Anthropic's $2T IPO, Zuck's AI Manifesto, Nvidia's $500B AI Bet, Grok's Comeback

David Sachs and Evan Baker are with us this week. We got a, we got a short crew, but a long

docket. And we are going to rock at how are you doing? Gavin, nice to see you. Fantastic.

“You're still in that space X after glow. This is the biggest win of your career, correct?”

You know, it's a space X was a magical moment. There's, you know, there's only one space X. But yeah, to quote Bill Bella check, you know, it's on to Cincinnati. Got it. And there's a lot. I think I had for space X. So the space X story isn't over. Yeah. And you're your only as good as your last investment in our business. And I guess everybody's like, what now? Satch your back. How are you doing? Brother has the summer wrapping up for you. Good. I'm looking

at fortune. It's all in a Gavin. Oh, fantastic. Well, I'll, I'll try to stay up with you. And that's that on you. You missed a really great discussion we had on the all in interviews show with your guy, Ron, a man. Yeah, Ron, a manual. That's not that go. I heard actually, I got kind of spicy, you know? It got super spicy, rom came in like full guns blazing, but it's a really great interview. And we'll take anybody who wants to do the interview show was running in 2028.

Did you catch it Gavin by chance? Did you catch it? I've watched it yet. Okay, got it in the queue. Beautiful. Of course. And base of the verdict on rom is that he's kind of a throwback to the

“Clinton Obama DNC. I think if you were thinking about the DNC has no chance whatsoever in the”

Mundani, DSA, Democrat party. This is the great irony. And it's a very similar moment. I think to what happened in your Republican party where you had this sort of civil war internally. And I'm hoping the mods, the moderates have a chance here, but you know, who knows what's going to happen with these lunatic democratic socialists? We don't have to. We have to take on that on that, they're

taking real good. Yeah, I mean, I'd say his first of all, he's got incredible amount of experience

having worked for Obama, Clinton, been mayor of Chicago and ambassador to Japan. So he was awesome on foreign relations, et cetera. Yeah, and to your point, he thinks hard no on Democratic socialists and the socialist policies are in a road to nowhere. So he just went totally hard at it as hard as you would sacks. In fact, I hope he has nothing would be greater than to have a moderate or

“more moderate candidates. I think we can all agree on that. So we'll see. We'll see. It's worth checking”

out. Alright, let's get to the docket breaking news at the time of this recording for those of you don't know. We record on Thursday's published on Fridays and profit targeting a two trillion dollar IPO, according to the financial times. This would obviously break the record setting 1.75 trillion dollar IPO by SpaceX. FT reported Wednesday night that investors expect the company to go public in October, which is like six to eight weeks away. This lines up with the

poly market, the shop, sharps at poly markets, saying 80% chance of anthropic IPO in this year. And Brad Gersoner, a fifth bestie, he, he also was signaling that this would happen sooner rather than later annualized run rate. We talked about this axe a bunch. We'll end the year between a hundred and a hundred twenty billion dollars. This is an extraordinary ramp up of revenue that

we have never seen in Silicon Valley at a two trillion dollar valuation. Obviously, you all can

do the math, but it's 16 to 20 times sales, which is a fraction of what SpaceX and talent here in some of these highly valued stocks went out at. So pretty interesting revenue growth over the last year, 10x. Anthropic still has AI's top model, but grock, and we're going to get into it today, is catching up quickly and opening eye not too shabby, as well. Polymark, it says 67% chance that at the end of the year, Anthropic will have the top model, breaking on Thursday,

Anthropics and talks to buy an AI start-up called Decart for six billion. This software lowers the cost of AI training and inference by making chips more efficient. I'll stop here, Gavin. If you could comment, and I don't know if you're a shareholder in Thropic or not, so be great to get that out of the way, but what you take on just straight up the revenue ramp we're seeing here, and then what to expect from an IPO? So a few things, I'm not currently in Anthropics

sure, sure. Holder, I would say the Anthropics SpaceX Datant probably came a little too late. I don't generally invest in Elon's competitors, I don't think it's a wise course of action. Betracks and the date on was obviously Elon decided when he had so much extra compute with Colossus

Absolutely, and I think he almost probably more importantly got comfortable with Dario's morals and that Dario is a good person and like all humans, you know, to be humanist to air, so maybe he's made some mistakes in the way he's handled government relations, but he got comfortable that his morals were in the good place. Elon said they don't set off my evil detector and he has a pretty good evil detector. He famously cut his conversation

with the SPF short. So a couple of things that Anthropics, you know, the Roman numbers are exceptional.

We've really never seen anything like this. You know, I still think those moments in April and

May were some of the most extraordinary moments in the history of capitalism. And what's wild to me is that probably on the margin, Anthropics is losing share to open AI, to open source, and to rock, and they're still growing so fast, the numbers are still exceptional. So I think, you know, that's the secret. And why is that? This is like an important thing for people to understand. The pie is getting ginormous. So even if on a percentage basis Anthropics

is losing on a percentage basis, the real number, and we talked about open source being dark tokens that aren't tracked anywhere, you know, this is a major, major pie growing moment.

“That's, that's what you mean there. Yeah, that's the point. I think, yeah, I broadly celebrated”

in the month of July, which was kind of crazy to contrast with the public stock market action. Now, we have a higher resolution view of what's happening. But a few things are the Anthropics IPL listen, it's an exceptional business. They've executed really well and they haven't just executed

on the model. They're products are amazing. I always think about Eric Fisheria. I don't think

you've ever had on the pod. But, you know, I think he'd be a great guest. He's a good friend. He said, has they thought experiment nearly two years ago that he thought open AI would still in Anthropics would still have a lot of value, even if they lost at the model layer. Because the product, the harness, the user familiarity, it's all, it's all so important. And I think there's an element of truth to that. But as far as the IPL listen, first thing I would just say is

the two trillion, I am a little skeptical. We saw this with SpaceX. If you're, everybody's jacking to be lead-left, for Anthropics. And if you lose that, first thing you want to do is make whoever's lead-left look bad. So you lead to the press, and you say, hey, we're in the room, the bar is a $2 trillion IPL. If you said on a previous episode, three to four trillion.

“Absolutely, but I think that's probably where it might train. I mean, so they're sandbagging now.”

Yeah, we haven't seen the S1, you know, I do think, like if you're bringing a company out responsibly, like you do, you want to price it in such a way that you can absorb the lock-up, because you don't want to price it really high, create a lot of volatility. That's like very disconcerting for employees. You do not want anyone distracted at this moment. So I think that they'll price it smartly. Maybe that is two trillion. Maybe it is two and it trains to three.

But you just gotta remember, these leaks are always coming from the bankers who probably

lost lead-left, and they want to make lead-left look bad. So if it comes out of two trillion, it probably leads the testing the waters and the roadshow just went incredibly well. And people, they do what are this, we've never, you know, these numbers are unprecedented. So are you saying there was a child probably occurred already? Or quietly? No, definitely not. I'm saying not. If they price it at two, it means like the testing

the waters went well. The roadshow went well and they've got a lot of confidence about where it's going to trade. Sachs, in the history of Silicon Valley, you pointed out multiple times here during this podcast in 2026 that we've never seen a revenue ramp like this. Can it continue? And if it does continue, what would that say about the value of AI to corporations and enterprises where Claude is the definitive leader? Well, I think it can continue. Although it is a legitimate

question, because if you're ending the year at let's say a hundred billion dollar run rate up 10x plus year over year. And by the way, they've grown 10x year over year for the last three years. So it's growing exponentially. If that rate of growth were to continue, that hit a trillion dollars

“of ARR by end of next year. And then the question you have to ask is, well, is the tam big enough for”

that but also is there enough compute, is there enough energy? I think you start to get into physical constraints. I do think the tam is big enough. I think that demand is going to be there. There's so many new applications of AI agents are just taking off now. You saw that with a launch of

more context. So the demand for tokens is going to keep growing exponentially. I think the question is whether they can physically meet that demand and then also Gavin's point about market share. Other companies are seeing what they're doing and they're competing more effectively to take share. Remember, anthropic made this huge bet on coding. And that ended up being a very pressured bet. I don't know if it was because of ideology. They thought that was the way to get to

a cursive self improvement first. I don't know if it was because they saw cursor. That's the reason

building on top of that. Yeah, they watch cursors utilization and they said, what we're going to take that business and that's such an important note for you to make. So they've started moving into verticals where they see their own users building successfully on top of their platform.

“So that was, you know, that I think that definitely was a signal to them to get into coding.”

Nonetheless, they got into it first. They got into it very successfully. That led to a boom. We hear that open AI now. They've basically pivoted into coding. They're doing a better job without now with GP5.6. We've heard their growth rate is accelerating. They used to be growing at 3 to 4x a year. I've heard that over the past two months, that growth rate is now over 20 percent month of a month, which if you extrapolated out over 12 months would be a 10x growth rate.

So you're now seeing open AI growing as fast as anthropic having made that pivot. We can talk about whether, you know, we think SpaceX AI may be able to get there as well. But in any event, look, I think that regardless of whether anthropic is able to grow 10x next year, I think they're going to grow very fast. And then the question is just, what is the market share look like relative to their competitors? And I guess Gavin, it would be worth double clicking on two points

there. The first point is they're going to be a market for these tokens and can the growth

“keep up. In other words, is there a demand? I think all three of us are great. Yeah, sure. Of course,”

there's demand. But the next two pieces, which Sax mentioned, were energy data centers. And that is a question I want you to answer. Can they get to one trillion in a revenue and let's slow down here and actually try to do some back of the envelope math. And this is your wheelhouse.

What would it take in terms of infrastructure for them to go from $100 billion a year and revenue

and 10x it? And is that humanly possible in the next year? So a few thoughts, I think it's the right questions. First, internally andthropic is very confident. I have been told by multiple people I trust that Dario has said that inthropic might be the only private company in the world at some point. Think about that. In this vision and inthropic maximalist vision, there's inthropic and then there are governments. And that's it. So there's a lot of confidence.

I'm sure they have more advanced checkpoints than Fable, up there sleeve. They've executed really really well. I would probably take the under on them being the only private company of the world. Um, you know, it's going to be a long time before they, uh, they lay a rocket or they're, um, you know, and they deliver your lunch. I don't know. There might be other businesses in the world. The zip line might want to bring you a burrito. Uber might want to take you somewhere away.

Mom, I want to drive you home. But sure Dario. I might interpret that as a negative signal because it's so hubristic, you know. Yeah. This is getting into SBF land a little bit. Yes, I would certainly discourage Dario from saying that ever again, to anyone. So you don't, so AI Jesus should not claim that he is AI Jesus. Okay. Pride. Come with before the fall. Yes. And that will be a long fall. If they, I mean, but no, look, I have heard from other people at the company. I heard that when

they were at about 60 billion of ARR that they thought they could get to 600 billion in one year. So meaning they thought they were on that 10x ramp from the middle of this year. Now they're at over 80.

“Doesn't seem to be slowing down. So I think, look, I think this is the big question is,”

you know, how fast can they grow next year? Does it go all the way from 100 or 120 to a trillion dollars? Look, if they merely got to 4 to 500 billion, that would make them the biggest

software company. I mean, if they get to 200 billion, that's an amazing outcome. So where does that

put them versus Microsoft's office franchise? Like, we're at or Google's search franchise. Like, we're starting to become a peer to those two companies. Absolutely. It's just a great question out. It's a good question into demand and supply. So demand, you know, depending on how you count it, there's, you know, 25 to, you know, 65 trillion in knowledge work. 25 is kind of a number I've used.

banks that it was way low. So this is the time that they're growing after today before we have robotics.

“And then it's a question of, is it labor substitution or accelerating growth?”

Thus far, it really does look like it's accelerating growth. There are, you know, there are more job openings for software coders today than there were a year ago. There's more demand for coders. And that is the kind of an epicenter of the blast zone. There is some evidence that for very young people coming, you know, right out of college. Yeah. For, you know, that maybe there's, there's been a negative impact. But broadly speaking, it has to come from one of those two.

And I just think it's, you know, it's better for everyone if it comes from accelerating growth.

And these companies are now at a scale where it's going to, if it's going to come from accelerating

growth, we will start to see that in the national accounts over the next 18 months. I'm from going to, okay, you want to go to the energy park supply. Yeah. And listen, this is, this is, you know, we're kind of the rubber beats the proverbial road. Like I, um, you know,

“the people who build these data centers, you know, like the best way to understand it is go watch”

that series Landman. And it's like, you need like Billy Bob Thorntons out there, you know, permeate base in time. The permeate base and you're in the patch. You know, you're actually worried about Darkos. You know, it is, it's the tip of the spear. It's like 110 degree heat. You have to orchestrate thousands of people in these remote locations. It's not a bit, it's not a bit. It's atoms, not bits. And it's really, really hard. Now, America, we're actually really good once

we gear up for something like that. America and capitalism. We're very good at solving those problems. Everybody talks about like the ultimate constraint or these turbine blades. And, you know, they're only made in like two facilities in America and Europe and like each facility is like, you know, a giant building and there's some 40 ton press. But you know what, now they're running, you know, 24 hour shifts. They're getting, you know, this is actually the back, the mother of innovation and

nothing like capitalism will make that happen. In fact, boom, supersonic making a new jet for, you know, supersonic. Oh, he's got a deposit. Those jets. He's like, you know, what? We're going to

build a turbine business first because we have so much demand. And then Elon, I understand there was

a news report that he bought a turbine company. And he did it personally because that speaks to me that he just wanted to go fast, right? And I'm talking to that, you know, residuals for private jets are like extremely strong these days. And a big, a big part of the reason is people are taking jet jet engines off old planes and replacing them has turbines to power data centers 100% that you have seen. It's crazy. This is, this is like a big business and growing really, really fast. And then,

you know, you have caterpillar, you have commons, you have G for Nova, you have Siemens energy,

“they're all expanding capacity fast. So I think the supply question, you know, the the”

Billy Bob Thorntons here in America, you know, we're going to work with, with those companies and get these turbines on the ground. It's politics and it's regulation and the fact that Texas, you know, has kind of announced, you know, what I think is probably, like energy audit is what you're referring to governor of it announced this week. He's going to do an energy audit. Not that he's going to slow things down, not that there's a moratorium, but that everybody has to go through an

energy audit. If you BYOE, you're going to be fine. But if you don't have a solution for that and you want to tap the Texas, the great state of Texas is grid, you're going to need to maybe pass some audit because we don't want the whole grid going down here, which it does every January when things freeze up. Yeah. And it's like right now the narrative on AI is not good. It's that a data center takes all the water because someone made a mistake in a book three years ago and they were off

by a think of factor of 100,000 of the amount of water data center uses. So it's just wrong. They raise your cost of electricity, which is just wrong. They lower your cost of electricity. The most return of the shredded story about a town called Ellen Dale, where like it was a dying town, a data center got built. It's revitalized the town tax revenue is 10x. It's been the best thing that's ever happened. But nobody is telling those stories and people need to. And I think,

you know, we've discussed on the show many times the Chinese Communist Party, they do have a very active anti-AI anti-data center campaign because that's what's good for them in bad for America.

truth show set you free. Yes. Can't set you free. If nobody tells the truth. Yes. And yeah.

Yeah. I mean, the data center panic is a testament to the power of the media to create hoaxes and hysteria over literally nothing. Every single aspect of the data center story is wrong. It's a lie. Like you said, they don't use up the communities water. The water use is quite manageable. Less than a golf course. The water recirculates. It brings down electricity costs. Assuming that you have the data center stand up at some power generation because they will sell

the excess back to the grid and they pay for grid up great costs. The real reason why electricity prices are rising in blue states is because of decarbonization. And all the other, you know, green type regulations they have that make power generation more difficult. What are the other accusations? Well, they create an equation. Yeah. The noise pollution is legit. So there's nobody in their right. No, I said, put it in any one's back. Yeah. Nobody in their right is doing that.

They have a lot of data. They have a lot of data. Yeah. People did do that for a bit. If we just use common sense, yes, common sense. You just use common sense and there's no problem. The idea that you have to have a complete ban on data center construction is just silly. And the communities that are embracing them are seeing, they have better schools. They have better services because they're making tax revenue. Well, and then to your point, Sachs, when, you know, entrepreneurs get on

something where all of a sudden seeing solar batteries, nuclear and more clean energy being tapped to power these. And that demand will lower the prices of those services over time. Solar panels will get cheaper batteries will get cheaper because they're going to be scaled much faster, which is good for humanity. This is basic folks. It's very basic. The green stuff can't scale

“the short term, it's all gas powered for the new data centers. That's the only way to kind of get”

the amount of skill that you need in the next year or two. But at any event, look, I think that

this, I think that's always more like, you know, it'll be viable. But, you know, it's obviously

not as fast as popping up, not gas. Yeah, I learned to agree. I will say, you know, Elon's building a $10 billion new solar manufacturing plant in Texas. My home state. Yeah. And, you know, I think solar the world will eventually run on sunlight. But we're going to run on natural gas for a while. We have a lot of natural gas in America. It's a clean fuel. It's the greenest carbon fuel. And just this media hysteria about data centers is doing such a disservice to low-income

Americans, to small town Americans, often to minority Americans. It's just, it is, it's so good in every way in the media is doing such a disservice. But no one's taking the other side, and someone needs to take the other side and tell the truth. Yeah. Well, it's, uh, I don't know

“who's relying on the media for their facts now. But I think there's a reason why we were number”

four on the world this week is because it listen, we actually are part of this build out. We know about it. And we can explain it to you a little bit more succinctly. Noise pollution. That's an issue. Pollution of the air. That is an issue from NACS. Keep these things far away from people as sex. I'm just said, and you don't have as much of an issue. There is a minor issue. If you put these at scale in a certain location, you can raise the temperature of that valley or wherever you put

it at a couple of degrees, that's something worth monitoring. These are all absolutely manageable issues. And if you really want to get obsessed about water, please for the love of God's stop eating

almonds. Like, and maybe like, you know, the golf course doesn't have to use a billion gallons

of water every year. I will say on the demand side and on the pricing side, if you pull up this

“quick note, I have here. I think anthropics growth rate is going to slow considerably next year.”

And it's been obviously on a chair. There's no way they get to a trillion in revenue next year. I think maybe they could, you know, triple get to three or four hundred million. And the reason is watching startups and then also watching some of the large companies now embrace GLM-52. And Zuckerberg which will get to in a moment, releasing really great open source models. You just look at the pricing here of GLM-2 versus Claude Opus. And, you know, it is 90% cheaper to use these products. I'm using them

the founders I invest in are using them and increasingly corporate America is going to embrace these solutions. It's just a little bit harder to set them up and it's coming folks. And if you think it's not that corporate America is not going to embrace open source. You have not been paying attention to the last 20 years when they did exactly that. And 20 years ago, there was a big argument,

we don't want to get rug pulled or have some large tech corporation hold this hostage for their technology, which their experts at doing. So open source is the safer bet for us. And that's what's happening in corporate America today and inside of startups. This is going to be very real. This is like jumping out of your seat. Yeah, no, no, this is, this is a larger point like like for sure, it's good for corporate America. For sure, open source is good for the world.

And for sure, it's good for America. But you know, door cash posted something door cash is a podcast truth awful guy close to the AI scene. He posted something that really resonated with me. He said at the end of the day, anthropics AI in their constitution, it is wired to do what anthropics thinks his best for humanity. And let's take Elon's judgment has gold plated. And he's right, is don't be evil detector did not go off. And they're genuinely good people,

which I actually believe them to be, who are doing what they think is good for humanity. I actually

believe that the problem is like, you know, they're always unintended consequences. And the world

is chaotic and unpredictable. And I just think what's great about open source is it means that we're going to have a rich variety of AI's. We're going to have diversity of AI's. And that is a good world for humans in America. We have just about one, two or three dominant models. And that's why, by the way, you know, not to, you know, don't want to always talk about rock, but it's great.

“I think it's Elon will history will judge Elon kindly for having rock dedicated towards the pursuit”

of objective truth. Talk that book. Yeah, you made a book. The whole point Gavin, is if you made the bet, that means you used your intelligence and your savvy to pick what you think the winner is. That actually is, I think, super accurate. And I think Elon explicitly believes in open source and he believes that this is a technology that should be shared for the good of it. And in fact,

that was his first foray into this, which was backing open AI. And open AI's manifesto was

rewritten this week, topic two, by Mark Zuckerberg, quite paradoxically or ironically. And in 6,500 word essay, it's titled, The Future is for everyone the path to a positive AI future. He laid out an extremely optimistic AI worldview where he would as now open AI 2.0 Facebook, he would release open source models. He would create an agent for everybody. He would make it free. He would provide everybody in the world with their own tutor and unlimited abundance. He

has picked up the abundance crown, which Sam Waltman dropped when he went for the private company. And he says super intelligence is invention, not automation. And that AI safety should be based on the balance of power, no singular centralized intelligence. I'm assuming that you read or scan or

“got the coverage of Zuckerberg's manifesto. And do you have any thoughts on his position?”

Yeah, I mean, I read it. And I found myself nodding in agreement with much of it. I really like the point he made pretty early on where he pointed out that a lot of the doomers, and I think he was taking a shot at the effect of altress and then throw off a reset. Dario, he said, "Look, why are you guys rushing to create a future that you don't believe in?" That is so dystopian. If you think this is such a bad future where everyone's out of work,

and AI goes rogue and creates all these safety issues, why are you so excited about creating it? So I think he does point out a fundamental contradiction. Now, there is an answer to that question, which is, actually, there's two answers. One is, they could be trying to create a future that don't believe in for, let's call it, mercenary reasons. It could be lucrative. Although I don't think

“that's the real reason, I think most of those guys are missionaries. And what they believe is that”

that future is dangerous and only under there in light and control, and humanity be protected. It's right out of the vision of the anointed, which is a book Thomas Soul wrote 30 years ago, where intellectuals throughout history have thought that if they're maximally empowered,

then they can engineer society in a more benevolent direction. And this is always backfired.

It's always led to not just empty or broken promises, but also it becomes an excuse for totalitarian schemes and state power. And actually Zuckerberg goes on to say something that I think gets at this. So right after he kind of made the point about why you rushing to build a future that you don't believe in. You don't want. He says the notion that AI is so dangerous that the

hoping that an absolute power will benevolently provide for humanity, if sufficiently

“enlightened, has not led to safer positive outcomes. So I think the point he's getting out here is that”

a major frame on the whole AI debate. It's not just about open or close. It's also about centralized versus decentralized. And whether you think a centralized outcome is the right outcome or a decentralized outcome, I'm on the side of decentralized. I mean, how could you not be on the side of decentralized? I mean, it's like the most obvious. You're not giving it ever. The EA types are not and by the way, they're just traditional. Well, I experienced this when I got to Washington,

and, you know, all the former Biden people had just moved over to the Therapy's government affairs. I also dealt with think tank people who are part of this like click. And their their frame on AI was that it was inherently dangerous and that we had to centralize control over it. In the government, there should be, you know, just two or three companies and they should essentially work together. It should be made into a cartel. Remember, you know, Mark and Jason had a meeting with those Biden

officials. Yeah, they don't bother. Don't bother. Yeah, no. They dispute that characterization. Maybe they didn't use those words exactly. But I do believe that Mark was correct in his interpretation of what he heard because I heard similar things. And they really believe that the way to control what they essentially thought as of being maligned or at least very dangerous was.

First, you limited all to the United States. So you don't export the chips. You don't

export the models. It's basically you retain total control over it in the U.S., which frankly is a pipe dream because the rest of the world's going to get AI. The idea that you could-- But that was sort of part number one. And then part number two was you form like an atomic energy commission or something like that to cartelize the industry. And then you have a deeply embedded with the government. You effectively have a merger of a sort of corporate and state power.

“So it was this extremely centralized vision of the future. I think they still believe in that”

some degree. Fairly Zuckerberg listens to the oil and podcasts. And clearly, I think we have a seat open next week. Mark Zuckerberg, I think somebody reached out to them. Come on the pod next week. Thursdays will take about 10-11 a.m. your time, whether you're in Hawaii or in Tahoe, we will get a starling to you and you can do it from your e-foil guaranteed. But we can't have more. But I think that's the thing that's-- Let me get Gavin in front of you. Well, they just

just so just to wrap up though. I think where Zuckerberg goes with this that I agree is we want maximum empowerment of the individual. That's the way to solve this problem. We want decentralized outcomes. We want open models like you're saying J. Cal, we want data sovereignty. Look, there can also be these proprietary frontier models from anthropic and open-out. But we want to

“create a decentralized empowering outcome for individuals. And I think that's the side that Zucker's on.”

And I very much agree with that. Gavin, I assume you read it. Yeah. Or did you just get the hot. You didn't read yet. You didn't have time for 6,500 words. No. If he writes nine more, he's got the average non-fiction book, which is right around 60,000, 70,000 words. So Harper Business, Hollis, Go Call, Zuckerberg, and get the other eight parts of this manifesto going. I read it. I agreed with it. And I would just supergrew everything David said. And I would

boil it down too. I think anthropic and people in the effect of altruism movement believed that this technology is too dangerous to distribute. And what Mark Zuckerberg and I think Elon and Jensen believe is that this technology is too dangerous to centralize. And history

is spoken. And when given the choice, it is always better to distribute and decentralize.

There is really no counter-example that I can think of. And just, forget has an American, but has a human. I want an AI that looks out for me. Look out for me. The individual, be the individual that's not from the individual. It's not really the individual. Yes. Yeah, my conception of what's good for America, I do not want Dario Amoday or Anthropic deciding what's in my best interests. I just fundamentally don't want that. You don't trust the

AI Jesus. I mean, I'm sorry. He seems like a great guy. You know, although it is funny, somebody said he was cursed with resting, smiling face. And it is a like, to listen to him talk about this terrible vision for humanity. Well, he's smiling happily. He's literally got that grin on while he explains to you the Terminator or scenario. And that only he can save us. And that even he doesn't know that like there's a 20% chance that he might not be able to save us all.

Gavin, I love that framing about it being too dangerous to centralize. And I think one other

think that competition will create a race to the bottom and will create a lack of safety whereas what I believe is that competition brings out the best. And so they think it brings out the worst. Now, look, there are examples of probably both. But fundamentally, they want to centralize control and have less competition. We want to decentralize and have more competition. And I think that what I want in the constitution, I have the right to bear arms. And I think

“that's that's important. I grew up in Texas. I think it is kind of like when you come out of”

defense against your any. I love to happen when you come home. I'll be back soon. I promise. Okay. But I want the right to have my own AI. I want the right to my own AI where I, you know, it's values are aligned with me. Not by the way. It's good a person as they might be. The right to bear arms is a good analogy because we do allow you to have a gun even though you might misuse it. Guns are used to like kill things, right? Whereas AI has a much more creative use and

much more salutary uses. It's beneficial. Fundamentally, it's a consumer technology that everyone's going to want to use. So, you know, if we allow you to have guns, I agree. You should be a lot of time. Let me correct you there, Sachs. Now that you're in the great state of Texas with me, guns also help you feed your family and defend you against evil forces in the world. So those are virtuous uses of a gun. Yeah, I get it. They are that self-defense, but I'm saying

you'd still use the gun to kill the use that use the gun to kill or hurt the person in self-defense.

“I get it. I think this is the delusion of Dario. If we think about it with these, you know,”

effective altruists, you can look it up folks, but they think that basically they're going to make

all the money in the world create the one company, the money printing machine, and then they're going to save all of us. It's massive delusions of grandeur that, you know, is the technology's going to diffuse anyway, this idea that you keep sitting in the bottle is absurd. But by the way, what they're treating it, I think Sachs, the way they view it is. They view this literally as superintelligence and the nuclear bomb. And if you convince yourself that you're building the

nuclear bomb and you're building the terminator that you yourself cannot control, and it's superintelligence that will make a billion terminators and a billion bombs, they literally have diluted themselves while taking P.O.D.A. or LSD at Burning Man that this is the reality. It's not the reality. You could unplug it at any time. They're suffering from delusions of grandeur, period full stop. This is not the nuclear bomb. Well, you're right about that. When I first

came into Washington, that was the dominant analogy that they and their sort of related think tanks, their people in their group had promoted this idea that AI was like a nuclear weapon and we needed

an atomic energy commission, a global one to regulate this. Total pipe dream never going to

happen, but you're right that they were using that analogy. And I think the reason why they're using that analogy is because you do not have a right to basically have a nuclear weapon to build your nuclear weapon. You have you have the right to gun, but not a nuclear weapon. So they wanted to put AI in that bucket. But as Genesis said, no individual, no consumer needs a nuclear weapon. Every consumer, every business needs AI. It's fundamentally different. The second consumer technology.

Yes, it's a consumer technology before it's a military technology. And this idea of that it's like primarily like a nuclear bomb is just kind of absurd. I mean, in fairness, not usually saying fairness, Gavin, cyber-dine industries. They also thought they were building good technologies. So science fiction has literally polluted people's brains, but we're going to have a terminator thing. I want my own terminators who like me. Okay, open source determining. Oh, but yeah,

but like what just very simply just pulling everything else like I'm an American, I'm a patriot, if we've been open source, if we let this control be centralized, we'll lose AI, we'll lose geopolitics, we'll lose everything to China. It's just that simple. So if you're an American

“patriot, you should be for the distribution democratization, decentralization, individualization”

of this technology. Hey, Jake, how many? What are your thoughts? What are your thoughts on? What are your thoughts on the essay? Well, like you, Sachs, I found myself, I found myself nodding the whole way because I think he took, he kind of like ran in front of the parade and grabbed the baton and was like, I agree with the best takes here. And the best take is open source empowering the individual. And this isn't nuclear technology. I just want to point

out two other points that I think got buried because he did try to cover a lot of ground.

The first is I want to give him credit for his view of specifically job displacement. Because

he says, hey, listen, you know, that is possible job displacement. But he says, people fear that automation will outpace individuals capability growth, leading to job displacement,

concern. But there is no rule that AI must increase automation faster than it increases individuals, capabilities or demand for new skills, recent statistics suggest. It may be more likely that individuals capability growth could match our outpace automation. I thought this is like a really good framing and is just another way of saying what, uh, Jensen said, hey, you're not going to lose your job to AI. You're going to lose it to somebody with AI. And that's the game on the field right now.

You know, every time I use this technology, three new business opportunities open up and I create two more job breaks. And people are doing five or ten times as much work if they embrace

the technology. And that that's a big if there. And if people will do it, the second thing I

thought was pretty interesting was he makes a play on having the right to index anybody's content and learn from it. The quote he says here is, all AI models are derived from human knowledge. Okay, for enough, um, pretty pretty plain vanilla there. Some have tried to frame distillation as

“harmful, but I think it's important to protect the principle that you can learn from anything you”

can observe. In other words, he's preemptively saying, I want to scan the world's data. Well, I have a message for him, which is Zuckerberg, please explain how this concept is compatible with the fact that you have sued every startup, many of which I've invested in, that has ever tried to index or use the social graph at Instagram or Facebook. They have hundreds of lawsuits where they have sued

people for trying to distill, you know, who are the top influences on Instagram, who are

who's in my social graph and they lock that whole thing down. So there's a bit of hypocrisy here that reminded me, sacks of our discussion on previous episodes with Claude ripping apart old books and just so we had the distillation debate many times. Yeah. Let me just go back to this point about there's a huge irony in the fact that Dario did not get his way in Washington for the most part during this administration, because I think if he had gotten his way if he had realized his dream

of this highly regulated AI apparatus, I don't think that company would be set up for a hugely successful IPO. Why? Because they're whole right to charge this massive premium for tokens, which shake out that's the point you were making before is you're wondering how sustainable that is because of all these open models that are coming up and are offering tokens for much less. They're whole pricing power. That premium they're able to charge is because there's six months ahead

of those open models. And that six months be eaten up in the blink of an eye if they were subject to regulatory approval. Dario himself keeps trying these blog posts recess. We did an FAA for AI. You know, along it takes the FAA to certify and approve a new model in this case for airframes, minimum of five years. I mean, you kind of want to change a table in your plane. It takes eight years. You know, along it takes the FAA to approve a new medicine years. Okay. You're going to apply

that regulatory framework to AI model releases, game of forget about it. Your six months will be gone like that. Your model will be commoditized to Gavin's point. The Chinese competitors will catch up and that's bad for the United States. It's bad for our competitiveness. It's bad for the AI race. I mean, obviously, we don't want China beating us, but aside from just the geopolitical dimension, it'd be horrible for an anthropic as a company because again, all their pricing power

depends on them remaining in the lead by six months. If they ever slip up, hold on. If they ever slip up and lose that six months, what does that do to revenue? Exactly. So now, look, I actually

“think that they're pricing power may be quite sustainable because I think people are willing to”

pay not the whole market, not the whole market, but a decent subset of the market is willing to pay

a premium for true frontier intelligence. So as long as, hey, if the top 20 percent, the top 20

percent is willing to pay 10x. They're golden, right? Like just the one I said before, it's Apple versus Android, right? Most of the market is willing to go with Android as cheaper, but there's a significant subset of the market that's willing to pay you premium for Apple because it's a better experience. Same thing, if you're a company that's in a competitive market and you want the absolute best for competitive or other reasons, you're going to pay a premium for true frontier

intelligence, but anthropic and open AI are on that hamster wheel. They have to stay in the lead in order to justify that premium. And by the way, I think they can't, and they think they can, and they think, in fact, they're lead is growing because they're on the way to recursive self-improvement. I just want to make another point about the going-direct movement. Zuckus had his Twitter account since the beginning when he tried to buy the company at ThinkD, FINKD, which was his handle

“in college, I believe. And in the last 30 or 60 days, Nick Kesh from Palo Alto, and it works”

friend of the pod, he started tweeting and doing long-form. Jensen opened at X account. He started

going direct. And I want to just point out that Zuckus previously, I think, was letting other people

“craft his message and send it to the market. And I think he has matured and decided,”

I am going to write my own missive. This missive, I believe, was written by him, probably it's been helped, but I ran it through an AI detector. It's 100% human craft in bespoke, human words. I think it's fantastic that he's now getting ahead and saying these are the potential problems in the future. And it would have been so great if he had done that with teenage girls and the impact of social media on kids and addiction with Instagram and Facebook earlier on.

I give him a lot of credit for deciding, I will go direct, I will write my essay, I will speak my

truth, and man, X is getting exceptional at these dialogues and these missives now, it's

fantastic. Yeah, so I'm propalliary everything you said, and I want to come back to a couple of things that Zuck said about the computer, about how open source actually makes the anthropic more valuable and computational efficiency of humans as aable case for humans. But what you said is like really important, if you are a public figure, if you are the CEO of a company, and you do not have your own voice on X, you are at risk. It's just that simple,

risk of unpacking. You, you ultimately, in the same department as a truth, Shows that you free, the only person who can tell someone's own individual truth is themselves in their own authentic words. And obviously Mark Zuckerberg has super voting stock,

he's never going to be thrown out of meta. But there's many CEOs who think, oh, my corporate

PR department is keeping my, be safe, they're my voice. Well, guess what, you know, maybe you retire, maybe then next, you know, doesn't like you. And you have called in front of Congress. And I do think, you know, at some point, you know, the Democrats, you know, have to have an accountability agenda. And they're going to go after everyone. And I mean, I'm not sure that's like a good message for the Democrats. But be that, has it made? If you do not have your own voice in your own brand

on X, you're at risk, I'd have your, have your own voice. Yeah. It is protection. It's power.

“I got our merch and I think it's essential. Hey, yeah, it is a super power. And I don't know about”

you, Sax, but I am loving Zuckerberg's Jeremy Strong era, much better than he, Jesse Eisenberg. He's been doing this MMA stuff. There's a video of him on like a barge or something floating, floating. What is that, a barge in Lake Tahoe? Yeah. Don't, I would be careful. I'd be careful about saying bad things about him, Jay. No, no, I'm, I'm, listen, I have to have turned over a new leaf. I am, I'm, I'm into Zucker 2. I know, I hope he likes Jay. Oh, I'll go right now. Come on,

the pod, Zuck. I want him on the Efoil with the American flag every fourth of July. And I want it like live streamed. Then if he falls, that would be or a maxing for him. If he gets back up and records again, it doesn't live. Yo, he's got to do that in Kawaii with the bull sharks. Let me see some fins chasing him. He is he is farming times a thousand. Way to go, Zuck. And like we need more of this like off base to the CEO go directly. Percent man, go to count protect yourself. All right.

Yeah, and be yourself, man, and like you're being himself, but like he's a good guy. It's all

“got folks. There's two points that I think really important. Open source makes frontier tokens”

more valuable. So like let's just say, let's, let's, let's to use an example. Let's say that, you know, in Thropec, open AI and groc, they're at like a 250 IQ or 200 IQ. Well, if you have a 250 IQ intellect, they can orchestrate these open source 150 IQ intellects. Like that's actually more that makes the 250 IQ intellect more valuable is because it can farm out past. And just in the same way, you know, we're going to use the Manhattan Project analogy. You know, every, you know,

talks, you know, talks about Richard Feynman and you know, who's the guy who ran it all? And you know, there's these 10 really smart physicists. This guy ran it, you know, who said I become death. Who's the guy ran the Manhattan Project? Come on, somebody has an operator. Yeah. You see it up at a highman. And you had 10, you know, effectively Nobel laureates. Maybe 30 of them. But they needed like the 2000, you know, merely, you know, top 10,000 in the world, physicists. So I'm having

more having more affordable intelligence. It actually makes the frontier even more valuable. And I think a very plausible outcome is one which frontier tokens are 65 to 85% of the economic

Tell me the revenue Gavin Baker of anthropic by the end of 2027. What is their 2027 revenue

if 2026 ends that exactly 100 billion? What is their 2027 revenue going on at Baker? I will take

me over. Over. I'll watch really a lot of estimates. I'm not going to take over on a trillion. Okay. I'm going to put 500 billion over or under Gavin Baker. How about this? I'm going to take me over a 500 billion. No, I'm going to take the over. Whatever the Wall Street consensus is for 27, which I don't know. I'll take a 25 to 30% over on that. Assuming that this regulation can't say, you basically going out at a limb here, saying that the underwriters are going to stand big

revenue. Okay, congratulations. You're in Gavin. Yes. Yes. Me, my answer. No, no, no, I'm not 100 or under.

“I think, I think, four to five million. You're under within this zone. Okay.”

Of, like, realistic and achievable. Can I say one other thing? Hold on. That's 100, 500 billion,

sacks. I actually was going to say four to 500 billion is exit ARR for next year seems very comfortable. So right under. Okay. Great. Two hundred. Yeah. And the only reason, you know, it's not higher is because I just, I do think that somehow you get into physical limitations at that point. Yes. Maybe not, you know, maybe there'll be enough compute. I mean, also there's competition. We all believe that they're going to hit 400 billion next year. And they're going to four x,

four x, a hundred billion, like just let it take. They'll be at 120. So I guess that, you know, implies, you know, four or more like five or six, you know, that's kind of the over under. Really is, you know, I think the over under really is 500 billion exit ARR for next year. And I think they think they'll, they'll do the over. We were talking about them at 10 billion, 10 months ago,

“10 billion to 400 billion is 40. Actually, I think they're going to think me for preventing”

Dario from shooting himself in the foot. I think they should know he literally was like, he put two guns on two ankles and he just emptied both clips and you had taken the bullets out. You, they know, you give me 1%. I actually don't think the bullets were taken out. I think you had the pointed at his temples. Oh, he didn't do that. He did, he just shot himself in the foot. This is where their hostility to open models comes from. I think is that if they're going to slow

down, they have to slow down the open models as well. Otherwise, they do get commoditized and their business goes away. However, the United States does not have jurisdiction over what happens in China.

China was not going to slow down. That was always, I think, a huge flaw in this whole conception.

These EA types thought they're going to institute global compute governance, somehow they're going to like some global agreement with China. Total pipe dream never going to happen. If we slow down, China is just going to race ahead. It was, I think, all of a sudden. I'm going to create the kind of course two point. Oh, and that didn't work. So yeah, slow your role, kid.

“Can I just say one thing that I think is also important about open source and just like why”

I think AI is going to be good for humans. It's going to be good for Americans. It's that like if we are short compute, we're talking about compute, slowing down a anthropic growth, because literally we're just, you know, we're running out of energy. We can't bring it to physics and like, you know, planetary scale limitations. And I think this is like, this is a reality. Just think about how energy efficiently we are. All of our brains to approximate our brains, you need to have a data

center that consumes the power of a million American homes, running for probably six to nine months. And then you get our brains. And then every time you want to answer a question, you need the power of like a thousand American homes, okay, to operate at the level of our minds. You know, we'll smart, we're smart, but like, and that all those figures are going to get better. But we're so energy efficient, capitalism, there, it's, there's going to be a use for the

most computationally efficient intelligences on planet Earth. And those are human intelligences. It's so well said, because if you look at what's cerebris and grock and Nvidia are up to, they're making inference 10 times, five times every year. And you're the chipmaster here, Gavin, but they'll, they'll be five to 10 times more efficient every 12 to 18 months. Then you look at the models. And by the way, congratulations, you got Zuckerberg on your ass. Go ask my space,

go ask Snapchat, what it's like to have Zuckerberg in the review mirror. That's literally the T-Rex, humming at the frontier models. He is a beast at copying, mimicking, and competing.

model in the next year. I guarantees it here on the on my take. I might take the under.

“I won't just, there's another, there's another, there's another American hero. Okay.”

Just a wing. And like, okay, you might see, you might see Nvidia at the open source. He doesn't like us talking about that. I got the back channel. He's like, we're not on the open source business. And we do have an e-motron. And we can't give you a full stack. But one of the hyperscalers, by the way, that we know Gavin, one of the hyperscalers told me they just did a nine figure double-lindy reverse, where they went from doing a front-tier model

on 100 billion dollars in infrastructure. And they're like, Bing, it's going to be open source.

Not frontier. So people are looking at this saying it's time to think. Maybe move over to some open source models. All right, listen. All in something is coming September 13th, 15th, and it lost Hengalese. We told you about the giants last week, Jensen, Satya, Jared, when, I mean, all first name club. But here we go. Steve Hilton. Run in for governor of California. He's going to come Spencer Pratt. And we talk about his failed LA run, but successful in terms of

capturing people's imagination. Abigail Schreier, author of Bad Therapy, a fantastic book, is going to be with us with a very special surprise guest. And hey, bestie Gavin. Our guy, bestie Gavin might even make an appearance. And my guy Blake Schult, CEO of Boom Super Sonic I mentioned earlier in the program. And this year we're going to turn the outside of the shrine into a festival-like experience from you. For you, a frontier tech hub featuring AI and robotics demos

and a gifting suite. The gifting suite, a dress celebrity, merch.com, has made an incredible

all-in-swag suite. For you, wellness suite with red light therapy facials and IVs. If you,

“hey, you stay out a little too late, saxy, boo. That's sometimes happens. Don't miss his important”

conversations. And by the way, we're going to announce all the DJs and parties, which is the reason freeberg does this. Go to blow your mind. The all-in-summit.com to apply today. Go ahead and play. Hey, speaking of our guy, Jensen, sixth bestie here on the pod. In video, his partnering with Goldman, BlackRock, and others to raise 500 billion in AI compute, Jensen laid out his vision in an X article. As we mentioned, Jensen is now on X titled. In video, AI factory compute is becoming an

investible asset class. The firms will establish independent financing platforms raising third-party

capital. The idea is to treat GPUs, like a financeable, income-producing asset. Like, I may be mortgage backstories, or hopefully not, with the same outcome. Here's how it works at a basic level. Instead of a company paying billions to buy chips upfront, they borrow money. They buy in video-based systems and use them to start generating revenue, i.e. renting compute. And then they can use the cash flows to pay back the loan. Nvidia's role is matchmaker, connecting customers who need

compute with lenders. Obviously GM forward have their own finance divisions, Gavin. What do you think of this announcement vis-a-vis round tripping and the hand-ringing concerns we talked about on this very podcast a year or two ago? Well, I do think what's important here is what's essentially happened is like Blackstone, TKR, these firms, Goldman Sachs, it would not have done this. They would have not have done that, CNBC, Absolute Jensen. If they did not believe that Nvidia GPU compute was a

financeable asset. And so what's really smart here is you're getting some of the smartest asset managers in the world who charge $220 for many products to essentially invalidate this market. And Nvidia's being a matchmaker and what they're basically saying is, hey, are compute because it's so flexible is going to have a long enough life that you can finance it at lower rates than

“other kinds of compute. And I think that's smart, that's good for everyone. And it is interesting”

if you look at the underlying architectures of the three what I call big Chinese open source models maybe even through a few hours or four, you know, if we have Quinn, if we have Kimmy, if we have deep sink, then we have GLM, they're actually evolving in very different ways. And that architectural variation works in Nvidia's favor and in GPU's favor because it means that you do need this more

But what what Nvidia's doing that I think is really smart is they're saying, hey, we are going to help create this market, grow this market. But what they're going to provide two very important functions. They're going to say, hey, Blackstone Goldman Sachs, KKR, Apollo, BlackRock, I'm leaving someone out and I'm so sorry, they're six of them, come to us. If you have a deal,

“you can bring it to us and we will give a residual value guarantee. And I think the way that”

that residual which will further lower the cost of enhancing these and that residual value

guarantee can then be incorporated into those companies underwriting and what that basically

means is they're saying that after three years, four years, we guarantee that these GPUs can be rented at a certain rate. And then the risk that they are bearing is the risk between that value wherever the market rate is and right now everything's going straight up. Nvidia has better telemetry than almost anyone and to the supply of demand of compute. So they can put that at a very, very smart place for their make it financeable. You're risking, you know, they're only

bearing 25% of the risk. The world's some of the world's smartest underwriters, you know, in terms of reputation. What to go wrong, Gavin? I mentioned, the mortgage back security, etc. And obviously, the lifespan is the key issue here. The different time for scholars were saying, hey, four, five, six years, Amazon and the big debate happened. But what we've seen is to your point with the open source models is they can be tweaked to run on the oldest hardware. So maybe we get year six, seven,

“eight out of these. That's what we've said that they are renting amperes at economically profitable rates”

today for 2022. So an amp here that came out in 2020 is going to have a nine year life. And I think that's what Nvidia sees. You know, it's like, old American cars, they get sent overseas like just the idea that these people go wrong. That's a great idea. Yeah, that's a great idea. In theory, just so we're, we're still many. The biggest risk is to me is not on the demand side. The biggest risk is that you get a lot of compute and you get an overbilled. And the same way that we had Dark Fiber after the

Doc Hong crash, if you had Dark GPUs, that'd be a disaster for everyone, especially if you built out your compute infrastructure, expecting a spot price of $30 to $50 a lot as, you know, Elon said that they were expecting, right? So if all of a sudden there are too many people racing to provide this compute and now there's an over supply and the market crashes, that'd be the risk factor in

“a weird way, all the political headwinds, I think, ensure against that outcome. Because it is”

so hard to build data centers for all the reason we said there's a whole more panics slash hysteria, slash hoax going on, that actually it's those political headwinds, I think, well, almost guarantee that there's not an over supply relative to the exponentially growing demand.

So in a weird way, you're protecting against that. But Jacob, could I, could I shift gears for a second?

Absolutely. Tell you what's so brilliant about what Jensen did here. There's one of the part in return for that. They get a revenue share above that floor. Who gets the revenue share above the floor? It's way in. Yeah. So they, I think the way I think the deals of work is they were willing to guarantee offtake it, you know, no, we're near $30 or $50 a lot. We're willing to guarantee offtake at a very low risk level level that with our really high resolution view of

like productive capacity and future model trends, we're comfortable with. And in return, we get some revenue share above probably a higher level. And more recently, wrote a great note. I think two days ago, Nvidia could become, and these are effectively royalties, these revenue shares, they could very quickly become a very large cloud with a capital light business. Let me tell you why I think what Jensen did was so brilliant. It's because the numbers are getting so big that

the Tam is getting constrained by the ability to finance this build out. And what he's doing is alleviating that finance constraints so that he can grow as big as the, the, the Tam actually is, right, as removing that constraint. So for just to take one example, Elon wants to add somewhere

around six to eight gigawatts next year. We know that that would cost three to $400 billion of

they would have to go out and finance that somehow. And as we talked about on our previous episode,

the simplest way to finance it would be to get seller financing from Nvidia, especially given that the payback period could be as quick as one year. So now, Jensen is creating the, you could say the line of credit using these big banks, using these big private equity shops, and he's making that available. And that's going to now benefit all of these downstream purchasers. I don't think it's circular. This is not a circular situation like Gurley's worried about this is, I think Wall Street

banks and private equity firm providing financing based on the expected cash flows that will be delivered from these GPUs. In some ways Nvidia is kind of becoming the central bank of AI. The Federal Reserve of AI. That is like a way to kind of conceptualize what they are doing. And in the same way the Federal Reserve, like a lot of monetary policy, works through private banks. Here you're going to have, and I'm probably more banks will opt into this. You have

private markets who are charging fees underwriting these deals, and Nvidia is helping to facilitate that. So I don't think it's really circular finance. Yeah, I watch that CMBC special as well. One point that really stuck with me was when the private equity guys said that this was a little bit like what they do for plain financing, where when an airline buys airplanes or able to finance it, not just based on the credit worthiness of the airline, but rather because the airplanes themselves

have value. And that makes it much easier to finance because you know that even if the airline gets

“in trouble, you're protected, right? You have asset back financing. And that's what they're basically”

doing here with GPUs. Now, in order for that to happen, Nvidia has to standardize. They have to create essentially reference designs and so forth. And so on so that it can all be standardized enough for these Wall Street guys now package it up and securitize it, turn into securities. And that's basically what they're doing, like they with mortgages. Yeah, I'll say there's two, there's a reason why I'm not worried about this build out. There's two, there's a governor, like a throttle, Gavin, if you

well, there's a governor on this, which is the physics of the real world that we talked about in building data centers. There's also dead man switch on this, which is, you know, the switch that you have to hold down to run the train. But if you have a heart attack, your hand comes off the switch, which is anthropic and open AI. These are the two biggest customers. One of them has scale back open AI. They're ambitions in this regard of their build out from like 1.4 trillion until like

but 600 billion. And then there's anthropic, which we just said, okay, they're going to go to 400

billion in revenue next year or something like that, although end the year at that run rate. If they don't need the compute or compute gets so efficient or open source models, create a headwind, whatever it is, they're going to take their hand off the buy button. And that dead men switch will then slow everything down. So we don't get a mortgage back security. Well, that could be a car crash. But actually, this is why I think it's the anthropic IPO is

really important for the market. It's getting those quarterly earnings and be able to see their numbers

“profitability. I think it'll become probably the most important signal if the entire industry has.”

Why? Because you've got all these people out there saying that AI is a bubble, this capex is not justified. There won't be an ROI. And everyone's going to be looking to anthropics quarterly earnings as the pace car, not just them. It'll be them in open AI and SpaceX. But you'd have to say that anthropic right now is the pace car. And they're going to be looking to them to see if the demand signal is there. And if there's a

hiccup or a wobble, you know, it'll show this year first. Yes. If anthropic slams on the brakes, there'll be a pile-up of companies behind it. Because

anthropic, they're making 100 billion per gigawatt. Okay. If compute, that's why they're able

to pay SpaceX, say 50 billion a gigawatt, you know, spot price for compute. That's why SpaceX

“is then able to pay 30 billion to Nvidia for chips for the buildout. That's why Nvidia is able to”

pay TSMC and Micron and SK Heinix and all the way down. It's the entire food chain. So if there is like a wobble, if somebody slams on the brakes, if the pace car slows down, the water is going to feel it, but it's still better for those numbers to come out in a quarterly basis. It's such in a vetted gap compliant way. So Gavin, as we're sort of saying here, there's a kill switch, there's a break, whatever you want to call it, is there enough space? Is there enough distance

between the cars to not have a pile-up? In other words, if Dario does slam on the brakes, if there

to say, "Okay, yeah, we're going to go 20% slower. We're going to go 30% slower." It's very simple. If he's slamming on the brakes, because there's not a demand, there will be a pile-up. Okay. But there will be a pop. There's not enough room between the cars. But if it's because of demand. Now, Dario's getting passed by SpaceX or OpenAI are on a Marisucker Burger, or in Microsoft. There's not, there will be a pile-up. But I do think the

anthropic S1 is going to be really important. And then he's going to break a lot of people's

“brains. And the reason is, I think there are a lot of macro and value investors who are very”

confidently making these prognostications about AI with the assumption that tokens are subsidized. Anthropic is generating cash. And they kind of, this fact is, I would say, kind of known in the

world. And I actually never really spoke with to Anthropic. But it just, you know, it feels like

there are enough signals. And then if you're to read the tea leaves of what has been said at public, they're generating cash. They're profitable. Open source tokens are profitable. Anthropic is profitable. Open AI, if they're not generating cash, they will be eminently SpaceX. You know, same thing. And this, when I hear these macro and value investors who are ignorant, they're very smart, but they're ignorant of the fact. And they're making an assumption that tokens are subsidized.

And it's not all going to collapse in some circular financing bonfire. They're just wrong. The overwhelming majority of tokens are profitable for everyone in the chain. I agree one.

“And I think the Anthropic S1 is kind of going to make that clear. But when I listen to these macro”

and value investors, talk about AI, it's a little bit about B saying, you know, I'm very bearish on the world economy, because oils at $500 a barrel. And you know, what if oil was at $500 a barrel, that'd be a good reason to be bearish. It's just not like they're just wrong. Like it's because they're paying to be, they're paid in some ways to be doom, scrollers, and merchants of doom. I can tell you, you know, one framing of this

that I've been working on, which is the number of people employed in the United States. Like

150 million, 160 million, what their collective salaries are, 10 trillion, 12 trillion, whatever it

winds up being. There is no world in which I don't see corporations and people in the economy spending five or 10 percent of the salaries of their employees on the equivalent tokens. In other words, somebody makes $80,000 a year on average. You will spend $8,000, 10 percent of their salary, or a minimum of $4,000 to make them more efficient. We have an analogy for this. It's SaaS software and computers on their desktop, mobile phones, etc. Just their general use of technology.

If you put those numbers together, you're looking at a trillion dollars in AI spend just in the United States. It's obviously going to happen. And if I'm wrong and it's half and it's 500 billion, well, that's kind of where these companies are trending. And that's not even talking about the

“rest of the planet. I think we're going to be fine folks.”

Alright, let's wrap up here. I get two more stories I want to get to. We'll go lightly round here. Very interesting story coming out of New Jersey and New York around Amazon. New Jersey's A.G. has sued Amazon last week. They're arguing the company is cheating basically by hiring drivers through subcontractors. This has been well-known. It's called DSP. This concept of delivery service partners is a very clever, perhaps two clever of a way for

Amazon to shield themselves according to these lawsuits that are starting to pile up. Because if an Amazon driver crashes, there is liability and it gets you out of some you know, things you might have to pay for if they were Amazon employees on Monday. New York City Mayor and friend of the pods, the Zoron, Mondami, jumped into the freight. He is throwing the support and he did one of his big grand socialists, democratic socialist videos that he's

now becoming famous for telling and demanding through municipal laws that will require

Amazon to hire the drivers themselves. Quarparations like Amazon, bill billion dollar business

models by insulating themselves from accountability through a system of exploitative subcontracting. This has been an issue for a long time. There have been tragically a number of deaths because the subcontractors are put under massive pressure and people get killed tragically when

technically employed by the DSP, Amazon claims, you know, hey, we're not the employer. So we're not on the

hook and we don't have to get into union bargaining or labor obligations. So SACs, I'm curious or take on this in terms of the overall surge in people believing in socialism now and believing that corporations are cheating on the margins. Is Amazon cheating here? Is this too clever and maybe they need to roll this back and curious your opinion because it's getting momentum and it's going to be one of the big issues in the midterms and obviously in 2020, 8.

“Well, I mean, this is a practice that's widespread. It's not focused on New York. I think Amazon's”

been using these networks of independent contractors as drivers for a while and what they say is that if you deny them the ability to use these independent contractors, it will raise delivery costs. And there was a study that showed that the average household could pay hundreds of dollars extra. If you change this, it would slow down service. It would put thousands of jobs at risk at small contractor businesses and Amazon says that it could lead them to shift operations outside

the city. Also, one thing that this DSP model does is it enables rapid scaling for peaks, so holiday surges, dense urban routing, lower costs. It's a much more flexible arrangement than if everyone was just Amazon employee. So this is how the market has evolved is. I think maybe when they started, Amazon probably was doing everything themselves and they started to decentralize it to these networks of small businesses, these contractors. It actually ends up creating more jobs.

It creates more entrepreneurship. I think these DSPs employ thousands of people in New York City.

Those jobs be threatened if you basically made them illegal. So I think this is a case where

“you should say, "Sax, where do you stand up?" I would just let freedom of contract and volunteer”

exchange prevail here and look, this market structure evolved for a reason. The workers liked it, the DSP owners liked it, Amazon liked it. These are mutually beneficial arrangements. I don't see the reason why Mme Donnie has to insert the city in the middle of this. Can you give a take? What do you want to do if I was Amazon? And I'm sure they will not do this. I would just put a surcharge. Hey, this is the Mme Donnie. This is the Zoran Mme Donnie fee

that is being opposed on you. You're loads of people use Amazon. Not just wealthy people in New York. Lots of people use Amazon. And this is the Zoran Mme Donnie fee. As a result of this, it'll advise policy. But have it as a line item in every bill.

“Because that's what it's gonna revolt in. When you compare Amazon's service to anything government”

provides, it's insane how efficient Amazon is. You order your thing and it can be there the same

date or at worst it gets delivered to you the next day. It's unbelievable how amazing Amazon's

services. It's optimized for low prices for consumers. And we're going to basically get in the middle of that and have the government get in the middle of Amazon's driver network. What city service does Mme Donnie provide that remotely is as efficient as what Amazon does that he now is going to tell them how to run their business. It's insane. If you look at what Starbucks did when Charles was running it, he gave people a job worth having. And he took pride in taking the lowest

paid people in the organization and giving them a living wage. And that living wage is somewhere around 20 bucks, 22 bucks in these cities. These DSP drivers are actually paid quite well, 18 bucks, 19 bucks, 20 bucks. But this was not created in the free market as you're sort of saying, sacks and it was just what everybody wanted. No, this was created explicitly to benefit Amazon into take the burden of these employees and put it onto the American taxpayer. And they are getting

called out on it rightfully so by New Jersey and New York. And I believe, you know, and I'm a long term Amazon customer. I've been, you know, a prime subscriber since the beginning. It would be a diminimus cost for them to make these employees full-time employees and you'd still have some DSPs to scale up and down. Sure. But this is an opportunity for them to make those frontline workers part of the Amazon family. It would cost but 25 cents per delivery in New York to move them

from this $18, $19 an hour to give them a slightly higher pay raise, maybe 21, 22 bucks and give them benefits. This is an easy thing to do and what our industry, what our industry has a crazy blind spot

to the point of it being abusive to the most vulnerable members of our society and for being against the a spread of corpse of capitalism. And this is a level of capitalism that needs to be

“self-corrected for. And I think the government's going to have very valid arguments here. I think”

it would be amazing for Amazon to get ahead of this because this will be what the Democratic

Socialists also known as Socialist Communists in my mind. This is a very valid argument that will sell with Americans who believe that this group of people is being taken advantage of and that we can easily afford to pay 25 cents more per package delivered. Yeah, it's actually right. It might add a hundred dollars. I want to have Uber do that too, then J. Cal. Absolutely, Uber has. So, Uber was basically castigated for the exact same thing using independent contractors instead of

making them full-fledged employees. It's actually make a great point about Uber and this would be the equivalent of Uber had 304,000 people representing their drivers and they had no exposure. Uber actually has massive, insuring exposure, massive lawsuits that they have to contend with for what those drivers do, says distinctly different and they've gone through this. I'm not a proponent of socialism, but I do think that there is an opportunity for Amazon, which is going to be

automating along the way to just take a little bit of a haircut on their amazing business,

but then be on the right side of history and not take their employees, benefits, unemployment, food stamps, and health insurance and give that to the public to do and the socialists are going to point this out in the next two election cycles to the point of absurdity and it's going to play. Socialism is playing. Socialism is making inroads and it's infecting people's brains and it's up to capitalists to say, you know what? We don't need to be as cutthroat and don't

need to be as clever. So that's my message as a long-term shareholder in Amazon. I have a very big position in Amazon and I keep increasing it every year. They should do the right thing here and get ahead of this so that they can say, hey, we are an incredible employer as opposed to, hey, we really are trying to hide and move these expenses around. That's my only point on it,

“not a socialist, not a cuck, not interested in, you know, messing with capitalism. I think they”

got a little too clever here. That's my only point. And I think they should do the right thing here and treat those, the most vulnerable ones you're losing in the market. What's that? No, I know why you put this on the docket so you can get on your soapbox. Well, no, I put it on the docket because it's one of the top news stories and I put it on the docket because we talk about socialism every week and we talk about all the virtues of capitalism and there are downsides to capitalism

where we can get too clever and then do a few questions. I think we spent too much time on this, but let me ask you a question. You said that you want Amazon to employ all these drivers. By the way, they do this. I think they should employ it. I know, you said you wanted a bunch to still remain with the DSPs. I think the DSPs can happen. So how do you decide which is which? I think they could proactively do that. It's a great question. Andy Jassie could proactively decide just like

“Schultz did it. I don't want to get rid of the DSPs. I think there's a compromise here,”

which is there are DSPs to scale up when there's demand during the holidays. Seems like a great idea. But I think he should get ahead of it. As soon as you acknowledge that the DSPs are better because there are more flexible working arrangements that people want. Why are you meddling in this arrangement to begin with? That's actually not true. The people who work in the DSPs, the DSPs themselves, the people who own those fragmented, very small companies that go out of business

the second they get in an accident to shield Amazon. Those employees would very much like to have

Amazon equity. They would love to get RSU's and they would love to get healthcare. Some of those drivers, they were very proud of the time. Yeah, they toggle back and forth between being a driver for Amazon, being a driver for Uber. They like the things we're working with. You're actually misinformed here. You're incorrect. These are people who are working full shifts. They're working eight to 12 hour shifts. I think it's actually 10 to 12 hour shifts. They're all these workers.

You can speak for themselves and they are organizing. And Amazon has been trying to break the organization efforts when they try to unionize. And this is a tool for breaking that by forcing them to be part of the DSP. That's the game on the field sex. Well, you're already acknowledged that you think the DSPs should stick around. So I think the portion of them should do that. And I think Andy Jassie and the team at Amazon

should get ahead of this because it's a bad look. It's not in the best interest of capitalism to be this cutthroat. I think he should do it proactively. I don't think he should be forced to do it. That's my personal belief. The same way Shalt said there's an opportunity here to make

And it's really what capitalism should start thinking about. What is our role? What is our role

in driving the move to socialism amongst young people? And this isn't an example of one of the reasons people are starting to believe in socialism. It's because they believe that companies like Amazon are cheating a little bit on the margins and maybe trying to take the expenses

“that they should incur and put them on the American taxpayer. And you know what?”

Mondami and New Jersey are going to win these lawsuits. I predicted no. Well, look, Jacal, that all sounds really nice and I want to save capitalism as much as you do and if Amazon doing that would really save capitalism then I guess I'm game for it. But I'm not sure well what we do know it will do is raise the cost of packages by about $5.20 per package and it will cost families $664 more per year and it puts something like 5,000 jobs at risk.

But there are real costs in terms of doing things the way that you're saying. When people are wearing their hat as voters, yeah, they fall for the socialism stuff. But then when they're consumers, when they're wearing their consumer hat, they just want to pay lesser packages. They will hate the fact that packages cost $5 more. And like Evan said, they should put the Mamdonani search arjun on their orders and it's not 25 cents. It's $5.

$5.20 per package. $664 per household per year in New York. That's crazy. That's a real cost. Talking about cost of living adjustment, that's a huge cost of living adjustment. Jacal has had internet issues and we're just moving on. Gavin, last issue, what did you think of Grockbot? What did you think of the releases that XAI made this week? I guess it was Grockbot and then it also it was Grock 4.6, right? And people were saying that it is close to the frontier

or at the frontier, but a lot cheaper. So I've been maintaining as of even last week that we were down to a frontier lab duopoly within Thropic and Open AI. Was I wrong about that? Is this number

“three? Is it more flexible than fluid than I thought? Yeah, I think it is. I mean, I think it's”

can we show up, show that graph of the Prado Frontier? This is pretty wild. Now, on the left, what this shows is kind of like quality or intelligence on the Ly axis and cost on the x-axis. So you want to be in the upper right quadrant and you can see or you just want to be on the outside of this and you can just see, like how disruptive Grock 4.6 is pricing. Right. So you start to have intelligence. If you move right on the x-axis, it's getting cheaper. It's going to be

okay. And the y-axis is the capability and it's getting more and more capable as you move out. Exactly. They invert the x-axis so that as you move to the top right, it's better, right? Exactly. And I mean, this is now in this is on first intervention, x-A, you know, SpaceX is, you know, almost certain, you know, they have a right to acquire first of their work with Kurshush. Maybe this is great in your own homework. Well, right here on the right, this is from Data Fricks, which is

raised money at $190 billion. This is a very real company that is very sophisticated and you can see,

“like even on this, you're well ahead of Fable 5, which you know, I think most people would,”

would kind of agree is the, you know, the gold standard. Like this is your, your higher quality, that's a slightly lower price. So I think Grock 4.6 is, you know, the numbers are the numbers, you know, on x, we put it down. People, you know, we do have to wait and see the vibes, but I think it's pretty interesting, um, DHA to, I think created Ruby on Rails, um, David Hanumer, Hansen. Yeah, he posted something really positive, base camp, base camp,

the DHA's, David Hanumer, 37 signals, great, great, 37 signals, base camp, yes. He posted something really positive. Um, you saw the Data Fricks' evaluation. You saw our more, more core evaluation. And you, so I think the early vibes are really good in these benchmark scores, are bearing out in the real world. You on has caught up in other words. And if you were to attribute why he's caught up, it would really be two reasons. Number one, he bought cursory. He's got

that team. They're a dialed in team. Number two, he reshuffled the management of X-A-I and brought in his killers from SpaceX. Yeah, Gavin, those are the two. He brought in, you know, he brought in, you know, the SpaceX Aces along with the cursor Aces and some new people. And he did that in six

short months, Gavin, never count Elon out. He's frequently late. He's never gone and he tends to

right eventually. Yeah. Absolutely. And this is still a relatively small model. It's 1.5 trillion parameter models, a larger model, grock 4.7, that should be significantly more capable, is coming out, you know, in a few short weeks. Grock thought is also seems just his important feels kind of like another open flaw moment for AI for this kind of personalization of AI of making it room democratizing AI, making the same thing that Zuckerberg said in his manifesto.

He wants to create a lot for everybody. Yeah. And that's what Claude co-work and Claude tag both two exception. Well, as well as Irmese, Pupplexi computer and a piece of advice for me, some of those or like, and I try to be very technical, but like, rock to hard cheese. Yeah, not too hard to use, but it feels much easier to use for a rock-but-a-not-coater. Much easier to use, much easier to use.

“Well, I think Claude and Irmese, you need to be... Irmese. Irmese, yes. Irmese, yes. You need to talk about it.”

I call it the "Department" there. There's just like the previous version of the video. If you've ever had that channel, it's like that. It's like, you are wives order some channel ones in a while and they break apart. It is pretty

amazing that in six months. It's quite up, but SACS, this creates attention. It's just created a little tension.

He's hosting anthropic, catching up to anthropic. What do you think about that tension here, that he's there Amazon Web Services, Elon Web Services, at the same time, is competing with him, increasing. Well, what I love about it is that he's creating these huge compute clusters, right, and that gives him the ability to train a big model, a big potentially frontier model. So that you can think of that, it's like the call option as to catch up and become a true frontier

lab. But if he fails at that, he's got the put option of just selling the compute. Yes, spot, you know, pretty attractive prices to the frontier labs. And he has the right SACS to take that compute back from anthropic. He put that clause according to reports into the anthropic, the also he could take back compute if he wants to. Right, both sides have a 90-day cancellation, which means that if the spot price of compute goes up, he benefits. If it goes down,

by the way, it could hurt him because either so I could renegotiate within 90 days, right? So basically, Elon is able to charge spot minus 90. So that's the risk. But it all goes back to, you know, we were talking about before, which is, do you think that compute will be supply constrained going into next year? And the year after and if so, that's a very advantageous dynamic for Elon because again, he's very close to charging true spot for his compute,

but he can also essentially re-rattit his own service if he's able to take the lead. Yeah. And just, I say what's interesting, sorry, I did it. So I did it rough. But I talked to a lot of investors about SpaceX, okay? Yeah. And what's interesting,

amazing to me is that everyone will have a nuanced view on Starlink. Maybe they're a skeptic,

“or maybe they're a skeptic on Starlink direct to cell. I think the plan to use kind of”

you know, these distributed Starlink effectively almost, you know, we'll call up small cells, fifth of cells is interesting. Everybody will have a nuanced view on orbital compute. Whether they're, whether they're bullish or bearers, they will have a view. They'll have a view on terrestrial compute. Very few of these investors talk about growth at all. And it is per reito dominant on a lot of measures. And we have an

existence proof that anthropic went from whatever it is, a billion to 50 billion really fast. And if anthropic is worth, you know, with two trillion per the F3 T, you know, three or four trillion, you know, according to your cell. On a previous level, I said, I thought that was a market clearing price. I didn't say that's where I thought it was worth. You know, maybe people should start to consider rock when they think about SpaceX. SpaceX has so many ways to win.

“And I think that's the higher and a bit here is. And we're obviously all talking our book here.”

The folks on this podcast are amongst the earliest investors in SpaceX.

I was part of leading a small part of leading the second round to 10 billion.

Hey, there is one thing that broke during the show that we should for sure talk about. And that's at Silver Lake, maybe buying workday, workday's up 17%. And if this is true, this is, I think, a significant moment for the stock market. You know, software has been in a desk spiral that really kind of has started, you know, that probably, you know, trough maybe three, four months ago. But it was, it was in a tough spot for 12,

15, 18 months. And the return of a private equity bid for software really changes the investing landscape. And I don't know what the potential buyers will workday are thinking. But I do know that the rise of open source and increasing competitive enough

Yeah, if you want to throw up a try to workday, you know, like a five-year chart, you can just see it.

“But a world where you have one, two or three dominant frontier models. I mean, you could just see”

the stock went from, yeah, we'll call it 300 straight down to 100, you know, really short period of time. And even with this bid, you've only recovered a little bit. But a world where philanthropic, open AI, and, you know, maybe even SpaceX are kind of the only model providers that dominate the model air. That is a hard world for software. If I were to guess why the private equity bid for software might be coming back, it's because they see what's happening with the open source.

Pretty amazing. And that is the backstop, isn't it, Sachs? We've talked about this. If

nobody in the public markets wants to own these companies and private equity sees away. We talked

“about bending spoons, I think, last week, a whole bunch. There is now, I think, I don't want”

to call them bottom feeders, but what would you call them, Gavin? Like, you know, sharp, acquires of money printing businesses that want to extract even more revenue from it. Yes, Sachs. This is a good turn of events that there is a buyer for these companies. Absolutely. I mean, what sort of, like, is saying they've been oversold? They've been oversold, yeah. And so here where they go, there must be some value in that. And

“if you use AI to run these, I think that was the thing bending spoons is doing really well. They”

get rid of 80% of the employees and then put the 20% who are left as AI first employees and they

figure out how to get all of this incredible revenue. There's your breaking news. Gavin Baker,

amazing. They tied right now. Just so you know, I looked at the metrics before we went on on today. You're now tied with Brad Gersoner in terms of ratings. You and Brad Gersoner are neck and neck and tied for fifth bestie, which means one of you will drop to sixth bestie. If this continues, and we'll see Brad Gersoner maybe on next week. So we'll see which bestie takes the fifth slot. David Sachs, great to see you. Hey, maybe we'll get a, you around later. Maybe we can

get a stake. I want to get a stake later. I got, I got Thursday night off here. I got a whole

post. Okay. All right. Let's go get a stake. This has been an amazing episode of The All In Podcast

for August 14th. I'll see you next time. Bye, bye. , I'm going to be your beef. I'm going to be your beef. I'm going to be your beef. I'm going to be my (upbeat music)