Robinhood’s CEO on letting AI trade your money

And then over time, because we wanted to start light and kind of figure out how customers would use it and what they wanted. And so over time, we've expanded assets. Now you can do options. Now you can do crypto. We've added limited margin capabilities as well. And what we found was, first off, customers love it. We have over 100,000 customers that have actually onboarded onto our agentic trading offering. And as we look at the metrics, it's like continually and steadily increasing, especially when we add new capabilities and we unlock things like limited margin. And so the trajectory and the retention has been really, really good.

But what people, there's a couple of things that are clear next steps that we want to improve that have been just adding a little bit of friction. One is not a lot of people want to use Claude Code or Codex. And, you know, in our circles, we're a little bit more tech savvy, probably know a lot of people using Claude Code and Codex. But for your average individual, it's a little bit too complex. It's still kind of a developer tool for computer programmers. And the friction of going from your Claude, connecting it to an MCP, linking it to Robinhood, and having to monitor in a different place where you're managing your strategy is not ideal.

So that's one problem that we fixed with Robinhood agents. The second problem is that a lot of times the general models When you plug in an MCP, they don't want to trade. They're not comfortable with it. They don't see the trading traces in their training data. They're not built for it. And so we've spent a lot of work, and this is the part that I think will continue, to make the models very, very good at using our tools, being aware of what Robinhood can do and how best to take advantage of the huge ecosystem and actually iterate to make it not just want to trade, but be really, really good at everything around it.

And so that's the big step in Robinhood for Robinhood agents. We're bringing it into your app, making it so you can manage it in one place and really kind of giving you an integrated experience for agentic trading. And it's just the beginning. You imagine more asset classes, more capabilities, everything that you do as an individual on Robinhood should be accessible to your agent. And over time, we want to systematically go through everything that an extremely sophisticated algorithmic trading firm or hedge fund would have access to and give that to our customers through Robinhood. And that means improvements on performance and latency.

A lot of these high-frequency firms, they compete over who gets to be the first port in the switch in the data center where the exchange or market maker is. right? So it goes quite deep. So more work on the performance and latency side, which we've been making incredible progress, more work on research and adding tools. Agent apps is a new thing where we can actually link to third-party developers who provide tools for our agents, help them monetize and give that capability to users. And more data and more integration with the broader Robinhood ecosystem. So yeah, we see a world where actually the North Stars, our customers should have an advantage over the hedge fund and the algorithmic trading firm. And there's just an endless amount of work to get to that point. And for people who haven't used it yet or seen it, I mean, it basically takes 60 seconds to set up. You name your agent, pick your model, decide if you want to have trade approvals on for the agent, which I think is important you guys are making it opt-in for the experience so that people, I think, can just get used to it.

Because it's going to be a new concept for a lot of people, especially the average Robinhood user. Like you said, they don't know about all these sophisticated tools and data sources that professional traders have access to. And we put a lot of guardrails in at the beginning. And some customers actually say, hey, I want it to have access to everything. But at this point, we still want to make it to be an affirmative decision. Do you want it to be autonomous or do you want to approve everything? Well, by default, we'll make you approve everything, but we'll have a path if you want to try autonomous. And then the fact that it's in a separate account as well makes it so that you have to make an affirmative decision for it to trade your money. It won't just go rogue and do that. So we've spent a lot of time thinking through the trade-offs. And I think we have a good base from which we can continue to iterate and to lead this new market, which I think will be a really big market.

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The separate account. piece. Did you want it to be one account? Did you have to do separate account for regulatory reasons or privacy reasons? Do you see it ever being one account, the AI and you in your account? I think that, I mean, it would be very easy for us to link it to your main account. I think part of the reason we wanted to do it is just to start small and to make sure that, you know, if we do get feedback from customers, we sort of tiptoe into the experience. A lot of people have been asking us for putting into the main account, or you can imagine like a flag so that you could flag and turn on an agent, plug it into an existing account that you have. So yeah, that's something we're thinking about. But I don't think at this point, it's a limitation of the product. I think a lot of customers really like being able to move things over and keep it separate. So probably the default being separate account will continue, at least for the time being. Out here in Silicon Valley where we are, we're here at your office in Menlo Park. I mean, there's whole startups being created to use AI to do autonomous trading, right? And it's a really interesting category and something I've been thinking a lot about and the idea of AI managing money for people

and not just, you know, sophisticated people, but everyday retail investors. And you're doing that now with this. I'm curious, like, where you think this is going? Are we going to a world where most people have AI make their, not only their decisions, but their trades, execution, all of

Vlad Tenevthat, have AI do that for them? Do you think that this is inevitable? I think a very large portion of the volume will be generated by AI agents. And I think that's because they don't have a lot

of the limitations that we have as human traders. They can be up 24-7, right? They can be multi-asset class simultaneously. So one of the things that are challenging for humans using our Robinhood app directly is you have to go to different screens to get different asset classes. The more things we add to the app, to some degree, the more work we have to do to make the experience coherent. So for example, we've got, we started with stocks and it was very simple stock experience, but then we added options, crypto. Now we have futures, prediction markets. In overseas and some of our other products, we've got DeFi with Robinhood chain, decentralized finance products and assets. We've got perpetual futures, banking, retirement, advisory. So it's a lot of stuff.

And that complexity is a challenge for humans, but for agents, it's just more context, more opportunity, more trade ideas. And so, you know, we've started seeing the earliest iterations of Robinhood agents. We see people constructing option strategies, right? And it's like, I have a very specific thing that I want to do, trade that I want to put on. Maybe it's an iron condor or something. And, you know, it's just, I can tell my agent and it'll take the data. It'll put it together. It makes that really, really easy. And that's kind of a automation use case. It's like removing a paper cut. But you imagine we plug it into all assets. We plug it into all data sources and you'll see the use case is getting more complex. The strategy is getting a lot richer.

Yeah, I see a world where a large portion of the trading volume for an individual investor, for our customer base writ large, is generated by AI agents. But that doesn't necessarily mean the vast majority of the assets are going to be agentically trading. I think the vast majority of the assets will probably be held long term, but the trading activity will probably go more and more towards a Gentic. It's an interesting time. too because people are getting used to products like Muse, Instinct, et cetera, making purchases for them agentically and using AI to save money, pay for things. So I feel like your timing's actually pretty good because the average everyday AI user is starting to realize like, oh, I can use AI to interact with my money. Yeah, absolutely. In a way that six months ago no one was really doing. I think, yeah, there was still that gap of I don't really feel comfortable, you know, giving my AI my email or, you know, the keys to my brokerage account. I think we're going through the shift. And it happened with other new technologies too. I mean, I remember when the internet first became a big thing and people were very nervous punching their credit card number into a website. Yeah, I remember. Didn't feel secure. It was like a safety concern. And

it became clear that it's actually more secure than handing your credit card over at a brick and mortar register same with mobile you know when we got started with mobile it was still the the overton window hadn't shifted to mobile being your default way of managing your finances still people thought of it as it's where i play games or do not serious stuff so the idea of my finances being on on my phone seemed sacrilegious almost. Yeah. Yeah, I think we'll see the same thing here. We're starting to see it. And so we're probably early, but I think the time is soon. When your team was showing me the demo, I was thinking too, this really gets at the original mission you had for the company, democratizing finance, because AI, those paper cuts you described, putting on complex trades, all these things, potentially a lot more people could be doing more complex things with their money and not even needing to fully understand all the complexities.

Yeah, and the AI could explain it to you. Yeah. You know, much better than reading a book. The interface becomes simple. Yeah, I mean, options trading is probably a great example. It's so complex. Options trading is very difficult. And you all had, I think, still do have the best interface in terms of learning options. But I got to be honest, it still is complex. Yeah, particularly if you go into these multi-leg strategies. I mean, we can do what we can to illustrate and say, okay, well, this trade, you know, you've got limited upside, cap downside, you know, and we'll show that graphically. And, you know, we can generate all of those visualizations and make them available to agents as well.

What the agents can do is take your intent. It's like, hey, I want to put on a trade for this stock. I want to cap my downside. I want to have, you know, unlimited upside, those sorts of things. and it'll actually, they do a pretty good job of constructing the right legs of the options trade for you. I'm curious where you think the edge will be in investing and trading as AI proliferates. I mean, you started this conversation by saying, we're always trying to play catch up with the big guys, trying to get people a leg up. The big guys are always gonna be trying to get their edge. So this cat and mouse game feels like it's not stopping anytime soon.

But if we think big picture, a world where everyone's using AI to manage their money. I think the edge will be always moving. There's not going to be like, oh, everything's still and the edge is right here, the alpha is right there. People are always building new products. Even us, you look at Robinhood Chain, which is our new blockchain that we rolled out, optimized for real world assets. I mean, as soon as that went live, it surprised us with just a huge amount of developer activity, DEX volume. A lot of the traders from other chains immediately started bridging over because there were all these new assets they could trade.

The stock tokens, but also, you know, some of the memes and other assets. All of that was just a... a new ecosystem so i think you'll see new ecosystems continue to form new asset classes you know a lot of the agentic trading interest has been in prediction markets too where you not only have your typical financial assets but you can trade on real world events you could trade on fed decisions sports um crypto has become very popular so you'll you'll see new asset classes coming in. And I think the advantage that Robinhood has is we're one of the few, if not the only, where you could do all of these things in one place with one easily shared balance and uniform KYC, simple money movement. So for your agent, they can just have access to all these things. And then you can have strategies that incorporate multiple assets. And I think that's where it's going to start to get really interesting because that type of complexity, that type of strategy is going to be very, very difficult for a human unassisted to be able to put together.

So you don't worry about a world where everybody has the same kind of super powerful AI that can

Vlad Tenevtrade for them. And then there's effectively no edge. The edge in anything is built by differentiation. If you're doing the same thing as everyone else, kind of definitionally, you have no edge. So you'll have to figure out how to be different. And I think that's been always true

for trading. It's not as simple as like my AI is better than yours. There's a lot of like product stuff around it. I mean, if you have a better AI than other people, I think that would be one form of edge. But yeah, I don't think very many people will be training their own AIs. But I mean, connecting it to unique pieces of data, we'll have a proliferation of apps in the agent app store, which now we have a relatively small number, but it's going to be open and we're going to be, we're going to be adding a lot more. Things in some degree to some degree do get centralized because we have these models that are now looking at everything, but also the amount of things we can give them and the context and the tools are increasing as well. And I want to ask about the agent marketplace, but on the model side quickly, are you guys doing a lot of post training, fine tuning on the big, you know, OpenAI anthropic models? Are you, Robinhood's not going make its own model for this right yeah current currently we're not doing any fine tuning but we have done that internally uh for for certain models we've also pre-trained some specialized models really for for ourselves yeah with this one we wanted to start with you know the models that

our customers would already know and give them some choice for for what to deploy but yeah that doesn't mean that, I mean, you can tell already this product has evolved. So it's going to look completely different probably six to 12 months from now. The marketplace, is this in the same way you talk about all the other business lines you guys have? Is this the next one? Do you see this being more than just a way to make Robinhood agents better, but an actual business for the company? I do think the vast majority of Robinhood's business is going to be from transactions and assets. So just customers performing activities on the platform and bringing their money in and kind of the second order effects there. Subscription is a bigger and bigger thing for us. I mean, you look at Robinhood Gold for the main app, that's a multi-hundred million dollar a year revenue business started from a small base. We want to make it as good as possible and create this marketplace where developers and service providers can come in and have an incentive to plug in their data. Is it going to be as big as the Apple App Store? I'm not sure.

But yeah, I guess I never try to presuppose and preordain how big each of my businesses will be relative to the other ones. It's not like people always ask me, well, what percentage of business do you want crypto to be I want my crypto business to be the biggest crypto business I want the equities business to be the biggest equities business I want them to compete with each other over which one's bigger yeah like why would I be like oh no yeah crypto I want to keep to like seven percent right that's that's a really good seven percent let's just not keep it uh it's a portfolio Vlad yeah um well no but so the marketplace it's a portfolio where everything has to be as big as possible. The marketplace though, I mean, is the business model some kind of take rate or subscription sharing component? How do you, cause you've got like initially you've got unusual whales in there. You've got some great data sources. What is in it for them except exposure to the Robinhood user? How complex do you want that to be? Like, do you think it stays that simple? I think so because whenever you get into like, for example, it's hard to do a

Vlad Tenevtransaction-based or an asset-based revenue share for a couple of reasons. One is a lot of customers don't want that information shared with the apps. You don't want the entire marketplace to see how

much money you've got in your account. You also don't want them... People are very private about their trading strategies. You're not going to want people inspecting all of your trades. Sure. Right. So, yeah, one of the benefits we provide is we provide a layer of privacy. People know that people are already comfortable with their trading in Robinhood because they know we're not just sharing their trading data with everyone. so I think subscription is clean and it yeah it doesn't get us into like these messy things of either making sure that the partners have to get regulated or that we don't want customers to feel like their data is uh is going anywhere they don't want it of course yeah is there anything that the big guys are doing the hedge funds etc where you're like the quants all that that you're like man I'm trying to get that in right now to the to the marketplace are you are there things that you can tease that people may not know about the edge that these big guys have that you're like i'm i'm i'm gonna bring this in i mean a great north star would be uh uh and and again i'm not giving you any timeline for for when we would have anything like this but a lot of the strategies that the

big guys have are unlocked by low latency so you have to be physically proximate to the exchanges and the matching engines. And right now, Robinhood doesn't offer that. But, you know, of course, my beginnings were as a high-frequency trader. And, you know, I think it's an interesting question to ask ourselves, what would it look like? Can we democratize that? Can we actually... And we're starting with just making the performance and latency generally better. But, you know, one day, can you deploy a trading strategy co-located with the exchange and do that in a very simple way where, you know, you don't have to be an expert in data centers or networking. You don't have to understand, you know, the details of that type of infrastructure engineering. But can we actually just make that easy for you? I'm curious how you're using agents in your personal life for running the company, also managing your money. And I heard from your team, you really love loops.

Yeah. You're doing a lot of loops. We could talk about that. But yeah, curious how you're using it and how it's evolved for you these last few months because things are moving so fast right now the first thing i started out with was just writing code i became an engineer again and

Vlad Tenevyou know through that i guess my my north star is that everyone should have a team of agents that's productive while they sleep so we should be like a 24 7 company and not just in aggregate but kind

years 24 7 push you're doing on like trading windows and all that yeah each person should be a 24-7 agent manager. Your job becomes managing your agents, make sure they're well-fed and they're not hungry and they have the context. And you ask, all right, well, what does it take for your agent to be running fully autonomously? They have to have context. They have to be able to test their work because if they don't have the ability to test their work, eventually they stop and they're like all right i'm done you know you you you do the testing for me human so it really just requires rethinking our entire infrastructure and making sure everything from uh the continuous integration continuous deployment the testing um like that that's all really really good and it can scale and that you know we can actually automate pretty much everything and and i think that the future is all product development will be looped in this way, right? And your bottleneck will be how quickly can your changes be tested against live customers? And how quickly are you going to be able to tell, is this a good change or a bad change that we should throw away?

Industry-wide, software engineering is completely transforming. You're going to see an end-to-end automation of product development and infrastructure development. One of the first places you're seeing it is actually AI research. People thought that would be the hardest and the last to go because it's just complex work. But really, if you think about it, it's pretty neatly sandboxed. I mean, AI models, there's already a way to test them without having them live. We have evals. So you have automated evals. The experiments are pretty sort of like narrow in some ways. Like you can run experiments, change the AI model, deploy a new feature, retrain it in some cases. So it turns out some of the first work that's being automated is the AI research work. And I think eventually it'll happen with products too. But product work is a little bit harder because you have to go and get adoption from real users. They have to test it in the wild and human adoption and behavior change changes a little bit more slowly than, you know, things in the pure agent world. And there's an intuition to products and an art really to it that I think also is going to be hard to replicate by AI. Maybe so. I don't know. I mean, they said AI would

be the last to uh art would be the last thing to be uh to be replicated but you know some of the first things you saw right when chad gpt launched was stable diffusion yeah you could say make this but in the style of vincent van gogh right and yeah it was it's pretty good um now again that doesn't mean that it has the the taste and people kind of get used to things and realize that this is an AI generated image. But yeah, I think a lot of the design work benefits from AI as well. Yeah. I'm really interested to hear your view on the conversation around AI, bigger picture, and how people feel about it. Because I was thinking about, it's so visceral how people feel about it. They either love it and they're using it and it's improving their businesses and their lives, or they hate it. They detest it. They refuse to use it. Very polarizing.

and the data centers are a problem. There's a lot of problems. And I was thinking about, you know, this concept of inequality and how it connects to like the Robinhood mission and, you know, bringing inequality to finance and democratizing finance. And I wonder if you agree or not that I'm starting to think a lot of the negativity around AI may actually have to do with inequality. Completely agree. Yeah, and this is one of the reasons why we push so hard for individual investors . . being able to invest in private companies. And we have Robinhood Ventures, which is our US-based, think of it as publicly traded venture funds that are listed on the NYSE.

Yeah, we have two funds that have IPO'd, more are coming as well. You just had Crusoe on there, I saw. Yeah, Crusoe was Robinhood Ventures' one investment. Robinhood Ventures' fund two is seed and series A stage. Wow. So fund one is frontier companies that are leading their industries. typically late stage. So OpenAI is in there. Databricks. Databricks, exactly. Revolut. So really just top quality, late stage names that are hard to get into. Available to mass market audience through a product that is traded on the nicey, like any stock. And the great thing about it is because we have so many retail customers, we provided retail distribution directly. So we went public, we raised capital, the bulk of which came from Robinhood individual investors, and then that capital was invested into these companies. It's an efficient structure, right?

There's very, very little middle layers and no carry for Robinhood Ventures Fund 1. Robinhood Ventures Fund 2, we wanted to take it further and do something that nobody's done before, which is seed and Series A stage companies. Companies nobody's heard of before they become household names. Which is exciting, but I can say now as a new investor, also very risky. Yeah. I mean, the risk is highest in those, but also the potential upside and the opportunity is greatest. And actually there've been studies, there's a pitch book study that looked at, you're an investor, so you've probably seen this one, seed investing as an asset class had the highest aggregate returns, even accounting for a higher rate of company failures than any other class. The parallel is a beautiful thing. Yeah. So it's interesting. I mean, we solved the problem of individual company failures by diversifying in a broad-based basket. And when Robinhood Ventures Fund 2 went public, we seeded the portfolio with 80 companies. So it's going to be a large number of investments. We're building the machinery to do this. And of course, overseas, We have tokenization, which we've demonstrated with our tokenizing OpenAI and SpaceX for our European customers as a gift.

And then, you know, now that the chain is out, we're obviously very keen on taking our tokenized stock products, stock tokens, and expanding that to other assets. So, yeah, when you look at AI, a big problem, and you juxtapose it with something like crypto, which was available to individual investors from the beginning. From the first block of the Bitcoin blockchain, it was like an individual decentralized phenomenon. Normal people adopted it before institutions. Became incredibly wealthy from it. Yeah. Yeah, and now, you know, you've got CryptoArmy. If there's a hint of government overreach, the CryptoArmy is like swinging elections, right?

The 2024 election hung on the balance of huge individual support for crypto. Juxtapose that with AI. No one has exposure to these. Nobody has exposure. Why do I want the data center in my backyard if it's just going to make these venture capitalists richer? Right. It's just expensive, resource-consuming, slightly better Google. And if you think of it that way, of course you're going to hate it. Yeah. Yeah. Yeah, I think that's a big problem with people not having skin in the game, not rooting.

Vlad TenevIf AI had, if there were more individual owners of these AI companies at the earliest stages, they would be defending it because it's my AI company.

I want it to do better. I want it to expand and to grow because I benefit and I have skin in the game. So yeah, that's why we care so much about Robinhood. ventures and our efforts to get AI companies to, even before they go public, give individual investors some skin in the game. And, you know, it's exacerbated by the fact that private markets are getting flush with capital and companies feel less of a need to go public until they're now in trillion dollar plus valuations. AI is only as useful as the context it has. But when that context is scattered across tools, threads, and DMs, your team and your AI agents are flying blind. That's the problem Jira by Atlassian solves. What's the goal tied to your project?

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But I'm curious how you're thinking about Anthropic and OpenAI and looking at those coming down the pike. Well, of course, we see an opportunity because we have such a large retail customer base and we can very much be the voice of retail and help these companies at each. stage in their life cycle, you know, pre-IPO with Robinhood Ventures. Now we're an underwriter in IPOs. We announced Aura, which is the first IPO that we're underwriting. I assume that's just the beginning. You want to do a lot more underwriting? Oh yeah, yeah. We intend to be disruptive in the space too. The problem is too, like a lot of these underwriters charge high fees. So I think we can be kind of like the retail distribution experts. How do you break that underwriting cabal really is what it is. Yeah. Well, I mean, uh, to be fair, there's some, uh, it's important. It's an important job. I mean, I'm not trying to downplay the importance of it, but yeah, yeah, there, there's actually some things that we're not really well positioned to do and we probably won't focus on at least for the foreseeable future. So I don't think we have any particular competitive advantage going and getting a bunch of large by-side institutions or sovereign

wealth funds to be connected to the company as investors. Goldman, JP Morgan, all these other guys, they're great at that. We don't have private wealth to nearly the same degree, but what we do have is everyday people and large numbers that love investing in these companies. And so I think we can be the default retail option and we can kind of represent retail as a part of the shareholder base. We also have really good data. You know, the IPO process has been very, very manual. You sit down as a CEO and you're having the pricing discussion. Where should we price this thing at? A lot of it is just, you know, finger in the air.

I don't know. So, you know, Cathie Wood might not be willing to pay that price and you want Cathie Wood, right? Yeah. Which, you know, is important to people.

Vlad TenevBut what we give people is what we give issuers is just a precise demand curve at every price, which is data we get because everything is, you know, automated N10 for that offering.

So through IPO access and underwriting, we can help companies at that stage. And even post-IPO through our earnings and, say, shareholder products, we can kind of help them connect with their shareholders that way. Is there anything macro in the market that concerns you right now? I mean, the Fed just raised rates for the first time in three years. The 10-year treasury is near 5%. Yeah. Inflation concerns, you know, I think are still there. I think it's still elevated. And we've got these huge IPOs coming and everything feels fragile. Yeah. And midterms, obviously. I'm curious how you're thinking about all these big factors right now.

Yeah. I mean, a lot of people say, well, you've got the inflation rate at above, what is it, 3%, 2%. I grew up in communist Bulgaria. So I was born during the final swan song of communism in the late 80s. And 1991, which was my last year in Bulgaria, the inflation rate was 180%, right? Not quite there yet. Yeah. So that was rough and life went on. In 1997, which was a couple of years after I moved to the US, Bulgaria had the unfortunate distinction of the highest inflation rate in the world. It was in the thousands of percent. So it was literally, they were adding zeros. they couldn't print the bills fast enough. They needed more zeros in the bills. And I think it was very, like you viscerally felt the fragility of the entire system. This is like nowhere remotely close to that. So yeah. And again, like the market, the macro.

Rates go up, rates go down. I think we have a lot of tools in this country, a lot of great innovation. The fundamentals of the economy in America are quite strong. The ingredients are there. I have reasons to be more optimistic than pessimistic. That's good to hear. I feel pretty good now. I mean, you look at the center of the AI industry and what's driving so much of this innovation it's still here yeah it's not in europe right hasn't moved to china um and i do wonder how much we're maybe underwriting the deflationary aspect of ai and what that could unlock right especially when you start getting into robotics and all these things and ai doing more things in the physical world yeah cost of labor all these things like we we don't even really have a sense of that yet well and also you gotta you gotta factor in that you know for a long time we were just exporting our industry yeah but now with with ai we're building data centers here we're trying to really figure out as a country how do we get more energy here yeah should we be building more nuclear and really taking advantage of that of that innovation and i think those are actually long-term positive things because we have to figure out how to you know break the

the morass that got us stuck to a place where we couldn't build anything and now there's just like huge momentum. Yeah, a lot of the things coming out of the administration, we've been very positive to. One of the other things we've been working on is the Trump accounts. Robinhood does a lot of things. We're doing agentic trading. We have Robinhood Ventures. We're doing the tokenization. All of it goes around this one idea, which I think is a very important one. It's ownership. Yeah. Right. And I think ownership of high quality financial assets is incredibly important. right and not just important for the individual in the sense of I can make more money I have more skin in the game secure my financial future that that's all great but there's a societal benefit to it as well which is that a society where more individuals are owners is a more stable society right people have a stake in the success of the industries around them they have they have a stake and the success of the country. And so all of our products really ladder to this idea.

Ownership of private markets, that's Robinhood Ventures. Ownership all over the world, that's tokenization. Trump accounts, one of the other things talking about the administration. Ownership from birth. How do you get someone to be immediately plugged into our economy from age zero so that they have the largest benefit? They get to benefit from compounding for decades more. than than they would have under normal circumstances so um that's probably going to be one of the most consequential things that uh most consequential legacies of this administration like this program will survive hopefully in perpetuity and yeah lead to a more stable investor base and and a more i think you and brad gerster and everyone who's involved in that deserve a lot of credit for that yeah i think it's i do agree with you and the administration obviously but like i'm glad that the companies in Silicon Valley and really stepped up with this and helped. And the app's great, right? It's a good experience. I'm glad you like it. Yeah. I mean, I think we take a large amount of pride and we have a little bit of a chip in our shoulder because this is our way of like serving our country in a sense, right? And it's obviously, it's not like we're picking up,

you know, arms and going to battle, right? So I don't want to compare it to that, but, you know, the impact of what we do here could be generational. And also the government is not known for building great products. In fact, we're all sort of like scarred to some degree by things like healthcare.gov and the DMV I mean yeah yeah although I went to the DMV recently you did in Redwood City and I was like very impressed at how smooth it was so you went to the DMV I went to the DMV and then I realized holy shit I gotta I gotta up my game I had this view that government was kind of in the stone age but things things have gotten very smooth the Redwood DMV's got it together I had to get my real ID and yeah I went and stood in line and got my real ID really quickly.

Wow. Okay. Shout out DMV. I did not expect that. Yeah. So if you haven't been recently, I highly recommend it. Just try to pay your local DMV a visit. And they're trying to get better too. Okay. Well, we've been dancing around this and maybe we can land it here. And I can't believe we're actually just now getting to this. You've been saying tokenization throughout this conversation. I got to ask, man, like what you're stirring the pot with this, you know, like the amc feud companies have been reacting very viscerally to this i think you all just well there's one company one but yeah you had it on the private side a little bit right you had some reactions to that open ai and others um and i think you all just notched a bit of a win as we're recording this a few days ago here in the us with uh with the innovation exemption right which starts to unlock the us a little bit but i'm still trying to wrap my head around like why are you pushing on this? Like, why do we need to tokenize stocks?

Yeah. So the main reason is that it's actually really hard to get access to U.S. stocks if you're overseas. And, you know, in some markets, it's relatively easy and they have robust local capital markets and exchanges. If you're in South America, in a lot of places, it's just tough, right and it was also tough to get dollars for a while you know if you're in a south american country for example with a hyper inflating local currency those people were buying american express traveler's checks right and that's why stable coins became so popular a lot of the usage of stable coins was overseas from people that just wanted a better cheaper way to get access to us dollars because they would keep their money in it. So in the same way, a lot of people want access to U.S. stocks. It's companies that they've heard of. You've got SpaceX, you've got NVIDIA, so many others. And tokenization allows them to have access with actually some better properties, 24-7,

Vlad Tenevfractionalizable. So you can break up the token into little itty-bitty chunks. You don't have to buy a full share. It can be in your wallet. So in particular, nobody can confiscate it from you.

It's not in some local account. It's some financial system that maybe isn't as developed with as strong protections as we have here in the US. So in a sense, I think the companies will be very, very happy about this because it creates net new buying of their stock from a global market. Robinhood chain with our stock tokens are live in over 120 countries where, you know, people probably wouldn't have been buying these U.S. stocks. They don't really have an easy mechanism. So it just cracks that wide open and opens up an entirely new pool, capital pool of buyers that didn't exist before. But then you've got the AMCCO and others pushing back.

And I do think there's a fair pushback that I don't know you've gotten asked. Well, but you kind of saw he reversed yesterday, right? Well, yeah, sure. But I think a lot of the AMC thing, you have to take into account that there's like meme activity. Yeah. And there's, we have a little bit of a history with AMC dating back to 2021. A little bit. That's a little bit idiosyncratic. So I'm actually not sure how much of it is confusion about what tokenization. exactly is because this is like a complicated new technology and you know you can imagine best case scenario I'm running my business why do I have to deal with like changing technologies around capital markets it's like not high on my list I'm trying to sell movie tickets and popcorn right or also how much of it is just you know appealing to a retail base that you know gets excited when there's just people fighting. Yeah. But I think the fair pushback I've heard is the voting. How do you solve the governance aspect of not actually owning the stock? Oh, yeah. I mean, we have a solution for that. We announced that we intend to add voting. The reality, too, is not a lot of people vote their shares. No, they don't. I think it's a nice box check to be like, I actually

have it. I actually have exposure that way. If you're in Venezuela and you're looking to get exposure to U.S. stocks. Voting is nice, but it's probably not the higher order bit. So I think, yeah, you can find all sorts of little nitpicks. People had this about electronic trading of stocks as well. They're like, well, I don't get the real certificate. It's really nice to have the real certificate. That's a real share. What is the seed and company thing? It's not even in my name. It's in street name. So all of these same criticisms actually landed when stocks started being traded and brokered electronically rather than physical certificates.

So I think the cat's out of the bag. Like this is not reversible. Now it's just a question of how do we make all of these issuers and stakeholders and, you know, the exchanges in the U.S. comfortable? Yeah. How do we make them feel that this is like, this is good for them? And understand because actually, if you look at this, if you're an issuer like a AMC or others, it's, it's basically all upside, uh, next to no downside. Um, so it's, it's just very clear that it's going to be a thing and it's innovation and change is, is never just uniformly accepted, but, but it's also inevitable. So, uh, yeah, and we're working with, with all the stakeholders to make sure everyone's kind of brought along, But yeah, it's it's it's happening. So, yeah. And now the SEC is is behind tokenization. So, yeah. And part of the reason we actually started with Europe and when we were in our event in south of France, we said we want to deliver great products for our international customers like that's we're immediately adding value.

we're shipping product we don't want to just like talk about tokenization you know some people like to talk about it it's kind of become a buzzword and you know they have interviews and stuff like that we we ship we want to ship real product put it in people's hands and that's really the most persuasive thing sure because yeah i could tell you tokenization is the future but uh maybe you won't believe me how about i ship it people use it we see a demonstrating value and and if it adds value to these customers outside the US, maybe that also demonstrates to folks here that, hey, we should adopt this technology and figure out a path for it to work in these markets.

And I think that's basically what's happened. I mean, we kind of called our shot many years ago and we're doing what we can to kind of push the industry forward, not just overseas, but here as well. And I'll tell you the future. It's going to happen to every asset. Private markets coming. You'll be able to, we'll have tokenization of privates. It's an inevitability. We'll have any wealthy person's asset base of tokenization of wine, of real estate, right? It'll all trade 24-7 on permissionless networks like a stock. Yeah. And I think it'll be you. Really cool. I mean, from a technical perspective, it's interesting. But yeah, for someone building a portfolio overseas to have low cost access to any asset that a high net worth individual here in the US would be able to have.

I wanted to check in with you on the state of prediction markets, especially going into the midterms. I think you've got Kalshi and Polymarket kind of battling out in the court of perception and Robinhood is a huge player. And you've been very bullish on prediction markets, as we've talked about this in the past, the future of news. You were the first person I actually ever heard that said that, like, I think of this as the future of news. What are you expecting kind of, especially, I think the midterms will be a big moment. Every big election is. But how are you gearing up and how are you thinking about that category over the next several months?

Well, we're building a great, so prediction markets in the Robinhood app. And we've done a lot of stuff on the infrastructure side too. But as a customer, as a user in the Robinhood app, it's gotten way better. And, you know, now we have bespoke experiences and hubs for all the major categories. World Cup, we had a really nice World Cup experience where we had all the information in one place. You know, golden boot winner, goal scorer. We had the different groups. midterms there's like a really nice native map experience where if you're trading it's it's obviously useful and easy but also if you just wanted to see like how are the midterms going who's going to win the state of indiana you know and um yeah we we have a nice experience there so uh it's constantly the amount of work that we have to do to improve the product and improve the infrastructure is never-ending, right? And we're seeing new types of categories come up.

Crypto markets have been very, very popular. And so increasingly, we're starting to see connections and synergies between our prediction markets offerings and different assets like crypto. And we'll start to see more with stocks as well. You're seeing the maturation of the industry into a true tradable asset class uh and and with like a huge retail component are you not even going to have the tv on this midterm in terms of trying to follow things are you just going to be i don't think i'm going to have the tv on very much yeah yeah i think i think that's gone away concept that we're already moving away from that yeah i mean i just realized even aside from prediction markets and following the elections i think a big uh moment to me where i was like wow things things are changing is when uh i was i was trying to watch the nba playoffs a couple months ago and i'm used to just switching the channels all right it'll be on abc or espn and where this game where's this game i can't find it and then uh i i went and i asked uh my ai agent my personal ai agent it's like oh you got to go to amazon prime so i'm like man okay When the NBA playoffs are hitting Amazon Prime, I think it's the end of the line for linear cable.

I still have mine, but yeah, I feel like it's going to be like a landline phone before too long. I agree. Last question. I fortuitously had the chance to catch up with Tudor, your co-founder, at your AI lab, Harmonic, which is doing a lot of really interesting stuff and approaching it from the view of math, building foundational models. And I won't spoil what's coming, but he gave me a tease and it's very interesting. He gave me a question to ask you. Oh, great. Yeah. He said, what do you think of AI companies using their platform to solve math versus giving the tools to everyone else to do it?

Oh gosh, what a softball to me. I love that question. I was going to bring this up proactive. actively, right? So we talked a lot about one of the problems being that normal people just don't have access to invest in these companies. And that's led to all these negative effects where the AI leaders are like, why is everyone mad at me? I'm just running my business. Well, I mean, your shareholder base, through no fault of your own, but some of them actually, OpenAI, great example they've partnered with us and and and uh made investing available for for individuals um but yeah like most people don't really think about this and and and most people are are very much thinking about all right how do i grow grow my business as fast and big as possible and beat my competitors right but with something like ai um you have to understand that you have to have uh a license to operate at the end of the day. Like if the people are against your technology and your company, it's going to be very, very difficult. And I think one thing that is just a miss, frankly, is, and I can kind of see how they got there, is AI companies keeping these advanced models in-house and just making the discoveries. They're employees running them

to make discoveries. OpenAI just solved a millennium problem and all of that. Yeah. I think the future where there's just these giant data centers in people's neighborhoods that are just running workloads from the employees of the AI companies and the AI companies are making all the discoveries and creating all the inventions and, oh, maybe they're creating the drugs and producing them, right? That's like a very centralized, almost dystopian future. And I think for a multitude of reasons, it's the less likely future. I think the more inspiring one is building the tools so that normal people get access to them. So I think it would have been a much better outcome if it was, you know, a mathematician that was using the OpenAI model that was coming up with these discoveries