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Like legacy SaaS companies. We have to ask. Redpoint has been accused of manning the anonymous X account. R for Rock. Is it true? Are you behind. Are you personally behind the R for Rock account? Maybe we're all R for Rock. No, it is not. Somebody at Red Point. We would not. Someone had bet. Right. We would not take kindly to that. But yes, the conspiracy theory. Yeah, I would. I would appreciate. I think it's to be accused of having that much insight into the whole market. It could be. It could be a shared account. Right. It's like a handful of. It's got to be junior folks. It has to be associates because nobody senior would be that and reckless. And I will tell you one thing that has shocked me getting into Venture from, you know, the. The builder side is like there's almost perfect information spread like everybody knows everything instantaneously. It's absolutely wild. I don't know if we've ever been surprised by something that ended up on R for Rock, but we have been quite irritated when things have been leaked when they weren't supposed to be. Yeah, it does feel like it's a little bit of a hassle if you're a founder and you're planning to do a specific PR push. But also there's this weird dynamic where it kind of takes some of the energy or some of the leverage out of the existing scoopers in the tech ecosystem because they're losing scoops to R for Rock, then they don't have as much cache or power, soft power in the ecosystem. It might inspire some media companies to try to basically plant spies. Maybe like plant a spy at each tier one and then you can just leak every single round. Yes. I don't know. That might be against. Probably extremely illegal. I think you'd be better off off like hosting a party and I think so punch or whatever. Yeah. Just grab some drinks with some people, get them to open up and you'll. Have your scoop in no time. Something else lives. Yeah. Well, thank you so much for hopping on the show. Yeah, great to meet you. Would love to talk to you again soon.

Smoothly and efficiently with just the stroke of a pen. Like, it's not that big of a deal. It can. Except if you're Oracle and you spend tens of billions of dollars building infrastructure that you ultimately can't monetize in the way that you thought you were going to monetize. And if you have reason to. And they have massive debt. And so the reason I'm wearing the tinfoil hat is I would like to propose the glut theory, which is that I believe, I believe there's a chance that Sam actually wants to create a massive overbuild. So he can, he can ultimately, he predicted a glut because he controls the. Demand on the show. Yeah. Glut pilled. He's glut pilled, he said. And he's gonna, he's gonna know if. It'S gonna happen in 26 or 27 or 28 or 29 or something. But he was like, it's coming. And I would just say, like, I think OpenAI will be a beneficiary of a compute glut. It certainly seems like that. It doesn't seem like they have a lot of debt. It doesn't seem like. I, I, we don't know. That's the thing is that we don't know how these contracts are written. Like, there could be an easy mutual out. It could just be like, for convenience. These contracts can be revocable for convenience. Yeah. And it's like, okay, well then it's completely different conversation than if you don't pay your AWS bill. OpenAI this 37 billion. If you don't pay it, we own the company. You go into receivership, you go bankrupt. Like, they're wildly different contracts. And we don't know. There hasn't been any reporting on where. I think Sam is smart enough to know that. He's like, I'm gonna give you this commitment. Yep. And your stock's gonna pop massively. Yep. And you're gonna be able to use that to raise this is the tail is almost more debt. Everyone loves press. And because I know what I'm gonna do for you, you gotta give me an out. Yeah. Everyone loves press releases. That, that just doesn't, it doesn't tell. You press release economy, but it doesn't. Actually tell you anything about the, where the risk sits. So we don't actually know. We don't actually know. We just know that, like, you know, if the revenue, if AI revenue slows down, it's going to be bad for. Somebody, but it's worth noting that OpenAI, I believe, will be a massive beneficiary of a glut and an overbuilt. Maybe not in the case where they're on the business. Yeah, yeah. Where, where, where they go into receivership and Oracle and. Yeah. And I just, I think, I think the people around the table are smart enough to know how much leverage they have right now and wouldn't be signing up deals that require the company to burn 100 to $200 billion a year and not have any way to get out of that, like, eventually. I don't know. I don't know. I mean, Sam has a lot of leverage, so these could be very favorable deals for OpenAI. At the same time, it could just be a very rough deal and it could wind up being a situation. I think Sam went from having low leverage, pre chat GPT, which is how you get these, and needing to do a $10 billion training run, you have low leverage. That's how he gets into this deal with Satya. Right. Where he's giving. Not only is he going to spend $250 billion or says he's going to spend $250 billion with Microsoft, he's got to give Satya 20% off the top first. Right. So that was the interesting. This interview was just absolutely wild because they're both, you know, you know, you have Brad in the middle who's like, I'm friends with both of you guys. I'm sure he's invested in both companies.

At least like they could have easily. Edited or killed it. I think it's good that it was released. Yeah. Because this is the question that is on everyone's mind. Yes, yes. Everyone's mind. Right. And Sam's answer, I summed it up by saying his answer. He says, how will you afford 1.4 trillion in spending with only 12 billion of revenue? And Sam was like, actually we have more revenue than that. Yep. Of course they lost 10 or so billion dollars last quarter. So they have a lot of revenue, they have a lot of losses. Sam's answer was basically, sell your shares. Yep. We're automating science and we're going to release a hardware device and we're going to need a lot of compute for that. Yep. Which was like, you know, obviously I'm summarizing and he was more drawn out than that. But I can't think of a more poor answer when people, people deserve to have, I think a bit more clarity around does feel like it's getting. And then the timing, the timing of that with the new deal with Amazon that got announced this morning. Right. I think the question that even all these different partners are running the calculus on is like how real are these commitments? Right. Because I don't think that Sam is smart enough to not sign up for $1.4 trillion of like liabilities. Right. He, yeah, there, there is a world where he can thread the needle. Yep. And. And spend all this money that he's sort of soft committing. But everything has to go perfectly Agenda Commerce has to, has to be massive. Ads need to be massive. Subscriptions need to keep growing at the same rate. People need to not turn off of their $200 a month plan because they realize they can get a very similar product experience for $20 a month elsewhere. Free elsewhere. And so a lot of things need to go. Right. And it was just a really weak answer. Yeah. And here's the other thing. The only.

Going to land at Microsoft and just keep working on a lot of the same things. Oh, yeah, that was a crazy moment. The. A couple other things that stood out. Satya had a quote. I wrote it down. It may not be perfectly accurate, but it was something to the effect of how he was deciding which of OpenAI's compute kind of wishes they would prioritize. And he said something there's certain. He basically was like, there's certain requests that make sense for OpenAI that doesn't make sense long term for Azure. And so these are. He gave the example of, you know, building a data center. Data building a data center for a specific training run, which he has done in the past. But as you scale these things up, he's like, I want fungibility of the fleet, I want diversity across geographies. Right. He's trying to set up Azure for the long term. He's clearly extremely ROI focused. Super interesting. What I read into that is like, there's a very real scenario where Oracle is massively levering up doing things that are to get in the AI game because they were somewhat sidelined and they're going to do things that are really good for OpenAI and maybe not so great for Oracle over the long term. Yeah. It's the job of the CEO to be the fox, not the hand. This is the job. Should we play any clips from the actual podcast? I realize we should. Let's play this. Let's. Let's pull up this post from Buco Capital right at the top. That's just a reaction video. Right. What is this guy.

This, the more I put the strap. On, I guess I could if I balance it. Maybe it feels better. Okay. Anyway, so first off, okay, so Sam said that the revenue is incorrect. It's not 14 billion, it's higher. That's point one, point two. Dallas said that it's open. I never miss projections. They've never missed projections. It's worth noting that the losses are dramatically greater than the revenue. Yeah, but that doesn't matter for the, for the deals because you pay the, you pay the deals from the revenue. Like, like the, the. When you bring in the revenue. Sure. That's what. Factoring in stock based. Well, the losses are from the, are from the contracts. Like, like, like you don't need to find new money to pay your cloud bill because, like, that's the reason there are losses. The losses exist because they're paying these deals. Like, so it's not really fair to be like, like, yes, of course. If you're a shareholder, you want higher, you want profits. Obviously, like, that makes total sense. Yeah, but I think. But if you're Amazon, like, or if you're, if you're Azure and you're like, and you're like, how are you going to pay me a billion dollars? It's like, well, if they bring in 2 billion of revenue, like, I'm at the, I'm at the top of the capital stack. I'm at the top of the. I'm higher than the, than the debtors. I'm higher than the equity. Like, I get paid out first because I'm, I'm a supplier. I'm cogs. I'm sending you real live voices. I'm cog. I'm cogs. Yeah, I'm cogs. So I'm above everything. So I think that matters a lot less. Genuinely. Satya Nadella said that OpenAI has never missed projections. They've never put a projection forward that they haven't beat. So if history repeats, you're good also. OpenAI's revenue growth has been insane. Look at this ramp. Look at this ramp. In 2020, this is the thesis that I, that I like. This is the bullish. This is the most bullish thesis. I'll run you through. Extrapolate, extrapolate, extrapolate. So look, in 2020, how much did OpenAI make in revenue? 3.5 million. What they do next year? 28 million. What they do the next year? 200. Then 1.6 billion. Then 3.7 billion. Now north of 14 billion. What are they doing? They're tripling revenue every year. Do you understand the value of compounding compound? I do, John. So what happens if you compound OpenAI's revenue at 300% for a decade? They get into the quadrillion. They get into the quadrillions. That's right. And so the question you should be asking is not how can a $14 billion company pay for 1.5 trillion of. How can a multi quadrillion. How can a multi billion revenue business not pay for a simple 1.1% of. The revenue will go over there. It's not a big deal. It's not a big deal. If you get into the quads, you're good. And they're automating science and they're automating science and they're going to launch a hardware device. But truly the revenue ramp has been insane. It really has been insane. And so it's not that crazy to actually think that it will continue to grow. And so a lot of it is like how fast will it grow relative to how fast do these contracts grow? And so if the growth continues like the cloud deals really can work out. But the question is how perfectly do the next few years have to go? Because interestingly, revenue growth right now is accelerating. They are growing faster, at least according to these basic numbers. Like 2025 will be higher growth revenue wise than 2024 because in 2024 they went from 1.6 to 3.7. That's like 200% growth or like, like they basically like a little over doubled now. They're more than tripling and so they've actually increased. They're actually accelerating revenue now. If that, if they're, if they're, you know, expecting continued acceleration forever and there's a hiccup could be an issue. But it's not that crazy because they have so many irons in the fire. There's a whole bunch of things that could hit. You got chatgpt could grow. API business can get big. It already is, can get bigger. Sora agentic commerce, scientific discovery, new hardware. Some of those feel crazier than others. Like the API business. You're not going like, oh, there's no way they can make a billion dollars of API. It's like, yeah, they're going to no problem. They're making more than that now. New hardware. It's like that could be three years out and it could be very slow. It could be a complete flop. Yeah, I didn't like the saying we were going to have a hit consumer hardware device.

In Cupertino. Are they happy with the way it's played out? I think they recognize that it's been a disaster. I mean, still the biggest thing to me is they were completely caught off guard by ChatGPT, Gemini Copilot back at the end of 22 into 2023, and a company that does this much research, a company that has supposedly this kind of understanding of where the world of technology is going to just completely like, it's like they had no idea the Internet was coming. It's completely unbelievable to me. It's sacrilegious that a company like Apple could have had that big Ms. Apple intelligence. Like they brought it out and their marketing scheme is always just like, we're the best, we're Apple, we're going to do it better. We're correct, everyone else is wrong. And that's sort of the message they put out about AI when they launched Apple Intelligence. But it turns out, no, Apple, you are completely wrong. And I think any observer would have understood that. People want chatbots, they like chatbots. It is a winning formula. And to date they have been completely anti chatbot, which I think has been a very big mistake. The integration of ChatGPT into Siri is very much subpar still. They support all the chat bot apps, but they really need first party stuff. The big AI thing for Apple is the revamped Siri coming out in the spring. They're using a Google Gemini model to power it, with which I think is going to make it pretty top tier. I mean, Gemini's models are pretty excellent, as we know, for anyone who's used the Google AI services. But what really you have to understand is that the brand damage that has been done to the Siri name over the last 15 years, there's a big question whether or not it's insurmountable in my viewpoint. If they've gotten Siri to a point where this thing actually meets the promise of this AI voice assistant, they have to change the name. On the other hand, Siri, as damaged as the brand is, it is still a ubiquitous name. So I'd be curious to see. I don't think they're going to make a name change, but they should. So Gemini powering Siri under the hood, who pays who in that scenario?

Durability. If you've seen a bend test of the iPhone air, that thing does not. You can't manipulate that. I have a story. I have a story you'll appreciate. We were having dinner with a group a couple weeks ago, and one person in the group had an iPhone air and was bragging to the whole room of how strong it was. They were saying, this is the most durable iPhone ever made. It's impossible to break. And he's going like this. He's like. He's showing. Showing the group. He's like, I can't even bend it. He's like, I dare anyone in this room to try to break my phone. And this guy raises his hand and takes the phone and puts it down here and just gets leveraged. Breaks it in half in a second. And the guy's just sitting there in disbelief saying, like, I'm going to. I'm going to email Tim Cook right now. This is. This is ridiculous. But. Well, first of all, I love that story. I'm all for stuff like that, but to your point, you know, aluminum dissipates heat so much better. And it was like a big mistake that they moved to titanium with the 15 Pro and 16 Pro lines a couple of years ago. You could.

What about the iPhone? Still at the center. Yeah. What about the iPhone air? Did you expect it to sell better than it has or were you always kind of bearish? I have been extremely bearish on the iPhone air. I don't think that there's a significant market for it. See, Apple, because of their large numbers, have reinvented what a significant market is for Apple. The iPhone air is not a significant market. If that was a Google phone, I mean, Google would be a lot to sell pixels in the numbers that the iPhone air is selling. Samsung would be happy if their iPhone edge sold in the quantities the iPhone air is selling. It's a beautiful piece of technology, but that's what it is. It's a technology exercise to really set the stage for an eventual foldable iPhone. They have to create thinner form factors, thinner batteries, more advanced materials like titanium for the casing in order to create something like the foldable phone to compete where Google has been for three years, where Samsung has been for seven years. And so the iPhone air gets you on that trajectory. But in terms of overall sales, they didn't even really mention the iPhone air as a key driver and nor is it mentioned in their 10k driver. That makes sense. I guess the follow up question would be how, how important do you think the foldable market is? I think it's tbd. I think they don't know yet. I think Apple is in a position right now where they basically have to pull every lever possible to keep people in the ecosystem. If you somehow have a market of, I don't know, 10, 20 million people who demand foldable phones and they're willing to leave Apple to Google or Samsung because they want a foldable phone, that is a bad thing for apple, not because you're losing those 20 million customers on that one device, but because Google has an excellent ecosystem now with all sorts of peripheral products and operating systems. Samsung has the same, the Chinese players have the same. So if you lose a customer because of one product, you risk losing them across the board. You risk losing them for entertainment services, you risk losing them for your laptop, your tablet, your smartwatch. Because everyone has everything now. You kind of need everything. Yeah. How do you think about the change from titanium to its aluminum.

The Apple clear case. I rotate between the case and not using case. So here's what happened. So last year, they effed around and found out, launched this terrible AI service, Apple intelligence, that didn't really work well. And what they found out is that it didn't resonate with customers as much as prior iPhones. This year, they did not f around and find out they they did exactly what customers want. Market research, data, man on the street conversations tell you what customers want. They don't want their phone to overheat. They want the camera to be incredible. They want the processing speed to be fantastic. They want battery life to be better. And so what Apple did for the phone this year is they focused on the core competencies. Battery life is through the roof. Phone doesn't require you to use an oven mitt to hold it for extended periods of time. The camera is amazing. I think they hit them hit right on target with the colors. I think the new design is terrific. They did everything that consumers wanted. They did everything customers want in a phone upgrade. It came at the right time, which is five years after the COVID influx. You know, I get a new phone every year. You guys might get a new phone every, every year. Your viewers may get a new phone every year or two. But vast majority of people aren't getting new phones for every four or five years. And so they set themselves up for a pretty nice upgrade cycle. And you're going to see that with their first $140 billion quarter when they report at the end of January, early February. So I think all things considered, it's terrific. What about the iPhone is still at the center? Yeah. What about the iPhone air did you expect it to sell?