The Cyclical Wealth of Nvidia

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0:57currently basically making a whole bunch of videos that show you how to grow and scale your business or your career with AI tools. This week, I did a deep dive on the new landing page, a new homepage for AI Box that I've designed completely on lovable. I show you all of the software, all of the AI tools I use to make it. There's a whole bunch of really cool stuff. If you use AI Box, you'll see it shortly in the next, I don't know, in the next couple of weeks when it goes live. But yeah, basically we break down everything that we're doing in our actual businesses, stuff we can't share publicly, different side hustles, how much money we make from different things we do, and how we are monetizing AI, basically.

1:30So if that's interesting to you, go check out the AI Hustle School community. I will say every week, we are raising the price by$1. Right now, it's$23 a month. So if you want to lock in that price before we raise it to$24 next week, I would go check it out right now. The price just keeps going up. But we are super excited to have so many of you in this amazing community. We have over 340 members. and we're excited to keep sharing incredible content. Jamie shared a side hustle he did that made him$25 ,000 last year with Amazon, how he's trying to use AI to scale that up. There's so many different things that we share in the community.

2:05So go check it out. The link is in this description to the AI Hustle School community. All right, let's get into what's going on with NVIDIA. Now, there has been a lot of controversy to say the least about this story in particular. And it's because it's not just NVIDIA investing$100 billion into OpenAI, which obviously is a lot of money. But there seems to be a I mean, I'll get Jamie to kind of break down what's going on with this NVIDIA story. But I'll just preface this by saying, there seems to be a giant circle of money that is going around between NVIDIA, OpenAI, and Oracle, where they are all giving each other hundreds of billions of dollars.

2:41And every time they make an announcement, their stock of the company goes up. And then they're able to use that stock to fund giving more money to the other companies. So it's kind of like, I don't know, it feels very suspicious, basically, like they're all just pumping up their own numbers to give themselves more money. But it's legal. So anyways, we'll get into that. But Jamie, based off of what's happening with this $100 billion, I guess what was the most interesting part to you? Yeah, so Nvidia stock currently is around$183. It was as high as$185, I think. And the previous day was down in the$170.

3:16So it made big jump after this news, which is interesting. As Jaden said, there's some interesting things going on as far as investments going circular. Specific news about this investment is focused on data centers. So NVIDIA wants to build data centers that will be able to power OpenAI. So they previously have been relying a lot on Microsoft's data centers and they kind of want to be more independent. I should say OpenAI does. Most of this money would go to deploy a 10 gigawatt data center, which would use enough power to power millions of homes, by the way. So a lot of money, but at least it's going to something physical.

3:56It's not speculative, to say the least. It's going to actually build something. But Jaden, what do you think about it all? So, I mean, I think this is interesting. Obviously, NVIDIA is the big power player, and this is not a shock at all. NVIDIA also announced investments into companies like 11 Labs recently. And basically, NVIDIA puts money into all of the AI companies because they know when they give money to an AI company, that company has to in turn purchase NVIDIA GPUs from them to power their AI. So it makes a lot of sense for them. I think NVIDIA is basically doing the same thing at scale with all of the top AI startups.

4:32Every time you hear a big AI startup raise money, there is always NVIDIA in the round. And so I don't think this is a shocker. I just think it's shocking how much bigger the deals are, because NVIDIA keeps writing bigger and bigger checks, but their stock price keeps going up more and more so they can basically afford to keep funneling all the money into these other companies. And it's interesting too, because I mean, a lot of people will like note how basically NVIDIA has given money to OpenAI and OpenAI has given money to Oracle and Oracle is giving money to NVIDIA by buying their GPUs for their data center.

5:05So there's like this circle. But at the end of the day, I think NVIDIA, it doesn't really matter who NVIDIA gives which AI company NVIDIA gives money to, the money will come back to them one way or another, whether it's through Oracle or whether it's the data center provider or whether it's through the actual AI startup themselves trying to buy things. It all comes back to NVIDIA and it basically boosts their company. Another thing that I do think is interesting though is with all of this news, it sparked a really big rally on Wall Street, specifically in global chips. So in Taiwan, Taiwan Semiconductor Manufacturing, TSMC, they were up 3.5 % as well in South Korea, SK Hennix.

5:41who they have a memory chip and they're used in NVIDIA systems. Their shares rose as well. Samsung also went up. So it's kind of interesting because like, it's funny because the story is NVIDIA gives$100 billion to OpenAI and then in turn, it's like every chip company sees a big rally. Basically, people follow the money and they know that it's all going back into chips. And it's not just NVIDIA, right? NVIDIA has a lot of suppliers like TSMC and even rivals Samsung. And all of them are going to get, are going to feel benefits of that money, which is pretty interesting. And even their equipment supplier like Tokyo Electron in Japan is also trading higher.

6:18So I think this is really interesting. Something that an analyst said in a TechCrunch article was, ultimately, this is a broad market with lots of suppliers. It certainly isn't a zero-sum game with only one winner. And indeed, it appears investors are recognizing that, right? So even though I think the big headlines we hear a lot are opening. I just got more money and NVIDIA just invested more money and also got way more money from, you know, whatever. And Oracle just got a$300 billion contract. Like you kind of hear the big companies, but there is, this is a huge industry. And basically the knock-on effects are that like all of their suppliers, so many people in the industry, basically the whole ecosystem benefits that a hundred billion dollars.

6:56Well, a lot of it goes to NVIDIA. It trickles down to so many other sectors. And so I just think that's, what's exciting is if you're looking at investing in this, in this area, it's not just about, okay, do I need to put more money into NVIDIA? It's like, who are the suppliers of NVIDIA? What are the markets that are also benefiting? An example of this, which is really interesting to me is I recently moved to North Carolina and one of my neighbors, their business is basically they install fuel tanks, like big industrial fuel tanks. And they said that for the last few years, their business has been absolutely exploding because basically all the new data centers that are coming up, they all need big industrial fuel tanks so that if their power grid ever goes offline, they can have backup generators that keep powering the data centers.

7:38And so his business is like exploding. But like, literally, this$100 billion to open AI is going back to it is going for data centers. And like, I literally know my neighbor is going to make more money from it. Right. So it's, it's kind of like that. It's just like, you have to look at all the different sectors and industries that are going to benefit from that investment, which is quite a lot. Yeah, I guess my question with this is, is it possible to, you know, to you know, a major partnership, or I should say OpenAI has a lot of different partnerships with like Microsoft, Oracle, SoftBank. And now that they have kind of changed their partnership with Microsoft, they're allowed to build, you know, other data centers in other places.

8:19Is it possible, you think, to overbuild these or is the demand there? So I think like my opinion on like overbuilding, because yeah, I think it's a really fair question. I think that we are going to be grossly underbuilding. I don't think we're ever to catch up. And the reason for that is not just these AI models. But once we start getting into robotics, like with the optimist robots, I think there will be basically an unlimited support, like demand for compute to train these models to make them better. It's an interesting question on the economics of it. But like, we see that basically opening eye has explained when they give more compute and spend more money on their AI model to quite the answers get like better, like that's one of the key ways they can like improve in the benchmarks are like, this is the open AI, you know, this is the GPT high or whatever.

9:05And that's basically when they give it$1 ,000 per question worth of compute. And all of a sudden, it's like number one in the benchmarks. It's so, so smart. And it takes like a day to compute the answer. Sure, whatever. But like, it can give way more accurate, better answers. And I think basically that that shows us the path to that these companies are going to get to get the better AI is just to build more compute capacity, because basically, the more data centers they build, if technically that should bring the cost of the compute down. Will that happen if demand keeps up? Probably not. But like theoretically, that's where they're going to try to go with it.

9:37So I don't think we'll overbuild. I think the more we build, even if we felt overbuilt for what we have now, they would just give more compute to the AI models and the prices of it would come down. But with robots, I think it's going to be pretty crazy. Totally crazy. Yeah. And my mind, you know, goes to energy production as well. You know, as far as like other industries that will benefit or have growth, I feel like energy companies as well will be where the money is. So anyways, thanks for listening, guys. If you appreciated this episode or got anything out of it, we really love ratings and reviews.

10:09So wherever you're listening, if you could review us, we'd really appreciate it. And again, check out the AI Hustle School community if you are interested in growing your business or making money online using AI. Thanks for listening and we'll see you next time. You're listening to a podcast right now. Driving, working out, walking the dog. If you're into podcasts, chances are you have something to say too. With RSS.com, starting your own is free and easy. Upload an episode, and we distribute it to Apple Podcasts, Spotify, Amazon Music, and hundreds more. Track your listeners, see where they're from, and start earning from ads like this, even with just 10 listeners a month.

10:47If you've been thinking about starting a podcast, this is your sign. Start free at RSS.com.