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Invested in that fund. I'm sure there's some of the best wealthiest investors out there, so I'm sure they're. And I mean from the letter that he sent today or yesterday, it seems like the Citadel deal put a lot of new cash on the balance sheet, cleared a lot of things out, and that there might not be permanent capital impairment, as he put it in the letter. So there he is, living to fight another day. What do you make of this idea that the optimal number of blow ups for a hedge fund manager is one, not zero, not five. But do you agree we had one losing year so far with Nudurai. Right. So if you're in the business of being investment manager, you're almost putting yourself on the hook to be like, yeah, one time we lost money. In fact about 50% of days we'll lose money. Right. So you really don't want to be negative about that. Yeah, sorry, continue. No, so I think that's one very important piece. I would say though, the key thing that I think matters is not just leverage, which I think people are saying, oh, you use leverage, you lost money, we use leverage. I'll bet you we use way more leverage than situational awareness. We're not levered long, we're not leveraged factors. So we leverage. If you were to plot our performance on a graph, you would see and you would say, show me the unlevered performance. It would basically look like the x axis. You wouldn't even notice it. Sure. It's so much risk constraint that it requires leverage to get to appropriate volume. Got it. With more leverage than situational awareness, we have one tenth of the volatility and risk is volatility squared. If they have 150 squared units of risk and we have 10% squared, it is a different ballgame. So I'm mostly critical about the high volatility. I think that was the mistake, not the leverage. Interesting.

Investment performance of someone over a very long time. You're right there. So that's why it's kind of a funny term. Okay, so wait, but what do you think about the idea that certain managers, it might be possible in theory to like copy them, but they are getting paid to do something that you might emotionally not have the resilience to do? I'm thinking of this Jeremy Giffon post. He says people really miss that buy and hold means the ability to buy and hold, not that you should buy and hold. And he quotes this screenshot from the Financial Times. It says, since 2010, Warren Buffett sold his entire holdings in 63 positions with an average hold time of four years and three months. Combs and Weschler, two other managers, exited 48 stocks holding for just two years and 10 months. And so even though we all know buy and hold, buy low, sell high, psychologically it's hard to do. So that's maybe what some hedge fund managers are getting compensated for. Sure, I might have read Situational awareness agreed with Leopold, but do I have what it takes to actually go and buy on margin and do all this crazy stuff and not paper hands? I love that discussion. I think there's a sort of feeling that he was the one with the courage to take all this risk or something. But even that falls flat on a hedge fund manager, I'm afraid, because it's like someone goes all in with pocket sevens and he doubles his money. Have you learned anything about his courage or his skill, really? He's. It's a bit like, it's a bit foolish really. So it's basically like the. I also used to actually think this. I was a young hedge fund manager. I feel like maybe aging out now, but I was a 28 year old hedge fund manager. And I did also have this perception that surely these big hedge funds are just so risk averse that it's almost like for psychological reasons they refuse to take enough risk. And I have come to learn that they're taking nearly the exact amount of risk that you should take. Because these things are mathematical, there's a right risk to take if you have a certain Sharpe ratio and those numbers are smaller than you think if you want to run money for a very long time. So Leopold was up 400% in H1 of 2026. Well, Warren Buffett was up 5 million percent by basically being sensible for a very long time. Sure. So do you want to do the 400 and then lose everything or do you want to do the 5 million? But it takes 30 years. So I think that's, that's kind of like the orientation you have to think about. So it's not that some people are unwilling to take risk, it's that they are already taking that risk. It's just a small part of their portfolio. So there's no doubt that in the markets, numerous AI models that are trading thousands of stocks at all times, that we intersected with situational awareness and we bought some of their positions and sold some of their positions and maybe had similar alpha. If you constrain our portfolio to just look at that segment of the market, but we didn't do it at the wrong size, you could say, yeah, you actually ran the numbers.

To make this kind of alpha, how much should I, if I'm, if I'm trying to understand, if I'm, if I'm looking at a fund's returns over a number of years, how much should I be able to identify alpha purely by uncorrelated results with the broader market? Like, is, if the market goes down 10% and the fund goes up 20%, then the market goes up and the fund goes down. Is that, is that giving me like a sense of alpha that at least this fund is searching for that, or is that just uncorrelated returns and they're just throwing, throwing dark. So if you're uncorrelated from all the factors, you have alpha. Okay. I think there's a sort of sleight of hand that discretionary investors, hedge fund managers tend to pull, which is, they say, well, look, we believe in the us we believe in AI. We want to take that factor risk because that's part of our return. And to which a sophisticated investor would say, we can take that risk ourselves without paying fees. There is nothing stopping any LP of situational awareness from buying anthropic shares themselves. There's nothing stopping them from going long. Microsoft Micron or something. It's really like, almost childish to think that they, a sophisticated investor wouldn't be able to pull those trades themselves. And so to take a personal example, here's a fun thing. I bought. It's a good day to say this. I bought some Amazon options, some call options on Amazon. I'm a hedge fund manager. You know, I don't really trade very much, but I just think it's a cool company and it's going to benefit from AI. And I, and one of my friends said it would be a good thing to buy. That's it. Okay, now my call options are up, whatever, 300% today. Yeah, whatever it is. Does that mean I'm on a generational run? Does that mean I'm a genius investor? No, it just means a gamble I took paid off. And it paid off actually probably appropriately for the risk I took. So in the hedge fund industry, you know that the banality of that is extreme. No one numerai is talking about how I bought Amazon options and made money. This is like, so boring. Okay, but so even the timeline, like the length that Leopold was, you know, it was like a year and a half. He was on this, like, generational one, as people say. Is there no difference between that and just when does a generational run start? How do you define, is it 11 months and 30 days. I think it takes a generation, actually. I think that's how you measure the investment performance of someone over a very long time. You're right there. So that's why it's kind of a funny term. Okay, so wait, but.

Our investors can make a better portfolio by holding a piece of us. Yes. So help me understand Alpha in the context of situational awareness. Because I've heard a lot of people throw around. It's just levered beta. It's beta. But when I think about situational awareness and the ideas and the thesis that was contained in that PDF that was released almost two years ago, that felt contrarian. It felt like Alpha in the sense that you can understand the future in a way that other people can't. Is that not Alpha? Yeah, it is. It kind of isn't in this, in a naive sense it is. And it's obviously the situational awareness. You know, blog post that came out was sort of super visionary and fun. I mean, I read the whole. A whole thing. We have a mutual friend. I think we were at Joey's wedding together. Yeah. In Vienna. And Joey, I said, joey, can you please introduce me to Leopold? This is so cool. So, you know, there's a. There's a. There's a place for that type of. That type of fund where you're going to take a big, a big bet with a lot of risk. And those types of funds can obviously produce extraordinary returns. But the trouble is, the driver of the return is the risk more than the alpha. Okay, so the alpha is there, but the driver of the return is the risk. And so when people.

Resets. Take us through what's going on. With OpenAI pushing the model Frontier access across efficiency. What happened? They dropped the cost of Luna. Yeah. So there's, there's Luna Terra, Sol. This is the cheapest model. Yes. Massively reduced cost. You can see on the kind of prudhoe curve. This is like, actually much cheaper than a lot of like open source models. Because you, because we've been talking about this recently. It's like there's cost per, per task, not just like, can it do it and how much do it. Like, it depends a lot how token efficient the model is. Yeah. Because you can measure it on, on cost per token, but if, if a certain model takes 10 times the amount of tokens, it's only half the cost. You wind up spending more. Yeah. Why is the Pareto frontier in this graph flipped? I feel like the Pareto frontier used to be this direction. Am I, am I hallucinating that it's always been this way? You always want to be on the left side. I thought you wanted to be on the right side or something like that. Well, it depends on where you are in the prettio front end, I suppose. I think I see what you're saying. I suppose. Anyway, we also, I don't think we touched on this, but Arcagib 3, the leading labs have been going back and forth. Opus 5 put up a very, very impressive number. Then OpenAI fired back with 5.6. Sol used to solve open problems in mathematics. So why was it struggling with Arc AGI v3, which you at one point were in the top 10, right. Yeah, I was globally ranked. Arc AGI v3, I don't think it's still up, but Arc AGI v3 player, that's up there. You were like. You were Pro am. Yeah. Yeah. I would say. You didn't go pro. You turned it down. I turned it down. You had the opportunity to be an ARC Ivy. They were going to give me like 10 more tasks. 5 more tasks. Something like that. Yeah, something like that. But apparently OpenAI was able to investigate the low score of 5.6 SOL on RKGI V3. And the harness was not letting it remember what it had learned. We found that enabling two API settings tripled our scores with 6x fewer output tokens. So very interesting to watch these. Yeah. This is fascinating. I mean, we've seen this a lot over the past, like, I don't know, year and a half almost where the harness really matters a lot. Yeah. And if you have the wrong harness or it's like limiting the model in some way. I mean, it can have, like, massive effects on the downstream task. Yeah. People were not expecting this. It was definitely like the. The model, the God model will be just one model and you'll just ask it to predict the next token and it'll just do it perfectly. There's a lot more that goes into the integration here. I still think Arc AGI v3. I mean, fantastic benchmark. Love the team. Obviously Mike's been on the show multiple times, but it's also just a great way to actually illustrate AI progress to someone that maybe just doesn't want to build software or hasn't built software before and doesn't really. Can't really feel that. Viscerally. I can't say viscerally. I don't know. Especially, you know the famous, like, time horizon task. Doubling every six months. Yeah. Meter. Like, that's basically like. We can't actually measure the high end now. It's like, too hard. We don't have enough tasks to, like, measure it efficiently, basically. And a lot of people are just like, what a task that takes me 12 hours? Like, what is that? I don't even know. Yeah, it is a bit. It's hard to think of that off the top of your head. Like, what does that mean? Like, like building a whole report or something. Or like, a lot of people work in, like, various ways. Like, yeah, 12 hours of meetings is that one task? I don't know. But if you show someone the Arc AG v1 puzzle and it's very easy and v2 is very, very, very easy, and then you. And then you walk them through the story of how AI has progressed on this and how hidden the answers are, you can. You can pretty easily help someone feel the AGI, which is very, very, very, very fun. Anyway, that's our show. F.

The chat, Derek Thompson had a funny post here. He said, I went back and read some criticisms of big tech in the 2010s, and it's amazing how many of them bemoan big tech's cash hoarding as a major failure of late stage capitalism. This is the PT point, right? Yeah, yeah, yeah. He literally, Peter Thiel stood on stage at a Forbes debate, I think, with Eric Schmidt from Google, and said, you have $100 billion on your balance sheet and you don't do anything with it. You don't, you're out of ideas, you're chopped, basically, and the hyperscalers are just pulling the cash and no one's happy what's going on? You can't have it both ways. So you said. Just a few years ago, popular criticism of software giants, indeed of American capitalism, was that big companies hoarded their cash piles and refused to reinvest their profits in new ideas. But that era is over. Today, those same companies have depleted practically all of their cash flow. To thicken the irony, capitalism's critics seem to hate this new era of unprecedented corporate investment even more than they hated the era of corporate cash flow hoarding. So fascinating. It's between a rock and a hard place, I suppose, for American big tech companies. Well, let me tell you about public domain.

Wait. Okay, last question. What is that sword behind you? This is Andoril. That's Anduril. Oh. Oh, yeah. That's the sword Lord of the Rings. Yeah. Beautiful. Is there a criteria for getting one? Is this like five years of the company and you get a sword? Is there any. Are there any Andoril, like, totems or artifacts you can just go online and buy one of those? Guys, you don't have to work in Andoril. Are there any totems? Well, I mean, we do have an internal, like, exclusives gear store, and I should point out that I'm also wearing one of our external available swag. So this is@gear.anduroll.com you can pick up this sweatshirt and a bunch of other. A bunch of other cool gear, including our partnership with nascar. So there's all sorts of Anduril NASCAR gear up as well. Right now there's an Anduril Hawaiian shirt hearkening back to Palmer's love of Hawaiian shirts. Miller time's been cooking. Jeff Miller's been cooking. Jeff Miller is cooking, no doubt about it. A bunch of good stuff. Well, thank you so much for taking the time to come chat with us. Sorry we kept you a couple minutes late. Have a great weekend, and we'll talk to you soon. It's all good. Cheers. Have a good one.

Oppenheimer or the Odyssey? Which one did you like more? I liked the first two thirds of the Oppenheimer better than I liked the entirety of the Odyssey. Okay. But I liked the Odyssey more than the last third of Oppenheimer. Oh, interesting. Okay, that's good. What can you tell us about this? They're both at the bottom, though, of the Christopher Nolan canon, alongside Tenet, I would say. Oh, you were gonna put Tenet at the bottom? I like Tenet. I think it's so funny. Tenet's at the very bottom 10. Inarguably the worst Christopher Nolan movie. What's the best one? Dark Knight. Interstellar. What did you not like about the Odyssey? I didn't. I'll be very clear. I didn't say that I didn't like it. I just said it wasn't as good as any of his other movies other than Tennant. If it was any other director, I would have came out of the movie theater and been like, that was great. I'm glad that I watched that. But it was Christopher Nolan, so my expectations were much higher. Totally. It was the same thing. I was like, that's obviously the best picture. I can't think of any other movies that are going to be better than that this year. Year. At the same time. I don't know if I'm gonna rewatch that this year. I don't. I, you know, I don't know that I would rewatch it. I don't think, like, I watch Interstellar every year. I don't know that I would watch the Odyssey, you know, again. Ever. I don't know. We'll see. Yeah. Also, there is just. It's a type of film. It's like a moment. It's a whole experience. You gotta see it in imax. It's three hours. It's a. You know, it. It's very much a slog. Whereas, you know, you can throw on the Dark Knight and it's just like a. It's like a party almost. It's like a. Very entertaining. It's a popcorn. This is not a. This is a whole, like, journey that you're going on. That's the point and that's the experience. Anyway, what can you tell us about the future of founders fund SpaceX? We were talking to an LP in Fund 2 yesterday. I think you said it's like potentially the best fund in human history. Are you resting on your.

Some time like we'll take you through some some Bitmag 7 earnings late later. But the the interesting recap is that there's absolutely turmoil in the in the big tech markets based on earnings. Big tech's AI spending is continuing to produce blockbuster financial results even as investors have become increasingly selective about which companies are willing to reward. Over the past two weeks, Microsoft, Apple, Amazon, Metta, Alphabet all reported quarterly earnings that largely exceeded Wall street expectations. It's very boring when you did they beat on top line, did they beat on bottom line? It's like everyone beats and then the stock goes down 10% or up 10% based on capex forecasts and also just messaging around AI diffusion and AI uptake. So Microsoft led the group with shares surging after reporting fiscal fourth quarter revenue of $90 billion up 18% year over year and ahead of the 87.4 billion that analysts were expecting. That was the consensus estimate. Eps came in at 4. 74 versus expect. So they beat top line, beat bottom line. Azure revenue accelerated 43% year over year. Apple so they gained 450 billion in one day. 16% 50 billion in one day. That's four biggest one day market cap gain for any US company. Look at that the God, that's really, really impressive. It's up 25% over the month. Very impressive. Apple also beat expectations reporting $109.4 billion in quarterly revenue. Earnings per share of 202 stock briefly pushed the company market cap above the $5 trillion mark. But it has been absolutely tanking today. Down what, 10% today or something like that? Let's see. Down 9.47% last. We'll go through two more. Amazon has also impressed investors with revenue climbing 20% to 200,200,200.6. AWS growing 37% to 42.4 billion DOL sending shares sharply higher in after hours trading. Here's Amazon, we can pull that up as well. The market is up 13.76% and the day is looking pretty good too. 15% today. The market's reaction wasn't universally positive. Meta posted stronger than expected revenue of 60.8 billion up 28% year over year. But earnings per share fell $6.186.18 fell short of the $7.22 analysts had expected. Investors focused on the company's $31.1 billion in quarterly capex along with $3.6 billion in one time legal and severance costs, sending the stock sharply lower. Let's see what Meta's doing down just a bit. Alphabet, meanwhile, reported revenue of $119.8 billion, while earnings per share of $9.11, comfortably beating expectations, while Google Cloud revenue surged 82% year over year to nearly 20. Even so, investors remained focused on the escalating cost of AI infrastructure as hyperscalers continue pouring hundreds of billions of dollars into new compute capacity. And here's here's Google so we can dig into this more. There's a whole bunch of deeper questions about what is the actual efficacy of meta spending on AI? How much are they spending on tokens? How much are they spending on headcount? All these things matter, but we'll dig into it another time because we have Richard Craig from.

And let's pull up a live view from the Citadel trading floor, because we got some leaked video. This is not the vibe that Martin was articulating. Ken Griffin's wanting to be framed as, like, the savior, the, like, last resort, positive force. This is the guy you want to call, I guess, this guy right here. Dune. So good. Is this from Dune one or Dune two? I think this one. I want to say Dune one. Yeah. Beautiful. It's very heavy. So I. I think one of the big stories of the last, you know, few days is we've seen all these new Leopold photos. We've never seen these before. Yes. Brand new, rare Leopolds from Wall Street Journal. This might be the biggest story of them all. Yeah. Because, I mean, for a while, the only image of Leopold was basically there was, like, one headshot, and then it was just stills from Dwarkash podcast. Yeah. And now we're just seeing all these new ones. Where did these come from? There was one, and then there was a photo that was done, I think, for the Wall Street Journal. But then the New York Times writes up the whole story of the. Of the situational awareness, you know, deal with Citadel, and they just drop a banger new photo that they just had in the archive that they could have leaked. Let's pull it up. It's here. It's Leopold looking very pensive behind a glass wall. This one's in the Wall Street Journal today. This one's new, too. Everyone's been clamoring for this because the one that goes viral is him in that green suit. This is the one. Yeah. I'm pretty sure that's AI. That's AI. But this one is not. This is from the New York Times. They went and shot this and then never published anything. Like, the first time Leopold was mentioned in the New York Times was yesterday, and they used this photo. And so you have to wonder if they were, like, working on a profile. Yeah. Have they just been sitting on it? But Leopold's been so quiet with his public relations strategy. He's not talking to media, doing photo shoots, doing profiles constantly. He certainly could be doing more in Bloomberg, at Forbes and Fortune. Like, he could be doing a lot, but he's had a very narrow strategy, and I think it's worked very well for him. But it's funny that somehow all the mainstream media just has secret Leopold photos they've been dropping on the timeline. It's. It's. It's a big day. Let me tell you about MongoDB. A strategic reserve. Indeed. What's the Only thing faster than the AI. Market your business on MongoDB. Don't just build. I own the data platform that powers it. John Arnold is chiming in. He says my philosophy when I used to hire traders was that the optimal number of past blow ups was one. He's not saying zero. Yeah, he says you got to learn your lesson is, is how does the FTX Future Fund count? Does that count? I don't think that counts at all. It definitely doesn't count as a full blow up. He wasn't a fund manager of it. Right. It wasn't like for donations and then FTX was just the one that was funding. Yeah, it was like philanthropy. He was. That seems, yeah, that seems completely separate. Is the wedding photo AI or is this real? And is he carrying an American flag? Let's pull up this image. Yeah, this one I've never seen before until yesterday as well. I mean like if it's the wedding, like the wedding's happening right now, this wouldn't exist, but. But I'm wondering if this like leaked onto the timeline from someone who was there. Also this photo hit like Wednesday and I think the wedding would be over the weekend. But it's cool that he's just rocking, carrying an American flag. International. Yeah. The real lesson here is never travel internationally because. Because he takes one day off, one weekend off to go to Europe and everything blows up. Now, of course, this one I was laughing at before the show. Rambo says, comparing Leopold Aschenbrenner to Bill Wang. Wang is the goat. Bill Wang's from Archaeos. Wang is the goat of degenerates and Leopold is a sheep compared to him. Did you know that Wang turned 200 million into 36 billion and it was all personal capital. The guy literally led prayer circles in the conference room before trading days started. He had 100 $160 billion of stock exposure on just 36 billion of capital. It's like 5 or 6x levered. That's his blow up happened in two days and he literally caused the collapse of one of the most prestigious investment banks. Banks lost a total of $10 billion combined because of his collapse. Leopold is nothing compared to. So get your numbers up. Yeah, no, yeah. I mean that's the interesting thing here is that like it is this sort of like dramatic unwind, but at the end of the day it is just like an over the counter transaction with Citadel for a block of trades and block of equity positions. And the fund is still around. I mean they still seem to be like probably going to Be doing very well. They'll be. Yeah, they'll be okay. Citadel will be bigger than Citadel any day now. And, and importantly all of the, all of the prime brokers, the big banks, like, they were not affected. There was not, there was not like a liquidity crisis that. Yeah. A contagion effect did not take root. Yeah. Roy Driscoll says there's nothing to learn from the situational awareness situation about the AI trade. Leo was right in 2024 and based on the Amazon results, he's still right today. Hyperscale capex continues unabated. There's obviously something to learn about risk management. Forex leverage with high beta stocks is a mistake in trading stocks. Half the battle is getting the trend right, but the other half is nailing the portfolio construction. Well, I mean, this is what Martin was saying yesterday, right? Yeah, like the underlying completely makes sense, but like you get into these crazy psychology things where it's just like, yeah, who's really. Yeah, everyone's focused on the leverage. It does also seem like there were like every time the 13F would drop, it would be like 12 names. Which is like not a lot of diversification. So I wonder, like right now the message from the letter is we're not using leverage right now. We're going to be learning the lesson. Maybe the Lesson is, hey, 2x leverage or 3x or something like that, or 4 in certain scenarios with smaller trades, not portfolio wide or something like that. But it will be interesting to see if there's a difference. Difference in if. If the, the lesson that's learned. When the next 13F drops in a couple quarters, we see, oh wow, he has like a hundred names or, or there's, you know, he's, he's using more options or less options or, you know, whatever. However it changes that will be interesting to see for sure. So Leopold still has Anthropic Maddox and fluid stack, tier one private companies. He can probably raise 2 to 3 billion more. Not over for him by any means. A zephyr. And people are going back and forth on this. A lot of people. It is interesting. I'm seeing. I don't know if it's just my algorithm, but I seem to be tuned to. I'm seeing more people dunk on people dunking on Leopold than actual people dunking on Leopold. It's like mostly just defending him, like, yeah, he was correct and unfortunate circumstances, but. And a lot of people being like, it's in poor taste to dance on graves or you shouldn't, you shouldn't be so Negative. Why is everyone praying on his downfall? I'm not actually seeing that many people praying on his downfall. I have here and there throughout. And earlier in the week there was like the he's working at McDonald's memes and whatever. Yeah, yeah. But overall it feels like that has been pretty quiet and low. But I do get where those takes are coming from. There's been this vibe of like, it's too good to be true. He's too young. Tall poppy syndrome. He's the can't keep getting away with wonder kid. Yeah. Yeah. You know, yeah. People. People hate to see a young. A young goat. Young, young hedge fund manager run it up. Crazy. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security. We have Richard Craib from Numerai coming on in 10 minutes. He's been running an AI hedge fund for years now and has been through all sorts of different pullbacks. Understands this stuff really well. We open the show with one of his takes and his analysis of how leverage affects the returns and risk profiles of hedge funds yesterday. So very excited to talk to him. He has been a very interesting voice in the world of hedge tech and finance for years. I've been a fan of his. So very excited to have him on the show. So Alexi Guzzi says keep. People keep making fun of Leopold on the timeline, but everyone one, everyone needs to get margin called once in their life. Is this true? Deleon had a similar take. Right. He said basically all the goats on Wall street have had some sort of blow up earlier in the career part of the game being live player on the field. So. Yeah. Is that true? I don't think that's actually true. I don't think Warren Buffett ever blew up. I don't even think Ken Griffin ever really blew up. I think he had a really bad year in 2008 during the financial. During the housing crisis. The financial crisis. But early on I think he got his start sort of post.com and was doing convertible debt trading and never really like the entity has always been Citadel. There was no precursor to that. But. But it's a fair take that like clearly people can blow. Can. Can build back up after there's a. Yeah. I mean there's a lot of comparisons to pt. Right. Yeah. They're saying, oh, this is also kind of. Yeah. Lose take. Right. Going to vc. Yeah. Then you can kind of do the long only. Yeah. The Real. The real hack would be to just raise the smallest hedge fund ever, $10,000, lever it, blow it up and be like, wow, I'm post fall. Oh, yeah, he's post fall. He's post fall now. And so, but, but if you do it with like such a small all but you can still be like, oh, man, I learned so much. That was really crazy. Those are crazy, crazy times. I lost $500. Ready, ready for the real fund now. No. Leo still made incredible returns. His fund will do incredibly well in the long term. Lots of people coming out in support. One person that's not in support, Joe Eisenthal is going back and forth with Tracy. That's hilarious. This is funny. So. So Joe has been live tweeting this. He's been making a bunch of great points and just illuminating the deeper level of what's going on with prime brokerages and all these different aspects of what's going on. So Joe started by sharing the Wall Street Journal article that said that Citadel buys situational awareness stock portfolio after big losses in AI And Tracy says, why does he have to get bailed out at all? And this is another question, is this a liquidation? Is this a blow up? Is this a bailout? It would be. It would have been a very different conversation if this had been like a government bailout of situational awareness. That's not what happened. But Tracy says, why can't we just let the speculators fail? Joe Weisenthal says, who says he's getting bailed out. He entered into a transaction with a Welling counterpart. And Tracy says, isn't that a bailout? Why not just keep managing the fund? Why not be Cathie woods and have a bad day and live to tell another tale? Except there were probably too many redemptions. So it was spiraling. Joe says he got margin called and Tracy says, so it is a bailout. Just let it bail. But maybe it was too big and could see the contagion. Joe says, I don't get what you're saying. Someone gets margin called and they have to pay the broker. And the way they pay back the broker is selling off shares to some other counterparty. How is that a bailout? Like he's just selling and people associate every sale with a bailout now, I guess, but that's not what this is. This was not the government stepping in. Yeah, yeah. He was not too big to fail. No, not at all. I mean, some people are saying that he could have been too big to fail going in, but. Hmm. Yeah. It doesn't Seem like that's what happened. It seemed like there were significant losses and then they ran an auction and there were three, three parties bidding and they. And the bids came in above, above like, you know, liquidation level. So the fund is not liquidated and it remains. And so Joe, after fighting back and forth for several posts, I think we might have a different definition of the term here. And I think you do. I think you do. Very fun. Anyway, let me tell you about Shopify. Shopify is the commerce platform that grows with your business, lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Yes, this was the post you were talking about from Delian. He says Silicon Valley somehow unaware that basically all of the goats on Wall street hedge fund land have had some sort of blow up earlier in their career. Part of the game is being a live player on the field. You. He's obviously talented, never met, don't know him, and will be back. So people are in the comments. There's some counterexamples. Paul Tudor Jones. Paul Tudor Jones. A lot of the, I mean a lot of people are like wildly different strategies. They're not really like, I don't know, like there's a whole class of like mutual fund managers that were like, by design, never using leverage, never hedging anything, never going short. Like, and if you never engage in a trade that can blow up on you, by definition you can go way down and just not sell. And if you have good relationships and there's not redemptions, like if the redemptions are locked up, I mean this is like VC funds have never, like, there's not really any VC funds that have like blown up all of a sudden because it's like, okay, you invested a billion dollars over a decade and you returned 700 million of that. That's terrible. You lost money over a decade and you completely whiffed on the benchmark and it's a bad result. But there's not like a blow up. It's just like, just a mess. And so you're sort of set up for a different thing. Anyway, let me tell you about FIGMA agents. Meet the canvas. Your AI agents can now create and modify your FIGMA files with design system context. I want to keep going on this. Let's see. Yeah, the fund is still up 80% year to date. That is a crazy, crazy stat. This might surprise some, but I continue to evaluate Leopold Aschenbrenner as a live player. So Samo Bergia. Absence of setbacks isn't a technical Criteria for who is or isn't a live player. And I mean, it is funny. Like I really. I can't think of many examples I've seen of people like actually hating on Leopold. Basically everyone's defending him. I think the algorithm might just be tuned to like positivity. I got a golden retriever algorithm or something. This happens all the time where I will see the backlash to the backlash. I don't actually see the first backlash. Just see people dunking on like whatever's going on. So unacceptable. No, I'm sure it's there. And there's also like, you can sort of feel it in the replies and the anons and the snarkier people a little bit. It's out there. This is an interesting scoop from Berber Ginn over at the Wall Street Journal related to this. Situational awareness tried to sell a three and a half billion dollar stake in Anthropic to a group of investors led by Green Oaks and Sequoia. Obviously there's a lot of demand for the stock. The parties reached a deal late Wednesday, but then situational awareness pulled out Thursday morning. Turned it down. They turned it down. They turned it down. They were offered like 3.5 billion. Something like that. Something like that. And they turned it down just to grind for the public equity book. They sold that to Citadel. That obviously cleared a lot of the risk out. And they said, hey, let's keep this position. We're extremely excited about this. We're bullish. And so I don't know, I think. Will this be the subject of a book? Will this be the subject of an actual movie? Is it drama enough? Have we gotten the FTX movie yet? Because that's way more dramatic and I don't think that ever happened. Yeah, I haven't seen it. And then there was Infinity Machine. Not Infinity Machine. There was a going Infinite. Is that the one? That was the Michael Lewis book. Michael Lewis book. But that was written like before the blow up. And so it was like sort of. It didn't really tell the story like day by day, but like an in the room fly on the wall minute by minute account of this would be interesting. But it's not that dramatic because it doesn't end with an explosion. It ends with like a, okay, we're back in the fight. Which is cool. I mean it's maybe more positive outcome. And so Augustine Lebrun has taken a victory lap because he tweeted a sha256/12 29 of 2024 saying Leopold Aschenbrenner has terrible instincts and he will fail spectacularly. This is, of course, the. The Dwarkesh on door cash guest battle that's playing out. And so this is an interesting thing that you can post cryptic. A literal cryptic. I think a bunch of people do this. They post some prediction. Shouldn't you just post every possible prediction then? And then just delete the ones that don't come true? And then I think some people accuse other anons. You just post one trade and the opposite of it, and then you delete it. If everyone's wrong. Yeah. Then you look back and you. This is another way to get started in the hedge fund game. You start two hedge funds. True north capital, true south capital. One goes extremely levered short the market. The other one goes extremely levered long the market. Yeah. And then. And then after a year, one has exploded, the other one has ripped. And then you wind down the one that didn't work, and you're like, I called it isn't a bigger fund. I'm. Exactly. I don't think that's what Augustine did. I think this is his. I think this is his real take. And maybe he's. He is. He is the example of someone who has been, like, not so secretly rooting against Leopold or just skeptical. Sure. And he continues to be skeptical because he's betting Sholto $1,000 that Leopold will not be bigger than Citadel. What if Citadel just pivots and just becomes something way smaller? Like, it could just spin out, fracture. He could divest some things, break up the company. Shalter could win on a technicality here. Yeah, no, I'm riding with Shilto. Okay, well,

Yeah. Is the wedding photo AI or is this real? And is he carrying an American flag? Let's pull up this image. Yeah. This one I've never seen before until yesterday as well. I mean, like, if it's the wedding, like, the wedding's happening right now, this wouldn't exist. But I'm wondering if this, like, leaked onto the timeline from someone who was there. Also, this photo hit, like, Wednesday, and I think the wedding would be over the weekend. But it's cool that he's just rocking, carrying an American flag. International. Yeah. The real lesson here is never travel internationally, because he takes one day off, one weekend off to go to Europe, and everything, everything blows up. Now, of course, this one I was laughing at before the show. Rambo says, comparing Leopold Aschenbrenner to Bill Wang.

Seed. Well, let me tell you about ramp.com, time is money save both easy use, corporate cards, bill pay accounting, and a whole lot more all in one place. You're back. You know who else is back? Leopold Aschenbrenner's back. He says, you're gonna have to drag me out of salt, out of Situational Awareness lp. Cause he's down but not out. Little beat up, but he shared a letter that's making the rounds. Thanks to some intrepid reporters on the DBPN team that posted this. He sent an LP letter that clarifies a lot of the questions yesterday. I mean, even internally, we, we were going back and forth on like, okay, he sold a bunch of the portfolio to Ken Griffin, to Citadel. Does this count as a liquidation? Does this count as blowing up? And these are like sort of vague terms like what, what does it mean to blow up? It seems like there was definitely a drawdown. The fund definitely was underperforming that month. But what does it mean? Is the fund gone forever? Is he going to work at McDonald's as some people were trying to make it seem like it was happening? Obviously that's not gonna happen. He's gonna have a long career. Lots of people are rooting for him. I'm certainly rooting. There are some facts in this letter that we should read through. So he writes, this is Leopold ochsenbrenner to the LPs of Situational Awareness LP. We let you down this month. We came closer to permanent capital impairment than is acceptable to us. While we ultimately found a solution that protected the fund and you as investors. That was the sale of the public equity book to Citadel. There was some other structure going on to get liquidity. Said we ultimately found a solution that protected the fund and you as investors. Our intention in running the fund is to never find ourselves in such a position in the first place. Volatility is the price of long term investment returns. Over the past two years, we have delivered outstanding results. That's 100% true. Is up what, a thousand percent at one point or something like that? Yeah, something like that. I mean, it got up to what, 45 is the number? Yeah, 45 billion AUM from an original raise less than two years ago, I believe, up $250 million, which seemed crazy at the time. People were like, he's a young, he's a young first time hedge fund manager. He's got $250 million. That's crazy. Then pretty soon it was like, oh, he's got a couple billion that's crazy. Then it was like he's got tens of billions, then he's got half a centi billion. So he says over the past two years we have delivered outstanding results despite occasional sharp pullbacks. Probably they're not the first time. There's been other pullbacks in the market have probably been amplified, but never gotten to this level of actually distressing the fund in this way. He said, but our fund must always be structured such that we can take a loss and fight another day. And that's a recurring theme in this. The writing in this letter is really good. Very clear, very direct, not being dodgy, very upfront. I love the way it's written. Almost kind of like there's the PG advice to write very clearly. I think it was very kind of in that line. There's a lot of that in here. Yeah, so he says. I will make it my mission to ensure that we learn the necessary lessons from this experience. Here's where things stand. One, the portfolio experienced a significant drawdown over the course of July, which was exacerbated by extreme moves in core positions over the past week. Many AI names drew down by half or more, while our positive long, short spread reversed violently. While we could say much more about how unusual the month was, we hold ourselves to a higher standard irrespective of market conditions. Two, as these moves proceeded, we started to see increasingly adverse trading in names publicly associated with us. So this is the rumor that Martin Shkreli was talking about yesterday. This idea that there's blood in the water, unsafe. You can kind of sniff out if someone's hurting and then. Exactly. And then short sell those positions, sell those names, put some pressure on those downward pressure to actually intentionally hurt that fund. It's a knockout drag out fight there on Wall street, clearly, but that's the game you're playing. That's why you get paid the big bucks if you can pull it off. So these dynamics are essentially similar to a bank run. Crazy to put that word in there. A lot of people would be dodging that. But very, very direct. I love it. Vulnerability begetting more vulnerability. We worked to keep the portfolio within our risk parameters, but gradually this became more difficult as positions rapidly moved against us and market liquidity dried up. On Wednesday night, Thursday morning, we took decisive action to protect LP Capital. We traded a portion of our public portfolio in a block transaction to remove all leverage from the fund and prevent further losses. All shorts were closed and reliance on portfolio financing removed. We currently manage a fully paid for public book long stock and long fully paid for options with no margin liquidity risk. This restored stability and allowed us to preserve our private positions. So this feels like down but not out for sure. And he says I take full responsibility for these events. That's just the full paragraph. He just says I take responsibility, no equivocating. It's great. To be clear, this should rightly have been a very painful month in terms of the performance of our fund. When AI stocks draw down dramatically while AI technical business fundamentals are improving. You should expect our fund to be down a lot when we embrace volatility. But it should never jeopardize the fund. The fund was not shut down, it was not liquidated or transformed into a private only fund. This was something that a lot of people were speculating on was is this going to be private only? Are they only going to have their private book? Is it just going to be the anthropic position that's going to be riding or is it just going to be liquidated and they're just going to return capital LPs and just say hey, we're going to start completely fresh, do something completely different. Even like an acqui hire, like the situational awareness becomes like a desk at another fund. None of that's happening. He's very clear about this. Situational awareness is not shutting down, it's not liquidating and it's not transforming into a private only fund. He says we are continuing to operate as a hybrid public private fund as before. However, we will manage our public book on a fully paid for basis while we draw the lessons from these developments. Most importantly, we took the steps that were necessary to fight another day. I love it. A rallying cry to both the LPs and the employees. I'm sure in the coming weeks I will focus on putting in motion the necessary changes across the portfolio management, risk team and vigilance applied across the board to ensure a higher level of resilience going forward. I may continue to intensify market volatility for years to come. And that is something that is so clear outside of the situational awareness bottleneck trade, long tail, low market cap, high volatility. Stocks like I have never seen the Mag 7 trading like this where across earnings we're going to get into this with recapping meta, Apple, Amazon, Microsoft. Yeah, I think the stat was Microsoft had the biggest like day ever. Any public company. Yeah, the biggest move. Yeah. So you're seeing, you're seeing trillion dollar companies move by 10%, 9%, 15%. It's insane that Anything can happen at that scale. And so clearly there is going to be a lot of volatility. And I think he's right to point out that it is based on the AI trade. There's so much uncertainty about one little number about how the capex is going to trade back. The investors in these large companies, let alone the small ones, are moving the stocks significantly. And that makes his job all the harder. He says these were very expensive scars, but I am dedicated to ensuring they will be invaluable lessons for our organization and for myself as we move forward. My core promise to you is that we will not waste the opportunity to learn from these events on the portfolio itself. We are very optimistic about the current investment opportunity set. Of course, I mean the thesis still holds. The underlying fundamentals are accelerating at the very same time that prices have declined significantly. Thank you for your patience and your partnership. I'm fully invested alongside you. Virtually all of my capital is in the fund and I intend to work relentlessly to demonstrate that the events of this month have made me a wiser and stronger investor. He says he's available for calls, but he also says that the as an intern, update the current unaudited estimate of net month to date performance. This is for all of July, basically negative 67% sounds atrocious until you realize that net year to date they're still up 80% which is better than any investment fund ever. So people are definitely, you know, maybe down but not out that there's going to be a second act here which I think everyone's very excited for. A lot of people were praying for his downfall. It's very unfortunate to see. I mean I think this was really good letter. I mean this is like instills so much faith. Like yeah, he's completely level headed. He's not like freaking out. You're calling it another billion dollar PDF? Yeah, that's going to be the second billion dollar PDF it might be. I mean Sholto agrees. Sholta Shelter had a great take a great position. What did he say? He said prediction situation awareness will be bigger than Citadel by the end of the decade. Leopold has predicted the last two years better than anyone else. Now that he can combine that with very expensive lessons in risk. He will be unstoppable. He is my full confidence. This is such a wild post, Kain Griffin sitting there being like, you gotta ride with your boy Sholto. Like you're gonna take a shot at me like that, bro. Really? Really? You're gonna come for me like that? Because I will die Before, I am not the biggest hedge fund manager in the world, but no, I mean, I love that Sholto's coming out and supporting now. Interestingly, this is the battle of the Dwarkash guests because Sholto's been on Dwarash, obviously also a roommate, and Leopold's been on. But Augustine LeBron is a little, little deep cut in the Dwarkesh archive. One of the first Dwarkesh guests, Augustine lebrun, is taking the other side of it. He says, even odds, I'll take the other side. It's gentleman's bet. And so they're putting money on the line. How much leverage will they be using? That's the key question. Sholto says $1,000 for fund. Anything more is better put in the fund, even. And Augustine lebron says done. And Sholto says deal. And Augustine says, it's in my Google calendar. They're going back and forth now. John Shu wants to get in on the action. Everyone's doing derivative bets on whether or not Leopold surpasses Citadel by the end of the decade. So check back December 31, 2029, I guess would be the end of the decade. Yeah, that counts, right? So when the clock strikes midnight, there'll be a countdown. 10, 9. Everyone's going to be new decade tech. People are just going to wonder which one is bigger. This is the biggest thing of the decade. Hopefully the situational awareness will be taking over Times Square for a ball drop to celebrate being bigger than Citadel. No, I mean, if it happens, it's going to happen like way before then. It won't be down to the wire. But let's pull up first this ad for system.

In just a minute. Where do you stand, Tyler, on Oppenheimer vs Odyssey? I'm going Oppenheimer as well. You're going Oppenheimer? Yeah, yeah. I rewatched Oppenheimer within a couple days of seeing it the first time, and I think it's the movie that I will come back to more frequently. But also I think I like the story more because it's more recent history and it's easier to draw on, I suppose. I don't know. I don't know. Let us know. In the chat, Derek Thompson had a funny post here. He said, I went back and read some criticisms of.

Talk to you soon. Goodbye. Let me tell you about CrowdStrike. CrowdStrike secures AI and stops breaches. Your business's AI. Their business is securing it. Head over to CrowdStrike. We have Trey Stevens, the co founder of Anduril, general partner at Founders Fund. Trey, how you doing? Hello guys. Welcome back to the show. I don't know if you've met Tyler before. Jordy's out today. Jordy's out sick. So we have a guest co host. But great to see you. How you doing? I'm good, can't complain. How is the market turmoil affecting you in the venture world? You mean the public market turmoil? The public market. I mean first time in my career that I've seen trillion dollar stocks mag seven companies moving by 10% in a single day. That seems crazy. You have the situational awareness thing going on. The public markets seem insane and sometimes, you know, gyrations in the public markets reverberate into private markets. Sometimes they don't. Sometimes you're insulated as someone who can hold longer, who doesn't have to deal with that. But I'm just wondering if any of that chaos is bubbling up to what you're seeing in your seat. Well, I think, I think there's certainly like different places where that intersects. You know one of the things that Brian Singerman, who's one of the former partners here at Founders Fund, he used to tell us venture capital is a micro game, not a macro game. What matters is have you invested in the generational companies in every kind of era. And I think Founders Fund has performed incredibly well in that regard. We have large positions in some of the most important companies of the last 20 years. But obviously there's questions around things like SpaceX has gone public, there's been a reset back to basically the IPO price. The lockups haven't even released yet. So there's like all these questions about where that's going to stand as that kind of lockup happens over the next really two years almost. So I don't know, I guess is the answer. I'm not a finance person at heart in any way, so I understand very little about the public markets. But one thing that I hope happens is that as there's a reset on the public market side, I'm hoping that there will be somewhat of a reset on the private side as well because the, the market makes absolutely no sense in venture capital right now. Okay, is there, is there a steel man here where we're. The capex intensity that we saw work out in hard tech companies like SpaceX, like Anduril, you know, this is a company that's doing something very important. It's going to take a little bit more capital to actually build something really hard. It's not just a couple lines of code and then an elegant, you know, website that just prints money. You're going to have to invest some real money to make Space X work, to make Android work. And that's coming for AI companies now. They have big training budgets, they have very expensive talent. Isn't there a reason why valuation should be higher? Because the, the rewards that people are going after are so much more, not just capital intensive, but potentially bigger. Well, I mean, certainly if the outcomes are these like multi trillion dollar businesses, then yeah, you know, you can kind of blend that risk over, over many rounds at higher price. But that's the question is like, is that necessarily the case? Are we going to have $10 trillion IPOs over the next five years, or is it going to look more like a reversion to the mean where we have companies like anthropic companies like OpenAI, companies like Space X, but then a lot of companies that are really successful, really interesting companies that are, you know, Uber scaled or Airbnb scaled or even, you know, when Meta first went public, you know, those would be tremendous venture capital success stories. But not if you know you're pricing a seed round at a billion dollars. Yeah, well, how do you, how do you advise founders who might have the option to raise that billion dollar seed round? Because you're in this sort of conflict of interest territory where if I come to you and I say, hey, I got an idea, I think I'm going to raise a billion dollar seed round, you could be, you know, saying, I don't know, this doesn't seem like it's going to be $10 trillion anytime soon. Maybe you shouldn't do that. But then I come to you and I just say, hey, you're just the vc. You want a good deal. Yeah. I mean, there's two kind of schools of thought. The first school of thought is to say you should do that. You should raise as much money as you can at the highest price possible, build up a war chest and survive until you can justify that price. And that might actually be the right answer for some companies. I don't want to say that that's always a bad idea. That might be a right idea. Obviously the worst thing you could do is raise a very small amount of money at a very high price because that's where you're going to get yourself into trouble. But then the other side of this is like, can you build a financing strategy that allows you to grow responsibly over time and that you will see continuous momentum with every fundraise and you're never going to have your back against the wall? That's been the approach from the very beginning with Anduril. This is what we've tried to do, and I don't think we have any regrets about doing that. We could have raised at a higher price at every round, but it's been nice to be able to go back to our employees and our investors on an annual basis and say, look, look, we just did a 2x markup. Look, we just did a 2x markup. LookSight, we just did a 2X markup. So it feels more sustainable and keeps us tethered to our company performance more than this belief that it's going to pay out at some point? I'm sure you guys watched the HBO show Silicon Valley, but there's the hilarious scene where what's his name? Rich or whatever? Richard? No, the Tres Comas guy, whatever he is. Oh, yeah, yeah, yeah. Where he has that famous line where he says, no, whatever you do, don't get revenue. Once you have revenue, you're going to be judged on the basis of your revenue. Yeah. Is is $1 billion seed round. Is, is, is, is too much capital? Like, is it, Is it increasingly intoxicating? Is the level of intoxication with over funding at the early stage, is that problematic? Are there some founders that can work it out and not develop a culture that overspends early? Because your point was like, if a bunch of money shows up, you need to actually have it as a war chest. If you just have it flowing out easily, you're just going to run out of it and then you're in a corner. But, but I'm wondering, like, is there, is there a, is there a path to actually setting your company up for war chest mode as opposed to just, oh, we're just spending freely and we're just going to burn through this? I'm sure there is a path. You just don't see that discipline exhibited often. And you can see this in every bubble that's happened over the last 20 years is that everyone believes that they can have a billion in the bank and be responsible with it, and very few people can actually pull that off. I think there's something wise about metering that out and having a plan rather than just yoloing into the abyss. But you know it's so hard because, like, like I said, in some cases, it might actually be the right decision to raise as much as you can at the highest price possible. In defense tech specifically, it feels like this was a category that was extremely hard to get revenue because you had to work with the government. The government is just a little bit slower than selling to your friend in B2B SaaS or something like that. And the traditional path that I remember talking to you about was sbir. And then at some point there's the Valley of Death, and you try and get to the program of record. But following the new programs in the Department of War, it feels like there's more of a menu, there's more ways for hard tech companies, defense tech companies, to work with the government just to get to revenue. Can you explain a little bit more of what you're seeing in terms of early, mid stage, different ways for defense technology companies to actually grow their business, prove what they're doing? And has it actually changed over the last decade that I'm feeling like there's a change? Yeah, it really has. I mean, I was at Palantir very early, and, you know, that early era of the, you know, 2005 to 2015 range, where Palantir and SpaceX were really the only players that were doing this, I mean, it was the wild, wild west. Like both companies had to sue the government for contracts to go through on the basis of this thing called Title 10 USC 2377, which is like a commercial preference authority. So there was really no path. It was like if you got to the point where you had a product that was worthy of going into production or going into scale with the government, they would do everything they could to block you. And go back with the primes, that's shifted. That's not the case anymore. There are much better pathways. In the early Palantir days, we worked with Inkitel, which is the CIA's venture capital firm, on these work programs. And that's the same way that we got started at Anduril, actually. And, you know, right around that same time, Raj Shah and Chris Kershaw were standing up the Defense Innovation Unit and making that like, a relevant contracting pathway. You know, all of the, like softworks, AFWorks, Army Futures Command, they all, like, started developing pathways for companies to get, to get funded. Now there's Strapfi funding, which can come through under the SBIR umbrella that allows you to get, you know, tens of millions of dollars in matching funds from the government as you're scaling, there's Bridging funding to go from pilot to prototype to production. It's much better understood. But the problem is is that a lot of these are still at the end of the day funded out of the research and development budgets rather than production budgets. So you know, the US government has a history of kind of this let all flowers bloom strategy where they are always happy to give out low single digit millions of dollars to hundreds or thousands of different companies. But there's a big difference between having you know, 10 to 20 million dollars of research and development funding and having billions of dollars of production funding under like major weapons acquisition programs, program offices, things like that. And that muscle is still, it's still needing to be developed. It's early days. When you say the let all flowers bloom strategy, I'm thinking back to where when we talked about like this idea of the Anderal for X is and all. There's a, there's a lot that Anduril can solve. At the same time you've partnered with companies like Dirac, you've partnered with other new startups in the hard tech, defense tech space broadly. And I'm wondering if there's maybe more opportunity now, now that we're, you know, maybe a decade into the defense tech boom, maybe five years, a couple, you know, we're deep into this. There's a path you've charted it is there more opportunity for new entrepreneurs to pursue deeper in the supply chain opportunities? See an Anduril as a customer maybe instead of the government as a customer? Absolutely. I think not only instead of, but also in addition to, I think a lot of these companies that are working down the supply chain, they have relevant government customers, they have old legacy customers like the primes that are still needing to correct some of these problems or become more efficient as well as the big successful tech companies like the space X's, the Tesla's, the Andurils, things like that. So I think that the opportunity is definitely there. It's just a matter of like you know, having a novel idea and being really passionate about driving that single thing forward. And I fear that when you look at the defense tech industrials kind of ecosystem right now, it's a lot of hype, it's a lot of like people that want to be part of a moment. And the reality is that's not how tech investing or tech startup creation has ever worked. Once a thing is a category, it's kind of too late. If you were a space tech investor and you didn't invest in SpaceX, you probably lost money. If You're a crypto infrastructure investor and you didn't invest in Coinbase. You probably lost money. I think that we're nearing overhype of volume in defense tech that is going to make it very difficult to separate signal from noise. I assume you're referring to on the venture side specifically. I'm interested in an idea of like, is there an opportunity for an entrepreneur who says, look, I'm not building a next trillion dollar company. I don't want money from Founders fund. It's not a fit. But I need some private equity dollars to go buy an old factory. And I'm going to make drone motors, small drone motors in America, pretty cheaply and efficiently, and I'm going to sell them to a bunch of people and it's going to be, you know, a $50 million revenue business after a decade and it's going to continue chugging along at 10% growth. And the EBITDA is going to be reasonable. We're going to pay back the debt and we're never going to IPO it, but it's going to at the same time provide a career and jobs, but also a financial return for the right person. But we're not going after the, you know, oh, hype and venture funding and the big raises and all of that. Well, I think the intersection of both of our points is that, yes, I think there's a ton of room to do that. And secondly, all of those companies that are doing the things that you're mentioning are trying to raise oodles of venture capital dollars. So if someone actually wanted to build this business in a more normal financial structure, yeah, I think it makes a lot of sense. But there's 20 of the companies that you just mentioned. They've all raised tens of millions of venture dollars. And I'm not really sure what the end game is. Yeah, I guess we'll find out. We'll find out. Take me through some of the recent Anduril announcements. I want to know about the Thunder autonomous attack aircraft. How did that come together? What is the program? What is the scale up? What's the manufacturing look like for that? Yeah, so Thunder is an autonomous attack helicopter that we just announced at Farnborough in the United Kingdom last week. You know, the proliferation of drones has turned the near surface fight into like a robotic kill zone. And so crewed helicopters, their crews, they're tremendously at risk. And so basically the same way that we approach Fury, the collaborative combat aircraft that we can talk about as well, we just rolled our first unit off the line to the Air Force earlier this week. But the same kind of concept with collaboration with manned crews is what we're talking about here, except with helicopters instead of with fighter planes. So that process is fully in flight. We've been working on this project for years now. We've completed test flights with a full scale surrogate and we're planning for Thunder's first flight for next year in 2027. What is the shape of the autonomy? Is it like you have one person kind of overseeing a bunch of these different crafts or how do you guys think about that? Yeah, you can kind of think about the helicopter pilot. Whether it's, you know, an Apache or whatever, they're like Ender in Ender's game and they have this, you know, fleet of autonomous vehicles that they can kind of command and control from the cockpit of their own aircraft. And you know, there's this really cool anime video that's the third in a series that just came out when we did the launch last week. And it kind of explains the concept of operations for this, which is, you know, you don't want to be putting the Apache and the human beings in the helicopter in harm's way when you're engaging with all of these autonomous assets that are creating risk out forward. So you want these to be able to go out and take shots, give you a better sensor view of things or even become attritable and take the shot for you so that you're not the one that's eating that missile. They are. We talked years ago about the idea of building tradable systems, not building capital assets, these huge aircraft carriers, these exquisite systems. But if I'm charting the size of what you're building year over year, we go from the Anvil, we go from a very small drone, something bigger and bigger. If I chart it out, it looks like C130 is coming up any day now. Am I off? Is there a limit to this? Or is there a world where, you know, everything up and down the stack is on the table? Well, at some point it becomes non attributable. Right. Like, you know, the danger of an aircraft carrier is that there are 5,000 service members on a 20 plus billion dollar vehicle that can be destroyed by a single missile. That's a bad trade. We don't want to, we don't want to be doing that. Yeah, but you know, to the extent that there are assets that are physically larger but will be better suited to robots, yeah, I think that's very much in play. You know, the, the Dow has Been talking for a long time about Auton tanker aircraft for aerial refueling. That's the sort of thing that if you could actually get an autonomous system to do that really well, logistically, it becomes easier, reduces risk, in theory, if you can get it to work really well. And it also is kind of like a prime target for risk reduction. So I think there are larger assets where it does make sense, but the trade off is really in human lives and total cost. Because at some point in either of those calculations, these things are no longer considered to be attritable. Yeah, talk about fury. And the Ohio production line arsenal won. How did that project, 18 months from start to finish, I think is roughly the number. But was that the original plan? Were there setbacks? Was there a risk of not hitting that? What did it take to actually nail that? Because that feels incredibly quick. Yeah, it was incredibly fast. We kind of did the ribbon cutting for the land that we were building on in January. I think it was January of last year of 2025. And then factory is up and running in May of 2026. We rolled our first fighter plane off the line on Monday of this week with the governor. And so things were very, very rapid. We could talk about this for a long time. There are a lot of advantages that we had going in. We had an existing building, an 800,000 square foot building. It was just a shell, just concrete shell. But we weren't starting totally greenfield. We had utility support to the site, jobs. Ohio, which is the economic development agency for the state of Ohio, was partnered very closely with us on making sure that we had the resources that we needed to get that facility up and running. But of course there is like a tremendous operations effort that had to go into building, like designing the facility, building out all of the office space, setting up the factory line, and that's still a work in progress. We're not totally done with building one, but we've already stood up the shell of building two next door. So that will be in flight as well. You know, internally at Anduril, the person that eats all of the garbage around this is Matt Graham, my co founder. So I would hesitate to pretend that I know what I'm talking about, but Grim is the man that made this really difficult project happen, alongside his team on the manufacturing side. On the operations side, they really put off a heroic effort. So I don't know if you can actually share this, but are there long lead times for specific machines that you sort of needed to think about sourcing and even signing contracts with, like years in Advance. And then you were like, okay, we have the site so we can go drop this one expensive machine in the facility and get going faster. Because when we hear, when we talk about, like, semiconductor supply chains, like everything stretched out 24, 36 months, and it feels like if you were to sign, get the building and then start ordering things and actually building the production line, you'd be behind schedule on day one. Yeah, I mean, if we're comparing it to the semiconductor supply chain, nothing like an ASML EUV machine or anything like that, to be clear. But yeah, of course, there's all sorts of things you have to figure out in the supply chain. Not only the tooling, but also the materials that go into construction of the products that we're building. So natural resources are very challenging. Rare earths are very challenging. And we're working closely with the Department of War to ensure that we have offtake agreements to get those natural resources that we need to build the things that are important for them. They've been a great active partner with us in that. And in addition to that, I would say that labor becomes a big bottleneck. You can't, you know, say 18 months ago. Yeah, when we're ready to open the factory, when everything is built, we're going to start hiring people. No, we started hiring people the day we announced that we were, we were doing this. And we had them work out of our headquarters in Orange county, the entire team of people that are building furies at Arsenal 1 in Columbus, Ohio today. We're, we're doing the exact same thing a few months ago in Orange county, where our headquarters is located. So you have to really get ahead of every aspect of this, and it's a very complicated task. But again, we're really happy to see that we have things up and running and rolling off the line today. Speaking of jobs, what is your pitch for mandatory civil service? Engaging in solving the. The jobs crisis that may or may not be coming. Walk me through your latest thinking on the role of civil service in the modern American society. Well, you know, I've actually had this thought for a long time. For probably close to 20 years now, I've been kind of beating this idea around. You know, it's not like a super contrarian idea, actually. Like there are a bunch of countries across the world that have some version of mandatory civil service. In fact, we have aspects of this inside of our own society. If you think about things like jury duty or being subpoenaed for court, or there are instances throughout the last, even 50 years where people were called into service to do things like road construction and maintenance. So I understand there are all sorts of questions that you would have about the 13th amendment. I am not in a position to adjudicate those complicated constitutional issues. But I think that there's something really important about ensuring a sense of civil duty into our next generation. And I don't think that needs to be in a military service. I think it could just as easily be like going and working as a clerk at a county courthouse. There's all sorts of things that we can do to pull people in and have this feeling of shared progress that we all owe a responsibility towards. And I think if you were to go to Singapore or to Israel and ask them, is this a societal good or has this been a disaster? Is it forced labor? Is it involuntary servitude? I think they would all say no. This is actually pretty great. You know, it was a difficult thing that I did, and I'm glad that I did. I learned a lot. I met a lot of people that are still part of my life today. And I think that it would be wise for Americans to take a hard look at ourselves and say, is what we're doing right now working? Like, are we happy with the path, the pathways that have been created for our own kids? Are we happy with the political tribalism that's resulted from a lack of civilization, civic duty? I would say no. I'm not particularly happy with this. Is my particular recommendation the right answer? I don't know, but I think we should try things. Yeah, no, I love it. I have a hot take I want you to react to. I believe that the TSA is underrated. I think people complain about the TSA constantly, say it slows me down. I'm just trying to get to my airplane. But when I look at the record of the tsa, it seems pretty much flawless. Seems like they've done a great job securing our airways. And when I actually experience and think about the people there, I've had positive interactions. I haven't actually been offended by anyone or anything. It feels like a great. Yes, maybe it's a jobs program, but it feels like a great job. It feels like people, they're going and they're working in a clean, air conditioned building. They're interacting with other Americans, meeting other people. I think that TSA might need a re evaluation. After being the butt of every comedian's joke for two decades. I mean, there are aspects that I would probably agree with you. I still do think it's sort of a jobs program. But again, that's maybe not the worst thing. Mandatory service is tsa. Yeah. Well, yeah. How does it fit in with, like, mandatory civil service? Yeah, I mean, it could definitely be into something like that. I mean, the reality is, like, it's actually gotten pretty efficient. Like, I don't know if any of you. This is. This is cbp, not tsa, but I'll use it as a similar kind of counter. I don't know if any of you have gone through global entry at one of the large international airports, but you just literally walk through now. It's amazing. It's unbelievable. Like, you know, I think that we have the ability to lead the world in the way that we, you know, process travel safety, that we handle, you know, visas, that we handle immigration. And I think the Department of Homeland Security has actually done a pretty remarkable job, despite all the criticism that they've been levied. Yeah. I think that there's. There's two steps to the argument, to the discussion around any sort of mandatory civil service is first, you know, yes or no. And I think you made a good case for. For. Yes, in some capacity. But the second stage is, okay, what will these civil servants be doing? Well, we'll have a new. A new labor force. And how will. How will, you know, we democratically decide to deploy these folks? Will they be repairing potholes or building parks or building data centers? Building data centers, potentially. That would be great, but that would be politically spicy. It might make people, like, a lot more. They're like, hey, I got a hard day's work. I feel good. I feel like I accomplished something. The building's there. I don't know. But anyway, another random take. Oppenheimer or the Odyssey? Which one did you like more? I liked the first two thirds of the Oppenheimer better than I liked the entirety of the Odyssey. Okay. But I liked the Odyssey more than the last third of Oppenheimer. Oh, interesting. Okay, that's good. What can you tell us about. They're both at the bottom, though, of the Christopher Nolan canon, alongside Tenet, I would say. Oh, you were going to put Tenn the bottom. I like Tenet. I think it's so good. Tenet's at the very bottom. Tenet is inarguably the worst Christopher Nolan movie. What's the best one? Dark Knight. Interstellar. What did you not like about the Odyssey? I didn't. I'll be very clear. I didn't say that I didn't like it. I just said it wasn't as good as any of his other Movies other than Tennant. Yeah. If it was any other director, I would have came out of the movie theater and been like, that was great. I'm glad that I watched that. But it was Christopher Nolan, so my expectations were much higher. Totally. It was the same thing. Was like, that's obviously the best picture. I can't think of any other movies that are going to be better than that this year. At the same time. I don't know. I'm going to rewatch that this year. I don't, you know, I don't know that I would rewatch it. I don't think, like, I watch Interstellar every year. I don't know that I would watch the Odyssey, you know, again, ever. Yeah, we'll see. Yeah. Also, there is just. It's a type of film. It's like a moment. It's a whole experience. You got to see it in imax. It's three hours. It's a, you know, it's. It's very much a slog. Whereas, you know, you can throw on the Dark Knight and it's just like a. It's like a party almost. It's like a very entertaining. It's a popcorn. This is not a. This is a whole, like journey that you're going on. That's the point and that's the experience. Anyway, what can you tell us about the future of Founders Fund SpaceX? We were talking to an LP in Fund 2 yesterday. I think you said it's like potentially the best fund in human history. Are you resting on your laurels? Are you going to be incubating new things, bringing on new partners? You signed some new talent? Tell us what's going to happen with Founders Fund over the next couple of years. Yeah, the worst thing about fund to at Founders Fund is that I was not at Founders Fund, so I do not benefit from. From that fund. But yeah, it might actually be the greatest fund in venture capital history. That's a lot of booing. But yeah, the fund is doing really well. We, you know, we have a main venture fund and a growth fund. We have awesome names in both of those. We're still very bullish about the, again, the micro level, the companies that we're investing in. Even if we are a little bit more bearish on the macro. We just added Ryan Biermeister to the team as a partner. She and I worked together when we were in our early twenties at Palantir and then she went off to Meta and then to OpenAI and we just got her to join us over here. So really excited about what the future holds. We have a great team. We're all vibing really well. Everyone wants to know, is Mafia an official part of the Founders Fund recruitment process now? It is definitely not. Okay. And the joke that I made on X about this is that Ryan got crushed in game one of Mafia. So if it was actually like a recruiting tool, that was not a great interview. At the same time, I feel like she entertained. She seemed like someone you would want to meet with and do business with for sure. She's very good. She's actually incredibly talented. Talented in Mafia. She just had a bad. An unlucky run. It could be you could go into a game of Mafia and display that you're going to backstab a founder that you're working with and that might be disqualifying. Maybe. I don't know. That's true. That's true. Although isn't that the whole point of Mafias to backstab other people? Yeah. Yeah. So I kind of want the backstabber on my side so I work with them. What about Ria? Are you happy that Founders Fund has stayed in the private markets or do you wish you could be just writing, just playing micron a little bit right now with a little bit of. Oh no, I'm, I'm so, so happy that we've stayed true to our, to our origins. We are a venture fund. We invest in early stage companies and support founders throughout their entire journey. And I think there's all sorts of cool stuff that's happening. Andreessen is doing that, Thrive is doing that, General Catalyst is doing that, Sequoia is doing with their evergreen funds. These are all very cool concepts. It's just not us. You mentioned Drive any plan to buy a sports team? Hopefully. Hopefully soon. Well, thank you so much for coming on the show. Wait, okay, last question. What is that? What is that sword behind you? This is Anduril. That's Andrew. Oh. Oh yeah. That's the sword. Lord of the Rings on to real. Yeah. Beautiful. Is there a criteria for getting one? Is this like five years of the company and you get a sword? Are there any anderal like totems or artifacts that come. You can just go online and buy one of these guys. You don't have to work at Andoril. Are there any totems? Well, I mean we do have an internal like exclusives gear store and I should point out that I'm also wearing one of our external available swag. So this is@gear.anduroll.com you can pick up this sweatshirt and a bunch of other. A bunch of other cool gear, including our partnership with nascar. So there's all sorts of Android NASCAR gear up as well. Right now there's an anduril Hawaiian shirt, you know, hearkening back to Palmer's love of Hawaiian shirts. Yeah. So Miller time's been cooking. Jeff Miller's been cooking. Jeff Miller is cooking, no doubt about it, a bunch of good stuff. Well, thank you so much for taking the time to come chat with us. Sorry we kept you a couple minutes late. Have a great weekend, and we'll talk to you soon. It's all good. Cheers. Have a good one. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. And when you're finished, head over to the New York Stock Exchange, because if you want to change the world, you got to raise capital at the New York Stock Exchange. Up next, we have Blake Resnick from Brink Drones. He's going to be in the TVPN ultradome in just a minute.