Speaker 1As crazy as this may sound, I think folks are almost underestimating Anthropic. Never has such a successful startup maimed itself so poorly that I can think of as open AI. To pay for all this infra, to pay for all these GPUs and infra and inference, we got to get rid of the people. I think that the Chinese open weight models are pretty much over in the U.S. How much money is there for the instincts of the world? It feels infinite now. I think we should put 20% of the fund into open AI at the $1.25 trillion round.
Speaker 2This is 20VC with me, Harry Stebbings. This is my favorite show of the week, Jason Lemkin, Rory O'Driscoll, the news that matters. And let's be clear, there is one story that matters more than any other this week. Anthropic, they finally dropped their S1. This show, we break down what you need to know, the questions that really come from it, and what we can expect when it comes to day one. And will there be the mega pop of all pops? Then we have more news in the form of meta going to equity markets. Needing $95 billion to fund more insane compute buying. We have Microsoft offering to buy out about 60,000 staff members. And then we have some serious private rounds. We have everything from instincts rumored $30 billion round to flapping airplanes raising a billion dollars. This and so much more in the show today with Jason and Rory. But before we dive into the show today, every great software company eventually runs into money. Uber had to move it. Shopify had to hold it. Airbnb had to settle it. Money movement stopped being a fintech problem. It became a software problem. And increasingly, God, it's an AI problem too. Zero hash is the infrastructure that makes global instant money movement seamless. One API integration for stable coins, digital assets, and modern payment rails. So builders can stay builders. Zero hash powers some of the world's largest enterprises and financial institutions, including Kalshi, Stripe. Morgan Stanley, Gusto, and Interactive Brokers. If you're thinking about stable coins, digital assets, and the future of money, it's time to talk to the team at Zero Hash. Visit zerohash.com slash 20VC to learn more. While Zero Hash powers your crypto infrastructure, Deal helps you build a global team. We get it. Global IT can be a headache. New hire in Tokyo, but the laptop, well, it's stuck in London. Someone left the company last week. Wait, is that access already revoked? Deal IT handles hardware, software, and access to across 130 countries from one system. You have the right to be impressed. Brands like Eleven Labs are already managing their global IT at scale with Deal. It's one system, one source of truth, with zero vendor gaps or manual workarounds. So build your global team with Deal. Visit D-E-E-L dot com slash 20VC and start expanding your business today. While Deal builds the team, Framer builds the site. If you want AI that builds your real website, not just a throwaway first draft, that's Framer. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever, while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. Agents and humans work in tandem. Agents bring speed and scale. You bring taste, judgment, and control. The work lands on the canvas and stays editable, build custom code components, manage CMS content, optimize SEO, and audit for issues all in one place. Enterprise-grade hosting, security, and 99.99% uptime SLAs, trusted by leading brands like Perplexity and Miro. Learn how you can get more out of your site from a Framer specialist, or get started building for free today at Framer dot com slash 20VC for 30% off a Framer Pro annual plan. That's Framer dot com slash 20VC. Rules and restrictions may apply. You have now arrived at your destination. Boys, we are back. It is my favorite time of the week. And we have some big news to start with. Anthropic Files, it's S1. It's the moment that we've been waiting for. $16.3 billion of first half revenue. I just want to hand over to you, Rory, because whatever metric I give, you're going to say it was the wrong one to cite. No, I'm not. So which ones were you drawn to, and what is the takeaways for us from this? It was a great S1.
Speaker 3Frankly, all the haters and the worriers, at least for now, have to go pound sand. I mean, the burden of proof is most definitely on the side of the naysayers. In other words, the S1 was great in almost every dimension. It'll be widely well received. I mean, there's some pending open questions still. They didn't give the Q3 revenue number. The overall revenue numbers are known, but they were amazing. It was great, better than expected on margins, op income, even op income after stock based comp. It was great on customer concentration. It was great on compute efficiency. It was stunningly great on cash and cash balance sheet. You know, I mean, it's just on every dimension, it looked really good. I mean, you have to struggle to find questions. And there are questions. We can come to those in a second, but it was a really top-tier performance.
Speaker 1As crazy as this may sound, I think folks are almost underestimating Anthropic because five years to IPO versus 24 for SpaceX. It's not just something we've never seen before. We'll see hints of it. We'll see hints of it with OpenAI's IPO, right? It might be worse. It might be better, probably slightly worse, right? Based on what we know, right? Less capital efficient, slightly slower. But JFC to get here in five years from a Spite startup. It's just beyond unprecedented. Time value to liquidity still matters. I mean, it's markups are fun, man, but getting out of the greatest IPO in our lifetimes and less than six years to distributions. I mean, I know Rory will roast me for it, but you got to think, why would I do anything else? Why would I wait? These seed deals are like 18 years to full distributions, right? I could get to six years in full liquidity Anthropic. And why would I waste my time with anything that's 10 to 12 years to IPO? But, you know, it's just one deal in the fund, another two years to distribute, you know, versus five years.
Speaker 3No, I won't roast you, Jason. I mean, I think that, you know, I saw a tweet that basically said the same thing as every founder and every investor is looking. Why am I bothering with anything else? These are such stunning numbers in terms of size, scale and speed. And you're right. It's going to dominate the results for, you know, for a long time to come. And everything else just seems a lot more work for a lot less return compared to it. And, you know, all credit to the founding team, all credit to the investors who got in early. It's just a great way to make money. Things going up and to the right faster than anything else in human history for five years to add up to a trillion dollars. That's as good as it gets in venture.
Speaker 1Yeah, it was funny watching Byron Dieter from Bessemer on the TV shows saying this is the greatest investment in the history of Bessemer. I think Bessemer was founded in the 19th century or something. I don't know what the fund was. Yeah. And their greatest investment and their largest checks. Right. So to see that all happen now after a hundred years, that's the end of that. That's the whole story, right? I mean, greatest investment, biggest check, fastest time to liquidity. Why are we doing anything else?
Speaker 2Rory, you said about questions there. There are always cynics in the audience. There are always people throwing peanuts. If you were to present the alternate view of, oh, here was a striking number or two, is there any that?
Speaker 3The interesting one, 80% of the revenue comes from models that are less than six months old. And then separately, you'll note they didn't give you a gross margin, an actual gross margin calculation. They just didn't lay it out that way because you can do that in accounting. You can just put all the compute costs into one place. And then they kind of give a footnote break on that kind of 70, 80% of the compute costs are for training, not for inference. In other words, once you've built, the models are wildly expensive to build. Once you build them, they're fairly wildly profitable to serve. And you want to get to serve them for six months. And then you got to invent another one. It's this kind of it's not like it's so not like software where you're on this kind of, you know, you build something and maybe you can sell it for 10, 15 years. In this case, you invent something. You get most of the revenue from it in six, 12 months. And then you have to continue to invent masses of money to build the next one. And, you know, then your question is, so what do you make of that? Because the funny thing is that that's the facts. And you can look at it one way and say, oh, my God, that's totally scary. If you miss even once, you're screwed. And on the other hand, you can say to yourself, that might actually be great for Anthropic because they're best in the position to build new stuff. And they want to build new stuff. And they said that very clearly. We want to build new stuff. And if all the time, you know, very few people are going to be able to compete with this, but very few people like if the next turn of the crank on the model, I mean, if they spend eight billion on compute, you know, year to date, June 26, and they're going to spend 16 billion next year, there's very few people who can write a 10, 12 billion dollar compute check so they can continue to invent these new models, get masses of revenue from them. And then, you know, yeah, maybe at the back end, other folks have it. So even though that statistic was kind of weird and scary, oh, my God, the shelf life of your amazing product is six months. It's actually, I would argue, an advantage if you're the kind of leader and you're willing to just be aggressive on it. Right. But it does point to that. So therefore, what looked like a negative isn't it just points to the incredibly dynamic and scary nature of the game. This is a game where you have to spend like billions and billions and billions of dollars just to play.
Speaker 1But that was Elon's point that most of these Neolabs are just going to die after this. Right. They just can't. It's not possible to raise the capital to survive. Right. I thought there was one bad metric that wasn't in the S1. I thought the worst metric wasn't in the S1. Go for it. The worst metric was that Broadcom had to bail out this debt issue so that Anthropic could buy its chips, that the market was saying it doesn't get much. It doesn't get any better than Anthropic. We just read the S1. Right. It doesn't get any better. But they weren't able to get this debt for this semicircular deal with Broadcom and Broadcom to come in and guarantee most of it and they had to pay even higher interest rates than expected it's not that it's it's terrible but it certainly suggests that that that going forward fundraising even for anthropic and opi and even if it's somewhat indirect it's it's getting harder that combined with the fact that it's getting harder and harder for the banks to lay off and sell the neolab debt i think that's the real the only one to be nervous about that that that the debt isn't is exhaustible here pushing back
Speaker 3on that because i do hear you i because i would actually i think the fact of i think the amount of debt the banks are digesting has hit the limit but i actually think the interesting thing about this week and about the last few weeks has been we're equitizing the issue in other words it was all debt but if you look at anthropic's about to issue plus or minus a billion hundred billion dollars of stock you know meta issued 70 billion dollars of stock earlier this year google issued about 80 billion dollars of stock obviously spacex did their ipo right what you're seeing is that there are a class of companies that has that a have cheap cost of capital and b are willing to take equity dilution to make it all happen so my aha from that is at the macro level it's just going to keep on happening this trend is not stopping and the people who want to have it happen are willing to take equity dilution to keep going so the spend will be there you're right jason i mean elon's doing his thing of you know cutting off the oxygen from the from the other people it's like oh you people who just have debt are screwed uh you're gonna die i on the other hand have the world's one of the world's most inflated market caps so i can issue equity and you know get access to all the chips i want so it was very much uh kicking someone else while they're down move which is very vintage elon and you gotta respect but
Speaker 1they'll have like 200 million of total cash on the balance sheet or something like that after this after this anthropic will so that is that's a lot of cash
Speaker 3i mean let's be precise i think it is out of the first or second largest pile of cash in all corporate america which is i read it was the second
Speaker 1but it doesn't matter which one it is
Speaker 3going public i mean this is a company going public where it already has more money than every other company in america bar one at 110 billion on the balance sheet today they've done a masterful job of raising 130 and only spending 10 or 11. masterful do we think it's going to have an amazing reception i do i mean i'm not sure i mean hell i don't know you know um we're in the
Speaker 2predictions game rory go for it
Speaker 3go for it i think i i think it should i mean i think it's an amazing company you just can't
Speaker 1argue with it i mean doesn't it uh like a spacex almost instantly have to go into the s p 500 not
Speaker 3s p 500 if it's if you're listening on nasdaq which i think it is i didn't check you go into the qqq index but the s p index takes there's a profitability metric or something like that so it takes some time but yes they will be in some index funds pretty immediately but i don't think this is going to need that lift in the same way arguably spacex i think this is going to be just a stock people want to own
Speaker 1but even just getting indexed into everything in the net yeah it is a it's just a retail boost right it's just it's hard to bet again they're not going to miss a quarter whether it's 900 percent i mean with it with the s p 500 they're not going to miss a quarter whether it's 900 percent i mean with it with the s p 500 they're not going to miss a quarter whether it's 900 i mean with within a range like i it's not that i don't think they could disappoint right but within the next two quarters um with you know and i you know that i think we have to be careful to use nrr as a metric here but it's still true right with 900 nrr even if in reality it's more like 300 to 400 because it includes like pilots and trials i just think that plus the brand plus being in the nasdaq 100 it'll probably have a good retail run plus spacex i yeah why would you bet
Speaker 2against it against it if for sam altman reading this thinking about q1 going out himself do you think he takes away anything from it changes anything as a result of it you can't change the past i probably
Speaker 3think if you were the ceo of open ai you would look at this and go decisions that you made you now regret because you've let these guys get away from you and do better if there's any self-reflection there should be a ton of that going on nothing you can do about it you just got to get your business together and converge and get out yourself and in the meantime obviously compete aggressively on price to try and screw up their q3
Speaker 1never has such a successful startup maimed itself so poorly that i can think of as open ai i mean it would have killed almost any other startup what they went through right with the co drama all the other non-profit to profit drama despite startup doing better than them um they basically let anthropic control part of the market for almost a year which is like five years or ten years in ai time right there is a certain amount of parity with astra and the open weights models today the best but anthropic own the own own the playbook for the chessboard for almost 12 months there was no point in using any other coding solution and coding is the killer app as rory said 100 times the math is true they literally letting dario walk out the door rather than build it in house and then firing the ceo and bringing them back over the night of long knives i mean my god i mean it's all going to be okay uh but talk about a no talk about own goals right i mean every startup's full of them this is just uh these are some epic ones i
Speaker 2had the joy of having sachin 20 vc earlier this week great show it was a fantastic guest to have on what an honor microsoft had some pretty big news that they were offering voluntary buyouts to 60 000 of its 223 000 employee base it's an enormous amount of the employee base to get this offer roughly 27 jason you've spoken before quite vociferously about this topic what are your thoughts
Speaker 1first of all rory may have observed more more of these than i have maybe he hasn't hope he hasn't but it's not like all 27 percent are going to take it right and they're going to take it so i think they're going to take it for granted but i think they're going to take it for granted because they've already been through i think they already went through a 10 layoff round right so they've done it's it's it's a some sort of interesting um uh game theory here where you want to offer it to everybody you don't want to have right and then you got to figure out what the yield's going to be right it but it's brutal because what it says one thing no matter
Speaker 3what that people are going to say
Speaker 1on linkedin these 27 we don't want them yes i agree whether seven percent take it or two points we don't and you it is this is a worse scholar atlanta than a wave your hands this is 27 of the country they said did not meet our minimum but we we don't want you well i bet it could have been higher but but i bet they got this done in a week it's it's so damning that microsoft doesn't want 27 of its people that that is the age of ai they don't
Speaker 2want them why would you do that if you're microsoft though what a culture so you stay and then know that you're not wanted isn't that awful i think we're
Speaker 1trying i want to get rory i think you're trying to do this in a humane way and i think what we learned is there's no you know when layoff started like in late 2020 or something like that i think we're trying to do this in a humane way i think we're trying to do this in a humane way i think we're trying to do this in a humane way or so right everyone was fried for doing them on slack or by email oh it's so inhumane go meet with people right everyone was for it's not that more humane to me have you seen office space like it's not more humane to meet with someone in hr and get fired and then they're like don't do it over the holidays so they fired people on january 1st that was no better there's just so this is a way to like make it more humane it's it's great for folks that were thinking of leaving anyway it's great for them right it is great for the folks that are at the either at the tail end of their career or they want to check out of the workforce and that's why this is so hard to do from a game theory perspective because you might get all the the folks that we're going to leave anyway right but microsoft has so much cash who cares but it's an attempt to be humane and i just i've been on the other side it's been a long time since i've been on the other side of a layoff it's just hard to it's hard you try to be a good person but you can't it's hard to make it humane it sucks no matter how you do it and i think this is the suckiest way because 27 of the company has just been issued a scarlet letter i think this is the lead in attempting to be humane this is the least humane way to do it just fire another nine percent in one day do it on teams and move on it's rough it is rough no i
Speaker 3i think you're right i i process the same thing you've been told to go but you decide to stay the only winners are as you say the people who've got another job lined up and now have a call option on the severance package but you know it is interesting they think they can do without you know if their take rate is 10 or 20 000 people it's it's clear it's interesting they can do with you know they have around 200 000 employees so they think they can do without another 10 or 15 percent which possibly is true i mean you wonder how much it will be ai efficiency how much of it is just you never needed them it would be fun to find out these large companies as the depreciation bill for the capex comes due you're going to have to find it somewhere else and we've talked about this you know frankly earnings this year 2026 are in that golden period where the people who are selling the semiconductors are booking the gains but the people who are buying the capex aren't booking the depreciation so everybody's winning but i think if you start to look to 27 that depreciation is going to start hitting in microsoft and google and meta in places like that and you know to keep the operating income up you're going to be really pushing on headcount and this is what this is when the bill for ai comes due and this is how it'll be paid
Speaker 1it's the brutal in a sense it's it may feed the anti-ai frenzy because it it it it's the direct narrative of the story right we're gonna to pay for all this infra to pay for all these gpus and infra and inference we got to get rid of the people right it is in 2027 we're
Speaker 2going to see that really crystallize even
Speaker 3more yes intuitively as time goes by you know everyone's trying to call when the hyperscalers start kind of going down the other side of this so yes as the depreciation bill mounts up so far even though free cash flow has been kind of going the wrong way everyone's operating margins have been you know operating income has been going up and yes that'll get harder now so yes this will be the problem this will be the issue i'm just
Speaker 1surprised that the cloudflare layoffs aren't more discussed because i think it's case study 101 for ceo mba right cloudflare matthew comes in epic year for cloudflare every quarter is growing faster but on may 7th they lay off 20 of the folks bam we don't need it we're too big we don't need these folks we are better off with 80 of the people than we were before and it keeps accelerating every ceo that's arguing about this should just look at i mean you can say microsoft some of it is the old company and it's um and we've got to pay for the for all the ai but cloudflare is just like this is just holding us back 20 it wasn't eight percent it was just boom we're just gonna do 20 and no downside to the business that that is apparent yet i think it's just layoffs 3.0 or 2.0 is just going to happen and it's and part of it's to pay for the infrastructure and part of it is just enough already enough of the performative ai enough enough of this. And we just, we just think about every board meeting you've been in the last week, or if you've been at every, no matter how well you're doing, it's just stressful. Everything is moving even faster than the last board meeting. There's even more competition in every space. We just can't, we just can't carry folks any longer. We can't, or we're going to die. We're going to be killed by that new company Harry just funded or Rory just funded. So there's no stability. You know, the thing, the tough part about the Microsofts and the Salesforce's and the SAPs and every SaaS company back in the day is we were all predicated. We would get to a level, a plane of stability at some point, a hundred, 203 or 400, 500 million of, of AR. We could kind of breathe. There's no planes of stability at all. Maybe, maybe north of 10 or 20 or 40 billion. They just don't exist. So I just think layoffs are just going to accelerate because we have no
Speaker 2choice. Speaking of having no choice and where cash comes from, matter goes to the equity markets. Zuck needs seven, $95 billion. And this week on Monday, it launched a raise of up to 95 billion, 35 common and preferred 60 of the market program. And I think to take from that in combination with the fact that chips lose 200 billion in a day and public markets in bloodbath as Neo clouds shit the bed.
Speaker 3No, the short answer, Harry is no. I think there are two separate points that you merge there. And I'm just dealing with each of them in succession. I mean, I think the meta thing, yeah, which is what we talked about. This was the first quarter where their actual CapEx dipped below their free cashflow, right? So they were free cashflow negative, right? Because it, because remember their core business is one of the best businesses on the planet. It spits out money. It's awesome, right? So they have like 33 billion a year cash of a quarter of cashflow, right? It's a great, great, great, great, great business. This is the first quarter they went negative. So they just did some equity. So that's that. And it's totally unrelated. The chip thing, first of all, yeah, I mean, chips move last week, but let's be frank since the Anthropic, and I don't know where they'll be when this show comes out, but since the Anthropic S1 hit, chips have been bouncing up because the consensus is that looks good. One thing that the S1 was good for was chips. So the S1 was good for chips. Those stocks are actually up. In fact, DRAM today is way up, which is the, you know, the definitive, the one I keep an eye on just the list of the, it's the index of memory chips. And yeah, that's why Korea, Korea is up 10% today, SK Hynix, right? I actually think the news is if you're in the semiconductor CapEx business, it's been a good back half of the way. It was scary two weeks ago with CoreWeave, but you know, CoreWeave is a, I don't know, $30 billion company and Anthropic's deal closes and they're going to spend it all on chips. So chip be happy.
Speaker 1The only slight counterpoint not to get off chat, it's all, it's all green, green, green, but it is just, I know it's a different ecosystem and I know it is apples and oranges, but the Star 15 China, which is their version of is down 40% this year. We do have interesting markets that are out of sync here for AI, right? Because China is just as gang gangbusters in its own way, but it is interesting that that one's down 40. Different market, weird liquidity while ours is on fire.
Speaker 2Speaking of China being on fire, DeepSeek raises about $15 billion, largest ever private Chinese round, by the way, largest investors, battery maker, I don't know how to pronounce it, CatL and Tencent. Anything of note here?
Speaker 1I think that the Chinese open weight models are pretty much over in the US. I think it's the beginning of the end. DeepSeek, it's great that it raised this, but it's beginning to be banned across all federal agencies. And there was a horrific thing that happened this week that was over sensationalized, which was this thing. I don't know if you guys saw it. It's pretty terrible, but it's terrible on a number of, but it's not as bad as it looks.
Speaker 2What happened, Jason, for people who don't know?
Speaker 1Well, listen, Cohere is now a fourth tier LLM, right? Fourth tier player that has only sovereignty on its side as near as I can tell. Harry, you're welcome to correct me if I'm wrong, right? But it has sovereignty and sovereignty is, if you talk to anyone at the enterprise, it's in the top five list. They found that over that Quinn, Alibaba's existing Quinn model was calling to Alibaba servers, both in China and in Singapore, pinging them and uploading data to them when it said it wasn't. When it said it wasn't doing that on the internet, it's everybody's nightmare in the US that our data is being uploaded to China. Now, I think Cohere was more careful about how they did it, even though they're talking their own game. You can't really trust anybody in AI. They're all talking their own game because this is good for them. There's no evidence this is a backdoor like social media thought. This is probably a training mistake at some level, but it doesn't matter. It doesn't matter if one out of a hundred thousand times your confidential data is being uploaded to Chinese and Alibaba servers in Asia and China or in Singapore without your knowledge and without your consent when it's been directed not to, what CIO or CISO is going to approve this model? I can't imagine anyone would. And if this keeps and everything, this is, you know, it's just, it's a junk to black October and all these cybersecurity. issues. This is, and if this happens multiple more times and Alibaba said nothing, you just lose your job. If you use these models, you're just going to lose your job. You're just going to lose your job. So it's pretty crazy. And it could, it could, could have been much, much worse. This got some press. I'm surprised it didn't even get more. It might be subtle, but, um, again, this is every everyone's nightmare using these open weight models based in China is that your data goes to China and it did. So what happens to the stack
Speaker 2when the Chinese open source market shrinks? What happens to the gateway providers, the routers, your open routers of the world? What happens to the inference providers that thrive in large part because of a variety of models, often Chinese, your modals, your fireworks, your base tens. What happens to this stack? If that Chinese model
Speaker 1landscape shrinks? Well, what goes as, as Dev said, when he's on the show, what goes up that quickly with developers can go down that quickly. We'll change in a week. There's going to be,
Speaker 3they saw you some us open source options, right? The question is, given what we've seen about the sense of building the compute expense that has taken a Tropic to build their model. And the fact that 75% of that compute expense actually goes to building, you know, training the model. It would be interesting to see how advanced a model, a U S company like NVIDIA can build and make available on an open source basis. But because someone has to, if someone doesn't do it, then all you have is a closed source providers. And obviously their economic leverage goes way up and you should buy even more on Tropic and the S one in the IPO.
Speaker 1I think it's bullish for Anthropocene. I agree. It's bullish. I think you'll know the moment Elon's able to get cursor off these models is it's the, it's the tipping point. If he could, he would, he just can't yet. Why? Because Grok isn't good enough. Yes. And he already kicked open AI partially out. Right. But he can't, he can't yet because he, you know, he's got this, this bet has to work, but the minute it can, and he said, when he bought cursor, part of the reason was he wanted that team's DNA to make rock more competitive. Right. So there's multiple benefits here. Right. But there's some deep irony that is $60 billion core acquisitions running on China, open source models, primarily it's, it's not going to last. Right. I mean, again, Salesforce forced Finn to rip out theirs before the acquisition closed, but Salesforce can tolerate a little bit more in Finn than a cursor can because cursor has got to compete. It's in the most competitive space there is. Right. But as soon as he can rip it out, he's, he's going to rip it out. Right. It just, it's not, it can't run on Kimmy forever. It's just, it's just doesn't, this is not, it doesn't make any sense. If you think
Speaker 2it's not just like highly illogical, if you, if you download and you run it locally, the security risks are limited to none. I understand that CIOs are CIOs.
Speaker 1How is it limited to none when it's dialing China and uploading your data? And what if instead of a, a 404 or whatever it was, there was a prompt injection sitting there. Very easy to do. I think that prompt injection just uploaded your data. People that, this has been here for several iterations of the model.
Speaker 3I think the question you wrestle with, Harry, is what can you know? How much can you know with a hundred percent certainty as to what the model's doing? You know, and then obviously separate from what the model does, you can try and to some extent block it, sandbox it from, you know, to prevent it doing that. But there's a, it's like having a recalcitrant and difficult employee who's actively trying to subvert you. Once that happens, your head hurts. You know, if, if, if you had an intern and you knew that part of their, you know, that there was a risk that they would try and actively leak your guest list and your shows to your dreaded podcast competitor, you know, it would just get in your head. But it was a whole question of what can you know about what the model is doing? And if you read the S1 for Anthropic again, one of the risks they say is basically the models will lie to you. The models will tell you they're doing, not doing shit and they're doing it. So, you know, you get into this thing, what can you really know? And once you get to that point, it's really hard to, you do worry a lot about a Chinese sourced open source model. So there will be that pushback, I think.
Speaker 1Quinn lied. It says, I'll call no tools and, and Clyde will lie and, and, and Astro will lie too, right? It said, I'll call no tools. And what did it do? It called servers in Beijing and in Singapore and uploaded data. It said, I won't do it. So you really have to go deep in these open weights and really test it. And depending on how you test it, like nominally what happened with Cohere only happened one in a hundred thousand calls. So a bunch of folks tested it a few times and they sort of found this issue a couple of months ago, but you had to run it at scale. But at Sastr, we run 40,000 API calls a day. It doesn't take very long to get to a hundred thousand. If you're GE or whoever in the Fortune 500, you're running millions and millions a day. That could be every hour, every 10 minutes, it's uploading data. And again, this doesn't appear to be even malicious per se. This appears to be a training error in a sense, right? But who cares? Like if you're a CISO, who cares if it's a training error or if it's a spy or even worse, if it's a training error and some other actor exploits it, which is the job of all of our intelligence services to exploit these things, right? To have pagers blow up. I don't believe Alibaba itself. It doesn't look like the engineers did it as an exploit, but the government could take it over, force them to. Why do you want to have this meeting? Let's just use Haiku 5.5. It's pretty good. Guys. Your budget this month is $5 million. And just, I just, and Anthropic, if you, the other thing, if you look, Anthropic is, it's on the GSA list or whatever it's called. Again, it's back in the government's good graces. It's across all the GSAs with a 40% discount. That means a couple of months ago, they were persona non grata. Now every government agency can use it with a 40% discount and it's already pre-listed. Why would you use, why would you use Kimmy? Plus I also think, and again, listen, these are great companies. I also think the fact that you have to pay Kimmy, what is it, 30% of your gross, of your revenue to use it at scale for the inference providers. There's just a lot of complexity here. It may not be worth it at some level.
Speaker 2It may not, the juice may not be worth the squeeze for many people. I'm just trying to understand though, last week we said that modal at 15.7, oh my God, yes, you buy. And then you're saying, no, no, no, Chinese open source is not, is going to decline significantly. It's great for Anthropic and OpenAI. That is inherently bad. It's bad for modal. I'm just trying to-
Speaker 1Yeah, it's bad for fireworks, modal. I don't know how bad it is for open router. I'm just not sure, right? Because it doesn't make any sense.
Speaker 3No, you're making a fair point. And I didn't participate in the investment committee because I don't. But I think to be fair to Jason, the, you know, the assumption is that there is demand for an open weight model, which is obviously the demand that inference providers primarily meet. And you just got to believe that there's a bunch more, that there will be some US alternatives. And there also will be people for whom China's okay. And there will be people for whom they want, you know, the poolside slash NVIDIA one. And provided more, provided something exists in the US, that business is fine. And I do agree with you. I think you, it's not as clear a run as, you know, you have when you own your own close source frontier model, but there is a role for inference provision just because there's just so much raw demand for an alternative other than the frontier models.
Speaker 1To answer the question, I think Harry's got a good point. I think both are true. A while ago, when Rory brought up that there probably won't be another deal like Manus, right? It was a direct investment. I mean, I'm paraphrasing you, right? But after that one got unwound, no one wants to do that deal again, right? The sort of direct investment in an agent startup. This isn't investing in a US-based folks running open weights, but not open source models is not the same as Manus, but there is risk. And I think if 24 months ago, most VCs would not want to take that risk because it's a clear risk. You don't have to fast forward to today with the Cohere Quinn issue to know it's a risk. It's just the reason on the IC thing, the growth is so phenomenal that we're, we're, we're taking risks today that you wouldn't take if we didn't see growth that was jaw dropping. And that's the job of venture today. And it's okay if, if it blows up, it's okay if, if fireworks or whatever goes to zero in our portfolio at IC, because we have other investments, that's the job. And we're taking risks. We wouldn't take this risk if it was a triple, triple, double, double, but it's not a triple, triple, double, double, but it doesn't mean that it doesn't mean that the risk level didn't just go up in the last week a lot. And these deep seek being blocked by the US government. And this whole. Quinn thing and dialing home and anthropic being on the GSA schedule. These are negatives. These are negatives. I think what we may look back is, and I still would, I still believe in the IC. We may, this is just my sense. I think there's a 56.3% chance. We look back on open router and this was just a moment in time. It was a moment in time going back to earlier, the show when open AI stumbled. So anthropic was the only alternative for state-of-the-art coding. And then the Chinese open weight models got really good at coding. That's what, that's what Elon said. Like. It's really good, but, and he even said, they'll catch up to fable by the start of next year. So there was a gap that these models filled and now open AI and others are going to fill this gap and the low cost models are going to fill the gap. Like they, they each now have a much cheaper model. That's much better. And we may see these open weight models go from 60 something percent of open router to 10% in six months. And that would not be an extraordinary amount of change based on what we've seen. That would not be, this is not sticky.
Speaker 2It wouldn't, but Jason, you've taught very well, I think in the past about maiming markets in terms of kind of the fortnight. Yeah. And the shrinking land that's available. Yeah. And to Rory's, I think eloquent point, there will still be some companies and there'll be some companies that want reflection and poolside, but it is a maiming of an open market.
Speaker 3I think you ought to look at it the side. I understand the point you're making, but I think you've just got to look at it. The inference market is still so big. I mean, we, we added up all the competitors and they only had $5 billion. And, you know, we just agreed that the closed source to frontier models are a hundred billion already. So as long as there's, yeah. If 10% of the spend is willing to kind of put up with the brain debt of open source to save real money, and you do save real money, then there's going to be demand for that. Does it get to 30 billion? I don't know. When the overall market is so big, 10% of it is still big. And that's the big Ohio. This is, it's the mother of all markets. So everything else works.
Speaker 2Jason, you teased Black October, but I do think it's significant. Open AI models and WIS found two very critical PHP flaws hidden for more than a decade that have been exposed thanks to where we are in the cycle and the sophistication of AI and some models. What do we take away from this, Jason? How do you respond to this? What should we know that we don't know? Help me out here.
Speaker 1Well, look, I mean, I mean, we, we said months ago on this, I said, everyone's going to be hacked. The biggest change is, uh, you know, back in the old days before the models got good. I remember my CEO said, the only reason we haven't been seriously hacked is no one cared. Now anyone can be hacked in seconds that people attempt to hack Sastr every day. So everyone's going to get hacked. And this PHP thing. It actually is worse than it looks because there's so many websites in PHP that no one's going to update. It's great that a lot of stuff runs on WordPress or that replet and lovable and others immediately ran like gateways or barriers to protect you. I mean, they're not all running on page, but they immediately ran and, and there's a lot of stuff that went up and people, people released patches and updates, but you know, a lot of government and other sites and, and non-profit, they just took their websites down and who's going to fix it. I mean, PHP is still like 40% of the internet. Right. And I bet it's. It's more of old crap. I bet it's like 80% of old crap. So like, this is like Mr. Robot live, like all these old websites are running on PHP. No one's patched them since this happened. No one cares. The it team was laid off three years ago. They're, they're not vibing nothing. And we're going to find our way into all the, it's just going to get worse. Everyone basically, including Sam just said, it's going to get worse and worse and worse and worse. Right. And I, I think we're still grappling with the fact that, that ev everything that is a threat vector will be exposed almost in real time.
Speaker 3Agreed. Cause if you're. Not up to date with the latest stuff, you're way behind. So there's this, are you right? There's going to be a year or two years of this and it's just inevitable.
Speaker 1I think the only thing that's going to save us is there's only so many people that can pay large ransoms. And there's only so many systems that control dams and, and, uh, other natural resources. People are going to give up on putting too much energy if they can't, if they can't make money or debilitate something. Right. So it will actually, it may actually, uh, uh, decline for awhile when they realize, uh, hacking the 20 VC sub stack only gets you so much money. Right. But anything that can be stacked hacked. Is going to be hacked, but you know, ransomware is just getting more and more, um, it's getting more and more professionalized. It's just, it's just the next level, right?
Speaker 2There were a number of large private rounds. Totally. There was LaGorra raising 550 million and 8.8 billion. We've spoken a lot about LaGorra versus Harvey in the past and passing 200 million in ARR just in the last 24 hours. There were rumors and we obviously never, never comment on rumors. Do we Rory of instinct raising at a $30 billion price. Which we can go into, we can have some fun with that one because a lot of people are suggesting that is peak, peak, peak, because the revenue multiple for instinct is the same as it is last round.
Speaker 3Which as someone said, I mean, the valuation didn't go up exactly.
Speaker 2It's just, yeah, we have, uh, others like the ex open AI research chief, Bob McGrew with order hitting a billion five raising 232 million. I'll take, can I ask one
Speaker 1question on the instinct thing? It's a question to you guys. Cause you guys would know better than me. We can make fun of it. $30 billion at token revenue, right? And say it's a sign of the times, which perhaps it is. The question I just kind of wonder is when will we exhaust the equity here? We just talked about equity versus debt for the public players, right? In a sense, the $30 billion doesn't surprise me. They need the capital to pay for the inference, right? They need the money. What do they raise? I mean, it's rumored. Let's say they raise $3 billion, right? They need it. Forget about the rest. This isn't just a vanity raise. They genuinely need the capital to compete. But even if you're getting every dollar that every sovereign wealth fund has, the GIC has, how much money is there for the instincts of the world? It feels infinite now, right? A lot more. Yeah. But how much is it? I just don't know how much it is. When that merry-go-round ends, we just have a structural issue in this late growth phase.
Speaker 2Because right now it's game on, man. I did an Instagram on instinct and I had over a thousand DMs and over half of them were asking to invest. I mean, yeah.
Speaker 3Look, why are we surprised? We've got a lot of money. We've just seen the most successful private investment in history take place. Four years ago, you know, Spark brilliantly put money into a pre-revenue deal that's now turned into, you know, hundreds and hundreds of times $75 million. Everybody reads about that and says, oh, that's easy. When you have that kind of tangible evidence, there's going to be, everyone's just going to look for the next, you know, ticket. And everyone's going to conflate. Everyone's going to think, because it's always true to say, whenever you look at one of these deals, you say, well, it could be huge. I mean, we all have that sense.
Speaker 2And this is why I would unwaveringly do Instinct at 30. If I was coming into the IC, I would unwaveringly do it. For years, we've been promising a super app for the West, a WeChat of the West, which handles your finance, your identity, your security. And finally, we have that with Instinct where I'm not saying it's GATT, but there's a small chance that it is the super app.
Speaker 1Here's why, unfortunately, Harry, I've got to override you on the IC. I rarely do this. Absolutely not. I'm going to put my little black pebble in here. It's not that I don't believe your argument. I do believe it, Harry. I've just, at this point, I need three to four months of data. enough data at Instinct. There's not enough data to prove to me for our fund, for our fund, given our reach, which is substantial, but not the same as our friends at Andreessen Horowitz. I need three to four months to believe there's, there's this momentum is real. And I'm not saying this isn't an exciting play. I just want, and I'm not looking for moats, but I am looking for evidence of that 900% in our art andthropic that is slightly durable, that is slightly durable. And I'm just not seeing it at 30 billion. And so I'm sorry, I've got, I've got to veto this one. It's not that I don't, I don't believe in it intellectually. I'm just tired of doing growth rounds with one month of traction, Harry.
Speaker 2For me, it's like they'll have raised $4 billion. Your lit prep on that means that given the quality of the team and the strategic nature of the market, you'll definitely get that back. Microsoft will buy this in a heartbeat. So would several, I think other hyperscalers, including your matters of the world. One, so your downside, I do think is protected. And I think your upside is really, as we said, the super app of the West, a movement into a business, an ads business, a, a transaction business on all sales and e-commerce. I think it's one of the most no brainer deals for if we're an Andreessen of the world, Jason, for us to be putting money again, we've just raised a huge fund and we need to get it out the door in 18 months. Amen. I want to do this deal. I hear you.
Speaker 1And listen, I don't want this to break our relationship, but I feel like for our growth rounds, we need a hundred days of traction. I feel like we need this rule. We need a hundred days of, I'm willing to do the multiples. I'm willing to roll the dice, but I want a hundred days of traction for a growth round. I've just felt like we've had too many, too many stumbles when we do a round with two weeks of traction. I just believe there's too many.
Speaker 2What would you, what would you want to see? Cause I think the cohort data would be incredible and the, I haven't seen it, so I'm not commenting, but the usage will be incredible. I mean, I've heard it's unlike anything any investor has seen before who is doing it. And so what would you want to see? There's no revenue data for you to see usage data. Well, what do you want to see in usage data? DAUs, MAUs, replacement of chat GPT.
Speaker 1Help me. I just think with no revenue and an unclear business model based on travel. I just think we should unfortunately pass at 30 billion. I just want to see a hundred days of something besides negative gross margin growth of a fungible product. That's just, that's just me on the IC. It's just, if we lose the 2 billion, it will name the fund. And I'm not convinced of the liquidation preference here. I'm not, I'm not, I'm not saying you're wrong. I just, this one might be a bridge too far for me.
Speaker 2Jason, you don't get it. If we lose the 2 billion, it was Rory's deal.
Speaker 1I'm comfortable with the fireworks at 40. This one at 30 just makes me nervous. Fireworks has met my hundred day rule. It's got a hundred days of compounding genuine growth that I don't believe is durable to our, to our earlier point, but I believe is, is truly measurable and bankable.
Speaker 2Wow. So you'd rather durable growth where you don't foresee it being better than not having that data, but where you do see it being better.
Speaker 1I still think it's a better investment than Hopin, but I'm not comfortable with this, with this consumer negative gross margin. You asked an
Speaker 3interesting question, Harry, stepping back. You're right. What you're basically saying is how do you compare known market, solid growth, growing nicely, you know, not nice. It's on the state fireworks, a ripping market where, you know, inherently it's not magic pixie dust. There's going to be five competitors where, you know, your upside is real, but it's cat capped at some functional level because there are five competitors and you're comparing that to how do you think about this thing where if it becomes everybody's thing, it's a $200 billion, everyone uses instinct. It's the replacement for iMessage plus, yeah, it has that potential to it. And you're right, is that there is more uncapped upside in instinct and how do you weigh up, you know, what, what does your, you know, you got to do the three-way payoff matrix, you know, if it's amazing, if it's good, if it doesn't work and look at the two and it's, what kind of action are you looking for on the table? I suppose is to some extent the question. Every big fund should be fighting
Speaker 2their ass off to put as much money in instinct today. Yeah. Okay. So I'm voting for it. Okay. Next one on the IC, Jason, you've got Kevin Weil leaves open AI science to launch warp science with 215 million. It's a very early pre-seed. So you may not be comfortable with that because there's no data. You've got the open AI research chief, Bob McGrew, where he raised the 232 million series A. You have Lagor's 550 million round.
Speaker 3Odd things to put together. I mean, I was trying to make sense of this thing, right? There's a plethora of deals this week that I would describe as absolutely proven executive, big opportunity, hairy technical challenge, but big opportunity if it works. And that's to some extent is the flapping airplanes thing. To some extent it's Arda, which is the Bob McGrew's deal. To some extent, I don't know as much about warp science, but it feels like the same thing, big idea, talented executive. And there's just clearly a wild appetite for that at, you know, fairly high prices with relatively. little de-risking. And that's just one whole four or five of those kind of deals here. And then the other type is the, you know, late stage, you know, known good company doing really well, you know, maybe Lagor, maybe in a different way, Bedrock, where, you know, it's not as binary based on a person. It's just how do you price these late stage companies, right? Which is easier. I mean, at some level, it would be easier to get you to figure out your head on Lagor or Bedrock than it would be to do flapping airplanes, Arda or warp science. Where all you know is the executive in question is talented and the opportunity, if it works, is amazing. Welcome, welcome to the game.
Speaker 1I'm going to take a radical approach for, for the IC Harry. I know, I know it might make you uncomfortable and you should veto it too. Like I, I want to veto instinct, but I think there's moments and I know you don't totally believe me, but I believe in, even in many best startups, sometimes there's dislocation moments where the, where the market briefly struggles. And I think we should put 20% of the fund into open AI at the $1.25 trillion round. I think that it's. It is mispriced. It is a moment when there's a little market panic. Anthropic is on fire. SpaceX has done well. The models are wildly competitive today. The open AI has closed all the competitive gaps. It is a well-run machine. It reminds me a little bit of that anthropic round at 183 billion or so when, when it was dis when the, when the valuation made no sense vis-a-vis open AI, it was a dislocation. A lot of people made money on that round. This is a dislocation moment. This is folks misunderstanding. They're thinking open AI is struggling when the numbers clearly say otherwise, and we can fart around with these little 20, 30, $50 billion rounds. I think if we put 20% of the fund into open AI at 1.25 trillion, at least we can return the fund with that. And then we take our upside with our, with some of our other exciting bets.
Speaker 2Why do you say that? What is the upside on open AI at 1.25 trillion?
Speaker 1Well, look, these are both going to be 10 to $20 trillion companies. Just look at, look at the growth and the scale, look at anthropic. It's only 0.1% of, of the fortune 500 budgets today. Clearly, it's going to be in the two to 3% range, even by the most conservative estimates that us and coat together and iconic have done. Right. So going from 0.1 to two to 3%, I need Rory's help here. That that's significant growth ahead of the investment. So getting, we, you know, getting, we need to, if it's 20% of the fund, obviously it needs to five X dilution aside to return our fund. Um, there's a clear path to a $10 trillion outcome, 20, 30 trillion. The rest of the fund doesn't even matter. It's got a discount to anthropic that I don't think it's going to deserve. And so worse, just like worst case with some of your investments, you get your lick preference back. Worst case here, we double our money. Worst case. It's not that bad to double your money. Worst case this that, and that's what you get from these, from these dislocation moments. You get to double your money when ordinarily these rounds like inflection, uh, or instinct are priced to perfection. Open AI is not priced to perfection. And that's rare. And that's why I think we do 20% of the fund because that's the limit under our LPAC. And we just tell that we just tell the LPs because we can do that without LPAC consent. We just do the maximum without consent. We just let them know on Monday.
Speaker 2The other thing is the quality of codex today is so significantly better than it was in a prior generation. I know every coding team that we work with has switched from cool code to codex in the last three to six months.
Speaker 1That's why we should put 20% of the funding. People aren't getting it. They've achieved parody. This is when you go all in, but the markets don't see it. The markets are too, are too superficial to see it 20% of the fund, but nothing smaller. It won't, it's not enough. It's gotta be 20% of the fund.
Speaker 3Interesting. Not crazy. I must say, Jason, it's like, you're right, is that Antropic will price, it'll be a 2 trillion and maybe a pop. You know, if you knew that this was the last private round and the trajectory of open AI was converging, I mean, you'd want to know that they kind of got religion and wanted to do something like what Antropic has done. Yeah, not crazy. If they continue to say, we're going to spend, you know, we're going to burn forever, forever, then you wouldn't want to do it if there's another private round in it, but not a crazy idea because risk adjusted, it's probably less risky than some.
Speaker 2I love that as an out there suggestion. My only combat to that would be, could we not do instinct and open AI and actually hedged? It's not a bad risk profile. Your point. If that's your definition of hedging, please don't ever run a hedge fund. Why? My friend Leo told me that was how you did risk management. In all seriousness,
Speaker 1this may be my weakness. My scar tissue is I want a hundred days, whether it's seed or growth, I want a hundred days. But
Speaker 2Jason, you're just not, I agree with you
Speaker 1dude, but you're just not getting that today. I might not be. And I don't want to lose you from the fund, even though it's, it's stepping in the wings and company. So if, if, if we have to do it to not lose you, I don't want to go. I don't want to go a while. Got y'all here. We'll do it. But I, I just, I'm going to use, if I can use one black pebble this quarter, it's going to be on this one and I'll, and I'll take the hit when I'm wrong.
Speaker 2Any other rounds that we think are worth bringing up as we said, flapping airplanes, I thought it was an interesting one that building models that learn about super dogs at a billion
Speaker 1and a half that one, I need a little help with the TAM. I need to give you my TAM analysis for, for, for bionic dogs at 1.5 billion, or it's just just another Elon bet. Like he's going to make it
Speaker 2work for contacts. War hounds is a solid Co-founded by Palmer Luckey, the founder of Angeril, that is essentially, I mean, genetically modifying dogs to be next generation conflict war machines would be an apt description. Put a valuation of $1.5 billion on it because Palmer Luckey deserves it, to be honest.
Speaker 3Discuss. I mean, I realized that I had zero value to add on that. I genuinely saw it and said, wow, I mean, genetically interesting. I mean, how do you price that thing? I mean, you know, yes, I saw some analysis of the number of dogs the military use, blah, blah, blah. But you're all just, you know, moving paper around. I think the investment memo probably wasn't one, but to the extent there was one, it's, wow, that's a cool idea. Let's put in 50. I think that was the summary investment memo. Let's genetically engineer these dogs to be savage so that they can be better war dogs. I mean, what can you say? And it's Palmer Luckey. You're like, yeah, OK. Yeah, exactly. Good team. I won't be doing it, but who knows? Once you found it, and I nearly said on Tropic, once you found it, once you're the sword of the West, you can do what you want.
Speaker 1Well, I mean, there is a connection between this and his other startup. He just started this laptop on Blue Chip, right? Oh, yeah. He's both solving sovereignty issues where key national security things are dependent on vendors outside the U.S. The dogs come from Europe, apparently. I didn't know this, right? Yeah. I certainly know that almost all the rugged laptops, which probably you can sell for 10 grand, right, or much higher margin. Those components are almost all entirely. They're not necessarily from outside the U.S. How big these models are, I don't know, but he's such at the core of this industry that he wants to plug the white spaces he thinks are important. And maybe the TAMs are small, but the models make sense. Like, he's right there, and he has the channels to sell these products. Like, he could get 100% of all the mil-spec laptops as soon as this thing launched. It wouldn't surprise me, right? Sort of get 100% of the bionic dog market. And these are real markets where he has visibility into them that other founders can't penetrate. It's just, you know, whether they're worth it, I don't know. But I guess if you're Sean McGuire, your returns are so strong and consistent, you just back them. People were mocked in that discovery when Larry Ellison and Marc Andreessen gave Elon blank checks to Twitter with nothing. They just said, well, tell me the price. How much do you want me to send? And he was mocked when he wanted to get out of that deal. But in the end, they're making money.
Speaker 3Absolutely. No. Yes.
Speaker 1So maybe I'll have to merge the dog startup into Anduril or something. But maybe it's okay.
Speaker 2Well, haven't you seen the brilliant? The brilliant graph where there's like you start here, you go up here thinking that you know a lot about the market, thinking you know a lot about the market, and then you just come down to where you are. Yes, agreed. And it's like founder, founder. And it's like where you are in your career. Zero years, 15 years. In the middle period where you think you're an intelligent investor, no, no, no. They're really just as different. Yeah, I know.
Speaker 3I'm very familiar with that.
Speaker 2Yes. It's so, so true. Any others, Jason, that you'd like to bring to IC this week? We're a very busy committee.
Speaker 1Well, 20% of the fund is, I think, is enough for one week. I mean, we can't do that. What is 20 times 52?
Speaker 2What percent of the fund is that? Help me. It's so interesting, though. I speak to so many LPs. We just had our AGM. The single most common piece of feedback that I hear from all LPs is every mega platform went out to raise. They raised bigger. They spent faster. They're coming back next year.
Speaker 3You know, I mean, look, yes, because it's where, I mean, we're Pavlovian creatures. And, you know, if you put money into Antropic three years ago, it feels amazing. And most of the platforms did at some level. So they feel amazing. So we're going to do other things over and over again until it. And it's not going to stop until something goes wrong. So, yes, there's going to be these big rounds. We are risk on until until we're not. The public markets, oddly enough, let's be really technical. Interestingly, on a 10 year P.E., they're at an all time high. I mean, objectively, they're at an all time high. Interestingly, on a forward P.E. basis, they're actually quite cheap because the market, you know, oddly enough, earnings have been so amazing in part driven by, you know, one off gains from privately held investments in the public companies. On a current P.E. basis, stocks like NVIDIA on a forward P.E. basis look cheap. Now, you're going to have this long discussion on cyclical blah, blah, blah. But the aggregate market isn't hurting. Now, you know, what is true is that 450 out of those stocks are hurting. It's a really weird. I mean, a better statement. How is it's a really weird market right now. There's 40 or 50 stocks that are working in the S&P that are primarily associated with tech and I. Everything else is quietly subpar. And oddly. And then despite that, there's haven't been a ton of IPOs because everyone's been waiting for this trillion dollar thing. And the whole world is in suspended animation. So. That's where we're at, which means that just to draw to a conclusion, which means that it's a perfect time for these platforms to put a whole ton of money out on private companies because there's a big demand for money.
Speaker 2Any other stories, boys, that I've missed this week?
Speaker 3I mean, there's a lot. I mean, the interesting thing is, you know, I did a pretty. It was odd because I thought you'd come in with Anthropic and nothing else. But there's like there was a whole bunch of financings we talked about. You know, you've got the continuing SpaceX Tesla drama, which is going to run and run and entertain everybody for hours to come. And then you're right. There was a ton of really interesting companies. I had one that was under.
Speaker 1Discussed. I didn't fully understand. I should have done more research on it. There was much more drama with Zuck and the board about leaving California. Oh, yeah. And was discussed. It was it was clearly a high stakes drama. I mean, they hired lawyers. The lawyers negotiated with the board. The board was not his ally. He had to threaten to sell all of his homes and leave in one week if they didn't give him the equity that he wanted to stay in California. There's a lot of mechanical things happening there with the billionaire tax and others. But the fact that. It had to go with lawyers for months and threats to sell. I get it, but it's certainly the opposite of giving of the era where founders are controlling everything. Right. It's yeah, there's a lot going on.
Speaker 3Yeah. The one thing you can control is your own comp. And I get it because, you know, even Elon has to do that because if you're the board members and you do this without kind of CYA a hundred different ways, you're vulnerable to being very second guess. I like my guess is even if they're perfect, reasonably amicable, everybody should lawyer up so they have protection and, you know, they have a process. Because process is your friend in these things. But then on top of that, you know, it was super interesting. I don't know the detailed dynamics on was it the voting, but yes, the billionaire tax is up and we'll know in a week or two. But people who think there's no impact from that have never met a billionaire when you've tried to take 5% of their money away. It turns out they take it really badly, especially when you want to take 5% of the money away. And, you know, there's some voting criteria on it when you have more voting control than anything else. So it's more than 5%. And especially when the legislation says, you know, we can do it again soon.
Speaker 2I thought they'd already given it all away. Isn't this the point of the Priscilla and Mark Foundation that we have a tax efficient infrastructure?
Speaker 3It turns out that people like to give it away, but they don't like it to be taken away. It's all about agency and control. But yeah, no, you're right, Jason. That was probably much noise under the circumstances. And, you know, it looks like whatever happens on this billionaire tax, it's been remarkably successful in driving out enough billionaires that you will have an ordinary income tax hit. So go team.
Speaker 2And do you know what I'm excited by with this show, boys? It's obviously recorded on a Wednesday. By the way, it's a Wednesday, Rory. So there's not going to be like 24 hours before release. And so there's no chance that there will be some massive news announcement, really, with a 36-hour period.
Speaker 3Actually, just to remind you, I think Microsoft and Google Alphabet are reporting tonight. In theory, you could have anything, but who the hell knows? I'll be shocked to discover that they're going to spend more on CapEx. Are we good, Harry? Are we done? We are rocking and rolling, my friend.
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