I don't buy Dario anymore. He may well

be the second greatest founder of all

time behind Elon, but I am just so

burned out of the boy who cries wolf.

>> Starting off on the agenda, Anthropic

unveils mythos, but withholds it from

public release because it's too good at

hacking. Number two, public software

stocks tumble to new lows with City

saying there really is no flaw.

Optimistic. And then finally, Meta

debuts Muse Spark. It's Alex Wang's

first model from Meta's Super

Intelligence Labs. Does it save Meta in

the race to catch up?

>> So, I'm pretty bullish actually on

OpenAI in the enterprise.

>> I think it's a two-way fight. Antropic

has the advantage of clarity and focus.

OpenAI has the advantage of the consumer

business.

>> If your agents are only 60% as good,

you're in a slow death spiral. It

appears to be the most expensive IPO at

scale of all time.

>> The Elon discount rate is zero and the

Elon probability of failure rate is zero

to get to 2 trillion. I can't open the

straight of Hormuz myself. I can't do

this like enough already. Let me just

use my tokens.

Ready to go.

Guys, I am so excited for this show. Uh,

as we always have, we're going to start

with Anthropic. What else could we start

with but anthropic unveiling mythos with

the preview withheld from public release

because it is too good at hacking

discovered thousands of zeroday

vulnerabilities admittedly some were

quite old. Um how did we think about

this?

Did it deserve the reaction that it got?

Which reaction are you talking about

Harry?

>> I would say widespread fear that there

was then shown in a loss of market cap

of a lot of public companies in the US.

Let's leave to one side the was it a

marketing stunt whether they have not

have compute. Let's focus on what mythos

does in terms of cyber security and what

your correct response to that would be.

And you know if you read a lot of the

stuff it it finds a whole ton of

vulnerabilities including some that have

been lily there for years right? So

that's kind of the oh my god that's

scary and then you see and that's why

they withheld it and shared it with a

bunch of security vendors right and then

you see a bunch of kind of

counterarguments that basically some

version of this which is using older

models and using them well you can

actually get to the same outcome right

you can find the same security

vulnerabilities right and that's the

counter argue and there was a whole

bunch of twitters that said this is not

a big deal and you know I'm processing

true from the outside and and my

conclusion is those people who said it's

not a big deal are wrong and entropic is

right. And I was thinking about the

metaphor here today, right? Because what

they were saying is and it's actually

very interesting about the hologantic

revolution. It's kind of a microcosm

that allows us to talk about a lot of

things. It's like basically they are

right which is sorry the the naysayers

are right which is that you can take an

older model you can point it at some of

these issues you can kind of query you

can direct it a couple of times and

someone actually did the exercise of

here's how I found the same bugs. I have

to steer the model a little bit and you

got it right and but the comment is

mythos just kicked off on its own

agentically goes and looks at all the

code and finds them on its own right and

the metaphor I was trying to look at

here is very simple it's like it's the

difference between a rifle and a machine

gun in one sense both of them can kill

someone right but one shoots one bullet

and then stop and reload and the other

just spews guns bullets out and in the

first world war you know we all

tragically learn that machine guns are

it might be the same thing, but quantity

makes a huge difference. And I think

that's what's really going on here. The

speed at which this can process reason

across large code bases means that

they're just going to find more bullets.

They're going to shoot more bullets. So

it's not so the kind of the the Twitter

cynical it's not that different isn't

true because it's the it's the

capabilities to do so much so quickly

with such human direction that makes it

definitely a quantum step difference in

terms of real capability. My big aha was

it's it's it's not overblown in the

sense it can find stuff. I think that AI

is enabling every single breach

possible, every security hole to be

found. Not a subset of the hottest

companies, not folks trying to attack uh

open AI APIs, but everyone. And like for

example, you know, the other day my

fitness pal bought Cali, right? Cool

story, right? What was it, Harry? $100

million. 19-year-old kid from Miami,

something like that, right? A great

story. Two days later, it was instantly

breached. All the records were stolen.

3.2 million records. everyone's single

use. Everyone all the data on you, all

your HIPPA data, every single thing on

you was stolen within days and it became

a sport for a hacker. They just stole it

all. Now the root cause was and actually

this is surprisingly common. It's an

issue Superbase and others had to deal

with. Um they didn't have any

authentication on Firebase. It was but

as most databases are now built by AI,

as more and more apps are built by AI,

um the number of issues is going to

explode. And if Mythos and Friends lets

bad actors find every site the second it

launches with any PII and steal it, I

think we may enter an era later where

sites get more secure as as it's flipped

on the other side. But I think we're

going to go through a transition phase

where security is just getting worse and

worse and worse because every single

website can be instantly hacked and

stolen from it. And the whole mythos run

they said I think Claude said it took

him I don't know I'm sorry I'm going to

misquote the numbers. It took him

$20,000 of credits or a couple hours or

something like that. Right. And hey

that's that's enough that I'm not going

to do it against scales website. But if

I could if I could simplify that and

distribute against every single thing

with any PI on it, you know, bad actors

are just going to hit everybody. I think

it's a big deal. Whether this is a

publicity stunt for not having enough

capacity, I don't maybe maybe a little

bit, right? But um but everything's

going to be found every security hole.

Right. Agreed. Which is why the second

comment I'll make is I I I thought that

so the second com is that the reaction

to it in terms of security stocks going

down to me didn't make sense because I'm

like what this says is there's no doubt

that the process of going forward part

of the process of security will be to

use entropic or another code model to

check your code before you deploy to

find these vulnerabilities. this will be

a thing, right? Um, but someone's going

to have to administer that. Someone's

going to have to build frameworks and

harnesses to do pre-screening code. And

then, but then more importantly,

everyone's going to have to operate on

the assumption that if you miss

anything, they're going to find it,

which is different than if you miss

anything and you're really strategic,

they might find it. Right? To Jason's

point, if the other side now have

machine guns, then you've got to build

tanks, right? So what security is might

change. The the vendors who step up and

meet the challenge will triumph and the

ones who don't will fall away. If

anthropics say that their model now

allows anyone to find any

vulnerabilities and are going to

withhold it for 6 months, that means

that in 6 months and one day every bad

guy in the planet is going to be pinging

your your code and trying to find the

bad bits, right? So you bet you're going

to be investing in cyber. So I think the

part that made sense was the this is a

big deal. The part that didn't make

sense is the cyber stock should go down

because I think you're going to want way

more defenses because the bad guys are

more heavily armed. And yes, as I say,

it is an arms race. Do you buy Dario's

it's too powerful. We can't release to

the public. Is it just great marketing?

I don't buy it anymore. I'll tell you

something. One thing that changed with

me with the miss thing, for what it's

worth, um I I don't buy Dario anymore.

What I mean is, listen, he may well be

the the second greatest founder of all

time behind Elon. Look what he's done in

five years, right? Five years to 30

billion. The great the greatest um

grudge startup of all time, right? I

mean, it's hard as a as a founder to not

your job not to fall on the ground. But

I am just so burned out of the boy who

cries wolf. Every job's going to be

destroyed. Everything is insecure.

Everything like enough already. And like

I've heard it so many effing times. And

then about Mythos, I have to hear that

like he's created the spawn of evil if

we're not careful. Like I just can't

like I'm I'm I'm I've rotated back to to

team Sam after all this because I just

can't take the can't take the endless

boy who cries wolf. It's like even if

you're right there's I can't open the

straight of Hormuz myself. I can't do

this like enough already. Let me just

use my tokens. Seriously, I've lost

confidence in his not in him as a as a

CEO, but this endless marketing machine.

I'm tuning it out now. I don't care

anymore what he says about this stuff. I

don't care.

>> What specifically what specifically do

you not buy? I'm just trying to

understand.

>> Listen, if every Dario's like 80% of

jobs are going to be destroyed in in two

years, we need we'll need no programmers

by next week. Okay, that endless thing.

Maybe he's right, but what can I do

about it? I heard you. I heard you the

11th time. I heard you the 80th time. I

heard you on Joe Rogan. I heard you on

on on TBPN. I heard you on Harry. I just

can't. And then and then the mythos

thing and they were holding it back and

it's like I believe you're you're a

safety guy but if you talk your game too

much um I just got to check out at some

point. Show me something that's

inspiring. Like I actually I honestly

feel like his message is uninspiring.

That's the problem. It's uninspiring.

>> I'm going to push back a little on that.

Um but in the following way I think a

lot of I think a lot of the doom

warnings are wrong and the doom warnings

to date have been wrong

if you look at the unwillingness to

release chat GPT2 which in retrospect

was over overdone but I think the

concerns are sincerely held right and

yeah it it also and it also is good

marketing I acknowledge that too but I I

think the starting point is there is

belief here that these things could

happen. To be very concrete, I think

it's totally wrong about the economic

50%. I think that's beyond madness and

I'm not worried about in the slightest.

But I do believe, and I thought about

this a lot because what I realized is if

I'd met them at the sea, which I didn't

because it was outside our price

bracket, but if I'd met them, I would

have done exactly what you did, Jess, I

would have listened to the doom warnings

and I said, "That's all silly and wrong.

Therefore, I won't do the deal." Right.

And what I've learned is something more

nuanced. I think a lot of Silicon Valley

companies have this have a culture

that's overreaching and you listen you

go the grandiosity if if you're kind of

a grounded person you reject the

grandiosity but what I've internalized

is the grandiosity is is a rallying is

sincerely held because I don't believe

you can portray grandiosity consistently

for 5 years if you don't believe it. So

unless you're really psychopathic so

sociopathic I should say. So, um I I

think it's sincerely held and I think it

has a huge unifying effect on a company.

Like take for example Elon and we're

going to Mars. Like the minute we had to

file an S1 and someone had to say you

might have to go to prison if you say

things wrong. We said we're not going to

Mars. We're going to the moon. Right? So

you could be cynical. If id looked at

that deal much earlier on, I would have

said the the the cynical but incorrect

approach would have been to say I don't

think they're going to Mars for here's

10 reasons. Therefore, I'm not going to

do the deal. the more evolved approach,

and this is why I'm pushing back in on

Tropic, is I don't think they're going

to go to Mars, but I do think the Mars

vision over 20, 30 years is a rallying

cry that will allows them to do amazing

in the short term, which they've

done. And I think the same thing applies

with Dario here. It's like I think it's

all over. I think the half of Silicon

Valley, I'm going to say it here, is

running around thinking they're

inventing the next thing after the atom

bomb. And I simply don't. I don't think

we're going to unemploy 50% of white

collar workers. I think it's madness. I

think it has some legitimate dangers in

cyber security and bioteterrorism but

the manageable I think we're all it's

all over wrought but that overought

his I won't say hysteria that overworked

intensity right has allowed them to

build a culture where it had no churn

it's given them mission clarity and then

we've given them it's a given a $ 30

billion

revenue line and a possibly trillion

dollar market cap and what I've learned

and it's really hard for me because I

find all this problem Like

it's like the Airbnb. Remember the

Airbnb was the sharing economy and Uber

was the you remember the sharing

economy. It sounded like a bunch of

communism. We're all going to sleep on

each other's, you know, air mattresses.

That was a visionary fairy

That turns out what really is going to

happen is people are going to buy houses

and rent them out, right? So what I've

learned, you know, Steve Jobs was a

bicycle for the mind. It turns out we're

all just going to sit on our phones and,

you know, watch Instagram and get

depressed about other people's lives.

But the vision oomphy bit it just helps

keeps the machine of innovation churning

here people. So what I've learned to do

which is really hard is literally listen

to the idealism.

Don't say do I agree or not say to

myself will it motivate people enough to

do something where there is economic

advantage to be obtained and that's a

very cynical old person's perspective.

But that's the context in which I say I

think Dario

believes all that stuff and I think it's

useful for them and I think it's wrong.

But it's damn useful and it's worked.

>> Jason, I get you. What do you want him

to say then? Like you said, oh, I don't

find him inspiring enough. What would

what would make you happy? What do you

think he should say? And I think before

things got tougher, I think Sam was good

at teasing at this. I want him to take

us to Mars. I want to see the good side.

Even Venode, who is very direct that

there's going to be a lot of job losses.

Right or wrong, Roy disagrees, but

Venode's very direct, his point is it's

going to be okay, right? We will figure

this out with AGI. Everyone will pay

more taxes even in California. It's

okay. Mark Andre, his point is we're

entering an area of deflation and

abundance, right? I I don't need I don't

need too much on the other side. I don't

I don't need the fluff, but I just need

a little inspiration that there's some

good um and I'm not saying maybe the law

maybe the third hour of Dario's speeches

have it, but everything I see on social

media feels like he's an invertton

Debbie Downer. And um it's just uh I'm

tuning out. I'm just tuning out now. And

maybe in the enterprise he's got to

we'll just see. Listen, I don't run a $

30 billion. It this it may it may almost

have to change as the years go on as

this works less well with the

million-doll customers, right? You may

have to be more positive about the

benefits in your workflow. I think

Jason, the odd thing is we're actually

agreeing on one thing. tune out the

noise and just, you know, in the words

of Halddederman, you know, don't look at

what we say, look at what we do. I

always love quoting the Nixon White

House as what used to be the most

cynical White House we've ever seen, but

we can come to that another day. And you

know, ignore what all ignore the people

that people are saying, "Oh my god, this

could eliminate white collar jobs." And

ringing their hands and saying, "This is

awful. Look at what we're doing. We're

shipping code. We're shipping software.

We're doing 30 billion and run rate. Oh

it's amazing." Turns out you're

not buying the guilt. I mean, it's

you're not buying the guilt. You're not

buying the hand ringing. You're actually

buying the revenue. And the revenue is

amazing.

>> I'm with you.

>> It's pretty amazing.

>> I've spent a lot of the last year

attempting to help founders that they

genuinely need to move more quickly,

that they are too complacent in their

approach to AI, that this what I that

they have at best a 60% solution, 60%

answer to the problem. I've tried I've

tried to vibe code in public. I've tried

to build my own apps. I've tried to

share how we've rebooted our teams to

three humans in 28. I've done all this

and I and I know it's profoundly helped

a lot of people. I get so many messages,

so many so many public company CEOs,

leaders reach out to me. Even me, I'm

like, I'm almost done with this phase.

Like, I have alerted you, okay? If after

me with my 10 trillion tweets and 2,000

blog posts and 54 20 VC pods together,

if you haven't heard the message that

you got to like you got to catch up in

AI, may maybe I'm no Dario, but even I'm

ready to to move on to the new world.

I'm leaving the past behind. And if

we're all going to live in a world of

robots and AI lawyers, so be it. Like uh

you know, I'm I'm ready to move on to

the new world. And I'm almost and I'm

frankly ready to write off a lot of

portfolio companies and a lot of public

companies. It's time to move on, guys.

If you're not going to get there in

April of 2026, then so be it. So be it.

Well, let's mark do a markdown and call

it a day. And good luck to you. I'm

going to close with the Oppenheimer

quote. All of these founders have their

Oenheimer moment. They want to be

Vishnu, destroyer of worlds. And that's

been, you know, they all reference the

book. Obviously, everyone, you know, so

so obviously channeling Sam and

channeling their their kind of all um

kind of Oppenheimer moment, you know,

with with the new atomic bomb. My

favorite moment in that movie was when

Harry Truman says, "Get that crybaby out

of the White House." In the end, Harry

correctly says, "I dropped the bomb."

The equivalent of that is if a whole

bunch of people are fired, Jamie Mo

Jamie Diamond will fire them. He doesn't

need you ringing your hands with guilt,

Dario. It's okay. Right? Other people,

and it was a great moment when Harry

Trump correctly said, "History won't

say, Robert Oppenheimer, you killed all

those people." History will say, "You

built the bomb." And history will say,

"I dropped it." Right? And so, in other

words, get over your guilt. ship the

product in a methodical fashion. Do be

careful. I do think he was right to keep

that product back, but in the end, you

know, it's not stoppable. I I appreciate

that you I actually think he's very

thoughtful about it. So, I'm on his side

on being thoughtful. I don't think it's

fake, but this is going to happen and

other people are going to own the

problem. Onwards.

>> Onwards.

The final element which is connected but

not the same, which is mythos was

trained entirely on Amazon's training.

>> I don't think that's correct.

straightforwardly. What What What makes

you I'm sorry I cut you off there

because I've had too much coffee, but

whatever. Um

>> it feels like a three cup of morning uh

morning for Rory, doesn't it, Harry?

What are you saying?

>> Keep Sorry, keep going. Keep going cuz

I'll let you finish your sentence.

>> Well, well, um apparently Mythos was

trained entirely on Amazon's Traium

chips. Um Jasse disclosed that it's now

a $20 billion annualized business

growing triple digits. Um uh Traium now

is nearly sold out. Uber among one of

their biggest customers. Question being,

if this is the case, are we slightly

seeing a loosening of Nvidia's

stronghold on the market? And does this

change how we feel about Nvidia? First

of all, I think you need to be really

precise here cuz I checked I didn't know

this point, so I checked it. It's like

it sounds like you're a couple things.

It sounds like you're saying, "Oh my

god, they're shipping tranium chips to

others who are using who are you buying

chips and using them." They're not. They

don't to a rounding error have a

merchant silicon business. that are not

competing directly with Nvidia. What is

true is Amazon instead of buying Nvidia

chips is buying its own chips and then

offering cloud hosting services and you

know inference services and model

training services. So it's not

so think of it as less oh my god

someone's buying chips and competing

with Nvidia is that Amazon is not buying

Nvidia chips instead using its own chips

and most of that runway is internal

purchasing. So what they're really

saying is Amazon is saying we have a

capex budget of 200 billion a year this

year which probably means about half of

that typically is chips. It's 100

billion. So where we can we're buying

our own chips, of course we are. And

where we're not, we're going to have to

buy Nvidia just like everyone else. So

that's true. And then in terms of who's

quote unquote a customer, all they're

saying is this is when they're either

when they're if they're doing training

runs for Entropic, which I'm sure they

are, or they're doing inference runs,

which I'm definitely sure they are cuz

that's a product that they offer true

bedrock. When they're doing that,

they're running it on their trip. So

yes, in that sense, in that sense, some

of the mythos model was probably trained

on tranium trips, but not because

Atropic said, "Yo, I love tranium." It's

because to the extent that Amazon is

offering them compute, some of that

computes Centranium. That's all that's

happening here. But you all that said,

it's still 20 billion of dollars that

didn't go to Nvidia that went to Amazon.

So it it is at the margin meaningful.

It's 10% of kind of Nvidia's revenue, a

little less than 10%. So it's and so

it's not a mega competitor. It's just an

in-house bundle product at some

significant scale.

>> I'm loving this Rory Jason, aren't you?

is like

>> you know 10% is material like we I don't

want to we don't need to spend all over

10% is material right and I guess

>> the the bare case is just everyone's

building their own chip or deploying

their own chip everyone's trying

everyone's trying especially on

inference and um you know this is and

and that just Nvidia is dented it's

dented sufficiently to see multiple

compression it's dented sufficiently

that our 401ks go down more right it's

really just that it's that that when

things are priced to perfection there's

dent right Fortnite Maybe

>> Fortnite. Nvidia may have its own

Fortnite moment as as crazy as it

sounds. It just may be the first 30

seconds of the game on a on a relative

basis. But uh yeah, but but no one knows

this better than Jensen, right? No one

no one is is friends with his frenemies

and and friend of partners and friend of

better than better than Jensen. No one's

played this game in the history of

mankind of being kind to everybody,

pulling back, being right, understanding

the dynamics, and still winning. So

crazy crazy good at it, right? doesn't

get his dander up on this stuff like

most of us do.

>> And remember, I I I think Amazon and

Nvidia had a famously have a famously

difficult relationship. So, they're

probably the company most interested in

not buying from individ. So, I think I

think what you're saying is fair at the

margin. It's 20 billion like to have 10%

is not meaningless market share.

>> Yeah. But, you know, the big picture

comment is compute is scarce, chips are

scarce, they're pretty much sold out,

the stocks at 194, and you know, it it

didn't super accelerate it when they did

that trillion dollar backlog comment,

but it didn't go down either. So, you

know, I I I think we're up against the

constraint limit rather than anything

else.

We're going to stick on Anthropic, but

Moonlight Anthropic to now compete with

lovable directly. They launched recently

in the last 48 hours a competitive

product. Um,

>> you sure it was launched?

>> Well, they announced it.

>> Okay.

>> Harry, see Harry's a media guy. He

thinks when things are announced that

they're real. Jason is a software guy.

He actually thinks you have to ship

product.

>> No, it's all about the announcement.

Surely you've seen that in the last few

days. A

>> as the lovable replet guru here. Look, I

mean Claude Code is clearly directly

competitive with Cursor and then you

have this slightly different segment.

I'd love your opinion, Jason, on kind of

the the lovable replet segment. What do

you think the competitive

threat from a Claude from a slant

onropic to those players? I mean, cuz

>> well, look, Eric from Bolt on these

screenshots. Eric from Bolt said, "Oh,

we we all I was with I was at a dinner

with the CTO of Level. We all knew this

was coming. It was just a question of

when." And then I asked him if he

thought the screenshots were real and he

said it didn't really matter because

because it was coming, right? So, so

that's that's a that's a a number three

or number four players view. The meta

question, you know, if this were if this

were 52 episodes ago, um I'd be like,

well, you know, it could happen, but

it's it's not important enough. They're

going to have to get into databases and

hosting and identity management and OOTH

and and and and enduser support, like

consumer level enduser support. They

like it's a whole bunch of things

culturally that they don't want to do,

right? But the pace of innovation at

Enthropic is so intense that on a

whiteboard, it's hard not to want to

grab a couple billion of extra revenue

from vibe coding, right? Because because

you're just you're just a database and

an ooth uh and and sort and and a few

other, you know, for them it's 30 days

of work, right? Um so I don't know, but

the classic the old school the old

school the old school VC would be like

it's distracting. Even if they launch

it, they're not going to maintain it.

They're not going to have support.

they're not going to they're not going

to put all the resources you need to

maintain it. But the the truth is and

maybe Eric from Bolt's point is maybe if

they don't directly compete at the

proumer level, right? Even if they don't

build a a base 44 lovable replet, they

might just go halfway there and that

might be enough. Like it might be a it

might be something that developers use

who just want to get something going,

right? It might be something that that

more technical product teams use, which

is like the number one highest ROI

category for ripe unlovable. the these

these product teams and they may only

target the the nerdier the more

technical part of the market and that

might be sufficient to again maim maim m

name m name the folks right um it

doesn't have to be 100% they don't have

to replace shopping sites and stuff like

that to have a material presence so but

you know that that Anton and Amjad and

everyone thinks about this 26 hours a

day how do we stay ahead right how do we

stay ahead um and um and it may just be

maming. If it happens, it may just be

maming, but maming hurts.

>> But Jason, those product teams could

just use Figma make, right? I mean,

>> they can't use make.

>> Don't feed. Now you're just Now you're

just poking the bear. Harry,

please leave the bear alone.

>> Well, I'll tell you.

>> Well, we could talk about

>> Annie's off. Annie's off.

>> No, I just um

>> Well, well, let's stay on this topic. It

actually ties to If we talk about

software stocks, why I've become more

pessimistic since the last show on them,

but

>> Oh, no. Why have you become more

pessimistic? But because we are kind of

ahead in this agentic thing, right? At

least in the real world. I do talk to

lots of teams, lots of senior product

teams, lots of CEOs at massive, more

than I ever done in the last 10 years

combined. Okay, every week multiple

zooms, multiple calls, and there are

exceptions for for sure. But I would say

here's why I'm pessimistic and why I

think that the draw down is accurate.

Even though I don't understand the

public markets, I think almost

everybody's building a 60% solution and

make is an example. You look and you

look what Claude did or or or prompting

did last November and you spent the last

four to 6 months building something

that's kind of similar to what what

these products were like 5 to 6 months

ago, but you can't really explo afford

the tokens. You're worried about the

cost. You can't build all the features.

Um, you're trying to use cheap models to

bring cost down. You're trying to limit

it and you end up with make, but

everyone has a make. Why is make so

crappy? It's because you didn't care

enough to spend the money or put the

team and make is a good copy of replet

or lovable from last summer, right?

That's what happens. And and by the time

make catches up to replet and lovable

today and then and then they decide it's

too expensive and then they decide they

have to lock it down because they can't

afford the agents and tokens. Now you're

9 months behind and 12 months behind.

And so what I mean is and and so it's

not just that you're have a 60%

competitive solution. Here's the meta

problem for the incumbents. You can't

charge for a 60% solution. Here's the

problem. If you could charge 60% of what

Claude charges or or Lorra charged or

Replet charged, that'd be great. That

would that's enough to charge 60%. But a

60% product has to be free. It has to be

included with your base charge. And

while we're recording this, for example,

today, HubSpot's launching its next

group of AI agents, right? And I'm

excited to try them and I will be

supportive. If they're only 60% as good

as a standalone solutions, HubSpot

cannot really charge for these things.

You can't get away with charging another

20, 40, $60,000 to HubSpot customer. If

your agent is fine, it works like in

isolation. When I meet with internal

product teams at large companies at

scale, they are so effing proud of

themselves. They show me their agent

that they built. They show me their vibe

coding thing and if I didn't use any

other products, I'd think they were

great, too. Or if this was 51 weeks ago,

I would think these products were great.

And they're so insular at their 2,000

person company in their in their in

their fancy campus wherever they are

with their mugs at bringing their mugs

to the meetings because because at their

pace and and and they're failing even as

they're proud of themselves with their

60% solution because the market will not

pay. They will use it like they'll use

your pro your your 60% solution but

they're not going to pay for it. They're

not going to pay for it. And so you're

you're you're stuck in this doom loop of

yes I have an AI product as a public B2B

company but no one is willing to pay for

it for a 60% solution. They're not

willing to pay 60%. And so we can say

all these companies have moes and

service now has the biggest mode of all.

So it shouldn't be sold off and this and

that. But if your agents are only 60% as

good, you're you're you're in a slow

death spiral. And that's what I see. I

can't think of maybe one or two

exceptions of everyone at scale where

their agents are as good as either a

standalone company or just what I can do

in Claude. Now, I can't maintain Claude,

there's a whole bunch of issues, but if

it's only 60% as good, there's no way

I'm going to pay this this AE that just

called me up 100 grand for it. I'm not

going to do it. It's not good enough.

You checking the box does not work with

agents. The check the box feature cannot

be monetized in the AI era. And this is

why I think they're all properly

sold down because none of them h they

all have 60% solutions. All of them. All

of them. And they should be

it's it's do or die guys because you

can't sell these things. You can't sell

these things, right? And that's and know

the one there's two counter examples. We

could argue over agent force and and the

the the base 44 Wix one may not save

Wix, right? which has repurchased like

30 or 40% of its company, but at least

they made a bet that got them beyond a

60% solution, right, to 9 figures in

revenue.

>> I I I I agree. I I I think

I I think there's a lot to unpack on

what's happening in SAS, but I think I

I've internalized that Jason has

articulated one of the big truths, which

is unless you have a product that's good

enough to charge for independently,

you won't have revenue acceleration of

any meaningful scale. And if you don't

have revenue reaceleration, then you're

in a different valuation metric. And

I'll talk about how to value it value

mature companies with probably

persistent users, but stockbased comp

issues and no growth issues. And you can

do that. And you know, one of my rules

is price clears all market. There's a

price at which Service Now and

Salesforce are all quote unquote worth

something. So zoom out a million miles.

Jason is right. If you can't charge for

your you won't reacelerate. And if

you reacelerate, you instantly move to

another valuation bucket. Right? So I

actually I've listened to you a few

times and I think there's a clarity of

simplicity there because you can talk a

lot about, hey, we're doing this or the

other, but the gut level test is can you

charge for it? So I I I really it's a

big freaking comment, right? Because

I've been wrestling with what do you use

to sort out all these public SAS

companies and you know what are the how

do you think about it, right? And if

you're in a market where there is high

if you if you're in a very workfl

now there might be other things that are

more payments related or stuff like that

where I think there's different dynamics

but if you were in a workflowcentric

world for the last two decades like

salesforce and service now you are in an

agentic world now and if you're in a

world now you better have exactly what

Jason says agents that are worth the

money which means they do the work. It's

actually a very brilliant test and I

think if I was I'm literally looking at

the horizontal software applications

list for Morgan Stanley and Jason you're

right that it was probably the first if

I'm thinking about how to value this

bucket of 1.6 6 trillion. That is the

first test. If yes, then you're on the

increasing value scale and you can make

it out. And it's still going to be hard.

See Wix for details. If no, then you're

in the how do you value

a company with um you know mid mid

single to high single digits growth rate

at best probably I think an example

sales are very sticky and you know you

might be hit and I think that's a

separate valuation question right I

think that you know at nine times these

things are trading now at 8 to nine

times cash flow you might be hitting a

point where just the money allows you to

be a deep value player you're you know

the pees of something like salesforce

excluding stockbased comp are it's 11 or

12 times forward PE when the market's

20, right? This is unparalleled, right?

So, if you want to make yourself a value

play, money can still be made, but it's

it's a grim way to make money. The only

way to still be a growth play is to pass

the Jason test. So, that's my zoom out

comment here, right? And again, you said

it in financial terms a few weeks ago,

which is reaceleration, but today you're

actually articulating the the pre

predecessor test. If you have a gentic

workflows, then you will have

reaceleration. Then you'll be in the

Jason Happy bucket. And if not, then

you'll be in this the tragic value

bucket and you will have to do hard

things that would make Dario and Sam

cry. If you're going to make this thing

cash flow, it's going to be involve SPC

reduction. It's going to involve

headcount reduction. It's going to

involve a bunch of grim And you

can probably still make money, but

you're also top stopped. Nothing magical

will ever happen to a high singledigit

growth rate tech company that's kicking

off cash. At best, you build a mini

version of IBM CA and the top five

executives make money. It's not going to

be fun. Right. So, you're right, Jason.

Would you buy Service Now?

>> No, I wouldn't buy any of them.

I wouldn't buy because I I'm looking

I'm looking for products that are more

than a 60% solution. I don't it's just

the world's moving too fast and no one

wants um when we started this this pod I

wasn't sure if I believed it or not. I

was probably on the fence, but there was

definitely a sense that the models might

plateau, right? That that that there'd

be parody. Um that they're all pretty

good. They all basically could could

could could do a chatbot. Um it's

clearly not the case today. If we tie

tie it to the beginning of this

conversation, the models have radically

accelerated their power since December,

right? Since since since since Opus 45

and more, and we haven't used Mythos or

whatever, it's going to be even more

powerful. And so I'm not optimistic that

that anybody um building to last year's

spec slowly can compete. It's too

furious. It's too furious. And um and I

also think that the problem with Moes is

they keep your customers in, but they

don't lure any new ones in. No one's

excited to cross the moat except the

folks that want to breach the castle

walls. This whole moat discussion, I

think, is at the edge of moronic, right?

It's at the edge of hooray, you have a

moat and your customer I signed a 5year,

you know, the average service now deal

between three and 5 years. So what? That

doesn't bring in anybody new. It doesn't

bring in aentic revenue. It just means

I'm trapped. Prisoners prisoners don't

create growth uh other than at the

margin, right? Other than other than

with the margin.

>> First of all, I love the mode analogy.

That's great. And what you're basically

say because I've listened to this is

that what you're basically saying is

Jason is not a buyer of any stock that's

not a growth story,

>> right? I think it's good, right? And I

think so and I and I I've come to the

conclusion you were right on that. And

one of the reasons I enjoy doing this

part is when we argue sometimes I change

my mind, right? Because let's I want to

play out the value track just for

another few minutes. Right? I think the

problem with the value play I think at

this price I think you make money on

Salesforce but unless they get regrowth

you're going to make single digits

returns and the overall Ibson small cap

is 11 so you are you going to

underperform I actually think the other

thing you're wrestling with

in terms of these stocks is the

following the weird thing right now is

the public markets don't have access to

growth to the growth side of software

they have if so right now the trade is

sell sell SAS buy semis which

effectively means sales buy AI making AI

right what you don't have yet in the

public markets is AI native companies

starting with entropic and open AI right

and therefore you've you know mythos is

a wonderful word because in fact you're

comparing the practical values of owning

Salesforce with the mythical values of

owning this company that's growing 10x

where you've never seen the actual

financials no one's seen GAP financials

but oh my god it's amazing And

everyone's always going to want the

myth, you know, pick your girlfriend,

boyfriend analogy. It's the, you know,

the the practical realities of the

person you're with now versus the

mythical example of something that could

be. So my other aha is these stocks

aren't going to trade in the same

fashion until five or six public of

these two of the foundation models and

four or five other um AI gen AI native

companies are public. And then you can

finally as a public market investor say

okay now I can choose do I want let's

put right do I want entropic growing at

that one probably 5x at 30 times

revenues with huge losses and big

stockbased comp or do I want boring ass

salesforce growing at 10% with 30%

operating margins and at that point no

stockbased comp loss right at least now

you can have a choice the and then then

what'll happen is then we'll find out

how to evaluate those two things and

that you know it's probably going to

take six 12 months after the IPOs

My point is until then what you're

dealing with is the mythical desire for

the as yet unrealized relationship,

right? So these stocks are going to

trade for until then is my big aha

because no one's going to be able to

value them, right? The only people that

get out of that mess now are what Jason

said. If you if you manage to claw your

way to growth as a

public SAS company, then you do actually

have some kind of chance of trading up.

And but if you got to trade on

fundamental value,

you're always going to be chasing this

kind of fear that the model companies

can do everything you can. I don't think

they can. I think when the model

companies go public, people are going to

realize, oh yeah, Salesforce in its

current form, it's probably going to be

there for the next couple of decades.

It's worth it cash flow. But Jason is

still right. Unless it gets its

together and makes great agents, it's

it's another IBM. And you know, when did

you last even I don't even know the

price of IBM cuz why would you? I

believe someone's probably made money,

but it's not my problem, right? You just

become a boring ass old thing. So, I

think Jason, summary, you're right,

Jason. If you don't have gold, and it's

an interesting question is, and Wix is

interesting because

because I think that's an they're kind

of they've done what you suggested,

Jason, they're trying to get growth and

they're getting growth. And as yet,

you're right, they did a buyback and the

stock's down 20% since then. So, my aha

from that is

>> they've done 1.6 six to buy back nearly

30% as they bought it at $92 and the

stock fell 23% on the week in whenever

that happens you got to say to yourself

that wasn't a good week right it's

that's kind of like an inverse bill

girly instead of selling stock instead

of selling stock and then it goes up you

buy stock and then it goes down that's

like the IPO premium but the other way

it's like oh my god that hurts even more

talk about leaving money on the table

and I think the aha is to Jason's point

they did one thing brilliantly which is

figure out they got to product out the

door. Maybe they should have sat on

their capital for another 6 or 12

months, kept it in reserve to maybe buy

another AI product or invest behind

their AI product because I don't think I

think these stocks are going to bounce

around in value trap land for a long

time. So now you we may be wrong if they

if they really nailed their growth on

the new product and the low and the kind

of vibe coding product really

accelerates and you know you look back

six months from now and you know

growth's at 15% and the stock's way up

you'll go oh yeah it was fine it was

just the next day reaction thing but the

the point is fix the Jason problem which

is core growth before you try and do

financial engineering you can and in

Salesforce don't fix financial

engineering is useful, but it's not the

solution. In the end, if all you can do

is grow at 8%, you can tw you can screw

with your balance sheet to your little

heart's content. You're never going to

matter a dam. As I said, you'll be IBM.

They've screwed around with that stock

forever, but nobody cares. You got to do

the Jason thing first and put all your

effort on that. It is tough that, you

know, Salesforce did a big buyback, too,

right? I think they bought 25 they did

25 billion of debt to buy it stock on a

spreadsheet. This looks brilliant,

right? We can support it, right? Um,

yeah, we wish the debt was a little bit

cheaper, right? It was a little but but

but this is the simplest thing we can

do. Retire a significant amount of our

shares, right? Drive up our EPS and keep

going our agentic transition. But um,

arguably, you know, the market at best

shrugged it off. At best, it already

priced it before it happened, but in the

short term, no benefit. All this

financial engineering that looks great

on a spreadsheet amounted to to nothing

in the short term, but 25 billion of

debt.

>> I totally agree, J. Not only that, but I

think one of the big advantages you have

as a public company with cash flow

positive is your financial flexibility.

I wouldn't trade that for anything. Cuz

look, one of two things that happens if

the AI wave rolls on without a blip,

then your stocks and and you don't have

a growth story as a public sum, then

your stock's going to be cheap two years

from now. There's no hurry to buy it.

>> Yeah.

>> Right. Second thing is if there's a blip

then the guy in the market with a public

currency and 25 billion in cold hard

cash maybe you buy five big things in

private land that allows you to compete

maybe you buy not a tropic but a second

tier financial you know um model maybe

you buy one of the big apps companies

>> if you can but if you can afford it

Salesforce is one of the few people that

can make a big bet here it's one of the

>> point is this that's why I would have

kept my 25 billion in my back pocket

right like it's what you

around short term with your

stock and the number of shares. The only

people who care about that don't matter.

You got to win the war. And there's some

chance that in the next two years

there's a blip in the market. All these

AI companies are burning money. And if

you're sitting there with $25 billion,

you could have been saying, "Come to

daddy. I got money. Let's talk about how

I'm going to be an AI behemoth." And I

think that would be a better use of your

time and your money. Come to daddy, I

got money. uh on on that topic. Uh Alex

Wang uh founder of Scale obviously now

at Facebook following the acquisition of

scale. Meta debuts Muse Spark first

model from Meta Super Intelligent Super

Intelligence Labs which obviously Alex

runs.

I mean the candid like truth is I did

okay. It was decent. My question to you

on the back of this it was decent. Not

quite as good as the others but good

enough. Is this Facebook back in the

game? And is this a encouraging sign for

Facebook where you feel more optimistic

post it or less given it didn't blow

anything out of the water?

I think it's a win. If you're not in the

game and then you get back in the game,

that's a win. So if you're fifth, you're

in the game. I I So I told I mean you

read all the reviews, you know, I

haven't got hands on the model. I don't

have the level of sophistication to

evaluate, but I did read a lot of the

reviews of people who did. And you're

right, the summary is good in some of

the things that they were working on at

Scale AI a year ago, not so good at some

of the newer things that the advanced

labs have been developing for the last

12 months, which totally makes sense.

You took your knowledge from a year ago

and you implemented it, right? But I

mean, leaving aside the question of does

it make sense to be in this game at this

level, leaving that aside, if you if you

decide as Mr. Zuckerberg that you want

to be in this game, then you achieved

your mission. You spent $14 billion and

you're back in the game. Now you got to

move up the league table. But yeah, I I

felt this was a few cuz you know had you

done all this and you did a lamb of four

which was disappointing where people are

like it's not even you know credible

then you'd have felt like a and

you don't. So I think it was a win. Also

worth noting that they're talking much

being much more closed source which is a

significant thing because at some point

someone's going to need the American

version of open source and LMA was that

and now they're pivoting more to being

more closed source which has

implications across the ecosystem and is

a bit of a bummer but yeah know I think

it was like a few exhale

um not sure why we're playing this game

but if we're going to play it I'm glad

we're not losing anymore. Stepping back

though to where we're going toward the

back half of 2026.

Um I don't think if I if I'm Zuck and

I'm looking that Google owns its own

models which have become extremely

competitive, right? Um that's that's one

of my big direct and adjacent

competitors. If I want to be in the big

leagues, maybe I just have to own this.

Like I don't I don't I'm not Apple. I I

don't want to be stuck buying tokens

from Anthropic or OpenAI. I'm Meta. I

have the one of the dominant consumer

advertising in other platforms on the

internet. I have the dominant social

networks and I sure better own I sure

better own this. It turns out it is not

a commodity. And maybe maybe maybe this

is it's way too much money down the

drain, but this is this is core to our

existential existence just like it is

for Google. And I don't I don't want to

wither. I don't it may that may not have

been where this all started, right? Um

but the goal of Facebook is not to

provide uh API tokens like anthropic.

This is this is not the the direct goal,

right? Or it certainly isn't to uh to

encourage the open source community to

rise up and use meta products. Um, this

is to stay in the top echelon of of

software of of consumer software

companies and it's worth 14 billion.

It's worth 14 billion, right? If you

just don't want to be become Apple and

dependent on everyone else's models, you

just don't want to be that, right? And

um, you know, if you can just do better

than the the Kimmy open-source, etc.

stuff Cursor is doing, it might be worth

it just for that. just just to be in

that in that in that zone between what I

can just rework purely from open source

into what I can buy from anthropic if

I'm close enough and this is my core it

might it might be worth owning

ruthless this is as competitive a

company as exists on planet earth right

this might be the most competitive

company on planet earth is meta right

ruthless

>> yeah I mean if you look at if you look

at this if you look at the big play

scoreboard for that it's like bet a

billion on Instagram win 100 billion

plus maybe 400 billion bet 70 billion on

Meta um and the V are lose it all. Bet

14 billion on this and clearly have a

win and you know somewhere in the middle

between those two outcomes and you feel

good. I agree. The other thing just and

again it's not totally my expertise but

when when again when I look back when we

started this show a lot of folks thought

AI would kill Google search and maim

Facebook that Facebook was dying as a

platform and that why Google search was

of course dead chat GPT was going to

destroy Google right fast forward today

these are record growth businesses now

right Google search we started the show

talking about AI overviews and other

things and Google search is a better

business than it has ever been as is

Facebook and Instagram so it makes sense

to to to triple down there. This is not

a time to retreat. This is not a time to

retreat for either of them. It is not a

time to retreat. It is a time to get

that lance out, go straight into battle,

just knock knock those other guys off.

>> Meta surpassed Google, I'm sure you both

saw, is the largest ads engine in the

world. I think met 243 billion.

>> I didn't kill it yet.

hope that stock price comes

back.

Um, speaking of ads engine, Open AI

projects 2.5 billion in ad revenue for

2026. The ads pilot was 100 million

annualized in just 6 weeks. There were

600 advertisers. We touched on it

before, but they're guiding to 11

billion in 2027,

25 billion in 28, 53 billion in 29. Is

ads the great comeback for open AI in H2

2026? Is this the shining light that we

should be directed towards?

>> It's both obvious and inevitable that a

consumer product like OpenAI Chptd is

going to have to be ad supported. So

yes, they're making the moves exactly

the moves you'd expect, right? And yeah,

the and the little chatter of, oh my

god, that's a bad idea or it's not doing

enough that we saw from before a few

weeks ago, it's all said. This is just

going to happen. Three people have done

it at super scale already. Google has

done it in 2004 on um Meta themselves

have done it in 2008

really 200 probably seven and eight on

in 2012 in mobile and then Am we always

forget Amazon I think got to about 100

billion plus on ad revenue in the last

you know kind of half a decade or

probably seven or eight years at this

point right so the the movie is clear

right and yes they got to get and

they're talking about getting to hundred

billion dollars in four years it all

makes sense right The funny thing is,

and I looked at all that and I thought,

"Yep, that t and I'm, you know, it's

funny. I'm mentally giving them 100%

credit for getting that opening eye is

typically not unaggressive in its

projections. So, let's assume this

progressives are aggressive." You this

going to sound really awful and I hate

even saying it. Oh my god, 100 billion

is amazing, but it's not enough relative

to the market cap. In other words, so

the bigger hop for me is you can build a

hundred billion dollar ad business

in chat GPT which makes sense and in the

context of a total trillion dollars of

total ads with Meta already having 300

of that, Google already having 200 ad,

Amazon already having 100 of that and

TV's got to eat too, you know, right?

That's probably a realistic high-end

estimate, right? What it means is you

need another 100red billion plus from

your enterprise business. That was the

big aha for me is consumer alone ain't

going to be enough to feed this beast

because your competitor who's all in on

enterprise is you know already at 30

right and you're so that was my as I say

I I almost feel like a jerk saying it's

like hey congratulations on your hundred

billion dollar ad business probably one

of the three or four best ad businesses

ever one of the best launches ever but

it may be that corporations want to buy

more intelligence than consumers do and

that 100 billion consumer ads won't

support your burn. You need more.

>> The 100 billion is what 15% of ad spend,

right? Of

>> 10. 10 at a trillion worldwide.

>> 10 something 15. I I like this as a goal

for 2030 cuz it's clear what people

should be doing. We can't just add 100

million of ads to chatb.

We have to build something that is as

essentially as big as several of our

competitors. It's well understood why it

works. We're not directly in commerce.

We don't have the advantages that Amazon

does, right? Um, but can we achieve the

scale of of Facebook and others? Yes.

This is our job. This is our job, guys.

And every week we're going to iterate on

it. We're going to improve it. We're

going to make it better. It is

mathematically possible. This is not as

aspirational as the enterprise stuff,

right? It's mathematically possible.

This is our effing job. We're going to

review it every week. We're going to put

some of our best team on it. And, you

know, it's it's doable. And if it comes

up short a year or two like Elon, I

mean, it would suck for the IPO, but

it's not the it's doable. It is

achievable, right? And so I think

because it is achievable, it will be

achieved. I actually think it will be

achieved.

>> I I think you're you're exactly right.

And it's clarity a whole bunch of things

they've been lacking.

>> Clarity on the enterprise side. I will

say one thing. You know, there was this

memo from this week that that that

leaked from Denise Dresser, right? Who's

the CRO president saying, "Wow, well,

first of all, Anthropics overstating

their revenue. We're still ahead." And

saying, "Hey, we have all you know, we

have the capacity. They're out of

capacity." And blah, blah, blah. Okay.

At first blush, this memo to me, I mean,

it it's it it it seemed like a flashback

to something that Mark Benoff might

write, who I love, but more appropriate

for Salesforce than for OpenAI when I

first read it, right? And her last gig

was CEO of Slack, right? So, my first

blush, I thought it seemed out of place

at an AI leader, but then I thought

about it and I'm like, this is the exact

type of messaging you want to win

traditional enterprise customers. So,

I'm pretty bullish actually on OpenA in

the enterprise because all this

enterprise DNA they have which probably

didn't help a snail's a snail's inch the

last 12 months in the future when all

the models are so powerful and big

enterprises are trying to make decisions

between a couple of top brands. I think

I think the ability to

sell this directly to enterprise versus

coming in from the bottom coming in

through the CTO coming through the other

coming in from functional groups is

going to be very powerful. So I think it

may be hiring the you know OpenAI said

they're going to double in size right

and a lot of it's around selling motions

to the enterprise. I think it's going to

work. I think they're going to run a lot

of the traditional playbook which is

going to work better and better in 2027

than when it did when the last year was

ask your developer. that that was the

land and that's why anthropic one ask

your developer I want I don't want

copilot

I want opus and your developer picked

everything developer picked it for your

app and it you I'm using the old twilio

mantra because it worked for years until

it didn't and I think it's going to work

for LMS until it doesn't until the bud

until you go deep into traditional

enterprises and if open AI which is you

know it's going to be the number one or

number two brand for as long as we do

this show I think they may be able to

outsell it versus uh hey the world's

going to end from Daario. Thanks for

letting me in the lobby. Everyone's

going to be unemployed next week.

That one may cast a chill in the CIO's

office. Thanks guys for having me. Most

of you won't have a job next week. I I

would have two comments because I'm I'm

not quite in that place. Maybe three

comments, right?

And one is the one aha I had from this

is that you know the the comment on

comput is the ball game right is you

know whatever about the long-term

overinvestment and I still angst about

that there's no doubt in my mind that

right now

everyone is compute scarce and there's

going to be no restraint no one's going

to blink on their investments for 2026

you actually know the next four quarters

of Nvidia announcement you know the next

four quarters of everyone one of the

infrastructure advant which is every

single thing we can make if you can

count the wafer starts at TSMC you can

predict Nvidia's revenues everything is

going to be sold out from now and for

the next 12 months because if the rate

limiting constraint is compute then

everyone's just going to buy compute

right so that was the first big thing

computable and yeah they've got some

interesting position relative to

anthropic in that they were more

aggressive so they have more compute so

yeah that's that that's one thing it

also means by the way the second

consequence is you're going to see some

compute ration people are going to start

allocating tokens to the highest

effectively the highest bidder. You're

going to see a lot of throttling like

you're going to see these plans like

that's why they shot Sora. You're going

to see some of the clawed plans get

throttled down. You know that's what

money is for. It's to allocate scarce

resources. It's actually the definition

of economics. It's the study of the

allocation of scarce resources right and

they're going to start allocating those

scarce resources of compute via price.

So that's one big trend. Um, the second

one, I don't know if you're going to see

that level of flip from, oh my god, it's

all entropic to oh my god, it's open AI.

I think it's a two-way fight. H,

entropic has the advantage of clarity

and focus.

Open AAI has the advantage of the

consumer business, right? And they're

going to have to slug it out, right? I

think hang on but I I I think Antropic

has the the little just the way they've

played the last 12 months have a

slightly better lead right now both in

terms of perception and in terms of

developer friendliness but open eyes is

not going to roll away and die right I

think I want to come back to a point I

made earlier which

I've only processed true now but

sometimes it's important to say the big

very clearly right if you do

consumer versus enterprise typically the

biggest things have been a cons I mean

If you look at you Google, Google's

consumer business and ads is twothirds

of the value and you know maybe the

cloud is maybe one/ird roughly right and

the big money has been in consumer right

bear with me when I say the obvious but

consumers actually don't want to they

want really great chat GPT there might

be some models like you know kind of

friends and companion models but

fundamentally when I go home I want to

buy Netflix when I go to work I want to

buy intelligence it may well be that

that the zoom out comment from all this

is enterprise is twothirds of the

ball game in AI and consumer is oneird

or less which is the flip of the last

time because you would have thought two

years a three years ago when chachi PT

exploded that that was a really great

launching point right but if in fact

enterprise is the better place then yeah

you're going to have a good consumer

business but the ball game may be

compute but the ball game from a

customer's perspective may be two/3s

enterprise one/3 consumer which is the

mirror opposite of the internet. And

that's just one of those huh big picture

comment because I realize I don't go

home and want to do cognition. I go home

and I want Netflix. I go to work and I

want thinking and they're selling

thinking. It's an enterprise business.

And by the way, you get into a really

fun and interesting discussion which is

above my pay grade, but I started to see

comments about it is do the things you

do to make a consu the model consumer

friendly, you know, the happy like does

the same model continue to work really

amazingly well for both? You know, if

the enterprise wants clarity and

concision, if the consumer wants a

little more friendly answers, do you

really find that divide the tone and the

persona of the consumer model and the

enterprise model start to become

different? I don't know if that has

implications, it's above my pay grade,

but it's in a category of something to

think about.

>> I think I think very much so. And I

think you've seen it on like consumer

research studies. So, they've seen that

actually younger people like Open AI

because it's much more supportive of

their emotional challenges

>> and in you're exactly and in and in

business. I don't want support. I want

to be told these five things are good

and these three things are bad. Like

when we're doing investing, we don't

want supportive. We want decision. It's

almost the exact opposite. I want harsh

critique. This is a stupid deal. I want

the AI to say, "This is a stupid deal,

Rover. You looked at this three years

ago. It was dumb then, it's dumb now.

Stop, you idiot. Here are five

fact-based reasons why this is wrong."

And if you give that in a consumer app,

you're not going to have great lifetime

value or retention.

>> That was interesting. You know, Aaron

Levy had a had a tweet this year this

week about his latest road show meeting

with CIOS from Box. And um he talked

about how so many of the CIOS meeting

with now are are are token maxing. And

what he meant was they are now they are

they are creating ideally fixed token

budgets really. I you know they're

they're dollar budgets rather than

numerically tokens for the coming year

and they're making the departments fight

it out per project. Now, this is where I

think the game is going to change again

with the leaders because when most of

the budget is essentially rogue, when

it's developer teams picking anthropic

almost universally last year, when

you're giving them the budget because

the the throughput is so intelligent,

you're finding budget for that team. Um,

or you're using discretionary budget to

bring in to bring in little agents. It's

one thing. When the CIO takes control

again of how many tokens across a large

enterprise, that's a very different

calculus of which vendor I choose from.

And if the CIO prefers to buy OpenAI

because it's got a more traditional

sales motion, it's packaged better. It's

better used. And there will be

exceptions. There will be exceptions in

departments. They will get exceptions.

But overall for the enterprise, I'm

standardizing on OpenAI for 2028. It is

the right choice for our Fortune 2000

company. It's just a different world

when you know whatever the 60 billion in

Open AI and ChatB revenue, all the

enterprise stuff is still in some sense

rogue today. So much of it is rogue. It

is out of budget. It is out of band. It

and and as that changes, it will change

which vendor we buy from.

>> If you are correct, and I'm not sure you

are, what it says is the people who

should go into guidance counseling are

Microsoft and Open AI because they need

to get their relationship back together

again. Cuz who is the dominant path to

every single enterprise in the world?

It's Microsoft. They need to get some

couples therapy. They need to accept

that they're different. They have

differences but they can reconcile and

they need to start because otherwise

they're going to get the clock cleaned

and that frankly as I think that's an

indulgence that OpenAI can no longer

afford. Right. And

because you're right is that the other

guys have stolen the march has stolen a

march on the kind of developer love.

Microsoft can go top down. I don't care

about your long-term competitive

dynamics. You need to kiss and make up

here people. So if you want it and if if

we agree that enterprise is twothirds of

the game, Microsoft is the key and so

you know figure it out, go to therapy,

talk to your issues and get this thing

back together again. And then the other

comment to make is I just want to give

an advert for Aaron is that I I read his

tweet last week about his you know

comments from the road show and look I

said this before we were lucky enough to

back Aaron 16 years ago and many years

in fact last year we had him back at our

invest at our annual meeting just to

talk. Erin is a walking investment

insight. I mean, I read his tweets and

I'm like literally I send it out to the

group and say, "This is the latest

thinking on what you should be thinking

about about what CIOS are thinking

about. Just read this and then you'll

know, right?" It's just so that was such

an insightful tweet about agents. He's

not a doomer employment at all. He's

like, "People are going to be rolling

this thing out and if you understand

what they're doing, you will have a role

here." And he has a really good feeling

that you he talked about token maxing.

It's like beyond

Silicon Valley, there are going to be

meaningful budgets. there are going to

be constraints and this thing, you know,

just a real sense of how CIOS on the

front line are rolling out AI. I just I

just think it's excellent. So, I I

follow him all the time.

>> I thought it was so excellent. I

actually messaged him and said, "Do you

want to come on the show this week and

do it?" And he said, "I would love to.

Let's do it tomorrow." And that was this

morning. So, I'm actually doing a show

with him tomorrow about this tweet

thread.

>> He's in that rare combination of

frankly, you know, grounded enough in

terms of 15 years calling on CIOS. 15

years calling on CIOS to really know

what they think and at the same time

frankly young enough and flexible enough

to really understand what AI is doing.

It's literally like an investment

insight. It's like a one of my

colleagues even said it when he spoke

last it was like he said literally it

was like having an invest it was just

like an investment memo spewed out on

enterprise AI. Good for you.

>> Yeah. Here's the thing now. Just the one

tough thing and I I almost don't want to

say it uh because I love

>> you can say it.

>> But if he can't reacelerate box with his

incredible depth of like 10 out of 10,

right? If he can't re what hope is there

for so many other leaders, so many other

unicorns and others if he can't get

boxed to 20 to 30% growth, I'm I'm

giving up on on the rest of the world.

>> It's a totally fair comment. given up.

>> Absolutely.

>> And I and I hope he is I I look I admire

them so enormously for and I really hope

they can reacelerate,

>> right? Because I do think he's

>> he knows everything that's happening and

he's not pretending. He's not he's not

he's not like so many folks are

pretending as engaged he's ever been,

right? As stressed as he's ever been. He

can't work any harder. If he can't get

this reacelerated,

uh good god, who the hell can who who

the hell can? We had the financials for

SpaceX leaked a 5 billion loss on 18.5

billion in revenue. The reason it's so I

think important for the audience is

there are so many endowment funds and

managers who hold SpaceX in some way who

are awaiting the IPO later this year. Um

the loss is driven by the XAI

acquisition not by operations important

to add. Uh but the $2 trillion potential

IPO is a big number and the math needs

to be worked out.

>> Okay, keep going.

So 18.5 billion in revenue at 2 trillion

is 108x.

Did these numbers change a perspective?

Did they confirm a opinion? Didn't

change confirmed.

But let's break it apart a little bit.

The first is okay all technical

accounting on you now. Right. I can't

when did XAI close? Because pulled

accounting is gone. Pul County doesn't

exist anymore where you retroactively

recast the financials as if the

companies were together. So that's only

the loss from when XAI was acquired,

right? And I think it was late last

year, early this year. So we actually

don't know the actual run rate, right?

Do you understand me? In other words, if

the deal closed in in October 1st, then

that would only reflect one quarter of

loss. So anyone hypothesizing on it's

profit or it's profit excluding that or

it's only or it's quote unquote only a

$5 billion loss until I see the actual

gap financials I don't know right

let's start with

>> it could be 20

>> right exactly

>> $20 billion loss

>> but but it but I think the rough

trajectory of it will be something like

the following

we have an amazing we have a an amazing

launch business with a near monopoly on

cost effective launch and that price

could come down with the next generation

rocket

We have an amazing business on Starlink.

I think the ex the whole XA in

retrospect I think you'll look back and

go I'm not sure I would have paid 250

billion for XAI. And then the question

as you say is how do you value that

relative to 100 times revenues and you

know we've talked about this before. I'm

not going to say it's right or wrong

because I think what I would say is

obviously very few things trade at 100

times revenues for any extended period

of time. Let's just say that. So, it's

clearly underwriting a level of growth.

It's underwriting a reaceleration of

growth even of the Starlink business,

which is plausible based on the future

things they're doing, but feels like a

lot, he said gently.

>> It appears to be the most expensive IPO

at scale of all time.

>> Yeah, it appears to have no one at scale

that has IPO has ever has ever IPOed at

a revenue multiple approaching this,

right? I mean the case will obviously be

all the future things you know what is

space and you read the bold case and as

I say as I say I'm trying to avoid the I

don't believe it and I try to express my

concern rather than saying oh I think

that's crazy I just say you have a you

have the existing business and then you

have a series of new initiatives around

direct to cellular and all of which and

then obviously data centers in space you

can articulate a massive market and

the question as I've said before is so

you take these adjacent times. And if

you give them a 100% probability of

happening and a 100% probability of them

happening right now, in other words, no

NPV because it takes five years to make

it happen, then you probably get to $2

trillion. If on the other hand, you

apply a probability of it not happening

in a time value of money, you get to a

lower number. And maybe that's a good

way to reduce it. I mean, the Elon

believers are saying, "These are the

future things, and I ascribe 100%

probability of success." And it's like,

I'm going to give them credit for today,

even though it's going to take three or

four more years. And so it's basically

the Elon discount rate. The Elon

discount rate is zero. And the Elon

probability of failure rate is zero to

get to 2 trillion. If you put a more

conservative number in both of those,

you probably end up in a different

place. You still have the upside. You

still have the long-term story, but are

you getting paid for the risk? And

that's a way of framing it. That's not,

oh, I think it's silly because a 100

times revenues is just too much. I think

that's a reductionist argument. I think

that what's really what you're really

saying is I'm looking at all this future

time and perhaps being more sober about

the probability of it happening. I'm

revising my prior from oh 100 is crazy

which is just too simplistic Rory to

what are you saying about these other

markets when you feel that it should be

at 30 times revenue you're effectively

saying maybe it takes four years for the

data centers to happen and the direct to

sell to happen and maybe the discount

rate for that is 15% and maybe the

probability of success is 70 but not 100

and pretty you know you multiply all

that you got to get paid for the risk

Jason, what topic do you think we should

discuss that we have left?

>> Um, some private stuff.

>> There's uh uh some private stuff.