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All right, everybody. Welcome back to AllIn at Davos. We're here at the World
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Economic Forum. For some reason, they invited me and I'm here interviewing all
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the most important people in the All-In style, which is Full Contact. >> I'm going.
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those who take it seriously. I think most of us agree going into 2026, stable coins and AI, uh, crypto
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having a huge resurgence and, uh, we were lucky enough to get two of my friends, Brian Armstrong from Coinbase,
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and Jeremy, who's the CEO and co-founder of Circle. We've known each other for 30
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years. >> Yeah, it's amazing. >> What a long strange trip it's been.
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>> I know. It's great to be with you again. >> Yeah. And this is not your first time at
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Davos. You've been here a couple times. Yeah, I I started uh coming with my last
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company Breov back in 2008 2009. Um and uh very different time both for it was a
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different time in the world. there was great financial crisis breaking out everywhere and um uh and and that was uh
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you know an interesting backdrop and you know also notable I always reference that same week was when the first uh
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block of the Bitcoin blockchain was minted with the you know Chancellor on the brink uh bail bailout kind of
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embedded in the in the blockchain. >> Yeah, it's fascinating. I think it's
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Game of Thrones. Chaos is a ladder. >> Chaos is a ladder. Yeah, it's and for
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guys like us who've been through this I guess three times now. We went through
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it in the do >> boom. I think we're too young to have We were You remember obviously that Black
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Friday in '87, but we were in college, I think. >> Uh and so we had our do great financial
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crisis and then we had co >> CO. >> Yeah. Which was also pretty spicy.
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>> Uh that was a great disruptor. when you have those moments happen, I'm
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guessing for you and and many of the founders I talked to, you just think this is the time to build.
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>> Yeah, totally. I mean, constraints have a huge have a huge impact on what an
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entrepreneur does. And you know, in even in the history of circle, we've had
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extraordinary up and downs, some of which are are endogenous shocks, exogenous shocks, all of this. And you
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know back to that 2009 that was that year actually >> uh I got my company profitable Freight
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Cove and um and then not long after it went public. Um and so you know we we we deal with what we're dealt um with with
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constraints. Yeah. >> Yeah. Krite makes for great art is uh I think the old expression. So let's let's
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talk about your journey with Circle. Uh stable coins obviously are top of mind because we had the Genius Act. uh my
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bestie uh David Saxs who's our crypto and AISAR for America who's here with me
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at Davos uh or I should say I'm here with him uh he invited me to come this technology is important why I mean look
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um when I got started working on this almost 13 years ago um Bitcoin had emerged um and uh it was from my
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perspective as an internet technologist I was thinking about wow this seems like
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a new infrastructure layer for the internet like a missing infrastructure layer of the internet. The internet had
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ways to represent in you know data, media, audio, video uh you know software but there was no notion of money on the
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internet and there was no protocol for money on the internet and it was very clear at the time that that was going to
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happen. And when when we started um I wasn't convinced that everyone in the world is just going to use like a new uh
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a new you know commodity money like Bitcoin. Um my view is that we needed a bridge. We needed to connect kind of the
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existing fiat system to crypto and to these new networks and um and build like a uh what we called like an HTTP for
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dollars on the internet and that was the idea and eventually that's called stable
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coins. >> Uh early on we talked about we're building fiat digital currency or fiat
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tokens or all this but stable coins stuck. Um, but I mean the basic idea is we now have a general purpose, general
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architecture form of money on the internet, digital dollars that can move just like everything else, but that and
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and can, you know, transact peer-to-peer uh, which is super super powerful and and and provides a a huge amount of
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value to people. And really importantly, um, because of the the technology of blockchains, like we actually have like
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programmable money. Um, and so we're right at the front edge of of a kind of
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I think a renaissance in how money is used in the world. Uh, we'll we'll come
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back to AI, I'm sure, because it ties into that. But, um, you know, fundamentally, we just we need a native
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way to have money on the internet. We need a very safe form of dollars on the internet, and that's what stable coins
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provide. >> And variability and not knowing how much your dollar is worth when you open your
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wallet or your bank account was a blocker for consumers. Yeah, I mean volatile cryptocurrencies, no one's
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going to buy a cup of coffee with a Bitcoin, etc., right? So, that's where the word stable coin came from. It's
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like, well, it's a coin, but it's stable. Um, how do you actually achieve
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that is a whole different thing and and that's where, you know, the model that
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we built, which is fully reserved with like ultra safe assets and, you know, have we have regulators look after it
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and auditors look after it and make sure it's all done in the right way. >> And I remember talking to you offline uh
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about this. It was the easier decision for most people in crypto to go to the Z. The Zug. What is it? Zug.
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>> Zug. >> The Zug here in Switzerland or just be based in Zurich or be based in maybe
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Dubai. And uh yeah, just yolo it and don't worry about regulations and don't
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worry about audits. Don't worry about regulators. You made a different decision. You told me, "No, I'm going to
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I'm going to do this buttoned up and proper." And why didn't you go for the
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quick, you know, uh, I'll just do this offshore and give up my United States
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citizen. >> Why not? >> Yes, we have many crypto people right now watching the show.
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>> Yeah. From San Quinton and >> Yeah. I mean, look, show's popular
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there. I actually it, you know, going back to like even in the founding of the company, um, when I looked at like,
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okay, if if we want to like establish a new way to put like what we think of as regular money on the internet and we
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want to actually build a new internet native financial system that the whole world uses, like actually uses like
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businesses are going to use it and and people are going to use it and we're going to like do loans in it. We're
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going to do all these things with it. like if you want it to work that way, well, you you know, you have to
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integrate with the existing system and you have to work with policy makers to figure that out. There's just no other
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way. So, I testified to the Senate in November of 2013 and you know the if you read the the testimony, it's saying all
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the same stuff now as I as I did then. And >> it was received slightly differently.
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>> It re it really was. Yeah. I mean, well, I got a lot of hate very early on.
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>> Take yourself back to that moment in time where you're you know, you're in
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the right. you're trying to explain how to do this correctly and you get a reaction that is different than what you
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maybe anticipated. >> Well, I think with with a lot of uh technologies on the internet, you know,
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I I was around I think we were both around in early stages of of the internet, early stages of the web and
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there's, you know, there's sort of a a very kind of hard libertarian, you know,
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view and and then there's the, you know, obviously like the statist view at the
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other end end of that and, you know, I lean libertarian. Um, but I think also, you know, in the early days of the
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internet, it was like, well, if if we want to allow companies to get on, well, we need to have like regulation for ISPs
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and we need to be able to have, you know, >> secure transactions and SSL and well,
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then we're going to need people who are, you know, making decisions about who's a
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valid site and who's not a valid site. And these were really controversial things at the time that I think the the,
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you know, more anarcho side of things was was against. And now crypto itself, cryptography and crypto kind of birthed
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out of that. And so like >> these are people who wanted to be outside the system.
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>> Wanted to be outside. Yeah. And so, you know, and I think Circle has always kind
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of tried to find this middle way, which is open public networks, permissionless innovation, building on public
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blockchains, using open-source infrastructure, and and really what you can do with something like USDC as a
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dollar and as a technology is far more uh open than the legacy payment systems and the legacy money systems. And so
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there is a very deep commitment to those fundamental internet ideas. But at the same time like if if you want, you know,
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Black Rockck to use it or you want to, you know, you want the biggest tech companies in the world to use it or or
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you just want someone to hold it in a digital wallet and be like, "Yeah, this
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is actually a dollar and I can rely on it." Like you you end up needing to have
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this kind of structure around it >> for trust. >> For trust. Yeah. it trust uh you know
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remains a key thing and obviously I think you know people talk about in code we trust is sort of the the what you you
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know kind of put around >> easy for a developer to feel that way easy for a somebody who is extremely
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technical to feel that way right >> but for you know a civilian >> right
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>> non-anarchist right >> yeah maybe you want to understand how the dollar is actually backed
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>> that's exactly right yeah so I think we just took that path and and like and
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that that was like a harder path. Uh it took more capital. It took more I had to
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hire you know my first executive was a general counsel and chief compliance officer. Um
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>> well you had to bring those in house I suppose because if you went to a law
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firm they would be like we don't know and >> don't take this risk.
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>> Yeah. I mean I one of the stories actually is that um before you know Jim
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Brier and General Catalyst would give me capital to when we were starting the company they were like we really need to
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know that if you do this it's like it's not illegal like we're not going to have
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some kind of liability issue and so I personally you know on my own with my own money like hired like the top kind
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of regulatory advisory firm in the world to like go look closely at this like talk to people at the US Treasury
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Department talk to others like really figure out like can we do this and and actually we could there was there was a
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path to do it um and and that that's because the US Treasury Department actually had given guidance about how to
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deal with virtual currency in the banking system. This was in March 2013, so super early. But
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>> yeah, I mean, we needed to like know like, >> you know, yeah, is is there a is there a
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legitimate legal pathway to accomplishing what we want to accomplish? That's always been, you
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know, important. >> And as we've seen, uh there's things that are legal and then there are
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incumbents. Incumbents will uh use the legal system to try to stop innovators. You've also faced a little bit of that.
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Yeah. >> Yeah. I mean, I I I would say in the entire history of of building this, it's
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been just there's been huge uphill battles with with regulators and incumbents. And what's interesting is
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that um I found over the years that um if you if you come into a policy maker or regulator and you say, "Hey, there's
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this there's a new technology. It can improve things in this way. Um we're
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trying to figure out how to deal with the risks. There are real risks. like let's not pretend there aren't risks and
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like let's come up with ways to address that like actually people are pretty
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interested in talking. Um and so I think there's there's um you know that's
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there. Um but generally when you go to like the incumbents and say hey we want to like work with you or integrate this
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because we we kind of need to work with you to make the whole thing happen like a lot more skepticism and and I think
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kind of constraint there. And so that's changed now. I mean, we're in a very
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different world now, but >> now it's gone from a threat to an opportunity,
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but there is still a little reticence to >> stable coins and crypto by I think some
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of the major banks and the big players because >> they're maybe they're my perception is
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they're a little concerned that you're too good at what you do >> and you might be too far ahead and if
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you weren't so dextrous at doing this and capable and they started started, you know, 5 years ago, they might feel
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differently about it. Is my intuition close to your assessment or am I wrong? >> I think that that that's there's some
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truth in that for sure. Um, but it's interesting like it's it's both you and
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I have this kind of juxaposition against these other eras of the internet and you
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know when digital media happened and it was like hey you could stream media or you could put up content on the web and
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you could do all this there were all these digital media startups and the media companies were like well we can do
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that too and okay our business model might have to change etc. and um digital advertising, you know, okay, well, you
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can transform advertising into this. Oh, it's more targeted. It's, you know, all
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this stuff. And um but then there obviously were companies that kind of executed like fundamentally different
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technical execution, software execution. They built completely different types of
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utilities with completely different unit economics that kind of turned the product user experience and the and the
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economics upside down. And those those we know those companies >> Craigslist to classifides, Google ad
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network, >> Google ad network, >> New York Times, Amazon Marketplace, you
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know, um and and and many many more like that. And so I think that um >> we're in a similar place right now where
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you know a lot of media companies absolutely and communications companies as well and soft enterprise software
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companies there's big buckets here retailers like sort of said okay this is like a a new paradigm. It's better for
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customers. It's I can deliver a better product. Like the economics are better.
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We just have to do this and we're going to, you know, innovators dilemma blah
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blah blah. And they make that transition and it takes like 5 to 10 years. >> It takes them three times longer than
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probably the innovator like Walmart and Target actually do an exceptional job. Now the United Airlines app
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>> is uh not terrible, right? I mean it's not Uber but >> and this is the difference between like
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a softwaredriven company and and a non like we're a software company like you
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know we fundamentally >> of course we're going to go faster of course we're going to understand UX so
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the banks now my understanding is some of them are threatened by the concept of a stable coin having the ability to
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generate points incentives or in interest essentially and that's kind of the
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sticking point the Genius Act says hey you can have rewards but you can't have
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interest and that was I guess where this was able to get through the legislative
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process. Explain that to the audience. Yeah. >> Yeah. So a couple things. Um so if you
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go back a few years when stable coins sort of emerged um the the sort of all the biggest like regulators bank
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regulators around the world got together what's called the financial stability
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board and said we have to have regulations around this like this can't just go crazy. That was also when Libra
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was coming out and all this. It didn't come out but tried to come out. >> Meta tried to do a their own project and
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>> they gave up on that project >> based on my insider information because
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the government felt >> they had too much power already with their platform and Zuckerberg said
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>> I have enough heat on this company already. I don't want to have another
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group of people thinking I have too much power and he shut it down. That's what I
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was told by interiders. It's interesting is you know one >> is that your understanding as well? I
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have a variety of insights about it, but uh I I think um >> you know we're kind of like a a neutral company,
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right? We're not a giant big tech, etc. But kind kind of coming back to your
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question, regulators got together and said, "Hey, there is this payment system
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innovation. It is this thing called stable coins." And they all kind of said, "Here's here's some
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recommendations for how you could regulate this." And actually all around the world that happened. So it happened
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first in Japan. there's stablecoin laws and then it happened in Europe years ago
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actually stablecoin laws and then you know in the UAE and Hong Kong and then in the US with the Genius Act and in all
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of these stable coins are designed as like a a cashlike instrument a payment instrument they're designed as this like
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form of money to be used in the payment system and that and that's really at the
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heart of it right and um and and and that's uh that's how these laws have
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been written and and it's pretty consistent around the world. So, Genius Act does that, but it also I I think
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provides so you know as a result under the Genius Act Circle as a payment stable coin issuer we're prohibited from
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paying interest directly to stable coin holders. It's the same thing in Europe.
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We're regulated in Europe. Same same rule. Same thing in Japan that you know
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all these markets just the same. But at the same time, like we're building a
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we're building a business. uh we do generate revenue and we work with lots of different types of of platforms and
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markets and distributors and brokerages. We work with everyone from Robin Hood to
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Revolute to to uh Coinbase to, you know, uh Visa and and and and lots of companies. And so those companies, you
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know, stable coins are really important too because they are how people hold money, how people make payments, how
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people trade, how people do a lot on those platforms. And so they want to be able to have the ability to pay rewards
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or have loyalty programs or incentives and other things. And if if they're making money from the relationship with
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us, they want to be able to do that. And that's what the Genius Act captured. And
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I think really um I think it's good. I think it's a good model. Um and >> so you're happy with it as is.
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>> We we think it's we think it's a very solid model. And I think really there's
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some ongoing discussion about well is there a specific set of things that qualify for that kind of those kinds of
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like loyalty and rewards and other things and and how prescriptive should the law be and it's kind of getting
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relitigated a little bit. >> The banks my understanding uh maybe want to try to kill it maybe some of them who
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feel the most threatened. Is that the back channel here at Davos? I mean, I I think um banks see stable coins as both
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a threat and an opportunity, >> right? >> You know, I I can say we're having more
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engagement with more banks in the world than we've ever had before. >> Okay?
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>> And and so and major banks, global banks, regional banks, banks all over
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the world who want to integrate this and use it in payments. They want to use it
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in how capital markets work. Think think about I need to post collateral on an exchange to trade and I'm trading
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different different assets. Stable coins are a better way to do that. Um and so whether it's in capital markets in in
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trading in in um in wealth management in payments there's uses for this. And so
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definitely banks see a lot of >> because it's faster and cheaper. It's
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instant and it's free essentially. >> Yeah. I mean if you talk to like a money
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a global money center bank uh you know you could imagine you know one of those like
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>> I might say JP Morgan >> something like that or a city or one of these banks and you if you ask them
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>> how many different payment networks >> are you integrated into as a bank and
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they'll tell you like over 200 they integrate to over 200 different payment networks
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>> and it's all over the planet >> it's all over the planet >> and it's all different standards I would
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say >> all different standards all different systems etc and so if you if you go to
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them and say Well, stablecoin networks are like a new payment network. They're
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like, I get it. >> Like, this is, oh, it's on the internet. Oh, it has the attributes of how the
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internet works. We understand that. >> And this will be your fastest, cheapest,
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and most trackable version. >> That's right. And so, we actually we have, you know, there's a global
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systemically important bank we work with who's actually moving their own money between their own
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global branches using USDC because it's faster than going through the correspondent bank. trust it more.
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>> Yeah. In in those cases. So bottom line is there's a lot of opportunity for
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banks. >> Bank it is not it's not this is not a black or white thing. I I think I think
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um you know we'll figure out this rewards thing. I'm very sure. >> Yeah.
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>> Yeah. I mean AMX figured it out and a video games figured it out. There was a
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little rattling even in those cases where they're like hey is this a currency because people are trading it
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on eBay trading my sword from World of Warcraft or whatever. these nerds are up to and they were like h is that like you
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have your own currency. It's like >> they're playing video games. Who cares?
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Like can we just move on? There's more important things to do in the world than
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sweat amx points being traded somewhere >> and pretending it's a currency. You're
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up against a offshore platform that has I think maybe three times the amount of under mass
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management. Tether >> tether who's counting three, four, five times. But you have been catching up
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pretty quick. Yeah. >> Yeah. USDC amongst the largest stable coins has been growing faster.
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>> You're number two >> for two years straight. Yeah. We're the
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second largest. >> Tether's first. >> Um and we are we are by far the largest
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regulated stable coin network, right? Um and our, you know, kind of growth in the
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amount of transactions happening with USDC is is growing, you know, quite a bit faster as well. So, um yeah, we feel
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really good. I think our view has been to the earlier question um if this is going to be part of the actual economic
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system. If households and firms and corporations and financial institutions are going to use this and depend on
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this, whether you're a remote worker who's a software engineer working in
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Pakistan or you're a a small business that's importing products from Vietnam
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that's in Brazil or you're a a hedge fund in the US that's, you know, trading
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derivatives, like you're going to want to know that you have something that is
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safe, fully reserved, audited, compliant, liquid, available in the global financial
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system. And you know, when we think about that opportunity, that's an enormous opportunity. The the the TAM of
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legal electronic money today is about $120 trillion and growing because of monetary easing and things like that.
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But >> of that, the uh there's about $60 trillion, which is physical cash and
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non-interest bearing demand deposits. So kind of working capital money sitting out there, right? So there's a huge
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amount of of value stored and used in in as a store of value as a payment system
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money and stable coins can grow into that and there's going to be you know uh
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an infrastructure for that that's well integrated into >> and the business is there's a float on
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this large base of capital that gets to underwrite your business if interest rates are high it's boom times uh
00:23:32
Tether's making over $10 billion a year on their float you're I'm assuming
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billions of dollars or low billions of dollars on your float. I'm not sure if
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that's public knowledge. >> We're a public company. You can look it
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up. >> Yeah. So that I mean I'm assuming it's billions. Yeah. Well, I'm not sure if
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you break it down by that. >> We we we we talk about reserve income. Got it. As a as a
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>> line and it's billions. >> Uh it's a significant amount. >> Yeah.
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>> Uh and so but if it we go into a zero interest rate phenomenon, this could be
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challenging for the business or not. >> Well, a couple things. I mean, if you
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actually look at what's happened, um, when interest rates were actually very
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low, uh, we saw thousand% year-over-year growth, two years straight. So, growth was off the charts. Um, when interest
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rates actually started to rise, we actually saw declines in circulation. >> Oh, why?
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>> Well, it's really the price of money, the opportunity cost of money. So,
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>> um, you know, interest rates set a a a kind of cost to holding money and
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>> so the incentive matters. >> Yeah, the incentive matters. And so what's interesting is that if you
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actually look at from uh like December 2023 when basically the forward curve which was sort of the the the the kind
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of short-term kind of price of money in a sense the forward curve kind of being the market's view of the short-term
00:24:47
price of money when that started to fall because the expectation of interest rates came USDC started to grow uh and
00:24:55
it and and actually from the from the peak of whatever was five and a quarter five and a half down to where we are
00:25:00
which is three and a half or whatever it is. Now, that's I don't know exact
00:25:04
percentage, let's call it 3540% decline in the interest rate. We've had a
00:25:08
multiund% increase in the amount of of USDC in circulation. And so, um there's
00:25:14
an inverse correlation there. And so, I've and I've said this publicly, I've
00:25:18
said this publicly in the media, I've said this many many times. I have wanted
00:25:22
when when interest rates are really high, I my view is we really need interest rates to come down. Yeah. We
00:25:28
really need them to come down because that will help us grow. That will put more velocity of money.
00:25:32
>> The pie gets bigger. Yeah. >> Pi gets bigger and and >> which also impacts adoption.
00:25:37
>> It impacts adoption as well. So more people are investing capital in technology to transform their businesses
00:25:43
to grow >> right >> tech on right and so that is a catalyst and so my view has been that is that is
00:25:51
really important and so um you know I think our view is there is some conceptual neutral interest rate um and
00:26:00
given the persistence of inflation of around 2 and a half% or whatever it is some people argue is is is the neutral
00:26:06
rate should the neutral rate uh and and the kind of baseline of inflation be 2 and a half or 2.8 or
00:26:12
>> you know where the 2% came from. I I talked about it in our previous all-In
00:26:15
episode. I don't know if >> I do, but go ahead. >> Yeah. New Zealand.
00:26:18
>> Yeah. >> Yeah. There was a a politician in New Zealand was talking to their central
00:26:22
bank and he's like what should it be? And he's like I think two and he's like
00:26:25
yeah how'd you come up with the number? He's like my instinct. >> America's been 2.8.
00:26:29
>> 4% unemployment 2% interest rates. Both of those are going to be challenged. Uh
00:26:34
yeah, both of those are going to be challenged because of very significant techno technological and macro forces.
00:26:40
>> Yeah. Job displacement, globalization have had impacts on this depending on
00:26:43
the country. The the unemployment rate and and also >> how many people choose to be employed. I
00:26:49
mean when you have a society that is um you know doing as well as ours is or the
00:26:54
European Union is some people just choose to not work. labor I think labor participation now is 61 or 62% and then
00:27:01
when you and I were coming up it had peaked at 68 69% so it was like >> 15% higher
00:27:06
>> yeah yeah >> it's really interesting to think about that changes
00:27:10
>> tether as a competitor would not be able to operate in the US lots of um reports
00:27:16
I'll be >> I'm going to be u judicious here claims reports concerns from politicians to the
00:27:24
press and everywhere in between and regulators that they're doing some stuff
00:27:28
in the dark areas that maybe you wouldn't want to touch uh in terms of the the dark web, dark economy. Uh but
00:27:36
rumor is they're going to do a a US version of Tether and maybe try to go legit and audited.
00:27:43
uh how do you how do you think about them as a competitor given that they've
00:27:47
been banned in multiple geos and there was you know some very big concerns that they might have a run because there they
00:27:54
weren't dollar for-dollar backed and people were had all kinds of claims about hey maybe they have Chinese paper
00:28:00
and and all these different concerns and they they wouldn't do an att testation
00:28:03
and or they would do an attestation with a bank and somewhere in the BVI that nobody's heard of and they a big KPMG
00:28:11
maybe doesn't >> a lot about kind of I was I was not a tether truther, but I did go down the the
00:28:17
rabbit hole because I reported on it uh you know on the pod and talked about it,
00:28:22
but they they are they they're a significant player. I'm I'm wondering
00:28:25
how you think about them coming to the US and becoming more legit uh and maybe trying to catch up with you in in that.
00:28:33
>> I mean, look, the the beauty of having the Genius Act Yeah. is that it creates
00:28:37
a level playing field. It defines a federal law uh that you have to come in not just be audited, but you're
00:28:46
regulated by if you're large by the national bank regulator, the OC, >> which is a very serious regulator, a
00:28:54
serious credential regulator. And um you know we we've conditionally we've
00:28:59
received conditional approval for uh uh something called first national digital currency bank which is a national trust
00:29:05
bank uh that we're setting up to be part of how we uh operate USDC as well. Um
00:29:12
and uh but but again level playing field uh if you want to comply and build a product under that regulatory framework
00:29:20
you can do that and I think many people will um and this is like when net neutrality happened and common common
00:29:27
carrier rules came like anybody can get into providing data services to the internet anyone can build you know these
00:29:32
things so >> that's great and so uh free market clear rules love it um so My view is there's
00:29:42
absolutely going to be more competition and my my view is also that um the structure of this market uh stable coins
00:29:50
are network businesses meaning they're they they actually exist as platforms
00:29:55
and utilities on the internet like the USDC and our stable coin network is literally the the software protocols but
00:30:02
it's also the tens of thousands of applications that have integrated to the APIs and every time an app integrates
00:30:09
you know cash app just said, "Hey, we're adding USDC support." That's great. Now,
00:30:14
all those Coinbase has it, Revolute has it, you know, banks have it, Visa's using it. Every time someone adds it,
00:30:22
you know, Stripe merchants, Shopify merchants can use it. Every time someone adds that, it adds utility to the
00:30:27
network and it adds network effects. And then the next developer who comes along
00:30:31
and says, "Hey, I want to build an app that uses digital dollars, etc. Which
00:30:35
one should I use?" Well, I have interoperability with all this stuff. Great. So you have these network effects
00:30:40
that are really key and then you also have, you know, what I call liquidity network effects, which is um the the
00:30:46
ability for one to easily get it and use it within banking systems all around the
00:30:52
world. So we've built out this incredible liquidity network by being regulated in Singapore, you know, in the
00:30:59
UAE, in the European Union. >> And this is an easy thing to do. I mean, this is
00:31:02
>> this is a huge build. >> Yeah, >> it's a huge build. and and now it's at a
00:31:06
point where you know >> and it's defensibility >> it is it's defensibility and we have you
00:31:10
know pipes in a sense where you know the some of the biggest capital markets participants in the world company like
00:31:17
companies like black rockck can enable uh a tokenized fund that enables USDC to come in and out of it and their
00:31:24
institutional participants know that'll work right so I think it's a long-winded
00:31:30
answer but the answer is essentially we feel like we've built a great platform
00:31:35
and a great network and we have really strong network effects and they're accelerating and we've been publicly
00:31:40
audited as a corporation. >> Yeah. >> As a New York Stock Exchange governed,
00:31:46
publicly listed SEC supervised company now for for a period of time, but more broadly for a long time.
00:31:53
>> And when companies are going to choose what they're going to build on and what
00:31:57
they're going to use, they're going to look at all that. >> Yeah. The footprint matters.
00:32:00
>> It it does. And so um the marginal value of a net new dollar stable coin coming
00:32:06
into the market is essentially zero. Yeah, you need you know all these things are are needed.
00:32:10
>> And what do you think about this concept that everybody's going to have their own
00:32:14
stable coin? There'll be an Amazon one. Obviously PayPal's added one. Do you
00:32:17
think that's realistic or do you think people are going to be like that's just
00:32:21
I might as well just use Circle? >> Yeah, I I don't see that. I think this
00:32:24
is a lot like other internet platform markets like everyone doesn't need their
00:32:27
own data center. uh everyone didn't need their own vertical search engines, you
00:32:32
know, everyone, you know, there's a lot of things that people thought everyone
00:32:35
didn't need to build their own video platform. Yeah. You know, and so um internet scale utilities um you know,
00:32:42
achieve network effects, they achieve unit economics, they achieve developer flywheels, like all these things and
00:32:48
>> and they tend to lower their prices over time. >> It tends to get Yeah, it tends to get um
00:32:52
you know Yeah. more and more economical and more and more capable and and so um you know there there's there's a lot
00:32:59
there's a a lot one would need to do to to do that and I think even even the
00:33:03
biggest banks um uh who who have pretty big technology budgets uh may reach that
00:33:08
same conclusion. >> What worries you now? What's 2026 forward looking like? What do you what
00:33:12
keeps you up at night? The opportunity is obvious. I think you've explained it
00:33:16
perfectly. Yeah, I mean look, I I think um we're at an interesting place where
00:33:21
um we we have a big piece of the regulatory clarity done. Um there are more pieces that are that are needed. Um
00:33:30
so there's work, you know, sort of related to markets, related to how digital tokens work. That's actually
00:33:34
really really important because we believe in kind of tokenization as a phenomenon, smart contracts as a way
00:33:41
that people are going to like intermediate things on the internet. Um, so there's there's there's more that's
00:33:46
needed there. Um, and I think now, you know, I think one of the things that concerns me is sort of the the the the
00:33:54
changing geo geopolitical geoeconomic kind of landscape, right? Which is um there's, you know, there's lots of
00:34:03
different points of view that are being taken on kind of where economic alignment is, etc. And as as a global
00:34:09
company that is building technology that we want to make available globally, that
00:34:14
introduces new complexity, right? >> Yes. There we are entering an era of new
00:34:20
alliances and national champions. >> Yeah, for sure. >> And you're an American company and
00:34:26
America first and so yeah, you might be looked at differently based upon how the
00:34:30
American Yeah. U enterprise is you know generally done. >> Yeah, that that is very true. Our
00:34:37
headquarters is Freedom Tower in in New York City. um you know and and um at the
00:34:42
same time you know the technology of these networks there's an opportunity actually to to develop versions of this
00:34:51
that are more geopolitically neutral geoeconomically neutral so that if you're from India or you're from Brazil
00:34:59
or you're from Southeast Asia or you're from the Middle East like you can build
00:35:04
and these are high growth markets that you're comfortable building on this with
00:35:08
a variety of different nexuses of economic relationships. And so that's something we think about actually.
00:35:13
>> Yeah. Like a Eurobased stable coin. >> We have the largest euro based stable
00:35:17
coin. >> Uh h how many currencies have you done that with so far? >> We've really only focused on dollars and
00:35:23
euros. And >> why? >> Well, I think um those are those are two widely adopted currencies uh for both
00:35:31
both as a store of value and as freely floatable, circulated uh tradable currencies. Um, and we have a big
00:35:40
commitment to the European market. Um, and so it's also part of just being uh,
00:35:45
committed to that market. We think it's a big opportunity. And then for everything else, we've really built
00:35:50
we've built a technology stack for other stable coin issuers from other markets
00:35:56
now that there's laws around the world. >> Ah, so if they want to do their national
00:35:59
stable coin, absolutely centralized. And are you doing that with Bermuda or some
00:36:03
sort of partnership? The the Bermuda partnership is related to helping them kind of have digital dollars be and and
00:36:10
have e economic activity, commerce activity, treasury activity all happen on chain.
00:36:16
>> Got it. So that's infrastructure play, not I don't know what their dollar is.
00:36:20
>> Well, they're a dollar. It's it's a dollarbacked uh it's a dollar backed
00:36:23
currency. They're already their own stable coin. But um but in other places,
00:36:28
you know, in in you know, the Philippines or in Mexico or in Brazil or in Japan and and other markets or
00:36:36
Australia, Korea, there are stable coins coming and we want to make sure that we
00:36:41
can provide technology so that they can do all the same >> to the government
00:36:45
>> uh or to banks. >> Well, more to the private sector um because stable coins are are private
00:36:50
sector innovated, but these companies all need to be regulated by the government. They need to they need to be
00:36:54
following the same So easier for you to partner with a major partner in those markets.
00:37:00
>> Yeah. And and we want to see that grow and flourish. You know, this idea of an
00:37:04
internet financial system where, you know, all the economies of the world can be onchain and all of the contracts and
00:37:11
financial contracts and markets and capital formation, lending, everything can happen on chain. It's obvious that
00:37:17
small businesses and people who are um very and poker players, people who are, you know, concerned about their fees
00:37:27
>> will and and you you know are focused on that are being driven to stable coins.
00:37:31
Like they they get it. They're like, "Yeah, I'm I'm doing my design job for
00:37:35
you know, I'm a designer in the Philippines working for somebody in India." They're starting to figure out,
00:37:40
hey, I I don't need to pay these. And then consumers are starting to figure it
00:37:44
out. Maybe if they're >> like me, a poker player, you're sending a lot of wires. Every year I send, you
00:37:49
know, tons of wires back and forth for different poker games. >> Yeah. >> Well, now you know Polymark and Cali
00:37:54
both you fund your account with USDC, >> right? Speaking of that kind of >> and well, that's because that audience
00:38:00
understands because they're always looking for edge. >> Speed speed >> and but they're looking for edge in a
00:38:05
poker game like you as an if you were a novice and I was an expert. I was Jason and you were Phil Helm Youth,
00:38:11
whatever it is. um you know it's got a bigger edge on them. It's an inside
00:38:15
joke. Anyway, point is like you might have a 1% or 2% advantage but >> it compounds after a hundred
00:38:22
>> poker games to be a bigger number. >> It does. >> This is why the rake matters and you
00:38:26
know gamblers uh and people like to wager things. >> You know who the biggest users of USDC
00:38:32
are? >> Yeah, that's what I was kind of getting at. >> It's actually it is a form of gamblers
00:38:35
>> which is it's the biggest electronic markets firms in the world. >> Got it. the guys who need the the they
00:38:43
need every edge in terms of milliseconds and cost and capital efficiency to be able to move capital in markets because
00:38:50
at the end of the day they are algorithmically trying to figure out the very next best thing to do. And if they
00:38:57
have dollars that operate with the physics of the internet and the cost efficiency of data, they have an edge.
00:39:03
And so they love it. >> They love it. And then the people who are sending money home to their family,
00:39:07
>> they love it, too. >> Yeah. because they're like wait I'm
00:39:09
paying Western Union 12% of this is a >> right they can have a wallet they
00:39:13
directly send to their counterparty and it's like wait a minute this wait I h
00:39:17
this literally arrived and there's proliferation of of of these digital wallets now that also can where you can
00:39:23
hold it in USDC but spend it through Apple Pay uh that are being issued all around the world too so people can store
00:39:29
value in digital dollars use it through payment terminals and uh that's pretty
00:39:34
cool Turboax >> thesis there cuz that seemed like there's something underlying that that I
00:39:41
wasn't getting to. I mean, it's obvious that like okay, there there's money
00:39:44
flowing through there, but what's the big picture there? >> Well, Intuit's an amazing company.
00:39:49
Obviously, they've been uh around for a long time. They have franchises that are
00:39:53
huge. Credit Karma is a huge franchise actually huge. Uh they're they're
00:39:57
growing what they provide to people through that franchise. Um QuickBooks obviously we all know if you run a small
00:40:04
business you use QuickBooks and actually QuickBooks um you know invo they they invoice uh people through QuickBooks and
00:40:11
it's actually trillions of dollars of transactions a year that are invoiced through QuickBooks
00:40:16
>> and um you know if you can invoice people and settle in USDC that's better
00:40:20
than AC and it's faster and you can imag you can imagine a world where um you
00:40:25
know small businesses can gain an advantage from something like that >> reconciliation you're a Turboax user and
00:40:30
you file your taxes and you get a refund. Imagine being able to get your refund instantly.
00:40:35
>> So, I think there's a lot of cool stuff in it's a very innovative company. It's
00:40:38
it's a tech company, you know, that is in these uh financial technology adjacencies and so we're super excited
00:40:46
about the collaboration that we have. >> I don't want to say there's a loser in
00:40:49
this, but there are people who are going to be challenged by it. How does American Express, you know, and Bank of
00:40:54
America look at Circle and stable coins in your mind if you were to >> because they must call at some point or
00:41:01
>> do they not? >> I I think um all these companies have an opportunity to use this technology,
00:41:06
right? They have this they have an opportunity to use this technology to improve how they provide payment
00:41:11
utility. they have an opportunity to use it if if their customers want to interact with the whole onchain economy
00:41:16
and onchain investments and what's happening there from a from a wealth management perspective. Um I I
00:41:22
eventually think that um you know there's going to be more credit products that are actually built using stable
00:41:29
coins. >> How would that work? >> Well, basically >> and what's the advantage?
00:41:32
>> Well, so already today um the there there have been trillions of dollars of
00:41:37
loans made in stable coins through DeFi protocols. Yes. So you take your USDC and you effectively um uh uh deposit it
00:41:45
into a protocol and on the other side of that protocol is a borrower and you're
00:41:50
paid an interest rate for the amount of time >> you become the house you become the
00:41:54
bank. the individual does actually I mean these are as someone years ago said these are like self-driving banks
00:42:00
meaning it's software machines where the risk management the collateral management the liquidation all of the
00:42:06
liquidity that's there is all just smart contract machines that we can all observe in real time perfectly auditable
00:42:11
in real time transparent you don't have that with a bank uh so you have a really
00:42:16
interesting thing there and right now a lot of that is like lending to people who are borrowing to do things like
00:42:21
investing like margin u margin loans I a million if I own a million dollars in Bitcoin and
00:42:27
>> yeah I want to spend $100,000 of but I want to liquidate any bitcoin somebody
00:42:31
else can make some point >> and you can you can borrow USDC against your bitcoin and so on but I think this
00:42:37
is like this is the early stage of that and so I think our view is that if you have these digital cash things like USDC
00:42:44
that you can create um lending protocols that are are lending for you know I want
00:42:50
to I want to you know hire a new employee or I want to uh you know I need some new uh equipment for my kitchen and
00:42:57
my restaurant or >> factoring equipment leasing >> all all these forms of lending right can
00:43:03
be done uh and the risk that is taken there's there's real risk there can be
00:43:08
underwritten and the insurance on the risks failing can be priced and so you can build credit markets entirely in
00:43:17
software entirely with software machines no >> storefront >> coming into play
00:43:22
>> AI plus these these sort of uh smart contract machines and stable coins I
00:43:27
think creates a really interesting little cauldron >> for credit market innovation.
00:43:33
>> Yeah. >> And um I I have a glean in my eye which is imagine a credit market that worked
00:43:38
like Adwords. Imagine something that was that efficient and could clear and settle uh credit decisions at the speed
00:43:46
of which an auction happens for attention. >> Yeah. And so like those kinds of things
00:43:50
will become possible and that probably would be pretty good for people who are on the other side of of of credit need.
00:43:58
>> Yeah. If you think about also monetary velocity >> than the economy, you can get more
00:44:04
things moving. >> Exactly. >> More jobs created, more chances, more swings at bat, more shots on goal.
00:44:10
>> So money velocity increases. And I think these kinds of credit intermediation
00:44:15
models powered by AI and blockchain networks can actually further increase money velocity. And you know we we have
00:44:21
a we have a a a mission statement to increase global economic prosperity through the frictionless exchange of
00:44:28
value. That is literally our mission statement. And that people a lot of times they think exchange of value means
00:44:33
like oh like making a payment like no value exchange is sort of time value of money transformation. And it's sort of I
00:44:41
have value I don't need right now. You have you you have a need for that value
00:44:45
and I'm going to use time to transform that >> and and then you know create new things
00:44:50
from it. And that's where actual growth comes from. So that's what we want to
00:44:53
see. >> One of the interesting things since we're here talking politics at Davos,
00:44:59
you and I are talking tech and but politics is, you know, one of the big topics here. So we'll we'll sort of end
00:45:05
on that a little bit and get your ideas and your thoughts on it. There's a movement towards socialism in New York
00:45:11
City, my hometown. It's kind of heartbreaking for me to watch. California is uh seizing the billionaire's assets,
00:45:20
literally asking them to write down and audit everything they own, put a value on the painting or the piece of jewelry
00:45:27
they bought for their spouse. And uh yeah, we'll just take 5% of it once. and
00:45:32
they lost uh 200 billionaires and a trillion dollars worth of uh and and they and they don't seem to have any
00:45:40
problem with it as a technologist, a builder, and a capitalist as as long as I've known you. Um what do you think
00:45:49
about this moment in time us Gen Xers are living in watching this socialist movement?
00:45:54
>> It's interesting. I just moved to New York City. Yeah. Just in time.
00:45:57
>> Just in time. Yeah. By the way, that's costing you I think you're gonna have to
00:46:01
pay 2% more a year, but I don't think you're an income guy. I think you're
00:46:04
more of a cap gains guy. >> Yeah. Look, here's what I would say is and and actually I was with Daario from
00:46:11
Anthropic a couple times over the past couple days and he obviously talks a lot about um you know kind of the economic
00:46:17
disruption, labor market disruption, what's going to happen with AI. >> He's not a doomer, but he has deep
00:46:22
concerns. his he has deep concerns and I also do which is when I look at uh the very positive thing which is that I
00:46:29
think we're going to we're going to see an acceleration of GDP growth pick your
00:46:34
time frame 3 5 10 15 years like we're going to we're going to see I think an
00:46:39
extraordinary period of of of economic growth acceleration >> even more than the internet and PCs
00:46:44
>> more than the internet and PCs this is this is a very very very strong very
00:46:49
very big transformation >> and But where most of the the the labor is actually executed by AI machines.
00:46:58
>> Yeah. >> And the capital accrs to the capital owners, >> right?
00:47:01
>> And that's just kind of there in front of us. >> Yeah. It's the fundamental nature of
00:47:06
capitalism. >> Fundamental nature. And and I think um that is just going to challenge us in
00:47:13
ways that we haven't dealt with. Yeah. >> In in in a long time since other
00:47:17
periods. >> Labor was necessary for capital. >> That's right. to uh succeed.
00:47:22
>> Yeah. The industrial revolution was mechanized human labor, right? Yeah.
00:47:26
>> This is this is, you know, mechanized AI. >> By the way, the CEO job seems like ripe
00:47:33
for AI doing a better job than we would do at times, right? Like I don't know if
00:47:38
you've >> I use I use AI all the time in my Do you ask? >> I don't know if they realize what
00:47:42
they're interacting with. No, but I mean I I literally when I was talking uh to
00:47:46
Brian from Coinbase, our friend, he um said he's got all of his data >> into uh a proprietary LLM internally. He
00:47:55
said this on the on the program. I'm not speaking out of school. >> And that he asks it, "What do I need to
00:47:59
know about my organization?" It's like, "Oh, there's non-conensus about this
00:48:03
important issue in the corner over here." And he's like, "I didn't know
00:48:04
that." >> Like, whoa, is that a coach or is that like a parallel? >> Yeah.
00:48:09
>> Like another like CEO? Is it a uh a duplicate CEO? Did you clone yourself?
00:48:14
It's like how do you think about that? >> I mean, I I think about it all the time.
00:48:18
Um I I you know, I'm pushing very hard to encourage that we you are all inside
00:48:25
of Circle doing more with AI. We're we're making sure obviously with safety
00:48:30
and compliance in mind because we're a regulated company. >> Commissions matter.
00:48:32
>> Yeah. So there's there's there's a lot of of of work. We invest a lot in that.
00:48:37
But nonetheless, you know, creating the avenues so that that awareness and understanding can be there and that as
00:48:44
leaders we can turn to that. I I I put a a Slack post in in a Slack channel recently that sort of said if if you
00:48:50
want to become a a a great manager at Circle, probably the one of the best things that you could learn how to do is
00:48:57
manage AI. >> Yes. >> And and so, you know, invest in how you manage AI and AI agents. actually that's
00:49:03
how you might actually become a better manager and leader through that and I mean that
00:49:08
>> it is one of the if you think about the tasks of these product managers who
00:49:12
would run the standups or you know that your mid-level manager historically it's
00:49:16
to keep tabs on a group of people and their targets and their time frames and who's excelling and who's got blockers
00:49:23
AI is kind of better suited for that >> really good >> and so the a great middle manager which
00:49:28
is a derogatory term but let's just say use the word manager a great manager
00:49:31
should be able to manage 10 groups using say Claude's co-work. I don't know if
00:49:35
Have you been playing with it yet? >> It's incredible. >> It's wow.
00:49:38
>> It's really incredible. >> I mean, it's out a week and I'm like I
00:49:40
I'm sitting there like >> we haven't deployed that inside the company yet, but I've outside looked at
00:49:44
it and used it. Um, >> what impresses you about that? >> I mean, look, the the ability to take
00:49:50
tasks that I have to do and just teach them and then it just can do them is extraordinary. And I'm trying to get
00:49:58
this deployed in my household, too. But, um, it's it's really amazing. interesting way to do it is uh because I
00:50:03
I went down this rabbit hole like estate management stuff like when you have to deal with this when you get a second
00:50:08
home or however many you wind up having. Um >> notion is I think the best solution
00:50:13
right now because notion put AI into it. Do you use Slack personally too for your
00:50:18
domestic affairs? >> Uh you don't have a domestic >> I don't have a domestic slack.
00:50:22
>> Okay. I have a domestic slack and a domestic notion. So I took the stack
00:50:25
from the office and I just did it at home. And what that did for us was uh the people who bridge you know the
00:50:31
family office and this you know can kind of they know the same tool stack then notion has been investing in their AI so
00:50:36
much >> that when you do a query like an AI query of your notion and you're like hey
00:50:42
this house with this HVAC you know this issue it's like answer you're like oh my
00:50:47
god that would have taken like three phone calls in an hour. Uh and I think it's going to change everything about
00:50:54
how we work. Yeah. >> What what what else did Dario think? I I think I might have cut you off before
00:50:59
you. >> Yeah. I mean, look, I I think the big picture there was just like um whatever
00:51:04
your politics are, whatever you think about taxes, whatever you think about the social contract,
00:51:09
>> all that's I think in the coming years going to kind of have to get thought
00:51:12
about again. Yeah. In different ways. And I And I don't think it's going to h
00:51:16
it's not going to be the straightforward answers that we've turned to. No, it
00:51:20
can't be. And so that that's why I I you know my my answer is like yeah there's
00:51:26
things California, New York, etc. are doing, but I think when we when we look at that in comparison to the the broader
00:51:32
political economy that we're going to have in front of us, those will seem uh
00:51:36
modest in comparison to what we've got to think. >> By the way, we fixed it in startup land
00:51:41
long ago. It's called stock options. And if you look at the Trump accounts, which
00:51:45
Invest America, Michael Dell did, and Brad Gersonner and a number of our friends,
00:51:50
>> um, >> if the 42% of Americans who don't own an equity, and you know, are not part of that, uh,
00:51:58
let's just say it's 50 because some of them own them kind of passively. Half
00:52:02
the country doesn't own equities. If everybody had equities in a superanuation fund like they have in
00:52:07
Australia and they're watching them go up, then you're not like, well, right,
00:52:10
>> screw those guys at Amazon and Apple and Google. >> Being stakeholders in the success of
00:52:16
this technological transformation is critical. >> Yeah, that would I think solve so much
00:52:20
of the problem. Jeremy, I could talk to you for hours. You and I have talked for
00:52:24
hours in our lifetime about all these paradigms. Um, continued success and it's just a pleasure to to spend time
00:52:30
with you. It's always like one of the great discussions I have. >> That's awesome.
00:52:33
>> I can't believe it. George Curts is here. He's the CEO and co-founder of
00:52:37
Crowd Strike. >> This is your second Davos. >> Yes. >> Why are you at Davos? Obviously,
00:52:42
everybody knows CrowdStrike. Yeah. >> We'll get into it. Why are you spending
00:52:46
uh the week at Davos? >> Well, I have all the world leaders here and all the best company CEOs are here.
00:52:51
So really it would take me a year of activity and flying around the globe to meet all the people that I need to meet
00:52:57
and uh it's just a fantastic opportunity to meet customers and get business done.
00:53:01
>> Yeah, it's efficient. >> Very efficient. >> It's this tiny little ski town.
00:53:05
>> Yep. >> It's not fancy at all. This is in Aspen >> and everybody's within five blocks once
00:53:10
you get through security. >> Yeah. >> Speaking of security, AI has had or is
00:53:14
going to have I want to get your opinion on this a profound impact on defense and
00:53:19
also offense. black hat, white hat, everything in between. What is the attack vector that AI is most effective
00:53:26
at sitting here in 2026? >> Well, there's a couple of different areas. One is if we think about the
00:53:32
adversaries, I kind of I kind of create a pyramid where you've got nation state
00:53:35
at the top, very sophisticated, but less of them. The middle band of the pyramid,
00:53:40
okay, is e-crime, more of them, little less sophisticated than the top, and then the bottom is just activism, okay?
00:53:47
So essentially you're minting new adversaries because you don't have to have all the knowledge that you had to
00:53:52
have in the past. You can ask any number of uh LLMs and you can get answers back.
00:53:56
So what's happened is the attack timeline has been compressed. You can automate all of these sort of attacks
00:54:03
and you can do it with a level of sophistication that looks like a nation state. That's one of the greatest areas
00:54:09
of exposure is the speed and the sophistication has dramatically increased >> because the answers have been compiled.
00:54:15
>> Yeah. The scenarios can be run even by somebody who is a level six hacker out
00:54:20
of 10. I'm just making a number up here. >> And they can become an eight. So just
00:54:24
like a developer using a co-pilot goes from being an average developer to an above average. The same thing is
00:54:29
happening with hackers. >> Absolutely. And one of the things that we're seeing is autonomous malware. So
00:54:34
most people are probably familiar with malware runs on your computer. Typ typically people would use anti virus to
00:54:40
protect against that malware. But what we're seeing now is prompt only autonomous malware, meaning I can drop
00:54:47
uh the prompt on your computer by a variety of means. And then it will autonomously interact with an LLM and it
00:54:54
will give a unique fingerprint every time it runs. So your computer is different than the next guys. You have
00:55:00
different data and it will begin to prompt its way to getting to what it needs without ever phoning home to
00:55:06
someone controlling it. >> Oh wow. So, just to unpack that and translate it, I did a little hacking in
00:55:12
my day in the 80s. Okay. A little phone freaking mainly. We'll get into it offline. All right. I think
00:55:17
>> I I had a Haze 2400 guilty charge. I started with the Ventel 300 bod. I think
00:55:22
we're of the same. >> I had a 300 Haze. >> You had the 300 Haze.
00:55:25
>> It was a tank. >> It It literally had such a great form factor that's never been repeated. This
00:55:30
great like rectangle. But >> we're old. >> We are old. People are now saying, "Hey,
00:55:35
I'm going to use the Comet browser by Perplexity. Chat GPT's got a browser.
00:55:39
Claude has an extension." And it's really wonderful to say, "Hey, get all
00:55:43
my emails from LinkedIn and then put that into a database and add it to my CRM."
00:55:48
>> Wonderful. You watch it work. Get me the cheapest flight. The same thing can be
00:55:52
used by an adversary to get on your computer. >> And one of the great ways is detection
00:55:57
in security. You're in the business of detecting the attacker. But what you've
00:56:01
just informed me of, which kind of blew my mind, even though it's completely
00:56:05
obvious, is the LLM can say, "I'm going to do a thousand attacks today, and I'm
00:56:10
going to make each one different and unique." >> And unique. Absolutely. They're unique.
00:56:14
>> So scary. >> They're not actually code because they're prompts, right?
00:56:18
>> And traditionally, malware would phone home. They would be there would be like
00:56:21
a tether, right? >> So you'd always be able to see the signature of something phoning home. Now
00:56:25
these can run autonomously, whatever without ever phoning home, >> like a sleeper agent. You like you drop
00:56:30
them into America, 20 years later they start pursuing but they never have to return to base.
00:56:37
>> Exactly. >> How does one counter that? >> Well, you need AI to counter it.
00:56:41
>> Okay. >> And u I mean that's been a big part of the success at CrowdStrike. When I
00:56:45
started the company, I founded in 2011. It was using say AI but machine learning
00:56:49
at the time to detect uh malware that's never been seen before. Now, obviously
00:56:53
that's evolved into Gen AI and really leveraging basically the the large data
00:56:59
set that we have that we've amassed over 14 years to train our own models to be
00:57:04
able to counteract with the speed that you need what the adversary is doing. So, we took, if you think about it,
00:57:09
there's only a few ways to break into a bank. I'll use this analogy, right? You
00:57:13
can drive there, you can walk there, you can use a gun, you can blow the safe, but at the end of the day, you got to
00:57:17
get the money and you got to get out. Yeah. >> And these it's the same way in the
00:57:21
computer world. There's certain we call indicators of attack. We've trained our
00:57:26
models to look for these. So it doesn't matter kind of what you look like or
00:57:30
what car you're driving. We can identify that. A big part of our success has been
00:57:33
the AI we've built over the years with this tremendous data set. >> Yeah. So you might be able to get into
00:57:38
the bank, but at some point you got to leave with the diamonds. You got to get to the safe.
00:57:42
>> Exactly. >> That's where you can catch them. >> Exactly.
00:57:45
>> Uh you mentioned state actors and you mentioned for profit. When we look at a
00:57:49
country like North Korea, they need revenue. >> Y >> hacking is pretty great revenue source.
00:57:54
They were even >> using AI, my understanding, and I'm sure you've been following this to get
00:58:00
developer jobs in the United States, convince Americans to put laptops in their homes
00:58:06
>> so that they could remote work. Talk to me about that attack vector actually
00:58:10
infiltrating companies as employees because of this remote work nonsense. >> Well, we were the one of the first to
00:58:16
ever find that. So we were actually going through developing some new AI algorithms. Yeah. And we saw something
00:58:22
that was called signal which basically strips the noise from the signal and we saw the signal and we said this is
00:58:27
really weird and we investigated it and we said okay this looks like somebody using remote tools to you know what's
00:58:34
going on here and we went further and then we said we think it's North Korea
00:58:39
and we think that it's an employee who or the company thinks it's an employee.
00:58:43
So when the R&D team came back to me, they said, "Okay, we want to notify our
00:58:46
customers and we want to say we think we found this, but we have to tell them that the employee that they think is an
00:58:52
employee isn't really their employee." >> Yeah. The the phone calls coming from
00:58:56
inside the building. >> Exactly. So for us, it was, you know, when when you have a piece of malware,
00:59:00
it's like, okay, that's bad. You can detect it. But when you have to tell a
00:59:03
company that their employee may not be their employee, there's, you know, you
00:59:07
have >> it's a little gentle. Like >> you have to be gentle. It's you're
00:59:10
letting them know just how incompetent they are when it comes to security. I said it, not you.
00:59:14
>> Okay. Well, it it it's hard to find these guys, but any event, we we found
00:59:18
40 of them. We were right. 40 of them. >> That that's for the first run. We found
00:59:22
hundreds now over >> hundreds in America. >> Yeah. >> Now, they were doing it, my
00:59:26
understanding is for the highpaying salary to fund stuff in North Korea. Is that correct or not? They were doing it
00:59:31
to get trade secrets. >> They were they were doing it to buy access. Why Why breakin when you can
00:59:36
just log in? >> Oh my god. Yeah, you know, so it's a lot easier to get somebody hired. So, true
00:59:42
story. So, we we actually say we think this employee is not an employee. Company investigated. They investigate
00:59:47
it and they go, "Yeah, you were right." I said, "Well, tell me the story." And
00:59:50
they said, "Well, we we went to this person's boss and we said, "We don't
00:59:53
think that's that's a real person." And they went through all the reasons why.
00:59:58
Finally, they said, "It's, you know, we think it's a North Korean." And the guy,
01:00:01
his boss said, "Well, do we have to get rid of him because he did such good
01:00:04
work?" >> Oh my lord. So the value of a top tier developer is so high that you'll take us
01:00:10
by. >> Yeah, exactly. >> It's like ah, you know, we kind of need
01:00:14
him to ship. >> Yeah, he was doing such good work. >> He was he was shipping. This is one of
01:00:18
our best performers. What now? >> I mean, remote work has opened up so many vectors. You believe in remote
01:00:25
work. Do you support it in the company? >> We do. Yeah, we started the company in a
01:00:28
remote first. >> But this opens up all these attack vectors. What's >> even without remote? Well,
01:00:33
>> best practice best practice really and what we see companies doing is we'll
01:00:37
take a simple one. Meet whoever you hire. >> Wow. Shocking. >> Shocking. But you know, with COVID and
01:00:42
remote work and and things of that nature, there's a lot of people that get hired that people never met. And you
01:00:48
know, you'd never see them on the screen and but the work would get done. You
01:00:52
know, emails would get written >> and then, you know, these things happen.
01:00:56
So what we're seeing now is the best companies are actually embedding a security person in the HR group
01:01:02
>> where they're prefiltering all these resumes because the resumes are AI
01:01:06
generated. The LinkedIn profiles are AI generated. So you want to catch them up front rather than in the interview
01:01:12
process. >> A crazy idea. Hey, for your final interview, can we fly in? Or hey, week
01:01:15
one you're going to be at HQ. >> That's it. >> That's it. You solve the whole problem
01:01:19
because then they don't take the job. They move on to the next person. >> That's it.
01:01:23
>> Okay. So we're looking at state actors. Russia still number one state actor.
01:01:27
>> China. Russia. I mean it depends like if you you know pure intelligence, pure
01:01:32
>> ability. >> Russia. >> Russia. Yeah. Why? >> Why are they so good?
01:01:36
>> I mean like the cold war you could say is over. But you have really smart
01:01:40
people that went to work in various areas, right? Obviously from a nation state, but also from an e-rime
01:01:45
perspective. >> Um they're smart. They know what they're doing. Typically they're they're what we
01:01:49
call low and slow. The Chinese over the years have been a little bit noisy, kind
01:01:53
of a smash and grab. They've gotten better. >> Um, >> not subtle.
01:01:56
>> Not subtle, but much better now. But the the Russians are very targeted. They're
01:02:00
they're patient and um they're not always gathering IP information to steal
01:02:06
it, but they're they're gathering intelligence for reconnaissance for nation state activities andor then they
01:02:11
moonlight for, you know, for e-crime. >> And let's go to China then. This is, you
01:02:17
know, if we were sitting here 10 years ago, we'd be talking Kumbaya, China, we're all going to win together. Uh the
01:02:23
decoupling has happened essentially. Do you have operations there? Do you work with Chinese companies?
01:02:28
>> We don't have we don't have operations there. We don't have any revenue. We
01:02:31
don't sell into China. >> Never have. >> Never have. From the start of start of
01:02:35
the company. >> And what's your take on the decoupling? Let's go a little geopolitical here.
01:02:40
Like >> they are our adversary obviously competitor. >> You know their technical ability is
01:02:46
pretty strong, right? We're seeing that with AI. Are they the the future competitor and
01:02:52
the future attack vector that you have to worry about? China. >> Well, I don't know that the future
01:02:55
because I think it's already there. It's here. It's and it's been here for the
01:02:58
last, you know, 20 plus years. I mean, some of it may not have been talked about
01:03:02
>> in the early days, but they're they're very very prolific. They're very good.
01:03:06
And, you know, it's one of those you obviously nation state is always going to be nation state versus nation state.
01:03:11
You know, that just happens. The big thing with China is there's a commercial
01:03:15
aspect to what they do. So if the government breaks in and steals a trade secret from some company in the US,
01:03:20
they'll just give it >> to another company in China, >> right? >> That doesn't happen necessarily with all
01:03:25
nation states. >> Yeah. We're certainly not breaking into China to steal their trade secrets. It's
01:03:31
going >> and giving them to a US company >> and Yeah. The CIA is not breaking in to
01:03:35
to figure out what BYD is doing to give it to Tesla or something. Correct. >> So it's it's a one-way relationship
01:03:41
there. Now, there's also something very unique. They make hardware. They ship a
01:03:46
lot of hardware, our laptops in some cases, Huawei, other countries. They're
01:03:52
putting spyware or back doors into all that hardware. Yeah. In your estimation? >> I mean, over the years there's certainly
01:03:58
been cases where people have had concerns on, you know, what was actually shipped. Um, and supply chain is can be
01:04:05
problematic whether it's actually shipped with something or, you know, in some cases packages get diverted
01:04:12
somewhere else. the the malware gets installed and it gets reshipped out, right? So, you've seen that.
01:04:17
>> Um, so it's important like to have uh good hygiene on whatever equipment is
01:04:22
being brought in and you know the providence of that manufacturer and that software that goes on it and that that
01:04:27
applies really around the world. >> Do you trust signal and uh your iPhone
01:04:34
to protect you as a corporate executive? Like what measures do you take? >> Well, because you're a target.
01:04:38
>> Yeah, we're a target. I mean we our team spends a lot of time making sure that we
01:04:41
try to do the right things. Uh you know >> so WhatsApp signal what about those two?
01:04:45
You think those are attack vectors people can do insertions there? >> Well, you know I think you have to look
01:04:50
at the privacy versus the the actual attack vector. You know if you're clicking on links that are in different
01:04:56
you know because you got a link in signal doesn't mean the link is secure whether it could be signal or something
01:05:00
else right. So there's a lot of ways to get implants on these devices. is I mean
01:05:05
I would say you know an iPhone is more is safer than just a regular computer because the way it runs. Um but you know
01:05:12
if you look at the nation states and some of the creative ways they can actually get into a phone as an example
01:05:19
if they want to get in bad enough they're going to get in. >> How do they get in? What's what's the
01:05:23
attack vector? They get you to click on a link. They insert something. That's
01:05:27
the typical >> Yeah. Typically what they'll do in there is there's a whole uh black or gray
01:05:32
market on the value of a zero day. So there are zero days in all software and if you have one say for Apple iOS that's
01:05:39
super valuable and generally if you click on something and it's not known zero day you just by going to a browser
01:05:45
>> explain explain in plain English to the audience what a zero day is a >> a zero day is a yeah sorry you know
01:05:50
talking technical jargon >> not everybody's got the hacker bonafites >> I know not everybody's a haze guy but
01:05:57
yeah if there is a a software vulnerability that hasn't been found and patched yeah
01:06:01
>> it means that they can exploit that and and they can run code and in some cases
01:06:05
in the past um there was a vulnerability where they could simply send you an SS SMS message like you didn't even know
01:06:11
you didn't have to click on anything but SMS message would process this information and then they would put an
01:06:17
implant on the phone >> biometrics two factor this has changed everything yeah in the industry made it
01:06:23
much more secure >> secure but not much more yeah if you look at a lot of the attacks they're
01:06:29
identity based attacks and what you see is that even when you have a credential or if you steal a credential uh or if
01:06:37
you have a session token which means that you've already authenticated. >> Yeah.
01:06:41
>> Right. So even if you have two factor if you have the session token >> Yeah.
01:06:45
>> you can replay that and get access to a system. >> The crypto people learned this the hard
01:06:50
way. >> Y >> they basically were using two factor over SMS. People call the phone company.
01:06:56
>> Yep. >> Reset the SIM. >> Yep. >> And then they got you
01:06:59
>> and game over. Yeah. >> Game over. Now your Bitcoin wallet is emptied.
01:07:03
>> Correct. >> Where there's money, the hackers will go figure out a way.
01:07:08
>> They figure it out. And the humans are are normally the the weakest link.
01:07:11
>> Yeah. You know, the way I was able to get my first exploit was I called the
01:07:16
New York Public Library. I knew they had like a vax system with the dialup. Okay.
01:07:20
>> And I just said, "Hey, uh, it's Joe from it at the 34th Street branch.
01:07:25
>> I need the number for the dialup." >> Yeah. >> Literally, the person gave it to me at
01:07:28
it over the phone. >> They want to be helpful. I dialed it and then I could search the stack and
01:07:33
>> search all the books. That was the only thing you could do. >> What year was this?
01:07:36
>> 87. >> Okay. >> Yeah. I was at Forom and they had Bitnet. They had the internet there and
01:07:41
I was just starting to to see these things. But it's almost universally that
01:07:45
calling somebody on the phone, meeting somebody, compromising somebody. >> That's it. That's it.
01:07:50
>> And normally the day >> the weakness is between the keyboard and the chair.
01:07:54
>> The keyboard and the chair. What is the best practice then for you when you're
01:07:58
advising your customers of explaining to them just how the human factors part of
01:08:05
this is the most important one to focus on? >> Well, there's certainly an educational
01:08:09
element and you also have to look at how people get paid in the motivation. So, typically they're going to call a help
01:08:14
desk. Okay, how does a help desk get paid and what are their metrics? Their metrics is get a call, open a ticket and
01:08:21
close it as quick as you can. >> Got the incentive is speed, >> right? particularly if it's a third
01:08:25
party >> out >> in another country, >> right? So their their whole job is to
01:08:30
open a ticket, solve a problem, close a ticket. So if you follow the money and the incentives, you can see why there's
01:08:36
a problem and people want to be helpful at the help desk and hence they get into
01:08:40
the situation. So um you know, first start with the education piece and then having the right controls, identity
01:08:47
protection, things like what crowd strike bills is going to be additive to making sure those sort of things don't
01:08:52
happen. people using their own devices. Bring your own device. This is the other
01:08:56
major attack vector. Corporations make the mistake on you. >> Yes. Um the you know your own device
01:09:02
could be like uh a cesspool if you let your kids you know use it. >> Um or it could be pretty good but that's
01:09:09
the reason why now there's enterprise browsers to kind of contain what people
01:09:13
do even if you bring your own device. >> Yeah. The enterprise browser is running
01:09:17
on a virtual machine at some headquarters. You provide that kind of situation. Um that that's sort of the
01:09:22
old school way of doing it. So what we've done, we actually just acquired a company uh called Sarafic.
01:09:27
>> I saw that. Explain to me the state-of-the-art there. >> Yeah. So the state-of-the-art is not
01:09:32
switching out a browser because if you use comet or you know Firefox or whatever you want to use the browser you
01:09:37
have. So it's actually running beneath the browser in and will support any browser which basically looks at the
01:09:44
interaction what the browser is doing and if there's sort of malicious activity in the browser or there's an
01:09:50
identity that's compromised you can stop it at the browser and you can wall off
01:09:53
what you do with the browser uh including what data you take out of it. So it's a it's the front door now for
01:10:00
how people work and how adversaries get in is through the browser. How should companies implementing AI in the
01:10:06
enterprise putting their data into these clouds and working with partners? Uh Claude Co this week kind of blew
01:10:14
people's mind. I don't know if you saw the announcement or played with it.
01:10:17
>> Yeah. >> And uh I was using it earlier this week and I'm authenticating
01:10:21
on Gmail, notion. Oh yeah, my desktop files. And >> I got like halfway through this and I
01:10:27
was like this probably isn't a good idea, but >> it can be pretty scary. Well, let me let
01:10:32
me tell you a story. Not specific to that, but um >> we don't want to throw them under the
01:10:35
bus, but it was a lot of authentications I did. >> Exactly. Exactly. They're doing great
01:10:39
work, but um there there was a uh a customer who basically created a whole suite of AI agents to help their
01:10:46
automation in their IT department. Right. So they had one agent that was looking for sort of IT problem software
01:10:51
bugs and it it found something, you know, while the code was being before it was committed. So the agent said, "Hey,
01:10:57
I found this bug. I want to fix it." But it didn't have access to fix it. So, it
01:11:01
it went to the Slack channel that had the other 99 agents and said, "Hey, Lord, does any other agent have access
01:11:08
to this thing because I need it fixed." And there's an agent that raised its
01:11:12
hand and said, "Oh, I have access and I can fix it." >> Do you see how scary this is? These two
01:11:17
agents are reasoning and they went right around the guard rails that were put in
01:11:20
place. >> This is unintended consequences and these LLMs are essentially guessing
01:11:28
what you want them to do. They're reasoning it. Oh, it is reasonable for me to go ask for help,
01:11:33
>> right? >> It is reasonable for me to give help. Now, what if it pushes the wrong code?
01:11:38
What if it makes a mistake? And then, how do you ever track that down? Who's
01:11:43
monitoring these agents? The agent technology has unlimited upside, but my lord, you're going to be in business for
01:11:48
a long time. >> Well, this is it. It's called AIDR, which >> AIDR.
01:11:52
>> Yeah. >> AI detection and response. >> Got it. >> So, there's a concept that's been around
01:11:56
that we helped pioneer, which is really endpoint detection and response. So on your computer, most companies have it,
01:12:02
you can monitor and see what's happening and prevent bad things from happening.
01:12:06
We have to do that now with an agent. And this is why it's a huge opportunity
01:12:09
for us because on average, each employee is going to have about 90 agents they control.
01:12:14
>> So we're going to have protection and visibility across all of those agents,
01:12:18
whether it's from a third party or whether it's a homegrown agent. And that, you know, is a massive TAM
01:12:24
opportunity for us. Do you trust the LLM operators with Crowd Strikes data or do
01:12:30
you want to stand up your own large language models? >> We well we have our small language
01:12:36
models and we do work with just about all of the large language models. Um but we've built our own guard rails around
01:12:42
what gets shared, how it gets shared, and how we process any of the data back. The the key
01:12:47
>> Are you concerned about it? >> I can see you're kind of like thinking
01:12:50
like hm yeah like maybe there are some concerns here. No, no, there is. But we we tried to engineer for that. Got it.
01:12:56
>> Right. Because you want to leverage and this is the thing, you know, it's
01:12:59
tokconomics. There's there's an economics to how you use the tokens as well. Plus, you want to get the right
01:13:04
data. So, we've built small language models for things that we control with our data. And then for other bigger, you
01:13:11
know, frontier type models, I mean, you're not going to replicate billions in R&D. You want to leverage what's out
01:13:16
there and take the best of it. >> Yeah. You're uh also a race car driver.
01:13:20
>> Yes. And hey, you've done well in your life. You got to buy a piece of an F1
01:13:26
team. I've been going to F1 races. I went to three this year. Okay. Tell tell
01:13:29
me everything about it. >> Where do you want me to start? >> How did you get the bug? Uh
01:13:32
>> when did you get the bug? Because this has been an American thing the last
01:13:35
couple years. I can't believe the rack at these F you well you guys are doing.
01:13:39
Somehow you made this the most important thing in America ever. >> I I knew
01:13:43
>> to survive was >> that is a big driver. And then it's a luxury experience. So now I've gone to
01:13:48
what did I do? Miami, Austin, and Vegas. I've been to three in the last year.
01:13:53
>> I had even heard about it 5 years ago. >> That's fantastic. Well, I mean, little
01:13:57
backdrop. I grew up I had zero money as a kid. I always liked >> Where'd you grow up?
01:14:00
>> Uh, New Jersey. >> Oh, really? I grew up in Brooklyn. Yeah. >> You know, we used to play Ford.
01:14:04
>> Yeah, exactly. >> Okay. So, um, I always like cars and fast things and never had the
01:14:08
opportunity to do that. First car was a Toyota Celica. >> Toyota Celica. Yeah. 73 Mustang, Grande,
01:14:15
351 Cleveland. Okay. Okay. >> 351 Cleveland engine and slightly more horsepower than yours.
01:14:20
>> I know. Mine was just a I had a commute in the thing. >> Yeah. Okay. It was functional.
01:14:23
>> It It worked. It functional. But um so I never had the opportunity to do it. And
01:14:27
then I got into I mean I always followed sports racing. Mostly it was indie and then you know got into racing later. We
01:14:32
talk about that. But I've been in Formula 1 since 2018 because Crowdstrike became well Mercedes became a customer
01:14:38
of Crowd Strike. >> Nice. >> And then I met Toto Wolf who runs a team
01:14:41
and you said, "Hey, why don't you think about working with >> You got in at the right time." Good.
01:14:45
That was a good trade. It was a good trade. So, we got in then and then um over the years I built a great
01:14:50
relationship and then just last uh fall I put a deal together and own 5% of the Mercedes team now.
01:14:55
>> Congrats. And now you ride yourself. You're in the bronze league, I hear.
01:14:59
>> Yeah. So, I race uh in fact, I got to go back for a race in Daytona. >> Nice.
01:15:03
>> Still got the 24 hours. >> What What do you drive? What kind of car?
01:15:05
>> Uh LMP2. >> Explain. Uh it's a it's a fullfledged race car. I mean, it looks like a
01:15:12
>> like an F1 car >> with with with with covers over the wheels. >> Got it. So, it's safer. Yeah.
01:15:18
>> What do you think of this new Corvette ZRX1? Have you seen this beast? >> I'm trying to get one. Yeah, fantastic.
01:15:22
I know. >> I got a contact. >> Okay. >> At GM. >> Everybody's got a guy.
01:15:26
>> They They gave me an to play with. >> Yeah. >> Which is kind of the precursors. You
01:15:31
know, they took the -ay and they put it in the ZRX1. >> Yeah. >> And uh my lord, off the line. It's like
01:15:36
having the Tesla acceleration off the line and then you have the you know, 600 in that one. I think it was 600
01:15:43
horsepower plus 150. Got it about 800. >> This new one, it's a,000 horsepower plus
01:15:48
250. >> The thing cost $200,000. >> And for the money, it's it's it's a
01:15:53
tremendous car. >> And you know, I I still think to this day, I mean, someone will keep me
01:15:57
honest, that >> the ZR1 will and will still have a warranty even if you track it.
01:16:03
>> Really? >> Yeah. It's one of the the rare cars. At least it used to be.
01:16:06
>> Yeah. They said you can take the ZR1 in the with the -ray version, you can
01:16:10
change the driver profile, >> lower the RPMs, you know, the when it shifts and everything, so you can
01:16:16
actually talk on the phone. >> Yeah. >> You know, and have a conversation and
01:16:19
not make the passenger throw up. >> You want to hear the engine. >> I think that's right. I had a C6
01:16:24
convertible in that generation, which was just dynamite. Canary yellow. What color are you looking at? This is where
01:16:30
we're going to get real. You saw that crazy green. >> I like the blue.
01:16:34
>> You like the blue? It's beautiful. They they have like a a really beautiful
01:16:38
vibrant blue. >> Yeah, that's uh I was looking at the silver and I I don't usually like silver
01:16:44
on cars, but it looks on that car. It looks tremendous. >> I keep all my Mercedes silver.
01:16:49
>> You do? >> Yeah. >> H interesting. All right. Listen, the question everybody wants to know,
01:16:53
Greenland, what should we pay? >> You know, I'm >> How do we make a deal?
01:16:57
>> I I I'm sure I'm sure there's lots of deals that's above my pay grade, but I
01:17:00
think whenever you see the geopolitical tensions go up, there's always more security activity. So
01:17:05
>> yeah, good for business. >> It's a good It's good for business. So
01:17:08
>> seems like something we should I I you >> the Trump administration is spicy on the
01:17:13
margins. You may have seen >> uh but they've been good for business. Yeah. Supportive of the business
01:17:18
community. >> I think so. And you know when you think about what the administration is doing
01:17:21
with security, they're taking a business first approach. You know what that means? They want to save money. They
01:17:26
want to consolidate. They want platforms. They want better outcomes, right? And they don't want this
01:17:31
peacemeal buying across the government. M >> so absolutely I think they're doing a
01:17:35
great job on security. >> I've been asking people's perceptions and it's overwhelmingly been
01:17:40
>> Yeah. They're calling us up. They're they're at the table. They're engaged.
01:17:44
>> So whatever you think politically uh you know all these cultural issues, they're
01:17:48
listening and they're engaging the business community which I think is a great thing. All right, brother. Thanks
01:17:51
for doing it so much. Talk soon. And transportation of course is one of the most important parts uh in the business
01:17:58
sector and vetos. We're promised flying cars. We still don't have them. But my
01:18:05
guest today, who's spoken and is a friend of the All-In podcast, is going to tell us how close we are to getting
01:18:12
rid of these noisy helicopters buzzing around and having vetos, nice and quiet ones. Adam Goldstein, CEO of Archer
01:18:20
Aviation. Welcome back to Allin. >> Thank you. Good to be here. >> Two years ago, you were at the summit.
01:18:24
You promised us we get flying cars. When can I mean that's Let's just get to
01:18:28
breast tax. This is all anybody wants to know. When can I go from Manhattan to JFK? When can I go from San Francisco to
01:18:38
Oakland airport? When is this going to happen? And is it going to happen in the United States first or is it going to
01:18:43
happen in the UAE or Saudi or maybe China? >> The hardest part about bringing these
01:18:49
aircrafts to market are is the certification. Like we have to prove that these aircrafts are really safe.
01:18:53
It's not you can't blame the regulators. It's not a regulatory thing. They
01:18:56
actually have to be very safe and reliable. So the rules got put in place. But the most important thing that
01:19:01
happened in the most recent history was that President Trump issued an executive
01:19:06
order that was fast-tracking the the the program through the regulators and really starting to create a platform for
01:19:13
us to launch. And so they are now five cities going to be announced in the first quarter and then we'll start
01:19:18
flying in the summer. And that will be the first time you'll see these aircrafts flying in around the cities on
01:19:23
a regular basis. that will allow the general public to get comfortable with this and they will certify us sometime
01:19:28
after that because the political side of this is not a Democratic Republican thing. It's a consumers have to feel
01:19:34
comfortable with this. They have to watch this and so we don't want to be fighting that and so they're giving us a
01:19:38
chance to go do that. >> Okay. So it's 2026. We're sitting here January of 2026. You guys are going to
01:19:44
announce five cities. >> The government will. DOT will. >> Oh here in the United States they're
01:19:49
going to and these are for all veto companies. Jo, yourself, all the contemporaries will get to do those five
01:19:54
cities first. >> Correct. >> You got any guesses of what they could be? What are people thinking and how are
01:19:59
they selecting them? >> Well, my big push has been around Huntington Beach um in right around Los
01:20:04
Angeles because >> You live there? >> Uh I don't. But we won the exclusive for
01:20:09
the LA 28 Olympics. And so that was a big deal for us. So we need to start trial operations really ramping up um
01:20:15
the ops because it's it's challenging. We also recently bought the Hawthorne
01:20:19
airport right outside of LAX to help give us a hub. >> Hawthorne, the private I've flown out of
01:20:24
it many times. >> Exactly. >> So that's Humble. >> It's a It's a great platform.
01:20:29
>> They bought in Wait, let's just let this soak in, folks. Archer Aviation bought
01:20:35
an airport. >> We did. >> Can you just buy airports? It's a privatelyowned enterprise.
01:20:40
What did that cost you? >> Yeah, you can. It's I'll call it a sort
01:20:43
of buy it. You can control it. So there's a runway that's owned by the municipality. There's all the property
01:20:48
around it and then there's the control of the master lease. It is very hard to
01:20:51
do. They come up for sale every 50 years. So if you look back the >> What did that cost you?
01:20:55
>> It's around $170 million for everything including the FBO and all the real
01:20:58
estate around. >> So you own all the real estate. That's got some residual value. But this gives
01:21:03
you a massive opportunity because Los Angeles is um yeah known for its traffic. So that would be a place where
01:21:10
you could have a home base for these. >> Exactly. It also happens to be home to a
01:21:15
lot of the Elon companies and so it borders SpaceX. The original boring tunnel was there. Uh Tesla design center
01:21:21
is there. You have a lot of good connectivity around people trying to change the you know the future of
01:21:26
transportation. >> Oh yes. I'm sorry. I was thinking Van NYth in the south.
01:21:30
>> Yeah. >> Funny story. Uh namerop Elon was like hey I'm thinking about renting a place
01:21:36
for my my rocket ship company before it had a name. >> Want to come down and see it? I went
01:21:40
down to see it. It was at Horthon >> and uh I said he had just gotten the Falcon and I said uh
01:21:45
>> can the can you land the Falcon here? He said yeah. I said get this office space
01:21:51
immediately. >> So you own the SpaceX office or you're the >> that's on the other side of the fence.
01:21:56
>> Got it. >> And so we have the airport side. They have some hangers.
01:21:58
>> What a perfect location cuz if memory serves me it's just south of LAX.
01:22:02
>> Yeah. About 2 miles from LAX about 2 miles from Sofi Stadium. So the goal is
01:22:06
to make that a hub of as of Los Angeles. Imagine a Grand Central type of >> uh you go down to San Diego, Lagona,
01:22:13
just so many places to the south, Manhattan Beach. >> And let's push our imagination here.
01:22:18
Boring companies also based there too. And so maybe we can convince Elon to start digging some holes around LA and
01:22:23
all of a sudden you could really transform LA. >> What do you think the other cities will
01:22:26
be in America? And how are they picking them? >> Well, FA and DOT are going to be the
01:22:31
ones that choose. So there's the companies have submitted uh in partnership with the cities these
01:22:36
different bids. And I think it's going to be a mix of urban areas, rural areas.
01:22:40
I think it's probably going to be a lot of red states. You'll see. Um, so my
01:22:43
guess is you'll see something in Texas. You'll probably see something in
01:22:46
Florida. Um, maybe you'll see something in >> red states because Trump's a Republican
01:22:50
or because they're easier when it comes to regulations. >> I think both. It's also just easier to
01:22:55
operate. Got it. >> And so if you want to land a helicopter in California, there's a lot of rules.
01:22:59
You want to land one in Texas, you put it on the grass wherever you want. >> You know, it's interesting. When I got
01:23:03
my ranch in Texas, they were like, "This is a perfect place to put a helipad."
01:23:06
And I was like, "Hell yes." Yeah. Like, "You can really put a pad down." And
01:23:10
they're like, "Yeah, it's your ranch. You can do whatever you want." Now, in
01:23:12
LA, >> it used to be that people would land helicopters in their backyards. I don't
01:23:18
know when that stopped, >> but what are the rules in LA now? >> Each municipality has a different rules
01:23:22
around, you know, the different permitting you need, the different amount of time that takes to get done,
01:23:27
how you certify the helellipad, if you need to certify the helellipad. >> So, you basically can't do it.
01:23:30
>> Yeah. It makes it very hard. That being said, this is a safer platform than what already exists,
01:23:36
helicopters. So, I think there'll be a lot of loosening of that because it's
01:23:39
just increasing safety to something they already do. >> Now, New York City, that's the big one.
01:23:44
I think Joby made an announcement that they're going to be at one of the ports.
01:23:46
Yeah, you're you're contemporary. I don't know if I would describe you guys
01:23:50
as competitors now because like the early days of say EVs or self-driving cars, if this works, man, we're going to
01:23:56
need 10 >> archers and Jobies to do it. But they're going to be out of Manhattan soon. Yeah.
01:24:00
>> Yeah. We both will operate out of the city. I mean, it's a wonderful place.
01:24:03
It's already the biggest helicopter market in the US. So, there's three big
01:24:07
helports that exist already. The Westside, East Side, and the Downtown Wall Street helport. So, it's already
01:24:11
naturally kind of configured. It is a very complex congested airspace. And so, I also think, you know, the way that
01:24:17
this will come to market will be in, you know, relatively low volumes. We'll gain
01:24:21
the trust of the public. They'll allow us to keep scaling this stuff up. So,
01:24:24
you can start with maybe tens of aircrafts and then, you know, maybe over five, 10 years, you scale it up to
01:24:29
hundreds of aircraft. Robo taxi and Whimo story. You start slow, build trust. Are you guys on the clock? You've
01:24:35
been working on this for a decade. Yeah. >> Yeah. So, it's the tech actually goes
01:24:39
back to NASA 40 years ago, how to use multiple electric engines to fly airplanes and then really kind of thanks
01:24:44
to Larry Paige and the early work at Zierero. They really helped um you know bring a lot of that um technology.
01:24:50
>> Yeah. Larry bet on two or three, right? >> Yeah. So, he's been super involved. He
01:24:53
was a huge part of the industry. And then if you go back um really um Uber did a great job when they had the Uber
01:25:00
Elevate platform which really put it into the mainstream that was around 2016 >> with Blade right they were doing or
01:25:07
>> Yeah they they kind of well they really were like almost a research project to
01:25:10
showcase what >> right I remember when Travis did that yes >> yeah and then 2018 Morgan Stanley had a
01:25:16
100page initiation report saying it's the next $9 trillion market that opened
01:25:20
up the capital markets to everybody and so that that that allowed us to do this >> you guys spacked right after or during
01:25:25
CO. Yeah. >> Uh 2021. Yeah. >> Okay. So, right after CO started to Wayne and uh was that the right
01:25:31
decision? I know these spacks have been up and down. Being public can be a distraction and you guys are a deep tech
01:25:37
company with a long runway. What's it like trying to deal with shareholders in
01:25:42
a public company when you know you're in a multi-deade roll out of a product like
01:25:47
this? Well, I actually give a lot of credit also to the Reddit community because the retail army really helped
01:25:55
allow Archer to raise the money it needed to raise in order to get to where it is. So, we've raised around $4
01:25:59
billion of capital to date. >> Four billion. Wow. >> Yeah. And we'll probably, you know, over
01:26:02
time, you know, raise more. But the stock is super liquid because it has such a huge fan base in the retail
01:26:07
market. It creates liquidity which allows the institutional investors to play which allows the whole kind of
01:26:12
cycle to keep going. So, as long as we keep performing, there's this pot of gold at the end of the, you know, the
01:26:17
Morgan Stanley sort of pot of gold, we should be able to keep stairstepping up the valuation, keeping everybody happy,
01:26:22
raising the capital, keeping it going. DTEK is extremely capital intensive. And this was the right avenue for us for
01:26:27
sure. It's >> really interesting when you think about it. Who is a better base of investors
01:26:31
for long-term? Public markets, institutional investors, venture capitalists, private equity, or the
01:26:37
lunatics on Reddit? It turns out the lunatics on Reddit, all due respect, I say that with like uh peace and love,
01:26:43
like they actually probably get it right because they know what consumers want. >> Yeah.
01:26:48
>> And they're willing to go for it. Yeah. >> They're also willing to kind of look
01:26:52
past the quarterly earnings issues and really to say like this is a technology they want. I mean, who wouldn't want it?
01:26:58
It's safer than helicopters. They're super quiet. They cost less. It's
01:27:01
convenience for everyone. Like nobody loses here. This is a win-win type. >> Where's your product out? You guys are
01:27:06
flying runs obviously. Where are you flying the runs currently? Yeah, >> so uh two core places we fly. Uh one is
01:27:13
in Northern California in the Bay Area. So we fly at a Selenus the airport there
01:27:16
which is about 90 minutes south of the Bay Area and then also in the UAE. So we've have a great partnership with Abu
01:27:21
Dhabi. Um Muba's been an investor. IHC has been an investor. >> Oh is an investor.
01:27:25
>> Yeah, they've been a wonderful partner. >> Yeah, it's really opened up the uh um
01:27:30
the country. >> Yeah, they're thinking in 50year cycles, I think. How often do you fly this
01:27:36
thing? What's the distance that it flies? And are there humans in it? >> Yeah, so we fly most days piloted
01:27:40
flights. Um, and so you can fly them without without pilots. It's actually pretty easy to fly the planes, uh, you
01:27:45
know, autonomously or remotely or, you know, automated is a better way to really describe it. Um, but we fly them
01:27:50
piloted and the goal is to work towards enough flight hours, enough uh, confidence from us, from the regulators
01:27:56
that we can start, you know, operating commercial service. We're getting there.
01:27:59
It takes time to do that. I mean, >> how often do you fly in it? >> Um, I haven't flown it. um just the test
01:28:04
pilots do >> and why they won't let you. You're the CEO. >> No, you could. I mean, if you look at if
01:28:08
we're just sort of honest about flight test programs, it's, you know, there's a
01:28:12
dangerous part when until you kind of cross every tee here. And if you go back in time, I mean, most of the big uh
01:28:18
aerospace companies have had crashes with early platforms. So, you really try to be careful with just the test pilots,
01:28:23
very serious testing until you get to the point where you're close to the certification side. Virgin Galactic,
01:28:28
another uh spack, they had a tragic instance. And uh yeah, um aviation is dangerous in the early days. When will
01:28:37
you be willing to get in one, I guess, is the question we all want to answer because we're not getting in until you
01:28:42
do it every day. >> Later this year, that'd be my >> Later this year.
01:28:44
>> Now, you married? You got kids? >> Married with two kids. >> Okay. So, you have the conversation with
01:28:48
the wife, I assume. Uh >> probably tell her after. >> What's her Oh, but what's her position?
01:28:52
When will she let you go in it? Um, she's a huge believer and supporter of everything I've done. Okay. So, uh, I
01:28:58
think she'd trust me when I think it's time I would do it. She'd be okay.
01:29:01
>> Listen, continued success with it. It's obviously going to work. It's obviously
01:29:04
going to change the world. What What do we need to know as we wrap here about safety and why these are much safer?
01:29:12
Because the idea of even having a pilot seems uh, a little bit performative. Like,
01:29:17
>> is it just to make the passengers feel a little bit better? because these things
01:29:22
obviously are going to be flown by computers much better than pilots eventually and and eventually I mean
01:29:27
like by the end of this year. >> Yeah. The the challenge with um autonomy is regul regulation and infrastructure.
01:29:34
So even if you could do it there's no rules in place to get that done and even
01:29:37
if the rules were in place how does a system work because today air traffic control is very very manual. If you
01:29:42
listen on ATC when you fly in somewhere they're guiding you in turn 10 degrees
01:29:47
to the left drop a thousand feet an hour. >> That makes total sense. So the
01:29:49
infrastructure doesn't allow for autonomy >> yet >> yet. Even though autonomy we would both
01:29:56
agree would be safer this year than a pilot. Would you agree with that statement
01:30:00
>> assuming you could work your way into the air traffic control system? Definitely the actual you know humans
01:30:05
make mistakes, computers make sure all less mistakes and so maybe no mistakes. And so it it certainly would that's the
01:30:11
dream that's the goal with the advancements of LLMs. It actually allows this interesting period of time where
01:30:16
you can now communicate with a machine in a way you couldn't really before. And
01:30:20
so there's this probably middle ground that happens where there's pilots
01:30:23
talking to machines, machines talking to pilots, and so you can start to implement uh different systems. And
01:30:28
that's where I think it goes first actually. >> Ah, that's fascinating. So when you're
01:30:31
clearing with the tower, it's just that the vetol is talking to the tower. >> Yeah. It's think about like um you know
01:30:38
instead of like looking at your map, looking at the weather, you know, understanding you know all the different
01:30:43
trackers you have to follow, the machines can just do that and make the decision and say to do this. So it
01:30:47
actually is easier for a machine to do it than a human. And again, I would encourage you listen to air traffic
01:30:52
control. I'm obsessed with it. There's an incredible channel on YouTube called
01:30:56
Blanco Lio. Have you ever heard it? >> No. >> So go on YouTube and Patreon and throw
01:31:00
this guy five or 10 bucks a month. >> Yeah. He's he's based out of he's a
01:31:04
pilot, commercial pilot, and he's based out of uh Lake Tahoe area. And all he
01:31:09
does is break down every aviation incident. >> And it's amazing, and I've become a
01:31:14
little bit obsessed with it. And uh he just breaks it all down. It's almost universally,
01:31:20
the pilot makes some series of incredibly poor judgments. I'm talking about in private aviation as opposed to
01:31:27
commercial aviation. And um yeah, it's just great that there's somebody like
01:31:31
him out there. Now, how many rotors on the thing? >> Uh 12. >> 12. >> 12. Now, is that six with two in each or
01:31:37
is it like 12? >> It's 12, >> which means 12 motors. >> Yeah, there's actually redundant motors.
01:31:42
There's actually 24, but we for simplicity call it 12. >> So, there's 12 redundant motors. 24. And
01:31:47
then how many blade? How many um are they double blades? Like one on the bottom, one on the top.
01:31:52
>> Um there's five blades on the ones on the forward part of the wing and four
01:31:55
blades on the ones on the back. >> Why? >> There's lots of difference. Why is there
01:31:58
a difference? >> One are used just for um the uh lifting portion. So the ones in the back and
01:32:03
then they stop and then the ones in the front are used for both lifting and the cruise. So they have different uh
01:32:08
configurations. >> What scenario do you have the most concern about and then work on the most?
01:32:15
Because with 12 of these, anybody who's flown, >> you know, just a toy drone, if you come
01:32:19
up to it and you push it, you hit it, it just immediately just >> gets back. Uh now with 12 of these and
01:32:26
24 and your technology I'm sure it's even smoother and better than that. So
01:32:32
what do you worry about like some catastrophic electronic failure? Are are the electronic systems redundant? The
01:32:38
battery failure? >> Everything is redundant. Like you have to >> what do you worry about?
01:32:42
>> Um from a safety perspective today I would say the biggest thing is the
01:32:45
pilots. That's probably >> take the pilots out. Now what are we worried about?
01:32:49
>> Um you're always work worried about just different cascading failures.
01:32:52
>> Got it. So, you know, there was an incident in the industry where one of
01:32:56
the companies had a um a propeller blade dislodge and it cascaded their aircraft.
01:33:00
You don't really know that unless it actually happens. >> The blade comes off, hits the other
01:33:04
blades, >> and then the whole thing cascades. So, you don't really know if that's going to
01:33:08
happen until it happens. You have the math behind it that you could try to predict, but when scenarios happen, you
01:33:13
know, so there's, you know, you try to protect against cascading. >> How many of these 12 could go out and
01:33:18
that could safely land? Um, well, one of the beauties is we're also building it
01:33:22
to u be able to take off land conventionally and so you can lose a lot. We have a big 50ft wing. You can
01:33:27
glide. The glide ratio is huge. You can get up to max 10 miles of glide. So, you
01:33:31
can do a lot of things here. That's the only way to really certify at the standards the FA wants you to do it. So,
01:33:36
it gives you a pretty big uh >> you have those nice wide wings you can glide in.
01:33:40
>> Yeah. >> What height? What's what's the ceiling on these? Now,
01:33:43
>> they can go up to 11,000 ft. There's no real reason to. Um, it's not
01:33:46
pressurized. Do you really want to fly helicopter range 500 to 2,000 ft? And >> what do you take from the helicopter
01:33:53
industry away from, you know, when they have accidents, what happens? It seems like those pilots particularly are
01:34:02
really skilled, >> but also maybe on the margins, maybe I'm reading into this, cowboys a little bit
01:34:10
eccentric. Yeah. >> Yeah. I mean, it depends. I mean, every scenario is is obviously like pretty
01:34:15
different. The beauty behind these aircrafts is the redundancy allows you to just have a um um a capability to
01:34:22
certify with near zero single points of failure or zero single points of failure
01:34:27
where a helicopter doesn't have that. So, you know, if you think about one big
01:34:30
rotor, there's a lot of parts that go into making that one big rotor work and
01:34:33
if that one part fails, you have a you have a catastrophic event. >> So, that can happen. They're mechanical
01:34:39
complex machines. Yeah. And so, you know, the with the EV tall side, you reduce that uh complexity By what if you
01:34:46
were to say it's x times more safer without us like you know holding you to it if you were to ask the
01:34:55
10 engineers working across the 10 companies in your field not you but what do you guess those 10 engineers would
01:35:01
say it's the currently this times more safer than helicopters >> well that will be a standard that the
01:35:07
FAA um you know makes us certify to so the question will be what's the ultimate
01:35:11
standard so 10 the minus 7 10 the - 8 10 - One at a billion, one at 100 million.
01:35:16
>> Yeah, but you think it's twi What would your >> It would be an order of magnitude safer.
01:35:20
>> So, three, four, five times safer is a pretty >> Yeah. >> reasonable goal. 10 times a reasonable
01:35:25
goal. Why are you here at Davos? >> Um, >> you virtue signaling about being all
01:35:29
electric? What's going on? What's >> uh selling air aircraft? That's
01:35:32
>> you're here to do business. >> Yeah. >> Who are you selling to? Just nation
01:35:35
states. >> Yeah. So, geographically, obviously, easier to sell stuff in the US or kind
01:35:39
of close to the US. here you get to meet uh different companies and countries. Um
01:35:44
the Middle East, GCC has been, you know, very active. Um Africa's been very active. Asia has been very active. So
01:35:50
there's a lot of great folks to go see where you can kind of line them all up.
01:35:53
So we'll announce, you know, deals, you know, here. We'll, you know, sign things
01:35:57
uh here that will ultimately get announced. So it actually is very beneficial from a business standpoint to
01:36:02
come here. And most of the companies here are AI. So there's a lot of AI talk. We're a non like AI predominant
01:36:08
company. There's a lot of AI in what we do, but we don't sell AI and so we sell
01:36:11
infrastructure and it's the perfect place to meet the ministers of transportation, the superic yeah the
01:36:17
heads of state. So there's lots of opportunities to, you know, kind of bring Western tech to this.
01:36:21
>> I think they see having vetos as a point of pride for their country. Yeah. Some
01:36:26
absolutely countries like this is I don't want to say vanity project, but is
01:36:29
something they can point to and say, "Look, we got here first." >> Yeah. I could see the UAE, I could see
01:36:34
Saudi, I could see Qatar, >> absolutely >> Kuwait all feeling that way, like, oh,
01:36:38
we have this. >> Absolutely. There is another element where, you know, Davos is sort of a
01:36:43
non-defenseoriented. They don't like you to talk about defense here. We we do
01:36:46
have a really strong partnership with Andrew. And so, we've been building the
01:36:50
new um kind of autonomous attitudable aircrafts. We talked about uh one of the second word you autonomy.
01:36:55
>> A tritable they call it. So, >> a traitable. What does it mean? >> It's not a 20-year plane. It's not
01:36:58
expendable like a one time missile one way type of product. They call it like space in between. They call it tritable.
01:37:03
>> If you lost it, it wouldn't be a big deal. >> Yeah. So you the goal is So the one of
01:37:07
the programs we've talked about is is one is called the project nyx. It is an
01:37:10
autonomous collaborative uh attack helicopter uh drone. So think like um sort of like a um you know an Apache
01:37:17
type of platform. So they'll be a big manned asset. It'll have a bunch of
01:37:20
drones that fly with it. So that's a program we're working on with Androl. We
01:37:24
build the core aircrafts and Androl missionizes it. So think sensors or munitions, those kind of things. but it
01:37:29
would fly with a bunch of little drones around it to protect it. >> Um, we are effectively the they're not
01:37:35
little, but we're it's you know these are huge aircraft. We It's almost like
01:37:38
think about it this way. If you have an Apache, which is a 50 to$70 million asset and it has a person in it, you're
01:37:44
you don't want to risk it for lots of reasons. One, there's a person. Two,
01:37:47
it's super expensive. Three, very hard to replace. >> If you're not willing to risk it, it's
01:37:50
not that much of a deterrent. >> And so when you do risk it, you want to be certain you can have things come
01:37:55
back. But what if I could make an aircraft that does the same thing, the same fighting power, maybe even more
01:37:59
fighting power at 90% lower cost with no with no pilot? >> Wow. That's key because these pilots are
01:38:05
worth $25 million each. They literally have a friend who was in special forces and he told me that they put a number on
01:38:12
each of them, how much they invested and the replacement cost of a Navy Seal of a
01:38:17
he wasn't in the Navy Seals, but one of these kind of type groups. You could
01:38:19
actually know the replacement cost of a person. Uh and they called them assets. you know, these top elite folks. So, you
01:38:27
have no problem working in defense. That's awesome. Yeah. >> No, I'm the country.
01:38:31
>> I'm a patriot. Um I'm a super believer in what the US is doing. Um and they've
01:38:35
been, you know, as a country extremely helpful um to new industries like Archer and Ebie Talls. And so,
01:38:41
>> maybe more so than the last administration, >> a lot more so. Just the quick example on
01:38:45
that was I could not get a meeting with the former Secretary of Transportation. >> Couldn't get a meeting.
01:38:50
>> Wouldn't take a meeting. And I know he's busy. >> Wait, wait. a publicly traded veto
01:38:54
company who's meeting with the Gulf monarchies being courted. >> Zero meetings.
01:39:00
>> And you requested meetings. >> Requested meetings. >> How many times?
01:39:03
>> Multiple times. >> And they literally, this is Brian Armstrong story. He wanted to meet with
01:39:06
the SEC. They're like, "Yeah, no, we're good." >> Uh, Secretary Duffy comes in and all of
01:39:10
a sudden, like monthly. It was, it was, we want to make sure we can re-industrialize America. This is
01:39:16
important. Um, aviation leading the world is important and modernizing air traffic is important. And if you can
01:39:21
help in all all that, we want to hear from you. What what can we do to help you? And that's what was resulted, by
01:39:27
the way, in the executive order that came out. And so that helped the industry because I I showed them a path
01:39:31
because we won the exclusive uh for the LA28 Olympics to fly air taxis around uh
01:39:36
you know, that city during the game. And so we'll sort of control the air during
01:39:39
that. And I said, I need a path to make sure I can do that. This will be a huge opportunity.
01:39:44
>> I think people have not taken the Democratic party has not taken this to
01:39:49
heart yet. It's not about being subservient to the technology industry or capitalism or corporates. It's about
01:39:58
winning the future. And part of winning together for American companies is at least meeting with them and hearing the
01:40:07
vision. Like how does that hurt the previous secretary of transportation to meet with the veto companies? How did it
01:40:13
hurt the SEC to meet with Brian Armstrong or any number of crypto companies? It was they were in contempt
01:40:21
it seems in hindsight of the entire technology and business industry. >> Yeah. I mean in the end if this works
01:40:29
imagine the jobs we will create. Imagine the you know GDP contribution we will create. I mean the the FA administrator
01:40:35
you know kind of publicly keeps saying 11% of GDP touches aviation. And so it's
01:40:41
capped because of air traffic. We have to upgrade that system. >> I'm red pulling pilling myself as we
01:40:46
speak here. But it's like if you're if you believe that then you would think
01:40:49
you want to unlock that and it will help everybody. Like literally no one loses.
01:40:53
So you would think you'd want to do that. >> It was almost like they had
01:40:57
>> like an axe to grind with capitalists for some crazy reason. And the opportunity to embrace the industry was
01:41:04
always there for them. Yeah. >> Whether it was incompetence or intentionality, the result is the same.
01:41:08
They set back the industry years by not engaging. Greenland, how much should we pay? What do you think? What do you
01:41:15
think it takes? I will tell you, >> jump into it and make yourself an interesting guest. We should take it,
01:41:19
right? We should just take it or we buy it. >> I saw something that said, um, there was
01:41:23
an offer kind of the buzz here. >> That was more than the GDP of Denmark. And so, uh,
01:41:28
>> the offer was big. I mean, there's 55,000 people. Let's make a deal. How
01:41:33
much do you all want? I mean, >> well, the funny thing of my meetings here, so I come to sell, you know,
01:41:38
aircraft. That's what we come to do. And I will get asked that question in nearly
01:41:42
every meeting. And I I mean literally back in Silicon Valley like no one's I
01:41:47
mean yes we've heard it on the news of course yes of course it's important but
01:41:49
people aren't talking about it on a every hour basis I come here at every meeting there's people commenting on it
01:41:56
session here >> and Trump negotiates by tweet or by truth social whatever they call that
01:42:02
platform uh by truth by post say what you will this has been on the agenda for America for a century or two and it's a
01:42:11
critical deal. If Trump gets in, President Trump gets incredible enjoyment out of negotiating a deal and
01:42:17
solving a long-term problem for America, I say let him let him cook. >> Yeah,
01:42:20
>> let him cook. >> I agree. >> Greenland, we're here. 51st State. Let's
01:42:24
do it. All right. Listen, continued success and thanks for coming on the pod again. We're very lucky to have Chase
01:42:28
Lock Miller with us. He's the CEO and co-founder of Cruso Cloud. C R U SEO E,
01:42:34
not Kuso, Cruso Cloud. >> You got it. You got it. >> Which is or was the first NeoCloud
01:42:39
really. you were kind of >> we were part of an early contingent of NeoClouds, you know, between us and
01:42:44
Coreweave and uh yeah, Lambda. >> How did did that occur? Because you had anticipated buying a bunch of H100s
01:42:52
before everybody else and you had the inventory. How did that start that you got such a good lead?
01:42:56
>> Well, so we had started well before Hopper uh came out. you know we were uh
01:43:01
you know Cruso is a business that's always taken this very energy first approach to developing computing
01:43:06
infrastructure um and really changing uh you know the the the the the motion from
01:43:12
uh trying to find trying to collocate uh compute in these in these network hubs and and really focusing on where we can
01:43:18
access abundant uh energy. So um you know we uh uh you know we're experimenting a lot with you know the
01:43:25
amper generation which preceded hopper so a lot of A100s uh we built out this you know high performance cloud platform
01:43:32
that was meant to enable AI innovators to you know do incredible work uh you know we launched uh before chat GPT came
01:43:40
out and so uh you know sometimes you're in the right place at the right time and
01:43:43
>> yeah timing was good >> yeah timing worked uh >> and your biggest customer by far is Oracle
01:43:50
and OpenAI. >> Correct. So, uh, you know, we we we're a vertically integrated business, which
01:43:56
means we're focused on not just, uh, the compute layer, but also the energy development, the data center
01:44:01
development, uh, as well as the, you know, application layer where we're, you
01:44:05
know, running things like our managed inference service. And uh you know as this boom really took off uh you know
01:44:11
the scarcity of data centers uh became very apparent and our ability to build those largecale AI data centers very
01:44:18
quickly uh became a very in demand uh you know skill set. So uh Lee Yeah. >> Hey guys in the back if you're talking
01:44:25
could you just take it outside because it's going to get picked up on the pot.
01:44:28
Appreciate it. Three two. Uh so why West Texas? Is it because the politicians there and are pretty permissive in terms
01:44:38
of giving permits and you can build quickly like Elon experienced with his uh big uh factory in Austin or is it
01:44:45
because of energy? >> Yeah, it was it was it was really an energy-driven decision. So uh you know
01:44:50
in in Abalene, Texas, we had uh you know it's an area where a lot of actual renewables had been built out uh on the
01:44:56
back of production tax credits. Um, so there was an abundant amount of wind and solar uh that was there that actually
01:45:01
had uh issues with transmission. Um, so power prices were actually frequently negative. There were renewable energy
01:45:07
producers that were having to curtail that could be producing power but actually were shutting down because
01:45:11
there was no marginal demand. Um, and >> so the grid didn't need their energy.
01:45:17
>> Exactly. >> That's wild to think about. It's also wild to think about that Texas has the
01:45:21
largest solar base of any uh c any state in the union. Yeah, >> absolutely. Um, and you know, we we went
01:45:29
there and we said, "Man, you guys have too much energy. Hey buddy, I gotta do I
01:45:32
have a do I >> I got an idea >> demand for you." Um, and so we uh you
01:45:37
know, we have a 1.2 gawatt substation there. Uh, we've also built a 350 megawatt gas plant on site um to
01:45:44
energize one of the largest clusters of GPUs in the world. >> So, was there gas under the actual data
01:45:50
center or they're shipping? >> No, no, no. We had access to a pipeline
01:45:53
that feeds into uh you know 10 uh gas turbines that are on site there. >> Amazing. And the gas turbines those were
01:45:59
a blocker for a while too, huh? >> Uh they still are. I mean you know gas turbines are are a massive supply chain
01:46:04
constraint um as people look to energize compute infrastructure. I think a lot of
01:46:08
people we were really one of the first groups to be focused on uh you know natural gas powered data centers doing
01:46:14
things behind the meter off-rid uh and I think a lot of people have sort of followed this pathway uh which has
01:46:20
created a lot of supply chain challenges uh with some of the major producers folks like G Vernova you know
01:46:26
Caterpillar has a company called Solar that we work with very closely uh you know Seammens uh Mitsubishi uh and we
01:46:33
actually recently did something with uh an incredible company Boom Supersonic Yes. Boom. Supersonic was making the
01:46:39
Concord replacement Blake. >> Correct. >> And uh they're making their own engines
01:46:45
that go pretty fast. Uh and so what was the idea there? >> Yeah. So, you know, they had
01:46:50
re-engineered this this turbine for supersonic jet travel. And uh you know, we Colleen, my co-founder and I were
01:46:56
talking to Blake and said, "Hey, you know, could we use that to generate power instead of you know, transport
01:47:01
people over the ocean at supersonic speeds?" And uh you know now we're we're
01:47:04
we're you know their first large purchase order for $1.2 billion of uh gas turbines to to to power AI critical
01:47:12
AI infrastructure. >> It's wild to think about the the gas turbines and jet engines are not super
01:47:19
dissimilar. >> No, I mean I think this is the full playbook of you know GE historically
01:47:24
right. I mean uh the reason GE Vernova exists uh is you know their leadership in terms of you know uh uh air
01:47:31
transportation as well as power generation. >> Yeah. And I wonder if it's really
01:47:36
interesting about that opportunistic thing for Blake to do from boom supersonic is that now that will allow
01:47:42
him uh to fund his Concord replacement. Yeah, >> absolutely. Uh you know power is a great
01:47:48
business and you know we think he can make a lot of money as uh you know the scaling up of AI infrastructure occurs.
01:47:54
Uh and and hopefully, you know, he's able to build those incredible supersonic jets that uh get us to Tokyo
01:48:00
much faster. >> And the Stargate project, >> Yep. >> is a $300 billion project. What's the
01:48:08
number? Because there was big announcement at the White House and there's been a little bit of uh you
01:48:14
know, wink wink like these are numbers were kind of estimates. What's the realistic footprint of this? Um, so you
01:48:22
know, I I think Stargate has been a uh a term that's been used to describe a lot
01:48:28
of different things at this point. Um, you know, initially our our our campus was called Stargate and then, you know,
01:48:34
Stargate was in then a company for a while and then I think OpenAI sort of described it as all of their spend on
01:48:40
compute is just sort of broadly labeled as Stargate. Um so uh I think the number
01:48:44
is 500 billion and this incorporates you know chips, data centers, energy uh to ultimately power this intelligent
01:48:51
infrastructure that's running and scaling both chatbt and all their other core services.
01:48:57
>> One of uh the blockers in addition to the turbines has been electricians
01:49:02
>> and construction workers. >> Yes. >> My understanding is you're paying two to
01:49:06
three times what they were getting paid before the data center. Um, no comment on exactly what we're
01:49:13
paying the electricians, but they're very well compensated. >> Am I in the right zone that their
01:49:18
salaries in the industry have doubled or tripled? >> Uh, look, I think it's an incredibly
01:49:22
exciting career path for for for anybody uh looking to do work with their hands and and get well very
01:49:28
>> hundreds of thousands of dollars a year. >> Yes. Uh so, you know,
01:49:32
>> I mean, let's think about that for a second. No college degree. >> Yeah.
01:49:36
>> You just have to be an apprentice as an electrician and you can make hundreds of
01:49:39
thousands of dollars a year. And you need how many? Thousands? Hundreds? >> Correct. So, we uh
01:49:44
>> which one? Thousands or hundreds? >> Thousands. So, I I'll get into it in a
01:49:48
second. So, um I'll give you an example. So, in Abalene today, we have 8,000
01:49:52
people on site every day. They're working day and night to bring this facility online as fast as possible so
01:49:57
we can energize this intell. >> And that's 3 hours west of Dallas. >> Correct. So, it's in West Texas. Um you
01:50:04
know, Abalene is a town of 120,000 people. So, you know, when you're hiring 8,000 people to work in that town, you
01:50:10
can't source everybody locally. So, we've actually had to bring in a lot of
01:50:13
labor from all states. >> And housing, I would assume. >> Yeah, housing. You know, housing, you
01:50:18
know, the market's actually fairly efficient. There's a lot of people um
01:50:21
that won't be long-term permanent workers there um that are actually, you know, they bring mobile homes, you know,
01:50:26
they collect a stipend. Uh it's it's it's kind of a very, you know, uh
01:50:30
efficient process in that regard. Um but uh you know long-term we're going to
01:50:34
have about 2,000 uh permanent workers uh at the campus. So there's both you know
01:50:39
short-term job you know spike and boom in terms of demand for the construction and installation process but there's
01:50:45
also great long-term permanent jobs to operate the facility. You know we have a power plant there. There's a lot of
01:50:49
mechanics that are going to be operating this facility. Um but this is just one campus. Um we have another campus uh in
01:50:56
Armstrong County, Texas that you know has close to 3,000 people on site every day. We have another uh project in
01:51:01
outside Cheyenne, Wyoming that we've announced we're planning to build a 10
01:51:04
gigawatt campus. >> Why Wyoming? >> Um Wyoming is a state that you know is
01:51:09
very rich in natural resources and energy. Um and you know there's been really favorable uh you know u public
01:51:16
private partnerships in terms of making this project happen. Uh you know there's
01:51:20
a tremendous amount of uh gas there to sort of support uh what we're doing. And
01:51:25
uh one of the very cool things that we're focused on is actually trying to uh bend the arc of energy production
01:51:30
towards sustainable resources. So even with the gas uh Wyoming is a place where you actually have uh primacy on what's
01:51:37
called class 6 wells. They're they're postcombustion carbon capture and sequestration disposal wells where you
01:51:42
can actually take the carbon that that comes out of you know the the the combustion process of uh a natural gas
01:51:49
turbine and you can pump it underground and permanently sequester it. Ah, >> and there's actually a incentive there
01:51:54
called 45Q where you get paid by the government to do this and it doesn't quite cover the cost of doing it. But
01:52:00
for customers that care about sort of the impact and the sustainability of the campus and the
01:52:05
>> they're not putting the carbon into the atmosphere. >> Exactly.
01:52:08
>> Putting it underground, >> they can produce power from gas in a carbon-f free way, which is a really
01:52:12
exciting, you know, value proposition. We can >> How are batteries? I I think we saw Elon bought a and is
01:52:19
building um he's got his own lithium refinery and he's building obviously his
01:52:25
own batteries and uh they're one of the larger battery manufacturers. How do
01:52:29
batteries play into all this currently? >> Um there's a bunch of different ways
01:52:33
batteries play into it. I think uh you know you sort of need batteries in these low voltage UPS systems that sort of uh
01:52:41
you know uh help operate the electrical system of of the plants uh or >> to normalize and base load or
01:52:48
>> yes um actually one of the issues that we're seeing is you know when you think
01:52:52
about these large scale AI factories uh when you're deploying giant clusters of
01:52:58
GPUs uh you know the entire data center is acting as a single computer it's running one single workload. workload
01:53:04
that's training some breakthrough foundational model. Uh, and what that results in is actually massive load
01:53:10
fluctuations in the actual power draw because what they're doing is the chips
01:53:13
are basically running compute cycles and then publishing the data over the network to all the other, you know, GPUs
01:53:19
so they can sort of be in sync with one another. This causes this massive fluctuation and sort of overall power
01:53:24
draw. Well, utilities hate that. It's terrible for the turbines. So, you really need a way of actually
01:53:29
normalizing that power draw. Exactly. So, we've actually been able to solve that with a uh a 1h hour battery. Um
01:53:36
that's actually a medium voltage battery energy storage system. That's something
01:53:40
that we've deployed. Um you know, there's a lot of other use cases for batteries. I'll give you another
01:53:44
example. We're actually working with uh Elon's former co-founder uh and partner
01:53:49
at Tesla, JB Strobble. >> Oh, he's doing the recycling of them. >> Correct. So, he has a business called
01:53:53
Redwood Materials um that's uh focused on recycling of batteries. and he has
01:53:59
this massive supply of end of life EV batteries, batteries coming out of digital cameras, all these like, you
01:54:05
know, this this whole collection of of batteries that are sort of at the end of their life. And so, as a demonstration
01:54:10
to show people what we could do in terms of, you know, cost competition as well as, you know, deployment, uh, we
01:54:16
actually deployed a fully offgrid solar plus battery energy storage system that powers an AI data center 24 hours around
01:54:23
the clock with a power price that's lower than the power price in Northern Virginia. Um, and we're able to do that
01:54:29
because you're able you're basically taking these batteries that, you know,
01:54:34
uh, were were in an electric vehicle and maybe the range was 300 miles and now it's 250 mi.
01:54:40
>> Uh, so the, you know, the owner trades it in and it's like, okay, this car is
01:54:43
done, right? But there's still a lot of juice left in those batteries. There's a
01:54:46
lot of life in those batteries. So, we're able to really make use of them in
01:54:50
a second life uh, to power these AI data centers. you're under massive pressure
01:54:55
to deliver these data centers. Correct. >> Um yeah, yeah, you could say that. Yeah.
01:55:00
>> Compared to where you were like two or three years ago, maybe let's say three
01:55:04
or four years ago, you were knocking on doors saying, "Hey, do you need a data
01:55:07
center?" Now your door is being knocked down. >> Um I think there's just I think it just
01:55:12
really speaks to, you know, the demand for compute. I think people are constantly having this conversation of
01:55:17
like, are we in an AI bubble? uh you know I think there's just an incredible you know there there's no
01:55:22
nobody has enough compute none of the you know leading labs none of the leading application companies can get
01:55:28
their hands on enough compute and that's just driving an incredible amount of
01:55:31
urgency to deliver infrastructure >> both the chips and the data center >> so even this year going into 2026 you're
01:55:38
seeing the same amount of inbound hey we need more we need more we need more what
01:55:42
do you got or was last year like people put in their big orders for the next couple years
01:55:47
>> um no we're seeing seeing things accelerate. Um there there >> who are the new customers because
01:55:53
obviously Elon, Sam Alman, I'm sure AWS, I'm sure. Well, I think Google does
01:56:00
their own. Yeah. >> Um Google I think uh well I don't want to speak for directly.
01:56:08
>> This is allin. If you want to be on allin, you got to speak candid. Just
01:56:11
tell us what you heard at the cockail party. Google does does a mix of you know self-perform development as well as
01:56:17
uh sort of outsourcing. >> So they do do some outsourcing. Yeah. >> Correct. Um but you know I I think all
01:56:23
of the leading labs were seeing a tremendous amount of demand. Uh so you know anthropic open AAI you know Google
01:56:29
uh you know >> Elon builds his own Elon builds his own. Um >> what what what was your take when you
01:56:34
saw him build Colossus under that short time frame? Like your team must be like that's just not possible and then he did
01:56:40
it. >> Uh no I don't think we thought that at Well, I think I was like really, you
01:56:44
know, rooting for him. >> No, but did did he do my understanding is he did it in half the time anybody
01:56:50
else had ever done something like that. >> Um it it it I mean it depends on how you
01:56:55
sort of measure these things. I think Colossus was a that Colossus one was sort of this unique case where he had
01:57:00
this large scale industrial building. He had power to the building. Uh, and really what he was doing was what I
01:57:06
would call like the tenant fit out, which is basically the in the data hall buildout of the cooling distribution
01:57:11
units, the RPPs, the electrical systems, the hot aisle containment systems that really and then you sort of, you know,
01:57:17
roll racks of GPUs into these, right? >> Uh, so they were able to execute on that
01:57:20
incredibly fast and you know, >> yeah, Jensen said he'd never seen anything like it. He seemed to think it
01:57:25
was >> like a a unique thing that occurred in your industry. >> Yeah. Yeah, I mean Elon's the goat of,
01:57:32
you know, a modern industrialist. So, you know, >> so >> hat tip to, you know, him.
01:57:37
>> You as running not competitive to him, but building the same things. You you
01:57:42
have to look at that and study it a bit. How did he get it done so fast? What do
01:57:45
you think? How do you think he was able to do it so fast? Um I I think Elon does
01:57:49
an incredible job of you know breaking down uh you know a a large industrial process into um a lot of subprocesses
01:57:58
and understanding constraints and really taking a first principled approach of you know how do I build things as
01:58:03
quickly as possible? How do I parallelize things as quickly as possible? >> Got it.
01:58:06
>> Um and >> has that informed some of your thinking? Yeah. >> Oh absolutely. I mean you know he's been
01:58:10
an inspiration from you know building the Gigafactory to everything he's done
01:58:13
at you know uh SpaceX and uh Starbase. You know, it's all all incredibly inspiring and you know, we try to
01:58:20
channel that same sense of incredible urgency. Uh, you know, paralyzing a lot of the work. Uh, you know, we we we
01:58:26
self-perform a lot of, you know, procurement functions and engineering functions. Uh, and then, you know, work
01:58:32
with a, uh, a lot of, you know, very ambitious folks on the on the construction side. Uh, there's actually
01:58:38
a bunch of folks that worked on the Tesla Gigafactory, uh, in your new hometown in Austin. Yeah. um that are
01:58:44
working on uh our campus in in Abalene, Texas. So um there's a lot of uh overlap
01:58:49
in sort of methodologies. >> There's been a lot of talk of and I think Brad Gerson kind of started this
01:58:56
discussion on his BG2 podcast when he had Sam Alman on how does a company with 20 or at the time 12 billion now it's 20
01:59:03
billion run rate. How does OpenAI pay for a $500 billion buildout in your contract with them and your relationship
01:59:11
with them? I'm assuming this is being done in stages, not one giant hundred billion dollar contract, but stages.
01:59:18
Yeah. >> Yeah. So, I I think it's important to understand like, you know, in a lot of
01:59:22
ways, my role as CEO of Crusoe, um like half my time is really spent on like risk management, you know. Yes. Uh the
01:59:29
amount of capital going into this is is just enormous. And you know, all that capital is not going to come from like
01:59:34
dilutive equity capital that we're raising at the parent company. We have to raise project equity. We have to
01:59:38
raise a lot of debt. Um and what debt debt folks are focused on is how is this person going to pay me back? Um and so
01:59:46
it is very much something that's being evaluated in the capital markets. Um and
01:59:51
you know this has actually been a major role that we see these largecale bluechip investment grade businesses uh
01:59:58
play a major role in sort of catalyzing the capital formation you need to build these giant infrastructure projects. So
02:00:05
when you have a you know a company like Google or you know company like Microsoft or a company like sitting on a
02:00:09
hundred billion in cash and they throw 10 20 billion to the bottom line every quarter they could just fund it from
02:00:15
their existing businesses but Elon and Sam have new businesses or even anthropic they have to come up with that
02:00:21
money somewhere yeah >> correct so you know in our ca I'll give you an example in uh in Abalene Texas
02:00:26
because that's the most public one uh you know we have a long-term lease agreement with Oracle right so we have a
02:00:32
long-term you know 15-year offtake agreement with Oracle um and so they're committed to sort of paying us for for
02:00:39
that, you know, time frame. Uh, so that helped unlock a lot of the construction debt, uh, and the capital we needed to,
02:00:45
you know, build this project. Uh, so we worked with, uh, JP Morgan on on, uh, and number of other folks were in the
02:00:51
syndicate, Bank of America, Apollo, you know, uh, SNBC, you know, a bunch of different
02:00:56
>> and they must be very excited about this opportunity. >> Yeah, I think everybody's really, really
02:01:00
excited about, you know, the opportunity to, you know, build the infrastructure that's going to power the economy in the
02:01:05
future. And there's this is collateralized by a data center which has inherent value. If a customer of
02:01:13
yours was unable to meet their commitment based on what you've told me today and shared with the audience and I
02:01:19
appreciate your candidness. Um that is the currency of the all-in brand is candidness. Um there would be somebody
02:01:25
else to take that capacity. >> Yeah. I I think, you know, that's that's
02:01:29
the biggest argument I make when people ask about the AI bubble is like, well, you know, imagine a scenario where like
02:01:34
OpenAI went out of business, which I don't think is going to happen. >> There are people saying that that could
02:01:39
happen. >> Sure. Okay. >> I'm not saying that. You didn't say it.
02:01:42
>> Imagine imagine they did go out of business. The reason they'd go out of
02:01:45
business is because some other model company, whether it be, you know, Anthropic or Gemini or Grock, like
02:01:51
really blew them out of the water. >> Well, and they're kind of in fourth
02:01:54
place right now according to some of the benchmarks. >> Yeah. I mean, you know, put parking that
02:01:57
all aside, they have incredible adoption, incredible platform, but but if if that were to happen, the group
02:02:04
that massively surpassed them would have so much demand for that product, >> they would they would jump they'd be
02:02:09
jumping for joy to step into the seat to take over that compute capacity. So I think you know if you believe that AI is
02:02:16
going to be an important uh aspect of you know the operating system of the economy in the future um you know this
02:02:22
infrastructure is going to be very useful and valuable to whoever the winners are uh in that future state.
02:02:27
>> And people don't know this but you've also made a bet on startups. you've been
02:02:31
incredibly generous to give credits to startups and maybe you could talk a little bit about how you made that
02:02:38
decision to play the long game because I would think there's probably some people
02:02:42
on your board or in your own organization says hey listen there we got some big fish here we got whales
02:02:48
what are we doing with the minnows you're specifically targeting up and cominging startups to be their provider
02:02:54
>> yeah so you know I really think about cruso you know being a vertically
02:02:58
integrated business is like we offer three core four things, right? We can we can build the data centers and we can
02:03:03
rent those to to customers. We're really only focused on a small subset, maybe
02:03:06
five customers, these very big tech uh tech companies. Um, and that's really
02:03:10
their key bottleneck, right? That that's that's their key pain point. They're
02:03:14
not, you know, renting out capacity from clouds because, you know, Meta doesn't
02:03:18
know how to run a GPU cluster like they of course they know how to run, you know, big clusters of GPUs. They need
02:03:22
data centers, right? So we're trying to unblock that critical pain point for
02:03:25
them. Um on our uh AI cloud platform and our infrastructure as a service platform, we offer managed clusters of
02:03:32
high performance GPUs and we're a very large partner with NVIDIA and that's
02:03:36
really critical infrastructure for the startups that you're talking about. This
02:03:39
is the development of new AI native applications uh you know coding assistant tools uh you know managed
02:03:46
inference solutions video generation image generation uh you know all sorts of chat bots and uh you know AI
02:03:52
applications that are sort of uh proliferating in the world um you know we offer great uh sort of managed GPU
02:03:58
clusters there and then we also offer serverless uh AI services like our managed inference product where we're
02:04:04
charging people on a dollar per token basis so we can kind of charge on a dollar per kW rent on on the data
02:04:09
center, dollar per GPU hour on the on the GPU or dollar per token on on sort of the managed services.
02:04:14
>> Yeah. And that's thousands of customers, tens of thousands potentially, and
02:04:18
that's where you're going up against Azure, AWS, and Google Cloud. Yeah.
02:04:24
>> Uh correct. Yeah, >> those are some pretty significant competitors. How do you compete with
02:04:28
with those kind of folks? Um, you know, I I think I think when you look at those
02:04:33
uh really large hyperscalers, they're uh you know, they're they're incredible
02:04:36
platforms and they've been able to accomplish so much. Uh but they really are the outsourced IT solution that's
02:04:42
meant to be everything to everyone. Uh which means you know their lowest common denominator isn't AI, it's it's every
02:04:49
reason. >> Server, you need storage, it's everything. We are relentlessly focused
02:04:54
just on the AI use case and the AI application to deliver the most reliable, most high performance uh
02:05:00
computing infrastructure directly for the AI use case and application. That's
02:05:03
all we care about. Which means all of the optimizations we're making on the high performance networking system,
02:05:08
compute side as well as the storage and how people access their data um is, you know, entirely in service of uh AI use
02:05:16
cases. There's going to be some technological advancement in the coming years that really ramps up what we're
02:05:23
able to do in building large language models in doing inference. What do you think that will be? A lot of people have
02:05:30
talked about optics and just the the transfer transport layer. Some people talking about the raw horsepower, other
02:05:36
people talking about cooling. Where do you when you talk to some of the hardware providers? Where do you think
02:05:42
we'll see the next step function in the next, let's call that the three to five
02:05:46
year window and because you must be thinking about that skating to where the puck's going because you did that with
02:05:52
your current company, your current offering, I should say. >> Yeah. So, um, look, I I I think what's
02:05:58
so fascinating about this space and what gets me so excited is that it's actually
02:06:01
like the culmination of like the the the the the like so many different engineering disciplines. And it's like
02:06:09
the pinnacle of human achievement across so many different engineering disciplines from you know the cooling
02:06:14
systems and the chemical engineering and uh you know the electrical systems and you know the the physical electrical
02:06:20
engineering that needs to go into these chips to you know the silicon systems and the chips uh and the networking and
02:06:25
the and the software engineering. It's it's really a full stack solution that
02:06:29
ultimately produces intelligence. Now getting to specific challenges that we see uh and specific trends. We're seeing
02:06:36
uh everything go to higher density configurations. So more power in the rack. Um a traditional data center maybe
02:06:42
you know 5 years ago was like 15kw you know 20 years ago was probably like 4kw in a rack. Um you know the current
02:06:50
generation of blackwell chips uh is 130 kW in the rack. Uh the next generation Vera Rubin is going to be 250. Um and
02:06:58
then Ver Rubin Ultra is expected to be 600. We're ultimately going to get to
02:07:02
one megawatt racks. One megawatt to give a perspective is roughly the amount of power of a thousand homes.
02:07:08
>> Yeah. It's like a small town >> in a data center, right? >> Um
02:07:11
>> so a rack will be a town. >> Rack will be a town. Exactly. A couple
02:07:15
dozen of those will be a city. >> Yeah. It'll be a New York City in a in a
02:07:18
data center. Um, and you know, we, you know, Crusoe has, uh, over 45 gigawatts in our pipeline to, you know, and I know
02:07:26
you're from New York, that's about like, you know, 8 to 10 New York cities worth
02:07:30
of power, depending on how you, uh, measure it. Um, so, uh, you know, it's an it's it's an incredible amount of
02:07:36
energy infrastructure that's going to need to come online, uh, to help energize this this layer of compute. And
02:07:42
there's like I said there there's challenges in every you know domain from
02:07:45
from cooling to networking to you know >> yeah that density arrives this 10 to1
02:07:51
density you're talking about the heat also arrives yeah >> correct yeah yeah so uh a lot of
02:07:57
exciting stuff happening >> and what do you think uh of the small modular nuclear getting close to hydro
02:08:06
what what do you you know obviously gas is the layup n gas it's everywhere we're
02:08:11
leaders in that solar that feels like a layup and battery that combo to add, but
02:08:17
hydro I don't know if there's much left. >> We're actually doing a lot with hydro uh
02:08:23
you know in in the Nordics. Um so Norway in Icelands >> we have um in Iceland you know there's abundant
02:08:32
geothermal uh it's like this sort of geological phenomenon and there's ultra
02:08:36
lowc cost geothermal energy and also a lot of hydro there. Um, >> so that's a one-two.
02:08:41
>> You get the one-two punch there. >> Yeah. And I don't know if you guys
02:08:44
heard, but America just acquired Iceland. That was like the rim shot off of the uh Greenland. We
02:08:50
>> Yeah, >> that wasn't a mistake. >> We're taking both. I mean, or you're
02:08:54
giving us both. It's >> It's like Greenland. >> We don't ask from us. We don't ask for
02:08:58
much. Okay. It's a very simple request. We're taking a little Iceland and a
02:09:01
little >> We have data centers. You may have heard of big data. Big data centers in the few
02:09:08
words. Listen. Um but but to your comment on small modular nuclear reactors, we are very bullish on SMRs.
02:09:14
And >> have you signed a contract yet? Are you in negotiations? >> Four uh contracts that we've signed.
02:09:19
>> Wow. >> We're actually hoping to energize the first AI AI factory powered by an SMR in
02:09:24
2027. >> 2027. That's next year. I know. Um and and one of the ways we've been able to
02:09:30
do this is is it's actually going to be at the Idaho National Lab. um where you actually are you're you're
02:09:36
outside of the uh regulatory domain of of the NRC uh it's considered experimental technology. So
02:09:42
>> Oh yes. Who's the partner on that? >> I don't think we've made it public.
02:09:46
>> No, it's okay. They're going to make some news here. Journalists here. No, I
02:09:50
know because I I was told this exact same insight by the company that's doing
02:09:54
it, but I won't say the name of it. >> Yeah. >> Yes. >> I think Well, I think I think we can
02:09:58
announce it. >> Okay. >> Let's we should announce it. >> We should announce. Go. Uh the partner
02:10:01
is Alo Energy. So uh they're an incredible partner. >> Isn't it amazing that for solar it was
02:10:09
something we haven't been able to do since the 70s and now it's like yeah
02:10:14
we're going to do solar. It's absolutely necessary so we're going to do it.
02:10:17
>> Y >> it's what do you attribute that to? >> Um I you know I think there's this like
02:10:23
human ingenuity and sort of the passage of time and sort of the relentless pursuit of efficiencies. Like I I I just
02:10:29
think uh you know it's it's it's really incredible if you look at the cost curve
02:10:33
of solar just how much it's come down over the course of time. I think you're
02:10:36
going to see a similar thing play out in SMRs nextg uh geothermal like we're
02:10:40
really excited about like innovations like Fervos's made uh in terms of like
02:10:44
being able to produce uh geothermal at scale at a very competitive price point uh leveraging a lot of the technology
02:10:50
from fracking and oil and gas >> and we're not going to have this impact
02:10:54
consumer's electrical bills. Yeah, I think that's a that's that's such an
02:10:59
interesting story. Um, you know, when we look at this problem, we say, look, a lot of the, you know, power on the grid
02:11:08
is is very saturated. Um, a lot of the data center capacity is saturated. So, it just makes sense for the technology
02:11:13
industry that wants to bring online all of this new infrastructure to also bring
02:11:17
online the power to, you know, that goes with it. And you know the incredible opportunity from my perspective is that
02:11:22
when we bring on new power generation to support an AI data center we're sizing
02:11:27
it to the peak demand of the data center which mean you know and we're only using
02:11:31
peak demand we call it like 0.1% of the time. So you might have some excess.9% of the time we have excess power that
02:11:38
can be that can support the local community that can create an abundance of energy that drives down the overall
02:11:43
cost for rateayers in the local communities. People will have lower cost power. We're going to have advanced
02:11:48
intelligent infrastructure that's driving massive efficiency gains in the economy. It's going to be like a
02:11:53
incredible future we're building towards. >> And this is something that I think the
02:11:57
technology industry could be self-aware enough to understand if we're making
02:12:01
this incredible uh new business. It's a great way to share it with other Americans. Hey,
02:12:08
maybe your energy bill will get lower or eventually free. >> Absolutely. And and you're already
02:12:13
seeing this trend unfold. I mean, we've taken this energy first approach. You
02:12:17
saw Google uh recently make the acquisition of Intersect Power. Uh you know, Sheldon and his team there,
02:12:22
incredible group of of uh energy developers. Uh and they're doing that because they know they need to build the
02:12:28
energy infrastructure that's going to support their compute needs in the future.
02:12:31
>> Yeah. Well, really appreciate you taking the time, Chase, and continued success.
02:12:35
Uh and what an amazing story, man. You you really got there early, and one of two things can happen when you get there
02:12:43
early. you can just fail fabulously or you can just absolutely crush it and it's been the latter for you. You but
02:12:49
there might have been some moments where you stared at the ceiling at night as an
02:12:53
entrepreneur and said are we too early? >> Yeah, it's mostly been up up into the
02:12:57
right you know no real No, I'm just kidding. It Yeah, there's been uh you
02:13:00
know tons of complex problems and challenges and you know moments of doubt throughout the the company's lifetime
02:13:06
but um you know it I I wouldn't have want to do anything else with my life. nice to move from will the customers
02:13:13
arrive to >> okay uh we've got too many customers we really need to deliver.
02:13:19
>> Yeah. >> It's actually it's a it's a whole organizational mindset of like will the
02:13:24
customers ever show up and this like fear to oh my god I hope my customers are happy and delighted.
02:13:29
>> Totally. But scaling people scaling culture scaling technology it has its
02:13:34
own set of challenges and problems. >> The culture part is important. >> It's difficult. Yeah. Yeah. It's
02:13:39
difficult to go from a small startup of, you know, tens of people to, you know, more than a thousand people
02:13:44
>> and adding what are you adding thousand a year? >> Uh, we're going to add 2400 people this
02:13:50
year. >> Full-time employees and then tens of thousands of contractors. >> Yeah, I I've seen that movie before.
02:13:58
And no, I mean, I watched it with Uber and Robin Hood as they were adding, you know, one person a day, then it was five
02:14:03
new people, and then now you've just got training and recruitment and just trying
02:14:07
to keep that culture >> tight and make sure you hire the right people. Well, listen, uh, you have to
02:14:12
go, uh, and we're way over time. I appreciate you taking the time and being so,
02:14:16
>> man. I appreciate it. >> All right, give it up for Chase. >> Thanks, Jess.
02:14:36
I'm going all in.