Are AI stock valuations hitting all time highs and is this never
ending cycle of announcements and gains unsustainable?
This week we saw another round of significant partnerships
between Open AI and a major chip maker, Open AI making a deal
with AMD on data centers. In today's episode, I'm joined
by Madeleine Renberger to discuss how this dynamic is
evolving and just how much Open AI is propping up public tech
stocks with the promise of future demand.
Later in the episode, Madeleine shares are dispatched from
Anthropic. Clots pop up in New York.
Hot AI labs are taking a note from fashion hype beasts, but is
it really going to translate into new business?
Finally, we're going to talk about a story I wrote about how
Hollywood's failure to adopt AI video generation products is a
sign that companies like Open AI will be shifting away from
enterprise solutions. This is the Newcomer podcast.
This podcast is supported. By Google.
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All right, so last week, Madeline, we had Alex Heath on
and there was this thing kind of stuck in my head from that
conversation, which was that at a dinner that he went to that I
was not invited to he. Tom was not invited to the
dinner. I was not invited to the Sam
Altman off the record, no on the record dinner because.
You got Tom not invited. Yes, if I brought it up multiple
times on the show now you know, Sam, I guess was bragging after
a question or or hinting at teasing your question.
I think Alex had asked him, which was that, like, how are
you going to pay for all of these, all of these deals that
you guys keep announcing? Like, where's the money going to
come from? And it sounded like Sam kind of
had like a panicked but excited glow in his eyes as he
responded. Like, I think I figured out a
new instrument, a new way to fund all of these deals.
And we sort of laughed at the time.
We were like, oh, maybe it'll just there's not that many ways
to fund these things. There's raising debt, there's
selling equity, and then there's vendor financing and I guess
rate. Yeah, it's.
Yeah, selling equity. It appears that he may have
actually figured out a version of kind of sounds like vendor
financing, but we may be witnessing what the instrument
is. And that's this AMD deal that
came out on Monday. And basically what this deal was
about is that AMD is agreeing to give 6 gigawatts worth of chips
to to open AI worth 10s of billions of dollars.
And in response, in return, Open AI is like given warrants.
So they could purchase up to 10% of the equity of AMD if certain
performance targets have met. That to just to for clarify that
adds up. It's a, it's an, a stock option.
Basically, they get the option to buy up to 160 million shares
of AMD. Right, right, which ends up
equaling out to 10% of the company and that's based on
performance targets that are met and whatever.
But after this deal was announced, AMD stock shoots up,
as has been the case for almost all of these open AI deals in
the last, you know, couple of weeks, Sam and ACEO of a chip
company make an announcement, the stock shoots up and the the
deal kind of pays for itself in terms of increase equity value.
Man, I don't know what to make about these things anymore.
It's really gotten to a point now where, like we talked about
last week in the story that I did, that like Sam has
infiltrated and like integrated himself into like the core
structure of all of these publicly traded companies
because of all the deals that they keep announcing.
How much higher can it get? How much longer can this
particular strategy keep going on?
That is just I think that's the multi trillion dollar question,
Tom, right? Like I these deals as they
function now, they seemingly juice the stock market and
everyone's happy and the the announcement from open AI
partnering with your company is enough to then fund said
partnership. So it's great and everyone's
happy, but it just seems to be adding a lot and lot more risk.
And that doesn't mean that there's going to be an
inevitable crash if some of this doesn't workout, but it does
just seem like all of the public tech company stocks that have
the ability to partner with open AI that are doing so that's that
is basically keeping us afloat right now.
Those partnerships are what are landing.
It's basically, I won't even say this is a new point.
This is just like we're hitting our point from last week again
on the head with this new AMD deal announcement.
It's like just when we thought it couldn't get any deeper, we
get another deal and Sam sparks this other point.
And obviously Nvidia's wrapped up in a lot of these deals too,
especially with Oracle, you know, their Oracle spends, you
know, billions, 10s of billions on NVIDIA chips to run it's
Centers for all this compute. So it's not solely open AI.
NVIDIA is very tied into this as well.
But I think it's it's, it's, it's really these two.
Yeah, well, it's interesting. Well, and, and Broadcom and the
chips that they're going to be building on their own that
supposedly will fit somehow into their, you know, infrastructure
play as well. But you know, the, the the
NVIDIA deal was really this example of Sam and and Jensen
getting super close and them basically intertwining their
fates even more so. And we refer to it as some sort
of like, well, I didn't use the term, but, you know, it's kind
of like a mutual destruction pack across the tech industry,
but certainly between those two. But then the AMD deal was
interesting because, you know, it is a competitor.
They are going to be developing chips that they would be using
in lieu of Nvidia's GPU's. And NVIDIA stock fell a bit when
the news was announced. And so, you know, as close as
these guys are and as important as, you know, each company is to
the other is future, you are seeing at least some
diversification on on and open a eyes part that makes sense.
You know, from one perspective, like, like it'd be kind of silly
to place all your bets on just your one this one supplier of
this critical component. But you know, like, I don't know
if you read the articles or saw the interview, didn't have a
chance to like Jensen was on CNBC and he was like, yeah, that
was interesting. I didn't I didn't know they were
going to do that. Well, it's a very creative
financing deal that they put together.
Like that John Mulaney bit that's like, I didn't know, knew
how to do that. You know, like the horse in the
hospital. Look, we're all like making this
stuff up in real time, how to finance things at this scale.
And you know, it's funny that Jensen, I, I didn't see the
video, so I couldn't detect, you know, if there was any sort of
derision in his, you know, demeanor on the AMD open AI
deal. But like, let's not throw stones
here from the glass house, Jensen.
Like you have constructed an extremely circular deal with
open AI in which you are giving them, you know, effectively or
there's a letter of intent to give them $100 billion in
exchange for them using $100 billion on your chips.
I mean, the circularity of every single deal that has been
announced here is on a different level.
Like this is a whole economy that is being propped up by
circular deals. I mean, like there's some
interesting charts that have come out.
Maybe we can flash it on the screen for those watching the
YouTube video. But you know, the the
relationship between Microsoft this this goes back to the
beginnings of open AI, right? Like Microsoft gives open AI
billions of dollars that that ends up being used as an Azure
credits, which which props up Microsoft stock for a while.
There's obviously NVIDIA stuff, there's the AMD stuff.
The Oracle thing isn't quite circular.
That's a pretty standard client, you know, provider relationship.
Right. It's 300, it's a, it's a massive
deal, but it's for cloud services which they provide, so
you know. As Alex mentioned on the show
last week, like they are providing, you know, basically
Sam put the ball into Larry Ellison and Oracle's court and
said, like you guys figure out how to raise the money that
it'll take to to build the things that you're asking for.
So I mean, I don't know, I guess we're back at the question that
we were at last week, which we don't have any more of an answer
to, which is like, how much longer can this go on?
How many more of these deals can open AI keep striking and the
markets, you know, keep responding in kind and saying
like, great, let's keep pushing up the value of these stocks
that you make the deals with. I mean, is, is that literally
all it is? Like, is it just like deals for
the sake of announcements that can prop up a stock and then
like kind of keep the machine like running?
I mean, we'll have to wait and see, honestly.
Yeah, I don't. I, I wish I had more info for
you. I'll dig around for a scoop if I
can. But yeah, it's it's kind of like
we're all in this waiting game together.
Yeah. And like, I don't know, credit
to Sam throughout throughout all this stuff like as as absurd as
as it is as a reporter and you know, like anyone with I think a
grounding and common sense that you can kind of continue to fund
stuff based essentially on like future returns.
That seems to be the only way to operate at the scale that he
wants to operate, right? Like this is a this is AAI don't
know legitimate, but it's like a way that you can you can, you
know, get to the hundreds of billions of dollars that he's
talking about to to build. I guess it's just AGI.
That's just basically the play. Well.
That's the that's the pitch, right?
Like we'll hit AGI and then all of this will be solved.
And it kind of feels, you know, like we're we're floating and
waiting for this milestone of AGI to, you know, fix, you know,
all of this from unraveling or changing, you know, that's and
that's, and also once we hit AGI, everything will be great
and it won't really matter as much.
Right, right. We're talking about, you know,
we have the skeleton key to unlock trillions of dollars in
transformations across the economy.
So this is all a bargain and and you're getting in on the ground
floor by, you know, investing at a stock that is suddenly got a
wildly inflated PE ratio anyway. I mean, you want to move on to
kind of the the other side of it.
So we have like hype in terms of stock market appreciation and
deals based on future returns. And then we have the hype based
on like brand and the, I don't know, emotional attachment that
certain people have to companies and, and, and large language
models. Like I'll be honest, I've been
very buried in a bunch of other stuff.
Like what is going on with the Claude pop up?
First of all, for a little context, all of the major AI
labs and coding assistant companies have discovered
basically brand activations that that was a marketing tactic that
was foreign to them until last week.
And then all of them kind of descended and realized that the
New York influencer ecosystem is actually a great place to get
your products up and running in the tech sphere outside of San
Francisco. So last week, Anthropic hosted a
limited pop up for Claude at a coffee shop owned by the former
Vanity Fair editor. It's kind of a sceney place,
shop place in Soho. And people were waiting in line
around the block to pick up Anthropic branded hats and
notebooks and get their be seen and be seen at their their brand
activated pop up. It was definitely a huge
success. But I actually, if you'll, if
you'll excuse me, I'll go grab the hat.
I'll have to run this for a SEC. So you actually went off and did
this? I did.
I did manage to wait in the line and secure a hat.
While you're doing that, I can regale the audience with another
tale from the Snapchat reporting past that maybe only I will care
about. But this is all very reminiscent
to me of Snapchat Spectacles that came out, I think in like
2017 or so. This was Evan Spiegel's big play
to create camera glasses. And they were very cool.
And it was from a vending machine.
And they, I think, had one and they had one.
And there it is. There's the hat.
Oh yes, if you're watching on YouTube, you can see the hat
here. It is a it is a thinking cap,
which I thought was actually pretty clever and it's part of
anthropic. Sorry to cut you off Tom, but.
Yeah, no, people got the point. Basically, this has been tried
in the past by tech companies in New York playing into like the
desperate, hypey nature of people that hang around the New
York scene and love St. wear. Tell me about getting this hat,
Madeline. People, I have to to say people
are very excited to get the hat. I think it's quite clever
thinking cap. It's part of their broader
thinking campaign because Anthropic is sort of positioning
itself right now as the Apple think different almost, you
know, fun, sleek, branded, you know, they have all the clawed
merch with it's nice design. The logos on the different
pieces were clearly done by some thoughtful designer then rather
than, you know, just standard corporate logo on something.
And it has more of an illustrated touch, I have to
say. The hats to plug our own
conferences, they look quite similar to our Deus Ex Medicina
hats. So they got the memo that
lowercase font Simple is really in right now.
Lowercase fonts, yeah. We were ahead of the curve on
that one. So let the record show.
But I will say they are positioning themselves in this
way that I think in some ways, given, you know, opening eyes
deeper partnership with Microsoft, it almost seems like
there's this kind of foil of like the Mac versus PC campaign
that's like we're the fun creative model that's actually
making you think and avoid slop and not building a social media
platform yet. And I think those associations
are getting placed in with Anthropic's brand and the, the
actual pop up structure. I know Cursor is hosting one
later in October in New York as well for the Cursor Cafe.
So you can pop up and get merchant coffee as well and code
live with all your friends using Cursor.
But it don't think it has quite the same appeal as, you know,
the, the smart brand in addition to the free hat, you know, with,
with the thinking and kind of how they're positioning
themselves in the marketplace. So we'll see how it lands in
terms of actually acquiring customers, but I think it was
smart. What describe to me the type of
person that was waiting in line to get a hat?
Like what was their scene? Who is their customer?
How would you describe like a tech hype beast?
I would say that's who is in line like.
So that's a real thing now. I mean, these people have like
taken over San Francisco. Yes.
And now we have them in New York, too.
There were a couple people I know who at least from Twitter,
claimed to have flown from San Francisco to New York to acquire
the hats. So that is hype.
It's a bicoastal hype train here.
And I would say there were also a lot of people who were, I
would say maybe more in definitely developers, younger
crowds who are familiar with all these tools, but some
influencers from just the general creative sphere of New
York coming in to check out what is the lovely brand activation
and get the hat. So are they reaching an audience
that they necessarily want? Maybe there's people who maybe
wouldn't have used Anthropic otherwise that are showing up at
this. Yeah, I I don't know what to
make of this personality type. This is in one sense something
that's been around for a while. Like it's the hype beast.
It is the person like camping out outside of the store getting
the oh shit. Like what's the shoe drop that
they always do? I think that.
Is the shoe drop. Not Jordans, maybe not the and
ones. Well Supreme would do all of the
drops like. Supreme would do the drops.
Yeah. I mean, look, there's no
question that is like a monetizable personality.
I don't know if that is that the clawed audience, like are those
people coders? Like the thing that gets me
about this strategy is like you mentioned the Mac versus PC
analogy, like Macs was like the creative tool.
It was the personal tool. It was like the, you know, it's
you. Everyone should have a Mac in
their home because it shows how independent of a thinker that
they are. And also they're like, you know,
standing apart from like, you know, the John Hodgman I'm APC
crowd. But open AI is the consumer
product. Open AI is, you know, Apache.
BT is a consumer product like Anthropic is the API company.
They're the API enterprise company with encoding assistant.
I know. So in some ways it's a weird
consumer play, focusing on how good you are at enterprise and
thinking and using your brain business.
But it's it's with consumer language.
So maybe in some ways it could be to widen a broader audience
and eventually go for this. It certainly earned a lot of
goodwill. I just, I do agree with you.
I'm not sure if this is going to translate into like real money
for Anthropic other than just feeding out everyone else out as
being the C&E AI lab. Yeah, again, it's just like if
you know, the people like Dario, the CEO, Not to say that Sam
Altman is cool by any definition of the word, but Dario was less
cool than Sam. Dario was like the geeky, you
know, effective altruist dude who, you know, has like stuffed
animals in the office and sort of runs the company in a very
sort of warm fuzzy. We need to, well, there's also
the kind of we need to make sure we don't enable the destruction
of the world through AI mentality.
But I just don't think of Dario as like a hype beast or a scene
kid. I think they're trying to make
him a hype beast because at this event they were giving away
little booklets of machines of love and grace with this name on
them and his writing about the future and his vision.
So they're they're making it a product.
They're trying. They're trying to make fetch
happen. Yeah.
I mean, this is like clearly some marketing persons like, you
know, boardroom or, you know, whiteboard pitch that they were
like, I mean, why not just give it a shot?
Let's just see what happens. That's so I mean, like, is this
going to go on down the line here?
Like do do you think like other companies need to respond in
kind? Like are there other model mate?
Like does does Gemini need to like carve out their thing?
Like are they like for, I don't know, like sports fans?
Like are they like, is Gemini the like, you know, water sports
or something? Like I just don't like.
Does there need to be branding for all these other competitive
models? What is XA is too?
What is grok? I guess that's just like, no,
they're. Just anti woke Yeah, theirs is
just like the the conservative AII guess if that yeah thing.
Yeah, they have their own. The reactionary AI, yeah, they
have their own meet ups separately, but yeah, I don't
know it is, but we'll see how this plays.
I I found it very fun to attend and very smart.
And as you know, working for a newcomer, a big fan of live
events. I love a live activation.
I'm not sure how it's going to play ultimately other than just
getting a bigger brand awareness and being known as something fun
and cool compared to actually generating a ton of revenue.
You were mentioning like the New York influencer scene, which I
observe only through TikTok. A lot of those people are paid
to appear. Did you get the sense that they
had like kind of shelled out a bit to get certain people to
show up? The day I went, no, I think
there was just genuine interest for people coming.
There were people who were paid kind of almost like, you know,
like people on the street, like brand people that were handing
out these, these clawed gift giveaways.
But mostly it was that rather than, you know, maybe some shiny
influencers showing up at this event.
So I do think they did have some organic growth, but they didn't.
I won't say that there were like people with millions of
followers from TikTok clamoring to get into the cloud coffee
shop. It was much more people in the
tech ecosystem. If they had flown out like
Aiella or one of these, you know, net cap girl, Twitter
people, then maybe we could talk.
But I think the influencer models are a little different.
Or like the New York like food influencer scene, the guys that
are all just showing up at like every new like soup dumpling
place in Saint Mark's or the ones here to come with me and
you can try the best pancakes. The Golden Diner like that.
That wasn't that wasn't the model, right?
They weren't getting those. People, they didn't, they didn't
have the VIP list. Like insulting you if you didn't
come down to the clawed coffee shop.
Right. Yeah.
There weren't like, people. What's the the influencer
scandal that always happens where, like, all these
influencers start, like, calling out these various restaurants
after making, like, completely unrealistic demands of them.
It's like, I want to bring three of my friends here and I want
like, a fully comped dinner and the restaurant's like, no.
And then the influencer, like, done, like puts them on blast.
Yeah, yeah, they didn't do that for Claude.
They did not do that for Quad Quad Cafe.
You're safe another day and we'll see if they do more
activations. It seems like it was definitely
a big hit for New York people. I also think for, you know, New
York second string here, we like when tech events come to us.
So I think there was a lot of demand of the New York tech
people just excited to go for something like this.
We don't, we don't have like a, you know, a tech activation on
every block these days. Yeah, well, we're, you know,
we're a week away from Dreamforce in San Francisco,
which is the ultimate tech activation wannabe try hard
crew. It's basically like Santa Con
for people who like don't really understand what their job is.
That's the Dreamforced model you.
Should you should stock outside and get a hat or some merch or
something? Oh, there's all kinds of merch.
They're very, they're very like National Park oriented.
It's very like, it's like kind of Ranger Rick type thing with
Dreamforce. Yeah.
It'll actually be interesting to see.
Yeah, it is fun. Sure.
It'll be interesting to see if like the models, you know, if
any of the LLMS try to like set up similar activation because
like they need, you know, they want play within.
I mean, it's a ton of CMOS and and CIOs showing up at
Dreamforce. It would be the perfect time for
them to to hawk this thing. If you see a a range of AI lab
coffee shops with sweet merch popping up around you, let me
know. I will.
I'll get the hat. You'll get the hat.
Yeah. What do you think about the
cursor one too? Because they are, there are like
obviously a, a, a handful of Gen.
AI coding tools out there, but it does seem like cursor has the
most brand recognition, like it's the one that in the space
people like maybe have the most association with or like
emotional attachment to. I'd say so, yes.
From enterprise customers, it's, I would say it's, it's kind of a
battle between cloud code and cursor in terms of which ones
people favor the most right now. So I think they have an audience
of, you know, rabid coding fans that will be excited to play
influencer in New York in a couple weeks for sure.
But I to your point, I don't know if they're the one that
needs this brand activation. Like where's where's Windsurf?
You know, like doing this pop up.
Where are they going next? Well, Tom, I know you've been
digging a lot into Hollywood and AI, and obviously we've been
playing around with the Sora 2 app quite a bit.
Is it dead? By the way, before we go into
this next topic, like, you know, really slop maven Katie
Natopolis declared on X that Sora is over.
What a title to retain slop maven that's I.
Hope it makes it around. I hope she hears this.
She loves this stuff. I mean, she's really one of the
best people that like on a shit posting out there.
I I have nothing but respect for for Katie Natopolis.
And so when she declares something and has weight, I, I
care when she has sort of a declaration on the state of a
thing that was popular. And she says Sora 2 is over,
that she can't get people to use her sign up codes anymore.
And you know that the all the big influencers or whatever that
existed have fled the platform. And it's, it's moment, brief as
it was, is, is over. But what do you what do you
think? She's right in, at least my
understanding. Anecdotally, I can't get any of
my friends to use my codes that you gave me with your invite, so
I've still got 2 left. If anyone wants 1.
I think there's some. We'll see.
I think there's some reach out Novel.
Yeah, if you know Madeline at newcomer.co if you want a code.
Prove me wrong. Do you want my code?
Sora's still going? No, I think it's kind of
suffering what always like a lot of flashy in a flash, in a pan
consumer features do, right? Like once the novelty wears off,
like how do you retain users to actually stay?
And I thought that they had an edge, as we talked about with
Alex last week, around, you know, having your friends
participate so that it's a bit more social.
But if people aren't really chatting or networking beyond
just posting the videos and the feed, do people want to stick
around? But it did, you know, drive a
ton of sign ups. So that was an effective play if
you wanted to get a lot of people to sign up.
Man, when Alex was on and and you know, Alex is, is great and,
and we hope to have him on a ton more, but I disagreed with him
at the time that this was, you know, a a long term play for
open AI on Sora specifically. Like, I think it to me, it had
all the makings of the Studio Ghibli moment or any of the face
filters that had popped up on Snapchat or you know, I'm not
huge on Tiktok. I mean, my accounts really is
not huge on Tiktok, but as a user, I don't spend a ton of
time on there. But they have little memes,
obviously, that that, you know, get big from time to time,
little games or filters or whatever on TikTok that sort of
like run the hype cycle and then and then disappear.
To me, this Sora AI video thing had all the makings of that.
And I think that is what it turned out to be like.
It was kind of like a, you know, a, a TikTok feature basically
that got its own app to its own credit, but effectively like,
you know, ran through in a very short period of time the
excitement and then sort of another toy that you put back on
the shelf. Yeah, I guess it could say if,
if the feed itself was the launch and that was the big
product, maybe it hasn't landed yet or is suffering.
But if the tool itself was to get people to sign up and test
their video features and get a lot more training data, then
afterwards, after getting all of that, then it was a resounding
success. So it's it's kind of like it's
hard to launch a feature as a standalone company, but they can
punch it within Open AI and still work and get a ton of
information out of that. Right, right.
It's yeah, it's always movable goal posts with it.
So, and it would be stupid to call Sora a failure by any
extent, but it does seem like the people who had dubbed this
like the like, Oh my God, they just made tick tock wildly
overshot, you know, the attention that this was gonna
get from people, I think. We all we all ran back to
TikTok. Yeah, well, a lot of these
videos made their way to Tik. T.O.K, yeah, they're also all
getting you. You can save them.
So they're getting posted on other platforms.
I've seen Sora videos everywhere on TikTok and readers, so
obviously that's sure promotion for open AI.
But people aren't sticking around on the Sora feed.
They're using Sora the app to make the videos and then sharing
them elsewhere. Right.
Which like I guess back to Open AI is why there's such an
interesting company because they truly are doing everything.
I mean, the number of products and strategies that they are
juggling at the same time is incredible.
And like it's like at the same time that they have basically
attempted maybe to build a TikTok and got to number one in
the App Store and got like a huge amount of viral buzz.
They're also becoming like the next hyper scaler and building,
you know, and they're also going to be like the next big coding
tool and they're also the next Google with their search tools.
And you know, it's, it's like not even really to Snapchat's
detriment that like sort of may have like peaked and fallen off.
It's just like another example of like what their ambitions can
be when they're like really dialed in.
Watch out Elon, Open AI is coming to be the everything app.
That's the everything app, I guess.
Well, and you saw Elon's response to this, right?
Like he's he's been pushing like the next Gen.
Grok AI image tool constantly. He's trying to catch up.
I mean they're they're out Elonning Elon right now.
Yeah, I happen to be in LA at around the time that Sora was
like peaking. And I've been doing this
reporting for this other story that I'm working on about
Hollywood and AI. And I was at this dinner with a
bunch of people from, you know, kind of traditional Hollywood
world, like the studios and also tech executives.
And it was kind of fun to ask around about Sora in this moment
that, you know, they had so aggressively wait.
Yeah, What did they say when you were there?
Well, I guess like, first of all, I had earlier that day
talked to Varun Shetty, who is the head of Media Partnerships
at Open AI. And he laid out to me, which we
later published in the newsletter, one of their, their,
their thinking around IP and why they decided to allow SORA
initially to kind of let people have a lot of looseness with
their ability to create likenesses of, you know, very
famous characters. Like I made something with Peter
Griffin. I did something with Kermit the
Frog. It wasn't that hard in the first
couple days to basically get these guys to do whatever.
And Varun's response to me was like 1, like, we want to give
people the freedom to create what they want.
And, you know, the more guard rails we put in, you know, the,
the more that's kind of hemmed in.
And then the other side was also everyone else is doing it
basically like you didn't want to be at a competitive
disadvantage. And I think they got a lot of
heat for saying that. And later that day, Sam put out
a blog post saying, like, oh, we're switching our policy and
we've moved away from, you know, opt out to opt in.
And basically that whole period where, you know, it was the Wild
West of IP violation became not that and things, you know,
really got hemmed in. And so that was interesting on
its own. And maybe that killed a little
bit of the sore engagement too, because people liked the novelty
of making Rick and Morty trail Cam footage.
Yes, 100%. I I think that probably would
have worn off too, but there's no question that like it
definitely slowed the momentum of the whole thing.
But at this dinner, you know, I brought up, you know, Varun's
comments and the response was like, you would only say
something like that this being Varun or open AI in general, if
you didn't really care about Hollywood, if you didn't really
view them as a potential client for your technology.
And you know, it's been interesting to see the evolution
with open AI and the movie industry or the entertainment
industry, even just in the last year, because a year ago when
they were doing Sora V1 Sora, they were taking lots of
meetings with all the studios and basically trying to show
them that they didn't bite. And you know, this is a very
useful tool. You should work in your
workflow. And we're here to be a friend.
And almost. Like the runway model, but but
they're a version, right? Yeah, exactly.
I mean, runway's interesting because they actually have
signed a major partnership with Lionsgate.
And so they have they have kind of embedded themselves as
closely, well, relatively closely with with the
entertainment industry. Open the eye is still this kind
of foreign body. So, so the perspective was like
from SORA V1 to this one was a pretty stark change in their
views on the industry. And it's one thing to like go to
the meetings with people as they were at like a year ago and say,
oh, we have this tool, you should use it.
It can make your lives all better.
And, you know, we're here to help, which whereas this one was
like a fait accompli, we're barreling in.
We'll give you the option to opt out.
But otherwise, don't be surprised if you see, you know,
Pikachu on the grill. And it's, you know, it's that
that's just a choice. Like Hollywood is sensitive.
You know, people really take this stuff very seriously that,
you know, the town is run by lawyers and when you go about it
in the way that Open AI did, they certainly sacrificed a
relationship with the industry in exchange for virality.
And I think that was the biggest take away from these people.
Maybe Open AI was just taking the calculus that they don't
need the Hollywood industry to do what they're doing.
They exist as the Everything app without it.
Right. Well, there's basically two ways
into it, right? It's either like they've decided
that there's way more market share and money and attention to
be given to short form and basically, you know, living in
the AI slop TikTok. TikTok.
Yeah, TikTok apocalypse or slop apocalypse?
Slop apocalypse. Yeah, there's more, you know,
more value to being there than in trying to like ingratiate
yourself with Hollywood. Like, that's one choice.
The other choice is maybe they're like, well, we'll just
get so big that we'll be inevitable that we'll have such
a good tool that it doesn't matter if you hate our posture
because we're just, you know, unavoidable.
And yeah, I don't know what do you think?
Like like where where does where does opening eye go in terms of
their. I mean, you're, you're, you're a
movie fan like you, you know, you care a lot about, you know,
the, the, the future of. Madeline Renberger, noted movie
enthusiast on this podcast. Yeah.
I mean, I think if they're choosing to kind of not go the
way of Hollywood as they are, I think these other apps that have
market share that are sort of tools like a runway or video
editors or animation tools that appeal more specifically to the
industrial creative market rather than the social media
creator market have enough of a market share to fill that gap.
And they, I kind of think they don't necessarily need it.
They can play in social media world, They don't need to play
in Hollywood world. And it's not.
I mean, I love the movies, but they're not as big of a market
as what their ambitions are. You know, it's not the industry
it once was. So why do they?
Totally. They don't need it.
They don't right. It's that's exactly right.
They don't need it. It's for there is obviously a
market there, but it's, you know, largely for kind of
artistic, ethical, emotional reasons at this point to be
supporting. Recording rather like to be
known as the friend of the artists and get better, you know
cred with the normies about that.
It doesn't have any like business value.
Right. And it's interesting as an
evolution just within the tech world because 5 to 10 years ago,
it was extremely important for a lot of up and coming startups to
announce that they had gotten a famous actor on their cap table.
You know, it's like we all remember, you know, oh, Robert
Downey Junior has backed Maker Studios or Ashton Kutcher.
I mean, he's probably a more legit investor.
Yeah, he's a more, you know, legitimized investor as much as
any VC is a legit investor. But yeah, but but yeah, like an
actor was, it was just kind of part of the thing.
Like in your A round or B round, you gave some allocation to to
an actor and you don't see that anymore.
And I don't know if that is because the nature of being a
celebrity is just different and, and Hollywood doesn't have the
same control over culture as it did, you know, 5-10 years ago
or, I don't know, it just never worked that much in the 1st
place, so people just moved on from it.
But this feels like a part of that same kind of trajectory of
like Silicon Valley just not needing Hollywood one way or the
other. Anyway, I don't know.
I had a good time in Los Angeles.
More to come on that front, by the way, so.
Stay tuned. Subscribe to Newcomer to hear
more of Tom's thoughts on Los Angeles.
Yes, and and Hollywood. Well, anyway to to hype beast
Madeline Renbarger signing off with their thinking cap.
Yes, got to flex the thinking cap once again like and
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