AI Versus The PC Industry With GamersNexus

0:00This is an iHeart Podcast. Guaranteed human. Pool days call for cookouts and lots of laundry. This Memorial Day at Lowe's. Save$80 on a Charbroil Performance Series 4 Burner Gas Grill. Now just$199. Plus, get up to 45 % off select major appliances to keep dishes, clothes, and food fresh. Having fun in the sun is easy with us in your corner. Our best lineup is here at Lowe's. Valid to 527. While supplies last, selection varies by location. See associate or lowes.com for details. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts, then add supported streaming music from Spotify and Pandora.

0:41And as the number one podcaster, iHeart's twice as large as the next two combined. Learn how podcasting can help your business. Call 844-844-IHEART. Hey guys, it's us, the Jonas Brothers. I'm Joe. I'm Kevin. And I'm Nick. And guess what? We created our own podcast called Hey Jonas. We invented a podcast? Well, we didn't invent it. We just contributed to it. We're the first people to do podcasts. We get to ask other people questions because we're sick and tired of being asked questions. Well, sick and tired is a strong way to put it, but, you know. Tired and sick. Tired and sick. Listen to Hey Jonas on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

1:16Just listen. We don't care where you hear it. Another podcast from some SNL late night comedy guy. Not quite. Unhumor me with Robert Smigel and friends. Me and hilarious guests from Jim Gaffigan. to Bob Odenkirk, to David Letterman, help make you funnier. This week, my guests, SNL's Mikey Day and head writer Streeter Seidel help an acapella band with their between songs banter. Who's that worst singer in the group? The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, you only got in because your parents made a huge donation? To the group? To the group. The Yardbirds, right?

1:54That's the name? The Harvard Yardbirds. But they're open to change. Do you have a name suggestion? We're open. Since you guys are middle-aged, one erection. Listen to Humor Me with Robert Smigel and friends on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Humor me. I need some jokes to make me seem funny. Call Zone Media. Hello and welcome to Bear Offline. We are not a car. This is a podcast, not a car. And I am Ed Zitron.

2:41Today we have returning champion Steve Burke of Gamers Nexus joining us to talk about a little company called NVIDIA. How are you doing, Steve? I'm also not a car. Good stuff. I was just making sure. Just checking, are you triggered as well? because based on the Stanford video, there was an interview with Jensen Huang at Stanford. He appears to have been both triggered but also not mad at the same time. Yeah, well, I mean, he definitely seemed a little sensitive in that one. It's interesting. So just to be clear to the audience, there was an interview about a month ago, a month or two ago with Jensen Huang on the Duakesh podcast, which is a podcast that's both very fluffy but also occasionally has sentient thoughts.

3:27And there was this bizarre bit where I forget what the question leading in was. It was something about China, perhaps. And Jensen Wong just gets pissed off and goes, we are not a car. We are not a car. And it's just... He also, I think that was the same podcast, right? Where he was like, I'm not a loser. America's not a loser. We're not losers. Like he went on this. This is, I say this as a, I was a very fat child. and I was bullied a great deal. Let me tell you something. When someone's saying they're not upset, they're not a loser, they are. They are just, that's them saying it. Except I was just large.

4:06I wasn't a$5 trillion company. It really feels like Jensen is starting to go off the wheels a bit. Yeah, and I don't know if it's because, I guess it could be multiple things. It could be he's gotten to a size where he just doesn't care anymore. Maybe he is so important he's just dropped, like that's just how he is, and he's kind of dropped the act. Or, you know, maybe it's a top indicator. I don't know. I think it's more likely than that, because here's the thing. We're talking about this a few episodes back. In 2025, he was signing woman's boobs. That is right. He was all swaggy. He'd go out on stage at GTC and just be like, the more you buy, the more you save.

4:48We're the best. and everyone was cheering for him and he was like a rock star now he seems like buhkesh patel is 23 years old if a 23 year old was it was rude to me other than the numerous times they are online i would i would just be like okay it's not not that not that big a deal especially if your company is worth trillions of dollars and the quote is just a quote we are not we're not a car we are not a car the fact that i can buy this car brand one day and use another car brand the other day easy computing is not like that there's a reason why why the x86 deal exists there's a reason why arm is so sticky these ecosystems are hard to replace i don't know if that i mean like it's not really a clean analogy it's also the kind of thing it's also insane that they've got to this point without having a cleaner one than that yeah i mean it's that's easy to poke holes and i get what he's trying to say i get it like the architecture is yes it is difficult to move off of but also on the consumer side which is what he's talking about with buying a car and then buying a different one you can in fact do exactly that with GPUs so I get what he means more on the business side but it is I don't it's just such a sensitive topic for him lately and i don't understand if that's coming from a place of insecurity or i don't know if like at this point you know who you need to have on it's not me it's like a therapist to psychoanalyze jensen he's like a therapist to break down his mental state a director's commentary style thing like well okay stop there you see when he says he has a car this is a sign just like in here he's he's gonna cry but they paused it i so my theory is and we kind of we've kind of talked about this and then we don't dipped into it a ton but there was a short sale report from corporate research that came out that suggested that over 20 percent of nvidia's fiscal year 2026 revenue came from china right through a company called mega speed i think what it might be is that he really does need china i think it may be as simple as he really needs china he needs china so bad and chinese gpus terrify him in a way that that he's like that he's perhaps not willing to willing to totally yeah talk about and also he's not scared of amd i don't think the mi instincts are gonna gonna scare nvidia at all that would require i don't think so i i also i think amd is a known quantity at this point for jensen yeah and their strategies are known their technology is known it's really it's the the unknown technologies and strategy is probably what he needs to worry about and right now most of that's coming from Chinese companies there's a lot of them we have some coverage coming up yeah talk to me about it on Chinese GPUs, the rise of them kind of like our rise of Chinese memory video they get it's interesting it's interesting to watch companies like Jiaoxing which makes CPUs come to market and when they do in the consumer space they get kind of shit on for being a couple generations behind because I remember when some of their first CPUs came out and the early media reports that tested it were oh they're about the same as a three or four generation old Intel CPU and like I the perspective was one of mockery but I think that should really concern some of these companies because like if you come from nowhere silicon is not an easy technology architecture is hard if you come out of nowhere and you're like four generations back instantaneously that should be pretty scary i think for the companies that are in the space because it's it's the getting started that's the hard part right oh what do you mean by that what what is the getting started in this case the getting started in this case at least in the scope of china is largely going to be things like figuring out your fab so who's going to make the product do they have the technology to make it and if they don't how do you kind of work within the limitations of what you have access to right right because technically tsmc is not supposed to make um products for like chinese gpus or i mean sometimes it kind of happens anyway but um in the past but there's limitations of the fab that's a big challenge for them and then there's also um just the the actual first coming up with an architectural design uh once you have that you can iterate on it and make changes that advance it but getting anything to work at all that's that's the hard part right so once they pass that barrier and they have a fab that can make it from there you just iterate and as long as they have some customers they can, like any other company, just iterate.

10:05And if China has a built-in pool of customers because they have restricted access to external hardware then whether or not they're competitive they're going to have buyers. Well the other thing is as well, and this is one of my own personal things is I also have to wonder if there's not this whole thing I've been saying about data centers not getting built. When I say that, because I always get one comment from someone saying, actually, I just saw one being built near me. And people just with, I assume, no object permanence, which is like, I saw one, even though I'm saying they're not getting finished.

10:43If that's the case, I imagine that's quite scary to Jensen. Maybe this isn't it, but I imagine that's quite scary to Jensen as well, because if these things aren't getting built, and China is saying we don't need these GPUs, then that makes Vera Rubin a much weirder proposition as well, because it's like, okay, if China doesn't need these and we don't have the space for the new ones, why would we buy the new ones? Or what would we do with these old ones? Do we just junk them? The walls are kind of closing in for Mr. Huang. Yeah, I think so. I will say, though, on the premise of data centers are not being built, I'm not sure if you saw, but Oracle has a very nice beam in the ground.

11:24Several of them. I love that there's one photo, I forget which data center it is, they put up the first steel beam, I think, in Wisconsin, and there's one bloke with his hand on it and three others walking up. Yeah. And it's so good because it's like, yeah, I've seen this in London a hundred times, like a bunch of guys with hard hats going, oh, mate, it's going to take a minute. Is it stable? You better lean on it another minute, mate. It is funny watching that happen, But it is also so very weird that going back to the Stanford thing as well, that moment where he was like, oh, thank you for triggering me.

12:03Again, these are children. These are children. These are children with questions that you should be ready for, but these are children. How do you and your$17 ,000 leather jacket not just reflect these unless there are like very simple problems here? Well, and that one was interesting, too, because that segment he gets into, I'm not sure who the guy was sitting with him. I assume someone who works for Stanford. He was an optimist. Yeah, right. The guy fielding the questions, though, he makes a comment at one point where he says, we at Stanford have a$40 billion endowment. And he's talking about how they're having trouble getting access to compute and GPUs.

12:45And Jensen effectively, paraphrasing it, but not that much, he effectively says, you just need money. And he talks about how the first thing he would do is cut a billion dollars and send it off to a cloud data center service provider for compute, as opposed to buying and having their own solution in-house. Which, that, I think, also is concerning because it's the thing we've been worried about in the consumer space for a while, which is the you'll own nothing and the companies... Right. that they want to get away from providing anything other than dumb clients. Right, except we're not talking about a guy who's saying he can't get a GPU for video games.

13:32We're talking about a university that's considering hundreds of millions or a billion dollars of spend and Jensen's telling them to fuck off and use laptops to connect to a cloud provider. and to me it just it kind of seems like they're being a lot more open with the concept that owning the devices is dead and it's all going to cloud and that is he was talking about well you know you see people today they all have a laptop and they connect and the compute's not local anymore and that's what he's talking about and that should scare a lot of people How likely do you think that actually is, though?

14:17I don't know. With the speed of internet connections, I just don't know what... I don't know how practical it would be. These people don't really give a fuck. I think that Jensen Wong doesn't give a fuck about other countries outside of how many GPUs they buy. But it's like... I was on an airplane, yes. I was on an airplane, I was 100 years old, and I could barely connect to the internet, if at all. That alone makes me feel like this might not be, or is the suggestion that this would be a very classist thing? This would be like, the only laptop you can afford is one that is effectively just a device that connects to the cloud.

14:59I do think you start to see it cause segregation by class in terms of access to hardware, although that's maybe not unique to this industry. But the likelihood, just to pull a number, GeForce Now, which is the low-end online gaming service, game streaming to basically any device, they claim to have 30 million users for that. Huh. Which seems like a lot. That also, really? Yeah. This is GeForce Now? Yeah, GeForce Now. there's a public document that they talk about 30 million users yeah 30 million users i don't know that that just feels very on well i'm just thinking of the pc gaming industry like i for something of that scale you would i just maybe i'm just terribly ignorant that just feels very high to me because like every other game streaming service i mean they might be pumping their numbers because they do have an ad supported free tier well here's the thing i just looked this up while on air there are 35 million subscribers to xbox game pass yeah i find it very unlikely that nvidia which has failed to like they failed every single other like software like the omniverse you know you're you're you're my favorite subject the omniverse So like a terrible failure.

16:31Have they ever succeeded with any kind of external thing other than hardware? Yeah, exactly. I just, I don't believe that they have nearly as many, even with an ad supported thing. So they have a PDF called Nvidia dash story. PDF, our story 2025. And in here is where they, I'll have to send it to you. And here's where they, yeah, over 30 million members in more than 110 countries now have access to more than 1 ,900. Ah, there you go. There's the 30 million members over a nonspecific period now have access, could theoretically use. So that's 30 million people have signed up and given an email address.

17:22Ah, beautiful. Yeah. and so like how likely that is I'm not sure but that's an interesting story because I just learned thanks to the recent GeForce Now partner breach right that yeah that NVIDIA has partners to propagate this service kind of like some kind of like a wifi range extender makes sense that makes some sense yeah and I guess that's to try and solve what you're talking about which is the latency issue I mean the US is pretty woefully far behind right in a lot of places for internet where it's just non-viable

18:10Hey it's us the Jonas Brothers and guess what we have some big news What's the news Nick? Huge news We created our own podcast called Hey Jonas We invented a podcast? Well we didn't invent it We just contributed to it. We're the first people to do podcasts. Yeah, pretty wide range of podcasts. We're starting a trend. But this one's extra special. So how did we actually come up with the name Hey Jonas, guys? I honestly don't remember. I think it was on a call about what we should call it. Well, we were thinking I'm originally calling it one of the early names of our band. Before Jonas Brothers.

18:45This is how you guys remember it going down? Yes. I have a very different memory of this. We were talking about a thing, a bit for the podcast where people could call in and say, Hey Jonas. And then I wrote down on my little notepad, Hey Jonas, and offered it up as a potential title for the podcast. But thanks for remembering that, guys. Listen to Hey Jonas on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Just listen. We don't care where you hear it. Another podcast from some SNL late night comedy guy. Not quite. On Humor Me with Robert Smigel and Friends, me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman help make you funnier.

19:22This week, my guests, SNL's Mikey Day and head writer Streeter Seidel help an acapella band with their between songs banter. Who's the worst singer in the group? The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, you only got in because your parents made a huge donation? To the group? The Yardbirds, right? That's the name. The Harvard Yardbirds. They're open to cheap. Do you have a name suggestion? We're open. Since you guys are middle-aged. One erection. Listen to Humor Me with Robert Smigel and friends on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

20:02Humor me. I need some jokes to make me seem funny. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business? Think iHeart. Streaming, radio, and podcasting. Call 844-844-iHeart to get started. That's 844-844-iHeart. Will Ferrell's Big Money Players and iHeart Podcast presents Soccer Moms.

20:42So I'm Leanne. Yeah. This is my best friend, Janet. Hey. And we have been joined at the hip since high school. Absolutely. Now a redacted amount of years later, we're still joined at the hip. Just a little bit bigger hips, wider. This is a podcast. We're recording it as we tailgate our youth soccer games in the back of my Honda Odyssey. With all the snacks and drinks. Sidebar, why did you get hard seltzer instead of beer? Oh, they had a BOGO. Well, then you got them. Do you want a White Claw or something here? What are y 'all doing? Microphones? Are you making a rap album? Oh, I would buy it. Cuts through the defense like a hot knife through sponge cake.

21:20That sounds delicious. Oh, you're lucky I'm not a drug addict. You're lucky I'm not an alcoholic. You're lucky I'm not a killer. I love this team and I'm really trying to be a figure in their lives that they can rely on. Oh.

21:36Listen to Soccer Moms on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

21:46It's all just a very strange time. Actually, before I go any further, though, what is this G-Force breach you mentioned to me just before we came on the call? I realized we should give it some air time. Yeah, it's... So, the hacking group Shiny Hunters, or someone at least posing as them, that's kind of the funny thing with the hacking groups is it's difficult to verify. Sometimes they impersonate each other and there's no real good way to verify it. But a user representing Shiny Hunters posted on a breach forum, basically dark web stuff, with an offer to sell, I think it was for$100 ,000, a data packet where they claimed that they had breached and harvested data including two-factor authentication information, access flags, usernames, dates of birth, things like that.

22:45And they're offering it for sale for, I think it was$100 ,000. I'd have to check. And that was on a forum. They wrote it as if they had compromised all of NVIDIA GeForce Now. NVIDIA responded within a couple days and said, we've looked into this. Nope. What they've compromised is one of our partners representing the Armenia region, and NVIDIA kind of pointed the finger to just Armenia for the breach. That partner actually does service other countries as well and regions. So I think it's, I want to say Kazakhstan and Uzbekistan. They didn't talk about if any of them were breached, so it could actually be wider than NVIDIA is representing.

23:25But anyway. I find it hard to believe NVIDIA would misrepresent something. They usually are very straightforward. yeah never any slippery wording but let's change tag to china china china um and this is so you've got you we just what managed to hook us up for this episode was that gpu smuggling thing and we can talk about the super micro stuff which i think rocks i think that i've this whole time all of these scumbags have been scummy but in a very boring way there's not been any goofy science fiction shit or hair dryers. Yeah. And the fact that this, that Wally Liao was going, or one of the blokes was going into the warehouses and just kind of hair drying off the serial number.

24:14I know we might've talked about this last time, but it was funny enough to go over again. I love it. I think it's hilarious. And there, there were a lot of interesting things in the timeline where a lot of the stuff happened in August and, and some of the investigation in August. and that was the same time we ran our report and we were digging into some of that stuff too. And a lot of it matched what we found where during our black market GP report, we did talk to a Taiwanese company and a company that operates also in Singapore. And one of the things we learned was that they'll act as intermediaries where this one company, I couldn't show them or anything on camera back then, but we talked about it.

24:59Yeah, they work to bring in NVIDIA, I want to say it was GB200, maybe 300, but GB200 systems. So like actual racks of hardware. Oh, like an NBL 72? Yeah, like actual full racks. And they'll bring them into Taiwan and run testing. So it's a testing house. They do pre-testing before it gets deployed. They do configuration, stuff like that, on behalf of other companies, not for themselves. And their clients were in China. I remember talking to them about it because they're showing us these GPU racks and explaining that, oh, we test it, and it's for a company in China that we work with. And they seemed somewhat oblivious to the fact that this is not supposed to happen as they were giving us all this information.

25:52Wasn't it? Yeah, go on, sorry. Yeah, so they basically test it, forward it. And that was what we reported. And that's also exactly what, back last year, Jensen was regularly talking about. Oh, these things, they weigh thousands of pounds. It's not like some small potato chip you can put in your pocket. Yeah. Right? And it's total misrepresentation to your earlier point. And as far as we can tell, it's not like they're just smuggling in GPUs and crates of lobster and shrimp, which has also happened, by the way, but actually completed server products. But the thing is, I didn't realize, I guess you couldn't have said back then, I didn't realize it was an NVL-72.

26:38I'm not sure if it was an NVL-72. It was a GB200 rack. I don't know how many were in there. But if it was like a full rack, that's still, God, that was last year as well. If they had GB200s, yeah, I mean, I should have really asked at the time, but like, well, I don't know if you could have actually disclosed, but that was the thing. like because these various reports the Supermicro 1 the Culper report they all come back to a thing which is Nvidia frames it as oh nothing has got through or if anything did it's just a few things you couldn't get the big stuff through but every report seems to be like yeah entire racks are making it over and they have dummy servers which is the craziest shit they have just like fake ones that was fascinating to me I wonder what's in them yeah It is, I guess, brilliant.

27:27It's a very dumb solution. I don't mean that in a mean way. How do we trick the inspectors? Because basically inspectors will come through to ensure compliance, make sure that people who handle large amounts of these restricted GPUs, just like, I guess, handling large amounts of, I don't know, if you're in the pharmaceuticals industry, there's probably some level of inspection also. and they inspect it, make sure it's compliant, and sign off on it. And so you work with third parties for this process. And to pass inspection, they had, like you said, used hair dryers to remove serial numbers and labels.

28:06And then they had staged dummy servers that were compliant to kind of disguise the real operation that the DOJs That's the thing, though. So I guess it's only a physical inspection. yeah i'm not sure i was wondering that too because i did read the entire report and um unfortunately they the doj had screenshots of the warehouse but they didn't it was like screenshots of surveillance camera footage but no actual surveillance camera footage i could find so from everything we know it looks like a physical inspection i don't know that there's ever a power on if there is though you could still do dummy servers for that um but i'm not sure what it is It's going to turn out that you do more thorough testing than the DOJ.

28:55Because think about it. You do this, you know, obviously hundreds of times more about this than I do, but surely you could run a simple load test on it or something that would be like, okay, this could do this. Yeah, I mean, you could... It's easier to make something underperform, obviously, than overperform. So if they need to bring something down to look like it's a lower end part they could but the problem you really run into it one physical inspection if someone knows what they're looking at you'll be able to identify it anyway depending on what that entails but two is um on the software side you can look at firmware and you can look at the diagnostics and that stuff's pretty hard to trick normally you can spoof things but you have to do it on a massive scale yeah it's just i i'm not i the government what i can say is when i spoke to people in dc last year uh i they had their tech guy in the room these are staffers of congress and um he seemed pretty okay actually but there was a moment when I was talking about memory capacity 96 gigabyte, 128 48, things like that and someone interrupted me and asked me to clarify if that number was the bandwidth and we're not talking in per second or anything, it was just gigabytes no, that's capacity and I needed to briefly explain the difference and I'm sure they have people who understand this stuff maybe just wasn't in the room But I did learn that they don't really have any sophisticated testing.

30:40Because the point I made was like, look, restrict them or not. I don't really, I don't know. I don't know if I care. But if you're going to restrict it, at least do it in a way where it makes sense, where you can enforce it. And that would require some level of benchmarking. Because right now, the restrictions are done entirely based on the claimed performance metrics from the manufacturer. and the manufacturer knows a lot more about these GPUs obviously than the government. They can tweak the knobs to comply just barely, right? And so the point being, yes, I think any bedroom benchmarker who's just started their YouTube channel probably is more sophisticated.

31:24And so that's why NVIDIA, they're in just such a domineering position because they're up against people who don't understand their technology. Well, I'm reading off the Culper report here. So numerous experts told us that NVIDIA has long possessed the means to detect diversion, including pre-sale signposts and standard KYC checks, e.g. recently incorporated customers suddenly placed in large orders, sales without warranties, as well as post-sale technical indicators, server IP data mismatched server latency times and servers going dark without explanation. because that's the thing. I assume that NVIDIA must have some connection to every GPU, right?

32:04Maybe not completely phone home, but I... Yeah, they should know. I mean, it's... They do know. I'm not saying they know for sure because that would obviously be impossible to verify, but I don't see how they don't know. I mean, it's the professor we spoke with last year for our documentary. I asked him the question, do you think NVIDIA knows? and his response was, how could they not? These things are very valuable. You'd think they'd keep very good track of every single one of them. I just, I'm wondering, so let's, back to the wider AI bubble. With NVIDIA GPUs, especially like the next generation and then the generation after that, so Virirubin 1 and then Virirubin 2, which is the one megawatt scale racks, it's, I feel like I'm taking crazy pills when I talk about this stuff because when you actually think about it, if they indeed, I think it's moving to Kyber racks, they call them, the one megawatt ones.

33:03Okay, Kyber I'm not familiar with as an agent. Yeah, it's the next one. That will mean that the majority of, I mean, all data centers are useless. As in, you can't just install a one megawatt rack in a data center that's full of much more distributed, even 100 megawatts, because of just the power requirements. and it's just it feels like at some point nvidia is going to escalate too far that they just won't on this like that they will just think our customers have unlimited money and we'll do whatever we want yeah i mean in some way it seems like i feel like they're starting to address some of that by having now the government as more of a potential customer as well where I don't know if it's like you run out of money from private equity and you turn to government or what is going on, but they definitely have gotten a lot more interested in military.

34:00But even then, if the data centers aren't getting built, because Oracle's giving them a bunch of GPUs, we know that. Right. And it's just, I don't know. I mean, I don't know how this ends, but I'm also just, I don't know how this continues. I think, to me, the real top indicator, and I don't know. I mean, the market's probably, after I say that, the market's going to fucking rip for the next three years or whatever. But I'm not a market guy. But the point is, to me, the thing that jumped out as like, oh, this reminds me of crypto when it was getting too crazy, is this company Span. Did you hear about them?