저자: Tanner · 외국인
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로빈후드 7월 지표가 강세(옵션 계약·예탁자산·마진 사상 최고 등)라며 3분기 매출을 약 10억~11.7억 달러로 추정. 크립토·스테이킹 매출 확대와 밈주식 거래 집중을 긍정 요인으로 봄. 구글(알파벳)에 대해서는 펀더멘털이 견조하다며 공매도 논리에 동의하지 않음. 9월은 크립토 계절적 약세 가능성을 언급.
다듬은 글
All right. Hello everybody. Welcome back to another episode of the Tech Bros Weekly. You know, Roy, you want to tell everybody why it's at 9:30? Tell the truth, Roy. Uh, one of us was late and it wasn't myself and it wasn't Tanner. Could be anybody. Could be anybody. Dude, he just threw me under the bus completely.
He didn't say your name. My back. Nope. He showed who he's loyal to today. There you go, Tanner. Yeah, I was I was I was 30 seconds late, but I'm here. So, Royy's loyal to the truth. That's who he was loyal to. And I was in Tanner's chat teasing him as well, but I ended up being the late one. So, I had no idea what time it was.
So, um Well, we got a lot to talk about today. First of all, uh how are you guys? How are you doing? It's good to be back. Missed you guys. Good to be back. Yeah. Yeah. Yeah, we've had a lot happen over the past week. Lots of different tech stories. The uh main things to talk about tonight are the Robinood July metrics.
Uh someone who is now shorting Palunteer, a little bit of a high-profile short. We'll talk about that. Uh Chamath is back into the Spack universe. That was breaking news after the bell today. Did not expect that. Actually very very upset about it, but nonetheless, we'll analyze that. Uh and then we got some comments from Sam Alman on AI, Open AI, Nvidia.
So, we'll we'll get into all that good stuff as well and we'll get into it. Yeah. All right. Thank you everybody for being here. Let's start off with this. Uh July metrics on hoodie. Robin had closed today at around 114. 160,000 funded accounts, 300 billion in AU, 6.4 billion in net deposits, 33.6 billion in cash sweep.
Options was 196 million contracts. For context, last quarter they did 515 million. So you got almost 40% of the contracts in one month traded for one quarter. Equity all-time high 209 billion. Crypto six-month high 16.8 billion and margin book all-time high 11.4 billion. Roy I will uh take it to you.
What did you think of these July metrics? I mean it's a really good month. So uh we had a hunch that it would be. It's always nice to see the numbers. Uh of course equities options are all looking good. Crypto as well. Um, margin was kind of a standout number and they uh, like if you look at it, it spiked up.
And the nice thing about margin is it's not, you know, if there's a terrible month over this next month in August that we end poorly, you know, that that book will be compressed some, but this isn't just revenue that goes away instantly. Instead, usually that margin book goes up over time unless we have a massive pullback and some people get consolidated as a result.
So, I loved seeing that. Um now the other piece that wasn't shown on this dashboard but was shown in the metrics was the securities lending and that is something that they talked about in quarter two uh they mentioned uh I'm glad an analyst asked the question because I wasn't able to because we couldn't figure out the phone system.
It's on us again. Uh if basically that big spike from securities lending which they saw in quarter two which delivered that beat largely was something that we could continue to see going on and they said pretty much yes. And then we see more of that here in July as well. So I I love seeing that. That's actually really huge.
Used to be a very meaningful part of Robin Hood's revenue. So yeah, right there. Total securities lending revenue was 61 million in July. It's up 190% year-over-year. Dude, they are just crushing it on every level. Tanner, what was your takeaway from these July metrics? Yeah, same thing that was interesting about the securities lending it.
It like we saw a correlation or or some sort of pattern that Q2 was really strong. So, I wasn't really worried as much in Q2, but seeing it continue into Q3 is breaking trend and it's uh breaking trend in a very good way. So, that was exciting to see. Um I ended up, if we want to look at um sort of how I'm looking at Q3 expectations, but essentially like it's looking very positive.
I think that monetization on crypto continues to climb up. If August is anything like what we're seeing in July, which overall crypto volumes looks, you know, strong still, uh, that could be very, very exciting. The equity notional volumes were just absolutely insane off the charts. So, um, if that continues into August, which it very well could, and then September is another story, but if it can continue through, um, this will be an allaround breaking breaking quarter.
So, right now, um, like last quarter we did about 988 million. Right now, I'm looking at somewhere along the lines of 100 or or 1.17 billion. You want to share your uh your sheet, your Excel sheet? I I can. Yeah. Uh uh while you're doing that, real quick, I just want to uh double click on what Tanner's saying around
uh crypto. So, this user on X posted, "Not happy Robin Hood wants to take so much. She was buying 80 Ethereum and the spread, which is still way less than Coinbase, but nonetheless, people are noticing, hey, that spread is increasing, but she's still probably going to buy it on Hoodie versus Coinbase because she would be paying 6,000.
Um 85%. That used to be 455 a year ago. So, that number is increasing, which is very good for the overall take rate that Robin Hood is uh is going after. Also, Kathy Wood did buy 123,000 shares today as well. Well, um, my understanding is that whenever you're buying small amounts of crypto, Robin Hood's the place to be.
Whenever you're buying extremely high amounts of crypto, like you're paying $360,000 per purchase of Ethereum here. Robin Hood is not quite the best place to be. There's there's places to to get unbelievable rates on on cryptocurrency. So, she's probably right or or they're probably right. um that uh that's an expensive way to buy cryptocurrency at that level.
Yeah. Yeah. There's cheaper, but it's I mean it's it's really easy. Uh and it's cheaper than pretty much everything else that's that simple and straightforward, which is why, you know, Steve, for instance, found it very compelling uh to use to buy crypto. So, if Steve's buying, I'm sure he talked about it last week.
I didn't actually see that episode. I should have, guys. Um then that's meaningful. You didn't listen to the episode, bro? I did not. No. Why? Uh, mostly hanging out with my daughter. So, you left us alone. No, it's okay. Sad and depressing. I'm not happy to hear that, but whatever. He's got a family.
Well, so whenever Tanner has a video, like the place to watch it is usually like in a sauna or in a pool or something, some body of water. and and our the w body of water that we were next to was alligator infested. So, we didn't do that. The place to listen to my videos is in a body of water. Yes. Yes.
Of course. I mean, let me tell you, my body becomes a body of water when I'm listening to Tanner. So, that's that's all. You can tell me what that means. And I don't want to. That's a you know what it means. You know what it mean? Tanner, share the damn sheet. We're We're Okay, bro. Sorry. Sorry. You guys were being uh super weird and so I was waiting it out.
Okay. Tell us tell us how much money we're going to make when Hood goes to 150. Tell us. Yeah, let's talk money. So, um, essentially now you have to break it out. Um, there's Bitstamp crypto volume. Now, that's separated from Robin Hood app crypto. Uh, I am not factoring in Bitstamp crypto volume at all.
I put zero dollars associated with Bitstamp. Okay. So, which is not going to be the case. There's going to be some Okay. Um, that being said, we're looking at July numbers and Okay. So, I I have to tell you guys a pretty serious formula. Keep this in your head. This is going to be important. Take July numbers and multiply them by three.
Okay. So, there's three months and that's it. That's the formula. Um, essentially once we uh multiply them by three, you can associate a take rate and then that gets us revenue for each one of these revenue lines. Um, that gets us a transactional based revenue of 708 million if we keep up this July rate.
Now, if July was super hot and that's going to come down, adjust your expectations, okay? Maybe it's 50 million lower, maybe it's 80 million lower. You can decide that. Um, on the next breath, I'm also putting a very conservative I think it was 315 billion of uh yeah, 315 of assets under custody. I think we're at 298 right now just on this month or a little bit higher, I think.
Um and that's how I get my take rate on net interest revenue and then other revenue will be lower uh from Q2 but but maybe not even like if you look from uh you know there are usual spikes in Q2 of 2023 to Q3 of 2023 but in the last time it actually still um oh sorry no no it it did dip a little bit.
So I'm I'm also seeing that that slight dip from 93 back to 70. That's fair. Um, so so that's 1.1 bill 1 point. Okay, so the analysts have us at 1.09 billion for Q3 right now. Yeah, but I I think it's very fair to suggest that we're going to be over a billion this quarter. And it's also fair for them not be quite as high as Tanner because this was, you know, a blockbuster month.
So usually August and September there's some seasonality. We'll have to see how that plays out, especially with crypto in September. Um, but so far so good. Yeah, if that's not a factor, awesome. Uh, couple other pieces of Robin Hood news. Brad Gersonner, one of the highest profile public investors who manages a fund, added.
He was one of the only guys that really added heavily to Robin Hood. Uh, 359,000 shares. Originally, he had 2.8 million shares in Q1. So, uh, did not see Hood pop up on a lot of 13Fs and 13Gs, but we did see it on Gersonner, which was good to see. Um, and so you got some of that momentum there. Also, I wanted to ask you guys just sort of like a real quick topic.
Open, I'm not in it, but if you looked at the options datas today, the number one traded stock in the stock market in regards to derivatives was Nvidia. The number two traded stock was Open Door. So, here's a question and for everyone in the chat as well. Do we think a decent chunk of this volume is is happening on Hood?
Because if it is, I think that's another tailwind for Robin Hood. It is. Yeah. Uh I and I I mean like it just seems like the memesters in are really attracted to Robin Hood, which is a little bit ironic given GameStop, AMC, and all that stuff. But I mean, that's not going to happen again. It's an easy to use platform.
It's really simple and easy to use for new investors. And honestly, a lot of people when they first start out, they're not serious in investing. And I don't mean they're not serious about investing, but they've not taken the time, the discipline to really figure out what investing strategy works for them, studying the market.
They're just like, "Hey, this this stock is hot and running. My friend just doubled his money. Maybe I can, too." And and that's an okay place to start. I'm sure we have some people in the audience that are like that, too. Uh, but grow from there. And hopefully a lot of these folks don't get hurt or crushed.
Uh, because I mean, there might be a huge popup at Open Door. There already has been before. Maybe there's a massive squeeze. I don't think it's going to 82, but you know, if it does, that's pretty amazing. But then it's not going to be sustainable either. So, some people have a bit crushed, but it's very good for Robin Hood.
Uh, and and it just goes down to that that simple ease of use and that great product that they have. And of course, having no fees up front, payment forward or flow. Yeah. Yeah. I'm by the way guys, in my revenue expectation, like I said, I didn't factor in any bit stamp. like there there's still going to be a lot of those new revenue lines that I really didn't even look into.
Gold member um expansion there, the securities lending increasing as a percentage of total assets under custody. I'm not looking at any of that. So saying all those are going to zero obviously. Yeah, those are going to zero and uh people are just going to be using uh equity notional volume. But I I do think there's something to say about the the meme stock excitement being heavily favored to Robin Hood's platform over the Schwabs and Thinker Swim and stuff like this.
I agree. And so wait, on your crypto revenues, you only you you took out Bitstamp because you don't know the take rate on it and you only did like the 11 billion for Yeah. Oh, wow. Oh, so that's Huh. Yeah, exactly. I am completely just taking it away. So we do know some form of of um take rate because we know how much they made in June.
So you can take out what they made in June. Yeah, something like that. Like I think they made six or seven million and you can know for sure after this quarter uh reports or at least you know close enough to it. There is some um retail on it that that has a much higher take rate than the institutional but you'll have that full quarter of Bitstamp plus Robin Hood.
to subtract the Robin Hood from the monthly stuff from the full amount. There's Bit Stamp. But yeah. Got it. And it's not just it's not just about revenue, right? Like Bitstamp's also here to help with margin and and bring more to the bottom line because we have our own exchange. And with Robin Hood, they always take or they usually take something when they acquire it and then they evolve it.
So Bitstamp isn't going to stay Bitstamped exactly the same. It wasn't just bought to to buy revenue. Uh but it's their first institutional product. They're going to build a lot off of that. Um and and frankly, we've already seen them launch some stuff in the uh crypto event in France from it. Yeah.
Have staking and all of these things. They're all brand new uh revenue lines. Like it's it's an unbelievable compounder. And then you have the the the tailwind of Open Door, which is that you don't need to own Open Door to get exposure. Hood is exposure. Because I agree, we don't know the exact numbers, but I think a lot of that volume is not happening on E Trade or Schwab or Fidelity.
it's happening on Hood and so that's and their option contracts more than anything which is just printing money for them. So it looks like August is going to be decent. September is the month that usually tends to just be awful. We're going to see if September is not too bad or even if it's slightly bad if August and July can carry the momentum here.
Yeah, it was an exception last year. Of course it was an election year so maybe that was part of the reason. But yeah, usually September is just death for crypto. Um and it can always be different. We're I I'd love to see it continue on. It's good for Robin Hood, good for me. I own a lot of crypto. So,
like the staking that you mentioned, Tanner and Amit like that is it's not going to be a small revenue source to sleep on. Like, you know, it's just it's just in three uh product lines right now, but like Ethereum has a lot of people fascinated, interested by it. Of course, it's appreciating in price, which usually means people buy it and they stake it as well.
Uh, and just do you guys stake any Ethereum or have any Ethereum? Yep. I can't in New Jersey because it's banned here. That's right. Yeah, they they they don't trust you with gas pumps and they don't trust you with buying Ethereum. Oh, yeah. That's funny. Risky. So, um, so has it been Have you staked your Ethereum, Tanner, or have you done it a while?
Okay. Yeah, for those that haven't done it, um, like it it's a pain. It takes I think nine days uh for it to be staked and it's a little bit quicker if I remember correctly. It's been a while since I've sold Ethereum um to unstake, but it's not instant. It takes a long time. So, Lana is a lot quicker.
Um so, this staking revenue is going to be somewhat persistent. It will change and eb and flow depending on how the underlying is is doing and people buying and selling and taking profits, but it's not I don't think it's going to be nearly as lumpy as just the actual crypto uh exchange volumes. Staking is going to be another form of those retirement accounts or gold accounts.
It's just added stable revenue for Robin Hood. Yeah. And if you're a believer in these ESBetss or BMRs, then you're hoping that Ethereum goes to 10,000 $15,000 per coin. If you are hoping for that, then you're going to love Robin Hood cuz what what happens whenever you're getting stake on that? What happens whenever uh you know the transactional volume on those coins continue to climb because people's assets under custody just tripled?
Like dude, I think we can say it. Robin Hood is the best Ethereum play if you are looking to get a a a reasonable riskreward. Meaning BMR, Espet, they're going to dilute like crazy, but you're going to get way more leverage than Robin Hood. I don't think Vlad's going to dump billions of dollars of shares on us.
In fact, they're buying back shares. And BMR and ESP aren't real businesses. That's okay. But Robin Hood's a real business. Staking is going to be relatively consistent. If Ethereum goes to 15,000, the most of the buy or I shouldn't say most, but a lot of the buying will be happening on Hood. uh and if they can keep increasing market share from Coinbase, then that's going to accelerate and uh the transaction volumes, the staking volumes, the uh AU just goes up and so the market will respond accordingly if that happens on Hood and you get to own a real business.
So to me, it's like I just think it's one of the best ETH place that's out there. It's a good one for sure. We I remember back in 2023 um you were talking about this too that you know some people were fascinated into and still are in crypto miners and others you know were like hey if you want to proxy bet on uh crypto Robin Hood makes a lot of sense and it's a lot more than a proxy bet on crypto but boy has that played out very well.
Agreed. Uh last thing on hood and then we'll move on. So what do you guys think about this? Vlad and Johan are doing a AMA on Robin Hood's Reddit or subreddit on Thursday about crypto. Uh Roy, any thoughts on this? Yeah, when I saw that I clicked on the link and I looked at some of the questions and it's it's kind of a uh there's some good questions on there, but there was some like run-of-the-mill type of uh
dividend spam type questions that you get on X or even on like Say Technologies when people are asking about a dividend. uh just unrelated stuff. But I I think it's great uh just having that access, you know, as retail investors or even in this case, it doesn't have to be investors, just people curious about crypto asking a question.
Um AMAs, there's at least when I was looking, there would look like a lot of questions. So, I think they they might pick, you know, like 50 of them and and deal with them. But, uh I love it. I absolutely love it as an investor. I love it as uh you know, retail guy as well. Um, and it's great that these guys have exposure to like real questions that people have that are in retail.
Did you see Vlad on uh Cheeky Pint? Oh, I I listened to the whole thing. He he was great. It was awesome. So good. It was a perfect podcast. And um that was with John Collison, one of the co-founders, the the the Stripe Brothers. and you've watched in real time as Vlad pitched uh John on tokenizing Stripe.
Now, that's a hard one to sell. I mean, the entire institutional market or or like uh institutional banks have tried to pitch Stripe on going public for, you know, the past decade. So, he's been getting it his whole life. Um Vlad made another attempt. I don't think it's going anywhere, but still unbelievable podcast.
Um, at one point we saw Vlad do handstand push-ups, which was interesting as well. Upside down doing push-ups during a podcast. Um, but you know, our CEO's ripped. Do you um real quick or Roy, you want to share something here? Um, re related to the IPO thing. So if you want to comment first and so so this is like a sort of a pivot to the Chama thing but also there's some o interesting overlap between what Chama sees with IPOs and also Vlad seis although a very different approach on how to deal with it.
So I wanted to talk about that a little bit. Okay so let me ask a question real quick before we transition to that because that'll be a whole different topic. Um so uh Roy you didn't watch the podcast yet right? Um no. Okay. So Tanner did. So Tanner, so so for the the for everyone to just give you a synopsis of the the pitch on tokenization, uh Vlad said, "Hey, let me tokenize your stock, get it to retail investors." And Stripe's CEO said, "Well, retail investors already have exposure because pension funds invest in venture capital funds and venture capital funds invest in Stripe.
So when we go public, the distributions from the uh IPO to the LPs to then the pension funds is how teachers in like Minnesota get a return on their investment." Well, not not just go public, just just the tender offers on their private correct shares. Do you think that was a legit answer or do you think that was missing Vlad's entire point?
I don't think it was missing I I think that he just said he just lacks the sympathy for the individual retail investor because the people that they're selling to are also individual investors as well. Do you think there's a point? Do you think that like teachers pension fund of California getting access to Stripe via a VC fund is the same thing that Vlad's talking about with you and I getting access to Stripe?
No, but I mean it is kind of true that if you are a capital light business and you don't need a raise, why would you raise? Like if if if Stripe is comfortable doing what they're doing, then fine. But I do think it's unfair for their employees, but they also don't want to be I don't know, maybe they don't want to be value like the a changing valuation for every single customer win and customer loss that they have.
Like maybe they like the fact that they get to decide whenever they want their their company to be valued. I don't know if you guys see, but companies usually IPO when things are going well. You know, the reason I ask is because this is a legit uh this is a legit not a bare case, but a legit critique of what Robin's doing with tokenization and you know, we're all excited about it, but if you don't get Stripe to agree to this you people can't trade Stripe, right?
I mean, maybe eventually in the future Robin Hood just bypasses it, but like the point is you kind of need the Anderles of the world, the Discords of the world to be on board with this stuff. And if they're not, you're left with like f-quality startups. And who wants to trade the tokenized versions of those?
So, well, I don't think I I think we still get some of the best a and this transitions us again. So, we don't have to go off of this, but there are capital intensive businesses that are some of the best IPOs or or best uh private companies in the world as well. I mean, SpaceX might end up doing this.
Um maybe a Open AI, for example. These companies do still need to raise like they're capital hungry. Stripe is just in a very unique position. Yeah. So they just happen to be one of the largest that are in that unique position. Yeah. I I think the issue there's several issues, but one of those is for the most part there's exceptions, but if you're a if you're a company that's doing just fine without the need to raise capital, there's usually probably going to be more drawbacks to being a public company versus private.
Um private you can almost do what you want. I mean there are laws, there is regulation uh for uh publicly traded companies. There is a whole lot and things have to be done in a certain way um on a quarterly basis. Uh it all has to be very regular high degree of accountability and uh transparency as well.
But if you're B2B, then you want the like do you want to deal with this unknown company like Synapse for example where you know that you have that whole fallout with that bank or with that banking partner or do you want one that's constantly publicly audited and you know that they're in a financially good situation?
Yeah, I I think that there'd be a preference towards B2B uh being public versus uh BTOC. Like consumers usually don't think in those terms at all. Um there's very few that do. So yeah, it's a good point. Okay, so that transish that transish I can't speak. That transitions us into that was good. A+ Thank you.
I I appreciate that. Takes us to Let's just get rid of the big words. The big words are the hard words. Let's Well, the the small words are also hard words, too. But it is what it is. Chamath is launching a new spack. That didn't sound good the way I said it. What is going on? I said something last night with Steve too which if you guys were on the future show then you probably heard it but Chimath is launching a new spa.
The company is worth 250 million 25 million shares at 10 per share. It's called American Exception Exceptionalism Acquisition Corp. Um the funniest thing in this is that he he put a disclosure out that says we believe that this investment is most suitable for institutional investors and retail investors should approach with caution if at all.
If they do lose their entire capital, they will embody the adage from President Trump that there can be no crying in the casino. Yeah, I saw that. Uh that's just ridiculous. That is a literal thing in the filing. So Roy, I'll take it to you. What are we supposed to assume now that Chimath is coming back?
Well, uh, I we have a whole bevy of new investors and and I think that I'm talking to to the three of us right here and if anyone else is listening to, I wouldn't say like necessarily duty or obligation. I think that's a wrong word, but uh I I I am personally going to take this route and I would highly encourage you guys to at least bring awareness to this.
Uh, now could the spa work out well? Yes. You know, there are a couple of cases like SoFi, ironically, actually, some of his best facts were ones that ended up not going public and so it just returned the 10 bucks to shareholders. Uh, so it's never a great thing, but but SoFi is one of the the examples that actually it worked out well.
There are other companies that have spacked successfully and become real legitimate companies as well. So, this isn't always a warning sign. It's not even necessarily a top signal in the market. And Chimoth, he does have a point here. I don't like the answer or a solution to this, but he mentions this in the founder letter.
This is in the SEC filings as well. And the the casino thing is right there, by the way. So, uh it's hilarious. But he he said in 2017 when he first started spacking, there were 150 private US tech companies that were unicorns. That's a billion dollars in valuation or higher. Uh and he said, well, a lot of these are not going public because inefficient pricing mechanisms.
Uh and and we've seen this like legitimately we've seen this time and time again. Bullish was a most recent example. Figma very recently. We've seen this with Newsmax. We've seen this with almost everything. Uh not current though. We believe that the status quo is a process to design to deliver a one-day pop and high levels of over subscription to an underwriting bank's best customers rather than creating a mechanism for efficient and market driven price discovery.
And I think Vlad would probably agree with all or most if not all of that. uh he's talked about some of that before as well. I think even Alex Karp, you know, they went the DPO method in Palunteer um just because they did not want to be part of this model. Uh they saw it as broken and obviously a lot of companies did misalign incentives as well.
The one day pop sell quick versus actually have an attachment to the company long-term impact as well. And then he said it's gotten worse. There are now 700 private companies in the United States with a billion dollars or greater five times increase in only eight years. And there's 5,000 public companies in the United States relative to 7,000 through the 90s.
Some of those have gone out of business. There's been consolidation as well. And so there legitimately as he goes in here, uh well, he doesn't go too much further on this. There is an absolute problem as it relates to uh the amount of private companies versus public companies, the size of some of them.
It's not that it should be illegal to be private or anything like that, but things there's a reason why these companies are not going public. And so Chimath's solution is, hey, let's spec let's circumvent the traditional IPO process uh through a special acquisition company that's a shell company, a shell corporation.
And the the difficulty is when you do that, you bypass a whole lot of the in some cases maybe a little bit too much, but in some cases very legitimate checks and balances as you go through. There's a lot of legal scrutiny on companies uh that go IPO versus those that go the spec route and are just acquired.
And then uh of course Vlad's take instead is rather than do this which has I think a lot of risk and we've seen this with with Chimoth like Spack just these days it just I know it's not a scam but I just see scam when I see those four letters and and my brain it's not dyslexia we got to figure out a new term for it.
Um but the the other reason you associated with scam is because Openo, Virgin Galactic, Clover Health, they're all down over 50%. Virgin Galactic is down 98%. He was the guy. let's not sugarcoat it. That was on the media networks convincing people these were phenomenal companies to buy into and then he dumped before the 2022 like he dumped 85% of his SoFi before SoFi fell to four bucks.
That is what makes this so pernicious. Yeah. I I I he's not a scam artist per se and he sees the problem correctly. I just think that there's so much more risk with this model of mass spacking a lot of companies versus uh Vlad's model which there's been push back on too just uh let's tokenize the private equity and give shareholders access to that.
I think that's a lot more attractive than than this Chimoth model and DPOS are hard so probably a lot of companies wouldn't uh succeed like Palanteer did through DPO. So I don't think that's a great solution either. I think Vlad solution is probably the best. Regulation probably needs eats up a little bit, but Chimoth's backing more.
Like, oh, so I'm going to be uh pounding the table a lot uh through videos and posts. Uh like not saying don't buy, you know, might might be a great company, but as a reminder like this is not a real company right now. They will look to identify companies and there are certain uh he talks about the areas that their fluenc focus on AI, decentralized finance, and defense.
Um there's a couple others that were mentioned throughout the letter as well. Uh they don't they they probably have some targets in mind, but we don't know what those are initially. Now I I read through this uh didn't spend more than like 45 minutes. Uh so the way it used to work is once they actually made the acquisition, if you weren't happy with that, if you wanted to back out, you get your 10 bucks per share back plus whatever treasury interest there is.
I think that that incentive is the same here, but it's worded a little bit differently. So yeah, I'm not sure, but I just Tanner, are we topping because of this? Um, let me do a poll in the chat as well. I'm going to do a poll in my chat. Do you think we're topping because of this? What What I will say is I don't actually know how different this is from what Robin Hood does.
I mean, I think the real difference is that Chimamoth holds a share of the business himself and he's dumping it whenever he wants, but the individual companies that he's bringing to market, I mean, I don't know, they were pretty hot venture names as well. Clover Health, SoFi, these these were all unbelievably overs subscribed business like like um Virgin Galactic, you know.
So bringing it to a new audience I I think is perfectly fine. And I think that that's what um Chimamoth did and that what Vlad will also do I think the part where where what makes it scummy is the fact that Chimoth also takes a share in the business and then dumps it whenever he feels like he wants to.
Vlad will take companies public that do not have the same level of um he's not taking them public, but but he's allowing retail and and nonacredited investors to bet on companies that do not have the auditing that you need to allow retail investors to purchase you in, which is kind of like a spa. And uh you know, they just hopefully don't take a share.
And I don't know if they do. Maybe they also do. Maybe Robin Hood takes equity stake in those companies. I I I think uh to to Chimat's credit, as I was reading through the filing, there is a new clause that like unless the stock goes up at least 50%, he's not allowed to sell. So there is some nuance that's way different from 2021 where he could dump whenever, which is um which is a good thing.
The other thing is I'll give my opinion. I don't think we're topping because of this, but it's getting hard to defend some of this Like I've been defending the ETH treasuries, the Bitcoin treasuries, some of these frothy valuations. But when you see stuff like this, it makes you think unless Chimath genuinely has a good company that he can redeem himself with by taking to the public markets.
This guy does not care about retail investors. He does not care about the little guy. He does not care about democratizing access. He quite frankly does not care about what he did in 2021. I've never seen an apology from him publicly. I've seen a defense of his uh behaviors, but not an actual, hey, I'm sorry that random people saw me on CNBC and bought stocks that I said potentially would go to the moon.
Now, obviously, everyone has to be accountable for themselves, but at the end of the day, like, if we're being real here, if they only bought them because of you, then you bear some responsibility. I don't know how you sleep at night without even giving an apology. Yo, but bro, let's I understand what you're saying, but if Robin Hood ends up tokenizing a stock that no one has heard of, well, not no one has heard of, but that you haven't been able to purchase actively previously, and then that stock ends up falling a ton, you don't think Robin Hood takes heat from that?
No, it's fundamentally different. If Robin Hood on your Robin Hood app pops up a new IPO or a new tokenized startup that you can invest in, Vlad's not out there on CNBC pumping to millions of people, hey, this is a great company to buy into. Yeah, it's just there. You can scroll past it. Chamath purposely, I mean, this dude created like it was like he was releasing singles from an album.
IPOA, ipo, IPO, like he led this entire marketing campaign. And yeah, I I guess the marketing is is the fault, but the actual like like bringing more companies public. I want I I want like like we're now at like a histo not historical, but we're at a very low amount of public companies. There's been like 10,000 companies.
We're at like 4,000 right now. Yeah. No, I want more public companies, but the way in which they come public matters, right? Yeah. Yeah. My my point is I I hate everything about this, but I don't think it's a top, but it is hard to defend because Chimath has been a a very hard character to defend in the public markets.
And so, I don't know how this plays out, but I don't think it's a top in the entire market. Yeah. Here's the uh IPO so far. So, we will beat 2024, and assuming we continue to be in a bull market, we're going to see a lot more in uh 2026 as well. We're still really definitely very different from 2020 and 2021.
Yeah, we're we're more norm in a normalized bare market uh not bare market bull market uh versus what's happening here. But this is still lower than you would expect. Like this is enough time for a lot of AI unicorns at 1 billion in valuation to have started up. Now some of them like scale AI have been acquired.
Uh this is significantly lower than I expected. Now we're dude there's no we had 200 IPOs this year. Yeah. Yeah, the a lot of these companies have gone on. I think there's 10 of them that are relevant. Oh, of course. Of course. But that's the market. Yeah, there's a ton of small names, right? There's almost like an IPO a day.
Like whenever you watch like uh if you have like a tracker for it, you'll see like three companies that IPO at certain days and I know zero of them. Yeah. Like it's only the big ones that people stop and and and actually look at, you know. That's fair. Yeah. There are quite a few. And the other thing I wanted to bring up was this right here.
This is what you're mentioning as far as the incentive structure. One important difference as well is there's no warrants this time. This whole bolded thing is essentially Chimath saying, "Yeah, last time a lot of people felt scammed. So, we're changing and we're we're being a little bit less egregious when it comes to what we receive.
Unless a stock price actually goes up and this becomes something, IPO investors get absolutely nothing." Now, if you look at what um Axel or whatever the the company was that came in and put it in there, u they're they're doing actually very little um for what they're actually getting in return. And Shamath, he's doing more than just putting his name to it.
But, uh yeah, this is the way that the incentive structure works is you're going to get this amount of dilution founder shares in 10 years or more likely once it hits these price targets. Um, LA last week, I'm just reading through this, there were seven IPOs last week and the only ones that we probably heard of was bullish.
Bullish. Bullish. Yeah. But there was NXRX, M A G, EU, UU, R Y OJ, Ntur. Yeah, I mean AX. Again, I I don't I don't think this is a top to the market because I think of it like uh open door, like pockets of froth that are there, but it is something that is undeniable because it triggers such bad PTSD from 2021 where all of us assumed that these spacks were just a normal part of the market and they ended up being horrible.
I do think he has enough humility to take a company public. That's not a pile of And you know, if that's the case, then I think he can he can redeem himself by bringing a company to public that retail buys into because you there is going to be some retail that buys into this no matter what. And if that company is profitable and like they have a runway of growth and they don't go down 98% because the business model fundamentally does not make sense like an open door like a Virgin Galactic, then that wouldn't be the worst thing.
Yeah. And on your point uh earlier regarding the the flack that Robin Hood might take from, you know, unsuccessful private equity, you know, the the firm goes belly up. I mean, they're they're already have memecoins on on their exchange. They have companies also that are publicly traded that are not they they should be out of business and they probably
I guess most of it is in the marketing. I didn't really think of that, but um yeah. Yeah. Okay, one super chat. Let me read this and then uh we'll get into uh Sam Alman stuff. Uh Pedro, thank you for the $50 super chat. Thanks for your content. Has made a difference in my investing life. Please divide this evenly among the three of you.
Would be more, but my oldest daughter is getting married on Labor Day weekend and checks for costs associated with the event soon flying all over the place. Thank you, Pedro. Yeah, thank you, Pedro. will be fueling PayPal's net income by paying $5 to send Tanner his his part of the the the super chat right here like I did last time.
Why do you have to pay me? You don't have to pay money to send people via PayPal. Apparently in to Canada there's a stupid fee that I had to pay just to send you your your your cut. So just just wait till we see each other in person. Just give them that or or Yeah. Uh Roy and I always get Mexican food whenever we see each other.
So Tanner, if I get if I give you US dollars, you can you do something with it or no? Yeah. Would you accept a US dollar like a $20? Oh, yeah. Yeah. I I prefer it. Santa's like, I want that freedom money. That's freedom money. American bucks. Write it in US. You can go anywhere in the world and people will take US dollars.
It is the truth. Yes. Agreed. Pedro, uh, thank you for the super chat and congrats on your daughter getting married. That's a super super special occasion. and thank you for being part of the channel. Uh, okay. Um, Palanteer short, I think, uh, Tanner, let's hear from you first since you don't own the stock.
What do you think of Andrew Left from Citron Research shorting Pounder? I think the short is a terrible idea. Um, I think a company that's doing what Palanteer is doing, a market can stay irrational longer than you can stay solvent. I don't know why he's ever trying to time what's going to happen on the valuation of Palunteer.
this could last 10 more years and and head even higher. Like there's Yeah. However, I love this comparison and why Roy is excited to get into this is because I actually do think that OpenAI at 500 billion versus Palanteer makes OpenAI look so cheap. And I said this Friday before this even came out, I said I would buy OpenAI like this.
It would be 10% of my portfolio the day it went public. And I meant it at 300. And I still like 500 is more expensive, but it's still there, right? Like but 300 is where I was like, "Oh my god, of course this is a screaming buy." Um, and now that he's talking about the the expectations for the companies, it really does put into perspective that 2026 you're probably going to see around 29 billion of revenue for OpenAI and you're going to see somewhere around maybe 6 billion for Palanteer.
I understand the margins are different here, but that's only going to get better for OpenAI over time as, you know, token generation becomes dirt cheap, cost of energy goes down, like like everything is in the um is on OpenAI's side for future margin generation. And I really think the whole commodity argument is sort of overblown considering they are the number one provider for uh like like Microsoft would love to own OpenAI.
uh you know um Apple wants to put like Elon Musk is getting mad at how much Apple loves open AI. Those are the two largest ecosystems in the world and freaking it's open AI every day. Like it's just amazing how how well positioned they are in my opinion. So I don't really care about Andrew Left's position here, but I did like that comparison.
I thought that that was really interesting. I'm happy to get ripped to shreds now. I'll put my chair back. Roy, what do you think of what Tanner said? And would you uh agree with Andrew's short thesis? Uh, no. The guy doesn't understand Palanteer at all, which I guess you were excusable maybe in 2022 or 2023 uh when you didn't see differentiation.
You were just looking at Alex Karp's uh long talks and discussions. Um, but I mean, if you go into his his initial short thesis, the updated one that he came out with, I think it was today. It was today. um he doesn't get the company. Uh he and I agree with Tanner like it it makes no sense like Citroen is basically shorting from what I understand Palanteer for two reasons.
One is they don't understand what the company does and the second is its valuation is quite high. I agree it's it's very it's quite high. Um wait is that what they said? They said we don't understand what they do in the report. No, no, roundabout. She doesn't agree with what, but I I also agree. I don't think that I think they understand Palanteer's business model better than you're giving them credit for.
I think that they are also just not telling the truth. I think he's kind of selling his book a little bit. I mean like it it is kind of like the spaghetti to the wall type of thing where he's not just th this is a flawed debate tactic frankly and you can comment on that to emit where instead of just taking your like three or four strongest arguments you're going through every single argument from very legit like valuation is quite high and open AI is doing a lot of good things to like just outlandish stuff that almost nobody believes and probably the person even writing the report doesn't believe.
So I think there was a lot of them in there that sounded like the argument whenever they were talking about Cash App being like rappers use Cash App and that's not like it was like that like done better just leaving that out. Uh and I I think it weakens the argument and it shows that you don't understand like one of those they they talked about Open AI how OpenAI has basically no competition and Palunteer has a ton of competition out there.
like you actually may have switched those names because I I don't know how you come away with that in 2025 2023. Sure, you can you can make that argument. That's a failed argument right now. So, regarding, you know, the short thesis, it's deeply flawed because I really think it's just one valuation.
Um I think he's throwing spaghetti at the wall to try to make uh the stock price go down. That's what short sellers do. That's their job. They're there to make money and they will do it uh as sketchily as possible. Uh not because well some probably enjoy being sketchy, but uh I don't know. I I always have a bad taste in my mouth from short sellers.
There's a legitimate place in the market for them, but I mean there's a reason why Alex carpets, too. is they Palunteer is not going to be put out of business by short sellers, but oftentimes they'll go after legitimate companies that are on the edge of making it and doing something special like Tesla and they'll try to kill them before they get off the ground, which is I I think it's reprehensible, frankly.
So, uh I I hope they lose a lot of money on this. I rarely hope that people lose money on this. I don't mind individuals shorting Ponte or whatever, but this kind of FUD is is ridiculous. Now on the on the actual uh piece that Tanner wanted to to talk about more so was the open eye valuation. It is it is a commodity no matter how you slice it.
Um here is well this is a little post that I did. I I I thought it was really interesting because it intersected Robin Hood, Google and also this uh little article as well for Palunteer. So on uh yeah on the prediction market on Robin Hood this is back ended by Koshi um they have a select the best AI at the end of 2025 according to LMIS the arena scores and uh a note as well that it will count as a no if there's a bunch of tide at the top.
So this shocked me. I would have thought chat GBT would be close to Gemini. Maybe Gro a step below and same with Claude, but they're giving like no credit to a lot of these. And Llama, fair enough. Quinn is actually really good too. Uh and and very little, but Gemini 59 cents, which implies 59% probability.
I think that this is probably the play is to say uh no just because I mean that's really high. But it's interesting because you look at the actual arena score and I mean it's they are fractions of a point different but Claude Gemini and GBT5 are neck andneck but if you go if you scroll further down the list I guess we could I mean you have a lot of upandcomers like Quinn out there and Kimmy I have no idea what KI is or Kimmy however you say it there's a ton there's hundreds and hundreds and hundreds of these open eye is the biggest it's the best it's got the spotlight but this is very much a commodity and it's you can do well with commodity if you size, if you have scale, if you are able to differentiate as well.
Open AI, I think, will, but your underlying commodity itself is going to get pressed on margins because it's a commodity. That's what happens. Uh, it's going to be a trillion dollar company or commodity in no time. And uh, hold on, hold on real quick. So, let me just say something real quick, then we'll get into this debate.
Uh, number one, I I think the short is also kind of stupid because his argument is valuation. If it was easy to short pound valuation, everyone would have shorted it because it's freaking expensive. We get it. Yeah. Why Why didn't you start your short at 90? So like at 180 he draws the line which maybe that is the right time to draw the line.
But I mean a short he's calling for a $40 price. I don't know if he's going to get that. And if it really doesn't go below 100 like what type of short are we talking about here at that point? You could have just bought puts. Like it's just it's not that exciting. I think he gave it a a 40 based on a price to sales which doesn't really make any sense.
But yeah because price to sales even at 20 was aggressive. So the idea that you use that doesn't make sense. Also, real real quick before we get into the uh commodity debate, um the dude's in court right now. So, Andrew Left has been indicted in the Central District of California on security fraud charges.
Prosecutors alleged he manipulated markets by using his media presence and online publications to push misleading stock recommendations while secretly coordinating with hedge funds and profiting 16 million. Today, he had a pre-trial motion. So, I'm not trusting the guy who's going to court based on securities fraud with a short on one of the most high-profile companies because he's probably going to put out media to try to get people to short it while coordinating with hedge funds.
I just think the whole thing's a mess. And I actually think if this was the guy to short Paler as the most high-profile short, I am very happy it's him because So, are you are you suggesting that the includes 17 counts of uh fraud? Are you thinking it's 18 counts of fraud? You think he's doing this again?
I don't know. But like the point is the fact that he's in court right now trying to fight for his innocence on manipulation and coordination with hedge funds and conspiracies. And now at the same time he's publicly shorting a big name and he's probably going to have to put out media to like what if the stock just stays stuck at 150 for the next couple months.
Like you need to put out media to get people to be scared. It's going to be the same type of manipulation. And then the question is is he working with other hedge funds in coordination. So, I just think it's a mess. And if he was going to short it, then I'm happy it's him and not someone else because he's got to be brave enough to actually go on this journey.
And I don't think that it's easy to short a name like Pounder given his history as well. Yeah, I think there's legitimate short sellers that make legitimate arguments. I don't think they do very well. It's just it's a lot easier to be long. There are some that do, I'm sure, but like he No, he's sketchy.
So, uh I think his whole argument is flawed. uh that that price to sells that you mentioned like he's like 17 time if Palanteer fell to 40 bucks a share I was wrong that would actually not be a good value it would be generous and he said that that's like a unicorn valuation among SAS and I looked at Snowflake do you think snowflake is a unicorn that it's trading like a unicorn it's trading at 17 times price to sell so it's like okay your your whole argument is so messed up and I was I actually just off the top of my head I looked up like six names and I think five of them were 17 price to So, I'm like, "This guy is an idiot." Uh, he's he's pulling out Well, I don't think he's an idiot.
He's probably, but I think that he's he's pulling out anything that he can legally to like, even if it's not really technically true, it it's not untrue enough to actually get sued. And there may be a point where he becomes desperate and does something illegal again to because there is like legal manipulation of the market where you put out those type of press releases and there's some that is very sketchy and illegal.
So, I think he's also trying to distract from his lawsuit. Like, ironically, today is the day you put out this $40 short report when you're being sued. I mean, well, didn't he do it last week? But, I mean, like same same days they released the official report, which by the way is behind a pay wall. So, it's like, you know, it's like they they wanted to get people on their website and not focus that the the the the manager of the fund is being sued for 16 million bucks.
Yeah. Didn't Andrew Left come out after the last big uh short that he did and he said they weren't going to short anymore because they got obliterated. Like Citroen Research got GameStop. Yeah. Yeah. Didn't they say they weren't going to short anymore? They were going to only do long positions. Well, Palanteer is too compelling of a short.
And I guess we're going to see if he ends up being right. The other thing is he doesn't have Wall Street on his side. Dude, the short float is 2% on on a 2.5 billion share company in terms of the the shares outstanding. So there's like 50 million shares shorted. There's not a lot of interest in shorting pound.
Now maybe he single-handedly can get people to get interested, but if he doesn't, then you know where is the upside on the actual short. Okay. Okay. So going back to um to the the commodity of OpenAI stuff. So Roy, your argument is OpenAI is commoditized and Pounder has less competition than them. Tanner, I think you you agree with that, but you still think OpenAI is going to a trillion.
Is that correct? I don't think the benchmark or where they rank there is what the average like I don't think that what people are looking for for open AI is not humanity's last exam score. I think they're looking for personalized solutions and like real utility not just how smart the model is. So if you give for example probably the number one feature that I use across any AI product is their voice mode.
They all suck except for open AIS. I mean, I cannot use any of the other ones other than open AIS. And for the most part, the image one only now has Grock and some of these have gotten good, but like even open AAI dominated in that. And they knew from a consumer's perspective that was much more important than other features.
Like that's why the Giblly style stuff blew up. They knew that that was just going to be a viral moment. So I think that what OpenAI is really good at is dominating in where they know consumers are going to love these products. So what I think a lot of people were worried about chat GPT5 was like how it actually marked and and its benchmarks versus how personalized, how emotional, how like those things I think are important for their average user and and yeah, I think it's the reason why they continue to take market share and and their daily average or daily active users continue to climb.
Like they are dominating and it's not because their model's the smartest. It's because it's the most useful. Okay, Roy, your uh response to that? Uh I mean like I I I guess Tanner, you're conceding that it is a commodity, you just think that they're positioned well to benefit from the commodity. Is that correct?
Well, I think the same way like if you look at uh a browser for example, there's a lot of browsers, but somehow Google has such an advantage over the others. Size and scale. Yeah. Right. Okay. So, so it is a commodity then. So I don't have to Yeah. Yeah. To some degree, but but there can be there can be personalized differences.
Like I mean commodity doesn't mean that there's no differences at all. It just means that there's enough in common that there's a lot of different options. It doesn't mean you can't profit from that. But there there are a ton. U now on the the voice comment that you said. Uh what other LLM did you just try that had the voice mode that you didn't like?
Gemini obviously. Yeah. G Gemini, Grock, and Chat GBT are the ones that I mainly use. Did Did you try any other the voice ones? Uh, outside of those three? Yeah. No. Okay. Yeah, there's a bunch out there. Um, I' I've only played with them a little bit, so I've not used them in detail. So, I'm just curious um you know, if you had used any of the others and found them not compelling.
But I don't think if you look at the the average like if you're not looking outside of um Gemini and um Open AAI the rest make up for like allto together single digits of the percentage of the market share like yeah that's that's a starting spot. I don't know that that's necessarily going to stay stay the the place part of the reason why open
if they dominate Apple and Microsoft they will part part of the reason why open is able to do this well first mover advantage is a significant thing I don't think Sam Alman is a dummy like he's obviously brought his company along this journey uh despite a lot of challenges that were along the way including losing Ilia initially and then this most recent exodus which is too soon to say how that's worked um
even losing Sam at one point and they will they will I sell quite a bit of other value added services but beyond the first mover advantage the reason why that they are entrenched very well right now is because they have a very low cost their their model right now and I know you have an argument on tokenization getting a lot cheaper and it will get cheaper over time um but we I don't maybe you know this like what is their cash burn like because my understanding at least it's it's dated but I think six months ago I was reading some things on it and it just it looked horrendous it looked like Rivian like just after IPO just
Roy but no before we get into the nitty-gritty of cash burn because like we we can talk for hours about that your your claim is that open AI is not different really from the other LLM because they're all burning cash too right but your so so your point is well no they're not all burning cash is burning a lot of cash are you talking about Grock is burning a lot of cash but Gemini is not burning a lot of cash
well Gemini is okay because that's Google but Claude is is losing a little bit of cash but they're close to profitable I think they're a year away Um, there's a lot of smaller models that are actually profitable right now. I think there was an internal memo that got leaked from OpenAI that said they were going to lose 20 billion per year for the next few years.
Okay. But the Roy, your point is OpenAI is not that interesting of an investment because uh essentially you can do whatever you're doing on OpenAI elsewhere and and that's sort of the the thesis of the commoditized argument. Yeah. But that's like saying you can do anything on a Motorola that you can do on an Apple iPhone.
So I I I would take Tanner's side on this. I think the first mover advantage OpenAI has is monumental. You ask any regular person what they think of when it comes to AI, they say chat GBT. They have 700 million weekly. Grock barely has or Twitter barely has 600 million monthly, which means Grock is nowhere near 700 million weekly.
Like I think OpenAI's won. I think they they've won when it comes to LM, especially on the consumer model. They will fit they will figure out the business model in the next five years. I really I really do think that Google can win because I don't think that they have I the problem that open AI doesn't like they don't have any ecosystem but that's why all of the ecosystems are partnering with them is because they don't see them as as a threat.
So like Apple is not going to go to Gemini because it's just going to power Google and that's that's a dangerous thing. That's like why banks don't partner with Galileo because maybe they don't want to make SoFi even a harder competitor. But OpenAI is just doing this whole thing. So every company can work with them because they're just doing their own thing.
And also, let's just not even be complicated. Like Roy, I'm interested in your take on this. Like any regular person that's not in the tech bubble in finance. They they think of ChatBT when they think like they don't it's a verb. They don't even they don't know what a Grock is. They've never heard of Gemini.
Like you got to be a coder to even know about Claude and all this stuff. It's I don't think that market share is going anywhere but up. They they won. They got the first mover advantage. I don't agree with that. But yeah, they would have to be so horrendous in GPT 6, seven, and eight for Grock or Gemini to meaningfully get the rest of the world to leave open air, which is possible, but what are the odds of that realistically happening?
Yeah, I I just I think that if there's a bubble in AI, it's in private market uh AI companies, and this is just case in point. Um I'm not saying that Palunteer isn't egregiously expensive. I'm not saying that open air won't go to $1 trillion dollars. It probably will. Uh they they need to raise money.
They're could continue to do this. There's a lot of demand for what they're offering. Open AAI is going to do twice the revenue that three times the revenue of Palanteer this year. But they and they burn a lot of money. Yeah. But Roy but Roy Palanteer makes a very small amount of profit even if OpenAI makes none.
Right. But that's scaling rapidly and like the the thing is we cannot take for granted especially when you have a commodity uh and you have a leader that hasn't done this before because it's it is a hard problem. We shouldn't understate that for uh even for a SAS company to go from unprofitable and burning a ton of cash to profitable.
I'm not saying that they're not going to do it. I'm just saying it's a mistake to take it for granted that they're going to be instantly profitable that tokenization prices will collapse. Um I I I'm skeptical. Yeah. But look at what look at what fa Facebook was just dumping through C Google like all these ones that had an unbelievable market share to take.
They were just they were just cash pits or like fire pits for cash to take market share. So would you would you change the strategy of Open AI in any way? Because I think they're going about it perfectly. So you think advertising will save Open AI as far as profitability? Not advertising. Hold on. Speaking of uh business models, let's take a look at this uh clip that just came out from a podcast from Dylan Patel.
Big semiconductor guy speaking exactly on this topic on OpenAI. Big fan of Dylan. What did he say? I said big fan of Dylan. Okay. Yeah, this guy knows semiconductors very well. I think I think the router points to the future of open eye from a business, right? In any other application, consumer app, the free user still pays via ads.
Um, but this is not compatible with AI, right? Like it's a helpful assistant. You can't just make the users result worse by injecting ads. Banner ads don't really work uh in AI either. So, it's like how do you now monetize them? And I think I think they're getting with the router, they're getting really close to figuring out how to monetize that user, right?
Oh, if the user asks a lowv value query like, hey, why is the sky blue? Just route them to many, right? like you know the model can answer perfectly fine and that is a chunk of queries right and but if they ask like what's the best DUI lawyer near me right all of a sudden this is like you know you're in jail you have one shot you know you're like screw it let me ask Chad GPT what the best DUI law is and now all of a sudden you know the model's not capable of it today but soon enough it'll be able to you know contact all the lawyers in the area and um you know figure out what their results are and maybe search their like court filings and whatever right and and and book the best lawyer for This is a much better way of like monetizing the free user.
It's like, you know, it's like Etsy 10% of their traffic now comes from chat and open makes nothing off of that, but they very they really really will soon, right? Um, and partially that's because Amazon blocks chat, but like you know there's a way to make money from shopping decisions, whether it's booking flights or looking for.
So essentially agents will be the way OpenAI takes a fee off that. This is just one of many business models I think they have. I think they figure out the the profitability stuff in the next five years. I don't think that's the the concern on OpenI. And if the runway is long enough, it might not even be five years.
Like because if you have companies that are cutting you $40 billion checks, SoftBank is essentially telling OpenAI, hey, you don't need to worry about monetization just yet. Can continue to take care of market share. We got you. You know, if they need to bootstrap it, they could, but they that's not the way that you find the winning formula right here.
It's fullon growth mode and you're seeing it from one of the smartest names in venture capital that have that that knows how to scale. Samman is like he's from this space like he completely gets it. So I think it is completely take market share mode and and he's winning. I mean you're you're you're in the ears of Tim Cook.
You've won the game. Well, however, I do want to say really quickly that I don't think that they've won entirely. The virality in AI right now is insane. And you can put out one little product like Gibli photos and stuff like this and just see 3x the volume. And Gemini did that in their last meet about Gemini um or Google did that about Gemini where they showed off um you know different things V3 all of these different products and they saw like a massive spike up in their user growth.
So there can definitely be breakthroughs like what we saw about Deepseek and all these things. We're going to see new players come in very fast, but there are there's moments for that breakthrough in OpenAI as well. And and I honestly think this will be a trillion dollar company. It'll be the largest uh like a top 10 business in no time.
Roy, you think uh you think GBT is just not not it? If it was Well, I mean, you're right on cash runway plenty of time. they are in scaling mode. Uh I'm not like GPT is terrible or not going to make it or anything like that. Uh 500 billion is pretty expensive and to hit they hit 1 trillion in valuation.
I'd have to look at publicly traded companies. Uh but I believe that might be the lowest amount of revenue of any publicly traded company trillion dollar valuation like ever. Palanteer will pull that off first. So that's okay. That's Palanteer. I actually don't think so. I I I I would venture to bet OpenAI hits it before Palanteer.
It's it's very possible they can't probably it's private market almost 100% certainty like yeah it's private market uh it is uh I mean there there's not many of these that you can invest in a lot of these models are not uh just something where you can buy stake even in the private markets. Enthropic certainly is the other better known one and I think they're killing it.
But yeah, so let me ask in the chat. If OpenAI went public today, who who's buying? By 2029, I think they're expecting 125 billion in revenue. Like like you you talk about look at the amount that the that the top 10 companies are making. We're acting like Nvidia wasn't there and everyone was like, "Oh my god, this is the most expensive company." Now we all look at it as super cheap because the the stock hasn't risen as fast as their revenue, so their multiples have gone down.
But there was a point in 2023, 2024 where Nvidia's stock was skyrocketing and it was really on their potential growth rates going forward. So they were at, you know, tens of billions way way lower than a Google or Microsoft Steve was making article and article about how expensive this video or this stock was.
Now it's his favorite stock in his entire portfolio. So, OpenAI is going to follow that exact same trajectory and they're growing much f like they're going to they just tripled their revenue in 2025 and now they're going to do another 100 plus% revenue growth the next year. This is insane levels of growth.
What happens when they have a billion weekly users? Like, no, I get it. and and and really I think that there's going to come a moment in in AI where there's a step point where where human capital the amount that people are spending for for labor becomes silicon capital GPU capital and that that the amount that companies spend on their workforce will be spent to catch and Nvidia and these types of players rather than going to open markets to to to find labor.
Right? This is where a large percentage of of companies will head. And and how do you value that today based on average revenue per user whenever it's going to be valued at $20,000 a month, $10,000 a month for, you know, a product that Chat GPT is going to sell you. Agreed. Like, and I look, I don't believe that their hardware is going to be that exciting, but let's say they do come out with a iPhone competitor and it works.
I don't care about that. I don't care about that either. But I mean, that's another tailwind that theoretically could happen. Now, one thing we have to discuss that we haven't, and I want to read this whole thing, and I want to get everyone's reaction to this, because this kind of contradicts what we're saying about OpenAI being kind of cheap here.
Uh Sam Alman talked to some reporters on Friday and some quotes. He said, "When bubbles happen, smart people get over excited about a kernel of truth. Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time?
My opinion is also yes." Alman appeared to compare this dynamic to the infamous.com bubble. Uh his comments add to the growing concern among experts and analysts that investment AI is moving a bit too fast. You have other people in the investment world that have raised similar warnings. Is Sam Alman saying that his own company is overvalued?
No. I think that there's a bunch of companies that are tr that are getting the the Tesla premium where they go, "Oh, Tesla did it, so Lucid's going to do and then they get a massive premium off of some other company's success. And so there's a bunch of tiny companies that are getting tens of billions of dollars worth of valuation for not even remotely the same level of execution.
And I I agree, you know, I don't know that he's saying necessarily that he thinks that open AI is at that point, but there's a lot of other companies too that are just throwing around AI still. uh like it's 2023 and you can just say AI 30 times and your stock goes up. Uh case in point recently with some investors open door uh we we talked about that one before but like oh why why is this going to be a great thing?
Oh because AI and AI this and AI that they're doing this way with AI and that with AI say AI you know 100 times in 10 minutes and then the stock goes up and it worked today. So, um, I was listening to a go off today on Open AI. Holy Open Door, not OpenAI. Oh, sorry. Sorry. Yeah, Open Door. We can talk about that, too, if you want, but I I I I I agree with you, Tanner.
I think Sam Alman's basically saying everything's overvalued except OpenAI. I think he's saying all these LLM companies, all these AI startups that attach AI to their name, that's if investors are paying ridiculous multiples for that when there's nothing real there, that's the exuberance, just like the dot bubble.
But uh the open eyes of the world are obviously not that exuberance. Even if they're getting a crazy multiple, they will grow into they at least have the potential to grow into it. Whereas some of these like I don't want to name names, but there are some names that are out there that attach AI and like you know they're not really growing.
So So part of Tanner's argument or at least I thought that you were going this direction when you basically said that it was just a good comp in our our private discussion. Uh I I thought you were basically say part of it I thought you were talking about the valuation of Palunteer and I'm glad you weren't you know saying that based on price to sales which was a silly argument.
Uh but uh just that I see that you're just saying it makes it seem that this valuation 500 billion which initially surprised you now you're like hey I'd be okay with that. So your your response was a little different than I expected. Um would if this was publicly traded valued at 500 billion exactly as it is right now would you sell some Palunteer and buy OpenAI?
No, I wouldn't sell Palenter to do it, but I would try to find new capital and like buy OpenAI. Um, because look to to me it's very simple. It's very hard to find companies that are growing at the speed that they're growing at that have the user uh first mover advantage and market share that they have.
Now Palunteer to me the thesis is just so incredible because of how they're growing in the enterprise and after that quarter if they can keep that up for the next couple years this is going to be a very very exciting story. But OpenAI is going for 8 billion people using their product every day. Like we haven't seen a product ever even have the potential to get to something like that since Google.
And Google's entire business model now is being flipped upside its head. What what I see Meta as or um I gave it away. What I see open AI as a little bit is a little bit of a meta. Correct. And and Sam Alman talked about this. Dude, I was using chat over the weekend. the experience you get talking to an AI and learning, it makes you feel good versus scrolling through Facebook and seeing just like nonsense and and clicking on ads and that is a threat for the competition of time because if meta doesn't have people scrolling through their apps, they can't sell ads.
They lose. And so I think if AI becomes competitive, I think that's why Zucks is going so deep on super intelligence to build like these AI meta bots. I don't know who's going to interact with them realistically. I mean, they will get some percentage of users, but if OpenAI wins on the user experience, I think they win the game and I think that's worth trillions.
Yeah, maybe. I I think and this is weird because we talked about Google previously before. I think Google is their big problem because Google does not have to make Gemini profitable. They're also not burning a lot of money. They also control their own tech stack. they can afford to make. Gemini is in my estimation almost as good if not as good as GPT5.
Um I use it a little bit less than than open eyes. Uh that's my number one still, but it's very good and they can make it uh cost nothing and you're already using Google, easy to sign in. Uh if they choose to go that route, I think that they can really dent uh OpenAI's lead and they won't be the only ones doing that.
And I want to add because Zoom is a great product and I'd say that Zoom is better than Teams, but Teams still won or sorry, I meant more Teams versus Slack mainly, but but let's include Zoom in there anyway. But Teams won overall regardless because of the bundling effect. And Google has so many bundling advantages.
Like you could see now they're selling packages where they're going, "Oh, you know, get Gemini Pro, get all of these things. we'll give you two terabytes of, you know, um, drive space and all of these extra benefits that Google has. It is an amazing advantage. Um, Elon Musk's tweet, if uh, maybe a minute, I'm sure you've covered this about him talking about how Google is most likely to win the AI race early on.
Um, Google does have the full tech stack. That's why I said it might be a little too early to say that OpenAI has won because they don't have the ecosystem. But they seemingly are partnering with the biggest names that do. The biggest names that have slacked a little bit. Well, yeah. I was going to say like their their biggest thing going for not not really their biggest.
It's I I need to give them more credit. Like it is a well-known company. Sam might be a unicorn CEO. We'll have to see. Like I I think that he nails it. I think that's already proven, dude. I I don't know about that. But um $500 billion company, but bro, he snaked the hell out of Elon and the guy got fired because they couldn't trust him.
Co-founders left the company. I mean, there are definitely some ethical concerns about him as a CEO. You can't deny that. I don't know. Hey, you know what? Steve Jobs got kicked out of his business, too. Okay, so if we're putting up there like No, no, but but Steve Jobs got kicked out because he was a dick and he stayed a dick for the rest of his life.
Sam Alman literally the guy who came up with the name for Open AI and funded it with 40 million of seed capital somehow doesn't own equity in it. Like you don't feel a little bit of concern about trusting that guy? We we need more time is what I'm saying for to make that determination. I think it's I think it's prudent to say they've created something special.
Um we'll see how special he is as he executes over the next few years. Um and he may well be a unicorn uh level of CEO. Um I forgot where I was going with that though. Yeah. I mean, look, I I think opening eye is still going to do very well, but I there there has to be some reservations around Sam, dude.
Like, why did the co-founders leave? Like, can someone like why did Mirror Morati leave? Like, why did I leave? Are you that you have a chance to achieve AGI become a multi multi-trillion and you just leave? I find that hard to believe that, oh, I'm just going to go do my own thing. That's a we like I don't know if we've come to the end of that saga on why that happened.
Yeah, that that's another reason and that's a great point. I didn't even think about that. Uh why it would be so if it was IPOing tomorrow, I would be buying shares. Absolutely. Uh yeah, and I would be looking to exit, you know, sometime over the next year probably, but I don't him as a CEO, I just I have some reservations.
Um I think he might be incredible, but he also might be less incredible than a lot of people portray him at this moment. Uh, and I I just versus like Alex Karp, I don't know many people that actually have reservations with him unless it's just very strange like I don't like his haircut or why can't he wear a tie more or why is he so good at spinning laptops on his fingers, you know?
Just Yeah. Uh, I think the way for all of us to win on this though is Nvidia, right? Like at the end of the day Yes, sir. Yeah. Probably Google, too. Honestly, guys, I'm coming around. Oh, do we want to do we want to quit? You're coming around. What? That's breaking news. When I mean, like, I'm not buying, but
bro, I saw you say bad things like two days ago. I I still think I still think that I'm right on not all their their model, but like half the revenue is going to have some issues. It's a deep enough moat. I think it gives them enough time. Like the longer and the more I look at it, I think SEO is a dying industry.
Uh and and there will still be some that make the iteration and make the change. But yeah, what they're building with everything else, like literally everything else except for search is just either really good or amazing. So wait, so let's talk about this real quick. I'm not going to read the whole thing, but Chris Camilo, friend of the channel, he came out with a thesis that Google is inflating their search queries using AI uh or indexing AI queries on bots like Chatubi or G or or Grock and that's coming into Google's actual search results.
That's why their search queries are up year-over-year. He disclosed he has a small short position uh and he's seeking truth and transparency in Google's policies and disclosures. The reason he has a small short position is because he's thinking advertisers are going to wake up kind of similar to Royy's argument and recognize that a lot of this stuff is fake and that will reflect in the numbers.
Roy, do you agree with that or do you are you coming around to the point where that might not be as big of a concern? I I I don't think that there's something deliberate happening there by Google um in in as far as like characterizing AI traffic as human traffic. There may be some things slipping through the cracks that wouldn't be shocking, that wouldn't be unoured, that wouldn't be uh irresponsible either.
I think the bigger issue is what Chris Camila is pointing at there is uh you know, he's asking for transparency and details. Guess what Google will give him? Nothing. Nothing. And and it's their right to technically, but there's a whole bevy of shareholders that I think deserve better. Frankly, there's a whole bunch of SEO guys that deserve better.
There's a whole bunch of businesses that are advertising that are seeing some are seeing amazing great results. That's rare. Uh it does happen and I think that they deserve better and Google will not give them that. Uh I think because of I what I underappreciated probably when we talked about this a month and a half, two months ago is just how deep that mode is because I mean they've dominated this model the internet was built upon favors and was built around Google.
And so people are going to switch off of that as time goes on. Uh but even though many are unhappy, I would say, you know, probably more than half the the SEO people, a lot of the advertising people are unhappy. Businesses, I'm not sure. I don't have a great read on that. Uh but I imagine that a lot of them are not super thrilled and have concerns.
they're still going to wait a long time to switch just because like for the SEO people some of these people maybe graduated you know like 15 years ago all they know is SEO specific to Google a little bit being and stuff but I mean you know comment browser is not out yet like it's going to take a while before there's anything else that's out there that's compelling as far as search so what I'm saying is I I I don't know that there are there actually are companies that are switching some of their advertising spent away from Google but it's it's going to be a trickle at first same with SEO kill people, although maybe they just die or or do something different.
U and so that's going to take a lot longer than I think I initially appreciated. So that's that's where I'm coming from. But yeah, Camilo, he's going to get absolutely nothing. I think there's going to be increasing amounts of smoke and I'm hoping that that translates to the share price just tanking to our rational level.
I don't think that we're there yet with Google. And at that point, I would easily become a shareholder and an investor because again, half of their business, it's phenomenal. And the other half their business, it's going to deteriorate over time, but it's not going to be overnight or all at once. Tanner, any quick thoughts on the short thesis?
Um, no. I'm gonna I'm gonna focus on the fundamentals. uh mainly I mean you can talk about the queries but at the end of the day if you think that they're lying on their gap numbers then still a growing business and yeah I don't know I I I think that once again this is going to be one of those those types of talent at at 10 or Google at 200 where you can say hey you know what I've got this gut feeling you have that gut feeling we're going to have to wait and see with the numbers because I don't have any concrete evidence to say that Google is going to do well, but I'm not seeing people switch away and um I believe in what they're making and I think that they have a strong tech stack and and an unbelievable um ecosystem.
So, I'm I'm just betting on that and we'll see what happens on Q3 and Q4 and 2026 and beyond. Yeah, I agree. until it shows up in their numbers, which that's why, you know, Chris Miller did say he's he he he thinks long-term Google's fine, but short-term he thinks this could be a hiccup, uh, which is why he has this like small short position.
But if it doesn't show up in the numbers in a meaningful way, I don't know if that actually leads to Wall Street getting upset. And that's the case, then Google probably continues to do well. All right, that is it, folks. Thank you all for being here. Next week will be live. Uh Nvidia earnings is also next week on Wednesday.
So that'll be something we cover. Uh Powell speaks on Friday. So hopefully he says something nice and uh we can price in that rate cut. And that is pretty much it. All three of us uh will be at the Hood Summit in Vegas. So that will be very fun. We'll be covering that live. And yeah, we got a lot of stuff to look forward to when it comes to Robin Hood.
It's going to be a blast. Okay. real quick. Should I Can we talk about this live? Are you going to do IRL content? Uh, and I'm probably not going to be streaming in real life. You know, you need a setup to do that. You can't just put it on your phone. You need like a There's like actually gear you can buy to like stream when you're like walking around.
And I don't have that gear. I've got a DJI uh Osmo Pocket, which is not for streaming mainly, but for recording recording, but makes it extremely easy. We should make a vlog, bro. Like a legit vlog just for the event. Yeah, just like a vlog of all three of us in Vegas. I think that would be fun. Yeah, we should.
We should. Good time. Yeah. But yeah, we'll be in Vegas. We'll cover the summit and uh it for active traders and then you got banking in the fall. So, two big things for Robin that we'll be covering. You know, it's for active traders, but I'm flying out to just twiddle my thumbs. And yeah, none of us are active traders.
None of us are like trading 20,000 shares of a stock up and down. But like I'm just think like active traders are by far the customers that make them the most money. So the things that they have to say at this event mean more than most of their events, right? So, it's so important for me to be there.
I want to see what what like it's becoming a larger percentage of my portfolio. I got to take this seriously. So, I I can't wait. I I hope that Vlad yet again asks who all are Robin Hood users and that Tanner is the only hand that doesn't go up because I don't know that just gives me a lot of joy. So, what a stupid question.
Don't you don't have to ask that, bro. We're at the Robin Hood summit. He should. I have a badge around my neck. Just like let me be. Actually, even better. I'm hoping that Vlad asks, "Is anyone not a Robin Hood user here?" And that you just have one hand without a collar on your shirt. Yeah, he'd probably just see me and laugh.
Of course, that might be the Canada announcement like, "Okay, well, we got you, Tanner. We're coming to Canada in two months." Like, oh, yeah. Wonderfy. Let's not forget. Yeah. And like this, we didn't talk about it earlier, but and I don't want to go too much longer. I know we need to close, but uh this was I think their best event last year was the Robin Hood Summit, even though I'm not an active trader, like showing off legend and all the different things that were coming out, including futures.
Very, very good, very interesting. It's where they can make a lot of their revenue, too. uh we're going to see I think you know because it's enter the mainframe just a lot of very cool technology geared for active traders certainly but there's also I think going to be a lot of AI type of products you know Cortex as well but a lot of iterations as far as what Cortex can do uh I don't think it's going to go fully like the the route and the direction that the the founder of Pluto that Robin Hood acquired will go but yeah I'm excited and I I don't know like every single time we go we we go in with high expectations for Robin Hood event and they they have some sort of thing that we we never maybe we saw coming eventually, possibly one day, but it's great.
So, it's going to be a lot of fun. All right. I love it. We'll be covering it when we head to Vegas in a couple weeks. Thank everybody. Appreciate it. Have a good night. See you tomorrow morning open and we'll be back next Monday. Bye everyone.
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