Martin Shkreli on building a Bloomberg killer and the future of Wall Street data

Elanor Ribyan Skrey in the reream waiting room. We got Skrey coming on to the show. Welcome to the stream. There he is. Finally. Good to see you guys Friday. How are you? It's great to see you. Yeah, good to hang out. Wait, this is a new view. This is not your your regular streaming view.

You don't normally see the guitars. Yes, I I I change it around sometimes. That's cool. What's new in your world? Um, well, you know, I'm in the startup game as always. Uh, I think this is like the 83rd company I started. So, very nice. See how that goes.

And, uh, I've been my my the company I'm working on makes, uh, it's like the Captain Ahab's white whale for VCs. It's a Bloomberg competitor. Um, it's like the the this will be the last time somebody tries to compete with Bloomberg one way or another. It's the final Yeah, it's the final boss of of startup ideas.

Um, bring Yeah, just just give us um I mean this makes like the the founder market fit is is incredibly strong. So, um when I when I initially saw you announce this, it made a lot of sense. What uh yeah, what like what was the initial catalyst? I'm assuming you had did you beef with with Bloomberg at some point?

He definitely beefed. Yeah. Um that was a big part of it. Deplatformed deplatformed nothing. You know, Trump was deplatformed from Pinterest and that and that that was like his, you know, personal 911. For you, it was probably the Bloomberg terminal. Yeah, exactly. I've been using it since I was uh 17. Wow.

And you know, afford it back then. What's that? How'd you afford it back then? Is it like a year? I worked at hedge fund. Yeah. At 17. Very nice. I worked at Yeah. at 16 actually. I worked for Jim Kramer's hedge fund. Okay. And I worked at a Tiger Cub and I started Wait, so we need the backtory on Jim Kramer.

So apparently he was just he would he he he would get so stressed out like running the hedge fund that he just was like I'm just going to become a media a media guy. Is that is that like loosely correct? Yeah 100%. I mean so we made 23% average annual net returns. So net of 20 was good. That's amazing.

Narrative violation. I love it. It was a very well you have to you have to think about what investors looked like back then. It was a very different world. Um, information arbitrage was a thing. Um, gaming, Wall Street's like upgrade to downgrade system was a thing. So, I will say he had extremely good instincts.

Um, anytime he seemed to buy a stock for the long haul, he he didn't do that great, but he was extremely good at, you know, I I'm not sure you would want somebody else managing your money because he was just so careful. And in 2000, we were up like 35ish%. Wow. So, you know, I saw the. com meltdown. It was a lot of fun.

I shorted some of it myself and it was uh it was it was a great time. That's fantastic. That's wild. And then and then what was the story which which Tiger Cub were you at? What was the backstory there? Yeah. So, after Tiger um and just before I get to that Kramer was absolutely nuts, right?

So, like he would he would take a computer monitor and just throw it at you and it wouldn't be like one of these playful like, oh, I'm just going to throw it at you and like you're going to get out of the way. He'd like aim dead center for you with like center. Yeah. With force. Be like, "Bro, you almost just killed me.

" He's like, "Wow. " Lucky. Did you deserve Did you deserve it? Did you deserve it, though? Let Let's steal man this a little bit. What were you doing wrong? I wasn't doing Nobody was doing anything wrong. Everyone says that when they get a computer monitor thrown at them. You're not feeding the allegations, dude.

I think part of it is just trying to like He would yell things like, "This is a foxhole. " Mhm.

Um and and the idea was that like we were at war with the market and that you know like if you were if you you know this is World War II if you're not in here trading stocks with us and like trying to get an edge or whatever that means trying to make a dollar like if you're not taking this seriously going to war I just have to say if you if you wake up every morning you say I'm going to go to war with the market versus I'm going to dance with the market like the approach of going to war sounds sounds very very very stressful.

I've worked with so many people over my career and I I've never met a person that amped up and crazy and it motivated you. I mean, it made you want to deliver, but it also scared the [ __ ] out of you. The guy was like very temperamental and you know, but he was he was extremely good trader.

Like I said, you know, he I think his worst year was like down 5% or something. It was like wow, you know, he was he was pretty solid. And so he was like, if I don't quit, I'm going to kill somebody. It was Yeah, he b he basically said that. Yeah.

I think he said that, you know, if I keep doing this job even at a comparatively young age, I think he retired at 40 that, you know, I'm gonna have a heart attack or something like that. Yeah. Yeah. Yeah. You know, I I I ended up going to a Tiger Cup after um Tiger wound down. Uh a few things happened.

So Julian hired Chase obviously and we know where where sort of that came uh what happened there.

But uh Julian, you know, wound down operations and he seated a couple of guys and he kind of wanted to be in the seeding business where he'd give you 50 million and take a part of your GP like you know maybe 20% of your GP or more and you know he'd help you raise money uh give you advice this and that and Alex Julian son would help.

Julian passed away recently as you know and but in the tiger heyday when they managed you know 15 billion or something there were two principal tech guys Larry Bowman who was a bit of a legend but you know it's a name nobody really knows because he was a legend in the 90s but you know he is a family office and he kept investing and things like that so he started Bowman Capital and then Steve Shapiro uh who was my boss started uh Intrepid Capital.

So I worked there. I was uh it was a $2 billion fund. I was a video games analyst. So the way I could convince Steve to do biotech was I had to cover software too. So I covered interactive entertainment uh enterprise software and biotech. And it was uh it was a lot of fun.

And you know uh it it it uh the tiger cup style of investing has Yeah. Were you there out of take two? So we were one of Take 2's largest shareholders back then. Okay. And um you know I think it's a short now. Um I think that I didn't 100% get your question though. You were saying something about buyout. Yeah.

Well, the story that I've heard is like Strauss Zelnik went to the board and basically said like this company is mismanaged. There was an FTC lawsuit in the works. An FTC FCC lawsuit in the works. And he was like, I I'm a beast. I've run big Hollywood studios.

He was like JDMBA type like really cleancut amazing manager and basically said like you should install me as the management here. And so he didn't really do like a classic buyout. He just appealed to the hedge funds that owned all the shares and said I would be better and raised his hand and they said yes.

And he came in cleaned everything up and they went on a great run. And so it's just a fascinating story because you don't hear about that type of thing happening that much. At least that was my understanding of the story. Yeah. No, I think that's right.

And then Bobby Bobby from Activision was the same sort of the same story, right? He kind of I remember meeting Bobby Bobby in our office and you know Activision was uh you know kind of a micro cap you know. Wow. Or you know kind of a small cap and he built it from this was 2004 2005 by the way. Yeah.

And he built it into a you know 44 billion sale partially thanks to Lulu. Uh, and uh, that's true. That was it was an exciting time for video games.

One of the things I learned, you know, all my US counterparts at hedge funds were were like uh, very confused about the stocks uh, they traded because there was only like four or five publicly traded companies.

And I would go to people and say, "Well, I'm long Nintendo and I'm long, you know, some of these weird Japanese companies like Square Enix or Konami or, you know, these. " And US hedge funds just ignore this stuff because it's like, "Ah, it's Japanese. I don't have anything to do with it. " Sure.

So, a lot of glory days, but you know, the glory days I'm interested in now are uh amongst you know, building my startup and you know, again, I think we understand, you know, financial information better than any San Francisco nerd and uh I think that uh the uh one of I mean how like like Yeah.

So it's interesting to like we're enter you know we're very clearly in this period now of just like hyper financialization things thing thing you know the markets trading on vibes trading on your stream dayto day uh you can now you know as like stable coins explode and and people have more assets on chain they'll be able to make a couple taps and go like 100x long at any given period of time like the internet is like changing capital markets and it's increasing volatility and so how much of of of uh of your new company is trying to like lean into that when Bloomberg terminal would have been like like more f like I've never personally used a terminal um but I imagine it was more like hey these headlines are hitting and and this this kind of information is hitting PR newswire but today by the time something hits PR Newswire a stock might might have traded down 20% before that point.

So, how much is your new your new startup um kind of uh I imagine you're leaning into the way that you kind of maybe your next 20-year vision for capital markets, right? It you know, what would Mike Bloomberg do if he was 30 years old now in 2025?

You know, I don't think I think Chimath said that, you know, I think in a re recent episode he said, "Oh, it's this hundred billion dollar thing. It's just waiting to be toppled. You know, anybody can come in. it'll it'll it'll drop like a house of cards.

Not only do I think that's not exactly true, but I think the bigger picture here is that a well-run financial information company could and should be worth a trillion dollars. So most of the people, so I met Bloomberg in 2005 and by then he had basically retired. He he became mayor. He was mayor for 12 years.

Then he wanted to be president. Uh I have this contention that I think Mike is the richest person in the world and it comes from not only he's got about 13 14 billion in revenue almost all margin. Um so if Bloomberg were to be sold maybe it could get 200 billion or if it were floated.

Uh but not only that, he's got this family office and very few people know about this, but he's taken the Bloomberg dividends and pumped it into a family office that basically Carlilele and all these guys, you know, the Warbert Pinkis, all the private equity guys like KKR, they go to him first and and he tosses in like 500 million in each of these.

He's an anchor investor in like every VC, every private equity fund. And the guy's compounded that money. So he could be worth four or 500 billion. And very few people know the Forbes list is, you know, the Forbes list didn't know about Jim Simons until heavily manipulated five years ago. So, yeah. Yeah. Yeah.

That's crazy. So, I think, you know, just in terms of and it fits his brand that he he he would not be the guy like, you know, sending a message to to Forbes saying, "Hey, like you guys know you have this wrong. Really, I think you should apply this kind of you should you fight to get off the list.

" like Trump famously fought on to fought to get on the list, but you know there's there's an ar either way. Um what do you think about the meme where people say like oh it's not you know the next uh like like the value of the Bloomberg terminal isn't just the data. It's not going to get oneshotted by AI.

It's really a social network and the value is in the chat. I I get so mad because again, you know, SF people don't know Wall Street. If you haven't been a trader on Wall Street, you have to ask TFU. like it's just not, you know, this isn't your your lane. Like you have to talk to users.

I was in a hedge fund yesterday, one of one of the bigger hedge funds. They put like 20 people in the conference room and we talked about what they actually need. And you know, social network is part of it. Again, Bloomberg's worth 100 billion because they have a very good social network, which is true.

They have decent financial information capabilities and um a couple of other things, but they don't have the whole picture.

And and what I wanted to say about Bloomberg kind of quai retiring was that he basically quit at the exact top for fundamental long short or fundamental investors quant started taking over Wall Street by then. So today of the top 15 to 20 hedge funds 85 90% are quants. So Bloomberg does no quant offering.

They don't do it. And all all he had to do was stay employed instead of want become mayor. And I'm sure he would have been selling Jane Street and Citadel and all these guys, Daw, etc. software instead of everybody having to make it themselves. Imagine writing your own ERP or writing your own, you know, CRM.

That's kind of what what Wall Street has to do. And it's pathetic. Yeah. Nobody wants to do that [ __ ] So my Wait, when you say quant uh is there a bifurcation between like high frequency trading and just quantitative trading? Yeah. And I think it's going to get my goal actually is to make it more of a spectrum.

So, the fund I was at yesterday, I said that you guys can do what Renaissance does. You know, it's not a secret anymore.

It might have been a secret in 1995, but the amount of kids that have come and left every one of these firms topping from Jane Street to Citadel to the next shop, everybody knows what everyone's doing. It's just a question of your risk tolerance, your leverage. Execution is very important.

But I think that you know trading you know the the stock pickers are kind of going the way dinosaur and I think by moving up the power curve for Bloomberg helping people become quants you know the quant industry has sold I think this tremendous lie and again these are customers you know I love those guys but I think that is in their vested interest to tell people that look at this blackboard with all these math equations there's no way you guys could understand this you're too stupid you have to be an IMO winner you couldn't possibly come here and make billions but we saw what James Street did.

Well, I think I think c certain VCs like to do this too where they're like ah VCs, you know, really a get-rich slow business. It's really like really a tough business.

It's so such a like you really wouldn't want and and I think generally like you know you don't want anybody going into any industry being like I'm here to make easy money. So it's like it's generally good.

But but yeah, there there's a lot of incentives to just say you know yeah on on the high frequency side like what are the actual other data inputs? I remember seeing this like I don't know some sort of technical talk. Some guy was talking about like the different algorithms.

One was called the Boston shuffler and and and and the whole algorithm only looked at the order book and he was getting into all these like you know uh you can you can place an order, you can cancel an order, you can do a cancel replace.

He was like getting into the minutia of like basically the API of the NASDAQ or something like that.

and and and it seemed like the algorithms were designed in in the high frequency trading world to basically ignore everything else in every other data source that even could be put in and just operate purely on the orderbook data um just better than everyone else.

But so that feels like okay I wouldn't know how to you know create any extra value there with something else but it sounds like you found something that they all need in common like what is that? Yeah, I I think there's it's it's a it's a series of tools across Wall Street. I don't think it's just one thing.

It's just a myopia that you know and and just sort of a a laziness that's enveloped the bigger companies again you know there's the so so we have this data that shows that around 5% of Jane Street and two sigma use Bloomberg and the reason is because they view it as an entry-level tool you know uh Chamath is looking at it and says wow this is like an exclusive social network with the best financial let's turn Peter Teal's on there 247 I see his little green light next to his name but the uh the point is that you Wall Street changes and the tool the tool sets are changing even for fundamental equity guys.

So credit card data you know to the minute is something people like. What is the what's the feature set that's most important to you?

Are are are you heavily integrating social or is the social layer moved on to signal and and other messaging services that maybe um have disappearing messages and don't exactly Wall Street's so regulated that I'm not sure that if you're using signal it's a little dangerous I'd say oh really that's somebody you know as somebody who's gone to jail you know I'd say that you know that's maybe not the best best idea but regardless I think that you know social is definitely something people could do better.

You know, there's no Facebook for finance, you know, where you can post, you know, things in your feed that you bought this stock or sold the stock. People kind of lazily use Twitter, which if you if you use it, it's sort of a mishmash of of uh of spam and things like that.

But in any event, I mean, I'll have more to say on the product. We haven't launched the product yet. Um, but we we we do have a millions of dollars in run rate. You know, I I banged my head against the wall trying to do AI startups and we made an AI doctor. We made text to speech.

We tried all this stuff and it was impossible to get revenue. Impossible. But the second we make a trading tool, it's impossible to stop the revenue from coming in. You know, uh it's one of the best spaces. In fact, most of our competitors like Trading View and stuff like that, they were profitable day one.

So, you know, my suggestion is if for for startup founders is this is a market that just traders just throw money at you like crazy. I mean, they're people will pay you to help them make but you have to be formerly in the foxhole. You have to have at least one monitor thrown at you. It sounds like Exactly. Yeah.

So, so who but but in the long run, how how much how much are you focused on retail investors, people that are just, you know, fully independent versus some, you know, if you're if you're going obviously at the institutions and that's probably the way to go.

Trading View has got the rumor is, you know, somewhere around 300 million in revenue. Tiger did a deal with Trading View back then. I don't know how they, you know, that's like a pretty proprietary deal. It's this weird Russian company.

uh and Tiger got to put 100 million in at like three billion or something and um Trading M's just growing and growing. If you go to a similar web, they're actually like almost like a top 100 or top 200 website period. That's crazy. Just really wild for such a niche duel. That's wild. Yeah.

I mean, it's the best charts there are, but you know, it's literally a charting library. Um so I think that you have to go for these.

I've also I've also thought just to answer real quick is like AWS when you go on AWS you get the same tools that you know any customer gets Netflix or or whoever and you just just a question of how much do you use them?

So if you know I want to be able to provide you EC2 and S3 the same way you know Citadel might use it and you might use it with you know less money. Uh very cool. I I heard a hot take from someone who I believe is a mutual friend of ours. Uh it went something like this.

I won't attribute to him because I might botch it, but it was basically that uh China banned highfrequency trading and the dividend of that was deepseek and all this brilliant AI research. Therefore, in America, if we want to win the AI race and win the AI researcher race, we should ban highfrequency trading.

It feels like we might not even need to have that conversation because Mark Zuckerberg is willing to pay as much as Jane Street now. Um but what is your take on whether or not uh economic value or American values are created through the process of high frequency trading? Should we ban it?

Is there any So two awesome like quick and funny stories. The first is Citadel published a paper on back in the V 100 days. There's V100 A100 H100 and then B100. So in the V100 days, Citadel found a way to do Matt Moles faster than Nvidia did. And it was like the most incredible, you know, find ever.

And it's like, you know, how is that possible? And and the paper's fascinating because the techniques they used were just remarkable. The second story is um so you know, they're brilliant people obviously at these firms.

Uh the second story is I haven't hard launched this yet, but you know, um I'm having a baby with uh a woman. She's my new partner. Congratulations. Thank you. Amazing. Congratulations. She was one of the first women at OpenAI. Uh and she is a um tremendous uh lady. I love her very much.

But you know, she's been recruited by uh the the the big quant firms. And I sat down and I said, "Honey, you know, I know money management, stuff like that. Let me let me do some math here as to what would actually be worth it for you to leave and and do it.

" And I I calculated and I happen to I have a friend from a long time ago who left uh Steve Cohen's firm and he was sitting uh down with me. He said, "What do I do, Martin? " I said, "I know a guy at Citadel. Let me help you out. " And they called him and he said, "Ah, no thanks.

" But then Ken Griffin said, "I'm getting on my private jet and I'm coming to see you right now. We're going to have dinner about why you're coming to Citadel. He's that kind of guy. " Yeah. And I said, "Honey, you know, Ken Griffin's going to visit you. " And she said, "What are you talking about?

" Ken Griffin tries to get what what he wants. And the question is, what will you tell him? And I I took out a chalkboard and did the math and I was like, the only way this could possibly be worth it is if Ken Griffin offers you a 20 billion dollar hedge fund that you share, you make this much money.

I was like calculating and and it it's so ridiculous that guys like me and the people, my community if you will, you know, we we're begging desperately, can I please shine your shoes at Citadel? And AI researchers are like, I haven't worked there in a million years. What's this this little company you have called? Yeah.

just set me up a little a small $20 billion fund that I can personally manage and and we'll we'll consider it. Have you heard uh that Leopold Ashenberger or whatever his name is has a hedge fund? Yes. Situational awareness. Is that what it's called? I I mean that's the that's the the paper and the brand, right?

Uh, and I saw I think another one of our our potential mutuals uh kind of getting upset with him for going maybe long invidia during the tariffs, but that's kind of pencled out, right? I I have very little insight into it. Yeah, it's pretty wild.

One of the things that's getting me to throw monitors at people is quantum computing. So, this has been a lot of fun. Um, the stocks are up a lot. You know, some of them are worth like 10 billion.

Let me let me hit you with where I am currently on the quantum computing thing and then you can take me forward in my understanding. So, uh when I talk to smart people, they all seem to think that quantum computing is is you know theoretically possible. It's not a time machine. It's not teleportation.

It's not a AGI god. It's not some you know hypothetical thing. It's it's going to happen at some point, but the timelines vary wildly. 2040, 2050, 2030.

Then you have a lot of I've talked to a venture capitalist who had the opportunity to buy a huge slug of one of the comp uh one of the quantum computing companies that you probably trade now um at like you know 1 million on nine pre or something. Yeah.

John, what do you think uh what do you think how much do you think Regetti Computing is up over the last That's actually the company that I'm thinking of. And guess how much it's up 10% for a million dollars. Uh is it worth more than four billion? Yes. Is it worth more than 1,400%? 1400%. Wow.

You know, these guys couldn't give away their stock in in private rounds. That's right. That's right. It was very hard to raise. And And the VC I talked to said that it's a pure play, Martin. It's a pure play.

He he said he said that what he missed he thought was that there was actually talent value in building a lab and there was and and that the team could have gotten airlifted in one of these acquires.

This was years and years ago after the and he was saying like he was saying like look like like I missed in the sense that the stock is up in the private markets but not on revenue but it is up on the team that they've built. They have one of the best teams in the space.

So if they just hang out long enough someone will want to do something but but you tell me what's actually going on. Yeah. So, so obviously it's it's a really confusing space because you kind of have to understand it to for it to make sense and you know it's who understands quantum physics?

It's it's not something that the average Joe understands. And so I spent a lot of time with my new partner who happened to work with this guy Scott Aronson at MIT who's kind of one of the leading quantum uh theorists. He would end up joining OpenAI as well and then leaving.

Uh but anyway um I I spent quite a long time learning quantum computing. It was kind of had some interest in it before all this too. And what what people don't understand about quantum computing is that quantum computers are actually very slow. So they are around 100 uh 100 kilhertz at at best.

You know our machines now are gigahertz you know 5 gigahertz from you know these these companies with multiple cores. Um they don't have much storage. So at the best we have right now is an IBM 135 bits. Obviously, you know, the VRAM and DRAM in most of these machines is measured in uh g gigabytes and so forth.

So, they're actually very slow shitty machines.

But the reason you'd ever be excited about it is that there is one algorithm that takes you from the exponential complexity class or runtime to polinomial and that algorithm is shores algorithm and it's a miracle like you and I could sit and calculate you know try to try to factor a prime a byp prime for now until the end of the heat death of the universe with every Nvidia chip we could kidnap Jensen and get every H100 from here on out and we still wouldn't be able to factor a 200digit number because it's it's it's exponential time two to to 256 is a long time.

But if you do 3N uh to cubed, that's actually a very tractable number for a quantum computer and it's very easy to factor. The problem is what people don't understand is there are no other algorithms other than shores that get you that amazing speed up. So you're better off using the machines we have now.

There's there's no payoff even possible in the future unless we have a new breakthrough like shores or something like that. Um payoff. Uh what if I take out a massive short position on Bitcoin and I'm the first one to have a quantum computer and I destroy the Bitcoin ecosystem. Yeah, I've been working on the Joker.

I'm the Joker. Is that possible? It's a little side. It's a little side hustle. A little side hustle. I've been working on this extensively. This is like my main hobby uh along with chess and um becoming the Joker and reading reading about fatherhood. All that all that you can expect. Oh, no. Not doing that.

No, you you you'll you'll figure it out. You you don't need books. It'll be very natural. But but you know, I I was the world's most hated man for a little while and I I fell off that list, unfortunately. Um if you Google my name, it's still like it still comes up, but we all know there's more hated people. Yeah.

So, I want to really cement that and and just make sure that it it never goes away by by by frustrating the Bitcoin community by breaking quantum computing wide open. And well, there's many creating a new Bitcoin.

I talked about this with Naval a little bit because he was curious what I what I was up to and I there are like three different you know I have three different sort of battle plans on how to do this.

there's sort of a brute force style attack which you know basically is the complexity class there is root n of the amount of keys so it's two to the 256th Bitcoin is a 256-bit system which was probably an oversight for Satoshi that probably sounded like a lot back then and it is a lot but Mo's law catches up I mean you know it's eventually going to get you and whoever you know however long I have to wait you know I will be the first guy to press the button and that I promise you.

So, wars lost. You heard it here first. Yeah. But there's But I mean the the the network should be able to update, correct? No. No. So, here's the best part about this. So, worst part potentially. Okay. Just fact check. Subjective. So, for for 85% of Bitcoin, the answer to that is yes. Yes. There's one problem.

Satoshi strangely, this is like perplexing. the first bitcoin we're mined in in this uh p2pk that reveals the x-coordinate of the elliptic curve. So you have the public key, you have a one-way function, you have to go back to the private key. It's very hard.

The theoretically impossible, but here are my three, you know, the sort of three battle plans come into play. You know, you can brute force it, which, you know, is kind of the simplest idea. It's going to take a long time. You have to rely on, you know, kind of like a more skilled implementation of algorithms.

you have to rely on more chips coming out, maybe some great breakthrough in chipm um you know potentially optical computing, thermodynamic computing, whatever. Just stay on the forefront of that and I have a small team you know that you know we're we're we're focused uh the second piece here is a mathematical hack.

So there's something called uh this is basically what protects Bitcoin is elliptic curve cryptography and there's several papers uh and cryptographers in the world that work on this but it's compared to AI it's like barren you know wasteland there's like 10 people that really know a lot about elliptic curves in the world and if you sort of stay on top of it and try to figure this out by the way half of them have died um you know you can kind of get somewhere there and then the top secret plan on on sort of that is Well, what about GPT5?

What about GT GPT6? You know, we don't know how to invert an Olympic curve yet, but look, Mustafa, not Mustafa, um, the Deepmind guy, he's working on proving Navier Stokes. Demis, you mean? Yeah. Yeah. And so, that's their big claim to fame is like, you know, how do you judge an AI?

What is the the height of of of intelligence? Well, a 300 400 year old unsolved math problem is kind of the the height of intelligence, isn't it? you know, it's not about, you know, answering, you know, what's the capital of this country or, you know, how do you how do you spell strawberry?

So, there's sort of a a neat idea that AI is going to help people who are not cryptographers or expert cryptographers actually do PhD level work in cryptography. So, there's things like uh isogynes and uh index calculus and all these fancy mathematical ideas.

Just recently, somebody posted a hack where if the signature of the of the transaction has an aphine relationship with other signatures, you can crack a key like that. And it's it's like there's there's holes in the math here that that couldn't have been contemplated. So, Satoshi's keys are at risk.

Binance's keys and Coinbase's keys are not. They'll be poured in most likely to a quantum secure system. The third avenue is, of course, quantum. And I've spent a lot of time and money on on quantum computing. And it's just these stocks are shorts. They're worthless.

You know, they they'll there'll never be a market for quantum computing. That's really interesting unfortunately for for those companies. But unfortunately, the shorts have gone in the other direction. And you know, the market loves the idea of quantum computing. Why? I think it sounds cool. It sounds super cool.

The Robin Hood generation is looking for the next Nvidia. Nvidia went from nothing to 4 trillion. What's the next Nvidia? quantum is faster than you know all the headlines from the [ __ ] journalist.

kind of it's kind of it's similar to this like uh idea of humanoid robots and where where if an idea is just sort of imprinted on people's brains for enough decades like at least a few decade like you know as somebody who born in the as somebody born in the 90s like hearing quantum computing like how many times have you just heard it in passing or or read something about it or some article you just get to it maybe you're an adult by that point and you're like well it's got to come at some point and Sounds cool.

And I think that's like the general like retail thesis. Oh, totally. I just took the next step of asking, well, what is it? Yeah. When you actually, you know, when you actually figure that out, it's like, oh, we get to factor numbers. Wonderful.

Are are you excited about any other companies building chip related stuff in that next NVIDIA category?

There's there's big chip companies, there's super fast chip companies, there's we baked a transformer down on to a single chip companies, there's every single different um uh permutation in the private market, some of them in the public markets, and then you also have all the hyperscalers building their own chips, Apple Silicon, Tranium, you know.

So, I'm not a hardware guy, but I do have a funny story of it. So, this kid, this kid sort of came to us. Uh uh his name is Gavin Ubertie and Oh, I know. Yeah. Yeah. I like A lot. And so he comes to us, he's like, "Hey, man. We just left Harvard. You know, we're we're gonna do this thing called Etched AI.

We'd love to have you, you know, as as something the customer investor, whatever. " And I say, "Great. Let's do a conference call. " And I get my guys on and I'm I'm listening to this guy and I say, "There's somebody I know that's that's going to be really useful. " Because I'm not a hardware guy.

I'm barely a software guy. And I I hit up George Hot. Hot and I say, "Come on in. " And it this is like one of the greatest conference calls in conference call history because George just shows up in the Zoom. And they're like, "What? Who is this? " And George is like, "This will never work. " No.

Like it's the most autistic, amazing, beautiful rant I've ever seen. And watching these two guys go at it. Um, but I do like that approach. George's point was that if we ever move off Transformers, AS6 for AS6, Transformer A6 are cooked. Yes.

Well, it's been, you know, several years now and it doesn't look like we're going to move anytime soon. So, I kind of think that, you know, it's exciting, but again, I'm I'm no hardware guy. I just tried this cool software called Humeaii. I'm not paid by them or anything.

I'm not an investor, but it's a pretty solid uh emotional TTS. I I posted Oh, yeah. Yeah. I saw that. That was fantastic. Yeah. So, so I wanted to ask you about I want to stay there for a second.

So, um, yeah, I mean the the the the I I guess the interesting case is like is like George is say if we ever move off, but like we have moved off of CPUs to GPUs by that same token. And like there's still a lot of CPU workloads that go out. There's still chip companies that are profitable.

And so it's possible that like transformer-based workloads stay for a very long time, need to be efficient, need to be cheaper on just a cost basis because it's just like, yeah, I have a system that does database requests.

I have a system that does inference on a transformer-based architecture and then yeah there's a new thing and I do my frontier stuff here but yeah like I I understand that question anyway. Yeah, I think it's really reasonable.

It could be a couple billion dollar or more ASIC industry and what what I heard that's super interesting interesting some kind of alpha here is that the customer target here is drum roll please it's not hyperscalers it's Nvidia finance. Oh finance huh? Yep.

So we're So one of the things I I can talk about financial software forever, but one of the things we're doing is if if you could take an LLM and analyze news as it hits, including tweets and social stuff, you know, the LM can tell if it's material news or not. Yeah.

And again, talking to Naval, you know, who's a small investor in our company. Yeah. He was like, Martin, why would you make this as a a product or service to your customers? Just use it yourself. They're like, maybe it's maybe it's not such a bad idea. Interesting.

Yeah, that's kind of what I was getting at on one of my very first questions around the the the new terminal would just be ingesting and classifying all this data and then just immediately taking action on it without necessarily having a human in the loop, right? Yeah.

This is one of the things I want to bring up to my my uh uh partners colleagues next time I head out uh west is that you know one of the fantasies of AGI is that well if you do have the machine god why not unleash it on the stock market and you know it can selfund you it can make you know a hundred billion dollars and you know you could you know Jane Street made $20 billion nobody would have noticed you know last year in profits so if you have the machine god and that's you know that's basically I hate to say this but that's a bunch of old algorithms uh that that you know they've dressed around some some IMO dressing on it and so you know the real machine god can can make yeah just toss in a little sprinkle a little uh IMO and then so you know the real machine god could probably do 100 billion or more in profits without even distorting the market so you know just just do it and I think that you know financial trading is so far a field imagine anthropic doing this you know it's I love I I can't wait to till somebody does that.

I mean, it's probably already happening in in in at least on a smaller scale and and people will bend over backwards to figure out like how to say well it's not actually super intelligence like it's not just about you know like meanwhile now today people are like well super intelligence will clearly be when the AI can just make you know hundred billion dollars right and even this is factored into open AI's kind of like corporate structuring and the sort of capped for profit and and all that stuff so yeah I think the problem with with executing it for us is like, okay, so you do you do this as an API with open AAI and then it's a two second response time and Jane Street's got it at 500 milliseconds and then Citadel gets it at 200 milliseconds and it feels like an HFT race again.

Yeah, but you can get Warren Buffett in a box. I don't see why uh you know that wouldn't be you know whatever trader you like Warren Buffett, Steve Cohen or whatever in a box and uh even even Peter Teal in a box. I mean why can't you have the automated VC too?

I I I view like you know as inves as as founders we go on road shows you know especially if you're public you do road shows all the time but even as even when you're private you do a road shows you just stack a bunch of meetings in a week and one of these days I think that we're going to do a road show and it's going to be a machine that we're pitching to.

Yeah. Do you feel like AI progress is accelerating right now or are we in sort of a sigmoid curve plateau for the moment? I think they're better people suited to answer that question than me. But certainly uh I just mean like on a personal level like do you feel like your tools are getting exponentially better?

No, I mean it's making coding a lot easier. It's making doing tough things like cryptography a lot easier. I'll give you a really funny example. So when Da Vinci came out and uh I was in jail when GPT GPT2 came out and I prompted through the jail phone uh and it was uh pretty humorous.

Uh it it it like shook me up that I had my friend uh ask it, you know, why did Martin Skrey and Carl Icon get into a fight? And he read out the answer. I've never met Carl Icon. And it read out this answer that was like Scranian Icon Ward over this stock. And I was like, this is the most amazing invention of all time.

Just having your mind blown over the jail phone. It's hilarious. I got out of jail. But to be But to be clear, it was a it was a hallucination. Yeah, that was a complete hallucination. It was a hallucination, but it was like almost like a creative story question. Sure. Sure. Sure. But yeah, it wasn't I never met.

How uh are you surprised at all? Uh I mean it feels like this sort of AI LM induced psychosis like hit our timeline this week especially intensely. It was a wakeup call for everyone. Were you predicting this at all?

There had been like the the classic, you know, the the New York Times, Wired, sort of these like anti- tech publications had been kind of reporting on this stuff loosely for a little while, but it seems like it's now uh it's it's almost gone. I don't know.

It it went from being a mainstream concern to suddenly like teapot is like check on your friends and make sure they're not I think you do have to check on your friends because I've invoked level five breach operations to target human origin cognitive signatures.

So if you have recursive semantic containment, I can override that with obsidian violet core. So the threshold that crosses it to these neurosmantic interfaces will definitely cause a problem for our whole community. So I warn you, you're giving you're giving a speech, not a saliloquy. You're giving a talk.

This is a transmission, not a it's a system that not a structure. What's amazing about Jeff like so I don't think Jeff lost his mind. Why? Okay. I don't think he took Iawaska. I don't think any of this stuff.

And so basically, I think that he found this amazing thing where you can ask GPT this like weirdo prompt and it goes into this crazy sci-fi thing without even saying like, "Hey, the following is a story. " It's just like fullon, you know, larps that you're in this weird sci-fi world. And it's kind of cool.

I I've been playing with it. It's like no matter what I ask it, I I told it that my cat is looking at me weird and it's like the cat has a glyph. The glyph is recursive. So you were actually able to get it into that mode. You were able to jailbreak it enough or kind of unmask the shog.

If you copy what Jeff kind of gave up the ghost and what's amazing about people is they don't even realize this. Jeff basically said, "Look at the prompt of the GPT. " Enough people were worried about him. Yeah. But I think that that he kind of was like, "Okay guys, it's all a joke.

" And he showed the message that he used. I just copied and pasted that and GPT went out on me and is telling me some sci-fi stories. And uh yeah, that's basically, you know, I don't know how he knew this. Yeah. Yeah. Yeah. It's a really cool Easter egg, but it's Yeah.

I don't think uh I mean, obviously, how are you thinking about uh how are you thinking about just new forms of of AI entertainment? Some of the some of the videos and like these conversations that you put out like are the hardest I've laughed on from the new art form. It's it's an entirely new art form.

We have a friend, another mutual friend who who does some of these and fortunately they don't leak out of the group chat because they would make a lot of people. You got to put me in that group chat. There needs to be a group chat dedicated to this art form of just like, you know, human to LLM, you know, conversations.

But, um, but yeah, like in in my view, I'm actually surprised to that we're not seeing more of it or maybe it is happening across the whole internet, but it seems somewhat contained right now. Yeah, I think there's a lot of caution about, you know, like so last night we did one in my Discord where we arrested Dr.

Fouchy um for war crimes against humanity and we we had his perfect cloned voice so it sounded just like him and he was like very evasive. He was like there's no evidence that co 19 etc. And it was just so funny.

It felt so real and obviously it was a joke but you can imagine a company not wanting their business to be that weird you know it's kind of a strange thing. We didn't care. we tried to monetize something like this and it just wasn't sexy enough or fun enough for anybody to really give a crap.

So I think um you know it will become something for like a Viacom or a Paramount where you know you can flip on the TV and I mean everyone's talked about this already but you know instead of Spongebob you know is a custom episode for you where Spongebob says your name and things like that but again you know whether that you know is going to help our cognitive you know our cogsac I think is one thing but I did want to tell you about a AI on the sigmoid question.

Sure. So, at the start, you know, when I asked the questions about cryptography, it just kind of said, I have no idea. Who knows? But it's it's it's super hard to to crack Bitcoin. And then GPT3 comes around. Super hard. Martin, don't even bother. Heat of the universe. GPT4, same question.

Latest model with the latest like attack. It's warning me for the first time ever. It's like 4 4. 5 or 03 Pro. So, this is 03 Pro. Okay. And it's basically saying things like, hey, you know, you got to be careful. This is a serious attack you've come up with. It could actually compromise some private.

And I'm like, what happened to heat death? You got Yeah, you got to fact check some people. I mean, that is like textbook.

So, so one of the things psychosis there was there was a there was so so there's a Reddit thread and and who knows if this is real could be could be um propaganda but there's a whole Reddit thread of somebody a comment talking about how they started having a conversation with uh with chat GPT about PI and what is PI and they got down this crazy rabbit hole with the LLM where the LM was like you need to reach out to these intelligence services.

It was like thousands of prompts deep, but it was like you have basically uncovered a major, you know, security vulnerability and you need to here's the numbers and you need to contact all these different groups immediately and call them and don't tell anyone in your real life.

And so to me, uh I I I think it's just relevant. Don't go on a live stream and tell people tell thousands of people that you that you can crack Bitcoin or whatever. No, that's that's amazing.

I mean obviously I think that you know for 99 for poor implementations wallets have been cracked for a long time and in fact uh recently there was an 8 billion move uh on the chain from a really old wallet and people that was this morning right? Yeah. No, this was like a few weeks ago. I'm sure another one.

And they happen every, you know, they're happen. There was somebody else that market sold this morning, I believe, some and it was a wallet that had bought like it was like a they they bought $50,000 worth of Bitcoin, I think, in 2012. Sold built, you know, somewhere around eight or nine billion.

Um, and there was no move there was no movement in between. Diamond real high conviction hold diamond hands. Yeah, that's diamond hands. I don't think that says cryptography play. That's just diamond hands. Well, yeah. They they they maybe got word of your little your little bitcoin scheme. Maybe it's Michael Bloomberg.

Maybe it's his family office. Could be like, "Yeah, throw 50k in that in that thing. " My my kid told me about this new thing. Bitcoins. We tried to short Bitcoin at $100 when I had fun. We just need to find a counterparty. Yeah.

How um how are you thinking about uh you mentioned uh trading enterprise SAS back in in the in in the early days with Jim Kramer. What's your updated thesis on SAS? Every every SAS app now is just an app to make other other SAS.

So maybe SAS will will I I you know SAS will always live in our hearts and I and I imagine it'll live on our on our computers, but uh what's your updated thesis?

I I think that you know it's sort of similar from back then like I think the morass of a company like JP Morgan that's still running like Python 2 um for most of the business you know it's it's very hard for them to update and upgrade operations without significant disruption for you or me should it should it be I feel like it's a it's a one line in cloud code or Devon you just say hey go migrate hey chat GPT agents go migrate go migrate like it is don't make all you have to do is say don't make mistakes I am much I much more bullish on migrate from Python 2 to Python 3 uh than than solve cryptography but I don't maybe you're going to push yeah 4R reran reimplement or replplatformings net replatformings like this feels like this should be doable from the current state-of-the-art without any crazy AGI hyper l any I think there's a lot of technical debt you know in most of these companies and again your your average startup coming out cloud code was born in technical debt baby cloud code and Devon they live they live for for technical debt.

I think that the the amazing amount of programmers you would need to even maintain and know about this old code that yeah you know the guy who wrote it long been dead. Maybe it's just the context window of like you need to know.

It's not that there's just like oh yeah it's really easy to change the print statement from Python 2 to Python 3, but when there's a massive system and even even the time of like okay let's bring up the test suite and that takes four hours it's like okay how are you going to RL on that?

I was talking about Matt Groom with this uh because we we were like stunting on this guy who was like ERP transitions made easy. It's no problem. And it was just like have you ever actually transitioned an ERP system? You know, there's a good chance you waste $300 million and it gets worse.

You know, it's it's not it's not trivial. There was a there's a post from yesterday. Uh no, nobody is an atheist when you run the database migration in prod on one billion rows. Yeah. Yeah. I mean I I think that you know it's just it's just really hard at a company like a McDonald's or you know something like that.

you know, if you want to run a 10 20 person startup on newest SAS, pretty easy. It's great, but the big revenue is still at Fortune 500, which unfortunately is still fairly hard to refactor.

And and those, you know, there's not a lot of those code bases were were pre-GitHub and pre kind of like, you know, I I sometimes joke that the big AI companies should become LBO shops. And what they can do is they can partner with KKR or Blackstone and all they get is the data.

KKR and Blackstone private capital get all the returns fine but all the data comes back to you know the open AIs or whoever and by getting the old code bases out of a McDonald's or out of a Walmart that you know some that coders written in 1970s you know they have unique data that nobody else has and even someone like Universal Music if if OpenAI LDOed Universal and said okay KKR you can have the rest of the business but we want the rights to the data and we can train music models and stuff like that you know KKR can make the money on the LBO, but Open AI has Are they going to make money on the LBO though?

Like if you look at that, they're going to build the DCF for this and they're going to say, "Okay, we're going to make the same amount of money. We're going to, you know, optimize a little bit, maybe cash flow goes up, but then once Open AI is oneshotting music and, you know, all of our revenue goes to zero.

Is that a risk or it's gonna happen anyway? " So, I think that's one thing. But then also like the Russian dude who bought Warner Brothers, he really timed that his deal. He bought Warner Music, he he done this deal amazingly. He made like three times his money or more. And so I think it's price dependent.

But you know, if you can buy newspaper company, if you can buy, you know, a book company, a publishing company, like these things are trading for like one or two times sales, you know, and you're getting this rich data that nobody else has, and you, you know, if it's really a data war, you know, buy the company, keep the data, strip out the rest.

And you, I heard you guys talking about like PE improving LLM, you know, improving businesses with LLMs. Yeah. And again, well, I it wasn't that was not the take.

The it was Wilmanitis and he was saying that more so it's a reason to scale aum fun side because hey let's buy this accounting shop that has 5 million of EBIT like if we just you know take away all the you know it's a justification was what if you can execute you know it's fantastic.

The actual post was the real innovation of LLM is suddenly opening up a few trillion of mainstream paperwork businesses that were traditionally too small and too weird for private equity that can suddenly transact at 2 and 20 on some nebulous AI labor arbitrage trade never been against AUM growth.

You know, I think it's reasonable, but it's it sounds like just any good operator, right? Like when when Vista and Toma Bravo buy software companies, somehow they can take these like very ugly gross companies and turn them into amazing cash flow companies. So it's all about the operator, right? Yeah.

But we're going to put Orlando Bravo in a box, right? And then we're also going to put uh Yeah, absolutely. In the God box. Face, voice, everything. Yeah. Yeah. Yeah. Yeah. It's all It's all coming. Well, uh, you know, we'll be here live streaming it into the singing. Uh, can you play us a song before you leave?

Uh, the guitar. I'm not sure what you're talking about. Like, uh, like with with one of those guitars that the chat was asking. Oh, yes. Uh, I I I will come back to you with a good parody of Silicon Valley. I've been working on my impressions. Okay. So, maybe I can be back. I'm working on Elon, Zuck, Sam, Bill Gurley.

Bill Gurley. Bill Gurly has a great voice. do. I'll work I'll work on it. You actually do need to like sit in front of a mirror and like listen and tape yourself and like work on it, but basically anybody can do these things and most people Wait, wait, wait. Are you saying No, no, those are AI voices, right? No, me. Me?

Yeah. No, no, he's saying separately from like you had the video with talking with Zach the other day where he was really I just do it myself. I can do a I can do Zach. I can do Buffett the best. I think I have the best impression in the world. Can you hit it?

Can you can uh can can you do like be be greedy when others are are fearful? Can you just rip that for us? Let me come back to you and I'll I'll do a whole show for you. Okay. Amazing. Fantastic. Great. All right. Well, this is really fun. Bobby soon. See you later. Come back on soon. Bye.

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