141 – The Trump-Elon Split: GOP Tensions, Debt Ceiling Risks, and Healthcare Fallout

Marcus: [00:00:00] 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. 

Vic: Alright. How's it going? It's going well. Entertaining, uh, social media day today. 

Marcus: Yes. Very thankful that, uh, they chose a Thursday that's to do this. That's right.

So like this whole episode didn't go Yes. You know, down the garbage disposal. Right. 'cause we didn't know the biggest social media thing, right? Yeah. Uh, I don't know man. I don't, I don't think there's anything to, to talk about other than to just like get at, get right to it. 

Vic: Yeah. Yeah, yeah. Yeah. The two biggest egos maybe in the world are stop their 

Marcus: bromance and they're now fighting.

I mean, you still got Putin Xi and Kim Jong. Okay. Maybe in the us maybe the US Yeah, certainly. Certainly in, in North America. Those are the two. Yeah. Um, alright man, well let's dig in. Yeah.

[00:01:00] Uh, so everybody knows by now, you know, if you're listening to this on a Saturday, uh, I'm sure whatever we say now has evolved into many further steps, but at least, uh, we will capture our thoughts about it, uh, in the day that it has happened. So today, um, what had been building for about two weeks, uh, really sort of came to a head.

Elon Musk and President Donald Trump, um, are now in a very, very, very public fight. Um, it is somewhat over the big beautiful bill that Emily and I sort of went through in detail. 

Vic: Yeah. 

Marcus: Um, 

Vic: yeah, she had have mentioned that, that was really helpful. I was outta town, but that was good. 

Marcus: Yeah, no, it, it was, it was helpful for me too.

It was self-serving. I, you know, I was trying to kind of wrap my arms around it, and so obviously Emily's always great for. Uh, digging into those things and, and, uh, you know, standing up to, to good questions. Um, but yeah, the, the, the big beautiful bill has become highly [00:02:00] controversial and, uh, you know, for obvious reasons.

I mean, it was, it was controversial on its own. But this week, Elon Musk came out, and I think it was yesterday, said, you know, I can't take it anymore. Uh, this, this bill is parkville. Mm-hmm. It's, you know, abomination all, you know. Yeah. Use all sorts of words. Right, right. And that was sort of the starting point of it.

Uh, I was, uh, catching a little bit of, uh, cable news last night, and they showed, you know, rep Mike Johnsons, speaker, Mike Johnson, uh, up there trying to, you know, diffuse the situation. Right. But it had boiled over already. And today, Thursday, uh, it, it has fully exploded, imploded, whatever you wanna say about it.

Yes. Um, Elon and Trump are full on fighting on their respective social media platforms. Yes. Which was always, which they 

Vic: both have. Significant reach on. Yeah. 

Marcus: This was always the thing that I, I was like waiting to happen was what happens when they start fighting on, on their different social network mm-hmm.

Platforms. Um, it really is amazing to see [00:03:00] how the world has bifurcated into social platforms that an individual owns. We truly are in the era of Citizen Kane. Yes. You know, this is, this is what that movie was really about. Yeah. Um, but now it's like out in the open, the richest people control media businesses and, you know, it's like they may let other opinions be seen on there, but not more than their own.

Yeah. You know, 

Vic: they, but they control the algorithm. They control their reach of Yes. Each person posting. Yeah. And, 

Marcus: and, and, and, uh, X is. Far more powerful than, than Yes. Truth, um, just as a platform, you know, we, we don't need to talk about whose brand is more powerful, whether Elon's brand is more powerful than Donald Trump's brand.

Uh, I would say it's probably not. Um, but it's, it's up there, man. It's up there. It's very, very high on, on the list. And so, um, Elon talking about starting another, you know, political party and these kinds of things, look, the speed with which, um, the technocrats and the Republicans [00:04:00] came together, um, sort of as a, you know, um, enemy of my enemy as my friend mm-hmm.

Uh, partnership. Yeah. In order to, you know, win the election. Everybody was wondering how long this would last. And, uh, not long is, is, is the answer. Right? Right. Not long. It basically, it didn't even last a full year because I, I don't think this year, uh, last year, this time. They had fully locked in. 

Vic: Yeah, I think 

Marcus: that's right.

You know, I don't think they had fully locked in, you know, from a partnership perspective. And so, um, I don't think it lasted a year. And, you know, where we go from here is very uncertain. All the markets are down, crypto is down. Um, you know, it's, it's, uh, it's, it's an uncertain path forward. I, I do think that this will create a tremendous amount of challenge for the bill.

Uh, I do think so, because many of the people who were elected were elected because of the tech. Yeah. Grows not kind of pure old school, GOP. And so we're, we're, I think we're [00:05:00] about to get a good sense of what the, you know, what the breakdown is between. Maga old school, GOP, and then, you know, the tech bros who, who glommed on to the Republican party.

Right. But now who knows? They, they've always had libertarian, you know? Yeah. Tendencies. So for them to break off and say, let's disrupt something that's like core to their ethos. Right. Right. They're not traditionalists, they're not institutionalists. So this is, uh, this is totally from the playbook for them.

Um, so I don't know. I, I just set the table. Yeah. What do you gotta say about that? 

Vic: I agree. I think it's sad, but it was sad before today. It just sort of the, I mean, we have pulled up a, I guess you call it a tweet, a post by Donald Trump about the easiest way to save money is to end Elon's government subsidies.

And then six minutes later he comes back with SpaceX will begin [00:06:00] decommission its Dragon spacecraft, which. Which just went to recover several astronauts that were in the International Space Station. So it's sad to me in the sense that, um, these are, you know, the president of the United States and the wealthiest man in the United States, maybe in the world.

And it's just a really bad role model for our citizen, for the, for the society. It always was. It always was. Yeah, it always was. Yeah. It was before today and now it's just sort of becoming much worse. And this is the nicest of the back and forth fights. It's a lot more ugly things that are going on right now, and I'm sure it's gonna get worse for you.

Yeah. 

Marcus: We, we selected this link for the show screenshot and for our show notes because it's, it's, uh, it's the business. It's not the muddling Right. It's indicative 

Vic: of what they're, how they're fighting, but it's not all the really ugly [00:07:00] muley. 

Marcus: Yeah, yeah. The, you know, um. Everyone who's listening to this will know, because what news is gonna travel faster than this?

Yeah. Um, that Elon, uh, has, uh, accused Donald Trump of being in the Epstein, uh, Epstein files. Right. Um, which I don't think is something that most people thought wasn't true. There's plenty of pictures Trump. Yeah. I mean, no one's gonna be shocked about that. I, I think Yeah. That, that's, that's not like a surprising thing.

Um, but, you know, it's just the idea that we're going to this level of mudslinging, and I think the reality is that they both probably have a fair amount of dirt on each other. I mean, you know, that's, yeah. You know, you get, you get pretty close. They've spent a lot of time together. They, you know. Yeah. Um, it's just not that surprising.

Right. But the, the, the fissure and who goes where, you know, a lot of people on, on X have been having a lot of fun talking about David Sachs. Right. You know? Mm-hmm. And, and kind of how this plays out for him. I mean, you know, this is Elon's co-founder and PayPal. Right. You know that both guys are from South Africa.

Yeah. You know, like literally, you know, they're kind of best friends. Right. And then, [00:08:00] you know. Sachs is in the White House. Yeah. 

Vic: Right. Yeah. 

Marcus: You know, he's in, he's in the cabinet. I mean, where, where does he go? You know, how does this play out for him? So there, there's a, there's a lot of fallout that, uh, could happen if these guys can't find a way to work back to at least a place where they're not dunking on each other.

Like, I, I, I question whether or not, um, especially, and for me, this is less of an Elon thing, uh, because his track record on this stuff is less known. Trump's track record on this is stuff is, is actually pretty known. You know, um, you know, once you kind of cross him mm-hmm. That's, yeah. It's not 

Vic: a lot of people that have come back.

Marcus: No, no. Um, you know, uh, and it's, and it's not that he, he, he can be cool with, with business and taking, you know, shots and things like that. He doesn't generally, uh, appear to take these things very personally. Um, but he doesn't forget, you know? Mm-hmm. And [00:09:00] nobody should forget. Right. And, and this was, this was, uh, for the president of the United States, and I would consider his role to be more important than Elon's.

Right. Yeah. For the president of the United States, this was a significant betrayal. Right. And so, um, once someone does this to you, uh, how can you let that person in without having all sorts of eyes and guard guardrails in place Right. And things of that nature. Right. 

Vic: Yeah. I mean, I want it to be, I'd like it to be over as soon as possible.

I mean, I don't care about their, you know, bromance falling apart. I'd like the president to run the damn country. And I think David Sachs is, is doing a good enough job at his ai, crypto czar, whatever that is. Um, I don't think it will be helpful to change out that role, but I, I have no knowledge of what Trump's gonna do.

I mean, I'd like him to stop [00:10:00] posting ridiculous things and go back to actually trying to figure out the budget, figure out our international policy, figure out trade deals. But I'm not sure that's gonna happen. 

Marcus: Yeah, I mean, I, I, I think what you just said makes an interesting point, right? Which is, um, okay, so, so Elon decided today's the day I'm gonna dunk on Donald Trump, right?

Mm-hmm. So he sort of decided that today, um, the interesting thing is because of the nature of how, um, I. Not just Donald Trump, but even like the White House socials, you know? I mean, I feel like they, they've been very influenced by each other, you know? Yeah. Everyone has sort of like spun everybody up into this highly disrespectful posture.

Yes. Where it's the default, the default is to be highly disrespectful, you know what I mean? And, and call it entertaining. Yeah. The 

Vic: formality and the, um, the respect for the White House tradition went out the window in a [00:11:00] long time, not a long time ago. A couple months ago. Couple months ago. Yes, 

Marcus: exactly.

Exactly. You, you know, a few months ago. And, and so it's, it's a, it's a lot of fair turnabout. Right. You know what I mean? Mm-hmm. Uh, you know, with, with President Trump, because of that, there's no, um, you, you can't say people are throwing P shots because this is kind of how he operates. Yeah. Right. That's right.

He, he's setting the model. He, he's establishing how. How we should all behave. Right. Right. I mean, that's, that's what he's doing. So, yeah. I mean, look, I don't think there's much more to say about that. I don't wanna belabor the point. Mm-hmm. We've been talking about it for about 10 minutes. Yeah. But, um, it's hard, it's hard to, uh, start the show with anything else given Yeah.

The importance story. 

Vic: Yeah. And it's the biggest story of the day by far. Yeah. Yeah. 

Marcus: And until it's resolved Right. It will be the biggest story. Yes. Right. I mean, until, until there is resolution to this. Um, and we'll see, will there be resolution. Right. I mean, you know, uh, the, I tell you what, [00:12:00] it's going to be a massive distraction.

Vic: Yeah, 

Marcus: it's going to be a massive, massive distraction. And also it's not the, uh, and I'm using these two words as, as a euphemism. I don't mean them in a literal sense, but this is not the Civil War that people were projecting. People were talking about the widening rift between genders or the widening rift between the left and the right, or, you know, all these types of things.

What, what we did not fully anticipate was sort of an implosion of the Republican party at this level. Right? Everyone knew there was gonna be a falling out, but now that it's here, it's on our doorstep. We're, we're now, we're now living it live. It's not theoretical. You do realize that the, the, the scale of those differences and how actually the tech bros are in their own way, a form of the elites, you know?

Yeah. And maga truly are the true populace, right? And so you can now see this, wow, you know, what happens when they couldn't get along? Long enough to beat the Democrats. Right. You know, you know what I mean? [00:13:00] Like, like they won the election, but that was really the battle. It was what they were able to do once they won that battle.

Yeah. That was the war. And, and if they implode and have a war amongst themselves and lose this window and then, you know, look, we're, we are 16 months away from the, the midterms. 

Vic: Yeah. Well, I mean that, that's true. And that's, that's a thing. 

Marcus: And I never gave the Democrats any credit for being able to come back in the midterms on their own steam.

But this, this is different. This is different. 

Vic: Yeah. But I have a, there's a nearer term thing that I'm concerned about. Okay. Which is, um, Scott Asin has said the treasury will run out of money and need to raise the debt ceiling. Yes. Sometime in July. 

Marcus: Yes. Yes. 

Vic: And there's a [00:14:00] chance that the big beautiful bill, you know, which has not passed the Senate yet, and then will need to be reconciled.

I don't think the Senate, there's any chance the Senate will pass the exact same bill will need to be reconciled if Elon and his group of followers get their way, and I'm in favor of, of cutting the deficit. They get their way too much. You may not be able to pass a house bill, so the Senate could, could make significant changes due to lobbying or whatever.

And then the health doesn't, there's not a lot of votes there. Yeah. And so we would not get the, the continuation of the 2017 tax cuts. Which would feel a lot like a tax increase. And then we would be under this very fraught [00:15:00] political environment where the Republicans are fighting each other and the Democrats are not gonna come to save them.

Where we, we have to extend the debt ceiling. And it's not clear anyone has the votes to do so. That's a really bad set of things. Yeah. Yeah. And I'd like to think that people could be adults and get their act together, but I'm, I'm nervous about that. 

Marcus: Well, I mean, it does feel like there's a little bit of the calculus in this, right?

Is to make people nervous about that. Yeah. If it, it feels like it to me. Yeah. Yeah. Maybe like, like that's right. Like that's a little bit of what's going on. And, and I'm glad that you brought, I'm glad that you brought that up. Right. So it's, it's June 4th as we're recording this today. Yes. It'll, it'll ship to the market on June 6th, um, when in July.

Our deadline, it's not clear, 

Vic: it's around the 15th, but I think there are a few extensions Yeah. They can pull off to get another 30 days in 15 days. I, I was 

Marcus: gonna [00:16:00] say, so let's call it 60 days. Yeah. Yeah. Let's, let's say we have 60 days, right? So as investors, right. Um, and, and of course we're not traders, right.

We're long term investors. Yeah. But, but yeah. But maybe that's even more important as long term investors. How, how important is it, is it for us to kind of put our heads down, do work, and not get too swept up into what's happening for 30 days and just kind of let the theater play out and check back in, in 30 days?

Vic: It won't affect venture markets. I mean, my, my view is that there is no, there's very little approaching zero chance that by September 30th this isn't fixed. So from our point of view in venture markets, the, the government, the US government's going to finance itself and it's theater, but in stock markets and bond markets, I [00:17:00] think there will be a lot of volatility.

Yeah, volatility, the big stock up spoke up today. Yeah. Yeah. It's not quite a 20, but it's, but, and I think there's gonna be a lot of ring ringing of hands and worry. I think it will not affect our assets, but, but when the, you know, when the president and the richest guy in the world can't get their act together and are, are yelling at each other like four year olds, it makes the bond market nervous.

Marcus: The, the, the, the interesting thing, uh, you know, the, the interesting thing is, uh, that these two guys do have tremendous egos and, and, and following Yeah. People, for both of 

Vic: them. 

Marcus: For, for both 

Vic: of 

Marcus: them 

Vic: will, for both of them, for 

Marcus: both 

Vic: of them vote based on what either one of them says. Yeah. And they will call their, their [00:18:00] political leaders.

Yeah. And like, I think they have, they both have a track record of being able to get out the vote and, and influence people. 

Marcus: Uh, it's, you know, another thing, gosh, I, I feel like we're, we're taking so much time to talk about this, but, but, but another thing that that is, um, interesting is, you know, the, the, I, I haven't seen Elon talk about it directly.

I'm seeing a bunch of post talking about Elon Colley for, for Trump's impeachment. Um.

You know, where can more damage be done quickly? More quickly? Right? Can more damage be done to Tesla and SpaceX, you know, before it can be done to the, the chance of this bill happening to, to sort of force Elon's capitulation. Like, I, I think that's another interesting game theory thing to sort of play out is like how much damage can be [00:19:00] done to B Because look, uh, I mean, even though the international trade courts, you know, come back and said the tariffs are, are not, you know, not quite, quite legal or whatever, um, there's a lot of things that this administration is, is, is doing that are very unprecedented, very, very quickly, very, very aggressively when they feel, you know, I.

They need to from the perspective of negotiation. Yeah. And it's not the, you know, uh, this, this post we have up here, you know, where Donald Trump says The easiest way to save money in our budget, billions and billions of dollars is to terminate Elon's government subsidies and contracts. I was surprised that Biden didn't do it right.

Um, how, how long will it take to make such an impact to the Tesla stock that. Elon shareholders, et cetera, kind of say, okay, you, you, you just push the red button and you're actually not strong enough to over to overcome this. Right. At the end of the day, you're a [00:20:00] businessman. Like you, you don't have any, you can link information, you can leverage your X platform, but like you're true ability to wield power, you know, you can, you can say, okay, I'm gonna turn off starlink.

You know, like there's things you can do, but they ultimately destroy the value of your enterprise. Right. Um, and it's like, how deep can he go down his, you know, and look, is he on K? Right. You know what I mean? Like, is is he currently actively on drugs and, and is that impairing his ability to sort of properly weigh out?

Um, he's already in a different universe from all of us. Yeah. He's so rich. He doesn't, you know, his, his sense of risk and loss are so beyond anything we can understand. And so, you know. Is he unable to properly calculate, uh, the game theory to really understand that his moves are limited compared to those of the President of the United States?

Vic: I don't know. I mean, my guess mm-hmm. Which is all all, yes. I've [00:21:00] never, I've never met either one of these people. Yes. No, we're, we're, we're, we're just hypothesize. Right. I mean, my guess is that, I mean, I think Elon has done a variety of drugs for decades. I would not be surprised if he still does them now, but I don't think that is changing his perspective.

It could be wrong. Oh, come 

Marcus: on. If, if he's on drugs that's not changing his perspective. I mean, I think he's been doing You wouldn't say that about anybody else. I mean, that's, that's like No, 

Vic: I mean, okay. Okay. I think he has been behaving a certain way for a long time, and I don't know that I see a lot of change from.

The past, but I don't, again, I don't know 'em well. And what I was gonna say is I think both, what's scary is both these guys don't seem like they are likely to back down. 

Marcus: No, they don't. 

Vic: And I think Elon has the governance control [00:22:00] in X and Tesla and SpaceX to, it's his decision. I don't think that the board or the investors may be dead holders in Tesla, but it would be a while.

I, I, I don't think there, I don't think there's gonna be a capitulation moment where he has to do something because someone has power over him. And Trump is What If there's a Tesla sell off though I'm sure there's gonna be te Tesla's way down 

Marcus: compared to where it was. Uh, it dropped $47 today, opened at 3 22.

I closed at 2 84. 

Vic: I have no actual data, but my belief is understand that he's not gonna react to that. Understand. 

Marcus: Let's move to all the other stories that have nothing to do with this. Yes. We just spent 20 minutes talking about it, but I, I think, [00:23:00] I think you have to, I mean, you know, like, yeah. It, it's, it's the biggest story of the year.

That's not everything Donald Trump did in his first a hundred days. Right. You know, it's like, yeah, I think that's right. Alright. We're gonna try to run through these, right? Uh, yeah. So let's, let's start where we're on Bloomberg. Uh, the US economic activity ebbs price rises in the fed's beige book. Vic, what is the beige book?

Vic: The beige book is the qualitative, um, I don't know, grouping of all of the, all of the feedback, the nine different fed agents, the fed banks get from their customers in the different regions. It's qualitative, so it's it's stories anecdotal Yeah. And quotes and how people are feeling. Right. And it was negative.

People are not feeling good. Yeah. They're feeling that was yesterday. Right? They're feeling worse today. Yeah, for sure. Um, and prices are on the rise and it [00:24:00] was, it was bad all round. Yep. It's hard. It's not quantitative, so it's hard to say how much, but, but it's wasn't good. Yeah. 

Marcus: So, and, and I, I think looking through the article, we couldn't fully tell whether or not this is a quarterly thing, a monthly thing, but it seems that the day that they were pulling was, uh, was ending through mid to late May.

Mm-hmm. Um, so, you know, it it's pretty recent. Yeah. Uh, in terms of, you know, that, that negative sentiment. So from, uh, today, uh, wall Street Journal, bond yields fall after week, data spurs, hopes of a rate cut. 

Vic: Yeah. So, um, sorry, this is from yesterday story. Yesterday. The ISM, um, is a, is another sort of.

Qualitative, they put it into a zero to 100 with like over 50 is growth and expansion under 50 is declines, but it's still a polling thing. Mm-hmm. And it went down to 49, which is, you know, recessionary signal. Um, and then the a DP [00:25:00] job report came out very negative. I've stopped really paying that much attention 'cause it doesn't seem like it's that useful anymore.

Um, and so the bond market took both of those things to suggest the economy is, you know, not growing anymore. And the Fed might cut and yields came down pretty dramatically in one day. Yep. Um, I'm not sure that this is that definitive, but, but you know, we had the beige book and these indicators all come out at the same time.

Marcus: Yep. Yep. So I thought this was a really interesting story that you found in Wall Street Journal. Economists raised questions about the quality of US inflation data. So all models are based on certain inputs. Mm-hmm. And they weigh those inputs and they use 'em to sort of come out with some type of index score.

That is what CPI is, right? It's, yeah, it's an index and it, it's made up of the sum, it's the sum of many parts and yeah, it's supposed to reflect [00:26:00] the 

Vic: prices of what people buy in the economy to the consumer. Yeah. Yeah. 

Marcus: Right. Um, but, but what's interesting is that if, if any of those, uh, different key data points that make up the index gets a little wonky, uh, then you have to sort of fill it in with, I guess what we would sort of call simulated data, right?

You have to start estimating. We had a huge jump over the course of the last two quarters of, uh, estimation. In the methodology of CPII, I think you said, because there's been a hiring freeze in that. Has Yeah. Changed our, our, the validity of our data. 

Vic: Yeah, that's right. So for the last five years, what, well, just to back up what BLS Bureau of Labor Statistics does is they try to actually walk into stores, restaurants, facilities, or they call the manager and they, they try to get the actual price for a particular good.[00:27:00] 

Um, and they have humans that are, that are literally doing that. And there's been a hiring fee freeze since January. And it's not clear to me how that one leads to the next, but for the last five years they have, you know, they can't find every price point that goes into the CPI. So on average, it's between five and 10% of the prices.

In any one month, they can't find. And yes, they, they impute the value, which means they do the best they can to estimate it. And this month it was approaching 30%. It got to like almost 27, 20 8%. They couldn't, within the timeframe, get the actual prices and they had to impute the data. Um, economists saw that and were asking why.

And the BLS pointed to the, to the hiring freeze. I mean, I think the real truth [00:28:00] is why are we still calling around asking what the price of butter is? Yeah. Can't we get a data feed from the five biggest grocers in the country and have it be automated? I mean, I don't mean we don't do stock prices like that.

We don't, I mean, we don't do anything like that. The government is way behind. I'm sorry. They have a hiring freeze, but it just, it's ridiculous that this is. We're not gonna be able to rely on these CPI as with as much certainty as before. 

Marcus: Yeah. To, to me, to me, this is like classic Clayton Christensen value network stuff, right?

Mm-hmm. It's like we didn't quite understand that the, the key to, to these, you know, models working was to have the humans, uh, employed by the government. Yeah. Right? And, and I, I just wanna read this paragraph because I think it just sort of shows how the dominoes fall, right? Yeah. Uh, [00:29:00] so CPIs is critical for determining inflation.

Vic: Yeah, 

Marcus: right. So the in this is in quotes, right? The inflation rate determines how much social security benefits go up each year and where federal tax brackets are set. Private sector contracts, such as wage agreements between companies and unions routinely reference the inflation rate payments on $2 trillion of inflation protected federal bonds hinge on the inflation rate, as do yields on standard treasury bonds.

Businesses, investors and policy makers rely on the rating to guide their decisions. The Federal Reserve is laser focused on inflation data when it sets interest rates for the country. All we know all of those things are true, right? End quote, yes. You know, all those things are true. And then you look over at this chart in this, in this article, uh, the, the alternative estimation methodology in, in CPI has doubled from its previous high, like previ previous high over the course of the last eight years.

So it is very rickety right now. [00:30:00] 

Vic: Yes. 

Marcus: Right. This, this core data point is now wildly less accurate. That is, it's like the fulcrum for all these other decisions that we make. And it's so inaccurate today because of a hiring freeze in the government. Did like, did anyone think about 

Vic: that? No, I don't think anyone thought about that.

And these are, these are prices. I mean, you could contact Kroger and Whole Foods and Publix and get them to send you a data feed. I mean, the, the way we did this in 1950 does not need to be the way we do it going forward. And so, I'm sorry they have a hiring freeze. But the bigger problem is it should be automated.

I mean, there's no reason that we have to have humans calling the local store and asking what. A [00:31:00] pound of butter costs, or even worse walking in, but apparently that's what they do. 

Marcus: The average age of a US Senator is 64, so I think, I think that has something to do with it. Yes, that's right. I think that has something to do with it.

Uh, okay. Into the VC rundown. Clara Home Care raises 3.1 million in seed funding. This is a San Francisco based company that is helping, uh, families to find professional in-home care senior caregivers. Uh, the round was led by Torch Capital Virtue and Y Combinator with a bunch of angel investors. We've seen a bunch of these businesses.

We've looked at a bunch of these businesses. It's very hard to scale these businesses. I think we've been talking about the importance of it. You know, you've heard me talk ad nauseum about my dad's situation and the importance of the home caregivers, uh, to sort of the quality of life that we as a family are able to experience.

It's not just my parents, it's also me. Yeah. You know what I mean? 'cause I don't have to do it. Uh, so this is incredibly important and it is really difficult to get great caregivers. You know, I, I [00:32:00] feel really lucky for the team that I've got, but it's, it's really hard. Still, I can't fully explain why, but, um, this is a hard, hard business to scale.

So, um, I think this is great, but also I sort of look at the, the investors here and I wonder how much experience they have with just knowing the difficulties of scaling this type of business. 

Vic: Yeah, that, that's right. It's, it's a really hard space. I have lost money, I think four times in this space. I have another asset right now.

Get another shot on goal in this space. I, another shot on goal with great. Entrepreneurs, two brothers that you know. Oh, yeah. Um, and it's really hard. I'd bet on them, but Yeah. But it's hard. Yeah, I bet, I bet on them, even though I said to them like, you know, I've already lost in this space, but I, but I love you guys, so let's figure it out.

Right, right. But it's hard. 

Marcus: Yeah, yeah. No, no, no. It's, it's, it is really hard, uh, from Healthcare Innovation Group, Texas Health Resources among investors in Arch Health. It's an AI based platform that provides hospitals with detailed insights into the actual cost of delivering patient [00:33:00] level care, cost accounting very, very, very hard and very, very, very important, uh, to come up with pricing, uh, to come up with running your p and ls to be able to predict, you know, what your yearly budgets are going to be.

Uh, this is very, very important and very, very hard for hospitals to execute. So makes sense that this would be something that, uh, somebody would invest in. And, and it's a $6.7 million seed round, uh, funded via LRV Health Martin Ventures, uh, Texas Health Resources. You know, so I, I, I think this is a, I think this is a good bet to make because it is a hard space and I think, uh, forward thinking CFOs are looking for help in this space.

Vic: Yeah, no question. This is a incredibly big opportunity if they can get, if they can figure it out. If they can figure it out, yeah. 

Marcus: Yeah. If they can get it right. So, uh, good luck to, uh, arch Health. This is Axios Pro Reserve, NAB's 25 million to fix insurance claims tech. So this is a series B, it's a series, series B [00:34:00] deal.

Um, flourish Ventures led the round joined by BCV Alltype Ventures, eight VC, convex, and Accenture. They've now raised 55 million. They were founded in 2022. Um, and they're basically a tech enabled tpa. So not necessarily selling to other TPAs, um, but they are going to market to compete with other TPAs.

Vic: Yeah. And that mean the tpa, a space needs to be upgraded. Um. It is not very tech enabled. And so a tech forward AI kind of centric TPA. It is pretty interesting. I think it's a good place to enter the space. We'll see how it does, but 

Marcus: yeah, I mean, we've got a platform that sells into this space mm-hmm. And has great success because these TPAs do need a lot of help with their technology.

So it, it, it makes sense to put a shot on gold to compete with the other ones in this space. Yeah, I think that that makes a lot of sense. Um, alright. Outcomes for me raises 24, 20 1 million in funding. Uh, this is a Boston based company. They have a direct to patient AI driven [00:35:00] platform. Um, the Round was led by Sica Ven Investments.

Um, LabCorp is in the deal, forecast Labs is in the deal. Sierra Ventures, um, good group of, of folks around the table. Uh, this is, it looks like for a broad range of cancer types, um, an geographies they are trying to support patients with, um, all the navigation, um, leveraging their genomics, uh, you know, helping them find what interventions they may take on personally, but also finding the, the right next, uh, you know, provider to support them.

Vic: Yeah, I, I think we're gonna see more and more of these, uh, direct to patient in a particular disease state where there's a lot of navigation, a lot of complexity, and then there is a lot of change. And so oncology is, is a great one. I think there's gonna be 

Marcus: several of these. Agree. Agree. Alright. Uh, prepared raises 80 million to expand AI powered emergency response platform.

Um, I, I like, I like this [00:36:00] space. Theoretically. I don't know enough about it to make my own bets in this space, but, you know, my experiences with 9 1 1 are, uh. It's obviously this is, you know, goes without saying. It's, it's a critical service and it's, it's a very, very hard service. It's an often understaffed service.

Um, you know, it's not quite air traffic control, but it is, it does ha carry that same level of stress. And so the more technology that we can provide to help on both ends, um, of the emergency, uh, line process, the, the better. Um, 80 million in new funding tells me they have an extensive list of existing clients.

Yeah. Um, and there's either some scale stuff or there's, or there's some serious build out and technology, but General Catalyst led the round and entries and harvest and first round or are in on a deal. So this should be one to watch. 

Vic: Yeah, that's right. And, and I don't know enough about it, but they had this concept they were talking about in the press release that.

For the non like critical life threatening calls, they triage it [00:37:00] to more of an automated tool, right. So that the, the human operators can work with the, the really critical ones that that's a huge problem with in nine one one call center. So, but yeah, they can figure that out. That would be great. 

Marcus: Yeah. And, and, and look, the volume of 9 1 1, uh, calls is something I know from just like, uh, what's going on here in Nashville is, is going up.

Mm-hmm. Right? Yeah. It's, it's, it's an increasingly used service, right. Um, for many, many things. And so, uh, yes. We, we need, yeah, not all of 

Vic: them. I don't know what the percentage is. Maybe you do are actually like a life threatening emergency. Some of them are urgent, but, but not life threatening. Yeah. They can be triaged.

Marcus: Yeah. One of the really interesting things, just, just anecdotally about these. These, um, these different systems, uh, not the technology systems, but the actual emergency, you know, systems in different uni municipalities is, they don't all live in the same place. You know, some of them live under the police, some of them live under the fire department.

Some of them are independent of both of them. Yeah. And, and so, uh, I, I would imagine one of the, you know, one of the key features is, [00:38:00] uh, meeting these departments where they are and then making sure that they can properly support interfacing with, you know, the various departments that they have to hand off.

Yeah. Information, you know, critical information to, um, depending on whether or not they're embedded in one of those surfaces or they're outside and they have to sort of integrate through phone lines and APIs and things of that nature. So, um, seems like a pretty sticky business once you sort of get into it and you, and Yeah, depending on you.

Yeah. You probably have like right. Low to no churn. Right. Um, so that's probably why all those big name VCs are in the deal. Yeah. All right. And probably the last story here, which is not quite a VC deal, but Oma Health, uh, I know they are fingers crossing their fingers that, uh, Elon and Trump's figured this stuff out before their, their IPO goes live.

Is it tomorrow? Tomorrow, yeah. Uh, boy, man. Yeah. Uh, hinge had better timing than they did. Yeah. Uh, but they're, it's hard to predict when, it's hard to predict. It's hard to predict. They, they are aiming to raise 158 million in their IPO targeting valuation of 1.1 billion. 

Vic: Yeah. I'm, I'm excited to have [00:39:00] them get out.

Hopefully people will look through the chaos. I mean, Amad is a good, good company that, that should. Get out. 

Marcus: Hopefully they'll, alright. Uh, moving on to policy. So healthcare dive, nearly 11 million would become uninsured under the GOP reconciliation bill That so says the CBO. 

Vic: Yeah, so the CBO scores, all the bills, and part of that scoring process is they, uh, discuss people that would lose healthcare coverage and they scored the health, the health side of the bill at 10.8 million over, I think over 10 years would lose coverage.

Um, CBO was supposed to be non-partisan, but then this article identified another nonpartisan scorekeeper that had a lower number 7.8. So either way, it's gonna be a significant number of people as you add in the work requirements, which of course require work. But also if [00:40:00] you're an undocumented, uh, immigrant, you, even if you are working, you can't show that you're working.

Yeah. Uh, and then there's, there's several ways that they're sort of just checking more often. So, um, as Emily said last week, some of these people have coverage at other places, but, but not everyone does. Sure. So it somewhere between seven and 11 million will lose coverage. Um, and that is gonna be negative for health systems and payers Certainly.

And the people that don't have coverage in some other place. 

Marcus: Yeah. So, uh, I mean, what to say, right? I mean, it's, it's the CBOI, I will give it to Emily. I think she made the point that the CBO is often wrong, uh, on, on these things. Mm-hmm. In this article, uh, there's a nonpartisan, uh, budget scorekeeper that said that 7.8 million would lose the [00:41:00] cuts instead of 11 million.

Um, I, I think. It's pretty clear there will be a loss of coverage. Yes. Right. So that much we can say it will probably be in the millions. Right? 

Vic: Definitely, 

Marcus: definitely 

Vic: over 5 million. 

Marcus: Yeah. Yeah. It will, it will be in the millions. Okay. And, and so then it goes to what next? Mm-hmm. Right? What, what happens next?

What fallout happens as a result of that? What other mechanisms are there to provide care for, for those people? Um, you know, one of the things I asked Emily, and, and she had to sort of admit there's a possibility of that. How much more, you know, uncompensated care does that create, especially for your nonprofit hospitals?

How many more ER visits does that create? Yeah. A lot. Right? So the 

Vic: undocumented population, that's where they're gonna go. Yeah, definitely. 

Marcus: Yeah, of course. So, so yeah. So there's, there's all sorts of downstream fallout issues that are not just, um, losses to the roles. Right. Right. For, for, for, [00:42:00] um. Covered entities, um, but down to like changes in behavior, changes in, in, uh, sort of paths into the healthcare system for people.

Mm-hmm. And, uh, and, and not being reimbursed, you know, not being reimbursed, but also having to provide care. Right. You know, for, for, uh, especially for health systems where they've got that mission in the community, the, the nonprofits in particular. 

Vic: Yeah. Yeah. And they, they don't have a lot of margin to cover that, so 

Marcus: No, no.

I mean, I, I, I think about a Vanderbilt, right. You know, where yes, they're an academic research center, um, but they're also like kind of Nashville's er, you know what I mean? Like they're, that's the ER that most people kind of crash into, you know? Right. And, uh, they are already dealing with significant cuts, you know, from the loss of 250 million Right.

From the government. And now on top of that, they may have, you know, an increase in uncompensated care. Right. So, yeah. Alright. And then you, you, you put this story in here about, uh, apple and, and the App Store, and I didn't quite get it at [00:43:00] first, but you talked me through it and now I, I absolutely understand why we're gonna cover it.

So, uh, this from routers, um, apple loses Bid to Pause app store reform order in Epic Games case. For those who don't know the longstanding issue here, it really stems from the fact that Apple, um, has a 30% tax on all transactions that happen inside of the app store. If you are, um, inside of an app. Um, that was, uh.

That that is on an Apple device because you can't really get an app on the Apple device that doesn't go through the app store. So, um, they take 30% of all of those in-app transactions. People have been trying to go outside of the app in order to avoid that 30% haircut, that 30% tax, and then Apple put a 27% tax on all the out of app, um, transactions.

And, uh, epic who has been fighting Apple on this and other matters for quite some time, uh, has, uh, took them to court. And Apple lost in, in appeals court on this. 

Vic: Yeah. Yeah. They lost the regular court then They [00:44:00] appealed it now, lost the appeal yesterday. And so they are not allowed to charge, if, if Fortnite or anyone else, one of our startups or another healthcare company can get the user to go to their website and to complete the transaction and not use the app store where their credit card is stored.

They don't have to pay a fee. And so there. Yeah, there's going to be a lot of attention at trying to encourage people to go, maybe you have like a bundle like Fortnite, you have a bundle where you offer a whole bunch of things, but it's only available on the website or whatever, whatever it is. So I think it's gonna be, it's gonna be negative for Apple, but very positive for our portfolio.

And really any startup, even a big company like Epic Games and Fortnite, it's a lot of money that they're paying to Apple. 

Marcus: You know, uh, I'm an Apple customer. I, [00:45:00] I love the Apple ecosystem as a customer. I've been using Apple devices for almost 25 years, you know, kind of primarily, um, it is hard to be on Apple's side on this one, you know?

Yeah. It's hard to be on their side on this one. And, you know, it, it also is one of those things where I wonder, you know, if they had moved to a 5%. Fee. Right, right. You know what I mean? Like they prob like, probably would've been fine. Probably would've been fine. Yeah. But 27% and it's not even happening in, in app, 

Vic: right?

It's like they were just trying to like give the middle finger to, to the court and just, and it did not make sense. Yeah. 

Marcus: Yeah. And, and, and so this is one of those deals where I, I feel they deserve to lose The good guys won on this one. And yes, you're right. This will allow so much more innovation to happen on Apple devices.

I mean, really. Yeah. You know, instead of like just saying, well, screw it, like I'm gonna go Android first, this will actually allow more, more innovation to, to [00:46:00] go on the Apple ecosystem because 27% haircut, I mean that's, that's like tariff level stuff that we're talking about, right? I mean that's a, that's a terrible loss of top line revenue.

Vic: And, and I mean, apple won't get all the money 'cause there'll be some percentage that go off the platform, but. It's pretty convenient just to have the credit card in place. You're in the Apple ready, you just buy it right there. That's right. They're, they're gonna keep a decent percentage in, in the ecosystem.

Totally. If Fortnite or others can get someone to go on the outside. 'cause they don't really value the Apple ecosystem. 'cause they're playing Fortnite and that's what they want to do. Yeah. Then they, they shouldn't get that, that transaction 

Marcus: basically. I feel like you couldn't convince me that this was something that they should have done.

Uh, and you also can't convince me it's something that they needed to do. I, I can't imagine, you know, a company with this kind of cash position. Yeah. You know, the low churn they have on their, on their consumer base, they needed to be this punitive to the developer base. Yeah. They, they, they didn't need to do this.

Right. I [00:47:00] agree. So this, this feels self-inflicted and like brand destruction and you lost Yeah. Right. You know, why, why'd you do it? Alright. Going into the industry, starting with payers, um, two back toback stories on United Health that are not too detailed, but more just like tracking the, you know, the, the, how UnitedHealth is now starting to, they're starting 

Vic: to figure out their story or Yes.

Or come back and tell their story. 

Marcus: Yes. So, so, um, both of these are fierce healthcare stories. The first is that they posted a shareholder FAQ that offers greater detail on the csuite strategy. So, um, it took, uh, the new CEO. Uh, sometimes Steven Helmsley, who was the, who was the chairman and now is the CEO and chairman, I believe, um, you know, sometimes to kind of get in there, wrap his hand, his arms around everything and kind of figure out, okay, you know, what's what, how, how do we communicate, you know, uh, what we're gonna do from this point forward.

Right? Um, and so we, we have sort of the beginning of that, which is this FAQ. It's, it's not worth talking in detail about the FAQ. I think what's more meaningful is that, um, you know, Helmsley is, is getting his arms around it and now starting to [00:48:00] communicate to the, to the public. Um, it does talk about, in this article, his compensation package, which to me seems pretty reasonable.

Million dollar annual salary, um, 60 million in equity awards, which I think is meaningful because when you look at the stock drop, stock price drop, 

Vic: yeah. 

Marcus: Um, he's incented in the right way. Right? Yeah. You know what I mean? Um, he's incented to grow the value of the company and not take a whole bunch of salary right now.

And I think, um, that's a, that's, that should be a good sign for shareholders. I, I would say. 

Vic: Yeah. Yeah, I think that's right. There wasn't a lot of exciting newness in the FAQ. But, but the, his comp package is, I think, very fair and hopefully they'll start now cleaning up what they have to clean up. 

Marcus: Yeah. Um, and, and they're, they're sort of taking a position, uh, at least from the anecdotes in the article, uh, that they welcome, you know, uh, auditing the, the Medicare Advantage plan and you know mm-hmm.

Basically just, just saying they have no problem being compliant. Right. Yeah. You know, so all things [00:49:00] that, that seem like what you would expect from Yeah. From UHG. Um, but then, uh, they did file a defamation suit, uh, against the Guardian, um, you know, saying that the Guardian basically published a bunch of things that were not true.

Um, and, uh, and they, they sort of focused in on linking things to, uh, to former, uh, CEO, Brian Thompson. 

Vic: Yeah. We covered this guardian story maybe three, two or three weeks ago. Um, and that's right. They've filed a defamation suit and the guardian is not backing down. They, they're standing by their, I think, 20 sources for the story.

So it'll be interesting to see, um, if United really wants to fight through this. 'cause I think it's gonna end up being, you know, they might win, but that they're gonna also in the process, get a lot of other attention on things. So, [00:50:00] um, but they are their Dow at least communicating with the wall, with Wall Street and doing things.

Marcus: Yeah, I mean, the calculus on this to me is, um, it's not something they typically do, you know? Mm-hmm. People have. All sorts of things to say about UHG all the time. So it, it feels to me they, they must feel they have some ACE card on this one. Yeah. You know what I mean? Yeah. Um, because they're just not, I I, I haven't known them for filing defamation suits Yeah.

You know, in the past. So, so it, it'll be, I I I think it's gonna be interesting on both sides. Yeah. Right. I think it's gonna be, I don't think the guardian, like what were they gonna say? I mean, the suit was filed, right? Yeah. So, I mean, it wasn't like the, what we gonna admit to, to it, you know what I mean? Uh, I think they had to say that they have sources Yeah.

And that, that, that they're, you know, um, gonna stand up for themselves. But it, it will be interesting to, to sort of see Yeah. Because we, we, we talked like from the beginning about the Wall Street Journal article. Yeah. And we were like, Ooh, where's the sourcing on this? You know? 'cause these are really strong claims.

Um, and, and. We'll [00:51:00] see what happens 

Vic: with that. That may be coming. Yeah. 

Marcus: They have not filed a defamation against the journal yet. Right. So, uh, I think that that's interesting. Something to watch. Alright. Moving into the, uh, provider sector, Ascension nears a $3.9 billion am surge acquisition. This is from Bloomberg, but Fierce Healthcare is, um, doing a rundown on it.

And, uh, look, I think this is a really smart deal. Um, you know, great for AM search to sort of, you know, be with a, you know, generally you, you know, um, really. Strong, at least historic company Ascension's been dealing with, with challenges kind of since the pandemic. But I feel, I think generally speaking, they're cleaning up their portfolio mm-hmm.

And digging out of the perennial operating losses that they've been dealing with. Um, but AmSurg, as we talked about before, hit and record. Uh, this puts them in a, in a category alongside HCA and tenant, you know, in terms of having like a, a, a proper ambulatory surgical status scale, scaled ambulatory surgical business.

Yeah. Scaled. Yes, exactly. 

Vic: Yeah. And as, as the policy changes come out, I think there may be. [00:52:00] Advantages to having that 

Marcus: Very much so. Yeah. Right. Very much so. Having that optionality. Right, right, right. So they've been sort of, you know, offloading a variety of different, um mm-hmm. Hospitals and different markets.

One that I know a little bit more about is, is, uh, eight hospitals, I believe to Henry Ford Health. Yeah, right. You know, some in a jv, some, some in a pure transition. Mm-hmm. So, um, so yeah, this is, this is, uh, this is a big deal. Yeah. Um, so if they get this one done, I think we're gonna need to watch, essentially.

'cause I think in a lot of ways that probably shores up, um, a lot of their vulnerabilities as a scaled nonprofit. 

Vic: Yes. Great. 

Marcus: Becker's Hospital Review did, uh, one of their kind of, uh, you know, summaries of, of labor, uh, and they found that 38 hospitals and health systems are cutting jobs. Um, so this page was, was created on, uh, January 22nd, but it was updated, uh, at the end of May.

And it, it's starting to kind of give us a sense that. This is gonna be a [00:53:00] consistent wave that we're going to experience more and more and more health systems, cutting jobs. And you know what, what made me say yes, let's cover it is because the sixth thing on the list here is, um, Vanderbilt. Right. And, uh, the job cuts come amid their $250 million cost reduction plan mm-hmm.

Because of the loss of federal funding. Right? Right. Um, and so in here you've got a, a myriad of different types of systems. You've got, um, university systems, you've got nonprofits, you've got some, some smaller, you know, sort of safety net, uh, style, uh, systems. But across all of 'em, they are laying off folks.

Right. Um, and this sort of shows, there's, there's just continued pressure in the health system segment. Mm-hmm. 

Vic: Yeah, that's right. I mean, no one story is that surprising, but. 38 over five months, you know, there's a pretty good drumbeat of of hospital systems laying, laying off workers. 

Marcus: Yeah, yeah, exactly. Um, a lot of administrative roles where mm-hmm.

Where, um, you know, you're, you're [00:54:00] getting a good bang for the buck in terms of salaries. Right. So it's not, it's not a lot of clinicians or nurses, you know what I mean? Yeah. It's, it's those, those white collar jobs that are Yeah, for sure. You know, high, high, highly salaried. Um, a lot of layoffs happening in that space.

Yes. Healthcare dive, Amazon pharmacies, pill pack expands to Medicare patients. 

Vic: Yeah. So I think this is great. It, it is, um, now being sort of expanded where Medicare, they, they have supported Medicaid patients for a couple years and now they're opening up to Medicare. PillPack does a good job, uh, sort of segmenting the pills and making it easy for consumers.

Uh, and then they also, it's kind of interesting. They, they allow you to tell your provider, I'm now, can you connect with Amazon directly? 'cause a lot of. Older folks in Medicare would rather just have the provider figure it out. So, um, I think it's a smart play and a lot of seniors will probably want to use it.

Yep, 

Marcus: yep. Uh, makes, makes total sense to me. Uh, also in her healthcare dive, EPIC [00:55:00] chart's growth and provider T-E-F-C-A adoption. I had never heard of T-E-F-C-A before, uh, but I, I understood what it was in place to serve. So, uh, T-E-F-C-A stands for the Trusted Exchange Framework and Common Agreement. It's a interoperability, um, model.

And, uh, EPIC is rolling it out pretty aggressively. 41% of Epic's customers are currently live, um, with this interoperability, uh, framework in place. 

Vic: Yeah, and this is a big story to me 'cause Epic had a second partner before T-E-F-C-A was created that they were still kind of dancing with and using, and then now they have decided they're moving everything to, to this.

So it, it'll. You know, consolidate everything into this one platform, which will just be good overall. I mean, having data portability is, is good almost, I think for everybody probably. 

Marcus: Yeah. Um, a note sort of at the bottom, uh, is that Oracle is, is also looking to earn this [00:56:00] designation, um, with, uh, the qualified health information networks.

And so this looks like it's, it's, it's gonna be a pretty sweeping standard across the, you know, all the big EHRs. And hopefully that starts to, you know, lower the, the, just the narrative around EHRs being data blockers. Yes. You know, and, and that information being accessible for innovation to thrive on top of it instead of it being, you know, these, these walled gardens of, of information.

Vic: Yeah, that's right. I mean, of course 'cause it's the government, a lot of acronyms, but, um, you become a Quinn when you are fully like into the teca.

So it's all, it's all one big, big data sharing thing. 

Marcus: Awesome. Uh, alright. Moving to pharma, uh, we, I think we only have one story for pharma, but Novartis, uh, they have a cancer treatment called Pluto and it shows positive results in trial. 

Vic: Yeah. So this is good. It's prostate, it's a prostate [00:57:00] cancer, uh, treatment for a particular type of prostate cancer that has not had great treatments before.

So. Positive, exciting. 

Marcus: Great. Uh, and you know, the first good story I've seen for Novartis in a while, which I haven't seen many stores for, for Novartis at all. Yeah, right. Yeah. So, you know, a cancer drug I think is obviously Yes. You know, in the category of things that pharma companies want to see positive results in trials for.

Yes. Uh, okay. Uh, health in US Wall Street Journal facing a cancer diagnosis, exercise and diet couldn't make a difference. Going back to basics might help some patients live longer or respond to therapy data shows. I want to just scroll down to this one paragraph here. Um. A structured exercise program with a trainer helped colorectal cancer patients lower their risk of death and cancer recurrence after treatment.

According to a study released Sunday at the American Society of Clinical Oncology's Annual Conference in Chicago and published in the New England Journal of Medicine, the study spanned more than a decade and is the first to answer conclusively in a controlled TR trial. Weather. [00:58:00] Physical activity can improve cancer related survival.

The, the studies author said patients in the program had a 37% lower risk of death after eight years compared with patients who only received educational information on exercise. Exercise is medicine. That was me. 

Vic: Yes. Exercises, medicine and educating patients is not sufficient. 

Marcus: No 

Vic: structured program means they had a trainer or they had, uh, they had to go to a facility and there was an organization that made sure that they.

Did the exercise. Um, it's, it's not enough to just tell your patients to exercise and 37% is a, is a really dramatic, um, lower range of risk. Yep. And so it's, it's clearly have has a great effect to getting a structured program. 

Marcus: Exercise is medicine. [00:59:00] Yes. But you have to do it. Yes. Yes. And that's why I have a trainer.

I don't trust myself Yeah. To do it. Yeah. I, I will be more obligated to show up for my trainer than I will for myself. 

Vic: Yeah. 

Marcus: So it sucks. I don't wanna pay for it. But folks, yeah. I'm the same 

Vic: way in my, my, um, Pilates instructor and yoga and trainer, I have all of those. They charge me. Like if I just sleep late and don't go, they charge.

I can, I can change it if I give 'em 24 hours notice, but I just tired from the day and don't go, they, I still get charged. Which is a good incentive. Like That's right. It's, I'm never. Happy with it. I end up going because I don't want to get charged. 

Marcus: Exactly. Alright. Into the AI rundown fierce biotech, FDA clears first AI tool for breast Cancer Risk prediction from Startup Clarity, C-L-A-I-R-I-T-Y.

Um, this is exciting. This is really, really exciting. And, uh, uh, listening to this podcast, we are gonna be releasing an episode [01:00:00] very soon, I think maybe the episode right after this. Yeah. Um, we brought back, uh, Dr. Rin Kippur, who we always have on Yeah. Uh, to talk about ai. And so th you know, if you're interested in AI in, uh, the clinical setting, you won't wanna miss that episode.

Mm-hmm. You know, we talk about the FDA and the importance of them. Yeah. This particular issue. Yeah. Yeah. Yes. We talk about this issue, so definitely want to, you know, put a, a, a note in for you to listen to that episode. But this is amazing news, Vic. 

Vic: Yeah. I mean, it's great to see the FDA taking a position.

And assessing the tool and coming up with it is, it's very positive. And the screening is now approved. They have de novo clearance, so it, it's not an F 10, uh, five, 10 K, this is de novo, which is harder. Um, and I think the benefit is, it, it's still is in the mammogram, uh, workflow, but they have an AI tool trained on, I forget what it was.

Um, a lot of maybe eight [01:01:00] images, 8 million, seven, I dunno, a lot, a bunch of images. Um, and so they can, they can spot, uh, anomalies before the human eye can see that there's a, a cancer, uh, lump there forming. And so the AI is better at screening. And the FDA looked at the evidence and, and cleared it, which is, which is wonderful.

All we want is the FDA to. Review the data and make a decision when it is better for the patients. And it's great to see them doing that. 

Marcus: Uh, just to give a little bit more, uh, detail there, uh, the AI model behind Clarity Breast was trained on millions of images and validated across more than 77,000 mammograms from five geographically distinct screening centers, including hospital based and freestanding facilities.

So, pretty well tested. Yeah. Yeah. And and worthy for FDA clearance. Yeah. So awesome, awesome, awesome. And let's get a lot more of these solutions in place. Okay. More diagnostics, please. [01:02:00] Uh, HIT consultant Quantum Health to acquire in bold health strengthening, AI powered healthcare navigation in Bold Health is a Nashville based company.

Uh, and Quantum Health is, you know, pretty, pretty big, uh, firm. 

Vic: Yeah, yeah. So I was excited to see this. Uh, we know Matt Burns and the team at in Bold. Um, the terms are not disclosed. Yeah. But it's a merger, but good to see them merge. Yeah, that's, yeah. Yeah. It's a 

Marcus: merger, so that's, that's good news. Alright, so this is a story that, uh, was a big story this week in the world of ai.

Um, anthropic, CEO, Dario Amede came out and basically said AI is going to impair, take away a lot of jobs. Um, I, I saw stuff floating around on x talking about 20%, you know, um, unemployment levels. Mm-hmm. Uh, you know, uh, and the related despair that will come from that, blah, blah, blah, all sorts of stuff. Um, this is the opinion piece that he wrote in the New York Times.

So you wanna Yeah. You know, if you wanna read it, we're gonna have the link in the show notes. Yeah. It 

Vic: came out today there, [01:03:00] there's the job threat and then. You know, philanthropic is, is focused on transparency and really trying to be the white, uh, version, the, the nicer white hat version, white hat version of the ai.

But they're still building a full AI system. Yeah. Um, he also talks about in this piece that they, you know, they, they, um, they trial how they would, um, shut down an AI system to see how it behaves. And so they, it was a completely mocked up experiment, but the AI system didn't know it was an experiment and they fed it a whole bunch of emails.

And in the emails the leader was having an affair and talked to his girlfriend in the emails, and then they told the AI system they were gonna shut it down to replace it with a new system. And it, it tried to use the affair as blackmail to stay [01:04:00] alive. Um. And so the, the experiment was just to see if it would go to that place and, and it, and it did in, I think they ran it maybe like 20 times in like 18 of the 20 times.

It, it used the blackmail. And so his point here was that we, we are already in a position where it's gonna be very difficult to, to unplug these things. And it is smart enough to use, you know, what we would call social engineering to its advantage. And unfortunately a lot of humans have things that can be eng engineered around.

Um, so there's no real solution, but he's just trying to like, make everyone aware that yes, it's gonna cause jobs and it also needs to be, we need to be transparent about how, how we're gonna be able to shut these things off. 

Marcus: Yeah, 

Vic: that's. 

Marcus: Ooh. And live a clean life. Yeah. [01:05:00] Reddit, Suzanne Anthropic alleges unauthorized use of sites.

Say, well, hold on. Just back to that last point. Except no one can't, you can't, 

Vic: it's hard 

Marcus: to, yeah. Yeah. So, so, so what's gonna happen is like, it's actually gonna just lower the, the facade of clean lives, right? Like, everyone's just gonna have to like, be more okay with the reality of what it means to be a human.

You know what I mean? Yeah. 'cause, because, because if that's, if that's what's, if that's what's gonna be Yeah. It's gonna be hard to, you're not gonna be able to protect yourself from that. Right. You know what I mean? Um, Reddit, Suzanne Anthropic alleges unauthorized use of sites data. So if you're connecting the dots, this is the same company we one that's trying to 

Vic: be a white hat.

The hat. Hat. Yeah. 

Marcus: Right. Um, you know, Reddit says an anthropic is access, access to site more than a hundred thousand times after saying that it had stopped. 

Vic: Yeah, that's right. Reddit has very valuable data. If you're going to be the white hat, good guy. I think it is important to actually [01:06:00] do, when you say you're not gonna access a site, you shouldn't access the site.

Now maybe they sued them, so it hasn't, hasn't gone to trial yet. We will see what the evidence is, but there's a lot of pressure getting data. 

Marcus: Yep. Snowflake to buy crunchy data for 250 million. So we were just talking about, uh, uh, a transaction of this, of this sort. Databricks brought Neon. Yeah. Um, which is a, a database startup.

Uh, that deal was a billion dollars, so it's a smaller deal. Yeah. But both neon and crunchy data have their database based on Postgres. So I think it's, I think it just kind of an arms race thing. You know, one deal was done, snowflake was stuck and had to buy the other one's. 

Vic: Yeah, that's right. Databricks and Snowflake are the two significant players in the data.

I, I think of them as the players that can go across every cloud. Like the, you could have. If you're a big corporation, you can have data and Amazon, Microsoft all over the place, and Snowflake and Databricks sort of pull it all [01:07:00] together. And yes, they both are buying Postgres capabilities. Yes, 

Marcus: meta signs, a nuclear power deal to fuel its AI ambitions.

So basically Meta bought out, uh, a nuclear plant in Illinois, uh, that's being, that's managed by Constellation Energy. Just bought the whole thing out. They bought 

Vic: the entire, all the power for the next 10 years that Meta now controls and, and bought. So I mean, the data and the chips are both bottlenecks. I think maybe the power is not the, the power in the chips, the two bottlenecks, the power seems to be the more rising, more as the, the bigger or more important constraint.

Marcus: It's unbelievable. Alright. And then the final story for the show and in our AI rundown, uh, is a post from, uh, Andre Carpa Carpathy. This was, uh, this is, this is a [01:08:00] co-founder of, um, I feel like he was at Open ai. Open ai, right? Yeah, yeah, yeah. He he was the CTO though, right? Yeah, yeah, yeah. Okay. And, and, and he was also the director of AI at Tesla.

That, that was what I remember him for initially. Okay. Um, and so he has this post here where he is talking about, um, VO three, which is Google's video. Yeah. Uh, generating LLM uh, part of the Gemini Suite. And it's incredible. Anyone who hasn't played with it. Yeah. It's, it's ridiculous. It's really good. They added, it's ridiculous 

Vic: added, they added audio.

Yeah. It's, it's, and it's really. It looks very accurate. 

Marcus: It's, it's really, really good. And there's all, if you just put VO three into YouTube, you'll see all sorts of videos explaining how you can Yes. You know, I, I, I watched one where this guy who has been making commercials forever, you know, is now making his commercials using VO three.

This is a, this is a professional guy, you know, and, and, and he's, it's not just VO three, but he, he replaced the process of doing the shoots. So like, [01:09:00] just, it, it was cool to watch, right? Mm-hmm. Because basically he, he used VO three to like generate something like 35 different shots. Then he's edited. He Yeah.

Then he edits them. Yeah. And, and he only used like 18 of them. Yeah. You know what I mean? So, so the uninitiated would be like, oh, this one thing that I generated sucks. But like the real, the per the professional knows. Yeah. You are always going to Yeah. Take more shots than you're gonna actually, he used to 

Vic: spending, uh, three days.

Recording those 30 shots Right. And spending $5 million capturing the video. That's right. And now he can do it in four hours for whatever, you know, $200. Um, but so the, the, the video's really strong, but, um, the point here is that that, um, capability now makes it optimizable for advertising because you can spin up a video [01:10:00] for one, one purpose with one user or maybe a group, small group of users, and then iterate.

And he's talking about like measuring engagement by following, like, do the pupils dilate or not? Which you can see through the phone. And that is hard for me to get my head around, but, but I think it's, I think it's right. 

Marcus: Yeah. I, I mean. This is the kind of stuff that made me so happy I got out of marketing technology.

Mm-hmm. 'cause it's so vad. Yeah. And it's so soul crushing. Um, when you understand that it's all intended to convert people and Yeah. And manipulate people. Separate you from your money. Yes. Just manipulate you and, and convert you. Mm-hmm. And, and we're now at a level of tech, you know, before it was, it was more the data that was driving what was served up to you.

Vic: Yeah. [01:11:00] 

Marcus: Now we're getting into totally different things because, uh, we've compressed what it takes to create the content now. 

Vic: Yeah. 

Marcus: You know? And so now that we've got that, yeah. When it cost 

Vic: $2 million to create a 32nd ad, you had to be cautious with 

Marcus: that. Yes, yes, yes. It was much more about the targeting.

Yeah. Now. You can throw a million of these things out there because it's not just the cost, but the time to create is nothing. Yeah. Right. It's, it's all nothing. So now you can use it all, create real time feedback and just spit, iterate small iterations of it. 

Vic: Right. Right. And then you have the prompt and you know which one scored the best, and then you iterate 30 ones around that one prompt in AB testing land and you end up with more and more powerful ways to save people money.

Yes. Like you just take the advertising and ramp up the effectiveness. Yes. And the poor humans are not gonna have any chance to [01:12:00] resist, or it's gonna be 

Marcus: very 

Vic: difficult 

Marcus: to resist. It's going to be very, very DIII think humans will adjust and adapt and get smarter at it. Just like we've gotten smarter with all things spam and all this stuff.

Mm-hmm. Like, you know, we, we will become better detection machines at this stuff. Mm-hmm. But not without it taking. Most of us down. 

Vic: Yeah. 

Marcus: Yeah. You know, not without it taking most of us down. 

Vic: Yeah. 

Marcus: Um, yeah. So it's, look, it's gonna be rough. I, you know,

I came up professionally, uh, as a web developer, you know, and, and then moved into marketing and advertising. 

Vic: Mm-hmm. 

Marcus: And so, uh, and, and was that Facebook when they went mobile and when Yeah. Early on and when they went, when they turned on ads. Right. Like, I was one of those Facebook preferred marketing developers when they turned on ads.

Yeah. And I, [01:13:00] we, we've been long gone on this front for a long time, but AI just takes it to a whole nother level, Vic, and, and look, then you start adding in the glasses. 

Vic: Yeah. 

Marcus: You know what I mean? Like, like there, there's so many. Things that just accelerate this and, and, and turn the iterations to even tighter loops.

Yeah. Um, as, as they're all going on. And so, I don't know. I don't know.

Vic: It's going to be, uh, I don't know. It's gonna be, it is gonna be hard to, to resist the, the video advertisements because they're gonna be very compelling. 

Marcus: Yeah. And, and, and it's also gonna, the advertisements are one thing, but I think, you know, the, the manipulation of narratives, the propaganda, the, you know, all, all, all the things we've been worried about with young people, right?

Vic: Yeah. 

Marcus: It's, it's all gonna get to, to a, to a another level of, uh, difficulty. It's [01:14:00] gonna get to another level of difficulty. So anyway. Yeah. Uh, you know. What fascinating and incredible times we live in. Yeah. Yes. Fascinating and incredible times we live in. Um, and, uh, you know, just wanna thank you for helping me to understand it a little bit better on a week to week basis.

Vic: Yeah. And I don't know what'll come in the next week, but we'll cover it. 

Marcus: Alright, thanks man.