Robinhood’s Vlad Tenev on AI, Prediction Markets, and the Future of Trading | Ep. 33

We call it, uh, vibe trading. So you know how there's vibe coding? I think there will be vibe trading, which sounds a little flippant-

Well, but, you know-

I admit, but -

The thing you said, that we're not a trading platform, it's like, you know, it's like a financial home. It's like vibe finances. It's like, you know, because you have all these other products, I assume it's gonna, you know, like, vibe set up my, you know, kids' Five Twenty Nine account, which is, you know, not-

Totally. Here's the areas that I'm most interested in. [upbeat music]

All right, Vlad, I'm super excited to be here. Thanks for doing this with me today.

Well, glad to have you.

Okay, so I wanted to start by getting sort of your historical lay of the land of online brokerage, and maybe we don't have to go all the way back, but if you could sort of just go back to, you know, maybe, like, the early days of online stock trading into sort of like, you know, Vanguard and Schwab and Fidelity, and now you've got, like, online platforms for trading that are modern, like Robinhood. Just, like, what's sort of the history and sort of the narrative, uh, as you see it?

There's a great book about this, A Piece of the Action by Nocera. It covers basically the modern-- the rise of the modern financial industry, uh, which is super interesting. I mean, it's basically a story of a big wave of democratization associated with lower costs. So, um, Charles Schwab, uh, began in the '70s. I think there's a lot of similarities if you look back between what Charles Schwab was to begin with and kind of what Robinhood is sometimes accused of being, right? Before Schwab, Merrill Lynch was, was the big broker, and really, they had brokers that would sell you trades and call you and convince you to buy stuff, and they would charge hundreds of dollars per trade. And then after that, there was, uh... The, the event that led to the creation of Charles Schwab was called Mayday. I forget the exact date, but it was in 1972, and up until that point, uh, commissions were regulated.

Mm.

So you could not charge under, uh, a certain amount per trade for commission. And Mayday led to deregula-re-- deregulation of trading commissions, which allowed Schwab to enter the business. And Schwab said, "You know what? We're gonna cut costs. We're gonna make it as efficient as possible. So we're not gonna have branch offices. You're gonna call us on the phone. We're not gonna try to sell you anything. We'll just process your ticket over the phone, make your trade, and we'll do it for..." I don't know what it was. Call it seventy-five dollars per trade. And so they, they were in the news in the early days for creating this, like, extremely sophisticated phone dialing system that could handle lots of simultaneous... Like, they innovated-