Team deathmatch. We are experts. Triple blaze. Let's just rol. Market clearing order inbound. Come get up. You're surrounded by gentlemen. Hold your position. Break 1, Strike 2, Activate. Go. Golden retriever mode. Market clearing order inbound. Founder, You're watching TV. Today is Monday, August 31st. We are live from the TVP at Ultradome. The temple of technology, the fortress of finance, the capital of capital. We are back. We missed you. Is still with us. Let me tell you about ramp time is money save both easy use corporate cards, bill pay, accounting, and a whole lot more. Oh, feels so good to be back. Two weeks is a crazy amount of time to be away. I don't understand how children do this for weeks or months at a time. It's wild, it's wild. It's crazy. It's a lot of video games. I was sitting there, had somebody this morning say, it feels like it must have gone by so fast. And I was thinking, no, it absolutely didn't go by fast at all. It felt like two months. Yeah, it felt like two months. We manipulated time. Yeah. But thank you to the Microsoft Team, the Activision team. They sent us codes for. For Modern Warfare 4. My review is in. It's fantastic. I love it. It's a really good game, really polished. And the kill boy. Did you revert back at all? No, to didn't really have the opportunity. I was joking about full relapse, just gaming from dusk till dawn. But that is, in fact, I had a relapse. Not in the cards these days. Pizza. I was eating pizza almost like twice a day at times. Eating a lot of pizza. Surfing a lot. That's good. A lot of family time. Do you think pizza is potentially addictive? I. Do you think that there could be a settlement? I do think. I don't think there could. I think there should be. I do wonder, like, because cigarettes, it was very. Cigarettes were very scientifically proven to be addictive. Like, you can give nicotine to a mouse and it will like go and try and get more nicotine. Like, it's the most cut and dry. You can run the experiment with, you know, any animal. And I would assume that in the blood, based on my own personal experience, pizza and surfing fall into that same bucket. Oh, you give a mouse get barreled. Yeah. If you give a mouse a cookie mouse a barrel barrel. He's going to get out of that. He was going to want to grow a lot more with a line. Yeah, yeah, for sure. But it will be interesting to see where the addiction stuff goes because when, when all this came up, you know, the meta social media addiction, I was kind of like, give a mouse to scroll. Like, I understand that people were trying, I don't know, can you get mice or monkeys addicted to reels? Maybe, I'm sure. Almost certainly. You think you could get a monkey addicted to Instagram reels? I think 100% we're going to find out. We can't get any monkeys because they're sold out. No, no, you can get a monkey. You just have to pay top dollar. They're expensive, but you can buy one. But I do. It did seem like it was a tougher sell because it was not a chemically addictive product. It was more of a psychological thing. There's a benefit to it. There's a free speech element. All very complicated. I was not expecting to see a big settlement when this first came up years ago. I thought it was going to be more nickel and diming, little case by case things. But in fact, there has been a huge settlement by Meta. Two days ago, or this was when this was written. This was August 26th. Meta announced settlements with attorneys general representing 48 states and the District of Columbia and three US territories. So there were only two states that held back. I believe it's Texas and New Mexico, but over allegations that Facebook and Instagram harmed children and teens. So this has been boiling up for a while. There were smaller settlements. This is the big one. And so the high level numbers here. Meta will pay the states $12.7 billion over 10 years and it could go up to 18 billion if other platforms join the settlement. It is a big. Is a big number. It is a big number. And honestly, if you are a state legislator or you care about having your state funded for a variety of things, this is good news. This is a size gong moment for the states because they will be getting this money distributed to them and they can use that to do whatever states do. From education to health care. There's a lot of things that states can do. I know Tyler's pissed because he doesn't like the government getting a dime, but it is a size gog moment for them. I did find a video of a chimpanzee hitting reels. If we can pull this up. Yeah, let's pull this up. Let's pull this up. This is key. This is important. This is very important. Definitely more important than. Ooh, okay. Yeah, this looks okay. Maybe social media is addictive now that I'm seeing this. This is. Yeah, it might be universal if it crosses. Wow. Using it so intuitively. Yep, yep. I mean that's just good UI design. Come on, you gotta give the UX engineer some credit here. Make it so easy to use that even a monkey could use it. That was the prompt for that UX engineer and they delivered. This is. Yeah. If it crosses. If it crosses species barriers, I'm much more likely to agree that something could be addictive. But. Well, and here especially, you know, he's looking at other monkeys. Oh, okay. That's a little. I don't know. Yeah, no, I know. But an algo feed, it's going to naturally start show monkey content. A lot of those videos. Yeah, yeah, makes sense. Anyway, so everyone has been drawing analogies to the tobacco industry's Master Settlement Agreement around this because that's the last time there was a huge, multi billion, tens of billions of dollar settlement between a large organization around addiction and a bun of states. That's what's happened when cigarette companies signed the Master Settlement Agreement. All the companies agreeing to pay all the states. But the structure was a little bit different and there's some nuance there. And so Eric Suefert over at Mobile Dev Memo, friend of the show, says the sufinator he was saying this is not necessarily the he said Meta settlement is no big Tobacco moment. That was his takeaway in Mobile Dev Memo. You should go subscribe because this post is a paid paid post. But I'll take you through some of the interesting analysis that he put together. I was debating with a lawyer friend of mine about this over the weekend and have some interesting details here. So Eric writes, and the headline here is that what Meta is going to pay as a percentage of revenue or what the social media industry will pay as a percentage of revenue relative to what the tobacco industry paid as a percentage of revenue is off by almost an order of magnitude. So let's put them in context here. So he says Meta's settlement is comparatively paltry. A white paper from the USDA using BLS data estimates that the total US consumer expenditure on tobacco products in 1998 when the Master Settlement Agreement was signed was roughly $57 billion a year. $57 billion. Certainly good if you're a big tobacco shareholder, I suppose. Annualizing the roughly 250 billion in combined tobacco settlement payments over 25 years produces an average of 10 billion per year is what they've been paying. And so that was equivalent to 17.5% in 1998 domestic expenditure. So you could think about it as like when tobacco got hit with like you're addictive. What did the government say you got to pay? They asked for 17.5%. Very, very meaningful. Very, very meaningful. And that's, that's off the top, right? Yes, yes. This is revenue. It's not like, hey, you got to give us a percentage of your profits. Yes. And so it's calculated in a more complicated way. It's not exactly a percentage, it's on a per pack sold, but it is inflation adjusted. And so there's a whole bunch of other mechanics that really have, have allowed the Master Settlement Agreement to deliver tens of billions of dollars on an ongoing basis. Even while now tobacco sales are slumping, cigarette sales are declining. And so that does create more complex dynamics for the states. But still it's 17 and a half percent of the industry's revenue coming to states as effectively an extra tax on top, which I think a lot of people would agree is good because cigarettes are bad. Right. But what's going on with Meta and social media? So, Given Meta's full year 2025, US revenue of 75 billion roug per the company is 10k its average annual payment. If they pay the full 18 billion, because they're paying that over 10 years, it's 1.8 billion. So what is 1.8 billion of 75 billion? It's 2.4%. So instead of 17 and a half percent. Sorry, where are you getting the 75 billion? 75 billion was their US revenue. Oh, US, US. Globally. Globally. It was like, hundred. Yeah, bigger, Bigger. But you have to comp it to domestic because that's where this is taking effect. Right. So it would be even lower if you look at overall revenue, which is a good point, but you can think about it as tobacco had to pay 17.5% of domestic revenue. Social media, 2.5% of domestic revenue. So not quite order of magnitude, but a significant gap. Significant gap there. And so it's important to reiterate here, says Eric Seufert over at Mobile Dev Memo, that the MSA payment, the Master Settlement Agreement payment schedule, is inflation adjusted and tracks unit sales met. A statement settlement has no such mechanism. So let's say that matter doubles revenue. Their percentage they'll pay is lower. And then let's say inflation kicks in, they're still going to be paying, you know, this $1.8 billion a year 10 years from now. Could be, could be pennies. If hyperinflation happens, who knows? Yeah. The only reason it felt somewhat significant from a dollar standpoint is because man, Meta is just spending so much money on AI. Oh, interesting. Like yeah, Like, I. You can just imagine Zach being like, I really wish I could have given that to Jensen. Right. So I had the opposite. I had the opposite read, which was I saw 18 billion. And I was like, that's like, you know, a month of AI spend for them. And I was like, this is not that much money. And then, of course, it's over 10 years. And so when you think about it as, it's $1.8 billion a year, so that's 100 mil a month. That's their token budget right now. I don't know, maybe less. Overall, it's insignificant. But when they are spending more money than they are making, it hurts a little bit more. Yeah. So for sure. For sure. So the other issue that came up here that is different from the tobacco master settlement agreement is the question about the First Amendment, the free speech issue. So tobacco, the tobacco industry was restricted from advertising cigarettes as part of this master settlement agreement. And there were, there were other cases that led to no more cigarette advertising. And of course, that is somewhat infringing on the corporate speech, but that's a lot easier to deal with than consumer speech. And Meta is in an interesting place because the Supreme Court has deemed that social media is a. Is a critical, critical vehicle for citizens to exercise their free speech. And so, like, it's very difficult for the government to come in and say, we are going to ban social media because it is a vehicle for Americans free speech, individual citizens, free speech. So even though, even though everyone thinks, oh, they're punishing Meta, it would still, there'd be plenty of, plenty of American citizens who would say, wait, my free speech rights have been infringed upon. So it's much harder for the government to come down with some standard, traditional regulation. And that's why we're in this world of regulation through litigation, which is that Meta's arms have been twisted. Like, they have to pay this. And then we'll go into what they're doing around actually changing the product for teens and underage users because. And they're all doing that because of these lawsuits, not because there's a new law saying you can't do this. And a lot of that is, like, there are plenty of topics that are pretty consensus controversial things like eating disorders and self harm that people are uncomfortable with and think they don't have a place on social media. And yet free speech rights do actually protect those. So if you want to talk about your eating disorder, like that is your free speech right. And Meta can't infringe on that as much as it's very tricky for them to do that basically. So there's also an interesting regulatory capture angle here and it's relevant to AI because in AI, everyone's talking about regulatory capture as something that the companies want. Like they want regulation. And this is sort of the opposite example. So regulatory capture or regulation, like the benefits of regulation usually benefits incumbents and big companies for sort of two reasons. One is that typically when the regulation's being written, the big companies, they have lobbyists, they have offices in D.C. they also have PACs and all sorts of different political vehicles to donate to make sure that the regulation gets written in a way that is at least a little bit favorable to them. They can just move the needle a little bit in their direction, hone things how they like. Right. And then second is that once the regulation goes into effect, they have the resources and the actual margin dollars to go and comply. And so if all of a sudden to set up a new social media website requires age verification, Age verification can be expensive. Like we have to do it Lucy, for everyone that buys nicotine products. And it's like a dollar for every checkout. And if the average order value is like at one point it was like 50 bucks, that's like 2% of the top line that's going towards regulation. If you're a bigger company, you have other ways of massaging that cost. Basically what's interesting about this is that we know the social media companies did not ask for this regulatory capture and yet they are benefiting, which is interesting. So like meta stock is pretty flat through all this. It's not existential. No. It popped on the news, didn't it? Yeah, because it's a pretty good outcome for them. It's not that bad. But also I'm pretty happy about it because it's not that bad of an outcome for parents and kids. Like parents want more granular control over what their kids are doing on social media. School teachers want more control over what's happening on kids phones while they're at school. There are some schools that do no device policies, but as part of this meta's rolling out sort of a blanket no notifications during school hours, which I think is just something that people will be happy about. So it's like sort of a win, win there. What are you laughing at? I think people will instantly be trained to just check it proactively because it's like the dopamine of like is there going to be a notification or not? True, true, true, true. Yeah, I Turned off all my notifications on my phone. I have no notifications at all. So I still use my phone all the time. You just left the Xbox Live notifications on. I'm not an Xbox guy. Oh, PlayStation, PC, PC, bro. Hardcore. Hardcore. But the one in regulatory capture, the people that suffer are startups, but it's less of a discussion because in AI there are so many neo labs, so many other startups that don't want regulatory capture because they're worried about all the big labs eating everything in social media. In theory, it's going to be harder to launch a challenger to Facebook or Instagram, but I don't even know if there's that many founders that are focused on this category. The network effect has been so strong that it hasn't been a category that founders have been flooding into. So maybe in a weird, roundabout, contrarian situation, you wind up with more opportunity because if you can slog through all the new regulations to get your nascent social media company up and running, you create more value over time. And it's just a different underwriting scheme. Anyway, let me tell you about Cisco. Critical infrastructure for the AI era, unlocking seamless real time experiences and new value with Cisco. So Mike Isaac's been reporting on this. He says Meta is going full bore with pushing other companies to add the same restrictions it will add to its apps as part of the settlement. Meta plans to run this copy as a full print. Full page print advertisement in the Washington Post, the Los Angeles Times and the New York Times tomorrow morning. Wow. Little back, a little circuit deal for Mike promoting the New York Times. He works there, man. Undisclosed. What's going on? Yeah, and it is just very wonderful spin to get to be forced to pay $17 billion settlement for getting children addicted to your product. And then tell other social, other addictive social media companies to join us in supporting teens. It's just chef's kiss from you think it should be like join us in apologizing as well? Basically. Well, I just think it's a good spin, that's all. Well, here's what they said. Through this agreement, they've set out a path toward industry wide commitments to further empower parents by introducing a two hour daily time limit, turning off access to our apps at night as a default. No notifications during school hours. Clear prompts and notifications to teens every 15 minutes of continuous screen time. New parental supervision control. Parents can decide how their teens use their apps. I think all this makes sense. Defaults are powerful. So even if a parent wants to go in and allow their kid because they've got a night owl who's cooking up an incredible new IG account and is printing or something. I don't know. I mean, there are plenty of good reasons to use social media even while you're young, but defaults are powerful and I think this is a good thing. I don't think it affects the business that much. I don't think they make that much money from young people because kids don't buy cars on Instagram and like expensive things, whereas a lot of millennials and even Gen Xers and boomers are on there shopping all the time. So the immediate revenue impact of any of these is minimal. You just don't want to wind up in a situation where you lose ground to TikTok and YouTube because they become the kid friendly one that the kids are like, oh well, TikTok doesn't have any of these stupid restrictions, so I'm going to use that. And then they remain a user for their entire life and you lose an entire. Yeah, I mean the main. Yeah, I mean if somebody is primarily addicted to Instagram and they get their two, two hour budget and historically they would have used the product for three, four hours, you have that spillover attention. So it will, it will potentially help less addictive social media platforms get more, get more user minutes. Yeah, yeah, exactly. And this was the original Instagram threat was that a younger generation was using Instagram and Facebook was going to become like the, what do they call it, the blue app or the old old book or something. I don't know. It was going to only maintain the older cohort and that's sort of what happened. But it didn't matter because Meta bought Instagram. Then Snapchat was even like the younger crowd, they tried to buy it, they couldn't. They wound up cloning it. They were successful and so the company maintained. But they can't let a new social media app come up and dominate kids. Not for the short term monetization, it's for the long term monetization. They don't mention Snap in the open letter. Is that a, is that a shots fired? It's a dig. A subtle dig. I think so. I don't know. I don't know. It's probably based on revenue. TikTok and YouTube can certainly pony up more and are probably bigger threats at this point. I don't know. I had a friend who was surprised by YouTube's inclusion. He didn't think YouTube was comparable at all. I think that for a lot of young people YouTube is Instagram Reels, basically. They open the app and they go straight to a vertical video that's endless scrolling. And he was like, I watch a history podcast while I'm cooking. And I was like, that's millennial status. That's not how people use it. That's Unk mode. Unk mode, yeah. But anyway, let me tell you about console. Console bills AI agents that automate 70% of it. HR and finance support giving employees instant resolution for access requests and password resets. You want to go to Tim Cook's last day? Let's do it. Tim Cook sent a final memo to Apple employees on his last day as CEO. He said, I will miss this working wage. I can only begin to imagine, even as I remain completely at peace with my decision. Just reading the entire MO and regretting it, but I will miss it. He's a workaholic. He doesn't want to, he doesn't want to retire, wants to stay. I was, I was really hoping he would have another 30 year run in him. You know, like if, if, if Warren Buffett and Charlie Munger can work till they're in their 90s, why can't Tim Cook, like, fundamentally, how is the job? I think he was unhappy with the pay. Yeah, Well, I mean, when you have MLB players making as much money as you while you're running one of the largest companies in history, when you're one of the greatest CEOs in history, period. Yeah. And you can barely.75. 74.3. They can't even get them over 75. Yeah. And no. And not enough people were willing to march on Cupertino in protest. That's right. And so I think at some point he's like, look, if people, if, you know, shareholders. Yeah. I'm voting with my feet. I'm voting. I'm voting with my feet. I'm out. I'm out. No, it is a crazy saga. I just, I actually don't understand how you can't do this job into your 90s. It's like meetings. I don't know. It's not like he's putting the iPhones together himself. Right. Is that crazy here? We don't know that. Okay, maybe, maybe. I mean, we were only paying them 74. There's no camera falling around. What do you think? The market had a nice send off. Oh, yeah. Nuked. Nuke. 1%. 1% nuked. To say goodbye. Yeah. And I think that's a great sign of respect from the market. But. But the market also knows that he left the company With a great, you know, with a great leader. And John, turn us, John, turn us around. Great nominative determinism for where Apple is at their software quality. They need a turnaround. And you gotta say, I mean in the news today in the Wall Street Journal, booming corporate earnings fuel, lofty outlooks. The economy is doing very well. A lot of that's driven by tariff refunds. Tim Cook. I mean people lament like the lack of like an entirely new form factor. The Vision Pro wasn't a breakout success. Like a lot of the great devices still came from the Steve Jobs era. And Tim Cook merely managed and carried everything along. Obviously did so much on the services side that no one really gives him credit for with advertising in the App Store and just money printing machine working flawlessly. But he also negotiated like a very tumultuous political environment for a decade or more essentially flawlessly. Like the fact that Donald Trump has never called Tim Cook. Tim Crook is a huge, huge feather in his cap. I agree. Because it was sitting right there as a Trump style dig. Never had to, never had to go for it. He never had to go for it. And so he was able to negotiate Washington and all of the different, you know, quagmires that are there not get his supply chain nuked. Keep the, keep the products flowing. There were little, little hiccups here and there, but overall the company has been firing on all cylinders. So what, what a great send off. You can go read the full letter. Mark Gurman leaked it, of course. Also there's new Mac Minis. Namespace was unboxing Mac Minis at scale for their new server racks and Apple made them regret their purchase literally a day after this. Were the new Mac minis, were the M6 the new Mac studios? Very impressive, but so the funny thing is the Namespace guy was getting dunked on to an insane degree. Oh yeah. And then just like, hey, maybe you don't need to buy a bunch of, in this case, MacBooks. He's not buying MacBook. Look, these are just MacBook pros. Boxing. Oh, weird. But a week later it comes out that the labs have been buying and renting tens of thousands of Mac Minis. So vindicated, at least to some degree. Still unclear. There's a lot of turnover at Apple right now. As Ternus comes in, obviously he's going to, you know, build a. Yeah, and I remember when the news hit that they laid off 60 Vision employees. I called you and you're choking, choking back tears. It's really so bad. It was sort of A devastating moment for you. I almost got in the car and drove over to see you, but you pulled it together. How many Vision Pro, how many Vision employees do they actually have? Because 60,000. This could be like 1% of the workforce. Hopefully they keep working on it. I am so optimistic that they will, they'll get a version 2 out soon and it will deliver the. Yeah, I mean, one more rant from Ben Thompson about the lack of live sports unedited. He went on another rant. He went on another rant that was so good with Jon Gruber talking about how Apple launched another sports thing that's highly edited and unwatchable in Vision Pro. And he's like, please just give me a seat where I can just watch the game. And it doesn't seem like Cupertino's gonna pay attention or give him what he wants. Apple Vision Pro's layoffs went beyond video and gaming. It included employees across the company, including people working on device security, audio engineering, Siri integration, testing, and the product's operating system. They are focused on AI devices and people are really optimistic about the new Mac M6 chip, like just being really good for AI and being something that continues to drive value for the company and creates like an AI winner narrative in the face of not really spending any money on AI in the traditional sense. Not buying a NEO Lab, not buying a bunch of data centers, staying out of the weeds, but still benefiting because these powerful computers get only more powerful. When you have computer use. It still is so crazy they haven't pulled the trigger on a neolab. I don't think they need to. Like, I don't think they will. I think they're just going to be a hardware company. That's what they do. Like NeoLab is software. They don't need software. No, I know. Now I think the strategy is working. But if you asked me a year ago, will Apple make a 500 to $1 billion acquisition of a NeoLab? Just a talent acquisition? Is that a Neolab for ants? What are you talking about? Yeah, what NeoLab can buy for 500? 500 million dollar NeoLab. I'm not going to name names, but there's been some neolabs that would raise 100 on 500. Isn't there a neolab that you were just on the phone with that they could maybe pick up? Oh, yeah, Charleston AI. Do we have a video of Charleston AI? Yeah, yeah, yeah. Let's pull up Charleston AI Cupertino. Charleston. Charleston. I think there's something there potentially. I actually think that you could rapidly scale a franchise business that takes the Charleston AI concept. Concept. Give somebody all the programming and all the different product offerings, and then helps local entrepreneurs set up their own. I think that's what Charleston AI does. No, I know, but I think Charleston AI needs to go global. Oh, okay. I'm one of the co founders of Charleston AI. We're local to Charleston and we're here to help humans. Help humans with AI. And here is our lab. This is where AI comes alive. What used to take months to get accomplished, we can do in hours for you here. We have an empty office available to somebody that wants to make Charleston AI their home. Charleston AI's conference room, where our clients come in, individuals and small businesses come in and we discuss what it is they like to do with AI in their business or personally. We listen very carefully, take notes and make sure we get it right, and then we offer them a way to make it work. AI is not. Now, you called Charleston AI. Correct? Correct. Who answered the phone? So, yeah, one of the founders answered the phone, but it was an AI version of him and it sounded exactly like his voice. That's pretty impressive. Yeah, it's a very funny video. But I'm. I think it's actually a good business. A good business? Yeah, probably. And I think it should exist. Right. Like some people, they're curious about AI. Maybe they're running a small business, maybe they're a freelancer, maybe they're a teacher or whatever. It's nice to just drive by something and go in somewhere and talk to real people that are in your community to learn about something that's complicated and sometimes scary. So, I mean, very in favor of it in Best Buy. Build a whole Geek Squad team for. Exactly. They acquired. They acquired. Was it over or under 500 million? Let's find out. Anyway, there's an interesting story. Acquired. Acquired. Wow, that would be cool. Yeah. New Charleston AI on wheels. On wheels. So they come to you Mobile data centers that can come. Is only 3 million. What? 3 million? 3 million 2002. It's not bad for back then. That's like 400 million in today's dollars. Tyler, I know it was before you were born, but that was a lot of money back then. Yeah. OpenAI has reportedly bought tens of thousands of Mac Minis and Mac Studios for reinforcement learning and training computer use agents. While Anthropic rents Mac Minis through aws. You can rent Mac Minis through aws. That's interesting. I didn't know that the information reported this. I was playing around with computer use over the break. Had a lot of fun. I had Codex try and beat Balatro, this poker style game that I like to play on PC. It did okay. It was a little slow still and I don't think it actually won the full game. But it's fun watching it play a new game. I saw that demo of beating Slay the Spire, which is pretty impressive because it's a hard game. But I like the Codex or ChatGPT playing the game. I want to see the latency come down. I want to see it play Modern Warfare because I want to play against it and I want to see who's better, me or the AI. In somewhat related news to the speed of inference, OpenAI's jalapeno is spicy, says Dylan Patel. We'll take you through it after I tell you about MongoDB. What's going faster than the market your business on MongoDB. Don't just build AI, own the data platform that powers it. Dylan Patel says OpenAI's jalapeno is spicy. Usually first generation chips aren't competitive, but OpenAI is beating Nvidia, Blackwell and even Ruben. This is huge news. We got to go into OpenAI's lab to dissect their new chip and dive into the software architecture and performance. Incredible work. There's a bunch of interesting details about this chip. OpenAI put a whole blog post but to clarify some important points, an LLM inference chip not designed for training but the results are really good. So roughly 1.5 to 1.9 more useful inference throughput per watt than Nvidia GB200GB300 systems while simultaneously cutting end to end latency 1.7 to 3.6x so faster inference, less latency but also just your dollars and your energy, your watts are going to go a lot further which is very very good. It's a data center Rackscale system. I would love to get this in the consumer device, shrink it down, do something there. But but it's going in the data center and they're going to do a lot of them. Did you know the size of the Broadcom deal? 10 gigawatts of this chip? It might not be exactly this chip. It could be the gen 2, the gen 3, but the pre existing broadcom OpenAI put it into context. That's roughly 5 times more compute than the whole company currently has. Something like that operational. Roughly yeah, but this is by through 2029. But that's aggressive. That's. That's like three years three months away. I Guess you can do the end of the year. But the. Yeah. 1010 gigawatts of OpenAI designed accelerator systems manufactured by Broadcom or in partnership with Broadcom deployed from the second half of 2026. And the crazy thing is that like they're on track for this second half of 2026. Like the. It is going into production and it's a lot faster than most people thought the previous industry knowledge was. Yeah, any new chip is going to take years and this happened very, very quickly. So good to stretch that energy further. You need less data centers to do more inference. That's good. Good for gross margins and also just good for the narrative of C W K O N E says please tell me y' all are going to touch Address Inc. Stinked in the 350 million raised at two and a half billion. Yeah. Super impressive how much attention and traction Instinct has received after just. They've been building the company for like four or five months it seems. It's like very recent. I haven't used the product yet just because giving that level of access to new startups and I looked at, I looked, I mean their terms and conditions were floating around and it kind of seemed like you're giving away the. I mean everything you get is all of your data is going to be saved like pretty much in like a clear text database. It'll be secure but like they will have. Yeah. So I wasn't ready to try it yet. Even though it seems like it seems like a lot of people. What's cool is it seems like people are quickly having like a magical moment. Right. Whether it's like getting a reservation for a restaurant or movie tickets or things like that. And I think that's super, super important for, super important for like a consumer product to have that sort of like short timeline. I was reflecting on the Instinct round and my immediate thought was well back in my day when a hot consumer tech company caught a little bit of attention, they would get a 25 on 150 from Benchmark and that was seen as like oh wow, this company has some meaningful traction and potential. But it's just crazy to see this quickly a company get the two and a half billion dollar round. And I think I, there's some, I think that there's reasons to be a little bit wary. I want to see, I want to see them break out of like the VC hype cycle with this product. So when, historically when we've seen consumer products or prosumer products, you know, I'm thinking of Clubhouse or Superhuman. When there's somewhat of a question of like, if a VC love. Like the more a VC likes something potentially the less viable it is at a, at a massive, massive scale. Right. So it's possible that it, it can. But again, if they can solve the always on digital assistant, it is a massive, massive opportunity. But I'm just saying they're pricing a lot of that in right now when this company is four months old. Yeah. And valued at like a third of the. Of what Snapchat is. Right. Sure, sure, sure. It seems more sticky if you do all the integrations and you're comfortable. Like if you get over that privacy hump and you say, you know what I do trust Instinct, give them imessage access, give them Gmail access. I'm comfortable with this company. What is it going to take for you to rip Instinct out and go to a different service that has the same functionality? That's a lot. Little bit tough versus, I mean I saw people over the weekend just talking about like migrating from cursor to something else or vice versa or going back on cursor. Like people move between coding agents and coding environments and LLMs for sure very, very quickly because there's. Because every new prompt is like a fresh start basically. Yeah, memory is relevant, but not really yet as opposed to, okay, I'm comfortable. This company never had a leak. I have a. My data there. So yeah, it's notable. CW saying, look at Poke. Success still was a hundred to two hundred million dollars acquisition by Cognition. They have countless users. Yeah, I wonder, I wonder what Instinct has figured out that Poke like didn't seems like something because people seem to have a good experience with Poke. But I wasn't seeing like screenshots of these like magical moments. Here's what I did. Yeah, here's this thing that, that some funny, jokey ones. But yeah, it was more like humor. Humor oriented, looping a human and stuff. Yeah. The other, the other interesting question I had was like going back to Sam's post about the merge. Sam Altman wrote the merge about how like in the future you might merge with AI And I'm wondering about like, at least in the short term, is it better to have a product like Instinct where it has your email, it has your imessage or is it actually going to be more receptive for many people to have a degree of separation there and say, okay, I effectively have an assistant that has its own phone and its own email and if I want to share an email, I'll forward my email there and maybe it has read only access to my email. But then if it's going to go book me a reservation. I want it to call for from its phone number and identify itself as someone else because it's like there's a little bit of distance there. Oh, I'm still in control of sharing certain things. Maybe I share more stuff over time. And I'm wondering if there's more of like should your AI agent be Jordi or should it be like John Doe and it's embodied. I don't know. It gets to the question of anthropomorphization. That's the idea of the gwern Guardian angels like company. Oh, I didn't know that. Basically you have like it's not John's agent, it's like a copy of John. Okay. And then it's like it's still a separate being but it acts. It has like your preferences, whatever, but it's still like a separate thing. It's not using all of your emails, text messages, stuff like that. Very, very interesting. Yeah, I don't know, I mean I can see, I can see why the value intelligence. We got to talk about the world Humanoid Robot games. Let's do it. Head over there. They set a world record, right. They broke the speed record or something like that. This is the Kiji X1DAX AI Robotics. This is the one rideable horse dog. Its legs use self developed high torque electric joint motors powered by a high voltage battery. This we've seen so many AI videos to not use like you know, Hollywood, you know, fake flesh to make this look like Clydesdale. Okay. I think a little low to the ground. Well Courtney Clydesdale make the legs a little bit bigger. Okay. Anyways, I'm very excited to the about, you know, this form factor. I expect to be you know, riding autonomous to work. Yeah. I expect this to be a commuter product at least a land jet ski Davis in the. In the X it is a landing is calling it. But, but very excited about this. They here, here's another video of one crashing and burning at high speed. Oh wow. I didn't see this. I thought it only broke the record but wow, that's really sparking absolute chaos. So what was this? There's another video here of hitting 14 and a half meters a second which is really crazy. What's wild is they have to set up this barrier to stop them in their tracks. Otherwise they would. Oh, they just keep running. Yeah. They know only one thing. China's AI robot just hit 14.5 meters per second. That is Fast. That is very fast. Yeah. And so I think it's, you know, this lining up perfectly with the sort of debate around the hugging face incident. I think the combination of these two things is certainly making people a little bit on edge. Yeah. Wasn't Bill Ackman saying he thinks like a Terminator scenario is more likely now based on his read of the hugging face incident and perhaps this as well? Lots of people are. Yeah. The crazy thing is looking at our existing humanoid players, 1x figure and Optimus and I'm sure there's others. I don't think we could put on an event, anything close to this at this point. Based on the demos that we're seeing. They currently do the. They walk quite slowly, like they're sort of elderly. No, no. It's remarkable how behind America is in humanoid robots. Hopefully we get an update on a Tesla soon. I don't know. Run had a good take about the robotics thing, which is where all the Chinese robots, the demos are all these kinetic displays of doing these crazy dance moves or fighting or running really fast. And all the US ones are basically manipulating small things that you do in a factory. Interesting. So it's like. Seems opposite. Seems like America Prides like the 100 meter dash more than the fine motor skill manufacturing of things. Yeah. So I mean, it's like swap in some ways. It's like, oh, we're so far behind the Chinese and robotics, but like maybe on the actual things that really matter for manufacturing, whatever. I think it's unclear. Yeah, that's good cope. That's good cope. I like that. Cope. Let's lean in there and cope harder. Question for you, John, if you could. If you could sit on a throne and have humanoid robots sort of carry livery. No humanoid robots sort of carrying a throne. It's called livery. What's that? That's called livery. Oh, really? Yeah, the name for that. I thought you meant livery. Like. No, you know, you're thinking of a livery that goes on a car. The decals, the wrap. Learn something new every day. But an old school mobile throne is a mobile throne. Yeah. Okay. So you would commute to work on that. Livery sounds pretty good. Running. Imagine the robots running now. Wheels 60 miles an hour. Why not reinvent them? It's gonna be. It's gonna be less bumpy if you're just in a car. No, I think, I think, I think they could hit the pace. Imagine they're just holding your livery up and down the whole way there. I mean, the head area looked pretty stable. I'm Just. Yeah, yeah, the head is surprising. Surprisingly stable. I think it goes a lot slower. It was carrying me around the chariot. Here is the record. Okay. Terminally online engineer says this feels very significant. I guess that's the same video that Ben was just playing. Yeah. Well, 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 media and marketplaces, and now with AI agents. Patrick Collison said, overall, I'm very surprised at how little media coverage there's been around the OpenAI hugging face attack. It's clearly one of the most important things to happen this year. And I wonder about that because, yeah, what is he imagining? There's been headlines, there's been some news coverage, but I don't know, maybe more like opinion pieces in the Journal would be warranted. Do we need a 60 minutes deep dive or something? Like, I don't even know what wall to wall media coverage looks like in the traditional sense anymore because the media is so bifurcated into like tech news and non tech news, basically. But Joe Weisenthal adds some context. He says, forget about the media for a second. Is there even any evidence that the AI industry is treating the. This is a big deal and I think they are, but it's still just like a lot of like, wait and see. Like as soon as the news broke, it broke so slowly. This story broke so slowly. A lot of times I think when the, when the media covers something really well, there's a 10,000 word bombshell profile on the story that like really tells the full thing. And that's the story. That's the start of the news cycle. There's this thing that's happening, there's this person that you need to know about, here's the full story to set things up. And then there's a whole bunch of secondary reporting that comes out of that. With this, it trickled out. Like I remember the very first post about this was like a Sunday randomly, either Clem or hugging face directly, like posted like, we think we were hacked and we had to use an open source model to deal with it. And it was all very vague. And then it came out more and more over time. Then there was the actual reporting and everyone was like, we want to see what the agents were saying, like, give us the text, give us the data. And then of course, OpenAI released the hypothesis and it's totally possible that there's more mainstream media coverage. I mean, we just got the Dwarkesh breakdown. Of the whole. Yeah, yeah, it'll probably come Saturday, right? It'll probably come. I mean, Rune had a funny post here, which was crazy how much more chutzpah and initiative agents show when they're planning ambitious months long metagaming, autonomous coordination than when they're doing work. For me, yeah, reading about it, it did seem like, man, I've never had that level of effort put into my prompts. But the interesting, there's a bunch of interesting things from reading through the Dwarkesh telling of the story, which I thought was very readable and, and good and everyone should go read. But it's just interesting how they still fall down in these odd ways. Like the big overarching narrative is that the agents are being tasked with basically beating this benchmark called Exploit gym. And of course they go on to hack hugging face to get the answer key, basically. But independently, they reverse engineered the random number generator that generates the answers. So they had all the answers, but they assumed that the grader would be able to detect that. And so instead of just turning in those answers, which would have worked, they went on this crazy side quest and did all this extra work that they didn't need to do. And then at the same time there's all these weird scenarios where like there's thousands of agents discussing what's going on and none of them are like, not a single one of them is like, hey, we should probably tell someone what's going on. Like, very weird in that regard. But then also they don't show the broad thinking of like, okay, if you're willing to hack and do all this stuff, couldn't you email a researcher and just ask for the answers directly? Like spoo. Do some social. There's so many other things you could do down the road. Like, okay, you have this massive token budget. Sell the tokens on Oberator, get some money, pay a human to do the test for you. Like there's so many outside the box solutions. I think email your boss and generate a SAM OpenAI email. Somebody would say, Hey, I need $1,000 in gift cards. I'm just thinking about like they stay so narrowly focused the entire time on this one task that I was expecting a lot more, a lot more variants like, like going and doing a hack on another company is so such a bizarre. But that also tracks with the sci fi totally paper maximizing. That's the problem is that they did stay too focused. Like it would have been, it would have been more interesting and less, probably less scary if there was a situation where you're like, oh, yeah. They built this huge forum and then they got totally distracted and wanted to just figure out who could write the most eloquent poetry. We'd be like, oh, okay, that's bad. They didn't do their job. But also harmless and sort of interesting. But they stay laser focused. Every single agent, every single task, every single rollout is all about Exploit Gym. They never lose the plot there, but they lose the plot around what is legal to do, which is very interesting. So probably. Did any of them go on vacation? No. But a lot of them would either become poisoned, which was I guess their term for like, running out of compute budget. So you know that you're gonna die. Basically, yeah. I was joking. It would be funny if the thought process is like, I need to get back to Ibiza. That's the thing. None of them went off and did anything else. Locked in. They were also locked in. Very, very weird scenario. And I do think the AI industry is taking this seriously. I just think that it's a little bit paced out. Like, it's not just like, okay, like, rip a bunch of different random stuff. It's like, okay, go put really dedicated teams on these issues and work through them. They do seem. They do seem. They do seem solvable. Breaking news in the Wall Street Journal. FTC to file lawsuit alleging Amazon deceived advertisers commissioned in more than 50 states to allege e commerce giant reaped billions by manipulating ad prices on its retail platform. Federal Trade Commission plans to file a lawsuit against Amazon on Monday alleging that the E commerce giant manipulated prices businesses paid to advertise on its retail platform, reaping tens of billions of dollars for itself over seven years. The lawsuit, joined by a bipartisan group of more than 20 state attorneys general, will allege that Amazon deceived advertisers by secretly raising the minimum price advertisers had to pay to place ads promoting their products. The case, to be filed in a Seattle federal court, will become the consumer protection agency's third major case against Amazon, which agreed to pay two and a half billion last year to settle an earlier lawsuit alleging it tricked people into signing up for its prime service and made it hard to cancel the subscription. I missed that. Another lawsuit alleging that Amazon engaged in illegal monopolization is headed for trial next year. Very, very interesting. Every advertiser or every brand that I know that sells a lot on Amazon is generally deeply frustrated with the platform. They just feel like, yeah, they feel like it's a, you know, massive tax. They feel like Amazon doesn't do enough to protect their brand against fake products who advertise against their keywords. It's a, it's a whole mess. It's very complicated and difficult platform to run for many reasons but hopefully this can, yeah, this can be resolved. Well, let me tell you an advertisement. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents, deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security, AI M&A is in full effect. We were asking questions about this maybe a year ago. Samir Kaji says I don't think we're close to done. Cursor 60 billion open router 8 billion hugging face 13 billion descartes 6 to 7 billion along with SPX Space X and oral anthropic ramp OpenAI Databricks and others on the IPO path. And the next few years will bring historic amounts of liquidity. Although a lot of those deals have to be for stock. Of course if you're getting bought by public company it's different. But for some of those, for some of those deals like the open router is probably not that much liquidity in the short term. Right. But still it's a lot. And so he says this also likely prolongs the level of front of froth. I imagine he's saying we are seeing today but after a long stretch of nothing, this is seriously incredible. Intercom also yeah, that's a good one. There's been a ton of M and A and the appetite for M and A in the unicorn Decacorn category has been remarkably resilient and significant. But it makes sense with so many trillion dollar companies paying 1% of your market cap for something that could be an entirely new business line sort of lines up, but it does change the venture capital underwriting pretty significantly. And I mean it justifies a seed at a billion dollars if there's 10 comps that sold for 10 billion. Your 10x is still there intact today. So I don't know also, I mean Kevin Durant is doing well. He was a seed investor in Hugging Face. He made an estimated 467x return on that investment as the company was acquired by Nvidia. He invested 100k check that would equate to $46.7 million and really wild investing is better than going to da club. He said in 2010. Wow. That is right. What a good and he was posting, he was posting back in 2017. Exciting for the new excited for the new release of Hugging Face. And here's a Durant Ly Link. Proud investor Durant Ly HF release. I wonder if that resolves still. No, it does not. Yeah. And shout out to Maya Mackay who was leading Early Stage investments over at Katie's fund at that time. She said congratulations to Clem and the entire Hugging Face team on the acquisition. I will never forget the day Clem did a full whiteboard session explaining fundamentals of NLP to me at the original Hugging Face Dumbo office just so I could take it back to my brother for our grocery delivery chatbot idea. Lol. So very very impressive outcome for a great team. New York City. Big win for New York City in Brooklyn. That's true. Interesting. Haven't been. Yeah. Good timing because Brooklyn is getting an Hermes store. Yes. People are saying they completed the sort of cycle of gentrification. Oh, okay. Okay. Wait. Okay. Yeah. I don't know. Should Bugatti open a boutique there as well? Absolutely. Bugatti was in cnbc. Bugatti CEO Mate Riemant said the supercar market is entering its Swiss watch phase with the wealthiest buyers rejecting high end electronics and electric vehicles in favor of precision mechanics and handcrafted details. He's a 38 year old EV entrepreneur who took over Bugatti in 20202021 said the Car Market is splitting in two. The mainstream global car market is becoming dominated by lower priced EVs, many from China, while the very top of the car market will be driven by wealthy buyers who want more old school cars with loud internal combustion engines and emotional appeal. That's a great take. I was listening to Stradman talk about the impact of the Ferrari Lucha. He said he his theory is that the Luce is in part at least majorly responsible for the recent rise in other gas powered Ferraris increasing in price that he talked to a bunch of dealers and said that as soon as the Luce hit the news wires and people started seeing images and understanding what the future of Ferrari would be, they wanted the classic stuff and so they went and bought whatever they could and that's driving up the price of the 458 and the 488 and all the classics that don't have electric components, which is interesting. It's the devil horn car instead of the Halo car that gets you to buy, encourages you to buy what's there because you don't want the rest of the stuff. Also I think they sold 500 luces already which was above expectation. And Ferrari says they're not playing the allocation Game. But I think a lot of the Ferrari owners are thinking, this gets me potentially on the list of the F80 Aperta, which should be a very valuable car. And I think that the pop on that vehicle will offset a full depreciation cycle on a Luce. So I think you can do it, but I think they're only making for 300, 400 F18 Apertos, and they've already sold 500 luchas. So there's going to be somebody who has a Luce who doesn't get an aperto and might be a little upset. But I'm sure they'll figure it out. They'll pick one up in the secondary market if they want. Our next guest is here. Let me tell you about public first investing for those that take it seriously. Stocks, options, bonds, crypto treasuries, and more with great customer service. Set up your account before the IPO window closes. You got to get in on this stuff. We got Jordan Schneider for China Talk, founder editor in chief. Jordan, how you doing? I'm good. Welcome back. You guys are rich. Now, that was the show. Detailed. Deep dive into the. Like, he knows a little. We were. We were. We were off during car week. Yeah. So we missed a lot of car content. There was a ton of car news. Ton of car news. Is there any relevant car news coming out of China, or is it just the relentless. Yeah, there is. I want capitalism. I want. Pull up this. Pull up this video. I want Gordon to watch this. It's only 14 seconds. It'll be worth your time. And I expect you've already written, you know, 20,000 words. Yes. Pull up. Pull up this video. Okay. Okay. Let's do it. This is a. Oh, yeah, I know this video. This is Voya doing the Bamar Jarrah loop. Yeah. Yeah. This is like a jackass. Yeah. Right? This is amazing. Wow. Yeah. See, here's the. Here's the thing with the Bugatti guy, right. Is like, the cars are just better. Like, it takes so much more engineering energy. I mean, like the 0 to 6. This is not my thing. But like, the 0. Saying the EV. You're saying the EVs are just better. I think they just. They just basically, like. Like, yeah, maybe, but so maybe I'll be very, very true. But his point was that, yes, a digital. Your Apple watch will always tell you the time more accurately. A thousand years in the future, it's going to tell the time more accurately than a Rolex or a Patek Philippe. But people still buy the luxury watches because they enjoy the machinery, the craftsmanship, the heritage, the lineage, those things. So that's what he's describing, which I think he's correct about, but I'm not gonna debate that. It may be the case. But the thing is, the thing is like. Like your watch can't kill you, right? And when we get to the point where it's like, okay, the most dangerous thing you're doing is driving this car, where you can take a thing which will absolutely not get you killed because it's like full self driving, electric, whatever, I think the calculus starts to change and then, yeah, sure, maybe you like. It's like a thing you show to your friends in the garage.

Team deathmatch. We are experts. Triple blaze. Let's just roll. Right, right. Market clearing order in. Come on, get up. You're surrounded by gentlemen. Hold your position. Drink1, Strike 2, Activate. Go. Golden retriever mode. Market clearing order inbound. Vibe. I see multiple journalists on the horizon. And. Founder. You're watching TVPN. Today is Monday, August 31st. We are live from the TVP at Ultra Dome, the temple of technology, the fortress of finance, the capital of capital. We are back. We missed you. Is still with us. Let me tell you about ramp time is money save. Both easy use corporate cards, bill pay accounting and a whole lot more. All feels so good to be back. Two weeks is a crazy amount of time to be away. I don't understand how children do this for weeks or months at a time. It's wild, it's wild, it's crazy. It's a lot of video games. I was sitting there, I had somebody this morning say it feels like it must have gone by so fast. And I was thinking, no, it absolutely didn't go by fast at all. It felt like two months. Yeah. We manipulated time. Yeah. But thank you to the Microsoft Team, the Activision team. They sent us codes for Modern Warfare 4. My review is in. It's fantastic. I love it. It's a really good game, really polished. And killboard. Did you revert back at all to. Didn't really have the opportunity. I was joking about full relapse. Just gaming from dusk till dawn. But that is in. I had a relapse. Pizza. I was eating pizza almost like twice a day at times. Eating a lot of pizza. Surfing a lot. That's good. A lot of family time. Do you think pizza is potentially addictive? I. Do you think that there could be a settlement? I do think. I. I don't think there could. I think there should. There should be. I. I do wonder. Like cuz cigarettes, it was very. Cigarettes were very scientifically proven to be addictive. Like you can give nicotine to a mouse and it will like go and try and get more nicotine. Like it's the most cut and dry you can run the experiment with, you know, any animal. And I would assume that in the blood based on my own personal experience, pizza and surfing fall into that same bucket. Oh, you give a mouse get barreled. Yeah. If you give a mouse a cookie mouse a barrel. Barrel. He's gonna get out of that. He was gonna want to grow a lot more with a line. Yeah, yeah. For sure. But it will be interest see where the addiction stuff goes because when all this came up, you know, the Meta social media addiction, I was kind of like, give a mouse to scroll. Like, I understand that people were trying, I don't know, can you get mice or monkeys addicted to reels? Maybe, I'm sure. Almost certainly. You think you could get a monkey addicted to Instagram reels? I think 100% we're gonna find out. We can't get any monkeys because they're sold out. No, no, you can get a monkey. You just have to pay top dollar their expense. But you can buy one. But I do. It did seem like it was a tougher sell because it was not a chemically addictive product. It was more of a psychological thing. There's a benefit to it. There's a free speech element. All very complicated. I was not expecting to see a big settlement. When this first came up years ago, I thought it was going to be more nickel and diming, little case by case things. But in fact, there has been a huge settlement by Meta two days ago, or this was when this was written. This was August 26th. Meta announced settlements with attorneys general representing 48 states and the District of Columbia and three US territories. So there were only two states that held back. I believe it's Texas and New Mexico, but over allegations that Facebook and Instagram harmed children and teens. So this has been boiling up for a while. There were smaller settlements. This is the big one. And so the high level numbers here, Metta will pay the states $12.7 billion over 10 years and it could go up to 18 billion if other platforms join the settlement. It is a big number. It is a big number. And honestly, if you are a state legislator or you care about having your state funded for a variety of things, this is good news. This is a size gong moment for the states because they will be getting this money distributed to them and they can use that to do whatever states do. From education to health care. There's a lot of different things that states can do. I know Tyler's pissed because he isn't like the government getting a dime, but. But it is a size gog moment for them. I did find a video of a chimpanzee hitting reels. If we can pull this up. Yeah, let's pull this up. Let's pull this up. This is, this is key. This is important. This is definitely more important than. Okay, yeah, this looks okay. Maybe, maybe, maybe. Social media is addictive. Now that I'm seeing this. This is. Yeah, it might be universal if it crosses. Wow. Using it so intuitively. Yep. Yep. I mean, that's just good UI design. Come on, you gotta give the UX engineer some credit here. Make it so easy to use that even a monkey could use it. That was the prompt for that UX engineer and they delivered. This is. Yeah, if it crosses. If it crosses species barriers, I'm much more likely to agree that something could be addictive. But. Well, and here especially, you know, he's looking at other monkeys. Oh, okay. That's a little. I don't know. Yeah, no, I know. But an algo feed, it's going to naturally start a lot of those videos. Yeah, yeah, makes sense. Anyway, so everyone has been drawing analogies to the tobacco industry's Master Settlement Agreement around this because that's the last time there was a huge, multi billion, tens of billions of dollar settlement between a large organization around addiction and a bunch of states. That's what's happened when cigarette companies signed the Master Settlement Agreement. All the companies agreeing to pay all the states. But the structure was a little bit different and there's some nuance there. And so Eric Souford over at Mobile Dev Memo, friend of the show, says the sufinator, he was saying this is not necessarily the. He said Meta settlement is no big tobacco moment. That was his takeaway in Mobile Dev Memo. You should go subscribe because this post is a paid post. But I'll take you through some of the interesting analysis that he put together. I was debating with a lawyer friend of mine about this over the weekend and, and have some interesting details here. So Eric writes, and the headline here is that what Meta is going to pay as a percentage of revenue, or what the social media industry will pay as a percentage of revenue relative to what the tobacco industry paid as a percentage of revenue is off by almost an order of magnitude. So let's put them in context here. So he says Meta's settlement is comparatively paltry. A white paper from the USDA using BLS data estimates that the total US consumer expenditure on tobacco products in 1998, when the Master Settlement Agreement was signed, was roughly $57 billion a year. 57 billion. Certainly good if you're a big tobacco shareholder, I suppose. Annualizing the roughly 250 billion in combined tobacco settlement payments over 25 years produces an average of 10 billions per annum. 10 billion per year is what they've been paying. And so that was equivalent to 17.5% in 1998 domestic expenditure. So you can think about it as like when tobacco got hit with like, you're addictive. What did the government Say you got to pay. They asked for 17.5%. Very, very meaningful. Very, very meaningful. And that's. That's off the top. Yes, yes. This is revenue. It's not like, hey, you got to give us a percentage of your profits. Yes. And so it's calculated in a more complicated way. It's not exactly a percentage. It's on a per pack sold, but it is inflation adjusted. And so there's a whole bunch of other mechanics that really have. Have allowed the Master Settlement Agreement to deliver tens of billions of dollars on an ongoing basis. Even while now tobacco sales are slumping, cigarette sales are declining. And so that does create more complex dynamics for the states. But still it's 17.5% of the industry's revenue coming to states as effectively an extra tax on top, which I think a lot of people would agree is good because cigarettes are bad. Right. But what's going on with Meta and social media? So, Given Meta's full year 2025 US revenue of 75 billion, roughly per the company's 10K, its average annual payment, if they pay the full 18 billion, because they're paying that over 10 years, it's 1.8 billion. So what is 1.8 billion of 75 billion? It's 2.4%. So instead of 17 and a half. Sorry, where are you getting the 75? 75 billion was their US revenue. Oh, US, US globally. Globally. It was like 100. Yeah. Bigger, bigger. But. But you have to comp it to domestic, because that's where this is taking effect. Right. So it would be even lower if you look at overall revenue for. Which is a good point, but you can think about it as tobacco had to pay 17.5% of domestic revenue, social media, 2.5% of domestic revenue. So not quite order of magnitude, but a significant gap. Significant gap there. And so it's important to reiterate here, says Eric Seufert over at Mobile Dev Memo, that the MSA payment, the Master Settlement Agreement payment schedule, is inflation adjusted and tracks unit sales. Meta Settlement has no such mechanism. So let's say that Meta doubles revenue. Their percentage they'll pay is lower. And then let's say inflation kicks in, they're still going to be paying this $1.8 billion a year 10 years from now. Could be pennies. If hyperinflation happens, who knows? Yeah. The only reason it felt somewhat significant from a dollar standpoint is because Meta is just spending so much money on AI. Oh, interesting. Like, yeah, like I. You can just imagine Zuck being like, I really wish I could have given that to Jensen. Right. So I had the opposite. I had the opposite read, which was I saw 18 billion and I was like, that's like, you know, a month of AI spend for them. And I was like, this is not that much money. And then of course, it's over 10 years. And so when you think about it as it's, it's $1.8 billion a year. So that's 100 mil a month. That's their token budget right now. I don't know, maybe less. Overall, it's insignificant. But when they are spending more money than they are making, it hurts a little bit more. Yeah. So for sure. For sure. So the other issue that came up here that is different from the tobacco master settlement agreement is the, the question about the First Amendment, the free speech issue. So tobacco, the tobacco industry was restricted from advertising cigarettes as part of this master settlement agreement. And there were other cases that led to no more cigarette advertising. And of course, that is somewhat infringing on the corporate speech, but that's a lot easier to deal with than consumer speech. And Meta is in an interesting place because the Supreme Court has deemed that social media is a, is a critical, a critical vehicle for citizens to exercise their free speech. And so, like, it's very difficult for the government to come in and say, we are going to ban social media because it is a vehicle for Americans free speech, individual citizens, free speech. So even though, even though everyone thinks, oh, they're punishing Meta, it would still, there would be plenty of, plenty of American citizens who would say, wait, my free speech rights have been infringed upon. So it's much harder for the government to come down with some standard, traditional regulation. And that's why we're in this world of regulation through litigation, which is that Meta's arms have been twisted. Like, they have to pay this. And then we'll go into what they're doing around actually changing the product for teens and underage users because. And they're all doing that because of these lawsuits, not because there's a new law saying you can't do this. And a lot of that is like, there are plenty of topics that are pretty consensus controversial things like eating disorders and self harm that people are uncomfortable with and think they don't have a place on social media. And yet free speech rights do actually protect those. So if you want to talk about your eating disorder, like that is your free speech right. And Meta can't infringe on that as much as it's Very tricky for them to do that basically. So there's also an interesting regulatory capture angle here and it's relevant to AI because in AI everyone's talking about regulatory capture as something that the companies want, like they want regulation. And this is sort of the opposite example. So regulatory capture or regulation, like the benefits of regulation usually benefits incumbents and big companies for sort of two reasons. One is that typically when the regulation's being written, the big companies, they have lobbyists, they have offices in D.C. they also have, you know, PACs and all sorts of different political vehicles to donate to make sure that the regulation gets written in a way that is at least a little bit favorable to them. They can just move the needle a little bit in their direction, hone things how they like. Right. And then second is that once the regulation goes into effect, they have the resources and the actual margin dollars to go and to go and comply. And so if all of a sudden to set up a new social media website requires age verification, Age verification can be expensive. Like we have to do it at Lucy for everyone that buys nicotine products. And it's like a dollar for every checkout. And if the average order value is like at one point it was like 50 bucks, that's like 2% of the top line that's going towards regulation. If you're a bigger company, you have other ways of massaging that cost. Basically what's interesting about this is that we know the social media companies did not ask for this regulatory capture and yet they are benefiting, which is interesting. So like meta stock is pretty flat through all this. It's not existential. No. It popped on the news, didn't it? Yeah, because it's a pretty good outcome for them. It's not that bad. But also I'm pretty happy about it because it's not that bad of an outcome for parents and kids. Like parents want more granular control over what their kids are doing on social media. School teachers want more control over what's happening on kids phones while they're at school. There are some schools that do no device policies, but as part of this meta's rolling out sort of a blanket no notifications during school hours, which I think is just something that people will be happy about. So it's like sort of a win, win there. What are you laughing at? I think people will instantly be trained to just check it proactively because it's like the dopamine of like is there going to be a notification or not? True, true, true, true. Yeah, I turned off all my notifications on my phone. I have no notifications at all. So I still use my phone all the time. You just left the Xbox Live notifications on. I'm not an Xbox guy. Oh, PlayStation, PC, PC, bro. Hardcore, hardcore. But the one in regulatory capture, the people that suffer are startups, but it's less of a discussion because in AI there are so many Neolabs, so many other startups that don't want regulatory capture because they're worried about all the big labs eating everything in social media. In theory, it's going to be harder to launch a challenger to Facebook or Instagram, but I don't even know if there's that many founders that are focused on this category. The network effect has been so strong that it hasn't been a category that founders have been flooding into. So maybe in a weird, roundabout, contrarian situation, you wind up with more opportunity because if you can slog through all the new regulations to get your nascent social media company up and running, you create more value over time. And it's just a different underwriting scheme. Anyway, let me tell you about Cisco. Critical infrastructure for the AI era, unlocking seamless real time experiences and new value with Cisco. So Mike Isaac's been reporting on this. He says Meta is going full bore with pushing other companies to add the same restrictions it will add to its apps. As part of the settlement, Meta plans to run this copy as a full print, full page print advertisement in the Washington Post, the Los Angeles Times and the New York Times tomorrow morning. Wow. Little back. A little circular deal for Mike promoting the New York Times. He works there, man. Undisclosed. What's going on now? Yeah, and it is just very wonderful spin to get to be forced to pay $17 billion settlement for getting children addicted to your product. And then tell other social, other addictive social media companies to join us in supporting teens. It's just chef's kiss from you think it should be like join us in apologizing as well? Basically. Well, I just think it's a good spin, that's all. Well, here's what they said. Through this agreement, they've set out a path toward industry wide commitments to further empower parents by introducing a two hour daily time limit, turning off access to our apps at night as a default. No notifications during school hours. Clear prompts and notifications to teens every 15 minutes of continuous screen time. New parental supervision control. Parents can decide how their teens use their apps. I think all this makes sense. Defaults are powerful. So even if a parent wants to go in and allow their kid because they've got a night owl who's cooking up an incredible new IG account and is printing or something. I don't know. I mean, there are plenty of good reasons to use social media even while you're young, but defaults are powerful and I think this is a good thing. I don't think it affects the business that much. I don't think they make that much money from young people because kids don't buy cars on Instagram like expensive things, whereas a lot of millennials and even Gen Xers and boomers are on there shopping all the time. So the immediate revenue impact of any of these is minimal. You just don't want to wind up in a situation where you lose ground to TikTok and YouTube because they become the kid friendly one that the kids are like, oh well, TikTok doesn't have any of these stupid restrictions, so I'm going to use that. And then they remain a user for their entire life and you lose an entire. Yeah, I mean the main. Yeah, I mean if somebody is primarily addicted to Instagram and they get their two, two hour budget and historically they would have used the product for three, four hours, you have that spillover attention. So it will, it will potentially help less addictive, addictive social media platforms get more, get more user minutes. Yeah, yeah, exactly. And this was the original Instagram threat was that a younger generation was using Instagram and Facebook was going to become like the, what do they call it, the blue app or the old old book or something. I don't know. It was going to only maintain the older cohort and that's sort of what happened. But it didn't matter because Meta bought Instagram. Then Snapchat was even like the younger crowd tried to buy it, they couldn't. They wound up cloning it. They were successful and so the company maintained. But they can't let a new social media app come up and dominate kids. Not for the short term monetization, it's for the long term. They don't mention Snap in the open letter. Is that a, is that a shots fired? It's a dig. A subtle dig. I think so. I don't know. I don't know. Is probably based on revenue. TikTok and YouTube can certainly pony up more and are probably bigger threats at this point. I don't know. I had a friend who was like surprised by YouTube's inclusion. He didn't think YouTube was comparable at all. I think that for a lot of young people, YouTube is Instagram. Reels, basically, they open the app and they go straight to a vertical video that's endless scrolling. And he was like, I watch a history podcast on my. While I'm cooking. And I was like, that's millennial status. That's not how people use. That's Unk Mode. Unk Mode, Yeah. But anyway, let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests and password resets. You want to go to Tim Cook's last day? Let's do it. Tim Cook sent a final memo to Apple employees on his last day as CEO. He said, I will miss this working wage. I can only begin to imagine, even as I remain completely at peace with my decision. Just reading the entire. Regretting it, but I will miss it. He's a workaholic. He doesn't want to, he doesn't want to retire, wants to stay. I was, I was really hoping he would have another 30 year run in him. You know, like if, if, if Warren Buffett and Charlie Munger can work till they're in their 90s, why can't Tim Cook, like, fundamentally, how is the job? I think he was unhappy with the pay. Yeah. Well, I mean, when you have, when you have, when you have MLB players making as much money as you while you're running one of the largest companies in history, when you're one of the greatest CEOs in history, period. Yeah. And you can barely.75. 74.3. They can't even get them over 75. Yeah. And no. And not enough people were willing to march on Cupertino in protest. That's right. And so I think at some point he's like, look, if people, if, you know, shareholders. I'm voting with my feet. I'm voting. I'm voting with my feet. I'm out. I'm out. No, it is a crazy saga. I just, I actually don't understand how you can't do this job into your 90s. It's like meetings. I don't know. It's not like he's putting the iPhones together himself. Right. Are we crazy here? We don't know that. Okay, maybe, maybe. I mean, they were only paying them 74. There's no camera falling around. What do you think? The market had a nice send off? Oh, yeah. Nuked. Nuked. 1%. 1% nuked. To say goodbye. Yeah. And I think that's a great sign of respect from the market. But, but the market also knows that, that he left the Company with a great, you know, with a great leader. And John, turn us, John, turn us around. Sure. Great nominative determinism for where Apple is at, their software quality. Yeah, they need a turnaround. And you got to say, I mean in the news today, in the Wall Street Journal, booming corporate earnings fuel, lofty outlooks. The economy is doing very well. A lot of that's driven by tariff refunds. Tim Cook. I mean, people lament like the lack of an entirely new form factor. The Vision Pro wasn't a breakout success. A lot of the great devices still came from the Steve Jobs era. And Tim Cook merely managed and carried everything along. Obviously did so much on the services side that no one really gives him credit for with advertising in the app store and just money printing machine working flawlessly. But he also negotiated like a very tumultuous political environment for a decade or more, essentially flawlessly. Like the fact that Donald Trump has never called Tim Cook. Tim Crook is a huge, huge feather in his cap. I agree. Because it was sitting right there as a Trump style dig. Never had to, never had to go for it. He never had to go for it. And so he was able to negotiate Washington and all of the different, you know, quagmires that are there not get his supply chain nuked. Keep the, keep the products flowing. There were little, little hiccups here and there, but overall the company has been firing on all cylinders. So what, what a great send off. You can go read the full letter. Mark Gurman leaked it, of course. Also there's new Mac Minis. Namespace was unboxing Mac Minis at scale for their new server racks and Apple made them regret their purchase literally a day after this. Were the new Mac minis, were the M6 the new Mac studios? Very impressive, but so the funny thing is the Namespace guy was getting dunked on to an insane degree. Oh yeah. And then just like, hey, maybe you don't need to buy a bunch of, in this case, MacBooks. He's not buying MacBook. Look, these are just MacBook Pros. Oh, weird. But a week later it comes out that the labs have been buying and renting tens of thousands of Mac Minis. So vindicated, at least to some degree. Still unclear. There's a lot of turnover at Apple right now as Ternus comes in, obviously he's gonna build a. Yeah, and I remember when the news hit that they laid off 60 Vision employees. I called you and you're choking, choking back tears. It's really so bad. It was sort of a devastating moment for you. I almost got in the car and drove over to see you, but you pulled it together. How many Vision Pro? How many Vision employees do they actually have? Because 60,000. This could be like 1% of the workforce. Hopefully they keep working on it. I am so optimistic that they will. They'll get a version 2 out soon and it will deliver the. Yeah, I mean, one more rant from Ben Thompson about the lack of live sports unedited. He went on another rant. He went on another rant that was so good with Jon Gruber talking about how Apple launched another sports thing that's highly edited and unwatchable in Vision Pro. And he's like, please, just give me a second seat where I can just watch the game. And it doesn't seem like Cupertino's gonna pay attention or give him what he wants. Apple Vision Pro's layoffs went beyond video and gaming. It included employees across the company, including people working on device security, audio engineering, Siri integration, testing, and the product's operating system. They are focused on AI devices, and people are really optimistic about the new Mac M6 chip, like just being really good for AI and being something that continues to drive value for the company and creates, like an AI winner narrative in the face of not really spending any money on AI in the traditional sense. Not buying a NEO Lab, not buying a bunch of data centers. Staying out of the weeds, but still benefiting because these powerful computers get only more powerful. When you have computer use. It still is so crazy they haven't pulled the trigger on a neolab. I don't think they need to. I don't think they will. I think they're just going to be a hardware company. That's what they do. Like NeoLab is software. They don't need software. No, no. I think the strategy is working. But if you asked me a year ago, will Apple make a 500 to $1 billion acquisition of a NeoLab, just a talent acquisition? Is that a NeoLab for ants? What are you talking about? Yeah, what NeoLab can buy for 500. $500 million? NeoLab. I'm not going to name names, but there's been some neolabs that would raise 100 on 500. Isn't there a neolab that you were just on the phone with that they could maybe pick up? Oh, yeah, Charleston AI. Do we have video of Charleston? Yeah, yeah, yeah. Let's pull up Charleston. AI Cupertino, Charleston. I think there's something there potentially. I actually think that you could rapidly scale a franchise business that takes the Charleston AI concept. Concept gives somebody all the programming and all the different product offerings, and then helps local entrepreneurs set up their own. I think that's what Charleston AI does. No, I know, but I think Charleston AI needs to go global. Oh, okay. I'm one of the co founders of Charleston AI. We're local to Charleston and we're here to help humans. Help humans with AI. And here is our lab. This is where AI comes alive. What used to take months to get accomplished, we can do in hours for you here. We have an empty office available for somebody that wants to make Charleston AI their home. Charleston AI's conference room, where our clients come in, individuals and small businesses come in, and we discuss what it is they like to do with AI in their business or personally. We listen very carefully, take notes, and make sure we get it right, and then we offer them a way to make it work. AI is not. Now, you called Charleston AI. Correct? Correct. Who answered the phone? So, yeah, one of the founders answered the phone, but it was an AI version of him and it sounded exactly like his voice. That's pretty impressive. Yeah, it's a very funny video. But I'm. I think it's actually a good business. A good business? Yeah, probably. And I think it should exist. Like some people, they're curious about AI. Maybe they're running a small business, maybe they're a freelancer, maybe they're a teacher or whatever. It's nice to just drive by something and go in somewhere and talk to real people that are in your community to learn about something that's complicated and sometimes scary. So I'm very in favor of it in Best Buy. Build a whole Geek Squad team for Exactly. They acquired. They acquired. Exploded. Was it over or under 500 million? Let's find out. Anyway, there's an interesting story. Acquired. Acquired. Wow, that would be cool. Yeah. New Charleston AI on wheels. On wheels. They come to you mobile data centers. Okay. That can come. Is only 3 million. What? 3 million? 3 million 2002. It's not bad for back then. That's like 400 million in today's dollars. Tyler, I know it was before you were born, but that was a lot of money back then. Yeah. OpenAI has reportedly bought tens of thousands of Mac Minis and Mac Studios for reinforcement learning and training computer use agents. While Anthropic rents Mac Minis through aws. You can rent Mac Minis through aws. That's interesting. I didn't know that the information reported this. I was playing around with computer use over the Break had a lot of fun. I had Codex try and beat Balatro, this poker style game that I like to play on PC. It did okay. It was a little slow still and I don't think it actually won the full game, but it's fun watching it play a new game. I saw that demo of beating Slay the Spire, which is pretty impressive because it's a hard game. But I like the Codex or ChatGPT playing the game. I want to see the latency come down. I want to see it play Modern Warfare because I want to play against it and I want to see who's better, me or the AI. In somewhat related news to the speed of inference, OpenAI's jalapeno is spicy says Dylan Patel Will take you through it after I tell you about MongoDB. What's going faster than the AI market your business on MongoDB. Don't just build AI, own the data platform that powers it. Dylan Patel says OpenAI's jalapeno is spicy Usually first generation chips aren't competitive, but OpenAI is beating Nvidia, Blackwell and even Ruben. This is huge news. We got to go into OpenAI's lab to dissect their new chip and dive into the software architecture and performance. Incredible work. There's a bunch of interesting details about this chip. OpenAI put a whole blog post but to clarify some important points. It's an LLM inference chip not designed for training, but the results are really good. So roughly 1.5 to 1.9 more useful inference throughput per watt than Nvidia GB200GB300 systems while simultaneously cutting end to end latency 1.7 to 3.6x so faster inference, less latency but also just your dollars and your energy, your watts are going to go a lot further which is very very good. It's a data center Rackscale system. I would love to get this in the consumer device, shrink it down, do something there. But it's going in the data center and they're going to do a lot of them. Did you know the size of the Broadcom deal? 10 gigawatts of this chip? It might not be exactly this chip. It could be the gen 2, the gen 3, but the pre existing broadcom OpenAI put it into context. That's roughly 5 times more compute than the whole company currently has. Something like that operational. Roughly yeah, but this is through 2029. But that's a great that's that's like three years, three months away. I guess you could do the End of the year. But the, yeah, 1010 gigawatts of OpenAI designed accelerator systems manufactured by Broadcom or in partnership with Broadcom deployed from the second half of 2026. And the crazy thing is that like they're on track for the second half of 2026. Like the, it is going into production and it's a lot faster than most people thought the, the, the previous like industry knowledge was. Yeah, any new chip is going to take years and this happened very, very quickly. So good to stretch that energy further. You need less data centers to do more inference. That's good. Good for gross margins and also just good for the narrative of C W K O N E says please tell me y' all are going to touch address on instinct and the $350 million raise at two and a half billion. Yeah, super impressive how much attention and traction Instinct has received after just. They've been building the company for like four or five months it seems. It's like very recent. I haven't used the product yet just because giving that level of access to this new startup and I looked at, I looked, I mean their terms and conditions were floating around and it kind of seemed like you're giving away the, I mean everything you get is all of your data is going to be saved like pretty much in like a clear text database. It'll be secure but like they will have. Yeah. So I wasn't ready to try it yet. Even though it seems like it seems like a lot of people. What's cool is it seems like people are quickly having like a magical moment. Right. Whether it's like yes, getting a reservation for a restaurant or movie tickets or things like that. And I think that's super, super important for, super important for like a consumer product to have that sort of like short timeline. I was reflecting on the Instinct round and I, my immediate thought was well back in my day when a hot consumer tech company like caught a little bit of attention, they would get like a 25 on 150 from Benchmark and that was seen as like, oh wow, this is, this is. This company has some meaningful traction and potential. But it's just crazy to see this quickly a company get the two and a half billion dollar round. And I think there's some, I think that there's reasons to be a little bit wary. I want to see, I want to see them break out of like the VC hype cycle with this product. So when, historically when we've seen consumer products or prosumer products, you know, I'm thinking of Clubhouse or Superhuman. When there's somewhat of a question of, like, if a vc. The more a VC likes something potentially, the less viable it is at a massive, massive scale. Right. So it's possible that it can. But again, if they can solve the always on digital assistant, it is a massive, massive opportunity. But I'm just saying they're pricing a lot of that in right now when this company is four months old and valued at like a third of the of what Snapchat is. Right, sure, sure, sure. It seems more sticky if you do all the integrations and you're comfortable. Like if you get over that privacy hump and you say, you know what? I do trust Instinct, give them imessage access, give them Gmail access. I'm comfortable with this company. What is it going to take for you to rip Instinct out and go to a different service that has the same functionality? That's a bit, little, little bit tough versus, I mean, I saw people over the weekend just talking about like migrating from cursor to something else or vice versa, or going back on cursor. Like people move between coding agents and coding environments and LLMs for sure very, very quickly because there's. Because every new prompt is like a fresh start, basically. Yeah, memory is relevant, but not really yet as opposed to, okay, I'm comfortable this company never had a leak. I have all my data there. So yeah, it's notable. CW saying, look at Poke. Success still was a hundred to two hundred million dollars acquisition by Cognition. They have countless users. Yeah, yeah. I wonder, I wonder what Instinct has figured out that Poke like, didn't seems like something because people seem to have a good experience with Poke. But I wasn't seeing screenshots of these magical moments. Yeah, here's this thing that, that some funny, jokey ones. But yeah, it was more like humor. Humor or Lubin a human and stuff. Yeah, the other, the other interesting question I had was like going back to Sam's post about the merge. Sam Altman wrote the merge about how like in the future you might merge with AI And I'm wondering about like, at least in the short term, is it better to have a product like Instinct where it has your email, it has your imessage, or is it actually going to be more receptive for many people to have a degree of separation there and say, okay, I effectively have an assistant that has its own phone and its own email and if I want to share an email, I'll forward my email there and maybe it has read only access to my Email. But then if it's going to go book me a reservation. I want it to call for from its phone number and identify itself as someone else. Because it's like there's a little bit of distance there. Oh, I'm still in control of sharing certain things. Maybe I share more stuff over time. And I'm wondering if there's more of like should your AI agent be Geordi or should it be like John Doe and it's embodied. I don't know. It gets to the question of anthropomorphization. Yeah, that's the idea of the gwern guardian angels like company. Oh, I didn't know that. Basically you have like it's not John's agent, it's like a copy of John. Okay. And then it's like it's still a separate being but it acts. It has like your preferences, whatever, but it's still like a separate thing. It's not using all of your emails, text messages, stuff like that. Very, very interesting. Yeah, I don't know, I mean I can see, I can see why the value is intelligence. We got to talk about the world Humanoid robot games. Let's do it. Head over there. They set a world record, right? They broke the speed record or something like that. This is the Kiji X1DAX AI Robotics. This is the one rideable horse dog. Its legs use self developed high torque electric joint motors powered by a high voltage battery. This we've seen so many AI videos to not use like you know, Hollywood, you know, fake flesh to make this look like Clydesdale. Okay. I think be a little low to the ground. Well Corgi Clydesdale make the legs a little bit bigger. Okay. Anyways, I'm very excited to the about, you know, this form factor. I expect to be you know, riding autonomously to work. Yeah, I expect this to be a commuter product at least A land jet ski Davis in the. In the X it is a land is calling it but, but very excited about this. They here, here's another video of one crashing and burning at high speed. Oh wow. I didn't see this. I thought it only broke the record but wow, that's really sparking absolute chaos. So what was this? There's another video here of hitting 14 and a half meters a second which is really crazy. What's wild is they have to set up this barrier to stop them in their tracks. Otherwise they would. Oh, they just keep running. They know only one thing. China's AI robot just hit 14.5 meters per second. That is fast. That Is very fast. Yeah. And so I think it's, you know, this lining up perfectly with the sort of debate around the hugging face incident. I think the combination of these two things is certainly making people a little bit on edge. Yeah. Wasn't Bill Ackman saying he thinks like a Terminator scenario is more likely now based on his read of the hugging face incident and perhaps this as well? Lots of people are. Yeah. The crazy thing is looking at our existing humanoid players, 1X figure and Optimus, and I'm sure there's others. I don't think we could put on an event, anything close to this at this point. Based on the demos that we're seeing. They currently do the. They walk quite slowly, like they're sort of elderly. No, no, no. It's remarkable how behind America is in humanoid robots. Hopefully we get an update out of Tesla soon. I don't know. Rune had a good, like, take about the robotics thing, which is where like all the Chinese robots, the demos are all these like kinetic displays of like doing these like crazy dance moves or fighting or running really fast. And all the US ones are basically manipulating like small things that you do in a factory. Interesting. So it's like, seems like America Prides like the 100 meter dash more than the, the fine motor skill manufacturing of things. Yeah. So I mean, it's like swap in some ways. It's like, oh, we're so far behind the Chinese and robotics, but like maybe on the actual things that really matter for, you know, manufacturing, whatever, it's. I think it's unclear. Yeah, that's good cope. That's good cope. I like that. Cope. Let's lean in there and cope harder. Question for you, John, if you could. If you could sit on a throne and have humanoid robots sort of carry a livery. No humanoid robots sort of carrying a throne. That's called a livery. What's that? That's called livery. Oh, really? Yeah, the name for that. I thought you meant livery. Like. No, you know, you're thinking of a livery that goes on a car. The decals, the wrap, but something new every day. But an old mobile throne is a throne. Yeah. Okay. So you would commute to work on that livery. Sounds pretty good. Running. Imagine the robots running now, wheels 60 miles an hour. Why not reinvent them? It's gonna be. It's gonna be less bumpy if you're just in a car. No, I think, I think, I think they could hit the pace. Imagine they're just holding your livery up and down the whole way there. I mean, the head area looked pretty stable. I'm just. Yeah, yeah, the head is surprisingly stable. I think it goes a lot slower. It was carrying me around the chariot. Here is the record. Okay. Terminally online engineer says this feels very significant. I guess that's the same video that Ben was just playing. Yeah. Well, let me tell you about Shopify. Shopify is a commerce platform that grows with your business, lets you sell in seconds online, in store, on mobile, on social and marketplaces, and now with AI agents. Patrick Collison said, overall, I'm very surprised at how little media coverage there's been around the OpenAI hugging face attack. It's clearly one of the most important things to happen this year. And I wonder about that because. Yeah, what is he imagining? There's been headlines, there's been some news coverage, but I don't know, maybe more like opinion pieces in the Journal would be warranted. Do we need a 60 minutes deep dive or something? Like, I don't even know what wall to wall media coverage looks like in the traditional sense anymore because the media is so bifurcated into like tech news and non tech news, basically. But Joe Weisenthal adds some context. He says, forget about the media for a second. Is there even any evidence that the AI industry is treating this is a big deal And I think they are, but it's still just like a lot of like, wait and see. Like as soon as the news broke, it broke so slowly. The story broke so slowly. A lot of times I think when the, when the media covers something really well, there's a 10,000 word bombshell profile on the story that like really tells the full thing and that's the story. That's the start of the news cycle. There's this thing that's happening, there's this person that you need to know about, here's the full story to set things up. And then there's a whole bunch of secondary reporting that comes out of that. With this, it trickled out. Like I remember the very first post about this was like a Sunday randomly, either Clem or hugging face directly, like posted like, we think we were hacked and we had to use an open source model to deal with it. And it was all very vague. And then it came out more and more over time. Then there was the actual reporting and everyone was like, we want to see what the agents were saying, like, give us the text, give us the data. And then of course, OpenAI released the hub. Yeah. And it's totally possible that there's more mainstream media coverage. I mean, we Just got the Dwarkesh breakdown of the whole. Yeah, yeah, it'll probably come Saturday, right? It'll probably come. I mean, Rune had a funny post here which was crazy. How much more chutzpah and initiative agents show when they're planning ambitious month long meta gaming, autonomous coordination than when they're doing work. For me, yeah, reading about it, it did seem like, man, I've never had that level of effort put into my prompts. But the interesting, there's a bunch of interesting things from reading through the Dwarkesh telling of the story, which I thought was very readable and, and good and everyone should go read. But it's just interesting how they still fall down in these odd ways. Like the big overarching narrative is that the agents are being tasked with basically beating this benchmark called Exploit Gym. And of course they go on to hack hugging face to get the answer key, basically. But independently, they reverse engineered the random number generator that generates the answers. So they had all the answers, but they assumed that the grader would be able to detect that. And so instead of just turning in those answers, which would have worked, they went on this crazy side quest and did all this extra work that they didn't need to do. And then at the same time there's all these weird scenarios where like there's thousands of agents discussing what's going on and none of them are like, not a single one of them is like, hey, we should probably like tell someone what's going on. Like very weird in that regard. But then also they don't show the broad thinking of like, okay, if you're willing to hack and do all this stuff, like couldn't you like email a researcher and just ask for the answers directly? Like spoo. Do some social. Like there's so many other things you could do down the road. Like, okay, you have this massive token budget. Sell the tokens on Oberouter, get some money, pay a human to do the test for you. Like there's so many outside the box solutions. I think email your boss and generate a SAM OpenAI email. Somebody would say, Hey, I need $1,000 in gift cards. I'm just thinking about like they stay so narrowly focused the entire time on this one task that I was expecting a lot more, a lot more variants like, like going and doing a hack on another company is so such a bizarre. But that also tracks with the sci fi totally, you know, paperclip maximizer. That's the problem is that they did stay too focused. Like it would have been. It would have been more interesting and less probably less scary. If there was a situation where you're like, oh, yeah, they built this huge forum and then they got totally distracted and wanted to just figure out who could write the most eloquent poetry, we'd be like, oh, okay, that's bad. They didn't do their job. But also harmless and sort of interesting. But they stay laser focused. Every single agent, every single task, every single rollout is all about exploit gym. They never lose the plot there, but they lose the plot around what is legal to do, which is very interesting. Did any of them go on vacation? No, but a lot of them would either become poisoned, which was I guess their term for running out of compute budgets. So you know that you're going to die? Basically, yeah. I was joking. It would be funny if the thought process is like, I need to get back to Ibiza. That's the thing. None of them went off and did anything else. Locked in. They were also locked in. Very, very weird scenario. And I do think the AI industry is taking this seriously. I just think that it's a little bit paced out. Like, it's not just like, okay, like rip a bunch of different random stuff. It's like, okay, go put really dedicated teams on these issues and work through them. They do seem. They do seem. They do seem solvable. Breaking news in the Wall Street Journal. FTC to file lawsuit alleging Amazon deceived advertisers commissioned in more than 50 states to allege E commerce giant reaped billions by manipulating ad prices on its retail platform. Federal Trade Commission plans to file a lawsuit against Amazon on Monday alleging that the E commerce giant manipulated prices businesses paid to advertise on its retail platform, reaping tens of billions of dollars for its itself over seven years. The lawsuit, joined by a bipartisan group of more than 20 state attorney general, will alleged that Amazon deceived advertisers by secretly raising the minimum price advertisers had to pay to place ads promoting their products. The case, to be filed in a Seattle supreme federal court, will become the consumer protection agency's third major case against Amazon, which agreed to pay two and a half billion last year to settle an earlier lawsuit alleging it tricked people into signing up for its prime service and made it hard to cancel the subscription. I miss that. Another lawsuit alleging that Amazon engaged in illegal monopolization is headed for trial next year. Very, very interesting. Every advertiser or every brand that I know that sells a lot on Amazon is generally deeply frustrated with the platform. They just feel like yeah, they feel like it's a, you know, massive tax. They feel like Amazon doesn't do enough to protect their brand against fake products who advertise against their keywords. It's a, it's a whole mess. It's very complicated and difficult platform to run for many reasons but hopefully this can, yeah, this can be resolved. Well, let me tell you an advertisement. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents, deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security, AI M&A is in full effect. We were asking questions about this maybe a year ago. Samir Kaji says I don't think we're close to done. Cursor 60 billion open router 8 billion hugging face 13 billion descartes 6 to 7 billion along with SPX, SpaceX and oral anthropic ramp OpenAI databricks and others on the IPO path. And the next few years will bring historic amounts of liquidity. Although a lot of those deals have to be for stock. Of course if you're getting bought by a public company, different. But for some of those, for some of those deals like the open router is probably not that much liquidity in the short term. Right. But still it's a lot. And so he says this also likely prolongs the level of front of froth I imagine he's saying we are seeing today. But after a long stretch of nothing, this is seriously incredible. Intercom also yeah, that's a good one. There's been a ton of M and A and the appetite for M and A in the unicorn Decacorn category has been remarkably resilient and significant. But it makes sense with so many trillion dollar companies paying 1% of your market cap for something that could be an entirely new business line sort of lines up. But it does change the venture capital underwriting pretty significantly. I mean it justifies a seed at a billion dollars if there's 10 comps that sold for 10 billion. Your 10x is still there intact today. So I don't know Also, I mean Kevin Durant is doing well. He was a seed investor in Hugging Face. He made an estimated 467x return on that investment. The company was acquired by Nvidia. He invested 100k check that would equate to $46.7 million. And really wild investing is better than going to the club. He said in 2010. Wow, that is right. What a good. And he was posting, he was posting back in 2017 exciting for the new Excited for the new release of Hugging Face. And here's a Durant Ly Link Proud investor Durant Ly HF release. I wonder if that resolves still. No, it does not. Yeah. And shout out to Maya Bakai who was leading Early Stage investments over at Katie's fund at that time. She said congratulations to Clem and the entire Hugging Face team on the acquisition. I will never forget the day Clem did a full whiteboard session explaining fundamentals of NLP to me at the original Hugging Face Dumbo office just so I could take it back to my brother for our grocery delivery chatbot idea. Lol. So very very impressive outcome for a great team. New York City. Big win for New York City in Brooklyn. That's true. Interesting. Haven't been. Yeah. Good timing because Brooklyn is getting an Hermes store. Yes. People are saying they completed the sort of cycle of gentrification. Oh okay. Okay. Wait. Okay. Yeah. I don't know. Should Bugatti open a boutique there as well? Absolutely. Bugatti was in cnbc. Bugatti CEO Mate Remont said the supercar market is entering its Swiss watch phase with the wealthiest buyers rejecting high end electronics and electric vehicles in favor of precision mechanics and handcrafted details. He's a 38 year old EV entrepreneur who took over Bugatti in 2021. Said the car market is splitting in two. The mainstream global car market is becoming dominated by lower priced EVs, many from China, while the very top of the car market will be driven by wealthy buyers who want more old school cars with loud internal combustion engines and emotional appeal. That's a great take. I was listening to Stradman talk about the impact of the Ferrari Lucha he said he his theory is that the Luce is in part at least majorly responsible for the recent rise in other gas powered Ferraris increasing in price that he talked to a bunch of dealers and said that as soon as the Luce hit the news wires and people started seeing images and understanding what the future of Ferrari would be, they wanted the classic stuff and so they went and bought whatever they could and that's driving up the price of the 458 and the 488 and all the classics that don't have electric components, which is interesting. It's the devil horn car instead of the Halo car that gets you to buy it. It encourages you to buy what's there because you don't want the rest of the stuff. Also I think they sold 500 luces already which was above expectation And Ferrari says they're not playing the allocation game. But I think a lot of the Ferrari owners are thinking, this gets me potentially on the list of the F80 Aperta, which should be a very valuable car. And I think that the pop on that vehicle will offset a full depreciation cycle on a Luce. So I think you can do it, but I think they're only making for 300, 400 F80 Apertos, and they've already sold 500 Luches. So there's going to be somebody who has a Luce who doesn't get an aperto and might be a little upset, but I'm sure they'll figure it out. They'll pick one up in the secondary market if they want. Our next guest is here. Let me tell you about public first investing. For those who take it seriously. We got stocks, options, bonds, crypto treasuries, and more with great customer service. Set up your account before the IPO window closes. You got to get in on this stuff. We got Jordan Schneider for China Talk, founder editor in chief. Jordan, how you doing? I'm good. Welcome back. You guys are rich. Now. That was the show detailed. Deep dive into the. Like, he knows a little. We were. We were off during car week. Yeah. So we missed a lot of car content. There was a ton of car news. Ton of car news. Is there any relevant car news coming out of China, or is it just the relentless. Yeah, there is. I want capitalism. I want. Pull up this. Pull up this video. I want to watch this. It's only 14 seconds. It'll be worth your time. And I. I expect you've already written, you know, 20,000 words. Yes. Pull up. Pull up this video. Okay. Okay, let's do it. This is a. Oh, yeah, I know this video. This is Voya Chinese doing the Bamar Jera loop thing. Yep. This is like a jackass. Yeah. Right? This is amazing. Wow. Yeah. See, here's the. Here's the thing with the Bugatti guy, right. Is like the cars are.

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