20VC: Cursor Acquired for $60BN by xAI | Anthropic Hits $1TRN in Secondary Markets | Did Anthropic Just Kill Figma, Adobe and Canva | Rippling Hits $1BN in ARR | Salesforce Goes Headless: Smart or Stupid | Cerebras IPO 2.0

I'm not sure they're buying them for $60,000,000,000 If your stock is valued at 100x revenues, you can buy things that are trading at 10x or 15x revenue all fucking day long. I think there'll be a $100,000,000,000 deal in the next twelve months. I I think this will stand as the high watermark of private m and a for a decade. This is 20 VC with me, Harry Stebbings. It's my favorite show of the week. Rory O'Driscoll and Jason Lampkin analyzing the biggest news in tech. Now this week on the agenda, my god. Breaking news. Cursor acquired by xAI or SpaceX, otherwise known, for $60,000,000,000 with a $10,000,000,000 break clause. Tim Cook announces he's stepping down from Apple after an epic run. Anthropic turns down $800,000,000,000 funding offers and crosses the trillion dollar mark on secondary markets. And then Anthropic launches Claude Design as if it wasn't eating everyone else's lunch. Now it's going after Figma, Adobe, Canva. This is an epic one. As always, we did not fall short of banging news to cover. But before we dive into the show today, let me tell you about Omni. It's an AI analytics platform, and it solves a problem every scaling company hits. Your team needs insights, not just data lookups, the stuff that really matters, and it's critical to get it right, like CAC payback periods and net dollar retention. For AI agents to act on your company data, they need your business context, your definitions, your logic, your permissions, and that's what Omni's governed context graph provides. Your data team defines it once, then anyone, your ops lead, your CFO, your PM, can ask a question in English and get an answer in seconds. Perplexity, Mercury, and DBT run on Omni, and 20 VC listeners get a free three week trial. Three week, very specific, not a month, but three weeks. Go to omni.co/20vc. That's omni.co/20vc. After omni helps you find the right customers, checkout helps you close them. Over the past fifteen years, Guillem Pozas has led checkout.com through what he calls the velocity a period of hyper growth with relentless product building. The lesson, high growth is a gift, but it demands ruthless focus. As his mother put it, play the game you're good at. For checkout.com, that game is digital payments, obsessing over data, chasing basis points, and compounding learnings over time. And that discipline is paying off. 2025, checkout.com processed over 300,000,000,000 in total volume, up 64% year over year, and returned to full year EBITDA profitability. They now support over a thousand enterprise merchants globally, including 63 that process more than 1,000,000,000 annually with brands like eBay, Vintage, Amex, ASOS, and TMoom. Guillaume's message, so it's pretty clear. They've earned the right to win anywhere. Now they're investing in innovation across marketplaces, issuing financial experiences and agentic commerce. If you want payments built for what's next, talk to the team at checkout.com. That's checkout.com. While checkout powers the moment money changes hands, invisible powers the people behind the work. Why don't we hear more real AI success stories from big companies? The models are insanely good, but implementation's the problem. It's really, really hard. There's data all over the place. There's legacy tech and manual workarounds. It's a Ferrari engine in a shopping cart. Meet Invisible. Invisible trains 80% of the top models and then adapts them to the messy reality of your business. Take the Charlotte Hornets NBA team. Invisible took years of game tape and analog scouting notes to go from uncertainty to a draft pick and summer league championship win in weeks, not seasons. Get the data in order first, and suddenly AI can do almost anything for you in the enterprise. If you want AI that hits the p and l, go to invisibletech.ai/20vc.

You have now arrived at your destination. Boys, we recorded yesterday, and last night, some very big news happened. I I messaged this morning saying, I I think we should actually do a little segment this morning and discuss this because it is so notable. And so last night, it was announced that Cursor was Rory, you're gonna correct me whatever I say. So I'm just gonna do it, and you can correct me. Cursor is being acquired by xAI, SpaceX in other words, for $60,000,000,000 with a break clause of $10,000,000,000 by the end of the year. Rory, please correct me on It's it's too running, Eric. We shouldn't overthink. I mean, basically, what it is is they have an option to acquire Cursor, and if they don't, they pay $10,000,000,000 for the work. It amounts to the same thing. Listen, it's very interesting because, first of all, this is an epic deal, right? If it happens, 60,000,000,000 in about three years from seed funding. I mean, thought Wiz was big, guys. Mean, when we started the show, we were talking about Windsurfer. That was 2,500,000,000. Now it's 60. I mean, are numbers that we have not seen in 3,000,000,000 from Founding. Now having said that, we haven't read whatever the deal is, right? I'm not sure they're buying them for 60,000,000,000. There's a lot of stuff going on between these companies. Senior engineers have already quit and gone to xAI. It appears that Cursor may be at least notionally the largest customer for Grok for coding. Their market share has fallen and they've already committed to using a lot of the million GPUs that SpaceX, whatever we're calling it, is in Colossus. So there's a lot of stuff going on here. And what this call in option is and how much it's tied to Cursor having enough of a state of the art model that they're worth buying because an ID isn't enough. There's a lot up in the air and it's probably why the deal is structured like this beyond the fact that SpaceX is going public. Agree. Which adds to the complexity. There are a lot of moving pieces here, so I wouldn't be surprised if it doesn't close because I think there are a big milestone that needs to be hit. The Cursor needs to make progress. And maybe I'm wrong. Wow. Such a lot to unpack. But I'm I want to actually cover all this, first of all, the first sentence is, this is the biggest private acquisition ever in Venture. It used to be Wizz at thirty two. Before that, it used to be WhatsApp at 16. I mean, individual private check before going public. Now it's a $60,000,000,000 outcome in three years. So start with it. If this deal closes in three months, this is the biggest ever privately held venture acquisition, period, full stop, end of story, an amazing result. So you're right, Jason. Before you get into the noise, that's the Venture takeaway.

Jesus. And I know. And wow. And we'll come back to who's been the same twenty years like most of our funds take. This was this will be three and a Big picture here, guys. It actually makes sense. I mean, I was actually thinking last night of doing a little cute tweet before I got your note, Harry. It's like, you you got these guys called Cursor walking down the street saying, Hey, good news. We got an exploding business, a couple of billion dollars in ARR, but bad news, we have shitty gross margins because we need our own model and we need compute. And Elon goes, hold that thought. This is a guy walking around with a whole bunch of compute, a reasonably good model, and literally no revenue. It's like a marriage made in heaven. You guys I mean, because look, let's get real here. It's one of those deals that makes sense for both sides, which is why I think it'll close, which is different than saying it makes full financial sense. I'll come back to that. But if you think about it, from SpaceX's perspective, all the narrative has been SpaceX is amazing, Starlink is amazing, WTF with this x dot ai, why did they stick in Twitter? And x dot ai, I know Elon loves AI, but it makes my head hurt. Because the truth is they'd spent $20,000,000,000 plus or minus on the most amazing data center, the Colossus Data Center, with literally hundreds of thousands of GPUs, but they're not doing a very good job of selling them, so they have relatively little business, which all other things are the bad place to be. Now, capacity is scarce, so I'm sure they could have found white label work selling to one of the hyperscalers. But instead, they found this company that's in the mother lode, the mother of all AI markets, which is coding, that has customers, has revenue, but has shitty gross margins because it doesn't have yet a full standalone model and massively needs compute. So they put this on top of their thing, and the vertically integrated thing just looks a lot more attractive. You literally have a company that's making $3,000,000,000 in revenue and spending $3,000,000,000 on gross margin, and you have another company that's burning $18,000,000,000 You put them together and the $3,000,000,000 gets canceled, and at least they have some revenue. It's still not enough to cover the x dot ai nut unless they can grow this thing, but at least looks like a business now. And I think what's really clever from SpaceX's perspective is they couldn't do it before the IPO because you can't close that deal. It delays everything. It's actually a very clever structure. So they're basically going to be able to say to the public, You know you love Starlink and you love our space business, and you didn't like this other thing, but we've got a plan to fix it. Once we close for $2,000,000,000,000 we'll exercise our option, we'll buy this thing, and suddenly we'll be a 4,000,000,000 or $5,000,000,000 revenue AI frontier lab, which my Claude Code equivalent is called Cursor, and I actually have the rest of the stack. And there, I told you I'd make a good business out of this. Which is an important note just for people to understand that this is not a transaction in closing today. This is in six months post going public, and it's a very strategic way for them to do it because they can't do it now just before going public. And that's why it's called that's why think of it as an option. You and you're right, Jason. There's been some commentary that said, maybe this option is in part, Elon, doing a try before you buy. Let's see if the model works on our stuff and vice versa. And if it doesn't, we'll just pay you 10 and walk away. I don't know. I'm not going to guess. And there's probably some of that. But fundamentally, it's costing you nothing today because you're not writing the check today. And what Elon's basically saying is, If my IPO happens, and it probably should, and I want to buy this thing, I will because I can. And if it doesn't, I'm promising $10,000,000 that I don't plan to have to give unless, God forbid, the IPO doesn't happen. So kind of mentally says, I haven't fixed this story today, but I have a plan to fix it. You can see the plan to fix it. So stop bugging me in the roadshow about x.ai.

Let's talk about rockets in space. I think listen, Elon walked away from the Twitter acquisition, so he'll walk away from a bad deal. Don't get me wrong if things change. But you don't you don't promote it the way SpaceX did all over X. If you're not basically saying this deal is going to close, right? This isn't a change. Otherwise, if it's just vendor financing with an option to buy, you bury it. You bury it because it's round trip revenue. Someone use our Colossus for model training. You'd hide it if it was just a vendor deal. I'm going to say something weird. Even though I don't think the whole business effort here makes sense, trying to enter this market, trying to be the third or fourth foundation model player as xAI SpaceX, I don't think it will make any sense. But once you've decided to do that, this deal makes sense at the margin because you've incurred all the negative parts of being a subscale hyperscaler with $20,000,000,000 in burn, and now at least you have a business. So I'm with you, Jason. I think they're pushing this because they're like, Oh, this makes sense and actually solves the problem for us. And obviously, solves a problem for Cursor, you know, makes the P and L of their business look very different, and therefore, it's a win both sides and it closes. If I push you, who is getting a better deal? They're expected to finish the year at 6,000,000,000. So this this is only 10x end of year revenue. Seriously?

We just talked on this pod before about Figma 20,000,000,000 and about Grok to you just said Grok to to to Nvidia for $20,000,000,000 and getting to be not enough to be a public company CEO was the second best gift to sales ops selling for $2,000,000,000 This is a gift. They don't have to do the hard work. They've only been doing this for three years. Got it. They've only been doing this for three years. Was watching some images of like, what's Michael's last name, the CEO? True. Okay. I was watching something on Twitter with him and Gary Tan a year ago. Okay? Gary Tan's got a big job. Right? Gary Tan looks like he's aged eight years since the video. Michael looks the same. This is the time to sell because you don't Listen, maybe this is little meta, but what I've learned as a founder is you don't get It doesn't hit you until around year four to five. This is just the way humans are, okay? And he's young, but look at founders you've invested or met with. Around year four to five, the weight's there. Okay? You can see it in the bags under their eyes, whether they're 21 or 61. And you gotta double down. At four to five years old, you gotta sit around and say, do I wanna sign up for another tour of duty? These guys don't even have to do a second This tour of pretty good deal, Harry. If you're ten or fifteen years in, you know what to do. Three years in, you've got to go home. You've got to go home after three years for $60,000,000,000 Three years. Three years after $60,000,000,000 Can I help you on this? You asked which of the two is getting a great deal, and the answer is the both getting a great deal. You've got to give one name. No, I'll tell you who's losing. There's two reasons they're getting a great deal. Everyone's getting a great deal. The first is it actually industrially makes sense. The two things go together well, right? So there's some business logic. Whether or not the SpaceX Elon team can manage these kind of researchers over time, it's TBD given how the X stuff has unfolded so far, but it makes industrial sense for these two companies to come together. Why are they both getting a great deal? Answer, you're missing the point because there's a third player in the game here that you're not mentioning. The future SpaceX public shareholders are valuing a $20,000,000 revenue company at $2,000,000,000,000, which is a 100 times revenues. If your stock is valued at a 100 times revenues, you can buy things that are trading at 10 or 15 times revenue all fucking day long.

As long as SpaceX is worth 2,000,000,000,000, then if Elon wants to scratch an itch to clean up a subsidiary of SpaceX that isn't quite working out and he can chuck 6,000,000,000 on the table, for context here, it's 3% of SpaceX's alleged market cap in return for 15% to maybe 20% of their total revenues. It's not even material. Yeah. When you have a high priced stock, you can buy any pretty things that you want. And what happened You here is should. And you should. Absolutely. Because it may not last, right? Yeah. Exactly. This is the opposite. When we did the other versions of the pod, we were talking about how so many public software companies, if you're now trading at 10,000,000,000, you can't even spend a billion to buy a couple of kids, right? For Elon, this is immaterial to SpaceX's market cap, to Rory's point. And at margin, it helps that he doesn't care if he makes them billionaires. It's a microlearning, but there are issues in making targets billionaires. It is an issue. As long as SpaceX is worth that kind of multiple, it's revenue accretive, story accretive. And another reason it makes sense to Cursor is the number of people who can write a $60,000,000,000 check for a roughly breakeven gross margin business can be counted on the fingers of one hand removing at least one or two of them, Of said fingers, right? Of those acquirers, most of them in most situations would be unable to do so for the DOJ. This is the only game in town. It helps to be founder led too to write a check like this.

Totally. Yes. This is a If you go into Google again, you're like, I know we did Wizz at $32,000,000,000 and it's crushing it, but we wanna buy Cursor for for for twice that? I mean, it's a tense board discussion. Right? If I'm an investor in the business, what does it mean for me? When do I get my cash? What are my LPs getting back? You're getting a lot of money. I mean, look, you're getting your cash if this deal closes, I think, in six months, which is back end of this year, assuming the IPO happens in June. You're ecstatic, it means. And I'm getting cash or I'm getting spacex? No, you're almost certainly getting stock. The IPO is $75 bill. So then the second order questions are, is it registered? If you're getting that stock in the restricted period, is that going to be restricted too? Because the dynamics of the SpaceX lockup, given the size of the round, are going be one of the most interesting parts of the whole transaction. There's talk about, as you say, employees getting out early. There's also, to be fair, talk about some shareholders being held in for much longer because the combination of a 2,000,000,000,000 I mean, it's going to make a difficult problem around float management slightly more complex because a $75,000,000,000 raise on a 2,000,000,000,000 valuation is a teeny tiny float. And going from there to the other 97% of the company being freely tradable in six months just doesn't work. So I'm sure there's going to be a convoluted float management thing, and then this stock will probably go into that. So I wouldn't be surprised to discover that as investors in Cursor, congratulations, you are now investors in SpaceX. You've got that fluctuation risk for six months plus or minus, but on the other hand, you are getting $60,000,000,000 shut up. And do we know if the 2,000,000,050 billion happened, that round happened last We don't. I don't know. And then do we think Well, they're tied together. That's what I'll I don't know all the machinations, but I guarantee they're tied in I some saw one that said, can I stop I you think I saw one that said it's not happening because this obviates the need for it? Because if you think about it, they probably had reasonable I'm just winging it here, but they probably had pretty good cash on the balance sheet, but they knew they had to spend a lot in compute. And now one of two things is going to happen in September, October, six months. A, you're going get $60,000,000,000 and you have all the compute you'll ever need from Elon. And B, you're going get $10,000,000,000 in cash, in which case you can buy some compute then so they can probably do some forward contracts. So if the round hasn't closed, it probably won't close now because there's no point to it and no one would want that stock because that's what's basically like buying SpaceX and prefer to just wait for the IPO. If we get a stock back and was locked up for twelve to eighteen months or whatever that is, how am I feeling as an investor? Am I still ecstatic?

Again, if you're in the Figma IPO and you're locked up for twelve to eighteen months, that's been brutal. Andreessen's all in on the on Elon anyway. Yeah. Right? If you wanted that action, you got more of it. And if you don't want that action, you're going to bite your nails. I brought a blank check to Elon for the take private of Twitter. Of course, you're going to go long on Elon now, You're doubling down on the same founder. It's not even I don't know the cap tables, but for Andreessen, it's almost like merging two portfolio companies at a meta level. Maybe not that's not accurate, but intellectually it's like But that, as yet, Harry, you are right. Look, this is where the beauty of being in early at a low basis. If you're I I looked at it. If you're in at the B, which is where the A was Andreessen and Thrive, the B, Thrive led. Basically, the C is roughly a 5x, the B is a 20x. I can't even calculate the A, but it's huge. And then the most recent one is a 2x. If you're into SpaceX at $2,000,000,000,000 and that's only a 2x, you're scared because there's a lot of volatility in that stock. So that's the thing. You could end up I mean, I'm going to say something heresy. You could end up breaking even. IPOs do go down apparently at times. Facebook went down plus or minus, I think, 40% from the IPO price in the first six months before 10x ing subsequently, just as a reminder. So you've got risk in that deal. On the other hand, if you're sitting there at 20 times in the case of the B or fifty, sixty times in the case of the A. You're like, Oh, well, so if my 80X becomes a 40X, it's still a 40X. I'm fine. So you can roll that dice. You know, it's almost a defensive move if you're like Andreessen. You've added value to your net asset by combining these on paper, right? You're shareholders in both. You have an IPO. It has risk. You threw this crazy asset in there that's very immature, where where the debt is exploding. Right? Your balance sheet has been blown up. How can I derisk my IPO for a couple percent dilution? Done. I think you're correct in your analysis, though. My comment is the entire sentence implies that Elon consulted with anyone. My sense is Elon solved Elon's problem and everyone else is along for the ride, so they'll get the shareholder consent and the DocuSign, and they'll say, Thank you very much, so unsigned. But you're right.

If I owned a lot of SpaceX, oddly enough, to say it succinctly, I'd have been pissed at the xAI merger because I didn't need that dilution. But having done the xAI merger, I'd be like, Clever deal with Cursor, dude. You had this negative thing. Now at least you've got a full on, full stack story. Is it the best story ever? No. Would I prefer on a standalone foundation model lab bet would you prefer to own Anthropic than x dot ai plus Cursor plus the Frankenstein of Twitter? Yeah, you would. But at least it's a full stack story now. This is a clever deal, again, enabled by the 100x valuation you have, or at least allegedly have, but at least 50x. I mean, at the low end, I mean, you play it out here, even if SpaceX trades shock horror at a trillion, which is a 50x revenue multiple, and even if Cursor gets to $6,000,000,000 by the year end, so it's a 10x revenue multiple, SpaceX is still buying stuff at 10x with stock that's trading at 50x. It's a great country. Those arbitragers are real. You really should do a deal or two in those moments in time because one way or the other, they don't last, At the risk of stating the obvious, there is a lot more fucking differentiation in putting rockets in the sky than there is forking an open source IDE and running it on top of Claude Code. So, think the boys and the folks at SpaceX have done a much harder task, so they deserve a higher revenue multiple. But nonetheless, it's why you can write the check with such gay abandon. And look, if the next deal is at $120,000,000,000 all is good. I think we need to next change exit to be at $1.01 20,000,000,000. Right? Going to your point earlier there, Rory, comparing it to like Wiz, the other thing that's just amazing is, like, the scale. It's not like a little bit more. It's double Wiz, give or take. I mean, literally 32 versus 60. 60BN: I was thinking about this this morning, for arguably a much less defensible business. And I think the truth is this, it's why venture capital is amazing. It's the don't play small ball. If you play in the big markets, if you lean into the risk, in the part of the cycle where the big guys want to win and want to catch up and want to be relevant in the space, then this kind of exit can happen even if the fundamentals aren't great. A gross margin Sequoia, who I think are the Diane of the whole industry, always say, We hate negative gross margin businesses.

This is a breakeven gross margin business, but it worked because the overarching comment is AI is the biggest story of the last five years and big tech wants to be a player and Cursor is a player in the biggest markets. Don't overthink it. It's like the SAS motto, Who dares wins? Those guys dared and they won. Now, the minute the tide goes out We saw this in 'ninety nine too. Once the tide goes out and people are scared of .com or scared of .ai, all these high burn, high growth companies can get a real hit. But what you're selling now, what they were selling, is a ticket to matter, and xAI won the ticket. So to your comment on all the other guys, the factories of this world, there are ten, twenty this is what Jason's point is right, there's 10 or 20 other companies that are staring at irrelevance over the next three to five years because they're all part of the old software development lifecycle. Maybe they can't pay $60,000,000,000 but they're going to all have to buy themselves or build themselves into relevance. So I think a lot of these can still have decent exits. The lad's right, you should be thinking about this, but I'd prefer to be in something like factory leaning in than in some old school code development tool that doesn't matter anymore. Another way to flip it around, on the one hand, sure, you should sell. On the other hand, there's six leaders with market caps above 2,000,000,000,000, right? And we're adding SpaceX, so there'll be seven maybe above 2,000,000,000,000. They can all afford to pay 100,000,000,000 5% of their market cap plus or split it with some cash to not fall behind. But Jensen stressed about Tanium. He can spend 100,000,000,000, right? He already did a small deal, a $20,000,000,000 tuck in. NVIDIA, Apple, Meta, Amazon, Alphabet, Microsoft, can buy a startup for a 100,000,000,000. And I remember back in the day at SASTRN annual, Ryan Smith came and Qualtrics had just been acquired for 7,000,000,000 and our jaws dropped back then. That was a lot for a software company. And I asked Ryan, will this ever happen again? He's like, I don't see why there won't be one for 14,000,000,000 next month. He's like, it's just getting good. And he was right. Kept the party kept going to always point until it ended. I think there'll be a $100,000,000,000 deal in the next twelve months. Which one it is? I don't know. But you have to. You have to do there'll be a $100,000,000,000 deal. This is going to be one of three. That's my prediction. And I may be wrong. And I may be wrong, but there's seven folks that can do it, do $100,000,000,000 I think this will stand as the high watermark of private M and A for a decade. I'll take the other This side clip of is going to embarrass you, Rory. Because I just think it's anomalous in the sense of it's a combination of the absolute amount and the revenue multiple. The number of people who can write a check for less than 10% of their market cap that's greater than $60,000,000,000 is by definition people above $600,000,000,000 There's only eight or 10 companies above a trillion. So it's a very finite group of people who can do those kinds of deals.

Everyone but Elon trades at under 10x revenues, plus or minus. Yeah, I should put it in mind. So they're not going to do a 60 times. So if you're going to be worked I might actually contradict myself in a second. Watch this. If you're going to with the exception of Elon because he can overpay because he's trading at 100 times, at least plans to be trading at 100 times. I wanted to spend a little time on that in a second. Everyone else trades sub-ten. So you're not going to buy anything greater than 10x, which means to pay 100,000,000,000 you have to buy something worth $10,000,000,000 As I did that, I realized, And at that point, a privately held company has to be doing let's round down again, dollars 5 to 10,000,000,000 a year to be worth 50 to 100,000,000,000 a year to meet the Jason criteria of bigger than this. If JPMorgan wanted to buy Stripe, you actually would be right. So I can imagine a few circuits And that I then you also have the DOJ stuff, which is obviously suspended for a while, but there you go. So you're not impossibly wrong, Jason, but I think this is such a special circumstance. It's a combination of a couple of things. One is it's a company trading at an amazing price, feeling the imperative to execute a transaction in an amazing space where there's a company willing to transact like that. The other thing I was thinking about is one of the bigger 's on this is Elon is so risk on. I would use the expression in poker when you're on tilt, when you're just maybe it's not going well and your response is to double down and double down. If you look at the whole Twitter X transaction, unlike SpaceX, which has been a work of genius from day It's been, I bought Twitter, I didn't want to do it shit, now I have to do it, that's $44,000,000,000 Well, if I'm going to do that, then I'm going to want to do the AI thing, and I'm to spend $20,000,000,000 on CapEx there, got no revenue, let's put them together, oh, that's not working, let's flip them into SpaceX for $250,000,000,000 It feels notional, but whatever. That's not great, so let's buy Cursor for another $60,000,000,000 He's basically going to keep doubling down until he wins in AI. Astonishing. It's terrifying if you're a shareholder, but that's the game he's playing and it's his company. Let me just tell you why wrong about the $100,000,000,000 deal, Rory. Just process wise, And I think your math suggests I might be Like, I hadn't even thought about JPMorgan Stripe. That literally could happen tomorrow. Like, we could open up our x accounts. It would make some sense, right? Wouldn't be crazy. Here's happens when times are good but of stress, which is what's happening with all the leaders. Okay. Microsoft, Google. The one thing I have been that I don't think you guys have been, I know Harry have been, I've been a senior VP on the other side at a big tech company during moments of change. And what we talked about all the time is who the hell can we buy to get ahead? And so I will tell you in all of these boardrooms, especially Zuck, you could already imagine in your head. They are saying, I wanna buy something that is gonna actually effing move the needle for us. I I we'll do some tuck ins. You guys can all have a chip. You can go buy a little thing for 50,000,000, 500,000,000, maybe even a billion. But I want something that will move the needle in AI now. Bring me your candidates, and they will be debated.

But if it is above the line, those deals will get done for 5% or less of your market cap. Guarantee you the discussion is happening because I was there. It happens every Even though I disagree on the number, I 100% agree with you on the description. That is exactly what happens. You wake up as the leader of this big company. You've got your $2,000,000,000,000 market cap to defend. There's a technical thing that could make you obsolete. If you can spend 5% and derisk that, you do it. So I totally agree. And a large part of why Venture makes money is every once in a while, you find yourself with companies that are kind of in the to do list for corporate America, and they just write huge checks. So I do agree with you. I was pushing back on the 100, but do I think it's kind of like the Overton window? A 10,000,000,000 or $20,000,000,000 acquisition from Zuck tomorrow morning, wouldn't even blink. They'd be like, yeah, of course, he's going to do that. So I do agree. I was just being, as you know me, annoyingly precise about $100,000,000,000 But I agree with you. Every other CEO is looking at going, what do we do now in coding? Other crazy thing that happens, I know it sounds crazy, but it is true. On the other side, on the acquirer side, big company, right? Once certain numbers are breached, it doesn't mean you also get 60,000,000,000. It does not Like, you can't walk into the meeting and say, I'm better than Cursor. It does psychologically change the breakpoint for what it because when people go into deal mode in big companies, as long as they can afford it, if they identify the perfect target like remember, it's minor, but remember when when Benioff was willing to give his next first born to buy LinkedIn, he tried everything he could, every share, every piece of debt. He couldn't get 30,000,000,000 to buy LinkedIn. That's a $100,000,000,000 deal today. You're exactly right. Benioff would if Benioff could get a 100,000,000,000 to buy something to change the face of Salesforce, the LinkedIn of AI, he would do it tonight. I guarantee you, because he already tried to do it with LinkedIn. He will do a 100,000,000,000 if he had it. All these guys have a 100,000,000,000. So you go in a meeting and I saw it at Adobe as cloud took off. Like people's views of price changed in my tenure as a VP. As soon as you see a Cursor deal, we don't give a shit. We're not the founders. It's not our money. It's not even our dilution. We don't care what does it take to buy the next Cursor. 68,000,000? Done. Boys on the corp dev team, Stepings and Lemkin on the corp dev team, close the damn deal. When you're fighting for relevance and defending an existing business, as you say, and even if I don't think they get to 100, the fact that someone's done something at sixty means something at ten or fifteen will seem like, Yeah, that seems like a good idea. Let's get it done. It's expanded the Overton window of doable in M and A. Last thing to say is this: great outcome for the VCs. Great outcome for I mean, OpenAI, just as a reminder to everyone, Sam Bankman Fried did the seed, poor Sam, and LiquidAir did his job and sold it for a 1x that it could have been a couple of 100 x. OpenAI did the A, I think. Actually, OpenAI did another seed. Andreessen and Thrive did the A, then Thrive led the B and doubled down the whole way through. I don't know what the returns are on the A, but on the rest of it, I think they put in $1,000,000,000 and got $800,000,000 and got roughly a 4x.

Great outcome of everyone. It's a great venture story. All credit to the founders. This is a pretty good three year run. The two best deals that drive that are amazing are this one and OpenAI. And the aggregate return on OpenAI, I think they're at a 4x, maybe 5.2x, I can't remember which. And on this, excluding the A, I saw the announcement, but it excludes the A, which is bullshit, because the A is going be a 58. On the rest of the money, it's a Forex. What it says is there are small numbers of growth funds that can deploy masses of capital, hundreds of millions of dollars, and get a high end kind of venture return of a Forex, which is a good return, which is a If you're doing an A or a B, that would be a Yeah, that's a high end of good outcome, not yet great. You want a 10X plus on your best stuff, but the fact that you can do it on a billion dollars is what makes this special. It's not that you're going to outperform some little seed like NEO. If you only again, it's the classic thing, Harry. It's actually why even though you think it's simple to one dimensionally measure venture return, it's actually not. Because if you have only $1 to invest and you can give it to Neo and get a 16X or you can give it to Thrive Growth and get a 5X, you give it to Neo. From that perspective, you just rank on pure return. But if you're sitting there with $2,000,000,000 to invest, it doesn't matter what you do with Neo and Thrive have proven they can take $2,000,000,000 and turn it into $6,000,000,000 and you're like, Give me that net to the limit, and give me that product all day every day. From a personal network perspective, if you run the math as being the lead GP on Thrive, it turns out to be remarkably good business. We'll probably find that these products aren't even the same products even more. No, absolutely. Because they were never the same product. But if I can put $500,000,810,000,000 into an emerging GP, okay, and they don't expand into a multibillion dollar fund, It is irrelevant to a large endowment unless you've got a little chunk of guys that are just doing emerging managers and they'll put in the work or they'll put in the time or you're a smaller LP. And as the numbers get bigger, it will just it just doesn't matter making 10x on your Neo if it's irrelevant to your portfolio, right? Irrelevant. Yes, you have different products for different folks. But I just got to call it to the last comment on Making Thrive is if, quote, all they'd done was the late stage stuff and gotten that 4x or 5x blended, that would be wildly impressive. But the fact that on top of that, they were in the A alongside Andreessen is almost proof. The typical rap on only doing late is you're only doing late, you can't get the early round. It's very impressive to have shown up for the A and doing, then stuffing the money in like a foie gras from the B and beyond. I mean, that's the best way to play that growth stage. If you have enough ground game to get in even under the tent for the A, and then you can stuff a billion dollars in from there on in, the way you get the best of both worlds. You got some action on the table with a 40x or 50x is my guess on 10,000,000, yay you, maybe 20,000,000, yay you. And then you got all the action in the world on the table of 800,000,000 at an aggregate of a 4x or 5x, and that feels great. Don't mind you. You will be sweating that SpaceX lockup. You will know the day and the hour when it expires. Alright, boys. Onto the next bit of news. Tim Cook announces he's stepping down from Apple after one of the greatest runs, $350,000,000,000 to 4,000,000,000,000.

John Terminus will take over as new CEO. Twenty four years in Apple for him. He's been in Harbaugh before. How do we read this news, boys? Is this what we expected in terms of replacement? How do we feel? On the one hand, he's 65. Right? It obviously the board has been talking about this for years, right? They found their successor inside. They didn't go through the chaos of ChatGnu resigning from Adobe when they still don't have a CEO, right? They did it all the right way. They did it at the perfect age optically. But the big question, along with Reed Hastings and ChatGnu and others, is that folks turn over every year, and I'm sure Rory's going to say that. But are they all leaving because they don't have an AI strategy? I don't think Netflix has one. I don't think Apple has one. I don't think Adobe has a great one, even though they have AI. Like actually I learned this week AI and illustrators great. Like AI and Adobe Illustrator is a 10, but it hasn't changed the trajectory of the company. Right? So what would you do if you'd taken Apple from whatever, you know, 12x its market cap, successfully chaperoned the jobs agenda to epic heights, and AI is changing the I mean, this show gets stale like in less than a week. We got to do like four of these a week. Like, I just don't know if this is normal retirement or deep down folks are like, Jesus, I'm not up for this. Because I think most CEOs I work with are not up for it is the truth. Most pre AI CEOs are not they're not up. You guys know this too from your portfolio. Not all, but most are not actually up for the massive amount of What's more than $9.96, $12.12.8? I don't know what it is, but most humans aren't up for it. I think as a general comment on AI terror, for lack of a better word, and the feeling that you need to be on top of it as I get out, I think you're right. I think on the specifics of Cook, I think that he's been operationally excellent the whole way through.

He was operationally excellent, taking over the job. He's won it excellently for fifteen years, and I think he's operationally excellent on exit. And the proof of that is the stock barely budged. The stock is not always right. There are some fun examples of people thinking positive things in the short term and then totally wrong. But the fact is that resigns, not unexpectedly in the aggregate given he's 65%, but unexpectedly in terms of immediate timing, the stock moves less than 0.5%. Basically, that says organized, well managed transition. And I think was he smart. I think you get out on a high. Recent quarter's great. As you say, 304x the revenue, 304x in fifteen years, 304x the operating income. It's 12x the market cap. And just as a reminder, because they buy back shares, it's 20x the stock price as a holder of the stock throughout that entire period. God bless you. Just a great run. And handing over internal successor, which, as you say, is proof that you had your shit together and you had a couple of options, and they went with this option one of the other guys had pulled back recently. I think getting out in a high is not to be underestimated at 65. I think it's a home run the whole way through. Just give credit where credit goes. It's one of the great ones. Second comment, there is still some pending, Do you have an AI strategy? But honestly, Jason, I'm going to commit heresy now. If you look at the three companies you named, Netflix, Apple, Adobe, I would argue that Adobe has to have an AI strategy. It's existential. Apple is somewhere in the middle. Yes, it's pathetic that Siri is not good, but you can continue to build the hardware platform that everyone gets AI on, I think, for a long time to come. I don't think they're going to be replaced by the OpenAI mobile phone anytime soon. And Netflix, I think it's the least AI centric problem out there. I mean, they have interesting challenges, didn't get that big acquisition done. They're a media company, they have media challenges, as Benedict Evans says so well. So it's in the middle in terms of AI terror. Well, look, for what it's worth, on Netflix, Blockbuster.

Blockbuster peaked in 2004 with nine ninety four stores. Six years later, was bankrupt. I think what's happening when it happened with Netflix and I'll tie this together to a macro theme that Harry brought up on Twitter and others. I think all that has to happen is for these leaders to be maimed or for there to be stealth churned. I'll give you an example. I I paid for Netflix. I'm embarrassed to say how many years I've paid for Netflix. Right? I think since since it came on flash drives or or CD roms, I've been I've I've been I paying for Infinity. Its price has gone up, but it's not worth my life to churn. Right? But I watch so much YouTube, and on YouTube it's becoming more and more AI generated content. I've stealth churned off Netflix. I'm still paying. I may pay for another year, But as more and more folks stealth churn off Canva because they're using AI tools, as we stealth churn, you know, Emilia was looking, now that we've moved to Claude, she hasn't used OpenAI in four months. So we're paying for OpenAI because it's a $100 a month, but she's stealth churned. So my caution is, and I think this is why so many leaders at risk is stealth churn is everywhere. You're like, and not to ramble, but I used to think as a B2B guy, mouths and wows and DAOs were the dumbest metric. I'd get an investor update with hooray, our wows are up. And I'd be like, I know my moon used to cheer that at Slack, but but that's a sign of a struggling startup. I want show me the revenue, Show me the money. Now I want to see the mouths and wows. I want to see your usage of your illustrator, a Figma make, of Netflix, of Canva. I want to see those going up faster than revenue. This I think is the ultimate B2B test or anything. Is your mouse, wows and DAOs growing faster than revenue? If so, are probably working for you in the AI age. If they're declining, just like net new customer count, right? If it's declining, you're hiding. And I think Netflix just bought Ben Affleck Startup for like $300,000,000, right? Or something like that, Harry? Like they're not they're well aware folks are watching AI generated Star Wars content on YouTube and not watching Netflix. So I don't know. I would step down too. I just might. Speaking of Emilia hasn't used OpenAI in four months. Yeah. So deeply entrenched in her workflows with with Claude.

Anthropic turns down $800,000,000,000 funding offers. I just came back from an LP literally 10 ago. I said, what's your biggest challenge? They managed the money for some of the largest families in Europe. And they said, all of our families just want one thing, Anthropic. And the challenge we have is they don't want anything else, but they all want Anthropic. And that's the only thing they want. Every dollar wants its home in Anthropic right now, and it's caused secondary market prices to surge to a trillion dollars for Anthropic. The implications are well, the suggestions are there is a clear market belief that they have won the enterprise race, and they've surpassed OpenAI now with eight fifty with their latest. How do we read that? How do we reflect on that? The fun thing in all of this, and I put fun in air quotes, is it's so fluid. So Sam just said Codex usage is up 50% in one month. As we're taping this, OpenAI is going to launch autonomous agents, OpenCL on steroids 20 fourseven. Okay. Three, I've run my I've done an experiment over the last week. I've run my own workflows through both APIs. I don't care. So our ability to predict what we thought two weeks ago when there was turmoil, executive turmoil, everyone was using the Anthropic API. It's just better. Claude, when we started the show I was the only guy that used Claude. You guys probably thought Claude was ridiculous. Like why is this weird guy? It's less than 1% of the market. Now everyone's using Claude, right? Don't know what ninety days is going bring, but everything could change in our development environments in a week. And OpenAI could win in agents and autonomous agents. We're just starting. Agents are just getting autonomous. All these goofballs on X with their Mac minis and Mac macros and 11 of them stacked in their closet. Look, what if they shipped? Nothing. Okay? It's performative art. But autonomous agents are what we all are going to live with. We built some, and they could win. I mean, literally they're shipping it today. It could be the best thing in autonomous agents. Claude has a few now too. I mean, Anthropic, but that war's just started. It's just started. So I can't honestly predict thirty days out. So does this does a trillion feel like Anthropic? Did that feel like a good deal on our last show? Yes. Am I sure it will three shows from now? I I don't know. Maybe they'll invert.

And if Jason is correct, look, I believe both of you are correct. You're correct in the sense of AI is the biggest story out there, and Anthropic has, in the last six, nine months, been credited as the new winner in that space. So by definition, you're going to have huge form off of that stock. You're accurately representing the facts. Whether or not that will prove to have an overall holding period return from here that outpaces the S and P 500 adjusted for the risk is something entirely different. It's hard to do in Venture. The trajectory from here is actually pretty straightforward, which is when you've got this level of white heat, you go public. Because up until now, as I think I said on a tweet recently, there's just been no way We've had an entire life cycle of a technology explosion with very little access to it in the public markets. And it's hard to imagine going through the entire cycle of a boom and bust without letting the retail investors lose their money as part of the show. So that's clearly the part that's coming up. So my assumption is Anthropic will go public, and it will be a fabulously successful IPO, which is different than saying at $1,000,000,000,000 you'll feel really great about holding it six months later. It can be an amazing company, it cannot be worth $1,000,000,000,000 and it can trade at $1,000,000,000,000 for a period of time. All those things can be true. What price does it go out at, Rory, if you were to make a guess? Your job as an investor is to tell you what something's going to be worth four years from now. Your job as a banker is to tell you what it's worth today. And those are different skills. One is about projecting the future, the other is about valuing the now. I'm not going to try and project the future on this now. My guess is I come with a lower number, but ULP is right about the present. Today, if it went public today, you would be fighting them off at a stake at $1,000,000,000,000 You would have a fabulously successful IPO. And because those guys are wildly smart, really nice profile of the CFO recently, and because the other thing that's happened is the big counterattack on behalf of OpenAI has been, Compute is the ballgame. These guys don't have enough compute. My guess is the Anthropic guys are saying, Hey, we got the better software. How do we get as much compute as possible? It takes money. This is America. Jensen will take a role to provide them and give them cash, and therefore go public. So my assumption is these guys are going to go public, as we said, October time period, if they can, as soon as it's humanly possible, which is, of course, why they're not taking the 800,000,000,000 valuation. Why even pause for breath? Especially if it gives any kind of rights, which actually at this point I doubt it does. They are, I assume, heads down, preparing to go public because as long as this mood lasts, you will probably raise money in the public market for that stock at a price you mightn't see three years from now with three years of execution.

They should go. After the IPO, what are they going to do? Are they going to do massive secondaries? Are they going to do pipes? Are they going to do weird debt hybrid equity preferred deals? Because this isn't the last chance they're going to need epic amounts of capital, right? And so maybe it's minor, but we're talking about an IPO like it's an event, which of course it is. But the ultimate, I think the meta question is where is it easier to raise ongoing capital like perpetual capital? Is it really easier public than private for these guys? Not traditionally, the answer is, of course, but for these guys, is it? Yes, I think I'm going to say again, being opinionated on this one, yes, I think it will be, even though so far it hasn't been. So far, the most stunning fact so far is the biggest IPO in history is talking about raising $75,000,000,000 and the biggest private round in history raised $122,000,000,000 What that says is the biggest private round is bigger than the biggest IPO. That is bizarre. And we've grown accustomed to it to the point where we don't even focus on that fact, but it is, of course, absurd. Given that logic, you would say, Oh, stay private, you can raise more. But I absolutely don't buy that, as you know I've said. Yes, Anthropic could get one more round done, but the truth is the big liquid markets are public. I think they go public, you raise a big slug of equity out of the gate, you raise more, you obviously expand the capital base over time, and then you have access to a whole bunch of other things. You have access to convertible preferreds, You probably can do more compelling debt structures. You become a viable player for more people to lend against. So if your business model is, as they think, perhaps insanely, but whatever, I need to raise $200,000,000,000 $300,000,000,000 At some point, you have to go public. Why don't you go public when the FOMO is at its peak, when your relative desirability is at a peak? It would be hard for me to imagine a better moment to go public if you're Anthropic than this minute. I'll give you this counterargument that I might be wrong on, that admittedly I might be wrong on, which is Figma and the need for capital. So if Anthropic does not need any more capital, go public tomorrow, your point, right, or Q4 when you're ready. Go public. Go public at a trillion, A trade up like Figma did to 2,000,000,000,000 and ride it out. But Figma is down 87% from its trough. Imagine for some reason something like this happens to Anthropic. It still grows. Mean, what's Figma is still growing at top 5% rates, right? But the market has fallen out of love with Figma.

What happens if Anthropic IPO is at the perfect time for a company that does not need capital, but the markets fall out of love with it? They get worried like the construction costs go up. Those space centers we're arguing over don't work as well. Rory was right about the space centers and it it falls 87%. Like, just what happens to capital raising? Yeah. Okay, respectfully, no. If everything that you articulated happens, then the person who's public wins, and the people who are still private are existentially screwed. The Figma soundbite, which I hate, of the 83% decline is more accurately represented as follows: Figma priced at $35 with sensible people, idiots drove it up to north of $100 a share, then the same idiots sold it down. And so that's one factor. But then second factor, at the same time, Figma was at the tail end of a twenty year cloud software boom where the zeitgeist switched to the AI boom and the world fell out of love. So that took it from 35 down to where it is now, which is 20. That explains Figma. If there is a world where the AI zeitgeist goes out in the I think we're at the start I'm a minute at the start, but we're not going to hit a stage in the next year or two where people are saying, Oh my god, the story is dead. We've moved on to the next thing. You're closer to the start than the finish of the zeitgeist. I think there could be a hit to the stock, and I'll come back to that in a second. But I don't think it's the same as Figma, where literally it's like what's happening at Figma is everyone's saying, your operational results are amazing, but we're in love with someone else, so we're just not even going to talk to you. If Anthropic were to go out and if the stock were to go down, it would be because, oh my god, it's overvalued, and this revolution is going to take twenty years, not five, so maybe you're overpriced. And in that case, you'll sit there, and I've been in much smaller scale on this when you go, It's really bad, our stock is down. On the other hand, we've got $50,000,000,000 in cash and our head to head competitors still losing money in private, we win. So no, there's no argument for overstaying your welcome in the private markets at this point. None. Jason, you brought up Figma when you brought them into the conversation.

Attlying that to what we were talking about, Anthropic launches Claude Design. For those that don't know, it's kind of their competitor product to Figma, very bluntly. Obviously, Figma, as a result, were hit and price was hit significantly as was Adobe's. Jason, you you actually did a like for like, and you've tried Claude Design extensively. I'd love to hear your thoughts. What were your reflections? Does it compete with Figma in a very meaningful way? And how do you leave feeling? I leave with a lot of anxiety over Figma and others, but not for the reason the Yahoos on Twitter said. Two things about Claude Design if you haven't used it. One, it is definitely better than the design tools that were in Claude the day before. You've always been able to design a website that looks exactly like every other website built with Claude artifacts and purple gradients and the same. They all look the same. Okay. Half of demo day looks like it was built in Claude artifact at most. Okay. You can smell them in sixty seconds. But design was always there. It just wasn't what a lot of designers would call design. But you could always design a website. Now Anthropic did something which is important. We'll see where it goes. They didn't just improve it. They built an application. Claude design is an application. There are only so many Anthropic and OpenAI applications. There are skills, there are workflows, there are prompts, there are little things you can do. They want you the trouble to build a design application that works. Whether it's 50% better or 200% better than the day before, you can design better websites, better properties in Claude than you could before. Does that mean you can build what you can build in Figma, let alone Illustrator? No. So a lot of the Yahoos are like The other thing Yahoo said on Twitter is, Cursor, this isn't a threat to perfect design, to taste. Because we're all about taste now in AI. Taste We have no threats because of taste and The combination of taste and moats means we're unassailable. So will your typical, you know, hoping to afford tickets to Coachella Designer that takes two weeks to respond to a ticket to develop an asset, are they going to switch? Maybe not, right? They're not going to switch from these things. But it means normal people can design stuff and get into production much faster. So I think it is an existential threat. It will maim and nibble at Figma more and more and more. Because, like, if the three of us wanted to build an app together and we we don't wanna wait for a designer to turn it around in thirty days and give us a Figma file or a still that what the hell do I even do with the Figma file? I can stick it in Replit. Now I can just do it myself. So we will bypass designers more and more. That's the risk. Not that. But I do not believe Anthropic will ever build direct Figma or Illustrator or Adobe competitor. They don't have to to maim them. So yeah, is it a design tool? Maybe it's designed to production like the, like some folks call it, who cares? If it maims you, it may it maims you. Right? And I think people are missing the point. The meta question is that no, I saw no one talk about it. It is an application. It comes up as a full application. It has sharing, it has users, it has hierarchy, it can save assets. I do not believe there are many other applications that Anthropic or OpenAI built. And this, if you look at what the public markets are, they're scared about a lot of things, but we make fun of vibe coding. Oh, we're going vibe code our Salesforce. But what if they start building A tier applications, not just prompts, not just outputs. Like it is something to reflect on. And I'll just try to ramble, but I'll give you one last story to compare. So the oldest piece of software we use is Marketo. Okay? Terrible email marketing service. About two weeks ago, it started to violate the Canned Spam Act. We started I started to see things on tweets. Jason, how come I can't unsubscribe to your goddamn saster newsletter? And they ping me again and I'm like, I don't know. And then you get more of them, right? So that's when a bug's been introduced in the system two weeks ago. We flagged it for Adobe Marketo. They said it was unfixable. Okay, this was a week ago. Then they said they would only help us if we got on the phone with their engineering yesterday. We did. They did nothing but blame Salesforce and said they could not commit to a fix. So my point is this is what old software looks like. Okay? And if Anthropic and OpenAI are going to build applications, sell them all as a bucket. Like keep the gems. Don't get me wrong, but they're coming for old software. They're coming for old software. This is an application. This is not a prompt, but nor is it going to maim Figma next quarter. Like there's just those both can be true. Those both can be true that we won't see it in Figma's numbers next quarter. And that over four, six, eight quarters, it will maim its growth. We won't want to use grandpa's software anymore. Honestly, I want to ask a lot of questions because, one, that's what we do here. Two, you've used both products, and I tried to look at some demos today, but I just have a ton of questions. So it's like the Emerson quote, If you understand one man well, you understand every man. If you understand one competitive market well, you have a kind of framework for all these markets. So I just want to drill down on this because it's the same question in every market. So a couple of things. One is, how do you think it impacts I mean, the Canva design engine is at the heart of what they've done on Claude.

How do you think this impacts Canva versus Figma? First of all, kudos to Canva. If you use Anthropic I mean, Claude Design, it exports to Canva. So you can import from Figma and you can export to Canva, right? Should you choose to. But what's happening is product teams and engineering teams are already Okay, if we go back twelve months ago, you had design. Okay, back in the day when I worked at Adobe, there was a design group. We weren't allowed to design anything that was public facing. You'd face a ticket and sixty, ninety days later, you'd get a PDF of what your website had to be looked like, okay? Then your product team would have to figure out what to do with that PDF, argue with your engineering team, and months later, that's the way software used to work until not too long ago. Then as everyone started working in Claude Code toward the end of last year, product and engine teams just started to work in the code together. Product teams first would vibe stuff in Replen and Lovable on their own, right? Now a bigger and bigger deal is they're committing to the code base. Product teams are able to do this. And so these PRD teams are becoming more cohesive and then design still way out over there in their own hipster land. As these combine, everyone's going to want to work directly onto Codex and Claude Code. It's not going to be this designer enforces a collaborative hierarchy on Figma. Because the designers hold the PRD organization hostage. They hold them hostage before AI. It's the worst. Yeah. It's worth just pointing out at a high level comment here. When you're saying design implicitly, you're saying here is it's the Figma digital design websites and apps world, the software part of design, not the part of Canva that is printing out real world pictures, posters, and the physical design where it's decoupled from software. You're right. Design is such a confusing term, right? It's a bigger threat in the short term to things like Gamma. It already makes slides like Gamma. Okay? It's not a threat to Canva today, but every single thing you do in Claude Designer that you don't do in Canva or Figma or Gamma is a is a threat to them. Even if it doesn't kill them. Every single thing you do. I think the smartest thing Jason always says, Rory, which always sticks with me, is just the element of maiming, which is quite hard to deny. If it takes 20% to 30% away because you're already there and it's easy, that's very meaningful.

It is meaningful. And again, I'm not diminishing that. I always thought one of Google's interesting strategies for a decade and a half was the strategy with G Suite. It was email and effectively a docs and a spreadsheet, which just gnawed away at the bottom end of the Microsoft Office suite. And if you fast forward a decade and a half, you get both sides of it, though. Basically, they could spend $1,000,000,000 yanking Microsoft's chain on a $40,000,000,000 business. It's exactly what Jason says. I'm messing with your head. I'm maiming you, and it's not core to me, I don't have to win here. You just have to lose. On the other hand, fifteen years later, your office is still a plus or minus $40,000,000,000 business, lower growth rate. So there is a range of outcomes from it gnaws away at the low end, takes away a lot of users, but only 5% of the revenue too. It bites 30% of the users, 25% of the revenue, and it really impacts. Those are big differences in terms of value creation. We'll have a maimed meter in board meetings. How much have we been maimed this quarter? And it'll go from one percent all the way to 50%. And our agents will decide. We don't let the founders decide because they're always at 1% or fifth or they're the overactive one. 50.

There's this cue for the Monty Python. It's only a flesh wound sketch. It is. It is like that. That's why you're gonna go, it's only a flesh wound. I lost my arm and my leg this week to Claude. There's two things you said that resonate. One is anytime someone can give away something at the margin for free that takes away some of your load, there's just an impact to that. Bundling is a bitch, and they're effectively bundling here. The other thing that I think is more important that you said is, and I hadn't internalized this, but if the design flow is a preamble to a technology build workflow and the technology build part of that workflow is already automated using Claude Code, then you add the incentives. Where you get scary as a standalone company is if the other guys have a better together story. And you're right, to the extent that design, product, and engineering can all be in the same tool, there's probably a whole bunch of embedded efficiencies there. And from the perspective of the company building that product, it makes sense to because the thing that often happens in these deals is OpenAI did a ton of these. If you look back on the it's just fun to do it now. The GPT store, the GPT plugins, every single time Twitter goes all excited, This is the end of everything. XYZ company is screwed. And it turns out, two years later, no one even remembers that and the thing's been deprecated. But you're right. In this case, if you think of design not as a standalone category like Canva, but as the front end window into product and engine, if you think that software is the mother load and software coding is the mother load of enterprise adoption, then you probably get enough effort behind it to build a credible product. That's what you're saying. I mean, put bluntly, at some point, when even Anthropic has to start allocating resources at the margin, implicitly, you're saying there'll be a big enough team here to build, as you say, all the app features to make it a viable competitor.

Yeah. And not only does it export to Canva, it exports to Claude Code. They're integrated. So if we're moving quickly, we're not going to wait. Listen, I still want my human designer to deliver my amazing homepage of my app, my amazing splash screen, my amazing assets, But we're shipping features every day, guys. I don't have time to wait anymore. We're going to do it in design. It goes straight into Claude Code, which we already run our company on. We already ship on, right? It's fully integrated. And if the humans have time to redesign it later and make it better, great. No one's saying it's pixel perfect. Don't have time. I don't have time. So the only reason I think they won't they won't entirely abandon it is it's it's part of the core. It's part of the Claude Code core. And it is something you can already do in Claude Code or even just Claude just crappily. So they're improving The closer it is to the core, the higher the chance they'll maintain it and it's not a dalliance. Right? Not only are the decliners stressed, not only are Dylan and Mike Kennel Brick stressed, they're stressed at Lovable and Replit and Vercell and Gamma two because the rated competition is like we've never seen before. Right? And I will say one thing I know from all these founders, I mean, they're brutally aware of it. The older CEOs are hiding from it. Oh, our next agent will catch up. Oh, we'll catch up later in the year. Oh, you haven't seen our next? This is what I hear from pre AI founders. We'll catch up in the next release. They say so confidently, right, as they go off to complete their triathlon. The AI native CEOs are they're freaking all over this. Okay? In sixty seconds, you get a Slack back. They actually know that what's coming a month later that all their competitors are launching. They're already all over it. They're already I hate the 40 chess game, but if you don't play 40 chess, if you're at the core of AI, you're gonna lose. So they're they're all playing this game. It just gets harder every week. Excel adds 4,000,000,000 leaders fund to follow into hot AI growth rounds.

Sequoia four days ago raises $7,000,000,000 growth fund. Is this just further compounding what we said, which is that is the game today and the leaders see it? It's definitely the game today. It's definitely the leaders see it. Obviously, the question is, is it correct? But yes. Do you think it's correct? Directionally, yes. People are saying private longer, outcomes are bigger. So capitalism is doing what capitalism should do, it's raising money to put into these companies. The thing about growth is this: When growth is sexy and attractive from a fundraising perspective, it tends to be hard to make money at. And the way growth makes money is either overall valuations are down like 2022, or there's some insight that the growth investor has that the wider market hasn't figured out yet, like ChatGPT really matters and you should buy OpenAI. So both of those conditions were two in 'twenty two and 'twenty three, which is why those funds are going to be awesome. If you have a situation where capital is plentiful for those rounds and everyone understands AI is amazing, then by definition, you've eroded the two things that gave you excess returns. I'm not saying you still won't make great returns. It won't be as clear or as compelling as it was when it was unpopular. The other thing is there's room for the capital. And what I mean is if you look back at 20VC Fund one, dollars 10,000,000 fund, right? I'm speaking for history for Harry. Back then, the strategy was to get into hot seat or A rounds where he could write a 50 ks check, a 100 ks check. There was always room. There was always room. And that to some extent, it's still today. It's just those hotter checks are at much higher valuations. Fast forward to today, if you're a relationship builder, if you drop by and meet with Dario, if you schmooze with Sam, there's room in the round. Like, you get cut out. Don't get me wrong. People are getting cut out of these rounds. But if you're Sequoia or Excel and you're a good schmoozer and a people person and you show up to Poker Night and you do all the right things, most of these rounds, you're gonna get an allocation. You may be the fourth name on the press release, but you're gonna get an allocation. And so, in a way, the funds don't sizes don't even sound that large. If you get 20 or 30 checks, they're not even that big. And that's totally fair for five or six companies. You're exactly right, Jason, is that when you're raising $122,000,000,000 it turns out there's room for everybody. Even when you're raising a miserly $30,000,000,000 in the last Anthropic run, you're right, there's room for everybody. Well, people get cut out. They're desperate to get into Anthropic. But if you have the relationship and you really build it over a period of time, when they look at the spreadsheet for the round, they're gonna put you above the fold because we like Rory. He's great on the 20 pot. He came by the office. He loves us. We're gonna well, fine. We'll give 20,000,000 to Rory. It's no did you disagree, Harry? No. He doesn't because his first sentence, his comment was, if you're going back to Harry's LP who's monsootropic and nothing else, what I'm gonna like about Sequoia, they know how to make money. Right? They're like, let me get this straight. I have a good relationship with these mega companies. I'm a name that they'll want even at this stage. And I got a bunch of LPs saying, the only thing I want is this, and I'm in the middle. Let me think about this. I should take their money and give it to these guys and charge my percentage and call it a day. As long as that works, the marquee names who can do that are gonna do it. Some of the package pricing on these SPVs for Anthropic has just been the most egregious face ripping I've ever seen. I mean, like, 8% upfront. Crazy. One that I I thought was fascinating was Rippling crossing a billion, growing 78% year on year. Is this the new bar for a great b to b IPO?

Let let's step back even one level beyond the IPO. I think what this sentence, if true, and you never know, but I believe it to be, exposes the whole SaaS is dead meme is bullshit. Low growth SaaS is bad, and high growth SaaS is good. This is a market where we can talk about the reasons why, If you're doing $1,000,000,000 going at 78%, then collapse of the entire discussion about SaaS is going away, SaaS is bad, what's it worth? What it really points out is the real objection to these public SaaS companies is not, Oh my God, you're SaaS, it's that your market is now top stop, then your growth rate is 10%. If Rippling is growing at that rate, that's amazing, it's compelling, and they'll get an excellent IPO. And they're accelerating. The crazy thing is they're accelerating. So if they were at less than five hundred eleven months ago, which I do know, right? And they're at a billion growing 70 something percent, do the math with me, Rory. They're accelerating. It's not just 70, which is enough. They're accelerating. Right? And you can say that's great for SaaS and it is, right? As Parker said to me, not bad for a SaaS company, right? Kudos. And we can talk about what that means. I'm not even sure what it means, but not that many are accelerating like this. So this is not good news for anybody not accelerating at scale. Right? Let's not it's not even 70%. It's accelerating from like under 50 to 70 in a year. I mean, candidate for CEO of the year. Not to disparage deal, but candidate for to drive that level of acceleration? I don't even know how to do that. Unless there's people buy unless there's people buying tokens, I don't even know how to do that in today's world. I mean, bold candidate for CEO of the year. I mean Yeah. Respectfully. He's he's got a bit of competition, Jason. Yeah. But, like, they've just launched their agent. Driving that level of acceleration without a massive AI tailwind, just blowing your phones up, Bring them on, we'll talk about it. I don't know how to do that without AI, right? I think it's what they refer to in sport in terms as a win against a run to play. Against the odds, you're playing the SaaS game where everyone's walking around saying the world is dead. Yes, Anthropic is putting up 607100% growth, but you put 78% growth and acceleration up in a category where most ill informed people were saying you can't do that. Maybe the clear expression is highest outperformance relative to market expectations.

I think that's a clear example. It's better than Figma by the numbers, right? It's better than Figma by the numbers by far. What it just says is there's markets where the entire agentic AI vibe coding discussion is rubbish. And one of them is financially related stuff and payroll. I've run a business and you guys both run businesses. You can screw up on a lot of things. You screw up an employee payroll and you pay them at 03:00, they'll be in your office at 03:01. You can't get this wrong. You're not interested in vibe coding it. You're interested in having it right. You've got legal and statutory obligations that carry criminal penalties if you don't pay your taxes. You're like, I want to outsource this to someone wildly competent, have them take the responsibility, and no, I don't want non deterministic processes, you moron. These are entire businesses that might have some impact at the margin in terms of agentic efficiency, but this core business will be there in five, ten years' time. It'll compound because payroll is not us. We're actually talking about this a lot internally. What gets eaten by AI? What doesn't get eaten by AI? What's defensible? Payroll is one of the best examples of this is just something you do. You might build a software better using AI, but the core value proposition is something that it it's just orthogonal to AI and it has to be done right. So big category. It'll go public. It'll be a great outcome. Good for him. I think the same with a lot of the fintech players that we see today. You know, your your ramps or your stripes or air wallets of the world are not qualified.

You know what, though? I I know it's not to harp on the the the main episode. The mode is stronger. It is less impacted by AI, but everything I view now in terms of it's how well it works with our agents, how well it's API and workflow works with our agents. For example, after SASTRN annual in May, we're going to build our own AI VP of Finance. And the number one thing we're going to do is automate collections. Okay, so we've been on Brex for six years. You know what the first thing we're going to look at? Which API works best with our agents? I don't care what ramps dashboard looks like. I don't care what its office of the GDP and now I don't care. I care how our agents work with its API and we're going to pick the best one. That is just starting, but it is a BFD. And it also means that folks that seem to have a huge moat, it may weaken when and I'm not just being a Yahoo on X. We're going to build an AI VP of Finance and he don't care what the UX is. He don't care. First of you're right. You're absolutely right. And therefore the payroll and kind of AP collectibles that have the best API will win. But I'll tell you something, you're not going to build an entire FinTech stack. So someone will get those dollars. You're right. Someone, but it could be a new vendor. It could be a different or it could be a different vendor. I mean, this gets to the self of it. There are three or four vendors of AP related stuff. You've got RAMP, you've got Bill, where we're involved, you've got RAMP, Brex, whatever, right? Whichever of those doesn't have an API forward product will lose market share, whichever one does will gain market share. And if all of them are dumb enough not to do it, then a new vendor who says, I'm an API first product, will get your business and all the people like you. So I think you're correct in that, which is a platform shift, which is what we're dealing with at this level, has implications for everyone in the tech stack. But if you are doing something like what RAM, Brex, Bill, all these people are doing, the core thing you do itself won't be replaced in a way, for example, Figma might be. Right? My point is there's degrees of change here. But it was just the comfort that we're protected.

You know, Ramp has asked us to switch from Brex for seven years. I bet we finally switch over the summer and it's only because of the agent. If it wins the bake off, we will switch in one week. We will switch and we will never go back to Brex. Same with Marketo and HubSpot, by the way. Like, we're leaving Marketo because of this drama, their crappy API, their can spam. We will leave Marketo this summer for whoever has the best API and it probably won't be HubSpot. Which is why we should pause here to your point. Salesforce just announced an entire Headless API strategy. What are your thoughts? Well, while we debate where to move our Marketo data, we're already using Headless Salesforce to move all of our Marketo data agentically over to Salesforce. It'll be done in a couple of days. See, that's a great story because give them credit, give Benioff credit. He's like, if you can't beat them, join them, as they say in private I mean, remember, it's less than a year ago there was talk about we're gonna charge you a you know, we're not gonna let you have your data. And now we've gone to getting ahead of us out the door. So you're an example of where he's taken share from the adjacent companies like Marketo just because they're doing that. And that's your point. Well, starting. The only thing I will say, listen, we're already living the headless vision, right? We don't log into Salesforce. It's our hub. But this is a lot of stuff that's going to run on MuleSoft in a couple of months or six months. This is also with love. This is also a classic B2B.

Anthropic set drops a design tool, and we can use it in an hour. This is something that will be dribbled out in classic b to b fashion over here. It's just like it's different worlds. Can we provide some context also for those that haven't heard in terms of just banning off the move with Headless that he announced? We So set the scene there because I want to ask some Sure. Mean, traditionally, the Salesforce app, it really had two parts of value. There is the user interface that every sales rep or everyone in the organization uses to input and output information and effectively record the work they're doing. And then at the back end, you have effectively this massive database and workflow that records all the information and allows you to track customers, leads, pipeline, all that relevant stuff. So there's two components of value. And by offering a headless offering, what he's basically saying is if those people who are doing the work are replaced by agents doing the work, then they don't need my UI anymore because the people aren't there anymore. They need a totally different agent based UI. But what I'm going to do as the leader of Salesforce is I'm still going to allow access the database side of my product, which means I keep my value even in a world where most of the selling or the customer support is not done by humans typing into the Salesforce UI, but it's done by agents proactively going against the Salesforce backend. So he's given up trying to drive proceed pricing to preserve long term value because I think he correctly has identified, to Jason's point, he said it as a negative, but it's also a positive. The real long term value that Salesforce has is it's taken us ten, fifteen years to get all those integrations in place, all that data in place. If you make it easy for Jason's agents to work with Salesforce, then he might get around to killing you for the longest time. So that's the big move they made in the last few weeks. I think like Claude designed, though, everyone completely misunderstood what Headless Salesforce is. Salesforce is already Headless. Salesforce is And this is actually pretty crazy. Really, Mark and Parker, to their credit, JFC, in 2000 and frigging six, they launched an enterprise API when this was seen as not possible. You could not build, allow third parties to integrate into enterprise software. It's too risky, too problematic.

They opened this platform up and they have 20 of it getting better. And I will tell you all the APIs that our agents use, AI VP of Marketing, VP of Customer Success, Salesforce is the best. It is the best API out there. It crushes everybody. This includes all the new guys, everybody. But it's because they built this for twenty years and because the APIs are so good, the agents can work with it. Like it's not a problem. Headless is, that's what Mark's out there, I mean, the greatest marketer in B2B, right? But it's already done this since Agent started. What he's really pitching, which is the bigger threat to these leaders and the bigger opportunity is an agent fabric, is the layer that manages all your agents. If you really look at what this is, it's about Salesforce says, we are going to be the fabric to manage all of your agents, your 20 agents, 50 agents, 100 agents. Some of them will be built on Salesforce. Lot them are going be built on Ulfoft, as crazy as it sounds, their platform, which has been renamed. It will be in their data platform, but we will be the layer to provide the context, the guardrail, the management, the security, the everything. And this is the biggest issue for 2027 is agent fabric. People are under discussing this. They're all talking about evals and this crap. This is what really matters in the enterprise is agent fabric. You can't let these crazy agents run amok. I'm sorry. I'm just going back. When you say agent fabric, you're saying agent orchestration management.

It manages everything. All the governance, all the security. It knows here's the key part. It knows what every single agent is doing in real time. That's the fabric. That is more than orchestration. Okay? It literally knows every data, every operation, everything that's happening through 200 agents running 20 fourseven in parallel with multiple sub agents in them. Who's going to go to poor Jacob O'Driscoll, its CIO of wherever, that if there's any security breach, he loses his job. It's his worst job. He wants a trusted agent fabric to manage these crazy agents his team is deploying. And they can't be done on at a ChatGPT. They can't be done out of Base44. JFC, this is a security nightmare, right? I mean, even this week, and I don't want to get into it, two leading VibeCode platforms arguably had massive security issues this week. I don't want to talk about them, but this is only going to compound. As mythos comes out and finds every security breach in nanoseconds, I need an agent fabric I could trust, not someone that came out of YC and claims they have an orchestration platform. But I don't know if Salesforce can deliver it because it's so effing complicated. But if you're in their ecosystem, if you commit to everything, when most folks hear about Salesforce, they think it's CRM, it's 14% of their revenue. Okay? If you commit to everything, e commerce, marketing, data, analytics, Slack, and you run it, your whole business on Salesforce, this is the old SAP Pitch, we will give you the agent fabric so you can accomplish everything you want. This is an agentic platform you can trust. This is the big bet coming, and this is all the warm up phase for agents. Enterprises need an agent fabric they can trust. Agreed. Because, you know, you're empowering these software agents to do things, to change things in your systems, to upgrade things, approve orders, to make commitments. How do you audit what's going on? How do know? How do you keep control of You're exactly right. That's going to be the issue. I've got 300 agents doing accounts receivable. I've got 200 updating our documents.

I've got all of these interacting at our autonomous customer success agents, our economist data analytics agents. Who's going to manage all this? Orchestration is the nerdy term, but most folks talk about orchestration as just a limited dashboard on top of a couple easy APIs to connect with. It's fine for a startup or for a team that has human resources, but how's an ordinary company going to manage these agents? How the hell is an ordinary company without a team of agent deployment experts going to manage these agents? They'll go rogue if you don't manage them. This analogy may be totally useless. It's only because I've been doing it a long time. But I remember in the late '90s when online commerce took off and people really started getting a meaningful percentage of their revenue from online commerce. You have all these executives who are retailers to the core. And what do retail executives do when they want to know what's going on? They go walk the floor. They want to know what's going on in the shop. And even if you're running a 500 person chain like Walmart, Sam Walton used to walk around, touch the merchandise, see what's going on. And suddenly, the whole thing's going on online, and you just don't know. People are clicking. That's all you got. You saw a whole wave of companies doing analytics around how do you track your website because the big guy just wants to know what's going on. That was the value proposition. We did NetGenesis, we did Omniture, made a lot of money in that space. And the value proposition at its core was you've moved to this new way of doing business, senior people want to know what's going on. Frankly, AI is way more powerful than that because at least in that, you had very deterministic on selling stuff at a certain price for a certain thing, and even then you wanted to know you didn't do anything dumb. In this case, you've empowered your agents to make decisions. Now you're the executive in 2026. You're going to know what's going on. Because think about it, even what's Gong? Gong is all about listening into calls to understand what people are saying. Once you have AI agents doing all this stuff, you're going to want to know what the AI agents are doing. And I think Jason knew exactly right. This is gonna be the huge thing. How do I think about what my little automated bots are doing in my business? My question was, are Salesforce best placed to be the agent fabric, or is someone else better placed? If that's the whole holy grail. Of course, they're well placed. It's a bad analogy, but just like in the end, Google, Microsoft, et al were well placed for the last generation of AI.

If they can get their rears together, the leaders are well placed. Salesforce, Shopify, Datadog, Databricks. If they can execute faster than they've executed the last twenty years or eight years, however they are. Of course, CIOs want to buy from Salesforce. Of course they do. But it's much bigger than buying one agent force agent. They want this whole agentic fabric. So, and here's my meta point to folks. It's an opportunity to worry. You have time. It's just not infinite. It's like if you're not building up that whole fabric, right? That's why I'm a fan of Mark. This may not get there. It is a bigger vision than it looked. It's not just Headless like all the Yahoo said. Okay? This is a complicated vision and maybe they won't get there in time. But at least he's driving the right vision and forcing thousands and thousands of people to deliver against it. Right? I'm much more worried about folks that it's more performative, right? You've got to work as hard or harder than Mark to do it. But I don't mean to repetitive, but the saddest thing is when you have an install base and you're not delivering the agentic solutions they want. This is the tragedy of 2026 and 2027. I have the customers, but Legora or Repla or whoever pick any application you want. What's the AEO one you invested in, Harry? What's it called? Oh, Peak. Peak. Yeah. HubSpot launches their thing and it's a dud. It should have been Peak or the other one. Like, it's just a tragedy because HubSpot has two and eighty thousand customers. It's a tragedy you did not deliver them the best in class AO edge. It is a tragedy. It is not just a test or a miss. And I just, so that's why I think Salesforce is extremely well positioned and we are right to be stressed like everyone is stressed, that they will achieve it on time. We're right to be stressed. It's really interesting.

They've had inbound to be bought by so many people. And Eli Gil today tweeted a load of predictions. And one of his predictions was that a load of these AI companies should actively sell and try to sell. Do you guys agree? To whom? To HubSpot. Literally, Harry, I was on the phone last week with the CEO of a 20 or $30,000,000,000 market cap public company, okay, doing massive revenue. And he's like, I get these And we're talking about M and A a little, but I brought it up. He didn't bring it up. I'm like, Well, go buy some of these kids. Right? You have the base, right? He's like, Well, everyone wants a billion on 5,000,000 in revenue after their last round. He's like, It's almost a waste of Like, I have a corp dev team, but I haven't seen a single one that I'd wanna buy that will sell at a valuation that makes sense. So Google can buy them, but HubSpot what's HubSpot's valuation as we record this? In the teens of billions? They just can't afford a billion dollar for every YC startup. They don't have the money. Yeah. I would say try harder, stay close. There's gonna be plenty. Plenty of exits? How many whizzes can Google is Google really gonna buy, though, are No. Talking about those kind of exits. I I I I think to your point what's that? 12,000,000,000, HubSpot. So they could afford 50,000,000, right, to take a risk, right? Not a you billion.

Know I like the space, but someone told me that, G2 crowd said there's like two fifty AEO, GEO competitors out there. Maybe you can't afford numbers one to five, but somewhere between ten and two fifty, there's going to be one that has a good product. So I think Allad's entirely right. But isn't Allad saying sell at a billion, I think is implicitly what he's saying? Yes. If you can Sell them out for an easy billion, right? I'm optimized for $100,000,000,000 outcomes at my fund, but sell for a billion now while you can. Honestly, that's what I think he's saying, right? I would agree. His other point was you should have an exit discussion every year with your portfolio companies, right? I'm going to have one tomorrow. It's a great tip. He's super smart. I just wonder where the where the billion at 5,000,000 ARR exits are coming from. I I would I want their number. Give me their WhatsApp or their text because I'm gonna send them a couple deals before this right after we get off this show. And my point is this. In many respects, what you're saying, when you listen to what Jason says about the public markets and the dilemma they're going through, they absolutely should be looking to acquire some of these things to get some of this technology. And maybe what we're really saying is the biggest rate limiting factor is not their unwillingness to do it, but the prices at which the venture crowd think we're going to get for them has made it hard to make those transactions. It's been my experience that if that's the case, in the end, things true up. But you know what's tough? I picked on this HubSpot AEO product, okay? And I love HubSpot, right? I picked on it. But I didn't know they bought that company for 30,000,000 like months ago. So everything just gets stale so quickly. I'm sure HubSpot sat around and said, listen, we need to be in this place. It makes sense. We need be an AEO. What can we afford? Well, Harry just funded this one. We can't buy that for 30,000,000. There's the other one in The US, we can't afford them. What is available we can afford? And I think five years ago, that was a good strategy, right? Because the world moved slowly. Now you buy something that Let's assume whatever they bought, this company was competitive four months ago. It's just not competitive at today's pace. I don't mean to pick on them, but it's why M and A is tough, right? Who wants to buy something that's gonna get stale Look at poor TBN, we can't even see it on our feet anymore. Like it's disappeared since the acquisition, right? Gone. So why even buy any of these things if they instantly become stale? You do these tuck in acquisitions, which used to be, go back to corp dev, you had the best strategy was the barbell, just starting to like investment. Buy something small for 50 to 80,000,000 for product, a couple million in revenue to prove it works and rebuild it over a year. Rebuild it natively on Salesforce or HubSpot or go big, right? Because you got scale. But it's tougher today to find the gems that want to sell with product market fit cheap. I don't think you're saying it's tougher to find them. I think you're saying it's tougher to manage them and preserve the urgency and the speed. I mean, even OpenClaw, that dude's just on the TED circuit now. Right? OpenClaw is maybe obsolete in a couple more weeks. Listen. The two more for me is Snap and Cerebras.

Yeah. I think you have to do Cerebras first. I just have a predilection for good over bad. Okay. Let's do good over bad. Cerebras files for IPO. It's the second time. Some of the concerns that were brought up last time in terms of a dependence on g forty two's revenue and the revenue concentration they had have been resolved. How do we feel about this? Is this gonna go out well? They're now at, where are they, 510,000,000 revenue in 2025, up 76% from 02/1924. They've done a great job. I I absolutely. That's why I wanted to cover it. I think it's a great classic venture deal. Credit to Benchmark, Eric. Credit to Steve at Foundation. Credit, obviously, more than anything to the team. This is a ten year journey. I think in a way that wasn't true a year ago, they got the elements of success in place. I mean, look at the P and L, it's a little noisier than at first glance because you at one point said, Harry, it's profitable, it's not. It had some weird reversal of liabilities. At the operational level, it's still losing money. But the big is they've I mean, fact, they've done exactly what it takes. They've proven the product and stepping back, this is a semiconductor company, potentially one of the very few startup semiconductor companies in the last decade and a half. The product they make is a big ass wafer scale chip that's really good for inference because it's really fast and obviously very optimized for AI. And if you read the founder letter, it's been optimized for ASICs. They founded it in 2016. What they've done really well is step back. This is a very hard market to enter, no matter how good your chip is, because there's only a small number of big buyers, obviously the hyperscalers. Some of them have their own chips, some of them might want to trust you. These guys have done a couple of things to parlay their way in. They've done some big deals in The Middle East with folks who've been willing to use the product. They started to offer a cloud offering, and one of my companies has used it, whereby they are effectively saying, Our chip is so good and so fast that we'll offer inference services on a cloud basis. And when you use it, it'll be like, Oh my God, this is really fast. And as I said, one of my companies had that experience. It's really fast, low latency, it's a great product. And those things allowed it to prove that the shit worked. And in the last three months, they've signed a deal with OpenAI and AWS, right? And the OpenAI deal is for the usual $20,000,000,000 of commitments, who the hell knows what that means? But the point is they've gone from niche to mainstream and they've clawed their way into the mix. So I just give them huge credit because that's a long journey, it's a hard journey. And a year ago, it was easy to snare and say, yeah, you got a bunch of investor contracts in The Middle East, it's all bullshit. Now you've got the inference business, you've the service business, you've got the incipient contracts with two of the largest players in AI. It's a credible play. So I think it gets done, and it gets done well, and it deserves to get done well. And now I'm on my soapbox. This is just great. It is just great that Venture does this kind of thing, a 10 journey to finance a new chip for a new use case. It's complex technically, complex business, and they pull it off. I hope they make a ton of money. I agree. I really like Andrew Feldman too, the CEO. He's a really good dude. Where does this go out at? Grok sold for 20,000,000,000.

Does the benchmarking of Grok enable this to be a $25,000,000,000 IPO? When things are valued on a PE or an earnings basis, you can have an opinion, a meaningful opinion on where they should trade. In this case, it's going to be so much narrative based, it could go well above that. Mean, again, we talked about this a while ago. The leading player was worth $5,000,000,000,000 and then the next two leading players after that are kind of in well, you got AMD, and then you got in house silicon from Google and Amazon. This is the only other standalone play you can make, right? I mean, do the math here, 1% of NVIDIA is $50,000,000,000 If you just think of it as a call option on some percentage of a $5,000,000,000 market, you can see a very big outcome here. You can squint the other way and go, my God, they're never going to It's a high beta rate. Again, it's back to what we said. In these kind of huge markets, you're way out there on the risk continuum, but when risk appetite is on, and risk appetite is on today, high risk, high return stories go at a premium, and this is a high risk, high return story with a big market. So in today's market, in today's environment, that could price extremely well. It'll create an interesting case story with Grok, who has the better I mean, I know this is such an annoying investor thing, but who has the better outcome risk and time adjusted, right? Both took huge risks to start their companies. Both started ahead of the curve, right? Cerebras, I guess even more, right? Would you rather take 20,000,000,000 in whatever, I don't know, combination of cash and stock with weird taxes you got from Nvidia, or ride the up and down and emotional roller coaster of running a public company for a decade and trying to get liquidity and seat of Morgan Stanley will give you a loan against your stock. We're all on different journeys, I don't know. I can tell you I'd rather sell to pee like SalesLoft did for $2,000,000,000 and peace out. Well, that's a different journey altogether. Not You guys are doing the heights. I mean, yeah, look, equally say, I think they're pretty glad they didn't sell Google to Yahoo for, you know, billion dollars, whatever it was. When it works, you're glad you're What about Figma and Adobe that didn't happen? That one I'd be I'd be pulling if Dylan's better than I'm me, but I'd be like farts.

Yeah. Farts. Farts. Farts. Farts. I don't mean to be political, but, man, that was a rough stretch there. Yeah. But maybe they like what they're doing. I mean, maybe you know, lots of folks do, actually. Maybe they You you do, but but it's just it's tough when the team's RSUs are not worth what they were and the options are struggling and people are leaving to go to Anthropic. Just not fun to run those companies, That's my point. You're exactly right. When the momentum turns against you, you wish you'd sold. And when I mean, you know, Jensen's glad you didn't sell NVIDIA anytime along the way. When when it works, you're glad you didn't sell. And when it doesn't work, you wish you had. It's as simple as that. It's a derivative of Ilod Gill's point. Which one are you? Right? Be honest, once a year at the board meeting, be honest, who are we? Are we are we NVIDIA? Or are we which one are we? And then, you know, it's it's easy on Twitter to think that you're Jensen. We used to think we were Zach. Right? I'm the CEO, Bee. Right? Now we all pull on our leather jackets and think we're Jensen. Right? If you're gonna be Jensen, I hate to tell you, but you just gotta be willing to eat a podcaster for breakfast once a week because, oh my god. I was gonna bring this up as, a kind of and what did you guys say? I'm sure we both we all watched the Dwell Cash Chance. What what did you think? Well, I thought he was excellent as his comments on, you know, we don't kinda have this preferential status. We're here to sell chips. If you wish it was a PO, we'll sell you chips. You know, his relationship with TSMC, all that stuff, I think was super grounded. And you just go, wow, that's a world class executive who shipped gazillions of chips. What you're really talking about is the argument about China, correct? But Dorkish and he and Dorkish got into it, and it was a little bit. Yeah. Yeah. Yes. And when he was saying bluntly, when you look at two of the largest frontier model providers, neither of them trained on your chips. And he bluntly provided a pretty cagey response at best, and then admitted we should have invested in them. Well, I think there's a lot of things lumped into that. OpenAI definitely trains in part on NVIDIA chips. On Topic, I'm not as clear on what they train on. I've had mixed comments on that, but whatever. Think his comment on not investing in Anthropic was he couldn't do it at the time because he didn't have which makes sense in 2223, he weren't in the business of writing $30,000,000,000 venture checks. I thought he was very rational there. He said, Made a mistake, didn't have the capital at the time, wish I had. Just bring him closer to So I didn't think that was bad. I think the problem with the China discussion is there was two priors that neither party agreed. And when you have a discussion and they're talking past each other and you don't agree on the ground truth, it's just a waste of time. And two things are, one is how big an enemy do you think China is? Is it just a competitive trading partner's competitor in the way that Microsoft and Apple compete? All the way from there to is it the new Russia and we got to not give them a single thing because we're scared they're to nuke us. And then the other thing that I think is Turkish clearly thinks that frontier models are as dangerous as uranium, and Johnson clearly thinks that's bullshit. If you don't agree on those two things, if the question is, should we make it easy for China to build frontier models by selling them NVIDIA chips, which was the question. If you don't agree on what you think about China and you don't agree on what you think about frontier models, you simply don't have a useful discussion because neither of the nouns in the sentence have been defined. So once you internalize that, you're like, Oh, that's two people talking past each other, and one of which just doesn't give. And it turns out, yeah, and that's why that part wasn't that useful, but it was kind of funny. It reminded you what semiconductor executives were like when I started investing. A lot of business with semiconductors, just hardheaded guys who just say no, no, and enjoy it. So I enjoyed it at that level. It was a little bit of a culture clash of generations, and it was fun. But I thought he did. You can't argue with the guy. No, I just saw it for the first time ever. It wasn't an easy interview. No, it wasn't easy. Give Dwarkers credit, he tried to punch. And it's really hard to punch someone who A, talks his book and B, has thirty years of knowledge. When you were a 25 year old podcaster. And, you know, I think one of things I like about it's about where you come from that takes how you approach it. We're doing this in a spirit of inquiry because to some extent, we're all trying to figure out what we think, and talking things true often helps. So I often find I revise my priors based on the discussion. But I'm not here as the CEO of a $5,000,000,000,000 company. He's here to talk his book. And let's be clear, 30% of his entire market is in China. He wants to sell those guys NVIDIA chips, and there's simply no argument on God's green earth that's going to convince him that he shouldn't get $40,000,000,000 of revenue from shipping chips to China. He spent time with the president lobbying to be allowed to sell NVIDIA chips. If he's had to do whatever that takes, and I shudder to think in terms of sucking up to be allowed to sell chips to China. He's not going to roll off and play dead because some 25 year old said, Maybe he shouldn't. He did the same to you, Harry. Beat a straight handoff right in the face. It's like, Thank you, but no, big guy. And did I think he won the argument? No, but he knows how to fold his corner. It was fun. I listened to I I worked out and listened, and I was like, woah. Boys, is there any other topics that we haven't discussed that we should discuss? We ran out of time to cover Snap, but I just don't care.

I mean And for anyone listening, Snap cut 1,000 jobs, 16% of the workforce, and the stock popped 11%. They just need to figure out a converging business model, they haven't. Amazing company at the start, and now it's just drifting around and needs to figure it out. Master of stock based compensation. Look, it's going to be an advert for the dangers, to some extent, of dual class votes. And I used to agonize about this, and now my perspective would be, look, you had a chance to buy two social media companies with dual class votes. If you bought Snap and if you bought Facebook, you're 50% down on Snap and you're 10x up on Facebook from the IPO. Shut up, take the check, move on. Turns out, untrammeled power has good outcomes and bad outcomes. Get married a supermodel, So it's not all downside. That's a positive note to end on, Rory. I hope everyone has happy marriages there. That's great. Okay. Have one last one if we're out of time, but I wanna get Harry's thoughts. So the other thing Elon had retweeted something that went around many times. 91% of all AI unicorns are now in the Bay Area. Thoughts from London on this? Oh, nice one. Yeah. How many and I wanna know in particular how many are in Marleybone. But but 91% of the Bay Area, Project Europe, how are you thinking about that from from London, this increasing concentration of AI unicorns in the Bay Area? This is from this week. I think some of the best AI minds or the majority of the best AI minds want to be in Silicon Valley. Quite rightly, you're seeing the recentralizing of power back to Silicon Valley. That said, I think you can still build unbelievably great AI companies as we have done in London with and DeepMind and with, you know, Matthew at eleven Labs. And I think it's easier to be in Europe because with your 91%, you also have 91% of the capital and every other person on the street being a venture capitalist.

And so I think you see this gluttony of cash combined with a gluttony of companies, which makes detection harder and makes winning harder. And so I agree with that. Sure. The majority of great AI companies are there, but I also think it's harder. And I think for me being one of the top three brands in Europe, I would rather be here with much less supply side than they're fighting against Benchmark and Founders Fund and Andreessen and everyone in between. Well, I have two comments on that. One, yeah, it's the old Caesar quote. I'd rather be first in a village than second in Rome. That's really what you're saying. Though, of course, I would add he was a killer psychopath and really, you know, not a good man. But the more important point is, yeah, the evil that we're doing is that we can go back to Shakespeare, but we won't. I think the real point, what you're saying, it's interesting, it's 91% in the Bay Area. What this says is companies are in the Bay Area to the point where the marginal advantage of being in the Bay Area is less than the marginal advantage of being in Europe and having access to a talent pool. What it says is the equilibrium point for indifference is now roughly at 90%, which is another way of saying, yeah, to a rounding error, it's, yeah, Bay Area wins, but there's still some wins in Europe. And I think actually trying to be a startup, stay recruiting and maintaining that team in The Bay is next to impossible unless you have an egregious amount of money. No doubt. Right? And I wasn't I was just curious as the last point what you thought of this from the week, right? I don't have an opinion on this. Certainly you can argue with the talent question, right? But it's just there's just a lot of complexity here as everything concentrates, right? Everything's concentrating in everything.

I don't think Jason just like the competitive funding landscape. I do not mean this arrogantly, but there is just one tenth of the competitive elements in Europe that there is. I I have so much respect for Silicon Valley early decision messes. God, it's fucking competitive. It is. And again, back to the equilibrium will be reestablished when the costs of being here are equivalent to the advantages. Look, I think really what happened is for a couple of years, and it gets back to Anthropic and everything like that, is that in that period when they just first cracked the code at OpenAI of what could be done, the closer you were to knowing what was happening, the bigger the advantage you had. And it was intrinsically a local thing. So I mean, you'll look back and go, ten years after 'twenty two, knowledge will be widely dispersed. But there was a period of two or three years where the knowledge was available tribally in hacker houses in San Francisco and wasn't available widely across the rest of the world. That's why you had this Cambrian explosion here It's a point in time, just like the start of the Internet.

Yeah, great companies in London. And just to be clear, I'm not a was it a psychopathic serial killer? Was that Yeah. I know you're not, Harry. I know you're not. Slightly mediocre moderator, but not a killer. Right? Yeah. Yeah. Yeah. I mean, Caesar killed a million goals. I mean, let's just keep score gratuitously. Quite as good as old pot, but, you know, up there. Up there in the baddie category. Yeah. Okay. Awesome, boys. Well done. But before we leave you today, let me tell you about Omni. It's an AI analytics platform, and it solves a problem every scaling company hits. Your team needs insights, not just data lookups, the stuff that really matters, and it's critical to get it right, like CAC payback periods and net dollar retention. For AI agents to act on your company data, they need your business context, your definitions, your logic, your permissions, and that's what Omni's governed context graph provides. Your data team defines it once, then anyone, your ops lead, your CFO, your PM, can ask a question in English and get an answer in seconds. Perplexity, Mercury, and DBT run on Omni, and 20 VC listeners get a free three week trial. Three week, very specific, not a month, but three weeks. Go to omni.co/20vc. That's omni.co/20vc. After omni helps you find the right customers, checkout helps you close them. Over the past fifteen years, Guillem Pozas has led checkout.com through what he calls the velocity years, a period of hyper growth with relentless product building. The lesson, high growth is a gift, but it demands ruthless focus. As his mother put it, play the game you're good at. For checkout.com, that game is digital payments, obsessing over data, chasing basis points, and compounding learnings over time. And that discipline is paying off. 2025, checkout.com processed over 300,000,000,000 in total volume, up 64% year over year, and returned to full year EBITDA profitability. They now support over a thousand enterprise merchants globally, including 63 that process more than 1,000,000,000 annually with brands like eBay, Vintage, Amex, ASOS, and TMU. KeyOM's message, though, it's pretty clear. They've earned the right to win anywhere. Now they're investing in innovation across marketplaces, issuing financial experiences and agentic commerce. If you want payments built for what's next, talk to the team at checkout.com. That's checkout.com. While checkout powers the moment money changes hands, invisible powers the people behind the work. Why don't we hear more real AI success stories from big companies? The models are insanely good, but implementation's the problem. It's really, really hard. There's data all over the place. There's legacy tech and manual workarounds. It's a Ferrari engine in a shopping cart. Meet Invisible. Invisible trains 80% of the top models and then adapts them to the messy reality of your business. Take the Charlotte Hornets NBA team. Invisible took years of game tape and analog scouting notes to go from uncertainty to a draft pick and summer league championship win in weeks, not seasons. Get the data in order first, and suddenly AI can do almost anything for you in the enterprise. If you want AI that hits the p and l, go to invisibletech.ai/20vc.