Slop vs. Steel Showdown w/ Delian & Everett, GPT-5 Backlash, Trump Eyes Intel Stake | Bill Bishop, Jimmy Goodrich, Lennart Heim, David Stout, Cameron Schiller, Cyriac Roeding, NFM Live

24:52So like what's your view on both of those? And then I want to talk about if we should get into if accounting rules even matter. Yeah, for sure. Yeah, I mean, in hardware land, we think about this all the time of like, there's clear differences in quality of revenue, everything from like, you know, defense, you know, program of record, you have to value that very differently than even like a$50 million, you know, SBIR. And so it has been interesting to see a bunch of investors coming into this field where I think there's a lot of pre existing 10 years of rules around software of like, what, you know, healthy revenue looks like rule 40, there's all these things that like, you know, even if you're somewhat unsophisticated, infinite blog posts, when you look at that in the world of like hardware and defense, you know, sort of investing or aerospace, there aren't like infinite blog posts for people to study.

25:35And so I admit that I'm sometimes amazed when I watch people come in, even for, I should never, you know, sort of trash my own portfolio, but sometimes even my own portfolio companies, I watch people invest in them. And I'm like, wow, like you just have a deep underappreciation for just like how long this company has until gross margin flips to like positive, how long it's going to be until they're actually, you know, sort of ready to go scale revenue, even if it on the back end, it might be attractive. It may be years and years for them to, you know, sort of get there. And so, yeah, I see huge variation on that.

26:02And then mostly what I I end up seeing as people just come in and slap a 10 to 100x rev rate multiple on this hardware company recently. And I was like, holy shit. Wow. People not having IRR for a long time. Yeah, I think so Delian's hero and close mentor, Bill Gurley, had an essay a long time ago called the 10x Revenue Club. And I think it's like a good abstraction for kind of like tech revenue quality and like what makes up revenue quality. it's things like, you know, how durable is the revenue? Like if you sign a customer, are they going to stay for a year or 20 years? You know, how much contribution profit is going to come off of that revenue stream over time, all the basics.

26:43And I think you can like take those same building blocks and apply it to AI. I think there's several things that are worse for AI than at least than relative to SaaS for now. So generally gross, like gross margins are lower, which means contribution profit coming off is lower. I actually think that like, depending on the category, you could have customers that are more sticky or less sticky. Like I know the meme is that everything's experimental run rate and none of these customers are actually sticky. I think we see something very, very different among our group of portfolio companies. I think that the biggest lever that didn't exist in SaaS, that exists in AI, that could be a huge call option boon for the revenue quality of AI is the actual contract sizes as people start to eat into potential labor budgets.

27:23I know this is like still kind of like inning one and inning two. And it's also like a little bit of a meme where everyone's like, oh, it's going to replace labor and labor is 10 times SaaS and it hasn't really happened yet. But I think if you look at some of these coding tools and you look at something like Cloud Code, that is the first place where you can really actually say like, no, this is replacing the labor that a developer would do. And it is paid for on like a metered consumption basis. And the monetization numbers we're hearing around developers using Cloud Code are pretty crazy in terms of like, wow, that's like you're paying like one tenth of like a developer's full in cost to a company on an annualized basis for this product.

27:54And so I think that the thing to watch is like durability of revenue plus the amount of actual revenue that a customer can give you. And I think that you're going to end up the amount of gross profit that a customer can contribute over time. And I do think as some customers crack these agentic products that look and monetize more like labor, AI revenue could actually exceed the quality of SaaS revenue just because you're getting so much more gross profit per customer or like customer relationship than you would on the SaaS side. even though there are clearly things that are worse about AI revenue at this current point in time than there are about SaaS revenue.

28:27Dillian, how do you think about the moral imperative of a venture capitalist to invest in positive sum versus zero sum markets? This idea that you're re-industrializing America, you're saving the West versus moving chips around the poker table, taking from some legacy, you know, web 1.0 company and putting it into an AI company. What's your thinking and argument there? Is a market-beating ROIC all that you need? Yeah, you know, I think Peter always reminds us, like, you know, our number one job is deliver returns for ERLPs. And so I actually tend to not try to, you know, sort of overly moralize when, like, analyzing the things that I want to, you know, sort of invest into.

29:15to. For sure, when it comes into policy and I'm in DC and I need to report to the Security Council that Bill Gurley is a Chinese spy and the investments that he's making should probably be banned from the United States. Yeah, for sure there I have moral imperatives and things that influence that may end up shifting ROIC, right? But when it comes to which literal investments are we making, I think of it as just like, yeah, you just have to make the best possible investments irrespective of moral imperatives. But in some ways, I tend to think it turns out, actually, if you go too immoral, then that ends up affecting ROIC.

29:51So the last thing that I would at least close on for my question for Everett is one of the upsides of Founders Fund is we're very, let's say, non -centralized, distributed, not many rules, which Everett, for some reason, you chose to leave. And so I know nowadays everything that he says publicly, you know, probably, you know, five comms people and five compliance people that need to sort of approve it. And so my only request to you is, you know, to blink twice if somebody's got a gun behind the camera. I mean, you never say anything that goes through office credit. That's all you got to tell us, brother.

30:30Yeah. Let us know. Hey, our wonderful marketing partner, Ali, is behind the camera with a green and red paddle. And she hasn't even raised the red paddle yet. That's great. That's great. Well, thank you both for joining us. Are you worried about Uncle Sam potentially having sharp elbows now that we're hearing about the federal government taking a stake in Intel? Any concerns about him going down the stack into the early stage game competing for those seed and Series A allocations? Look, if Trump Capital wants to sort of mark up some of the reindustrialization companies, I'm all for it, baby. Cheap cost of capital.

31:06You're all for it. I'll say two things. I would say one, I think that the EV of like the enterprise value of Founders Fund probably three X the night that Trump got elected. So I don't I don't think Delian would complain about that. And then as a parting gift, Delian, you know, I think this conversation has been great and it's made me realize why you want to build factories in space, because your math on earth doesn't make any sense. Well, thank you both for joining. This is fantastic. You're both good sports. We'll have to do this again. I think it might be a draw. We'll have to have you both back soon.

31:38Thanks so much for hopping on. Great stuff. We'll see you guys later. Let me tell you about ramp.com. Time is money. Save both. Easy to use. Corporate cards, bill payment, accounting, and a whole lot more. A whole lot more. Do accounting rules matter? Yes, they do. Yes, they do. And you can enforce accounting rules on ramp.com all in one place. Go to ramp.com. That was beautiful. Two former colleagues barely holding back from saying things that they would ultimately regret. But they did. They did a good job. They did great. They did great. Yeah. I like the debate format. We should definitely do more of those.

32:10I think that was a lot of fun. I think the chat enjoyed it. My favorite rude comment in here. Oh, we got Andrew Reid in the chat. Everett versus Dahlian. Who can grow the most average beaters? Oh, my God. Thank you for watching, Andrew. Let us know when you've selected an opponent, and we'll have you on the show to debate someone. Yeah, I think we need to get the Holy Trinity. Yes, yes. If you're new to TBPN, the Holy Trinity is, of course, the three venture capital firms that have done a seed deal in a now hyperscaler or now mag seven company. So that is Sequoia Capital Founders Fund with Meta, originally Facebook, and Kleiner Perkins, of course.

32:51And so the Holy Trinity are the three most storied venture capital firms in the valley, much like the three famous watch brands, the Holy Trinity, Vacheron Constant, Patek Philippe, and Audemars Piguet. of course over in Switzerland if you enjoy this stream and you want to make your own stream get on Restream one live stream 30 plus destinations multi stream and reach your audience wherever they are if you're it's the backbone of your company and you're doing the launch streaming is the way to do it you don't have to try to poach Ben or anyone else on our team you can just go to Restream it's fantastic check it out anyway going back to the Death Star the vague post we're one week out from GPT-5.

33:37How has your GPT-5 experience been? Also, Tyler, the chat wanted you to answer. Explain the formula for ROIC. The formula? So yeah, I believe it's operating income divided by book value of invested capital, right? Oh, you got it. Clearly is running, clearly. That's off the dome. That's off the dome. I did not just look it up. And then what was Delian's rebuttal? He wanted everyone to... Why you can't achieve microgravity on Earth. Why can't you achieve microgravity on Earth? Do you know that? You're a physicist. You studied physics. You should get this. I'll have to get back to you. Let me think about that.

34:18Let me think about that. I think it's just the... Wait, actually, I can't really explain it. That's kind of hard. I mean, I know that it's like Earth has a gravitational field and we don't have the technology to reverse gravity, but I can't really tell you why we don't have the technology to create an anti-gravity chamber on Earth. Like, I can't walk through the physics for that. I just know that you can't do it on Earth. But mostly because... We've been trying to get a gong in microgravity here on Earth. I think it's challenging. You can do it for like a very short amount of time, right? It's like when you see the planes.

34:47Yeah, that's not actually microgravity. That's just falling, right? That's just falling in a pressurized capsule. Like, you're still under the... Because you are literally falling down to Earth during that. your surrounding environment is pressurized and so it feels like you're floating, but in fact you're really just falling closer to Earth. Like when the plane goes down, you are descending. There's no machine on Earth that will effectively levitate something and reduce the force of gravity to zero on Earth, or even reduce it significantly. Yeah, but the whole thing is from the observer, it's the same.

35:25Yeah, but for space manufacturing, for like growing a crystal the reason that would not you can't do it on earth is because it's too like it's not long enough no no no no i i think that i think that even if you even if you tried to do something in that in that plane scenario uh like you're still subject to the force of gravity even though you're uh because you're effectively falling even though you're not even though you're not feeling like the relative uh the like the wind speed you still are under the force of gravity I don't know. We'll have to figure it out. We'll have to have Dell back and explain it to us.

35:59Anyway, what's your one-week review of GPT-5? What's your takeaway? Jordy? I've been, it's been fine. It hasn't been that drastic. I still find myself navigating between different models using the switcher. Have you turned on the legacy models? I haven't gone into the hidden. No. So Tyler, you have though. Explain. Yeah. So if you just go into settings, you can turn on legacy models. So all I have in legacy models is 4.0. So 4.0 came back as a dropdown, but you can go into the settings and turn on legacy models and then you can access 4.5, right? Yeah. So 4.5 is still there. And 4.1, 0.3, 0.4 Mini.

36:43Oh, so you can access them all, but it's tucked behind even more menu. I think that the Ben Thompson take was that they are not being bold enough as a consumer company and telling people, you know, the Henry Ford thing. If I asked people what they wanted, they would have said a faster horse. You know, I gave them one color of car, black. I didn't ask them for input on that. Steve Jobs did the same thing famously with Apple, made a bunch of bold product decisions and then just said, consumers, I'm not taking input. You want a headphone jack? Too bad. I'm taking it away. You want an extra port on your MacBook?

37:21You want, what was the thing they took away? They took away all the ports for a while. They had no ports for a while. It was just USB-C ports on the edge. And so Facebook's been similar with the removal of the original feed, and then they moved away from a chronological feed to an algorithmic feed, and there was a lot of pushback for that. But Mark Zuckerberg channeled a mentor of his, Steve Jobs, and said, you know, I know that this is better for the long term. I know that this is better for everyone in the long term and that people will ultimately love this. I mean, the main thing is it's very interesting that this was reported by Alex Heath and The Verge last night.

37:58Apparently he got dinner with Sam Altman, I think, and Greg as well or some other executives. And they said last night, about an hour before the dinner started, OpenAI pushed an update to bring back the quote unquote warmth of 4.0. which is what the Reddit, the Redditors of the world, the AI is my boyfriend enthusiasts were clamoring for. So it's interesting to see how quickly they folded there. I think, yeah, clearly they made users distraught. I also think of, I imagine a lot of those users were paying the top tier subscription. and I you know again it's hard to read too much into reddit or really anything you see online but a lot of people were canceling or threatening to cancel if they didn't bring that functionality back so anyways Sam I mean I would expect going forward like constant changes and iterations just like the YouTube algorithm is constantly changing the x algorithm is constantly changing yeah these these updates get pushed very incrementally there's constantly tweaks that are happening So Sam is quoted saying, I think we totally screwed up some things on the rollout.

39:09On the other hand, our API traffic doubled in 48 hours and is growing. We're out of GPUs. ChatGPT has been hitting a new high of users every day. A lot of users really do love the model switcher. I think we've learned a lesson about what it means to upgrade a product for hundreds of millions of people in one day. Yeah, it's always tough. He pegged the percentage of ChatGPT users who have unhealthy relationships with the product at way under 1%. I agree with that. That sounds right. But acknowledge that OpenAI employees are having a lot of meetings about the topic. Quote, there are people who actually felt like they had a relationship with ChatGPT.

39:41And again, in this article, this post that we read yesterday on the show that he posted eight years ago called The Merge, talking about the inevitable point that humans and machines merge, he said, The Merge can take a lot of forms. We could plug electrodes into our brains or we could all just become really close friends with a chatbot. So he was aware, you know, credit to Sam for calling this one pretty much perfectly because clearly, you know, it's it's millions and millions and millions. You know, even if it's way under one percent, this is, you know, tens of millions. Right. Yeah. At least a million, hundreds of millions of daily users.

40:25Yeah. Probably like under a million. So hundreds of thousands of people. That's a lot that could have. Yeah. OK. Way under one percent. So millions of people maybe they're not quite at a billion active users so and then and then a lot of those user international in terms of like the I mean not that really matters you want to be keeping everyone healthy, but Yeah, we're talking about like hundreds of thousands of people that are protected potentially negatively affected So they got to drive that to you know point one percent and then point oh one percent and then you know Get as close to zero as possible.

40:55Yes, go there's always going to be some people that you know use they read the newspaper and they go crazy. But the more that you can do, the better. Sam says you will definitely see some companies go make Japanese anime bots because they think they've identified something here that works. You will not see us do that. We will continue to work hard at making a useful app and we will try to let users use it the way they want, but not so much the people who have really fragile mental states get exploited accidentally. Well, as they continue to iterate on the product, they have to use Figma.com. Think bigger, build faster.

41:27Figma helps design and development teams build great products together. Go make something I'm figuring it out. We have a question from the chat for Ben. Ben Kohler, our producer, was recently followed by Reid Hoffman. And the question is, did Ben get any Hoffman chat? Did he slide in the DMs or did he just follow you for updates? I think just for updates. Just for updates. I'll keep you updated. If you're not following Ben, you got to follow him. He posts constantly. He posts constantly throughout the show when big things happen, when crazy stuff's happening on the stream. He's kind of like the premium feed Like, you know, we put a lot of stuff on the main account.

42:01Ben's the behind the scenes guy. So go follow him. Yeah, the whole crew. Lads, lads, lads. So my final takeaway from the Death Star vague post is that there was this viral image when in the lead up to the GPT-4 launch is this data visualization. We can pull it up as the first slide in the deck. It was visualizing the number of parameters in the model. And this went very viral multiple times. So it was GPT-3 had 175 billion parameters and GPT-4 had 100 trillion parameters. And so you see the small dot and then the huge circle. And a lot of people were afraid by this. And it was kind of this indication of exponential takeoff.

42:44And we really did see a qualitative improvement in just scaling up the pre-training run from GPT-3 to GPT-4. But GPT-4.5 taught us that pre-training scale is, in fact, not all you need. And the way to make a great AI product in the modern era is a mixture of techniques, experts, and researchers. You need a whole host of things, particularly with GPT-5. It feels like they RL'd on a lot of different problems. And so to me, the Death Star post represents an even bigger circle from that GPT-4 circle. So the Death Star is the biggest possible circle. And it's an expansion of that GPT-3, GPT-4, GPT-5.

43:28But couldn't you read this that GPT-5 is the Earth? No, no. GPT-5 is the Death Star. Or the perception of GPT-5 as just being a bigger model is the Death Star. OpenAI blew that up. They blew up the metaphorical big circle with a model that isn't just bigger. Semi-analysis said the release is the router. The router is the release. And what that means is that the gain in the value delivered by this product is not just a bigger circle. It's a more complex coordination. It's a laser that can kill you. It's all the different X-Wings working together in tandem. And then the Millennium Falcon comes in and saves the day.

44:14that's when the model router triggers a reasoning step and it thinks for a long time. The Death Star is the end of the pre-training scaling law. Well, let's get into some more coverage here from Alex Heath. Sam says, you should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future, he confidently told The Room. We have to make these horrible trade-offs right now. We have better models, and we just can't offer them because we don't have the capacity. We have other kinds of new products and services we'd love to offer. So obviously, agent making that more widely available, I think, is what he's alluding to.

44:55He also thinks we're in an AI bubble. When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the tech bubble, there was a real thing. tech was really important, but the internet was a really big deal. People got overexcited. Are we in the phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes. So he obviously, you know, contributed to this excitement in a... Sort of, yeah. I would say that he... He didn't invest in very many competitors.

45:32And if there's a power law here, it could play out like the social media bubble where there was an immense amount of excitement around Facebook cracked it. It's on the way to be a trillion dollar company. And there was a belief for a while that it would be oligopolistic and Twitter and Foursquare and Pinterest and Snapchat would also be trillion dollar companies. But that didn't happen. And if you invest in those companies at unicorn valuations, you have not seen fantastic return on invested capital as opposed to just... I just think it's fair to say that Sam helped get people overexcited and that in many ways he was saying, you know, with GPT-6, we might be, you know, discovering novel physics and curing...

46:19Who's the we there? Is the we open AI or is the we every company that's raising in the valley right now? It's an important distinction. I'm speaking for open AI, but I think people are gonna naturally Yep, totally. No, I agree. Take that as AI as an industry broadly in terms of its potential. So people might start thinking, yeah, maybe the 20th best LLM has a good shot at curing cancer. Yep, but the 20th best social network was not worth 1 20th of Facebook. It was worth 1 2 ,000th of Facebook or 1 20 ,000th of Facebook. And that's the nature of these power laws. But my take is that, so the model, the release being the router and this shift towards OpenAI potentially shifting into dominating agentic commerce, having a monetizable free tier, this is actually a bull case for super intelligence.

47:21A lot of people on the timeline were like, oh, GPT-5 was supposed to be like, you know, an order of magnitude gain, something really qualitative, like you use it and it just feels different. It's just 100 % on all the benchmarks, whatever. It wasn't that, it felt very incremental. And a lot of people were kind of, you know, were plateauing, all of that. But I think that shifting to a freemium model, a monetized free tier is actually a bull case for building the trillion dollar cluster. And my thinking goes like this. So you can build the first GPT-2, GPT-3 cluster with non-profit donations. Like$100 million gets it done.

48:01And that advanced them to that stage. But to do the GPT-4 training run, they could not marshal the capital in the non-profit space. They had to become the for-profit. They had to get venture dollars in. And so basically, the Shogoth demanded capitalism. This is the Nicoland take that artificial intelligence was sent back from the future to invent capitalism. Have you heard this take? It's great. And so the idea is, you know, like you could not get to GPT-4, GPT-5 without a for-profit company with the promise of return on investment. And so you pulled in all the venture dollars. The question is to build a trillion dollar cluster.

48:42I think Masa is going to be tapped out soon. I think Masa is a card you can play once. I think that there is a limit to how much capital you can marshal in the private markets, even in the public markets. I just think it's impossible to raise a trillion dollars necessarily. And that cluster must be funded by free cash flow. It must be underwritten by a company that can justify a return on investment from their direct product. And so we're seeing this right now with Google and Facebook. Yeah, looking at a partnering with Blue Owl. Investing their free cash flow. Yeah, they're investing their free cash flow.

49:15Yeah, they're doing some debt. But I think to get to the really, really big numbers, the trillion dollar cluster, it's going to have to be built on just continual free cash flow investment from a company. Tyler, what do you think about situational awareness, like nationalizing labs? Do you think governments can fund the lab? Well, we're about to nationalize Intel, so maybe that's a path down the road. I don't know. I don't think it's on the horizon anytime soon. Mostly because we're just not seeing capabilities that would threaten. It comes down to me. It's actually insane. So a week ago when that reporting from the journal on Leopold's situational awareness, everyone is just dragging him, dragging him, dragging him.

50:02Why is he long intel? His fund is probably blown up already. It's up 21 % in the last five days. Oh, my God. Wow. It's a gong for Leopold Aschenbrenner and situational awareness.

50:18Yeah. Anyways, there's some more interesting stuff in here. I don't see it happening until the labs pose a threat to the U.S. government in some way and are so dominant. I don't think we're at that phase. We're getting into the danger zone. We're in like new Google territory. It's a dominant consumer app. I don't think so there's some more interesting reporting here from Alex. He says Sam confirmed recent reports that opening eyes planning to fund a brain computer interface startup to rival Neuralink. I think that neural interfaces are cool ideas to explore. So Sam, I would like to be able to think something and have chat GPT respond to it.

50:58And of course, I think it was a Financial Times was reporting that Sam Altman would be a co-founder of this company merge. does Fiji Simo joining OpenAI to run applications imply there will be other standalone apps besides ChatGPT? Sam Altman says yes you should expect that from us. He hinted at his social media ambitions quote I am interested in whether or not it is possible to build a much cooler kind of social experience with AI. He also said if Chrome is really going to sell we should take a look at it. Alex says while Altman has a lot of interest it's not clear it's not actually clear that running open AI over the long run is one of them.

51:37Sam says, I'm not a naturally well-suited person to be a public company CEO, he said at one point. Can you imagine me on an earnings call? I didn't figure it out. Alex then asked if he would be CEO in a few years. Sam says, I mean, maybe an AI is in three years. That's a long time. I love it. It's great. Some other... What else? I love Vanta. Automate compliance, manage risk, improve trust continuously. Vance's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation Whether you're pursuing your first framework or managing a complex program.

52:12So a few more points in here Altman had notes on making GPT 5. We had this big GPU crunch We could go make another giant model We could make that and a lot of people would want to use it and we would disappoint them And so we said let's make a really smart really useful model But also let's try to optimize for inference costs, and I think we could did a great job with that obviously they're the you know we're clearly wanting to be more competitive with Claude and Anthropics API business on the AI device with Johnny Ive Sam said it's going to take us a while but I think you will think it is very much worth the wait I think it is incredible you don't get a new computing paradigm very often there have been like only two in the last 50 years so just let yourself be happy and surprised.

52:59Only two what? New computing paradigms. Oh yeah. He says, so just let yourself be happy and surprised. In the last 50 years, he says. In the last 50 years. PC era, mobile, cloud, I guess mobile and cloud are tied together. He's been Thompson-pilled. On the future of web and publishers, Sam says, I do think people will go to fewer websites. I think people will care more about human crafted content than ever. My directional bet would be that human created, human endorsed, human curated content all goes up in value dramatically. Let's go. Let's hear it for our live stream. Human curated. Human handmade.

53:33Seriously. What AGI means, Sam says, maybe the milestone that's most relevant to us is when most of our research cluster is allocated to the AI researcher instead of the human researchers. But I don't think that's going to be so binary because I think it'll feel like people get a little more help and a little more help and a little more help. he also said if we didn't pay for training we'd be a very profitable company that's a good question so uh tyler have you thought more about what happened to gpt 4.5 i people it's like people always say like oh it was so bad and same thing with duty five it's like okay do you remember when we had um jack on and he talked about his blog it said gpt or 4.5 is like as good as we should expect yep five is the same thing i think it's a good model yep if you uh wait okay if you would please consult the graphs.

54:23Okay, pull up the meter. So my question with GPT 4.5 is, I understand that it's as good as we should expect. The question is just, is it in the money? Because GPT 2 was also on that curve and deeply unprofitable, right? They had to pay not a ton of money to train it, and it made basically no money because they didn't even sell it as an API. Remember, we talked to Greg Rockman. He was like, we had to pay people to use our models. Then all of a sudden the 3.5 DaVinci came out. Some people were using that. They might have spent, I don't know, 10 million dollars training GPT-3, 3.5, and some people paid for it.

55:01They probably made their money back, who knows. Then GPT-4, they do the big training run, the 100 trillion parameters, the big circle, and that has to be one of the most profitable training runs ever because they maybe spent 100 million dollars, but they are making a billion dollars a month inferencing it, and the inference cost is probably gross margin positive, more or less. But 4.5, they probably, it sounds like they paid a billion dollars to train it, something like that, a lot of money to train this big model. And it's expensive. And yes, it's better, but it's not better to the point where people are willing to bear the cost of inference for it.

55:36So it's kind of mothballed. And you can see that in the app. It's like, yeah, but it's like, okay, it's worth one AI researcher. I mean, I think that the value of that like R &D, like the knowledge that they now have training the next model is probably worth a billion dollars. Totally. If you're consider AI researchers worth a billion dollars easily. 100 % worth doing, 100 % not a big deal for their financials, not a big, it's just interesting that we went from a paradigm of like, like the big training run was unprofitable, then it was massively profitable, then it went back to being unprofitable, and the profitable research that they were doing shifted to some RL that they did on, you know, hallucination to reduce the hallucination rate.

56:17Like that RL run, probably not a billion dollars in training cost. I don't know. But it's clearly making the product better. People are going to use ChatGP more. They're going to be more likely to upgrade. And if the hallucination rate is lower, people are going to trust it to go shop for me. And they're going to make a ton of money off of that, right? Just an interesting dynamic. I don't know. Yeah, I mean, I think a lot of people were, We're like singling out this quote, if we didn't pay for training, we'd be a very profitable company. And just, you know, obviously it's easy to poke a little bit of fun.

56:48He's saying he's gross margin positive. No, no. Yeah, no, I know. I know. But still, anytime you have a CEO being like, if we didn't have this cost, we'd be profitable. It's always funny. Yeah, I mean, the follow up on the earnings call would be, Sam, any plans to stop training then? Well, yeah, exactly. So we said, you know, this is whatever it said. and this is what we said you know in in response to the gpt5 launch is that the product is now the most important thing and uh whatever ever said just now was that you know you could you could swap in much cheaper models even open source models and people would still be using the product in the way that they are last quote from sam from alex's coverage he says i don't use google anymore i legitimately cannot tell you the last time i did a google search mocked yeah this is so So this is the interesting thing, right?

57:38When you think about the browser wars, which we went from the browser wars a month ago being like everybody's making their own browser to now everybody's just trying to buy Chrome. And it's still very much up in the air whether they'll be forced to sell it. Google's not going to sell it by choice. but it just does feel that ChatGPT with ChatGPT or ChatGPT agent is effectively a web browser already. You're just browsing the web. And so I think that the real browser war is the fact that ChatGPT functions as Chrome plus Google search in a single product already. Yep, yep. No, this is a great take.

58:19I completely agree. Wild card, Truth Social buys Chrome. Truth Browser. This would be the most aligned with the current administration. Tyler, what you got for me? Okay, so yesterday, it's not here anymore, but if you went to openAI.com slash new tab page, they leaked this page. Not on purpose, someone just found it. But it's basically very close to a browser style where you would type in and then it would autofill some possible questions, then you could save links and stuff. It very much looked like the Chrome homepage. Yeah, I wonder in the context of mobile, I mean, using generative AI to generate code in HTML has just completely pilled me on the generative UI elements.

59:07And I feel like I would probably be less interested, especially since I use ChatGPT mostly on my phone. I use Chrome mostly on my computer, on my Mac. And so I wind up, like, it's a very different style of working and I can imagine that the evolution here is not the ChatGPT app likes opening iframes and Safari web views and surfacing something that actually renders the native HTML. It's more like it scrapes all the HTML from a website into the reasoning chain, it gets all those tokens, and then it kind of just like reinstantiates the UI in like native elements and kind of cleans it up for me. And so I'm getting like a hybrid of like, ChatGPT used to just be pure text response.

1:00:04Then it became text response and it also has links in there now. And it also has - Commerce. Yeah, it also has tables and it can put in images now. And if you search for a product, it can share like little preview images with a link. And so they're hydrating the tokens more and more. And think about how bad 99 % of websites are. I completely agree. They're so bad. And having a standard interface is great. It's hard to navigate them. There's pop-ups and things like that. There are people that deliberately browse the web with JavaScript turned off because it forces websites into a more usable plain text experience.

1:00:43And most websites have a fallback in case JavaScript's not working or blocked. And so you can wind up going to the United Airlines checkout and it'll be just like normal buttons instead of like the pages jumping around, refreshing, pop-ups, all that stuff. All that stuff gets turned off and some people like it. Cookies. I haven't done it. Cookies, yeah. Anyway, if you're trying to improve your website, you're managing your GitHub installation. You got to get on Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Faster. Well, pull this up in the timeline.

1:01:17What do you want to talk about? boys we have a post here from the new york stock exchange otherwise known as the new york style exchange and here we are let's go neat nice president lynn martin stuns in the tbpn spring summer 2025 collection thank you for acting as our model for this uh this season's uh tbpn collection we're we really designed it proud to have you for tech and finance leaders that that that are dedicating their lives to improving capital markets and maintaining American dominance globally. That was the North Star with the collection. Patagonia is like, oh, this was designed for your next hike.

1:02:00This was designed for Everest. Well, this was designed for the trading floor on an IPO day. This was designed for the hike up to that bell. Exactly. And for the Mount Everest of capital markets, the New York Stock Exchange. For the gong hit that retires the next TBPN gong. Yes, exactly. Exactly. We have, I think we can skip over this coverage from the Wall Street Journal. They said OpenAI's rocky GPT-5 rollout shows struggle to remain. I just want to put this in the truth zone, but we can skip this. Yeah, so this article, which was released a couple days ago, the title is OpenAI's rocky GPT-5 rollout shows struggle to remain undisputed AI leader.

1:02:39It's basically just coverage from a bunch of people complaining, and it doesn't capture any of the actual underlines. It doesn't feel like they're struggling to remain the undisputed consumer AI leader. I think you could argue that there's certainly a much closer race in co-gen. Yeah. So I put that in just as a reminder to talk about GPT-5. The real news is the Financial Times has a story on DeepSeek that isn't super deep in terms of the coverage, but there are some interesting tidbits in here. So the article is DeepSeq's next AI model stalled by Beijing push to take up Chinese chips. We talked about this a little bit with the NVIDIA H20 now available in China and what that means for DeepSeq.

1:03:30So DeepSeq, obviously, everyone should know is the disruptive Chinese open source frontier reasoning model maker from High Flyer. they were in the high frequency trading business, then they decided to go into foundation model training and they developed a very, very solid open source language model very quickly and it surprised everyone. We started talking about Jevon's paradox and the idea that cheaper AI will just wind up driving more and more adoption. We've certainly seen that. And the sell off that happened in the AI trade in the public markets came rip roaring back and Nvidia rocketed to over a$4 trillion valuation after they'd sold off slightly after the DeepSeq news.

1:04:12So apparently they've been trying to get this R2 release out, the next version of their reasoning model, and they're having a hard time because allegedly they're using chips from Huawei. So China, the CCP, and Beijing has pushed DeepSeq to switch from NVIDIA to Huawei. Everyone suspected... And it's not technically illegal to use NVIDIA chips, but it is politically incorrect, according to one person familiar with the conversations. Currently, yes. And there were export controls. There were never any import controls. So if you're High Flyer or Deep Seek, and someone comes to you from Malaysia and says, hey, I got 100 ,000 H-100s right here.

1:04:58You want to buy them? I fell off a truck. You're welcome to buy those. At least you were. Now it's politically incorrect to do so. And so, Huawei hasn't really gotten the job done. Lots of recent model releases have failed to live up to expectations. This is what happened with GPT 4.5, LLAMA 4, Behemoth. Like, the models are getting more, they're getting bigger. There's more and more integration points in the training cluster as you're actually building these out. There's power management issues, there's memory issues, there's all these different things. And that's why the AI researchers are making such high salaries and the trade deals are happening because if there's one researcher who can tell you that line of code is going to result in...

1:05:39It costs you$20 million. Or more, or$200 million. Yeah. That's really valuable. And so this case shines a light on the exact nature of the gap between NVIDIA and Huawei. So when the Huawei Ascend Cloud Matrix 384 came out, everyone was kind of saying, okay, wow, like Huawei's basically caught up. It's not as efficient on a dollar per flop basis. like it's more energy intensive, but if you're willing to spend a little bit more energy, you basically get the same capabilities. That might not be the truth. Like there might be actually some qualitative value to CUDA and the reliability of the drivers and the software on top of Nvidia, and actually the underlying chips as well, such that even if you have the Three Gorges Dam, you have cheap energy, you have nuclear power, China's developing more and more energy, it's getting cheaper and cheaper.

1:06:30Even if you have cheap energy, if you go to set up the massive data center to do the huge training run on Huawei Cloud Matrix 384, you might still be in trouble and you might not be able to get the model out the door. It could be something else though. We don't really know. This is all kind of just like little tidbits here and there. It's notable that all of these have led to, they originally wanted to launch R2 in May and it's still delayed. Yep, yep. And so it'll be interesting to see how DeepSeek reacts. They could potentially say, you know what, like Huawei's just not getting the job done, we'll deal with the pushback from Beijing.

1:07:11We're putting in a huge order for H20s from NVIDIA. We want the best, or at least the best that's available to us, even though the H20 of course is four years old at this point and severely nerfed. So we'll see, when will they get R2 out? How powerful will it be? and most importantly, what will the cost per million tokens be? Because if we get an O3 level model from DeepSeq and it's 100 times cheaper, even if that doesn't displace OpenAI meaningfully because OpenAI is operating at the application layer, it will be incredibly bullish for every wrapper company because all of their gross margins will flip positive very, very quickly because they'll need to do some fine tuning.

1:07:54we'll need to see what perplexity did where they made instead of deep seek they made it like 1776 seek or something like that. They did a fine tune on it to kind of make it more American. But the most important thing was that the deep seek researchers figured out a bunch of interesting hacks to make just inference way, way, way, way cheaper. Anyway, speaking of wrapper companies, application layer companies that we love. Julius, what analysis do you want to run? Chat with your data and get expert level insights in seconds. Ask Julius. Look at this view. Yeah, I love it. Ask Julius to analyze your data like 2 million users have already done.

1:08:36Folks from Princeton, BCG. Love Julius. I wish, the only thing I would change with Julius is I wish it was Rahul. Yeah. Or Sunwalker.ai. But it's always time for. Just like the Ford Motor Company, you know. The Sunwalker Artificial Intelligence Company. Maybe. Maybe. It could happen. So T.R. Taxis has a take on the Deep Seek story because they think it's a confused narrative with no sources at Deep Seek confirming it. So T.R. Taxis says, This story is so insane. Dream narrative for burgers and their pure hearted vassals. I think that's an American slur. Yeah, I guess. That I might well cook up my own.

1:09:22also based on half-baked rumors, experience in an authoritarian society, and just a little bit of sleuthing. As expected, the plot thickens. Xi Jinping's heavy-handed central government approach to stalling development is the take that TR taxes might be debunking here. DeepSeek was a breakout hit, but patronage networks don't reform overnight. The actual Chinese national champion in AI is, as we know, Huawei. They get unconditional subsidies, and the nation's hopes are pinned on them. On a software side, It's also Tsinghua, the university, and their brainchild ZAI with GLMs, but Huawei does everything.

1:09:57In February, the party asked Ren Zhengfei to partner with major AI labs, including DeepSeq, and Beat America at AI. They approached DeepSeq, sending personnel to adopt Ascend clusters for V3 inference. We've seen papers following from that, and we know these clusters now work at Silicon Flow and elsewhere. They also suggested training the next generation models on Huawei, but were privately told by, probably after some experiments, that the Ascend ecosystem is not yet mature or reliable enough and will go with H800s. Thank you very much. With the knowledge gained, they had set out to train Pangu Ultra MOE, mixture of experts, as a reproduction of V3R1 and may or may not have failed at that due to interconnect issues and broad lack of competence resorting to repackaging R1 with the intent to report to the party that DeepSeek had proven uncooperative.

1:10:53But there's nothing special there. They can do equally well and will soon surpass SAR. Now, as DeepSeek is not releasing any rumored R2, The timeline never once made sense, and that's a big issue. You need to have your timeline straight. There's renewed discussion about importing NVIDIA. They are trying to spin this to their benefit, leaking to journalists that it was DeepSeq that had failed at R2, while Huawei's Noah's Ark small model lab is moving smoothly. They may know that V4 is planned to come out late enough that they still have some hope of producing a more persuasive internal result. For now, they are probably optimizing cloud matrix hardware and CINN, testing 910D and 920, and hiring people with LLM expertise.

1:11:38The above is an educated guess. The serious argument is that if you want to talk about the failure of Huawei's hardware, it's important to focus squarely on Huawei, and not a fanciful and unprecedented narrative where a historically independent startup is forced into changing their training stack by heavy-handed politicians. And so the takeaway here is that Huawei might actually be significantly behind Nvidia, and it's less about the CCP saying, you know, we want, I mean, of course, the reason the CCP is saying buy Huawei is because they want to improve Huawei and give them as many advantages as possible to get to the frontier and provide, you know, the best AI training hardware possible.

1:12:20But the flip side is that DeepSeq is down to use anything and train on a bunch of different stuff. And really, they are, they probably, at least according to this, they really are just having trouble training on large Huawei clusters. And so they're like, let's get back in the CUDA ecosystem. Anyway, let me tell you about Profound. Get your brand mentioned by ChatGPT. Reach millions of consumers who are using AI to discover new products and brands. Get a demo. Go to Profound. Be like the Mag5. What did James say? The Mag5? Well, he was saying, like, I can't say who's using it. But oh, yeah, the Fortune five, the Fortune five, he's got a Fortune five client.

1:13:02Yeah. So it's like one of five. We'll leave it to you. 20 % chance to guess it correctly. Anyway, lots of people making money on the Intel story. So the story today is that the the Trump administration just last week called for the resignation of Lip Bouton, said that his ties to China were too much for an American champion like Intel. but Donald Trump has reversed course and called TAN a success. And the idea of the U.S. government buying a stake in Intel is now floating around. I don't love the idea of the people that brought us the TSA running the most advanced manufacturing process humanity has ever produced.

1:13:44Or the folks behind the DMV. The folks behind the DMV getting in the fab, getting into the clean room might be a little bit of a stretch for me. But Intel does need better shareholders. There was a few years ago, before the CHIPS Act. Long-term patient shareholders. Exactly, people were talking about, oh we need an American semiconductor champion. This was during the re-industrialization meme kicking off. Everyone was saying this, like we need American chips and yet no one was like, I'm gonna actually go build a position in Intel. And so everyone was like, yeah we need this. It was a, what is it, a cocktail position?

1:14:20It was a cocktail position, meaning something, people like to talk about at cocktail parties, but they don't actually put their money where their mouth is. So you sound smart saying, yeah, we need to make Intel an American champion. We need to make chips in America. But I'm not willing to put any money on the line to actually do it. And so Intel's share price has been kind of in the dumps. Well, until recently. Until recently. So Dan Gallagher in the journal says, federal support could get the troubled chip maker over some hurdles, but risks great harm to the U.S. tech sector. We can get into it.

1:14:49So Intel definitely needs help, but the government support always comes with strings attached. And those strings in this case could ultimately trip up the Silicon Valley pioneer and the broader us chip industry. The Trump administration is discussing options with Intel that would involve the federal government taking a financial stake in the troubled chip maker. The idea came up during president Trump's meeting with Intel CEO, Lip Bhutan on Monday, and the discussions are still in an early stage. This is so funny after talking to fabricated knowledge over at semi analysis about like his main thing was like the problem with the Intel board is that there's too many government type people on the board.

1:15:26Politicians. There's too many politicians, too many like famous people, writers, thinkers. There's not enough like just people that understand scientists. We need like physicists on the board and like technologists. We need like an Elon type or like, you know, someone who understands the actual tech. Yeah. I mean, just steel man. It's like Trump has a multi-billion dollar digital asset business. I was about to say, yeah. He has a multi-billion dollar social media company. He is the founder of a tech unicorn. So it's not his first rodeo in the tech industry. That's right. So you got to give him some credit if he was able to get in there.

1:15:59So Dan says, that marks a fast turnaround. Given Trump was calling for TAN to be fired just days ago, the news was encouraging for Intel's beleaguered investors who have watched the chip industry's once undisputed leader lose more than half its market cap in less than two years. The stock jumped 7 % Thursday on the initial reports of the talks and gained more ground early Friday morning. But investors should still be wary. Intel's problems are such that even a big check from Uncle Sam won't fully solve them. The company has burned a total of nearly$40 billion in cash over the past three years, trying to regain its manufacturing lead from TSMC.

1:16:34Intel has also been granted up to$8 billion so far in direct funding through the CHIPS Act. But that hasn't been enough. Intel's most state-of-the-art production process called 18A was supposed to close the gap with TSMC, but the company admitted on its own second quarter earnings call last month that 18A will be used mostly for its own products, meaning few outside chip designers have found the technology compelling enough to sign on as customers of Intel's contract manufacturing service. Wall Street expects another$7 billion in negative free cash flow this year, according to estimates from Visible Alpha.

1:17:11Sorry, I took me a second there. You're really pulling double duty there on the soundboard. Tan told investors in the same call that he won't commit major capital spending to Intel's next process called 14A without commitments from external customers. Smart. He couldn't get a customer for that. That was widely seen as Tan drawing a line in the sand, a line by which he would determine whether to keep Intel in the business of manufacturing chips. But Intel pulling out of that business would be detrimental to the government's efforts to shore up domestic chip making for national security and supply chain stability reasons.

1:17:40Doug over at Semi Analysis was talking about how the chip design business seemed like it could be a target for like PE in the sense that if you came in and kind of overhaul. is going to come in. Yeah. If you, you know, dramatically cut costs and really focused on serving customers and, of course, raising prices, there's probably a good business there, but that the foundry business was critical and we don't want to risk losing that. Yeah, Hawk Tan is the CEO of Broadcom. I just wanted to say, have a great flight, John Exley. He says he's taking off. He's landing in one hour. And if you're trying to set up a semiconductor line, if you're trying to build or plan products, Get on Linear.

1:18:24Linear.app. Great idea. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. This chart chipped away. Chipped away. Intel and TSMC revenue. It's ripping. So I'm still sort of split on this. We have some guests on the show today to talk about the dynamic between the U.S. and China in the semiconductor race. I'm sort of open to the idea that we sort of solve the US-based manufacturing of semiconductors through partnerships with TSMC and Samsung, even though those are not American companies.

1:19:03If they set up fabs here in some sort of negative conflict scenario, it's like, well, we still have the factories here, even if it's run by a company in South Korea or Japan or Taiwan. on like the factory should continue to produce for the most part because most of the team that would be building. And I think the pushback there is we don't have the talent which is key to staying on the leading edge. Yes, that's true, but I mean yields at TSMC Arizona have been good so far and it feels like we could continue to scale up and it feels like a lot of the talent will be coming over and so there's a little bit of like, you know, you start to ramp up that supply.

1:19:44But it does feel like Intel is particularly good at the trailing edge, but maybe that goes international, but to South America, unclear where it goes. Unclear how, at least to me, how important Intel is as a strategic company versus just like, it's one of the greatest technology companies America's ever produced, it's a crown jewel, it should just be protected because it's good for the America brand versus if Intel disappeared tomorrow, how bad would things be in America? Would we be able to get by with other suppliers? Because we do have AMD, we do have NVIDIA, and then TSMC and Samsung are not in China.

1:20:27That's not where we buy our chips from. Well, Dan in the journal says, the government might, for instance, pressure chip designers like NVIDIA, AMD, or Qualcomm to manufacture with Intel perhaps as a condition for getting export licenses for China, and that could easily go wrong. if companies are forced to use intel's factories before they can make chips with production yields that match dsmc's it could result in inferior products and wastage by intel because so much silicon has to be thrown out to make a working chip more broadly if chip designers are using intel fabs even though they aren't the most advanced or efficient the entire u.s chip industry could lose competitiveness that would undermine the ultimate goal of government intervention in the industry, which is to maintain American technological supremacy.

1:21:10Yeah. The Rubicon of state intervention in chips has already crossed. The administration already signed significant leverage over Intel, has already, already has significant leverage over Intel, thanks to government factory expansion grants that place limits on how it can restructure its chip design and manufacturing arms without government consent. But the federal government must take care not to go too far, lest it undermine the market model that made American technology. Slippery slope. It is. But at the same time, there is a case to be made. And I guess, you know, like if you put the U.S. sovereign wealth fund under the direction of Leopold Ochenbrenner, there is a case just for make money for the taxpayer.

1:21:54And this is actually the opposite of a bailout. This is what Tim Geithner got in trouble for during the, not in trouble, he was ultimately vindicated during the financial crisis in 2008. he went and made a bunch of loans to banks on the order of like billions and billions of dollars. And everyone was like, this is a bailout for Wall Street. This is a bailout for the banks. But he actually only invested in the banks that made it through the crisis. And so those loans, those backstop debt instruments were paid back with interest. And so the US taxpayer actually made money on those deals. It feels a little weird, but the same thing could happen here.

1:22:31Like Intel's a$111,$110 billion company. If the U.S. invests and is able to do things to turn it into a$300 billion company, well, like that's an extra 3X for the U.S. taxpayer. And it doesn't actually result in any like lost money. It's not a family. And if Trump can just get three X's and string like a hundred of those together in a row, will solve the whole federal debt crisis. That's a high watermark. I think you should be targeting a nice 5x fund for the first run, then raise 10x more, and then scale up, and then start deploying the big money. You should buy 100 % of Intel. What you got, Tyler?

1:23:16This is like we should put Jane Street high-frequency lawmaking. Yes. Just optimize for GDP. Direct right access to the legal code. Yeah. So anything they can do to just maybe one of the foundation labs, actually. Instead of nationalizing the labs, we need to need to, you know, corporatize the government and let and do a reinforcement learning environment with a verifiable reward. The verifiable reward being the stock market price. Or L for business, but the business is the government. Exactly. So what what what can you what can you change in the legal code to make the stock market go up? And so you're just feeding off of that, constantly rewriting the legal code.

1:24:00Well, Zoomer at Zoomie Zoom has been going viral again. He says why AI is a house of cards. He has an entire thread breaking down these sort of chained losses that we've been talking about. And he's getting community noted quite a bit. that someone added 1H100 can serve thousands of users at once, depending on batch size and model. For inference, you don't dedicate a GPU to a single user. You load the model, then stream requests from many users in parallel. Other numbers in this post are also widely exaggerated. Yeah, this might have come from a group chat originally that was maybe not fully fact-checked, but told a compelling story.

1:24:43So there's a bump with it. And Nick Carter says, compelling threat if you ignore that inference gets 10 to a thousand x cheaper every year if you're willing to pay$200 a month for AI and VC funding sub and VC funding subsidizes half of that simply wait six months I would say you know Mr. Randall earlier on the show said it's actually not all of a sudden getting 10 or a thousand x cheaper at least for frontier models but the point he made is that a lot of prompts could be served with older cheaper models and that's going to be a big focus. I mean, clearly that was a focus for OpenAI with the recent launch.

1:25:20Yeah, I dug into this to see, you know, how would we really hit a thousand X cheaper this year on the models? And would the gross margin profiles of these AI companies flip extremely quickly? Or is it more like a five-year change to really optimize this stuff? I'm kind of split on it. The charts that Nick Carter shared here are pretty compelling. I just hope that the trend continues because the dynamic of reasoning models and test time inference is slightly different. It's less algorithmic driven. It's more just throwing raw compute at it and generating a ton of tokens. So I don't know. Tyler, do you think you're closer to 10x cheaper inference every year, thousand x cheaper inference every year what type of gain in cost per token do you expect over the next few years um don't make mistakes do you mean in what models are you talking about like frontier level models all the models but I think frontier will probably stay similar price and then you'll just see like over time like now we have open source models that are easily as good as like two years ago yeah right you have like 4.0 which is super cheap doesn't mean free like it means free no license but you still have to inference it on an Nvidia GPU that costs money and you have to spend electricity that costs money just open sourcing a model does yeah but but but but when you open source something you can like distill it even further you can like you get some you know optimizations there so so oh three pro let's call that like an expensive frontier model how cheap do you think that is next year do you think it's ten times cheaper two times cheaper a thousand times cheaper um like an equivalent model of yeah oh three pro heavy reasoning thinks for 10 minutes generates tons of tokens uh closer in a single year x it's i'm probably closest to 2x 2x yeah i wouldn't say massive well guys i hate to interrupt but there's some breaking news william jong is proud to announce that he's the reigning open ai McNugget champion.

1:27:33He ate 55 nuggets in 10 minutes. Absolutely incredible. Some other breaking news. Numeral HQ, sales tax and autopilot. Spend less than five minutes per month on sales tax compliance. Go to Numeral HQ to get started. And we have our third guest of the stream since we already did the debate. We have Bill Bishop from Cynicism. How are you doing? How are you? Thanks for having me. Thanks for hopping on. We really appreciate you taking the time. Give us, I mean, I'm super familiar with your work. I think everyone should be, but give us the high level of the pushback that you saw yesterday. We enjoyed having you in the comments.

1:28:09And I want to know how you would frame the counter argument to what Aaron Ginn was making yesterday. Okay. Well, thanks for having me. And I'm impressed that you guys respond to jerk comments. That's good. I don't see it as a jerk comment. Well, yeah, we don't see it. I think it's Extremely fair pushback. We understand. Okay. When I have Aaron Ginnon, I see it as having Jensen Wong on the show. Okay. Well, that is how I see it too. So that's great. And I can't have Jensen come and whiteboard out pros and cons with me. And I can't throw random jokes at Jensen all day long, but I can to Aaron. And so I enjoy having him sit there and I can throw stuff at him.

1:28:47And of course he has his opinions and his arguments. but it's great to have somebody that can speak the language of NVIDIA. Yeah, no, and again, I think, thanks for having me. I'm psyched to see you guys on Substack too, which is great. And I see you're running a show today. You've got two great guests, Jimmy Goodrich and Leonard, who are going to be way better on sort of this discussion. So I think that, what I would say is what's been interesting to watch, and I think talking about the reversal on the H20 trip, We got our H20 chip from NVIDIA. We got to remember, right, there was a proposal teed up for the Biden folks to ban the H20, and they never did it for whatever reason.

1:29:31Trump comes in, actually bans it, so it looks like he's being more hawkish. And then a couple months later, because of really effective lobbying from NVIDIA, and specifically from Jensen Huang, at the principal level, to the president, to David Jackson. Yeah, I mean, it's not even traditional lobbying because they're spending like seven, $1 billion on lobbying, but probably 10 times that on Jensen Wong's like flight schedule. Flight schedule, right? No, it's brilliant. They say sort of, you know, disrupt the lobbying business, go right to the decider. Go direct. And how the narrative is shifted.

1:30:03And so Trump on the one hand looked like he was tough on China, then he backs off. And then of course he gets a bunch of flack for, oh my God, he's caving to China, he's caving to Jensen, right? When in fact, he sort of did what Biden didn't do. And then because of this personal interaction and the personal effort from Jensen Huang, he reversed course. And I think it has to be seen in the context of the broader, where I think there was a correct decision, the rescission of the AI diffusion rule, right? Which was really, you know, David Sachs was, I think, a big advocate of getting rid of that rule with a Biden administration rule that was going to limit countries that could buy NVIDIA GPUs, right?

1:30:37The idea that the US needs to lead, the US needs to be out there competing with China, not just limiting. And the way to do that is to get people hooked on the US AI staff, specifically NVIDIA, globally, ex-China. That makes a lot of sense. The China decision on H20, I think, is flawed. The idea that, oh, we're going to keep China hooked on NVIDIA by selling them H20, and then I think that Jensen Huang is lobbying to sell the next somewhat nerfed chip, a little better, but still not near the top of the NVIDIA product suite. the idea that just NVIDIA is better, CUDA is better than the Chinese hyperscalers, the Alibaba, Tencent, ByteDance, DeepSeek, they're going to want to stay with NVIDIA, makes sense in a world that is sort of a normal political economy, a normal competitive world, doesn't make sense in the context of a world or market that's run by the Chinese, the Communist Party of China.

1:31:38And Xi Jinping made very clear in April at this Polypure study session that was about AI specifically said he wants China to build its own indigenous AI stack. And so they understand very well this idea that, you know, NVIDIA wants to hook their companies on NVIDIA hardware. The party wants self-reliance. And so this idea that we need to compete, America needs to compete by selling into China, and therefore they're addicted, they won't break it. That I think is fundamentally naive and misunderstands how the party operates. I think what it does is it helps China fill the gap between where they are now in terms of lagging capabilities and lagging output or quantities in terms of the Huawei chips.

1:32:21It gets them to where they need to be over time, but they're going to be only intensifying their efforts to strip out NVIDIA, to break any reliance on the USAI tech stock. And so by selling H20 chips now, we're just helping China keep in the race when, in fact, if they weren't able to get the H20s, it would probably, I think, would help the U.S. at least maintain a lead, if not start accelerating and accelerating some amount of separation. what what's your reaction to uh the commentary showing that the the ccp is actually like actively pushing back against uh deep seek which is you know the clear open source or maybe not totally clear but an open source is also an open source leader but yeah your reaction to the news that the the beijing asked chinese foundation labs to not buy nvidia right even effectively Effectively, even if it means delaying, like, deep-sea cards, too.

1:33:20So there was a Financial Times report yesterday where it said they were encouraged. We'd love to know what the encouragement really was. But, yes, they were encouraged to use the Huawei. I think it was the latest Ascend chips, which were all based on dyes that were illegally fabbed at TSMC, where Huawei used a cutout company that was related to Bitmain called Softgo to get, I think it was 2 million dyes from TSMC that they can't make on their own in China. And even then, they're still not where they need to be. And so I think that this goes, you have that news, you have the news since the announcement by the Trump administration that they were going to allow, again, allow licenses or give licenses to sell H20 to China.

1:34:01You've had significant pushback from some of the regulators in China. You've had talk about the chips are unsafe. Maybe they have back doors. They're environmentally unfriendly. There are security risks. And so I think what you're seeing, you know, there's different hypotheses about what's going on on the on the pushback on the h20 it's maybe they're trying to negotiate for the better chip um i personally think it's actually more of a manifestation of parts of the system really just are like we need to stop this reliance on american chips we need to make sure we're focused on building our own pathway to self-reliance and that i think is related to that news that deep seek is being encouraged to use these lesser chip, even if it delays them, because ultimately when they figure out how to use them and, you know, the report said Huawei has engineers on site trying to work through it.

1:34:52Ultimately, that will help China because that will help them solve over time the various bottlenecks they're facing. But I think you can read into it. And one way you can read into it is that the CCP doesn't believe in this sort of fast takeoff scenario, you know, like runaway AI in the next two years, right? Which I think broadly, I don't know, a lot of people that still believe in that, but it's notable. No, I think that's right. I think this is more of a, we're gonna set the foundation for doing it in a self-reliant way, even if it takes us longer. And so that's where I think what's been interesting to watch in NVIDIA is how the narratives have shifted in DC, where the NVIDIA line, we have to compete, we have to compete, we have to sell them to China, we have to addict them.

1:35:36is basically everywhere now. There's just like, there's barely any pushback. And certainly in the government, from what I'm understanding, there's no longer any process, right? Back to the whole sort of how did Jensen lobby to get the decision made? There's no process. There are no, like all the, many of the people who worked on these issues were fired. And now it's basically like he gets to the principal, he gets to Lutnik or Sachs or the president, and that's the decision. There's no like national security discussions. There's no process anymore. Yeah, it feels like, interestingly, people often project a monolithic culture upon China, but then severe division within America.

1:36:16And it feels like there might be some division on both sides in the sense that in America, there are arguments for let's export all the GPUs, keep them dependent on us, versus let's hold it back and hurt their ability to scale. And then in China, they might be saying the same thing. Hey, we need to just buy, buy, buy and stay near the frontier. this will actually help us accelerate and then there'll be a different argument for for maybe maybe we need to just there's also there's also the the you know in in many ways deep seek the original you know deep seek release was was in some ways economic warfare on on nvidia right you saw this massive sell-off immediately and there and there was clearly a somewhat of a coordinated hype yeah i mean the app store the app store chart you know deep seek getting all these downloads was completely fake.

1:37:05Twitter bots to the trolls. And so I think you could also read into this and think Beijing doesn't think that the next DeepSeek release, regardless of how much progress they make around efficiency, will have the same effect on making NVIDIA sell off massively. Do you have any context on previous technological revolutions and the history of the US-China relations? Like going back to like the cloud or mobile like was there ever any similar considerations of don't sell iPhones it felt like in the previous era every big tech CEO was like I'm gonna massively TAM expand by getting into China and then they got blocked and this is kind of the opposite where Jensen's been playing that and then now he's having to pull back and the government's like the US government's the one that's saying don't sell to China whereas in the past with Uber and Google and Facebook, it's been the Chinese government saying don't come here with your technology.

1:38:02I think this is fairly unique as far as I in my memory, certainly with this sort of important technology. There have been certain types of things that the US government hasn't allowed to be sold into China, but not at the scale or the sort of economic importance or the frankly, the market cap importance. Zooming out, how do you feel like US-China relations are just going generally? I feel like two years ago, there was a ton of saber rattling about we need to get sharp on Taiwan. Everyone needs to learn what TSMC is. We need to talk about defense technology and Taiwan invasion in six months, 12 months.

1:38:38It's happening. It's going to happen. And then it feels like we've been in a bit of a lull, a little bit more economic warfare. But it feels like we might be coming out of a period of high tensions. Just give me the general pulse check from your side. It's a great question, and it's one that it's still quite unclear. I think that you see the beginning of the Trump administration, the economic tensions rose pretty high. Those have come back down to where there's now a sort of a tariffs are high, but it's calmer. Although the Chinese, in part, it's calmer, I think, because the Chinese pulled out their export control trump card, so to speak, around rare earths and rare earth magnets.

1:39:23And really, I think, showed the U.S. that they had actually a lot of leverage that the U.S. didn't necessarily appreciate. And so I think you're in a bit of a lull on the U.S. side because there are things like, for example, on the technology stuff, you know, there were a bunch of new actions around export controls, around chip related stuff. they're all tabled right in part i think because of how um the chinese were able to push back on the uh initially the beginning of the of the sort of the trade war using their their rare earths uh card um generally though when you look at uh the the broader you know you look at taiwan you look at um sort of things like the south china sea you know the this this you look at the other economic issues around what the U.S.

1:40:09says overcapacity, the structural issues are not going away. We are, and I think as you said, we're in a bit of a lull, and the Trump administration seems to be more focused on the transactional parts of the relationship for now. But there are some people who want to talk about, oh, maybe there'll be this grand bargain. Trump and Xi may meet this fall, and they'll have some great grand bargain. You know, it's hard to see how that would happen and how it would be sustainable just because of the real structural issues of the relationship. But there's no question that the narratives have been shifting.

1:40:46The Chinese have been working really hard on people-to-people sort of stuff that has, I think, pulled us back from the sort of peak of China hawkings. I said it, you know, my Sharp China podcast last fall or the end of the year, I just, we were joking. I said, you know, I think we've hit peak China Hawk, right? No, seriously, right? It's going to sort of moderate, at least for the time being. I think that's what we're seeing. Is the rare earth element stuff an ace in the deck of cards, or is it more like a jack or a queen? I think about, you know, we haven't even gotten to the, obviously Taiwan invasion feels like more of the ace in terms of just like how much pressure that would put on the relationship.

1:41:29but also Apple. It feels like if China were to put pressure on Apple, that would potentially be more disruptive to the American economy just because it's such a huge company. It's so critical to American technology than rare earths. Or is there some other dynamic at play there? I think the Chinese, you know, Apple is one of those companies that every time their tensions, it comes up, well, China could do something to Apple. And they have, you know, Tim Cook has been brilliant at managing President Trump and brilliant at managing Xi Jinping. And, you know, Apple, there was a great book that was written about Apple by Patrick McGee.

1:42:05I mean, Apple does a lot for the Chinese economy. They employ a lot of people directly and indirectly. The Chinese so far have not really bothered them in any direct way. The rare earths is one where they have the ability to effectively disrupt significant parts of U.S. industry and European industry. And they did that. And that, I think, is why you see, you saw the U.S. sort of pull back pretty quickly in the trade discussions. And, you know, the way the U.S. did it is after the first meeting in, where was it? It was in London, Geneva. At the first meeting, all of a sudden, the U.S. added these new export controls on like jet engines and other things because the Chinese weren't giving the rare earth magnets that the U.S.

1:42:48thought they were. That is the one where the Chinese can cause pain immediately. Yeah, yeah, yeah. So with Apple, if China does anything to Apple, that's like a million people unemployed in China, very disruptive to the Chinese economy. Whereas with rare earths, like you could stockpile them. It's not as critical of like a labor market in China. No, it doesn't. If they can't sell to us, it's basically it hurts the couple like one or two state owned companies. Got it. Got it. So it truly is more leverage for them. But it's but it's the card that you can only play for a certain period of time. And if the U.S.

1:43:21government and allies get serious about solving that bottleneck, it can get solved. The problem is it may be the Trump administration now is serious. This is not an this was not an unknown issue. The Chinese threatened this in the first Trump administration. The Trump administration, then we had COVID. Nothing really happened. Biden administration admired the problem, wrote some papers, had some meetings, didn't fix it. Now maybe there's the urgency to actually address it. Yep, that makes sense. Last question from my side. what is general sentiment from on the ground in China, or what's your read on sentiment among business leaders today?

1:43:56Not being there, that's a harder question to answer. When you look at some of the data in the surveys, you look at some of the multinationals, I think the surveys from various foreign chambers of commerce tend to be generally pretty pessimistic, more pessimistic than they've been in years. When you look at some of the surveys around Chinese business confidence, it is maybe bottomed, not particularly positive. Certainly, there are pockets that are positive. We talked about the deep seek moment. That has had a real catalytic effect on certain tech sectors. And you certainly see the Chinese stock market.

1:44:31The Chinese stock market is up pretty big this year. Things like AI stocks are up, AI concept stocks are up big. Some of the chip stocks are up big. The H20 news and the fact the Chinese maybe not want the H20s was good for some of the domestic chip companies. So in those sectors, you know, you look at robotics, I think they're feeling quite confident because both the market's there and then they've got massive government support. So it's a mixed bag. Well, thank you so much for hopping on. We are going to jump on with Jimmy Goodrich, but we'd love to have you back. I mean, this was a long time.

1:45:02Also, if you're ever in the chat and you have a comment you want to extrapolate on, we'll just drop you. You just join the same link that you have. Really, you can join us. We're live. So anytime you have to do it, appreciate it. We'd love to see you. Cheers, Bill. Have a good weekend. Cheers. Let me tell you about Fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one in ranking on G2, Fin.ai. Absolute legends. And we have Jimmy Goodrich in the Restream waiting room. Let's bring him in right now and continue our conversation on chips in China.

1:45:32How are you doing? Welcome to the show. Hey, good to see you guys. Good to see you too. I'm not sure if you've been tuning in or Bill Bishop gave you a highlight, a summary of the debate. We've been debating the pros and cons of exporting H20s to China and the back-and-forth America has had, threatening to ban it, actually banning them, then pulling back on the ban. Would love for you to tell us how you've processed that story, where you've sat on the issue over time and where you're sitting today. Yeah, no, I caught the tail end of it. I think it was a great discussion with Bill. You always got really good insights to add.

1:46:13I mean, clearly it's been a roller coaster. I mean, U.S. export controls on China have typically been this sort of the government thinks about doing things. It leaks out in Reuters or the Wall Street Journal that there might be doing an export control. China learns about it about nine, 12 months in advance. They stockpile everything they need. Then they watch the Americans sort of debate openly, in our democracy, which is messy. I think they look back on this. It's kind of silly. And then they kind of half impose a restriction. Then they undo it. I think it's just all kind of comical for Beijing.

1:46:45So how big do you think the H20 issue really is? Some people are talking it up as the most important chip. It's going to completely unlock DeepSeq R3. It's going to be this amazing moment for them. On the other side, folks are saying it's a four-year-old chip. It's heavily nerfed. Like, yes, DeepSeq figured out a way to optimize around some of the limitations, but in general, this is not a real threat. How are you feeling about the actual value of the capability provided by the CUDA ecosystem on top of the H20? I mean, I think it's still a very valuable chip for China and for China's AI model developers for two reasons.

1:47:21One, in the AI world, obviously, you've sort of gone into this in depth on your show. It's about training and inference. And particularly for inferences where you need memory bandwidth. and that's where the H20 excels. In fact, on a cost per token basis, it's probably the most competitive inference generating chip in the world because it's the same memory bandwidth of a hopper, but at a reduced price. So it's a great value chip for inference. And that's another key factor here is quantity, is NVIDIA can provide them in millions of units. That is something that Huawei and no indigenous producer today can do because of the export controls, because of the complexity of advanced node chip manufacturing, China's indigenous chip manufacturing ecosystem might in the future, but does not right now have the ability to produce enough to satisfy their own domestic demand.

1:48:10So at least temporarily in this sort of one to two year window, the H20 and then possibly a downgraded Blackwell is still going to be very useful to China. And on top of that, of course, there's the CUDA advantage. And if you talk to any AI model developer in China, They want to develop their model on the NVIDIA stack. They've been doing it since college days. Everybody knows how to code on CUDA. It's a big pain to move to another supplier. I mean, just moving to AMD, for example, is difficult. So, you know, let alone a much smaller, much more nascent developed Chinese competitor. So I think it's actually going to be a big game changer for the deployment of AI, for the scaling up of Chinese AI models.

1:48:51And if you think about reasoning and inference, if you want to develop more capable AI agents that are going to be doing more task-free autonomously, that's where H20, high memory bandwidth, good inference chips are going to come into play. Do you think it's smart for Beijing to take maybe a more long-term view here and say we're going to throttle development in the short term to really develop the industry locally? Well, I think they've got two sort of interest groups they're trying to take care of. On the one hand, they have their AI upper stack companies, the model developers, DeepSeq, Moonshot, EMI, Baidu, Tencent.

1:49:34They want just to be able to put out competitive models. And frankly, having spoken to many of them, they'd much rather use a better, more capable chip irregardless of where it's from. And NVIDIA certainly wins out in that right now. On the other hand, China has a self-sufficiency national target that Xi Jinping set as part of the 20th Party Congress. Call it or national technology self-sufficiency. And he's talked specifically about using secure and controllable indigenous chips. And there are, set aside Huawei, about a dozen indigenous GPU suppliers in China who want to take advantage of NVIDIA not being in the market and expand their market share.

1:50:16And so on the one hand, Beijing is welcoming NVIDIA back in. They're rolling out the red carpet when Jensen comes. They also – it doesn't matter why. They want an executive who's actively lobbying against tech restrictions in Washington. They want to reward that behavior. But on the other hand, they want to create a space for these indigenous GPU players. It's going to be in things like state-owned contracts. China Mobile, Telecom, procurement contracts are going to go mostly to those kind of Huawei and other firms. But I expect sort of the Baidu, Alibaba, Tencent, Hyperscaler contracts are still going to be majority NVIDIA, particularly if they can get the licenses.

1:50:52So Beijing is sort of balancing both of these constituents. In fact, within China, there are many who actually don't like Huawei. there was a Chinese Academy of Science very senior computer scientist who's a vice minister in the Chinese government and party and a talk of his leaked earlier this year where he was criticizing Huawei and saying Beijing should not let Huawei dominate the AI stack in China it's not healthy they can't have a single large monopoly that the government should support and that they should be supporting competition with inside the Chinese system so China is not a let's give everything to Huawei there's a lot of people who think they're too aggressive they're kind of like the apple of china nobody wants to really do business with them because they're cheap on price and very aggressive you know it's like the long or the wolf culture so you know huawei has its own enemies with inside china too interesting yeah so uh let me walk through the current thinking and you can kind of push back on my reasoning chain here so um we are we are now maybe in an era of plateauing we're not on the cusp of super intelligence by merely scaling up a bigger, large language model.

1:52:01And so what really matters is that inference, is the actual deployment of AI, getting AI all throughout every crack in the economy, is souping up the various SaaS systems and putting agentic workflows all over the place, increasing GDP not to 20 % overnight, but maybe just bumping it from 2 % to 3%. One point. One point or something like that. And so giving the H20 to China allows them to do that, allows them to scale inference, distributed inference nationally into all sorts of businesses from DJI will benefit from this marginally with slightly more AI all over their organization to some small machine shop that might be using it to run their HR software more efficiently.

1:52:51And so although it is somewhat of a more level playing field, we are still in the domain of just economic competition. And so it's not perceived as a major national security risk. It's mainly an opportunity for an American company to just play by the traditional rules of free market capitalism and export their goods all over the world. Is that like roughly the modern thinking you think? I'd say I agree with you on that first point. If we want to help enable China to be competitive in AI, want to help their AI model companies get access to the best infrastructure, want to help them scale up their deployment, win in the market at home and possibly also export their models globally, then absolutely we should be selling more H20s to China.

1:53:42I just don't think that's in our national interest. Of course, it's in NVIDIA's interest. They are agnostic to who wins in the AI race because at the end of the day, whoever wins is still going to be buying a boatload of NVIDIA chips and silicon. And so whether they're Chinese, whether they're from the UAE or from the United States, it's a multinational company that's selling silicon is really not going to care where their chips are going to and what they're enabling from a sort of flagged country perspective. I do think, though, if you look at disinformation and cyber warfare and you look at the capability that autonomous agents are going to be able to, even at current GPT-5 or future R2 level coding capability, if you think about scaling that up with 1 ,000, 2 ,000 autonomous agentic AI coding capabilities that are going to be doing vulnerability scanning, cyber offensive warfare, you really start to get an exponential capability.

1:54:41increase. And so I do worry that the Chinese state with two dozen H20 capable inference data centers could use that to do more autonomous cyber activity. That's nefarious. And on the same side, disinformation. If you can have models that can reason for longer and on an agentic basis, interact with people online, shift populations' opinion in places like Taiwan, that's incredibly dangerous and we've already seen the new york times reported about 10 days ago that state-owned companies connected to the chinese state are using deep seek um which is going to be inferenced on you guess what the best silicon possible to do exactly that which is um disinformation campaigns against taiwan and the united states so i actually i do think there is a national security concern here one there's an economic security leadership concern and then there is a um you know enablement capability down the road that is actually going to be, you know, I think happening relatively soon.

1:55:40Last question. Another concern people have had is just like giving the party in Beijing broadly access to more compute and the potential applications of that in a military context, specifically drone warfare. Is that something that you worry about very much or is that kind of secondary? There's, you know, there's like traditional applications of high performance competing, super competing, which is useful for weapons modeling, simulation. You don't need multiple large systems to do that. You might have a couple of boutique standalone government HPC systems. Where more of that model data is going to be useful is if you're using large distributed systems of federated drones, collecting data, acting autonomously.

1:56:23For example, think about a world where you have your PLA signals intelligence communications battalion That's in real time collecting all the battlefield communications in a Taiwan operation. Then they're transcribing that in real time into a written product that's being analyzed by autonomous agents in real time and then getting field reports into their commanders in real time telling them, hey, you have a squad that's hit counterfire on this beach north of Taiwan. on. They haven't even reported it up to their superiors, but the autonomous agent AI system might actually be able to get that, deploy a drone.

1:57:00If you think about just those capabilities in the future, that's where inference really matters. And that's where it's going to scale up and create tons of economic opportunities for Chinese companies and e-commerce and all sorts of other areas, finance and SaaS. But also on the military side, it's really endless if you could think about the applications as well. Great, great answer. Last question for me, what's going on with TikTok? It was the talk of the timeline earlier this year. Everybody seems to have forgotten about it. any updates there? You know, I don't have a whole lot. I think it's one of these things where it's pretty obvious what happened to it.

1:57:39You know, the president likes the tool, thought it was useful for his election. You know, they've continuously renewed the clock on that 90-day extension. Unfortunately, you know, there's no longer really an operating National Security Council inside the White House like you would have traditionally to kind of figure out and coordinate the interagency on a solution. So I think that feels like something that you mentioned earlier, Beijing kind of laughing about how our, you know, we have our democratic system just publicly debates all these issues, creating this ability for them to, you know, make make changes in advance.

1:58:17But this feels like one of those things. I mean, they have to be just laughing, laughing about how we've dealt with this entire issue today. I mean, like with many of our things, I think they look back and just don't think we're a very serious country. I mean, maybe with the exception of parts of our military, they think the U.S. is sort of a badass that should not be messed around with. But I mean, look at us on rare earth. We can't get our act together. Export controls, we're moving back and forth. Whether or not we think we should actually get our act together in onshore ship manufacturing.

1:58:51We're interested in Intel here a little bit and then TSMC there a little bit. But the Chinese government, I think from their perspective, like, look, we've got a 10-year plan, a 15-year plan, a 50. There's actually a 100-year plan, and they're just sticking to it. And they see us just kind of all over the place. And I just don't think they take us very seriously, unfortunately. Well, in 100 years, we know the plan in America to celebrate the 350th anniversary. There's going to be a party and maybe a UFC fight. That's what we can play for in America. On the White House line. Anyway, thank you so much for stopping by.

1:59:23Thank you for joining, Jimmy. Very insightful. We'd love to have you back and talk more as the stories develop. This is great. Yeah, happy to chat more. You guys are welcome. We'll talk soon. Cheers. In other news, Arun post has hit the timeline. Arun says, agree with Delian. Arun has spoken. Agree with Delian on the Maoist perspective that data centers should be turned into steel plants. I love it. And you know what else I love? Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. If you have a free calendar this weekend, fill it up with onboarding to Adio.

2:00:04And spend 48 hours just playing around in there, doing some deals. In other news, our next guest is in the Restream rating room. We will bring in Leonard Heim, second time on the show. I want to talk about Mr. Beast. He says he plans to take 100 software engineers and lock them in a room with no cursor subscription. with the first person to ship something that compiles taking home one million dollars wow this is from vas absolutely fantastic i i i originally read this not as a joke it's like oh he's actually doing the pmf or die thing because that kind of would work uh and i thought it was with a cursor subscription and then i was thinking about like wow he could wind up if he covers the bills he could wind up spending two million dollars on this challenge but uh Mr.

2:00:50Beast should get into software-based challenges. I would like to see him have a... It's probably room for a different Mr. Beast of software. He should have a horse in the co-gen race. Yeah. It was clear that PMF or Dai was on to something, but it required someone to make it their life's work. Exactly. And if someone was really, I'm going to be the Mr. Beast of tech, I'm going to be doing crazy challenges all the time, live streaming, experimenting with all the different formats, there's clearly something there. I think Cluey should run it back. Cluey is a good candidate. Or Cluey hackathon. Anyway, we have Leonard back in the studio.

2:01:21Welcome to the TVPN Ultra Dome, Leonard. How are you doing? Hey, happy Friday. Happy Friday. I'd love to talk about Mr. Beast instead of H20s again. Why are we already on it? Yeah. I mean, on that note, Mr. Beast, if he was going to lock a bunch of programmers in a room with Cursor, how bad do you think the gross margins would be? Do you have a take on gross margins of application layer companies? We've been talking about that all week. Do you have any insight in there? Anything that is muttering through your Whisper network? Unfortunately, I'm not in San Francisco, so I don't know how coders nowadays work.

2:02:01I'm out of the old breed. When I did software engineering, I didn't have AI. But I always notice when I use my cloud plan and I run out of queries, I was like, oh, damn, I need to write on my own and think on my own, who do I query? And then I spin up my second chat GPT subscription. So I think it would already apply to me. being stuck without ai is is quite a problem nowadays well uh give me the give me the current read your current take the latest and greatest on the h20 debate where do you stand uh pro exports pro banning the exports how how has anything shifted your thinking around it over the past do you want to nationalize nvidia do you want to invest in intel you're trying to buy what are you thinking well the last time i was listening to the president speaking about nvidia he was more talking about initially wants to break them up in our nationalists, right?

2:02:52Because they were so big. Break them up, but then roll them up later. We've seen this playbook like 20 times with Trump and we get shocked every single time. He comes out and says something, this is the worst thing ever. And then a week later, it's the best thing ever. And we're partnering and we're doing a deal. It's a roller coaster. Well, what he said during the, what was it? It was the AI action plan launch, right? Yeah, I was sitting in a room and he was talking about Janssen, pointing to Janssen. and he was just saying, I want to break them up, but it's so complex. And I think just basically somebody convinced them it's really hard and therefore you're not supposed to break NVIDIA up.

2:03:25Yeah. Right. So fair enough. NVIDIA doesn't have as clean of a line to break up as Intel where, you know, you could do a design. We're taking you over here. Yeah. Yeah. We need to see how focused on. The GeForce cards are going somewhere else. Yeah. I don't even know. What would you do? You'd open source CUDA or spin that into a separate company? Like if you were even to break up NVIDIA, like what would you actually do? Do you have any idea? Yeah, I think the software ecosystem might probably be the strongest one here. But again, this just goes hand in hand with the design, right? So again, yeah, I think it's a fairly hard one.

2:03:55But for what it's worth, I think the market share is only going to go down. Like there's more and more competitors. I mean, the total, total evaluation will go up. Don't get me wrong. I'm like, I'm bullish on AI and NVIDIA. But like all the other companies, all the other chip designers, they're just getting better. Is that driven by AMD catching up or new, what does Aaron call them? They're like the new types of chips like Cerebrus, Grok, and Etched. I forget what they're called. There's a new name for these crop of ASICs that are designed specifically for AI. And they could potentially pose a challenge, but they're certainly not taking market share yet.

2:04:29It feels like it's mostly NVIDIA, then AMD, then maybe some Huawei. The Hyperscalers. The Hyperscalers, the TPUs. AWS with the Tranium. Google has the TPUs since forever. I mostly think about them, right? I think it's pretty clearly the case. They have all the incentives in the world to build their own AI chips and reduce NVIDIA's margin. On the startups, let's see how they're doing. I think hardware is hard. Hardware startups generally fail. But if they find the right niche, it's pretty hard. NVIDIA builds this more general thing. And if you're like a hardware startup, you want to find a more narrow niche to be more application-specific.

2:05:05And if you hit the right point, whatever the next big thing is in AI, they might succeed. And we just see more and more of them getting there. right and like we see anthropic and other companies using google gpus using tranium and and again the debate of the showy of huawei is also getting better they will also just the market share can only increase right okay help me help me reconcile this uh google deep mine's been seemingly fine with tpu and not having cuda in their back pocket they're on the parade of frontier the gemini models are great v3 is great the new genie model is great it seems like they are not suffering or falling behind despite not having CUDA access.

2:05:48But then simultaneously we're hearing that DeepSeek, High Flyer, Alibaba, they want to train on NVIDIA. They're not satisfied with Huawei. Why is Huawei behind Google's TPU business? I think that's the example I always bring up. And people say it's going to be so hard to switch Huawei. Google eventually succeeded, but also Google struggled. The TPUs are pretty, pretty odd. This was way before an AI hype. And they actually also struggled. I'm not sure if you guys remember TensorFlow. This was originally what they did, right? And then later they switched to Jax and, right, and they have the PyTorch and everything around that.

2:06:23So I think over time they were struggling with software. But I generally see this as a one-time investment, and Google is a big enough of a company that can just pay this one-time investment, and then you develop on top of it, and eventually you will be there, and you break even. You could probably do a survey if people are doing fine. Like probably people still prefer CUDA because it's a bigger ecosystem. But as you're saying, Google is doing fine. And again, Huawei will struggle. It will take some time, but eventually it will get there. In particular, if they can use cursor along there, right?

2:06:49Yeah, yeah, yeah. AI helps you to build your AI ecosystem. And I guess to some degree, the flip side is like, TPUs have full access to TSMC, ASML, and Huawei is restricted all throughout the supply chain. And so, yeah, and so like the latest Huawei chips, we were just talking to Bill Bishop, he was saying that like that was from like two million uh was it dies that they got from tsmc through a shell company and so they have this like one time batch of supply chain like ease and then they were and then from then on they were supply chain constrained again so then they had to go back to doing everything themselves and that was a lot harder whereas google just calls up tsmc and says hey do everything that you do for nvidia just do it with our design which is like probably slightly different.

2:07:34Joe, anything else you want to dig into? No, I think we've covered. Yeah, yeah, yeah. We've hit this pretty hard. Well, actually, have you guys covered the semiconductor supply chain and how good Huawei is? Because there's this quantity thing in the middle of the debate, in my opinion, which I think is being missed here. Please. So everybody compares the NVIDIA H20 to the Huawei A7 910C, and that's the best chip they've been putting out there. Yep. And if we look at the Huawei A7 910C, it's like 80 % there when H100 is. So like two or three years later than NVIDIA, they're finally slowly getting there and approaching on the hardware specs alone.

2:08:09And again, we can look at the specification sheet, compare them one by one, but this never tells the real story, right? If you would do this with AMD and NVIDIA, AMD is on paper on the chips as good as NVIDIA, though one of them has 95 % market share, the other one less than five, right? So looking at the spec sheets is never enough. That's where the software ecosystem come in, where we just talked about. Huawei is definitely struggling there. I think they will eventually get there. They just need to have more developers. And I think that's exactly one argument in favor of letting the H20 go there, right?

2:08:40The more people use the H20, less people use the Huawei, so less developers are developing this ecosystem. But where it then comes in is, how many chips can they produce, right? We got one number undersecretary class that testified, so he's supposed to tell the truth, 200 ,000 ASIN chips this year versus we're trying to sell, I think it's 700 ,000 to a million H20s this year to China. So this is where then the debate struggles, right? So if we wouldn't sell them the H20s, it's not like they have more ASIN 910C standards and maybe they have more developers there, but they share a limited number of GPU resources.

2:09:14And that's the thing which I think needs to be debated here. And you can fall on both sides of the debate here. But we need to understand that China is struggling and they cheated these. It's not even 2 million dice, it's 2.9 million dice, right? Because they're struggling so much with their own production. Interesting. Yeah. So, yeah, I mean, maybe 200 ,000 is enough for people to actually bootstrap that software ecosystem. Certainly something to keep tracking. I think people consistently overestimate China in a bunch of different areas. Yeah. I mean, they can do software. I think they will eventually get there.

2:09:49And I think the idea that just like Huawei's ecosystem will always be terrible is just, look, don't get me wrong, I would hope it's true, right? But they got good coders. They got good designers. They will just get better on all of these kinds of things. And maybe CUDA will always be better. But like Huawei is probably at the bottom right now regarding how good the ecosystem is. And when the DeepSeq engineers, you know, they're getting to it and they're struggling. Well, we'll get better, right? I think that's for granted, independent of the 2 ,000 chips or million chips. Yeah, I think I still fall on the camp of probably H20 exports do put enough pressure on Huawei to justify it.

2:10:26But it's tricky. This is a thorny one. It's not extremely clear cut for me. Have you landed in a short... We should do a case study on Amthropic because they're the most beautiful example because they got so many different chips they're using. Yeah. Right? And how's it going for them, right? Like how long did it take to train on Tranium? Are they training on Tranium? Are they deploying on Tranium? I think this would give us an insight. How many engineers are they spending there and how bad is it still is? I think one question is, you know, is Beijing playing 4D chess by leaking out, you know, don't use the H20, don't use the H20.

2:11:00So then we just pile them into the country, right? I think so. Is it for DJs? It's just like you create an artificial demand. You say like, look, guys, you better buy some 910Cs. You really don't want to. So we tell them, oh, if it's for sensitive government use, you'd rather use 910Cs. So we only see strong encouragements, not full-on bans yet. And we've seen the same game with CPUs. Ask Intel how it's going. I mean, Intel in general, but also Intel CPU market in China. The government also started encouraging there, basically, can you please use homegrown CPUs? So we've seen it all over. Yeah, I mean, it would be super easy for the Chinese government to import some crazy tariff, level the playing field more that way, like even ban the H20 importation.

2:11:43Like there's so many different levers that they could pull. And the fact that they've stopped, they've only gone as far as like strong encouragement. We've kind of inflated that to be like... Political incorrectness. yeah people inflate to be like it would be insane it's suicide to not to go against a recommendation from the CCP but it does feel like they could have gone a lot further very easily if they wanted to so we'll have to see I mean it'll show up in NVIDIA's earnings right we'll see or we'll probably get data so we'll have to have you back on then but thank you so much for stopping by great to see you hope you have a great weekend we'll talk to you soon same to you talk soon take care and if you're looking to get some sleep this weekend Get an 8 sleep A pod 5 They got a 5 year warranty 30 night risk free trial Free returns free shipping Code TBPN I was going to say John Exley has landed He's landed Yes Let's hear it for John Exley Welcome back to the stream Thank you for joining We have We got to pull this up Trump and Putin Are meeting right now And I have a video In the chat team If we want to pull this up Very cool Look at this John So So Trump and Putin are walking.

2:12:55And what do you see? Whoa. A little flyover. That's a show of force. Where are they? That is wild. Yeah, what a display of force. I wonder where they're meeting. They're in Alaska. Alaska. Okay, that's sort of neutral ground, I guess. It's technically America. But yeah, flying the bottom. Well, we got our bears there. Yeah. That's another. They should they should have a bunch of, you know, Kodiak bears. What a fun place to meet. Alaska. Anyway, it'll be interesting to see what comes out of that. We should do a show. Hopefully it's a resolution of the Ukraine war. I mean, Trump has been, you know, talking a big game about being anti-war, wanting to no more foreign wars.

2:13:36No, don't send all the money overseas and save that for the taxpayer. Save that for real estate deals, baby. We could be building, you know, golden skyscrapers in America with all those with all those drones we're sending. but we'll see where it goes. But hopefully a peaceful resolution. We will see. Well, next up we have David from... We have AdQuick, AdQuick.com. Out-of-home advertising made easy and measurable. Say goodbye to headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe. And we do have our next guest here, David.

2:14:10Welcome to the stream. How are you doing, David? Welcome to the show. Thank you so much. What you got for us? Jordy's warming up. he's got the mallet ready he wants to hit the gong it's the first one of the stream you got some good news for us yeah yeah um uh yeah web ai uh we're working on some pretty interesting things just recently uh we announced our new knowledge graph mechanism um which is out benchmarked all of the best models year to date uh by how much uh seven percent seven percent Let's go.

2:14:48There we go. We like to hit the gong for big numbers. We like to hit the gong for big fundraisers. We also like to hit the gong for improvements. Benchmark maxing. Yeah, no fundraising announcement today. Soon. Soon. I can't leak it today. Well, we'll be refreshing our For Rocks account. But you haven't fact-raised money. Yeah, talk more about the genesis of the business, why you started it and what got you guys here. Yeah, absolutely. So WebAI is really focused on building models that can live on devices like the ones on your desk, right? So the Genesis, the company really started working. Like what?

2:15:30Like on a watch? Yeah, absolutely. Yeah, absolutely. All of it. So the company started by working in computer vision And we were working on how could we take like the YOLO models, if you guys are familiar with those. It was in the early like 2016 era. These were like the biggest models because language models weren't really mature yet. And did early work there, ended up creating our own runtime engine. So our own AI library and our own network protocol. And what this enabled is us to run state-of-the-art AI models across devices distributed. So when you think about the future of intelligence, we really believe that civilization model is the most likely outcome for superintelligence.

2:16:12And what we're building is the rails for that. So we serve and distribute models across hardware. So we're running some of the world's largest models today on things like a laptop. So when we say we outbenchmark like Opus 4 or GP5 in knowledge retrieval, that's happening on a laptop. So it's a pretty significant breakthrough in modeling. And we're doing this in lots of different industries. But what we believe is going to be a big step change in unit economics for AI as well, it's just not there in the cloud model. Seems very important because all week we've been talking about gross margins or the lack thereof in a bunch of these different applications.

2:16:55Inference is basically free when it happens on device, right? That's the goal. Yeah. And you can do some things that cloud players can't do. Right. So part of the way we're getting this accuracy, like there's always like this no free lunch. Right. So why wouldn't, you know, Anthropic do what we're doing to get this huge accuracy retrieval bump? Well, it's RAM intensive. So if we're distributing across devices, we can arbitrage. Right. So we can say, OK, we'll pull more RAM because we're inferring on a device. But if you're hosting this for a million users on NVIDIA, you can't do that. You can't load additional RAM resource for every user.

2:17:32It's just not efficient. But there's real things that happen on the edge that unlock, I think, technological paradigms in AI that are more meaningful, like more accuracy, more context, all of that. And we're seeing that. What about privacy, too? Absolutely. Right. So in our stack, everything's downstream only. So when we partner with a group, like we work with the Oura Ring, if you know that company, we're doing the AI for them. And think about like health data, like you want that to be private. So the dream there is how can we facilitate personalized models for millions of users that never leave their device?

2:18:10React to this post from Tay Kim, author of the NVIDIA way. He says, here's what I would do if I was the CEO of Apple. quadruple the RAM and iPhones to 32 gigs, have the max model at 64 gigs. Memory is oxygen for local on-device AI. More equals smarter and more powerful. Take the margin hit. Memory isn't even that expensive. What do you think? I think memory, I think he's right. I think memory is fundamental in these models. I also think we need to tread lightly on this idea that we're retooling infrastructure and we're making all these big bets on hardware with frankly a pretty immature algorithm transformers are not necessarily the winning algorithm so i think we need to be you know cautiously optimistic but we need to continue to work on what's next like i just you retool based on all these factors and an algorithm changes um and we don't know what the long tail of hardware is going to look like and nvidia was really relevant because pre-training and all this, but now pre-training isn't really happening at the same level it used to.

2:19:18And I think generally more RAM is a safe decision. But also, I don't know if I would jump in and totally rewrite how we're building chips until we know that this is the architecture we want to stick with. Would you recommend someone buying a new Mac, max it out and get the most memory? Yeah, absolutely. Absolutely. Yeah, why not? Why not? What about diffusion models? Do you think that there's a chance that they have a comeback? We saw that demo from Google where they were doing text token generation through a diffusion model. It felt kind of like a wildcard scenario. I don't know. I was actually performing on benchmarks, but it seemed like a path in the tech tree that was kind of more or less forgotten, relegated to image generation, but then kind of making a comeback maybe.

2:20:03I think there's lots of things that have been unexplored, relatively speaking. We spent so much time on transformers, but we haven't spent equivalent amount of energy and dollars on other architectures that we know work. And we know they work at specific things, but there's typically a broader application. I think it's really interesting. I mean, we're working on new architectures today with both the public sector as well as the private sector. And we're seeing a lot of breakthroughs that I think make the transformer look a little old. Oh, interesting. How do you think about the business model here?

2:20:39Because you're not going to be selling hardware to an OEM in the supply chain, but you're also not an API, so you're not pricing on consumption basis. It feels like there's a world where companies are comping you to an open source thing that they have to implement. Like, what does a great relationship with a big device manufacturer, like edge computing provider look like for you? Yeah, I think WebAI, we have a license, right? Because we have a proprietary tech stack. We're not a wrapper. We appreciate wrapper companies. We think they're doing cool things. But we own our stack pretty vertically.

2:21:17So we own our runtime, our AI library, and our tooling around that. And so when we work with a partner, we typically structure a base license minimum. And when we have that license, we can inject forward deployed engineers to work with these companies that honestly just don't have the AI talent quite yet. And they need help. And I think that's something that people aren't talking about is these products don't necessarily solve the problem out of the box. A lot of these enterprises like Fortune 100 need help. And so we do that. And additionally, there's a way to take part in the success in the deployment.

2:21:54So the usage fees we can get, even though we're running on device. So because our network is managing that. So you can imagine WebAI, you have two and a half million custom devices, or maybe it's an iPhone, and we're shipping across that. Our network manages all of that. So we collect fees on that. So it sounds like it's somewhat case by case, but you could imagine charging like a per device license but also like a per token license in the future answer is typically how we structure it so it could be a book it could be a one-word answer um as long as it's an output that's solving a problem um we mostly work in mission critical use cases like things like reassembling engines with uh multimodal ai um you know health diagnostics um uh public sector work yeah how quickly are you going to kill jordy's battery if you're doing test time inference on device He's been already complaining about the iPhone not having enough battery life, but it feels like there was a glimmer of hope when we were just like, let's just distill the models and it'll just be like a pretty short inference chain.

2:23:01But even if you distill the model, if you're inferencing for 10 minutes, that feels like a lot of heat in my pocket. Well, I don't know what Jordy's using. I would assume it's a pretty nice phone. It's like an iPhone Pro. Yeah, it's the latest and greatest iPhone. Yeah. So, I mean, you mentioned quantizing. So I'm going to talk a little bit about that and what we're doing there. So we released an open source paper around a tech that we were building early that we've now expanded. And it's a little it's it's more sophisticated now, but the principle still there. It's called EWQ. And instead of just quantizing and tell me if I'm going way too technical here, quantizing traditionally, you have like a fixed value.

2:23:41So we have let's say you have a full precision model. And when you quantize something, you say, okay, I'm going to do that. going to quantize it to 4-bit or I'm going to go to 16-bit. And so you're just drastically chopping the model down, right? So from the float values that it can pass through. With EWQ, what we do is we have something called device profiling. So when a WebAI model hits your phone, it's running our webframe library and it profiles your hardware. And then what we do is on inference, we run EWQ. And what EWQ does is it does real-time quantization. So based on your question and the inference.

2:24:17And what it leads to is close to 30 % to 40 % model reduction size in RAM while retaining accuracy. So what that means is we get bigger models inferring. And instead of like this one-size-fits-all quantization, we dynamically do that on inference. And what that leads to is less energy consumption, higher accuracy, less usage on the device. Yeah, so somewhat similar to the model routing that we're seeing in ChatGPT now. What were your overall reactions to GPT-5? It's just an MOE router. I was kind of hoping it was a new foundational model. And when you interact with it, it's really clear that it's just a way to dynamically control price based on a question.

2:25:02So you ask a question, they route you to a different model. If it's coding, it will route you to a different model. I can see where that's valuable. I have a lot of people that are non-technical that are in my life and I've watched them now switch off of GPT after the five release to things like Grok, which was kind of shocking to me. But I think people were used to a certain standard of response and now the lack of transparency and picking the model you're engaging with, I think, created some whiplash. But I'm sure there's areas where it's amazing. I haven't really gotten to tap into everything there.

2:25:37Been enjoying a lot of the anthropic releases and typically probably tend to lean that way. Cool. Well, thank you so much. Congrats on all the progress and hope you have a great weekend. Come back again soon. Sounds like you're awesome. Yeah, absolutely. Yeah, we're excited. Yeah, absolutely. Great to meet you, David. Thanks for joining. Let me tell you about public.com, investing for those who take it seriously. They got multi-asset investing industry in yields they're trusted by millions folks uh should we go soon um what did sama mean by this if we didn't pay for training we'd be very profitable we talked about this uh kristen culver says most successful coups in history napoleon bonaparte's coup of 18 brumaire october revolution in russia 1917 the nazi seizure of power 1933 egyptian coup d 'etat 1952 the chilean coup in 1973 and the open door retail army at open in 2025 first worked at open open door correct i believe must have and so she's having fun um it'll be interesting to see in other news yeah so the ceo stepped down this morning yeah this morning uh so carrie wheeler uh posted on x uh today i'm stepping down as ceo of open door when the board of directors asked me to take on this role at the end of 2022.

2:26:58The company was in crisis, the real estate market was punishing, the business needed a reset, and the path forward was uncertain. My mandate was clear, stabilize the company and do what was necessary to survive. Of course, I said yes, because I believed in Open Door. It wasn't easy, and it wasn't about glamorous headlines, but we stopped the bleeding. We restructured the business, rebuilt an exceptional leadership team, got an NPS of 80. And she says, I'm pleased the leadership team will continue to execute on the vision strategy. I'm closing this chapter with pride, clarity, and gratitude. So good luck.

2:27:29It is wild. Open door is up 200 % in the last 30 days. And the retail army said, nah, we want more. They want more. New leadership. Retail traders are crushing it. Well, I'm excited to see where Kerry Wheeler goes next. We should watch the new Jason Carman film. Let's do it. Let's pull it up. We have Cameron Schiller coming on the stream in just a few minutes. Let's pull up the latest work from Jason Carman. I'll be right back. Please.

2:28:02Dear son. Five, four, three, two. Some time ago. One. We have a lift off. Let's talk on the follow-up. The machines roared. The steel bent to our hands. We built for the stars, for our land, and for your future.

2:28:39We went fast.

2:28:45We went far. It made us strong. It united us.

2:29:02Then, the sound faded.

2:29:16The hunger to build drifted away.

2:29:33Those who knew grew tired.

2:29:42But now, the fire returns.

2:29:53The steel is ready.

2:30:03The country needs you.

2:30:10New boundaries beckoned. Who will you be? Where will you take us? The stars are calling.

2:30:36Our future is waiting.

2:30:45So will you answer? That's a sick fit. We need one of those. when we're discussing hard tech we should have gotten the suits today huge miss anyway new video from range view we have the ceo cameron schiller in the studio in the tbp and ultra drum welcome to the stream cameron how you doing what's happening hey guys good to see you i have so many questions are you did you act in that are you in that i am not in that and that was a big you're not in the suit what you got it how i thought you financed this whole thing i thought You made this happen and you didn't get a cameo. You got to put yourself in.

2:31:21The machine's got cameos, right? The machine's got cameos. And I believe that last scene takes place at Range View HQ. Is that correct? Did I clock it correctly? That is correct. That takes place in our technology demonstrator factor. We're running two. We've got a production facility down the street, which we'll see in some some new videos coming out. But that was at this facility, which we've been at. And now we're just busting at the seams. So we've got to we've got to move. And you'll see a bunch of content from that new one. That place is sick. They used to build space shuttle engines there.

2:31:48That's awesome. Yeah, the space shuttle shot was fantastic. I mean, Jason Carman, he puts on a clinic every time he drops a video. What inspired it? What was the message you want to send? Is this a recruiting film? I noticed the follow-up post was like, come work for us. This is not like an ad that you'll be running to get customers necessarily, or is it just kind of like vision film? What was the thinking? Yeah, I mean, it's really a message to America. I think it's a wake-up call. It's a question of who we really want to be as a country. What do we want to do? Right. I think I mean, that was a big part of my life growing up, going back and forth to China.

2:32:21And, you know, I saw the American dream in China when I was there. Saw people from the center of the country move to the coast to work extremely hard and make a life for themselves. And when I came back to America growing up, I just didn't see that here. And and I think we have to bring it back. I think for national security reasons, I think across the globe. So the real question is, can America bring it back? Because we need to make a lot of parts very soon. And this is less so about range view. I mean, America needs a thousand range views. This is about people that are considering making a big pivot in their life to work on something that matters to the world.

2:32:58And when you say make a lot of parts very soon, is that specifically like defense tech and warfare? Are you worried about great power competition? or is it more like we won't get the next generation of 9-11 or the next great physical product won't be made without this happening? I think the one that I care about the most is the second one. But the first one is definitely very real. If you think about it, America did some amazing stuff. The F-117, we invented stealth technology, the SR-71. All that stuff happened in America, and that happened because I think of factory towns. I mean, I'm calling in from El Segundo.

2:33:40This is a town that literally runs on jet fuel. Like there is a refinery that's right next door that's pumping jet fuel out, you know, under this city to feed to LAX, which is on the other side of the city. And you feel it in the air. Like there's something that happens when a community wants to be a part of something great in the world. And when we look around, everything around us has been made in China now. And with it slipping, I think a great calling to be a part of something amazing has slipped as well. So we really need to bring that back. We're going to do that with parts. We're going to do that with new technologies that enable factory towns all across the country.

2:34:22Yeah, I mean, I think it's super... What's going on behind you? There's like some scrolling image. What is that? Might be... I mean, we've got a lot of screens. Oh, is this a screen? It's like a TV or something? yeah i mean there's there's a lot of lights and there's a lot of this camera reacts with yeah yeah right right okay um yeah i think i think what you're what one way to kind of summarize what you're kind of getting at uh and from my view is it's important for american dynamism to not be like a venture hype cycle that's sort of it's it's not something that can be accomplished in two years since, you know, moving to El Segundo became popular and a meme and it needs to endure.

2:35:05Who helps with that? Was it me, you, Jason, Cameron? Carmen, yeah. We might have played a role in that. A little bit to do with it. But I mean, I guess the question is like, you say this is like, you know, a wake up call for America. Like, are we not awake? I feel like a lot of this message is broken through. Like, like what, what's left to say? What, what, what do we need to say? It's broken through in the bubble. Yeah. Maybe it's the bubble. Maybe it's the bubble. Yeah. Well, I mean, what is your take on like the re-industrialized summit? It's huge. Like the, the, you know, the American dynamism summit is huge.

2:35:39Like, like people seem to be beating the drum. People are at the white house. They're in DC. They're a fraction of the size of Salesforce dream force. That's exactly it. Are you going to be there dream force? Let's get you there. This man loves enterprise SaaS. He won't admit it on camera. He plays this character that he likes re-industrialization. But really, he just wants to code. Yeah, it's all I want to do. That's all I want to do, John D. No, we need to have more people. A, it's inside the bubble. And B, we need to encourage the people that are working on the problems to focus on the things that matter.

2:36:15And that's actually making parts. We need more factories. We need more metal moving. Moving metal is the problem right now. There's a lot of people building tools for factories. there aren't that many factories yeah yeah so if you want to join build a factory make parts move you know do real stuff in the supply chain i'm not talking like screwdriver factories bolting on imported components that's the vast majority of you know assembly in america is like what's left so we don't need that we need people working on hard problems um we also need you to a thousand x we need you to a thousand x range view you said earlier we need a thousand range views but why don't why don't you just be copy and paste your your shell working as hard as i can yeah what is Well, what can you tell us about the state of the art in manufacturing?

2:36:58I know there's additive manufacturing, subtractive manufacturing, there's CNC. We've talked to people that are 3D printing metal now. There's casting. What are you excited about? What are you focused on? Where do you think there's still pockets of opportunity? Yeah, great question. So we are working on casting, and we are trying to give casting at CNC moment. Yeah, and explain casting for those who don't know. So casting is liquefying molten metal, pouring it into a mold, it's solidifying, and you're getting the part that has that shape. And almost everything is cast. Even CNC shops buy castings.

2:37:32Today, castings have eroded so much that machine shops are just buying cast blocks, and then they waste a whole bunch of time cutting a part into its final part. A lot of chiseling. But if you get really good at casting, you actually just cast 99 % of the way and then touch the final bits up with the drill bits. So there's no one size fits all solution in manufacturing. It's one of the first things you learn. It takes like it takes like 100 humans from, you know, mining the ore out of the ground and installing the bracket on the end of the thing to actually make something happen. And there's a ton of folks, I think, for for people looking at technology, they're used to looking at manufacturing as just another sector.

2:38:10You know, there's fintech, health tech, manufacturing tech. The truth is manufacturing represents more of America's GDP than all of tech combined. And so it's huge. And so inside of manufacturing of all these sectors, and so many have just not been looked at yet or not been touched. And so we're seeing resurgence. The other thing is, you know, you maybe shouldn't finance these things exclusively with all venture capital because the risk profile just isn't the same in the factory, right? Like if my factory burns down, I'm going to still have, you know, a thousand pounds of super alloy. You know, maybe it's maybe the crate that it wasn't caught on fire, but like they're not going to move, right?

2:38:47So you should have, it's not risky. It's not a risky bet. So you shouldn't buy that stuff for that. So I think there's a whole new level of financing that's going to come in. And you see this happening with a few of these big factory companies where you're getting really smart finance deals, where you buy the technology improvements with venture capital for those returns, but the rest of the factory is financed in a different way. Yeah, that makes sense. If I were to pull a hot take out of you, based on what you just said, it sounds like potentially the American manufacturing industry has over-rotated towards subtractive manufacturing and needs to rebuild additive manufacturing or casting capability.

2:39:20Is that roughly a reasonable take? Additive and casting are not the same. Additive is like this SPAC machine that's blown up actively as we see. There are a few amazing people doing additive, but for the most part, it's missing on qualification and it's missing on real unit economics at scale, which is, as a whole, that's what America's missing, like really being able to build stuff at scale. If we had to triple the manufacturing output of the country, we'd be cooked, totally cooked. Like it would take us five years to get the factories up to do that. And all the factories that would start would be sending the money overseas because none of this equipment is made in America anymore.

2:39:52We lost the factory industry, but we also lost the factory machine tool industry. So all this stuff just goes overseas. So I wouldn't say the additive is it. I think casting is really important. A lot of these traditional forms of manufacturing are really coming back and making a big play. But we should just be encouraging everyone to make a lot of parts. Like we need so many parts and we need to get started immediately. Parts maxing. Talk about your dad. Talk about the influence there. Jason teased it a little bit, but I haven't heard the story. Yeah, yeah. He's a big, big part of my life. He's always encouraged me to be very, very honest and real about this world, which I think is really important in venture.

2:40:33And he was a maker himself. You know, his family was Pittsburgh, and he was a Midwestern family values. And he came here to work on the B1 Bone. The supersonic bomber was pretty sick. And then I ended up growing up next to where Skunk Works was founded. So Bob Hope Airport actually, the affluence, all that stuff happened there. And then it went out to Palmdale and then it became a service based industry. Lots of B2B SaaS and entertainment happened in the area and it really changed. But he always kept me centered and he's a huge influence on my life. And actually same with Jason's dad. So we bonded over that a lot.

2:41:11and they're becoming increasingly large parts of both of our lives. Can you raise like a billion and then run this ad as a Super Bowl ad? You guys want to help me? Yeah, we got to get him back on the venture training. Cameron's always very like anti-venture, but we need to run this film as a Super Bowl ad. Come on. SPAC Range View just to get the capital for a Super Bowl ad and then you can figure out how to take private. Ten years of Super Bowl ads. Run it every year. This is not going to happen overnight. Yeah, I'm in. Let's talk about it. Let's make a game plan. Fantastic. Well, thank you so much for hopping on.

2:41:48Congratulations. Congrats on the launch. Cheers. Where can people go to apply for jobs? I know that that's important right now. Rangeview.com. Scroll down careers. Rangeview.com. You heard it here. Thank you so much for hopping on. Have a great weekend. Cheers. We'll talk to you soon. And I will talk to you about bezel. You want to manufacture something? Manufacture yourself a watch on getbezel.com. your bezel concierge is available now to source you any watch on the planet seriously any watch any watch they got them all well i'm very excited for this next uh well okay so there's i was gonna i thought we had our friends over at nfm live they will be coming on in just a few minutes but we will be joined by serac or serac syriac syriac good to meet you thank you for joining the stream uh why don't you start with the introduction on yourself and the company All right.

2:42:39Well, I am Syriac from Early. Early is an early cancer treatment company. And essentially what we do is we create genetic constructs that are injected into your body. and they disperse everywhere in your body. They enter healthy cells randomly. And if you happen to have cancer cells, they will also enter those. But only if it's cancer, these genetic constructs will switch on like a light switch. And then they turn the cancer cells into little factories that are forced to make any protein of choice. In other words, you can make something that makes the cancer visible or you can make something that activates your immune system to attack and kill the cancer.

2:43:32So the whole thing is relevant because in the last 50 years, we've always tried to find some markers on cancer cells that make them detectable or druggable, right? Billions of dollars have gone into that. And yet we still have 600 ,000. Yeah, we still have 600 ,000 people dying from cancer in the US every year and 10 million globally. So something needs to change. What's the background of the company? Is the tech transfer that's come out of an academic lab? What is your background? Yeah, I'm actually not a biologist. Out of 35 people, I'm like one of two or three people who don't have that background.

2:44:15I'm an engineer. I'm a serial entrepreneur. And the idea came out of Stanford University. And it was one of the world's top people in early cancer detection who then himself sadly passed away from cancer. Wow. Including his own son died at 16 from cancer and his wife died two years after him. The whole family is wiped out. So I met him. Was that out of curiosity? Was that environmental exposure? No, no, no. It's mostly genetic. Genetic. And the mother had a genetic mutation that then got transferred to the son. And what Sam Gambier died from, the inventor of the whole thing, is unclear to this point.

2:44:58It was cancer of unknown origin. You didn't even know where the primary tumor came from. So a very tragic story. But he was committed to flipping the tables against cancer. So I don't know if you guys have, Jordi or John, whether you have anybody in your family or in your friends circle that has been affected by cancer. Yeah, of course. You know, it's just kind of crazy that we are always behind, a step behind or two steps behind. We're always trying to find the next marker that we could hook on to. So what if we could stop looking for any marker altogether? together. What if instead we could force the cancer to reveal itself and make its own therapy to kill itself?

2:45:50So what's the pathway to commercialization? Imagine you have to go through FDA approvals at some point. Yeah, we have to go through a phase one, two, three trial. Sure. And then to commercialization. And we have spent the last seven years cracking this really hard problem. You know what the biggest problem is in cancer? What's a cancer cell and what's not a cancer cell? Yeah, of course. Because, you know, different from a virus, this is your own cell that has changed just a little bit. And so differentiating that from a normal cell or from something that looks like cancer, but it's totally benign is really hard.

2:46:31And that's what we've spent so much time and energy on with AI. We're essentially producing AI results, liquefy them, put them into the body, into a cancer drug that then forces the cancer to produce its own therapy against itself. And what's the latest news with the company? Well, we just raised$44 million. Congratulations. We have the cheap work you're doing. Sounds expensive. Yeah, biotech is not cheap. So, you know, I don't know how much you know about the biotech world. It is in the biggest funding crash in the last 20 years. On both the public side, the private side. I know that the government funding is certainly at an all-time low.

2:47:22But is it across everything? Actually, you named them. The private funding is extremely low because of two reasons. high interest rates, which immediately affect a long running product like bio, takes 10 to 12 years, right? And then AI is like a vacuum cleaner for money. That makes sense. It sucks up all the money that goes to tech firms because for VC companies, many of them believe they can make a faster return by putting it into AI classic tech. Of course. But bio and AI is a great interface that is now coming to fruition. And then the pharma companies, they are concerned about tariffs. They are concerned about China catching up to the U.S.

2:48:07and they start buying ideas and drugs there. And then the government is not stepping in to flatten out the curve. And, you know, here I would actually say we really got to make a national commitment to biotech to flatten out this funding curve, because, you know, at the end of the day, would you like to be dependent on China providing the most developed life-saving drugs for cancer, for autoimmune diseases? Do we really want to depend on that? I mean, it's good if they supply them, but what if they don't one day? So we should actually have a national commitment to biotech, to make it, to retain the world leadership that the U.S.

2:48:49has had for the last 50 years. Yeah, good point. Well, thank you so much for stopping by. Have a great rest of your week. Super important work. And have a great weekend. And congratulations. We'll talk to you soon. Thank you. Talk soon. Bye-bye. Cheers. And we have some major guests in the Restream waiting room. Let me tell you about Wander first. Wander, find your happy place. Find your happy place. Book a wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24-7 concierge service. It's a vacation no but better. We're joined by creators of NFL. This is the moment you've all been waiting for.

2:49:21They're calling it the... Brothers, welcome to the show. You guys look fantastic. We got headphones on. Let's go. Can you hear us? How you doing? Yeah. Yeah. Give us some energy. Come on. Give us some energy. Welcome to the stream. What time is it in time? What time is it there? us yeah it's 5 5 5 5 50 in the morning in the morning okay so we're just waking up here here i'm gonna help you guys i'm gonna help you guys wake up uh with a little gong basically for the launch of the tvp there we go there we go let's thank you thank you so uh talk to us how's it been going uh how uh how uh how has it been running the show what inspired you obviously you know tbp inspired a little bit but but have Have you been working in media?

2:50:08What's the background story here? Yeah, give us life stories. Yeah, so both of us coming from venture capital backgrounds. We've been based in Seoul for over like four or five years. So yeah, we love this industry, you know, private market, VC tech startup, this whole industrial complex. And we thought that there could be something, you know, we could do above just, you know, pure investment and media could be the perfect complimentary medium. So, I mean, you know, anyway, we were doing our own thing, you know, like running our own blog and writing essays since a few years ago. And this guy here, Sungjung, he actually, you know, with his friends is running one of the biggest VC newsletters in Korea.

2:50:52And, you know, I've been running my own blog too. So, you know, earlier this year, we thought that, oh, you know, podcasts could be the the most optimal medium to reach the wider audience and also to reach the global markets. And we found you guys randomly on the feed. Yeah, on the feed. Oh, yeah, this is the shit. This is the. We got to benchmark. Yeah, so of course, if there's anything we want to benchmark from the US, it's not all in. It's not the Boomer Institution medium. So you can do it. So what's your guys' schedule? Have you quit the other stuff yet? Are you going all in? Or are you just putting...

2:51:35How much time are you putting up? Is it three hours a day? Do you have multiple guests? What have you taken from the show? What's working? What needs to be different to succeed in Korea? So I would say... So okay, first of all, we're running like three times a week. so we will ramp it up you gotta get those numbers up you gotta get those numbers up what are people gonna do on the other day one hour today yeah they respect to just twiddle their thumbs does the korean tech economy not function uh five 24 7 okay but we're gonna ramp it up i'm letting you know like check us out in like six months we might be running like seven days a week who knows so yeah yeah so so anyway yeah you know the the korean tech market is as vibrant as you know as the US I would say but you know like but you know we are just kind of like you know being the frontier in this like you know hold the new media and like this like you know like well in many ways we're old media old media this is just television is it talk to me about the guests do you have dream guests who's the Palmer Luckey of Korea who's the Elon Musk of Korea who do you want to get on who have you had on what what uh we have a lot of venture capitalists but then we have analysts politicians we've kind of gone all over the place uh where have you had success uh doing guest interviews or are you even doing guest interviews yet you i believe you are right so we're in the very initial phase you know so um we've only embodied a lot um so you know only a limited number of guests but so far we have some you know like uh ems engineers um also venture capitalists, also authors who just publish books.

2:53:22But, you know, we want to have, actually, we want to bring in everyone, you know, everyone VIP, you know, even the president, you know, like, you know, like even Trump, who knows? We want to bring you guys in our show. Of course, yeah, we'd be happy to. Let's do it. Make us wake up at 5 a.m., I guess. When are you guys live again? We're ready. When are you guys live? I mean, that wouldn't work time zone-wise, but it'd be more like instead of going to bed, we'll pop on your guys' show. Yeah. Are you guys live at 11 a.m. local? Oh, it's like 6 p.m. in L.A. 6 p.m. in L.A. Okay. Oh, yeah. Yeah, we can make it happen.

2:53:59Dinner time. Our wives will be very happy we're bailing on dinner. What's the OpenAI of Korea? Yeah, what's the hottest company? What's the one that everyone's focused on? SK Hynix is obviously like later stage, but who is Ascendant? Okay, OpenAI of Korea. Okay, we got a bit of strategy here. It's tough. I would definitely pick, you know, in terms of like, you know, semiconductor business, SK Hynix, Samsung, semiconductor, of course. And also we got some, you know, like Hasha Korean developers at OpenAI. So, you know, like... How do you say cracked engineer in Korean? Like, 미친 engineer. Like, you know, like, oh, 미친 engineer is like a cracked, you know.

2:54:43I can hear that. Yeah. Yeah. The team loves it. The team loves it. That's great. Anything else, Jordy? No, this is great. We're we love what you guys are doing. And happy to come on the show and help. Have fun. Have fun out there. And you guys look sharp, too. Thank you for for for make, you know, copy and pasting the suits as well. This is an info from you guys. but you know like uh as as we want to you know like make our own path and only goes you know from here on so um yeah we're gonna build our own brand uh this is nfm live nfm live love it well we support you guys enjoy thanks for coming on cheers good stuff good stuff lads lads uh they they're also pretty well positioned to cover defense tech korean uh south korea obviously has mandatory military service.

2:55:42I think most people kind of interrupts college. They kind of take a break from school, go serve, then go back. So anyways, glad that we have a contact with the Korean market. Yes, yes, definitely. Last post, close it out from Andrew Reid. He said, these shoes have gotten in obscenely high market share while accumulating zero aura. What are these? These are, I think, Velas. I've never heard of this shit. Wouldn't, definitely came, you know, kind of a... He's just taking shots left and right. I think they're Velas. Velas. Velas. Velas. I didn't have a pair of these at one point. You did? Yeah, they were very much just like shoes to me.

2:56:25Number one question on Google. Why is Velas so popular? I mean, I wonder if the business is doing well. I wonder if they figured out some sort of distribution, some arbitrage, maybe some, I don't know, are they more D2C? It does seem like a newer brand. And I certainly do. Founded in 2004. Okay. Headquartered in France. France. Interesting. And, yeah, I don't know. I mean, I think they just kind of tapped into the Common Projects sneaker era. What is Common Projects? What are you talking about? Well, that was just like the definitive white like a white shoes, right? But common, common. That was the gap of the market.

2:57:08No one thought to create a white sneaker. I mean, a white leather sneaker that was, that was not from a, no, no, no, but not sportswear. That's a key thing. Not like basketball themed streetwear, right? Something that was versatile. But, but yeah, I wouldn't, wouldn't be, wouldn't be cut dead in them. Those would be over farming you if you put them on. Yes. Yes. Got to be careful not to get aura farmed by your own clothing. It happens sometimes. It happens to the best of them. But I'm happy for Veja's success. I'm happy for their success. Overnight success. 21 years. Keep it going. Anyway, that's our show.

2:57:43Thank you so much for listening and watching and enjoying the debate. We will see you on Monday. Leave us five stars on Apple Podcasts and Spotify. I can't wait. And thank you. I cannot wait. I cannot wait for Monday. I was a little heartbroken when I figured it was Friday, and I figured out it was Friday. No, you really did think we still had. You thought today was Thursday. I thought we were a day behind, and I thought we still had more time. Well, have a fantastic weekend, folks. We love you. See you. Bye.