49 – Doveish Fed, Reddit IPO, Elevance, CMS Approves GLP-1, Nvidia, Apple, & Microsoft
Episode Notes
Join Marcus & Vic as they discuss the FOMC meeting, the Reddit IPO, Elevance acquiring from Kroger, more GLP-1 moves, and a big AI rundown including NVIDIA, Apple, Microsoft, Google and Ray Kurzweil.
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Episode Transcript
Marcus: [00:00:00] Yeah, almost to 50. Almost there. Almost there. You just got to keep going. I think, I think we’ll make it. I think we’ll make it too. Um, how was your week?
Vic: Good. It’s been a, it’s been a good week. I, I’ve been talking to some new investors, learning a ton, which is fun. Well,
Marcus: glad one of us had a good week. Uh, no, no, my week was good too.
Marcus: Uh, I was just preparing for, um, our LP meeting this, this week. Yeah, big weekend. Yeah, big weekend for us. Uh, and, uh, yeah. Yeah, it’s been, it’s been a, it’s been a busy week, but it’s been a busy quarter, honestly. And, uh, I don’t know, for some reason I have this idea in my head that at the end of the quarter, like I’ll get a breather or some reprieve.
Marcus: I, I, I look at the calendar and that’s not actually true. I don’t know if
Vic: that’s true. We’ll give you a, you can have a Sunday night off after the cocktail party.
Marcus: Thanks. Uh, no, listen, um. I haven’t dug into the, to the stories of the week that much, but every show we, we sit down and before we go live, we’ve kind of pick our stories and, uh, wow, a lot has happened this week.
Marcus: I mean, I feel like I’ve been heads down doing a bunch of work [00:01:00] and then looking at what has happened this week. It’s a, it feels like a big shift actually is, is occurring, uh, on multiple fronts.
Vic: Yeah,
Marcus: uh, out there in the economy, uh, in the AI world, I think it was one of the reasons I’m glad we do this show is because these are the weeks where you’re busy and you just can kind of like miss everything.
Vic: Yeah. And then you look up and you’ve missed like three big storylines that shifted the trajectory. Right,
Marcus: right. So I think we’ve, I think thanks to you, we’ve caught them. We’ve caught the storylines and, uh, I guess without any.
Vic: Yeah, I think the pace of change in the healthcare industry and in the world in general is, is accelerating.
Vic: It feels like that.
Marcus: Yeah, but, but I guess it’s like there’s some weeks where it’s just kind of like more of the same sloggy kind of stuff. And then there’s a couple of weeks where it’s like, Oh shit, that happened. You know what I mean? It’s, it’s, uh, it’s either an accelerant or a pivotal moment or an inflection point.
Marcus: and I don’t, I don’t know if I can call this week that, but there are definitely things that, that happened. Okay. Yeah. No, [00:02:00] no, no more foreshadowing. Yeah. Let’s, let’s go ahead and dig in.
Marcus: All right. So the first story is, uh, is, is the fed J pal really didn’t say anything, but it’s not so much. What he said or what he didn’t say it’s how he said it so Article in the wall street journal the the headline is fed officials still see three interest rate cuts this year booing stocks I continue to be surprised by the at the idea that we’re gonna get three cuts this year Um, but i’ve learned to kind of stop doubting Uh what the fed officials say so i’m just gonna go ahead and go with that but I think the biggest thing was You I listened to, you know, several minutes of the, of the, of Jay Powell’s talk, and I could just tell he, he seems to be moving to a more confident dovish posture, um, which I think is [00:03:00] why the market is rallying and, and feeling so confident right now.
Marcus: Because just his overall posture, it does not feel like he is warning, uh, people like he is, you know, admonishing the stock market for playing chicken with him, you know, it feels like he’s just basically saying so far so good. We feel like we’ve got this thing basically under control. There must be something they know about the second quarter.
Marcus: As it pertains to inflation, because inflation wasn’t great throughout the first quarter, but it also wasn’t terrible, right? It wasn’t like perfect, but it wasn’t terrible. Um,
Vic: yeah, inflation is, has come down. It’s no longer the six, seven, eight percent annualized rate, but it’s also not at two. And so,
Marcus: and the rate of change is, it feels like it’s slowing, like it’s not kind of continuing to drop, uh, in the way that maybe people would have hoped to get a rate cut by now.
Marcus: We didn’t get a rate cut this week, right? Right. We didn’t get a rate cut. Um, But yeah, just the overall tone. It feels like we’re moving into a dovish [00:04:00] territory.
Vic: Yeah. I think, I think his, his tone is definitely more dovish, talking about the potential for rate cuts, although he didn’t make any guarantees.
Vic: My, uh, squinting and trying to interpret what he’s saying leads me to think that the unofficial target is not two. I think it’s more like he’s happy at three, and that’s really what he’s thinking. He’s like, okay, I got it down to three, that’s good enough. And now let’s have a balanced approach, maybe do a cut or two, I don’t see a world where it gets, I mean to get two to be the target, you’d have to go below two, and I just don’t see how that is in the cards with the data, unless he, I mean he has a lot of data that we don’t have, of course.
Vic: I don’t know that, uh, I think that the actual implied target rate is, is maybe slightly higher than two.
Marcus: Well, I think when you overlay the resilience of the banking industry, [00:05:00] the, the rally of the stock market, the GDP growth, uh, end of last year and what appears to be another great quarter on the way, um, and relatively good, you know, inflation rates compared to a year ago, this time you kind of say.
Marcus: The economy in America feels pretty strong right now, right? And, uh, the labor market thing is kind of, uh, stabilized. We obviously had a wave of, uh, union activity, a wave of big tech layoffs, but even that Over the last 30 days. Like we haven’t talked a lot about that over the last four weeks. The economy’s
Vic: weathered it pretty well.
Marcus: Yeah. Yeah. So, so it does seem like a lot of the corrections and the renegotiations and sort of all of that coming to terms has happened. People are pretty stable. Maybe there are a couple of more bank failures that are coming up, but I don’t know, do the bankers that you know, look stressed? I mean, not the ones I know.
Vic: No, I think people are pretty good with the status quo. [00:06:00] Right. And so the thing that’s confusing is rates where they are now seem to be kind of guiding the economy to a pretty healthy rate of growth in jobs, in the stock market, in GDP. It’s not clear how you follow that with saying we need to do three cuts this year.
Vic: Right. That would be good for my portfolio. I mean, as a VC, sure, if we do cuts, all risk assets will go up in value, including my portfolio. But it’s hard for me to get my head around what changed between December and now makes Cameron Powell more dovish. And I just don’t know. It doesn’t seem like much change.
Vic: I mean, inflation has kind of gone sideways since the beginning of the year. It was maybe it was three and a half and now it’s three or something, but I don’t know.
Marcus: Are there, do you think there might be segments of the economy that they feel like? The current interest rate levels are, uh, maybe unfairly hard on, and they think [00:07:00] that, that, you know, raising the interest rates to the level that they did was a tool to battle inflation.
Marcus: And while it’s a, it ain’t going back to zero, it is still maybe too high for some industries, some segments of the, of, of the population. I mean, look, here’s one thing I’m thinking about. Uh, stacked on top of the, the slowing housing market as a result of higher interest rates, there was the whole realtor, uh, law that we’re not gonna cover in detail, but, um, the 6 percent built in, you know, you can call it agent tax, uh, realtor fees are, are going away.
Marcus: Right. So, you know, that’s great for,
Vic: for,
Marcus: well,
Vic: for the. Economy. I mean, it’s going to, it’s going to be inflationary.
Marcus: It’s it’s, it’s great. It’s great for the marketplace, right? Because we don’t have this fixed tax that’s built into every transaction that we do.
Vic: Yeah. And it allows for innovation. Different realtor groups will try different things.
Vic: That’s right. It’ll be buyer only somewhere. I mean, they’ll have all different, someone charged by the hour, all sorts of
Marcus: [00:08:00] models will, will, will come out of it. But I do think generally speaking, you have to assume that that lack of, of, uh, In the, in the short to midterm, that lack of, uh, committed fee base is going to impact agents.
Marcus: Right. And, and that’s, that’s a, that’s not a small segment of your, of your realtor.
Vic: It’s a, it’s definitely negative for you.
Marcus: Yeah. Yeah. And I mean, I don’t want to say forget the realtor, but it’s not so much the realtor I’m worried about is the agents underneath the realtors. Right. Um, so, so yeah, look, I mean, I, I think that.
Marcus: There is a, there’s a, there’s a bit of information that we clearly don’t have, but as investors, I feel like I’ve been waiting for this. I’ve been waiting for, I don’t want to look a gift horse in the mouth. Like I’ve been waiting for this talk, even though we didn’t get a rate cut, the tone, the change in tone, it’s not adversarial.
Marcus: Right. And it’s not paternal. It is, it’s more, [00:09:00] it sounds more like a partner, you know? And. Man, I don’t know. It just sounds sounds and feels good to me.
Vic: Yeah. It seemed like a victory lap where he was saying like job finished inflation is under control. And now we’re taking a balance approach. We’re probably going to more likely to cut because where rates are that all makes sense, except inflation is not 2 percent level, which is why I think, well, they
Marcus: didn’t, well, they didn’t do a rate cut though.
Marcus: Right. Yeah. They didn’t do a rate cut. I mean, I think they are projecting continued decrease. In the in the rate of inflation over the coming months, right? And so they they they could do three rate cuts in the back half of the year, right? They could wait for another another entire quarter and let the Inflation rate continue to drop Month after month and then say okay in july.
Marcus: We’re kind of ready to go now. There’s time for that
Vic: Yeah, I mean, I’m I don’t have the access to data they have but I’ve been looking at a bunch of inflation [00:10:00] stuff And I’m not sure it’s coming down that dramatically, but we’ll see I think anything there’s risk that it could be slightly up
Marcus: more good news Uh, we have an IPO folks.
Marcus: We have an IPO reddit And not only do we have an IPO We have an IPO that was priced appropriately and bounced. It actually went up after it went live. I mean, it feels like it’s been years since we’ve seen one of these.
Vic: Yeah. I mean, it was a, it was a, it was a great day on the IPO front. It was a price range of 31 to 34, went out at the top end of the range, 34, and then immediately jumped up almost 50 percent to like, 50, 50 and change, which is great.
Vic: I mean, super, I’m happy for the Reddit. They, they did give an opportunity to all their Reddit, um, moderators and everyone that’s been with Reddit for a long time to give them a chance to buy in at that 34 price, which is great. That’s
Marcus: awesome.
Vic: Yeah. [00:11:00] And, and they deserve it. It’s good.
Marcus: I mean, they deserve it, but it’s also good for us.
Marcus: Uh, you know, it, it, it’s, it’s one, so we don’t have a trend at all, but it’s been a long time since we’ve had a notable brand IPO successfully with a bump on the price, 50 percent bump on the price from the listing price. That’s, that’s fantastic. Yeah.
Vic: It’s a great sign that the. The IPO markets back, please.
Vic: That would be awesome. Uh, and then this, yeah, this story, this just to show that like, it’s starting to get, you know, maybe exciting, maybe a little frothy.
Marcus: So, so, uh, wall street journal story. The headline is wonder Mark lowers food delivery startup raises 700 million. So he is going to build a business is going to open 100 ghost kitchens, which are restaurants that are only really available on Postmates Around New York City over the next two years.
Marcus: So 700 million dollars going towards that so, you know rough math 7 [00:12:00] million per per location and Yeah, I thought the ghost kitchen thing kind of ran its course already I did yeah, I didn’t realize we were gonna totally double and triple down and put 700 million into you know, one MSA But here we are Here we are 2024.
Marcus: God bless him.
Vic: You know, this is the same guy that wanted to create a thousand food trucks. It was a delivery guy. Yeah, this is a
Marcus: delivery guy.
Vic: Um, you know, New York’s a great market. There’s a lot of people that visit New York. I’m sure they get takeout and maybe it’ll work. But 700 million dollars for one metro area, a hundred restaurants.
Vic: I don’t know. Maybe I’m old fashioned. I feel like you could service a lot of people with 20 different types of food.
Marcus: I mean, the one thing you got to know in that kind of model is a significant portion of that capital is going to the backend operations, right? So there’s going to be some real standardization of backend operations.
Marcus: There may be some leverage that you get by having [00:13:00] that many. Providers, uh, you know, you may be able to get some, some differentiated positioning and placement with an Uber Eats with the Postmates, um, just, just, just by providing supply, right. You know, to feed the demand of that market. I bet there, I bet there was some real economics there.
Marcus: So it’s, it’s not a nothing case. Somebody did some math and decided this actually was going to work. Um, you know, you, you have a long history in the delivery business. You, you did grocery delivery. I mean, way before Instacart. Um, Deliveries
Vic: hard in non dense markets, but New York is a great market.
Marcus: New York is a great market.
Vic: So yes, I, I have scar tissue from delivery, but, uh, I think neat, big, big international markets like New York, Paris, London, places like that. I think it works really well.
Marcus: Yeah. Anyway, I think the main point you were bringing up is that it’s not only that it was 700 million, but it was 700 million on a safe note.
Vic: Yeah. Yeah.
Marcus: Right. So for anyone who’s listening and doesn’t understand what that means, [00:14:00] that means it was not priced equity. A safe stands for security for future equity. So it’s, it’s not currently priced. You don’t actually own the equity yet. It’s future equity. Um, there’s, there was obviously some kind of cap or, you know, price attached to it.
Marcus: Um, but it’s not Actually, you didn’t buy
Vic: right
Marcus: equity yet. Yeah, and and typically just so you know, like typically safes. I mean, how much capital typically goes towards a safe?
Vic: I mean, I’ve never seen anything over like a million. I mean, it’s it’s typically not a like a price. I mean, maybe five, maybe maybe maybe five or
Marcus: so, right?
Marcus: It’s
Vic: it’s typically a very early stage company. Yeah, and and like a. When you would do a convertible note, um, now people are using safes. I think that’s sort of what it has evolved into, but this is a, I think it’s the biggest safe that’s ever happened.
Marcus: So anyway, uh, it, it does feel like we’re, we’re [00:15:00] moving into a frothy.
Marcus: Frothy time in the market. And, uh, Hey, I’m here. We need a little fraud. Uh, we’ve been starving over here. Um, pocket health. You found this one that landed 33 million to build out a medical image exchange platform.
Vic: Yeah. So getting, um, images out of the diagnostic center or the health EMR where they live and having them be available for second opinions or for the patient to use in the future is a great thing.
Vic: And so that, that’s what, This company is working on and it’s a significant raise. They’ve raised over 55 million so far. And it’s a huge, huge opportunity. There’s a lot of diagnostic images that are sequestered away somewhere where my orthopedic surgeon can see it, but no one else can really see their own
Marcus: CD roms.
Marcus: Yes, you’ve got them. I’ve got them. We’ve all got them. They’re on DVDs and CD ROMs. It’s brutal. It’s terrible. Do you have a CD ROM reader? No, no, like the best you, you, at [00:16:00] least you could give me a, like a, like a thumb drive. Yes. Right. They don’t even do that. Right. They still will hand you a DVD or CD ROM.
Marcus: It’s like,
Vic: Yeah. So hopefully pocket health is going to make that go away.
Marcus: Uh, yeah. And I, I think like, it’s great to talk about pocket health, but probably more important to talk about the, the increase in sizable rounds that we’ve seen, a lot of them have been AI, you know, based no question, but definitely 2024 has brought back some sizable rounds in the, in the health community.
Marcus: Health IT, digital health, tech enabled services space. And, um, I, I just saw a, a, a chart on that, that Carter sent out that was talking about capital calls and how capital calls have increased over the first two months of 2024. At higher levels than they were at any point in 2023. And so for, again, for those who are listening and don’t know when VCs, um, raise capital, that capital is committed, but we don’t sit on all of it.
Marcus: Um, generally speaking, not all the time, [00:17:00] but generally speaking, we call capital from our limited partners when we have a deal and we need to place the capital. We need to make an investment. And so, um, the increase in, in capital calls likely. Is reflective of some increase in deal activity. So I’m looking forward to seeing the Q1 venture monitor.
Marcus: That’s going to come out in probably three weeks from pitch book to really kind of get a good sense of this. But my, my guess is Q1 of 2024 is probably better than any quarter of 2023 when it comes to deal volume. Um, deal size, capital deployed. Uh, so again, I mean, it’s just like positive trends finally kind of coming back.
Marcus: Um, yeah, there’s a lot of capital
Vic: on the sidelines that has been sort of waiting for what’s the, what is the Fed going to do? Or the, you know, at least they’ve stopped raising. And now maybe it’s all clear. Let’s get back in the pool and we’re starting to see bigger rounds and better terms. It’s great.
Marcus: Yep.
Marcus: Um, all right. And now moving into the more broader healthcare [00:18:00] space, uh, this is a pretty big deal. Um, Elevance Health’s Carillon, Carillon RX is buying Kroger Specialty Pharmacy. Um, I think it makes sense. I can understand why Kroger doesn’t really want to be in the specialty pharmacy business, right? I mean, specialty pharmacy doesn’t feel like.
Marcus: That friendly of a easy consumer business to be in. I think I would probably just want to be more in the, you know, Z packs and other things that are tied to kind of urgent care kind of thing. I think
Vic: it’s related to Albertsons. I think they’re trying to sell
Marcus: it off in order to get the deal done. They haven’t
Vic: announced that, but
Marcus: no, no, no, no
Vic: pharmacy is really lucrative.
Vic: It’s very valuable.
Marcus: And so that probably makes
Vic: a lot of sense. Either DOJ told them or their advisors have said, yeah, I think that’s my interpretation.
Marcus: That’s so smart. That is so smart. Yeah. I mean, especially pharmacy is obviously very lucrative, but I was thinking more core. So I think
Vic: probably whether it was a, um, [00:19:00] divest.
Vic: Some percent of your dominant position in pharmacy, right? They chose this piece that maybe is lucrative They could get a good price for but yeah, but it’s not core. That’s
Marcus: the thing. It’s not core It’s like you don’t you don’t you’re not
Vic: doing it in the store. No, that’s what I’m saying separate thing That’s what I’m saying.
Marcus: You know, you don’t want a health plan So it’s like you’re not trying to like manage your expenses on that side of things by having this in house So I didn’t really make that much sense to me that they’ve been had a specialty pharmacy But, your point about divesting before you’re trying to get a big deal done in M& A.
Marcus: And
Vic: they’ve already gotten a bunch of heat, like questions. Oh, totally, totally. So, I think that’s where it is. But it’s great for Elevants, because they had a small one, but now they’re getting much more girth than Carillon RX, which is good.
Marcus: Carillon’s been building pretty rapidly. I mean, they’ve, they’ve made a lot of, I mean, I think, well, they’re strong in terms of the momentum, I guess they have a lot of momentum and they’ve been acquiring a lot of assets.
Marcus: I think they probably every time they acquire [00:20:00] an asset, I think they’re adding another 12 months of integration work that they have to do. So I think that that’s going to be the interesting thing is like, how well are they going to be able to integrate all these different pieces that they’re, that they’re buying?
Marcus: I mean, that’s not. That’s not easy to do. Um,
Vic: yeah, their, their approach is just, uh, compared to Signe Evernorth, they are growing through acquisition. They’re growing
Marcus: through acquisition. And
Vic: they’re trying to grow very quickly. And Signe, whether it’s right or wrong is not going that way. They’re, they’re sort of growing with internally developed.
Vic: Assets
Marcus: highly integrated,
Vic: which is more stable and causes less integration problems, but, but also is harder to get scale.
Marcus: They probably need less broad of a, um, portfolio of assets because they’re in commercial, right? So it’s like you need things that fully close out your vertical stack as a commercial insurer.
Marcus: But if you’re not doing a lot of Medicare, Right, [00:21:00] and Medicaid, it kind of changes the breadth of what you need under, under your, um, under your chassis. So, yeah, I think, I think that’s probably why Cigna is able to be a lot more measured and we don’t see them doing as many, you know, acquisitions. What we do see Cigna doing is, is making investments in innovative companies, um, you know, certainly sort of Series B and later, we see Cigna Ventures pretty active.
Vic: Yeah, that’s right.
Marcus: Uh, all right. Let’s, uh, let’s keep moving here. Uh, okay. You found this one again. This is a heritage provider, which is a big physician, a physician organization that’s really focused on value based care. Um, they are, they’re going to sell themselves. I think they’ve got over, uh, over, over half a billion in an EBITDA, uh, apparently, so this is a highly functional VBC platform and looking
Vic: It might be the biggest.
Vic: Physician focused care, uh, it’s one of the biggest 600,
Marcus: 000, 000 in need, but that’s pretty big. Yeah, that’s pretty big, especially for value based [00:22:00] care. Um, and especially being independent. So, uh, there does it say who’s looking at buying them?
Vic: Well, they’re running like an office process. Okay. Yeah. With trying to get.
Vic: Um, private equity firms to bid.
Marcus: Okay.
Vic: Um, I think there’s gonna be a lot of PE firms that are interested. Um, this story is saying they’re looking for 7 billion and it’s just hard to, it’s hard to know what, what the underwriting model is going to be and if they’ll pay that or not.
Marcus: Yeah. Uh, In the Axios story, they talk about reaching out to private equity firms, Advent International, Carlisle, Hellman Freedman, and TPG.
Marcus: And also they mentioned that, um, Humana may be interested and could partner with a private equity firm to take a minority stake, which sounds like a Humana, you know, um, uh, playbook thing they would do. So yeah, that’s, it’s going to be interesting to see where this thing lands. Um, especially if Humana does, does end up getting in the game with them.
Vic: Yeah, I think wherever it lands, we’re going to have now a well capitalized, [00:23:00] um, kind of growth engine in the accountable care organization, physician focused space, which will be healthy. It’s going to change, you know, drive things. There’s no tie to a hospital.
Marcus: If you had to speculate why they Are now going back to market as opposed to, you know, being off the market since 2022.
Marcus: What might you speculate on that?
Vic: I think it’s, you know, the founders, the, the, the 5 to 50 physicians that have significant ownership want to take money off the table and then get Recapitalize to go do whatever experiments they want to do in value based care. That’d be my guess But I don’t I don’t know.
Vic: I mean as with all the stories so far, it’s a good time to do it Yeah, right. I mean you want to get you want to get it when it’s The first IPO is out, the Fed’s starting to sound dovish, um, so you don’t miss the window.
Marcus: Back to GLP 1. Uh, we, we, we started talking about this a little bit last week, uh, because we were obviously talking about, [00:24:00] um, FDA approving.
Marcus: Yeah, well FDA and
Vic: CMS have been, challenged with what their roles are.
Marcus: And being aligned.
Vic: Yes, right.
Marcus: They used to be much more aligned. You know, actually, it’s an interesting point. They used to be much more aligned when, um, the transportation mode for a therapy was Just much more standard, right? But as as we’re getting more esoteric modes of Um delivering therapies and also the the the way that those therapies interact with the the care system Right are are dramatically changing things.
Marcus: See it’s like it’s one thing to talk about. Is this safe? And is it effective? It’s an entirely different thing to think about the economics around it. Right? And so there was a time when I think safe and effective and the economics were a much more predictable pair, and it was much easier for FDA and CMS to kind of move in concert.
Marcus: But now, you know, like, GLP 1s are [00:25:00] fundamentally disruptive to the way that we care for people with diabetes and, um, you know, heart disease and, and chronic kidney disease and things of this nature. It’s like the fundamental game changer to those things. And, and it prices appropriately. And it also changes what the, at least for at this moment, what we think the downstream costs are going to be for people suffering with those different chronic diseases.
Marcus: So, um, I think when you think about it from that perspective, it starts to make more sense why FDA and CMS feel less aligned, um, in terms of their swift ability to approve and then approve and, and get something out there to treat.
Vic: They, they should have, they should have different mandates. They do have different things.
Vic: Yeah. Um, but forever, once the FDA approved something, CMS. I think they always covered it. Yeah. Until the Alzheimer’s, uh, The Alzheimer’s was the beginning. The first one. Yeah. [00:26:00] And I think that, um, It’s pretty clear that Wigovi and other GLP 1s are reasonably safe and very effective at Certainly at weight loss.
Vic: And then what they agreed last week is that it also is an effective treatment for stroke prevention. And so today, CMS has, um, allowed Medicare Part D to pay for it, um, if it, if it’s, if it’s, Being used for cardiac and stroke, I think, and they say, and, and other, other, um, chronic disease.
Marcus: I mean, so, okay, let’s, let’s just talk about that for a second, because most of our conversations around GLP one drugs have been around employers.
Marcus: Right. And how different employers are viewing this differently. And, and it’s really hard to think about it from the employer perspective, because you never know if someone’s going to stay with you very long. Right. And so like you cover them and you’re [00:27:00] thinking about, okay, well, long term, this is going to make them healthier, blah, blah, blah.
Marcus: But then they’re with you for two years and you spent how much money on that one person. Right. Whereas with Medicare, very different calculus, right? Um, it’s a longer term thing. It’s the most expensive. Years of, of providing care for a person. Um, but it’s a range towards the end of the, of the time. Right.
Marcus: So I, I mean, I even think about my parents and like their age, their, their, and their, you know, mid eighties. Right. It’s like. Is CMS going to approve it for them in their mid 80s? I mean, yes, it can certainly, uh, and also like, what’s, what’s the science on that? I hadn’t even thought about it. I mean, I’m assuming it’s, it’s just fine for someone in their 80s to take.
Marcus: I just feel like it brings in a whole nother set of questions.
Vic: I don’t think we know what the science is related to someone’s age and their metabolism and, and how this affects me. As we’ve talked about before, The GLP 1s [00:28:00] have lots of effects that make me worried about what this is going to do in like a 10 year view, but the FDA has studied it, and it has, in the short term, been shown to be safe and effective.
Vic: So, um, the thing I think we should talk about is it costs 1, 300 a month, and there’s a lot of seniors that are overweight and have cardiac disease, and that’s a significant bill. Now, maybe it will be recovered, but
Marcus: Can we talk about what we think the bill is for five to seven days and an inpatient stay when you crash into the ER because you had a heart attack or a stroke?
Marcus: That is That That bill Is 60, 000, 70, 000, 80, 000.
Vic: Yeah.
Marcus: So I just want to make sure, I just want to make sure, apples to apples. We’re talking about five days, tens of thousands of dollars versus [00:29:00] 1, 500 a month.
Vic: And so, maybe it is a good cost benefit analysis. I’m not saying that it, I begrudge seniors to get it other, we will get hundreds of complaints, , so God bless you.
Vic: You’re age. Yeah, right, right. But, but what I will say is that if you have, I mean, if you have heart disease and you lose weight, you will be healthier. Clearly. You’ll be healthier. You’ll have a lower risk for stroke and significant heart attack and. I think it’s still true that that person will be expensive in the last six months of their life.
Vic: Now, probably, they’ll live longer, and they’ll die of something else. But from a, like a cold hearted, just pure math thing, is CMS really saving lives? A lot of money.
Marcus: I think the answer is you don’t know.
Vic: [00:30:00] Yeah,
Marcus: I think, I think the answer is you don’t know. Um, you spend a lot of money in end of life and, and it can go for a while.
Marcus: And the number one killer is heart disease and not far behind it is, is stroke.
Vic: Right.
Marcus: Right. So, um, circulatory diseases basically, um, are, are, are killing the majority of, of Americans. And so I don’t know.
Vic: There’s a lot of stuff we don’t know. Like if you are overweighed and 75 years old. Say 70 years old.
Vic: You have been damaging your cardiovascular system probably for 60 years. Yeah. And if you lose a bunch of weight now, you will do less ongoing damage. But I don’t know how much safer it is. I don’t think anyone knows. It’ll be marginally, it’ll be safer. And so we’re going to spend a lot of money. And that’ll be fine.
Vic: We’ll learn.
Marcus: Yeah. I mean, would you, but, but you’re, you’re pro innovation, right? Well, like would you begrudge [00:31:00] trying to apply this, uh, innovation to, to senior care and to, and to, you know?
Vic: No. No. I, I’m not, I’m not opposed to approving it. What, what I’m saying is that I don’t know that there has been a real underwriting decision made by cmx.
Vic: Definitely not. I think it’s fully political
Marcus: def. Definitely not. Definitely not. But Medicare is, is, you know, is is 65 plus, right? So big difference between 65 and 85.
Vic: Big
Marcus: difference. Right.
Vic: And it, it’s, it’s a very popular thing. I think there’s a lot of lobbying pressure and it’s gonna be popular for voters.
Vic: And so my view is that it’s not really an underwriting decision that was made like an employer would do. I think it was a political decision, and it was the right political decision, probably, because everyone’s going to be very happy. They’re going to get their meds and lose weight before the election.
Vic: I mean, it’s going to drive more growth, more inflation, more everything, which is again,
Marcus: well,
Vic: theme of the [00:32:00] show,
Marcus: GLP one wins again. Uh, and, and just talking about how to do the math on all this stuff,
Vic: make this math work,
Marcus: right? Uh, the house has passed a bill that is instructing the congressional budget office or CBO as many people might know it better, um, to take longer view when grading preventative health laws.
Marcus: So they’re moving from 10 years to 30 years. Um, I’m of two minds about this. Uh, I, I certainly love grading on a much, much longer curve. I certainly love, uh, anticipating, you know, what, what some type of intervention now might do for someone, not just 10 years, but 30 years from now. And at the same time, I feel like.
Marcus: 30 years is such an unpredictable range of time. Um, it, it just feels, uh, it just feels like, how can you possibly map something out over 30 years? It’s, it’s hard enough to believe you can do it over 10 years. So, uh, maybe, you know, maybe we have enough anecdotal [00:33:00] data at this point that we’ve collected, uh, to feel that we can do that, to feel that we can find some, some clear trends over the course of 30 years.
Marcus: Uh, My guess would be that something like that would have to be timed with, uh, digital records, medical records, uh, you know, coming online and we haven’t had those for 30 years. So I don’t know. I just,
Vic: yeah, I think I don’t think there’s I think that 10 years is not enough, uh, wiggle room to get in all of the increase in spending on wellness care that the Congress wants to do.
Vic: And so instead of fighting CBO on the interpretation of what can be realized in 10 years, they’re doing kind of what their job is to do, which is, okay, let’s change what the law says. That’s, that’s. That’s what they’re allowed, that’s what they’re supposed to do. And then CBO, if it passes the Senate and the President signs it, then would use [00:34:00] that.
Vic: It’s, it’s indicative to me of us sort of spending more and more out of DC. And just having huge budget deficits and spending tons of money that we don’t necessarily have in healthcare. I mean, you know, that’s, I think that’s okay. It’s, it’ll be supportive of our portfolio.
Marcus: Well, I mean, let’s, let’s just take budget things aside, right?
Marcus: Um, we’re Gen X. And I think when we think about our health, I think we’re thinking about it on a 30 year trajectory, right? I mean, I I think i’m I think the things i’m doing today especially if they are either preventative diagnostic or Um on the offense like strength training, right? Yeah. Those are all things that i’m thinking about.
Marcus: Hey at 48 I’m doing these things so that at 78.
Vic: Yes. Yeah. At 58, 10 years from now, you will not benefit from strength.
Marcus: I’m not, that’s [00:35:00] exactly right. I’m not thinking about my deadlifts helping me out for 10 years from now. I am thinking about it on a, on a multi decade. You know, trajectory. So, um, it doesn’t mean it’s not going to help me in 10 years.
Marcus: I guess what I’m saying is I’m more thinking about in 10 years. I want to be just as strong as I am now. Um, you know, I want minimal, uh, you know, loss of strength between now and 58. But I know it’s inevitable that the client really is going to start kicking in in the 60s. It’s just Not much you can do about that.
Marcus: And so I’m trying to get as far ahead of the curve as I can. So that once that decrease starts to kick in by 78, I’m as strong as the average 48 year old or something like that. Right. You know? And so, um, I don’t know. I, that’s what I’m of two minds about it. Like I, I, I think in principle, I agree with you that there, there is a, uh, a sort of fiduciary responsibility to thinking about putting some term limits on, on, on how long we’re willing to sort of, uh, make investments for and what the longterm view of that is.
Marcus: Is [00:36:00] it really the government’s, you know, job to be doing that? Or is it CBO
Vic: map out 28 years in the future? Right, right. That
Marcus: feels hard, right? Um, so I, I agree with that. And also I just think anything that gets our, our industry, our, our politicians to think more long term or allow for more long term thinking as it pertains to healthcare, being more preventative, more diagnostic oriented, that I do think is a good thing.
Marcus: So, you know, I don’t know. I’m, I don’t
Vic: Yeah, I agree with that. I’m a little torn about it. I think that’s right. I mean the um, kind of the standard Medical establishment thinks in like five years to ten years. Yeah, and I don’t think that’s long enough because right? You know, I’m, I’m 53. I, I don’t really want to focus on the next 10 years.
Vic: I want to focus on the next 30 or 40 years, which is what you’re saying. So that I agree with, but I don’t know if the CB at the CBO’s job to do.
Marcus: Right?
Vic: So I don’t know. It, it is aligned [00:37:00] with the wellness prevention that early diagnostic. Incremental over a long period of time being the best way to do health care.
Vic: And it’s also sort of a way to just sort of feed in a bunch more pork spending other things and had the CBO blasted as, as budget neutral
Marcus: and likely to get much fuzzier outlooks, right? That are, that are, that are. to defend. Yes. All right. Final story. Before we take a break. Um, not really an update on the change healthcare story, but, but actually I think it, it is worth noting.
Marcus: Uh, we, we, we took a look at the page, um, on UHG’s website and it does look like this week in particular, they were able to. Return a lot of the services back online, um, and that’s, that’s a good thing. Yeah. They’re
Vic: turning on sort of one at a time, but they have several that are up now.
Marcus: Yeah. And, and they’re all going through third party assessment.
Marcus: So it’s not just up to them where they’re like, yeah, this is good to go. It’s like, it has to be third party assessed before they bring it back [00:38:00] online. So that’s very good. Um, but you know, you know, Congress is the story of modern health care talking about Congress edges towards action amid change health care outage um We read the article and it was like it was like things like hearings, right?
Marcus: it’s like and legislation and you know, you’re looking at I mean no disrespect to these guys, but like who is this, uh, congressman wyden and congressman, uh Crapo, uh, from Idaho and it’s like, do you really believe that these guys know
Vic: the chance that they can prevent black cat from getting in somewhere else because something they do at a Congress is zero and that’s just not real.
Vic: It’s just like, you know, but people are upset and they call this congressman and so they have a hearing and that’s just how,
Marcus: and I get that they’re upset and they go, you know, do you got to do something about this? You got to secure this stuff. And, you know, but, but look, I mean, I, I think. They probably have to just look at, okay, [00:39:00] cybersecurity.
Marcus: How about allocating some cybersecurity support? I mean, the idea that, okay, we’re already suffering a bit here from over centralization of services, right? Like it was too much running through one single provider. And that’s, and it took too much down. Right. So, so right there, we, we know we’re going to come out of this and we’re going to probably think about doing things differently at a minimum, having some redundancies, having some fail overs, things of that nature.
Marcus: You know, um, even if you don’t begrudge one company from acquiring a lot of business, you may force them to have a backup option that you can sort of fill. And the
Vic: market will take care of that on it. I mean, there are competitors to change right now that are, yeah, that are aggressively as they should aggressively.
Vic: Yeah. So that’ll be a kind of a natural process. That’ll
Marcus: be its own thing. Like, let’s just put that to the side. The idea that you’re going to allow the private market to run critical infrastructure for the U. S. healthcare system, and you’re not going to [00:40:00] allocate support to secure that. Um, and then when there is a cybersecurity issue, you’re going to create increased regulation Which requires compliance, which is an operating expense that only the best, best performing companies and the richest companies can actually pay right does nothing but further centralized consolidate this to the biggest, strongest companies.
Marcus: Like if you actually wanted to make it more. Decentralized, you would allow more companies to be able to get into the game and more regulation that is compliance oriented is not actually going to do that. By the way. Um, if anyone thinks this is not going to pour out beyond the change healthcare stuff into the health system world, which is where we have had the majority of our cybersecurity issues in healthcare.
Marcus: You’re out of your mind. Um, and health systems cannot afford to pay whatever kind of cybersecurity stuff you’re going to ask them to pay. [00:41:00] I mean, they’re performing better now, but like they, like, they’re not going to be able to put up with, you know, increased compliance and cybersecurity stuff, um, over the longterm.
Vic: That’s the idea that they’re floating. Of course, every hospital is going to do whatever, um, they can mandate that. But I don’t think that’s realistic. I mean, hospitals, even if they spend the money, they’re not going to get more secure, right? Yeah. We would have talked about this at length, but I can’t help myself.
Vic: The, the goal is not to take this, like, honeypot of data and put more guards around it. That, that just is not gonna work.
Marcus: No.
Vic: We have to figure out a way to not have that huge, like, store of really valuable data in one place where people can just grab it. And there are technologies for that on web three and blockchain, but it’s a whole new infrastructure and it’s a different paradigm and it’s a whole new thing.
Marcus: Yeah.
Vic: Just pretty more guards at the door after the, you know, whatever the horse left the barn and now we’re going to just like guard the door. [00:42:00] That’s what they’re doing, but it doesn’t really make sense.
Marcus: And they just don’t look like subject matter experts to me like that. I mean, I hate to say it, but like not that they don’t have agencies that they can, you know, deploy to actually do this, that are subject matter experts.
Marcus: But these particular legislators, I just don’t, I don’t see it. All right. With that, we’re going to take a break. Let Doug share a little bit about Jumpstart Foundry. We come back, we’re going to do our AI rundown.
Doug Edwards: Thanks guys for the opportunity to talk about our pre seed fund, Jumpstart Foundry. My name is Doug Edwards, CEO of Jumpstart Health Investors, the parent company of Jumpstart Foundry.
Doug Edwards: We’re so excited to be able to talk about, uh, early stage venture investing. Certainly the need for us to change the crazy world of healthcare in the United States. We are spending 20 percent of our GDP, north of 4 trillion a year on healthcare with sub optimal outcomes. Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a difference [00:43:00] in healthcare in our country.
Doug Edwards: Every year, Jumpstart Foundry invests a fund, raises a fund, and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners. To invest to help us make something better in healthcare. Some of the benefits of Jumpstart Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund.
Doug Edwards: We find the best and brightest, typically around single digit percentage of companies that apply for funding from Jumpstart, and we invest in the most incredible, robust, innovative solutions and founders in the United States. Over the last nine years, jumpstart Foundry has invested in nearly 200 early stage pre-seed stage companies in the country.
Doug Edwards: Through those most innovative solutions the Jumpstart Foundry invests in, we also provide great returns and a great experience for our limited partners. We partner with AngelList to administer the fund, making that ease of access, not only with low minimums, but the ease of investing [00:44:00] in venture much better.
Doug Edwards: We all know that healthcare is broken. Everyone deserves better. Come alongside us with Jumpstart Foundry, invest in making the future of healthcare better and make something better in healthcare. Thank you guys. Now back to the show.
Marcus: All right. So starting off with Nvidia, Jensen Wang, by the way, I mean, I think two years ago, nobody knew who Jensen Wang was.
Marcus: Uh, and now this guy is like,
Vic: He’s one of the most well known faces and his look with the leather jacket and everything like. And the gray hair. Yeah, yeah. The glasses,
Marcus: uh, the black shirt. He’s, he’s kind of like the new Steve Jobs, right? You know, um. And to
Vic: his credit, he started working on this before AI was a thing.
Vic: Totally. And so he. Yeah, he is kind of the new Steve.
Marcus: Totally. Um, so headline for the wall street journal and video plans to price newest AI chips to appeal to wide group of users. So starting to move downstream, um, so as to not allow the innovators dilemma to catch them. [00:45:00] And I think that that’s really smart because we, I think two episodes ago, we ran through the grok chip and some other, you know, new players that are coming into the market.
Marcus: And. With all of the capitalization that NVIDIA has gotten through their stock price appreciation, there is no reason why they should not be able to win the R& D war going downstream in the market. No reason. No reason.
Vic: That’s right. And so they’re working on that. What I have come to realize that I just want to point out if people haven’t focused on is that the chip, the Nvidia chip that he’s showing here, it’s like the size of a small TV.
Marcus: I
Vic: mean, it’s, this is not a small chip. It’s, it’s a big, almost like a, um, like you’d see in, in a, uh, data, data storage rack. It’s almost like a single rack kind of thing. Um, so they call it chips, but it’s really like an integrated computer that’s all kind of built together.
Marcus: Yeah. Yeah.
Vic: But yeah, [00:46:00] there’s several new products.
Vic: I think they said it’s going to be 30 times, 30 times more effective. At large angulus models than the h100 and which came out like 18 months ago, and then yes, they’re starting to package These in quote chips Businesses or users can interact with directly so you don’t have to have you can you can train your model and then use it Right there use with in partnership with NVIDIA, which is impressive if they can do it
Marcus: Yeah, so, uh, just, just crazy.
Marcus: I mean, just, just reading this, this article here, uh, Wang told art, uh, analysts at an annual conference on Tuesday that there were about 1 trillion of installed data centers in the world. He later told reporters that spending was about 250 billion last year and growing about 20 percent a year. I mean, these numbers are just like insane and [00:47:00] it’s all headed in this direction, like we’re at the beginning.
Marcus: Yeah. Of AI being the computing platform of the future, the beginning and the numbers are just, I mean, I think the reality is that. When we get to full AGI, I mean, there’ll be room for 30 or 40 more companies like NVIDIA, right? It doesn’t have to all accrue to them, but how valuable will NVIDIA be at that point?
Vic: Yeah, they, they, I mean,
Marcus: they, they’re likely to be the most valuable company. Yeah. Like ever in the history of everything.
Vic: Yes. They, I mean, they’re working on that. They’re headed there. And there are lots of people chasing them. I mean, everyone is building their own. Google, Amazon, I don’t know, Microsoft, everyone, but they have the lead right now and they, they seem to be accelerating and like using their new found wealth into, you know, pouring it back into R and D and coming up with the next thing, [00:48:00] which is great.
Vic: It’s great for them and it’ll be competition, but that’s, that’s what we want.
Marcus: All right. So moving down the rundown, Apple, Apple looks to external partners to boost AI efforts. They got dinged for this boy. Oh boy. Um, it felt like, well, it’s stock price down almost 5%. Um, and I think that is not what people wanted to hear.
Marcus: People wanted to hear Apple has come up with their own chip or something like that, you know, for a while there, they broke away from Intel. They created their own, uh, you know, the, the Apple Silicon chip, the M series. Yeah. Um, But where are they in this AI discussion? They are nowhere to be found. And it’s kind of crazy because, you know, really Siri was, was the first voiced Siri has the best
Vic: install base of a chat bot.
Vic: I mean, I don’t know how many. Billions of people, billions of people. In
Marcus: terms of a voice interface, I think Siri is probably the most engaged one in the world.
Vic: Yeah.
Marcus: Right. That’s right. Um, but under the hood, AI wise, not to be [00:49:00] found and that’s crazy. Um, I mean, it kind of makes sense because Apple has, has specialized.
Marcus: They’ve been very good at being fast followers. They’ve been very good at saying no and being disciplined and being focused. But that also means that their R and D has been pretty limited, right? Um, especially. Uh, since Steve jobs, uh, passed away. And so the idea that they are saying they’re holding discussions with Google and, and open AI to talk about how they can partner on, on AI stuff.
Marcus: I mean, that feels like a hollowing out of, of the company, uh, for few, for the future, you know, we talk about Nvidia being a clear winner of the future. This is kind of scary for Apple. Don’t you think? I mean, this is the first time I’ve, I think in my. Life of loving Apple, since they, I started loving Apple when they came out with OS X, um, before that, you know, I mean, the other, it was sort of nice toys and things like that, but OS X was when I realized they, they were really doing something much, much different.
Marcus: Um, [00:50:00] And man, this is the first time where you look across their entire array of, of, of, uh, products. And you think about, you know, the, the vision pro that they just put out. And you’re just like, man, what are they doing over there? Uh, they spend a bunch of time working on a car. Then they realized the car, the electric car thing isn’t all as cracked up to be.
Marcus: So they’re, they, they bowed out of that. Um, and they have no, no true internal capabilities on AI.
Vic: I don’t mean, I don’t think they have. They don’t have the real development engineering product creation product design strength that they had once mean they are behind on a I clearly the car shut down their their business.
Vic: Which is an incredible business. It’s a great business. There’s not that many more phones you can sell. Like, I mean, yes, the developing world is getting wealthier. Maybe they’ll move to Apple, but [00:51:00] they’re on Android now. And that like community lock in is pretty hard to break. And so I don’t know, as India and Africa and the developing world get wealthier, if they’re all going to jump to iPhones, maybe they are, I don’t, I don’t think that really holds.
Vic: And the car was their sort of big audacious thing they were going to do. And it just, I don’t know, they tried to go too, too big. And instead of doing like the Tesla process where it’s not fully self driving, but they’re sort of learning and getting better over time. They designed it with no steering wheel, no, no anything, which kind of locked them into that full automation thing that they’re not ready for right now.
Vic: So I don’t know. It, it feels like there Tim Cook has done a good job as a steward, as a steward, but he’s not really creating, he’s not a founder mentality. He’s not a product [00:52:00] guy. Um, I don’t know. It doesn’t seem like they’re kind of right away right now.
Marcus: And on the other side of the ledger, we have Microsoft.
Vic: Yeah. Yeah.
Marcus: And, uh, holy cow. Two massive pieces of news around Microsoft and AI this week. So the first one is that Microsoft hired Mustafa Suleyman, who was the DeepMind co founder and I think is mostly these days known for writing the book, The Coming Wave, which I think is probably the best book on AI out there right now.
Marcus: Um, as well as his, his co founder, uh, of the company Inflection AI that was valued at 4 billion at the last, uh, investment round. That had Microsoft and NVIDIA as investors in the company. Microsoft has hired Mustafa Suleyman and his co founder, uh, Karen [00:53:00] Simoyan. I can’t, I can’t pronounce his last name there.
Marcus: Um, to, to lead their consumer AI unit. I mean,
Vic: Yeah. So just, just to get more context, you said it, but. Mustafa founded DeepMind, which Google acquired, and that became the basis for all of their AI strength. And he left and founded Inflection AI.
Marcus: Can we go back to DeepMind for a second? Because before all the LLM stuff happened, right, the first big holy shit moment in modern AI history was AlphaGo.
Marcus: Yes.
Vic: Yeah.
Marcus: Okay. Yeah. That was,
Vic: that was deep mind. It was AlphaGo.
Marcus: That was deep mind. It was the moment when an AI beat the world’s greatest Go master and he quit. And, and, and the way it won, the way AI
Vic: won was incredible too.
Marcus: And much of Asia went into mourning over [00:54:00] this. Um, the first match was in Korea, Seoul, and then I think the next match was in China, and there was mourning because people understood.
Vic: And it also, I think, kind of woke up the Chinese government.
Marcus: Yes. Yes. And
Vic: that was the point where China stopped playing so nice.
Marcus: That’s exactly right. Um,
Vic: but that, in that game, which we don’t spend too much time on, but AlphaGo made a move that all the experts were saying like, that’s stupid. That’s stupid.
Vic: Terrible, stupid made mistake. And what are they doing that they threw the game and then it turned out like that was, they came back around. That was the turning point. The AI saw much further ahead somehow.
Marcus: Yeah. Yeah. And, and, and I think the point was that was the point at which we collectively realized that the AI.
Marcus: Can learn faster than us because it can run more iterations than we can. Right. So we, we only know as much as we know, based on what’s been done before. Right. It’s, it’s a, we, we [00:55:00] build on the base of knowledge and it’s all just human. Stacking on top of humans, but AI just moves so much faster that it can play out so many other versions and it can find totally new things that we’re, we’re just generations behind.
Marcus: And so that was the underlying implication was this is not just this thing being as smart as us. It can learn so much faster than us. It’s not even funny. And it took out the great master of go a pretty intricate game. It took out the great master with a move that no humans who studied the game recognized.
Marcus: That’s
Vic: right.
Marcus: They didn’t recognize the move. That’s that’s the part where you have to sort of understand why people are freaked out about AI. Yeah. And let’s
Vic: talk about how. How Mustafa and DeepMind got the AI trained because it was the first time that I was aware that they didn’t take a bunch of Go experts and like, give it a framework [00:56:00] and here’s all the moves.
Vic: Here’s some opening. They let it play itself. Thousands, millions of times, over and over and over again, and it learned, however it learned to get better at playing itself. Yes. Until it was by itself, best in the universe by itself. And that is a whole different paradigm of training an AI model that I had never heard of before AlphaGo.
Vic: And this is the guy that started the whole thing. I mean, there were lots of people at DeepMind, but, but he was the leader of it.
Marcus: Yeah. And then he wrote a book called The Coming Wave. Yes. Which
Vic: is incredible. Everyone listening should read it.
Marcus: You should get it on Audible because I think it’s him reading it.
Marcus: I think you’re actually hearing his voice. Yeah, I got it on Audible. It’s just incredible. And. What I love about it is it’s the guy who made alpha go telling you there’s going to be massive job loss Yes, like [00:57:00] there is no way this thing doesn’t kill jobs. No way right because he lived it He lived it. Okay, and now he was running a startup that was valued at four billion dollars and Microsoft just said, you know what?
Marcus: I know we invested in that thing, but we need you and your co founder. You guys got to come over here.
Vic: Four billion is insignificant, which is incredible to get your head around, but it’s insignificant from Microsoft’s point of view for this market opportunity. They, I mean, as we just talked about, they are trying to go against Nvidia for the hearts and minds and the significant margin opportunities.
Vic: Unlike the opposite of Apple, they have done an incredible job because they have a They have a really strong leadership team. And Microsoft wandered into the wilderness for a long time. They have [00:58:00] come on the last maybe five years. And this was an incredible move. I still don’t know how, I don’t know what the comp package is or how you approach that, but.
Vic: But they landed them, which is, which is huge.
Marcus: Well, I think it, I think it is the, the, the, the scale of the moves that they’re making, but also just the, um, the boldness of the moves that they’re making, you’re, you’re going to take the co founders out of a company that has 4 billion of paper value based on all these investors in there.
Marcus: And you just, Nvidia was invested in this company, Reed Hoffman, like all these big names. Yeah. Bill Gates, Microsoft was
Vic: an investor.
Marcus: And, and. Saatchi Nadella is so take no prisoners right now about this shit. He’s just like, yeah, I don’t care. Come, come, come here. Yeah, we gotta make
Vic: it work.
Marcus: Like, can you imagine what he offered these guys?
Vic: I, I don’t know. But, but they are, they are now running the AI [00:59:00] consumer company within Microsoft. I think that’s how it’s phrased.
Marcus: It’s it’s it’s intense. So, I mean, nobody knows how this is actually going to play out, right? Because I actually don’t know what this guy can do in a commercial capacity. So this will be great to see, like, how does this actually work?
Marcus: Right. But there’s no question. He is one of the most important figures in AI in human history. And so. Um, having him be taken out of a business that he co founded because he believed this is where we needed to go to go do something for Microsoft is really, really intense.
Vic: Well, and I mean, they you understand this, but for the audience, I think it is about getting the developers to build on the Microsoft slash open AI platform of tools.
Vic: And choose not to build on the Google Gemini platform of tools.
Marcus: Yeah, well, let’s, let’s just,
Vic: yeah, so then we’ll go to this, right? Yeah.
Marcus: So, so we have, we have a link we’re going to put in the show notes, like all these other links, but a link to [01:00:00] a tweet, uh, from the, the, the, the X handle is, uh, at AI breakfast.
Marcus: And it says, uh, Microsoft CEO, Satya Nadella to board members. In quote, if open AI disappeared tomorrow, we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them.
Marcus: That is pulled from the court docs on, on, on the case.
Vic: They have taken all the market cap value from open AI. Now, open AI has a high valuation too, but Microsoft has capitalized on that. I mean, I didn’t think they could, they could do it. I mean, they’re, we should look at what their market cap has been in the last year, but it’s, it’s been incredible.
Vic: Yeah.
Marcus: It’s multi trillion. I mean, where it is in the [01:01:00] multi trillion stack at this point, I don’t know. It’s over two. Is it over three right now? I don’t, I don’t even know. Um, all right. Finally, we’re going to wrap up with just a couple of notes on Google. So, um, Google has an event that they do in New York every year, Google Health.
Marcus: Uh, what’s, what is it called? Um, yeah, the checkup. That’s right. Uh, and they rolled out, uh, an open source, um, Open source, open access data set of real world dermatology issue images, sorry, in partnership with Stanford Medicine and the point here, this is very similar to their whole deal with like the camera and like making sure it captures everybody on their phone, you know, no matter what your hue of skin is, it’s kind of a continuation of that.
Marcus: It’s, uh, it’s, it’s just saying, Hey, listen, we, we need to have, um, you know, diverse data sets of skin because not all skin picks up, uh, you know, um, uh, picks up light the same way, you know, can be read and evaluated the same way, uh, can, can, if we don’t have these things running through these AI systems and we don’t have comprehensive data sets there, uh, we’re going to [01:02:00] miss out on certain populations based on pigment.
Marcus: And that’s just. You know, that’s unacceptable. And so, uh, obviously that’s a big thing in health equity. And I think it’s, it’s super cool that they, that they, yeah, it’s great
Vic: that they’re doing it and there’s very few companies that could do it at the scale that’s needed. And so Google stepping in is, is excellent.
Marcus: Yeah. And partnering with Stanford on it, which I think gives it clinical legitimacy. So that’s very good. Uh, and then, and then one final point, um, Ray Kurzweil, who is, uh, Synonymous with the word singularity. He has been, um, a writer, um, sort of science fiction, but also prediction futurist talking about AI way before it was cool to talk about AI nineties.
Marcus: He was talking about way before, um, dedicate really has dedicated his life to talking about AI and, uh, you know, he, he has been working for Google for quite some time and, uh, now he is. Updating his projection of when the singularity moment will happen. [01:03:00] And just for those who aren’t familiar, the singularity, and I could be totally butchering this, but I think the idea is that his position is that the fundamental trait of humans, uh, over the course of history has been that we’ve built technology.
Marcus: We’ve continued to build technology. It started with fire and then, you know, the printing press and on and on steam engine, blah, blah, blah. And then, you know, once we got to computers, that was like a definitive, Change in the trajectory of the technology because, um, the technology went digital, it started to do things, uh, in exponential rates, uh, we got Moore’s Law, so we really understood the power of CPUs, GPUs, just processing units in general, semiconductors, um, and his, his observation has been that we have been on this unavoidable collision course where humans, as we continue to build technology and that technology continues to advance, We’re becoming something other than just sort of homo erectus.
Marcus: We’re becoming something different than just humans. We we’re, we’re merging [01:04:00] with the technology and we will eventually become something, uh, indistinguishable from the technology. And that’s when it becomes a singularity. When. We plus the technology equals one thing. Um, some people envision that as cyborgs, some people envision that as, you know, putting a microchip inside of your body.
Marcus: There’s all sorts of different ways that science fiction writers have envisioned this, but I think this version of AI that we’re now seeing is the greatest truth. We’ve ever, uh, proof we’ve ever had. That Ray Kurzweil is probably right. And we are headed to this, this moment of singularity. He originally talked about AI being something that would, uh, would hit human intelligence levels at 2045.
Marcus: And he is now, um, changed that to 2029. Um, and that’s with being inside of Google and having all of the information and insight and things of that nature. So, uh, we got five years y’all make it count.
Vic: And that, that even seems, uh, That seems like [01:05:00] a long time away given the pace of change now.
Marcus: But yeah,
Vic: the singularity does mean that.
Vic: It also is sort of, you know, you get to the point where humans are gaining a year of life expectancy more quickly than it takes a year to age. Right. So you sort of like, you almost, you never will get to the point where you pass away. Um, and then the exponential rate of technology improvement is growing just like in a vertical line.
Vic: Um, he has a, uh, typically, I mean, he’s updating his book, but he typically has a pretty, um, human friendly approach to positioning it. Um, he’s trying not to scare people. Yeah, right. That’s what I was trying to say. Yeah.
Marcus: And he has generally been pretty optimistic and positive about it.
Vic: Yeah,
Marcus: that’s
Vic: how I am too.
Vic: I think that it’s, I don’t know, I don’t worry too much about cyborgs killing me in like the Terminator just because I don’t know how likely that is [01:06:00] and it’s not the way I want to live.
Marcus: Yeah. Yeah. I mean, of course, I think focusing on that is just not necessarily that helpful. Right. Right. Uh, and at the same time, um, I think that it’s impossible.
Marcus: And this kind of goes back to the coming wave thing, right? It’s impossible to ignore the discomfort that comes with knowing we will be supplanted in terms of intelligence on this planet by something else. Um, you know, we’ve, we’ve, Both positively and negatively about aliens, uh, you know, or extraterrestrials, whatever the appropriate term is, um, for, for a very long time, um, AI we’ve, we’ve generally positioned as being, you know, a pretty big threat, uh, Q the terminator and I robot, um, I think.
Marcus: We can look at Neuralink and already sort of see, uh, the ways in which, you know, computers are going to be embedded [01:07:00] in us and we will be cyborgs and it will give people the ability to see who had lost the ability to see it will potentially help people who are paralyzed, be able to walk again. I mean, so, and I think a lot of that is because we are realizing the electromagnetic nature of humans.
Marcus: We’re realizing, you know, the ways in which the brain and the, the, the motherboard sort of mirror each other, or really, you know, the motherboard Is mirroring the brain of, if anything, um, and we’ve tried to take our insides and we’ve tried to, you know, replicate it through the technology that we’ve made and, um, truly because we are the greatest technology that we, we know of today, right?
Marcus: You know, just our, our ability to, to think, to conceptualize, to communicate, to invent, to build, to, you know, create things like nation states, right? I mean, that’s what is a nation state, but a, but a concept, right? Um, but. When you take that to the level of, uh, of AI and just hearkening back to our conversation about alpha go, [01:08:00] it gets to a realm where we are, we, our intelligence is like at the level of beasts compared to the seriously, you know, and, and I, and I think that has to be considered unsettling, you know, to know there will be, um, entities.
Marcus: Uh, maybe they don’t have souls or whatever, but intelligent entities that will be so far ahead of us in our intelligence. I mean, in, in, in this article, Elon Musk was, was responding to, to curse while on, um, on X. And he said, AI will probably be smarter than any single human next year. By 2029, AI is probably smarter than all humans combined.
Marcus: I mean, and he’s a pretty smart human, so that’s a hell of a thing for a pretty smart human to say. Um, Yeah,
Vic: I mean, whether it is next year or in 2029, it doesn’t really matter to this discussion, like, it is coming, and I think [01:09:00] part of the reason I like doing this podcast is healthcare is going to be at the center of it, like, we’re going to have to figure out how do we How do we take care of ourselves?
Vic: How do we interact with these really smart systems? Whether they’re smarter than all of us or very smart, almost doesn’t matter. How do we integrate that into our healthcare system? How do we make people’s lives better? And then there’s going to be a huge behavioral health. What is the, what is it? What is meaning if I don’t have a job that’s needed to do?
Vic: There’s a lot of things that are either. You know, mental, physical, behavioral health, all tied up together. And I think health care, health care providers, health care professionals, entrepreneurs, all are in the middle of that. And we have an opportunity to really shape it. You know, whatever way we want, which is exciting.
Vic: It’s a little bit scary, but it’s also a huge opportunity.
Marcus: Yeah. All right. Heck of a show. [01:10:00] Thanks for putting it together. Um, and we’ll be back next week with episode 50. We’ll have a big milestone means we, uh, It means we kept at it for 51 straight, 51 weeks. We only broke one week. Yeah. Um, so really proud of that.
Marcus: And, uh, thanks for everyone who’s listened and, and stuck in here with us. And, um, yeah, we’ll be back next week with the milestone episode.