1. Delta's best customers will pick a flight for faster Wi-Fi.

Fuel is up 60%. Only three US airlines are profitable this year, and Delta is one of them. Its CEO shrugged off Elon's public jabs about Starlink, betting premium flyers buy the whole experience. Look at the Superconsumers, the tiny group of buyers who spend the most and care the most. At United, the top tier is about 0.02% of members, and they spend around $50,000 a year to get there. They work in the air. They want the fastest internet, whatever the logo. And seats aren't where the money is. Amex pays Delta about $9 billion a year, more than Delta's $3 to $4 billion in EBITDA. United already has Starlink on about 40% of its fleet. In 2026, fast free Wi-Fi is the floor.

2. A forward deployed engineer is a consultant with a better name.

Nearly four years after ChatGPT, AI payoff inside big companies is still hit or miss. Google Cloud and Accenture will train up to 1,000 engineers to sit in client offices and build the AI themselves. One invoice project took 8 to 12 weeks. OpenAI, Anthropic, Microsoft, and AWS all have their own crews. Call it languaging, picking the words that define a category, and "forward deployed engineer" is a great one. AI moves fastest where numbers check the work, like code and math. So the consulting it fits best is deal diligence, pricing, and cost cutting. Every budget has about 10% of stupid in it, and AI can find it fast. The smart move for the labs is hiring the top expert in each practice, not the whole firm.

3. Everyone is scared of housing. Berkshire is buying the whole chain.

Mortgage rates are back above 7%. In four weeks, 21% of sellers cut their price. Lennar is handing out incentives worth 12% of a home, and its margin is 15.8%, a level last seen after 2008. Berkshire still paid $6.8 billion for Taylor Morrison and pushed past 10% of Lennar. The US is about 7 million homes short. At $300,000 a home, that's $2.1 trillion. Berkshire owns the value chain, every step from paint and carpet to realtors and mortgages, so it can build faster and cheaper. Single-person households jumped from 8% to 29% since World War II. Taylor Morrison already targets renters and active adults. The next wave of homes won't be built for a family of four.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

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Recorded Wednesday, October 14th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Marketing Engineer is a hot new title. The scoreboard decides if it matters.
Profound raised $180 million at a $1.8 billion valuation and built a job board, a hackathon, and a podcast around the title. Listings jumped 29% last year. Only 173 people actually started the job. Christopher saw the same move in the early 90s, when "sales engineer" arrived with sales automation. He splits it in two. A market engineer designs new categories. A marketing engineer runs tech inside an old one, and can get so smart it's stupid. Eddie's bar: marketing should be a profit center, meaning a buyer would pay for the marketing team on its own. Chase a 20% bump in market cap, not a 20% raise. Figma plans to grade its hire on agents built. Count agents and you get agents, not outcomes.

2. Brands are throwing raves. The ROI hides in who shows up.
Spotify and LinkedIn built a fake office rave for DJ John Summit, a former accountant, and filled it from his top New York listeners. HBO threw a caviar-and-jello-shot warehouse party for its show Industry. The Wall Street Journal asked about the ROI and printed zero numbers. Christopher calls it plain event marketing, and IRL is worth more every year. The play: know your Superconsumers, the people who spend the most in your whole category, then go where they party. The super of one is the super of nine: a superfan of one thing is a superfan of about nine others. Beatbox built a party drink on that and sold to Anheuser-Busch for $500 million. The press counted posts. The money is in the guest list.

3. Britain's top-selling car is a Chinese Range Rover lookalike at half the price.
Chery's Jaecoo 7, nicknamed the Temu Range Rover, was Britain's best seller in September. It has sold almost 87,000 cars in under two years. One London dealer says 3 in 5 buyers traded out of a BMW, Mercedes, or Range Rover. Chery learned the car as Jaguar Land Rover's partner in China. Eddie's read: China's brutal home market leaves extra factories that must export to cover fixed costs. Next, struggling European makers sell their brands, and China enters America as Chinese build, European badge, American factory. Christopher's frame: the category makes the brand. When the problem becomes "Range Rover feel for a third of the price," loyalty resets. Western carmakers need to name and claim the next category, not defend the old one.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

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Recorded Wednesday, October 7th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

**1. Amazon locked out Meta's AI shopper. Meta's stock went up $146 billion anyway.**

Meta's Muse launched September 8th. It runs your errands, and it hit 3.4 million downloads. On September 20th, Amazon blocked it as an unauthorized AI agent. A day later, Shopify opened checkout to Muse on every Shopify store. The scoreboard: Shopify up $25 billion, Amazon down $82 billion, Meta up $146 billion. Amazon's fear is simple. Its ads earn about $20 billion a quarter, and an agent never scrolls past a sponsored listing. Eddie calls the block penny wise and pound foolish. The bigger win is growing the pie, which means making the whole category bigger instead of guarding your slice. Meta's catch: only 8% of people would trust it with their passwords. The press covered a blocked app. The real fight is who owns the customer when nobody scrolls.

**2. AI's biggest names asked Washington to slow them down. Jensen Huang shipped a seatbelt instead.**

On September 12th, Anthropic's CEO called for pausing frontier AI. OpenAI's CEO and Elon Musk agreed within hours. Jensen Huang said no new laws: if it isn't safe, don't ship it. On Monday he shipped the fix. Nvidia's platform puts every AI agent in a sandbox it can't rewrite, plus a watchdog chip that quarantines a rogue agent in milliseconds. More than 100 partners signed on, including Microsoft, JPMorgan, and Anthropic. OpenAI did not. Christopher reads the pause call as a lightning strike, a coordinated launch built to own one big moment, aimed at shielding the big labs from open source and lawsuits. Eddie's test is a Tesla on self-driving. It drives, but it beeps, warns, and pulls over when you stop watching. Safety is an engineering job, not a legal one.

**3. 1 in 10 Americans has cut off a parent or a child. Your kids are taking notes.**

This summer, over 200 parents packed a Chicago conference for parents whose adult kids stopped calling. About 1 in 10 Americans is cut off from a parent or a child. Last month TikTok posted 138,000 new no-contact videos, ten times the 2020 number. Abuse is different, and boundaries there are right. Outside that, Eddie argues for relationship capital, the trust and meaning you build with people over years, and family is the richest source of it. He also follows the money: the conference organizer sells services to estranged parents. Christopher's warning hits hardest. Cut off your parents, and you teach your kids to cut you off. The coverage asked about boundaries. It skipped the next generation.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Wednesday, September 30th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Jersey Mike's doesn't have a marketing problem. It has a sameness problem.

Jersey Mike's is worth about $7.5 billion after 20 straight years of sales growth. Only 2% of its customers are Gen Z. Getting from 3,300 stores to 15,000, with $1.8 billion in debt, means winning them. The new CEO is pushing money into TikTok, up from 1% of the budget. Christopher says the universe is screaming that they are not different. The fix is category design: frame a new problem, name it, and claim it, so you own a space nobody else does. Eddie points to palate: a banh mi sub, a Mexican sub, flavors Gen Z already loves. His wildcard: sell Gen Z on owning a franchise instead of just eating the growth.

2. The mall was never in the shopping business.

San Francisco Center did over $1,000 a square foot before COVID and was once worth $1.2 billion. It was 93% empty last year and closed this year. Brokers say $130 million is the ceiling, about a dime on the dollar, while the city booms on AI money. Christopher blames California's costs, crime, and red tape. Nobody buys that much downtown dirt without a clear path. Eddie says malls were where teens went to hang out, and retail just paid the bills. Christopher adds Joe Pine's experience economy: people now spend on things to do, not things to own. Architect Jon Jerde proved it by putting a roller coaster in the Mall of America. Replace the hangout and the box fills itself.

3. Coast FI gets the math wrong and the dream wrong.

Coast FI says save enough early, then never add another dollar. Say you want $1.8 million at 65 with 7% returns. Hit about $240,000 by 35 and stop. Searches are up 50%, and one woman banked $1 million by 27 and quit her software job. Eddie says the math ignores inflation. Social Security's fund runs short around 2032, and he bets the fix is printing money, so every saved dollar buys less. Christopher ran the real test: retired at 38, skied 120 days a year, and got bored enough to start companies again. The better goal is the Creator Capitalist, someone who gets paid to be themselves by making a big difference. Financial independence is a runway, not a couch.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, September 11th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Dyson skipped the market sizing slide and shipped anyway.

Dyson's Camera Jet costs $499. A camera in the brush head takes 28 pictures a second, finds the gaps between your teeth, and jets mouthwash in to floss while you brush. That is about $100 more than the best Oral-B. Only 30% of American adults floss every day. A third never do. Dyson told the Wall Street Journal he had no idea of the market size. He is 79 and owns all of an $8.3 billion company. Eddie says it sells anyway, because oral care superconsumers, the heavy buyers who own the floss, the water pick, and three brushes, buy on a point of view called whole mouth health. They are not spending $499 on teeth. They are spending it on their heart. It sold out in days.

2. Wall Street watched the launch. The numbers were somewhere else.

Two seats, no steering wheel, no pedals, no live stream. The stock fell 5.9% that Friday. Regulators opened an audit into how Tesla self-certified the car. About 1,000 Cybercabs are built and only 45 are registered in Texas. Underneath, driverless miles went from 380,000 in July to over a million. Austin went from 54 driverless Teslas in June to 128. Eddie walks the magic triangle, the three pieces that make a category real: product, company, and ecosystem. Toyota builds a car every 30 to 60 seconds. The Cybercab line takes 10, aiming for 5. Then tens of thousands of people applied to buy and run their own fleets. That is capital raising design. Elon got the public to fund the scale he would have had to raise.

3. A group chat did what an agent could not.

The average starting kicker or punter in a Power 4 conference makes $225,000 this season. Specialist pay jumped 61%, the second biggest raise of any position in football. The top kicker makes $600,000. These guys have known each other since they were 15, from the same camps. They put their salaries in a group chat. One kicker was offered $40,000, told the school he knew what a rival made and that his stats were better, and signed for $225,000. No agent. Christopher calls this knowing the value of your value, which is what we teach in the Academy: name what you do, claim what it is worth, and hold there. A bunch of teenagers built the most transparent pay market in the sport by texting.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, September 11th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Apple was seven years late and still takes 44% of the money.

Apple put the iPhone Duo on stage at $1,999. The other prices went up $100 and the base iPhone disappeared, so the cheapest new iPhone this fall is $1,199. Samsung has sold foldables since 2019 and shipments fell 15% this year. IDC still gives Apple 44% of foldable revenue in 2026, for a phone that ships October 23rd. How do you sell a $10,000 watch? Put it next to a $100,000 one. Superconsumers, the small group that drives most of the spending, will pay for a big jump in price when they get a different outcome. They hate 3% creep for the same old thing. The press covered the $100. The $1,999 phone is what made the $100 feel small.

2. Wall Street priced the end of corporate software. The software companies beat their numbers.

Salesforce stock fell about 30% this year on one idea: if AI writes the software, why pay for software? Then Salesforce beat and raised. ServiceNow beat. Workday and Snowflake came in strong. Salesforce jumped 22% in a single day on a deal to put Claude inside it, and it still trades at 16 times earnings against a 10 year average of 43. What enterprises actually buy is intellectual capital, the 30 or 40 years of knowing how this work really gets done, wrapped around the data as context. Eddie calls it the triple D: data, decision, damage control. AI can have the data. Nobody wants four people and a pile of agents when something breaks.

3. Nike took the word category off its own org chart.

Nike was worth more than $260 billion in November 2021. It is about $57 billion now, a 78% drop, and this month it leaves the S&P 100 after almost 18 years. Running, basketball, and soccer became men, women, and kids. Hundreds of retail partners got cut and brand advertising moved to digital ads aimed at people who already buy Nike. Hot dogs and sausages look like one category. Shoppers pay up for better beef in a hot dog and refuse to in a sausage. Get that wrong and the P&L blows up. The category makes the company. Nike brought the categories back at the end of 2023. This year direct sales fell 6% and wholesale grew 6%. The comeback is the thing they cut.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, September 11. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. The car with eight cameras just claimed privacy.

Tesla published its privacy principles inside a 216 page report. Three promises: give you choices about your data, stay transparent, protect everything. The product making those promises has eight exterior cameras, a cabin camera, microphones, GPS, and a cell connection phoning home on every car built since 2012. Eddie runs it through the magic triangle, the idea that a category gets designed across product, company, and category at once. Everyone waited on the product news. The news was the profit model. Free services sell you. Tesla charges a premium for the car, so it has no reason to sell you. Trust takes an eon to build and a second to lose. The press spent a week waiting on a flying roadster.

2. Tesla invented the scoreboard, then crowned itself on it.

37 million metric tons of CO2 avoided last year across cars, solar, Powerwall, and Megapack. That is 90 billion miles of gas driving that never happened. Eddie puts it in human scale: about 8 million gas cars gone, roughly every registered vehicle in Georgia. Offsetting it with trees would take 2 to 3 billion of them, a full Maryland of forest. Avoided emissions is a metric Tesla made up, which is the point. New categories need new metrics, because the old ones were built to score the old category. Christopher sees an empty lane: the environmental movement ran to both extremes and nobody owns the sensible middle. Most climate nonprofits never publish a number this clean.

3. Volvo owned safety in gas cars. Nobody owns it in EVs.

A normal airbag fires 50 milliseconds after impact. Tesla's fires up to 70 milliseconds before it. That swing is 0.12 seconds, and Eddie's math puts it at roughly 25 percent less force on the body. The US has 6.2 million crashes a year and 36,000 deaths. Speeding drives about 11,000 of them. Cut those by 25 percent and 2,700 people live. The Department of Transportation values a life at $11.5 million, so call it $31 billion. Christopher's frame: when the category changes, the brand hierarchy changes, so owning safety in gas cars does not carry into EVs. The one thing blocking self-driving is people not trusting the robot. Tesla is buying that trust six feet at a time.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today! 

Recorded Wednesday, July 8th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. She owned the asset in 1967, before she had a single hit.

Elvis wanted half the songwriting on a song he did not write. Dolly said no, and everyone told her she was out of her mind. Seven years earlier, in 1967, before a single top ten hit, she had started her own publishing company with her uncle and owned the copyright on everything she wrote after that. Paul McCartney signed a deal he regretted for decades. His line: John and I didn't know you could own songs. Whitney Houston's 1992 cover sold 11 million copies and paid Dolly roughly $10 million in that decade alone. This is the creator capitalist, the person paid for the value they create instead of for their time. She wrote Jolene and I Will Always Love You in one evening.

2. A $399 duck is the cheapest way into physical AI on earth.

Hugging Face and Pollen Robotics shipped a $399 robot duck. Out of the box it walks, rollerskates, and picks things up with its beak. It sold 10,000 units and $4 million in week one, and orders are pushed past Christmas. The simulator, the training stack and the control stack are all open on GitHub. Days later Nvidia agreed to buy Hugging Face for $13 billion. New categories move in three stages: novelty, niche, then necessity. Roomba started as a novelty at Sharper Image, found a niche in the military, and became a necessity through daily cleaning. A superconsumer is the person who buys most and cares most, and the superconsumer of a novelty is never the superconsumer of a niche.

3. A $4 cut moved 40 percent more units. The price was wrong all along.

The Supreme Court ruled the reciprocal tariffs exceeded the administration's authority, so $128.7 billion is going back and about $100 billion was out the door by early August. Walmart got $2.9 billion and cut prices on 11,000 items including ground beef. e.l.f. Beauty got about $50 million, dropped one product by $4, and watched unit sales jump nearly 40 percent. It rolled the cuts across the portfolio and net sales rose 36 percent that quarter. The smart move is to discount the trip driver, the thing that gets you in the store, and leave the impulse item priced high enough to make you think twice. Ask Costco about the $1.50 hot dog. Capitalism rewards the flow of money, not the capture of it.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, September 4th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. $12.7 billion over ten years is about one percent of a year's revenue.

Meta settled with 48 states and four US jurisdictions. The headline is $18 billion. The guaranteed number is $12.7 billion paid over ten years, against revenue of roughly $200 billion a year. That is about one percent. The attorneys general had asked for $200 billion. The product changes are real: a two hour daily default for under 18s, apps off from midnight to 6 a.m., notifications off during school hours, and only a parent can change any of it. Meta admitted no wrongdoing. Florida and New Mexico refused to sign. Meta's category was never social media. It started as FaceMash and it monetizes comparison. The next thing they want to sell you is an AI that knows everything about you.

2. One company out-earned twelve of America's biggest brands put together.

Nvidia did $96.2 billion in revenue in one quarter, up 106 percent, and $59.7 billion of net income in three months. Twelve of America's biggest companies, Apple and Walmart and Disney and nine more, made $57.9 billion combined over the same period. The stock finally rose after four straight quarters of beating and falling anyway. Revenue per gigawatt has gone from $18 billion with Hopper to $25 billion with Blackwell to $40 billion with Vera Rubin. Nvidia owns one layer of the six layer cake, the stack every AI business gets built on, and one layer never holds. That is why they are buying into open weight models. Half of America says it hates data centers. None of that hate shows up in these numbers.

3. The best AI return this month was $4 million on a potato chip line.

Kellanova spent four years building a live digital twin of Pringle dough. Sensors read 200 data points every millisecond. More than 200 parameters go into one chip, and every batch of potatoes is different. The investment was $4 to $5 million on a single line in Poland. It returned better than 40 percent, cut waste 13 percent, and lifted quality 10 percent. Belgium is next, the US in 2027. Those three plants run 705 million pounds of Pringles a year. In a legacy category, consistency is the product, which is why Budweiser tastes the same in Tokyo as in St. Louis. AI is very good at one instruction: do not deviate from the spec. There is no generative AI anywhere in this.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, August 28th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. The Lakers just sold to people who do not have the money.

The Lakers sold for $12.5 billion, the most anyone has paid for a sports team. Mark Walter bought them a year ago at a $10 billion valuation, and he said yes in under 72 hours to a call he did not expect. He needed cash. The NBA caps debt at $475 million a team and limits any single fund to 20 to 30 percent, so buyers cannot lever these deals the normal way. Only about three owners could repurchase their own teams today. Buyers also write off the price over 15 years, roughly $830 million a year in paper losses. A super, the fan who cares most and spends the most, makes a good owner. A fund does not. Cash flow beats championships every time.

2. Nobody ever called a spreadsheet synthetic math.

A literary agent pulled a multi-million dollar debut novel in July because it could not verify the client wrote it. A Stony Brook researcher found 20 percent of Amazon ebooks showed substantial AI help. The Authors Guild's answer is a human-authored certification that runs on the honor system. One agent says a badly written submission now feels like a breath of fresh air. Vibe creating, where a person brings the idea and builds it out with AI, is not fraud. Nobody called a Pixar film a synthetic cartoon either, and people still cried at Toy Story 3. Publishers have kept the price of a book flat for 30 years and grown nothing. Readers buy what they like.

3. The gag clause was the problem, not the gigawatts.

A company offered one Maysville family $26.8 million for 463 acres, about ten times market. The family has farmed it since 1848. They said yes, then learned it was a 2.2 gigawatt data center, and said no. The rest of the town signed $110 million in agreements. The county's development director is under an NDA that stops him naming the buyer, and public records point to Meta. Kentucky law made opponents sue their own neighbors. A commissioner race turned on 163 votes. Lead with relationship capital, meaning trust built before money changes hands, and financial capital follows. Meta already trains electricians for free with a guaranteed job at the end. Walking in openly with that offer costs nothing and would have changed everything.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, August 21st. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Burger King fixed the product and the company. It is still not different.

Burger King posted 8.5 percent same store sales growth in the US. Wendy's fell 7 percent. They rebuilt the Whopper with a premium bun and a box instead of a wrapper, hired the chef behind the Popeye's chicken sandwich, and the US boss put his phone number in social videos and took 3,300 calls. Franchise profit still dropped to about $185,000 a store from $205,000. McDonald's is five times bigger, so 8.5 percent off a smaller base is not the win it reads as. The magic triangle is product, company, and category. Burger King fixed two of the three. Nobody says let's go get a burger. They say are you up for In-N-Out. That is the whole difference.

2. Complaints are not a reputation problem. They are free category research.

Reddit is now the most cited website in AI answers. Its ad business did $762 million last quarter, up 64 percent. One agency sells brands 35 to 100 mentions a month starting at $2,500. A reputation package that removes or replaces negative content starts at $4,500. The software as a service subreddit banned promotional posts outright in June. There are four capitals: financial, reputation, relationship, and intellectual. Brands guard reputation capital and miss the other two. The complaint is almost never about your brand. It is about the category, and that is where new categories come from. Netflix came from late fees. Keurig came from bad office coffee. Indifference is the opposite of love, so the angriest person in the thread is the one worth answering.

3. A mascot is only worth buying if you can wait three years.

Crocs hatched Niles, a six foot crocodile, its first real mascot. Liberty Mutual went through Jim Henson's creature shop, six characters, and more than 160 ad concepts to land on a yellow fuzzball. Pillsbury put the Doughboy back at the center last fall and units rose 3.3 percent, cookies up 12.6 percent. System1 says a mascot needs more than three years of consistent use before it pays. Duolingo's owl went from 35,000 followers to 16.7 million over five years. Nobody in this story is buying the three years. A mascot works when it ties to the category, meaning the thing your customer is actually trying to get done. Aflac's duck tells you nothing about insurance. Commodity categories attract the most mascots for a reason.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, August 21st. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. The question is not how good your model is. It is whether we trust you.

Zuckerberg published a 6,500 word essay on Monday. Meta is releasing open weight models again, defending distillation, and starting a $1 billion fund for the towns around its data centers. He says the board should set model safety rules, not him. Meanwhile Meta is spending up to $145 billion on capital this year and $600 billion by 2028. As a category manifesto, a document that frames a problem and paints a new future, it works. The trouble is the give to get. You do not pay for Facebook, so you are the product, and the money comes from targeting you. He also holds super voting shares and can replace that board whenever he likes. Trust is the real bottleneck in AI, and Meta's record on it is thin.

2. Scarlet lettering AI is like shaming people for using spell check.

Pangram Labs checked nearly 57,000 LinkedIn items and found 41 percent of long posts and 30 percent of comments were entirely AI generated. On X it is 29 percent. On Reddit, 13. LinkedIn says it pulls 200,000 AI spam comments a day. It disputes the outside numbers and will not share its own. Detectors have scored writers who used zero AI at 60 percent. The Category Pirates version of writing is four parts: problem, point of view, plan, and polish. Use AI on plan and polish and you are smart. Outsource the problem and the point of view and you get slop. Nobody called the spreadsheet synthetic math. If a post is slop, hit unfollow. The worse problem on LinkedIn is the fake compliment before the pitch.

3. Airlines have the best pricing power they have ever had and are giving it away.

California wineries shipped 203 million cases last year, down 11 percent. In the air it runs the other way. United will pour nine and a half million glasses this year and has put $35 million into wine in two years. Jefferies says a 10 percent drop in passenger weight would lift American's earnings per share 11.7 percent. Fuel is 19 percent of what these airlines spend. Starlink is on 1,100 planes, and passengers are booking connecting flights on purpose to get one. The super of one is the super of nine, meaning the guy who is fanatical about Brunello speaks for nine more like him. Ask him what he drinks. Airlines charge eight dollars for bad Wi-Fi and give the good wine away free.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, August 14th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. The best turnaround in casual dining ran on Wi-Fi, not AI.

Brinker International stock is up more than 500 percent since June 2022. Twenty straight quarters of same store sales growth. The CIO told the journal his team is not all in on AI. He bought a two year Wi-Fi overhaul across 1,200 restaurants, 23,000 iPads, and 9,000 kitchen touch screens. He got rid of the robot servers. Census data says under 20 percent of small firms use AI at all, against 37 percent of big ones, and that gap has not moved in five months. That is a leapfrog window. Market the problem, not the product, which means starting with what is broken instead of the shiny tool. A restaurant's problem is turns and tickets. Nobody needed a robot. They needed a button on the table.

2. Your next power company might be sitting in your backyard.

Base Power is three years old. It just closed a billion dollar round at a $13 billion valuation. Over 23,000 batteries are in the ground across Texas and the Chicago area, about 100 installs a day. Base owns the battery, sells you the power, then sells the stored power back to the grid when demand spikes. El Paso Electric is paying homeowners $250 a battery to test whether it can stop building for peak. Residential power prices are up 42 percent in five years. This is category design, which means building a new market instead of fighting for a slice of the old one. Utilities have been a government protected monopoly. The homeowner here is the customer, not the product, and at peak they are the seller too.

3. The degree is not the asset. The apprenticeship is.

Twenty undergrads at Indiana University run a real estate fund called Sample Gates Management. They have raised $12 million from outside investors, including one $700,000 check. This summer they sold a warehouse outside Indianapolis for 65 percent gross profit in 16 months. None of them get paid. Meanwhile the New York Fed says 41.5 percent of recent grads are underemployed. AI is making knowledge and execution close to free, so the knowledge worker, the person paid to apply what they know inside somebody else's system, is losing value fast. The creator capitalist, the person who makes new value with AI, is not. Pick the shortest path to an apprenticeship. The student who wrote the journal article about these kids is doing exactly that.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, August 7th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Alphabet's best quarter ever, and the stock fell.

Second quarter revenue was $119.8 billion, up 24%. Cloud grew 82% with a backlog of $514 billion, up from $460 billion in one quarter. Then free cash flow went negative for the first time ever, about negative $6 billion, because CapEx hit $44.9 billion, double last year. The same filing shows $242 billion in cash and securities and $186 billion in trailing operating cash flow. Cloud added $11 billion of new revenue this quarter. Search added $8.3 billion. A category king just won a second category, which almost never happens. Christopher's reminder: Amazon lost money until 2003, and its stock is up 300,000% since the IPO. One chart cannot hold all that.

2. Everyone else is bolting AI onto people. Fox is bolting people onto AI.

Fox spent 20 years at Skadden, then moved to Kirkland and Ellis in 2009 when it barely did M&A. Last year Kirkland became the first firm to bill $10 billion in a year. Now he has co-founded Irving, fewer than 10 lawyers and engineers, already advising on live deals in stealth. Kirkland set aside $500 million for its own AI platform. Freshfields partnered with Anthropic, and Cleary Gottlieb bought a legal tech firm outright. Eddie says the middle of the pyramid is where the value leaves, because associates were always the margin, not the expertise. McKinsey already bills 25% on outcomes instead of hours. The billable hour is the category being rebuilt.

3. You can do good and make 12x.

Optus Bank in South Carolina started in 1921. MF Bank in North Carolina started in 1907 and is the second oldest Black owned bank in the country. They are merging into the largest African American owned financial institution in the United States: $1.27 billion in assets, a deal worth more than $105 million. James Sills runs the combined bank. Five years ago, right before Eddie and Christopher wrote about justice deposits in Harvard Business Review, which asked companies to park treasury cash in Black owned banks instead of writing checks, MF traded under $4 a share. It is near $48 now, more than 12x. Netflix put in more than $100 million. PayPal put in $500 million. Nobody gave anything away.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today! 

Recorded Friday, July 31st. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. New York said no. Boise said yes 48 years ago and is still cashing the check.

On July 10 New York became the first state to ban new data centers. Governor Hochul froze permits for up to a year, and lawmakers are pushing for three. In 1978 four people started a memory company in the basement of a dental office in Boise. Micron now employs 6,000 people and is the third largest private employer in Idaho. Its newest fab is a $15 billion bet, the largest private investment in state history and the first new memory fab in America in 20 years. That is 2,000 direct jobs, about 17,000 counting everyone it pulls along. New York has already lost $11 billion in taxes as millionaires left, and it blocked Amazon before this. Eddie says count the blessings, not just the burdens.

2. Apple raised prices and Eddie says buy anyway.

The Mac Studio with the M3 Ultra jumped $1,300. The M4 Max went up $500. Even the entry level MacBook is up $100. Tim Cook calls the memory shortage a 100 year flood. DRAM and NAND rose about 60% last quarter and could climb another 13 to 18% this quarter. The iPhone is next this fall. Christopher says the bigger move is on-prem coming back after 30 years, because no bank wants its work sitting on somebody else's servers. Eddie calls Apple missionaries, not mercenaries, the way Netflix was when it raised prices 60% in 2011 and spent it on more to watch. Watch Dell: infrastructure grows 40% while consumer grows 5%. Upgrade before fall.

3. The category makes the career.

The Costco cashier is 60, has 40 years in, and started at Price Club at $5.85 an hour. He makes $32.90 now and his 401k cleared a million. Costco's CFO says many thousands of hourly workers have done it. Turnover runs about 7% a year against a retail average of 60%. Costco marks goods up 15% when the rest of retail takes 35 to 40%. Christopher's line: the category makes the company, which makes the career. Xerox did almost $22 billion in 2011 and is on track for about $7 billion this year. Same people, better at their jobs, worse futures, because the category shrank. Pick the S curve on the way up.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, July 17th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. New York said no. Boise said yes 48 years ago and is still cashing the check.

On July 10 New York became the first state to ban new data centers. Governor Hochul froze permits for up to a year, and lawmakers are pushing for three. In 1978 four people started a memory company in the basement of a dental office in Boise. Micron now employs 6,000 people and is the third largest private employer in Idaho. Its newest fab is a $15 billion bet, the largest private investment in state history and the first new memory fab in America in 20 years. That is 2,000 direct jobs, about 17,000 counting everyone it pulls along. New York has already lost $11 billion in taxes as millionaires left, and it blocked Amazon before this. Eddie says count the blessings, not just the burdens.

2. Apple raised prices and Eddie says buy anyway.

The Mac Studio with the M3 Ultra jumped $1,300. The M4 Max went up $500. Even the entry level MacBook is up $100. Tim Cook calls the memory shortage a 100 year flood. DRAM and NAND rose about 60% last quarter and could climb another 13 to 18% this quarter. The iPhone is next this fall. Christopher says the bigger move is on-prem coming back after 30 years, because no bank wants its work sitting on somebody else's servers. Eddie calls Apple missionaries, not mercenaries, the way Netflix was when it raised prices 60% in 2011 and spent it on more to watch. Watch Dell: infrastructure grows 40% while consumer grows 5%. Upgrade before fall.

3. The category makes the career.

The Costco cashier is 60, has 40 years in, and started at Price Club at $5.85 an hour. He makes $32.90 now and his 401k cleared a million. Costco's CFO says many thousands of hourly workers have done it. Turnover runs about 7% a year against a retail average of 60%. Costco marks goods up 15% when the rest of retail takes 35 to 40%. Christopher's line: the category makes the company, which makes the career. Xerox did almost $22 billion in 2011 and is on track for about $7 billion this year. Same people, better at their jobs, worse futures, because the category shrank. Pick the S curve on the way up.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, July 17th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Hand the kid the stock, not the check.

Invest America accounts are live. Every child born between 2025 and 2028 gets $1,000 in an S&P 500 index fund. Gwynne Shotwell and her husband are putting SpaceX stock into more than 2 million accounts for kids 11 to 17 in less affluent areas, roughly a sixth of her 12.6 million shares. A week earlier Micron put in $250 million, seeding up to a million accounts and matching employees up to $1,000 a child. Eddie calls it charitable investing, where the gift is an asset that compounds instead of an expense that gets spent. No nonprofit sits in the middle taking a cut. The S&P has averaged about 10% a year, and no kid can touch it until 18. Eddie thinks old school giving shrinks from here.

2. Everyone is arguing about 30 days of hot dogs.

FIFA projects $17 billion in US GDP and 185,000 jobs. Economists call that less than a tenth of 1% of the economy. Both sides count tickets, hotels and food over 30 days. Brand Finance values Brand America at $37.3 trillion, the most valuable nation brand on earth, and it fell 7% last year. That is $2.6 trillion gone, the steepest drop of the 193 nations they track. Then millions of visitors showed up and filmed Buc-ee's and free refills for the folks back home. Christopher calls it a lightning strike, a stunt so big the whole world talks about it, stacked on top of citizen journalism nobody paid for. Over 170 million people already want to move here. Number two is not half that.

3. To win in coffee, do not sell coffee.

Black Rifle Coffee was started in 2014 by a Green Beret named Evan Hafer. It does about $390 million a year and went public at $1.7 billion. It moved ad money into its own shows and built a quarter million coffee club subscribers. For July 4th it towed the largest American flag ever and cut a 16 minute film about making it, with no coffee anywhere in it. Christopher says the company built its category around a super consumer, its heaviest and most passionate customer, not around a product. The super of one is the super of nine, so one fan's taste predicts nine more like him, and they text it to each other. Starbucks could have claimed America's coffee for decades. It never did.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Wednesday, July 8th. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Microsoft just walked into the lowest margin business in tech on purpose.

Microsoft launched a new company called Microsoft Frontier. $2.5 billion, 6,000 engineers, sent inside other companies to make their AI work. That is consulting, the lowest margin business in tech. Microsoft is down about 20% this year and has shed over a trillion dollars from its peak while spending $190 billion on capital. Amazon put a billion into the same idea two years ago. OpenAI and Anthropic followed. Wall Street covers companies, not categories, so it read this as weakness. Christopher reads it as the startup phase of enterprise AI, when a software company is really a consulting shop with some tech tied to it. The consultants find the use cases. The use cases tell you what to build. Accenture and IBM Global Services left that door wide open.

2. Elon doesn't want a phone company. He wants the spectrum.

Starlink has more than 10,000 satellites and more than 10 million home broadband customers in six years. Its IPO filing puts the Starlink Mobile market at $740 billion. The Philippines just started connecting phones straight to the satellites, no towers. Eddie does not think Elon wants T-Mobile. He wants the spectrum. T-Mobile carries about $23 billion in overhead, and cutting two thirds of it at a 20 multiple is roughly $320 billion of value. Christopher calls it bundling, the Microsoft Office move: take four separate categories and declare them one. X Money is already in beta with 6% on savings. Your phone bill is the payment you never stop making. Mobile is the beachhead, not the prize.

3. Europe is fighting a hundred year old machine in court.

175,000 Europeans die from heat every year, says the World Health Organization. Paris hit 104 degrees last week. Only 5% of British homes have air conditioning. France is 25%. Italy is barely half. Japan is 91%, South Korea 86%, China 60%. On this one technology, Britain sits closer to India at 5% than to Japan. In Paris a man on a ventilator spent two years in court for the right to cool his apartment. Eddie says the fight stopped being about math a long time ago, and you cannot win an ideological fight with a spreadsheet. So market the problem, not the product. The problem is your grandmother in a 104 degree flat with a fan. America is running the same fight right now over data centers.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, July 3rd. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. State Farm is cutting the thing that made it a giant.

Anyone who stays past 2027 signs a new contract. Lower commissions if you miss sales targets two years running. No deferred comp. No health benefits. Agents say their income could fall 40%. The exit is a buyout between $50,000 and $300,000, paid whenever State Farm feels like it. Progressive, meanwhile, sells more than half its auto policies direct. No agent. All AI. State Farm is cutting by contract when it should be cutting by behavior. Some agents are proactive and some are reactive, and the proactive ones are Superconsumers, the small group who care the most and produce the most. Find those agents, hand them AI, let the rest sort themselves out. Humans still love humans.

2. P&G is selling the tile when it should be selling the problem.

P&G already owns laundry. Sixty percent of the US detergent market, and Tide alone is close to 40. Then it launched Tide Evo, a three inch square of dry detergent fibers, six layers deep, more than a decade in development. Forty-two tiles run about $20 at Target, 47 cents a load. Forty-two pods run $13. Roughly double the price, for the format that replaces the one they spent years teaching you to buy. Since the March launch, Evo has taken six tenths of one percent of the category. The tile's real trick is taking the water out of detergent. Fewer trucks, less shelf space, margins that could run near 70%, and a box an older customer can still lift. Nobody has framed, named and claimed that problem yet.

3. America has a supply problem. Singapore had a category problem.

America is short somewhere between one and five million homes. Starter homes used to be a third of everything built. Today they are 10%. The fix everyone debates is zoning, lot sizes and red tape. Singapore built something else: public housing that stacks senior apartments, a medical center and a preschool into one vertical village. Old people next to four-year-olds on purpose. Life expectancy is up about 20 years since 1960. Centenarians doubled in a decade. Singapore is the sixth blue zone on earth and the first one a government built from scratch. The loneliest people sit at both ends of the barbell, and the older residents' spending pays for services the younger ones could never afford alone.

Want the whole thing? Founding members get every mini-book we've ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners. $375 a year, about a dollar a day. Monthly is $20. You've done dumber things with $20.

Subscribe today!

Recorded Friday, June 26. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week's episode.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

1. Wall Street says Musk overpaid for Cursor. We think it was a bargain.

SpaceX hit $2.5 trillion by Tuesday and passed Amazon into the top five in America. Then it bought Cursor, the AI coding startup, for $60 billion in stock. Cursor was worth about $29 billion in November, so Musk paid double in a few months. Four MIT students built it in 2022, the CEO is 25, and a team in the low hundreds already throws off billions in revenue against Claude Code and Codex.

There are two kinds of acquisitions.

One buys a rival in a flat category and strips out the duplicate cost. That is what most people picture.

This is the other kind. You buy the king of a category about to explode.

Cursor’s founder said he built a new type of software, a category for building AI software with AI. The press fixated on the price and missed the sentence.

Microsoft bought DOS. Google bought YouTube. Facebook bought Instagram. Each one looked overpriced for the same reason.

2. Trillion-dollar companies can't get power approved. A million households fixed it with a balcony

Two weeks ago we said the power layer of the AI stack is nearly empty, with about $156 billion of US data center projects blocked or delayed. In Germany, more than a million households installed plug-in solar. You hang panels on a balcony, plug into a wall outlet, and run in under an hour. Each one is capped around 800 watts.

Utah went first last year. Several states have legalized it since, and more than 30 are now considering it.

A starter kit runs a few hundred dollars and pays for itself in a few years where power hits 30 to 40 cents a kilowatt-hour.

Rooftop solar stayed a luxury because of permits and cost. Strip those away and a new category shows up: distributed, consumer-owned power at Costco prices.

3. Chick-fil-A makes four times what KFC does per store, and it's closed on Sundays.

KFC is 74 years old, 34,000 restaurants, over 150 countries, and just announced the biggest overhaul in its history. New sauces, a boba drinks line called KWENCH, interiors built like an Apple store crossed with a Vegas sphere, new logo. Same week, Yum sold Pizza Hut for $2.7 billion to bet harder on chicken.

KFC has more US locations than Chick-fil-A, over 3,600 stores, under $2 million a year each. Chick-fil-A does about $7.5 million per store. Four times the money, with one fewer day a week, because it closes on Sundays.

KFC’s problem was never store count. It’s the category design inside each box.

Boba and screens redecorate the magic triangle without refreshing it.

Chick-fil-A’s edge is the ownership model: private, anti-franchise, a $10,000 buy-in, an acceptance rate under 1%, two drive-thru lanes, a menu tight enough to keep the line moving.

KFC already ceded Southern fried to Popeyes and the mega category to Chick-fil-A at home. Its real weapon is a global footprint and the one food that travels everywhere. Bring the best foreign menus back and win on what makes it different.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

We just told you what is happening to three categories. The bots help you figure out what it means for yours. Reading the news is the easy part. Turning it into something actionable is the most important piece, and it is exactly what The Pirate Eddie Bot and Pirate Christopher Bot are built for. They jam with you 24/7, they come with the founding tier, and they never get tired of your follow-up questions.

Take this to them this week:

* Sort your next big bet into consolidation or acceleration. Ask the bots which moves in your space buy a category king and which only buy cost savings. Musk just paid $60 billion to own the top of a stack he didn’t build.

* Find the abundance play in your category. Tell the bots what you sell and have them spec a version that gets cheaper and better the more people use it, the way a million balconies beat one. Then ask where the network effect kicks in and how this is relevant to you.

* Stress-test your own glow-up. Tell the bots what you are about to change and have them split it into surface redecoration and real category design. KFC is spending its biggest budget ever on boba while Chick-fil-A makes four times per store.

Not a founding member yet? You can join here.

What’s coming up on Pirate Street Journal

Every week, we drop the podcast. Three topics, thirty minutes, one cowbell.

Once a month, we publish a written deep dive, the kind of category analysis you cannot get anywhere else. That one is for paying subscribers only, monthly and founding.

Two ways to climb aboard now:

Monthly subscriber: $20/month. You’ve done dumber things with $20.

Founding subscriber: $375/year. For about a dollar a day, you get every mini-book we’ve ever written (300+), every audiobook (30+), digital copies of all seven of our Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners for category building.

Subscribe today and start jamming with the bots.

Recorded Friday, June 12. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week’s episode.

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.categorypirates.news/subscribe

1. Gartner grew revenue again last year. Wall Street wiped out $30 billion anyway.

For 40 years, Gartner was the company you paid to tell you what tech to buy. It peaked at $551 a share in November 2024. This week it trades around $155, a 70% collapse, with market cap down from roughly $42 billion to about $10 billion.

The revenue still grows. That is not the point. For a growth company, value is investors’ read on the category's going-forward potential, and Wall Street has decided that Gartner does not have one. The moment you can ask an AI which CRM to buy and get a real answer for free, a six-figure research subscription starts to look like a fax machine.

Roger Martin pegs true strategy at about 3% of what the big consulting firms sell. The other 97% is best practices, benchmarking, gap analysis. Monkey see, monkey do. That is exactly what AI commoditizes first. The value moved to whoever can create net-new knowledge instead of repackaging the old kind.

2. Thirty vendors paid in, consumers paid $250 at the door, and the marketing event turned a profit.

An aesthetics company called Orange Twist ran a Lightning Strike in Newport Beach called TwistX. A mid-six-figure event at the Hyatt that turned a profit. Vendors covered about a third (30 brands paying to get in front of buyers), consumers covered about a third ($250 a head at the door), and on-the-spot treatment bookings covered the rest. Paid media for the whole thing ran maybe four figures.

A Lightning Strike concentrates a year of marketing budget into one moment instead of spreading it thin across twelve. Pulled off right, it pays for itself, which flips marketing from cost center to profit center. Almost nobody does it.

It also shows where consumer money goes when everything digital gets cheaper by the week: AI, agency, and the body you live in. Two GLP-1 drugs now do about $55 billion a year at 80% margins, matching the combined revenue of the top four AI companies at half the margin. The one thing a model cannot hand you is what you see in the mirror.

3. Teen unemployment is actually lower than it was in 1979. The Wall Street Journal calls it a crisis.

The Wall Street Journal ran a crisis headline: summer hiring for teens is the weakest since the government started counting in 1948. Then look at the data. Teen participation peaked near 58% in 1979, and the share holding a job has fallen from 49% to 31%. But teen unemployment is 14% today, down from 16% in 1979. The kids who want work are finding it faster than their parents did. New York City’s summer program drew 200,000 applicants for 100,000 slots and had to run a lottery.

The decline is almost entirely teenagers opting out. The edge a wealthy kid used to buy with an unpaid internship now costs $20 a month for anyone with a laptop. The gate the Journal is mourning just blew open.

Run the math the way Pirate Christopher did. A young person who banks $100,000 and parks it in the S&P 500 at a 10% historical average is worth about $1.7 million in 30 years. Wealthy people own things that work for them. That lesson is finally cheap enough for everyone.

What’s coming up on Pirate Street Journal

Every week, we drop the podcast. Three topics, thirty minutes, one cowbell.

Once a month, we publish a written deep dive, the kind of category analysis you cannot get anywhere else. That one is for paying subscribers only, monthly and founding.

Two ways to climb aboard now:

Monthly subscriber: $20/month. You’ve done dumber things with $20.

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Recorded Friday, June 12. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week’s episode.

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.categorypirates.news/subscribe

On June 12, SpaceX is going public at $135 per share and a $1.75 trillion valuation.

4% of total shares are being offered. Of those, 30% have been allocated for retail investors to buy directly at the $135 IPO price. The standard retail allocation in a mega-cap IPO is 5 to 10% of shares, with the overwhelming majority reserved for large institutional buyers like pension funds and mutual fund managers.

SpaceX is tripling that, which is unusual.

At a $75 billion raise, that is roughly $22.5 billion in shares flowing directly to retail. More than many entire IPOs.

One of SpaceX’s lead underwriters told Reuters they had never seen anything like the expected retail demand.

Both Anthropic and OpenAI have also filed to go public sometime this fall.

It is a mad rush to raise capital to fund the AI infrastructure buildout. Valuations defy gravity and become a moving target as ARRs change every month and cash-burning businesses like xAI flip to cash-flowing with the stroke of a single deal.

IPOs Are Dangerous, Right?

Truist analyst Keith Lerner pulled the data on 30 major IPOs from the last 15 years.

The names you have heard of. Facebook. Uber. Palantir. Snowflake. CrowdStrike. Even the biggest winners experienced massive take-downs in their first year.

The median Year 1 max drawdown across all 30 IPOs was 54%. The average was 55%. Robinhood dropped 90% from its peak. Rivian dropped 88%. Lyft dropped 79%. Uber dropped 68%.

That is just the drawdown. Jay Ritter at the University of Florida has tracked every U.S. IPO since 1980. Over three years, the average IPO underperforms the market by 23.4%.

It is a feeding frenzy for the sharpest sharks on Wall Street. IPOs get bid up by retail enthusiasm, then shorted on the way down. The average Joe and Jane gets whacked.

So if you are sitting at home watching the SpaceX IPO ads roll across your screen, the safest move is to: remember the data.

Except.

It turns out most of America will eventually invest in SpaceX (and likely Anthropic and OpenAI) whether they realize it or not.

62% of Americans own stock as of 2024. The vast majority of that ownership is indirect, sitting inside 401(k)s, IRAs, S&P 500 index funds, and total market funds. The S&P 500 alone is tracked by tens of trillions of dollars in passive money.

To get into the S&P 500, a company is supposed to make money. The sum of its four quarters of earnings has to be positive on a GAAP basis, and so does its most recent quarter. That rule is decades old. It is the reason Tesla sat outside of the index until the end of 2020, years after it had become one of the most valuable companies on earth.

That rule is about to be broken on purpose for some of the indices.

The other major indexes have already moved. Nasdaq’s Fast Entry rule, effective May 1, 2026, cut the Nasdaq-100 waiting window from roughly three months to 15 trading days. CRSP, the index behind Vanguard’s funds, introduced an alternative path that could place SpaceX in the Russell 1000 within five trading days of the IPO.

The S&P 500 refused to change the rules.

So is this bad?

Not necessarily. There will be many Category Kings of the AI era. SpaceX is currently one of them. So who will be the Category Kings of AI? And how does the AI game board look through the category lens?

Let’s look at who the Category Kings were across the value stack in the PC era, the Dot-com era, and the Social/Mobile era. The pattern tells us what to look for now.

Remember, we’re not financial advisors, and this is not personal financial advice.

We’re presenting you with data through the category lens to give you a different POV on how categories rise and fall. And in this case, how the mega tech stack categories evolve over time.

The Pirates 6 Layer Rum Cake

Jensen Huang sells the AI economy as a five-layer cake. Energy at the bottom. Chips next. Cloud infrastructure above that. Models on top of cloud. Applications at the very top. Stack them. Slice them. Invest in them.

It is a useful frame.

It is also incomplete.

The Pirates expanded the cake to six layers and simplified the language. Power instead of Energy. Internal Hardware instead of Chips. Infrastructure stays. Operating System instead of Models, because the OS is what every era’s category designer has always called the layer that makes everything else work. We added a layer Jensen left out. End-User Hardware. The device the customer touches. The PC, the phone, the device, the App Store toll booth. Applications stays at the top.

Six layers. Power, Internal Hardware, Infrastructure, Operating System, End-User Hardware, Applications.

The reason Jensen’s cake matters less than the Pirates Cake is that Jensen’s cake describes one era. The Pirates Cake describes every era. PC. Dot-com. Social/Mobile. AI. Same six layers, different category leaders.

Before digging in, three rules guide the analysis.

Rule 1. Pay close attention to multi-era category kings.

Microsoft won the PC era. Microsoft won the Dot-com era. Microsoft is in the top three of the AI era opening act, four decades after going public. A $10,000 investment in Microsoft at its 1986 IPO, held through every crash and every doubt, was worth approximately $80 million by December 31, 2025.

Roughly 8,000x.

A 26% compound annual return for forty years.

A $10,000 investment in Apple at its 1980 IPO was worth approximately $25 million by the same date.

Roughly 2,500x.

A 19% compound annual return for forty-five years.

A $10,000 investment in Apple the day the iPhone launched in June 2007 was worth approximately $570,000 by December 31, 2025. Roughly 57x in eighteen years.

What’s our point? There will be multiple Category Kings. You can still do great, even if you miss it early.

Multi-era winners compound through platform shifts, recessions, market crashes, leadership changes, and competitor onslaughts.

Rule 2. Hardware wins first. Then software.

Every era opens with a hardware-led leader. IBM in PC. Intel in Dot-com. Microsoft in Social/Mobile, which is the exception that proves the rule because Microsoft was the prior era’s vertical integrator extending its run.

Now Nvidia in AI.

The opening years of every era belong to whoever ships the picks and shovels. Always. The closing years belong to whoever owns the operating system and the layers closest to the customer.

Rule 3. Multi-era winners own the most valuable areas of the stack.

Not the most layers. The most valuable ones. Operating Systems are always one of them. End-User Hardware or Distribution into the customer is usually another. Applications on top are the third. The App Store alone takes 30% of every transaction every developer makes on the platform forever. That is the most valuable layer in the matrix, and Apple owns it outright. The closer to the customer, the higher the multiple. Internal Hardware is bigger in revenue. End-User Hardware and Apps are bigger in compounding value.

Now walk the matrix.

The Era Matrix

Companies as rows. Layers as columns. Each filled dot is a real owned business in that layer. The two market cap columns show the average across the first three years of an era and the last three years. Teal marks the first-window leader. Pink marks the last-window winner. They are never the same company.

PC era · 1985 to 1999

The first-window leader was IBM at 79.9% share of named-player market cap. IBM owned three layers. Internal Hardware in mainframes and servers. Infrastructure in enterprise services. End-User Hardware in the original IBM PC and the ThinkPad. IBM won the opening for one reason. The IBM PC defined the category. Every other PC was an IBM clone. The hardware that ran the era belonged to IBM.

The last-window winner was Microsoft at 41.9% share. Microsoft owned three layers. Operating System in Windows. Distribution through OEM bundling deals that put Windows on every PC sold. Applications in Office. Microsoft did not make hardware. Microsoft made the thing every piece of hardware needed to be useful. By 1999, Windows ran on 95% of PCs sold. Office had no real competition. Microsoft was, briefly, the most valuable company in the world.

IBM dropped to 17.6% by the close. The hardware category gets the party started, and Operating Systems take the stage later.

Dot-com era · 1995 to 2002

The first-window leader was Intel at 25.1% share. One layer. Internal Hardware. Every server, every workstation, every desktop running the web ran on Intel chips. The web was a hardware buildout before it was anything else. Cisco rode the same wave at 11.4%. IBM held on at 16.8%.

The last-window winner was Microsoft at 24.7% share. Same Microsoft. Same three layers. Same Operating System. Same Distribution. Same Applications.

This is the most important data point in the matrix. Microsoft is the only multi-era, multi-category winner in modern technology history. Won PC. Won Dot-com. Did it by holding the Operating System layer through the platform transition. Windows ran the local PC. Internet Explorer bundled into Windows became the way most people got to the web. Office moved from the desktop to the web. Same playbook. New surface. Same compounding.

Intel finished Dot-com at 20.1%. Cisco at 16.8%. Both are still huge. Both are about to fall away in the next era. The hardware leader of one era is rarely the hardware leader of the next.

Social/Mobile era · 2004 to 2020

The first-window Category King was Microsoft at 47.0% share. The same Microsoft. Two consecutive era wins and into the category lead of the third era’s opening act. This is what Rule 1 looks like on a chart.

The last-window winner was Apple at 25.3% share. Apple owned four layers. Internal Hardware in Apple Silicon. Operating System in iOS. End-User Hardware in the iPhone and the App Store. Applications in Music, Maps, Messages, Camera, Photos. The most complete vertical integration in technology history.

Apple owned the most valuable layers of the stack. Operating System. End-User Hardware. Apps. The three layers closest to the customer.

Intel collapsed from 21.9% opening share to 3.9% closing share. The hardware leader of the prior era lost an entire era’s worth of share. Cisco never recovered from Dot-com. Microsoft, the vertical integrator, did. Same pattern as the IBM-to-Microsoft handoff. Hardware leaders fade when the layers they do not own start to compound.

Nvidia opened Social/Mobile at 1.1% and closed at 3.2%.

Few people saw what they were going to do next.

AI era · 2024 to 2026

Nvidia is the first-window Category King at 22.3% share. One bingo point in Internal Hardware. Same role Intel played in Dot-com. Same role IBM played in PC.

Behind Nvidia: Apple at 20.3% with four layers. Microsoft at 19.6% with three layers. Alphabet at 12.9% with five layers. The vertical integrators are already in position. The last-window Category King has not declared itself yet. The matrix says it will not be Nvidia, if they don’t add more points on the Bingo card. The matrix says it will be one of the companies with the most valuable and/or the most points on the Bingo Card. Ideally, it will own the Operating System plus the layers closest to the customer.

The question is which one.

Head to Head in the AI Era

We have a few hypotheses about what might happen next.

Hypothesis 1. Low-regulation states can be the Category King in US power.

China is adding the equivalent of the entire US grid every few years.

In 2025, China added 543 gigawatts of new capacity across all technologies. That single year of additions is 12% more than all the power plants combined in India. China’s total power generation capacity is now 3.75 terawatts. The US sits at 1.3 terawatts. Roughly three times the US. China is investing more than $500 billion per year in energy buildout. The US grid grew by a fraction of that.

Regarding Power, the US federal government is being slow and stupid.

Poorer, but prescient states can leapfrog their legacy.

The regulation, the permitting, the environmental review cycles, the local NIMBY opposition. None of it is calibrated for an AI era that needs power yesterday. Microsoft had to revive Three Mile Island because building a new nuclear plant from scratch is essentially illegal.

So xAI built Colossus 1 in Memphis, Tennessee. You would think they would be in the pole position for Colossus 2.

Tennessee regulators slow-walked the gas turbine permits.

Mississippi said yes.

Mississippi’s governor announced xAI’s $20 billion investment as the largest single investment in Mississippi history. Tennessee just took Starbucks and In-N-Out headquarters.

The states willing to build will win the AI era.

California’s regulatory structure makes it effectively impossible to build the hyperscale facilities (500 MW+) that are now the standard for AI infrastructure.

Developers in California top out around 50 MW. In Virginia and Texas, projects routinely run ten times that size.

Every transmission line, backup generator, and power connection triggers CEQA environmental review, adding 18–36 months to any project timeline.

The result: Silicon Valley has 489 MW of total data center capacity. Northern Virginia has 4,039 MW. That’s an 8x gap. And Virginia added over 1 GW of new capacity in 2025 alone. California added roughly 20 MW.

Texas is booming with abundant land and no state income tax.

Google committed $40 billion to Texas data center infrastructure through 2027. Microsoft is scrambling to secure natural gas-backed sites in Texas and West Virginia. No comparable investment is flowing into California.

You can see smaller, speedier governments winning in Asia.

Korea is the only country in the world other than the US with more than one trillion-dollar market cap company. Samsung Electronics crossed $1 trillion in May 2026. SK Hynix crossed three weeks later.

Both built on the DRAM and HBM memory categories that feed the AI hardware buildout. Two trillion-dollar companies in a country of 51 million people, mostly because they own a critical category in the AI value stack.

Bloomberg Economics forecasts Samsung and SK Hynix combined performance bonuses alone will grow from 4 trillion won in 2026 to 30 trillion won by 2028. South Korea’s finance minister is publicly debating how to use the tax windfall, with talk of creating a sovereign wealth fund to absorb it.

Korea Herald is reporting Samsung and SK Hynix combined tax revenue over the next three years is projected to roughly equal half of South Korea’s national government debt.

Two companies.

Three years.

Half the country’s debt.

And Korea’s debt-to-GDP ratio is already only 49%, less than half the US level. The AI tax windfall is hitting a country that did not need it. That is what owning a single category in the AI value stack can do for an entire economy.

Europe and high-regulation US states lose.

California cannot build a 170-foot bridge in under three years. California is not going to build power plants and data centers in the AI era. Europe has not had a meaningful new technology company at scale in two decades.

Both will be left behind.

Western Europe, sadly, is becoming a place locked in the past, where tourists from the future visit.

Hypothesis 2. Today, Alphabet and Muskonomy appear poised to win.

Both are going for full bingo.

Both own or are acquiring more layers than the rest of the field. Alphabet has the cash flow to solve the layers they do not yet own. Musk has the ability to raise immense amounts of capital just on the cult of his personality.

Hypothesis 3. Expect weird M&A and JVs.

The enemy of my enemy is my friend.

Microsoft and OpenAI was the masterstroke of the era’s opening years. And now reportedly fraying. Musk had public beef with Anthropic, but his beef with OpenAI was bigger, so he cut a $1.25 billion per month deal with Anthropic for Colossus capacity.

Google just cut a deal to pay xAI over $900 million per month for compute. This seems odd given they are both going for Bingo, but then again Google owns a healthy chunk of SpaceX.

Solo players will shrivel.

Standing alone with one or two layers is not a path to winning. In the mega categories. It is a path to being acquired, merged, or marginalized.

With these hypotheses in mind, here is what must be true for each player to be the AI era Category King.

Nvidia

Nvidia has one spot on the bingo card. Proudly

Internal Hardware. But their timing is awesome right now.

Here’s what must be true for Nvidia to win.

Nvidia must hope that the Internal Hardware phase is the longest of any era we’ve seen. This is the bet they are making, which is investing within the Internal Hardware part of the stack. Nvidia’s taken their monster cash flows and invested $2 billion into Lumentum, which is Optics and Components. They invested $3 billion into Corning for fiber optic cables. They invested $2 billion into Synopsys, a leading electronic design automation firm. And a $2 billion investment into Coreweave, to help build out clouds. If Internal Hardware’s reign lasts a long time, Nvidia will be fine.

While they aren’t personally moving into other areas of the bingo card, Nvidia has committed $53 billion in about 170 deals across the value stack.

* Power: $2.1 billion into Iris Energy

* Operating Systems: $100 billion commitment to OpenAI, $10 billion into Anthropic and $2 billion into xAI

* End User hardware: They participated in a $1 billion Series C into Wayve, a UK autonomous vehicle company. They also invested in a $675 million dollar round into Figure AI robotics.

* End User applications: $50 million into Recursion Pharmaceuticals, $50 million into Kore.ai, a conversational AI for enterprise, participated in a $141 million Series B for Hippocratic.ai, a medical-grade LLM.

Equity stakes are great, but they are not businesses they own.

Nvidia’s bet is that hardware demand stays insatiable for years. The playbook from here is the Apple playbook of the 2010s. Stock buybacks. Dividends. Returning cash to shareholders. Growing the stock through financial engineering rather than category expansion.

Nvidia is going to be enormous. And unlikely to be the era mega-category winner.

OpenAI

OpenAI has two spots on the bingo card.

Operating System in GPT. Applications in ChatGPT and enterprise products.

Here’s what must be true for OpenAI to win.

The rumored chip program would add Internal Hardware. Stargate would add Infrastructure. ChatGPT has consumer mindshare but does not own end-user hardware. Jony Ive left Apple to join OpenAI, and he’s building a consumer AI device. The Apple deal would add Distribution into End-User Hardware.

That’s a lot to do, while trying to out-innovate Anthropic.

And the rumored trust issues with Sam Altman make partnerships tricky. If the capital markets tighten, OpenAI does not have Alphabet’s cash flow to buy their way in.

Anthropic

Like OpenAI, Anthropic has two spots on the bingo card.

Operating System in Claude. Applications in Claude.ai, Claude Code, and enterprise products. Unlike OpenAI, Anthropic had a rumored profitable quarter and ARR that seems to grow each month.

Here’s what must be true for Anthropic to win.

Anthropic has a lot of the bingo card to fill, with cash flow that is promising but not yet present. This means partnerships are the default.

The Colossus deal with Musk gives Anthropic Infrastructure access without owning it. The enterprise embedding strategy through Claude Code, Claude in Excel, and Claude in Chrome is a credible path to being inside every workflow rather than owning a consumer surface.

The math of building Power, Internal Hardware, Infrastructure, End User Hardware and Applications organically is brutal. The math of joining one of the bingo contenders is easier.

Meta

Meta has three spots on the bingo card.

Infrastructure in their own data centers. End-User Hardware in Ray-Ban Meta and Quest. Applications in Facebook, Instagram, and WhatsApp.

Here’s what must be true for Meta to win.

Meta must solve for power, but as important, Meta would need to build or buy a real Operating System. Llama is a model, not an OS layer the way iOS or Gemini is. Meta would need Internal Hardware beyond MTIA.

This is where all the cash they burned on AR/VR would have come in handy. These are a lot of spots on the bingo card to invest or buy their way into.

Facebook needs a friend. A deep partnership with someone who has the layers Meta does not have. Standing alone, Meta does not have a credible path to bingo.

Microsoft

Microsoft has three spots on the bingo card.

Infrastructure in Azure. Operating System in Windows and Copilot, as well as their partnership with OpenAI. Applications in M365 and Copilot apps.

Here’s what must be true for Microsoft.

Microsoft has to solve for Power and Internal Hardware. Power is the same constraint everyone faces, but Microsoft has the cash flow and the data center footprint to move first. Internal Hardware is the harder one.

Microsoft has never been good at end-user hardware. Windows Mobile failed. Zune failed. Surface is a rounding error. And Microsoft lost over one billion on their retail stores.

Can they win in Internal Hardware?

The realistic path is acquisition. AMD has been rumored for a decade. Or can Microsoft time it right when hardware’s importance fades?

This will be the biggest bet of Nadella’s career.

Apple

Apple already has four spots on the bingo card.

Internal Hardware in Apple Silicon. Operating System in iOS, macOS, and Apple Intelligence. End-User Hardware in every device the customer touches. Applications in the Services bundle and Apple Intelligence features.

Here’s what must be true for Apple.

Apple has to solve for Power, Infrastructure, and AI user experience. Power and infrastructure are heavy capex businesses Apple has historically avoided, so Apple buys power on the grid. Apple leases compute from AWS and Azure.

Apple has to own the inputs they currently rent.

The biggest risk to Apple is in AI experience; Apple sucks. Think about the difference between Siri and ChatGPT or Claude. It’s a joke.

And experience is what Apple has historically been awesome at.

On Monday, June 8, they finally announced Siri AI as part of the iOS 27 September software update.

Their saving grace might be their hard stance on privacy, which is a credit to Tim Cook. His missional stance on privacy has built massive trust with consumers. If and when AI models can shrink enough to use less power and work on end-user hardware, Apple might be able to dodge their missing spots on the bingo card.

Alphabet

Alphabet has five spots on the bingo card.

Internal Hardware in TPUs. Infrastructure in GCP. Operating System in Gemini and Android. End-User Hardware in Pixel and Nest. Applications in Gmail, Workspace, YouTube, Maps, Search.

Here’s what must be true for Alphabet to win.

Alphabet has to solve for Power, like the others. They also have to prove Internal Hardware is more than just a blip. Gemini has to integrate deeply into Gmail, Workspace, Search, Maps, and Android faster than AI cannibalizes the ad business that funds everything else.

But they have what it takes. They have the cash flow to solve Power. They have the user base for the layers closest to the customer. They have the data to train the best models.

The risk is internal. Alphabet’s organizational physics make speed hard.

Muskonomy

Musk theoretically has all six spots on the bingo card.

Power in Tesla Energy via solar panels, batteries, and mega-pack batteries. Internal Hardware via AI4 and AI5 chips for Teslas and eventually Optimus. It is doubling down in Internal Hardware via its upcoming Terrafab investment as they build their own chips. Infrastructure in Colossus. Operating System in Grok and FSD. End-User Hardware in Tesla cars, Optimus, Starlink satellites, and Starlink terminals. Applications in FSD, Optimus, and the Macrohard concept.

The only entity in tech history covering all six layers.

Here’s what must be true for Musk to win.

The clock is ticking as Musk has to execute M&A under a favorable White House. Tesla and SpaceX are strongly rumored to merge. Musk wanting to put all of his companies together is a major driver of the SpaceX IPO. The three companies have to stay coordinated under one strategic umbrella, even though they have different cap tables and different boards.

While Tesla is a $100 billion revenue company and SpaceX has been cash flow positive for a decade, none of it is throwing off the free cash flow of an Alphabet or Nvidia.

And Musk has to survive himself. This is a massive keyman risk, given his penchant to say what he thinks regardless of controversy.

The Ultimate Game of Thrones

The AI era is the ultimate mega category game of thrones. Eight players. Six layers. Five principles from history and one open layer at the bottom of the stack. One throne.

Here is what to do about it.

The Career Decision

Everyone is fighting for layers two through six. Almost no one in the United States is fighting for Power. That is where the wide-open category space is. Whoever builds the company that figures out how to deliver gigawatts of clean, fast, permittable power for AI data centers becomes the category kingmaker for every other player in the matrix.

This applies to careers across the stack. Take the job at the company that has a credible plan to solve Power, whether that company is a state economic development office in Tennessee or Mississippi or Texas, a nuclear startup, a distributed energy network, a grid operator, or one of the bingo contenders investing in their own generation.

The talent shortage in Power is enormous.

The category potential is enormous.

The competition is thin.

Run away from anything that has one layer and a great story. Intel was the best-performing tech stock of 1995. Nvidia is the best-performing tech stock of 2024 and 2025. One of those statements aged badly. The other one is sitting on a pattern that says it will too.

And remember. All of this analysis could be wrong. We’re providing the category lens to a discussion about the potential for who will be the biggest winners, in a business media landscape that is ignorant of how market categories work.

The Creator Capitalist Move

Learning how to invest (money, time, and intellectual capital) wisely in this Game of Thrones can extend your financial capital. And open the aperture of your thinking about the future.

Solving problems across the value stack is worth its weight in gold.

Look at the gaps in the matrix.

Power is wide open.

Infrastructure outside the hyperscalers is contested.

Operating Systems belong to a handful of giants, but the categories that ride on top of those operating systems are wide open. The Creator Capitalist white space is in the categories Wall Street has not named yet.

Build a category that requires AI but is not defined by it. Do not build an AI app. Build a category that an AI application is one expression of. Whoever languages a new category that lives in the matrix gaps gets to be the next Microsoft. The compounding from getting that right is bigger than anything else you will do with your career or your capital.

The Speculative Capital Question

If you are thoughtful about picking the next Category King, you can live like a king.

If you are already invested in the S&P 500, you are already invested in AI Category Kings. The matrix proves the point. Apple, Microsoft, Alphabet, Meta, Nvidia, and the rest of the top names sit inside the S&P 500. They are most of the index. The S&P 500 is the most boring and reliable way to participate in the AI era. Buy. Hold. Forty years from now your $10,000 looks like Microsoft money. Probably not Microsoft money. But it looks like a winning lottery ticket someone left on your desk.

Don’t forget.

The S&P 500 has a median return of 13.1% over the last 50 years.

If you want a little more juice, QQQ works. The Nasdaq 100 overweights the technology names that win eras. Same companies. Higher concentration. Same buy-and-hold thesis.

19% is the median return of the QQQ since its 1999 launch.

If you have speculative capital, use your category design brain to figure out the top three companies that will get to bingo. Look at the matrix. Find the companies with five or six layers, or a credible path to five or six layers. Make your call on which one will own Operating Systems plus the layers closest to the customer. Make your call on which weird M&A or JV moves first. Make your call on which solo player gets acquired and at what price. Make your call on whether Muskonomy stays coordinated under one strategic umbrella long enough to claim bingo.

The Category Kings will be the players who fill out the most valuable rows.

We’ll be back with another episode next week.

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

P.S. Do you like our Deep Dive Reports? Why or why not? Please let us know on LinkedIn and Substack notes.

P.P.S. Do you like the name Deep Dive Reports? Should we call it PSJ DDR? Dance Dance Revolution?

The lowest reading in the history of the survey.

April was already the worst on record. We beat it, then beat it again a month later.

Near-zero unemployment. Record-high stock market. GDP growing. Entrepreneurship at an all-time high.

And the consumer says this is the worst they can remember.

Something doesn’t add up.

Here’s what we covered in this episode:

1. “Record low” is good news.

The consumer isn’t behaving like the survey says.

Nobody’s broke and curling up in a ball.

They’re getting smart. Waiting longer to buy a car. Buying less packaged food. Trading stuff for experiences.

Because the real issue is not the consumer ‘income statement’. The real issue is the consumer ‘balance sheet’ is bloated and designed for a nuclear family that is declining.

* Single family homes that are too expensive and too much space for single people.

* Big cars sold for families that aren’t being formed.

* Groceries to cook in a DoorDash world.

The old linear life script is dissolving. Get married, get the house, get the promotion, collect your Scooby Snacks of purpose along the way. When that script breaks, people go find meaning on their own terms.

2. The synthetic customer, and the race to beige.

Bain published “Synthetic Customers Earn Their Stripes.” AI-generated buyers, backtested against a real conjoint study, replicated about 90% of the outcomes. Which features drive choice. Which products to launch. Even early price sensitivity. Target and US Bank are already testing on synthetic audiences before anything ships.

The technology is a huge unlock.

Sadly most companies will use it the wrong way.

Everybody builds one. Everybody aims it at the fat part of the bell curve. They optimize the average customer into the ground and call it insight.

Synthetic customers trained on average consumers makes us all dumber. We have an opposite POV…check it out.

3. The triple wasn’t good enough.

The QQQ is up around 600% over ten years, roughly 21% a year. The S&P did 13 to 14%. To get rich, you just had to sit still.

Gen Z isn’t sitting still. A third have played prediction markets, a third hold crypto, and a quarter of their portfolios sit in non-traditional assets. The punchline: roughly 69% of Polymarket accounts have lost money since 2022.

The FOMO flipped. A triple every year for a decade, and a whole generation said, not good enough, I want the fences.

Why swing that hard? 9/11, then 2008, then COVID, each one before they could legally drink. When every safety net detonates that early, “wait 40 years” sounds naive.

What’s coming up on Pirate Street Journal

Three weeks a month, we drop the video. Three topics, thirty minutes, one cowbell.

Once a month, we publish a written deep dive, the kind of category analysis you cannot get anywhere else. That one is for paying subscribers only, monthly and founding.

Next week, we’ll be publishing a deep dive.

Two ways to climb aboard now:

Monthly subscriber: $20/month. You’ve done dumber things with $20.

Founding subscriber: $375/year. For about a dollar a day, you get every mini-book we’ve ever written (300+), every audiobook (30+), digital copies of all seven of our Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners for category building.

Subscribe today, get the next deep dive the day it drops, and start jamming with the bots.

Recorded Friday, May 29. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week’s episode.

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

Every month through May of 2029.

Roughly $45 billion total.

That single contract is bigger than SpaceX’s entire annual revenue today.

Software is paying hardware. Hardware is paying energy. Energy is paying space.

Is it three card monte?

Or is the pie getting massively bigger?

This should be on every business news front page this week. Instead, the headlines are about Sam Altman’s house getting attacked, Eric Schmidt getting booed off a stage, and OpenAI quietly leaking that it might file for an IPO too.

Here’s what we covered in this episode:

1. AI gets an F in marketing.

360,000 Americans are in Facebook groups organized against data centers. AI is polling less popular than ICE, less popular than Trump, less popular than politicians.

The technology being protested is curing diseases and driving much of US GDP growth.

So why are so many angry at AI?

Pirate Eddie has a theory, and it does not involve AI at all.

Marriage rates. Birth rates. Teenage drinking. Labor force participation among young men.

All down.

Life stages and zest for life as we know was crumbling before AI.

2. SpaceX is going public. The TAM is the size of the American economy.

The S-1 is pitching a $28.5 trillion total addressable market.

U.S. GDP is $32 trillion. SpaceX is asking public markets to fund a business roughly the size of the entire American economy, run by a CEO whose vesting schedule requires interplanetary colonization.

Imagine being on the dock before the Nina, Pinta and Santa Maria set sail and you were offered a chance to invest in the new world.

What was the ROI on America?

What if you had a chance to invest in Space?

But the history of IPOs is that retail investors get hurt.

The history of Elon Musk is that betting against him is also expensive.

The Pirates how category designers think about an IPO this size without losing your mind or your savings.

3. The category queen vs. the category queen.

The fastest-growing company in the history of business is not OpenAI.

It is Anthropic.

Anthropic was founded by people who left OpenAI. They are now in talks at $900 billion. Higher valuation. Higher growth. First profitable quarter ever at $11 billion in revenue.

Andrej Karpathy, founding member of OpenAI and the man who coined vibe coding, just joined Anthropic. Ross Nordeen of xAI joined Anthropic earlier this month. The defectors are recruiting the defectors.

Category Design 101 says the queen takes 76% of the economics. Everyone else shares 13%. So which one is the queen?

Pirate Christopher has a frame on the video that recasts the entire question. He thinks this is not OpenAI versus Anthropic at all.

This is the (new) Pirate Street Journal.

Every Wednesday, we pick three headlines worth paying attention to and break down the category underneath.

Three Wednesdays a month, the video is free (for now). Once a month, we drop a written deep dive for paid subscribers, the kind of category analysis you cannot get anywhere else.

Two ways to climb aboard:

* Monthly subscriber: $20/month. You’ve done dumber things with $20.

* Founding subscriber: $375/year. For about a dollar a day, you get every mini-book we’ve ever written (300+), every audiobook (30+), digital copies of all seven of our Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners for category building.

To never miss a deep dive, become a subscriber today.

What’s coming up on Pirate Street Journal

A few of the threads from this week’s episode are running headlong into a much bigger story, which is the IPO season that is about to define the next decade of public markets.

On June 10th, two days before SpaceX is estimated to start trading, we are publishing the next PSJ written deep dive. We will be working through how a category designer thinks about investing in an IPO of this scale, what the category math says about SpaceX, OpenAI, and Anthropic going public in the same window, and we don’t know what the headlines will do between now and then, so there will be more.

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 7, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week’s episode!

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

P.S. - Founding subscribers get every mini-book we have ever written (300+), every audiobook (30+), digital copies of all seven Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners for category building for about a dollar a day. You have done dumber things with a dollar a day.

👉 Become a founding subscriber.

Last week, we recorded the very first episode of the Pirate Street Journal.

The Pirate Street Journal is for leaders with a different mind.

A different take on business news.

Through the category lens.

Our mini-books are timeless. PSJs are timely.

Our mini-books are long stories longer. PSJs have 30-minute seat belts.

Our mini-books are thinker’s high. PSJs try to help you think before you act.

But, but, but, but…

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 7, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Think of this like professional wrestling. It’s entertainment.

Don’t be so smart, you’re stupid and suplex your safety net savings.

Hey Ho, Let’s Go!

PSJ is the new weekly thing. The video’s free. The deep-dive written analysis is paywalled. Watching makes you informed. Reading makes you different.

Two ways to climb aboard:

* Monthly subscriber: $20/month. You’ve done dumber things with $20.

* Founding subscriber: $375/year. For about a dollar a day, you get every mini-book we’ve ever written (300+), every audiobook (30+), digital copies of all seven of our Big Books, and unlimited access to The Pirate Eddie Bot and Pirate Christopher Bot, your 24/7 AI jamming partners for category building.

To read this week’s deep dive, become a subscriber today.

1. Why is Salesforce down? Why is Micron up?

The Mag 7 reported earnings, and they were great overall.

But here’s some weird data.

Salesforce (one of the Category Kings of SaaS) lost about a third of its market capitalization in the last 12 months, despite strong revenue and operating income. Forward P/E down 28% in twelve months. Benioff just announced a $50 billion stock buyback, one of the largest in corporate history.

Micron (memory for AI) saw over a 6x increase in its stock price in the last 12 months, also with incredible revenue and operating income. Forward P/E sat at roughly 3x a year ago. Today it is over 7x. The stock more than tripled in that window, but earnings grew faster than the multiple did.

In the columns, we have the Mag 7, plus SpaceX, which is soon to go public, as well as Micron and Salesforce.

The rows are what matter.

* Top row, Potential investors. Forward P/E above roughly 27, which is about +5 above the S&P 500 average PE multiple.

* Middle row, market-average band. Forward P/E is roughly 17 to 27. The S&P 500 lives here at around 22.

* Bottom row, Performance investors. Forward P/E below roughly 17, which is about -5 below the S&P 500 average PE multiple.

The actual PEs are merely a placeholder, as there’s nothing magic about plus or minus 5 from the S&P 500 average.

We want to discuss the fact that there are two types of investors.

Performance investors. They invest in companies because of their current and near-term performance. Their performance is predictable, reliable, and steady. Sometimes slow, but never surprising. These are usually Category Kings today.

These companies are valued at lower multiples, whether it is price to earnings, enterprise value to EBITDA, or price to sales.

And there are Potential investors.

They invest in companies regardless of their performance now or in the near term, but in their long-term future potential. Usually, these are companies that can become future Category Kings that no one else really sees.

These companies are valued at much higher multiples, usually because earnings or sales are emerging and expected to accelerate.

When Potential investors start buying a stock, they lift the forward PE multiple as they are willing to pay a premium for potential. They think the category size of prize is growing and has huge upside.

They think the category is on the good side of the S-curve. All boats rise with the tide.

When Potential investors sell a stock to Performance investors, it depresses the forward PE multiple because they aren’t willing to pay a premium for potential. They think the category size of prize is static and has limited upside.

2. Are you on the good or bad side of the s-curve

Performance vs. Potential investors are fundamentally debating one fundamental question.

Is the category and company on the good or bad side of the S-curve?

You don’t have to be right on the precise number and date. It’s not like picking black 17 on the roulette table.

It’s just picking black or white. Using data and Category Design. And thinking about thinking.

You don’t have to predict timing. You don’t have to predict a number. You should, but don’t have to, do fancy analysis.

Left or right of the S-curve is the question.

If you are right, and everyone agrees with you, it can be a profitable bet.

If you are right, and everyone disagrees with you, you can create generational wealth.

But you have to be comfortable with the loneliness, name-calling and mockery that comes with rejecting the premise.

When Pirate Eddie wrote in HBR that Netflix’s 80% stock drop in 2011 was Wall Street being dumb, Wall Street called him dumb. When Pirate Eddie shared on CNBC about Tesla’s superconsumer being a new superconsumer who valued both functional and fun cars, Wall Street called him dumb again.

When Pirate Eddie wrote in HBR that General Mills should sell its cereal business, he made a lot of former clients/friends at General Mills angry. But the data at the time was undeniable. 12 years of category decline. And unless you believed carbs and sugar were ever coming back into vogue, General Mills’ cereal business would never be more valuable than it is today. And they should sell it.

General Mills’ stock is down 38%, while Kellanova (old Kelloggs with cereal spun out) is up +4% since being acquired by Mars. General Mills’ PE ratio is 8x, and Kellanova’s PE is 23x.

Sometimes being right doesn’t feel great at first.

But the cost of being legendary is the willingness to be different.

3. Re-rating is a result of Category Design

Re-rating is when Wall Street decides a company’s multiple should be higher or lower.

Revenue, gross margins, and cash flow don’t change. The value of those economics does.

Everything we value, we’ve been taught to value.

Re-ratings are simply a redefinition of the Category.

Did you know Domino’s Pizza was the 2nd best performing stock from 2010 through the end of 2019?

Why? It transformed from a pizza delivery company to a tech company that happens to deliver pizzas. They invested heavily in their ‘pizza tracker’, apps, and frictionless mobile apps.

It’s Category Design 101.

And if you invested $1,000 into Domino’s at the beginning of 2010, you’d have $40,000 in 10 years.

The best part is that re-ratings can happen slowly. You could have jumped on the Domino’s train any of the first 9 years of its run and done well.

Wall Street is often blind to Category Design.

Category Design is your unfair advantage.

4. The SaaSpocalypse is overstated

The financial press has decided this is the death of software. Salesforce down $135 billion. ServiceNow down $100 billion. Workday down $50 billion. Hundreds of billions of dollars in enterprise software market cap gone in a year.

It is the wrong frame. Software is not dying.

On May 15, Marc Benioff sat down with the All-In Podcast and said,

“… the software market’s rerated. It happens every now and then. There are cycles. You know, I’ve been doing Salesforce for 27 years, enterprise software for 40. And the market’s rerated.”

— Marc Benioff

The earnings are fine, but the multiples got cut.

Salesforce guided to do $46 billion in revenue and $16 billion in cash flow this year. Performance is not the problem.

Potential is.

The market used to price these companies as Potential plays. Software is eating the world, every business needs a CRM SaaS, the seat count never stops growing. That story matured. The category got knowable. The TAM became visible. So the market quietly moved these names down a row. From Potential. To Neutral. Some all the way to Performance.

Benioff is responding to this exactly the way a category designer should. He is doing three things in parallel. Buying back stock at compressed multiples because he believes the business is worth more than the market pays for it. Acquiring companies (Informatica), while, in his words, “everything’s a little cheaper.” And, most importantly, repositioning Salesforce out of the SaaS category entirely. AgentForce. Slack as the context engine. Humans, agents, and headless platforms interoperating.

If that repositioning works, Salesforce gets re-rated up again under a new category label. Same business. Different multiple. Different shareholders. That is the move.

4. AI hardware is more valuable than AI software

The content in this section is 100% created by AJ on X @alojoh.

He’s a former Goldman Sachs investment banker, who built his own pirate ship that is a combination of investment research and trading advice with a rare alignment of incentives with his subscribers.

The goal of equity research is to drive trading revenue for investment banking, not necessarily at the benefit of the reader of the research. There is a strong motivation to put out positive news and analysis for investment banking clients and even stronger reluctance to say anything negative about those same clients. It is not 100% trustworthy.

The incentives for most traders/investors is to grow their own returns, even at the expense of subscribers/readers. They may tell you to buy a stock, but only after they bought it, and at times, they sell as they tell you to buy. Or their incentive is to grow their assets under management and charge you 2% of assets and 20% of carry for as long as possible.

AJ is the odd combination of a top-tier investment researcher who uses it to trade for his own account. His basic subscription on X is only $7/month, but his hardcore channel is $500/month, which Pirate Eddie subscribes to and has already generated more than a 20x ROI on the cost of the annual hardcore subscription. Sign up if you like buried treasure.

AJ is a pirate who routinely rejects the premise. This section is a synthesis of his insights and work and is shared with his permission.

One of the most provocative quotes from AJ is, “Hardware is the endgame” for AI.

For decades, software economics have always trumped hardware economics.

In the age of AI, it’s no longer always true.

Eighteen months ago, the DRAM memory industry was effectively left for dead. Post-COVID demand had snapped back. Customers had massively over-ordered during the shortages. The industry was working through an enormous inventory overhang. Prices collapsed. The major players took huge losses. Standard semiconductor cycle. Standard low-multiple memory business.

Then the AI buildout happened underneath them. In two or three months, the entire setup will be inverted. Utilization went from roughly 20% to over 100%. Hyperscalers moved into “whatever it takes” pricing mode on memory. Long-term supply agreements got locked in across the three major players (Micron, Samsung, SK Hynix) who together produce roughly 95% of global DRAM.

Memory used to be a commodity. Now it is AI infrastructure.

The cleanest way to show you why is to put Micron next to the most darling AI software stock on the public markets right now. Palantir.

* Revenue growth (year over year). Micron +196%. Palantir +85%.

* Operating margin. Micron 67.6% (GAAP). Palantir 60% adjusted, 46% GAAP. Yes, you read that right. The memory chip company has a higher operating margin than the AI software company.

* Rule of 40 (revenue growth percent plus operating margin percent). This is an awesome rule of thumb. If you want to know if a business is healthy or not, just take their revenue growth percent and add it up with their operating margin percent. If both are greater than 40%, you have a great business. Per Palantir’s own Q1 2026 investor deck, Micron sits at 265%. Palantir sits at 145%. Palantir is literally publishing slides that show Micron crushing them on the metric they brag about.

* Forward P/E. Micron roughly 7x. Palantir roughly 95x. Palantir trades at a multiple thirteen times higher than Micron, while growing slower, earning lower margins, and scoring lower on its own framework of choice.

This AI hardware company has the better business by every operating measure. The software company has the better multiple by every valuation measure. That is what a re-rating up looks like when it is not yet complete on one side and what a Potential premium looks like when it might be ahead of itself on the other.

This does not mean Palantir is doomed. It means the gap between the two multiples is going to close.

5. The Mag-7 will be the Mag-10. Abundance will follow

We are not telling you software is over.

Anthropic and OpenAI will do extraordinarily well. Pirate Christopher made the call on the pod. These are the largest, fastest-growing companies ever created, sitting in private markets at scale that exceeds most of the Mag-7. They are the leadership of the next decade of AI software. When they go public, the math changes for everyone.

But the SaaSpocalypse is more about the rise of AI hardware and hardware in general. This is why Micron is exploding. And why SpaceX is about to launch the largest IPO in history.

The Mag-7 framing is already obsolete. Three names belong in the group that are not in it yet, and the math suggests all three of them get added inside the next twelve months.

* OpenAI. Created the fastest-growing category in startup history. Reported to be exploring an IPO window.

* Anthropic. Became the fastest-growing company in history. Already operating at a scale that exceeds most public Mag-7 members on the metric that matters most, category formation speed.

* SpaceX. IPOing in June. Already cash-flow positive thanks to the Colossus lease deal with Anthropic, and reportedly being talked about at $1.75 to $2 trillion.

And it does not stop at ten.

Stripe could be next. The private IPOs of the last decade are starting to unwind. Every name that has been trapped in private markets at Potential multiples is about to become available to public investors who have been starved for Potential exposure.

One more thing the matrix hints at.

There is still no energy company in the Mag-anything bucket. Tesla is sometimes pitched as the answer because of its solar and battery business. The actual AI energy story is coming.

There is a real chance we are entering one of the largest equity bull markets in modern history, and most professionals are still positioned for a recession that did not happen.

Global GDP in 1926 was about $3 trillion. Today it is roughly $126 trillion. That is a ~50x expansion of human-created value in 100 years.

The mechanism was not “stocks went up.” The mechanism was that humans kept designing new categories that created value from nothing. Refrigeration. Electrification. The semiconductor. The internet. Each of those was, in its moment, an abundance boom. Each one looked like a bubble in the middle innings. Each one was actually a re-rating of the entire economy onto a new S-curve.

If AI is the next one, the abundance argument runs like this:

* The S&P 500 goes up because the Mag-10 carries it. The top names are already a huge share of index weight. When they re-rate up, the index does too, almost mechanically. This is already happening.

* The Nasdaq goes up more, because both the AI hardware layer and the AI software layer live inside it. Hardware re-rates up. Software re-sorts. The up names are bigger than the down names. Net positive.

* Productivity finally shows up in the data. If even 30% of the AI productivity case is real, US GDP growth surprises to the upside for years. That is the macro backdrop bulls have been waiting for since the 1990s.

* The Potential investor pool expands as more capital chases the abundance narrative. More Potential capital, chasing the same names, pushes multiples higher. The re-rating accelerates.

If we are right about the abundance boom, the index investor does well. The Performance investor does fine. The Potential investor does great.

But the category designer wins differently. The category designer wins by spotting re-ratings, in both directions, before the analyst class can model them.

All of this boils down to two questions.

* Is the category on the good or bad side of the s-curve?

* Is the risk of staying the same greater than the risk of changing?

If you can answer those questions honestly about your business, your career, your portfolio, your category, you could create a massive outcome and avoid sailing into rocky waters.

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead