Founders Fund's Bridget Harris breaks down the Prime Intellect raise and where crypto investing goes from here

comma AI guy is talking about um how he thinks AI will uh like evolve oh hey Bridget how you do oh hey hi welcome to show how's it going guys we have you read metamorphosis of the Prime intellect no no but all of all of Prime's like design their you know logo all of that is inspired by yeah I think we have a copy in the office actually but I haven't read it it's I mean I don't want to like spoil it but uh Andre karpathy also listed it as like one of the greatest uh like sci-fi prediction books like or you know in general and his his summary which I think summarizes well is just AGI gone mixed and it's very very weird it's like it's like what happens when you're in this post scarcity society and you want some sort of like social reward or some sort of like reward but everything's like post scarcity because you can just wh anything so no one ever dies but then you know what do you do and it gets very very weird it's very bizarre uh and George H highlighted on the on the Lex Freedman podcast and so it became very popular and then there was a there was a sequel to the book as well like last Casino in the universe or something um but it's pretty like I don't know it's like spooky to me but I highly recommend everyone check it out anyway uh we want you to break down the deal give us uh how did you meet the founder how' we wind up uh doing the deal and and just give us a background on what prime intellect is what they do uh give us the high level yeah definitely so we met them I want to say about a year ago um we actually reached out to them because most of the AI crypto projects we had seen had been just like not really interesting it was more like copy paste from existing AI companies and then they would like slap a token on top so it would be like character AI but with a token like Lang chain but with a token like hugging face with a token that kind of thing um and I think we saw Prime announced their like 1 billion parameter model trained into distributed way across like three continents and then we reached out to them and we were like wow like we would love to to meet you guys and chat you know more about it um and we met with them at literally like I think the first meeting like we were sold like we were like these Founders are like a-level top tier Killers like Vincent and Johannes like you can just like feel the energy like radiating off them like they're very passionate about what they do um they're in crypto AI like for the right reasons whereas I think a lot of Founders kind of just hopped into the space like after a lot of the hype um took off and you know we looking for like a quick token pump but that's like could not be further from you know the team Vincent has built and and what they're doing so basically they're tacking the pro tackling the problem of like distributed training um which you know access to compute is one of like the largest bottlenecks in you know AI training today um and you have these like huge data centers that are centralized um and power constrainted and expensive and what prime is doing is it's basically like a true peer-to-peer marketplace where like you know you can go on and bid for compute and then suppliers can go on and Supply like idle compute um and then it enable like it has incentives you know layered on top to really look at the the render Network like the I think it's like the octane team what they did in like CGI have you seen this I don't know if okay I've seen like render and AOS I don't know if I've seen the CGI because this was a thing like years ago and everyone was like oh like you know crypto tokens like it's all fake whatever but I have been doing a bunch of CGI work where uh you would need to go and render uh like whatever scene you built in Cinema 4D and you needed a bunch of gpus not as many as like a training run for an llm but uh but you you send out each frame and each frame is like deterministic so you can so you can very easily parallelize these you can run it on AWS but uh there was a company that actually built a very similar system where you could kind of sell back your excess GPU time onto the render Network I think it was kind of uh like low Tam because the amount of Independent Artists like Pixar has Disney they have their own server farms and then like the lowend like iance like people tinkering is kind of small um but it was very cool that it was like oh wow this this makes a ton of sense how do people actually transact in this like having a token that moves these uh you know uh GPU resources around made a ton of sense um and so it's cool it makes a lot of sense in the in the age of AI do you know more about um kind of like early use cases obviously like the frontier insane like you know gigawatt scale that's going to come in the future what what are some the more exciting use cases in like the near term is it just like fine tuning stuff do you have any insight there yeah yeah so I mean they're right now they're basically working on just like scaling this up to like state-ofthe-art level models like they did the 1.

1 billion parameter you know training run like a few months later they completed like a 10 billion parameter training run Y and then you know basically just serving as like the the peer-to-peer Marketplace between the supply and demand side so like on the demand side you have like AI startups that need extra compute like Labs like you know random independent developers that sort of thing and then on the supply side it's like data centers and then individuals and also startups with like idle compute like you have like hugging face like semi analysis that want to just like earn extra for for their idle compute so it's basically just like like the way we think about is just enabling like the AI Market to like progress at a much faster rate because it's just like enabling all this idle compute to be to be put to work and then on yeah on their end it's like basically what they did is Google Deep Mind released a paper called like dloo um which stands for like distributed low Communications framework um and they implemented that but in like an open source way like they called it open doco um such that like you can train across like many different continents and that was like a huge step function Improvement um like from the research side that that we've seen so it's basically abouted at that like they they have that spanner and big query and like they they just are so good at at at taking some sort of like database and being like oh yeah now it works globally and deals with all the time zone issues just feels like incredibly hard engineering but they always figure it out and then of course it opens up a million other things uh what questions do you have for Bridget uh yeah so so taking a little sit back from Prime intellect uh one question I've had that you might have some insight on is was there a frustration among uh crypto Founders that are you know uh you know seeing the news on Sunday and general frustration around not being included in the reserve right it seems like that the reserve was effectively you take the top five biggest you know projects by market cap and you just you know put it in a reserve right it didn't seem like it was super thoughtful do you was there was there any idea leading up to this that there would have been you know uh any surprises on that list and um yeah I'm I'm curious around uh sort of your response but also across the portfolio How uh Founders are kind of reacting to that that are running you know s these you know bigger Pro bigger market cap projects yeah no it's a really good question I think generally people were a little bit upset because you know the xrp the cardano inclusion just like there's basically two plausible explanations that I think the crypto Community came to for why this could be the case one is just like simple like unit bias like xrp and cardono are like 0.

001 Cent or you know something akin to that and a lot of Americans will like you know go and see that oh cardano's like 1 cent and bitcoin's like 100k and like they'll genuinely just go and buy like cardo because like it's cheaper sure and so like the the the joke on Twitter is like you know like Uber drivers everywhere are celebrating that cardano in the Strategic reserve and like it you know Trump could be playing some like 40 chess to like Curry favor with a lot of just these like retail buyers so that's that's explanation one um that these buyers have like unit bias and Trump's trying to Curry favor with them explanation to and this came from like udy at at tap rot Wizards is basically like Trump is going way too far in you know the extreme direction of we're including all these crazy Assets in their Reserve because it does require an act of you know Congress and then he's going to roll back and kind of be like okay I'm making a concession I'm making a compromise and we'll just have Bitcoin and because he always kind of at the outset goes like way too far way too intense you know and then kind of rolls back and acts like he's making this huge concession where a Bitcoin Reserve would already be a huge you know act um for Congress to make but yeah I think I think telling John earlier I said that Trump doesn't get enough credit for not including trumpcoin in the reserve because you know know he's talking with his team why don't we put big yeah let's let's let's put in the whole every White House coin put in there yeah like if Trump had just launched the Trump coin and not Milani like there's all these jokes on Twitter of like society would be like amazing like you know crypto would be mooning like Milan the Melania launch like messed up our whole industry but yeah it it really does feel that way what is you know what's the broader sentiment on the investor side right now uh any of the crypto focused investors that I know the ones that have done well have just taken a very long point of view they understand that the market has cycles and you need to be in you know kind of basically deploying you know throughout you know uh consistently if you want to sort of benefit from um benefit from these sort of Peaks uh how you know and and and again we we we also saw this sort of bunch of AI slop in the sort of crypto markets and uh uh what what are the areas that you think are most exciting specifically in the context that uh you know the joke is that crime is legal now but more seriously we're in a favorable uh regulatory environment for basically the first time in history and it does feel like the next four years are an amazing opportunity to realize the full potential of the technology right specifically around um you know I'm sure areas that you're looking at a lot so where are you most excited to invest what what is the general sentiment right now do you feel like people have pulled back you know talk talk a little bit about that yeah it's a good question so like when Joey and I started at Founders fund like almost almost two years ago now um the sentiment was terrible like it was six months post FTX like you know no one was deploying crypto only funds were not deploying generalist funds were definitely not deploying um yeah and that that was one reason I wanted to join Founders one because I was like wow this is like actually a contrarian act then we did start it was so funny you guys just came in and went so hard so fast we came in just like started doing some deal it was ridiculous it was ridiculous yeah yeah but no and it it was like in retrospect the best time to start deploying like obviously it's easy easier said than than done um but now yeah I think the market it's interesting because I mean the sentiment isn't amazing but I would say prices on New Deals that we've been seeing have been like asymmetrically High like we the last deal we did was Prime intellect and that was in I want to say October or November so we haven't done like a net New Deal in like you know five fiveish months I think what we're continuing to look for is basically like applications uniquely enabled by crypto where like integrating crypto is like a step function Improvement um to what you would currently have so an example is like poly market like prediction markets obviously existed before poly Market you know but they were very IL liquid your counterparty was you know across the world bet in a different currency with a different bank account um there was chargeback risk um and doing all the conversion on the back end was super costly but now if you're just you know if you're just using crypto it genuinely does like make a lot more sense from just like streamlining the you know the the market side and Prime intellect you know it also applies to that it's basically just like the same thing but for compute if you were you know paying in a different currency like to access compute like it would be a lot of work on the back end on the protocol side and that's why there's like these compute brokerages that charge like insane markups um and also back to Pauling record really quick too is like Joey always tells the story but like if you win too much on prediction markets like they would actually just like ban you back in the day same as Vegas yeah yeah yeah yeah so um yeah I believe Nate silver is banned from all the sports betting apps yeah I mean Dana Dana White Dana White has these stories of casinos you know he him because he loses no no he's super into aarat and he actually does well he does he does well and he's had casinos uh tell some story about losing like six he goes way no he goes up figures down seven figures whatever but he's gone on these sort of R bet exactly no it's insane yeah and then I I think the last thing I'll say is like I think defi in America is definitely like a lot more you know better positioned now in the sense that like D5 Founders had it the worst I think the past four years like many of our Founders just fully moved out the United States because the risk was just like you know way too high um but we're going to get a new like Market structure Bill and hopefully we'll see like regulatory exemptions for for defi protocols because you can't regulate defi in the same way you regulate like an exchange or brokerage right like it's just a set of smart contracts and so like there should be exemptions like we see in like the you know there's exemptions in the fit 21 bill but you know that never it it's it's all still in the works but if we do get exemptions for D5 Founders I think like that will kind of Usher in a new you era for Define maybe start do you think that starts with like Bitcoin lending uh is is that kind of like the first lava lava lava yeah yeah yeah so we invested in lava um yeah it's definitely a very interesting use case I think I think defi is just like it's such a broad sector but Bitcoin is like Bitcoin does enable like a huge use case in defi because so you so many people own Bitcoin like there's just so much Capital inflows to bitcoin and like if you can lend against your Bitcoin and make your asset more productive like there's going to be so many whales that that that want to do that like they just do not want to sell um but even for regular D5 like if you look at like defi summer in 2021 like you know a lot of Founders got in trouble for what they were doing um and it was just it was just such a new market that people didn't even know what was allowed versus not and then the SEC was issuing like Wells notices to like the most compliant companies like Unis swap um coinbase like things like that so I do think that when people saying crime cycle like I think those people are a little overblown because I actually think the the new Administration is just really really smart like I don't think they'll be issuing Wells notices at random to like coinbase in Unis swap because that's just dumb but like they will be actually going after like legit scam so I would say like act according I mean yeah for the last four years the best like cop in crypto was like coffeezilla it was basically like like the only hope that you can the only hope you have if you're like seeing a scam happen is coffeezilla makes a video and then everyone realize is it but like the SEC is not going to step in for any of these things now yeah there's a lot of room to just be smart and actually just go after the the the scams and like the power law bad stuff yeah exactly do you still where do you see opportunities around Founders that are interested building uh in in the stable coin space the the bridge acquisition I think was fantastic for crypto broadly it really was a you know real stamp of approval for stripe to go out and pay this sort of pretty significant Revenue multiple to buy uh a developer platform a crypto developer platform which you which uh which bridge is uh and then from what we know that sort of spawned a wave of new stablecoin you know startups to come out say we're building in stable coins too right and so I'm sure you saw a lot of those companies where are you excited about the potential of stable coins uh and uh you know going forward yeah yeah yeah it's a really good question yeah I think after the bridge acquisition we genuinely got like probably like 50 stable coin pitches like it was legitimately like yeah um but no I think like right now the most interesting use case for stable coins is probably in like B2B payments just because that's where there's the most volume it's like yeah like literally like you know billions and billions of of dollars of volume um per year and B2B payments like cross border historically just take so long there's insane markups like the bank takes a lot of fees I think on the consumer side like the argument is basically like okay you know if a user like swipes their card you know visa and MasterCard take like 2% fee a lot of that goes to the issuing bank and then it will actually flow back to the user in the form of like rewards um and that's such a different story than if like I want to pay like cougan or something in cgans in Europe or whatever and it takes like five days and it you know they charge like 2% like that's just like kind of scammy right like that should not be a thing anymore so I think that's an interesting use case on the on the consumer side A lot of people are arguing like on the credit card side like it might be stable coins under the hood but you know it's doubtful that the user will like know it's stable coins at least to start um but yeah I think B2B payments is like that's where there's the most volume that's where there's the most incentive for like startups to compete um and then the issue there is like getting the the regulatory stuff figured out the corridors opened in these different markets um and then just yeah starting to capture the volume but and the infrastructure to prevent a City Bank from sending a ion doll yeah I mean question like like how do you solve the fat finger issue like obviously you can do multi but but but let's say you have you know a group at City Bank they're like all right we got to send you know uh uh some stable coins to somebody and then it's late at night and one person signs off and someone else signs off and like three people fat finger it collectively and you're like well we had these Protections in place and now we have to go ask a customer nicely like City Bank should knock it into crypto because like that money would be gone forever if it was crypto there's no way honestly there going be huge Alpha in just being a City Bank customer and signing up for as many accounts as possible no but I think those are I mean I think those are real things to figure out it's um my last company like we we enabled you know stable coin investing and and uh and we actually had like I won't even name them but billion dooll crypto companies that were customer of ours that said at the time this was 20 early 2022 we don't want to accept stable coin is too much of a hassle um and so I think that's I think that's evolving but um Bridget amazing to have you on uh you're you're a regular now uh and always welcome always welcome we're looking forward to having Vincent on the show as well yeah awesome thank you foring by see you soon bye bye guys very fun what should we run we have another guest or we just diving back into the show I mean we could call Sean Maguire right now I have his phone number he has responded to him should I just give him a phone call yeah I don't want to talk I need to make sure the camera doesn't uh doesn't see anything let me see should I just for some reason it's it's I don't want to talk more about this but let's see I Sean okay he didn't pick up oh well next time next time we'll get him we'll get him we'll send him this clip post this clip and then he'll feel a lot of pressure to come on the show anyway timeline we haven't done timeline because we had a lot of guests we got to go through some timeline uh first up David holes founder of mid Journey uh founder of Leap Motion he says chemistry to biology silicon to blank what do you think I don't even remember who put this in there uh you put this in oh you're yeah yeah or or or Brent I think it was Brent what I got somebody new joining the team soon uh we got some buddies on helping out um I don't know yeah it's interesting it's like he what he's getting is like is like you know biolog is built on top of the chemistry silicon he's he's clearly