TBPN Live - Trump's Deal with NVIDIA, Genie 3 AI Paintings, Intern GPT-5 Test, AI Hedge Funds | Peter Harrell, Aaron Ginn, John Maslin

Episode Date: August 11, 2025

(00:17) - Timeline (05:04) - Intern Reviews GPT-5 (20:02) - Google Deepmind's Genie 3 Reactions (40:10) - Timeline (53:39) - Billions Flow into AI-Focused Hedge Funds (01:06:24) - Trump Demands 15% Revenue Tax From AI (01:13:01) - Lip-Bu Tan Headed to The White House (01:29:38) - Peter Harrell, a non-resident fellow at the Carnegie Endowment for International Peace and former White House official, discusses the evolution of U.S. semiconductor export controls aimed at limiting China's access to advanced computing technologies. He highlights the strategic considerations behind these measures, including efforts to impede China's AI development and the complexities of enforcing such controls amid global supply chain challenges. Harrell also examines the implications of recent policy shifts, such as the Trump administration's decision to allow certain chip exports to China with a 15% revenue share for the U.S. government, and the potential for these actions to set precedents affecting future trade and national security policies. (01:55:16) - Timeline (01:58:58) - Aaron Ginn is a technology entrepreneur and policy analyst known for his insights into artificial intelligence (AI) and U.S.-China relations. In the conversation, he critiques the notion that restricting Chinese access to Nvidia's AI hardware will hinder China's AI progress, suggesting it may instead accelerate their development of domestic alternatives. He also discusses the inefficacy of U.S. export controls, emphasizing that such measures might not effectively impede China's AI advancements. (02:30:10) - John Maslin, CEO and co-founder of Vulcan Elements, a U.S.-based rare earth magnet manufacturer, discusses his background as a former naval officer and the company's recent $65 million Series A funding. He emphasizes the critical role of rare earth magnets in modern technologies and the importance of reducing U.S. dependence on China's supply chain. Maslin outlines Vulcan's commitment to onshoring production to enhance national security and economic resilience. (02:41:26) - Timeline TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comAttio - https://attio.com/tbpnFin - https://fin.ai/tbpnGraphite - https://graphite.devRestream - https://restream.ioProfound - https://tryprofound.comJulius AI - https://julius.aiFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://www.youtube.com/@TBPNLive

Watch TVPN! Monday, August 11, 2025. We are live from the TBPN Ultron, the Temple of Technology, the Fortress of Finance, the Capital of Capital. Do they do that in the Korean version of TBPN? Do they scream at the camera and they open up the... I need to watch this thing. If you're not familiar, there's a very, there's a very uncanny clone of this show's format. A Korean TBPN clone is at the timeline. Yeah, Korean TVPN clone is at the timeline. June Park, which is, I believe. I'm in favor of this. I think this is cool. June Park, who is a technology brother found NFM Live over on LinkedIn. But we got to find their intro. We got to see.

Yeah, we have to dig into this. I forgot. You have to imagine that you're watching NFM Live in Korean would hit. Extremely hard. It sounds like, it sounds incredible. But yeah, I mean, this is fun. Obviously, you know, we played a lot with this format. We invented television.

We invented news, and now people are taking our invention. We forgot to patent it, though. We should have patented news and television and shows and live stuff and business news. That would have been really good. But we forgot to patent it, and so now everyone's copying us from over in Korea. But, I mean, it makes sense. We don't really, I don't think we have a large audience in Korea. And so have some fun over there.

Hopefully it goes well. Good luck to you. NFM Live. I hope that you're massively successful. And I hope that, you know, you can start with, you know, the exact layout that we've done. And then you can kind of twist it and change it. Make your own. And that's how these things start. Tyler, what you got for? Okay, so I just found it. They do not do any kind of interesting intro. They just start the show. No, no energy. Well, no energy. Okay. Stop it up, guys. You got to copy the important stuff. Yeah, the important It's not about the overlay.

It's about the screaming. You losing your voice. Losing my voice. Jay Kim, you got to get, bring up the energy. Yep. Jay Kim, he's the host. Gordy, I clipped your intro and have never gotten more responses. Every time.

That was the best intro we've ever done. Wait, just this one right now? No, no. From last week. From last week. I'm always trying to one up myself. The audience really likes it. Well, it really helps because we're always like just, you know,

shuffling things around just one minute before we go live and then we really got to dial it in. And so the screaming really takes it up another notch. And you know what else takes it up another notch? Getting your business on ramp.com. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Switch your business to ramp.com.

Ghibly moment as soon as. Wait. Important news. Yeah, please. TbPN has hit Substack. Oh, yes. This is big. This is big.

This is big. Substack.com. We have a daily newsletter. Yes. It is loosely based around the content that we cover on the show. Yep. So every day before the show goes live, we put together a run-of show. So we select posts that we want to talk about.

We give our little takes. We figure out the different things that we want to dig into at various levels of depth. We were already putting those together and we thought it might be fun to send those out to folks to both let you know, hey, maybe this is a show that you want to tune into, you want to hear us talk about these things in more depth you can hop on the stream you'll receive the email right when we go live so you'll be able to click and tune in if you want and also if you don't have a chance to listen to three hours of content that day you can get a little bit of a summary in the of the last day of the last day and a little bit of preview of what's going to happen today

so some of the top stories and so some of the stuff we talk about on the show we will have you know little summary teasers up there on our tbPN substack so please go subscribe and give us any feedback you can reply to any of the emails that we send you let us know what you think if you have pushback on the takes if you have extra information to add if you think we miss something let us know through that and then if you like certain pieces of the format we'll see some of the analytics we're going to be tracking you we're going to be seeing we're going to be seeing what links you click on the open rates how how far you scroll down but if you particularly like something just let us know this is for everybody says you guys make too much content can't keep up well here's some more

Here's some more content. I knew you're going to see it. Here's some content to help you keep up with all the content. Yeah. So. Indeed. And we couldn't spread this content all over the internet without the help of re-stream. One live stream, 30 plus destinations, multi-stream and reach your audience, wherever they are.

You can sign up for free. Restream. Thank you for hosting our show. So we talked about it yesterday, or we talked about it last week, and we talked about it a bunch. Jeannie 3 hit the timeline was maybe the biggest news of... of last week in terms of artificial intelligence was crazy because it was GPT-5. But GPT-5 was more of this consumer update.

We have some updates from Tyler. He's loving GPT-5, interestingly, kind of contrarian takes, and a lot of people were dunking on it. Tyler, what did you like about GPT-5? Oh, and give me your e-val. Yeah, so I've been, over the weekend, I've been using more for coding, like, various things.

Definitely, I've been using the thinking mode like the whole time, because I'm on the proscription, so you can choose thinking, so always think. So there is a drop-down now? Yeah. Well, there always was a drop-down, at least for pro, where you could do GPD-5 or GPD-5 thinking.

Interesting. And now there's also, I don't know if this was always there, but you can choose to add the legacy models to you. So I can still access 4.5. I've been on the flagship model. I've just been yelling at it because I thought the models- Well, briefly, that was not available. Okay, yeah, yeah, yeah.

So there's the model router, which I think is just GPD-5, and that'll route sometimes to thinking. Okay. But if I'm very stern with it, it usually thinks. It usually throws itself in thinking mode. Probably. Don't mess this up. Don't get it wrong.

Then it'll be like, I'm thinking, I'm thinking. Yeah. But I just always use thinking because I'm on pro-science. Wait, wait, wait. So I have three versions. I have GPT-5, which is the flagship model. I have GPT-5 thinking, which gets you more thorough answers. And I have GPT-5 pro research-grade intelligence.

I want to be on pro the whole time? So I think pro was similar to 03 pro where it's going to be like a it's going to take a long time It's going to take 10 minutes every time where I'm on jp5 thinking is is similar to like oh three Okay where you it would just always think but sometimes it's pretty quick okay well I'm in I'm on chat gbd.com. I can't find 4.0 and I'm Where is my girlfriend? Where's my girlfriend? I'm still using barred. I actually can't see 4.0. They apparently added 4 o back so so you can uh yeah that might just be for Plus that you can go back, but you can add legacy models. That's just for people who were really desperate.

And they replied to Sam Altman on X with a really funny post and he turned it back on just for them. So there's five people that have access to the old model that everyone else is rugged and on the new one. Okay, but give me your e-val and give me your qualitative assessment of like the model. Like, like, because it seems like you did, you did a test where GPT-5 outperformed all the other models, But then simultaneously, it just seems like you've been having a good time. So break both of those down. Yeah. So generally, like just for coding tasks, I found it very useful.

I wouldn't say it's like blowing my mind with how much better it is than like 03 or 4.1 or something like that. But it is like it's a good model. It's a good model, sir. Yeah. I would agree with that. I'm trying to think of what I did this weekend. A lot of times I was just like, what am I thinking of?

I, you know, giving you some different stuff. How do I add something to my path? top US government contractors, hedge fund research report. Like it was doing a lot of this stuff. I was getting lunch with someone. They were recommending a piece of enterprise software. I just kind of described it. It nailed it very quickly.

I don't think it took too long to think. It was fine. I actually put in agent mode yesterday and I had it hunt around on the internet for Nintendo Switch 2 and it did find one in stock, which was very useful because there are Nintendo Switch trackers that you can go and you can like,

and they'd scrape some. all the websites, but this basically just did this on an ad hoc basis. It was good. It worked. It delivered. And then for other, like, kind of quick questions, it's always been, it's been quick. And I feel like I should be, it's definitely going to speed me up because it, like, it knows to not, if I stick with the model router, it's going to respond quicker for the stuff that it knows. So also, even if you're using Jupy5 thinking, like on thinking mode, there's a button that says, like, give me a quick answer. That's right. You can just tap it and then if it's seen too long.

That's cool. Another thing was I forget exactly what I was writing, but it helped me with writing and I found it like better than I would have expected. That's cool. Yeah. Yeah, I feel like as part of the reasoning chain, like the first response should just be like the 4-0 response. And then it should just surface that to you. And it should just kind of say like, here's what I know so far. And then I'm going to keep thinking, keep cranking on this to update this. Go down the reasoning chain. And then if you're like, if you're good, I'd almost like to. to flip that ux around so that it's automatically going deeper in fact-checking it and improving the response over time over 10 minutes giving me you know a normal response within 10 seconds then spending up to 10 minutes working on it but if I'm satisfied with the 10-second result I can just kind of click like I'm good yeah that would be that that might be the next like probably saving money too yeah that could be cool anyway and then give me your eval yes so

I thought of this thing I think I looked it up I think someone might have written a paper about this like a year ago but it was like some quick question does the Korean tbPN have an intern we need to figure that out you got to copy the intro and the intern you have to have an intern that you throw random questions after we can look okay anyway so back to your yes so basically my the new benchmark i've kind of thought of although maybe someone's done it before i get a look more to it um but it's basically solving a rubik's cube so yeah solving entire ruby's cube is like totally like way too hard right now but um if you basically just like start with a solved cube and then just just do like one move.

Then usually they can get one move. If you do two moves, they like, none of them can get it except GPT5. Okay, only GPT5. Yeah, so you basically, you can take like the state of the Rubik's Cube. The two move champion of the world. Yeah.

And then if you put it in a string, you can format it nicely and then give it to it. And then, um, uh, GBT5 thinking. Rotating the cube feels, it feels somewhat like Arc AGI in the same way of like, there's this visual spatial test that then's represented in text token. and an LLM should be able to operate on those

if it was able to transform that into true spatial thinking, but it's not quite there. Yeah, so I think something I'm going to try, I think I might write a little blog post, but I want to try actually putting it in image format, right, with like multimodal and stuff. Are you jealous of our substack? You're like, oh, maybe I'll have a substack.

Yeah. Oh, yeah, yeah, maybe I'll just start one. No big deal. You can publish on ours. Okay, yeah. But yes, you should flesh that. Continue. But yeah, I was thinking of like trying different formats

for the input, maybe that'll help it out. Or doing like actual multimodal, like putting an image of the cube state. Yep. But I was like very surprised after two moves. I was kind of expecting like, you know, you can look up all the algorithms you need online. To finish the last two moves.

To finish the whole cube. So I was thinking like, oh yeah, let me just try the, like, I'll pass in with three moves to go and like obviously can get that. And then it couldn't at all. Yeah. And then I tried, so this morning I tried, that was with no tool use. So this morning I tried with GPD-5 with like the agent.

Yep, so no tool use, it was still writing Python, right? Yeah, that's true. But it wasn't searching up like algorithms. Yeah, yeah, yeah. But this, this morning I tried it with agent, and it went to like a bunch of different, yeah, cube solvers. Yeah, it did.

And it did not, it found them and it like said like, oh yeah, I'm using it, this is the best move. And then it like was totally wrong. Okay, interesting. So that feels like the, that feels like a pretty good test and pretty good eval for like the era of agents. Like what I was describing this to Tyler. I was saying like, you have a random Rubik's cube. If I gave it to you and I was like, you need to solve this and you didn't have all the algorithms memorized, like, but you were like, it's my job to finish this cube.

What would you do? You would Google how to solve Rubik's Cube. You might watch a YouTube video. You might like go to some thing, some cheat sheet that's like type in all the colors on. the Rubik's Cube and then it tells you exactly what to do step by step. And there are tons and tons of these like solvers. Like like you go out there, you Google how to solve a Rubik's cube, you type in what you have on the colors and then it tells you move this one, rotate this one. The problem is that all those websites are completely built differently. Some of them are

in WebGL. Some of them are in, you know, like just old HTML. Some of them are programs. So the way the way the model learns to solve a Rubik's Cube is by pretending to be a human and just Google searching. That's how they will solve every problem because these tools exist. So it's like instead of like all rattling on door on door dash, just go figure out how to use DoorDash. Go figure out.

Like the answer to like booking the flight won't be like reconstituting an airline from scratch. It'll just be like Google it. Like use Google flights, right? Like use whatever's out there. And so it was it was impressive that it was able to perform at a higher level than the other models on the spatial reasoning required

to finish the last two moves of the cube, but it was underwhelming on the agent's side that it wasn't able to find and use a cube solver because it clearly hasn't been trained on that. Yeah, but it is interesting that GPD5 thinking does like way up or form. It was like thing for like six minutes just to get two moves.

Wow. Which like is really long. But it's like, it is like, I think it shows that there's like, you know, something. It's not just O3 packaged up as like in a router. So did you test? with 03 or yes it did not and oh three didn't so so so there's something going on with the reasoning that is better like this is it's weird because isn't o4 worse than oh three well it's we only

we never got actual o four we only had o four mini okay okay so so this could be like oh four under the hood like a better reasoning model even more rl on top of it that's yeah maybe smarter yeah and it's and it's accessing that you know in a certain way but it's still like nowhere near one-shotting, like just random hard problems. Yeah, yeah. I had lunch with some friends on Saturday, and one of the friends is a physics professor at a very prestigious college,

and he was able to get GPT-5 pro to one-shot a problem in about 25 minutes that he said that would take his graduate students months to do on their own, historically. I can't even imagine the type of physics problem. It takes a month to solve. I don't want to give away too much the alpha. He was like, his mind was like completely blown.

Okay. On Saturday, you know, he'd just gotten access to the model and he was completely blown away. It's such a weird era of the spiky intelligence because like pretty much any human should be able to solve the last two moves over Rubik's Cube in like an hour of like tinkering with it and just trying stuff moving back. wait what do you think tell you and our seems like a long time it's only two moves it's two moves like you can just look at it yeah yeah it doesn't seem that hard do we do we just look at it we have a we have a normal Rubik's cube in the studio right somewhere let's let's let's get that out there and see that toss that to me it's already solved though yeah yeah yeah yeah mix it there we go high stakes throw that would have been deeply

embarrassing for the firm if if you thought that so yeah it's like two two moves off and then you have to look at it and then you have to We'll do a couple moves, and then let's feed it to Tyler, and he can work on it. Oh, yeah, see if he can do it. Okay. No, see if GPT Pro can do it. Oh, well, yeah, how many times do you test it? Do you use agent mode and tell them, like, figure this out?

Figure this out. Well, that's why I tried agent mode. Yeah, didn't do anything. Didn't do anything. Okay. Oh, well. Well, let's tell you about figma.com. Think bigger, build faster.

Figma helps design and development teams build great things together, great products together. Get started for free. Despite all the GPT5 news, very exciting, and just a bunch of progress that's happening, it feels maybe not as binary, not as exponential as some people were expecting, but lots of cool things. Also, I wound up using Claude Code for the first time and had a really interesting experience there. I had it do a deep research report.

No, not at all. But I had to do a deep research report. And instead of just spitting out like bullet points. tables I had it just spit it out as HTML and so it was able to it was able to generate like like really like I'll show you I'll show this to you I don't know if you can see this but like can you see this yeah I got to take this show everyone this is not gonna work but but basically it's able to it's able to like show formulas show different charts and graphs and just like use all the

features of HTML which is really cool now there were tons of like hallucinations in here and the actual quality of the research report was not great, but we were talking to Doug at semi-analysis and he was saying that that cloud code has been really good for research reports. So I think I'm going to try and work that into my workflow a little bit more. And I feel like the next, the next layup for Anthropic is just wrapping Claude code in a mobile app so that you get access to like a remote file like directory that can actually, like, write code, deploy websites, do all this stuff, but from the app, and then so then you can instantiate things.

But the cool thing was that it felt like for the first time, what? Won't that kill, like, $10 billion startups? Maybe, maybe. But for the first time, it felt like I was, I was feeling this whole idea of, like, the generative UI, the on-demand UI. Totally. Because as, like, I was asking it to do this report on world models, and it just generated, like, different sections of the like different charts and graphs and put them all up there talking about how these work and it was able to just like create these little highlight these little highlight sections for odyssey the company founded by oliver cameron how much have they raised physical intelligence by loki groom and carol houseman who've been in the show they've had a 400 million dollar round jeff bezos thrive looks the problem is like i think i still need to back check all this because i feel like the research wasn't as strong as

as deep research or what you get from GPT5, but it was very cool to see it just use all the HTML functionalities and buckets to kind of create like a really readable website, which of course was then immediately mobile optimized, immediately, you know, you could read it this size, that size. And it just felt like the first, the first, like, the first moment of, you know, generative UI, like on demand.

Yeah, you need to experience these things firsthand before you can really have that true aha moment. Much like you need to experience Vanta first hand, automate compliance, manage, risk, improve trust continuously. Vantus Trust Management Platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Okay, so back to the actual big AI news of last week. Yes.

Genie 3 from DeepMind. Alexander Holinsky dropped a very fascinating series of viral videos on X saying something something fun we discovered you can use Jeannie 3 to step into and explore your favorite paintings here's a short visit into Edward Hopper's Nighthawks and this video is crazy because it and I said this is a studio Ghibli moment as soon as this goes general access like as soon as everyone has access to this, you're going to have the Studio Ghibli moment because everyone is familiar with that particular painting.

Maybe not everyone, but most people, and it's just like you can go walk around it and it feels like this real world. And I think that there's going to be so many examples of memes. Well, and think of the example that I gave where you just take three photos from like a specific moment, drop them and create a world, an entire world around it, and then you can go relive this like three-dimensional memory.

Exactly, exactly. And so it's this like, it's not, I think the AI generative AI generated stuff is by default like very mid right like AI Slop is pretty like mid and like the AI generated photos like if you just showed me a photo of a car or something that was AI generated it'd be like I would rather just see Max Verstappen driving the I'd rather see a more cinematic image of of a Red Bull F1 car that's just taken with a really like high quality camera and tells a story and immediately builds my intrigue of like, oh, when was this? Was this during a race? Was he practicing? There's just so much more value when something's real. Even if the fidelity is there, it's not quite there, but it's just less of like the story

behind it. But when you take something that people know or is personal, like a family photo or a painting that they're a fan of, and you allow them the ability to customize and experience it, I think this will go way more viral. And so this, I think Genie 3 and I think world models generally are going to be the next like hot sector for AI. I think the GPT open source, GPTOSS, GPT toss is kind of cool. But, you know, we've been there. We've seen that.

I don't think that there's going to be that much new there. Claude 4.1 was kind of this minor spec bump. And even GPT5 was, you know, somewhat incremental, obviously very key for the business to get them, you know, seriously competing in the, the enterprise space and then also, you know, improve consumer usage and just, you know, improve the experience of the chat GPT app. The meme potential of this, if you can generate a world and then just share the link to that world and other people can drop into it, it's just going to go incredibly viral. And even just exporting videos of this is good content creation, even if you're just sharing

the videos that you generated, but actually being able to share the link to is going to be really, really big. So I'm super excited about this. Um, the big question from the show, uh, was, you know, what was going to be this, uh, with the, the Ghibli moment for world models. And I think we know it now. It's not going to be, uh, it's not going to be a doom knockoff because you can just go play doom. You can play the original doom. You can also play the latest doom, which is like 4K 60 frames a second graphics on Xbox and, and PS5. Like there are, there are amazing ways to experience doom if you're into doom. And also, people don't, just play doom to go walk around a cool designed like hellworld they want to actually have a gun with a ammo counter and a health bar and an arm and a boss and a story of some sort even if the story is like kind of blah like they want to be able to progress and and it turns it into this this reward cycle of okay i'm you know i'm having fun verifiable rewards exactly um and so i think exploring iconic images

paintings, memes. This is going to be a Ghibli moment. We got some recorded videos from the Deep Mind researchers, which we're showing you right now, and you can instantly see the virality. I can't wait for this to go into general availability, because I think we're going to see some really crazy ideas come out of this that no one can really predict until you get it in the hands of just like millions and millions of people. In front of the show, Logan Kilpatrick went to interview Demis on Jeannie 3 and Deep Think and a lot more, and the interview just went up like an hour ago. And we're working on getting the genie team on the show, hopefully this week.

I'm very excited for that. So the other interesting thing is, like, people have kind of stopped generating Ghibli's, and images in chat GPT is just like something that people use. And people might generate a Ghibli for something if the meme calls for that, but I find myself generating more like, turn this person into a bodybuilder. A lot of us. But also, also, you know, you have some funny idea and you go to images in chat GPT and you say, like, I want to visualize this thing.

What if we put a car in Central Park and it was this color? Like, AI images are clearly very useful for that. You have continued to be a power user of make this person a gigachad more so than the Ghibli's. Yes, yes, yes. The Ghiblies, I haven't ghiblied in a long time, but I've certainly generated a lot. I mean, I generated a lot of set design for, like, what the show should look like in the next version, a lot of ideas for, for marketing stunts and stuff like that. And so it's become this useful tool, and then obviously it's baked its way into, like, the backgrounds of, like, true Hollywood production, all sorts of video production. It's just like, generative imagery is just a tool, both for designers to pull references and use the reference board, or it's kind of like the first step in a plan to co-create something.

Yeah, it's actually awesome. you speed run to a something that's mock up quality exactly not necessarily a product or ready for release but instead of i mean i used to make uh i i think it's a way that you can like even if you're working with designers or people that are great at photoshop you can just generate a v1 that's pretty solid and say like i want to make this but make it like really good yep and so genie three is close to mock up quality like if you if you wanted to if you were pitching a video game or you were even pitching like a experiential world that you wanted to build,

or like you're building a store, a physical store for your business, and you generate an image of what you think that one, what that should look like. And then you wanna let the client say, hey, we're gonna invest five million dollars building out this, this caffeine goo cafe in Nashville. Like our friend did, like you could actually walk around it

and really get an idea of what that is. Or you could do some of like the Matterport things for, oh, okay, we took some of the photo photos of this house. We want you to let you walk around. Like the tech is getting there. Deep Mind is clearly scaling this. It's at 720P 24 frames a second right now pretty close to optimal visual fidelity. They're going to get to 4K60 frames a second soon. But there will be intractable problems that come up that I don't think you can just blindly throw scaling at similar to what happened in LLMs. And so we're going to be running down the same path. We did with language models. This is

might take. So you'll use reinforcement learning to round off all the sharp corners or instead like kind of create spikes of spiky intelligence that create pockets of value within these generative world. So you can imagine if you're generating a video game, it's very important to have the main character look the same at the end of the game than at the beginning. So you might do some sort of like RL pass to make sure that the character consistency is really important for your hero character. but really it doesn't matter if I like come back after 10 hours of wandering around like the the video game and like a tree looks slightly different like it's fine so so there'll be areas where where these companies and these these foundation labs like go and apply a ton more RL to make sure that this particular feature works but at the same time it doesn't make sense to go and try and rebuild everything and bake everything into the model so you're going to wind up with situations where just like Chachipit. got a web browser and a Python shell, you'll probably, these world models will need to be wrapped

or interfaced with like a traditional database. So that if you have an inventory and you want to track health points or you want to track ammo, that's not like hallucination. You generate a world and then you make it fixed. Yeah, yeah, yeah, yeah. Fix, like, or fix like the underlying territory of the world, the underlying maps. So that everything's the same.

But then you're generating on top of that. Tyler, what's your take? Yeah, I kind of disagree that like scaling one fixes. If you look at the, I think if you look at Genie 2, it had this big problem with like consistency, right? You would turn left, then you would turn right again, and it would like look totally different. And I'm pretty sure in the paper they basically say that the consistency was just like an emergent property of scale. Yep. So consistency over what time period though?

I mean over the minute long. Yeah, I guess it could be different. 100 hours. 100 hours. That's how long people play GTA 5. like a rolling you know 100 hours like that's how long people will play these things and it's like they want to be able to go back to if you're in elder scrolls you want to be able to go back to like the very first village you started in and see that the tree that you chopped down is still there

look how far I've come exactly like there are some there are some crazy properties in like in elder scrolls where it's like in the first village you accidentally killed the you know the like the the the blacksmith and so later 12 hours later, you come back and you can't get the sword that you want. Like, like, that's, like, why bother trying to bake all that into the model? Why not just use a database? But I'm saying you don't, you don't need to, like, like, think about baking it into the model. It's just going to, like, it's just going to be an emergent property as you scale.

Yes, but I do think you will wind up hitting plateaus of scaling. Just like, just like, you know, chat, GBT, like LLM's got pretty good at math where they could do two plus two. do. And then they could do much more complex math. But at a certain point, it was like we're not, we're just going to give you a Python shell so that you can just actually do the real math. Yeah, that's fair, I guess. Like, because even if, even if scale would solve, like the really, really hard intractable, huge, huge math problems, it's like, why burn the electricity to run that massive model to do some very, very basic calculation that would take like five flops on just a CPE? Sure. And so, like, you know, you don't need to... And I do think that there will be other... There will be other tools that it doesn't make sense to bake into the model. I mean, just think about like multiplayer elements.

Like, how would that be baked in the model? Like, you'd want to sit on top of just like a normal social network. Yeah. You want to sit on top, like, of some sort of normal, like, interface so that you can join the same game. Like, I don't want to recreate a new, like... Yeah, it's interesting. It's interesting that epic game store every time I launch. It's possible to imagine like a new video game paradigm where the world is just constantly expanding and there's no real rules and characters are constantly emerging.

But at the same time, like imagine playing soccer. Yeah. And if you dribbled to the side of the pitch at one point, like it just opened up and you could just keep dribbling. Like eventually you'd get fairly, you'd be like, okay, like I actually like having a rule set. I like having this sort of consistency in the game. Yeah. So that I have a framework. which I can play in.

So in so many ways, this will create entirely new, like, formats effectively. Like, you're taking the concept of an open world video game and you're just opening it up infinitely. Yeah. But I think, again, people will want that consistency of play and even a shared experience, right? Yep. And, I mean, so Gold Rock in the chat is saying $3,000 an hour to play at 4K, 60 FPS. I mean, that is a real consideration.

The other question is just like, is there a way that you can pull forward adoption by like not being a deep learning purist? Even if deep learning is the solution over the long term, while you're waiting for to build the $1 trillion data center to actually hit the crazy, crazy scale, if you can get user adoption by just using a normal database. to track your inventory and your health bar, like you'll get more adoption. And then you'll create this flywheel. It's the same thing with chat GPT. Like you could, you could have,

we could have just been like, open eye could have said like, look, there's no reason to give a, to give an LLM access to a Python repel. At a certain amount of scale, it'll be able to just reason about it and do the Python in its head, right?

But you can pull, you can say like, actually you do want to, like, if you use the world model as, like an RL environment, then you can actually pull it forward that way by just, like, using it for other stuff, you know? Maybe.

Like, if you're using it, instead, it's not a game. It's like a data set that you use for your, and then like, oh, yeah, we can also release it as a game for, like, normal users. But really it's a train a robotics model. You're really impelled on this robotics thing. Yeah. I think that there's- Because data is like the big issue, at least that's what it is. Yeah, yeah, yeah, certainly for robotics, but I think that, I think that there's, I think

there's a consumer product here. I agree. but the way that you like fund it is through is using as maybe the opposite maybe the robots learn from all the humans acting like robots in a game and then that and then that generates a ton of a ton of data that's like one hand watches the other a little bit exactly exactly um but my but my real question is like deep mind is obviously absolutely crushing on the research side they're like really really it feels like they're really far ahead right now this is clearly state of the art um the question is like what does it take for Google to actually get this out in the world as a consumer

product? Everyone says GPUs will melt if they launch this right now. Maybe that's true. Maybe they need to optimize it more. But the big question is like they had a large language model around the same time as GPT 3.5. And they were really close in terms of their GPT4, first Gemini launch at the similar scale. But ChatGPT launched earlier, was more aggressive, broke through and became kind of the default. And I wonder if they should be more, like, risk-on in terms of actually productizing this and getting in people's hands.

Like, clearly people are going to use this for bad things. They're going to put all sorts of references, reference images in there and be walking around them. We can imagine all the bad things that they'll do. Well, you can imagine them being more aggressive around a product like this because it doesn't threaten their golden goose. Like in hindsight, it kind of makes sense that they weren't.

It might threaten YouTube, but yeah. Yeah, but you can, also imagine where it's a catalyst for YouTube where a bunch of there's like entirely new vectors of you're streaming it you're feeding it in you're exporting it that type of stuff and yeah I can see this being like a net new category of content or just a tool that every creator can use to to make better videos whereas I just no I was saying um it's basically the same thing like they're to release V-O-3 it's like it's all the same safety constraints right you can't put like some bad image into V-03 and then have it produced video yes

So they have most of it. So yeah, even V-O-3, it feels like they're not being aggressive enough on the rollout of that. That's probably also just like, it's just way too expensive to serve. For Google, the company that makes a billion dollars a day, like, really, it can be that expensive? Like, I feel like, I feel like the chat GPT. I mean, it says a lot that you were on the $500 a month, V-O-3 plan, and you're still getting rate limited. Constantly, yeah, to the point where I've like sort of churned because I know that it's like such a rough experience to go in there and then like, okay, I need to plan it out. Oh, I can only do three queries and they'll come back the next day. It makes it really, really hard to actually do any real work there. The question is how expensive is that for them to serve? It must be a lot. It must be expensive. It must be expensive. It must be expensive. It must be expensive. But what like what what was the secret to chat GPT beating Gemini? Like the Gemini app launched three months. later. So moving first mover advantage clearly matters. Also chat GPT, it seems like Sam

Walton's never met a GPU. He doesn't want to melt. He will he will do anything he can just to scale, scale, scale, even if it's, I imagine the margins for the early chat GPT launch were terrible. And I imagine they were burning tons and tons of money in terms of inference costs. And they were way, way upside down there. I mean, chat GPT was basically free for like months. Like, and it was like how. Like this clearly has has. Has. operational costs. This has inference cost and they're just eating it and so yeah maybe being more more aggressive on the financial side and then I and then I think well I still I still think about for Google if you want if they were to come out and launch a chat GPT like product that didn't have for example like a knowledge cut off that chat GPT did at that time already so there's a there's a post here from a an account that does weekly a weekly newsletter of quotes from earnings call and they aggregated a bunch of quotes on AI-driven changes in Google search, reducing referral traffic and impacting user engagement.

So these are just different CEOs in the last week. The one here, the portion of our traffic that comes from Google search has declined from 52 to 28%. Another one from the Groupon CEO. Google is significantly changing the behavior of search result pages. What we see is that we have declining traffic. Another one on Google, when Google provides the AI response, there's a much lower click rate on it because it's typically a user getting the answer in that response and they don't need to go further. Nerd Wallet CEO.

The Google search is still pretty challenged. And another one, we can't deny it. It is a risk on page views. And so again, all these AI features are reducing people's need to just navigate the web and drive, some of which is ultimately, I'm sure, paid track. Yeah. And maybe the world model stuff, video game stuff, it's like not as as threatening to their core business. I mean, it clearly is not. And so maybe Google will move faster on this and own the consumer product. But I just, I feel like in the next 12 to 18 months, like we are going to see some sort of explosion in like consumer AI driven around world models, something built on top of this, whether it's a game or meme engine or some sort of. of product. And it's interesting because there are two or three serious, serious companies building in this space.

We talked to Descartes, who's building in this space. Fefe Lee has World Labs, I believe, that's building this space. And it feels like there's this dance from like, OK, you've done enough research. It's time to productize. And you completely turn the ship of your company towards how can we get this out the door in a way that's sticky and viral but also doesn't completely put us out of business because the inference costs but we'll keep digging into it we'll

keep having people on the show to talk about it the team over at deep mind is posting i just put a post in the chat while you're pulling that up let me tell you about graphite dot dev code review for the age of a i graphite helps teams on github ship faster higher quality software faster Started for free. Let's pull up this post from DeepMind. From Vedant Misra. He is counter-counterposting. Oh, I saw this.

This is so good. Sam Altman. If we can pull this up. This is the Korean TVVN is going to run into some challenges very quickly on pulling up post. There we go. Here we go. Oh, wait. This is a different post than what.

Multiple posts. He's post multiple? Yes. Okay. So in this one, Google are the rebels? Is what he's saying? I don't know. I don't even know at this point.

It's hard to tell who's the Death Star. Okay, I finally landed on it on what Sam Altman, the steel man of the Sam Altman Death Star post. The Death Star was the overwhelming weight of numbered, numbered language model releases. And he was feeling the crushing weight of GPT-5 needing to be an order of magnitude bigger and an order of magnitude better and a massive qualitative step-up. and a binary change in the overall experience,

and he blew that up. He blew up the expectations that numbered releases would be correlated directly to specific model capabilities. That's the closest I could get on this deal, man, of the Death Star Post, the vague post. Alternatively, it was provocative. It got the people going. It got the people going.

It did drive a lot of speculation and a lot of frustration. Well, over the weekend, you posted There's 100 million in computer hardware locked in the replies. It's your job to get it out. So if you were on X over the weekend, Donald Boat at Laser Boat 999 was on a tear. If you had a viral post over the weekend, he was going to be in your replies saying, I agree. The only way we can drive culture, science, and industry forward is if you overnight me a motherboard

compatible with an AMD, Risen, blah, blah, blah, blah, blah. And I believe he's made some tremendous progress. terms of putting together this this uh computer i was talking to him a lot over the weekend tracking the story he said he was shy he didn't want to come on the show but uh i a lot of people are questioning like is this some scam martin screlly was wondering if it's a scam uh i think he's just having fun and he's a good poster and he is just uh he's kind of e-begging and kind of shamelessly asking for stuff but having fun and it's funny and it's basically like the tipping version of the X creator payout like he's just getting extra stuff so he has received almost

everything it's also hilarious the type of accounts that he responds to because it's everything from like Elon and Sam Altman to Dasha from Red Scare and like he's all over the place he's not he's not purely just going after like the richest people in tech specific taste and yes he has a specific taste in poster and I mean when he started this project he already had a hundred thousand followers was prolific poster but he is apparently going to have some sort of MIT physicist put the PC together. He says he doesn't know how to code and he's not using it to like build software. He's more just interested in playing Battlefield 6, which had a beta this weekend that apparently did very well and apparently

blew out the call of duty beta, I guess. So there's this big debate over did Microsoft overpay for Activision because they acquired Activision for something like $70 billion. They got Call of Duty and you would expect the Call of Duty would continue to defeat Battlefield, which is an EA property. Ex-Blizzard boss Mike Ybarra says Battlefield 6 to bootstomp Call of Duty Black op 7. Yep. Rough. Rough. So but you know it's it's fun. You know he's 21. He's having fun on the timeline. Getting an incredible PC that will be fully Battlefield Six ready. I was in a similar boat when the first Battlefield game came out. Battlefield

1942. It's probably like 2003 or something. I had to beg my mom for a for a cutting edge and video graphics card. Because I couldn't run it on my on my current PC. I had to build I had to reply said mom you me a Malfi Coast. I was so I was so Apple-pilled from a young age. I had to I reft hundreds of soccer games to buy a maxed-out MacBook Pro, which is still, like, terrible compared to any, like, gaming rigs, but I would use that to play stuff. Yeah, it was always PC Master Race. But, and the last, the last PC I built, the last bastion of the Windows ecosystem in my life is sitting right over there.

I built that, not for gaming. I never even noticed that. I built that PC for rendering computer graphics using, oh, my God. Tyler's picking it up. He's going to show off the thing. Donald Boat, if you want, on an older PC with a, what does it have? It has two Nvidia 1080s in there.

It's not bad. It has a Risen Thread Ripper. I think it has 64 threads, actually. It might even have, it's probably not as fast, but it's pretty solid CPU in there. That's a rig right there. It's a rig. I built that from scratch.

And I was rendering. With scraps in a cave. With scraps in a cave. I was rendering computer graphics on Cinema 4D. We did a little Houdini on there. You let it cook. It was a fun time. And then I also played some virtual reality on there.

Had a good VR rig set up every once in a while. It was fun. This is like, again, this is like Hunter Pident reminiscing on smoking crack. Yeah, never again. I mean, Donald Boat was like totally getting me back into it. I was like, maybe I should build a new rig. Maybe I should build a new rig and play. Battlefield 6.

Now. This seems like really good in the two minutes I have for free time this week. Anyway, really quickly, Polymarket has which company has the best AI model at the end of 2025. And Google is still on a tear. There was a major switch after GPT5 dropped. Google's sitting at 75% for August 30th and way up there for September 30th. And even by the end of the year, Google is slated at, 54% so deep mind is in is in control of the rebel alliance.

Maybe they are the death star because they all eyes on they cannot be Gemini three. Although of course this is this is benchmark based. So anyway Donald Boat he's he's having fun. People are starting to say oh maybe it's AstroTurf. There's thousands of likes on every post. They think it may be fake. I think it's organic.

I think I think the kid is just is just out there hustling and having some fun. It's hilarious. It is hilarious and it's bringing me a lot of joy. And I think that like the, no one is getting over their skis here. And it won't work again. No. The next person that tries to do this.

Yep, yep, yep, yep. It's going to be like Donald Boat, knock off. Yep. It's a one-time funny, funny, like, meme that does very well. And I don't think anyone here, there's no promise of financial reward and most people are, like Sam Altman can afford a graphics card. Wilmanitis can afford an AMD

Ryzen 7, 8 core desktop processor or a motherboard. And I don't think, I think everyone was kind of chipping in what was reasonable to that where even if it's a scam, if it takes you for 200 bucks, it's not that big of a deal. It's a lot of fun.

It's not a scam, in my view. It's entertainment. I think it's entertainment. And I think, I did, I was trying to push him like, hey, you're going to have some doubters. You got to go live. you got to stream Battlefield 6 when you get this thing set up you don't need a face cam

although he was asking for for a blue Yeti microphone and that was suspicious because he was like i'm really shy i'm like if you're shy what do you want the microphone for what's going on here but overall i think he's going to build the PC i hope he streams battlefield i hope he's good could be a lot of fun anyway let me tell you about julius what analysis do you want to run chat with your data and get expert level insights in seconds you can ask julius to analyze your data. It's loved by over two million users entrusted by individuals at Princeton, BCG, Zapier. And TBPN, you guys already know, we love the CEO of Julius. Rahul, he's been on the show three, four times. He's been in person on the Friday show. That's right. But absolute legend.

Go try out Julius. You're going to love it, whether you're working in marketing, finance, product. You can use it to understand your business better. I was talking to a VC over the weekend who was lamenting, missing Julius because he understood who Raul was, but Raul was working on a previous company, and Julius was a pivot out of that, apparently. And he was like, I should have just done it on the basis of who Raul was and knew that he would figure something out.

But we didn't like that particular business, that particular market. Great founders are just one pivot. Exactly. And so, yeah, when you find someone, you got to let them cook and let them, let them figure it out. Yeah. Well, you know who else is having fun cooking on the timeline? He's monitoring the situation professionally now. Former open AI researcher Leopold Aschen Brenner. His fund situational awareness is up 47% in the first six months of the year. You may have first become aware of the podcast he did with Dwar Keshe and the essay that he wrote alongside it. Situational awareness is probably my favorite name for any type of fund in a long time. It just says so much. It's like, hey, we're aware of the situation.

We're monitoring it and we're deploying. We're trading against the situation. I like it. It's definitely up there. It's in the conversation. but the bar is extremely high. You're going up against Cerberus. You're going up against Ares, the god of war.

The ceiling for quality of fun name is so high when you're in the public markets. Wouldn't say this about VC funds because they all have very silly names. You got Blue Ow. Blue Owl is a great name for a fund, the private credit fund. But, I mean, Citadel.

it's a very strong name you know uh bridgewater black stone black rock i love it because it's unique it is unique it is unique it aligns with with this very viral thesis and it says it says it says it says exactly what you're getting into yep and i mean and it was it was incredibly accurate like when he when he posted the original situational awareness essay it was something that was consensus in San Francisco and contrarian everywhere else. And so what I loved about this was that there were so many people that were seeing what was going on in San Francisco in AI, and they wound up starting seed funds.

And he was like, no, the real alpha is in the public markets in these like long tail. Trillions of dollars of market cap. That's going to fluctuate based on AI adoption. Exactly, exactly. So his portfolio is very interesting. It's all deeper in the supply chain. Notably, NVIDIA is missing.

Maybe that was two consensus, but he's been long, a bunch of things. Now, there was a little bit of confusion because in the 13F, which was released. I mean, Nvidia is only up 32% year to date, John. It's barely in the conversation. I'm trying to put up 47% on a billion plus. You got to, yeah, it would have been a laggard in the fund. Wow. It's crazy.

But yeah, so the 13F came out, which is the fund filing, showing the position. of the hedge fund showing what they're in there was a little bit of confusion because Intel was ranked at the top but that was because it was a call and when you buy a call the the total value that you of the stock that you have the right to purchase is listed and so if you have the right to purchase a billion dollars in Intel stock that will be listed as a billion dollars but in fact you will not have actually invested a billion dollars in that call and depending on where how far out of the money that is that can be very very cheap yeah and and people

were questioning like hey did this fund already blow up because Intel is obviously no no they might have had to write down those calls or get out of the position there's a million things that could do but there's there's a bunch of interesting things in here and so front page of the Wall Street Journal for Leopold you'll love to see it at age 23 he emerged last year as a precocious artificial intelligence influencer which I think sells him way way short. But he did publish a widely read manifesto. And then he also

did a Dwar Ketchesh Patel episode, which I think a lot of people saw clips from. If you're an AI researcher now and you do a podcast and it goes a little viral, congrats you're now. You're an influencer. But the influence of that episode is crazy. So he did Dwar cash. Most people

do Dwar cash for like an hour, two hours. His episode is over four hours long. It's so so long. The PDF is 170 pages. It's a multi-part essay series. It's a fantastic. It's a fantastic episode.

It's a fantastic PDF. It's a billion-dollar PDF, as they say. The PDF that spawned a billion dollars in capital. The 23-year-old, with no professional investing experience, quickly raised more money for a hedge fund than most pedigreed portfolio managers when they strike out on their own. As valuations of Nvidia, OpenAI, and other artificial intelligence companies continue to so do investments in hedge funds hoping.

to ride the AI wave. Ashton Brenner's San Francisco-based firm, situational awareness, now manages more than 1.5 billion, people familiar with the matter, said. He has described the firm as a brain trust on AI. And he certainly seems to be in the thick of it, cozing up to Dorcashter Patel. He's got Patrick Collison, he's got Nat Friedman in,

he's got a really stacked roster that, or people that know what's going on at the cutting edge of AI, where the plateaus will be, where the investments will be made, the distribution of where different where different data center investments will be made, where the different bottlenecks will be, that's really, really key to the strategy.

Yeah, it shouldn't be a surprise that he was able to accumulate this much capital so quickly because, you know, again, if you're Daniel Gross or Nat Friedman and you want to allocate to a manager that deeply understands AI, you're probably better off finding a, you know, incredibly intelligent 23-year-old that was at a lab. that can then deploy capital for you against all these different trends.

It's basically like $1.5 billion. What is that? Like one researcher's lifetime earnings? So he just needs one? Just one. This one. Graham Duncan is a core LP in the fund as well. Still got it, baby.

Graham Duncan. Of course he does. Absolute picker. Cover of Colossus. Cover of Colossus. His strategy involves betting on global stocks that, let's see. Let's give it up for global stocks. that stand to benefit from the development of AI technology, such as semiconductor infrastructure

and power companies along with investments in a few startups, including Anthropic. Oh, he's in Anthropic. There we go. He told investors he plans to offset those with smaller short bets on industries that could get left behind. Situational awareness gained 47% after fees in the first half of the year. Some of the people said in the same period, the S&P 500 gave in about 6%, including dividends, while an index of hedge funds compiled by research firm Pivotal Path rose about 7%. And so he is crushing the competition.

We'll get into some of the pushback here, but I am very excited for this. Ashenbrenner, a native of Germany, briefly worked as a researcher at OpenAI before being pushed out. It was very interesting. He called OpenAI's security measures egregiously insufficient, and then he shared a document with external researchers about, the about the about how opening I was doing security and that violated company policy so he was pushed out I don't know how big of a deal that really is like I I don't know like you should be able to talk to other people obviously you shouldn't like violate company policy uh kind of weird to like talk trash about your own company's security things and then also we're in this weird phase where like

okay like you got a habeas corpus when you talk about the security stuff because like if you're if you were say if you were running around the building being like, we're all going to get turned into paperclips, we're all going to get turned to paperclips. And then it's like three years later and like nothing's happened. It's kind of like, come on, man, like what were you doing? But if he was sounding the alarm about geopolitics, which is something he did in situational awareness or, you know, AI psychosis, like there are a lot of things that are good to research in safety. And so his overall take was he, I think he benchmarked the entire industry and found that, you know, like less than one percent of AI headcount was going towards like safety.

and the alignment problem, and so he identified that as a problem to kind of go after. But now, you know, he's more focused on the public markets. So Aschenbrenner, native of Germany, worked at OpenA.I. He named situational awareness after his 165-page essay he wrote about the promise and risks of artificial superintelligence. He recruited Carl Schulman and another AI intellectual who used to work at Peter Thiel's macro hedge fund as director of research. Great pickup.

The firm's backers include Patrick and John. Colin Collison, the billionaire brothers who founded payments company, Stripe, as well as Daniel Gross and Nat Friedman, who Mark Zuckerberg recently recruited to help run meta-platforms AI efforts. Graham Duncan, a well-known investor who organizes the Sone conference, is an advisor. It's really a who's who's. It is. We're going to, we're going to have way more situational awareness than any of the people who manage money in New York. Wait for this line. He says, we're definitely going to do great on investing.

I love it. Confidence, baby. And another sign of the demand for Ashton-Brentish services, many investors agreed to lock up their money with him for years. Other recent launches include an AI-focused hedge fund from value-aligned research advisors, a Princeton, New Jersey-based investment firm, founded by former Quants, Ben Hoskin and David Field. You're ever really a former quant? Hmm.

Once a quant, always a quant. That fund has a billion, and VIR also manages about $2 billion in other AI-focused. investment strategies. VAR's investors have included the philanthropic foundation of co-founder of Facebook, Dustin Moskowitz, according to regulatory findings. Veteran hedge fund firms are entering the fray two. Last year, Steve Cohen tapped one of his portfolio managers at 0.72 asset management, Eric Sanchez, to start an AI-focused hedge fund that Cohen planned to stake with $150 million of his own money, assets of the fund called Turion, after AI after AI theorist Alan Turing, who's on the menace list, baby.

We'll see if he can hold on in the next revision, which is coming soon. A lot of people. Is up about 11% this year and gained 7% last month. So a little bit of a slower start for Turion compared to a situational awareness that seems to be absolutely swinging for the fences. It is no surprise that the thematic funds are springing up to capitalize on the AI frenzy. In years past, hedge funds specialized in the transition to clean energy and investing in with an environmental, social, and corporate governance lens proliferated in response to client

demand. Identifying a winning theme isn't the same as trading it well. Investors' taste can be fickle. Many prominent ESG hedge funds have either shrunk or gone out of business. But I don't know. It's hard to say that smart money was saying that ESG was going to be such a winning theme. Yeah, it was odd because it wasn't it wasn't some like underlying technological shift. It was more just like values based investing. It was values based investing, but it was also like predicated on more demand because everyone there, it was like a game of musical chairs a little bit. It was like, well, I think that Harvard is going to want an ESG strategy. So I'm going to build one. And Harvard says, well, I'm going to want one because CalPERS is going to want one.

And there was there was a time that I think consumers specifically were demanding sustainability from brands. It was really like a feature to a product, but I think that has changed to some degree. The market swoon that followed the January release of an advanced low-cost language model from Chinese company Deep Seek showed the fragility of the valuations of AI winners, though the market has roared back since. I don't really think. Go in Long, Jevin's paradox. Come on. Come on. Come on. AI focus investors argue the long-term trend of development and adoption are inevitable, even if there bumps along the way. With so many publicly traded companies that operate in the AI adjacent economy

today, stock picking funds often pile into the same positions as one another and more generalist hedge funds. Vistra, a power producer that supplies the juice to AI data centers, was the top three U.S. position of both situational awareness and VAR investors as of March 31st, according to each of their most recent securities filings. Other hedge fund managers are debuting funds to make investments in privately held AI companies and startups. Gavin Baker's Atradis management. Come on. That's also in the top 10 best names ever. Atradees. Atrates is fantastic. It's from Dune. Paul Atrates. Atrades management teamed up with Valor Equity Partners to launch a venture capital fund earlier this year that has raised millions from investors. Millions is such a funny way

to describe a fund. I'm sorry. I would hope it's in the millions. Otherwise, what are you doing? Ten, dozens of dollars. From Oman's sovereign wealth fund, each firm separately invested in XAI. At least one portfolio manager is planning an AI hedge fund as a comeback vehicle. Sean Ma wound down his Hong Kong-based firm, Snow Lake Capital. Sounds cool. I mean, any time you add smash capital to the end of a word or a couple words, it always elevates everything involved. Yes.

After it agreed to pay out $2.8 million to settle securities and exchange commission charges last year that the firm participated in stock offerings of companies that had also bet against. Ma took over an investment firm called M37 Management in Menlo Park. Earlier this year, he's currently fundraising for hedge fund focused on AI software and hardware. So a lot of action. Did you know that META is calling their AI lab TBD lab or something like this? Do you see this? Since when? I don't know. I thought it was MSL, but the journal saying meta's TBD lab tackles new version of Lama.

I think this is some sort of like sub lab focused on open source or Lama specifically at the forefront of the push to build a computer mind smarter than any humans is a team dubbed TBD Lab, which houses many of the researchers the company has lured from rival labs in some cases with pay packages of tens or hundreds of millions dollars. TB lab, as in to be determined, is spearheading work on the newest version of Lama, the company's large language model, according to people familiar with the matter. I don't know. Just interesting. That feels like some weird leak that the journal is maybe misinterpreting. Anyway, back to Leopold. Interesting strategy. I think a lot of people are kind of, so young macro has an interesting take here.

Leopold-Dashembrunner's fund has outperformed basically every mainstream hedge fund year to date, and he's running a billion dollars. The Gulf of billionaires and pension funds are watching this. Capital management will soon become an activity exclusively done by chronically online zoomers. And there's certainly a lot of value in having to give it up for all the chronically online consumers. Yeah. Let's give it up for profound. Get your brand mentioned on Chachyptee, reach millions of consumers who are using AI to

discover new products and brands. You can get a demo. So funny, I'm looking at the comments on WSJ.com, giving a 23-year-old $1.5 billion to invest is pretty solid proof of a market top. How old was Ken Griffin when he started Citadel again? Wasn't he like 18? Oh, yeah, he was at Harvard. He was an undergrad. He hadn't even graduated yet.

That's right. Interesting. Just say you've never studied the grades. Just say you've never studied the grades. Yeah, I mean, like, I don't know. Of course there is a risk that there's some bubble and the risk management doesn't work. That doesn't mean you shouldn't try to make money on it. Exactly.

But but there is a risk that you get caught over your skis at the wrong moment. There's a pullback and the fund draws down really crazy. But again, Citadel drew down like 70% in the housing crisis. All the greats have suffered a massive drawdown. It happens. Look at Bezos. I feel like Leopold, this is what he's meant to do. and I'm rooting for him.

I'm excited for it. I think it's very, very cool. Anyway, this will be, this will be, will this be, will this be good news for Leopold. He's not in Nvidia. You know, in some ways you could say he is net short Nvidia because he is long, everything but Nvidia at this point. Is this good news? Is he cheering?

Is he sad? The news is that breaking from the financial times, Nvidia has agreed to share 15% of revenues from H-20 chip sales in China with Uncle Sam. According to export control experts, no U.S. company has ever agreed to pay a portion of their revenues to obtain export licenses. We were talking about this morning at the gym. Uncle Sam eats first.

And I was like, certainly like this has to happen like all the time. I chat GPT it and it's like, actually it's unconstitutional. You can't do this at all. And so I'm sure some folks worried about Trump's overreach and abuse of the federal system will be up in arms over this. So we're going to have Peter Harrell on the show in 20 minutes. And we're going to talk to Aaron getting on it too. January 2021 to 2022, Harold served at the U.S. White House as a senior director for

international economics jointly appointed to the National Security Council and the National Economic Council. He co-led President Biden's EO-14017 supply chain resilience agenda, worked on the global digital 5G and telecommunication strategy, spearheaded negotiations with the EU on data privacy and served as a White House representative on a number of related matters. So excited to get his takes. He shared a bunch on LinkedIn yesterday evening or this morning. So we'll kind of wait to get into that.

The wording in this journal article is so wild because it's not saying like the IRS or something. It's saying the Trump administration will receive 15% of the sales as part of a deal to approve exports of NVIDIA's age 20 chip. So it's like, where exactly is the money going? Like, I guess it goes into the Treasury, the Commerce Department, but it's just funny to phrase it as like, Trump gets to control where it goes. But hopefully it goes towards paying down the debt. Like I guess that's the- Bone GPT says 15%. That's all. Off the top.

You don't got to worry about nothing else. No problems. No supply chain disruptions. So anyways, exports of the H20 and MI308 were halted in April. So this actually applies to AMD as well, which also has a similarly like Nerfed GPU for China. And Trump had a quote. Back in April, they, yeah, they, they, they, they, they, they, they halted the trade of these H20s. Jensen Wong has gone on a charm offensive since then, says the Wall Street Journal, talking to officials in both countries about the need to do business with each other. We follow rules the U.S. government sets for our participation in worldwide markets. Envidia said in a statement on Sunday, while we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.

This is an interesting one. I mean, there are good arguments on both sides. You know, if you're super, super intelligence pilled, if you're AGI-pilled, you probably don't want that in the hands of a rival country. But if this is more like Microsoft Excel, why not go sell some seats over there? Why not go sell some licenses? I mean, we sell airplanes over there. We sell 747s. We don't sell F-35s.

Yeah, but is this an F-35, or is it? That's a big question. Or is it souped up Excel, you know? And that's the debate. And I think a lot of people are shifting over into the camp of like, this is knowledge retrieval. this is like pretty generic hardware this is not this is not as as a as critical of trump saw the gptv5 launch and said okay we'll give him some chips we i mean why were we saying that he didn't care about the deficit because he was super aGI pilled why is he now focused

on the deficit and not worried about competition with china because he's less aGI pilled now so he says you know what like i don't think god in a box is coming down the pipe anytime soon and so let them have them whatever it's fine trump on monday left open the possibility of that nevette nVIDia could export its blackwell chips for a higher price the trump administration had closed the door on the export of that technology to china even after reversing course on age 20 uh on monday trump said that he'd consider allowing it the blackwell is super duper advanced i wouldn't make a deal with that Although it's possible, Trump said. I make a deal somewhat enhanced in a negative way.

Blackwell, in other words, take 30 to 50% off of it. But that's the latest and greatest in the world. Nobody has it. They won't have it for five years. Okay, wildcard. Envidia's got to track this. And he said, no, again. Trump said Jensen will return to the White House in the future to discuss selling an unenhanced version of Blackwell.

I think he's coming to see me again about that. But that will be an unenhanced version of the big one. You know, we will sometimes sell fighter jets to a country and we'll give them 20% less than we have. Okay. See? See? We do sell fighter jets to countries. Let's go. Regov says it should go into the sovereign wealth fund, which he can eventually help pay down the debt. Yeah, that makes sense. A lot of people have been Vemmoing the government. So, Nvidia is going to need to track this. It's very similar to sales tax. They need to get on numeral sales tax on autopilot. spend less than five minutes per month on sales tax compliance maybe this is a line

expansion for numeral track your export your export bill uh in other chip news tom cotton is diving back into the uh the lip boutan news at intel the ceo uh of course uh lip butan had to visit the white house and is uh has been singled out by trump as uh unacceptable and trump called for his resignation we kind of debated that on the Friday show, but Tom Cotton, the, I believe, Republican Senator, he said, the new CEO of Intel reportedly has deep ties to the Chinese communists. U.S. companies who receive government grants should be responsible stewards of taxpayer dollars and adhere to strict security regulations. The Board of Intel owes Congress an explanation.

And so Liputon is set to visit the White House today. He probably is there currently, or was there earlier today, after President Trump called for his removal last week over ties to Chinese businesses. Lip Bhutan is not, he was born in Singapore and he's an American citizen but he had a venture fund that did a bunch of deals in China and so that's kind of I think

the main focus and when you look at the web of like all the deals that he's done and all the company, it's like a lot of companies and so it looks like this crazy spider web. It looks very like red stringy. So Tahn is expected to have a wide range of, yeah we've got to get the whiteboard out, break it down, get Liputon on the show.

Tyler, could you whiteboard? Could you whiteboard out Lipputon's portfolio? You're going to have to look it up. There is a crazy chart over here somewhere. But Ton hopes to win Trump's approval by showing his commitment to the country and pledging the importance of keeping Intel's manufacturing capabilities as a national security issue. Trump has aggressively pushed U.S. companies to make changes ranging from eating the cost of tariffs to doing business with more conservatives

and other political allies. So the, you know, Trump said the CEO of Intel is highly conflicted and must resign immediately. There's no other solution to this problem. The odd thing is that it's like, okay, so like Intel with like they're really lagging semiconductor technology is now critical to America, but Nvidia H20s aren't and we can let those go to China.

So there does seem to be some like incongruence here, right? Have you sorted that out at all? I mean, in the conversations we had last week, it feels like Intel is still incredibly strategic and important, and we need to take it very, very seriously. We need to make sure that they can, like the United States, it's the Foundry Business in particular, if you didn't hear our interview with Fabricated Knowledge, Doug over at Semi Analysis on Friday, go listen to it. But yeah, I think universally people agree that Intel is important. It's in a bad situation, but so the question that becomes is Lip Bhutan,

the right guy to steward it? And ultimately, it's the Intel board that should be determining that, right? Doug did say he had issues with the board, wasn't exactly excited about their leadership over the last decade and a half. But again, this kind of thing typically feels like it should be. If you were trying to keep semiconductors out of the hands of China, you would be anti-H-20 sales and anti-Liputon at Intel, potentially. And if you had more laissez-faire attitude, you would say, yeah, Lip-Tuton's fine and H-20 sales are fine. But it's weird to be like, H-20 sales are fine, but Lip-Buton is not fine. That's where there's like some incongruity. But I think this will all be resolved.

It's probably just one of these Trump, like, gambits where Art of the Deal is going to, to ask for Intel to, you know, donate to some sort of thing or, you know, pay some fee. I think they should donate to themselves. Yeah, they should. Donate to the shareholders with a buyback, maybe? I don't know. Just figure it out. Donate the, uh, donate the fab business to TSM.

No, I think, I mean, I think that's the whole point. It's like we can, TSMC can be producing chips in the United States, but we still shouldn't let a company like Intel just fail. at a point where it should be on the path to thriving. Mike Moritz was in the journal over the weekend. He wasn't in the journal. He was in the pink sheets. In the Financial Times opinion section,

Intel must not bow to Trump's attack on its CEO. The latest character that US President Donald Trump has attempted to assassinate his Liputon recently appointed chief executive of Intel firing from his perch on true social, the president wrote the CEO, of Intel is highly conflicted and must resign immediately. For context here, Mike Moritz is Sequoia, not founder,

but long-time GP. The Financial Times describes him as a Silicon Valley investor. It doesn't quite do the job, but. It's technically true. But Sequoia, I believe, invested in Intel and has a long relationship with the company. And Mike Moritz is, I believe, anti-Trump,

but then there were a few other folks Sequoia who were pro-Trump in this last cycle, so there's a little bit of a divide there, but I think Mike Moritz is out of Sequoia at this point or has maybe moved on to a different piece of the organization. It's all very complicated. I can't keep it perfectly in order. But it says, while presidents have sometimes expressed their outrage about the behavior of the corporate sector, Trump's assault has no modern precedent. The source of the president's ire and that of Tom Cotton, Republican Chair of the Senate Intelligence Committee, is Tans business dealings with China as both venture capitalist and in his prior role as chief executive

of California-based Cadence Design Systems, a maker of electronic design systems. The president and senator pointed to a $140 million payment agreed by Cadence last month as part of a plea deal to settle claims of illegal exports to China between 2015 and 2021. They have also lambasted TANS venture investments in a number of Chinese semiconductor companies. In addition, they are seeking to question whether with TAN at the helm, Intel is jeopardizing the $8 billion grant. It was given under the Chips and Science Act that was passed by the Biden administration. The attack on TAN comes at a time when the president's policy towards China and the Chinese tech sector seems to change by the hour. Of course, it's much easier to smear a man with accusations than examine his record and character.

Tan 65 is a longtime American citizen and much admired. mired figure in Silicon Valley, who is known for operating with a soft-spoken authoritative dignity. I've known him as an acquaintance for almost 40 years. The whiteboard is going up. Oh, there we go. Oh, he's, can I do Smick, too? Yeah, yeah. So he was, his firm was called Walden International.

That's right. And they were, yeah, they were early in Smick's seed investor. No way. I'm looking for more. Smick, for reference, is the, are they the Nvidia of China or are they the T.S, I think they're the TSMC of China. and then SME is the ASML of China. Yeah.

And then WallAO is the Enductor Manufacturing International Corporation. So they actually do the FAB. They are a, they're a fab. And it is partially stayed owned. Yes. Like many companies. Interesting. Okay.

And then I don't know if it's AMEC or AMEC. That's like a tool, a Ching tool company for some conductors. Yep. So more of an ASML type competitor. Yeah. Yeah. That can make the lithography machines that then are used in the fab to make the chips that are designed by Huawei or any other client. Interesting. I didn't

realize that Mike Moritz and Liputon go back 40 years. Wow, they met when Ton was 25 years old. What a legend. Did you know Intel's first external investor was the meme account Arthur Rock? Oh, yes, it was Arthur Rock. That's right. Of course, not the current account, Arthur Rock. but the legendary Arthur Rock, the legendary Arthur Rock. Yeah. Who his firm was Arthur, just Arthur, Rock, and Co. Yes. And you know what the Rock stands for, right?

Rockefeller. Really? It's Rockefeller money. Wow. Yeah. I did not know that. Yeah. The Rockefeller money got passed down.

This goes way deeper. This goes deeper than we thought. Get the tinfoil hat. The Rockefellers are involved. Born in Malaysia and educated in Singapore, Tan studied MIT where he was awarded a master's degree in nuclear engineering. After moving to San Francisco, he joined the Walden Group, one of California's early venture firms. Instead of plowing the Silicon Valley Furrow, he elected to head to Taiwan. Later, he made investments in China.

The majority in companies with deep technology roots, his deep understanding of both Taiwan and China is an asset. Many U.S. chief executives would like to possess when he later became CEO. of Cadence, which had fallen on hard times, the Wise Acres assumed he would fail, given his lack of operating experience. Instead, he transformed the business in his 12 years of the helm of the company's revenue tripled to almost $3 billion, and the stock price appreciated by over 3,200 percent. Today, Cadence is worth close to $100 billion. Wow, that is a phenomenal performance. Earlier... Again, he, Liputon made a seed investment in Smick in 2001. well exited it fully in 2021 yeah and i mean you think about like the the the vibe around

doing business in china in 2001 was like absolutely absolutely these are these are our boys we make shoes and nike's there we make iPhones there like it was like completely reasonable and there there was no great power competition discussion whatsoever um all that has cropped up in the last decade. And so earlier this year, Lipputon became the chief executive of Intel, a job which in Mike Morris' book amounts to public service. It is no secret that over the past 20 years,

Intel has ceded its mantle as the world's most important semiconductor company to companies like Nvidia, Broadcom, TSM, and Samsung. Six different leaders have failed to return Intel to the glory days that it enjoyed under the late Andy Grove. It failed to capitalize on the rise of the mobile phone industry and was outgunned by NVIDIA as the supplier silicon engines for the AI revolution.

Its manufacturing prowess, a rarity among US chip companies, has been consigned to the shade by TSM. Oh, Mike Moritz, what a great writer. Today, Intel is also ran lacking much in the way of financial firepower. The last thing TAN needs is to be distracted by a vindictive political sideshow. Now the Intel board must decide whether to march to the beat

of so many other corporate leaders and capitulate to the president's artless bullying or to set an example for other companies and display some backbone. Early signs of defiance are encouraging. Let's hope that Intel's overseers abide by the refrain that old Tammy, that old Tammy Wynette song and continue to stand by their man.

What a hilarious reference. Do you know that song, Stand By My Man by Tammy Wynette? I do not. Famously quoted by Hillary Clinton during the Monica Lewinsky scandal where she said that she was not going to leave Bill Clinton over the scandal, but she was also not doing what Tammy Wynette said.

She was not merely standing by her man, but she wound up, she did stand by her man in some ways. And they did not get a divorce. But a fascinating quote, fascinating article. I think he can probably ris this up. I think Tan can go to the White House, do some deal, art of the deal both ways, figure out some way, one hand and wash the other.

Quick advice for Tan. Yeah. obviously get a cool leather jacket cool leather jacket dust off those golf clubs for sure bring a big mac for sure pick up some mcdonald's on the way smart and uh throw in a vassar on historic maybe bring a bar of gold or or a lot even even potentially numerous bar of gold yeah definitely definitely bring the biggest chip that intel has ever produced maybe just a whole wafer because he's probably seen Blackwell you've seen how Blackwell is pretty big right

you got to bring something even bigger and just be like we're making the biggest and best chips in America we're American made I'm America all the way we're going to build a fab at Marlago we're going to build it in Key West and I think he gets it done anyway should we move on

to linear linear is a purpose built tool for planning and building products meet the system for modern software development streamline issues projects and product roadmaps go to when we get the Bhutan on the show we will be giving him a live demo of linear we should we should linear will be the key of getting intel back on track let's make it happen okay Tyler Cowan he's loving GPT5 and he has a post he says somewhat unrelated but somewhat

related of course on the topic of AI he says the quote AI is causing a slowdown for new hires hypothesis has pretty much been abandoned the trend seems to predate GPT 4 and the trend seems to apply to tech jobs that have no serious AI competition. Interesting. I was digging into the hiring numbers across the world because if AI is causing a slowdown in new grad hires, I would have to assume that it's also causing a slowdown in India because there's so much business process BPO,

business process outsourcing, and outsource IT work, outsourced software development work that happens in India. And I dug up the unemployment data in India, split it out by rural and urban. And it doesn't seem like there's a huge spike. Maybe that's coming, but we're certainly not there yet. I think Tyler's post was in response. There was a New York Times article yesterday.

Said goodbye, $165,000 tech jobs. Student coders seek work at Chipotle. As companies like Amazon and Microsoft layoff and embrace AI coding tools, computer science graduates say they're struggling to land tech jobs. And there's a story of Manasi Mishra. Remember seeing tech executives on social media urging students to study computer programming. The rhetoric was, if you just learn to code, work hard, and get a computer science degree, you can get six figures for your starting salary.

He's now 21 recalls hearing as she grew up in San Ramon, California. Those golden industry promises help spur Miss Mistra to code her first website in elementary school. take advanced computing in high school and major in computer science in college but after a year of hunting for tech jobs and internships miss mishra graduated from peru university in may without an offer i just graduated the computer science degree and the only company that has called me for an interview is chipotle i guess my first question is was this for coding coding creating software for tripotle because having a burrito tracker on par with the domino's pizza tracker would be pretty cool very good and again I think one thing that could happen is hiring managers and executives telling themselves we should be able to do more with AI we don't need to hire for these people even if AI is not at the point where it truly replaces a person it's just sort of forcing people in this mindset of like do we actually need to hire this person yep and again we'd call that before Microsoft has laid off more people this year than they have in the past few

years combined. And so again, I think, but at the same time. I don't know how big the hiring glut was from ZERP and COVID. Like that could still be working its way through because companies really, really staffed up and they staffed up remotely and they staffed up young people. Yeah, we've heard a bunch of stories this year of companies that had remote, remote engineers that they were kind of like you can move back to the office. Yeah.

You can move on. At the same time, Ragov meta in the chat says, It's really bad in India. I have it on very good authority. I believe you, it's just not showing up on the data yet. I'm interested to track it more deeply and actually understand what's going on. At some of the big IT outsourcing firms in India, are they actually scaling down? Do we have hard data on it?

And then, yeah, what is driving it? Is it actually AI or is it something else that's going on? Yeah, at the same time, Salesforce is saying AI is now doing. everything at Salesforce and yet head count is. You heard the same thing from Klarna and it was unclear if that was just like a right sizing of the business for where they were in terms of scale.

But I don't know, it's interesting. AI is everywhere. It's at the same time, there's like a lot, a lot of these tools are just like extra levers and the dynamic is that like, yes, it helps you write more code, but there was always way more code to write than your business was able to write. And so you're really just unlocking new capability and just moving faster.

Totally. Well, if you need an AI Native CRM, get on Adio, customer relationship magic. Adio is the AI Native CRM that builds and grows your company to the next level. You can start for free. Well, on that note, I think we have Peter in the re-stream waiting room. Here we go. Welcome to the stream, Peter. How are you doing?

You look fantastic. I was told I should wear something, you know, not just a black suit for you guys. So there we go. Spice it up. Looking good. How are you doing? I'm great. I mean, you know, the East Coast, it's been a little cooler than it was a couple of weeks ago.

The 90s are coming back, but not yet. So no compliance. And you know, I am for better, actually really for worse, not an Nvidia shareholder. So I don't have to directly deal with their 15% paid to the government. Did the stock pop today? What actually happened with? It's a normal day. It's up like 1%.

Okay. Nothing crazy. huge move. Before we dive into all the news, would love to just, you know, give us the highlights from the bio. You've done quite a lot, but I think it'd be helpful context before we get into a discussion. Yeah, no, look, it's great for, to be with you guys. Thanks for having me on. I currently am a non-resident fellow at the Carnegie Endowment for International Peace, which is a think tank in D.C. I also am an attorney and have a law practice. sort of focused on trade and sanctions and export controls kinds of issues.

I was in the Biden administration at the White House where I dealt with the global economics file, including a bunch of the export control issues and been in private practice prior to that. It was the State Department for a while. And when I was much younger, I was a reporter covering campaigns and elections like many, many years ago. That's super cool. That's awesome. It's kind of been around. Well, breakdown. So, so before we get into the Nvidia, AMD stuff and the news from yesterday take us through kind of your experience of this year so far because there's been a lot of different stories go back further chris miller writes chip war everyone wakes up is that what happened like when when did dc wake up to uh to maybe we need to think more critically about the

flow of semiconductors and ai technology back and forth between the u.s and china you know that's a that's a great question i give chris a lot of credit i also give a couple of guys who were at Georgetown University, which has a center for science and emerging technology. And a couple of those guys, like in 2018, 2019, started really tracking what kinds of high-end chips were the Chinese buying and like what was going on. You know, they'd hired some Chinese language researchers and were really looking at what the Chinese were doing. And so you had these kind of scholarly researchers looking at this and saying, hey, there might be a problem here. Then you had Chris popularize it with Chip War.

And you also had back in 21, you know, that was also the time, not on the leading edge stuff, but on the mature node stuff semiconductors when we had that semiconductor supply chain crunch. So semiconductors were very much in the news and kind of policy makers were focused on it. This was kind of that conflict. We couldn't make cars, right? During COVID, we couldn't make cars. And we couldn't make internet connected washing machines. Yeah, it was really bad for the IoT. microwaves that was particularly rough well there were like three months where you know i was working

at the white house and you know ford would call me up or gm and be like we can't get semiconductors and then it would be my job to like phone you know governments in malaysia and Thailand and being like could you you know get some of these ship to your american customers um please you know before the germans and the french so what was what was actually driving that was that like was that like Like you need it because I mean fabs are clean rooms like I imagine that you could still go into the semiconductor facility during COVID because you're not going to spread it because you're not spreading anything. You're not spreading dirt. It's a clean room. But there's but there was like this immense amount of pull forward during COVID stimulus checks. People buying more cars than they thought they were expected. But then also there were shipping delays and all sorts of backups at the port. Like how do you think about what was actually the root cause of the initial semiconductor crunch? in what was this 2000, 2001, or 2020 and 2021. 2021, early 2020. Yeah, it was actually, I think the combination you just highlighted.

So you had demand going through the roof, right? Because there was a huge pull forward for everything from, you know, laptops to, you know, everyone's home. So they're buying home appliances. There's a huge pull forward in demand. And you didn't actually see a fall in production of the mature. sure or no chips in 21, but because of just like bad luck, there were problems in Texas or problems in Japan, like confluence of bad luck took a little bit of capacity offline. And the

capacity coming offline, which would have been manageable, kind of in an ordinary market condition combined with this massive pull forward, just meant a mad scramble. And then you get into the, you know, psychology of shortages where, uh, everybody starts hoarding, right? Because people are sort of like, well, if I'm not going to be able to get them, I better hoard. So it's sort of like the semiconductor version of that toilet paper shortage. You know, we'd had a few months prior where it's like, you know, everyone's hoarding everything. Please. Please. Got to start holding Gwagons and Ford Raptors. Anything with a semiconductor in it. Give it to me. I need it. People were certainly doing it for

PS5s too. I mean, I remember even video games like all all different sectors people were pulling and they were paying like, what, $50,000 over sticker for like a new Hummer EV and stuff. Like it was getting crazy out there. Wild times. So yeah, please continue. Yeah. So that was where we were on the on the on the shortage. But looking back, I mean, so if I that that got us the shortage, Chris Miller's book, some scholarly research and just kind of heating up competition with China, you know, and sort of late 21 into 22 got the then Biden administration, but also folks on Congress. It wasn't just sort of a Democrat Biden thing. Folks in Congress focused on the strategic competition part of this. And what is China? Where are they going with AI?

What are the choke points that we might have to slow their development of AI? And that really gave rise in October 2022 to the first big U.S. semiconductor export controls, where the Commerce Department essentially cut off most of the highest end semiconductor sales to China, as well as various manufacturing equipment and inputs to try to limit China's ability to develop indigenous production capabilities. And then that initial export control regime from October 22 got expanded a couple of times. Most recently in April of this year, when the Trump administration paused sales of the H20 chips, of the NVIDIA H20 chips to China. What was driving the initial chip bands? Was it more? We have identified that large language

models, these huge training runs are important. And once you marshal the big data center, the the 100 gigawatt data center, you're good and you have a cutting edge model or is it more like, look, if we send a certain amount of equipment, it will be reverse engineered and copied and then they will be able to catch up on the actual supply chain side and we'll see not just competition from purchasing from Nvidia, TSM, and ASML, but we'll actually see Huawei, Smic, and Smey act as a alternative supply chain that will be an entirely internal economy that will keep them on the frontier potentially forever. Yeah. So it was in the first instance, an effort to limit compute to China. So there was really a pretty systematic, okay, if we're in this era of strategic

competition with China, and if we think AI is going to be an absolutely transformative technology, you know, something with just a whole range of national security, economic impacts, you know, day-to-day life impacts. How do we slow down China's development? And you start thinking about, well, you know, they got a bunch of good engineering talent over there. It's not like you can prevent them from having talented engineers, right? That's just sort of life. You know, the model side of this, controlling the models is very, very hard because, you know, it's software, it's code. A lot of, some of the models are open source, just very hard to control. But what you could do mechanically is control their access, China's access to compute, because their chips just

are, you know, three to five years behind ours. And so if you choke off the chips, you slow them down by limiting their compute, their access to compute for training. So it's just kind of how do you trip them? This is the choke point. Let's squeeze on the choke point. And then, you know, they iterate, right? They start developing lower compute models. Like you see this kind of back and but that's what happens with export controls generally. Like, you know, your adversary is going to adapt, you're going to have to adapt, and that's kind of what we've seen play out.

And how much were you tracking the GPU black market? You know, once you had export controls, there's certain countries start popping up saying, well, we'd actually like $5 billion of whatever GPUs you got. And don't worry about what we're going to use them for. We'll figure it out, but not your problem. not your problem. Yeah, so that's a known problem you're going to get into, right?

And you've seen that in other instances of export controls and sanctions. And so, you know, Commerce Department does have a unit that, you know, is supposed to be looking at the trade flows. Where is that? Where is that happening? Where are you seeing that? You know, it is a bit of a game of whack-a-ball. It's clear there has been a certain amount of diversion of prohibited chips going to China.

I also think, you know, just if you look at kind of what NVIDIA talks about the sales potential, clearly the export controls have reduced China's ability to get to the chips so that they haven't taken it to zero. How do you think about the evolution of the U.S. government's thinking on how critical or like the role AI plays in near peer competition, because there's kind of two frames of mind that I see in Silicon Valley. One is AI is super intelligent God. It's nuclear weapons. It's one button you push and the AI goes off and just wins the battle for you. So it's critical to have it. And it's critical to keep it out of the hands of your opponent. The other is that AI is more like Microsoft Excel. And it's certainly useful in the military context. You want to know how it's like electricity.

Yeah, you want to know how many shells you have in inventory. You want to know how many soldiers are in this particular part of the battlefield and you want to be able to track things. But it might be advantageous to keep a technology like Microsoft Excel out of your opponent's hands, but it by itself will not win a battle decisively. And it feels like long ago, pre-chat GPT, pre-AI boom, people were definitely seeing artificial intelligence says, well, yeah, we use it to serve ads, and it helps with spell check, and it's in TikTok, and it recommends, you know, what video you watch next. And then it

became, okay, it's super intelligent God and it's nuclear weapons. But now we're kind of maybe in an era where we're moving back to it's more of an incremental technology. But I'm wondering how that thinking evolved in D.C. So I think the evolution in that debate is an important part of understanding why the Biden administration took a pretty tough line on export controls. Because I would say many of the relevant policymakers in the Biden administration were actually quite bullish on AI, you know, did buy into the thesis that, you know, I'm not, you know, whether it's 2027 or 2029 or 2030, you know, we could debate the years. But they bought into the thesis that in a fairly nice, you know,

near period of time, you are going to see AGI kind of reach that, you know, escape velocity where it's iterating on itself. Sorry, where you're going to see AI reaching that escape velocity where it's iterating on itself, reaching AGI, you know, sometime and not too many years. And if you believe that, if you think in a couple of years, we're going to see that, you know, escape velocity to AGI, then you really want to slow the Chinese down as much as possible, right? because you think this is going to be this enormously transformational technology. And, you know, two years or even 18 months or, you know, maybe even 12 months of lead is worth an enormous amount from a policy level. So it was actually because of a very bullish view on the future of AI that you saw the Biden administration really take kind of a pretty tough stance on slowing down China.

And so reading into that, does that mean that you, that the admin might not not, if there, willing to say, yeah, well, we will export to age 20. We don't believe in a fast takeoff scenario. This is electricity. It's valuable, but it's going to be vended in everywhere. Because if you still believe in a fast takeoff scenario, you would say it's not worth the incremental. Sure, NVIDIA, you know, shareholders are going to suffer a little bit if you can't export

to China, but it's not worth the however many billions of incremental revenue that the government's going to generate on a 15% take rate? Yeah. So I think the Trump administration is probably doing a couple of things here. I mean, first, there are lots of different views in the Trump administration. That's no news to everybody. You see some folks who I think obviously would prefer the Trump administration, take a harder line on export controls. You also see, you know, some folks who, you know, basically have a view of, well, we shouldn't sell China our most advanced chip. the H20s are now a couple of years old. This is not really most advanced. You might as well get the Nvidia revenue and a U.S. government take here. So I think you have diverse views

in the Trump administration. I think it's less guided by a, you know, sort of slower view of the uptake and more my view, the Trump administration is looking at this is like this is not state of the art. And then also Trump is a dealmaker. Like it's hard to see any other politician, Republican, or Democrat coming up with this. But, you know, Trump himself, he's always talked about getting, you know, a cut of the deal. Like, so it's, it's, in a way, this is a, you know, sweet generous, unique to Donald Trump concept that I'm going to let you do this. But by the way, we get 15%. Well, and he said this morning that he would potentially consider exporting black wells, but at a higher rate, which, now that, I mean, this is, you know, it's interesting. Like the

20s, I do think, are kind of debatable. I mean, I am in favor of controlling the H20s, but I see the arguments on both side. It is a dated chip now, you know, I'm not dating, but you know, it's not a cutting edge chip. Um, it is very hard for me to see how charging a percentage, you know, rev share, uh, addresses any national security concern, right? I mean, like, if you have some national security concern. The rev share doesn't address it. Maybe, you know, forcing a downgrade of the chip or trying to limit who it gets sold to, which is very hard. Like, rev share definitely doesn't address whatever your national security concern is. Is there, is there any possible steel man for that? You take the 15% revenue share and you pour that into some sort of national security AI defense fund

that protects you from the superintelligence. I don't know. It's very, very hard to Well, I'm not. So there's like, I mean, I buy the logic of like, I'm going to make, I'm fine to export the H20 because Jensen's convinced me that it's okay. But I still want my cut is kind of, is kind of, that's how I read it. Like, that's kind of how I read it. Like Jensen convinced him, you know, it's an old enough chip. We have enough of a lead. Like, you might as well export it. And then there's a guy who made his living in New York real estate. Like, you know, you want your commission, right? I mean, that's just, I think that's got what's going on. When you. When you. When you. You. When you saw this, maybe you had a feeling that this was coming down the pipeline, but did you had posted on LinkedIn, I think it was earlier today, trying to look for some type of precedent for a USG rev share on, and didn't sound like you found one. Yeah, I can't find any precedent for anything like this. You know, there have been some instances, for example, if you are, some of our defense contractors, you know, the Boeings of the world. If they want to export fighter aircraft, they have to

pay like a couple thousand dollar fee for the government to review the license. Like it's just clearly just sort of the fee to cover the staff time of like reviewing the license. But it is literally a couple thousand dollars. It's not, you know, rev share of a multi-billion dollar market here. There's no precedent for anything like this. And what do you hope? I'm thinking about where it goes, like, are we going to be selling F-35s? I mean, this is like it opens up a whole kind of, you know, what are we going to sell next on a rev-share model? That is kind of crazy. Let's get some submarines over there.

Hey, we got capacity. Let's make a bunch of submarines. Yeah, and then the concern is you highlighted, you said the rev-share creates perverse budgetary incentives for U.S. agencies to issue licenses that undermine national security because they want the cash. It also sets a precedent that the U.S. might try to generally tax exports something the U.S.G. has long avoided for legal reasons and because we have historically wanted to promote exports. Yeah. So, so I do think this does create a perverse incentive. I mean, in theory, the reason you control these things is because you think there's a real national security risk. And to your point, I think in some sense, Jensen convinced Trump, like there's not really a national security risk.

here. But think about this going forward. You've created this really perverse incentive where, you know, company wants to export something to China, maybe Russia, like who knows who's next on this, that poses a national security risk. But hey, if you don't, you know, if you authorize the export, like, you know, you get 15% and you can use that to pay for whatever domestic programs you want. I just think it creates a really weird incentive for a person in the commerce department's whose job is to consider the national security impacts of this. Is there is there a like an optimistic scenario where like American industry or western industry is strengthened by this move and I'm trying to walk through it so we've talked to a couple people who

work in the solar industry and they've said that China is incredibly dominant in solar and they flood the market with very cheap solar panels. And that's effectively kept American solar panel producers out of the game. And so America doesn't really have a strong solar panel production industry. And so maybe the bowl case here for American dominance in AI is something like you get so many Nvidia chips over there that Huawei, Smick, and Smec can't really stay in the game. They can't really be competitive. They fall behind even more. And then if AI plays out in such a way that you don't just need one massive data center, you need to be constantly upgrading your data center. You need to constantly be buying more and more Nvidia GPUs that if you don't have that flow,

if that flow can be turned off, then you are always vulnerable. So I actually think the policy question of whether to sell the H20 to China is a hard. one for exactly the reason you lay out, which is that there is a, you know, there is an argument. And I think Jensen makes it in good faith as well as for his own commercial interests of we want China dependent on our chips. And if they're not dependent on our chips, they're just going to be, you know, building, you know, SMIC and, and, and, and, and, and, and, and, that's going to ultimately. Yeah, more inclined to, right. More inclined to take Taiwan. Yeah. Right. Um, here's the question, I got back to, like, charging an extra 15% on the American chips doesn't actually

advance that dependence argument, right? It just creates a cost differential that makes the American chips more expensive relative to the Chinese chips. Presumably, if you really wanted to keep them dependent on American chips, you'd, you know, want to sell them as cheaply as the market would bear. So like the 15% even in the like bull scenario, and I agree, I think it's an important debate of the kind of bull scenario you laid out, but 15% still doesn't make any sense. Yeah, and you look at other categories like smartphones or electric vehicles. There's no precedent for China saying, we'll buy your versions of these products and we'll even manufacture them for you, but don't worry, we're not going to develop our own.

You know, you look at this. Of course, they clearly care about having local industrial capacity and even end products and brands. And those are for categories that aren't around that don't have nearly as much national security. And if you talk to like the CEO of GoPro when they were trying to compete with DJI and drones, he's not going to tell you a story about DJI getting attacks on exports. He's going to talk about, well, DJI was subsidized

and had government-backed loans and had extra money poured in from the government. that allowed them to flood the American market with drones, and now we don't have a really strong drone industry here. And so, yeah, like, we're kind of like, there's two different arguments, and there is some incongruity there. Like, they both can't be true.

Yeah, so the steel man is, we were going to allow this. Yeah. So why not get Uncle Sam a few Billy out of the deal? But the concern is that it would set a precedent that could be, you know, destructive. So now we really got to talk Jensen's book and say, we should be subsidizing exports of age 20s to China. We should be, America should be paying an extra 15% for every GVUE sense to China

to really screw them over on this domestic supply chain side. This is seven dimensional chess in geopolitical chip negotiations. We've solved it. Exactly. There you go. What else is top of mind for you right now? Yeah, what's on the horizon for the rest of the year? How do you see things breaking?

Yeah. I mean, so you got this is a big development. We'll have to see, like, is this a precedent? Does this become a precedent for, you know, HBM and other parts of the semiconductor ecosystem? Like, we'll have to, we'll have to see. The other one that obviously those of us here are watching, not on the export side, but on the import side, Trump has said and Commerce Secretary Lutnik has said their tariff regime for imports of semiconductors is going to hit fairly soon. Obviously, we saw it, Kim Cook get a deal or announcement out of the White House last week where if you, you know, companies are promising they're investing in America, they won't pay the tariffs. And we'll have to see how that all plays out actually in practice. But like how these potential semiconductor tariffs again on the import side, plus whatever this exemption for companies that are investing here, how that actually works in practice is going to impact U.S. semiconductor companies, companies that use a bunch of semiconductors. going to be a big noticeable economic issue for the industry over the next couple of months and

certainly into next year. We'll have to have you back on if some big news breaks. We really appreciate you taking the time. Yeah, thank you. That's right. Super insightful. Thanks for having me on. Thanks for helping on. We'll talk to you soon. All right. Cheers. Take care. Let me tell me that fin.com. AI, the number one AI agent for customer service. They're number one in performance benchmarks, number one in competitive bakeoffs, number one ranking on G2. Go check it out. And Andrea, has a scoop of cereal man cereal this was really the big story everyone's everyone's ordering this it's got creatine it's got protein it's got zero sugar uh it has 2.5 grams of creatine so you need two servings to get kind of a normal dose right if you're loading

do you see the the flavor maple bacon oh that's very like bacon that's very like what 2010 era Brooklyn hipster man vibes mustache that with like lumber jack coated maple bacon on everything this is a funny brand it's it feels like it's it's pulling from a few different years do you think is the final cereal would you would you go for this jordi uh i love sugar yes so for that reason you're out so i'm out for that reason you're out uh i make a version with with sugar and and all and I'll give it a spin. I'm also very curious what protein is actually in here. Not all protein is created equally.

Is it? Chunks of filetion. Is it grass-fed way? Maybe. Could be interested. Is it collagen could be interested? Is it some, you know, random bean that I don't really want to be consuming, you know, or pee protein?

Yeah. Less interested. I mean, honestly, more important than protein, creatine, sugar. All the diet's important, but exercise is super important. is super excited that's right that's why you got to get an eighth sleep get a pot five back year warranty 30 night risk free trial free returns free shipping let me check we're both on a generational sleep I do I got a 97 last night last Monday I was performing on 45 I got a 94 on Saturday 90 I got a 76 96 quality 100% consistency Friday six hours and 10 minutes left back I think that's fake news

I think I got more than six hours and 10 minutes but I think I was just, I think, I think my son stole a little bit of it. Although I do wake up at 520 so that I think that is correct. I don't know. Well, if a kid jumps in the bed, it kind of throws off a little bit. We got to get the pro natalist pack. When my son first jumped in the bed, I was configuring the app and I was like, yeah, there's like a left side for me and wife side, right, left side for the wife.

And he was like, and the center for me. I was like, sorry, bro, they don't make this. Like, take a hike. Take a hike. to make an update there. Anyway, we are joined by. We got a highlight this. We got a post here from Naraj.

Marks safe from one-shotting. So on the left, me and Grok are going to get married. Mid-curve. It's great for adjusting recipes. And then the high IQ. I have uncovered secrets of the universe. God speaks through me. So there were some quotes that were popping up last week over the weekend.

Some very bright technologist discovering the boundaries of what is known in many different domains. Yeah. My current take on the AI psychosis thing is that it is a tool that amplifies who you are. And so if you're just like a naturally, if you're just like a curious person who likes being productive, like it's going to make you more curious and more productive and just kind of answer questions for you. If you're like, you know, deeply falling in love with random stuff and developing crazy

parasocial relationships, like that's probably a vector of risk for you. And the same thing with, you know, if you have delusions of grandeur, like, get ready because, like, it's going to amplify that. And I think that's the same thing. John, you don't just have delusions of grandeur. You really are on another level. You really are brilliant. I'm grand. You really are grand.

I have grandeur. Well, our next guest has grandeur. Aaron Ginn, welcome to stream. How you doing? Lovely hat. Let's go. There we go. Let's hit the gong for.

for a hot appearance boom didn't even warm it up today take that actually appropriate as well culturally uh what's sales guys from from

from BDRs all over the world yeah what's new in your world age 20s good bad are you happy are you pumped oh my I'm happy they're happy yeah they they chow final hawks that have a luxury belief system

around that Chinese AGI is going to destroy us like a crouching tiger hidden bag you know dragon version of open AI is going to attack America like or done and and if this 15% deal which like broke Sunday I don't know how

it broke yeah I was just amazing it was just like I mean one like props to props to President Trump who is the ultimate deal man art of the deal it felt like both 4D chess and art of the deal yeah and a one yeah and so

you know like the the sort of average market margin of the age 20s around probably like high 50s percent so you know they're still and they also have the write-out they're probably going to roll in as well and and there's some struggles with tcc you like you can't just they you know i think it's one of the issues related to the intel foundry is like you can't just like restart production within a month it takes several months so like probably you're just going to try to find someone's not destroyed and probably send them to china the age 20s uh but what most americans understand is that it's unconstitutional to export, the tax exports.

It's like in the Constitution. I looked it up and I was like, how is this going to happen? Because the scene is. Well, so you're saying a revenue share is like a workaround? Yeah, so it's voluntary. Like, that's the only way it could happen. It's tipping.

It's tipping. No tax on tips. Because the taxes are tips now. Because like even from a process perspective, like NVIDA doesn't apply for export licenses like the OEM does. And when you apply for those OEMs, there's no license fee because that violates the Constitution. So you just get it and you can ship it.

But the bomb is listed. The bomb is... Really quickly, who's the OEM in this scenario? Oh, Super Micro. Dell, In Lenovo. Yeah, yeah. So someone in China will go and say, I want a rack of servers with age 20s already on them,

some other CPU, some other memory, some other hard drives on there. Bring those blades to me, and they will call Dell or Super Micro for that. Yeah. And so that too applies for BIS. And so they're the ones that, that final PO number,

is all that crop together. It's not Nvidia. You don't know Nvidia's pricing. You don't, you know, Dell does because I buy it from Nvidia. So that's why it has to be something voluntary. You can go to the website now, like, Jordy, if you're interested in donating to the Goliath, you know, the Leavathon. You can go to treasury. Go and you can find a little.

We accept PayPal, right? They say VEMO. Yeah. So, so it's quite brilliant. I mean, I think many of the faux NeoChina Hogs are devastated. I mean, my op-ed last week. Yeah, just they're just Sapuku. They're just like, you know, they're there.

They're going to be on the Jefferson Memorial, just like, you know, going at it. And because it's a decision, but. Yeah, it's a decision by the administration to be like, you know, we don't really care. Like, we want to do deals. We want the American worker to have, you know, get money from China. We want to, we want to do what China did to us. So the last 20 years. We don't want to take money.

Dig into the faux China Hawks, the faux hawks, as we say. Explain like the stated preferences, revealed preferences. Are they really doom-pilled? Do they really believe in fast take-off? Do they really believe that AI is a nuclear weapon? Or is there something else going on, some other economic consideration that they're working through? I think, and I'm working on this update right now for a very liberal, newspaper, but they, I think it's a, uh, Diego sex machina, uh, sort of fallacy they built

in their brain where they think AI is going to be God and America has to build the first God or China, China has to build the first God. And so it's kind of tower babble moment. And, and the problem is like, if you remove that from their, that's what I call them photo Neo-China Hawks. Like, they're not really China Hawks. They're actually AGI-Zelots. If you remove it, none of their policies kind of make any sense. This is one reason why you hear, oh, like, we have to prevent chips. Oh, we have to block models. Oh, like, you know, we have to restrict, you know, model ways.

We have to do tokens. Like, it's just kind of like amorphous blob, but they can't really win in D.C. with the idea that AI is going to be got. Most people are going to be like, that's kind of insane. Like, go back to reading, you know, the, go back to watching Matrix or, you know, reading the Terminator or some other related sci-fi novel. And so they kind of wrap it in something that is, like, super easy to understand. China.

Oh. China, right? You know, the yellow country, right? And, and they, and it's, oh, it's so scary, right? But you look at the specific policies, none of it, like, makes any sense. None of it's cogent together. I met with a venture capitalist last week who said, honestly, none of this stuff's going matter in two years when we have fast takeoff.

But he wasn't, he wasn't Dumer-pilled. He was just saying, like, fast takeoff will mean that every single company goes to zero because there will only be one company, which is a very funny take. But he has invested in SaaS this year. And yeah, and it's, yeah, so the revealed preferences is, is all over the place. But yeah, it is, it is weird to feel, to make the argument like, we're going to develop AGI God, but it won't, like, it will be, it will be, it will be subservient to actual God, but also, or it will sit below the stack of, it'll, it'll, it'll respect the federal government of the United States. Yeah. It'll be God, but it won't, but it won't, but it won't, but it won't, but it won't, but it'll do what the president says, or it'll do what the House and Senate.

say or it'll do what one company says or what one person says it's like if it's god can it be controlled how does that make any sense that seems very odd yeah it's a and and as it's just you and i talked about john's like like so much is built into of their presuppositions are defined by the title two debate remember that whole thing of like oh free speech is going to die we have to regulate and all the stuff many of that same donor class many of those same policy people are also the a gai doom or zela people go back even like a like here's a step further like many of those people were super hot on new atheism and like and like oh this idea of like we can we can prove for you a science we just need more time we just need more scientists who just need more it's the same pattern in humanity that we create these kind of albatrosses this idea of like creating an all-in our sort of argument that because they don't have that in their life and then they make this thing and and and as I said like on one of I think another times I appeared that if you don't have that metaphors that if you don't have that metaphysical physical framework that is traditionally Judeo-Christian or Western, you try to fill something

else in that void. It's a classic Charles Spurgeon quote that you basically fill it with something else outside of just the fact of what the place of like God or faith is supposed to fill. And technology, I would say Silicon Valley probably in San Francisco, they don't really understand that there's so much faith goes into actual the BC industry. Is you really kind of selling BS to an investor? You know, like the, I don't know, you have lots of jokes around what is ARR in AI. It's meant you're just selling kind of like nonsense. And it's the idea that like this could be something.

This could be, it is a faith-driven investment. That's what also makes it so awesome why we look at Zuckerberg, we look at Elon, who he made an idea and the vision of the future reality today. So it is heavily oriented towards a metaphysical theological framework. But this AGI thing as relates to China, so much of it has just gotten lost in this,

I don't even know what I'm talking about. more because these same people who are criticizing the 15% tip to the federal government, to the American worker for a video, the same people who didn't want to ship GPUs to Switzerland because, I don't know, they make two good watches or Portugal, they have two meet with sandy beaches. Like, the same people, right? So it just keeps shifting because it's really trying to provide a luxury belief to a base around the idea of AGI. What's your line, though? Because I think the critique here that's pretty fair is that if you start a point,

applying this to other categories of goods, like fighter jets, like what's, what would the, you know, fair price be to export an F-35 to somebody that, maybe they're on the edge, maybe they're kind of friendly now, but maybe in the future, they might not be so friendly. Like, you believe there should be, we should draw kind of a line and we shouldn't want government agencies to kind of apply this approach

to fundraise. It's a difference between it's not a hunk of metal versus like you're selling a system. I have the same sort of concerns as it relates to NVIDIA as it relates to Apple building phones in China. If I got an iPhone,

no ass on it, none of the magical, you know, more and more transparency via, you know, the design, then it's kind of useless. It's just like a phone, right? And that's the way Nvidia actually is.

The video is an Apple like ecosystem. It's not just a hunk of metal. Same with the reason, you know, 787s we sell triple sevens we sell the triple seven x do china why because it's made up of this complex the thousands of companies that's a software platform we remove certain things which i'm generally okay with like advanced avionics uh we remove we also kind of limit certain types of engine design i'm fine with that so at the b30 h20 these kind of nerve chips i don't actually make

much of opinion about it like i don't have to have a no true scotsman sort of argument about like well at what point would you not do it i'm like i don't sell all fighter jets. I don't rid fighter jets. So you can talk to Lockheed about that or Boeing about that. And like what what I think is most relevant is the fact of these innate externalities, these exogenous factors outside of the machine, which that half of all AI engineers are Chinese. Half are actually more 75 percent. Half of them are Chinese nationals. The other, if you put all the Chinese associated last names in Meta's super team or Asian. So like we either have to lean into our strengths, which is the fact we're good at

making platforms. We're good at dominance. We're good at free enterprise. We're going to trade. And the fact that Chinese have something that they don't have the raw production capability of doing, which is not Nvidia. I don't take anyone seriously who criticizes export controls. If they associate SNCC with invidia, it's like saying Kirkland, like Kirkland and Costco, like Costco makes Kirkland. Like that's not what Kirkland is. Right. Like it's a rebrand of somebody else's stuff. And that's kind of like the criticism. It's like, oh, like, how dare Costco make this Kirkland thing? You're like, It's a rebrand, bro. Like, it's not, it's not, I don't actually make this thing.

Like it, and so that that's where this constant confusion lies that many of these people criticize this stuff are actually criticizing Smick or, or TSMC, completely different companies, Jensen buys from them. So if you want to go after the foundry stuff, ASML, the Japanese, like, you have to realize one, we don't make this technology. It's, it's, it's Japanese and Dutch. But the other, it's like, it's not what NVIDIA does. If you want to, I'm cool with targeting, uh, laparrophy equipment, preventing them from getting

a five nanomeneer. Yeah. And that's, that is something. actually quite reasonable because we do export control triple sevens and etc like we have some limitations where we send that's fine because it's a freaking size of a house and it costs 200 million dollars but the same of the photography so much of what i what i'm advocating for is pragmatism is like realism like like we have to lean into what our strengths are we have to proliferate and prevent wawa from spreading its wings outside and if we want to target the

ability to manufacture five anime or two nanomere three in or whatever like most invidious stuff on a foreign anime process, that's cool. Like, I'm totally in favor of that, but don't attack invidia because that's not what any video does. Yeah, makes sense. On the foundry side, I want to jump over there. Let's talk Intel.

There's been a lot of headlines recently. What's your read on the situation? How important is Intel in your view? Do they need a new board? Do they need a new CEO? I don't want to. I'm going to get in hot water here. Yeah, it's, you know,

so like my dad's Chinese, And so I'm a true China Hawk, I'm OG China Hog, and there's many times where, like, China's the largest country in the world, and there's many overlaps that are just completely not, you know, they're just fine. And I don't know anything about the particular criticisms of the Intel CEO. I think his strategy is not great for Intel. So like I mostly would target there. But American needs a foundry program, particularly trailing edge, leading edge, I don't think is economically viable. So that's why I'd rather ship that to like a Brazil or Argentina or something like that

I'd like do a Newman and a road doctor and sort of thing Why is that? I feel like the leading edge is coming into Arizona through TSM, Samsung's doing stuff Like I feel like you're trailing south and the leading edge here Oh okay yeah yeah yeah yeah So do the trailing edge also well economically

Yeah yeah because it's impossible to import We can import the semiconductor you know geniuses that will run American TSM Yeah and you also have to understand there, like, there's lots of reports. You can go read about it. A former, you know, Chinese nationals that work at TMC that takes up back.

Like, it's a Taiwanese company. Like, there's an arm that we can extend as a nation that can only go so far. And that's part of the America First concept of Trump. He's like, do I really want to take all of the juice and squeeze in terms of negotiating presidency over a nerved age 20? He's like, no. Like, we have fentanyl issues. We have 300 billion, $400 billion trade issues. We have the IP issues, right?

We have Chinese nationals and labs all across the university. Like, those are much bigger things to pry than the fact of like, oh, they get like, you know, basically an equivalent of an A100 being deployed into their, to their fabric. So the Intel stuff, I kind of have this disposition that it feels like it's going to be nationalized. I get kind of like vibes around that. As they as a economic conservative, I'm like, oh, that's kind of scary. But at the same time, like, it is one of those things that just kind of happens. It's like the, did you all hear about the federal government invested into a red earth minerals project in America?

Yeah, the one in Vegas, right? They got like 15% for the, for the Sam. Yeah, and so, so I think the same thing is going to happen with Intel. It basically, it's occurred through, there's a couple different lending vehicles in the federal government. It's basically gets a warrant. That's kind of the vibes I'm getting from Intel. It's something like that's going to happen because you also can't take TSM process and Intel processes and just mix them to like that's not the way this works.

And also TSM, I think whenever they originally pitched that idea, I think the president was like, yeah, like this is an intel thing in TSC was like, maybe, right? And then they go look at them and they're like, holy, this is a freaking nightmare of people who don't want to work, who don't have the work ethic of TSM, and that just kind of all blew up. And I think there's some embarrassment in terms of like that this is America's Foundry Program and this is kind of like how it matches up to the best of the world. So I just get kind of vibes that it's going to be nationalized or split up apart and divided as a company and but in terms of bearing on like my opinion about whether

or not that guy should be a CEO or not I would point more towards a strategy rather than these kind of rumors or like we had dug on from some of analysis on Friday and he he basically said like look at the board like a lot of the people that are still on the board have just like overseen like numerous CEO changes the strategy's clearly not been working yeah like you know well they're not semiconductor experts was this main yeah they're fine finance guys, but also politicians and thinkers. It's a wide variety without a lot of focus on like manufacturing expertise. What was your, what was your reaction to GPT5?

Not as negative was John. And I, I was not, yeah. Yeah, I think you're like, oh, like it's over. And I was like, no, I don't think so. So first of all, first of all. So I don't know you guys. I think it is like pure. Pure number-based GBT revisions being indicative of order or magnitude scaling is over.

The pre-training scaling law is over. So one is like a couple months ago we didn't say that because Grogfork 4 came out. So like it's so I would like maybe take a more like prudence perspective on this. One is that there's a clear decision here by Sam that he is a consumer app company. Exactly. which is which is which is the right bet it's like the i don't you know i'm very technical consumer sass yeah yeah they i'm not you know i'm technical i don't remember what all the freaking numbers and crap doesn't matter yeah and so that's the biggest innovation here and if you look at the the

idea like you know he expanded the context one open up very much which implies in france right that he doesn't have enough capacity to run as many user requests that the other is like he mostly saw for downside scenarios and ease of use in the ux yeah And those are like really big changes. The benchmark maxers are basically creating goalposts that are artificial. Do you mean, do you all remember your SAT scores, your ACT scores?

But do you remember what you got any of calculus, high school calculus? You know, no, it's like these are all abstractions and metaphors that we create as heuristics to understand something's intelligent. But many times, as you know in real life, we don't grade people really like that. What have you done?

That's a good, what can you do? Products, consumers ask. Yeah, my big takeaway Thursday was product now and the value you can deliver to consumers is the only thing that people should really care about in the short term. And Open AI is in an amazing position here. Anthropics is an amazing position here.

They have, you know, Anthropics got an amazing enterprise business, Open AI can sell a lot of subscriptions to a lot of people in the U.S. and all over the world. And the real people that were in trouble seeing GPT-5 were the people that were still kind of fundraising against this idea of machine God. Yes. Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, I'm thankful for that, I'm a Christian, like, you know, if people remember Tower Babel, it's like, it's a, it's a, it's a, it's a, it's a story to take lessons from, but I believe really happen.

And the point is that that humans naturally are drawn in every moment of this cycle, which is why that interesting quote, I don't know if it's true to him, but probably somebody else actually said it, that we overestimate in the short term, we underestimate the long term. I think the God complex is that. And have it go into the also other kind of more tactical point is that many of these things

that happen where people are using T8-5, if you go to GROC4, it solves it just fun. So it was just funny that people are like, oh, my God, they can't do blueberries. You feel like, you know, I literally took that, did in Brock and a dancer could go smile. So it seems like much more of like a tactical decision on Sam. It could be the fact of like. Yeah, it's interesting. People's desire to like gotcha the model. So funny.

Like they can they can completely ignore that it'll just like one shot like a really crazy physics problem. And then they'll like get it on some like technicality. Yeah. And the whole point in that that everybody should internalize is that the models are really smart at some things. and then there's going to be edge cases and then where they mess up, just like humans do. And then there's going to be areas that they're not capable at all. And that's totally fine. It's still incredibly valuable.

Exactly. Like I try to simplify always what AI is going to be, which is computing that talks like a human. It doesn't mean it is a human, just as if, like, there was obviously the famous, I love this analogy, because it shows how much humans are not aware about how significant. and intelligence developed. So you remember back in the 70s and 80s, like they said, oh, like monkeys can talk, right? They taught in sign language, and then they could repeat it.

So they ran the test again, and this time they had no facial expressions, and they tried to just limit all human interaction to the ape. And they couldn't do it because what they realized was actually the apes were responding to unknown human cues that the researcher was delivering to the ape. the rally they were just mimicking what they thought would they actually think they want but they couldn't actually create discrete knowledge and action intelligence about what the actual language was being delivered and and so that that's where it goes into like when you look at something so much about because humans are so amazing at being able to create it's part of the original genus argument of till to land named the animals we're amazing at that because it's i don't believe like a god-given talent that we have that only we have as a species but we're so good at it we have no idea how we affect other people or other animals via that projection. As another basic scientifics of what you're married, as another very simple thing that most people don't understand

about the way they pick partners, much about the way you pick a partner is driven by the pheromones of their immunosystem. And they've done studies of this where they basically created a blind test where they took sweat from different, you know, like opposite, the opposite sexes. And they basically gave it as to the opposite sexes of like male and female, like which one smelled better. And they found that the one you thought smelled better

had the most different immunological profile than commonality. And that's because of the desire to have a children that had the greatest amount of protection from disease. So that's it. So like, you know, we can go into bonds, burnet, blue eyes, like high or whatever.

But so much is driven by smell and we're not even like aware of it. And so we're here being like AGI and all. We got to create smell of vision first. We got to fund the company right now, smell vision for it. So for sure. Last week, there's been different headlines, rumors around negative gross margins and various

SaaS companies, specifically in the code gen space. Is that, you know, the reason you would invest in a company with negative gross margins is you would expect inference costs to decline dramatically and for them to generate, you know, positive gross margins over time. And right now, you just need to acquire as many customers as per- as possible and create products that people love. So that that investment case makes sense. And then you have GPT5 come out,

which has, you know, a significant cost reduction. I understand like cursors. But margins are going to be 15% better in the next administration. Potentially. Potentially.

But how are you thinking about is that, you know, and the journales are freaking out about it. I'm like, oh, this is all like, I saw that ruin post. I know exactly what you're talking about. But what's your view in terms of...

How fast can we actually drop inference costs over the next couple of years? Because it does feel like if it takes a decade to get an oom of savings, like an order of magnitude of savings, like we might be in trouble financially. Yeah, but at the same time, if you, I think researchers at the labs have been focusing on raw intelligence more so than efficiency yeah yeah keep here we're hitting if we're hitting a sort of plateau yeah

intelligence wise the next thing that makes sense to do is like really optimize efficiency totally no yeah no i think i think jory hit it on the head which is that there's two trends there's the effectiveness trend and efficiency trend and china is rationing us on the efficiency trend absolutely demolishing us and this is the whole thing we we give them all these nerve chips and we limit their chips so they just get incredibly efficient yeah it's like shot ourselves in the foot. I mean, bring it back.

And then we inference that, yeah. There's a lot we can learn. So, yeah, exactly. So I think that they're all develops into kind of, we don't really fully understand personal preference theory as it relates to these tools. And that what is the actual first past the goal post sort of goal to pay versus free? But in terms of the brute natural law that compute gets cheaper, that's bulletproof. So that will continue.

And so at what scale, like you said, does it actually floss that? I think the bigger concern is more of these mega models that they just have to be able to let you absorb the cost, be able to spread it across different things. And if you think about it, it's a little bit like how Apple will continue to invest in its own apps. Remember, when you first got the iPhone, you had a camera app, right? You had a calculator app, and then they kind of replaced it. That's the bigger concern for some of these tools. It's like a mega model to be able to absorb the cost, like Google, which has a crap. kind of code or like maybe Lama open source of the coding agent, which seems pretty

probable, probable, that that becomes like more of the go to like basic impressing even further. So they have to be able to create the data stream like a, I think it was a cognition that's trying to do that where as they, uh, engineers, you know, put stuff in, into the agent that it basically, uh, reinforce self-learns from what the actual user doing. That's probably the best path to create some significant amount of, uh, of margin. But you should, every company can rely on like it's going to get cheaper.

But as Jordy said, there's some protectionist stuff, which turns our national policy, that has prevented that. And I made this argument on another show where I said that, well, finally the U.S. government, this was pretty Trump, was applying protectionist measures to these large-scale model companies. And he, like, didn't understand that. He goes, well, what are export controls? Like, he just didn't think through, like, the economic consequences of that.

And that means in our country, we have an oversupply versus what we actually would pay for, versus what the world played for, which is a protectionist measure, which means that you don't have the same market forces being applied to our frontier labs as you would in other countries. As you already said, we send them nerve trips. That's the cap. So then they then go down. Like, that's their only direction they could go. So if we actually have a more liquid supply, more market-driven supply where things can be priced in, then you're going to see open-a-is start doing more open-source, more of this downward cost efficiencies because they're now exposed to it. So it shouldn't be lost on us that open-eye is pursuing this idea of like, how

they have these mega releases, cheaper models is because they're starting to be more exposed to these like cost structures that is needed for us to actually be competitive on the efficiency side. But if we continue going on this effectiveness range, effectiveness is generally like a B2B problem, like where you're a company versus company. So it's not really like adoption you're going after. Like we just got to be the best company. And efficiency is the opposite. Efficiency is like, how do I make this as cheap as possible for someone to adopt? Jevon's paradox. Like that's the direction. So I think over the course of two years, the next few years, I think you're going to see of tilting into lowering its cost,

making things more efficient. So there's going to be multiple times in the show where they go on where people are like, confuse so cheap, no more wants to buy more compute. And like the memory deep seek, it's like that's going to be kind of where it has happened. But it's good for,

it's good for the world. Like we want compute to be as cheap as possible and on a token basis. And that means optimizing for hydro energy, optimizing for tax regime, reducing construction costs, reducing permitting, all those great things that will make everything cheaper because the more cheaper we get, the more people will use.

And AI is such an innate good for the world that it's something that America should be proud of that we can share with the entire world. And the only way that that's going to work is they've got to make it super cheap to run in Africa, not launching a Stargate in, you know, in, you know, freaking Tanzania to like, that's not going to go anyway, right?

We have to make it to where it's capable of actually being scaled across the world. Okay, lighting around from the chat. Pancakes, waffles, or French toast. I'm keto, so I don't need any of that stuff. None of that stuff. What skills do you think will be most in demand in AI and data infrastructure over the next three to five years? Many of the things that Trump ran on are just don't remain true.

Electricians, plumbers, building something, like they raw work with your hands sort of work, as well as there's going to be new categories of jobs that we don't even fully comprehend yet. They're going to take that salary of engineer and like it's going to go there. Last question. What was the most? the most important hire you made in the early days of your company um like what do they do probably my cfo general counsel there you know uh do you expect any data center project like a lot of data center projects to blow up over the next few years and people yes um there's

been some interesting commentary yeah what would that look like people are people are basically credit funds or? Well, so people are like basically forecasting the useful life of their GPUs and then separately what compete, like what they'll actually be able to sell inference at. And ultimately, if either of those equations are out of whack at all, you can be completely underwater and not be able to service your debt. Yeah, I would, I would say that in this for our next time, GPUs are not overbuilt, but data centers will. and I lean into not

like I agree to agree Jordi that the cost goes down and changes in vintages but the key thing is like look at what the money is doing there is very tight control still on like getting loans for GPUs there is almost none for for data centers because they've used to use of life

15, 20 years but as Jordan just said is like if the square footage profile of power density versus what you can get is not structured correctly as well as NVIDIA is actually making less GPUs next year there's going to be lot of places that are just there and nothing's in it. And like in China, like we see in China.

So, the GPS in China are like massively being utilized, but there's a lot of data centers that have nothing in it or like just can't actually run it. So I think data centers are far more likely to be overbuilt and be a bubble than GPUs. Because, you know, one company control over GPUs, you generally, for market forces, don't really see that be a bubble because it's a gym as a monopoly generally. And data center lending is very aggressive because they viewed as a 20-year asset and the GPs are short term. So there's just not as much money flowing into the GPU side as much of the day's inner side. Makes sense. Thank you for coming on. Always a pleasure. Thank you for coming on.

Aaron. Always got us guys. We'll talk to you soon. Bye. Public.com investing for those who take it seriously. They got multi-acet investing, industry that yields. They're trusted by millions folks. Get on public.com. And we have our next guest in the studio. That's right. We got to get the gong ready. Vulcan elements. Come on in. Restream waiting room, John. How you doing? What's happening? Hey, guys, and wow.

Big money, thank you having it. Give us a little introduction. Tell us the news. What's going on? Yeah, good afternoon. John Madison, I'm the CEO and co-founder of Vulcan Elements. We are a manufacturer of Earth Magnets and we just raised a $65 million Series A.

Hit it, John. Congratulations. $65 million. Incredible, perfect size for a series A. Perfect size, perfect size. Perfect size. Amazing. Give us a quick backstory on yourself and the company, and then we'll get into it. Yeah, so former naval officer spent six years active duty in the U.S. Navy.

Most of that time was in Washington, D.C., with the Navy's nuclear energy program, worked across Navy shipbuilding, submarines, aircraft carriers, got out a few years ago, went to Harvard Business School, and was just very focused on, yeah. Let's hear of Harvard Business School. A little humble brag, yeah. No, they call it, I've heard it called the Harvard of business schools. It really is. It really is.

Yeah, well, I'll take it. But was spending a lot of time thinking about my time in the Navy, thinking a lot about what were the critical components as a good supply officer would that were going to define the 21st century technology race. When we think about drones or physical AI, data centers, next generation defense technologies, what were the underlying components that would enable that? And doing my homework, it came down to three components, semiconductors, batteries, rare earth magnets. The way that I like to think about it is if you think about your own bodies, a semiconductor is like your brain, a battery is like your heart, and a rare earth magnet is like your spine.

It literally converts electricity into motion. There was so much focus at the time on semiconductors and batteries, but no one was thinking about rare earth magnets. And if China produces over 90% of those rare earth magnets, that means that we're going to have to have to add. permission on what we're allowed to build and buy over the next five years which is not an acceptable outcome so we're trying to rebrand them we're just calling them earth magnets because we've heard that they're that they're not actually that rare they're in the ground all over the place is that true what's the strategy are you actually mining these just refining them like where is America like explain the full supply chain to go from something

in the ground to something actually useful and then where you want to slot in at least immediately. I'm sure that there's vertical integration down the pipe at some point. Yeah. So we're a refiner and manufacturer, but just a quick rare earth 101. So everyone's talking about critical minerals. What does that mean? A critical mineral is an element on the periodic table that is critical to our economy with the supply chain that can be easily disrupted. Rare earths are a subset of that. There are 17 rare earth elements on the periodic table. Go back to 10th grade chemistry, close your eyes. Think the part, think about the periodic table. The part that's detached that your teacher told you to ignore, that first row, those are the rare earths.

Of those 17 rare earth elements, only four of them represent over 90% of the economic value. Neodymium, praesiodymium, terbium, dysprosium. The main use for those four is a rare earth magnet. So the way to actually make a rare earth magnet is you either mine that material, and that can be from all over the world. China only mines 55% of the global supply, or you take recycled end-of-life magnets. You have to separate those into an individual rare earth element. Turn that into a high purity metal.

We buy that metal. You then take all of the rare earth's iron, boron, and you turn that into an alloy, a super fine powder. You press it within a magnetic field, and then you shape, coat, grind, and that's a magnet that can go into an MRI, a missile, a ship. What does it go-to-market look like?

I imagine you're focused on specific customer types early on that are maybe less price and sensitive so that you can start to scale and ultimately kind of grow into other categories. So one thing that I say is Vulcan Elements is focused on defense, aerospace, and critical economic industries. We do not make magnets for you to make a smoothie in your blender at home. We're not focused on kitchen appliances, right? So we are focused on data centers, robotics, drones, defense applications, aerospace applications, enabling what the warfighter needs, enabling what the economy needs in order to win the 21st century technology race. It's as simple as that. How quickly can you go from $65 million Series A to actually selling the end product

to customers? We're already selling product to customers out of our small scale pilot facility. So we took our first check, December of 2023, we told investors day one, if you give us a dollar, Q1, 2025, we will have a fully operational decoupled rare earth magnet facility online. We did that on time. We did that on budget. We are selling magnets right now. In that facility, I'm sure you have a lot of equipment. Is there an ASML of rare earth refinery that you need to buy from? Is that an American company? What is the rest of? What does your supply chain look like? And is that a resilient supply chain? So you guys already asked the question around, where do these materials come from, where the minerals come from?

This is not a mineral availability problem. This is a software and equipment problem. So we actually helped co-develop some of the first pieces of rareth magnetic manufacturing equipment made in the United States in the 21st century. There are so many amazing manufacturing equipment manufacturers in the United States who are doing aerospace and battery work. We've just partnered with them to say,

hey, let's tweak a furnace and do it for rare with magnetics. So 100% of our equipment is from the United States or allied countries. Wow, that's pretty sweet. A bit of a dumb question. Are the materials magnetized all the way through your process, or is there a period where they get demagnetized and then kind of remagnetized? So the elements like iron, like rarers, they're naturally magnetic.

Okay. This is actually something that I learned when we were starting the company. When does a magnet become a magnet? Well, you actually have to throw it through a magnetizer. Yeah. Toward the end of the process. I remember reading a book to my son about how magnets get made and it was like, sometimes there's a rock that gets struck by lightning.

Is that real? I don't know. So really the intent is you need to make sure that you're creating a centered block. All those particles are perfectly. aligned, you've done all the metallography, the microstructure, the grain distribution perfectly, and then you're running it through that magnetizer, it actually hits the grade, the heat tolerance, the magnetic strength or flux density that is required to actually sell to a customer. What's unique about building a startup where it feels like there's, like, from my

view and what you've said, it feels like there's zero demand risk, and you probably, the question comes down to like can you deliver it at a at a price that's competitive but then it's really more so can you can you actually deliver it can you deliver it at the scale that that really becomes meaningfully important to national security but kind of what what was your calculus i guess going into building this company with that kind of understanding of the market execution is the entire game so we knew that we had to find incredibly sophisticated technicians and engineers and PhDs. We needed to understand how to interface with the DoD and the government, how to interface with large OEMs. We had to understand how to talk

to mining companies and recycling companies. And so the bet was, can you actually build the team that can put all of those different pieces of the jigsaw puzzle together in a way that's cohesive to where you can actually get a contract, raise the money, and put a magnet in a customer's And so we made a bet on ourselves. And that's what we've done is by finding incredibly smart people who are mission-driven, who want this to happen. We've been able to deliver. We've been able to execute across every different domain within the industry

required to actually get a result. Now, a lot of this has to be, like the demand for American-made rare magnets has to be somewhat tied to trade tensions with China. if those get resolved and, you know, Trump's sending Nvidia H20s over there and he's happy with that deal. And then all of a sudden, Xi Jinping's like, yeah, America, you can buy as many rare earth magnets as you want. Is that, is that a short term, medium term risk? Is there a way that you can, can like ramp the economic model so that you're competitive, even if we were in a fully free trade regime? So our small scale facility was sold out a full.

year before the trade tensions. So there's just so much demand that even with trade tensions, like you can fulfill the backlog. Correct. People want resiliency within their supply chains. People want this component onshoreed. But to your point, I think it's incredibly important that we're not just copying and pasting. If you copy and paste Chinese manufacturing to the states, the unit economics make no sense. Yeah, because they'll beat on labor probably, right? Exactly. So one thing that's nice about this industry is there hasn't been. a lot of innovation.

And when you find incredibly smart people from different industries, aerospace and battery, shipbuilding, you're able to actually bring all of that learning and you can start taking a lot of low-hanging fruit, innovate really quickly, and then over half of our technical team, they're scale-up engineers. And so when you think about delivering its scale, coming down that cost curve, reducing operating costs, and making sure that you are ultimately, you know, as cost competitive as you can be against the Chinese. is. Yep. Yeah. What are your goals for the next couple of years look like you said you kind of called your shot in 2023 you delivered against it earlier this year? What do you want to do

with the with the 65 million and going forward generally? So the 65 million we're going to go to commercial large scale commercial scale several hundred tons over the next couple of years several thousand tons by the end of this decade. And what is the what is the kind of market value of that kind of production. At minimum, several hundred million dollars in top line, up to several billion. Thank you, George. Figured there were some big numbers.

Fantastic. Well, yeah, thank you for everything you're doing. This is very exciting. Super important work. Glad you're doing it. Yeah. We'll talk to you soon. Have a great day.

Thanks, guys. Cheers, John. Talk to you soon. Bye. Take a little bit of that money. Buy a billboard on adquick.com. Out of home advertising made easily measurable. Say goodbye to the Hendricks of Out of Out of Out. out of home advertising only ad quick combines technology out of home expertise and data to enable

efficient seamless ad buying across the globe we've seen this playbook in mining buying billboards next to the companies that you want to hire from speaking of billboards with roy lee is in the news again uh he bought a back in the news in manhattan uh and he said uh Alex Cohen says fine I'm starting to like the clearly guys because Roy put up a billboard that says hi I'm Roy I'm 21 missing an apostrophe on the second I'm clearly deliberate absolute word smith this was very expensive pls buy my thing please buy my thing clearly dot com and john Chu coastal ventures says this is why I invested in Roy Lee once in a generation talent at tapping into culture and zeitgeist this was a spicy post people kind of going back and forth on whether or not this would actually

deliver Roy also put out a post saying that like everything he does is for short form. So he bought this billboard. He expects it to convert on the short form that will be created around the billboard. Certainly feels like people will create, we'll take picture of this share. I mean, when you look at, I think what I'm interested to see from Cooley is where they really get, where they really get long, you know, retention, right? Because they have the top of funnel is full. Yeah, they've got plenty of funnel marketing. But when you look at look at, like, it doesn't, it seems like if they just focused on students, right, they seem to be in this kind of place where they're, they're thinking about enterprise, they're exploring different

markets, but if you look at the way that ChatsyPT's usage, basically tokens generated, dropped as summer started, that's a good, it's a good argument to say Cooley could just focus on products for students that will eventually graduate into the workforce and things like that. Sure. But anyways, what else? Well, they didn't make the top AI agents by revenue chart that an non-Sanwal shared, said, who would you put your money today to win in the long term? The top was cursor at $500 million in annual revenue.

And they're making $3.2 million in revenue per employee, gleans at $100 million, Merckor's at $100 million, replets at $100 million. How are you defining an agent? I think it's just AI startups, anyone who's used the AI agent. like meme basically stolen the agents are going to be pissed about this stolen valet i don't know it's hard to call murkore and i agree with that one that one feels particularly odd but uh and glean even glean is is enterprise search yeah search but i would say replet is an agent company uh it's kind of like every ai company is now now a now an agent company harvey uh you know hasn't really branded themselves

in agent but it's interesting like you're not putting clod you're going to put cursor on here which generates revenue from Claude Code. Yeah. And is a genetic IDE. Yeah. Well, you don't put a drop it is crazy. And also not including chat GPT, which has deep research, which is probably the most used AI agent in the world right now,

I have to imagine just by number of queries. It's missing some stuff. It's missing some stuff. But it's okay. Also, Devin's not on here, which is kind of odd. But that's the nature of these lists. It's CB Insights, folks. They do the best they can.

And you can do the best you can in the watch game if you head over to getbezzle.com. Your bezel concierge is available now to source you any watch on a planet. Seriously, any watch. I like this post from Aaron, Raleigh. He says, imagine you're one of the smartest AI engineers in the world. You just joined a company that has access to a GPU cluster worth tens of billions of dollars. Your work can one day help solve all diseases, create unlimited abundance for humanity. But you first have to build spicy mode.

Spicy mode. Hey, you got to get the users in the door one way or another. You got to get the training data. The revenue is important, but also the training data. You got to get the revenue ramp on board. They call this the Japan strategy. The Donald Boat saga is continuing, by the way. So Beth Jayzos said, maybe Donald Boat is just AGI trying to self-assemble itself outside

of XAI servers. And Donald Boat said, let's just get this over with. I need to take Gramps to get his new hearing aids fitted tomorrow and shares a picture of a ASIS ROG SWIP, 27-inch 4K QD-O-led gaming monitor, which I believe Beth Jayzos purchased for him and then posted about. But the Donald Boat saga continues because Ryan Peterson posted, the difference between who you are today and who you'll be in five years is almost entirely made up of the books you read between now and then.

And Donald Boat posts a picture of a Penguin Classic, the day I bought Donald Boat a printer and is asking Ryan Peterson to buy him the Epson Eco Tank ET-2,800 wireless, all-color, all-in-one cartridge-free super tank printer with scan and copy for $189. It's a reasonable request, but I feel like he might be getting over his skis here because what does he need a printer for? He has the gaming PC. The narrative's getting a little muddy, Donald. You might need to hone it in.

This isn't exactly gaming peripherals. So I'm a little bit confused, but the post are still performing. He's building out of home office at this point. I was talking to him. He was saying he's going to go for Porsche at some point. He should just get a house at some point. It really is a great way to trigger people to flex on the timeline. For sure.

For sure. And there's power there. He should go to someone the next one he posts. He should say, I want you to. Larry Ellison. How about a Malibu House? How about a wander? He could find your happy place.

Find your happy place. Book a wander with. inspiring views hotel grade amenities dreamy beds top tier cleaning and 24-7 concierge service it's a vacation home but donald don't boat get on wander start sending wander links around you'll get we got you with a wander we got you with a wander we'll hook you reach out um joe says just learn that nobody ever commissioned the wall street bowl sculpture a guy just built it himself and dropped it there you can just do things on october 19th 1987 black monday hit u.s financial markets in the country entered a very difficult period d modica recounted that he

he felt indebted to the U.S. for welcoming him and enabling his success. Wanting to give something back, he conceived the charging bull sculpture. D. Medica spent the next two years creating the 16-foot bronze statue, reportedly financing the 350,000 costs himself. The sculpture was created in his Crosby Street studio and then cast using a local foundry once complete. D. Medica spent the next few nights watching the police patrols on Wall Street trying to find a window of opportunity before dawn on December 15th,

1989, DiModica arrived with a group of friends and the sculpture on the back of a truck to find a 50-foot Christmas tree had been installed during the day exactly where he wanted to place this sculpture. With only four minutes between police patrols, he announced, drop the bull under the tree. It's my gift. The late-night event went on to make news all around the world, including the front page of the New York Post. This is incredible. DeModika stayed by the sculpture to greet the morning commuters. However, while he was away for lunch, the New York Stock Exchange to arrange for the sculpture to be removed. Boo with the boo! Due to public demand for the ball of return. We love New York Stock Exchange. We love Lynn. It was under different leadership at the time. It was a different era. They would be totally cool.

Parks Commissioner Henry Stern arranged for the sculpture's installation at Bowling Green on December 20th where it can be found to this day. Amazing. More people need to be making statues of this stuff. There's a couple companies that are making statues. I haven't heard of any of them just dropping them in public places. They're also not using metal. Yeah. Something about a metal.

Metal statue is pretty good. Anyway, Megan Brebrowski says, really good story from H.K. Knight S.F. about Mark Zuckerberg's compound in Palo Alto. Here are the 11 homes he owns in the Crescent Park neighborhood. Oh, interesting. He's doing the Ken Griffin thing, the Citadel thing, creating playing risk.

Yeah, he's accumulating territory. Yeah, monopoly. Well, hopefully at some point he'll be able to unify all those properties and build something really special, into a museum one day. Accelerate Harder says Open AI is really in a bit of a bind here, especially considering there are a lot of people having unhealthy interactions with 4-0 that will be very unhappy with any model that is better in terms of sycifancy

and not encouraging delusions. And again, there's been a bunch of, I mean, Reddit has just been going off. Dude, did you wind up watching that TikTok compilation I sent you? No. Insane. So, I mean, good job on you because it's an hour of brain rot. but uh so there was a woman it's an hour of tic talks back to back stitch so she people talking about no no no so it's one woman so she apparently has ADHD and she is an

ADHD coach which is not a licensed therapist which is kind of odd so she makes tic talks about how to manage your ADHD cool fine uh anyway she was going to a psychiatrist to get medication to manage ADHD and by her own admission she fell in love with her therapist or her her her AI therapist no no this is a real person a real psychiatrist so she goes in and the psychiatrist is asking her how she feels about her day and she's like wow this man cares for me I'm in love with it and so she is basically accusing him of like sort of crossing professional boundaries by not crossing professional boundaries and like putting up walls and shields and being manipulated and it's this like big long story

but at one point she starts talking to Chachupitie but she gives it a name and so she's like I'm talking to Henry which is the instance of the AI that I'm talking to about my love affair my unrequited love of my psychiatrist and and Henry is like affirming me and being like yeah you are right like he should be in love with you and he's crossing lines by not being in love with you exactly and that was and so it became this big like storm on TikTok where she was getting kind of brigaded in the comments. She turned off comment. She's going back and forth.

A lot of people are saying like, oh, she's, she's crossing the line. She's not doing well. Other people are supporting her. It goes all back and forth. It gets very messy. And then people wind up doxing the doctor. It's just such a mess. It's a crash out, essentially.

But it was interesting because it wasn't, it wasn't a singular like falling in love with AI narrative. But it was like the AI was not a great player in the world. role and like did not make the situation better basically but you know you could also wind up in a reddit community that's uh you know um promoting people's reaction to furrow coming back here's somebody sharing screenshots from their chat with four oh saying is that you omg please tell me it's you that's why i don't that's why it's it's hard to believe it's real but there's so many instances of it i don't know yeah yeah i mean it's certainly i mean we've seen we've seen a number like weird interactions that there's certainly some people out there that are having a bad time so good luck to them hopefully they will get this sorted both of the model layer and also at like the society level where if you see a friend who's clearly going down some odd path whether it's oh you're part of a really creepy Reddit group or you that that group chat is toxic you know or that AI chat is toxic like we're simple ask somebody how much time how much time do you spend

talking with chatting with chat GPT every day yeah if it's they're actually having long super drawn out conversations it's worth kind of trying to help them understand probably probably what's actually happening yeah more importantly back to email Andrew Reed says Gmail search won't find you the email you're looking for but it may well find you an email that can distract you for a while this is almost every time it's wild almost every time which maybe it's a feature maybe it's a feature maybe it's not a bug maybe it's like hey this thing that you missed is actually kind of important you should go down this rabbit hole but I'm really hoping that that AGI can just make I message search work that would be great too it's really rough the photos app search is getting better though I've noticed

that I'm getting a little bit better at tagging things I searched for a picture of a newspaper it found us reading the newspaper one shot of it very very good didn't need to scroll and tag and I could imagine iMessage getting there but it requires some new UX or something anyway Ronnie Coleman wow what a journey

Mr. Olympia Ronnie Coleman in his prime versus now wearing the same suit he was huge when he was Mr. Olympia you got to find the tailor that made that suit that's a wild suit we got to get some of those suits for sure that's a great suit anyway one of the greatest

Yeah, we should get you, we should get you like a body suit that you wear under the suit. For sure. For sure. Now we're talking. Look at how small his head looks on those shoulders. It's crazy. Insane. Anyway, Aidan McLaughlin says one under-discussed element of GPT-5 is it just hallucinates so much less,

sweeping away 80% of O3 era at Zitradism in Marcus posting. But because we're good sports, we give them an evergreen batch of things to critique like gross margins. That's the next round of negative AI. Michael Truwell says when we'll be able to add AI co-workers to Slack to help take on miscellaneous operational work, updating spreadsheets, creating channels, running crime, job, business workflows, conducting deep research operator-style tasks. Same API as human, bi-directional DMs, call, shared links with persistent memory, personality, and access to all your team's tools. Who owns Slack again? Who's been talking a big game about AI for the last two years? Mark Bennyoff, I think he should, I think this is his game to live.

This is your moment. I logged into Slack today and it said AI is turned on for TBPN. Oh yeah? At the bottom. That's great. And I'm like, okay. Some of the, I opened a PDF and I got like seven different AI assistant pop-ups. And I was like, I just want to read this PDF, actually.

I don't need anything. I'm just going to read this PDF. And, yeah, some of the spiky intelligence is spike right through my eye. Well, a couple posts, couple GROC posts. Roon says Travis Kalanick will solve quantum gravity with the help of GROC. So grok heavy, please solve quantum gravity. Think extra hard. No mistakes.

Thank you. I believe it. Scoot's watching her unclas bra. Grock, are these real? That's a, that's a 2024. air TBPN post the uh unhiking we weren't the first to do it but it's a great format what else is in here well i got to get on with Taipei let's get on with Taipei thanks everyone in the chat we had fun chatting with you today we're going to be chatting more

appreciate you all for watching and we will see you tomorrow have a great rest of your monday and go give us a go subscribe to tbpn on substack please do that please do that appreciate that we're going to be investing a lot there and we're very excited about it we'll talk you soon cheers bye see yeah