00:04:38 · Jordi Hays
[00:04:38] S0: Just you. Just laughing at you. No. No. No. I was I was sort of smiling because it's like, you know, put putting putting carb and Satya in the same bucket. It's like, you know, they're very different personalities but ultimately have a very similar sort of, you know, sort of pitch, which is cool. Have a very good about merch timing, merch store. Wanted to jump in quickly because we do have a date. November 12, the TBPN merch store is gonna be going live. It will be released first into the YouTube chat and it will sit there. I'm I'm assuming we'll we'll we'll leave it there for like ten minutes so the chat can can feast and then we'll post it publicly over on x and everywhere else.
00:05:27 · John Coogan
[00:05:27] S1: Yeah. Lot of work a lot of work planned on that. Let's go over to Bucco Capital Bloke breaking down Reddit. It says Reddit call was absolutely fascinating. Everyone should listen to it as it's a bellwether for where the Internet is going. AI mode is increasingly the default Google experience. AI mode provides rich info and data in blind, less insensitive to leave search... Or less incentive to leave search. AI mode incentivizes dialogue. Google wants to keep wants to keep you engaged to serve more ads at each turn of the conversation. Google will milk that for as much revenue as they possibly can and transition from a search company to a cloud service and chip company. As traffic from humans becomes more scarce, this will put Google in an increasingly adversarial position to the rest of the Internet. That's interesting. There's a massive headwind to all media type companies who are not destinations. This is a massive headwind to all content driven go to market motions, especially in the SMB. You have seen companies like HubSpot and monday.com get crushed by this funnel collapse. We are entering the end game, a knife fight for the remaining and dwindling volume of human traffic on the internet. Interesting. They say people still want Reddit. This is from Steve Huffman, the CEO on the call. People still want Reddit. It's just Google is not sending them to Reddit the way they used to. What's interesting is, like, Google zero has been, you know, coined by Neil Patel at the Burge, like, years ago. I I don't know, five years ago, ten years ago, something. He... He's been talking about that for a long time. When Roger from Cardenas came on the show, he talked about how they had embraced it there, and that was sort of a a bombshell to hear, you know, someone in that position kind of admit it publicly that that's no longer a growth engine for them. It's it's it's interesting to hear that it's spreading through Reddit, but it's certainly it's certainly crazy times for Google because they they... The innovator's dilemma, they have to meet the customer where they want to be with the new product. But at the same time, a lot of people sort of hate AI mode or at least publicly hate on AI mode like the the long history of just Google stuffing more and more ads in the search results never really broke through.
00:07:39 · John Coogan, Jordi Hays
But now people are publicly saying, oh, I don't like the AI mode. I wanna go back to the the one that monetizes better, which is kind of funny dichotomy of... For the first time, just like just randomly, anecdotally, if you talk to people though, they'll be like, oh, I'm like frustrated. And it can be kind of an annoying funnel because you you wind up in AI mode and then you're like kinda trying to click somewhere and it can be sort of jarring. It it just requires like a new a new fluff to get into. I don't know. What what what what what's your overall thinking on Google these days, Jordi? [00:08:16] S0: Dylan Patel? Just think if if you think AI... I I think if you think AI is real and gonna be big, like, it's it's very very hard to make a super coherent bear case. Right? Even if search revenues even if search revenues decline, you know, every year and and we're sort of at peak search, they just have so many other assets and they can use that, you know, search cash flow to finance so much other infrastructure and and things like that. So
00:08:16 · Jordi Hays, John Coogan
[00:08:16] S0: Dylan Patel? Just think if if you think AI... I I think if you think AI is real and gonna be big, like, it's it's very very hard to make a super coherent bear case. Right? Even if search revenues even if search revenues decline, you know, every year and and we're sort of at peak search, they just have so many other assets and they can use that, you know, search cash flow to finance so much other infrastructure and and things like that. So [00:08:46] S1: I mean, people are nervous about it, but it's still $200,000,000,000. So it's effectively... I mean, that's revenue, but it's high margin revenue that they can deploy elsewhere. And, I mean, the take him, take is that in the race to win AI builders, Anthropic and OpenAI now account for 86% of enterprise LLM API spend, up from 67%. So the duopoly is consolidating around the frontier leaders, and Google's market share went down more than 50% in terms of... Not in terms of LLM usage for consumer, but but for builders and the enterprise. Yeah. And that's Yeah. But and that would be bad. [00:09:22] S0: Exactly. Revenue is flowing through GCP. It's it's it's paying for TPUs. Right? Yep. And so it's like Google's getting their Google's getting their cut. Right? [00:09:31] S1: A 100%. A [00:09:32] S0: 100%. And and yeah, it's like you just cannot... It's when you look at the sort of collective, you know, the collection of assets, the exposure to everything from, you know, SpaceX to to Anthropic to TBU business to the cloud business, it's like, you know, this is still one of the greatest businesses Yeah. In history.
00:09:32 · Jordi Hays, John Coogan
[00:09:32] S0: 100%. And and yeah, it's like you just cannot... It's when you look at the sort of collective, you know, the collection of assets, the exposure to everything from, you know, SpaceX to to Anthropic to TBU business to the cloud business, it's like, you know, this is still one of the greatest businesses Yeah. In history. [00:09:55] S1: Where do you sit on the question of, like, is Google in founder mode or not? Because, like, we always get these headlines of, like, oh, Larry and Sergei came back in. They're they're digging in. And then you'll see, like, they bought another state in Florida. And and it's, like, going back and forth. I'm like, who's actually... And I know they have the voting control, so they could at any point come in and be like, we're doing some huge m and a deal, or we're completely reorging this organization. We're gonna completely... We're gonna go Mark Zuckerberg mode and completely rework the organization. But at the same time, they have been out and had a real CEO in place unlike Meta. So they're kind of this hybrid. Like, they're not quite [00:10:35] S0: involved role. Like... It doesn't... It it certainly doesn't come across like the company is in founder mode in the way that you... In in the way that you feel it with, Meta. Right? [00:10:45] S1: Yeah.
00:10:45 · John Coogan, Jordi Hays
[00:10:45] S1: Yeah. [00:10:45] S0: And so... And I and I think that's what matters. Right? I think the big... Obviously, you know, the headwinds for Google is like losing, you know, people almost forget about the massive talent exodus from like, what, a few months ago. Right? Yeah. No. And... But but again, it's like as long as they can stay competitive around the cloud and and chip business, you know, there's a lot of upside. [00:11:11] S1: What is going on with this New York Times headline? Google will turn off search for schools that reject AI? Andrew Curran is sort of correcting the record here, but it it sounds really aggressive. It's like the carrot of the stick. Did you see this? [00:11:28] S0: Yeah. Yeah. Yeah. I mean, they're just saying... They're they're effectively saying, like, if you... We are... Every... All of our products are AI. So if you tell us not to use AI, then none of... You can't use any of our products. Right? But it sounds much more aggressive to be like, you can no longer Google search. But I think their point is that AI is everywhere across every product surface area. Yeah. And so it's unavoidable.