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Exploring the frontiers of Technology and AI
Josh:
On paper, SpaceX's $1.5 trillion IPO would be the biggest in history,
Josh:
raising about $30 billion.
Josh:
But that's not the crazy part. The crazy part is that even at that price,
Josh:
we still believe it's undervalued.
Josh:
In fact, grossly undervalued because this all stems from one realization.
Josh:
It's turning Starlink into AI data centers in space. And the winner who deploys
Josh:
resources the fastest gets to reshape civilization.
Josh:
It isn't just SpaceX stock finally available to the public.
Josh:
This is Elon using Wall Street's money to build an
Josh:
orbital gpu swarm with these new satellites that are 150 kilowatts and starship
Josh:
will launch basically a small city's worth of ai power into orbit every single
Josh:
flight we're going to talk about all of this um because eventually this leads
Josh:
to lunar factories producing ai satellites and if he pulls this off it's going
Josh:
to be pretty amazing so in this episode we're going to break down why this ipo exists
Ejaaz:
Only because of ai.
Josh:
This was not the case prior to this week how the physics actually favored data
Josh:
centers in space and why 1.5 trillion dollars may be a rounding error if SpaceX
Josh:
wins because, I mean, in this game, Ejaz, it's kind of simple.
Josh:
Whoever can deploy compute the fastest, they win the AI race and they probably
Josh:
get to rewrite the future of civilization.
Ejaaz:
Yeah. I mean, before we get into it, I want to walk everyone through the kind
Ejaaz:
of series of events that kind of led to this groundbreaking bit of news.
Ejaaz:
So it all started off around Wednesday this week, where two news sources,
Ejaaz:
Bloomberg and the information leaked news that SpaceX was potentially going to IPO sometime in 2026.
Ejaaz:
But we didn't quite know the valuation at that point.
Ejaaz:
And then it broke that it was a $1.5 trillion valuation.
Ejaaz:
And the reason why this is such big news is it would technically be the biggest IPO ever.
Ejaaz:
And then people were like, but Elon hasn't confirmed it.
Ejaaz:
Well, yesterday, Elon officially confirmed it. He responded to a great article
Ejaaz:
from Eric Berger where he kind of predicted why he thinks SpaceX is definitely going to IPO soon.
Ejaaz:
And Elon confirming it all but means that,
Ejaaz:
If SpaceX IPOs, Josh, at $1.5 trillion, his net worth would effectively double,
Ejaaz:
which would put him just under, not exactly at, but just under $1 trillion overnight.
Ejaaz:
Once the IPO goes live, he owns 42% of SpaceX.
Ejaaz:
So listen, there's a bunch of big numbers here.
Ejaaz:
In order to successfully IPO at this valuation, he needs to raise $30 billion.
Ejaaz:
Dollars um he needs to you know
Ejaaz:
technically deliver on a lot of stuff that we're going to get into in a second
Ejaaz:
but you know massive massive vision so the question i ask myself is why now
Ejaaz:
and what is he doing to justify this what is he telling the people that he's
Ejaaz:
raising 30 billion dollars from um to convince them to give him that kind of
Ejaaz:
money and it comes to one thing josh,
Ejaaz:
AI data centers in space. Now, you and I have had a very tumultuous relationship with this.
Josh:
We've come a long way.
Ejaaz:
We've come a very long way. And by a long way, in the last four weeks,
Ejaaz:
when this kind of like entire trend started developing, at least on social media.
Ejaaz:
And the concept here is if you're able to put GPUs or AI data centers in space
Ejaaz:
and harness the energy of the sun, you effectively have infinite power.
Ejaaz:
And in this game of creating the best AI to reach AGI level,
Ejaaz:
you need as much compute as you can get your hands on. And the fact is Earth's resources is scarce.
Ejaaz:
So Elon's whole pitch behind IPO-ing SpaceX is he believes he can control and
Ejaaz:
build data centers in space using his Starlink satellite network.
Ejaaz:
Josh, he thinks he can create a constellation of Starlink satellites that can
Ejaaz:
speak to each other via laser beams, right?
Ejaaz:
So they can communicate and share compute and data between themselves,
Ejaaz:
harness solar energy from the sun and beam that down to earth to create AGI.
Ejaaz:
This sounds like something out of a sci-fi novel, Josh.
Ejaaz:
It seems like you're obviously bullish. How feasible is this?
Ejaaz:
What are we looking at here?
Josh:
Yeah, it's funny because for the longest time, Elon was strictly no.
Josh:
No way are we ever going to go public. But the second that they realized that
Josh:
Starlink satellites can be architected as this distributed network of data centers,
Josh:
it went from no way to we kind of have to.
Josh:
Because a lot of this AI race, it kind of comes down to deploying assets just
Josh:
quicker than your competitors.
Josh:
And we've seen this with XAI in the past where they did not exist, what, two years ago?
Josh:
And now they are at the forefront with everybody else. And it's because they
Josh:
were able to deploy their resources faster than everyone else.
Josh:
They were the fastest to get to
Josh:
large coherent cluster of nvidia gpus
Josh:
and as a result they have some of the best models in the world so this
Josh:
is clearly a race to get to resources spacex has
Josh:
the ability to do so xai has the models to do so but spacex doesn't quite have
Josh:
the money so their projected revenue was i think it's about 24 billion dollars
Josh:
in the near term which for a fun fact is roughly equivalent to nasa's annual
Josh:
budget but what they realized is wait a second if we're going to compete on
Josh:
a global scale and building AI data centers,
Josh:
we need far more money than that.
Josh:
And that is the reasoning why they're going to public markets,
Josh:
raising the $30 billion.
Josh:
And again, at $1.5 trillion, that's about $30 billion they're going to raise in addition.
Josh:
So Ijaz, I guess the question, I started by saying this is fairly undervalued
Josh:
because the stakes are so high.
Josh:
We'll explain the reasoning, but I'm curious what your take is on the valuation,
Josh:
the $1.5 trillion number as it sits today.
Ejaaz:
Okay, assuming this is economically and physically possible,
Ejaaz:
Josh, it's a no-brainer.
Ejaaz:
And it's for one simple reason, which Andrew actually outlines pretty well in
Ejaaz:
this tweet that I'm showing here.
Ejaaz:
To win the AI race, you need the most compute, data, and energy.
Ejaaz:
That last one, if you can get infinite energy from the sun, you've already won, right?
Ejaaz:
And the only reason why people haven't considered this before is because it hasn't been possible.
Ejaaz:
Elon will effectively own the highway and the tolling system into space.
Ejaaz:
SpaceX is like literally a decade ahead of the next nearest competitor.
Ejaaz:
So if he can create a monopoly on this and actually make this viable,
Ejaaz:
he wins. Your point around him needing the money to apply resources to this,
Ejaaz:
we all know that Elon started SpaceX to get to Mars, right?
Ejaaz:
He wants human civilization on Mars.
Ejaaz:
And he didn't really have a good justification as to why he would IPO SpaceX,
Ejaaz:
aside from maybe getting extra cash to help fuel that vision.
Ejaaz:
Now he realizes that he needs to kind of create this constellation of satellites
Ejaaz:
to pay for the Voyagers and the expensive mission to get to Mars.
Ejaaz:
So it's a means to an end is the way that I'm kind of thinking about it.
Ejaaz:
And so now when I connect the dots, Josh, is $1.5 trillion valuation undervalued or overvalued?
Ejaaz:
I think it's undervalued assuming he can get the data centers out in space and
Ejaaz:
beam it down back to Earth.
Ejaaz:
Because it's not just going to be him and Grok and XAI that benefits from this.
Ejaaz:
It's going to be all the other frontier AI labs that are going to want to or
Ejaaz:
need to rather use his infrastructure. And that's my simple thesis.
Josh:
Yeah, you can ask the question, well, one, like, is this a monopoly?
Josh:
Yes, this is a monopoly. The next closest company is five to 10 years behind being Blue Origin.
Josh:
Is this a monopoly on a market that is meaningfully large? Yes.
Josh:
AI, as well as low earth orbit satellites, as well as energy satellites,
Josh:
are about some of the biggest markets on planet earth so the total active
Josh:
market size is gigantic and the
Josh:
third question is is there an operator capable of actually doing
Josh:
the impossible and making the impossible a reality and the
Josh:
answer to all three of the questions are yes so there is
Josh:
a unique monopoly in a industry that
Josh:
is larger than any industry that exists today run by
Josh:
the best operator in planet earth and the convergence of those three things if
Josh:
it works in the world that we do actually get ai data centers in space and we're
Josh:
building artificial general intelligence out there we're harnessing a lot of
Josh:
power of the earth that is a civilizational scale shift and the amount of wealth
Josh:
generated from that will make 1.5 trillion dollars feel like a drop in the bucket
Josh:
so maybe today 1.5 trillion feels large but in the scale of things
Josh:
that's a very small number.
Ejaaz:
Typically, we speak about companies going from zero to one, and that's where
Ejaaz:
those exponential valuations come from.
Ejaaz:
With this IPO and with Elon's kind of successful Starship launches and satellite
Ejaaz:
launches, we're somewhere between zero and one. We're at 0.5.
Ejaaz:
So the risk has been reduced because he's reduced the cost of going to space.
Ejaaz:
He's already launched satellites successfully. So now the exponential returns
Ejaaz:
seem really, really more feasible.
Ejaaz:
So I think he's going to raise that $30 billion in a matter of,
Ejaaz:
you know, months, if that amount, right?
Ejaaz:
The other thing is, like, he's literally turning science fiction into reality here.
Ejaaz:
We talked about the concept of the Kardashev scale, type two civilization,
Ejaaz:
which is, you know, humans being able to harness the energy of their local star, that is the sun.
Ejaaz:
And we've suddenly gone from it being zero.
Ejaaz:
So like that, there's no way he's going to pull it off to, ah,
Ejaaz:
you know what? He actually might.
Ejaaz:
And so $1.5 trillion seems kind of very undervalued if you have that kind of mindset.
Ejaaz:
But again, people listening to the show, Josh, are going to be like,
Ejaaz:
well, I don't think the numbers make sense.
Ejaaz:
You can't get rid of heat in space. It's a vacuum.
Ejaaz:
How are you going to be able to launch satellites? They're going to need to
Ejaaz:
be kilometers square wide.
Ejaaz:
Josh, have you got any of the numbers that can help break this down?
Josh:
Let's run the numbers. So we talked about a good bit of the logistics and
Josh:
the cooling in a previous episode earlier this or last week so
Josh:
go listen to that if you're interested in that the numbers that
Josh:
we're going to talk about today are the amount of scale
Josh:
they're actually able to get into outer space and what that looks like so elon
Josh:
recently posted on x their ability to get 150 kilowatts
Josh:
per satellite into outer space so for some reference numbers the average u.s
Josh:
home uses about 10 500 kilowatt hours which is about 1.2 kilowatts of continuous
Josh:
energy so if an ai satellite can generate around 150 kilowatt of electrical
Josh:
power, like Elon is saying,
Josh:
150 kilowatts divided by 1.2 is about 125 homes worth of continuous power.
Josh:
So one of these AI satellites has roughly the power budget of 120 to 130 American
Josh:
homes running all the time.
Josh:
Now, how much can you do per launch? Because a launch consists of many of these satellites.
Josh:
So SpaceX's own site says Starship is designed to carry up to 150 metric tons of low Earth orbit.
Josh:
So how many is that? that's about 50 to 75 of these satellites per flight.
Josh:
So if you do that math, 60 satellites times 150 kilowatts of energy is nine
Josh:
megawatts of power in orbit from one starship,
Josh:
which is equivalent to a small town in New England with every single launch
Josh:
that they make into outer space.
Josh:
That is 7,500 homes. That is 19,000 people's home usage.
Josh:
So every fully loaded starship launch is like dropping a small city's worth
Josh:
of electric households dedicated just to AI into orbit.
Josh:
And that is an outrageously large amount of energy and compute that they're
Josh:
putting into outer space, especially relative to what people are trying to do back here on Earth.
Josh:
If you remember a Blackwell chip, which is NVIDIA's newest cutting edge rack,
Josh:
it uses 120 kilowatts per rack.
Josh:
And each one of these satellites surpasses a Blackwell. So it's like this gargantuan
Josh:
amount of energy and compute that's being sent to orbit every single launch.
Ejaaz:
Yeah, he's tapped into the infinite energy clip and it's become a reality.
Ejaaz:
And if he can harness all of that, he basically wins.
Ejaaz:
The other thing I was thinking about, Josh, is
Ejaaz:
To your point around SpaceX or Starlink specifically being a monopoly on this,
Ejaaz:
that's effectively the way that I see it.
Ejaaz:
Like pretty much every single usable satellite out there is a Starlink-affiliated satellite.
Ejaaz:
In fact, we've got this really cool graphic that we want to show everyone here.
Josh:
Oh, yeah, this is sick.
Ejaaz:
Okay, if you're looking at this, if you squint, it might look like a bacteriophage,
Ejaaz:
right? But no, this is a simulation of all live satellites that are orbiting Earth right now.
Ejaaz:
And if you notice my cursor, whenever I touch pretty much any satellite that's
Ejaaz:
kind of bumbling around here, you'll see Starlink repeated over and over and over and over again.
Ejaaz:
So he has the market monopoly. I think something like 90% of satellites out
Ejaaz:
there are Starlink based or have been launched from SpaceX infrastructure and launches.
Ejaaz:
So he has the market monopoly. And the reason why that is so important is...
Ejaaz:
The capex cost of launching this out into space and making AI data centers in
Ejaaz:
space feasible, it actually becomes affordable to do this, right?
Ejaaz:
Effectively, if you imagine having just empty data center slots bumbling around
Ejaaz:
in space, and all you need to do is fit in the latest GPU and launch it up there
Ejaaz:
for cheaper than the cost of the weight of the GPU,
Ejaaz:
Elon will be able to do that via SpaceX.
Ejaaz:
So it's a crazy monopoly. I do not see anyone coming even close maybe it's uh
Ejaaz:
amazon or rather jeff bezos's blue origin but that's still a decade behind right
Ejaaz:
so as far as i see it elon's got this in the bag.
Josh:
Yeah and they're i mean because of the rapid reusability of
Josh:
starship you're able to send just tons of mass to orbit elon he posted that
Josh:
he's expecting one megaton per year um so i mean 100 gigawatts it's on the that
Josh:
includes 100 gigawatts it's on the order of like a dozen large power plants
Josh:
so this map that we're looking at right now full of all these satellites is
Josh:
going to get much more full.
Josh:
Another interesting thing about this map is the way that they communicate to each other, EJAS.
Josh:
A lot of the communication done on Earth is done through fiber optic cables
Josh:
when it relates to AI because it's the fastest way to move information as close
Josh:
to the speed of light as possible.
Josh:
The cool thing about Earth is it's vacuum with no resistance or friction.
Josh:
So when these satellites are communicating with each other, even over a distance,
Josh:
the only limitation is actually the speed of light.
Josh:
And the bandwidth with is huge because there is no friction
Josh:
in communication because they are simply sending photons to
Josh:
each other they're sending and receiving photons so the unlock that
Josh:
that enables where now you have a three-dimensional plane
Josh:
of earth where earth is two-dimensional you can only build so much here you
Josh:
turn them to three dimensions and you're restrained only by the speed of light
Josh:
in terms of photons moving back and forth to each other this gets really sci-fi-esque
Josh:
very quickly but also you could start to see how effective this is and what
Josh:
an incredible business oh my god i am stoked for the CEO. Are you an investor at $1.5 trillion?
Ejaaz:
Yeah. Yeah, of course I am. Yeah.
Josh:
Hell yeah.
Ejaaz:
Dude, the TAM, the total addressable market, is literally infinite space.
Josh:
Yeah, but it does not exist.
Ejaaz:
It doesn't exist. Yeah, exactly. Earth will eventually become energy constrained.
Ejaaz:
If you look at the energy bills, Josh, of the local towns surrounding data centers
Ejaaz:
that are in Abilene, Texas, it's gone through the freaking roof, dude.
Ejaaz:
And this is going to be something that we constantly come at odds with because,
Ejaaz:
you know, who needs it more?
Ejaaz:
What's more important, humans that are kind of local and conducting their own
Ejaaz:
kind of business or creating absolute artificial super intelligence for the world to use?
Ejaaz:
I know some people might, you know, argue the latter.
Ejaaz:
So the point is, we need to find energy elsewhere. And the most obvious one
Ejaaz:
is the thing that stares at us in a blue sky every single day.
Ejaaz:
So to round this off, Josh, and for the listeners and watchers of this show,
Ejaaz:
if you want to imagine what the end game of this looks like,
Ejaaz:
it's this graphic that we're showing you on this screen right now,
Ejaaz:
except it's Starlink satellites all over the sun.
Ejaaz:
And it's just absorbing the energy and transmuting that down to build artificial
Ejaaz:
general intelligence on Earth. It's a crazy, crazy vision.
Josh:
Things are getting really sci-fi really quick.
Ejaaz:
And it's... Josh, I had one more. I had one more thing. Just a little nugget, a little Easter egg.
Ejaaz:
Okay. If SpaceX is one of your favorite, AI companies.
Ejaaz:
Give me another one. Just give me maybe your next three or four.
Ejaaz:
What's one company that comes to mind? I want you to say Google,
Ejaaz:
by the way. So you can cut this and say it.
Josh:
Well, clearly Google is one of them. We are huge fanboys. We love Google.
Ejaaz:
Why do you ask that question? I was hoping you were going to say that.
Ejaaz:
They are an official percentage owner in SpaceX to the tune of around 8%.
Ejaaz:
That means they invested $900 million in SpaceX about six years ago.
Ejaaz:
Josh, that is currently worth $111 billion if SpaceX IPO is at 1.5.
Josh:
Trillion. When you got it, you got it, man. And Google just got the juice.
Josh:
Listen, I'm a SpaceX shareholder too.
Josh:
My friend John and I, we worked so hard back in 2020 to find an SPV of an SPV
Josh:
of an SPV to get shares in.
Josh:
And it is now up like 50. I'm so excited to finally have some liquidity.
Josh:
Not that it matters. I fully intend to add more, but like, man,
Josh:
good time to be an optimist.
Josh:
Good time to be an investor in the future because it is getting so weird and so wild. So weird.
Josh:
But if you are new here, every Friday, we release an episode about kind of a
Josh:
roundup of the world in AI. There's more stuff that happened.
Josh:
And this second half of the episode, we're getting into that,
Josh:
starting with what feels like a natural extension of this e-jazz, right? Where,
Josh:
We officially have the first AI data center in space that actually worked.
Ejaaz:
Yep. So this tweet that you're seeing from Philip Johnson, Philip is kind of
Ejaaz:
like the guy that kicked off this trend, I would argue.
Ejaaz:
He is the CEO and founder of StarCloud, which is a startup incubated by Y Combinator
Ejaaz:
with a very bold vision of putting AI data centers in space.
Ejaaz:
The one difference between Philip and Elon is he's actually put a data center
Ejaaz:
in space and he launched it through one of Elon's Falcon rockets last month.
Ejaaz:
And they put an NVIDIA H100 in space. It's currently out there running inference and training models.
Ejaaz:
And it was able to do two really cool things, Josh.
Ejaaz:
Number one, it trained a version, an open source version of ChatGPT from scratch
Ejaaz:
on all of Shakespeare's works.
Ejaaz:
Just for fun, to see if it could figure it out. And secondly,
Ejaaz:
it took an open source version of Google's AI model called Gemma and is currently,
Ejaaz:
right as we speak, inferencing between that model in outer space back to Earth.
Ejaaz:
So you can send a prompt to the Gemma model out there and get a response in
Ejaaz:
a couple of seconds, which is just insane to say.
Ejaaz:
Now, people listening to this might be like, well, an NVIDIA H100,
Ejaaz:
that's an old GPU, who cares?
Ejaaz:
And it's just one of them. This isn't the vision that you just pitched me of
Ejaaz:
a satellite network eclipsing the sun.
Ejaaz:
Baby steps guys this is baby steps the fact that this uh gpu can survive out
Ejaaz:
there dispels the rumors that you know oh you can't radiate the heat or radiation
Ejaaz:
is going to kill the gpu it's it's out there it's been running for two and a
Ejaaz:
half weeks now so this is a very feasible thing uh josh are you excited about this.
Josh:
I'm i'm excited about it it's a great proof of concept
Josh:
it shows like okay shielding works okay heat dissipation
Josh:
works what i really love the most about this is the models that
Josh:
they run uh here on the post that you're showing they trained the nano
Josh:
gpt model from andre carpathy uh to work
Josh:
on those shakespeare things so it's cool like our i mean
Josh:
number one fanboy of andre here he created this like small little nano gpt and
Josh:
now they've created a model in space and there's two models running there there's
Josh:
one that they actually trained and then there's one that they had pre-built
Josh:
that is returning tokens this is awesome it is a proof of concept and it shows
Josh:
that i mean granted i think people have now realized that this is possible but
Josh:
they are actively proving it in reality.
Josh:
And for that, it's awesome. StarCloud seems to be doing cool stuff.
Josh:
I'm very happy with the company, very excited for the future.
Ejaaz:
Yeah, but enough talk about GPUs in space, Josh.
Josh:
Let's kind of like touch. You mean we're going to ground this conversation?
Ejaaz:
I am grounding the conversation. I am touching wood. I don't have any grass
Ejaaz:
near me right now, but I'm back on Earth officially.
Ejaaz:
There is a GPU war going on between our two favorite foes, Josh.
Ejaaz:
The USA, and China. Now, they've had a very tumultuous relationship,
Ejaaz:
mainly because NVIDIA has been restricted from selling their GPUs to China.
Josh:
Which, by the way,
Ejaaz:
Makes up a huge percentage of their revenue every year. So the fact that Trump
Ejaaz:
said no to Jensen was a big deal.
Ejaaz:
Until this week, when he gave the thumbs up to sell not just any NVIDIA GPU,
Ejaaz:
but their second older generation GPU, the H100 or H200 sorry.
Ejaaz:
To China. And it comes with a few stipulations, Josh, which is 25% of revenue
Ejaaz:
that NVIDIA makes from these sales to China needs to go to the USGov.
Ejaaz:
So he's paying a pretty hefty tax on this.
Ejaaz:
And so people were pretty excited. NVIDIA stock jumped up on the news,
Ejaaz:
except on the same trading session in that same day,
Ejaaz:
it retraced because China put out a commentary officially saying,
Ejaaz:
we don't want your gpus and in fact we're
Ejaaz:
going to restrict the amount of h200 gpus that our
Ejaaz:
companies buy from you because they can just use chinese
Ejaaz:
gpus right so that was the response from china
Ejaaz:
saying like listen we don't need it so it was a very volatile uh
Ejaaz:
day in terms of trading the nvidia stock except that
Ejaaz:
then the chinese companies themselves spoke up and
Ejaaz:
said uh hey we're deep seek over here
Ejaaz:
and we kind of need nvidia's gpus
Ejaaz:
because we can't trade oh we
Ejaaz:
can't train frontier level intelligence unless we
Ejaaz:
have those gpus so there's this there's been this big back and forth china in
Ejaaz:
response to that has been like okay let's hold like a council session internally
Ejaaz:
let me talk to some of the companies here and figure out how many h200s you
Ejaaz:
guys actually need and i have a few thoughts about this josh but what's your
Ejaaz:
general reaction before.
Josh:
We get into it. It's funny. So the story isn't the fact that we made them available
Josh:
to China. It's that China said, we don't want them.
Josh:
In fact, we already have them. We have stolen them. We have smuggled them in.
Josh:
So that is a generous offer of you.
Josh:
But hey, we've already been training models on your hardware for a long time.
Josh:
So thanks, but no thanks.
Josh:
And that comes to the surprise of probably no one. Everyone had an idea that
Josh:
a lot of these were getting sent to
Josh:
I suspect what that means is these new DeepSeq models, which have been hyper-efficient
Josh:
in the past, will just become even more efficient going forward.
Josh:
And we've always talked about this constraint that they've had,
Josh:
where they've been resource-limited, therefore they've had to be resourceful on the software stack.
Josh:
In a world where they are resourceful on the software stack,
Josh:
but also have a competitive hardware stack, that feels like a supercharged DeepSeq.
Josh:
And I feel like whatever model they release next is going to be a seriously heavy hitter.
Ejaaz:
Yeah, I mean, there's, it's a few things. There's the performance competition
Ejaaz:
that you just explained, but there's also a strategic political one.
Ejaaz:
And the strategic political one has two sides, okay?
Ejaaz:
So if I'm China, I don't want my Chinese companies hooked on American GPUs.
Ejaaz:
I want them to use Chinese-made GPUs. Why?
Ejaaz:
Because if the Chinese-made GPUs are good enough to create frontier level intelligence,
Ejaaz:
we now have less of a dependency on the US.
Ejaaz:
In fact, it's probably the most important dependency that China has on the US
Ejaaz:
right now, stretching across from raw materials to computer energy to whatever you might be, right?
Ejaaz:
So they want to rely on Chinese made GPUs, not the US made GPUs.
Ejaaz:
On the US side of things, they're thinking of this specific strategy, which is,
Ejaaz:
If we can keep selling China, older generation NVIDIA GPUs, their intelligence
Ejaaz:
will always lag ours and we will always be the leader.
Ejaaz:
The second way to look at that is also NVIDIA has a really sticky software moat.
Ejaaz:
So typically anyone that runs NVIDIA GPUs isn't just hooked to them because
Ejaaz:
they're using the hardware.
Ejaaz:
It's because they rely on the software stack called CUDA, C-U-D-A.
Ejaaz:
I think it stands for Compute Unified Device Architecture, right?
Ejaaz:
The more and more they use NVIDIA GPUs, the more and more they rely on it,
Ejaaz:
Josh. So it's kind of like a drug for them. So this is strategic from the US.
Ejaaz:
They're like, sell them the GPUs, just take a 25% stack.
Ejaaz:
We're releasing Rubin, which is NVIDIA's latest GPUs coming out in 2026.
Ejaaz:
Just keep them hooked on it. Keep them behind. Let's keep them in check.
Josh:
Well, it seems like that's what they're doing. So that's the update on the China
Josh:
front, which is interesting. But there's another update on the hardware front,
Josh:
EGIS, which I'm very excited to talk about,
Ejaaz:
And that is Google's new glasses.
Josh:
Now, I am old enough to remember the Google Glass version 1,
Josh:
which came out probably over a decade now.
Josh:
And at the time, it was viewed as the nerdy Silicon Valley kind of like freak
Josh:
headwear device, and it never went anywhere. It didn't work very well.
Josh:
But all these years later, it appears as if Google has announced that they're
Josh:
getting back in the hardware game, back in the eyewear game,
Josh:
and releasing these classes.
Josh:
So Ejaz, please fill me in. Tell me why these are not going to suffer the same
Josh:
fate as Google S 1.0 or Meta's Ray-Bans, which are still not on your face for good reason.
Josh:
So it's a very difficult thing to build the good eyewear and no one's done it.
Josh:
Why is Google going to make it differently if they even can?
Ejaaz:
So in terms of like specific details, we don't have much information beyond
Ejaaz:
this demo video that we're showing on screen here.
Ejaaz:
They've termed the project Project Aura, which is basically going to be their
Ejaaz:
next gen version of Google Class.
Ejaaz:
And from my initial reaction from this video is it looks very similar to the
Ejaaz:
Apple Vision Pro experience, coupled with a few different features that Meta
Ejaaz:
Ray-Bans kind of introduced in their demo a few months earlier.
Ejaaz:
My take is it's, okay, number one, it's gonna be better than Google Glass. I would hope so, right?
Ejaaz:
From the design of the glass, it looks more casual and applicable to a wider
Ejaaz:
range of waters. It looks a little chunky on her head now that I'm actually
Ejaaz:
looking at the person that's using this.
Josh:
I was gonna say, they look beefy. Those are some chunky glasses.
Ejaaz:
That's definitely way too big, which kind of implies that, you know,
Ejaaz:
assuming this is a prototype,
Ejaaz:
they've got a chunky kind of build-out a physical build-out like the computer
Ejaaz:
running I'm super curious what the sensors look like here how they've been able to optimize for it,
Ejaaz:
aesthetically it doesn't look like the best but functionally it
Ejaaz:
looks pretty cool like again like that Apple Vision Pro experience you can kind
Ejaaz:
of like have several desktop screens across you can access all your favorite
Ejaaz:
apps the number one thing that I'm excited about this Josh is Google has built
Ejaaz:
out a range of different apps and services that I use on a daily basis this.
Ejaaz:
So if I can somehow kind of combine that in with my visual experience on a daily
Ejaaz:
basis, it automatically becomes useful, right?
Ejaaz:
Apple kind of took a step in this direction going from the Apple iPhone to the Apple Watch, right?
Ejaaz:
People didn't have to pull out their phone, they could just kind of like look at their wrist.
Ejaaz:
Google can now have the benefit of like kind of your vision doing this. So,
Ejaaz:
automatically through that, I think it's going to be useful.
Ejaaz:
In terms of viability, I'm going to base it heavily on the Meta Ray-Bans reception,
Ejaaz:
which was absolutely terrible.
Ejaaz:
I think Google has the benefit of being able to scale hardware manufacturing
Ejaaz:
way better or have more experience doing that way more than Meta can.
Ejaaz:
So that's pretty bullish, but it's going to come down to the execution and I'm
Ejaaz:
going to reserve my right to judge for now.
Josh:
Yeah, I'll go on record as being the biggest hater for this product.
Josh:
I think it's going to be terrible.
Josh:
But the thing that I love is that Google's making it. They're working on it.
Josh:
And I'm excited for version three of whatever this is.
Josh:
So whatever they make this year or next year in 2026, this demo,
Josh:
that's not really appealing.
Josh:
Whatever the version two is,
Josh:
maybe the battery shrinks, maybe the glasses shrink. Still not that great.
Josh:
Version three, normally version three of these things start to get good.
Josh:
So maybe 2028 will be somewhere in the reasonably viable glasses world.
Josh:
But it's cool. I'm glad Google's in the game because this is very clearly an
Josh:
important form factor in the future of the way we interface with AI and computers.
Josh:
And there's another company now working on manufacturing them.
Josh:
So for that, it is a win for everybody.
Ejaaz:
And the final item on the docket comes from the open source world.
Ejaaz:
Noose Research, which is a frontier open source intelligence lab,
Ejaaz:
had a really big breakthrough.
Ejaaz:
And by big, I mean really small, big breakthrough.
Ejaaz:
They launched a 30 billion parameter model, Josh, which compared to frontier
Ejaaz:
intelligence models right now, which range from, I think, 700 billion to 1 trillion
Ejaaz:
parameters, this is tiny.
Ejaaz:
Except it did a very big thing. It scored an 87 out of 120 on the notorious
Ejaaz:
Putnam mathematics competition.
Ejaaz:
For those of you who aren't aware of this competition, it is incredibly hard
Ejaaz:
for any of the smartest humans in the world to do.
Ejaaz:
And in fact, comparing its results to the human scores of last year,
Ejaaz:
it would have placed second, scoring a problem set of eight perfect scores, which is just
Ejaaz:
crazy. So the fact that this tinier model packs such a crazy punch is nuts.
Ejaaz:
Now, for those of you thinking, oh, well, it's just a mathematics nerdy model, who the hell cares?
Ejaaz:
Bear in mind that Alibaba spent, I think, upwards of $15 billion in collectively
Ejaaz:
training their latest QEN3 model, which is a pretty amazing open source model.
Ejaaz:
They scored 27 out of 120 doing the same test.
Ejaaz:
So the reason why this excites me is for a few reasons. Number one.
Ejaaz:
Noose Research open sourced this entire thing.
Ejaaz:
So if you're listening to this and you're curious to kind of test this out yourself, you can do it.
Ejaaz:
And 30 billion parameter models is something that you can feasibly run on consumer
Ejaaz:
hardware at home. That's number one.
Ejaaz:
Number two, they did this in a distributed fashion.
Ejaaz:
So typically when you're training a model, you want to build heavy data centers
Ejaaz:
and run a bunch of reinforcement learning, reasoning, stuff like that to create
Ejaaz:
the model. They didn't use any of that.
Ejaaz:
They used a distributed network of compute to be able to create this. So that's really cool.
Ejaaz:
And number three, something that they pioneered, Josh, is something called an agent harness.
Ejaaz:
Basically, the way that this model became so smart is in the post-training phase,
Ejaaz:
where they spun up a number of AI agents, which reasoned with each other in
Ejaaz:
a competitive tournament bracket style thing.
Ejaaz:
And the one with the best solution won and submitted their answer.
Ejaaz:
And that's how they reached this frontier level intelligence.
Ejaaz:
The reason why this is so important is if you assume that compute is the only
Ejaaz:
thing you need to train frontier-level intelligence, this experiment disproves that.
Ejaaz:
This experiment proves to you that
Ejaaz:
you can achieve that same level of intelligence with much less compute.
Josh:
It's awesome they're getting these distilled models to be so powerful.
Josh:
And this is kind of a trend that...
Josh:
Projects towards a loose bear case for ai which is if if
Josh:
you can continue to distill these down into these hyper-optimized
Josh:
models that can eventually run on your phone and does
Josh:
the ai at the edge overpower the ai in the data center and does that mean that
Josh:
the value of these large data centers goes down i don't think so but this is
Josh:
a proof of concept and directionally proving or i guess giving us some data
Josh:
on what that actually means and how that looks this is cool It's a fun project.
Josh:
And the fact that they're doing it in a decentralized way seems interesting.
Ejaaz:
That wraps up the end of today's episode. It was a big one.
Ejaaz:
If you can't tell, Josh and I are slight bulls on SpaceX and Elon's companies.
Josh:
You didn't show off your hoodie. Show off your hoodie. Oh, I didn't.
Ejaaz:
I got my news research hoodie.
Josh:
Yeah, so clearly you see where both of us stand here. Yes. Space maximalist.
Ejaaz:
Yes.
Josh:
Other maximalist.
Ejaaz:
Open source. Distributed.
Josh:
Distributed. Distributed training. Sick.
Ejaaz:
I'm a fan of both. I'm a fan of both. And one thing has become clear to me as
Ejaaz:
we wrap up this episode is that the future of AI is dependent on a number of
Ejaaz:
different protocol layers, Josh.
Ejaaz:
I don't think SpaceX wins without
Ejaaz:
the help of Tesla, without the help of Starlink, without the help of XAI.
Ejaaz:
They all kind of feed into each other and I'm excited to see how this industry builds out.
Ejaaz:
You can bet your ass Limitless is going to be the channel that breaks all this
Ejaaz:
news. I just want us to take a little bit of a victory lap, Josh.
Ejaaz:
We have called out two very important trends months earlier that have become super important.
Ejaaz:
One of them being AI data centers in space, the other one being the Google bull case. Am I missing any?
Josh:
Um, well, another one, we had Blake Scholl on the podcast who does supersonic
Josh:
jets and he just announced a supersonic jet generator for AI data center.
Josh:
So we've been early and we've been right. I mean, granted, directionally right.
Josh:
We first started off as haters, but we've haters of the AI space,
Josh:
but we've changed our mind and we've been covering it along the way.
Josh:
So listen, it might not always be right, but it's always early and you'll always
Josh:
be up to date on everything that matters in this world of AI and frontier technology.
Ejaaz:
Yes. So if you're listening to this and you aren't subscribed,
Ejaaz:
and that is 80% of you, by the way, please subscribe.
Ejaaz:
It helps us out so much. Wherever you're listening to it, it could be on Spotify,
Ejaaz:
Apple, YouTube, whatever.
Ejaaz:
If you're on YouTube, actually hit the notifications button because that also
Ejaaz:
alerts you of the latest alpha. We drop three to four episodes a week. It's awesome.
Ejaaz:
And the final call to action is we have a banger of a newsletter which drops every Friday.
Ejaaz:
And from next week, it drops twice, every Wednesday and Friday,
Ejaaz:
one with an SAE investment thesis on the company that Josh or I are super bullish
Ejaaz:
about and the other highlighting the top five bits of news in AI and Frontier Tech of that week.
Ejaaz:
So you don't want to miss it. If you want to keep up to date,
Ejaaz:
subscribe to the Limitless Ecosystem.
Ejaaz:
We will see you on the next one.