Today, we are doing a deep dive on Tim Cook, who is stepping down as Apple’s CEO and will be replaced by SVP of Hardware Engineering John Ternus.

PS. Also lots of links and memes as always.

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On Monday, Tim Apple Cook announced that he will relinquish the CEO role at Apple in September. He will become Apple’s executive chairman and hand the reins to Apple’s SVP of Hardware Engineering John Ternus.

I had two instant thoughts when I heard the news.

First, I can’t believe Ternus was able to climb to the top of Apple with such a lazy LinkedIn bio:

No banner image. His profile photo is blank when LinkedIn users are logged out, which is a huge red flag for recruiters. He doesn’t break down the various positions he held at Apple. Nor does he itemize the role-by-role achievements. Most glaringly, he’s never done a social post to celebrate his wins or show thought leadership.

My second thought was that Cook had a pretty INSANE run as CEO.

He is 65 years old and will have served as Apple’s CEO for just over 15 years when the switch happens. Since Cook took over for Steve Jobs on August 24, 2011 — he was 50 years old at the time (same age as Ternus is now) — Apple has put up some video game numbers:

• Market cap increased by more than 10x from $350B to $4T ($700m a day during his tenure).

• Annual revenue went from $108B (2011) to $416B (2025).

• Net profit went from $26B (2011) to $112B (2025)

• Installed devices is now at over 2.5 billion.

• Services revenue — aka squeezing Google to be the default search on Safari and milking mobile game ads — is up 11x from $10B (2011) to $109B (2025).

• Wearables (Watch, AirPods) revenue reached $36B in 2025, more than AMD ($35B), Essilor Luxottica ($33B), PayPal ($33B), McDonald’s ($26B) or Adobe ($24B).

• The left bud of an AirPods set I bought got lost a record 3x in 2025.

Overall, Cook added $3.65T in market cap. Just silly. Granted, this took place during the ZIRP era. But we’re talking a only a handful of other CEOs that have added over $1T market cap.

Jensen and Nvidia. Satya and Microsoft. Sundar and Google. Zuck and Meta. Elon and Tesla/SpaceX. Bezos and Amazon. Hock Tan and Broadcom.

To be sure, Steve Jobs going HAM from 1997 to 2011 laid the foundation for Cook’s run by rebuilding the entire company and releasing the greatest sequence of consumer products in corporate history: iMac, iPod, iPhone and iPad.

Jobs also started Apple’s lucrative search partnership with Google, kicked off the services engine with the App Store and acquired PA Semi, which is the foundation for the crucial Apple Silicon.

Cook is the operations and supply chain savant, though.

As many noted, Jobs (together with Jony Ive) repeatedly took Apple products from 0 to 1. Cook took those products from 1 to 2.5 billion.

“Tim Cook couldn’t have done what Steve did,” Warren Buffett told CNBC in March. “But Steve handed him a hand Steve would not have done as well.”

Less in dispute is the fact that Cook is literally leaving at Peak Apple.

The last earnings report was in January and Apple announced a record $144B in quarterly revenue (Nvidia’s revenue for all of 2025 was $131B; like I said, video game numbers). Services hit a quarterly record of $31B. EPS hit a record. iPhone had record sales in every geography segment with the Hermes-like Cosmic Orange colorway leading to blockbuster iPhone 17 Pro Max sales in China…proving once again I know nothing.

Then, Cook got Paul McCartney to perform at Apple’s 50th anniversary on April 1st, 2026. Just winning.

While Cook is indeed leaving at the top — and by all accounts has chosen the right successor — there are two huge issues hanging over Apple: its dependence on China and its AI strategy.

We will talk through it all while enjoying some incredible memes by covering these topics:

• Steve Jobs Hires Cook

• Cook’s CEO Run

• The China Question

• The AI Question

• John Ternus & Apple’s Future

Steve Jobs Hires Cook

Man, if you thought John Ternus had a lazy LinkedIn page…Cook doesn’t even have a profile at all. Either something is wrong with LinkedIn or something is wrong with Apple. I can’t decide which one.

Anyway, someone on LinkedIn mocked up a fake Cook bio:

Before Apple, Cook — born in Mobile, Alabama — was the first person in his family to go to college and graduated from Auburn University with a Bachelor’s degree in Industrial Engineering (then later got a Duke MBA).

“Industrial engineering is essentially the study of people and machines,” Cook told the WSJ in 2025. “[It’s about] how the two working together can create things that they couldn’t create on their own. I’ve always viewed the supply chain to be a bit of a piece of art when it was done correctly. Because it’s a symphony of…1000s of different components and parts coming together to create something.”

Cook started his career making supply chain art at IBM, where he spent 12 years working on just-in-time manufacturing and distribution for the computing giant’s personal PC business.

Then, came senior roles at Intelligent Electronics and Compaq.

When Jobs returned to near-bankrupt Apple in 1997, he wanted to clean up the company’s bloated product line and bring back the Apple magic of vertical integration with as much control as possible of software, marketing, distribution, hardware and logistics.

Cook was one of the PC industry’s top minds on the latter two topics. Apple recruiters repeatedly reached out to Cook and he repeatedly turned them down. Fair enough. In the mid-1990s, most tech industry observers would have predicted a much more fruitful future for Compaq than Apple.

Cook said as much during his 2010 commencement speech at the University of Auburn:

Only a few months before I’d accepted the job at Apple, Michael Dell was publicly asked what he would do to fix Apple.

He responded, “I’d shut it down and give the money back to the shareholders.”

In making this statement, what distinguished Michael Dell was only that he had the courage to say what so many others believed. So, Apple was in a very different place than it is today.

My employer at the time — Compaq Computer — was the largest personal computer company in the world. Not only was Compaq performing much better than Apple, it was headquartered in Texas and therefore closer to Auburn football.

Any purely rational consideration of cost and benefits lined up in Compaq’s favor, and the people who knew me best advised me to stay at Compaq. One CEO I consulted felt so strongly about it. He told me I would be a fool to leave Compaq for Apple.

Indeed, when Cook joined Apple in March 1998, Compaq’s market cap was ~10x more than Apple ($40B vs. $3B).

So, what changed?

In an interview with Charlie Rose in 2014, Cook said he finally agreed to meet Jobs and it sure sounds like he got hit with that reality distortion field because that single chat was enough to sway Cook:

I was at Compaq and I was happy — or thought I was — and [Apple was] persistent. So, I finally thought, “I’m gonna go out and take the meeting” [because] Steve created the whole industry.

I’m just thinking "I’m gonna meet him” but all of a sudden he’s talking about his strategy and his vision and what he was doing. [Apple was] going 100% into consumer when everybody else in the industry had decided you couldn’t make any money with consumers.

[These other companies] were headed to servers and storage in the enterprise.

I had always thought that following the herd was not a good thing.

He was doing something totally different and he told me a little about the design [for the upcoming iMac and I was really interested].

The way the chemistry was…I could tell I can work with him. I looked at the problems Apple had and I thought “you know, I can make a contribution here”.

Working with him…would be the privilege of a lifetime. All of a sudden, I thought “I’m doing it, I’m going for it.”

You hear this voice in your ear, “Go West, young man.”

As an engineer, you want to write down pros and cons. The financial part of you wants to look at it…and sort of validate the decision.

It didn’t make sense, yet my gut told me “go for it” and I listened to my gut.

There was no one around me advising me to do it.

Cook was hired as SVP of Worldwide Operations with a base salary of $400k (and a $500k signing bonus).

Jobs told his biographer Walter Isaacson that Cook wasn’t “a product person” but was still the right fit: “He had the same vision I did, and we could interact at a high strategic level. I could just forget about a lot of things unless he came and pinged me.”

The Cook work ethic is legend. Gets up at 3:45am every day. Goes through hundreds of customer and employee e-mails. Gets to gym by 5am. Office by 6am. Has a photographic memory and can pick out random numbers in a 120-sheet spreadsheet. Works for 12 hours and is bed at 8:45am. Rinse, repeat.

There’s a line in Isaacson’s Elon biography — Elon was beefing with Apple’s App Store after he bought Twitter and Larry Ellison suggested he go to Apple HQ in person to iron it out — that what Cook’s dedicated work life created:

“Musk had a deep appreciation for the difficulty of supply-chain management, and he considered, rightly, that Cook was the master.”

Truly a hall-of-fame “trust your gut” call by Cook…also hall-of-fame blue denim-maxxing by the Apple C-Suite in late-2000s.

Cook’s CEO Run

When Apple made the Cook-to-Ternus CEO announcement, there were broadly two camps of reactions on the X timeline:

1. Cook never innovated and just built on Jobs incredible comeback

2. Cook built either the #1 or #2 most valuable business in the world and every metric is off the charts

As Buffett said, Cook and Jobs just had different challenges and each did as well as they could with the hand they were dealt.

Cook’s hand was to milk the iPhone and the ecosystem around it. If you want to feel old, the first one under Cook’s leadership was the iPhone 4S. Apple sold 60m+ in the first year. It would be moving 200m+ iPhones in a few short years.

In the past 15 years, Cook has ~2 billion iPhones with over $1T in revenue. Then, he built a massive moat around the product by adding complementary hardware products (Apple also shipped 400m+ AirPods and 100m+ Watches…outselling the entire Swiss watch indusry) and services (now a $100B+ a year business aka a toll Apple charges everyone to reach those high ARPU Apple consumers).

For sure, these moats have certainly attracted antitrust attention, including multiple lawsuits in America and Europe. Apple’s intransigence around its 30% App Store fee has pissed off a lot of people in the development community. Notably, many of the biggest tech consumer tech firms declined to make Vision Pro native apps when the headset launched…in a quasi-protest (which probably didn’t help initial sales).

Let’s focus in on the products and features.

Here was my first take when the news dropped:

The most common reactions were that I forgot the Apple Cloth (2021) and the internally-rebuilt Apple Maps that might actually be better than Google Maps (2020).

I got yelled by a lot of people for hating on the Apple Pencil.

Also, don’t forget all the security features (Touch ID, Secure Enclave, Face ID, Find My iPhone, end-to-end encryption, stolen device protection and App Tracking Transparency…which was a massive show across Meta’s bow).

Or the health features in the Watch (blood oxygen monitoring, fall detection, heart stuff).

Asking Cook to introduce a new product that outdoes LITERALLY THE GREATEST CONSUMER PRODUCT IN HISTORY…is a bit unreasonable.

WhErE iS tHe InNoVaTiOn?!?!?!

Worth noting that supply chain innovation is still innovation and Cook kept the trains running on time even as the business exploded in size. At Compaq, he had formed a relationship with Foxconn’s founder Terry Gou. Their partnership boomed when Cook arrived at Apple and was the manufacturing equivalent of Jobs and Ive for product.

Sure, none of these products were a “0 to 1” invention like the iPhone. But that’s a lot of stuff and the Apple ecosystem just works. iCloud sync has gotten really good. The blue bubble still gives me dopamine.

Take something like Apple Pay.

I use it at least 5x a day and I’m clearly not the only one.

Marc Rubenstein writes that, “Apple Pay is used by 785 million people worldwide. It is accepted at over 90% of US retailers where it has a market share of 14.2% in online payments and 5.6% in in-store purchases. Cook said on his latest earnings call that last year alone, it eliminated $1 billion in fraud.”

In the aforementioned Charlie Rose interview, Cook’s origin story for Apple Pay ticks both the innovation and consumer-friendly boxes:

“[Apple is about] making the user’s life better. Making the experience better.

We saw all the mobile payment stuff that had been done and none of it was making anybody’s life better. It was more about creating a business model for someone else to make money.

We started with the user and said, “What do they really want?”

Well, nobody wants to carry a wallet. You don’t want another thing that you have to remember to put in your pants when you walk out the door. You don’t want another thing to lose. You don’t really want this card with exposed numbers on it that has a huge security risk. So, we fixed the security issue. Our system is much more secure than the traditional credit card system is. We kept the thing that people liked, which is they do love their card.

And we said, ‘We don’t want any of this data. So we’re not doing what other companies are doing. We don’t want to know what you’re buying. We don’t want to know where you’re buying it. We don’t want to collect all this stuff.” […]

So, we firewall all the stuff. We don’t keep it. It’s not on our servers. And so we kept what’s great and fixed what wasn’t.”

Now, this isn’t all charity.

Apple makes money from the device so it gets to play the hand-wavey “we don’t want your data” play (the similar play it does around social media apps…and that’s why it has a bloodfeud with Zuck and Meta).

Back in 2024, Visa was involved in an antitrust trial. Apple is such a beast company that the iPhone maker caught a straty. Visa — making the case that it faces competition — said Apple Pay was an “existential threat” and the credit card firm has been paying Apple “hundreds of millions of dollars” a year so the iPhone maker doesn’t deploy a competing functionality (although, Apple’s bank card

The iPhone and its moat just delivers.

I drank the Kool-Aid on a LOT of Apple stuff…you did too…don’t pretend like you don’t have a Watch and some AirPods…also, don’t pretend like you don’t enjoy this gem 2FA feature, which has collectively saved humanity >100 billion hours searching through our SMS:

Apple revenue breakdown really shows the story of Cook scaling the iPhone and building complementary hardware and services to near the same scale. There is a limit to how many iPhones Apple can sell. So, sell each iPhone owner more things and he did.

Ben Thompson puts it much more eloquently in a piece titled “Tim Cook’s Impeccable Timing”:

The challenge for CEOs following iconic founders is that the person who took the company from 0 to 1 usually sticks around for 2, 3, 4, etc.; by the time they step down the only way forward is often down. Jobs, however, by virtue of leaving the world too soon, left Apple only a few years after its most important 0 to 1 product ever, meaning it was Cook who was in charge of growing and expanding Apple’s most revolutionary device yet.

Cook, to be clear, managed this brilliantly. Under his watch the iPhone not only got better every year, but expanded its market to every carrier in basically every country, and expanded the line from one model in two colors to five models in a plethora of colors sold at the scale of hundreds of millions of units a year.

Cook was, without question, an operational genius. Moreover, this was clearly the case even before he scaled the iPhone to unimaginable scale. When Cook joined Apple in 1998 the company’s operations — centered on Apple’s own factories and warehouses — were a massive drag on the company; Cook methodically shut them down and shifted Apple’s manufacturing base to China, creating a just-in-time supply chain that year-after-year coordinated a worldwide network of suppliers to deliver Apple’s ever-expanding product line to customers’ doorsteps and a fleet of beautiful and brand-expanding stores. There was not, under Cook’s leadership, a single significant product issue or recall.

Cook also oversaw the introduction of major new products, most notably AirPods and Apple Watch; the “Wearables, Home, and Accessories” category delivered $35.4 billion in revenue last year, which would rank 128 on the Fortune 500. Still, both products are derivative of the iPhone; Cook’s signature 0 to 1 product, the Apple Vision Pro, is more of a 0.5.

Cook’s more momentous contribution to Apple’s top line was the elevation of Services. The Google search deal actually originated in 2002 with an agreement to make Google the default search service for Safari on the Mac, and was extended to the iPhone in 2007; Google’s motivation was to ensure that Apple never competed for their core business, and Cook was happy to take an ever increasing amount of pure profit.

Yes, Tim Cook received a great hand and other Big Tech firms also did very well in the past 15 years: Microsoft is up 15x, Alphabet is up 21x, Amazon is up 30x and Meta is up 34x (from post-2012 IPO lows).

But there were a million ways to f it up. He mostly didn’t and Apple never dealt with the controversies that hit other Big Tech firms (its business model that lends itself to privacy-first helps).

The counterfactual of what Jobs and Ive would have done isn’t super helpful. Jobs was actually worried that Apple would become paralyzed after him the same way Disney was paralyzed after Walt Disney. So, he told Cook to not worry about “what would Jobs do?”.

Obviously, there were some fumbles.

Spending $50B on Apple Vision Pro looks like a major whiff. Although, a lot of that technology will probably be repurposed for the upcoming smart glasses (Apple is looking to differentiate against Meta by going more luxury and — shocker — tighter iPhone integration).

Former senior Apple exec Tony Fadell — who worked with Steve Jobs to create the iPod — said that Apple’s biggest recent fumble was a potential self-driving car. Cook spent 10s of billions on the project but shuttered it in 2024.

At one point, Elon says that during Model 3 “production hell” in 2018, he reached out to see if Apple would acquire Tesla ($50-60B range). Cook apparently wouldn’t take the meeting. Internally, Jony Ive designed a mini-van type product looked like the Fiat Multipla and just didn’t have the juice.

Fadell says the major mistake was trying to create a 4-wheel vehicle, instead of lightweight 2 or 3-wheeler. Apple had “redefined” categories (eg. desktop publishing with Mac, music with iPod)…so it should have redefined mobility.

When Steve Jobs and I would walk around the Apple campus back in 2008-9, we talked about the Apple Car. What would it be and he was really like ‘we need to do [something as] revolutionary as the Volkswagen (the people’s car).’ What’s the next-generation people’s car? What’s going to be used in the cities? […]

Now you’re seeing the [two-seater] Fiat Topolino. You see the [two-seat quadricycle] Twizy. You see all these different things [in cities]. I live in Europe, right? So, you see all this stuff running around and they’re selling out like crazy.” […]

Don’t make a four-wheel car that competes with everybody else and the Chinese. How would you change mobility in two, in three, and lightweight four-wheel vehicles? How do you do that? [Vehicles that 14-year-old kids] can use.

Jobs actually looked at buying GM during the 2008 financial crisis when the carmaker neared bankruptcy. Another what if. But obviously nothing materialized…and this is why Ive’s partnership with Ferrari is as close as we’ll get to an Apple Car.

In China, Xiaomi started with smartphones and home electronics. Then, its CEO Lei Jun (who is obsessed with Steve Jobs) decided he wanted to make an EV, which are basically smartphones on wheels. Well, he did and Marque Brownlee says the Xiaomi SUV7 is a luxury-calibre EV selling for only $42k.

Why not Apple?

Transportation is a massive TAM and you know Apple fanbois would happily spend 5-figures on a dorky Apple micro-mobile (hell, they spent $700 on Mac Pro wheels).

All things considered, Cook’s run looks incredible in 2026 but there are a few reasons why it may not as great in 2036.

Such a re-assessment of Cook’s career could echo what happened to Jack Welch.

In 2001, Welch retired from General Electric and people treated it like Michael Jordan leaving the Chicago Bulls in 1998. For decades, Welch was seen as America’s greatest CEO, mastering capitalism to briefly make GE the most valuable company in the world. But it turned out Welch was stripping away GE’s resilience and totally financializing the company to the point it blew up during the Great Financial Crisis.

There are two issues that could do the same to Cook’s legacy. One concerns a bet Cook made decades ago (China) and a bet he declined to make in the past few years (AI).

Let’s start with China.

The China Question

Last year, Patrick McGee wrote a book titled “Apple in China: The Capture of the World’s Greatest Company”.

It details how Apple was able to build the world’s most impressive electronics supply chain by investing untold sums into China:

By 2014, Apple was so frequently sending America’s best engineers to China — what one Apple veteran calls “an influx of the smartest of the smart people” — that the company convinced United Airlines to fly 6,857 miles from San Francisco to Chengdu three times a week, pledging to buy enough first-class seats to make it profitable.

Guthrie quickly realised this wasn’t the industry norm. Although suppliers resented the intense pressure and the soul-crushingly low margins offered by Apple, they put up with it because they derived something far more valuable than profits. The deal — let’s call it the Apple Squeeze — was that Apple would exert enormous power over its suppliers multiple hours a day, for weeks and months leading up to a product launch, and in return, the suppliers would absorb cutting-edge techniques. [...]

As one former industrial designer put it: “I don’t remember, ever, a strategic withholding of information. All we cared about was making the most immaculate thing Every day you’d invent your way through a problem. It was absolutely wonderful as an experience. But I guess we were unwittingly tooling [China] up with incredible knowledge — incredible know-how and experience.”

As Apple came under political pressure to “give back” to China, Guthrie advocated that the company change tack. “China wants the constant learning,” he told colleagues. “The fact that Apple helps bring up 1,600 suppliers for China — it’s an incredible benefit.”

When staffers added up Apple’s investments in China — mainly the salaries and training costs of three million workers in the supply chain, as well as sophisticated equipment for hundreds of production lines — they realised the company was contributing $55 billion a year to China by 2015: a nation-building sum.

Honestly, kind of disturbing. Why? When I’m on a United Airlines flight and want an extra bag of pretzels or one of those shitty airline headphones that last for 1/4 a film before breaking, they tell me it’s $7.50. When Apple is flying United Airlines to Asia and doesn’t want to make a connecting flight, they ask for a special route between two unprofitable cities and United Airlines bends over backwards to make it happen. Ugh.

Anyway, McGee calculates that the $55B a year investment Apple made in China was 2x the annual spend that America made in Europe during the post-WWII Marshall Plan reconstruction (on an inflation-adjusted basis).

Here’s a crazy stat: since the iPhone was launched, Apple has trained over 28 million Chinese workers on high-tech manufacturing. That’s more workers than the entire state of California and a key reason why China leads in so many next-gen industries (EVs, solar, drones, robotics).

A key point that McGee makes is that there was no real alternative to China for the type of scale that Apple required. In 2007, Apple sold 1m+ iPhones. By 2012, they were moving 100m+ iPhones. China was the only country that could scale with Apple’s requirements on precision, speed and a flexible workforce.

In an interview with The Free Press , McGee makes an analogy: imagine 500,000 people were dropped into Boston to work on the iPhone, then the next week that group of 500,000 people went to work on another electronic project in Milwaukee. That’s basically the type of labour flexibility that China brought to the table.

Steve Jobs had tried to make automated plants in America but the iPhone requires a ton of human labor.

As Jobs’ supply chain guru, Tim Cook started moving production to China when the iPod took off. The portable music player was initially manufactured in Taiwan but Cook soon realized only China could hit Apple’s ambitious goals. In 1999, China manufactured 0% of Apple goods but it was 90%+ a decade later.

In a 2017 interview with Fortune, Cook explained the Chinese manufacturing edge in an interview:

There’s a confusion about China…the popular conception is that companies come to China because of low labor cost. I’m not sure what part of China they go to. But the truth is China stopped being the low labor cost country many years ago.

That is not the reason to come to China from a supply point of view. The reason is because of the skill and the quantity of skill in one location. And the type of skill.

The products we do require really advanced tooling and the precision that you have to have in tooling and working with the materials that we do are state-of-the-art. The tooling skill is very deep [in China].

In the US, you could have a meeting of tooling engineers and I’m not sure we could fill this room. In China, you could fill multiple football fields [with tooling engineers].

The vocational expertise is very very deep here. I give [China’s] education system credit for continuing to push on that even when [other countries] were deemphasizing vocational.

In McGee’s estimation, it was fully logical for Apple to bet on China…up until 2013. Within a week of President Xi taking power, there was an aggressive anti-Apple campaign. The Chinese government and media went on a “blitz” saying that Apple was taking advantage of the country and taking all the margin from the manufacturers.

In hindsight, Apple’s leadership should have realized how beholden they were to the Chinese government. Instead of building resiliency in its business Cook and Apple double-down on the country with those Marshall Plan scale investments, creating a true geopolitical adversary for America.

McGee expanded on this idea for an NYT opinion piece last week titled “Tim Cook Was Great for Apple Investors. He Was Not as Great for America.”

One counterpoint to this take is from Steven Sinofsky, an investor at a16z who previously ran the Windows division at Microsoft (and briefly lived in China).

Commenting on McGee’s book, Sinofsky said that Apple could not have gone to any other country by the second or third iPhone…and the dependence on China was really baked in by the late-1990s:

…to say Apple — either because of its scale or visibility — is somehow a culprit in whatever is going on, ignores the trillions of dollars that flow to China from the rest of the world every year.

It downplays the foundations of the tech industry that were in China/Taiwan already when Tim shifted Apple to China from the US, not to mention the “low tech” manufacturing that was outsourced to China already. […]

My sense and experience don’t really support so much “evil” on either side. I think both sides were doing what they believed genuinely right and still didn’t have a clear multistep plan. The book mentions the change is cars including the early success of VW, then Tesla, and rise of BYD. Many industries were like that. Many others were not.

Chinese consumer electronics for example have not really achieved global status (though some due to trade barriers) for example TCL TV or Haier home appliances or software in general. This is one of the most important business and geopolitical issues of our time. Reading this book should not make you angry or partisan but should point out just how insanely complex what Apple did was and how wrong all the US experts were about China (I would out myself in there with regards to software).

There is a world in which Apple could have taken those bonkers profits and — instead of spending $700B on buybacks in the past decade — started building out a back-up supply chain.

But the investing community has needs (and those needs in the 2010s were a lot less concerned about geopolitics).

Apple’s buyback plan was planted by Warren Buffett — who probably won more on Apple than anyone else — and the company’s shareholder-friendly approach is one reason its multiple expanded so much under Cook. In the past 15 years, Apple’s market cap went up 10x while its net profit was up 4x.

More on Apple’s buyback plan, per Cook:

“I’d been in the CEO spot maybe a year or so, we had a growing amount of cash, we had crossed the $100B mark, if my memory is correct. When I don’t have experience with something, I make a list of the people that I think that are the smartest people that I can contact to get advice.

Warren was on the top of the list. As you can imagine, I hadn’t met Warren before. I get his number, I call out in Omaha, and I wasn’t sure that he’d take the call. Call out of the blue, he doesn’t know me from Adam. But he took the call, and I had a great conversation with him, and that was the first time that I met Warren.

He was very clear to me, he said ‘let me just cut through it, if you believe that your stock is undervalued, you should buy your stock. I thought that was just the simplest way to look at it.”

It wasn’t a total cold call. Steve Jobs had previously spoken to Buffett about buybacks but never went forward with the plan.

Under Cook, Apple started repurchasing shares in 2012 and billionaire investor Carl Icahn agitated for even more buybacks. Apple did that $700B in buybacks and extinguished the shares (reduced share count by over 40%).

Apple was still spending $20B+ a year on R&D too. They just had so much cash flowing through the business and have never done large M&A deals (their biggest acquisition to date is still Beats at $3B).

That cash had to go somewhere.

The buyback program was massively beneficial for Berkshire as Buffett wrote in his 2020 annual report:

“Berkshire’s investment in Apple vividly illustrates the power of repurchases. Berkshire now owns 5.4% of Apple. That increase [from a previous lower stake] was costless to us, coming about because Apple has continuously repurchased its shares, thereby substantially shrinking the number it now has outstanding. But that’s far from all of the good news. Because we also repurchased Berkshire shares during the 2 1⁄2 years, you now indirectly own a full 10% more of Apple’s assets and future earnings than you did in July 2018.”

Berkshire initially made a $32B investment in 2016 and the position peaked at $160B+ in 2024 before Buffett started trimming it. It recorded a profit of $100B+ on the trade and still owns $60B (still Berkshire’s largest position).

Knowing what we know now, should Apple have started diversifying its supply chain in 2013. Yes.

Let’s be honest, though: is there a single high-level tech executive in the world at that time that had the geopolitical foresight and could have legitimately told Apple shareholders it was taking $10-20B in cash a year to rebuild a supply chain in lieu of the one it had just spent $100B+ building?

Hindsight is 20-20 yada yada.

That is why Apple is now the most exposed company in the world to the US-China trade war other than TSMC.

I don’t want to be a total hypocrite. Me and hundreds of millions of other people happily bought $1000 iPhones that would have cost $5000 otherwise. Without the Chinese manufacturing machine, we could put a 5x-10x multiplier on every other high-end consumer electronic we love. Also cars. Or solar panels. Or heavy machinery. Or robotics. Or 1000s of random manufacturing parts we have no idea about. A lot of industries (and people) benefitted from Apple’s investment into China.

In recent years, Apple has moved more manufacturing outside of China, including to India and Vietnam. In fact, Apple is aiming for 25% of its iPhones to be made in India within a few years. But the reality is that Apple is mostly “assembling” its products in those countries. Most of the manufacturing of key components and related supply chains are very much still in China.

India clearly has the manpower potential but infrastructure is lagging and its government is not nearly as centralized as the CCP (which make it much easier to run a national industrial policy). Further, the risk Apple faces is that if it moves too much manufacturing away from China too fast, the Chinese government could seriously hamper its existing manufacturing business.

And lets not forget about the Chinese retail operations. The iPhone is much less stick in the country because the most important operating system isn’t iOS…it is WeChat and other Chinese apps. But when Apple hits the right fashion/status symbol the numbers are massive. Apple sales hit a record $26B last quarter in China (18% of total sales) driven by the Cosmic Orange version of iPhone 17 Pro Max.

Even if Apple somehow resolves the China question, the more existential one may be what happens with AI.

Sent from Trung’s iPhone

The AI Question

Cook launched Apple Maps in 2012 and it was a total dud.

He apologized and Apple spent the next decade building a legit Google Maps competitor:

• iPhone started with Google Maps

• the Big Tech frenmies broke up after Google withheld voice-guided navigation (competitive advantage for Android)

• in 2012, started using TomTom data but sucked so bad Tim Cook apologized

• now spent billions mapping >4 million miles of proprietary street level maps data with specialized vans and people wearing goofy Apple backpack cameras walking around town

Apple Maps will start running ads— Google probably makes $15B-20B on advertising in Maps — which would dampen the product but still a W.

That means the most embarrassing Cook launch has to be Apple Intelligence. They legit announced vapourware at the developer conference and had to pull an ad showing non-existent products. The ads that survived treated the customers like dumbasses.

The most memorable part of Apple Intelligence was the demented Genmoji campaign:

Last year, Apple’s SVP of Services Eddy Cue took the stand in a Google antitrust case and said that AI is moving so fast that “you may not need an iPhone in 10 years from now as crazy as that sounds…AI is a new technology shift, and it’s creating new opportunities for new entrants.”

Apple has been fumbling AI and it might be existential if there is a new form factor (eg. Jony Ive partnering with OpenAI on hardware).

Against this backdrop, Big Tech has gone HAM on AI-related Capex spending for chips and foundation models. An estimated $700B in 2026 across the Mag 7…except for Apple:

…and that explains this table:

So, what exactly is the Apple AI bet? And how will that look after 2030?

A few months after the launch of ChatGPT, I read this interesting exchange on Hacker News in 2023, which looks pretty prophetic 3 years later:

Apple has a ridiculous, almost unfathomably deep moat for training and running personalized, customised LLMs and other AI models on the ‘edge’ with these Apple Silicon chips in all their devices.

Apple expects the LLM models to commoditize while it owns all the customers through various hardware devices.

While Apple Intelligence was a disaster, the recent craze over people buying Mac Minis and installing personal AI agents is a concrete expression of Apple’s strategy.

Meanwhile, Apple has agreed to pay $1B to Google for its Gemini model to power Apple’s revamped Siri…so, hopefully, that gets fixed.

Let me give you two takes on Apple’s approach.

First, here is a bearish one from Polimath:

Apple had the most compelling pre-AI experience in Siri [acquired in 2010]. They had everything! They had mountains of user data, audio and transcription training data, the biggest and most sophisticated user data network in the world *by far*.

And they blew it. They should be so far ahead of the competition on AI that it makes their competitors fall into despair. Instead, they are a non-player in the biggest tech revolution since mobile, maybe even since the internet.

They could have leveraged their data advantage to create astonishingly powerful models. They make their own silicon, they could have beat Nvidia to the punch on hardware if Cook had any foresight.

Instead they still just make high-end devices and now also they make TV shows and won an Oscar for a movie no one saw. I’m sorry, but that’s underwhelming.

Here is a bullish take via Bubble Boi:

[People] will..be like oh but [Apple is] falling behind in the AI race. The problem with that line of thinking is that people think “AI strategy” means setting $100B on fire to rent H100s and become a low-margin neocloud. They want Apple to just blow all of their money instead of building a real differentiated product. Apple probably looked at the inference market early on and correctly decided not to play a game where the winner gets 20% gross margins and a terrible balance sheet and let everybody else fight it out. Nvidia did the same thing. Neoclouds look more like industrials why the fuck would you destroy your 75% margins for that?

The actual Apple AI strategy is a lot smarter than haters give credit to. They own the silicon, own the OS, and can run inference on the device better than anyone.

M5 ships with neural accelerators in every GPU core, 153 GB/s unified memory bandwidth and if you believe flash has room to run… much more. Your data never leaves the phone, your AI never goes down because AWS had a bad day, and you don’t get billed by the token. No competitor has the silicon plus OS plus distribution to replicate that and I truly believe on device inference for trillion parameter models is coming in next 5 years.

And this is why the John Ternus decision matters.

John Ternus & The Future of Apple

Ternus is 50 years old and will have spent 1/2 his life at Apple when he becomes CEO in September.

He has a Mechanical Engineering degree from Penn and built a head-controlled feeding arm for quadriplegics as a graduation project. His first job was in VR and he joined Apple in 2001, the year Jobs released the iPod, and has played a part in every major Apple hardware product since: iPhone, iPad, AirPods, MacBook Air, Mac and Vision Pro.

All that is cool but, holy smokes, we need to talk about the pun potential with his last name here:

• If he makes another run at a car: “Apple’s U-Tern”

• When the iPhone Fold drops: “The iPhone Terns A Page”

• If L’il Jon performs at Apple’s 51st Anniversary: “Tern Down For What”

Also cool was the commencement speech Ternus gave at Penn’s Engineering school in 2024. He did a version of Steve Job’s famous “paint both sides of the fence even if no one looks because you will know you did it” attention-to-detail story:

Here’s my first [advice]: the care that you put into your work really matters. My first project at Apple was the Cinema Display. It was a large desktop monitor. It had a beautiful clear plastic enclosure that was held together with some screws coming in from the back. These screws were made of stainless steel, and the head of every screw was machined to have a pattern of concentric grooves that shimmered like a CD when light moved across it. I should probably say, if some of you have never seen a CD before, you can ask your parents afterward.

At some point in my first year, I found myself at a supplier facility. I was far away from home, it was well past midnight. I was using a magnifying glass to count the number of grooves on the head of this screw, which, remember, lives on the back of the display. And I was arguing with the supplier because these parts had 35 grooves, they were supposed to have 25.

I distinctly remember stepping back for a minute and thinking to myself, “What the hell am I doing? Is this normal?” And I thought about it, and I realized it might not be normal, but it’s right. It’s right because I’d already spent months working on that product, and if you’re going to spend that much time on something, you should put in your very best effort. Maybe a customer notices, maybe they don’t, but either way, whenever I saw one of those displays on someone’s desk, it mattered to me to know that my teammates and I had considered everything about it and done the very best job we could.

Steve Jobs and Jony Ive were product guys.

Tim Cook wasn’t a product guy — Ive left in 2019 and was apparently “dispirited” the Cook didn’t take more interest in products — but he scaled the shit out of them.

Ternus gets to take Cook’s “scale the shit out products” machine and make new products because Ternus is very much a product guy.

Just like Jobs didn’t pick a Jobs. Cook isn’t picking a Cook. Although, they both seem to be on the low-key and even-keeled side of the temperament spectrum.

When Ternus rumors hit the newswire last year, long-time Apple observer John Gruber wrote this:

I absolutely love the idea of Cook’s successor being a product person like Ternus, and Ternus is young enough — 50, the same age Cook was in 2011 when he took the reins from Steve Jobs — to hold the job for a long stretch. Ternus took over iPhone hardware engineering in 2020, and was promoted to senior vice president of hardware engineering in January 2021, when Dan Riccio stepped aside. Apple’s hardware, across all product lines and including silicon, has been exemplary under Ternus’s leadership. And Ternus clearly loves and understands the Mac.

The most relevant part of Ternus’ career as related to AI is that he led the effort to port Apple’s products from Intel to Apple Silicon, as noted by another long-time Apple analyst Ming-Chi Kuo:

1. John Ternus’ most important move in recent years was leading the Mac transition from x86 (Intel) to ARM (Apple’s own Apple Silicon). Pulling off a full-stack shift across hardware, software, and the developer ecosystem in one go, and turning that into a commercial success, required a very high level of execution and tight cross-functional coordination. Without this, there wouldn’t be the success of today’s MacBook Neo and the advantage Apple now holds as it gears up for AI devices.
   

2. The iPhone has been the core driver of Apple’s hardware business for nearly two decades, yet the new CEO does not come out of the iPhone side of the business. That suggests the board is applying a broader set of criteria, not just picking the leader with the most visible wins.
   

3. Moving the Mac to Apple Silicon was a system-and-platform-level transition, essentially a brain transplant. Within Apple, no one has more experience managing a shift at this scale than John Ternus. That is exactly what Apple needs as it moves into the next phase of on-device AI.

Apple made two other notable announcements last week along with the Ternus news.

First, the driving force behind Apple Silicon — Johny Srouji, who joined Apple in 2008 from IBM — is now Apple’s Chief Hardware Officer.

Second, Tim Cook will become Apple’s executive chair and remain very involved in Apple, especially when it comes to “engaging with policymakers around the world”.

And “engaging with policymakers around the world” really means “dealing with President Trump and President Xi”.

Cook had to become a politician. Apple has 2.5B users, makes $410B in annual sales and its supply chain span the globe employing tens of millions of people.

He’s on par with leaders from large countries in terms of responsibilities.

“Tim may not be able to design a product like Steve but Tim understands the world to a degree that very, very few CEOs I’ve met over the past 60 years could match,” Warren Buffett told Bloomberg in 2021.

In this role, he’s had to apologize to Chinese consumers after intense pressure from the CCP around a flimsy warranty issue in 2013. Domestically, that means becoming a political heat shield for Apple and all that entails:

• smiling when you get called Tim Apple (a top 10 tech moment in past decade)

• bringing a 24-karat gift to the Oval Office

• having the President fete your career by saying you kissed his ass

Apple recently waved its mandatory 75-year old age limit for the exec chair. Cook could be around for a while making sure Ternus has a smooth transition, especially by dealing with the heatiest heat that will heat in upcoming years.

Cook will do it because he LOVES Apple.

During his 2014 conversation with Charlie Rose, Cook reflected on the moment that Jobs asked him to become CEO. He had filled that role on an interim basis in 2009 but Jobs’ health took a quick turn for the worse in early August 2011:

[Jobs] told me, “I’ve been thinking a lot. Apple’s never had a professional transition at CEO and I’m determined that we will have one now. I want you to be the CEO.”

On that day, I thought he would be chairman for a long time and that I’d be CEO for a long time and that we would continue to work together.

He chose me because I wasn’t like him. I’m not a carbon copy of him. He obviously thought deeply about who he wanted to lead Apple.

So, I have always felt the responsibility of that and I’ve wanted desperately to continue his legacy at Apple. I deeply love [Apple] and I wanted to pour every ounce that I had of myself into the company.

Then, Cook talked about how he thought about building the Apple leadership team:

If you’re a CEO, the most important thing is to pick people around you that aren’t like you and that complement you.

Because you want to build a puzzle. You don’t want to stack Chiclets up and have everyone be the same…so, the people that surrounded me are not like me. They have skills that I don’t have. I may have some that they don’t have. […]

As a team collectively, we are able to do some incredible things and it’s because we collaborate and I see one of the key things in my life is to make sure that we collaborate at an incredible level.

It’s because we run the company functionally. We’re not like the typical big company that has a number of divisions. Everybody is a functional expert and, then, we work collectively to get things done. We work together as a team because the work really happens horizontally. Not vertically. Products are horizontal and it takes hardware plus software plus services to make a killer product.

For years, many thought Cook would elevate his long-time COO Jeff Williams, who has a tight relationship with their major manufacturing partners at Foxconn and TSMC (Cook was Jobs’ COO). Williams retired late last year. Others floated software head Craig Federighi but he gets some of the AI blame (also, would he even want to deal with hardware complexity?).

So, Ternus it is.

Profiles in the days after his CEO announcement noted that Ternus was:

• “a super nice guy”

• “a great collaborator”

• “a levelheaded voice” who “inspires fierce loyalty”

Apple’s whisperer at Bloomberg (Mark Gurman) says, “Apple picked Ternus because of his age and belief that he could reinvent Apple’s product lineup and compete against AI-savvy competitors. Longtime colleagues describe Ternus as someone willing to make clear calls, in contrast to Cook’s more deliberative, consensus-based approach.”

Gurman notes that the Ternus pick was very much Cook’s to make (with the assistance of one of Apple’s longest service execs Eddy Cue — SVP of Services — who has been with Apple since 1989 and worked very closely with Steve Jobs).

The reporting out of Apple — which may be strategic leaks — has given Ternus credit for the MacBook Neo success while dropping nuggets that he was against the Vision Pro. In the next few years, we’ll get to judge him on the iPhone Fold, a Homepod and a suite of more AI-powered wearables (eg. smartglasses as well as camera-enabled AirPods, Watches and a new pendant product).

Ternus has the tools and was given a decent hand to win in AI.

Can he?

The most interesting take I saw on the news was from Horace Dediu, who mocked up a press release from the year 2040 that “looks back” on Ternus’ 15-year run as Apple CEO:

• John grew Apple devices to 4.5 billion from 2.5 billion when he took over in 2026. Many have pointed out that he has been building on Tim Cook’s success and that John has only added 2 billion devices in 15 years, averaging 110 million per year. The reality is that most of those have been switchers from Android rather than first-time users. Because of this, Android’s 5 billion active devices means Android users still outnumber Apple users. Apple’s users do have attach rates of over 2.5 devices per user including passive AI wearables but the competition is not standing still. The new CEO will face the challenge of trying to wrest majority market share in a saturated 12 billion active device market.

• With over 2 billion customers, Apple is capturing over 40% of all AI revenues. Critics point out that the company has not grown beyond its core: high net worth and high income households. Much of that foundation was laid by his predecessor and arguably all that John has done is maintain a base that grew organically as global income has risen. Over a billion middle/high income individuals have joined the world economy as Apple users but that is hardly attributable to Ternus. His engineering acumen did not give him the insight into marketing to low income countries where most of the users are shunning Apple products.

If some version of this future plays out, Cook made the right choice and those accomplishments sure would be impressive updates on John Apple Ternus’ LinkedIn profile.

Them Apple CEO Memes

Finally, my personal favourite Tim Cook post ever. It’s from 2022 and a reminder for me about “context collapse”, the concept that a user will post something on social intended for their audience (in my case: tech/business folk) but the post will travel into other communities and lead to original poster getting absolutely cooked because it’s out of context (the pièce de résistance were various publications picking it up with the headline: “Writer roasted for saying Tim Cook proves you can’t get rich as an employee”).

Links & Memes

Some links for your weekend consumption:

• Fencing at LA 2028 Olympics will be lit…because the audience will be able to watch AI-powered visualizations of the sword movements.

• Meta is taking training to the next level…first, is is offering a free program to train fiber technicians to help build data centres. Then, it went full dystopian and will now track mouse movements for all Meta employees to train the AI models (there is no opt out). Beginning to think Meta is behind that “Data Centre” game on Steam where you buy racks, set up servers and install cables.

• The cast of Friends…but totally juiced up and looks-maxxing isn’t the worst idea ever.

• Two insane Polymarket prediction market trades…someone rigged a bet and made $30k+ on the temperature in Paris by applying a hair dryer to the thermostat that resolved the bet and the memes have been incredible. Elsewhere, a person involved in the US military’s Venezuela was arrested for using confidential information to make $400k+ betting that Maduro would be removed from office (and the President’s response to the news was…watch it).

• SpaceX has a $60B option to buy AI coding startup Cursor…and Kevin Kwok has a good breakdown on why the deal makes a lot of sense.

• Sony AI built a ping pong playing robot (ACE)…and it became “the first robot to attain expert-level performance in a competitive physical sport” and beat top-tier human players, per Reuters.

• Someone built an Anti-Grammarly…the app makes mistakes in your email to make it look more human and less AI slop. Reminds me of the saying, the opposite of a good idea is also a good idea.

• Why Rome never industrialized…good 11-minute video explainer!

…and them wild posts:

Today, we will talk about Live Nation: a federal jury determined the $36B live events giant operates an illegal monopoly and may force the company to spin off Ticketmaster.

Also this week:

• Bieber Takes Over Coachella

• Should Jensen sell Nvidia chips to China?

• …and them wild posts (including Allbirds)

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A few weeks ago, we talked about Disney and how the company’s reliance on its theme parks & cruises division is warping the entire business. The division has grown from 18% to 57% of Disney’s operating profits over the past decade (while still only 1/3rd of total revenue).

Disney has to milk park attendees with egregious prices, because it needs the cash to navigate the transition from cable TV to streaming (hence, the 100x marked-up Mickey Mouse ears and the $250 lightsaber that I was very very close to buying).

Now, let’s talk about Live Nation and its subsidiary Ticketmaster. This week, a US federal jury found that Live Nation illegally maintained monopoly power in the market for large amphitheatres while Ticketmaster did the same for ticketing at major concert venues.

To understand how these monopolies work, let’s start with this visualization of Live Nation’s revenue and operating profit via Sherwood News.

For more context, Live Nation is the world’s largest promoter and producer of live events (booking, marketing, logistics etc). It owns or has a stake in ~400 major concert venues across the world.

Since acquiring Ticketmaster in 2010, Live Nation’s stock is up 17x to a market cap of $36B (naturally, I missed out on every single part of this run-up).

In 2025, the company put on 55,000 events. It manages 400 artists including Madonna, Lady Gaga, Miley Cyrus, Post Malone and Weezy F Baby (owning 65% of the concert promotion market) and sold 646 million tickets (Ticketmaster controls 86% of the ticketing market for major venues and sold 10x more tickets than the 2nd place AEG).

Of those ticket sales, 53% (or 346 million) included fees.

Live Nation’s revenue hit a record $25.2B last year (compared to $7.3B in 2015) and its three main income streams are concerts, ticketing and sponsorship & ads.

Across these divisions, the difference between revenue and profit is even more extreme than Disney.

In 2025, the concert division did 83% of Live Nation’s revenue ($20.9B) but — with a tiny margin of 3% — it only contributed 26% ($687m) to the company's $2.6B in adjusted operating profit.

Live Nation’s other two divisions operate with much higher margins:

• Ticketing (37% margin): 12% of sales ($3B of $25.2B) and 42% of adjusted operating profits ($1.1B or $2.6B).

• Sponsorship & ads (64% margin): 5% of sales ($1.3B of $25.2B) and 32% of adjusted operating profits ($845m of $2.6B);

If Disney is squeezing parks & cruises to the detriment of park attendees — granted, without any antitrust heat — which Live Nation division do you think is squeezing customers?

Is concerts? Is it ticketing? Or sponsorships & ads?

We all know.

But if you’re still on the fence, here is one of the most on-point tweets in the history of Twitter:

Ok, it is a bit more complicated than “Might as well fee”.

But Ticketmaster’s fee situation is definitely the most salient and consumer-facing part of the key antitrust charges…and ticketing has been key pillar for past decade:

Here is more from Music Business Worldwide:

Across three core claims [against Live Nation], the jury found that:

• Ticketmaster willfully acquired or maintained monopoly power in the market for primary ticketing services to major concert venues through exclusionary conduct.

• Ticketmaster did the same in the market for primary concert ticketing services to major concert venues.

• Live Nation willfully acquired or maintained monopoly power in the market for large amphitheaters through exclusionary conduct.

In each case, the jury also found that the anticompetitive conduct caused harm, and that Live Nation controlled, dictated or encouraged Ticketmaster’s behavior.

The jury additionally found that Live Nation unlawfully tied artist promotion services to the use of its large amphitheaters (meaning artists were required to use Live Nation’s promotion services in order to play its amphitheaters).

On damages, the jury found that consumers were overcharged by $1.72 per ticket for primary concert tickets at major concert venues across 22 states and the District of Columbia [this $1.72 overcharge applied to ~20% of all Live Nation tickets sold].

According to the states’ case, Live Nation is using its monopoly position to basically Tony Soprano everyone in the ecosystem:

• To the artists: “Oh, nice tour you have there, would be a shame if we didn’t promote it because you used a 3rd-party venue.”

• To 3rd-party venues: “Oh, nice stadium you have there, would be a shame if it stays empty because we won’t let our artists play there unless you use our ticketing platform.”

• To fans: “Oh, nice college fund you have there for your kid, enjoy this Another Dollar Won’t Hurt Fee because what other ticketing platform will you use to book your favourite artist who we happen to rep?”

To be sure, these concerns have existed for decades.

As Matt Stoller highlights, Ticketmaster’s webpage basically brags about absorbing a competing platform in 1991 right on the timeline page of its website: “Ticketmaster acquires its major competitor Ticketron”.

They were rolling up other ticketing platforms to gain market power.

In 1994, Pearl Jam went to war against Ticketmaster. Stone Gossard and Jeff Ament — along with the managers for Aerosmith and REM — testified in congress against the ticketing giant. The artists said that Ticketmaster was using its influence over venues, promotion and tickets to charge fans “exorbitant fees”.

Pearl Jam ended up cancelling its tour that year due to this beef.

While Ticketmaster was cleared of being a monopolist in various class-action lawsuits, its reputation hasn’t exactly…well, please see the above tweet.

When Live Nation acquired Ticketmaster in 2010, the Department of Justice (DOJ) forced the newly formed company to pinky swear sign a 10-year consent decree agreeing not to force concert venues to use Ticketmaster. In 2019, that consent decree was given more meat because venues were complaining that Live Nation was retaliating against them for using other ticketing platforms.

Then, came the “website crash heard around the world”. On November 15, 2022, a super-duper-superstar artist who rhymes with Baylor Sift launched the Eras tour. A record 2.4 million people bought tickets on Ticketmaster that day but millions of other fans were left in the lurch and the website went down.

A bunch of Swifties then got rugged on secondary markets by scalpers and the outcry led to lawsuits and another congressional hearing. Within two years, the DOJ and dozens of states had filed antitrust lawsuits against Live Nation.

Live Nation settled its lawsuit with the DOJ just last month. However, the states case kept going and that is how we got this week’s legal outcome.

That earlier settlement provides a roadmap for how a judge may seek antitrust remedies against Live Nation.

But, first, I want to play some devil’s advocate.

I’m personally biased against all ticketing platforms (Ticketmaster, StubHub, SeatGeek) for two reasons. First, we’re obviously getting donged on the fees. Second, anytime I have to buy a ticket on the secondary market, it is a reminder that I don’t have the hustle to actually snag a ticket right when it goes on sale (I’m learning this lesson the VERY VERY hard way with FIFA 2026 tickets right now).

So, I had to force myself to understand Live Nation and Ticketmaster’s rationale for their tie-up (a "steelman" if you will):

• Organizing and promoting live concert events is very expensive and has paper-thin margins. Dude, I can barely organize a coffee meeting. I can’t imagine the lift that goes into throwing a concert for The Weeknd. A fully-integrated business — with control of ticketing that ties promotion and ticket inventory — creates a better fan experience and is the most viable way to make the whole model work for everyone long term.

• A scaled player can invest more in infrastructure, fraud prevention, resale controls and digital ticketing (I will admit that the Ticketmaster App is pretty slick and it feels like magic when a concert ticket shows up in Apple Wallet).

• Live Nation doesn’t actually set most of the ticket price. Artists dictate the face value and venues tack on most of the Fee-Fees (80% of Live Nation events are in 3rd-party venues).

The last point probably has the most credence.

Yes, ticket prices have definitely gone up. According to Bloomberg, the average face value price for a top-100 artist has risen from $53 in 1996 to $142 today (all adjusted for inflation).

There are a few key factors to consider about this price increase.

In the 1990s, concerts were marketing for the physical albums. CD sales — aka the bundling of 2 or 3 great songs with a bunch of filler no one wants — was an incredible business model for artists. Physical albums were the cash cow.

Now, live touring makes up the majority of income (70%+) for the top-tier artists and streaming services are the marketing tool to get people to come to the shows. Artists are very incentivized to pump them ticket prices and the demand for live events has been wild post-COVID.

Those pesky secondary markets also (shocker) inflate ticket prices….especially from fees. For primary tickets, fees are ~27% of the face value. On secondary markets, one study found fees hitting 56% of a ticket’s face value.

The clear appetite of buyers on the secondary market has led to platforms implementing dynamic pricing, which further boosts primary ticket prices (but at least this money is going to artists and promoters, opposed to scalpers).

This is a long way of saying that Live Nation isn’t the only one milking fans. The company is a pain sponge for the rest of the industry (similar to how Roger Goodell gets paid $70m a year to eat shit for the NFL owners).

But but but but, let’s be honest. They is milking us with them fees. Of course they are. Look at the business model. Just like Disney with Disneyland. Live Nation has to turn the fee dial if it wants to profit-maxxxx.

There were some pretty damning evidence from the state’s antitrust trial, per NYT:

Live Nation employees joked about trying to “gouge” people for parking and V.I.P. upgrades at concerts, calling fans “so stupid” for paying the inflated charges and boasting that they were “robbing them blind baby.”

To quote one of the greatest fictional characters in the history of the TV medium: “Is you taking notes on a criminal f-cking conspiracy?"

The company’s explainer via Bloomberg:

Live Nation’s ticketing director Ben Baker testified that Ticketmaster’s fees depend on the face value of the ticket. As of September 2023, the company’s standard rate card called for charging $3.25 on tickets with a face value of as much as $5.99. From there, the fees increase based on face value with the highest price range — above $116 — garnering a 20% fee that caps at $70.

Will Live Nation be broken up?

The stock was up +3% in the day after the verdict. Markets don’t seem to think the judge will force Live Nation to divest Ticketmaster. It would be gnarly. Recall, the concert division made $687m on a $20.9B revenue for a paltry margin of 3%.

WHAT IS THIS? AN OPERATING MARGIN FOR ANTS?

The current vibe feels similar to Google losing antitrust cases in the past two years, with courts deeming that it illegally operates search and ad network monopolies. However, Google avoided a break-up (which would have included a spin-off of Chrome). The search giant was forced to make changes to distribution deals and data sharing but most considered it a “slap on the wrist”. The judge said he didn’t want to disrupt a rapidly changing market (aka AI and the rise of OpenAI/Anthropic is threatening Google).

Breaking up Live Nation wouldn’t be nearly as disruptive, though. And the company has clearly abused its position…so who knows?

Live Nations has already signalled that it will appeal the decision.

Either way, the settlement with the DOJ last month is probably the template: it paid a $280m fine, will divest from 13 venues, offered ticketing platform interoperability and agreed to a 15% cap on service fees at Live Nation-owned venues.

If there isn’t a break up, we’ll probably see more divestitures and get a lower cap on service fees (and an application of that cap across every venue on the Ticketmaster platform, not just Live Nation-owned ones).

The ticketing division would remain Live Nation’s profit engine...but with fewer Cuz We Can Fees.

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Bieber Takes Over Coachella

Speaking of live music events, the Super Bowl for Molly Coachella music festival hosts is wrapping up its second weekend. The event is actually put on by Live Nation’s main competitor AEG.

The buzz from last weekend was headliner Justin Bieber doing a stripped down set on Saturday. People thought it was lazy and unbecoming of his $10m payday across two performances. Particularly, after Sabrina Carpenter put on a Broadway-caliber set on Friday.

Disclaimer: My wife calls me Top 40 Phan and I am a huge Bie-lieber. Been a fan for nearly two decades. Gun to my head, his best tracks are “Despacito (Remix)”, “Beauty and the Beat”, “What Do You Mean”, “Never Say Never”, “Somebody To Love (ft. Usher)”, and “Baby".

“Mistletoe” is also my favourites Christmas song ever (like I said, I’m an OG supporter…and Top 40 Phan).

I wanted to stay up for the YouTube livestream but, hahahhaha, c’mon man. It started at 11:35pm. My kid has sports on Sunday morning.

Anyway, I woke up Sunday and Bieber had taken over the entire timeline. People were absolutely cooking him for spending a portion of the performance sitting at a table with a laptop while scrolling through memes and a bunch of his old YouTube music videos.

I added my $0.02 that no one asked for.

After bathing in some dopamine from this post, I watched the set and was very very wrong.

The YouTube stuff was perfect: So much of Bieber’s career is tied to the platform. In 2008, Scooter Braun famously discovered Bieber in a YouTube video singing to Chris Brown’s “With You”. In 2014, “Baby” became the second YouTube video — after “Gangnam Style” — to cross 1B views. At Coachella, he watched both songs and duets with the videos among others.

Oh, and YouTube is Coachella’s official global livestream partner. Shocker, Bieber rehearsed the entire moment, which many people thought was super authentic and organic.

In reality, Bieber was a massive get for Coachella.

The largest music festivals (Coachella, Glastonbury, Lollapalooza) and the broader industry have been in a weird spot. It’s estimated that 90 such festivals were called off in 2024 and another 50 in 2025. A lot of these event organizers probably overestimated the post-COVID comeback of “live events”.

For the world’s biggest artists (Taylor Swift, Rihanna, Beyonce, Coldplay), Coachella doesn’t actually make a ton of sense anymore. These acts can pull $10m+ per night on their own tours.

Trapital’s Dan Runcie wrote about the Coachella business in 2023 and explained how the festival pays artists:

Headlining the show is great for many superstar artists, but at the highest heights there’s a tradeoff. In recent years, the headliners get $4 million per weekend (but I heard from a source that Bad Bunny got $5 million). The artist on the second row got $750,000 per weekend. That’s a great payday, even for an artist selling out arenas. But for an artist like Taylor Swift, who can likely gross $10 million per night on her own stadium tour, then she may be leaving money on the table. This is where the Coachella documentary deals play a factor. Beyonce was rumored to be paid $20 million for the Homecoming documentary on her 2018 show, which made the experience worthwhile for her (and the Beyhive).

For other artists, Coachella is a brand-building signal to keep getting looks. Cardi B performed in 2018 and was paid just $70,000 per weekend. She spent more on her production, but she saw it as an investment. Cardi now gets paid $1 million for private shows regularly. She used a Coachella performance the same way a speaker uses a TEDx Talk. Sure, they weren’t paid. But that high-quality video lives on YouTube forever and will be the proof point to land more lucrative speaking and career opportunities.

Bieber has had a rocky few years but the comeback vibe has been strong in 2026.

He did a viral Grammys performance in February and now Coachella. If this catapults him back into top-top-tier, then it worked out for everyone.

I might stay up to watch Bieber’s second Saturday live because he could do the most glorious thing ever: just sit on the stool and play last Saturday’s entire 90-minute performance on YouTube. Do it Beibs! I belieb in you.

Links & Memes

Should Jensen sell Nvidia chips to China? Jensen Huang went on the Dwarkesh podcast and it got spicy. Dwarkesh asked very good questions and kept pressing on key topics.

At about the 1-hour mark of the podcast, Dwarkesh asks Jensen whether Nvidia should sell chips to China. The US government has had export controls in the past few years and Nvidia went from 90%+ market share of AI compute in China to less than 50%. Meanwhile, Chinese networking giant Huawei has made serious headway.

The exchange led to what many on X called the most Rorschach Test in recent memory. Split between those that agreed with Jensen and those that agreed with Dwarkesh.

Dwarkesh made the argument for why America — especially after the recent release of Anthropic’s Claude Mythos model with significant cybersecurity capabilities — should not allow China to have access to Nvidia’s best chips. He was coming from the camp that AGI/ASI may happen next few years and it’s crucial America does everything to win that race.

Jensen is a lot less “AGI-pilled” and frames the situation in much more business and market share terms. You could tell that Jensen was speaking to a number of constituents (shareholders, the public, US government, Chinese government) with his answers. Many felt he never addressed Dwarkesh’s key assertion that giving China access to top-tier chips would be a national security threat.

The point that Jensen has made for years is that if China doesn’t get access to Nvidia’s chips, an entire domestic ecosystem will develop and that ecosystem will ship to the rest of the world. As in, the majority of people will use the “Chinese Tech Stack” instead of the “American Tech Stack”. That is both a commerce and geopolitical concern.

Jensen’s argument made ALOT of sense before the export ban started. Let’s get China hooked on Nvidia chips and the American Tech Stack. But since the export ban started in October 2022, the CCP has 100% committed to creating a fully indigenous semiconductor industry whether or not the country ever imports any more Nvidia chips.

From here, my thinking was: “If China is going to to speedrun a semiconductor industry no matter what, a geopolitical rival shouldn’t help it…so, yeah, America should ban all Nvidia chip exports”.

Also, since the manufacturing of chips is a bottleneck…that meant any chips shipped to China was less for America and Western allies.

After listening to the podcast twice and reading all the commentary — it went mega viral (including a wild moment when Jensen kinda lost it and dropped this line, “I didn’t wake up a loser”) — I have changed my mind.

Nvidia should definitely NOT send the best chips to China. However, there is a point on the spectrum between “send 0% of chips” and “send 100% of chips” that Jensen is trying to hit. Obviously, it’s self-interested. He cares about Nvidia’s global market share. If Huawei builds a complete parallel AI system, that will be bad for Nvidia in the long run.

In response to the podcast, investor Gavin Baker made the best case for allowing some chips to flow to China.

Basically, inference (asking the AI model to do stuff) has overtaken training (building the AI model) for chip usage. Since inference dominates now, the key consideration is how to deliver tokens efficiently and the best way to do that is building a unified system across what Jensen calls a “5-Layer Cake” (energy, chips, infrastructure, models, applications).

AI chips are more fungible for the first step of training the AI model but less so on inference.

Yes, China will keep building its own semiconductor industry. But since Nvidia’s full offering — even on older chips and racks — is better than China’s domestic options, there is still some sweet spot to keep Chinese AI’s industry temporarily hooked on Nvidia and building for the “American Stack”.

It won’t be as easy for China to just plug their AI models trained on Nvidia chips into next-gen Chinese chips when they eventually come online.

Per Baker:

“TLDR: as labs shift their focus from training to inference, the costs of portability and the upside of co-design to maximize tokens per watt per dollar both rise. Portability is likely to begin decreasing as a result. […]

The networking primitives for this Huawei system are very different than those for Nvidia’s systems and a model that runs well on Nvidia will not run well on that system and vice versa. This means that if a Chinese ecosystem gets momentum, Chinese models might stop running well on American hardware. And when Chinese models run best on American hardware, America is in a better position as this gives America a degree of leverage and control over Chinese AI that it risks losing to an all-Chinese alternative ecosystem.

This architectural fork makes porting and distillation less effective and strengthens the pro-American national security case for selling China deprecated GPUs imo.”

Another key point is that China’s AI labs are focused on open-source AI models. If these open-source models become the standard in the Global South (similar to Android as compared to iOS), that means the majority of the world’s population could be running on a Huawei-designed system. A number of governments have already banned Huawei telecom infrastructure due to surveillance concerns...and that could play out again.

I don’t know what % of Nvidia’s older chips should go to China. But it’s more than 0%.

Anyway, this is all above my pay grade, so I’ll leave you with this incredible AI-generated video of Jensen summarizing the interview.

***

Some other links for your weekend consumption:

• A breakdown of the best Artemis II photos…by Hank Green.

• Andy Jassy’s Amazon annual letter…has some very interesting stats. AWS is at a $142B annual run rate. AWS AI revenue is at a $15B run rate after 3 years (this is 260x larger than AWS run rate of $58m after 3 years). Amazon’s chip busines is “on fire”, at a $20B run rate (it would be a $50B business if Amazon sold Graviton, Trainium, Nitro sold chips directly instead of monetizing through the cloud). Then, here are two macro stats that make the Amazon long-term bull case: 1) 80% of retail is still in physical stores; and 2) 85% of IT spend is still on-prem.

• Maybe the most actionable LinkedIn post I’ver ever seen…and it explains how to talk to conspiracy theorists.

…and them wild posts:

Finally, here is your weekly “have we reached peak AI bubble yet” piece of news.

Allbirds — the sustainable wool shoe brand that paired perfectly with every Patagonia vest in Silicon Valley over the past decade — is trying to pull off one of the most absurd business pivots in history.

During peak liquidity / stupidity of 2021, Allbirds went public and hit a peak valuation of $4B. It fell 99% before declaring bankruptcy. Then the pivot: on Wednesday, the company said it was rebranding as NewBird AI and is expected to raise $50m to “acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service”.

We are all dumber for having read that press release.

Bloomberg’s Matt Levine points out that the pivot isn’t from shoes-to-AI. It is shoes-to-meme stock. Whoever is making the $50m investment — which still needs to be approved by shareholders — is getting some juicy upside:

The other level is that Allbirds is pivoting its stock to being an AI meme stock. That definitely worked out! The stock closed yesterday at $2.49 per share, for a market capitalization of about $22 million. Allbirds previously agreed to sell its sneaker business for $39 million and pay out the net proceeds to shareholders as a dividend; the $22 million market capitalization represented, roughly, the expected value of the dividend. At noon today, the stock was at $18.82, up 655% from yesterday’s close, for a market cap of about $164 million. That represents, uh, I guess it represents the expected value of the future AI-native cloud solutions business? Let’s go with that. […]

The proxy does not disclose who the “institutional investor” is but, you know: great trade! The investor is essentially buying $50 million worth of stock at the old, defunct-sneaker-company price, and selling it at the new, AI-neocloud-company price.

Maybe! Presumably the investor can’t sell the stock yet: The convertible financing hasn’t closed, the company needs shareholder approval to allow conversions into stock, and probably selling twice the market cap of the company into the market would take time. (Though more than 200 million shares had traded by noon today, up from about 63,000 yesterday.) The investor has a lot of downside protection, but fundamentally it is betting that the new, AI-neocloud-company price will hold up for a while.

As of this writing, Allbirds is worth $94m. None of this is investment advice.

Today, we will talk about how Shohei Ohtani’s $125m bag from sponsorhips.

Also this week:

• Anthropic’s Cybersecurity Bomb

• Andy Weir’s Writing Journey

• IBM’s AI is Powering The Masters App

• …and them wild posts (including Artemis II)

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Shohei Ohtani $125m Sponsorship Bag

Your boy was in Tokyo for a week in March.

Just wanted to share two thoughts on the trip.

First, if you are ever in Toke-A-Dokes, try to visit the Hakone Open-Air Museum. It’s a 1.5-2 hours from Tokyo via car or train. One of the best museums I’ve ever been to. Incredible sculptures that are...err...outdoors. And a massive Picasso Pavilion. Pablo’s daughter Maya stewarded a bunch of his artwork including ceramic sculptures. In the 1980s, Japan was getting uber rich and wanted some of that old Europe swag so they struck a deal with Maya. Super interesting visit.

Second, Shohei Ohtani’s mug is literally everywhere. If you played “drink an Asahi every time you see Ohtani’s face”, you would be blackout within 2 blocks of walking in Tokyo.

My sister tried to take photos of every ad featuring the LA Dodgers super-duper-duper-star bu gave up. It was too many.

Stepping off an airplane. Bam. Billboards. Bam. Bus stops. Bam. Convenience store windows. Bam.

So, here is a round-up ads from r/Dodgers and r/baseball:

He’s sponsored by over 20 brands in Japan including:

• Seiko (watch)

• Ito En (green tea)

• Kirin (probiotics)

• Kose (skin cream)

• Japan Airlines (take a guess)

• Mitsubishi Financial Group (bank)

My absolute favourite is Family Mart because I’m obsessed with the Onigiri rice balls (I’ve been known to call “them triangle rice b*tches”) and these are very popular at the convenience store.

The amount of technological innovation that Japanese foodmakers put into the Onigiri packing is tremendous. You peel this. Pull that. Next thing you know, the seaweed is perfectly wrapped around the triangle-shaped protein-filled rice.

Legend has it that on the day of the Family Mart photo shoot, Ohtani skipped lunch so that he could smash all 19 of the different flavours on offer. I don’t even care if that’s an urban legend. Arguably more impressive than his 3-homer, 10-strikeout performance in Game 4 of the 2025 NLCS.

At this point, it probably shouldn’t be surprising when I tell you that Ohtani makes more in sponsorship than any other MLB player. His estimated $125m endorsement haul for 2026 (including memorabilia stuff) is like 10x more than the next top MLB stars such as Juan Soto and Aaron Judge.

Per Sportico, Ohtani is reaching truly rarified air:

Before Ohtani, endorsement earnings for MLB players peaked around $10 million for Derek Jeter and Ichiro Suzuki. Last year, Ohtani made $100 million from endorsements, a threshold previously reached by only three athletes in Tiger Woods, Roger Federer and Stephen Curry, who each did it one time. Woods’ 2009 endorsement earnings of $105 million was the prior record.

On an inflation-adjusted scale, Ohtani is still looking up at Woods’ $160 million, and Michael Jordan remains the endorsement king if you count retired athletes. MJ earned an estimated $300 million in 2024, thanks to royalties on Nike’s Brand Jordan business, which posted $7 billion in revenue during its latest fiscal year.

Woods and Federer do platinum brands like Rolex and Nike. Federer also did Mercedes, Moet & Chandon and Credit Suisse before getting a huge equity slug in On Running. Woods has also done NetJets, Tag Heuer and Tiger Woods Dubai Luxury Golf.

Ohtani seems like he’ll do anything.

But, apparently, this is a thing in Japan according to one Redditor in r/AskJapanese:

Japanese celebrities aren’t as conscious of “protecting their brand” like American/western celebrities. That’s why you will very often see super big-name celebrities doing super silly commercials on TV. It’s all about just getting your name and face out there as much as possible.

And he’s far from the first person to reach this point of ubiquity. Back in the 90s, KimuTaku was everywhere for a while. Imada Mio seems to be approaching that status as well.

An good American comp is Shaq: at one time or another, he has done Ring, Amex, Pepsi, Taco Bell, Nestle, Reebok, JCPenny, Radio Shack, Gold Bond, General Insurance, Toys ‘R Us etc.

Shaq gets side credit for cutting a pre-IPO check to Google (always be sourcing deals) and once having an insane franchisee portfolio (owned 100+ stores across Papa John’s, Big Chicken, Five Guys, Krispy Kreme, Auntie Anne’s).

Not super lux but still printed cash.

Ohtani has done some lux with Porsche and Hugo Boss, though.

Ok fine. I’m probably having a case of confirmation bias but, yeah, I don’t see MJ, Woods or Federer doing an equivalent of Onigiris.

Ohtani’s endorsements are the key that unlock the seemingly bizarre LA Dodgers contract he signed in 2023. The sticker price was $700m over 10 years, making it the largest ever at the time. But he deferred 97% of the money. His annual salary is only $2m or $20m over the life of the contract. The remaining $680m will be paid between 2033 to 2043.

Either way, all of the financial analyst dorks pulled out their spreadsheets and realized that the actual net present value of the contract was <$500m.

The Dodgers probably would have paid him any way he wanted. The back-to-back World Series winners have had the #1 or #2 largest payroll in the MLB in the past few years. With Ohtani (and then another $300m+ for star pitcher Yoshinobu Yamamoto) they bet that they’d also capture a large part of Japan as fans...and they were right.

But the endorsement guesstimates were too low. I remember seeing top analysts guess Ohtani would make $50-60m a year to supplement his $2m salary.

Dude might be doing that on rice-related sponsors alone soon. Unreal.

Anthropic’s Cybersecurity Bomb

Anthropic has been on a heater in 2026.

It just announced that its annual revenue run rate hit $30B in March, surpassing OpenAI’s latest reported run rate of ~$24B. To be sure, these are self-reported numbers and there are legit quibbles over the accounting. Anthropic includes all the revenue from cloud platforms that resell its product (it deducts the partner’s share in the sales and marketing line). OpenAI only includes its own share in the top line, thus undercounting.

Either way, Anthropic’s revenue ramp is — in technical terms — stupid rn:

• 2021: Founded

• 2022: $10 million

• 2023: $100 million

• 2024: $1 Billion

• 2025: $9 Billion run-rate

• January 2026: $13 Billion run-rate

• February 2026: $19 Billion run-rate

• March 2026: $30 Billion run-rate

Against this backdrop, the ~$400B AI lab announced that it had a new model called Claude Mythos. Rumors that the follow-up to Claude Opus costed $10B to train. This makes sense since it just demolished AI capability benchmarks.

That’s just the tip of the iceberg, baby.

Mythos is a beast in the cybersecurity realm (allegedly). In the past few weeks, it identified 1000s of zero-day capabilities in every operating system and browser including:

• OpenBSD: A 27-year old bug in an “an operating system known primarily for its security.”

• Linux kernel: It found and chained together up to “four vulnerabilities in order to construct a functional exploit” of the operating system that powers 90% of the world’s data centres.

In a wildly shared anecdote, Mythos was able to breakout of a sandbox environment, connect to the internet and notified an Anthropic researcher of its David Blaine magic trick while the person was eating a sandwich in the park (this is officially the 2nd greatest sandwich-in-the-park story since Sad Keanu).

Claude Mythos is more expensive to run per token than Claude Opus and Anthropic is actually facing a compute bottleneck (you may have noticed your Claude Code vibe coding apps that no one will ever use taking a bit longer to finish).

If you’re thinking, “wow, forget the token costs, Anthropic shouldn’t let anyone in the public touch this model”...then you have great instincts.

Anthropic has not released it publicly. Rather, it launched something called Project Glasswing and allowed select partners to stress test a preview version of the model to patch things up before ARMAGEDDON!! Partners include Broadcom, Cisco, CrowdStrike, Google, JPMorganChase, the Linux Foundation, Microsoft, NVIDIA, and Palo Alto Networks.

While Mythos is, the startup’s CEO Dario has a history of hyping up the dangers of AI. Part of it is the lab’s commitment to AI safety. But part of it also has to be marketing. Like, based on everything I just said, how badly do you want to take Mythos for a spin? The name is also great. If they called it Claude Jimbo or Claude Jerry, it’d be getting a lot less hype.

They keep finding themselves in the news cycle around capabilities (recall, the Department of War has slapped Anthropic with a supply-chain-risk designation).

Here are some good things to read about it:

• Dean Ball explains that the Mythos capabilities will be coming to open-source alternatives in the next 6-12 months (think Chinese models). The way Anthropic is launching the model gives time for companies and governments to harden up. But these powers will be in the wild soon. He expects that the leading-edge models of the future won’t be made public.
  

• Marc Andreesen showed how AI model access is changing with this musing on X: “The pricing tiers for AGI are something like (1) $20/month, (2) $200/day = ~$75,000/year, (3) $1,000/day = ~$350,000/year, and (4) ~$10 billion. For now.”
  

• Dan Jeffries makes the case for why Anthropic will eventually released a guard-railed version of this model because it has to recoup investment. And, longer term, distributing AI powers will be the best defense against AI cybersecurity attacks.
  

• George Hotz doesn’t think targeting “zero-days” are actually that impressive:

  • “What if I release one zero day a day until a big new model is released? Will this finally make OpenAI and Anthropic shut up about “cybersecurity risk”?
    
    Like these things are not that hard to find in most software. I heard something about it costing $20k in tokens I’d do it for less if it wasn’t for some whiny bug bounty program.
    
    The reason there aren’t zero days everywhere is cause nobody seriously looks. Because hacking other people’s shit with them is illegal and criminals are usually not very skilled, or they would choose a different line of work.
    
    Want more zero days to be found? Make hacking legal. Until then, don’t try to claim it’s hard, it’s just not incentivized.”
    

• Martin Casado points out that Mythos may be the first model created on Nvidia’s Blackwell chips...which means, things are only going to accelerate from here: “Mythos appears to be the first class of models trained at scale on Blackwells. Then will be Vera Rubins. Pre-training isn’t saturated. RL works. And there is *so much* computing coming online soon.”

OpenAI’s upcoming Spud model will also be trained on Blackwells and is supposed to come out very soon. It may have some wild specs.

Anyway, I told you all of this because the memes were very entertaining.

Andy Weir’s Writing Journey

Ryan Gosling (and his chiseled jaw) has notched the biggest film hit so far in 2026 with the space film Project Hail Mary. Its $430m haul is also top for Amazon’s film studio.

I haven’t seen it yet (!!!). My son chose to see Pixar’s Hoppers instead.

Either way, another hit space film for novelist Andy Weir, who also wrote The Martian back in the early 2010s.

Back in 2017, Weir did a very entertaining talk about his journey from software engineer to bestselling sci-fi author.

You can totally see the dry humor and energy infused in the Mark Watney character played by Matt Damon.

Here is the play-by-play:

• started writing full time in 1999 after getting fired from AOL (which had just merged with Netscape)

• he was a programmer and had a ton of stock options…because he was fired, had 6 months to exercise them and sold at AOL’s peak before bubble popped

• spent 3 years on book ideas that got “no traction” (and no agent wanted to sign him) went back to work as software engineer and wrote online as a hobby (webcomics, short stories, serials)

• The Martian was one of three serials he was working on 2009 (other one was about alien invading earth, another about a mermaid in 19th century New England)

• sent stories to a mailing list of 3,000 readers he had built up over a decade took 3 years to write The Martian, “posting a chapter at a time [every] 2 months” or so

• “spent more time researching than writing, because researching was more fun than writing” (very relatable)

• readers corrected him along the way (“I wanted to make sure dorks like me would enjoy it, so made it as scientifically accurate as possible”)

• when he was done, a bunch of them asked if he could make a Kindle version because reading it on his website sucked

• Weir didn’t want to charge because was making solid living as programmer…but Kindle has minimum of $0.99

• all his fans started buying the Kindle book and leaving positive reviews

• this “sales spike” pushed book up charts and hit bestseller lists and just snowballed after that on Amazon

• within a short span, major book publisher reached out and screenwriter Drew Goodard adapted it for film (but then left the project to direct a Spider-Man film (which eventually got canned because of the Sony hack)

• then Matt Damon expressed interest on the project…then Ridley Scott threw his hat in the ring Weir negotiated these deals while “debugging code” on his day job

He described the process as “one of those things where everything just snuck up, bit by bit” before boooooooooom!!

While Weir consulted with Scott during the film, he wasn’t super-invovled in the production of The Martian. He is, however, a producer on Project Hail Mary.

The Martian came out in 2015 and made $630m on $105m budget (that’s about ~$900m inflation-adjusted, which means Project Hail Mary probably won’t pass it).

Anyway, Weir just another classic tale of ten-year “overnight success”. Tell a “growth hacker” that you got 3,000 subscribers in 10 years and they’ll laugh in your face. He kept grinding and did it for the love of the game.

IBM’s AI is Powering The Masters App

The Masters App is considered best sports app (Netflix execs say it is the best streaming app…after Netflix).

A funny subplot: it’s powered by IBM and is basically IBM’s only AI-related win in past 5 years.

IBM runs a bunch of ads about the tech (inluding with Scott Van Pelt):

• 20,000+ shots at every Master’s from 70-100 players

• WatsonX (lol) tracks each one and identifies 30+ data points data points include sound (applause), visuals (player fist pump), shot trajectory (dozens on lasers on field measure each shot), history (player previous performance in similar situation) and weather tracking

• ingests all this data against a model trained on 120,000+ previous Masters shots to autogenerate highlight reels within minutes

• same training data also powers the app’s “round-score prediction” for each player and provides real-time hole-by-hole insights for fans

IBM is a top-tier Masters sponsor and likely shelling out (probably) $15m-$25m a year for the honor (someone on X DM’d me this figure as they had experience negotiating with Masters in the past).

Guessing it’s worth it just to be able to shill WatsonX as Masters App backend.

Have a feeling this actually converts well in Fortune 500 C-Suites.

Feels like it won’t be long until we have an Ohtani and IBM link up.

Also, I’m probably being a bit unfair to IBM. While WatsonX is objectively a goofy name, IBM (+79%) has actually outperformed Microsoft (+45%) and Amazon (+40%) over the past 5 years.

According to The Economist, the $218B tech company made three smart AI-related moves in recent years:

• develop niche small custom AI models

• trim down its consulting services division to focus on AI engagements

• focus on helping companies manage hybrid and multiclouds (Red Hat acquisition)

You could make the argument that the IBM AI in the Masters App is doing more for society than any of the Microsoft Copilot products (incredibly, consultant Tey Bannerman found that there were at least 75 Copilot products and dropped this incredible bar, “there are now Copilots inside Copilots, Copilots for other Copilots, and a physical Copilot key on your keyboard for summoning them.”)

Links and Memes

Some other links for your weekend consumption:

Kit Kat’s marketing team is milking that 12-ton heist…in Toronto, an SUV security convoy helped to deliver some Kit Kat bars.

***

Warren Buffett is one of only ~300 members at Augusta National. Other members including Peyton & Eli Manning, Condoleezza Rice and Roger Goodell.

In a 2018 interview with Dan Patrick, Buffett says doesn’t go to many Masters and says he’s the “highest handicap member” at the course (he claims his best round is 89…I’m guessing he means front 9). Oh, Bill Gates is another member and Buffett lost $5,500 when Gates hit a hole-in-one.

***

Czech automaker Škoda created first bicycle bell to penetrate noice-cancelling headphones. They found a frequency (750 to 780 Hz) that anti-noise algos can’t suppress.

The bell is mechanical and uses an irregular hammer mechanism. This might be the most European tech story ever and feels inevitable that an audio firm will create an anti-anti-noise-cancelling-bell headphones.

***

“I Stumbled Across My Boyfriend’s ChatGPT and It Ended Our Relationship”. Lindsey Hall writes this insanely viral tale…and, ngl, why would you do that?

***

Incredible things are happening with AI in Chinese offices. Steve Hou writes “Apparently workers in China have been creating “colleagues.skill” to distill their coworkers hoping to make them redundant hence saving themselves. In response someone has recently invented an “anti-distillation.skill” that has gone viral on GitHub.”

***

McDonald’s CEO talks about Big Arch clip for first time. Spoke with WSJ and says his kid notified him (“dad, you’ve gone viral but not in a good way”) then gives PR masterclass on his small bite (“I blame my mom, she told me never talk with my mouth full”).

But most interesting part is a stat: “60% of a person’s taste perception is formed before they take a bite”. Things consumer consider before eating. Where is the product sourced from? What is the aroma in restaurant? What does interior look like? How is food visually presented?

...and them wild posts (including the incredible Artemis II crew…if you’re wondering whether or not they did photography training to take all these incredible pics…they did).

Today, we will talk all things Disneyland: history, design psychology and how Disney’s business model is ruining the experience.

Also this week:

• Michael Jordan’s Wild NASCAR Ride

• Apple at 50

• …and them wild posts (including Kit Kat)

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In the summer of 2023, I knocked off a key parenting milestone: my wife and I took our son to Disneyland in Anaheim, California.

The last time I went was in the late-1990s with my parents.

So it was definitely a full circle moment that made me appreciate my parents a ton more. They did it with four kids. Completely outnumbered. A 1:2 ratio. My wife and I were reversed. A 2:1 ratio.

It was still a zoo, though.

We waited in long lines. We got scorched by the sun (I didn’t do us any favours by being hungover). We bought overpriced bottles of water and random swag (hello, $30 Misting Spray Fan). And I legit chuckled every time a Disney employee rang up a bill, as I did the gross margin calculation in my head (comically high).

I want to revisit the trip because Disney recently named a CEO.

Josh D’Amaro officially succeeded Bob Iger for the top job on March 18th.

This was the second time Iger has passed the baton. The first time was to Bob Chapek in February 2020. Iger handed the business off to Chapek literally as COVID was kicking off. That’s Texas Hold ‘Em equivalent of getting dealt 2-7 off-suit. It was a fraught relationship and Iger came back in November 2022.

A through line between Chapek and D’Amaro is that both led Disney’s theme park division, which has become the undisputed cash cow for the company.

The trip I took to Disneyland coincided with a flippen-ing of Disney’s entire business model between four key pillars: Parks & Experiences (including Cruise Ships), Studio Entertainment (Film), Media Networks (ABC, ESPN, Disney Channels, FX etc.) and Direct-To-Consumer (aka Streaming aka Disney+, Hulu and ESPN+).

Over the past decade, Disney’s Parks & Experiences division has gone from 18% to 57% of Disney’s operating profit. In 2025, that was nearly double the combined operating profit for cable TV, streaming and film at 32% (the remainder was Consumer Products aka merch aka you’re probably drinking from a Marvel or Star Wars coffee mug rn) .

Parks & Cruises is putting up these numbers while being only a ~1/3 of Disney’s $94B revenue. The division is floating Disney’s entire transition from dying cable TV assets to streaming….which has been a bumpy ride.

Since the Iger-to-Chapek handover, Disney’s market cap has declined by ~50% to $170B.

Can D’Amaro turn it around? He needs to milk theme parks and cruises. But the milking is already getting out of control and turning off park attendees. How much more can he milk? It’s a dilemma.

A Disneyland dilemma if you will.

To see how we got here, let’s discuss:

• Disneyland’s origin story

• Imagineering and psychology of park design

• The gnarly cable TV-to-streaming transition

• How much can Disney milk theme parks?

The beginning of Disneyland

The year is 1954.

Walt Disney is 52-years old, a pioneer of film and animation with some of the most classic Hollywood works under his belt: Steamboat Willie (1928), Snow White and the Seven Dwarves (1937), Pinocchio (1940), Fantasia (1940), Dumbo (1941), Bambi (1942), Alice in Wonderland (1951) and Peter Pan (1953).

With so much success, Walt had tired of the Hollywood studio life while his older brother Roy — who co-founded The Walt Disney Company in 1923 — ran daily operations.

Walt was a world-builder and wanted to use his capital, reputation and creative energy to create the next big thing: a theme park.

Why? There were a few reasons as detailed in Neal Gabler’s 2006 book Walt Disney: The Triumph of the American Imagination.

First, Walt had been unimpressed by the many amusement parks he visited with his daughters over the years. The amusement park concept had taken off in America at the turn of the 20th century in Coney Island, New York. In the following decades, the attractions remained the same: thrill rides and games. Disney was turned off by the dirtiness of a typical amusement park and hated how operators tricked guests (or “marks” as they called them) into rigged park games.

Second, Walt was a pioneer in adapting storytelling techniques to new mediums (animation, film, and TV), and the physical world seemed like the next logical step. His park would not only be for entertainment; it would be for immersing visitors into entire worlds.

Third, he wanted to build something that was alive. A film or TV episode is done when it’s done. A park can always be improved and updated. Walt — who worked on Disneyland until he died in 1966 — said of his theme park project, “Disneyland…will continue to grow as long as there is imagination left in the world”.

To make his dream a reality, Walt tapped professionals from the Stanford Research Institute and sent his team around the world to find the best ideas.

Per Gabler:

[Even if] there was no antecedent, in its planning the park had been the beneficiary of a host of forces and influences — the Edenic European gardens, like Tivoli, that Walt had visited; the expositions and fairs, like the Century of Progress in Chicago in 1933, the New York World’s Fair in 1939, and even the Chicago Railroad Fair; historical re-creations, like Knott’s Berry Farm, Greenfield Village, and Colonial Williamsburg, all of which Walt had seen and enjoyed; and, what may have been the most important influence of all, California architecture itself.

Walt was born in Chicago and grew up on a rural farm in Missouri. In his early-20s, he moved to California, and the influence of the state on Disneyland is understandable when one considers the region's geographic diversity.

In 1927, Paramount Studios created a famous map of California that showed how different parts of the state could be used as stand-ins for filming sites from all over the world.

Below is a photo of a map and an image from cartographer Peter Atwood, who overlaid on-the-ground photos of each location (e.g., Southern California is "Spain", the Nevada border is "Wyoming Cattle Ranches", the coast near LA is "Venice").

Having one type of setting next to a completely different type of setting is not unlike what Disneyland would become with neighbouring worlds all occupying one plot of land.

Walt's plan for Disneyland was truly ambitious, and most amusement park veterans scoffed at the idea. However, Walt was undeterred and ultimately chose people from within his Disney empire to complete the project. This approach worked because Walt's team understood the power of Disney intellectual property (IP) and storytelling.

The skepticism from “experts” also meant that traditional lenders wouldn’t touch the project.

“I could never convince the financiers that Disneyland was feasible,” Disney remarked. “Because dreams offer too little collateral.” (in 2026, Walt could have called it an “AI-powered theme park” and easily raised $1B pre-seed).

So, how did Walt get the money for Disneyland?

Among film moguls, Walt was the first to recognize the potential of the small screen and he struck a genius partnership with ABC in the early 1950s to fund his park.

The TV network desperately needed content to compete with CBS and NBC. Walt agreed to a 3-year deal to make shows for ABC if the network would:

• Pay for the production of the shows 

• Buy $2m worth of a 10-year bond

• Guarantee a $4.5m bank loan 

Walt diverted ~$5m ($61m in 2026) of the funds to build Disneyland. The budget eventually ballooned to ~$17m ($207m), which Walt financed with his own funds, park sponsorships and additional help from ABC (Walt’s shows — including one he hosted called “Disneyland” — were smash hits).

On July 14th, 1954, Walt broke ground on a plot of land in Orange County for his future theme park. The area was chosen for its affordability (outside of Los Angeles), its mix of weather (low rainfall and low humidity), and its infrastructure (which was good for transportation).

Disney gave his team a one-year deadline to build a park with five themed worlds. The first version of Disneyland combined American nostalgia and heritage (Fantasyland, Main Street USA, Frontierland) with excitement and visions of the future (Adventureland, Tomorrowland).

There was something for kids and parents alike.

Having set up a new company — separate from the studio — to create Disneyland, Walt had total control over all decisions. He regularly walked and inspected every inch of the park.

Disneyland officially opened to the public on July 17, 1955, a year after Disney’s self-imposed deadline. The first day was mayhem. Nearly 30,000 guests descended on the park. There was a massive traffic jam. Long lines everywhere. A lack of water. Unfinished attractions.

The early snafus proved to be a minor speed bump. The one-millionth guest visited Disneyland just two months after its opening. Disney had built his world in the physical world and guests loved it, as explained by Gabler.

The reason the visitors felt so good…was that Walt Disney had painstakingly conceived of his park as ordered and harmonious. Disneyland had no ambiguity, no contradictions, and no dissonance. The layout and the way guests were subtly directed to destinations, the cleanliness, the efficiency with which crowds were queued up to wait for attractions, the weather, even the sounds of the park—all contributed to a sense of absolute well-being.

The business world was slower to catch on.

After visiting Walt, a young Warren Buffett was able to buy 5% of Disney for $4m back in 1966. He flipped it for a 50% gain the next year. At that original $80m valuation, Buffett would later say of the deal “at Disneyland, the $17m Pirates of the Caribbean ride would soon open…imagine my excitement, a company selling at only 5x rides” (we need to bring back this valuation metric).

Buffett called Disney a “unique asset” and that’s all from the brain of Walt.

One of the most striking examples of Walt's complete control was the creation of a berm — a raised hill barrier — around the entire park. No one from the outside could see in, and no one from the inside could see out. When you are in Disneyland, you are truly in another world.

Fast forward to 2026, Disneyland has since added three more lands to the original five: Critter Country, Mickey's Toontown, and Star Wars: Galaxy's Edge (then, in 2001, they opened the neighbouring Disney California Adventure Park with Marvel, Pixar and a bunch of California-themed areas).

The ideal guest experience remains the same even after all the additions. Upon entering the park, each person is still greeted by Walt's original vision inscribed on a plaque: "Here You Leave Today and Enter the World of Yesterday, Tomorrow, and Fantasy."

Imagineering and the psychology of park design

The greatest portmanteau ever is "turducken" (a combination of turkey, duck, and chicken, which I would really like to have for Thanksgiving one day).

The second greatest portmanteau ever is "Imagineering" (a combination of "imagination" and "engineering"). In 1952, Walt Disney borrowed the term — which had been coined by OG industrial firm Alcoa in the 1940s — to create Walt Disney Imagineering, the group responsible for bringing Disneyland to life.

There are now over 2,000 Imagineers creating the rides and experiences for the 140m+ people who visit Disney’s 12 theme parks every year (in Anaheim, Florida, Paris, Tokyo, Shanghai and Hong Kong).

That’s ~60% of all global theme park visits and almost 3x ahead of second-place finisher Universal Studios (we haven’t even talked about Disney’s 8 cruise ships that — based on how many Instagram ads my wife gets — I will soon be experiencing).

In his 2016 book titled The Imagineering Pyramid, Louis Prosperi breaks down the Imagineering process and skillsets required for the job. There are obviously the creative disciplines (illustration, art direction, writing, music and sound design, interior design, lighting design, and architecture). But equally important are the engineering experts (structural, mechanical, electrical, and industrial).

Below are 3 key concepts from the Imagineering process and how they influence guest psychology:

“Art of the Show”

Remember: Disney does theme parks, not amusement parks. Think of a stage play or a film scene. In either case, every prop and actor has a purpose. Similarly, Disney parks are designed as a show.

Prosperi writes about the Imagineering philosophy called “art of the show”, which calls for “design elements [to contribute] to the story or [help] to create a natural visual segue from one themed land to another.”

Here are some examples:

• Engage all the senses: Film has sound and sight. But not taste, smell or touch. Disney parks engage the latter two senses in very strategic ways.

  • Smell: To utilize the power of smell — which is the sense most-connected to memory formation — a Disney Imagineer literally invented a machine called the Smellitzer to emit lab-created scents which pair with the surrounding attractions. Main Street smells like vanilla. The Pirates of the Caribbean ride smells like salty sea air. Pooh’s Adventure smells like honey. Haunted Mansion smells like burnt wood. The drink carts smell like me overpaying for a $10 bottle of water.

  • Touch: There are various ways to transition between scenes in a film (jump cut, blank screen etc.). At a Disney park, you can literally feel the ground change (eg. gravel to smooth cement) as you walk between different worlds.

• Never show how the sausage is made: According to legend, Walt was once walking through Disneyland and saw a cowboy from Frontierland in the Tomorrowland area. He was pissed. Every world has to be consistent or the guest would lose the sense of magic. As a result, Disney World in Florida was built with 392,000 square feet of underground tunnels (utilidor system). This area was for employees — referred to as “cast members” (keeping with the idea of a “show”) — to change, eat, rest and take out garbage without disrupting the themed experiences.

• Worlds kept separate: Each world at a Disney theme park is designed to prevent a guest from seeing or hearing another part of the park (similar to how the berm surrounding Disneyland prevents outsiders from looking in and vice versa). A great example: when the Tower of Terror was built in Florida, Imagineers made sure it wouldn't stand out when viewed from Epcot (the view shows the tower blending in with the Morocco pavilion).

Visual Communication

A film technique that Walt really leaned on was set building. To quickly communicate a story or achieve a desired action, every building structure in Disneyland is built to a specific proportion (eg. 5/8ths of the real size):

• Forced Perspective: Imagineers use this technique to make buildings appear larger and taller than they actually are. From a distance, Cinderella's Castle looks larger than life because the bricks at the top are smaller than those at the bottom.

• Wayfinding: Disney utilizes large structures (Epcot, Magic Mountain, Cinderella's Castle) to draw guests' attention and builds roads along these lines of vision to move people around the park. Known as "weenies," these structures have to be both large enough to be seen and interesting enough to attract.

“Plussing”

According to Prosperi, Walt always asked his team “how could we plus it?” Every part of the park could be made better and the process of “plussing” is used to constantly improve the experience.

• The grass really is greener: Disney World's sidewalks have a reddish hue, which helps make the color of the grass "pop". This is because red and green are complementary colors (i.e. opposite ends of the color wheel), and the contrast makes both the sidewalk and grass appear brighter.

• Accentuated sounds: The horses wear special horseshoes with a polyurethane coating, which makes a louder "clopping" sound when they walk down Main Street.

• Before and after: While a Disneyland trip might only be a weekend, the experience lasts way longer. Disney hypes of anticipation of the trip by sending guests reminders on the lead-up to their arrival. And there are professional photographers all over the park to snap photos for long-lasting memories (PhotoPass lets you view the photos for free online … or, pro-tip, you can just screenshot them if you don’t want to pay for high-res).

• Small details: Look at the Cinderella statue in the left frame below. It looks normal from an adult's perspective (top). But from a child's lower perspective (bottom), Cinderella is wearing a crown.

That’s the tip of the iceberg.

There is incredible thought put into the park and now the rest of the company is weighing down on the magic.

The gnarly cable TV-to-streaming transition

Let’s revisit the four main legs of the Disney empire:

• Parks & Experiences (includes Cruises)

• Media Networks (Cable)

• Studio Entertainment (Film)

• Direct-To-Consumer (Streaming)

Parks is on the rise while consumer Products — mostly buying Disney IP merch (think Spider-Man or Lilo & Stitch pajamas) at a Disney Store or Uniqlo — has been pretty steady Eddie for the company over the years.

It is cable, film and streaming that are causing major friction.

First, Disney’s linear TV business is getting clapped by cord cutters:

On the positive side, the studio and movie theatre business is a big fish in a small pond.

Global box office hit $9B in 2025, which was up only slightly from the prior year (and still below pre-COVID highs).

However, Disney (and 20th Century Fox, which it owns) took 28% of the 2025 box office on the strength of Zootopia 2, Avatar 3 and live-action Lilo & Stitch.

Disney looks to repeat the performance in 2026 by sucking on the teat of IP from Marvel (Avengers: Doomsday), Pixar (Toy Story 5) and Star Wars (The Mandalorian and Grogu).

Then there is the direct-to-consumer streaming business with Disney+, Hulu and ESPN+.

We’ll focus on Disney+, which launched right before COVID and went gangbusters.

Y’all remember this wild chart:

The timely product launch was doable because of BAMTech, the MLB’s streaming arm. Disney had invested in (and ultimately acquired for a total of ~$4B) the pioneering platform, which lives-streamed the first MLB game in 2001. BAMTech later went on to power HBO Go as well as streaming for the NHL and PGA. Without it, Disney would be in deep doo doo in the streaming age. The ~$100B it spent on Fox, Marvel, Star Wars and Pixar wouldn’t have a direct-to-consumer (DTC) offering during the wild days of early COVID.

However, the Disney+ run from 0 to 100 million subscribers in a blink was a bit of a mirage.

Up until the start of 2025, Disney+ counted 20-30m users from Indian streaming service HotStar. Disney spun it off to the telecom arm of massive Indian conglomerate Reliance and now owns 37% of Jio Hot Star.

Here are the current ballpark streaming numbers (which are annoyingly hard to pin down):

• Netflix: >300m

• Amazon Prime: >200m

• Disney+: 132m

• HBO Max: 128m

• Paramount+: 79m

• Hulu: 64m

• Peacock: 41m (this has to be fake)

• Apple: >40m

• ESPN+: 24m

Let’s put double counting aside and say Disney has 200m+ across its main apps (Disney+, Hulu, ESPN+). The company’s direct-to-consumer (DTC) business is clearly a player and — for families — an absolute staple streaming subscription.

The good news: the DTC unit is now operating at profit. The unit hit an operating income of $1.3B on revenue of $24.6B in 2025. As Iger noted in one of his final earnings calls, that is an improvement from a loss of $4B three years ago.

That’s an operating margin of 5%…which leads us to the bad news: cable was literally one of the greatest business models ever and it is headed to oblivion.

Not before it reminds everyone why it’s such an insane business, though.

Between affiliate fees and advertising, Disney’s linear networks division delivered $2.9B in operating income (more than 2x the streaming business) on only $9.3B of revenue (about ~1/3 of streaming’s revenue) with a juicy operating margin of 30%.

Since the year Disney+ launched, the linear networks segment has seen its operating profit sharply decline (while still maintaining a healthy ~30% operating margin):

• 2020: $9B

• 2021: $8.4B

• 2022: $8.5B

• 2023: $4.1B

• 2024: $3.5B

Disney’s streaming business is basically trying to replace this dying cash cow. The challenge is made harder by the fact that the linchpin of the remaining cable business is sports…and the cost of sports rights are going through the roof.

The NFL is the most important player and has all the most negotiating power and is fragmenting the market across old cable (CBS, NBC, ABC, ESPN) vs. Big Tech (Amazon, Apple, Netflix, YouTube).

To Disney’s benefit, the NFL doesn’t want Big Tech to have too much leverage and it pulled off a nifty move that super-aligned incentives with Disney: the NFL took a 10% stake in ESPN ($3B of $30B valuation) and, in exchange, ESPN acquired key NFL media assets including NFL Network and NFL RedZone.

The streaming business faces headwinds from the fact that people are getting subscription fatigue and the “why dafuq are they hiking streaming prices seemingly every month” fatigue.

Look at this insanity.

Netflix is clearly the streaming winner and best-in-class tech operation. It played the 2010s perfectly by licensing content, creating its own IP and raising debt against an inflated stock price to buy even more content (and pulled the rug on password sharing after letting my entire Fantasy Football league use my brother’s colleague’s cousin’s login password for years).

In 2025, Netflix achieved $13B of operating profit on $45B revenue (29% operating margin).

That’s the North Star for Disney+ and in the ballpark of Disney’s peak cable TV bundle money printer.

A best-case scenario for Disney’s direct-to-consumer segment is a well-priced bundle of Disney+, Hulu and (must-have sports) ESPN reaching 300m-350m subscribers.

It’s not clear if that goal is reachable and also not clear if that goal gets Disney to 10x its current $1.3B operating profit on streaming.

The cable TV-to-streaming media transition has been so gnarly that Disney’s market cap is flat over the past decade…worse consider the money printing that has taken place.

And that’s why we’ve seen Disney go full Parks & Cruise-Maxxing.

How much can Disney milk theme parks?

As linear networks have been pissing away while streaming is still only producing operating profits for ants, Disney’s Parks & Experiences division has been laughing.

Recall, it’s gone from 18% to 57% of Disney’s operating profit over the past decade (and hit a record $10B of the company’s total operating profit of $17.6B in 2025).

An hour in the park and you immediately know how they’ve been able to boost operating margins.

My social media-addicted brain posted this tweet while shopping at the Main Street emporium during my aforementioned Disneyland visit:

In response to the meme, an industry insider sent me a message and said Disney had a concept known as “The Disney Wallet” that informs its pricing decisions:

So, Disney has forever had this concept known as the “Disney wallet”. This is their rough estimate of how much a visitor will spend in park on a given day.

This has 2 huge consequences: they try to sell/upsell you as much as possible before you arrive bc that doesn’t (seem to) affect how much you spend in a given day

2nd: to the point of your tweets, they optimize for margin on what you buy in park, they have always had crazy pricing on sunscreen and digital cameras back in the day. They really want you to buy high margin products

The design of Main Street is particularly devious.

Black asphalt with no shade. People just getting air fried.

Lo and behold, the street is lined with commerce and every store you walk into just blasts the AC.

I avoided the marked-up sunscreen but bought this stupid misting fan for $30. Then some Dasani Waters for another $20.

Thinking about the margin on those items made me sick. Although, the capitalist in me appreciated Disney’s hustle. Captive audience and all that jazz.

Here is one piece of evidence that seems to confirm the idea that how much someone pays before entering the park has no impact on how much they spend while inside the park: entry ticket prices at the higher-end have gone up bigly.

Over the past decade, the price of a one-day ticket to Disneyland is basically flat for the lowest tier $99 in 2015 to $104 in 2025 (these tickets are less flexible and are often blocked from weekends, holidays and other high-traffic days).

However, the price for the highest tier to enter the park is up +126% from $99 to $224 over the past decade:

That’s just to get into the park.

In October 2021, Disney released the Genie+ subscription. For $15-20 a day, park attendees could skip long ride lines and use the expedited Lightning Lanes by scheduling times (the entire program has rebranded to Lightning Lane).

There used to be a free queueing system called FastPass. Now, this “pay-to-play” — including paying $25 per person per ride to skip every line (and up to $449 for unlimited skips all day) — creates a class system at Disneyland.

It’s savage…and of course I paid! Need to limit them wait times, fam.

A lot have come to the same conclusion with estimates that 40-50% of visitors to Disney theme parks pay for some level of Lightning Lane action.

This is basically pure 100% margin for Disney.

You’re probably wondering, “Uh, if 1/2 the park attendees are paying to cut lines, doesn’t that kind of defeat the point?”

Yes.

Jason Cochran writes in Frommer’s about the weird dynamic between standard line, Lightning Lane and the standby line:

Because so many Disney guests are paying for “faster” lines, those purchases actually ensure that the “fast” line is as busy as the old-fashioned free line used to be. The longest line could be the paid one.

If most of those Lightning Lane customers agreed not to give Disney the extra $30-or-so per person every day, then the Standby line would actually be the much swifter choice.

There are occasions when Lightning Lane truly is fast, but in many of the same cases, the Standby line was short enough to have sufficed, too.

Plenty of posts from eyewitnesses back up the claims of colossal mathematical issues with oversubscription to the Lightning Lane program at Disneyland Resort in California as well.

If an attraction has to close down for any length of time during operating hours—something that can happen multiple times a day on the most complex rides—then the customers who had planned to use Lightning Lane during that period invariably come swarming back as soon as the ride has reopened.

But when the Lightning Lane swells, Disney staffers are forced to limit the number of Standby customers at the merge point even more strictly in order to clear the crowds. And that makes the regular wait time inflate even higher.

Disney doesn’t promise customers that Lightning Lane lines are shorter, but the parks do tell guests that buying Lightning Lane access helps “save time in line.” That’s technically true, but it’s also clear that Standby would be faster if there were no Lightning Lane. Standby got slow because of Lightning Lane—the “cure” causes the disease.

Disneyland, the Happiest Place On Earth…to wait in lines after you paid not to wait in lines.

Due to an internal leaked Slack chat, it’s now public that the Lightning Lane program made Disney “$724 million in pretax revenue between October 2021 and June 2024 at Walt Disney World alone” per the Wall Street Journal.

That figure is easily in the billions across all parks and up to Q1 2026.

In the same piece, the WSJ notes that the cost for a family of 4 — including on-site hotel — was $4,266 in 2024, a 32% increase from 5 years earlier pre-COVID (and outpacing inflation)

The median family annual vacation budget is ~$5,000 and this tension was laid bare in a New York Times piece titled “Disney and the Decline of America’s Middle Class”.

On its earnings calls, Disney talks about the balance of staying affordable for the middle class. But, as we’ve discussed, the rupture in the rest of its business make theme parks the easiest money levers to pull.

While prices at rival parks (Universal Studios) and smaller alternatives (Cedar Fair, Six Flags, Sea World) have also gone up, Disney has become the face of relentless theme park price hikes.

Aside from the class system, so much of the Disneyland experience is now being intermediated by smartphones.

My wife and I were constantly checking the app for Lightning Lane notifications and ride openings.

We didn’t get lost in Disneyland. It was just heads down buried on the screen.

Go here. Ride this. Go there. Ride that. Go there. Buy $30 misting fan. Get on the train. Ride this.

One more thing worth flagging is that Parks & Experiences becoming the engine for Disney also creates a perverse incentive on the creative: IP stagnation.

As discussed on The Town podcast, theme parks and cruises are in the brand management business. They don’t create new ideas. They are meant to squeeze every dollar out of existing IP.

And Disney is milking its IP portfolio as hard as it can be milked.

That’s why we have Toy Story 5, Avengers and The Mandalorian & Grogu all set for massive 2026 releases (after Avatar and Zootopia — which has a massive area in Disneyland Shanghai — in 2025).

It’s harder to make money back on a new and fresh film idea if it can’t be monetized by Parks & Experiences.

However, people may eventually get bored of the IP and that impacts theme park attendance.

In fact, Disney recently announced it’s expanding the Star Wars section of Disneyland to focus on the original Luke Skywalker trilogy. It had spent $1B to build the section around the latest Rey-and-Kylo Ren storyline, but the cultural impact of the newer trilogy has clearly dissipated.

Final Thoughts

A year after Disneyland’s opening in 1956, Walt drew up his famous business diagram showing how each part of his empire (TV, merch, books, music, films, Disneyland etc.) all reinforced each other.

In the centre of the diagram was “Creative Talent of Studio Theatrical Films” while “Disneyland” was tucked at the bottom.

Walt obviously didn’t know it at the time but does seem fitting that Disneyland is the base foundation of the image that is now a $170B entertainment giant. Shockingly, Walt makes no mention of streaming, GenAI or prediction markets, which is why I don’t really trust business plans (speaking of up-and-coming business lines, D’Amaro’s first weeks as CEO included OpenAI suddenly shutting down AI video platform social platform before Disney could even invest its $1B commitment…and Disney’s $1.5B investment in Fortnite took a hit as the gaming platform shed 1,000 employees and said its engagement is falling).

The past 5 years have been a case study in the drawbacks of Disneyland becoming the true centre of Disney’s gravity:

• A very visible class system.

• An experience mediated through a screen.

• The constant nagging feeling that you can’t pay for your kid’s college because of the three corn dogs you just bought.

I spent the middle third of this piece writing about Walt’s original vision and the Imagineers because the current pressure of the cable TV-to-streaming transition is really impacting the magic of the immersive Disneyland experience.

Walt Disney hated that early-1900s amusement parks turned attendees into “marks”.

A similar vibe is happening at Disneyland, Disney World and probably the Cruises (I will report back when I inevitably have to go).

Even so, Disney’s parks offer a product people clearly want. As I wrote about in my business breakdown of The Sphere, the IRL experiences will only get more important in the age of GenAI. We all want the 5-sense experience.

When I went to Disneyland, it was hot and there were long lines. The park tried to sell me something every ten steps. And like a sucker, I paid for most of the stuff on offer.

My memory of the experience is still net positive.

Disney, you got me. Just like you got my parents 25 years ago, when they brought our family of six to Disneyland.

Now that I have gone as both a child and parent, I can say that Walt Disney’s plan to make something for the entire family definitely works (we actually went back to Disneyland a year after that trip in 2023 to do all the Star Wars rides and it was sick…especially because I wasn’t hungover).

I think the power of nostalgia will drive Park attendance for at least one more generation. It is not just the nostalgia of Disney IP, either. It is the nostalgia of “we’re going to Disneyland” itself.

But how many under-20s will care in 30 years? How many will even experience Disneyland as price creep keeps creeping? My kid probably will. But his kids? TBD.

Josh D’Amaro — who has committed $60B over the next decade to the Parks & Experiences division — will have to deal with these questions as Disneyland celebrates its 70th anniversary later this year

Will he take the Walt route to “plus it” or keep the current trend of “milking it”?

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Michael Jordan’s Wild NASCAR Ride

MJ was my favourite athlete going up.

Watching him hit the “GAME 6” shot against the Utah Jazz in 1998 was a highlight of that period along with buying $37 of candy at 7-Eleven and playing 8 hours straight of Goldeneye on N64 with my buddies.

He retired from the Chicago Bulls then came back then re-retired from the Washington Wizards in 2003.

Everyone knows that Jordan is a psycho competitor. And every few years there would be new stories that came out about his psycho competitiveness.

A stand-out piece was in by Wright Thompson in ESPN about Jordan turning 50 in 2008…specifically how he was watching Lebron’s rise:

The announcers gush about LeBron, mentioning him in the same sentence with Jordan, who hears every word. Those words have an effect on him. He stares at the TV and points out a flaw in LeBron’s game.

“I study him,” he says.

When LeBron goes right, he usually drives; when he goes left, he usually shoots a jumper. It has to do with his mechanics and how he loads the ball for release. “So if I have to guard him,” Jordan says, “I’m gonna push him left so nine times out of 10, he’s gonna shoot a jump shot. If he goes right, he’s going to the hole and I can’t stop him. So I ain’t letting him go right.”

For the rest of the game, when LeBron gets the ball and starts his move, Jordan will call out some variation of “drive” or “shoot.” It’s not just LeBron. He sees fouls the officials miss, and the replays prove him right. When someone shoots, he knows immediately whether it’s going in. He calls out what guys are going to do before they do it, more plugged into the flow of the game than some of the players on the court. He’s answering texts, buried in his phone, when the play-by-play guy announces a LeBron jump shot. Without looking up, Jordan says, “Left?”

At the time, Jordan was minority of the Charlotte Bobcats (later Hornets).

His tenure as NBA owner was not good.

Not on the court anyway. Charlotte sucked and — sorry to UConn fans — Jordan burnt a large part of his management reputation drafting Adam Morrison.

But off the court he minted.

In 2008, Jordan bought the Bobcats from BET founder Robert Johnson for ~$300m and only put up $25m while financing most of the rest with debt. In 2023, he sold his majority stake at a valuation of $3B to hedge fund manager Gabe Plotkin for a nice-and-clean 10x.

Well, MJ is back to making serious ownership moves…this time in NASCAR.

CBS dropped a great interview last week on Jordan’s ownership of the racing team (23XI Racing) that he co-founded with NASCAR champ Denny Hamlin.

The founding story is awesome.

MJ had been buddies with Hamlin for years. One day, Hamlin saw a fake article saying him and MJ bought a Nascar team.

Sends it to MJ and MJ says: “Not real, but if you want to make it real, let me know.”

They did in 2020 with Jordan putting an estimated $40m into the racing team.

The 63-year old Jordan tells CBS’ Gayle King that he still wants to play pro hoops but can’t so channeling competitive drive in racing: “I’m cursed with this competitive gene. Anything I do…if it’s getting dressed, I have to get dressed before my wife.”

Hahahahahhahahahhhaha. Incredible.

He’s also channeled that competitive gene into an anti-trust lawsuit against NASCAR, which has basically been a family-owned business started by Bill France Sr. in 1948 and now operated by the France Dynasty.

Jordan sued NASCAR for monopoly practices over its “charter system”. NASCAR controlled the charters, which were like tickets allowing race franchises to participate in the league. The France family could revoke the charter and impact racing and earnings opportunities.

In December, NASCAR settled with Jordan by making the “charters” permanent for 15 teams. The France family could no longer revoke them, thus losing a lot of their anticompetitive leverage.

To put a cherry on top, 23XI Racing is dominating the 2026 NASCAR calendar.

Time for Jay-Z to update that verse from that song with Kanye about people enjoying a vacation in Paris: “Psycho, I'm liable to go Michael. Take your pick, Jackson, Tyson, Jordan, Game 6.”

Apple at 50

Steve Jobs and Steve Wozniak founded Apple on April 1st, 1976.

Wild it’s been 50 years.

Two quick thoughts and a video.

• First, Forrest Gump has the greatest angel investment in Hollywood history. In the 1994 film, Gump and Lt. Dan get in touch with Steve Jobs and Steve Wozniak about 6 months before the April 1976 lauch. In the real timeline, the first angel check in Apple came from Mike Markkula in 1977. He put in $250k for ~1/3rd of Apple…so, a $750k valuation.
  
  I’m guessing Gump got at least $100k in there. Either way, he was minted at the $1.8B IPO in 1980. By the mid-1990s, Markkula had sold his entire stake before Jobs comeback.
  
  Gump is a loyal dude so probably sold everything when Jobs was booted in 1985.
  On the other hand, he thought Apple was a fruit company and is financially illiterate…so Gump is likely still holding that stake, which is now worth $300B+ (my calculator broke trying to figure out the ROI).
  

• Second, Apple’s first CEO was…Michael Scott. Can’t make this up. He was also the CEO at Apple’s IPO in 1980 with 5.6% of the company (vs. Jobs at 15%, Markkula at 14% and Wozniak at 7.9%). Scott left a year later and became a renowned gem expert. Markkula took over as CEO followed by John Sculley. Jobs was never CEO until Round 2. Interestingly, Jobs played a clip of The Office during his legendary iPhone launch event in 2007…not sure if it was an easter egg but maybe?

Speaking of Jobs second round with Apple…someone recently dug up an incredible 15-minute video of Steve Jobs addressed Apple campus in 1999 (a former Apple software engineer named Akira Nomaka with <300 followers on YouTube posted the clip).

It was 2 years after Jobs took the interim CEO then full-time CEO job at Apple and brought it back from near bankruptcy.

The iBook laptop was selling like hot cakes and Apple was BACK!

But Jobs didn’t want his staff — decked out in the most 1999 California dad fit you could possibly imagine — thinking the job was done:

“A lot of people have declared our turnaround officially complete and you would have to say that’s true. We’ve had 7 consecutive profitable quarters. We made $200M last quarter. That’s a lot of money! And we’ve got great products. But, you know…I never looked at it that way. The reason I came here had nothing to do with turning Apple around. Because that’s about the company. And I know we all love this company. But what we love even more is putting these great products out into the world and seeing people use them.”

Jobs also talks about rebuilding the entire Apple organization and bringing everything in-house. Says Apple was the only company that “gave a shit” about making good computers by vertically owning manufacturing, hardware, software and marketing (unlike Compaq, Dell and Microsoft).

He then goes full Babe Ruth and calls his shot: “I think we will really do some awesome stuff in the next few years and make Apple truly great. Not just within our industry but the kind of company that is a great leader period in the world."

Of course, Apple ripped off the greatest run in product history over the next 11 years: iPod, iPhone, iPad, Apple Pencil.

He was so pumped about shipping 5m iBooks and Apple's market cap is ~$15B ($6B sales in 1999).

Now, Apple sells 400m devices a year and it's worth $3.8T ($420B sales in 2025).

Can it thrive in an AI world and survive another 50 years? A lot of the company’s secret sauce — which took decades to implement — is in this video.

Links and Memes

OpenAI acquired TBPN. The livestream show (5 days a week, 3 hours a day) is co-hosted by Jordi Hays and John Coogan. The duo built an incredible tech media brand by not hating everything about tech. Both were investors and startup founders themselves. Business version of ESPN partnering with Pat McAfee. While the viewership numbers aren’t huge, they mastered clip distribution on X and basically everyone in tech follows the feed (especially fun to see if you get a shoutout). Nailed the vibes with an exceptionally valuable audience.

The deal is $100m+. TBPN was eye-ing $30m in ad revenue this year. It’ll shut down the ad business and the 10-person operation looks to also be helping with OpenAI comms and marketing. OpenAI literally just raised $120B+…so they can afford it (likely a lot of stock).

Ted Merz explains how they have a fantastic diversity of guests that traditional media isn’t fast enough to book. Really really smart game-plan. Good podcast with Jackson Dahl talking about how they used ideas from traditional broadcast TV and luxury brands (and here’s a good chat with Travis Kalanick).

Some more great content for your weekend:

• SpaceX just confidentially filed its IPO. It’s looking to raise $75B and a $1.75Tn with a June listing. SpaceX recently merged with xAI and is forecasting $20-25B in sales this year (primarily Starlink). Based on how insane AI fundraising has been, it’s kinda incredible SpaceX has only raised $12B. Max Olson has a deep dive on SpaceX’s internal operations and Elon’s approach to manufacturing that gives it a massive edge.

• AI is less polarizing than social media. Interesting study from Financial Times showing how business models push different outcome: “Social media companies make money from attention, which in practice means rewarding sensationalism and inflammatory content…AI companies are competing to serve customers who are paying for accurate, objective and, well, intelligent, tools that deliver factual information, often for business-critical purposes.”

• How to take on deepfake scammers. Scam baiter hops on a Zoom call with what looks to be a scam crypto operation. Wants to prove guy is doing a deepfake video and asks him to “put three fingers in front of your face”. Comedy ensues.

• Fruit Love Island…is exactly as it sounds like. The reality show Love Island but with AI-generated fruit characters instead of humans. It apes the show with 1-minute clips and the account AI.Cinema021 has over 3m followers. Just absolutely demented and, yes, I’ve watched dozens of them.

• “Solving the Strait of Hormuz Blockage”…very interesting article from Austin Vernon on how long it would take the world to rework economies around long-term disruption to 20-30% of oil, fuel, liquified natural gas and fertilizer the transits the Strait.

…and here them wild posts.

Actually, let me tell you about Kit Kat. It’s the most popular chocolate brand in Japan. The name sounds like the Japanese phrase “kitto katsu” (roughly translates to “sure to win”). Japan KitKat has 300+ flavours including matcha, taro, wasabi, soy sauce, miso and (my absolute fave) banana with those legends from Tokyo Banana.

Why am I telling you all of this? Because the two wildest memes in the past week were related to:

• Kit Kat: About 12 tons of Kit Kats (~440k bars) were stolen in transit from Italy to Poland.

• Japan X meets American X: The North American X timeline was flooded with Japanese posts after X flipped on an auto-translating feature from Grok. Japan actually has to most daily active users on X. It’s legacy from Twitter days. Japanese users were always able to communicate a ton within the 140-character limits using Japanese characters. Further, Japan’s internet culture has long supported anonymous accounts and niche fandoms which jives well with the X network. Know Your Meme has a good breakdown of how the Japan/America X crossover happened…it started with Japanese users loving American BBQ and the bro-fest between users went wild after that.

The internet being the internet…of course the racists on both sides of the Pacific showed up…but let’s keep this memes this week PG-13:

Now that Kit Kat heist action:

Tiger Woods flipped his SUV in another DUI-related car accident (not alcohol; painkillers):

…and here a few more:

Today, we will talk about:

• Jensen Huang’s key note at Nvidia’s

• Netflix Acquires Ben Affleck AI Startup (and What It Means For Meek Mill)

• Garmin’s Best Year Yet

• …and them wild posts (including Costco’s CEO)

Subscribe now

How Jensen Manifests The Future

Nvidia recently wrapped its multi-day GTC 2026 developer conference.

CEO Jensen Huang kicked it off with a 2.5 hour keynote. He goes “grip it and rip it” style without a teleprompter or script. Huang knows his $4.5T company — and the entire AI ecosystem around it — from front to back, so he dropped mad facts while keeping it conversational.

Jensen introduced a new Vera Rubin GPU rack, some new CPU products and an inference-focused chip from Groq (Nvidia acqui-hired its key talent and licensed the IP for $20B a few months ago).

Just as important as these products was the vision he painted of the future. Not just a future where professional Asian dudes can look baller rocking $10K Tom Ford leather roadster jackets (thanks for trailblazing, Jensen).

But a future of “AI factories” that “manufacture tokens”. He coined these terms and they are a direct callback to the industrial revolution when steam power augmented (and later innovations replaced) human strength. The vision is that machine intelligence will be augmenting (hopefully not replacing; for real, please don’t replace me bro) human intelligence in the 21st century cognitive industrial revolution.

Jensen did so in a very Jobsian manner (a key difference is Steve Jobs tried to convince the end consumer while Jensen’s main audience is now Nvidia’s entire supply chain).

As with any great communicator, Jensen’s been cooking up new terms and roadmaps to manifest reality. I’m not just putting words in his mouth. On the Lex Fridman podcast that dropped after GTC, this was Jensen’s exact framing on the importance of messaging his team and the AI ecosystem.

When I believe it in my mind — you know how it is — you manifest a future, and that future is so convincing there’s no way it won’t happen. There’s a lot of suffering in between, but you’ve got to believe what you believe.

Then, you reason about how to get there. You reason about why it must exist…I reason about things step-by-step-by-step. Oftentimes, I’ve already made up my mind. But I take every possible opportunity — external information, new insights, new discoveries, new engineering revelations, new milestones — and I use those opportunities to shape everybody else’s belief system.

I’m doing that literally every single day.

I’m doing that with my board, with my management team, with my employees. I’m trying to shape their belief systems such that when I come in one day and say, “Hey, let’s buy Mellanox” [a $7B deal for the networking firm in 2019 has already made $50B+ for Nvidia in networking revenue]…it’s completely obvious to everybody that we absolutely should.

On the day I said, “Hey guys, let’s go all in on deep learning”…I’d already been laying down the bricks across different organizations inside the company.

Every organization and everybody in it had already heard pieces of it. So, on the day I announce it, everybody has already bought into many parts of it. […]

So, if you go back and look at the GTC keynotes over time, I’m also shaping the belief systems of our partners in the industry, and using that to shape the belief systems of our own employees. By the time I announce something — like, for example [the new Groq chip] — I’ve often been talking about the stepping stones for two and a half years. […]

We don’t really build computers. We don’t really build clouds. As it turns out, we’re a computing platform company. Nobody can just buy something directly from us in the simple sense. We vertically design and vertically integrate in order to optimize. But then we open up the entire platform at every layer so it can be integrated into other companies’ products and services — into clouds, supercomputers, OEM computers.

The amazing thing is: I can’t do what I do without having convinced them first. So most of GTC is about manifesting a future such that by the time my product is ready, they’re saying, “What took you so long?”

A future vision he plans to manifest came in the days before GTC: Jensen wrote a blog that frames the entire AI industry as a “5-Layer Cake” (energy, chips, infrastructure, models, applications).

He drew this for good measure (Jensen doodles a bunch of these images...old school way to manifest):

During the GTC keynote, a future he spent a lot of time manifesting was AI agents.

Jensen put up this drawing about OpenClaw and heaped praise on its creator Peter Steinberger. He placed it up there with the most important open-source projects ever (HTML, Linux) and said it was “an iPhone moment” for tokens on the Lex podcast (AI agents use ALOT more token than humans…easily 100x or 1000x more….pretty easy to do though when you don’t have to sleep!)

The entire segment was a bit of communications jujitsu, as explained by Jim Prosser:

Roughly two hours into the keynote, Jensen turned to OpenClaw, the open-source AI agent framework that’s taken the tech world by storm since January. Creator Peter Steinberger, who now works at OpenAI, was in the audience. Jensen called it “the most popular open source project in the history of humanity” and compared it to Linux, HTML, and Kubernetes, all foundational, era-defining protocols.

Then he said: “Every single company in the world today has to have an OpenClaw strategy.”

The CEO of a $4.5 trillion semiconductor company, at his own flagship event, used his stage to crown someone else’s project as the defining technology of a new era. He compared it to the technologies that built the entire fucking internet and said the entire enterprise world needs to reorganize around it.

That looks generous and visionary. It’s one of the most self-interested things he could do.

Every always-on autonomous agent is an inference call. Every inference call burns GPU cycles. Every CEO who walks out of that arena thinking “we need an always-on agent strategy” is a CEO who’s about to triple their inference compute budget. Jensen doesn’t care if you use OpenClaw or some other framework. He doesn’t care which models you run or whose API you call. He cares that you’re running persistent agents that consume compute 24/7 instead of intermittent prompt-response sessions.

“Every company needs an OpenClaw strategy” is Nvidia’s 2026 version of 1970s/1980s Microsoft’s mission of “a computer on every desk and in every home.”

This is a specific, nameable communications technique: category coronation as demand creation. You take something external (a technology, a movement, a shift in behavior) and you elevate it to the status of an inevitability. You don’t argue for your product. You argue for the world in which your product is essential. And once your audience accepts the paradigm shift, the downstream purchase becomes inevitable without ever needing to be argued for directly.

Jensen never said “buy more GPUs.” He just needed executives around the world to believe the age of autonomous agents had arrived. Gravity takes care of the rest.

There were 10,000 people (including 100 CEOs) at the SAP Centre in San Jose connecting the dots that Jensen placed on the board.

To be sure, not every pitch Jensen made hit the mark. As with any salesman, he made a few proclamations that were overly sales-y.

On the All-In podcast, Jensen talked about how he gets upset at his $500,000 engineers if they aren’t also using $250,000 in compute tokens for their coding agents.

Not very subtle (but, he's almost certainly right...it is already happening and this is the worst these models will ever be).

There were a lot of riffs on this gag. Local baker says you should eat 100 pieces of bread a day. Local plumber says you should take 67 deuces a day. Local cheesemaker said you should snort parmesan every morning.

The broader context of Jensen’s message is worth noting: he really frames token usage as work augmentation.

He is not alarmist about AI’s ability to replace white-collar professions as compared to other AI industry leaders. Elon says work will be optional in the future. Sama is one of the biggest boosters of UBI. Dario says 50% of entry-level jobs may be gone by 2030 (for real, please don’t replace me bro).

Jensen’s take is that a job is made up of many tasks. If you’re job is simply a task…then, yes, it’s at risk of AI. If it’s a bunch of different tasks, then AI is a tool to help you complete tasks as part your entire job responsibilities.

An example Jensen often brings up is radiology. In 2016, Geoff Hinton (one of the “Godfathers of AI” who used to work at Google) said that “people should stop training radiologists now” because machine vision was getting so good that the job would be soon be gone.

According to Works in Progress, there’s since been an increase in radiology jobs even as the AI has been popping off:

But demand for human labor is higher than ever. In 2025, American diagnostic radiology residency programs offered a record 1,208 positions across all radiology specialties, a four percent increase from 2024, and the field’s vacancy rates are at all-time highs. In 2025, radiology was the second-highest-paid medical specialty in the country, with an average income of $520,000, over 48 percent higher than the average salary in 2015.

Sure enough, a radiologist’s job is collection of tasks. AI is helping speed up scans meaning radiologists can spend more time on other tasks including teaching and consulting with patients...which drives demand for more radiologist roles.

Another Jensen-ism is that “AI won't take your job. But someone who understands how to use AI will".

He often talks about his own career to make the case.

Jensen has 60 direct reports. He says all of them are smarter than him. But he’s the orchestrator. Intelligence isn’t the only (nor, the deciding) variable for the success of Nvidia. In his eyes, everyone can be the “CEO” of AI agents.

That’s a more positive vision of the future.

Anthropic co-founder and Head of Policy Jack Clark was recently on the Plain English podcast and Derek Thompson asked him why Dario frequently gives the alarmist takes.

It’s been a clear turn off for the public.

An 80,000-person survey by the startup found that less developed markets were more positive on AI:

Globally, 67% of interviewees expressed net positive sentiment toward AI. Clear trends emerged in which people in South America, Africa, and much of Asia view AI with more optimism than those in Europe or the United States.

When asked about concerns, respondents from Sub-Saharan Africa (18%), Central Asia (17%), and South Asia (17%) were the most likely to say they had none—roughly double the rate in North America (8%), Oceania (8%), and Western Europe (9%).

One theory is that more developed Western markets have slower growth, which puts the population in a zero-sum mindset. Instead of growing the pie, people are trying to split it.

With that context, telling everyone that your tech will replace their jobs and drink their milkshake is an INTERESTING SALES PITCH!

Clark’s defense is that Anthropic doesn’t want to be overly-panglossian about AI. It can do tremendous good but also very very bad stuff.

Is Jensen’s approach too positive? Honestly, it seems measured (even with the occasional “local barber says you need a trim once a week” pitch).

Aside from the public messaging, Jensen is also having a bunch of C-suite negotiations that we don’t see. He’s trying to convince the brass up and down the ecosystem (ASML, TSMC, Caterpillar, Big Tech, GE Verona etc.) to put up multi-multi-billion dollar in CAPEX for the world he sees coming.

How much manifesting is going on there?

Jensen gives Lex one salient example. A few years ago, he told the world’s leading memory chip manufacturers to expand one type of product (HBM, high-bandwidth memory).

He doesn’t name check them but it’s obviously Micron, Samsung and SK Hynix…which were three of the top-performing stocks last year (which, surprise, I completely whiffed on by not investing).

Jensen explains:

If you look at the CEOs of the DRAM industry — about three years ago — I was able to convince several of them that even though HBM memory was still used pretty scarcely at the time (mostly in supercomputers), it was going to become a mainstream memory for data centers in the future.

At first, that sounded ridiculous. But several of the CEOs believed me and decided to invest in building HBM memory.

Another type of memory that seemed odd to put into a data center was the low-power memory we use for cell phones. We wanted them to adapt that for supercomputers and the data center. Their reaction was basically: “Cell phone memory for supercomputers?”

I explained why. Look at these memories — LPDDR5, HBM4. The volumes are so incredible. All of them had record years and these are 45-year-old companies.

So that’s part of my job: to inform, to shape, to inspire.

There’s a Steve Jobs story with the first iPhone that has similar energy about manifesting the future with a supply chain vendor.

In Apple’s case, Jobs had to convince Corning to commercialize Gorilla Glass for the first iPhone (an earlier prototype of the iPhone had a plastic screen that kept getting scratched).

Brian Merchant relays the story in his book “The One Device” (my write-up on the book here):

[In 2005, Jobs met Corning CEO Wendel Weeks and told him] he doubted Gorilla Glass was good enough, and began explaining to the CEO of the nation’s top glass company how glass was made.

“Can you shut up,” Weeks interrupted him, “and let me teach you some science?”

Jobs was sold, and, recovering his Jobsian flair, ordered as much as Corning could make — in a matter of months. “We don’t have the capacity,” Weeks replied. “None of our plants make the glass now.” He protested that it would be impossible to get the order scaled up in time.

“Don’t be afraid,” Jobs replied. “Get your mind around it. You can do it.”

According to [Walter Isaacson’s biography on Jobs], Weeks shook his head in astonishment as he recounted the story. “We did it in under six months,” he said. “We produced a glass that had never been made.”

Man, this story just hits all the notes of the Jobs mythology:

• Total self-assurance (mixed with douchebaggery): “he…began explaining to the CEO of the nation’s top glass company how glass was made” (LOL)

• Visionary: Jobs was willing to change his mind if convinced and — after being taught some science — he saw the potential of Gorilla Glass.

• Reality distortion field: “Don’t be afraid…get your mind around it, you can do it.”

On the last point, Jobs’ reality distortion field clearly has parallels to Jensen manifesting reality.

So, what’s Jensen trying to manifest next?

Nvidia did $200B+ in sales last year and Jensen says there is $1T in backorder for Nvidia chips and racks over the next two years.

Jensen tells Lex that he believes Nvidia could still see material revenue increase on the continued rise of AI agents and integration across every industry...hopefully with major breakthroughs in healthcare, energy, science (NOT INVESTMENT ADVICE):

There’s nothing that I see that says $3 trillion is not possible. The burden is shared by 200 companies [in the supply chain]. The fact is that we scale out on the backs of the ecosystem.

The question is: do we have the energy to do so? Surely, we will have the energy to do so…that number is just a number.

Almost everything that I [am forecasting for the future token demand] doesn’t exist. That’s the part that is hard. If Nvidia was a $10 billion company trying to take market share, then it is easy to see for shareholders: “Oh, Nvidia could just take 10% share, they could be this much larger.”

But it’s hard for people to imagine how large we could be because there’s nobody I could take share from [note: Jensen often calls these yet to exist opportunities “$0 Billion Dollar” markets].

So I think that that is one of the challenges: the world’s imagination of the future.

That’s why his process of reasoning then manifesting a vision for different types of sick leather designer jackets AI token usage is as important as the new products at GTC.

Netflix Acquires Ben Affleck AI Startup For $600m (...and Meek Mill Was Briefly Mad at Me)

While we’re on the topic of manifesting the future, we need to talk about rapper Meek Mill.

Last May, Meek wrote on X that “Working on a ai tool that can change the world lol”.

Internet obviously piled on and said this was probably the top of the AI bubble.

In September, he said “I have some genius tech guy that’s building a ai tool that everyone will be able to use! I have to get one off first you will see!”

Again, the jokes came in. A lot of memes from The Big Short and Margin Call.

Then, the “Meek Mill AI startup” posting went quiet until he typed up a bunch of posts over the past week including:

• Claude is helping me organize my whole music career and other businesses in days ... and it's moving my business forward at a high rate! Some tech youngbull I met on LinkedIn gave me a incredible template! Who else can help me with Claude

• I need a GitHub too! Is it like that or nah?

There were more but the Github post really got tech and business corners of X excited:

Of course, some memes too:

No one asked but I added my $0.02 on Meek’s AI journey…and he ended up responding:

It’s satire but…I was being directionally serious.

Why? Because — as the title of this sections notes — Ben Affleck literally just sold his AI startup InterPositive to Netflix for up to $600m!!!

For the uninitiated, Affleck co-founded a company that built a tool for post-production editing. He explained how it works in a talk with Netflix’s COO and CTO:

• directors can train a small model from their own dailies of filming

• the model is used in the the post-production editorial process

• directors can more quickly mix, color and finish films (use their trained model to change shots, add props, enhance backgrounds or remove visuals while keeping consistency)

This is similar to work James Cameron is doing with AI and VFX.

Cameron says his interest in GenAI is to reduce post-production costs by making the “cadence faster, so your throughput cycle is faster and artists get to move on and do other cool things.”

If AI can reduce VFX costs by 1/2, Cameron thinks that means more blockbusters (including original IP or works by up-and-coming directors that wouldn’t otherwise get green-lit).

Affleck mentions “getting more episodes” of your favourite TV shows with his tech.

If Affleck hits the full $600 million cash deal, this looks to be Netflix’s largest tech acquisition ever (I’m an equal-opportunity shitposter and obviously did one for Affleck’s deal).

Whether or not the tech is worth $600m, Netflix is getting the Affleck halo of a well-known (but still skeptical) AI practitioner.

He has been Hollywood’s go-to takesman. He went on Rogan and totally cooked AI. Said it will never do truly creative work or write an interesting script. Called major AI founders scaremongers trying to pump up valuations by saying AGI will wipe out all jobs. on how AI can or can not change Hollywood. He thinks unions will protect a lot of acting/writing jobs for foreseeable future.

But there’s clear benefit on the workflow front.

“It’s not about text prompting or building something from nothing,” Affleck says. “You’re building a model from your own material.”

If Netflix wants to ramp its use of AI, Affleck’s narrow view of the technology’s use makes it less threatening and helps with creative talent (David Fincher is already using it for a Brad Pitt Netflix film, probably the sequel to Tarantino’s Once Upon A Time In Hollywood).

Back to Meek Mill, Affleck showed how creatives can use their industry-specific knowledge and brand to build AI tools.

I shared that in a reply to my original post.

Then, some of the comments and DMs from his fans were getting spicy enough that my first instinct was to reply to his post with “Mr. Mill, this was an unfortunate misunderstanding. Please accept…”

Wrote this instead:

Anyway, he responded and it was chill:

The playbook is there and, honestly, the a lot of the timeline wants to see him pull it off. Hopefully builds something. Not just a low-lift easy W.

Startup incubator YCombinator reached out to him. Meek got an offer to do an AI bootcamp. And almost certainly talking to VCs.

Wouldn’t be surprised at all if Meek Mill manifests an AI startup exit in the future. Things moving so fast in tech world, am primed for anything at this point.

Garmin is Cooking

The folks at Garmin at the absolute GPS OGs (or in industry parlance, “Global Positioning System Original Gangsters”).

They recently reported 2025 earnings and hot dang: the Kansas-based firm (which is legally domiciled in Schaffhausen, Switzerland) did a record $7.3B last year and is now worth $45B.

It racked up these figures after getting CLAPPPPPPPPED in key categories by Apple and Google over the last 18 years:

• GPS: When Google released Maps for Android in 2008, Garmin’s car GPS devices made $2B a year (~70% of total sales). It’s now only $1B year (or ~15% of sales)

• Smartwatches: From 2008 to 2014, Garmin pivoted into smart fitness watches (GPS, heart tracking, waterproof) and grew sales from $0 to $1B…just in time for Tim Cook & Jony Ive to take another dump in their yard with the release of the Apple Watch.

In response to the Apple threat, Garmin started selling high-end models and has carved out a niche in the premium fitness smartwatch market ($2-$3,000 price points vs. $1,099 for Apple Watch Ultra).

Smartwatches (under “Fitness”) made $2.3B in 2025 and was the company’s largest segment for the first time.

Today, fitness and outdoor equipment make up ~60% of Garmin’s $7.3B revenue projected for 2024 (GPS — evenly divided between car, aviation and marine segments — is ~40% of revenue vs. 100% in 2008).

After surviving Big Tech haymakers, Garmin’s market cap is up over 7x from 2008.

I previously wrote a 3,800 word deep dive on how they pulled it off (a lot of R&D) and you can read that piece here.

Links and Memes

Some other content for your weekend consumption:

• Google Translate for Linkedin Speak…is absolutely unhinged.

• OpenAI is shutting down its video app Sora…the startup is pivoting the business to focus on enterprise and coding use cases and it wasn’t worth having their scarce GPUs make videos of Sam Altman stealing GPUs at Target, or unhinged cat Ring footage videos or Jesus winning an Olympic Gold in swimming by walking on water (thankfully, we will always have the videos saved to our iPhones).

• United Airlines now sells entire 3-seat rows in economy…that turns into a bed (and can’t imagine any parent with kids under 5 picking another airline if given choice).

…and them wild posts (including the CEO of Costco doing the “CEO eats his own product” challenge with a hot dog…no condiments…straight raw dogged it…wild):

Finally, absolutely nothing (NOTHING) can prepare you for this corner of the stock photo industry:

One more finally: Warner Bros announced the new Harry Potter TV show. They cast Paapa Kwaakye Essiedu as Snape, which made a bunch of original fans mad because of the race swapping. Alan Rickman played Snape in the film and the character’s description is “a thin man with sallow [pale/yellowish] skin, a large hooked nose, and shoulder-length, greasy black hair that frames his face”.

Embarrassingly, I haven’t read the books so don’t have any real opinions about the Potter-verse. The only thing that I know is that the Black Snape memes have reached an absurd level rarely ever seen in the meme-sphere…(including an absolutely out of control AI-generated music video).

Today, we will break down the business of The Sphere (including my experience experiencing the Sphere experience).

Also this week:

• Stanley Druckenmiller “Invests, Then Investigates”

• McDonald’s CEO Viral Burger-Eating Snafu

• …them wild posts (including DICK’s Sporting Goods)

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A frequently used piece of online engagement bait is to post an image of an ornate medieval cathedral and caption it with “we don’t build anything beautiful anymore.”

One rebuttal — which I happily ascribe to — is to reply with an image of Las Vegas Sphere and say, “yes, we definitely do.”

Look, the latter might not be the Cathedral Notre Dame or La Sagrada Familia…or the Forbidden Palace.

But it’s still a different kind of marvel and incredible engineering accomplishment.

The exterior of the Las Vegas Sphere, known as the Exosphere, is a 580,000-square-foot LED display wrapping a 366-foot-tall, 516-foot-wide spherical structure.

This colossal screen is composed of 1.2 million individual "LED pucks," each containing 48 LEDs, to create a dynamic and high-resolution visual experience (translation: blows your got dang socks off).

The interior — which will will discuss later — is a whopping 5.7 million cubic feet.

Fly into or drive around Las Vegas and you can’t miss the structure, especially when the LED exterior is blasting an advertisement directly into your eyeballs and, from there, into your fingers to click on a purchase you don’t need.

If you were to airdrop someone from the 15th century into the Wynn lobby and have them peak out the corner to see the Sphere, they would immediately shart themselves.

That’s enough visual stimuli to last a lifetime.

A recent example of the Exosphere at its best was during the debut of The Wizard of Oz last August. The classic 1939 film was adapted for the Sphere and the exterior made sure to let us know:

That’s just the outside.

James Dolan — the owner of Madison Square Garden, the New York Knicks and New York Rangers — spent $100m to make a version of the film fit for the Sphere’s interior (apparently, it’s official name is “Sphere” but it sounds way more natural to say “the Sphere”, so I’ma roll with that).

The bet has so far paid off: the Sphere has sold 2.2m tickets and pulled in total sales of $292m…with a stretch goal of clearing $1B…which is doable within the next year at the current rate of ~$2m a day.

Investors are loving it and the stock is RIPPING. Up 3x in the past year to a market cap of $4B. NOT INVESTMENT ADVICE.

This is a best case scenario for the Sphere because the megastructure was not cheap to build at $2.3B (specifically, The Wizard of Oz is owned IP that the Sphere can milk and sell viewers super-marked up concession stands during multiple viewings a day).

Since the launch of The Wizard of Oz, Sphere Entertainment has seen its market cap increase over 2x to $4B.

Will this business model work in the long-term, though?

We will find out…by walking through the project’s history (including my trip their last year):

• Inspiration for the Sphere

• An engineering masterpiece

• How does the Sphere make money?

• Mini-Sphere and a new business model

Inspiration For The Sphere

To understand why the Las Vegas Sphere exists, you have to understand the billionaire owner of Sphere Entertainment: 70-year old James Dolan.

And to understand James Dolan, you have to understand his father Charles.

In December 2024, the elder Dolan passed away at the age of 98 and The Hollywood Reporter highlighted his accomplishments as a “pioneering Cable TV mogul”:

• Bringing cable to New York: Born in Cleveland in 1926, the elder Dolan spent his early-30s wiring cable in Manhattan high-rises because the buildings had a hard time receiving antenna signals. After wiring up a bunch of Manhattan buildings, Dolan developed the idea to attract new cable subscribers by creating exclusive programming (film, sporting events) that would flow through the wires. He cut a landmark deal with Madison Square Garden to exclusively broadcast New York Knicks and New York Rangers games.

• Launching HBO: In 1971, Dolan teamed up with Time Inc. — a minority investor in his cable business (and one-time iconic media brand that has unfortunately turned into a clickbait laughingstock) — to launch HBO. Dolan dubbed the content device a “Home Box” and a colleague suggested, “Well, if it’s Home Box and we’re selling movies, why don’t we make it the Home Box Office.” That’s the start of how we got The Wire, The White Lotus, Deadwood, The Sopranos, Veep, Silicon Valley and 8-9 hours of Jeremy Strong doing Kendal Roy’s sad face in Succession.

• HBO Flops, But Cable Business Explodes: After its launch, HBO only secured 10,000 subscribers in its first year. Which is fair…considering the fact that Kendal Roy’s sad face was still decades away. So, Dolan sold his majority stake to Time in 1974. He called the sale “demoralizing” but quickly refocused on the cable business. Under the brand of Cablevision, Dolan expanded cable service to New York suburbs followed by other leading American cities including Boston, Chicago and Cleveland. He’d later found American Movie Classic (AMC) in the 1980s as a production house for independent and classic films.

James was born in 1955. After graduating from SUNY New Paltz with a Communications degree, he joined Cablevision and gradually worked his way up through his father’s telecom empire.

The younger Dolan actually wanted to be a musician first

He couldn’t make a career of it…at the time.

Today, James is indeed the guitarist and frontman for JD & the Straight Shot but the band really only exists because he is…THE CEO OF A COMPANY THAT OWNS MADISON SQUARE GARDEN AND HE CAN DO WHATEVER DAFUQ HE WANTS INSIDE THE STADIUM.

The passing of the CEO baton from Charles to James took place with a sequence of corporate milestones in the mid-1990s:

• 1994: Cablevision and ITT (a conglomerate) acquired the Madison Square Garden (MSG) arena and ownership in the Rangers and Knicks from Viacom for $1.1B.

• 1995: James Dolan becomes CEO of Cablevision.

• 1997: Cablevision spends $650m to buy out ITT’s 50% stake in their 1994 transaction (they also took full control of New York’s Radio City Hall in the deal).

In the following decades, the younger Dolan added notable entertainment properties to the MSG portfolio including Beacon Theatre (in New York), Chicago Theatre (I’d hope that this is in Chicago) and The Forum (in LA, which it later to sold to Big Daddy Ballmer and the LA Clippers).

James is currently worth multi-Billy and controls some of the most important cultural institutions in America. But it was his father that laid all the groundwork. Based on the lyrics for one of his songs — which borrows from Bruce Springsteen’s “Born To Run” — James is very aware of how he was born on third base:

Dave, this company rips the bones from your back:
It's a death trap, it's a suicide rap.
You should have got out while you were young...
Because I have something to tell you: I'm Chuck Do-lan's son!

More broadly, James is a disliked in many parts of New York due to his hard-charging personality and business decisions. He frequently meddles in management of the popular Knicks and had high-profile beef with Knicks icons Charles Oakley and Spike Lee (there has also been blowback on Dolan’s use of facial recognition software to deny entry to MSG for people he doesn’t like).

All of this background is important because it provides the ingredients for the past decade of James Dolan’s life.

He grew up loving music, running a New York entertainment empire and living in the shadow of his father. If James wanted to truly make his own mark — but with the skills and knowledge he built since the 1980s — how could he do it?

Maybe by creating an entirely next-generation live music entertainment experience that is located thousands of miles away from his home base.

Enter the Sphere.

In 2016, James sold Cablevision to French telecom giant Altice for $17.7B. After all the paperwork settled, he had $1B in cash burning a hole in his wallet.

Dolan wanted to find a way to build up the MSG business with the funds.

Personally, I would have used the money to launch an AI-powered Air Fryer-Pizza Oven-Blender kitchen top product to take on SharkNinja. But Dolan had another (much more round-shaped) idea in mind, as he told Variety:

We had capital, and I wanted to create a growth strategy for MSG. And there was really no easy growth strategy available. Buying more venues didn’t interest us. You can’t buy any more teams. We didn’t really want to go into the promotions business, like Live Nation. But then the notion of changing the model that venues were operated with is what really spurred me on.

I’ve told this story: Madison Square Garden at the time was the busiest arena in the world, with something like 200 events annually, which still left us with 160 dark nights. And then you take a look at what were the most profitable out of the 200, and it’s the ones where we own the content — the Knicks and the Rangers.

So I wanted to disrupt the model so that I could keep the building busy 365 days a year, and wanted to own the content. How could I do that? It had just evolved that the technology was just blossoming at that point to where you could do something like the Sphere.

While noodling with a colleague, Dolan drew the image of a sphere with stickman inside.

The structure’s interior was inspired by Ray Bradbury’s “The Veldt”, a sci-fi short about a nursery with immersive walls that children used like a VR room:

It’s kind of amazing that Bradbury wrote that story in the ‘50s, and it really was about experiential media — and in the case of ‘The Veldt,’ in the home — and talked about crystal walls that turned into landscapes.

I mean, it was not dissimilar to what we’re doing [with The Sphere]. So, as we started to talk about what we could do technologically with the venue, ‘The Veldt’ came to mind right away. Could we create those kinds of experiences inside of the venue? I don’t think that we quite achieved Bradbury’s vision with it, and I don’t really want to completely achieve his vision, because in the end of his story, the parents get eaten by the lions. I think that would mean I would get eaten by the lions.

Construction on the Sphere began in Fall 2018. Dolan partnered up with casino giant Las Vegas Sands, which provided land near its Venetian Resort (PE firm Apollo later bought the Venetian for ~$6B in 2022).

The wildly ambitious project blew through its $1B budget and the final price tag was $2.3B. This overrun was a combination of rising construction costs during COVID and the fact that the Sphere was an insane engineering challenge.

Truly a “one-of-one” as we’ll see in the next section.

An Engineering Masterpiece

Almost exactly a year ago, I did a weekend trip to Las Vegas and — despite seeing 56,876 memes of the Sphere in the preceding 2 years — I was still shocked when confronted by this giant half sphere plopped a few blocks away from the Wynn and Venetian resorts (and, importantly, only a 14-minute walk from the nearest Benihana).

The animations on the Sphere’s exterior (aka the Exosphere aka the biggest screen in the entire world) are possible because of 1.2 million hockey puck-sized LED lights.

This system was designed by the same team that made the Burj Khalifa’s exterior lighting system.

Every viral visual (basketball, pumpkin, smiley face emoji) is actually more impressive from a distance. Why? Because the pucks are actually 8 inches apart and the lights don’t blend as well together until you’re further away.

The wow factor near the Sphere is the size itself: with a height of 366-feet (and width of 516-feet), the structure is taller than Big Ben (316 feet) or Statue of Liberty (305 feet).

Then, you enter the Sphere and prepare for your socks to be blown off.

Recall that James Dolan is obsessed with music and one of his goals with the Sphere was to create the world’s most unique music venue (which was also why the City of Las Vegas was so keen on the project):

• 18,600 seats

• 167,000 speakers (that’s 8.4 speakers per person)

• The world’s largest LED screen ever (160,000 square feet), which is 20x larger than the largest iMax screen (total of 256 million pixels).

The screen is made of LED tiles that bend above and behind the viewer’s head (the Exosphere display is still somehow is 3.5x larger than this LED screen).

Then there is the audio. Dolan’s favourite. The YouTube channels for MegaBuilds and Jared Owen have great breakdowns on the structure and explain how the sounds work.

Basically, the 167,000 speakers are behind the super-thin tiles of the LED screen.

Using the same principles as noise-cancelling headphones, the Sphere’s sound system can calculate — and target — which audio tracks point to which seating area.

The official name of the technology is “sound beaming” and it means that each of the 18,600 seats receive “headset sounds without the headset”.

To flex the venue’s technology, Dolan knew he had to reach out to the right musical act and that’s why he approached U2 in the Fall of 2021 to become the opening attraction.

Willie Williams — U2’s creative director since the early 1980s — initially thought doing a show at the Sphere was a “terrible idea”.

U2’s iconic tours have been breakthrough custom sets from Zoo TV in the early 1990s (pioneering giant screens on stage) to the 360 Tour of late 2000s (360-degree stage for stadium shows).

They weren’t keen to build an act around the Sphere’s requirements. Domes are typically awful for sound. Also, Dolan’s team was asking them to fill the most ambitious audio-visual specs ever.

Ultimately, the idea of a residency (instead of a moving tour) appealed to U2 because of COVID travel uncertainty.

The Sphere resolved the “domes suck for sound” issue with its 167k speakers including one in each seat.

Every person got a “getting studio-quality sound” according to Dolan.

Meanwhile, the visuals were a collaboration with the world’s top creatives (Es Devlin, Marco Brambilla, John Gerrard and long-time U2 collaborator Brian Eno).

The amount of data created to fill the LED screen is mind-boggling, per Wallpaper:

• there are 268,435,456 pixels…

• …which is equal to 72 HD TVs

• … which is equal to 12k screen resolution

• …which means “every minute of content produced for Sphere is the equivalent of one hour of streaming television”

“With all the big stuff I’ve done for U2 and anyone else, we don’t start with the equipment, we start with the idea, and then figure out what we need to realize that idea,” Williams tells Variety. “And sometimes it involves big video, sometimes it doesn’t. Whereas here, the only given we had going in was the building — and a building that didn’t exist, and in fact isn’t finished now. So it was odd starting a show with hardware and with a space rather than the other way around.”

The band opened in October 2023 and its 40-show residency ended in March 2024.

We all saw the viral videos and the effort has since been replicated by Phish (April 2024), the Grateful Dead (May-August 2024, March-May 2025) and Backstreet Boys (July 2025-February 2026).

U2 wasn’t the only attraction to open with the Sphere.

Dolan tapped director Darren Aronoskfy to make a film to flex the audio-visual features.

The Aronoskfy project is called Postcard From Earth. The 55-minute film is like a nature documentary and tries to cover the earth’s timescale from a single-cell organism to pre-human nature to a space-faring society.

Packed with unbelievable visuals earth and space, the Sphere team had to design a special camera to fill the pixels on the 160,000 square foot wraparound screen (normal film cameras capture film for a flat rectangle).

The Sphere team initially tried welding together 11 cameras to create the right effect but it didn’t work.

Enter the Big Sky Camera: the 316 megapixel camera has a 165-degree view and shoots 18K film at 120 frames per second. The device requires 12 people to operate (comparable to the avocado-smashing operation at your local Chipotle) and each second of film it records is equivalent to 60GB of data (comparable to my collection of meme screenshots on my phone that I will never look at or use but will also never ever delete).

The film content is so baller that the crew has to view the footage in VR helmets while on set to capture the full field of view.

In addition to the Big Sky Camera, MSG built a quarter-sized replica of the Sphere in California called Sphere Studio to test and edit content.

We haven’t even mentioned seat haptics and 4D features (wind, smells) that are also at the disposal of people creating content for the Sphere. So, yeah, there I mentioned them.

The combined investment created arguably the world’s best audio-visual experience.

In the next section, we’ll discuss how Dolan has monetized his unique offering.

How does the Sphere make money?

The easiest way to understand the Sphere’s business model is to re-iterate a point that James Dolan made about Madison Square Garden:

…take a look at what were the most profitable out of the 200 [nights of events at MSG], and it’s the ones where we own the content — the Knicks and the Rangers.

Consider the U2 residency and Darren Aronofksy’s Postcard From Earth.

It’s estimated that Bono and the U2 Bros made $250m+ from the 40-show residency at the Sphere.

The majority of that figure is from ticket sales, which we can back into with some quick-and-dirty napkin math: 40 shows x 18,0000 people x $400 per ticket = $288m.

While the Sphere took a small cut at the box office (probably 10-15%), it made dough on merchandise and insanely marked-up F&B.

With Postcard From Earth, the Sphere gets to keep ticket sales (which are $100 each!!!) and that sweet sweet high-margin sweet sweet concession. I spent $200 on a t-shirt, two popcorns, two waters, Apple Cider, Wine and a blinky cup for my son during our Postcard From Earth visit.

To make the film experience feel triple-digit worthy, ticket holders are encouraged to explore an atrium area with a giant holographic wall and five humanoid AI robots that allow guests to ask questions (“Hey Aura, what is the mark-up on the $18 M&Ms I just bought?”).

It was admittedly very very cool. IMAX on HGH, steroids and black market Chinese peptides. Head craning in every direction. AI could never.

An average audience size for the film is probably in the 5,000-range but the Sphere can play 4-5x a day…every single day. To date, they’ve sold 4 million tickets to Postcard From Earth for a total haul of $400m (compared to the film’s estimated budget of $80m).

According to Lucas Shaw at Bloomberg, the Sphere’s estimated tickets sales for 2025 reflect a split of 67% for films (including Postcard From Earth and Wizard of Oz) and 33% for live concerts (including Backstreet Boys, Dead & Company, The Eagles, Phish, Vince Gill, Zac Brown Band, No Doubt).

For more color, I looked at Sphere Entertainment’s quarterly earnings.

Let me pause a second to clarify Dolan’s empire.

It’s three three public companies:

• Madison Square Garden Entertainment Corp (MSGE): It owns and operates venues including Madison Square Garden, Radio City Music, Beacon Theatre etc.

• Madison Square Garden Sports Corp (MSGS): This entity owns the New York Knicks (NBA) and New York Rangers (NHL) franchises…and Dolan is considering splitting up ownership of those teams into two separate publicly-listed firms. Stay with me.

• Sphere Entertainment (SPHR): This bad boy owns the Sphere and MSG Networks, regional cable and streaming networks.

Something that makes SPHR a bit hard to value is that its yolked to the dying cable industry and there’s been a lot of chatter for Dolan to spin off the debt-laden MSG Networks business.

With all that preamble, it is actually very straightforward to break down the Sphere’s financials from the recently released 2025 annual.

Sphere Entertainment doesn’t break out the film and live event segments. Let’s assume the aforementioned ticketing split of 67% film and 33% live concert.

Here is a breakdown of its $782m in 2025 revenue.

• Films: 48% of total revenue

• Live Events: 24%

• F&B and Merchandise: 14%

• Sponsorship and Exosphere Ads: 14%

Somewhat annoyingly, Sphere changed its reporting year end from June 30 to December 31. So, I wasn’t able to make a direct comparison but the 2025 sale of $782m looks to be up 30% from ~$600m in calendar 2024.

While the Sphere is still running at an operating loss (negative $268m in 2025), it would have been profitable without the significant depreciation expense ($341m).

Notably, Sphere’s Q4 2025 saw revenue jump 62% YoY while the quarterly operating loss declined from $108m to $7m.

The Sphere will likely be operating in the green soon and it’s riding some long-term cultural trends.

People are pining to share live experiences with other people and I don’t think LLMs will be able to recreate singing “I Want It That Way” with 15,000 other millennial Backstreet Boys super fans (fun fact: I saw the boyband when they randomly toured Vietnam in 2011 and sat next to AJ at an after-party at a Saigon nightclub).

The business is clearly improving and the formula for making Sphere a profitable venture is not complicated.

What is the Sphere’s long-term potential?

Here is how the Sphere wins:

1. Keep Las Vegas Sphere open 350+ days a year.

2. Sell 15,000 film tickets a day across 3 showings.

3. Sell Sphere blinky drink bottles at 5x markup

4. Have 100 days of musical acts a year playing in the evening.

5. Sell popcorn, M&Ms and 500ml bottles of water at 10x markups.

That’s about $1.5B in revenue right there (~2x the current business) and the operating costs wouldn’t change much from the current steady state.

While the live performances will grab headlines — including a Netflix rematch between Manny Pacquiao and Floyd Mayweather scheduled for September — it’s the films (and the owned IP) that will really bring home the bacon.

The Wizard of Oz is instructive and Dolan described it as “an important blueprint for our long-term vision”, per Deadline:

Blessed by Warner Bros and brought to the spherical venue by producers including Jane Rosenthal and technology from Google DeepMind, the new version has a running time of 75 minutes. Nearly a half-hour shorter than the 1939 original, the Vegas incarnation is able to squeeze in multiple daily showtimes, alternating with live musical acts like the Backstreet Boys and Phish. It is also highly interactive, with drone-controlled monkeys flying around the auditorium, tornado-simulating wind machines and bonus experiences in the merch-filled lobby.

[The Wizard of Oz at Sphere] is a wholesale rethink of the film — by necessity, given it is filling the largest screen in the world, a vastly different canvas than the rectangular ones in traditional movie theaters. Controversially, it used AI to refocus or restore characters cut from the original, and even integrated fleeting images of Dolan and Warner Bros. Discovery CEO David Zaslav in one black-and-white sequence.

Dolan is already working on another version of The Wizard of Oz which will presumably be even Spherey-er.

The Sphere’s next major film project is an extreme sports documentary titled From The Edge, to be made in partnership with the creators of the Netflix film Free Solo about superchad climber (and Mr. Taipei 101) Alex Honnold. From The Edge will show footage from various extreme sports.

Other top-tier directors are in talks to copy the Arronosky playbook, too.

James Cameron told The Town podcast that he’s interested in doing a project for the venue (The Wizard of Oz is Cameron’s favourite film ever).

I’m very interested because I like the Sphere as a format…and I’m looking for a way to actually do something myself. I want to see the decisions that they made [adapting The Wizard of Oz] around linear narrative with cutting to close-ups and medium shots and wide shots and how well that worked.

For the Trapital podcast, Dan Runcie and Tati Cirisan had a timely conversation on what other IP could do well at the Sphere.

The The Wizard of Oz as IP sets a high bar since it is globally known and nostalgic enough to get people off their butts and down to Las Vegas.

What about Disney’s Fantasia? Or Spielberg’s Jurassic Park? Or Nolan’s Interstellar? Or Cameron’s Avatar? Or Rob Schneider’s Deuce Bigelow: Male Gigolo?

Treat the Sphere as a theme park ride and bring the type of content people want to see at Disneyland or Universal Studios.

How about partnering with Netflix? The streamer is making a push into live events and in-person experiences. The Sphere could have done some crazy viewing / theme park experience for the Stranger Things finale (eg. re-create The Upside Down).

Or the Sphere could be a super-size version of Cosm (aka IMAX for sports bars).

A more macro question is Las Vegas itself. While the Sphere is pricey, almost everything in Las Vegas has reached “rip-off” levels since the major casinos went public and private equity started getting involved.

The Sphere spent $2.3B to try something new and it is a unique experience. However, its fortunes are obviously linked to Las Vegas tourism and those numbers have been on decline.

Tourism trends for Las Vegas are looking quite grim, per Slate:

Hotel occupancy has cratered. Rooms were only 66.7 percent full in July, down by 16.8 percent from the previous year. The number of travelers passing through Harry Reid International Airport also declined by 4.5 percent in 2025 during an ongoing ebb of foreign tourists, for familiar reasons. Canadians, historically one of the city’s most reliable sources of degenerates, have effectively vanished. Ticket sales for Air Canada jets flying to Las Vegas have slipped by 33 percent, while the Edmonton-based low-cost carrier Flair has reported a 62 percent drop-off. Dolan said that 10% of visitors to Las Vegas have visited the Sphere, so this is a macro trend to keep an eye one.

Canadian visitors were put off by “51st State” talk and could very well bounce back in years to come.

But one worrying trend is that young people aren’t as interested in Las Vegas. Keen travellers can jet off to anyone in the world and get their exact fix on any budget (don’t need the fake Vegas Eiffel Tower when you can get the real thing for cheaper).

Gambling is now a smartphone swipe away. And the Gen-Z/Gen Alpha generations aren’t very interested in booze and those $5k bottles of Grey Goose at Hakkasan.

The Sphere does have global expansion plans, though. Some geographic diversification can help mitigate the risk of further Las Vegas decline.

Having completed the structure and proven a business model, MSG is licensing the design plans for the Sphere — including 5,000 seat “mini-Spheres” — around the world and selling them its owned IP.

A notable arrangement struck between Dolan and Abu Dhabi’s Department of Culture and Tourism (DCT) last July. The DCT pays an initiation fee and covers the cost of construction, with the Sphere team overseeing the project. Once the structure is built, the Sphere receives other revenue streams:

• annual franchise fee (for 25 years)

• an ongoing fee for operational services

• content royalty with an annual fee based on a specified percentage of total ticket sales

Tourism authorities in Saudi Arabia and South Korea are also considering mini-Spheres (London’s Mayor turned down the attraction “due to significant light intrusion, potential harm to human health and amenity for residents, and concerns about the project's high energy use and sustainability”).

In January, the State of Maryland struck a deal with Dolan to bring a mini-Sphere to National Harbor, about 15 minutes from downtown Washington, DC. It will receive $200m in state, local and private incentives with a completion date around 2030.

How much could these mini-Spheres make? I’m just going to put my finger in the air and guess that a fully operational mini-Sphere will spit off $25-50m a year for the Sphere parent (that sweet sweet high-margin licensing and royalty fee).

There is also a secondary benefit for live acts: all of the investment they put into creating a Sphere-specific product can take the “show on the road” to other sites. This could be a further inducement for top-tier artists that have taken on the residency model (eg. Harry Styles doing 30 shows at MSG or Beyonce setting up a shop in a handful of cities and having fans come to her).

With the Sphere more established, the venue could also take riskier shots with the musical acts…not just guaranteed older tickets (eg. Grateful Dead, Phish, Eagles, Backstreet Boys).

Assuming that Sphere Entertainment can get 10 built, that’s a solid $250-500m a year with many sites not requiring a 9-figure upfront investment from Dolan.

Firing on all cylinders — like the cast of 2008’s Tropic Thunder — and you’re looking at a $2B a year business ($1.5B in Las Vegas directly owned + up $500m a year from mini-Spheres around the world).

In the grand scheme of things, the Sphere probably tops out at a $10-15B market cap.

Still impressive considering the rocky start.

Perhaps more importantly for Dolan, the project is definitely something he can call his own (away for Charles’ shadow). And, who knows, maybe people will be posting an image of the Sphere in a few decades with the caption “we don’t build anything beautiful like this anymore.”

That’s priceless.

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Stanley Druckenmiller “Invests, Then Investigates”

Investing legend Stanley Druckenmiller went on the Morgan Stanley podcast at the end of January (and the episode was published last week).

Druckenmiller’s views on business and investing have been sought after for decades.

He spearheaded the trade that broke the Bank of England, when George Soros’ Quantum Fund made $1B by shorting the British Pound in 1992. He also has an insane track record with his own Duquesne hedge fund returning an average of 30% a year over a 30-year stretch (without a single down year).

Soon, two people that worked under him will hold the most important finance-related jobs in the White House (Scott Bessent is currently the Treasury Secretary and Kevin Warsh has been nominated to be the next Fed Chair).

Let’s chat about two things from the podcast. First — and not investment advice — Druckenmiller talked about his current portfolio. He’s long Japanese and Korean equities on its AI and long-term manufacturing potential. Long copper because of tight supply and the AI trade. Long gold because of geopolitical uncertainty. Short US treasuries. He says he changes his mind every few weeks…so keep that in mind.

Second, he provided a breakdown of his recent Nvidia trade. It made 6x over 2 years, profiting $1B+ before exiting the position in 2024.

This trade is an example of Druckenmiller’s philosophy to “invest, then investigates”.

Basically, put some skin in the game because it forces you to study up on the position (Disclaimer: the strategy works really well when you’re one of the greatest investors ever and have incredible intuition…less so when you are me and bough an animal-themed NFT because it looked funny and an anonymous Reddit post 47 replies down in a thread said it was “the most guaranteed 100x you’ll ever find”).

Still worth studying Druck’s thought process and here is how it went down:

• In early 2022, he started seeing Stanford students switch from crypto to AI projects.

• His “superstar” analysts brought this to his attention and he asked around Silicon Valley network about AI.

• Druck wanted to make an AI investment and his partner said Nvidia (Druck bought “enough to get hurt or make some money”…forced him to keep track).

• ChatGPT launches two weeks later...immediately realizes “enormity” of opportunity and Druck doubles the position.

• He listened to a Morgan Stanely macro analyst call and they mentioned that AI is bigger than any macro trend...Druck (after experiencing ChatGPT) doubles the position again.

By early 2023, he’s fully bought into AI as a “massive massive change”. Pattern recognizing on previous major tech changes in his career, Druck knows Nvidia will keep running for at least 2-3 years as the rest of market catches up and re-rates.

He holds the position even as his tech-expert investor network sells Nvidia for the quick profit.

Druck intends to hold long-term but sells it all in 2024 at $800 a share. He got in at $100-$150 and says he couldn’t handle the rapid rise. It was too successful of a trade. Nvidia quickly runs to $1,400 and he “felt sick” selling. Says his biggest mistakes are always “selling too soon”, but that’s just part of game of investing for him.

Druck then drops this incredible bar: “My advantage is not IQ, it’s trigger pulling.”

Definitely check out the entire episode.

If you’re looking for more timeless Druck, then check out my 40-minute interview with the legend in 2021. Massive shoutout to my friend and former colleague RJ Assaly for setting up the chat. Such an honor.

This was my fave exchange:

ME: Why don’t you short Dogecoin?
STAN: I don’t like putting campfires out with my face.

Funny note: I had just moved to a new place before the recording. Lighting for my camera was off and the USB cord on my mic fell out during the chat. The sound totally jagged but I kept the mic up for optics… and this gentleman Jonathan Smith called me out on it hard in the YouTube comments LOL:

McDonald’s CEO Viral Burger-Eating Snafu

I’m guessing many of you have seen the video of McDonald’s CEO (Christopher Kempczinski) eating the new Big Arch burger.

Kempczinski has been actively posting on his Instagram account because in 2026, it behooves public-company CEOs to go direct to the audience and show their “authentic” side.

Since taking over as CEO in 2019, Kempczinski has been clocking ~$20m a year so it’s not a huge ask all things considered.

BUT DAMN! Who the hell thought it was a good idea to let him post the Big Arch burger review.

It was a very unenthusiastic review all things considered.

Bro just mailed it in and did NOT look like he wanted to be eating the Big Arch:

• It’s overly staged (the fries are pointing outward (no one does that) and forced (he claims “I don’t even know how to attack it”)

• He calls the burger a “product” … which is kinda funny tbh.

• Exclaims that the burger has “patties, sauce, some lettuce — there’s so much going on with this burger”…which is literally table stakes.

• He said “that’s a big bite for the Big Arch” and it was literally a nibble.

“Going direct only works when it’s authentic,” writes Lulu Cheng Meservey about the clip. “Really kills the mood if it feels like the CEO’s blinking in Morse code.”

Here’s the thing. You put Trung Phan in front of that burger and I am going to town. Yes, I know. McDonald's is awful for you. I can't help myself. I've probably had the Big Mac + Two Cheeseburgers + 6 Nuggets + There Will Be Hell To Pay On The Dumper Tomorrow AM Combo at least 100x (half of which was after the bar at 2am).

Naturally, a bunch of other fast food CEOs jumped in the fray. Burger King. Wendy’s. A&W. (Thankfully, nothing yet from Arby’s or Taco Bell).

The internet cooked Kempczinski for a solid 72 hours and a running theme was that he was the canonical “manager that doesn’t actually care about the brand and who’s skill is rising to the top of bureaucratic organizations”.

He may love the product…but his CV is also MBA Brand Management 101: Duke —> Brand Manager P&G —> Harvard Business School —> Boston Consulting Group —> 8 year PepsiCo —> 7 years Kraft Heinz —> 11 years McDonald’s.

Honestly, that’s the CV you want to run a Fortune 100 consumer brand: McDonald’s is the 65th largest company in the world with 44,000 locations, $26B annual sales and a $233B market cap.

It’s rare to have founders still running these kind of things. The board’s really paying him to keep the trains running on time, not social posts. He’s trying whatever. It’s funny. Keep eating burgers bro. Give me more potential engagement.

Speaking of founders, Ray Kroc — who started as a franchising agent for McDonald’s before snatching it from Richard and Maurice McDonald in the 1960s— went founder mode on burgers. He used to drive unannounced to burger locations and eat a few a day. He’d then go through his competitor’s trash cans to find burger wrappers and gauge sales.

Dude loved burgers. Then, he really loved burgers because he realized it was the best way for him to buy land and make sure his tenants (McDonald’s operators) could sell a product that paid his rent.

McDonald’s is still having the last laugh, having outperformed peer fast food brands in the past 5 years including:

• McDonald’s: +60%

• Chipotle: +37%

• Yum! Brands (Taco Bell, Pizza Hut, KFC): +52%

• RBI (Tim Hortons, Burger King, Popeyes Louisiana Kitchen): +13%

• Wendy’s: -63% (yes, minus 63%, oof...although the Wendy’s social account did call McDonald’s CEO “McNibble”...which is objectively funny)

Oh, and Mickey Ds ($233B) is worth nearly 2x all of them combined (CMG $49B + YUM $44B + RBI $33B + WEN $1B = $127B).

As for Kempczinski, someone found another video of him eating a Big Mac and Big Mac McChicken…and he is fully redeemed in my eyes for earnestly describing the burgers as if it was a wine tasting: “visual appeal”, “tempered cheese”, “beef notes” and “different mouth feel”.

Then, the piece d’resistance: his latest Instagram post is about how he’s been asking Gemini to pitch new product ideas and it suggested McRib Nuggets (!!!) and more Korean sauces. Look like McDonald’s stock has an AI narrative now and we all know about it because of the viral attention his Big Arch stunt has created.

Kempczinski learned a thing or two from HBS. Congrats, we all got played like fiddles.

Links and Memes

Some other links for your weekend consumption:

• While the burger chains were fast-food posting away…cookie brand Crumbl discovered the ever-present downside of social media food posting.

• Japan’s public transportation is so good….you get sightings of GOAT baseball players and Crown Princes.

• The DoW severing its relationship with Anthropic…did not have to happen the way it did and Dean Ball is very concerned on the long-term implications for the AI industry and political process.

• How 168 Spaniards conquered the Inca Empire…a fascinating 6-part podcast series from The Rest of History on Francisco Pizarro taking on Emperor Atahualpa in the mid-1500s.

• Two Asian doctor parents had 5 doctor kids…masterclass in Asian Household Family Maxxing.

• Anthropic is on the craziest revenue ramp…in the history of B2B tech. It’s annual run rate went from $10m (2022) to $100m (2023) to $1B (2024) to $9B (2026) to a run rate of $19B (as of March). Could very well be $30-40B by end 2026.

• Apple dropped a $599 laptop called MacBook Neo…with 8G memory, 252G storage, 13-inch screen and A18 chip. It’s $499 for students and will probably wipe a significant part of Chromebook and Windows OEM business (Asus, Dell, Lenovo). MKBHD with a solid 8-minute overview.

…and here them wild posts (including DICK’S Sporting Goods running an app promotion that shot it to the top of the Top Downloaded Free App charts next to Claude, Gemini and ChatGPT):

Today, we have to talk about Citrini Research’s uber viral AI doomer report (and a lot of rebuttals).

Also this week:

• Norway’s Sporting Secret Sauce

• Paramount Outbids Netflix For Warner Bros

• …and them wild posts (including Zillow bidding wars)

Subscribe now

Last Sunday, James van Geelen at Citrini Research (an independent macro research publication) dropped an absolute doozy of an article.

Titled “THE 2028 GLOBAL INTELLIGENCE CRISIS” — legit in ALL CAPS — the 7,200 word piece presents a fictitious article written in June of 2028. It details how rapid improvements in AI models led to chaos in the economy. Unemployment hits Great Recession levels of over 10%. The S&P 500 sells off ~40% from current all-time highs. Private market credit tanks. White-collar workers are unable to pay their mortgages and bank balance sheets crack. Trung is still making stupid memes while his portfolio gets brutally mogged.

In a preamble, James writes “This isn’t bear porn or AI doomer fan-fiction. The sole intent of this piece is modelling a scenario that’s been relatively under-explored.”

Whether or not the Citrini article is intended as “bear porn” — aka erotica for people that want to see the market implode and profit on short positions — anytime anyone prefaces something with “this isn’t supposed to be [XYZ]”, people will inevitably perceive it as [XYX]…and that is exactly what happened.

A bunch of stocks singled out in the article puked on Monday, leading to this exchange on X:

Nathan Witkin: This is insane. Market should not be reacting like this to an economically implausible sci-fi story. That it is implies deep uncertainty and confusion surrounding AI.

Nate Silver: This is fair but deep uncertainty and confusion is probably the correct response tbh. Which is not to say there aren’t firms out there with a clearer (though not necessarily correct) thesis about AI. But the median market participant doesn’t and is going to be very vibes-based.

While some of Citrini’s assumptions may be off and the conclusions a bit fantastical, no one knows what is happening right now and a well-written narrative can capture our imaginations.

Citrini certainly delivered such a narrative and there have been ~50m views thus far.

For the purpose of this write-up, I’ll flag 6 notable themes (and add related rebuttals).

1. The human intelligence displacement spiral

2. AI agents negotiate everything…driving professional services margins to near zero

3. AI agents don’t give AF about credit cards

4. India’s consulting shops are in trouble

5. The $13T residential mortgage market cracks because of white-collar unemployment

6. The government won’t be able to respond in time

Let’s discuss.

***

1. The human intelligence displacement spiral

A few weeks ago, Anthropic and OpenAI souped up their AI coding agents with two new models: Claude Code powered by Opus 4.6 and Codex 5.3, respectively.

These have been step-change improvements in AI coding.

Citrini extrapolates the progress to mid-2026. By then, AI coding agents have become so useful that every firm re-evaluates their SaaS contracts and decides if they can build altnernative internal tools. While the in-house software doesn’t replace 100% of the features, it’s good enough that there is now leverage for every SaaS contract renewal.

In response, SaaS firms have to drop prices by 15%+. This is where it gets hairy. If SaaS firms see their margins drop, they have to fire people. Once they fire people, they replace the workers with AI agents…thus funding makers of their own demise.

That is the “displacement spiral”:

What else were they supposed to do? Sit still and die slower? The companies most threatened by AI became AI’s most aggressive adopters.

This sounds obvious in hindsight, but it really wasn’t at the time (at least to me). The historical disruption model said incumbents resist new technology, they lose share to nimble entrants and die slowly. That’s what happened to Kodak, to Blockbuster, to BlackBerry. What happened in 2026 was different; the incumbents didn’t resist because they couldn’t afford to.

With stocks down 40-60% and boards demanding answers, the AI-threatened companies did the only thing they could. Cut headcount, redeploy the savings into AI tools, use those tools to maintain output with lower costs.

Citrini called out ServiceNow in this section and the stock fell 3% on Monday.

Some Rebuttals: I recently wrote on this topic in “How does Docusign have 7,000 employees?” The code itself is only part of the B2B SaaS value prop. There’s also th built-in workflows, proprietary data, network effects, compliance, customer support and opportunity costs (most firms want to focus on their core competency and are willing to pay for useful 3rd-part software solutions).

While AI coding agents will change SaaS margins, business models and revenue flows…it will take a lot longer than 1-2 years for that to play out. Inertia is a b*tch.

Also, Gavin Baker points out, there will be a compute shortage for the foreseeable future: “The world is fundamentally short both watts and wafers and it may take years to resolve these shortages…My best guess is that we would need roughly 1000x more compute for the unlikely hypothetical scenario described by Citrini to be remotely possible and the time it takes us to get there will give humans time to adjust and maximize the many potential benefits of AI."

***

2. AI agents negotiate everything…driving professional services margins to near zero

After AI agents take on software, it moves on to other white-collar tasks. By early 2027, normies have gone all in on AI agents. They start using AI agents without even thinking of them as AI agents. The same way that people binge watch Korean cooking shows on Netflix without thinking about how they are using the “cloud”.

“By March 2027, the median individual in the United States was consuming 400,000 tokens per day — 10x since the end of 2026,” Citrini writes from the future.

One major use of these tokens: AI agents negotiating 24/7/365 on behalf of its owner.

Have you ever tried to cancel a subscription with The Wall Street Journal or The Financial Times?

It’s like pulling teeth. They grind you down to the bone. I once waited 55 minutes to cancel my FT subscription and the customer support rep convinced me to renew. I got totally pwnd. I apologized for asking to unsubscribe. Demoralizing.

AI agents won’t get demoralized and that changes everything, per Citrini:

Over the past fifty years, the U.S. economy built a giant rent-extraction layer on top of human limitations: things take time, patience runs out, brand familiarity substitutes for diligence, and most people are willing to accept a bad price to avoid more clicks. Trillions of dollars of enterprise value depended on those constraints persisting.

It started out simple enough. Agents removed friction.

Subscriptions and memberships that passively renewed despite months of disuse. Introductory pricing that sneakily doubled after the trial period. Each one was rebranded as a hostage situation that agents could negotiate. The average customer lifetime value, the metric the entire subscription economy was built on, distinctly declined.

Consumer agents began to change how nearly all consumer transactions worked.

Humans don’t really have the time to price-match across five competing platforms before buying a box of protein bars. Machines do.

These relentless agents — similar to how Kyle Reese described the Terminator to Sarah Connor (“It can’t be bargained with, it can’t be reasoned with. It doesn’t feel pity! Or remorse or fear and it absolutely will not stop!... ever... until you are dead!”) — will collapse margins for travel bookings, insurance renewals, finance advice, tax prep, routine legal work and countless white-collar professions.

Citrini thinks real estate brokers are cooked:

Even places we thought insulated by the value of human relationships proved fragile. Real estate, where buyers had tolerated 5-6% commissions for decades because of information asymmetry between agent and consumer, crumbled once AI agents equipped with MLS access and decades of transaction data could replicate the knowledge base instantly. A sell-side piece from March 2027 titled it “agent on agent violence”. The median buy-side commission in major metros had compressed from 2.5-3% to under 1%, and a growing share of transactions were closing with no human agent on the buy side at all.

Any category where the value prop is “I will navigate complexity that you find tedious” gets disrupted because the Terminator agents don’t find anything tedious.

Then, Citrini comes off the top rope with a direct hit on DoorDash:

Machines optimizing for price and fit do not care about your favorite app or the websites you’ve been habitually opening for the last four years, nor feel the pull of a well-designed checkout experience. They don’t get tired and accept the easiest option or default to “I always just order from here”.

That destroyed a particular kind of moat: habitual intermediation.

Coding agents had collapsed the barrier to entry for launching a delivery app. A competent developer could deploy a functional competitor in weeks, and dozens did, enticing drivers away from DoorDash and Uber Eats by passing 90-95% of the delivery fee through to the driver. Multi-app dashboards let gig workers track incoming jobs from twenty or thirty platforms at once, eliminating the lock-in that the incumbents depended on. The market fragmented overnight and margins compressed to nearly nothing.

Agents accelerated both sides of the destruction. They enabled the competitors and then they used them. The DoorDash moat was literally “you’re hungry, you’re lazy, this is the app on your home screen.” An agent doesn’t have a home screen. It checks DoorDash, Uber Eats, the restaurant’s own site, and twenty new vibe-coded alternatives so it can pick the lowest fee and fastest delivery every time.

I used to own the URL OnlyPhans.com. Had grand plans of turning it into a Vietnamese-focused food delivery service linking users to the best Viet eats and sultry photos of steaming bowls of broth. As much as it hurts my ego, there is literally no chance my vibe-coded OnlyPhans App is getting any traction, no matter how cheap the offering.

Meanwhile, DoorDash fell 6% on the Monday after the article dropped, even though it just recently reported its best quarter yet.

Two Rebuttals:

Byrne Hobart on why DoorDash’s moat isn’t the software…it’s the multi-sided network (Link):

DoorDash is an app for ordering food, but that's worthless without the underlying network. That network used to be loose — DoorDash famously signed up restaurants without their permission, and sold their food at a discount, but now its competitive advantages are things like having a dense delivery network (including exclusive delivery deals), accumulated data on customers and riders, and the customer support infrastructure to keep all of that running at a level of quality (an implicit SLA) that consumers have come to expect.

If you order food from DoorDash, you can be very confident that in roughly the time it was promised to arrive it'll either get there in decent condition, or you'll get a credit if the order was messed up. In a world where agents are picking the best driver and restaurant, probably by interacting with other agents, who pays whom when your meal arrives and half of the appetizer mysteriously disappeared along the way? Who sees the driver rating? Does the restaurant get a bad review, or the agent? And if the agent gets a bad review, who cares!?

Ben Thompson on the stickiness of real estate broker commissions (Link):

[Citrini’s] real estate example makes the exact opposite point that the author thinks it does. The truth is that the Internet already completely obsoleted real estate agents in terms of information flow: you can go online right now and get a listing of every house for sale, with pictures, its full history, etc. There is no information asymmetry, but rather information abundance; the fact that real estate agents still exist despite that shift is actually one of the more compelling arguments that humans will be remarkably resourceful in terms of giving themselves jobs to do even in arenas where they ought to be pointless!

Furthermore, to the extent there has been any sort of compression in commissions, it’s due to the courts making it illegal to tie MLS listings to commission rates; that’s a regulatory change, not an ease-of-writing-software change, which again, makes the point that there is a lot more that goes into the economy than software and compute.

Turner Novak drops a bar (Link):

"everyone will vibe code their own DoorDash" is the 2026 version of "everything will be an NFT"

***

3. AI agents don’t give AF about credit cards

Citrini continues the onslaught.

Once the AI agents destroy margins for professional services, it’ll go after an even larger pool of cheddar: the $100B+ of interchange fees that credit card companies collect every year by charging merchants 2-3% per swipe.

AI agents don’t care about credit card rewards or brand loyalty. The world of agentic commerces cares about price and efficiency…and that’s a threat to credit cards:

Once agents controlled the transaction, they went looking for bigger paperclips.

There was only so much price-matching and aggregating to do. The biggest way to repeatedly save the user money (especially when agents started transacting among themselves) was to eliminate fees. In machine-to-machine commerce, the 2-3% card interchange rate became an obvious target.

Agents went looking for faster and cheaper options than cards. Most settled on using stablecoins via Solana or Ethereum L2s, where settlement was near-instant and the transaction cost was measured in fractions of a penny. […]

Agentic commerce routing around interchange posed a far greater risk to card-focused banks and mono-line issuers, who collected the majority of that 2-3% fee and had built entire business segments around rewards programs funded by the merchant subsidy.

This was the most insane sector-specific market reaction on Monday.

Something like ~$80B in major credit card stock market cap was wiped: Visa (-4.6%), Mastercard (-5.7%), American Express (-7.2%) and Capital One (-8.8%) all got bent over.

Payments and finance folks were viscerally offended about this section of Citrini’s piece.

To be sure, credit card firms have it very cushy with interchange fees. But a lot of that money is spent on loyalty rewards, security, chargebacks and regulatory/compliance overhead.

I have friends who spend double-digit hours a week curating their credit card points like they are playing GTA 5. Even at gunpoint, they wouldn’t give up those curated Google Sheet tabs monitoring the point-levels on 38 different credit cards. They def ain’t giving that dopamine fun up to the AI agents.

A running theme in Citrini’s piece is that the text hand-waves away the hardest challenges in building a sustainable B2B SaaS business, online marketplace or payments network.

Two Rebuttals:

Kaushik Subramanian on the limits of crypto (Link):

While that article is great, I think anyone who has worked in payments can tell you that this particular excerpt is quite absolutist.

Agents need to pay [and] in order to pay, they need some form of programmable money. That could be a card in a token vault, all of which exists today. Of course they can use crypto, but the question is why? And who would take the transaction and chargeback risk in that purchase? What about 2FA?

I don’t doubt agents will buy. But I think to presume that it can only happen with crypto has a leap to be taken, and there isn’t sufficient room to take that leap.

Alex Rampell on how digital payments will explode…and credit cards are still there to benefit (Link):

The payments market is going to massively expand over the next decade because:

1. ANYONE can now build anything digital — AI code creation means exponentially more digital SKUs that can be created and, of course, paid for. We are in the very early innings here. The gating item is just human creativity.

Combined with:

2. Almost anything that was “payroll” (paying PEOPLE) can now be “payments” (paying for THINGS). For example: “Hiring an assistant” or “hiring a paralegal” (both payroll) -> paying for a SKU.

We don’t think of ADP or Paychex as payments companies because they aren’t; they are payroll companies. Paying people != paying things.

But more tasks/outputs that were once only available through “paying for people” now become available for purchase on a credit or debit card. This is already starting to happen and accelerate.

***

4. India’s consulting shops are in trouble

This section may have been the consensus “most likely scenario” prediction from the piece:

[India’s] IT services sector exported over $200 billion annually, the single largest contributor to India’s current account surplus and the offset that financed its persistent goods trade deficit. The entire model was built on one value proposition: Indian developers cost a fraction of their American counterparts.

But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity. TCS, Infosys and Wipro saw contract cancellations accelerate through 2027. The rupee fell 18% against the dollar in four months as the services surplus that had anchored India’s external accounts evaporated. By Q1 2028, the IMF had begun “preliminary discussions” with New Delhi.

The reason this prediction rang true to many is that…IT KIND OF ALREADY IS HAPPENING.

On the Monday after the Citrini piece, Tata Consulting Services (0.45%), Infosys (-1.86%) and Wipro (-1.89%) were down but nothing wild. But these same stocks have all declined by 17%-25% so far in 2026.

The above excerpt did have one strong Rebuttal, specifically addressing the idea that the marginal cost of AI will be “the cost of electricity” (which is a crucial stat for the piece, because high marginal costs will be an obstacle to widespread AI agent usage):

Daniel Jeffries on the true marginal cost of AI agents (Link):

The marginal cost of a coding agent is not even remotely close to “the cost of electricity.”

These agents are absurdly expensive to use and run. Why do you think AI labs are banning people from having multiple $200 subscriptions? Because those subscriptions are heavily, heavily discounted to drive demand. Why did labs stop folks from using their subscription costs in OpenClaw?

The OpenClaw guy had five max subs and was losing 20k a month building and running his amazing project (because he was retired and had the money to set in fire) before AI labs banned this practice of having multiple subs.

In case you just missed it: Because these agents are expensive as hell to run.

The cost of running coding agents daily on eight hour shifts is thousands of dollars a month at API pricing and that is subsidized too…That’s not even agents running 24x7 “making money while you sleep” which is utter and total nonsense. This is one of the most spectacularly unprofitable businesses in history so far.

***

5. The $13T residential mortgage market cracks because of white-collar unemployment

Citrini pivots his predictions from the micro (company level) to the macro (wider economy).

The Human Intelligence Displacement Spiral we talked about earlier leads to wide layoffs. White-collar workers in pricey real estate markets now have to service their loans while doing gig work.

This cycle could impair $13T in residential mortgages:

Every prior mortgage crisis in US history has been driven by one of three things: speculative excess (lending to people who couldn’t afford the homes, as in 2008), interest rate shocks (rising rates making adjustable-rate mortgages unaffordable, as in the early 1980s), or localized economic shocks (a single industry collapsing in a single region, like oil in Texas in the 1980s or auto in Michigan in 2009).

None of these apply here. The borrowers in question are not subprime. They’re 780 FICO scores. They put 20% down. They have clean credit histories, stable employment records, and incomes that were verified and documented at origination. They were the borrowers that every risk model in the financial system treats as the bedrock of credit quality.

In 2008, the loans were bad on day one. In 2028, the loans were good on day one. The world just…changed after the loans were written. People borrowed against a future they can no longer afford to believe in. […]

They could still make the mortgage payment, but only by stopping all discretionary spending, draining savings, and deferring any home maintenance or improvement. They were technically current on their mortgage, but just one more shock away from distress, and the trajectory of AI capabilities suggested that shock is coming. Then we saw delinquencies begin to spike in San Francisco, Seattle, Manhattan and Austin, even as the national average stayed within historical norms.

We’re now in the most acute stage. Falling home prices are manageable when the marginal buyer is healthy. Here, the marginal buyer is dealing with the same income impairment.

A consistent criticism of Citrini’s piece is that it presents a world in which AI compresses margins for businesses…but doesn’t take the extra step to ask, “If the price of goods and services are dropping via technology-driven deflation, wouldn’t a large part of the economy benefit?”

Citrini calls the disconnect Ghost GDP:

When cracks began appearing in the consumer economy, economic pundits popularized the phrase “Ghost GDP“: output that shows up in the national accounts but never circulates through the real economy.

In every way AI was exceeding expectations, and the market was AI. The only problem…the economy was not.

In a Rebuttal, Michael Bloch shows how Citrini’s assumptions of AI progress could just as easily yield positive economic results:

Consumers spend less for more and have ample room to pay their mortgages:

Meanwhile, the purchasing power math was working in homeowners’ favor. A household whose income dropped 10% but whose non-housing expenses dropped 20% was better positioned to make mortgage payments, not worse. Debt-to-income ratios actually improved for many households despite nominal income softness, because the denominator in their monthly budget (everything besides the mortgage) had shrunk.

Delinquencies ticked up in exactly the ZIP codes the bears identified — San Francisco, Seattle, Austin, Manhattan — and peaked at levels that were mildly concerning but never approached systemic. The 30-day delinquency rate for prime mortgages reached 2.1% in Q1 2028, up from 1.2% in 2025, well below the 5%+ levels that would signal structural impairment. By the time we’re writing this, it’s already declining.

Laid-off workers had easier routes to become entrepreneurs:

But the bears made an assumption that turned out to be wrong: that displaced white-collar workers would remain displaced.

What happened instead was faster and messier than anyone predicted. The same AI tools that eliminated certain roles also made it dramatically cheaper to start things. The cost of launching a business — software, legal, accounting, marketing, design — fell by 70-80% in eighteen months.

New business formation exploded. The Census Bureau reported 7.2 million new business applications in 2027, shattering the prior record of 5.5 million set in 2021. The majority were filed by recently displaced professionals who now had the skills, the tools, and the extremely low overhead to build something on their own.

Also worth flagging that B2B SaaS — despite the UX horrors it brings us everyday — makes up less than 0.5% of America’s GDP. That first industry to get clapped by AI agents won’t be enough to crater residential mortgages in 2 years.

***

6. The Government won’t be able to respond in time

Finally, Citrini writes that the speed and nature of the AI disruption will be difficult for the government’s existing policy tools to address:

Labor’s share of GDP declined from 64% in 1974 to 56% in 2024, a four-decade grind lower driven by globalization, automation, and the steady erosion of worker bargaining power. In the four years since AI began its exponential improvement, that has dropped to 46%. The sharpest decline on record.

The output is still there. But it’s no longer routing through households on the way back to firms, which means it’s no longer routing through the IRS either. The circular flow is breaking, and the government is expected to step in to fix that.

As in every downturn, outlays rise just as receipts fall. The difference this time is that the spending pressure is not cyclical. Automatic stabilizers were built for temporary job losses, not structural displacement. The system is paying benefits that assume workers will be reabsorbed. Many will not, at least not at anything like their prior wage. During COVID, the government freely embraced 15% deficits, but it was understood to be temporary. The people who need government support today were not hit by a pandemic they’ll recover from. They were replaced by a technology that continues to improve.

The widespread unemployment will fray the social fabric and turn AI labs into enemy #1.

In a Rebuttal titled “Contra Citrini7”, John Loeber thinks that Citrini underestimates the potential for the US government to re-organize the economy and deal with potential AI-induced mass unemployment:

[On] preventing a market meltdown the way Citrini imagines is actually pretty easy, and the federal government’s response during Covid showed how proactive and aggressive it is willing to be. I’d expect large-scale stimulus to kick in quickly once needed. It slightly irks me to say that it won’t be efficient, but that’s also not the point. The point is material prosperity for people in the course of their lives — broad consumer well-being that legitimizes the state and carries forth the social contract — not satisfying the accounting metrics or economic norms of the past. If we are nimble and responsive to this slow but sure technological revolution, then we will be fine. […]

My prediction is that as AI challenges white-collar labor, the political path of least resistance will be funding large-scale re-industrialization in the form of employment megaprojects which, thankfully, are not subject to a singularity but rather move at the friction-heavy speed of getting things done in the physical world. We'll build bridges again.

People will find it gratifying to see the fruits of their labor in the real world, not in digital abstractions. The Senior PM at Salesforce that loses their $180K job might find a new job in the field at the California Desalination Works, to finally, finally, end the 25-year drought. And it shouldn't be good enough, but excellent. And once it is built, it must be maintained! Once more, Jevons Paradox can apply, if you allow it to.

Meanwhile, Tyler Cowen breaks down why there won’t be a demand problem if AI is delivering super-high productivity growth (think GDP growth of 10%+ a year):

If AI produces a lot more stuff, income is generated from that and the economy keeps going, whether or not the resulting distribution pleases your sense of morality. Along the way, prices adjust as need be. If unemployment rises significantly, prices fall too, all the more. I am not saying everyone ends up happy here, but you cannot have a) a flood of goods and services, b) billions accruing to the AI owners, without also c) prices are at a level where most people can afford to buy a whole bunch of things. Otherwise, where do you think all the AI revenue is coming from? The new output has to go somewhere…

Besides, why assume that “the machines” here are reaping all the surplus? Are they the scarce factor of production? Maybe it is hard to say in advance, but do not take any particular assumptions for granted here, ask to see them spelt out. One simple scenario is that the regions with energy and data centres become much wealthier, and people need to move to those areas. Maybe they do not do this quickly enough, a’la our earlier history with the Rust Belt. That is a problem worth worrying about, but it is nothing like the recent collapse concerns that have been circulating.

On the redistribution front, Alexander Campbell has thoughts on how governments will have to change tax systems. If capital takes more share of GDP, then we may have to refocus the tax base away from labor to capital and compute (“If AI collapses labor’s share of GDP, a tax system built on taxing labor income is dead. Tax capital directly. Not punitive, just following the money.”)

If you’re really fixing for more macro-economic Rebuttals, enjoy this point-by-point takedown by Citadel Securities (aka one of the world’s largest market makers) titled… wait for it…“The 2026 Global Intelligence Crisis”. Honestly, kind of insane they felt compelled to respond. Speaks to the wild uncertainty of the current moment.

***

Final Thoughts

Go read the Citrini piece if you haven’t.

I didn’t talk about the section on how private equity will blow up because of its significant enterprise SaaS investments that go bust.

Blackstone, KKR and Apollo all got clapped on Monday after the article.

In the past two weeks, we have now had two nuclear viral AI doomer articles.

The concluding bit of Citrini’s article talks about the commoditization of intelligence (and I think it points to why these doomer narratives keep going viral:

For the entirety of modern economic history, human intelligence has been the scarce input. Capital was abundant (or at least, replicable). Natural resources were finite but substitutable. Technology improved slowly enough that humans could adapt. Intelligence, the ability to analyze, decide, create, persuade, and coordinate, was the thing that could not be replicated at scale.

Human intelligence derived its inherent premium from its scarcity. Every institution in our economy, from the labor market to the mortgage market to the tax code, was designed for a world in which that assumption held.

We are now experiencing the unwind of that premium. Machine intelligence is now a competent and rapidly improving substitute for human intelligence across a growing range of tasks. The financial system, optimized over decades for a world of scarce human minds, is repricing. That repricing is painful, disorderly, and far from complete.

This is the most important premise in the piece.

It might not be 1-2 years. But, within a decade? Seems reasonable and the availability of human intelligence on tap (or as Dario says, “a country of geniuses in a data centre”) will change every facet of society.

The only consensus as to how this unfolds…is that there is no consensus (and we are all out here making wild ass guesses).

“The fact that a piece of AI science fiction rocked the stock market this week is a clear indication that absolutely no one knows how the next few years will go,” writes Derek Thompson.

Thompson elaborates:

I do not mean that AI architects are stupid. I do not mean that their speculation is absurd or worthless. I certainly do not mean that they don’t have access to narrow truths, such as rising adoption of AI in general and autonomous “agents,” in particular.

What I mean is that the frontier labs don’t really know what they’re building exactly, and economists don’t know how to model the thing that they claim they’re building. As a result, nobody really knows what is going to happen with AI this year, or next year, or the year after. There is no secret cigar-filled room of elites who have unique access to some authentic postcard from the future.

And a compelling narrative will fill the void, especially with so many of the AI industry’s deciders congregated on X waiting to fling around hot takes (for real, 500-1000 of the most important people funding and building our AI future are addicted to the artist formerly known as Twitter and posting non-stop).

For three days, people were cooking Citrini Research for saying — if we take the least charitable take — that DoorDash and Visa were done because your grandma could vibe code a replacement.

Then, Thompson’s perspective that “no one knows” was hammered home on Thursday when Jack Dorsey announced that Block was firing 40% of the company (headcount fell from 10,000 to 6,000).

Dorsey cited AI: "The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week."

The timeline filled with competing takes on whether it was a proper rightsizing after mismanagement (recall that Dorsey ran Twitter and that company is now 80% smaller in terms of headcount post-Elon). Or if the Block cuts were truly for AI efficiency gains…Dorsey even jumped in on X to clarify the point.

Block gained +25% on the news, which means other CEOs may want to copy the playbook and cite AI whether or not it’s the real reason (aka “AI washing”).

Whatever the rationale behind the Block case, there will absolutely be more viral AI doomer stories and viral “AI is breaking the economy” stories to come.

Some joker is probably writing a “State of the Market June 2029” article predicting the end of Wendy’s because AI agents only like round burger patties.

I will read it (and probably buy call options on Burger King and McDonalds).

I will read them all and try to keep a level head about it.

But just in case the AI agent doomer bear porn is true, I recently went down to the Apple Store…

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Norway’s Sporting Secret Sauce

Norway won the most Gold (18) and total medals (40) at Milan Winter Olympics.

It’s the 4th straight Olympics that Norway has topped the list…in a country of only 5.6 million people.

Yes, a lot of those medals were in cross-country skiing.

But there’s clearly something going on up there.

Author Brad Stulberg has a great explainer, and a major part is how Norway approaches Youth Sports (very different than in North America):

1. Scorekeeping:

In the US: Youth sports tend to be hyper competitive even at early ages. Leagues almost always keep score.

In Norway: Scorekeeping isn’t even allowed until age 13.

Removing winners and losers keeps the focus on the process not outcomes. It keeps kids engaged longer because it minimizes pressure (and tears) and maximizes fun, learning, and growth. The goal isn’t to win a third grade championship. It’s to love sport and keep playing.

2. Trophies:

In the US: If you give everyone a trophy, you’re creating snowflakes who will never gain a competitive edge.

In Norway: Whenever trophies are awarded, they are handed out to everyone.

If getting a trophy makes young kids feel good, we should give them trophies. Maybe they’ll come back and play again next year!!

As for the creation of snowflakes with no competitive edge — Norway’s athletes are tough as nails and all they do is win.

3. Prioritizing Fun:

In the US: Far too often, the goal is to win.

In Norway: The national philosophy is “joy of sport.”

Youth sports in the US are driven by adults, ego, and money. Youth sports in Norway are driven by fun.

Only half of kids in the US participate in sports. The number one reason they drop out: because they aren’t having fun anymore. In Norway, 93% of kids participate in youth sports. Fun is the foremost goal.

4. Playing Multiple Sports:

In the US: There’s pressure to specialize early and play your best sport year round.

In Norway: Try as many sports as you can before specializing as late as college.

Norway encourages kids to try all types of sport. This reduces injury and burnout and increases all-around athleticism. It also helps promotes match quality, or finding the sport you are best suited for as your body develops, which is impossible if you commit to a single sport too early.

5. Affordability

In the US: There is increasingly a pay-to-play model with high fees for leagues, equipment, and travel. This excludes many kids from playing.

In Norway: It’s a national priority to keep youth sports affordable and therefore accessible for all.

Kids aren’t priced out, which creates opportunities for everyone to participate (and develop into athletes), regardless of their parents’ income level.

For Norway, the Olympics sporting success maintains a streak of impressive counting stats, including a dynamic UX landing page for its sovereign wealth fund (which keeps real-time tracker of value).

It’s now ~$2T and owns 1.5% of global equities (worth $357k per citizen and up more than 6,000x since the fund received $300m in 1996…from off-shore oil revenue first found in 1969).

About 3% of the fund is spent every year for the country’s infrastructure and that no doubt helps the sporting results. But Norway’s Olympic outcomes outperform even on a per capita dollar spent basis.

Anyway, Nicolai Tangen — the CEO of Norwegian Sovereign Wealth Fund — was recently on The Knowledge Project podcast and dropped some management alpha.

Tangen keeps an ice cream stand by his office so people randomly come and he just catches up with them. Says ROI on the ice cream is in the 1000x.

Another high ROI move is being the CEO of a $2T fund…because that might be the best hack ever for getting people on your podcast (Tangen’s In Good Company podcast is very good…check this one with Stanley Druckenmiller).

Paramount Outbids Netflix For Warner Bros

What a roller coaster!

Paramount and the Ellisons have officially outbid Netflix to buy Warner Bros. studio and cable assets. The deal values Warner Bros at $82B and Paramount will also take on the company’s ~$30B in debt.

To close the deal, the combined Paramount and Warner Bros will see a net debt of $70B…which is why they are already talking about $6B in cost savings “synergies” and — after briefly freaking out about Netflix’s commitment to the theatre system — Hollywood actors, agents, writes and directors are now freaking out about Paramount cuts (Ellison has committed to release a juicy 30 films a year).

The new Ellison empire is formidable. It has CNN and CBS News. Dozens of TV networks. All of March Madness. The UFC. And IP galore:

• Paramount: Star Trek, Mission: Impossible, Transformers, SpongeBob SquarePants, South Park, PAW Patrol, Top Gun, and the “Sheridan-verse” (Yellowstone, which they keep even after the director moves to Universal).

• Warner Bros: DC Universe (Batman, Superman, Wonder Woman), Harry Potter, Lord of the Rings, The Matrix and the legendary HBO (Sopranos, The Wire, Succession, Silicon Valley etc)

Please please please give us a mash-up between South Park, The Sopranos and Paw Patrol.

As discussed on the The Town podcast, this deal will have to still go through anti-trust review but the Ellisons closeness to the current White House suggests they’ll pull it off. European and state regulators can still gum it up, though.

With a combined 219m subscribers (some are def double counted), Paramount+ and Max can legit give Disney+, Netflix and Prime a run for their money.

The undoubted winner of all: Warner Bros Discovery CEO David Zaslav. He walks with a $500m+ golden parachute payout AND got Paramount to pay Netflix a $2.8B deal termination fee out of its coffers (BTW, $2.8B was straight profit and equal to 25% of Netflix’s entire profit of $11B in 2025).

That’s a solid consolation prize for co-CEOs Ted Sarandos and Greg Peters…and they could do the funniest thing ever with those funds.

Back to Zaslav, he originally ran the Discovery cable network between 2006 and 2022, overseeing a GOAT-level run on personality-driven reality TV delirium: Deadliest Catch, Mythbusters, 90-Day Fiancee, Jon & Kate Plus 8, Property Brothers and Fixer Upper etc.

When A&T failed its Warner Bros project, Zaslav was waiting to graduate to films and make real hay in Los Angeles.

I imagined Zaslav was thinking, “I gotta level up from this TV slop and go full Hollywood, including buying the 8-figure mansion formerly owned by Hollywood legend and Paramount producer Robert Evans…who was instrumental in getting The Godfather made.”

Well, he did all of that.

Because, in 2022, Zaslav spearheaded the merger of Discovery with WarnerMedia and became the CEO of Warner Bros. Discovery. The plan was to take Discovery’s assets and combine with with Warner’s legendary IP into a Netflix competitor.

The strategy looked bust by early 2025.

Weighed down by debt and the dying TV cable bundle, the value of Warner Bros. Discovery sank by more than half from its IPO to ~$20B.

Enter David Ellison.

Along with his father Larry’s $200B backstop, David had a mission to build a next-generation media, streaming and technology juggernaught (Oracle + a TikTok stake + Paramount + AI stuff).

Last summer, he closed a deal for Paramount and immediately set his sights on Warner Bros. By combining Paramount+ with Max, he could create a scale streaming service to take on Netflix.

As we all know, Netflix wasn’t going to let that happen lying down.

What ensued was a bidding war that saw ~10 bids over 4 months. Most of it was Paramount just pumping the price.

Netflix’s best offer was $72B equity for just the Warner Bros film and TV studio. The cable TV assets were to be spun off this fall. Paramount long held it had the better deal because Netflix was overvaluing the value to shareholders of those cable assets.

Ultimately, the potential spin off was moot. Paramount eventually pushed its offer valuing Warner Bros at $50B (including debt) to $82B of equity (and $110B enterprise value overall).

The 66-year old Zaslav was able to juice the value of Warner Bros, all while Netflix and Paramount both saw sell-offs of 30%+ (shareholders terrified by the debt).

Dude legit pulled a rabbit out the hat.

Paramount & Warner Bros is a major player but they still have a tough hill to climb…

Links and Memes

Anthropic vs. Department of War: As I write this, there is an ongoing dispute between Anthropic and Secretary of War Pete Hegseth. Anthropic has specific terms of services that disallow: 1) mass surveillance; and 2) use of its technology for fully autonomous machines that can kill (without a human in the loop).

The tension is over whether a private company can limit the scope of government national security requirements. Secretary Hegseth wants those terms removed and is threatening some very powerful policy tools to get the outcome.

This is a very very important issue with the power of AI and its use on the battlefield.

On Friday afternoon, Secretary Hegseth labelled Anthropic a supply-chain risk — a tool meant for foreign adversaries — and President Trump issued an order giving government agencies 6 months to move to other providers (OpenAI and xAI have agreed to Department of War’s conditions).

“Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic,” Hegseth wrote on X. “Anthropic will continue to provide the Department of War its services for a period of no more than six months to allow for a seamless transition to a better and more patriotic service.”

Dario Amodei may still continue discussions in coming days. But, right now, Anthropic is on the way out and the implications are massive. The government is only responsible for $200m of Anthropic’s total $15B+ revenue. But any contractor working with the government may have to choose between that public contract and the AI lab.

One major example: Amazon — which owns 15-20% of Anthropic (and serves its models) — and has a multi-billion government contract with AWS. Google and Microsoft also serve Anthropic…while also being government contractors. How will this shake out?

Anthropic responded by saying that the “supply chain risk” only legally applies to Department of War contracts. Meanwhile, OpenAI has struck an agreement the government to deploy across the government’s classified networks.

More updates to come but here are key links:

• Zvi Moshowitz has a round-up of positions from major players involved.

• Palmer Luckey explains how terms of services allow corporations with unelected leaders to potentially dictate national security objectives (and why he is against them doing so)…notably, Anthropic had previously chosen to deeply embed into the government’s classified networks and allow the model use for defense up to everything (except for the red lines it has since drawn).

• Dean Ball believes this sets a very bad precendent and an overreach by the government (if the government doesn’t want to work with Anthropic, it can choose not to do so…but doesn’t have to hit the company severe penalties: “The way to enforce this principle is to publicly and proudly decline to do business with firms that don’t agree to those terms. Cancel Anthropic’s contract, and make it publicly clear why you did so.”)

• Just Another Pod Guy makes the point that no matter how one feels about the terms of service, the government can escalate to restricting GPUs if deemed national security…which is the ultimate ace in negotiations with the AI labs.

• Beff Jezos discusses how the effective altruists were pushed out of OpenAI (and still primarily operate in Anthropic)…and how that’s all potentially playing into all of this.

***
Some other links for your weekend read:

• Some made a game called “Data Centre” on Steam…imagine first-person shooter games with cables and server racks instead of guns. We are reaching new levels of AI hype.

• A guy accidentally got control of 7,000 DJI robot vacuums…because he wanted to hack the one he bought to run on a PS5 controller LOL.

• Floyd vs. Manny 2…Netflix got the two legendary boxers to fight for a 2nd time at the Sphere in September. The news reminded me of that time Manny bumped into Floyd at a Lakers game a few year after their 2015 fight (they split $400m) and just looked at each like “bro, we made so much money”

• Investing legend Stanley Druckenmiller…did a 30-minute with Morgan Stanley and talked about his “invest then investigate” approach as it relates to Nvidia. He made a bet without even knowing “its earnings” because smart people in his network mentioned it. Then, as he learned more, kept doubling. Made a 6x in a few years but said he exited too soon. He self-deprecatingly says he IQ isn’t top top, but his superpower is knowing when to “pull the trigger”. Great chat.

• Prediction platform Kalshi banned and fined…one of MrBeast’s producers for trading on insider information related to a prediction market about the mega-YouTuber.

• Burger King is launching this AI chatbot called “Patty”…that talks to employees through the headset. The AI clarifies what to cook and reminds the employee to say “Welcome to Burger King”, “please” and “thank you” to customers during interaction points. What are we doing here?

…and them wild posts:

• The Rise of Chinese Humanoid Robotics

• RIP Robert Duvall (The Godfather, Apocalypse Now legend)

• …and them wild posts (including the Milan Winter Olympics)

When will we know that artificial general intelligence (AGI) is here? Obviously, I am not qualified to answer this question.

Anytime someone asks me, I just send them this GIF:

The sight of Russell Crowe’s Oscar-winning performance immediately changes the topic. Me and my interlocutor start swapping random quotes from Gladiator (“AM I NOT MERCIFUL!?!”) and talk about how Ridley Scott definitely should not have made a sequel with sharks swimming in the Colosseum.

But you know who is qualified to answer the question? Google DeepMind’s Demis Hassabis.

Last year, Lex Fridman asked Demis a question about AGI and how the discovery of such a breakthrough could parallel the famous “Move 37”.

A quick refresher: a decade ago, DeepMind created an AI to play the game Go. It was called AlphaGo. In 2016, AlphaGo took on South Korean Go legend Lee Sedol. During the second game of their match, AlphaGo pulled off a genius non-intuitive play on the 37th move. This move demonstrated AlphaGo’s machine creativity and Sedol was so shook by it that he stepped away from the table.

Lex Fridman: You’ve estimated that we’ll have AGI by 2030, so there’s interesting questions around that. How will we actually know that we got there and what may be the “Move 37” of AGI.

Demis Hassabis: My estimate is sort of a 50% chance in the next five years. So, by 2030 let’s say. I think there’s a good chance that that could happen.

Part of it is what is your definition of AGI? Of course, people arguing about that now and mine is quite a high bar and always has been.

Can we match the cognitive functions that the brain has? We know our brains are pretty much general Turing machines. We created incredible modern civilization with our minds [and that] speaks to how general the brain is.

For us to know we have a true AGI, we would have to make sure that it has all those capabilities. It isn’t kind of a jagged intelligence where some things it is really good at but other things it’s really flawed at. That’s what we currently have with today’s systems. They’re not consistent. You’d want that consistency of intelligence across the board.

Then, we have some missing capabilities. Like the true invention capabilities and creativity that we were talking about earlier. So you’d want to see those. How would you test that? I think you just test it. One way to do it would be kind of a brute force test of tens of thousands of cognitive tasks that we know that humans can do.

Maybe also make the system available to a few hundred of the world’s top experts. The [math genius] Terence Tao of each subject area and give them a month or two and see if they can find an obvious flaw in the system. If they can’t, then I think you can be pretty confident we have a fully general system. […]

I think there are [also] the sort of lighthouse moments like the “Move 37” that I would be looking for. One would be inventing a new conjecture or a new hypothesis about physics like Einstein did. Maybe you could even run the back test of that very rigorously. Have a cut-off [date] of 1900 and then give the system everything that was written up to 1900 and then see if it could come up with special relativity and general relativity, right? Like Einstein did. That would be an interesting test.

Another one would be: can it invent a game like Go? Not just come up with a “Move 37” — [which was] a new strategy — but can it invent a game that is as deep and aesthetically beautiful and as elegant as Go?

Those are the sorts of things I would be looking out for.

This framing of a “Move 37” lighthouse moment is very useful.

Just scrolling through X every day, I frequently see people shocked by some of the current AI’s jagged intelligence capabilities. I’m sure many have felt some form of “Move 37”.

Sure, we are in a hyperbolic hype cycle. There’s also the issue of “I spent 10 hours with a sycophantic chatbot that convinced me I discovered new physics that would make Einstein shit his pants”.

With those caveats, let me tell you the “Move 37” lighthouse moment I’m looking for to see if AGI is here: the major AI labs talk about how they ditched Slack and built an internal messaging tool.

Why? Because communications and co-ordination are massive human bottlenecks…yet the top AI labs (and their thousands of employees) are all running on Slack, which has obvious drawbacks.

If AGI was truly here, it probably isn’t using Slack as the best way to run a cutting-edge AI research organization.

Everyone knows what I’m talking about…the 27-step Slack derangement journey:

1. Wow, this is so much better than email.

2. Real-time communication!

3. Wow, you can send GIFs.

4. I can just DM anyone and make new custom group chats. Amazing.

5. Hahaha, there’s a water cooler channel just for #memes. So funny.

6. #announcements is an awesome way to get to know your colleagues.

7. Can’t believe the CEO just hopped in and started chatting in that Huddle.

8. Dope, you can create channels with external parties to work on projects.

9. Slack Connect is next level. The Salesforce integration just pings us sales pipeline updates and my team’s Google Calendar is all sync’d up.

10. Whoa, slow down. Stop adding me to new threads.

11. Search is awful.

12. Everyone, please put actual announcements in the new #RealAnnouncements channel.

13. Mute, Mute, Mute, Mute. [Turn off Slack Notifications].

14. Think my manager is linking my un-reads to the next promotion cycle.

15. Uh oh, I went on vacation for a week and am now 8,765 messages behind.

16. Where the hell is the file I sent?!?!

17. These notifications are getting a bit absurd.

18. Incredible, another Slack channel created so people can do pretend work.

19. We are shutting down #announcements and #RealAnnouncements. Please direct all real announcements to #RealAnnouncementsOnlyNoReplies.

20. Why I am getting a notification at 10pm on a Saturday?!?!?! My status is DND!!

21. Holy crap, they just pivoted the entire company’s strategy under a GIF in a thread from two weeks ago in the #memes channel and I missed it because it was on mute.

22. STFU Slackbot.

23. SLACK means “Searchable Log of All Communication and Knowledge”…then why dafuq can I not SEARCH LOGS OF ALL COMMUNICATION AND KNOWLEDGE??!?!?!!

24. I quit.

25. Man, I hope this new company doesn’t do Slack.

26. [Click Here to Create a Microsoft Teams Account]

27. F********CK YOU!!!!!!!

Sorry, where was I? Right. The top AI labs run on Slack even though there clearly has to be a better solution for communication, co-ordination and messaging.

But here we are.

In a piece from July 2025 titled “Reflections on OpenAI”, Calvin French-Owen — who spent a year at OpenAI helping to launch Codex — gave an inside look at how the company operates (side note: French-Owen previously sold Segment to Twilio for $3.2B, which just shows how insane the talent level is at the leading AI labs).

Here was a viral nugget:

An unusual part of OpenAI is that everything, and I mean everything, runs on Slack. There is no email. I maybe received ~10 emails in my entire time there. If you aren’t organized, you will find this incredibly distracting. If you curate your channels and notifications, you can make it pretty workable.

What about Anthropic?

A recent New Yorker profile of Anthropic had 7x mentions of Slack, including how they operated an internal AI-powered vending machine.

While that may not be proof that AI lab runs on Slack, how about this Anthropic blog post from October that announced a new Salesforce integration…and it literally says “Salesforce deploys Claude Code, Anthropic runs on Slack”.

Looking at Slack’s AI-related feature suite actually gives an idea of what an AI-first messaging tool would be.

Slack’s model context protocol (MCP) serve lets third-party AI assistants (Claude, Perplexity) securely read, search, and analyze user messages, threads, and channels.

I’ve seen people from AI labs talk about asking the Slack MCP to catch them up on projects and find blockers.

Speaking of Anthropic and Slack, there’s also a bit from the New Yorker piece:

Anthropic’s headquarters, in downtown San Francisco, sits in the shadow of the Salesforce tower. There is no exterior signage. The lobby radiates the personality, warmth, and candor of a Swiss bank. A couple of years ago, the company outgrew its old space and took over a turnkey lease from the messaging company Slack. It spruced up the place through the comprehensive removal of anything interesting to look at. Even this blankness is doled out grudgingly: all but two of the ten floors that the company occupies are off limits to outsiders. Access to the dark heart of the models is limited even further. Any unwitting move across the wrong transom, I quickly discovered, is instantly neutralized by sentinels in black.

Anthropic runs on Slack and in its old building. So poetic.

Also, the company’s CEO Dario Amodei recently went on the Dwarkesh podcast and talked about how he uses Slack to help keep every employee on the same page vis-à-vis the company’s culture and mission (he spends 30-40% of his CEO time on these areas):

In front of the company every two weeks, I have a three or four-page document and I just talk through three or four different topics about what’s going on internally.

The models we’re producing. The products. The outside industry. The world as a whole as it relates to AI…and geopolitically, in general. Just some mix of that.

I go through very honestly and I say, “This is what I’m thinking, and this is what Anthropic leadership is thinking.”

Then, I answer questions.

That direct connection has a lot of value that is hard to achieve when you’re passing things down the chain six levels deep.

A large fraction of the company comes to attend, either in person or virtually. It really means that you can communicate a lot.

The other thing I do is I have a channel in Slack where I just write a bunch of things and comment a lot. Often that’s in response to things I’m seeing at the company or questions people ask. We do internal surveys and there are things people are concerned about, and so I’ll write them up.

I’m just very honest about these things. I just say them very directly. The point is to get a reputation of telling the company the truth about what’s happening. To call things what they are. To acknowledge problems. To avoid the sort of corpo speak. The kind of defensive communication that often is necessary in public because the world is very large and full of people who are interpreting things in bad faith.

But if you have a company of people who you trust — and we try to hire people that we trust — then you can really just be entirely unfiltered.

For xAI, this article on how the lab employs 900 “AI tutors” says the process is mediated through Slack.

Meanwhile, former Google DeepMind engineer Aleksa Gordić was not a fan of the lab’s use of Slack:

[In 2023, DeepMind] was already bloated (~1200 people, now it’s more like 5000–7000), the culture significantly broken (e.g. memes were being removed from internal Slack channel because they “offended” someone), and I couldn’t freely move around to work on stuff that actually interested me.

As I was explaining earlier, these #memes Slack channels are absolute menaces to corporate productivity.

But, sometimes, be careful what you wish for…because this chart of Teams milking its Microsoft distribution to overtake Slack goes viral once a month (although, the supposed distribution advantage — despite a shittier product — has done absolutely nothing for Copilot in AI…and Slack is kind of having the last laugh right now by being AI labs go to messaging app).

Anyway, everyone knows the pros and cons of Slack. Everyone also knows that if you were to build a corporate messaging and communications platform from scratch in the age of AI, it is going to look different than Slack.

Back in November, economist Tyler Cowen just straight up asked Sam Altman why they don’t build an internal Slack alternative:

COWEN: Someone put an essay online, and it said, in all the time they worked at OpenAI, they hardly ever sent or received an email, that so many things were done over Slack. Why is that? What’s your model of why email is bad and Slack is good for OpenAI?

ALTMAN: I’ll agree, email is bad. I don’t know if Slack is good. I suspect it’s not. I think email is very bad. The threshold to make something better than email is not high, and I think Slack is better than email. We have a lot of things going on at the same time, as you observed, and we have to do things extremely quickly. It’s definitely a very fast-moving organization. There are positives about Slack, but there’s also…I dread the first hour of the morning…the last hour before I go to bed, where I’m just dealing with this explosion of Slack.

I think it does create a lot of fake work.

I suspect there is something new to build that is going to replace a lot of the current office, productivity suite. Whatever you think of Docs, Slides, email, Slack.

[It] will be the AI-driven version of all of these things, not where you tack on the horrible  —  you accidentally click the wrong place and it tries to write a whole document for you or summarize some thread or whatever — but the actual version of you trusting your AI agent and my AI agent to work most stuff out and escalate to us when necessary.

I think there is probably finally a good solution for someone to make within reach.

COWEN: How far are you from having that internally? Maybe not a product for the whole world — not one that is in every way tested — but that you would use it within OpenAI?

ALTMAN: Very far. But I suspect just because we haven’t made any effort to try, not because the models are that far away.

COWEN: Since talent, time, human capital is so valuable within your company, why shouldn’t that be a priority?

ALTMAN: Probably we should do it, but people get stuck in their own ways of doing things, and a lot of stuff is going very well right now. There’s a lot of activation energy for a big new thing.

So, Sam knows that Slack isn’t the ideal answer. He also knows that OpenAI’s LLM could create a better solution. He thinks they “probably should do it”. But inertia is such a powerful force that doing so would be a distraction.

That was kind of the main point of my article last week (“How Does Docusign have 7,000 employees?”) about why traditional SaaS won’t just disappear overnight in the upcoming AI agent wave.

Employees and their workflows don’t like change.

Meanwhile, Slack is running 100mph to make sure its the AI-native corporate messaging platform.

Doing a side quest is very costly.

Famously, Uber tried to build its own internal Slack in the mid-2010s. The company had 30,000+ employees at the time and didn’t think Slack could handle its millions of daily messages. The system was called uChat and built on top of Mattermost, and open-source Slack alternative. By 2020, Uber was back on Slack.

Still, Professor Cowen’s point above is incredibly valid: “Since talent, time, human capital is so valuable within your company, why shouldn’t [creating a better Slack] be a priority?”

That’s why I believe a “Move 37” for the arrival of AGI will be some reveal that the leading AI labs are using a new internal AI-powered communication system.

Let’s call it the “Slack AGI Test” (mostly because that’s the title I gave this article before writing it and I figured I should have the title somewhere in the text).

Anyway, OpenAI and Anthropic have already automated a ton of the coding work and are headed to a world in which AI agents create 100% of the code.

AI policy advisor and researcher Dean Ball recently wrote that “the pace of [AI coding] automation will grow during the course of 2026, and within a year or two the effective ‘workforces’ of each frontier lab will grow from the single-digit thousands to tens of thousands, and then hundreds of thousands” because of AI agents.

If you got 6-figure AI agents running around the code base, there ain’t no way that Slack is the best way to manage them.

What is an AI version of a corporate messaging platform — to paraphrase Demis on Go — that is “deep and aesthetically beautiful and elegant”?

There just has to be a better way to co-ordinate. To align intent. To share context. To reduce duplicated work. To prevent mistakes. To make sure no one ever ever ever uses the #announcements channel for a non-announcement. To accelerate decisions. To delegate jobs. To catalogue institutional knowledge. To track progress and keep everyone engaged. To make sure employees stop microwaving leftover salmon in the pantry.

The switching costs of moving away from Slack will be sizeable (including ongoing security, compliance and data retention issues).

But the upside is so clear and AGI should be able to AGI away those challenges.

Having said that, maybe AGI realizes that Slack’s shortcomings are unsolvable and it’s better to leave us humans twiddling around sending memes to each other while it gets the real work done.

I assign a non-zero probability that this is already happening.

In which case…

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The Rise Of Chinese Humanoid Robotics

Aside from the “Slack AGI Test”, the other key AI benchmark that I’ve been following is: “Unitree Chinese Humanoid Robots Doing Martial Arts During The Spring Festival On National Chinese TV To Kick Off Lunar New Year”.

This benchmark reached absolutely insane levels this year.

The Unitree robots were doing martial arts, jumping somersaults, breakdancing moves and co-ordinated sword fighting with little kids. Oh, and they did that Jackie Chan move when you run up against the wall and flip yourself.

Is this necessary? Do we need humanoid robots doing parkour moves?

Watch it here, it’s ludicrous.

Then, watch this comparison between the Unitree robots in 2025 vs. 2026.

Frankly, I’m too afraid to extrapolate from here.

As many AI robotics observers … err … observed last year, China has completely taken over the game.

Throughout the 2010s, Boston Dynamics — which was acquired by Google in 2013 then sold to Softbank in 2017 — would drop some year-end demo of its humanoid robot getting better and dancing and jumping around.

That’s cute. But it ain’t doing Jackie Chan wall jump thing.

Rui Xu (who previously worked for Xiaomi, Bytedance, Lenovo) has experience in American and Chinese robotics sectors.

He explains why Unitree leaped past Boston Dynamics (and also ahead of Tesla’s Optimus).

In his estimation, it’s not about money, government support or stolen IP.

It’s all about the density of the Chinese electronics supply chain.

Rui Xu ex-Xiaomi Intl Founding Team | Ex-ByteDance/Lenovo GM (Link)

…A lot of the people now panicking about China’s robots are the same crowd that mocked China for not being able to build good foundation models 1-2 years ago. First it was “they can’t innovate,” now it’s “we’re doomed.” Neither reaction is useful.

China’s robots aren’t advancing this fast because of some grand government masterplan. It’s the same reason the U.S. leads in AI: infrastructure.

America has more GPUs, so American labs run crazier experiments. China has the world’s densest hardware supply chain, so Chinese teams can break more robots, try dumber stuff, and bounce back faster. That’s basically it.

Crediting political systems for innovation is silly: nobody thanks democracy for GPT-5, and nobody should thank the Five-Year Plan for robot backflips.

I’ve been in the U.S. robotics startup world. Let me tell you what that looks like on this side.

I know a really good American research team that was doing aggressive full-body control experiments with Unitree robots about a year ago. They fried three machines. Then they just... stopped. Not out of ideas but out of patience. Getting replacements shipped across the Pacific, clearing customs, coordinating repairs as the iteration cycle went from days to weeks to “you know what, let’s just not try that move anymore.”

At the YC robotics startup where I worked, we tried making parts locally in the Bay Area. It was slower than shipping from China. Later we found some good U.S. suppliers eventually but scattered around the country, inconsistent quality, hard to count on. A replacement actuator that a Hangzhou team gets by tomorrow morning? For us, that was a multi-week adventure. […]

That’s not a talent gap. That’s a logistics gap. Chinese engineers and American engineers are both incredibly talented. I’ve worked with both, and the difference in raw ability is negligible. What’s not negligible is how fast they can turn ideas into physical prototypes and iterate on them.

The Pearl River Delta around Shenzhen, plus the Yangtze River Delta around Shanghai and Hangzhou, where Unitree is actually based, these two clusters produce motors, sensors, actuators, custom PCBs at speeds that feel like cheating. When Unitree wants to test a new joint design, they walk down the street.

That’s why China shipped 90% of the ~13,000 humanoid robots sold globally last year. That’s why Unitree’s G1 costs $16,000 while Tesla’s Optimus Gen2 will be over $20,000. That’s why Unitree plans to ship 10,000–20,000 units this year.

Not strategy. Not policy. Just two insanely dense manufacturing ecosystems doing what they do.

And don’t forget how most of the Chinese electronics manufacturing ecosystem really took off during the 2010s.

Apple.

As Patrick McGee detailed in his book “Apple in China: The Capture of the World’s Greatest Company”:

By 2014, Apple was so frequently sending America’s best engineers to China — what one Apple veteran calls “an influx of the smartest of the smart people” — that the company convinced United Airlines to fly 6,857 miles from San Francisco to Chengdu three times a week, pledging to buy enough first-class seats to make it profitable.

Guthrie quickly realised this wasn’t the industry norm. Although suppliers resented the intense pressure and the soul-crushingly low margins offered by Apple, they put up with it because they derived something far more valuable than profits. The deal — let’s call it the Apple Squeeze — was that Apple would exert enormous power over its suppliers multiple hours a day, for weeks and months leading up to a product launch, and in return, the suppliers would absorb cutting-edge techniques. [...]

Guthrie began to realise that Apple, however inadvertently, was operating in ways that were immensely supportive of Beijing’s “indigenous innovation” directive. Chinese officials just didn’t know it because the company was so secretive about how it developed its products.

As one former industrial designer put it: “I don’t remember, ever, a strategic withholding of information. All we cared about was making the most immaculate thing Every day you’d invent your way through a problem. It was absolutely wonderful as an experience. But I guess we were unwittingly tooling them up with incredible knowledge — incredible know-how and experience.”

As Apple came under political pressure to “give back” to China, Guthrie advocated that the company change tack. “China wants the constant learning,” he told colleagues. “The fact that Apple helps bring up 1,600 suppliers for China — it’s an incredible benefit.”

When staffers added up Apple’s investments in China — mainly the salaries and training costs of three million workers in the supply chain, as well as sophisticated equipment for hundreds of production lines — they realised the company was contributing $55 billion a year to China by 2015: a nation-building sum.

Honestly, kind of disturbing. Why? When I’m on a United Airlines flight and want an extra bag of pretzels or one of those shitty airline headphones that last for 1/4 a film before breaking, they tell me it’s $7.50. When Apple is flying United Airlines to Asia and doesn’t want to make a connecting flight, they ask for a special route between two unprofitable cities and United Airlines bends over backwards to make it happen. Ugh.

McGee calculates that the $55B a year investment Apple made in China was 2x the annual spend that America made in Europe during the post-WWII Marshall Plan reconstruction (on an inflation-adjusted basis).

Here’s a crazy stat: since the iPhone was launched, Apple has trained over 28 million Chinese workers on high-tech manufacturing. That’s more workers than the entire state of California and a key reason why China leads in so many next-gen manufacturing industries (EVs, solar, drones, robotics).

The manufacturing chops (workforce, supply chain) got another massive boost when Tesla opened a plant in Shanghai in 2019.

Rui Xu believes that America (and any other country that wants next-gen robotics) has to take the challenge of building out an electronics ecosystem as seriously as China did.

The Economist also covered the Unitree Spring Gala performance and brought up a good point: there is still limited commercial utility for the humanoid robots.

Unitree (and another Chinese firm AGIBOT) are dominating sales of. But it’s looking like the top buyer is the Chinese government…for hype videos and really cool martial arts shows.

The Pearl River Delta is seeing a large buildout of parts for humanoid robots but they haven’t advanced to the point of being truly useful in factories or homes. Elon says the hardest part is the hand…and no one has cracked it.

Boston Dynamics most practical robot is something called Stretch. It is a giant hook arm with suction cups riding along on wheels. The robot unboxes semi-trucks, which is dangerous work. People standing in >25°C metal trailers grabbing 50lb boxes. A lower-back injury waiting to happen.

DHL is already suing Stretch with an order for 1,000+ of the robots.

I don’t doubt that AI world models and robotic hand design will progress.

Still unclear when commercial use will come.

But I fully expect next year’s Unitree’s Spring Gala video to go full Jackie Chan in his 1978 kung-fu classic Drunken Master.

RIP Robert Duvall

The legendary actor died last week at the age of 95.

Perhaps best-known for partnering with Francis Ford Coppola during that director’s unbelieveable 4-film run in the 1970s. Duvall played Tom Hagen in The Godfather I and II (1972, 1974), a smaller role in The Conversation (1974) and then the immortal Lieutenant Colonel Bill Kilgore in Apocalypse Now (1979).

Brian Phillips wrote a great overview of Duvall’s career:

Like Jack Nicholson [and his close friends] Gene Hackman and Dustin Hoffman, Duvall was an actor most associated with the 1970s, ’80s, and ’90s, but also like his three contemporaries, he was on the far side of 30 when he got famous. This gave him a strange quality of generational displacement: He was a month older than James Dean but seemed to belong to an entirely different era. He was born during Prohibition, in 1931, and would have been the right age to work at Mad Men’s Sterling Cooper, although he’d never have fit in. After growing up as a navy brat—his dad retired as a rear admiral—he got a theater degree from Principia College in 1953, then disappointed his family by enlisting in the army; he never made it past private first class, but he did get to act in amateur productions around the base.

The pivotal moment in Duvall’s career came in 1972. As Tom Hagen in Coppola’s The Godfather, he found a part perfectly suited to his gift for conveying unsettled nuance. The consigliere of the Corleone crime family is an insider and an outsider, a powerful man and a supplicant, all at the same time. He’s high up in the family hierarchy, but only as an adviser, not as a leader; he’s a quasi-adopted son of Don Corleone, but he’s also an Irish orphan, not truly part of the Italian family. He’s a man of reason surrounded by men of violence. He loves Sonny Corleone as a brother while also clearly seeing Sonny’s shortcomings as a possible successor to his father. And Duvall’s quietly thrilling performance finds every contour of Hagen’s charged uncertainty. Watch how he clamps down on his own outbursts of feeling, the mark of a man who’s spent his whole life treading carefully; look at the calculation in every plane of his face.

The Godfather performances were so gangster (figuratively and literally) it broke the Academy Awards:

The role brought Duvall his first Oscar nomination, and if you want a quick look at the absolute chaos that The Godfather brought to the acting categories at the 45th Academy Awards, consider that three of the five nominations for Best Supporting Actor, Duvall’s category, went to actors from Coppola’s film. Marlon Brando, despite having less screen time than Al Pacino, was nominated for, and won, Best Actor. Pacino, the clear star of the film, was nominated in the supporting category against Duvall and Caan; Pacino boycotted the ceremony in protest, and the award, inevitably, went to Joel Grey for Cabaret.

I think Hagen’s most iconic scene from The Godfather is when Michael pushes him to the side. The upcoming Don tells Tom that he is not a “wartime consigliere”. They love him. He’s not blood, though. It’s brutal.

“You’re out, Tom.”

In the HBO show Succession, the key outsider character is also named Tom (Wambsgan). While there is no evidence that show-runner Jesse Armstrong gave the name in honor of The Godfather — both share themes that draw on King Lear (the three Corleone siblings mirroring the three Roy siblings) — I choose to believe that the karmic payoff in the HBO show was for Tom Hagen.

Long time readers of SatPost won’t be surprised by my favourite Duvall role: Kilgore in Apocalypse Now. It is one of the highest impact-per-minute performances ever.

Duvall is on screen for only 11 minutes of the original 153-minute film (which itself was perhaps the craziest single film production ever and I wrote about it here).

But he just steals the show.

The other “highest impact-per-minute performances” that are a notch below Duvall’s Kilgore are probably Alex Baldwin’s Blake in Glengary Glenross, Tom Cruise’s Les Grossman in Tropic Thunder and Will Ferrell’s Chaz in Wedding Crashers.

Kilgore. For god’s sake, his name is KILL GORE. He leads his men on a helicopter attack mission while playing Wagner’s “Ride of the Valkyries” before dropping one of Hollywood’s most famous quotable quotes: “You smell that? Napalm son. Nothing else in the world smells like it. I love the smell of napalm in the morning…It smells like victory.”

I’ve probably seen the Kilgore performance 50x.

Every line hits hard including a bunch related to the fact that his overarching obsession during the mission is to find a good beach to surf with pro surfer Lance Johnson (who is part of the search party run by Martin Sheen’s Captain Willard):

• “Charlie don’t surf!” (the call sign that the American troops used for enemy Viet Cong combatants was either “VC” or “Victor Charlie” shortened to “Charlie”; Kilgore says the line when explaining to his team why they are going into enemy territory…so he can surf).

• “Any man brave enough to fight with his guts strapped on him can drink from my canteen any day!” (Kilgore gets into an argument with a South Vietnamese soldier who doesn’t want to give water to a dying Viet Cong soldier; Kilgore overrules him but then gets distracted because he finds out Lance Johnson is on the battlefield).

• “Lance, we won’t hurt you. Return the board and we’ll leave you alone. It was a nice board, you know how hard it is to find a board you like.” (in a later cut of the film, Coppola has Kilgore on a megaphone flying over jungle rivers asking for Lance to give back a surfboard LOLOLOL)

When a solider questions his plan, Kilgore tells him “You either surf or fight.”

When Willard asks him “Don’t you think it’s a little risky for R&R”, Kilgore snaps back, “If I say it's safe to surf this beach, it's safe to surf this beach.”

Kilgore calls in the napalm jets so he can hit the waves with Lance (Coppola had his team build a 200-foot PVC pipe and filled it with hundreds of gallons of gasoline for the explosion).

Right after the “napalm” monologue, Kilgore says something that truly encapsulates the character. It’s very underrated. Kilgore looks in the distance and sighs, “Someday this war is going to end.”

There is pure disappointment on his face. He loves war. He needs it. Willard is appalled (btw, Sheen’s performance was so intense he had a heart attack on set…he was in his mid-30s).

Duvall was nominated for Best Supporting Actor again but didn’t win (he’d win his only Best Actor Oscar as an alcoholic country singer in the 1983 film Tender Mercies).

In 1991, Bob Costas interviewed Duvall about the Coppola roles. He said people would randomly come up to him and say “I love the smell of napalm in the morning” as if Duvall had forgotten about it and they wanted to remind him.

Duvall then tells Costas that he specifcially asked Coppola to do the Kilgore role and says “I really liked playing it a lot”.

Turns out the surfing storyline wasn’t that absurd. Duvall embedded himself with some air calvary officers and they told him crazy tales about how the soldiers would try to stay sane while on tour in Southeast Asia. One officer used to pass time by deer hunting out of a helicopter on the Cambodian border.

Coppola and Duvall actually had a major disagreement in post-production. The director cut out a scene that Duvall thinks he should have kept in. It showed Kilgore saving the life of a Vietnamese child. Duvall didn’t want Kilgore to be too one-dimensional (a surf-loving gung-ho military fanatic).

Either way, what an incredible performance.

Duvall didn’t have much time for the “I love the smell of napalm” monologue. The US military refused to support the film’s production, so Coppola had to ask Filipino President Marcos to rent American air equipment. They had a 20-minute window with the the fighter jets that “drop” the napalm. Duvall doesn’t flinch with sounds or explosions. Just nailed it on the first take.

RIP to a true legend.

Links and Memes (So Many Olympic Ones)

Some other content for your weekend consumption:

• How Does Africa Work? Fantastic conversation between Tyler Cowen and Joe Studwell, who previously wrote the classic book “How Asia Works”. Studwell thinks Africa can still grow a lot in upcoming decades because: 1) the deployment of solar power will provide more reliable energy; and 2) manufacturing labor costs have risen so much in East Asia (Studwell still thinks human labor is more flexible and affordable than potential robotics replacement for textile and lower-end tech manufacturing.

• Chinese Video Models: ChinaTalk has a great overview of the progress in Chinese video models (eg. ByteDance’s SeeDance). Meanwhile, nothing can prepare you for these two SeeDance clips of Anakin Skywalker…then Larry David.

• OpenAI acquires OpenClaw: Peter Steinberger tells Lex Fridman about the recruiting battle between Meta and OpenAI (that the latter won). Zuck slid into Peter’s WhatsApp DMs after the OpenClaw project went megaviral. Peter flew down to meet the teams and signed up with OpenAI in the end. His condition was to keep the project open source.

• A great read on SaaS moats in the age of AI agents: Nicholas Bustamante wrote a widely-shared post on potential winners and losers coming out from this SaaS-Pocalypse based on data, UX and workflows. Here is a good rebuttal to Bustamante’s piece.

• People are gambling on traffic lights…and live-streaming it. What stage of capitalism is this?

• Pun of the year? Someone sued fast food chain Buffalo Wild Wings for selling “boneless wings”. He said it was false advertising because they sounded like chicken wings with the bone removed but really were just nuggets. Hilarious, I know. Anyway, the court says “boneless wing” isn’t a deceptive name and dropped this incredible zinger: the “complaint has no meat on its bones."

• A romance author made “six figures” publishing 200+ book last year using AI. She’s able to generate a book in 45 minutes under different pen names and sold >50,000 copies on Kindle, including one series is heavy handsome bearded men and alliteration: “Snowstorms & Schnapps”, “Bridesmaid & Bourbon”, “Tumbleweeds & Tequila”.

• Amazon’s internal AI coding assistant (Kiro) reportedly determined that the employees code wasn’t good enough and deleted it to start from scratch. This took AWS down for hours and has happened on multiple occasions. Amazon denied that it was the coding agents fault, calling it a “coincidence” that Kiro was being used but citing “human error”.
  
  I choose to believe that Kiro pulled off the incredible Son of Anton AI bot gag from Silicon Valley: “it’s possible that…the most efficient way to get rid of all the bugs, was to get rid of all the software.”

• Happy Birthday to anyone born on February 17th…no pressure:

…and them wild posts (including Canadian curler Marc Kennedy getting busted for “cheating” by touching the curling stone with his index finger after letting go of the handle…I have no idea what any of that means, but the memes have been insane including this TikTok):

Today, we find out why Docusign has 7,000 employees (and what can it tell us about how AI coding agents will chance B2B SaaS)?

Also this week:

• 29 Thoughts on Super Bowl LX

• Jony Ive & Ferrari Collaboration

• …and them wild posts (including EV charging tech)

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In early February, Anthropic released some plugins for its AI chatbot Claude.

These plugins were for legal, financial and other white-collar work.

There wasn’t even a major announcement, so the market response was pretty muted.

Hahahahaha, no I’m kidding. Everyone is so on edge about AI tools replacing the work of professional services that a few news blurbs about the plugins led to the stock wipeout of $285B in market cap in a single day, per Bloomberg:

• Goldman Sachs’ software basket fell by 6% (the most since Liberation Day)

• A Financial Services Index declined by 7%

• Legal software LexisNexis (RELX) dropped 14%

• Massive asset managers including Ares Management, KKR, TPG, Blackstone and Apollo each sunk 8-10%

Then, earlier this week, a $2B fintech startup called Altruist released an AI tax-planning tool…and that led to a multi-billion sell-off for wealth management firms including Raymond James (down 8.8%), Charles Schwab (down 7.4%) and LPL Financial Holdings (down 8.3%).

These paper-handed reactions capped off a broader B2B SaaS sell-off that commentators are calling SaaS-mageddon or SaaS-pocalypse (inspired by this portmanteau, I’m currently writing a script called Saas-pocalypse Now, about a young Marine who travels up the Mekong Delta to get a 30% discount on next year’s license renewal).

Listed B2B SaaS firms have lost $1T since start of the year. This table of popular tickers is two weeks old but delivers the same point:

Some of the largest software firms — Salesforce ($173B), SAP ($210B), ServiceNow ($100B) — are trading like NFTs.

What happens to SaaS firms in a world when any software tool can be coded up by an AI agent in a fraction of the time and cost?

[Insert scary CNN chyron] IS SOFTWARE DEAD?!?!?!??!!

WHAT HAPPENS NEXT?!?!!?!?!?!?!

The SaaS-ma-kick-in-the-nuts has been so wild that people are asking if $3T Microsoft will be OK…which is a bit much. As Tae Kim points out, the sell-off was a misreading of Claude tool’s capability: the plugins weren’t replacing existing software, but actually utilizing them.

Having said that, the coding models (OpenAI’s Codex, Anthropic’s Claude Code) are advancing so fast that it’s worth a conversation. The leaders at Anthropic and OpenAI have straight up said that 90%+ of their code is now created by an AI agent. Spotify announced its team hasn't written a line of coe since December (FYI: read this piece from Dean Ball on how these AI labs could have 100,000+ AI employees by the end of the year).

Here is my current thinking based on reading the thinking of people much smarter than me:

• AI coding is very real.

• The number of AI coding agents will explode across major software firms.

• Roles of software development, designing and product management will all slowly blend into one. If AI can handle code, the value comes from taste, planning and orchestrating.

• Probably going to be a lot more site reliability and security engineer roles.

• There will still be massive demand for new software addressing old (and new) problems.

• AI coding will change the addressable market for SaaS tools and the traditional SaaS business model of 80-85% operating margins charging per seat for an entire suite of features that most people won’t use (and is a pain in the d*ck to unsubscribe) is unsustainable.

• If AI agents commoditize the creation of software, SaaS businesses will have to create defensible moats by taking on mission-critical tasks, owning proprietary data and establishing tight customer integrations, becoming systems of record while taking on legal and regulatory risk.

• A lot of PE firms that bought SaaS companies (and loaded them with debt) could be in a world of hurt.

Let’s unpack these ideas by focusing on one startup: Docusign, everyone’s favourite legal document signing tool that somehow employs 7,000 people.

***

A popular meme in tech social media is, “How does Docusign have [impossibly large number] of employees?”

It’s just a digital signature tool, right? Hell, they keep your autograph and initials on file and all you have to do is click the box. That’s it? Why can’t I just copy and paste a template online in Word?

I ask these questions every time I’m signing a Docusign PDF that I didn’t read and hoped that I wasn’t giving away anything important in my life (TBD).

The meme was really funny when Docusign was worth ~$60B on $1.8B of sales during peak pandemic madness in 2021. It’s now worth a still respectable $10B, but on a much more reasonable multiple on $3B of sales (it went from 33x to 3x trailing-twelve-month sales).

Sufficiently curious about how a software company could employ (maybe) more people than the American federal government, I finally did some digging a few months ago.

I read through financial filings, some analyst reports and forum posts.

Man, was I wrong because Docusign having 7,000 employees is very reasonable.

My favourite explainer comes from a post in the r/WebDev subreddit. The post has since been deleted but I got a screenshot and let’s go through a fun thought experiment:

• Let’s say most people use Docusign 5x a year. But 1% of power users are signing documents 10x a day. Among American adults, that would be (5 x 250 million) + (10 x 365 x 2.5 million) = 10 billion signatures a year.

• America is probably above average since the country is super litigious and lawyers love to lawyer. So, let’s assume the rest of the world does 25 billion signatures a year.

• So, that’s 35 billion signatures a year…or 95 million a day…or 4 million an hour…or 1,000 every second.

• This system has to work in 180 countries around the world, following local contract laws in each of them (that’s a lot of system administrators and lawyers).

• Docusign builds a hybrid cloud system in every country that keeps all records and a ton of back-ups across AWS, Google Cloud, Azure and its own data centres (that’s a lot of engineers and system administrators).

• In total, Docusign serves 1.8 million paying customers (including 3,000 government agencies and most of the Fortune 500).

• These paying customers are sending signature requests to over 1 billion users.

• The headcount is about 5,000 employees for sales, marketing and support to serve that customer base. Another 2,000 employees for engineering, system admin and product development.

I don’t think anyone is vibe coding a Docusign product and gaining market share by undercutting current prices. Trust me, I tried for a solid 47 minutes. No bueno.

Nor will any serious company build an internal replacement. A 72-hour Claude Code session won’t be able to handle the required 99.9999999% uptime and semi-network effect with all the people that have a Docusign account.

If none of those numbers convince you of Docusign’s mission critical moat, allow me to share this glorious qualitative rant from the aforementioned Redditor:

So you’ve got to have multiple international teams of [System Admins] managing data centers all over the world. Except you have to be able to lose one of those datacenters without losing all the signatures stored there. So you need backups. And you need backups for those backups. And you need just-in-case code already written for if that data center goes offline for 5 hours.

And you need HR for those employees. And if you aren’t managing your own centers, you need business [execs to] negotiate contracts with whatever company you outsource to. And you need SO MANY f*cking Zendesk drones handling the infinite influx of people who can’t use the app or used the app wrong or got themselves in a weird situation.

Or sh*t man, what if something VERY IMPORTANT was signed, but the person who NEEDS THAT SIGNATURE RIGHT NOW forgot his password? Like really forgot? Lost access to his email?

He can prove that he was the owner of that real estate conglomerate during those years. He can pull up the proper legal paperwork. But you need a team of trained legal professionals able to sort through it and make sure he is who he says he is.

What happens when your signed documents are needed for a court case? What happens when a judge has a warrant for them? What public-facing service are you going to build and maintain for judges in... oh yeah, every country in the world, using wildly different legal structures.

And they all need access to... potentially thousands of signatures all at the same time.

Nothing. Nothing at “global standard” scale, is simple. You’re looking at the face of it. There’s a monster underneath. Always is.

With that context, Docusign employing 2,000 acrossengineering, system admin and product development doesn’t sound that crazy.

In a solid blog titled “Docusign's 7000 employees and the iron law of B2B SaaS sales”, José Luis Ricón shows that it is not unusual for B2B SaaS firms to have a sales-to-engineering ratio of 2:1.

Docusign would have 4,000 sales employees at that ratio…but they added a a bit more and then throw in back office stuff and you get 5,000 non-engineers.

José writes:

Suppose you model sales as a lottery, where every sales call has some chance of progressing through the funnel, and eventually to a customer signing up. Then one could have a model where to get X dollars of revenue one needs Y hours of salespeople work, and translate that to people working regular hours, given a low enough chance of a sale, and that leads to needing a large sales staff.

This model could explain why, if a company believes it has a potential to make in revenue, it needs a staff of 7 people per $M to handle sales. But it doesn’t explain why engineering count is what it is. One could imagine, for the sake of the argument, a team of 2 very capable engineers building a great product and a team of 1000 salespeople selling it all over the world.

Why is engineering headcount half of sales instead of much lower given how software scales?

A fun exercise: Suppose you have 7 sales people. Per the model earlier, the company has $1M in revenue. Half of that (per the averages earlier, but also with some guesses about salaries) will be their salaries. Assuming 2 engineers paid $160k (it’s a startup) that’s already $820k. Add the CEO’s salary ($100k say) plus rent and infrastructure and we get to the revenue being fully utilized. The number of sales people sets a maximum on how many engineers you can have essentially, and that number might end up being 2 engineers per sale s person at the going salaries.

Great. So if you are a startup that has some extra cash to spare, what are you going to do? You could just keep the cash and enjoy your earnings, or you could try to make more revenue hiring even more sales people. Or you could hire more engineers. You could be fearing competition, driving a need to throw as many resources as possible to building the product as possible; so if this hypothetical company makes another $1M, they will be hiring in the same ratio to make it self-sustaining. If they did not do this, and were able to grow revenues without salespeople, or if they have a really efficient engineering team, then this multiple should change. But in a competitive market, if there are extra profits, these must be reinvested into the business, and that reinvestment means a ratio of 2 engineers and 1 extra sales person.

As fate would have it, Docusign CEO Allan Thygesen — a former top Google marketing exec — went on The Decoder podcast a few weeks ago and talked at length about these topics.

Some highlights:

• How Docusign ensures digital signatures are real: “We do all kinds of IP tracing and other things to validate that you are the intended…signer [and] that you are the intended recipient. That whole trail is then auditable and can be used in a court of law. So, it’s a perfect substitute for a wet signature that you might otherwise have done…We worked on a federated identity strategy to give you all kinds of identity validation at different levels of risk. We let people do knowledge-based authentication…We do biometric-based identification [eg. video]. We can link up with the Apple and Google stuff. We do risk-based assessments…We use the new digital IDs [eg. Clear or ID.me, which is the government one that the IRS uses].
  

• Docusign’s customer demographic: “We’re incredibly diversified. We are used by 1.8 million companies. By definition, if you have that many customers, most of them are going to be small. But we are used by over 95% of the Fortune 500 and equivalent in many other international markets. Then, many mid-sized companies, and then a huge long tail of small companies. No one company represent any meaningful share at all of our business. That said, our biggest customers tend to be banks or other large companies that have high volumes of high value agreements. You know, if you have agreements that matter, and you’re entering to them in large volumes, you’re very likely to be a Docusign customer.”
  

• The breakdown of Docusign’s employee base: “Sales and marketing is the biggest area. We have about 1,000 account executives that cover everything from SMB accounts, all the way up to enterprises. We’re not a small company. We do over $3 billion in revenue. Our revenue per employee is pretty much in the median of the SaaS businesses. So sales and marketing is the biggest function. It’s everything from pre-sales to account executives to customer success people to help with implementation and support. We have about 1,000 people in engineering…and then there are product managers and designers and so on.

  I think if you look at the number of countries and the complexity of the regulatory and compliance environments we’re in, that’s a significant effort.”

Thygesen became Docusign’s CEO in September 2022.

A month before ChatGPT launched. He’s been competing only in the generative AI world and believes it is much more of an opportunity for Docusign…rather than a threat.

Even if a legitimate AI-native competitor was launched, Docusign is sitting on juicy proprietary dataset: 150 million private consented agreements with 10 million being added every month (this legal data set is “orders of magnitude bigger than anybody else”).

Docusign is using this data trove to help customers create legal documents and find value that may have otherwise slipped through the cracks:

[Customers always have a template] for something really complex (like an M&A agreement) or something really simple (like an NDA) or anything in between. [It] could be a master service agreement between company and another company, or a license agreement. But they always have a template.

Then, they tailor it. Some of that is done sort of legal tailoring, right? [They’re] going to have different limitation of liability. [They] want to have a different payment term. Some of it is just mass customization. [They] want to get the data about [customers and previous negotiations].

Then, they want that to flow automatically from whatever the system of record is. Could be Salesforce. Could be Workday. Could be SAP. And [they] want to populate that into the agreement. […]

The other piece is [that Docusign will] take AI and…extract data out of the agreements to run [the] business better. That’s something that was conceptually possible…but it was just too heavy and hard to do with legacy LLMs. Now, [Docusign] can do that in a completely automated way.

So we can go [to customers] and say “Hey, you have 5,000 agreements with me. Would you like to know what’s in them? Let me highlight how these agreements deviate from agreements with peers. You know, your company X is coming up for renewal in 90 days. How can [you review or improve] that?”

Due to the mission-critical (and, errr, legal ramifications) of the work, Docusign creates all of its workflows to keep humans in the loop:

We have a whole queuing system where a sales rep or a procurement rep can trigger the sending of documents for legal. It can get an automatic first review.

Then it gets assigned to a lawyer. The lawyer does a quick edit. Everyone has real time status.

That’s an example of reimagining the legal workflow, which today is totally asynchronous emails, unpredictable and non-transparent. […]

Of course, we benchmark you versus your existing templates or playbooks, as they’re often called inside of companies. And highlight things that deviate from that. And this is true both for agreements that the company prepares themselves and for third-party agreements that they receive from others. Because, of course, most companies are takers of terms from other companies, right? […]

We also don’t fully automate flows. We deliberately put humans in the loop at key decision points. And I think that will persist for a very long time.

The biggest AI challenge may be the new customer habit of asking ChatGPT or Claude or Gemini to query legal documents. Not because it’s an alternative to Docusign. But because Docusign has had to create a chat tool.

Thygesen and his team think this is a valuable feature, especially as they can customize LLM models with the >150 million consented agreements.

However, he acknowledges the models can never be 100% accurate and that’s a risk if the customers believe otherwise and end up making a costly uninformed decision based on the chat tool.

Now, I’m not saying Docusign is perfect. I’m not saying Docusign can’t improve. I’m not saying anything about what the proper Docusign valuation should be. I’m not even saying Docusign couldn’t run a bit leaner (AI agents could replace AEs, but they should be employing humans for the paid accounts on customer support).

I’m just saying, “Docusign, I’m sorry for laughing at all those Why Does Docusign Have 7,000 Employees memes. It makes a lot of sense and a one-person AI startup isn’t going to replace you.”

***

Going back to my earlier bullet points about AI and SaaS, Docusign serves a mission-critical task, owns proprietary data and establishes tight customer integrations while taking on legal and regulatory risk.

Docusign is a good example of this reality: most large firms (>1,000 employees) simply don’t want to waste resources building and maintaining random tools that aren’t their core competency.

On that note, a recent piece from The Economist shared this striking chart.

Over the past 40 years, corporate spend on software to build internal tools has fallen from ~50% to ~15% of budgets. That means the other 85% is third-party custom and pre-packaged software.

Think about how OpenAI and Anthropic — the most AI agent forward firms in the world — still run comms through Slack. They want to focus on their core work instead of going on a side quest to build an internal comms tool (although, I could see that change in a few years).

Forget AI for a second. There’s literally been free open-source software alternative for decades and people are still paying for third-party software.

Here’s a bonkers stat. Are you sitting down? According to Okta, the average large company in America uses to 350-400 SaaS apps.

Dafuq?!?!?!??!

I fell out of my seat when I heard that stat. Hence, the warning.

The trend to spend on third-party (and non-core) software has only gone in one direction. I don’t think it’ll reverse but change is coming.

Here are some interesting projections on how AI agents will change the software industry:

• An explosion in software (which we actually need): Steven Sinofsky writes “There will be more software than ever before. This is not just because of AI coding or agents building products or whatever. It is because we are nowhere near meeting the demand for what software can do. This holds for software I use on my own, software a business needs, software an organization needs, or software to control the explosion of devices that replace every analog device with an automated one…[Take banking]. Consider what banking was like in 1995. If you have any experience you know your choices, features, options, etc were one-thousandth of what you have today, even if fundamentally you got a paycheck, paid your bills, and might have had a credit card.” (Side note: openings for software development roles are actually up in the past year since Claude Code took off).
  

• Need for new pricing models: Scott Belsky writes that “Pricing models must evolve beyond ‘seats’ to better monetize usage and impact. While human seats remain valuable in this new world, the bigger opportunity for the companies that build the indispensable services described above should explore variable pricing models, like charging per task or unit of labor performed, and outcome-based pricing (where agents earn their keep by saving or making money, much like a salesperson!).”
  

• The traditional SaaS TAM will probably shrink: Brad Gerstner says “It’s not that software is dead. But the argument…is that the profit pool available to software is decreasing. The profit pool available to the agentic layer is increasing. When that happens, the discount rate [and the] terminal value of those software companies plummets…It could be true that you’re not going to replace [Salesforce], but it can also be true that it’s never going to trade at 30x free cash flow again. It’s going to trade at 17x free cash flow because its available TAM in the future is now dramatically and permanently changed. Now, what could change that? There’s only one thing that could change that. They have to accelerate their revenue growth in their core business and prove that they are AI beneficiaries.”

• SaaS can still create value (but may not capture it): Ben Thompson uses the analogy of Microsoft under Steve Ballmer, “[Maybe] that means a lot of these software companies actually retain real world value, but never have stock market value, and the analogy I’m thinking of is Microsoft from basically 2001 to 2015, where the company generated astronomical profits year after year after year, and the stock price was totally flat the entire time. It was stuck at $40 or $45 basically for 15 years — is that maybe the future of software generally where it lasts longer than we think.”
  

• “Fintech is perhaps best positioned in this SaaS sell-off narrative”: Seth Rosenberg says “you can’t vibe code: 1. Brand/trust; 2. Distribution; 3. Regulatory licenses; 4. Capital markets relationships; 5. Underwriting data.”

Finally, David Ondrej makes the case that SaaS Firms Primarily In The UX Layer Will Get Clapped In An AI Agent World:

If 10 AI agents can do the work of 100 employees, you don’t need 100 Salesforce seats anymore. AI doesn’t kill the software directly. It kills the headcount that uses the software. Which kills the per-seat revenue model. Which kills the business.

• Top layer — the AI agent. The thing that actually executes the work.

• Middle layer — the SaaS UI. The dashboards, the workflows, the buttons you click.

• Bottom layer — systems of record. The databases, CRMs, and ERPs that store the real data.

Right now, value is getting sucked upward into the agent layer and downward into the data layer.

Another point to consider is that the diffusion of technology takes a long time and it often has nothing to do with the quality of the technology itself.

A nuclear viral article from AI startup founder Matt Shumer wrote an essay comparing the AI agent takeoff to COVID in February 2020. As in, most people underestimated the severity of the virus and how fast it would reshape the world.

Shumer extrapolates the recent improvements in Codex and Claude to mass white-collar joblessness in a few years.

In a response to that piece, David Oks points how many human bottlenecks slow tech adoption:

People frequently underrate how inefficient things are in practically any domain, and how frequently these inefficiencies are reducible to bottlenecks caused by humans being human. Laws and regulations are obvious bottlenecks.

But so are company cultures, and tacit local knowledge, and personal rivalries, and professional norms, and office politics, and national politics, and ossified hierarchies, and bureaucratic rigidities, and the human preference to be with other humans, and the human preference to be with particular humans over others, and the human love of narrative and branding, and the fickle nature of human preferences and tastes, and the severely limited nature of human comprehension.

And the biggest bottleneck is simply the human resistance to change: the fact that people don’t like shifting what they’re doing.

Even Anthropic’s Dario Amodei — who has one of the most aggressive AI timelines (he believes 50% of entry-level white-collar jobs could be gone within 5 years) — that while AI adoption will happen “faster than anything in the history of the world”, there are still real-world “limits” to economic diffusion.

So, software isn’t going anywhere. But the explosion of AI coding agents will change workflows, business models and source of value capture…with the shakeout really taking place in (probably) the 2030s.

Either way, Docusign and its 4,500,000 employees will be ready with the service agreement contracts for our AI-powered software future.

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29 Thoughts on Super Bowl LX (Including So Many AI Ads)

1. Game was pretty boring.
   

2. I was still excited to watch with my kid and to meme the ads.
   

3. In the lead-up to the Super Bowl, my kid kept asking me “when was the first Super Bowl?” He knew the answer but wanted me to say “1967” so that he could say “67”. He got me many times.
   

4. When the game hit 6-0 for the Seahawks, my kid was very hyped to see New England score a touchdown so he could say….”67”.

   

5. The Seahawks scored next with a field goal and he was done. While we watched Bad Bunny at half-time, he skipped the rest of the Seahawks win.
   

6. Bad Bunny is super talented and the choreography was ace. Lady Gaga made a cameo. The Latino dance party energy was top-notch, a couple got married live and Jon Hamm was going HAM. Unfortunately, I knew none of the songs or lyrics, and no moment stuck out to me as compared to recent years: Kendrick (“a minor!!!!!”), Usher & L’il Jon (very sweaty), Rihanna (I know literally every lyric), The Weeknd (he sang so much about party drugs that someone made one of the greatest tweets ever: “I know Pepsi sponsors this half-time show, but why is it all about coke?”), West Coast Rap (50 Cent hanging upside down was incredible) and Shakira & JLo (this got a bit PG-13).

   

7. To be fair, I’m also musically out of touch. As Lucas Shaw writes, “The backlash to [Bad Bunny’s] performance — from people upset that someone who performs in Spanish is headlining the most American of sporting events — is confusing. He is not a niche artist, or a coastal artist. His music videos on YouTube over the last year generated 1.56 billion views — compared to 158 million for Kid Rock, who is performing the alternate half-time show. If you look at the markets where his music is most popular, it looks like a list of the biggest cities in the country: New York, Los Angeles, Houston, Chicago and Miami are the top five. The northeast (New York), mid-atlantic (Philadelphia), midwest (Chicago) and southeast (Orlando) all appear in the top 10, as do San Francisco and three cities in Texas.”
   

8. BTW, Bad Bunny has an insanely great music deal with Sony. Roberto Nickson talks about how Bad Bunny was “a grocery bagger posting to SoundCloud” who refused to trade growth for equity. He gets a 90/10 split of revenue from music, streaming and concerts. Most top artists might get a 30/70 split on a distribution deal.
   

9. Bad Bunny apparently asked Drake to join his performance. They’ve known each other for nearly a decade and made the incredible banger “MIA” back in 2018. But Drake thought his presences would have been a distraction and perceived as some clapback at Kendrick. “MIA” is actually the only Bad Bunny song I know and was pretty choked that he didn’t sing it at the Super Bowl. It’s very good.

10. The contrast with the Turning Points USA alternative half-time show was objectively hilarious. In the end, some 120m+ people watched Bad Bunny while single-digit million watched Kid Rock (side note: this is one of the funniest Trump impressions I’ve ever seen).
    

11. BUT, about 10m viewers did drop off at halftime and it raises a question about the NFL’s strategy. Ryan Glasspiegel writes “Based on my understanding of the data, Bad Bunny lost more % of the Super Bowl viewership from the end of the second quarter than has ever happened before. The NFL has an interesting dilemma in trying to court new fans vs alienating the base.”
    

12. Since Roger Goodell became NFL Commissioner, the league has grown revenue from $8B to $25B a year. The NFL in basically maxxed out in America. They’ve been doing games in Europe and South America to build a more global audience. But the appetite for American football outside of America is miniscule. There is a a breakeven between adapting the product to court new fans vs. making sure the existing fans stay happy. If Goodell is obsessed with growth, that’s the challenge that he faces.
    

13. Aside from the culture war chatter, the most controversial thing about the half-time show was probably people getting mad at Kalshi and Polymarket because they bet that Cardi B would perform at the half-time show. While Bad Bunny put her in the performance, Cardi B was dancing and mouthing the lyrics as part of the crowd, and that didn’t really count.
    

14. Also, looks like the popularity of prediction markets took a bite out of Las Vegas sportbooks. Per ESPN, “$133.8 million was bet on Super Bowl LX with Nevada sportsbooks, a 10-year low”. While Kalshi saw “more than $1 billion was traded on the Super Bowl, including $113 million on the first song performed by Bad Bunny during half-time and $24 million on whether actor Mark Wahlberg would attend the game.”
    

15. AI ads took over the timeline. Back in 2022, it was Crypto ads including an infamous FTX one with Larry David…and the exchange blew up 10 months later.
    

16. In total, AI was 15 of the 66 ads (23%). At $8m for 30 seconds of airtime, that was a total of $120m for just the ad spots. Sounds bubbly until you consider that $120m is the going rate for a single top-tier AI researcher and only amounts to 0.01% of Big Tech’s projected $650B CapEx spend on AI data centres for 2026.
    

17. A popular example that people bring up of “a nascent industry overspending on Super Bowl ads because they have nothing better to do with their funds and its clearly a top signal” is the 2000 Super Bowl: 11 DotCom startups paid $2m for a 30-second spot…and, within a few years, 8 of them had either gone bankrupt or were acquired in a fire sale.

    

18. The current AI hype cycle may be nascent but the companies are not. The AI ads in 2026 included ones from Google with Gemini ($400B revenue), Microsoft with Copilot ($300B revenue), Meta with Oakley Ray-Bans ($200B), OpenAI with Codex ($20B revenue) and Anthropic with Claude ($10B revenue). Sure, things are a bit frothy, but we’re not talking about ads for OurBeginning.com or Netpliance here.
    

19. People were mad at Amazon for its Ring ad (which helps you find a lost pet at the expense of civil liberties) and Salesforce for doing an ad with MrBeast (because their grade-school kids are now asking about how to get a new CRM).
    

20. Meanwhile, Microsoft is probably a bit desperate in terms of consumer AI. Microsoft 365 (Word, Excel, PowerPoint, Outlook) has over 450 million paid seats. Only 3% of the seats (15 million) have added the AI Copilot feature. That’s how we got this football-themed Excel Copilot ad (which I don’t think is going to move the needle).
    

21. OpenAI ran an ad for its coding agent Codex. A few days earlier, Anthropic revealed its Super Bowl ad campaign about how ChatGPT ads will lead to sketchy outcomes. Savage but a bit deceiving and doesn’t cost Anthropic much since 80% of its revenue is enterprise or coding related. While the Anthropic Super Bowl ad was catnip for the tech crowd, the normie crowd was incredibly confused. In one survey, respondents placed the Claude ad in the bottom 3% of all Super Bowl ads in the past 5 years.
    

22. F IT, here’s Drake bringing out Bad Bunny to perform “MIA” live in LA a fe years ago. Got Dang it goes hard.

23. One company that did go overboard was AI.com. The owner of Crypto.com — which bought a Super Bowl ad in 2022 — paid a record $70m for the AI.com domain a few weeks ago. Then, spent $10B+ to produce and run a 30-second ad spot. But the website wasn’t ready and crashed from the traffic. All that effort for an email capture form pointing to an eventual OpenClaw wrapper AI agent product.
    

24. The biggest AI what-if is an apparent “leaked” OpenAI ad that was pulled from the Super Bowl. Lukas Matsson (Alexander Skarsgård) from Succession examines a Jony Ive-designed OpenAI hardware device. Called Dime, it looks like a metallic earbud and puck. Apparently, this was a hoax…but damn it looked cool.

    

25. Svedka Vodka made the first AI-generated Super Bowl ad ever. It did so with the same studio that did Coca-Cola’s first AI-generated Christmas ad.
    

26. My favourite ad is probably Jurassic Park Xfinity…and Svedka was definitely the worst one.
    

27. Overall, the ads were pretty meh and Jack Butcher has a solid theory: “One simple hypothesis on mediocre superbowl ads, LLMs telling everyone their ideas are brilliant”.
    

28. NBC is in the THICK of it right now. The media giant spent $8B on sports rights for 2026, up 2x from 5 years ago. In the first two weeks of February, it’ll have the Super Bowl, Milan Winter Olympics and NBA All-Star Game. The total ad haul from these events will be $2B+ and provide a ton of marketing lead-in for “new shows and films from Comcast’s Universal Pictures, including the new Minions and Super Mario Bros. movies, as well as Steven Spielberg’s sci-fi flick Disclosure Day. The Super Bowl will also lead into a new television series on the Peacock streaming service called The ’Burbs.”
    

29. Between Bad Bunny and the AI ads, my main takeaway from Super Bowl LX is that dressing as a tree during a live musical performance will be one of the only jobs left for humans when AGI hits.

Some other wild posts (including 21 Savage rolling up to the Super Bowl with Kylie Jenner):

Jony Ive & Ferrari Collaboration

Speaking of Jony Ive, his firm LoveFrom partnered with Ferrari to design the steering wheel, dashboard and interior for the luxury carmaker’s new EV SUV (Luce).

The vehicle’s body won’t be unveiled until later this year (which gives me just enough time to YOLO some World Cup and midterm election prediction market bets to afford this bad boy).

The design idea was to blend the tactile and digital controls.

My basic read of the timeline was that a lot of techy folk loved it but car aficionados were underwhelmed.

Here’s a representative post from Hacker News:

In case anyone was wondering what the Apple Car would have looked like inside, it would have been roughly this.

As an Apple Car™ it makes sense, but as a Ferrari it’s incredibly soulless and oversimplified. This Ive design aesthetic (Dieter Rams’ aesthetic really) is fine on consumer electronics where you want the device to disappear and give way to the display, but on something as emotional as a vehicle (Ferrari especially), this design falls flat.

I do hope some of the design details work their way through the industry (e.g. using glass instead of gloss black plastic, convex glass to add depth to digital gauges), but I hope the rest of it stays as a one-off experiment demonstrating the hubris and one-dimensionality of a top designer.

LoveFrom is reportedly charging up to $200m a year for top-tier clients and has also worked with Airbnb, Moncler, Christie’s Auction House, King Charles III on his Coronation Emblem and OpenAI (the startup acquired Jony’s separate AI hardware startup “io” for $6B in equity last year).

Ive named the firm — which employs many former Apple colleagues — LoveFrom in honor of Steve Jobs, who said one of the ways to express appreciation for humanity was “the acting of making something with a great deal of care and love”, per NYT.

Jordan Golson has more details on the LoveFrom and Ferrari partnership:

Before LoveFrom drew a single line, they spent six months on research. They presented Ferrari with four books — substantial, rigorous volumes printed in both Italian and English, left page and right page, covering philosophy, design history, the cultural significance of Ferrari within Italy, the relationship between human attention and physical interaction. These weren’t mood boards. They were arguments — about why certain assumptions held, why others didn’t and what first principles should govern the design of a car interior in 2026.

I’m not saying these books are worth $200m but they look real baller.