Transcript

Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?

From 20VC with Harry Stebbings · Episode page · Watch on YouTube

· 1 h 50 min · 23,032 words · 231 timestamped sections

This is the full, timestamped transcript of "Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?", an episode of 20VC with Harry Stebbings published April 23, 2026 (1 h 50 min, about 23,032 words). It mentions 62 people, works and ideas, including SpaceX, Anthropic, Cursor, Elon Musk, Claude.

What this episode is about

In this episode, the hosts dive into the groundbreaking acquisition of Cursor by XAI (SpaceX) for a staggering $60 billion, exploring the implications of this potential deal in the context of private market valuations. They discuss Anthropic's remarkable rise to a $1 trillion valuation in secondary markets and its ambitious launch of Claude Design, positioning itself against established players like Figma, Adobe, and Canva. With insights on the evolving landscape of tech acquisitions and the strategic motivations behind these moves, this episode offers valuable perspectives for listeners keen on understanding the future of AI and tech investments.

Key takeaways

  • Cursor's $60B price tag could redefine private M&A; it's like buying a yacht for the price of a rowboat!
  • Anthropic's $1T valuation in secondary markets proves that unicorns can turn into dragons overnight.
  • With Tim Cook stepping down, Apple might need a new playbook—perhaps one that doesn't involve a fruit-themed logo!

What is discussed, and when

  1. – 10:00: SpaceX, Cursor, Cursor, xAI
  2. – 20:00: SpaceX, Cursor, Cursor, Andreessen
  3. – 30:00: Cursor, SpaceX, Cursor, Stripe
  4. – 40:00: OpenAI, Netflix, Inc., Cursor, SpaceX
  5. – 50:00: Anthropic, OpenAI, Netflix, Inc., Claude
  6. – 1:00:00: Anthropic, Claude, Claude Design, Salesforce
  7. – 1:10:00: Anthropic, Claude, Rippling
  8. – 1:20:00: Salesforce, Marquetto, Marquetto, Anthropic
  9. – 1:30:00: Salesforce, HubSpot
  10. – 1:40:00: Nvidia, Cerebrus, HubSpot, Anthropic
  11. – 1:50:00: Nvidia, London, San Francisco, Jensen Huang

Notable quotes from "Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?"

  • And then Anthropic launches Claude Design as if it wasn't eating everyone else's lunch. Now it's going after Figma, Adobe, Canva. This is an epic one. If your stock is valued at 100.
    about Anthropic · at
  • Companies. Senior engineers have already quit and gone to XI. it appear like it appears that cursor may be at least notionally the largest customer for grock for coding. Okay…
    about Cursor · at
  • Rockets and space. Yeah. look, you're right. It's it's it I think listen, Elon walked away from the Twitter acquisition, so he'll walk away from a bad deal, don't get me wrong…
    about Elon Musk · at
  • We just talked on this pod before about Figma 20 billion and about sorry Grock to inv you just said Grock to for to Nvidia for 20 billion and getting to be not have to be a…
    about Nvidia · at
  • Missing the point because there's a third player in the game here that you're not mentioning. The future SpaceX public shareholders are valuing a $20 million revenue company at…
    about SpaceX · at
  • Dollars, 5% of their market cap plus or split it with some cash to not fall behind. But Jensen stressed about Tanium. He can spend a h 100red billion, right? He already did a…
    about Jensen Huang · at
  • Turmoil, executive turmoil, everyone was using the anthropic API. It's just better. Claude, when we started the show, I was the only guy that used Claude. You guys probably…
    about Claude · at
  • Which is why we should probably spot Hang on Jason and say look I mean to your point Salesforce just announced the whole an entire headless API strategy what are your thoughts…
    about Salesforce · at

Who and what is mentioned in this episode?

People

  • Elon Musk — Person · Referenced expert · 2 mentions · first at
    Central figure in discussions about SpaceX, XAI, and the acquisition of Cursor.
  • Jensen Huang — Person · Referenced expert · 2 mentions · first at
    Discussed for his leadership at Nvidia and views on AI and China.
  • Tim Cook — Person · Referenced expert · 2 mentions · first at
    Discussed in the context of stepping down as CEO of Apple and his legacy.
    News. Cursor acquired by XAI or SpaceX for $60 billion with a $10 billion break clause. Tim Cook announces he's stepping down from Apple. Anthropic turns down $800 billion funding offers and crosses the trillion mark on secondary markets.
  • Andreessen — Person · Referenced expert · 1 mention · first at
    Mentioned as a key figure in venture capital and AI investments.
    Like again, if you're in the Figma IPO and you're locked up 12 to 18 months, that's been brutal. But Andre's all in on the on Elon anyway, right?
  • Demis Hassabis — Person · Referenced expert · 1 mention · first at
    Mentioned as the co-founder of DeepMind and a leading AI researcher.
    That said, I think you can still build unbelievably great AI companies as we have done in London with Demis and DeepMind and with you know Matty at 11 Labs. And I think it's…
  • Ben Horowitz — Person · Referenced expert · 4 mentions
    Mentioned as a co-founder of Andreessen Horowitz and key figure in venture capital.
  • Benioff — Person · Referenced expert · 1 mention · first at
    Mentioned for his leadership at Salesforce and strategic moves in AI.
    Today you're exactly right Ben off would if Ben off could get a hundred billion to buy something to change the face of Salesforce, the LinkedIn of AI, he would do it tonight.
  • Gary Tan — Person · Referenced expert · 1 mention · first at
    Mentioned in the context of his role in the tech industry and investments.
    Twitter with him and Gary Tan a year ago. Okay, Gary Tan's got a big job, right? Gary Tan looks like he's aged eight years since the video. Michael looks the same. This is the…
  • Gary Vaynerchuk — Person · Referenced expert · 1 mention · first at
    Mentioned in the context of his role in the tech industry and investments.
    Twitter with him and Gary Tan a year ago. Okay, Gary Tan's got a big job, right? Gary Tan looks like he's aged eight years since the video. Michael looks the same. This is the…
  • Ryan Smith — Person · Referenced expert · 1 mention · first at
    Mentioned in the context of his experience with Qualtrics and acquisitions.
    A startup for hundred billion. this might be. And I remember back in the day at Saster Annual, Ryan Smith came and Qualrix had just been acquired for 7 billion and our jaws dropped back then.
  • Sam Bankman-Fried — Person · Referenced expert · 1 mention · first at
    Mentioned as an early investor in AI companies.
    Outcome for the VCs. Great outcome for I mean open a just as a reminder everyone Sam Bankman Freed did the seed. Poor Sam. They and they liquid did his job and sold it for a 1x…
  • John Terminus — Person · Referenced expert · 1 mention · first at
    Mentioned as the new CEO of Apple following Tim Cook.
    Down from Apple after one of the greatest runs, 350 billion to 4 trillion. John Terminus will take over as new CEO. 24 years in Apple for him.
  • Reed Hastings — Person · Referenced expert · 1 mention · first at
    Mentioned in the context of leadership changes in tech companies.
    It all the right way. They did it at the perfect age optically. But the big question along with Reed Hastings and Shaoo and others is like folks turn over every year. And I'm…
  • Ben Affleck — Person · Referenced expert · 1 mention · first at
    Mentioned in the context of his startup acquired by Netflix.
    Declining, just like net new customer count, right? If it's declining, you're hiding. And I think Netflix just bought Ben Affleck startup for like 300 million bucks, right? Or something like that, Harry. Like they're not they're well aware.
  • Michael (Cursor CEO) — Person · CEO of Cursor · 1 mention
    Key figure in the $60 billion acquisition deal
    Ago. Okay, Gary Tan's got a big job, right? Gary Tan looks like he's aged eight years since the video. Michael looks the same. This is the time to sell because you don't listen…
  • Kirk — Person · 1 mention

Companies & orgs

  • SpaceX — Company · Business focus · 21 mentions · first at
    Discussed in the context of its acquisition of Cursor and its strategic moves in AI and space technology.
  • Anthropic — Company · Business focus · 17 mentions · first at
    Highlighted for its AI advancements, competition with OpenAI, and market valuation.
  • Cursor — Company · Business focus · 16 mentions · first at
    Acquired by SpaceX/XAI, discussed for its strategic importance in AI and coding markets.
  • OpenAI — Company · Business focus · 9 mentions · first at
    Compared with Anthropic in terms of AI advancements and market position.
    Okay. As we're taping this, OpenAI is going to launch autonomous agents, Open Claw on steroids 24/7. Okay. three, I've run my I've done an experiment over the last week. I've run my own workflows.
  • Nvidia — Company · Business focus · 8 mentions · first at
    Highlighted for its dominance in AI chips and market valuation.
  • Adobe — Company · 2 mentions · first at
    And then Anthropic launches Claude Design as if it wasn't eating everyone else's lunch. Now it's going after Figma, Adobe, Canva. This is an epic one. If your stock is valued…
  • Salesforce — Company · Business focus · 15 mentions · first at
    Discussed for its headless API strategy and position in the AI and enterprise software market.
  • xAI — Company · Business focus · 4 mentions · first at
    Part of the discussion around the acquisition of Cursor and its role in AI.
    Buying them for 60 billion. there's a lot of stuff going on between these companies. Senior engineers have already quit and gone to XI. it appear like it appears that cursor…
  • Thrive Capital — Company · Business focus · 4 mentions
    Mentioned as an investor in key AI companies like OpenAI and Cursor.
    Been couple hundred x. openai did the A I think. actually OpenAI did another seed. Adre and Thrive did the A, then thrive led the B and doubled down the whole way through. I…
  • Figma — Company · Business focus · 3 mentions · first at
    Discussed as a competitor to Claude Design and its market challenges.
    Only 10x end of year revenue. Seriously, we just talked on this pod before about Figma 20 billion and about sorry Grock to inv you just said Grock to for to Nvidia for 20…
  • Cerebrus — Company · Business focus · 2 mentions · first at
    Discussed for its IPO and position in the AI chip market.
    How do we feel about this? Is this going to go out well? They're now at where are they? 510 million revenue in 2025, up 76% from 290 and 24.
  • Andreessen Horowitz — Company · Business focus · 1 mention · first at
    Mentioned as an investor in key AI companies like OpenAI and Cursor.
    Been couple hundred x. openai did the A I think. actually OpenAI did another seed. Adre and Thrive did the A, then thrive led the B and doubled down the whole way through. I…
  • Rippling — Company · Business focus · 1 mention · first at
    Highlighted for its growth and position in the payroll and HR software market.
    Fascinating was Ripling crossing a billion, growing 78% yearonear. is this the new is this the new bar for a great B2B IPO?
  • DeepMind — Company · Business focus · 1 mention · first at
    Mentioned as a leading AI research company based in London.
    That said, I think you can still build unbelievably great AI companies as we have done in London with Demis and DeepMind and with you know Matty at 11 Labs. And I think it's…
  • Netflix, Inc. — Company · Business focus · 8 mentions · first at
    Mentioned for its challenges in the AI era and content strategy.
    Declining, just like net new customer count, right? If it's declining, you're hiding. And I think Netflix just bought Ben Affleck startup for like 300 million bucks, right? Or something like that, Harry. Like they're not they're well aware.
  • HubSpot — Company · Business focus · 7 mentions · first at
    Discussed in the context of its competition with Marquetto and AI strategy.
    Way like we're leaving Hub Marquetto because of this drama the crappy API they're can spam we will leave Marquetto this summer for whoever has the best API and it probably…
  • AWS — Company · Business focus · 4 mentions
    Mentioned in the context of cloud services and AI infrastructure.
  • TSMC — Company · Business focus · 4 mentions
    Mentioned in the context of semiconductor manufacturing and AI chips.
  • Apple Inc. — Company · Business focus · 2 mentions · first at
    Mentioned in the context of Tim Cook stepping down and its AI strategy.
    Apple Adobe I would argue that Adobe has to have an AI strategy it's existential Apple is somewhere in the middle you know yes it's pathetic that Siri is not good but you know…
  • Stripe — Company · Business focus · 2 mentions · first at
    Mentioned in the context of potential acquisitions by JP Morgan.
    Billion a year to be worth 50 to 100 billion a year to kind of meet the Jason criteria of bigger than this if JP Morgan wanted to buy Stripe you actually would be right so I can imagine a few circuit yeah but and then you also have the.
  • Benchmark — Company · Business focus · 2 mentions · first at
    Mentioned as an investor in Cerebrus and its IPO.
    Credit to Benchmark Eric. Credit to Steve at foundation. Credit obviously more than anything to the team. this is a 10-year journey. And I think in a way that wasn't true a year.
  • Canva — Company · Business focus · 1 mention · first at
    Mentioned as a competitor to Claude Design in the design software market.
    Every market. So couple of things. One is how do you think it impacts I mean I believe can the Canva design engine is at the heart of what they've done on Claude. How do you think this impacts claw Canva versus Figma?
  • Grock — Company · Business focus · 1 mention · first at
    Mentioned in the context of its acquisition by Nvidia and market position.
    We just talked on this pod before about Figma 20 billion and about sorry Grock to inv you just said Grock to for to Nvidia for 20 billion and getting to be not have to be a…
  • LinkedIn — Company · Business focus · 1 mention · first at
    Mentioned in the context of Salesforce's attempted acquisition.
    If they identified the perfect target they like remember it's minor but remember when Ben off was willing to give his next first born to buy LinkedIn he tried everything he…
  • 11 Labs — Company · Business focus · 1 mention · first at
    Mentioned as an AI company based in London.
    Unbelievably great AI companies as we have done in London with Demis and DeepMind and with you know Matty at 11 Labs. And I think it's easier to be in Europe because with your…
  • Qualtrics — Company · Business focus · 4 mentions
    Mentioned in the context of its acquisition and market position.
    A startup for hundred billion. this might be. And I remember back in the day at Saster Annual, Ryan Smith came and Qualrix had just been acquired for 7 billion and our jaws dropped back then.
  • JP Morgan — Company · Business focus · 2 mentions · first at
    Mentioned in the context of potential acquisitions in the tech industry.
    Billion a year to be worth 50 to 100 billion a year to kind of meet the Jason criteria of bigger than this if JP Morgan wanted to buy Stripe you actually would be right so I can imagine a few circuit yeah but and then you also have the.
  • Tanium — Company · Business focus · 1 mention · first at
    Mentioned in the context of Nvidia's concerns and market position.
    Dollars, 5% of their market cap plus or split it with some cash to not fall behind. But Jensen stressed about Tanium. He can spend a h 100red billion, right? He already did a…
  • Snap Inc. — Company · Business focus · 1 mention · first at
    Mentioned for its workforce reduction and market challenges.
    And for anyone listening, SNAP cut a thousand jobs, 16% of the workforce, and the stock popped 11%.
  • Cursor — Company · 16 mentions · first at
    Now, this week on the agenda, breaking news. Cursor acquired by XAI or SpaceX for $60 billion with a $10 billion break clause. Tim Cook announces he's stepping down from Apple. Anthropic turns down $800 billion funding offers and crosses.
  • Marquetto — Company · 4 mentions · first at
    I'll give you one last story to compare so the oldest piece of software uses Marquetto. Okay, terrible email marketing service. About two weeks ago, it started to violate the can spam act.
  • Apple — Company · 3 mentions
  • RAMP — Company · 3 mentions
  • Cerebras — Company · 1 mention · first at
    I think you have to do Cerebras first. I just have a prediliction for good over bad.
  • Bill — Company · 1 mention
  • MuleSoft — Company · 1 mention
  • Rippling — Company · 1 mention
  • XAI — Company · 1 mention

Products & tech

  • Claude — Product · Product focus · 11 mentions · first at
    Anthropic's AI product, discussed for its advancements and competition with OpenAI.
  • Claude Design — Product · Product focus · 4 mentions · first at
    Anthropic's new design tool, discussed as a competitor to Figma and Adobe.
    And then Anthropic launches Claude Design as if it wasn't eating everyone else's lunch. Now it's going after Figma, Adobe, Canva. This is an epic one. If your stock is valued at 100.
  • Marquetto — Product · Product focus · 4 mentions · first at
    Discussed for its issues and competition with HubSpot in the marketing software market.
    Us to you know we have we're winging it now but I don't same with Marquetto and HubSpot by the way like we're leaving Hub Marquetto because of this drama the crappy API they're…
  • Figma — Product · 6 mentions
  • Canva — Product · 1 mention
  • Slack — Product · 1 mention

Places & events

  • London — Place · Setting · 3 mentions · first at
    Mentioned as a hub for AI companies like DeepMind and 11 Labs.
    I think some of the best AI minds or the majority of the best AI minds want to be in Silicon Valley. Quite rightly. You're seeing the recentralizing of power back to Silicon Valley. more so than I.
  • San Francisco — Place · Setting · 2 mentions · first at
    Mentioned as a hub for AI companies and tech innovation.
    22 knowledge will be widely dispersed but there was a period of 2 or 3 years where the knowledge was available tribally in hack houses in San Francisco and wasn't available…

Full transcript with timestamps

I'm not sure they're buying them for 60 billion. There's a lot of stuff going on between these companies.

Now, this week on the agenda, breaking news. Cursor acquired by XAI or SpaceX for $60 billion with a $10 billion break clause. Tim Cook announces he's stepping down from Apple. Anthropic turns down $800 billion funding offers and crosses the trillion mark on secondary markets. And then Anthropic launches Claude Design as if it wasn't eating everyone else's lunch. Now it's going after Figma, Adobe, Canva. This is an epic one. If your stock is valued at 100 times revenues, you can buy things that are trading at 10 or 15 times revenue all [ __ ] day long.

I think there'll be a hundred billion deal in the next 12 months. I think this will stand as the high water mark of private M&A for a decade.

Ready to go. Boys, we recorded yesterday and last night some very big news happened. And I messaged this morning saying, "I think we should actually do a little segment this morning and discuss this because it is so notable." And so last night it was announced that Curser was Rory, you're going to correct me whatever I say. So I'm just going to do it and you can correct me. Cursor is being acquired by XAI SpaceX in other words for $60 billion with a break clause of $10 billion by the end of the year. Rory, please correct me on

it's it's too Erica. We shouldn't overthink. I mean, basically what it is is they have an option to acquire cursor and if they don't, they pay $10 billion for the work. But it amounts to the same thing, right? And yeah.

Well, we'll see. We don't listen, it's very interesting because first of all, this is an epic deal, right? if it happens 60 billion in about three years from seed funding. I mean we thought whiz was big guys. We thought I mean we when we started the show we were talking about wind surfer that was two and a half billion. Now it's 60. I mean these are numbers that we have not seen in three billion from founding. Now having said that look we haven't read whatever the deal is right. Um to me it looks a little it looks I'm not sure they're buying them for 60 billion. Um there's a lot of stuff going on between these companies. Senior engineers have already quit and gone to XI. Um it appear like it appears that cursor may be at least notionally the largest customer for grock for coding. Okay, they have their market share has fallen and they've already committed to using a lot of the the the the million GPUs that SpaceX

whatever we're calling it is in Colossus. So, there's a lot of stuff going on here and what this call and option is and how much it's tied to Cursor having enough of a state-of-the-art model that they're worth buying because an ID isn't enough. There there's a lot up in the air and it's probably why the deal is structured like this beyond the fact that SpaceX is going public which adds to the complex. There's just there are a lot of moving pieces here. So, I wouldn't be surprised if it doesn't close because I think there are a big milestone that needs to be hit. The cursor needs to make progress. And maybe I'm wrong. May maybe I'm wrong.

Wow. Such a lot to unpack, but I I'm in no particular I want to actually cover all this, but first of all, you the first sentence is this is this is the biggest private acquisition ever in venture. It used to be um whiz at 32. Before that, it used to be WhatsApp at 16. I mean individual private check before going public. Now it's a $60 billion outcome in three years. You're right. So start with if this deal closes in three months. This is the biggest ever privately held venture acquisition. Period. Full stop. End of story. An amazing result. So you're right, Jason.

We before you get into the noise that that that's the venture takeaway. Jesus. And I know and wow. And we'll come back to who's

it didn't even take 20 years like most of our funds take. This was this will be three and a half.

Big picture here guys. It actually makes sense. I mean, I was actually thinking last night of doing like a little cute tweet before I got your note, Harry. It's like, you know, you got these guys called Curser walking down the street saying, "Hey, good news. We got a exploding business, couple billion dollars in ARR, but bad news, we have shitty gross margins cuz we need our own model and we need compute." And Elon goes, "Hm, hold that thought. This is a guy walking around with a whole bunch of compute, a reasonably good model, and literally no revenue. It's like a marriage made in heaven, you guys." I mean, because look, let's get real here.

There's not a whole ton like it's one of those deals that makes sense for both sides, which is why I think it'll close, right? Which is different than saying it makes full financial sense. I'll come back to that. But if you think about it from from SpaceX's perspective, all the narrative has been, you know, SpaceX is amazing, Starlink is amazing, WTF with this X.AI, why did they stick in Twitter and X.AI? I know Elen loves AI, but it makes my head hurt, right? Because the truth is they'd spent 20 billion plus or minus on the most amazing data center, the Colossus data center with literally hundreds of thousands of GPUs, but they're not doing a very good job of selling them. So they have relative little business, right?

Which, you know, all other things is a bad place to be. Now, you know, capacity is scarce. So, I'm sure they could have found kind of, you know, white label work selling to, you know, one of the hyperscalers. But instead, they found this company that's in the mother lo, the mother of all AI markets, which is coding, that has customers, has revenue, but has shitty gross margins because it doesn't have yet a full standalone model and massively needs compute. So they put this on top of their thing and the vertically integrated thing just looks a lot more attractive. You literally have a company that's spending that making three billion in revenue and spending three billion on gross margin and you have another company that's burning 18 billion. You put them together and the three billion gets canceled and at least they have some revenue. It's still not enough to cover the X.AI nut in terms of

unless they can grow this thing, but at least looks like a business now at le. And I think what's really clever from SpaceX's perspective is they couldn't do it before the IPO cuz you can't close that deal. It delays everything. It's actually a very clever structure. So they're basically going to be able to say to the public, you know, you love Starlink and you love our space business and you didn't like this other thing, but we got a plan to fix it. Once we close for two trillion, we'll exercise our option. will buy this thing and suddenly will be a $4 or5 billion revenue AI frontier lab which my claude code equivalent is called cursor and I actually have the rest of the stack and there I told you I'd make a good business out of this

which is which is an important note just for people to understand that this is not a transaction closing stay this is in 6 months post going public and it's a very strategic way for them to do it because they can't do it now just before going public

and that's why that's why I think of it as an optimum you and you're right Jason, there's been some commentary that said maybe this option is in part Elon doing a try before you buy. Let's see if the model works on our stuff and vice versa. And if it doesn't, we'll just pay you 10 and walk away. I don't know. I'm not going to guess. And there's probably some of that. But fundamentally, it it's costing you nothing today because you're not writing the check today. And what you're basic what Elon is basically saying is if my IPO happens, and it probably should, and I want to buy this thing, I will cuz I can. And if it doesn't, I'm promising $10 million that I don't plan to have to give unless, god forbid, the IPO doesn't happen. So, and it it kind of mentally says, I haven't fixed this this story today, but I have a plan to fix it. You can see the plan to fix it. So, stop bugging me in the

road show about X.AI. Let's talk about rockets and space. Yeah. I mean, look, you're right. It's it's it uh I I think listen, Elon walked away from the Twitter acquisition, so he'll walk away from a bad deal, don't get me wrong, if things change. But you don't you don't promote it the way SpaceX did all over X. Uh if you're not basically saying this deal is going to close, right? This isn't a change. Otherwise, if it's just vendor financing with an option to buy, you bury it. You bury it because it's roundtrip revenue so that someone will use someone will use our our colossus for a for for a for model training, right? You'd hide it if it was just a vendor deal, right?

And a even though I don't think the whole I'm going to say something weird. Even though I don't think the whole business effort here makes sense, right? Trying to enter this market, you know, trying to be the third or fourth foundation model player, you know, as X.AI/ um SpaceX, I don't think it made sense. But once you've decided to do that, this deal makes sense at the margin because you've incurred all the negative parts of being a subscale hyperscaler with 20 billion in burn and now at least you have a business. So I'm with you, Jason.

I think they're I think they're pushing this because they're like, "Oh, this makes sense and actually solves a problem for us and obviously solves a problem for cursor in the sense that it, you know, makes the P&L of their business look very different and therefore it's a win both sides and it closes. I mean, we can talk about

if I if I push you, who is getting a better deal? They're expected to finish the year at 6 billion. So, this this is only 10x end of year revenue. Seriously, we just talked on this pod before about Figma 20 billion and about um uh sorry Grock to inv you just said Grock to to to for to Nvidia for 20 billion and getting to be not have to be a public company CEO was the second best gift to sales off selling for two billion. This is a gift. They don't have to do the hard work. They've only been doing this for three years. They've only been doing this for three years. I was watching some images of like what's the what's Michael's last name? The CEO.

True. Okay, I was watching something on Twitter with him and Gary Tan a year ago. Okay, Gary Tan's got a big job, right? Gary Tan looks like he's aged eight years since the video. Michael looks the same. This is the time to sell because you don't listen I this is maybe this a little meta, but what I've learned as a founder is you don't get it doesn't hit you until around year four to five. This is just the way humans are, okay? and and and and he's young, but look at founders you've invested or met with around year four to five, the weight's there. Okay? You can see it in the bags under their eyes, whether they're 21 or 61. And and you got to double down. At four to 5 years old, you got to sit around and say, "Do I want to sign up for another tour of duty? These guys don't even have to do a second tour of duty. They're out at 80 billion. This is pretty good deal, Harry. If you're 10 or 15 years in, you know what to do.

Three years in, you go, you got to go home. There's no guys, you've got to go home after three years for 60 billion. Three years. Three years after 60 billion.

Can I help you on this? It's You're thinking about You asked which of the two is getting a great deal? And the answer is they're both getting a great deal for two,

right? What? You got to give one name. No, I'll tell you who's losing. Give me hear me out. There's two reasons they're doing a There's two reasons they're getting a great deal. Everyone's getting a great deal. The first is it actually industrially makes sense. The two things go together well, right? So there's like some business logic whether or not the SpaceX Elon team can manage these kind of researchers over time. You know that's TBD given how you the X stuff has unfolded so far. But it makes industrial sense for these two companies to come together, right? Why are they both getting a great deal? Answer. You're missing the point because there's a third player in the game here that you're not mentioning. The future SpaceX public shareholders are valuing a $20 million revenue company at $2 trillion, which is a h 100 times revenues. If your stock is valued at 100 times revenues, you can buy things that are trading at

10 or 15 times revenue all [ __ ] day long, right? As long as SpaceX is worth two trillion, then if Ela wants to scratch an itch to clean up a b a subsidiary of SpaceX that isn't quite working out and he can chuck 6 billion on the table, it's for context here, it's 3% of SpaceX alleged market cap in return for 15 to maybe 20% of their total revenues.

Yeah. I mean, it's such an important point like it's not it's not even material.

Yeah. When you have a high price stock, you can buy any pretty things that you want. And what happened here is like and you should

and you should abs well you should because it may not last right this is the opposite when we we did the the other versions of pod we were talking about how so many public software companies if you're now trading at 10 billion you can't even spend a billion to buy a couple of kids right for Elon this is immaterial to SpaceX's market cap to Roy's point and the at the margin at the margin it helps that he doesn't care if he makes them billionaires

that that's another it's a microlearning but there are issues in making targets billionaires. It it is it issue as long as SpaceX is worth that kind of multiple. It's revenue accreative story accreative you know and is one of and you know and the and the reason it another reason it makes sense to cursor is the number of people who can write a $60 billion check for a roughly break even gross margin business can be counted on the fingers of one hand removing at least one or two of them. Right? Offset fingers, right? And of those acquirers, most of them in most situations would be unable to do so for the DOJ. This is the only game in town,

right? It helps to be founderled too to write a check like this. Yeah, totally. Yes. This is a

you're going to Google again. You're like, I know we did Whiz at 32 billion and it's crushing it, but we want to buy cursor for for for twice that. I mean, it's a tense board discussion, right?

If I if I'm an investor in the business, what does it mean for me? When do I get my cash? What are my LPs getting back?

You're getting a lot of money. I mean, look, you're get you're getting your cash if this deal closes, I think, in six months, which is, you know, back end of this year. Um, assuming the IPO happens in June. You're ecstatic. It means I mean, it's

And I'm getting cash or I'm getting space. Well, you're almost certainly getting stock. I again, I'm I'm going to a pine on that without looking because the the IPO is 75 bill allegedly. Again, we haven't seen we haven't seen a printed S1 yet that's been publicly unveiled, but the idea is it's highly unlikely that you're going to write raise 75 billion and write a check for for 60 bill. So, almost certainly you're getting stock. So, then the second order questions are is it registered? If you're getting that stock in the uh restricted period, is that going to be restricted too? Because the whole the dynamics of the SpaceX lockup given the size of the round are going to be one of the most interesting parts of the whole transaction. There's talk of as you say employees getting out early. is also to be fair talk about some shareholders being held in for much longer because the combination of a two trill I mean

it's going to make a difficult problem around float management slightly more complex cuz a 75 billion raise on a$2 trillion valuation is a teenytiny float right and you know going from there to the other 97% of the company being freely tradable in 6 months just doesn't work so I'm sure there's going to be a convoluted float management thing and then this stock will probably go into that. So I wouldn't be surprised to discover that as investors in um cursor congratulations you are now investors in SpaceX and you know you've got that fluctuation risk for 6 months plus or minus but you know on the other hand you are getting $60 billion shut up

and do we know if the 2 billion at 50 billion happened that round happened last month we don't

I don't know and then do we think tied together. That's what I I'll I don't know all the machinations, but I guarantee they're tied. They're tied in some fashion.

One that said, can I stop you there? I think I saw one that said it's not happening because this obiates the need for it because if you think about it, they probably had reasonable I'm just winging it here, but they probably had pretty good cash on the balance sheet, but they knew they had to spend a lot in compute. And now, one of two things is going to happen in September, October, 6 months. A, you're going to get 60 billion and you have all the compute you'll ever need from Elon. And B, you're going to get 10 billion in cash.

in which case you can buy some compute then so they can probably do some forward contracts. So if the if the round hasn't closed it probably won't close now because there's no point to it and no one would want that stock cuz that's just basically like buying SpaceX. You prefer prefer to just wait for the IPO and then if I'm in the uh if we get stock back and we were you know locked up for 12 to 18 months or whatever that is like how am I feeling as an investor? Am I still ecstatic? Like again, if you're in the Figma IPO and you're locked up 12 to 18 months, that's been brutal. But Andre's all in on the on Elon anyway, right?

If you wanted that action, you got more of it. And if you don't want that action, you're going to bite your nails. Look, you I mean, you're

wrote a blank check to Elon for the for the take private of Twitter. Of course, you're going to go long on Elon now, right? It's you're doubling down on the same founder. It's not even if I don't know the cap tables, but for Andre, it's almost like merging two portfolio companies at a meta level. Maybe not accurate but intellectually it's like that right but as yet Harry you are right and look this is where the beauty of being in early at a low basis if you're in I mean I looked at if you're in at the B which is where the A was Andre and Thrive the B Thrive led the C uh I can't remember who led but basically the C is roughly a 5x the B is a 20x I can't even calculate the A but it's huge and then the most recent round is a 2x if you're into SpaceX at 2 trillion and that's only a 2x. You're scared because there's a lot of volatility in that stock. So that's the thing. You could end up I mean I'm going

to say something heresy. You could end up breaking even. The stock could go down. IPOs do go down apparently at times. I mean Facebook went down plus or minus I think 40% from their IPO price in the first 6 months before 10xing subsequently just as a reminder. So you got risk in that deal. On the other hand, if you're sitting there at 20 times in the case of the B or 50 60 times in the case of the the A, you're like, "Oh, well, so if my 80x becomes 40x, it's still a 40x. I'm fine." So, you can roll that dice. Does that make sense?

Thinking through that, um, or it's almost, you know, it's almost a defensive move if you're like Andre, you've added value to your net asset by combining these on paper, right? You're shareholders in both, right? uh you have an IPO, it has risk, you you threw this crazy asset in there that's very immature where where the debt is exploding, right? Your balance sheet has been blown up. How can I derisk my IPO for a couple percent dilution, right? I could it's just a couple percent dilution to derisk my massive investment done. My my sense is that entire I think you're correct in your analysis, though my my comment is the entire sentence implies that Elon consulted with anyone.

My sense is Elon solved Elon's problem and everyone else is along for the ride. So they'll get the shareholder consent in the docu sign and they'll say thank you very much sir and sign. But you're right if I'm if I'm if I owned a lot of SpaceX oddly enough I mean to say it succinctly I'd have been pissed at the X.AI merger because I didn't need that delution but having done the X.AI merger I'd be like clever deal with cursor dude. You had this negative thing. Now at least you've got a full-on full stack story. Um, you know, is it the best story ever? No. Would I prefer on a standalone foundation model lab bet?

Would you prefer to own entropic than X.AI plus cursor plus the Frankenstein of Twitter? Yeah, you would. But at least it's a full stack story now. So I, you know, this is a clever deal again enabled by the 100x valuation you have or at least allegedly have, but at least 50x. I mean, even at the low end, I mean, if you play it out here, even if SpaceX trades Shark Horror at a trillion, which is a 50x revenue multiple, and even if Cursor gets to 6 billion by the year end, so it's a 10x revenue multiple, SpaceX is still buying stuff at 10x with stock that's trading at 50x.

It's a great country. Those arbitragees are real. You really should do a deal or two in those moments in time because they don't la one way or the other, they don't last, right? At the risk of stating the obvious, there is a lot more [ __ ] differentiation in putting rockets in the sky than there is making um forking an open-source IDE and running it on top of clawed code. So, I think the the boys and the folks at SpaceX have done a much harder task. So, they deserve a higher revenue multiple. But, nonetheless, it's why you can write the check with such gay abandon.

And look, if the next deal's at 120 billion, all is good. I think we just need the next exit to be at 120 billion right?

Going to your point earlier though, Rory, of comparing it to like Whiz, the other thing that's just amazing is like the scale. It's not like a little bit more. It's double whiz, give or take. I mean, literally 32 versus 60. I mean, it's it's double the lodges before.

And again, it is back to the it's like I was thinking about this this morning, you know, for arguably a much less defensible business. And I think the truth is this. It's why venture capital is amazing. If you It's the AA is don't play small ball. If you play in the big markets, if you lean into the risk in in the part of the cycle where the big guys want to win and want to catch up and want to be relevant in the space, then this kind of exit can happen even if the fundamentals aren't great and a gross margin. I mean, you know, Sequoia who might think of the Dian of the whole industry always say we hate negative gross margin businesses, right? This is a break even gross margin business but it worked because the overarching comment is AI is the biggest story of the last 5 years and big tech wants to be a player and cursor is a player in the biggest markets don't overthink it you know it's like it's the the SAS

motto who dares wins those guys dared and they won right and all the other questions aside when now the minute the tide goes out you know we saw this in 99 too you know once the tide goes out and people are like scared of.com or scared ofai. You know, all these high burn, high growth companies can get a real hit. But what you're selling now, what they were selling is a ticket to matter. And X.AI won the ticket. So to your comment on all the other guys, the factories of this world, there are 10 20, this is where Jason's point is right. There's 10 or 20 other companies that are staring at irrelevance over the next 3 to 5 years cuz they're all part of the old software development life cycle and they you know maybe they can't pay 60 billion but they're going to all have to buy themselves or build themselves into relevance. So I think a lot of these can still have decent exits. The lad's right you should be

thinking about this but you know I don't even know what computer associates does now. as part of broadcast. But however people make software in 2021, they're making it different today. And I'd prefer to be in something like factory leaning in than in some old school code development tool that doesn't matter anymore.

Another way to flip it around. On the one hand, sure you should sell. On the other hand, there's six leaders with market caps above two trillion, right? And we're adding SpaceX, so there'll be seven maybe above two trillion. They can all afford to pay a hundred billion dollars, 5% of their market cap plus or split it with some cash to not fall behind. But Jensen stressed about Tanium. He can spend a h 100red billion, right? He already did a small deal, a $20 billion tuckin. Nvidia, Apple, Meta, Amazon, Alphabet, Microsoft, all can buy a startup for hundred billion. this might be. And I remember back in the day at Saster Annual, Ryan Smith came and um Qualrix had just been acquired for 7 billion and our jaws dropped back then.

That was a lot for a software company. And I asked Ryan, will this ever happen again? He's like, I I don't see why there won't be one for 14 billion next month. He's like, it's just getting good. And he was right. It it kept the party kept going to Roy's point until it ended. I think there'll be a hundred billion dollar deal in the next 12 months. Which one it is, I don't know. But you have to you have to do there'll be a hundred billion dollar deal. This is going to be the one of three. That's my prediction. And I may be wrong. And I may be wrong, but there's there's seven folks that can do it do a hundred billion startup.

I think this will stand as the high water mark of private M&A for a decade. There. I'll take the other.

This one this clip is it's going to embarrass you, Rory. I am I used to be embarrassable but now but why me or me? because I just think it's anomalous in the sense of you know it's a combination of the absolute amount and the revenue multiple the number of you know I just think the number of people who can write the number of people who can let's do it here the number of people who can write a check for less than 10% of their market cap where that's greater than 60 billion is by definition people above 600 billion there's only eight or 10 companies above a trillion right so you it's a very finite group of people who can do those kind of deals Everyone but Elon trades at under 10 times revenues plus a min.

Yeah, pretty much min. So they're not going to do a 60 times. So if you're going to be worked I might actually contradict myself in a second. Watch this. If you're going for with the exception of Elon because he can overpay because he's trading at 100 times or at least plans to be trading at 100 times. I want to spend a little time on that in a second. Everyone else trades sub 10. So you're not going to buy anything greater than 10x which means to pay 100 billion you have to buy something worth 10 billion, right? So any rounding down as I did that I realized hm and and at that point a privately held company has to be doing let's say let's round down again 5 to 10 billion a year to be worth 50 to 100 billion a year to kind of meet the Jason criteria of bigger than this if JP Morgan wanted to buy Stripe you actually would be right so I can imagine a few circuit yeah but and then you also have the um

whatchamacallit the DOJ stuff which is obviously suspended for a while but there you go. So it's you're not impossibly wrong Jason but I just think I think this is such a special circumstances. It's a combin I mean it's it's a combination of a couple things. is it's a company trading at an amazing price feeling the imperative to execute a transaction in an amazing space where there's a company willing to transact like that right because the other the other I was thinking about is one of the the big ahas on this is Elon is so risk on I mean and you know and at what point I like how you put this he is I I would use the expression in poker when you're on tilt when you're just you know maybe you've it's not going well and your response is to double down and double down, right? If you look at the whole Twitter X transaction, unlike, you know, SpaceX, which has been a work of genius from day one, you know, it's been I

bought Twitter, I didn't want to do it. [ __ ] now I have to do it. That's 44 billion. Well, if I'm going to do that, I then I'm going to want to do the AI thing and I'm going to spend 20 billion on capex there. Got no revenue. Let's put them together. Ooh, that's not working. Let's flip them into SpaceX for 250 billion. It feels notional, but whatever. That's not great. So, let's buy um Cursor for another 60 billion. This is a guy I'm He's basically going to keep doubling down until he wins in AI. It's astonishing. It's terrifying if you're a stareholder, but that's the game he's playing and it's his company.

Let me just tell you why you're why you're wrong about the hundred billion deal, Rory. Just just process-wise, okay? And I think your math suggests I might be like I hadn't even thought about JP Morgan Stripe. That literally could happen tomorrow. Like we could open up our our our ex accounts. It would make some sense, right? Um, so that's one I even I missed. But here's what's happens in t when when times are good but of stress, which is what's happening with all the leaders. Okay. Microsoft Google.

Yeah. Yeah. I agree. I've been the one thing I have been that I don't think you guys have been. I know Harry. I've been a senior VP on the other side at a big tech company during moments of change. And what you talked about all the time is who the hell can we buy to get ahead? And so I will tell you in all of these boardrooms, especially Zuck, you could already imagine in your head they are saying I'm willing to pay up to I can I want to buy something that is gonna actually effing move the needle for us. I we'll do some tuckins. You guys can all have a chip.

You can go buy a little thing for 50 million, 500 million, maybe even a billion. Like leave me alone. The scale, you know, uh what's his name from scale can go buy something for a billion. I don't care. But I want something that will move the needle in AI. Now bring me your candidates and they will be debated but if it is above the line those deals will get done for 5% or less of your market cap. I guarantee you the discussion is h because I was there. It happens every week. Yes.

First of all even though I disagree on the number I 100% agree with you on the description. That is exactly what happens. You you wake up as the leader of this big company. You you've got your $2 trillion market cap to defend. There's a technical thing that could make you obsolete. If you can spend 5% and derisk that. You do it. I so I totally agree and a large part of why venture makes money is every once in a while you find yourself with companies that are kind of in the to-do list for corporate America and they just write huge checks. So I do agree with you. I was pushing back on the hund but do I think it's kind of like the Overton window a 10 or$20 billion acquisition from Zuck tomorrow morning people wouldn't even blink. They'll be like yeah of course he's going to do that. So you're right. I mean, so I do agree. I I was just being, as you know me, annoyingly precise about a hundred

billion, but I agree with you. Every other CEO is looking at going, hm, what do we do now in coding? What do we do now? Yeah. I mean, the other crazy thing that happens, I know it sounds crazy, but it is true. Um, in on the other side, on the acquirer side, big company, right? Once certain numbers are breached, it doesn't mean you also get 60 billion. It does not like you can't walk into the meeting and say, "I'm better than cursor." But it does psychologically change the break point for what it because when people go into deal mode in big companies as long as they can afford it they want and if they if they identified the perfect target they like remember it's minor but remember when when Ben off was willing to give his next first born to buy LinkedIn he tried everything he could every share every piece of debt he couldn't get 30 billion to buy LinkedIn that's a hundred billion dollar deal

today you're exactly right Ben off would if Ben off could get a hundred billion to buy something to change the face of Salesforce, the LinkedIn of AI, he would do it tonight. I guarantee you because he already tried to do it with LinkedIn, right? He will do 100 billion if he had it. All these guys have 100 billion. So it literally you go in a meeting and I saw it at Adobe as cloud took off like the the people's views of price changed in my tenure as a VP. As soon as you see a cursor deal, every we don't give a [ __ ] It's it's we're not the founders. It's not our money. It's not even our delusion. We don't care. What does it take to buy the next cursor? 68 million.

Done. Like, boys, I'm the corp dev team. Stepping and lumpmin, I'm the corp dev team t. Close the damn deal. When you're fighting for relevance and defending an existing business to some extent, you do what you have to do. I don't think that I, as you say, and even if I don't think they get to 100, the fact that someone's done something at 60 means something at 10 or 15 will seem like, yeah, that seems like a good idea. Let's get it done. Right. So yeah, I think it's it's expanded the overton window of doable in M&A. Yeah.

Last thing to say is this. You great outcome for the VCs. Great outcome for I mean open a just as a reminder everyone Sam Bankman Freed did the seed. Poor Sam. They and they liquid did his job and sold it for a 1x that it could have been couple hundred x. Um openai did the A I think. Um actually OpenAI did another seed. Uh, Adre and Thrive did the A, then thrive led the B and doubled down the whole way through. I don't know what the returns are on the A, but on the rest of it, I think they put in a billion and got 800 million and got roughly a 4x. You know, great outcome of everyone. It's a great venture story and, you know, all credit to the founders. I mean, this is pretty good three-year run. The two best deals that tribe that are amazing are this one and open AAI. And you know, the aggregate return on OpenAI, I think they're at a 4x, maybe 5.2x, I can't remember which.

And on this excluding the A, I saw the announcement, but excludes the A, which is [ __ ] cuz the A is going to be a 58. On the rest of the money, it's a forex. What it says is there are small numbers of growth funds that can deploy masses of capital, hundreds of millions of dollars, and get a high-end, you know, kind of venture return of a 4x, which is a good return, which is a if you're doing an A or a B, that would be a yeah, that's a that's a high end of good outcome, not yet great. You want a 10x plus on your best stuff. But the fact that you can do it on a billion dollars is what makes this special. It's not that you're going to outperform some little seed like NEO. If you want to, again, it's the classic thing, Harry.

It's actually why even though you think it's simple to onedimensionally measure venture return, it's actually not. Cuz if you have only $1 to invest, right, and you can give it to NEO and get a 16x or you can give it to Thrive Growth and get a 5x, you give it to NEO, right? And that's why from that perspective, you just rank on pure return. But if you're sitting there with two billion dollars to invest, it doesn't matter what you do with NEO. And Thrive has proven they can take two billion and turn it into six billion and you're like, give me that net to the limit and like give me that product all day every day, right? From a, you know, personal net worth perspective, if you run the math as being the you the lead GP on Thrive, it turns out to be a remarkably good business. We'll probably find maybe what thinking through Rory's point and again you guys are better experts than me.

We'll probably find that that these products aren't even the same products even more. No. Okay. Because they were never the same product. But if I can put five million, eight, 10 million into an emerging GP, okay, and they don't expand into a multi-billion dollar fund, it's it's it is irrelevant to a large endowment unless you've got a little chunk of guys that are just doing emerging managers and they'll put in the work or they'll put in the time or you're a smaller LP. And as the numbers get bigger, it will just it just doesn't matter making 10x on your NEO if it's irrelevant to your portfolio, right?

It's irrelevant. Different products for different folks. But I just got to call it to the last comment on Make and Thrive is if quote all they' done was the latestage stuff and gotten that four or 5x blended that would be wildly impressive. But the fact that on top of that they were in the A alongside Andre is almost proof you know the typical rap on only doing late is you only doing late you can't get the early round it's very impressive to have shown up for the A and doing then stuffing the money in like a fragr from the B and beyond. I mean that's really that's the best way to play that growth stage if you have enough ground game to see to get in even under the tent for the A and then you can start a billion dollars in from there on in. That's that's the way you get the best of both worlds. You got some action on the table with a 40x or 50x is my guess and then you got a lot and you know on 10 million

yay you maybe 20 million. Yay you. Right. And then you got all the action in the world on the table of 800 million at an aggregate of a four or 5x and that feels great. Don't mind you. You will be sweating that SpaceX lock up. You will know the day and the hour when it expires.

All right, boys. Onto the next bit of news. Tim Cook announces he's stepping down from Apple after one of the greatest runs, 350 billion to 4 trillion. John Terminus will take over as new CEO. 24 years in Apple for him. He's been in Harour before. How did we read this news, boys? Is this what we expected in terms of replacement? How do we feel? Well, look, Roy probably has better thoughts than me. I think there's on the one hand, he's 65, right? So, it obviously the board has been talking about this for years, right? They found their successor inside. They didn't go through the chaos of Shaoo resigning from Adobe when they still don't have a CEO, right? They did it all the right way. They did it at the perfect age optically. But the big question along with Reed Hastings and Shaoo and others is like folks turn over every year. And I'm sure Rory's going to say that. But are they all leaving

because they don't have an AI strategy? I think they are. I don't think Netflix has one. I don't think Apple has one. I don't think Adobe has a great one. Even though they have AI, like actually I learned this week AI and illustrator is great. Like AI and Adobe Illustrator is a tent. It's like it's great, but it does hasn't changed the trajectory of the company, right? So what would you do uh if you take an Apple from whatever you know 12x its market cap successfully chaperone the jobs agenda to epic heights and AI is changing the I this show gets stale like less than a week we got to do like four of these a week like I would I I would think about so I any I just don't know if if this is normal retirement or deep down folks are like Jesus I I I'm not up for this because I think most CEOs I work with are not up for is the truth. Most pre- AICOs are not they're not up you guys know this too from your portfolio. Not all but

most are not actually up for for the massive amount of what's more than 996 128. I I don't know what it is but most humans aren't up for it.

I think as a general comment on kind of AI terror for lack of a better word and the feeling that you need to be on top of this or get out. I think you're right. I think on the specifics of Kirk, I think I think it's I think just he's been operationally excellent the whole way through. He was operationally excellent taken over the job. He's run ex excellency for 15 years and I think he's operationally excellent on exit. And the proof of that is the stock barely budged. Right. I I was think right. There's some fun examples of people thinking positive things in the short term and then totally wrong. But you know the fact is that resigns not unexpectedly in the aggregate given his 65 but unexpectedly in terms of immediate timing and the stock moves less than.5%. It's it basically that says organized well-managed transition and I think he I think he was smart. I think you get out in a high recent quarter's great as you

say you can't argue with I mean it's you're right it's it's 12 or 13 it's three or 4x the revenue 3 or 4x in 15 years three or 4x the um operating income. It's 12 It's 12x the market cap and just as a reminder because they buy back shares it's 20x the stock price as a holder of the stock throughout that entire period. God bless you. Um, so you know, just a great run and handing over internal successor, which as you say is proof that you had your [ __ ] together and you had, you know, a couple of options and they went with this option.

One of the other guys had pulled back recently. I think it all I think getting out in a high is not to be underestimated at 65. I I think it's it's a home run the whole way through. And so I you just give credit where credit grew. It's one of the great runs, right? And you can tell I'm smiling because I own a lot. and and you know remember I mean it's been funny because I mean I I I do did some kind of thinking on stock price moves up and down and how they are and you know um there was angst when he took over I mean when when Jobs came back the first time the stock popped 30% in four four weeks when Jobs stepped back obviously tragically cuz he was ill the stock was and Tim took over five or 7% down which is you're quite outside the norm and in this case perfectly perfectly fine so competent execution the whole way through kind of delivering to plan and I think yeah I mean second comment you there is still some pending

you you do you have an AI strategy but honestly Jason I mean I'm going to commit heresy now right if you look at the three companies you named Netflix Apple Adobe I would argue that Adobe has to have an AI strategy it's existential Apple is somewhere in the middle you know yes it's pathetic that Siri is not good but you know you continue to build the hardware platform that everyone kind of gets AI on, I think, for a long time to come. I don't think they're going to be replaced by the OpenAI mobile phone anytime soon. And Netflix, I think it's the least AIcentric problem out there. I mean, they have interesting challenges.

Didn't get that big acquisition done. They're a media company. They have media challenges as uh Benedict Evans says so well. So, big picture. I I I don't think I mean as I say it's in the middle in terms of AI terror

on Netflix Harry not that I we want to be Yahoos on Apple and Netflix. Let's let's stick to the code. But Blockbuster I don't mean to use the old analogy. Blockbuster peaked in 2004 with 994 stores. 6 years later was bankrupt. I think what's happening when it happened with Netflix and I I'll tie this together to a macro theme that Harry brought up on Twitter and others. Um, I think all that has to happen is for these leaders to be maimed or for there to be stealth churn. I'll give you an example. I I've paid for Netflix. I I'm embarrassed to say how many years I've paid for Netflix, right? I think since since it came on uh flash drives or or CDROMs, I've been I mean, I've been I I you know, I've been paying for infinity and it it's price has gone up, but it's not worth my life to churn, right? But I watch so much YouTube and and on YouTube it's becoming more and more AI generated content. I've stealth turned off

Netflix. I'm still paying. I may pay for another year, but not but as more and more folks stealth churn off Canva because they're using AI tools. As we stealth churn, uh you know, Amelia was looking now that we've moved to Claude, she hasn't used o open AI in four months. So, we're paying for OpenAI because it's 100 bucks a month, but she's stealth churn. So, my caution is and I think this is why so many lead so many leaders at risk is stealth churn is everywhere. If you're m like and not to ramble, but I used to think as a B2B guy mows and wows and dowels were the dumbest metric. I'd get an investor update with, hooray, our our wows are up and I'd be like, you know, I I know Mammoon used to cheer that at Slack, but but that's a sign of a struggling startup. Like, I want show me the revenue, right? Show me the money. Now, I want to see the mouse and wows. I want to see your usage of your Illustrator,

of of Figma Make, of Netflix, of Canva. I want to see those going up faster than revenue. This, I think, is the ultimate B2B test or anything. Is your mouse wows and dows growing faster than revenue? If so, things are probably working for you in the AIH. If they're if they're declining, just like net new customer count, right? If it's declining, you're hiding. And I think uh Netflix just bought Ben Affleck startup for like 300 million bucks, right? Or something like that, Harry. Like they're not they're well aware that folks are watching AI generated Star Wars content on YouTube and not watching Netflix. So, uh I I don't know.

I would step down, too. I just might. I just might. Speaking of Amelia hasn't used OpenAI in 4 months and so deeply entrenched in her workflows with with Claude Anthropic turns down $800 billion funding offers. I just came back from an LP literally 10 minutes ago. I said, "What's your biggest challenge?" They managed the money for some of the largest families in Europe and they said, "All of our families just want one thing, anthropic." And the challenge we have is they don't want anything else. But they all want Anthropic and that's the only thing they want. Every dollar wants its home in anthropic right now. And it's caused secondary market prices to surge to a trillion dollars for anthropic. The implications are or the suggestions are there is a clear market belief that they have won the enterprise race and they've surpassed OpenAI now with 850 with their latest. How do we read that? How do we

reflect on that? Well, look, just two others to I mean, the fun thing in all of this, and I put fun in air quotes, is um it's so fluid. So, Sam just said, "Codeex usage is up 50% in one month." Okay. As we're taping this, OpenAI is going to launch autonomous agents, Open Claw on steroids 24/7. Okay. Um three, I've run my I've done an experiment over the last week. I've run my own workflows through both APIs. I don't care, right? So, our ability to predict what we thought two weeks ago when there was turmoil, executive turmoil, everyone was using the anthropic API. It's just better. Claude, when we started the show, I was the only guy that used Claude. You guys probably thought Claude was ridiculous. Like, what? Why is this weird guy? It's less than 1% of the market. Now, everyone's using Claude, right? I don't know what 90 days is going to bring. But, um, the fact, but I, you know, everything could change in

our development environments in a week and OpenAI could win in agents, in autonomous agents. We're just starting like agents are just getting autonomous. All these goofballs on X with their with their Mac minis and Mac macros and 11 of them stacked in their closet. Look, what have they shipped? Nothing. Okay, it's performative art. We're but but autonomous agents are what we all are going to live with. We built some and they could win. I mean, literally, they're shipping it today. It could be the best thing in autonomous agents.

Claude has a few now, too. I mean, Anthropic, but that war's just started. It's just started. So, I can't honestly predict 30 days out. So, does this does a trillion feel like entropic? Did that feel like a good deal on our last show? Yes. Am I sure it will three shows from now? I I don't know. Maybe they'll maybe they'll invert.

And if Jason is correct, look, I I believe both of you are correct. You're correct in the sense of, you know, AI is the biggest story out there and Entropic has, you know, in the last 6, nine months been credited as the new winner in that space. So by definition you're going to have huge form for that stock. So you're you're accurately representing the facts, right? You know, whether or not that will prove to have a overall holding period return from here that outpaces the S&P 500 adjusted for the risk is something entirely different, right? You know, I think look,

it's hard to do in venture. I mean, I mean, I think the trajectory from the trajectory from here is actually pretty straightforward, which is, you know, when you've got this level of white heat, you go public, right? Because up until now, as I think I said in a tweet recently, there's just been no way if we've had an entire life cycle of a technology explosion with very little access to it in the public markets, right? And it's hard to imagine going through the entire cycle of a boom and bust without letting the retail investors lose their money as part of the show, right? So that's clearly the part that's coming up. So my assumption is on topic will go public and it will be a fabulously successful IPO which is different than saying at a trillion dollars you'll feel regret about holding it 6 months later. It can be an it can be an amazing company. It cannot be worth a trillion dollars and

it can trade at a trillion dollars for a period of time. All those things can be true.

What price does it go out at Rory if you were to make a guess? Your job as an investor is to tell you what something's going to be worth four years from now. Right? Your job as a banker is to tell you what it's worth today. And those are different skills. One is about projecting the future. The other is about valuing the now. Right? I I'm not going to try and project the future on this now. My guess is I come with a lower number, but ulp is right about the present. Today, if it went public today, right, you would be fighting them off at a stick at a trillion dollars. You would have a fabulously successful IPO. And because those guys are wildly smart, um, you know, really nice profile of the CFO recently. And because the other thing that's happened is the big counterattack on behalf of open AI has been you know compute is the ball game. These guys don't have enough compute right and my guess is the entropic guys are saying

hey we got the better software how do we get as much compute as possible it takes money this is America um Jensen will take a road provided we give them cash and therefore go public. So my assumption is these guys are going to go public as we said October Q4 time period if they can as soon as it's humanly possible which is of course why they're not taking the 800 billion valuation I mean you why even pause for breath I mean especially if it gives any kind of rights which actually at this point I doubt it does they are you know I assume heads down preparing to go public cuz as long as this mood lasts you will probably raise money in the public markets for that stock at price you mightn't see three years from now with three years of execution. They should go

after the IPO. If what are they going to do? Are they going to do massive secondaries? Are they going to do pipes? Are going to do weird debt hybrid equity preferred deals? Because this isn't the last chance they're going to need epic amounts of capital, right? And so maybe it's minor, but we're we're talking about an IPO like it's a it's an event, which of course it is. But the ultimate I think the meta question is where is it easier to raise ongoing capital like perpetual capital? Is it is it really easier public than private um for these guys? Not traditionally the answer is of course but for these guys is it?

Yes. I think I'm going to say again being opinionated on this one. Yes. I think it will be even though so far it hasn't been. I mean so far the most stunning fact so far is the biggest IPO in history is talking about raising $75 billion and the biggest private round in history raised $122 billion. What that says is the biggest private round is bigger than the biggest IPO. That is bizarre and we've kind of grown accustomed to it to the point where we don't even focus on that fact. But it is of course absurd, right? Given that logic, you would say, "Oh, stay private.

You can raise more." But I absolutely don't buy that. As you know, I said, I mean, yes, Antropic could get one more round done. But the truth is the big liquid markets are public. And Jason, to your point, I think they go public. You raise a big slug of equity out of the gate. you raise more, you know, you obviously expand the capital base over time and then you have access to a whole bunch of other things, you have access to convertible preferred, you probably can do more compelling debt structures, you become a viable player for more people to lend against. So if your business model is as they think perhaps insanely but whatever to I need to raise 200 billion $300 billion and at some point you have to go public why don't you go public when the FOMO is at its peak when your relative kind of desiraability is at it peak I it would be hard for me to imagine a better moment to go public if you're entropic

than like this minute. But I'll give you this a counter-argument that I might be wrong on that admittedly I might be wrong on which is uh Figma and the need for capital. So if Anthropic does not need any more capital, go public Q tomorrow to your point, right? Or Q4 when you're ready. Go public. Go public at a trillion. Uh trade up like Figma did to two trillion, right? Uh up and write it out. But Figma's down 87% from its trough. Imagine for some reason something like this happens to anthropic. It still grows. I mean, what's Figma is still growing at top 5% rates, right? But the market has fallen out of love with Figma. What happens if Anthropic IPOs at the perfect time for a company that does not need capital, but the markets fall out of love with it?

They get worried like the construction costs go up. That those those space centers were arguing over don't work as well. Rory was right about the space centers and it falls 87%. Like just what happens to to capital raising?

Yeah. We Okay. Respectfully, no. Right? Um because if everything that you articulated happens, right? Then the person who's public wins and the people who are still private are ex existentially screwed. The Figma example is driven the Figma sound bite which I hate of the 83% decline is more accurately represented as follows. Figma priced at 35 with sensible people. Idiots drove it up to north of a hundred bucks a share. Then the same idiots sold it down. And so that's one factor, right? But then second factor, at the same time, Figma was at the tail end of a 20-year cloud software boom where the zeitgeist guest switched to the AI boom and the world fell out of love. So that took it from 35 down to where it is now, which is 20, right? That explains Figma.

I don't imagine look if there is a world where the AI zitest goes out in the neo I think we're at the start well maybe not at the start but we're the AI Zest we're not going to hit a stage in the next year or two where the people are saying oh my god the story is dead we've moved on to the next thing you you're closer to the start than the finish of the zeitgeist so I don't think you have I don't think even I think there could be a hit to the stock and I'll come back to that in a second but I don't think it's the same as Figma where literally it's like I mean what's happening at Figma is everyone's saying your operational results are are amazing but we're in love with someone else so we're just not even going to talk to you right I think if Antropic were to go out and if the stock were to go down it would be because oh my god it's overvalued and this this revolution is going to take 20 years not five so maybe overpriced and

in that case you'll sit there and I've been in much smaller scale on this when you go that's really bad our stock is down on the other hand we've got 50 billion in cash and our head-to-head competitors still losing money in private. We win. So, no, there's no argument. There is no argument for overstaying your welcome in the private markets at this point. Jason, you you brought up Figma and you brought them into the conversation. Tying that to what we were talking about, anthropic launches, claude design. For those that don't know, it's kind of their competitor product to Figma, very bluntly. Um obviously Figma as a result were hit and price was hit significantly as was Adobe's. Jason you you actually did a like for like and you've tried you know um claw design extensively. I'd love to hear your thoughts. What were your reflections? Does it compete with Figma in a very meaningful way and how

do you leave feeling? Well look let's I I I leave with a lot of anxiety over Figma and others but not for the reason the Yahoos on Twitter said. Um, if you use here, let's be clear what two things about uh about claude design if you haven't used it. One, it is definitely better than the design tools that were in cloud the day before. You've always been able to design a website that looks exactly like every other website built with cloud artifacts and purple gradients and the same they all look the same. Okay, half of demo day looks like it was built in claude artifact at most. Okay, you can smell them in 60 seconds. But design was always there. It just wasn't what a lot of designers would call design. You could always design a website. Now, Anthropic did something which is important. We'll see where it goes. They didn't just improve it. They built an application. Claude design is an application. There are only so many

anthropic and open AI applications. There are skills. There are workflows. There are prompts. There are little things you can do. They went to the trouble to build a design application that works. It is whether it's 50% better or 200% better than the day before. You can design better websites, better properties in cloud than you could before. Does that mean you can build what you can build in Figma, let alone Illustrator? No. So, a lot of the Yahoos are like, the other thing Yahoo said on Twitter is, of course, this isn't a threat to perfect design to taste because we're all about taste now in AI. Taste. We have no threats because of taste and the combination of taste and moes means we're unassailable. So will your typical um you know hoping to hoping to afford tickets to Coachella designer that takes two weeks to respond to a ticket to to develop an asset. Are they going to switch? Maybe not, right?

They're not going to switch from these things. But it means normal people can design stuff and get into production much faster. So I think it is an existential threat. It is. It will maim and nibble at Figma more and more more because like if the three of us wanted to build an app together and we we don't want to wait for a designer to turn it around in 30 days and give us a Figma file or a still that what the hell do I even do with the Figma file? I can stick it and reple it. Now I can just do it myself. So we will bypass designers more and more. That's the risk. Not that but I do not believe anthropic will ever build a direct Figma or Illustrator or Adobe competitor. They don't have to to to maim them. Um, and so yeah, is it a design tool? Maybe it's designed to production like the like like um some folks called it. Who cares? If it mames you, it ma it mims you, right? And I think people are missing the point. The

meta question is and then I'll just say one last thing that no, I saw no one talk about it. It is an application. It comes up as a full application. It has sharing. It has users. It has hierarchy. It has it can save assets. Maybe there are I do not believe there are many other applications that anthropic or open built and this if you look at what the public markets are they're scared about a lot of things but we make fun of vibe coding oh we're going to vibe code our salesforce but what if they start building a tier applications not just prompts not just outputs like it is something to reflect on it is it it is something to reflect on and I'll just sorry to ramble but I'll give you one last story to compare so the oldest piece of software uses Marquetto. Okay, terrible email marketing service. About two weeks ago, it started to violate the can spam act.

We started I started to see things on tweets. Jason, how come I can't unsubscribe to your goddamn Saster newsletter? And they ping me again. I'm like, I don't know. And and and then you you get more of them, right? So that's when a bug's been introduced in the system two weeks ago. We flagged it for Adobe Marquetto. Uh they said it was unfixable. Can spam violation. Okay, this was a week ago. Then they said they would only help us if we got on the phone with their engineering yesterday. We did. They did nothing but blame Salesforce and said they could not commit to a fix. So my point is this is what old software looks like. Okay? And as if Anthropic and Open AI are going to build applications, sell them all as a bucket. Like keep keep the gems, don't get me wrong, but they're coming for old software. They're coming for old software. This is an application. This is not a prompt. And uh but nor is it going to maim Figma

next quarter. Like there's just but those both can be true. Those both can be true that we won't see it in Figma's numbers next quarter and that over four 6 eight quarters it will maim its growth. We won't want to use grandpa's software anymore.

But that's just honestly I want to ask a lot of questions because you know that one that's what we do here. Two h you've used both products and I just and I tried to look at some demos today but I just had a ton of questions. So

cuz cuz I think this this like the Emerson quote if you understand one thing one man well you understand every man. If you understand one competitive market well you you have a kind of a framework for all these markets. So I just want to drill down on this because it's the same question in every market. So couple of things. One is how do you think it impacts I mean I believe can the Canva design engine is at the heart of what they've done on um Claude. How do you think this impacts claw um Canva versus Figma?

Well, first of all, kudos to Canva. If you use um anthropic, I mean cloud design, it exports to Canva. So, you can import from Figma and you can export to Canva right?

Should you choose to? Yeah. But what's happening is product teams and engineering teams are already uh like okay, if we go back 12 months ago, you had design. Okay. Back in the day when I worked at Adobe, there was a design group. We weren't allowed to design anything that was public facing. You'd face a ticket and 60 90 days later you'd get a PDF of what your website had to be look like. Okay? Then your product team would have to figure out what to do with that PDF, argue with your engineering team and months later you could that's the way software used to work until not too long ago. Then as everyone started working in cloud code toward the end of last year, product and engine teams just started to work in in the code together. Product teams first would vibe stuff and replet and lovable on their own. Right now, a bigger and bigger deal is they're committing to the codebase. Product teams are able to do

this. And so they're these PRD teams are becoming more cohesive and then design still way out over there in in in their own in their own hipster land. As these combine, everyone's going to want to work directly onto cla codeex and cloud code. It's not going to be this designer enforces a a collaborative hierarchy on Figma like the the because the designers hold the the the PRD organization hostage. They hold them hostage before AI. It's the worst.

Yeah. It's worth just pointing out at a high level comment here when you're saying design implicitly what you're saying here is it's the Figma digital design websites and apps world the software part of design not the part of Canva that is printing out real world pictures posters and you know leave you know the the the physical design where it's decoupled from software. You're right. Design's such a confusing term, right? It's a bigger threat in the short term to things like Gamma. It already makes slides like Gamma.

Yes. Okay. It's not a threat to to Canva today, but every single thing you do in Cloud Designer that you don't do in Canva or Figma or Gamma is a is a threat to them. Even if it doesn't kill them, every single thing you do. I think the smartest thing Jason always says, Roy, which always sticks with me, is just the element of maming, which is quite hard to deny, which is just like if it takes 20 to 30% away because you're already there and it's easy, that's very meaningful.

It is meaningful. And again, I'm not diminishing that. I always thought one of Google's interesting strategies for a decade and a half was the strategy with G Suite. it was email, you know, and effectively a docs and and a spreadsheet which just gnawed away at the bottom end of the Microsoft Office suite. And if you fast forward a decade and a half, you know, you you get both sides of it, though. They they yanked basically they could spend a billion dollars yanking Microsoft chain on a $40 billion business. It's exactly what Jason says.

I'm messing with your head. I'm maming you and it's not and it's not core to me. So, I don't have to win here. I just have you just have to lose right on the other hand 15 years later your office is still a plus or minus $40 billion business lower growth rate so my point is simply this there is a range of outcomes from it gnaws away at the low end takes away a lot of users but only 5% of the revenue to it bites 30% of the users 25% of the revenue and it really impacts and those are big differences in terms of value creation you understand me so the the

how True. We'll have a maim meter in board meetings. How much have we been maimed this quarter? And it'll go from 1% all the way to 50%. And and we have and our agents will decide. We don't let the founders decide because they're always at 1% or they're the overactive one. 50.

There's this cue for the Montipython. It's only a flesh wound sketch. You know,

it is. It is like that. That's only a flesh room. I lost my arm and my leg this week to to to to cla But you are right. I mean look anything I mean I remember thinking anytime they come at you anytime there's two things you said that resonate one is anytime someone can give away something at the margin for free that takes away some of your lo there just an impact to that right bundling is a [ __ ] and they're effectively bundling here the other thing that I think is more important that you said is and I hadn't internalized this but if the design flow is a preamble to a technology build workflow and the technology build part of that workflow is already automated using code, cloud code, then you're right, the incentives where you get scary as a standalone company is if the other guys have a better together story. And you're right, to the extent that design, product, and engineering can all be in the same tool,

there's probably a whole bunch of embedded efficiencies there. And from the perspective of the company building that product, it makes sense to like because the thing that often happens in these deals is I mean let's open AAI did a ton of these and if you look back on the it's just fun to do it now the GPT store the GPT plugins every single time Twitter goes all excited this is the end of everything XYZ company is screwed right and it turns out you know two years later no one even remembers that and the thing's been deprecated but you're Right? In this case, if you think of design as simp not as a standalone category like Canva, but as the front-end window into product and edge and if you think that software is the mother lode and software coding is the mother lode of enterprise adoption, then you probably get enough effort behind it to build a credible product. I mean that's that's what you're saying. I mean

put bluntly at some point when even Entropic has to start allocating resources at the margin you implicitly you're saying there'll be a big enough team here to build as you say all the app features to make it a viable competitor.

Yeah. And not only does it export to Canva, you can just you can just you can just it exports to cloud code. They're integrated.

So if we're moving quickly, we're not going to wait. Listen, I still want my human designer to deliver my amazing homepage of my app, my amazing splash screen, my amazing assets, but we're launch we're shipping features every day, guys. I don't have time to wait anymore. We're going to do it in design. It go straight into cloud code, which we already run our company on. We already ship on, right? It's fully integrated. And if the humans have time to redesign it later and make it better, great. No one's saying it's pixel perfect. Don't have time. I don't have time. I don't have time. So, uh, we'll we'll see. But they could aband the only reason I think they won't they won't entirely abandoned it is it's it's part of the core. It's part of the cloud code core and it is something you can already do in in cloud code or even just claude just crappily.

So they're improving. The closer it is to the core, the higher the chance they'll they'll maintain it. And it's not a a diance, right? Not only are the decliners stressed, not only are, you know, Dylan and Mike Kennick stressed, they're stressed at at lovable and replet and versel and gamma, too, because they're they're, you know, the the rate at competition is like we've never seen before, right? And they're and they're and I will say one thing I know from all these founder, I mean, they're brutally aware of it. The the older CEOs are hiding from it. Oh, our next agent will catch up. Oh, we'll catch up later in the year. Oh, you haven't seen our next This is what I hear from preAI founders. We'll catch up in the next release. They say so confidently, right? As they go off to complete their triathlon. Um, the AI native cos, they're faking all over this. Okay, in 60 seconds, you get a slack back. They actually know that

what's coming a month later that all their competitors are launching. They're already all over it. They're already I hate the 40 chess game, but if you don't play 40 chess, if you're at the core of AI, you're going to lose. So, they're they're all playing this game. Um, but it's it just gets harder every week.

Excel adds four billion leaders fund to follow into hot AI growth rounds. Sequoia four days ago raises 7 billion growth round growth fund. Is this just further compounding what we said which is that is the game today and the leaders see it.

It's definitely the game today. It's definitely the leaders see it. Obviously the question is is it correct? But yes, I mean it totally yes. As long as

you think it's correct. I think it's I mean directionally yes people are saying private longer outcomes are bigger so capital capital capitalism is doing what capitalism should do it's raising money to put into these companies right do I mean do I think the return I mean the thing about growth is this when growth is sexy and attractive from a fundraising perspective it tends to be hard to make money at and when growth you know when everyone has a way growth makes money is either overall valuations are down like 2022 or there's some insight that the growth investor has that the wider market hasn't figured out yet like chat GPT really matters and you should buy open AI right it's a lot so both of those conditions were two in 22 and 23 which is why those funds are going to be awesome right if you have a situation where capital is plentiful for those rounds and everyone understands AI is amazing

then by definition you've eroded the two things that gave you excess returns I'm not saying you still won't make great returns, it won't be as clear or as compelling as it was when it was unpopular. The other thing is there's room for the capital. And what I mean is if you look back at 20 VC fund one, $10 million fund, right? I'm speaking for history for Harry. Back then the strategy was to get into hot seed or a rounds where he could write a 50k check, 100k check. There was always room. There was always room. And that to some extent it's still today. It's just those hotter checks are at much higher valuations.

Fast forward to today. If you're a relationship builder, if you drop by and meet with Daario, if you smoo with Sam, there there's room in the round. Like, you get cut out. Don't get me wrong, people are getting cut out of these rounds, but if you're Sequoia or Excel and you're a good sch smoozer and a people person and you show up to poker night and you do all the right things, not most of these rounds, you're going to get an allocation. You may be the fourth name on the press release, but you're going to get an allocation. And so, you know, and in a way, the funds don't sizes don't even sound that large.

If you get 20 or 30 checks, they're not even that big. And that's totally fair for five or six. You're exactly right, Jason, is that there was room when you're raising $122 billion, right? It turns out there's room for everybody. Even when you're raising a miserly $30 billion in the last entropic run, you're right. There's room for everybody.

Well, people get cut out. they're to start they're desperate to get into anthropic. But if you have the relationship, you're you're gonna you're and you're really and you really build it over a period of time. When they look at the spreadsheet for the round, they're going to put you above the fold because we like Rory. He's great on the 20 pot. He came by the office. He loves us. We're going to Well, fine. We'll give 20 million to Rory. It's No. Did you disagree, Harry?

No, he doesn't. Because his first sentence, his comment was if you're going back to Harry's LP who's monotropic and nothing else. I mean, what I like about Seo, they know how to make money, right? They're like, "Let me get this straight. I have a good relationship with these mega companies. I'm a name that they'll want even at this stage, and I got a bunch of LP send me. The only thing I want is this." And I'm in the middle. Hm. Let me think about this. I should take their money and give it to these guys and charge my percentage and call it a day. AB, as long as that works, the marquee names who can do that are going to do it, right?

Some of the package pricing on these SPVS for anthropic has just been the most egregious face ripping I've ever seen. I mean, it's like it's just Oh, I mean, like 8% up front.

I mean, like crazy. Um, one that I I thought was fascinating was Ripling crossing a billion, growing 78% yearonear. Um, is this the new is this the new bar for a great B2B IPO?

Well, first comment, is this the new bar? Well, it's not going public right now, but I think let's step back even one level beyond the IPO. I think what this sentence, if true, and you never know, but I believe it to be true, exposes the whole SAS is dead meme is [ __ ] Right? Low growth SAS is bad and high growth SAS is good. Right? This is a market where we can talk about the reasons why if you're doing a billion dollars growing at 78%. Then collapse of the entire discussion about you know SAS is going away SAS is bad what's it worth right what it really points out is the real objection to these public companies the public SAS companies is not oh my god you're SAS it's that your market is now top stop and your growth rate is 10%. If Ripling is growing at that rate, that's amazing.

It's compelling and they'll get an excellent IPO and they're accelerating. The crazy thing is they're accelerating. So, if they were at less than 500 11 months ago, which I do know, right? And they're at a billion growing 70 something%. Do the math with me, Rory. They're acceler It's not just 70, which is enough. They're they're accelerating, right? And you can say that's great for SAS, and it is, right? Um, as Parker said to me, not bad for a SAS company, right? Um, kudos. But, you know, and and we can talk about what that means. I'm not even sure what it means, but not that many are accelerating like this, right? So, this is not good news for anybody not accelerating at scale, right? Let's not it's not even 70%. It's accelerating from like under 50 to 70 in a year. I mean, you know, candidate for CEO of the year, right? uh not not to not not to not to disparage deal but candidate for to drive that level of acceleration. I

don't even know how to do that unless there's people buying unless there's people buying tokens. I don't even know how to do that in today's world.

Agree. I'm in bold candidate CEO of the year. I mean yeah respectfully he's he's got a bit of competition Jason. Yeah, but that driving accelerate like they've just launched their agent driving that level of acceleration without a a massive AI tailwind like just just blowing your blowing your phones up, right? It I I you know, bring them on, we'll talk about it. I don't know. I don't know how to do that without AI, right?

I think it's what they refer to in sport in terms against a run of play against the odds. You're playing the SAS game where everyone's walking around saying the world is dead. Yes. entropics putting up 6 700% growth but you put 78% growth and acceleration up in a category where most ill-informed people were saying you can't do that. So um maybe the better clear expression is highest outperformance relative to quote unquote market expectations. I think that's a clear example

and it's better than Figma by the numbers, right? It's better than Figma by what it says by far and what it just serious com what it just says is there's markets where the entire agentic AI vibe coding discussion is rubbish and one of them is financially related stuff and payroll. I've run a business and you you guys both run businesses. You can screw up on a lot of things. You screw up an employee payroll and you pay them at 3:00 they'll be in your office at 3:01. Right? You can't get this wrong. You're not interested in vibe coding it. You're interested in having it right. You've got legal and statutory obligations that carry criminal penalties if you don't pay your taxes. You're like, I want to outsource this to someone wildly competent. Have them take the responsibility. And no, I don't want non-deterministic processes, you [ __ ] Right? These are entire businesses that, you know, might have some impact at the

margin in terms of agentic efficiency, but this core business will be there in 5 10 years time. It'll compound because payroll is not not everything is I mean it's we're actually talking about this a lot internally what gets eaten by AI what doesn't get eaten by a what's defensible payroll is one of the best examples of this is just something you do you might build a software better using AI but the core value proposition is something that it it's just orthogonal to AI and it has to be done right so big category it'll go public it'll be a great outcome good for him I

I think the same with a lot of the fintech players that we see today you you know, your your ramps or your stripes or airwes of the world are not fortified.

Yeah, exactly. Um, and you know what though, I I know it's not to harp on the the MAME episode, the mode is stronger. It is less impacted by A, but I will tell you everything and I know I'm a few months not ahead of everybody, but a few months ahead of many. Everything I view now in terms of its how well it works with our agents, how well its API and workflow works with our agents. And so for example, like after SAS annual in May, we're going to build our own AI VP of finance, our own. Okay. And the number one thing we're going to do is automate collections. Okay. So we've been on BS for 6 years. We're you know what the first thing we're going to look at?

Which which API works best with our agents? I don't care what RAMP's dashboard looks like. I don't care what what it's uh what its office of the of the of the you know the GDP anal. I don't care. I care how our agents work with its API and its and and we're going to pick the best one and that that is just starting but it is a BFD and it also means that folks that seem to have a huge moat it may weaken when and I'm not just I'm not just being a a Yahoo on X we're going to build an AI VP of finance and he don't care what the UX is.

First of all, you're right. You're absolutely right. And you are going to build a be and and and therefore the payroll and and kind of um AP collectibles that has the best API will win. But I'll tell you something. You're not going to build an entire fintech stack. So someone will get those dollars. You're right. There are I'm going to

someone but it could be a new vendor. It could be a different or it could be a different vendor.

We I mean this gets to the silver. There are three or four vendors of you know um AP related stuff. You've got ramp. You've got Bill where we were involved. you've got um remember BS whatever right whichever of those doesn't have an API forward product will lose market share whichever one does will gain market share and if all of them are dumb enough not to do it then a new vendor who says I'm an API first product will get your business and all the people like you right but in every case but on so I think you're correct in that which is a platform shift which is what we're dealing with at this level has implications for everyone in the tech stack but if you are doing something like what you know Ram Bs bill all these people are doing the core thing you do itself won't be replaced in a way for example Figma might be right my point is there's degrees of change here right your point

but the degree of just the comfort that we're protected like you know ramp has asked us to switch from bre for for for seven years I bet we finally switch over the summer and it's only because of the agent if it if it wins the bake off we will switch in one week we will which and we'll never go back to Brex which gets us to you know we have we're winging it now but I don't

same with Marquetto and HubSpot by the way like we're leaving Hub Marquetto because of this drama the crappy API they're can spam we will leave Marquetto this summer for whoever has the best API and it probably won't be HubSpot

which is why we should probably spot Hang on Jason and say look I mean to your point Salesforce just announced the whole an entire headless API strategy what are your thoughts because I thought that was smart

while we debate where to move our Marquetto data. We're already using headless Salesforce to move all of our Marquetto data agentically over to Salesforce. It'll be done in a couple days.

See, that's a great story because give him credit. Give Benny off credit. He's like, if you can't beat him, join him as they say in P, you know, right? I mean, remember it's it's less than a year ago there was talk about we're going to charge your AP, you know, we're not going to let you have your data and now we've gone to getting a headless out the door. So, yeah. So they've that you're an example of where he's taken share from the adjacent companies like Marquetto just because they're doing that and that's your point. Well, starting the other the only thing I will say, listen, we already we're already living the headless vision, right? We we we don't log into Salesforce. It's our hub. But um it's also this is a lot of stuff that's going to run on Muleoft in a couple of months or 6 months. This is also with love. This is also a classic B2B, you know, Anthropic said drops a design tool and we can use it in an

hour, right? This is something that will be dribbled out in classic B2B fashion over here. It's just like it's different worlds. Can we provide some context also for those that haven't heard in terms of just banning off the move with headless that he announced just so we set the scene there because I want to ask some questions.

I mean I I I think that traditionally the Salesforce app it really had two parts of value. There is the the user interface that every sales rep or everyone in the organization uses to input and output information and effectively record the work they're doing. And then at the back end you have effectively this massive database and workflow that records all the information and allows you to track customers, leads, pipeline, all that relevant stuff. So there's two components of value. And by going offering a headless offering, what he's basically saying is if if those people who are doing the work are replaced by agents doing the work, then they don't need my UI anymore, right? Because the people aren't there anymore. They need a totally different agent-based UI. But what I'm going to do as the leader of Salesforce is I'm still going to allow them to access the database side of my product, which means I keep I keep my

value even in a world where most of the selling or the customer support is not done by humans typing into the Salesforce UI, but is done by agents go proactively going against the Salesforce back end. So, he's preserved he's given up some he's given up trying to drive proceed pricing to preserve long-term value because I think he correctly has identified the real long to Jason's point, he he said it as a negative, but it's also a positive. The real long-term value that Salesforce has is it's taken you five I mean it's taken us 101 15 years to get all those integrations in place, all that data in place. If you make it easy for Jason's agents to work with Salesforce, then he might get around to killing you for the longest time. So that's the big move they made in the last few weeks, right? I think it was week or two ago.

I think like the like like like like claw design though, everyone completely misunderstood what headless Salesforce is. Um so Salesforce is already headless. Salesforce is it made and this is actually pretty crazy. Mark really Mark and Parker to their credit G JFC in 2006 they launched an enterprise API when this was seen as not not possible. You could not build allow third parties to integrate into enterprise software. It's too risky, too problematic. They open this platform up and they have 20 years of it getting better. And I will tell you all the APIs that our agents use, our AIVPN marketing, VBA customers, Salesforce is the best. It is the best API out there. It crushes everybody.

Okay, this includes all the new guys, everybody. But it's because they built this for 20 years. And because it's the APIs are so good, um the agents can work with it like it's not a problem. what what headless is and and that's what Mark's out there I mean the greatest marketer in B2B right but it's already done this since since agent started what he's really pitching which is the bigger threat to these leaders and the bigger opportunity is an agent fabric is the layer that manages all your agents this is what it's really if you really p look at what this is it's about Salesforce says we are going to be the fabric to manage all of your agents your 20 agents your 50 agents 100 agents. Some of them will be built on Salesforce. A lot of them are going to be built on UFOoft as a crazy it sounds their their their platform which has been renamed. It will be in their data platform. But we will

be the layer to provide the context, the guardrail, the management, the security, the everything. And this is the biggest issue for 2027 is agent fabric. People are under discussing this. They're all talking about eval crap. This is what really matters in the enterprise is agent fabric. You can't let these crazy agents run a muck. I'm sorry. I'm just going back. When you say agent fabric, you're saying agent orchestration management training.

It manages everything. All the governance, all the security. It knows. Here's the key part. It knows what every single agent is doing in real time. That's the fabric. That is more than orchestration. Okay? It literally knows every data, every operation, everything that's happening through 200 agents running 24/7 in parallel with multiple sub aents in them. who's going to go to to poor to poor uh Jacob O'Driscoll at CIO of wherever that that if there's any security breach, he loses his job. It's his worst job. He wants a trusted agent fabric to manage these crazy agents his team is deploying. And he they can't be done on out of chat GBT. They can't be done out of base 44. Gez, JFC, this is a security nightmare, right? I mean, even this week, and I don't want to get into it, two leading Vibe Code platforms arguably had massive security issues this week. I don't want to talk about them, but this is only going to

compound. And as Mythos comes out and finds every security breach in nanoseconds, I need an agent fabric I could trust, not someone that came out of YC and claims they have an orchestration platform. But I don't know if Salesforce can deliver it because it's so effing complicated. But if you but if you're in their ecosystem, if you commit to everything all of and it when most folks hear about Salesforce, they think it's CRM, it's 14% of the revenue. Okay? If you commit to everything, uh, e-commerce marketing data analytics Slack, and you run it your whole business on Salesforce, this is the old SAP push. We will give you the agent fabric so you can accomplish everything you want. It can be trusted and safe.

You and and and you this is an agentic platform you can trust. This is the big bet coming and this is all the warm-up phase for agents. Enterprises need an agent fabric they can trust.

Agreed. Because you know you're empowering these software agents to do things, to change things in your systems, to upgrade things, to change, you know, to approve orders, to make commitments. How do you audit what's going on? How do you know how do you keep control of it? That's you're exactly right. That's that's going to be the issue.

I've got 300 agents doing accounts receivable. I've got 200 updating our our documents. I've got the all of these interacting auton our autonomous customer success agents or autonomous data data analytics agents. Who's going to manage all this? It's much orchestration is the nerdy term, but most folks talk about orchestration is just a a limited dashboard on top of a couple easy APIs to connect with. It's it's fine for a startup or for a team that has human resources, but how's an ordinary company going to manage these agents? How the hell is an ordinary company without a a team of agent deployment experts going to manage these these agents, these rogue a they go they'll go rogue if you don't manage them?

Yeah, this this analogy may be totally useless. It's only because I've been doing it a long time, but I remember in the late 90s when you know online commerce took off and people really started getting a meaningful percentage of their revenue from online commerce, right? And you have all these executives who are retailers to the core, right? And what do retail executives do when they want to know what's going on? They go walk the floor. They want to know what's going on in the shop. And you know, like even if you're running a 50 500 person chain like Walmart, you know, Sam Walton used to walk around, touch the merchandise, see what's going on, and suddenly the whole thing's going on online and you just don't know. People are clicking. That's all you got, right?

And you know, you saw a whole wave of companies doing kind of analytics around how do you track your website because the the big guy just wants to know what's going on. That was the value proposition. We did Net Genesis. We did amateur made a lot of money in that space and the value proposition at its core was you've moved to this new way of doing business. Senior people want to know what's going on and frankly AI is way more powerful than that because at least in that you had very deterministic I'm selling stuff at a certain price for a certain thing and even then you wanted to know you went and dumb. In this case you've empowered your agents to make decisions. Right now you're the executive in 2026. You're going to know what's going on. What's gong? Gong is all about listening into calls to understand what people are saying. Once you have AI agents doing all this stuff, you're going to want to know what the AI

agents are doing, right? And I think Jason, you're exactly right. This is going to be the huge thing. How do I think about what my little automated bots are doing in my business?

My question was, are Salesforce best placed to be the agent fabric or is someone else better placed? If that's the whole holy grail,

of course they're well placed. Of course, just like and it's a bad analogy, but just like in the end, Google, Microsoft at all were well placed for for the the last generation of AI, if they can get their rears together, the leaders are well placed. They are well placed. Um Salesforce, Shopify, um Data Dog, Data Bricks, they if they can execute faster than they've executed the last 20 years or eight years, however they are, of course CIOS want to buy from Salesforce. Of course they do. But it's it's much bigger than buying one agent force agent. They want this whole agentic fabric. So So they and and here's my meta point to folks.

It's an opportunity to worry. You have time. It's just not infinite. It's like if you're not building up that whole fabric, right? That's why I'm a fan of Mark. This may not get there. It is it is a bigger vision than it looked. It's not just headless like all the Yahoo said. Okay. This is a complicated vision and maybe they won't get there in time, but at least he's driving the right vision and forcing thousands and thousands of people to deliver against it, right? I'm I'm I'm much more worried about folks that are that are it it's more performative, right? You got to work as harder harder than Mark to do it, but it's just I don't I don't mean to repetitive, but the saddest thing is when you have an install base and you're not delivering the agentic solutions they want. This is the tragedy of 2026 and 2027. I have the customers, but Lora or Rep or whoever, pick any application you want. Um what

what's the what's the AEO one you invested in, Harry? What's it called? the AO a the AO the AEO startup

peak peak yeah HubSpot launches their thing and it's a dud it should have been it should have been peak or the other one like it's just a tragedy because HubSpot has 280,000 customers it's a tragedy you did not deliver them the best-in-class AO edge it is a trag it is not just a test or a miss and I just it's it's a so so but so that's why I think sales is extremely well positioned and we are right to be stressed like everyone is stressed that they will achieve it on we're right to be stressed.

It's it's really interesting. Um yeah, they they've had inbound to be bought by by so many people. Um and Eli Gil tweeted a load of predictions and one of his predictions was that a load of these AI companies should actively sell and try to sell. Do you guys agree?

To whom? Uh uh so to uh HubSpot to literally Harry I was on the phone last week with the CEO of a 20 or 30 billion dollar market cap public company. Okay. And uh doing massive revenue and he's like I get I get these and we're talking about M&A a little bit. I brought it up. He didn't bring it up. I'm like well go buy some of these kids, right? Uh you have the base, right? He's like well everyone wants a billion on five million in revenue after their last round. He's like it's almost a waste of our like I have a corp dev team but like I haven't seen a single one that I'd want to buy that will sell at a valuation that makes sense. So Google can buy them, but HubSpot, what's HubSpot's valuation as we record this? In the teens of billions. They just can't afford a billion dollar for every YC startup.

They don't have the money. Yeah. I would say try harder, stay close. There's going to be plenty.

Plenty of exits. How many whizzes can Google? Is Google really going to buy the right?

I'm not talking about those kind of exits. I I I think to your point, what's that?

12 billion hubspot. Yeah. So who So they could afford 50 million, right? To take a risk, right? Not a billion. Funny fact and you know you know I like the space but I someone told me that is it G2 crowd said there's like 250 AEO GEO competitors out there maybe you can't afford numbers one to five but somewhere between 10 and 250 there's going to be one that has a good product so I think a lot's entirely right

but isn't a lad saying sell at a billion I think is implicitly what he's saying

yes and if you can sell now for an easy billion right I'm optimized for hundred billion dollar outcomes at my fund but sell for a billion now while you can honestly That's what I think he's saying, right?

What? Oh, okay. I'll sell for a bit. I would agree if the exits were there. I I I would agree. His other point was you should have an exit discussion every year with your portfolio companies, right? I'm going to have one tomorrow. It's a great tip. I just He's super smart. I just wonder where the where the billion at 5 million AR exits are coming from. I I would I want their number. Give me their WhatsApp or their text because I'm going to send them a couple deals before this right after we get off this show. My point is this in many respects what you're saying right when you listen to what Jason says about the public market and the dilemma they're going through they absolutely should be looking to acquire some of these things to get some of this technology and maybe what we're really saying is the biggest rate limiting factor is not their unwillingness to do it but the prices at which the venture

crowd think we're going to get for them has made it hard to make those transactions. It's been my experience that if that's the case, in the end, things true up, right?

But you know what's tough? I I I picked on this HubSpot AO product, okay? And I and I love HubSpot, right? I picked on it. But I didn't know they bought that company for 30 million like months ago.

Good. So everything just gets stale so quickly. I'm sure HubSpot sat around and said, "Listen, we need to be in this place. It makes sense. We need to be an AO. What can we afford?" Well, Harry just funded this one. We we can't buy that for 30 30 million. There's the other one in the US. We can't afford them. What is available we can afford? And I think in five years ago that was a good strategy, right? Because the world moves slowly. Now you buy something that let's let's assume whatever they bought uh this company was competitive four months ago. It's just in it's just not competitive at today's pace, right? I don't mean to pick on them, but it's it's why M&A is is tough, right? Who wants to buy something that's going to get stale? Look at poor TBN. We can't even see it on our feet anymore. Like open like it's disappeared since the acquisition, right? Gone.

It's gone. It's gone. So why even buy any of these things if they it instantly becomes stale? You do these tuckin acquisitions which used to be like if you you know go back to corp dev you had the best strategy was the barbell just starting to like investment buy something small for 50 to 80 million like for product couple million revenue to prove it works and rebuild it over a year rebuild it natively on Salesforce or HubSpot or go big right because you got scale but uh it's it's tougher today to to find to to find the gems that want to sell with product market fit cheap.

I don't think you're saying it's tougher to find them. I think is saying it's tougher to manage them and preserve the urgency and the speed,

which I think is a different comment. Yeah. I mean, even OpenClaw, that dude's just on the TED circuit now, right? Open Claws may be obsolete in a couple more weeks.

Listen, the two more for me is Snap and Cerebrus. I think I think you have to do Cerebras first. I just have a prediliction for good over bad.

Okay, let's do good over bad. Cerebrus files for IPO. It's the second time. some of the concerns that were brought up last time in terms of a dependence on G42's um uh revenue and the revenue concentration they had um have been resolved. How do we feel about this? Is this going to go out well? They're now at where are they? 510 million revenue in 2025, up 76% from 290 and 24. They've done a great job. I I absolutely that's why I wanted to cover it. I think it's a great classic venture deal. Credit to Benchmark Eric. Credit to Steve at foundation. Credit obviously more than anything to the team. You know, this is a 10-year journey. And I think in a way that wasn't true a year ago, they got the the elements of success in place. I mean, you know, you look at the P&L, it's a little noisier than at first glance cuz you at one point said Harry, it's profitable. It's not. It had some weird reversal of

liabilities. At the operational level, it's still losing money. But the big aha is they've effectively they've done exactly what it takes. They've proven the product and stepping back this is a semiconductor company. one of the very potentially one of the very few startup semiconductor companies in the last decade and a half. The product they make is a w is a big ass wafer scale chip that really good for inference because it's really fast, right? And obviously it's very optimized for AI and if you read the founder letter, it's been optimized for a since they founded in 2016, right? What they've done really well is they Yeah, cuz this is a very hard step back. It's a very hard market to enter no matter how good your chip is because there only a small number of big buyers right obviously the hyperscalers right and you know some of them have their own chip some of them might want to trust you right these guys have done a couple

of things to kind of parlay their way in they've done some big deals in the Middle East with folks who've been willing to use the product they started to offer a cloud offering and one of my companies has used it whereby they effectively saying our chip is so good and so fast that we'll offer inference services on a cloud basis and when you use it you'll be like oh my god this is really fast and as I said one of my companies has had that experience. It's really fast, low latency. It's a great product and those things allowed it to prove that the [ __ ] worked and in the last 3 months they've signed a deal with open AI and a deal with um a topic. So no deal with open AWS sorry I should be precise right and you know the open AI deal is for the usual $20 billion of commitments. Who the hell knows what that means? But the point is they've gone from niche to mainstream, right?

And they've clawed their way into the mix. So I just give them huge credit cuz you know that's a long journey. It's a hard journey. And you know a year ago it was easy to sneer and say, "Yeah, you got a bunch of you investor contracts in the Middle East. It's all bullshit." Now you've got the inference, you got the service business, you've got the incipient contracts with two of the largest players in um AI. It's a credible play. So, I think it gets done and it gets done well and it deserves to get done well. I mean, and you know, now I'm on my soap box, but this is a this is just great. It is just great that Venture does this kind of thing. A 10-year journey to finance a new chip for a new use case. It's complex technically, complex business, and they pull it off. I hope they make a ton of money.

I agree. Really like Andrew Felman, too, the CEO. He's a really good dude. Uh, so like him a lot. Where does this go out at? Grock sold for 20 billion. Like does the benchmarking of Grock enable this to be a $25 billion IPO?

When things are valued on a PE or an earnings basis, you can have an opinion, a meaningful opinion on where they should trade. In this case, it's going to be so much narrative based, it could go well above that. I mean, again, we talked about this a while ago is that if the leading player is worth $5 trillion, right? And then the next two leading players after that are kind of in well you got AMD and then you got in-house silicon from um Google and um Amazon. This is the only other standalone play you can make, right? You know, I mean, you know, do the math here. 1% of Nvidia's 50 billion, right? If you just think of it as a call option on some percentage of a five billion dollar market, you can see a very big outcome here, right? No, you can squint the other way and go, "Oh my god, they're never going to, you know, it's a high beta r." Again, it's back to what we said in these kind of huge markets,

you're way out there on the risk continuum. But when risk appet when maybe that's a summary when risk appetite is on and risk appetite is on today high-risisk high return stories go at a premium and this is a high-risisk high return story with a big market. So, in today's market, in today's environment, that could price extremely well.

It'll create an interesting case story with Grock, who has the better I mean, I I know this is such an annoying investor thing, but who has the better outcome, risk, and time adjusted, right? Both took huge risk to start their companies. Both started ahead of the curve, right? Um, Cerebrus, I guess, even more, right? Um, would you rather take 20 billion in whatever, I don't know, combination of cash and stock with weird taxes you got from Nvidia or ride the ride the uh the up and down an emotional roller coaster of running a public company for a decade and trying to get liquidity and seed of Morgan Stanley will uh give you a a loan against your stock. Uh, we're all on different journeys. I don't know.

I can tell you I'd rather sell to PE like sales lofted for $2 billion and peace out. Well, that's that's a different journey alto together, right?

That sounds better. You guys, you're doing the height. I mean, yeah. Look, equally say, you know, I think they're pretty glad they didn't sell Google to Yahoo for, you know, billion dollars or whatever it was. Look, when it works, you're better.

What about Figment Adobe? That didn't happen. That one I'd be I'd be pulling if I'm Dylan's better than I'm me, but I'd be like, "Farts farts farts farts farts farts."

I don't mean to be political, but man, that was a rough stretch there. Yeah, but maybe they like what they're doing. I mean, maybe, you know, lots of folks do, actually. Maybe they

You do, but but it's just it's tough when the when the teams RSUs are not worth what they were and the options are struggling and and people are leaving to go to to anthropic. It's just it's not a fun envi like no matter how great it's just not fun to run those companies, right? But my point, you're exactly right. When the momentum turns against you, you wish you'd sold and when I mean, you know, Jensen's glad he didn't sell Nvidia anytime along the way. When it when it works, you're glad you didn't sell. Yeah.

And when it doesn't work, you wish you had. It's as simple as that. It's a derivative of Elon's Gills point. Which one are you? Right.

Yeah. Like be honest once a year at the board meeting to be honest. Who are we? Are we are we Nvidia or are we Which one are we? And and you know, it's it's easy on Twitter to think that you're Jensen.

Yeah. Right. We used to think we were Zuck, right? I'm the CEO be. Right. Now we all pull on our leather jackets and think we're Jensen. Right. If you're going to be Jensen, I hate to tell you, you just got to be willing to eat a podcaster for breakfast once a week because oh my god.

Okay, so I was going to bring this up as like a and but what did you guys think? I'm sure we both we all watch.

What What did you think? Where I thought he was excellent is his comments on, you know, we don't kind of have this preferential status. We're here to sell chips. If you wish us a PO, we'll sell you chips. you know, his relationship with TSMC, all that stuff, I think, was super grounded and you just go, "Wow, that's a worldclass executive who shipped cazillions of chips." Right. What you're really talking about is the argument about China. Correct. But Dorkish and he and Dorkish got into it. And it was a little bit Yes. And when he was saying bluntly, when you look at two of the largest frontier model providers, neither of them trained on your chips.

And he bluntly provided a pretty ky response at best. and then admitted we should have invested in them.

Well, I think there's a lot of things lumped into that, right? I mean, I think that I don't think I think I think it's clear that OpenAI does train and I think OpenAI definitely trains in part on Nvidia chips and whatchamacallic. I'm not as clear on what they train on. I've had mixed comments on that, but whatever. Um, and I don't think he said I think his comment on I couldn't do it. was it uh his comment on I wish I could in not investing entropic was he couldn't do it at the time because he didn't have which makes sense in 22 23 you weren't in the business of writing $30 billion venture checks I thought he was I thought he was very rational there he said made a mistake didn't have the capital at the time wish I had right to bring him closer to so I didn't think that was bad I think the problem with the China discussion is there was two priors that neither party agreed I'm just neither party agreed and when you

have a discussion and they're talking past each other right and you don't agree on the truth. It's just a waste of time. And two things are one is how big an enemy do you think China is? Is it just a competitive trading, you know, partner competitor in the way that Microsoft and Apple compete all the way from there to is it the new Russia and we got to not give them a single thing because we're scared they're going to nuke us. And then the other thing that I think is the dwarfish clearly thinks that you know frontier models are as dangerous as uranium and Jensen clearly thinks that's [ __ ] And if you don't agree on those two things if the question is shouldn't we make it easy for China to build frontier models by selling them Nvidia chips which was the question. If you don't agree on what you think about China and you don't agree on what you think about frontier models, you simply don't have a useful

discussion because neither of the nouns in the sentence have been defined. So once you internalize that, you're like, "Oh, that's two people talking past each other." And one of which just doesn't give. And it turns out, yeah, and that that's why that part wasn't that useful, but it was kind of funny. It was like it was a cl it reminded you what semiconductor executives were like when I started investing. You a lot of business with semiconductors. Just hard-headed guys who just say no. know and enjoy it, right? It was a just so I enjoyed it at that level. It was a little bit of a culture clash of generations and it was fun, but I thought he did. Look, I you can't argue with the guy.

For the first time ever, it wasn't an easy interview. No, it wasn't easy. And give Dwark credit. He tried to punch, right? And it's really hard to punch someone who a talks his book and b has 30 years of knowledge

when you were a 25y old podcast. And you know, I think one of the things I like about where you come from dictates how you approach things. We're doing this in a spirit of inquiry because to some extent, we're all trying to figure out what we think and talking things through often help. So I often find I revise my priors based on the discussion. But I'm not here as a CEO of a $5 trillion company. He's here to talk his book. Like and let's be clear, he wants to the 30% of his entire market is in China. He wants to sell those guys Nvidia chips.

And there's simply no argument on God's green earth that's going to convince him that he shouldn't get that $40 billion of revenue from shipping chips to China. So thank you. I'm here. Look, he spent time with the president lobbying to be allowed sell Nvidia chips. If he's had to do whatever that takes, and I shudder to think in terms of sucking up to be allowed sell chips to China, he's not going to roll over and play dead because some 25-year-old said maybe you shouldn't. And he'd do the same to you, Harry. Be a straight hand off right in the face. It's like, thank you, but no, big guy.

And did I think he won the argument? No. But he knows how to fold his corner. So, it was fun. I listened to I I worked out and listened and I was like, "Whoa." It literally was a meeting of non-minds. It was fun.

Boys, is there any other topics that we haven't discussed that we should discuss?

We ran out of time to cover Snap, but I just don't care. Um, I mean, and for anyone listening, SNAP cut a thousand jobs, 16% of the workforce, and the stock popped 11%. Wow.

I mean, yeah, it's just been they just need to figure out a converging business model, and you know, this this is Yeah. And they haven't amazing company at the start and now it's just drifting around. It needs to figure it out.

Master of stockbased compensation. Yeah. Yeah. I know. I mean, it's going to look, it's going to be an advert for the the dangers to some extent of dual class votes. I used to agonize about this and now I don't. Now, my perspective would be, look, you had a chance to buy two social media companies with dual class votes. If you bought Snap and if you bought Facebook, you're 50% down on Snap and you're 10x up on Facebook from the IPO. Shut up. Take the check. Move on. You know, turns out untraal power has good outcomes and bad outcomes. There you go. Like I said, marry a supermodel though. Like it's not all downside. You know that that is a positive night trend on Rory.

Uh that I hope everyone has happy marriages there. Rory. Okay, I have one last one if we're out of time, but I want to get Harry's thoughts. The other thing Elon had retweeted something that went around many times.

91% of all AI unicorns are now in the Bay Area. Um thoughts from London on this. Thoughts from London from London. Oh, nice one.

Yeah. How many and how I want to know in particular how many are in Marley Bone? But but 91% of the Bay Area uh project Europe um what how do you thinking about that from from London? This increasing concentration of AI unicorns in the Bay Area. This is from this week.

I think some of the best AI minds or the majority of the best AI minds want to be in Silicon Valley. Quite rightly. You're seeing the recentralizing of power back to Silicon Valley. um more so than I think any of us ever expected postco. Um that said, I think you can still build unbelievably great AI companies as we have done in London with Demis and DeepMind and with you know Matty at 11 Labs. And I think it's easier to be in Europe because with your 91% you also have 91% of the capital and every other person on the street being a venture capitalist. And so I think you see this gluttony of cash combined with a gluttony of companies which makes detection harder and makes winning harder. And so I agree with that. Sure, the majority of great AI companies are there, but I also think it's harder. And I think for me being one of the top three brands in Europe, I would rather be here with much less supply side than

there fighting against Benchmark and Founders Fund and Andre and everyone in between.

Got it. It's a combination. Well, I have two comments on that. One, yeah, it's the old Caesar quote. I'd rather be first in a village than second in Rome. That's really what you're saying. Though, of course, I would add he was a killer psychopath and really, you know, not a good man. But the more important point is um we Yeah. The evil that would do is that we could we can let it we could go back to Shakespeare, but we won't. Um I think the real point what you're saying it's fair it's interesting. It's 91% in the Bay Area. What this says is companies are in the Bay Area to the point where the marginal advantage of being in the Bay Area area is less than the marginal advantage of being in Europe and having access to a talent pool. What it says is the equilibrium point for indifference is now roughly at 90%. Which is another way of saying yeah to a rounding error. It's yeah Bay Area wins but there's still some wins in

Europe. Exactly. 100%. And I think actually trying to be a startup stay recruiting and maintaining that team in the bay is next to impossible unless you have an egregious amount of money.

No, no, no, no, no doubt. Right. And I wasn't I was just curious as the last point what you thought of this from the week. Right. I don't have an opinion on this.

Uh certainly you can't argue with the talent question. Right. But it's it's just there's just a lot of complexity here as everything concentrates, right? As we're not everything's concentrating in everything. And also Jason just like the competitive funding landscape and I I do not mean this arrogantly but there is just you know onetenth of the competitive elements in Europe that there is I I have so much respect for Silicon Valley early stage investors god it's [ __ ] competitive

it is and again back to and the equilibrium will be reestablished when the price when the costs of being here kind of are equivalent to the advantages and you what happened is for a couple I mean look I think really what happened is for a couple of years and it gets back to and everything like that is that in that period when they just first cracked the code at open AI of what could be done the closer you were to knowing what was happening the bigger the advantage you had right and it was intrinsically a local thing so I mean you know you look back and go yeah 10 years after you know 22 knowledge will be widely dispersed but there was a period of 2 or 3 years where the knowledge was available tribally in hack houses in San Francisco and wasn't available widely across the rest of the world. And that's and that's why you had this Cambian explosion here.

I mean, it's it's a point in time just like the start of the internet. But yeah, great companies in London. I mean,

and just to be clear, I'm not a was it a a psychopathic serial killer. Was that

I I know you're not, Harry. I know you're not slightly mediocre moderator, but not a not a killer.

Yeah. Yeah. Yeah. I mean, remember, Caesar killed a million goals. I mean, let's just keep score gratuitously.

Not quite as good as Paul Pop, but you know, up there up there in the baddy category. Yeah. Okay. Anyway, awesome, boys. Well done.

Questions about this episode

What is "Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?" about?

In this episode, the hosts dive into the groundbreaking acquisition of Cursor by XAI (SpaceX) for a staggering $60 billion, exploring the implications of this potential deal in the context of private market valuations. They discuss Anthropic's remarkable rise to a $1 trillion valuation in secondary markets and its ambitious launch of Claude Design, positioning itself against established players…

What is mentioned in this 20VC with Harry Stebbings episode?

62 people, works and ideas are mentioned, including SpaceX, Anthropic, Cursor, Elon Musk, Claude, OpenAI. Each one on this page links to its own page with every episode that mentions it.

How long is "Cursor Acquired for $60BN | Anthropic Hits $1TRN in Secondary Markets & Figma, Adobe, Canva Dead?"?

The episode runs 1 h 50 min; the transcript is about 23,032 words in 231 timestamped sections.

More from 20VC with Harry Stebbings

About this transcript: the episode's spoken words as captioned on YouTube, split into timestamped sections. Reclip.Me locates every person, work and idea in the text, keeps the time it is first named, and quotes the words around it verbatim. Last updated April 29, 2026.