Why the AI Business Model Is Cracking and How Crypto Could Help Fix It

**Tom Shaughnessy** (0:00)
But generally, I view it as big brother fear-mongering and I think it's super annoying.
The idea that we're letting some AI lab dictate what we're able to ask and why is a really slippery slope because you just don't, you don't want to be told what you're able to research or look at or ask about. Do you want to be in China and you're not allowed to ask about Tiananmen Square? No, people don't want that.

**Laura Shin** (0:29)
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Today's guest is Tommy Shaughnessy, founding partner at Delphi Ventures and co-founder of Delphi Digital. Welcome Tommy.

**Tom Shaughnessy** (1:45)
Laura, thanks so much for having me on. Been listening to your show forever and it's great to be on.

**Laura Shin** (1:50)
Thanks, yeah, excited to have you. You've had some really eye-opening tweets recently about the AI business model, and those sparked some obvious questions ahead of these mega IPOs that we're about to see, including SpaceX tomorrow. But before we talk about all that, I just want to start with a question for the crypto markets. We started the year at about a $3 trillion global crypto market cap, it's now at about 2.2 trillion. Over 600 billion has left over the last 30 days.
There's so many theories out there, and I was curious why you thought that was, and also if you felt like some of it maybe has to do with these, well, first of all, just AI generally, but also these blockbuster IPOs that are coming up.

**Tom Shaughnessy** (2:34)
Yeah. When you say the numbers like that, now I know why I'm crying on the shower so often.
It makes a lot of sense. Yeah, crypto markets have been extremely brutal.
I think it's a mix of things. I think headline for the overall trend has just been outflows to AI deals. People have been killing themselves to get into second, third, fourth layer SBBs for OpenAI, Anthropic and a whole host of names below them. Then on the not whole side, you just have people pushed away from crypto because of fears about quantum, fears about strategy, and things like that. It's been rough on both sides.

**Laura Shin** (3:16)
What do you think will happen in the crypto markets these next few months with these big IPO starting with SpaceX tomorrow?

**Tom Shaughnessy** (3:23)
It is interesting. I think SpaceX does well out of the gate.
My partner, Piers, published an incredible report on SpaceX and I read through it and it's just such a fascinating story. He built his thesis around the cost per kilogram to ship something into space and what you get as that decreases, like all the new technologies and capabilities in space. I don't know, I think it does really well. I've been watching Polymarket and it looks like consensus is above a $2 trillion value, 2 to 2.5 closing market cap and it's going on at 175 I think it does good for the first couple of days. I'd be a little bit more wary as time goes on though.

**Laura Shin** (4:09)
Okay. But then do you expect the crypto markets to be choppy these next few months with OpenAI and Anthropic coming?

**Tom Shaughnessy** (4:16)
Yeah, it's such a hard thing to reason about because on one hand, you have people who were never able to access these IPOs, index funds, maybe me and you that couldn't jump in or just mass retail. They want to buy AGI stocks. They want to tell their friends they're in it. They want to be part of the story.
They use these products all day and they're exciting. They're more exciting than only Bitcoin right now. It's just clear.
It's hard to argue that. The problem though, I think, is not on the short term, right? The floats are small. I think the retail interest is there. I think the index interest, the past the funds, that's enormous amounts of capital that will be either forced to flow in or want to flow into these names. I think the problem could be a medium term, a little bit after the IPO window, where stuff starts to get a little tricky.