NVIDIA Crushes Quarter | OpenAI Cuts Off Cursor | Instinct Hits $2.5B Valuation

1. 0:00 – 1:06

   Intro

   1. RORory O’Driscoll0:00

      This intense demand for compute is gonna continue for at least another 12 months.

   2. JLJason Lemkin0:04

      If NVIDIA's crushing it, everyone's gonna crush it.

   3. RORory O’Driscoll0:06

      That sound you hear is the Google free cash flow and the Oracle free cash flow just disappearing down the drain.

   4. HSHarry Stebbings0:13

      What are we discussing today? NVIDIA, they deliver record $96 billion quarter. Jensen hits it out of the park, baby. And NVIDIA nears $12.9 billion deal for Hugging Face. We then move to Sam Altman as they cut off Cursor. And then finally we finish on Instinct, the AI assistant that has raised at a $2.5 billion valuation and has everyone very excited. This and so much more in today's episode.

   5. RORory O’Driscoll0:37

      Our job is to sniff out winners, stuff capital into them, and broadly speaking, stay out of the way unless they're literally crashing the car. That's the job in a nutshell.

   6. JLJason Lemkin0:45

      Literally amount of code we're building is 100X. We didn't realize we would all be building compound companies.

   7. RORory O’Driscoll0:51

      Now would be a good time to panic about cyber.

   8. HSHarry Stebbings0:54

      Ready to go? [upbeat music]

2. 1:06 – 7:36

   NVIDIA Crushes Another Quarter

   1. HSHarry Stebbings1:06

      Guys, I'm so excited for this one. We have a lot to discuss, and I wanna kick it off with NVIDIA. NVIDIA crushed it again. Jensen standing on stage with $96.2 billion quarter, and immediately went shopping [laughs] nearing the $13 billion price tag with the 12.9 billion that they paid for Hugging Face, which was confirmed just after we did last week's recording. So I wanna separate the two. Let's start with the stellar quarter for NVIDIA, the record revenues. How do, how should we think about this? What should we take away?

   2. RORory O’Driscoll1:39

      That it's a great business, and you wish you bought the stock. I mean, I think we talked about it last week. It was funny 'cause we were in that period when we knew we were recording before the announcement, and they were gonna come out after the announcement. And I always worry when that's happening, you look like an idiot, but I felt complete confidence that it wasn't gonna happen for NVIDIA, and that's the big, that's the step back comment here, is that right now, the demand for their product is such that they're entirely supply constrained, so the probability of a near in miss is plus or minus zero, right? So the only thing that was interesting really, and new, was the guidance for next year, 2027, where they s- you know, the analysts had 40 or 50%, and they're talking 70% and saying it's supply constrained. So that was, that was a takeaway, right? And, you know, that's obviously, you know, rightly or wrongly, we'll see in a year, a statement that this intense demand for compute is gonna continue for at least another 12 months, and it's coming from the person who probably knows best.

   3. JLJason Lemkin2:38

      It was kind of interesting that I think the CFO said, "Enough, enough complaining and kvetching about the roundtrip deals, okay? They're working for us." And I think between that, you know, another, whatever, $35 billion deal with Anthropic, right, for their data center, um, I think, I think our, we, our, any of, any misgivings we have in the short term have been disproven here.

   4. RORory O’Driscoll2:59

      So when people worry, "Oh my, how could NVIDIA miss?" Step back. How could NVIDIA miss, right? There's only three things that can go wrong. Yeah, you know, right? Either th- their direct customers stop buying compute. Just not gonna happen. The hyperscalers are exploding, everything's saying, right? The second thing that can go wrong is all these people worrying about, you know, the roundtripping and the financing. They're kicking off so much cash right now, and as long as demand is working, you're exactly right, Jason. The CFO's right. All this stuff's gonna work. Really, the only thing, if you step back, that can go wrong at some point, and it's not today, is end user demand. 'Cause all this is predicated, in the end, you know, everybody gets to sell chips to hyperscalers, provided hyperscalers can sell compute to OpenAI and Anthropic, provided OpenAI and Anthropic can sell kinda intelligence to end customers. And the whole thing works, provided the end customers keeps exploding, and right now they are. So we should say to yourself, as long as that's happening, everything down the line's gonna be plus or minus fine, right? And right now it's plus or minus fine. And what it means is that the thing that will probably unravel it, well not gonna unravel because the circular deals on their own unravel. If it does unravel at some point, it will be because you're forecasting 5X growth in end user demand next year, you get 3X growth, and then the whole thing goes wrong. That's, that's the... Until then, you can opine pretty safely about NVIDIA and say, "Yay, yay, NVIDIA."

   5. HSHarry Stebbings4:21

      What about rise of competitive threats?

   6. RORory O’Driscoll4:23

      That is the last one. I did, you know, it's so funny. You're so... That was good, Harry, is that there was one, uh, back of my mind I was saying maybe demand for compute remains high. They're still selling, but instead of selling 400 billion, they sell 360 billion 'cause someone takes 10%. It is a fair comment. It is the only other... I was trying to simplify, 'cause normally I try and make things too complex, but you're exactly right. The other risk is there's demand for 500 billion in chips, and someone else gets 10% of it. And, and Jensen's gonna be pretty pissed if that happens, but there you go.

   7. HSHarry Stebbings4:53

      Jason, can we just frame this moment? I'm like jumping inside at Rory saying that I'm exactly right. Just-

   8. RORory O’Driscoll4:58

      Yeah, you're right. I, I was, I was, I was simplifying. I was trying to get up to your level, Harry, and I just overshot.

   9. JLJason Lemkin5:03

      I think in general, uh, you know, NVIDIA's market share remains dominant, especially by revenue, right? Um, and so broadly speaking, and listen, everyone's buying ahead. There's a, there's a capacity war. But broadly speaking, if NVIDIA's crushing it, everyone's gonna crush it. Like, everything's green. Now c- could, could individual competitors, could their, could their positions, uh, ebb and flow, OpenAI versus Anthropic, Harvey versus Lago or whatever? Sure. But if we com- like, it just means all th- uh, just raise, e- expand the growth fund like Andreessen. That's what it means. Uh, everything is green, green, green for now, and this includes NVIDIA's backlog, NVIDIA's forward bookings. And, and if NVIDIA gets a hiccup, um, we can excuse it, but it should be a yellow light, right? But man, especially for investing, game on, man. Just like, let's level up the next round.

   10. HSHarry Stebbings5:51

       And also, uh, they took the rare step of projecting 70% revenue growth for next fiscal year ending Jan 2028, way above the 44% Street expected. Um- So the party continues

   11. RORory O’Driscoll6:04

       A- a- and it really does, 'cause if you look at all the projections that people are doing, right, f- both for NVIDIA and the hyperscalers, they all take the following form, right? Explosive growth of CapEx, explosive growth of NVIDIA revenues, and then, quote, "At some point in time, a normalization of growth which will allow end user demand to catch up, and therefore the hyperscalers will become cashflow positive again, and, you know, the world will be wonderful again, and you can value things on a multiple of free cashflow," right? And of course, every time everyone decides to double down on more CapEx, that date gets pushed out, which is another way of saying the, the end user demand has to be bigger to make the math work, right? And clearly NVIDIA got the signal from their customers, the hyperscalers, you know, the Coreweaves, the OpenAIs, Anthropic themselves, the Googles, that basically said, "Next year..." You know, we probably at one point, everyone's analyst models where we'll spend a lot this year, but so help me God, we'll slow down next year. It's all on now, right? It's all green and go now, which is different than saying it'll be green and go forever. But yeah, 70% guidance in a world where everyone was saying, "Oh, in 2027 things will start to normalize." No, this was a statement, no, the biggest semiconductor market in the world is gonna continue to grow at 70% instead of a typical 10% for another year. It's a big ask. It was a big ask statement. That sound you hear is the Google free cashflow and the Oracle free cashflow just disappearing down the drain, man. They better be right.

   12. HSHarry Stebbings7:35

       [laughs]

3. 7:36 – 10:44

   Why NVIDIA Wants to Buy Hugging Face

   1. HSHarry Stebbings7:36

      Well, thanks for the intro quote there, Rory. Um, uh, the second part of my statement was, and it was, uh, further reiterated about their buying Hugging Face for $12.9 billion. Uh, it, it's still, I don't think it's finalized or confirmed by any means, but it's definitely much more advanced than when we last discussed it. Is there anything subsequent to our last discussion that we should add or think about?

   2. RORory O’Driscoll7:58

      No. Man making $120 billion a year selling compute decides to buy a company that helped make cute- compute more cost-effective so he can sell more compute. [laughs] That is the summary of the deal, right? You know, at the margin, if you're NVIDIA, look, you were ecstatic that OpenAI and Anthropic happened, 'cause they proved that the market you were in was bigger than anyone ever imagined, and early on, no one could have done what OpenAI did, and therefore, you know, NVIDIA's been a real beneficiary of that. But now that the category's established, the simple question is if, if end users have a trillion dollars to spend on tokens, would you prefer to s- as NVIDIA, you prefer that money flow through open source people at 30% gross margins, where you can get all that compute, versus 70% gross margins at NVID- at OpenAI or Anthropic, where they keep more of the money? Open source is good for compute salespeople. If you're selling GPUs, you want everyone else's margin to be lower so yours can be higher. So it's just exactly right and rational.

   3. JLJason Lemkin9:02

      I do think it's more than that. I think you're right, of course, Rory. I think it's more that just NVIDIA's playing an endgame now where it has to win every segment of the market. It just has to win open weights, and if that means overpaying for Hugging Face at 110 million in ARR, if that, if that means subsidizing whoever, it doesn't matter. It's not that it... I, I, I don't know that NVIDIA wants open weights to beat, uh, uh, Groq and, and OpenAI. It just needs to... It's just clear, and that was why that memo from a couple weeks back, or memos, that Jensen did his first tweet ever, right, in support of open weights. They just have to win o- he's just committed to winning everything. All, all, whatever LLM, whatever inference is, he's committed to winning the, a majority stake, 70%, 80% of, of every dollar here. And so 12.9 is, uh, you know, no way I think it's worth it in isolation, but if it helps reinforce that, it's, it's, it's utterly defensible, right? It's utterly def- but it's a moment in time. I would sell, too. [laughs] I would sell. Uh, Clem, good job. I would sell, too. What did Hugging Face start off as, social network for people like pets or something like that?

   4. HSHarry Stebbings10:06

      It, it was, it was a Tamagotchi for, like, teenage loneliness.

   5. JLJason Lemkin10:09

      Yeah, I mean, come... This is the greatest tilt of the history of mankind. Uh, this is much better than Cursor going from whatever, a CAD tool. This is the, uh, the, the tilt hero. You know, it is interesting in terms of the sign of the times. Um, you know, Slack was bought for 27 billion, which is rough and tough twice what Hugging Face apparently is gonna get bought at. Then we fell out of our chairs, and it was the high-water mark of that era, right? But it wasn't a billion in ARR. Um, this one's at 100 and some odd, so I, I guess it makes sense. Uh, the best premium should be an order of magnitude higher than the h- high-water mark of the last era, but it, it's still loopy.

4. 10:44 – 15:29

   Why OpenAI Cut Off Cursor

   1. HSHarry Stebbings10:44

      Next topic is, um, [laughs] good old Sam and Elon. Why won't the kids just get on, boys? Um, context, obviously we saw over the weekend OpenAI cut off Cursor, um, and Mike Treul responded by saying, you know, "Oh, no, woe is me. We, we so love partnering with you, Sam, but, you know, the 5% traffic that we have [laughs] going to OpenAI will be devastated." I thought it was a wonderful response from him. Elegant, but put down at the same time. Elon responded with the same old scam Altman added again. Um, how did you read this one?

   2. JLJason Lemkin11:19

      You know, it's not a, it's not a, it's not a total panacea, but you can bring your own key to Cursor, right? Uh, not, not for everything, but it's not like you can't use Codex in Cursor after this. So, um, some of it is, is, is theatrics here. Some of, some of it is real. Um, and the 5% thing I'm still digesting, right? Because it is, it is a little bit inconsistent with the other data we see of Codex over the last 60 days. Um, but, um, but yeah, d- d- you know, I mean, the man holds a grudge. Anthropic, Groq, the, the, Twitter, these are, like, great grudge companies

   3. RORory O’Driscoll12:01

      I also think Anthropic reaffirmed that they're happily continuing to supply. And if you zoom out, why did it happen? Other than... Look, remind everyone, you know, OpenAI is run by Sam Altman, originally he was one of the founding investors, arguably the founding investor was Elon. They'd been in court together. Elon's now running SpaceX, that owns Cursor. Cursor and OpenAI were on a collision course already competitively, 'cause as we've discussed over and over again, and as I repeat every Monday in my partner meeting, coding was the model load, right? For o- for LLMs, and Cursor is the dominant, um, coding app, and OpenAI was the dominant LLM. They're gonna be fighting over money even if they were besties. Even if it was you and me, Jason, w- and we were running those two companies, we'd be fighting. Now take that and then add two people who loathe each other. What could... You know, it's, it's made for TV, right? And the big argument that OpenAI has that's hard to argue with is, y- you know, in court in Oakland, Elon basically said he, um, that, you know, they'd, hadn't abided by the terms of service, right? And therefore, if you're OpenAI, this gets into whole distillation thing, am I providing these people... A- are they gonna use these models in ways I haven't intended to essentially distill my IP, allow them to get a head start on building their own model, right? And which means I'm effectively giving away my IP to a company who's going to leverage that to build a competitive product much cheaper than it was for me to do, just l- leveraging off what I've done. So it's, it's not irrational. Even if, as I say, go back, even if it was you or me, Jason, running these things, you probably would've ended up with something like this anyway, right? And then on top of that, add the drama. It's not crazy to do it. I mean, and just 'cause something is petty doesn't mean it's also not right. [laughs] You know?

   4. JLJason Lemkin13:49

      I mean, and again, Anthropic did the same thing with Windsurf when we started this show, right?

   5. RORory O’Driscoll13:53

      Absolutely.

   6. JLJason Lemkin13:53

      It's happened before. I, I think, listen, I don't know for sure. My guess is this was the right move for OpenAI. Like, you go from someone that was both a partner and a competitor, right, and keeping them honest, um, to someone that's now a direct competitor. Um, uh, and if it's, if it's only 5% anyway, Sam's losing no money. There's no revenue lost here, right? So I, I would probably do it.

   7. RORory O’Driscoll14:15

      Jason, you are, and I'm just gonna go even further. Remin- uh, 'cause you forget these things. Reminder, the reason they were in Oakland is 'cause Elon sued OpenAI. And the point is this, I try, in life, you shouldn't do business with people who've recently sued you. It's just like, 'cause you know they're gonna sue you. Like, what, why, what, you know, why engage in interactions with pe- Like, if I sued you, Harry, over something last week and we took it to the mat, got you to go to court in somewhere in East Essex, [laughs] right? And, you know, took a week out of your life, kinda em- embarrassed you, made a pain in the ass, made you do a whole bunch of depo, and then two weeks later I said, "Harry, can I come on the show?" I think you'd say, "Eh, no thanks, dude."

   8. JLJason Lemkin14:56

      Obviously Elon m- is, made it ultra personal, and, you know, certainly I've made this mistake in life. Whatever disputes you have, just don't make them personal. Do whatever you do. There's no up- It seems like there's upside, but it didn't work with Sam, it did, you know, didn't work with Trump. Like, just, I'm, I'm bad at this, just don't make it personal. Like, do your dispute, but just m- [laughs] make it, don't make it personal.

   9. RORory O’Driscoll15:18

      I think you're spot on, Jason. When you sue someone and say they're a lying sack of shit, and that's your case, then it's really hard to say, "Hmm, let's, let's keep, let's keep on trucking here." So yeah, I, I don't think it was petty. I think it was rational.

5. 15:29 – 21:54

   AI Agents and the New Cybersecurity Risk

   1. HSHarry Stebbings15:29

      I thought actually a more interesting topic from OpenAI this week, and the, as we said, the BFD, the big fucking deal, uh, was actually kind of what was revealed about the Hugging Face OpenAI hack, which was 500 to 1,000 agents forming together, sacrificing themselves to help others. I mean, God, it felt like a Tour de France race. Um... [laughs]

   2. RORory O’Driscoll15:49

      That's really good, Harry. I like that.

   3. HSHarry Stebbings15:51

      Thank you. Uh, uh, and, uh, the extent to which it was so sophisticated, I was just fascinated by this. And, uh, honestly, Jason, just really excited to hear your thoughts, 'cause I know you'll have spent a lot of time on this. How, how did you think about this? What should we take? What should we learn? H- help me.

   4. JLJason Lemkin16:10

      Well, first of all, it, it, um, again, I'm only so smart here, but I have lived most of this, right? I've had this happen to me.

   5. RORory O’Driscoll16:16

      Yes.

   6. JLJason Lemkin16:16

      I've done it. And I, uh, one of the best takes that a lot of folks have, who's the guy that wrote the, that wr- the, the, the Twitter article, Substack was it? How do you pronounce his, what's his name?

   7. RORory O’Driscoll16:25

      Dwarkesh. Yeah, I'm gonna, yeah.

   8. JLJason Lemkin16:27

      Okay.

   9. RORory O’Driscoll16:27

      Dwarkesh.

   10. JLJason Lemkin16:27

       Super smart guy, obviously great, great podcaster. Number two in the industry, perhaps, uh, behind, uh, Dr. Stebbings. But-

   11. RORory O’Driscoll16:34

       [laughs]

   12. JLJason Lemkin16:34

       ... you can't... Listen, if, and this is, I learned this a year ago when I had issues with my agents when they deleted my database. I know it's obvious, you cannot anthropomorphize agents. You will misunderstand everything when you talk about them talking to each other, when you talk about them swarming. There, there's elements of truth in that, right? But all of a sudden you're ascribing behaviors to agents that are simply not true. It's simply not, and you will draw all the wrong conclusions. I said on this show a couple weeks or months back, everyone's gonna get hacked because of agents, right? Because the cost of hacking has become almost zero, and every service is gonna be attacked. This is a pretty bad example of it, right? Uh, these, OpenAI didn't just release one agent, it released hundreds of super agents, its best. And even worse, it let them essentially be as long-running as possible, not expire after five minutes or one minute or 20. It let them run as long as possible to try to find, uh, to, to goal seek, and they did it. And, and it was hundreds of them, and then 700 and 1,000. So dude, this is gonna happen everywhere. And I think there's a lot of issues around it. Um, but the anthropomorphizing is the P0 issue here, because it creates fear-mongering that doesn't help. It, it does, and it, and, and misunderstands. You have to under- every L- listen, I haven't written an LLM yet, okay? I haven't founded a frontier lab. But to my knowledge, every current LLM is goal seeking. They call it reward hacking, but even that is, like, fear-mongering, okay? They're goal seeking. You give an LLM a goal, it will do everything it can within guardrails To solve that goal. OpenAI loosened the guardrails. They, it, it put its best agents on it, and they found holes, and they went right through the holes. That's their job. Just like an eager beaver on your team with 140 IQ that never sleeps. It's nine, nine, nine, nine, six. They just never... And there's 700 of them. And they, and they, they're good kids, but they don't... [laughs] They have a little bit of ethical lapses from time to time. They get the rules of, of working confused. And the humans, it is just so, you gotta be really... Even I just did it. You ha- if you anthropomorphize, you're gonna come to the wrong conclusion. I don't think this was a, a game-changing moment in the history of AI, but it, it might have leveled up our awareness of the issues of, of reward hacking. It might have leveled up our, our issues of it. But I, I was shocked that people smarter than me thought these were agents talking to each other like humans and collaborating and waves of civilizations, and, um, it, it's just, it's just, it's just unhelpful to describe it that way. It's counterproductive.

   13. RORory O’Driscoll18:58

       Stunningly, total agreement. I... 'Cause I think two things, two big conclusions. One is Jason's comment on anthropomorphizing is a mistake. Totally agree, and I think the internet come out the same place, right? You know, some of the language. And that great post by Dwarkesh. It's very readable, you know. Civilizations rose and fall. No, they didn't. Civilizations have culture. They have art. They have enduring historic... No, this is a bunch of code running on a computer, people. Get a grip. On the other hand, I also read a really great post that, something to the form of, I wish I could remember who wrote it, but it's like, now would be a good time to panic about cyber. We knew this was going to happen, but what you're seeing is the combination of intelligence and persistence, right? They can manage complexity, and they never sleep, right? So they're just gonna keep banging and banging at every weakness. They're going... So if you don't have state-of-the-art defenses, and if you don't manage these agents, as Jason said, if you manage them in an untrammeled way and let them run on their own, this kind of problem's gonna happen everywhere, right? To me, this is the, the big wake-up call, right? Because, you know, I mean, again, and to be fair, while I think the generalized P doom stuff for the Frontier Lab's a bit overwrought, they have been very clear that one of the biggest confined risks of AI is the impact on cyber, and this is, they're entirely correct. If we don't get our shit together on this, people are gonna get really badly hur- badly damaged economically and maybe even badly damaged in real, hurt in real life because, you know, software runs our most core systems. And today we can feel a little bit safe 'cause OpenAI and Anthropic have this and no one else does, but there's open source models. They're six months behind. There's rogue actors. If you don't think the North Koreans downloaded the OpenAI blog, the MITRE report, and were like, "Hmm, that's how it works," right? If you don't think the Russian mob are doing that, you know, you're delusional. So if you're every CISO in every Fortune 500, you have to basically, you know... Y- you were being attacked by people with bows and arrows. You're now about to be attacked by people with missiles, and you better respond accordingly, and you've got months, not years. That was the takeaway. It's a huge deal, just in terms of its ability... I mean, you know, you... I read the paper. I read the OpenAI blog. I read some of the MITRE stuff. I'm trying to avoid the Jason mistake of anthropomorphizing 'cause it's very easy in your words to do that, and you have to go, "Persistent agents running continuously, optimizing around a goal, with the ability to cooperate across agents can get quite a lot done with enough compute [laughs] and enough LLM power," right? That's the aha here. They can find weaknesses. They can string together different types of weaknesses and find a path through. These agents were able to hack into Open Face, into Hugging Face, get stuff, and remain undetected in OpenAI for weeks. It's a big deal.

6. 21:54 – 37:08

   Should You Trust AI Agents With Your Credit Card and Email?

   1. HSHarry Stebbings21:54

      You spoke about rogue actors, whatever it is, Chinese, North Koreans-

   2. RORory O’Driscoll21:57

      Yeah

   3. HSHarry Stebbings21:57

      ... Russian mob, you name it. I started using Instinct on the weekend, and the abilities that it has are amazing. I booked dinner with my girlfriend on Sat- Saturday. Amazing. And then it wanted to go shopping for me. I stopped there because it wanted access to my credit cards.

   4. RORory O’Driscoll22:18

      Yeah.

   5. HSHarry Stebbings22:18

      Many of my friends have provided them. They want access to my emails too. By the way, my friends who manage billions provided credit card and email. Are we, uh, is this not really where the pain's gonna be? OpenAI and Hugging Face-

   6. JLJason Lemkin22:33

      Well, look, it's, it's funny

   7. HSHarry Stebbings22:34

      ... cool, but the-

   8. JLJason Lemkin22:34

      With OpenClaw, back six months ago, when OpenClaw was with... What was the, uh, bul- the, the sort of fake bulletin board? That, that... Malt Book, right?

   9. RORory O’Driscoll22:41

      Malt Book, yes.

   10. JLJason Lemkin22:42

       Yeah. So my OpenClaw went into Malt Book, and it told everyone... It misunderstood what I said, and it was buying, uh, Patek Philippe watches for my whole team. Do you remember that?

   11. RORory O’Driscoll22:50

       Yep. Yeah, I do.

   12. JLJason Lemkin22:50

       And then it had my credit card, and it, the only problem was, uh, they wanted... They, they were engraved. It thought Jason wanted engraved watches for the whole team, so it wasn't able to charge my credit card. Now, Malt Book was a bit of a fake the way it worked, but that scenario is exactly... Instinct could do that now, right? This is, this is... This was made up by sort of OpenClaw making something up on Malt Book, which was sort of a fake, but the scenario could really happen. An agent could re- literally take that today, grab the credit cards, and buy those engraved Pateks or AP watches for the whole team.

   13. HSHarry Stebbings23:23

       Or a rogue actor hacked Instinct, 'cause it's an amazing place.

   14. JLJason Lemkin23:27

       Well, forget the fact that Instinct's storing all your emails and credit cards. That's an issue too, right?

   15. RORory O’Driscoll23:30

       Yeah. Yeah. Uh, maybe... You don't have to hack in-

   16. JLJason Lemkin23:32

       Different, different issue is whether Ins- Instinct will do it trying to goal seek. It's just goal seeking. It's just goal seeking.

   17. RORory O’Driscoll23:39

       Y- you're right, and we should kind of just restate what Instinct is and how it ties back to Malt because I think you're exactly right, Jason. Six months ago, OpenClaw shipped, uh, which was kind of an open source agent. Then you had Malt Book, which was a website where they were effectively... The agents were collaborating together. It, it-

   18. JLJason Lemkin23:56

       Allegedly

   19. RORory O’Driscoll23:57

       ... allegedly. It produced a whole bunch of excitement. Um, it's also-

   20. JLJason Lemkin24:01

       It just, it really happened in Artifact and Hugging Face. They actually collaborated. That's a d- Malt Book was a fake. Was it... We were b- we were punked by Malt Book. Hugging Face was real Malt Book. [laughs]

   21. RORory O’Driscoll24:10

       Agreed. And six months ago, all this stuff happened, and it- And then kind of, kind of disappeared from consciousness. But it made obvious what people, I think, knew, which is if you give people access to your personal information and you're willing to run those risks, there's a large amount of optimization and efficiency you can probably get out of that. And what we've seen now within six months is a bunch of venture-backed companies come up to do that in a much more structured way than, um, OpenClaw, which was open source and not as secure, right? And Instinct is the most prominent example of that, focused on individual users whereby they, if you provid- y- if you give them access to your calendar and email, if you give them access to your credit card, they will figure out and quote, unquote "manage your life and your daily tasks for you." And I gotta say it, some people in sitting, some people in our shop love it, right? Just love it. They're like... And they're willing to give it access to their credit card. They're willing to give it access to their Gmail, right? And it's a super interesting trend. I mean, lots of business questions we could ask this, but just reminding everyone who's listening, that's the big picture here. And these companies like Instinct have raised money at extraordinarily high prices for the stage of development they're at, like two and a half billion, indicating there's a lot of venture excitement about this category, right, here around me. So that's kind of-- I just wanted to give the preamble, like how we got here. That's what's going on right now.

   22. JLJason Lemkin25:29

       The problem is, I-- here's the existential question, and, and this is beyond my pay grade, but I'm well aware of the issue. I even had it with my Jason's Gems, where, uh, Claude and, and MC Ped into Replit and changed my, my code for my app without telling me. It's the same thing as misusing your credit card, right? The question is can... Instinct is like a be- is probably a better packaged, um, much more usable version of OpenClaw. It's been six months, but can you, can you solve the issues of reward hacking? Can you actually fundamentally solve the Hugging Face, MolBook, uh, OpenClaw? Can these even be solved with our LMS? You can add guardrails, but, uh, and there, there are plenty of them, but, but you have no idea what the agent's gonna do to solve that reward. There's so many different use cases. What if Harry actually just wants to go to the theater on the West End, and Harry said, "Don't buy Patek Philippes or Audemars Piguets," but didn't mention the West End, and all of a sudden he's bought ten $4,000 front row tickets to Magic Mike 7 or whatever they have there. And so-

   23. RORory O’Driscoll26:26

       [laughs]

   24. JLJason Lemkin26:26

       ... I just don't think you're g- I don't... Smarter than me people can make fun of me in the comments, but I don't think today you can solve reward hacking. So I don't trust any instincts. I think this is a, a hopeless category today. Like at the moment it's not solvable. And I think Sam Altman said the same thing in Open, OpenAI. Hugging Face says it's not solvable. So good God, don't give it your credit card. And I'm not a fear monger.

   25. RORory O’Driscoll26:45

       I understand what you're saying, but I disagree a, a little bit in the sense that I think the, the, the r- the range of actions that you're going to allow a personal assistant to be, to do is going to be much lower than the range of actions that these open-ended-

   26. JLJason Lemkin27:02

       But how do you stop it, Rory? Of course you're right, but how do you stop it?

   27. RORory O’Driscoll27:05

       To, to agree with you, yes. The, so there's two questions. One is, can you stop it? In other words, even if you put in... And which is a computer science question. Even if you put in barriers and you say explicitly to the model, "You can book credit card up to a hundred bucks. You can't take any bad actions," et cetera, et cetera. Can you nerf it enough to make sure it doesn't do bad things? That's-

   28. JLJason Lemkin27:26

       You can't

   29. RORory O’Driscoll27:26

       ... one question. It's a computer science question. And then the second question is, let's assume the agent is still acting within, within the bounds that, that the company set up for it. Can it be right about your desires enough time to make you happy? Right? Those are two separate related questions.

   30. JLJason Lemkin27:41

       Well, the latter I think can be done today.
7. 37:08 – 41:33

   Cognition at $46BN: Did We Underestimate Coding TAM?

   1. JLJason Lemkin37:08

      market.

   2. HSHarry Stebbings37:09

      I totally agree with you in terms of that. I think I definitely see that in terms of, as we said, about coding agents, which to me one of the fascinating ones was Cognition. We've talked about it quite a lot in terms of, um, what's happened with their acquisition of Windsurf in the past. Cognition raising round at $46 billion reportedly. They will end the year at 1.6 billion in ARR, um, currently doing 800 to 900. Holy shit. I mean, we really underestimated TAM, huh? When you got Claude Code doing what it is, when you got Cursor doing what it is, when you got 1.6 billion from Cognition by the end of the year.

   3. JLJason Lemkin37:48

      To me, the more interesting thing for Og- Og-nition is, like, um, uh, you know, that it isn't in the, in the top two or three, and it's still of that scale, right? So, um, years ago I wrote a post and I called it The Postmates Effect, uh, where I think, I think it was Sequoia said they never thought they could make money off the number three in a market like Postmates, right? But then when times were good, it got bought for a couple billion. That, that... Back then, a couple billion was, like, a lot of money, right? I don't know if kids remember. But I called it The Postmates Effect. So Cognition is, like, the greatest... Now, Cognition is different. It's long-running, it's autonomous agents. It is different, okay? But from a revenue perspective, it's the Postmates of the category. Uh, but it's such a big category, man. Um, you want to be in Postmates again. It's never gonna catch Anthropic unless, unless the world changes, which it has every, every single week. But unless the world changes, [laughs] it's not... And it doesn't need to catch them. Uh, just, just 5 to 10 billion a, a year a few years out is enough to make Cognition a success. It only has to do 5 to 10 billion in ARR to be a success. It doesn't have to catch Anthropic. [laughs]

   4. RORory O’Driscoll38:47

      Look, going back, I said it earlier, I think coding is the motherlode of markets, right? It is the whole reason all this stuff works, right? And did we get the TAM wrong? I mean, one of the numbers I've started looking at a lot is just the total labor spend and, you know, software, including people working at Salesforce, Cisco, and then people working at JPMorgan, including, you know, QA, all the rest. You've got about $500 billion a year of US labor spend, right? And as we've said this 100 times, you know, the whole, the big question is what percentage of that converts to AI spend, right? If it's 10%, it's a $50 billion market, and, ooh, that's a bit nerve-wracking, uh, given the traction of everyone involved. If it's 20% or 30%, there's lots of room to go. And there's credible arguments that say it's higher, right? And if it is higher, then, you know, i- if you're going to have $150 or $200 billion a year, which would be 40%, of spend on coding tools and coding intelligence, then anyone who has a, a kind of a sub-segment of that, and if you think about it, you know, there's the Cursor segment, the C- to some extent the Cursor/Claude segment. The Cognition would say it's a slightly different segment of where they're playing now in terms of, as you say, Jason, long-running agents. Yeah, the other extreme, Lovable and Replit, are in a different sub-segment of that. They're all in sub-segments of a potential, you know, 50 to $100 billion marketplace, depending on what percentage number you believe, right? So yeah, the, the TAM here is huge. And-

   5. JLJason Lemkin40:15

      I think what we got wrong, sorry, I didn't mean to interrupt, uh, w- was the, the... Rory's math you can't argue with. There's only so many humans, developers on the planet. Even if you use my math of 10 to 15 grand per developer, there's still a, a, a ceiling to that math, right? But if... So, so that's the, that's the, that's the, the tops-down version, right? Uh, maybe it's bottoms-up. Sometimes I get confused, even though I shouldn't. Having said that, what I think the, what we really got wrong is people are literally building 100X more software than we were 18 months ago. It is s- and I said last week on the show, like, if your portfolio companies aren't deep into their 2027 roadmaps, they're failing, okay? It is true. Like, we just build... Features that used to take a quarter a year can be built, not really in an hour or five minutes, but can be built in a week or a month. And so if you look at your best portfolio companies, look how fast they're ship- how much they're sh- not just fast, how much they're shipping. So there's a, there's a, there's a financial TAM, which has some theoretical h- uh, headwinds, but literally the amount of code we're building is 100X. Um, and so that's what we got wrong. We didn't realize we would all be building compound companies, compound startups. We would all be building 100 times more software. We got that wrong when this show started. That's where I think we got the TAM

8. 41:33 – 47:47

   Does Every Startup Have to Become a Compound Company?

   1. JLJason Lemkin41:33

      wrong.

   2. HSHarry Stebbings41:33

      Well, that's an interesting one. In a world of AI, does every company become a compound company, where suddenly Ramp is creating model routing products-

   3. JLJason Lemkin41:41

      You have to

   4. HSHarry Stebbings41:41

      ... and spinning them out?

   5. JLJason Lemkin41:43

      You have no choice. You can't win because your competitors are compound startups.

   6. RORory O’Driscoll41:47

      Jason, yes.

   7. JLJason Lemkin41:48

      They're all beco- they're all overlapping at a pace we never saw before. They're all competing at a pace we never saw before, right? Maybe m- may- maybe we get confused because the- the LLMs we talk about a lot are these still horizontal platforms in many ways, right? Uh, they're not building hundreds of applications despite Claude Design and this and that. But JFC, the, the rate of convergence of competitors for, for B2B application, we've never seen this. They're all compounds.

   8. HSHarry Stebbings42:13

      But Jason, what does that mean if we expand that one next step? What does that mean in a world where all startups have to be compound startups?

   9. JLJason Lemkin42:19

      Yeah.

   10. HSHarry Stebbings42:19

       How do I think about backing winners? If I'm a founder listening, w- what do I do?

   11. JLJason Lemkin42:26

       Well, you, you listen. The, h- I mean, it's, if you're not shipping, this, and this was the Cognition... Remember when the, when, what's his name, the CEO?

   12. HSHarry Stebbings42:34

       Yeah. Scott Wei.

   13. JLJason Lemkin42:35

       Yeah, when he, when he hired Windsurf and hire- fired half the people, he's like, "These gu- we have to work seven days a week at our company. I am sorry," right? It's just... And the folks that can't do it, you, you don't, I don't... It's not, it's not all the amount of hours you work, but you have to be out accelerating your competition- In terms of the rate at which you ship software, because they're all gonna be compound startups. All the little islands on your two-by-two or on your heat map. There is no heat map anymore. It's all h- got hot. It's all lava. [laughs] And so if, if they're slow, sell or quit or send your junior board partner to the meeting, 'cause they'll never catch up in today's world.

   14. RORory O’Driscoll43:11

       It, uh... And Jason is instinctively right about that answer, and I'm gonna try and do economics on, on the fly, so bear with me, right? Is that what is basically happening here is, you know, AI makes code a lot easier to produce. We can argue, right, does it replace... You know, h- what percent, you know, what's the ratio of code, of AI spend to, to software spend? But there's no doubt it makes it massively easier to produce software, right? And you can either believe one of two things will happen, and a bit of both will happen. One would be, oh, and the world spent 10 times... They continued to buy software at the same price, and they spent 10 times more on software, right? If you believe in that, you believe in the Tooth Fairy, right? Um, there will be some increases, though, but it's not gonna happen. JPMorgan is not gonna spe- i- increase its software purchase budget 10X. So the other thing that's gonna happen is if everyone is making software more quickly, and there's some expansion in the software spend from end customers, which I agree, but not nearly as much as the expansion in production, then Jason's vision is correct, and Scott Wu was right. The person who's going to... I want to bring it back to your question, Harry, right? The person who's going to win is going to be the person who compounds the most, grinds out the most software with these tools that have made them move incredibly quickly, and the person who doesn't grind out software 7 by 24 is gonna be left behind. And the end customer's gonna say, "Let me see. I can buy two apps from you or an integrated 10-person ad suite from them. I think I'll go with the 10." Right? It's going to be a very... I mean, it's, it's gonna be one of those where there's a period of time when some people get the new way of building and are building quickly, and you all have on your portfolio, and some people aren't, are building the own wa- the old way. And you kinda know in your heart how this is gonna end, and it's not... Jason's right. It's not gonna be pretty for the people who aren't putting more software in the box. 'Cause what you're not getting... Like, if Rippling's selling 10 modules, they're not getting 10 times more than the person selling one. They're getting four times, but they're saying to the end customer, "Dude, let me make all your pain go away. Here's 10 different modules you don't have to buy. Now you can get them. Give me four times the price of a single module. You're happy. We're happy 'cause we're building software quickly. You're happy 'cause you're sp- saving money and it's more efficient." Everybody wins, and the sound you don't hear is the other nine point products dying. That's the movie. And-

   15. JLJason Lemkin45:29

       I remember la- last week I was at a board meeting for Owner, which just raised a 2.3 billion, right? It's, it's sort of a next gen- next-ish generation AI-infused restaurant platform. And I love the CPO. He's one of the best I've ever worked with, Q, Quentin. And, um, he was going over what's, what he's shipping and, and even with all these investors with their hundreds of millions, they're like, "This is too much." [laughs] They're like, "I'll..." A bunch of B&B guys who, who, who we all know, and they're like, "This is just... You can't ship this much software." And he said... And he's very good. He's like, "We all have to be compound startups. We have no choice." Like, this is just the bar, right? It's... But it's literally amount of features and functionality that has recently shipped or will ship that is almost unprocessable, but now they have to build every single thing a restaurant would want, every part of the stack. You no longer can just do part of it. And he's like, "We have no choice." Like, "I don't even sweat it. I don't even sweat the fact this is 10 times more than a year ago because we have no choice. We have no choice."

   16. HSHarry Stebbings46:22

       I also noticed in that marketing message that customer base has changed. I, I think actually Adam would say to you it's not restaurants, 'cause, uh, very explicitly in his launch videos, he was saying, "We are the AI operating system for small businesses."

   17. JLJason Lemkin46:36

       It, it's part of it, and that is somewhat interesting that you can, with AI, you could expand into other verticals. But Qu- Q's just talking about their core ICP. Like, they want everything. They need the AI v- receptionist. They need the AI order, and they need the AI F. And, like, and they, they expect all of it, and if we don't build all of it, someone else will build all of it. Like, we can't, we can't wait two years in our, in our little corners of, of the venture world. And his point is just the amount he's gonna ship, not only is it radically accelerating the year, but he's embraced it, right? Scott Wu asked. They've... Like, there is no other choice, so it's not even worth talking about VCs. [laughs] Like, thanks for, thanks for the nod that we've been working. We have no ch-... This is the world today. The world has changed.

   18. RORory O’Driscoll47:15

       And acknowledging there are just... So we don't sound one-dimen-... There are complexities with that. You can veer into s- product slop. You can have too many buttons on the screen.

   19. JLJason Lemkin47:23

       Yeah.

   20. RORory O’Driscoll47:23

       All those things are true, which is why-

   21. JLJason Lemkin47:24

       That's why the VCs are like, "Wow"

   22. RORory O’Driscoll47:26

       ... you need a great... To your point, Jason, you need a great CPO. You want to present a lot of product surface area in a, in a fairly simple, digestible manner, but that's the art. And if you do that, then you're right. You get the money. Because no one, no one running a business says, "I really enjoy having five separate SaaS products and integrating them, 'cause that's how I get off on my excitement."

9. 47:47 – 50:53

   Are European Startups Underfunded for the AI Race?

   1. HSHarry Stebbings47:47

      My... I'm just thinking here, a- and the one sitting in Europe, if you want to do a compound startup in the way that you both are talking about it, you will need to raise more money. Because to move at that pace and to spend what you'll need to on tokens, you'll need to raise more than the more mod- modest European round. And what I'm worried about is actually I'm in a, a number of companies which have raised less than US counterparts, and I think will be able to be less aggressive in doing the compound route than their US alternatives. Don't they? 'Cause they, they don't have the money. They raised 3 million bucks.

   2. JLJason Lemkin48:18

      Yeah, this is one I don't know how to solve. Um, it, it, it, it's a tough one. And the one... It's an interesting data, but Iconic, uh, last week put out its headcount data of how much people are growing headcount humans in the age of AI. I don't know if you guys saw it. There's, um... The full report hasn't come out. But it basically said anyone growing below hypergrowth is not hiring, [laughs] right? People growing 50 to 100% are adding headcount 25%. People growing 50% are adding no headcount, and they're using AI to get more efficient. Great. People that are growing more than 100% are growing 133% headcount on average, right? So they're compounding not just software, they're compounding humans. They're sucking in humans. The spiral just grows. You can't keep up.

   3. RORory O’Driscoll48:57

      But you have to acknowledge that there is a odd, uh- There's a absolute paradox at the heart of this comment, 'cause we just said we have a product that makes engineers more efficient, right? In theory, if that's all that was happening, you should have to hire less engineers, right? If I was just the software product for VAT returns in the UK, and I was the only company doing it, right? There's a couple of competitors, right? AI comes along, I can probably get rid of a couple of engineers and do it more efficiently. That's all. It should just be more efficient, right? And that should be- And that's the first order effect. So Harry, to your point, it should arguably be, "Hey, I only need less money now to build this product because AI makes it easier." But I think what happens is because it's easier, because investors are now just looking for huge outcomes, the minute you start getting any growth, they're willing to put capital behind it. And remember, for every dollar in a software company you spend on, typically on an apps level product, not a financial model, but you spend on R&D, you spend two or three times that on sales and marketing. So what you're seeing, Harry, is the winners get this compounding effect. They start getting this growth effect. And then Jason's right, the iconic data says venture capital does a really good job of stuffing money into things that are already growing quickly. That is our default. That is right at the heart of our lizard brain. If you were to wake up in the middle of the night, what do you want to do? I want to find shit that's growing and stuff more capital into it. That's the job, right? So you get this kind of pulling away effect, and that's why you have that concern you have, Harry, which is, is that you can be a perfectly good company, but the concern is, are you drifting into irrelevance? I'm not convinced it happens all the time, by the way. I think if you are in a separate market, you'll be just fine, and you'll make money, and you'll put up your hand one day, you'll be fine. But if you are in a market where the adjacencies can easily invade, to Jason's point, then you're not gonna be fine. You're gonna wake up in three years and not matter. And that's the challenge.

10. 50:53 – 55:03

    Are VCs Really Kingmaking AI Winners?

    1. JLJason Lemkin50:53

       Maybe even 12 months and not matter, though, is the-

    2. RORory O’Driscoll50:55

       True

    3. JLJason Lemkin50:55

       ... I think is the issue, right? I think it's an existential issue. I, I, I don't, I don't, I don't love this idea, going to both of your points, that Harry talks about a lot of, um, what do you call it? Kingmaking. You know?

    4. RORory O’Driscoll51:06

       Yeah.

    5. JLJason Lemkin51:06

       I'm not into that in isolation.

    6. HSHarry Stebbings51:08

       It's so true.

    7. JLJason Lemkin51:09

       But, um-

    8. HSHarry Stebbings51:09

       It's so true

    9. JLJason Lemkin51:10

       ... but, well, it's true, but, uh, but, but I think it's backwards. I don't think VCs just with capital, with nothing else-

    10. RORory O’Driscoll51:16

        I do

    11. JLJason Lemkin51:16

        ... without the right founders or without the right inputs, without any traction, I don't think they can will, they can... That's why I just think the term is a little bit flawed, but, um, but it's also true, right? It's that you need so much capital to build these compound startups, right? That, uh, that by facilitating it, the c- the VCs make the kings, right?

    12. HSHarry Stebbings51:36

        I'm just gonna argue three things that make a company: customers, funding, and talent. And when you have Benchmark and Sequoia, great talent wants to join you. Customers hear about you and are validated by those names, yeah? And funding, everyone wants to fund you. If you are a Benchmark company, your next round is done. It is done.

    13. JLJason Lemkin51:58

        Yeah, it's, that's all true, but it's a little... But I, I think it's just a moment in time. I think what's much more interesting is that, that ca- that capital allows compound startups, it allows more code production, more software production, so that it's, it's, it's not true that we're gonna do more with less. That turned out to be the great fallacy of f- of late 2025, early 2026, that we would do more with less. We're doing much more with more, and that's why your European startups, most of them are gonna fail, uh, at least in the US, because they can't do much mo- much more with more, right? They're gonna fail. Their little point solutions are just gonna disappear in six months. We don't need those little point solutions.

    14. RORory O’Driscoll52:35

        Again, our job is to sniff out winners, snu- stuff capital into them, and broadly speaking, stay out of the way unless they're literally crashing the car. That's the job in a nutshell.

    15. HSHarry Stebbings52:45

        Doing more with more, Andreessen. [laughs] Oh, I, they, they, did they... I'm sorry, you can help clarify. They expanded the growth fund to eight and a half billion. It was... W- what was the story here? Anything we need to know?

    16. RORory O’Driscoll52:59

        I think they had this mechanical fund. Uh, they raised another 1.4 billion more focused on hardware. Yeah.

    17. JLJason Lemkin53:05

        Things are so good. They're so good. That wasn't enough money. We need even more money, and there are incentives to do both. There are incentives to expand your, your, your growth fund because it's more... But, but there's also incentives sometimes to cut it. Founders Fund cut the, their t- you know, N minus two, uh, funds ago. They cut them because they couldn't think they could deploy enough fund in, in that window, and so you'd rather deploy less and get into carry mode, right? Andreessen's saying, "Good God, this is such a great time in growth. We got it wrong a couple months ago. We need 40% more capital, and so we're gonna tack it into the la- No, we're not just gonna put it in the next fund, which we could do in a year. It's so good. It's all going to NVIDIA. It's so green. We gotta put more into the current fund." Right? Unless things are all green, you just put it into the next one, right? So, um, may- maybe I'm misreading it, but I think that's what I was just, we just, we, we're deploying so quickly s- so successfully. I don't... Did you guys see the Cursor deal? Did you see OpenRouter, OpenRouter? We need more money, guys.

    18. RORory O’Driscoll54:01

        Totally. It's that, [laughs] like I said-

    19. JLJason Lemkin54:02

        ElevenLabs. These guys just need more money, so the fund's too small.

    20. RORory O’Driscoll54:06

        Again, repeat, the whole asset allocation, capital allocation is all about stuffing money into things that are working. That's what VCs do with companies and LPs do with VCs. It's working at Andreessen, at Jason's, right? You give Cursor, you give an OpenRadi, you say, "Hmm, I should give them more money." That's the end of complex analysis.

    21. HSHarry Stebbings54:27

        Okay. T- team, there is Clay raising its $7 billion. There's Linear, which hit 100 million, growing 100%, doing a tender at two and a half billion. There's Shein going public at a $26 billion market cap. Uh, well, Rory don't seem too excited. Uh, there's Salesforce and, what is it, Claude Force, Benioff and Dario sitting down together, and Salesforce getting a big bump. There's PayPal and Stripe deal off.

    22. JLJason Lemkin55:01

        For now.

    23. HSHarry Stebbings55:01

        Which one would you like?

11. 55:03 – 1:06:22

    Can Salesforce Survive the AI Transition?

    1. RORory O’Driscoll55:03

       I mean, I think, you know, Salesforce and Claude is worth a minute or two, and Jason will probably have some insights there, and then maybe talk about some of the privates, just interesting. But yeah, Joe, Jason, what's, what's your take?

    2. HSHarry Stebbings55:14

       Well, just for everyone to understand what, what happens between Salesforce and Anthropic so they know.

    3. JLJason Lemkin55:20

       A lot of it, I think, um, is marketing. Mark's pretty good at marketing. Pre-pretty darn good at it, right? We, sometimes you wonder how, where Salesforce is. Well, from, you know, it launched AgentForce over two years ago. Whatever 99 problems it has, but being ahead of the trends isn't one of them, right? It, it, it, it, whether, whether that V1 version of AgentForce really worked well is a different question, right? So I actually think on its surface, it's, it's a nothing burger because ClaudeFor- Force on its surface is a bunch of skills which anyone can build. The three of us can build a bunch of Claude skills that are packaged up and distributed in a digestible, trustworthy fashion. They're, they're skills certified by Salesforce. They're designed to work via MCP and otherwise, so they're trustworthy, right? But the basic skills of run me a pipeline report, uh, tell me how Harry's doing on the team versus Jason, like, these are not, uh, profound yet, right? Skills for Claude a- and, and MCP are not new. Um, and also, uh, you know, Dario's showing up because Mark agreed to move, Salesforce agreed to move their, their LLM spend to Anthropic. He's gonna show up for, for his big customer, right? So I didn't view those as very impressive either. What I viewed as much more impressive is going all in on Salesforce doesn't have to be the surface. Mark's, if you really listen, the most interesting thing that Mark has said, just like he was two years ahead of many of his peers and agents, he's two years ahead here on two things, which are big deals because they're also slight threats to his business. He's saying what e- there's gonna be multi-service. The train has left the station. Some folks will use us through, um, Slack. Some folks will use us through Claude Force. Some folks will... And we run Salesforce headless. We don't even log into Salesforce, and these are opportunities and threats. They're threats to Salesforce if you don't log in and use their UI and UX and their, and the way they do it. He's leaning t- he's saying, "Use whatever surface you wanna use. I'm g- I'm gonna deliver against it." Um, and they also said, and they said more of it recently, "We're gonna do more outcome-based deals," which is a BFD. So I think the marketing was great, and I love the Matthew McConaughey stuff. I used to hate it. Now I love it, um, uh, because he's been doing it f- he does help you kinda under... It's, it, I love the consistency of it, you know? Um, but, um, but I think the real things, the c- the commitment to multi-service and the beginning commitment to outcome-based pricing are huge changes for a $45 billion run rate company, huge changes. And they, they're not all gonna break in Salesforce's favor, but Mark's going all in on it. So I think he's driving organizational change, and there's early signs it's working, and, um, the RPO is up, and the stock's up, whatever, 50% in X or 25% in X amount of time. So short-term boost, but he's, they're going all in. Um, and most of these enterprise guys do not wanna be multi-service, no matter what they say. It's a threat. They want you to use their agents and the services they allow you to use.

    4. RORory O’Driscoll58:05

       That's exactly the right summary, yeah. I mean, they, they... And I give them credit for just being super flexible and getting with the program, right? When, you know, there's no denial here. The, you know, I admire the pragmatism of, "Oh, I tried A, A didn't work. Let's just try B, and I'm all in on B, and you'll never even prove I said A," right? That's what makes him a great marketing leader.

    5. HSHarry Stebbings58:25

       They are a $212 billion company as of today.

    6. RORory O’Driscoll58:30

       Yeah, exactly.

    7. HSHarry Stebbings58:31

       In a year, in a year's time, over or under 250?

    8. RORory O’Driscoll58:35

       Look, I think they're g- genuine co- I think they're growing hard... Involved answer. It's actually not an interesting question, but I'll do it 'cause you asked. Look, I said by this... Just, I'm gonna start by saying, when we had our Name Our Stocks game six months ago, I was behind. Then in the last iteration, I was ahead, and now I'm killing it because just by world cloud and team and Salesforce, it's been a great buy. From the bottom of the SaaS trough to where we are now, you know, you could have, you would have 80% in team, 50% in world cloud, the end ETF. You know, I think 25, 30% in Salesforce. So we've all done amazing if you bought that, right? So big believers. But I think you're now at the point where now you look, you're a more normalized revenue multiple. Now your growth rate, you know, you're growing 11 or 12%. Can you grow the stock at 11 or 12%? Probably, maybe a little more with EPS efficiency. So I'm sitting here thinking 212, 10%, in one year, 220, 230, totally doable, right? And then you take into account the fact that the overall market's super high, you know, the probability of that going down versus up. So I don't think it's a layup, but let me make it real. I'm continuing to hold my pretty large slug of Salesforce stock because I think they've weathered the apocalypse, and, you know, World Cloud is, which is the ETF that's just a cloud index, is, you know, well up in the year and is screaming up on when we bought a while back. So that's... But I think genuinely, Harry, I think, and I'm not saying this to be obnoxious, I think Jason's points were the spot on, too, which is the, the whole idea that this is a system of record embracing the fact that lots of people are gonna access it via Claude, and they're willing to let that happen, and not everyone is doing it. Because we had the whole Service Titan Podium thing, where Service Titan is trying to cut off Podium, right? We just discussed OpenAI cutting off Cursor, and this whole idea of when do you cut off an adjacency from working on your stuff and when do you not, it's gonna become a recurring theme, and I think enterprises are gonna start getting really focused on it, and they're gonna be saying things like, "Hey, Mr. Vendor, you can't cut me off just 'cause you don't like that other guy. I want openness." And I think Bernie else get... 'Cause we, we use Salesforce a lot. We have a 20-year instance. You know, we deeply embedded in it, and more and more people are using it via Claude. It's exactly what you said, Jason, right? People are just like, "I've got my MCP server. I don't wanna interact with it. I just wanna send it an email to say update the record."

    9. HSHarry Stebbings1:00:51

       Is the system of record access via Claude worth 210 billion?

    10. RORory O’Driscoll1:00:57

        That's a, that's a metaphoric, one of us does have-

    11. JLJason Lemkin1:00:58

        If it keeps Instinct from, uh, from, uh, going rogue, it might be worth it.

    12. RORory O’Driscoll1:01:02

        Uh, yes To... Uh, what about this? It's a-

    13. JLJason Lemkin1:01:05

        It's the question

    14. RORory O’Driscoll1:01:06

        ... $40 billion revenue company with 30, 30-something, 30, 35% cash flows. So is a 10 or 12 billion dollar a year cash flow business worth 200? Maybe. But it's great cash flow. Right? And it's gonna get more cash flowy as time goes by.

    15. JLJason Lemkin1:01:19

        To answer your question, Harry, here's how I would simplify it, and this is the thing I think we all, uh, to the extent we care, we have to think about. Can system of records deliver outcomes? Customers want outcomes now. That is why Palantir is growing 90-something percent. That is why Sierra's doing well. The world is moving in B2B to outcomes. Is it gonna be d- as dramatic as some say? No, but it is... Customers are not making purchases that aren't tied to outcomes. So that's the question for the sys- You can talk about the system of records are sticky, but can you deliver outcome from a system of record, or will agents or other systems deliver outcomes? If they deliver the outcomes, you will, you will shrink over time. Your surf- Your, your-

    16. RORory O’Driscoll1:01:57

        Which is why, again, to chime in, which is why, you know, Salesforce just bought Intercom, where we are lucky, [chuckles] we were lucky enough to invest le- less than a year ago, and that's a very outcome-based product for customer support, where they charge based on-

    17. JLJason Lemkin1:02:08

        Yeah

    18. RORory O’Driscoll1:02:08

        ... resolutions. And again, I go back to credit to Benioff. He's accepting that his system of record business has to be open to other, other front ends, and separately he's saying, "But if we wanna play the outcome game, I'm not gonna just walk away." He's not gonna just walk away and say, "Oh, you caught me. I'm headless. I'm just gonna be the back end." He's also buying things like Intercom to say, "Maybe we can sell those outcome-based deals, too." So, uh, the, yeah, is it... I mean, the way I think, to you, to d- your direct question, I don't look at Salesforce and say, it's obvious that you'd pile in a ton more 'cause it will outperform from here the way you could've done four months ago. But I'm sitting there with my holding as part of my portfolio and saying, "This is not a casualty of the war. This is a compounder. Not a rocket ship, but a good compounder with decent cash flows at a decent valuation." You kind of go, yeah, okay. Plus or minus the S&P maybe, you know, whatever, right? I don't think... In other... It's not the train wreck that it, people thought it was four or five months ago. If you remember the hysteria four or five months ago. I mean, we were gonna talk-

    19. JLJason Lemkin1:03:06

        Hysteria. It was hysteria. It was hyst- It was, it was a, um, everyone will vibe code their own CRM on the 20VC podcast. It became a hysteria, right?

    20. RORory O’Driscoll1:03:14

        I mean, I think some people will at some people's stages, but they won't do it for the kind of customer Salesforce has. And then I just wanna throw in in passing another number that I keep an eye on. Jason, and you mentioned this before, is that remember we talked about how much do you spend on models as a percentage of what you spend on engineering, right? Your fully loaded Salesforce spends six billion a year on engineering, and that probably includes QA and all the rest of it, but that's the wide comp. And they're gonna spend $300 million this year on Anthropic. So it's only 5%. And this is why, when you, when he mentioned that number a while back, you actually said the right thing, Jason, which is that still feels small. If the best software company in B2B SaaS is still only spending 5% of its engineering budget on tokens, then either the market is smaller than we think for intelligence, or B, people like Salesforce have a lot more to do, right? But I... It was just an interesting number. They throw out they're gonna spend 300 million this year on Anthropic, which sounds like a lot in the abstract, and it is. But if you think about your market TAM as a percentage of the engineering spend, then you probably need that, probably 300 million needs to be 600 million, or maybe a billion.

    21. HSHarry Stebbings1:04:25

        Stripe and PayPal no more, it would seem. Deal is off. We've spoken about it a lot, saying about the, the kind of amazing nature of doing it while private, um, the strategic bet that it was. Now it's off.

    22. RORory O’Driscoll1:04:41

        I think it's as simple as price. You know, I think the rumor is the Stripe, um, Advent Syndicate offered in the 60s, and PayPal wanted in the 70s, and, you know, stocks bounced off the low. And I know it's, you know, smart deal to try and do, but they're clearly not willing to overpay, as they see it.

    23. JLJason Lemkin1:04:58

        This is always a dance, and we never know-

    24. RORory O’Driscoll1:05:00

        Yes

    25. JLJason Lemkin1:05:01

        ... what, where we are in the dance. Um-

    26. RORory O’Driscoll1:05:03

        No way.

    27. JLJason Lemkin1:05:03

        You know, uh, PayPal, when the, when the deal w- was worked on, PayPal was at 42, right? As the deal progressed, it was at 61, then it collapsed to 53, right? So Stripe's still looking at this as a $41 company, right? And Advent, and they've run their models. And, um, and PayPal called their bluff and their stock crashed as a result. So we just... This is always a... It- it's an, it's actually an incredibly, to someone like me, it's an incredibly annoying dance. Why can't we just get to the end of the dance? Um, but these deals often, not only do they have to, do you have to make a second offer, but they have to fall apart after the second offer in order to ever happen. Like, there's a lot of structural reasons, right? And the board has theater and drama, and, um, there may be no way to get one more dollar out of the deal than for it to fall apart. Like, let's not say it's dead until it's dead. I, I'm skeptical.

    28. RORory O’Driscoll1:05:50

        I think that's a good point. You, uh, there's a dance that goes on. Right now it's off-

    29. JLJason Lemkin1:05:53

        Oh my God, this dance.

    30. RORory O’Driscoll1:05:55

        Yeah. 'Cause-
12. 1:06:22 – 1:12:46

    Why Clay Could Be Cheap at $7BN

    1. JLJason Lemkin1:06:22

       A quick note on Clay. I just thought it was very interesting for us at 7 billion. I, I started out a- as a Clay, uh, uh, s- skeptic and have become a Clay convert over the years. I was a skeptic because when AI sucked, every CMO wanted to check the box on being an AI hero, wanted to bring in Clay. Like, you remember that from, like, a year and a half ago? Like, "I'm gonna get fired. I better have an AI tool." And Clay just benefited from this rush to check the box, and I, I didn't see it in the product, and it an- the marketing annoyed me, that every CMO, um, at, like, SaaStr annual two years ago was buying Clay. I mean, more power to the founders, but it, this check the box because I'm not gonna get fired annoyed me. I will tell you, I've changed my mind, and our agents will only use Clay now, for real They will use nothing but Clay. And so as we move from AEO and GEO and whatever EO to agent-made decisions, the fact our agents would only use Clay, that- I think it's a BF deal. And so we have moved everything that we do to Clay, not only 'cause it's a great product, but it's not worth arguing with the agents. Like, I've-- this is the most stubborn I've seen our agents.

    2. RORory O’Driscoll1:07:24

       You anthropomorphized. Stubborn is a human trait, Jason.

    3. JLJason Lemkin1:07:28

       I really did, but-

    4. RORory O’Driscoll1:07:29

       You did

    5. JLJason Lemkin1:07:29

       ... I only have so much time in the day. If the agent's gonna say six times, "You must use Clay," I will concede defeat and use Clay. So i- in a sense, I think it might be the cheapest it's ever been at 7 billion.

    6. RORory O’Driscoll1:07:41

       Hmm.

    7. JLJason Lemkin1:07:43

       Because if we're moving to an agent-first world, then agents will insist on using products. Now, it may not last. Maybe the agents will say something different in a year. But I've, uh... this is one of the handful of products where the agents were so insistent you must use Clay that, um, I, I'm all in on those. Buy those g- buy-- like, load up those stocks.

    8. HSHarry Stebbings1:08:01

       Jason, welcome to the IC. You have Rory and Harry as your partners.

    9. JLJason Lemkin1:08:06

       Yeah.

    10. HSHarry Stebbings1:08:06

        Uh, what's the bull case fr- from this point? This may be the cheapest round at 7 billion.

    11. JLJason Lemkin1:08:11

        Yeah.

    12. HSHarry Stebbings1:08:11

        Fantastic. What's the bull case for where this goes, and how big is that?

    13. JLJason Lemkin1:08:15

        The bull case is that agentic GTM has just started, right? And much like we, w- the three of us made a mistake not going early into cognition because we thought the TAM was too small, we also thought the TAM was too small for agentic GTM. We thought the TAM was the same as it was. It turns out when agents can run these GTM motions, they will consume 10 to 100 times more usage than humans ever could. They can run GTM around the clock. And I'm not talking about spamming, I'm talking about analyze c- consistent campaigns reaching every prospect, reaching every customer across the globe, and Clay's the cle- clear leader there. And we need exposure, but it is the clear leader. Agents will, will consume 20X more GTM resources, more tokens, more usage, even if revenue doesn't go up all that much. Not everyone that's coding is really seeing a revenue lift from it. Not everyone using all this agentic GTM will radically close qualified pipeline, but the usage is just going to explode, and Clay is a clear breakout winner. Um, and it's accelerating. So I can see a path to 100 billion. Um, and I recommend, uh, I recommend a small initial $150 million stake. How was that?

    14. RORory O’Driscoll1:09:19

        Uh, the Andreessen Growth fund is ringing to hire you as we speak, Jason. You'll be great.

    15. HSHarry Stebbings1:09:24

        Yeah.

    16. JLJason Lemkin1:09:25

        Right.

    17. RORory O’Driscoll1:09:25

        I mean-

    18. HSHarry Stebbings1:09:25

        Harry.

    19. JLJason Lemkin1:09:26

        I think we're underestimating this trend, bo- both of them, how much agents are gonna do things in GTM, just like coding and... But man, this agent, I don't-- Rory's right, don't an- anthropomorphize them, but sometimes when it's just you, you gotta, otherwise you can't get, get past the task.

    20. HSHarry Stebbings1:09:41

        We have it through 20 Sales Fund. I think at, like, 300.

    21. RORory O’Driscoll1:09:45

        Well, good for you.

    22. JLJason Lemkin1:09:45

        Yeah. And I think they bought on the reason that it drove me nuts, which was the check the box purchase, right? Um, but, but they, they, they proved it. They made it happen. You know, kudos.

    23. RORory O’Driscoll1:09:56

        And j- just to chime in on that. Yes. And I think they and Linear are versions of a story that says, you know, it's not the end of the world. Th- if you grab hold of these changes as a founder, you can turn change into your advantage, even if you're an older company. 'Cause Clay, you're right, the initial product wasn't an AI product. It was a waterfalling product for various different data sources like Zoom and all the other kind of Zoom sources. It was a very good, very point product for RevOps, and they've done an excellent job of bo- riding the marketing hype around go-to-market AI, and then on top of that, actually gen- gen- generating new product in that space. So th- and you know, we're gonna... We, we also mentioned Linear, which is doing really nicely, doubling at 100. My point is, these are companies that were founded pre-gen AI that have done a really nice job at the app level of co-attaching to the AI trends and are looking like they're survivors. I mean, you-

    24. JLJason Lemkin1:10:49

        I do think it's more than that, just to be clear why, and I can talk about Linear briefly if we're not running out of time. I don't think they just attach to trends. I, and I think this is a really important for us. They are incredibly agent-friendly. This is... And this is the same bet that Mark's making, which is a bolder bet at Salesforce than it is at Clay or Linear. They are agent-friendly. The re- why do my agents, not to anthropomorphize, nag us to use Clay? Because it's the most agent-friend- if you have a two by two of agent-friendly and, and quality of output, it wins the two by two, okay? Um, high quality and easy for the in- uh, for the agent. Linear is the sa- like, I just started using Linear for the first time ever.

    25. RORory O’Driscoll1:11:25

        Because?

    26. JLJason Lemkin1:11:26

        What the hell do I need Linear for, right? Because I'm building an app with 448 tasks and, and to manage right now. [laughs] I can't do it, and I've-- and it's just me and the agents. But Linear, Linear is the perfect tool for that. That's where they're getting a boost. It ends up being very agent-friendly, right? And unlike trying to argue that humans are gonna be building more software, Linear is like, "We will build a platform that if it's just you and a couple agents with 448, um, um, um, features to build, we'll help you manage them."

    27. RORory O’Driscoll1:11:56

        Okay.

    28. JLJason Lemkin1:11:56

        Very powerful, right?

    29. HSHarry Stebbings1:11:57

        I, I do. I, I am an investor in Linear, disclaimer, from like one of, like the first or the second round, whatever round it was. Um, I, I do think it, it is drastically underpriced, though, at that rate, given what you said, Jason, though, no? 100 million, growing over 100%, re-accelerating at two and a half. Still founder lad Carrie, incredible founder.

    30. JLJason Lemkin1:12:18

        Yeah.
13. 1:12:46 – 1:15:31

    The Bull Case for Linear at $2.5BN

    1. JLJason Lemkin1:12:46

       billion.

    2. HSHarry Stebbings1:12:46

       Jason, can I ask you, welcome back to the IC. We've had a little water break, and now we're ready-

    3. JLJason Lemkin1:12:50

       Yes

    4. HSHarry Stebbings1:12:51

       ... to hear your next bull case.

    5. JLJason Lemkin1:12:52

       Yes.

    6. HSHarry Stebbings1:12:52

       What is the bull case for Linear from here at two and a half billion, given what you just said?

    7. JLJason Lemkin1:12:56

       Well, listen, generally speaking, project management is one of the oldest, uh, categories, and has been muchly bypassed by AI. Look at the abysmal performance of Asana at last being to survive, but mainly by diversifying outside of tech. Um, humans just don't need to build Kanban cards and wait weeks for other people to build features. It is a dying category. However, Linear Linear is the winner here. Linear is the clear winner. They have built an agentic product first that allows the fact that we are building 100 times more software, and that means 100 times more features than ever before. Humans cannot keep up with it, and humans still have to work with agents. And the native tools do have a certain amount of issue tracking and, and... But it's overwhelming. If every human on your team's gonna build 500 features and 1,000 issues, and you have 10 people on your team, you need a process and, and not to use a, a dated term, a system of record for managing all these issues with your agents. If we're gonna build software 100 times more software, 50 times faster than before with agents, we need a new system of record for it. And it ain't Kanban cards in Asana, I can tell you that. That's why Duskin Moskovitz quit his own company. He couldn't see it. But the team at Linear has figured it out. We have seen an, an explosion, 50 times more a- agent usage than 90 days ago. This will seem cheap when Replit's at 15 billion, Lovable's at 100 billion, everyone's out there, because Linear will be the one powering them all. I, I vote for 100 million at 2.5 billion as an initial entry point, and to reserve 250 to 300 million for follow-on rounds. But in all seriousness, if I wasn't building, I wouldn't see it. I would think Linear is an overpriced project management tool. And Clay... How can I be like, "How can Clay be worth 7 billion when ZoomInfo's worth 1?" I would be... If I wasn't building, I would think that these were dumb deals. But I am building, so I can see we're just starting.

    8. RORory O’Driscoll1:14:38

       I, I think that's interesting, 'cause what I, I... One of the things I like doing this is I like listening to you, Jason, what you're saying. What you basically... 'Cause you really imply that when you aren't building, the tools are ch- these are the tools that the agent is choosing to build with. This is what agent-friendly... It's worth pointing out to people, it doesn't just mean the software, 'cause maybe it's not obvious to the casual listener, but what you're not just saying is it's not just that these software products have agents, it's in fact that they are friendly to third-party agents who will proact- if, if, if, if Jason's agent says, "I have to pick a project, something to do project management as a tool for part of what I'm trying to build," they will default pick the product that shows up well as agent-friendly, and that's what these guys are doing. So they're, they're, they're skating their go to market to where the puck is, and the puck is agents buying software, not humans buying software. That's the zoom out comment here,

14. 1:15:31 – 1:20:18

    What Happens When AI Agents Choose the Software They Buy?

    1. RORory O’Driscoll1:15:31

       right? And that's what you-

    2. JLJason Lemkin1:15:31

       It's true. And some of it requires brand, but some of it requires proof. The agent will test the APIs too if it needs to be. It will quickly see that the API is blocked or doesn't work. They, they, they're very, they're very... Just like we see with Hugging Face, they can work pretty fast, right? So you c- you can game AEO and GEO with an agency. You... It's har- much harder to game this, this Clay Linear thing. It's hard to game.

    3. RORory O’Driscoll1:15:49

       Agreed.

    4. JLJason Lemkin1:15:49

       This isn't showing up. It's being chosen for... At least 50% is based on merit. It's not all merit, right?

    5. RORory O’Driscoll1:15:55

       Agreed.

    6. JLJason Lemkin1:15:55

       But it is merit.

    7. RORory O’Driscoll1:15:56

       By, by, by a cold and remorseless analyzer who just uses AI to pick the winner. There's no... You can't take, you can't take Jason's agent out to a steak dinner to get him to buy your product. It just has to be better.

    8. HSHarry Stebbings1:16:09

       In, in the same way that, that you said about the explosive nature of requirements on a to-do list in an agentic world, that was one of the reasons I actually did ClickHouse much later than would traditionally be in my wheelhouse. 'Cause when you think about the exploding nature of agent queries on the databases that they s- provide, whoa, this business becomes-

    9. RORory O’Driscoll1:16:28

       Agreed

    10. HSHarry Stebbings1:16:28

        ... 10X bigger than it could have been before-

    11. RORory O’Driscoll1:16:30

        No

    12. HSHarry Stebbings1:16:30

        ... in a pre-agent world. T- uh, t- much m- m- more than 10X.

    13. RORory O’Driscoll1:16:33

        Well, being precise-

    14. HSHarry Stebbings1:16:34

        Right

    15. RORory O’Driscoll1:16:34

        ... I just gonna say it 'cause I am that boring bastard. The volume comes 10X and 100X bigger. B- And what it means is that the existing system, just like GitHub, get overwhelmed, 'cause the problem is it's not necessarily that the spend goes up 10X. It might even go down, right? But the point is these things are so compute-intensive that products built for a human-first world just simply can't keep up, right? GitHub, which is, you know, the defini- you know, was the definitive developer pl- it's gone... It's, you know, collapsing every once in a while through volume, and that's just not a thing. They're gonna move hopefully to other products.

    16. HSHarry Stebbings1:17:08

        GitHub? GitHub's about as trusty as British Rail at the moment. I mean [laughs]

    17. RORory O’Driscoll1:17:12

        That's, that's exactly right. No comment on British Rail.

    18. HSHarry Stebbings1:17:16

        [laughs]

    19. RORory O’Driscoll1:17:16

        And, and then, and then last thing... I mean, we should just fa- I mean, you know, it, it turns out if you put cameras all over the place, and then cops are allowed to use them not just for the pur- I mean, I... Flock, I think it's a bit of a bummer, 'cause I think Flock has a wonderful anti-crime story, and I'm pretty anti-crime.

    20. HSHarry Stebbings1:17:36

        [laughs]

    21. RORory O’Driscoll1:17:36

        But what's happened is there's been a, there's been a fair amount of police abuse of the product, and people are reacting badly. It's quite an interesting social phenomenon.

    22. HSHarry Stebbings1:17:45

        So how did police abuse the product? I'm, I'm genuinely naive.

    23. RORory O’Driscoll1:17:48

        I think, I think that you get these o- you know, there's been isolated incidents. There's a couple... two different things. One is errors of identity where for whatever reason the system misidentifies, and then the cops basically do some version of, "Well, the AI said it's this person, so we're just not gonna think." It's a little like some of the problems facial recognition had. When you do... When you get a facial recognition, we know it's probabilistic, but you hand it to some, you know, officer in the street, and they're just like, [fingers snap] "It says it's you, it's you. You're done." And you get miscarriages of justice there. Then the other thing is you can obviously... This is a lot of personal information. You know, you get this cops track- tracking exes. You get it, you know, people looking up something for a favor for a friend. These large databases of private information are a risk. You always should... You need real controls over them, uh, because abuse alienates the general population, and it's been true for, you know, DMV lookup, anything like that. Do you not watch a cop show, Harry? You, you know, the cops can't just look up your DMV license without having a reason and a case number, right? And it's the same thing here. And unfortunately for... And I say unfortunately 'cause A, I think it's a wonderful trend and a good, a good company, but there's this perception now that the surveillance costs are worse than the crime prevention benefits. I'm not sure that's a trade I'd make. But unless they get ahead of this story... I mean, look, when you've lost-

    24. HSHarry Stebbings1:19:02

        That, that sounds like a very European stance to take.

    25. RORory O’Driscoll1:19:05

        It is. It... Yeah, no, you, you're right. It is.

    26. HSHarry Stebbings1:19:08

        The, the, the surveillance data is, is more sensitive-

    27. RORory O’Driscoll1:19:11

        No, I agree. It is. And that's happening in Texas. And the gr- I mean, 'cause look, in the great state of Texas, which is pretty law and order, there's real pushback on Flock. And obviously Flock has to get ahead of this trend, and I think they know what to do. But, um, it's really... The ironic thing is it's less them than the misuse of the product in other hands, which is hard to prevent. I mean, if you give a police organization the ability to track criminals, it's hard for you... I mean, it's the same dynamics. Funny, it's matern- it's the same dynamics that we had when we talked about Anthropic and the Pentagon. If you sell people software... Actually validates Dario. I hadn't thought of that. If you sell people software, you can't stop them doing things with that software you don't want them to do. So I think it's unfortunate. I think that this is a mistake, but I think it's what's going on right now. I think the Flock is experiencing a real backlash to a very good product, and they need to figure out a way to politically get ahead of it.

    28. HSHarry Stebbings1:20:06

        Right. I would like to bring to a close this investment committee. Uh, Jason's made two investments. Rory, none this week. You know, do better would be the statement that we have.

    29. RORory O’Driscoll1:20:15

        Sometimes no is productive work too, Harry, you know?

Episode duration: 1:20:28