· Qasar Younis
[00:00:00] S1: We are a very classic product business. The way we make money is licensing. It's really a straightforward relationship with customers. We do a weekly live all-hands inside the company, and we're a little over 1,000 engineers, to give some scope of how big the company is. I always say we want to be very innovative on our technology and very boring on our business model. And when it's the other way around, that's when maybe you get into trouble — when you have very boring products but very innovative ways to do accounting around them. I think that's probably evidenced by the fact that our last round was BlackRock and Fidelity before that. So these are very traditional, conservative investors who do actual diligence. Not to say that venture investors don't. Why I bring that up is I think as a founder and as a company, and as I'm speaking to other founders here, it should be really easy to understand your business. Your customers should have a very clear understanding of your incentives and your motivations, and how and where you make money and where you don't make money and what you don't want to do. So for us, it's — let's make your products, that's our end customers, better. And we make them better by putting some intelligence into them.
· S0
[00:00:00] S0: Can you talk about the actual customer base? I was reading that 18 of the top 20 automotive manufacturers are your customers and you guys expanded into other areas — Qasar, I think you were talking about how we're not just land autonomy anymore, we're sea, we're space, a lot of other industries that you guys are going into. Maybe just give the audience a sense of the different customer buckets that you guys work with. And to my understanding, it's also quite global. So give us a little bit of a feel of the different countries that you guys work with too.
· Qasar Younis
[00:00:00] S1: Our customers typically, but not exclusively, are manufacturers. So they're people who make physical machines. And I say not exclusively because we also work with folks like somebody who's, let's say, a mining operator or somebody who runs a port, and they're automating a heterogeneous mix of machines. And those machines have to talk to each other and work with each other. And we provide, again, either Dana — the platform that is the tooling side — or the actual intelligence that a manufacturer would use and then embed into their machines and make their machines more intelligent. On the verticals — in terms of the buckets — it's all the big verticals that make machines and deploy machines in the real world. It's automotive, it's commercial trucking, it's defense, it's construction, mining, agriculture. I think, in the short horizon, robotics, humanoids, space — anywhere where there's a physical machine that's moving around people or goods or information. And so that's the verticals. And it's frankly fairly evenly split. I think a lot of times people think we're an automotive-only company. It's frankly a minority of our business, quite evenly split. And we're also quite international, as you mentioned. So we really work across the globe. Our first international offices were almost right when the company started. Again, that's also part of the founding story. I've lived in Japan and Germany, so obviously opening offices in Detroit, Japan, and Germany as literally the first three offices for us makes sense. And then as we got into defense, going to D.C. — all fairly logical things. We always like to be close to our customers, and that's a good reason to have international offices. But also there's a lot of engineering talent, frankly speaking. This is not just, as Peter mentioned earlier, you have to know AI and you have to know how to optimize models. There's a lot more to our technology. We find people really around the globe that can help us succeed in our mission.
· S0
[00:00:00] S0: From an outside-in perspective, it's actually quite hard to pin exact direct competitors. There are synthetic data providers. You could have big platforms like Nvidia. You mentioned Tesla, which is more of a vertically integrated, full-stack operator. I'm curious how you guys think about competition and whether there are some companies that you feel are in your path?
· Qasar Younis
[00:00:00] S1: In conversations like this, it's important to define the word competition, because there are a lot of companies that play in, let's say, self-driving, but that doesn't necessarily make them competitors. Waymo is an example. We're both ex-Googlers. Is Waymo a competitor? Not really — mainly because they don't take money out of the bucket that we're taking money out of. We're selling, let's say, to manufacturers. Waymo is doing a robotaxi to consumers. Now, if we did a robotaxi to consumers, or Waymo sold to manufacturers, then you'd be more of a direct competitor. But it's not really a competitor. You're correct that there isn't really an Applied Intuition, frankly, out there, but there are many companies that compete with portions of our business. So there are companies that make something in construction or mining or something that'll make something in automotive. From our own team, we get asked these questions all the time about how should we think about competitors and things like that. I fall into the classic YC model here, which is you should be aware of the competitors, you should fight them aggressively, but you can't let them dictate your future because they are a different company with different skills. And these markets are really, really, really big. Competition becomes really important if you are in a small town and there are 1,000 people who live there and the 1,000 people are gonna go to one shoe store or two shoe stores, then competition becomes really important because it is a little bit of a zero-sum game. There's a finite amount of shoes they're gonna buy. In our business, the market is growing so rapidly and so aggressively that let's say you wrote down all the sub-competitors for Applied, all of them could be successful and Applied Intuition could be successful because the markets are so big. One way to also think about this, again, I'm talking to founders here of young companies. If you have kids, you see the image of the universe where they show the sun, Mars, and Earth and stuff. It's just there to understand the Earth's relation to Saturn and Jupiter. If you actually have that at scale and the sun is like the size of a basketball, the Earth is like many, many tens of feet away, and it's like a little pin. It's like the head of a ballpoint pen. And so all this vastness is this black empty space.
· Qasar Younis, S0
Markets are kind of like that. People focus a lot on how close these companies kind of look to each other, but the markets are so vast and so big, they actually don't really impact each other's gravity. And I fall very much into the view that if we don't succeed, it's because of us. So if we execute, we're going to do fantastic. And I think this company can be honestly, certainly 10x, if not much, much bigger. And I think before, when we used to say things like this, like there will be a multi-hundred billion dollar physical AI company, people would say that doesn't really make sense. Now you see with companies like SpaceX and Anthropic and OpenAI how big they've gotten, and they're hard tech companies that are just really focused on one thing. [00:00:00] S0: There does seem like there's a real renaissance of people building physical and hardware companies. Bezos and Prometheus, you have Travis Kalanick and Atoms, and I think just today a company called like Terraform or something that's building robotic mining technology. It does seem like there's a lot of urgency and ambition to build into the physical world, and it's hard to imagine any of these new entrants building physical technology without some sort of intelligence baked into it. So I wonder how that's playing out and how you guys think about it and whether that may or may not dampen some of the demand for your solutions.