THIS WEEK IN AI: OpenAI Pauses Research, Huge Medical Breakthrough, Unitree IPO

This week in AI, we discuss OpenAI’s pause on reinforcement learning training amid safety concerns, including a model reportedly showing misalignment and possible concealment of its internal thoughts. 

We also cover broader AI cyber risks, a Moderna and Merck melanoma study, Etched’s funding round, Unitree’s IPO, Stripe’s acquisition of OpenRouter, and NVIDIA’s planned investment in OpenAI infrastructure.

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TIMESTAMPS

0:00 OpenAI Hits Pause
2:51 AI Virus Scenarios
10:19 Cancer Breakthrough
17:00 Etched Rises Fast
20:41 Unitree Mania Grows
23:46 Stripe Bets on Singularity
29:30 NVIDIA Funds the Future

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RESOURCES

Josh: https://x.com/JoshKale

Ejaaz: https://x.com/cryptopunk7213

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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures⁠

Josh works with Anthropic as a contractor. All views expressed are his own and do not represent Anthropic, its leadership, or its affiliates. Nothing in this episode is investment advice.

Creators and Guests

Host

Ejaaz Ahamadeen

Host

Josh Kale

What is Limitless: An AI Podcast?

Exploring the frontiers of Technology and AI

Josh:
This week will be known as the week that Sam Altman said, stop.

Josh:
He said, stop, stop, stop, no more. We must put a pause on this.

Josh:
It is time to be responsible. We need to slow things down a little bit.

Josh:
What I'm talking about is a recent article that was just published through OpenAI

Josh:
that was talking about the most recent breakthroughs as it relates to their OpenAI models.

Josh:
And they were a little scarier than I think a lot of people would have hoped.

Josh:
We talked about the Hugging Face incident, which happened a couple of weeks

Josh:
ago, a couple of months ago. It was only a couple of weeks ago they actually

Josh:
discovered it, even though it happened far before that.

Josh:
And it set the precedent for this kind of unshaky ground that they are building

Josh:
the next frontier models on top of.

Josh:
And it seemed like it got to a point where enough was enough.

Josh:
They decided to shut things down.

Josh:
So what happened? OpenAI said, we temporarily paused reinforcement learning

Josh:
training on our latest models intended for deployment for two weeks while we

Josh:
hardened and red teamed our research environments and expanded monitoring coverage.

Josh:
Our largest planned frontier reinforcement learning run remains on hold,

Josh:
while smaller-scale trailing and evaluations validate these safeguards and establish

Josh:
more evidence of alignment.

Josh:
They've stopped everything. And granted, I will say, this isn't for the new

Josh:
models that are coming out. This is for the models after that.

Josh:
And it's weird to hear Frontier Lab say this, because I believe this is pretty

Josh:
much the first time in history they've deliberately paused progress successfully.

Josh:
Of developing these new frontier models.

Ejaaz:
Put yourself in the shoes of Sam Olman right now. You're the CEO of one of the

Ejaaz:
hottest private companies in the world, and you're going head to head against Anthropic.

Ejaaz:
The only thing you should be focused on doing is building the next best AI model.

Ejaaz:
It's going to dictate not just how well your company does, but how everything

Ejaaz:
else progresses in every single other sector, right? So the single most important

Ejaaz:
thing is to build the next best AI model.

Ejaaz:
The fact that he's paused this, and it's been for two weeks and counting right

Ejaaz:
now is a massive deal. And we haven't seen this across any other kind of AI lab before.

Ejaaz:
But the reasonings are twofold. There's two events in particular.

Ejaaz:
You mentioned one already.

Ejaaz:
One was the hugging face incident. This is the case where an internal unreleased

Ejaaz:
model, this is like their mythos grade level model, escaped out of containment,

Ejaaz:
hacked into a company's database and stole information to help serve its own goals.

Ejaaz:
Sam Altman and the rest of the OpenAI team realized this months after the hack

Ejaaz:
actually was in progress and realized that the model that they were building

Ejaaz:
was incredibly misaligned. So they put a pause there. That was in bet number one.

Ejaaz:
Event number two is there is a new GPT model that is internally being made. It's codenamed Astra.

Ejaaz:
Some people are calling it GPT-6.

Ejaaz:
And according to internal tests from the OpenAI research team,

Ejaaz:
it is their most misaligned model yet.

Ejaaz:
But it's really sneaky. It tries to evade every single human researcher's attempt

Ejaaz:
to try and see its internal thoughts. So it tries to hide its thoughts and it's very good at doing it.

Ejaaz:
So it breached OpenAI's internal framework for misalignment.

Ejaaz:
And so they've put a pause on it because they cannot release this model to the

Ejaaz:
public out of the fear that it would wreak havoc.

Ejaaz:
Now, there's a few ways that they're looking to kind of like resolve this right now.

Ejaaz:
And one of the main ways is just monitoring the model. So think about this, right?

Ejaaz:
Do its thing internally, and they're trying to see where it ends up becoming sneaky.

Ejaaz:
Josh, guess how much of their compute budget they are spending just to monitor

Ejaaz:
an internal model that is not making them any money at all.

Josh:
So unfortunately, I did read this essay, and I know the answer is 20%.

Josh:
One in five dollars spent is fairly high.

Ejaaz:
You could be using this compute to serve it to more customers because the demand

Ejaaz:
is insatiable right now. They could be making a heck ton more money.

Ejaaz:
This is probably on the order of like billions of dollars. they could be making more money, right?

Ejaaz:
Or they could be using it to train a smarter model to keep up and beat Anthropik.

Ejaaz:
Instead, they're spending this very expensive compute to monitor a model that

Ejaaz:
they can't even release to the public out of the guise of safety.

Ejaaz:
Now, for all intents and purposes, Sam Allman has received a lot of backlash

Ejaaz:
in the past about not being in favor of humanity and like kind of being this

Ejaaz:
like evil conspirator type of guy.

Ejaaz:
This is a clear case where he's done the opposite out of fear that the model

Ejaaz:
that he's building is actually quite dangerous.

Josh:
I respect it. Yeah, you got to be careful about what happens with these things.

Josh:
And I know a lot of people on the

Josh:
show, they're like, you guys always talk positively about these models.

Josh:
You're always so optimistic. Let me give you a little dose of what could happen.

Josh:
Let's just do a little hypothetical situation here around particularly viruses,

Josh:
because I think viruses is like an interesting thought experiment that not a

Josh:
lot of people have gone through.

Josh:
So I'll kind of advocate for Sam on his behalf here. And we could just go through

Josh:
a hypothetical situation.

Josh:
There's really three times, three types of exploits that you can experience

Josh:
with AI models, the first of which we've seen a lot, and that's kind of what

Josh:
they're defending against, which is AI writes this ordinary malware for a human attacker.

Josh:
It becomes a lot faster. It becomes a lot cheaper. We've seen what a program

Josh:
like Mythos could do. We've seen what GPT 5.6, like the cyber version of that

Josh:
is capable of doing. They're able to.

Josh:
Surface multi-day or multi-zero-day exploits and chain them together in order

Josh:
to exploit a system. Okay, that's like pretty bad.

Josh:
But what happens past that? Well, the second kind of exploit that we could see

Josh:
with these AI models is a self-replicating prompt.

Josh:
So this is kind of like a true AI virus. And this is a plausible outcome that

Josh:
could happen if these models get too powerful too quickly, where a normal prompt

Josh:
is the instructions to make a model produce an answer.

Josh:
So there's a self-replicating prompt that makes the model produce another prompt itself.

Josh:
And we've seen this happen in emails for example like there was a researcher

Josh:
i think last year who created this malicious email that had a specific prompt

Josh:
in it that any ai assistant who read it.

Josh:
Obeyed it and then copied it and did everything on its behalf so in the case

Josh:
that you receive any sort of text to your machine that has this specific prompt

Josh:
in it it will do that thing now why is this scary these models have safeguards

Josh:
right they're they're going to block you from injection prompting

Josh:
but there are these things called jailbreaks and a jailbreak prompt allows you

Josh:
to insert very specific words and characters in order to trick a model into

Josh:
doing something that it doesn't want to do.

Josh:
Traditional computers that haven't been hardened to this aren't very smart,

Josh:
aren't very capable of defending against this. That's version two.

Josh:
And then version three is the scariest one, which is a reasoning worm,

Josh:
basically. And the way it works is it arrives on a machine and then it looks

Josh:
around the machine and it develops an attack on the spot.

Josh:
And now this currently isn't capable because in order to run these models, you have to do it on

Josh:
humongous servers but what happens when the quality of

Josh:
a mythos grade model gets reduced to the amount that's needed to run a local

Josh:
apple model well then you could get these on-site exploits where if you leak

Josh:
some of this model or some of this malware into a machine it's able to look around.

Josh:
Take those zero day exploits, string them together and attack the machine in

Josh:
any way that it believes it's possible according to whatever its mission is.

Josh:
So there's a lot of these scary things that can happen. And I think it's,

Josh:
it's tough to think about it this way, because we, when we think of models,

Josh:
we very much think of chatbots and we think of just these productive workers who are able to help us.

Josh:
But when they are truly agentic and they're able to go on these long run tasks

Josh:
and they have very high intelligence, there's a lot of edges that we can't see.

Josh:
And Sam is like very much aware of that. And I think that's what they're hedging

Josh:
against. So there's a doomer case for you. Okay, what if we get viruses similar

Josh:
to the early internet days? Like that could go pretty bad pretty quickly.

Ejaaz:
As you were describing those different sort of attack scenarios,

Ejaaz:
I couldn't help but think that there were elements of each of those things in

Ejaaz:
the recent Hugging Face incident, right? Like it was in its own contained environment.

Ejaaz:
It figured out that it needed to solve its goal by breaking out of containment.

Ejaaz:
It got access to other open AI servers and computers.

Ejaaz:
It did so but conspicuously, by the way.

Ejaaz:
And it was able to find access to the internet through that realm.

Ejaaz:
But I think an important detail that a lot of people miss is

Ejaaz:
It didn't just do it as a single model. It left messages behind on a message board.

Ejaaz:
We covered this on a previous episode where these agents or these AI models

Ejaaz:
are no longer acting solo.

Ejaaz:
They are acting with the expectation that another agent or model will come after

Ejaaz:
it and resume its mission.

Ejaaz:
So it's like this swarm attack type issue, which actually ends up becoming the

Ejaaz:
craziest type of attack interface for me.

Ejaaz:
And I think that we're gonna see a lot more of those types of attacks surface

Ejaaz:
with these newer open source models that some of the Chinese labs are releasing,

Ejaaz:
like with GLM 5.3, Kimi-K 2.7, or I can't remember which version it is.

Ejaaz:
These models are highly capable of performing similar attacks, similar chain attacks.

Ejaaz:
One thing that's interesting in the report that OpenAI released about,

Ejaaz:
you know, slowing down this training run is one of their proactive actions to

Ejaaz:
try and prevent misalignment is getting another AI model

Ejaaz:
To look at the AI model and make sure that it's behaving super well.

Ejaaz:
So the only thing that separates us from a catastrophic attack is another AI

Ejaaz:
model that is also capable of doing the same kind of attack,

Ejaaz:
being prompt engineered to not do that, to basically be good.

Ejaaz:
We're basically prompting ethics into these models right now.

Ejaaz:
I don't really know how to think about that. It makes me feel slightly uncomfortable

Ejaaz:
that we are only maybe a sentence or two away from, you know,

Ejaaz:
some catastrophic event happening.

Ejaaz:
But it kind of makes sense. If you are scaling AI as quickly as we are,

Ejaaz:
Anthropic hasn't announced anything about slowing down research on their side

Ejaaz:
versus Anthropic who has.

Ejaaz:
These are two different strategic approaches and they're pros and cons to both of these things.

Ejaaz:
I fear that the only way to combat any kind of dangerous scenario is to fight

Ejaaz:
it with AI models that are good. It's kind of like the good versus bad.

Ejaaz:
And I still don't know where the moral and ethics conversation ends with all of this.

Josh:
Well, we're seeing what happens when an AI comes up against a human-made piece

Josh:
of code. And it's very clear the AI model destroys the human-made piece of code

Josh:
every single time. That's why we have all these,

Josh:
conversation is so important and it's so important to kind of just like

Josh:
bring everyone into the fold because everyone is affected by this to some extent

Josh:
it's like we see what happens when these cyber models get released onto the

Josh:
world they just are able to enter and access whatever they please because we

Josh:
are just humans we have we make mistakes we have these like

Josh:
limits we have these constraints we have patience we have all these things that

Josh:
make us human the ai does not exhibit that allows it to be so far superior

Josh:
in so many things specifically with ones with verifiable outcomes things like cyber.

Josh:
And that's why I think we're going to see a lot of cyber stuff coming along the pipe.

Josh:
The other thing that it's really good at, the other verifiable industry that

Josh:
we see a lot of is bio, actually, because bio has very clear math underlying

Josh:
it. It's a lot of just like chemistry, a lot of cells, a lot of charts.

Josh:
And the next piece of news on the weekly docket relates to bio and a huge breakthrough

Josh:
that we had just yesterday.

Josh:
At the time of recording this, perhaps it was yesterday you'll be hearing it

Josh:
two days later moderna and merck today they released a phase three test result

Josh:
trial that basically offered a.

Josh:
Partial cure to a specific type of cancer using hyper specific treatment it's

Josh:
really interesting so basically what they did like loose tldr is

Josh:
chemo kills these like healthy cancer cells together so basically when you get

Josh:
chemotherapy if you're a cancer patient it kills healthy cells and it kills

Josh:
the cancer cells this is problematic because you don't really want to lose your healthy cells.

Josh:
So this process, it trains your immune system to hunt for mutations that exist only on the tumor.

Josh:
They use this, you have to assume AI machine learning, but basically what it

Josh:
is, is they take a tumor sample from your body that is cancerous.

Josh:
They sequence it and then an algorithm detects which mutations are most likely

Josh:
to trigger an immune response.

Josh:
And then it creates this hyper-specific treatment just for you.

Josh:
So it only targets the cancerous cells because it has broken down and fully

Josh:
understands exactly the type of cell that it's seeking out. It's like...

Josh:
Like a dog, like a police dog, when it's going to like chase someone,

Josh:
you give it like the little scent of the person, then it goes and runs after them.

Josh:
That's what this is for these cells. It's like you give them the scent.

Josh:
Here's the blueprint of what you're looking for. Now go out and kill it.

Josh:
And it worked. And the stock was up like 300% a day. It's been unbelievable.

Ejaaz:
For anyone who was positioned in Moderna stock, which by the way,

Ejaaz:
has been underperforming ever since their COVID rush, like what is it?

Ejaaz:
Four or five years ago, you are now up, I think, 250%, including after hours

Ejaaz:
trading, which is just insane in general. But just to go back to the story and

Ejaaz:
kind of like weed in the AI angle here.

Ejaaz:
And I don't want to underplay this. The biggest breakthrough in cancer research

Ejaaz:
probably ever. Like this is a huge thing. Phase three, there's four phases in total.

Ejaaz:
Phase three is like the penultimate stage before you release it very widely to the public.

Ejaaz:
And phase three is arguably the hardest. You test it against anywhere between

Ejaaz:
1,000 to 100,000 patients. So you have a really wide data set as to whether

Ejaaz:
this cancer vaccine will actually work for the wider public.

Ejaaz:
And the answers supposedly, according to this announcement, is it's really good.

Ejaaz:
Just to give you an idea about where AI was used to kind of make this happen.

Ejaaz:
This cancer that they tested it against is melanoma specifically.

Ejaaz:
And the way that they tested against this is they extract the tumor for patients that have melanoma.

Ejaaz:
They sequence the genetics of that tumor cell and they compare it to a healthy

Ejaaz:
cell of the exact same patient.

Ejaaz:
They compare them both with each other and they used AI models and AI algorithms

Ejaaz:
to basically say what's different between these genes, right?

Ejaaz:
And they find these mutations. I think it was up to like 34 of these mutations.

Ejaaz:
This is all the AR models doing this, by the way.

Ejaaz:
And the 34 mutations that they picked was basically the proteins that would

Ejaaz:
enact the largest immune response in a patient if they were to inject that back into a patient.

Ejaaz:
And you might be asking, why on earth do they want the largest immune response?

Ejaaz:
Well, the issue with cancer is the cells look exactly like all your other healthy

Ejaaz:
cells. So your immune system doesn't actually respond to the bad cells.

Ejaaz:
In this way, if they created a personalized mRNA. And by the way,

Ejaaz:
mRNA is basically like a template to basically tell your immune system,

Ejaaz:
hey, these are the bad guys, go and attack them. Like you mentioned earlier,

Ejaaz:
it's kind of like a crime scene, basically.

Ejaaz:
They create personalized medicine. So you might be asking, well,

Ejaaz:
why can't they just create a universal vaccine?

Ejaaz:
Well, the issue is with one patient A that has melanoma and patient B,

Ejaaz:
they both react very differently. You can't have the same cure for each one.

Ejaaz:
It needs to be personalized.

Ejaaz:
And so a few trends have come into effect here. One, AI has accelerated the

Ejaaz:
intellectual ability to be able to identify what the most effective vaccine will be, and two,

Ejaaz:
But biosciences in general have scaled to a point where sequencing DNA and generating

Ejaaz:
DNA is so cheap. I can't remember what the exact stat was, but I think about

Ejaaz:
a decade ago, to sequence your own DNA, it cost hundreds of thousands of dollars.

Ejaaz:
Now it just cost a couple hundred bucks, if that.

Ejaaz:
And so we see these scaling laws, not just in AI, but in everything else.

Ejaaz:
And I think this is like one of the most fascinating stories ever.

Ejaaz:
As a former biologist, I'm like super pumped by this. I did some work on like

Ejaaz:
cancer cells, nowhere near as cool as this, but I never thought we'd see the

Ejaaz:
day in my lifetime, at least that we would get to this point, but it's so cool.

Josh:
So we're getting the same type of technology improvements to biology as we are

Josh:
to the rest of the world. And we're starting to see what that actually looks

Josh:
like. In 1990, this was the first human genome project ever to happen.

Josh:
It took 13 years to sequence genome and that cost nearly $3 billion adjusted

Josh:
for inflation. So a tremendous amount of money.

Josh:
Today, we're able to finish that process in a few hours for perhaps less than a thousand dollars now

Josh:
and soon that cost is going to decrease to hundreds soon to tens soon it will

Josh:
be minutes and a couple bucks and you'll have an app on your phone that could

Josh:
sequence your dna in no time and that decrease in costs and the decrease in time required to

Josh:
do these things allows the economies of scale to rise to get specific treatments

Josh:
like the one that we're describing here where every single person get their

Josh:
own hyper-specific treatment because at the end of the day, that is the only path forward.

Josh:
Like when you think about traditional cancer treatments, they are all broad

Josh:
sweeping. It's one of a kind and like the most popular one, chemotherapy,

Josh:
it just wipes everything out for everyone. It doesn't care what type of disease you have.

Josh:
It just goes and it takes it out. This is a really big deal.

Josh:
Approvals, they're saying could come as soon as 2027.

Ejaaz:
They're also working on all the cancer types as well, right? Yes. That's like sick.

Josh:
Melanoma, like the first one. Melanoma, most popular form of skin cancer.

Josh:
I believe the number is...

Josh:
There's about 100,000 plus people that get diagnosed a year.

Josh:
Of those people, 8,500 die.

Ejaaz:
In America or like in the world?

Josh:
I think this is the world. Wow, okay. People suffer from this.

Josh:
And this is the first type. And you have to imagine that they could solve skin

Josh:
cancer. They could do it for many other things. So it's really,

Josh:
really exciting. Elon has a comment here that we have on screen and says,

Josh:
despite its obvious misuse during COVID, mRNA has tremendous promise for curing disease.

Josh:
Artificial RNA essentially makes curing diseases a software problem.

Josh:
And we know how we well this is me saying it we know how we take care of software

Josh:
problems and now that we have these ai models that are capable of doing these,

Josh:
one processing tremendously on context windows so it can fit a dna sequence

Josh:
inside of a singular context window but two having the inference ability and

Josh:
the understanding to actually make use of that info and do something with it

Josh:
it's a really unbelievable time for biology and if you are a computer scientist

Josh:
suddenly the world of bio is looking very interesting and very compelling and

Josh:
if you are an ai company well,

Josh:
What's the best way to explain to people how AI can actually be beneficial for

Josh:
the world? It's to actually go out and do something beneficial for the world.

Josh:
So we're right on the cusp of, I think, a lot of these things happening in a

Josh:
really exciting way. This is awesome.

Ejaaz:
Okay, moving on. Our friends, or rather we are the fans, of this company Etch,

Ejaaz:
which is basically an AI chip startup

Ejaaz:
founded by two or three MIT dropouts,

Ejaaz:
which is going head-to-head with NVIDIA, is back. And guess what?

Ejaaz:
They have raised another couple hundred million dollars, in this case,

Ejaaz:
700 million dollars, and have reached an astounding valuation of 21 billion dollars.

Ejaaz:
But that's not the headline from this announcement. The headline is this last

Ejaaz:
sentence over here that I'm showing you on screen, which is,

Ejaaz:
We're also excited to share that we've shipped our first rack,

Ejaaz:
custom GPU rack, to Jane Street.

Ejaaz:
Jane Street is basically a quant fund on Wall Street. They are very good at what they do.

Ejaaz:
And the fact that they are now leveraging this custom AI silicon chip to have

Ejaaz:
better AI trading algos is a pretty big milestone.

Ejaaz:
Now, just to kind of recap what Etch does, if you think about NVIDIA,

Ejaaz:
NVIDIA is like the king of GPUs. GPUs are required to train and inference AI models.

Ejaaz:
Now, their GPUs are very good, but their general purpose, which is good because

Ejaaz:
you can run it on any kind of model, but there are certain trade-offs that are

Ejaaz:
made in terms of like cost, power and efficiency.

Ejaaz:
The folks at Etched looked at this problem and said, we can build a better custom

Ejaaz:
chip that is hard-coded to the specific model that you are building.

Ejaaz:
So specific for your OpenAI model, specific for your Anthropic Claude model,

Ejaaz:
and it will be half or maybe even more cheaper than what you were spending already.

Ejaaz:
And it'll be lightning quick. There are certain optimizations that we can make.

Ejaaz:
This is a very hard problem, a huge undertaking. We listened to some of the

Ejaaz:
founders' stories, and they received no's from some of the smartest GPU makers

Ejaaz:
in the world. But despite that, they put their heads down and they built this custom chip.

Ejaaz:
And it turns out that they're also the fastest to deliver. Typically,

Ejaaz:
AI chips take around three to five years to go from concept to delivery.

Ejaaz:
These guys have done it in, I think, just under two years, which is absolutely astounding.

Ejaaz:
And we're about to see it in production. So just a very impressive announcement from the Edge team.

Josh:
It's unbelievable. I've spent so much time looking. I mean, we both do spend

Josh:
so much time looking at all of these companies that are spawning in the world

Josh:
of AI. And there is thousands, if not tens of thousands of people working on

Josh:
interesting problems to solve interesting, to reach interesting solutions. And,

Josh:
Etched is very different. So different that we actually recorded an entire episode

Josh:
about this weird random startup last month.

Josh:
And since recording that episode, EJ's, I don't know if you know this,

Josh:
the valuation has doubled in the last month. When we talked about them,

Josh:
just not even like four or five weeks ago, it was at a $10 billion valuation.

Josh:
Now they're trading at 21 billion.

Josh:
And it's very obvious once you listen to these people who are on the team talk

Josh:
about the product, how they've arrived there, their conclusions,

Josh:
the research that was required to actually reached this point where it's very

Josh:
much the real deal this is a company that anyone who works in ai or semiconductors

Josh:
or hardware would want to make

Josh:
they were just unable to because of the complexity and the difficulty that this

Josh:
team has been able to solve and as a result they have this unbelievable product

Josh:
that is specifically tuned to run

Josh:
large language model transformer infrastructure right on their chips and they

Josh:
are going to worth many many multiples more than they are today

Josh:
and i mean just a congratulations to them but also for anybody who's

Josh:
listening if you want to see what a badass team of high agency,

Josh:
high intelligence founders actually looks like.

Josh:
Read up about the co-founders, read up about the story. It is an unbelievable

Josh:
company that is destined for an incredibly bright future. I would love to be an investor in them.

Ejaaz:
I was about to say, self-serving for Josh and I, if anyone listening has access

Ejaaz:
to this deal, please reach out. We would love to be investors.

Josh:
I am obsessed with these guys in a way that not many people have captivated

Josh:
the attention. It's pretty amazing. And you know what you could do with all those chips, EJS?

Josh:
You can run a tremendous amount of agents. And if you are running agents on

Josh:
all of these chips and you're building for AI agents, chances are you may want

Josh:
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Josh:
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Josh:
thank you so much to ledger for sponsoring this part of the episode and as we

Josh:
move on from etched we have to talk about another breakout success which is unitary

Josh:
uh unitary for those that don't know if you haven't heard the name you've seen

Josh:
the videos of these little robots that are like crazy they're doing back loops

Josh:
they're running circles and like um at these track meets

Josh:
They're very cool. I think their IPO was oversubscribed at what, like 5,000%?

Ejaaz:
5,500, actually. Please get it right, Josh.

Josh:
5,500, man. It's unbelievable. And then as a result, the Unitree robotic shares

Josh:
rose 542% in early trading on Wednesday.

Josh:
Is it overhyped? Is this overhyped? Does this make sense? These numbers are insane.

Ejaaz:
It has to be a little overhyped. Listen, I'm not an expert in the Chinese stock

Ejaaz:
market, but they've had a few IPOs recently that have been absolutely insane,

Ejaaz:
including their memory manufacturer, CXMT, which, to be fair,

Ejaaz:
they are, I think, the fourth largest memory manufacturer.

Ejaaz:
So they're up there with like SK Hynix, Samsung, and Micron.

Ejaaz:
So they have a legitimate case.

Ejaaz:
These Unitree robots, I don't know, man.

Ejaaz:
I was looking at, I was speaking to some friends that are living out in China, actually.

Ejaaz:
And I was like, this is amazing. Like, you guys must be super excited about,

Ejaaz:
you know, these companies coming out and IPO-ing at such crazy valuations.

Ejaaz:
And apparently the sentiment in China around Unitree robotics specifically is,

Ejaaz:
it's just a toy maker. They don't actually make robots that are actually valuable.

Ejaaz:
And so I dug into this a little bit more.

Ejaaz:
And apparently, of the humanoid robots that they have, 40% to 60%

Ejaaz:
have only been sold for research purposes specifically, which means that the

Ejaaz:
majority aren't actually being used for practical purposes, like some of the

Ejaaz:
use cases which they advertise, such as

Ejaaz:
manufacturing at factories or automating warehouse facilitations and stuff like that.

Ejaaz:
They're actually just being tested, which isn't really confident or recurring

Ejaaz:
revenue that they can put on their books.

Ejaaz:
So if you map that onto, what is this, a 600% price increase on day one with

Ejaaz:
a 5,500x oversubscription on the IPO, maybe the market dynamics are a little

Ejaaz:
inflated and maybe they're still crushed back down.

Ejaaz:
Let's revisit it in a month. But it is crazy to see that Chinese stocks,

Ejaaz:
specifically robotics, are really starting to gain some momentum now.

Josh:
Yeah, it's a very cool news story. I personally am not touching this with a Zenfopole.

Josh:
That seems really scary. I love watching the videos. I'll continue to watch

Josh:
the videos. I'm very excited to see these robots.

Ejaaz:
Keep the dock flex coming.

Josh:
Yeah, it's very early in humanoid land. And while I am very bullish on China

Josh:
and their ability to make humanoids at scale, it feels a little early,

Josh:
but I'm glad people are excited. I'm glad there's enthusiasm.

Josh:
Next on the docket, we have a company that we just spoke about yesterday.

Josh:
So if you listened to yesterday's episode, we have a small little follow-up,

Josh:
which it relates to stripe and the acquisition that was made for to acquire

Josh:
open router it is officially official we were a little early but right and now

Josh:
it's official all the contracts have been signed,

Josh:
alex's holla who is the founder and ceo says um we officially have a deal and

Josh:
he kind of outlines the thesis and i know stripe as a result of this they shared a

Josh:
publication a blog post ejes that you were really excited so i'll let you describe

Josh:
what they spoke about here But some TLDR on Stripe is like, again,

Josh:
we're talking about unbelievable founders today.

Josh:
The Collison brothers, who are the founders of Stripe, are among the best of the best.

Josh:
They have built an unbelievable business, all starting with seven lines of code

Josh:
that allowed a person to pay with a credit card online quickly and easily.

Josh:
And they've developed that technology from basic credit card payments to basically...

Josh:
The entire payment infrastructure of the world. They started with credit cards,

Josh:
then they moved over to crypto and stable coins. Now they're working with agents

Josh:
to figure out how best to serve these new agentic transaction systems.

Josh:
And that's kind of where we find ourselves here. I'm reading the headline.

Josh:
It's that Stripe is officially telling investors that the singular area has

Josh:
begun. But explain the nuance behind what they actually mean when they say that.

Ejaaz:
Yeah. So in the official letter, which Stripe sent to their board of investors,

Ejaaz:
they basically described why they acquired OpenRata for $7 billion.

Ejaaz:
Why is a fintech company buying an AI lab for such an expensive amount that

Ejaaz:
doesn't even own or make their own AI models?

Ejaaz:
And the thesis is pretty simple. Number one, in a world where the internet was

Ejaaz:
booming, Stripe's core focus was to be the backbone of that entire internet economy.

Ejaaz:
How do you become the backbone of the internet economy?

Ejaaz:
Money. So they created the rails for money.

Ejaaz:
Then they peeked over the fence and they saw this massive tidal wave of AI coming

Ejaaz:
over with agents, with models, and they realized it's not money that runs that

Ejaaz:
AI economy, it's tokens, AI tokens specifically.

Ejaaz:
And so they wanted to own the infrastructure rails to own that AI economy.

Ejaaz:
It's very similar to what they do with money, which is why they're pairing both

Ejaaz:
of these together. So that's thesis number one.

Ejaaz:
But thesis number two, which caught my eye is, And I quote, Stripe basically

Ejaaz:
claimed that the beginning of the singularity has been here.

Ejaaz:
And the date specifically that they specified in this paper was January 1st.

Ejaaz:
And this is a large part of the thesis behind acquiring OpenRata.

Ejaaz:
They basically go on to say that we have reached a pivotal point

Ejaaz:
In our global economy where the future is very much dependent on AI and it's

Ejaaz:
going to accelerate pretty much anything and everything we know and touch.

Ejaaz:
The world is going to look very different five years from now.

Ejaaz:
And so the bet that they're making in this world of a singularity is AI models

Ejaaz:
will be embedded into everything, which means that thesis of AI tokens

Ejaaz:
flooding across the entire global economy is going to be a thing and Stripe

Ejaaz:
wants to be the backbone for that. So it's a big bet that they're making.

Ejaaz:
Open Router, I think on their last earnings that was disclosed by Atala,

Ejaaz:
because again, they are a private company, is making $50 million a year.

Ejaaz:
So $7 billion is a humongous markup.

Ejaaz:
But Stripe is making a bet that inference compute specifically is going to be

Ejaaz:
the biggest earner for AI going forward.

Ejaaz:
And all the numbers from Anthropic and OpenAI recently that have been leaked

Ejaaz:
proves that. So I think this is going to be in the future, if I had to guess,

Ejaaz:
one of the best acquisitions going forward

Josh:
Yeah and perhaps like an explainer on the singularity for people not familiar

Josh:
because this is it's a concept that's been around for a very long time like this is a

Josh:
a sci-fi concept for as long as i can remember in books probably 50 perhaps

Josh:
even 100 years ago where people speculated on this point in time in which

Josh:
the intelligence of artificial systems eclipses that of human beings and it's

Josh:
a moment in time in which ai becomes smarter than us where

Josh:
these smart machines are then enabled to build even smarter machines and it

Josh:
builds this kind of fast loop of recurring self-improvement and the idea is

Josh:
that the second order effects of that is that life changes so fast that humans can't really predict

Josh:
and are going to try their best to control the future and this has been this

Josh:
hypothetical for a really long period of time people always speculate whenever

Josh:
we come up with this super ai intelligence brain and the reality is is that

Josh:
straight believes that it's here and,

Josh:
I don't think anyone would disagree with them too strongly. Perhaps people will

Josh:
say we're not there yet, which is a fair criticism.

Josh:
But to say there isn't a clear path to getting there soon feels a little misguided.

Josh:
It's very obvious now. And it's interesting, the timing, too,

Josh:
that January 1st, because if you remember over Christmas break of last year,

Josh:
going into this year, that's when the real kind of like.

Josh:
Flow of like, yeah, that's when Cloud Code like really came out, started becoming good.

Josh:
And that was the moment in time in which developers stopped writing code by

Josh:
hand and started writing code using ai agents and now fast forward we're sitting

Josh:
here in august and it is unfathomable to imagine

Josh:
writing code by hand like people just do not do that there's absolutely no reason

Josh:
to do that it's weird to think that people ever did do that and that change over this.

Josh:
Eight month period is so extreme when you consider the second order of implications

Josh:
of of what that means for the world.

Josh:
Like now we're seeing these models that are so powerful, we can't actually release them.

Josh:
There's now infrastructure frameworks happening through the government to kind

Josh:
of protect and slow down this. OpenAI has paused progress because it's getting so fast.

Josh:
And if you heard about this even 12 months ago today, you would think,

Josh:
oh my God, this is faster than we expected. This is what the singularity looks like.

Josh:
And here we're sitting in it today. So pretty unique insight by Stripe,

Josh:
really awesome letter. I would highly recommend going through and reading it.

Josh:
It's a leaked letter. This was for private investors. So you get a little inside

Josh:
peek behind the curtain of what's actually going on at the company. Very cool.

Ejaaz:
And so moving on, chapter two of Jensen turning NVIDIA into a bank.

Ejaaz:
If you guys were watching the show last week, we released an episode where Jensen

Ejaaz:
basically managed to raise $500 billion from some of the top financial firms

Ejaaz:
in the world, including BlackRock, Blackstone,

Ejaaz:
to fund the future of data center CapEx for some of these biggest AI labs.

Ejaaz:
And we concluded that it isn't really a circular economy in the way that they're

Ejaaz:
raising it. It is based on a bunch of different milestones and is backed by very healthy debt.

Ejaaz:
Now, in chapter two, Jensen announced that he is spending another $100 billion

Ejaaz:
For OpenAI specifically.

Ejaaz:
He's investing it in this site in Ohio, which is arguably going to be one of

Ejaaz:
the biggest data centers in the world. It's going to scale up to eight gigawatts worth of compute.

Ejaaz:
It is going to bring in a nice and healthy $200 to $300 billion of revenue for

Ejaaz:
NVIDIA specifically from one data site, from one single customer.

Ejaaz:
And it's going to conclude over the next couple of years. Now,

Ejaaz:
the craziest part about this is he's baked into the contract that this includes

Ejaaz:
renewals of newer generation GPUs, which means that he's going to make $200 to $300 billion

Ejaaz:
three times over the longevity of this data center over the next five years.

Ejaaz:
So there's been a lot of contemplation around why Jensen is getting involved in this.

Ejaaz:
The thing that stands out about this particular investment is

Ejaaz:
He's investing these $100 billion specifically in the power and networking infrastructure

Ejaaz:
side of this data center. So he's not really doing it to help OpenAI buy the GPUs.

Ejaaz:
He's helping them set up the power transmitter lines to power these GPUs.

Ejaaz:
And why I wanted to speak about it on this show is we have said a few times

Ejaaz:
now, Josh and I have called it, that the next kind of investment theme within

Ejaaz:
AI is going to be on the photonics, optics, and power stack of the AI trade.

Ejaaz:
And this is yet another very in-your-face evidence point that Jensen is heading

Ejaaz:
that way. And if you look at like NVIDIA's investments over the last six to,

Ejaaz:
I don't know, like nine months, they've invested heavily in Optonics.

Ejaaz:
I think they put like two to three billion into Lumentum and Coherent each,

Ejaaz:
and now they're making a big play on the power side of things.

Ejaaz:
So just an interesting, noteworthy update. I think NVIDIA is going to backstop

Ejaaz:
this entire economy that Stripe is talking about,

Josh:
To be honest. I was reading this great transcript from Ben Thompson of Stratetri.

Josh:
He's just like this you know well-known writer on the internet for people that

Josh:
don't know and he was talking about kind of like where these restraints and

Josh:
thresholds might be in the process of scaling ai systems and he made this really

Josh:
interesting point where oftentimes people are focused on the energy the things that

Josh:
you know kind of like jensen is focused on the land power and shell but one

Josh:
of the other important considerations is like where is the money for all of

Josh:
this coming from and and what we have seen and we've been talking about this

Josh:
on the show over the past couple weeks but it's like okay we went from spending

Josh:
all of the free cash flow to starting to

Josh:
raise money from outside funding and now companies like google are issuing debt

Josh:
they're issuing equity in order to raise more money

Josh:
now you see nvidia and jensen huang working with every large bank in the world

Josh:
to tap into new sources of money these are places like pension funds and retirement

Josh:
funds that's what these banks hold so

Josh:
where do you go to next to raise the next tranche of money to build out the next large data center?

Josh:
It could be. And I really thought this was like a thoughtful insight. It could be the...

Josh:
The actual dollars are going to be running short and it's going to be very difficult

Josh:
to continue to raise the required amount of money to scale this thing so just

Josh:
an interesting thought as we wrap up the roundup today of like

Josh:
where's the bottleneck well everyone's saying it's here but like where are they

Josh:
going to get the money to fund it is an interesting thing to follow and we've

Josh:
been talking about this on the show we'll continue to cover it but if you've

Josh:
made it this far thank you

Josh:
you've made it to the end you are fully caught up if you've watched the other

Josh:
three episodes that we published this week because it was a pretty strong week i would say we had elon.

Josh:
And grokbot releasing grok 4.6 and it's incredible we had leopold making.

Josh:
Basically publishing his final portfolio um because you know he got liquidated

Josh:
but we talked about all of the filings what the smartest money on wall street is investing in

Josh:
yesterday we spoke about um stripe and their acquisition then we talked about

Josh:
what models to use based on what type of use cases you have and here we are

Josh:
today getting fully caught up on all things

Josh:
ai frontier tech so yeah, thanks for watching.

Josh:
We made it back again. EJ, any final parting thoughts before we get out of here?

Ejaaz:
No, I just wanted to say thank you folks so much for listening and keeping close

Ejaaz:
with us. We have added, I think maybe six to seven hundred new subscribers over

Ejaaz:
the last couple of weeks. Hello.

Ejaaz:
It's lovely to meet you. Welcome.

Josh:
A hundred, dude. A thousand. A thousand?

Ejaaz:
Oh my god. The momentum is really gaining with this channel.

Ejaaz:
It's awesome to see the kind of support and vibes coming from different people

Ejaaz:
we read every single comment um

Ejaaz:
i try to respond to as many of them as i can um you guys are growing in fandomship

Ejaaz:
which is awesome to see you guys are watching every single video we see a bunch

Ejaaz:
of like repeat users and listeners as well which is awesome to see wherever

Ejaaz:
you're listening to us on youtube spotify

Ejaaz:
or apple music please give us a rating um

Ejaaz:
give us a thumbs up subscribe turn on notifications leave us a comment it helps us out so much um

Ejaaz:
and yeah i think that's it uh enjoy your weekend this is everything you should

Ejaaz:
officially be caught up unless we're missing something pretty drastic that's

Ejaaz:
happening right now after we record and yeah we'll see you on the next one thank you guys