SPEAKER_00: It's been done, so maybe, I mean, listen, I don't describe any bad intent here, but you thought people wouldn't be confused?

SPEAKER_01: I would say the majority were not confused, but hey, you're confused.

SPEAKER_02: You explicitly did it with the TechCrunch one to confuse people,

SPEAKER_03: so let's call it what it is. You're hacking media to confuse people to get attention, correct?

SPEAKER_05: Sure.

SPEAKER_08: This Week in Startups is brought to you by Lemon.io. Hire pre-vetted remote developers and get 15% off your first four weeks of developer time at Lemon.io slash twist. CLA. Innovation takes balance. Our CPAs, consultants, and wealth advisors can help you get from startup to where you want to end up. Get started now at claconnect.com slash tech. And dot tech. Say it without saying it. Head to get.tech slash twist or your favorite registrar to get a clean, sharp dot tech domain today.

SPEAKER_00: All right, everybody, welcome to This Week in Startups. I'm Jason Calacanis, back home in Austin, Texas.

SPEAKER_12: Had a great dinner last night with my team, my growing team. I don't know how many people we're up to, but man, launch is growing. With me again today, Alex Wilhelm.

SPEAKER_13: You know, from TechCrunch, cautiousoptimism.news.

SPEAKER_14: Is that right? Nailed it. First try, Jason. I'm so proud. Cautiousoptimism.news. I got posted up.

SPEAKER_15: Go ahead. I think you should go to your daily right now, right?

SPEAKER_02: Yeah, five days a week. Not the right move. I need deeper insights from you. I'm going to just give you, I'm going to be your editor in chief.

SPEAKER_20: I think you should go to two or three days a week. Let the news build up. Because the news is a commodity now. All the bullet points, Alex. And I think what people would rather have is your insight, your take. So I'm going to give you permission to run an experiment. It's your choice. Obviously, it's your business. To try that for August. Alex's analysis. Because when I see you cover the bullet points, I'm finding I know 80% of what you're saying. You're just taking the time to type it. But I don't care about that. I know the headline. Your readers are so in the know that I think you should just do the headline.

SPEAKER_21: Alex's analysis.

SPEAKER_22: I will play with this and I will let you know how it goes. Thank you for the idea. It's just an experiment. I love experiments.

SPEAKER_24: Is there a shorter version? Alex's analysis? I feel like we're almost at something. We've almost got so soon. Alex's analysis.

SPEAKER_30: Alex's analysis. Alex's analysis. Two idiots, Lon and I do all day.

SPEAKER_32: He's branding games and make memes and do jokes. Trying to come up with fun.

SPEAKER_35: All day long. All day long. That's our life. The life we've chosen.

SPEAKER_37: All right. And with me, of course, Lon Harris.

SPEAKER_36: Hey, everybody.

SPEAKER_37: Our editorial director. Hey, you know, we had a great meeting last night with our team.

SPEAKER_20: Yeah. One thing I realized is we need to, you know, I have the pilot co-pilot concept.

SPEAKER_24: What do you mean by the pilot co-pilot concept?

SPEAKER_20: It's something I learned in management. I used to have very few resources. So I would staff. We used to say man. But I would staff. Now I staff. I don't man. You understand why, Alex?

SPEAKER_43: Yes. Because your team is majority women. It's absolutely true. You know, I have three daughters. So I say staff. We staff. Yeah. Yeah. No, I'm with you. I appreciate that. I'm teaching people. I'm teaching people. Yeah.

SPEAKER_37: There was a period in time where at the, we had a woman who would come, an investor who

SPEAKER_20: would come to our accelerator and every time somebody used the wrong gender pronouns or whatever, when she would give them a review of their business, she would start with like a five minute lecture. You said sales guys. I would like you to know that there are women who work.

SPEAKER_37: And it was just like, it was like clockwork. It was just like, oh my God, these poor founders.

SPEAKER_20: So I had to like do a thing like when she would come and say, I just want you all to know that there are firefighters, not firemen. They're firefighters. Like you gotta understand the non-gender words. Anyway. All right.

SPEAKER_00: There's a lot in the news. I like coffee.

SPEAKER_47: We've got a big coffee story.

SPEAKER_00: We've got a big coffee story today because I remember a great fraud that had occurred with something called Luckin Coffee. And Alex remembers it as well. But this incredible baked books, which, you know, baking the books in China's, I don't want to be derogatory here, but it's not uncommon. Right. Let's just say that. It wouldn't be like a shocker that somebody had put their thumb on the scale.

SPEAKER_02: So they had some sort of accounting scandal. Sure. But the news now is that they're launching in New York. Correct. So we're talking about-

SPEAKER_20: And that this meme has merged with the socialism meme, which means I'm interested. Coffee and socialism, let's go.

SPEAKER_24: You and every undergraduate poetry student loves coffee and socialism.

SPEAKER_54: So yes, you summarize Luckin.

SPEAKER_57: They're a Chinese coffeehouse chain founded in Beijing in 2017. They have been rapidly expanding over the last few years. Luckin stores in mainland China now outnumber Starbucks, which is an incredible stat to think about they are opening two locations in Manhattan, Greenwich Village, and Chelsea. Now, as you mentioned, Luckin was accused of accounting fraud in early 2020. They denied it. But then later after investigations, the company did admit to falsifying around $310 million worth of $310 million worth of $310 million worth of $219. That is a lot of coffee. How do you even fake that much? You got to fake buying all those beans, brewing all of those cups of coffee.

SPEAKER_64: That's a lot.

SPEAKER_63: I mean, I can tell you a million ways to run a scam like this. It's pretty simple.

SPEAKER_00: I mean, you just count the number of cups and then somebody at the manager at the end of the shift who refreshes them just takes 50 cups, puts 50 extra sales in the register

SPEAKER_65: and you count it up.

SPEAKER_57: So the company got hit in China. They wound up going through bankruptcy procedures in 2021. They emerged from bankruptcy. Oh, I didn't know that. Emerged from bankruptcy in early 2022, and that was when they started this new international push. So they've expanded to Singapore and Malaysia already, and now here they are. They have landed in the U.S. of A. Their 2025 Q2 earnings showed 47% year-over-year growth, $1.72 billion in total revenue, and GAAP operating income of $237 million.

SPEAKER_70: 26,206 locations around the world.

SPEAKER_72: That's a lot. That's a lot of coffee. That's a lot of coffee.

SPEAKER_00: Now, this has become quite successful for a number of reasons. One is price. Yes. They've realized that sugar, milk, ice, and coffee, none of those ingredients in and of themselves are particularly expensive. Yeah. So they have run the price down on these things.

SPEAKER_57: Another leg up, a variety of drinks. Like they have a lot. It's some of the TikToks we saw compared it. It's almost more like a boba shop with their variety of different kinds of drinks than just a coffee house. So a lot of those drinks probably have less expensive ingredients than coffee in them.

SPEAKER_60: So you can also cut the price there. Yes.

SPEAKER_08: And I just want to add here that there's a difference between the way we think of coffee shops here in the States, or probably Europe as well, and the way Luckin operates in China.

SPEAKER_17: It's mostly a mobile ordering experience. And then you arrive, pick up your drink, and leave. So you can have higher efficiency stores and therefore, Jason, lower prices.

SPEAKER_82: So it's not a place where you have newspapers laying around, Starbucks chairs.

SPEAKER_84: It's not a third space. It's not a European experience where you drink out of a ceramic cup.

SPEAKER_02: And that's super interesting when you think about it culturally. In Europe, to ask for a to-go cup is like, they're like, why?

SPEAKER_85: Just drink your coffee and enjoy the moment. Relax.

SPEAKER_86: Smoke three cigarettes. Enjoy your coffee. Why not? Sure. Just pop it out. Why not pop it out?

SPEAKER_89: So, race for impact, boys. I'm over-dacking now. Now it's a show. For those of you watching at home, now it's a show. Now it's a show.

SPEAKER_97: So, and then America, we got used to, yeah, like having a... Very space, place to work.

SPEAKER_60: On Starbucks was always very explicit about, it's like an Italian coffee shop.

SPEAKER_24: The drinks have Italian names. It's that leisurely European vibe. Sit down, grab a comfy chair. And yeah, we've talked about how that is a little bit out of step with the times that we're in when people want to like go into Starbucks, get their drink and go. And now you're in line behind eight kids who want unicorn frappuccinos. And now it's your whole afternoon. So Luckin is a different experience.

SPEAKER_102: What's been the reaction to this in my hometown? I wonder.

SPEAKER_24: I mean, on one level, they're embracing it. They were doing pop-ups. They got those long lines, just like you always do when you have Instagram-friendly pop-up social media experiences. People don't want to miss out. What is this new matcha thing people are drinking? But there has also been a little bit of a pushback about the communist China origins of the company. And people are making connections to the candidacy of Zoran Mamdani, the democratic socialist candidate who has taken over New York.

SPEAKER_105: Where are they expressing these opinions?

SPEAKER_00: I'm just going to, I'm wondering where would a young socialist in New York comment on the communist coffee company?

SPEAKER_24: I mean, it's all happening on TikTok, as we say so often on the show. Who owns TikTok? A Chinese company called ByteDance with connections to the Chinese company. And Jeff Yoss.

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SPEAKER_39: So, the CCP, the Chinese Communist Coffee Producers, own the Chinese Coffee Party.

SPEAKER_123: Yes, they own the TikTok. The caffeinated Chinese coffee party. Coffee company.

SPEAKER_24: And now they're going to own New York City. They're coming. I mean, they're coming for New York. It's a little bit aggressive. Do you want to see? We've got some of these TikToks.

SPEAKER_132: Oh, we do have TikToks. Okay, great. We can look at a few Luckin' TikToks.

SPEAKER_134: All right. So, we have some options here, Lon. We have the official announcement one. We have the local news coverage. And then we have the woman in the hammer and sickle jersey. Yeah, I'm going with three.

SPEAKER_135: Hammer and sickle jersey.

SPEAKER_136: Do it. Let's do it. We've got options. We've got options. Somebody get their daughter.

SPEAKER_138: All right. Here we go. Let's do it, boys. Okay, here we go.

SPEAKER_141: Hey, guys. Come with me to get a $2 cup of communist coffee. Yeah. So, this specific coffee shop has more locations in China than Starbucks does.

SPEAKER_144: Um, okay, I'm going to come back to make a video there later. But no, this company went through a $300 million accounting scandal where they faked their profits because capitalism sucks, and then they started paying their workers and putting the money back into the coffee and what actually matters, and now they're more successful than Starbucks. European family that doesn't know how to walk on the sidewalk. She's so New York. Of course, this location is right by NYU campus. Should have paid your workers. Oh, man. If you're from New York, you know how close this strip of box is. So, the fact that the first Chinese communist coffee shop is on this strip is crazy. It's brought up Broadway.

SPEAKER_160: Yeah. It's the very first store in the U.S.

SPEAKER_161: Oh, they numbered it.

SPEAKER_162: And I got the iced coconut latte.

SPEAKER_161: Iced coconut latte? That sounds good.

SPEAKER_162: They also have a pineapple cold brew. Time for a little review. It's so loud in here.

SPEAKER_144: She's beautiful, and it is full of finance bros in here, but the barista complimented my shirt, so.

SPEAKER_166: We see each other. Recycling for no waste.

SPEAKER_170: All right.

SPEAKER_168: No, wait, wait, no, no, no, you missed the banger.

SPEAKER_170: There's a total banger in here. Yeah, we got to keep going, Alex. You got to keep going, because this is, like, amazing. Now, is she, is that, like, a European accent?

SPEAKER_173: Chinese companies coming to the U.S. No, I think she's a New Yorker, this girl.

SPEAKER_178: I'm sensing, like, she's got a little bit.

SPEAKER_179: Oh, did you hear that one? Rewind that a little bit. This is her best line. This girl's all bangers.

SPEAKER_180: This young lady is all bangers all the time.

SPEAKER_146: Wait, I'm sorry.

SPEAKER_182: I spoke over again one more time.

SPEAKER_146: This could be the beginning of Chinese companies coming to the U.S. and disrupting the market and being better than American companies, even though it's literally a communist country. They're better at capitalism than you are.

SPEAKER_189: Ooh.

SPEAKER_188: That stung. That stung. She got me on that one. She's right.

SPEAKER_189: Jangita. This is Jangita on TikTok, by the way. Shout out to Jangita. D-J-A-N-G-I-T-A.

SPEAKER_190: No, this isn't like any other coffee. I think I've had.

SPEAKER_192: And this is also just in time for the Dunkin' boycott, because not every company needs to be talking about eugenics in their advertisements. Ooh.

SPEAKER_196: Ooh, she's taking out Starbucks, Dunkin'. Yeah. Capitalism.

SPEAKER_198: Keep going, girl. Keep going.

SPEAKER_202: Making lots of enemies today.

SPEAKER_203: Smooth, okay. Smoothie can.

SPEAKER_205: It goes down, like, super smooth.

SPEAKER_206: Yeah, socialism usually does go down smoothly at first.

SPEAKER_207: Yeah. The other side that you got to worry about.

SPEAKER_00: There's a lot to take away from this, I think. I'm sending this to my guy, J.D. Vance. I'm going to send this to J.D. Vance, because this feels like this is the beginning of a MAGA angle that we could go after here,

SPEAKER_20: which is that the Chinese companies undercutting American brands. Let's just let this sink in for a second. Well, we saw- We're allowing- Go ahead.

SPEAKER_57: Oh, I was just going to say, fast fashion. We did see this. We saw it with fast fashion.

SPEAKER_24: Your American companies got beat by Sheehan and those-

SPEAKER_20: You cut me off at the pass.

SPEAKER_24: Oh, sorry. Go ahead.

SPEAKER_20: No, it's okay. I'm going to give my rant, because this is a mini rant. America is so dumb that we're going to allow Luckin to come in. Sponsored by the CCCCP, the Chinese Communist Caffeine Coffee Party.

SPEAKER_213: Collective party.

SPEAKER_20: Collective comrades. We're so dumb that we've let TikTok come in and take over social media and program our children. Now, we're going to allow them to come in and destroy one of our iconic brands by undercutting them. Keep in mind that this, if China really wanted to damage one of the great strengths of America, it's our brands. Why are we allowing them to come in and do this? I know that they're allowing Starbucks, but Starbucks has been struggling, and they're going to sell off the business in China. I guess my question- So hold on, let me finish my rant. Keep your questions, gentlemen. I need to finish my rant here, please. This is the start of a communist tsunami. This is a brilliant technique by the comrades in China. Pick a company, our automotive companies, and then send BYD in with the ships we talked about just on Monday. Send Luckin in. Undercut every American brand. Get all those jobs onshored to China. Have all that money and all that profits come back to China, which, by the way, is exactly what we did to them. We said, hey, make our iPhones. Designed in Cupertino, made in China. The people in China made a buck an hour. They were jumping off the buildings. Had to put safety nets around the Foxconn buildings to keep all the suicides, because they were working six days a week, putting in tiny screws and just the most arduous labor you can imagine, or amongst the most arduous labor. And now they know our playbook, which is build a great brand and win the hearts and minds of consumers. This is something that is being done deliberately, strategically, and thoughtfully and deftly by the Chinese Communist Caffeine Coffee Company Party. They're doing this on purpose. They see, okay, Instagram is number one. We bring in TikTok. Tesla is number one. We bring in BYD. Starbucks is number one. We're going to bring in Luckin. And what's the next thing to fall?

SPEAKER_220: What's an American iconic brand that they will want to take from us next? Disney Parks? The NFL. The NFL? Well, I mean, seriously.

SPEAKER_57: It's already happening. The number one most profitable animated film, box office-wise, around the globe of all time, came out last year, or earlier this year. It's called Nizha 2. It's Chinese? I don't know it. They already are making... Pull it up on screen. Let me see that. N-E-Z-H-A-2 is how you spell it. They're already making blockbusters that exceed Hollywood films in China. There was also, I think, 2024's top film was called Detective Chinatown, and it was a Chinese movie.

SPEAKER_24: And so, yeah, they're already taking us out in the entertainment field.

SPEAKER_226: I'm taking action here.

SPEAKER_121: I'm putting a 100% tariff on Luckin Coffee. Oh, I'm going to try it. It sounds good. It's okay. You could try it, but not for $1.99. All right. You're paying $3.99.

SPEAKER_00: And that $2 is going to re-education camps here in the United States to re-educate all these communist sympathizers.

SPEAKER_230: Okay. Are we so threatened...

SPEAKER_60: My question is, are we so threatened by China

SPEAKER_24: because they are our largest rival? Is it because they are communist, or is it something else? Because I feel like if this was a Brazilian coffee chain, if this was a Thai coffee chain, I don't think anybody would care. Everybody would be like, oh, cool, a Thai coffee chain. I want to try that. But for some reason,

SPEAKER_57: we've elevated China the same way we did, I feel like, the USSR and the 70s and 80s.

SPEAKER_234: For good reason.

SPEAKER_20: I mean, maybe. For good reason. Maybe. They've got a billion four people. They are extremely ambitious. They're hardworking, and they are cutthroat. This is a cutthroat rival. But I mean,

SPEAKER_236: is that not all true of India? And that if India opened a coffee place?

SPEAKER_237: Tell me the Indian brand that's taking over our social media. Tell me the Indian brand taking over our cars. Tata's not dumping cars around the world. No, that's true.

SPEAKER_24: But if this was an Indian coffee chain, I don't think anybody would be like, oh, there's so many Indian people. They're coming for our coffee. Here's what has to happen.

SPEAKER_243: One of the themes we talk about over and over again on This Week in Startups is making sure you do your chores. I'm no expert on these things. I have some experience. Steven Estes from CLA is an expert. Let's talk about being cash efficient. Tell us about efficiency and what you see in the top tier startups in your practice.

SPEAKER_247: We're seeing kind of an interesting trend out there where companies aren't needing to raise quite as much as they had in the past. You really have to be careful as a founder to only take on as much money as you really need. You've got to do the forecast and you've got to do the modeling and you've got to dial it in and get it right. Otherwise, you're going to end up either not raising enough capital to get to where you're going and you're going to have to go get venture debt or go back, have an extender to the round or you're going to give up too much of the company

SPEAKER_250: because you just didn't recognize how much money you actually needed.

SPEAKER_243: Yeah, very important to get this stuff right, folks. And that's really a bummer when startups don't do things in a button-up way. Always have a great partner. A good partner to have

SPEAKER_252: on this adventure while things change. My friend Steven over at CLA.

SPEAKER_255: Visit claconnect.com slash tech. And don't forget to mention that your boy Jake Al sent you. That's claconnect.com slash tech. Start today.

SPEAKER_20: What's good for the goose is good for the gander. I'm putting a $2 tariff on it and if you want to launch your company here, you have to have a local partner. So you need to give 49% of the company like we do when we're over in China. You got to give four, you have a local partner and some Americans got to wet their beak on this and we got to have, we got to have somebody from the administration on the board with a golden vote. A golden vote.

David Friedberg: I'm putting my guy, Howard Lutnick, on the board of Luckin Coffee USA. We're taking 49%. It's going in the

SPEAKER_264: sovereign wealth fund. What's going on? USA. No, Jason. No free trade.

SPEAKER_17: No, no. It's over. All of this is so, oh God. Okay, so a couple things. A couple things. The reason why

SPEAKER_134: Chinese companies are coming after American brands is that the free market gave room for American entrepreneurs to build iconic global brands. Now, in the case of BYD, we are seeing the impacts of basically an industrial policy at the national level in China, subsidies and so forth. So that, I think, is a market distortive area. In the realm of coffee, while we joke about the Chinese communist caffeine collective, whatever, it's not actually part of the government system. So in my view, by telling American consumers you can't have lower price coffee because Starbucks can't compete with this company, we're just reducing consumer welfare. And by approaching them and demanding golden shares, Jason, all we're doing is aping the CCP. So when you and I see that young lady wearing her, I presume, tongue-in-cheek hammer and sickle jersey, I didn't think your response to that was going to be, excellent, let's put that stamp

SPEAKER_270: on the U.S. by forcing the same practices here. We're supposed to be better.

SPEAKER_72: Okay, I'm looking for reciprocity here. You are correct about free markets. You're also making up

SPEAKER_00: a very good point. BYD is subsidized, which is called price dumping in America. Agreed. So we say no bueno to price dumping. What is a $1.99 cup of coffee for a ginormous thing? It's price dumping.

David Friedberg: I believe Luckin Coffee is engaged in price dumping. I'm bringing back Lena Khan on special assignments.

SPEAKER_278: I call on Lena Khan to run a new division

SPEAKER_00: which will stop communism and socialism spreading into our country. Lena Khan, you are now part of the 47th administration. I'm calling my connects. You guys know I'm very connected. I'm calling my guy Lutnick. I'm calling JD Vance and I am going to bring this to the top of the agenda. No price dumping. You need a local partner. We get our bets.

SPEAKER_02: We wet our beaks if you want our market. No, in all seriousness, I do think it's like the price dumping is the issue. I don't mind the competition but I do wonder if they get to bring their brands here, there's a Disneyland in,

SPEAKER_281: is it in Hong Kong? Shanghai. It's in Shanghai.

SPEAKER_02: I want to know if we could ask

SPEAKER_282: producer Claude who's incredible by the way and I have my common browser set up to use producer Claude. Oh, nice. You can set your default. Look at this.

SPEAKER_283: I can try out

SPEAKER_136: opus 4.1 now. It's for complex challenges. Don't get ahead of the docket lawn. That's coming up later. Oh, well, anyway, a little dramatic foreshadowing. Yeah, let's ask it this question.

SPEAKER_287: What do you want to ask?

SPEAKER_85: Yeah, let's do it. Well, no, what I really would like to know from producer Claude is He's listening. What's the deal?

SPEAKER_288: What's the deal with Disney Shanghai? What is the deal?

SPEAKER_295: Who are these people?

SPEAKER_296: Who are these people getting 49% of Disney Shanghai? I want to know who owns the 49% of Disney Shanghai.

SPEAKER_237: Is it Xi Jinping personally? Who owns it? Because we have to have a partner there. Bobby Iger and Donnie and Eisner. They had to cut a deal.

SPEAKER_57: The Shanghai Shendi Group, a Chinese state-owned enterprise, owns 57% of the Shanghai Disney Resort. What? The Walt Disney Company owns 43%.

SPEAKER_296: All right. That's it. I want, I'm upping my 49%. We need 58%. If you take 47%

SPEAKER_20: of Disney, I want at least 62% of luck. Case closed. I have given my verdict. Yeah. Thank you to producer Claude.

SPEAKER_54: So did you see how speedy Opus 4 was with that answer?

SPEAKER_237: I mean, if we put Oliver on that, it would have been seven minutes instead of seven seconds. Producer Oliver

SPEAKER_57: is doing a great job. He's great, but he's a human.

SPEAKER_305: Give me number two. You have a number two culture story here. I do.

SPEAKER_57: I do. It's a big, it's a big, it's a historical milestone. We've all seen this coming, but it's nonetheless

SPEAKER_24: an end of an era. Now that Disney owns Hulu outright, they purchased all the remaining shares that Comcast still held. They are going to sunset Hulu as a standalone app and platform and integrate it entirely within Disney Plus. By 2026,

SPEAKER_57: everybody will have a unified Disney Plus. Now you'll still be able to, if you want to just subscribe to Hulu content, you'll be able to do that. You can access just your Hulu or just your Disney Plus,

SPEAKER_24: but it will all be under the Disney Plus umbrella. Bob Iger told investors he thinks this is going to be not only a better, cleaner, less confusing user experience, but he thinks it's going to cut down on churn. Fewer people are going to unsubscribe because they'll already have Disney Plus and Hulu ready to go. And because these two, they already have the same ad team, so this is going to unify a lot and allow them to bundle and do a lot more with ads now that it's just one platform and they don't have to worry about supporting Hulu and Disney Plus. In addition, this is also an interesting footnote. They're going to sunset the star brand internationally. When Disney first entered the Indian market, it bought Star India, which was the big native Indian streaming platform. And so in India, all this time, it's been Disney Plus Star. That's going away. Star is also going to just become Hulu in terms of brand.

SPEAKER_306: Fantastic. This is a great thing. We predicted it. And what this will do

SPEAKER_307: is if we could get producer Claude on this, I'm curious where Disney Plus and Hulu are in their subscriber bases and where Netflix is in relation to this.

SPEAKER_02: Because consolidating these two, I don't know the overlap and subs, but this has got to be pushing, I would think, Disney over 200 million.

SPEAKER_311: Well, we'll find out in a second.

SPEAKER_13: Yeah. And where is Netflix at, Alex, in terms of their subscriber base? And what was the first year

SPEAKER_307: Netflix offered the streaming service? Because what we have, anybody who's got it.

SPEAKER_301: Netflix is just over 300 million global subscribers.

SPEAKER_24: Okay. I'm going to look up when they introduced streaming.

SPEAKER_56: It was like, oh, January 16th, 2007 was when they first started.

SPEAKER_305: Okay. So they're at 18 years.

SPEAKER_02: Disney Plus was five years ago, I believe, when they did that introductory $6. I think it was six.

SPEAKER_132: I think it's more like six years, 2019, before it was pre-pandemic.

SPEAKER_307: Now, I made a prediction on CNBC and I'd like Producer Claude to find it.

SPEAKER_00: I made two really spicy predictions when I was doing my CNBC rounds. One was, they got to get rid of Tim Cook because Apple

SPEAKER_13: cannot come out with innovative products under Tim Cook. I want to get that call and we'll talk about that on Friday and maybe a little mini victory for me. It's done great in getting an extra $3 out of every iPhone, every iteration.

SPEAKER_02: But I think I predicted

SPEAKER_00: that there's a possibility within the first 10 years that Disney would eclipse Netflix and that it would certainly be Netflix,

Chamath Palihapitiya: then Disney, then whoever else.

SPEAKER_60: So core Disney Plus subscribers are at about 128 million.

SPEAKER_57: As of the end of last year, the last time we got an accurate Hulu count, they had an additional 52 million.

SPEAKER_24: So put them both together, you're close to 180 million, well behind of Netflix's 301.6 million

SPEAKER_57: as of August 2025.

SPEAKER_12: Also owned, and big news out of ESPN today that they sold 10% of ESPN to NFL.

SPEAKER_77: To NFL. ESPN Plus has 24.1 million subscribers.

SPEAKER_12: That sounds about right. Yeah. So now we're at 200 million plus. Yeah. In six years,

Chamath Palihapitiya: Disney has achieved 66% of Netflix's 20, almost 20 or one.

SPEAKER_77: In 2017, when Disney first announced plans to launch a streaming service,

SPEAKER_57: Calacanis told CNBC, quote, it will be very easy for them to get tens of millions of people to subscribe. And he said, Disney is the one company that could compete with Netflix and streaming content

SPEAKER_132: from Amazon Prime. He predicted the top streaming platforms will be Disney, Netflix, and Amazon.

SPEAKER_255: We all understand the importance of a crisp, memorable, easy to spell domain name. One of those names you can say over the phone and people know how to type it in without asking you the spelling. But let's get real. The good ones are either taken or there's some poacher who's holding it and waiting for some huge payday and they don't reply to you. Even if you want to pay for a premium domain, you don't want to use up all your runway on a domain name. That's just the truth for a startup. You want to put that valuable cash back into your startup's operations. So you should consider this, a .tech domain. You can get a clean, crisp, super memorable name for your website and company and signal out loud to your customers and investors we're a tech company that's instant branding for you. That's why over 500,000 founders have collectively raised over $5 billion in investment building their companies on .tech. So skip the hassle, head to www.get.tech slash twist or go to your favorite registrar

David Friedberg: and grab your .tech domain today.

SPEAKER_77: That's what Claude gave me. 2017, 2017 when Disney announced. Okay, so that was eight years ago. That was when they first announced Disney Plus. It didn't even launch for two more years. So I need a victory lap.

SPEAKER_332: I need a victory lap. I'm going to go back on CNBC to take this lap.

SPEAKER_00: But this is big news and I also said I think on that that Disney Plus was missing the hugest opportunities ever which is to make Disney Plus the singular place for all Disney services.

SPEAKER_02: The fact that they have not listened. I need somebody to get me a Bob Iger interview and if I ever had another job it would be a studio head. I would love to run Disney. I'm putting my name in the ring. If this happens I'm folding up shop you're all coming with me to be on my Disney CEO jaunt.

SPEAKER_237: So I would like the Disney I'm throwing put me in the as I said put me in the put me in the game coach.

SPEAKER_336: I would love to be a little internal reference for the Twitter.

SPEAKER_337: I would love to be CEO of Disney.

SPEAKER_339: Heck yeah. Oh here's what I do. Okay. Day one Disney merch

SPEAKER_03: is a tab in the app. When you're watching a show when you get to the end of the show it shows you all the Disney merch and says

SPEAKER_02: since you just finished Lilo and Stitch or you know since you just finished watching whatever TV show here's the Fargo merchandise page and since you completed season one you get 20%

SPEAKER_03: off. If you complete season two you'll get 30% off and if you complete season three you complete the whole series you're gonna get a free t-shirt or whatever it is I don't know something. Then for Disney parks Disney parks if you subscribe to Disney plus you get first shot at the premiere dates at Disney parks the holidays. The holidays

SPEAKER_00: are for Disney plus subscribers. You can't walk up and buy a ticket for those days. You must have a Disney plus subscription and

SPEAKER_02: we give first shot at those to the top the top longest tenured Disney plus subscribers. So if you have a Disney plus account for five years you get to buy tickets first on the holidays then second so you get a pre-sale a pre-sale at the beginning of the year and we collect the money ahead of time.

SPEAKER_24: It seems it's almost like Amazon Prime but it's like Disney Prime you're joining their like heavy users the Disney adults list yeah

SPEAKER_03: correct and everything is in so there's a Disney World app right

SPEAKER_57: yeah oh yeah I'm taking this

SPEAKER_03: you have to

SPEAKER_24: have the Disney app now if you go to a Disney park it's all through the app you basically don't have a choice you have to download

Chamath Palihapitiya: and we're starting a Disney miles program and a gamification well they have cruise ships too

SPEAKER_02: yes so as you go and do these your karma in the Disney Plus account grows and your badges grow so when children go to Disney Plus you put your kids names in they get to have credit for which rides they want on they have the percentage complete they are for California Adventure percentage complete for Disney World percentage complete for Disney Shanghai etc as you move it up you learn more and more

SPEAKER_13: here we go all right thank you let's drop off our friend producer I'm sorry editorial director Lon thank you for coming on and that was a brutal call I made back in the day Alex when I said Tim Cook should because you know the stock went on a rip my point was the stock can go

SPEAKER_02: on a rip because he's a bean counter and sure it's going to be a good bet on the stock but it's not going to be a good long-term bet technologically if the person running the show is a bean

SPEAKER_37: I I I assistant so like every major

SPEAKER_02: new category since I make these comments which we'll talk about Friday seems

SPEAKER_13: to have been a whiff okay should we go to our guest defenestration

SPEAKER_17: Russian accident now earlier this week Jason you saw a video of what appeared to be

SPEAKER_134: yourself doing the all-in podcast talking about a company and you had this amazing moment when you said did we talk about this show is that actually something that happened so Zach we'll talk to you

SPEAKER_00: crazy because people were like oh what episode was that and I was like I don't know I think did I say that because I do seem to remember people doing you know sending AI jobs to Manila wherever and they were actually using pretending

Chamath Palihapitiya: it was AI and they were bruteforcing it

SPEAKER_364: sources are calling the biggest tech scandal since Sohan Parekh a YC startup called Atom that creates 3D models from prompts for game developers has been exposed for allegedly using a human employee named Atom instead of artificial intelligence to manually edit those models

SPEAKER_366: wait so game developers thought they were using cutting edge AI but it

SPEAKER_00: this was real and so I'm like wait a second and I start asking like did we do I know that because there was another

SPEAKER_20: company ask producer Claw what was the other company that was doing this exact thing Builder AI it was Builder AI okay so this is I thought maybe we're talking about Builder AI but then I see this Adam so I see this young gentleman Zach Dive Zach welcome to the program

SPEAKER_373: thank you thank you

SPEAKER_20: and so take us behind your idea here because this is sinister and brilliant and all those great things go

SPEAKER_378: how'd you come up with this idea

SPEAKER_380: we actually did it first for April falls where we made an April falls prank where on X in fact we even had some foreign investors call us and freak out and I was like it's fine and then yeah

SPEAKER_382: then we decided to do it again and with the new AI video as you can tell it's getting pretty close to real but yeah

SPEAKER_384: okay which tool did you use

SPEAKER_382: shout out to them Yuzu lads who are really good at doing AI avatars so

SPEAKER_387: okay and you're a YC founder yes winter 25 congratulations

SPEAKER_37: not not easy to get into the program and YC does look for pirates they

SPEAKER_13: look for punk rock people who will break the rules I've been there this is a minor infraction I was an investor in uber rob and countless other companies

SPEAKER_20: that bent rules you know and we're even more punk rock than you Zach but I saw this and I was like hey Zach what's the story here so I dm with him like hey listen people are confused

SPEAKER_02: and you can't do this kind of stuff to the point at which you're confusing people now I've had people do there was a all-in AI that a kid named Edward did from a company called podcast AI that I wound up investing in and he did this digital all-in one but it was so bad back then

SPEAKER_00: so maybe I mean listen I don't I don't describe any bad intent here but you you thought people wouldn't be confused I would say the

SPEAKER_01: majority were not confused but hey you're confused you

SPEAKER_03: did it with the tech crunch one to confuse people so let's call it what it is you're hacking media to confuse people to

SPEAKER_20: this is causing confusion also I do endorsements I have an endorsement with Athena so like if you can use me as an endorser that messes up my business so I gotta nip this in the bud because literally in the last this year I've had no less than 10 startups use me in their ads including my friend David Freebird's team cut me talking about super gut and then put me in a paid ad campaign you didn't put any money behind this did you Zach you didn't do a paid ad

SPEAKER_37: campaign did you be honest I know if you did

SPEAKER_398: we

SPEAKER_09: here you go let's play the next one

SPEAKER_22: I have cut my dear friends to the place

SPEAKER_401: where Jason arrives in his new getup I think this is a really

SPEAKER_00: giving me a little counter punch Zach you want to be a little spicy with Jcal

SPEAKER_393: yeah yeah well I mean it got me on the podcast so

SPEAKER_13: what's the status of the company I mean explain so well done you hacked media I give you credit for that but

SPEAKER_00: in all sincerely please don't use me ads and there's like a bigger issue now there's crypto ads I don't know if you seen this Zach have you ever seen me or Saks or Elon or Chamath doing crypto ads on like YouTube and TikTok on live streams

SPEAKER_380: no no I haven't the only thing I will make you into Jason is a 3D model

SPEAKER_02: that's the only thing I

SPEAKER_20: that's why when there was like a group of advertising I don't know if you remember this Alex on radio where they would use celebrities voices and they

SPEAKER_13: tell me about the business and what you guys are doing since you got yourself here you create a little bit of ruckus and now everybody is talking about jacol has no sense of humor

SPEAKER_37: I have a sense of humor I mean it's punk rock but just don't do it as a programmatic thing

SPEAKER_380: which one did you think was funnier the first or second video well

SPEAKER_20: obviously the second is better but these deep sent me pictures of the DM so somebody created fake ads using AI then they DM from fake accounts on like Instagram these Instagram accounts I'm not aware of because they download my whole Instagram account they create a copy and they block me so

SPEAKER_02: you don't know that they're doing this stuff so there is like just so you know why their sensitivity here is like I

SPEAKER_414: a thing here it's not like I'm just singling you out but tell us about the company

SPEAKER_380: yeah so we're Adam we're an AI powered CAD editor and 3D modeling tool so basically like the model of the company is that you

SPEAKER_382: and show absolutely

SPEAKER_418: yes make me and your comrade can I show you what it looks like when you use

SPEAKER_419: it we have a demo for you

SPEAKER_421: let's get them some customers who's

SPEAKER_02: it for Zach who's this for is it people making video games is it for people who are like traditional CAD people or you're trying to do a Canva did

SPEAKER_13: and make CAD something that everybody can do and kind of induce an audience to exist yeah I think where AI

SPEAKER_424: is right now we're bringing the floor down so what we're allowing people to do is people who really

SPEAKER_380: want a 3D model who don't necessarily have the modeling skills a bit like Canva is they can just go in describe exactly what they want and then 3D printed or put into their video games and then we also

SPEAKER_382: have professionals so we have

SPEAKER_02: using AI too is that part of the vision where you could actually have the tool built into the back end and world create

SPEAKER_356: and insert things in real time yeah exactly user feedback the

SPEAKER_380: big thing a lot of the asset generators out there you well so we can we could keep editing it where are you guys based

SPEAKER_430: we're in SF in the marina well congratulations you raised money were you

SPEAKER_14: able to raise money on this idea where you

SPEAKER_380: made the very first like sort of web based text to CAD editor so some people call it like Vercel V0 for CAD even Guillermo called it C0 then we built this 3D asset generator tool in the last 2-3 months best asset generator tool on the market and now we're going full fledged on sort of AI CAD research but Alice

SPEAKER_382: can show you a little bit

SPEAKER_134: here's an example Jason that I made so my prompt was a model of an elf wearing a Lorna Shore

SPEAKER_08: t-shirt and I picked that because heavy metal bands have very complicated logos ready to jump out of a tree and here it is one shot of this

SPEAKER_437: thing I would actually play a game with this guy in it I think it it awesome

SPEAKER_356: hey since we have you on how do you how do you think about IP and these kind of tools has been a big

SPEAKER_02: issue with output right obviously training data is one thing but output like if you ask it to make a Jedi or a Disney character will it do that or do you have to start thinking about those kind of issues now

SPEAKER_380: yeah I we kind of allow you to generate any single character you can

SPEAKER_382: think of so your favorite movie character you can generate a figurine print it or like put it in your game so yeah

SPEAKER_438: awesome

SPEAKER_14: all right so in the tradition in your interpretation of IP no problem using other people's IP for the output not yet

SPEAKER_410: all right so there's a lot of lessons here for you about IP usage I would not let people output other IP things

SPEAKER_442: video

SPEAKER_380: game where you're walking around and stuff we could have you slash down the CCP coffee so I

SPEAKER_447: love it I love it so

SPEAKER_00: is there any room in the seed round now I feel like I need to get my beak wet here what's

SPEAKER_449: going on with the seed round what's going on is there room for Jcal in the seed round we can let Jcal in if we get exclusive publicity

SPEAKER_380: rights we can deep fake you whenever we want I can make giant 3D printed models of you I'll put it on top of the power supply notes

SPEAKER_356: all right we'll send the 50 bips as an advisor agreement over and we'll get that sign straight away and then let me know about the term sheet maybe we'll pop in a quick hundy and we'll be

SPEAKER_13: along for the ride but I wish you great success with it and yeah

SPEAKER_307: it was great to meet you and have a little back and forth with you all in good fun folks all in good fun

SPEAKER_453: all right peace check us out at adam.new

SPEAKER_278: oh yeah adam.new

SPEAKER_380: and if you want to generate jason in 3d and post on twitter you can do it

SPEAKER_455: subdomain n-e-w

SPEAKER_380: n-e-w yeah

SPEAKER_456: it's like bolt.new

SPEAKER_455: that's a neat domain I like that

SPEAKER_13: yeah zach continued success and great to get to know you and I will see you on x sir all right well done uh

SPEAKER_37: I thought it'd be fun to just cut this off before it becomes like a plumber lucky situation because enemies accumulate and this kid zach is just I know a punk rock founder like I kind of this is my speciality is finding the punk rock founders because I was kind of one of those back in the day um because the second I was like hey you know maybe you can't do this kind of thing he's like oh yeah let me escalate this because I can get more views and I'm like yep that's what I would have done when I was your age yep that's exactly what I would have done as a 25 or 30 year founder

SPEAKER_08: you told me to stop I do it twice you told me to stop again I do it four times you told me a third time then I'm probably gonna tone it down slightly

SPEAKER_14: but in all seriousness uh this will become an issue over time I don't recommend doing

SPEAKER_02: this uh as for people listening um don't ever take a known person's talking about your product and put it in an ad because this recently happened actually um I think it was Huberman look up uh ask producer Claude about Andrew Huberman doing a lawsuit based on people you I think it was Tim Ferriss Andrew Huberman and Peter Atiyah and one of those three or multiple of them had to write a bunch of cease and desist letters and I think it was Huberman because people were taking Huberman who might talk about a compound on like Joe Rogan and you know he might talk about I don't know like vitamin D or something and then they cut him talking about vitamin D and then put their supplement ad on it but this was like not just you know a startup you know in their seed round doing it on Twitter precociously this was programmatically they were buying millions of dollars of ads and using his likeness in it and they and then somebody did it to Joe Rogan as well now if you do it to those two people they're in the business of their image like I think uh you know you would have Joe Rogan reading ads for these people so now you're circumventing his ability to run his business and that's when you lose in court for a big dollar number and you would have to go back and pay for that violation and major worry now in this one you could argue a little bit of parody no harm no foul there was no damages but with Huberman's case Andrew Huberman's case against a nutraceuticals company or something he

SPEAKER_00: can actually claim significant damages because he had his he has advertisers as well so we're here

SPEAKER_07: from uh may of 2024 Jason is an Andrew Huberman post from uh Facebook in which he says unfortunately

SPEAKER_134: many ads are currently running on social media they use my face or a drawing of it to sell it um he

SPEAKER_401: sent cease and desist letters and he then he lists here are actual sponsors down below so yes this

SPEAKER_85: was Huberman you were dead on yeah and I I don't know if it actually went to a lawsuit or not but

SPEAKER_02: this is going to become you know young people have a different view uh and technologists have always had a different view of IP copyright and the kind of fairness of this stuff um and so in one instance where somebody did this programmatically and paid for it they were like we're just fans and I was

SPEAKER_00: like that's fine but you understand this is our business and then unbeknownst to me they went and bought some ads on this week and startups I was like wait a second is this the same company that was stealing they're like yeah they felt bad about they bought these ads now this was a company doing tens of millions in revenue so I was like okay that's a nice gesture sure um I didn't ask them

SPEAKER_02: to do it um but I did think gosh I always think when a founder is doing something close to the line I should just give them a little bit of like hey be careful um which is actually what I did in the Parma lucky situation I was like you know don't buy covert trolling ads because it could blow up in my face anyway I may have said it in a spicy way so I'm sorry if I said it too spicy which I probably did I was a little spicier back in the day uh but we've got more news in the docket let's get to the docket is there anything more news for us that because there's a lot of major news today I saw that I think the biggest one is opening I dropped two open source models wait I thought they were

SPEAKER_357: out of the open source business pause not open source open weights open weights not open source

SPEAKER_17: totally different but still much more open and as so you can't see the source code but you can change

SPEAKER_307: the weight so maybe you could explain to the audience what's going on here yeah okay so I knew this

SPEAKER_08: question was coming so I spent a lot of time trying to figure out how to best respond to uh what the hell

SPEAKER_134: is an open wait yeah sure first thing at the top level you can download these models and you can run

SPEAKER_08: them locally you don't have to interact with them via an API or an inference provider you can run them on your computer at home or if you have a serious GPU from Nvidia you can run the larger model there open

SPEAKER_17: weights is not the code so you cannot download the code and actually extract the individual lines but what you can think of is that weights are a bit like memory or the knowledge of the app once it was trained and because they're open you can see what open AI did this is dramatically more transparent than the most recent generations of open AI models and it is I think driving some change so for example uh XAI Jason in the wake of this announced uh Elon said this I think it was today that they're going to open source maybe open wait uh Grok 2 after having open source Grok 1 back in the day so a good move by open AI you love to call them closed AI here they're making a good step in that direction but it's not open source and so people are are mixing those two a little bit and I think it's important to make

SPEAKER_02: that distinction okay so in a way when you train these things you might weight certain information over others I think is a another way to say it um and so you know like maybe this is not correct I would like to have somebody really figure out how to explain this we understand that there's parameters and all this stuff but how do you weight different things as being truer or more important I guess is how you could think about this so if you were going to do something specifically with this model and make a cursor AI competitor you would maybe tweak the weights maybe you think oh the stuff we scraped off Stack Overflow is more important or they this GitHub stuff is more important or this GitHub ranking makes this thing more important and slide the weights around it's always been known that Microsoft owned the source code and the weights in the open AI relationship where they bought like half the company or whatever it is so this feels really interesting to me because you can also run it on your local computer and we knew this was coming and what this means is when you start thinking about IP or privacy this is going to have a big impact on it if you're doing something like I don't know I'm taking you know pictures of my grandparents or whatever and I'm making them into videos like people

SPEAKER_00: are doing sure do I want to upload those photos to open AI and give them those and then the next person who makes pictures of a grandpa it's my grandpa you know you get the idea so and then on a privacy

SPEAKER_02: basis if you were doing deep analysis of your documents do you really want that in the cloud with somebody else and then somebody else you happen to index I don't know salaries bonuses legal documents you know this stuff can get pretty gnarly and then it's training their model you will have a large language model in the operating system on your phone on your computer this is where Apple which has been just

SPEAKER_13: totally disgust the odd when it comes to LLMs could actually maybe come from behind if they were to take

SPEAKER_02: one of these open models or work on one and then incorporated into their operating systems of which they have billions of users oh lordy that would sync with and I predict they'll do this I predict Apple will use one of these models encrypted on your devices so you never have to use a cloud-based service and be subpoenaed for what you do and when you choose to subpoena Apple because there was a terrorist

SPEAKER_454: attack at was it San Bernardino and they wouldn't unlock the iPhones it was San Bernardino I believe

SPEAKER_13: right and they were like oh there was a terrorist attack love to help you CIA FBI everybody but we

SPEAKER_356: don't have access to it that's a bold thing to do as Apple right like terrorism you know explicit images of minors like there's a there's a small cohort of things that any reasonable person would say turn it

SPEAKER_02: over but Apple has taken the stance quite bravely I will say I'm saying we don't have access to that and then giving you that information of the terrorists would compromise billions of people on our platform therefore we're going to make this higher level decision that ankling slowing down the next terrorist attack and finding out where the terror cell is is more important to Apple it's more it's it's it's a that they're willing to pay the price of another terrorist attack occurring

SPEAKER_13: from a sleeper cell then compromising billions of people's um privacy by having a backdoor that's a hard

SPEAKER_08: hard hard hard decision to make I'm glad I don't have to make it yeah this just came up NVIDIA uh put out a blog post yesterday or today Jason I forget exactly which and they said there are no kill switches and

SPEAKER_134: no backdoors in NVIDIA hardware NVIDIA is currently trying to get back into selling its H20 chips in China working with the Trump administration on getting permission to do that and I think China is a little bit worried that what they're going to get is backdoored chips just like you know the U.S. would worry about a Chinese company sending compromised chips to the U.S. uh so they're making a pretty clear stand about that and then also we've seen the UK work recently to try to get companies again to break encryption and provide back doors and NVIDIA said in its post don't forget the was it the Clipper chip that had the compromise back door that led to all the security flaws and so in the case of Apple I feel like what they're doing is they're just saying encryption is or is not and

SPEAKER_17: there's no middle ground to to offer up to law enforcement I'm sure that if Apple could find a way to have encryption be compromised in a way that was safe which I know sounds oxymoronic they'd go for

SPEAKER_134: but I just think they're being technologically honest so that's my that's my take of course we care about children of course we care about stopping terrorism but I mean either we also

SPEAKER_14: care about everybody's privacy a right to privacy is uh the term I just use that's for public figures

SPEAKER_13: having the right to publicity actually is what it's called but a right to privacy is even more core than you know what celebrities have to deal with uh and oh I was correct I see here uh producer Claude lets us know that Tim Ferriss uh successfully got an injunction um very good Tim Ferriss and a company he owns Creasa Performance obtained a default judgment against defendants alleged to have improperly used his name and likeness in connection with a fraudulent scheme according to the case Alliance Publishing and Pagan Twitty perpetrated a fraudulent get rich scheme in which they published a flyer asking targets to mail 97 and 100 to a dealer and whatever blah blah blah so anyway people are scammers there's I mean scammers are out there it's like that's part of becoming a known entity in the world is that people will try to leverage um your followers into some dark place okay uh on the open

SPEAKER_134: AI point though just a couple more small things I want to make sure we share with founders because I think this this matters for what they're building so um there's two models from open AI you can play

SPEAKER_17: with there's the 220 billion parameter model and then a 20 billion parameter model one's more tuned for data centers one's more tuned for home use there are lots of fun though the metrics seem to be by

SPEAKER_134: benchmarks pretty good I've heard some people say there's a lot of hallucinations but it's certainly I think having more open models in the market is good and Jason on the show we've talked about how when we think about open source AI it's really a Chinese product now as American companies mostly go close source so here is a rejoinder uh from the west if you will yeah I think that's very important and then there's two other there's a couple more things about AI models and I'm going to just run through these but I think for all the founders out there who are building and are curious what they can build with here's the latest so the other thing is DeepMind which is part of Google uh released

SPEAKER_17: a thing called Genie 3 which is a world model that has much better context maintenance so essentially if you're playing inside this world model Jason and you turn around it doesn't forget what you've seen uh which means that it's now much more useful much more uh high fidelity it's just great I'm not going to go through a demo today but Genie 3 if you want to take a look at that Anthropic dropped a very incremental improvement to Claude 4 called Claude 4.1 again the benchmarks say it's better but it's going to be more a matter of taste so I'll be curious to see what people think about that in the coming days then the big news is that tomorrow OpenAI is going to release GPT-5 oh yeah well this is the

SPEAKER_13: big one wow that's a shebang maybe we should do a a live release of that that's incredible um what do

SPEAKER_02: people expect in the chat GPT-5 I heard a rumor no hallucinations more reasoning what what is the expectation here have they tipped their cards and said here's what's happening and when was the

SPEAKER_13: when was chat GPT-4 launched I wonder how many months between those that's another producer Claude

SPEAKER_489: can we get the gap from GPT-3 to GPT-4 and then GPT-4 to tomorrow please so we can compare those that'd

SPEAKER_17: be lovely um the most important reporting that I saw to answer your question though Reuters spoke to several people who have had access to GPT-5 didn't share their name because they're under NDA but they specifically said it's better at coding it's better at reasoning but critically of course it's going to be better the question is how much right sure they said it's not going to be as big of a jump as we saw from GPT-3 to GPT-4 from oh okay so they're downplaying you know that's interesting trying

SPEAKER_134: to manage expectations so GPT-4 came out in March of 2023 GPT-3 came out in June of 2020 so that was just under three years this is just over three years just over two years it's actually it's a little bit

SPEAKER_480: faster from four to five than three to four huh who'd have thought interesting there's been a big

SPEAKER_02: kerfuffle between Cloudflare yeah and Comet and you emailed the found you emailed the press department

SPEAKER_13: there yeah and I cc'd the founder and we got kind of the backstory here uh on um the perplexity versus

SPEAKER_498: Cloudflare I don't know if it's on the doc did I not add Arvind to that email I did you probably didn't

SPEAKER_14: but I did because I was like Arvind should know about this I meant to my bad on that one okay so

SPEAKER_460: anyways no apologizing on twist uh the backstory here is getting there getting there a while ago

SPEAKER_134: maybe a month Cloudflare announced paper crawl this was a big deal we talked about on the show the idea was if an AI model um going out the internet to collect information on behalf of a user

SPEAKER_17: query wanted to come to jasoncalacanis.tumblr.gif you could say no you have to pay us a cent or whatever to come take our information and bring it back to your user I think we said this was pretty reasonable and an interesting experiment in economics for the internet uh time passes paper crawl has been in close beta now they're working with publishers we'll see what it looks like when it comes out they have not responded to my notes asking how that's going but we'll see so perplexity sorry

SPEAKER_134: Cloudflare comes out this week with a post essentially accusing perplexity of very bad behavior online they said that look you know we set up a a test website that had you know a big stop sign for AI and then we use perplexity's models to take a look at this and we found they found the information and accused them essentially of being bad online citizens and perplexity fired back with you guys don't know how technology works which was an interesting moment because here we have two very different perspectives that don't seem to be talking in the same language jason so maybe you

SPEAKER_270: can explain what you mean by they're acting in good faith because i think that's an interesting

SPEAKER_02: important point here okay so you never let a good argument get in the way of reality because both companies now are being talked about uh which i think is part of the point yes you can send a crawler out there's many third-party services that you can fire up as a developer to go crawl websites it will fire up a web browser a virtual machine and it looks like a user agent right so it looks like a human being is browsing say something that doesn't let you scrape it like reddit or quora like you ever go to quora and you try to click on an answer and it gives you like maybe the first 500 words that says hey you gotta log in to see this i hate that well but it's the perfect example of somebody trying to protect their ip from these crawlers absolutely so what cloudflare is basically saying is perplexity is trying to circumvent that and i can tell you all the llms have tried to circumvent this but now we're starting to get to the point where lawsuits are flying and something's at stake and that's why uh these language models now need to behave because disney new york times are suing and we've got actual court cases so people are being more thoughtful about this it's amazing what cloudflare is doing by saying hey if you want to crawl our websites that's okay

SPEAKER_13: here's the rules here's where you send the money and if cloudflare what does cloudflare take 10%

SPEAKER_357: i don't know what their vig is i would really love to know released that but if it's more than 10% we're going to take them out back and whack them with sticks i think 10% feels like a reasonable vig

SPEAKER_356: i would pay them that i don't think 30% would be but 10% seems reasonable for them to manage the the buy and sell side and you know 10% plus your stripe fee so they get a full 10% i think that

SPEAKER_357: would be reasonable actually maybe you're literally describing the substack model and i think that's

SPEAKER_121: fine yeah it's like enough for them to maintain the service and pay for their team and it's not

SPEAKER_02: predatory in any way it's kind of genius i have to say it's a really unique way to do it it empowers the content creators and it gives a programmatic way for llms to ask for permission now in comes the rub we've been talking about the browser's role in this you could and we talked today about open ai having a language model you can run locally you're allowed to do whatever you want on your desktop with other people's ip so if you paid for it so if you bought my book and you decided to take screenshots and you decided to run analysis on it and you bookmarked it more power to you as an

SPEAKER_00: individual you paid for it you can remix it just like you take the physical book you could cut it up put it on your wall make a copy of it for a backup but as long as you don't distribute it right so if you

SPEAKER_02: want to photocopy my book so you have a backup and you have it in one house and the other in case the house burns down god forbid i mean it's nonsensical because you could get the bound book for the same price as a photocopy you get the point browsers are not detectable these third parties are and i think what's happening is there might be some confusion that comment users using the browser the browser are doing queries so when i showed hey i'm doing a united airlines you know task and it goes and it fires off on my local desktop the browser to go do things what i suspect is happening here is when i just told you i had slack summarize the channel using the comment browser powered by claude how does slack look at that it looks at it as my user agent it looks at it as my desktop it doesn't look at it as a back-end scraper now if you took that content and you trained your llm on it you would be using me as a proxy to backdoor into stealing content yeah so let's use the core

SPEAKER_00: example course says hey you can't use this in your language model but you and i go on there and we say oh give us all the questions about corvettes and we start reading them we say oh get us the best answers on these corvettes and teach us about the whole corpus of corvette history or whatever and we build

SPEAKER_02: this whole document and deep research on it and we've queried you know over a number of days a thousand pages of corvette information and history and lore that cora owns cora owns that even though the users made it they made it with the understanding it goes into the core corpus and cora said you can't have this well what if that then fed uh the perplexity language model well the founder of perplexity said they're not doing that so whatever you're doing is not happening so there might just be like

SPEAKER_00: they're talking through each other perhaps a misunderstanding of the user agents but this is where the details matter details really matter and that's what a show like this week in startups

SPEAKER_02: is about we get into the very nuanced granular details of these kerfuffles and uh this donny brook

SPEAKER_419: is valid it's an important one it's it's very important and i think the way where i come down on this putting aside the technical differences of of whether or not cloudflare quote misunderstood

SPEAKER_08: 20 to 25 million user agent requests that are not scrapers according to perplexity's blog post how many 25 million yeah 20 to 25 million user agent requests are not scrapers uh anyways that's from

SPEAKER_134: the long perplexity post about this we will sort this out but what i what i'm worried about is this the idea that if i go to let's say chat gpt and ask it a question and it pings 47 websites collects the information and brings it back to me and gives me a summarized paragraph and then open the eye says well we're not doing that alex is not really there there's that there's a automation and scale differential here and i i tried to talk about this uh for something that i wrote and i was trying to

SPEAKER_17: think of the like the analogy is food so jason if you come over to my house you can eat anything you

SPEAKER_270: want open the pantry the refrigerator the freezers steal from the kids i don't care there's lots of food

SPEAKER_134: come over eat but if you sent a like a robotic courier to my house to collect food for other people what you're doing it and the automation because it's not one-to-one and so i i'm concerned that people are saying as long as a user requested in some tenuous capacity anything downstream from

SPEAKER_525: there counts as alex requested or jason wants it and therefore it's okay not true yeah and the other

SPEAKER_02: thing is these websites will also block you if you do unnatural behaviors so people for many time for all time have been creating local index like google does and so they'll just have their browser open a hundred linkedin pages and start scraping and there's infinite number of tools online you can get to do a user agent in your browser to spam people with emails and you're paying for emails there's a throttle on you can only send so many but there were tools in the early days to just automatically like posts on twitter automatically retweet stuff and you know create all this garbage on the internet and so it's up to the website owner as well that if somebody does more than a hundred clicks in an hour

SPEAKER_00: to pause them and say hey we noticed you did a hundred page loads in an hour a normal human being can't really do that so what's going on here and pause your account or freeze your account and sophisticated people like say crunchbase or the wall street journal or the new york times anybody's

SPEAKER_13: got a subscription product or quora stack overflow they build these things in to know a user or what appears to be a user is doing something with malfeasance this is incredibly niche but an important topic okay this has been another amazing episode of this week in startups my amazing co-host alex uh lon x.com alex x.com jason x.com slash lon x.com twi startups we'll see you all on friday bye bye bye bye bye