CEO Vlad Tenev on Robinhood's Record Year (+200%, ~$100B Market Cap)

[00:00] I heard you want to be the LeBron James of earnings balls. Did I say that? You're coming off of a record year. What happened? Robinhood was pretty much a options and crypto and equities business. And now we have 11 business lines that generate 100 million in annual revenue or more. Global domination. Of your finances. Maybe like a week or so after the Yes No event, can you share more about what you release? One is a big upgrade to prediction markets. [00:30] prediction markets now on web so that makes it a lot easier for people to engage and interact with our prediction markets the second thing is the ability to trade individual player actions so the sports experience in robin hood is just getting much deeper and much more dynamic you're on the cover of men's health i can sign it for you i actually have about uh 75 copies in there is harmonic in a it's all time travel if there is a solution if there is a solution yeah [01:00] What is your hottest prediction for 2026? That's a tough question. [01:07] Vlad, welcome to Sorcery. Happy to be here. Thanks for having me in Robinhood's HQ. Oh, yeah, I'm happy that you're here, actually, I should say. Well, you're coming off of a record year. This is going to come out in January. And you've deployed two new business lines that have reached over-- well, they're not new, but they've reached over $100 million in revenue. [01:29] What happened last year?

[01:31] Yeah, you're talking about prediction markets and Bitstamp. So very different business lines, obviously. But if you look back... [01:40] the time we went public, Robinhood was pretty much a options and crypto and equities business. And now we have 11 business lines that generate 100 million in annual revenue or more. So I think the story is, [01:58] For a long time, we were criticized that we were sort of a business that would do well when markets were going up, interest rates were going down, as was the case in 2020 and large part of 2021. [02:15] But what happened when interest rates went up and we had sort of like the reversal of [02:23] most of the trends that were powering our business and our IPO during COVID, we had to kind of bear down and [02:33] pivot our business into one that was more all weather. So the Robin Hood you see today, much more diversified. [02:40] where we have 11 business lines that are at scale. And a couple more that are also in that [02:48] 10 to 100 range, but that we feel like are going to grow over time. So I like to use the analogy of [02:56] automobiles right maybe a couple years ago we were a v6 then we went to a v8 there's not a lot of automobiles with 11 cylinder engines but you know we're pretty close to a v12 and then you know maybe maybe one day soon w16 like a super hyper car

[03:14] And then I'll have to find a new analogy. We'll have to do jet planes or rockets or something. That's pretty good. OK, so what are these 11 business lines? Can you explain that a little bit more? Yeah, I mean, you can slice it a couple of different ways. One way to look at it is-- [03:31] How much of our business is generating revenue from transactions? So we have transaction revenue, which you can think of as trading commissions, rebates from market makers, payment for order flow. We have a card product, so we earn interchange from swipes. And those are all money we make from every transaction. Then there's also net interest revenue, which you can kind of think of as money that we make [04:01] . [04:02] being the custodian of assets and also lending against those assets. And so we have, uh, [04:09] a spread that we take on the cash that we hold on our platform. That's probably the simplest one. So we offer a great yield on cash right now. [04:20] I think 3.5% with some added incentives on top, which still gives us 75 basis points for, for ourselves. And, you know, [04:32] the cash sweep program, we call it, the high yield offering has gone from basically nothing in 2022 to [04:40] tens of billions of dollars under custody so that's grown into a big business the margin book

[04:47] which is a tool, margin is a tool that active traders use to use leverage on their portfolios. We weren't really that competitive on margin, to be fair, up until 2024. And then we really started competing on rates, competing on user experience. [05:05] And now the margin book is, I mean, it's well more than doubled in the past year. And now that's grown into a big business. And Robinhood Gold itself, which is a subscription product, were up to... [05:20] 4 million gold subscribers, and that's really ramped. Now at this point, 15% of all of our customers [05:30] thereabouts are Robinhood Gold subscribers, and of the customers that join on a quarterly basis, the new customers, [05:37] it's like upwards of 40%. So we've really done a good job. And just the gold subscription itself is now a nine-figure business. And that's really before... [05:49] We've made significant [05:52] progress on expanding Robin Hood outside the US, still very much a US business. [05:58] And very little progress sans Bitstamp, which is our institutional business, on expanding from retail only to business and institutional. So if I think through like Robinhood's trajectory, I think right now the engine behind our business is active trading. So that's sort of like the first area where we're targeting investors.

[06:19] being number one. We want to be the number one business for active traders. [06:24] But we don't want to just stop there because not everyone trades. The second arc of our business, we call it, is number one in wallet share for the next generation. So we really want to be the place where you put all of your money and we want to [06:36] handle all of your financial needs. And that's where we track assets under custody and gold subscribers. We want to be a big platform with lots of assets serving all of your financial needs. [06:48] And then the third arc, which is the one that's [06:51] Longer term, it's I kind of call it our 10 year arc. How do we go from US? I [06:56] primary to fully global and retail only to business and institutional. I think if you look 10 years from now, we see a world where more than half of our revenue could be outside the U.S. and also cut another way, more than half of our revenue could be business and institutional rather than retail. So there's just a, [07:19] multiple vectors by which we could grow the business by 10x. And I think we have a plan to pursue all of them. [07:28] Global domination of your finances. Yeah, it's like and we view it really as can we apply technology to [07:37] to make it so that [07:39] You know, we know people have options and there's a lot of services that want to do this, but, um, [07:46] Can we apply technology to cut down costs and at the same time give you the best customer experience?

[07:52] So that you just don't have any reasons to move money outside of Robin Hood. You have plenty of reasons to move it in, but [07:59] Robinhood products and services can serve you better on platform and you shouldn't have to need to [08:07] withdraw money to your bank account or to another service because it should just be a no brainer to keep it with us. So we're maybe like a week or so after the yes/no event. Can you share more about what you released? [08:21] We released a few things. One is [08:24] a big upgrade to prediction markets. So one of the things is you can see prediction markets now on web [08:32] Whereas in the past, [08:33] you had to be logged into the app. Which I think one of the big use cases of prediction markets is not just as a trading product, [08:41] but almost as a news media product, the source of information. [08:44] So that makes it a lot easier for people to engage and interact with our prediction markets. [08:50] The second thing is combos for sports. [08:53] And [08:55] and the ability to [08:57] trade individual player actions. So the sports experience in Robin Hood [09:02] is just getting much deeper and much more dynamic. You can put together [09:07] lots of trades into one big one. Is this like a parlay kind of an alternative? Yeah, very, very similar. [09:14] And [09:15] I think the other thing that gets me excited about that is you can imagine doing it for any category of prediction markets. [09:22] not just sports.

[09:23] So these contracts over time will get [09:26] much more personalized and specific. [09:29] and you'll get into things like bespoke insurance products. [09:33] which I think will be really cool. [09:35] And then... [09:37] The other thing we released was [09:39] Robinhood Cortex. Now you've seen Robinhood Cortex is our AI model. [09:45] You've seen us do a few things that are AI powered in the app. We've had Cortex stock in Crypto Digest, which explained to users exactly what's going on with a stock in real time. [09:57] And then we've also added [09:59] cortex powered screeners and indicators on Legend, which is our [10:03] pro trading platform. [10:06] Now you can talk directly to a cortex. Mm-hmm. [10:09] So... [10:10] Basically Cortex has an interface in the app [10:13] which has full context of all of your [10:18] financials and also real-time market data [10:21] It knows about all the [10:23] tradable stocks and prediction markets and instruments. [10:27] and it can do stuff for you. [10:29] So for example, if you want to... [10:33] scan through the entire universe of traded symbols and place a trade. [10:37] you can just ask Cortex to do that. [10:41] with your voice. So it's like a full AI assistant that has like a [10:47] super intelligent financial knowledge at your disposal. [10:51] What are you most excited about? [10:53] I'm excited about that one because there's just a lot of

[10:57] a lot of times where I have a specific question and [11:01] I don't have a way to easily take all of my financial data, put it into ChatGPT or another AI model, [11:09] and get a good answer without doing a whole bunch of work. [11:13] So this sort of like, [11:15] gives you that type of intelligence where all of your financial data is. Sorcery is brought to you by Brex, the financial stack trusted by more than 30,000 companies, including one in three venture-backed startups in the U.S. Nearly 40% of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, Brex is designed to help you spend smarter and move faster. [11:45] checking, treasury, and FDIC protection into one powerful account. You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, [12:15] That's B-R-E-X dot com slash sorcery.

[12:45] turing.com slash s-o-u-r-c-e-r-y on jack altman's podcast and hello jack he was so helpful with some of the questions um you guys talked a lot about the generational differences between um attitudes and behaviors in brokerages and financial services so how do you one can you just reshare that and then two how do they fit into each of these different products that you have [13:13] Yeah, I think one of the things we spend a lot of time talking about is we have to do two things that are... [13:21] simultaneously somewhat challenging, which is make sure we grow with our customers, [13:27] We don't want someone to just be 24 years old, opening up a Robinhood account, and then graduating to Schwab or something like that, which means we have to actually add more products and features as those customers grow and their lives get a little bit more complicated so we could serve them there. [13:47] while at the same time as we do that, make sure the product is still attractive to someone that's starting out for the first time. [13:55] So we don't want to lose the next generation because, you know, a lot of our predecessors get into this trap of being a generational company. [14:04] And I think that's certain death, right? Because eventually... [14:08] Like nobody's figured out how to live forever. So eventually their kids are going to inherit the money and, you know, their kids are, you

[14:15] probably less tied to the legacy brokers than their parents and grandparents. So yeah, I think it's simultaneously growing with our customers, making sure we add the products and services, while also making sure we pay attention to the next generation and continue to be relevant for them and add all the new things that get the 18-year-olds and the 24-year-olds into the markets. Is that prediction markets? [14:45] a lot of people in their 40s and 50s engaging with prediction markets. [14:50] You do tend to see young people adopting technology sooner and earlier and just being open to trying new things. But I think the reason we got into prediction markets was we were just very interested in it. [15:02] Um, [15:04] Yeah, it's right that it's turned into a young person thing. But yeah, I didn't really see it going that way necessarily. I mean, you look at some of our competitors, uh... [15:18] Some of them have been offering prediction markets for quite a long time. I mean, you look at even the big guys like Chicago Mercantile Exchange, Interactive Brokers. But really with prediction markets, it was the 2024 election that was, I think, ground zero. That was the time that everything changed because up until that point, there wasn't an event big enough to actually bring in a lot of customers.

[15:48] presidential election just started it all really and created this new prediction market super cycle. And a lot of it now is sports, but [15:59] We see a world where prediction markets can disrupt multiple gigantic industries, not just sports. Like I was talking to someone last week. [16:11] And you might know Robinhood just added weather prediction markets on the platform. And nobody really thinks of using weather prediction markets in this way, but there [16:23] You can trade and hedge fire risk. You can hedge hurricane risk. And if you think about the process of like... [16:34] insuring yourself against a fire or a hurricane, it can be very expensive and it's cumbersome. You have to talk to a broker on the phone. [16:43] And the contracts that we have available right now are already competitive with some of those products. And this is before they get more bespoke and personalized. So I see a world where... [16:58] the insurance industry can just be disrupted by a lot of these products. So I think [17:05] Yeah, there's a lot more to build. We're still pre-institutional adoption at large scale. [17:11] I think that it's still early innings in the prediction market super cycle. Yeah, it's super early. At least what I've seen working with Calci over the last year on some things, they were a sponsor. What I've learned from prediction markets over the last year is it's crazy to see what it takes. And there's similar parallels here with the story to get federally regulated and become legal and all that kind of stuff.

[17:41] you know, everybody democratize access to it. But the crazy part is you never really know what something will look until it's out into the public. People start to adapt it to themselves. So they've been working on prediction markets for forever. And so, you know, you're hoping that people use it for these great financial... [17:59] cool arbitrage moments, that kind of thing that are a little bit more sophisticated. But then you unleash it to the masses, you have to market it really aggressively because it's super competitive and then it becomes somewhat degen and that's become a narrative that comes along with it. And I think that's where the younger generations come along. But it's cool because there's also a lot of really sophisticated people that are taking it on and using it. [18:23] and making good amounts of money, whether it's weather or anything like that. But my biggest observation from this was you never really know what something will become until it's actually unleashed into the world. And then it takes a lot of effort to kind of conform it back to what you want and the principles around it. Are you concerned at all about any of the aura around that, how it's perceived? I think that you definitely make a good point that the shape of something is not clear. [18:53] And I think there's definitely been a lot of questions and a lot of things that we have to work out. [19:01] you know, from [19:03] market integrity and what kinds of contracts lend themselves to like [19:08] easier spoofing and manipulation than others. For example, you can look at the mention markets and say, well, if someone's aware of a mention market, then they can just

[19:19] say the things, right? And we've been generally pretty careful about what we list. I think the thing we want to make sure we get right is integrity. Because if people are concerned about market integrity, then they stop participating in the markets. And that makes everything downstream a little bit more challenging. It's harder to pull liquidity, prices get worse, customers are sort of like reluctant to participate. So I think there's probably more [19:49] - I think it's a good question. [19:50] But I do think we've got the tools to do it. I mean, if you look at other [19:55] asset classes like equities. We've had to do surveillance and market integrity and monitoring for insider trading for many, many decades. So I do think [20:08] This is one thing that the industry is poised to do. And I think we'll do a pretty good job of it. And there might be some twists and turns where we kind of settle on some common standards and common ways of doing things. So I was talking to Amit, right? I think we were at Palantir. He's great. Right around the Palantir interview, which is really funny. I saw some clips from that. I don't follow stocks as closely as I used to. I want to know from him, he covers this every day. [20:38] really fun ones too. And this last year, we had a little bit of resurgence of this Wall Street bets energy. And so what's the difference between retail traders today versus retail traders in COVID?

[20:50] And I ask you that too. Yeah. I mean, my take on that is... [20:55] COVID was a little bit idiosyncratic. So there were a couple of waves of... [21:01] activity that I remember. Okay, one of the waves was, you know, companies that [21:08] had filed bankruptcy. Like there was a little bit of a spike of activity around Hertz, for instance, which which hit the news cycle. And then [21:19] And actually, I think in hindsight, that was like a negative criticism of Robinhood. Oh, we're facilitating, making it easier for these people to invest in bankrupt stocks. And I think we've done a lot to make it clear, this company has filed bankruptcy because [21:36] We actually, my general philosophy is [21:40] We want to make it easy for people to do what they want to do, of course. [21:45] so long as it's compliant and everything. But we should also give them the information so that they're aware of what they're doing. Now, it turns out, I think, in the Hertz case that [21:57] those traders made money through like an interesting contortion of bankruptcy proceedings. [22:04] But again, that was like a little bit of a trend. [22:08] Then there were the companies that got hit hard by COVID, and maybe in the past the government could have bailed them out, but this time, [22:16] They didn't. And so I kind of think of it as a retail bailout.

[22:22] Rather than the companies getting the money as they had in the past, retail investors got money in the form of stimulus checks. And a lot of that went into... [22:32] brick-and-mortar retailers like GameStop and AMC. [22:36] And also the airlines, like American Airlines was a trending stock at that time. So there was a component of nostalgia, I think, associated with it. People were familiar with the names. Maybe millennials remember a world where they would go to the movies and sort of like would go into... [23:01] uh, GameStop and shop for games. And they kind of like missed that because everyone was locked up at home and that seemed like a very, very, that's like the furthest thing you wanted to do mixed in with some actual. [23:15] due diligence where, you know, some people were very systematic about understanding what the Fed was going to do. There were a lot of people that were broadcasting and actually, you know, doing deep intelligence about, you know, who's buying the stock and what the prospects are. [23:34] Okay. [23:35] But yeah, it was, and then all of this, of course, culminated in, uh, [23:40] in the GameStop sort of like meme craze followed by the inflection of crypto activity that I think culminated in our IPO in middle of 2021. But I think the feeling that at least I got

[23:53] in 2021 was it felt it felt very unstable in a sense like the thesis behind why people were investing in these companies [24:03] were sort of like ephemeral thesis. [24:06] They had to do with the state of affairs at the time. Whereas now, it feels a little bit more meaningful. I mean, we're in the middle of a big technology crisis [24:18] disruption wave with AI. The feeling that I get, and I think many people get, is that we're still pretty early in that. And of course, there's talks about whether we're in an AI bubble. But if you look at how many chips are being produced, how much inference is being purchased, how many weekly active users ChatGPT has, it's [24:38] it does seem like there's actual substance and real revenue and real products behind it. [24:44] Um, [24:45] And the companies that retail is investing in are companies that... [24:51] by and large have, I mean, they're not like stories, they're companies with real revenue and real growth. So I think it does feel qualitatively different. And I kind of juxtapose this [25:04] I think Robin Hood... [25:07] for better or worse, is kind of a bellwether for what retail is doing, right? And you look at [25:14] Our business right now, we've got about 350 billion assets under custody, and it's fairly well diversified. You know, the bulk of it is in stocks, and we have a little bit of crypto as well. And if you look at the volumes, the volumes are really spread out. I mean, we're seeing record trading volumes.

[25:34] pretty dispersed among a lot of different stocks. [25:39] Whereas in 2021, Robin was much less diversified. We had higher concentration in crypto, particularly Dogecoin. [25:49] And [25:51] a lot of the activity was much more concentrated in stocks that were sort of like these meme story stocks. So I think... [26:02] I think the health of the retail investor has improved. I think they-- I don't want to say that-- some people say, OK, retail investor has grown up and matured. [26:13] I don't want to be pejorative because I think retail investors have always been smarter than people give them credit for. But I think the maturation of the retail investor is kind of [26:22] mirrored the maturation of Robinhood the business. We've gotten more diversified. They've gotten more diversified. And there's sort of like... [26:31] much more stable foundation underneath the activity and also our company. [27:01] or by public investing. Full disclosures in the description. Founders ship faster on Deal. Set up payroll for any country in minutes, hire anyone anywhere, and get visas handled fast so you stay focused on scaling. Deal takes care of onboarding, HR, IT, ER, benefits, and compliance so your team can grow without borders. It's why more than 37,000 fast-growing companies trust Deal to move

[27:31] One of the coolest stories from this year, I think, was Opendoor. And this was an amazing moment. This happened kind of a little bit spontaneously, but I was able to capture [27:42] Keith Reboy right after he rejoined the board. You saw the run up of Open Door and then you actually saw action happen against it. They brought a new board. They brought in really phenomenal actual executives and are going about change in a way that you wouldn't have expected a huge run up would happen from, you know, just retail investors. It was a really, really cool story. [28:06] I think being public [28:07] gets a bad rap in many ways. I don't know, you probably talked to a lot of people, some of which are public, [28:15] And if you ask anyone [28:17] Whether they like being public, they'll probably say, no, it's terrible. It's just... [28:22] You have to do earnings. It's a chore. You can't do anything. And I actually think it's incredibly powerful to be a public company for a couple of reasons. [28:31] I think one [28:33] and we've tried to do this ourselves if you start thinking about earnings as an opportunity to engage with your shareholders both institutional and retail [28:42] you can do a lot more with it than if you're just sort of going through the motions and you think of it as a chore. [28:48] So one year ago, we were kind of doing earnings the old-fashioned way, right? We had the Polycom. We had the script. I would read the script. We would take the questions over Polycom. Sell-side analysts would be on the call exclusively. And then I was looking at the recordings. And even back then, we had a community of retail fans that would listen to our earnings and stream on YouTube. I always looked at that, right?

[29:18] Amit was one of the first, but there were a bunch of others as well. And I was just like sitting there looking at it. [29:25] And I said to myself, "Man, [29:27] I'm bored. [29:28] And if I'm bored, the people watching this must be really bored. And at one point, the live streamer, I forget who it was, he kind of apologized to the audience. He's like, you know, I know it's a little bit dry. Sorry, guys, but maybe we'll get to Q&A soon. And they would get to the Q&A, which would be the engaging part because we would be unscripted, even though the Q&A was also quite scripted. So I was like, all right, let's like tear this down from first principles and make it fun. [29:58] example, what's an analogy, something we could learn from and lift from maybe another industry that... [30:04] is similar to this, but entertaining. And I thought, well, you know, it's kind of similar to a, [30:10] NBA Playoffs post-game interview. [30:13] There are some differences, but some similarities. You've had something happen, whether it's a quarter or an NBA Finals game. You've either lost or you've won. It's either a good quarter where you're beating and you have good things to say, or maybe it's a bad quarter. But it's kind of entertaining either way. If you look at Anthony Edwards... [30:35] It's entertaining whether he wins. He comes in and he's wearing like his outfit and he's got a swagger and he's like, you know, we crushed those guys at 50 points. [30:45] or when he loses, [30:47] He's shirtless and he's got the towel on his shoulder and he's just like, the body language is good, is bad. Maybe he throws some shade at...

[30:56] the coaching staff or the teammates. [30:58] But you want to watch either way. So we asked ourselves, you know, how can we actually make this informative but also entertaining? [31:06] And we started... [31:09] Q4 of last year, [31:12] was our first earnings call where we did live video. And it was like in our office, it was sort of like one baby step. And then you fast forward to our previous earnings call was at the Chase Center. [31:24] We had live video. We had live Zoom Q&A where retail investors would basically live stream and ask their questions live. And we had sell-side analysts, but also buy-side investors and the media in there. Everyone always told me, okay, sell-side analysts are the only ones going to these calls. And you ask yourself and you ask others why. Well, there's no good reason why. [31:54] feel like they didn't have as much time if they're competing for question slots with retail investors in the media. So I think if you break it down from first principles and rebuild the experience, a lot of the constraints that people think exist aren't real constraints, and you end up with a better product. So we went from, I think, hundreds of [32:15] listeners on the old... [32:17] Polycom [32:19] style earnings to tens of thousands, maybe even 100,000 at the last one. So it increased the actual audience of our earnings by multiple orders of magnitude.

[32:32] And in Open Door, you mentioned Open Door, [32:35] They saw what we were doing and they were like, we want to figure out how to engage retail too. [32:39] So they became the first partner that we actually, they not only live streamed their earnings and took questions live, but they live streamed it in our app on Robinhood to their retail shareholders. And so I think other companies are starting to see this and say, okay, yeah, we want Robinhood. [33:00] Retail shareholders. Retail shareholders become kind of defenders of the company when things get a little bit rocky, too. I mean, you kind of see it. And this is one of the reasons why I really want retail investors to be able to invest in AI companies. [33:17] because [33:18] If you look at who's defending AI companies against controversy, it's basically AI researchers that work there [33:25] or venture capitalists that are investing in them, but they don't have like a [33:30] grassroots effort, a retail army that's actually supporting them. And I think that's a problem. I think that is one thing that worked very, very well for crypto, particularly when [33:43] The industry was under threat from regulatory overreach. So many retail investors had access to crypto from the very beginning that there was like this army that became a significant voting block. Right. And, you know, they own the thing, so they want to protect it. They want to go up and they want it to go up in value. They wanted like a clear regulatory framework.

[34:04] And AI doesn't have that. AI is like one of the fastest adopted products, but also one of the least popular. People are afraid that it's going to take my job, that it's going to affect my life negatively. I think a big part of that is there's no retail investment in AI. [34:22] I think Google to some degree has like patched that up a little bit by getting their [34:28] AI efforts into gear. But yeah, aside from Google, you know, OpenAI, Anthropic, all the startups, basically out of reach for normal people. Okay, so I heard you want to be the LeBron James of earnings calls. Did I say that? No, you didn't. Anthony Edwards. [34:49] LeBron James is one of my favorite players. I had a chance to meet him once, but he's kind of at the [34:55] at the tail end of his career. I'd like to have a little bit more longevity than that. I'll be sad when he retires because he's the one... [35:02] I think he might be the only NBA player that's older than me. Oh, my God. So if he retires... [35:08] My dream of being able to play in the NBA will be officially, I'll be like, it's unrealistic at this point. It's over. Yeah, I can't make it anymore. It's done. Oh, my God. And that's interesting. Okay, so that brings us to tokenization. Because I know that you had efforts earlier this year, especially in France, with the release of offering, I think you now offer stocks in Europe? Yeah. Over 400? Over 1,500. 1,500? Yeah, we tokenized 1,500 stocks are available for trading in Europe right now.

[35:38] - Oh my God, on the last earnings call it was 400. [35:41] Yeah, well, we've really, the team's been cranking. Yeah, we've got a big plan. I mean, it's not a one and done. We'll tokenize some stocks and leave it. There's like a three phase plan, tokenize more stocks and then [35:56] We have to [35:58] integrate them into Bitstamp to allow 24-7 trading and also unleash them on DeFi so that you can self-custody them and do collateralized lending and borrowing and all of that stuff. So yeah, there's a lot more to do. So for people who don't know what that means, what does that mean? [36:17] Tokenization is the act of taking a real asset [36:24] an asset that has some utility and [36:28] You take that asset and you custody it, so you hold it somewhere, and then you mint and burn tokens against it. So, and then those tokens can trade 24/7 and have access to the world of decentralized finance. So the basic example of a tokenized asset is a stablecoin. [36:48] And it works in the exact same way. [36:50] I take a dollar. [36:52] I put a dollar or a treasury note or bill [36:56] in a box somewhere where it's custodied. And then I... [37:00] I mint a token representing that dollar. And now that token gets access to everything crypto has to offer: 24/7 trading, instant settlement, real-time payments that are 24/7, and then all of the software that people build in the crypto world.

[37:16] to allow for [37:18] trading, lending, and borrowing is accessible as well. And I think the interesting thing that it allows that is very difficult to do now is it can take things that are illiquid and not tradable and make them tradable. So I wrote a piece in the Washington Post in January of this year about how private markets need to be unlocked and tokenization could actually be the gateway. [37:48] In the same way that for stablecoin we can take dollars and [37:52] custody them, it's very easy to take private companies and custody them. And you can mint tokens against that, and suddenly you have... [38:02] real-time 24/7 trading of private assets, which solves a lot of the historical problems that we've had with with private assets. Not enough liquidity. You have to build all this infrastructure to get them trading. And by the way, once you have this infrastructure, you need market makers. I think crypto provides a lot of that out of the box. So you sort of like [38:27] solve both sides of it simultaneously. You know, traditional finance... [38:33] I'd like to say in traditional finance, it's very easy to custody something like we know how to custody something. And. [38:42] It's sort of like once you custody something, [38:46] you don't really have to do a lot of work. You're just holding it somewhere. It can even be manual. It could be, you know,

[38:53] You're holding pieces of paper that have legal agreements. But the actual trading becomes difficult. You know, you have to [39:02] create an alternative trading system or an exchange. You have to attract liquidity. That stuff is very, very difficult. But in crypto, [39:10] It's kind of the opposite. The trading comes for free. Fractionalization, it running 24/7, [39:17] getting liquidity very easy. So if you combine these two things, [39:23] right where [39:25] Custodied something is simple and trading something once you have it custodied is simple. Then you unlock all sorts of things that were difficult to make tradable and liquid. So private companies I'm excited about, but you can also imagine you could do this to works of art. [39:43] a car, you can tokenize a car, you can tokenize unique collectibles. [39:50] I think that we will likely see a world where pretty much anything can be tradable real time like a stock. There's a publicly listed entity called Destiny. [40:02] Yeah. And that's a closed-end fund. [40:05] Is that just structurally incorrect for this? What do you think about that? Because it's the same thing for privately listed companies in a public domain. Yeah, so that's a closed end publicly listed fund. And we actually [40:20] We've announced something called Robinhood Ventures, which is the general umbrella underlying our efforts to...

[40:27] sort of like facilitate access to private companies. Tokenization is a mechanism to do that, but we don't, it's not yet legal in the US to tokenize [40:38] private companies. So we've done some early steps along that outside the US in EU, where we're tokenizing public stocks. And we also did [40:48] a token giveaway of SpaceX and OpenAI. [40:52] So in the US, we have Robinhood Ventures, and we filed Robinhood Ventures Fund One, which is a closed-end listed fund that will invest in private companies. The difference is the fund is, by its nature, more diversified. So you're not able to trade an individual company, but you're trading basically a basket of companies. And I think it's good, but it's... [41:20] Obviously, it's a different product. This is more of like if I want to passively... [41:25] have exposure to private companies as a broader asset class, closed-ed fund is a great solution. And I think it's probably the best we can get in the US until tokenization becomes legal. [41:38] and then outside the US, [41:40] we've already demonstrated the mechanism to trade individual companies. Yeah, it's interesting. And I really like the premise. I mean, it's kind of similar of getting access to AI companies where all the value is accruing is just this insane opportunity that a lot are missing out on. And something similar to when we were interviewing Alex Karp in his office, who was right after their earnings, and he was saying their run-up this year,

[42:07] They're offering working class [42:09] Americans. [42:11] exposure to venture [42:13] type returns, like something that you wouldn't normally get. And the outcomes of it is insane. And the people that actually get the exposure and the effects is just amazing. And then there, you know- He's talking about just retail investors investing in Palantir stock. Yeah. Okay. Interesting. Palantir has done well. Yeah. Okay. So [42:33] In terms of the private companies, how do you gain custody of their shares? [42:40] Do you ask for permission? How does that work? Well, I think the OpenAI and SpaceX giveaway were generally an exception. I wanted to be the first to tokenize those. [42:51] But-- and there are mechanisms where [42:55] You don't need the permission of the company. Yeah, you can acquire LP interests and an SPV, for instance. For Robinhood Ventures, thus far, every company has been sort of like direct. And you can see the companies are announcing their fundraising rounds. And Robinhood Ventures is sort of in their name as an investor. And I think... [43:18] That's definitely the preferred approach. And generally we would [43:22] We would like that, right? We want the companies to be open to us participating and see the value. I think what surprised me is... [43:31] I would have thought that [43:34] we would have more issues getting companies to return our calls. Because when we first got into this area, we offered a product called IPO Access, which is basically retail shareholders getting into IPOs of companies. And we did it with our IPO, which was the largest retail allocation of an IPO of its size.

[43:58] And we did something like 25% retail. [44:01] and this was in 2021, the first year, I just really had to, you know, [44:06] claw and scratch and really fight to get into some of these deals. You know, the companies and the CEOs would say, why do I need this? You know, why can't I just... [44:17] go public the normal way. I just want to get it over with and keep running my business. That was kind of the reception. But this year, [44:26] Basically, every consequential company going public is reaching out to us beforehand, asking us, [44:31] for advice on their retail strategy, how they can engage retail. [44:36] And we're starting to see not just [44:39] big allocations to retail, but companies actually talking about it. When they do their IPO media, they say, well, we gave retail a huge allocation. We love retail investors. Robinhood helped us with that. So there's been a shift in the [44:53] from me having to like really argue and advocate and work hard to get into these deals to now it's just much more organic and companies see the value. And I think the same thing is happening. But [45:06] at an accelerated rate for private companies. And I think that five years from now, the exact mechanisms, whether tokenization is legal or closed down funds, [45:19] That's less clear. But what I know is I'm very confident that retail investors getting exposure to private companies

[45:29] will be [45:30] easier, much more common, and the companies will, by and large, want this, and it'll be a standard part of their capital raise. I'd like to go even earlier stage. I mean, my vision is, I want to drive up the amount of entrepreneurship in this country. And it's still very, very hard if you're an early stage [45:49] founder to raise capital. You have to work on your product and spend a lot of time refining it while also fundraising full time. And that's very, very hard to do. So if we can make that a little bit easier, [46:04] and help with raising money at the early stage, [46:08] It can lead to more entrepreneurship. And the risk is higher, but also the return potential, if you're an investor in these companies, is much greater. [46:18] So that's what I'd really like to build to early stage opportunities being unlocked for retail as well. [46:25] On the topic of AI, can we talk about harmonic? Sure, yeah. Okay, so what is a vision and the mission of harmonic? [46:32] Yeah, so harmonic is building what we call mathematical super intelligence, and it's an artificial intelligence that can solve math problems. [46:41] better than any human mathematician. And so the company has been around for a couple of years. I'm chairman of the board and co-founder, but I'm not like day-to-day operating. Well, the North Star was, can we actually solve really, really important math problems like the Riemann hypothesis or, you know, Hodge conjecture?

[47:03] You know, there's like... [47:06] this group of math problems that have been open for hundreds of years that are called the Millennium Prize problems and they're considered [47:14] very big, difficult and actually valuable. [47:18] So that was kind of the North Star. And the reason we wanted to do that was if we could solve those problems, [47:24] Well, maybe we could-- everything downstream of math, like theoretical physics, becomes unlocked. So then you can imagine-- [47:32] solving really hard physics problems. Like, I don't know if you're interested in this, but I was very interested as a physics major. [47:39] how can we unify [47:42] the strong, the weak, and the electromagnetic force with gravity. [47:47] So it's sort of like there's these four forces. Three of them, we kind of have a theory for how they originated from one... [47:55] single force in the early part of the universe. And then we have a hypothesis that we can unify these three. Gravity somehow fits into there too. But we just have no idea how it fits in. And I think this is the holy grail of theoretical physics, how to unify gravity with the other three forces into a theory of everything. And actually, if you can solve that, then there's all kinds of exciting engineering developments. Like depending on how that theory looks, [48:25] than light travel and it gets really crazy. But anyway, these are [48:31] We had to think of some near-term milestones because we can't just go after the Riemann hypothesis or Grand Unification on day one. We started solving like competition math problems and we became one of the first models to actually get a gold medal on the International Math Olympiad.

[48:49] which is the hardest math competition in the world. And then after that, my mental model was, okay, we're going to release this product and we're going to commercialize. And we're probably a year away from actually solving problems. [49:04] unsolved math problems, because it seemed like the gap between, you know, hard competition problems and unsolved math problems was very, very large. But in November, just this last month, Aristotle, um, [49:19] I did this analysis. [49:22] Aristotle assisted in... [49:24] or solved 11 Erdős problems. [49:27] So, [49:28] I'll tell you what an Erdős problem is. So Paul Erdős was, he's considered the most prolific mathematician. He would go around and basically stay with his friends for two weeks at a time. His friends were all mathematicians. And he would kind of like... [49:46] help them work on their math problems. And he was like a traveling salesman of math [49:51] And so he became really prolific. He published thousands of papers. There's actually an Erdős number, which is similar to a Bacon number. Have you heard of the Bacon number? [50:02] It's basically how many degrees away you are from Kevin Bacon in a movie. So if you were in a movie with Kevin Bacon, your Bacon number is zero. If you were in a movie with someone who was in a movie with Kevin Bacon, it's one. [50:15] So there was an Erdős number two, which is if you coauthored a paper with Paul Erdős, you're zero. And if you coauthored a paper with someone who coauthored it with Paul Erdős,

[50:25] "You're one." [50:27] There's even an Erdős-Bacon number. [50:30] Right where you add the two so then you have people that have co-authored a paper with Paul Erdős and [50:37] starred in a movie with Kevin Bacon. Who's hit that number? So there's someone that has an Erdős-Bakon number of three because they were in Goodwill Hunting with a mathematician who co-authored a paper with Paul Erdős. [50:49] Anyway, there's these Erdős problems. There's about 1,100 of them. About half of them are still unsolved to this day. So half of them are open. And now with Aristotle, people are doing like systematic. They're going through them. And there was one that Aristotle solved fully autonomously. And then a bunch of others where Aristotle assisted in solving or converting into problems. [51:14] formal math language. So that was quite a bit faster than I thought that people would actually be using the product to accelerate math. And then actually last week we [51:23] we announced a pretty cool result. There's a William Lowell Putnam math competition [51:30] if you've seen a beautiful mind, [51:33] they mentioned this math competition because John Nash, who was a Nobel Prize winner, he never did well on the Putnam. And so he always sort of like had a bit of a chip on his shoulder. And he was like, Oh, that that person's really smart. They took the Putnam in this year and they did really well. Well, Aristotle [51:50] which is the name of the math model that the company builds. [51:55] in a consumer form, which just people can use freely, got 10 out of the 12 problems of the Putnam correct.

[52:03] which is a lot more than I got on the Putnam. So like the, uh, I got, uh, I got a zero. Uh, actually, I didn't even check. I might've gotten some points, but I knew I did so poorly that I didn't even like check my result. [52:18] But, um... [52:19] But yeah, it's like the child has surpassed the parent in mathematical ability and then things get weird. [52:25] Okay. So is harmonic gonna solve time travel? I hope so. [52:32] Yeah. If there is a solution. If there is a solution. Yeah. I just interviewed Paul Murlucchi and he was like, I don't think people travel forward in time. I think they travel backward in time. Or was it the opposite of that? I think it would be back. It would be the opposite. It's pretty easy. He had like a hot take on this. It was great. He's like, I don't think they're coming from the future. I think they're coming from the past. [52:55] Yeah, well, you could imagine traveling forward in time is, uh, [53:00] is much easier in a sense because you just have to freeze yourself. Traveling backward in time might actually violate fundamental laws of physics. Fun. Yeah. So that one's harder. Faster than light travel, I think, is somehow a little bit more tractable, even though that's also very hard. It might be impossible. OK, what is your hottest prediction for 2026? [53:26] *sigh* [53:28] my hottest prediction for 2026 is, [53:33] That's a tough question. I mean, look, we have sports, we have weather, we have economics, we have politics. There's so many options. I really I'm hoping I don't know if this is a hedge or speculation, but

[53:46] I hope we get a lot of snow in California this year. Okay. Yeah. [53:50] - Snowboard or skiing? - I'm predicting or hedging. I like to ski. - Okay, great. All right, well, lastly, we just wanna address, you were on the cover of Men's Health, [54:01] I can sign it for you. I actually have about 75 copies in there. Really? You can't find a copy of Men's Health. I've bought them all. How did you get in there? [54:11] Well, word got out about my [54:15] amazing physical fitness. Super athletic abilities. Yeah, you know word travels fast. I don't know how they did it but they were like, "Hey, we want to write..." We saw your earnings calls. Yeah. You got to get in print. They did this interesting thing where they juxtaposed Robin Hood's like, [54:32] financial health with my physical health. [54:34] And they're like, just as the company is getting to [54:38] profitability the ceo is cutting body fat and [54:41] Wow. Increasing his bench and his deadlift. No, the one thing is in that article, [54:47] So the journalist followed me around for my workout. [54:52] And she was like taking notes and recording. And so this was like, [54:57] I was like, okay, this could go one of two ways. One, I could be really nervous and completely screw up. [55:03] Or this could be the best workout of my life where it's like added motivation to lift more weight. [55:08] So it was the second. This was like I went for 90 minutes straight and I was like setting PRs and everything. [55:16] So I was deadlifting, I think, four plates. So it was a 400-pound deadlift.

[55:21] And... [55:23] you know, I worked really hard to lift that weight. It was a lot of weight. [55:28] And in the article, she puts my warm-up set [55:32] So she has me like looking really intense, but lifting the 135 pounds. What a shame. And I worked. [55:39] I tried to get them to change it, but... I'm sure that's what happened. Yeah. [55:43] I don't know. That's my story. I'm sticking to it. That's amazing. Well, thank you so much, Vlad. [55:48] Yeah. [55:49] Thanks for being here.