AI Insiders Breakdown the GPT-5 Update & What it Means for the AI Race w/ Emad Mostaque, Alex Wissner-Gross, Dave Blundin & Salim Ismail | EP #186

28:35We're starting to see increments on frontier math, tier four, that if you extrapolate them, suggest that, and I've gone through this exercise, and it's a running discussion between me and the folks at Epic AI. If you project this forward, you find, by again, the law of straight lines, by the end of this year, where we, frontier AI are starting to reach 15 to 20 % of hard math problems being solvable by AI. project that forward another year. So by the end of 2026, you get to 35 to 40 % of math. Hard math being solved. Projected forward to 2027 end of year, you get to 70%. So what I think we're staring at is a slow motion solution to math.

29:25And that's one of the reasons why I think it's just riveting. All math. Or at least, at least math that math has currently understood in in summer of 2025. Isn't that amazing? And I completely agree. And it does play into a mod's theory that maybe they slow played it intentionally. Because if you were to ask me, hey, what happened yesterday, they're crushing this benchmark relative to any other model. They cut the cost of AI at least in half, if not more. And they caught up to everybody else encoding. Like if they just said that in like two minutes, that would have been the Olympics Death Star moment.

30:00Yeah, just do that. Wait, can I drill into that just for a second? Alex, when you say it can solve math, right? Can you give a specific example of what that looks like? Because I struggle with that even though it's better than 800 on your SATs, I guess. I think what's a specific problem or class of area that you could say that it's done something interesting? Yeah, no. So you can look at the Epic AI website for Frontier Math, Tier 4, C lists of example problems that have been published. These are problems, hard problems in number theory, in analysis, in algebraic geometry that would require a professional mathematician weeks to solve that are being solved over the course of a short benchmark by GPT -5.

30:50It also asks a question like what does this look like in practice? Say the dog catches the car and we actually get AI that achieves superhuman performance in math. I think it's a profoundly different world. It is and it's hard for not everybody's a mathematician, not everybody's an engineer, but the way a lot of things get designed and built and created in the world is you run into problems and you immediately look up in these massive books and tables. Has anyone ever solved this before? And so if the AI is continually solving and archiving all of these mathematical capabilities and just making them available, then the engineering algorithms can just find it and use it, plug it in and go.

31:32And it's the same in coding. You know, huge libraries of solved problems, solved modules that can be assembled to create things very, very quickly. I want to close on E -Mod here before we move on just because we have a lot to cover still. You might closing parts on this one. Yeah, I mean, it's kind of an improvement over the O4 Mini. Again, we had the IMO gold medal from OpenAI, whereby they had a verifier on the other side of their model. And they said, just by extending the RL of GPT -5, they got a gold medal. So this model can get a gold medal, so it can go even higher if you push it. From the last few days of doing some pretty advanced math, I can say that GPT -5 high is probably the best math model out there.

32:15But the really crazy thing is I think it's getting to the point now whereby the solutions to math won't be complicated, they'll be really elegant. And that's how we typically see breakthroughs. So people are thinking giant supercomputers, lots of work, but most of the advances that we've had in science and math have actually been just very elegant. And if you can do a million different things at once, then you can maybe find some of that elegant theory under all of this. And that's what's going to be a big leap. And if more and more people can do that now, because the minidium and the higher actually at the same level, which is crazy, then you might have a lot more mathematicians and the humans and the AI can figure out what that elegant theory is.

32:54And now it's time for probably the most important segment, the health tech segment of moonshots. It was about a decade ago where a dear friend of mine, who was incredible health, goes to the hospital with a pain in the side. Only to find out he's got stage 4 cancer. A few years later, for Tonyer brother of mine dies in his sleep. He was young. He dies in the sleep from a heart attack. And that's when I realized people truly have no idea what's going on inside their bodies, unless they look. We're all optimists about our health. But did you know that 70 % of heart attacks happen without any preceding no shortness of breath, no pain?

33:28Most cancers are detected way too late at stage 3 or stage 4. And the sad fact is that we have all the technology we need to detect and prevent this diseases at scale. And that's when I knew I had to do something. I figured everyone should have access to this tech to find and prevent disease before it's too late. So I partnered with a group of incredible entrepreneurs and friends, Tony Robbins, Bob Hurrey, Bill Cap, to pull together all the key tech and the best positions and scientists to start something called Fountain Life. And then I go to Fountain Life to get a digital upload. Tuneer gigabytes of data about my body, head to toe, collected in four hours, to understand what's going on all that data is fed to our AIs or a medical team.

34:11Every year it's a non -negotiable for me. I have nothing to ask of you other than please become the CEO of your own health. Understand how good your body is at hiding disease and have an understanding of what's going on. You can go to foundlifet .com to talk one of my team members there. That's foundlifet .com. Alright, I'm going to dive into a bit of video here. this is labeled Let the Vive coding begin. GPT -5 is clearly our best coding model yet. It will help everyone, even those who do not know how to write code, to bring the ideas to life. So I will try to show you that. I will actually try to build something that I would find useful, which is building a web app for my partner to learn how to speak French, so that she can better communicate with my family.

35:01So here I have a prompt. I will execute it. It asks exactly what I just said. Please build a web app for my partner to learn French. So I can simply press run code. So I'll do that and cross my fingers. Whoa. I read it. What up? So we have a nice website. Name is Midnight in Paris. Oh, I love that. So romantic. We also see a few tabs, flashcards, quays, and mouse and cheese exactly like I asked for. I will play that. So this has Moshap. All right. I'm going to pause it there. Commentary. Dave, what do you think about this? So this is exactly when Paulie Market plummeted. So I'm so glad you captured that clip because the audience is looking at this and they're acting like, wow, it didn't this blow your mind.

35:54There's only two types of people in the world, people who don't give a crap about this or or who already do it, but they've been doing exactly this with probably with Claude IV, or sorry, with Claude Opus or Claude Sonnet for non -maxima. They've been doing this for like four months. And so it completely missed the mark, even though it was the best presented part of the presentation, purely because it didn't show off the new capability or the new abilities. But the ability to do this in chat GPT, In other words, a single model allows you to do everything. So, I mean, if I'm an investor in the upcoming round, this is really big news because anthropic, you know, generally claims to be the leader in coding, most of the people who do heavy -duty coding lead on anthropic and they completely caught up in this release.

36:47And that's a very, very big deal because you know, not only are you good at everything else, but you're actually as good as anthropic in their wheelhouse. Yeah, the question coming out was, is this an anthropic killer? Yeah. Here's my question about this. So you generate this web page, web app, right? But let's say I'm a language startup and I want to launch that actual product. There's a huge amount of backend stuff I have to do to make it systems integrated, integrated with Stripe, et cetera, et cetera. And we're finding that that's where all of the work is going. and therefore this graded through up a front end and looks good like a front and prototype, is it actually doing that much behind the scenes or is there still a lot of the work?

37:31And that's the question I have for the folks on the panel that we have here. Here's my question for you guys. How should someone listen to this who hasn't played with Chat GPT -5, let's call it that, play with their own vibe coding on this? What's their first step? What do they do? How do they play? I would encourage everyone who has ChatGPT5 thinking access in particular to create a game. I think this is one of the simplest exercises you've always wanted to create a long -tail application, a game, or an interactive app of some sort, and you don't have coding experience, go and ask chat GPT -5 thinking to implement a new app for you, a new game, a new something, and let it rip.

38:17Do it right in the canvas. There's a canvas button right down on the little nav bar, search bar at the bottom. So click the canvas button. Do it right there locally. It's much more convenient. They've added a lot of capability inside the canvas. So you can just build an entire game for yourself right there inside. I just got to, you know, go to chachybd .com and do it right there. Amazing. Yeah. I think the performance isn't quite there yet versus rap play at lovable or bolts, which do everything Salim said, the stripe and every other integration. But again, these things will verticalize very quickly.

38:51Let's move on here. And we saw the co -founder of Cursor Come On Stage and spend time with Greg Brockman, in the OpenAI president, Dave, what do you think about this? How important was this? Well, incredibly important. So it was not just a little time. It was a huge amount of stage time in one of the biggest live streams in history. So it was very important. And of course, what happened is, you know, OpenAI was going to buy wind surf and essentially attack cursor with an incredibly powerful competing product that's virtually identical and functionality. Actually, people are in the office about half use cursor, about half use windsurf.

39:33It looks virtually identical. And so that deal fell apart. Microsoft torpedoed it because of intellectual property rights that Microsoft would have. So they torpedoed the deal. And here we are just a couple weeks later. And OpenAI is now saying, you know what? We're going to work very closely with cursor. We're going to give them a lot of stage time. And I think what we're starting to see here is the alignment between the coding companies and their LLM partners. Because previously everything connected to everything, so any LLM is available through any coding platform. I think going forward, it's very likely that cursor works closely with OpenAI.

40:13You know, wind surf is now part of Google or sort of part of Google, half and half, half and half out. And then of course Microsoft wants VS Code and they want to build their own thing. And so you're see this vertical alignment and also already people all over Twitter or X are saying, hey, when I use it through its kind of native platform through the Canvas, it works much, much better than if I try and select it through something like lovable or replete. And so everyone's speculating that they're doing kind of what Microsoft always used to do. They're hampering the people that aren't playing by their rules in various subtle kinds of ways and there's no way to prove it but it's certainly all over the internet.

40:53Yeah I mean I think if you if you look at this open AI and Anthropic both have $3 billion in API revenue. 1 .4 billion of Anthropic's API revenue so about half is cursor and Microsoft co -pilot and so they priced GPT -5 about 40 % lower than on it. So they're coming after Anthropic basically and they will undercut the one price and now the performance is roughly equivalent. They're just basically trying to kill Anthropics revenue. All right, the AI wars continue. Here's another one. This is an important part of the story from the GPT -5 announcement and we hear Sam Altman speaking about AI saving lives.

41:41One of the top use cases of chat GBT is health. People use it a lot. You've all seen examples of people getting day -to -day care advice, or sometimes even a life -saving diagnosis. GPT -5 is the best model ever for health. It empowers you to be more in control of your health care journey. We really prioritize improving this for GPT -5, and it scores higher than any previous model on health bench, and an evaluation that we created with 250 physicians on real -world tasks. So I think a lot about this, right? And the AI models are at this point, I think, better than most physicians, but they're only as good as the data you feed them.

42:23And that's the biggest challenge. Can you get access to the data that truly tells your story? Right? So comments. So Sam did a very brief introduction to kick off the event yesterday. And then he did a much longer segment with a woman who was a cancer survivor who had really done her own self -diagnosis and completely changed the course of her own treatment by talking to chat GPT and getting very, very good advice from chat GPT. And I think Sam chose to do that segment himself. Largely, I think, because one, it's a very emotional human segment. I thought pretty well done, too. But also because it's going to prevent the regulators from ever saying slow down or stop.

43:07If you're going to save lives that are imminently, you know, would have been ended, you cannot slow down. You have to keep moving. And I think that's very important as a mission for OpenAI to keep the throttle, you know, there are two drivers to keep the throttle going. One is the incredible healthcare benefits. The other is the threat from China. And so both of those are, you know, right front and center. So, you? And I think this felt more like PR to me than anything else because I think you could do this with many of the models rather than this. Okay, maybe incrementally better than the others.

43:44I think integrated broadly into somebody's healthcare regime is where we'll see the real value of something like this rather than this immediate thing. I do take Dave's point. I think that's exactly right. I think they're pushing hard to kind of show they're trying to add a lot of value. Yeah, let me throw in something on the personal front here. So one thing that I do and I've talked about it openly on this is I'm chairman of an organization called Fountain Life. And when folks come in for what we call an upload, we fully digitize them, right? We get 200 gigabytes of data about you full body.

44:21I think you just do yours. I did it a few weeks ago. I just got my results back. I had 200 gigabytes of data. So for me, what was important was I reduced my non -calcified soft plaque, which is the dangerous plaque that can give you a heart attack in the middle of the night, down by 20 % to the lowest it's ever been. I got my liver fat from 6 % down to 1%, which is fantastic. But what happens is in my Fountain Life app, we're running this on Anthropics right now, But maybe good to GPT -5, we're running much of the other programming on Gemini. But here's the point, I can query all my data. The fountainlife system pulls in all my wearables, right?

45:08So Apple or my Catees glucose monitor. And I can ask a question. I just asked a question there today. I said, listen, there's a point at which my deep sleep increased significantly. What was the supplementary medicine that increased it? And being able to explore stuff like that is amazing. So the best AI healthcare models in the world are great, but they're directly a function of, do you have enough deep data about your physiology over time to understand what's going on? I mean, ultimately that's critical. And EMI, you're thinking a lot about this. I think my liver fat went from one day to the next.

45:51to six percent box week. Yeah, yeah, yeah, yeah, heading towards, you're heading towards Fuego, honey. Well, I mean, I mean, you come through fat life yet? I haven't. Um, I need to find the time to do it. You're the Godfather to my kids. You got to come. I haven't, I have done the heart test where they check the, if you have soft plaque in your, in your, and Lily was like, with your diet, you must be, must be on the verge of a thing, go get it done. Every guy, they said, and they said, you're whistle clean. We got nothing. That's great. You know, but the challenge is, yeah, so you had a stake and, You're just one I went to town one quick point right your body is incredibly good at hiding disease And you don't feel a cancer until stage three or stage four 70 % of heart attacks have no Significant precedence so you have to look you need to get the data.

46:36I have a schedule I mean first I want to give this shoulder shoulder that doubt that now I can go and do other stuff All right, well, yeah, I think I'm sure and you think you came through didn't you? I haven't been through yet now. I nearly got that I will, I will, we will have to get healthy and we don't need any data. I think this will be really interesting though because the models themselves are getting good and again better than any doctor. Like they mentioned the health benchmark that they have. Doctors scored 20 % and the latest models they have score 60, 70 % on that. So they're better than any doctor.

47:11But the really exciting thing is like we built a healthcare model called IIMedical which we released open source, so we've got a much better version coming, which outperformed every single model except for GPT -5 and O3, and it works on a Raspberry Pi, it works on anything. So by next year, I think we'll be at the point where the key thing is you get the right data, especially like Fountain Health has so much, and they just have AI just going constantly, because what you wanted to figure out stuff proactively as you feed at the data. And now we're seeing these models being able to just detect breast cancer five years in advance and other things like that.

47:46When you talk to radiologists, they're like, we don't have any software that's actually checking all the radiological scans over time. Wouldn't it be nice if that happened? Now, you have the capability of doing that, which I think will save so many lives before the AI makes diagnosis. I love having a very deep bench of data for me over the course of eight years. Right now I go from annual upload to quarterly updates, and ultimately it is all about the data. Well, I think that if you just say one quick thing, like right now, everyone on this should be trying to get as much data as possible because the models are coming and the more models you give these models about yourself, the longer you will live and the better you will live.

48:32Before now, we didn't have the right models, now we have the right models. And again, there'll be available via OpenAI and then also open source. Yeah, I mean, so for all the folks building stuff around this, here's my ends, here's my desired instincts. I want to get it to a point where you're, you're about to drink a coffee and it says, hold on, wait 10 minutes. I'm still metabolizing the donut. Give it a time to I can optimize your digestion. I think that's when things get really far. I want the AI to say, yeah, warning, pull up and don't eat the donut. But it's not a problem. All right, let's continue on here.

49:08I hear you see another demo that came out of the GPT -5 announcement, an executive assistant for all of us. And I use Outlook right now from Microsoft, and this got me thinking about moving to Google Calendar. So let's play the demo. And we're giving ChattityPT access to Gmail and Google Calendar. Let me show you how I've been using it. I've already given Chattabee T access to my Gmail and Google Calendar, so it just works and it's easy here. But if you hadn't, Chattabee T would be asking you to connect right now. Let's see what Chattabee T is doing. I was pretty quick. Okay, so Chattabee T has pulled in my schedule tomorrow.

49:48And oh, without even asking, Chattabee T found time for my run. I don't think I was invited to watch the liberation. We'll get you on there. We'll get you on there. ChatGPT has found an email that I didn't respond to two days ago. I will get on that right after this. And even pulled together a packing list for my red eye tomorrow night, based on what it knows I like to have with me. It's been amazing to see that as GPT -5 is getting more capable, ChatGPT is getting more useful and more personal. Right. I found that impressive. I have an amazing chief of staff, Esther, that many of you know. And she's incredible, but I think she could use this and I could use this.

50:32Thoughts? Yeah, I'm really coming around to a meds theory that they deliberately undersold it because this is cool -ish, but you know, it's finding an email that you didn't open two days ago. You don't need AI for that. But we are using this stuff for business planning inside of, you know, I'm the chairman of a couple of companies that have hundreds of employees and knowing what everybody's doing and why they're doing it is immensely challenging. And we're having a field day with this in very high level strategic planning and understanding performance and understanding everything going on. It's an incredible unlock at the executive management level.

51:09Sure. And again, for me as a watcher, you know, kind of frustrating to see it, you know, planning out her run when I know it can actually plan entire business units. But still, the point is it's very, very capable. So I was frustrated, but I get it. All right. You know, the opportunity to now enable, you know, Eric Brinjolson calls this white color drudgery, right? There's a lot of craft that we do just to get through. I think this solves for a lot of that. And I think this will amplify the capability of a lot of people. So I think chiefs of staff rise up a whole level because you could use this effectively and do a lot more.

51:47Oh my God. Well, the standard behavior in corporate environments is individual people desperately want to help move the company forward. They want to contribute. They want to have maximum impact. And they want to know that the executive team knows they're doing that. And it goes horribly wrong when either they don't know exactly what they should be doing. Or they do something amazing in nobody notices. and this completely unlocks and unlocks and solves problems. I love that Dave. I love that. So when Donna and Nick Pingming go, hear what dates are you available for the next WTF episode? And you're 14 that intersect, figure it out with your calendar.

52:23And I will be able to get help with that. You will. In fact, it'll get scheduled without your permission. Well, we're kind of dancing monkeys anywhere, right? You would just be told, okay, be here at this time. But it's interesting, right? I do what's on my calendar. When I hit it, it's very funny. I'd gotten to know Larry Page and Sergey Brennbury well. Larry was on my board at XPRIZ in the early days. And there was a point at which they said, by the way, we fired our executive assistant. And what do you mean you fired your EA? Well, we learned that if we don't have an EA, no one could put anything on my calendar without our permission.

53:00And then like a decade later, I was scheduling a podcast with Elon. And I said, Elon, who should I schedule with? and he goes, me, I said, don't you have an EA? He goes, nope. So maybe that's the mistake we're making. All right, let's go on to the next topic here. This is, this reads AI revenue model. So GPT -5 is available now for free, including its most advanced models. At the same time, Gemini is their advanced models. They're $249 a month. Grock Heavy is a $300 a month. And how do you think about the pricing situation here? or chat GPT is 700 million weekly active users on their way to a billion probably within the next six months.

53:43Dave? Thoughts. Yeah, no, they really slash the price. It shows up for the user user, but also the APIs, but I think we have on the next slide. We do. Let me go ahead to that slide here. Yeah, here you go. Yeah. This is what I'm talking about earlier. They just absolutely, the cost per intelligence came way, way down. I think he said 40 % I had it about half of where we were a week ago. That's a big big deal and it's you know it's more than you would expect on the curve and again they didn't really sell it yesterday in any big way but it is a big step on that Pareto frontier. year. This is a quick.

54:2124 .5 was 75 dollars input and 150 dollars output. Well, as compared to a bug 25, I might input in 10 dollars on output. Yeah, I would say GPT 4 .5 was never quite on the cost frontier anyway. What I see in this with this almost an order of magnitude reduction in the cost frontier is unlocking new use cases and those I would expect to be qualitatively different. So for example, favorite use case, if tokens for LLMs are suddenly an order of magnitude cheaper, that means that for, for example, scientific discoveries or mathematical discoveries that require searching lots of possible completions of sentences, of theorems, etc.

55:13Then you can do 10 times more searching. And that makes a qualitative difference. You can brute force it in that sense. Exactly. I got to get a shout out to like there, you know, probably thousands and thousands of engineers out there that listen to this podcast. And if you tried writing code through any of these models, any of these really great models, either the Anthropic or the new GPT -5 or Gemini 2 .5 Pro, if you tried a month ago, you have to try again today. It's just night and day different in terms of being able to build something without even looking at the code, in terms of getting exactly what you asked for.

55:55I'm using mostly Gemini 2 .5 Pro deep think to do the planning, but then I'm putting it into either GPT -5 or Cloud4S on it, Max, to do the coding. It's working like you would not believe. And in night and day better than just a month ago. How many of the frontier models do you have opened at a time? And are you trying the same thing on each of them, Dave? Yeah, I keep them all open, actually. Of course. So I've got to... But, you know, look, it's 250 bucks a month. It's not going to kill you, and you can turn it off anytime. But I keep them all open and I don't usually try GROC for code. I do everything else.

56:35That's her why I should maybe I should. Alex or E -Mod, how are they getting these cost reductions? I think a lot of it is based on public information shared by the Frontier Labs. A lot of it comes from optimizing the inference stack. So moving to faster Blackwell GPUs, I think is one factor. optimizations, low -level optimizations in the tech stack at inference time, distillation of smaller models with fewer parameters based on higher quality data, algorithmic innovations, architectural innovations. These all compound. Some of them are 50 % improvements. Some of them are two to three ex improvements, but collectively, as is now the lore in the industry, we're seeing order of magnitude per year cost reductions.

57:22But how much money are they losing on this per transaction? It's difficult to know from the outside, but I would also say that the matter is somewhat confounded by the enormous capital expenditures that are going to this space. So it's not necessarily even a reasonable question to ask how much is being lost. You have to sort of factor out the capital expenditures as we've discussed previously. We're in the process of tiling the Earth's surface with data centers. This is an enormous capital expenditure. So it's a little bit difficult to separate out the amortization of cap -ex from the op -ex of just a day -to -day inference in electricity.

58:01But I can definitely tell you there are definitely not incinerating money. There's a lot of food on the internet about them. Hell, they're incinerating money. They're losing huge amount. They're operating better, about break even or better. And in the context of what Alex just said, the order of magnitude improvement in cost compute that just came from the GP200s from Nvidia, that would put this way over the top. If I was talking to Gemini earlier today about, what do you think they spent training GPT -5? And it came back with this insane number of billion dollars on each 100s. I said, I don't think they used H100s.

58:37I said, oh, okay, well, if they used GP200s, it would be more like 60 million. Wow, okay. But yeah, it's about a factor of 10 reduction in the cost of the compute and they're passing some of that through. And the GP200s are just coming off the line and starting to get into production. So it'll be a little while. So when I saw the pricing, I thought they were doing this for competitive advantage in taking a huge loss. What I'm here to say is that's not the case. They're really running maybe a break even, but it passing on massive savings to the consumer. Yeah. So Liam, this is what hyper deflation looks like.

59:11And it's an interesting thought experiment to ask assuming this is sustainable. And I have no reason to think that it isn't sustainable. what does hyperdeflation right now at inference time for frontier models look like once it starts to spread to the rest of the economy. This leads to Peter's abundance data, I think. You know, I just want to say something for those listening. I feel smarter during these episodes, getting a chance to speak with Dave and Salim and Alex and I'm on and I hope you do too. I mean that's the reason I do We put about 20 hours of deep research in per week trying to find the most relevant content to share with you and then how do we make it actually understandable, connect the dots and deliver sort of a distilled cliff note to help you stay ahead.

59:59You know selfishly I do this for because it's a blast. Seleme is and Dave, what about you? Well, I think the curation that goes into this right where we're looking across the spectrum at Todd and then picking out But one of the most relevant things, right, Dave talks about the actionability of it, but I think the fact that we can carry very important bits for our viewers, I think, is the most important part and the most fun. And we get to see that first. Yeah. I always have my kids in the back of my mind when we're doing these podcasts because they're going to live their entire lives in the post -AGI world.

1:00:33And one of my kids, let's talk to one of the guys here in the office and said, you all your dad ever talks about his AI? Yeah, but the whole time you're growing up, did I ever talk about AI once? I mean, I never mentioned it until suddenly it's going to change your life. I mean, you must get on top of this right now. You must have a plan. It's for their own good. And so I'm always thinking that in the back of my mind, how many listeners out there need this information in order to remap what they're doing? And to be inspired. Right. I mean, our goal here is to inspire one to be in the thick of this and to find your own moonshot to understand.

1:01:08So if we just connect the dots on one thing, right? Yeah. The fact that GPT -5 is now free is crazy. It built into it the best doctor in the world that can diagnose anything on a much better basis instantly for you is a profound uplift. And this, I think Alex, the point you were making earlier. Yeah. Exactly. When we talk about abundance in all of its many facets, taking 700 million people and and suddenly giving them access to state of the RDI, I think becomes transformative. I'm looking forward to hearing the thing I wanna watch. How does opening as user growth go from here, given that they've made it free?

1:01:49I thought you were gonna go in a different direction. So I agreed that that's interesting, but in other is, in some sense, this is the greatest AB experiment that macroeconomist should be all over, because, to yesterday, most of the worlds didn't have access to frontier AI, and starting yesterday, most of, or a fraction of the world's, call it a 10th of the world, does what is the before and after? Look like do we see dramatically different outcomes and different dimensions? You know, Sam didn't have a huge part in the event yesterday, but he did a lot of post -game interviews, which I watched.

1:02:23And in one of them, one of the interviewers said, you know, imagine college and education for me in say 2035. and he said 2035, like the college in 2035, he said, if it exists, I mean, we need to quign a term for it. Maybe this is like an intelligence shock that's hitting the world. Yeah. Oh, hope so. I'm telling you this in version. Just in the intelligence. My son is 13 and I'm hoping the university system implodes in the next five years before you. You, your boy in mind. And by the way, I'll make a call out, talking to my son, I'm saying, I'm going to go do WTF with my moonshot mates. And he goes, have you reached a million subscribers yet?

1:03:07And I go, why? Because then you'll actually have a great podcast at. So if you haven't subscribed yet, please, I'll get this to subscribe or subscribe. Share it with your friends. It's not a view count. I think it's more about quality. and I think for a smaller set of people get some much more value out of it, I think that's better. All right, emailing. I'm talking to Salah. When I'm walking around MIT, a huge fraction of people I bump into have actually watched the pod. So we got a quality idea. That's true. Yeah, I think the closing out is, you know, there's a cap on human intelligence, but there isn't on artificial intelligence.

1:03:46So everyone will have a bond, and you can expect that next year, a zero drop software. and then the year after another zero drops off. And we're seeing that. Insane, it's going to be crazy. Crazy. That's insane. So I want to hit a couple of things. Open AI is eyeing a half a trillion dollar evaluation, which is pretty extraordinary. It's one of the highest valued private companies along with Bydance, SpaceX, and Ant Group. I wouldn't say much more here other than, you know, how will they go public? when will they go public and will this be the largest IPO ever? You know, we've seen OpenAI's GPT -5, but they also unveiled their OpenModels.

1:04:32I don't want to go into this in too much detail, but Alex, do you want to lead us on this one? Actually, he might, you're the OpenModel champion. We'll have to do this. Hold on one second. Watch. Just go back to the previous slide just for a second. Okay. Right. So, opening up a 10 billion, it's making about 10 billion a year. Microsoft is making about 300 billion a year in revenues. And so, opening up is valued at half of Microsoft. So, I just wanna read just that. Microsoft's at that ratio, they make three trillion. No, no, I mean revenues. It's 10 billion versus 300 billion in revenues. Okay.

1:05:13So, this is a very big, it's very lofty, but that feels over price. Anyway. Well, Sam's projection is 100 to 150 billion in revenue. And what is it, two years from today? Which I don't doubt that that's entirely possible. There's only two versions of the world, actually. There's a version of the world where open AI easily hits that target. And there's a version of the world where Google destroys them and wipes them off the face of the earth. Those are the two. And then you've got the possible outcomes. Then you've got to talk about capitalism at its finest, right? space X is 13 billion in revenue.

1:05:52And what's the valuation like almost a trillion or something like that? Two hundred and ten right there. Oh, that's right there. Okay. But when they own Mars, it'll go up a little bit. Very. So, you know, there's a lot. All right. There was an interesting note that Elon, you know, pushed out on X, which was when this open air going to buy Microsoft. Okay. Fascinating. All right, you might continue on with the open models here. I think that, I mean, it's pretty significant. A lot of people worried about Chinese open models going everywhere, and I've released a really solid model. It's a bit weird, it has to be said.

1:06:33But the main thing is, this model costs $4 million to train, and it's better than any model that we had this time last year. that extraordinary. Next year it will cost $400 ,000 to train a model. How did you know was for Main to train? Did they release that? They said $2 million H -100 hours. And the 20 per parameter model that runs on your laptop was 10 times cheaper. It was $2 million, it's $2 now. And that's like from scratch or was there distilling from a big model? No, it's from scratch. It's 80 trillion tokens, 80 trillion words. So when we do that, Dave, to your point, I think the footnote there is where do those tokens come from.

1:07:18And I think it's reasonable to assume in the style of, say, Microsoft FI models that these are tokens that were generated through some synthetic process from a much larger, much more expensive in terms of fixed costs model, in which case, whether you call the total pre -training cost just the marginal cost for training on the back of a much larger parent model or teacher model. I think that's the key distinction. We should all podcast on just that topic because in the broader sense AI that helps create the next AI is an incredible force multiplier for just humanity. And it's a good example because when you just distill the training data and create some synthetic data using the prior model, you knock 90 to 99 % off the cost of creating the next iteration.

1:08:04It's just crazy economics how it feeds back. I like no technology previously other than maybe robots building robots someday. Yeah, but there's nothing that feeds back like that. We need a new term, you know, that supersedes Moore's law here because the speed of this is extraordinary. And we're witnessing the evolution of of something that I think we're going to look back as I can tell Alex is about to say something brilliant. I was I know that look. A point out, a couple of things here. One, we do have this already. It's called education. Distillation is what humans use to take years and years that researchers and teachers spend accumulating and then convey this in a concise lesson to a student.

1:08:49So we as humans do distillation as well. It's very efficient, very economical. And so it's perhaps not that surprising to see distillation give us radical economic efficiencies in these open weight models. That's first point. Second point, just to go back Peter to your earlier comment, having these supply chain safe, if you want to call them, that open weight models is transformative for so many applications that are highly regulated, that are very sensitive to supply chain risks in finance, in healthcare, in government. Now we have American trained models that can be embedded in all sorts of mission, critical, internet disconnected systems, and that is going to be transformative.

1:09:34And so, yeah, I think that just one final thing on this, this model only has 5 billion active parameters. And so it runs like faster than you can read even on a Mac book. And I think the big thing is everyone's talking about billion dollar training runs. I actually I think that's true at all. I think you will have a GPT -5 level model by two years max that will cost under a million dollars to train and to end. And nobody's got that in their numbers. All right, so we're not anything. The expensive part was the journey to get there. I completely agree that at some point, we're gonna discover, made this point previously, the perfect architecture, the perfect sort of micro -coronal version of a foundation model that's relatively small parameter count, that's fully multimodal and if we knew what that were today we could radically collapse training costs.

1:10:26I think what this actually shows is we don't even need that. We need to have a trillion good tokens. And if we've got trillion good tokens then you can train a frontier model for less than a million dollars next year. And so I think that's where we go. Do you then embed that into all sorts of devices and human robots and moving cars and anything, yeah. Everything. Everything. Everything. Everything becomes intelligent with a built -in. I think that's where the labo's. Yeah, it's your question exactly defines the future entrepreneur. What am I going to do with all that? If I get for a million, which is seed money, I can build a GPT -5 level model.

1:11:06What else can I build? And in the this is going to be the age of abundance where it's limited by people's imagination. If you can imagine something genuinely useful that people want, the cost of creating it is near zero. Well, you didn't have to create the model. One entity needs to create that model open source once, and the economy's a scope means it can be used anywhere. Maybe I can start arranging the room for the damn rhumba. There you go. It'll be a great start -up. Let's not go there, Celia. Everybody, there's not a week that goes by when I don't get the strangest of compliments. Someone will start me and say, Peter, you've got such nice skin.

1:11:41Honestly, I never thought, especially at age 64, I'd be hearing anyone say that I had great skin and honestly I can't take any credit. I use an amazing product called One Skin, OS01 twice a day, every day. The company was built by four brilliant PhD women who have identified a 10 amino acid peptide that effectively reverses the age of your skin. I love it and like I say, I use it every day twice a day. There you have it, that's my secret. You go to oncekin .co and write peter at checkout for discount on the same product I use. Okay, now back to the episode. All right, we have a back end of this WTF episode, which is to look at all the other companies in the AI wars that continue GROC, Gemini, Meta, and Vidya Apple.

1:12:27I'm going to try and move us through this. There is some important data we need to share with everybody. Just, you know, this is what we're watching and what we're keeping in tune with hopefully you are too. Let's jump in. The first is again a quick look at Humanities last exam, HLE Benchmarks. Alex. Yeah, I think what we're really seeing here, so we see two models, GROC with extensions and derivatives of various sorts and GPT -5 and its derivatives leading the pack. I think if you pull back that headline, what you're actually seeing here is the power of tool use and the power of parallelism with GPT -5 leaning heavily on search and other tools and GROC for heavy leaning on the power of having multiple parallel agents collaborating and zooming out 10 ,000 meter perspective.

1:13:22I think what this points to is what we were just discussing, a world in which it's not just the core foundation model, but arrangements not even necessarily scaffolding, but the ability to integrate both these micro -coronal type of foundation models with each other in teams of agents and the ability to integrate them with powerful tools in their environment that's going to turn out to be one of the next big shocks in terms of how we're able to challenge the frontier for HLE and other hard benchmarks. By the way, people listening, our subscribers listening, if you get us a second, you when you think fun, just get onto chat GPT -5 or Groco or wherever, and just ask it to give you 10 example questions from humanities last examples.

1:14:13I mean, I'm going to share a couple of them here that I asked for. And so here's one of the classics, category classics. Here's a representation of a Roman inscription originally found on a tombstone, provided it provided translation for the Palmyrini script. A transliteration of the text is the following, and then you have to transcribe that. Here's another one, what is the rarest noble gas on earth? It's a percentage of all terrestrial matter in 2002. OK. All right, here's one. I'm going to ask our geniuses here in physics. A point mass is attached to a spring. spring constant is K and oscillates on a frictional surface, an frictionalist surface.

1:14:58If its amplitude of motion is doubled, what happens to its total mechanical energy? A, it doubles, B quadruples, C, it triples, or D it remains the same. I'm not going to ask you to answer that. Should hopefully quadruple I would expect. Yeah, it does quadruple, yes, correct. Okay, here we go. All right. I'm just glad that he's flashing back to my physics courses. Please forgot to say his last talk. All right. Last one. Consider a balanced binary search tree, like a red black tree, with end nodes. What is the worst case time complexity for searching a given key? And the answer is zero log N. Okay.

1:15:41Oh, I'm sure there's a order log N. Oh, no, I don't log N. Yeah. There you go. I'd like to point out on this one, the open source models, open, I just released scored 19 % and 17%. And the 17 % is the 20 billion parameter model that will run on anyone's laptop. Crazy. Amazing. Bring that into your college exams, everybody. All right. We had Elon pipe up. He said great work. So here was the tweet he's referring to, very proud of us at XII after seeing the GPT -5 release. With a much smaller team, we are ahead in many, GROC -4 worlds, first unified model, and crushing GPT -5 in benchmarks like ARC -AGI.

1:16:31So we're going to have this continuous, if it's an eagle battle, a financial battle, whatever it might be, where everybody just trying to one up each other. And of course, his next tweet was, Grock 5 will be out before the end of the year, and it will be crushingly good. So comments on Grock. He just tweeted saying, Grock 4 .2 -0 before the end of this month, number one.

1:17:03I think Peter, one of the take -homes here is that whoever is defining the benchmarks wins. It's like, you know, you create the e -vails and humanity wins. It's amazing how starved the research community is for compelling new e -vails as discussed previously. And so to the extent that we can create more e -vails that as I think your community is also chimed in historically with some wonderful ideas for abundance -oriented benchmarks or e -vails, the frontier labs will, I think, race to achieve them. All right, most of the polymarket predictions have Google winning by the end of the year. And for good reason, what we've seen is extraordinary.

1:17:50And here's the title of the slide, Demis Asabis, in a word, relentless. In only two weeks, they've shipped or achieved. And I'll read the list here. Gemini 3, we'll see the example of that. Gemini 2 .5, Pro DeepThink. Gemini Pro, free for university students, Alpha Earth, amazing, we'll see a demo of that. Inaz, deciphering ancient text, Gemini won the gold medal in the International Math. Olympiad, storybook, caggle game arena, jewels, notebook LM video, overviews, and Gemma, which passed 200 million downloads, and this is Google's lightweight open source, open weights model. I mean, really impressive work.

1:18:35Yeah, well, so Dennis has 6 ,000 people in AI R &D. Open AI is up to a little under 2000 now, but these guys at Google have been working on it for years. So they've got about a factor of 10 more person hours put into it so far, and they're all operating on things in parallel. So they're now unleashing it all. It was all just sitting there in the lab until open AI put the competitive pressure on them. Now something has shifted in a big way at Google and a couple of fronts. One, they're unleashing all the things they've been working on. The other is they proactively reached out to a bunch of our companies, including Blitzie, which is Blitzie's a particularly hot company.

1:19:18But I don't know how they found it, probably through all their big data. But the Gemini people came over to our office proactively and said, we need to meet with you. So they're really reaching out trying to get the businesses to move over to using Gemini. And that was also really evident in the GPT -5 rollout yesterday is the call to companies saying, we're here, we're open, we want a partner with you. And we're cutting the price point to make it easier to do. And we're open for business. So I think that's a new thing. I hadn't seen anyone proactively reach out to our companies until this week.

1:19:56amazing. Alright, let's take a look at a few of these examples coming out of Google. This is Google's Genie 3. It's world models for gaming. Let's play the video. I was blown away by this. I found this probably one of the most impressive things I've seen in the last week. What you're seeing are not games or videos. They're worlds. Each one of these is an interactive environment generated by Genie 3, a new frontier for world models. With Genie 3, you can use natural language to generate a variety of worlds, and explore them interactively, all with a single text prompt.

1:20:40Let's see what it's like to spend some time in a world. Genie 3 has real -time interactivity, meaning that the environment reacts to your movements and actions. You're not walking through a pre -built simulation. Everything you see here is being generated live as you explored. And Genie 3 has world memory. That's why environments like this one stay consistent. World memory even carries over into your actions. For example, when I'm painting on this wall, my actions persist. I can look away and generate other parts of the world. But when I look back, the actions I took are still there. In Genie 3 enables prompt pull events so you can add new events into your world on the fly, something like another person or transportation, or even something totally unexpected.

1:21:38You can use Genie to explore real world physics and movement and all kinds of unique environments. You can generate worlds with distinct geographies, historical settings, fictional environments, and even other characters. We're excited to see how Genie 3 can be used for next -generation gaming and entertainment, and that's just the beginning. Worlds could help with embodied research, training robotic agents before working in the real world, or simulating dangerous scenarios for disaster preparedness and emergency training. All right, I'm gonna pause there, but holy cow. I mean, I don't see, I mean, first of all, the simulation theory just took a huge jump forward.

1:22:23Boom. I mean, you know, this blew my mind. I actually showed this to a friend who spent the last two, three years building metaverses. And he was literally as a jaw dropped and he said, I don't even know where to start. the fact that you can have a responsive environment that tailor is, depending on where you look, and all that is generated on the fly in real time, he couldn't cope by, just never seen his mind broken like that. Yeah, it's a master fusion transformer similar to all of the video models, like VO and others, and again we're kind of seeing the breakthroughs coming in this, especially as Google has such an amazing data set.

1:23:00I think that you'll see a video like this, this medium one like this as well from XAI, this is what Elon's going to be putting those 10 ,000 black wells on this video model towards. But the fact that it's real time now gives you a real idea about that. Similarly we've seen real time video generation from one and others now, so every pixel will be generated in a few years, which is going to be cool. That again makes you a little bit more. And what if you know, meta, you know, Zuck has wanted the metaverse forever, and of course this is delivering the metaverse. On the one hand, on the other hand, this is billions of dollars of capex that's been allocated to video gaming or to metaverse software that suddenly is in danger of having been rendered irrelevant.

1:23:44If this can all be just the output of a single model, a thousand voices in the video gaming industry just cried out in anguish if this is all just a prompt away. That's the response I got. Yeah, I mean with with with with VO three potentially crushing Hollywood and and this potentially crushing the video game industry or reinventing it accelerating it making it possible for anybody to create magically compelling video games. This is the Star Trek holodeck that this is the matrix that this is the key node potentially in in the tech tree of our civilization that unlocks general purpose robotics and general purpose autonomous vehicles.

1:24:24Yeah, because they can train inside of that. That's right. Extraordinary. Absolutely extraordinary. All right, here's another extraordinary gift from Google. And this is Google's Alpha Earth maps in real time. This turns massive satellite data into unified global maps, views of land and coastal areas on 10 by 10 meter precision, tracking deforestation, crop, wealth, water use, and urban growth. Let's take a quick look at this video. This is how our new AI model, Alfa Earth Foundations, interprets the planet. Different colors in this map show how different parts of the world are similar in their surface conditions.

1:25:02So similar colors mean similar things, like two deserts, two forests. The model understands the unique patterns that distinguish any ecosystem. So it's able to use those learned patterns and quickly find matching patterns in other places in the world. This allows it to tell the difference between say a sandy dune on a beach and the deserts of the Sahara. It used to take months to years for scientists to accurately map the world. But with our data set, they can do it in minutes. Much like Google Search has indexed the web, with Alfa Earth Foundations, we've indexed the surface of the planet. And we're making this available through Google Earth Engine for the years 2017.

1:25:38All I can say is just in time. Thought what's interesting here I think is this is what's called an encoder only model. it takes 10 meter by 10 meter patches of Earth's surface and converts them to high -dimensional vector representations. Encoder -only models were very popular in natural language processing prior to the advent of so -called decoder -only models, like the GPT series. I think the elephant in the room here is once we have encoder models that are encoder -only models that cover the Earth's surface, we're about to get decoder -only models. and what that'll enable in practices. So right now with these encoder models, you can convert arbitrary land masses or ocean masses to vectors and do a bit of regression on them and maybe a bit of light prediction with decoder -only models.

1:26:29You'll be able to take a few square kilometers of land and extrapolate out visually what is the future of this land look like. And you'll be able to do searches of interventions. If I put a parking lot here or I put a hospital here, what's going to happen in all likelihood to development in the area. You'll be able to do urban planning as a matter of a tree search in the same way in which Alpha, AlphaGo or Alpha0 or Mu0 are able to play chess. That's I think going to be the real amazing unlock. Amazing. See, this is the application usage where I think all these things start to really shine, where you can take all that capability and apply it to something like this.

1:27:09It'll completely transform. Now, we look at the world. My mind is kind of blown with this one. I'm really glad you said that, Alex, because I really did not get the implications of this until you explained it just now. I do appreciate that. On the prior slide, too, I had a meeting earlier today with Satya and Mahaja on the CE of DataLine here who all these companies are thinking, what's my mode, what's my mode, what's defensible, what's going to give me recurring revenue for the next 20 years. I'm like, it's just not a way to think anymore. If you look at the rate of change, it's all about small, nimble teams and great team dynamics.

1:27:46Overall, there'll be far, far more company success than ever before. But you can't expect to sit still. You have to reinvent yourself all the time. Man. Man, I think agility and passion driven building and understanding the root cause problems that you want to go solve. Those are the fuel for the future. It's not setting up regulatory blockage. All right, next up is a video of Zuck on Meta's super intelligence labs. Super intelligence for everyone. Let's take a look. I want to talk about our new effort, Meta's super intelligence labs, and our vision to build personal super intelligence for everyone.

1:28:28I think an even more meaningful impact in our lives is going to come from everyone having a personal superintelligence that helps you achieve your goals, create what you want to see in the world, be a better friend, and grow to become the person that you aspire to be. This vision is different from others in the industry who want to direct AI at automating all of the valuable work. This is going to be a new era in some ways, but in others it's just a continuation of historical trends. About 200 years ago, 90 % of people were farmers growing food to survive. Today, fewer than 2 % grow all of our food.

1:29:04Advances in technology have freed much of humanity to focus less on subsistence and more on the pursuits that we choose. And at each step along the way, most people have decided to use their newfound productivity to spend more time on... All right, so... He's out pitching hard. He wants to get to superintelligence first, what could possibly go wrong. He is, the poaching continues and I love this. So Zach contacted over 100 open AI employees, 90 % of them turned them down. Why? Because they think open AI is closer to AGI than meta. That's got to sting. You mind what do you think about that? Well, I think he has a very different definition than Sam Orman does.

1:29:50I think one of the reports was that he was talking about how AI could make reals of better product. So I think it's a very different view to the type of ASI that we're talking to. They should just call it meta intelligence. But you know, I think it shows like you see their billion dollar office, people still don't move. I think everyone feels that we're getting close to that agi point and you want to be where it's going to happen. Because what even is money after that? We're going to find out soon. Well, I mean, that's a very important point. I mean, in this in this post -abundance world, we're living in a post -capitalist world as well.

1:30:27Money has a very little meaning. You know, I do not know, and Alex, you and I have spoken about that at length. That's right. And I think Peter, as the cost of talent is increasing, and it would appear that it certainly is, that that's going to force frontier labs to start competing based on algorithmic insights and ideas. And I think that's a net positive for the economy in the world. Well, amazing. All right, I love this next one, the Zach Poaching Effect. So Sam just announced $1 .5 million bonuses for every employee over two years. He's now officially made every employee at OpenAI and millionaire by giving them over a million dollars.

1:31:09That compares to 78 % of NVIDIA employees who are also millionaires. David asked if that included the barista. Do we answer that? I don't know, but we'll be at OpenAI in a couple of weeks and we'll ask.

1:31:24Okay, a little effect you're tipping at the coffee counter, I guess. Oh my God. Peter, I would expect this to create a bloom of seed funding of startups in the next year or two. It's just going to be absolutely enormous. I'm already starting with some of the startups' high advice, starting to see the beginnings of an absolutely enormous. It is such an important point, right? This is something that America does so well. We create these deck of billion and sent to billion dollar companies and trillion dollar companies. We make because of stock options and stock distribution. We make all the employees super wealthy and they turn around and invest in other individuals.

1:32:03That doesn't exist in a lot of countries. Dave's true. You've spoken about this. There's two things that are different this time. You're right. That is the engine of America and it works really, really well. Well, this time around, it's so fast and the teams are so young. So that's unprecedented. And I could see some things that go wrong with that. But it's a field day right now. So might as well savor it. Also it's much clearer now how you're supposed to work with either OpenAI and Thropic or Google. How's that? Well, they've made it very, very clear that they want partners in all these categories, especially complicated regulated categories or categories that have proprietary data.

1:32:42Here's the API. Here's how we want to work with you. The pricing is going to be super low. We want you. For those three companies, it's really clear. It's not as clear with GROC yet, and I don't think anyone knows how to work with Meta if there is anyway. But for the three other big guys, it's just a field day for here's how we want a partner. And please just bring in the revenue, change the world, we're all happy. So I really I'm cheering for Sam in this battle too because you know Mark Andreessen Built net scape coolest company ever got absolutely obliterated when Microsoft woke up They just annihilated him and changed the course of his life.

1:33:18He did well in the end anyway, but complete life change So now Sam is that guy he woke up Google He's got a little shaky relationship with my I think he pushed Google over the edge. I think they were awake already in that regard Yeah, yeah. Well, so now he's got a mall coming after him concurrently and he's got to outrage them and it'd be a great American success story if you can stay ahead of that and survive. Can't wait for the Hollywood movies that are coming out all on these subjects. Yeah, I think one of the really interesting things is that crypto has basically been legalized in America almost fully with the light in the last week.

1:33:55And so I think next year crypto XAI is going to be the start -ups will go with a few smart people, they'll get massive traction by leveraging these models, and then anyone will be able to buy them pretty much instantly. And so we're just at the start still of the bubble, I think, versus what we're going to see. It's going to be the biggest bubble of all time. Bubble has a negative connotation to it, you might. Of course, but you know, we're just at the start now. This is the final hurrah of the current financial system. and I think we're a societal system as well. Both of that. I really think, though, if you just take a step back and try and visualize Sam's life for real, the biggest companies in the world are offering your direct reports, one billion dollars to walk out the door.

1:34:48You have to fight at the same time, Miramarati, Ilya Satskiver, two of your founders are trying to raise $10, $20 billion dollars to compete directly with the thing they built at Open AI. They didn't get any... They did raise. They did. Does it get any harder for an entrepreneur than where Sam is right now? And he's like bulletproof. He's just fighting his way through it. It's something that the movie will be really cool, I think, that's so much to work with. There's a great testament to the fact that if you keep pushing product and keep launching new things and keep innovating, you can stay ahead.

1:35:27And Facebook showed us that, Yahoo showed us that, Google showed us that all in their era, they just kept breaking boundaries. And so the only thing now is, can you break those boundaries and break the status quo? And let us just keep doing that. And differentiate yourself from the competition. Yeah, I think it's sort of an interesting economic experiment. And in the past, I've compared the AI build out that's happening in the US to 1939 and the prelude to the Manhattan project. It's sort of an interesting thought experiment to ask what would have happened if nuclearization and the Manhattan project hadn't been a nationalized effort, but instead had been a private sector effort where blue chip companies were all competing with each other to see who could build the first atomic weapon.

1:36:13And how much would they be spending to poach the top scientists from each other to build that first atomic bomb that has such strategic import over the future light cone. I think we're living in some sense a civilian version of that thought experiment. It's actually the really interesting thing is it's not hard to know how to build the models if you know how. The if you know how is really, really rare. And so that's why they're willing to splash these billions on top of that and they'll be interested in see what they come up with now is these things get commoditized. All right, on the OpenAI train, NVIDIA and OpenAI announced their first European Norway data centers.

1:36:53This is $2 billion OpenAI data center. $100 ,000 NVIDIA GB 300 superchips. They'll host 230 megawatts of capacity, expandable to 520 megawatts, so half a gigawatt of capacity. Powered 100 % by renewable energy out of Norway. Let's take a quick look at this video. The launch of Stargate Norway marks a new chapter for AI infrastructure in Europe. We're entering a new industrial era. Just as electricity and the internet became foundational to modern life, AI will become essential infrastructure. Every country will build it, every industry will depend on it. AI is no longer hand -coded. It is trained.

1:37:38It is refined with massive compute. It is deployed into factories, research labs, and digital services. Stargate Norway will be powered by GB300 superchips and connected with MV link. It is designed to scale to hundreds of thousands of GPUs and support the most advanced models in training, reasoning, and real -time inference. All right, there you got it. E -Mod analysis please. Yeah, I mean, I think this is part of the big sovereign AI strategy because your comparative advantage as a country will be how many chips you got and how much intelligence you have when most of your workers are digital.

1:38:19We've seen OpenAI go very aggressively on this front. In fact, this week they announced that they're going to be rolling out a chat GPT to all federal workers in the US at the cost of $1 per agency per year. So I think the land grab has really begun. They couldn't say, they couldn't have said free, huh? Yeah, I guess. I'd add Peter, there's I think a less obvious angle here, which is pulling back the details on the announcement. This new data center is planned to be powered with hydro power, which is intrinsically scarce. You either have access to it or you don't, you don't necessarily. It's not that ergonomic as a nation state to create a lot more hydro power.

1:39:01So that means there is very literally land grab here. And this is Stargate planting its flag in that hydro power to the extent that Europe has a policy of bounding power to certain energy sources. There's only a finite amount that's available to reprogrammed to AI. So real land grab. And we'll see geothermal energy as a land grab and we'll see other areas. I want to move this forward here. We saw a couple of interesting announcements coming out of the White House. So Apple announced $100 billion US investment. This is increasing their total investment to $600 billion. And I don't know. This is finally we're seeing Apple come back to the US.

1:39:54How much of Apple's products are overseas manufactured right now? Anybody have an idea? Yeah. It's got to be overwhelming majority, like 90 plus percent. Huge. Comments. Okay. Well, look, you know, we've been, most of the countries that have like a Samsung in Korea or the government industrial integration is very, very tight. The US has never really had that before. This is the first time, but I mean, obviously works really, really well. It got Japan on the map and then it got Korea on the map and now it's gotten and trying to be on the map. And so Trump is the first president to really take this to its limit.

1:40:34He's a business guy, so he knows how to do it. And it's obviously going to work really, really well. It's not super hard to figure out. You just need to do it. I would also maybe add that I think there's, again, going back to this idea of a tech tree existing for civilization. It seems clear that there is an innermost loop to the tech tree that's at the intersection of fabs and electricity sources and drones and rear earths, and to the extent that it's possible to co -locate as high -adensity as possible talent and infrastructure for building all of these, I think that has the potential to lead to an economic explosion for the U .S.

1:41:12for the world. Amazing. One more article coming out of the White House here on AI, and that is Trump demands Intel CEO resignation over China ties Trump label CEO highly conflicted over $200 million plus in past investments in Chinese tech firms in a relationship with the defense department. For me, this has echoes of the Jay Edgar Hoover anti -communist campaigns from the FBI. You might do you have any opinion of this being a non -American? Yeah, well, I mean, look, it's just posturing, right? Like, I think that this whole US versus China AI thing is completely overblown because everything gets commoditized soon anyway.

1:41:57Actually, to be honest, we should have had the push for open source being that China wants to get into all our systems. Then they would have actually put proper money behind it.

1:42:07It's completely wrong because, again, the correct view is this is abundance and it's going to come to everyone everywhere. You can't keep a lid on it, how do you keep a lid on math? I threw this into the deck actually just to spark the conversation around. Right now, the chips that are driving this entire AI revolution, 2 -3rd, 66 % market share through TSNC, a single manufacturer, it's utterly insane and not sustainable. So my guess is that the White House is thinking about this and talking about Intel every day. There's not coincidence that Trump decided to tweet about, you know, one CEO, the China thing, I don't know what he's thinking about there, but, you know, Lippu is a 65 -year -old guy, Intel must succeed for it's just an incredible national priority.

1:42:57credible asset, right? I mean, it defined the last 50 years. And so anyway, the point is the White House is talking about it. We need balance in chip manufacturing desperately. And we do a lot more volume of chip manufacturing. I mean, if you're at Intel, what you should be thinking about is, where do you, how do you leapfrog? Well, they have, they, you know, they're tech, they're 18 nanometer, or one point, a nanometer, 18 angstrom tech is absolutely fine. and they need to get the yields up, and then they need to build more fabs, and which means federal help. And so I just think that if someone running that company can get friendly with the current administration, that it's all unlocked and it'll explode and succeed wildly, which is what America needs.

1:43:44And I don't know, I hope they figure out the relationship between Lippu and Donald Trump quickly. Yeah. I mean, I think that's weird. And she part of this was because until we're trying to sell their fabs to TSMC. So it gets complicated. I mean, that would be devastating for the world. There's no way that can get through. But I get it, right? Because all the losses that Intel come from the fabs, they would immediately monetize a huge asset. The remaining Intel would be hugely profitable the next day. So that's the allure of that transaction. But then you have one company controlling the entire destiny.

1:44:19Yeah, that's no way that makes sense. All right. I want to close out with this slide, which is, I find telling, especially in the backside of the Intel conversation, that we're still early in terms of build out. So here we see a slide showing infrastructure cap -ex as a percent of the US GDP. So the railroads were 6 % of the GDP back in the 1880s. Telecom was 1 % back in 2020. and today our AI data centers in 2025 is 1 .2%. We're still early and Alex, we've talked about an EMOD that we're about to turn planet into Compitronium, we're building data centers every place. And maybe the solar system, we'll see.

1:45:02And maybe the solar system. So, Liam, you got an event coming up soon. Talk to me about it. On August 20th, we have our next monthly EXO workshop. The last one, I lost two or three of sold out. people are absolutely loving them. It's $100 to come and bring your company and we'll teach you how to build an EX. So we actually have a great ad which we'll get a link to and post in here which is the created an ad where the an AI reads out a real review by a real person. But it's an AI reading it out super funny. So okay, it's fun. And for those interested, I've got some comments interested in the abundance summit in March.

1:45:40applications are closed at this moment. They'll be reopening in September, but you can get on the wait list by going to www .abundance360 .com. And let us know that you're interested. We'll have all of our moonshot mates at the Abundance Summit as well. Let's take a quick look around the horn. Dave, what's happening for you in the next few weeks? Well, the biggest thing by far is we'll be together at OpenAI in what, 11 days, 12 days. will be there the whole week actually. And I got there so much going on in that building. So really looking forward to that. We're having that podcast with the chief product officer Kevin Wile at OpenAI looking forward to that conversation.

1:46:23Emon, it's 2 a .m. and you know where your children are. You're a nuclear power source, buddy. Thank you for sticking with us through the wee hours of the UK. Okay. But it's too much fun to sleep. It is. And what's on your plate over the next month? We've got some big releases coming up in particular. I've been looking at the economics of the AI age. So it's going to be wild. I'm going to be releasing a bunch of stuff around that. I've seen what you're going to release and it is stunning. Dear, I say, you know, just earth shattering. Alex, how about yourself, pal? Oh, my goodness. Well, I think we're in a time, although on an exponential curve, every point looks like the knee in the curve, at the inflection point.

1:47:11So one has to be careful of such anthropic bias. I spend most of my time advising tech startups and making sure that the benefits of AI are evenly distributed throughout the economy. And every day is an adventure and an opportunity to smooth out the singularity as it were. All right. Well, everybody, thank you for joining us on this episode of WTF and the GPT -5 announcement. We'll be coming back to you with an episode again next week. Please tell your friends about what we do. Our mission here is to help you understand how fast the world is going, to inspire you, to give you the motivation, to create your own moonshots, and to make this understandable.

1:47:53Actually, what was the word you used? Alex Riveting. I'm at the edge of my seat. The most amazing time ever to be alive. All right, to all of you, thank you for a fantastic conversation. Every week, my team and I study the top 10 technology meta trends that will transform industries over the decade ahead. I cover trends ranging from human -owned robotics, AGI, and quantum computing to transport energy, longevity, and more. There's no fluff. Only the most important stuff that matters, that impacts our lives, our companies, and our careers. If you want me to share these meditrons with you, I'm writing newsletter twice a week, sending it out is a short two minute read via email.

1:48:32And if you want to discover the most important meditrons 10 years before anyone else, this reports for you. Readers include founders and CEOs from the world's most disruptive companies and entrepreneurs building the world's most disruptive tech. It's not for you if you don't want to be informed about what's coming, why it matters, and how you can benefit from it. To subscribe for free, go to demandus .com slash meta trends. To gain access to the trends 10 years before anyone else. All right, now back to this episode.

1:49:09[♪ INTRO MUSIC PLAYING [♪

1:49:14This episode is brought to you by Lifelock. When you visit the doctor, You probably hand over your insurance, your ID, and contact details. It's just one of the many places that has your personal info. And if any of them accidentally expose it, you could be at risk for identity theft. Lifelock monitors millions of data points a second. If you become a victim, they'll fix it, guaranteed, or your money back. Save up to 40 % your first year at Lifelock .com slash podcast, terms apply.