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01:00:58 · Kosta, S5, Sam
[01:00:58] S0: You do. [01:00:58] S5: Like, why why is FedEx a relatively low margin business? Why are a lot of these operationally complex businesses lower margin? A lot of it is because of the human coordination that's involved. So the stakes of actually getting this right are very high. They have a very rational incentive to do it. It's super complex. Right? We essentially take the last hundred years of management science, throw it in the garbage, and now we've got to kind of rebuild these systems while actually flying the plane and decide what the humans do. Yeah. There's a huge amount of complexity, but there's a huge incentive to do it. And I think five years is a good estimate. [01:01:27] S1: Yeah. You spoke to to Michele yesterday. Yeah. I really enjoyed the conversation. One of the things you asked him was what is a business if you were to if he was to start a business, what would he go and start? And he said, the thing that's most interesting to him is agents or sorry, AI plus and then insert business function. I want to kind of double click on that specifically. Like, is that a huge opportunity? I'm fascinated about it. I think you kind of hinted a little bit in your last answer, but kind of, yeah, just double click on that. I'm really curious, like what you think about that.
01:02:01 · S5, Sam, Kosta
[01:02:01] S5: Well, it's it's funny because you... I mean, x is amazing, but I... We also have to think for ourselves because we've kinda gone through this cycle of first they were rappers. Yes. You know? Now they're domain specific harnesses. Incredible. Yeah. You know? Yeah. Not that different, actually. Look, think when we have intelligence as a primitive, it's sort of like cloud as a primitive. It's like, okay, what are you gonna do with the primitive? Like, here's AWS. What do you do with it? You know? You've gotta, like, build the applications on top of it to actually get the economic value of that intelligence primitive. So that's what I think all of the domain specific work is going to do. Yeah. And so much of the domain knowledge is tacit. Right? Like, what's the difference between a tenured employee and a new hire? What's the difference between an attorney that's been practicing for thirty years versus a new graduate? A lot of it is this unspoken tacit knowledge, this knack for getting things done. And I think making that knowledge explicit and starting to program it into the models, it's what's gonna create differentiation in the applied domain. [01:02:52] S1: Yeah. Think it's why I'm so bullish on Microsoft. We've... I've been talking about Microsoft. I'm very bullish on Microsoft just because... [01:03:00] S0: Yeah. I don't know. I just
01:03:00 · Kosta, Sam, S5, Fabian
[01:03:00] S0: Yeah. I don't know. I just [01:03:01] S1: think the ability of them to build out the AI infrastructure side, but then also they have a throughput into the enterprise, directly into the enterprise. They're the only unique business that's able to have that. And so, I just see that as a huge moat. And then you have copilot, is obviously that kind of like throughput. And I think, yeah, what Satya Nadella is doing is incredible. I don't know what's your what's your take on that. [01:03:26] S5: Now look. I mean, he's on x, and he's had some great takes, [01:03:29] S6: but it's
01:03:29 · Fabian, S5, Sam
[01:03:29] S6: but it's [01:03:29] S5: it's it's very interesting how so many interested parties have been telling us to own intelligence, not rent it. Yeah. You know, Karp, Satya, and others. And I... I'm actually on the other side of that where I think for most companies, there almost is no alpha in knowing everything that they know. Like, if we knew everything about our arch nemesis, could we replicate them? Of course not. You know, if Domino's Pizza knew everything about Papa John's, could they replicate their business? No. They would be pointed to different directions, FedEx and UPS. We see this with banks all the time. Yeah. The entire team will leave JPMorgan and go to Morgan Stanley. Does Morgan Stanley become JPMorgan or substitute them? Of course not. So I think unless you're developing drugs or doing things that are very sort of IP index, I just don't think there's that much alpha in the intelligence of how a company works. I think it's an idiosyncratic combination of distribution plus brand plus product plus know how plus assumptions. So in that world, actually, I think that kind of Microsoft is is relatively well positioned, but I think they may be over telling the story. [01:04:26] S1: Yeah. Oh, interesting.
01:04:26 · Sam, Kosta
[01:04:26] S1: Yeah. Oh, interesting. [01:04:27] S0: Would love to move to move towards agents. I had a bit of a meltdown on the show the other day because I'm so bearish on instinct. And I'm so bearish on instinct because when we look at them maybe competing with Muse, I had this thesis where they're playing like this multiplayer game right now. It's Muse, it's Instinct, it's a number of these other consumer agents. But ultimately, it's a game of chicken, of like who can stack the most compute and just funnel that out and have that platform. It's not going to be paid. They're just sort of growth at all cost type of thing. I can't see a world in which Muse doesn't win that war. And after they finish playing that multiplayer game, they play a single player game where they are the only person left. But then they have to crack the adoption criteria for general consumers who don't sit outside of AI. I can't see how an instinct survives that battle because they'll have to keep raising of the 30,000,000,000 valuation they were looking at recently. [01:05:16] S1: Talks of 30,000,000,000. [01:05:17] S0: You know, I I just can't see them winning this race. I just can't see them winning that battle. I'd love to get your take on who is gonna be the winner.
01:05:17 · Kosta, S5, Fabian
[01:05:17] S0: You know, I I just can't see them winning this race. I just can't see them winning that battle. I'd love to get your take on who is gonna be the winner. [01:05:23] S5: I... So there's a cost question. There's an adoption question. So on the cost question, I guess the real question is how quickly do costs deflate? Of course, you can raise more capital, but things like JEV, I'm not sure if you guys have seen the demos of JEV and decision models operating web pages. I mean, it... It's incredible. It's lightning fast, and it's 400 x cheaper than frontier browser use. So it's possible we'll have these discontinuities in cost that actually make the model work. For me, the more interesting question is actually adoption question. You know, Muse came out. I think Zuck said 10,000,000 people have installed Muse with heavy, heavy cross promotion. My estimate is there's maybe a few million actives for all of these products collectively. I think the insight that's working is that this is a way that people like to use computers and use intelligence. But I don't know that any of them has really strong product market fit yet. Cause we all have this backlog of tedious tasks, and there's incredible satisfaction in getting them done, but it takes like two weeks. [01:06:17] S6: Yeah. Yeah. [01:06:17] S5: Yeah. And now you're sort of like, how do I incorporate this into my life, my social fabric? And I don't think any product has the answer yet.