AMD Advancing AI, Google Q2 Earnings, OpenAI Plans $750B Cloud Spend | Diet TBPN

0:00John Coogan:Thank you to the AMD team for having us here at AMD Advancing AI. We're on the road in SF today, but let's take you through a little bit of the news of what AMD is announcing, what's happening today. Advancing AI is AMD's biggest AI event of the year, where it reveals new chips, software partnerships, and how it plans to compete with NVIDIA, according to Jackson Fordyce in the TVP on the newsletter. We just found this out this morning. AMD is actually powering the mod retro and 64. Very cool. It's very Yeah, very crossover Palmer Lisa. Yeah, so we're gonna be spending all 30 minutes of our time with Lisa Sue on gaming specifically Exactly.

0:38John Coogan:How is how are they gonna bring suits and suits? Yes, suits So the three key stories that people are focused on out of AMD advancing AI. Our AMD unveils Helios, the new rack scale AI system powered by the MI450 accelerator. We'll talk to Lisa about that. Also, a new partnership with the Frontier Lab. AMD and Anthropic are partnering to deploy up to two gigawatts of AMD instinct MI450s. Size gong. Size gong. $5 billion deal and a whole bunch of collaboration across compute and the software stack the big question around the software ecosystem around amd is always a hot topic i'm sure there's a ton of developments there only makes sage just a little bit ago they were talking about how um anthropic's own models are effectively speeding up their ability to ramp up new hardware yep which is something that uh has been talked about for years now some questions around yeah the kuda moat yeah right uh if you assume that making great software will just get easier and easier that that's been a big question and they're starting to see real movement.

1:46John Coogan:Yeah, but also a lot of that speed up requires actual deep partnership like this because there are some close source packages that you might need to you might need to work on. This is the old George Hots interaction talking about little bugs that he was frustrated with, wound up working with AMD developer team who we've talked to on the team on the show. fantastic outcome there but interesting to see that flywheel just get tighter and tighter and tighter and I expect it will also AMD is expanding its partnership with Cerebris teaming up on AI inference we love the team over at Cerebris they introduced a powerful disaggregated inference solution pairing the right engine to each phase of the inference pipeline this is what agentic AI has been waiting for the fastest production inference at massive scale Google has the muscle the overpower spending worries, says the Wall Street Journal.

2:37John Coogan:Google has put up some very impressive cloud growth numbers. There, of course, was some back and forth on the nature of that revenue. With Semi-Analysis sort of jokingly maybe posting, Google Cloud generates revenue primarily from the sale of TPU systems. The actual line that did change in the SEC filing that's drawing attention is that there's a line in there that says Google Cloud generates product revenues primarily from the sale of TPU systems, which is a little confusing because you think of a company's product as their business. But, of course, they have services as well. And so it's not that Google Cloud is fully pivoting to TPU sales exclusively.

3:20John Coogan:It is that they are also… But it's becoming meaningful. Yes, yes, yes. They've sold them to a number of labs, and they're seeing lots of process. Rewind a year, that was still a question. Yes, yes. We can go through, there's a number of different posts here. We can take you through Eric Sufert talking back and forth about - Sufenator? The Sufenator's putting a little bit of truth zone on Google Ads growth, what's going on there. They saw a lot of growth in monetized LLM queries. It all started with Sundar Pachai's news. He said, Q2 is an amazing quarter with our AI investments redefining what's possible across every part of our business.

4:03John Coogan:Alphabet revenue grew 24 % year over year and Google Cloud accelerated to 82 % growth, which is insane. That means the foghorn for sure. We saw exciting momentum across the board from search to YouTube to the Gemini app. Our model APIs are processing 22 billion tokens a minute. And at this point, the numbers have gotten so big on tokens per minute, tokens per month, that it's very hard to keep in sync with what's actually impressive until you actually see a full chart. But that's driven by their workhorse flash model, which makes sense. They've been focused on very efficient token generation because they vend them into so many Google systems for effectively free because they're still monetizing via advertising.

4:43John Coogan:So Max Anderson said, as someone who has personally spent$500 ,000 a month plus on Google Ads for years, I can tell you with certainty, this revenue growth in search is artificial and extremely unhealthy for Google's business long term. A little bit of fear, uncertainty, doubt. Search volumes are declining as legacy searches being increasingly cannibalized by non-monetized LLM queries. Google's response, manufacture revenue growth via short-sighted, highly extractive, customer-hostile tactics, i.e. charge advertisers more for lower-quality clicks, including clicks they do not want and explicitly do not approve Google to charge them for.

5:19John Coogan:He gives a few examples. He's going back and forth saying that this is short-term optimization. But the suvenator comes in. He says, unfortunately, every claim made in this viral threat is either false or mixed, characterizes Google's policy. One, search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LOM queries. Google stated in its Q2 earnings that search usage hit an all-time high during the World Cup this year. It also stated in Q1 earnings that search queries reached an all-time high that quarter. Ads and AI overviews monetized in parity with those in the legacy search, and Google's search revenue increased by 19 % in Q1 and 17 % in Q2.

6:00John Coogan:So a little deceleration, but still growing. He also debunks the idea that Google silently deprecated the second price auction. Google still uses generalized second price auction for search. He also debunks the idea that Google previously had precise keyword targeting settings that allowed advertisers to pick individual search phrases to bid on. There's a different thing. But Suvinator goes back and forth and adds some more context to the Google earnings that people are digging into. And we can dig into more later this week. Over in the Wall Street Journal, there's a couple articles. Alphabet rides cloud business.

6:35John Coogan:Revenue jumps 24%, but data center outlays push cash flow into the red. I think it was the first quarter for negative cash flow, but this has been telegraphed for a long time. They're investing in the AI boom. Not a surprise. And there's been talks from all the hyperscalers around debt issuances, equity issuances, all different things to fund the AI build-out. So Google parent company Alphabet posted 24 % revenue growth year over year in the second quarter, fueled by its booming cloud business. But concern over the company's heavy spending on AI infrastructure damped investors' enthusiasm. Alphabet sales came in at$119.8 billion, exceeding analysts' expectations.

7:13John Coogan:Its cloud business brought in$24.8 billion, and its search business generated$63 billion. Net income was$112 billion for the April-June period, also ahead of analyst expectations. So they beat, primarily driven by its gains in other companies' stocks that Alphabet owns. They own, I think, almost$100 billion of SpaceX. I'm not sure about the current valuation. But in other AI news in the Wall Street Journal, two big AI infrastructure stories. You have Lisa Su herself right here. AMD Anthropics signed AI gear deal. We talked to Ajne a little bit about that. And OpenAI boosts cloud spend to$750 billion.

7:58John Coogan:New projects and Georgia data center will be part of efforts to increase capacity. OpenAI is scaling up its data center ambitions and its budget for spending on them. The artificial intelligence company has raised its projected spending on computing power to around 750 billion through 2030, up from a projection of roughly 600 billion. It's a huge number, obviously. A lot of discussion about that, but given the most recent leg up based on coding agents, a lot of people are looking at that positively as a sign of continued faith in the progress and the scaling law, of course, because we are in the scaling era.

8:37Serious momentum.

8:38John Coogan:Yeah, the scaling, the increase reflects new agreements with cloud computing providers as OpenAI races to lock up the enormous amounts of computing capacity it needs to develop and run its AI models. OpenAI spending on cloud computing has become a central focus of Chief Executive Sam Altman's leadership team and has been a source of tension between him. The company said Wednesday would invest$20 billion to kick off a data center called Project Camilla in Effingham County, Georgia. So that's new news. Also, NVIDIA has a supplier that's opening. Have you ever been to Georgia? Yes, I've been to Atlanta.

9:12John Coogan:It's a great town. Have you? You've never been? Maybe on a layover. It's like LA. I don't think I've been outside. It's like Los Angeles. You're in the car for half an hour driving in traffic to get everywhere. Everywhere. But it's a really nice city. Liang Wenfeng, who was at DeepSeek, had an investor call. I don't have context on how this actually came up because they're a hedge fund and they have DeepSeek. Still a private. They're raising outside capital now. They're raising outside capital. Yeah. So this was probably a part of that roadshow. I think at a certain point he needs to raise enough money that you got to just get on Zoom and sell the dream.

9:47John Coogan:But he was grinding for four hours, just monologuing for four. I don't know if he was monologuing for all four. But it is sort of a long call. That's bullish, though. It is. Because if you can go and basically do a Joe Rogan podcast episode, just monologuing. No, it's just like, can somebody actually carry a conversation for that long? Because after, you know, this has always been your take on Joe Rogan. And it's like it gets interesting on Joe Rogan because after an hour, people go off script. Yeah. And so if a CEO can carry a conversation for four hours straight and still be compelling, it's bullish.

10:22But there's some details that Zephyr shared. He's over at Satrini. Their inference margins are around 85 % strong. They only had around 20 ,000 hopper equivalents until May. still sort of I can see how they would say that that doesn't mean that they don't have access to a lot more power globally yeah some of which may or may not be above board but who knows they have 1 billion in API revenue is enough to turn the company cash flow positive yeah and they have a GPU payback period of 10 months and their hardware is depreciated over three to five years so looking quite good over the pond.

11:04John Coogan:He also shared a lot of philosophy that felt sort of derivative of Western AI lab leaders thought. I mean, he was focused on, you know, some of the same language around, we don't want to optimize for pure profit, we're on the path to AGI first. It's something that you've heard from a lot of lab leaders. He did say that he's very focused and he wouldn't be doing world models or image generation or video generation or even a chat app. He said he doesn't want to be the next Alibaba, is purely focused on the path to AGI, sort of taking this focused approach. And so we'll see. They've sort of been out of the game with Moonshot sort of coming from behind with K3 and a lot of hype there.

11:48John Coogan:and then GLM, of course, as well. So it'll be interesting to see what he has up his sleeve on the back of this investor call that everyone's paying attention to. Gong moment. Cognition is acquiring Interaction, the makers of Poke. Huge. I think Poke has been an acquisition target or been talked about as an acquisition target for a long time now. They've just been able to deliver delightful, novel products. I wouldn't have expected them to go to Cognition. I think a lot of people were thinking that they'd get picked up by a big consumer company, maybe an Apple. Were people seeing Apple? An Apple would have been amazing.

12:29Having the Poke team working on Siri would be quite cool. Could have seen them go into OpenAI or even an Amazon. So a little bit unexpected here, but not surprised that Scott saw potential in the team. and I'm very interested to see how these businesses end up actually merging. Will they keep poke around? Will it be just sort of folded into cognition? But either way, very excited to see what they build.

13:00John Coogan:There's an older article in The Wall Street Journal that we never got a chance to read through, but it's fun because it tells the story of a young person who basically started, literally listened to a podcast and started a search fund and made, I guess, millions of dollars. Did the meme? Yeah, did the meme. This shortcut to private equity riches is minting young millionaires. And I saw Sal Khan from Khan Academy talking about something sort of adjacent to this because Khan Academy, of course, sort of open source education. You can basically learn everything that you learn in college from Khan Academy, just watching videos and doing their online open coursework.

13:40John Coogan:I believe it's a nonprofit. It's still crazy that Khan Academy exists and plenty of people still turn it down. Yes. Oh, they do. They do. Yeah. This person didn't, though, basically. Go-getters are backing to buy up HVAC outfits and specialized manufacturers. If they make it back alive, there's a lot of money to be made. What a quote from the Wall Street Journal. So in 2015, Bakari Akhil was a homeless college dropout with a single focus, figuring out how to get rich. Sleeping in WeWorks on the subway and in airport waiting areas, Akhil watched videos, listened to podcasts. Let's give it up for some podcasts.

14:28John Coogan:And poured over personal finance books. He needed to own a business, he decided. But how do you do it with no money? Then Akhil read a Harvard Business School case study that described how MBA graduates were running around the country trying to buy companies with money from something called a search fund. He felt like he had discovered a secret. In the decades since, Akhil, now 37, has bought two multimillion-dollar companies. He has spent each month of the past three years living in a different country. So he's doing the nomad lifestyle. He's running HVAC companies? I guess. We'll get into it.

15:01John Coogan:He's now worth seven figures. Ackill is part of a growing wave of people looking for a shortcut to private equity riches armed with grit and determination. They are ditching the well-worn path from spreadsheet-wielding associate to managing director and finding ways to buy HVAC and plumbing outfits, specialized manufacturers, and other small and mid-sized businesses. Financing such deals is far cry from traditional private equity where firms use funds they raise from institutional investors and the ultra-wealthy plus debt. Instead, these would-be business owners scrape together financing on a deal-by-deal basis.

15:35John Coogan:They use loans from the U.S. Small Business Administration, seek funds raised from specialized investors who cobble together money from friends, family offices, private equity funds, and SBA-licensed small business investment companies. And that's just the start. Convincing the owner to sell and executing an improvement plan is a daunting task, even for the most experienced dealmakers. While these buyers typically pay— Especially if you're overseas constantly? Yeah. Yeah. I mean, I imagine that he's overseas now, but during the heyday, he was like actually going and, you know, knocking on doors.

16:07John Coogan:But the reason I brought up Sal Khan was that he was advocating for instead of college, buy your child a business or or take a group of of peers your child, your child's age, and they can buy a business together. Because if you look at the cost of college,$200 ,000,$250 ,000 sometimes, if you get four students and they're effectively the executive team and you say, look, we have a million dollars in cash. We're buying an ice cream store. We're going to lever something up. So we're going to have five. That's$200 ,000 of net income. Yeah. And we're going to lever it up. Yeah. And the cash flow is going to pay your salary.

16:47John Coogan:So you're going to have a job from 18 to 22 when you graduate. and your job is just to learn everything on the fly. And best case, you wind up with a fantastic business that makes a bunch of money, but worst case, you're no worse off than the money that you would have spent on college. And so you get to learn all these skills on the fly. I don't know. I don't know if it'll take off. It feels like alpha school adjacent. But when the time comes, maybe we can get all the kids and say, you guys. It's hard to predict what the world would be like in 15 years or 20 years if you're just having kids now but uh it doesn't seem that crazy to imagine but i think i i think the aura of uh of of certain schools will endure and that will be the right path for some people for sure uh anyway uh i view these guys as home the homesteaders of the wild west said albrecht who previously represented a big private equity firm and a law firm gibson dunn uh they're heading out without a dollar to their name and if they make it back alive there's a lot of money to be made.

17:48John Coogan:Many caught the bug at a top business school where entrepreneurship through acquisition courses are now a standard part of the curriculum. They are drawn by the promise of a more flexible schedule, a conviction in their own operational know-how, and desire to avoid grunt work that ends up lining the pockets of others. Also for fueling their rise, a perception that it isn't as easy as it once was to make big money on Wall Street. It makes sense. A lot of the big private equity firms were founded decades ago, have founders that have been partnerships that that have accrued a lot of the value, and it's much harder to just scale up something new.

18:22John Coogan:Private equity industry is struggling to profitably unload companies, causing mid-level employees, dubious of their chances of receiving pay tied to deal performance, to jump ship. Some 77 search funds, money from specialized investors to back individuals looking to buy businesses, were raised in 2025. 77 search funds, new search funds, listed according to an annual study conducted by researchers at Stanford in 2025. That feels low based on how big the meme was all throughout 2025. There's no way that that's accurate. Yeah. Maybe there's some that aren't being caught in the definition or they have defined their company as a true private equity firm instead of a search fund.

19:03John Coogan:So they said, no, we're not a search fund, even though they might actually be acting as one. You know who's optimistic about AI, John? Who? Friend of the show, Mark Zuckerberg. Oh, yeah? Mark has launched a new campaign that is focused on AI optimism. In Axios Meta CEO, Mark Zuckerberg on Thursday laid out an optimistic view of the agentic future, arguing the company's focus on connecting the world will only be strengthened by new AI tools and technologies. Axios says why it matters. His position is framed as a stark contrast to some of Meta AI's competitors who, according to a video ad posted with Zuckerberg's comments, promote fear and a dystopian vision of the future i thought it was a cool video i liked it it's interesting to imagine watching it not as a fan of social media though because it's leaning a lot on like we've connected people we bring people together and i certainly see it that way when i log on to meta platforms i'm sending you funny reels we're having a blast but a lot of people see it as brain rot right and they don't and they're like oh if you're gonna do what you just did to the next thing i'm not certain i'm not fully on board so i don't know how it'll be received yeah i don't yeah i don't know production value is fantastic land it's definitely the correct angle the opposite is worse like clearly like you want to be optimistic and there's a lot of really i'm really glad that he's not like mimetically going down the fear-based path yes that would be very very rough working for some players um anyway so we'll see how it lands What else is going on?

20:42Paramount is moving into micro dramas. This is the moment you've been waiting for. You love dramatic movies. I don't know. Can I interest you in some micro dramas? Have you tried any of the real shorts, the true shorts?

20:55John Coogan:Yeah, yeah, yeah, yeah. I watched a true crime one. And I felt like I was actually fine with the AI video and voiceover element of it. What I felt was missing was when you're tracking a true crime story and you turn on a podcast about that true crime, whatever it was, I like being led through a meandering idea maze of what is interesting to that host. So maybe they find the town and the details about the town where something happened particularly interesting. And so they're just putting in random facts that flesh out the story in a particular way. I felt like the one that I watched at least was very much like the Wikipedia level summary or like the headlines just condensed.

21:45John Coogan:And it was too generic and it wasn't giving me enough novelty and like new facts. So even though the video wasn't quite there, it was obviously AI, it wasn't super visually striking, the audio was sort of jilted. That all would have been fine if it had been someone who actually went and found some really deep, interesting novel way to tell the story or novel details that otherwise you wouldn't have heard of from the headlines. So I don't know. Still early, but I don't think they're going to get me. There's something about going to the theater. It's an experience. It's the anti-brainer. What if a theater were to turn the screen sideways?

22:23John Coogan:They've done that. They've done that. Somebody in Brooklyn, I think, put together a whole, we're going to watch Instagram reels together. Or TikTok. It's a short form film festival or something. Yeah. Speaking of conjecture, there's a lot of conjecture about what OpenAI is releasing today. Tebow said, unbelievably excited for what's coming together. Tomorrow is feeling codexy. People are speculating that it might be a cerebrous, a faster version of soul turbo mode it is okay chat gpt voice is now in the desktop app control your computer and direct multiple agents running in chat gpt work or codex using just your voice it's powered by gpt live so it can speak listen and coordinate work in the app at the same time and then also health is rolling out to us users everywhere health and chat gpt you can securely connect apple health and supported medical records to understand your information What about Eight Sleep?

23:15John Coogan:Ooh, got to get it on there for sure. There's also a new law introduced, a bipartisan AI kill switch bill following the OpenAI cyber incident. The bill enters Congress as lawmakers remain divided on how aggressively the federal government should regulate artificial intelligence. I'm sure this will be a longer conversation on a future show. And that's our show, folks. Folks, thank you so much for tuning in to TBPN Live from AMD. We are traveling tomorrow. We'll be back on Monday, 11 a.m. Pacific. Thank you to the team here who flew up, and thank you to everyone at AMD for making this possible. We really appreciate you.

23:56John Coogan:We're dialing in these IRL shows. Yeah, we're getting there one step at a time. The team makes it look easy. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbpn.com, And we will see you on Monday, 11 a.m. sharp, for another one. Goodbye.