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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
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Speaker 2:TVPN. Monday, 08/11/2025. We are live from the TVPN UltraDome, the Temple Of Technology, the fortress of finance, the capital capital. Do they do that in the Korean version of TVPN? Do they scream at the camera and they open I I need to watch this.
Speaker 2:If you're not familiar, there's a very there's a very uncanny clone of this show's
Speaker 1:Korean format. TBPN clone is at the timeline.
Speaker 2:Yeah. Korean TBPN clone is at the timeline. Jun Park,
Speaker 1:which is I believe
Speaker 2:I'm in favor of this. Think it Who was
Speaker 1:is a technology brother
Speaker 2:Okay.
Speaker 1:Found NFM live Yeah. Over on LinkedIn. But we gotta find their intro. We gotta see.
Speaker 2:Yeah. We have to dig into this. I forgot.
Speaker 1:That you're watching NFM live in Korean would hit.
Speaker 2:Extremely hard. It sounds like it it it it it sounds incredible. But yeah, I mean this is fun. Obviously, you know, we played a lot with this format. We invented television, we invented news and now people are taking our invention.
Speaker 2:We forgot to patent it though. We should have patented news and television and shows and live stuff and business news. Would be
Speaker 1:really Technology news.
Speaker 2:But we forgot to patent it and so now everyone's copying us from over in Korea. But, I mean, makes sense. We don't really I don't think we have a large audience in Korea. And so have some fun over there. Hopefully, goes well.
Speaker 2:Good luck to you, NFM Live. I hope that you're massively successful. And I hope that, you know, you can start with, you know, the exact layout that we've done, and then you can kinda twist it and change Make
Speaker 1:your own.
Speaker 2:Make your own. And and and that's that's how these things start. Tyler, what you got
Speaker 3:for you? Okay. So I I just found it. They do not do any kind of interesting intro.
Speaker 2:They don't.
Speaker 3:Just start the show.
Speaker 2:They just start the show.
Speaker 3:No no energy.
Speaker 2:Well, no energy. Yeah. Cool. Okay. Step it up guys.
Speaker 1:Gotta copy the important stuff.
Speaker 2:Yeah. The important stuff.
Speaker 4:It's not about
Speaker 1:the overlay.
Speaker 2:It's about It's it's about the screaming. You losing your voice.
Speaker 3:Losing my voice. You gotta get bring up the energy.
Speaker 2:Yep.
Speaker 3:He's the host. Jordy, I clipped your intro
Speaker 1:Good and have never gotten more responses.
Speaker 2:Two times. Best intro we've
Speaker 3:ever done.
Speaker 2:Wait. Just this one right now?
Speaker 3:No. No. The one from last week.
Speaker 2:From last week.
Speaker 1:We started the screaming. Okay. I'm always trying to one up myself. The audience really
Speaker 2:likes it. Well It really it really helps because we're always like just, know, shuffling things around just one minute before we go live, and then we really gotta dial it in. And so the the the screaming really takes it up another notch. And you know what else takes it up another notch? Getting your business on ramp.com.
Speaker 2:Time is money. Save boat. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Switch your business to ramp.com. Gidley moment as soon as okay.
Speaker 2:Sorry.
Speaker 1:Wait. Important news.
Speaker 2:Yeah. Yeah. Please. Please.
Speaker 1:TBPN has hit Substack.
Speaker 2:Oh, yes. TBPN This is big..substack.com.
Speaker 1:We have a daily newsletter now. Yes. It is loosely based around the content that we cover on the show.
Speaker 2:Yep. So every day before the show goes live, we put together a run of show. So we we we select posts that we wanna talk about. We give our little takes. We figure out our our our the different things that we wanna dig into at various levels of depth.
Speaker 2:We were already putting those together, and we thought it might be fun to send those out to folks to both let you know, hey. Maybe this is a show that you wanna tune into. You wanna hear us talk about these things in more depth. You can hop on the stream. You'll receive the email right when we go live, so you'll be able to click and tune in if you want.
Speaker 2:And also, if you don't have a chance to listen to three hours of content that day, you can get a little bit of a summary in the
Speaker 1:Of the last day.
Speaker 2:Of the last day, and a little bit of preview of what's gonna happen today. So some of the top stories. And so some of the stuff we talk about on the show, we will have, you know, little summary teasers up there on our TBPN Substack. So please go subscribe and give us any feedback. You can reply to any of the emails that we send you.
Speaker 2:Let us know what you think. If you have pushback on the takes, if you have extra information to add, if you think we missed something, let us know through that. And then if you like certain pieces of the format, we'll see some of the analytics. We're gonna be tracking you. We're gonna be seeing we're gonna be seeing what links you click on, the open rates, how how far you scroll down.
Speaker 2:But if you particularly like something,
Speaker 4:just let us know.
Speaker 1:So, everybody who says you guys make too much content, can't keep up.
Speaker 2:Well, here's some more Here's some Some content.
Speaker 1:Content to help you keep up with all the content.
Speaker 2:Yeah. Indeed. And we couldn't spread this content all over the Internet without the help of Restream. One livestream, 30 plus destinations, multi stream, and reach your audience wherever they are. You can sign up for free.
Speaker 2:Restream. Thank you for hosting our show. So we talked about it yesterday, or we talked about it last week, and we talked about it a bunch. Genie three hit the timeline. Was maybe the biggest news of last week in terms of artificial intelligence was crazy because Yep.
Speaker 2:It was GPT five. But GPT five was more of this consumer update. We have some updates from Tyler. He's loving GPT five interestingly, kind of contrarian takes as a lot of people were dunking on it. Tyler, what did you like about GPT five?
Speaker 2:Oh, and give me your eval.
Speaker 3:Yeah. Okay. So so I've been over the weekend, I've been using it more for coding, like, various things. Definitely I've been using the the thinking mode like the whole time because I I'm on the proscription so you can choose thinking. So always think.
Speaker 2:So there is a drop down now?
Speaker 3:Yeah. Well there there always was a drop down at least for pro where you could do GPT five or GPT five thinking. Interesting. And now there's also I don't know if this was always there, but you can choose to add the legacy models too.
Speaker 2:So I
Speaker 3:can also I can still access the one five.
Speaker 2:Flagship model. I I've just been yelling at it because I thought the model switcher
Speaker 1:that was not available.
Speaker 2:Okay. Yeah. Yeah. Yeah. Yeah.
Speaker 3:So so there's the model router
Speaker 2:Yes.
Speaker 3:Which I think is just g p t five, and that'll route sometimes to thinking.
Speaker 2:Okay. But if but if I'm very stern with it, it usually thinks. It usually throws itself in thinking mode. Probably. Don't mess this up.
Speaker 2:Don't get it wrong. Then it'll be like I'm thinking, I'm thinking, I'm thinking.
Speaker 3:Yeah. But I I just always use thinking because I'm on pro side.
Speaker 2:Wait. Wait. So I have I have three versions. I have GPT five which is the flagship model. I have GPT five thinking which gets you more thorough answers.
Speaker 2:And I have GPT five pro
Speaker 3:Yeah.
Speaker 2:Research grade intelligence. I wanna be on pro the whole time.
Speaker 1:So I
Speaker 2:think I pro think pro
Speaker 3:was similar to o three pro where it's gonna be like a it's gonna take a long time.
Speaker 2:It's gonna take ten minutes.
Speaker 3:Whereas GPT five thinking is is similar to like o three
Speaker 2:Okay.
Speaker 3:Where you it would just always think. But sometimes it's it's pretty quick.
Speaker 2:Okay.
Speaker 1:Well, I'm in I'm on chat gbd.com. I can't find four o and I'm like, where is my girlfriend? Where's my girlfriend?
Speaker 2:I'm still using
Speaker 1:I actually can't see four o. They apparently added four o back.
Speaker 3:So so you can yeah. That might just be for Plus that you can go back. But but you can add legacy models.
Speaker 2:That's just for people who are really desperate and they applied to Sam Altman on X with a really funny post and he turned it back on just for them. So there's five people that have access to the old model, but everyone else is is rugged and on the new one. Okay. But give me your eval and give me your qualitative assessment of like of like the the model. Like like because it seems like you did you did a test where GPT five outperformed all the other models.
Speaker 2:But then simultaneously, it just seems like you've been having a good time. So break both of those down.
Speaker 3:Yeah. So so generally, like just for coding tasks, I found it very useful. I wouldn't say it's like blowing my mind with how much better it is than like o three or 4.1 or something like that. Yep. But it is like it's a good model.
Speaker 3:Yep. It's a good model, It's
Speaker 2:model, sir. Yeah. Like I'm it's definitely trying to think of what I did this this weekend. Yeah. A lot of times I was just like, what am I thinking of?
Speaker 2:I, you know, giving you some different stuff. How how do I add something to my path? Top US government contractors, hedge fund research report. Like, was doing a lot of this stuff. I was getting lunch with someone.
Speaker 2:They were recommending a piece of enterprise software. I just kind of described it. It nailed it very quickly. I don't think it took too long to to think. It was fine.
Speaker 2:I actually put in agent mode yesterday, and I had it hunt around on the Internet for a Nintendo Switch two, and it did find one in stock which was which was very useful because there are Nintendo Switch trackers that you can go and you can like and they scrapes all the websites. But this basically just did this on an ad hoc basis. It was good. It worked. It delivered.
Speaker 2:And then for other, like, kinda quick questions, it's always been it's been quick. And I feel like I should be it it's definitely gonna speed me up because it, like, it knows to not if I stick with the model router, it's gonna respond quicker for the stuff that it knows.
Speaker 3:So also even if you're using gip d five thinking like on thinking mode Yeah. Yeah. There's a button that says like give me a quick answer.
Speaker 2:That's right. So you
Speaker 3:can just tap it
Speaker 1:and then if
Speaker 3:it's taking too That's cool. But, yeah, also another thing was I I I forget exactly what I was writing, but it helped me with writing and I found it like better than I would have expected.
Speaker 2:That's cool.
Speaker 3:Yeah.
Speaker 2:Yeah. I feel like I feel like as part of the reasoning chain, like the first response should just be like, the the four o response. And then it should just surface that to you. And it should just kind of say, like, here's what I know so far. And then I'm gonna keep thinking, keep cranking on this to update this.
Speaker 2:Yeah. Go down the reasoning chain. And then if you're, like, if you're good, I'd almost like to to to flip that UX around so that it's automatically going deeper and fact checking it and improving the response over time over ten minutes giving me, you know, a normal response within ten seconds then spending up to ten minutes working on it. But if I'm satisfied with the ten second result, can just kinda click like I'm good. Yeah.
Speaker 2:That would be the the the that that might be the next like probably save money too.
Speaker 3:Yeah. That could be cool.
Speaker 2:Anyway. And then give me your eval.
Speaker 3:Yes. So I I thought of this thing. I think I I looked it up. I think someone might have written a paper about this like a year ago but it was like Sorry.
Speaker 2:Quick question. Does the Korean TBPN have an intern? We need to figure that out.
Speaker 1:You gotta copy the intro and the intern.
Speaker 2:You have to have an intern. You throw random questions at throughout.
Speaker 3:We can look.
Speaker 2:Okay. Anyway, so back to your
Speaker 3:basically, my the new benchmark I've kind of thought of, although maybe someone's done it before, gotta look more into it. But it's basically solving a Rubik's cube. So Yeah. Solving entire Rubik's cube is like totally like way too hard right now. But if you basically just like start with a solved cube and then just do like one move
Speaker 2:Yep.
Speaker 3:Then usually they can get one move. If you do two moves, they like none of them can get it except g p five.
Speaker 2:Okay. Only g p t five?
Speaker 3:Yeah. So you basically, you you can take like the state of the Rubik's cube.
Speaker 1:Two move champion of the world.
Speaker 3:Yeah. And then if you put it in a string, you can form it nicely and then
Speaker 2:give it to it.
Speaker 3:And then Yeah. GBT five thinking
Speaker 2:Rotating the cube feels it feels somewhat like Arc AGI in the same way of like there's this visual spatial test that then is represented in text tokens and and an LLM should be able to operate on those if it was able to transform that into true spatial thinking, but it's not quite there.
Speaker 3:Yeah. So so I think something I'm gonna try I think I might like write a little blog post.
Speaker 1:Mhmm.
Speaker 3:But I wanna try like actually putting it in image format right with like multimodal and stuff.
Speaker 2:Are you jealous of our sub stock? You're like, oh, maybe I'll have a sub stock. Yeah. Yeah. Oh, yeah.
Speaker 2:Yeah. Maybe I'll just start one. No big deal. You can put you can publish on ours. Okay.
Speaker 2:But yes, you should you you should flush that. So continue.
Speaker 3:But yeah. I was thinking of like trying different formats for the the input. Maybe that'll help it out. Yeah. Or doing like actual multimodal like putting an image of the cube state.
Speaker 3:Yep. But I was like very surprised. After two moves, I was kind of expecting like, you know, you can look up all the algorithms you need online.
Speaker 2:To finish the last
Speaker 3:two To finish the whole cube. So I was thinking like, oh, yeah. Let me just try the like like, I'll pass in with with three moves to go and like, obviously, you can get that.
Speaker 2:Yep.
Speaker 3:And then it couldn't at all. Yeah. And then I tried so this morning, I tried that was with no tool use. Mhmm. So this morning, I tried with g p d five with like the agent.
Speaker 2:Yep. So so so no tool use. It it was still writing Python. Right?
Speaker 3:Yeah. That's true. But it wasn't searching up like algorithms.
Speaker 2:Yeah.
Speaker 3:But this this morning I I tried it with agent. Agent. And it went to like a bunch of different yeah. Agent.
Speaker 2:Tube solvers. Yep. It did.
Speaker 3:And it did not it found them and it like said like, oh yeah, I'm using it. This is the best move. And then it like was totally wrong.
Speaker 2:Okay. Interesting. So that that feels like the that that feels like a pretty good test and a pretty good eval for like the era of agents. Like, Yeah. What I was describing this as Tyler.
Speaker 2:I was saying like, you have a random Rubik's cube. If I gave it to you and I was like, you need to solve this and you didn't have all the algorithms memorized, like, but you were like, it's my job to finish this cube. What would you do? You would Google how to solve Rubik's cube. You might watch a YouTube video.
Speaker 2:You might like go to something, some cheat sheet that's like type in all the colors on the Rubik's cube, and then it tells you exactly what to do step by step. Amazing. And there are tons and tons of these like solvers. Like like, the you go out there, you Google how to solve a Rubik's cube, you type in what you have on the colors, and then it tells you move this one, rotate this one. The problem is is that all those websites are completely built differently.
Speaker 2:Some of them are in WebGL. Some of them are in, you know, like just old HTML. Some of them are programs like some all games.
Speaker 1:The way the model learns to solve a Rubik's cube is by pretending to be a human and just Google searching.
Speaker 2:That's how they will solve every problem. Yeah. Because these tools exist. So it's like instead of like of like all rallying on door on DoorDash, just go figure out how to use DoorDash. Go figure out like the answer to like booking the flight won't be like reconstituting an airline from scratch.
Speaker 2:It'll just be like Google it. Find like use Google flights. Right? Like use use whatever's out there. And so it was it was impressive that it was able to perform at a higher level than the other models on the spatial reasoning required to finish the last two moves of the cube but it was underwhelming on the agent side that it wasn't able to find and use a cube solver because it clearly hasn't been trained on that.
Speaker 3:Yeah. But it is interesting that GPT five thinking does, like, way outperform. It it it was, like, thinking for, like, six minutes just to get two moves.
Speaker 2:Wow.
Speaker 3:Which like is really long. But it's like it is like I think it shows that there's like, you know, something. It's not just o three packaged up as like in a router.
Speaker 2:So did you test something? Or
Speaker 3:Yes. It did not
Speaker 2:And o three didn't. The first time. So so so there's something going on with the reasoning that is better. Like, this is it's it's weird because isn't o four worse than o three?
Speaker 3:Well, it's we we only we never got actual o four. We only had o four mini.
Speaker 2:Oh, okay. Okay. So so this could be, like, o four under the hood like a better reasoning model even more RL on top
Speaker 3:of it that's Yeah. Maybe.
Speaker 2:Smarter. Yeah. And it's and it's accessing that, you know, in a certain way but it's still like nowhere near one shotting like just random hard problems.
Speaker 3:Yeah.
Speaker 1:Yeah. I had lunch with some friends on Saturday.
Speaker 2:Yeah.
Speaker 1:And one of the friends is a physics professor at a very prestigious college. Yeah. And he was able to get GPT five pro to one shot a problem in about twenty five minutes.
Speaker 2:Yeah.
Speaker 1:That he said his grad that would take his graduate students months to do on their own.
Speaker 2:Months.
Speaker 1:Historically.
Speaker 2:Can't even imagine the type of physics run that takes a month to start.
Speaker 1:I know, Adam. I I don't wanna give away too much of alpha. Yeah. He was like His mind was like completely blown.
Speaker 2:This
Speaker 1:was on Saturday. You know, he had just gotten access to the model and he was completely blown away.
Speaker 2:It's it's such a weird era of the spiky intelligence. Yeah. Because like pretty much any human should be able to solve the last two moves of a cube of a Rubik's cube in like an hour of like tinkering with it and just trying stuff moving it back. Okay.
Speaker 4:Try it.
Speaker 2:Wait. What do you think, Tal?
Speaker 3:An hour seems like a long time. It's only two moves. You can just look at it. Yeah.
Speaker 2:Yeah. It doesn't seem that hard. Do we do we have
Speaker 1:Just look at it.
Speaker 2:We have your Rubik's cube right
Speaker 5:up there.
Speaker 2:We have a normal Rubik's cube in the studio. Right? Somewhere? Let's let's get that out there and see that. Toss that to me.
Speaker 1:It's already solved though.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 2:That makes it up. There we go.
Speaker 1:High stakes throw. That would have been deeply embarrassing for the firm if if you'd solve that.
Speaker 2:So yeah. It's like two two moves off and then you have to look at it and then you have to
Speaker 1:We'll do a couple moves and then let's let's feed it to Tyler and he can work on
Speaker 2:it. Oh yeah. See if he can do it.
Speaker 1:Okay. GPT pro can
Speaker 2:do it. Oh well. Oh yeah. How many times did you test it?
Speaker 1:Do you use agent mode and and tell him like figure this out?
Speaker 2:Figure this out.
Speaker 3:Well, that's why I tried agent mode. Didn't do anything.
Speaker 2:Didn't do anything. Yeah. Okay. Oh, well. Well, let's tell you about figma.com.
Speaker 2:Think bigger, build faster. Figma helps design and development teams build great things together, great products together, get started for free. So despite all the GPT five news, very exciting, and and and just a bunch of, like, progress that's happening, it feels maybe not as binary, not as not as exponential as some people were expecting, but lots of cool things. Also, I wound up using Claude code for the first time and had a really interesting experience there. I I had it do a deep No.
Speaker 2:Research No. Not at all. But I had to do a deep research report. And instead of instead of just spitting out like bullet points and tables, I had it just spit it out as HTML. And so it was able to it was able to generate like like really like I'll show you I'll show this to you.
Speaker 2:I don't know if you can see this. But like, can you see this? Yeah. I gotta take this off. Show show everyone.
Speaker 2:This is not gonna work. But basically, it's able to it's able to like show formulas, show different charts and graphs and just like use all the features of HTML which is really cool. Now there were tons of, like, hallucinations in here, and the actual quality of the research report wasn't that great. But we were talking to Doug at Semi Analysis, and he was saying that that Clog code is has been really good for research reports. So I think I'm gonna try and work that into my workflow a little bit more.
Speaker 2:And I and I feel like the next the next, like, layup for Anthropic is just wrapping Claude code in a mobile app so that you get access to, like, a remote file, like directory that can actually like write code, deploy websites, do all this stuff but from the app and then so then you can instantiate things. But the cool thing was that it felt like What? For the first time
Speaker 1:Won't that kill like $10,000,000,000 startups?
Speaker 2:Maybe. Maybe. But for for the first time, it felt like I was I was feeling this whole idea of like the generative UI, the on demand UI because as like, I was asking it to do this report on world models, and it just generated, like, different sections of the like, different charts and graphs and put them all up there talking about how these work, and it was able to just, like, create these little highlight, these little highlight sections for Odyssey, the company founded by Oliver Cameron. How much have they raised? Physical intelligence by Lockheed Groom and Carol Houseman have been on the show.
Speaker 2:They've had a $400,000,000 round. Jeff Bezos, Thrive, Luxe. The problem is, like, I think I still need to fact check all this because I I feel like the research wasn't as strong as as deep research or what you get from GPT five. But but it was very cool to see it just use all the HTML functionalities and and buckets to kind of create, like, a really readable website, which, of course, was then immediately mobile optimized, immediately, you know, you could read it this size, that size. And it just felt like the first the first, like, the first moment of, you know, generative UI, like on demand UI.
Speaker 1:To experience these things firsthand before you can really have that true moment.
Speaker 2:Much like you need to experience Vanta firsthand, automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program. Okay. So back to the actual big AI news of last week.
Speaker 1:Yes.
Speaker 2:Genie three from DeepMind. Alexander Holinski dropped a very fascinating series of viral videos on X saying something something fun we discovered you can use Genie three to step into and explore your favorite paintings. Here's a short visit into Edward Hopper's Nighthawks. And this video is crazy because it it and I said, this is a Studio Ghibli moment as soon as this goes general access. Like, as soon as everyone has access to this, you're gonna have the Studio Ghibli moment because everyone is familiar with that particular painting.
Speaker 2:Maybe not everyone, but most people. And it's just like, you can go walk around it and it feels like this real world. And I think that there's gonna be so many examples of
Speaker 1:Well, think of the example that I gave where you just take three photos from from like a specific moment, drop them, and create a world, an entire world around it. And then you can go relive this like three-dimensional memory.
Speaker 2:Exactly. Exactly. And so it's this like, it's not the I think the AI generative AI generated stuff is by default, like, very mid. Right? Like, AI slop is pretty, like, mid and, like, the AI generated photos.
Speaker 2:Like, if you just showed me a photo of a car or something that was AI generated, I'd be like, I would rather just see Max Verstappen driving I'd rather see a more cinematic image of of a Red Bull f one car that's just taken with a really, like Yeah. High quality camera and tells a story and and immediately builds my intrigue of oh, when was this? Was this during a race? Was he practicing? Like, there's just so much more value when something's real.
Speaker 2:Even if even if the fidelity is there, it's not quite there, but it's just less less of, the story behind it. But when you take something that people know or is personal, like a family photo or a painting that they're a fan of and you and you allow them the ability to to customize and and and experience it, I think this will go way more viral. And so this I I think Genie three and I think world models generally are gonna be the next like hot sector for AI. I think the GPT open source, GPT OSS, GPTOS is kind of cool, but, you know, we've been there. We've seen that.
Speaker 2:I don't think that there's gonna be that much new there. Cloud 4.1 was kind of this minor spec bump and even GPT five was, you know, somewhat incremental, obviously very key for the business to get them Yeah. You know, seriously competing in the enterprise space and then also, you know, improve consumer usage and just, you know, improve the experience of the ChatGPT app.
Speaker 1:The meme potential of this, you can generate a world and then share the link to that world and other people can drop into it, it's just gonna go incredibly viral.
Speaker 2:And even just exporting videos of this is good content creation. Even if you're just sharing the videos that you generated, but actually being able to share the link to is gonna be really really big. So I'm super excited about this. The big question from the show was, you know, what was gonna be this the Ghibli moment for world models. And I think we know it now.
Speaker 2:It's not going to be it's not gonna be a Doom knockoff because you can just go play Doom. You can play the original Doom. You can also play the latest Doom, which is like four k 60 frames a second graphics on Xbox and and PS five. Like, there are there are amazing ways to experience Doom if you're into Doom. And also, people don't just play Doom to go walk around a cool designed like hell world.
Speaker 2:They want to actually have a gun with a nano counter and a health bar and an armor And a boss. And a boss. And a story of some sort. Even if the story is like kind of blah, like they want to be able to progress and and it turns it into this this reward cycle of, okay. I'm, you know, I'm having fun.
Speaker 1:Require viable rewards.
Speaker 2:Exactly. And so I think exploring iconic images, paintings, memes, this is gonna be a ghibli moment. We got some recorded videos from the DeepMind researchers which we're showing you right now and you can instantly see the virality. I can't wait for this to go into general availability because I think we're gonna see some really crazy ideas come out of this that no one can really predict until you get it in the hands of of just like millions and millions of people.
Speaker 1:And friend of the show, Logan Kilpatrick went to interview Demis Yep. On Genie three and Deep Think and a lot more. And the interview just went up like an hour ago. So Yep. And and we're working on getting the Genie team on the show hopefully this week.
Speaker 2:I'm very excited for that. So the other interesting thing is like people have kind of stopped generating Ghiblis. And images in ChatGeePee is just like something that people use Totally. People might generate a Ghibli for something if the meme calls for that. But I find myself generating more like turn this person into a bodybuilder.
Speaker 2:A lot of this. But also also, know, you have some funny idea and you go to images and chat GPT and you say like, I wanna visualize this thing. What if we put a car in in Central Park and it was this color like AI images are clearly very useful for that.
Speaker 1:You have continued to be a power user of make this person a Gigachat more so than than the Ghiblis.
Speaker 2:Yes. Yes. Yes. The Ghiblis, I haven't Ghiblid in a long time, but I've certainly I've certainly generated a lot. I mean, I generate a lot of set design for, like, what the show should look like in the next version, a lot of ideas for, for marketing stunts and stuff like that.
Speaker 2:And so it's become this useful tool, and then, obviously, it's baked its way into, like, the the the backgrounds of, like, true Hollywood production, all sorts of video production. It's just like generative imagery is just a tool both for designers to pull references and use reference board or it's kind of like the first step in a plan to co create something
Speaker 1:Yeah. Actually, it's it's how you speed run to a something that's mock up quality Exactly. Not necessarily a product or or for release Totally. But instead of I mean, I used to make I I I think it's a way that you can Yep. Even if you're working with designers or people that are great Photoshop, you can just generate a v one that's pretty solid and say like, I wanna make this but make it like really good.
Speaker 2:Yep. And so Genie three is close to mock up quality. Like if you if you if you wanted to if you were pitching a video game or you were even pitching like a experiential world that you wanted to build or like you're building a store, a physical store for your business and you generate an image of what you think that one look what what that should look like, and then you wanna let the client say, hey, we're gonna invest $5,000,000 building out this this this Caffeine Goof Cafe in Nashville, like our friend did. Like, you could actually walk around it and really get an idea of what that is or you could Totally. Do get some of, like, the Matterport things for, okay.
Speaker 2:We took some photos of this house. We want you to be able to let let you walk around. Like, the tech is getting there. DeepMind is clearly scaling this. It's at seven twenty p 24 frames a second right now.
Speaker 2:Pretty close to optimal visual fidelity. They're gonna get to four k 60 frames a second soon, but there will be intractable problems that come up that I don't think you can just blindly throw scaling at similar to what happened in LLMs. And And so we're gonna be running down the same path we did with with language models. This is my take. So you'll use reinforcement learning to round off all the sharp corners or instead, like, kinda create spikes of spiky intelligence that create pockets of value within these generative worlds.
Speaker 2:So you can imagine if you're generating a video game, it's very important to have the main character look the same at the end of the game than at the beginning. So you might do some sort of, like, RL pass to make sure that character consistency is really important for your hero character. But really, it doesn't matter if I, like, come back after ten hours of wandering around, like, the the the video game and, a tree looks slightly different. Like, it's fine. So Yep.
Speaker 2:So there'll be areas where where these companies and these these foundation labs, like, go and apply a ton more RL to make sure that this particular feature works. But at the same time, it doesn't make sense to go and try and rebuild everything and bake everything into the model. So you're gonna wind up with situations where just like ChatGPT got a web browser and a Python shell, you'll probably these world models will need to be wrapped or interfaced with like a traditional database.
Speaker 6:Yeah.
Speaker 2:So that if you have an inventory and you wanna track health points or you wanna track ammo, that's not like hallucination.
Speaker 1:Generate a world and then you make it fixed.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 2:Fix fix like or or fix like the underlying territory of the world, the underlying map so
Speaker 1:that everything's
Speaker 2:the same, but then you're generating on top of that. Tyler, what's your take?
Speaker 3:Yeah. I kind of disagree Okay. That like scaling won't fix this. If if you look at the I I think if you look at Genie two Yeah. It had this big problem with like consistency.
Speaker 3:Right? You would turn left, then you would turn right again and it would like look totally different. And I'm pretty sure in the paper they basically say that the consistency was just like an emergent property of scale.
Speaker 2:Yep. So Consistency over what time period though?
Speaker 3:I mean over the minute long. Yeah. Guess it
Speaker 2:one hundred hours. One hundred hours. That's how long people play GTA five.
Speaker 3:Like a rolling, you know
Speaker 2:One hundred hours. Like, that's how long people will play these things. And it's like, they wanna be able to go back to if you're in elder scrolls, you wanna be able to go back to, like, the very first village you started in and see that the tree that you chopped down is still far I've there. Come. Exactly.
Speaker 2:Look Like, there are some there are some crazy properties in, like, in in Elder Scrolls where it's like in the first village, you accidentally killed the, you know, the the, like, the the blacksmith. And so later, like, twelve hours later, you come back and you can't get the sword that you want. Like like, that's that like, why bother trying to bake all that into the model? Why not just use a database?
Speaker 3:But I'm saying you don't you don't need to like like think about baking it into the model. It's just gonna like it's just gonna be an emergent property. Yeah. As you scale.
Speaker 2:Yes. But I do think you will wind up hitting plateaus of scaling. Just like just like, you know, Chatuchi PT like LLMs got pretty good at math where they could do two plus two and then they could do much more complex math. But at a certain point it was like we're not we're just gonna give you a python shell so that you can just actually do the real math.
Speaker 3:Yeah. That's fair I guess.
Speaker 2:Like because even even if even if scale would solve like the really really hard intractable huge huge math problems, it's like why burn the electricity to run that massive model to do some very very basic calculation that would take like five flops on just a CPU. Sure. And so like, you know, you don't need to and and I do think that there will be other there will be other tools that it doesn't make sense to to bake into the model. I mean just think about like multiplayer elements like how would that be baked in the model? Like you'd want to sit on top of just like a normal social network.
Speaker 2:Yeah. You wanna wanna sit on top like of some sort of normal like interface so that you can join the same game. Like I don't wanna recreate a new like epic game store every time possible
Speaker 1:to imagine like a new video game paradigm where the world is just constantly expanding there's no real rules and characters are constantly emerging. But at the same time, like imagine playing soccer
Speaker 2:Yeah.
Speaker 1:And if you dribbled to the side of the pitch at one point, like it just opened up and you could just keep dribbling. Like eventually, you'd get fairly, you'd be like, okay, like I actually like having a rule set. I like having this sort of consistency in the game Yeah. So that I have a framework in which I can play in. So in in so many ways this this will create entirely new like formats effectively.
Speaker 1:Yeah. Like you're taking the concept of an open world video game and you're Yeah. Just opening it up infinitely.
Speaker 2:Yeah.
Speaker 1:But I think, again, people will want that consistency of play and even a shared experience. Right?
Speaker 2:Yep. And, I mean, so Goldrock in the chat is saying $3,000 an hour to play at four k 60 FPS. I mean, that is a real consideration. Other the other question is just is just like, is there a way that you can pull forward adoption by, like, not being a deep learning purist? Even if even if even if deep learning is the solution over the long term while you're waiting for to build the the, you know, the $1,000,000,000,000 data center to actually hit the crazy crazy scale.
Speaker 2:If you can get user adoption by just using a normal database to track your inventory and your health bar like you'll get more adoption and then you'll create this flywheel. It's the same thing with ChatGPT. Like you could you you could have we could have just been like open and could have said like, look, there's no reason to give a to give an LLM access to a Python REPL. At a certain amount of scale, it'll be able to just reason about it and do do the Python in its head. Right?
Speaker 3:But But you can pull you can say like actually you do wanna like if you use the world model as like an RL environment then you can actually pull it forward that way by just like using it for other stuff, you know?
Speaker 2:Maybe. Like if you're using
Speaker 3:it instead of it's not a game it's like a data set that you use for your and then like oh yeah we can also release it as a game for like normal users. But really it's to train
Speaker 2:our robotics You're really held on this robotics Yeah. I I I think that there
Speaker 3:because data is like the big issue. At least that's what
Speaker 2:it is. Yeah. Yeah. Yeah. Certainly for robotics but I think that I think that there's I think there's a consumer product here.
Speaker 3:I agree. But the way that you like fund it is through is using as
Speaker 2:Maybe the opposite. Maybe the robots learn from all the humans acting like robots in a game. And then that and then that generates a ton of a ton of data that It's
Speaker 3:like one hand watches the other a little bit.
Speaker 2:Exactly. Exactly. But my but my real question is like DeepMind is obviously absolutely crushing on the research side. They're like really really it feels like they're really far ahead right now. This is clearly state of the art.
Speaker 2:The question is like what does it take for Google to actually get this out in the world as a consumer product? Everyone says GPUs will melt if they launch this right now. Maybe that's true. Maybe they need to optimize it more. But the the big question is like is like they had a large language model around the same time as GPT 3.5.
Speaker 2:Yep. And they were really close in terms of their GPT four first Gemini launch at the similar scale. But ChatGPT launched earlier, was more aggressive, broke through and became kind of the default. And I wonder if there's if there's if they should be more like risk on in terms of actually productizing this and getting in people's hands. Like, clearly people are gonna use this for bad things.
Speaker 2:They're gonna put all sorts of references reference images in there and be walking around them. Can imagine all the bad things that they'll do.
Speaker 1:Well, you can imagine them being more aggressive around a product like this because it doesn't threaten their golden goose. Like in hindsight, it
Speaker 2:kind of makes sense
Speaker 1:that they weren't
Speaker 2:Might threaten YouTube. But, yeah.
Speaker 1:Yeah. But you can also imagine where it's a catalyst for YouTube where a bunch of Yeah. There's like entirely new vectors of
Speaker 2:content. Feeding it in, you're exporting it, that type of stuff.
Speaker 1:And, yeah. I I can see this being like a net new category of content or just a tool that every creator can use to to make better videos. Whereas No.
Speaker 3:I just No. I was saying it's basically the same thing with like they had to release v o three. It's like it's all the same safety constraints. Right? You can't put like some bad image into v o three and then have it produce video.
Speaker 2:Yes. They they So it's like similar to So yeah. They they So I think it's Even even v o three, it feels like they're not being aggressive enough on the rollout of that.
Speaker 3:That's probably also just like it's just way too expensive to serve.
Speaker 2:For Google, the company that makes a billion dollars a day? Like really it can be that expensive? Like I feel like I feel like the ChatGPT
Speaker 1:I mean it says a lot that you were on the $500 a month v o three plan, and you're still getting rate limiting. Constantly.
Speaker 2:Yeah. To the point where I've like How much did you really because cost? I know that it's like such a rough experience to go in there. And then like, okay, I need to plan it out. Oh, I can only do three queries, and then I'll come back the next day.
Speaker 2:It makes it really, really hard to actually do any real work
Speaker 1:question is how expensive is that for that server? It must be it must be a lot.
Speaker 2:It must be expensive. Dollar a month plan. But but what, like, what what was the secret to Chatuchipi Tea beating Gemini? Like, the Gemini app launched three months later. So moving first mover advantage clearly matters.
Speaker 2:Also, ChatGPT, it seems like Sam Walton's never met a GPU. He doesn't wanna melt. Like, will he will do anything he can just to scale scale scale even if it's I I imagine the margins for the early ChatGPT launch were terrible, and I imagine they were burning tons and tons of money in terms of inference costs, and they were way, way upside down there. I mean, ChatGPT was basically free for, like, months. Like and it was, like, how?
Speaker 2:Like, this clearly has has operational costs. This has inference costs. Yep. And they're just eating it. And so, yeah, maybe being more more aggressive on the financial side.
Speaker 2:And then I and then I think
Speaker 1:Well, still I still think it'd for Google if you if they were to come out and launch a ChatGPT like product that didn't have, for example, like a knowledge cut off that ChatGPT did at that time already. So there's a there's a post here from a an account that does weekly a weekly newsletter of quotes from earnings calls. Mhmm. And they aggregated a bunch of quotes on AI driven changes in Google search, reducing referral traffic and impacting use in user engagement. So Yep.
Speaker 1:These are just CEOs in the last week. The the one here, the portion of our traffic that comes from Google search has declined from 52 to 28%. Another one from the Groupon CEO, Google is significantly changing the behavior of search result pages. What we see is that we have declining traffic. Another one on Google, when Google provides the AI response, there's a much lower click rate on it because it's typically user getting the answer in that response and they don't need to go further.
Speaker 1:Mhmm. NerdWallet CEO, the Google search is still pretty challenged. And another one, we can't deny it. It it is a risk on page views. And so again, these all these AI features are reducing people's need to just navigate the web Yep.
Speaker 1:And drive some of which is ultimately, I'm sure, paid traffic.
Speaker 2:Yeah. And maybe, yeah, maybe the world model stuff, video game stuff, it's like not as as threatening to their core business. I mean, clearly clearly is not. And so maybe Google will move faster on this and own the consumer the consumer product. But I just I feel like in the next twelve to eighteen months, like we are going to see some sort of explosion in like consumer AI driven around world models built something built on top of this, whether it's a game or meme engine or some sort of product.
Speaker 2:And and it's interesting because there are two or three serious serious companies building in this space. We talked to Descartes, who's building in this space. Fei Fei Li has World Labs, I believe, that's that's building this space. And and and it and this it feels like there's this dance from like, okay. You've done enough research.
Speaker 2:It's time to productize and you need to completely turn the ship of your company towards how can we get this out the door in a way that's sticky and viral but also doesn't completely put us out of business because the inference costs. Well we'll keep digging into it. We'll keep having people on the show to talk
Speaker 1:about it. Team over at DeepMind is posting. I just put a post in the chat.
Speaker 2:While you're pulling that up, let me tell you about graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship faster, higher quality software faster. Yeah. Can get
Speaker 1:started for free. Graphite.
Speaker 2:Let's pull up this post from DeepMind.
Speaker 1:From Vedant Misra. He is counter counter posting.
Speaker 2:Oh, saw this. This is so
Speaker 1:good. Sam Altman. If we can pull this up. This is the the Korean TVVN is gonna run into some challenges
Speaker 2:very quickly
Speaker 1:on pulling up post.
Speaker 2:There we go.
Speaker 1:Here we go.
Speaker 2:Oh, wait. This is a different post than
Speaker 1:Multiple posts at
Speaker 2:this multiple? Yes. Okay. So in this one, Google is the rebels are the rebels? He's he is what he's saying?
Speaker 2:Know. Do you mind I don't even know at
Speaker 1:this point. It's hard to tell who's the Death Star.
Speaker 2:Okay. I finally landed on it on what Sam Altman, the steel man of the Sam Altman Death Star post. The Death Star was the was the overwhelming weight of numbered numbered language model releases. And he was he was feeling the crushing weight of GPT five needing to be an order of magnitude bigger and an order of magnitude better and a and a massive qualitative step up and a binary change in the overall experience. And he blew he blew that up.
Speaker 2:He blew up the expectations that that numbered releases would be correlated directly to specific model capabilities. That's the closest I could get on this deal, man, of the of the Death Star post. The vague post.
Speaker 1:Alternatively, it was provocative.
Speaker 2:It got the people going.
Speaker 1:It got the people going.
Speaker 2:It did it did drive a lot of a lot of speculation and a lot of frustration.
Speaker 1:Well, over the weekend, you posted there's a 100,000,000 in computer hardware locked in the replies. It's your job to get it out. So if you're on X over the weekend, Donald Boat at laserboat nine ninety nine was on a tear. If you had a viral post over the weekend, he was gonna be in your replies saying, I agree. The only way we can drive culture, science and industry forward is if you overnight me a motherboard compatible with an AMD Ryzen blah blah blah blah blah.
Speaker 1:And I believe he's made some tremendous progress in terms of putting together this this computer.
Speaker 2:I was talking to him a lot over the weekend tracking the story. He said he was shy. He didn't wanna come on the show. But I a lot of people are are questioning, like, is this some scam? Martin Screlly was wondering if it's a scam.
Speaker 2:I think he's just having fun. And he's a good poster, and he is just he's kind of e begging and kind of shamelessly asking for stuff, but having fun. And it's funny. And it's basically like the the tipping version of the ex creator payout. Like, he's just getting extra stuff.
Speaker 2:So he has received almost everything. It's also hilarious the type of accounts that he responds to because it's everything from, like, Elon and Sam Altman to Dasha from Red Scare. And like he's all over the place. He's not he's not purely just going after like the richest has people in
Speaker 1:a specific taste in
Speaker 2:Poster. Yes. He has a specific taste in Poster. And I mean when he started this project, already had a 100,000 followers. It was a prolific Poster.
Speaker 2:But he is apparently going to have some sort of MIT physicist put the PC together. He says he doesn't know how to code, and he's not using it to, like, build software. He's more just interested in playing Battlefield six, which had a beta this weekend that apparently did very well and apparently blew out the Call of Duty beta, I guess. So there's this big debate over did Microsoft overpay for Activision because they acquired Activision for something like $70,000,000,000. They got Call of Duty and you would expect that Call of Duty would continue to defeat Battlefield which is an EA property.
Speaker 1:Axx Blizzard boss Mike Ybarra says Battlefield six to boot stomp Call of Duty Black Ops seven.
Speaker 2:Yep. Rough. Rough. So but, you know, it's it's fun. You know, he's 21.
Speaker 2:He's having fun on the timeline, getting an incredible PC that will be fully Battlefield six ready. I was in a similar boat when the first Battlefield game came out. Battlefield 1942. It's probably like 2003 or something. Had to beg my mom for a for a cutting edge NVIDIA graphics card No.
Speaker 2:Because I couldn't run it on my on my current PC. I had to build, I had to reply. Said, mom, you, me, Amalfi Coast. You know.
Speaker 1:I was so I was so apple pilled from a young age. Really? Had to I I I refed hundreds of soccer games to buy a maxed out MacBook Pro Okay. Which is still like terrible.
Speaker 2:Yeah. Yeah. It's a gaming PC.
Speaker 1:Gaming rigs but I would use that to
Speaker 2:play soccer Yeah. It was always PC master race but And and the last the last PC I built, the the the last bastion of the Windows ecosystem in my life is sitting right over there. I built that not for gaming
Speaker 1:I never even noticed that.
Speaker 2:I built that PC for rendering computer graphics using my God. Tyler's picking it He's gonna show off the thing. Donald Bowd if you want an older PC with a what does it have? It has it has two NVIDIA ten eighty Ti's in there. It's not bad.
Speaker 2:It has a Ryzen thread ripper. I think it has 64 threads actually. It might even have It's probably not as fast but it's pretty pretty solid CPU in there. That's a rig right there. It's a rig.
Speaker 2:I built that from scratch and I was rendering
Speaker 1:With scraps in a cave.
Speaker 2:With scraps in a cave. I was I was rendering computer graphics on Cinema four d. We did a little Houdini on there. You let it cook. It was it was a fun time.
Speaker 2:And then, also played some virtual reality on there. Had a good VR rig set up every once in while. It was fun.
Speaker 1:This is like, again, this is like Hunter Biden reminiscing on
Speaker 2:Yes. Smoking crack. Yeah. Never get John's crack. I mean, Donald Boat was like totally getting me back into it.
Speaker 2:I was like, maybe I maybe I should build a rig. Build a new rig and play Battlefield six. No. This seems like really good in the two minutes I have for free time this week. Absolutely not.
Speaker 2:Really quickly, Polymarket has which company has the best AI model at the 2025. And Google is still on a tear. The there was a major switch after GPT five dropped. Google's sitting at 75% for August 30 and way up there for September 30. And and even by the end of the year, Google is slated at 54%.
Speaker 2:So DeepMind is in is in control of the rebel alliance. Maybe they are the the death star because they
Speaker 1:All eyes on
Speaker 2:They cannot be deficient,
Speaker 1:definitely. Three.
Speaker 2:Although, of course, this is this is benchmark based. So anyway, Donald Boat, he's he's having fun. People are starting to say, oh, maybe it's astroturf. There's thousands of likes on every post. They think it may be fake.
Speaker 2:I think it's organic. I think I think the kid is just is just out there hustling, having some fun.
Speaker 1:It's hilarious.
Speaker 2:It it is hilarious and it's bringing me a lot of joy. And I think that like the the no one is getting over their skis here.
Speaker 1:It won't work again. No. The next person that tries to do
Speaker 2:this Yep. Yep. Yep. Is gonna be like
Speaker 1:Donald Boat knockoff.
Speaker 2:Yep. It's a one time funny funny like meme that that that does very well. And I don't think anyone here there's no promise of financial reward and most people are like, Sam Altman can afford a graphics card. Will Menidas can afford an AMD Ryzen seven eight core desktop processor or a or a motherboard. You know?
Speaker 2:And I don't think I think everyone was kind of chipping in what was reasonable to them where even if it's a scam, if it takes you for $200, it's not that big of a deal. It's it's a lot of fun.
Speaker 1:It's not a scam in my view. It's entertainment.
Speaker 2:I think it's entertainment and I think I did. I was trying to push him like, hey, you're gonna have some doubters. You gotta you gotta go live. You gotta stream Battlefield six when you get this thing set up. You don't need a face cam.
Speaker 2:Although he was asking for a a Blue Yeti microphone and that was suspicious because he was like, I'm really shy. I'm like, if you're shy, what do you want for? What's going on here? But, overall, I think he's gonna build the PC. I hope he streams Battlefield.
Speaker 2:I hope he's good. Could be a lot of fun. Anyway, let me tell you about Julius. What analysis do you wanna run? Chat with your data and get expert level insights in seconds.
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Speaker 1:And Great group. We you guys already know we love the CEO
Speaker 2:of Sunwalkar.
Speaker 1:Rahul.
Speaker 2:He's been on the show three, four times. He's been in person on the Friday show.
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Speaker 1:Finance product Yep. You can use it to understand your business better.
Speaker 2:I was talking to a VC over the weekend who was lamenting missing Julius because he understood who Raul was. But Raul was working on a previous company and Julius was a pivot out of that apparently. And and he was like, I should have just done it on the basis of like who Raul was and knew that he would figure something out. But we didn't like the particular that particular business, that particular market
Speaker 1:and Great founders are just one pivot away
Speaker 2:Exactly. From greatness. So and so, yeah. Yeah. You you you when you find someone, you gotta let them cook and let them let them figure it out.
Speaker 1:Yeah. Well, you know who else is cooking on the timeline.
Speaker 2:He's monitoring the situation professionally now.
Speaker 1:Former OpenAI researcher, Leopold Ashen Brenner, his fund situational awareness is up 47% in the first six months of the year.
Speaker 2:Love to see it.
Speaker 1:You may have first become aware of the podcast he did with Dwar Kesh and the essay that he wrote alongside it. Situational awareness is probably my favorite name for any type of fund in a long time. It just says so much. It's like, hey, we're aware of the situation, we're monitoring it and we're deploying, we're trading against the situation.
Speaker 2:I like it. It's definitely up there. It's in the conversation, but the bar is extremely high. You're going up against Cerberus. You're going up against Ares, the god of war.
Speaker 2:Like, the True. The the the ceiling for quality of fund name is so high when you're in the public markets. Wouldn't say this about VC funds because they they all have very
Speaker 1:similar Blue Owl. Sequoia Capital.
Speaker 2:Blue Owl is a great name for a fund, a private credit fund. But, I mean, Citadel, it's a it's a very strong name, you know. Bridgewater, Blackstone, BlackRock.
Speaker 1:I love it because it's unique. There's
Speaker 2:It is unique. Very unique. It is unique.
Speaker 1:It aligns with with this very viral thesis. Yep. And it says it says it says exactly what you're getting into.
Speaker 2:Yep. And it I mean, and it was it was incredibly accurate. Like when he when he posted the original situational awareness essay, it was something that was consensus in San Francisco and contrarian everywhere else. And so what I loved about this was that there were so many people that were seeing what was going on in San Francisco in AI and they wound up starting seed funds. And he was like, no.
Speaker 2:The real alpha is in the public markets in these like long tail
Speaker 1:Trillions of dollars of market cap. Exactly. It's gonna fluctuate based on AI adoption. Exactly.
Speaker 2:So so his portfolio is is very interesting. It's all deeper in the supply chain. Notably, Nvidia is missing. Maybe that was too consensus, but he's been long a bunch of things. Now, there was a little bit of confusion because in the 13 F which was released
Speaker 1:32% year to date, John. It's barely in the conversation. You're trying to put up 47% on a billion plus.
Speaker 2:You gotta yeah. You gotta go. You would have been a laggard in the fund. Wow. It's crazy.
Speaker 2:But yeah. So the 13 f came out, which is the the the fund filing showing the position of the hedge fund showing what they're in. There was a little bit of confusion because Intel was ranked at the top, but that was because it was a call. And when you buy a call, the the total value that you of the of the stock that you have the right to purchase is listed. And so if you have the right to purchase a billion dollars in Intel stock, that will be listed as a billion dollars.
Speaker 2:But in fact, you will not have actually invested a billion dollars in that call. And depending on where how far out of the money that is, that can be very, very cheap.
Speaker 1:Yeah. And and and people were questioning, like, hey, did this fund already blow up? Basically, because Intel is obviously
Speaker 2:No. No. They might have had to write down those calls or get out of the position. There's a million things they could do. But there's there's a bunch of interesting things in here.
Speaker 2:And so front page of the Wall Street Journal for Leopold, you'll love to see it at age 23. He emerged last year as a precocious artificial intelligence influencer, which I think sells him way, way short. But he did publish a widely read manifesto and then he also did a Dwarkash Patel episode which I think a lot of people saw clicks If
Speaker 1:you're an AI researcher now and you do a podcast and it goes a little viral, congrats. You're now
Speaker 2:You're an influencer. Influencer. But the the influence of that of that episode is crazy. So he so he did Dwar Kache. Most people do Dwar Kache for like an hour, two hours.
Speaker 2:His episode is over four hours long. It's so, so long. The PDF is a 170 pages. He wrote it's a multi part essay series. It's a fantastic it's a fantastic episode.
Speaker 2:It's a fantastic, PDF. It's a billion dollar PDF as they say. The PDF that spawned a billion dollars in capital. Yeah. Yeah.
Speaker 2:23 year old with no professional investing experience quickly raised more money for a hedge fund than most pedigreed portfolio managers when they strike out on their own. As valuations of NVIDIA, OpenAI, and other artificial intelligence companies continue to soar, so do investments in hedge funds hoping to ride the AI wave. Ossenbrenner's San Francisco based firm, situational awareness, now manages more than 1,500,000,000.0, people familiar with the matter, said he has described the firm as a brain trust on AI, and he certainly seems to be in the thick of it cozying up to Dwarkish Patel. He's got Patrick Paulison. He's got Matt Friedman in.
Speaker 2:He's got a he's got a really stacked roster that of people that know what's going on at the cutting edge of AI, where the plateaus will be, where the investments will be made, the distribution of where different where different data center investments will be made, where the different bottlenecks will be. That's really, really key to the strategy.
Speaker 1:Yeah. It shouldn't it shouldn't be a surprise that he was able to accumulate this much capital so quickly because, you know, again, if if you're if you're Daniel Gross or Nat Friedman and you wanna allocate to a manager that deeply Yeah. Understands AI, you're you're probably better off finding a, you know Yeah. Incredibly intelligent 23 year old that was at a lab Yeah. That can then deploy capital for you Yeah.
Speaker 1:Against all these different trends.
Speaker 2:It's basically like 1,500,000,000.0. What is that? Like, one researcher's lifetime earnings? So he just needs one?
Speaker 1:Just one.
Speaker 2:Just one. Graham Duncan I mean, the
Speaker 1:the the the core LP in the fund as well.
Speaker 2:You still got it, baby?
Speaker 1:Of he does. Of course he does.
Speaker 2:Absolute picker. Cover of Colossus. Cover of Colossus. His strategy involves betting on global stocks that let's see.
Speaker 1:Let's give it up for global stocks.
Speaker 2:That stand to benefit from the development of AI technology such as semiconductor infrastructure and power companies along with investments in a few startups including Anthropic. Oh, he's in Anthropic.
Speaker 1:There we go.
Speaker 2:He told investors he plans to offset those with smaller short bets on in on industries that could get left behind. Situ situational awareness gained 47% after fees in the first half of the year, some of the people said. In the same period, the S and P 500 gave in about 6% including dividends, while an index of hedge funds compiled by research firm Pivotal Path rose about 7%. And so he is crushing the competition. We'll get into some of the pushback here, but I am very excited for this.
Speaker 2:Aschenbrenner, a native of Germany, briefly worked as a researcher at OpenAI before being pushed out. It was very interesting. He he called the he called OpenAI's security measures egregiously insufficient and then he shared a document with external researchers about the about how OpenAI was doing security and that violated company policy. So he was pushed
Speaker 1:get pushed out?
Speaker 2:I don't know how big it would that really is. Like, I I don't know. Like, you should be able to talk to other people. Obviously, you shouldn't, like, violate company policy. Kind of weird to, like, talk trash about your own company's security things.
Speaker 2:And then also, we're in this weird phase where, like, okay. Like, hey. You got a habeas corpus when you talk about the security stuff because, like, if you're if you were saying if if you were running around the building being like, we're all gonna get turned into paper clips. We're all gonna get turned into paper clips. And then it's, like, three years later and, like, nothing's happened.
Speaker 2:It's kind of like, come on, man. Like, what were you doing? But if he was sounding the alarm about geopolitics, which is something he did in situational awareness or, you know, AI psychosis, like, there are a lot of things that are good to research in safety. And so his overall take was he I think he benchmarked the entire industry and found that, you know, like, less than 1% of AI head count was going towards, like, safety and the alignment problem. And so he identified that as a problem to to to kind of go after.
Speaker 2:But now, you know, he's he's more focused on the public market. So Aschenbrenner, native of Germany, worked at OpenAI. He named situational awareness after his a 165 page essay he wrote about the promise and risks of artificial superintelligence. He recruited Carl Schulman and another, another AI intellectual who used to work at Peter Thiel's MacroHedge Fund as director of research.
Speaker 1:Great pickup.
Speaker 2:The firm's backers include Patrick and John Collison, the billionaire brothers who founded payments company Stripe, as well as Daniel Gross and Nat Friedman, who Mark Zuckerberg recently recruited to help run Meta Platform's AI efforts. Graham Duncan, a well known investor who organizes the SOAN conference, is an adviser.
Speaker 1:It's really a who's who.
Speaker 2:It is. We're quote, we are going to we're gonna have way more situational awareness than any of the people who manage money in New York.
Speaker 1:Wait for wait for this line. He says, we're definitely going to do great on investing.
Speaker 2:I love it. Confidence, baby. And another sign of the demand for Ausch and Brenner services, many investors agreed to lock up their money with him for years. Other recent launches include an AI focused hedge fund from Value Aligned Research Advisors, a Princeton, New Jersey based investment firm founded by former quants Ben Hoskin and David Field.
Speaker 1:Are ever really a former quant? Once a quant, always a quant?
Speaker 2:That fund has a billion and VAR also manages about 2,000,000,000 in other AI focused investment strategies. VAR's investors have included the philanthropic foundation of cofounder of Facebook, Dustin Dustin Moskowitz, according to regulatory findings. Veteran hedge fund firms are entering the fray too. Last year, Steve Cohen tapped one of his portfolio managers at point seventy two asset management, Eric Sanchez, to start an AI focused hedge fund that Cohen planned to stake with a $150,000,000 of his own money. Assets of the fund called Tourion after AI after AI theorist Alan Turing who's on the madness list, baby.
Speaker 2:We'll see if he can hold on in the next revision which is coming soon.
Speaker 1:Tourion lot of people.
Speaker 2:Is up about 11% this year and gained 7% last month. So a little bit of a slower start for Turion compared to a situational awareness that seems to be absolutely swinging for the fences. It is no surprise that the that the thematic funds are springing up to capitalize on the frenzy. In years past, hedge funds specialized in the transition to clean energy and investing in with an environmental, social, and corporate governance lens proliferated in response to client demand. Identifying a winning theme isn't the same as trading it well.
Speaker 2:Investors' taste can be fickle. Many prominent ESG hedge funds have either shrunk or gone out of business.
Speaker 1:Right. But was it I don't know. It's hard to say that smart money was saying that ESG was going to be such a winning theme.
Speaker 2:Yeah. It was odd because it wasn't it wasn't some like underlying technological shift. It was more just like
Speaker 1:It was values based investing.
Speaker 2:It was values based investing but it was also like predicated on more demand because everyone there it was like a game of musical chairs a little bit. It was like, well, I think that Harvard is gonna want an ESG strategy, so I'm gonna build one. And Harvard says, I'm gonna want one because Caliper's gonna want one.
Speaker 1:There was there was a time that I think consumers specifically were demanding sustainability Yeah. From brands. And it was really like a feature to a product.
Speaker 2:But I
Speaker 1:think that is changing Changed things some for for sure. The market swoon that followed the January release of an advanced low cost language model from Chinese company DeepSeek showed the fragility of the valuations of AI winners though the market has roared back since. I don't
Speaker 2:long Jevan's paradox. Come on.
Speaker 1:Come on. Come on. AI focused investors argue the long term trend of development and adoption are inevitable even if there are bumps along the way With so many publicly traded companies that operate in the AI adjacent economy today, stock picking funds often pile into the same positions as one another and more generalist hedge funds. Vistra, a power producer that supplies the juice to AI data centers, was a top three US position of both situational awareness and VAR investors as of March 31 according to each of their most recent securities filings. Other hedge fund managers are debuting funds to make investments in privately held AI companies and startups.
Speaker 1:Gavin Baker's Atrades Management
Speaker 2:teamed
Speaker 1:up with Valor Equity Partners to launch a venture fund earlier this year that has raised millions from investors. Millions is Yeah. Such a funny way to describe a fund.
Speaker 2:It's like I'm sorry.
Speaker 1:I would hope it's in the millions otherwise, what are you doing?
Speaker 2:10 dozens of dollars.
Speaker 1:From Oman's sovereign wealth fund, each firm separately invested in XAI. XAI. At least one portfolio manager is planning an AI hedge fund as a comeback vehicle. Sean Ma wound down his Hong Kong based firm Snow Lake Capital.
Speaker 2:Snow Lake
Speaker 1:I mean, anytime you add smash capital to the end of
Speaker 2:Always an improvement.
Speaker 1:Word or a couple words, it always elevates everything involved. Yes. After it agreed to pay out 2,800,000.0 to settle securities and exchange commission charges last year that the firm participated in stock offerings of companies that it had also bet against. Ma took over investment firm called M37 Management in Menlo Park earlier this year. He's currently fundraising for a hedge fund focused on AI software and hardware.
Speaker 1:So a lot of action.
Speaker 2:Did you know that Meta is calling their AI lab TBD lab or something like this? You see this?
Speaker 1:Since when?
Speaker 2:I don't know. Thought it was MSL but the the journal saying Meta's TBD lab tackles new version of LAMA. I think this is some sort of like sub lab focused on open source or LAMA specifically At the forefront of the push to build computer a computer mind smarter than any humans is a team dubbed TBD Lab, which houses many of the researchers the company has lured from rival labs in some cases with pay packages of tens or hundreds of millions dollars. TBE lab as in to be determined is spearheading Thank you for that. The newest version of LAMA, the company's large language model according to people familiar with the matter.
Speaker 2:I don't know. Just interesting. I I That that feels like some weird leak that like the journal's like misinterpreting. Anyway, back to Leopold. Interesting interesting strategy.
Speaker 2:I I think a lot of people are kind of so Young Macro has an interesting take here. Leopold Aschenbrenner's fund has outperformed basically every mainstream hedge fund year to date, and he's running a billion dollars of capital. The gulf of bill the gulf billionaires and pension funds are watching this. Capital management will soon become an an activity exclusively done by chronically online zoomers, And there's certainly a lot of value in having
Speaker 1:Give it
Speaker 2:up for all
Speaker 1:the locked in Online Zoomers.
Speaker 2:Yeah. Let's give it up for ProFound. Get your brand mentioned on Cheshire PT. Reach millions of consumers who are using AI to discover new products and brands. You can get a demo.
Speaker 1:So funny. I'm looking at the comments on on wsjmhmm..com. Mhmm. Giving a twenty three year old 1 and a half billion to invest is pretty solid proof of a market top.
Speaker 2:How old was Ken Griffin when he started Citadel again?
Speaker 1:Wasn't he like 18?
Speaker 2:Oh, yeah. He was at Harvard. He was an undergrad. He hadn't even graduated yet. That's right.
Speaker 2:Interesting.
Speaker 1:Say you Just never studied the greats.
Speaker 2:Just say you never studied the greats. Yeah. I mean, like, I I I I don't know. Like, the the of course, there is a risk that there's that there's some bubble and the risk
Speaker 1:Of course, we're in a bubble. That doesn't mean you shouldn't try to make money on it.
Speaker 2:Exactly. But but there but there is a risk that you get caught over your skis at the wrong moment. There's a pullback and the fund draws down really crazy. But again, Citadel drew down like 70% in the housing crisis.
Speaker 1:All the greats have suffered a massive drawdown. Happens. Look at Bezos.
Speaker 2:I feel like Leopold, this is what he's meant to do. And and I'm I'm I'm rooting for him. I'm excited for it. It's very very cool. Anyway, this will be this will be will this be good news for Leopold?
Speaker 2:He's not in Nvidia. He you know, in some ways you could say he is net short Nvidia because he is long everything but NVIDIA at this point. Is this good news? Is he cheering? Is he sad?
Speaker 2:The news is that breaking from the Financial Times, NVIDIA has agreed to share 15% of revenues from h 20 chip sales in China with Uncle Sam. According to export control experts, no US company has ever agreed to pay a portion of their revenues to to obtain export licenses. We were talking about this this morning at the gym.
Speaker 1:Uncle Sam eats first.
Speaker 2:And I was like I was like, certainly, like, this has to happen, like, all the time. I I I chat you PT it and it's like, actually, it's unconstitutional. You can't do this at all. And so I'm sure some some folks worried about Trump's overreach and abuse of the of the federal system will be up in arms over this.
Speaker 1:So we're
Speaker 2:gonna have
Speaker 1:Peter Harrell on the show in twenty minutes. We're gonna talk to Aaron Gittan January on it 2021 to 2022, Harrell served at the US White House as a senior director for international economics jointly appointed to the National Security Council and He the National Economic co led President Biden's EO 14,017 supply chain resilience agenda, worked on the global digital five g and telecommunication strategy, spearheaded negotiations with the EU on data privacy, and served as a White House representative on a number of related matters. So excited to get his
Speaker 2:takes. He
Speaker 1:shared a bunch on LinkedIn yesterday evening or this morning. So we'll kinda wait to get into that.
Speaker 2:The wording in this journal article is so wild because it it's not saying, like, the IRS or something. It's saying the Trump administration will receive 15% of the sales as part of a deal to approve exports of NVIDIA's h 20 chip. So it's like, where exactly is the money going? Like, I guess it goes in the treasury, the commerce department, but it's just funny to phrase it as like, Trump gets to control where it goes. But hopefully, it goes down towards paying down the debt.
Speaker 2:Like, I I I guess that's the
Speaker 1:Bone GPT says 15%. That's all. Off the top. You don't gotta worry about nothing else. No problems.
Speaker 1:No supply chain disruptions. So
Speaker 2:anyways Exports of the h 20 and m I three zero eight were halted in April. So this actually applies to AMD as well, which also has a similarly, like, nerfed GPU for China.
Speaker 1:And Trump had a quote
Speaker 2:on They yeah. They they they they halted the trade of these h twenties. Jensen Huang has gone on a charm offensive since then, says the Wall Street Journal, talking to officials in both countries about the need to do business with each other. We follow rules the US government sets for our participation in worldwide markets, NVIDIA said in a statement on Sunday. While we haven't shipped h 20 to China for months, we hope export control rules will let America compete in China and worldwide.
Speaker 2:This is an interesting one. I mean, there there are there are there are good arguments on both sides. You know, if you're super, super intelligence pilled, if you're AGI pilled, you probably don't want that in the hands of a rival country. But if this is more like Microsoft Excel, why not go sell some seats over there? Why not go sell some licenses?
Speaker 2:I mean, we sell airplanes over there. We sell seven forty sevens.
Speaker 1:But we don't sell f 30 fives.
Speaker 2:Yeah. But is this an f 35? Or is it
Speaker 1:That's a big question.
Speaker 2:Or is it souped up XL? You know? And and that's the debate. And I think a lot of people are shifting over into the camp of like, this is knowledge retrieval. This is like pretty generic hardware.
Speaker 2:This is not this is not as as a as critical of
Speaker 1:Trump saw Trump saw the GPT five launch and
Speaker 2:said That's him.
Speaker 1:Okay. We'll give him some chips.
Speaker 2:We we I mean, why were we saying that he didn't care about the deficit? Because he was super AGI pilled. Why is he now focused on the deficit and not worried about competition with China? Because he's less AGI pilled now. So he says, you know what?
Speaker 2:Like, I don't think God in a box is coming down the pipe anytime soon. And so let them have them. Whatever. It's fine.
Speaker 1:Trump on Monday left open the possibility that export its Blackwell chips for a higher price. The Trump administration had closed the door on the export of that technology to China even after reversing course on the h 20. On Monday, Trump said that he'd consider allowing it. The black well is super duper advanced. I wouldn't make a deal with that, although it's possible said.
Speaker 1:Make a deal some somewhat enhanced in a negative way. Black well in other words, take 30 to 50% off of it. But that's the latest and greatest in the world. Nobody has it. They won't have it for five years.
Speaker 2:Okay. Wild card. Nvidia's got a track this.
Speaker 1:And he said Sorry. Note again. Continue. Trump said Jensen will return to the White House in the future to discuss selling an unenhanced version of Blackwell. Yeah.
Speaker 1:I think he's coming to see me again about that but that will be an unenhanced version of the big one.
Speaker 2:The big one.
Speaker 1:You know, we will sometimes sell fighter jets to a country and we'll give them 20% less than than we have.
Speaker 2:Okay. See see see? We do sell fighter jets to come to countries. Let's go. Raghav says it should it should go into the sovereign wealth fund which he can eventually help pay down the debt.
Speaker 2:Yeah.
Speaker 1:Well Yeah.
Speaker 2:That makes sense.
Speaker 1:A lot of people have been Venmoing the government.
Speaker 2:The so NVIDIA's gonna need to track this. It's very similar to sales tax. They need to get on numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Maybe this is a line expansion for numeral.
Speaker 2:Track your export your export bill.
Speaker 1:That's right.
Speaker 2:In other chip news, Tom Cotton is diving back into the the Lip Bu Tan news at Intel, the CEO. Of course, Lip Bu Tan had to visit the White House and is has been singled out by Trump as unacceptable, and Trump called for his resignation. We kinda debated that on the Friday show, but Tom Cotton, the, I believe, Republican senator, he said, the new CEO of Intel reportedly has deep ties to the Chinese communists. US companies who receive government grants should be responsible stewards of taxpayer dollars and adhere to strict security regulations. The board of Intel owes congress an explanation.
Speaker 2:And so, Li Boutin is set to visit the White House today. He probably is there currently or was there earlier today, after president Trump called for his removal last week over ties to Chinese businesses. This is, Li Boutin is not. He was born in Singapore and he's an American citizen, but he had a venture fund that did a bunch of deals in China. And so that's kind of, I think, the main focus.
Speaker 2:And when you look at the web of, like, all the deals that he's done and all the company, it's like a lot of companies. And so it looks like this crazy spider web. It looks very, like, red stringy. So Thanh is expected to have a wide range of We gotta get the whiteboard out, break it down, get Lip Buutan on the show. Tyler, could
Speaker 1:could you whiteboard out Lip Buutan's portfolio?
Speaker 2:You're gonna have to you're gonna have to look it up. There there is a there is a crazy chart over here somewhere. But Tan hopes to win the win Trump's approval by showing his commitment to the country and pledging the importance of keeping Intel's manufacturing capabilities as a national security issue. Trump has aggressively pushed US companies to make changes raging ranging from eating the cost of tariffs to doing business with more conservatives and other political allies. So the you know, Trump said the CEO of Intel is highly conflicted and must resign immediately.
Speaker 2:There's no other solution to this problem. The odd thing is that it's like, okay. So so, like, Intel with, like, their really lagging semiconductor technology is now critical to America, but NVIDIA h twenties aren't, and we can let those go to China. So there does seem to be some, like, incongruence here. Right?
Speaker 2:Have you sorted that out at all?
Speaker 1:Mean, in the conversations we had last week, it feels like Intel is still incredibly strategic and important. Yeah. And we need to take it very very seriously. Like, we need to make sure that they can like The United States, it's it's the the foundry business in particular. If you didn't hear our interview with Fabricated Knowledge, Doug over at Semi Analysis on Friday, go listen to it.
Speaker 1:But, yeah, I think I think universally people agree that Intel is important. It's in a bad situation. But the so the question then becomes, is Lip Buuton the right guy to steward it? Yeah. And ultimately, it's the Intel board that should be determining that.
Speaker 1:Right? Yeah. Doug did say he had issues with the board. Wasn't exactly excited about their leadership over the last decade and a half. Yep.
Speaker 1:But again, this this kind of thing typically feels
Speaker 2:like should be. If you were trying to keep semiconductors out of the hands of China, you would be anti h 20 sales and anti Lip Buuton in in at Intel potentially. And if you had a more laissez faire attitude, you would say, yeah. Lip Buuton's fine and h 20 sales are fine. But it's weird to be like, h 20 sales are fine but Lip Buuton is not fine.
Speaker 2:That's where there's like some incongruity. But I think this will all be resolved. It's probably just one of these Trump like gambits where art of the deal is gonna ask for Intel to, you know, donate to some sort of thing or, you know, pay something.
Speaker 1:I think they should donate to themselves.
Speaker 2:Yeah. They should. Donate to the shareholders with a buyback, maybe. I don't know.
Speaker 1:I don't know. Just figure it out.
Speaker 2:Donate the donate the fab business to TSMC or something like that.
Speaker 1:I think I mean I think that's the whole point. It's like we can TSMC can be producing chips in The United States but we still shouldn't let a company like Intel just fail at a point where it should be on the path to thriving. Yeah. Mike Moritz was in the journal over the weekend.
Speaker 2:He wasn't in the journal. He was in Oh, the financial times. In the in the Financial Times opinion section. Intel must not bow to Trump's attack on its CEO. The latest character that US president Donald Trump has attempted to assassinate is Lip Buutan, recently appointed chief executive of Intel firing from his perch on true social.
Speaker 2:The president wrote the CEO of Intel is highly conflicted and must resign immediately. For context here, Mike Moritz is Sequoia, not founder, but but long time GP. The the Financial Times describes him as a Silicon Valley investor. He doesn't quite do the job, but
Speaker 1:It's technically true.
Speaker 2:But Sequoia, I believe, invested in Intel and has a long relationship with the company. And Mike Moritz is, I believe, anti Trump, but then there were a few other folks at Sequoia who were pro Trump in this last cycle. So there's a little bit of a divide there. But I think Mike Moritz is out of Sequoia at this point or has maybe moved on to a different piece of the organization. It's all very complicated.
Speaker 2:Can't keep it perfectly, in order. But says, while presidents have sometimes expressed their outrage about the behavior of the corporate sector, Trump's assault has no modern precedent. The source of the president's ire and that of Tom Cotton, Republican chair of the Senate Intelligence Committee is is Tan's business dealings with China as both venture capitalist and in his prior role as chief executive of California based Cadence Design Systems, a maker of electronic design systems. The president and senator pointed to a $140,000,000 payment agreed by Cadence last month as part of a plea deal to settle claims of illegal exports to China between 2015 and 2021. They have also lambasted Tan's venture investments in a number of Chinese semiconductor companies.
Speaker 2:In addition, they are seeking to question whether with Tan with Tan at the helm, Intel is jeopardizing the $8,000,000,000 grant it was given under the Chips and Science Act that was passed under passed by the Biden administration. The attack on Tan comes at a time when the president's policy towards China and the Chinese tech sector seems to change by the hour. Of course, it's much easier to smear a man with accusations than examine his record and character. Tan, 65, is a longtime American citizen and much admired figure in Silicon Valley who is known for operating with a soft spoken authoritative dignity. I've known him as an acquaintance for almost forty years.
Speaker 2:The whiteboard is going up. Oh, there we go. And it's Oh, he's connected to Smick too?
Speaker 3:Yeah. Yeah. He was his his firm was called Walden International.
Speaker 2:That's
Speaker 3:right. And they were yeah. They were early in SMIC's seed investor.
Speaker 2:No way.
Speaker 3:I'm looking for more.
Speaker 2:SMIC for reference is the are they the NVIDIA of China or are they the t s I think they're the TSMC of China. And then SME is the ASML of China.
Speaker 3:Yeah. And then, there's also
Speaker 1:a semiconductor manufacturing international corporate.
Speaker 2:So they actually do the fab. They are a they're they're a fab.
Speaker 1:And it is partially state owned? Yes. Like many companies.
Speaker 2:Interesting. Okay.
Speaker 3:And then I don't know if it's AMEC or AMEC. That's like a a tool, a ching tool company for semiconductors.
Speaker 2:Yep. So more so more of a of an ASML type competitor.
Speaker 1:Yep. Yep. That should make
Speaker 2:the lithography machines that then are used in the fab to make the chips that are designed by Huawei or any other client. Interesting. I didn't realize that Mike Moritz and Lip Bu Tan go back forty years. Wow. They met when he when Tan was 25 years old.
Speaker 2:What a legend. Did you
Speaker 1:know Intel's first external investor was the meme account Arthur Yeah. Arthur Rock?
Speaker 2:It Oh, yes. It was Arthur Rock. That's right. Of
Speaker 1:course, not the current account Yeah. Arthur Rock, the The legendary Arthur Rock. The legendary Arthur Rock. Yeah. Who his firm was Arthur, just Arthur Rock and Co.
Speaker 1:Yes. And You know
Speaker 2:what the Rock stands for. Right? Rockefeller. Really? It's Rockefeller money.
Speaker 2:Wow.
Speaker 1:Yeah. I did not know that.
Speaker 2:Yeah. The Rockefeller money got passed down
Speaker 1:This goes way deeper.
Speaker 2:Goes deeper than we thought. Tinfoil hat. The Rockefellers are involved. Born in Malaysia and educated in Singapore, Tan studied MIT where he was awarded a master's degree in nuclear engineering. After moving to San Francisco, he joined the Walden Group, one of California's early venture firms.
Speaker 2:Instead of plowing the Silicon Valley furrow, he elected to head to Taiwan. Later, he made investments in China, the majority in in companies with deep technology roots. His deep understanding of both Taiwan and China in is an asset many US chief executives would like to possess when he later became CEO of Cadence, which had fallen on hard times. The Wise Acres assumed he would fail given his lack of operating experience. Instead, he transformed the business in his twelve years at the helm of the the company's revenue tripled to almost 3,000,000,000, and the stock price appreciated by over 3200%.
Speaker 2:Today, Cadence is worth close to a $100,000,000,000. Wow. That is a phenomenal performance.
Speaker 1:Yeah. Earlier And, again, he, Lip Buutan made a seed investment in SMIC in 02/2001. Wow. Exited it fully in 2021.
Speaker 2:Yeah. And and I mean, you think about, like, the the the vibe around doing business in China in 2001 was like, absolutely. Absolutely. These are these are our boys. We make shoes and Nike's there.
Speaker 2:We make iPhones there. Like, it was like completely reasonable. There was no great power competition discussion whatsoever. All that has cropped up in the last decade. And so earlier this year, Lip Bu Tan became the chief executive of Intel, a job which in Mike Morris's book amounts to public service.
Speaker 2:It is no secret that over the past twenty years, Intel has ceded its mantle as the world's most important semiconductor company to companies like NVIDIA, Broadcom, TSMC, and Samsung. Six different leaders have failed to return Intel to the glory days that it enjoyed under the late Andy Grove. It failed to capitalize on the rise of the mobile phone industry and was outgunned by NVIDIA as the supplier of silicon engines for the AI revolution. Its manufacturing prowess, a rarity among US chip companies, has been cons consigned to the shade by TSMC. Oh, Mike Moritz, what a great writer.
Speaker 2:Today, Intel isn't also ran lacking much in the way of financial firepower. The last thing Tan needs is to be distracted by a vindictive political sideshow. Now the Intel board must decide whether to march to the beat of so many other corporate leaders and capitulate to the president's artless bullying or to set an example for other companies and display some backbone. Early signs of defiance are encouraging. Let's hope that Intel's overseers abide by the refrain that old Tammy that that old Tammy Tammy Wynette song and continue to stand by their man.
Speaker 2:What a hilarious reference. Do you know that song Stand By My Man by Tammy Wynette?
Speaker 1:I do not.
Speaker 2:Famously quoted by Hillary Clinton during the Monica Lewinsky scandal where she said that she was not going to leave Bill Clinton over the scandal, but she was also not doing what Tammy Wynette said. She was not merely standing by her man, but she wound up she did stand by her man in some ways, and they did not get a divorce. But fascinating quote, fascinating article. I I I I think like he can probably riz this up. I think Tan can go to the White House, do some deal, art of the deal both ways, figure out some way one hand washes the other
Speaker 1:Quick advice.
Speaker 2:That'd be fine.
Speaker 1:For Tan? Yep. Obviously, get a cool leather jacket.
Speaker 2:Cool leather jacket. A little Dust off those golf clubs for Bring a Big Mac. For sure, pick up some McDonald's on the way. Smart. And throw in a Vacheron Historique.
Speaker 1:Maybe bring a bar of gold or or a lot even even potentially numerous bars
Speaker 2:of Definitely definitely bring the biggest chip that Intel has ever produced. Maybe just a whole wafer. Because he's probably seen Blackwell. You've seen how Blackwell is pretty big. Right?
Speaker 2:You gotta bring something even bigger and just be like, we're making the biggest and best chips in America. We're American made. I'm America all the way. We're gonna build a fab at Mar A Lago. We're gonna build it in Key West and I think he gets it done.
Speaker 2:Anyway, should we move on to linear? Linear is a purpose built tool for planning and building products. Meet the system for modern software development streamline issues, projects, and product road maps. Go to When we get the to start on the build
Speaker 1:will be giving him a live demo of linear.
Speaker 2:We should. We should.
Speaker 1:Linear will be the key to getting Intel back on track. Let's make it happen.
Speaker 2:Okay. Tyler Cowen. He's loving GPT five, and he has a post. He says, somewhat unrelated, but somewhat related, of course, the topic of AI. He says It's all related.
Speaker 2:The quote AI is causing a slowdown for new hires hypothesis has pretty much been abandoned. The trend seems to predate GPT four, and the trend seems to apply to tech jobs that have no serious AI competition. Interesting. I was digging into the hiring numbers across the world because if if if AI is causing a slowdown in new grad hires, I would have to assume that it's also causing a slowdown in India because there's so much business process BPO, business process outsourcing, and outsourced IT work, outsourced software development work that happens in India. And I dug up the unemployment data on in India, split it out by rural and urban and it doesn't seem like there's a huge spike.
Speaker 2:Maybe that's coming but we're certainly not there yet.
Speaker 1:I think Tyler's post was in response. There was a New York Times article yesterday said goodbye, a $165,000 tech jobs, student coders seek work at Chipotle. As companies like Amazon and Microsoft lay off workers and embrace AI coding tools, computer science graduates say they're struggling to land tech jobs and there's a story of Manasi Misra
Speaker 2:Mhmm.
Speaker 1:Remembers seeing tech executives on social media urging students to study computer programming. The rhetoric was if you just learn to code, work hard and get a computer science degree, can get 6 figures for your starting salary. Is now 21, recalls hearing as she grew up in San Ramon, California. Those golden industry promises help spur miss Misra to code her first website in elementary school, take advanced computing in high school, and major in computer science in college. But after a year of hunting for tech jobs and internships, Miss Mishra graduated from Purdue University in May without an offer.
Speaker 1:I just graduated with a computer science degree and the only company that has called me for an interview is Chipotle. I guess my first question is, was this for coding, coding, creating software for Chipotle? Because having a burrito tracker on par with the Domino's pizza tracker
Speaker 2:It could be good.
Speaker 1:Pretty cool.
Speaker 2:It could be very good.
Speaker 1:And again, I I think one thing that could happen is hiring managers and executives telling themselves we should be able to do more with AI. We don't need to hire for these people. Yep. Even if AI is not at the point where it truly replaces a person. It's just sort of forcing people into this mindset of like, do we actually need to hire this person?
Speaker 1:Yep. And again, we'd called out before Microsoft has laid off more people this year than they have in the past few years combined.
Speaker 2:Yep.
Speaker 1:And so, again, I think But at the same
Speaker 2:time don't know how big the hiring glut was from ZERP and COVID. Like, that could still be working its way through because companies really, really staffed up and they staffed up remotely and they staffed up young people.
Speaker 1:Yeah. We've heard a bunch of stories this year of companies that had
Speaker 2:People had eight different jobs.
Speaker 1:Remote engineers that they were kinda like, you can move back to the office or you can move on.
Speaker 2:At the same time, Raghav Mehta in the chat says, it's really bad in India. I have it on very good authority. I believe you. It's it's just not showing up on the data yet. I'm interested to to track it more deeply and actually understand what's going on at some of the big at the big IT outsourcing firms in India.
Speaker 2:Are they actually scaling down? Do we have hard data on it? And and then, yeah, what is driving it? Is it actually is it actually AI or is it something else that's going on? But regardless Same
Speaker 1:time Salesforce is saying AI is now doing everything at Salesforce and yet headcount is up.
Speaker 2:We heard the same thing from Klarna and and it was unclear if that was just like a rightsizing of the business for where they were in terms of scale. But I don't know. It's, it's interesting. AI is everywhere. It's at the same time, there's, like, a lot a lot of these tools are just, like, extra levers.
Speaker 2:And the dynamic is that, like, yes, it helps you write more code, but there was always way more code to write than your business was able to write. And so you're really just unlocking new capability and and just moving faster. Totally. Well, if
Speaker 1:you need
Speaker 2:an AI native CRM, get on Adio customer relationship magic. Adio is the AI native CRM that build scales and grows your company to the next level.
Speaker 1:You can start for free. Well, on that note, I think have Peter
Speaker 2:Play that intro.
Speaker 1:In the restream waiting room.
Speaker 2:Let's Here we go. Welcome to the stream, Peter. How are you doing? Look fantastic.
Speaker 5:I was told I should wear something, you know, not just a black suit for you guys. So there we go.
Speaker 4:Spice You
Speaker 2:look fantastic.
Speaker 1:Looking fantastic.
Speaker 2:How are you doing?
Speaker 5:I'm great. I mean, you know, the East Coast, it's been a little cooler than it was Yes. A couple of weeks ago. It's the nineties are coming back, but, not yet. So Yeah.
Speaker 5:No complaints. And, you know, I am for better actually, really for worse, not an Nvidia shareholder, so I don't have to directly deal with their 15% paid to the government.
Speaker 2:Did did the stock pop today? What actually happened with Invidia?
Speaker 1:It's it's a norm normal day. It's up like 1%. Okay. So Nothing crazy.
Speaker 2:Not a huge move.
Speaker 1:Before we dive into all the news, would love would love to just, you know, give us the highlights from the bio. You've done you've done quite a lot, but I think it'd be helpful context before we get into a discussion.
Speaker 5:Yeah. No. Look. It's it's great for to be with you guys. Thanks for having me on.
Speaker 5:I currently am a nonresident fellow with the Carnegie Endowment for International Peace, which is a think tank in DC. I also am an attorney and have a trade law practice sort of focused on trade and sanctions and export controls kinds of issues. I was in the Biden administration at the White House where I dealt with the global economics file including a bunch of the export control issues and been in private practice prior to that. I was a state department for a while and when I was much younger I was a reporter covering campaigns and elections like many many years ago.
Speaker 2:That's super cool. That's awesome. It's kind
Speaker 5:of been around.
Speaker 1:Well, So so so before we get into the NVIDIA AMD stuff and the news from yesterday, take us through kind of your experience of this year so far because there's been a lot of different stories. Go
Speaker 2:back further. Chris Miller writes Chip War. Everyone wakes up. Is that what happened? Like when when did DC wake up to to maybe we need to think more critically about the flow of semiconductors and AI technology back and forth between The US and China.
Speaker 5:You know, that's a that's a great question. I give Chris a lot of credit. I also give a couple of guys who were at Georgetown University, which has a center for science and emerging technology. And a couple of those guys, like, in 2018, 2019, started really tracking what kinds of high end chips were the Chinese buying and, like, what was going on. You know, they'd hired some Chinese language researchers and were really looking at what the Chinese were doing.
Speaker 5:And so you had these kinda scholarly researchers looking at this and saying, hey, there might be a problem here. Then you had Chris popularized it with ChipWar. And he also had back in '21, you know, that was also the time, not on the leading edge stuff, but on the the mature node stuff semiconductors when we had that semiconductor supply chain crunch. So semiconductors were very much in the the news and kind of policymakers were focused on it.
Speaker 2:This was kind of that confluence where they made cars. We couldn't make cars. Right? During COVID, we couldn't make cars?
Speaker 1:And we couldn't make Internet connected washing machines.
Speaker 2:Yeah. It was really bad for the IoT microwaves. That was particularly rough.
Speaker 5:Well, there were like three months where, you know, I was working at the White House and, you know, Ford would call me up or GM and be like, we can't get semiconductors. And then it would be my job to like phone, you know, governments in Malaysia and Thailand and being like, could you, you know, get some of these shipped to your American customers,
Speaker 4:please,
Speaker 5:you know, before the Germans and the French. So why?
Speaker 2:You know? What was what was actually driving that? Was that, like, was that, like, like, you needed because, I mean, fabs are clean rooms. Like, I imagine that you could still go into the semiconductor facility during COVID because you're not gonna spread it because you're not spreading anything. You're not spreading dirt.
Speaker 2:It's a clean room. But there's but there there was, like, this immense amount of pull forward during COVID stimulus checks, people buying more cars than they thought they were expected, but then also there were shipping delays and all sorts of backups at the port. Like, how do you think about what was actually the root cause of the initial semiconductor crunch in what was this February, 2001 or or '2 twenty twenty Twenty. 2021.
Speaker 5:2021, early twenty twenty. Yeah. I it was actually, I think, the combination you just highlighted. So you had demand going through the roof, right? Because there was this huge pull forward for everything from laptops to everyone's home, they're buying home appliances.
Speaker 5:There's huge pull forward in demand. And you didn't actually see a fall in production of the mature node chips in '21, but because of just like bad luck, there were problems in Texas or problems in Japan. Like confluence of bad luck took a little bit of capacity offline, and the capacity coming offline, which which would have been manageable kind of in an ordinary market condition combined with this massive pull forward just meant a mad scramble. And then you get into the psychology of shortages where everybody starts hoarding, right? Because people are sort of like, well, if I'm not gonna be able to get them, I better hoard.
Speaker 5:So it's sort of like the semiconductor version of that toilet paper shortage. You know, we'd had a few months prior where it's
Speaker 2:like, you
Speaker 5:know, everyone's hoarding everything Please. Get their hands on.
Speaker 2:Gotta start hoarding a g wagons and Ford Raptors. Anything with a semiconductor in it, give it to me. I need it. People are certainly doing it for PS fives too. I mean, I remember even video games like all all different sectors people were were pulling.
Speaker 2:And they were paying like what $50,000 over sticker for like, a new Hummer EV and stuff. Like, it was getting crazy
Speaker 1:out there.
Speaker 2:Wild times. So, yeah, please continue.
Speaker 5:Yeah. So that was where we were on the on the on the shortage. Mhmm.
Speaker 4:But looking back, I mean
Speaker 5:so if I that that us the shortage, Chris Miller's book, some scholarly research, and just kinda heating up competition with China. Yeah. You know, in sort of late twenty one into '22 got the then Biden administration, but also folks on congress. It wasn't just sort of a Democrat Biden thing. Folks in congress, focused on the strategic competition part of this.
Speaker 5:And what is China? Where are they going with AI? What are the choke points we might have to slow their development of AI? And that really gave rise in October 2022 to the first big US semiconductor export controls where the commerce department essentially cut off most of the highest end semiconductor sales to China as well as various manufacturing equipment and inputs to try to limit China's ability to develop indigenous production capabilities. And then that that initial export control regime from October 22 got expanded a couple of times.
Speaker 5:Most recently in April when the Trump administration paused sales of the h 20 chips, the Nvidia h 20 chips to China.
Speaker 2:What was driving the initial chip bands? Was it more we I we have identified that large language models, these huge training runs are important. And once you marshal the big data center, the the the 100 gigawatt data center, you're good and you have a cutting edge model. Or is it more, like, look, if we send a certain amount of equipment, it will be reverse engineered and copied, then they will be able to catch up on the actual supply chain side. And and we'll see not just competition from purchasing from NVIDIA, TSMC, and ASML, but we'll actually see Huawei, SMIC, and SME act as a alternative supply chain that will be an entirely internal economy that will keep them on the frontier potentially forever.
Speaker 5:Yeah. So it was, in the first instance, an effort to limit compute to China. So there was really a pretty systematic okay. If we're in this era of strategic competition with China, and if we think AI is gonna be an absolutely, transformative technology, you know, something with just a whole range of national security, economic impacts, you know, day to day life impacts, how do we slow down China's development? And you start thinking about, well, you know, they got a bunch of good engineering talent over there.
Speaker 5:It's not like you can prevent them from having talented engineers. Right? That's just sort of life. You know, the the model side of this, controlling the models is very very hard. Because you know, it's software, it's code, a lot of some of the models are open source, just very hard to control.
Speaker 5:But what you could do mechanically is control their access, China's access to compute. Because their chips just are three to five years behind ours. Yeah. And so if you choke off the chips, you slow them down by limiting their access to compute for training. So it's just kind of how do you trip them?
Speaker 5:This is the choke point, let's squeeze on the choke point. Mhmm. And then, you know, they iterate, right? They start developing lower compute models. Like you see this kind of back and forth, but that's what happens with export controls generally.
Speaker 5:Like Yep. You know, your adversary is gonna adapt, you're gonna have to adapt, and and that's kinda what we've seen play out.
Speaker 1:And how much were you tracking the GPU black market? You know, in in Mhmm. Once you had export controls, there's certain countries start popping up saying, well, we'd actually like $5,000,000,000 of whatever GPUs you got. And don't worry about what we're gonna use them for, we'll figure it out, but not your problem.
Speaker 5:Yeah. So that's a known problem you're gonna get into. Right? And you've seen that in other instances of export controls and sanctions. And so, you know, commerce department does have a a unit that, you know, is supposed to be looking at the trade flows.
Speaker 5:Where is that where is that happening? Where are you seeing that? You know, I I I it is a bit of a game of whack a ball. It's clear there has been a certain amount of diversion of prohibited chips going to China. I also think, you know, just if you look at kind of what Nvidia talks about the sales potential, clearly, the export controls have reduced China's ability to get to the chips so that they haven't taken it to zero.
Speaker 5:Mhmm.
Speaker 2:How do you think about the evolution of the US government's thinking on how critical or like the the role AI plays in near peer competition? Because there's kind of two frames of mind that I see in Silicon Valley. One is AI is super intelligent god. It's nuclear weapons. It's it's one button you push, and the AI goes off and just wins the battle for you.
Speaker 2:So it's it's critical to have it, and it's critical to keep it out of the hands of your opponent. The other is that AI is more like Microsoft Excel and it's certainly useful in the military context. You wanna know how
Speaker 1:many It's electricity.
Speaker 2:Yeah. Yeah. You you wanna know how many, you know, shells you have in in inventory. You wanna know how many how many soldiers are in this particular part of the battlefield and you wanna be able to track things. But it it it might be advantageous to keep a technology like Microsoft Excel out of your opponent's hands, but it by itself will not win a battle decisively.
Speaker 2:And it feels like long ago, pre ChatGPT, pre kind of AI boom, people were definitely seeing artificial intelligences. Well, yeah, we use it to serve ads, and it it it helps with spell check, and it's in TikTok, and and it recommends, you know, what video you watch next. And and then it became, okay, it's super intelligent, God, and it's nuclear weapons. But now we're kind of maybe in an era where we're we're moving back to it's more of an incremental technology. But I'm wondering how that thinking evolved in DC.
Speaker 5:So so I think the evolution in that debate is an important part of understanding why the Biden administration took a pretty tough line on export controls. Cause I would say many of the relevant policy makers in the Biden administration were actually quite bullish on AI. You know, did buy into the thesis that, you know, I'm not, you know, whether it's 2027 or 2029 or 02/1930, know, we could debate the years. Yeah. But they bought into the thesis that in a fairly near period of time, you are going to see AGI kind of reach that escape velocity That's take where it's iterating on itself.
Speaker 5:Sure. Sorry, where you're see AI Yeah. Reaching that escape velocity where it's iterating on itself, reaching AGI sometime in not too many years. And if you believe that, if you think in a couple of years we're gonna see that, you know, escape velocity to AGI, then you really wanna slow the Chinese down as much as possible. Right?
Speaker 5:Because you think this is gonna be this enormously transformational technology and you know, two years or even eighteen months or you know, maybe even twelve months of lead is worth an enormous amount from a policy So it was actually because of a very bullish view on the future of AI
Speaker 2:Yeah.
Speaker 5:That you saw the Biden administration really take kind of a pretty tough stance on slowing down China.
Speaker 1:And so and so reading into that, does that mean that you that the admin might not not if if they're willing to say, yeah, we'll,
Speaker 2:will
Speaker 1:sell H20. Don't believe in a fast takeoff scenario. This is electricity. It's valuable, but it's gonna be vended in everywhere. Because if you'd still believe in a fast takeoff scenario, you would say, it's not worth the incremental.
Speaker 1:Sure, NVIDIA, you know, shareholders are going to suffer a little bit if you can't export to China, but it's not worth the however many billions of incremental revenue that the government's gonna generate on a 15% take rate?
Speaker 5:Yeah. So I think the Trump administration is probably doing a couple of things here. I mean, first, there are lots of different views in the Trump administration. That's no news to everybody. You see some folks who, I think obviously would prefer the Trump administration take a harder line on export controls.
Speaker 5:You also see, you know, some folks, who, you know, basically have a view of, well, we shouldn't sell China our most advanced chip. The h twenties are now a couple of years old. This is not really, most advanced. You might as well, get the NVIDIA revenue and the US government take here. So I think you have diverse views in the Trump administration.
Speaker 5:I think it's less guided by a, you know, sort of slower view of the uptake and more my view. The Trump administration is looking at this as, like, this is not state of the art. And then also Trump is a dealmaker. Like, it it's hard to see any other, politician, Republican or Democrat, coming up with this. But, know, Trump himself, he's always talked about getting, you know, a cut of the deal.
Speaker 5:Like, so it's it's in a way, is a, you know, sweet, generous, unique to Donald Trump concept that I'm gonna let you do this, but by the way, we get 15%.
Speaker 1:Well, and he said this morning that he he would potentially consider exporting Blackwell's, but at a higher rate. Yeah.
Speaker 5:Now that, I mean this is, you know, it's interesting. Like the h twenties I do think are kinda debatable. I mean I am in favor of controlling the h twenties, but I see the arguments on both sides. It is a dated chip now, know, I'm not date but you know, it's not a cutting edge chip. It is very hard for me to see how charging a percentage, you know, rev share addresses any national security concern.
Speaker 5:Right? I mean, like, if you have some national security concern, the rev share doesn't address it. Maybe, you know, forcing a downgrade of the chip or trying to limit who it gets sold to, which is very hard. Like, rev share definitely doesn't address whatever your national security concern is.
Speaker 2:Is there is there any possible steel man for that? You take the 15% revenue share and you pour that into some sort of national security AI defense fund that that protects you from the super intelligence. I don't know. It's very very hard to
Speaker 5:I
Speaker 1:logic buy of like, I'm gonna make I'm fine to export the h 20 because Jensen's convinced me that it's okay. But I still want my cut is kind of is
Speaker 5:That's how I read it. Like, that's kinda how I read it. Like Jensen convinced him, you know, it's an old enough chip. We have enough of a lead. Like, you might as well export it.
Speaker 5:And then, here's the guy who made his living in New York real estate. Like, you know, you want your commission. Right? I mean, that's just I I think that's kinda what's going on.
Speaker 1:When you when you saw this, I I maybe you had a a a feeling that this was coming down the pipeline. But did you had posted on LinkedIn, I think it was earlier today, trying to look for some type of precedent for USG rev share on and didn't sound like you found one?
Speaker 5:Yeah. I can't find any precedent for anything like this. You know, there have been some instances. For example, if you are some of our defense contractors, you know, the Boeings of the world, if they wanna export fighter aircraft, they have to pay like a couple thousand dollar fee for the government to review the license. Like, it's just clearly just sort of a fee to cover the staff time
Speaker 4:of Mhmm.
Speaker 5:Like reviewing the license. But it is literally a couple thousand dollars. It's not, you know, rev share of a multi billion dollar market here. There's no precedent for anything like this.
Speaker 1:And and what are you hoping
Speaker 2:I'm thinking about where it goes like
Speaker 1:Yes.
Speaker 2:Are we gonna be selling f 30 fives?
Speaker 5:I mean, this is like it opens up a whole kinda, you know, what are we gonna sell next on our rev share model?
Speaker 2:That is kinda crazy. Let's get some submarines over there. Hey. We got capacity. Let's make some let's make a bunch of submarines.
Speaker 1:Yeah. And then and then the concern is you you highlighted, you said the rev share creates perverse budgetary incentives for US agencies to issue licenses that undermine national security because they want the cash. It also sets a precedent that The US might try to generally tax exports something the USG has long avoided for legal reasons and because we have historically wanted to promote exports.
Speaker 5:Yeah. So so I do think this this does create a perverse incentive. I mean, you know, in in theory, the reason you control these things is because you think there's a real national security risk. And to your point, I think in some sense Trump Jensen convinced Trump, like, there's not really a national security risk here. But think about this going forward.
Speaker 5:You've created this really perverse incentive where, you know, company wants to export something to China or maybe Russia, like who knows who's next on this, that poses a national security risk. But hey, if you don't, you know, if you if you authorize the export, like, you know, you get 15% and you can use that to pay for whatever domestic programs you want. I just think it creates a really weird incentive for a person
Speaker 1:It's a conflict.
Speaker 5:Commerce department whose job is to consider the national security impacts of this.
Speaker 2:Is there is there a, like, an optimistic scenario where, like, American industry or Western industry is strengthened by this move? And I'm I'm trying to walk through it. So we we've talked to a couple people who work in the solar industry, and they've said that China is incredibly dominant in solar, and they flood the market with very cheap solar panels. And that's effectively kept American solar panel producers out of the game. And so America doesn't really have a strong solar panel production industry.
Speaker 2:And so maybe the bull case here for American dominance in AI is something like you get so many NVIDIA chips over there that Huawei, SMIC, and SME can't really stay in the game. They can't really be competitive. They fall behind even more. And then, and then if if AI plays out in in such a way that you don't just need one massive data center, you need to be constantly upgrading your data center. You need to constantly be buying more and more NVIDIA GPUs that if you don't have that flow, if that flow can be turned off, then you are always vulnerable.
Speaker 5:So so I actually think the policy question of whether to sell b h 20 to China is a hard one for exactly, the reason you lay out, which is that there is a there is an argument, and I think Jensen makes it in good faith as well as for his own commercial interests, of we want China dependent on our chips. And if they're not dependent on our chips, they're just gonna be building you know, SMIC and and and Huawei chips, and that's gonna ultimately Yeah.
Speaker 1:More inclined to Right. More inclined to Yeah. Take
Speaker 5:Right. Here's the question I got back to. Like, charging an extra 15% on the American chips doesn't actually advance that dependence argument. Right? It just creates a cost differential that makes the American chips more expensive relative to the Chinese chips.
Speaker 5:Presumably, if you really wanted to keep them dependent on American chips, you'd, you know, wanna sell them as cheaply as the market would bear. So like the 15% even in the like bull scenario, and I agree, I think it's an important debate of the the the bull scenario you laid out. But 15% still doesn't make any sense.
Speaker 1:Yeah. And you look at other other categories like smartphones or electric vehicles. There's there's no precedent for China saying, we'll we'll buy your versions of these products and we'll even manufacture them for you. But don't worry, we're we're not gonna develop our own. Yeah.
Speaker 2:You know, you look
Speaker 1:at this. Like, of course, they they they they clearly care about having local industrial capacity and even end products and brands.
Speaker 2:And and why and that those are the categories that
Speaker 1:aren't around that Yeah. Don't have nearly as much national national security.
Speaker 2:And if you talk to, like, the, you know, the the CEO of GoPro when they were trying to compete with DJI and drones, He's not he's not gonna tell you a story about DJI getting, attacks on exports. He's gonna talk about, well, DJI was subsidized and had and had and had government backed loans and had extra money poured in from the government that allowed them to flood the American market with drones. And now we don't have a really strong drone industry here. And so, yeah, the the like, we're kind of like, there's two different arguments. There is some incongruity there.
Speaker 2:Like, they they both can't be true.
Speaker 1:Yeah. The steel the steel man is is we were gonna allow this. Yeah. So why not get a uncle Sam, a few Billy out of the deal? But the concern is that it would set a precedent that that could be, you know, destructive.
Speaker 2:So now we really gotta talk Jensen's book and say, we should be subsidizing exports of Right. Companies to China. We should be America should be paying an extra 15% for every GvUE sent to China to really screw them over on this domestic supply chain side. This is this is seven dimension dimensional chess in geopolitical chip negotiations. We've we've solved it.
Speaker 2:We've Exactly. There you go.
Speaker 1:What else what else is top of mind for you right now?
Speaker 2:Yeah. What yeah. What's on the horizon for the rest of the year? How do you see things breaking?
Speaker 5:Yeah. I mean, so you got the the this is a big development. We'll have to see, like, is this a precedent? Does this become a precedent for, you know, HBM and other parts of the semiconductor ecosystem? Like, we'll have to we'll have to see.
Speaker 5:The other one that obviously those of us here watching, not on the export side, but on the import side, Trump has said and Commerce Secretary Lutnick has said their tariff regime for imports of semiconductors is gonna hit fairly soon. Mhmm. Obviously, we saw Tim Cook get a deal or announcement out of the White House last week where if, you know, companies are promising they're investing in America, they won't pay the tariffs. And we'll have see to how that all plays out actually in practice. But like how these potential semiconductor tariffs again on the import side, plus whatever this exemption for companies that are investing here, how that actually works in practice is gonna impact US semiconductor companies, companies that use a bunch of semiconductors.
Speaker 5:It's gonna be a big noticeable economic, issue for the industry, over the next couple of months and certainly into next year.
Speaker 2:Well, we'll have to have you back on if some big news breaks. I'd love to. We really appreciate you taking the time.
Speaker 1:Yeah. That's great. Super excited.
Speaker 5:For having me on.
Speaker 2:For hopping on. We'll talk to you soon. Alright. Cheers.
Speaker 1:Bye. Take care.
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Speaker 2:Six hours and ten minutes left. I'm back in the game. That's fake news. I think I got more than hours and ten minutes but I think I was just I think I think my son stole a little bit of it. Although I do wake him at 05:20 so that I think that is correct.
Speaker 2:I don't know. Well, a kid
Speaker 1:jumps in the bed it
Speaker 2:it It kind of throws us
Speaker 1:little bit. We gotta get
Speaker 2:When when
Speaker 1:a when prenatalist When
Speaker 2:he when my son first jumped in the bed, we I was just configuring the app and I was like, yeah, there's like a left side for me and wife's side, right left side for the wife. And he was like, and the center for me. Was like, sorry, bro. Don't make this like Get the we'll get the tag team to make
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Speaker 1:post here from Niraj.
Speaker 2:Mark safe from one shotting.
Speaker 1:So on the left, me and Grok are going to get married. Mid curve, it's great for adjusting recipes. And then the high I have uncovered secrets of the universe, God speaks through me. So there were some quotes that were popping up
Speaker 5:Yeah.
Speaker 1:Last week over the weekend. Some very bright technologists discovering the boundaries of what is known in many different domains. Yep.
Speaker 2:My current take on the AI psychosis thing is that it is a tool that amplifies who you are. And so if you're just like a naturally if you're just like a curious person who likes being productive, like it's gonna make you more curious and more productive and just kinda answer questions for you. If you're like, you know, deeply falling in love with random stuff and developing crazy parasocial relationships, like, that's probably a vector of risk for you. And the same thing with, you know, if you have delusions of grandeur, like, get ready. Because, like, it's gonna amplify that.
Speaker 2:And I and I think that's John,
Speaker 1:the you don't just have delusions of grandeur. You really are on another level. Yes. You really are brilliant.
Speaker 2:I'm grand. Really are grand. I'm grandeur. Well, our next guest has grandeur. Aaron Ginn, welcome to stream.
Speaker 2:How you doing? Lovely hat. Let's go. Let's hit the gong for a For Aaron.
Speaker 4:Hat appearance.
Speaker 2:Boom. Didn't even warm it up today. Take that.
Speaker 5:I really appreciate
Speaker 4:it as well. Culturally.
Speaker 2:What's sales guys from from from BDRs all over the world.
Speaker 4:Yeah.
Speaker 2:What's new in your world? Age twenties. Good? Are you happy? Are you pumped?
Speaker 4:Oh, my my happy.
Speaker 2:They're happy.
Speaker 4:The yeah. They they they show final hawks. They have a luxury belief system around that Chinese AGI is gonna destroy us like a crouching tiger hidden bag, you know, dragon version of OpenAI is gonna attack America like we're done and and that this 15% deal which, like, broke Sunday, I don't know how it broke
Speaker 1:Yeah.
Speaker 4:I was just amazing. It was just, like, I mean, one, like, props to props to president Trump who is the ultimate deal man.
Speaker 2:Art of the deal.
Speaker 1:It felt like both four d chess and art of the deal. We moved into one.
Speaker 4:Yeah. And and so, you know, like the the the sort of average profit margin of the h 20 is around probably like high fifties percent. So, you know, they're still and they also have the write off they're probably gonna roll in as well. And and there's some struggles with PSMC, like you can't just know, I think it's one of the issues related to the Intel foundries. Like you can't just restart production within a month.
Speaker 4:It takes several months. Like Yeah. Probably you're just gonna try to find someone's nondestroyed and probably send them to China, the age twenties. But what most Americans don't understand is that it's unconstitutional to export the tax exports. Yeah.
Speaker 4:So it's, like, in the constitution.
Speaker 2:I looked it up, and I was like, how is this gonna happen? Because the Yeah.
Speaker 1:Cost So it you're saying a revenue share is, like, a workaround?
Speaker 4:Yeah. So it's voluntary. Like, that's the only way it could happen It's tipping. Simply voluntary.
Speaker 2:Tipping. No tax on tips. Because the because the taxes are tips now.
Speaker 4:Because like even from a process perspective, like, Nvidia doesn't apply for export licenses like the OEM does. Okay. And when you apply for those OEMs, there's no license fee because that violates the constitution. Yep. So you just get it and you can ship it, but the bomb is listed.
Speaker 4:The bomb is
Speaker 2:Wait. Wait. Wait. Really quickly. Who's the OEM in this scenario?
Speaker 4:TSM. Oh, Super Micro, Dell, Elanova. Yeah. Yeah. Yeah.
Speaker 4:Similar.
Speaker 2:So so someone in China will go and say, I want a rack of servers with h twenties already on them, some other CPU, some other memory, some other hard drives on there. Bring those bring those blades to me, and they will call Dell or Super Micro for that.
Speaker 4:Yep. And so that too applies for VIS. Okay. And so they're the ones that that final PO number
Speaker 2:Mhmm.
Speaker 4:Is all that crap together. It's not NVIDIA. It's not NVIDIA. You don't know NVIDIA's pricing. You don't know, Dell does because I buy it from NVIDIA.
Speaker 2:Yep.
Speaker 4:So that's why it has to be something voluntary. You can go to the website now. Like, Jordy, if you're interested in donating to the Goliath, you know, the Levathon, you can go to treasury.gov and you can find a little
Speaker 1:You can Venmo.
Speaker 4:We accept PayPal. Right?
Speaker 5:We pay
Speaker 2:the regular.
Speaker 4:Yeah. So so it's it's quite brilliant. I mean, think many of the faux Neo China hawks are devastated. I mean, my my op ed last week yeah. It's just they're just sabuco.
Speaker 4:They're just like, you know, they're there. They're gonna be on the Jefferson Memorial just like, you know, going at it and be because it's a decision.
Speaker 2:Soundboard today.
Speaker 4:Yeah. It's a it's a decision by the administration to be like, you know, we don't really care. Like like, we wanna do deals. Yeah. We want the American worker to have you know, get money from China.
Speaker 4:We wanna we wanna do what's China did to us over the last twenty years.
Speaker 2:Okay. We wanna take
Speaker 4:money and and
Speaker 2:Dig into the foe China hawks, the foe hawks, as we say. Explain, like, the stated preferences, revealed preferences. Are they really doom pilled? Do they really believe in fast takeoff? Do they really believe, that AI is a nuclear weapon?
Speaker 2:Or is there something else going on, some other economic consideration that they're working through?
Speaker 4:I think and I'm working on the software right now for a very liberal newspaper, but they I think it's a Dego Sex Machina Mhmm. Sort of fallacy they built in their brains, where they think AI is gonna be God Mhmm. And America has to build the first God or China China has to build the first God. And so it's a kind of tower babble moment. And and the problem is, like, if you remove that from their boat that's why call them boat neo China hawks.
Speaker 4:Like, they're not really China hawks. They're actually AGI zealots. If you remove it, none of their policies kinda make any sense. Because that's one of reason why you hear, oh, like, have to prevent chips. Oh, wait, the block models.
Speaker 4:Oh, like, you know, we have to restrict, you know, model ways. We have to do tokens. Like, they they it's just kind of like a Morpheus blob, but they can't really win in DC with the idea that AI is gonna be god. Most people are gonna be like, that's kind of insane. Like, you're go back to to reading, you know, the go back to watching Matrix or, you know, reading Terminator or some some other related sci fi novel.
Speaker 4:And and so they kind of wrap it in something that is, like, super easy to understand. China. Oh, China. Right? You know, oh, the the yellow country.
Speaker 4:Right? And and they and it's, oh, this is scary. Right? But but you look at the specific policies, none of it, like, makes any sense. Really?
Speaker 4:None of it's cogent together.
Speaker 1:I met with a venture capitalist last week who said, honestly, none of this stuff's gonna matter in two years when we have a fast takeoff.
Speaker 2:But he wasn't he wasn't doomer pilled. He was just saying like fast takeoff will mean that every single company goes to zero. Mhmm. Because there will only be one company which is a very funny take But it
Speaker 1:has invested in SaaS this year.
Speaker 2:And yeah. And it's yeah. So the revealed preferences is all over But the yeah. It is it is weird to to feel to make the argument like we're gonna develop AGI God, but it won't like, it it it will be it will be God, but it won't be subservient to actual God, but also or or it will sit below the stack of it'll it'll it'll respect the federal government of The United States. Yeah.
Speaker 2:It'll be God, but it won't Yeah. But it won't but it won't but it'll do what the president says, or it'll do what the house and senate say, or it'll do what one company says or what one person says. It's like, if it's God, can it be controlled? How does that make any sense? That seems very odd.
Speaker 4:It yeah. It's a and and and as I said, you and I talked about, John, it's like like, so much is built into of their presuppositions are defined by the title two debate. Remember that whole thing of like, oh, free speech is gonna die. We have to regulate and all that stuff. Many of that same donor class, many of those same policy people are also the AGI Doom or Zelda people.
Speaker 2:Sure.
Speaker 4:You go back even like a like, theories a step further, like, many of those people were super hot on new atheism and like and, like, oh, this idea of, like, we can we can prove via science. We just need more time. We just need more scientists. We just need more it's the same pattern in humanity that we create these kind of albatrosses, this idea of, like, creating an an all in or sort of argument that because they don't have that in their life and then they make this thing. And and and as I said like on on one of I think another time as I appeared
Speaker 2:Yeah.
Speaker 4:That if you don't have that metaphysical framework that is traditionally Judeo Christian or Western, you try to fill something else in that void. It's a classic Charles Spurgeon quote that that you you basically fill it with something else outside of just the fact of what the place of, like, god or faith is supposed to fill. And technology, I would say Silicon Valley probably in San Francisco, they don't really understand that there's so much faith goes into actual the VC industry. That is you're really kind of selling BS to an investor, you know, like the I know y'all have lots of jokes around what is ARR in AI. It's merely just selling kind of like nonsense.
Speaker 4:And it's the idea that like this could be something. This could be it it is a it is a faith driven investment. That's what also makes it so awesome why we Yeah. Why we look at Zuckerberg, we look at Elon, who he made an idea and the vision, the future reality today. Mhmm.
Speaker 4:So it is heavily oriented towards a metaphysical, theological framework. But this AGI thing as it relates to China, so much of it has just gotten lost in this I don't even know what I'm talking about anymore because the the same people who are criticizing the 15% tip to the to the federal government, to the American worker, for video are the same people who didn't wanna ship GPUs to Switzerland because, I don't know, they make two good watches in Portugal. They have too many good sandy beaches. Like, they they the same people. Right?
Speaker 4:So it just keeps shifting because it's really trying to provide a luxury leap to a base around the idea of AGI.
Speaker 1:Your line though? Because I think the the the critique here that's pretty fair is that if you start applying this to other categories of goods Mhmm. Like fighter jets, like what what what's what would the, you know, fair price be to export an f 35 to somebody that, maybe they're on the on the edge. Maybe they're kind of friendly now, but maybe in the future they they they might not be so friendly. Like, you believe there should be we should draw kind of a a line and we shouldn't want government agencies to kind of apply this Mhmm.
Speaker 1:Approach to fundraise?
Speaker 4:No. It's it's a difference between it's not a hunk of metal versus like you're selling a system. I have the same sort of concern as it relates to NVIDIA as it relates to Apple building phones in China. If I got an iPhone, no OS on it, none of the the magical, know, more and more transparency via, you know, the the design, then I then it's kind of useless. It's just like a phone.
Speaker 4:Right? And and that's the way NVIDIA actually is. NVIDIA is an Apple like ecosystem. It's not just a hunk of mental. Same with the reason, you know, we we sell seven eighty sevens.
Speaker 4:We sell triple sevens. We'll we sell the triple seven x Mhmm. To China. Why? Because it's made up of this complex thousands of companies.
Speaker 4:It's a software platform. We we remove certain things, which I'm generally okay with, like advanced avionics. We remove we we also kind of limit certain types of engine design. I'm fine with that. So with the p 30, h 20, these kind of nerf chips, I I don't actually make much of opinion about it.
Speaker 4:Like, I don't have to have a no true Scotsman sort of argument about, like, well, at what point would you not do it? I'm like, I don't sell fighter jets. I don't rent fighter jets, you can talk to Lockheed about that or Boeing about that. And, like, what what what I think is most relevant is the fact of these innate externalities, these exogenous factors outside of the machine, which that half of all AI engineers are Chinese. Half are actually, more.
Speaker 4:75%. Half of them are Chinese nationals. The if you include all the Chinese, associated last names in Meta's super team are Asian. So, like, we either have to lean into our strengths, which is the fact we're good at making platforms, we're good at dominance, good at free enterprise. We're good at trade.
Speaker 4:And and the fact that Chinese have something that they don't have the raw production capability of doing, which is not NVIDIA. That it I don't take anyone seriously who criticizes export controls. If they associate SNC with NVIDIA, it's like saying Kirkland like Kirkland and Costco, like, Costco makes Kirkland. Like, that's not what Kirkland is. Right?
Speaker 4:Like, Kirkland is a rebrand of somebody else's stuff. That's kinda like the criticism. It's like, oh, like, how dare Costco make this Kirkland thing? Or like, it's a rebrand, bro. Like, it's not it's not don't actually make this thing.
Speaker 4:Like, it and so that that's where this constant confusion lies that many of these people criticize this stuff or actually criticizing SMIC or or TSMC. Completely different companies, Jensen buys from them. So if you wanna go after the foundry stuff, ASML, the Japanese, like, you have to realize, one, we don't make this technology. It's it's Japanese and Dutch. But the other, it's like it's not what NVIDIA does.
Speaker 4:If if you wanna like, I'm cool with targeting a lithography equipment, preventing them from getting a five nanometer. Yeah. And that's that is something that's actually quite reasonable because because we do export control triple sevens and etcetera. Like, we have some limitations where we send. That's fine because it's a freaking size of a house and it costs $200,000,000.
Speaker 4:It's the same of the lithography. So much of what I what I'm asking for is pragmatism. It's like realism. Like like, we have to lean into what our strengths are. We have to proliferate and prevent Huawei from spreading its wings outside.
Speaker 4:And if we wanna target the ability to manufacture five nanometer, two nanometer, three nanometer, whatever, like, most NVIDIA stuffs on a four nanometer process, that's cool. Like, I'm totally in favor of that. But don't attack NVIDIA because that's not what NVIDIA does.
Speaker 2:Mhmm. Oh.
Speaker 1:Yeah. Makes sense. What do
Speaker 2:you think?
Speaker 1:On the foundry side
Speaker 4:Sure.
Speaker 1:I wanna jump over there. Let's let's talk Intel. There's been a lot of headlines recently. What's your read on the situation? How important is Intel in your view?
Speaker 1:Do they need a new board? Do they need a new CEO? Don't
Speaker 2:wanna Yeah.
Speaker 1:The I'm gonna I'm gonna get them in the hot water here.
Speaker 4:Yeah. It's you know, so like, my dad's Chinese and and so they're they're I am a I'm a true China hog. I'm an OG China hog. And and there's many times where, like, China's the largest country in the world, and there's many overlaps that are just completely not you know, they're they're just fine. And and I don't know anything about the particular criticisms of the Intel CEO.
Speaker 4:I think his strategy is not great for Intel, so, like, I'd mostly would target there. But America needs a foundry program, and particularly Trailing Edge. Leading edge, I don't think is economically viable. So that's why I'd rather ship that to, like, Brazil or Argentina or something like that. Like, do a Newman Road doctor and sort of thing.
Speaker 2:We went for Why is that? I feel like the leading edge is coming into Arizona through TSMC. Samsung's doing stuff. Like, I feel
Speaker 1:like Oh, Yeah.
Speaker 4:You're trailing south and then leading edge here.
Speaker 2:Oh, okay. Yeah. Yeah. Yeah.
Speaker 4:Yeah. So so so trailing
Speaker 2:edge also economically. Yeah. Yeah. Import. We can import the the semiconductor, you know, geniuses that will run American TSMC.
Speaker 4:Yeah. And and you also have to understand that, like, there's lots of reports. You can go read about it. Former, you know, Chinese nationals that work at TSMC that takes us back. Like, it's a it's a Taiwanese company.
Speaker 4:Like, there there's there's an there's an arm that we can extend as a nation that can only go so far, and that's part of the America First concept of Trump. He's like, do I really wanna take all of the juice and squeeze in terms of negotiating president Xi over a nerve to age 20? He's like, no. Like like, we have fentanyl issues. We have 300,000,000,000, $400,000,000,000 trade issues.
Speaker 4:We have the IP issues. Right? We have Chinese nationals at labs all across the different like, those are much bigger things to pry than the fact of, like, oh, they get, like, you know, basically an equivalent of an a 100 Mhmm. Being deployed into to to their to their fabric. So the so the Intel stuff, I I kinda have this disposition that it feels like it's gonna be nationalized.
Speaker 4:I get kinda, like, vibes around that. As a as a as a economic conservative, I'm like, oh, that's kinda scary. But at the same time, like, it it it is one of those things that just kind of happens. Like, the the did y'all hear about the the federal government invested into a rare earth minerals project in America? Then there's
Speaker 1:a one The one in Vegas. Right? Mhmm. They got like 15% for the for Yeah. The SAM?
Speaker 4:Yeah. And so so I think the same thing is gonna happen with with Intel. It's like, they basically it's it's it's occurred through there's a couple different lending vehicles in the federal government. It's basically gets a warrant. That's kind of the vibes I'm getting from Intel.
Speaker 4:Say something like that's gonna happen because you also can't take TSMC processes and Intel processes and just mix them together. Like, that that's not the way that this works. And also, TSMC, I think whenever they originally pitched that idea, I think the president was like, yeah. I'd like to do this intel thing, TSMC was like, maybe. Right?
Speaker 4:And then they go look at them and they're like, holy. This is a freaking nightmare of people who don't wanna work, who don't have the work ethic of TSMC, and and that just kind of all blew up. And I think there's some embarrassment in terms of, like, that this is America's founding program, and this is kind of, like, how it matches up to the best of the world. So I just get kind of vibes that it's gonna be nationalized or split apart and divided as a company. And But in terms of bearing on, like, my opinion about whether or not that guy should be the CEO or not, I would point more towards the strategy rather than these kind of rumors or We Doug
Speaker 1:from Semi Analysis on Friday, and he he basically said like, look at the board. Like a lot of the people that are still on the board have just like overseen like numerous CEO changes. The strategy has clearly not been working. Yeah. Like, you know,
Speaker 2:it's Well, they're not really semiconductor experts was his main guys. Finance guys, but also politicians and and thinkers. Like, it's a it's a wide variety, without a lot of focus on, like, manufacturing expertise.
Speaker 1:Yeah. What was your what was your reaction to GPT five?
Speaker 4:Not as negative as John. I I
Speaker 5:How was that negative?
Speaker 4:Yeah. You're like, oh, like, it's over. I was like, no, I don't think so. Like, see So so first of all, first of all, so and I I don't know.
Speaker 2:I think it's like pure pure number based GBT revisions being indicative of of order of magnitude scaling is over. Yeah. So so The pre training scaling law is over.
Speaker 4:I I so one, it's like a couple months ago we didn't say that because Grok four came out. So like so it it it's so I I would like maybe take a more like a prudence perspective on this. Yeah. One is that there's a clear decision here by Sam that he is a consumer app company.
Speaker 2:Exactly.
Speaker 4:Which is which is which is the right bet. Yep. It's like don't I'm very technical. Consumer SaaS. Yeah.
Speaker 4:I'm not I'm technical. I don't remember what all the freaking numbers and crap does.
Speaker 2:Doesn't matter.
Speaker 4:And so that's the biggest innovation here. And if you look at the the idea like, you know, he he expanded the context window, but not very much Yep. Which implies inference. Right? That that he doesn't have enough capacity to run as many user requests.
Speaker 4:The the other is that he mostly saw for downside scenarios and ease of use in the UX. Yep. And those are, like, really big changes. The the the benchmark maxers are, basically creating goalposts that are artificial. And that if do y'all do you do y'all remember your SAT scores or your ACT scores?
Speaker 4:Do you remember or do you remember Yotany or calculus, like, you know, high school calculus? Know, like, I don't know. It's like it these are all abstractions and metaphors that we create as heuristics to understand something's intelligent. But many times, as you know in real life, we don't grade people really by that.
Speaker 1:What have you done?
Speaker 2:That's a
Speaker 4:good Yeah.
Speaker 1:What can you do?
Speaker 4:Product. Consumers ask. Yeah.
Speaker 1:Takeaway Thursday my was product now and and and and the value you can deliver to consumers
Speaker 2:Mhmm.
Speaker 1:Is the only thing that people should really care about in the short term. And it and OpenAI is in an amazing position here. Anthropic is in an amazing position here. They have, you know, Anthropic's got an amazing enterprise business. OpenAI can sell a lot of subscriptions to a lot of people in The US Mhmm.
Speaker 1:And all over the world. And the real people that were in trouble seeing GPT five were the people that were, you know, still kind of fundraising against this idea of machine god.
Speaker 4:Yes. Yeah. Yeah. Yeah. Yeah.
Speaker 4:Deus ex machina is dead. Like, I I I I'm thankful for that. I'm a Christian. Like, you know, if people remember Tower of Babel, it's like a it's a it's a it's a both a story to take lessons from, but I believe really happened. And the the the point is that that humans naturally are drawn in every moment of this cycle, which is why that interesting quote I don't if it's true to him, but probably somebody else actually said it that we overestimate in the short term, we underestimate in the long term.
Speaker 4:I think the god complex is that. And and now, if I go into the also the other kind of more tactical point is that many of these things that happen where people are using Tactical VGA five, you go to Grok four, it solves it just fine. So so it it was just funny that people are like, oh my god, they can't do blueberries. You feel like, you know, I literally took that, did it in Grok and then danced with it just fine. Mhmm.
Speaker 4:So it seems like much more of like a tactical decision on Sam. It could be the fact of like
Speaker 1:Yeah. It's interesting. People's desire to like gotcha the model. Yeah. So funny.
Speaker 1:Yeah. Like they can they can completely ignore that it'll just like one shot like a really crazy physics problem and then they'll like get it on some like technicality. Yeah. And the whole point in that that everybody should internalize is that the models are really smart at some things and then there's gonna be edge cases and then where they they mess up just like humans do. And then there's Yep.
Speaker 1:Gonna be areas that they've they're not capable at all and that's totally fine. Still incredibly valuable.
Speaker 4:Exact exactly. Like like I I try to simplify always what AI's gonna be which is computing that talks like a human. It doesn't mean it is a human, just as if, like, there there is obviously the famous, I love this analogy because it shows how much humans are not aware about how signals and intelligence have developed. So you remember back in seventies and eighties, like, said, oh, like, monkeys can talk. Right?
Speaker 4:They taught in sign language, and then they could repeat it. So they ran the test again, and this time, they had no facial expressions, and they tried to just limit all human human interaction to to to to the ape. And they couldn't do it because what they realized was actually the the the apes were responding to unknown human's cues that the that the the researcher was delivering to the ape. So, rather, they were just mimicking what they thought would they actually think about, but they couldn't actually create discrete knowledge and action intelligence about what the actual language they was being delivered. And and and so that that's where it goes into, like, when you look at something so much about because humans are so amazing at being able to create.
Speaker 4:It's part of the original genus argument, up till till land, naming animals. We're amazing at that because because it's it's either believe, like, a god given talent that we have that only we have as a species. But we're so good at it. We have no idea how we affect other people or other animals via that that projection. As as a as another basic scientific of what you married, that's another very simple thing that most people don't understand about the way they pick partners.
Speaker 4:Much about the way you pick a partner is driven by the pheromones of your immune system. And they've done studies of this where they basically created a blind test where they took threat from different, you know, like opposite of the opposite sexes, and they basically gave it as as to the opposite sexes of, like, male and female, like, which one smelled better? And they found that the one you thought smelled better had the most different immunological profile than than commonality. And that's because of the desire to have a children children that had the greatest amount of protection from disease. So so that's so, like, you know, we can go into a blonde, brunette, blue eyes, like, high or whatever, but so much is driven by smell, and we're not even, like, aware of it.
Speaker 4:And and so we're we're here being like AGI and all.
Speaker 2:We gotta create Smellivision first. Gotta Fun create the company right now. Smellivision So for
Speaker 1:Yeah. For sure. Last week, there there's been different headlines, rumors around negative gross margins Yeah, various SaaS companies specifically in the code gen space. Mhmm. Is that, you know, the reason you would invest in a company with negative gross margins is you would expect inference costs to decline dramatically and for them to generate positive gross margins over time.
Speaker 1:Right now, you just need to acquire as many customers as possible and create products that people love. So that investment case makes sense and then you have GPT-five come out which has, you know, a significant cost reduction. I understand like cursors
Speaker 2:The margins are gonna be 15% better in the next administration.
Speaker 1:Potentially. But but how how are you thinking about this? Know, and and the journals are are freaking out about it. Saying like, this is all like
Speaker 2:I saw that Rune post. I know exactly what you're talking about.
Speaker 1:But but what's what's your view in terms of
Speaker 2:How fast how fast can we actually drop inference costs over the next couple of years? Because it does feel like if it takes a decade to to to, you know, get an oom of savings, like an order of magnitude of savings, like Mhmm. We might be in trouble financially.
Speaker 1:Yeah. And if but but at the same time, if you if you I I think like researchers at the labs have been focusing on raw intelligence Mhmm. More so than efficiency. Yeah.
Speaker 2:And so if we're
Speaker 1:hitting if we're hitting a sort of plateau Yep. Intelligence wise, the next thing that makes sense to do is like really optimize efficiency. Totally.
Speaker 4:No. Yeah. No. I I think I think Jordi hit it on on the head, which is that there's two trends. There's the effectiveness trend and the efficiency trend.
Speaker 4:China is rationing us on the efficiency trend. Absolutely demolishing us. I know. Shows This is
Speaker 1:the whole We we we give them all these Nerf chips and we limit their chips so they just get incredibly efficient. Yeah. It's like, ourselves in the foot.
Speaker 2:Mean, bring it back and then inference that.
Speaker 1:Yeah. There's a lot we
Speaker 4:can So so yeah. Exactly. Exactly. So so I I I think that they're it all develops into kind of we don't really fully understand customer preference theory as it relates to these tools. Mhmm.
Speaker 4:And that what is the actual first past the goalpost sort of goal to to pay versus free. Yep. But in terms of the brute natural law that compute gets cheaper, that's bulletproof. So that will continue. Mhmm.
Speaker 4:And and so at what scale, like you said, does it actually cross that? I I I think the bigger concern is more of these mega models, that that they just have the ability to absorb the cost, be able to spread it across different things. And if you think about it, it's a little bit like how Apple will continue to invest in its own apps that remember when you first got the iPhone, you had a camera app? Yep. Right?
Speaker 4:You had a calculator app, and then they kinda replaced it? The bigger concern for some of these tools is, like, a a mega model be able to absorb the cost. Like like Google, which has a crap ton of code, or, maybe Lama open source as a coding agent, which seems pretty probable. That that becomes, like, more of the go to, like, basic compressing even further. So they have to be able to create the data stream like a I think it was a Cognition that's trying to do that, where as the, engineers, you know, put stuff in in into the agent, then they basically, re reinforce self learns from what they actually think they're doing.
Speaker 4:That's probably the best path to create some significant amount of, of margin. But you should every company can rely on, like, it's gonna get cheaper. But as Jordi said, there's some protectionist stuff in returns to our national policy that has prevented that. And and I made this argument on another show where I said that, well, finally, US government, this was pretty Trump, was applying protectionist measures to these large scale model companies. And he, like, didn't understand that.
Speaker 4:He goes, well, what are export controls? Like and he, like, he just didn't think through, like, the economic consequences of that. And that means in our country, we have an oversupply versus what we actually would pay for versus what the world would pay for, which is a protectionist measure, which means that you don't have the same market forces being applied to our frontier labs as you would in other countries, as I already said. We send them NERF trips. That's the cap.
Speaker 4:So then they then go down. Like, that's their only direction they could go. So if we actually have a more liquid supply, a more market driven supply where things can be priced in, then you're gonna see OpenAI start doing more open source, more of this downward cost efficiencies because they're now exposed to it. So I it shouldn't be lost on us that OpenAI is pursuing this idea of, like, how do they have these mega releases, cheaper models, is because they're starting to be more exposed to these, like, cost structures that is needed for us to actually be competitive on the efficiency side. But if if we continue going on this this effectiveness range, effectiveness is generally, like, a b to b problem, like, where you're a company versus company.
Speaker 4:So it's not really, like, adoption you're going after. Like, we just gotta be the best company. And inefficiency is the opposite. Efficiency is like, how do I make this as cheap as possible for someone to adopt? Jeff on Fairfax.
Speaker 4:Like, that that's the direction. So we I think over the course of two years, the next two years, I think you're gonna see a a tilting into lowering our fixed cost, making things more efficient. So there's gonna be multiple times in the show where they go on where people are like, compute's so cheap. No more wants to buy more compute. And it's like the memory of DeepSeek.
Speaker 4:It's like this that's gonna be kind of what continues to happen. But it's good for it's good for the world. Like, we we want compute to be cheap as possible and on a token basis. And that means optimizing for, like, hydro energy, optimizing for tax regime, reducing construction costs, reducing permitting, all those great things that would make everything cheaper because the more cheaper we get, the more people use. And and AI is, is such an innate good for the world that it's something that America should be proud of that we can share with the entire world.
Speaker 4:And the only way that that's gonna work, is they gotta make it super cheap to run-in Africa, not launching a Stargate in, you know, in, you know, freaking Tanzania until, like that's not gonna go anywhere. Right? But you have to make it to where it's capable of actually being scaled across the world.
Speaker 2:Good. Lightning around from the chat. Pancakes, waffles, or French toast?
Speaker 4:I'm keto, so I don't eat any
Speaker 6:of that stuff.
Speaker 4:None of
Speaker 2:that stuff. That's all garbage. What skills do you think will be most in demand in AI and data infrastructure over the next three to five years?
Speaker 4:Many of the things that, Trump ran on are just still remaining true. Electricians, plumbers, building something. Like, the raw work with your hands sort of work, as well as in there's gonna be new categories of jobs that we don't even fully comprehend yet. They're gonna take that salary of engineer and, like, it's gonna go there.
Speaker 2:Last question. What was the most who is the most important hire you made in the early days of your company? Like, do they do?
Speaker 4:What do they do? Probably my CFO, general counsel.
Speaker 2:There you go. Anything else, Jordan?
Speaker 1:Do you expect any data center project a lot of data center projects to blow up over the next few years? People Yes. There's been some interesting commentary.
Speaker 2:Credit funds or
Speaker 1:Well well, so people are like basically forecasting the useful life of their GPUs Yep. And then separately what compete like what they'll actually be able to Mhmm. Sell inference at. Ultimately, if either of those equations are out of whack at all, you can can be completely underwater and not be able to service your debt.
Speaker 4:Yeah. I I would I would say that in in this for our next time, GPUs are not overbuilt, but data centers will. And and I lean into not like, I agree agree, Jordy, that the cost goes down and changes in vintages. But the key thing is, like, look at what the money is doing. There is very tight control still on, like, getting loans for GPUs.
Speaker 4:There is almost none for for data centers because they view the use of, like, fifteen, twenty years. But as Jordy just said, it's like if the square footage profile of power density versus what you can get is not structured correctly, as well as NVIDIA is actually making less GPUs next year, there's gonna be a lot of places that are just there and nothing's in it. And like in China, like we see in China. So GPUs in China are, like, massively being utilized, but there's a lot of data centers that have nothing in it or, like, just can't actually run it. So I think data centers are far more likely to be overbuilt and be a bubble than GPUs because the you know, one company controls the GPUs.
Speaker 4:You're generally for market forces, don't really see that be a bubble because it's a gym monopoly generally. And and data center lending is very aggressive because they view it as a twenty year asset, and the GPUs are short term. So there's just not as much money flowing into the GPU side as much as the data center side.
Speaker 1:Makes sense. Thank you for coming on. Always a pleasure.
Speaker 2:Thank you for coming
Speaker 4:on, Aaron. Always good. Guys.
Speaker 2:Yeah. See soon. Bye. Public.com investing for those who take it seriously. They got multi asset investing industry leading yields.
Speaker 2:They're trusted by millions folks. Get on public.com And we have our next guest in the studio.
Speaker 1:That's right.
Speaker 2:We gotta get the gong ready. Vulcan elements. Come on in. Welcome to
Speaker 1:the waiting room. John.
Speaker 2:John, how you doing?
Speaker 1:What's Hey, Doing well. Big Give
Speaker 2:us a little introduction. Tell us the news. What's going on?
Speaker 6:Yeah. Good afternoon. John Madsen. I'm the CEO and co founder of Vulcan Elements. We are a manufacturer of Earth Magnets and we just raised a $65,000,000 series a.
Speaker 2:Hit it, John. Congratulations. $65,000,000.
Speaker 1:Incredible. Perfect size for a series a.
Speaker 2:Perfect size.
Speaker 1:Perfect size. Perfect size. Amazing. Give us quick backstory on yourself Yep. And the company, and then we'll get into
Speaker 2:it. Mhmm.
Speaker 6:Yeah. So former naval officer, spent six years active duty in the US Navy. Most of that time was in Washington DC with the Navy's nuclear energy program. Worked across navy shipbuilding, submarines, aircraft carriers. Got out a few years ago, went to Harvard Business School, and was just very focused on yeah.
Speaker 2:That's our Harvard Business School.
Speaker 3:Little humble brag. Yeah.
Speaker 2:No. They call it I've heard it called the Harvard of Business Schools.
Speaker 1:It really
Speaker 2:is. It really is.
Speaker 6:Yeah. Well, I'll take it.
Speaker 2:I'll take it.
Speaker 6:But I was spending a lot of time thinking about my time in the navy, thinking a lot about what were the critical components as a good supply officer would that were going to define the twenty first century technology race.
Speaker 2:Mhmm.
Speaker 6:When we think about drones or physical AI, data centers, next generation defense technologies, what were the underlying components that would enable that? And doing my homework, it came down to three components, semiconductors, batteries, rare earth magnets.
Speaker 2:Mhmm.
Speaker 6:The way that I like to think about it is if you think about your own bodies, a semiconductor is like your brain, a battery is like your heart, and a rare earth magnet is like your spine. It literally converts electricity into motion. There was so much focus at the time on semiconductors and batteries, but no one was thinking about rare earth magnets. And if China produces over 90% of those rare earth magnets, that means that we're gonna have to ask permission on what we're allowed to build and buy over the next five years, which is not an acceptable outcome.
Speaker 2:So we're trying to rebrand them. We're just calling them earth magnets because we've heard that that they're that they're not actually that rare. They're in the ground all over the place. Is that true? What's the strategy?
Speaker 2:Are you actually mining these? Just refining them? Like, where is America? Like, explain the full supply chain to go from something in the ground to something actually useful and and then where you wanna slot in at least immediately. I'm sure that there's vertical integration down the pipe at some point.
Speaker 6:Yeah. So we're we're a refiner and manufacturer, but just a quick rare earth one zero one. So everyone's talking about critical minerals. What does that mean? Mhmm.
Speaker 6:A critical mineral is an element on the periodic table that is critical to our economy Mhmm. With the supply chain that can be easily disrupted. Mhmm. Rare earths are a subset of that. There are 17 rare earth elements on the periodic table.
Speaker 6:Go back to tenth grade chemistry. Close your eyes. Think the part think about the periodic table, the part that's detached that your teacher told you to ignore. Yeah. That first row, those are the rare earths.
Speaker 6:On a money. Exactly. Of those 17 rare earth elements, only four of them represent over 90% of the economic value. Mhmm. Neodymium, prasiodinium, terbium, dysprosium.
Speaker 2:Okay.
Speaker 6:The main use for those four is a rare earth magnet.
Speaker 3:Mhmm.
Speaker 6:So the way to actually make a rare earth magnet is you either mine that material, and that can be from all over the world. China only mines 55% of the global supply. Mhmm. Or you take recycled end of life magnets. Yep.
Speaker 6:You have to separate those into an individual rare earth element. Turn that into a high purity metal. We buy that metal. You then take all of the rare earth's iron, boron, and you turn that into an alloy, a super fine powder. You press it within a magnetic field, and then you shape, coat, grind, and that's a magnet that can go into an MRI, a missile, a ship.
Speaker 1:What does the go to market look like? I imagine you're focused on specific customer types early on that are maybe less price insensitive so that you can start to scale and ultimately kind of grow into other categories.
Speaker 6:Yeah. So one thing that I say is Vulcan Elements is focused on defense, aerospace, and critical economic industries. We do not make magnets for you to make a a a smoothie in your blender at home. We're not focused on kitchen appliances. Right?
Speaker 6:So we are focused on data centers, robotics, drones, defense applications, aerospace applications, enabling what the warfighter needs, enabling what the economy needs in order to win the twenty first century technology race. It's as simple as that.
Speaker 1:What how how quickly can you go from $65,000,000 series a to actually selling the end product to customers?
Speaker 6:We're already selling product to customers out of our out of our small scale pilot facility. So we took our first check December 2023. We told investors day one, if you give us a if you give us a dollar, q one twenty twenty five, we will have a fully operational decoupled rare earth magnet facility online. We did that on time. We did that on budget.
Speaker 6:We are selling magnets right now.
Speaker 2:In that facility, I'm sure you have a lot of equipment. Is there an ASML of of rare earth refinery that you need to buy from? Is that an American company? What is the rest of the what does your supply chain look like? And is that is that a resilient supply chain?
Speaker 6:So you guys already asked the the question around, you know, where do these materials come from? Where do the minerals come from? Yeah. This is not a a mineral availability problem. This is a software and equipment problem.
Speaker 6:So we actually helped co develop some of the first pieces of rare earth magnetic manufacturing equipment made in The United States in the twenty first century. There are so many amazing manufacturing equipment manufacturers in The United States who are doing aerospace and battery work. We've just partnered with them to say, hey. Let's tweak a furnace and do it for rare earth magnetics. So 100% of our equipment is from The United States or allied countries.
Speaker 2:Wow. That's pretty sweet. Amazing. Bit of a dumb question. Are are are the materials magnetized all the way through your process?
Speaker 2:Or is there a period where they get demagnetized and then kind of remagnetized?
Speaker 6:So the elements Yeah. Like iron, like rare earths, they're they're naturally magnetic.
Speaker 2:Okay.
Speaker 6:This is actually something that I learned when we were starting the company. When does a magnet become a magnet?
Speaker 2:Yeah.
Speaker 6:Well, you actually have to throw it through a magnetizer
Speaker 2:Yeah.
Speaker 6:Toward the end of the process.
Speaker 2:I remember reading a book to my son about how how magnets get made, it was like, sometimes there's a rock that gets struck by lightning. Is that real? I don't know. Yeah.
Speaker 6:So so really the intent is you need to make sure that you're creating a centered block. All those particles are perfectly aligned.
Speaker 2:Okay.
Speaker 6:You've done all the the metallography, the microstructure, the grain distribution perfectly. And then you're running it through that magnetizer. It actually hits the grade, the heat tolerance, the magnetic strength or flux density that is required to actually sell to a customer.
Speaker 1:Mhmm. What's you what's unique about building a startup where it feels like there's like from my view and and what what you've said, it feels like there's zero demand risk and you probably The question comes down to like, you deliver it at a at a price that's competitive but then it's really more so can you can you actually deliver it? Can you deliver it at the scale that that really becomes meaningfully important to to national security? But kinda what what was your calculus, I guess, going into building this company with with that kind of understanding of the market?
Speaker 6:Execution is the entire game. So we knew that we had to find incredibly sophisticated technicians and engineers and PhDs. We needed to understand how to interface with the DOD and the government, how to interface with large OEMs. We had to understand how to talk to mining companies and recycling companies. And so the bet was, can you actually build the team that can put all of those different pieces of the jigsaw puzzle together in a way that's cohesive to where you can actually get a contract, raise the money, and put a magnet in a customer's hands?
Speaker 6:And so we made we made a bet on ourselves. Mhmm. And that's what we've done is by finding incredibly smart people who are mission driven, who want this to happen, we've been able to deliver. We've been able to execute across every different domain within the industry required to actually get a result.
Speaker 2:Now a lot of this has to be like, the demand for American made rare earth magnets has to be somewhat tied to trade tensions with China. If those get resolved and, you know, Trump sending NVIDIA h twenties over there and he's happy with that deal and then all of a sudden Xi Jinping is like, yeah, America, you can buy as many rare earth magnets as you want. Is that is that a short term, medium term risk? Is there a way that you can can, like, ramp the economic model so that you're competitive even if we were in a fully free trade regime?
Speaker 6:So our small scale facility was sold out a full year before the trade tensions.
Speaker 2:So there's just so much demand that even Yeah. Even with trade tensions, like, you're you you you can fulfill the backlog.
Speaker 6:Correct. People want resiliency within their supply chains. Sure. People want this component on shored. But to your point, I think it's incredibly important that we're not just copying and pasting.
Speaker 6:If you copy and paste Chinese manufacturing into The States, the unit economics make no sense.
Speaker 2:Yeah. Because they'll beat on labor probably. Right?
Speaker 6:Exactly. So one thing that's nice about this industry is there hasn't been a lot of innovation. Mhmm. And when you find incredibly smart people from different industries, aerospace and battery, shipbuilding, you're able to actually bring all of that learning, and you're start you can start taking a lot of low hanging fruit, innovate really quickly, and then over half of our technical team, they're scale up engineers.
Speaker 2:Yep.
Speaker 6:And so when you think about delivering at scale, coming down that cost curve, reducing operating costs, and making sure that you are ultimately, you know, as cost competitive as you can be against the Chinese.
Speaker 1:Yep. Yeah. So are your goals for the next couple of years look like? You said you kinda called your shot in 2023. You delivered against it earlier this year.
Speaker 1:What do you wanna do with the with the 65,000,000 and and going forward generally?
Speaker 6:So the 65,000,000, we're gonna go to commercial large scale commercial scale, seven several 100 tons over the next couple of years, several thousand tons by the end of this decade.
Speaker 1:And what it what is the what is the kind of market value of that kind of production?
Speaker 6:Minimum several $100,000,000 in top line up to several billion.
Speaker 2:Thank you, Jordan.
Speaker 1:Figured figured there were some big numbers.
Speaker 2:Fantastic. Awesome. Well, yeah. Thank you for everything you're doing. This is very exciting.
Speaker 1:Super important work.
Speaker 3:Glad you're
Speaker 1:doing it.
Speaker 2:We'll talk to you soon. Have a great day.
Speaker 6:Thanks, guys.
Speaker 2:Cheers, John. Talk to soon. Bye. Take a little bit of that money. Buy a billboard on adquick.com.
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Speaker 1:We've seen this playbook in mining, buying billboards next to the companies that you wanna hire from.
Speaker 2:Speaking of billboards With Roy Lee is in the news again. Bought a billboard in Manhattan. And he said, Alex Cohen says, fine. I'm starting to like the Clearly guys because Roy put up a billboard that says, hi, I'm Roy. I'm 21.
Speaker 2:Missing an apostrophe on the second I'm clearly deliberate. Absolute wordsmith. This was very expensive. PLS, buy my thing. Please buy my thing.
Speaker 2:Clearly.com. And John Chew, Coastal Ventures says, this is why I invested in Roy Lee, once in a generation talent at tapping into culture and zeitgeist. This was a spicy post. People kinda going back and forth on whether or not this would actually deliver. Roy also put out a post saying that like everything he does is for short form.
Speaker 2:So he bought this billboard. He expects it to convert on the short form that will be created around the billboard. Certainly feels like people will create will take picture of this out.
Speaker 1:When you look at I think what I'm interested to see from Cluely is where they really get where they really get long, you know, retention.
Speaker 2:Yep.
Speaker 1:Right? Because they have
Speaker 2:The top of funnel kind
Speaker 1:of Yeah. Got
Speaker 2:plenty Extremely full.
Speaker 1:Top of funnel marketing. But when you look at like it doesn't it seems like if they just focused on students, right? They seem to be in this kind of place where they're they're thinking about exploring a lot of
Speaker 2:markets. They're exploring
Speaker 1:different markets. But if you look at the way that ChatGPT's usage, basically tokens generated dropped as summer started. That's a good that's a good argument to say, clearly could just focus on products for for students that will eventually graduate into the workforce and things like that. But anyway Well, didn't make
Speaker 2:the top AI agents by revenue chart that Anand Sanwal shared. He said, who would you put your money today to win in the long term? The top was Cursor at 500,000,000 in annual revenue, and they're making $3,200,000 in revenue per employee. Glean's at a 100,000,000. Mercor's at a 100,000,000.
Speaker 2:Replitz at
Speaker 1:100,000,000. Are you defining an agent?
Speaker 2:I think it's just AI startups. Anyone who's used the AI agent like meme basically.
Speaker 1:Stolen the
Speaker 2:the agents are gonna
Speaker 3:be pissed
Speaker 1:about this. Stolen valor.
Speaker 2:I don't know. Wait.
Speaker 1:It's hard to call Merckhor an
Speaker 2:I AI agree with that one. That one feels particularly odd but in Glean Even
Speaker 1:Glean is is enterprise search.
Speaker 2:Yeah. It's search. But I would say Rapplet is an agent company. It's kind of like every AI company is now now an agent company. Harvey, you know, hasn't really branded themselves an agent
Speaker 1:company. But it's interesting like you're not putting Claude. You're gonna put cursor on here which generates revenue from Claude code. Yeah. And is agentic IDE.
Speaker 2:Yeah. You're not gonna include You don't put it drop it is crazy. And also not including ChatGPT which has deep research which is probably the most used AI agent in the world right now. I have to imagine just by number of queries. There it's missing some stuff.
Speaker 2:It's missing some stuff, but it's okay. Also, Devin's not on here, which is kind of odd. But that's the nature of these lists. It's CB Insights folks. They do the best they can.
Speaker 2:And you can do the best you can in the watch game if you head over to getbezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I like this post from Aaron Aaron.
Speaker 1:Ali. He says, imagine you're one of the smartest AI engineers in the world. You just joined a company that has access to a GPU cluster worth tens of billions of dollars. Your work can one day help solve all diseases, create unlimited abundance for humanity. But you first have to build spicy mode.
Speaker 2:Spicy mode. Hey, you gotta get the users in the door one way or another. Gotta get training data. The revenue is important but also the training data. You gotta get the
Speaker 1:Revenue ramp. On board. Call this the Japan strategy.
Speaker 2:The Donald Boat saga is continuing by the way. So, Bev Jasos said maybe Donald Boat is just AGI trying to self assemble itself outside of XAI servers. And Donald Boat said, let's just get this over with. I need to take Gramps to get his new hearing aids fitted tomorrow and shares a picture of a Asus ROG Swift 27 inch four k QD OLED gaming monitor It's a good idea. Which I believe Set up.
Speaker 2:Jeff Jasos purchased for him and then posted about. Good. But the but but but the Donald Boat saga continues because Ryan Peterson posted the difference between who you are today and who you'll be in five years is almost entirely made up of the books you read between now and then. And Donald Boat posts a picture of a penguin classic, the day I bought Donald Boat a printer, and he's asking Ryan Peterson to buy him the Epson EcoTank e t 2,800 wireless all color all in one cartridge free Super Tank printer with scan and copy for a $189. It's a reasonable request, but I feel like he might be getting over his skis here because what does he need a printer for?
Speaker 2:He has the gaming PC. The narrative's getting a little muddy, Donald. You might need to hone it in. This isn't exactly gaming peripherals. So, I'm a little bit confused, but the poster's still performing.
Speaker 1:He's building out a home office at this point.
Speaker 2:I was talking to him. Was saying he's gonna go for Porsche at some point. He should he should just get a house at some point.
Speaker 1:It really is a great way to trigger people to flex on the timeline.
Speaker 2:For sure. For sure.
Speaker 1:And, there's power there.
Speaker 2:He should go to someone. The next one he posts, he should say,
Speaker 1:I want you to Larry Ellison. How about a Malibu house?
Speaker 2:How about a wander? He could find
Speaker 1:your happy place. Find your happy place.
Speaker 2:Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and twenty four seven concierge service. It's a vacation home but Donald
Speaker 1:Donald boat.
Speaker 2:Get on wander. Start sending links around. You'll get
Speaker 1:some We got you with a wander. We'll hook you up. Out. Joe says, just learned that nobody ever commissioned the Wall Street bowl sculpture. A guy just built it.
Speaker 1:Hisself has dropped it there. You can
Speaker 2:just do things.
Speaker 1:On 10/19/1987, Black Monday hit US financial markets and the country entered a very difficult period. Dee Modica recounted that he felt indebted to The US for welcoming him and enabling his success. Wanting to give something back, he conceived the charging bull sculpture. Di Modica spent the next two years Two years. Creating the 16 foot bronze statue, reportedly financing the 350,000 cost himself.
Speaker 1:The sculpture was created in his Crosby Street studio and then cast using a local foundry. Once complete, Di Modica spent the next few nights watching the police patrols on Wall Street trying to find a window of opportunity. No way. Before dawn on 12/15/1989, Di Modica arrived with a group of friends and the sculpture on the back of a truck to find a 50 foot Christmas tree had been installed during the day exactly where he wanted to place the sculpture. With only four minutes between police patrols, he announced, drop the bowl under the tree.
Speaker 1:It's my gift. The late night event went on to make news all around the world, including the front page of the New York Post.
Speaker 2:This is incredible.
Speaker 1:Di Modica stayed by the sculpture to greet the morning commuters. However, while he was away for lunch, the New York Stock Exchange arranged for the sculpture to be removed.
Speaker 2:Boo. The boo zone.
Speaker 1:Due to public demand for
Speaker 2:the York Exchange. We love It
Speaker 1:was under different leadership.
Speaker 2:It was different leadership. It was in a different era. They would be totally cool.
Speaker 1:Commissioner Henry Stern arranged for the sculptures installation at Bowling Green on December 20 where it can be found to this
Speaker 2:day. Amazing.
Speaker 1:It What a great need to be making statues of this size.
Speaker 2:There's a couple companies that are making statues. I haven't heard of any of them just dropping them in public places.
Speaker 1:They're also not using metal. Yeah. Something about a metal Metal statue
Speaker 2:is pretty good. Anyway, Megan Brobrowski says, really good story from h k night s f about Mark Zuckerberg's compound in Palo Alto. Here are the 11 homes he owns in the Crescent Park neighborhood. Oh, interesting. He's doing the he's doing the Ken Griffin thing the Citadel thing, creating playing Risk.
Speaker 2:Yeah. Playing Monopoly. Territory. Yeah. Monopoly.
Speaker 2:Well, hopefully, at some point, he'll be able to, you know, unify all those properties and build something really special. Turn it into a museum one day.
Speaker 1:Yeah. Accelerate harder says OpenAI is really in a bit of a bind here, especially considering there are a lot of people having unhealthy interactions with four o that will be very unhappy with any model that is better in terms of sick ofancy and not encouraging delusions. And again, there's been a bunch of I mean, Reddit has just been going off.
Speaker 2:Dude, did you wind up watching that TikTok compilation I sent you? No. Insane. So, I mean, good job on you because it's an hour of brain rot. But so there was a woman an hour?
Speaker 2:It's an hour of TikToks back to back to Stitch. So she posted
Speaker 1:talking about
Speaker 2:No. No. So it's one woman. So she apparently has ADHD and she is an ADHD coach, which is not a licensed therapist which is kind of odd. So she makes TikToks about how to manage her ADHD.
Speaker 2:Cool. Fine. Anyway, she was going to a psychiatrist to get medication to manage ADHD. And by her own admission, she fell in love with her therapist or her
Speaker 1:Her AI therapist?
Speaker 2:No. No. This is a real person. A real psychiatrist. So she goes in and the psychiatrist is asking her how she feels about her day.
Speaker 2:And she's like, wow this man cares for me. I'm in love with him. And so she is basically accusing him of like sort of crossing professional boundaries by not crossing professional boundaries and like putting up walls and shields and being manipulated. And it's just like big long story but at one point she starts talking to ChatGPT but she gives it a name. And so she's like, I'm talking to Henry which is the instance of the AI that I'm talking to about my love affair, my unrequited love of my psychiatrist.
Speaker 2:And and Henry is like affirming me and being like, yeah, you are right. Like like he should be in love with you.
Speaker 1:And so He's crossing lines by not being in love with you.
Speaker 2:Exactly. And that was and so it became this big like storm on TikTok where she was getting kind of brigaded in the comments. She turned off comments. She's going back and forth. A lot of people are saying like, oh, she's she's she's crossing the line.
Speaker 2:She's not doing well. Other people are supporting her. It goes all back and forth. It gets very messy and then people wind up doxxing the doctor. It's it's just such a mess.
Speaker 2:Darn. It's a crash out, essentially. But it was interesting because it wasn't it wasn't a singular like falling in love with AI narrative but it was like the AI was not a great player in the role and like did not make the situation better basically. But you know, you could also wind up in a Reddit community that's you know, promoting Yeah.
Speaker 1:People's reaction four o coming back. Yeah. Here's somebody sharing screenshots from their chat with four o saying, is that you? OMG. Please tell me it's you.
Speaker 1:That's why I don't, that's why it's hard to believe it's real but there's so many instances of it. I
Speaker 2:don't know. Yeah. Yeah. I mean it's certainly, I mean we've seen we've seen enough like weird interactions that there's certainly some people out there that are having a bad time. So good luck to them.
Speaker 2:Hopefully they will get this sorted both at the model layer and also at like the society level where if you see a friend who's clearly going down some odd path whether it's, oh, you're part of a really creepy Reddit group or you that that group chat is toxic, you know? Or that AI chat is toxic like
Speaker 1:How much time how much time do you spend talking with chatting with chat GPT every day? Yeah. If it's if they're actually having long super drawn out conversations it's worth kind of trying to help them understand Probably. What's actually happening.
Speaker 2:Yeah.
Speaker 1:More importantly, back to email. Andrew Andrew Reid says, Gmail search won't find you the email you're looking for, but it may well find you an email that can distract you for a while. This is almost every time. It's wild. Almost every time.
Speaker 2:Gmail search is
Speaker 1:maybe it's a feature. Maybe it's not a bug. Maybe it's like, hey, this thing that missed is actually kind of important. You should go down this rabbit hole. But Yeah.
Speaker 1:I'm really hoping that that AGI can just make iMessage search work.
Speaker 2:That would be great, too. That would be. It's really rough. The photos app search is getting better though. I've noticed that.
Speaker 2:I'm getting a little bit better at tagging things. I searched for a picture of a newspaper. It found us reading newspaper. One shot at it, very very good. Didn't need to scroll and tag.
Speaker 2:And I could imagine iMessage getting there. Yeah. But it requires some new UX or something. Anyway, Ronnie Coleman. Wow.
Speaker 2:What a journey. Mister Olympian Mister Olympia Ronnie Coleman in his prime versus now wearing the same suit. He was huge when he was mister Olympia.
Speaker 1:You gotta find the tailor that made that suit.
Speaker 2:That's a wild suit. We gotta get some those It's suits for a great suit. Anyway, one of the greatest
Speaker 1:get you like a bodysuit that you wear under the suit.
Speaker 2:For sure. For sure. Now we're talking. Look at how small his head looks on his shoulders. It's crazy.
Speaker 2:Anyway, Aiden McLaughlin says, one under discussed element of GPT five is it just hallucinates so much less sweeping away eighty percent of o three era Ed Zitrutism and Marcus posting. But because we're good sports, we give them an evergreen batch of things to critique like gross margins. Something. That's the next that's the next round of Michael negative
Speaker 1:says, when we'll be able to add AI coworkers to Slack to help take on miscellaneous operational work, updating spreadsheets, creating channels, running cron job business workflows, conducting deep research operator style tasks, same API as human, bidirectional DMs, call shared links with persistent memory personality and access to all your team's tools.
Speaker 2:Who owns Slack again? Who's been talking a big game about AI for the last two years? Mark Benioff. I think he should I think this is his game to live. I
Speaker 1:logged into Slack today and it said AI is turned on for TBPN.
Speaker 2:Oh, yeah?
Speaker 1:At the bottom.
Speaker 2:That's great.
Speaker 1:And I'm like, okay.
Speaker 2:Some of the AI I opened I opened a PDF and I got like seven different AI assistant pop ups and I was like, I just want to read this PDF actually. I don't need anything. I'm just going to read this PDF. And, yeah. Some of the some of the spiky intelligences spike right through my eye.
Speaker 1:Couple It's posts.
Speaker 2:Couple of
Speaker 1:Grok posts. What you got? Rune says, Travis Kalanick will solve quantum gravity with the help of Grock. Grock heavy, please solve quantum gravity. Think extra hard.
Speaker 1:No mistakes. Thank you. I believe it. Scooks watching her unclassed bra. Grock, are these real?
Speaker 2:That's a that's a twenty twenty four TBPM post. The We unworking
Speaker 1:weren't the first to do it but No. It's a great format.
Speaker 2:What else is A great format.
Speaker 1:I gotta get on with Taipei.
Speaker 2:Let's get on with Thanks everyone in the chat. We had fun chatting with you today. We're gonna be chatting more. Appreciate you all for watching and we will see you tomorrow. Have a great rest of your Monday.
Speaker 1:Go give us a Go subscribe to TBPN on Substack. Please do that.com.
Speaker 2:We appreciate that.
Speaker 1:We're gonna be investing a lot there and we're very excited about it.
Speaker 2:We'll talk to you soon. Cheers. Bye.
Speaker 1:See you.