Fantastic. Well, thank you so much for coming on the show. Congratulations. Yeah, no problem. And I'm sure we'll be seeing you soon. Have a good rest of your day. Thank you. We'll talk to you soon. Let me tell you about wander.com, book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home, but better. And we have some surprise guests I believe joining in just a second. We will have them in Jessica and Paul. You may know them. They started a small startup accelerator called Y Combinator. Yes, that's right. And it's Jessica's second time on the show. We had a fantastic conversation with her the last time she was on the show. We talked about the get your bag culture and the carpetbaggers and just all the cultural ebbs and flows of Silicon Valley and where we are culturally. So I'm very excited to bring in Jessica and Paul, the founders of Y Combinator. They are situated, living legends. There they are. You're live now. Welcome to the show. Thank you so much for taking the time to talk to us. Hi, guys. Hi. Good to see you again. This is so fun with you guys here at demo day. It is, it is. It's always great. This is our fourth demo day livestream talking to tons of founders. It's always fun picking out. I can't wait for the 400th. I got a ways to go, but I'm excited. 100 more years, we'll make it great to have you guys on. What's it been like today? It's been crowded, it's buzzing. And by the way, this is our first demo day that we've been to in a few years because we're in England and can't manage to come back for it. It is just buzzing. The energy here is just kind of like what I remember in the early days of YC and the investors are all excited to be here. It's magical. I'm on a high. Incredible. There's a lot of stuff happening. Yeah. How are you thinking about? There was this moment a few years ago where I think in tech, maybe we were afraid to admit it, but it felt like a lot of founders and a lot of entrepreneurs were sort of grappling with this idea that OpenAI might just build every startup and there might be no more ideas. And people were a little bit nervous about that. Of course they went and built companies, but it feels like now things have calmed down a little bit and the founders that we talk to are building with more confidence. Have you noticed anything in the founders that you talk to in an ebb and flow of just the confidence with which they view the future right now? No, no, they weren't. Founders weren't really worried that OpenAI was going to eat them. I mean, maybe they were in denial, but whatever reason, they weren't worried about it. They're too busy working on their companies. They're making their thing. They're trying to get users OpenAI eating them in some theoretical future three years from now. Like they're not thinking about anything three years from now. So. We had another. We were talking to harsh about this, this idea that potentially, I don't know, we're just in a new era where, where it has become easier for a small team of scrappy entrepreneurs to sell to Fortune 500 companies, to sell to the government even. Do you feel like something has materially changed and go to market for YC companies? Well, if you're an AI company, all these big organizations now have some bureaucrat who's been told you're supposed to AI ify our organization, right? And he's thinking, damn, I have no idea what to do. And so some startup shows up and says, will AI ify your organization like great come in here? Very different from the way it used to be. I mean, if you show up with other other products for the big company, they'll still tell you to talk to the hand but nobody's coming to them with AI so they have no choice but to talk to startups. What about this tweet that you put out just recently? We were sort of debating it earlier. This idea of the circular economy selling to other startups. There are a ton of benefits. Obviously startups are very discerning. If you mess up and don't deliver the product that they buying from you, you might hear about it publicly. They'll churn, they'll talk to you, they'll talk to their friends. But are there any risks from that that you ca entrepreneurs on? If they are going to be selling to a lot of startups, do they have to message anything differently? Is there anything that they need to be doing? Well, you have to not suck because startups are discerning. You can't like have some bullshit product and sell it based on a bunch of hype. It's got to actually work because they don't have time to mess around with things that don't work. And they're very sharp observers of technology. They're run by the founders themselves, usually at that point. So you got to actually be good. I'd love to reflect on how marketing and launching startups has changed over the few decades, Jordi. We had clad labs on which we had a really fun time talking to them, but they sort of went viral for the wrong reasons. They were, in their view is the right reason. In their view is the right reasons. They were offending people by putting gambling in your ide. So the software engineer can be gambling while they're coding, I guess. Yeah. And it felt like this year the concept of using rage bait, both at the marketing level and the product level, like kind of exploded. I guess the question is like has, has intentionally pissing people off been something that YC founders have, have utilized across the eras to get, to get attention? Is, is it really, is it really new? That's that sort of technique sounds like the technique that would be popular with someone you describe as a bit of a scammer. And the thing about these scammers is they don't make the giant companies. They don't have a long term focus. They're not earnestly doing engineering. They're thinking about what's some gimmick I can use to get ahead. Right. And so long term they don't matter. You can skip the companies that do random shit like that because you know, they're never going to be that big. And of course, I haven't heard of the term rage baiting either. Of course it's the Oxford. It's the Oxford word of the year. So you can go look at their definition. It's. It's so interesting. It's getting attention by making people. I know what it means, but yeah. And we, and I had written an article and Gary and I had a nice back and forth where I basically said like in startups, if you, in startups you need to build a coalition of people that want you to win. This is like talent. The media, investors, customers. You don't even have to do that actually. All you have to do is make something really good and find the people who want it. You don't even need a coalition. You think like when Facebook was taking off at Harvard, there was some coalition of investors and media wanted it to take off. All that mattered was that Zuck had this thing and everybody at Harvard wanted to use it. That's all that matters. That small intense fire, right? Or when Apple was getting started and the users were like the people at the homebrew computer club. Right. The media didn't know about that. There was no coalition media guys. Zuck do a little rage bait. You are an EPI phenomenon. Zuck kind of did a little rage bait. Rage bait with the Hot or Not app. That definitely enraged a lot of people who didn't want to do it. Yeah, but he didn't do it deliberately. No, exactly. Exactly. And I was thinking about the Airbnb example, like the whole Obama O's and Captain McCain's crunch. Like those cereals that they made. That was sort of a side quest for them. That was simply to get attention from the press, that's all. And make. No, actually it was to make money. It was to make money. That was before yc. They didn't have any money. Remember they were dying. Yeah. They needed to make money. They went and got these like off brand Cheerios and they glued together the boxes themselves. But I don't make money. I don't think they knew they were going to make money. We're gonna have to consult. That was mainly done. What's it like being back in San Francisco? Sunny? It's fabulous. The energy is so great here. I'm just so. I'm so happy to be back and so happy to be around startups right now. I'm having a great day, if you can't tell. It gets better every time we come back. Like, Daniel Lurie is really cleaning up the city. Every time we show up, it's like a little better. That's great. I was asking, like, how far back have we gone? Have we gone all the way back to when Ed Lee died? Not yet. We're like, we've turned the clock back to maybe two years into London breed. Oh, that's good. Okay. Yeah, that's great. I have one more. I want to think through this concept that's been sort of lightly bandied about in the startup discussion ecosystem. This idea of the deals guy era, that you can actually build a business now by being more of the business person, the more of the deals guy and less of the. Of what I remember about the Y Combinator promise, which was just the earnest hacker. The earnest hacker. The earnest hacker. And it feels like there's a lot of people that are saying, yeah, but there's actually a way to go and get this person just marshal the capital and do something that's just been forgotten, not necessarily discover something new. And I was wondering if you have any reactions to. This idea that increasingly there are entrepreneurs that sort of get really big, who knows if they win, but they seem to win on the back of just raw deal making talent as opposed to raw engineering leadership. Maybe an enterprise, more. Enterprise. You sell crap to CTOs instead of selling good stuff to programmers. So salesmanship has always mattered more in enterprise. I have one observation from this morning session of demo day. Most everyone that presented this morning is an earnest hacker. I said to the person next to me, they're all nerds this time. 100%. I love it. Yeah. You know, if anything, YC drifted too far away from funding earnest hackers. And so YC for the last few years has been focusing more on, like, getting back to the essentials, back to the roots. And so, if anything, I would say YC batches are more like a higher percentage earnest hackers now. Yeah. You know, honestly, I would still bet on earnest hackers. Yeah, I agree with you. Do you think that that is what the essential skill set of YC leadership needs to be? Because I don't want to discredit all the hard work you did in the early days, but you didn't have to fight the fact that there were people in, out there writing blog posts of how to reverse engineer and make it look like you're an earnest hacker, when in fact you are the, you know, the carpetbagger. And now it's. There's a whole industrial complex for how to fake your way and make it appear that you're in earnest. Yeah. But in fact, you're not. If the, if the YC partners are themselves hackers, you can sniff out a faker like that, it's not even a problem. Yeah, yeah, yeah, but that seems like the main. The main way that YC creates value these days will just be continuing to hold that line, essentially. What do you think is your. I think. I think, you know, here's something that will reassure you if you think, okay, is the earnest hacker thing, did that just work for a while and now maybe it's over. Isaac Newton was an earnest hacker. Right. It's way older than startups. Yes, yes. This is. This is what wins. What do you think is your most underappreciated essay? Because a lot of them are sufficiently appreciated. The thing is, I don't know how much people appreciate them. I don't know how much people appreciate different ones. So it's hard to say. How to do great work is pretty good, but I think people like that one, right? I read life is short at least once a year, but people like that one too. I don't know. I don't know. That's a weird question. You probably have to look at inverse page views. Which gets the least page views historically over the Past year, let's say. If I was looking at a list of page views, I could tell you. Well, maybe I never get breaking news. Yeah, that's very funny. Do you have anything else? What else, Paul? Are we in a bubble? No, no. Everybody is always saying we're in a bubble. You know, like every year people say we're in a bubble. Every year people say, like, the valuations at Demo Die, they're too high now. They were saying this back in like 2010 when the valuations were like $4 million, and now they're like, what, 30 or something? Typically. So people are always saying stuff like that. And I don't know, I don't think so. I think. I'll tell you, I think, like, AI is very highly priced, but it might not be overpriced. That's the interesting thing. Is it as big a deal as prices seem to suggest? It could be maybe even bigger. It's definitely real. It's not hype. The AI is real. Are foundation models good at writing Lisp? You know, I've never. I think they would be good at writing Lisp. Yes, yes. Because they're good at writing things that have a lot of. A lot of. A lot of training data out there. Right. And there's a lot of Lisp source code. So I think they'd be fine at writing this. How are you using AI in your life? I just use it like ordinary people do. I ask you questions. Sure, sure. Very boring answer. That's a good answer. It's not like I'm training my own model to do a better Google search. No, no, no. I haven't actually written anything using AI. You know, I feel bad. I really should write an LLM, because you can't really understand this stuff unless you've written one. I should write an LLM, but I haven't done it. Yeah. Didn't Karpathy publish a whole. Yeah, he did it from first principles, type of thing, to teach himself, you. Know, that's why he did it. Well, he is a new company that's an education technology company. And I believe that the main course will be teaching yourself to build an LLM, Teaching yourself to build a chatbot effectively, which would be very. That's what I tell high school kids. I get all these emails from high school kids, say, I'm working on a startup, you know, to introduce, like, founders to VCs or some crap like that. And I say, don't start a startup. Get good at technology, write an LLM, then you can start a startup. Do you think reflecting on the history of yc, do you think it's fair to try and create a concept of eras around. What the key insight was? I remember a lot of people saying one of the first key insights was just this idea that you could take someone fresh out of college and actually give them money and they could go and build a business. They didn't need $10 million. They didn't need 10 years of experience in the enterprise. Or an MBA. Or an MBA. And then maybe the second era was thinking that maybe the same rules applied internationally and that was like a second wave of entrepreneurial energy that was unlocked by the yc. I mean, we always had international. We understand countries aren't all that interesting. But do you think there are any other, like, underappreciated aspects of like the YC strategy or is it really just as simple as, you know? Well, there were things we didn't appreciate in the beginning. Yes. So for example, we didn't understand that as a byproduct of funding all these companies, we would create this alumni network. We had no idea. But the alumni network is enormously important. It's out there now. All these alumni are investors. Yes. It's staggering how many are investors now actually. Yeah, it's amazing. It's like taking over Silicon Valley and we never had any idea that was going to happen. Okay, on the alumni network, is it fair to characterize YC as a bit of a union against venture capitalists? Yeah, it's a lot like a union. Yeah. Because if you attack one individual, one founder, if you fire the founder after investing, you get board control from them and you oust them, that might make its way into the rest of the YC community and it overall raises the level of founder friendliness. Is that correct? You know what though? It's not simply one sided because if founders screw over investors, if they like do a handshake deal and then refuse to go through with it, we would tell them not to do that too. We want everybody to play by the rules. Yeah. And behave well. Because the big wins don't come from breaking the rules. The big wins don't come from little cheats that get you 2x multiples in a world of like thousandx returns. Right. It's for the same reason, like people in Silicon Valley don't focus a lot on tax evasion. Because what's tax evasion going to get you, like 2x returns in a world where getting the right startups will get you 1000x returns? Yeah. You know. Do you think that the process of founding a company, raising money is at its the end of history in terms of efficiency. Like the safe is the most efficient document we will ever have. Or do we need to speed things up even further? Well, C. Levy, Carolyn Levy, invented the safe and she also invented the convertible note that everybody used before it. So she has twice rewritten the rules. She has twice recreated the chessboard that the game is played on. If she thought there was a better thing than the safe, she probably would have created. Maybe she has a third one in her. We should ask. Very popular. Oh yeah, okay. Yeah. And you could ask her that, John, when you come on our podcast. We'd love to. I'd love to. Is there anything wrong with the safe? And like, if there is, why hasn't she fixed it already? You know, so. Probably not, because C. Levy's not slack. If there was anything missing, she would have like made a new version. Yeah, I mean, from my perspective, it seems like it's worked. What problem in the world did you think a YC startup would have fixed by now? Think like housing affordability or any of these sort of major, you know, we. Don'T have any grand strategic vision for what the startups do because the founders know that, not us. Right. That would be like asking a publisher, what, what novel do you think, you know, would you have expected someone to write? Right. Good publishers, they just like, they let the, they let the novelists write the novels. So we would just, we just try and find good people. What do they do? Whatever these good people are interested in. Anything. Any preconceptions had about what they should do would just be adding noise to that. How do you think about coaching folks through pivots? It feels like we're in an era where there's a lot of companies that are still finding product market fit. Pivots are probably just as common as they always have been, but everyone has an order of magnitude more money, if anything. More common? Yeah, Yeah, I think it's more common. You talk about new ideas with startups all the time in your office hours. This is one of my special. Yeah. When people are just dead in the water and they need to get a new idea, they often get sent to talk to me and we cook up something. Has the advice changed? If someone comes in and says, hey, I have $200,000 raised and I have. Me and my co founder are living in an apartment together and we need to pivot versus I come in and I say, hey, Look, I got 5 million bucks and I got 20 employees already or something like that. 20 employees. It's happening, right? You two see this, right? Well, no, usually they don't have 20 employees. Usually. Usually. I mean, that would be. That would be alarming. That would be very alarming because it. Feels like there's so many companies. Those 20 employees constrain the idea you're going to have. If you just have the founders, you could do anything. Yeah. If you already have 20 people, you either have to fire them or do something that those 20 people can do. Right? Yeah. Which really constrains your options. Yeah. So it's the problem with the 20 employees is not the cost, it's that they change what they limit what you can think of, you know, which is why you shouldn't hire. Just what kind of guidance do you give to founders around that are feeling a pressure to go from 0 to 100 million in ARR in like 3 years or whatever? Like the new gold standard is what. I tell startups over and over and over is all that matters is growth rate, not the absolute numbers. Because mathematically you'll see if you try simulating it, if your growth rate is high enough, doesn't matter what the absolute numbers are, you'll get there. You just get a really good growth rate. And so the great thing about focusing on growth rate means you can focus on startups. You can sell stuff to startups for cheap. Instead of having to go and do these big deals with big companies that take a long time and make your product stupider, you can sell things to these quick, quick deciding early adopters and then you just get more and more of them and your company grows by several percent a week. Eventually it's going to be huge. Are you still recommending to folks who ask for advice for kids that they should learn to code? Yeah. Oh yeah, yeah, yeah. I still tell people that. Or at least learn technology. It doesn't have to be coding specifically. You can learn how to make rockets. Or drones or work with lasers or gene editing or something like that, but you should do the stuff and not just like play house pretending to start fake startups in some business plan competition. You know. I tell everyone who says they might want to start a startup someday to learn to code because it's the most important thing. You could do that and save your money. Yeah, that's really good advice. And no one likes to hear that, by the way, but I tell them anyway. Yeah, no, no, we give a lot of advice. People come and they like, want advice. It's like if you went to the doctor and you said Doctor, what can I do to be healthier? And the doctor says, eat less and exercise more. And you're like, oh, I was hoping you'd say something else. Yes, right. Well, that's what it's like when they come to me, they come to me for advice and I say the startup equivalent of eat less, exercise more, and they're like, oh, isn't there some trick I could use to get virality? Couldn't I get virality instead? Just like do the startup equivalent and eat less and get more exercise, which is build stuff and talk to users, understand your users and be good at building. That's the recipe it was in 2005 and it's just as much the recipe now. How many startups do you think YC will have per batch a decade from now? Because I think in a perfect world we have a lot more earnest hackers and. They can apply to YC and if they meet the. I know you're not setting targets and there's not like a specific acceptance rate that you're trying to track, but we feel like YC is one of the most important institutions in the world and ideally it can be bigger. But, but maybe there's some. No, no, no, they will be bigger. They, they will inevitably bigger because there's this secular trend of more people starting startups. Yeah. Do you think we're early? Do you think we're, we're early in this, in this trend? I mean, it feels like there's so much, so much. It's. Now you can create a startup, you can create a C corp in a few minutes. Right. It's like there's all this sort of like underlying infrastructure that's been built that is reducing friction to starting companies. You can ask ChatGPT, how do I start a business? And it'll give you a good playbook. And that maybe helps somebody that hasn't found the YC blog yet figure out how to get going where the training. Data, even if they don't know it. Yeah. So will more people start startups? Yes. If you talk to like ambitious 15 year olds, they all want to go start startups. Nobody wants to go work for some company and work their way up the corporate ladder anymore. The whole idea sounds so like, sounds so like 1980s. And there's a lot of earnest hackers. The limit, you think like, what's the limit? So the limit is what people want, Right? That's what startups do. They make something people want. What are people's, people's wants? They're limitless. Not literally limitless because eventually you run out of atoms in the universe, but for all practical purposes, in the near term. People'S wants are infinite, and so there's infinite demand for good stuff you could make. Well, that's a great place to end it. We have to catch a flight. Thank you so much for taking the time to talk about this. Yeah. Thank you for everything you guys have done for the industry and the world through yc. It's an honor to be here with Alex. It's an honor to cover every batch, and it's been great having you guys on. Yeah. Nice to meet you. Thanks for having us. I love you guys. Yes, we love you, too. Thank you so much. Have fun in sf. Have a great rest of your trip. We'll talk to you soon. Thanks. Goodbye. We have to hop on flight. But hear that, John? I hear it. Yes, I hear the goat noise.

Sam. You're watching TVPN. We are live from the TBPN Ultradom. It's Wednesday, December 3rd, 2025. You probably thought we were at YC Demo Day in San Francisco. We gotta go to New York City tomorrow. We're interviewing Jim Cramer, a bunch of other folks today, actually. Yeah, we're traveling today. We are traveling today. So we couldn't, we unfortunately couldn't be in San Francisco at the palace of Party Rounds. But we still have a ton of YC Demo Day content lined up for you folks. We got Harsh Tagar coming on at 11:45. Then we got Clad Labs, the makers of Chad Ide, the rage bait. Yeah, the company that sparked. By their own definition, they call themselves the Brainrot Ide. We're getting to the bottom of that story. And then we're talking to probably 10 or 20 other founders going to be asking them how they're building their businesses, what they're building, what they're seeing. It's always a fun time to check in with the good folks over at YC. And of course we will be telling you about ramp.com, time is money save, both easy use, corporate cards, bill pay accounting, and a whole lot more. Ay ay yai aye aye aye. And I will also be telling you about Fall, the generative media platform for developers develop and fine tune models with serverless GPUs and on demand clusters. So today I wrote about Will AWS buy TPUs from Google? In the front page of the Wall Street Journal's Business and Finance section. They'Re singing the Trainium chips praises. Amazon chips. Amazon's chips pose risk to Nvidia. The whole week we've been talking to people. Is that clickbait? I don't know. We're gonna find out. We'll see. It certainly doesn't seem good to have more competition in the market. And Tae Kim came on the show yesterday to talk about how Nvidia was strong and really was not going to face significant headwinds from the TPU threat. Of course, Dylan Patel over at semianalysis wrote a 10,000 word piece all about how the TPU V7 was pretty good and Anthropic was gonna be buying some and they were also gonna be leasing some and they maybe through Megate. And that sparked a lot of backlash from Nvidia bulls. And also folks who are really tied to amd, they're upset about it. There's a lot of losers if Google winds up winning with tpu. And so the losers came out to Fight, apparently. But let's read through. Let's just get the facts down from Amazon's Trainium 3 launch. We of course had the CEO of AWS on the show yesterday and I asked him about this question. Will Amazon be buying tpu? I think that's an interesting question. But first let's see what Amazon's actually planning with their own AI. Didn't. No cliffhanger here. He did not say yes or no. He just. I think, I think you can read between the tea leaves and understand how the decision will be made, even though the decision has not been made yet. But we'll go through that. So Amazon.com is the latest big tech company to muscle in on Nvidia's turf. Give me a sound cue from the fall. Muscle in. How about this? There we go. That's right. On Tuesday, Amazon Web Services announced the public launch of its Trainium 3 custom AI chip, which it says is four times as fast as its previous generation of artificial intelligence chips. 4x speed up. That's actually very significant. That's great. The company said Trainium 3, produced by AWS's Annapurna Labs. Fascinating company. Acquired a decade ago for around 350 billion or 350 million. So it's pretty small acquisition actually. 350 million in AI, you never know. But back then, you start a custom silicon company, you could barely clear nine figures on the way out the door. But Independent Labs has been working on custom silicon for Amazon for a long time. They actually do have a custom CPU at AWS to accelerate CPU based workloads. Then for the last few years they've been working on GPUs or ASICs for accelerated workloads. And so this custom chip design business, Annapurna Labs, can reduce the cost of training and operating AI models by up to 50% compared with systems that use equivalent GPUs. The chips are meant to provide a stronger backbone of computing power for software developers like Dean Leiters. Leiters, the co founder and co. An executive chief executive officer of the startup Deckart who we had on the show. And Descartes. Is valued now at $3.1 billion. Let's go. So if you don't remember, Descartes came on and Dean was doing live AI video generation while he was doing the interview with us. It was really crazy. Yeah, he basically, yeah, it was real time. He looked like he was in a video game, but it was happening with little to no delay. Really, really cool demo. Yeah. Before we move on, let me tell you about Restream. One livestream 30 plus destinations. If you want a multi stream go to restream.com so he said his company had a breakthrough enabled by Trainium3 chip. By the Trainium3 chip. After trying out several other competitor chips including Nvidia's processors, dozens of programmers and AI researchers from his San Francisco based company had been trying four months to train a version of Descartes flagship AI power video generation application known as Lucy that would be able to render footage in real time without bugs or hiccups. AWS gave Descartes early access to training 3. After meeting with the startup and being impressed with founders, the company was two weeks into a marathon coding session in a rented house in Silicon Valley, which I think he took us on a tour of while he was in wizard land, an AI generated sci fi world. It was very fun that a few of his employees were celebrating wildly behind him. Wait, I think that's a reference to the actual call that I'm referring to. Weird. This is very weird. Reading the journal. Yeah, I've experienced this. The moment that I saw it worked, I saw four people just start jumping up and down, said Dean. The next question was how fast can we get it to market and start changing industries with it? The launch of Trainium 3 is the latest broadside against Nvidia, which dominates the GPU market. A flurry of deals in recent months have caught the attention of investors, indicating that more AI firms are seeking to diversify their suppliers by buying chips and other hardware from companies other than Nvidia. So Meta Platforms is in talk with Google to buy billions of dollars worth of advanced AI processors known as TPUs. And OpenAI has struck deals with rival Nvidia, rival AMD, as well as Broadcom. And so very exciting that Descartes got good results out of the Trainium chip. That's awesome. Obviously, I'm sure everyone over at Amazon has been working very hard on. At the same time, we've heard that Anthropic maybe didn't have that great of an experience with Trainium and that's why maybe they're moving over to TPU a. Little bit more even though Amazon remains a major shareholder. Exactly. Yeah, Anthropic. And so my question is, will AWS buy TPU from Google? I asked Matt Garmin that question. You didn't ask me that question. Yes, I said they will be mocked. They would be mocked. They would be mocked. Which is ridiculous. And we'll get to why that's ridiculous. I mean, first off, it's funny to mock anyone for Something like, you know, related to their semiconductor supply chain and what they rack in their massive data centers. AWS is a massive business where I. Just say, like, please, please, my arch rival, can I please get some chips for my data center? To compete with your data center? Okay, well, let's actually go to what Matt Garman, the CEO of aws, said on TBVN yesterday, because I asked him, will you be buying TPUs? And he said he very excited about Trainium. And I think it has, and we think it has enormous potential and we absolutely think there's a benefit to optimizing every layer of that stack. And so he, you know, people were joking on the timeline. You know, oh, there's this new Trainium chip and somebody was like, all five people using Trainium are ecstatic. You know that there's this new news, but probably Ballistic here says Amazon's so bad at hype. Trainium is used by 500 million people through Bedrock, but their marketing team just can't. AWS is undervalued, blah, blah, blah. And he's obviously a bull on the stock. But what's interesting is that, like, it is, it is. I met some of their GTM staff today. Let's just say you'll have years to accumulate stock at cheap prices. And so, and so, like, yes, there obviously is value. Even if Trainium winds up being for a particular niche. Like, maybe it's for real time video. Like, maybe that's the. Maybe that's what it gets really good at. It could get really good at diffusion. It could get really good. It doesn't need to just be like your ASA can be honed and honed. And honed to the thing with real time video. That's interesting. Something that Descartes is focused on is working with live streamers, specifically on Twitch. Yeah, Amazon owns Twitch. Oh, that'd be cool. That makes that kind of partnership more interesting. I like that. So obviously there is value to saying, hey, if you go to aws, you can get bedrock and some services that have been fine tuned specifically for Trainium. You go all the way down, you're gonna get very good performance because we have a stack from top to bottom that's very efficient. But at the same time, if you're trying to do something that's sort of like not within the Trainium ecosystem, you might have a rough go, you might wind up on a different chip. But he did say something. He said, we are going to support Choice for our customers as well. And so we'll continue to offer GPUs from Nvidia as an example. And we have a very tight partnership there. So this idea of customer choice I think is important. And if you to Jeff Bezos, he said we're not competitor obsessed. This idea that Google is their arch rival, that's not in Amazon's DNA. Jeff Bezos said, we're not competitor obsessed, we're customer obsessed. We're customer obsessed. And so if the customer says, look, it's great that you acquired annapurna labs for $350 million, I'm really happy with what you've done with Trainium 3. It doesn't work for me. I'm the customer and I want you to give me an Nvidia GPU in your server or in your data center or I want you to give me a TPU in your server. They might do that because that's actually in Amazon's DNA. Yeah. And then the follow up question is, is there any world where Google sells TPU to Amazon? Maybe, I don't know already they are partnering. Like this was another partnership that came out that Ben Thompson actually wrote about instratechery, which you should go subscribe to. So separately there was an announcement of an AWS partnership with Google Cloud. Now they aren't buying TPUs, but what they're doing is they're enabling customers to establish private high speed links, links between the two companies, computing platforms in minutes instead of weeks. And so the general here, the general idea here is that Google has some amazing AI capabilities that customers are just struggling to match on AWS at this point. And the same thing's happening on Microsoft as well. Because on Azure you have access to OpenAI models that you might not have access to on, on aws. And so even though your whole infrastructure might be on aws, you might be going back and forth to GCP constantly or you might be going back and forth to AWS all the time, being like, oh, I gotta go over to aws, I gotta go, gotta go back, I gotta go Azure, back to aws, back to Azure, back to aws. And so Amazon finally just said like, hey look, we have a partnership and we're just gonna create a, like a, a dedicated pipe that put, puts these two systems together. And, and so companies used to think about AI as a special piece of their application, so it would be fine to bounce around to another cloud to get the best possible results. But if the next generation of companies, I'm sure we'll talk to some of the AI focused YC demo day companies today about this. I hope there's at least one. I hope there's at least one company that's doing something with AI. That would be a real treat. And if you're just tuning in, YC Demo Day coverage starts in 30 minutes. Yes. So it used to be fine to bounce around. Now the next generation companies, they're maybe making their entire infrastructure decision based on who has the best AI products. What are you laughing at? I'm laughing because I texted Simon. They have TurboPuffer has a booth at AWS. I said, how's it going at Re Invent? And he says, I'm not there. I just make it seem like, like I'm there as a joke because the VCs keep going to the booth. And then our growth intern is like, oh, Simon, I don't know, I think I saw him over there. Just continuing, continuing to MOG while ARR Skyrockets shout out to will the growth intern at TurboPuffer holding it down at Re Invent. That's fantastic. I love it. But so let me go back to aws. Amazon needs to fight back against this and allowing high speed interconnect between AWS and GCP solves a piece of that. But will they go further back? On Tuesday, October 21, 2025, I wrote in the daily update in our newsletter@TPPn.com about increasing competition in the AI supply chain. Here's what I said. I said, not every link in the supply chain can be completely commoditized. This is about OpenAI trying to dual source from every part of the stack. And I said, Nvidia. Nvidia has an insane amount of power right now. They've just ramped full year revenue from 27 billion in 2023 to 60 billion in 2024 to 130 billion in 2025. That's like one of the greatest revenue ramps at scale in history. And then also they grew their net profit margin from 16% to 56%. That's insane. Insane. Yes, Goat. That's why Jensen Huang is on Joe Rogan. And I'm sure it's going to be a fantastic episode because he's got a lot to talk about, all the hyperscalers and OpenAI. But that creates problems, right? Because all the hyperscalers and OpenAI are now sort of incentivized to form a bit of an anti Nvidia alliance to commoditize the accelerator market and drive down those margins a bit. So 56% net profit margins on 130 billion of revenue. People are just sitting there and they're like, there's $50 billion of profit over there. Like, that's a lot of acquisitions. And that's our Perna labs. That's our cost. Yeah, that's our cost. Like, you're just, you're, you're just eating a lot off of these plates. And so CO2, I think, has done a good job explaining the current state of the anti video anti Nvidia alliance. They call it the Google complex, which is probably a little bit better. That consists of Google, Broadcom, Celestica, Lumentum and TT Technologies. This coalition stands in contrast to the OpenAI complex that consists of Nvidia, SoftBank, Oracle, AMD, Microsoft and Core Weave. But you know who they left off the chart entirely? Amazon. Amazon doesn't fit neatly into either of this. Coatu just loves, I think, I think they just love leaving a major player off any sort of graph or chart that they make. Right. They left Google off of their top 40 fantastic 40 AI companies. So I think that's just a little, that's just them messing around a little bit. But there's. Yeah, I mean, I think it's accurate. I like. If you said, is Amazon more aligned with OpenAI or Google? You'd be like, what are you talking about? Neither. That's correct. They're not in one of the complexes. Maybe they need to be, maybe they don't. Maybe they will form their own complex outside of it. But I just think it's interesting that I agree with you that it was ridiculous to consider the idea of them buying tpu. That feels so uncharacteristic. And yet they serve up plenty of competitive products within aws and. They will. You go back to the early days of Amazon, you can get Amazon Basics paper towels. You can also get name brand paper towels and that exists within the AWS stack from the databases that they have on offer. There's a lot of. You should rebrand Trainium to Amazon Basic. Gpu, Amazon Basics Accelerator, Basic Basic chips. Basic chips. It was on Basics chips. It would be good. Really, really hard. They're like, actually, it's like one of the greatest things ever. It's the most incredible thing that America or that humanity has ever created. It's extremely difficult to make. We taught Sand a thing. Anyway. I just don't think Trainium 3 is the, you know, obviously everyone at AWS is like excited about it and it's a big, it's a big deal, but it's just not the backbone of their business. And in the long term they might just retreat to Supporting choice for their customers. And so, you know, I keep going back to that Jeff Bezos line. We're not competitor obsessed, we're customer obsessed. And so I wouldn't be as surprised. How much do you think it hurts Amazon that they don't have a dedicated podcast guy? Like, they don't have a Sholto, they don't have a Sam, they don't have a Satya. You know how much that hurts? Because they definitely have someone in that role. You just don't know them. That's what I'm saying. Yeah, they don't. They might have. They might have the title, but they're not really in the driver's seat. Right? Yeah. They don't have a Rune. They don't have the rune. Right. They don't have a Sholto. Yeah, they should step it up. They should definitely get someone. I'd love to see it. Well, fortunately, I mean, the Semianalysis crew was over there taking pictures, sharing photos in the timeline of the Trainium 3 Ultra server. Liquid cooled with a lot of hard eyes. That's some good news from. That's a glowing endorsement from the Semi Analysis crew. And look at this very purple. I wonder if that's like intentional. I wonder if they set up the purple lighting. There's a bunch of funny things going on over at Re Invent. It's also just like it's a punishing time of the year. I guess it's like right before the holidays or something because we've just been completely torn. We obviously wanted to go to YC Demo Day. I also wanted to go to Neurips, which is going on right now. The Premier AI Conference. There's also DealBook Summit. Andrew Sorkin's doing all the greatest interviews at the same time. There's Re Invent. I wanted to go to that Crazy. Interviews coming out of DealBook. I just saw some clips this morning. You got Scott Besant just going hard. You got Alex Karp going hard. No real surprises on either of those fronts, but excited to get the update there. Let me tell you about Cognition, the team behind the AI software engineer. Devin. Crush your backlog with your personal AI engineering team. Let's close out the Trainium coverage with this Zephyr post. Who says Google is having this kind of success with TPUs? What about Amazon's Trainium? Trainium is new and underpowered. Just 667t flops, BF16. It has lots of HBM, but the bandwidth is lower than the H100. TPU v6e is competitive with H100 not on HBM or bandwidth. And Ironwood is competitive with Blackwell on FLOPS bandwidth and HBM capacity. I expect Ironwood to quickly gain market share as it ramps up. As you can see from throughput slash TCO Nvidia versus Trainium Rubin Mogs, Trainium 3 harder than Blackwell versus Trainium 2 on TCO training flops and reduces the gap by 5% on TCO MEM bandwidth. So the gap between Nvidia and Trainium is actually increasing rather than decreasing. By the way, this math was done before CPX was introduced. I won't be surprised if CPX plus Ruben is cheaper than Trainium for inference. So I do think that there's a world where. Where there's something specialized like what's going on with Descartes. Some sort of special model. That thrives in what Trainium is good at and they can further niche down. But we'll see. I mean maybe they come from behind and they just destroy tpu and we're all talking about Trainium next year. Anyway. Let me tell you about LINEAR Meet the system for modern software development. LINEAR streamlines work across entire development cycles from roadmap to release. We gotta say a little rest in peace. Rest in peace to Claude. San Francisco's beloved albino alligator has passed away at age 30. That's a good age. I don't know how long alligators typically live, but I'm glad looking it up. 30 to 50 years for the American alligator. A little bit short but Claude was. Of course often, often reaching 70 years or more. Yes. Anyways RIP. There was you know, obviously people started speculating immediately. Anthropic of course was the sponsor Claude. And you know people were wondering was, was there foul play involved? Was it possible this, this poor dinosaur, not dinosaur alligator passed the day that they, that, that it was that it got announced that they've hired IPO lawyers. Some people were speculating. Is it possible Claude was sacrificed to the capital markets gods in some type of ritual? But anyways. Look at this expression he has on his face. Can we zoom in a little bit? What a cool guy. And he will be remembered. Yeah. Dan Primack here is talking about Xlight. I think we might have the CEO on the show soon. The Trump administration will invest $150 million into a lithography startup called Xlight. Its first Chips Act Award chatted this morning with XLite's CEO. There's a few lithography companies now. We've had some on the show. This feels like an entirely new. It's a very Interesting tier of investment, like $150 million from the government, that feels like a Series B. They did raise a Series B this past summer, led by Playground Global, with Playground partner and former Intel CEO Pat Gelsinger becoming X Lite's executive chairman. Whoa. And so makes sense that the government's investing in Intel. Pat Gelsinger, of course, former Intel CEO. Now he's getting involved in Xlight. Marshaled 40 million of capital, went and got 150 from the government. The story continues. There's also another AI startup that wants to remake the $800 billion chip industry. This one's in the Wall Street Journal. Founded by ex Google researchers, recursive intelligence raised 35 million with backing from Sequoia to automate chip design. Obviously this is not lithography, this is the design process. But still, companies are. Dylan Patel was talking a little bit about this stack. Oh, he did? I didn't hear about that. Very cool. This is AI for. For AI chip design. Oh, that's right, yes. AI for AI chip design. Everything we need. On a quiet residential street a few blocks from Stanford University, two former Google researchers are launching a startup they hope will remake the $800 billion chip industry. Anna, Goldie and Azalea. Are trying to build software that can automate the design of cutting edge chips. A prospect that would allow every company to build their own chips from scratch. Working from the top floor of a suburban home, the duo recently raised 35 million to kickstart Recursive Intelligence with funding from Sequoia Capital and Strike. We got it. The recursive. We got to add. Putting it in the name. We got to add that to the list of. Because there's standard capital, modern capital, standard intelligence, modern intelligence, Raw intelligence. Raw Intelligence was the low hanging fruit. Applied was another one. Cap intelligence. And then what was the other one? There's. What's Lockheed Groom's company. Physical Intelligence. There's physical intelligence, Physical capital. So it's the matrix of like, like capital. What was it? Capital, intelligence and intuition or something like that and you multiply them all out and you get the whole thing. Eventually we're going to run out. Right. There's somewhat finite. No, there will always be more names. Startup name generator, new words. So wow, the company. 35 million for evaluation of 750 million. That's a very low dilution. What, 5% or something like that? Pretty remarkable. Definitely. VCs were mogged. Yeah. I would have assumed this would be a very capital intensive business, but I suppose if it's just software that they're developing. Maybe they have more control here. Companies such as Amazon and Google have developed custom chips for AI and data center use. And Apple saved billions of dollars by insourcing chips for its devices, including the M series chips that have helped revitalize its MacBook laptops. Such silicon options can be cheaper, more. I had a funny moment yesterday. We got an Amazon package and it was covered with like, Alienware, like Alienware branding. And I asked, I asked Sarah, I was like, did you get something from Alienware? Like, what is going on? And it turned out to be an ad. But they were advertising that is powered by, like, Intel. Oh, interesting. Which didn't make me necessarily want to immediately buy an Alienware device. What do you do? You put the money straight back in your pocket because you're a taxpayer, you own Intel. That's true. That's true. You should support Intel. No, intel is undisputably great for gaming. There's no question there. The question is, are they going to be able to build a fab that competes with tsmc? It's a completely different question. I might go build an Alienware intel PC. Well, we're going to. For the office sim racing rigs. The sim racing rigs get ready intel inside for sure. For sure. This is just going to turn into a sim racing show where we watch other podcasts while sim racing and reacting to it. Yeah, I like it. Vanta Automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk. Dwarkesh Patel has a massive essay shaking up the timeline thoughts on AI progress. He says he's moderately bearish in the short term, but explosively bullish in the long term. Well, very interesting. So he says he's confused why some people have short timelines. They say AGI is coming soon, but at the same time they're bullish on RL VR, which is reinforcement learning with verifiable rewards. And so he says if we're actually close to a human like learner, this whole approach is doomed. Currently, the labs are trying to bake in a bunch of skills into these models through mid training. There's an entire supply chain of companies building RL environments which teach the model how to use Excel to write financial models. For example, I think we're actually Talking to an AI Excel analyst for Excel power users called Crunched at 1250 YC company. I think that these are good ideas. I'm actually very bullish on. This model. But in the context of when does AGI arrive, when does super intelligence arrive. I understand Dwarkesh's point. He says either these models will soon learn on the job in a self directed way making all of this pre baking pointless, or they won't. Which means AGI is not imminent. Humans don't have to go through a special training phase where they need to rehearse every single piece of software we might ever use. Baron made interesting points about this in a recent blog post. When we see frontier models improving at various benchmarks. We should think not just of increased scale and clever ML research ideas, but billions of dollars spent paying PhDs, MDs and other experts to write questions and provide. Let's give it up for the example. Let's give it up for reasoning targets. Let's give it up for the experts. These precise capabilities In a way this is like a large scale reprise of the expert systems era where instead of paying experts to directly program their thinking as code, they provide numerous examples of their reasoning and process formalized and tracked, and then we distill them into models through behavioral cloning. This has updated me slightly towards longer AI timelines since we since given we need such effort to design extremely high quality human trajectories and environments for frontier systems implies that they still lack the critical core of learning that an actual AGI must possess. This tension seems especially vivid in robotics. In some fundamental sense, robotics is an algorithms problem, not a hardware or data problem. With very little training, a human can learn how to teleoperate current hardware to do useful work. So if we had a human like learner, robotics would in large part be solved. But the fact that we don't have such a learner makes it necessary to go out into thousands of different homes and factories and learn how to pick up dishes or fold laundry. One counter argument I've heard from the takeoff within five years crew is that we have to do this kludgerl in service of building a superhuman AI researcher and then the million copies of automated ILIA can go figure out how to solve robust and efficient learning from experience. This gives the vibes of we're losing money on every sale, but we'll make it up in volume. This automated researcher is somehow going to figure out the algorithm for AGI, something humans have been banging their heads against for the better part of a century while not having the basic learning capabilities that children have. That seems super implausible to me. Besides, even if you even even if that's what you believe, it clearly doesn't describe how the labs are approaching rlvr. You don't need to pre bake the consultant's skills at crafting PowerPoint slides in order to automate Ilia. So clearly the lab's actions hint at a world where at a worldview where these models will continue to fare poorly at generalizing and on the job learning, thus making it necessary to build in the skills that they hope will be economically valuable beforehand. I want to go to the section on economic diffusion, but first I'm going to tell you about Privy. Privy makes it easy to build on crypto rail, securely spin up light label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. So you've been asking about economic diffusion. What is the rate that we're diffusing? Let's see what Dwarkesh has to say about economic diffusion. He says that economic diffusion lag is cope for missing capabilities. And so this is also seems informed by the Tyler Cow intake that AGI is here. The models are good, but it just takes time to adopt them. And I'm very sympathetic to this because when I go to the doctor's office and they hand me a piece of paper, I know that a web form is good enough. Like the capabilities of the digital form are complete. It's not that the form is lacking in something or it's not reliable enough. It's not like they're like, oh yes, the website goes down 20% of the time and so paper makes more sense still in this case, it's like, no, it's just a diffusion problem. There's just someone who runs that doctor's office is like, I like doing it the old way. Right. And that's the economic diffusion lag problem that I think is real in a lot of scenarios. But the missing capabilities thing, I mean, just to give a pretty concrete example, right now, AI is great at generating text, right? It's great at kind of analyzing a piece of content and then generating text based on that. And yet we still have multiple people on the team at TVPN whose job is to find interesting moments of the show and then create captions around that and share it to X and Instagram and YouTube and other platforms. And Dwarkesh did so too, where he was trying to find the most interesting pieces of a full podcast with one big Gemini prompt. And he was trying all the different models and couldn't get it to actually find the most salient and viral points. Yeah, so one of the other thing that stands out is like one of the. Seeming missing capabilities is like ability to like identify humor or even something. Like, it's Almost emotional. So Ilya and Dwarkesh talked about this, where I think Ilya was giving the example of scientists studied people who had had various brain injuries that limited their ability to experience emotion. And when they took out emotion, it took them. It can take somebody two hours to figure out which pair of socks to choose. And they were kind of, like, stunned. Like, it's just a pair of socks. You know, what's going on in your day? Why do you need emotion in order to make that kind of decision? And so it seems like, at least in AI, a missing capability is like, okay, finding out, like, what's an interesting moment of a podcast in Dwarkesh's case, Right. Is it something that makes the audience member feel something? Right? Is it? I mean, there's just so much to pull through. Like, I remember during the Carpathy interview, I was watching it and Tyler was watching it, and there's this moment where Carpathy says, like, the coding models are amazing and they're magical, but what they produce is slop. And it's like that word slop is so. It's like the word of the year, or maybe the word of last year. Like, it's a huge word. It has a huge amount of weight coming from him. It's crazy. That rage bait beat out slop for. The word of the year. Slop is probably the 2024 word of the the year or something like that. But anyway, the point was, like, when. When. When I heard that, when Tyler heard that, that. That word, Carpathy calling it slop, everyone was like, whoa. And I was like, we should clip that. And we looked, and it had already been clipped by. By a human. Like, yeah. Someone on the timeline had also identified that it was like, that was the crazy moment that we should be, like, reacting to and taking in. And it was crazy. The other. The other thing that's. That's notable is, like, on wap, one of best, one of, like, the top jobs that people do on wap, or way they make their first dollar online is just like clipping for various content creators and media companies. And some of the clips that they make are so sloppy. Like, it's literally just like a random segment of the show and they're blasting it out from, like, 20 different accounts. And the fact that people are still paying humans to do that still, I mean, it just feels notable. Yeah. Yeah. Well, let's read Dwarkesh's take on economic diffusion. Lab Lag being Cope for Missing Capabilities. Says sometimes Copium would be a beautiful name for an AI chip by the. Way it would, it would. You got trainium. Maybe they need copium. Sometimes people will say that the reason that AIs aren't more wide, widely deployed across firms, and already providing lots of value outside of coding is that technology takes a long time to diffuse. Dorcas thinks this is cope. He says people are using this COPE to gloss over the fact that these models just lack the capabilities necessary for broad economic value. Stephen Burns has an excellent post on this and many other points says new technologies take a long time to integrate into the economy. Well, ask yourself, how do highly skilled, experienced and entrepreneurial immigrant humans manage to integrate into the economy immediately? Once you've answered that question, note that AGI will be able to do those things too. Dwarkesh says if these models were actually like humans on a server, they'd diffuse incredibly quickly. In fact, they'd be so much easier to integrate and onboard than a normal human employee, they could read your entire slack and drive in minutes and immediately distill all the skills that your other AI employees have. Plus, the hiring market is very much like a lemons market where it's hard to tell how who the good people are beforehand. And hiring someone bad is quite costly. There's. This is a dynamic that you wouldn't have to worry about when you just want to spin up another instance of a vetted AGI model. For these reasons, I expect it's going to be much easier to diffuse AI labor into firms than it is to hire a person. And companies hire lots of people all the time. If the capabilities were actually at AGI level, people would be willing to spend trillions of dollars a year buying tokens. Knowledge workers, cumulative. Think about that. We hire someone, we hire an A AI or we're leveraging an AI and they've listened to every single minute of TVPN ever and watched every clip. And right now you'd have to fine tune that into the model or whatever. You don't just get that out of the gate. Yeah, and I'm just saying, like, we do end up hiring a lot of people that are previously just listeners. But getting somebody that knows every single moment that has ever happened on the show would be super powerful. But again, there's just a missing capability set that doesn't allow agents to deliver a lot of value internally. The reason that lab revenues are four orders of magnitude off right now is that models are just nowhere near as capable as human knowledge workers. Yeah, I agree with that. The one thing that I don't necessarily agree with here, he says, well Ask yourself this quote from Stephen Burns. How do highly skilled, experienced and entrepreneurial immigrant humans manage to integrate into the economy immediately? I mean, they do sort of integrated into the economy immediately. But like the, the immigration flow is like a slow process. Like it doesn't just happen immediately. It's not just like, you know, the amount of immigration went from like zero to like, I don't know, a million people or something. Like, it's like people move around. There is like a, there is a bit of a drag. But I understand what he's saying here and it does make sense. Anyway, let me tell you about public.com investing for those who take it seriously. They got multi asset investing and they're trusted by millions of. The Verge is trying to get it on the action. Trying to attack David Sachs with a headline. It's like, it's like so funny that the New York Times went after David Sachs and then the Verge was like, we want to go after him too. We want to get. Wait, wait, let us, let us cook. Let us cook. We heard tech hates, you know, this, this art. I do think. While I don't agree with this journalistic approach, it is a pretty funny headline. Yeah. Oh yeah, it's hilarious. The headline is Silicon Valley is rallying behind a guy who sucks. It's like, what does that mean? Just pure, pure qualitative, just name calling. They're just like, we don't like this guy. Pure ad hominem. But, you know, go off. If people, if people, if your fans like it, if that's what your, your audience wants. It's, it's, it's rage bait. It's gonna go hard. It already got a thousand likes on a linked article. The Verge is not putting up a thousand likes per link. So this is outperformance and it's heavily paywalled. You cannot learn how David Sacks sucks without subscribing to that thing. They did a good job. You gotta pay. You gotta pay. You want to know why he sucks? I did. You pay. I don't know why he sucks, but. That'D be really funny if behind the Paywall is like, we're just kidding. He's actually right. We think the New York Times missed on this one. Who knows? Paul Graham on the timeline. He says a startup told me that one of their investors didn't like that they were selling to newly founded startups and wanted them to sell to bigger companies who have more money. If investors tell you this, write them off as idiots. Selling to startups is the best thing you can do. I'm sure many of the companies we're talking with today will be selling to other companies in the batch. A lot of people. Say that's bad. They try to say YC is a circular economy, but you have to ignore the hundreds of very real businesses that have been been created through YC and gone on to work with every kind of company in the world. Yeah, yeah. It certainly seems at this point startups tend to be smarter, less bureaucratic, more representative to future trends. Like, even if there's some sort of insular circular economy in the startup ecosystem, there's a pretty immense amount of pressure to actually deliver something that's valuable. Because every dollar is precious. Yeah. And these are every. Yeah. They're being rational. It's not like, it's not like. I'm sure there's been small instances where companies were actually, you know, had somewhat bad behavior. But in general, it's like, if I'm going to pay for the SAS tool or the beta that you're running, it has to be good. Yeah. Has to work. Did you see Stuart Brand? He says so there's a $1.5 billion judgment against Anthropic for including 480,000 books in training. Their AIs. Five of my books are among them. Word is there might be $1,500 payout per book. According to my agent, Max Brockman. That's a good name. He said, I wrote them. I wrote to my agent Max, the following. If any payment comes to me, please send it back to Anthropic with my thanks for including my books and their AIs. The Judgment website offers a way to opt out of the payment, but I found it cumbersome. So I didn't in principle, but too lazy to be highly principled. I really like this. He's the co founder of the Long now foundation, which takes no sides in this forum. As a private person, I do take sides occasionally, so I thought that was a funny thing. There is secondary market fraud going on left and right. Let me tell you about graphite.de code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Yeah, reading through this, Matt Grimm says secondary markets are rife with fraud and bad actors. And it pains me to see these bottom feeders profiting off of Anduril's policing retail investors through unreasonable or opaque fee structures. In this week's episode of Nonsense, Ignite vc, a fund we've never taken a meeting with or had any contact with whatsoever. Founded by Brian, who we've never met as soliciting investors via public Google Doc to invest in an SPV that will in turn invest in another SPV that will in turn potentially enter into a forward contract with a supposedly though unnamed early and employee. A few problems here. First off, so called forward contracts are notoriously hard to settle in private companies and counterparty risk is extremely real. What about the many complicating corner cases like acquisitions where shares don't trade or marriages, divorces or deaths where ownership of the underlying shares is complicated, just generally a risky structure to close that I don't think most folks actually understand. So yeah, if you enter into a forward contract and you basically buy the right to the future value of some shares and then somebody gets again married or divorced or passes away or bankruptcy is another situation where you might not be actually able to collect even if your investment should have generated some return. Matt says Second, this deal memo includes basically no details about Anduril's performance, no revenue figures whatsoever, no product specifics. I guess that's good right if they were just floating around information that they had acquired. But anyways, continuing almost as if it's soliciting investors to invest on hype and momentum and not fundamentals Generally, I'd advise folks to be skeptical of any deal memo lacking basic details. Third, forward contracts are explicitly disallowed by Anduril's stock plan and bylaws, which means that Anduril will never consent to Team Ignite's SPV actually taking possession of these shares while we are privately held. Zero chance. And finally the memo spends most of its time talking about the structure and fees, which are insane. A double layered SPV with all legal and admin costs pass through in addition to an 8% upfront fee, 3% annual fee for two years, 20%. And the craziest part, an implied price per share that is completely insane. In this case the implied PPS is 115% higher than the most recent preferred raise from nine months ago. Flattered I suppose, but also puts these investors in an almost absurd position by paying more than double the price per share of our most recent transaction as stated at the top. I don't know Brian or Team Ignite at all. Maybe they're kind of wholesome people and this is all a big misunderstanding. But if I were an investor looking at this quote unquote opportunity quote I'd run for the hills. And I believe the founder replied and said appreciate the heads up. The document reference was an internal draft prepared for discussion with an existing LP and was not intended for public circulation. It appears someone shared it without authorization and we're looking into how that happened. But do you see what happened? There's like seven people that share a screenshot of like a direct email they got with this exact memo. Okay. And the other thing is they say not soliciting investment for any anduril related vehicle. Matt says, really the draft was written by your founder and managing partner. I literally watched him edit the doc in real time and he has a screenshot of. The founder's name in Google Docs, basically. What a mess. Anyways, don't do this, don't do it. Instead, why don't you start a company and apply to Y Combinator, build an actual business instead of going around hustling SPVs and companies that don't want to sell shares. But we are moving on to double. Layered SPVs into our Y Combinator coverage. We have Harsh Tagar here in the Restream waiting room. Let's bring him into the tvp. Harsh, thank you so much for taking the time on a busy Y Combinator demo day to come talk to us. How are you doing? I'm doing good. Thanks for having me. Fantastic. Take us through. How's the day going? What is the schedule like? And then I'd love to dig into some of the trends that you're seeing. Some of the standout companies. I'm sure we're going to be talking to a lot of them, but. What'S the run of the show today and where are we in the course of the process of, you know, graduating these companies? So we got started like almost a couple of hours ago, 10 in the morning. And so the founders kind of investors all gather together. They get into the main room here at the YC office and then the founders start giving presentations, talking about the progress, what they build themselves, their background, the pretty quick fire presentations, one minute each. And then there's a break in between blocks of presentations where the investors can hang out and talk to some of the founders and get to meet them and obviously hopefully invest in a bunch of them. So that's kind of of. We're just about approaching lunch. So it's kind of like that part of the day where people have listened to a bunch of companies, probably got like a sense of some of the stuff that they're interested in. I see people right now just hanging out, doing deals. So it's kind of like a fun vibe. It's like live. It's the best party rounds. We love it. I wish we could be there Are there any hero metrics or stats that the YC team shared this year to kick off demo day? How are you sharing the shape of YC See these days? Yeah, I mean, we didn't go too stats heavy this time.

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