00:46:41 · Molly O'Shea, Brian Armstrong
[00:46:41] S1: I mean, it is pretty interesting, like with all, with all the FinTech companies wanting to be the everything app or the super financial app, there's also the competing headlines of, like, Anthropic and OpenAI being the everything company. Like, they're gonna do everything. Where do you stand in that? Because some people are like, oh, I don't especially with some investors, like, the VC side, they're like, they're having an existential crisis because they don't know if they should be investing in more things or if Anthropic's just gonna build all the companies. Where do you stand in that? [00:47:18] S0: Well, I don't think OpenAI and Anthropic are gonna build all the companies. I think they're mostly focused on building foundational models, which are broadly applicable. But for instance, don't think anyone thinks they're gonna get into regulated financial services. It's a very complex and typical thing. Most tech companies don't want to have anything to do with that. And then I think there's actually gonna be specialized models. Like, actually, I think Coinbase has a real opportunity to go build a frontier model for investing, for instance, right, based on the datasets that we we have from our customers. So, yeah, I'm not worried about them eating lots of different companies. I think the best companies are just gonna get even more efficient, like Coinbase is doing. And if there's companies that fail to integrate AI, then they could be they could get left behind, but the best companies in every industry are just gonna be even more productive.
00:47:18 · Brian Armstrong, Molly O'Shea
[00:47:18] S0: Well, I don't think OpenAI and Anthropic are gonna build all the companies. I think they're mostly focused on building foundational models, which are broadly applicable. But for instance, don't think anyone thinks they're gonna get into regulated financial services. It's a very complex and typical thing. Most tech companies don't want to have anything to do with that. And then I think there's actually gonna be specialized models. Like, actually, I think Coinbase has a real opportunity to go build a frontier model for investing, for instance, right, based on the datasets that we we have from our customers. So, yeah, I'm not worried about them eating lots of different companies. I think the best companies are just gonna get even more efficient, like Coinbase is doing. And if there's companies that fail to integrate AI, then they could be they could get left behind, but the best companies in every industry are just gonna be even more productive. [00:48:12] S1: Who do you think your biggest competitor is?
00:48:15 · Brian Armstrong
[00:48:15] S0: It depends, in what category because Coinbase does a handful of things. Think, you know, if you look at, stablecoins, like, we've partnered with Circle and USDC, the biggest competitor to that would be Tether, right, which is offshore. I think, on the exchange like, on the crypto exchange side, our biggest competitor is probably Binance, right, which, again, is offshore. I think if you look at The US market where some of these, fintech apps are integrating more crypto, you know, and we offer stock trading now, so Robinhood would probably be for our retail apps specifically, like, Robinhood is probably the most, clear comp. And then, with Coinbase developer platform, which is what it's allowing all these businesses to integrate stablecoins, you know, Stripe is probably the best competitor we have there. So, yeah, we also run the largest institutional business in crypto. I actually don't think there's, like, a close competitor for that, at least not one that comes to mind. So, yeah, we have a number of different products and, competitors in each of those categories. Oh, by way, one other maybe interesting take on the AI, usage. You you know, you're asking about anthropic and all that. Yeah. So one interesting phenomenon, like a lot of companies, we were seeing our AI spend go up, like, exponentially. Mhmm. And I went with a team and I kind of looked at this and I said, the open source models are about three to to six months behind the frontier models. Right? But they're 99% cheaper for inference. And I was like, what percent of our prompts are we routing to open source models? Because if you're asking a really complicated question, you might wanna use the frontier model. But if you're just asking like, you know, who's Molly's manager, you know, or whatever, you're trying to look up something, why are you why are you using the the most expensive model? So we actually made some very simple changes, like some more intelligent routing of prompts to, depending on the complexity of the query to the right model. We started caching some requests, just some sensible defaults. When certain employees were about to cross their budget threshold, we would just say, are you aware this is about to happen? And you can keep going if you're doing something useful. We don't wanna slow you down, but just even making them aware of that.
00:50:30 · Brian Armstrong, Molly O'Shea
And what was really cool is we are now seeing our usage of AI tokens is still continuing to grow exponentially, but the cost curve has really started to flatten. [00:50:39] S1: Really? [00:50:40] S0: Yeah. I think that this is something that a lot of companies are gonna do next, and we're getting this intelligent middleware to know where to route the query to the right level of model. [00:50:51] S1: Did you, you built that internally? You're not using another company for [00:50:55] S0: There's an open source project that we based it on, and then we modified it. I think the open source project was called Light LM is one of the ones we use. There's some other in house stuff that we used as well. [00:51:06] S1: Oh, wow. [00:51:07] S0: Yeah. So I, my guess is that within twelve to eighteen months, 80% of our workloads will be going toward models that are 99, 99% cheaper, but 20% of it will still go to these frontier models where you need to be, you know, IQ maxing or whatever you want to call it. [00:51:22] S1: Yeah. IQ maxing. Okay. So we've had a really fun and eventful background to us with everyone getting ready for tomorrow. I do want to go back to a couple of the announcements that you have coming up. What is the one that you're most excited about?
00:51:40 · Brian Armstrong
[00:51:40] S0: In terms of, like, the amount of sometimes I can never tell which ones people are gonna get excited about because, like, there's some that I've spent years, like, trying to get over the line, and I'm like, yes. Finally, we did it. Like the tokenized stock thing and these approvals that we just got in The US to finally have global unified liquidity of our crypto trading and options. 80% of the market had moved offshore, 20% was in The US. We finally got the approvals to have the same products in The US that were offshore, so we can now have global unified liquidity, which has a cool network effect. But I think maybe the one I'm most excited about is just the financial infrastructure for AI. Like people are gonna use things like Coinbase Advisor right in their Coinbase account to just manage their financial life. It'll prompt you with things you didn't even think of that you could be doing better. It's gonna quickly start getting to a place where you can actually have agents just trading autonomously a certain portfolio where you put a certain amount of money. Like, tradingarena.xyz is a really cool app that people are using our API to go do this today. And then we're also gonna see AI agents have their own financial accounts, and we're powering that with the base, like, m MCP API so they can have their own self custodial wallet now and start to have a true agentic economy, paying for goods and services, hiring other agents into teams. That's, like, probably the coolest thing on the frontier that we're announcing today.
00:53:02 · Molly O'Shea, Brian Armstrong
[00:53:02] S1: With nearly 4,000,000,000,000 in new IPOs, how are you planning on getting all of those employees onto Coinbase and to be using these products? [00:53:14] S0: Yeah. I mean, there's a lot of wealth being created right now. You know? I mean yeah. I mean so, of course, we support stock trading if they have shares and they wanna move it over. Like, we have a a really great feature now where people can transfer stocks into Coinbase. It uses something underneath called ACATS, which is just the industry standard. You can basically move it over from any brokerage and have it in the Everything Exchange where you can do anything with it. And then we also launched a direct deposit feature too. So when you're at a company getting your paycheck, instead of depositing it into your checking account and earning zero, you might as well deposit it into Coinbase and earn 3.5% on cash. And then you can also, when it's direct deposited, choose to allocate it to different investment strategies if you wanna have a portion of your paycheck working for you. So, yeah, we're really it's not just about trading. Like, we're we're trying to be the primary financial account for someone's entire life.