Farouk

prosocial tech investor @ | race car driver | washed-up FGC | long $UPST (medium-hella) and $GOOG (hella) | views are my own + NFA

[Joshua T. Hosler @JoshuaHosler]

🚨Countries urging households to prepare / stockpile supplies:

• UK — 3 days (Be Ready campaign)
• Japan — at least 3 days, preferably a week
• Sweden — 7 days
• Norway — 7 days
• Finland — 3 days
• Denmark — 3 days
• Germany — ~10 days
• Austria — 10–14 days
• France — 72 hours
• Netherlands — 72 hours
• Ireland — emergency booklet with stockpiling advice
• Taiwan — 7 days home supplies + go-bag
• Switzerland — about 1 week
• EU — 72-hour recommendation
• Baltic states (Estonia, Latvia, Lithuania), Poland, Luxembourg, Belgium, Czechia mostly 72 hours
• US — Pentagon’s FORTRESS plan aims for major military bases to operate independently for 90 days (power, fuel, supplies); civilian guidance via https://t.co/DPQJdQfp4Q remains “several days”

[Farouk @fernook]

great writeup

[SasoEquity @saso_capital]

My key takeaways from the $GOOGL (Alphabet) Q3 2026 earnings call.

1. Search slowed while query growth hit a five-year high. Search and other ads grew 12% to $63.3B, down from Q2. The deceleration has four parts. FX was the biggest drag. The EU ended its de minimis exemption (duty-free treatment for cheap parcels), which hit APAC retail advertisers. World Cup media budgets landed in June instead of July. And AI Mode queries grew fast on a surface with "lower monetization" than classic Search. The first three wash out over time. The fourth is structural: more usage on a surface that earns less per query.

2. The EPS miss is mostly a SpaceX mark. Revenue grew 25% to $127.6B. Operating income grew 30% to $40.6B, a 31.8% margin. EPS came in at $2.12 against $3.02 expected because OI&E (other income and expense, the non-operating line where investment gains and losses land) swung to negative $8.2B. Most of that was an unrealized loss on the SpaceX stake after its share price fell. My rough math: after tax, that mark costs around $0.55 a share, so it explains more than half the $0.90 gap but not all of it.

3. Q4 Search is already guided softer. Lapping last year's Search acceleration cost about 3 points of growth in Q3 and will cost a couple more in Q4. FX gets slightly worse at current spot rates, mostly in Search and YouTube. The rest of Services won't make up the difference: YouTube ads grew only 9% to $11.2B, and Network grew 1% to $7.5B.

4. The AI Mode ad fix is rolling out but not proven. Ads in AI Mode go international for the first time, and multi-turn ads (ads that stay in a back-and-forth conversation) launch in the U.S. The evidence offered: inside AI Mode, sponsored and organic product listings get similar click-through rates. AI Mode queries run about 3x longer than classic searches, and most are incremental, meaning they would not have happened otherwise. What's missing is any number on how far AI Mode revenue per query trails classic Search. Agentic commerce (AI agents that shop and buy for users) is called additive, and consumer agents arrive in the Gemini app later this year. No revenue is attached to it yet.

5. Cloud doubled. Revenue grew 103% to $30.7B. Operating income was $11.1B, more than triple last year. Margin was 36.2% versus 23.7% a year ago. Backlog (signed contracts not yet booked as revenue) reached $561B, and just over 55% of it, about $310B, converts within 24 months. Two caveats. TPU system sales contributed to the growth but were not sized, and Cloud growth excluding TPUs was described as very strong with no number attached. Also, the rented third-party compute capacity came online only at the very end of Q3, so its margin drag lands in Q4.

6. TPU economics stay private. A TPU is Google's in-house AI chip, sold here as full racks with networking, storage and software. One analyst framed a TPU system at roughly $35B per gigawatt and asked how much of that becomes revenue and at what margin. Neither got an answer, because product-level financials are not disclosed. The cash cycle is clear. A signed contract shows up in backlog, Google builds inventory, and cash arrives on delivery. Inventory is only built against committed contracts. There are nearly 100 TPU customers, including Anthropic (directly and through Broadcom) and Apple, which is scaling pretraining on TPUs. New distribution comes through Oracle and Crux AI, a joint venture with Blackstone. The meaningful revenue ramp is 2027.

7. Free cash flow went negative. Q3 FCF was negative $9.1B on $51.4B of capex. Operating cash flow of $42.3B also absorbed the TPU inventory build and a $5.2B payment on a 2018 EC fine. Trailing twelve-month FCF is $19.7B. The 2026 capex guide is unchanged at $195B to $205B, and 2027 rises significantly, with numbers on the Q4 call. On top of that sit $924B in future purchase commitments and $152B in leases that haven't started and other obligations. Those are contractual maximums, and some have volume flexibility.

8. The return math is stated, not shown. Return on invested capital is said to stay meaningfully above the cost of capital, with no figure. Compute allocation is described as a long-range plan run on ROIC discipline, with no ranking of who gets capacity first. Cloud says it could serve a lot more demand with more capacity. About 65% of Q3 infrastructure spend went to servers and networking depreciated over six years, while TPU 8t claims up to 2.7x the training performance of the prior generation. My view: six years is a long life for hardware that loses that much ground each generation. Shorter lives would mean higher depreciation on top of the capex.

9. First-party model APIs process nearly 32B tokens (units of text an AI model reads or writes) per minute, up 40% QoQ and more than 4x YoY. In its first week on developer platforms, Gemini 4 Argon ramped 3.5x faster than Gemini 3, even with capacity limits. Customers who used Gemini Enterprise in Q3 2025 have more than quadrupled their spend. The Gemini app is at 1B users. This is the clearest evidence that the capex has real buyers.

Bottom line: The operating business beat. Revenue grew 25%, operating income grew 30%, Cloud doubled at a 36% margin, and the headline EPS miss is mostly a paper loss on SpaceX. The stock still fell about 10% after hours, from $322.22 to $288.35, because the market is now pricing cash, not growth. Quarterly FCF is negative, capex runs near $200B and rises again in 2027, commitments total about $1T, and the biggest profit pool is slowing as usage shifts to a surface that earns less per query. Management described every link between the spend and the payoff and did not put any number on them.

[Farouk @fernook]

GOOG miss is whatever but the real dayruiner is seeing tae kim take a victory lap

[Sundar Pichai @sundarpichai]

I did say we'd be releasing our models periodically...introducing Gemini 4 Carbon, our next frontier model.

Following Argon's release just two weeks ago, Carbon shows the pace at which we’re pushing the frontier, it ranks #1 on the recently updated v5.0 of @ArtificialAnlys Intelligence Index at 59. It also leads across key cybersecurity evaluations scoring 88.2% on SEC-bench Pro for finding vulnerabilities, 54.8% on ExploitGym for exploitation, and 71.0% on CWE-bench for patching.

We’re seeing significant improvements in long-horizon tasks even compared to Argon, and we’ve strengthened frontier safeguards.

As we did with Argon, we’re going to roll it out gradually + responsibly. Some trusted cyber defenders will get access starting this week. We'll be expanding it to more partners through our Fairwind Program, ahead of wider availability soon, so hang tight!

[Vishal Maini @v_maini]

as far as I can tell, here are the stated views of tier 1 VC firms on extinction risk from AI so far:

- Denied/dismissed explicitly: @a16z, @khoslaventures, @benchmark

- Silent: @sequoia, @generalcatalyst, @ThriveCapital, @kleinerperkins, @IndexVentures, @Accel, @benchmark, @lightspeedvp

- Acknowledged the possibility: Thiel / @foundersfund, @GreylockVC

- Firm-level stance that avoiding human extinction is an active priority: none yet.

Who is going to lead from the front here?

We've all read the Hugging Face report, we are all staring down the cyber-offensive exponential, biological threats and attacks on physical infrastructure are not far off, and we are still early in navigating the threat landscape. There is no later time at which it will make more sense to act than today.

The frontier labs are already pulling out all the stops. Investors are a major power bloc at the frontier, they can see what's happening more clearly than almost anyone else. They need not see themselves as spectators to an unfolding drama, but instead can be -- and ought to be -- active participants in hardening civilizational defenses during the critical window (now).

That starts by taking ownership of the problem, in no unclear terms, and orienting towards sufficient (not cosmetic) solutions.

[Insider Wire @InsiderWire]

#BREAKING: The Federal Election Commission just shut down its web services after a hacking attempt.

[Farouk @fernook]

Someone needs to start a running tally

[Pacific Wire @JMChyno]

ALERT: Several countries including Japan, UK, Switzerland, and Germany, have recently urged citizens to stockpile emergency supplies amid war, disasters and cyber attack fears.

[Pacific Wire @JMChyno]

ALERT: Several countries including Japan, UK, Switzerland, and Germany, have recently urged citizens to stockpile emergency supplies amid war, disasters and cyber attack fears.

[Reuters @Reuters]

BREAKING: A hacker is attempting to breach the US Federal Election Commission's systems and that agency has had to 'temporarily shut down' its web-facing services as a result, according to an email seen by Reuters https://t.co/0eRHQVCGgu

[The Hormuz Letter @HormuzLetter]

BREAKING: Japan to urge all citizens to stockpile at least 3 days of food and water in preparation for major disasters and events, with an official emergency request set for November 2.

"At least three days, and I'd like to say a week if possible… please prepare food, toilets, and water properly at home even without public assistance," Japan's Disaster Management says.

It comes just 2 days after the Pentagon started to prepare every major US military base to operate for at least 90 days without outside electricity, fuel, water or supplies, anticipating a major war.

The UK launched the "Be Ready" program 5 days ago, also advising all citizens to keep 3 days of key supplies, including bottled water, non-perishable food, and a battery or wind-up FM radio.

[Vishal Maini @v_maini]

Not many people seem to know about Metaplanet, Jaan Tallinn's VC firm.

They are the most AGI-pilled firm on the planet, and are about to flip many of the tier 1s.

> Invested in @GoogleDeepMind in 2011
> Led @AnthropicAI series A in 2021
> Doubled down on Anthropic in every round since. IRR hurdle for deploying capital into anything else was {absurdly high number}% for years
> Anchored the premier AGI hedge funds (+Mythos) + in-house public equities strategy

4-person team in Estonia now managing 10s of billions AUM, liquid after $ANT IPO.

Rationalist roots --> zero bureaucracy, cares about human survival & flourishing as north star, doesn't care who else is investing or how high status a founder / idea is

Founders: congrats! you no longer need to play status games to raise a mega round for your civilization-scale moonshot. You can just pitch @metaplanetfund

[Farouk @fernook]

Every time there's a new Genie launch my mind is blown but this one is exceptionally mind-blowing.

Do they sell Simulation Hypothesis contracts on Polymarket?

[Google DeepMind @GoogleDeepMind]

This is Genie 4, our most realistic and interactive world model yet. 🌐

Explore dynamic environments in real time to see how the scene responds, sounds, and how the people in it move, react, and speak.

[Google DeepMind @GoogleDeepMind]

This is Genie 4, our most realistic and interactive world model yet. 🌐

Explore dynamic environments in real time to see how the scene responds, sounds, and how the people in it move, react, and speak.

[Farouk @fernook]

@jungofthewon the ones I don't have a massive long position in

[Rishabh Karnawat @rishabhkio]

Many of you don't understand how serious this is, so let me break it down.

In computer science there is a famous kind of puzzle called 3-SAT. You are given a long list of yes-or-no switches and a set of rules about how they must be arranged, and you have to find a combination that satisfies every rule. The obvious way to solve it is to try every combination, but each new switch doubles the number of possibilities, so a puzzle with a few hundred switches would take longer than the age of the universe to brute force.

For decades, the smartest people in the field found clever tricks that made this a little faster, but every trick still hit the same wall: the time required kept exploding as the puzzle grew.
About 25 years ago, two computer scientists, Russell Impagliazzo and Ramamohan Paturi, working with Francis Zane, turned that wall into a formal idea.

They proposed the Exponential Time Hypothesis, which says this explosion is not a failure of human cleverness but a law of nature. No algorithm, however brilliant, will ever solve 3-SAT without the time blowing up exponentially. Nobody could prove it, but almost everyone believed it, and it became one of the foundations of modern computer science.

Researchers used it as a measuring stick. If you could show that solving some other problem quickly would also crack 3-SAT quickly, you had shown that problem was hopelessly hard too. Hundreds of papers, across scheduling, graphs, logic and much more, rest on this one assumption.

Now an internal AI model at OpenAI claims to have broken it. It says it found an algorithm that solves these puzzles meaningfully faster than the hypothesis allows, and it has checked the proof in a computer verification system called Lean.

And here is the remarkable part: the very people who proposed the hypothesis, Impagliazzo and Paturi, along with MIT's Ryan Williams, are now leading the public review of whether a machine has disproved their own idea.
So what happens next? If the disproof holds, a large part of theoretical computer science has to be revisited.

Every result that said "this problem cannot be solved faster, assuming ETH" loses its foundation, and researchers will have to work out which of those walls were real and which were simply where we stopped looking. It does not mean everything becomes easy. The new algorithm is still slow in absolute terms and this is not the famous P versus NP problem being solved.

But it means our map of what is possible was wrong in a place we were very confident about, and it was an AI that redrew it. If the disproof fails, the hypothesis survives and the field breathes out, but we will still have watched an AI produce serious, checkable work on one of the deepest questions in the discipline, closely enough that the founders of the idea had to take it seriously. Either way, something has shifted.

[High Yield Harry @HighyieldHarry]

You know it’s a decent S-1 when Ed Zitron hasn’t tweeted anything out yet.

[Boring_Business @BoringBiz_]

Jokes aside, the Anthropic S-1 filing is pretty incredible and highly encourage everyone to take a skim through it, even if you never plan on owning the stock

Reminder that this business was started roughly half a decade ago and has already scaled up to become one of the most valuable companies in the world

We have never seen growth and excitement at this level around a business before. The revenue growth numbers and free cash flow metrics are far beyond what any early stage investor underwrote in the financing rounds

You can make up your mind on the bull/bear thesis, and there is a certainly a fair case for both, especially at a $2 trillion valuation that has been floated around

The one thing you can’t deny is that Dario and his team has truly built one of the most impressive businesses we have ever seen

Speaking from my own personal experience, Opus 5.5 was an absolute game changer and my spend on their models continue to grow exponentially every single month

Anthropic is truly an incredible symbol of meritocratic capitalism at its best. The company was the 2nd player in its industry for a very long time and came back from
behind to IPO before OpenAI.

If you build incredible products, the demand will come. We should all take a moment to be glad that this is an America company, built in America by Americans working hard at a frontier problem every single day

As an American, I hope we see hundreds of more companies like Anthropic bloom over the next decade

[Farouk @fernook]

@Flower_of_Babel @real_dreamr @bitcoin__intern Fresno, Stockton, Bakersfield all having better weather? You’re lying or you just like 110 degree heat I guess

[Tea with Tolkien @TeawithTolkien]

happy October the 24th to all who celebrate