All-In with Chamath, Jason, Sacks & Friedberg - SpaceX's $2T Case, Nvidia's Shock Selloff, America Turns on AI, Trump Pulls AI Order, Bond Crisis?

Starting point is 00:00:00 All right, everybody, welcome back to the number one podcast in the world. It's the All In podcast, episode 274. Sacks is out today, but we're very lucky to have Gavin Baker from Atreides Management joining us, The Spicy Takes Must Flow. Welcome back to the program, Bestie Gavin. Thanks for having me. Always love it. It's been a huge week in tech. We can start with the SpaceX and OpenEI IPOs.

Starting point is 00:00:26 We've got Andrea Corpathy joining Anthropic, Nvidia, crushing it. at so many different places to go. But I think we'll start with Andre Carpathie joining Anthropic. Carpathie is only 39 years old. He's already a legend in the tech industry if you don't know him. I believe he's also coming to liquidity, yeah, Chama? He's going to keynote on Monday morning. Oh, fantastic. No, Tuesday, Tuesday, Tuesday, day two. I think he's keynote. Okay. As is Gavin. Gavin will be there. Founding member of Gavin anchoring day two as well. Excellent. Yeah. This is Gavin's second appearance. Hey, look at those two bookmarks, Andre Carpathie and Gavin Baker.

Starting point is 00:01:00 I mean, poof, liquidity pulls in the stars. Obviously, Andre was a founding member of Open AI. He led the self-driving team. Also, hold on. Gavin is going to help us judge the best ideas section as well. I don't know if you know that, Gavin, but you're a judge. You're a judge. I'm up for anything, man.

Starting point is 00:01:17 I'm easy. Yes. Carpathie also coined the term vibe coding. He recently built auto research. I think we talked about that here a bit. That's an open source training tool. It helps AI models improve themselves by running five-minute experiments. that got over 82,000 stars in GitHub. He did that as a weekend experiment, and all these civilians

Starting point is 00:01:35 started building their own recursive LLMs, really inspiring. And the Andre Carpathie skills is a tool based on his set of principles for Claude Code, and somebody just released that. And so that's just pretty crazy when you think about it. He's going to be in charge of a new pre-training team at Anthropic. The focus obviously being recursive self-improvement. In other words, they're going to have Claude improve itself, and they've already talked a little bit about AI, improving AI over at Anthropic Shemoth. What's your take on this is this super important in 2026?

Starting point is 00:02:11 Obviously, Carpathie is super well respected. He's obviously, you know, one of the true talents in the space. But, hey, we're in a different inning than we were, say, 10 years ago when he was at Tesla or five years ago when he co-founded Open AI. You know what's interesting? If you go back to, like, Google, the culture. of Google, which they got right, was the singular technical talents there, they were singled out and they were called Google Fellows.

Starting point is 00:02:37 I don't know if you guys remember this, like, Comet Single, Shredar Ramaswami, Jeff Dean, these guys are stars. And what's interesting is if you track what folks, particularly Jeff Dean, I guess now, because the other two aren't there anymore, but what they did inside of Google, it's like wave upon wave, they were at the foot of those waves. Well, it's interesting about Andres, he's been at the wave upon wave of AI. He was probably the first person that really commercialized the Richard Sutton bitter lesson essay when he was leading FSD at Tesla, which was really about the brute force computation. And I remember him telling me this story. I don't know if he said this publicly or not, but where he spent a portion of his time, I want to say a quarter of his time labeling data.

Starting point is 00:03:24 Could you imagine like 2016, 17, like hand labeling video data from Tesla's? So he did that, then he co-founder of OpenAI. He's a star, and he's an exceptional human being, and he's super curious. And then what he's done as a kind of a free agent is also quite impressive. So I think that this is a really important deal. I think he's one of these really curious people that can be sent off and they'll just go and invent new things. And I think this idea of recursive self-learning puts these models on a combination of overdrive and autopilot. And so if you put those two things together, I think that you start to, you can potentially live out this idea that there's an order of magnitude improvement on a yearly basis.

Starting point is 00:04:14 So like this new form of Moore's law. So then the model quality just goes absolutely parabolicly, just like this, straight up. A bunch of compute at the problem, and these things learn really quick, I think, is the high-owner bit there, Gavin. What's your take on Anthropics' recent success and their massive hiring binge? The success is extraordinary. It's undeniable. I think the fact that they are now, they were EBIT positive per the Wall Street Journal

Starting point is 00:04:43 in the most recent quarter is a really important fact for kind of the whole AI narrative, because now there's, you know, you could talk about circular funding, you could talk about ROI and we could go look at the RIC of the hyperscalers. But if OpenAI and Anthropic are at, call it $100 billion of AR now with 80-percentish gross margins on inference, like the returns are there. And then if we add in, and they're grown really fast, if we add in Gemini, we add in cursor, we add an XAI, we add an open source. you know, it's not hard to see 200, 300, 400 billion dollars of ARR at the end of this year

Starting point is 00:05:27 at high market. Across all of the language models. And you're talking specifically about the private language model companies, maybe not Google, which is obviously public. I was including, you know, a lot of the returns to this GPU spend have come from, you know, better recommender systems at Facebook and Google, Amazon, better ad tariff. better at measurement. Sure.

Starting point is 00:05:52 So I was excluding that and just narrowing it to LLMs, which I think is just possible definition. And it seems like there's going to be a really strong ROI this year, even excluding what are still some of the most economically important and profitable use cases for GPUs and AI infrastructure. I do think what Carpathie is working on, recursive self-improvement is really important. and unlocking that in continual learning,

Starting point is 00:06:21 maybe the two final frontiers for AI. And just the idea of recursive self-improvement that the model, while it is training, during a forward pass, has input into its training, or another model has input into the training, I think that could be really powerful. And I think Chimoth's statistics,

Starting point is 00:06:47 of, you know, tin-xing every year, you know, might seem conservative if that comes to pass. And then, of course, continual learning is the Holy Grail, where the model learns from experiences the way humans do. And that's something we haven't unlocked yet. And those two combined, I think, would, they might pull the future forward in a very real way. Yeah. And we have right now, Anthropic has a decent lead on everybody else. whether it's three months or six months. Obviously, they're probably six, 12 months ahead of open source. Maybe they're three, six, nine months ahead of their contemporaries. But they have a lead. You put Carpathie in there, Friedberg. Now you have Carpathie. He does recursive.

Starting point is 00:07:31 And at some point, and it may have even occurred at Anthropic, the AI is going to be improving the language model more than the humans in the loop are doing it. Obviously, they're orchestrating at Friedberg. But at what point do we think this, let's call it, super recursiveness occurs? When will we cross the recursive valley? And AI is doing more to build a language model than humans are? I'm not sure when this idea that you feed the whole model into a context window to train itself and build a new model is going to happen. But I think there's probably a lot of different architectural paths that could be walked here.

Starting point is 00:08:14 one of which is this idea that you could make much smaller models and then create networks of smaller models that work together where you ultimately have less energy or less cost per token produced out of a aggregation of models than you did with one single large model. I've said this probably three or four times now. There's a lot of work and a lot of opportunity ahead in kind of re-architecting models and re-architecting how models work together to solve problems. My guess is a lot of leadership that he can bring to exploring those paths. And all it takes is a minor breakthrough and your cost per token drops in half.

Starting point is 00:08:52 That's a tremendous efficiency game that seems very much on the horizon because some of the early papers, I think I shared one from MIT a few weeks ago, indicate that there's a lot of room to run here in terms of re-architecting models and deployment of models. These very small models, small language models, and then verticalized ones, are the future. We've got a company, Abacus that's doing it for corporations crushing it. Everybody's got an interest in doing this. And I don't know if you saw the news this week, Chimov.

Starting point is 00:09:22 It happened about two weeks ago, very quietly. Chrome included Gemini or Google included in their Chrome browser, the Gemini Nano Model, without telling anybody, four gigabytes on your computer. And that's the one that does like proofreading, spelling, auto-complete, all that. So now we have Google. covertly installing this on everybody's operating system.

Starting point is 00:09:46 Oh, hold on, hold on. Covert's a strong word, so let's not use that word. Without telling people, without giving people a heads up. Let's say it in a way that we can both agree. We're in the phase now where I think breathlessly talking about every model improvement is a waste of time. There's no ROI in it. We are on a path of accelerated learning, and we're going to start to see end-user achievements that were here to for impossible, that should be the focus.

Starting point is 00:10:15 So, for example, we were able to solve, I'm just collectively saying we, in this case it was specifically open AI. By the use of a human, and this is important, you know, a math problem that stood outstanding, not been solved for decades and decades. I can tell you in a different example, there are drug candidates that are about to enter clinical trials and INDs that were sitting on the shelf and people didn't think were very viable at all. So we're at the phase now where these things are front and center. They're useful to people. They're increasingly valuable. I think what we should do now is focus on these end user use cases,

Starting point is 00:10:57 because the way that you say it, in my opinion, is part of the problem because it starts to create this boogeyman, us versus them thing. And I'm not saying you're doing it on purpose, but I'm saying this is exactly why I think so many people are becoming sort of like, it's a four-letter word now when you mention AI because it's presented as this thing. And I think we have to present the other side of it, at least so that people have the data. So I don't think Google's in the business of doing shi or shady things. They're not that company. There are other companies that would. referring to your alma mater? I'm not going to say which ones, okay? But Google is not that company. So I think that the reason they did it was probably because there's user utility. And my point is we should focus on the user utility because I think that's the story

Starting point is 00:11:43 we're telling from now on because I think we, collectively, the four of us, can responsibly tell both sides of the story in a well-balanced way because I think nobody wins if we become bloodites and go back in time. Yeah. And I think that if we don't, if we're not careful with our word, that's what will happen. Yeah. And by the way,

Starting point is 00:12:01 obviously not a Luddite, but this is what has been reported by a lot of folks that people were surprised, shocked when they saw the size of the model being done in the background

Starting point is 00:12:14 and it has triggered some people looking at it around privacy. And I do agree that Google is not a bad actor in the space. So probably a speed era more than anything,

Starting point is 00:12:26 I would say. Maybe just, two things. There's attorney maxing, and then there's attorney maxed, and Google is probably attorney maxed. It happened for a long time. And the second thing I would say is,

Starting point is 00:12:42 I do think it's incumbent on all of us, has Americans who are involved in the technology industry in one way or another, to be advocates for the positive, optimistic possibilities that AI introduces to everyone on this world, because it is starting to feel or seem like there may be a CCP-funded campaign against AI and data centers in America. And that's very logical for China, but it is not good for America.

Starting point is 00:13:16 And so I just, I think it's, we all have responsibility is what I would say. Yeah. Who do you think is doing a poor job at that and responsible for this? Is it Dario with his constant, hey, everybody's going to lose their job? Who's responsible for this? Is it the CEO is blaming AI for their layoffs? What's your take on this, Gavin? Look, hold on a second.

Starting point is 00:13:39 Everybody is trading their own book. It makes enormous sense for Dario to try to create the boundary conditions for a regulatory moat because he will be inside of the tent pissing up. He's big enough now. And if you notice that a lot of the breathlessness has ramped up, and Jason, we've talked about this, you can annotate successive rounds of fundraising and successive scale with the volume. So I think that it's a reasonable business strategy. And I think that he's quite clever.

Starting point is 00:14:12 And I think that, look, if you actually, and I do this, if you actually just have a Nash bot, a Nash agent inside of Klaude, and you ask it what it would do, it would come up with this strategy. And meanwhile, there are other versions of other. counter-stratologies and counter-exploitative strategies. The point is that each CEO has a clear incentive. They're operating at such a level of scale that they're just reading their own book. So it's up to us to take a step back and actually see the forest from the trees. I think, Nick, can you find this? There was a clip of Sham Sankar, friend of the pod, fabulous guy, the CTO Palantir. And he was, I think he was on Fox News. And he said, stop breathlessly asking these

Starting point is 00:14:53 model makers what they think. Go to the end user and ask the person in the factory that's using the model and ask him what he or she thinks. Ask what the doctor thinks. Ask what the scientists think. And start to tell those stories. That's what we should be talking about. Yeah.

Starting point is 00:15:08 And Gavin, you were, I was sort of asking you your opinion on what's who's causing this? And then what's the solution? Like, do you have folks you think in the industry who are representing it particularly well? we can point out, hey, Yuan has said we're going to move to a world of incredible abundance and working will be optional. I think that's on the margin a little scary for people to hear because they hear no job. But he does say, hey, universal basic income is probably going to have to come into, you know, place. He said that multiple times. You have Dario, according to Chimah, talking his own book, scaring the bejesus out of people in order to get regulatory capture.

Starting point is 00:15:48 What do you think is going on here? And how do we do better as an evening? industry. I think Jamath outlined like a very viable and positive path forward, where just, you know, real people who are not, you know, at the tip of the spear, these are the positive impacts the AI's had on my life. I was at a, I was at, I was in an event maybe 10 days ago, and someone who runs a hedge fund, his daughter was born with a very rare genetic mutation that effectively would have normally condemned her to a life devoid of joy, meaning everything, the neurons in her brain were not firing. So she wouldn't, you know, who knows what her life expectancy would have been or what the quality of her life would have been. And it's a tragic disease. He said he didn't accept that as an answer.

Starting point is 00:16:41 He found, he did an enormous amount of research with LLMs and found an existing safe drug on the market that they thought would have a meaningful impact on his daughter's condition. And it did. It took, I think, the percentage of times the neurons were firing was 30 or 40 percent, and it took it up to 80 or 90 percent. And that means that she can live a normal life. She may not be as smart as she would have been, but she can live a normal life. And he's now figured out how to use AI, how to further tailor that drug.

Starting point is 00:17:15 And, you know, there have been all sorts of advances. and protein design, et cetera, et cetera. And he's reasonably confident he's going to have a drug in months that is a complete care. And that's just one person, one dad was unwilling to accept defeat for his daughter and who changed her life and the life of everyone else with that disease. And we tell those stories. So I think Elon's doing a good job, a future where work is optional. I think that sounds great to some people, you know, scary to others.

Starting point is 00:17:46 you know, a four-day work week, you know, I think it's probably something that sounds good to a lot of people. I think Jensen is doing a good job of being an effective advocate. And I do think anyone who is trying to drive reggae, I just, we need to stay focused on the positives as well. Yeah. Freeberg, what's your take here on the AI PR crisis, if we'll call it that? we had three different commencement speeches that were booed. Eric Schmidt being one of them, two other ones by maybe less notable folks. When you hear young people booing AI, vociferously, why are they doing that, Freiburg?

Starting point is 00:18:29 And what's your take on the overall PR problem and how to turn it around? That's a, there's a long answer to that question. It relates in some ways to your concerns about socialism and polarization. What is the long answer? What's the long answer? I mean, that's like, why do people hate technology? Why do they hate? This technology, they love their phones.

Starting point is 00:18:59 They love the internet. This technology they hate. I think that there's like an underlying view that technology creates leverage for a small group of people, which creates power imbalances. And nothing represents that more than AI. that a small number of people that control and profit from and benefit from AI are going to end up getting outsized returns relative to the broader population, that the time to diffusion of the technology, because ultimately all technologies like commoditize and diffuse, but the time to diffusion here is such that it's going to be like extremely asymmetric for society.

Starting point is 00:19:45 and I think that there is something fundamental about that. It's like nuclear bombs, I think, really created this moment in people's minds in the mid-20th century that by the back half of the 20th century gave everyone a high degree of skepticism about technology and science generally that those who have the knowledge and those who engineer solutions with the knowledge can create outsized advantages for themselves and it puts the rest of us at risk, the rest of the world, the rest of the population at risk. And because those questions about when does this benefit me, how does it benefit me can't be answered today, the economic benefit that's accruing to the few today becomes the narrative. It becomes the

Starting point is 00:20:26 story and it becomes this like power system that a few people take from the many. And so there's something deeply disturbing for the average person about that. They don't understand how it works, why it works, what it'll do for them, when it will do it. And all that they're being told is that some people are making trillions of dollars. So I think that it's pretty obvious why this has got such a backlash. Secondly, I think that there's a deep amount of external energy that's fueling this anti-technology sentiment in the United States and has been for decades. I think to Gavin's point, I don't think it's just China with NGOs today. I think that there is a long history of state actors intervening in media activities in foreign nations to try and create the sentiment

Starting point is 00:21:11 and fuel a sentiment that reduces progress in that competitive state. I think this goes all the way back to KGB design during the Cold War, and it's been refined and honed and improved over time. This is not just some conspiracy theory. There are plenty of great books about this. The techniques of what's going on specifically today, I don't know enough. I don't have any great details on that.

Starting point is 00:21:35 But I don't think that there's no foreign interest in seeing technology advancement slow, in competitive nations. The United States probably does similar things to other nations. And I think that that's probably a key part of this. And then I think this third piece is, like, when the Copernican revolution happened, it was a mind-fitting. You know, like, heliocentricity was a totally new way of thinking for humans, and it was deeply disruptive to the church.

Starting point is 00:22:04 And it was deeply disruptive to the power centers, which were the centers that could tell people, Earth is at the center of the universe, we're in control, we're the direct channel to God. And the idea that the sun is at the center of the solar system and we spin around it and we're a tiny speck in the universe was very hard for people to grasp. There's something about AI that's very like not human-centric.

Starting point is 00:22:27 And it kind of shifts and fucks with the ego of the human, it's almost anti-humanist. And I think that that's like a deep psychological current for a lot of people and their disdain for this technology. It fuels it. the cause, but I think it fuels it. So I think there's a lot of complicated aspects to this J-Cal. You know, I don't think there's like a simple put, put Sean on a podcast and he'll

Starting point is 00:22:49 solve the problems with AI right now. I think that there's a real set of shifts happening. And there's a real set of global competition underway where, you know, various state actors and interests are competing with each other. Trier, do you think that we should slow down? I don't think you can. No, no, no. Do you think we should slow down?

Starting point is 00:23:10 No, I think I was just talking to some people on a zoo. right before this. But I think after the Manhattan project, the research labs were stood up to maintain our scientists that worked on the Manhattan project from effectively leaching back or leaking back to Russia and Germany and other places that were adversary to the United States. And they all were against the nuclear bomb. They worked on it because it was necessary for the United States security. But then when Russia got a hold of the secrets, they were leaked because people were worried that if the U.S. had all the power, there would be no counterbalance to the power. And so the nuclear secrets were leaked to Russia for that purpose. Then when Russia had the nuclear

Starting point is 00:23:50 secrets and they began developing hydrogen fusion bombs and it was clear that they were going to race ahead. The United States raced ahead with developing nuclear bombs as a counterbalance to Russia. When the proliferation began, there was no stopping it. It began and you had to have this balance in the world. Otherwise, you have effectively. an asymmetric power that can do whatever it wants globally. I think there's that moment in the world right now where if the United States does not advance its AI technology, the availability of it, TBD industry, taxation,

Starting point is 00:24:25 all these things that we're talking about doing, there will be someone else that will. And if someone else does, we can go through what would happen. There's a complicated game theory on this, but what would happen if China had sufficiently advanced model and sufficiently advanced, a scaled deployment of those models relative to the United States,

Starting point is 00:24:44 as you do that analysis, you realize, wait a second, that's probably not a healthy place for the world to be. It's also probably not a healthy place for the United States to be the only one with AI. And so I think what we end up seeing

Starting point is 00:24:55 is if we do try and slow down AI, we kind of lose this moment of balance that's necessary when you have a technology proliferation like we saw with the arms race after World War II, that, you know, we're going to see again here. Jamath, you, I think, bring up a good point. You know, should we slow it down or could we slow it down? There actually have been some discussions about ways to do this.

Starting point is 00:25:21 One of them would be, hey, with self-driving, people are scared that all these cab drivers are going to lose their jobs, Uber drivers, cab drivers, bus drivers, truck drivers. This is, you know, over 10 million people in the United States driving things for a living. Would you be in favor of some of the announcements that? that that will be a paste rollout. It won't happen all at once. In other words, those people will be giving some amount of job security to stay behind the wheel with it. Another example that's been given is if you put Optimus into Amazon factories or the figure robot just did like a week of just sorting packages. I'm sure everybody saw that video. We'll insert it here. That figure robot sorting things,

Starting point is 00:26:01 hey, if Amazon deploys those, there'll be a tax on those per hour and will tax humanoid robots in some ways and then use that for, say, retraining people. Those are two very specific conditions and approaches that people have been promoting. Do either of those resonate with you in any way? I think it's interesting that in all of those discussions, I've yet to see an actual survey of only the truck drivers and only the package sorters. The question that I would have is, do the people that do these jobs want these jobs? and if they do, then there's a reasonable claim to make to keep those jobs the way that they are.

Starting point is 00:26:39 If you're saying this is the job that I do, I love it, I'm able to provide for my family, great. That's a very different argument than, well, you know what, Amazon has 35 or 40% churn inside of their warehouses. And we should probably ask the question, why is that? Because if it was such a great job, I suspect the churn would be 3 or 4%. So what exactly is it that we want to protect and have you asked? them. And I think that this is just, again, a bunch of people in the peanut gallery who want to take a moral high ground and try to make some other group of people feel guilty or feel bad. At no point are we actually asking the conversation that we should be having, which is,

Starting point is 00:27:22 it's interesting to me that there was supposed to be an EO, a presidential executive order that was announced today, and then it was pulled, it was scrubbed at the last minute. Did you guys noticed that? And yesterday, what was leaked was everybody that was attending. It was all the big Neo Labs CEOs and it was all the big hyperscaler CEOs, including, friend of the pod, Nikeshura, shout it to Nikesh. And then it was scrubbed an hour ago. Why was it scrubbed? And the president said that there were aspects of the bill that he didn't agree with. And as far as we can tell, the aspects would have required some amount of supervision, insight review from the federal government. language models specifically of these frontier models is what I read?

Starting point is 00:28:05 Not language models, just of AI, because there's going to be many different kinds. They're not always going to be language models, but of AI. So look, I think Freeberg is right. We are in a proliferation with China. I think it's actually good that China is less than nine months behind us. I think it allows us to find a detent where we have a certain magnitude of capability that they also have, and that allows all of us to then seek peace. and abundance. And the fact that we are orthogonal societies, we are organized differently,

Starting point is 00:28:36 increases the probability of finding peace using the René-Girard kind of framework of memetic theory than if it was like us and another country that was exactly similar to us. So I think what we need to do, we probably need KYC. I think that that should be something that us and China get together and say, you don't want it to get into the hands of people. You can't control. You probably you already KYC those models anyway inside of China, you already review those training runs before you allow these models to get released. We already know that that's happening. Yes. So we should probably do some sort of KYC so some crazy person doesn't create some biological weapon. I think that those are some reasonable ground rules. But otherwise, Freiburg is right. You have to take a little bit of

Starting point is 00:29:19 a deterministic view here, which is that we are in this existential race and we need to get to the place where each of us, meaning us and China, can look each other in the eye and say, all right, weapons down, so to speak. Kevin, I'm going to hold you to answer two questions. One, should we run frontier models? Because that's specifically what was mentioned in the leak about the EO frontier models, the powerful ones. Should they be run through some sort of testing before they're released?

Starting point is 00:29:46 And should there be some regulatory framework for that? That's my first question to you. Yes or no question. And then you can explain your answer. Jeez. Like, I just think it's such a complicated topic. It feels we're a little early for that. I don't love the idea of the United States doing it and no one else doing it.

Starting point is 00:30:13 Like I think in a world where we hold hands with China, like I think that's much more palatable and we are aligned and we trust each other and have kind of verification capabilities. Great. Yeah. Let me then rephrase it. Should China in the U.S. come up with a simple battery of things that have to be tested before these go out, including bio-weapons, terrorism, and that genre of, and that vertical of just really known dangerous things, just like the FDA might test for poisons or contaminants in a food or a drug? Would you be in favor of that? I'm curious. So a few things, like the one thing that's great about America is there is, or one thing that's just, we have other forms of regulation. Self-regulation, sure. We have self-one, we have self-regulation. Also, we have the courts.

Starting point is 00:31:08 And if an AI model company behaves irresponsibly, they know that there are ways that people who have been harmed can seek recourse. and so we already have a system that encourages responsible behavior on the part of the model makers. That's a great point because Open AI is being sued right now by a kid who killed themselves after talking to Open AI's model. So you're correct in that, yes, after the fact. And we'll see, we'll see more of that. I just, you know, to me, once you give something, give a power to the government, it's almost never taken back. And it tends to grow. And it's kind of a one-way, a one-way path.

Starting point is 00:31:51 One-way ratchet. Yeah. And then that's a second question then. Chumath was saying, hey, nobody listens to these cab drivers or maybe the people sorting the packages. Do they want the jobs or not? Actually, the UK, there was just a 60-minute special. And UK and also Boston and New York are pretty adamant that they want humans to stay and they want to ban self-driving in those locations or severely limited or maybe limited. in some way to let those people keep their jobs, how do you feel about that possibility?

Starting point is 00:32:21 Is that something you think society should be open to some gradual licensing? They're going to get sued for wrongful death. When somebody runs over somebody else and you could have implemented a solution that has a zero death rate, that's very different from package sorting. Go talk to the package sorters is what I say. Go talk to the people inside the Amazon warehouse. Ask them what they would rather do at Amazon. Ask them.

Starting point is 00:32:44 Yeah, sure. But Gavin, what are your thoughts here? either one of those examples here. I think going to a city where you can't get in a Waymo or a cyber cab is going to feel barbaric and unsafe. I agree. Strongly agree. I don't know if you remember, but the early days of Uber, sometimes you go to a city where there was no Uber. Yeah, it would be incredibly frustrating. Well, I'm not going to come back until they have Uber. It's so inconvenient. And I think, so whatever individual municipalities decide, I do think, one, Chama's point is really powerful. There's,

Starting point is 00:33:16 50,000 automotive deaths per year in the United States, if I recall correctly, and a million globally. And, you know, that's not tolerable. And there will for sure be wrongful death lawsuits. And then just from a convenience and quality of life perspective, I just don't think it's going to persist. And that's another great thing about America is, you know, you have this patchwork of different states and municipalities and each one doing things in a different way. and I'm not suggesting that's good for AI, but it does tend to, you know, has historically, the curly effect aside led to, you know, I think more positive outcomes where cities and states compete, the curly effect being done.

Starting point is 00:33:59 It is, yeah. Yeah. This is a really important point you're making, Gavin. With flock safety, as but one example, we had an AI, there's an AI tool called Flack Safety. It's cameras that use AI, monitor people who are committing crime. There's a privacy issue around it. It is bottom up.

Starting point is 00:34:15 You just do it by town. It's not top down. And states can regulate it. Same thing will probably happen, what self-driving? And states will probably have some say in how AI is deployed, even if maybe some centralized governments don't want to do that. I really think this only comes down to. The Fox safety thing, I think it's so good, Jason.

Starting point is 00:34:33 Crime is now a choice. Yeah. You know, I think the Cambridge City Council voted to turn off gunshot detectors two days ago. Wait, which city did that? Which means I said about how old? Cambridge. Cambridge. That's the place where Harvard is.

Starting point is 00:34:48 That's the place where Harvard is. So the geniuses coming out of Harvard in that town decided gunshot detection shouldn't occur. You don't want gun detection. It's wild because, you know, there's a theory that it disadvantages, you know, that it might lead to an illegal migrant who's shooting a gun being apprehended and we don't want that. Got it. At A16Z had a great essay on flock. We can really, really solve crime, and it's just a choice.

Starting point is 00:35:20 In different states and municipalities, we'll make different choices to be pro-crime or anti-crime. And I'm sure they don't cast it as pro-crime. There's some sort of moral or ethical reason. They're making that choice. But people will vote with their feet over time, and then voters will vote with their votes. And we'll see what works. Have you guys been to Vegas recently? My wife and I went to visit Vegas, and we spent the afternoon with Ben Horowitz and his wife, Felicia.

Starting point is 00:35:48 She has done this incredible job with the Las Vegas Police Department. It is one of the most impressive things I've ever seen. And to your point, crime is an option and they've said no. So what happens there is they have gunshot detection. They have drones that get deployed off the roof of the police building. We were sitting inside of Mission Control where you see it happening, Jason. If something happens, they have eyes. on site within minutes, they can track offenders and bad guys all the way to wherever they're

Starting point is 00:36:16 hiding. And you walk out of it and you feel incredibly safe, like they're really on top of it. And when you understand the level of investment, it's not, it doesn't take billions of dollars. It's de minimis compared to the cost of the crimes. It's de minimis. It's de minimis. Especially when compared to the cost of the crime occurring. Exactly. If you gave the Las Vegas police department, $30, $40 million a year, it would be the safest city in America, and that's all it would take. Yeah, exactly. And for the privacy concerns, Freiburg, there are very simple solutions to this.

Starting point is 00:36:46 I am a privacy advocate myself, of course. We all want some level of privacy. I had the Flock CEO on this week and startups twice in the past 10 years. He's very considered. And the way they do it with Flock is they allow you to have a rolling database. And I think there's a maximum you can save the license plates for. they don't do facial recognition. I don't see why not, but let's put that aside. You can only keep it for two or three years. And then they insist on having an audit trail in it. So there are all

Starting point is 00:37:13 little things you can do on the back end to protect privacy with auto trails, et cetera. We got a lot more to get to in the docket. I just want to just give my final thoughts on what we're talking about here in terms of the AI problem and the PR problem. I think we have to recognize that the layoffs that are occurring in big tech and in a lot of these places are not just the blow. voting issue anymore. And I'm just going to point to two factors that I think are scaring the bejes out of people. And we just have to admit that this is occurring, as opposed to, we've been debating it here. Is it occurring? Is this just cover? And are we AI washing? The first one I want to give you an example of is Matthew Prince, who's the CEO of Cloudflare,

Starting point is 00:37:52 incredible company, public company. Two weeks ago, I laid off more than 20% of my workforce. I didn't do it because CloudFer is struggling. We posted record revenue growth, have strong free cash flow and are adding an unprecedented number of customers, yada, yada, yada. And he says, basically, he's getting rid of measures. Measurers are the people who manage people and who measure data. And he just says, we're getting rid of all those people. They're unnecessary because of AI. And we'll be adding to people in other positions. At the same time, Zuckerberg did another round of layoffs. And they were done in a way that people felt was not considered. And a bit what's the word?

Starting point is 00:38:34 Dystopian? Dysopian, thank you, sir. He did him in a pretty dystopian way. Here's Zuckerberg for 30 seconds. In general, the average intelligence of the people who are at this company is significantly higher than the average set of people that you can get to do tasks if you're working through the contract, through these contractors. So if we're trying to teach the models coding, for example, then having

Starting point is 00:38:59 people internally build tools or solve tasks that help teach the model how to code, we think is going to dramatically increase our model's coding ability faster than what others in the industry have the capability to do who don't have thousands and thousands of extremely strong engineers of their company. Okay. So what Zuckerberg did at the same time, concurrently, he told everybody we're laying off these 8,000 people. A lot of those people are incredibly talented. Some of them are on H-1B visas, creates all kinds of chaos for them in their personal lives, and obviously they're having record profits there as well. At the same time, he was laying off those 8,000 people.

Starting point is 00:39:37 This is after tens of thousands of layoffs before, which were obviously because of bloating. He said, we're putting recording software on every single person in the company's computers to study and train our model, and people were like, oh, and previous people said, I built, during the AI hackathons they had months ago, I built all this AI tools to make my job more efficient and then Zuckerberg laid me off. So the now, the perception people have now, and it's quite correct, I think, is the most you can hope for here is you keep this job for some amount of time and train your way out of it and hopefully there's some more work for you, but they're studying you. And Zuckerberg just said it plainly there, hey, we're going to study

Starting point is 00:40:16 everybody here and that's going to lead to more replacements. This is scaring the bejesus out of people and we need to have an answer for it. Yeah. I thought the Matthew Prince's note was horrible. Okay, explain. This was like from the PR school of retards. Okay, here we go. You could not have written a worse memo. It's like you reduce humans to a label called the measureer, and then you're like, I'm going to lay off all the measurers.

Starting point is 00:40:45 I mean, I just think that part of this, again, I'll go back to the, and maybe the Sham Sankar quote that I'm thinking about should be extended beyond the model makers. Can you just play this for one second? And I'll tell you why I think this is just so. And then we'll go on to the S1 from Space 6. We're listening too much to the inventors of AI. I know that's appealing. They're geniuses.

Starting point is 00:41:06 They're smart. We need to be listening to the frontline factory workers who are using AI saying, wow, I was able to add a third shift. I was able to hire more workers or the ICU nurse who says, I have more time to spend with my patients. I'm able to ensure they don't code during a shift change. So look, my point is like the first part of what he said applies here, which is who cares what Matthew Prince thinks?

Starting point is 00:41:26 because the reality is that if this is the way that you're going to message something as critical as this, I think you did a horrible job. And now you label these people and you put a scarlet letter on their back. So now when they try to get a different job, they're like, oh, you're one of the Cloudflare measurers. How does that help anybody? It didn't need it to be done this way. There's enough of these tech CEOs that are now public. You can hear them.

Starting point is 00:41:48 You can understand them. And I think what we're learning is, man, they're really good at one thing and they're not necessarily as good at all the other things. Yeah. Okay. And so I would say, shut the fuck up. Get behind the keyboard. Just do your job. And if you need to manage something, just manage it. But don't write these misses. You're terrible at it. All of you. You're all terrible. You suck at this. All right. End of my TED Talk. Thank you for coming to my TED Talk. Thank you. Thank you for coming to Schramat's 18 minute TED Talk. And we'll keep moving on. Sorry. And sorry, when everybody gets upset, this will be why. I mean, I do think the Zuckerberg viz and Jack saying, you know, hey, we're going to have half as many people.

Starting point is 00:42:30 Everybody reports directly to me. This is all building this fear in society. And I think people are rightfully scared. If the people building it tell you be scared, your job's going away. Wait till the next regulatory filing comes out from these companies and they authorize a massive share buyback and an increase in their dividend. Yeah, and their cash pile grows. All I'm saying is there's a right way to do this, make these decisions. And then there's a wrong way to do. it, which is to message it in the way that they're doing it. So whoever is running PR and comms and approves and reviews these things are really shit at their job. They don't understand the moment. Oh, some breaking news here. It looks like Anthropic has hired three more people. Here we go. Oh, here we go. Personal job news from Sam Altman. He'll be joining Anthropic. I see. That's pretty good. Who else is joining Anthropic? Let's say we checked everybody's socials.

Starting point is 00:43:23 Oh, Tucker. Tucker. Tucker also joining Anthropic. He'll be doing their PR and podcasts from Anthropic headquarters. And who else? Oh, Chimmas. Well, it looks like you put five pounds on. And this is not how I, first of all, this is not, this is not what I look like. And did you get five pounds? Looks like the six-back straw. Are you not wearing underwear? He's not wearing underwear and he's wearing his khakis. But I think it's just he trying to not show off those scrawnys, those scrawnys. those Ronnie splints, those little slats he calls legs. He's covering them up now. Hold on. I don't want to leg shame you.

Starting point is 00:43:59 I knew that this was going to come up. I'm going to send Nick, an updated picture of my legs. And you can deal with this. You can Photoshop your legs all you want. I didn't, I didn't photoshop. You look like Osridge, brother. Those are not going to do. There's not been dogs today.

Starting point is 00:44:12 Mal legs. They may not be photoshopping. You may have been leg maxing. He could be like. I've been leg maxing for two years. Are you BP 157 in your legs? What are you doing? First of all, first of all, I'm six foot two, you f*** goons.

Starting point is 00:44:25 Okay, so. Gosh,idge legs. All you little people, you know, Jason, you're five foot. So, you know, your ability to have a good day with my platforms. Your ability to have legs is different because, like, my muscle mask won't show on my legs the way it shows on your leg. Oh, I don't think you're helping. You know what he's doing there? Freeberg, you see it, right?

Starting point is 00:44:45 Look at how sprang of the calves are. And then look at how he's doing. Oh, my God. That's a pushup bra for your quads. Oh, my God. That's the equivalent of a push. He has those Bonsu balls. He put Bosu balls under his hammies.

Starting point is 00:44:57 You did it. You're using fillets to pump those up. I lifted my legs and I flight. Okay, you know what? Move on. You know, I would just say, I think we should give credit where credit is due. Yeah. DeMoth's legs.

Starting point is 00:45:08 Better. Both has been doing a lot of work on his legs. Thanks, it's better. Thank you. It's better. I'll give him better, but I do think that he's pumping him up here. Okay. Let's keep going here.

Starting point is 00:45:18 All right. Topic two, SpaceX just filed their S-1 on Wednesday. They are aiming to raise 75 billy at a $1.75 trillion with a T valuation. This would be the largest IPO ever by more than double Saudis or Ramco, $29 billion IPO a couple of years ago. Listing is expected mid-June, likely June 12th, ticker will be SPCX. We got a lot of interesting information in the S-1 teardown. Obviously, SpaceX has three main business units.

Starting point is 00:45:49 Starlink is the money printer right now, but there is a second one that's emerging. Starlink did 11.4 billion in revenue last year on 50% growth with 4.4 billion in operating income. Over 10 million people are now subscribing to Starlink. That business could easily be hundreds of millions of paying subscribers. So that's a lot of growth potentially there. The space business is but $4 billion in revenue. It's growing 17% growth, which would still be strong growth,

Starting point is 00:46:19 but had $650 million in operating loss. A.I. did 3.2 billion in revenue. That's more than double year-over-year growth, but it had $6.4 billion in operating losses. SpaceX had $20 billion in Kappa spend last year, over 60 percent was for the AI compute buildout. And obviously, they were trailing, Anthropic and Open AI and Gemini in terms of XAI playing catch-up. And he did a big reboot of that, as we saw on the Twitter. But here's the big one. EWS, Elon Web Services, as we call here on the All-InPod has exploded. Anthropic is paying SpaceX, wait for it, $1.25 billion a month to rent out Colossus 1 and parts of Colossus 2. It's a $45 billion deal over three years,

Starting point is 00:47:06 $15 billion a year. In other words, they added a Starlink in terms of revenue to the party, plus if they buy cursor, that's going to add another $2 or $3 billion to it. Not if. I already told you they already bought. Okay. I'm just trying to, you know, dot the IS&Ts here. But when, they buy a cursor, that ends to a $3 billion. That's not in the S1. That's also growing and doubling. Yeah, that's probably growing 2x year over year. And who knows how much faster will grow. Polymarket, 71% chance. SpaceX closes its first day of trading with a market cap above $2 trillion. Thank you to our partner, Polymarket. I'll stop here. Gavin, you've been involved in the company for a long time. Shemap, you, I think we're a big investor in the satellite company.

Starting point is 00:47:51 that became part of Starlink, which is the revenue driver there. So you both have a lot to say about this, Gavin. Your take on the S-1 and I think specifically Elon Web Services. Well, I think what's important about Elon Web Services does make me laugh. But $15 billion, that means the AI business right there is going to quadruple. It has already effectively quadrupled. I think what's important about that is there's a stat in it that for, I think, Their first data center was 122 days,

Starting point is 00:48:22 the second one, it took them 91 days. The third one was, I think, 66 days. They build data centers dramatically faster than anyone else at a lower cost. And now that you have a clear off-take partner, and I would expect partner to become partners, there is no reason. They can't start stamping these data centers out, really fast.

Starting point is 00:48:51 And having watched Jensen for a long time, it is important to Jensen that has GPUs be used. And so GPUs will be allocated to who can plug them in, turn them on, and start converting electrons into tokens. And so I think this business can grow dramatically faster than I think, you know, maybe what anyone could have contemplated three, you know, three months ago. but $15 billion from Anthropic is extraordinary.

Starting point is 00:49:22 Important note, it can be canceled by either party with 90 days notice. Just want to make sure we also have that in there. So that means Elon might want his compute back or Anthropic may find another solution. So they do both have an out. And I think that's a, you know, I think that's probably an important provision for everyone. But I think the other thing that came out this week, which was not in the S-1, Nick, can you throw up the Pareto Frontier and maybe don't include the email

Starting point is 00:49:48 and the names and everything, but the Composer 2.5 stat? I think this is really extraordinary. So Cursors Composer 2.5 model came out this week, and I mean, this is Pareto-dominant. And this is just, you know, three, four weeks of doing reinforcement learning on Colossus 2 with Cursors' data.

Starting point is 00:50:13 and cursor has, we will never know, but cursor allegedly has more tokens of coding data than exist on the public internet. And that is a stat from, I think, more than a year ago, so I'd imagine it's grown significantly. And I think cursor and Anthropic probably have the most proprietary tokens of coding data. And what this jump from Composer 2 to Composer 2.5 showed us is that when, you do an appropriate amount of reinforcement learning using that data, let alone injecting it into the pre-training of a new base model, because Composer 2.5 is the same base model as Composer 2,

Starting point is 00:50:56 which is Kimi K.25. This is amazing. This is three or four weeks, and it is Pareto dominant, the Pareto-front here. If you draw a curve of the blue dots, you can see Composer 2.5 is literally, well outside the Pareto Frontier. And that's after three weeks. And what's going to happen next is you're going to have a new base model

Starting point is 00:51:22 with a cursor model in it. Then the cursor model REL using the biggest coherent compute cluster in the world. And I think this is, I think this may... It's significant to you. It's extremely significant for X-AI and cursor. And it's,

Starting point is 00:51:43 The cursor was dead in the water in terms of access to compute, and they were falling very far behind Codex, Google, Anthropic, and then Elon let them on Colossus, and boom. Instantly, their models are growing faster, and this could be, we could be sitting here a year from now, and they're the dominant player. And could we be sitting here, Gavin, in a year? and Elon is selling compute to Google and Open AI. Is that a possibility or not? Well, I think it's much easier to see him selling compute to Google. And I think there have already been posts about that. And for sure, Google is going to want to be part of orbital compute.

Starting point is 00:52:31 You know, it's very funny. The only people who are skeptical of orbital compute are those people who are not involved and data centers are space. Google, Anthropic, Amazon, Nvidia, they are all very convinced that orbital compute is going to be reality

Starting point is 00:52:48 and obviously SpaceX is extraordinary well positioned for that. But I do think that Composer 2.5 DataPoint is really powerful. Keep an eye on it. Yeah. And the other thing that's come out is GROC built.

Starting point is 00:53:00 So what GROC lacked that a lot of other models had, and I do think it's important to remember that the newest version of GROC 4.3 is on the Pareto Frontier for all Frontier models. And you're either on the frontier or you're not. And the companies on the frontier are XAI with one build of Groch 4.3,

Starting point is 00:53:20 which is a 500 billion parameter model, Google 3.1 Pro, and then OpenAI Anthropic. And that's it. Those are the companies on the frontier. And at the Four Horseman, Google, today, each have one dot on the Pareto Frontier. And obviously, you want as many dots as possible. but GROC lacked a harness.

Starting point is 00:53:40 So, Claude had Claude Code code, Open AI had codex, and now with GROC build, there is a harness that is available to GROC, and, you know, as I'm sure. A downloadable app to translate into English that has integrations to all your favorite stuff, whether it's Notion, Gmail, Slack, et cetera. And if you don't have that, it's just like using a basic chatbot from a year ago. So now they have their downloadable. it's in market, and they are cooking with oil on it, and they're playing ketchup, but they're moving fast. And it's more than just an app. It's a runtime. It's an environment. It manages state,

Starting point is 00:54:15 it manages memory. It makes these models dramatically more useful to the extent that I think the people at the frontier all agree that the harness is essentially as important as the model, especially in an agentic world, and the harness and the model need to be developed together. So the release of Groch Build and the pace at which they're iterating is, I think, also really encouraging. So now you have cursor, you have the cursor data, you have a clear existence proof that the cursor data is really important because Composer 2.5 is now Pareto dominant and the most selected model on cursor. And that's also important because, you know, these evals don't capture everything. You know, this is why people on X talk about the vibes. and the vibes on Kirsher 2.5 are also really good.

Starting point is 00:55:04 They're immaculate. We're together with Groch Build. I think these are really important developments. Yeah. Elon was incredibly frustrated by the state of affairs at XAI. He was very public about that, and he's less frustrated now, and he's shipping a lot faster. And so I think that says something, and he has been very focused on it. Freeberg, your thoughts on the SpaceX IPO?

Starting point is 00:55:30 and what this collection of companies might look like a year or two from now, especially if, like many people believe, Tesla and SpaceX merge, what do you think of dollar sign E-L-O-E-L-O-N as an entity and what impact it might have as if those two were put together, the market cap, we put them in the fourth largest company in the world. We can revisit our earlier conversation about an anti-tech, anti-AI, anti-pronger. world and society ahead. And if there is an effort, a concerted effort, an organized effort by governments to stop or block access to information, restrict freedom of speech, restrict

Starting point is 00:56:13 freedom of purchasing or buying things to control more things, and I think there's a trendline in this direction right now globally. The internet has always been lauded at this kind of system that provides an open alternative to physical commerce, that you could create digital commerce, digital information, digital media that you could share. And it's almost this digital representation of society, but the internet has to sit physically somewhere. And the assault on data center builds out in the United States right now, I think may indicate the importance of having an alternative internet. From the ground layer up, if you have a community, network that isn't restricted and controlled by a government on Earth.

Starting point is 00:57:05 It's almost like a backup for civilization, but it's a backup for progress. And I don't own any SpaceX shares, and I'm not trying to sell the book of SpaceX, but I think that there's like an important aspect of can you create a system that's not under the control of governments as a way to ensure humanity's progress to ensure civilizational continuity if things go south, if things aren't good,

Starting point is 00:57:31 if things are restricted, and if fundamental forms of tyranny start to restrict speech, restrict commerce, restrict information flow and whatnot. And I think having like a space-based communication network, space-based data centers,

Starting point is 00:57:45 and space-based communication back down to Earth, wireless, I think is generally a good thing. It's good to have a backup. Yeah. So put all economics aside and the multiples and evaluations and whatnot, and whether it's SpaceX or not,

Starting point is 00:58:01 I think the idea that you could have data centers, store information, transmit information, route information, and access information through space-based systems that can't be controlled, manipulated, or destroyed by governments is important. And I just, I like that. Yeah, if you, most people don't remember this, but when Elon was starting SpaceX, the original idea, when he was running around with Adéo and the, they were looking at some rockets and getting carriage from Russian rockets was to back up the biosphere. And he came back from that trip and I remember talking to him about it and he said, I think I should have to make my own rockets because that's actually where the problem is.

Starting point is 00:58:38 And it would be easier just to make my own rocket to back up the biosphere. And he wanted to put geodomes, like geodesic domes in space with all the plants and wildlife and creatures. And what incredible vision. And then there was the necessity of actually getting that up into space, and that's the unknown origin story. I will say this, Chimov. The idea of putting a data centers in space seems completely doable, even though there are a bunch of people who are saying it's not, when you compare it to what happened with SpaceX, with Starlink, which people said also wouldn't work.

Starting point is 00:59:16 And now he's got 10,000 starlings up there. The difference between a Starlink satellite and a data center satellite is really not that different. and... No, they're pretty different. Well, conceptually, of course, they're physically different, but conceptually, Elon put 10,000 star links up. Is he capable of putting 10,000 data center rockets up here?

Starting point is 00:59:38 The size is much bigger, Jason. The foils are much bigger. The wings are much bigger. But it's... Yeah. My point is it's not different if he has the new starship, because that's 10 times bigger. You can't just scale like this. That being said, it's technically possible.

Starting point is 00:59:53 I think he will be the first one to figure it out. But I'll just take a much more pedestrian take, which is, okay, you're sitting here. And if I'm asking myself, Jamath, how do I underwrite SpaceX at $2 trillion? Here's the basic math that I would do. Well, last year it did $18, $19 billion. It'll probably do $25 to $30 this year. Okay. So I'm buying this thing at a fairly costly premium, right?

Starting point is 01:00:21 So what am I buying? Well, I'm buying probably the most important internet infrastructure project that's happened since the internet itself. That's going to scale to hundreds of millions of users. And the reason that's going to scale to hundreds of millions of users is it's just very useful and it's just going to become cheaper and cheaper and cheaper. So that's number one. I'm buying a delivery infrastructure, but I think over time, GDP plus 10, GDP plus 15,

Starting point is 01:00:50 kind of a grower. So good business, valuable business, but it's the underlying platform that allows everything else to happen. And then I'm buying an AI business, which will be at the top level of the apps, but at the bottom layer, all the compute capability. And I think when you scale that out, like, why is Colossus so valuable to Anthropic? Maybe that's like a good question to ask. It's because if you look at who's actually capable of delivering a gigawatt data center, these guys are the closest, like an actual gigawatt. And the reason is that this stuff is very complicated and very, very hard. I think you've probably heard this famous story where Jensen was like,

Starting point is 01:01:32 yeah, he was the one that figured out this one thing that nobody else could figure out so that you could strip a bunch of racks and drive a bunch of east plus traffic and make the whole thing work together. So I suspect what happens is next year it's probably 40, 45 billion. And then the year after that, it probably doubles again. So now I'm buying it at 20 times revenue. And you would say, well, why can you buy a company like this on revenue versus earnings and cash flow?

Starting point is 01:01:59 And I think the reason is because what the revenue does is it gives him the operating leverage to go and invest in all of these other businesses that ultimately consolidate his differentiation and his competitive mode. Because what he creates is a capital mode that then accelerates a technology mode, that then accelerates an execution and a learning mode. And that flywheel when it starts to spin very quickly, and you would say, hey, hold on a second, it's probably spinning quickly now. I would say we're at the beginning of the beginning. Because he's, again, he still has all these disparate assets. I still don't like the fact that Tesla's over here. And as I've told you, that will get merged in. And now you're

Starting point is 01:02:41 have this incredible corpus of physical capability, movement of all kinds, X, Y, and Z, right? You have learning capability. You have infrastructure. You have all the connectivity. That thing will look very cheap, I think, in a few years. And he has this one thing that nobody else, if you look at the big CEOs, who steps on stage where you're always curious, okay, what has he got up his sleeve? You know, the Steve Jobs, oh, and one more thing. This is the only guy at the scale of civilizational out of left field, he's the guy. Whether you like him or you hate him, he's the guy. And there's a premium that is well-deserved that comes with that. So if you had to pick an underwriting case, Jason, I would flex the revenue

Starting point is 01:03:33 and realize that terrestrial data centers alone are $100 or $200 billion of revenue by $20,000. 2030, 2032. Just, and that means just building it. So already you're buying it at 20 times revenue just for that business. And that's just the Colossus on the ground, earth-based. It'll be Colossus three. No, no, forget space for a second. It's like Colossus 3, Colossus 4.

Starting point is 01:03:55 It pencils out with that, yes. Getting a nameplate one gigawatt. Look, it is pricking hard, man. Getting a gigawatt nameplate working is almost, and then, by the way, there's all the stuff that he can do on land, that he's the best position to do. I'll give you one example. There's a great push that Jensen's making, which he needs a partner, and I think Elon becomes a natural partner, to do DC to DC to DC. Forget all this DC to AC to DC nonsense that goes inside of a data center, all the loss. Explain what that is in English, yeah, for everybody. Just like, look,

Starting point is 01:04:25 you go through a bunch of power transformations to actually deliver the electrons into the rack so that, as Gavin said, you can generate the token on the other end. Today, it's very inefficient. It's very costly, it requires a lot more power, it requires a lot of cooling, it requires complexity. And what people have said is, wow, if we could just do DC to DC, like it comes in as DC, direct current, it goes right to the rack as DC, but it requires a fundamental re-architecture. Jensen needs a design partner and a thought partner to get that done. He's probably the only one. So I just think there's a lot of reasons where you can underwrite this to a multiple of

Starting point is 01:05:02 revenue plus the X factor, which is just the creativity and the, the one more thing. Love it. And then here's two charts. I'll have you comment on these, Gavin, after it. Here's the rocket sizes, just in terms of scale. And most people have not actually seen a starship in person. When you see this thing in person, and I've been inside that rocket,

Starting point is 01:05:25 I think we were together, Gavin, when we were in the first build. And like, inside of that, you can fit 300 people. It's basically like a giant, if you thought of a commercial aircraft, that's what it feels like when you're inside, right? Like a 747 in terms of the amount of space in it, especially when you compare the Falcon Heavy, which is their workhorse, correct, Gavin? Yeah, and Starship's going to get bigger based on their roadmap. It's going to get a lot bigger.

Starting point is 01:05:53 A lot bigger. And then this one is the most interesting that this started trending last week. This is Cummative payloads launched 1957 to today. SpaceX is basically about to, in just, that, and this is really what exponential growth is about, and this is what disruptive technologies are about, just from 2012 to today, SpaceX is about to dwarf the rest of the world's cumulative payloads into space. So, Gavin, maybe take the other side of it. When do these data centers in space happen? What has to happen for those to be a reality? When does that hit SpaceX's

Starting point is 01:06:33 bottom line. We've heard from Chimov, hey, here's all the things that hit the bottom line in the short term and midterm. But I think data centers in space would be a midterm to long term play. Three years is what I'm hearing. So tell us about that business in relation to the two charts I just shared. Well, the one thing I would just say, well, first, all those charts about launcher before Starship was operational. And most of that master orbit was done by Falcon. Yes. And Starship, Falcon is reusable. Starship is designed to be rapidly reusable. And this is a critical difference.

Starting point is 01:07:08 Like, let's say Blue Origin successfully solves reusability. There where SpaceX was 10 years ago, let's say China solves it, 10 years ago. Reusability means that you extensively refurbist the rocket, you know, the engines, everything, the faring. It takes a lot of time. You know, maybe you can fly that rocket again and 30 days. 60 days, rapid reusability means that you can fly the same, fly and land the same rocket multiple times per day. So if SpaceX, and it's really hard to do rapid reusability, I think it would have been, it would have been not trivial, but much easier to have starships working. If it was just

Starting point is 01:07:55 designed to be reusable, that's not enough for what Elon wants to achieve of, you know, a a moon base, a colony on the moon, a colony on Mars, mass drivers on the moon, you need rapid reusability. And that is why Starship is such an engineering challenge and will be such an impressive achievement when they have rapid reuseability. But I do think that master orbit, rapid reusability in Starship means if they get it. When do you predict they'll have that? Rapid reusability to space? You think? I mean, we're going to find out, we find out, you know, we find out I'm going to be at Starbase today for the launch. Yeah.

Starting point is 01:08:36 So, you know, we turn over cards and, you know, it's important for everyone to remember. Like, let's just say it's a fireball. SpaceX will still learn from this. Yes. They learn from failure. If you don't fail, you're not learning. Same way, if you're not wrong, you didn't learn anything in that day. And this is a brand new rocket, a brand new booster, a lot of new technology.

Starting point is 01:08:59 There's a lot of instrumentation on it. So whatever happens today, SpaceX is going to learn and rapidly iterate. I don't know when. I don't want to make a prediction. I would guess a year or two, maybe sooner. I think that's most consensus. A year or two is, I think, perfect consensus, yeah. We'll see.

Starting point is 01:09:18 So even if everybody else solves reusability, master orbit from everything else will quickly asymptote to a very small number. as far as when will orbital compute be a reality, I would say, well, it is important to realize there is a working H-100 and NVIDIA H-100 GPU in space today. Yeah. Andre Carpathy both trained a model on

Starting point is 01:09:43 and used for inference. So this is, you know, there's a working GPU in space today. And NVIDIA is making a space-designed version of this, which will be different because the heat sink has to be different. There's a bunch of weight that you put on it when it's in a data center that you don't need in space. And you also have to reinforce it for the journey to space because these things are going to shake and break apart. The data center ones are not made to have that many Gs put on

Starting point is 01:10:13 them. So you're going to need an industrial, an industrial strength one that gets to space. That has a different profile. Yeah, Gavin? Well, one of the things that's been so magical about SpaceX is they're very good at engineering the rocket and payload. So that you can use. semiconductors that are not designed be in space or satellites in space, and those semiconductors are a lot cheaper. We have a couple, my firm, Atrates, is an investor in a company called Exite Labs. It's a matter of public record is going to be in essentially every Starlink. And the chips were not designed to go to space.

Starting point is 01:10:50 They're not radiation hardened. You know, everyone, you know, SpaceX really liked a lot of the specifications on the chips. and then it's like, well, we'll see how they do with Brad testing, and they just happen to pass. And so that is one of, like, somebody that's very underappreciated, I think, about SpaceX. One of their specialities. One of their specialities. Yeah.

Starting point is 01:11:11 But I think the second half of 28 to first half of 2030 would be my point prediction. All right. Let's do Nvidia and then the market recap, since we have here, Gavin, and since Freiburg, you wanted to get in on that. Invidia blew out its earnings. Again, Q1 performance is just mind-boggling. 81.6 billion in revenue up 85% year over year, 20% quarter of a quarter, high growth in the stock market for those people who don't participate, 20% would be a high growth company year over

Starting point is 01:11:39 year. They did that quarter over quarter, 58 billion of net income and 48 billion in free cash flow. They're doing all this at 75% gross margins. They're growing massively, and they're obviously the most valuable company in the world at a $5.3 trillion. market cap stocks up but 16% year this year with all that growth. That's a magnitude of that 16%. And they've announced another 80 billion in additional buybacks on top of the 100 billion in buybacks they did at the start of 2023. So they're buying back about 4% of the company.

Starting point is 01:12:17 They raised a quarterly dividend, 25x from one cent a share to 25 cents per share. And their CFO said they're going to return 50% of the free cash flow to sharehold. There's never been a company like this, huh, Freiburg? The scale of this is just extraordinary. Uh-huh. Yep. Don't see it. There's your market report from Freeberg. Don't seem so enthused.

Starting point is 01:12:43 Yeah, it's a mm-hmm, mm-hmm. He's got potatoes in the oven. I have a question for Gavin. He did a really interesting talk with Patrick O'Shaughnessy, and there was this one thing that I wanted to ask you about, because I thought it was so interesting. You said, when you look at the revenue multiples of the chip companies and you look at the revenue

Starting point is 01:13:00 multiples of the DRAM companies, both cannot be true. In the context of Nvidia's earnings, can you just explain maybe in plain language for folks? I just thought it was so fascinating because it explains, it explains, I think, just to set it up, where is value over the next five years? I think if you looked at Leo Ashenbrenner, his fund has gone from like zero to five billion dollars overnight and it looks like he's just got massive puts on the chip sector and he's kind of rotated. So just give us context, Gavin. Where's the puck going? Well, so maybe taking the question to reverse orders. For Leopold, who's clearly a brilliant man, I think he's a Rhodes scholar like 19. And I think my understanding is putting a pretty extraordinary numbers.

Starting point is 01:13:42 I've yet to meet him. He actually shares an office in San Francisco with a friend of mine, so I think I'll probably meet him sometime soon. But it's got to, for that 13F that he filed, was at the end of the first quarter when, you know, I would say we were in the, you know, the thick of geopolitical fears. And I think you saw a lot of puts on a lot of 13Fs.

Starting point is 01:14:04 And I don't know that those puts are still there. Okay. You know, I think a lot of people wanted to be hedged for Iran. And, you know, now I think it's a little more clear. So I wouldn't read, I wouldn't read Leopold's 13F as being super negative on, on Sammy.

Starting point is 01:14:21 Chips. on chips. Second thing, I think cross-sectionally, if you look at the valuations for all these AI names, they can't all be accurate. You have memory makers

Starting point is 01:14:32 that, you know, three to five times P.E. You have Nvidia at a really low P.E. You actually have, you know, some other accelerator companies at reasonable multiples. And then you have everything else. Everything in power,

Starting point is 01:14:47 everything in cooling. And when I say power, I don't mean utility. So IPPs are actually quite, reasonably valued, but power, cooling, even probably some of the optical names, these are discounting very different things. If the multiples on the power, cooling, optical names are correct, Nvidia, memory, they're going up a lot. If the multiples out of Vidae and memory are correct, everything else is probably going to underperform. The AI market is cross-sectionally

Starting point is 01:15:21 inefficient right now, which is what I was trying to say. As far as the Nvidia quarter, they went to a new reporting structure, Dataceter and AI, and data center and edge, and then within AI, they have hyperscalers, and then I think they call it AI Clouds, Industrial, and Enterprise. I believe is if we were to make a true apples to apples comparison, and Broadcom, there's a narrative that Nvidia is losing share to the TPU, and Broadcom guided for 143% year-over-year growth in their AI semiconductor revenue in the quarter that they will report that's comparable to the one in Vitiate's reported. I think if you were to, and I just, I so wish they had reported slightly differently, I wish they'd done hyperscalers, AI clouds, and then industrial and enterprise.

Starting point is 01:16:14 Because I think the segment that is comparable is the sum of hyperscalers plus AI clouds stripping out China because Broadcom just did not have the China business that Vividia day. And I think on that basis, in other words, within the Western AI work, within data centers that are being built, whether they're being built by CoreWeave, XAI, Amazon, Google, Nvidia's AI business is growing faster than Broadcoms. and faster than a lot of other companies that are, you know, seen as part of this A6 share gain story. And, you know, I think Jitson has become,

Starting point is 01:16:55 you can, you can hear it increasingly frustrated and rightfully so, two things. I would say, what is the performance of stock to, to, he's been vocal about that, like, what is going on here? You're putting up record numbers and we're getting no, like, credit. Yeah, I get it. And just how can there be a share loss narrative if I am gaining share? And it is indisputably true that he is growing faster that hyperscale or capax,

Starting point is 01:17:24 even without these adjustments. I think the other thing that's so frustrating to him is these other A6s are not being submitted for benchmarks. They're not in the semi-analysis inference max. They're not in ML Perth. I think the reason they're not being submitted is they will lose. And you can't fight shadows. And until we see a clean benchmark of whether it's GB300s versus TPU, V7s or, you know,

Starting point is 01:17:54 versus inferential, yeah. First, yeah, versus Tratium. Yeah. We're not going to know. And that's why a lot of these other chips, I think Tradium's in a great spot, aren't being submitted. But, nonetheless, if it is doing well, once you become the largest company in the world, you kind of tend to trade by observation would be at stair-step patterns. where you kind of the multiple compresses, compresses, compresses,

Starting point is 01:18:17 because people are skeptical of the size. Then you have a re-rating. And then you re-rate. New floor is established at a higher rate, yeah. I think there was one other really important thing in the Invita quarter. They said if they thought their CPU business was going to be $20 billion this year. Yeah, yeah, yeah, yeah. That's extraordinary.

Starting point is 01:18:34 It means overnight for one of the world's largest CPU manufacturers. And I think that is a testament to, InVinia has a unique position. They're the only. company that works with every lab. And so that puts them in the best position to architect their chips. They call it co-designed for where the models are going. And I think that $20 billion CPU figure is pretty extraordinary. This is the thing, like at the end of this GROC transaction last year,

Starting point is 01:19:03 my kind of prevailing thought on this is we're going to move to these domain-specific architectures. I thought that was like a fait accompli. We're just now waiting for which models. But the reality is that that DSA market evolution is actually happening inside of Invidia. That's what's so insane to me. That was my takeaway from the corridor as well, which is like, holy shit. These guys actually have domain-specific architectures because they're doing these design programs with every.

Starting point is 01:19:27 This is why back to sort of the, you know, when he does DC to DC with Elon and Colossus 3 or whatever, it's just, it's another game changer for everybody. He doesn't make a month trip. He makes nine. And then I think the cost at which you can finance these chips and these useful. lives is really important. You had an incredible insight, which is the amortization schedule for Corleave and all these guys. They got saved. You may want to just explain what that is and why you said. I thought that was a great insight. No, thank you, Tumatha. I appreciate it. So when Coroeeve and all

Starting point is 01:19:56 these neoclots came public, and by the way, this goes for the hyperscalish too. There was a big bear case that, hey, these guys are amortizing their GPUs and CPUs over four or five, six years. And that's way too short of a lifespan. The true lifespan of a GPU is more like two years. and therefore, you know, the profits of all these businesses are overshaded. The reality is... This was Michael Burry who put this out there. Yes. To be clear.

Starting point is 01:20:19 Yeah. And, you know, thank you, Michael Burry. We need bears. Yeah. That's like asking Gerardo about modern music. Well, I don't want to cast this person to Michael Barry. He's a brilliant man, but we need bears. Love it.

Starting point is 01:20:33 Hey, somebody called Vanilla Ice and ask him what he thinks. Oh, my God. Millie Vanilly. Checking out. What a waste of time. What a waste of time. Oh, poor, come on the program anytime, Michael Murray. Go ahead, Gavin.

Starting point is 01:20:47 I'm happy to chat. But now that we've just aggregated in front of us, we have these different domain-specific accelerators. You can mix and match them. And I think the GPU stays in a lot of ways at the center of this constellation for a while. And you can put, whether it's a grok accelerator, whether it's a cerebris accelerator, in front of all GPUs, use grok or cerebrus for, code. And then those older GPUs, they have a useful life for 10 or 15

Starting point is 01:21:14 years. And this means that you can finance GPUs. I think Corey's lowest financing. I can't forget if it's 6 or 7%. It's going to come down. And if you can get an asset-backed loan and asset-backed financing for GPUs at a lower rate than other chips, that's a

Starting point is 01:21:30 profound advantage. That quarter single-handedly saved the Neos clouds. This quarter of the Infinity sites, I mean, they single-handedly save the wall. I think they should all they should all say an incredible thanks to Jensen. I interviewed the CEO of Correweep Michael in Trader. Michael in Trader, yeah.

Starting point is 01:21:48 And he was saying, hey, listen, people have no problem buying and financing these over a six-year period. And people are asking for things that are coming off and that he thinks they're going to have year 7, eight, nine, they'll have some useful life, you know, in addition to that. Yeah. So he's like, I don't know what anybody's talking about here. Like, this is just not informed. analysis was his point. Like the game on the field and people are betting with their dollars with him.

Starting point is 01:22:15 He has them pay in advance and sign six-year contracts. If they didn't think it has six-year lifespan, they wouldn't be signing a six-year contract. Pretty straightforward. And they can't get enough of them. Okay, let's end on this market update macro picture. Not great. Oil remains elevated, although there might be a settlement every week we have there as a settlement coming. Maybe this time, 16th time, it's a charm in the Iran more is going to wrap up. But we're in week 12 of it. And this was supposed to be four to six weeks. So wars never get resolved quickly. That's one thing we've learned in our lifetimes. Oil is driving inflation massively higher. Polymarket says 99% chance may inflation comes in at 4.2% or higher. Survey professional

Starting point is 01:22:54 forecast is projecting CPI hits 6%. You heard that right, folks. We weren't just talking about a 3% handle, which we just hit. Now people are saying 4 or 5 and 6% in Q2. And obviously, that's a huge revision. and the narrative was, hey, more Fed rate cuts coming. Now we're talking about Fed rate increases. Inflation is causing, obviously, bond yields to rise. Ten year hit 4.6%. You remember, we've had Besson on the pod multiple times, and his goal was to get that under 4%.

Starting point is 01:23:28 Now it's significantly above that number. And also, if we go around internationally, in Japan's 30-year, is at a high of 5.1%. highest ever recorded UK yields, highest since the great financial crisis, Germany, highest since 2011. And in Korea, retail investors are borrowing, borrowing record amounts of money to trade in AI chip stocks. They also had an incredible running Korea betting on crypto at the peak. So that's some sort of an interesting signal. Friedberg, is your alt personality going to come out right now? Are you concerned? Is Dr. Doom making an appearance here? Or do you think this is manager?

Starting point is 01:24:06 How concerned are you? What is the point of being concerned when you have ridden the roller coaster to the top and it is beginning its descent? I don't know what there is to be concerned about. The force of gravity is inevitable. The roller coaster will roll down. We will throw our hands in the air

Starting point is 01:24:24 and we will scream wee as we go for the ride. Global debt to GDP is 310%. Reserve currency status to the side the spending problem at the federal, state, local level, the spending problem at every country to basically keep economies growing to support existing leverage ultimately creates a cascading effect. It ultimately breaks. And as it starts to break, you have massive inflation because the value of your underlying currency collapses and then you have money printing and all this other sort of stuff which inflates the value of assets, which allows you to keep servicing your

Starting point is 01:25:04 debt and the spiral takes off. And so we will just enjoy the ride. This is the moment, you know, 30-year treasury, 5.2 percent. This Japanese yield, some argue might, you know, you should talk to more active market participants than me, but, and probably some economists who trade the market, but I would think that this is one of those things that could be a catalyst for a credit crisis because there's a lot of people that are in this carry trade. And we'll see. You know, this is... Okay. This is water leaking out of the bucket.

Starting point is 01:25:38 There it is. Dr. Doom is here. Chumab's your thoughts on Dr. Doom's panic attack of the month. Is this time real? Is this the 17th prediction of the next six recessions? What are we got here, Chimoff? Are you concerned? How concerned are you about these signals that are flashing?

Starting point is 01:25:57 I think that's exactly what that is, Jason. There are signals that are flashing. I think there's pockets of the market that still make sense that you can underwrite if you want to buy businesses that represent the future. And if you can find a few of those and you can get comfortable with that and you can own it for 10 years, I think you buy those companies. And generally, everything else, I think you should not speculate and you should generally avoid, not just because it's an upmarket, but in every market.

Starting point is 01:26:26 I've learned this the hard way. We've all kind of gone through this. As I get older, it's just not worth it. The vicissitudes of the market, don't give me anywhere near the sugar high it used to on the way up, and it makes me feel horrible on the way down. So how I manage myself is I have a few companies that I really believe in. I have extremely concentrated large holdings in those.

Starting point is 01:26:48 Large for me. Doesn't mean large for everybody else. And then otherwise, I just kind of stick to my eating and keep my head down. It's a much more rational way to behave. How many public stocks can you keep in your brain and still sleep at night holding for the long-term Schmoth. What's them, is there a number for you? Is it five? Is it 10? It's five. It's five or less. Five or less? Five or less. And so what your largest holding right now is what percentage of your net worth would you say? I don't know. Or like top two maybe.

Starting point is 01:27:16 Yeah. Oh, top two? Yeah, like one in two. One is 20. Two is 15 or one is 40, two is 20. I don't know. Again, it depends on the day, but I don't know. But it's just curious. But I think that's, I think that's really important. My point is there's no 30 things that I'm tracking. I don't have the time. I'm not smart enough. There's too much information. There's like four things that I stay on top of. Gavin, you do this for a living. How many positions do you manage and what's your take on some of the flashing signs that are saying, hey, slow down, or maybe there might be a wreck around the corner here, you know, when they do the checker flag and the F1 or whatever the metaphor you want to use is? Well, so one, I manage more than 100 positions at my firm.

Starting point is 01:28:00 And I do that with a team. We're over 30 people now. So it's not just me and I work with some great people. Then three things can be true. Rates going up is very concerning. What is happening with AI right now with Anthropic, growing faster than any country, any company in history at massive scale?

Starting point is 01:28:20 And certainly any country. Absolutely unprecedented. Yes. They're actually, yeah, they're now the size of, you know, yeah, they're pull up where they rate up. than 100 different countries for sure. Exactly. And compounding really fast and now profitable.

Starting point is 01:28:36 Yeah. Which I think really changes the moment. Which is bizarre. Yeah. Yeah. How did that happen? So those things can both be true. And I think we should all remember the tech bubble happened with, you know, the 10 year and the 30 year, much higher than they are today.

Starting point is 01:28:48 And, you know, the invidia of the tech bubble with Cisco and it traded a hundred times forward earnings. And, you know, I think Nvidia is probably at a low teens multiple of kind of, low to mid-teens multiple of real earnings. You know, that'd be a byside consensus, not in a trade's number. And then the third thing that I think is true is a straight-of-formist being closed, while it's terrible for everyone, it is relatively the best for America. Because we are self-sufficient in energy, we're self-sufficient in food, we've become a massive exporter of oil.

Starting point is 01:29:22 We're now the world's largest, not only oil and gas producer, but oil and gas exporter. And, you know, those three things can be true. What do they mean? I think it's probably hard for me to see with America being the most advantaged by what is going on. We're still the best currency. Yes. So the best economy. We still have the best public market companies. And we have the best private market companies. Yeah. And we are one of the greatest producers of oil in the world. So we're in good shape despite this international chaos. I don't think a dollar crisis is around the world. Now, listen, like if the Bundesbank was still in charge and you had the Deutschemark and there was a currency with better fundamentals, we would be at very high risk, probably. But just because we're the best house and what is globally a bad neighborhood of high debt levels and we have AI in our corner and we have energy self-sufficiency.

Starting point is 01:30:20 And every day the Strait of Formos is closed, I think is relatively good for the reinvestromo. of America. Like, I think, you know, you have to, you have to all these. You're saying it's a forcing function. It makes us, just like COVID did, be more resilient and, yeah, more self-reliant. Yes. And electricity is a base input to every manufacturing or industrial process, essentially all of them. And what we make electricity with in America overwhelmingly is natural gas.

Starting point is 01:30:52 And you can look it up in G1. It is down this year. The input costs for electricity in the rest of the world, you know, lots of different things, but LNG is a very important one, and it's up 100, 200%. And so the street of Formas is absolutely bad for everyone, but relatively good for America and relatively good for Trump's policy goals. And that's why I think he's in no hurry. Every day the street is closed.

Starting point is 01:31:21 And for whatever, he does seem like a relative thinker. Every day the Strait of Formas is closed is relatively good for America. It's terrible for Europe. It is terrible for Asia. Japan and China need that oil. Philippines needs it. India needs it. Yeah.

Starting point is 01:31:38 And so all these things can be true, but the one thing I do just want to say is rates going up and inflation is going up is never good. But we have to hold what's happening with AI where the fundamentals are getting a lot stronger in our mind. And the one thing I would just add is AI has been seasonal, the market's seasonal. You know, it often, you know, sell in May, go away. And AI fundamentals also appear a little seasonal. In the past, that's been, you know, because college students, they use a lot less chat GPT and Claude in the summer.

Starting point is 01:32:15 And generally, people maybe work a little less hard when the weather's nice. Now, with the Jympic AI, will the fundamentals still be seasonal? We will see. Oh, that's a really interesting point. Right. We see that e-commerce, apps, subscriptions. As investors in a lot of these companies, we would always have these board meetings, Chima. Oh, Q3. Yeah, people are out gallivanting and they're not playing Candy Crush or buying com or whatever. But, oh, hey, Uber and DoorDash went up. People are traveling, et cetera. Okay, final story of the week. We had a 48-hour jaunt by a bunch of tech CEOs and the president to hang. out with Xi, a lot of high fives, a lot of handshakes, a lot of great vibes. But coming out of it,

Starting point is 01:32:58 we haven't seen anything definitive, Friedberg, in terms of policy. This was supposed to be some big breakthrough. It would have downtream effects on tariffs, on us selling chips to China. We did see a little movement there. And the straight of poor moves, we would become, you know, Wonder twins with Xi and Trump reopening it. But nothing really definitive other than some some soybeans being sold and some H-100s, H-200s, H-200s, getting sold to Bidu and some of the top folks. So what do, and maybe some planes got sold too. So other than a little BD, a little business development, you know, Freyberg, what's the outcome here? Or was it just a bit performative in your mind?

Starting point is 01:33:40 There was a question. Would the administration leave China with a grand deal that made everyone feel like there's a long-range view on a partner? And I don't think that that's what happened. There were a few announcements, obviously, around an intention to continue to work together in a cooperative way and find a path to partnership, an intention to establish additional trade deals. And, you know, there was some purchases of aircraft and some agricultural product commitments. But fundamentally, the grand deal, the big deal that I would say reduces, deescalates tension, probably didn't manifest as some had hoped it would. And I don't think it's any surprise that Putin is with Xi today. And this is also performative that following the U.S. visit,

Starting point is 01:34:29 there is now a relationship bonding moment happening between China and Russia. So the story continues. You know, there is no happy ending and there is no rainbow-colored chapter three in this book. It's going to continue to be a dramatic arc as this rising power continues to challenge the United States. And I think this story continues. Were you expecting a happy ending? I can't answer that question. I mean, to the story of the China visit.

Starting point is 01:35:02 I'm not talking about any other things going on in your life, but it did seem like some planes and soybeans got sold, some H-100s perhaps, but I mean, it wasn't like there was some grand deal that occurred, but it's nice to see them together, right? I mean, that is nice. I think it was successful. I think there's what you see on. the surface and then there's what happens behind closed doors and without speculating too much. I think that it was a useful and productive trip. I think the biggest thing that they probably

Starting point is 01:35:28 got alignment on is just geopolitically the tick-tac-toe of what has to happen next. And I think that there's some amount of agreement there. I'm just guessing. Yeah. And so that guess, if I was going to unpack it, hey, we get, we have Venezuela, we have Iran and Taiwan. You have wants and needs around this geo-political chessboard. Here's what I would say just very generally. I think that there's a way to divide up the game board in a way that helps them and helps us. Gavin, any thoughts on specifically Nvidia being able to sell more chips into China material for the company? good for America?

Starting point is 01:36:14 I mean, it's obviously a pretty debatable issue. I think I disagree with Chamath on this. I think Stelling deprecated Nvidia GPUs to China lowers the odds

Starting point is 01:36:27 of them developing their own alternative ecosystem, which would be a lot power hungrier because you'd use optical. You bring in optical a lot earlier for scale of fabrics. I think there's sound arguments that this is stabilizing for the world

Starting point is 01:36:43 and is the best, highest probability path for keeping America ahead in AI and kind of keeping control of AI. And that's almost a shame we've had to have this debate because now people like me have said this many times and try to, if they didn't understand it, they probably do really understand it.

Starting point is 01:37:02 And by the way, that's not to say we shouldn't have had the debate. But that is what I believe, you know, reasonable minds can disagree. No, wait, where do you think we disagree? I'm not sure. I agree with you. Oh, good. I was going to jump in your...

Starting point is 01:37:16 No, no, no. You started with... Not's totally an agreement on... No, no, no. I'm like sell everything to that. No, what I was just saying is that there was what you see on the surface of what they can speak to the press, but I think the most important thing was the negotiation of, hey, listen, like, we're going to do these things, you do these other things.

Starting point is 01:37:33 And that's never going to get put out in a multi-memoed press release. That's my point. That's all I'm saying. Yeah. I would just say, listen, it's like, American China talking is only good. We want to avoid the cities trap that has been discussed. And China talks about a lot. They're very aware of it.

Starting point is 01:37:52 They brought it up. Yes. She brought it up by name. Yeah. Talking is a integral step of avoiding. I have to say. Having a nice resolution. From my perspective, the greatest superpower Trump has is his ability to bond with

Starting point is 01:38:09 dictators, monarchs, royal families, Gulf monarchies. He's just great at it. They see eye to eye. They vibe. He has no problem going to see them. He has no problem inviting him to UFC fights. This is like if she comes to the United States and he's sitting courtside with Dana White, like that's when we know things are going to be okay. I do think he's probably giving him the green light on like, hey, Taiwan's yours. Just let's not have it during my administration. Maybe like we do a 30 year deal. or a 20-year handoff deal, I wouldn't be surprised if something like that happens. Or a 100-year deal or a 200-year deal. But the one thing I would just say that I'm sure was communicated is, hey, wars consume a vast

Starting point is 01:38:51 amount of oil. You buy your oil from Iran, Venezuela, and Russia. Russia alone can supply a fraction of what you need. And now it should be clear to the world. Two or three are off the chessboard. Yeah, if you two or three are off the chessboard. If you do something we don't like, Venezuelan oil, gone for you.

Starting point is 01:39:11 American oil, gone. Brazilian oil, gone. And we'll say to all of our good friends in the GCC, we're so sorry, but we have to close the straight of formulas again. So Iran, all of Middle Eastern oil gone for China. Now you just have Russia. And good luck fighting a war with just Russian oil against us, Japan, South Korea, Australia, UK, France, Germany, the world.

Starting point is 01:39:41 Good luck. Who knows about Europe? But for sure, Japan would be there. For sure, Japan would be there. Oh, in Australia, for sure. Korea, for sure. Yeah. And so I think it's going to be a more stable world on the other side of Iran.

Starting point is 01:39:56 However it resolves, and I think that's nothing but good. I think that's a good insight. I think it's a great insight. All right, listen, we missed you, Sachs. Come back soon. And Gavin Baker. Shout out to Bestie Gavin. Thank you.

Starting point is 01:40:09 Yeah, you're so great. Thanks for coming. We appreciate it. Hey, and your father-in-law, what's his name again? Jeff Painter. Jeff Painter. We love you. Thank you so much for all the kind words.

Starting point is 01:40:22 We'd love to invite you to come to liquidity or the summit. I know you're a big fan of the show. I wanted to give you a shout out here on the show. Thanks. I used your fandom of the show to leverage Gavin, who was like, can't make it today. And I was like, tell your father-in-law, we're going to get him backstage VIP tickets to the next two events if you show up today. And if you don't, I'm going to back channel it to him. And all of a sudden, Gavin made it to the show. Love you, boys. A little bit of pressure.

Starting point is 01:40:50 That's my way of the, that's my hormone straight. Yes, I'm always there for my father-in-law. Absolutely. All right, everybody. We'll see you next time. Bye. Thanks, guys. Thank you. gone crazy with it. Love you, Ski. I'm the queen of kinling. Thank you, George, because they're sexual tension, but they just need to release somehow. Seems to get merch.

Starting point is 01:41:46 I'm doing all...

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