SPEAKER_00: whenever people make up new terms for revenue or expenses any of this stuff it's going to be a pink flag or a red flag pink flag is what i wave on the way to a red flag red flag means stop don't participate in this pink flag is can we ask some questions if you're a micro strategy holder my best advice to you if it was a family member said hey i put a hundred thousand into this i double my money my best advice to a family member and this is not financial advice for anybody else this will be for my brother sure my mom i'd say sell it you doubled your money sell it and then

SPEAKER_03: go buy bitcoin directly if you love bitcoin because now you're going to get four bitcoin for every one

SPEAKER_00: that you bought last month if you in fact doubled your money and it's you know this whole thing not your keys not your coins you probably want to own it yourself have your own coins or maybe be in something that's super trusted i'll have michael sailor here on this week in startups happy to have him on he can explain it it's not personal with michael sailor just so we're clear this week in

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SPEAKER_07: and use code jason to save 10 on your first rental hey everybody welcome back to this week in startups

SPEAKER_03: i'm jason calacanis he's alex wilhelm you know him from his tech crunch days you know me as an angel investor and from a little podcast called all in this is the podcast that started it all this is where chamath and sacks used to hang out before all in this week in startups what are we doing this week in startups well 14 years ago it started as a show where i would interview a founder and then it was two founders a week and then i mean it got up to six days a week and it took over my life it's been great i got alex here now we're going three days a week monday wednesday friday at noon texas time 1 p.m east coast we're going to talk to whoever the main character is at the moment in time maybe that's michael sailor right now maybe it's trump some weeks or jd vance a politician sometimes it's elon sometimes it's sundar we talk about whoever the main character is we talk about startups and we talk about all the technology friends we have a big docket today let's talk to our first guest and just

SPEAKER_12: get started we're going to talk about microstrategy after our first guest okay let's get started alex

SPEAKER_15: who's our first guest on this week in startups so very happy to report that i have sourced yet another alex for the show in this case it's alex pendle he is from the wave team w-a-y-v-e one of the most interesting companies i think in the realm of autonomous driving slightly more under the radar here in the states than waymo jason talked about waymo quite a lot yes people might recall that wave raised a 1.05 billion dollar series c back in may led by softbank and then later on uber invested in the company as an extension of that series see so they're backed by soft banking video microsoft and of course jason's favorite company in the world uber so jason you want to have them on they're

SPEAKER_19: part of the twist 500 and they have a very unique approach to autonomous driving so welcome to the

SPEAKER_21: show alex 2.0 alex kendall hey hey guys hey jason hey alex so tell us about your approach to autonomy

SPEAKER_00: we talk about a lot here on the program the autonomy end game we all know autonomy can work but there's a final series of bosses the final boss being regulators and safety maybe open roads you tell me what you consider the final bosses but where is wave in terms of its contemporaries and let's just pick two contemporaries that people talk about the most waymo doing 150 000 rides in three or four

SPEAKER_24: cities and of course tesla which has the largest number of fsd vehicles but they're supervised fsd at the moment where does wave fit between those two uh competitors or industry leaders i love that the

SPEAKER_27: final boss level it's it's got to be ai i mean self-driving is an ai problem and i think that's fundamentally the bet we made seven years ago at wave it's not the perception it's not the infrastructure but it's it's the decision making and complex multi-agent environments being able to predict how others are going to behave and and more importantly generalize the situations you've never seen before you're never going to see the same thing twice on the road and there's so much diversity of of weather of different behaviors of different situations you can encounter so the key thing you ought to realize is this is an ai problem um ai you've spoken tons on the show about large language models but i think that's just the tip of the iceberg with ai bringing into the physical world and what we call it building embodied ai i think this is what's going to enable self-driving to to really scale getting us off the the drug of lidar of high definition maps so what we've built a wave is is one end-to-end neural network a single ai model capable of driving uh in a very generalized sense in different countries and different vehicle types including on on roads it's never been to before all with a camera first solution with uh just you know equivalent of a single gpu and the really exciting thing is that many consumer vehicles that are being produced today have that equipment on their vehicles and so we think this is the opportunity to bring this technology to to mass market and and do so through through end-to-end machine learning alex really briefly is that uh

SPEAKER_15: gpu that you mentioned that's on cars is that does that run the whole neural network locally or is there

SPEAKER_31: a off device component to the computational requirements that you're talking about no everything's running

SPEAKER_33: on board the vehicle uh so a single you know a couple hundred uh tops gpu wow so there was a

SPEAKER_00: paradigm shift at some point where we went from writing lines of code and trying to process the world in real time and say is there a stop sign is there a pedestrian what is happening in the real world and then if this then that hard coding of the world and then these neural networks came out and we just said hey here's a bunch of videos of humans driving correctly do what they did on the streets of london particularly chaotic place um with streets that were designed you know hundreds and hundreds

SPEAKER_35: of years ago as opposed to say a grid system in arizona where it was just plopped in place uh you know in the last 50 years or so or maybe in the 50s maybe 70 years ago so maybe you could just explain did

SPEAKER_00: you start in the hard coding era and then move to the language model era and or have you always been

SPEAKER_26: in this sort of new paradigm no we've been all in on an end-to-end approach uh since you know the my

SPEAKER_27: days of research at the university of cambridge since starting the company uh we've been all in and i know i know it's uh i think gathered a lot more market traction recently uh but seven years ago when we started this was a really contrarian idea everyone in the industry was uh telling me look this would never work this would never be safe but what we've seen is just the most remarkable outcomes if possible i'll give you a couple of anecdotes the first one is we can now train these systems to not just understand how to drive a car with sort of a a vision action model but we can actually also ground them in language so these models can not only drive and understand the world around them but also engage in language explain their actions or even take instructions or feedback through natural

SPEAKER_19: language could i tell a car then alex like could i say hey you know you're going a little bit too fast from my taste slow it down and then it could digest that and then have that impact how it actually

SPEAKER_27: drives yeah or you know we we put an example on our website of uh one of our cars overtaking a double ticket bus in london and it says hey i'm pulling out to overtake this bus because it's it's pulled over for a bus stop and i'm going to tuck back into the lane afterwards it gives you i think a much more of a chauffeur-like experience rather than simply an invisible railway track uh driving

SPEAKER_44: experience so when we look at this model there was a big bet made by tesla and elon that was along the

SPEAKER_00: lines of we don't need lidar human eyes are taking input in and they've been driving for a hundred years these cameras have higher fidelity there's more of them and they're looking in 360 degrees so therefore

SPEAKER_03: cameras alone should be able to solve this problem we're not going to need lidar waymo said no we want as much sensor as possible we want as much maps as possible it sounds like you sit on the non-lidar group maybe you could make the argument for and against lidar as people in the industry see it and

SPEAKER_27: where you think this will eventually wind up look jason we're actually uh sensor agnostic i think ultimately long term a camera first solution will be most scalable it's got the right information to make decisions but bringing in a redundant sensing modality can be a pragmatic way to to get a system to market sooner i think the key thing though is that you need to use sensors that are have a good supply chain uh cost effective and give you surround a redundant vision to be able to get an l3 or an l4 solution to market but cars today that are being produced by major manufacturers have surround cameras surround radar and a single forward-facing lidar i'm not talking about the robo taxis driving in beijing or san francisco but mass market you know high volume vehicles uh maybe not mass market but at least the luxury end of consumer vehicles are coming out with those kind of sensors so of course they're a great platform to bring to autonomy there's still a far cry from some of the robo taxis that you see in san francisco that have enormous amounts of sensing but that kind of sensing is a great place to get started and i think ultimately camera radar or camera only solutions will be able to provide very intelligent level of of of driving of autonomous driving as well how many cars

SPEAKER_48: do you have on the road right now and how long and have you been taking rides or doing rides we've

SPEAKER_27: been developing with our fleet in london for uh yeah the past seven years uh we recently just expanded to the us and i keep an eye out for for what's coming next the really cool thing was i was out a couple of weeks ago we had maybe a couple of weeks of experience driving in the us you know in the in the uk we of course learn highway urban driving but in the uk we don't do things like four-way stop signs there's no ability to turn right at a red light and of course we drive on the

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SPEAKER_27: and what was so cool to see is after a couple of weeks of driving experience in the south of san francisco bay i came out we took the car up to san francisco we'd never been there before uh there's no hd map no prior training from san francisco we turned the system on and what was amazing is is we saw a drive uh effortlessly with the urban driving experience of london the american culture of south san francisco bay and in san francisco we saw our car do right turn red uh go for four-way stop signs and of course uh drive on the right side of the road i mean this is an amazing example of generalization because it's showing the ai take different uh concepts and apply them in new ways

SPEAKER_56: to scenarios it hasn't been to before i think this is the thing that will unlock bringing autonomy to

SPEAKER_19: the world okay so let's just be rude here the way you describe the system that you've built sounds

SPEAKER_15: awesome it is generally applicable to environments that it has learned from before you can take it other places don't need hd maps sensor agnostic has waymo been really really aggressively barking up the wrong tree because i've been blown away with waymo's ability to expand paid rides across the us alex and but it sounds like you're going to surpass them so are they just making mistakes i mean i think

SPEAKER_27: there's a lot to respect for uh the experience that way most put together uh every time i ride in it it's it's it's you know it is a remarkable product experience to be able to go driverless i i think what i'd paint the picture is is a different approach that has an opportunity to bring this technology to scale which is getting this deployed through driver assistance the advantages this brings is you can get global scale um integration into into vehicles and as i mentioned these vehicles have the right equipment on them today to be able to run this level of autonomy and uh you know this is a scale of millions of vehicles around the world and this is through driver assistance that could be a hands-off eyes-on solution or hands-off eyes off l2 or l3 i think this is going to get to scale faster but more importantly bring more diverse data that should enable an ai solution to be able to actually get to an l4 um the future that that you know i think we've been talking about for some some time the key thing though is what is going to bring this to a safe and economically viable solution and i'd really i'd really challenge autonomy strategies on

SPEAKER_59: is it going to be economically viable and i think this path will lead us there let's talk about economic

SPEAKER_00: viability the cars by waymo are 150k 100k people are claiming that's the approximate cost range i'm sure you

SPEAKER_62: have some competitive intelligence is it in that same ballpark in your estimation or your gas estimation

SPEAKER_33: i'm going to be bold and say the cost is zero because we just work with the equipment that's

SPEAKER_27: already in uh con some some consumer vehicles today no no i'm saying what do you think waymo's cars cost right now oh yeah oh oh i'll let you speculate on that one but i i i think you're in

SPEAKER_35: the right would you guess 100 150k is what people say most often so you think that's probably accurate given what you know about sensors and the cost of the car itself by jaguar i think for a robo taxi

SPEAKER_52: that's built on lidar with a ton of on board compute i i that might be a reasonable uh a reasonable

SPEAKER_27: assumption particularly when you're at low volume thousands you know less than 10 000 vehicles and so

SPEAKER_35: they are the leader most number of rides but a high cost elon claims he's going to make these cars for 30k that seems reasonable does that seem reasonable to you that these cars could be made for

SPEAKER_26: 30k ish uh eventually eventually being next couple of years the vision that that i think we're heading

SPEAKER_27: towards is that every single vehicle if if you're producing a vehicle that's not capable of hands off eyes off driving point to point where you can uh you know jump in your car put it ask it we tell it where you want to go maybe give it the style or the the type of driving you'd like it to do and then just sit back read a book now initially maybe there are a few scenarios where it pulls over and asks you to take it forward through an intersection or something like that but over time these data-driven systems should just get better and better until it's um reliably doing all of the drive so a 30 000 car

SPEAKER_44: should have it in the next two three years or and the old the more expensive cars already have it

SPEAKER_25: those sensor packages and compute that's right they need the ai but they have the hardware and i think

SPEAKER_27: that's going to go mass market because really you're talking about a you know two thousand dollar bill of materials it's a couple hundred tops computer that might be five hundred dollars or less surround cameras surround radar maybe a redundant a second computer a redundant computer that that

SPEAKER_03: package that's you know two thousand dollars is your plan to be an oem to all these different car makers who are struggling to get this technology in it and trying to figure out what their future is or is your model to go head to head with robo taxi from tesla and head to head with waymo

SPEAKER_35: and just compete directly or do you see yourself as a provider of cars that have been adopted that

SPEAKER_00: have the technology in them and then provide those to the uber lyft doordash networks what is your

SPEAKER_63: strategy yeah we want to build the most intelligent safe and trusted ai model and i think to do that

SPEAKER_27: you're going to need scale um so we want to work with the leading fleets and manufacturers around the world i guess imagine uh different manufacturers will have different sensor configurations different compute the nice thing about the foundation model that we're building is we can distill it down into different variants it's very flexible in that manner but i'd love to to see our ai power l2 to l5 driving so whether it's driver assistance or some safety features through to hands-off eyes off driving through to uh growing up into driverless as well um with this commercial or consumer vehicles uh i the model that we want to run is seeing ai deployed in as diverse uh applications as possible so you're

SPEAKER_80: to use that you see yourself in partnership with car manufacturers and you see yourself in partnership

SPEAKER_03: with fleets and uh taxi services like uber and left correct yeah we've integrated into cars into vans

SPEAKER_27: with uh we of course do uh we drive every day we've also done some some grocery delivery trials uh i think the more diverse data you get is just going to make the ai safer uh and the key thing is this ai needs to be adaptable to the different different platforms that other manufacturers

SPEAKER_85: and fleets are building when can i experience it when will it be out in a test fleet that i can

SPEAKER_15: access here in the states or will it show up first in like the toyota website when i can click a button

SPEAKER_21: that says add wave you know av 2.0 self-driving technology to this order that'll be the first

SPEAKER_27: uh time the public can experience the product is is as you say just part of a consumer vehicle you can buy um give me a shout we can go for a ride in the in the bay area or come to london we can go for a drive as for timelines when this when this tech's coming to market i i mean you know how much the self-driving industry has been hyped i want to be quite careful not not publicly making a claim like that but it's it's coming soon you know that the hardware's there we've got the um uh clear opportunity regulations coming together we're working as hard as we can to get this ai shipped

SPEAKER_35: it's gonna be awesome how do you see the market the chessboard playing out do you think it's going to be waymo uber and yourself and lyft versus tesla do you think tesla is going to provide this to other

SPEAKER_03: manufacturers do you think you know uh other manufacturers like say a toyota or something will want to run their robo fleets i mean this seems like a game of thrones right now in terms of the different approaches to winning uber itself has i think nine or ten autonomy partners and they put money into your company so obviously they believe they're going to be the aggregator and they'll work

SPEAKER_00: with many partners i think tesla's made it clear that they're not going to work with the aggregators and they want to be the aggregator and provide this so if we're sitting here in five or ten years what are some likely scenarios for consumers yeah i love this this game of 4d chess and it's such a privilege

SPEAKER_27: after a pretty long deep tech journey to to get to where we are but i think there's a lot of analogies you could you could draw on like look you can you can think about uh the cognitive ai the language model space you could think about iphones and androids um i think in in general uh what i point out to is a couple of things the first is it's really important i think you work on the hardest thing first otherwise when it comes to scaling this kind of technology you're you're at risk of hitting some some glass ceilings and uh secondly is when it comes to adopting automation or robotics i think time and time again we've learned is that if you require large infrastructure change or uh support it's going to be much harder to roll out these systems compared to if that they work seamlessly with how society works in an existing way founders do you want to sell to bigger customers i know you

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SPEAKER_27: so i i fundamentally think believe that autonomy of scale is going to be driven by a system that's trusted that can can drive in busy urban environments and merge with traffic interact and all of that kind of intelligent behavior that will come from an ai system and then of course work with the kind of hardware requirements and lack of an hd map that we've been talking about so i'm bullish on this approach it was great to see tesla move that way in the last couple of years i think there's a lot of space to run what we want to do is enable if you think about the 90 million vehicles that are produced

SPEAKER_33: each year you know uh the tesla might be producing a a couple of million of those uh the rest of them we

SPEAKER_99: would love to enable this year i think is the number yeah alec yeah so they're about two percent

SPEAKER_27: of the market maybe more yeah yeah exactly what about the other 98 percent uh i mean unfortunately it looks like we're going to see more segregation between china and the us uh china and the west let's say but for all of those vehicles being produced in the west we would love to to let those uh fleets and manufacturers gain access to this incredibly incredible benefits what will the business model

SPEAKER_35: be you'll just charge the consumer 49 a month for it or it'll be abstracted into the course cost of

SPEAKER_03: the vehicle how do you see your business eventually with these as an oem i guess to these car producers

SPEAKER_00: how do you see your business evolving what's the model would you give them a global license and say hey up to a million vehicles can have this for 10 million a year give us 10 per vehicle produced

SPEAKER_102: per month how do you see your business as with with anything i mean i can i can you know give a

SPEAKER_27: vision today but this is going to evolve as we get going i think ultimately robotics is a uh an exchange of value for time and so i think long term a subscription of an autonomy service that gives you time back or frees up your time is is where we should land it incentivizes parties in the right way to improve the system over time but what we're saying about you know getting things in without causing disruption right now people are used to in the uh automotive space buying with an upfront uh a piece price or fee and so i think uh you know that's maybe where the industry starts particularly at l2 but when you get to l3 where it's a true exchange of value for time yeah i think that's where we'll we'll land some kind of subscription model with the consumer uh and that will be shared between the the fleet or the manufacturer and and of course ourselves providing the ai that makes that possible

SPEAKER_103: i'd pay so much for that i mean i would pay jason 500 bucks a month for a fully self-driving car i think

SPEAKER_44: just straight up 6 000 a year plus the cost of your car plus insurance but your insurance might go down

SPEAKER_35: to a fraction of what it is if it is running this kind of software i mean if you could recapture and

SPEAKER_00: actually do your email or actually do a podcast from the road it's coming we could record this from the from the road and you think about that amount of time sure and you you might pay five bucks an hour

SPEAKER_03: for it and if you were to drive 10 hours a week using fsd that's 200 a month which i think is kind

SPEAKER_93: of where uh elon wound up on tesla right it's 99 a month or 49 a month i can't remember because i i just buy it for 10 grand when i buy a new vehicle i think it plus five or ten grand so you just buy it one time but i think they've been doing a subscription yes alex yeah and take those numbers and multiply

SPEAKER_27: them by you know some significant portion of those 90 million cars produced each year you know scale really matters here not just producing autonomy for an affluent area like the bay area but getting to scale getting this out everywhere it's an enormous opportunity and i'd argue that's just the tip of the iceberg with embodied ai when you start to think about what's possible taking this beyond automotive to other kinds of robotics uh this is this is going to be an enormous market all right

SPEAKER_35: listen this is incredible congratulations on your early success uh it's great that we have this

SPEAKER_00: capitalistic environment alex where y'all are in a dog fight to save human lives and to recapture all this wasted time uh and create a surplus really for for everybody so we wish you great success on this and great competition uh ultimately benefits the consumers and society so you know i'm really excited that you're in the fight and uh i'm excited to see if i order a corvette if i can order wave in it i

SPEAKER_03: really am coveting this new ca corvette alex but i can't i'm i'm a functional i'm a functional idiot when it comes to driving now because i've been using my tesla fsd since they incepted it it was called autopilot and the idea of trying to stay exactly in the road or doing the you know uh adaptive cruise control it's just so much better and so perfect now i get car sick if i'm driving and other

SPEAKER_00: people in the car are going to get cars when you compare it to how smooth you know these these systems are they're getting really smooth they do seem to be jittery though on certain interactions like a traffic circle a left turn they seem to jitter a little bit too much they're not decisive enough as we wrap here is there a solution to that lack of decisiveness we see in these in these systems

SPEAKER_27: yeah well you know how i mentioned working on the hardest thing first i mean starting in london and forced us to tackle that immediately because you you leave our office and immediately you're in roundabouts lots of merging scenarios you've got jaywalkers everywhere and if you're jerky it's going to be a very very uncomfortable ride i mean the the key solution is this just going to a a self-supervised large-scale system that can learn emergent behavior that's like if you think about if you have to hand code all of those factors that require you to behave uh of things that might cut in risks and other factors it's it's just going to cause frequent um slowing down emergency stopping whereas letting the system watch those kind of dynamic scenes and learn emergent behavior that our car pulls out and nudges into traffic pushes it way through crowds and also um courteously lets others uh come in in front of us where appropriate uh that that kind of stuff you see everywhere in

SPEAKER_03: london how do you i mean let's face it when humans drive they cut corners and they break rules consistently we all know that we all know that people roll through stop signs we all know people you know yellow means go a little faster when it in fact means stop so how do you balance what the training data is going to learn from humans which is to on the margins break the rules or to bend the rules let's say let's say bend the rules versus what the law says which has come to a complete stop nudge up to the intersection i mean there must be some balance here and i wonder if it requires

SPEAKER_104: going to regulators and saying hey this is not how humans drive this is not how they take a traffic

David Friedberg: circle you know the by the books method i think it's such an important point because i i if you think

SPEAKER_33: about say cognitive ai these large language models it's a it's a bit of a wild west around some of these safety questions and rules but the advantage is that we have an embodied ai is there is a pretty clear rule set and and i think you need to be able to separate out the safety rules and then within the what is like a safe envelope to make just driving decisions there is a large uh design space of

SPEAKER_27: behaviors that you can have there and so um what i think we're motivated to solve in self-driving and where i think we will quite possibly see uh the solution to ai safety is a is a system that can provably stay within the bounds of those rules but within those bounds provide a sense of collaboration and customization uh that that uh you know the passenger or an occupant can can help prompt the ai to drive in a certain style but those rules are can be fairly well set and then that driving culture that i was describing it's very different from london in the us and our ai has been able to learn how that does differ and drive naturally if you don't do that you see a road rage all around you people you know pissed

SPEAKER_52: off if you're not merging in the right way or or um you know uh accepting the right driving culture in

SPEAKER_00: new york you don't give an inch in la you kind of you know shake your fist at each other and you know but you kind of let people merge on the margins and then in texas people are like no no you go no you go go ahead go ahead it's very interesting even in the united states how different it is the three major cities like four major cities i've lived in are distinctly different and it's largely because in texas

SPEAKER_03: people have guns in their cars and everybody's nice to each other because you don't want to get in a road trade instance in texas i understand because it's going to go a certain direction

SPEAKER_104: everybody's very and they're very um polite in new york nobody's got guns everybody just kind of yells and screams at each other and that's as far as these interactions generally go so are we going to be in a situation where eventually the ai models drive like new yorkers or texans

SPEAKER_37: like i'm going to drive like a new yorker in texas and it gives you a warning hey maybe you need to

SPEAKER_125: a little more polite uh never turn on the boston driving mode jason because everyone for sure i mean

SPEAKER_120: people from boston are the worst the worst terrible well we're building some fun demos where you could

SPEAKER_27: you could drive for a couple of minutes yourself and then ask the car to drive in your style or you could prompt it and ask a drive in a certain way like the key thing is it just knows the bounds of what's safe and within that it should be fully customizable if you travel a lot you got to deal with

SPEAKER_93: renting cars it's just a fact it can be slow confusing and most of the time the experience is stuck in the past it takes an hour to rent a car two hours to rent a car and i recently became aware of a really cool startup called kite k-y-t-e with kite instead of going to a gingy desk tucked into the bowels of some airport parking garage a car is delivered right to you that means you can get a new professionally maintained car brought to your door without dealing with the lines and i use this many of you know i moved to texas i'm in austin and i was in the bay area i was going to be doing a lot of meetings i was going to be traveling around i needed a car all my cars are in austin now so i popped out the kite app bing bing bing i had my car waiting for me at sfo and i avoid waiting around and i had my own car so i could go to all these disparate meetings i had across the bay area you can manage your entire trip in kite's app meaning you can avoid waiting around while someone else enters your data into a computer by hand one slow keystroke at a time it's like that scene from the movie with the sloth at the dmv anyway kite doesn't do extra fees it operates in large cities around the united states and i've used it in both la and san francisco and love it here's your call to action download the kite app or book online at kyte.com that's kyte.com go ahead and download the app now so you have it ready to go use the code jason at checkout you get 10 off your first rental which could be significant don't forget to use the code jason download the app kyte.com right now yeah it's going to be

SPEAKER_00: interesting to say uh you know i'm i want to be zippy uh they do have like i think in to to tesla's innovation they do have a sort of more aggressive mode in their self-driving preferences where you can change lanes more often or not at all which the whole point of self-driving i like is not changing lanes i like the idea of not changing lanes because changing lanes means i got to pay more attention i got to be more vigilant you know as opposed to alex and alex alex squared that you could just you know

SPEAKER_35: kind of chill more if you're in the right hand lane and it's just or in the middle lane you're just cruising at you know whatever five miles above the speed limit yeah where do you guys want to go go

SPEAKER_33: autonomous driving um when we had uh bill gates over he asked to go go for some fish and chips here in london ah we could do a podcast in a car totally we'll do it next time we're there uh great job and

SPEAKER_35: uh oh yeah there it is bill gates uh test driving is he did he invest or is he just a fan has he

SPEAKER_33: invested yet no microsoft is a great partner of ours but um there was there was a fan he's uh he's been

SPEAKER_104: a great supporter of the company well it's fantastic to see so many players out there competing uh to a great competition makes for great products so we wish you the best and we'll check in with you in six months and uh hopefully you'll have some cars on the road in the u.s available uh in the uber network or lyft or doordat hopefully you'll be delivering some burrito great to uh catch up with

SPEAKER_51: alex and we'll talk to you soon cheers jason cheers alex bye oh wow it's great to see alex uh how much progress we're making here huh like um everybody is so uh dialed in so what's interesting about that

SPEAKER_85: entire interview is that it reminds me of a company called deepgram and they were doing neural networks

SPEAKER_15: you know way before the open ai boom and i if i recall like i was talking to the founder he said look what we did was we just took all of language and then we had a computer just learn how to talk or how to translate and i was like well that's pretty cool and this to me with my lack of deep technical knowledge about ai does feel like a similar approach and i'm very excited by it i just yeah i oh i want someone to make this work in providence i don't care if it's tesla or wave or waymo i just

SPEAKER_35: want someone to brand to where i live that's what i want yeah for sure uh it'll be great to have this on the road and uh more options available it's nice to see some competition you know in the space and

SPEAKER_00: it's not just waymo and tesla that you'll have upstarts and i love the idea of people providing you know this technology to other platforms alex like that's actually going to be one of the big wins is that you're not going to be able to buy a car that doesn't have this in it and if there are models

SPEAKER_03: uh multiple models pursuing this you know you'll be able to look at their track records and compare them in the same way you know when i buy a car i think about my daughters and my wife and my dog my bulldogs and what's going to be the safest so i'm like model x suburban model y i want the safest cars for them to be in and so i think what's going to happen is people are going to start looking at the safety records how many miles did this drive how many interventions did it have how many accidents

SPEAKER_67: did it have how many fatalities god forbid did they have and um that's the that's the way i'm going

SPEAKER_15: to judge these oh i i dead on and also i just think by the time that you know my thought is when my kids are 16 what will be the choice and i think by then is going to be so clear as to feel irresponsible to let them drive let alone a stick shift a comment from the audience sebastian asprella says interesting no guns for example in holland and everyone is polite and courteous

SPEAKER_151: between drivers so jason there's disputes about your gun your gun uh driver philosophy what i was told

SPEAKER_00: maybe somebody was being cheeky with me but they kind of gave me the you know texas discussion like people don't do home invasions people don't get in road rage incidents because people generally speaking i have a firearm on them and so like the idea of going into a restaurant and robbing a restaurant at gunpoint there's going to be more guns in the restaurant than on the perps coming in to rob the restaurant in all likelihood yeah yeah yeah i mean it's like the okay corral basically but you you don't know it because you you would you don't see them people just have guns on them and you know i see signs it's very weird you know moving to texas where the signs i would see in new york were if you have a gun you go to jail for a year minimum like and there's no discussion that's

SPEAKER_03: what they try to you know really explain to new yorkers and then in texas it's kind of like in our establishment we don't allow firearms please do not bring keep your fire in your car or whatever please don't bring your it's almost like they're asking you nicely we prefer you don't have a firearm in this restaurant please just you know but it's not like there's a metal detector at the

SPEAKER_157: door no so i'm kind of like why is that sign even there that sign kind of makes me believe that people are going to bring their guns in anyway i wonder if it's a liability thing

SPEAKER_19: so you have mentioned several times on the show that uh you had hoped that the twist 500 would get filled out a little bit faster we've been juggling a lot of different stuff yeah babies in

SPEAKER_168: fact the babies i mean you know the movement company to austin adding shows we've been doing a

SPEAKER_15: lot a lot of fun but maddie and i who's on the uh research team and also the twist team we're going

SPEAKER_19: to get to 250 by the end of the year oh love it great so that is our that's our pledge to you

SPEAKER_15: so we will get that ball re-rolling so expect more interviews guys if you like twist 500 twist 500.com check it out but yes jason microstrategy i i've been in the documents today i've been digging through

SPEAKER_00: i can answer what i like with our pick and roll here our two-man game i have been mixing it up on twitter and hearing a lot of people saying this is a ponzi scheme and the way they're describing mr mstr microstr strategies which is run by michael sailor who is an effervescent enthusiastic entrepreneur this company has existed since the late 90s he got in a bunch of trouble with the sec previously it's been up and down the software business as we've talked about is de minimis and declining but the bitcoin business is vibrant and being invested in massively yes if you bought shares in mr at the peak last week i think was thursday was trading at an all-time high of 500 440 a share when i woke up this morning and i just glanced at it was maybe 380 or 390 or something it was 371 30 as we speak oh okay so it's 370 so you've lost i don't know if you made this trade you know you've lost 150 a share maybe 100 a share or something depending on when you got in so um you know this clearly was overheated and i am not the only one who is saying is there

SPEAKER_03: something here that the markets should be concerned about now one of the great things about markets alex is they are self-correcting if there is an opportunity to short a company there are a group of people who like to do that if there is an asymmetrical outcome here where people believe that you should pay two and a half times for microstrategy and then the value of their bitcoin because michael sailor's got some financial wizardry at work with these convertible notes slash bonds you know financial instruments where he's going to acquire more and he's going to corner the market on bitcoin because he now is the number one holder in bitcoin after satoshi and above the united states government which has been uh seizing bitcoins that are used illegally and trump says he'll never sell them so there's two aspects of this that i just wanted to put on the table right now one is i am long

SPEAKER_00: bitcoin i have always been long bitcoin i bought a bunch under 100 my wife bought a bunch at 100. mine got hacked back in the day when you um had marketplaces for these hers did not and they've we've made a lot of money on bitcoin so i love bitcoin i think it's real the fact that governments have abandoned uh and the fact that it hasn't been hacked is incredible to me and i believe it is here to stay microstrategies now the second piece of this is people like vinnie lingham and other folks who are in the bitcoin community are very concerned at what michael sailor is doing and they think he's going to damage the bitcoin ecosystem and the dare i say brand and the trust in bitcoin because of these um volatile in their minds uh acquisition strategies he has but what in the documents what have you

SPEAKER_03: discovered and you can of course comment on what i'm saying i don't have any beef with michael sailor i don't have a horse in this race even though we own bitcoin we're never selling it yeah i think it's a great part of distributed um you know diverse portfolio so we like having it it's not personal with michael sailor less people think i have it in for him or i'm jealous of him i'm happy

SPEAKER_67: for any entrepreneur to be successful obviously i've been successful myself in my career absolutely i

SPEAKER_03: just am always concerned when i see something disconnect from reality and markets and alex is an expert on markets as well and we like to talk about it here it's not personal i'm not blocking him from being on all in if the other guys want to have him on all in i'm happy to have him there it's not my decision yeah it's a group decision so anyway there's everything you can say i know he's been asking to come on all in you know which was number seven in the rankings last week yeah so very popular podcast so i just want to be careful also platforming somebody and getting more of the audience to buy shares in something when i think there are red flags everywhere and other people are saying red flag red flag red flag i'll stop there one of the reasons why i think the story is

SPEAKER_15: worth coming back to today is the religious intensity of people's complaints about you asking questions

SPEAKER_19: about the company okay because to me if i sat down and said uh zoom the software that we use to record the show quite often the lovely enterprise software company if i was like red red flags everybody i'm

SPEAKER_15: really worried about this everyone would go like yeah well okay fair enough if you can you can think that sure but when it comes to anything that touches bitcoin you end up dealing with these religious fanatics and i've been trying to find a comment from our live chats we're doing this live today someone was like oh the guy who thinks he's an expert about micro strategies is now expert on real estate and i'm like you came into our chat to complain about jason's tweets to that degree what

SPEAKER_198: are you well i mean i own a little bit of real estate and i um was on the board of blockable for

SPEAKER_00: many years and invested millions of dollars and so i do have a slight education on manufacturing of homes and mobile homes um and i've interviewed a bunch of people on it i don't claim to be an expert

SPEAKER_175: on either bitcoin micro strategy or home construction but i do know how to ask a good question or two and

SPEAKER_15: so that's what we're here for it's by the way you should hope that people are constantly asking questions about companies that report their their numbers publicly because that is the immune system of the market the market will self-correct over time but we can shorten those loops by asking a lot of questions so jesus you wanted to know what are the debt terms what is this convertible debt that this company is putting out so i went into the documents these are the two the three billion dollars worth of notes that are due in 2029 they are convertible debt and you ask are they senior they are they are senior unsecured obligations they do not bear any regular interest and the principal does not agree okay why are they valuable the notes are convertible into class a common stock at a ratio of about 1.5 shares per one thousand dollars of principal in the notes so that means that they will convert to uh stock at about a 672 dollar per share rate which is a 55 premium at the time of

SPEAKER_205: issue which is almost double now because stocks come down the stock has come down yes but usually

SPEAKER_03: in a convertible you can also get your money back with a little bit of interest and it depends on who gets to choose that sometimes uh the company would get to choose that sometimes and this is where the devil's in the detail the people loaning the money would get to choose that so that's where and i don't know if they're have to disclose that or if they have disclosed it yet but this is where it could get very interesting because the three billion dollars those people could just say hey i'll take my three billion back plus eight percent a year some interest on it that could be buried in

SPEAKER_00: the documents we don't know about if it is you know they're gonna have a major in five years you know it could be three and a half billion dollars or whatever it is that has to go back to those individuals in cash yes that cash has to come from somewhere so either they have cash or they sell shares in the company or they shell the underlying bitcoin if bitcoin were to be lower this thing could as opposed to going up to 540 and 100 almost 100 000 of bitcoin it could go the other way i think

David Friedberg: and that's one of the problems with owning a large percentage being the number two holder in bitcoin if they have to liquidate it could have a massive price impact so i can answer that to some degree

SPEAKER_15: so first of all starting in uh june 1st of 2028 quote holders of the debt that microtenergy has sold have the right to require the company to repurchase for cash all or any portion of their notes so a year before they actually reached their maturity point the the people who loan the money can say we would like our cash back please thank you with interest or not with interest uh repurchase price equal to 100 of the principal plus any accrued and unpaid special interest i tried to

David Friedberg: chase down the definition of special interest throughout that's in the document somewhere so

SPEAKER_93: they must have defined what special interest is i'm gonna guess special interest is like plus one libor or something or plus three libor or something who knows because there's no underlying

SPEAKER_19: coupon rate it doesn't seem to be connected to the what we normally look for here jason so i think

SPEAKER_15: basically they can get their cash back and the interest is relatively de minimis compared to the principal amount but what that means is if the people who hold this convertible debt do not think that in 2029 when the notes mature that they're not going to make their money that they were hoping to they can just get their cash back and so that's when this feels ponzi-ish because michael sailor is essentially saying look here's a call option on our our equity down the road in the form of a convertible note today and if you want to make your money great but you can also make us give you cash back and if they need to repay then they might need to liquidate some of their bitcoin leading to a cascade because if the uh bitcoin value goes down because they sell it then their share price will go down further and then all their convertible debt could become essentially a a thing

SPEAKER_214: that to be paying cash so i hope that made some sense i spent a lot of time today reading sec filings

SPEAKER_44: well i i think it is important to understand the mechanics of this i think the sec is going to

SPEAKER_03: share a lot of this uh maybe more than they've already shared and then consumers will become more hip to what's going on here and i think somebody um at a higher pay grade than us sure who works in accounting who's a cpa could literally build a model here they know how many bitcoins they have it's 200 000 or something i think uh maybe it's 300 000 whatever the number of bitcoin is yep and then there's a price at which and i don't know what their cash reserves are because he doesn't like to keep

SPEAKER_00: cash his whole concept is the treasury is in bitcoin yes so i don't know how much cash he has and then you have to predict how much cash is he going to have there and i think he's talking about doing this every year so i wonder how much more of these converts he's going to do because i think the concept was to do a convert every year or do bigger converts and buy even more bitcoin so now you have the criticism i've heard of this yes is he's going to have an incentive to do a bigger convertible that convertible then is going to go buy more bitcoin clear out holders people have been long-term holders who've wanted to move large positions so if you wanted to move a billion dollars in bitcoin or 5 billion in bitcoin like now you got a whale in the system who wants to buy it and they are a large

SPEAKER_03: portion of the buy side that would drive the price up price goes up stock goes up ability to do another

SPEAKER_00: offering goes up and maybe this can keep going for a long time or would the people who are providing this

SPEAKER_03: convertible debt say you know what interesting offering we want tighter terms we're going to need clawbacks we're going to need a 2x liquidation preference we're going to need some more structure here

SPEAKER_00: and if at maybe they'll put in there at if any if bitcoin goes down below this number you've got to liquidate and pay off 25 of this bitcoin hits this number you got to liquidate it pay off 25 of it so maybe the next note depending on how bitcoin goes will be more structured and have more covenants as they say in the business in other words things that if they get triggered would cause actions to occur

SPEAKER_15: i.e a default yes there are a lot of default terms that exist but they seem to be mostly around uh changing company control which is a pretty standard thing for example there's some anti-dilution preferences in there as well the thing that i have not been able to understand and chase down and really get to the root of though jason is why micro strategy trades at a multiple to the value of its underlying bitcoin everyone agrees the software business at micro strategy is pretty much moot and we all know the value of the bitcoins they hold and by the way last time they told us it was 386 700 bitcoin just chase that down for you but why do they have this this massive premium on the net asset value of their underlying bitcoin and i have not found any answer i read your tweets i read the responses and people were mad at you for asking why and then just saying do your own research which didn't help at all so have you found anything here here's the thing when people tell you put in the

SPEAKER_03: hours do the research and when michael sailor says i can't explain it in 300 characters i have to come on the all-in podcast to explain it or this week in startups to explain it i get a little nervous yeah because almost all the businesses and i've invested in 400 startups and you know i've been a journalist for you know over a decade covering them done 2 000 episodes of this podcast i've been around the block let's say uh in terms of assessing businesses anytime it's too difficult to understand in my experience yes i'm not saying this is micro strategy but when people tell me do your own research have fun being poor you know it's too complex for you to understand the last person who told me it was too complex for me to understand was doh kwan he was picked up in montenegro i think

SPEAKER_15: doh kwan was um the stable coin that was the algorithmic stable coin uh uh help me out here

SPEAKER_228: jesson what was it called doh kwan was doing terra he was the ceo of yes yeah i think he's in jail

SPEAKER_03: we can link in the show notes to his episode here he tried to explain to me i gave him two or three times to explain to me how this all worked and um he was arrested i'm not saying michael seller's

SPEAKER_00: gonna get arrested what i will say is there is a pattern yes if you were to ask i don't know adam newman to explain how we work was worth i think he said hey community ebitda he came up with his own term community even yeah b2c yield i think is a term that michael salary used this morning btc yield that i didn't know that there was a yield associated with bitcoin i don't understand

SPEAKER_15: what he means by that term like is it it's not yield so uh community adjusted ebitda for folks who might forgot was the famous metric that essentially we were invented because adjusted ebitda was too strict to make its numbers look good so they had to make it just any of it is too strict you got a problem you got a big little problem now red flag btc yield is something that i flagged and i said it was notable in our notes on monday which was my sarcastic way of saying wtf so btc yield is a term that does not reference yield what it does is draw a ratio as far as i understand between the total number of bitcoin that microstrategy owns and each block of 1 000 shares outstanding and so it's essentially uh how many bitcoin per thousand shares of microstrategy that are out there okay that's not yield that's a ratio it's the ratio of how much bitcoin you get per share

Chamath Palihapitiya: whenever people make up new terms for revenue or expenses any of this stuff it's going to be a pink

SPEAKER_00: flag or a red flag pink flag is what i wave on the way to a red flag red flag means stop don't participate in this pink flag is can we ask some questions if you're a microstrategy holder my best advice to you if it was a family member said hey i put a hundred thousand into this i double my money my best advice to a family member and this is not financial advice for anybody else this will be for my brother sure my mom i'd say sell it you doubled your money sell it and then go buy bitcoin directly

SPEAKER_03: if you love bitcoin because now you're going to get four bitcoin for every one that you bought last month

SPEAKER_00: if you in fact doubled your money and it's you know this whole thing not your keys not your coins you know you probably want to own it yourself have your own coins or maybe be in something that's

SPEAKER_93: super trusted like coinbase or robin hood and i'm i'm long-term sure holding robin hood but you know

SPEAKER_03: here we are another great episode i'll have michael sailor here on this week in startups if the other

SPEAKER_00: guys want to have him on all in happy to have him on he can explain it it's not personal with michael

SPEAKER_103: sailor just so we're clear i'd love to have him on the show it'd be a great conversation but just just

SPEAKER_15: to be clear we couldn't figure out the root cause of why they traded such a premium to the nav no one's managed to explain to us no financial coverage has explained to us i've yet to read a single good explanation of why other than stonks go up and that's not a good long-term investing position in my view just but yes we got a wrap when are we back what's our uh what's our return

SPEAKER_258: from thanksgiving plan i think we're monday we're monday monday monday so we'll see everybody on monday and talk to you soon bye