Robinhood’s CEO on letting AI trade your money

Vlad, I just got to see Robinhood agents and have a lot of questions. I think the big thing for me is it's the first time that a lot of people will probably be introduced to the concept of AI making trades on their behalf. And it seems like a big deal for not only you guys, but the industry, AI in general, how people use AI. I'd love to hear from you the genesis of this idea and why you guys decided to do it because you did the MCP thing recently where people can use Robinhood data in their own AI harnesses and all of that. But this feels like bigger. Yeah. I guess the origins of it, the motivation is that we want to empower traders with all the best tools. And we want to put all the power of a sophisticated hedge fund or algorithmic trading firm in your pocket. The beginning of my business career, I was in algorithmic trading. So I have a little bit of experience of what that looks like and what it is. And I think this is, it's going to be a long mission that to some degree never ends because the wealthy always find a way to get better stuff, which means our job is never done. And that's part of what makes it very, very fun. So when we started our path to making Robinhood agentic and making this agentic finance category real, and by the way, nobody else is really doing this. So it's sort of like we're wandering through the fog and iterating on the infrastructure and the product at the same time. So the first version of it, which we launched with our Robinhood MCP, Robinhood for agents earlier this year, had two components. One was for trading. The other was an agentic credit card. And for trading, it started in a separate account. So it's very cabined off. You have to affirmatively move money from either your bank or from another one of your accounts to your agentic account. So it's separate from your retirement, separate from your main Robinhood account. At first it could only trade equities without margin. So unleavored cash settled equities. And then over time, because we wanted to start light and kind of figure out how customers would use it and what they wanted. And so over time we've expanded assets. Now you can do options. Now you can do crypto. We've added limited margin capabilities as well. And what we found was, first off, customers love it. We have over 100,000 customers that have actually onboarded onto our agentic trading offering. And as we look at the metrics, it's like continually and steadily increasing, especially when we add new capabilities and we unlock things like limited margin. And so the trajectory and the retention has been really, really good. What people, there's a couple of things that are clear next steps that we want to improve that have been just adding a little bit of friction. One is not a lot of people want to use Cloud Code or Codex. And in our circles, we're a little bit more tech savvy, probably know a lot of people using Cloud Code and Codex. But for your average individual, it's a little bit too complex. It's still kind of a developer tool for computer programmers. And the friction of going from your Cloud, connecting it to an MCP, linking it to Robinhood agent and having to monitor in a different place where you're managing your strategy is not ideal. So that's one problem that we fixed with Robinhood agents. The second problem is that a lot of times the general models, when you plug in an MCP, they don't want to trade. They're not comfortable with it. They don't see the trading traces in their training data. They're not built for it. So we've spent a lot of work and this is the part that I think will continue to make the models very, very good at using our tools, being aware of what Robinhood can do and how best to take advantage of the huge ecosystem and actually iterate to make it not just want to trade, but be really, really good at everything around it. And so that's the big step in Robinhood agents. We're bringing it into your app, making it so you can manage it in one place and really kind of giving you an integrated experience for agentic trading. And it's just the beginning. You imagine more asset classes, more capabilities, everything that you should be able, everything that you do as an individual on Robinhood should be accessible to your agent. And over time, we want to systematically go through everything that an extremely sophisticated algorithmic trading firm or hedge fund would have access to and give that to our customers through Robinhood. And that means improvements on performance and latency. You know, a lot of these high frequency firms, they compete over who gets to be the first port in the switch in the data center where the exchange or market maker is, right? So the, yeah, it goes quite deep. So more work on the performance and latency side, which we've been making incredible progress, more work on research and adding tools. Agent apps is a new thing where we can actually link to third party developers who provide tools for our agents, help them monetize and give that capability to users and more data and more integration with the broader Robinhood ecosystem. So yeah, we see a world where actually the North Star as our customers should have an advantage over the hedge fund and the algorithmic trading firm and there's just an endless amount of work to get to that point. And for people who haven't used it yet or seen it, I mean, it basically takes 60 seconds to set up, you name your agent, pick your model, decide if you want to have trade approvals on for the agent, which I think is important you guys are making it opt in for the experience so that people I think can just get used to it because it's going to be a new concept for a lot of people, especially the average Robinhood user, like you said, they don't know about all these sophisticated tools and data sources that professional traders have access to. We put a lot of guardrails in at the beginning and some customers actually say, hey, I wanted to have access to everything. But at this point, we still want to make it to be a affirmative decision. Yeah. Do you want it to be autonomous or do you want to approve everything? Well, by default, we'll make you approve everything, but we'll have a path if you want to try autonomous. And then the fact that it's in a separate account as well makes it so that you have to make an affirmative decision for it to trade your money. It won't just go rogue and do that. So we spent a lot of time thinking through the trade-offs and I think we have a good base from which we can continue to iterate and to lead this new market, which I think will be a really big market. This episode is brought to you by Mercury, AI Native Banking that's loved by more than 300,000 entrepreneurs, including me. Visit mercury.com to learn more. Mercury is a fintech, not a bank, check the show notes for details. This episode is also brought to you by Jira Bayad-Lasian, where teams and agents get the context, coordination, and control to move work forward. Try it free at Jira.com, that's J-I-R-A.com. Thanks also to Grinola, the AI notepad for people in back-to-back meetings. It works everywhere you do and lets you focus on what matters. Try it at Grinola.ai/Sources and use the code "Sources" for three months off. The separate account piece, did you want it to be one account? Did you have to do separate account for regulatory reasons or privacy reasons you see it ever being one account? The AI ends you in your account? I think that, I mean, it would be very easy for us to link it to your main account. I think part of the reason we want to do it is just to start small and to make sure that if we do get feedback from customers, we sort of tiptoe into the experience. A lot of people have been asking us for putting in the main account or you could imagine a flag so that you could flag and turn on an agent and plug it into an existing account that you have. Yeah, that's something we're thinking about, but I don't think at this point it's a limitation of the product. I think a lot of customers really like being able to move things over and keep it separate, so probably the default being separate account will continue, at least for the time being. Out here in Silicon Valley where we are, we're here at your office in Memo Park, I mean, there's whole startups being created to use AI to do autonomous trading, right? It's a really interesting category and something I've been thinking a lot about and the idea of AI managing money for people and not just sophisticated people but everyday retail investors and you're doing that now with this. I'm curious like where you think this is going, are we going to a world where most people have AI make their, not only their decisions but their trades, execution, all of that, how they do that for them, do you think that this is inevitable? I think a very large portion of the volume will be generated by AI agents and I think that's because they don't have a lot of the limitations that we have as human traders. They can be up 24/7, right? they can be multi-acid class simultaneously. So, you know, one, one, one. of the things that are challenging for humans using our Robinhood app directly is, you have to go to different screens to get different asset classes. The more things we add to the app, to some degree, the more work we have to do to make the experience coherent. For example, we've got, we started with stocks, and it was very simple stock experience, but then we added options, crypto. Now, we have futures, prediction markets. In overseas and some of our other products, we've got DeFi with Robinhood chain, decentralized finance products and assets. We've got perpetual futures, banking, retirement, advisory. It's a lot of stuff, and that complexity is a challenge for humans, but for agents, it's just more context, more opportunity, more trade ideas. We started seeing the earliest iterations of Robinhood agents. We see people constructing options strategies. I have a very specific thing that I want to do, trade that I want to put on. Maybe it's an iron condor or something. I can tell my agent, and it'll take the data, it'll put it together. It makes that really, really easy. That's automation use case. We're moving a paper cut, but imagine we're plugging into all assets. We're plugging into all data sources, and you'll see the use case is getting more complex. The strategy is getting a lot richer. I see a world where a large portion of the trading volume for an individual investor, for our customer base, writ large is generated by AI agents, but that doesn't necessarily mean the vast majority of the assets are going to be agentically trading. I think the vast majority of the assets will probably be held long-term, but the trading activity will probably go more and more towards agentech. It's an interesting time, too, because people are getting used to products like news, instinct, et cetera, making purchases for them agentically and using AI to save money, pay for things. I feel like your timing is actually pretty good, because the average everyday AI user is starting to realize, "Oh, I can use AI to interact with my money." In a way that six months ago, no one was really doing. I think there was still that gap of, I don't really feel comfortable giving my AI, my email, or the keys to my brokerage account. I think we're going through the shift. It happened with other new technologies, too. I remember when the internet first became a big thing, and people were very nervous, punching their credit card number into a website. I remember. It didn't feel secure. It was like a safety concern. It took probably 10 years before it became clear that it's actually more secure than handing your credit card over at a brick and mortar register. Same with mobile. When we got started with mobile, it was still the over-tune window hadn't shifted to mobile-beinger default way of managing your finances. It was still people thought of it as where I play games or do not serious stuff. The idea of my finances being on my phone seemed sacrilegious almost. I think we'll see the same thing here. We're starting to see it. We're probably early, but I think the time is soon. When your team was showing me the demo, I was thinking, too, this really gets at the original mission you had for the company, democratizing finance, because AI, those paper cuts you described, putting on complex trades, all these things, potentially a lot more people could be doing more complex things with their money, and not even needing to fully understand all the complexities. The AI could explain it to you. You know, much better than reading a book. The interface becomes simple. Options trading is probably a great example. It's so complex. Options trading is very difficult. You all had, I think, still do have the best interface in terms of learning options. I got to be honest, it still is complex. Particularly, if you go into these multi-leg strategies, we can do what we can to illustrate and say, "Okay, well, this trade, you've got limited upside, down-side, and we'll show that graphically." We can generate all those visualizations and make them available to agents as well. What the agents can do is take your intent. It's okay. I want to put on a trade for this stock. I want to cap my downside. I want to have unlimited upside those sorts of things. It'll actually, they do a pretty good job of constructing the right legs of the options trade for you. I'm curious where you think the edge will be in investing and trading as AI proliferates. You started this conversation by saying, "We're always trying to play catch-up with the big guys, trying to get people a leg up." The big guys are always going to be trying to get their edge. This cat and mouse can feel like it's not stopping anytime soon. But if we think big picture of a world where everyone's using AI to manage their money, I think the edge will be always moving. There's not going to be, "Oh, everything's still." The edge is right here. The alpha is right there. People are always building new products. Even us, you look at Robinhood Chain, which is our new blockchain that we rolled out, optimized for real world assets. As soon as that went live, it surprised us with just a huge amount of developer activity, Dex volume. A lot of the traders from other chains immediately started bridging over because they were all these new assets they could trade the stock tokens, but also some of the memes and other assets. All of that was just a new ecosystem. I think you'll see new ecosystems continue to form new asset classes. A lot of the agentic trading interest has been in prediction markets, too, where you not only have your typical financial assets, but you can trade on real world events. You can trade on Fed decisions, sports, crypto has become very popular. You'll see new asset classes coming in. I think the advantage that Robinhood has is we're one of the few, if not the only, where you could do all of these things in one place with one easily shared balance and uniform KYC simple money movement. For your agent, they can just have access to all these things. Then you can have strategies that incorporate multiple assets. I think that's where it's going to start to get really interesting because that type of complexity, that type of strategy is going to be very, very difficult for a human unassisted to be able to put together. You don't worry about a world where everybody has the same kind of super powerful AI that can trade for them and then there's effectively no edge. The edge in anything is built by differentiation. If you're doing the same thing as everyone else, kind of definitionally, you have no edge. You'll have to figure out how to be different. I think that's been always true for trading. It's not as simple as my AI is better than yours. There's a lot of product stuff around it. If you have a better AI than other people, I think that would be one form of edge. I don't think very many people will be training their own AI. Connecting it to unique pieces of data will have a proliferation of apps in the agent app store, which now we have relatively small number, but it's going to be open and we're going to be adding a lot more. Things in some degree to some degree do get centralized because we have these models that are now looking at everything, but also the amount of things we can give them and the context and the tools are increasing as well. I want to ask about the agent marketplace, but on the model side quickly, are you guys doing a lot of post-training, fine-tuning on the big open AI and theropic models? Robinhood is not going to make its own model for this. Currently we're not doing any fine-tuning, but we have done that internally for certain models. We've also pre-trained some specialized models for ourselves. With this one, we wanted to start with the models that our customers would already know and give them some choice for what to deploy. That doesn't mean that you can tell already this product is evolved. It's going to look completely different, probably six to 12 months from now. The marketplace is this in the same way you talk about all the other business lines you guys have. Is this the next one? Do you see this being more than just a way to make Robinhood agents better, but an actual business for the company? I do think the vast majority of Robinhood's business is going to be from transactions and assets, so just customers performing activities on the platform and bringing their money in and the second order effects there. Subscription is a bigger and bigger thing for us. You look at Robinhood Gold for the main app, that's a multi-hundred million dollar a year revenue business started from a small base. We want to make it as good as possible and create this marketplace where developers and service providers can come in and have an incentive to plug in their data. Is it going to be as big as the Apple App Store? I'm not sure, but yeah, I guess I never try to presuppose and pre-ordain how big each of my businesses will be relative to the other ones. It's not like people always ask me, "What percentage of your business?" Do you want crypto to be? I want my crypto business to be the biggest crypto business. I want the equities business to be the biggest equities business. I want them to compete with each other over which one's bigger. Yeah, like why would I, you're like, oh no, yeah. Crypto, I want to keep to like seven percent. Right, right, that's a really good seven percent. Let's just not keep it. It's a portfolio of one. Yeah, well, no, but so the marketplace. It's a portfolio where everything just has to be as big as possible. The marketplace though, I mean, is the business model some kind of take rate or subscription sharing component? How do you, because you've got, like initially you've got unusual whales in there. You've got some great data sources. What is in it for them, except exposure to the Robin Hood user? How complex do you want that to be? Like do you think it stays that simple? I think so, because whenever you get into, like for example, it's hard to do a transaction based or an asset based revenue share for a couple of reasons. One is a lot of customers don't want that information shared with the apps. You don't want the entire marketplace to see how much money you've got in your account. You also don't want them. People are very private about their trading strategies. Yeah. You're not going to want people like inspecting all of your trades, right? So yeah, one of the benefits we provide is we provide a layer of privacy. People know that people are already comfortable with their trading in Robin Hood, because they know we're not just sharing their trading data with everyone. So I think subscription is clean and yeah, it doesn't get us into like these messy things of either making sure that the partners have to get regulated or that we don't want customers to feel like their data is going anywhere they don't want it to be. Sure. Is there anything that the big guys are doing, the hedge funds, etc. where you're like the quance, all that, that you're like, man, I'm trying to get that in right now to the marketplace? Are there things that you can tease that people may not know about the edge that these big guys have that you're like, I'm going to bring this in. I mean, a great North Star would be, and again, I'm not giving you any timeline for one we would have anything like this, but a lot of the strategies that the big guys have are unlocked by low latency, so you have to be physically proximate to the exchanges and the matching engines. And right now Robin Hood doesn't offer that, but of course, my beginnings were as a high frequency trader, and I think it's an interesting question to ask ourselves, what would it look like? Can we actually, and we're starting with just making the performance and latency generally better, but one day can you deploy a trading strategy, collocated with the exchange, and do that in a very simple way where you don't have to be an expert in data centers or networking. You don't have to understand the details of that type of infrastructure engineering, but can we actually just make that easy for you? I'm curious how you're using agents in your personal life for running the company, also managing your money, and I heard from your team, you really love loops. You're doing a lot of loops. We could talk about that, but yeah, curious how you're using it and how it's evolved for you these last few months, because things are moving so fast right now. The first thing I started out with was just writing code that became an engineer again, and through that, my north star is that everyone should have a team of agents that's productive while they sleep. We should be like a 24/7 company and not just an aggregate, but each person puts your doing on like, writing windows and all that. Each person should be a 24/7 agent manager. Your job becomes managing your agents, make sure they're well fed and they're not hungry, and they have the context. You ask, "All right, well, what does it take for your agent to be running fully autonomously?" They have to have context. They have to be able to test their work, because if they don't have the ability to test their work, eventually they stop, and they're like, "All right, I'm done. You do the testing for me, human." It really just requires rethinking our entire infrastructure and making sure everything from the continuous integration, continuous deployment, the testing, that's all really, really good, and it can scale, and that we can actually automate pretty much everything. I think that the future is all product development will be looped in this way, right? Your bottleneck will be how quickly can your changes be tested against live customers? How quickly are you going to be able to tell? Is this a good change or a bad change that we should throw away? Industry-wide, software engineering is completely transforming. You're going to see an end-to-end automation of product development and infrastructure development. One of the first places you're seeing it is actually AI research. I thought that would be the hardest and the last to go, because it's just complex work. Really, if you think about it, it's pretty neatly sandboxed. I mean, AI models, there's already a way to test them without having them live. We have e-vals, so you have automated e-vals. The experiments are pretty narrow in some ways. You can run experiments, change the AI model, deploy a new feature, retrain it in some cases. It turns out some of the first work that's being automated is the AI research work. I think eventually it'll happen with products too, but product work is a little bit harder because you have to go and get adoption from real users. They have to test it in the wild and human adoption and behavior change is a little bit more slowly than things in the pure agent world. There's an intuition to products and an art really to it that I think also is going to be hard to replicate by AI. Maybe so. I don't know. They said AI would be the last thing to be replicated, but some of the first things you saw, right when Chad G.P.T. launched was stable diffusion. You could say, "Make this," but in the style of Vincent Van Gogh, it was pretty good. Again, that doesn't mean that it has the taste and people get used to things and realize that this is an AI-generated image, but I think a lot of the design work benefits from AI as well. I'm really interested to hear your view on the conversation around AI bigger picture and how people feel about it because I was thinking about it's so visceral how people feel about it. They either love it and they're using it and it's improving their businesses in their lives or they hate it. They did test it. They refused to use it. Very polarizing, and the data centers are a problem. There's a lot of problems. I was thinking about this concept of inequality and how it connects to the Robin Hood mission and bringing equality to finance and democratizing finance, and I wonder if you agree or not that I'm starting to think a lot of the negativity around AI may actually have to do with inequality. Completely agree. Yeah. This is one of the reasons why we push so hard for individual investors being able to invest in private companies. We have Robin Hood Ventures, which is our US-based think of it as publicly traded venture funds that are listed on the NYC. We have two funds that have IPOed more coming just along. You just had a curse on there, I saw. Yeah. Kruzo was Robin Hood Ventures, one investment. Robin Hood Ventures, fund two, is seed and series A stage. So fund one is frontier companies that are leading their industries, typically late stage. So open AIs in their data bricks, exactly revolute. So really just top quality late stage names. They're hard to get into, available to mass market audience, the product that is traded on the NYC, like any stock. And the great thing about it is because we have so many retail customers, we provided retail distribution directly. So we went public. We raised capital, the bulk of which came from Robin Hood, individual investors, and then that capital was invested into these companies. It's an efficient structure, right? There's very little middle layers in no carry for Robin Hood Ventures fund one. Robin Hood Ventures fund two, we wanted to take it further and do something that nobody's done before, which is seed and series A stage companies. Companies nobody's heard of before they become household name. Which is exciting, but I can say now is a new investor, also very risky. Yeah, I mean, the risk is highest in those, but also the potential upside and the opportunity is greatest. And actually there have been studies, there's a pitch book study that looked at you're an investor. So you've probably seen this one, seed investing as an asset class had the highest aggregate returns, even accounting for a higher rate of company failures than any other class. The power loss is a beautiful thing. Yeah, so it's interesting. I mean, we solved the problem of individual company failures by diversifying in a broad base basket. And when Robinhood Ventures Fund 2 went public, we seeded the portfolio with 80 companies. So it's going to be a large, a large number of investments. You know, we're building the machinery to do this. And of course, overseas we have tokenization, which we've demonstrated with our tokenizing open AI and SpaceX for our European customers as a gift. And then, you know, now that the chain is out, we're obviously very keen on taking our tokenized stock products, stock tokens, and expanding that to other assets. So yeah, you look at AI, big problem, and you juxtaposed it with something like crypto, which was available to individual investors from the beginning. From the first block of the Bitcoin blockchain, it was like an individual decentralized phenomenon, normal people adopted it before institution. It became incredibly wealthy from that. Yeah. Yeah. And now, you know, you've got crypto army. Yeah. If there's a hint of government overreach, the crypto army is like swinging elections, right? The 2024 election hung on the balance of huge individual support for crypto. juxtaposed that with AI. No one has exposure to this. Nobody has exposure. Why do I want the data center in my backyard if it's just going to make, you know, these venture capitalists richer? Right. Yeah. It's just expensive resource consuming slightly better Google. And if you think of it that way, of course, you're going to hate it. Yeah. Yeah. I think, and yeah, I think that's a big problem with people not having skin in the game, not rooting. If AI had, if there were more individual owners of these AI companies at the earliest stages, they would be defending it because it's, it's my AI company. Yeah. I wanted to do better. And I wanted to expand and to grow because I benefit and I have skin in the game. So yeah, that's why we care so much about Robinhood ventures and our efforts to get AI companies to even before they go public, give individual investors some skin in the game. And you know, it's exacerbated by the fact that private markets are getting flush with capital. And companies feel less of a need to go public until they're now in trillion dollar plus valuations. AI is only as useful as the context it has. But when that context is scattered across tools, threads and DMs, your team and your AI agents are flying blind. That's the problem. Jira by Atlassian solves what's the goal tied to your project? 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I use Framer to make the Sources Podcasts website be the destination for everywhere you can find the show, plus you can also see recent issues of my newsletter. Start building with agents for free today at framer.com/sources for 30% off a Framer Pro annual plan. Framer.com/sources rules and restrictions may apply. I'm curious how you're thinking about Anthropic and OpenAI and looking at those coming down the pike. Well, of course we see an opportunity because we have such a large retail customer base. We can very much be the voice of retail and help these companies at each stage in their life cycle, pre-IPO with Robinhood Ventures. Now we're an underwriter in IPOs. We announced Aura, which is the first IPO that we're underwriting. And the soon that's just the beginning, you want to do a lot more underwriting? Oh, yeah, yeah. We tend to be disruptive in the space too. The problem is too. Like a lot of these underwriters charge high fees, so I think we can be kind of like the retail distribution experts. How do you break that underwriting cabal, really, is what it is? Yeah, well, I mean, to be fair, there's some-- It's important. It's an important job. I mean, I'm not trying to downplay the importance of it, but yeah, yeah. There's actually some things that we're not really well positioned to do and we probably won't focus on, at least for the foreseeable future. So I don't think we have any particular competitive advantage going and getting a bunch of large bi-side institutions or sovereign wealth funds to be connected to the company as investors, like Goldman and JPMorgan, all these other guys, they're great at that. We don't have like private wealth to nearly the same degree, but what we do have is everyday people and large numbers that love investing in these companies, and so I think we can be the default retail option, and we can kind of represent retail as a part of the shareholder base. We also have really good data, the IPO process has been very, very manual. You sit down as a CEO and you're having the pricing discussion, where should we price this thing at? A lot of it is just finger in the air. I don't know, you know, Kathy Wood might not be willing to pay that price, and you want Kathy Wood, which is important to people, but what we give people is what we give issuers is just a precise demand curve at every price, which is data we get because everything is automated N10 for that offering. So through IPO access and underwriting, we can help companies at that stage, and even post IPO through our earnings and say shareholder products. We can kind of help them connect with their shareholders that way. Is there anything macro in the market that concerns you right now? I mean, the Fed just raised rates for the first time in three years. The 10-year treasury is near 5%, inflation concerns, you know, I think are still there. I think it's still elevated, and we've got these huge IPOs coming, and everything feels fragile. And midterms obviously, I'm curious how you're thinking about all these big factors right now. Yeah, I mean, a lot of people say, well, you've got the inflation rate at above, what is it, 3%, 2%, I grew up in communist Bulgaria, so I was born, I was born during the final swan song of communism in the late 80s, and 1991, which was my last year in Bulgaria, the inflation rate was 180%, right? So not quite there yet. Yeah, so that was rough, and you know, life went on. In 1997, which was a couple of years after I moved to the U.S., Bulgaria had the unfortunate distinction of the highest inflation rate in the world. It was in the thousands of percent, so it was literally, they were adding zeros, they couldn't print the bills fast enough, they needed more zeros in the bills. And I think it was very like you viscerally felt the fragility of the entire system. This is like nowhere remotely close to that, so yeah, and again, like the market, the macro This is rates go up, rates go down. I think we have a lot of tools in this country, a lot of great innovation. The fundamentals of the economy in America are quite strong, the ingredients are there. I have reasons to be more optimistic than pessimistic. So yeah, I feel pretty good now. I mean, you look at the center of the AI industry and we're striving so much of this innovation. It's still here, it's not in Europe. - Right, has moved to China. - And I do wonder how much we're maybe underwriting the deflationary aspect of AI and what that could unlock, right? Especially when you start getting into robotics and all these things in AI, doing more things in the physical world. - Yeah. - Cost of labor, all these things. Like we don't even really have a sense of that yet. - Well, and also you got a factor in that, you know, for a long time, we were just exporting our industry. - Yeah. - But now with AI, we're building data centers here, we're trying to really figure out as a country, how do we get more energy here? - Yeah. - Should we be building more nuclear and really taking advantage of that innovation? And I think those are actually long-term positive things because we have to figure out how to break the morass that got us stuck to a place where we couldn't build anything. And now there's just like huge momentum. Yeah, a lot of the things coming out of the administration have been very positive to one of the other things we've been working on as the Trump account. - That's right. - Robinhood does a lot of things. We're doing agentic trading. We have Robinhood ventures. We're doing the tokenization. All of it goes around this one idea, which I think is a very important one. It's ownership, right? And I think ownership of high quality financial assets is incredibly important, right? And not just important for the individual, in the sense of I can make more money, I have more skin in the game, secure my financial future. That's all great, but there's a societal benefit to it as well, which is that a society where more individuals or owners is a more stable society, right? People have a stake in the success of the industries around them. They have a stake in the success of the country. And so all of our products really ladder to this idea. Ownership of private markets, and that's Robinhood ventures. Ownership all over the world, that's tokenization. Trump accounts, one of the other things talking about the administration, ownership from birth. How do you get someone to be immediately plugged into our economy from age zero so that they have the largest benefit? They get to benefit for compounding for decades more than they would have under normal circumstances. So that's probably going to be one of the most consequential things that most consequential legacies of this administration, like this program, will survive hopefully in perpetuity and lead to a more stable investor base and a more stable- - I think you and Brad Gerstern, everyone who's involved in that, deserve a lot of credit for that. Yeah, I think it's, I do agree with you. And the administration obviously, but like, I'm glad that the companies in Silicon Valley and really stepped up with this and helped. And the app's great, right? It's a good experience. - I'm glad you like it. I mean, I think we take a large amount of pride and we have a little bit of a chip in our shoulder 'cause this is our way of like serving our country in a sense, right? And it's obviously, it's not like we're picking up, arms and going to battle, right? So I don't want to compare it to that, but the impact of what we do here could be generational. And also, the government is not known for building great products. In fact, we're all sort of like scarred to some degree by things like healthcare, non-gov. - The DMV, I mean, although I went to the DMV recently - You did? - In Redwood City. And I was like very impressed at how smooth it was. So - You went to the DMV? - I went to the DMV and then I realized, holy shit, I gotta up my game. I had this view that government was kind of in the stone age, but things have gotten very smooth. - The Redwood DMV's got it together. - I had to get my real ID and I went and stood in line and got my real ID really quickly. - Wow, okay, shout out. - Yeah, DMV, I did not expect that. - Yeah, so if you haven't been recently, I highly recommend it. Just try to pay your local DMV a visit and they're trying to get better too. - Okay, well we've been dancing around this and maybe we can land it here. And I can't believe we're actually just now getting to this. You've been saying tokenization throughout this conversation. I gotta ask, man, what you're stirring the pot with this. Like the AMC feud companies have been reacting very visceral to this. I think you all just - Well, there's one company. - One, but yeah, you had it on the private side a little bit, right? You had some reactions to that, open AI and others. And I think you all just notched a bit of a win as we were recording this a few days ago here in the US with the innovation exemption, right? Which starts to unlock the US a little bit. But I'm still trying to wrap my head around like, why are you pushing on this? Like why do we need to tokenize stocks? - Yeah, so the main reason is that it's actually really hard to get access to US stocks if you're overseas. And in some markets, it's relatively easy and they have robust local capital markets and exchanges. If you're in South America in a lot of places, it's just tough, right? And it was also tough to get dollars. For a while, you know, if you're in a South American country, for example, with a hyperinflating local currency, those people were buying American express travelers checks, right? And that's why stable coins became so popular. A lot of the usage of stable coins was overseas from people that just wanted a better, cheaper way to get access to US dollars because they would keep their money in it. So in the same way, a lot of people want access to US stocks. It's companies that they've heard of, got SpaceX, got Nvidia, so many others. And tokenization allows them to have access with actually some better properties, 24/7, fractionalizable so you can break up the token into little itty bitty chunks. You don't have to buy a full share. It can be in your wallet. So in particular, nobody can confiscate it from you. It's not in some local account, it's some financial system that maybe isn't as developed with as strong protections as we have here in the US. So in a sense, I think the companies will be very, very happy about this because it creates net new buying of their stock from a global market. Robinhood chain with our stock tokens are alive in over 120 countries where people probably wouldn't have been buying these US stocks. They don't really have an easy mechanism. So it just cracks that wide open and opens up an entirely new pool, capital pool of buyers that didn't exist before. - But then you've got the AMCIO and others pushing back. And I do think there's a fair pushback that, I don't know, you've got an aspect. - Well, but you kind of saw he reversed, yes, right? - Well, yeah, sure. - But I think a lot of the AMC thing, you have to take into account that there's like meme activity. We have a little bit of a history with AMC dating back to 2021 that's a little bit idiosyncratic. So I'm actually not sure how much of it is confusion about what tokenization exactly is because this is like a complicated new technology. And you can imagine, best case here, I'm running my business. Why do I have to deal with like changing technologies around capital markets? It's like not high on my list. They're trying to sell movie tickets in popcorn, right? Or also how much of it is just, you know, appealing to a retail base that, you know, gets excited when there's just people fighting. - Yeah, but the, I think the fair pushback I've heard is devoting, how do you solve the governance aspect of not actually owning the stock? - Oh yeah, I mean, we have a solution for that. We announced that we intend to add voting. The reality too is not a lot of people vote there. - No, they don't. If you're-- - I think it's like, it's a nice box check to you. Like, I actually have it. I actually have exposure that way. - If you're in like Venezuela and you're looking to, you know, get exposure to US stocks, voting's nice, but it's probably not the higher order bit, you know? So I think, yeah, you can find all sorts of little nitpicks. People had this about electronic trading of stocks as well. They're like, well, I don't get the real certificate. It's really nice to have the real certificate. That's a real share. What is the seed and company thing? It's not even in my name, it's in street name. So all of these same criticisms actually landed when stocks started being traded and brokered electronics, right? Rather than physical certificates. So I think the cat's out of the bag. Like, this is not reversible. Now it's just a question of, how do we make all of these issuers and stakeholders and, you know, the exchanges in the US comfortable? - Yeah. - How do we make them feel that this is good for them and understand because actually, if you look at this, if you're an issuer, like a AMC or others, it's basically all upside next to no downward. side. So it's just very clear that it's going to be a thing and it's innovation and change is never just uniformly accepted, but it's also inevitable. So yeah, and we're working with all the stakeholders to make sure everyone's kind of brought along, but yeah, it's happening. So yeah, and now the SEC is behind tokenization. And part of the reason we actually started with Europe and when we were in our event in South of France, we said, we want to deliver great products for our international customers. Like that's where immediately adding value, we're shipping product. We don't want to just like talk about tokenization. Some people like to talk about it. It's kind of become a buzz word and they have interviews and stuff like that. We ship. We want to ship real product, put it in people's hands, and that's really the most persuasive thing. Yeah, I could tell you tokenization is the future, but maybe you won't believe me. How about I ship it? People use it. We see a demonstrating value. And if it adds value to these customers outside the US, maybe that also demonstrates to folks here that we should adopt this technology and figure out a path for it to work in these markets. And I think that's basically what's happened. I mean, we kind of called our shot many years ago and we're doing what we can to kind of push the industry forward, not just overseas, but here as well. And I'll tell you the future, it's going to happen every asset, private markets coming. You'll be able to have tokenization of privates. It's an inevitability. We'll have any wealthy person's asset base of tokenization of wine, of real estate, right? It'll all trade 24/7 on permissionless networks like a stock. Yeah, and I think it'll be really cool. I mean, from a technical perspective, it's interesting, but yeah, for someone building a portfolio overseas to have low cost access to any asset that a high net worth individual here in the US would be able to have. I wanted to check in with you on the state of prediction markets, especially going into the midterms. I think you've got call she and polymarket kind of battling out in the court of perception and Robinhood is a huge player. And you've been very bullish on prediction markets as we've talked about this in the past, the future news. You were the first person I actually ever heard that said that, like I think of this as the future of news. What are you expecting kind of especially? I think the midterms will be a big moment. Every big election is. But how are you gearing up and how are you thinking about that category over the next several months? Well, we're building a great prediction markets in the Robinhood app. And we've done a lot of stuff on the infrastructure side too, but as a customer, as a user in the Robinhood app, it's gotten way better. And now we have bespoke experiences and hubs for all the major categories. World Cup. We had a really nice World Cup experience where we had all the information in one place, golden boot winner, goal scorer, we had the different groups. Midterms, there's like a really nice native map experience where if you're trading, it's obviously useful and easy. But also if you just wanted to see like how are the midterms going? Who's going to win the state of Indiana? And yeah, we have a nice experience there. So it's constantly the amount of work that we have to do to improve the product and improve the infrastructure is never ending, right? And we're seeing new types of categories come up. Crypto markets have been very, very popular. And so increasingly, we're starting to see connections and synergies between our prediction markets offerings and different assets like crypto and we'll start to see more with stocks as well. You're seeing the maturation of the industry into a true tradable asset class and with like a huge retail component. Are you not even going to have the TV on this midterm in terms of trying to follow things? Are you just going to be? I don't think I'm going to have the TV on very much. Yeah, yeah. I think it's gone away. Yeah. The concept that we're already moving away from that. Yeah, I mean, I just realized even aside from prediction markets and following the elections, I think a big moment to me where I was like, wow, things things are changing is when I was trying to watch the NBA playoffs a couple of months ago. And I'm used to just switching the channels or it will be on ABC or ESPN. Where's this game? I can't find it. And then I went and I asked my AI agent, which my personal AI agent, it's like, oh, you got to go to Amazon Prime. I'm like, man, okay, when the NBA playoffs are hitting Amazon Prime, I think I think it's the end of the line for linear cable. I still have mine, but yeah, I feel like it's going to be like a landline phone before too long. I agree. Last question, I fortuitously had the chance to catch up with Tudor, your co-founder, your AI lab, Harmonic, which is doing a lot of really interesting stuff and approaching it from the view of math, building foundational models. And I won't spoil what's coming, but he gave me a season. It's very interesting. He gave me a question to ask you. Great. Yeah. He said, what do you think of AI companies using their platform to solve math versus giving the tools to everyone else to do it? Oh, gosh, what a softball to me. I love that question. I was going to bring this up proactively. So we talked a lot about one of the problems being that normal people just don't have access to invest in these companies. And that's led to all these negative effects where the AI leaders are like, why is everyone mad at me? I'm just running my business. Well, I mean, your shareholder base through no fault of your own, but some of them actually open AI, great example. They partnered with us and made investing available for individuals. But yeah, most people don't really think about this. And most people are very much thinking about, all right, how do I grow my business as fast and big as possible and beat my competitors, right? But with something like AI, you have to understand that you have to have a license to operate at the end of the day. If the people are against your technology and your company, it's going to be very, very difficult. And I think one thing that is just a miss, frankly, is, and I can kind of see how they got there is AI companies keeping these advanced models in-house and just making the discoveries. Their employees running them to make discoveries. And I just solved a millennium problem and all of that. Yeah. Like, I think the future where there's just these giant data centers in people's neighborhoods that are just running workloads from the employees of the AI companies. And the AI companies are making all the discoveries and creating all the inventions. And oh, maybe they're creating the drugs and producing them, right? That's like a very centralized, almost dystopian future. And I think for a multitude of reasons, it's the less likely future. I think the more the more inspiring one is building the tools so that normal people get access to them. So I think it would have been a much better outcome if it was a mathematician that was using the OpenAI model that was coming up with these discoveries and not just employees running it and spending what it was, tens of millions in compute. So yeah, I think that's the future I believe in. And that's I think the more likely one. Well, thank you for your time. Appreciate it. All right. Always a pleasure. Banking should feel like modern software. Get everything you need in one place. Visit mercury.com to learn more and apply online in minutes. Mercury's a fintech, not a bank, check the show notes for details. Granola is the best AI notepad I've tried. It works everywhere. On a video or phone call in person or an Apple Watch. Try it now at granola.ai/sources and use the promo code sources at checkout for three months off. 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