SpaceX aiPhone?

Plus: OPM digitizes paper-based retirement process, Jersey Mike's files for IPO, Google ordered to pay $2B to Klarna in antitrust case

Jul 02, 2026

Happy Thursday.

We’re live on YouTube and 𝕏.

The current thing in tech and business is reporting that OpenAI is in early conversations to give the government a 5% equity stake in the company.

Today’s Lineup

Flexjet Global CEO Andrew Collins at 11:35 AM
Together AI Co-Founder & CEO Vipul Ved Prakash at 11:50 AM
Valar Atomics Co-Founder & CEO Isaiah Taylor at 12:00 PM
FAI Senior Fellow Dean Ball at 12:10 PM
Radical Ventures Partner Rob Toews at 12:40 PM
Baseten Co-Founder & CEO Tuhin Srivastava at 1:00 PM

Run of Show

SpaceX Showed Investors an AI Phone Prototype

SpaceX has developed an early prototype of an AI-focused handset, according to The Wall Street Journal. The device is said to be slimmer than an iPhone, runs a proprietary operating system, uses xAI technology, and is built around Qualcomm’s Snapdragon chipset. Elon Musk reportedly demoed the prototype to potential investors during SpaceX’s recent IPO roadshow. The product fits with Musk’s broader “everything app” vision, but it’s still early and may never ship. Rumors about a Musk-built phone have circulated for years, usually around Tesla, but Musk has repeatedly pushed back on the idea. “The idea of making a phone makes me want to die,” he said last October. “But if we have to make a phone, we will.” In February, he denied a Reuters report that SpaceX was building a phone that could connect directly to Starlink satellites, posting on X: “We are not developing a phone.” Representatives for SpaceX and Qualcomm didn’t immediately respond to requests for comment.

OpenAI in “early conversations” to hand over 5% stake to USG

OpenAI is apparently in talks with the Trump administration to give it a 5% equity stake in the company. The Financial Times describes the talks as “early conversations,” but the plans seem to involve other frontier AI players apportioning stakes in their companies as well. The obvious context around this story is, at least on a straightforward read, that AI companies need to at least stem the seemingly ever-growing negative sentiment around AI and data centers; doing business with the Trump admin has turned out well for other companies (Intel, Dell), and being difficult to do business with the admin has been unambiguously bad for others (Anthropic); and there’s now a vehicle with Trump accounts that can facilitate equity transfers from corporations to average Americans. Again, these are “early conversations,” so we’re very light on details, but we’ll be discussing this news today on the show and following it in the weeks to come.

OPM Ends Paper-Based Retirement Process

The US Office of Personnel Management says it has digitized the retirement process for government employees. This might seem like a boring news item, but the story behind it is actually kind of wild. Up until now, the process for government employees and US veterans to retire and start receiving their pensions could take up to six months. This is because it’s been entirely paper-based and manual. Spike Brehm, who helped with the effort, described how crazy this turned out to be in reality:

what was the holdup? paper. remember hearing Elon talk about “the mine” in Pennsylvania? we got to visit it. in deep underground caverns blasted out of limestone, there were literally acres of file cabinets, as far as the eye could see, storing files detailing federal employees’ employment and paystub history. a simple “case” might be only a quarter or half inch thick, but really complex cases filled up whole filing cabinets. one famously took up a whole pallet.
each case was hand processed by case workers in cubicles deep underground. they checked calculations, made sure forms were filled out properly (many weren’t), and handled a long tail of complex issues. we’d watch as they keyed data into a black and white terminal, transmitting to the COBOL mainframe built many decades ago.
since cases were processed by hand, there were multiple rounds of human review, and additional rounds for complex cases. case files were walked around between one worker’s outbox and another’s inbox. sometimes it would sit in one place for days, waiting to be picked up.

The digitization of the retirement process should now allow people to complete it in minutes and start receiving their pensions immediately. The pictures and videos of the limestone vault where all this paper is stored are just fascinating.

Jersey Mike’s Files for IPO

The US sandwich chain Jersey Mike’s filed for IPO today. It’s looking for a $12B valuation after being acquired by Blackstone last year for $8B. Jersey Mike’s has ~3,300 locations across the US and Canada, and plans to open 300 shops in the UK and Ireland next year. Peter Cancro, Jersey Mike’s founder, started the business in 1975 when he was 17 years old. He actually founded the business when he purchased a sandwich shop in Point Pleasant, New Jersey, called Mike’s Subs with a $125,000 loan he got from his then football coach, who was also a banker. He grew the company for almost 50 years before transitioning to chairman this April; former Wingstop CEO Charlie Morrison now leads the company. The ticker will be JMKE.

Clip Spotlight: Making Sense Out of Meta Selling its Excess Compute

Our conversation on the show yesterday:

Jordi: Meta selling excess compute is deeply confusing. The whole thing.

I think it's practical, what Meta is doing. But as somebody who has been a big cheerleader for Meta — in my view, it's the perfect business — it doesn't give you a lot of confidence in the strategy overall.

It doesn't give you a lot of confidence that there are near-term products on the horizon for Meta that are going to be able to use the capacity, *which has clearly been their strategy.*

Mark and the team have never said they want to be in the cloud business. They've talked about the possibility of it. But the stated goal of MSL is personal superintelligence.

John: Which I was a fan of. That's my biggest bull case for all of this. There are so many different applications that I can imagine being a daily driver of in the Meta family of apps.

Oddly, none of that has really even been tried, in my opinion.

Jordi: Yeah. All we've really seen so far is Muse Spark — not anything that anyone should really get that excited about. It's a good model sir, but I don't think it will have a lot of demand.

And we've seen Meta Vibes, which was a Midjourney wrapper.

John: Even if Muse Spark is not on the gigafrontier, can it be good enough to get some work done inside the Meta family off apps? Like, it should. I would imagine yes. But they just haven't found that killer feature.

Jordi: Yeah, and it's interesting because yesterday we were talking about the story where Google had been telling Meta that they don't have the capacity for them. But here, Meta is with plenty of capacity themselves.

John: It's weird that it came as a leak around a plan to sell compute, as opposed to just what SpaceX did. Where it was just like, boom, huge contract with Anthropic, lots of excitement going into the IPO. That was such a perfectly massaged story as SpaceX entered the public markets.

It would have been great if Meta had just said, 'Hey, we have a frontier lab that's paying us a billion dollars a month now. And it's going to show up in earnings next quarter. Get ready.'