121 – Medicaid Cuts, AI Takeovers, and the Healthcare Power Struggle

[00:00:00] Marcus: If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. 

[00:00:07] Vic: All right. How you doing? I'm good. Warmed up here a little bit in Nashville. So I mean, my mood's affected by sun and warmth. So I've been in, it's been a good week.

[00:00:17] Vic: Yeah. I think you and most of us, 

[00:00:18] Marcus: man. Yeah. The weather's been awesome. I was walking around yesterday in a t shirt and so happy about that. Uh, yeah. And, and it feels like things out of DC are. Slowing down a little bit. They're not really taking a U turn. Um, you know, the. The general sentiment is still job cuts, budget cuts, um, doge, you know, but not fast and furious with the like executive orders and net new news.

[00:00:47] Marcus: It's starting to slow down a little bit, and maybe they're actually doing the work that they spent the first. Two to three weeks there. Yeah. Talking about, yeah. Yeah. 

[00:00:57] Vic: I think that's right. 

[00:00:58] Marcus: Yeah. Which is, which [00:01:00] is kind of nice on the psyche, quite frankly. 'cause Yeah. You know, ww whether you're forward, the, I 

[00:01:03] Vic: just whiplash, that's everything is 

[00:01:05] Marcus: all 

[00:01:06] Vic: new.

[00:01:06] Vic: Yeah, 

[00:01:06] Marcus: that's exactly right. Like, it doesn't matter if you're forward or you're against it, it's, it's a tremendous amount of change coming very, very quickly. Right, right. So, um, yeah, so I, I don't know, things feel like we're moving in the spring, we're getting out of the. Yeah, we're back in the studio. 

[00:01:23] Vic: We're back to, yeah, no travel.

[00:01:26] Vic: Yeah. Yeah. 

[00:01:27] Marcus: It's nice. It's nice. And, uh, we're prepping for our, our annual summit in about a month, which is, which is really, uh, going to be exciting and, and, uh, we'll have our LPs from across our funds, um, at that event. So that'll be great. Uh, 

[00:01:43] Vic: yeah, we're going to 

[00:01:44] Marcus: record a show there too. Yeah. 

[00:01:46] Vic: Yeah. Yeah. Yeah.

[00:01:47] Vic: We're not going to say listeners. Our listeners will get to get to at least, uh, Here a little bit for the live audience and everything. 

[00:01:53] Marcus: Exactly. Exactly. They'll be some great sessions and we're gonna do a show there and we'll have a great guest for that show lined up already. [00:02:00] So, uh, yeah, I don't know.

[00:02:01] Marcus: Nothing else to talk about. We should just get to it. Yeah. All right, let's dig in.

[00:02:15] Marcus: We're skipping the economy this week just because there was nothing Of substance to talk about there were a couple of like articles that were about the sentiment and the vibe, but that's not worth covering. 

[00:02:24] Vic: I think that's right. It was just a lot of policy, a lot of other activity, but the economy is kind of bumping along.

[00:02:31] Vic: It's not super great, but it's not terrible. It's just kind of going along. I mean, 

[00:02:34] Marcus: at the time of this recording right now, it's, you know, the streets are red on, you know, in terms of like all the different markets are down. The VIX is up, I think 20 percent right now. 

[00:02:43] Vic: Yeah. So 

[00:02:44] Marcus: the 

[00:02:44] Vic: yield curve inverted in a couple.

[00:02:47] Vic: Different time differences, but not all the way. It's just kind of like yellow lights. 

[00:02:51] Marcus: Yeah. Yeah And people were talking about that last week the the yen carry trade Being something that we need to watch out for maybe having a repeat of what we had with the nikkei [00:03:00] Um, yeah, I think that's for march that exactly.

[00:03:06] Marcus: Yeah, exactly All right. So let's start with vc there. There's a fair number of uh, big deals, uh that happened the first one company called camber But previously was called juniper raised 30 million dollars for medical claims automation. 

[00:03:18] Vic: Yeah, and um Uh, Andreessen Horowitz, big VC firm, led the deal.

[00:03:24] Vic: They're expanding in geography and specialty. So they're moving, I think they were behavioral health, and now they're moving to home health and long term care, substance abuse, so adjacent to behavioral health, but new markets. Um, so, good. I mean, I think a good, good space. 

[00:03:43] Marcus: One, one thing that I thought was notable was that Y Combinator joined their series B and I know that Y Com has a later fund, um, but I rarely see their name attached to a series B.

[00:03:57] Marcus: So I just thought that was interesting. 

[00:03:58] Vic: Yeah, especially [00:04:00] when they didn't launch the company. I thought their fund was more for their companies. Kind of an opportunity fund, right? 

[00:04:07] Marcus: Yeah, so that's that's interesting and probably something to take note of and watch for Y Combinator's evolution. Yeah, maybe beyond just doing their early stage course 

[00:04:18] Vic: and into health care.

[00:04:19] Vic: I mean, they haven't been a huge health care. They do a little bit of health care a year, but. If they get in more into health care, that'll be interesting. 

[00:04:24] Marcus: Yeah. I think AI turns them on about health care, right? Because all the other labor intensive things, not, not in there, not in their wheelhouse charter health secures 8.

[00:04:33] Marcus: 1 million after turning cold emails into profit in just 60 days. 

[00:04:38] Vic: Yeah. So the two founders built and sold a company, uh, in AI, they sold it to open, open AI. And then they sort of decided to look into healthcare. But unlike a lot of Silicon Valley founders that just kind of turn on an AI computer and start doing healthcare things, they actually got, [00:05:00] um, you know, credentialed and got trained in medical coding as actually a human coder and went through that process.

[00:05:08] Vic: It's tight. Uh, A lot of healthcare professionals, and then they use that experience to, to build a coding fantastic capital 

[00:05:16] Marcus: is lucky to be, uh, investing in them, uh, 8. 1 million seed round led by Bain. And yes, I mean, I think one of the things I've learned over the course of the last five years is how important subject matter expertise is in the founder.

[00:05:31] Marcus: Yeah. Um, sometimes they. See an opportunity, but they don't understand intricacies of, um, where the pitfalls really lie. And the, you know, the fundamental difference is did you work in the space or not actually, you know, and so these guys are really smart and look, I actually think this is a really interesting path cause I, I've, I've heard a different company, uh, that actually came from the middle East and, and has now become stateside and they did the same thing.

[00:05:56] Marcus: I, so when I first heard the story, I thought it was them and I looked at the Congress and I'm like, no, no, no, this is [00:06:00] not the same company. Um, but. You know, this idea of going and working in health care. Here's the thing. It's not that hard to get certified to become part of the health care workforce. And then you do it for a year, and now you're a subject matter expert.

[00:06:14] Marcus: I mean, it doesn't take that long. 

[00:06:15] Vic: And you see all of the, let's call them friction points. But you know them in a much more, like, uh, visceral way than just, like, looking at a website. Exactly. 

[00:06:26] Marcus: And probably after, like, your first four to five months of, you know, training, getting your certification and starting a job, You probably can start the side hustle in like five months, you know, and be coding at night while you're working during the day or whatever.

[00:06:38] Marcus: So it's, it's a really smart model here. And again, congrats to Bain for being able to get into that deal. Evandra lands 17. 5 million to build out Federated Imaging Network. 

[00:06:51] Vic: I think we all believe that Imaging is going to be one of the early adopters of AI and be able to be much [00:07:00] more effective. And so they're, they're sort of training models and gathering lots of images to train on.

[00:07:08] Vic: So, interesting. 

[00:07:09] Marcus: Wearable defibrillator maker, Kestra medical plots, 150 million IPO. So this is interesting. Uh, the company has raised again, it's another Bain capital portfolio company. Um, they've previously raised 196 million. Um, don't know a whole bunch of those names, but Bain capital T Row price. So there are some, some more enterprise names that are on this list.

[00:07:31] Marcus: They raised almost 200 million. They're IPO ing. You know, at 150 million, it looks like, uh, Bain's going to own 52. 8 percent of the company. And there are other owners. So, I mean, what do you think they're, they're offering something like 20 percent of the company, maybe 20, 30 percent of the company. So that would, that would value it, you know, north of a billion.

[00:07:53] Vic: Yeah. But it's, I mean, this is, they're claiming they're going to IPO on NASDAQ in the [00:08:00] fall, I think. I think it's in the fall, um, but there's no banker listed. So I don't know if Bain is just trying to float an IPO themselves or they just didn't announce the banker, but the size of raising 150 million is a pretty small IPO.

[00:08:18] Vic: You mentioned, I had not noticed it, but they've raised private capital in excess of that, which is again, not typical. So great to see a healthcare IPO get filed and be planned, and it's a little bit different than I'm used to seeing with IPOs. 

[00:08:35] Marcus: Yeah, and it could just be that Fierce didn't think to list the banker, you know.

[00:08:40] Marcus: Um, but it is interesting that the banker wasn't named, right? All right, Wall Street Journal story here. New Dream Exchange aims to list black owned companies. I think this is a very interesting headline from the Wall Street Journal because then you read the article and the founders of this exchange clearly say they're race neutral.

[00:08:59] Vic: Yeah, right. [00:09:00] 

[00:09:00] Marcus: So, it's 

[00:09:01] Vic: The headlines I mean, I think you know this. The headlines are not written by the journalist. And they, this headline is, is 

[00:09:10] Marcus: Well, no, no, no, hold on. The headlines can be read, written by the journalist. They're, they're certainly not written by the subject of the, of the article. And I, as I, as I read it, I've kind of jumped ahead, but it just stuck out to me as I read the headline knowing what the article is about.

[00:09:24] Marcus: So the article is about, um, you know, two, two black businessmen who are based in Chicago. 

Yeah. 

[00:09:30] Marcus: Okay. Based in Chicago, uh, which is actually where I think the New York Stock Exchange is moving their exchange to Texas. Oh, really? Yeah. Because, because it's not a net new that they're, that they're sending to Texas.

[00:09:42] Marcus: I think they're moving the one from Chicago to Texas. Okay. Um, so that, that's just an interesting, you know. Point here, but, but they, they want to create, um, an exchange that is for small, small businesses. 

[00:09:56] Vic: There used to be the American exchange and the Toronto exchange, [00:10:00] which were both sort of for smaller companies.

[00:10:03] Vic: And I don't know that they exist anymore, but, uh, we need, we need more publicly traded companies. We need more places for smaller companies, like the one we just covered 150 million raise. Um, I agree. This is not, I mean, they happen to be too. Black guys that are starting it. They say pretty specifically that it's not designed for black owned companies.

[00:10:27] Vic: I mean, you certainly, you can be black owned, but any, any company they want to give a home to. I think it's interesting that we're now seeing, you know, the Texas exchange. is probably more of a conservative movement thing. And this is probably more of a liberal movement. What, what, I don't think it's necessarily black, but it's going to be in Chicago and, and more in the liberal side.

[00:10:51] Vic: I 

[00:10:51] Marcus: think this is great. I mean, I, I, I want to see more, um, things that are not on the right, that, that have a real [00:11:00] economic focus, you know, and an economic focus that is about businesses, right. Um, not just about investing in. Whatever, man, businesses, business creation, value creation, economic value creation, um, should not be a partisan thing, you know, both sides of the aisle should like be really into that.

[00:11:21] Vic: And there's, there's a need for different exchanges. I mean, the thresholds to be on New York exchange or NASDAQ are high and expensive. And so having another exchange where they are vetting companies and it is regulated, but it's a lower tier where you can be smaller, I think would be really healthy.

[00:11:41] Marcus: Totally agree with that. Totally agree with that. All right. House house passes the GOP budget teeing up enormous tax and spending cuts. The numbers on this, uh, budget are staggering 4. 5 trillion in tax cuts. And 2 trillion reduction in federal spending over a [00:12:00] decade, uh, which is sort of lining up the major elements of President Trump's domestic agenda.

[00:12:05] Vic: Yeah. And it, it was, um, I mean, they don't have a lot of extra votes to spare and they, they pushed it across the finish line, which was surprising. 217 to 215. Right. 

[00:12:18] Marcus: I mean, they, they barely got it done. 

[00:12:21] Vic: Yeah. And I think it was a lot of. Whipping up their support and horse trading to get done. Yeah, but they but they got it done So we'll see how it evolves the Senate has not On their side yet.

[00:12:37] Vic: And so they have to get to do reconciliation to get both bills. I think identical is a lot of concern. We'll have the next story about, you know, how are you going to find 2 trillion in cuts? HHS and particularly Medicaid is, has a big target on its back. 

[00:12:53] Marcus: Yeah. Medicaid has a, a multi hundred billion dollar, uh, target on its back.

[00:12:59] Marcus: [00:13:00] Obviously that. freaks out a lot of people, um, because it's, it's care for the most vulnerable. And it's also a lot of the viability of, of our safety net hospitals. Um, our nonprofit hospitals have to do a lot more charity care and a lot more, you know, their payer mixes much more leaning towards a government pay.

[00:13:19] Marcus: then the commercial pay. Um, and even, you know, more and more for profit hospitals as Medicaid payments were brought up to be more on parity with commercial payments or supplemental payments. Um, so it, it sort of lines up the whole industry quite frankly. Um, and in this article from, uh, from fierce, they, they highlight that you had kind of all the big associations there.

[00:13:43] Marcus: So the American hospital association, obviously that's your nonprofit. Federation of American Hospitals, that's your for profits. Um, America's Essential Hospitals, that's your safety nets, right? So like, there you go. They're all sort of covered. Yeah. Um, the Association for Community Plans and, and they're, you know, they're [00:14:00] messaging sort of at different levels of intensity based on how much of a target is on their back based on how big their total service area is.

[00:14:09] Marcus: That's, that's government pay, right? 

[00:14:11] Vic: Federation members are less Concerned. Yes, but they are concerned. They don't want to cut. No, of course not. Of 

[00:14:17] Marcus: course not. They're concerned, but they're less concerned. Whereas America's essential hospitals, it's like 100 percent of business, right? Right. So, um, so they are like extremely concerned about these cuts.

[00:14:27] Marcus: Um, so yeah, it's look, I mean, Everyone is going to be watching this very closely in the healthcare space, um, to, to see where this is going to play out. There will be a ton of advocacy, a ton of lobbying happening. And I, I agree with you getting it, uh, how it will all play out in the Senate is going to be a completely different ballgame.

[00:14:46] Marcus: Uh, than when it was in the, in the house, so we will stay tuned this week's big presidential action executive order coming out of the white house was on price transparency, a relatively short executive order, um, as they go, [00:15:00] but basically saying, Hey, you know, we, we put price transparency in place during, uh, Trump's first term, right?

[00:15:08] Marcus: Biden continued it, but was not necessarily very aggressive on it. Of course, America's healthcare ecosystem was reeling from COVID. So it makes sense that, you know, you were trying to kind of get the hospitals back to the 

[00:15:21] Vic: top focus. Yeah. Yeah. 

[00:15:22] Marcus: You're trying to get the hospitals back to back to stable ground.

[00:15:26] Marcus: Um, and, and look, when we look at, at nonprofit hospitals. You know, we've talked about the credit ratings, we've talked about how they've turned around the losses into, you know, into wins, um, there's, there's very few that are struggling the way that they were three years ago. Um, so it feels like the hospitals are now in a much better position, but, you know, you, you stack potential Medicaid cuts, 340B issues, labor issues, um, and, and now, and now.

[00:15:53] Marcus: NIH overhead 

[00:15:53] Vic: cuts. What'd you say? NIH overhead cuts. NIH overhead cuts. Not every hospital, but yeah, no, but [00:16:00] yeah, 

[00:16:00] Marcus: academic centers and then and then now you throw in this price transparency, right, right, right, which, which is, I don't, you know, it's like they've already done a lot of work on price transparency.

[00:16:10] Marcus: The next story we'll talk about is the HFMA. HFMA analysis of this, which is to say that gearing up for January of this year, the hospital's already did a bunch of work on price transparency to get, um, estimates out there for the services. Um, and now, you know, they're, they're having to be pushed to move towards exact prices on things.

[00:16:31] Marcus: So, um, 

[00:16:33] Vic: yeah, and the, the other change from Trump administration one. Was the consumer friendly format versus machine readable format. A lot of the prices that are out there now are in JSON format. They're pretty hard for a human to digest unless you are a developer. It can, can pull the code down and then create a report.

[00:16:55] Vic: And so they're, they're improving that, or maybe they're, they're [00:17:00] adding requirements depending on your perspective, but. But having it be readable for a kind of a normal patient population is probably useful. 

[00:17:12] Marcus: So look, again, we'll watch this one closely as well. It's, it's an executive order. And I think the main point is that we're going to start enforcing this stuff a lot more.

[00:17:20] Marcus: Um, but. Again, there's a lot of things coming at the healthcare ecosystem right now, all at one time. Um, it feels like just the theme is pressure. Pressure, pressure, pressure. Um, so we'll, we'll see how we come out on the other side. Uh, I thought this was an interesting one that you found. Blue Cross Blue Shield Association report.

[00:17:39] Marcus: Addressing hospital pharma costs could save over 1 trillion dollars in the next decade. You don't say. 

[00:17:45] Vic: Yeah. So, Blue Cross Association, I mean, they're, they're good people, but they produced this report basically pointing fingers at health systems and pharma as the best [00:18:00] place to save a trillion dollars.

[00:18:01] Vic: And it's not that I disagree with them, but, but it's. You know, they, they have a dog in this hunt. They, they, they want the cuts to come out of the other side and it's, they're not objective in this analysis, I would say. 

[00:18:14] Marcus: No, no, no, and, and, and neither is the AHA or, or, I mean, I'm, I'm just giggling because the, the, you know, the provider payer dynamic.

[00:18:25] Marcus: Yeah, it's, it's funny. Yeah, the longer, the longer you stick around in this industry, the funnier it gets, right? You know, so this, this was, uh. Yeah, 

[00:18:32] Vic: so site neutral payments was the big thing they came up with. Where you, you should pay the same for a procedure, whether it's inpatient or outpatient. I agree with that.

[00:18:42] Vic: Look, I'm not sure Blue Cross is the one to push that. 

[00:18:46] Marcus: Well, listen, I mean, uh, they have an audience, so they have an audience making more people aware that site neutral payments are, are a potential thing and that is a real potential thing for this year. 

[00:18:57] Vic: Oh yeah. 

[00:18:57] Marcus: That's a very real potential thing. I mean, 

[00:18:59] Vic: I don't [00:19:00] think that, that Brad Smith and others in the Trump administration.

[00:19:03] Vic: Were unaware of that until Blue Cross. No told of that. Of course, of course, 

[00:19:06] Marcus: of course. Uh, the Trump team weighs pulling funds from Moderna Blue Bird flu vaccine. This is from Bloomberg 

[00:19:12] Vic: Moderna, and the whole mRNA thing I think is being really challenged now. And the Trump administration is looking for cost savings and, and they are likely to pull the $590 million contract for Moderna to work on a bird flu vaccine.

[00:19:36] Vic: I think that's likely to happen. Mm. So Moderna's stock is, is really in trouble and I think, I'm not sure. 

[00:19:44] Marcus: Well, look, I mean the, the bottom line is they're just in the cross hairs. Yeah, you know, they're, they're in the crosshairs, so, which is so interesting because like you just think about how these narratives evolve in spite of the facts, you [00:20:00] know, Operation Warp Speed was under Donald Trump.

[00:20:07] Vic: That's right. 

[00:20:07] Marcus: You know, Moderna was born under Donald Trump. Yeah, 

[00:20:10] Vic: the COVID vaccine was, was what made the company. 

[00:20:13] Marcus: Yeah, but, but all, you know, the, the way the things were handled through the Biden administration and the lockdowns and all these other kinds of things. It's like, you know, um, they're no longer.

[00:20:26] Marcus: No longer in vogue with right with the right, you know, so so here we are axios telehealth advocates turn up the pressure as medicare deadline nears this is coming up very very soon this deadline. I didn't realize how soon it was coming up, but March 14th, 

[00:20:42] Vic: the um, the concept that telehealth visits. are good for patients, good for payers, good for providers, and should be done.

[00:20:54] Vic: I think we all agreed in COVID that we should do that. And [00:21:00] we are waiting now for it to be extended. But March 14th is fast. And so, there's a lot of my portfolio, a lot of healthcare providers that rely on telehealth visits being reimbursed. And I don't know who is looking to change this. But, but they haven't, they haven't extended it.

[00:21:22] Vic: And so, people are lobbying. And I, I think it'll get extended, but, but March 14th is pretty soon. 

[00:21:29] Marcus: Yep. Yep. Agree. Agree. It's, uh, look, it's one of those things that my, my dad, uh, had his first telehealth, uh, experience with his diabetes doctor and like, he loved it. Yeah, of course he did. He didn't have to 

[00:21:44] Vic: drive down 

[00:21:45] Marcus: and everything.

[00:21:45] Marcus: He's like, it's so much more convenient. This is great. I love it. Talk to the doctor right from my bed. You know what I mean? He loved it. Um, and it's better for the doctor. Yeah. Now, but he. happens to be able to get to the doctor. Yeah. You know, that's because [00:22:00] of the resources and the network and other things that he has.

[00:22:03] Marcus: Yeah. So it's 

[00:22:03] Vic: a convenience 

[00:22:04] Marcus: thing. You 

[00:22:04] Vic: might go every other time to the doctor. Let's be really 

[00:22:06] Marcus: clear. Um, his state of health would not allow him to do that on his own. So if he was not. resourced as he is, he could not do that, he could not do that. And there are many people his age that, you know, have the same physical limitations and are not resourced as he's resourced.

[00:22:27] Marcus: So, there's a real, this is a very real access to care kind of no brainer for, um, for our aging population. And it's just kind of like, this, this one just feels like if you, If you try to do cold calculation on, on, um, on budget, on this particular one, this, this feels particularly cruel. 

[00:22:58] Vic: I don't think it saves money.

[00:22:59] Vic: I [00:23:00] mean, in the long, in the, in the long run, even like a year view, I don't think it saves money. 

[00:23:05] Marcus: Right. And the healthcare economics and what kind of acuity will you end up, you know, dealing 

[00:23:09] Vic: with? It's not, it is, I think, completely positive to have telehealth as an option. And I don't see who would be against it.

[00:23:21] Vic: Right. 

[00:23:22] Marcus: Yeah, I agree. Trump memo directs federal agencies, HHS to fire more employees and submit agency reorg plans. This is from fierce healthcare. I think I said this in the episode when I kind of returned back from, from the road. Um, But, you know, I know a lot of people who work in the government, I don't, and the federal government, and I don't know a single one who has not had an encounter with Doge yet.

[00:23:51] Marcus: It's like, so for people who don't know people who work in the government, like, They all have had encounters with Doge? Every last one of them. Yeah. Every last one of them, yes. [00:24:00] Every last one of them has had an encounter with Doge. Yeah. So it's, it's, it's not just like a social media thing. No, no, 

[00:24:05] Vic: I mean, I agree with that.

[00:24:06] Vic: I mean, the thing that is different about Doge than, I mean, this has been tried a lot of times to cut government spending is Ilong and all the people he's bringing have really powerful tools to pull detailed data on each program, each person, each wire going out, each employee at a scale and a level of like a granular detail that we've never looked at that before.

[00:24:37] Vic: And some things like waste, fraud and abuse in Medicare. I think we should catch every fraudulent claim and stop it, right? We don't, we don't need to just sort of grab the most egregious ones, but for the employees, they're real people. We need to sort of treat them. Maybe a little differently. They're running [00:25:00] fast and all the different departments.

[00:25:02] Vic: I'm not surprised 

[00:25:03] Marcus: now. So, I mean, look, we're, we're going to see some, some brilliant people, uh, unemployed here, um, in the. Not too distant future, and I certainly hope that we have the capacity in the private markets to absorb those people and put them, um, into positions to leverage all their knowledge and experience, um, which could be invaluable in the private markets because We can't, we can't do anything about the fact that they're going to get fired.

[00:25:35] Marcus: I mean, they're going to get fired. Like that's just, so the best I can hope for is that we can absorb it. We can absorb that talent. Yeah. Um, and especially in the healthcare innovation space, I, you know, I think less, less the establishment, less the like, you know, incumbents and more like actually the fixed healthcare part of things.

[00:25:52] Marcus: Like let's You know, let's, let's work together. Uh, Healthcare Dive, this is a little breakdown on how Medicare Advantage enrollment [00:26:00] has been, uh, playing out so far between December and February. You know, it's a, it's a short window, but you are starting to see some winners and some losers emerge.

[00:26:09] Marcus: UnitedHealth continues to, to, to grow, uh, and, and, and dominate overall enrollments. See, it's incredible when, when we refer to Humana as like the M. A. Right. You know, player, and in February, UHG's enrollment was almost twice Humana's. Even though 

[00:26:29] Vic: they're doing, they're doing a hundred things, they're doing everything, but they're still double the biggest pure player.

[00:26:35] Vic: It's, it's, like UHG is just They are just a really I mean, people are upset with them, people are happy with them, but they are big and pretty efficient. 

[00:26:47] Marcus: There's not a close second in our, in our industry to them. It's just really not. So 

[00:26:51] Vic: Medicare Advantage, I think, uh, overall is still growing, but more slowly than it has grown in the past.

[00:26:58] Vic: So the rate of change is [00:27:00] slowing. And then you're starting to see a difference between winners and losers. UnitedHealth and Elevance are gaining share. And Humana, CVS, Centene, losing share. 

[00:27:13] Marcus: Yeah. I mean, the pure players losing share, some of it, I think has to do, you know, we, we, we saw Centene last year talking about moving out of certain markets.

[00:27:22] Marcus: Yeah. And 

[00:27:22] Vic: Humana. Yeah. Both are maybe, I think. I don't have this sourced, but my guess is that they're moving some out of some markets to get to more profitable areas. And so some of the decline was calculated. Yeah. 

[00:27:42] Marcus: So anyway, just sort of interesting to kind of see how how enrollment is stacking up. Um, and that, and that I think generally speaking, UHG, although they have all the data and they, and they are going to be smart about the markets that they pick and, and, and the members that they enroll.

[00:27:57] Marcus: Um, I think their scale [00:28:00] enables them to, to take on more members, right? You know, um, just that, that breadth of, of premium. Yeah. There's scale and premium base and optimist. Yeah. Yeah. Okay. This is from Yahoo Finance. Uh, Walgreens breakup. Inside the private equity takeover that could reshape the pharmacy giant.

[00:28:17] Marcus: So this is probably the best story I think I've heard about Walgreens, uh, since we've done this show. Cause the Walgreens story has just been going down, just like their stock price. Um, but Sycamore Partners is pushing ahead with its bid to take Walgreens Boots Alliance private. Um, so there's basically three businesses inside of this conglomerate.

[00:28:34] Marcus: Um. There's a US retail pharmacy. There's a UK based boots chain. Um, and then they've got a specialty pharma unit called Shields Health Solutions. And the idea here is to take them private and then break those three separate businesses, which is probably a good thing. 

[00:28:50] Vic: Yeah, I think, I think it is a good thing.

[00:28:54] Vic: They shouldn't have merged with boots and acquired all this stuff, but, [00:29:00] but that destroyed value. So now splitting it up and having businesses that can focus is. 

[00:29:05] Marcus: So look, I hope, I hope this happens. I'm just, you know, how could you be a shareholder of Walgreens and like, want to be along for the ride any longer?

[00:29:14] Vic: I don't know who's still holding it now. 

[00:29:16] Marcus: Yeah. I mean, but it's been brutal, right? Uh, okay. Some of glue tide shortage ends is. DA sets deadline for compounders. We've been talking about this for a while. Yeah. We covered the, the very audacious but well done Super Bowl app. Yeah. That, that hims and hers did.

[00:29:32] Marcus: And uh, apparently all it did was point attention. Yeah. Maybe too audacious. Yeah, yeah. Right. All I did was point attention to the fact that they're out here selling this thing that we don't actually have a shortage of. Yes, 

[00:29:42] Vic: that's right. And so I think this is hard for HIMSS and other compounders, but the right thing, I mean, if you have IP protection.

[00:29:51] Vic: You should be protected from other people at that kind of scale competing with you. It just doesn't, it allows the market to work. And so. [00:30:00] I don't know. I mean, I don't want to have expensive as MPIC particularly, but, but that's a different question than whether they have the right to sell illegally compounded competitors.

[00:30:09] Vic: Correct. 

[00:30:09] Marcus: That's a totally different question. It's a totally different question. And I think we've been talking about this for a while. We've had conversations with people who basically thought like, uh, what's the FDA actually going to do? And, uh, you know, I think this FDA is going to protect corporate interests where, where the law is on their side.

[00:30:26] Marcus: Yeah. You know, so, uh, yeah, this is, I think hims and hers stock price on this news of the shortage, uh, being ended, went down 26%. 

[00:30:36] Vic: In like an hour. It was brutal. And I mean, I feel bad for them, but, but it was pretty clear that it was not legal to do. 

[00:30:47] Marcus: Yeah. No, no, no. Like the idea that you pushed so aggressively into a business line that you knew was like [00:31:00] an exception.

[00:31:01] Vic: Yeah. There's a short window of time. Yeah. And somehow 

[00:31:03] Marcus: you were just going to like draw a public sentiment to like support your case. Yeah. That's, that wasn't a good strategy. Yeah. And in the meantime. Let's just talk about the downside. Part of the downside is certainly. financial for him's and hers, right?

[00:31:22] Marcus: I mean, loss of revenue, loss of stock value, but all their members who were previously getting it through them. 

[00:31:29] Vic: Yeah. They have to figure out something else. Now they got to figure 

[00:31:31] Marcus: out something else. So that's kind of the tough part there, right? Eli Lilly plans to spend 27 billion on new us plants. So this is all part of.

[00:31:40] Marcus: The reshoring effort that is, I think, two sides of a coin. On one side is a bunch of tax cuts to sort of drive manufacturing reshoring. And on the other side, there's tariffs to sort of disincentivize continuing to do globalized business. Um, so Eli Lilly's CEO, Dave Rick said, this is the first time in 40 years, uh, more than [00:32:00] 40 years that, uh, Eli Lilly has, uh, set out to build a new site.

[00:32:05] Marcus: And, um, you know, so in order for them to continue to do this, they need extended or, or improved support, um, of this kind. 

[00:32:13] Vic: Yeah, I mean, I think it's a, it's a national security issue. I mean, we have to have sources of pharmaceuticals that are not from China and India. And we don't right now. 

[00:32:24] Marcus: Dude, the story that we were, do you remember we were covering the story about, um, it was in Moxicillin and how we were going to have a shortage because like we can't, we can't make it.

[00:32:33] Marcus: Not only we can't make it, we can't keep our manufacturers in business. Right. Because they can't compete with the Indian manufacturers. That it's not that we can't make it. We can make it. Oh, we have the technology to make it. We can't make it. At the price points that would work. We can't make it at the price points that would work, and therefore we can't keep our manufacturing open.

[00:32:53] Marcus: Yeah. 

[00:32:53] Vic: It was a, it is a Tennessee based firm, I think. Yeah, yeah. It was in East Tennessee. 

[00:32:56] Marcus: Yeah. Yeah. So, so like, look, I mean, [00:33:00] and, and this is why I said, when we first started talking about the tariffs thing, I said, listen, I'm not, I don't know enough about, about tariffs and I still don't. I still don't know enough about tariffs.

[00:33:11] Marcus: Right? Um, and I understand that there are downsides to, to tariffs. 100%. Right. But like, can we have an honest appraisal of the, the, the state of resiliency of America? We are not resilient. Like if we don't import stuff, we're screwed. Yes. And we're fragile. We're not anti fragile. We're fragile. And so at some point, somebody had to be the bad guy and do this politically.

[00:33:42] Marcus: At some point, somebody had to put some measures in place to get the country resilient again. You know? 

[00:33:51] Vic: Yeah. And I think there's no question about that. The question is, how do you do it in a way that is yeah. [00:34:00] Um, slow enough that the companies and the job workers and the economy can, can sort of evolve into it while not making it slow, so slow that nothing happens.

[00:34:15] Vic: It's a, you know, it's a complex system. So you put a tariff in, it has all these downstream effects that it's hard to know. It'd be good to go slowly. I don't know that Trump is slow at anything, but, but I love that Louis building four sites. 

[00:34:28] Marcus: No, it's great. It's fantastic. It's really good. Um, AstraZeneca is breast cancer drug shows positive results in late stage trial.

[00:34:35] Marcus: So. Always a good thing. Um, analysts anticipate a sales potential for the drug of 1. 5 billion in 2030. Um, apparently this drug is showing a better progression free survival compared with the standard of care treatment. 

[00:34:48] Vic: Yeah. I mean, breast cancer is a huge problem and more solutions. It's great. I've read this article four times.

[00:34:56] Vic: I can't understand all the science around it, but it's [00:35:00] positive. Yeah. 

[00:35:01] Marcus: Good news. And we'll, and we'll track that in the, in the coming years. All right. Health and us first stories from the wall street journal. Why we don't trust doctors like we used to, uh, the subtitle patients often feel ignored and complain about disjointed care and a lack of communication.

[00:35:16] Marcus: Duh. I mean, do we even need to read the article?

[00:35:26] Vic: And it's, it's a sad state of the world, I think. Simultaneously, Doctors have come under pressure to do a lot more volume where they don't have time that I think most doctors I know would like to spend more time actually with their patients. Of 

[00:35:45] Marcus: course. 

[00:35:46] Vic: But they are under extreme pressure for our views and volume.

[00:35:50] Vic: Absolutely. And then simultaneously we have TikTok, Google, Instagram, other sources. Um, [00:36:00] Promoting all kinds of information, some of which is true and some of which is vaguely kind of true and some which is not true. 

[00:36:06] Marcus: Also, also, this, this is important and I think becoming more apparent as we're, we continue to see doctors just opting out of the health insurance complex and just going cash pay.

Yeah. 

[00:36:19] Marcus: Um, we're realizing that accepting insurance mandates a particular standard of care that may not be. Right. Thank you. like the most cutting edge or the most patient friendly or the most exploratory to actually like track down what might be going wrong with somebody. And several of the examples in this story are about, you know, people who came in with a particular symptom.

[00:36:41] Marcus: And for all the reasons you mentioned, right, you know, the doctor has 15 minutes with you and has to spend half of it documenting things so that I get everything right for the claim that's got to be filed. Right. Uh, and what, you know, when they hear something, it's like, okay, is insurance good? You know, the calculus in their head many [00:37:00] times, if they're building insurance is like, is insurance even going to pay for this?

[00:37:04] Vic: You know, is insurance going to pay for it? And do I need some lab either to protect legal liability or to? buttress my defense of the insurance, uh, questioning it. And I, I think our system is set up. I'm not blaming the payers. I mean, I think there's a lot of hate around the payers. Their job is to try to try to be the offset for that.

[00:37:28] Vic: Yeah. But It's a problem that we don't have physicians that have training spending time with the patients to help them navigate these things. 

[00:37:37] Marcus: Yeah, look, no system is perfect. We're just, we're highlighting. Just describing some of the issues. We're describing some of the issues with the system, right? So this, this is not a problem.

[00:37:45] Marcus: For doctors or, or the providers, you know, as an organization that they work for or the payers is like when you have a system that has to work at scale and cost all this money and, and you're trying to kind of manage costs and all this, and you're trying to get a lot of volume because you got to treat a lot of people and you don't have enough [00:38:00] docs and your panel size is too big and all the, all the things, right?

[00:38:03] Marcus: This is what you get. Yes, what you get and and I've talked multiple times on the show about the fact that I have a concierge doc Because I sort of ran into this situation With the doc that I loved and trusted for 10 years, you know And was not entirely off insurance, but like was generally speaking Integrated medicine very you know, like very very thoughtful.

[00:38:30] Marcus: Um, but in this one Experience that I had that that given other things were going on in my life, um, and what my, my symptoms were, the bottom line is I was afraid. I was afraid that something was really, really wrong. 

[00:38:46] Vic: Yeah. And you weren't getting. You weren't confident that your doctor was looking at everything like he needed to or she needed to 

[00:38:54] Marcus: I did not feel that my fear was [00:39:00] received and understood, right?

[00:39:04] Marcus: And, um, yeah. And again, back to the resources. I'm resourced well enough to sort of say enough of that. Like, I'm gonna go get to a doctor who is going to listen to everything I say now, you know, it's going to cost me more money. But like they will listen to everything I say, you know, and that's, that's, I don't love that.

[00:39:25] Marcus: I don't love that, but it's not scalable across the country. Of course. Problem. Of course not. Yeah. First measles death reported in Texas outbreak. So an unvaccinated school aged child died after being hospitalized in West Texas. This measles outbreak is, is very, very sad. You know, something that we hope does not.

[00:39:42] Marcus: Um, but is I think part of the national debate conversation around vaccines and children, 

[00:39:53] Vic: right? Yes. Yes. Measles vaccine. I think everyone should [00:40:00] get it. I think it's very clear that it's highly contagious and dangerous for especially for pregnant mothers. It's very dangerous. Um, that doesn't mean every vaccine is, um, The same, and it's such like this hot topic that you can't talk about different vaccines in a way that is scientifically based, no one in no one in the world, but no one in America should die of the measles.

[00:40:28] Vic: That's really sad. 

[00:40:31] Marcus: Yeah, well, look, our conversations are, especially when it comes to how we're learning. It's, it's, uh, broken down into posts and tweets and things like that. And, you know, we, we use words like woke like that. Me like. Like it means anything. Like that has anything to 

[00:40:46] Vic: do with medicine. Yeah.

[00:40:48] Marcus: Or, or like, or like it even means anything. Like, like. Like what is woke? 

[00:40:53] Vic: Yeah, 

[00:40:53] Marcus: what does it mean? You know what I mean? So of course we can't have a conversation, you know, a nuanced, thoughtful conversation about [00:41:00] vaccines. I mean, you know, you can on podcasts where you can have long form conversation and stuff like that.

[00:41:05] Marcus: But generally speaking, you can't have it on cable TV. Those conversations are way too short. 

[00:41:10] Vic: Yeah. 

[00:41:10] Marcus: You know? 

[00:41:10] Vic: Yeah. And in the, in the, I mean, it's back to the last story in the pediatrician's office, you can't have an hour long conversation with your pediatrician about. Vaccinations, they don't have the time and and they're not qualified to talk through it all.

[00:41:24] Marcus: That's right. All right. And then, um, New York Times did an incredible story, but it's not just the story. If you happen to be reading this in the browser, I can't say for sure how it works on the phone. But if you read this story on the browser, the interactive graphics that they use to articulate it are incredible.

[00:41:45] Marcus: This story is about it. organ transplants and the waiting lists and how they are working and how, and more importantly, how they are not working and how, um, the people who are quote unquote next in line [00:42:00] sometimes end up getting passed over in the 11th hour, um, after having waited for very, very, very, very long.

[00:42:06] Marcus: Um, and so this is a very controversial story, but they do a good job of highlighting the real. Um, the real challenges in, in, uh, in the transplant space right now. 

[00:42:20] Vic: Yeah, and it's, um, there's been a lot of work for, I don't know, 30 years to try to figure out this question. We have a limited number of, they're talking about kidneys, but hearts, any, any organ.

[00:42:36] Vic: And we have more people that need it, unfortunately, than we have access. And who should it go to? And what's the way you determine that? And so there's lots of combinations of factors, their existing health, their match with the donor, whole bunch of things. Um, and what [00:43:00] I was really shocked about is that, so I mean, I knew something about this.

[00:43:04] Vic: I know it's complicated and there's lots of pieces. We still waste about 20 percent of the organs just don't go anywhere. And so they tried to, 10 years ago, they tried, they redid the whole system that opened up some of these, um, gaps where someone might jump in front of people, in front of them in line because they have A, B, C, and D, and they, they, I think, accepted those possibilities in order to make sure more kidneys got, got to a, Patient at all.

[00:43:38] Vic: And we didn't just waste them, but it hasn't had that effect. We're still at 20 percent of the organs are not given to anyone. So we haven't affected that, uh, sort of lost opportunity. And yet we have all these other, um, kind of unintended consequences now where it's. It's hard to [00:44:00] know who's going to get it, and it's somewhat, it feels more random than it needs to be.

[00:44:05] Vic: Yeah, 

[00:44:06] Marcus: yeah, it's a hard story to read, but I think, uh, 

[00:44:09] Vic: But the graphics are really, it's a hard thing to just talk about, but the graphics, so if you're, um, The numbers don't do it justice, but the graphics 

[00:44:17] Marcus: do. Yes, that's right. The graphics turn numbers into people. Yes, Which is very helpful. Yes. Which is very helpful.

[00:44:24] Marcus: Alright, I thought this was an interesting story, uh, about red light therapy, getting the green light sort of, I mean, um, Um, You asked me if I use red light therapy, and you know, I'm kind of like, uh, you know, I go to like, you test a lot of things. Yeah, I test a lot of things. I go to restore and my, my, uh, my coach uses, uh, not my jujitsu coach, my strength and conditioning coach uses red light and, you know, has sort of said, Hey, supposed to help recovery.

[00:44:46] Vic: Yeah, yeah, yeah. 

[00:44:46] Marcus: For healing. Like, if you've got like a strain or something like that, you kind of use the red light and sports to stimulate, you know, um, the healing process. I mean, I'm one of these people that's like, if it's not going to harm me, 

yeah, 

[00:44:58] Marcus: I'll try it. [00:45:00] You know what I mean? I'll try it. It's like, you know, and and I'll see for myself.

[00:45:03] Marcus: Now, these things are in these wellness lounges, right? Yeah. Which now are all over the country. Restore is probably the biggest nationwide brand of these, but there's But there's a lot. Yeah. At this point, there's a lot. There's many of them. Um, and there's Red Light and basically all of them. So, you know, it's like a lot of people are doing this.

[00:45:21] Marcus: Yeah. 

[00:45:23] Vic: Yeah, I, I think there's anecdotal evidence that it was really helpful. There's some animal studies that it's helpful and I think I agree. It's not, I don't think there's any one saying that it's going to be damaging. Um, so I think if it helps you. That's good. 

[00:45:42] Marcus: Yeah. All right. Into the AI rundown. So, uh, anthropic.

[00:45:47] Marcus: Yeah. Finalizing 3. 5 billion funding round. I don't know how you call a company that's raising 3. 5 billion and valued at 60 billion. Yeah. Anyway, uh, they're, they're finally getting this round done. Deep seek kind of, uh, through a curve ball at the whole [00:46:00] AI space for a minute there. But isn't it funny how like, Okay.

[00:46:02] Marcus: The news cycles are so short. 

[00:46:04] Vic: Yeah. Oh, yeah. They're back. 

[00:46:05] Marcus: Everyone's back. Yeah. Raising money. That's right. Took a week. Take a week off. Let this deep sea thing kind of run its course. And then we'll all kind of come back and raise our, raise our funds. So 3. 5 billion funding round, 61. 5 billion valuation.

[00:46:21] Vic: Yeah. Um, yeah, I am. I think I've said several times the scale of this investment and the valuations. are just hard for me to get my head around, like, is it that much better than an open source free model? I don't know. I'm not sure, but if they get to AGI and there's some magic moment where like all of a sudden it is, then it will bend right.

[00:46:46] Marcus: Well, I'm thinking more and more, and we're going to talk about open AI, I think here, but I'm thinking more and more that this is not as much about, um, [00:47:00] Which model is better than another model and more and more about a what the model is good at and be how trusted will this model be in the enterprise, you know, and I think in America, open AI and anthropic and I'm trying to think, is there a good third, maybe grok could go.

[00:47:21] Marcus: Gem Gemini. Yeah, yeah, yeah. Gemini and then, and then Grok. So probably those four. And I wouldn't have said GR before the Trump win, but now that Elon is, you know, basically in the White House, you know? Yeah. I, I'll put gr like, gives him a 

[00:47:33] Vic: chance. 

[00:47:33] Marcus: Yeah. . Yeah. I mean, I mean between that and also the data center in Memphis.

[00:47:36] Marcus: Yeah. Like, you know, power and rock three and all that kind of stuff. I mean, all four of those models, um, I think. Can be brought into the enterprise in very integrated ways that can pass the compliance and all the sorts of things that a deep sequel will never do, never do, you know, and, and look, you and I were both around [00:48:00] when, you know, Linux, when everyone realized, Oh my gosh, Linux is more powerful than Microsoft when it comes to being a server technology and Red Hat wrapped the corporation around it.

[00:48:11] Marcus: And then Novell did SUSE Linux and you were there for that, right? You know, and it's like, dude, did it hurt Microsoft? Like how much is Microsoft worth today? You know what I mean? So, so, and how much is Red Hat worth today? I mean, they're a company, but like, not a very big one. So, so it's, so it's like, I think, I think the open source models, just like open source software are great for us.

[00:48:39] Marcus: They're great for startups. They're great for programmers. They're great for researchers. Right? They're great for anyone who wants to be able to leverage this technology and not have to pay licensing fees, and we should have that, that class of software out there. But there are going to be many enterprises that are going to want to replace many human workers with [00:49:00] digital workers.

[00:49:01] Marcus: And I think those businesses, I mean, I think about like the big four accounting firms. Dude, they, their compliance has to be through the roof. They can never use one of these open source models. They have to use something that's got a company behind it with all the, you know, certifications and verifications and all that kind of stuff, but they want to replace their human workforce with a digital workforce.

[00:49:24] Marcus: Big time, like they're not, they're not even, I won't even say what I, what I've experienced in the last three weeks on that front, but like, let's just for sure say this is something they want to do, right? And I think that's where these valuations are really coming from, right? I think it's the idea that these companies will continue to advance these models.

[00:49:43] Marcus: They know that they're not going to get startups like us to pay when we can use DeepSeek or something or Lama or whatever. They don't care about that, you know, they care about the defense industry, the manufacturing industry, uh, you know, these really, really huge industries where they cannot, you know, the aviation [00:50:00] industry, uh, the, the, the big accounting and consulting firms that have to serve these, these industries and where they need a company.

[00:50:06] Marcus: Behind behind the product, so that's that's kind of what I where I think the valuations are. Yeah, I think 

[00:50:12] Vic: that's fair the thing. I'm just struggling with is that the cost to train a model and the cost of inference that they're running is. Is much higher than they're charging, so that I don't 

[00:50:29] Marcus: see how they we don't, but we don't really know what their model for the enterprise is.

[00:50:34] Vic: Yeah, so if they stop training new models and they create a product that is less expensive and works for enterprise, maybe that. Maybe that can work. That's, that's the 

[00:50:47] Marcus: only thing I can come up with to validate, to validate the, But the difference between 

[00:50:51] Vic: Cod 3. 7 and DeepSeek or LLAMA, even like a year ago LLAMA, is just not that much.

[00:50:59] Marcus: [00:51:00] Okay, so, so let's, let's just talk about where I think we violently agree. I don't think anything is going to replace the consumer distribution that OpenAI, Meta, and Google, And let's throw Microsoft in there as well for their co pilot stuff already have like OpenAI is the, the standalone name, chat GPT.

[00:51:24] Marcus: Yeah, that is, if you want a standalone brand. 

[00:51:26] Vic: Yeah, everyone, you walk on the street, someone would know 

[00:51:29] Marcus: that chat GPT, right? That's the standalone brand. And then the distributed brand inside of existing apps, that's meta and Google and to some degree Microsoft and, you know, Apple is just working with OpenAI.

[00:51:48] Marcus: Yeah, and embedding chat GPT, right? Because it's because it's the best standalone AI brand. 

[00:51:53] Vic: Yeah. And Claude is really a Amazon proxy. I think 

[00:51:56] Marcus: the Amazon proxy and it's, and it's also like for [00:52:00] programmers. Yeah. Yeah. It's known for writing the best code. Yeah.

[00:52:06] Marcus: I'm, I'm, I'm just trying to steel man the valuation. Yeah. You know what I mean? Like, I'm not saying I would pay for it, but yeah. 

[00:52:14] Vic: So maybe they can create a software. Fine tuned version that is sold on AWS and it's And it has that use case. 

[00:52:28] Marcus: Yeah. I mean, if they can get contracts in the universe of what Palantir is getting, you know, then that's, that's like legit.

[00:52:36] Marcus: Amazon announces AI powered Alexa plus. We were talking about this before we started the show. I've put Alexa in the same category as Siri, which was a little early to the party with a very subpar product. Um, well, both were pre LLM. Yeah. Yeah. Yes. So early to the party. And. [00:53:00] Not a great product experience, and I think it's hard to overcome that.

[00:53:05] Vic: Yeah, 

[00:53:06] Marcus: no, right. So look, there are definitely some people who use Alexa in their homes. I don't think it's that many. I 

[00:53:12] Vic: mean, I have two or three Alexa devices, but I never use them. Do you ever use them? Yeah, I've got them. Exactly. I've got them too. I don't use them. Yeah. 

[00:53:18] Marcus: You know, um, so look, I think it's, I think they have to do it.

[00:53:23] Marcus: It's table stakes. They have to do it. Uh, What would be interesting, in this article, do they talk at all about whether or not, um, Claude is underneath it? 

[00:53:31] Vic: They don't. I don't think it is. Hmm. What they talk about is their access to your buying history and what you're watching on Prime and all of your personal information that Amazon knows about you being embedded into the L O M, which might be scary, I'm not sure I like that, but they're presenting it as an advantage.

[00:53:55] Marcus: Yeah, and I guess I just don't even know, like, how that plays [00:54:00] into me wanting, yeah, it's, I'm just not clear on how that plays into me wanting that. Anyway, so CNBC NVIDIA sales grew 78 percent on AI demand company gives strong guidance. 

[00:54:15] Vic: Yeah. So they had their earnings announcement this week. They grew at 78 percent and that was down from the 96 percent last quarter.

[00:54:28] Vic: And so, I mean, I think nothing grows to the, to the moon, right? Like it has to come down from. Where was before and the stock, you know, is off a little bit and they just are going to need to keep delivering at this huge level. But I mean, the numbers, the absolute, even the percentages are maybe coming down slightly 70 percent quarter of a quarter growth and the revenue.

[00:54:57] Vic: You know, for the fiscal years, [00:55:00] 130, 000, 043 in this quarter, just, I mean, it's, it's staggering numbers. 

[00:55:05] Marcus: And we're going to talk about, you know, some stuff that Meta is going to do that I think is only going to increase that. 

[00:55:09] Vic: Yeah, that's right. 

[00:55:10] Marcus: Uh, this is a really important cautionary tale. So this story in the Wall Street Journal about a gentleman who's a Disney worker.

[00:55:18] Marcus: He downloaded an AI tool and ended up hacking his password manager. And that's it. Yeah, yeah, so 

[00:55:26] Vic: he went on GitHub, which I have done 40 times in the last year and downloaded an AI image generation tool, which created images for him, but it also was really just a front to this, this cyber threat, uh, actor and what really scared me is he, he, it, it broke into his one password, which is the tool that I use to manage passwords.

[00:55:57] Vic: And then that sort of brought the bad [00:56:00] actress into the Disney corporate system. So it brought, not everything down, but Disney lost a bunch of data from that. 

[00:56:09] Marcus: Yeah, brutal, brutal. So, I mean, look, be careful what you download on your computer. Make sure you've got antivirus stuff. He had antivirus stuff on his, on his computer.

[00:56:20] Marcus: Um, it didn't catch the first antivirus, uh, program he had running. Didn't catch it. He added a second one and that found it immediately. Um, so look, just, you gotta be careful with this stuff. Um, 

[00:56:35] Vic: Yeah, so it's just, uh, I think I like some of the open source tools, but you need to be really careful about downloading stuff that you don't know where it came from 

[00:56:46] Marcus: now in here.

[00:56:47] Marcus: I will say one thing that they do mention in here is that his one password was not itself protected with two factor authentication. And, you know, 

[00:56:57] Vic: yeah, so that he should have that. Yeah, there's a certain [00:57:00] level of security that you really 

[00:57:01] Marcus: need to kind of put on something that is that important, right? So Please secure your stuff.

[00:57:06] Marcus: All right. BNY America's oldest bank signs multi year deal with open AI, right? This, this is, this is where I think the value is going to actually come from. 

[00:57:13] Vic: Yeah. Well, they are just sort of, uh, I don't know, embedding themselves in, it was the federal government last month, and now it's a Wall Street bank, you know, BNY is a huge, really established bank, and every time they check off one of these, it's more likely they get the next one.

[00:57:32] Vic: Mm 

[00:57:32] Marcus: hmm. Tencent releases Turbo AI model that says it's faster than DeepSeek. Of course, you know, Tencent's gonna compare to DeepSeek. Um, But yeah, you know, did I tell you that when I was in Riyadh, I saw like a 10 cent, um, skyscraper? Yeah, it's really interesting to see like, like American tech, uh, companies have buildings in, in the same financial district as like trainees.

[00:57:53] Marcus: Yeah, that's kind of interesting. Yeah. You know, just kind of an interesting thing that you would never see in America. Yeah. Right. So just kind of an [00:58:00] interesting thing. But I mean, look, we've said everybody's going to have their own models, their own frontier models, right? So of course, Tencent would have their own.

[00:58:07] Marcus: Yeah, it's I mean, how would you think about the Tencent one like kind of similar to Amazon? I mean, they're much bright, you know, they're kind of like Amazon plus meta As a business. Yeah. So, right? 

[00:58:19] Vic: Yeah. I, I think there's a big Chinese tech conglomerate, I guess. I guess. Yeah. Amazon plus Meta is pretty good.

[00:58:27] Marcus: Yeah. Because they've got like the whole Alibaba thing, but then they've got the whole WeChat thing. Right. So, you know. The WeChat is the thing that, uh. It's the everything app. 

[00:58:34] Vic: Right. 

[00:58:35] Marcus: All right, two stories about meta now. Um, the first is that meta is projected. They're going to spend 200 billion on a A. I.

[00:58:44] Marcus: data center. This story came out of the information, which almost nobody is going to have a subscription for, but we keep it because every once in a while they get a good scoop on Silicon Valley. 

[00:58:53] Vic: Yeah, Apple came out with a big announcement today. Medic, you know, their lily came out of announcement. So, you know, the trump [00:59:00] effect, I think, is causing some investment.

[00:59:04] Vic: I don't know if, I think some of these might have been happening anyway, but, um, but meta is aggressively building capacity, assuming that AI is gonna be really impactful. Yeah. They'll need the spot. 

[00:59:18] Marcus: Apple had an, apple had an announcement too. I mean, it's not an AI announcement, right? 

[00:59:21] Vic: Yeah. But, but it was, it was data centers.

[00:59:23] Vic: Yeah. Yeah. Um, and Zuckerberg, the article that. People won't be able to see he is quoted saying it had rather have excess capacity and have, you know, spent more money, even if he spends it too early, that he is, he doesn't want to be caught without capacity. 

[00:59:40] Marcus: Yeah, I think that's, 

[00:59:40] Vic: I think that's right. So they're going full steam into this.

[00:59:44] Marcus: I think that's right. All right. And then finally, Meta is, um, releasing Aria Gen 2, um, which is a new model. Is that right? It's a new, oh, no, no. New product. This is their glasses. It is the glasses. This is the ray. This is the RayBan glasses. Okay. It has, 

[00:59:59] Vic: [01:00:00] it has technology models in it, but it's a 

[01:00:02] Marcus: hardware.

[01:00:03] Marcus: I've worn these. Oh, you have? Did I say about that? No. So, so I have a friend who works at Meta. Okay. And so he's got the glasses. Yeah. This is the best glasses thing. I've, I've, yeah. I've tried yet. Uh, yeah, for sure. For sure. They're getting real close. It looks badass. I mean, it looks real good. They're, they're getting real close.

[01:00:20] Marcus: Um, they 

[01:00:21] Vic: have a blind lady. Shopping and she's blind, right? So she says, can you show me the, um, red onions? And, you know, there's a bunch of round fruits and vegetables and the glasses are really helpful for that use case. 

[01:00:37] Marcus: And, and the speakers, which I think is probably the most impressive thing, the speakers, uh, well, actually the camera is pretty crazy too.

[01:00:44] Marcus: Like, cause it can just, it's got a little camera that you can barely see. But there, there is a camera on these, on these things and the quality of the pictures that it takes is like really good. 

[01:00:55] Vic: And it, it knows where you're looking. Yeah. Oh yeah. Yeah. 

[01:00:58] Marcus: Oh yeah. But the [01:01:00] speakers on them, I mean, you really wouldn't need AirPods.

[01:01:03] Marcus: Yeah. Cause you, you could talk on the phone with them, you know, so it's, this is kind of the first time I've seen meta on the hardware side, like finally kind of get to a place where I'm like, okay, this is, you know, and look, they did it by partnering with Ray band, a real glasses company, right? I mean.

[01:01:20] Marcus: Which is, 

[01:01:20] Vic: yeah, and, and they look pretty good. I mean, they're not like a Google glass. Those were ridiculous. Those were 

[01:01:28] Marcus: ridiculous. No, no, listen, they look good. I've seen them, I've worn them, they look good. They're Ray Bans. 

[01:01:35] Vic: Yeah, so, it's uh, it's probably early still, but in another five years, people are going to be wearing this around all the time.

[01:01:43] Vic: People are going to be 

[01:01:44] Marcus: wearing these. I mean, finally, I came to the conclusion after experiencing these, like, No, no, no. It's coming. It's definitely coming because here's the deal. Unless you like really looked at somebody's glass, you wouldn't know. 

[01:01:58] Vic: I mean, you can see he's wearing them [01:02:00] right there. You wouldn't, they look like just slightly bigger, but you wouldn't notice it if you didn't know to look for it.

[01:02:06] Vic: You wouldn't notice you, but 

[01:02:07] Marcus: you might think he just has, he bought some slightly bigger glasses. Yeah. Um, all right. Solid show, solid show. Um, do we have any, uh, cool guest episodes that are getting ready to come out? 

[01:02:17] Vic: Uh, yeah. So we have Stuart Clark from premise. Oh, that's great. Premise is, is a huge, uh, you know, employer, primary care employer, site based company.

[01:02:27] Vic: Um, not a lot of people have really known much about it. So I dig into it with, with Stuart Clark, who's the CEO. And they, um, they just are launching a sort of a new plan with their employer partners so that you would have insurance through them. So that'll come out Tuesday. Um, yeah, I think, and then we have, uh, a VC right side capital is maybe the next week or the week after.

[01:02:52] Vic: Good. Well, this, well, let's do Clark episode. That's 

[01:02:54] Marcus: yeah. 

[01:02:55] Vic: That's on Tuesday. I'm excited about it. Yeah. Awesome. 

[01:02:57] Marcus: Well, I'll be tuning in to listen to [01:03:00] that and, uh, thanks for partnering on the show and I'll see you next week. 

Yeah.