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Exploring the frontiers of Technology and AI
Josh:
If you were alive in 2008, chances are you remember the market crashing,
Josh:
a catastrophic failure of the housing market that bled into the entire economy,
Josh:
and it wiped out a lot of entities.
Josh:
And if you'll remember, there was one person in particular who profited a tremendous
Josh:
amount off of this happening, and his name is Michael Burry. He made $100 million.
Josh:
Personally, collectively, he made a billion dollars off of shorting this market crash.
Josh:
He saw what was right early, and he doubled down on it, and he made a killing.
Josh:
In fact, so much so that it became a movie that you've probably seen named The Big Short.
Josh:
Now, Michael Berry recently has published a new position in recent SEC filings that we uncovered.
Josh:
And Ejaz has been all over this over the last couple of weeks,
Josh:
tracking the positions, trying to understand why he's making these things.
Josh:
And if this bet is correct in predicting the next big bubble to pop,
Josh:
which is seeming to be AI.
Josh:
So he predicted the housing bubble in 08. He made a billion dollars.
Josh:
He's predicting another bubble in 2025. five, is he going to make another billion dollars, EJS?
Ejaaz:
The short answer is, I don't think he will. I think he's going to get blown out.
Ejaaz:
So Michael Burry is back. He is short around $300 million worth of Nvidia shares.
Ejaaz:
So he's shorting, at this point, the richest, wealthiest company in the world.
Ejaaz:
And that is a big sign, basically saying that I think the air bubble is popping.
Ejaaz:
So the question is, is it?
Ejaaz:
Let's go through his thesis, Josh. I'm going to simplify his post here.
Ejaaz:
Which is basically GPUs run the AI world, right?
Ejaaz:
Trillions of dollars have been spent by Frontier AI labs collectively to train state-of-the-art AI.
Ejaaz:
But the thing with these GPUs, Josh, is that they have a lifespan,
Ejaaz:
right? They don't last forever, right?
Ejaaz:
And he estimates that the top Frontier labs.
Ejaaz:
Overestimating or artificially boosting the lifespan of the GPUs that they purchase.
Ejaaz:
And you might be like, well, that sounds boring. Why is that interesting?
Ejaaz:
Well, the thing is, if you have assets on your balance sheet,
Ejaaz:
that factors into your stock price.
Ejaaz:
So the point that he's making is all these big companies are artificially boosting
Ejaaz:
the lifespan of the GPUs that they've purchased so that it inflates their stock price.
Ejaaz:
And therefore, the real stock price is actually a lot lower.
Ejaaz:
In fact, he says at the bottom of this tweet, by 2028, Oracle will overstate
Ejaaz:
earnings by 26.9%, Meta by 20%, etc.
Ejaaz:
And so his big short, Josh, is on the behemoth that is supplying all these Frontier
Ejaaz:
AI labs, NVIDIA, saying that when the bubble pops, and he thinks the bubble's
Ejaaz:
going to pop now, he will make a heck of a lot of money on this trade.
Josh:
So is he saying the bubble's going to pop now, or is it going to pop in 2028?
Josh:
Because he's referencing those numbers in 2028.
Josh:
So I'm kind of curious how he's framing this is this like because i'm now i'm
Josh:
thinking about our positions um is this something that he predicts is going
Josh:
to happen in 2028 or is this more of a short timescale position if
Ejaaz:
We remember from his original short i think he held a position for about a year,
Ejaaz:
Or at least like the better part of a year. So I think he probably estimates
Ejaaz:
that it's going to happen sometime within that time frame.
Ejaaz:
But I have more evidence as to like why he might be thinking that the bubble is bursting.
Ejaaz:
Have you heard of what a neocloud is, Josh?
Josh:
The name is familiar, but I don't understand quite what that means. So please fill me in.
Ejaaz:
Okay, so think of like AWS or any of these other typical cloud providers.
Ejaaz:
But they're specifically focused on providing GPUs and data center pipelines for you.
Ejaaz:
So think of like an AWS just for AI compute. That makes sense?
Ejaaz:
And so what he did was he looked at the major NeoCloud providers and he looked
Ejaaz:
at their stock prices over the last week, Josh, and they were down.
Ejaaz:
So he upped his position and was like, okay, this is the bubble bursting. I'm gonna lay my claim.
Ejaaz:
There's an issue with this thesis, Josh. I think he's dead wrong.
Ejaaz:
And I'm about to walk you through four reasons why he's wrong.
Josh:
Okay. So then just to kind of like wrap my head around this,
Josh:
the NeoClouds are kind of infrastructure for people who don't want to build
Josh:
their own infrastructure.
Josh:
Kind of like you described AWS. If you want to get a data center,
Josh:
but you don't want to build a data center, you offload that responsibility to a NeoCloud.
Josh:
And he thinks that the cost that these companies are marking down these NeoCloud
Josh:
prices at, particularly the GPUs is much higher because the depreciation happens
Josh:
on a shorter timescale than the companies are writing off.
Ejaaz:
Correct. And NeoClouds is one part of the picture, but it's a great example
Ejaaz:
to lead with because so many frontier AI labs like Microsoft OpenAI actually
Ejaaz:
pay these NeoClouds billions of dollars.
Ejaaz:
Like Microsoft just signed a $19 billion contract with a NeoCloud provider called
Ejaaz:
Nebius, which kind of sent its stock price going up.
Ejaaz:
We talked about it on a previous episode. so like it's a
Ejaaz:
good example to kind of like lead with but the
Ejaaz:
take here is that these neoclouds are
Ejaaz:
basically as you said overestimating the life cycle of these gpus and therefore
Ejaaz:
they are wrong except that's not the case at all and i present to you my first
Ejaaz:
counter thesis which is he's wrong about the two to three year depreciation
Ejaaz:
cycle it's actually more like five to six in some cases even eight years.
Ejaaz:
These GPUs are used for more than just training AI models.
Ejaaz:
They are used for inference, and they're sometimes used just for general queries
Ejaaz:
and distribution for these AI models, right?
Ejaaz:
But the most staggering kind of example comes from the top doc,
Ejaaz:
the top neocloud called CoreWeave, who kind of shows the opposite to what Michael
Ejaaz:
Burry is estimating, which is, there are people booking up GPUs, Josh.
Ejaaz:
Two quarters in advance, six months in advance.
Ejaaz:
And these aren't the latest GPUs. These are GPUs that are like five years old,
Ejaaz:
three years old, in some cases, even longer.
Ejaaz:
So if you dig into the details of all these different NeoClouds,
Ejaaz:
you'll start realizing that it's the opposite of what Michael Burry is estimating.
Ejaaz:
One, these GPUs have a very long lifecycle. And two, they're being used for
Ejaaz:
way longer than people expect for really important things within AI.
Ejaaz:
They are oversubscribed, they are overutilized.
Josh:
This is interesting because you're getting like these really two counterpoints
Josh:
here where Michael Burry's subjective take where he's like, no, this is wrong.
Josh:
And then you have this objective number, which is CoreWeave.
Josh:
And they're saying, wait a second, we're actually selling out these old hard
Josh:
drives or these old GPUs.
Josh:
Two quarters in advance. So how do we kind of piece together who's right and
Josh:
who's wrong through this?
Josh:
Because it seems like the market demand, and intuitively it makes sense too,
Josh:
that there is no shortage of people who want to generate tokens.
Josh:
And even if you are paying a little extra in premium in terms of cost per kilowatt
Josh:
for those older GPUs, it's probably still worthwhile because the amount of money
Josh:
you could build on top of that is so large.
Ejaaz:
Forget about GPUs. Even the CPUs are being used for all the AI distribution
Ejaaz:
and coordination. I mean, look at this, AMD CPU tab has just gone up in this
Ejaaz:
week's projected earnings, right?
Ejaaz:
But to answer your question, it's like, okay, well, who's right here, right?
Ejaaz:
I want to kind of, before I address that point, I want to look at another actor
Ejaaz:
within this whole circular economy that we like to talk about,
Ejaaz:
right? Which is the Frontier AI Labs, right?
Ejaaz:
Google, who is an established company, they just had their first $100 billion
Ejaaz:
revenue quarter, are using eight-year-old GPUs to like fund their whole thing.
Ejaaz:
So again, another data point saying that I don't think these GPUs are old and or not useful.
Ejaaz:
And then if you look at NVIDIA themselves, they also have crazy amounts of demand.
Ejaaz:
They're oversubbed for years in advance for their Blackwell GPUs and all their
Ejaaz:
new GPUs going forwards.
Ejaaz:
So then the last actor that I would want to look at is where does all the demand come from?
Ejaaz:
Like who's buying these GPUs? Are they satiating demand?
Ejaaz:
And if you look at every other company like Google, who has a ton of end users,
Ejaaz:
OpenAI with chat GPT users, et cetera.
Ejaaz:
Every insider take points to there's not enough GPUs to supply all of this demand
Ejaaz:
that they're getting from the apps that they produce, from Sora,
Ejaaz:
from a bunch of these different things.
Ejaaz:
There's just too much demand. And in many cases, they don't have enough scale
Ejaaz:
to even kind of like meet this demand.
Ejaaz:
Jensen Huang had a conversation with TSMC, which is like their main
Ejaaz:
chip manufacturer asking them to increase the rates of production by 50%.
Ejaaz:
So the point I'm saying is Michael Burry, I think is dead wrong here.
Ejaaz:
He's definitely underestimated demand and he's underestimated the life cycle
Ejaaz:
of these GPUs. They are more valuable than he thought.
Ejaaz:
And the old GPUs are worth more than they were worth when they sold originally.
Ejaaz:
They're still selling within 5% of their contracts, which is just crazy.
Josh:
So maybe I have to ask a pretty dumb question or seemingly
Josh:
dumb at least and it's like why why is that so important to the bubble how companies
Josh:
factor off losses in gpus over time is this some real big existential threat
Josh:
to me it feels like a small part to a bigger picture and not quite as big as
Josh:
something that would totally blow out an entire market that's been built so far the
Ejaaz:
Biggest budget spend for any major ai company is on GPUs.
Ejaaz:
That's where all the hundreds of billions are going for from Microsoft.
Ejaaz:
That's where the majority of OpenAI's $1.4 trillion that they've committed over
Ejaaz:
the next five years is going to.
Ejaaz:
It's all to these compute providers. It's all to these neoclouds.
Ejaaz:
It's all to creating their own chips. It's all to Jensen Huang's pocket.
Ejaaz:
And so most of the CapEx bubble comes from GPUs.
Ejaaz:
So if the bubble is going to burst anywhere, it's going to be from over-leveraging
Ejaaz:
on GPUs. Do you want to know something crazy.
Josh:
Josh? What's that?
Ejaaz:
Even though hundreds of billions have been spent this year alone on GPUs,
Ejaaz:
the companies who have spent it haven't even made a dent on their balance sheet.
Ejaaz:
Remember, we're talking about Google here. We're talking about Microsoft here.
Ejaaz:
They make hundreds of billions of dollars in net profit per year.
Ejaaz:
They have plenty of flush cash and they're spending it on machinery that they think is going,
Ejaaz:
you and I maybe don't see on the enterprise side or on the end consumer side,
Ejaaz:
but they are obviously seeing it.
Josh:
Okay. That makes sense. So the depreciation really is a big factor because it's
Josh:
kind of artificially inflating numbers across the board.
Josh:
It's from the people who are borrowing it, the people who are issuing the GPUs.
Josh:
There's lots of high inflation that he's assuming is being baked into this.
Josh:
And eventually that inflation kind of fizzles its way out through either some
Josh:
really aggressive event or just over time degrading, which makes sense.
Josh:
Okay. I think i think i'm up to speed on this i think i get his case
Josh:
but what seems a little bit different this time is that
Josh:
the first short that was made was in 2008 it
Josh:
was against basically the entire stock market and particularly the housing market um
Josh:
that was not growing nearly as fast as the ai market is that's like shorting
Josh:
the internet and if you shorted the internet before 1999 or after like there's
Josh:
this very narrow window to be correct without getting blown out because what
Josh:
a lot of people don't realize is in order to short a company you have to borrow
Josh:
money against from somewhere else.
Josh:
And that borrowing comes with a premium. You have to pay a certain percentage
Josh:
interest in order to loan the money.
Josh:
If he's not right on this, or even if he's wrong by a couple of months,
Josh:
with the rate that the market is accelerating, it feels like it's a very difficult
Josh:
thing to get right because...
Josh:
You not only have to time it right, but you can't get blown out by the appreciation
Josh:
of things as fast as they're growing.
Josh:
Like I've never seen a hockey stick of an industry steeper than this one.
Josh:
So it seems like this is a really tough position to be bearish in or a tough
Josh:
time to bearish in at least.
Ejaaz:
Yeah, it's a it's incredibly risky trade to make.
Ejaaz:
And I mean, the cherry on top of all of this, Josh, is that he paid the price pretty dearly.
Ejaaz:
You sent a message to our group chat this morning and I had to read it like multiple times.
Ejaaz:
Michael Burry, this morning of our recording, announced that he is closing down
Ejaaz:
his fund, the very same fund which took out this $300 million short on NVIDIA.
Ejaaz:
He was down on his position pretty massively. He overstated his means.
Ejaaz:
And there's one line here, Josh, which kind of sums it all up.
Ejaaz:
He goes, my estimation of value in securities is not now and has not been for
Ejaaz:
some time in sync with the markets.
Josh:
Tough. Okay, so this connects the dots for me because I saw the beginning and I saw the end.
Josh:
I was like, okay, I know he goes out of business, but I do not know why or how
Josh:
he gets there. And I think this probably connects the story.
Josh:
Don't, again, to the point yesterday, don't bet against the optimist,
Josh:
dude. He had absolutely cooked. So where does that leave us then?
Josh:
So therefore, it is not a bubble and he was wrong or therefore it is a bubble
Josh:
and he was wrong with timing.
Ejaaz:
No, I like where you're sniffing josh because that something still seems a bit
Ejaaz:
off right it's like well okay if it's not gpus what could it potentially be also so.
Josh:
He he blew up his position but that doesn't ruin the hypothesis right like just
Josh:
the prices moved against him but it doesn't prove the thesis wrong is that right
Ejaaz:
It doesn't prove the thesis wrong on a long-term horizon because no one knows
Ejaaz:
whether any of these crazy spends are gonna be crazy in hindsight,
Ejaaz:
But for now, in the short term, all the fundamentals show that there is adequate
Ejaaz:
demand for the GPUs and there are end users that are willing to use these AI
Ejaaz:
products that require these GPUs.
Ejaaz:
It actually tells us the opposite story, which is there are not enough GPUs
Ejaaz:
in the world right now, old and new, that can satiate the demand for all the
Ejaaz:
AI products that are being served today, right now at this moment.
Josh:
Okay. Yeah.
Ejaaz:
But one thing that could signal a constraint, Josh, is energy.
Ejaaz:
The, put simply, the U.S. energy grid isn't up to par to supply energy to all
Ejaaz:
these GPUs so that they can do the job.
Ejaaz:
In fact, there's this clip that I have here from Satya Nadella of Microsoft
Ejaaz:
where he goes on to basically say he has hundreds of millions of dollars worth
Ejaaz:
of NVIDIA GPUs that are collecting dust in his fair weather data centers because
Ejaaz:
they don't have the energy to supply this.
Josh:
That seems uh troubling and i
Josh:
think this is to a point that is being made
Josh:
a lot where there are these gluts where
Josh:
they are and how they show themselves is going to be the thing for debate and
Josh:
this isn't the only hot clip we got this week there is this hysterical clip
Josh:
um of satya nadella ceo of microsoft kind of talking about his relationship
Josh:
with microsoft and i want to play this out before we give some commentary on
Josh:
it because i think of all the clips i watched this week. This was one of my favorite.
Ejaaz:
In our case, the good news here is OpenAI has a program which we have access to.
Ejaaz:
And so therefore, to think that Microsoft is not going to have something that's- What level of.
Josh:
Access do you have to that?
Ejaaz:
All of them.
Josh:
You just get the IP for all of that. So the only IP you don't have is a consumer
Josh:
hardware. That's it. Oh, wow. Okay.
Ejaaz:
Interesting. That's so good. That's crazy.
Josh:
And this comes off the back of Satya saying in a previous interview
Josh:
when asked about open ai he goes we are like above them we
Josh:
are beside them we are around them they have this full total
Josh:
controlling entity over open ai
Josh:
and this is it's like the delivery is
Josh:
hysterical the reaction is hysterical but it also it
Josh:
shows a lot of interesting dynamics between these large companies because during
Josh:
this interview satya also made mention of the fact that people who are building
Josh:
their moats around individual models are very fragile and very brittle in the
Josh:
sense that they are one company copying their model away from being worth significantly less.
Josh:
And we kind of saw that earlier this week with our Kimmy K2 episode.
Josh:
I highly recommend you watch it if you haven't, because
Josh:
It shows how fragile being a frontier model can be if that's your only business.
Josh:
And in the case of Satya and Microsoft, I mean, it seems like they have all
Josh:
the leverage in the world.
Josh:
If they want to fork the OpenAI code base right now and create their own chat
Josh:
GPT, they can do that. They own all of it.
Ejaaz:
Yeah, I've said this before, but I think the biggest winner of OpenAI is Satya
Ejaaz:
Nadella. He has struck the best deal.
Ejaaz:
OpenAI recently restructured their entire company. We actually did an episode on that.
Ejaaz:
Feel free to check it out. But one of the major takeaways from that was,
Ejaaz:
Satya owns 27% of OpenAI. And now he is able to engage in any model provider, not just OpenAI.
Ejaaz:
He doesn't have exclusive rights anymore. He can kind of like flirt with other
Ejaaz:
AI companies. And he did.
Ejaaz:
He engaged with like Amazon on a bunch of different things.
Ejaaz:
And he just owns all the IP until something like 2030 or 2032.
Ejaaz:
So he is one of the smartest chess players.
Ejaaz:
Honestly, unexpectedly for me, I didn't think I thought Microsoft was kind of
Ejaaz:
like boomer in this sets, but he's navigated it beautifully.
Ejaaz:
And one thing that I also need to give him kudos for is he has one of the biggest
Ejaaz:
moats when it comes to enterprise.
Ejaaz:
Like remember, Microsoft software is a really good consumer grade product,
Ejaaz:
but is mainly kind of making their money from all the enterprise stuff,
Ejaaz:
from Copala and stuff like that.
Ejaaz:
So beautifully executed from Satya here.
Josh:
I love this. Man, Satya, he's crushing it.
Josh:
And it's funny because you don't think of Microsoft as a serious player in the world of AI at all.
Josh:
I don't use any of their software. I don't use Copilot. In fact,
Josh:
he was asked about Copilot because Copilot was the single AI coding agent.
Josh:
It owned 100% of the market share.
Josh:
And now it's taken down to 25%. And he said, this is a great thing because now
Josh:
I still own 25% of a market that is now 10 times the size of what I previously
Josh:
owned 100% of. So for him, he's playing the positive sum game.
Josh:
He's very aware of the market dynamics at play. And for the cost of what was it, $10 billion?
Josh:
He got the largest shareholder position
Josh:
of open ai which was rumored to ipo at a trillion dollars
Josh:
so they not only see the financial upside but they get all the intellectual
Josh:
property most importantly the code base to either reverse engineer for their
Josh:
own wants or to just clone and use for whatever they want it for it they have
Josh:
it and it is a true chess move by satya bravo nicely done microsoft as
Ejaaz:
Of today as we speak today at open ai's 500 billion dollar valuation uh microsoft,
Ejaaz:
Microsoft stake is worth $136 billion.
Josh:
Not a bad deal. But that's not the only big news. We have exciting news on the ChatGPT front.
Josh:
This is what I'm most excited about because I use ChatGPT every day and this
Josh:
is hopefully going to change the way I use it. Maybe we'll see when we talk about it.
Josh:
The news this week is that ChatGPT and OpenAI, they launched GPT 5.1,
Josh:
which is a whole new upgrade to GPT-5.
Josh:
How different it is, we're not really sure.
Josh:
I know, EJ, as I kind of read through the highlights, it's warmer in terms of
Josh:
its like sentiment by default. So it'll be a little bit nicer,
Josh:
which is bizarre because I thought we were going, we were trying to go the opposite
Josh:
direction, like it's a little too nice.
Josh:
And they added some safeguards that we'll get into in a second.
Josh:
There's also much better instruction following, which is interesting because
Josh:
oftentimes when you instruct GPT-5 to do things, it doesn't always do them exactly as you want.
Josh:
So like if you say always respond in six words, it will oftentimes respond in
Josh:
more or less than six words. It just doesn't quite understand the instructions.
Josh:
And then one of the really fun things that I saw was they changed the different
Josh:
types of personalities.
Josh:
So you can choose between personalities on how you engage with the model.
Josh:
And the previous ones were default, friendly, and efficient.
Josh:
And now there are some newly added ones, which are professional,
Josh:
candid, quirky, nerdy, and cynical.
Josh:
So in the case you want to personalize ChatGPT to be more like those models,
Josh:
well, now you have the option to do so with GPT 5.1.
Josh:
So if I'm sick of it saying, you're so right, I agree, that's a great idea,
Josh:
that's a great question, you could just say, cut that out, and it'll actually
Josh:
listen for the first time, which is really exciting.
Josh:
EJS, did you find anything interesting from GPT 5.1 after going through everything?
Ejaaz:
Yeah, I spent the last like 12 hours playing around with it.
Ejaaz:
Can I just, I'm going to play Bad Cop for a bit, Josh. Cool. I don't care.
Ejaaz:
Like this is kind of like a nothing burger 0.1 update.
Ejaaz:
And it's honestly like I've come to expect more from open air.
Ejaaz:
So I'm kind of surprised that they've come through with this release.
Ejaaz:
On the point of different personalities, I think that's super helpful.
Ejaaz:
Because speaking for myself, I think that the current model is too agreeable. It's too sycophantic.
Ejaaz:
And kind of Sam heard this feedback and the original version of GPT-5 was less
Ejaaz:
sycophantic, but then a bunch of people were like, I want it to be more friendly.
Ejaaz:
I want it to be more appeasing. And so he's kind of like flittering back and forth.
Ejaaz:
This option gives a lot more flexibility for the end user, for me.
Ejaaz:
I'm like, I want someone that's maybe a bit more candid or a little more cynical
Ejaaz:
when I'm kind of doing my research and then maybe a little more friendly when
Ejaaz:
I talk about more personal stuff, right?
Ejaaz:
So the pliability is cool.
Ejaaz:
What I will say is like, you kind of were able to do
Ejaaz:
this before you could just go into settings user personalization
Ejaaz:
and type in a prompt this i guess makes it easier
Ejaaz:
because you just gotta click a button and maybe that helps a lot of people
Ejaaz:
um the other cool thing i guess is like uh when it comes to efficiency it uses
Ejaaz:
fewer tokens and gives you more output so you get a higher quality answer for
Ejaaz:
less energy for less compute which is probably going to drive down costs of
Ejaaz:
accessing this type of aid this type of Frontier AI, which is super cool.
Ejaaz:
But aside from that, it's kind of like, why did they do this?
Ejaaz:
One of the critiques I saw, Josh is like,
Ejaaz:
it seems kind of rushed. Like there's no benchmarks, no API release.
Ejaaz:
A bunch of the dev tools look a little sloppy. It's almost like they kind of rush this.
Ejaaz:
It's not, there's no formal kind of like Sam's doing a live stream around this.
Ejaaz:
It's nothing around like, you know, hey, here's how it compares against other
Ejaaz:
models. They just kind of like rush this out. And I'm kind of confused.
Josh:
Yeah. I suspect the public sentiment will start to reshape itself around how this goes.
Josh:
Like when, when Apple releases iOS 26, it
Josh:
was a huge release with liquid glass and all this cool new improvements and
Josh:
then 26.1 is an incremental improvement where it adds a lot
Josh:
of new features nothing really groundbreaking but the product gets light slightly
Josh:
better i think we can kind of view these mid-tier updates
Josh:
as that where they're just small incremental improvements like
Josh:
now it's a little more efficient like you said there's this
Josh:
new dynamic thinking time which is what they call like
Josh:
smart thinking and it allows it to think faster
Josh:
think more efficiently use less words that
Josh:
are fillers so it needs less tokens to operate like the chart that we're
Josh:
seeing and that just allows for one the
Josh:
model to think more because it uses less tokens to think
Josh:
and then two it just creates a little more efficiency unlock for open
Josh:
ai's gpus to open them up to do other things so i assume this update is probably
Josh:
for both people for the consumer and for open ai in terms of efficiency and
Josh:
slightly better product is it this amazing novel breakthrough it doesn't appear
Josh:
like it at all in fact it's just like a very marginal improvement but it's something it is like
Josh:
It is something, and I suspect we'll probably get more updates like this,
Josh:
where it's like, oh, well, it does this like one thing a little bit better.
Josh:
Do you notice it? Maybe like one in every 50 prompts, but it's not a big deal.
Josh:
And that's probably where we are for a little while until maybe Gemini 3.
Josh:
I don't know. We have, there are murmurs of Gemini 3 coming down the pipeline from Google.
Ejaaz:
I've been waiting for it for a month now.
Josh:
Yeah, that could hopefully blow things out of the water. But we're at this weird
Josh:
kind of stagnant period where we haven't seen those step function improvements
Josh:
in AI models in a little while now.
Ejaaz:
I mean, like the speculation that would be like we're kind of grinding to a
Ejaaz:
halt and that exponential up, that S curve where we see AI improving massively
Ejaaz:
and it's curing cancer may not be quite there yet.
Ejaaz:
But hey, listen, in the meantime, there are several parties that are super bullish
Ejaaz:
open AI. One of them is Masayoshi-san of SoftBank.
Ejaaz:
In this news, he sold his entire stake of NVIDIA worth $5.83 billion to buy OpenAI stock.
Ejaaz:
It's hilarious because all that money that is investing in OpenAI is only going
Ejaaz:
to get spent on NVIDIA GPUs.
Ejaaz:
Just hold NVIDIA. Like, why are you doing that?
Josh:
Masa's really, he's been making some questionable decisions lately.
Josh:
He sold NVIDIA too early and he missed the whole bubble he missed the whole
Josh:
like he's just been making some strange decisions here he
Ejaaz:
Wants to own 5% of NVIDIA do you know how much that would be worth today? I cannot believe,
Ejaaz:
So like, you know, someone like kind of like tweeted this. They were like,
Ejaaz:
you know, someone should look into what happened after he sold his entire NVIDIA stake in 2019.
Ejaaz:
Just for reference here, the GPT 3.5 that went viral across the internet released
Ejaaz:
two and a half years later.
Ejaaz:
So pretty, pretty insane thing there. And then in final news,
Ejaaz:
Josh, tell me about this. This looks super exciting.
Josh:
The Google DeepMind team is back with some pretty awesome news.
Josh:
We are very fond of the Google DeepMind team in particular here at Limitless.
Josh:
They are very good at building real world physics in a digital manifestation,
Josh:
which I think is a really important thing to be good at in a world where we're
Josh:
training robots to be good at physical stuff, but they have not quite had the
Josh:
training time to get good at physical stuff.
Josh:
And what I love is that we've seen a lot of these projects coming out of the
Josh:
DeepMind team. And today we got a
Josh:
An agent that is capable of navigating these 3D virtual worlds.
Josh:
So we saw previously there was a few models that can generate the worlds.
Josh:
Well, now SEMA 2, which implies there was a SEMA 1 that I was blissfully unaware
Josh:
of, allows these AI agents to actually navigate these virtual worlds.
Josh:
So now not only can Google generate the virtual games, they literally look like
Josh:
video games in this in this video, but they can also have the characters navigate
Josh:
these complicated experiences, understand how things work, kind of piece things together.
Josh:
It's amazing to see because it feels like as i'm watching
Josh:
this video it is how a toddler would play
Josh:
a video game it's kind of they're slowly moving it's figuring
Josh:
it out you could see kind of reasoning in real time and navigating
Josh:
these spaces and it's important to understand as you're watching this everything
Josh:
that is on this is generated by ai because previously
Josh:
these look like trailers to video games and those those video
Josh:
games would have required thousands of people who are game developers lots
Josh:
of time on the game engine and all of that is
Josh:
done now fully by ai so seeing this announcement
Josh:
was really exciting for me because i'm like one i just love video games and
Josh:
two like oh my god wait these ais not only are they able to generate the environment
Josh:
but now these ai models are able to actually engage with the environment and
Josh:
what downstream effects does that have on training humanoid robots and the like
Josh:
which we saw with the tesla episode last week yeah
Ejaaz:
I mean yeah to your point um we see a real life implementation of this with
Ejaaz:
tesla tesla Tesla has a world model which they use in their robots,
Ejaaz:
which is the Tesla cars and automated self-driving and the future optimist robots.
Ejaaz:
And what's cool about this is, Josh, one of the main things that makes your
Ejaaz:
AI models super cool or really smart or intelligent is data.
Ejaaz:
There's a scarcity of data. There's a scarcity of rich human data.
Ejaaz:
Like they don't necessarily see what we see through our eyes or hear what we hear.
Ejaaz:
These simulated environments basically synthetically create this data and enhance
Ejaaz:
any of these AI models, right?
Ejaaz:
And so Tesla kind of gets smarter by replaying a scenario where it almost crashed
Ejaaz:
over and over and over again in simulated environments until it gets it right.
Ejaaz:
And then that just gets transported to every single production ready Tesla that
Ejaaz:
anyone is driving so that if they found themselves in a similar scenario, they avoid it.
Ejaaz:
And that's just like one small use case for like what these robots will eventually
Ejaaz:
be benefiting from. So such a super cool update.
Josh:
Yeah. And if you scroll down actually to post EJs, you'll see a lot of similarities
Josh:
to what we spoke about with Tesla, where you could see the model kind of reasoning in plain English.
Josh:
You could see, oh, we equipped the pickaxe and copper mine. And then,
Josh:
okay, like I'll equip the pickaxe and it walks you through its chain of thought
Josh:
and then not only that but the post below it shows that it's self-improving
Josh:
so the more time it spends cycling through the more time it spends playing games
Josh:
the better it gets and these are early implementations of what what we kind
Josh:
of imagined ai would eventually be which is this self-recursive loop where it
Josh:
can improve without outside information and it's really exciting to see it happening
Josh:
in the virtual world, because I guess that's the only place it can make sense
Josh:
where it costs much less.
Josh:
You can't harm anybody if a robot goes rogue, but it can learn without the inputs
Josh:
of other people. So that is the exciting thing about this, I think.
Josh:
And I'm really excited for the DeepMind team, man. I hope they keep going.
Ejaaz:
Well, dude, like, do you remember our conversation with Logan Kilpatrick,
Ejaaz:
the head of Google's AI studio?
Ejaaz:
If you haven't seen that episode, definitely go and check it out.
Ejaaz:
One of his main takeaways or one of my main takeaways is all of Google's AI
Ejaaz:
byproducts feeds off of different models within the same suite.
Ejaaz:
So if their video model learns something cool, they can transpose that onto
Ejaaz:
their LLM, which is like in Word, so that it gets recursively smarter over time.
Ejaaz:
I just think it's like fascinating and world models kind of like manifest all
Ejaaz:
of these different things in one particular simulated environment.
Ejaaz:
So, so cool. Kind of hard to wrap my head around sometimes, but because it looks
Ejaaz:
like a video game to your point but but awesome.
Josh:
Yeah it's you have to break this gap between like your normal understanding
Josh:
when you see these videos and think like oh my god wait this is not normal this
Josh:
is actually all ai generated um but with that we have concluded all the fun
Josh:
new updates from this week it was a
Josh:
i'd say a medium week it wasn't anything crazy there was no crazy outliers but
Josh:
a solid week overall every week there's so much stuff going on and the progress
Josh:
i feel like we're almost getting immune to it how fast things are moving um
Josh:
but i hope everyone found this interesting if you did please don't remember
Josh:
to share with your friends, like, subscribe.
Josh:
Ejaz, I know you were manifesting some sort of send-off today. Do you want to share?
Ejaaz:
Yes. Similar to Michael Burry, you shouldn't be shorting the biggest podcast bubble in the world.
Ejaaz:
And Limitless is at the forefront over here. We're delivering you all the latest AI news.
Ejaaz:
And just like the trade that Burry made that he lost $300 million in,
Ejaaz:
you don't want to be shorting the best leading AI podcast in the world.
Ejaaz:
Give us a five-star rating.
Ejaaz:
Subscribe if you're not. What was the stat, Josh? 80% of listeners?
Ejaaz:
83%? How many of them don't subscribe? Over 80%.
Ejaaz:
Over 80. That's nuts. It helps us out massively.
Ejaaz:
We are currently in the top 30 in the technology podcast across Spotify,
Ejaaz:
Apple, and wherever you listen. Help us get to the top 10. It would mean a lot. What do we say?
Josh:
Don't ever bet against the optimists. And by subscribing and by being a part
Josh:
of this, you are part of the optimists.
Josh:
And we are going to move forward and things are going to progress.
Josh:
And just don't bet against the optimists. So thank you for being optimistic
Josh:
with us and being on this journey with us and we'll be back next week with a
Josh:
whole new slew of episodes so thank you for watching and we'll see you then