SpaceX's Financials Leaked: Is it Worth $2TN | Meta Debuts Muse Spark: Are They Back in the AI Race?

Number 2, public software stocks tumble to new lows with Citi saying there really is no flaw.

Optimistic.

And then finally, Meta debuts Muse Spark.

It's Alex Wang's first model from Meta's superintelligence labs.

Does it save Meta in the race to catch up.

So I'm pretty bullish actually on OpenAI and the enterprise.

I think it's a two-way fight.

Anthropic has the advantage of clarity and focus.

OpenAI has the advantage of the consumer business.

If your agents are only 60% as good, you're in a slow death spiral.

It appears to be the most expensive IPO at scale of all time.

The Elon discount rate is zero and the Elon probability of failure rate is zero to get to $2 trillion.

I can't open the Strait of Hormuz myself.

I can't do this like, enough already, let me just use my tokens.

Ready to go,

guys.

I am so excited for this show, uh, as we always, uh, have.

We're going to start with Anthropic.

What else could we start with but Anthropic unveiling Mythos with the preview withheld from public release because it is too good at hacking.

Discovered thousands of zero-day vulnerabilities, admittedly some were quite old.

How did we think about this?

Did it deserve the reaction that it got?

Which reaction are you talking about, Harry?

I would say widespread fear that was then shown in a loss of market cap of a lot of public companies in the US.

Let's leave to one side the— was it a marketing stunt?

Whether they have not have compute.

Let's focus on what Mythos does.

In terms of cybersecurity and what your correct response to that would be.

And if you read a lot of the stuff, it finds a whole ton of vulnerabilities, including some that have been literally there for years, right?

So that's kind of the, oh my God, that's scary.

And then you see, and that's why they withheld it and shared it with a bunch of security vendors, right?

And then you see a bunch of kind of counterarguments that basically some version of this, which is using older models and using them well, you can actually get to the same outcome,

right?

You can find the same security vulnerabilities, right?

And that's the counterargument.

And there bunch of tweeters that said, "Eh, this is not a big deal." And I'm processing through from the outside and my conclusion is those people who said it's not a big deal are wrong

and Anthropic is right.

And I was thinking about the metaphor here today, right?

Because what they were saying is, and it's actually very interesting about the hologentic revolution, it's kind of a microcosm that allows us to talk about a lot of things.

It's like basically they are right, which is, sorry, the naysayers are right, which is that you can take an older model, you can point it at some of these issues, you can kind of query,

you can direct it a couple of times.

And someone actually did the exercise of here's how I found the same bugs.

I had to steer the model a little bit and you got it, right?

But the comment is Mythos just kicked off on its own, agentically goes and looks at all the code and finds them on its own, right?

And the metaphor I was trying to look at here is very simple.

It's like, it's the difference between a rifle and a machine gun.

In one sense, both of them can kill someone, right?

But one shoots one bullet and then stop and reload, and the other just spews bullets out.

And in the First World War, we all tragically learned that machine guns are

It might be the same thing, but quantity makes a huge difference.

And I think that's what's really going on here.

The speed at which this can process, reason across large code bases means that they're just going to find more bullets.

They're going to shoot more bullets.

So the kind of the Twitter cynical, it's not that different, isn't true because it's the capabilities to do so much so quickly with such human direction that makes it definitely a quantum

step difference in terms of real capability.

My big aha was it's not overblown in the sense it can find stuff.

I think that AI is enabling every single breach possible, every security hole to be found, not a subset of the hottest companies, not folks trying to attack OpenAI APIs, but everyone.

And like, for example, you know, the other day MyFitnessPal bought Cal AI, right?

Cool story, right?

What was it, Harry?

$100 million, 19-year-old kid from Miami, something like that, right?

A great story.

2 days later, it was instantly breached.

All the records were stolen.

3.2 million records.

Everyone's single use.

Everyone, all the data on you, all your HIPAA data, every single thing on you was stolen within days.

And it became a sport for a hacker.

They just stole it all.

Now, the root cause was, and actually this is surprisingly common, it's an issue Supabase and others had to deal with.

Um, they didn't have any authentication on Firebase.

It was, but as most databases are now built by AI, as more and more apps are built by AI, the number of issues is going to explode.

And if Mythos and friends let bad actors find every site the second it launches with any PII and steal it, I think we may enter an era later where sites get more secure as, as it's

flipped on the other side.

But I think we're going to go through a transition phase where security is just getting worse and worse and worse because every single website can be instantly hacked and stolen from

it.

And the whole Mythos run, they said, I think Claude said it took them, I don't know, I'm sorry, I'm gonna misquote the numbers.

It took them $20,000 of credits or a couple hours or something like that, right?

And hey, that's enough that I'm not gonna do it against Scales' website.

But if I could simplify that and distribute it against every single thing with any PI on it, you know, bad actors are just gonna hit everybody.

I think it's a big deal whether this is a publicity stunt for not having enough capacity.

I don't— maybe, maybe a little bit, right?

But, um, but everything's going to be found, every security hole, right?

Agreed.

Which is why the second comment I'll make is I, I thought that— so the second comment is that the reaction to it in terms of security stocks going down, to me, didn't make sense.

Because I'm like, what this says is There's no doubt that the process of going forward, part of the process of security will be to use Anthropic or another code model to check your

code before you deploy to find these vulnerabilities.

This will be a thing, right?

But someone's going to have to administer that.

Someone's going to have to build frameworks and harnesses to do pre-screening code.

But then more importantly, everyone's going to have to operate on the assumption that if you miss anything, They're going to find us, which is different than if you miss anything and

you're really strategic, they might find it.

To Jason's point, if the other side now have machine guns, then you've got to build tanks.

So what security is might change.

The vendors who step up and meet the challenge will triumph and the ones who don't will fall away.

If Anthropic say that their model now allows anyone to find any vulnerabilities and they're going to withhold it for 6 months, that means that in 6 months and 1 day, every bad guy on

the planet is going to be pinging your code code and trying to find the bad bits, right?

So you're going to be investing in cyber.

So I think the part that made sense was the, this is a big deal.

The part that didn't make sense is the cyber stock should go down because I think you're going to want way more defenses because the bad guys are more heavily armed.

And as I say, it is an arms race.

Do you buy Dario's, it's too powerful, we can't release to the public?

Is it just great marketing?

I don't buy it anymore.

I'll tell you one thing that changed with me with the Miso thing, for what it's worth.

I don't buy Dario anymore.

What I mean is, listen, he may well be the second greatest founder of all time behind Elon.

Look what he's done in 5 years, right?

5 years to $30 billion.

The greatest grudge startup of all time, right?

I mean, it's hard as a founder to not— your jaw not to fall on the ground.

But I am just so burnout of the boy who cries wolf.

Every job's going to be destroyed.

Everything is insecure.

Everything like, enough already.

And like, I've heard it so many effing times.

And then about Mythos, I have to hear that like he's created the spawn of evil if we're not careful.

Like, I just can't.

Like, I've rotated back to Team Sam after all this because I just can't take the— can't take the endless boy who cries wolf.

It's like, even if you're right, there's— I can't open the Strait of Hormuz myself.

I can't do this.

Like, enough already.

Let me just use my tokens.

Seriously, I've lost confidence in his— not in him as a CEO, but this endless marketing machine.

I'm tuning it out now.

I don't care anymore what he says about this stuff.

I don't care.

Specifically, what specifically do you not buy?

I'm just trying to understand.

Listen, if every— Dario's like, 80% of jobs are going to be destroyed in 2 years, we need— we'll need no programmers by next week.

Okay, that endless thing.

Maybe he's right, but what can I do about it?

I heard you.

I heard you the 11th time.

I heard you the 80th time.

I heard you on Joe Rogan.

I heard you on, on, on, on TBPN.

I heard you on Harry.

I just can't.

And then, and then the Mythos thing, and they were holding it back, and it's like, I believe you're, you're a safety guy, but if you talk your game too much, um, I just gotta check

out at some point.

Show me something that's inspiring.

Like, I actually, I honestly feel like his message is uninspiring.

That's the problem.

It's uninspiring.

I'm going to push back a little on that,

but in the following way.

I think a lot of the doom warnings are wrong and the doom warnings to date have been wrong.

If you look at the unwillingness to release ChatGPT-2.0, which in retrospect was overdone, but I think the concerns are sincerely held.

And yeah,

it also is good marketing.

I acknowledge that too.

But I think the starting point is there is a belief here that these things could happen.

To be very concrete, I think he's totally wrong about the economic 50%.

I think that's beyond madness and I'm not worried about it in the slightest.

But I do believe, and I thought about this a lot because what I realized is if I'd met them at the sea, which I didn't because it was outside our price bracket, but if I'd met them,

I would've done exactly what you did, Justin.

I would've listened to the doom warnings and I said, That's all silly and wrong, therefore I won't do the deal.

And what I've learned is something more nuanced.

I think a lot of Silicon Valley companies have a culture that's overreaching and you listen and you go, "The grandiosity." If you're kind of a grounded person, you reject the grandiosity.

But what I've internalized is the grandiosity is a rallying, is sincerely held because I don't believe you can portray grandiosity consistently for 5 years If you don't believe it,

unless you're really psychopathic.

Sociopathic, I should say.

I think it's sincerely held and I think it has a huge unifying effect on a company.

Take for example Elon and we're going to Mars.

The minute we had to file an S-1 and someone had to say, "You might have to go to prison if you say things wrong," we said, "We're not going to Mars, we're going to the moon." You could

be cynical.

If I'd looked at that deal much earlier on, I would've said— The cynical but incorrect approach would've been to say, "I don't think they're going to Mars for here's 10 reasons, therefore

I'm not going to do the deal.

The more evolved approach, and this is why I'm pushing back in on Tropic, is I don't think they're going to go to Mars, but I do think the Mars vision over 20, 30 years is a rallying

cry that will allow them to do amazing shit in the short term, which they've done.

And I think the same thing applies with Dario here.

It's like, I think it's all over.

I think half of Silicon Valley, I'm going to say it here, is running around thinking they're inventing the next thing after the atom bomb.

And I simply don't.

I don't think we're going to unemploy 50% of white-collar workers.

I think it's madness.

I think it has some legitimate dangers

in cybersecurity and bioterrorism, but they're manageable.

I think it's all overwrought.

But that overwrought, I won't say hysteria, that overwrought intensity has allowed them to build a culture which had no churn.

It's given them mission clarity.

And then we'd given them a $30 billion

revenue line and a possibly trillion-dollar market cap.

And what I've learned, and it's really hard for me because I find all this problem bullshit.

It's like the Airbnb.

Remember the Airbnb was the sharing economy.

Uber was the— you remember the sharing economy?

It sounded like a bunch of communism.

We're all going to sleep on each other's air mattresses.

That was a vision, airy-fairy bullshit.

It turns out what really is going to happen is people are going to buy houses and rent them out.

So what I've learned is Steve Jobs was a bicycle for the mind.

It turns out we're all just going to sit on our phones and watch Instagram and get depressed about other people's lives.

But the vision oomphie bit, it just helps keep the machine of innovation churning here, people.

So what I've learned to do, which is really hard, is literally listen to the idealism Don't say, "Do I agree with it or not?" Say to myself, "Will it motivate people enough to do something

where there is economic advantage to be obtained?" And that's a very cynical old person's perspective, but that's the context in which I say, "I think Dario believes all that stuff

and I think it's useful for them and I think it's wrong, but it's damn useful and it's worked." Jason, I get you.

What do you want him to say then?

You said, "Oh, I didn't find him inspiring enough." What would make you happy?

What do you think he should say?

And I think before things got tougher, I think Sam was good at teasing at this.

I want him to take us to Mars.

I want to see the good side.

Even Vinod, who is very direct that there's going to be a lot of job losses, right or wrong, Rory disagrees, but Vinod's very direct.

His point is it's going to be okay, right?

We will figure this out with AGI.

Everyone will pay more taxes, even in California.

It's okay.

Marc Andreessen, his point is we're entering an area of deflation and abundance, right?

I don't need too much on the other side.

I don't need the fluff, but I just need a little inspiration.

That there's some good.

And I'm not saying maybe the law, maybe the third hour of Dario's speeches have it, but everything I see on social media feels like he's an inverted Debbie Downer.

And it's just I'm tuning out.

I'm just tuning out now.

And maybe in the enterprise he's got to— we'll just see.

Listen, I don't run a $30 billion company.

This— it may, it may almost have to change as the years go on, as this works less well with the million-dollar customers.

Right.

It may have to be more positive about the benefits.

In your workflow.

I think, Jason, the odd thing is we're actually agreeing on one thing.

Tune out the noise and just, in the words of Haldeman, don't look at what we say, look at what we do.

I always love quoting Nixon White House as what used to be the most cynical White House we ever seen, but we can come to that another day.

And

ignore what the people are saying, oh my God, this could eliminate white-collar jobs and wringing their hands and saying, this is awful.

Look at what we're doing.

We're shipping code, we're shipping software, we're doing $30 billion in run rate.

Our shit's amazing.

Turns out you're not buying the guilt.

I mean, it's, you're not buying the guilt, you're not buying the hand-wringing, you're actually buying the revenue.

And the revenue's amazing.

I'm with you.

It's pretty amazing.

I've spent a lot of the last year

attempting to help founders that they genuinely need to move more quickly.

That they are too complacent in their approach to AI, that this is what I, that they have at best a 60% solution, 60% answer to the problem.

I've tried, I've tried to vibe code in public.

I've tried to build my own apps.

I've tried to share how we've rebooted our teams to 3 humans and 28.

I've done all this and I, and I know it's profoundly helped a lot of people.

I get so many messages, so many, so many public company CEOs, leaders reach out to me.

Even me, I'm like, I'm almost done with this phase.

Like, I have alerted you, okay?

If after me with my 10 trillion tweets and 2,000 blog posts and 54 20VC pods together, if you haven't heard the message that you gotta, like, you gotta catch up in AI, maybe I'm no

Dario, but even I'm ready to move on to the new world.

I'm leaving the past behind.

And if we're all gonna live in a world of robots and AI lawyers, so be it.

Like, you know, I'm ready to move on to the new world and I'm almost, and I'm frankly ready to write off a lot of portfolio companies and a lot of public companies.

It's time to move on, guys.

If you're not gonna get there in April of 2026, then so be it.

So be it.

Well, let's mark— do a markdown and call it a day, and good luck to you.

I'm going to close with the Oppenheimer quote.

All these founders have their Oppenheimer moment.

They want to be Vishnu, destroyer of worlds.

And that's been, you know, they all reference the book, obviously, everyone, you know.

So obviously channeling Sam and channeling their kind of Oppenheimer moment with the new atomic bomb.

My favorite moment in that movie was when Harry Truman says, "Get that crybaby out of the White House." In the end, Harry correctly says, "I dropped the bomb." The equivalent of that

is if a whole bunch of people are fired, Jamie Dimon will fire them.

He doesn't need you wringing your hands with guilt, Dario, it's okay.

And it was a great moment when Harry correctly said, "History won't say, 'Robert Oppenheimer, you killed all those people.' History will say, 'You built the bomb.'" and history will

say I dropped it.

Right?

And so in other words, get over your guilt, ship the product in a methodical fashion.

Do be careful.

I do think he was right to keep that product back, but in the end, you know, it's not stoppable.

I appreciate that.

I actually think he's very thoughtful about it.

So I'm on his side on being thoughtful.

I don't think it's fake, but it's going to happen and other people are going to own the problem.

Onwards.

Onwards.

The final element, which is connected but not the same, which is Mythos was trained entirely on Amazon's Trainium chips.

I don't think that's correct, straightforwardly.

What makes you— I'm sorry, I cut you off there because I've had too much coffee, but whatever.

It feels like a 3-cup-a-morning morning for Rory, doesn't it, Harry?

Where you say 3, 4.

Might be 4.

Okay.

Sorry, Harry.

Keep going, keep going, because I'll let you finish your sentence.

Well, apparently Mythos was trained entirely on Amazon's Trainium chips.

Jassy disclosed that it's now a $20 billion annual highly specialized business growing triple digits.

Trainium now is nearly sold out.

Uber among one of their biggest customers.

Question being, if this is the case, are we slightly seeing a loosening of Nvidia's stronghold on the market?

And does this change how we feel about Nvidia?

First of all, I think you need to be really precise here because I checked, I didn't know this point, so I checked it.

It's like, it sounds like you're, it's a couple things.

It sounds like you're saying, oh my God, they're shipping Trainium chips to others who are using, who are you buying chips and using them?

They're not, they don't to a rounding

have a merchant silicon business.

So they're not competing directly with NVIDIA.

What is true is Amazon, instead of buying NVIDIA chips, is buying its own chips and then offering cloud hosting services and inference services and model training services.

So

think of it as less, oh my God, someone's buying chips and competing with NVIDIA, is that Amazon is not buying NVIDIA chips, instead using its own chips And most of that run rate is

internal purchasing.

So what they're really saying is Amazon is saying we have a CapEx budget of $200 billion a year this year, which probably means about half of that typically is chips.

It's $100 billion.

So where we can, we're buying our own chips.

Of course we are.

And where we're not, we're going to have to buy Nvidia just like everyone else.

So that's true.

And then in terms of who's quote unquote a customer, all they're saying is this is either if they're doing training runs for Anthropic, which I'm sure they are, or they're doing inference

runs, which I'm definitely sure they are, because that's a product they offer through Bedrock.

When they're doing that, they're running it on their chip.

So yes, in that sense, some of the Mythos model was probably trained on Trainium chips, but not because Anthropic said, yo, I love Trainium.

It's because to the extent that Amazon is offering them compute, some of that compute's on Trainium.

That's all that's happening here.

But all that said, it's still $20 billion that didn't go to NVIDIA that went to Amazon.

So it is at the margin meaningful.

It's 10% of NVIDIA's revenue, a little less than 10%.

So it's not a mega competitor, it's just an in-house bundled product at some significant scale.

I'm loving this Rory, Jason.

Aren't you?

It's like, oof, someone came out and punched me.

10% is material.

We don't need to spend all over.

10% is material, right?

And I guess— The bear case is just everyone's building their own chip or deploying their own chip.

Everyone's trying.

Everyone's trying, especially in inference.

And, you know, this is— and that just NVIDIA is dented.

It's dented sufficiently to see multiple compression.

It's dented sufficiently that our 401(k)s go down more.

Right.

It's really just that it's that when things are priced to perfection, there's dent, right?

Fortnite may mean— yeah, Fortnite.

NVIDIA may have its own Fortnite moment as as crazy as it sounds, it just may be the first 30 seconds of the game on a relative basis.

But yeah, but no one knows this better than Jensen, right?

No one is friends with his frenemies and friend of partners and friend of better than Jensen.

No one's played this game in the history of mankind of being kind to everybody, pulling back, being right, understanding the dynamics and still winning.

So crazy, crazy good at it, right?

Doesn't get his dander up on this stuff like most of us do.

And remember, I think Amazon and NVIDIA have a famously difficult relationship.

So they're probably the company most interested in not buying from NVIDIA.

So I think what you're saying is fair.

At the margin, it's $20 billion to like to have, 10% is not meaningless market share.

But the big picture comment is compute is scarce, chips are scarce, they're pretty much sold out.

The stock's at $194 and it didn't super accelerate when they did that trillion-dollar backlog comment, but it didn't go down either.

So I think we're up against the constraint limit rather than anything else.

We're going to stick on Anthropic, but move slightly.

Anthropic to now compete with Lovable directly.

They launched recently in the last 48 hours a competitive product.

You sure it was launched?

Well, they announced it.

Okay.

Harry, see, Harry's a media guy.

He thinks when things are announced that they're real.

Jason is a software guy.

He actually thinks you have to ship product.

No, it's all about the announcement.

Surely you've seen that in the last few days.

As the lovable Replit guru here, look, I mean, Claude Code is clearly directly competitive with Cursor, and then you have this slightly different segment.

I'd love your opinion, Jason, on the kind of the lovable Replit segment.

What do you think the compa— how do you think about the competitive threat from a Claude, from a /anthropic to those players?

I mean, 'cause— Well, look, Eric from Bolt on these screenshots, Eric from Bolt said, oh, we all, I was with, I was at a dinner with the CTO of Level.

We all knew this was coming.

It was just a question of when.

And then I asked him if he thought the screenshots were real, and he said it didn't really matter because, because it was coming, right?

So, so that's, that's a, that's a number 3 or number 4 player's view.

The Meta question, you know, if this were, if this were 52 episodes ago, um, I'd be like, well, that, you know, it could happen, but it's, it's not important enough.

They're gonna have to get into databases and hosting and identity management and OAuth.

And, and, and, and, and end-user support, like consumer-level end-user support.

They, like, it's a whole bunch of things culturally that they don't want to do, right?

But the pace of innovation at Anthropic is so intense that on a whiteboard, it's hard not to want to grab a couple billion of extra revenue from vibe coding, right?

Because, because you're just, you're just a database and an OAuth, uh, and, and sort of, and a few other, you know, for them it's 30 days of work, right?

Um, So I don't know, but the classic, the old school, the old school, the old school VC would be like, it's distracting.

Even if they launch it, they're not going to maintain it.

They're not going to have support.

They're not going to, they're not going to put all the resources you need to maintain it.

But the truth is, and maybe Eric from Bolt's point is, maybe if they don't directly compete at the prosumer level, right, even if they don't build a base 44 lovable Replit, they might

just go halfway there and that might be enough.

Like, it might be, it might be something that developers use who just want to get something going, right?

It might be something that, that more technical product teams use, which is like the number one highest ROI category for Reputable and Lovable, these, these product teams.

And they may only target the nerdier, the more technical part of the market, and that might be sufficient to again, maim, maim, maim, maim the folks, right?

It doesn't have to be 100%.

They don't have to replace shopping sites and stuff like that to have a material presence.

So, but you know that Anton and Amjad and everyone thinks about this 26 hours a day.

How do we stay ahead, right?

How do we stay ahead?

And it may just be maiming.

If it happens, it may just be maiming, but maiming hurts.

But Jason, those product teams could just use Figma Make, right?

I mean, they can use Make.

Don't feed— now you're just fucking poking the bear, Harry.

Please leave the bear alone.

Well, I'll tell you, What?

We could talk about— and he's off, and he's off.

No, I just, um, well, let's stay on this topic.

It actually ties to if we talk about software stocks, why I've become more pessimistic since the last show on them.

But oh no, why have you become more pessimistic?

But because we are kind of ahead in this agentic thing, right?

At least in the real world.

I do talk to lots of teams, lots of senior product teams, lots of CEOs at massive, more than I ever done in the last 10 years combined.

Okay?

Every week, multiple Zooms, multiple calls, and there are exceptions for, for sure.

But I would say here's why I'm pessimistic and why I think that the drawdown is accurate, even though I don't understand the public markets.

I think almost everybody's building a 60% solution and Make is an example.

You look and you look what Claude did or, or or prompting did last November, and you've spent the last 4 to 6 months building something that's kind of similar to what, what these products

were like 5 to 6 months ago.

But you can't really afford the tokens.

You're worried about the cost.

You can't build all the features.

You're trying to use cheap models to bring costs down.

You're trying to limit it and you end up with Make.

But everyone has a Make.

Why is Make so crappy?

It's because you didn't care enough to spend the money or put the team in.

Make is a good copy of Repl.it or Lovable from last summer, right?

That's what happens.

And by the time Make catches up to Repl.it and Lovable today, and then, and then they decide it's too expensive and then they decide they have to lock it down because they can't afford

the agents and tokens.

Now you're 9 months behind and 12 months behind.

And so what I mean is, and so it's not just that you have a 60% competitive solution.

Here's the meta problem for the incumbents.

You can't charge for a 60% solution.

Here's the problem.

If you could charge 60% of what Claude charges or, or LaGora charged or Replit charged, that'd be great.

That would— that's enough to charge 60%.

But a 60% product has to be free.

It has to be included with your base charge.

And while we're recording this, for example, today HubSpot's launching its next group of AI agents, right?

And I'm excited to try them and I will be supportive.

If they're only 60% as good as the standalone solutions, HubSpot cannot really charge for these things.

You can't get away with charging another $20,000, $40,000, $60,000 to a HubSpot customer if your agent is fine.

It works like in isolation.

When I meet with internal product teams at large companies at scale, they are so effing proud of themselves.

They show me their agent that they built.

They show me their vibe coding thing.

And if I didn't use any other products, I think they were great too.

Or if this was 51 weeks ago, I would think these products were great and they're so insular.

At their 2,000-person company in their, in their, in their fancy campus, wherever they are with their mugs, bringing their mugs to the meetings because, because at their pace and they're

failing even as they're proud of themselves with their 60% solution because the market will not pay.

They will use it like they'll use your, your 60% solution, but they're not going to pay for it.

They're not going to pay for it.

And so you're stuck in this doom loop of, yes, I have an AI product as a public B2B company, but no one is willing to pay for it.

For a 60% solution.

They're not willing to pay 60%.

And so we can say all these companies have moats and ServiceNow has the biggest moat of all, so it shouldn't be sold off and this and that.

But if your agents are only 60% as good, you're, you're, you're in a slow death spiral.

And that's what I see.

I can't think of maybe one or two exceptions of everyone at scale where their agents are as good as either a standalone company or just what I can do in Claude.

Now, I can't maintain Claude.

There's a whole bunch of issues.

But if it's only 60% as good, there's no way I'm gonna pay this, this AE that just called me up $100 grand for it.

I'm not gonna do it.

It's not good enough.

You checking the box does not work with agents.

The check the box feature cannot be monetized in the AI era.

And this is why I think they're all properly sold down because none of them have— they all have 60% solutions.

All of them.

All of them.

And they should be It's, it's do or die, guys, because you can't sell these things.

You can't sell these things, right?

And that's, you know, the one— there's two counterexamples we could argue over.

AgentForce and, and the, the Base44 Wix one may not save Wix, right, which has repurchased like 30 or 40% of its company, but at least they made a bet that got them beyond a 60% solution,

right, to 9 figures in revenue.

I, I, I agree.

I, I think

I think there's a lot to unpack on what's happening in SaaS, but I think I've internalized that Jason has articulated one of the big truths, which is unless you have a product that's

good enough to charge for independently,

you won't have revenue reacceleration of any meaningful scale.

And if you don't have revenue reacceleration, then you're in a different valuation metric.

And I'll talk about how to value mature companies with probably persistent users, but stock-based comp issues and no growth issues.

And you can do that.

And one of my rules is price clears all market.

There's a price at which ServiceNow and Salesforce are all quote unquote worth something.

So zoom out a million miles.

Jason is right.

If you can't charge for your shit, you won't reaccelerate.

And if you won't reaccelerate, you instantly move to another valuation bucket, right?

So I've listened to you a few times and I think there's a clarity of simplicity there because you can talk a lot about, hey, we're doing that or the other, but the gut level test is

can you charge for it?

I really think it's a big fricking comment because I've been wrestling with what do you use to sort out all these public SaaS companies and how do you think about it, right?

If you're in a very workflow-centric market for the last decade, you are definitionally in an agentic-centric market now.

There might be other things that are more payments-related or stuff like that where I think there's different dynamics.

But if you were in a workflow-centric world for the last 2 decades like Salesforce and ServiceNow.

You are in an agentic world now.

And if you're in an agentic world now, you better have exactly what Jason says, agents that are worth the money, which means they do the work.

It's actually a very brilliant test.

And I think if I'm literally looking at the horizontal software applications list for Morgan Stanley and Jason, you're right.

That was probably the first.

If I'm thinking about how to value this bucket of $1.6 trillion, that is the first test.

If yes, Then you're on the increasing value scale and you can make it out.

And it's still going to be hard, see Wicks for details.

If no, then you're in the how do you value

a company with mid-single to high single digits growth rate at best?

Probably I think an example of sales were very sticky and you might be hit.

And I think that's a separate valuation question, right?

I think that at 9 times, these things are trading now at 8 to 9 times cash flow.

You might be hitting a point where just the money allows you to be a deep value player.

The PEs of something like Salesforce, excluding stock-based comp, are 11 or 12 times forward PE when the market's 20, right?

This is unparalleled, right?

So if you want to make yourself a value play, money can still be made, but it's a grim way to make money.

The only way to still be a growth play is to pass the Jason test.

So that's my zoom-out comment here, right?

And you said it in financial terms, a few weeks ago, which is reacceleration.

But today you're actually articulating the predecessor test.

If you have agentic workflows, then you will have reacceleration, then you'll be in the Jason happy bucket.

And if not, then you'll be in the tragic value bucket and you will have to do hard things that would make Dario and Sam cry if you're going to make this thing cash flow.

It's going to involve SBC reduction, it's going to involve headcount reduction, it's going to involve a bunch of grim shit, and you can probably still make money.

But you also top-stopped.

Nothing magical will ever happen to a high single-digit growth rate tech company that's kicking off cash.

At best, you build a mini version of IBM, CA, and the top 5 executives make money.

It's not going to be fun.

So you're right.

Jason, would you buy ServiceNow now?

No, I wouldn't buy any of them.

I wouldn't buy because I'm looking for products that are more than a 60% solution.

I don't— it's just the world's moving too fast and no one wants— when we started this, this pod, I wasn't sure if I believed it or not.

I was probably on the fence, but there was definitely a sense that the models might plateau, right?

That there'd be parity, that they're all pretty good.

They all basically could, could, could, could do a chatbot.

It's clearly not the case today.

If we tie it to the beginning of this conversation, the models have radically accelerated their power since December, right?

Since, since, since since OPAs 4, 5, and more, and we haven't used Mythos or whatever, it's gonna be even more powerful.

And so I'm not optimistic that, that anybody, um, building to last year's spec slowly can compete.

It's too furious.

It's too furious.

And, um, and I also think that the problem with moats is they keep your customers in, but they don't lure any new ones in.

No one's excited to cross the moat except the folks that want to breach the castle walls.

This whole moat discussion I think is at the edge of moronic, right?

It's at the edge of more, hooray, you have a moat and your customer— I signed a 5-year, you know, the average ServiceNow deal is between 3 and 5 years.

So what?

That doesn't bring in anybody new.

It doesn't bring in agentic revenue.

It just means I'm trapped.

Prisoners, prisoners don't create growth, uh, other than at the margin, right?

Other than, other than with the margin.

First of all, I love the moat analogy.

That's great.

And what you're basically saying, because I've listened to this, is that what you're basically saying is Jason is not a buyer of any stock that's not a growth story.

Yeah.

And I think it's good, right?

Yeah.

And I've come to the conclusion you were right on that.

And one of the reasons I enjoy doing this part is when we argue, sometimes I change my mind, right?

Because I want to play out the value track just for another few minutes, right?

I think the problem with the value play, I think at this price, I think you make money on Salesforce, but unless they get regrowth, you're going to make single-digit returns and the

overall EBITDA in small cap is 11.

So are you going to underperform?

I actually think the other thing you're wrestling with

in terms of these stocks is the following.

The weird thing right now is the public markets don't have access to the growth side of software.

So right now the trade is sell SaaS, buy semis, which effectively means sell SaaS, buy AI, making AI, right?

What you don't have yet in the public markets is AI native companies starting with Anthropic and OpenAI, right?

Therefore,

mythos is a wonderful word because in fact, you're comparing the practical values of owning Salesforce with the mythical values of owning this company that's growing 10x where you've

never seen the actual financials.

No one's seen GAAP financials, but oh my God, it's amazing.

Everyone's always going to want the myth.

Pick your girlfriend/boyfriend analogy.

It's the practical realities of the person you're with now versus the mythical example of something that could be.

So my other aha is these stocks aren't going to trade in the same fashion until 5 or 6 public of these, 2 of the foundation models and 4 or 5 other AI native companies are public.

And then you can finally, as a public market investor, say, okay, now I can choose.

Do I want, let's put it right, do I want Anthropic growing at that time probably 5x at 30 times revenues with huge losses and big stock-based comp?

Or do I want boring-ass Salesforce growing at 10% with 30% operating margins and at that point no stock-based comp loss?

Right?

At least now you can have a choice.

And then what'll happen is then we'll find out how to evaluate those two things.

And it's probably going to take 6, 12 months after the IPOs.

My point is until then, what you're dealing with is the mythical desire for the as-yet-unrealized relationship.

Right?

So these stocks are going to trade for shit until then is my big aha because no one's going to be able to value them right.

The only people that get out of that mess now are what Jason said.

If you manage to claw your way to growth as a

public SaaS company, then you do actually have some kind of chance of trading up.

But if you got to trade on fundamental value,

you're always going to be chasing this kind of fear that the model companies can do everything you can.

I don't think they can.

I think when the model companies go public, people are going to realize, oh yeah, Salesforce in its current form is probably going to be there for the next couple of decades.

It's worth its cash flow.

But Jason is still right.

Unless it gets its shit together and makes great agents, it's another IBM.

And when did you last even— I don't even know the price of IBM because why would you?

I believe someone's probably made money, but it's not my problem.

You just become a boring-ass old thing.

So I think, summary, you're right, Jason.

If you don't have growth.

It's an interesting question and Wix is interesting because

I think

they've done what you suggested, Jason.

They're trying to get growth and they're getting growth.

And as yet, you're right, they did a buyback and the stock's down 20% since then.

So my aha from that is— Yes, they spent $1.6 billion to buy back nearly 30% as they bought it at $92 and the stock fell 23% on the week.

And whenever that happens, you got to say to yourself, that wasn't a good week.

Right?

That's kind of like an inverse Bill Gurley.

Instead of selling stock and then it goes up, you buy stock and then it goes down.

That's like the IPO premium, but the other way.

It's like, oh my God, that hurts even more.

Let's talk about leaving money on the table.

And I think the aha is, to Jason's point, they did one thing brilliantly, which is figure out they got to get product out the door.

Maybe they should have sat on their capital for another 6 or 12 months, kept it in reserve to maybe buy another AI product or invest behind their AI product.

Because I think these stocks are going to bounce around in value trap land for a long time.

So now we may be wrong if they really nail their growth on the new product and the kind of vibe coating product really accelerates.

And you look back 6 months from now and growth's at 15% and the stock's way up, you'll go, oh yeah, it was fine.

It was just a next day reaction thing.

But the point is fix the JSON problem, which is core growth before you try and do financial engineering.

And then Salesforce, don't fix— Financial engineering is useful, but it's not the solution.

In the end, if all you can do is grow at 8%, you can screw with your balance sheet to your little heart's content.

You're never going to matter a damn.

As I said, you'll be IBM.

They've screwed around with that stock forever, but nobody cares.

You got to do the JSON thing first and put all your effort on that.

It is tough that, you know, Salesforce did a big buyback too, right?

I think they bought $25— they did $25 billion of debt to buy its stock.

On a spreadsheet, this looks brilliant, right?

We can support it, right?

Yeah, we wish the debt was a little bit cheaper, right?

It was a little— but, but, but this is the simplest thing we can do.

Retire a significant amount of our shares, right?

Drive up our EPS and keep going our agentic transition.

But arguably, you know, the market at best shrugged it off.

At best, it already priced it before it happened.

But in the short term, no benefit.

All this financial engineering that looks great on a spreadsheet amounted to nothing in the short term but $25 billion of debt.

I totally agree, Jess.

And not only that, but I think one of the big advantages you have as a public company with cash flow positive is your financial flexibility.

I wouldn't trade that for anything because look, one of the two things that happens if the AI wave rolls on without a blip, then your stocks and you don't have a growth story as a public

SaaS company, then your stock's going to be cheap 2 years from now.

There's no hurry to buy it.

Yeah.

Second thing is if there's a blip, then the guy in the market with a public currency and $25 billion in cold hard cash, maybe you buy 5 big things in private land that allows you to

compete.

Maybe you buy not Atropic, but a second tier financial model.

Maybe you buy one of the big apps companies.

If you can afford it.

Salesforce is one of the few people that can make a big bet here.

It's one of the few.

But my point is this, that's why I would've kept my $25 billion in my back pocket.

Right?

It's what you said, fucking around short-term with your stock and the number of shares, the only people who care about that don't matter.

You got to win the war.

And there's some chance that in the next 2 years there's a blip in the market.

All these AI companies are burning money.

And if you're sitting there with $25 billion, you could have been saying, "Come to daddy, I got money.

Let's talk about how I'm going to be an AI behemoth." And I think that would be a better use of your time and your money.

Come to Daddy, I Got Money.

On that topic, Alex Wang, founder of Scale, obviously now at Facebook following the acquisition of Scale.

Meta debuts Muse Spark, first model from Meta's Superintelligence Labs, which obviously Alex runs.

I mean, the candid truth is I did okay.

It was decent.

My question to you on the back of this It was decent, not quite as good as the others, but good enough.

Is this Facebook back in the game and is this a encouraging sign for Facebook where you feel more optimistic post it or less given it didn't blow anything out of the water?

I think it's a win.

If you're not in the game and then you get back in the game, that's a win.

So if you're 5th, you're in the game.

I mean, you read all the reviews, you know, I haven't got hands on the model.

I don't have the level of sophistication to evaluate, but I did read a lot of the reviews of people who did.

And you're right, the summary is good in some of the things that they were working on at Scale AI a year ago, not so good at some of the newer things that the advanced labs have been

developing for the last 12 months, which totally makes sense.

You took your knowledge from a year ago and you implemented it, right?

But I mean, leaving aside the question of, Does it make sense to be in this game at this level?

Leaving that aside, if you decide as Mr.

Zuckerberg that you want to be in this game, then you achieved your mission.

You spent $14 billion and you're back in the game.

Now you got to move up the league table.

But yeah, I felt this was a few because had you done all this and did a Llama 4, which was disappointing where people are like, it's not even credible, then you'd have felt like a moron

and you don't.

So I think it was a win.

Also worth noting that they're talking about being much more closed source, which is a significant thing because at some point someone's going to need the American version of open source.

And Llama was that, and now they're pivoting more to being more closed source, which has implications across the ecosystem and is a bit of a bummer.

But yeah, no, I think it was like a phew, exhale.

Not sure why we're playing this game, but if we're going to play it, I'm glad we're not losing anymore.

Stepping back though to where we're going toward the back half of 2026,

I don't think if I'm Zuck and I'm looking that Google owns its own models, which have become extremely competitive, right?

That's one of my big direct and adjacent competitors.

If I want to be in the big leagues, maybe I just have to own this.

I'm not Apple.

I don't want to be stuck buying tokens from Anthropic or OpenAI.

I'm Meta.

I have one of the dominant consumer advertising and other platforms on the I have the dominant social networks and I sure better own this.

It turns out it is not a commodity.

And maybe this is— it's way too much money down the drain, but this is core to our existential existence, just like it is for Google.

And I don't want to wither.

I don't— it may be— that may not have been where this all started, right?

But the goal of Facebook is not to provide API tokens like Anthropic.

This is not the direct goal.

Right?

Or it certainly isn't to, to encourage the open source community to rise up and use Meta products.

This is to stay in the top echelon of, of software, of consumer software companies.

And it's worth $14 billion.

It's worth $14 billion, right?

If you just don't want to become Apple and depend on everyone else's models, you just don't want to be that, right?

And, you know, if you can just do better than the, the KIMI open source et cetera, stuff Cursor's doing, it might be worth it just for that.

Just to be in that zone between what I can just rework purely from open source into what I can buy from Anthropic.

If I'm close enough and this is my core, it might be worth owning.

Ruthless.

This is as competitive a company as exists on planet Earth, right?

This might be the most competitive company on planet Earth is Meta, right?

Ruthless.

Yeah, I mean, if you look at the big player scoreboard for that, it's like, bet a billion on Instagram, win $100 billion plus, maybe $400 billion.

Bet $70 billion on Meta and VRAR, lose it all.

Bet $14 billion on this and clearly have a win.

And somewhere in the middle between those two outcomes and you feel good.

I agree.

The other thing, just, and again, it's not totally my expertise, but when I look back when we started this show, a lot of folks thought AI would kill Google Search and maim Facebook.

That Facebook was dying as a platform and that why Google Search was of course dead.

ChatGPT was going to destroy Google, right?

Fast forward today, these are record growth businesses now, right?

Google Search, we started the show talking about AI overviews and other things.

Google Search is a better business than it's ever been, as is Facebook and Instagram.

So it makes sense to triple down there.

This is not a time to retreat.

This is not a time to retreat for either of them.

It is not a time to retreat.

It is a time to get that lance out Go straight into battle.

Just knock those other guys off.

Meta surpassed Google.

I'm sure you both saw it as the largest ads engine in the world.

I think Meta now at $243 billion.

They didn't kill it yet.

And it's not fucking— I hope that stock price comes back.

Speaking of ads engine, OpenAI projects $2.5 billion in ad revenue for 2026.

The ads pilot was $100 million annualized in just 6 weeks.

There were 600 advertisers.

We touched on it before.

But they're guiding to $11 billion in 2027, $25 billion in '28, $53 billion in '29.

Is ads the great comeback for OpenAI in H2 2026?

Is this the shining light that we should be directed towards?

It's both obvious and inevitable that a consumer product like OpenAI ChatGPT is going to have to be ad-supported.

So yes, they're making the moves, exactly the moves you'd expect.

And the little chatter of, oh my God, that's a bad idea, or it's not doing enough that we saw from before a few weeks ago, it's all silly.

This is just going to happen.

3 people have done it at super scale already.

Google has done it in 2004 on.

Meta themselves have done it in 2008, really 2000, probably '07 and '08 on, and 2012 in mobile.

And then we always forget Amazon, I think got to about $100 billion plus.

On ad revenue in the last kind of half a decade or probably 7 or 8 years at this point, right?

So the movie is clear, right?

And yes, they're talking about getting to $100 billion in 4 years.

It all makes sense, right?

The funny thing is, and I looked at all that and I thought, yep, and it's funny, I'm mentally giving them 100% credit for getting that.

OpenAI is typically not unaggressive in its projections.

So let's assume this progress is aggressive.

This is gonna sound really awful and I hate even saying it.

Oh my God, $100 billion is amazing, but it's not enough relative to the market cap.

In other words, so the bigger huff for me is you can build a $100 billion ad business

in ChatGPT, which makes sense.

And in the context of a total trillion dollars of total ads with Meta already having $300 billion of that, Google already having $200 billion of that, Amazon already having $100 billion

of that, and TV's gotta eat too, right?

That's probably a realistic high-end estimate.

What it means is you need another $100 billion plus from your enterprise business.

That was the big aha for me is consumer alone ain't going to be enough to feed this beast because your competitor who's all in on enterprise is already at $30 billion.

As I say, I almost feel like a jerk saying it's like, hey, congratulations on your $100 billion ad business.

Probably one of the 3 or 4 best ad businesses ever, one of the best product launches ever.

But it may be that corporations want to buy more intelligence than consumers do and that $100 billion consumer ads won't support your burn.

You need more.

The $100 billion is what, 15% of ad spend, right?

Yeah.

10 of the trillion worldwide.

10-something, 15.

I like this as a goal for 2030 because it's clear what people should be doing.

We can't just add $100 million of ads That's to ChatGPT how it goes.

We have to build something that is essentially as big as several of our competitors.

It's well understood why it works.

We're not directly in commerce.

We don't have the advantages that Amazon does, right?

But can we achieve the scale of Facebook and others?

Yes.

This is our job.

This is our job, guys.

And every week we're going to iterate on it.

We're going to improve it.

We're going to make it better.

It is mathematically possible.

This is not as aspirational as the enterprise stuff, right?

It's mathematically possible.

This is our effing job.

We're going to review it every week.

We're going to put some of our best team on it.

And, you know, it's doable.

And if it comes up short a year or two like Elon, I mean, it would suck for the IPO, but it's not the end.

It's doable.

It is achievable.

Right.

And so I think because it is achievable, it will be achieved.

I actually think it will be achieved.