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Tuesday · 6 min read · Lightly edited by a human who definitely didn't listen at 2.5x speed (lie)

Good morning, capo. Wall Street has decided it likes AI again, and this time it wants to own the equity. SpaceX filed for the biggest IPO in history, OpenAI filed right behind it, and four investors got on stage at the All-In conference to pitch live trades like it was 1999 with better lighting. So this week we follow the money instead of the models: the fund math nobody says out loud, a casino stock that is somehow a triple, and the one calculation Elon uses to decide what to build. Let's go count someone else's money.

All-In — "Bill Maris: How Google Could Crush AI Competitors, Why Small Funds Win, and AI's Atari Stage" (listen)

1h+ → 90 seconds

Bill Maris started Google Ventures, so when he explains how the venture business actually works, it lands differently than the usual LinkedIn philosophy. His first truth is one most VCs spend careers hiding: "Small funds outperform large funds. This is simply the math. This is not an opinion I'm trying to convince you of." The giant funds you have heard of are optimized to collect fees, not to win. He says the part out loud: "A $5 billion venture fund that returns 1.01x gets to say they are in the 75th percentile and can raise their next fund, and no one at the Stanford endowment is going to get in trouble for writing that check." The whole industry, in one sentence: nobody gets fired for backing the safe, enormous, mediocre thing.

Then the question that should keep every AI founder awake: "If I were Google and I decide to arbitrarily cut the cost of tokens to 80%, what happens to the business models of OpenAI and Anthropic at that point?" The scariest competitor is not another lab. It is the company that can afford to make the whole product free.

On where we actually are with AI, he is bullish but unromantic: "We're not quite at the Atari command line stage. We're going to get to the PlayStation 10 stage in the next five years." In other words, what feels like magic today is the blocky 8-bit version of what is coming.

Takeaway for operators: Maris's sharpest line is a character test, not a market call: "Don't say you're doing this for the benefit of humanity and do the other thing." The fastest way to read a founder, or yourself, is to check whether the mission statement survives contact with the cap table.

All-In — "Best Ideas Pitch Competition: 4 Investors Present Their Top Trades Live" (listen)

1h+ → trades you can actually look up

Four investors, one stage, real money on the line. The most useful forty minutes of the week, because nobody was selling a worldview, they were selling a position they had to defend.

The reframe that reorganizes how you see the whole AI boom came from the power pitch: "In a traditional refinery you put crude oil in and refine it into gasoline. With a data center, you put electricity in, and out the other end, instead of gasoline, comes photons or tokens or intelligence. It's the same thing." A data center is an oil refinery for electricity. And the corollary is the actual trade: "We do not need AI demand to keep the power markets incredibly tight for the next 20 years. AI demand just turbocharges it." You do not have to believe the AI hype to be long electricity. You just have to believe people keep wanting it.

The proof that the power thesis is already live: "Microsoft convinced Constellation Energy to restart the Three Mile Island nuclear reactor. The one that melted down and gave nuclear a bad name for 30 years." When software's most valuable company is personally rebooting a famous nuclear disaster site to find electrons, the bottleneck is no longer a metaphor.

And the line that belongs on a sampler, on whether to ever buy a science-project stock: "Generally speaking, investing in biotech companies is a horrible idea, sandwiched somewhere between movies, wineries, and SPACs."

Takeaway for operators: one pitcher's defense of a contrarian winner is the whole game in miniature. "I was laughed out of the room. David Einhorn, a friend of mine, said, I know trillion-dollar companies, this is not one. Wrong." Being early and being wrong look identical right up until they don't. Write down your thesis so you can tell which one you were.

My First Million — "The One Calculation Elon Runs Everything On" (listen)

1h+ → one mental model and a vibe

Forget the rockets for a second. The MFM guys broke down the single mental model underneath every Musk company, and it is almost insultingly simple. He calls it the idiot index: take the finished price of a part, divide it by the cost of its raw materials on the commodities exchange. A high ratio means someone in the supply chain is being an idiot, and that gap is your opportunity. SpaceX exists because Elon ran the idiot index on rockets and found the raw metal cost a tiny fraction of the sticker price. The whole empire is one division problem applied with unusual nerve.

The philosophy underneath it is just as blunt. On why he obsesses over the unglamorous parts: "You can't hide your sins in the hamburger." Cheap ingredients show up in the final bite, every time, no matter the marketing. And on the trap of optimizing for the wrong scoreboard: "If you want to be rich and famous, try getting rich first and just see if that does the trick."

The throughline with everything else this week is that the people who win the money game are usually running a simpler calculation than the people losing it. The idiot index is not a growth hack. It is a refusal to be impressed by complexity, which, conveniently, is also Maris's entire personality.

Invest Like the Best — Why the AI Boom Is Just Getting Started (listen): The bull case, stated without apology: "The enterprise AI market is less than 1% penetrated. We talk about S-curves. We call this an L-curve. Just straight up." His record is the argument: "When we bought Nvidia in 2023, we were paying four times earnings. When we bought Amazon for AWS, we were getting it for free." And the coding math that makes a trillion-dollar market sound conservative: "20 million coders, spending $20 to $30,000 a year on tokens. That's a half-trillion-dollar market from coding alone." Whether or not he's right, this is the cleanest version of the not-a-bubble case you'll hear.

20VC — SpaceX Launches Largest Ever IPO, OpenAI Files (listen): On the man behind the biggest offering in history: "One thing we know about Elon for 30 years is that when he hears the words 'more risk,' he says, yes please, I'll have two." The panel's sober call: "I think the IPO nominally will be a dud. I don't think it will trade up dramatically." And the single best explanation of every market panic ever recorded: "There's always money when people aren't afraid. When things get scary, it's not that money runs out. It's that money gets scared."

Odd Lots — How CoreWeave Sees the Market for Compute (listen): The compute landlord names the real bottleneck, and it isn't chips: "We can't just make new electricians. That's a trade you can't scale efficiently. That is absolutely the bottleneck." And why renting GPUs is harder than it looks, which is also why it's a business: "There's an enormous gap between signing for power delivery in 2030 and actually delivering it into billable GPU hours. That gap of execution is what drove our cost of capital down so aggressively." The boom runs on electricians and patience, not vibes.

What the smart money actually spent its breath on this week:

For two issues we measured the AI boom by what it spends. This week we measured it by what it's worth, or at least what people will pay for a piece. The bankers are back, the VCs are pitching trades on stage, and the most repeated idea across six shows was not a model or a chip. It was electricity. We remain, as ever, long the refinery and short anyone doing it for the benefit of humanity.

If you only listen to one episode this week, make it the All-In pitch competition. It is four smart people forced to defend real positions out loud, which is rarer and more useful than a hundred think-pieces, and you will come away with at least two tickers to go argue about.

If you only have 20 minutes, Bill Maris on the same feed. A man who built Google Ventures explaining, calmly, why most of the venture industry is a fee machine wearing a mission statement. Bracing.

No David Senra sighting this week. Per our new policy we are not speculating, merely noting the absence, the way you'd note that a cryptid has not been photographed lately. He is out there. He is reading something enormous. We will know when he wants us to.

Forward this to a friend who keeps saying it's all a bubble. Maybe it is. The refinery still prints. We're a newsletter, not a guilt trip. (Okay, a little guilt trip.)

— The Capo 🎙️🤌

Made with coffee, too many podcast apps, and the firm belief that nobody has time to listen to 15 hours of content per week. That's our job now.