a dozen states have followed suit. And the new thing is what I just articulated, you know, the government saying, you know what? No more new foreign drones are allowed into this country, period. Okay. Regardless of application. Yeah. Walk me through the geopolitical risk of, you know, foreign drones. At one point, I had a dji.

That. Well, a week ago, when you posted about a court in Italy fining you, can you take us through the process? Was this a surprise? How did everything lead up to your post which went mega viral? Yeah, first of all, not a court, quasi governmental organization. And let me give you a little bit of background. So in Italy, there was concern by a bunch of the football clubs, so the soccer clubs in Italy, about online piracy of the matches that were there. And in response to that, the Italian Parliament basically designated a quasi governmental organization called agicom, that they would have the ability to essentially allow any media company executive to put any website they didn't like on a list. And then initially, just the ISPs in Italy had 30 minutes to block access to that website. But they then amended the law to be able to include other company, including Cloudflare, but also folks like Amazon, Google, Microsoft, anyone that is doing anything that is cloud related, they have gotten swept up in this. And so the requirement was that when a website was put on this list that we would have 30 minutes to remove it globally. In other words, this small group of media executives got to choose what you could watch in the United States. And we already saw significant exposure of this beyond just illegal streaming, where we saw political content being removed. They accidentally blocked all of Google Drive at one point. They accidentally blocked all of Cloudflare's network at one point, which broke the Italian Internet. So they turned that off pretty quickly. And so we had been in litigation in Italy to basically say this doesn't make any sense. And what particularly doesn't make sense is we hate the illegal streamers. They cost us money. We don't make any money off of them. They waste our bandwidth. They, they take up resources that we could have for paying customers. And so we have a huge team that is, is trying to shut them down. We actually won a court decision right before Christmas that said that we could get all of the internal documents on how this commission was created, what its rules were, everything else. And, and then, you know, probably just coincidentally, of course, immediately after Christmas, the first meeting they had, they imposed a $17 million fine on, on us and said that it will continue to escalate if we don't pay it and register for this scheme and commit to let them censor, censor the Internet, which obviously we're not going to do. That, by the way, is 2x our revenue. In Italy, they have interpreted the law as saying that they can charge up to 2% of global revenue for any company that they find. So again, the insanity here is pretty high. And yet that's not even what the law says. The law just simply says it can be from tens of thousands. And in fact, there's parts of the law that they relied on that are so old that they were actually quoted in lira. So it was back before even the EU existed. To give you some sense of how crazy this is, even the EU has said that this law, they have significant concerns over this law. And so we're in a strange situation where we're getting a lot of pressure to literally just turn Italy off and not let them connect to cloudflare's network, which would, unfortunately, everyone saw a few months ago when we had an outage, how big of an issue that is. That doesn't seem right. Putting your tinfoil hat on. Do you think there's some local group that wants your Italy business that says, like, hey, that's like, what it. Is it purely censorship? I think there's. I think that there is. So I think, first of all, it's a bunch of, you know, older, you know, football owners who don't understand how the Internet works, who just are saying, you know, piracy is a problem, and instead of doing what most leagues around the rest of the world do with us, which is work with us in order to identify what those illegal streams are, and then we not only take them down, but we actually put up a page that's an advertisement for the correct stream in its place. Instead, they were just like, you know, we're going to just, you know, we're going to just make it so that you have to take these things offline. Damn the consequences. I think there are other people inside of Italy that see this as an ability for them to be able to control some political content that they may not like. Obviously, Italy is a contentious political state, and being able to shut things you don't like off the Internet is a very powerful political tool. So I think that's the tinfoil hat. Hat side. But I think mostly this is just thuggish behavior by a bunch of people who don't understand how the Internet works. Ben, take off the tiny.

Or late stage types of rounds and funds. Do you think we'll see any SPACs this year? Well, specifically for companies in our world, obviously there's SPACs like constantly treasury companies. And stuff going out. But Venture backed SPACs? Yeah, I definitely have had now a variety of companies that I'm involved with have had SPAC sponsors pretty aggressively approach and knock on the door. I think like there are certain companies where it makes sense if you are a type of company where it's like, look, I just need 500 billion or 500 million on the balance sheet. Billion would be great. I'm sure Sam, all of them love. To have 500 billion on the balance sheet. But yeah, you know, and you're super deep tech, long cycle thing. Yes, makes sense. I think there's just enough scar tissues from the 21 time period where it's like there's a very small handful of companies that like survive through that spat. Crazy, right? Like there's that one robotics company that works with Walmart pretty significantly. It's like one of the few that has actually like, you know, sort of traded significantly up, but like the vast majority. MP Materials. MP Materials. Materials. A SPAC though. Chamath. Spac. I thought, I thought it was a chamath. Yeah. But it was like, I think almost like a part like it used to be public, went private, restructured and then like fortress. Fortress value. Fortress value. I'm just, I'm just excited. I'm just excited to see what American Exceptionalism Acquisition Corp. Symbotic was the one. That I was thinking of, by the way. I'm pretty sure it's one of the few SPACs from like 2021. Let's look at. Here's one. Here's a SPAC candidate. What about that, that Moon Hotel that was getting chosen? I mean at $400,000 a night, it's pretty simple. Just do the math. Simple economics. It's just a math problem. I like that they're working on that. Give them a couple decades, let them cook. Jordyn Electrically YC FOUNDER COOK thank you Gabe. In the chat. Not a math spec. It was a pipe. Pipe. Okay. Yeah. So pipe into that one. Yeah. Symbotic is probably the best example of like basically spacked at a looks like $8 billion valuation. Now a $42 billion company. Basically like incredible. Obviously like Outcome, but that's like of the basket of like this backstory in 2021, that's like one of 15 that basically ended up like that. The basket going down. I think for most companies that. That makes sense. Yeah. It feels like you get to do a big fundraise, you get a bunch of cash on the balance sheet, and then almost certainly you're going to have a stock chart that just looks like this, that follows you around and gets screenshotted in your face for the next, like, you know, five years. And then you look at some of these spacs, and it's like, oh, yeah, they're up 40% this year. And it's like. But they were 10 times bigger when they went out. And so you have this weird dynamic. Even if it puts cash on the balance sheet, it seems like it's a lot of. Lot of weird dynamic. Very different culturally. To be running a public company, dealing. With the stock market is symbolic, just a super.

Regularly such that I'm kind of doing all that pre diligence basically, like ahead of time. So, like, let's talk about one of the companies that I think exemplifies this strategy, Hadrian, where we just announced a $1.6 billion post round led by T. Rowe Price basically last week. Maybe, you know, we're gonna have Chris on the show. We'll bring it, but we'll ring it twice for the hatred. Exactly, exactly. I think it tells, you know, fifth Unicorn or something like that from like, you know, they see under 25 post all the way through. Yeah. Feel good about it. Chris said I was texting him earlier. He's like, you're allow toot your own horn. I want to toot your horn. BC brags, you know. Yeah, yeah, yeah, yeah. Give us the update on Hadrian. Yeah, that's one where it's like, look, I got involved in, you know, basically like company formation. Basically like, you know, sort of seed round where it was Chris and like maybe one or two, you know, sort of people. And so what did diligence on that one look like? Well, it was effectively like, you know, four and a half years of working with Chris very closely, going to every single board meeting, watching the company like adapt over time. And in like, you know, Q1 last year in 25, it was clear there was just like this inflection point that I felt like I could appreciate, but not everyone else was really appreciating yet. The first was they basically, you know, for those that don't know, Hadrian basically builds these like automated CNC basically, you know, facilities. They basically cut metal on behalf of, you know, aerospace and defense companies. So, you know, think a lot of the biggest logos in the Founders fund portfolio won't list, you know, all of them since I'm not sure which ones are allowed to be public. But, you know, ones that, you know, build rockets, make drones, you can guess which ones those are. And they cut metal on behalf of those companies. For a long time they were interested in like R and D production grind, like trying to figure out basically like how to make the economics business work. Switching from what were originally quick turn small prototype contracts into production multi year, basically large contracts. In Q1 last year, there were two things that happened that just made it very clear to me that it hit my Spidey instincts of, oh, this is the point that I'm supposed to come in and do the series seed. My whole job was to have done the seed and then wait for this exact moment. The two things that Happened were one, they just got through production hell. Basically the economics started making sense. They were producing way more volume then the second thing was we talk about this a lot but the defense industry is obviously going through a huge shakeup and there's a whole set of neoprimes that are coming out that are going to get anointed. And Hadrian was clearly in this transition point from what was previously just purely like a back end sort of supplier of parts and a vendor into somebody that was becoming more of like a strategic neoprime that was going to be co betting alongside others. But as a neoprime that is focused specifically on production. If we think about groups like and oral surrounding shield I, you know, name your favorite, basically you know, mock industries, name all your favorite, you know, neoprenes. They all roughly follow the same model which is like they are product developers fundamentally, right? Like they go and like design net new products. They may do a decent amount of production and assembly themselves, but they still are reliant on like out of sort of house, you know, sort of vendors for a vast majority of their like you know, subcomponents. Adrian fundamentally is a very different type of neoprime, right? They are neoprime that is explicitly focused on production. They do not produce basically like end products themselves. They only amplify other and products. But that is a significant bottleneck that the defense department or war department is looking to go unlock and is leaning on a Hadrian for a wide variety of user programs, both directly as Hadrian as a contractor as well as like co bidders alongside other neo primes. And so I think that when I think about like you know, the way that hadrian was interpreted Q1, Q2 last year, people were squinting it they're like man, these economics have only turned in the last quarter. Isn't this just a back end vendor that doesn't have a ton of upside? From my like insider perspective having watched it for five years, I'm like dude, this is the type of business where once the economics turn a corner, they don't unturn a corner. You know what I mean? It only gets easier from here. We finally got to fucking positive. We're going to a 20% margin, 40% margin, 60% margin. And it's like, you know, accumulating advantages like materials get easier, the factories get easier and the states want to send the stuff. It's just like, you know, you're rocking and rolling. But like when people look at like a SaaS business, they don't appreciate that. Like yeah, in like hardware, especially when you're producing something that is like, kind of a commodity, there's sort of like semi infinite demand. There's like, not semi infinite demand for databricks. You know what I mean? Like, you know, the scale of the market is not nearly as large. And Ollie would put, hey, sorry, we're obviously investors of data. Hey. Also, T Rowe Prices. T Row Price is smart enough to be in both databricks and Hadrian. You know, to be clear, big databricks fan. But at the end of the day, the amount we spend on metal is more than. I don't probably really know what databricks does, but, like, whatever they do, the. The amount we spend on metal is more than whatever we spend on data. Well, reflect on the AI Boom.

And explain what is the actual flow of where the heat goes, how it's moved around. Yeah, absolutely. So pretty much every single electron that goes into a data center gets turned into heat. Yeah. Comes right into these chips. They generate a huge amount of heat. So now when we're talking gigawatt scale. This is a gigawatt worth of heat. Yeah. We talked about there's a bath house in New York called Bath House and they originally would heat the baths with via bitcoin mining. There's so much heat coming off of it. Yeah. And racks used to be kind of in this like 5 to 20 kilowatt per rack. Now we've jumped up to 120 kilowatt per rack. The Vera Rubin coming will be 600 kilowatts per rack and they're trending towards a megawatt in a rack. Okay. So when you think of how much power that is, a megawatts 1,000 homes consumption. Yeah. And putting that in a rack. Yeah. And then all gets turned into heat. So you have to move that the most efficient way possible. And today 20 to 30% of your energy is going towards cooling. That is a OPEX constraint, that is a thermal constraint. And it's just you're not generating revenue with that. So we're trying to shift that and we reduce that at a minimum of by 25% energy consumption on the cooling side. Now you can have more headroom that you're using towards compute. Yeah. And what's the material, what's the substrate for extracting the heat? Air, water, Something else. Yeah. So we interface with the existing systems that are there. So we integrate with the glycol loops. That go to the chip level, to the CDU side of it. But, but inside our actual system we. Are using supercritical CO2. So we're running a high speed compressor that was developed in house by our team. We have a huge amount of history from SpaceX Rocket Lab. About a third of our team comes from there and we've really designed this from the ground up. Our first one we came up and running in eight months with a four person team, ran it at 30,000 rpm. The next system will be coming together in Q2 here and yeah, we're using supercritical CO2 due to the high density. Of the high density. So. So it can absorb the heat. It absorbs the energy, it heats up and then you move it somewhere else. Yeah, we remove it, we vent it to ambient. But why we're calling this a heat. Processing unit is because today we view. Heat as a liability and as a constraint. But heat is energy and it's an asset. And so we're building the platform that allows you to remove that heat from your system as efficiently as possible, and. It opens the door for future use cases of heat reuse. Sure. Yeah, I want to talk to you about that, because I've seen some of the hyperscalers have put out statements saying that there is waste heat from our data centers, but we're going to be able to pipe it into the local community, basically give everyone free heat in their homes. That sounds really good, as long as I guess it's clean air, but it seems like a good use. What does it take to actually.

How did everything lead up to your post which went mega viral? Yeah, first of all, not a court, quasi governmental organization. And let me give you a little bit of background. So in Italy, there was concern by a bunch of the football clubs, so the soccer clubs in Italy, about online piracy of the matches that were there. And in response to that, the Italian Parliament basically designated a quasi governmental organization called agicom, that they would have the ability to essentially allow any media company executive to put any website they didn't like on a list. And then initially just the ISPs in Italy had 30 minutes to block access to that website. But they then amended the law to be able to include other companies, including Cloudflare, but also folks like Amazon, Google, Microsoft, anyone that is doing anything that is cloud related, they have gotten swept up in this. And so the requirement was that when a website was put on this list, that we would have 30 minutes to remove it globally. In other words, this small group of media executives got to choose what you could watch in the United States. And we already saw significant exposure of this beyond just illegal streaming, where we saw political content being removed. They accidentally blocked all of Google Drive at one point, they accidentally blocked all of Cloudflare's network at one point, which broke the Italian Internet. So they turned that off pretty quickly. And so we had been in litigation in Italy to basically say, this doesn't make any sense. And what particularly doesn't make sense is we hate the illegal streamers. They cost us money, we don't make any money off of them. They waste our bandwidth. They, they take up resources that we could have for paying customers. And so we have a huge team that is trying to shut them down. We actually won a court decision right before Christmas that said that we could get all of the internal documents on how this commission was created, what its rules were, everything else. And then probably just coincidentally, of course, immediately after Christmas, the first meeting they had, they imposed a $17 million fine on, on us and said that it will continue to escalate if we don't pay it and register for this scheme and commit to let them censor, censor the Internet, which obviously we're not going to do. That, by the way, is 2x our revenue. In Italy, they have interpreted the law as saying that they can charge up to 2% of global revenue for any company that they find. So again, the insanity here is pretty high. And yet that's not even what the law says. The law just simply says it can be from tens of thousands. And in fact, there's parts of the law that they relied on that are so old that they were actually quoted in lira. So it was back before even the EU existed. To give you some sense of how crazy this is, even the EU has said that this law, they have significant concerns over this law. And so we're in a strange situation where, you know, we're getting a lot of pressure to literally just turn Italy off and not let them connect to cloudflare's network, which would, you know, unfortunately, everyone saw a few months ago when we had an outage, how big of an issue that is. That doesn't seem right. You know, putting your tinfoil hat on. What is there some. Do you think there's some local group that wants your Italy business that says, like, hey, that's like, what is it? Purely censorship, own goal? I think there's. I think that there is. So I think, first of all, it's a bunch of, you know, older, you know, football owners who don't understand how the Internet works, who just are saying, you know, piracy is a problem, and instead of doing what most of the leagues around the rest of the world do with us, which is work with us in order to identify what those illegal streams are, and then we not only take them down, but we actually put up a page that's an advertisement for the. For the correct stream in its place. Instead, they were just like, you know, we're going to just, you know, be, be, be. We're going to just make it so that you have to take these things offline. Damn the consequences. I think there are other people inside of Italy that see this as an ability for them to be able to control some political content that they may not like. Obviously, Italy is a contentious political state, and being able to shut things you don't like off the Internet is a very powerful political tool. So I think that's the tinfoil hat hat side. But I think mostly this is just thuggish behavior by a bunch of people who don't understand how the Internet works.

Obviously they have body cams and things like that, but having that extra angle, I think is important. 100%. Yeah. How does deployment work? I mean, imagine a 911 call comes in, an address is getting collected, and then at some point, does someone type the address, hit go. And then the drone can just go from an address and route itself. Or is there a pilot that's firing it up? Like how autonomous is the actual deployment? Deployment to get from the base station to an address? Yep. So we grab addresses from Computer Aided dispatch or other pieces of software. Computer Aided Dispatch, what does that mean? Basically, that's the software that dispatchers use to deploy ground units of various kinds. Got it. Okay. But when someone calls 9.1, the GPS coordinate of that phone hits cat. Okay. Interesting. Yes. So we'll grab that GPS coordinate, then we find the nearest drone to the emergency with sufficient battery state of charge to actually get there. The doors on our recharging pods automatically open. We launch an aircraft, we plan a path from its launch site to the emergency, avoiding manned air traffic, no fly zones, et cetera. And then when the drone arrives, it can engage in some number of pre programmed on arrival behavior. Like orbiting the GPS coordinate, pointing its. Camera in a certain direction and saying something, sensing itself. Or it can then be taken over by dispatcher or tele operator. The drone can be repositioned, camera can be moved around. Maybe that teleoperator does use the drone to communicate to someone. Or they might decide to deliver emergency medical payload like Narcan, a defibrillator, personal flotation device, et cetera. How does it. How do these takeoff points, charging locations actually.

Responder though is fully injection molded. Okay, got it. And so walk me through the supply chain. What are you making? What is America good at making? Or do we at least have a good drone motor company? I've been hearing that drone motors in particular are difficult to make in America. Or at least a lot of the companies sort of offshored or left or went out of business. Yes. So Listen, I mean DJI controls 90% of the global drone market. They're near. It's really a monopoly. I, I think this isn't so well understood. The drone industry is a monopoly owned by dji. Autel is their nearest competitor. They're another Chinese drone manufacturer. They have about 5% of the market. All foreign drones were just federally banned. I don't know if you guys have been tracking this, but right before Christmas. Yeah. Wait, but only for government buyers or all consumers. All new foreign drones have just been banned from entering the country. Okay, so dji, so if I go. To Best Buy right now, there might be a DJI Mavic 3 on the shelf, but there's not going to be any new ones once they go out of stock. Exactly. Basically like the next Mavic won't be allowed into the country. The next Matrice series drone will be allowed into the country. They can hypothetically continue importing their current in market drones, but in reality even those imports are being slowed down very much at the borders. Okay, so there's this huge need for, you know, a DJI of the west or like a leading drone manufacturer for the free world. Yes. And that's the organization that we want to be. Yeah. I mention all of this though, because. Wait, so what does that mean though? Does that mean you start selling these to the public consumer? I want to make consumer drive. I think over time, yes, we probably do start engaging in those types of businesses, you know, consumers a little far from our, you know, current space. Yeah. But if it helps you get to scale, bring down costs. Yeah, there's a potentially good feedback loop, I think. I think though, like private security, industrial automation, homeland security, et cetera would be like more, more natural, immediate new verticals for us. But yeah, I mean, over time we want to be. That was underreported. I didn't, I didn't catch that. They were. I remember, I remember some news around foreign drones within purchasing from the government. I didn't clock. Yeah, walk us through some of the history there. There were some local bans, some state level bans, some individual agencies that might say, hey, we're not gonna approve these. You heard about, you know, you can't use TikTok in Langley. That seemed obvious, but now it's grown a lot. What was the actual history of the rollout? Who's been driving this in Washington? Yeah. So the progression here was, number one, the federal government banned itself from purchasing Chinese drones. Then some states started passing similar legislation. Florida, for example, banned their public safety agencies from acquiring new Chinese systems. About a dozen states have followed suit. And the new thing is what I just articulated, you know, the government saying, you know what? No more new foreign drones are allowed into this country, period, regardless of application. Yeah, Walk me through the geopolitical risk of foreign drones.

Diet Coke. Okay. I think we're flying this one. Okay. This is amazing. Yeah, I couldn't fly either, but yeah, I think the indoor drone is maybe the right. Yeah, let's. We got the camera view back here. Oh, we got the camera view up here too. Okay. Oh, wow. It's fed in and everything. Nice. Okay. Yeah, let's fly this around. This sounds great. What is happening? This thing would definitely get me to comply if it was flying around. This is crazy. There we go. So we'll show off a couple of functions. Okay. Yeah, show us some stuff. You know, right now we're in a GPS denied environment. Okay. Because, you know, we won't be able. To see any satellites through a metal roof like this. Sure, sure, sure. The drone is utilizing its onboard cameras running visual inertial odometry algorithms. Yo, yo. Yeah. In order to localize. And it's also using some onboard lidars to do the same. Yeah. The aircraft is streaming back 4K video and thermal imaging information. Okay. So, yeah, Dimitri, you want to. You want to maximize thermal. Really? Oh, the thermal. Oh, wow. Those are all of our thermal signatures. This is go. Wow. And those sensors are mounted on a payload that can rotate a full 180 degrees so it can look straight up. Okay. Also straight down, which is pretty operationally useful. We also have some lights that are built into our camera pod. Dimitri, you want to hit those? Whoa. So that's a blue light for economy flashbang. You can barely see the. Oh, you can strobe it too. And they both have strobe functions. Okay. Yeah, yeah, yeah, yeah. So that's. That's all. Wow, that's fantastic. You can see that kind of articulation. Oh, yeah, it goes up and down. There you go. Great. Dimitri, you want to land it and then I can give it a quick call. Yeah, that's amazing. Give it a quick call. Yeah, it really. It really is like a creature. Yeah, yeah, the way. The way that it has some gusto to it. It's good. So the airframe has a cell phone number. Oh, wait, really? Oh, so you can just call from an actual phone. Okay, don't. Don't dox that phone number. You're ringing off the hook. One, one, one, two. Wow. Yeah. Okay. This is how, you know hostage negotiations are happening around the country. Just call the drone. That's so simple. I mean. Yeah, it was probably just. It was the right solution. Yeah, simple work off the default rails. That's amazing. How on earth did hostage negotiations. If you want to turn it off and then there's one more thing I'll. Show off completely, which is Turtle mode. So it's a very durable drone. Okay. Yeah. If it ever does crash and lands on its back, it can. Can self. Right. So you'll see that they can self. Right. Oh, there you go. Wow. Turtle mode. Yeah, that makes sense. That's very cool. Okay. That is very cool. Yeah. Thank you. How. Yeah. You already questioned Jordan.

This one. Okay. Okay. This is amazing. Yeah, I couldn't fly. Either, but, Yeah, I think the. The indoor drone is maybe the Right. Yeah, let's. We got the camera view back here. Oh, we got the camera. View up here too. Okay. Oh, wow. It's fed in and everything. Nice. Yeah. Let's fly this around. This sounds great. What is happening? This thing would definitely get me to comply if it was flying around. This is crazy. There we go. So we'll. We'll show off a couple of functions. Okay. Yeah, show us some stuff. You know, right now we're in a GPS den environment. Okay. You know, we won't be able to see any satellites through a metal roof, like. Sure, sure, sure. The drone is utilizing its onboard cameras, running visual inertial odometry algorithms. Yo, yo. Yeah. In order to localize. And it's also using some onboard lidars to do the same. Yeah. The aircraft is streaming back 4K video and thermal imaging information. Okay. So, yeah, Dimitri, you want to. You want to maximize thermal. Really? Oh, the thermal. Oh, wow. Those are all of our thermal signatures. This is very cool. There we go.

New foreign drones are allowed into this country, period, regardless of application. Yeah, walk me through the geopolitical risk of foreign drones. At one point I had a DJI Air 2 or something, this little mini 49, what was it, 490 gram or something like that. And it was sort of like collecting dust in a drawer somewhere. And I was thinking, thinking like, okay, if somebody hacked this and really tried to fly it out of its little case and out of the drawer and then out of my closet and then out in my house, like, what is it going to do? Is it that dangerous? Walk through the bag. I've always looked at this as like, you rewind and you know, someone in China, some entrepreneur in China is like, I'm going to make a hit consumer product in America that will be able to give you a real time map of everything going on. And there's going to be so many drones that people won't even notice when a drone is just hanging around some strategic asset or anything. So is that the risk? Surveillance? I would say there are three primary risk vectors. Risk factor number one is that DJI drones just stream back video, thermal imaging information, GPS coordinates, altitudes, etc. To China, which. Going straight to the DJI cloud. Yeah, 100%. Yeah, 100%. So that's, you know, that's the first big like tranche of risk. The next tranche of risk is large. Look at what's happening in Ukraine. Like drones, specifically DJI drones and other aircraft that are similar are being deployed to incredible effect in the context of warfare and they're being consumed at insane rates. If America wanted to engage in adopting those types of drone tactics, we would need to produce many hundreds of thousands of drones a month. And we just do not have that industrial capacity in this country. If you ban foreign drones though, guess what happens? That industrial capacity gets built up because the domestic market starts to be served by scaled American drone companies. You bootstrap wartime demand with consumer demand. Today there's enthusiasts that want to be able to get footage of their ski trip or their hiking or any number of use cases. 100%. And then the third tranche of risk is what you articulated. I would say though, when you start contemplating systems like that, you know, that risk starts to feel much more serious. Yeah, because it might be able to take off at any time. It's not from a recharging pod. From a recharging pod. And so yeah, I was surprised. What was the operation in Ukraine where they parked next to the air base, took off that like, I still feel like that risk. People are not taking it seriously enough about that kind of event happening, like on American soil. What was a spider web operation? Spider web. Sounds right. I forget what it was called, but yeah.

Salesforce Just generate B2B SaaS product ideas constantly. So funny. X has this.

Okay, last question on the fine for me, and then I want to move on to AI since we have you here. What's the result of the fine? Did you just pay it or are you debating it? No, no, no. So we're. We're challenging Italian law because it's. Because it's. Italy doesn't have any. Any mechanism to stay this. I would imagine that there are going to be some. Some pretty pointed phone calls. Sure. From senior U.S. officials, senior Italian officials saying, like, cut this out. Yeah. In addition, you know, we're considering various options. So we may shut down our free service in Italy, which, again, is unfortunate. It'll hurt a bunch of developers there. But we can't. We can't do charity for places that. Again, the other thing that's coming up is the Milan Cortina Olympics, where we provide tens of millions of dollars of free cybersecurity services. I was actually a personal guest of the former president of the IOC to the Paris Games, being. Because we provided the information that took the terrorist attack that almost shut down the Games and allowed them to arrest 90% of the terrorists beforehand. We helped stop massive denial of service attacks, again for free, that were launched from Russia, which is trying to completely discredit the Olympics because of the doping scandals and bans that they've faced. And so, again, I really believe in the Olympics. I really want the Olympics to succeed. But again, it seems wrong for us to be providing tens of millions of dollars of free cybersecurity for a showcase event in a country that's just acting completely insane. Yeah, that makes sense.

Well, we're, we are incredibly bullish and we use it internally. We use it across all of our teams. We actually had our company wide kickoff today and our CTO challenged every one of our teams to say how can they use AI more? And it's really quite incredible what, what it's done. What I will say though is we're, we're definitely in some places for some AI companies hitting some sort of a limit, it seems, in what they're able to do. And the exception to that is, I think, has been Google Gemini has continued to outperform the rest of the market. And, and I think that the answer to why that's the case is actually not about the chips. Obviously they've designed their own chips. I don't think it's about the people. They have incredibly smart people. But so does Anthropic, so does Open. I think it's actually about the data. And we are one of the few companies that actually has a view into this. And so we haven't shared this very publicly, but I guess, you know, no time like the present. And so how much more of the web would you guess that Google sees and is able to train their AI systems on versus open AI? Yeah, I'd probably say 50% more. Yeah. The answer is actually 3.2 times more. Wow. Which is insane. Right? That means that for every one page that OpenAI says Google is seeing, you know, 3.2 pages. So there's just so much more data that's going into it. And again, opening is the next closest. After that, Microsoft sees Google sees 4.8 times more of the web than Microsoft. They see, similar to what they see with Anthropic as well. And it just drops off from there. So what I worry about is that because Google has this unique access to the web that nobody else has. Yeah. That the game might just go to them. Because I think that at the end of the day, whoever has the most data wins. In the era of AI, I think what a lot of these companies are seeing is they're hitting kind of a data limitation. And one of the things we're really thinking about is how can we make sure that we level the playing field. Either bring Google back to where everyone else is, don't let them leverage search in order to get a unique advantage in AI, or how do we lift everyone else up to the same place where Google is, make sure that everybody has access to, to that same data. If we don't create a level playing field in terms of the data, I do feel like There's a real concern that Google is going to run away with this and no one else will catch them. Interesting.

Was this a surprise? How did everything lead up to your post which went mega viral? Yeah, first of all, not a court, quasi governmental organization. And let me give you a little bit of background. So in Italy, there was concern by a bunch of the football clubs, so the soccer clubs in Italy, about online piracy of the matches that were there. And in response to that, the Italian Parliament basically designated a quasi governmental organization called agicom, that they would have the ability to essentially allow any media company executive to put any website they didn't like on a list. And then initially just the ISPs in Italy had 30 minutes to block access to that website. But they then amended the law to be able to include other companies, including Cloudflare, but also folks like Amazon, Google, Microsoft, anyone that is doing anything that is cloud related, they have gotten swept up in this. And so the requirement was that when a website was put on this list, that we would have 30 minutes to remove it globally. In other words, this small group of media executives got to choose what you could watch in the United States. And we already saw significant exposure of this beyond just illegal streaming, where we saw political content being removed. They accidentally blocked all of Google Drive at one point, they accidentally blocked all of Cloudflare's network at one point, which broke the Italian Internet. So they turned that off pretty quickly. And so we had been in litigation in Italy to basically say, this doesn't make any sense. And what particularly doesn't make sense is we hate the illegal streamers. They cost us money, we don't make any money off of them. They waste our bandwidth. They, they take up resources that we could have for paying customers. And so we have a huge team that is trying to shut them down. We actually won a court decision right before Christmas that said that we could get all of the internal documents on how this commission was created, what its rules were, everything else. And then probably just coincidentally, of course, immediately after Christmas, the first meeting they had, they imposed a $17 million fine on, on us and said that it will continue to escalate if we don't pay it and register for this scheme and commit to let them censor, censor the Internet, which obviously we're not going to do. That, by the way, is 2x our revenue. In Italy, they have interpreted the law as saying that they can charge up to 2% of global revenue for any company that they find. So again, the insanity here is pretty high. And yet that's not even what the law says. The law just simply says it can be from tens of thousands and in fact, there's parts of the law that they relied on that are so old that they were actually quoted in lira. So it was back before even the EU existed. To give you some sense of how crazy this is, even the EU has said that this law, they have significant concerns over this law. And so we're in a strange situation where, you know, we're getting a lot of pressure to literally just turn Italy off and not let them connect to cloudflare's network, which would, you know, unfortunately, everyone saw a few months ago when we had an outage, how big of an issue that is. That doesn't seem right. You know, putting your tinfoil hat on. What is there some. Do you think there's some local group that wants your Italy business that says, like, hey, that's like, what is it? Purely censorship, own goal? I think there's. I think that there is. So I think, first of all, it's a bunch of, you know, older, you know, football owners who don't understand how the Internet works, who just are saying, you know, piracy is a problem. And instead of doing what most of the leagues around the rest of the world do with us, which is work with us in order to identify what those illegal streams are, and then we not only take them down, but we actually put up a page that's an advertisement for the. For the correct stream in its place. Instead, they were just like, you know, we're going to just, you know, be, be, be. We're going to just make it so that you have to take these things offline. Damn the consequences. I think there are other people inside of Italy that see this as an ability for them to be able to control some political content that they may not like. Obviously, Italy is a contentious political state, and being able to shut things you don't like off the Internet is a very powerful political tool. So I think that's the tinfoil hat, hat side. But I think mostly this is just thuggish behavior by a bunch of people who don't understand how the Internet.

To the SANA thing, I didn't get a chance to give a take. I am extremely bullish on Americans starting to sweat more because the evidence is so clear that if you use a sauna every day, you will probably extend your health span lifespan. It's heavily, heavily studied because of how popular it's been in the Nordics for decades and decades. So very bullish on sweating. One of the things that's interesting though is that New York has like, you know, New York is like the center of consumption, right? People have tiny apartments, so they're just constantly consuming, right. Food, you know, exercise, shopping, et cetera. But I don't think it's representative of the way that the Americans will like sweat broadly because you can get a sauna for like a couple grand. And so all these bath houses are like a few hundred dollars. And so I think for some people they want the social experience. Whereas for me, I don't like the, I'm not really like that into the like. You don't like talking in the sauna? I do like talking in the sauna. We've obviously had our sauna wars. Our sauna wars. I guess we were talking too loudly in the sauna the other day. Cause this guy just absolutely, absolutely snapped. He was a bit of an angry elf. But anyways, like that most, most consumers are going to be looking like, I can go and buy a sauna for. $2,000 and I have space for it because I have a two car garage and a backyard and maybe a pool. And like for the average American, that has a little bit. Last time I lived in an apartment, this was like six or so years ago. Sure, I had a whole cold plunge that I snuck into my apartment. Sauna just. I had a two bedroom loft. Yeah, sauna too. No, no, I had two. I had a two bedroom. I had a two bedroom loft and one of them, I just put a, it was just like cold plunge on a wooden floor. That's insane. And I had a sauna. Of course, I don't think you're allowed to bring like a mini swimming pool. If it leaks, you're gonna destroy the whole. I actually, I did. They did eventually tell me I had to get rid of it because there was a leak in the building. And they went in to look and they were like, it didn't have anything to do with my hole plunge or whatever. But okay, so if you were, if you were talking to Brian Johnson, you would say, skip the physical institution that is the sauna. Start a line of saunas that can be delivered on a truck to homes. Yeah, maybe. I mean, there's a company called Plunge that scaled insanely quickly. That company's done really well, I think over nine figures of revenue off the cold plunge boom. But yeah, the main thing you have to understand is for other ship in these companies, you have to go, I think into dense areas where people have a lot of space to have saunas. Because a lot of people are going to look and say, either have one in my gym or I can. You know, people can go and just. Even if they don't have the two grand, you can use a firm and like you're effectively paying a couple hundred bucks a month for like a private experience. Yeah, we'll see. We'll see. Gabe says the big sweat lobby is making moves. I like it, but yeah, I just, I've remained so bullish on this trend because it's just passive. Right. You don't have to like work up like the motivation to sweat in a. Sure, sure. So you get a lot of the benefits of exercise, but you're not like, I gotta force myself to go for a run. It's just like, get in the box. Get in the box. The label box. Yeah, label.

Yeah, ran it at 30,000 RPM. The next system will be coming together in Q2 here. And yeah, we're using supercritical CO2 due to the high density of the density. So it can absorb the heat. It absorbs the energy, it heats up and then you move it somewhere else. Yeah, we remove it, we vent it to ambient. But why we're calling this a heat processing unit is because today we view heat as a liability and as a constraint. But heat is energy and it's an asset. And so we're building the plan platform that allows you to remove that heat from your system as efficiently as possible and it opens the door for future use cases of heat reuse. Sure. Yeah, I want to talk to you about that because I've seen some of the hyperscalers have put out statements saying that there is waste heat from our data centers, but we're going to be able to pipe it into the local community, basically give everyone free heat in their homes. And that sounds really good, as long as I guess it's clean air. But it seems like a good use. What does it take to actually go from a data center in the middle of nowhere to a data center that's closer to a bunch of homes to get the energy, get the waste heat there, and maybe just warm up someone's house during the winter? Yeah, I think Europe will be more ahead on us just due to the proximity of those data centers to urban locations. This is just smaller conference, smaller countries. Right. So where we see also a great opportunity is to do waste heat back to electricity. Oh, interesting. And actually supply that back to the data center. So in your colder regions at night, during the winter, you'll have a big enough delta T where you can actually do that with our system. Okay. So that becomes now additional headroom that you can use towards compute as well as then. I kind of half seriously half joke that right now data centers are not in my backyard. That's the vibe that everyone has. But what if we built communities around these and you have free utilities if you live there? That would be huge. I think people would really like. We were talking about this yesterday. Just like if somebody's, you know, you hear a data center coming into your backyard anywhere in your town, there's no, there's no. For a lot of people, there's not going to be direct upside. Correct. Just because even if it's not there, I can still use all the different AI tools. I'm not limited. Just because there's no data center even in my state, I like that. Talk about discovering the opportunity, the journey, to get it.

There's an announcement from Ashley Vance about OpenAI and Sam Altman backing a new bold take on fusing humans and machines. It's called Merge Labs. We've heard about this before. We talked to Rob Toews on the show about BCI and brain computer interfaces potentially being a big trend for this year. Obviously, neuralink has been cooking for a number of years. Sam Altman also has his bet with Merge Labs and they now have $252 million in the bank and an all Star, All Star crew and superpowers. And remember, Sam Altman wrote in 2017 a piece called the Merge. I'll read in short, a few paragraphs from it. He said, more important than that, unless we destroy ourselves first, superhuman AI is going to happen. Genetic enhancement is going to happen. Brain machine interfaces are going to happen. It is a failure of human imagination and human arrogance to assume that we will never build things smarter than ourselves. The Merge can take a lot of forms. We could plug electrodes into our brains, or we could all just become really close friends with a chatbot. But I think Emerge is probably our best case scenario of two different species. Both want the same thing and only one can have it. In this case, to be the dominant species on the planet and beyond. They're going to have a conflict. Imagine if dolphins. Imagine if Benioff has been working with the dolphins to secretly help them merge and they're like in a. In a crazy dolphin human race to see who can merge first because sent. Dolphins, Neuralinks, dolphins, salesforce just like generate B2B SaaS product ideas constantly.

Tactical nuke incoming. Tactical nuke. Oh, no. This is me doing barbells for my barbell strategy. So I'm going to just keep doing my barbells work, too. Keep repping it out. Keep repping the barbells, boys. Goodbye.

Glaze. Double glaze triple Glaze double kill. Five color. Raw. Win. Team death match. Win or experts. Triple. Let's just roll. Market clearing order inbound. Growing slope. You're surrounded by Jonah Forte. Strike 1. Strike 2. Activate. Go to retriever mode. Market clearing order inbound. Five. Journalists on the horizon. Foreign. You're watching TVPN. Today is Thursday, January 15, 2026. We are live from the TBPN Ultradome. The temple of technology, the fortress of finance, the capital of capital. Jordy has a new set of animations. The soundboard is growing in complexity. Every day there's a horse that walks all the way across the screen. And yes, guests can see that when they are calling in to. To be clear. To be clear, if we flashbang a guest, their entire screen is going white. Yes, along with yours, along with ours. We're all in it together. Yes. Yes. But it's somebody's birthday. It's Bobby. Bobby's birthday. Oh, happy birthday. Happy birthday. Anyone who's thinking about getting a gift for Bobby, get him ram, get him ramp. I want every single person. Time is money. Save both easy use corporate cards, bill pay, accounting, and a whole lot more all in one place. A little hot on the soundboard today. That's right. We're feeling good. Yeah. We have a. We have a massive lineup. We have six CEOs joining the stream today. We have MongoDB, Cloudflare, Varda, Skilled Carmen Industries and Brink Drones. We're going to talk about the DJI ban on drones. We gotta add Matthew, we gotta add Blake Resnick to the LINEAR lineup today. Linear, of course, meet the system for modern software development. LINEAR is a purpose built tool for planning and building products. So in the news today, Tesla is sharing. They made a ton of progress on their lithium refinery. And then simultaneously AWS did a deal with Rio Tinto to buy a bunch of copper. Not that much copper. We'll get into how much, but they're sort of underwriting a new. A new chemical process for refining copper. And it's all just sort of interesting that, you know, Marc Andreessen published the software is eating the world story back in 2011. And I think even the folks in tech who took that seriously were saying, oh, yeah, of course. Well, that just means that I didn't take it seriously. I took it literally. Yeah, but the people that took it seriously were thinking, okay, well, you're going past just the first wave of the Internet, the newspapers, on websites, that type of stuff. And yes, we're going to get the Ubers. We're going to get more and more tech companies that are consumer facing or business facing. And you might see some transformation in legal, legal services, financial services, logistics, airlines will be using apps to let you book. But we're now in the era where the tech companies are starting to vertically integrate so deep that they own the mines and they own the refineries. And it's not just that they're actually building software for the mining technology. Eating the world. Yeah, yeah. And it's a new layer of a vertical integration that sort of just crept up on me because it wasn't an issue until the AI boom really necessitated massive industrial scale build outs, new industrial policy, which admittedly can't turn on a dime. But we're now two, three years into the ChatGPT boom, into the AI boom. The data center buildouts are getting bigger. We're seeing bottlenecks all over the place, whether it's chip shortages or energy shortages. And so, you know, the companies like Tesla aws, a lot of other folks are really looking deep into the supply chain, all the way into the ground, into literally eating the world. Because I see mining as sort of terraforming. I see it in some ways as literally eating the world. Like you said before, we move on. Let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and medium sized businesses. So Amazon's buying the first new copper produced in America in over a decade. It's a very exciting project. And Tesla now has a Texas facility that can convert raw or directly into battery grade lithium hydroxide. It's a more efficient process. We can get into that. Tesla originally broke ground on this lithium refinery operation in May of 2023. It feels like they were sort of quiet about it, but now they're getting a lot louder. Obviously the narrative around China controlling 90% of rare earth extraction and rare earth elements has been in the news and this is sort of their response. That shot with the cybertruck driving, it's good, it's good. There's a voiceover. We should, we should watch that video in a little bit more detail. Can we pull it up with some audio when we have a second? So this facility should deliver is the. First spodumene to lithium hydroxide refinery in North America. We're deploying a new technology platform that is inherently much more environmentally friendly and cleaner. It's a simpler process. It's not that big of a facility. And this should be able to create enough lithium for 500,000 vehicles a year. EVs a year, maybe a million a year. I've heard Now Tesla's shipping 1.65 million, so this won't be 100%, but you copy paste this two, three times and you got enough coverage for all for the entire Tesla fleet. Take it through a kiln and cooler. From there we take it through an alkaline leech, Additional purification steps, take it into crystallization and produce battery grade lithium hydroxide. Our process is more sustainable than traditional methods and eliminates hazardous byproducts and instead produces a co product named Analzyme used in concrete mixes. From breaking ground in 2023 to running. Rot through the kiln in 2024 to. Start a full integrated plant startup. Looks so tired. He's just like, yeah, it's been, it's been great working for Elon. Hi. I love it. Yeah, it's been relatively relaxed here at the site. We sleep in the factory. In this case it's just dirt. But sleeping in the dirt, surprisingly comfortable. This refinery really enables us to have access to the critical minerals for energy storage for battery manufacturing. And it enables us to accelerate Tesla's mission by regionalizing supply chains for battery minerals and materials, by providing jobs, by cutting emissions from the transportation network that's required for those supply chains. It really allows us to usher in energy independence for North America. Who would have thought that Texas would be the home of EV domination? I know, narrative violation. California really dropped the ball. So Tesla shipping 1.65 million, that was a little lower than the previous year. I think they were up at 1.7 million. But you get a couple of those facilities and it should be enough to cover everything that they need. There's also, there's been a whole bunch of news around rare earth minerals generally. Last year, a company called Iconic or Ionic Mineral Technologies made a large discovery of 16, 16 different types of minerals in Utah late last year. Year, this is in December. And that was great. As we do. Yeah, yeah, yeah. It has been funny. We have been rumors about this, but they found a huge deposit of all these different minerals. Obviously, everyone's worried about China controlling 90% of the supply of rare earths, but we need to actually get these minerals out of the ground, refine them. And so that's where projects like that come into play. Amazon's partnership with Rio Tinto is a little bit different. They're not fully vertically integrated like Tesla is, but they are partnering with Rio Tinto. And Rio Tinto had been working on a new method of refining low grade copper deposits. So basically like there's a fair amount of copper in the ground, but there's a lot of dirt, a lot of other stuff that you have to process out that can be very expensive. But because of the data center expansion exploding, the price of copper has, I think, nearly doubled in the past two years. And so copper is not the main ingredient to an AI data center, a token factory. But it is important because the biggest data centers use tens of thousands of metric tons of copper to move electricity around. So you need wires, there's copper and circuit boards. There's wire in the, there's copper in the transformers that move electricity around. And there's tons of miscellaneous electrical components all over a data center that need copper. So this particular AWS Rio Tinto deal is only 1400 metric tons over four years. I don't even think that's for a single AWS data center. But it's allowing Rio Tinto to underwrite this sort of risky new process methodology that if it works and they get the price down on this new process, then they can apply that to tons more copper reserves that's locked up in, you know, messy, messy ore that otherwise would be uneconomical to refine. So 70% of the global supply of copper is currently locked away in ore that's not economical to refine into actual copper right now. So if this new process technology works, you effectively triple the amount of copper. You triple the supply. And so price should fall. It's doubled. You triple the supply, maybe price comes down. Good news for anyone who's in the. Copper market trying to acquire Rio Tinto. Some quick backstory is one of the world's oldest, largest and oldest mining operate corporations with a history that spans a over 150 years. Name was inspired by the Rio Tinto in southwestern Spain. But the founding again goes back to the mid 19th century. Spanish government was facing financial crisis and they started selling off their older mines. And so crazy story of just like a very old company continuing to be a key player in an entirely new tech trend. Yeah, yeah. Rio Tinto has been in the news a ton also for lithium ion. They do some stuff there. They had one investment that I think they wrote down, then they spun another one up. They've been back and forth. Let's tell you about FIN AI, the number one AI agent for customer service. If you want AI to handle your customer support, go to FIN AI. So X freeze broke the Texas Lithium Ion lithium refinery down a little bit more. It's the first in North America to convert the raw or into battery grade Lithium hydroxide, skipping intermediate steps in the long term, probably more economical. It went from groundbreaking to first production in just 19 months, an unheard of timeline at this scale. The process is cleaner, no hazardous waste, a useful byproduct that can be turned into concrete. The single refinery can supply lithium for over 500,000 EVs per year and directly challenges China's 60% grip on global lithium refining. Elon chimed in and said, it sounded like I saw another number that was maybe closer to a million, but either way, you do two or three of these and you're good for Tesla's supply chain at least. Maybe they sell it to other folks as well and what comes out of this will actually be sent to another company and then back to Tesla. But they are vertically integrating. Chamath Polihopitia called it. He predicted this. He says, as we predicted in our annual predictions episode at the start of the year, unless someone shows up with superconductivity or carbon nanotubes, copper is the only game in town. And AI is a huge demand driver for a very under resourced material. So he's taken a victory lap with his thesis on copper. Pretty, pretty good call. Pretty cool that he has this clip here. So in other news, let's tell you about graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And speaking of AI, there is turmoil in the trade wars, in the talent wars in. Barrett is back. Barrett is back. So back. So this is from Kylie Robison over at Core Memory. She says breaking thinking. Can we just give it up for Kylie for a second? Potential scoop Athlete of the year. Huge. Putting up some crazy scoops. Crazy scoops. She had the Anthropics XAI drama last week. She's on an absolute tear. She's on an absolute tear. Yes, so she says. Breaking Thinking Machines has terminated its cto Barrett Zoff due to unethical conduct, according to two sources familiar with the matter. CEO Mira Muradi announced the news in all hands with employees today. Sumit Chintala will be taking over as CEO and Mira posted as well confirming the news. She said, we have parted ways with Barrett. Sumit will be taking the new CTO of Thinking Machines role. He is a brilliant and seasoned leader who has made important contributions to the AI field for over a decade and he has been a major contributor to our team. We could not be more excited to to have him take on this new responsibility. And Alex Heath actually has some new news. Yeah, 30 minutes ago. He says more Thinking Machine employees are in the process of joining OpenAI after three of the startups co founders rejoined yesterday. Yeah, of course, the Thinking Machine co founders had previously been at OpenAI. But anyway, somewhat of a. Not great. Not great. The, I think potentially more controversial news was that Thinking Machines has branded squat racks at the office. Yes. Ryan Peterson posted a photo. Ryan posted this. A lot of people, a lot of people took this as somewhat of a red flag. Right. People say, you know, the sort of common guidance is don't make merch until you're generating some real revenue. Right. And so if you take that further, it's like, maybe you shouldn't have. What was Ryan doing to get this photo? It seems like. I think he just walked by. He's going journalist mode. Here, you see this? He's like, he's not. So if you zoom in, you can see these things look fantastic. Well, well, Ryan, you're outside. You're outside the Thinking Machines branded gym. Yeah, I'm somewhat. I'm somewhat envious. These things look fantastic. I'm kind of mad that, that we didn't get the branded plates, but this coming out while losing, you know, half of your family, it has to be weird. I mean, how much did they raise? It was 2 billion at 12 billion, something like that. I mean, it's gotta be so weird to start a company and on day one, have enough money for a custom gym. That's just like unheard of. Like, you know, like normally you start your company in the garage and maybe there's a weight in the corner you can lift or kettlebell. One dumbbell. Not even two. One kettlebell or something, but to just come in and say, yes, we're taking class, hiring a massive team, bringing on six or seven co founders. Atlas was saying, like, the other red flag is, where are the 45? I think I'm gonna assume they're just not in sight. You know, like you can't see them. Right. They would be mounted lower, right. On the rack, but never change. Oh. But so funny. But, yeah, so rude. In case you forgot, Andrew Tullock left thinking machines in Q4 of last year. Zuck had been trying to poach him and offered increasing amounts of money until. And Andrew. The sense is that Andrew was like, I can't be bought. But he needed the money. He had a shopping cart filled with chrome hearts supreme and he was like, wow, my next outfit's gonna run me 500 mil. I gotta get a new job. I can't afford it. I can't afford my lifestyle. Maybe it was a case of lifestyle inflation. They talk about that. He's just like, okay, I got a new SP3 Daytona. Now I got the Valkyrie and they gave me allocation. I need some ca. I gotta get a new job. It's just not. It's just not covering the bills over here. Tyler, do you remember the final amount that Meta paid? It was like. Cause I always appreciated. There were a lot of rumors. It was in the billions. In my head. It was like. Andrew was like, yeah, I'm really honored that you would make such a big offer, Zach. A billion dollars. But unfortunately, I'm very mission aligned. I'm mission driven. There's really no price that I would take to leave the company that I started. And Zuck's like 2 billion. He's like, what happened? I think all the rumors were actually from the summer when there was like the, like all of the talent wars going on. So first there was. I think it was just one billion. And then just one. There were rumors of three and a half and that being turned down. That's a lot. But then later in the year, then he eventually. Okay, so people kind of assume that the rumor is true because he eventually made the move. Yeah. But I mean, it's not necessarily higher than three and a half. Right. Because now we're seeing more people leave. Like, why are they leaving? Yeah, yeah, yeah. You know. Yeah, it's. I mean, it's very unclear. Right? Yeah. The actual estimate was like something like the Journal had reported one and a half billion over six years. I mean, there is a risk to starting a company with six co founders. Like, that's just. That's just. That is unorthodox. Unorthodox. So some amount of churn. And they still got John Shulman, right. Who's absolute Legend. Co founder OpenAI. Yeah. Like, everyone who's still there or everyone who was there, goated. Like, they're all goaded. And it's like super hard to. One of my buddies, he's like super smart. He was trying to get a job there. It's like insanely hard. You have to be actual. Go to work there. Okay. So. But, you know, now they're leaving. It's a bit of a goat pen. Yeah. Goat farm. Yeah. I mean, Dylan Patel, really excited about this. He said, can I invest in mira's company? Goddamn. Two more goats going there. Back in February 6th of 2025. So a little under a year ago, everyone's saying Shulman, but the other is as arguable. Just is arguable. Just as if not more goat. And David Hull says I'm calling it Marathi Heavy Industries. Yeah. I mean at one point, one of my buddies who works at a big lab, he was saying at that time, thing machines has like the best team, like any of the big labs. Yeah. So how would you describe what they do? Because we've heard a number of different pitches from them, products from them, and some of them seem like this could easily make a couple billion dollars a year. Yeah. So they've shipped a bunch of blog posts, but they also, I think their only real product so far has been Tinker, which was basically fine tuning, right? Yeah. An API for fine tuning. It made it very easy. I think it was a super good product. People who've used it like really like it. Yeah. So the general focus has been enterprise and. Yeah. So ChatGPT, everyone at OpenAI has been very obvious like this is the year, this is the year they're focused on enterprise. This year I think the idea was like RL environments for specific like businesses. Yeah. Yeah. So you get a really great fine tune. I know obviously OpenAI has a similar business line that probably competes directly, but being a pure play can work out. We've seen what anthropic's done. It didn't seem like a crazy, crazy strategy. Yeah. I mean John Shulman is like one of the og like main RL guys. The team is like perfectly suited for this. Yeah. So I don't know, maybe smaller team, more focused, more, you know, a couple big deals, they start finding their footing. How AGI pilled is thinking machines. Were they on our chart? I don't think they were. Right. SSI was on the chart of needs. AGI is AGI pilled. I don't think thinking machines made the chart. Yeah. Actually I don't know how. How AGI pilled is thinking machines based on what we know? Yeah. I mean it's hard to say because it's like. Okay. Compared to like the average person, they're obviously way more AGI pilled. But the idea of like doing. You're doing RL for business like AGI, it's like G is general. So if you're just focusing on specific business use cases, that's not very general. Right. You can imagine someone is just building the massive model. They're just going to one shot, everything. That's much more like AGI pill. Is anyone doing abi? Artificial business intelligence. I think that's what Internet would be a green. Yeah. ACI, corporate intelligence, AVI, artificial voice. Intelligence 11 labs build intelligent, real time conversational agents. Reimagine human technology interaction with 11 labs. I think the question is there was already immense amount of pressure and really, really, really high expectations on Thinking Machines around what they put out first. Right. I don't think these people leaving, maybe it makes it harder to deliver on those expectations, but the expectations are still sky high. I did feel like kind of rough messaging. Very, very rough messaging. Right. Unclear coming out, you know, pushing this like unethical conduct angle. People at OpenAI have obviously their bias, but they've denied it. Susan jiang, who's at DeepMind said, feels like the type of character assassination leak you put out when you find out one of your co founders might be splitting off. And Rune says 100% snaky PR move. So. And Signal says there's more drama and AI than the real Housewives. In the, in the Wired article, the quote is a source close thing Machines alleged that Zof had shared confidential company information with competitors. So there's like that and then there's the like. Yeah. And like to me that's just like, okay, it sounds like he had been like in conversations with OpenAI, he could. Have just been complaining about the lack of 45 pound weight. And that is technically confidential. Yeah. He shares it with somebody else. They overhear it at a coffee shop and they're like, you shared confidential information. Yeah, yeah. But that type of allegation is like you guys talked about AI that you shared confidential information. Yeah. So anyways, well, the scoop will continue. It is played out. I'm sure we'll get more. What did Fleeting Bits say? Fleeting Bits said, some quick thoughts on Barrett, Zoff and Metz and Schoenholtz going back to OpenAI. Barrett was the vice president post training at OpenAI before he left for thinking machines. He left OpenAI in September of 2024. Barrett would have probably initially had options for about 10 to 30% of thinking machines. That's insane. They had six co founders. How could that be so high? Post Training was one of the more valuable skills at launch, I suppose. Okay. The seed round was 2 billion at 12 billion. So this would mean that he would have options now for around 8 to 25% of the current company. The this seems all hypothetical here. There were rumors back in November that Thinking Machines was in talks to raise at 50 to 60 billion. So this puts his equity at 4 billion to 15 billion valuation. Thinking Machines could probably exit somewhere at between 30 and 60 today. Who has that money? I guess, I don't know. Maybe Nvidia buys them or something. At least at some point over the next two years. I think. I think the most likely acquirers would probably be Microsoft, Apple Meta, Amazon and Nvidia. Okay. Large cap company that wants to build a frontier model. Barrett would have been just over his one year cliff. So assuming he was not fired for cause or thinking he doesn't want to litigate, he still has about one to three. Okay, that part's incorrect. How does that math work? I don't know. 25% vested. Yeah. So one quarter of the equity. So this person's assuming that. That he got 10 to 30% of the company and that the value of the company currently is 60. A four year value. He's over a one year left. And so you're looking at a billion dollars of equity. Would be interesting to know how his OpenAI pay package, the rumor is that OpenAI set aside about 50 billion for the equity pool for the new PBC. So they can afford a decent pay package for him. I guess is that it was personality dispute or disagreement over the commercial direction of the company with Mira executive team. And if there is something behind the unethical conduct claim, it could just be a game of telephone over him talking to the other labs and Mira interpreting it as him disclosing trade secrets. Huh. Interesting. Well, let me tell you about Applovin. Profitable advertising made Easy with Axon AI. Get access to over 1 billion daily active users and grow your business today. It's called Thinking machine now because there's only one left. No, there are three left. So it's still plural Rahul. But that's a funny post nevertheless. Yeah, reading into this, I mean there's got to be some real excitement on. OpenAI has just been Outflows, outflows, outflows. Getting some of these superstars back on board. It's got to be good for me. So is this what the elves and Valinor. Do we know what Rune was posting about? Because we learned that Rune posts the elves have left for Valinor every two years apparently. Okay. Well he posted it once before. Yeah. In 2024 about in I think. What was it? January 22nd. Yes, yes. So yeah. So now he posted this like on the 12th, so three days ago. I think most people have now taken it to mean to be about this, right? People leaving thing machines going back to OpenAI. But I think there's a couple ways you can look at it. Right. So if you look at it in the context of the last time you said this, it was the Exact same quote that elves had loved from Valinor. Like, okay, what is Valinor in Lord of the Rings? Right. Valinor is where elves go. So they don't diminish or they don't fade away. Yeah. So, okay, what does that mean? Like, maybe it's. You're just basically securing like massive wealth, right? Yes. You're not going to be diminished by inflation or something slowly dying or. The other way to read that is like you go to one of these newer labs and you could be a superstar, but your abilities could fade away with time. Right. Because you just don't have the scale or the resources. But so. So I think in the 2024 context, Valenor actually was the Neo Labs. Right. Because you basically go start a company, be the co founder. You guys raise at 12 billion. You're just like, let's go like, yeah, I just secured insane amount. Like massive bag. Yeah. But then now, now OpenAI is gone. Open eyes. Now Valenor. Right. They're setting aside 50 billion just for pay packages. Sure, sure, sure. If you go back, I mean, you're doing pretty well. Another bag, it's pretty safe, right? You don't have startup, you know, you're not sure if it's going to work or not. So it's kind of a circular thing going on. Yeah. There's other ways. You can even read the most recent one, right? There's like the billionaires leaving California, maybe Texas, Miami. That's Valenor. You could say the agents are the elves. Maybe Barrett was so afraid of the Billionaire Tax act that he's like, I don't want to be a billionaire. I'd rather not be a billionaire than give 5%. I would just give me a simple $100 million pay package. I'm a humble guy. That's it. I don't want to be worried about that. AGI is coming. Yeah. The new pay package. Money won't matter. Should be 999 million. He's like, I don't want to deal with the headache of paying out taxes on unrealized cap gains. I'll be bankrupted. Yeah. So Rune is talking about the framing around this before cognitive restructuring. Important people are leaving after cognitive restructuring. They're being fired for unethical conduct. The mom and dad are fighting more. Thinking machine employees are in the process of joining OpenAI after three of the startup co founders, all ex OpenAI rejoined yesterday. Three? I thought it was only two that rejoined, but it does seem like they're counting. It's two. They're Counting Andrew. Oh, okay. Rejoin. But he didn't rejoin OpenAI, so I don't know if that would count. Oh, yeah. Little. Little odd. You're just saying. Yeah. Anyway, it does seem like the talent wars are unending in the AI race. We gotta talk about saunas. We gotta talk about the Sauna wars because they're heating up. And Vanity Fair has a piece on it. So before we read this, let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests, password resets. Everyone's focused on the AI wars. Not enough attention going to the Sauna Wars. The real heated rivalry is at the bathhouse. Yes. From bathhouse to other ship to altar, a wave of bath houses in New York City are popping up just blocks apart, igniting a war of Zen. And this is especially relevant to the TVPN team because we've been in somewhat of a sauna war ourselves, which we'll get into at some point in the story. The Flatiron District in Manhattan has been a center of Nuvo wellness for around 15 years, with its many boutique fitness classes, gyms, acupuncturists and stretching and recovery centers. Now a wave of bath houses that offer dry heat and cold plunges face off in a few blocks. There is bathhouse on West 22nd, with other ship two blocks away. An altar set to open this winter. You could walk between all three in mere minutes. Williamsburg has its own cluster, right? Parallels. It's like a super cluster. Yeah. With the original location of Bathhouse and other ship that followed. Welcome to the Sauna wars, where dedicated bath houses compete with members clubs like West Village's continuum, which costs 40,000 per year, that has a bathhouse set up. And the financial district co working space, WSA's wet lounge, as well as co working space with a wet lounge. Not something. Not something you hear about every day. The fitness chain TMPL has a whole subway ad campaign entirely around their bathhouse facilities, featuring women in swimsuits reclining in a suggestive way that one doesn't really find in saunas in real life. They joined stalwarts like the Spa 88 and Air in Manhattan, CityWell and World Spa in Brooklyn, Spa Castle in Queens, and of course, the Russian and Turkish Bash in the East Village, which is the sort of place newcomers are brought to see a slice of the real New York City. It's usually teaming with people, some getting whacked by bushels of oak leaves in a treatment called Plaza and has two owners who rotate weeks of ownership. That's interesting. That's a funny concept. It's no frills and even a little gritty. For those who are used to conveniences such as booking ahead, there's none of that to be found. They do have a nod to modernity with an active TikTok account featuring guest endorsements recently highlighting Uma Thurman wrapped in a pashmina and calling it one of the greatest best New York institutions. The first time I went to 10th Street Bass was in 2007. I love the authenticity and how it made me feel. I would find my way back there when I felt depleted, underslept, whatever it might be, I would come out feeling great, says James O'Reilly, who is one of the founders of the coworking space Neuhaus. His latest project is the new Lore Bathing Club. This is where you go if you want to cultivate lore in your life, I guess. Founded alongside restaurateur Adam Elser, Lore takes some inspiration from the Russian and Turkish baths as well as the communal sweat traditions of Europe and Asia and drops it into a 6200 square foot space finished in Travertine and White Oak in NoHo. The Bath World is quite a scene one where skincare brands such as Pharrell Williams Human Race send out a press release to announce they're temporarily supplying Lore locker rooms with their signature 7D gel sets. What is a 7D gel set? Tyler? I have no idea. Other Chip is hosting Comedy Nights. Alter will be selling bathing suits that are custom made in Brazil and has hired a lighting designer who has worked with Billie Eilish. So you're always feeling your best and comfortable and tan, jafari says with a laugh while giving a tour of the space. There's already a wait list of more than 500 people for their membership which will cost $275 per month up front for $500 worth of credits to be used towards sauna and cold plunge, but also IVs and shots of vitamins, hyperbaric oxygen therapy, red light, NADA compression and PEMF. Kohler has an indoor sauna with a list price of $120,000, an outdoor sauna with a list price of $95,000 and even launched a collaboration with the wellness club Remedy Place for an at home 39 degree ice bath for 20. Do you think Brian Johnson will get into IRL experiences? Physical locations? I know was it Dave Asprey did that for a while there were a series of bulletproof coffees. Yeah, there's that one in Santa Monica. And there's been a few like locations where you can go and they have a hyperbaric chamber. You can get your blood tested like a variety of sort of health and wellness like biohacker hubs some of them. I think Brian would make a nightclub bath house probably because he would want to. You know his new thing is love as the ultimate longevity hack and so could see him doing something like that. It is a sauna boom reminiscent of the glut of boutique fitness studios have flooded the market in the wake of the success of Soul Cycle. It used to be that you would go to a gym and it was outrageous to go to an expensive group class, says Jafari. But now there are 99 boutique fitness fitness concepts in a 4 mile radius. Still there are not as many as the peak days pre pandemic. Not every boutique fitness studio survive let alone thrive like Solidcore and Tracy Anderson. Competition is always something we are aware of, says Emily Bent, Othership's co founder and director of marketing. The saturation in North America for bath houses is not even close to what it is in Europe. We're starting an industry and rising tides and all that. I have heard about Othership and what an insane business Othership is from a number of people. So not surprised to hear they're expanding. While the message from founders blissed out on 180 degree heat is one of bringing together community and good vibes, the reality can be cutthroat. Consider the case of Bathhouse, probably the most well known of the businesses in the second wave of New York City sauna culture. Co founders opened their first location in Williamsburg in 2019 and a second in Flatiron in 2024, both featuring sauna, steam rooms, warm pools and cold plunges. Goodman, the founder, saw the company's more is more approach through the model of working on large event production. You think like an experienced designer, so going to Bathhouse is not a monolithic experience, but more of a choose your own adventure. When it first opened, Bathhouse was jokingly called the Bitcoin bathhouse as they used the heat generated from mining to warm the tubs. Which is I've been to both of the Bathhouse locations in New York. They need to do LLM inference. Yes, this is a no brainer. Like everyone who was in crypto mining needed to pivot to AI. They should just do that. They already have all the infrastructure. This is the solution to the political problem. People are mad at data center power use, but if you have a nice bathhouse that you can go to for the public. Everyone's at the bathhouse constantly talking to Claude or something. I imagine that the water use in a bathhouse is actually probably pretty significant. I imagine that they're like draining the pools fairly often. So I think you get the water. I think they're probably draining them less than you would hope. Oh, that's not good. So anyways, the comments originally were like. There's a bunch of things I want to talk about. First, CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures it AI and stops breaches. Second, we have a key question. Do you know who Uma Thurman is? No. Kill Bill. You've never seen Kill Bill? It's fantastic. Oh I. Yeah, I. Brutal. Also Pulp Fiction. I've seen Pulp Fiction. Anyways, the comments were like, oh, they're laundering money through bitcoins. Tallmadge. But it's just a fancy pool heater. Those jabs did not prepare them for what happened earlier this year when someone posted on Reddit this read it. I noticed the hot tub and body temp tub were looking kind of dirty and gross. I thought it'd be fine, but then I ended up with a uti. Not great. A UTI doesn't just walk across the river. If it was a problem, it would be a pool at a single location at one given day. There's a 24 hour computer monitoring. So I'm glad that the bitcoin heated pools are getting 24 hour monitoring and they're manually logged five times per day and we keep the logs. We are adjusting ph and chlorine at all times. Every drop of water at every pool turns over every 30 minutes. All the vessels have their own independent system so they don't mix. The water goes through a sand filter that takes out any particles up to two microns, like a receipt in their pocket or a tag that falls off. Then it goes through a UV filter. Big tank with three foot long light bulbs. A pure UV light. So they're going pretty hard. Cool. Well, vibe co. Where DTC brands, B2C B startups and AI companies advertise on streaming TV, pick channels, target audiences and measure sales. Just like on Meta. Anyway, we got to talk about Meta because they just laid off 1500 people in their Metaverse division. It's 10% of their staff. It affects the company's AI, glasses and other wearable products. The stock is up on the news. Obviously 1500 people is a ton. That's a lot of people. But they still have 14,000 people working on Reality Labs. So there's a question about, like, what exactly will they be doing? How much does this represent a shift? The messaging has certainly shifted to augmented reality instead of virtual reality, but it feels like they will be continuing a lot of stuff. The Wall Street Journal has a report here in December, the Journal reported that planning, that Meta was planning to make budget cuts to teams working on the Metaverse Meta spokesperson said. We said last month that we were shifting some of our investment from Metaverse towards wearables. This is part of that effort. And yeah, you see the Reality Labs team work on a bunch of different stuff. And it started as sort of the Oculus acquisition of VR headset. Then all of a sudden it was Meta Ray Bans, which is mostly just a camera, certainly not a VR headset, but it feels like it's sold many more units. I actually don't know the precise numbers. I'm super curious how many of those 1500 people will end up working in VR in their next somewhere else. Yeah, it's just like, can the industry really absorb that many people? Right? I don't know. I mean, there's projects at Google and Samsung and Apple Vision Pro, obviously, and then there's a couple startups. But yeah, where do you go? I mean, I imagine that a lot of those people are just broad technologists and can work on anything because they're probably working on servers or supply chain or purchasing or marketing. Like there's so much to do within reality labor. It's a massive organization. I mean they ran like huge TV campaigns for the Oculus and they will probably continue to with a quest. A year after the name change in Pivot, the Journal reported that the company's flagship Metaverse product, called Horizon Worlds, was failing to catch on with users. It had less than 200,000 monthly active users and most so called worlds were never visited by anyone at all. The company's presentations attempting to stoke enthusiasm for Horizon Worlds provided fodder for popular mocking Internet memes. People were making fun of it. Yeah, the Horizon Worlds product. I still believe Meta is a fantastic name for Meta. Yeah. Do you think Salesforce should rename? I wanted to ask Benny off that yesterday if he's ever just gonna go Force Metal Force. Metal Force would be a good name. But yeah, I mean he is moving past sales. He talks about Agent Force and Service Force and all the different groups he has. Maybe he's got to change the name at some point, be fine. But Salesforce is kind of a lindy name. It's been around for so long. Who has the ticker? AI C3 or something? I don't know. Meta's been ramping up AI spending on AI, pushing its capital expenditure to 72 billion last year with plans to accelerate that spending this year. It's also doled out offers worth tens of millions, tens and hundreds of millions of dollars to AI researchers and engineers and recently acquired a Singapore based AI startup called Manus for more than 2 billion. The company's Ray Ban smart glasses equipped with AI have also started to take off. The company sold more than 2 million pairs and has delayed the rollout of its newest glasses in Europe as it struggled to keep up with Demand in the US. So 2 million pairs of smart glasses, the Ray Ban Metas versus 200,000 monthly active users in Horizon worlds. I wonder what the retention is on meta Ray Bans because if they're retaining less than 10% then the actual MAU pool is lower. Yeah, but it's the other thing that's so interesting. I see people, I've started to see Instagram reels of people using the smart glasses really to do first person videos and often prank videos. So I think that there's actually a flywheel there that's stronger than what's happening happening in VR. The only. Yeah, the thing that's interesting about not focusing on Europe is that my initial reaction of using the Ray Ban metas was if I was using WhatsApp as my primary messaging app, these would be like way more interesting. Right. Because you have the integration, you have the heads up display, you can get messages, you can read them, you can respond to them. It's super, super integrated. Meanwhile, they don't have an imessage integration and so they're not that valuable to me from a messaging standpoint, which is kind of one of the key use cases. Yeah, the sort of Ben Thompson takeaway from this was that even though Mark Zuckerberg has effectively complete control over Meta and can rename the company and move very aggressively and acquire big companies companies, at the end of the day he does respond to shareholders. And the shareholders have been watching the Reality Labs losses pile up billions every year. And at some point, if you have a new sort of big money pit initiative that's AI and you're going to spend tens of billions there, you have to sort of make a sacrifice or at least show the shareholders that you're refocusing on the new thing. Even though obviously AI and VR play very well together. Part of the biggest problem with VR is that it's very difficult to develop. You have to develop this full game. AI can enable a lot of that, speed up development. And then there's also the sort of longer off take, maybe not that far in the future. But this idea that if you generate a world model like the Fei Fei Li World Labs project or, or Google has a project as well, Genie, that might be something that actually gets you to put on the headset because it's infinite and endless and requires a whole bunch of upfront cost to train the model. But then once you put it on, you're just in that and you can prompt it yourself. You're kind of designing your own game and that's a unique experience that seems uniquely suitable for VR. Ben Thompson's take was that the meta vibes was like, like a virtual reality project effectively. Even though you didn't put a, put a glasses on, it was created well. And that's been my take on the name. It is like it's still a metaverse. It is a metaverse. Yes. It just looks like a suite of apps. Yes, yes, yes. And now you access that, you access that metaverse through a screen and how close that screen is to your face might take years to get closer and it might be small when it's. When it's close. For the first, first iteration, I'm very interested to see how the Ray Ban displays are selling. 2 million Ray Ban smart glasses. I've seen them sell the Ray Ban displays at Best Buy and shield. Mona was talking about sort of his frustrations getting onboarded. I haven't have you run into anyone wearing them in the wild. I've run into people with the Ray Ban and smart glasses all the time with the cameras on them, but I haven't run into any. Seen the new ones, the Chuck Gear. One with the display. Yeah, I haven't seen anyone just rocking them even though they are out. I honestly, I feel like we don't see that many people never go outside. Well, I mean on the weekends I do, but I'm like out and about. But it's kind of a small community. But I didn't get a chance to give a. I wanted to go back briefly to the sauna thing, but I didn't get a chance to give a take. I am extremely bullish on Americans starting to sweat more because the evidence is so clear that if you use this on every day, you will probably extend your health span lifespan. It's heavily, heavily studied because of how popular it's been in the Nordics for decades and decades. So Very bullish on sweating. One of the things that's interesting though is that that New York has like. New York is like the center of consumption, right? People have tiny apartments, so they're just constantly consuming food, exercise, shopping, et cetera. But I don't think it's representative of the way that the Americans will sweat broadly because you can get a sauna for a couple grand. And so all these bath houses are like a few hundred dollars. And so I think for some people they want the social experience, whereas for me, I don't like the. I'm not really like that into the like. You don't like talking in the sauna? I do like talking in the sauna. We've obviously had our sauna wars. Our sauna wars are. I guess we were talking too loudly in the sauna the other day because this guy just absolutely, absolutely snapped. I was, he was a bit of an angry elf. But anyways, like that most, most consumers are going to be looking like, I can go and buy a sauna for. $2,000 and I have space for it because I have a two car garage and a backyard and maybe a pool. And like for the average American that has a little bit. Last time I lived in an apartment, this was like six or so years ago. I had a whole cold plunge that I snuck into my apartment and a sauna just. I had a two bedroom loft. You had a sauna too? No, no, I had two. I had a two bedroom. I had a two bedroom loft and one of them I just put a. It was just like cold plunge on a wooden floor. That's insane. And I had a sauna. Of course, I don't think you're allowed to bring like a mini swimming pool. If it leaks, you're gonna destroy the whole. Actually I did. They did eventually tell me I had to get rid of it because there was a leak in the building and they went in to look and they were like, didn't have anything to do with my hole plunge or whatever. But okay, so if you were, if you were talking to Brian Johnson, you would say skip, skip the physical institution that is the sauna. Start a line of saunas that can be delivered on a truck to homes. Yeah, maybe. I mean there's a company called Plunge that scaled insanely quickly. The company's done really well. Yeah, I think over nine figures of revenue off the cold plunge. Boom. But yeah, the main thing you have to understand is for other ship in these companies you have to go I think into dense areas where people have a lot of Space to have saunas. Because a lot of people are going to look and say, either have one in my gym or I can, you know, people can go and just. Even if they don't have like two grand, you can use a firm and like you're effectively paying a couple hundred bucks a month for like a private experience. Yeah, we'll see. We'll see. Gabe says the big sweat lobby is making moves. I like it, but yeah, I just, I've remained so bullish on this trend because it's just passive. You don't have to work up the motivation to sweat. Sure. So you get a lot of the benefits of exercise, but you're not like, I gotta force myself to go for a run. It's just like, get in the box. Get in the box. The label box. Yeah. Let's tell you about label box. Label box. Delivering you the highest quality data for Frontier AI. Get in the box. Get in the box. Label box. Label should do a drop of custom saunas for everyone. Daniel Gross says I am building out Meta's compute desk. I'm looking for folks with a background. I like the term desk desk. It feels like New York. It feels like finance. It's not just a team, it's a desk. Yeah. Deep learning, supply chain, commodities, semiconductors, stacking, copper, energy, Excel, prediction markets, monitoring situations, et cetera. This is amazing. Candidates should have experience in at least one of these domains. Somebody's like, I, I've monitored a lot of situations. I'm qualified here. And novel ideas on how to apply LLMs to their work. If you'd like to help manage 100 billion of compute spend, please DM and include information about why you're a fit. If you're in doubt, if you're in doubt about being a good fit, please apply. Yeah, at least one of these domains. I only know Excel. I don't know anything about any of the others. I'm just an Excel jockey. Good luck. But yeah, I mean, massive compute spend. Very interesting to see where the Meta Compute project goes. Obviously they're spending a ton. Mark Zuckerberg said today we're establishing a new top level initiative called Meta Compute. Meta is planning to build tens of gigawatts this decade, hundreds of gigawatts or more over time. How we engineer, invest and partner to build this infrastructure will become a strategic advantage. Managed. It's led by Daniel Gross, of course, and Sam Tosh will continue to lead the technical architecture, software stack, silicon program, developer productivity and building and operating the global data center fleet and network. Daniel will lead a new group responsible for long term capacity strategy, supplier partnerships, industry analysis, planning and business modeling. They'll work closely with Dina Powell McCormick, who just joined Meta as President and Vice Chairman to work on partnering with governments and sovereigns to build Depot to invest in and finance Meta's infrastructure. I'm looking forward to working closely with Daniel Santosh, Dina and their teams to scale Meta Compute. It's a good name. You need a name for a team. What did Ben Thompson have to say about this? He said a narrative seems to be quickly spinning up that this signaled that Meta is finally going to get into cloud computing, competing with Amazon, Microsoft and Google. And well, Ben Thompson, he doesn't really think that's going to happen. What exactly would be the point? Amazon invented the space and invested heavily to have a structural cost advantage in commodity compute. Microsoft had a natural customer base with enterprise. Google has differentiated infrastructure and an outlet to fully leverage their AI investments without fear of cannibalization. What exactly would Meta bring to the table that other hyperscale do not have? Such that they would have the confidence that they could be anything other than second choice competing on nothing but price. So asking the hard questions about where Meta Compute goes, they don't need to sell it if they truly scale they've been what I mean wasn't their compute budget in the pre AI era tens of billions of dollars in capex and that was just for reels just for ads. There's plenty of to do if they don't choose to sell it anyway. MongoDB Choose a database built for flexibility and scale with best in class embedding models and re rankers. MongoDB has what you need to build. What's next? We have the CEO of Mongo coming on in just five minutes. In other news, Beijing has told Chinese firms to stop using CrowdStrike if you didn't have a reason to start using CrowdStrike. This is a pretty good is this the TVPN effect? They saw us run a couple ads over in Beijing and they were like yeah, they're too powerful. Too powerful. They're too powerful. Apparently this is already very tiny business for CrowdStrike, so not super impactful. But in other news, OpenAI's number one hater in the entire world, Nick is. Back on the timeline. He was the Hater OpenAI Hater of the year last year. Yeah, yeah, he's probably he's really gunning for it again this year. His camera roll is all just pictures of his camera rolls, just all Sam Altman photos for sure. But the News OpenAI Broadcom AI chip delayed and to. Says this is not a delay. It's clearly a 5D chess move where Sam is amassing enough time to release state of the art GPT6 and put in Google and Anthropic out of business. Everyone's having trying to. To find. Trying to find where this was actually reported. Yeah. Sam Altman also is putting together. There's an announcement from Ashley Vance about OpenAI and Sam Altman backing a new bold take on fusing humans and machines. It's called Merge Labs. We've heard about this before. We talked to Rob Toews on the show about BCI and brain computer interfaces potentially being a big trend for this year. Obviously Neuralink has been cooking for a number of years. Sam Altman also has his bet with Merge Labs and they now have $252 million in the bank and an all star crew and superpowers. And remember Sam Altman wrote in 2017 a piece called the Merge. I'll read in short a few paragraphs from it. He said more important than that, unless we destroy ourselves first, superhuman AI is going to happen. Genetic enhancement is going to happen. Brain machine interfaces are going to happen. It is a failure of human imagination and human arrogance to assume that we will never build things smarter than ourselves. The Merge can take a lot of forms. We could plug electrodes into our brains or we could all just become really close friends with a chatbot. But I think Emerge is probably our best case scenario of two different species. Both want the same thing and only one one can have it. In this case to be the dominant species on the planet and beyond. They're going to have a conflict. Imagine if dolphins. Imagine if Benioff has been working with the dolphins to secretly help them merge and they're like in a. In a crazy dolphin human race to see who can merge first. Because sent dolphins created dolphins just like. Generate B2B SaaS product ideas constantly. So funny. X has this new thing repeatedly. AI always is very good at being funny unintentionally. But a bunch of people were posting about Benioff's story yesterday talking about. And so X summarized it as a headline. Marc Benioff recounts dolphin vision behind Salesforce's start Dolphin Vision Dolphin Vision. Sam has some crazy old posts. I was looking at this one from February 15, 2023. This is in 2023. It's $30,000 to get a simple iPhone app created and $300 for a plumbing job. I wonder what those relative prices will look like in 2028, the likely coming divergence between changes to cognitive work and changes to physical work could be quite dramatic. And I mean, I saw Nick was showing us an iPhone app that cost about $100 of credits or something like that, maybe a little bit less. In a vibe coding app, you're going to use credits to inference a model that can actually build an iPhone app. But we're definitely closer to 300 bucks than 30,000 at this point. It's remarkable. Sentry Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. Well, we have our first guest of the show, CJ from MongoDB in the restream waiting room. We won't keep him waiting any longer. Thank you so much for taking the time. What a setup to jump on the show. How are you doing? I am doing fantastic, man. It's like there are 700 people here. San Francisco is back. I feel like San Francisco is back. Amazing. And we are reintroducing MongoDB in San Francisco today. So Phil, the energy is just amazing. Fantastic. Congratulations. Take us through some of the announcements. What does it mean to reintroduce MongoDB? What are the misconceptions where people might think of it as one thing and now you need to reintroduce it? I would say MongoDB. First of all, database market has been around for a long time. 50 plus years, maybe 60 years. Oracle is going to celebrate its 50th anniversary. Year and a half. That was my first job out of college is I joined Oracle and MongoDB was a truly disruptive database that got created in 2007 and in New York City. I mean, this is one of the few tech companies that got created in New York City. Put it on the map. I know, I know.

How are the discussions going? Yeah, so I spent the beginning part of this week in D.C. meeting with everyone from senators to the United States State Department, the white number of different officials within the administration directly in the White House, ustr, which is the United States trade representatives. And I didn't come across a single one that wasn't disgusted by this policy. And so I don't think the Italians quite understand the hornet's nest that they've stirred up. And this is, this is now sort of the cause celeb for Europe. Europe using US Tech companies as their piggy bank where I mean, the crazy stat is that Europe makes more off finding US Tech companies than they do off taxing their own technology companies. That's insane. Right. And so something has to change here. And this is the most clear example that again, you know, whistles to all the dogs in Washington right now saying like, we, we can't have again, Europeans, let alone, you know, this sort of Italian cabal being able to dictate what is and is not online. Yeah. What's the reaction been from, I mean, your competitors, There are other content delivery networks, other host.

Outflows getting some of these superstars back on board. It's got to be good for me. So is this what the elves and Valinor? Do we know what Rune was posting about? Because we learned that Rune posts the elves have left for Valinor every two years, apparently. Okay, well, he posted once before. Yeah. In. In 2024. About. In, I think, what was it? January 22nd. Yes. So, yeah, so now he posted this like on the 12th, so three days ago. I think most people have now taken it to mean to be about this, right. People leaving thing, machines going back to OpenAI. But I think there's a couple of ways you can look at it, right? So if you look at it in the context of. Of the. Of the last time you said this, it was the exact same quote that elves had left for Valinor. Like, okay, what is Valinor in Lord of the Rings? Right. Valinor is where elves go. So they don't like, diminish or like, they don't like, kind of fade away. So it's okay. What does that mean? Like, maybe it's. You're just basically securing like massive wealth, right? Yes. You're not gonna be diminished by inflation or something slowly, you know, dying or. The other way to read that is like, you go to like one of these newer labs and you could be a superstar, but your abilities could fade away with time. Right. Because you just don't have the scale or the resources. Yeah, but so. So I think in the 2024 context, Valenor actually was the Neo Labs, right? Because you basically go start a company, be the co founder. You guys raise at 12 billion. You're just like, let's go like, yeah, I just secured insane amount, like massive bag. Yeah. But then now. Now OpenAI is growing context. OpenAI is now Valenor. Right, got it. They're setting aside 50 billion just for pay packages. Sure, sure, sure. If you go back, I mean, you're doing pretty well. Another bag, it's pretty safe, right? You don't have this startup, you know, you're not sure if it's gonna work or not. So it's kind of a circular thing going on. Yeah. There's other ways. You can even read the most recent one, right? There's. There's like the billionaires leaving California, maybe.

Not great. The, I think, potentially more controversial news was that Thinking Machines has branded squat racks at the office. Yes. Brian Peterson posted a photo. Ryan Post. A lot of people, a lot of people took this as somewhat of a red flag. Right. People say, you know, the sort of common guidance is don't make merch until you're generating some real revenue. Yeah, Right. And so if you take that further, it's like, maybe you shouldn't have. What was Ryan doing to get this photo? It seems like he just walked by going journalist mode. Here, you see this? He's like. He's not. If you zoom in, you can see these things look fantastic. Well, Ryan, you're outside. You're outside the Thinking Machines branded gym. Yeah. I'm somewhat envious. These things look fantastic. I'm kind of mad that we didn't get the branded plates, but this coming out while losing, you know, half of your family, it has to be weird. I mean, how much have they raised? It was 2 billion at 12 billion, something like that. I mean, it's got to be so weird to start a company and on day one, have enough money for a custom gym. That's just, like, unheard of. Like, you know, like, normally you start your company in the garage and maybe there's a weight in the corner you can lift or kettlebell. One dumbbell. Not even two. One kettlebell or something. But to just come in and say, yes, we're taking class A office on day one, hiring massive team, bringing on six or seven co founders. Atlas was saying the other red flag is, where are the 45? I think I'm gonna assume they're just not in sight. You can't see them. Right. They would be mounted lower. Right on the rack. But Atlas never change.