The Exchanges

Q Okay, so as we close out, there's one question I have to ask. This is a Brex question, because they're all about performance. Spending smarter, moving faster. I like to think that for personal performance, it's kind of who you surround yourself with. Some people say it's like the five closest people, like, who's either mentored you, who's a close friend, who's been inspiring. Who are those people for you?

A Yeah. I really put it in, like, three buckets. Um, uh, like, family, friends, and then, it's gonna sound so corny, but, like, really our investors. And, you know, on family, like, my wife's an entrepreneur, too. She's a founder, and that's been, like, a blessing. Uh, cause, you know, that, that, yeah, always able to, like, get advice from her and talk to her. Friends, you know, I've been able to, to meet, Um, over the last couple years, like, other founders that are in the same stage and phase, and, um, that, that's been amazing, and I think having, like, finding peers that you can just, like, be super open with and transparent with is super helpful, but then in, in terms of investors, like, we have an amazing group of investors that has really been along for the ride, you know, and I think about, like, Keith Block and Smith Point, That invested in our company at our, our Series C. Um, they're, you know, operators from Salesforce, they've started their own VC fund, and, like, they're just, you know, so, I think, like, Steve from Excel, Steve Laughlin, Rebecca from Insight, like, they're just always, um, uh, like, pushing the company and pushing me in, in, in great ways, and they're, they're amazing people, so that, I'm not even trying to, like, Be cheesy when I say,

AI assessment note: “I really put it in, like, three buckets. Um, uh, like, family, friends, and”

Q I mean, so on this topic, Christian Garrett, I asked him for some questions. One 37. They're big fans. They talked about you in their interview we just did with them, um, with Justin Fishner-Wolson. Um, they're great. So Christian, Christian asks, why do enterprises want third party providers or open source and won't solely rely on the labs, thus their coding tools?

A Yeah. Yeah. I mean, I think several reasons. Um, I think first of all, uh, Obviously, the way enterprises work is they want to have long-term partnerships, and frankly, it's just hard to know what's going to happen in the long term, right? Like, who, who even is going to have the best model in six months, or 12 months, or, or whatever, and, and I mean, I think that's very reasonable, you know, like, you don't want to teach all of your engineers, or your entire team, how to use one particular suite, and one particular product, and then find out, oh, actually, it's Turns out people aren't using this one anymore because everyone says this other one is better or something, right? Um, but I think the other reason that it's important, too, is because, as we said, you know, I think for every company or for every team, like, what they care about is, is not how many tokens they're using, it's how much value they're driving, right? And I think it's very important for there to be, um, a, a player that is going and helping them drive all that value and, like, turning that into reality, right? And I, I think in practice it's, um, You know, how, how you organize your teams, how you think about planning, how you think about specs or design, how you do user research. All of these things should be different in the era of AI, right? It's not as simple as like, you know, Throw the tool over the w…

AI assessment note: “who even is going to have the best model in six months”

Q So as the head of global tech for BlackRock, what, what brings you here? How did you get involved with Raise?

A So I got involved last year. One of my companies I was involved with, uh, SambaNova, Lipu was supposed to be one of the speakers, um, and, uh, he couldn't make it, so I decided to fill in for that, and, um, and then I, you know, I, I saw Ray's, um, this thing in Paris at the Louvre, and I was like, oh, this is interesting. It's, uh, it was the second year of Development that, uh, Henri, uh, had kind of pioneered and built this, uh, this event. Um, I saw something there. I saw a lot of my, uh, my colleagues and friends from San Francisco all congregating here in Paris, and, uh, I said, well, I'd like to, uh, uh, help foster this, uh, get it going, and so last year I, I was here, um, and then this year, uh, it's, I don't know, probably tripled again in size. It seems to be Europe's biggest or most targeted, uh, AI conference. So, uh, yeah, so I continue to, uh, to help and, uh, do what I can to help build an AI presence for, uh, in Europe.

AI assessment note: “So I got involved last year. One of my companies I was involved with”

Q So between all of the panels that you're doing, you're doing four panels. What are the through lines and the macro themes?

A Through lines, macro themes. Okay. Well, I, I think one, one of the big ideas, obviously, clearly is, um, and we see that in the stock market, and we see it in the investment market, is that, uh, the primacy of compute, and how the, actually, you're seeing it already, the, how much the stock market And the capitalization, uh, in Silicon Valley has changed. And, um, we went from a, let's call it a, uh, A software-centric world to a compute-centric world. And, and, and you're, and you're seeing the emergence of companies, um, so that's number one, this, this move to compute. And, you know, to me, in my opinion, you know, the models and the compute are kind of like, are symbiotic and, and, uh, synonymous with each other. So, the primacy of compute. Within that, secondly, Is, um, since now that is the dominant, uh, theme, it is a dominant, where the capex, where the money, where the capitalization is all gone, it then, uh, engenders a whole rethink of the data center. And, uh, so I think there is a redesign of the data center, and we're going through stages of the data center rebuild. And so we had, think of data centers pre-AI, Kind of like the scramble to build data centers today where there's a massive shortage of compute. But on the other hand then, you know, we're hitting the laws of physics are, are, are driving a yet another transformation of data center design going forward…

AI assessment note: “one of the big ideas... is that, uh, the primacy of compute”

Q So for people who are not familiar with MongoDB, which I'd be very, very surprised, how is, what is your differentiation between the likes of Snowflake and Databricks and the other people out there?

A So MongoDB is a operational database or a real-time database. So credit card transactions or anything real-time, that's what we do. The category is called Online Transaction Processing or OLTP. But we are a document database, modern database that was created in 2007, so we are 19 years old. Database industry Molly has existed for 60 plus years, ok? And regardless of the internet era, mobile era, after iPhone, now the AI era, you always need a data layer. So if you want real-time data layer or online data layer, That's MongoDB and some other databases. If you want analytical data layer, where you can ask a question, a business analyst internally will ask a question, for those kind of use cases, you use those other companies, ah, databases, ah, they are called online analytical processing, so they are not real time, and we are real time.

AI assessment note: “for those kind of use cases, you use those other companies... they are not real time”

Q So what's going on at Glean? What's hot right now?

A What Lean has actually, we're finding ourselves in the midst of very, very good timing. So when you think about AI, making it work in the enterprise, the two big things are context. Like how do you bring, you know, like all these agents that you want to automate the work that humans do, like they need that context, that data, that information that humans use to do the same work. Uh, and that's actually like something that we are really, really good at. So being the leader in context crafts is actually helping Create a massive demand for, for Glean. And then the second big trend in the industry is people keep complaining about, like they can't measure the return on investment. Where is the business value coming from? And so Glean comes in handy on that front, at least from a bottom line perspective, because we do really, really good in terms of helping a customer reduce their token usage, ah, in two different ways. One, we can pick the right model since we work with all the closed domain and open source models. We can pick the right model for the right task, which is, um, cheaper for them, but still gets the work done. And second, with our context graph, we can actually, when a model is trying to do some complex work, it doesn't have to spend, like, all this time just trying to assemble the raw materials to do that work. You know, with Glean, they get that context in one shot, s…

AI assessment note: “being the leader in context crafts is actually helping Create a massive demand”

Q Speaking to that and raise, what are you most excited about with raise this year?

A Yeah. I mean, I think the lineup of speakers is amazing. That cuts across like the compute layer, infrastructure layer, app layer. There's investors, there's venture investors, uh, public equities investors. And so to me, to be able to have all these people in one place, to be able to talk about these questions that I'm asking around open source frontier models, uh, sovereign AI, um, the power constraints, grid bottlenecks, like you, I, that's what I focus on all day, every day with my colleagues at Cotu, but it's really, really damn fun to get to talk about it with, with founders, operators, entrepreneurs, and, and hear what they're thinking on these same topics. So. Having all these people in the same place is what I'm most excited for.

AI assessment note: “Having all these people in the same place is what I'm most excited for.”

Q So we have a very difficult question for you today. What is your hottest take?

A My hottest take is that in the next 12 months, 90% of tokens will be going to open models. Um, now, not all the tokens, and maybe not the most important tokens, but I think, uh, you know, big token has been spewing some propaganda against Chinese models, which is, you know, how they're labeling the open models, um, and I think in fact these open models are incredibly performant, incredibly cheap, incredibly fast, And there is going to be an important use for them in kind of the portfolio of models. I think still the frontier clothes models will have a place, but I think that place will be shrinking at least in token share. Maybe not in cost, but in token share.

AI assessment note: “My hottest take is that in the next 12 months, 90% of tokens”

Q This is not investment advice, but why are you so bullish?

A Uh, I'm not, like, regulated by anybody, so I'm gonna tell people, just buy this SpaceX stock. Like, I think it's a great stock to buy. Um, no, but it's, it's mainly because, so, space, not just because of orbital data centers, which we're doing, which lots of other people are doing, they own what will be by far the most cost-effective launch vehicle, and then that opens up every industry in space that will be possible beyond that. So that's all of asteroid mining, lunar resource mining, all of, um, all of the comms businesses that are gonna be built. Everything else is gonna have to go through SpaceX. Yeah, it's like owning the railroads. Lots of businesses will be built on top of it, like our business will be built on top of it, but the railroads are a great business to own, for sure. Yeah.

AI assessment note: “they own what will be by far the most cost-effective launch vehicle”

Q How did you make the decision to go to Broadcom to SpaceX?

A Broadcom to SpaceX. So Broadcom to SpaceX was a pretty simple one. The company had gotten big enough that it wasn't really innovating anymore. It was kind of just operating and I get bored in those situations. I'm not really a true, just run the system about continuously improving the system. And the CFO at Broadcom was at SpaceX was an ex-Broadcomer that I knew. He invited me up one day to just do a tour of the factory. I wasn't looking for a job, but he invited me up. I did this tour of the factory, which is In Hawthorne, downtown LA-ish, and here they are building big metal objects. It's supposedly cheaper than anyone else in the world in downtown LA, and I'm like, well, this is crazy, but I have manufacturing in my blood. My entire career has been in manufacturing. I'm like, this is a pretty interesting place. I have no idea who they are. I don't know what they do for a living because SpaceX wasn't a name back in those days, and they're an hour at least away from where I live. So he offered me a job, and I'm like, I don't know. I don't want to drive an hour up to this place, but It was such an interesting story that Elon was going to save humanity from itself by colonizing another planet, because we're going to screw this one up, and we need to keep humankind going. And it was another scaling opportunity, so I thought about it, talked to my wife, and in the end decided to b…

AI assessment note: “So Broadcom to SpaceX was a pretty simple one. The company had gotten big enough”

Q What was the day to day like? I just can't even imagine.

A They started at five o'clock in the morning, driving up to Hawthorne, trying to miss the crowd, getting in by six, and then working with all the various groups in the organization to define how they were operating and making sure we were not only collecting the information, but we were presenting like The design changes they were making up front and their impact on operations and making it very apparent very early what was going on so that you didn't get to a certain point and go, like, that design change just cost us five million dollars to implement. They knew as it was going through, so it was a very tightly coupled system that kept everyone working together and then just trying to scale the business. And Elon had hired me because they had a visual, a purchased application he wanted to build. The digital nervous system for the 21st century rocket company, and I'm like, I started that way at AT&T early, early in my career building, because no purchase software existed. And the opportunity to build it again, I'm like, this is either the smartest thing or the stupidest thing we've ever done, and I have no idea right now whether this is smart or stupid. And I'd say for the first two years, I didn't think it was such a smart idea. By year three, when we really had the software working well and the company was really using, and I'm like, this man is a genius. He figured out what w…

AI assessment note: “They started at five o'clock in the morning, driving up to Hawthorne”

Q What do you think the key components of Elon's magic is?

A Number one is first principles thinking eliminate before automation is clear to what he's saying and, uh, remove before automate is an activity and then just holding people really accountable. Accountable and driving them. The whole concept of a responsible engineer is what I learned there, and that person owned that part from first requirements all the way through to post-flight. There were no handoffs. There's no finger pointing. Either you got it done or you are no longer employed, and like that kind of accountability and that everyone else is serving you getting your part through the process really created ownership. Like, and the people there worked 10:12 hours a day, and didn't think about it. Like, it wasn't like we were required. It's just like, you're looking around at seven o'clock at night, and like, nobody's left yet. Like, I'm not gonna leave yet. I need to still finish the thing I'm working on. And so, long hours, but really committed to the mission, and Elon was really good about keeping the mission as a forefront focus for what we were doing, and just kind of energized everyone to get it done.

AI assessment note: “Number one is first principles thinking eliminate before automation is clear to what he's saying”

Q Okay. Wow. And so what lesson do you learn from that as a CEO? Like what is in your mind?

A I think a couple of things. I think to, to do the job that I love to build. I think, uh, making money is really great and making money for people you care about is really, really great. And when you get a chance to deliver for people who bet on you, who, who bet chunks of their career, right? Your investors, it's great to deliver for them. They bet on you, but they're diversified. They bet on you and 20 other companies. When someone bets five or seven years of their career and a career is 30 years, Right. They're making a sixth of their professional career. And when you get to deliver for them and, and, uh, they get to, to achieve the financial goals that they wanted. That's a great feeling and I'm proud of every day.

AI assessment note: “making money for people you care about is really, really great”

Q runs on Brex, so I can spend time on building and not busy work. It's time to get Brex AF. Learn more at brex.com slash sorcery. That's B-R-E-X dot com slash S-O-U-R-C-E-R-Y. Bye. So looking forward, I'm sure this is also just a mark in your journey because you're a builder. So what are you most looking forward to over the next couple months as we said across this year?

A Look, getting to an IPO is, is not the, the, the end of a journey. It's sort of a plateau. It's sort of the arrival at corporate adulthood. It is the achieving what one plateau so that you can climb others. And our opportunity has gotten bigger. We have more resources. We have, uh, we're better recognized. Uh, we can reach more people. Um, and we can sort of prosecute our vision and our, our ambitions, uh, with more fuel. And so that, that, that's what we're excited about every day. You know, building more chips, building more data centers, inventing technology that, that, that moves the industry forward. Um, that's what, what drives us and gets us out of bed every day.

AI assessment note: “building more chips, building more data centers, inventing technology that moves the industry forward”

Q What do you think that the biggest misconception with that process is and the challenges are?

A Well, I, I think that the misconception is that it's easy and all you need to do is get in a room and, um, it's a, uh, it's a very hard problem. Um, you know, the, the, the software guys think one way. The hardware guys think a slightly different way. Um, you know, anything you do to make it easier to, to, To, to write the software makes it harder to do the hardware, right? And these are really hard trade-offs, and so bringing them together, um, and means these sort of compromises where it will be harder here to make it easier here. And that means somebody's schedule is going to be impacted. Somebody's got to add resources. Um, those discussions are enormously difficult.

AI assessment note: “the misconception is that it's easy and all you need to do is get in a room”

Q As we look forward, I guess more on the macro lens, the proliferation of AI and everything that we're be able, we're able to now create and build and do. What are you excited about on the externalities that come with all of this?

A Look, I, I think, um, that we have a chance for our children or the next generation, not only to not die from cancer, but to not know anybody who died from cancer. I think that is a, a real, uh, achievable goal in 25 years. Wouldn't that be something? Um, you know, when we think about what AI can do, uh, writing better code is cool. And there's a huge market for that. But I, I think what, what it can do to better humanity is rid us of the number one killer of, of adults. And, um, I think, you know, that, that's when, when I think of what we're all doing this for, it's an outcome like that. You know, pancreatic cancer had a huge breakthrough recently. I, I think they're, uh, the opportunity for, for breakthroughs right now is, It has never been better, and AI is a, an extraordinary tool in, in pursuit of, of, of knocking down, um, major, major human killers, right? I mean, if you think, if you, if you took out cancer and you took out automobile accidents, you're taking out huge numbers of deaths a year. Um, and you say to yourself, well, that's a lot of good. That we did. And I, I think, you know, self-driving, humans are terrible drivers.

AI assessment note: “we have a chance for our children or the next generation, not only to not die from cancer”

Q All right. Excel is more of a silent partner than some of the flashier names, even on this road or down the block. Um, so I'm really curious from your standpoint, how are you winning these deals against like the flurry of marketing and blah, blah, blah, and hype that's going on in here?

A I mean, I think, first of all, we approach it with humility. Like this is a very humbling job in ecosystem. There are a lot of talented investors out there, and we have a lot of professional respect for our peers. With that said, I think our style has always just been a little bit to stand behind our founders. And really the equation is very simple. If we do good work over time, that will be reflected in results and returns. And if we're good humans and good partners and pleasant to work with and good backers of our founders, They'll say nice things about us over time. So I think that shows up in scenarios where, for example, When we were able to, um, work with Michael Trull in Cursor, you know, we were, like, really humbled to get the opportunity because it was a pretty competitive situation.

AI assessment note: “our style has always just been a little bit to stand behind our founders”

Q So are you saying it's disorienting for making net new investments or also understanding current portfolio companies and how they're growing and scaling in different ways marginally and like business model wise?

A Definitely both. I think, um, Thankfully, again, at benchmark, the main thing we do well is partner with entrepreneurs extremely early. Um, and by doing that, um, you don't have to worry quite as much about a lot of these questions. Cause again, a lot of these questions, um, have to do with like, well, what is the multiple that the company is going to be worth when it, you know, IPOs or is sold to a company? Um, you know, how are they going to use capital effectively, um, at scale? Um, but when you're backing an entrepreneur at inception at 50 post, um, You, you like, if you're having to answer those questions, uh, you sort of already done your job. You know, like the, the company has already gotten to a scale and, and like a level of, um, yeah, just a level of like raw scale and maturity that, um, you're probably looking pretty good. And I think that's, um, the case for, for a lot of the companies, um, in, in our portfolio that, that, that are relevant for this conversation. Um, but I think, you know, as they mature, uh, and as we just think about like, well, what categories now going forward, are there going to be, Um, are there going to be really big profit pools to go after? It is something that we, we care about, but, um, I think the benefit that we have is that, like, great founders are always in style. Um, whereas, like, these business models can go in and out of style, …

AI assessment note: “Definitely both. I think, um, Thankfully, again, at benchmark”

Q Anthropic was like last rumored and reported around forty five billion, and now people are speculating around sixty billion. Both are trying to go public, but the same as SpaceX and XAI. What happens once those models become efficient, right? Like what, what do you think is going to happen to the scale? Do you think it's going to continue? Continue. Do you think, what do you think's gonna happen?

A Yeah. Yeah, it's, I mean, it's, it's, um, it's the one trillion dollar question. Or the multi-trillion dollar question, um, if, if you kind of combine SpaceX AI, um, OpenAI and Anthropic onto that equation. Um, and, and I, I think it's, it's left, um, like, like it depends on, it depends on what the next, you know, 12 to many years look like. And what I mean by that is like, you know, do you believe that we're on a path to recursive self-improvement and this, you know, future of a bunch of geniuses in a data center? Um, Whereas if you do have a bunch of geniuses in a data center, um, if, like, if the frontier goes that high, then you legitimately do have probably a lot of pricing power and, and a lot of ability to continue to grow and continue to monetize and probably even re-accelerate growth if you're a frontier lab. On the other hand, if, if, like, at any point it seems like, you know, capabilities are actually hitting an absolute ceiling, um, and distillation continues as it has historically, And the open source actually gets, you know, 95% as good as wherever the ceiling of capabilities tops out. Um, that's a really scary situation for the, for the frontier labs. I don't think it's like a death knell for them because, you know, it's like, again, like most of the users of ChatGPT would use ChatGPT whether or not it was a GPT model in there or not. Like they like the product…

AI assessment note: “if the frontier goes that high, then you legitimately do have probably a lot of pricing power”

Q I guess, like, taking a step back, what is the broader vision of all these products, and what are you, what is the goal you're building towards?

A Well, the mission of the company is to increase economic freedom in the world, and so, you know, we, we believe that it's important for everybody to have access to good financial services, to have sovereignty of money, like, to have sound money that can't be eroded via inflation, for people to raise money to start a company, or to get a loan, or to make payments all over the world. We want to democratize access, bring down the fees, reduce the friction, and that's how we're going to unlock a lot of prosperity in the economy, and frankly, like for civilizational progress. There's a lot of good research out there on economic freedom and the different countries of the world, and the highest economic freedom countries, it's positively correlated with all kinds of things, not just like higher GDP per capita, it's also correlated with better, like higher happiness, better treatment of the environment, Uh, the poorest 10, 10% of people in those societies are much better off, and it actually is correlated with, believe it or not, like, reduced, uh, corruption, reduced war, um, reduced infant mortality, like, all kinds of things, and so we believe that economic freedom is a foundational, uh, necessity for all civilizational progress, and crypto is this unique technology which can actually update lots of financial services and create more economic freedom in the world.

AI assessment note: “the mission of the company is to increase economic freedom in the world”

Q Do you think the average American or average person thinks that they're economically free? And if not, why?

A I think in the US, um, so it's, it's a tale of two cities. Like on the one hand, the US is one of the more economically free countries in the world. Like people generally trust the dollar. They trust that, um, the government's not going to just come take money out of their bank account without their permission. We, we have, you know, part of what like gave me the appreciation for this, uh, when I was first starting Coinbase is that I had actually spent a year living in Argentina, right? And I saw that country go, go through hyperinflation. And it was just like a, like a basically a hundred year history of the government kind of stealing wealth from people in various ways. And so you have to remember, if you've only grown, people have only spent time in the US, there's many countries in the world where we, we sort of take these things for granted in the US. That is not the normal state of the world for most people in the world. But even in the United States, I would say our financial system is, needs an update, a massive update, because if you survey Americans, something like 80, I think 83% of them say that the financial system is not currently working for them, and they say the fees are too high, You know, overdraft fees and, uh, these kind of like, and then they say there's, there's delays. It's hard to move money. They say that there's unequal access. I mean, there's lots of…

AI assessment note: “83% of them say that the financial system is not currently working for them”

Q crushes. Like, I think I tweeted this out months ago, because you guys did the Super Bowl ad, which was super fun, and then you did the earnings calls, which had like the subway racer kind of things, which were really fun. So, how would you take What AI is, is kind of branded as today, and like, how, what would you change about that and the storytelling around it?

A One thing I kind of learned over time was like, don't apologize for what you're doing, right? It's like, have a, have an opinion about the world, how, and how you're improving it, and what you want to see the future, and there's going to be lots of people out there with their own agendas, they're going to try to build their own status by trying to tear you down. I think the AI companies, um, They've been a little bit, Like, first, there's too much fear mongering, right? Like, this is going to take everyone's jobs, and you should come regulate us, and I, I don't think that's helpful or necessary. Um, and then I think that, you know, if I were in their shoes, I would just be a little bit more unapologetic about it. Like, look, we're building this because we think it's going to be an incredible benefit to humanity, and everyone can have their own, um, AI tutor. Like, you can have a good mentor, you can have a therapist, you can have a better doctor, like, you know, and it's, For anybody sitting there saying that, um, well, you know, this, I already have a great doctor. I would never use an AI. It's like, well, that's, you're sitting there from a position of privilege. Like, many people in the world don't have the best access to the best doctors of the world, and, like, these AI agents are going to create a world of abundance, and so we're going forward, and, you know, if you don't…

AI assessment note: “if I were in their shoes, I would just be a little bit more unapologetic”

Q time and time again, and there is a humbling moment that occurs with this. Your idea has existed before, And maybe it's the execution, maybe it's the timing, but there is something to that. And so how do you advise companies, founders, how have you done this in the past of pushing through ideas and experimentation and just trying more and then just getting rid of the old ones fast?

A Well, it's a perfect lead-in to my framework, Proven Better New. I like to say that we should be like scientists with white lab coats, and there's so many paradoxes in this that we want to follow our passions and emotions, and we want to go innovate, and then I'm telling you, okay, to be really successful at that, you have to be dispassionate about your ideas, you need to feel no attachment or connection to your ideas, have a white lab coat, and just Do science experiments, right? Which doesn't sound fun. So these are paradoxes that pull in different directions, but I also think that they keep us in bounds. And I think that if you can use a framework like proven better new or invent your own or steal it and make it better, I think you will massively increase your odds of success and you will decrease the odds at least that you waste so much time on B pluses that And so what I'd say is this. The idea of proven better new is you have this instinct, and you have an idea. Ok, great. Let's now deconstruct what it is that you want to do. And I use games, they're a perfect example because there's so many mechanics that make up a game, but that's the same as features or the pixels that make up this exact experience. I Try to get people to do as an exercise is to say, okay, let's really look at what it is you're trying to do and look out in the world first at where has someone done this…

AI assessment note: “Well, it's a perfect lead-in to my framework, Proven Better New.”

Q How big of a difference did it make on the business or at least the experience when you guys got Starlink?

A A huge difference. We, we've been operating Starlink from basically the moment that they came out. We started off with the Starlink minis, and then eventually when they got the full certification, we installed the full certification right away. Um, but, uh, uh, it is a, the only, the only way to describe it is a game changer. Like, people today won't fly if you don't have Starlink. They won't get on the plane. To be able to continue what you're doing, like, if you're having Zoom calls, just be able to have that continuity. You know, these other, the other, the other systems out there, like, they're, they have good Connectivity when you're in the U.S., but they kept, they have lags. They work, and they stop working, they work, they stop working. Starlink is just, like, an absolute game changer, and all of our aircraft have Starlink, and I think there's a, a dish right there.

AI assessment note: “A huge difference. We, we've been operating Starlink from basically the moment that they came out.”

Q Okay. Alright, so we're now here in San Francisco. We flew all the way from LA, and I have Izzy with me and Captain Roz. Okay, so Captain Roz was kind enough to fly us. Captain, how did you get your pilot's license?

A Um, I started flying in the Air Force. Um, started in the Flight Academy. Got most of my training there, and then I, uh, went to a different role in the Air Force, but I always knew I want to be a pilot, so, uh, finishing the military service, I went straight to flight school, got my civilian licenses, started as a private pilot. That's where everybody starts. It was just for fun back then. Um, And then eventually I decided to make this a career. So I went back to flight school, professional training, and, uh, I made it to, to here, um, anybody's dream job really. And, um, it's the best office view I can ask for. And that's really the reason why I like doing it. Every time I'm in the air, it's like meditation for me.

AI assessment note: “finishing the military service, I went straight to flight school, got my civilian licenses”

Q Benchmarking makes things a lot more competitive and people love that. I mean, AI is like the most competitive world ever right now. And so I'm really curious on that standpoint, like, how are you then like, where does this, where does this lead to next?

A Yeah. So, so I think the interesting thing and kind of to your point is, okay, we released this benchmark and now we're going to have all of the labs and everyone else building models competing on it. And I think there's obviously some risk of, oh, what if some lab providers models are the best, then like, why do they need Harvey to do this is, is maybe one of the potential risks. But what we've seen is actually every different model is good at something different. And so with the initial results we saw, Anthropics models are quite strong, but there's areas where a 5.5 is better. There's some areas where open source is better. And increasingly, it's not just which model is the best. It's which model can solve the task at the lowest price point, because as these models get better, there's kind of intelligent saturation where it's like, okay, for some simple tasks, I actually want to know that this open source model is good enough. And so a lot of the value that we're trying to provide to law firms is You can't just use one model to solve all these tasks because it's getting too expensive. So how do you think about all the tasks that your law firm does and which model you should use from which provider to solve those tasks?

AI assessment note: “increasingly, it's not just which model is the best. It's which model can solve”

Q What do you think the biggest question is people are not asking?

A I feel like the, probably the big, like, misconception right now is I don't think people realize how expensive this is going to get, and I don't think people realize how difficult it is going to be for customers to deal with that. Like, I think when I talk with most people, they think, oh, just move to consumption pricing and that will solve all the problems, but I think there's going to be this very interesting Dynamic where there's kind of a couple ways to price these things. And I think most VCs, what they want to see is like, can you price the work, right? Like, can you sell the value of the work you're selling? Uh, and then the, like, that's one end of the extreme, and then the other end extreme is just like price by tokens. And I think the problem you run into of pricing the work is actually the same problem that law firms run into when they try to do fixed fee pricing. Right? They're trying to say, hey, here's the fixed rate of this cost. And I think there's going to be this great irony where when we started the company, one of the questions we got asked the most was, you know, what's going to happen with the billable hour? And I think most people's assumption is just, oh, everything's going to move to fixed fee, so then these law firms can protect their margins. And I think something people don't appreciate about the billable hour and why it's such a good mechanism is, …

AI assessment note: “I don't think people realize how expensive this is going to get”

Q How do you figure out which cities to go into first? Is it like you have your customers and then you build around them?

A Yeah, so it's actually, um, yeah, so we did it first based off of just like reacting to like big customers, so like we'll sign like Deutsche Telekom and it's like, oh wow, we need an office in Germany, right? Things like that. Um, there's actually something really interesting That we had a problem of in the beginning, which is because we process sensitive data, a lot of the countries we actually needed like an Azure instance in each one, right? So like in Australia, you can't process financial data outside of the country. And so we had, we would set up these offices and then we'd set up like Azure instances too. Um, and it was almost like we set up an Azure instance and then that would be like a pretty good indicator that we'd have to set up an office pretty soon afterwards, just because like customer demand.

AI assessment note: “we did it first based off of just like reacting to like big customers”

Q And you've raised over a billion dollars now, so have you used most of that capital? Where is, are you using it on tokens? Like, what is the office?

A Yeah, now we're using it on tokens. Now we're using it on tokens. Um, no, we actually, we haven't used a lot of that money. Um, I think, like, the, the interesting thing that we always wanted to do was actually do a lot of post-training on the models, and there's a couple problems in legal that makes us, like, really hard. One is the data isn't available. So like, if you went online, you're like, I want to go find a bunch of documents that are related to like a random fund formation by Blackstone. They don't, they don't exist. Like you'd have to go to Blackstone for those documents, right? Um, but the thing that happened with like the last generation of coding models is you can actually take sets of documents and create synthetic docs that are so good that the lawyers can't tell the difference between whether they're created, you know, by an actual lawyer or they're created by the coding models. And so with that, we've now actually created basically like a pipeline for creating synthetic data sets across like every single legal use case. And because we have that now, now you can start actually plus training models, and that's gonna be expensive.

AI assessment note: “no, we actually, we haven't used a lot of that money.”

Q of how fast you're growing the company, I don't know, maybe you still have a billion dollars in the bank. How are you thinking about buying, or sorry, building out The company itself or buying. There's like a, now there's like an onslaught of M&A within all these AI companies and buying up smaller startups for talent and all this kind of increased competition. How are you thinking about that?

A Yeah, devalue, um, like higher value on team and lower value on what they've built in terms of like, I do not believe that it is a good idea right now to go around and buy legacy technology. Like, I don't. I think it is a much better idea to buy, like, really, really good teams, regardless of if they worked in your space. Doesn't matter, right? Um, and so that's, like, if you look at the aqua hires that we have done, they actually haven't been in the legal AI space or, like, legal tech. They've been outside of it, but they're really, really good teams that could work on a problem that we have, right? Um, and that doesn't mean that I won't do legal tech Acquisitions in the future. But I do think that right now, if you are making an acquisition, like, the number one thing you should be looking at is just talent. Because you can build things so much faster now, right? That it should literally just be talent. Like, are you buying a team that is really, really good, and are they going to align with your cultures? Because the other problem is, like, we're not even four years old. If we go and absorb a bunch of teams, like, our culture is still being built.

AI assessment note: “I think it is a much better idea to buy, like, really, really good teams”