Episode 50: Apple - Beats

**Ben Gilbert** (0:00)
Oh, man. All right.

**David Rosenthal** (0:01)
Too cheesy.

**Ben Gilbert** (0:02)
Yeah, you should do that. It's going to be cheesy, but you should do it. And I'll make it, yeah.

**David Rosenthal** (0:06)
I love the cheese.

**Ben Gilbert** (0:08)
Yeah, that's perfect, then I can make fun of you for dad jokes. Welcome back to the big half-century, Mark, episode 50 of Acquired, the podcast about technology, acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:33)
I'm David Rosenthal.

**Ben Gilbert** (0:34)
And we are your hosts. So today we are doing a classic episode of Acquired. It's the reason we started the show, it's the original format. It's one we've been talking about doing for a long time, and it's one that we've probably had, you know, 20, 30 requests for this since we started the show. So finally we are covering, finally, it's an Apple episode, so we have to say finally we are covering the acquisition of Beats by Apple in 2014 for $3 billion.

**David Rosenthal** (1:04)
I'm so excited about this one.

**Ben Gilbert** (1:06)
Yeah, yeah, me too. I wish I wasn't a little under the weather for it, but listeners, bear with me. I know I'm a little little nasally this episode.

**David Rosenthal** (1:16)
You're like, this is gonna be like Michael Jordan in game six of the finals playing with the flu. You're gonna rise to the occasion, Ben.

**Ben Gilbert** (1:27)
Thank you, David. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (1:37)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners, and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:03)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:08)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So, think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:26)
Yep. Obviously, it's a huge benefit for the environment and for customers on cost, since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (2:43)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (2:59)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes. All right, David, that is all I've got between us and Beats.

**David Rosenthal** (3:21)
I can't wait. I am ready to start. I almost started talking over you.

**Ben Gilbert** (3:26)
That would be new.

**David Rosenthal** (3:28)
No, that would not be new.
All right, let's do it. So this is probably, certainly thus far, the coolest founding story on Acquired. Maybe as long as we do the show, it's going to be hard to find a cooler founding story than this one.

**Ben Gilbert** (3:46)
I don't think it's possible.

**David Rosenthal** (3:47)
I don't think it's going to be possible. And certainly the coolest founders. So Beats was founded in 2006
By Jimmy Iovine and Andre Young. And those names may mean something to you, or they may not, but they certainly will in a minute. So Jimmy Iovine, who is Jimmy? Who is this guy? Well, he's a music producer and an executive. He started as a sound engineer early in his career. He dropped out of college. He grew up in New York City, in Brooklyn. His dad was a longshore man. And he would love music, was obsessed with music. He eventually rises and he becomes the head of Interscope Records. But this guy, he is a legend. And there's a great documentary about him and his co-founder, who we'll get into in a minute, called The Defiant Ones on HBO. Highly recommend watching.