AI Giants Hit the Breaks, Harvey AI Hits $15.5B, Oura Files for a $16B IPO and more w/ Dave McClure & Aman Verjee

Dave McClure (0:00)

Well, I guess either AI is going to save us through productivity growth, or it's going to kill us, one of the two, I don't know.

Aman Verjee (0:07)

I think this is part of an ongoing strategy that they're building around regulatory capture. I think it's more of a calculated move from the industry, especially those frontier models, to protect themselves.

Dave McClure (0:18)

I'm not sure I'm quite as cynical as you are, at least about Dario Amodei. I do think he is somewhat earnest in his concerns.

I'm not sure I feel the same way about Sam. I think Sam will use any headline for his own purposes.

Bill Draper (0:34)

We went out into the orchards and knock on these barn doors, if it said electronic something or other.

We said, what is VentureCapital? There was no knowledge of what VentureCapital was. Of course, it wasn't called Silicon Valley.

Dave McClure (1:05)

Welcome back to Trading Places, the world's worst, horrible, terrible VC secondary podcast. Aman, we're back after a week off. We were both down in Guatemala for the volcano summit. You were up in Jackson Hole.

For some Fed rate info, I guess.

Aman Verjee (1:21)

There was a Fed ConFab. I was actually out there at the Wyoming Tech Conference, their 13th annual. It was a great, great event, actually. A lot of tech leaders, business leaders, and had a book event and a book signing for my new book available now on Amazon, A Brief History of Phenomenon.

Dave McClure (1:37)

Big bubble trouble.

Aman Verjee (1:39)

Go there to get your copy right now. Absolutely. That was a great event.

Dave McClure (1:43)

Well, we've had a big amount of news since we last checked in. We're going to talk a little bit about the macro picture. A lot of challenging macro issues, inflation up, rates up, oil is up. Hopefully, that doesn't slow down our IPO window.

But then the bigger news, I guess for Silicon Valley anyway, is everybody's worrying about whether AI is going to kill us all.

Aman Verjee (2:09)

You're all talking about it now.

Dave McClure (2:11)

According to somebody, it's only 10 percent chance. So I guess that's pretty good. AI going rogue at OpenAI and Anthropix saying we need to slow down. I guess that hasn't slowed down Anthropix IPO.

They picked NASDAQ to go public, and it sounds like that will happen sometime in Q4, maybe in October. We'll see. OpenAI says they're going to push off to 2027, Oura filed for their IPO. Kind of cool. We're seeing consumer commerce come back, and certainly all the nervousness about Macro and AI hasn't slowed down. The VentureCapital market, we have four big rounds being announced. Cognition, Crusoe, Shield, and Harvey. We'll go over each of those. And then we'll cover a little bit about the tender offer. And tender in this case does not mean tender loving care. It means the corporate organized secondary market, of which there are over 500 deals this year, probably on the way to 600 We'll see. Let's get started with our first news story about the macro picture.

Aman, the macro picture, not so lovely right now, huh?

Aman Verjee (3:16)

I think it's fine. I think the new news is that the treasury bond, the 10 year hit 5%.

It's the first time since about 2023 So it's been creeping up, creeping up, creeping up. It was four, six, four, seven a couple of weeks ago. The Fed is now talking about a rate hike. They were kind of in a neutral position with maybe a 50-50 coin flip a few weeks ago. I think now the betting odds on tomorrow's meeting or maybe they go one move. I'm not surprised to be honest if they went up, but it seems like between inflationary pressure and then a whole bunch of new debt being issued. It's corporate debt, it's AI asset backed securities in order to finance data centers. And then the ongoing issuance of the treasury. I think all those things are just pushing rates a little bit higher. So it hit the 5% milestone. That's not great, but I think in the grand scheme of things, it's still 20 basis points from where we were a few months ago. And it doesn't seem to be slowing down the IPO economy for sure.

Dave McClure (4:08)

Aman, you're not concerned about any of this? I mean, come on, we've got budget deficits, annual budget deficits at 2 trillion, a national deficit at 40 trillion, oil over $100 a barrel right now, Saudi pipeline being shut down by the Houthis, maybe up to 30% of the global oil supply is at risk or limited. Then we've got all this data center build out, which is certainly sucking up all the debt capital out there, pushing up prices for everybody else's debt. And you're not concerned. This is all fine and dandy for you.