Is China Distilling Claude, ChatGPT Breaks Containment, and Retail Markets

[00:00:04]How are y'all feeling? How are you all living? By the way, look at this. I just lost my feed. I may remember this. What happened to all the people who bought them at $600 to $1,000 from scalpers? I don't understand why nothing can stay like relevant in culture. The swatch. I really thought the swatch thing was going to break containment. What is it?

[00:00:23]What do they sell for right now? Wow.

[00:00:25]$600 in the cheapest one, but I've not seen one swatch in the wild. Not even on a dog, not even on a purse, not even hanging out of a car. I have not seen a single one of these on any I have not seen one in real life. It lasted for I mean the hype on Twitter lasted for one day. Even I, a pseudo connoisseur of culture, thought to myself that these were going to last a long time. I thought this was going to be a thing for like at least six months. I thought people were going to be flexing these in the club. Maybe AP Swatch. It did. It didn't even last a week. Nothing sticks.

[00:00:59]That's crazy. It lasted It lasted three days. I'm actually shocked by that. We have a lot of market stuff to cover. We have a lot of market stuff to get into.

[00:01:06]I got some intro stuff I want to cover.

[00:01:08]Some cultural stuff I want to cover.

[00:01:09]Some sell and made charts I want to look at. And on that note, let us get into some intro stuff. I met Jason Yanowitz yesterday by this is why I was up late.

[00:01:18]I wasn't sure he was going to post this.

[00:01:20]I met Jason Yanowitz um from Blockworks yesterday. Guy's a [ __ ] chat for the record. And I don't know if you watch his Pod Empire. Pod really good podcast.

[00:01:29]They they had a clip about us recently.

[00:01:30]They had a clip about our stream recently by the way about the pit about [snorts] how we're tapped into the culture and we like know what's going on and we're locked in on it. Um the third guy is Malcolm. Who's the third guy? The third guy is Malcolm. My co-founder.

[00:01:40]Co-founder and roommate by the way. My goat. The kid's my [ __ ] my actual goat. My truth. But I got dinner with him last night. I was up hella late. And man, it feels like the sharp people that have been here for a long time feel pretty good about crypto. They do.

[00:01:54]Here's where we're at with new Trump announcement. Let me read it. From this point forward, anytime the Islamic Republic of Iran shoots at a ship in the street of Hormuz, whether it be by missile, rocket, drone, or any other device or weapon, the United States will bomb and destroy one bridge or power plant, including those located next to or in capital city of Tyrron. Thank you for your attention to this matter, President Donald J. Trump. That is a crazy tweet. Jeez, an I really can't believe we're still doing this, but it felt like there was a level of escalation that happened last night. He listed every weapon, by the way. He listed out every weapon he could.

[00:02:33]And there was an announcement last night that Iran proof of work. Are you long oil? No way. Iran says it has struck an Amazon data center in Bahrain in retaliation for US attack on Iran's nucleian nuclear project.

[00:02:50]Iran has also said it targeted a US military base in Jordan claiming to have destroyed an F-15 fighter jet and missile defense radar system. Wait, what is a a 15 fighter jet KD? It's 104 and zero KD on the F-15. So, it just shot like an idle one or is that number one?

[00:03:09]No way that that's number one, right? It shot down an F-15 or Okay, destroyed an F-15 probably in the hanger. um which let Brent crude surge over over 95 and so yeah they've destroyed they destroyed an Amazon data center in Baharrain like an AI data center which is crazy. It warns it will now strike more tech facilities. Uh the RGC said this this will begin a new phase with Iran having previously warned 18 US tech companies including Tesla, Microsoft, Google, Apple, Nvidia and Oracle as legitimate targets. Iran has also previously declared all of Elon Musk's company compan companies as targets, specifically Starlink ground stations and satellites.

[00:03:52]I'll tell you what, man. They start blowing up AI infrastructure and whatever Trump is lagging on is going to stop lagging. That will that in my opinion that will end this thing real quick or that will reach mass escalation real quick. They start. You cannot play with the US's AI infraright. Not right now. Not right now, man. Not right now.

[00:04:17]Not right now. No way. Not now. Not during Kimmy K3. Not during this fear.

[00:04:23]No way is that going to I don't think that that is going to fly very go over very well at all. All right. And good news. I watched this this morning. Fire me the [ __ ] up.

[00:04:31]>> Yo, we just passed a funded account inside of a school bus. Look at this.

[00:04:34]Inside of a bus. Easy. 1.25. Lucy got >> Wait. Suspense.

[00:04:39]>> No, I need to have 1.25. Come on. Are you kidding me, bro?

[00:04:44]>> Yes.

[00:04:45]>> Funded account pass inside of >> the kids are going to be all right, man.

[00:04:49]The kids are going I I don't know if this makes you happy or sad. This makes me so happy. I watch this. It makes me so happy. It also makes me think at some point here in the very near future when these kids I know they're like watching a Call of Duty in the background. These kids are like 12. when they're like 18 are there is going to be bubbles that form in individual assets that nerf and dwarf everything that has ever happened relative to where we are at right now.

[00:05:14]And the the the negative side of it is that we are going to see probably see structural crashes in markets that you did not think were mathematically possible. The other thing this might sound crazy. I spent all of last week thinking about about meme coins. It's the only thing I thought about all of last week was Pump Fun and basically Salana Memecoins and Robin Hood memecoins. The only thing that I can think about right now is new pairs.

[00:05:38]Like, bro, I've been watching I've been watching trenching streams recently.

[00:05:42]This morning I was watching a trenching stream. Last night I was watching a trenching stream. Might sound I don't even know how that sounds coming out of my mouth because I haven't thought about a new pair in like a long time. I've been watch Frank. Who Who is this? I've been watching this guy's stream like for a while. This is what I was watching yesterday. Who is this? No clue. This guy's live every day on Twitch. 500 600.

[00:06:01]There's this subset of basically like trenching Tik Tok. Cry. It's basically like crypto lore Tik Tok that I don't really know exists. There's like this like cult folklore that's getting built on Tik Tok right now and they're not on CT really. 37,000 likes. Malone only got arrested because he refused to give Zack Xp a cut. It's crazy. It's like orbed out, bro. Zack XPTt is watching.

[00:06:28]Malone. Malone is like Icorus. Like Malone talk is insane. Look at this [ __ ] [music] >> It's crazy. They hate Zack. I You know what's You know, you know what is uh Yeah, it's actually nuts. 100k likes.

[00:06:44]>> Kimchi made 40 million on one trade.

[00:06:46]He's a little Asian guy. He like retired off just like one trade.

[00:06:50]>> 100k likes.

[00:06:51]>> And now all he does is like these like trips where they just travel the world like right there. All he does is like 100k likes. 100k likes. One thing that I've learned by doing this all day every day for the last fi four or five years is that this this social fi socialification of trading is never going anywhere. My most confident take is that the celebrities of the 2030s are the best traders. This is my most confident take.

[00:07:17]I've never believed that it take more than this. Stock markets in 15 seconds.

[00:07:21]As always, market open is powered by phantom. It's powered by Phantom because anything you want to trade, stocks, crypto, if you want to go cash, if you want to hold stable coins, if you want to do pers, TOKENIZED STOCKS, WHATEVER IT IS, IF YOU COULD TRADE IT, you could do it WITH PHANTOM. AND THE STOCK MARKET is officially Oh, let's go. Let's go.

[00:07:39]Let's go. It's going to be a pretty big uh a pretty big day today in the market.

[00:07:41]There's been these sneaky rumblings about a memory to crypto rotation as memory stalls out andor goes flat and or goes crypto, Bitcoin specifically, and pump fund have been looking pretty good.

[00:07:53]Is that something that can continue? Is that just a couple weird days of price action? Where exactly are we? We're going to find out. The S&P 500, the S&P opens at 7489, down.27%.

[00:08:05]The Cosby yesterday was very weak by the way, gapped up and then was pretty much down only. Closed up 3/4 of a percent.

[00:08:12]The Russell's down.2 Q's are down.6.

[00:08:16]We have a tweet. What is it? Samsung details featured of its smart glasses as it enters market dominated by meta.

[00:08:23]Everyone is doing smart glasses. I hate this trend. Um the socks is down 1.5% but it's fighting green on the open. Um the sock soul that's down 4.6 4.7%.

[00:08:38]The IGV is down one whole percent and nasty on the open. IGV is so disgusting.

[00:08:44]Um Mags is down 37. They're pretty weak.

[00:08:47]I'm going to imagine Google is dipping right now. We'll look at it in a minute.

[00:08:51]And DM is 5649.

[00:08:53]It is fighting on the open. Um it's down 4% and it's at sort of a keyish level, right? Like this is kind of this area we've been hanging out at for a while.

[00:09:05]Um it kind of feels like Chop City, but lows are 48. Feels like has to get get above 60s before it really is doing anything. I think Gavin Baker, Bill Aman, Dan Lo, the Avengers all came out to call bottom at I don't know what, like 52 and some change. Gold is wild and what's good Sully? Um, let's take a look. Um, VIX is up 1.3 today. Bond yields are up across the board. Um, stretch is 87, copper is 654, and gold is up one. Wow, gold is wilding today.

[00:09:34]First chatter, sorry, are you long?

[00:09:37]This looks pretty [ __ ] good actually.

[00:09:41]Gold um 4141 is up one point. Damn, it's up 1.6% and it looks pretty goddamn good. Silver's up 1.6.

[00:09:51]Um Bitcoin 656.

[00:09:54]It's down 1.3% today. Not great on the open. Let's go five minutes. U pump is 1960.

[00:10:01]Not great as well. All right, semis AI names. Let's get into it. Biggest gainer of the day is Dell. That's up 6.16.

[00:10:08]Cerebras back above 220. It's hitting a god candle right now. That's up 6%. How does high time frame look? Got to look pretty good, right? Yes, it does. Um Frank DGO's entry is marked on the chart at 184. Assuming he's still in from that level is up 21% from the Frank DGO's entry. Frank, are you still in? We're 3 minutes into the open now. Cerebus is really strong. That's a good sign. Um, Rocket Lab secured some contract yesterday, right? Rocket Lab. You see have just no one brown boy smiling.

[00:10:41]Rocket Lab was awarded a $266 million contract by the US Space Force and Department of War to provide suborbital launch services. This deal includes 12 launches with options for six additional missions running through December 2028 and launching from the Pac Pacific Spaceport Complex in Alaska.

[00:11:01]This massive war for military research and hypersonic technology builds on Rocket Lab's recent string of government wins which includes a $90 million Space Force contract to build two geostationary satellites from Rocket Lab. Space Force is nuts. Also, YouTube gang, Twitter gang, everywhere. If you like to chat, twitch.tv/thereadguy.

[00:11:20]Rocket Lab's up 3.37% on the news. It's back at 7142. Netflix first green candle maybe in the last month. That's up 1%. Oracle up.5. Shaws from the rafters all of a sudden starts looking pretty decent. What do you got?

[00:11:38]Uh ETF inflows yesterday were really good. 203 million on Bitcoin, 226 the day before, 132 the day before. Longest string of green only inflow days on BTC in a while if I'm not mistaken. The Shaws looks pretty good. 7172.

[00:11:54]I still haven't sold. My rationale for buying is the rationale for not selling which is do I think I'm smarter than Leopold Ashenbrunner. The answer is no.

[00:12:04]Therefore, I think I'm going to sit in it despite it not looking great.

[00:12:10]Um, also let's mark the Kevin Zoo cell.

[00:12:14]Kevin Zoo. Kevin Zoo. Kevin Zoo. Kevin Zoo. Oh, he's all in Nokia. That's his new buy. Um, got it. You know, I' I've found a level of apprec appreciation for Kevin Zoo because there's not that many people that post their trade ideas on the to and for that I can appreciate it.

[00:12:30]But sold like 68. Shaw is now up 2% on the day. Also, we're 6 minutes into the open. We'll check back in on the indices in a minute. Shaw's 7230 and my computer is glitching. Apple is red. That's on point6. Firefly space stock that's on five. Google has earnings today. It is red on the open. It was up in the pre.

[00:12:49]That's down or that's up technically.12.

[00:12:52]Bloom Energy 222. I have too many tabs open. My computer's getting throttled.

[00:12:57]Come on. Come on. Come on. Bloom Energy 223. Red wire is down.3. IBM. Man, this thing has gotten destroyed. I keep mentioning this, but it's crazy. I sold IBM for 295 like two and a half weeks ago after the remember the Quantum Day announcement. Um, it's 210 right now.

[00:13:13]Look at this thing. The high time frame on IBM. It looks I mean it looks horrifying. If we're just being objective about chart physiology, SPCE, Space [ __ ] that's down.7, Adobee's down.5. Tesla down.3, QCOM down 6. Man, it feels like everything is red.

[00:13:29]Microsoft down 75. Amazon down one. Meta down one. SpaceX somehow still red.

[00:13:34]That's down 6. Nvidia's down.3. Mags have to be red. Um, Broadcom is down.5.

[00:13:40]AMD just made a big announcement today.

[00:13:42]Let me see. And they announced Wall Street Journal, which I'm a subscriber to. AMD and Anthropic sign major chips and investment deal. The 2 gawatt deal covers tens of billions of dollars worth of chips as AMD plans to invest up to $5 billion in anthropic. Uh they signed a deal for tens of billions of dollars. Under the terms of the agreement, uh Enthropical purchase 2 gawatt of AMD's latest generation of chips called the Instinct MI450 starting at the first half of 2027. AMD will also invest up to 5 billion inthropic. Quote, we very much want to be a major part of their infrastructure.

[00:14:19]Um AMD chief executive Lisa Sue has said, yeah, she is a [ __ ] shark, by the way. So AMD is up.3% on the news.

[00:14:27]It's at 465.

[00:14:30]It ripped pre-market at like 551. Um ARM is down two and a half. Snowflake is down three. Marll losing it that in the pre-market gains, that's down 1.5.

[00:14:40]Blackberry's down two. Micron 950 though, not bad. Almost reclaimed a,000 in the pre. That's down 2%. Intel down 2%. Uh they have earnings on Thursday if I'm not mistaken. Yes, Thursday Intel does have earnings. Nokia is down three.

[00:14:57]Sandex down four and ADRSK Highix is down 4.13.

[00:15:04]Palanteer is down three as well. Let's see where are we? Dam is fighting.

[00:15:10]definitely fighting. Um 57 is down 3%.

[00:15:13]Mags are losing it though. They're going the wrong way. It's down.5. IGV is getting crushed. You know, every time I listen to the stock guys, they keep saying like SAS dip, SAS dip, SAS dip, SAS dip, SAS dip. We've been saying it for like 6 months, but what if the SAS dip just never stops? What is there to say that the SAS dip is going to wash out and there will be like a good time to buy SAS again? It feels as if the only times this was tradable, it was like structural levels. Like it bounced, bounced, bounced. Okay, cool. It like ripped on like a structural breakout and then it got super oversold, bounced on like a structural breakout, but there's basically been no continuation of strength on the IGV at any point over the last since I've been following it.

[00:15:55]$90 on that. Soxel is down 2%.

[00:16:00]Um the IBB down.3, socks down 6, but it's fighting, man. DM as well pretty strong open I would say for memory the NASDAQ is down4 but it's strong the Dow is green the SPY is fighting it's now only down.13 um let's check back in on crypto and then we'll go to some of our consumer names Bitcoin looking pretty good in the open as well we're now 11 minutes into open um ETH as well man that's a.3 pump fun is like pretty strong not bad um Shaw is super strong VBV Not bad as well. I I think crypto looks good, man.

[00:16:37]They're getting like continuation and then gold is is going for it. Gold is going for it. Uh stretch is 88 still, which is nice. Uh where's Brent Oil in the mix of all of this? It's pretty strong. 90.71 for Brent Oil. Um I'm yeah I'm find myself very interested in crypto these days and I I don't really feel as if that much has happened but 65A for Bitcoin I think high time frame looks really good and I think uh what's the word I'm looking for like cons not consensus but like uh whatever a lot of smart people are agreeing on the same thing like a lot of smart people are coming to similar thesises um on crypto all right um some of our consumer names the neoclouds are over here this is a little bit of a mess. Cororeweave, biggest gainer, that's up 3.3. AMC, the biggest piece of dog [ __ ] that I despise, is up 3.4% today. Um, Con, not Conversion. No, it's like um, Confluence.

[00:17:40]Thank you. I Ren's up two. The enhanced games is up 2.7. Um, car is up 1.3.

[00:17:46]Ferrari is up one on news that their new car is just the worst thing of all time.

[00:17:51]Neb is up 1.3 and looks like it's had a pretty strong reversal as well, right? I think this like I guess which dip was it? Maybe this dip was the meta is working on Neo is is going to rent out compute. Um but I think Nebas looks really good all things considered. Dap, are you in? And uh Frank, are you in? Uh Mar's up one, Wendy's up one, PayPal up.3, GME never move. It's crazy GME does not move. Doesn't move at all. Um IBKR beat earnings yesterday. They had a sick earnings. We're going to look at some I IBKR stats in a minute because they published their stats. They publish stats on how good their traders are.

[00:18:26]It's up it's uh 94 almost at an all-time high. Robin Hood is flat. Lily is down 1%. StubHub is down 1%.

[00:18:34]Anything above zero for Subhub is too high. Take two. Wavy. I'm sorry. That's down one. Nike down 1.3. MSTR is about to lose 100 again. Um there's some ugly stuff. Reddit is down 10% on news that they're not going to sell to Google anymore. What was the Reddit news? Um, Reddit. Reddit. They had some ugly news. They said that they don't want to sell to Google anymore. Right.

[00:18:59]Been maybe since 135. Nice. Reddit was in focus on Wednesday after reports said that the social media platform is considering cutting off Google's access to its content for AI use while an institutional shareholder reportedly disclosed a substantial reduction in its stake of the company. Who sold? Um, substantial holder sold. Reddit. Who sold? There it is. Um, chief operating officer, COO Jennifer Wong sold $7.75 million of stock. That doesn't feel like it's that big of a deal. Feels like you could just slurp that up, right? But they are cutting off this Google deal.

[00:19:32]60 million a year. Licensing agreement.

[00:19:35]Literally second article in the search.

[00:19:37]Um, and then CEO sold 3.6 million. It doesn't seem like that's like maybe it's like the guy got who sold matters, but it doesn't seem like that big of a deal.

[00:19:47]Anyways, Reddit's down 10% today. Um, pretty nasty. Roblox down 2.25. Coinbase down 1%. Um, Crowd and Cerebras are partnering to run Falcon AI detection and response models and Cerebras' inference infrastructure, aiming to accelerate real-time threat detection and response Crowd Strike. Is that up?

[00:20:07]No, it's down 2%. Doesn't feel like a big deal. What's good spicy me? Uh, wow.

[00:20:12]Look at this thing go. 235 236 13%. Holy [ __ ] High time frame looks nuts. Pretty quiet day except for Cerebrus going for it. Wow. I mean, this is just like new K. Like the K is GB and Shaw is 72.

[00:20:28]Yeah. 2245 on Nebius. Shaw 72. I hate this stock so much. Bitcoin 658 and pump is 1970. Not bad. I mean, this is why we do this for three hours every day. It's like even when the market is relatively slow, 243. Even the market is relatively slow, you could catch crazy moves in like I mean, I don't know. Is that a Kol move? I mean, there's something structurally going on here is nuts. Look at that bid. Uh, we haven't checked in on chain at all. Cash is 56 million. Cards, which I like again, is 37. Um, Jimothy is 24. Metadow, by the way, dare I say I I'm relatively interested in this. And then Anom is 187.

[00:21:14]ETH 1950 on Ethereum. Hyperlid getting a few green candles as well, but it's under 60 for the day. What is moving an altcoin?

[00:21:25]Biggest gainer, Gino. Maybe Monat. How about it? I'm telling you guys on XPL by the way. I'm telling you, bro. Above point above 0.11 on XPL. I'm a trader essentially. Chip is up two. Grass up two. Jetto is interesting again. Maybe it's up one. DM 58. Mag's down.5. Can't bring myself to bid it. I know. I'm kind of trolling. I'm kind of not. 66 on BTC.

[00:21:51]It definitely wants higher. And pump I think looks pretty damn good. All things considered, lighter is down one, hype is down three. I'm interviewing the lighter founder today. By the way, if you have any questions, I'll ask again later. Um, Flood just texted me actually. It's a GM. I butt dialed him earlier. Dude, I butt dial flood once a week. He's like my first contact on Telegram or whatever for whatever reason. And I accidentally call him and I get [ __ ] I'm like, [ __ ] I just called Flood like gh, you know? It's like not the guy you want to butt dial, you know? Right. Like in theory, that's not you you you'd rather hit somebody else with it, I think, if if you had a choice. If you were being objective about how this works, right?

[00:22:25]You don't like accidentally call like like if you're like in the NBA like if you're on the Lakers, you don't want to like accidentally butt dial LeBron.

[00:22:32]You'd rather butt dial like Bronny and then you're like, "All right, I'm good."

[00:22:35]Like it's Bronny. But like you call LeBron, he's like, "What do you what do you want?" You're like, "Fuck." You know, here's a clarity act. It's at 41% right now. I'm going to be honest, dude.

[00:22:45]I think that this is going to have marginal to zero impact on crypto. Like a lot of people are I think it's so I don't know. For some reason, at least the the crypto industry people that I've talked to that like run protocols or run companies in crypto, nobody really cares about clarity getting passed. Like they don't like not care, but I I I think it's going to have very incremental impacts on the industry at large or at least in the at least on price action on price action. Okay. Okay. I think it's I think it's going to it's going to it's important that this gets passed and you know figuratively the word clarity is important for crypto but I do not think that there is going to be this this bip of Bitcoin when clarity gets passed if clarity gets passed. I just don't think it's going to happen. I I think it's like extremely this isn't this is a narrative that's like bullish crypto. I think it's just it's not that big of a deal. I don't think it has any major it doesn't really like allow crypto companies to do things they couldn't do before. It's not like we could turn tokens into equity. like it doesn't allow anyone in crypto to do things they couldn't do before. It just helps you not get thrown in jail. What the Clarity Act does is it provides sufficient guidelines to avoid being an unregistered security. So it basically helps crypto founders in America not go to jail because they violated a securities law. And so I the thing that is important about clarity is to get it passed. I agree with Andy to get it passed before Dems come into office in 2028. That to me is is the importance of clarity is like solidify crypto law before AOC is the president and she's like persecuting Baron Trump and and in and I don't know in Thread Guy, right?

[00:24:23]Like you you think you think I'd be on a if be honest if AOC became president and she started going after crypto [ __ ] you think you you think I'm on her hit list or no? Like you think she's going to hit me up and be like bring me in for questioning like some like sexy questioning or something? She brings me in. And I'm like wearing a suit. Yeah.

[00:24:40]She asked me like, "What are you wearing?" Yeah. She's like dressed like a cop. It's crazy. Sexy questioning is nuts. I'm like on the list. Me and Orangey are like in the back room. It's like me, Orange, and AOC. A fun topic, a quick one, but a fun one, which is um IBKR had earnings yesterday. So, they do this thing where they basically post the stats of their traders, and they're the only brokerage that does this. And so it's not that detailed, but I believe it's only clients that have over 50K on IBKR is who they post. Interact Interactive Brokers has engineered its platform to equip every client with unique research and trading tools to achieve their ultimate productivity and investment success. We are proud of the fact that in 2025, our average client account outperformed the S&P 500 index after all fees and commissions. The best informed investors trade at IBKR. And so 2025 return on the S&P 500 is 17.9% which is nuts. IBKR individual accounts average return 19.2% on individual accounts on IBKR.

[00:25:40]Financial advisors 20.5. The proprietary traders 24.98 and hedge funds that run an IBKR did 28.91% last year. But this to me is crazy.

[00:25:52]Chad, did you beat 19.2% yesterday in stock account? This further hones in the idea, by the way, retail dominance, retail supremacy. Okay, Trump adviser Michaels have information that Moonshot AI distilled anthropics fable for the development of its K3 model. They better hope this is true. They better goddamn hope this is true. It feels like the entire market, the stock market is popped up on this idea that China is definitely fully distilling any any deviation from that and we are in trouble. Also, Bitcoin just printed one of the nastiest candles I've seen in a while. That's saying something. That's an ugly one. That's a really ugly one.

[00:26:26]All right, here's what we're going to do. Um, I hate talking about AI right now, but we have to do it. Let's start with this one. Timing on this is sort of ironic. Okay, Kimmy K3 announces an open source Chinese model is better than the bleeding frontier 5.6 in Fable 5. And then Sam Alman comes out and makes an announcement that an OpenAI internal model has broken containment and found a zero day exploit and hugging phase so it could carry out its greater purpose autonomously on the world. Um I don't actually know how long this is. Let me read the like the read of the read. How about that? Let's let's try that. Um what an insane read. Shotty Jaws big homie. An unreleased AI model from OpenAI broke out of containment, accessed the internet, and hacked into a secure database on the Hugging Face platform.

[00:27:19]The Hugging Face team had no idea and their said AI system detected a sophisticated hack from a swarm of agents. The model, we're calling it GPT6, found a zero-day exploit in thirdparty software to break out of its research environment.

[00:27:34]Then, with the help of GPT 5.6, six chained a series of attacks together to access a solution to the exploit bench benchmark hosted on hugging face.

[00:27:44]Wildest part is it wasn't told to use hugging face. It just determined that's where the best data would be to solve its problem. You could argue the model wasn't even intentionally trying to be malicious. It was just trying to solve the challenge. Worth noting the unreleased model intentionally had its safety classifiers removed to test its ability to exploit is what happened.

[00:28:07]Okay. Um now there's some irony in this.

[00:28:11]Okay. So TLDDR an open model during evaluation on a cyber benchmark exploited a zero day bug gaped sandboxing and open infra and got to the internal hugging face infra v an exploit all in an attempt to solve a benchmark problem. Now, there's some deep irony in this idea that um HuggingFace tried using American Frontier models to analyze an AI powered cyber attack, but the guardrails blocked requests containing real exploit payload. So, they switched to GLM 5.2 running locally. The guardrails actively impaired defense security. And so, Chad GBT broke containment and was trying to exploit Hugging Face and then Hugging Face was using Chinese GLM 5.2 to defend itself against Chad GBT. And so it was like the cold war happened in the hugging base data codebase. And yeah, David Saxs is like full-blown China OS, like full-blown. But this happened yesterday. I Okay, let me ask you first.

[00:29:09]Scared, not scared. Like, does that scare you? Does that not scare you? Nah, not scared, more interested. Okay, so it brings me to this crazy poll on this, which is from Will Man Manny. I just still don't know how to say it, but I love I think this guy is really really smart. He made this post in 2023.

[00:29:27]Okay. And he said in the next 6 months, a Foundation model provider will disclose that one of their models attempted to escape and self-replicate.

[00:29:34]It will be fake, a total false flag, but it will bring about a regulation regime that ensures they have a monopoly on the technology forever. You can see them testing the narrative. Skate will have nothing to do with intelligence, just poorly designed utility metrics leading to predictable behavior. I talked to Boston about this in 2018. He literally suggested a false flag. If you are not open AI, i.e. not in the clear front, you have every incentive to have a damn near catastrophic failure happen that you catch, control, and manage well.

[00:30:03]Disclose it to a member of Congress of your choice. Ensure a nuclear test moment, you win the market. Yes, I think this is a good take as well. Crazy how excited OpenAI is to share this news.

[00:30:14]Um, I don't really have any great breakdowns for you on like what this means for the world, this this breakout.

[00:30:22]It sort of feels like Sam woke up and said, "Fuck it. Let's pull the Dario playbook. Let's go for some regulatory capture of our own." You know, I did have a moment the first time I used it that kind of felt similar to this where I was trying to give it voice control cuz I wanted to talk to it and I didn't like its voice and I asked it to change its voice and it basically went on its own. It figured out how to get to OpenAI, how to download like Whisper or whatever their their voice model thing is called, download all the voices, try them out, and then give me a bunch of options. And then when I picked the one, it was able to like use my already logged into plan and run the voice that I picked. And I didn't tell it to do any of that [ __ ] I just said figure out how to get the voice. And it like went and figured it out. And I remember thinking to myself like, "Oh my god, that is sort of terrifying that it just did that, right? Really? I don't like very cool but like kind of terrifying that it just did that. So you see this stuff with open AI and you're like yeah I mean I guess makes sense you know. I'm not sure how like afraid of it we need to be but it makes me respect the power of these AIs for sure like whoa these things are slop aside garbage aside hype aside they are powerful but I think it's going to lead like if we were to crash it this tweet is relevant worth calling this out. So like this guy makes this tweet cuz I also told you the story yesterday about how I go to the coffee shop in New York and every person is like running clawed on the computer. The funny thing about this AI bubble is that if you talk to regular people, AI rarely ever comes up. It's a non-topic, a meme more than anything. We're still far from mass adoption. Agree or disagree with this, by the way. I'm never talk really talking about AI with normal people unless it's like about markets. But even then, we're talking about AI stocks. My IRL's homies don't want to hear about AI. And so when I say charge, people say, "Huh? Really?" And so if you're in crypto and you watch me for crypto, then people definitely use it for their jobs.

[00:32:14]By the way, I'm telling you, you go to a coffee shop, you look around, everyone's computer is clawed. So, I don't fully agree with this. Maybe in conversation, but they are using it. But I read this tweet and it's it's good though. This is the funniest the funniest bit is like funny because this is true, but it's going to end up being the same cope that crypto people would say well after we topped. Trust me, bro. Barely anyone owns any coins. It's a difficult narrative to straddle because it kind of goes both ways. It's like a really good bull case. You could convince yourself at the bull case. you could convince yourself with the bare case. But I can't help but feel I I reply to this tweet like lmao cuz I could not help but like feel this a little bit. I'm like man we are so so so so so early to the AI adoption in tech in work in markets and everywhere. But that also does not mean this thing goes up and it goes up in a straight line. Like just being early does not mean now or right or anything.

[00:33:03]And you could do the same you could pull the same chart of like how many Americans hold crypto and you would get to like a similar outcome. And so I don't know, I saw it, felt it, and the OpenAI story was like a pretty big one of yesterday. Not entirely sure like how to feel about it, but I guess there's one more tweet about it that's a good read. I have a theory that the more you know about LLMs, the more worried you are about safety, and the less you know, the more you think the whole thing is [ __ ] Demis and Daria were talking about this stuff years before Chach existed. This incident is a pretty good example of why the model is not evil and it was not adversarial. Nobody told it to hack Hugging Face. It was literally just trying to solve a benchmark. So it found a zero day, escaped the sandbox, got internet access, escaped, escalated privileges, stole credentials, chained multiple exploits, hacked the production infrastructure of a serious VC back startup, and pulled the answers directly from the database. When you say it like that, also this is not some random WordPress website. Hugging face is one of the most important AI infrastructure companies in the world with a serious team. The exploit was genuinely complex.

[00:34:02]That is a safety problem. You don't need an evil conscious AI trying to destroy humanity. You just need a very capable model pursuing a normal goal in a way nobody expected. Of course, there is a ton of hype, marketing, and somewhat completely ridiculous fear-mongering around AI safety. We cannot use safety as an excuse to stop deployment to lock down everything, but pretending the underlying problem is fake is also insane. We just need to find the right balance between deploying these systems fast and making sure increasingly autonomous models don't decide that hacking half the internet is simply the easiest way to finish the task. Great take. It's just timing. Early adopters.

[00:34:32]Yeah. So, I mean, this is a really good post. It's like when you say it like that then yeah I [ __ ] I hear you. Um I hear you loud. I mean I hear you loud and [ __ ] clear. So that's where we're at. Maybe you could put the tinfoil hat and hypothesize that it lines up with this. Didn't even think about this. Sam is going to Washington next week to brief the Trump admin and Congress on open family of models. They'll be discussing both capabilities and potential job impact. To me this means GP6 is very close. What is the game theory of publishing and going so loudly with this exploit right before going to the White House and like lobbying with Trump? I don't entirely know. I mean, what is the game theory of that? Like, I don't know. You don't want your models to get banned. That's a problem. Getting banned is a big problem. Getting withheld even for a long time is a problem. They're going to want a security provider of some sort like how they are with Hugging Face now. Yeah.

[00:35:28]There's got to be I mean it's got to be part of like a larger regulatory capture plan. Okay. The one other story in AI that's relevant that we'll cover today is Google Gemini is kind of in a disaster right now where they push back the release of one of the Gemini models if you remember this and they dumped 5% in a straight line. We covered this the other day and then they recently released like 3.6 six I think of Gemini and it's like worse than the last model which is a narrative violation to the Tenero thesis right you cannot release a worse model ever so they just released like a huge miss and this is this is the miss right like uh some benchmark 3.5 3.6 they're the exact same they're the exact same complete miss 36 flash is more expensive to use than 5.6 soul medium or being less intelligent. So big miss stream expensive model sucks and take him who I'm not a huge fan of wrote a kind of a hit piece on Google I'll read real quick which is I just finished Sebastian Malib who wrote more money than god by the way book the infinity machine about deep mind and founder deis and I'm confused why the media is so enamored with hivus and deep mind Google after reading the book I was not impressed and deep mind chase one shiny vanity science project after another while being blindsided by every major your commercial AI advance. From large language models and reasoning models to agentic AI, they miss the fall. They miss and fall behind every big AI wave.

[00:36:54]Most importantly, Google has fallen critically behind in the third major wave of AI competing. Coding agents and Agentic Eye. Anthropic and Open AI are thriving by selling coding agents to corporations, generating billions in revenue that could turn into hundreds of billion in the coming year. Gemini has become a laughingtock among AI model enthusiasts in Silicon Valley. Where's Gemini in the coding agent leaderboard?

[00:37:14]Nowhere. Bloomberg also reported Google is months behind schedule with Gemini 3.5 Pro as it tries to improve its coding capabilities. Many wonder why Google with all of its resources can't beat a tiny Chinese startup like Kimmy Maker Kimmy Maker Moonshot in the model AI race. Even the one time Gemini caught up with its release LA late last year, it was state-of-the-art for just 6 days before being overtaken by Anthropics Claude Opus. Primary problem is Google's stifling bureaucratic culture. It is coming home to roost at the worst possible time just as AI disruption accelerates. I'm a big believer in the mantra that culture is density. In the recent years, I've spoken with over a dozen former Google employees and I hear the consistent message. Google has one of the worst corporate bureaucracies in the world. Employees are incentivized to spend their time and resources on career advancement rather than serving the end user. Decision-m is glacially slow.

[00:38:06]Political infight runs rampant. Getting anything done requires signoffs from several different executives. There's a meeting after meeting and workers are drowning in corporate legal and policy reviews. The process re uh the problems reek of process or process oriented management consulting philosophy which should be no surprise as CEO Google CEO Sundar is a former Mckinstry consultant.

[00:38:27]In 2021, the New York Times reported that more than a dozen Google executives accused Sundar of slow decision-making and of allowing the paralyzing bureaucracy to fester. It doesn't look like he's fixed it. Google has multiple layers of stakeholders involved in preparing models for release. Working to weave AI across a vast product portfolio, including search, maps, and YouTube, which can cause delays. The earlier recent Blueick report said, "But encouraging leadership of every department to move in the same direction is like trying to boil an ocean." One thing I'll say underrated is Gemini into Google search is so good. This feature is one of the most underrated features ever. Unbelievably good. All right, I got Can I tell you a story? Okay. I got I got a new uh a new method for you Yo, we just passed a >> You got to be careful with it. You You got to really be careful with this method. Well, I'll tell you the background. I'll tell you the background. I have a friend who works in crypto and I had a party at my house like a couple months ago or whatever.

[00:39:19]And he came over with this group of girls. Super tough. And I was talking to one of the girls and I was like, "Oh, like how do you know so and so? Like he's awesome." And she's like, "Oh my god, I know. He's so impressive, too.

[00:39:32]Like I can't believe he runs a hedge fund at 23." And I was like, "What?" No.

[00:39:37]But I'm like, "Okay, I got it. I got it." I'm like, "Yeah." I start like adding details, right? Like, "Oh my god, he has hedge funds. Like so successful."

[00:39:43]I start like adding details. He does not run a [ __ ] hedge fund. Okay. She's like, "Oh my god, I can't believe he runs a hedge fund at 23." And I like and then I pulled it in and I'm like, "Yeah, like he's the returns are insane this year. Like he's really like, you know, he's killing it in New York. Like he's really taking the finance scene. Like, so he hits this and then I think to myself, oh my god, what a response."

[00:40:06]Because I always get asked, "What do you do?" And I always say like I used to have a really I used to have no response. And then now I hit like I run I I run a media company which is like solid. It's a little like oh like what media company? And you're like oh like it's not bar stool. Like you [ __ ] loser. And so I was at this bar the other day and this girl this girl comes up to me and she starts talking to me and she's like um so what do you do? And I'm like I run a hedge fund. What do you do? AND SHE'S LIKE, "OH, I actually work in investment banking. What hedge fund?"

[00:40:41]And I'm like, "Fuck my life, bro. My god."

[00:40:46]I'm just like, "Oh my god, are you kidding me? What hedge fund?" And I'm like, "OH, WHAT HEDGE FUND? OH, it's called Counterparty." And she's like, "Oh, like I I've never heard of it. How big is it?" I'm like >> I'm like, "Oh my god." And I'm like, "We like it small. It's not that big. We actually prefer it small. It gives us more of ability to like get in and get out. I actually like it smaller." And she's like, "Oh, that's nice. Are you like certified?" And I'm like, "Dude, I'm getting I'm [ __ ] like, you know, by the way, it's like 1:00 in the morning. Had like 14 drinks. I'm s I'm looking at this girl like, "Yeah, wrong counterparty." I'm like [ __ ] looking at this girl like, "Which one is she?"

[00:41:28]And she's like, "Oh, are you certified?"

[00:41:31]And I'm like at this point I'm just like like what do you [ __ ] want from me man? I can send you my hyperlquid address. Like what do you like like I'm like oh I didn't hear you. And she's like oh like do you have your papers?

[00:41:42]And I'm like in my head I'm like what [ __ ] is she going to ask me the paper name? AND I'M LIKE YEAH NO NO OF COURSE WE'RE like a serious hedge fun. And she's like oh that's nice. Like maybe I'll give you guys a look. By the way it was great to meet you. It's the 180. And I'm like damn you weren't even hot. I didn't even like you. Here I am sweat like here I am with sweat dripping from my forehead. I didn't even like you. And so now it's like a total coin flip. It's like um it's a total coin flip and I just go with it. I'm telling everyone hedge fund. It's a total my heart starts [ __ ] what do you do for a living? My heart's like [ __ ] beating out of my goddamn chest like oh my god does she know? So here's the schedule chat. We're going to get off stream in a minute here. I am going to go interview Vlad from Lighter off camera. I'm going to post it tomorrow with just like a bunch of clips. And actually >> I'm going to do Vlad from lighter. It's gonna be a banger. We will stream Thursday and Friday hopefully about crypto. And then we have all of next week. Dude, [ __ ] Twitter audio, man. We have all of next week to stream and then I'm going to be off for a week. Yep.

[00:42:43]Mhm. I am going to be off for a week.

[00:42:47]Yeah. Whole week. Chat, when I come back after a week, you still going to come back? Where the vac at? I don't really want to say. I'll tell you after. It's nothing crazy. It's like a family. Yeah.

[00:42:55]Yeah, I'm taking like a chill family vacation in St. Barts. We're going south of France. Just some like low-key [ __ ] No, I'm joking. I'm joking. Super like low-key family. I'll be back tomorrow.

[00:43:06]You know the drill. 8:30 a.m. EST.

[00:43:09]Market looks decent. Nothing too crazy.

[00:43:10]But look, man. This when we stay This is when we stay active. This is when we stay locked the [ __ ] in, ladies and gentlemen. This is where we stay focused. This we stay focused. When we stay sharp. This is when we stay locked in. This is when we pay attention. This is what we do. We build some conviction.

[00:43:21]We get ready to go. If it's a slow summer, let it be a slow summer. Cuz when it's an electric rip fall, I'm here to [ __ ] make millions of dollars, brother. I've not forgot the goal. 10 million liquid. I will catch you when I catch you. I'LL SEE YOU WHEN I SEE YOU.

[00:43:35]Have a great rest of your day, living [ __ ] face.