85 -23andMe’s Leadership Walkout | What’s Happening Behind Closed Doors?

[00:00:00] Marcus: If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. All right. Uh, I was in and out of DC in the last 24 hours. I was at the national black MBA association. Uh, annual conference, which is a pretty big conference.

[00:00:21] Marcus: Uh, it was at the, uh, Washington DC convention center. And I was on a panel that was, uh, kind of introducing private equity, venture capital, basically alternative investing, um, to that audience. Um, and it was a really. Great panel. I knew I was going to learn a lot because I was up there with, uh, two other gentlemen who run different kinds of funds.

[00:00:48] Marcus: One is a guy named Calvin butts. The third, he runs, uh, a group called, uh, Oh man. Uh, I've already forgot. I remember chop chop is in the [00:01:00] name. Um, but I'm, I'm forgetting the full name. Um, so they manage, um, They manage like vacation rentals, uh, like up and down the Eastern seaboard. Serious portfolio. A lot of serious portfolio of those.

[00:01:16] Marcus: Um, and then they also do like just really interesting one off SPVs that they kind of manage and they have like 300, you know, different investors on a list that, um, feed into those deals. And then, uh, Ben Carson, Jr. Yeah, yeah, yeah. Right, right. That Ben Carson. Ben Carson, Jr. Um, he is, uh, he's the founder of a fund called Fulcrum, a little bit easier to remember.

[00:01:40] Marcus: Yeah. Um, and they are, uh, a half a billion dollar private equity fund. Wow. And, uh, Just both guys super impressive And so I got to learn a lot from from being on the panel and hopefully, you know, I've represented jumpstart Well, hopefully you taught them about health care a little bit. Yeah. Yeah I mean, I'd like to think both of them had [00:02:00] experience in it But uh, you know, it was it was a it was a good time and I haven't been on a panel in a while So it was nice to kind of get back on stage.

[00:02:08] Marcus: Yeah Good. You fix DC where you're up there? No man, but you know what? It's like every time I'm up there, I just realized that that is such a high tension city. I mean, I was in my hotel room and Vic for about four minutes straight, the loudest sirens I've heard in years. And it was just a cavalcade of probably 40, you know, black SUVs and Capitol police cars and like who knows what they were doing.

[00:02:39] Marcus: Right. I mean, yeah. But man, they made a lot of noise, like, you know, something you would basically never see in Nashville. I don't think I've, in 25 years in Nashville, ever seen what I saw last night in D. C. And I think that happens in D. C. all the time. You know what I mean? It's just like the nature of what it is to be in D.

[00:02:56] Marcus: C. and what's going on there. So anyway, how about [00:03:00] you? How's things going? 

[00:03:01] Vic: I'm good. And, uh, I have, uh, Parents night for the last time at my son's a senior in high school. So I'll do that Uh, you know go meet his parents and things super exciting when you have a kindergartner. Yeah, not so exciting But yeah, it'll be good and uh, it is the last one though, yeah, it's the last one Um, I think I'm okay with it.

[00:03:24] Vic: I don't know. 

[00:03:26] Marcus: Good luck with that. Thanks. Uh, and I think he'll graduate and 

[00:03:30] Vic: feel good 

[00:03:30] Marcus: about it. I, I think he will graduate. Uh, the, the real, the real good luck is for, you know, being there for your wife. Yes. Who made it very emotional. Um, yeah, with it being the last and then look at you, like, what the hell are we supposed to do?

[00:03:45] Vic: I have to hang out with you. Yeah, right. Exactly. 

[00:03:48] Marcus: Uh, all right, man. Well, with that, let's dig in.[00:04:00] 

[00:04:00] Marcus: All right. There's no other way to open up the show. Fed week, the Fed rate cut has happened. And as the poly market or whatever, that, that, that Fed watch tool that you had. Uh, was predicting 50 basis points. 

[00:04:16] Vic: Yeah, that's right. And I think it's great. I mean, it's good for our portfolio. I think we have seen, we'll have stories later, the job environment, the economic environment is, let's say, framed.

[00:04:29] Vic: It's maybe it's not really bad, but I think it was time to take off the restriction and give a little bit of stimulus. 

[00:04:37] Marcus: People can generally feel that. Our economy is pretty uneasy right now and not like in a stock market, uneasy in a like households, jobs, you know, um, what it takes to take care of your family on a month to month basis like that part was just feeling pretty hard.

[00:04:58] Vic: Yeah, I think, um, [00:05:00] there haven't been like record layoffs, but the, but the layoffs that have happened, people are out of work for a long time. It's not that you need to find a new job now. And yeah, there's the stability feels not totally there. People aren't getting the same kind of raises that they were getting before.

[00:05:17] Vic: There's a lot of. You know, emotions around people falling behind. And so I think it was time to get some growth back. 

[00:05:26] Marcus: So you, you, uh, you pulled out this, this graph here. Um, source is the, the, the fed here. Um, what, what was the point of this? Yeah. So for 

[00:05:35] Vic: people that are just listening, I just think it's helpful to get perspective of like where we have been and where we are now.

[00:05:42] Vic: And so this is a chart. It goes from, you know, like a zero fed funds rate up to seven. We haven't been at seven since 2000. So it never gets to seven. Um, and you can see from, you know, 2010 to 2016, it was [00:06:00] effectively zero. That's the, you know, long term of zero interest rates. Um, and then we started kind of stepping it up, trying to reduce some of that, um, speculation maybe.

[00:06:12] Vic: Yeah. Um, gets to a reasonable place. Yeah. I mean, zero is not long term reasonable. Zero kids'. Nowhere to go from zero. Right? Right. And then of course Covid happened and so the Fed went right back to zero. And then we all have been watching and then, you know, suffering from complaining about the most recent set of hikes, which you can see how steep, I think it's the steepest that the Fed has ever done.

[00:06:33] Vic: Yeah. Um, and so 50 basis point cut is, is great. And I think it's what, uh, it's the better case of what we were expecting. And it still is, uh, you know, a long way up from where we have been largely over the last 10 years. 

[00:06:50] Marcus: I mean, it's almost a straight line up. And I think now that we are, you know, on the other side, meaning we've been [00:07:00] flat for a little while and now we've just had our first cut, so we're not, we're no longer in that.

[00:07:04] Marcus: Climb, climb, climb, right? So that when I say the other side, I don't mean we're, we're out of the woods, but the 

[00:07:09] Vic: Fed has turned to be accommodating. 

[00:07:10] Marcus: They've 

[00:07:10] Vic: turned. 

[00:07:11] Marcus: Yes. When you look at this, um, almost straight line up, you really can see how serious the Fed was about fighting inflation and how focused they were.

[00:07:23] Marcus: Cause this is so aggressive. It's such an aggressive rate of change, um, not just the quick succession of the, of the hikes, but how big the hikes were, I mean, four or five, 75 

[00:07:37] Vic: basis points in a row, 

[00:07:38] Marcus: 75. I mean, it's like, wow, 

[00:07:44] Vic: that's right. And I think that's because inflation is this. Really terrible thing that just eats away from purchasing power off everyone And so the fed needed to get in front of that and I think at [00:08:00] one point it got to nine or almost ten Yeah, 

[00:08:02] Marcus: it touched in the nine range.

[00:08:05] Marcus: Yeah. Yeah So 

[00:08:06] Vic: we we have um tamed it let's say yeah, they're not back importantly. They're not back to a two percent target no, but and a half and so it is um Pretty close, let's say. So the question is, where are they going to go from here? Yeah. And I don't think either one of us know, but I'd like to see it come down into the threes over the next six months would be, I think, somewhere in, in a medium range to be, I don't know what neutral is, but it'd be good to be accommodating for a while.

[00:08:39] Vic: And then. Neutral. Yeah. 

[00:08:41] Marcus: Yeah. Agreed. So Elizabeth Warren, uh, showing up in a place she normally doesn't show up, uh, fed discussions. Yeah. She, uh, she issued a letter on September 16th to Jay Powell and basically urged the [00:09:00] fed to cut by 75 basis points and effectively said, you know, you said you may be too late.

[00:09:09] Marcus: We thank you. Were too late, right? She's she uses the words. In fact, it may be too late. Your delays have threatened the economy I mean, she's she's blaming him. Yeah, right. She's blaming him. 

[00:09:22] Vic: Yeah I'm fairly confident. This has never happened in the history of the Fed. I don't think a sitting politician certainly of the stature of a senator Has has written a letter publicly to the chairman of the Fed.

[00:09:42] Vic: The Fed is supposed to be quasi independent And not subject to political pressure now, we all understand that there is indirect pressure Politicians forever have talked about complained about all before we have talked about on this podcast No, but but this [00:10:00] is a letter this is a documented letter in You know, in ink signed by two senators sent directly to the chairman of the Fed, sorry, three senators.

[00:10:11] Vic: And I think it's important to talk about because it feels like a line was crossed that I think is not a good line to cross. 

[00:10:19] Marcus: One of the really interesting things is the timing of it, right? There was all the signal in the world. that either 50 basis point cup was coming. Right. Right. And I think most people were kind of like, eh, it's going to be 50.

[00:10:37] Marcus: Right. So we're recording this on Thursday. The letter is issued the Monday. Of FOMC week, right? There's no way J Powell's going to read this and go, okay, Elizabeth Warren, this is what I'm supposed to do. Right. So, so what is the signal here that these three senators chose to send, not [00:11:00] necessarily to Jerome Powell, but to their constituents and to the country more broadly, right?

[00:11:05] Marcus: Because this is, this is, uh, This is putting something on record, right? That that's really what this letter is about. 

[00:11:14] Vic: Yeah. I, I think it is a, my opinion is it's a political tactic to be able to go for the, you know, the presidential election and, and maybe their individual elections, but I think they're mostly focused on Harris winning the presidency and maybe winning the house and that they now can claim that the Democrats have been pushing for.

[00:11:41] Vic: A bigger rate cut and They only got 50 basis points, but they were trying to get more. They wanted 

[00:11:48] Marcus: 75, which no one ever priced in as a possibility. 

[00:11:52] Vic: There was never going to be 75. That was not, that was not a possibility. Right. So I think it's an intentional [00:12:00] designed tactic to be able to say, yeah, we, we were pushing for more.

[00:12:06] Vic: And if you don't get enough job growth, they can say, you see, you didn't do enough. Right. Um, and I think it's also, it's just another line in the sand that we have crossed that the politics are more important than the actual. Functioning of our economy, which is sad, but I think just 

[00:12:26] Marcus: where we are and also the just the demarcation of authority.

[00:12:31] Marcus: Yeah, right. I mean, why, why would any of us think that senators are authorities on monetary policy? 

[00:12:41] Vic: Yeah, there's, there's 20, 000 global economists that work at the Fed, that all they do is try to understand how to set these rates. And they got together and used Chachi's PT to write a letter. Maybe this I've had a holiday in last night, but they're not at all [00:13:00] qualified for this.

[00:13:02] Marcus: All right, let's keep moving, uh, into some labor stories. We've got a, uh, kind of a flurry of different labor stores. We're going to start with Boeing. Um, the machinists are on strike. This is pretty scary because you know, it's not a monopoly per se. Um, it's in a highly regulated industry, aviation. Um, but this is our only major.

[00:13:24] Marcus: Aircraft manufacturer, I mean, and whatever you want to say, whatever you want to say about Boeing and the recent issues on United and Alaska and Southwest, whatever you want to say about it, it's still who we have to make airplanes. And, um, the machine is going on strike. That's like really scary stuff, right?

[00:13:43] Marcus: I mean, in terms of just the continuity of air travel, 

[00:13:48] Vic: I mean, we can buy airplanes from Airbus in Europe. But that is then outsourcing a really critical security infrastructure thing that we shouldn't outsource. [00:14:00] And so, Boeing is a very important company for the U. S. And they're in trouble. They don't have a lot of free cash flow.

[00:14:10] Vic: They're, they're losing market share. They've had all these, uh, cultural and mechanical problems, and I understand, I mean, it's hard to be an assembly line worker machinist at Boeing and they want to argue, they want to negotiate for a higher contract. I don't think Boeing has enough money. And so there has to be some kind of settlement and I don't see where it's going to come in.

[00:14:39] Vic: So just to frame it, because we were talking before, um, the union asked for 40 percent raise over four years. I think it's four years, uh, so roughly 10 percent a year. I don't know if it's exactly even spread and management came back with 25%. Offer over four years, um, I think it [00:15:00] might be a different story.

[00:15:00] Vic: Yeah. Um, and they can't agree. And so the, the machinists walked out. Um, the CEO is a relatively new CEO. I think he's less than six months in the seat. He has said we can't afford it. And in fact, That's this happened a couple of days ago. He now has furloughed the white collar staff, so they only get paid, maybe it's every other week or something, uh, because he's trying to save money and figure out what to do.

[00:15:30] Vic: So I think Boeing, they were already in trouble. And this is not good. 

[00:15:36] Marcus: Yeah, I mean, because they are such an important part of, uh, American infrastructure, this won't go on that long. Somebody will make a call, there will be some capital that will come in to retrofit this thing, especially under new leadership, right?

[00:15:51] Marcus: I mean, I don't think, um, The powers that be are going to let this new CEO fail just because he's inherited all of these [00:16:00] problems, right? Um, they, they already took the scalp of the previous CEO for all the issues that occurred. Um, so this CEO is going to have to be supported, but, uh, it's going to be a painful process.

[00:16:11] Vic: Yeah, I mean, I think, I mean, this story and the next story are national security issue stories. Yeah, 

[00:16:17] Marcus: let's move to the next one. So the next one is we've been covering the ports, thanks to you identifying it as a problem. And we're, we're getting very, very close to D Day here. 

[00:16:25] Vic: Yeah, we've been covering this for six months.

[00:16:27] Vic: Because they've been fighting for six months, and the contract ends on September 30th. And so just to remind listeners, there's a certain union, I forget what it's called. Port workers, right? Port workers. Dock workers. Dock workers. And they are in a union that covers every port from Texas. Cross Florida up the eastern coast to Maine.

[00:16:52] Vic: So it it's 45, 000 workers it's more than half the freight that comes overseas [00:17:00] into our country goes through these ports and They are set to walk out and go on strike on September 30th Or maybe it's October 1st. They have not held any negotiations in the last, like, several weeks. And 

[00:17:15] Marcus: Vic, why are they going on strike?

[00:17:17] Vic: Because the management is putting in place artificial intelligence and technology tools, and the union workers want zero technology improvements. 

[00:17:30] Marcus: It's specifically zero artificial intelligence, as I remember, it's not technology, it's zero artificial intelligence, none. 

[00:17:39] Vic: And I think that is the major sticking point.

[00:17:45] Vic: And I can understand that, and I also understand that, in my view, I think everything In the next five to 10 years is going to have some artificial intelligence In it [00:18:00] so it's going to be difficult to have none running a port. Both of these stories are Really difficult for our economy and they're going to happen right in the month for the election 

[00:18:13] Marcus: I mean, so so generally speaking we have across different industries.

[00:18:18] Marcus: We covered for a while all the different nurses, 

[00:18:21] Vic: yeah 

[00:18:22] Marcus: stories New york kaiser. I mean, you know kind of across the country Different walkouts that were happening, different strikes. Um, now we're covering Boeing, um, Canada had it with the rails last week or two weeks ago. And, uh, and here we are with the port workers.

[00:18:37] Marcus: And so basically any place where there is manual labor, what, whether, you know, and it's, it's, it's often skilled, but in some cases maybe like, you know, On a spectrum of skill, right? On a spectrum of skill. Uh, there, there are concerns about pay, and then there are concerns about defensibility and protection of the long term viability of the profession.

[00:18:57] Marcus: Right. Um, [00:19:00] and these things all are cropping up sort of at the same time, aligned with this rise of populism, right? In, in, in, in just popular politics. Today, right? Not not policy politics, but like popular politics. Um, and I think that that is going to be a real clash with trying to sort out the economy, which is not at all sorted out right now.

[00:19:33] Marcus: Like we're very much in the middle of it. We're trying to figure out this whole inflation job wage cost of living thing. Right? So this pressure that's coming from this political wave of populism is creating difficulties. And then on top of that, we won't really talk about this until the end of the show, but the unbelievable force of nature that AI has become, right?

[00:19:57] Marcus: Right. It's a runaway train ain't no stopping [00:20:00] it. Right, right. And so, which is going to 

[00:20:03] Vic: throw fuel on the fire, make everything more emotional, more real, more pressure, more opportunity, but more 

[00:20:11] Marcus: pain. And the stakes are really, really high, right? I mean, when we talk about nurses striking, we're talking about lack of access to care.

[00:20:19] Marcus: When we talk about the Boeing machine is striking, we're talking about an impact to our ability to travel, you know, um, via flight, we talk about the port workers. We're talking about. The holidays gone, we're talking about industrial materials, you can't build stuff. I mean, the consequences of this culture clash that we're in the middle of are really, really serious.

[00:20:42] Marcus: And the thing I'll say about both of these stories is it doesn't seem like there's an easy fix to either one of them. Right. Boeing is in a cash crunch. Unless somebody swoops in and recaps this company with a very healthy amount of capital for a sustained period of time. [00:21:00] I don't know how you just magically get from 25 percent to 40%, right?

[00:21:04] Marcus: You know, um, wage increases like you don't magically make that money, right? If you don't have the cash, you can't do it. You can't make promises you can't keep. You know, in this case, can you really promise these poor workers you're not going to have any artificial intelligence? I don't think I don't think that's that's 

[00:21:21] Vic: a 

[00:21:21] Marcus: real 

[00:21:21] Vic: thing 

[00:21:21] Marcus: not 

[00:21:21] Vic: viable and at the same time I understand I have empathy for The dock workers, they have committed their career to this kind of work.

[00:21:35] Vic: And it's scary to think that they could be replaced with some AI tool and they have a limited amount of time to stand up and say, well, we're not going to help you replace us. And so we have to figure out some middle ground on these stories, but there's so much to lose on both sides that it's. It's difficult.

[00:21:58] Vic: I think it is a populist movement. [00:22:00] It's the k ship economy. It's the balance of inflation is really hard for the Lower side of the K and then when the Fed cuts rates the stock market hit a new record today All time high dow hit 42 000. Yeah, and That will I think flow through to Job creation and economic growth.

[00:22:22] Vic: Yep, but the first place it goes is to all the wealthy people. That's right and I have sympathy and empathy for The folks that are working with their hands and scared about what this means You But I agree. We're not going back. So we need to figure out a path forward. Unfortunately, we don't have any leader.

[00:22:40] Vic: There's no 

[00:22:40] Marcus: leaders. So let's contrast these last two stories with another story that's labor driven, but is actually more of a top down thing, not a bottoms up thing. So Amazon this, this week, uh, Andy Jassy communicated to the entire company and said in 2025, first quarter of 2025, you're going to come back to the office five days a week.

[00:22:59] Marcus: [00:23:00] Yeah. Now, of course. Not everybody is going to agree with that. And many people are going to just decide, I don't, I don't want to work in Amazon anymore. Um, and they know that. Yeah. And they don't care. 

[00:23:15] Vic: I think it's an intentional way to cut 10 percent of the workforce or some number. And it's pretty brilliant, really.

[00:23:25] Vic: I mean, the people that are really love their job or need their job or want to continue their career at Amazon are going to figure out a way to, you know, Relocate if they have to and get to work in person and the people that aren't that focused on it or aren't that Motivated will opt out Andy Jassy doesn't have to know who's who it's going to self select, which I think is brilliant.

[00:23:55] Vic: And what you can do when you're Amazon and not Boeing. Right. 

[00:23:59] Marcus: I think that [00:24:00] is the main point, right? Which is the, um, the different leverage that the tech companies have in this whole, Cultural moment of populism versus AI versus capitalism versus maximizing profits. It's like these tech companies are really, they're, they're setting the, the cultural example for the rest of the industry, both in terms of their performance on the stock market.

[00:24:29] Marcus: Right. But also in terms of how they treat their workers and Boeing cannot behave. In the same way as Amazon, and they also can't perform in the same way as Amazon, right? They can't just have all their machines become AI next week, you know, maybe one day, maybe one day We move to a time when it's AI and it's robots, but we're not there in 2025, right?

[00:24:51] Marcus: So it's just it's also 

[00:24:53] Vic: Union versus not Union. It's also Union versus not. I mean Boeing can't make that [00:25:00] decision By itself, right? And Amazon can, and there's a role for unions to collectively bargain and protect the individual worker. And I think at times the union overplays its hand and they might kill the whole company.

[00:25:20] Marcus: I mean, and here's the thing, they might do that, but they have the power to do that. They 

[00:25:27] Vic: have the power to talk. And at Amazon, there's no one on the other side. Andy Jassy decided with his strategic team to do this, they don't have to ask permission of any union. 

[00:25:38] Marcus: Yeah, I mean, look, I think at the end of the day, there's no reason for the port workers to take their foot off the gas, right?

[00:25:45] Marcus: In terms of the threat they are presenting, they're going to get as close as they can possibly get to the outcome they want. By making this threat as scary as possible. That is the only leverage the unions have, right? Because the minute they actually strike a deal, it's over, [00:26:00] right? So their job is to make this as scary as possible, right?

[00:26:05] Marcus: That's their job, right? All right. Let's move through a bunch of different, uh, VC stories really quickly. And there were some good deals that happened this week. So Ferrum Health. Yeah, 

[00:26:20] Vic: so this is not one of the ones that I think is a good deal, but it's an interesting deal. They're trying to create the, the app store for AI tools for health systems, which would be only, you know, they're only going to put on the platform tools that are approved by the FDA and have some qualifications.

[00:26:38] Vic: So like they're, they're good, kind of like the app stores do. And that, that kind of is interesting, but I don't know that it is going to get enough pull through quickly enough in health care, I mean. 

[00:26:51] Marcus: Yeah, this reminds me of a company called Zilf, uh, it's health with an X instead of an H and they were like the digital health [00:27:00] app store, right?

[00:27:01] Marcus: And I mean, I know that they are installed at, at a few different health systems, you know, a 16 million round tells me the company is valued, you know, at least 50 million, right? Uh, so the, the growth here for this thing to get to one 52 to two 50, which is pretty impressive. Kind of the minimum that you need, um, feels like, feels like a, a steep climb.

[00:27:26] Vic: Especially in health systems, right? I just don't know what health systems they're approaching. Or like, if you're on Epic, I don't think you, you care about this. And so that, you lose a bunch of health systems there. Yeah, yeah. And then if you're not an EPIC and you're HCA, you don't want this. Yeah, you're 

[00:27:43] Marcus: doing your own thing.

[00:27:44] Vic: And so you quickly get to kind of smaller groups that don't have that much money. And I don't know, it just, I'm not sure it 

[00:27:52] Marcus: makes sense. Look, maybe we're wrong and we're just scarred. But it's not a deal we would have, we would have done that's right. Uh pictorlabs hauls in 30 million for digital [00:28:00] staining.

[00:28:00] Marcus: I thought this was pretty cool. Yeah, 

[00:28:01] Vic: I love this So the way that uh slides are like lab slides are done now They they take a sample biopsy typically and then they they stain it with with dyes that that are Um effective at highlighting certain cells And bringing it forward. So the the The pathologist can see what's going on, but in the process it kills the cells, um, and then also there's many different types, not many, there's five or six different stains you can use that are better for different things.

[00:28:35] Vic: And once you use one type, you can't go back and do another type. And so. Okay. Cool. There's several groups doing it. Uh, this one looks good. They're, they're, they're a few competitors, but they do it digitally. So you can apply one type of stain and then say, well, let's try this other kind too. And there's quickly do that.

[00:28:52] Vic: Yeah. And it doesn't kill the cells. So then if you want to run genetic tests or something, you can do that. It's much more effective, much better way to do it. 

[00:28:59] Marcus: [00:29:00] nice novel solution. Uh, and then finally, not so much VC, but, you know, kind of on the, on the other side, Guardian Pharmacy Services set IPO terms. So this company is going out with a, um, uh, projected market cap of just shy of a billion dollars.

[00:29:13] Vic: Yeah. So they, they deliver, uh, pharmaceutical pharma, you know, drugs to, um, assisted living, skilled nursing, long term care. Uh, so not, Like a Walgreens, but more institutional pharmacies. And I think it's great. Um, you know, there aren't that many IPOs. So celebrating a 900 million IPO is great. They're in Atlanta.

[00:29:36] Vic: It's good. 

[00:29:37] Marcus: Awesome. All right. So now shifting to policy. So, uh, this is an important one that I think everyone was expecting and hoping and nice to see it was bipartisan. Uh, the telehealth extension bill passes in the house committee. So it looks like we are moving towards. Having a clear path for the continuation of telehealth.

[00:29:54] Marcus: Everyone recognizes. Yeah, we need to do it. 

[00:29:57] Vic: And You know, Congress is screwed up [00:30:00] enough that. Until they actually do it, everyone's a little nervous. So yeah, the house has passed it. It's bipartisan and great. Hopefully, I think the Senate will, um, Yeah, but, 

[00:30:10] Marcus: but, but good to 

[00:30:11] Vic: start 

[00:30:11] Marcus: to get forward. Yes, exactly.

[00:30:14] Marcus: Exactly. Uh, so the FDA commissioner Cahill was talking about, uh, health care AI startups and talking about the FDA is ability, uh, to process all of the new AI that's going to be flowing through their office. 

[00:30:28] Vic: Right. Yeah. And he was just pointing out the number of applicants. Um, I think it was not 950, um, that have come in.

[00:30:39] Vic: No, 

[00:30:39] Marcus: no, no, no. No, they've authorized as of August seven, the majority of them being radiology software. I think the actual amount.

[00:30:50] Vic: And so most of his radiology and I think his point was, as it expands into different, different clinical settings, different [00:31:00] use cases, the challenge of approving it or not approving it is, is more complicated. So he doesn't have enough staff to keep up with what he thinks is going to be the inflow. And I wanted to talk about, cause I think that, that seems right to me.

[00:31:15] Vic: Yeah. The FDA is trying to. Um, we had a guest episode recently. I don't know if it's probably not published yet, but, uh, I think they're doing an okay job. Like trying to work on it, but with the resources, the volume of applicants coming in, it's going to keep growing. 

[00:31:33] Marcus: Yeah. I mean, I, I think the dilemma here is simply that we all know industry moves much faster than, than government, uh, technology industry supercharges that, that differential of speed and AI is like even more, right.

[00:31:49] Marcus: It's like, it's, it's the worst we've ever seen. We've never seen anything like in. And software tech move this fast, right? The worst of the best, but the hardest for FDA. That's what I mean. Yeah. So just a couple of [00:32:00] quick quotes here from, uh, from his discussion with the reporters and at the event in Massachusetts last week, he says it gets very different when you're talking, when you're using AI for decision support for healthcare, and there's a lot more concern about there, about how it can go a kilter, if you basically leave an AI algorithm in place and don't constantly check on it, it can get a lot better.

[00:32:20] Marcus: It can get a lot worse, so he's just sort of identifying some of the different challenges that come with a I outside of the radiology, you know, theater, which we we've talked about for a while. Radiology is a fantastic place for AI to advance. Once we get into the actual clinicians room. That's a totally different matter.

[00:32:38] Marcus: Yeah. All right. Let's, uh, let's keep moving. Uh, TikTok, just, just touching on, on this court case, because we're, we're going to land the plane here and I think in December on this court case. 

[00:32:50] Vic: Yeah. So they were in court, um, maybe in New Jersey. I forget. So, uh, in Monday. Right. Um, And I was surprised at the [00:33:00] clarity the judges came out with, like, from the bench.

[00:33:03] Vic: They haven't decided yet, but the questions they were asking and their posture was very anti TikTok. And so I, it seems likely that they're going to enforce the, the ban out of Congress, which will require TikTok to either, ByteDance to either sell TikTok, would have to sell the algorithm to, to someone.

[00:33:28] Vic: That is U. S. based, um, there'd be plenty of buyers, Bite Dance has said they will not sell it, or shut it down and leave. And, what really the court was about was all of the influencers getting to, Um, have their day in court and talk about their business on TikTok and how it is their First Amendment right to be able to speak.

[00:33:52] Vic: And I think the court was not very sympathetic to the difference between TikTok 

[00:33:58] Marcus: other, other platforms. It's ridiculous. [00:34:00] It's ridiculous. Yeah. I mean, yes, yes, of course you have the First Amendment right to speak. 

[00:34:03] Vic: Yeah. 

[00:34:03] Marcus: You have a million different platforms. You can do that. Right. Like, you know, yeah. So I think it's likely 

[00:34:09] Vic: it will, it will be banned and I think they're going to.

[00:34:14] Vic: They're going to leave. 

[00:34:16] Marcus: Well, that's going to be a big deal because that's going to shift, uh, the balance of power mightily towards Meta. Yes. Um, and we have a whole nother set of issues to deal with there with Meta, but that is, that's not a small deal at all. Yeah. 

[00:34:29] Vic: It's going to give a lot of money and power to Meta.

[00:34:31] Vic: Yes. 

[00:34:33] Marcus: Very quickly, very quickly. Uh, deep well is a digital therapeutic that receives FDA clearance for its video game developer tools. So we are continuing to track what feels like a resurgence in the viability of digital therapeutics. After kind of a low point last year, we, we covered extensively the Um, and, uh, our next guest episode will, will be a good one that kind of spans on all things in the digital [00:35:00] therapeutic space.

[00:35:00] Marcus: He 

[00:35:00] Vic: pointed out this story to us. So he 

[00:35:02] Marcus: brought this to us. Yeah. Yeah. So I thought it was kind of funny because it's not, it's not just any video game. Right. 

[00:35:11] Vic: So they're, they're a video game development shop and they have created a set of. Tools that other developers can use the tools themselves the algorithms around Using mindfulness and breathing, uh as part of a game.

[00:35:29] Vic: Yeah got approved The set of yeah game mechanic or yeah Um, those have been approved in on the 510 k pathway to be used in Medical devices as we've talked about extensively that doesn't give you reimbursement, but there's another The the mental health codes that are going to be live in 2025 We'll, we'll allow you to have a monthly [00:36:00] reimbursed fee to manage mental health patients.

[00:36:02] Vic: And this could be a piece of that. And the thing that was amusing that I think you were going to is the demo game that they released to show off how it works. On MetaQuest. So this 

[00:36:15] Marcus: is a VR game. We need to be specific, right? Yeah, it's a VR game. That matters. 

[00:36:18] Vic: Yeah. It's a first person shooter game where you're trying to kill.

[00:36:25] Vic: Bad guys, and they're trying to kill you, and you are teaching yourself to take deep breaths, and center yourself, and be less stressed. As people are trying to shoot you, and you're trying to kill people. Which I guess is a high stress environment, which will require being centered. I don't know. Vic, the name of the game is 

[00:36:47] Marcus: Xenjins.

[00:36:47] Vic: I know, I know. It's like, what? So I'm choosing to think it is good for health care that we have all kinds of people coming in. But I'm [00:37:00] not sure this particular game is going to be the one. 

[00:37:02] Marcus: I mean, it's just like you can't make it up, right? It's like this is so easily just you can just so easily object to this, right?

[00:37:17] Marcus: On the basis of, okay, yeah, you're going to do a mental health. video game that is about you killing people or you getting killed, right? I mean, it doesn't even have to be like scientifically shot down. It's just in the court of public opinion, this is going to get shot down. 

[00:37:34] Vic: Yeah. So anyway, I'm not saying and, and I agree with that completely.

[00:37:38] Vic: And I think it needs to be a fun game or an engaging game if people are going to play it, but there are plenty of games. That are not killing people. Come on that you could have other challenges 

[00:37:53] Marcus: You could even have the dynamic of a first person shooter But instead you're like, I don't know you're hanging up flowers or something like like, [00:38:00] yeah, you know There's a million different things you could be doing from that perspective that first person perspective.

[00:38:05] Marcus: What's 

[00:38:06] Vic: that animal crossing game? That was more it's more like a it needs to be challenging but more of an adventure challenge You want some difficulty? Killing someone with a laser gun I'm not sure that's the game that's going to win in mental health, 

[00:38:21] Marcus: not, not the great first choice, but, you know, glad that this is FDA approved in terms of the developer tools and look forward to seeing video game developers, you know, building many, many more digital therapeutics on, on, uh, virtual reality devices.

[00:38:34] Marcus: That's great. All right. Let's go to Dr. Ralph de la Torre, who, uh, if you don't know that name, that is the CEO of Steward Health. Last time we talked about him, he. Just said he was too busy to show up to, uh, Congress, uh, to the help committee. And that committee happens to have Bernie Sanders on it. And, uh, I mean, they issued a subpoena to him.

[00:38:57] Marcus: Yes. And he, and he declined the subpoena, [00:39:00] which I don't think you can do. So now. he has been found to be in contempt of Congress. Um, and that is an actual crime. And who knows, this could be the first of many crimes that he's found, uh, to be guilty of. But, uh, just this, look, we, we, we knew saying that you're not going to show up to a subpoena because you just don't feel like it is not an acceptable answer.

[00:39:29] Marcus: Yeah. You can't do that. Yeah. No, that's not something you could do. 

[00:39:32] Vic: In this story is his attorney said, well, he would have. Amendment, if he had come and their response was, well, that doesn't, that doesn't matter. You still have to go to the hearing and then state that you are claiming the Fifth Amendment.

[00:39:50] Vic: Um, and subject yourself to Bernie Sanders's wrath. That's 

[00:39:53] Marcus: right. That's right. You have to show up. So anyway, uh, we'll just continue to track this. I mean, on one hand. [00:40:00] Dr. Delatorre is becoming a bit of a persona to track. Yeah. Um, and I think there's going to be a lot of stuff that's going to end up coming out about him.

[00:40:10] Marcus: Um, but on the other hand, this Stuart Hell story is going to be the cornerstone for a lot of private equity. Yeah. You know, shot taking. Yeah. There's no question about that. 

[00:40:18] Vic: I'm not sure I care about Delatorre, but, or Cerberus, but it's going to be, you know, It's going to call into question all private equity, and so we have to watch it because of that.

[00:40:28] Vic: That's right. 

[00:40:29] Marcus: All right. The Kaiser Family Foundation has done some research on insurers and what kind of bonuses they are going to pull in for Medicare Advantage as a result of the overturning of the adjustments to the star ratings. And it looks like their projection is that it's going to be 11. 8 billion.

[00:40:49] Vic: Yes, given to the largest payers, but it is, it is given out based on their, their quality metrics. Of course, it's the adjusted quality [00:41:00] metrics, which were much friendlier. Um, but I think it's, I like Medicare Advantage in the sense that it does incentivize the plans to take capitated risk and then deliver higher quality services and get bonus payments.

[00:41:15] Vic: Now, the measurement. I think was better before they went back on it. Um, that's the process. 

[00:41:25] Marcus: Yeah. So it looks like this is an 8 percent decline from 2023, but on par with 2022. So, you know, kind of like stabilizing a little bit. Um, certainly not maybe the steep decline in what, in what was expected, um, this year.

[00:41:40] Marcus: And, and, you know, maybe if we kind of look at it, we zoom out a little bit, we can say, all right, so. The feds lost in court on this one. Um, they're going to have to pay up, but they've made their point, right? Is, which is that the direction we're going in here is we are going to [00:42:00] tighten up, uh, the criteria.

[00:42:01] Marcus: I, cause I, cause I think that the court case really was about, uh, it just being, uh, you know, Inappropriate and unfair to change the star rating. So not enough notice, not enough notice, right? It was the notice was the issue, but I think it's pretty clear. Everyone understands what direction this is ultimately going in.

[00:42:17] Marcus: And so there will be more time now to adjust your model. Decide what markets you want to be in, which ones you don't want to be in. And that's what we're still seeing. Yeah, those changes happening happening, even though the court overturned the, um, the adjustments are starving. Yeah. UT Health Houston is collaborating with OpenAI to offer clinicians HIPAA compliant CHAT GPT solutions.

[00:42:36] Marcus: So we are already in 2024 seeing CHAT GPT integrated into med school. Which 

[00:42:42] Vic: is, I think, good. It's definitely a change. But starting with the students, I think is the way to change medicine over the longer term. And those students 

[00:42:56] Marcus: have a long way to go before they start practicing. Oh 

[00:42:58] Vic: yeah, they're not [00:43:00] even in residency yet.

[00:43:00] Vic: That's right. Um, and so, I mean, Apple famously did this with schools, where they sort of get, worked with, Elementary schools and high schools and gave a bunch of Apple equipment and then people we learned Apple and didn't want to change when they went to work. Yeah, I think chat GPT open AI is smart to do this and it will be it'll be impactful So I so that I think it's interesting to see and probably good.

[00:43:23] Vic: I'm sure there'll be bumps but but good 

[00:43:26] Marcus: You know, one of the things I think is important here is that they're working with open ai On HIPAA compliant chat, GPT solution. So open AI is focused on healthcare. Yes. Oh yeah. Not derivative companies who are leveraging open AI's API. Open AI has a healthcare agenda.

[00:43:47] Marcus: Yes. They're already making HIPAA compliant tools already. This is pretty early in their commercial existence to be working on direct healthcare, um, yeah. They 

[00:43:59] Vic: have kind of [00:44:00] a container or a, an ability to take. Um, UT Houston's, um, data they want to put in the system and it doesn't populate out to other systems.

[00:44:14] Vic: It also doesn't take, you know, if, if we did a system, it wouldn't, wouldn't cross pollinate those things. So it's a kind of a container that they can put whatever medical information they want their med students to be using and then have the power of the, of the chat GPT. intelligence around it. So 

[00:44:35] Marcus: it's good.

[00:44:35] Marcus: I found this paragraph to be pretty interesting in the article here, um, from here, from fierce healthcare. OpenAI has a slew of healthcare partners that leverage its tools, such as Moderna, Eli Lilly, Sanofi, Color Health, Paradigm, Lifespan, Summer Health, and Oscar. So they're kind of establishing, OpenAI is working directly in the healthcare space across pharma, payer, you know, [00:45:00] diagnostic, right?

[00:45:01] Marcus: Um, so They're making it clear we're already in the healthcare space. So again, for us as, as investors, like you got to know that on a pure LLM side of things. Do I want to compete with open AI? Are you kidding me? I 

[00:45:15] Vic: mean, I'm happy that Claude and Google are out there, keeping them honest. I don't want to 

[00:45:23] Marcus: get in the middle of that.

[00:45:23] Marcus: No. No, not, not one bit. All right. So we talked about Kroger and their whole issue. They're trying to merge with Albertsons. The FTC has given them all sorts of issues and said, Hey, no, no, no. You two are grocery stores. Don't talk to us about Walmart. That's a different thing. So we have this update on the story that is kind of.

[00:45:42] Marcus: Put in more, um, shape around the FTC's argument where they have defined supermarket in a pretty narrow way and have found some really incredible mental gymnastics by which they are excluding Aldi, by which they are excluding Sam's Club and [00:46:00] Costco, and by which they are excluding Whole Foods and Amazon.

[00:46:04] Marcus: Right. 

[00:46:05] Vic: So if you take every grocery store out of the mix, Then there's only Kroger and Albertsons left. But uh, I think the Wall Street Journal reporter has been like sitting in the court case and so this was a great article sort of making the point that if the FTC wins It's going to set up like the clear definition of a grocery store has to have, um, more than 10, 000, 10, probably tens of thousands of unique items.

[00:46:43] Vic: And a customer can do one stop shopping in a physical location. And so Aldi doesn't have that. Whole Foods doesn't have that. Amazon's not a physical location. And so the Costco and Sam's Club require a membership membership too. But what's interesting is that if [00:47:00] they win. It's going to open up all kinds of opportunity for these other companies to, to make acquisitions because they have clearly delineated these different markets, which in the broader arc of trying to help the consumer is going the wrong direction, I think.

[00:47:20] Marcus: I don't. Understand the FTC under Lena Conn. Yeah. I thought when she came in, her whole thing was Amazon. Yeah. And this actually empowers Amazon to totally use M& A as a strategy to beat the crap out of Kroger. Yes. I mean, you literally said both your online grocery and your in real life grocery called Whole Foods.

[00:47:46] Marcus: Don't compete. Don't compete. So 

[00:47:48] Vic: Amazon, 

[00:47:50] Marcus: I think, go buy Aldi, go buy whatever, they're going to buy 

[00:47:52] Vic: Albertsons. They're going to buy Albertsons. I mean, that's the point. Like Amazon under this [00:48:00] logic can buy Albertsons, but Kroger can't. I mean, the, the way I think about it, I mean, we have seen this in venture.

[00:48:09] Vic: There are some people that are really talented in academics and research. And then we give them money and they can't operate a business. 

[00:48:16] Marcus: I was just telling a NLP about that today. Yeah. 

[00:48:20] Vic: Yeah. I mean, that's a thing, right? It's different when you get out of academia and you have to operate and I think that's lena khan I mean, she she was great in research.

[00:48:31] Vic: She wrote this Strategy of what what you could do to control amazon, but it's a different thing when you're Out in the wild having to actually argue things in court and she's kind of lost I think she's lost what the point 

[00:48:46] Marcus: was What is her big win? She's four years in what is her big win because it's over right?

[00:48:54] Marcus: I mean like we're at the end of the biden Yeah, run. Yeah, I don't think she's had a does she has she [00:49:00] had one big win in her term as chair If you can't name it if you can't think of it, then the answer is no. 

[00:49:07] Vic: Okay, so It's It's a very classic thing. She was great in academia and it didn't translate. 

[00:49:16] Marcus: I mean, has big tech been stopped in any meaningful way?

[00:49:20] Marcus: Have they been broken up in any meaningful way? Because honestly, this, that, that is the only thing to focus on right now. I mean, I think big tech is the only thing to focus on right now. They're running away with everything. Yes. I don't want to hear about Kroger and Albertsons. I don't care about that.

[00:49:36] Marcus: Right. 

[00:49:36] Vic: Europe has had an influence on big tech. Oh, yeah, we have almost outsourced the regulation of technology to Europe, starting with GDPR. And then more recently, I mean, I think today or yesterday, yeah, yeah, yeah. And I don't know that that's what the United States should be doing. But that that's what we have.[00:50:00] 

[00:50:00] Vic: The only thing that has affected big tech really is is European rules. Yeah, I don't think no matter who wins the election, I don't expect Neither side is going to renew her. I don't, 

[00:50:11] Marcus: I can't see why you would. Right. Um, all right. This is a big story this, this weekend in healthcare. So 23andMe basically has had a board implosion where the entire board, with the exception of the founder and CEO and Wojcicki resigned.

[00:50:28] Vic: Yeah. They all resigned simultaneously. Yes. I don't think I've ever seen that in a public company before, or at least it's very rare. 

[00:50:35] Marcus: No factions, a hundred percent, right. All independent directors. Walked out. Um, and it's basically because it's a publicly traded company where the value is cratered, uh, billions of dollars of value is cratered out of the company.

[00:50:49] Marcus: Um, and the CEO wants to take it private. And apparently the board thought that her proposal to do so was ineffectual, I [00:51:00] guess, is what you would call it. 

[00:51:01] Vic: Well, she, she made an offer to take it private, um, at no premium to the existing stock price and with no financing. So that's not a real offering. Real.

[00:51:17] Vic: It's not. There's no reason for share Rose to vote for it. Yeah. It's nothing to do there. And even if they do vote for it, it's not clear that she can do it. Yeah. It's nothing to do there. This is a very easy thing to solve. You hire a banker, you run a process. She, she, you know, is one of the bidders, but she's not the only bidder.

[00:51:39] Vic: And then if there's, if there are multiple bidders, she competes. It's very easy. She, I think she's not wanting to do that process. 

[00:51:49] Marcus: She has 49 percent of the, of the votes and she has apparently blocked the board from doing those kinds of things. Right. From shopping it. [00:52:00] So that's 

[00:52:00] Vic: probably why they say.

[00:52:00] Vic: That's why they're saying we're not, we're not actually functioning as a board. Yeah. So I think it's sad. And it also, part of the reason talking about it is they have, I don't know how many millions of people's genetic data, but they have a lot of data So you have a company that now is in kind of this limbo nebulous state.

[00:52:22] Vic: It doesn't really have a clear future. The board has resigned. They have a lot of people's data and I don't know what's going to happen with it, but it's not good. 

[00:52:34] Marcus: All right. The Commonwealth fund has come out with another report and surprise, surprise, the U S is the worst. 

[00:52:41] Vic: Yes. We spend the most money like we have for the past 40 years.

[00:52:45] Vic: I mean, nothing is changing in these reports. We have the worst outcomes. And. Yeah, the reports are the same. They use different ways, different graphical ways to represent that, but the it's been the same [00:53:00] forever. 

[00:53:01] Marcus: Uh, we'll, we'll put a link in the show notes, but exhibit nine, I think is the one that should get you the most angry because we talk about the spend the most have the worst, like that's all kind of exhibit nine health outcomes.

[00:53:14] Marcus: Americans have lived the shortest lives and have the most avoidable deaths. I mean, that is just, but ain't, but ain't that America right now. Yeah. Right. That's right. Ain't that America right now. All right. Let's not harp on that anymore. There's nothing more to say there. Uh, let's, let's wrap up with, uh, our AI rundown.

[00:53:36] Marcus: So AI spending spree in charts, latest quarter, 52. 9 billion combined. Between meta alphabet, Microsoft and Amazon. So the highest yet quarterly spending into AI, big tech doesn't really care. If you knock down their value, doesn't really care. If you knock down their multiples, doesn't really care. If you [00:54:00] disagree with their R and D spending, this is a full on race.

[00:54:03] Marcus: 52. 9 billion. And it's actually reasonably evenly split between Amazon, Microsoft, and Alphabet. Meta is actually spending the least right on AI. Um, and they probably are commercializing it the most of those. They're the ones that have 

[00:54:17] Vic: the best commercialization path. Yeah. They're probably, but they are not, um, Trying to sell the AGI.

[00:54:24] Marcus: Yeah. Yeah. They're trying to get to AGI and they're also not selling direct sort of AI services outside of their existing, um, you know, platforms. Right. They're, they're using it to, uh, enable and strengthen their ad networks. They're, you know, adding more integrations for, uh, interactions that people can have on their social networks with the different characters and things like that, but it's all, it's all sort of, you know, enhancements to the existing products.

[00:54:48] Marcus: It's not net new product lines. Right. 

[00:54:51] Vic: Yeah. So I just think it's good to keep track of this is incredible amounts of money. And as we'll show later, the results [00:55:00] keep getting better. Every month is another model. 

[00:55:02] Marcus: BlackRock and Microsoft partner on a massive new AI infrastructure fund. 

[00:55:07] Vic: Yeah. So this is a different 30 billion.

[00:55:10] Vic: Microsoft's involved in this too. But really BlackRock is. raising it. And the concept is to pull in money from sovereign wealth funds, from big institutional investors, from whoever wants to put money in families, to invest in data centers and infrastructure that then you can lease to, to the AI efforts.

[00:55:36] Vic: And I, I think it's good. I mean, it's good to have another source of this to keep these, you know, the big cloud providers reasonably. honest, reasonably priced. 

[00:55:50] Marcus: Yep, I mean, to me, the headline here is BlackRock and Microsoft, that's 

[00:55:54] Vic: massive, and 30 

[00:55:55] Marcus: billion dollars. 

[00:55:55] Vic: Yeah, they're not building electricity infrastructure, which is going to be the [00:56:00] bottleneck.

[00:56:00] Vic: Yeah. But, but they could easily add that. That's right. 

[00:56:03] Marcus: T Mobile strikes a deal with OpenAI. So this is just a, yet another way that we're seeing OpenAI continue to proliferate into mobile. 

[00:56:11] Vic: Yeah. So OpenAI is the partner again. What's interesting in this is they're talking about harvesting customer data. So, uh, really T Mobile.

[00:56:21] Vic: But with OpenAI, it's going to collect a bunch of data and then sell back services to their customers. I guess that's okay? I mean, it's going to be good in some ways and not good in other ways. 

[00:56:35] Marcus: It's, uh, to me, this is standard. Operating procedure for companies that collect consumer data. Nothing new about this.

[00:56:41] Marcus: Just you, you're just leveraging a new technology to do something they've been doing forever. So, uh, I don't see anything wrong with that at all. Uh, and then we will leave you with the news of GPT 01. I don't think we're going to be able to do it justice here, but we will leave a link in the show notes.

[00:56:59] Marcus: [00:57:00] Uh, GPT 01, I think anecdotally, we can say it's like five times as good in math and physics as GPT 4. That's right. It's like a 5x improvement. 

[00:57:11] Vic: Yeah. And it's improving in areas that have been stubborn and difficult to make improvements on previously. And the way they did that was a new, a new architecture, a new design where the system does reason, what they call reasoning.

[00:57:33] Vic: And that is incredible, and it's also, like, another big step towards having much more power. And so this, this guy, Matthew Berman, we'll send a link to his review. He's one of the people I, I watch for these reviews. He does them on YouTube. He's really good. He no longer has a way to test models. Like, this model beat all his [00:58:00] tests, and so he's got to figure out new ways to test it.

[00:58:04] Vic: Um, and he's doing reasonably complicated things that are hard for a model to understand. If I am, if I take a marble and I put it under a cup and then I pick up the cup and put water in it and then I heat that up in the microwave, where is the marble? And the, the past models have not been able to engage with that.

[00:58:33] Vic: They just can't predict the next character. They, they don't know. It's too confusing. You'd have to reason with, well, where was the marble? And think about it, this was code named strawberry because OpenAI found a problem in a very simple thing of how many Rs are in their word strawberry. And for a long time, they couldn't get the model to answer that correctly.

[00:58:56] Vic: It always says two because there are two right. [00:59:00] In the end of strawberry, but there's also one in the beginning. 

[00:59:03] Marcus: Yeah. 

[00:59:04] Vic: Um, and so I think that problem is what set them off on this whole thing. Right. Um, and they've solved it now. So it's another step towards an agent that can just like be given a task and go do actually do it.

[00:59:17] Vic: Yeah. Reliably go 

[00:59:18] Marcus: do it. 

[00:59:18] Vic: Yeah. So Devin has a, has a demo with. Oh, one now, Devin's getting much, much better because they're using this now. Uh, I don't think Devin's really ready for primetime, but it's getting a lot closer to that. 

[00:59:33] Marcus: Everything is getting a lot closer. I mean, I, I was looking at a, a Haygen video, uh, this week and I was like, it's still not there, but man, it's like next month it'll be there.

[00:59:44] Marcus: You know what I mean? Like, I think that's like the really crazy thing is next year it's going to radically change. Every industry, and it's certainly going to change our industry, [01:00:00] Vic, there's no way. Oh yeah. There's no way it's not going to change venture. It's, it's, it's like the, it's like the wizard tool for our industry.

[01:00:08] Marcus: Yes. You know, it's exactly what we need to make highly capital efficient companies. Yeah. Bottom line. I mean, in every way, shape or form that you could think of every function of a business. Yes. Is going to be able to be done by these things. 

[01:00:25] Vic: That's right. Yeah, I mean, I was at a dinner, um, with a couple of local people talking about AI on Saturday, and we were talking about like, when is the first billion dollar single founder company gonna exit?

[01:00:43] Vic: And the longest, so there were eight people at the dinner and we're all interested in AI, so it's probably not an objective set, but the longest was 36 months. That was, that was the longest of the eight of us. I think it's within a year. I [01:01:00] 

[01:01:00] Marcus: mean, billion dollars on paper, not billion dollars in terms of like real revenue generation, because there's, you know, enterprise value.

[01:01:06] Marcus: Yeah, yeah, yeah. Yeah. Perceived enterprise value. 

[01:01:10] Vic: You raise around based on that, based on that. 

[01:01:14] Marcus: Yeah, I, I, I would agree with you. I think I, look, I think the large pools of capital believe, and that's why. Yeah. Right. The large pools of capital believe in this. Yeah. And it becomes self fulfilling. Yeah. And somebody will do it simply to make the point.

[01:01:31] Vic: Yeah. And so we'll end with this. Like, this is why we're having all the labor strife. And I understand it. It is a significant risk to people that are not that technical and are doing jobs where they don't have a huge amount of savings. And so they need to keep those jobs. But I don't know that these individual companies are going to be able to solve that.

[01:01:59] Marcus: Yeah. 

[01:01:59] Vic: I don't know how [01:02:00] we solve it. 

[01:02:02] Marcus: All right, man. I don't know why this feels so heavy today, but gosh, uh, I think it's because we ended on 01 because I really view this as, um, a step forward where this feels like the step forward we're not quite ready for. This feels like the model that, that probably made a lot of people uncomfortable and some people decided to leave open AI and things like that.

[01:02:24] Marcus: Um, this, this is a real. Uh, you know, you think about a model like this being distributed, it's It's smarter than all the people, you know, it may not be true. AGI command response. It's smarter than all the people, and it's going to be broadly distributed. Right. And that's, 

[01:02:45] Vic: it's smarter than I think every individual person.

[01:02:49] Vic: That's, that's what I mean. Forget the average, it's smarter than every individual person and it never gets tired and you can replicate it. And so that, that is [01:03:00] going to change our society in ways that are not clear. Yeah. Um, and I think. If you're listening to this show, you're ahead of 90 percent of people in healthcare and 80 percent of people in the general population.

[01:03:17] Vic: And so, in healthcare, I think we have, at the end of the day, you still have to interface with the human body. You have to have empathy with the patient. Yeah. And we have too much work to do and not enough humans to do it. Yeah. And so, I think it's an easier challenge. I'm excited about it. bringing innovations to healthcare because we need all the people we have.

[01:03:38] Vic: That's not true in every industry. That's right. Um, and the Fed cut rates and stocks at all time high. And I got a bunch of portfolio companies to sell. So I'm in a good mood because of that. 

[01:03:48] Marcus: All right. Well, I'm in a good mood because we had a good show and I appreciate you always curating such a great topics and great stories.

[01:03:54] Marcus: Yeah. Uh, so with that, I think we're going to wrap it up and we'll see y'all next [01:04:00] week.