How The AI Bet Pays Off + AI Lab Strategy Game — With David Cahn

22:49I remember, I think I was the first non-employee to use Devon in 2024, the coding agent, right? If you were trying the technologies, you saw, you could see the future. You saw that these things were going to be extremely powerful. And so, you know, you try these technologies. You see that they're going to replace cognitive labor. And then you also look at some of these concrete use cases. You look at what Sierra is doing in customer service. You look at what Harvey's doing in law. You look at what Juicebox is doing in recruiting. And you think, wow, like these jobs are all going to be different.

23:16So again, you're at the front lines. You kind of see that everything is going to change. And then you're trying to forecast that out. And there's a timeline to get there. And so I almost, I sort of avoid this kind of bubble conversation because the bubble conversation becomes very myopic. Suddenly everything becomes about one, two, three things. And people almost stop thinking. Like you say the word bubble and people just, their brain shuts down. And like maybe they're on one side or the other, basically based on where their financial incentive is for the most part. And so you just like can't have an intellectually interesting conversation.

23:46And the thing that I'm interested is like the nuanced conversation, because remember, 80 % of my job is I'm sitting in the boardroom of this company trying to figure out how do we navigate this AI cycle? How do we make sure that we're winners on the other side of it? That's what I'm spending my day doing is like, how do we win? How do we craft our strategy? I'm not a grandmaster like Elon Musk, but it's like, how do we work on our strategies that we do a good job at the end of this cycle. And sort of like bubble, no bubble is irrelevant. Like at some point there'll be corrections. We need to survive those corrections.

24:13In the long run, this technology is obviously going to work. We need to make sure that we're the winners and we need to be massively aggressive to make sure that we're the winners on the other side of that. So I think, you know, it's better to actually have the nuanced conversation than to sort of shut things down with this kind of binary language.

24:28Big Technology Podcast Host:And that's what we try to do here. All right, so let's keep going on the other side of this break. When we're back, we're going to talk about the greatest strategy game in the history of the world, as David puts it, and how the big tech companies are playing it. So we'll be back right after this. Hi, everyone. Alex Kantrowitz here. I want to tell you about a documentary I've made with Gravity to explore the future of AI agent security. To find out if we're truly ready for autonomous agents, I sat down with MIT professor Ramesh Raskar, former White House CIO Theresa Payton, Michelin's Group Chief Data and AI Officer, Ambika Rajagopal, and Sharon Guy, a former executive at Alibaba.

25:07Big Technology Podcast Host:They each offer unique insights into this evolving landscape. We conclude with Rory Blundell, CEO of Gravity, to discuss the path forward. With Gravity leading the way, join us on this journey. You can watch the full documentary at the link in the show notes.

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27:30Big Technology Podcast Host:You can rate his writing at dkahn, D-C-A-H-N dot substack dot com. Highly recommend you sign up. When David sends something out, I always make sure to read it. So let's talk about this great strategy game, which is what's going on between all these big tech companies against each other. uh what if i were to like read to you sort of my one-liner on some of these players and you tell me if you think this strategy is this is the strategy and whether it's going to be a good one yeah yeah i think like this was the this was my favorite post of 2026 and so i think in some ways the thing that's interesting to me is chess is like an obvious strategy game metaphor right so it's like obviously people are going to think about this in terms of chess i think the more interesting metaphors are like Starcraft and Azad.

28:17And I think this will inform how we think about the individual company strategies, which is on Starcraft for those who've played Starcraft, if not highly recommend at least reading about it. But it's like Starcraft is a resource allocation game and AI is a resource allocation game. And so I think as we get into it, what are your resources and how do you allocate those resources? That's the most important question facing every big tech company. And then I think there's a question of like, you know, there's three races in Starcraft. Like, what are your intrinsic abilities? We'll get into Google, maybe one race, Microsoft's another race.

28:47But like, what are your intrinsic abilities and intrinsic capabilities? And then the last metaphor I used in this post was Azad, which is this fictional game in Ian Banks, the player of games. He imagines a civilization where you literally play a strategy game and whoever wins becomes emperor. And I think that's what's happening right now in AI. I think that the eight players around this 4D chessboard think they are playing for the highest stakes in the universe. They are playing to be the emperor of the universe and whatever that means, the person who controls AGI, whatever that means. And so anyways, we'll get into the company specifics, but I think everything is downstream of what do the players believe?

29:23What are the resources available to them? And what are the strengths that their sort of race gives them to act in this chessboard that is the world?

29:32Big Technology Podcast Host:Okay. All right. Let's go one by one then and see how far we get. But for Anthropic, I wrote the strategy is dominate enterprise, dominate code via products and API. So how would you rate that assessment and what do you think their resource allocation play is? Disagree. I don't think that's the strategy. I think the strategy is corner the world's talent in AI and win, period. Elaborate on that one. I think it's been very clear. Anthropic has had a very consistent strategy, which is they stand for something. and know what they stand for. And that enables them to recruit exceptional talent and that talent compounds because in their view, and I think in a lot of people's views, Zuck clearly believes the same thing.

30:14Talent is the scarce resource right now. And so corner this scarce resource called talent. You got these people fighting for you and that's how you win.

30:22Big Technology Podcast Host:Yeah, and it is interesting. Like if that is Anthropics play, they actually lost far fewer people than competitors did to Meta during the meta super intelligence lab poaching spree back in the day. One interesting thing about that is, let's say you go into a world where, let's say, LLMs commoditize, right? Then you need to be able to win based on product. And if you have the best talent, then you could potentially have the best models and the best products. And that does seem to be down to like sort of one assessment of where Anthropic is playing right now. Does that track? But again, I'm going to push back on this.

31:00This is exactly where I think everyone gets confused because you sort of mix models here and you have to focus on what's the strategy. The strategy, and you can backtest this back to before Anthropic was famously successful, is the strategy has always been extremely consistent. Deeply, philosophically believe in AGI. It is all about getting to AGI. They believe we are going to get there and they need talent to get there. And I think what evidence at least so far shows that they have been able to push forward their frontier. And in their view, they're going to keep pushing forward their frontier.

31:28And sure, they're going to have these products and it's great that they have products and they need revenue in order to attract investment dollars. But at the end of the day, it is all about AGI. That is my read. Again, this is just an outsider looking in. I'm not in the arena. I don't know. But as an outsider looking in, it's like very consistent strategy and they're going to keep executing that strategy. And sure, they need to like deal with this noise around commoditization and they need to do it. But to them, it's just noise. It's just like, let's just execute the strategy. Andre Karpathy just joined.

31:54all this good stuff is happening, like, let's go, right? And I think that if you walk in the building, and I don't spend that much time there, but I think if you walk in the building, that's where you sit next to people at lunch, I don't think they're talking about like some China model. I think they're just like, how do we get the best people? How do we push the frontier forward? How do we make sure we have enough compute to do that?

32:12Big Technology Podcast Host:Okay, so but I would then say that the flaw in their model is that, you know, that can be, there's a chance that that is commoditized. Like the chance that AGI is commoditized is the flaw in that strategy. What do you think? That's your prerogative. I'm not a grandmaster. I don't like to, like, to me, I think it's, I don't like to go say like, oh, that grandmaster's bad. I'm not a grandmaster. I'm just like a student of the game. It doesn't mean that they're bad. It just means like, you know, look, let's go with the game of chess. When you move a piece one direction, it means that the other directions are shut off for you.

32:44Big Technology Podcast Host:So I think that if in this conversation talking about, well, you moved, it's a choice. You moved in that direction. You didn't move in that direction. That leaves your flank open. I think that if you want to talk about the game, it doesn't mean that you're a bad player. It just shows, okay, you've made that choice and that is your weakness. But I think that this comes back to this question of like, what are the fundamental resources available to you? You think that is where the chess metaphor breaks down and where StarCraft is more interesting. What are the fundamental resources that you actually can allocate?

33:12And at the end of the day, like if models commoditize, that's good, obviously not going to be good for a startup that is driving all the frontier work. And so I think you have to bet on a certain world. Maybe that bet is wrong. that's why startups are risky. Maybe that bet is wrong, but you do need to be opinionated. And I think what's beautiful about, as a student of the game, what's beautiful about the game that Anthropik's playing is that they're so consistent on that strategy. And if the assumptions they're making prove to be correct, they will be very, very valuable. Now, everyone has to make assumptions.

33:40And generally those assumptions need to be based on the resources that you have available. And so of course, Microsoft is going to bet on commoditization because based on Microsoft's strategic position that is a good bet worth making. And the universe is probabilistic. We don't know which scenarios are going to play out. And so the question I would put back on you is like, if you were Dario, what would you do differently? And the answer for me is I would do exactly what Dario is doing. I wouldn't do anything differently because I don't think you can play. You can't try to win in all probability scenarios.

34:08You need to try to drive the probability scenario that you believe is most likely. And this is where I think probability breaks down and I'm more of a chess player than a poker player, where I'm like, hey, let's drive to the end game that we want, right? And I think when you're on the inside of companies, that's how you think and behave. Wall Street thinks of everything as a poker game. It's probabilistic. CEOs think in terms of chess, like I need to checkmate the opponent. I need to get to AGI. What's the win condition? How do I get there? And so I just think it's not productive as a chess player to be like wondering, hey, is this like other thing going to happen?

34:39It's like, no, we just need to drive toward the outcome we believe in. And we might be wrong. And that's okay. Business is complicated. The world is complicated, you're not going to be right 100 % of the time. But if you get distracted, and I think this is what happens at big companies, so we can get into some of the hyperscalers, where you have a committee around the table, and everyone has a different opinion, that's actually much more challenging, because you actually can't consistently execute a strategy, at least for Dario, and I think for Sam, and I think generally for startups, and for Elon, for what it's worth, Dario, Sam, and Elon are all executing strategies very consistently.

35:10And it seems like they are doing a good job. Okay.

35:13Big Technology Podcast Host:This is funny because what I wrote down for open AI actually sounds a lot like what you said for anthropic. My line for open AI is build the smartest possible AI and figure it out. Disagree again. I think open AI strategy is everybody underestimates AGI, all in AGI, and we're going to be the most aggressive and everybody else is going to take fewer risks than we do. And we're ultimately going to be proven right and win. And I think if you look at their compute strategy. That seems like what the strategy is. And again, that's a very coherent strategy. Sam talks about this all the time. These things are exponential.

35:46People underestimate exponentials. And we're going to get there. And by the way, I think OpenAI has the added advantage, back to my resource thing of what are your resources, where OpenAI invented the field. So I think there's always an invented the field advantage. I think they have incredible talent in there. If anything, Zuck's attempt to compete with OpenAI and just the failure of that so far just demonstrates how good the talent still at OpenAI is. And I think Sam's strategy is very coherent, which is like, we're just going to be the most aggressive.

36:14Big Technology Podcast Host:Okay, so I think what you're saying about OpenAI kind of like their yes-anding anthropic. Like they're like, yes, we're going to drive towards AGI and we're going to try to build more aggressively than you. Yeah, and I think that's who Sam is as a leader. I mean, again, I always try to rewind the clock because everyone like forgets, but it's like, remember that he raised a billion dollars for this lab when it was like, that was a crazy thing to do, right? And then he raised$10 billion for Microsoft, right? He's always been, I think you have to backtest these strategies and ask yourself, when I look at the prior decisions, does this confirm or does this violate my assumption about the strategic thinking that is going on in these people's heads?

36:51And these are humans, right? They're complicated humans. They're humans whose impact is going to have global scale. And so I think it's fair that we analyze their decisions, but they're humans. And I think if you backtest Sam's previous decisions, he's been very consistently a big believer and he's very consistently been the most aggressive player around the board yeah all right

37:09Big Technology Podcast Host:so uh if if you don't want to talk about the weaknesses i'll talk about them and i would say if you're making that move right you're the flank that you leave open is what we were talking about earlier that duration mismatch where if you're going all in harder and faster than anybody else you're the most susceptible to potentially uh having that time frame not line up with sort of the technology's timeframe and your business timeframe have a mismatch. Okay, I will say that and let's move on to the next company, which is Google. So my one-liner for Google is, this is really fun, by the way. So thanks for playing the game.

37:49Big Technology Podcast Host:This is a game within a game. Like sports commentators watching the guys on the field, right? It really does feel like that. Okay, so for Google, of mine was mine is change search just enough to keep our customers and cross our fingers. Also try to build good models and cloud services without killing each other. Google is hard. So we'll spend some time in it. Google is hard because it doesn't seem to be run by a single individual with a single vision. And I think there's varying degrees to which this is true for the hyperscalers. But let me tell you what I would have the Google strategy be. And then let's try to understand what it actually is.

38:22Google's number one, it goes two big advantages, right? It has a cache machine from search that can fund a lot of things. And then number two, it has TPU. And I cannot overstate what an advantage it is to have TPU. They've been building this chip for a long time. It's a really good chip. Some people think that part of why Anthropik is doing so well is because they're using TPUs. And so if I was Google, I would be all in TPU. And I think they are to an extent, right? But they're right now hoarding the TPUs for themselves for the most part. They're starting to open up the gates to let other people use TPUs.

38:54I think something I've been surprised by is you look at Jensen, and I think one thing you got to appreciate about Jensen is the man has been doing this for 30 years, and for 30 years, he's been really consistent on one thing, ecosystem. You go to Taiwan, Jensen's a national hero. There's probably 100 people who Jensen's just made rich because he doesn't care about the incremental point. He's like, we're all going to win. It's all going to go well. Jensen makes other people rich. I think that's one of the best things about Jensen. He's not, I'm going to be the most valuable company in the world.

39:22you can have some juice too. And so Jensen sort of builds this ecosystem. You look at CUDA, you look at sort of the ecosystem he's built around the chip. It's like, if I was going to go into business tomorrow and start a company, I'd love to work with Jensen. Jensen's going to treat me well. He's going to be a good business partner, et cetera, et cetera. Google has this sort of like more insular thing, right? Google for the last 30 years has built everything themselves, right? Like everything is built in house. Everything is invented here. Even though they invented all the core technology behind AI, they like couldn't really figure out how to do anything with it.

39:52Now, they've been good at acquisitions historically. So, like, they've acquired a lot of companies and they're good at acquiring talent and their technical team is really good. But if I was running Google, to me, it's like the all-in TPU strategy just seems so smart. It's like, hey, NVIDIA is a$5 trillion company. We can build a multi-trillion dollar company just on TPU. But Google, and now let's come back to what is Google actually doing. Because they're hoarding the TPUs, I think they're actually doing the, like, go chase AGI strategy. And I just don't know if they're well set up to do that.

40:19because I think they are actually going down the open AI strategy more and more, right? It's like, we're just going to keep the TPUs for ourselves. We're going to try to get the best researchers. We're going to try to make the best breakthroughs. Gemini is going to be amazing. Gemini is going to compete. And maybe that's the right strategy because maybe AGI is such a big prize that it's just like not even worth some kind of hedge bet or some ecosystem bet. I just struggle sometimes where Google is one where I said, like, Dario's playing a beautiful game. Sam's playing a beautiful game. Like as a student of the game, I can appreciate beauty in the game.

40:49And to me, it's beauty, right? It's just like, wow, what an amazing player that is. Google, like, it's an amazing company. It's got amazing resources. It's got amazing advantages. So in some ways, Google is the easiest to appreciate as a company. But then when you think about the gameplay, it does sometimes feel disjointed. And so I don't know. Anyways, I don't have as clear of a view. I was very opinionated on the other two. I don't have as clear as a view at Google on what they're doing. They're spending$200 billion in CapEx. They're accelerating their cloud business. I think one thing to point out, and I think sometimes there's some finance 101 that kind of gets lost in these conversations where it's like, if I build a house and then rent the house to you, that's CapEx with revenue.

41:33So of course I can get rent revenue by building something. But you have to ask the question of how much revenue are you getting? And then for these hyperscalers, it's not just that they're building the house and then collecting rent so the revenue goes up but they're actually building the house and then investing in you so you can pay them rent and so i think there is this broader question on the hyperscalers which is like the resource they have is cash they're all using it to the maximum degree and is it almost this curse of like i almost wonder if there's like a resource curse for these big hyperscalers where they have so much cash so they're incentivized to spend it when really the thing that's going to drive success is like not cash and cash just can't can only get you so far.

42:13And sometimes I look at this CapEx boom and it's like, I think it's almost downstream of this resource curse. It's like, oh, I have so many resources. I have to spend those resources. I'm in this like game theory with Amazon, Microsoft, and Google all have these cloud businesses and it's an oligopoly and it's like cash cow, right? It's like the best business in history. Probably it's the greatest oligopoly in history. It's producing all this cash. So I kind of have to compete with the other guys. Anyways, you can kind of like pull the thread and And you sort of get to a place where it's like, this strategy seems downstream of my resources available to me, as opposed to being downstream of some outcome that I'm trying to get to.

42:49Big Technology Podcast Host:What is the alternative, though, for them? Like, is it to sit it out? I think that's where I said, like, what I would do, you know, and maybe this is wrong and I'm not in the building. I don't understand all the constraints that you have. But to me, it's like I would try to build an NVIDIA competitor. Like, I just think the TPU is a wonderful product. If I could have 50 % market share in 20 years of AI chips, that's a pretty good business. I would sort of have a management team that does that. Now, sure, my internal team can be a customer of that business, and there's advantages to vertical integration.

43:21But one thing, and I've been writing about vertical integration for a couple years, the reality is when you look at the ecosystem today versus two years ago, the vertically integrated companies have not been able to leverage that vertical integration into some model advantage. And so at some point, and this is where I think a great chess player has to change strategies or a great StarCraft player, at some point you get data. I think there is data that vertical integration isn't resulting in the advantages that these companies thought it was going to drive. And so, okay, maybe there's a different strategy.

43:48And I think there is a coherent strategy that's like, we're gonna have one team chase AGI and we're gonna also monetize this TPU asset. And then there's the search question, right? Like in some ways, if you do the old school, there's Alistair Narn, who I love and think very highly of and who wrote the book, The Engines That Move Markets, which is like the great book on technology investing, who says it's easier to short the canal than it is to be like, figure out which railroad's going to win. It's like, is Google search like the canals, right? Is Google search just like, you know, these ad-driven businesses.

44:17Part of why I think meta and Google are so all in AI is their businesses are the most at risk from AI. Like if we all move to chat GPT, if we all move, if our eyeballs move to these other interfaces, then these ad-driven businesses have a lot of questions. And so when you talk about what flanks you have, I think ad-driven businesses are a very risky place to be. So anyways, I think it's somewhat coherent what they're doing. I just think all of these businesses, these big hyperscalers, there's a lot more questions about. And part of it is like, and I think this is the beauty of founder run businesses.

44:48Easier for a founder, like look at Zuck, his strategy is coherent. We can get into it. He's like all in, right? There's like one strategy, which is like spend the most money, acquire the best talent. Who cares? Founder led businesses can just act and behave differently than non-founder led businesses.

45:02Big Technology Podcast Host:Yes. Okay, one question on the vertically integrated business is not being able to produce the foundational, like the leading models. Why do you think that is? So basically what you're saying is the companies who like their main business isn't necessarily selling the AI, it might be you can put it into play somewhere else. Like if you're meta, you can put it into play in a consumer product. If you're Google, maybe in Google Maps or Gmail, right? But they're all trying to build their own models. They've struggled to sort of compete with those that are not vertically integrated. to basically have to make the money on the model itself.

45:33Big Technology Podcast Host:What do you think has been the source of that struggle? Yeah, it's funny. I think like every 10 years, you know, the Harvard MBA professors change their mind and like is vertical integration good or bad? And so, you know, maybe just first principles in it, right? Like there's elements in which vertical integration is good. You look at Tesla, you look at hardware companies, vertical integration typically is pretty good in the hardware supply chain because you have all these supply chain partners and your supply chain partners maybe don't have, you know, you look at SpaceX, right? Like you had to vertically integrate.

46:01Like your supply chain partners were bad. Everything was too expensive. The math never worked. And Elon just squeezes vertical integration, vertical integration, vertical integration. And so now vertical integration is super hot because Elon has done such a great job of vertical integration. Let's propose the hypothesis that vertical integration between software and hardware, which is what they're trying to do with the chip and the data center and the model, isn't necessarily a good thing. Like it's just a real estate thing. I can rent the real estate thing. I don't have to buy the real estate thing.

46:29And now, again, I think you could debate this. I don't think this is clear. So there's a hypothesis, right? There was an argument, and I thought this was a good argument when it was first being made, just haven't seen the evidence. There was an argument that if I control the data center, then I can make a better model. That was the argument. When you look at the evidence over the last two years, it doesn't seem to be the case. And maybe it's because these companies are so big that the guy building the model is like over here and the guy building the data center is like over there and they never talk to each other.

46:54So you might as well, they might as well be different companies. That would be my hypothesis is that like in reality, they might as well be different companies. And so if they might as well be different companies, then aren't you advantaged just buying whatever the best chip is? Aren't you advantaged just like using whatever the free market exists for a reason. The anti-vertical integration argument is capitalism, right? Like capitalism emerged where you have all these specialization and like, you know, most of the trend lines of capitalism is you specialize in the thing that you're really good at.

47:20You have a relative advantage at. If you don't have a relative advantage, you let some other guy who has a relative advantage win that business. and maybe Apple is sort of the anti-vertical integration, right? Apple assembles the iPhone. Somebody makes this chip. Somebody makes the camera. Somebody makes this. Somebody makes that. And I just make sure the product is amazing. And Apple is better off buying the camera from some guy who makes the camera because there's 30 guys trying to make the camera for Apple and I get to pick the best one. So that seems to be the evidence so far. But we'll see.

47:48I think the evidence is not in yet in a way to be definitive on this. Okay.

47:53Big Technology Podcast Host:All right, let's do a few more. So for Meta, I have commoditize our compliments, spin the wheels until someone builds a good consumer AI application and then copy it and distribute it. I'm a simplifier, so maybe to a fault. So I'm just going to give you all of mine are very like. Good, good. Right. Which is just like buy talent. It's a mercenary army. Buy talent. You can pay enough and get the people that you need. And again, the question for Meta is like, can a mercenary army do as well as a missionary army? It's obviously a mercenary army. were buying these companies, insane golden handcuffs, billions of dollars for AI researchers.

48:29I happen to think that the people they've acquired are very good and that the team is very good inside of Meta. That's my personal opinion. And so I happen to think that there's a good chance that they do figure it out and that Zuck's approach is coherent. Again, it's like, what resource do you have? Well, you have Instagram, it spits off cash. What can you do with that cash? You can buy Alex Wang. And then the question is like, okay, well, does that get you far enough? And then the emergent question in 2026 is, do you have this cultural dysfunction where you have this organization with tens and tens of thousands of people, and then you have these 50 people off in the ivory tower working on the thing that matters?

49:04Clearly, and you see all these leaked press releases and whatnot. Clearly, there's this organizational dysfunction that has emerged as a result of this. And so I think the question for Meta is, what happens? And then the other question, you know, when I graduated college, Meta was like the hottest place in the world to work. And today it's not. And so the other question is, are you fighting a losing battle against organic talent flows? It's like, do you need to win the organic talent flow game? Right. And this is a question for all the big tech companies, which is like organically, the talent flows are not there.

49:33I spent a lot of time, we can talk about talent. I meet 300 young people a year. I spent a lot of time on talent. I'm a very talent-centric investor. The organic talent flows simply are not there for the big tech companies. In a way that 10 years ago, really good people did go to work at these companies. And today they are not perceived as leading edge companies.

49:50Big Technology Podcast Host:For Meta, if they figure it out, like let's say everything goes their way, doesn't it not really matter if there's no like consumer widespread, like consumer application of AI, like personal super intelligence? Or do you feel that if they're able to succeed in their strategy of this, you know, buy talent, hoard talent, then naturally that personal super intelligence will emerge? And this comes back to like, I think we're all underweight AGI. And I think these grandmasters are playing for AGI. Zonky's obviously playing for AGI. And so whatever that means, I think it's, I don't know if we have time to go in and like try to define AGI.

50:28There's no one good definition of it. But whatever it is, this definition that my partner Constantine proposed, which was basically you go from 1 % of cognitive labor done by machine to 99 % of cognitive labor done by machine, I think is probably the easiest definition, because that's what happened in the industrial evolution. 99 % of labor was done by humans, then 99 % is done by machine. Whatever version of that future is, you know, Zuck is going to be a very wealthy man if Meta wins that race and shareholders will be rewarded if they win that race. And so I think that is the path they are on.

50:59And again, I think it's coherent. Whether it will work is another question.

51:03Big Technology Podcast Host:Yep. Okay. So here's mine for Microsoft. I basically have it that Microsoft is going to try to knock OpenAI and Anthropic down a peg, which I think we've kind of talked about is turn those models into a commodity and leverage existing enterprise relationships for profit. I've always had a lot of respect for Satya Nadella. And I've always sort of, I think had this pretty optimistic view on Microsoft. I think they don't get enough credit for the fact that they own so much of open AI, right? Like the deal making that Satya has demonstrated in his career as Microsoft CTO is just unmatched. Yeah. It's like 27 % of OpenAI.

51:42In the beginning, I think it was more. Maybe that's what it is now. But in the beginning, it was a lot. There's these stories of Sam went to all the big tech companies, I'm pretty sure, and offered them this deal. And Saia was the one who did it. And so I think there's this question of Saia doesn't get enough credit for the fact that he's played a very, very good chess game. And again, to my beautiful player's comment, I think Saia is one of these players that you just have to stand there and go, wow, this guy is thinking at a level that we're not thinking. And I think to your point, to some degree, I think Microsoft's strategy right now is like, whoever wins will win.

52:15You know, and I love that. One of my favorite things about business, I think the best CEOs that I want to invest in are people who, no matter what happens in the world, I'm going to win. Alex Wang is one of the things that no matter what happens, he's going to win. And it's just because you're like nimble, and you move fast, and you're adaptive, and you're aggressive. So I think Saez had this strategy. And when I look back at 2025, when he attempted to kind of pull back on CapEx and had Oracle do a lot of the CapEx, I thought that was a pretty smart strategic calculation. He also updated pretty quickly that this thing is taking longer than he expected.

52:45And so he still has to be in the game. And so when I think about a company that's playing its cards just really well, I think Microsoft's distribution machine is amazing. So Microsoft benefits if OpenAI and the labs win and it's all frontier models and it's not commoditized. He owns a lot of that. He's going to do great. If they get to AGI, great. Like owning 20 % of AGI is pretty good. And then if it doesn't and he commoditizes, he's going to win the distribution game. And so like, I don't know, Saia, I think it's one of these players who he's sort of slower. He's not, you know, you don't see Saia publishing a tweet every day about some new thing they're doing.

53:20He's like a little bit more slow. You know, again, on my comment on Google, I said what I would do, I think I would probably be more aggressive if I was him on M &A. like he's been a great buyer in the past. He's someone that I think knows how to get the most out of companies. So I'm surprised they've been less aggressive on M &A. But again, like Zaya is a better chess player than I am. He, I think he does have a clear master plan here. And I think he's been extremely prudent and aggressive in how he's operated in a way that I really admire.

53:50Big Technology Podcast Host:So here's mine for Amazon. It's do very little, sell, compute, profit. it? That's probably the closest one that I agree on, you know? All right, good. Look at us. We're almost there. What is Amazon strategy? It's almost, again, it comes back to this like strategy by committee thing where it's like hard to know exactly what the strategy is. Certainly the output of that is like do very little.

54:15They have their internal kind of AGI lab. It doesn't seem like it's a big priority for them. They have a huge cloud business. Their cloud business does seem to be losing share to Azure and Google over time. It was the best of the cloud businesses in the software era. In the AI era, will it be quite as differentiated? I'm not sure. So I think Azure and Google and GCP have kind of caught up and have some pretty good advantages on AI cloud. And so you look at the cloud business and you think, I think your analysis is probably correct. It's like, hey, we're just going to along for the ride. We're going to do kind of what everyone else is doing.

54:50We're not going to do anything crazy. We're just going to do what everyone else is doing. We're the best at building data centers. Maybe to give them some credit on the things they're really good at. Like they're the best in the world at building data centers. They have the best cloud business in the world. They know how to build a cloud business and it's kind of steady as she goes. On all these earnings calls, they basically talk about like, hey, we're really good at building data centers and that's an advantage. Again, I'm waiting to see those advantages kind of materialize. I think it's a good argument, but like let's see it materialize.

55:16And so maybe again, maybe we're going to fast forward the clock in 10 years and it's kind of the simple strategies did end up working well. Obviously there's less to, there's less intellectually interesting about Microsoft strategy. It's just like, and the thing is like this do nothing approach is not really doing nothing. They're blowing hundreds of billions of dollars on CapEx. So maybe that's another thing that's kind of weird about the hyperscalers is the baseline is so high that you can't actually say you're doing nothing. Like you're spending hundreds of billions of dollars. You're spending all of your investors free cashflow.

55:44And I think this is something that does happen in these kind of crazy cycles is that our baseline expectation for its normal adjusts. So it's like, oh yeah, spending hundreds of billions of capex, that's like a do nothing strategy. That's actually insane, a lot of money that you're spending. And so in some ways I worry for Amazon, which is like heads I lose, tails I lose. It's like, if this all goes well and AGI happens, they're not well positioned for that. And then if it doesn't happen, they're kind of in the bath with everybody else on the capex that they've spent. And so it's like, where's the edginess?

56:16Where's the spike that makes you think like, man, this is a great strategy. So again, I don't know. There's some strategies I understand more than others. I assume these companies have better strategies, but I do think the founder led companies have some advantage in their ability to be aggressive and opinionated. Whereas you have this kind of committee washing in these big companies. Apple is the one by the way with the do nothing strategy. Like you got to look at Apple and say, wow, like there's some chance that Apple just comes out looking like a genius on this. Like if it does commoditize, Apple's not spending money on CapEx.

56:49Apple really is the do nothing strategy. Obviously investors are penalizing that for them today, but you can imagine the scenario where Apple looks great in 10, 20 years because of the decisions they made. And so Apple in some ways is also an opinionated strategy in a way that some of the hyperscalers are not. And I think the reason the hyperscalers can't be opinionated coming back to this game theory thing is they have this golden goose where they fight with each other and it's this amazing oligopoly and i do think there's this like winner's curse or resource curse in competitions where you're actually saddled by the fact you have this cash machine and you just have to like you use it because it's the thing you have whereas everyone always said about anthropic like they're on a knife's edge you know if they lose their frontier that's bad for them but people perform at their best when they're on the knife's edge and i think that has been the empirical evidence of the last two years nvidia

57:37Big Technology Podcast Host:this is probably too glib, but I just wrote, pray that inference isn't commoditized. I would say Nvidia prop up the AI ecosystem. And this is very consistent with Jensen's history. And I think to his credit, like a pretty smart strategy. Jensen just needs AI to work. If AI works and doesn't crash, Nvidia is going to be in a great spot. It's one of the most valuable companies in the world. Jensen is one thing I like to talk about in AI in 2026. It's like the AI trade has sort of degraded in the last three years. Like 2023, it was the year of NVIDIA, right? NVIDIA is like the greatest company ever.

58:10It's an amazing chip. It's an amazing technology. Kuda is amazing. He spent 30 years building this thing. It's like, when you think about 2023, it was like this amazing crowning moment for NVIDIA. 2024, you get Broadcom. Hocktan is one of the all-time great CEOs in business history. Broadcom is a premier brand. It's the number one design firm in semiconductors, of course, Broadcom is going to do really well. 2025, you get GE Vernova, you get Vertiv, you get Siemens. You basically have these industrial giants that step in and look, they're good businesses. GE is an American national hero. Siemens is a German hero.

58:47They're not quite as good as Broadcom or NVIDIA from just like a raw amazingness perspective, if you will, but fine. And in 2026, you have like SK Hynix, Micron, and Samsung, which are like right place, right time, price hikes, just like squeeze margin out of the hyperscalers. So he's on NVIDIA. Like, I just think it's worth saying it's one of the greatest businesses in human history. And so he just needs the thing to keep going. And I think that circular strategy where he's investing in everybody and trying to make sure everyone else wins, to some degree, I think it's like Jensen is leaving so much money on the table.

59:18And it's because he genuinely at the bottom of his heart, I think, just wants this whole thing to work. And I think he probably should get a lot of credit for that. And obviously doesn't. Nvidia stocks barely moved this year, even though these high flying beta companies are going crazy because they're raising price. Jensen isn't being insane on price. He probably could have been. He hasn't been crazy on price. He's good to the ecosystem. So I think anyways, ecosystem first is my summary of what Jensen is all about. And I think he's been about that for 30 years.

59:46Big Technology Podcast Host:So this idea that he'll give startups GPUs in exchange for a percentage of their company, that's basically his. If you have a chance of working in AI, I'm just going to make sure that you at least take that, get a chance to take that swing. And I'm going to give you the most precious commodity. And that's kind of part of that strategy. I think sometimes people's egos get in the way of doing what's right for them. And Jensen is someone who I think is the opposite. Like he's like pretty low ego about it all. He's like, Hey, I'm just going to make everybody win. Maybe I'll leave some dollars on the table.

1:00:13It's all great. We're all going to do great. AI is going to be amazing. It's going to change the world. Every consumer in the world is going to have a better life because of AI. Like I do actually view Jensen as kind of the make the pie big. The way that Everybody else is kind of fighting over share and this and that. I think Jensen just wants the pie to be really big. For what it's worth, I think that's why he's so obsessed with open source. He just wants the pie to be big. He just wants AI to make people's lives better. I think he's very well-intentioned. And I think it's because he's, think about how many years they spent building CUDA for this moment.

1:00:38Like in some ways, Jensen made a bet on AI a long, long time ago. Jensen was one of the first people to make a bet on AI. And I think that he can, you can't change who you are. That's maybe why I also, whenever we talk about these companies, I come back to the human personalities, game theory, what's their world model? I have my world model, which I've shared on this podcast. What's their world model? I think you can't change some age. You're not changing your fundamental world model. And Jensen's fundamental world model is you win, I win.

1:01:05Big Technology Podcast Host:Right. Okay. So for SpaceX, is SpaceX kind of pursuing the strategy that you wanted for Google? Not, they don't have their chip, but they started to try to build their own model. They're still building it with Grok. But I think they realized that there weren't, you know, they're sort of all in pursuit of AGI through their own model, might not have been the winning horse and then pivoted to being an AI cloud or a Neo cloud. And that's sort of how they're gonna live or die here. To me, SpaceX is like a meta commentary on financial markets, which I love. Which is like, you know, I mentioned earlier, like Silicon Valley's eating the world over the last 60 years.

1:01:39Like, it's been amazing. We have chips, we have Moore's Law, like so many good things have happened. And then we like have resulted in like, you know, Instagram and TikTok and whatever. You know, it's just like not, I don't think that the hope for humanity element has been a little missing. And Elon is almost this meta commentary, which is like, if you move civilization forward, then you make a lot of money. But he really cares about moving civilization forward. Again, to the underlying incentives, I don't think Elon is fundamentally dollar motivated. I think Elon is fundamentally mission motivated.

1:02:05And so let's go to space. Let's colonize other planets. Let's advance human civilization. AI is our way to get there. We're going to have robots. Elon, in some ways, is working on every important idea that matters for civilization. It's like, we need tunnels, so we're going to have the boring company. And we need Neuralink, so we're going to have Neuralink. And he's able to aggregate talent. And I just think his leadership style is so masterful, right? He attracts the best people in the world. He makes them want to do their best work. And he cuts all the blockers. You know, I mentioned management by committee.

1:02:34It's like great performers don't want to be managed by a committee. Great performers want all the blockers to go away. Let's just focus on achieving the mission. And you meet the veterans who were at Tesla for 15 years. They're so proud of what they achieved. My partner, Ravi Gupta, has this thing. He says, like, the meaning of life is earned achievement. And isn't Elon all about helping other people achieve that meaning of life? Like, what an achievement you feel when you were part of one of these companies. And so Elon is just so consistent. To me, Elon's about chasing what's good for humanity while bringing out the best in the human beings who work in his organizations.

1:03:07And obviously, they're intense. And obviously, people come and go. And it's imperfect. but SpaceX is pursuing the biggest missions for humanity right now. And it has the most optimistic vision of what, I do think Elon is correct in a lot of his commentary on like, he is pro-human. He's like fundamentally the most optimistic, pro-human, pro-progress vision out there. And that's why I think retail has lined up behind him.

1:03:31Big Technology Podcast Host:Okay, I wanna end here. And this is sort of a turn from where we've been the entire conversation. But I'm so glad that you wrote about this because I don't think it's talked about enough. And this is something that you wrote about how AI might change spirituality. And you even asked this question in the extreme, will humans worship AI and what would such worship even look like? And, you know, I mean, obviously the history of spirituality is humans worshiping what they think is this higher power. So it would go to stand to reason that like if we invent AGI or superintelligence, there will certainly be some people who will be like, this is the manifestation of the like effectively like we've created the creator so i i which is crazy and weird to think about so i'd love to hear your your thoughts on on where this goes and also just as a corollary to that how the pursuit of building a artificial brain may change the way that people think about religion itself at least the traditional forms of religion that we have on this planet today great question uh it's a deep thread to pull i'll try to give a an answer to it in a longer conversation, obviously.

1:04:41You know, sometimes I sort of have these like side quests that I go down and it can be multiple year side quests. So I'm just going to say that out loud, right? Like these side quests don't always converge on the main quest. The main quest is like technology investing. How do we build the future of humanity? I'm motivated by intellectual interest. The reason I got into AI, you know, almost 10 years ago is intellectual interest in what AI was and what it was doing and the potential. I sort of had this feeling, it's funny to think back to those times, I had this feeling of like, man, it's so crazy that we have all this data and we just make dashboards with it.

1:05:10That's what investing was 10 years ago. And I had this view of maybe we could do more with the data. It was really that basic of an insight and I pulled that thread. And the nice thing is you pull these threads and then some of the threads are longer than others. And look, this AI thread has taken us 10 years and we're still pulling the thread and we're going to be pulling the thread for a long time. This other thread, and this is a personal interest, not a career interest, is spirituality and God and religion. And I grew up religious and believe in God. And so what is God, right? And I think when I invest, you sort of try to invest in like emotionally mature humans.

1:05:43And so part of our quest, I think as individuals, is like to become emotionally mature ourselves. And part of becoming emotionally mature, I think sort of trying to understand the universe. I think this is why a lot of physicists go to the eye. You're trying to understand the universe. And religion in my mind is this like, you know, thousands of years quest to understand the universe. And I have a belief that, you know, 5 ,000 years of wisdom probably got us somewhere and that we were making progress. Like humans, I don't think our IQs have like fundamentally changed that much. Humans were pretty smart.

1:06:12And what humans did is they constructed whatever we call religion and they constructed these systems to try to get at ground truth in the universe. And in my view, there's like, it's all pointing at one truth. I think a lot of people would believe this. Like you can read the Quran, you can read the Torah, you can read the gospels, you can read the Mahabharata. Like there's kind of one truth in the universe. a lot of people have been trying to get out what that truth is. We call that truth God. Anyways, this is a side quest, right? There's nothing to do with AI. And yet it really informs our day-to-day lives, especially in the Valley.

1:06:37Like the Valley is this place that is so devoid of God. And you can pull the thread of like, why is America, not just the Valley, the Valley is an extreme version of this, but why is America so empty of godliness, right? And then you kind of pull the thread and you go back to Freud and Freud basically said like, hey, actually God died. Freud didn't kill God. He just noticed that God was dying, that religion was dying in the West. And Freud invents therapy and therapy culture. If you look at the last 20, 30 years, therapy culture has sort of taken over. And yet, you look at the stats, people are lonely, people are depressed, people are unhappy.

1:07:12And so I actually don't think this, these are parallel threads. Like AI is happening, and then there's this broader cultural thing that's happening. And frankly, people don't really want to hear from me on the cultural thing, which I get. It's like, I'm just a VC who's investing in startups, fine. but I think that the cultural thing has echoes inside of this AI universe where I think one view of it is it's the Tower of Babel quest right we're trying to build God that didn't end well in the Tower of Babel what happens how does that play out so I think that's one view and then the other view is that hey God died in the early 1900s just as societal level and then these people are trying to create a new God and maybe they will successfully create a new God and maybe that will re-infuse the world with some spirituality and I think there's going to be a lot of debate along the way of is this good is this bad it's hard to have an opinion um i'm i'm still in the you know i'm in the 10 years ago on ai like i'm in the early phases of pulling this thread but i will say the more i pulled this thread the more i've learned i think it's intellectually extremely deep area there's a lot of people who've written about it and i'm probably in inning one or two of learning more about uh what i would call transcendence it's the transcendence quest like spirituality and religion is one version of that i think we all sort of crave transcendence and in some ways this AI quest is sort of fulfilling this need that people have for transcendence and I wonder if that is part of what's powering it why it's become so big and I wonder how that plays out as the technology evolves.

1:08:33Big Technology Podcast Host:Yeah, no, it's crazy to think about and I think you're right. Like it isn't talked about in terms of AI development but there's no avoiding it. I think it has to play some role when you're trying to create intelligent life on your own whether you believe in God or not there is some spiritual parallel there. There's this question that we all share in common, which is how do we heal society? Society is hurting right now. How do we heal society? Okay. Do you think AI could do that? I don't know. I think there's elements in which it's been good and there's elements in which it's been bad, right? And I think to some degree, I think that exacerbating loneliness is concerning.

1:09:12Certainly technology has made people very lonely. Communities are breaking down. We don't have, people don't have a sense of community right now in this country. And so how do you do that? I think there's one argument, which is like return to the religions of old. Maybe that will work. I don't know. Right. It's as a technology guy, it just always seems hard to go backwards. So how do you go forwards? But then you have all, you know, you have Peter Thiel saying that it's like the antichrist. Right. So it's like, what? I don't know is the answer. And this is why I'm pulling the thread. And I think it's interesting.

1:09:41And I hope that through developing this technology, we come out with some optimistic answer that enables people to have enriched lives. I do think a lot of the people who are building this technology believe that once we're freed from daily labor, we're going to be able to have these rich lives. I do think there's a Jewish phrase, which is there's no work without Torah and there's no Torah without work, meaning like we need the spirituality crest and we need to be grounded by some real things in life that we're working on. And so I think this dual quest is in some ways like the dual quest of humanity.

1:10:12It's like you need to earn your daily bread and then you also want some version of transcendence.

1:10:17Big Technology Podcast Host:well i hope you keep writing about this and folks i i do urge you to go sign up for david's newsletter dcon dc hn.substack.com i'm looking forward to reading uh more of your writing and i know you don't do this often so really appreciate you coming on the show and i hope we'll see you again david thanks for coming on thanks alex thanks for having me fun conversation really fun really fun well one of our better ones here so thank you again and thank you all for listening and watching and we'll see you next time on big technology podcast Thank you.