Hi, I'm Eric Newcomer. And I am Madeline Rinbarger.
And this is the newcomer podcast.
Each week, Eric and I discuss the VC deals and the drama that
went down. Let's do it.
Here we go. Oh, a loyal supporter.
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Microsoft scared the shit out of everybody in AI world when some
analysts said, oh, they're abandoning their data center
efforts. Madeline, I, I sent you on a
wild goose chase tracking that down.
What, what happened? Like are we?
Is the sky falling? We both kind of jumped on that
in the editorial meeting early this week.
I know. So yeah, I dug into that over
the last couple days and the sky is not falling.
Now is not the time to call the market peak.
Microsoft basically reiterated in a follow up story to CNBC
that they're still planning on spending $80 billion investing
in AI infrastructure. So I.
Know there was that iconic Satya clip where there is scrutiny
around how much people are going to spend and Sacha is like,
we're good for our 80 billion. You know, it's like, it would
have been sad if he's like, cool, like we're doing it.
Yeah, his gangster move. Yeah, exactly.
No, So that is still their line. And the analyst note mentioned
just a couple data centers that are not fulfilling all leases.
Part of it is also, you know, they're really pivoting more
into the US investment in AI infrastructure here rather than
abroad. So it seems to be more of just a
shuffling of resources. But the AI skeptics kind of had
a field day with this. So I was kind of patrolling
around talking to VCs and tech people like, this isn't a
signal, is it? And basically everyone says.
And we we had the big fortune story being like, you know, open
AI can't deliver. You know, there there was some
FUD, fear, uncertainty and doubt this week.
I think in AI world, honestly, I think it has to do with the
overall macro situation. It is like if if the economy
comes off the rails, then the thing everybody's most bullish
about could be be in trouble. You know, it's like growth,
growth doesn't do well and panic.
So I'm definitely getting more scared about the economy.
A semaphore had a piece that the business world is already
souring on Trump. The schizophrenia around tariffs
is not good for business. Kind of proves your your
argument you've had for a while now, Eric.
Stability is good. Yeah, I don't know I'm not going
to take too much credit on that. I didn't not the only one to say
that, but anyway, back to AII mean.
The funny thing is like we don't quite know is Microsoft sort of
saying we were early so we already made the bet.
Now we can sort of chill out while everybody over hypes it is
the situation that open AI is sort of like ah, we don't love
Microsoft as much we're gonna spend some time with Oracle.
I don't know yeah right. It's.
A follow up analyst note from the same group, TD Cowan said
that a big part of this, you know, could be related to
Oracle's new partnership with Open AI around Stargate.
Of course, SoftBank is backing these data center investments in
the US. So it's really just seems like
there's more competition now, like Microsoft's, you know, lock
on Open AI is no longer, you know, just one to one.
I wouldn't panic. It seems much more tied to
Microsoft's individual situation than it does to a overall call
on AI investment. Everyone's ramping up.
Medic is committing billions more in their latest, you know,
announcements. So data center investment is on
the rise overall. NVIDIA had its earnings.
I don't know. We don't go crazy over public
earnings here, but the market, I mean, NVIDIA seemed to deliver,
right? Yeah, they beat.
Net income increased 78 percent, 80%, but the the market sort of
shrugged. Right.
It's, it's kind of, I think to your point, it's another point
to add to the argument that overall sentiment around the
economy is what's driving this rather than actually anything
coming from the performance because they beat projected
earnings. But there's all this fear on
tariffs in China and like they're chip business in China.
So it again comes down to sort of the macro environment, fears
around tariffs and the Trump administration's policy being
not good for business. NVIDIA has been driving the
whole market, so sort of does make sense.
If any stock is subject to macro concerns, the ultimate market
carrying stock would be we. What?
Oh my God, in the worrying signs of the times perplexity raising
a $50 million venture fund? Not not necessarily.
The most optimistic fact is this.
Are we bearish? Are we calling bear on
perplexity? I mean, they've raised so much
capital that they're now throwing it into a venture fund.
Are they not building right now? They certainly are.
I'm, I'm being a little harsh, but it seems like it's a
partnership with some F7 ventures GPS and who will kind
of plan and allocate the capital and lead deals.
So it's not like they're, you know, fully pivoting to just
becoming AVC fund. Fully.
They're not pivoting, but it is when, you know, it's the
classic, you seem distracted sort of sign.
Tyler Cowen had an interesting piece just sort of rounding up
sort of the AI news this week, basically explaining why he
thought AI wasn't going to have as huge of an impact near term
on GDP growth as some might hope.
With I think his core point being that human beings, we we
remain the problem and that the sectors that need the most
improvement like healthcare and education are the ones that are
often most resistant to AI. Yeah.
And beyond that, you know, construction and services, a lot
of industries where it's clear that there are AI tools getting
built that can really benefit these industries, but they're
heavily regulated and getting that tech integrated into the
workflows. It just takes a lot of time.
And business leaders in the sectors are just really slow to
adopt new technology, almost famously.
So a bunch of the government being another key player here,
you know, like government adoption is huge part of our
economy, but it's going to take a while for AI to get there.
I think it was honestly a fair take.
It's definitely not a bearish take.
He's still very bullish on the technology.
Oh, yeah, yeah, yeah. I mean, I think it sort of
describes where we sit. I mean, it's like, yeah,
important technology, but it's not at the moment the stuff of
sci-fi. Speaking of, as we're recording
this, I think there is a live stream right now that Open AI,
it's Thursday at like 3:30 Eastern.
And I think Open AI is sharing GPT 4.5 which is I guess notably
not 5. It is still their largest and
most knowledgeable model yet. They, they've said, you know,
but it's not a frontier model and they've kind of, they've
kind of hedged it. It is its largest LLM and it's
improving on GPT 4's computational efficiency by more
than 10X. The company sent a statement.
So it certainly is a step up. It's just not quite at what
maybe we were predicting GPT 5 to be in this.
Where's my PhD? I need you.
Know you need your PhD. Assistant PhD at my fingertips
and I will accept nothing less. That's our roundup of all of the
AI news of the week. Seems like there were just gobs
of it. But moving on, there's also
media news of the week that Eric you got involved in, as per
usual. What's the point of having a
podcast where you can talk about whatever you want then to talk
endlessly about media, self referentialist industries.
Two big things happened that I was opining about on Twitter and
I will talk about here. 1 Jeff Bezos said that the Washington
Post opinion page would now be oriented around free markets and
personal liberty, which. It sounded very like we're
trying to copy the Wall Street Journal.
Exactly. There already is a paper that
does this. I also joked, you know, I, I
wrote honestly before Trump was elected, I was tweeting the
newcomer is pro capitalist blah blah blah.
Yeah, we've been on this before. It was cool.
Yeah, exactly. Which whenever the other people
join you to the party, then I'm naturally by disposition, like
not a party I want to be in anymore.
Like overcrowded. I'm like, so I guess markets are
getting overhyped. I don't know.
What did you What was your reaction to the Washington Post
news? I found it frankly just
pandering to the presidential administration.
I I took it as just like, oh, we're not going to hit you too
hard on this. We're going to focus on markets
and stay out of politics and have kind of this free market
idea. But also it just felt so like it
just, it felt like a statement that came from the same place
that his non endorsement in the presidential race came from.
And the more worrying thing to me over any of this, it's like,
obviously this is the editorial board.
It's not like taking control of The Newsroom and what they're
publishing in straight news. But it did just feel more like,
oh, well, of course if you're a billionaire and you buy a
newspaper, you're gonna influence what's in the paper.
That's what this is a beautiful part.
Well, I I sort of you know, I'm we're very small publication,
but you know, owner, publisher, author and it's like I
certainly, you know, no matter how big newcomer gets, you know,
it's my name. I wouldn't want to really having
opinions that were so far from my own.
So I'm sympathetic. Like, why buy a media
organization if you can't shape the perspective?
But I mean, it's a half half joking sort of take.
I mean, I do think, you know, you're ACEO, you hire people to
do things better than you. And I think you know, David
Shipley, who's running the opinion section and a lot of
people over there, they're paying more attention to like
the great debates. They're thinking about these
things more. Jeff Bezos is, you know,
chairing Amazon, thinking about Blue Origin and spending a lot
of time seemingly partying in Miami.
So like, is he, is he dialed into the debates of our time?
I don't know. Should he be micromanaging them?
You know, I, I, I think, you know, there, there are lots of
conflicting impulses on the Jeff Bezos Washington Post situation.
But I do agree with you that the, the conflicts are really
unappealing. I mean, hence Smith said on this
podcast a year plus ago, like, we're all in sort of the courts
of billionaires. And like, you can really feel it
with this, where it's just like Jeff Bezos's personal, you know,
interactions with Trump matter a lot.
And we don't really get a lot of visibility into it.
And that's impacting what was once, you know, the second most
important newspaper in the country.
And that that's just like, it's it's a sad statement for
journalism, obviously. And that that's really sad.
And I do think like, not to talk my own book, but like Newcomer,
when we put stuff out, it's like, yes, it reflects my
sensibility, but then you can interrogate all of me and I
respond and I engage with Jeff Bezos.
It's still like he's not going to take culpability for every
opinion piece in the Washington Post and he's not going to be
answerable to them. So it's sort of like, I'm going
to put my thumb on the scale in a somewhat hard to assess way,
in a way that you could never really fully hold me accountable
for what's published. And so then it's sort of, it's
tainted. It's not a publication that's
like, we're trying to represent the legitimate debate in the
United States right now. It's like, oh, it's sort of
relevant to what Bezos thinks, but not enough that he'll
actually take ownership, answer questions and like, do the hard
work of having a coherent ideology represented in the
pages. So I just think it's a solution
that's not going to leave anybody happy.
Another piece this week too, that you got involved in, Eric.
You know Brian Johnson of Longevity fame was front running
when he claimed to be a New York Times hit piece coming out about
him. Everything has become tactical.
I was most upset that like journalists get tagged with
like, oh, they have they're he's like, they have an obligation to
be like fair and accurate and objective objective.
I don't I don't agree, but but it's like the journalists get
like this sort of, oh, you've taken on moral obligations,
whereas I'm just like a wild person who just flings shit at
the wall and like nobody cares, you know.
So I hate that sort of idea that because journalists have taken
on certain ethical expectations that somehow they should be
viewed more harshly then sort of the influencer class who just
like says whatever they want and acts with pure sort of self
interested strategic opportunism.
And so, you know, I keep hammering this point that I'd
rather be an influencer slash creator that exceeds
expectations than a journalist who disappoints them.
You know, we live in this world where if winning means winning
the battle on social media, like better to just like have better
results than the person you're arguing with, then have the
person you're arguing with be saying, well, you hold yourself
out to be some beacon of morality and I'm just a mere
billionaire in some cases. You know, it's like the media,
they know they I'm a billionaire on Twitter.
Just Elon literally is saying, you know, next to the president,
like, oh, yeah, we're going to get some stuff wrong, you know,
but it's like if there are a reporter ever gets something
wrong. And so, you know, in the very
minutiae of journalism, I think the idea that it Brian Johnson's
taking advantage of a Fact Check to wield it against the
reporter, it just sort of disincentivizes good fact
checking with highly hostile sources, you know?
And now moving on to our deal of the week, UK based Lovable, a
developer tools company raised an additional 15,000,000 in
fresh BC funding led by Creandem and angels including Lenny
Richitsky. They had raised a 7.5 million
precede back in October. But the biggest most impressive
part of this raise, which is why we're talking about it here is
they did zero to 17,000,000 AR in three months and they're
still growing exponentially. That is of course, per their
disclosure, but that's. Lovable is a idea to app in
seconds according to the website.
Looks like use chat build build an app.
Yeah, the coding and app building, clearly one of the
hottest use cases out there. And it's gaining huge traction.
I mean, that's just a incredible run rate just with such a small
team. I feel like it's also notable
that it's, you know, coming out of London, which, you know, a
lot of people have not pegged London as the hub of this AI
revolution. The UK is in the game still.
I don't know. There's there's promising
developers there. We're bullish off this lovable
deal. You know, Stripe did their,
they, they really promote their investor letter, but it is
interesting and they, they chart sort of the growth rate of
companies on Stripe break broken down by AI versus SAS.
And it shows that the AI companies took 24 months to get
to 5 million in annualized revenue, whereas SAS companies
took 37 months. So well, you know, there are
lots of questions, you know, what are the modes, blah, blah,
blah. The, the reality is many of
these AI companies are growing much faster than we saw with
SAS. And so that's got investors
really excited. Before we go, we have an
important announcement here on Team Newcomer.
We're doing another reader mailbag next week.
Important. What a big announcement we have.
We are doing huge. Yeah.
Just send us your questions. You can, you can comment, you
can e-mail us. We're both first name at
newcomer.co. We have a Google form on the
newsletter. If you look at the mailbag post,
it's if you want to be anonymous, just say so.
We'll honor it. We're also inviting screeds.
You're welcome to opine I I won't.
Necessarily, this is. One of those.
Rare times where a comment as a question is actually very
welcome, so. Also, while we have the format,
just like send us your scoop ideas or give us tips, you know,
but but yeah, we'll answer your questions next week, so send
them along. That's our show.
Thanks for listening.