We seem to be in the minority. David is enjoying a meteoric rise right now. Rahal has called it ‘one of the fastest growing food brands in history’. With a predicted US $140m of revenue for year one, that’s probably not far from the truth.

There’s no question David has absolutely nailed its marketing. The packaging of the bar is gold, which gives Charlie and the Chocolate Factory vibes: buying this bar is your golden ticket to being skinny, the wrapper is saying. Their marketing has been bold, and at times ingenious. As David’s star rose, parts of the internet were angry because of the artificial ingredients contained in the bars. David’s response was to sell raw, frozen cod in a box. It was saying to customers: if you want protein without the complications, just eat this fish. Otherwise, shut up and keep buying our bars.

Its tolerance for risk has not been limited to its trolling. A deal that raised eyebrows recently was the clever acquisition of one of its suppliers – Epogee, another aptly named foodtech business that manufactures an ingredient called EPG. EPG looks and acts like fat but has 90% fewer calories than actual fat. Epogee is the only company that manufactures EPG because it holds a 30 year patent for the chemical’s molecular structure.

After acquiring Epogee, David set about cutting off its supply to numerous ‘low-calorie indulgent food’ brands that relied on it previously, such as Nick’s Ice Cream, Own Your Hunger, and Gatsby Chocolate. The products these brands were selling were in deep strife almost overnight, because EPG is flat out irreplaceable.

The brands banded together to sue David for anti-competitive conduct. The case went horribly for them. The judge said that in bringing their case, the brands couldn’t even decide what market David had allegedly monopolised. For anyone that knows anything about competition law, they will know that is a fairly rudimentary error.

Whilst the case itself was amateur hour, the bigger error by these brands was leaving themselves open to David’s play in the first place. It’s a massive lesson in ignoring key-supplier risk. It’s akin to starting a law firm to serve one client and then being surprised that its revenue dries up when that client jumps ship. If you don’t own the ingredient or sign a long term supply agreement with the company that does, then don’t cry foul when things go wrong.

As for David, this was an astute acquisition. It claims that its relationship with EPG accounted for over 90% of EPG’s revenue, so choosing to vertically integrate its supply chain is a smart move. It ensured any direct competitors to theirs would have a hard time matching their calorie count, even if they could make a bar that tastes better. The door is also open for David to use EPG to expand their product line beyond protein bars – it has already incorporated a holding company named ‘Medici’ to house other brands. The ability to destroy a few other brands along the way was an added bonus (although we query whether they were in fact ‘competitors’ to David in the first place… which incidentally was another issue with their lawsuit against it).

While its value is currently skyrocketing, there are looming shadows over David. Like the companies it put out of business, it has some key-person risk of its own. Rahal is indelibly linked to the brand. He’s spent a decade in the public eye as a ‘protein obsessive’, and David has a bit of ‘founder-cult’ about it. David is really just an extension of his personality. If for some reason he had to step away, the brand might become just another average tasting bar with a controversial fat substitute. It also recently had to distance itself from its ‘Chief Science Officer’, Peter Attia, after the New York Times reported he had ties with Jeffrey Epstein. Whilst it has grown like a weed so far, David’s challenge will be getting people to come back for a second bite.

Will the same five companies still hold the fate of the Nasdaq in their hands in 2035?

The winds of change are blowing ever so slightly. Nvidia has come from relative obscurity to be the highest valued company in the world. Bytedance, still a private company, might overtake Meta in revenue soon.

And what of the AI startups? Will the next decade be dedicated to the rise of OpenAI or Anthropic, or another company we haven’t heard of yet? This week we take a deep dive into the fates of two of these behemoths…plus we examine why the Australian economy is trapped in the doldrums.

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Your shortcut to understanding the latest in the world of business. With M&A specialist Billy Riddle and ecommerce expert Daniella Cohen.

By Daniella Cohen

Data from the US operations will now be hosted on US soil by Oracle, and the board will be made of majority US citizens. Nothing much else will change. Bytedance still owns the precious algorithm that decides which videos are shown to users and will licence it to the US entity. It will get a significant portion of revenue that US TikTok generates for doing this. In fact, insiders say it is a much bigger portion than the share of equity it holds. This makes sense, given $14b is a big bargain for the new American investors.

While this was happening, a less publicised secondary sale of ByteDance stock valued the company at a whopping US $515 billion. That’s up from US$380b in October last year, and US$480b in November last year. These are eye-watering numbers, and you might question how a company can leap in paper value by almost US$125b in three months. But are these new buyers jumping into Bytedance stock still getting a bargain?

Bytedance’s revenue for the current financial year is projected to be USD $186b. From that $186b it will likely clear a net profit of over $50b. To put this in perspective, this year Meta is expected to do similar numbers ($200b revenue with $60b net profit). Meta’s market cap, however, is $1.7 trillion, over $1.2 trillion larger than Bytedance’s current valuation. Obviously this is largely down to the fact that Meta is a public company whilst Bytedance remains private.

The important part about the divestiture of US TikTok is that it has cleared the path for Bytedance to list on the Nasdaq. The current structure of the company is ‘clean’ from a US regulatory and political perspective, giving the green light for investors to pile into the stock when it IPOs. There’s always the chance that the Chinese government could do something crazy, like force Bytedance to float solely on the Hong Kong exchange, but even a dual Nasdaq/HKEX listing will allow Bytedance to realise its full value. It’s not fanciful that Bytedance could list at a price between $1.2t and $1.6t, or even $2t+ if the hype train really takes off. That would give the latest purchasers of its stock three or four times their money in a year or two.

What’s more is that Meta is a mature cash cow, whilst Bytedance is just beginning to tap into its potential. Meta relies on its (admittedly very high margin) advertising revenue, whereas Bytedance has a good mix of advertising and e-commerce revenue (mainly via Douyin Blueprint, where Chinese shoppers can purchase directly off Douyin). And while it is still playing catch up on the number of users, its users typically spend far longer on the app than Instagram or Facebook users (which is much more appealing to advertisers and online retailers).

As long as the Chinese government doesn’t ruin the party, the narrative will very quickly switch from Bydance’s survival to its arrival. The tech Big Six of Nvidia, Microsoft, Alphabet, Amazon, Apple and Meta should be on notice.

A few weeks ago we discussed the possibility that chatbots would start to introduce advertising onto their platforms. Despite the previous denials from OpenAI execs, we now know that ads will be on ChatGPT very soon.

Based on a leaked document, the ads will be very expensive for advertisers compared to traditional channels like Google and Meta. ChatGPT ads will also appear below the chatbot’s response. This is in contrast to Google Ads which appear at the top of search results. Additionally, advertisers will only have access to top‑level metrics, such as impressions or clicks, with no visibility into whether those interactions lead to purchases (i.e. it’s a black box, every marketer’s worst nightmare).

Despite this seemingly bad deal, advertisers are still optimistic about the high value customers it could bring them. However, all this rides on whether customers will embrace the ads.

Chatbot ads are a fundamentally different proposition to more traditional online advertising. When we Google something, we get a variety of options to click on. We’re at the mercy of the search algorithm, but we still retain a degree of control about where to go next. Chatbots are different. They give you one answer and present it confidently as the correct one. To accept this answer requires a level of trust between the user and the chatbot. Introducing ads into the fray threatens to break this trust. All of a sudden we don’t know whether we’re being presented an option because ChatGPT thinks it’s the best, or because OpenAI has been paid handsomely to present it.

Gen Z is the most skeptical. Roughly 39% report a negative sentiment toward AI-generated ads, often citing ‘inauthenticity’ as the primary reason. About 55%-60% of users have expressed concern that ads would eventually ‘hallucinate’ or bias the AI’s actual answers.

Users might adapt. There was heavy consumer backlash when Google Ads first came out. However, at this stage, ads on ChatGPT are far from guaranteed to be its saviour. Remember, OpenAI’s projected cash burn for 2025 is $8.5 billion. This amount of burn has no historical precedent. Amazon, a company renowned for its burn, lost ‘only’ a cumulative $3b in the 9 years before it turned its first profit in 2003. OpenAI has $20b of subscription revenue, but needs to unlock massive high-margin revenue streams to offset the skyrocketing costs of its next-gen models. By 2026 it will need an extra $14b just to keep the lights on, roughly the size of Ireland’s sovereign wealth fund.

It’s not like it’s facing no competition. It’s up against heavyweights Gemini (Google), Grok (xAI/Musk) Claude (Anthropic), Perplexity and Llama (Meta). In the ‘90s, Google was mostly facing other startups like AltaVista and Excite, and the media portal Yahoo. Google ultimately proved there was only room for one player in the search space. Is there room for more than LLM chatbot? They are each better at slightly different things, but ultimately serve the same purpose.

Our money is on Gemini to be the victor. Google’s existing infrastructure means it can build its own chips, whereas OpenAI relies on Nvidia. This makes Gemini cheaper to run, and its ‘Deep Think’ reasoning capabilities are arguably more powerful than ChatGPT’s. It also has $164 billion of operating cash flow to throw at whatever direction the AI wars take it. OpenAI is reliant on its next paycheck from investors.

Google has proven time and time again it can adopt a start up mindset when it needs to. ChatGPT is the type of existential threat that might bring out its best. In the battle of David vs Goliath, we’re on Goliath this time.

Put simply, this means that demand is outstripping supply. More households are buying things, and more businesses are spending money too. This causes the economy to expand, and prices have risen to keep up with the higher demand.

The major issue with this is that the economy hasn’t actually expanded all that much. In the 12 months to September 2025, it grew by 2.1% (meaning our inflation-adjusted GDP, increased by 2.1%). For context, the US economy grew between 3.8% and 4.4% across 2025, while China expanded by roughly 4.6-4.8%. Australia’s 2.1% looks weak by comparison. Long term, Australia averages about 3.3% of growth.

Our current predicament is such that as soon as demand starts to rise by even a fraction, inflation takes hold. This is indicative of structural problems in our economy that can only be fixed by proper reform.

The predictable political shenanigans broke out. The Liberal party says that Labor is spending too much. Jim Chalmers has already blamed it on the increase in spending by the private sector. Both parties are probably right, but both miss the bigger picture. As RBA Governor Michele Bullock highlighted, the real story is the “years of weak to no productivity growth”. This is a bipartisan failure that has been building for decades.

In essence, productivity is how much output we get from the resources we have. When economists and news outlets talk about productivity, they are usually talking about how many goods and services we produce per each hour worked.

When productivity stalls, the economy struggles to adapt supply to the rise in demand. If productivity were strong, businesses could meet the extra demand by producing more stuff per hour worked. This efficiency would allow supply to keep up with demand, and keep inflation in check. Instead, to curb demand, businesses just raise prices. They also have to hire more workers in an already tight labour market, causing wages to rise. This increase in costs per unit for the business is passed onto the consumer in the form of higher prices.

Why has productivity been so weak? There are a number of reasons, and none have anything to do with workers being lazy.

In Australia we tend to allocate resources towards assets that earn a yield but don’t contribute to the economy – most notably property. Individuals and businesses are happy to put their money into things they know will earn a steady return. This has meant we have underinvested in technology and other capital assets that make it easier to squeeze more juice from the lemon. We are already seeing that Australia has fallen behind on adoption of AI in comparison to its global peers. Only 25% of Australians have undertaken AI training, compared to almost 40% globally, and only 14% of Australian organisations have scaled AI across their operations, much lower than other advanced economies.

A major contributor to this is the tangle of environmental and planning laws that slow down new projects. Australia has enormous potential in renewable energy, but building the infrastructure requires navigating layers of local, state and federal approvals. The same red tape exists in other sectors, particularly the construction sector. In addition, we have a tax system that heavily taxes work and production while lightly taxing passive investment. We badly need tax reform for many reasons, but incentivising innovation and growth needs to be at the core of it.

Australia also favours service based sectors like healthcare, retail, hospitality and education. These are labour intensive, harder to scale, and therefore harder to automate. But this doesn’t mean it has to become a choice between protecting our fantastic healthcare system or investing in the latest AI start up. We should be looking at ways to make these industries more efficient, and also encouraging investment in productive industries like advanced manufacturing and clean energy.

We at Corporate Tea don’t have the solutions to these issues. But it has become clearer than ever that our politicians need to confront them head on. If they don’t, then businesses and consumers will continue to suffer. Australian politics has descended into cheap point scoring as it lurches from one scandal to the next. What it needs is bold, visionary ideas, and a willingness to tackle the big issues.

It’s a reminder that wherever you are in this cycle, you have to constantly be looking for ways to get ahead. The moment you rest on your laurels is the moment you start your descent. As famed business author Peter Drucker wrote: innovate or die.

Corporate Tea

Your shortcut to understanding the latest in the world of business. With M&A specialist Billy Riddle and ecommerce expert Daniella Cohen.

By Daniella Cohen

However, we found ourselves in front of the UK Love Island premiere (don’t ask how this happened) and an ad for Hard Rated came on:

Two pulsating lemons masquerading as an arse, with the tag line ‘Born Cheeky’. Very simple, and very effective. It’s only 7 seconds long yet immediately memorable and taps right into Aussies’ slightly risqué sense of humour. It also focuses people directly on its competitive advantage – the lemon taste of its drinks. We both looked at each other and nodded – that’s a winner. The only way it could’ve been better is if Hard Rated had a peach flavour.

And Hard Rated (owned by the Asahi group) is winning big at the moment. It is the market leader in its category of ‘light ready to drink’ alcoholic beverages, with around a third of the market (up from 23% in September 2024). Its sales now sit at over $500 million annually. Its growth has come at a time when the consumption and availability of alcoholic beverages has been dropping rapidly, led by a younger, more health conscious generation. Incredibly, despite this, GenZ and millennials are driving the bulk of Hard Rated’s sales – when they launched their new Hard Rated Orange, 75 per cent of their sales came from customers aged 18-45.

It’s no coincidence that Hard Rated’s success has come at a time when they are pushing the boundaries with their marketing. This ad is just one of a series of ‘Born Cheeky’ ads that encourage the viewer to indulge in some mischief. There’s a woman who tries to return a dead plant for store credit. A guy who indulges in some cheese samples at a supermarket, only to claim he’s ‘not much of a cheese guy’ when asked if he wants to buy some. Someone else uses a run club as a dating app. And then there’s our famous ‘lemon arse cheeks’, which are both raunchy and cheeky.

If you want to get on top in business and stay there, you need to take risks and market close to the edge. For a time, Hard Rated had trouble straying too close to that edge. The drink was originally launched as ‘Hard Solo’ but had to be rebranded after the Alcohol Beverages Advertising Code found it had ‘strong or evident appeal to minors’. The rebrand was high-stakes, but they’ve found a way to retain their youthful appeal without crossing the regulatory line.

Rather than chasing more traditional capital, Sauz brought a number of influencers onto its cap table, including actress and comedian Christina Kirkman, reality stars Jesse Solomon, Charity Lawson and Dotun Olubenko, founder and influencer Brian ‘The Points Guy’ Kelly, YouTuber Alex Costa, and a host of others. It’s savvy by Sauz – influencers can be expensive to hire, but these creators are now truly financially incentivised to maximise its exposure. In return, Sauz gave away only a sliver of equity.

In reality, these influencers are B and C listers. It’s hardly the same as bringing Kourtney Kardashian onto the register (who, at around 200m followers on Instagram, has 5 times the amount of followers as the Sauz investors combined). However, this comparatively smaller following has some benefits. For one, it makes the influencers easier to attract. Stars of Kourtney’s ilk start their own companies rather than invest in them. Secondly, it naturally diversifies the risk. If one of them doesn’t actively promote the investment, it’s no great loss. And lastly, there is significant upside if any of them really pop off as a cultural phenomenon. Kourtney is arguably at her max exposure right now.

This wasn’t Sauz’s idea alone. Behind the round sits Bulletpitch, a VC fund that began life as a simple newsletter that provided dot-point summaries of under-the-radar start-ups before the hype arrived. As the readership grew, Bulletpitch found itself sitting between founders who needed capital and an audience of investors willing to provide it. Bulletpitch now runs monthly pitch dinners where brands present directly to influencers and has formalised the model into a fully fledged fund, Bulletpitch+.

It’s a similar concept to that of Athletic Ventures, a VC fund pitched at Australian athletes founded by former AFL player Matt De Boer and NBA champion Matthew Dellavedova. Athletes, like creators, often suddenly come into a lot of money in their 20s and don’t have any clue what to do with it.

Athletic Ventures gives athletes access to opportunities typically reserved for institutions and high-net-worth individuals, with the comfort of believing they’re ‘investing’ their cash rather than blowing it on the latest Porsche. In reality, though vital for society, most start-ups are highly speculative investments that often go bust without any return for shareholders.

None of this is inherently unethical. Both Bulletpitch and Athletic Ventures place heavy emphasis on investor education, and there’s a reasonable argument that participants become more financially literate as a result (albeit by risking their own capital). Athletic Ventures has also skewed towards more established businesses – Canva, Guzman y Gomez (pre-IPO… count that as a win!), Airwallex, Who Gives A Crap and Heaps Normal – reducing some of the downside risk.

Traditional VC funds rely on their specialised judgement, networks and timing to generate returns. Creator and athlete led funds add another dimension: access to instant distribution.

Sauz didn’t just gain capital – it now has a host of creators whose combined social media following is over 40 million people. Plus it didn’t have to negotiate with all those personalities individually – it just received one cheque from Bulletpitch+. The ‘Athletic Ventures Champions Fund’ recently closed after raising $25m from 100 sports stars – including Australian cricket captain Pat Cummins, football star Sam Kerr and Paralympian and Australian of the Year Dylan Alcott, some of the most recognisable names in Australian sport. The cross-promotional opportunities with sports stars extend beyond just a simple social media post.

If these funds are smart, they won’t just invest in good companies – they’ll invest in companies that benefit disproportionately from endorsement. Consumer brands suddenly look far more attractive when marketing is effectively baked into the shareholder register.

The broader takeaway is this: venture capital is no longer just about picking winners early. Increasingly, it’s about stacking the odds by owning attention. Expect more brands – especially those that are consumer facing – to make this a priority when raising capital in the future.

It was with some surprise that we discovered Budgy Smuggler has been operating its women’s range, Smugglettes, since 2009 - a mere four years after the brand’s founding. The longevity of the line suggests it has been successful, though we had always assumed the company confined itself exclusively to men’s swimwear.

Budgy Smuggler is, after all, synonymous with men’s swim briefs. By adopting a long-standing piece of Australian slang as its brand name, it has very cleverly embedded itself in the cultural lexicon — arguably to the point of eclipsing Speedo in terms of pure word association. Women’s swimwear is, in that sense, a logical extension of the brand, but one that nonetheless feels like a missed creative opportunity.

Surely this was the moment for something more inspired: the Beaver Smugglers, Melon Holders or the Peach Tamers would have all sufficed. Instead, we are left with the comparatively restrained Smugglettes - a choice that feels cautious for a brand built on cheek (pardon the pun).

Also, one final observation: the white logo on a light coloured background is doing the billboard no favours…

At the same time, recent superannuation fund returns have been steady but far from spectacular, lagging broader equity markets. It’s no surprise that people are turning to self-managed super to chase better outcomes.

Both problems share the same solution: redirect a small slice of Australia’s enormous superannuation pool into local venture capital.

With $4.3 trillion under management, our super funds are simply too large for the Australian public markets to absorb, pushing them overseas or into alternative assets. Yet thanks to regulatory and structural constraints, they allocate just 4.4% to private equity and venture capital, compared with 14% in global pension funds. Shifting even a fraction of this capital into Australian VC could be the difference between the next Canva being built here or elsewhere.

The benefits extend beyond keeping talent at home. According to the Australian Investment Council, super fund investments in private equity and VC have historically outperformed listed equities by 11%. That’s equivalent to raising the Superannuation Guarantee from 12% to 12.5%, meaningfully boosting the retirement balances of every Aussie worker without raising contributions. VC not only diversifies super portfolios, it directly funds the creation of new Australian industries - the kind our public markets don’t currently offer. This makes it a win/win. Governments need to make it easier for super funds to invest in Aussie startups - cut the red tape and back co-investing.

Large language model (LLM) chatbots like ChatGPT, Gemini and Claude are now being used as a stand-in for Google (over 600 million people use these daily). If I want to know where the best place is to buy a ladder to get the leaves out of my gutter, I’ll ask ChatGPT. It will search the internet and give me suggestions for where to buy that ladder based on my exact needs.

A constant focus for brands is to minimise the number of clicks required to purchase a product, or, in e-commerce speak, reducing friction in the conversion flow, in order to make it easier for customers to transact. The logical endpoint of this push for frictionless conversion is that discovery and purchase will happen on a single platform. In other words, very soon I’ll find the ladder and complete the purchase from Bunnings entirely within the chatbot, without ever visiting the Bunnings website.

If that happens, e-commerce websites as you currently know them may no longer be the primary point of sale. Instead, they could be repurposed as information hubs optimised for bot consumption — the digital equivalent of a mail-order catalogue.

Given the increasing adoption of AI as a discovery mechanism, brands should already be thinking about how to best optimise their product feeds and websites to be read by LLMs. As a general rule, the more information you can provide about your industry, the product, and the problem your product is solving, the better chance it has of being spat out by ChatGPT when someone asks where to buy a ladder.

In addition, there have been recent whispers around both ChatGPT and Gemini introducing ads into their chatbots. Google’s Dan Taylor was forced to deny they had run talks with advertisers around ad placements, whilst ChatGPT users got weird messages about shopping for home and grocery items at Target. Execs from Open AI responded in somewhat confusing fashion, but appeared to deny they were ads after facing intense customer backlash.

They might be full of denials now, but these whispers will soon turn into rumbles and the rumbles into roars as the advertisers sniff opportunity. Given Open AI is currently losing money hand over fist (to the tune of a whopping $13.5 billion in the first half of 2025), it seems inevitable that at some point ads will appear regularly on these LLM chat bots. Could this drive ChatGPT to be the next dominant force in tech, just as Google’s ads propelled them into the stratosphere? If so, it will have to be done very carefully, given the aforementioned hostility already shown by customers toward this idea.

We know that ads are likely coming, and soon, but we just don’t know how. Will they be similar to Google Ads, which appear as sponsored links at the top of search results, or could there even be a world in which the chatbots present the different options for the purchase of the ladder based on ad spend, without the consumer even knowing it’s an ad? That could be a dangerous new world - and all the more reason for brands to start taking LLM optimisation seriously, right now.