On Jan. 5, Sam Altman wrote, “We believe that, in 2025, we may see the first AI agents ‘join the workforce’ and materially change the output of companies.”
This week, I have seen products that convinced me that he was right. Interestingly, these demos weren’t from OpenAI, but other software companies with releases planned for the next few months. The reason these startups have got it to work is a narrowing of ambition. They don’t have an agent to do everything, merely to do a specific task within the software they already make. I’ll have much more on this in the weeks to come, but man, I wrote in 2022 that this change would happen, and my prediction has come true.
Today, I’ll give you some (hopefully) equally accurate predictions. But first, this edition is brought to you by the team at Vellum.
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MY RESEARCH
Founders deserve something better than typical venture capital. For the past decade, Silicon Valley has treated startups akin to foie gras. Just stuff as much capital into them as possible, then dump them on the public markets. That isn’t necessarily bad! But it is disappointing when it’s the only option. This week on the podcast, I interviewed Bryce Roberts, a venture capitalist who has created an alternative ideology and capital strategy by which startups can operate. That’s the professional pitch. The personal one is that I found this conversation deeply moving—Bryce’s candor about previous failures, his willingness to say dangerous things, and his belief in the future was invigorating. You can check it out on:
Since this is brand new, I would very much appreciate it if you could like and follow the show. It helps more than you can know!
Peptides are the next big consumer market. For the last month, I've been contacting Chinese manufacturers to see what grey-market peptides they'll import to me. It is CRAZY easy to get drugs to try out "for research." My best estimate is that over $500 million worth of these peptides are being sold in the U.S. annually (with it likely to increase going forward). It is illegal and dangerous to take these, but significantly, they are much cheaper than existing options. This new market has lots to teach us about consumer companies in general.
DATA YOU’LL DIG
The residents of Palo Alto shouldn’t decide what we get to see. In a now deleted tweet, Nikita Bier, X’s head of product, sent out this image in response to the Charlie Kirk assassination.
You don’t read this publication for politics, so I’ll skip that portion of the discussion. What we can agree on is that the internet-wide response to the shooting was madness. Unfiltered rage and emotion and vitriol, flying from every fingertip. After the news broke, I searched out Kirk’s name on Instagram and X, only to see blood and gore across every screen. It was horrible and also, completely unfiltered. There was essentially no content moderation.
Simultaneously, for commentators, this was an economic bonanza. If you were willing to opine, you could get serious attention and serious views. I saw everyone from an account I follow for pop music to technology writers jumping in because the algorithm was incentivizing them to. There are thousands of dollars to be made here for an enterprising and morally dubious writer.
All of that economic activity, and emotional malarky, is controlled by a dial controlled by Nikita Bier. What it would take to free us from social media is a subject for a much longer column, but I think it is worth pointing out that this one dude has too much power.
Does $10 billion in revenue justify a $300 billion cloud deal? The Wall Street Journal reported this week that OpenAI is going to purchase about $300 billion in cloud computing from Oracle over the next five years. This is remarkable because in FY2024, Oracle only did about $53 billion in revenue, while OpenAI has around $10 billion in annualized revenue run rate today. When you pair that with the news that OpenAI is telling investors that it is planning on burning roughly $115 billion from now through 2029, this is like two high school freshman who collectively weigh 130lbs looking forward to their debuts on the offensive line in the NFL.
It is worth noting just how big these numbers are. Compare that cashburn to the current GDP of Uruguay to give you a sense for it. It isn’t apples to apples, but it is helpful to think about in terms of geography. OpenAI wants to burn through 3 Uruguay’s worth of cash in the next 4 years.
Shoot, in the second quarter of this year, big tech’s capital expenditure (i.e. everyone building data centers to train models in), accounts for just under 50% of U.S. GDP. These are colossal numbers. Staggering numbers. The kind where you have to wonder if we are near the top. I’m definitely not calling it yet! But I’m struggling to balance out the products I saw this week versus the numbers being spent. It doesn’t quite even out yet in my mind.
TASTEMAKER
Honestly, I would recommend staying off social media and losing yourself in some pulpy, easy reading, listening, and watching this week. A few of my favorites:
The Will of the Many: A fantasy book that is my pick to become a modern classic. The sequel comes out in November, so if you start now, you’ll be ready! My favorite book from 2023.
Theft of Swords: A classic audiobook if that is your sort of thing. Two thieves with intriguing backstories get framed for the murder of a king. Pure, unadulterated escapism.
LA's Best Pizzeria Serves an 11-Course Pizza Omakase: This is a Korean dude living in America doing a Japanese style of an Italian dish. (Only in America.) He knows an incredible amount about pizza and his commitment to his craft is incredible.
Action Bronson—Tiny Desk: The flow is impeccable and the aura is visible. Bronson’s talents with wordplay and his easy confidence make this one of my all time favorite Tiny Desks. Track highlight is “Don’t Hurt Me Again” at 15:56.
Stay safe, hug your loved ones.
Evan
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