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In the Restream waiting room. Let's first tell you about graphite.dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free. And our next guest is Martin Casado from Andreessen Horowitz. We have a bunch of breaking.

December 1st of rare earths to anyone anywhere in the world producing chips or equipment to make chips below 14 nanometer and 256 layer memory due to military applications. And so Dean Ball had a big take on this that we should probably read through to get up to speed. I'm not an expert on this, but I hope to be after talking to Dean. We're hoping to have him on the show soon. Dean says this is a very big deal. China has asserted sweeping control over the entire global semiconductor supply chain, putting export license requirements on all rare earths used to manufacture advanced chips. So we have the design firms with Nvidia, we have TSMC kind of on our side. We have asml, there's a whole bunch of American IP that goes into the western semiconductor supply chain. But China's upstream of all of that with their rare earth supply chain. There was a comment in the chat earlier about what does China control all of the rare earths. I think the common cited metrics are that they control a huge portion of the of the rare earth supply today, but they don't actually have all of. The rare earths in more processing than supply. Exactly. Rare earths aren't as rare. We just call them earths. Yeah. And around here we call them earths. Because they are in fact all over the place. And you hear about these rare earth deposits being found in Ukraine and in various parts of the United States. We have them. We just haven't actually gone built the mine and processing. And that takes years. And so in the short term, putting an export restriction on the actual processed rare earths is very geopolitically significant. So Dean Ball continues. He says if enforced aggressively, this policy could mean lights out for the US AI boom and likely lead to a recession slash economic crisis in the US. In the short term, remember this wouldn't be the first time they tried to. I mean the deep seek moment felt at the time very calculated. Let's ramp this app up. The charts that I didn't still didn't know a single person that was using Deep Seek. It felt entirely that the chart run felt entirely manufactured. And the immediate effect on markets was insane. Remember Counterpoint? Maybe they were just trying to take a little bit of air out of the bubble to create a bull catalyst. If markets go down. That's a bullish catalyst. Yes. It also inspires us to grind harder. Tyler, do you know Ball, Dean Ball? Oh, I know of, yeah. Oh, you do? Okay, cool.

Build faster. Figma helps design and development teams build great products together. Greg Brockman was talking about Move 37. This is the big question in AI. When will we see a Lisa doll, Move 37, a truly novel strategy and go that DeepMind was able to achieve. When will we see that in text? When will we see that in image? When will we see that in scientific research done by LLMs? And Greg Brockman was on a podcast and said on move 37, I do think next year we will have some incredible models. The milestone I am most excited about is having models that can solve hard problems. And the analogy that I like to make is think back to AlphaGo, you know, move 37 that changes people's understanding of the game. Imagine that in coding, imagine that in material science. Imagine that in medicine having real breakthroughs that are either potentially the AI by itself or the AI assisted with top humans. I think we'll start seeing that. And so we've seen a few examples of now, you know, top tier mathematicians kind of going to GPT5 and saying that there's breakthroughs. Tyler, what's your read on how close we are to a move 37 like breakthrough in a non perfectly simulated environment like Go? Yeah, I mean it's hard to say. I think first what we'll see before we see like completely novel breakthroughs is just like being more helpful to the top people. So like you saw Scott Aaronson talk about this a couple weeks ago. He said GPT5 like helped him get past some roadblock, that he said he would have figured it out if he spent another hour or two or maybe ask one of his grad students, but it just helped speed him up. So it's always hard to figure out, especially with these novel breakthroughs because people want to take credit for them. Right. If it's something that's worth a Nobel Prize, someone is going to want to take credit. So they might try to hide the impact. Yeah, maybe So I think it's hard to see, hard to figure out the exact attribution that you can do to LLMs. Yeah, yeah. It's interesting that he's kind of not drawing a super clear line between AI by itself versus AI assisted with top humans. Because you have to imagine that a vast majority of modern Nobel Prizes are computer aided just in the sense that that like the lab notebook was digital and like the pipetting machine was automatic. And like anything that you're doing to win a Nobel Prize, you're going to be leveraging computers now just to speed up your workflow. That's very different than just prompt. I did get a figure out a novel science. I got a lunch with a physics professor right after the GPT5 launch and he was able to one shot a problem that he felt he. He estimated would have taken him three months to complete if he was just doing it himself. Which. Yeah, yeah, that's interesting. It's just. It's not move 37 because move 37 was something that Lee Sedol felt that he would never have come up with, not in three months. It was not something that was even on his radar. Totally. So I'm not putting it in the same bucket and neither was he. But it was again, it wasn't doing anything especially novel. It was just doing a massive amount of work in 20 minutes. Yeah. But the impact is still massive. Even if you're just like, okay, we're going to speed up the level of scientific discovery by 2%. That's just massive. So we don't necessarily need move 37 to justify all the work that's going into AI. Be super excited about AI. It's fine if it's just if for a long, long time. It's just an assistant because why not? Why not speed things up? Yeah. Anyway, if you want to speed up your development workflow, head over to Cognition. They're the makers of Devin. Devin is the AI.

Build faster. Figma helps design and development teams build great products together. Greg Brockman was talking about Move 37. This is the big question in AI. When will we see a Lisa doll, Move 37 a truly novel strategy and go that DeepMind was able to achieve. When will we see that in text? When will we see that in image? When will we see that in scientific research done by LLMs? And Greg Brockman was on a podcast and said on move 37, I do think next year we will have some incredible models. The milestone I am most excited about is having models that can solve hard problems. And the analogy that I like to make is think back to AlphaGo, you know, move 37 that changes people's understanding of the game. Imagine that in coding, imagine that in material science. Imagine that in medicine having real breakthroughs that are either potentially the AI by itself or the AI assisted with top humans. I think we'll start seeing that. And so we've seen a few examples of now top tier mathematicians kind of going to GPT5 and saying that there's breakthroughs. Tyler, what's your read on how close we are to a move 37 like breakthrough in a non perfectly simulated environment, like go? Yeah, I mean it's hard to say. I think first what we'll see before we see like completely novel breakthroughs is just like being more helpful to the top people. So like you saw Scott Aaronson talk about this a couple weeks ago. He said GPT5 like helped him get past some roadblock, that he said he would have figured it out if he spent another hour or two or maybe ask one of his grad students, but it just like helped speed him up. So it's always hard to figure out, especially with these novel breakthroughs because people want to take credit for them. Right. If you're going to, if it's something that's worth a Nobel Prize, someone is going to want to take credit. So they might try to hide the impact. Yeah, maybe. So I think it's hard to see, hard to figure out the exact attribution that you can do to LLMs. Yeah, yeah. It's interesting that he's kind of not drawing a super clear line between AI by itself versus AI assisted with top humans because you have to create.

But many things are unclear, including how intensively they will enforce this. This is a costly decision for them too, and not without risk. These controls are being imposed on the whole world, not just the United States. My current assumption is that China is doing this to gain leverage over the US in advance of the President's upcoming meeting with Xi Jinping at apec. It'd be very funny if they just put the controls on the United States and then you had a bunch of startups that were like, I'm going to do diversion and I'm going to go set up a, a Rare Earth buying and selling operation in Dubai or Malaysia or somewhere. That'd be very interesting. Number three, I do not think they are doing this to get the US to relax its export controls on Nvidia Blackwell chips. In fact, my guess is that they want us to think that's their goal. We buckle by relaxing Blackwell controls and then the PRC shrugs and says, no thanks, we're very confident in our domestic chip industry. That is a message I'd want to be delivering to APEC if I were advising the PRC. 4. Further relaxation of export controls is therefore unlikely to be a useful policy lever here. Instead, it is time for the US to get serious about exporting.

Love it. You get my guys in it. Russell Paulson quoted our post. We were talking about the anthropic ad campaign. He added some insight. He says this is all about values based marketing. It's not about the hat or what Claude does technically. It's about how it makes us feel and how it elevates our inherent humanity. It's a breath of fresh air to feel like an AI tool makes us better rather than replaceable. Yes, very well said. I like that a lot. And it does feel like. Although I do think this feels a little bit written like. Like Claude. It's not about the hat. It's about. You can't. When I write now, I actively think like, okay, if I'm going to try and put something in a. It's this. Not that I'll just completely rephrase the sentence to just be. You know, just wildly different structure because it can just. It just has a tinge to it these days. Yeah. But Anyway, Ball says OpenAI plans to detect underage users and give them a model with more safeguards. This may clash with Colorado's SB205. That's crazy. Which prohibits algorithmic discrimin based on age. What is Colorado doing? One of literally millions of pro social AI uses plausibly rendered illegal by that stupid law. Very. Yeah. Very interesting that a single state is going to be able to potentially create policy, nationwide policy around AI. I think David Sacks has been kind of ringing the alarm bells about this and there's been a number of folks we've talked to on the show who have said that like the state by state stuff is going to make it really. It sort of turns us into Europe where you have like one cookie policy that then cascades all over the place. At the same time, I feel like, is it not possible to just like geofence a feature still? I mean, you have 50 states if they all have different laws. Colorado only has 6 million people. Yeah, 40. I'm not worried about the technical burden. Should be able to. One shot that with Kodaks. Come on, we're in the future. But I am worried about some weird situation where one of those Colorado ins is on the border and the cell phone tower that they connect to says that they're in a neighboring state and then that creates a liability and there's a class action lawsuit or they're using a VPN and the VPN doesn't count as actually leaving Colorado. And so there's a lawsuit there. And if it just becomes a legal precedent that requires you to treat the entire United States population.

For a large enough check, you can do anything. I love the honesty. What is it about Give us the Bermuda lore. I've only been there on vacation, but. It sounds un American to me, but I'll let you defend it. Well, it's long been a sort of financial hub, and it has some deep history and ties between Wall street and Bermuda. You're not winning me over. It's not an American. Yeah. So the fundamental history is that Bermuda used to be tourist destination when you had to get on the boat to go to your vacation spot. And once there was an airplane, you're like, I'm going to go to the Bahamas or I'm going to go to Jamaica. Bermuda is actually, like, way out in the middle of nowhere in the ocean, and it's just not as hot as you'd like. Right. So. And it's the. Bermuda Bermuda Triangle out there. Not a great history on boats. So basically, they had some really enterprising people and in the 50s and the 1950s and 60s who decided to make it an offshore financial hub. And now it is like the insurance capital of the world. So I'm surprised you went there on vacation because there is about as many actuaries, lawyers and accountants on Bermuda as there are Bermudians. Wow. You walk around and it's like Munich Re, Chubb Swiss Re. It's like huge financial institutions. And I guess the next huge financial institution there is going to be, meanwhile. Congratulations. That's amazing. Is the Bermuda Tribe.

Oh, sure, sure. Yeah. Stripe Atlas. There's a bunch of other. What makes. What makes poker. Players so elite at. At the sport of business? Yeah, I know a buddy of mine still plays like pro am pro poker. This is basically degenerate gambling professional. Just kidding. But I mean, don't you think you can sort of like cross supply from. I mean you ran a business and now you run very popular. You just cross supply. Like a lot of the same principles govern all these domains, right? Yeah, totally, totally. Is this founder bluffing or will they come on the show? Will they come answer hard questions in the TVP ultradome? Will they have a poker face on. Expected value of thinking, you know, risk, discipline, et cetera, et cetera, et cetera? Totally, totally. Awesome. Take us through the round real quick. What happened? You mean like the money? Yeah, I want to ring the gong.

The whole company with that in mind. Yeah. And do I'm not. Nowadays engineers at every software company have the ability to just sign up for tools themselves. Are law firms at that point yet where they have some amount of discretionary software budget that they can allocate as they see fit? Or are they still. Or is it still maybe like Silicon Valley engineers in the 2000s? It depends on the segment. So 70% of lawyers work for small and mid sized law firms. So when you envision lawyers you usually think of big law. But actually 70% of lawyers are working at these much smaller firms where they actually have a lot of autonomy. They have access to a credit card, they might be one of the founding partners of the firm. So in that segment, yeah, it's very much you can do self sign up and then we also serve in house counsel teams on in house counsel teams like we have customers like Nestle and ebay. You know the decision making power is still very concentrated. I think like with with Wiz, one of the reasons why they cited it was such a great motion is because you know the buying the decision making power for was like with the CIO or chief Security officer and you know, they're sort of the technical buyer, they're also the user, they're also the check signer. Similar thing happens in these in house legal teams where there's often a GC who's the user, they're the check signer, they're like sort of the domain expert and they're the champion all in one. So you still get these I think really fast buying cycles in these large enterprise in house legal teams as well. What does growth look like? We are growing very quickly. Yeah.

Wants that necessarily. I think you could reduce it to like, you know, listen, people are people and whatever, but, like, enterprise buyers are very different in China than they are in the United States. And like, can you name one large Chinese enterprise software company? No software. Yeah, it's impossible. I mean, does ByteDance get into enterprise in China? Does Alibaba Quinn, like, count or like, does deepsea count? I know Deep Sea is getting inferenced a lot. I mean, I'm like, well, it's like databricks, Snowflake, Salesforce, Microsoft. Yeah, yeah, we have more than we the US Enterprise companies. And then in China, you're like, well, you're kind of trying to like, well, it was a consumer company, but maybe they do enterprise. Like there's kind of these weird telco companies that people will mention. Sure, sure. It just, you know, listen, I, you know, I built a team. You know, I ran a team in Beijing, I ran a team in Shanghai when I was working at VMware after they acquired my company and we sold software in China. It's just different. It's totally different. Like the consumption patterns and different how you sell. It's different. What they expect from the software is different. And, and, and the market is large enough and localized enough that any local company is going to focus on that. And if they focus on that, they' through Darwinistic forces of acceptance, are not going to build something the rest of the world really understands. And so I do think this is an area that the United States has a tremendous advantage is like, do you think, based on your experience selling software, enterprise software?

Years, but I can take you through. So Juul started 10 years ago, got immensely popular, and was so regulated by the FDA that at one point they were banned and then they finally got approved. And all of this was justifiable in the micro. But during the time that they were banned and going through all of this, guess what happened? There was an entire massive gray market of illegal vapes that weren't even trying to be approved by the fda. They weren't participating in the regulated structure. They were not in the kingdom. They were just out in the gray market. And they gave us a child testing the vape like they were coming off the line of child and China's hitting them all to make sure they're working and then before they ship them out to America. Yep. So crazy. So the market moved to gray market. And I don't know what the stats are most recently, but at one point, illegal vapes, mostly imported from China, were the second largest category of nicotine consumption after cigarettes. So it was much, much bigger than Juul and the companies that were trying to be regulated. There's obviously regulation that needs to happen in this category, but if it takes 10 years, yes, there is a gray market that's going to develop. And so I firmly agree with Will. I've seen it in the business that I know best, and he's obviously seen it in the medical space. I have no idea what he's talking about in the department defense space. But do you have any thoughts on Will's latest long post? The Yuga, as he puts it. The Yuga. I don't know. I think it's interesting that we haven't seen more about the pill mills and all the telemedicine shops from the 2021 era. We were hearing rumors. Working through the courts. Yeah, yeah, we were hearing rumors of like ATF getting involved or the government getting involved. Some of these companies going bust. A lot of them, they kind of had legal problems.

Sue, if you will. So, so here, let's talk about the areas where I think that like the US has an advantage, Right. I mean, like I mentioned, like complex software, the unit the United States does a great job of. Yeah. When it comes to like, building products that people want, I think the United States does a great job of. And so I think that right now when it comes to, you know, Chinese hardware, I think we have to really look at ourselves and say, you know, do we want to like, start putting like import restrictions and tariffs on those? Not, not to penalize China, but to kind of incur local capability building for these things? And I think that would be an important thing for us to consider as a nation doing. And there's another very interesting area which is, you know, for a lot of AI, you want big GPUs, right? And so you can do a lot of robotics with smaller microcontrollers, but you kind of want the big GPUs for the heavy processing, like certainly for AV. And it's pretty well known that China doesn't do anything below 9 nanometer very well. You know, like 7 and 5, they can do it, but the yields are pretty low. And of course they'll be subsidized by China, but they're well behind. So I think at some level, like, we should continue our export restrictions on SME, like, you know, ASML lithography machines. Like, I think we should do that just because it does slow them down. I think we should, you know, do import controls, you know, and tariffs so that like, we can do local capability building. But again, I, like, I have no interest in a generational struggle with China. I just think that we need to understand where we're weak and then we need to, to put in the controls necessary so that the United States can catch up. And these are the areas, I would say. So I would say it's not the big chips. I think we're pretty good about that. It's not the software. I think we're pretty good about that. But I think actually a lot of the hardware supply chain, I do think that we should put our finger on the scale. Yeah, to me, the interesting thing, seeing unitree robots selling on Walmart.com when.

Give yourself some credit. I know politics. Yeah. I know humanoids. I know it's not so. So listen, the area I'm expert is, is. Is infrastructure software, right? I mean, that's what my PhD is in. That's what my company is in. That's what I, you know. And so in order to, you know, know what is impacting enterprise software and software infrastructure, we do these market studies, right? So we'll study like, what's going on with energy, we'll study what's going on with microchips, we'll study what's going on with robotics. Like these are. And we did this study on robotics and it was in service to our software investing, which we do. Even though a lot of the groups in Andreessen Hornets do hardware investing. I've sat on the board of hardware companies. We do it. But the purpose of this study was software investing. We got the result of this and like, oh, damn, China's kicking ass. We're like, wow, they got the supply chain locked up. They're doing incredibly sophisticated stuff. I think something like 50% of all deployments for the last three years were done in China for the globally. And so the purpose of the piece that we wrote was just to say, listen, you know, we do these studies normally. We did tons of studies like this, but like, this was so dramatic. Like, maybe we should kind of make it a little bit more apparent to everybody, like, you know, you know, how China is doing. And so I don't. Listen, I am not an expert on any given robotics market. Like, if it's an enterprise industrial thing, I'll have more of a sense to it where, like, from a humanoid standpoint, I think there's huge expert on, on. But I will say that when it comes to China and the. I mean, they're a very real contender when it comes to the full supply chain, all the way up to the hardware. It's the software where I think things start to differentiate. How do you characterize the opportunity for America to catch.

Got it out. Is, is the, is that just a market structure thing I'm interested in understanding? Like, where is China behind? Where are they ahead? It feels like Tesla was way ahead in electric cars and China's catching up there, but now Tesla's playing catch up in humanoid robots. And I'm interested in the landscape of, like, what each country does best. Yeah, yeah, okay. So, I mean, listen, this is going. To be very polarizing topics. I just want to say up front. That I'll send some opinions. These are not rooted in fact. There is no agenda here. Just, you know, as far as your first question on, on the structure of. Companies like Xiaomi and the car and. Apple, you know, Asian companies just tend. To do more, right? I mean, think about the Korean Chae Balls. There was like, for a long time there was five companies that did everything. Like, everything, everything from the cone to the car. And so, like, I don't think that. That is like a China versus US thing. I think that's something quite a bit different. You know, that said, we've seen China be like, you know, very, very effective at a number of areas in recent memory, right? I mean, 5G China basically won, which is, you know, critical infrastructure, communications, right. I mean, for solar, they've been dramatically good. And then I wrote this post on robotics where they're very, very good. And so it's clearly a country with a ton of capability. On the other hand, like, listen, like, the United States continues to like, do two things that I think are pretty, pretty distinct from China. One, they're very good at complex software systems, right? Like, like, you know, not building a. Model, but building kind of like the open AIs and the anthropics and, you know, and everything around them. Very, very good at complex software system. And two, this is going to sound funny, but the US is actually really good at building stuff people like. And I know, but I, I think that, I think there's a, I think there's a specific reason for that, which is we're more like the rest of. The world than China is. Like, China, like caters to a local market and the local market is just different behaviors, different buying behaviors, different political. Behaviors, different economic behaviors. And so like, the stuff that they produce is just weirder. And so in some way I would think, like, like, you know, there's, there's. Two areas where they're just not as strong. It's very complex software systems which we historically have just not seen come out, especially for B2B, but also like software. That the rest of us can, like, use and adopt outside of, like, these viral consumery things. Consumer thing. But I'm not a consumer guy, man. I'm a. Yeah, I'm like, there's these. Cars that have, like, LED front dashboards and karaoke machines inside, and they float, and they're all very cool, but I don't know if the American consumer actually wants.

Which is through the lens of technology, like there is not a detente. I think that things tend to be escalating now. That said, you know, the, the tactical collaboration between China and the US Is the strongest it's ever been. I mean, you know, half the founders I work with are Chinese. Half the teams I work with, half the papers I read, half the models I use, half the models the companies I work with use. I mean, like I think from a technical academic standpoint it's the strongest I've ever seen in, in the industry. And so in that way there's very much a pos, but politically there's clearly some jockeying and I think we're trying to all understand what that means. I'll just tell you my very quick view is I don't think anybody wants a generational struggle with China, right? I mean, the hope is that both of us collaborate together and take over the solar system.

A lot more about it. It used to just be make the docs dark mode. Do you think some of the. But now, yeah, now we are emerging. Sell the thing and be technically correct. Exactly. That was kind of my. Yeah, exactly. Do you think public SaaS is generally oversold? Are people too bearish or is the, is the, is the conversation we keep coming back to? Brett Taylor was on the show talking about how it's easier to change the. That your tech stack than your business model. And he was referencing, you know, the dynamic between, you know, seat based. But that's, but that's kind of not as relevant in public company infrastructure companies that might be disrupted by. Because, because the public, I imagine that most of the infrastructure competitors, the incumbents are already on consumption based models. And so you're not seeing a dramatic shift in the business model of the companies. You back. It's more of a technology shift or am I mischaracterizing that? Okay, so I definitely think we're seeing a pricing shift from seed based to usage base. And listen, we saw that, listen when I was doing my company, we saw the shift from perpetual to recurring to SaaS recurring. And so we're seeing that type of shift. And that's being accelerated by AI. It was started by the cloud, but it's being accelerated by AI because the tokens are so expensive. I don't think that alone is depositioning anybody. Right. I think that the SaaS companies are very good at adopting that and using that. I really think a lot of the story of AI is actually kind of new capabilities and new use cases. And that's kind of like the untold story. I mean these things now speak English, right? They develop an emotional connection. They can create something from nothing. Like that's cool, that's net new behavior, that's net new budget. And you can see this in this dramatic growth. Now of course budget has to shift to cover that. Right. And so I think we are seeing a slowing down of traditional SaaS spend as you would expect when you have something super cool and new and whatever. But I don't think that this, this spells the demise of, of the traditional sector. I mean it's just, it's actually not even good at things like systems of record yet. Now over time that will change and maybe it'll change the consumption layer. And once you have the consumption layer, you can change the back end. But I really think the story we should all be talking about is like what are these net new use cases? Like what is it enabling? Where does that budget come from. Yeah, as opposed to, like, who is this necessarily going to kill? Because the zero sum thinking, I think, is the biggest mistake we all make in this AI Wave. Totally. All right, well, let's switch gears to robotics. Yes, there is a.

End up becoming brand monopolies. And then the adoption is literally because people can't keep up, so they just kind of adopt the one that they know about. Yeah, there's. Speaking of brand, there's actually a comment in the chat. A16Z blows my mind. How can they be a venture fund and a brand at the same time? And I feel like there's like Andreessen really is focused on brand in many ways. Both the Andreessen brand, but also partnering with brands on the consumer side or, you know, Internet consumer side. But do you have, do you have thoughts or advice for infrastructure founders on brand? Is there an equivalent of like maybe make sure you have your.com or make sure that you have a specific brand package? Do you spend any time thinking on that or is that at all relevant or is it just something that kind of check the box, make sure it's converting customers and think about it in more quantitative terms? Yeah. So quite frankly, this is a pretty new phenomenon. Like I am part of the nerdiest part of industry. Don't really think about brand. It's like that's not the conversation we have normally. It's either talking about the mechanics of, you know, inbound bottoms up growth or the mechanics of enterprise sales or something like that. That said, we've all had to, all of us, the founders and the investors had to become students of this because like you'll have model companies that'll be consumer companies and those are very much brand led. You'll have. I mean, you know, I mentioned Cursor before. Like, you know, Cursor is a dev tools company, but it's got so many users like brand effects are at play. Brand is really important and, and X now because this stuff is proliferating so quickly has become a primary distribution channel like X way of propagating information. That's very, very different than going to like traditional press or doing like a press release or writing content marketing or whatever. Like we're in a very different world. And so I would say, you know, historically, I personally, while the firm has. I personally have not been very focused on brand like the opposite. But I've had to learn a lot more about it. It used to just be make the docs dark mode. Do you think some of the. Sell the sell. Sell the thing and be technically correct. Exactly. That was kind of my. Exactly. Do you think public SaaS is generally oversold? Are people too bearish or is that.

That becomes the brand monopoly will follow brand effects and then people will know the name and then they'll go ahead and adopt it. So I think that, you know, like there is no indication, just because the revenue ramp was quick that it's not durable. That said, I don't know of any endemic defensibility in AI. I think companies have to figure out traditional moats and there's a lot of traditional modes we know about, right? Integration modes, two sided marketplace brand modes, like whatever the moat is, they've got to get to that. So when we evaluate the company just because it grew quickly, we're not like, oh, easy come, easy go, right? I mean that's kind of like intellectually lazy. On the other hand, we do look for like what actually is the moat, right? If you're basically just, you know, reselling tpm, you know, tokens per minute from anthropic, that's probably not as durable as if you've got a workflow and a bunch of users that use it and you know, they save configuration in this and you've got good retention numbers, etc. So we do kind of full fledged investment like the always do. But I don't think it's correct to just say just because the growth is high, it must not be durable. How quickly can a brand moat emerge in infrastructure? Yeah, I mean it's a good question. The last time.

I don't understand what you're even asking. And then they could just be. You sound like an evasive. Yeah, exactly. That's not gonna be great for your credibility. There you go. What about how the media characterizes law? Is there a book or movie that stands out to you as kind of telling the story the correct way? That resonates with you? That's something that you don't feel like. It's a mischaracterization of how you work. You know, there are a number of good books about trial lawyers. And perhaps my favorite was written by a trial lawyer who recently passed away. Jerry Spence. I don't know if that's a name. You know, famous trial lawyer from Wyoming. He did the Karen Silkwood case that uranium. She claimed that she was injured by exposure to radiation. He represented Imelda Marcos in a trial in New York City. I mean, but he was always kind of this Wyoming, buckskin clad country lawyer, a character. And he. Yeah, and he wrote a book called Gunning for Justice that was about his own life. And it's a very, very moving book. That's one that I really like. I will have to pick it up. Well, thank you so much for coming by. Thank you doing this interview. Thank you, John. Enjoyed it very much. Thank you so much. Thank you very much. Yeah, you're welcome anytime. What a legend. That was a lot of fun. We have our next guest.

In both cases. But, yeah, we're starting to have those decisions on various issues. But there's so many things. All this money is going into large language models and AI, and there's a lot. You think a lot of founders are just running the calculus of. I know that I'm going to have to eventually pay out something for what I'm doing, but I'm just going to run with it because I'll be able to eat the cost later and if I wait, than my competitors will. I don't know. Losing one of these cases, the copyright cases, there's so much involved, the price tag could be very, very big. Yeah. So I don't know that people are sitting back saying the cost of doing business. Yeah. But at the same time, if your competitor is willing to take the risk and they can ramp their market cap up into the hundreds of billions, they know that. And the alternative is being safer around ip, and then you just lose the race, then you're a zero anyways. So I think a lot of people are. It feels like a lot of people are willing to just roll the dice and say, we'll figure it out later. Well, Apple in its early years had a reputation for not being very careful with its ip. You know, they launched the iPhone knowing they did not own the name. IPhone. Oh, yeah. It was owned by, I think Oracle. Oracle or Cisco. Cisco. And so as soon as they launched it, there was a lawsuit following filed. Cisco versus Apple. And it was immediately settled. I've never heard what it settled for, but, you know, that was Steve Jobs driving ahead and kind of doing what you're saying. I think they've gotten. I think they've gotten a lot more careful, but there's just a host of issues. Like you have all this money going into AI and AI inventions. How are you going to protect it? You cannot patent an algorithm. You cannot patent a mathematical application. You know, it's. These come under the rubric of general ideas. Yeah. And again, laws of nature. Yeah, yeah. And then in the talent, the talent wars are a whole other thing. I'm curious if what you're.

After each other so much. They will. There are examples, but there's kind of an ethos that you compete on the business, you compete on your offering, and you don't compete with IP lawsuits. What lessons did you take away from working with Elon? Is he different than other clients? Is there something that you were coaching or advising at various points in time? Well, we've represented Elon in a number of cases, including cases that have gone to 20 trial here in California. There was that defamation case, the British cave driver diver, where there was a tweet about whether this was a pedo guy, and the case about wanting to take Tesla private for $420 a share, funding secured. We tried both those cases. I was not on either one of those trial teams, so I have not. We have a team of people that work very, very closely with Elon. So what I know about him and our experience working with him is. Is secondhand. I do know he values his time. He closely guards how he spends his time. I think it's fair to say that based on what I've heard, that spending time with lawyers, preparing for depositions and trial at the like is not the top of his list of things that he likes out of priority. I can imagine. So he's a busy guy and obviously he's got great instincts himself. Yeah. What about. I can say just one story. So in that defamation case, he had tweeted that, I assure you this British guy is a pedo guy. And he came into Elon, then lived in Los Angeles, sued him for defamation here. We didn't have a lot of time to prepare him for trial. And when the trial started in federal courthouse downtown, the plaintiff called him as their first witness. You can do that. You can call the adverse party, put them on the witness stand, and immediately start cross examining them. So the jury, the first witness they see is your adversary being cross examined. And the question to Elon was, when they put him up there was, this is a defamation case. You're Elon Musk. So the world really cares about what you say. Not a bad question. What's he gonna say? Hard to deny. There's kind of a beat. And he says, well, I'm not so sure. I don't know. I've been talking about our need to get away from fossil fuels for so long now, and it just doesn't seem to be happening. I'm not sure people are. People aren't listening to me at all. They weren't listening to me at all. It was like genius. That's remarkable. Yeah. That's a good argument. That's very funny. We're tracking like a crazy AI boom. Crazy tech boom right now. Most.

Certainly. I don't know, it'll be interesting to see. Well, Ludwig had a great post that we got a chuckle out of this morning. He said, wearing my TVPN jacket and thinking cap from Anthropic. Look at my OpenAI coin. I'm such a good boy. Did you know I got an OpenAI coin? It's because I gave them lots of money. Anyways, I'm a 15 year old dropout and I'm building the first 1 billion dollar evaluate evaluation solo company in the world. Evaluation. Anyways, having, having a lot of fun here. The, the anthropic cap and TVPN jacket combo is, is. Yes, is, is pretty. Pretty on the nose. Ludwig is a master of the wojack. He really is. This reply to you is remarkable. Not like the rest. Part 1 Where did you find that yellow token? Where did you find that jacket? There's sinking cap. The cap with the helicopter wheel on top is under. Yeah, underutilized. Nobody. We don't know how to make these hats in America. Yeah, that was kind of the, the, the, the, the. The most iconic tell of like the I don't know, 2005 nerd is very like, I don't know, just kind of like you're hanging out on some sort of corporate campus like a Google. It's multicolored, it's very, it's very sophomoric. No one's brought that back and reappropriated it. So maybe someone should, maybe, maybe someone should make it, make it trendy. Yeah, the spinning wheel cap. Well, in other news, Francois Chollet is very.