1 00:00:00,600 --> 00:00:03,720 Hi, I'm Eric Newcomer. And I am Madeline Rinbarger. 2 00:00:04,120 --> 00:00:07,000 And this is the newcomer podcast. 3 00:00:10,280 --> 00:00:14,000 Each week, Eric and I discuss the VC deals and the drama that 4 00:00:14,000 --> 00:00:15,800 went down. Let's do it. 5 00:00:16,040 --> 00:00:20,040 Here we go. This episode is presented by 6 00:00:20,040 --> 00:00:23,040 Brex, the financial stack founders can bank on. 7 00:00:23,280 --> 00:00:26,680 Brex knows cash is king for startups, so they build a 8 00:00:26,680 --> 00:00:28,960 banking experience that takes every dollar. 9 00:00:28,960 --> 00:00:32,960 Further, unlike traditional business banking solutions, Brex 10 00:00:32,960 --> 00:00:36,000 has no minimums and no transaction fees, and you can 11 00:00:36,000 --> 00:00:38,520 get 20X the standard FDIC protection. 12 00:00:38,640 --> 00:00:41,880 Even better, you can earn industry leading yield from your 13 00:00:41,880 --> 00:00:44,800 first dollar while still being able to access your funds 14 00:00:45,040 --> 00:00:47,880 anytime. Get the business account trusted 15 00:00:47,880 --> 00:00:54,360 by one in three US startups at brex.com/banking Dash Solutions. 16 00:00:54,600 --> 00:00:59,560 That's brex.com forward slash banking dash solutions. 17 00:01:02,240 --> 00:01:05,640 Welcome to the show. I spent my week in uh, crypto 18 00:01:05,640 --> 00:01:09,080 land, talking to a lot of VCs about the Bitcoin Strategic 19 00:01:09,080 --> 00:01:11,680 reserve. Thanks Trump and David Sacks. 20 00:01:12,080 --> 00:01:14,400 Thanks, Cryptozar. They've got even the crypto 21 00:01:14,400 --> 00:01:16,600 skeptics in the crypto weeds this week. 22 00:01:16,920 --> 00:01:19,680 We're recording this on Thursday, but on Friday there 23 00:01:19,680 --> 00:01:21,920 will be a crypto summit at the White House where hopefully 24 00:01:21,920 --> 00:01:24,480 we'll get a little more details about the Bitcoin Strategic 25 00:01:24,480 --> 00:01:27,200 Reserve. But as of right now, it's a 26 00:01:27,200 --> 00:01:30,080 little muddied because Trump kind of blew up a lot of 27 00:01:30,080 --> 00:01:32,920 people's spots on Truth Social saying that we should Add all 28 00:01:32,920 --> 00:01:35,720 these other alt coins into the crypto strategic reserve. 29 00:01:35,960 --> 00:01:40,920 It all feels very thrown at the wind to please some people and 30 00:01:40,920 --> 00:01:44,200 holders and it just makes the whole thing seem even more self 31 00:01:44,200 --> 00:01:46,200 enriching. What the consensus from you 32 00:01:46,240 --> 00:01:48,720 people you talk to is, it shouldn't just be Bitcoin, 33 00:01:48,720 --> 00:01:51,080 right? Yes, the investors I talked to 34 00:01:51,080 --> 00:01:55,800 who are even holders of Solana and all these coins say adding 35 00:01:55,800 --> 00:01:57,400 other coins to this is a bad idea. 36 00:01:57,400 --> 00:02:04,200 Anthony Pompliano had talked, he even said the adding other coins 37 00:02:04,200 --> 00:02:07,120 is a bad idea. Investors I spoke to who are, 38 00:02:07,160 --> 00:02:11,080 you know, more reputable, I'd say we're also in agreement that 39 00:02:11,080 --> 00:02:14,920 it just makes the whole deal look even more self enriching. 40 00:02:15,000 --> 00:02:18,120 And it has, it serves no purpose except to, you know, pay back 41 00:02:18,120 --> 00:02:21,800 coin holders, which I think has been a theme of this 42 00:02:21,800 --> 00:02:23,920 administration's approach to crypto and how it kind of 43 00:02:23,920 --> 00:02:27,360 complicates things for founders in BC's who on the one hand are 44 00:02:27,360 --> 00:02:30,440 super happy about all this boosterism and deregulation in 45 00:02:30,440 --> 00:02:33,160 the space. But it's being used to do Trump 46 00:02:33,160 --> 00:02:37,360 and Melania meme coins and self enriching and makes the space 47 00:02:37,520 --> 00:02:39,800 look shady. With Bitcoin, there's this 48 00:02:39,800 --> 00:02:43,480 sense, I think it maybe this was naval, but it's immaculately 49 00:02:43,480 --> 00:02:45,960 conceived. You know, Bitcoin doesn't have a 50 00:02:45,960 --> 00:02:48,160 founder. There isn't a clear person 51 00:02:48,440 --> 00:02:50,080 that's going to make a bunch of money off of it. 52 00:02:50,080 --> 00:02:55,360 And therefore it's sort of not playing favorites to raise it up 53 00:02:55,360 --> 00:02:56,400 with the government. I don't. 54 00:02:56,680 --> 00:02:59,560 I mean, it's true, but you are just sort of playing favorites 55 00:02:59,560 --> 00:03:04,040 to people who wildly speculated outside of the US government 56 00:03:04,040 --> 00:03:08,000 interests and now sort of reward them with a currency that could 57 00:03:08,000 --> 00:03:11,480 be competitive with the US dollar, which doesn't make any 58 00:03:11,480 --> 00:03:13,680 sense. But putting that aside, yeah, 59 00:03:13,680 --> 00:03:17,200 the idea that like Ripple, which I think some huge percentage is 60 00:03:17,200 --> 00:03:21,680 controlled by like the creators or the company behind it and 61 00:03:21,680 --> 00:03:24,240 Solana, Yeah. I mean, it's very clear that you 62 00:03:24,240 --> 00:03:28,000 are just picking favorites. I think Matt Iglesias or 63 00:03:28,000 --> 00:03:31,080 somebody joked like, Oh yeah, next the government is going to 64 00:03:31,080 --> 00:03:33,920 buy like GameStop. You know, it's just sort of like 65 00:03:34,080 --> 00:03:38,440 what's the buzzy like stock we can hand out to our like crew 66 00:03:38,440 --> 00:03:41,160 and and pump it. It's just crazy. 67 00:03:41,280 --> 00:03:43,520 It hasn't even been that good for the price of Bitcoin, right? 68 00:03:43,520 --> 00:03:44,960 It's. No, the price of Bitcoin has 69 00:03:44,960 --> 00:03:48,200 actually been falling this week and it it really peaked in 70 00:03:48,200 --> 00:03:51,680 December and has been not able to reach that high since, so I 71 00:03:51,680 --> 00:03:53,440 think. People thought, oh, man, you 72 00:03:53,440 --> 00:03:56,920 know, there are expectations, like if Trump and the government 73 00:03:56,920 --> 00:03:59,200 get behind it, then this thing will really take off. 74 00:04:00,040 --> 00:04:02,320 It didn't seem to move the needle that much. 75 00:04:02,320 --> 00:04:05,600 So it'll be interesting. I think it comes down to this 76 00:04:05,600 --> 00:04:09,240 tension between the legitimization of the space like 77 00:04:09,240 --> 00:04:12,040 and people and actors in the crypto industry who want that 78 00:04:12,040 --> 00:04:14,760 and to be more in the financial markets and the scammier parts 79 00:04:14,760 --> 00:04:18,120 of the space that the others kind of feel are bringing down 80 00:04:18,360 --> 00:04:21,600 and hurting the value of their assets with these kind of self 81 00:04:21,600 --> 00:04:24,760 enrichment schemes, which I feel like is frankly a common theme 82 00:04:24,840 --> 00:04:27,600 throughout crypto's rise candidly. 83 00:04:28,480 --> 00:04:32,360 And, you know, I the self enrichment piece, you know, I 84 00:04:33,720 --> 00:04:37,520 have thought it's, you know, the SEC made a mistake clearly in 85 00:04:37,520 --> 00:04:42,160 retrospect, the Democrats by trying to sort of govern through 86 00:04:42,160 --> 00:04:47,080 prosecution, you know, or lawsuits, you know, because now 87 00:04:47,080 --> 00:04:49,200 Trump is dropping them all. I think they just dropped the 88 00:04:49,200 --> 00:04:52,800 one against. Is it Hugo Labs, the NFT? 89 00:04:52,880 --> 00:04:54,360 Yeah, the. Maker of board? 90 00:04:54,560 --> 00:04:55,520 Yeah. The maker of board, Yeah, They 91 00:04:56,000 --> 00:04:57,440 dropped that. They dropped that. 92 00:04:57,440 --> 00:04:59,280 They dropped a couple other NFT suits, Yeah. 93 00:04:59,800 --> 00:05:00,960 Right. And obviously they dropped the 94 00:05:00,960 --> 00:05:03,720 Coinbase 1 pretty early on. I think about, we talked about 95 00:05:03,720 --> 00:05:06,200 that here. So it's just, you know, they 96 00:05:06,200 --> 00:05:09,560 didn't succeed. And also instead of having clear 97 00:05:09,560 --> 00:05:12,400 bright line rules that everybody could operate around, they just 98 00:05:12,400 --> 00:05:16,040 created this mess and and now Trump's undoing it. 99 00:05:16,200 --> 00:05:20,360 And we, the public, don't really have a sense of which of these 100 00:05:20,680 --> 00:05:26,120 lawsuits or cases was about enforcing some rule 101 00:05:26,120 --> 00:05:30,720 interpretation versus which ones seem to be sort of sketchy and 102 00:05:30,720 --> 00:05:35,880 somehow, you know, breaking sort of more classic laws and rules. 103 00:05:35,880 --> 00:05:40,920 So it allows for this perception of corruption that is 104 00:05:40,920 --> 00:05:44,240 unfortunate. I think also another key debate 105 00:05:44,240 --> 00:05:46,960 that sparked in all of this that's related but not directly 106 00:05:46,960 --> 00:05:49,280 tied to policy, The Wall Street Journal had a really good piece 107 00:05:49,280 --> 00:05:53,040 about the sort of disparity between the stable coins Tether 108 00:05:53,040 --> 00:05:55,560 and Circle. There's Tether, the Wild West, 109 00:05:55,560 --> 00:05:58,040 no centralization, and then there's Circle. 110 00:05:58,400 --> 00:06:02,480 We want to work with government. We're this is USDC and we're 111 00:06:02,480 --> 00:06:05,320 we're the good guys. They just found that leaders of 112 00:06:05,360 --> 00:06:08,200 Tether are claiming that, you know, Circle has been bad 113 00:06:08,200 --> 00:06:11,120 mouthing tethered to politicians and whipping up enforcement 114 00:06:11,120 --> 00:06:14,280 actions and been accusing them of doing this to, you know, 115 00:06:14,280 --> 00:06:17,000 further enrich themselves by becoming the friend of 116 00:06:17,000 --> 00:06:19,560 regulators and bringing tether down with them. 117 00:06:19,840 --> 00:06:22,640 And so it's kind of sparked this feud between the two leaders, 118 00:06:22,640 --> 00:06:26,520 but also paints this picture of where they stand in the in the 119 00:06:26,520 --> 00:06:30,000 game right now and where the cryptos future is really tied to 120 00:06:30,000 --> 00:06:32,560 this ultimately super decentralized idea. 121 00:06:32,560 --> 00:06:36,920 Or if staple coins in backing by the US dollar is the move going 122 00:06:36,920 --> 00:06:39,280 forward. And I mean, separate from this 123 00:06:39,280 --> 00:06:42,080 piece, in my conversation with investors this week, they were 124 00:06:42,080 --> 00:06:44,360 all bullish on stable coins, especially ones tied to the US 125 00:06:44,360 --> 00:06:46,760 dollar. That is one thing that they say 126 00:06:46,760 --> 00:06:49,720 has clear value. Stripes acquisition of Bridge 127 00:06:49,840 --> 00:06:52,800 really proved that that was a major deal and a huge crypto 128 00:06:52,800 --> 00:06:55,960 exit for a lot of these folks. And it showed more traditional 129 00:06:55,960 --> 00:06:58,800 finance even within fintech, taking this space very 130 00:06:58,800 --> 00:07:01,040 seriously. And that could be one area for a 131 00:07:01,040 --> 00:07:03,480 lot of value accretion in the future, but. 132 00:07:03,720 --> 00:07:07,720 But it's wonky payments reason to like crypto, not the fun 133 00:07:07,720 --> 00:07:11,560 reason that all your favorite Twitter accounts put laser eyes 134 00:07:11,560 --> 00:07:14,720 or whatever, you know, and not the wild speculation piece that 135 00:07:14,720 --> 00:07:19,320 people find so endearing. We're we're in this moment where 136 00:07:20,000 --> 00:07:23,360 I every investment is now under suspicion. 137 00:07:23,360 --> 00:07:25,560 I mean, this is the problem. It's not just that you don't 138 00:07:25,560 --> 00:07:28,680 want corruption. You don't want the perception of 139 00:07:28,680 --> 00:07:31,320 corruption. And I think hopefully even Trump 140 00:07:31,320 --> 00:07:35,040 partisans can admit he's not doing a good job of avoiding the 141 00:07:35,040 --> 00:07:38,400 perception of corruption in that, you know, David Sacks is 142 00:07:38,400 --> 00:07:40,960 on Twitter being like, I, I don't have conflicts of interest 143 00:07:40,960 --> 00:07:42,680 about my holdings. Like maybe. 144 00:07:43,000 --> 00:07:45,840 But you know, he's like, wait till we have the whole report 145 00:07:45,840 --> 00:07:47,920 And, you know, we're not we haven't disclosed it yet. 146 00:07:47,920 --> 00:07:51,840 And obviously Trump himself feels like he loves conflicts of 147 00:07:51,840 --> 00:07:54,160 interests. I mean, there was a report he's 148 00:07:54,160 --> 00:07:55,640 getting paid to meet with people anyway. 149 00:07:56,040 --> 00:08:00,400 So I, I just that plays into Silicon Valley investments. 150 00:08:00,400 --> 00:08:03,920 I mean, it was interesting that Harry Stebbins, you know, of 20 151 00:08:03,920 --> 00:08:07,680 minute VC tweeted out that founders fund, you know, Peter 152 00:08:07,680 --> 00:08:11,720 Thiel's firm's current growth fund is the most sought after 153 00:08:11,880 --> 00:08:13,840 from limited partners that he's ever seen. 154 00:08:14,280 --> 00:08:17,160 And you know, that is probably partially based on performance. 155 00:08:17,160 --> 00:08:20,720 I mean, it's a good firm, heavily invested in Androl was 156 00:08:20,720 --> 00:08:23,600 an investor in Airbnb, had a good return with STEM. 157 00:08:23,600 --> 00:08:28,120 Centrix has done a lot of great investing, but you have to read 158 00:08:28,120 --> 00:08:32,480 it as Peter Thiel and the Founders Fund guys get Trump 159 00:08:32,480 --> 00:08:35,240 world. They're deep in government 160 00:08:35,240 --> 00:08:38,120 contract, you know. I mean, obviously Anderle is 161 00:08:38,159 --> 00:08:40,440 contracting with the government Department of Defense very 162 00:08:40,440 --> 00:08:43,080 actively and growing and that's Trey Stevens Company. 163 00:08:43,280 --> 00:08:46,520 So, yeah, now they're, it feels like, oh, you have it in with 164 00:08:46,920 --> 00:08:48,600 Trump, like you're going to do great. 165 00:08:48,600 --> 00:08:52,480 And, you know, that's, that's sort of a sad state of affairs. 166 00:08:52,960 --> 00:08:56,160 And more serious traditional finance business news, the IPO 167 00:08:56,160 --> 00:09:00,240 window appears to be opening up. Finally, in 2025, biggest one up 168 00:09:00,320 --> 00:09:04,440 Core Weave dropped its S1 and there were lots of juicy details 169 00:09:04,440 --> 00:09:07,360 in that filing. Growth is the story. 170 00:09:07,360 --> 00:09:17,280 I, I think it's, you know what, 1346% revenue growth and then 171 00:09:17,480 --> 00:09:25,040 that was 22 to 23. And then it's 737% into 2024, 172 00:09:25,040 --> 00:09:29,040 which which gets it to $1.9 billion. 173 00:09:29,040 --> 00:09:32,280 So it is growing a lot. It's not making money. 174 00:09:32,280 --> 00:09:37,920 I mean, it's losing money and it's in a fair amount of debt, I 175 00:09:37,920 --> 00:09:41,280 believe. But yeah, Core Weave, you know, 176 00:09:42,280 --> 00:09:45,440 this is a moment in time where stock investors desperately have 177 00:09:45,440 --> 00:09:51,000 wanted AI stocks to bet on besides NVIDIA and Microsoft to 178 00:09:51,000 --> 00:09:53,560 some degree. And a lesser extent, the general 179 00:09:53,560 --> 00:09:55,920 Magnificent 7 tech stocks. Yeah, exactly. 180 00:09:56,240 --> 00:09:58,400 And you know Core Weave is going to give them one. 181 00:09:58,560 --> 00:10:01,560 It is heavily exposed to everything going in AI. 182 00:10:01,680 --> 00:10:04,600 One thing that really stood out to me in the S1 is core Weave's 183 00:10:04,600 --> 00:10:07,920 severe customer concentration that has led to this rapid 184 00:10:07,920 --> 00:10:12,200 growth. 77% of its revenue has come from its top 2 customers in 185 00:10:12,200 --> 00:10:16,120 2024, and Microsoft alone accounted for 62% of that. 186 00:10:16,320 --> 00:10:20,920 So it is heavily tied to Big Tech's success and bets on 187 00:10:20,920 --> 00:10:23,960 generative AI. And suppliers, you know, yeah, 188 00:10:24,000 --> 00:10:26,640 the customers. And also it's been able to get 189 00:10:26,640 --> 00:10:30,200 access to NVIDIA chips when everybody wanted them. 190 00:10:30,200 --> 00:10:33,040 And so you have this sort of scarce product. 191 00:10:33,240 --> 00:10:35,960 So it's not just your technology, it's people are 192 00:10:35,960 --> 00:10:38,520 desperate to find a way to get GPU's in the 1st place. 193 00:10:38,520 --> 00:10:41,120 So they're willing, they want to contract with you. 194 00:10:41,640 --> 00:10:43,760 That said, they're, they're in the right place, you know, at 195 00:10:43,760 --> 00:10:45,760 the right time. We're talking about crypto. 196 00:10:45,760 --> 00:10:48,920 I mean, this was a company that got its start in crypto world 197 00:10:48,920 --> 00:10:51,160 and leaned heavily into AI at the right time. 198 00:10:51,200 --> 00:10:55,400 Mike, the CEO, was speaking at our Cerebral Valley event in 199 00:10:55,400 --> 00:10:57,160 November. They get it. 200 00:10:57,200 --> 00:10:59,960 They're on the right topic, they're working with the right 201 00:10:59,960 --> 00:11:02,960 partners. They're growing insanely fast. 202 00:11:02,960 --> 00:11:06,040 So if you just say those things, it's great. 203 00:11:06,040 --> 00:11:08,520 It's just like, you know, there's competition. 204 00:11:08,560 --> 00:11:12,080 Can they be a hyper scaler? Can they do this profitably? 205 00:11:12,360 --> 00:11:14,040 And how did these relationships last? 206 00:11:14,320 --> 00:11:17,080 And the final piece, you know, the information ad reporting 207 00:11:17,080 --> 00:11:20,000 that three of the founders together had sold like nearly 208 00:11:20,000 --> 00:11:24,640 500 million collectively. So it's a huge exit ahead of the 209 00:11:24,640 --> 00:11:28,320 IPO, which, you know, makes you feel like they're not as 210 00:11:28,320 --> 00:11:30,800 financially exposed to this thing in the long term as maybe 211 00:11:30,800 --> 00:11:32,720 you'd want. It's kind of the the first big 212 00:11:32,720 --> 00:11:36,440 IPO post, you know, this massive secondary sale wave that we've 213 00:11:36,440 --> 00:11:38,440 had because liquidity has been so locked up. 214 00:11:38,440 --> 00:11:41,000 You're getting these IP OS where founders don't have as much 215 00:11:41,000 --> 00:11:44,160 control and ownership over what they've built because they 216 00:11:44,160 --> 00:11:46,920 wanted to cash out early. And core Reeve, you know, a 217 00:11:46,920 --> 00:11:51,560 notable just purchased weights and biases for $1.7 billion. 218 00:11:51,600 --> 00:11:54,160 Core Reeve is expected, according to the Financial 219 00:11:54,160 --> 00:11:59,640 Times, to raise 4 billion and value it at more than 35 220 00:11:59,640 --> 00:12:03,520 billion. That's a win in this market and 221 00:12:03,520 --> 00:12:07,240 something that investors are probably looking at as, you 222 00:12:07,240 --> 00:12:09,920 know, a really hopeful sign. As you know, we talk about will 223 00:12:09,920 --> 00:12:11,880 generative AI produce these big exits? 224 00:12:11,880 --> 00:12:14,080 And this looks like a positive tell. 225 00:12:14,080 --> 00:12:18,480 Like yes it will. And there's been some non AIIPO 226 00:12:18,480 --> 00:12:21,160 chatter this week. There's reporting that Klarna is 227 00:12:21,160 --> 00:12:25,640 going to file for a $1 billion IPO as soon as next week. 228 00:12:25,640 --> 00:12:28,880 And then Discord is also in talks with bankers to go public 229 00:12:28,880 --> 00:12:33,400 as well, which are, you know, 2 non AI companies on the face of 230 00:12:33,400 --> 00:12:36,200 it, but ones that people have been waiting in the wings to, 231 00:12:36,200 --> 00:12:38,520 you know, hit the market. So maybe they're they're taking 232 00:12:38,520 --> 00:12:41,480 this chance right now. And what chime has been rumored 233 00:12:41,480 --> 00:12:42,800 for a while. It'll be interesting to see if 234 00:12:42,800 --> 00:12:45,520 they go Discord. I mean, that'll be a fun one to 235 00:12:45,520 --> 00:12:46,880 read. It's like we don't see many 236 00:12:46,880 --> 00:12:50,200 consumer companies these days. I feel like they've been sort of 237 00:12:50,200 --> 00:12:52,960 out of the headlines. So yeah, interested to see how 238 00:12:52,960 --> 00:12:55,720 they're monetizing. Yeah, the last big consumer one, 239 00:12:55,760 --> 00:12:58,760 I think was Reddit last year during that tiny window we had 240 00:12:58,760 --> 00:12:59,920 last year. Windows. 241 00:12:59,920 --> 00:13:01,960 I'm sick of Windows. I don't believe in a Windows I 242 00:13:01,960 --> 00:13:03,560 don't know. Good businesses can. 243 00:13:03,560 --> 00:13:07,720 Go I there are people talk about them, but I feel like over 244 00:13:07,720 --> 00:13:10,360 height, you know, the companies need to be good. 245 00:13:10,360 --> 00:13:12,680 I think that's often more the challenge. 246 00:13:12,680 --> 00:13:16,680 It's like there's not a pool of companies that have figured out 247 00:13:16,680 --> 00:13:20,920 how to operate profitably while maintaining growth, and they 248 00:13:20,920 --> 00:13:22,840 they need to figure that out to go public. 249 00:13:23,760 --> 00:13:27,160 Moving on to our deal of the week, Anthropic finally closed 250 00:13:27,160 --> 00:13:30,360 its mega round that had been long reported, but now they 251 00:13:30,360 --> 00:13:34,400 confirmed it a 3.5 billion series E round which raised its 252 00:13:34,400 --> 00:13:39,480 valuation to 61.5 billion and it was led by Lightspeed. 253 00:13:39,680 --> 00:13:41,960 A bunch of other, you know, new and existing investors also 254 00:13:41,960 --> 00:13:46,320 participated, including customer Cisco Investments, D1 Capital 255 00:13:46,320 --> 00:13:49,560 Partners, Fidelity, General Catalyst, Jane St. 256 00:13:49,560 --> 00:13:51,360 Menlo Ventures. They've been back in since the 257 00:13:51,360 --> 00:13:54,400 beginning and uh, Salesforce ventures were also in this 258 00:13:54,400 --> 00:13:57,280 round. So lots of kind of Tier 1 firms 259 00:13:57,280 --> 00:14:00,160 and then more, you know, strategic growthy people in a 260 00:14:00,240 --> 00:14:04,960 growth round, but valuation is a lot smaller than opening eyes 261 00:14:04,960 --> 00:14:08,200 valuation for a similar, you know, frontier lab kind of 262 00:14:08,320 --> 00:14:11,120 company. They're both still very frothy. 263 00:14:11,120 --> 00:14:15,160 I mean, Anthropic, you know, obviously has smart models. 264 00:14:15,160 --> 00:14:19,240 You know, they're one of the top three model providers probably 265 00:14:19,240 --> 00:14:25,440 with Open AI and XAI. And then they're dominating this 266 00:14:25,440 --> 00:14:28,440 code space for now. You know, I think that's been 267 00:14:28,440 --> 00:14:30,760 key. And then Cursor is heavily 268 00:14:30,760 --> 00:14:34,440 dependent on Anthropic and Anthropic is coming out with its 269 00:14:34,440 --> 00:14:38,280 own coding tools. So, you know, if Cursor is one 270 00:14:38,280 --> 00:14:41,440 of the buzziest start-ups in the world, that's certainly accrues 271 00:14:41,440 --> 00:14:45,800 to Anthropic as well. So I think, you know, yeah, it 272 00:14:45,800 --> 00:14:47,360 makes sense. But there's also just the 273 00:14:47,360 --> 00:14:52,000 dynamic, not quite Uber and Lyft, because Anthropic to me is 274 00:14:52,000 --> 00:14:54,600 much more serious than Lyft was relative to Uber. 275 00:14:54,600 --> 00:14:58,920 But, you know, all the VCs are looking for their horse in the 276 00:14:58,920 --> 00:15:01,680 foundation model race. I think there's Anthropic that 277 00:15:01,680 --> 00:15:05,640 might be Lightspeed's biggest holding now that they've done 278 00:15:05,640 --> 00:15:06,720 it. It was already one of their 279 00:15:06,720 --> 00:15:09,920 biggest investments, but it doesn't have its consumer 280 00:15:09,920 --> 00:15:12,920 penetration to the degree that Open AI does. 281 00:15:12,920 --> 00:15:15,880 They don't have the ChatGPT killer consumer product. 282 00:15:15,880 --> 00:15:19,360 They are much more tied up with enterprise sales and sale to 283 00:15:19,360 --> 00:15:21,720 developers with, you know, these coding assistant tools. 284 00:15:21,800 --> 00:15:24,240 And some of the investors in open AI, I think the whole thing 285 00:15:24,240 --> 00:15:26,720 is ChatGPT and the fact that they have a customer 286 00:15:26,720 --> 00:15:28,600 relationship and it's one of the most downloaded apps. 287 00:15:28,600 --> 00:15:32,520 So if that ends up being true, Anthropics valuation is insane. 288 00:15:32,520 --> 00:15:38,280 If it's intelligence and B2B and coders, and maybe they end up 289 00:15:38,280 --> 00:15:39,880 both specializing in different things. 290 00:15:39,880 --> 00:15:43,720 And you, you know, maybe it's possible in five years, you 291 00:15:43,720 --> 00:15:45,720 know, they're both going public and open. 292 00:15:45,720 --> 00:15:50,000 AI's consumer company with an API business and Anthropic is 293 00:15:50,680 --> 00:15:53,480 coding genius or, or maybe AGI is here. 294 00:15:53,680 --> 00:15:57,240 On Thursday, Anthropic reiterated the idea that they 295 00:15:57,240 --> 00:16:01,360 expect powerful AI systems will emerge in late 2026 or early 296 00:16:01,360 --> 00:16:05,320 2027. So, you know, we are limited to 297 00:16:05,320 --> 00:16:10,200 thinking of it as being good at coding, but maybe investors are 298 00:16:11,040 --> 00:16:15,520 betting that, you know, in a year or two we will be thinking 299 00:16:15,520 --> 00:16:17,240 about as a fundamentally different company. 300 00:16:17,560 --> 00:16:19,160 I'm super mixed on this one, by the way. 301 00:16:19,160 --> 00:16:22,960 I, I guess I want to take a second on this like AGI update. 302 00:16:23,240 --> 00:16:26,440 I mean, you know, Ezra Klein wrote, I think did a podcast and 303 00:16:26,440 --> 00:16:29,880 it ran as a piece in New York Times basically saying everybody 304 00:16:29,880 --> 00:16:32,720 he talks to thinks AGI is right on the horizon. 305 00:16:32,720 --> 00:16:36,080 And, and I think I've said on this podcast that it could very 306 00:16:36,080 --> 00:16:39,240 well be the case that we look back on all this Trump stuff and 307 00:16:39,240 --> 00:16:42,560 what really mattered right now is actually the rise of AI and 308 00:16:42,560 --> 00:16:46,240 AGI and like Trump is going to oversee this insane trend. 309 00:16:46,240 --> 00:16:47,800 And what's that all mean? That will be the most 310 00:16:47,800 --> 00:16:50,440 significant thing. So hard to forecast out. 311 00:16:50,440 --> 00:16:53,560 You know, I lived through self driving cars and I was like, no 312 00:16:53,560 --> 00:16:55,880 way this bullshit going to take way longer. 313 00:16:55,880 --> 00:16:59,000 And it was really a case where all the companies and all the 314 00:16:59,000 --> 00:17:03,040 engineers sort of had a vested interest in saying, any day now, 315 00:17:03,040 --> 00:17:05,400 you know, and then you get a lot of money and you get a lot of 316 00:17:05,400 --> 00:17:07,839 excitement. And so it's good for them. 317 00:17:07,839 --> 00:17:11,079 And they keep saying it. And reporters, we sort of have 318 00:17:11,079 --> 00:17:13,240 an incentive to say a tube as you make these bold 319 00:17:13,240 --> 00:17:15,319 declarations. And we're like, oh, my God, any 320 00:17:15,319 --> 00:17:17,280 day now. And, you know, people like to 321 00:17:17,280 --> 00:17:19,720 read it. And so on the one hand, you 322 00:17:19,720 --> 00:17:23,640 know, that whole system would point to this being overhyped. 323 00:17:24,240 --> 00:17:28,840 The thing that is been different is that you can see how smart it 324 00:17:28,840 --> 00:17:31,600 is yourself by interacting with the chat bots. 325 00:17:31,920 --> 00:17:34,640 It has a level of consumer familiarity that we haven't had 326 00:17:34,640 --> 00:17:36,480 with a lot of these technology waves before. 327 00:17:36,520 --> 00:17:40,520 You can talk to it as if it is a person and you can feel that 328 00:17:40,560 --> 00:17:43,200 near human equivalent in a way that we've never. 329 00:17:43,280 --> 00:17:46,520 Felt feel the AGI like say like Sam is always saying. 330 00:17:46,760 --> 00:17:50,920 Are you feeling it? No, you know, I, I've been using 331 00:17:50,920 --> 00:17:58,080 4.5, you know, it's good, but until AI, like, I mean, I mean, 332 00:17:58,080 --> 00:17:59,960 I'm not a coder. So I think coders do feel 333 00:17:59,960 --> 00:18:02,480 somewhat differently, though maybe it turns out coding is a 334 00:18:02,480 --> 00:18:06,160 lot more copying, pasting than we ever appreciated. 335 00:18:06,360 --> 00:18:10,680 But until it has like an innovation, develops a drug, 336 00:18:10,680 --> 00:18:14,120 comes up with an idea, you know, writes a book like it's new. 337 00:18:14,520 --> 00:18:19,240 I think the difference between new and a better and better 338 00:18:19,240 --> 00:18:22,600 regurgitator is, you know, really different. 339 00:18:22,600 --> 00:18:25,360 And if the standard for AGI is that it does most things better 340 00:18:25,360 --> 00:18:29,520 than a human being, I don't know, to me there has to be some 341 00:18:29,520 --> 00:18:34,360 novel capacity there anyway. Yeah, I mean, with self driving 342 00:18:34,360 --> 00:18:37,600 cars, you know, was pretty impressive, but you could at 343 00:18:37,600 --> 00:18:40,400 least see humans intervene. So you're sort of like, how much 344 00:18:40,400 --> 00:18:41,760 are the edge cases going to matter? 345 00:18:41,760 --> 00:18:46,720 And my belief then was a lot. And now with AGII, think there's 346 00:18:46,720 --> 00:18:49,720 a similar like will they continue scaling and that 347 00:18:49,720 --> 00:18:53,040 benefit or have we basically learned everything we can from 348 00:18:53,040 --> 00:18:54,440 the Internet? Will they come up with new 349 00:18:54,440 --> 00:18:55,720 techniques? I don't know. 350 00:18:55,720 --> 00:18:57,160 What's your take? Do you have a prediction 351 00:18:57,160 --> 00:19:02,040 20262027 believe it or not? I mean, maybe it's the skeptical 352 00:19:02,040 --> 00:19:07,240 reporter in me, but I think that it depends on what you classify 353 00:19:07,240 --> 00:19:10,880 as AGI. And I think like to your point, 354 00:19:10,880 --> 00:19:14,600 becoming a better regurgitator is different than coming up with 355 00:19:14,600 --> 00:19:17,760 something novel. And when I see something novel 356 00:19:17,760 --> 00:19:20,160 created, maybe that's the threshold I'm waiting for. 357 00:19:20,560 --> 00:19:24,480 Yeah, I mean, I've, I think what AI can do now, what these models 358 00:19:24,480 --> 00:19:27,040 can do is insane. And tons of companies will be 359 00:19:27,040 --> 00:19:29,680 built directing consumers to figure out how to use it. 360 00:19:29,960 --> 00:19:32,800 So you know, regurgitator, you know my word. 361 00:19:32,800 --> 00:19:37,320 But I don't want to super downplay what they're capable 362 00:19:37,320 --> 00:19:39,800 of. You refuse to slander the AGI. 363 00:19:39,800 --> 00:19:43,440 I appreciate that. For my own longevity, you know, 364 00:19:44,320 --> 00:19:49,280 Bokos, Basilisk, etcetera. I think in 2027 we will not have 365 00:19:49,280 --> 00:19:52,240 something where we're like running around, Oh my God, it's 366 00:19:52,280 --> 00:19:55,480 like out on the streets, like it's, it's this new being has 367 00:19:55,480 --> 00:19:58,120 been invented. Like it's possible that yeah, 368 00:19:58,120 --> 00:20:02,840 like it beats a PhD on most tests or whatever. 369 00:20:03,320 --> 00:20:06,040 The fact is we're looking for like the PhD that comes up with 370 00:20:06,040 --> 00:20:08,640 the novel research. And can you really claim that 371 00:20:08,640 --> 00:20:13,200 you're like smarter than a PhD if you can't like deliver, you 372 00:20:13,200 --> 00:20:15,360 know, some percentage of them have novel papers. 373 00:20:15,360 --> 00:20:18,360 And if it's not coming up with something novel just because it 374 00:20:18,360 --> 00:20:21,320 tests better on existing information. 375 00:20:21,320 --> 00:20:23,400 Yep. So I guess on this sort of 376 00:20:24,080 --> 00:20:27,560 ability to do have novel intelligence, I'm skeptical. 377 00:20:27,560 --> 00:20:33,120 By 2027, will it take better tests than a typical PhD student 378 00:20:33,360 --> 00:20:35,760 in 2027? Yeah, sure. 379 00:20:35,880 --> 00:20:38,680 Honorable mention to our deal list, we have to say something 380 00:20:38,680 --> 00:20:42,640 about Ramps Killer secondary sale that raised its valuation 381 00:20:42,640 --> 00:20:46,160 to 13 billion. They sold 150 million in 382 00:20:46,160 --> 00:20:50,920 secondaries to a bunch of buyers like Stripes, GIC Ave., Growth, 383 00:20:50,920 --> 00:20:54,680 Thrive Capital, Coastal Ventures, General Catalyst, Lux 384 00:20:54,680 --> 00:20:57,320 137 Ventures, and Definition Capital. 385 00:20:57,600 --> 00:21:01,280 If you see a high valuation deal, you'll T thrive Capital. 386 00:21:01,840 --> 00:21:05,160 I mean, they're they're doubling down on the winners And it's as 387 00:21:05,160 --> 00:21:07,720 we've reported, it seems to be a good strategy so far. 388 00:21:07,720 --> 00:21:10,840 I've heard from investors who are envious of their investments 389 00:21:10,840 --> 00:21:13,440 and they're also they're getting in good companies early. 390 00:21:13,440 --> 00:21:16,840 But yeah, they're they're a lot of these high flying deals. 391 00:21:16,880 --> 00:21:20,520 I think Logan Barlow was joking that, you know, he'd invested in 392 00:21:21,000 --> 00:21:25,400 ramp at, I don't know, 6 or 6.5 billion during the pandemic. 393 00:21:25,400 --> 00:21:28,040 And it was like one of those wild pandemic deals and at least 394 00:21:28,040 --> 00:21:32,720 here that's getting validated with a $13 billion valuation. 395 00:21:32,880 --> 00:21:37,680 Excited for the ramp deal rippling inevitable like 396 00:21:38,160 --> 00:21:40,440 collision, right? They've got a these companies 397 00:21:40,440 --> 00:21:44,040 are so valuable. They're going to continue to 398 00:21:44,080 --> 00:21:47,280 sort of go after one each other. That's our show. 399 00:21:47,640 --> 00:21:49,000 Yep. Thanks for listening, see you 400 00:21:49,000 --> 00:21:49,400 next week.