Socialists Sweep NYC, China Catches Up in Coding, AI Memory Crunch, Micron's Blowout Quarter

The all in podcast episode 278 and freeberg. He took a mental health day today after the

socialists sweep in New York City. So we invited two guests. They both said yes.

“Travis Calendick is here from Adams. How you doing, brother?”

I'm good. I'm good. Good to see you. Good to see you. Good to see you. And after a triumphant week at Starbase, the one the only everybody's favorite, Gavin Baker of a treaties, management. How are you doing, Gavin? Great, man. Thanks for having me. He's still floating on cloud nine after the SpaceX IPO. Yeah. That was a very special moment and it was a combination of you know, some kids that kids of hard work. But man to quote Bill Bellcheck on the Cincinnati.

Yeah, exactly right. Yeah. Zero zero is how the next talked about the next game in every series.

They're like, it's zero zero. We come into this as if it's like the first game of the series,

even if we're up to games or three games. But socialists have swept New York in the congressional Democratic primaries on Tuesday, New York City mayor. Montdami went three for three in the candidates, which he endorsed. And they all won their primaries. 10th district leader Brad Lander, the two-term incumbent Dan Goldman. 10th is one of New York's richest districts, includes the West Village, one of those townhouses, Wall Street, Dumbo, Cobblehill, Carrot,

Gardens, Park Slope. That's some weird geography put together there. In New York's 13, Chevalier beat a five-term incumbent, who's backed by House Speaker Hakeen Jeffries. And apparently the socialists are coming for him. 13 is one of the poorest districts, Harlem, and West Bronx, the Boogie Down Bronx. She's a 32-year-old Democrat socialist with a history of spicy remarks. New York's seventh district, Claire Valdez, one the open seat over the Handpicks successor,

being incumbent. Seven is a DSA stronghold Bushwick, Williamsburg, Long Island City Green Point, known as the Kami Corridor, a lot of hipsters and buristas with suspenders in that neighborhood. According to our partners, Pauli Market, this was a pretty big upset. The Montdami sweep chances were just 26 before election day. Yeah, that would be like the trifecta there. If you were gambling, these candidates just like Montdami did a lot better with younger college educated

and high-income folks, the folks who can afford to be socialist. And these are all safe Democratic

“seats. The DSA will very likely win. So, the DSA caucus, that's the best way you just said,”

people who can afford to be socialists. It's always the rich poors, you know, they're rich,

but they pretend to be poor. It's perfect. This is the history of our country. From the 30s, the 50s, red scare, black panthers, I mean, we'll get into it from up. But basically, if you're intelligent and you get into business, you become a capitalist. If you're super intelligent, and you're going to academia, eventually you have the luxury belief that socialism is awesome, or you're taking your chamophon that I'll go to you, Saxipo. Because I know I can see you're

chomping on something over there. You're just ready to go. Honestly, I think that we are losing the script and part of it is because we've been our own worst enemy. I'll just keep saying this that I think AI is a very good prison into this problem. I think AI is the greatest economic leveler. We'll ever find in our lifetime. I think it's the thing that can create the greatest amount of equality. I think that it can even the starting line for every single person on earth.

But we've done such a poor job in representing it, in bringing it to market, in talking about it. We've let all of our own personal trials and tribulations and insecurities and fights spill out into the open as a result Silicon Valley has lost even more credibility with the people at large. And in that vacuum, what other people can paint is a picture of how anything other than what capitalism looks like today is a better version of what they see. And this is why you're seeing

“I think a lot of these people get a lot of momentum. I think if you look at some of the key”

congressional races, they were a referendum on AI. And the good news is we were able to hold the line in some of these key places, but just barely. In Utah and in New York, there was a couple of very important races where it was essentially anthropic funded anti-AI groups, which is again insane against in some ways open AI funded pro-AI groups and the pro-AI groups one. You just explain that it's a great leveler. Can you give a couple of examples and just expand on that

briefly? How is it a great leveler? I mean, I know, but for the audience to say, you've said this a couple of weeks now, so I think unpack it a bit. The best way to explain it is, I think that

went and harvested and collected all the world's knowledge and all the world's information,

“and they made it available via search. What we figure out though 25 years later, despite the”

fact that they built a great business, is what was missing was then being able to take that knowledge and information and transform it into expertise and intelligence. And that's effectively what AI does. It takes that world's knowledge and it allows you to act upon it so that every single man will be in child has an equivalent Travis Calenic in, you know, as his co-founder, a super-founder, this brilliant person that can think through all your problems can out engineer people,

can out think people, and they sit beside you and you have that. And there is no gatekeeping that can prevent you from having them. And so now, you're only as good as your ability to direct that

energy into something productive that you value. That is an incredibly powerful thing. And instead,

we've gotten caught up in doomerism and jobs, being lost and, you know, water being consumed, all of which are lies, all of which are complete fabrications and misinformation. And these have been created in order to specifically help one small set of actors inside the AI race. And it's been fed and funded by those folks. So in in this vacuum Jason, we've allowed all these other people to paint the other version. And right now, the other version looks way more compelling than the current

version because the current version has very poor brand ambassadors. Sachs, what's your take on this? I guess some people are looking at this as the left's version of the populist takeover that trumped it over the last 10 clush years. What's your take on what we're seeing here with socialism?

And it's amazing appeal and it's winning at the election box. I think there is some truth to that.

“I mean, I think the choices of the future are going to be communism or if you want to call it”

socialism or the Democrat party or nationalism or the Republican party. I mean, that is where we're headed. Those are the two populist directions. But let's look at what these DSA candidates stand for. So let's look at what their platform is. They actually say they want to abolish this Senate. They want to abolish the partial state. That means basically police forces and prisons. They want to abolish ice and grant amnesty for all. They do not support any deportations whatsoever.

They want to replace the president and stream court with an executive and judiciary that is chosen by and subordinate to Congress, which basically now I guess this means this house. And with respect to house elections, they want to abolish the electoral college. They want to replace the two party system with a multi party democracy. And they want to expand the house representative's implement proportionate representation and rate choice voting in all elections.

So this would be a total makeover of our constitutional system. They want to free Palestine. They want public ownership of major corporations. They want to defund the Department of War. This is a very radical organization. And you would laugh at a lot of these types of proposals, but you can't really laugh at it anymore because these guys are taking over the democratic party. And you can see the democratic establishment is in complete panic right now because they have

lost control of the party to Zorim Mamdoni and his allies. So Jason like you said, I mean let's take this one race here. New York 13. You've got this ally of hockey and Jeffries. Long time and comment Congressman Espelot I guess is his name. He is the chair of the congressional Hispanic

caucus. And he was defeated by an unemployed 32 year old PhD candidate. She's never had a job.

“She's been in college for 10 years. I guess right in this PhD thesis. And I think even by”

DSA standards she might be kind of a lunatic. So she has declared that she wants to end Western civilization. She wants to eradicate Western civilization. Wait a second what? She's soaking in it. Yeah. She actually said she used the American flag as a napkin to clean her hands. She attended a rally one day after October 7 celebrating the slaughter of Israeli civilians. I mean she's very pro-Palestine but even to the point of celebrating Israeli civilian deaths. She calls white women

ugly colonizers. She's called for the complete defunding the police and abolishing all prisons and borders. Doesn't want a single deportation. Hate's the police. Openly calls them pigs or has on social media before. Calls US service members war criminals and says the US is a disgrace of a

And on and on and on. So this is basically the new democratic party. It's going to be even if the

Democrats do take the house in November and hockey and Jeffries become speaker. This is going to prove to be a huge headache for him managing all these new DSA members. Because they do not actually see the traditional establishment wing of the democratic party as an ally. They see it as an obstacle. This is the DSA co-chair Josh Block said we're using the democratic party as a ballot acts as vehicle. Oh my god. Because we share its goals. We build our own organization. Get elected

into the democratic label. Caucus with Democrats. One is useful and push our own agenda from the inside. We see the democratic establishment as an obstacle not at home. So the DSA is coming from

“the democratic party. It controls the base now. It's where all the energy is. I think this take”

over will continue. I think the DSA will gradually take over more and more of the democratic party. And all I can say to these establishment Democrats is police stupid games when stupid prizes you supported this open border policy that brought in this wave of mass migration. That is a huge part of the base of this new DSA wing. Mamdoni would not have won the mayoral election in New York if it had just been native born New Yorkers voting. It was the mass migrant vote in

New York. That's swung it to Mamdoni. It's not exclusively the DSA base. It's the migrants plus these overeducated white progressives who I say overeducated because they're more downerly mobile. They end up going to work in academia or NGOs. That kind of thing. They're hard left wing. They're kind of the Vanguard. And it's this combination of these recent college graduates

“who are kind of the organizers and this migrant movement who are really taking over the democratic”

party. But again, this all goes back to democratic party policies. They may not have intended for the staff and they may not have intended for them to lose control. But it was their open border policy. It was also the fact that they have cracked the melting pot and the policy we had for many years in America, the simulating migrants, right immigrants. Yep. That all got cracked by multiculturalism and woqueism. We don't really do that anymore. So now you've got these candidates like Chevallier

openly declaring they're not just anti-American. They're post-American. They don't have any respect for the American system. Our constitutional order, our free enterprise system. They want to introduce something in much different. And it's going to look a lot like the countries where these migrants are coming from. Yeah. So again, you know, if you import massive numbers of migrants, don't assimilate them into our system. And then you have these Marxist leaders. You're going to end

up with the American system coming to resemble the countries from which. It's really interesting. That's my question. I mentioned like how she wants to get rid of all of these, you know, delete all of these units. It's very similar to Trump's, you know, he wanted to delete a separate set of things like the IRS and USAID, Department of Education, EPA. They each use that playbook as well. Like, we're going to delete some of this stuff. Travis, you famously had the fountain head.

Trump didn't want to delete the US Constitution. No, definitely not. Travis, you used slight difference. slight difference, I agree. You didn't want to delete Western culture. I don't think he wants to delete Western culture. No, you might want to delete USAID, because it was a

festering. It was basically a front for all these. See, I hate. Yeah, you may have noticed that in South

“America, we've had seven elections where the countries have swung to the right. And I think a big”

part of the reason why might be you don't have the USAID there, conducting all these left-wing regime change operations. Payola, payola disappeared. Yeah, totally disappeared. And the incentives disappeared with it. Travis, you famously had the fountain head and ran a novel as sure Twitter avatar for a decade or two. No, they've been writing about it for a decade or two. This is like a six month thing where I would read a book and then rotate it my avatar. Yeah, yeah, it Hamilton for a while.

I had enters game for a while, but yeah, it became you. Yeah, having known you for a while, I think believe in the individual and their exceptionalism and trying to have a little ruggedness there, this is obviously the exact opposite. What you're taking on what's happening in these pockets, because it's not national yet, but it's definitely notable.

All right, I've got, I've got sort of two apparatus for us. Okay, first is

truth and justice is the immune system for society. When the immune system is suppressed,

mainstream media, whatever you call it, like that's an early indicator or bad things happening in

society. Okay, and it's not just like social media mainstream media, it's just everything around us. And the same on the justice side, too. If people commit crimes and there's no consequences, it's a nice early indicator. So you can kind of watch, you can watch these things and say,

“is truth winning today or is it losing? Is justice winning today or is it losing?”

And what is the trajectory? We'll tell you, are we going to get worse or are we going to get better? Right, COVID makes, and the Fauci case, now we're seeing a lot more information come out. We have a

really hard time getting the truth. And maybe we'll get justice eventually. It seems like we're

getting a little more truth five years later, but it's like a sort of, there's a lot of what you're discussing. Yeah, there's a lot packed into that, but you can unpack it. If we had a lot of time, we could unpack it, but those become the sort of atomic things that you look at. And then the other thing I'd say, and some people get a little surprise when I say this, which is Communism is in all of us. Communism is in our blood as humans. And people go, what the hell are you talking about?

You're crazy. What do you mean? Unlike, well, have you ever in your life been lazy?

And never as like yes, I've been lazy in my life before. I said, have you ever in your life wanted

something for nothing? Yeah, the difference is, do you make that a way of life? And when you have ecosystems that essentially allow you to do both of those things without consequence,

“those ecosystems get a critical mass and start taking hold. And I think that's what we're seeing.”

Well said. Yeah, I think it's well said. Gavin, I know you, I don't know you to talk too much about politics, but talk about markets, but these two things do relate, I think. So give us the economic perspective here on why this is happening, because obviously different generations have had different economic experiences. So I don't want to lead the witness here, but I have had conversations with you about this before. Yeah, well, so I do think, I was, obviously AI is,

I think going to be the defining political issue of the midterms. And for sure, the next presidential election. But I feel like what is going on with the DSA is really a fusion of two things. So the Democratic Party, I was the Democrats for most of my life. And it was the party of the working-class people that was trying to create opportunities, you know, maybe level out, quality, you know, help black Americans, help Hispanic Americans. And you know, you can agree or disagree

“with their methods, but I think those are all noble goals. And to a large extent,”

none of those are really present in the DSA. None of them. If you look at who voted for which candidate, the voting base of the DSA are relatively wealthy white liberals who are downwardly mobile. They're losing votes with working-class people. They're losing votes with poor people. They're losing votes with black Americans. They're losing votes with Hispanic Americans. And those, you know, the people that the Democratic Party, I think, for a long time tried and whether

they fail to succeed, it is up to try to represent and give a voice to. They are not of interest to the DSA. And I think the DSA is dangerous. It's tragic that we're electing profoundly anti-American candidates who, in some cases, have called for violence to eradicate America. And I just think there's a whole class of people who went to an elite school. They grew up in really nice circumstances. And instead of going into industry, they went into this kind of

giant NGO nonprofit machine. And their outcomes have been very different from people who did productive things for the world. You know, I've said on the show many times, you'll want to stand more to decarbonize the planet than every activist combined. Yeah, time's sent. Yeah, time's sent. And I think these NGOs and the fact that the government is increasingly outsourcing a lot of funding to them is a really big part of this problem.

curly effect, a mayor of Boston, you pursue policies that you know are going to be disastrous

for this, your constituents, but they drive out your rivals. And then you can give jobs, $600,000 a year jobs, run an NGO that does nothing productive to your friends at allies. And it's really organized, corruption happening at a massive scale. You know, the one thing whatever you want to say about the Trump administration, a lot of people are up and arms about this, you know, new planes, he's getting from the cars. Well, one sounds like we needed a new plane,

“but two, it's right there for you to see. I think there are tens of billions, maybe hundreds of”

billions of these payments, blowing to these NGOs. And if you look in California in New York,

it's like, I think the per capita spending on homelessness has more than doubled.

And it's all gone to NGOs and outcomes have gotten worse. And California, it's like quadrupled. And outcomes have gotten worse. So I think this is, this is dangerous. And I hope that the mainstream Democrats can find a compelling candidate because I think the reason that the DSA is increasingly ascendant is not because of their ideas. I think their ideas appear to this appeal to this very narrow subset, doubly mobile rich white people who, you know,

increasingly maybe live in, you know, quasi-agential poverty because they're not doing productive things. And maybe well, attention, but they're not doing productive things.

“And can find a compelling candidate because I think the reason they're ascendant is so”

wrong, I'm not adding. I think he is one of the most talented politicians I've ever seen in my lifetime. You know, he can give a great speech. He's good in an interview. He can tap into all of this. He's kind of a chameleon who can shift. But I think he is a singularly talented politician. And he is the reason that the DSA is ascendant. Not their ideas or not dissatisfaction with AI. But it's him. And there is no one else in the Democratic Party. I used to think AOC was

by far the most talented Democratic politician. That was the warm-up. Yeah. He was talented. Yes. Clearly. Like, they're wrong. For a plan is clearly talented. And if you combine his charisma and ability to communicate with generations, like we're now like, two of these lost generations, that feel like they're going to do worse in their parents. And if you look at housing and college debt health care, they don't believe that they can participate in the

system. They feel the systems rigged. And if somebody comes along who speaks to them and they have no conception of socialism and what happened in Germany or during the RedScare, they have no

idea of what socialism or communism is. They have this incredible wrapper. They put around this,

which is their democratic socialist. It's like, it's the coke light. It's a coke zero of socialism. It's actually just communism. They want to literally seize people's assets. They want to seize half of these companies stock. They want to seize their wealth. They just want to take from the people who have made stuff as we talked about last week. And we've done nothing to change their mind. We haven't made more houses. We haven't made college more affordable health care as a disaster,

inflation's a disaster, and starting pointless wars. Obviously, this sport of Israel is somewhere in here as part of something. Yeah. I was on making Kelly yesterday. And I had this theory that I've been kind of working through. And I'll just share it with you guys because I'd love your reaction. If you look at the scourge of socialism, if you take the rhetoric away and you actually

“look at the outcomes, there are three countries that I think have veered far toward socialism”

well before the United States, Canada, the UK, and Australia. And I think when you look at any sort of reasonable measure of their progress, it's been an unmitigated disaster. So all of the virtue signaling on social issues, all of the virtue signaling on immigration and open borders, all of the virtue signaling on climate change has left each of those three countries in some state of disrepair with enormous amounts of infighting tremendous political instability. They are all

sort of powder kinks. And there's an interesting thing that happened in each of those three countries that I think has the potential to turn the tide and it speaks to what Gavin said. Each of those three

making sure the kid doesn't get addicted to the drug too early. And when you look at somebody like

“Zoron Mamdani, I think Gavin is right. I'll go even further. He AOC, the lady that just won.”

Chivalya. Chivalya, let's just break it down. They're all good looking. They're all charismatic. They have their pulse on the the Gestalt of the moment. They know how to use social media and they are essentially curating an army. Now, if you cut the legs off by saying young people should

actually age into social media, I suspect that the most important channel of information consumption

being taken away from them actually starts to give them the opportunity and the rest of us quite honestly because we have to deal with kids who are just really stupid, causing the asking for this stuff. The chance to actually show you how a balanced diet actually allows you to be much healthier in your later life. And I think it relates to information consumption. I think you are going to see I suspect a far less radicalized youth aging into the voting roles in those three countries.

And I suspect if you start to see political stability and predictability in Canada,

the UK and Australia, you can put your finger right on this ban as the reason why

and Florida's already done it in the United States. And I think we need to deeply consider it across the rest of the United States. So social media ban is now starting at 16. And, guys, Canada has it in my country. You guys got drops? I'm a full counter to Chimoff on this one. I think we all agree social media is bad for the kids and for the adults. Like too much of that stuff is very bad. It's brain rot for real. And it's going

to be worsened cigarettes. It's all the things. But the real point of banning under 16 is so that

you can force adults to identify themselves and deenonymise themselves. So you can set up a full-scale

censorship regime which they're sort of contemplating in the UK. And what censorship is really about is not about harmful content. It's about content that the people in power don't want you to see that disagrees with them. If they agreed with them, it's not harmful. It's a stuff that doesn't agree with them. And so what they're doing is they're criminalizing disagreeing with them. And so there's a derivative of this age-based stock age gaining that which is really about the adults,

not the kids. That is the downside to it. Gavin, you want to attend? No, I super agree that I think that a social media ban under 16 would be great. But I think it comes at a really high cost

“outlined by Travis. And that's what's really going on. It's they want to restrict anonymous accounts”

on X, who say things that particularly the powers that be in the EU do not like. And if there's a way to do that while preserving anonymity and free speech, I'm all for it. But I think if it were not for free speech and X, like I think we'd be living in a very different world today that would be a lot worse. And just to riff on a few things that all of you have said, you know, on communism, it is communism and the great tragedy of human experiences we can't learn from the experiences

of others. And it may not matter that communism has failed utterly and ended in death and misery, wherever it has been tried in a variety of different cultures with a variety of different mechanisms and every generation may need to experiment with it. I think the saving grace and the importance of preserving free speech is that the DSA's policies and I would say in particular super progressive democratic policies are measureably bad. They lead to bad outcomes. If you care about black lives,

there's a study that is uncontested that when you elect a Republican DA all cause mortality for young black men in that city drops by 7%. That's all it takes. Yeah, you care about the environment? Well, progressives, there's so many regulations that you can't build solar,

“which is really the only thing that matters and like the world is going to run on sunlight.”

You care about education, they're approach to education of getting rid of these elite schools that allows low-income people to have a real chance, you know, getting rid of math and California, it's predominantly disadvantageous to people. It leads to terrible outcomes. And we all know what happens with crime. It turns out that there's a certain percentage of people who, you know,

who have like 10 or more convictions. Yeah, I think the specifics that is like 0.1% commits 70% of the crimes. And if you just dealt with the point 1% you effectively know crime. And so I just think

the scary thing is and I do worry for the first time, like a student of history, the United

States has been like a very stable political economic entity geographically stable for a long time and that's to its credit because we could have literally taken over the world after World War II. But man, if they get total control of some of these cities and drive out everyone who is productive, I don't know how you come back. And so that's, that is a little worrisome to me in terms of the future of the United States. Well, and by the way, I don't think it's just New York. I mean,

that race from air in LA, where was it ramen, somehow the Spencer Pratt, things to ballot harvesting

“after voting day, or I should say votes that were found in counted after election day?”

I mean, that will be a test of the DSA because they are highly organized and they have learned

how to take advantage of all these rules, these ballot harvesting rules and all these types of things. The DSA, I think they've got something like half the city council seats now in LA and they're growing. So especially in these low turnout elections and look, this was a democratic primary in New York, which is a strongly blue state. So I think maybe 17% turned out. So it's very low. But this is where the DSA really thrives and excels because they care passionately and they're

highly organized and they know how to take advantage. This is why they want all these like ranked choice voting and all these types of things. They know how to manipulate and take advantage of those kinds of systems. So I think that you're going to see this in lots of other jurisdictions.

“Wherever they're organized, I think LA will be a really interesting test. So I don't think we can just”

chalk this up to Zoran's popularity. You know, this is a national movement and we're going to see in a lot of places, but there's no question that Mam'Dani is now kind of the spiritual leader. I mean, all these people don't, they think AOC is a sellout, you know, or Bernie is a sellout. You know, they are way more radical than even those types. To add to that sacs, they did learn something from Trump, which has been a big tent. So you're seeing

Bernie, Mandami, Rokana, they're all kind of like, yeah, we're different, but there's enough room in this tent. Well, what's happening is that these sort of more established progressive leaders, they want to tap into this energy and even the establishment wing of the Democratic Party is now bending the knee. And so what you're going to see is regardless of how many DSA candidates actually get elected. The rest of the party is now responding to this and they're

going to bend, they're going to blow in this direction because they don't want to get challenged in a primary. Let me think about this. You had three major congressional races where the Mam'Dani candidate, one, two of them unseated, you know, really strong incumbents. These were big upsets. So you got to think now that every congressional race and a pretty blue district, those members are now going to have to take into account that they could get primary. And they're going to have

to tilt their voting and their views and their rhetoric in the DSA direction because they don't want to have happened to them, what just happened to Dan Goldman in the New York 10th district. And just to make one last point on that. So Jake, I'll you mention the the Israel issue.

“And I actually think that is a hugely important and salient issue now in the Democratic Party”

in Democratic primaries. Obviously, saw that is part of the DSA platform. One of the legs is free Palestine. This defeat of Dan Goldman, two-time congressmen. He led the impeachment effort against Trump. He had all the right progressive credentials. He checked the box and all the left wing policies. He was on the right cable news channels all the time. No one expected him to lose. He lost a brand lander. Really, just over this issue of Israel. Dan Goldman is

very pro-Israel. He basically defended Israel's actions over the past few years, whereas

lander who, like Goldman, is also Jewish. So this was again, you know, white Jewish congressmen against white Jewish long time New York politician. So on paper, they're very similar. It was just in this issue of Israel that where they disagreed. And lander went to a mosque in order to denounce what he called the genocide of Gaza. So this was really as close as you can get to a straight up vote on that one issue in this primary and lander one pretty handily. Now, the reason for this

is if you look at polling 80% of Democrats now say they disapprove of Israel. So, you know, the approval disapproval rating. Israel used to have high approval ratings pretty much across the board. I mean,

You really can't underestimate how much of a motivator this is for young Democrats. They believe that. We say we're all over campuses. We see it. I mean, it draws people out and it has been quite polarizing just to call balls and strikes here inside the Republican Party as well. You have Tucker leaving the party over this. You have Mac and Kelly going mental over this. And you have, you know, a lot of civil war inside this administration according to the report. So this is the

let me look, I mean, I'm not taking a side in this. I'm just trying to drive what's going on.

“Absolutely. Same as me. I think the Republican Party is a little bit more mixed on this issue.”

And it really comes down to age. So if you're part of the older, more establishment Republicans, let's say you're a Fox News viewer, you still have high approval ratings for Israel. But if you're under 50, which means you're probably not watching Fox out much anymore. You're probably on to the podcast. I think that the disapproval rating for Israel is now 57%. Interest. So it really comes down to age. Young people across the board have serious problems with what Israel is doing. And then,

you know, as you get into older age groups, that's where you see a big difference between the Democratic Democrats. And to be clear, I think Trimoth, you did a wonderful job of explaining this on Mac and Kelly. There's Jewish people. There's the state of Israel. There's Israelis who live in the state of Israel who are also Jewish. And then there's BB Netanyahu. And I think there's a lot of concern in the country, who is just absolutely out of control is the consensus. I think amongst

many people across many religions and political parties. Not so we ask this whole thing, but there are a lot of parallels from what happened in 10/7 and what happened in 9/11 in a following ways. When you invade a country and you slaughter their people, it creates an enormous injury, an enormous emotional physical psychological injury. And what that country typically does is

“respond by giving the authority to the leader at that time to set the table right. And you have to”

remember, there's a lot of things that happened post 9/11 that under any other circumstance would

never have happened at the top of the list would have been the Patriot Act, which in any other

world would never have gotten past and would have seen the light of day, but not for 9/11. So there are moments where leaders are put in a position and they essentially act on behalf of their country and their people to right or wrong. I understand that. I think everybody understands it. What's happened now though is that people cannot logically disambiguate Jews, Israelis, and BB. And I think that's very unfortunate because we're at a point in time where everything gets

conflated and this thing has become this third rail issue and I find it absolutely shocking. It's completely reasonable for people to have a point of view on BB and say, hey, you know what,

“it's enough or it's gotten too far or whatever it is. And I think that there is a very”

reasonable claim to make that it's time to find different leadership, new leadership inside of Israel and have an opportunity to reset their standing on the global stage. They deserve that.

These really people are incredible. Jews are incredible. But the idea that you fold it all together

and you look at one person and then you apply it to an entire country and an entire religion is insane. May I have one thing? May I have one thing? May I have one thing? May I have one thing? May I have one thing? May I have one thing? I think there is a two-day trillion I'll be quick. One Israel has a giant PR problem. They need a young sub-thirty-fear 35-year-old American Israeli who's super fluent in English, conversant in social media and is their kind of

spokesperson to American and they need that in France and Germany and every country. And they do not have that. There was a young, I think his name, I figured his name, but there was a young Israeli who was doing a really good job, Israeli American representing Israel after October 7th and evidently

BB Netanyahu's wife didn't like him, so they can't do them. And they've never really found a

replacement and I do think this is an urgent issue for Israel because it's like they are taking body blows every second and they're not even responding. And what I think they do, what they tend to do is they'll sometimes roll out someone who's a great man or woman in Israel and is in their 60s and a hero of a war. But isn't that fluent in social media? Maybe the command to me blusher is technically precise, but there's an accent and those are great people,

but they're not great spokespersons and this is an urgent issue. As far as the antidote going back to Tomas Command, I do think a big reason Trump got elected. Many of the Democrats I know who voted for Trump, a big part of it was that during COVID, they heard what their children were

that like as part of the American educational system, just they're not the overtly anti-American

things. Listen, we've made mistakes as a country. We're not perfect. What about as good as it gets? Yeah, we need to tell that story in every grade consistently. And we can have a debate. We've done so many things wrong. Let's learn from them. But just you know, slavery was in dimming to the world apart from some countries in East Asia. Like it's not a uniquely American

“problem. And we need to tell those stories because I think a lot of kids, the reason they're so”

susceptible to the social media propaganda is they've brought out being a shame to be American, a shame to various things in their identity, and being told that America is evil. And we need to unwind that because America is awesome. And we're the only vaguely successful multicultural society on planet Earth. Yeah, the melting pot. And if you say that, Gavin, if you say the melting pot is a beautiful thing, you're going to get canceled because, oh my god, you're getting rid of people's

culture. It's like, no, no, keep your culture. And then join this culture. And we can talk about the language. Yeah. You know, my culture is, you know, my culture is no longer Laura Piano. I know that. I know you're off the train. Winning. Winning the culture of winning. I love it. That's in learning progress adventure. Do you post excellence to quote Ricky Bobby oftentimes? I'm excellent. Just sometimes it burns, but oftentimes just to warn the just to warn the

don't be Democrats who haven't been unable to get anything done. The socialists are using your party. And this guy went viral. They're just a host. Like they literally want to infect the time. Oh, yeah, good image. They want to infect the Democratic party. And then like just literally get the voting base. And this guy, Gustavo Gerdillo, I don't know if you guys saw this, he's a DSA co-chair in New York City. And he just set it out right. I was the region of the quote,

we're part of the Democratic Party caucus. But we don't agree with the way the Democratic party runs. It's apparatus. So we're trying to build our own independence by focusing on volunteer led movement. We think everyone should be able to be trained and become someone who can participate in the political process. And we don't think the Democratic Party is run that way. In terms of the agenda, there's a problem the Democratic Party. They are funded by billionaire donors. And at the

“same time, they're trying to represent the work class in our opinion. You have to choose between”

the billionaire class and the working class. They are just taking over the party. And again, back to the playbook, this worked really well for Trump. He took the Republican party over and he owned them. And they tried to get him out. They tried to get him out. But his message and his communication style was just too on point. He knew exactly what people wanted to hear. And he knew exactly how to deliver it. He is a all-time comedic performer. Like of non-commediants. He's the number one

comedian in the world. And of actual comedians. He's in the top 20. So he communicates perfectly. And that's exactly what Mondam is on. He's taken the Trump playbook. And he has applied it here. He is taking over with this communication. You guys know I'm a diehard Nick fem, my whole life cried. It was at Game 5 on the one of the finals. And then Mondam gave this speech that somebody wrote for him about the next. And I was just absolutely flabbergasted and upset that it was so great.

“He's got that Obama Trump charisma. And he is going to destroy your party from the inside out.”

Socialism is communism. And it is the road to suffering and pain as Gavin said.

It's no good. We'll come out of it. It's an amazing guy. You know, you know,

Mondam Donny is a communist and what he represents is partially evil. And yet, because he just gave a speech about the next. You love him now. No, I love the speech. That's all it takes. That's all it takes. We're screwed. That's all it takes. It's true though. If I saw the way, I mean, this guy, he's a total phony. I mean, he doesn't stop smiling. He's got this like crocodile smile all the time.

He's talking about, you know, eating you. Yeah. And it's totally fake. Absolutely. I mean, he got hit with his eyes. He was he was making nicks references. And it was the most get out of your seat standing ovation. Chira, you know, speech I've ever heard about the next. And I was infuriated. This f*** guy is such a good order. You got programs. I hate him. We have to deprogram you now. No, no, no. It was like getting like hypnotized. And I just pull

myself out. I got like pulled in. Next topic. Next topic. Yeah, sure. Oh, my God.

Greg, it's you're on first topic. I don't know you guys were going to go while in. So to speak,

topic too. Chinese open source models appear to be catching up with the US Frontier models. Let's start with a GLM 5.2 released by China Z dot AI. This is a Frontier class open source

under the MIT license. If you don't know what that is, open source licenses have very low

“print source. It's super open source. Thank you the most open source. The most open source of all open”

source. If you open it up, you can use it however you like. You can fork it. You can build your own company based on that. No regional restrictions. No API fully self hostable. No no dollars. It's just yours. It's just yours. It's just yours. It's yours. It's just yours. That's just got up. You just got a reference. You just got a reference license. That's it. Yeah, shout out the license. And you're good. Score 51 points on the artificial analysis intelligence index. That's the highest

score of any open weight model ever. Stacks up nicely next to the Frontier models. BGP T5.5 on the Frontier SWE coding benchmark. That's a software one. Trails Claude Opus 4.8 by less than 1 percentage point API usage cost obviously much cheaper 85% cheaper. In fact, then GPT 5.5 for comparable performance. Z dot AI founder told Elon Musk open weight. Fable capabilities will be here sooner than Q1227. Gavin, in other words, all this hand ringing, all of these legal restrictions,

self imposed restrictions are now completely or close to completely mood. If they're going to have a model in Q1, does this six months even matter to six months in the grand arch of AI matter or not? And what does this mean for Frontier models? I do think how good Gillin 5.2 is as challenged some of my beliefs. And there's a great post from a TPU engineer that for sure distillation has happened. There's been an immense amount of distillation. No question. Please

explain to the audience what that means. This distillation is when you have, you know, a like, you know, we all have seen videos of these Chinese iPhone phones. Just picture a farm like that, tens of thousands of phones, iPads, and computers that are asking the Claude API through masked accounts, very specific questions. And then these what's called reasoning traces are being

“harvested. Because if you're on the API, you know, you have to see every token. And those reasoning”

traces are then fed back into the model during the reinforcement learning process. And probably during the pre-trained process. And that is a way that you can get really, really close to the Frontier at a fraction of the cost. And this is for sure going on and has gone on for a long time. I do think it's a cheat sheet. It's a cheat sheet. It's a cheat sheet. It's a cheat sheet. It would be like asking Google every question you could ever imagine, every search imaginable,

getting all the results and then putting your own search and just to make it very simple. Exactly. But now that this model is so good, it is good enough to do its own RL. And, you know, the kind of cat may be out of the bag. Now, I don't think we really know how been mythosis. We don't really know how good the next token AI model is. We haven't seen the next SpaceX model. So maybe that cat opens up again. But either way, I profoundly believe

the future is composable models. And you are going to every enterprise. You're going to have a what Andre Karpotti called the Council of Elellans. You're going to have, you know, you're going to have growth. You're going to have anthropic. You're going to have open AI. Google,

you're going to have at least two of those. Outr you growx should always be one of the two

because of its dedication to the truth. And it will tell you as a business owner, politically and

“convenient truth that you need to know for your data. But you're also going to have your own”

open weights model that you are held on your data. And you're going to put those two together the frontier models in your own model. And you're going to get, you know, real paradeo dominant outcomes. And, you know, half the queries are going to be go to the open source model. Maybe 85 percent. And only the hardest ones are then maybe the all go to open source force. And only the hardest ones are then checked by the frontier model. So I think this is the future. It's

coming. And a misconception that a lot of people have is that open source models are, you know, somehow bad for AI. They're awesome for the AI infrastructure providers. They just shift economic value from the margins of the frontier labs to the infrastructure. And that's not bad for AI. That's great for them. It's great for them. It's good for them. But I do think there's still a role for these frontier models. And it may be true. To date, frontier tokens are capturing 90

percent of the economic value. And open source tokens are probably 80 percent plus of tokens

processed. And those ratios may be here to stay. But I just think composable models are the future. What does that mean? Composable model? Would a composable model where you have, if your corporation,

it? The name is called Adams. It's not super secret. It's super awesome. It's super awesome.

For your super awesome startup Adams, which man, what looks people have been calling me to say how like they've been in the, you know, they've spoken to you. And yeah, investor, the your dog is hunting with investors, Travis, fair enough, fair enough. Okay, you're going to have a router. And everywhere that somebody comes in, every task that needs to be done at your company, that router is going to send it to, you know, your, aseptede version of course, going to your

demotron. Yes. In at some point in the workflow of frontier model, Bayer may not come in

“to kind of check it, add to it. And that's what I mean by a composable model. Would you have kind”

of a, you know, kind of a symphony of models working together with kind of the frontier models being, you know, maybe the characters. But that's what I mean, what I say composable. Yeah, understood. Thank you. Sax formerly AIsar. And now running Pcast, what are your thoughts on China's ascension in open source? And we're still looking for our open source champion, obviously, you're in the US. But feel like, let me, I just say, one thing in India is the American open source

champion. Thank you. Yeah. It can release GLM 5.2 or better whenever they want. Okay. But why haven't they done that? They don't want to screw their customers too much in a conflict to be like pushing it out there too often. All of the above who knows. We'll see. Okay. Yeah. And you got to be delicate there. I see. Okay. So I'll say it not you. Jeanne does it. I mean, it's a, it's a classic channel conflict, right? You're, you don't want

to compete with your customers. And he is competing with Elon on self-driving now. And Elon's

“making his own chips. So I think these, for your model companies should think very, very carefully”

about ethics. And that creates for Nvidia on the model perspectives of open AI, which launched their jalapeno chip this week and announced it being built by, believe, Broadcom. And they are saying, hey, FU to Jensen and Nvidia and they already were full contact with him. Don't be surprised. If Nvidia says, you know what? We kind of like the area you're operating in. Now that you're going to make chips and maybe open AI sells those chips to other people, don't be surprised. If

Nvidia starts an open AI competitor, you're hurting your first on all in. Sax, did you want to jump in there?

Sure. I mean, look, I think that China has been good at open source for a while here. There's nothing new about that. But there are a few things that are significant about JLM 5.2. So the first one is it is now, like you said, the best open weight model for coding, software engineering, and long context agent work. And you gave a couple of the sweet bench scores. I mean, it was just a tick below. Opus 4.8 and it was right up there with GPT 5.5. So if you compare this to,

again, the city of the are the frontier models for an anthropic and open AI,

“it is right there with the previous model. But you have to remember now that the current model”

fable for anthropic and 5.6 for open AI is now in a little bit of a purgatory because of all the

reasons we covered last week. And now look, I like I said last week, I ultimately blame Dario

in the way he communicated and the way that he primed officials to be on a hair trigger with respect to these models. And when the government got a credible report about a jail break from, you know, one of the anthropic's most trusted partners, you're going to say roll that back. But that is the situation we're in right now is that Fable has been rolled back and GPT 5.6 is trying to navigate these new approval hoops. So we now have a Chinese openweight model that is as good as the

currently available models from open AI and anthropic. And look, this is a point of making really since I joined the administration is that we are in a very competitive situation with China. I've been saying this from the beginning. Our whole AI strategy from the gecko was about winning this AI race, defining it as a race as being globally competitive. And we cannot afford to do things unnecessarily that slow our companies down. Do you think Dario got exactly what he wanted?

It seems to me there's some chances this has been a very calculated strategy to provoke the US government into doing what they just did. And this is what he wants. He has a regulatory

distill it for himself. Do you think this is what they wanted? I think that on a certain level

“it is what they wanted because they've been advocating to have a federal regulator, basically a new”

agency. In fact, Dario posted a blog just a few weeks ago saying he wants an FAA for AI. They wanted government approval, a government approval process for AI models. And so in a sense, they've gotten exactly what they wanted. Now that being said, I don't think they're happy about the fact that Fabel has been rolled back. So in a sense, you could say that Dario got hoisted on his own petard here or it could be an FAA-FO situation. But look, my view on it is we should not reward

Dario by giving him exactly what he's always craved, which is some sort of labor and theme

government approval process that does reward regulatory capture. So I hope that very soon now I do think that as long as inthropic has resolved the jailbreak issue, then I do think they should be allowed to come back to market. And similarly for open AI, I don't think we should be delaying them unnecessarily. We do not have months to give away in this race. And let me just say one other thing, which again, it's something I've been saying for months, which is with respect to risks

“like cyber, it is undoubtedly a risk. But what is the response that the only thing you can do”

is go out and find all the vulnerabilities first yourself, the White Hats, have the White Hats find all the vulnerabilities, and do a big upgrade cycle, roll out the patches before they can be

exploited. The reality is that if you just clamp down in a way that doesn't even allow these models

to be used, the Chinese are going to have these capabilities imminently anyway. You know, they're ready at open 4.8 level. And the founder of Z dot AI, he said that before Q1, they'll have fable level capability. I believe them because look, the Chinese have been, I'd say nine months behind our models plus or minus three months, depending on capability. But it's when they know there's been a breakthrough around something like cyber, they can deploy more resources against

particular problem and catch up faster. So the word, like I said, we're on a shock clock here. I've been saying for months that we're on a shock clock, we have to do smart things. We can't to slow everything down because that will not slow down the Chinese are not under our jurisdiction.

We have to basically get these tools in the hands of our cybersecurity industry. They're the

force multiplier. They're the enabler. We have to basically go out and do this big upgrade cycle quickly because we only have a few months left. There are six months behind on the model and there are 24 months behind on the silicon yet there are only a few months behind in total. So what game are we playing? This is insane. We are going to lose if we keep doing this stuff to ourselves. So they make a point about that. So on the silicon, there's been a huge push in China by the

government to push their AI labs to develop and train on Huawei chips. And look, you can take these claims for the grain of salt. Maybe they're not true, but it was claimed that deep seek V4 was trained on Huawei chips. And now Z dot AI, they are saying that the GLM-5 family was trained entirely on clusters of Huawei's send 910B chips. So now look, maybe they're lying. Maybe they smuggled in some of the video chips. But the claim is that this was all done on indigenous chips. And what I

believe is that China is engaged in a strong indigenousization push right now. They want to prop up Huawei as the national champion. They want all their companies using Huawei chips. They still need to scale some of the manufacturing, but they're going to do that pretty quickly. And then what they're going to do is they're going to take these Huawei chips and they're going to take these

“Huawei optimized models. Remember that GLM-5.2, the inference is optimized for the Huawei chips.”

Okay, we know that. And they are basically going to package these things up. They're called AI and a box. They're going to sell it at a fraction of the cost globally. Which is what they do with every technology, right? Better cheap. Exactly. Or almost as good. Yeah. And that's another thing is I've been saying since the beginning of the administration, we have to be pro export because China is going to be there within a one or two years, as I said, we're going to be kicking ourselves

because we could have the global market to ourselves. We invented reasons not to sell abroad to our friends and partners and now China is going to be there, imminently. Yeah. And with the lower price, said, when you play with this new GL, you get some really interesting responses. I asked it about the country of Taiwan was not pleased and didn't give me an answer. I asked it about Tiananmen Square. No, I answered as well. I'm using the hosted version at c.au. But when I

into an infographic and make me like a three-day agenda. It was like, hey, we don't have enough time to do that. And it said use the other model because this model is too busy. But you can go play with it at z.au. Just on a point about the censorship. So there's no question that these Chinese models have, you can say, censorship and, you know, there's political bias in there out of the box. But American companies have taken Chinese models and then essentially worked around

and basically fixed the censorship inside their own forked version. So, for example,

perplexity did this very early on with Chinese models. They showed that you could sort of put back the content on Tiananmen Square and things like that. So I think J. Cali, you're absolutely right about the censorship, but it's not a fatal problem. It's something that American companies can fix when they take an open source model and fork it and customize it. Yeah. In the hosted version,

“you're not going to get a cray answer of what agenda you should use for tourism in the great”

country of Taiwan or your visit to Tiananmen Square. All right. Let's keep moving here on the dock at Micron Smash. There are earnings. If you don't know, Micron, there are one of only three companies on Earth that make high ban with memory. These are specialized chips. They sit on top of the Nvidia GPU and their entire 2026 supply is sold out and has been for some time. SK Heinix and

Samsung also make HBM Micron Smash earnings revenue up 4x 4x year over year 9 billion to 42 billion

beat expectations by 16 percent. Big jump in guidance for Q450 billion versus 43 billion. Their stock is up 10x, shout out to Gavin in our 2025 prediction show. He gave a call on HBM makers like Micron as the best performing asset since that time. Micron up 14x. I'm not crying in my suit. You're not crying in your suit. We've got a ton of information here.

“I think this, well, just end on the Apple price increases. Everybody knows Apple has been”

really been a beneficiary of the run local models movement that I'm part of and people are buying 128 gig 256 gig MacBook Pros Mac Studios. But the gig is up apparently because now Apple, which had not passed on those costs to customers, is having to pass those increases on. So everything from, you know, the new MacBook Neo, which is there are 699 laptop, you know, kind of competing with Chromebooks is now 799 up 15, 14% and Mac Studio up 25% the costs are just

going to be very significant inflation has come to the desktop here at Thoughts Gavin on Micron and the impact on the industry and is this a temporary bottleneck or just this mean everybody has to

get into this business quickly? No, well, one, DRAM is the most important bottleneck. There's a whole

segment of people on X or a very focused on bottleneck, bottlenecks are called on the bottleneck bros, you know, they'll do some work with Claude, find some as a territory happen, he's company. The bottleneck that matters is DRAM and DRAM and HPM DRAM. This is the most important bottleneck simply because memory capacity and bandwidth are foundational to the performance of every AI model. So this is the most important bottleneck. A lot of focusing the turf app on memory because he's

needs it. It's the most important bottleneck, you know, not lasers, not capacitors, not power,

“power supplies to the manufacturers, not NAND Flash, not HDD's DRAM. And I think this bottleneck is”

going to be with us for a while and it is kind of astonishing so I think so a few thoughts like what was important about the order, the announced that they have these SCA, these supply chain agreements, that have a floor and a ceiling for prices with increasingly large group of large customers. And this covers essentially 50% of the revenue I think which is four customers. And the floor pricing in these new contracts is ahead of prior cycle peaks from a gross margin perspective. And so this is really, I think

pretty maybe end up being very transformational for the industry. Most other parts of the semiconductor supply chain have re-rated, you know, land research, you know, just the way for fabric equipment suppliers, you know, they all trade at huge premiums to DRAM relative to prior cycles and their business models of the proof. But you know, so has the industry structure and business models of DRAM because HPM DRAM is increasingly a customized chip, but as far as other people being able to do this,

looks CX and T is going public in China. They're going to, they may be the cure for applesails.

you need in these AI servers, there's three companies that can make it. It's really hard to do.

“This is as close to magic as science can get. And, you know, I think tariffab, tariffab,”

you know, is going to be an important part of this solution. But, you know, these these stocks still trade are cross-exually cheap relative to the rest of AI. Something I've been thinking about, memory is DRAM is probably going to be 30 to 40% of all hyperscaler cap X next year. Every hundred and billions of dollars that are spent, you know, going straight to DRAM. It's wild. But this may actually be very valuable for society because it is probably, you know, going to,

you know, inflate the cost of building, you know, update a center to the point where like,

you know, even for the hyperscalers, economics matter, we're caught in this prisoner's dilemma.

And this may give us as a society time to adapt, to adapt, you know, what our friend Brad Gershner calls the social contract. So the high iPhone prices, you know, one CXMT is coming for

“consumer grade DRAM. But, too, this may be good for AI. It may be good for us as a society.”

And making it is just really pure silicon, right? Like making memory is just incredibly refined, silicon. And that might be the free bottleneck. Yeah, making that HPM DRAM, making what in video calls so can, making LPDDR. These are the types of DRAM that are really hard to make, not consumer grade DRAM. And they are increasingly what you need in these AI data centers. semiconductor grade. Yeah. Yes. So my understanding of HPM stands for high bandwidth memory.

Again, this is part of the, you know, the GPUs that go in the data center to run AI. Is that you take the DRAM wafer or die, and you actually stack them. And so I think HPM 3 is like

8 that stack to 8 dies high. But now they're increasing to 12 and even 16. And basically stack them

and then package them all together. That's an advanced technology in and of itself. So you're seeing now like Gavin saying, there's only three companies that can do it. But also this is creating significant price pressure for the consumer electronics businesses. Apple had huge news today where they announced massive pricing creases. And again, it's because DRAM now is less available because it's just being hoovered up by all the data centers. And if you're a data center and

“you need to buy GPUs again, those chips, they're using immense amounts of DRAM because again,”

one HBM chip is using multiple like stacks of DRAM. So it's just getting slurped up and then it takes a couple years to ramp up in your capacity. So these companies are going to do that. But they could take a while. We saw that in New York member that was that micron plant that was had just broken ground and then got shut down the same day because of some crazy environmental issue. So it's not easy to ramp the stuff in the US, although micron is the one provider that's

in the US, SK Hynix and South Korea, Samsung and South Korea too. But anyway, we're going to see again, more this AI flation they're calling it. It's just another reason to hate AI is it is in this narrow area of consumer electronics where there's competition for DRAM. It is leading to price inflation now. Microsoft raised the price of the Xbox. It's coming for the switch. It's coming for the PlayStation. There's demand destruction because the price is in consumer whereas AI demand is relatively

price sensitive. David, I would modify one statement. It's hard to build in Microsoft. It's hard to build in New FAB and a deep blue state. You can build that. Why are they trying in New York? It's kind of crazy. New York gave them all these incentives. But it doesn't, no, those incentives matter. It's a little bit like solar power. You can be as pro environmental as you want. But if you can't build an install solar because regulations it doesn't matter.

So maybe that micron plant ends up getting built in my home state of Texas. The incentive game has kind of flip flopped. It's like it used to be the states. We're courting the factories and the fabs. Now it's the fabs are like which state can actually build this. We'll pay you whatever you want. It just tell us where to send the envelope. Well, we'll drop a couple of envelopes off. It's not a problem. Gavin, can you say how long it's going to take to

stand up the fab at turf? Well, I mean, it was a normal fab. It would be a two, three, three and a half year process. But you know, we we've seen what Elon has done to other construction processes. And you know, he started with some some advantages with the Intel

stand up tariffab faster than other fabs have been stood up. But this is really hard. It's really hard. It's the intersection of magic and science. He can't believe how complicated this is. So it's going to be hard. But you know, he has a he has a track record of doing, you know, what Jins said called impossible superhuman. And so we'll see. We'll see how long it turns. You know, one other a point here that I guess is it might be relevant to SpaceX AI,

“although it's don't have to limit it to this is I think there's an assumption that over time,”

it would get cheaper and easier to stand up new data centers, right? But what you're saying is actually it might be getting harder. It might be getting more expensive, right? Because there's competition for these components, the memory's game more expensive. I'm not sure that the GPUs are getting any cheaper. I guess some transformers the switch gear and the energy might be getting cheaper. And then the entitlements are getting harder. And the political situation is getting harder. There's very few

places you can even stand up new data centers. So is it the case that actually it's going to

get more more expensive to 100%. So to stand up a one giga watt data center, 35 billion dollars

to meet doctors and video semiconductors. And then it's $25 billion with power and cooling equipment. And that is clearly inflationary because a lot of that 25 billion is the human labor required to install it. So the calculation that needs to be done for orbital compute is it's 35 billion of silicon in each space and literally outer space and orbit and are ground. But if you can get the cost of launch significantly below that 25 billion dollars, then the math starts to really math.

And when Starship is reusable, it's going to cost $5 billion to put a gigawatt of compute into space. Until you drive to be crazy as people picture these pentagon sized data centers. No, it's racks in space, linked with lasers. It's kind of a virtual data center in space.

Wait, 5 billion is that 5 billion of launch costs or what? 5 billion of launch costs.

Now you're 40 billion to put the gig in space. You're at 60 billion to rest early. And the 25 billion that is power and compute is clearly inflationary. And so it may be that in three or four years, it's 70 billion versus 40 billion. And that 5 has Starship becomes rapidly reusable is likely deflationary. So this is the economics that underpin orbital compute from first principles. And then on an ongoing basis, you are,

you're maybe paying a billion dollars a year for the power to run those chips and cool.

“If I had to make a guess, I think what's going to happen is that since 2021, about 40”

percent of all data centers get contested, right? I think that number is going to go up. So Sachs is suspect that whatever forecasted energy consumption that we are looking at in AI is grossly imbalanced. There is very, very meager supply and there's effectively infinite demand. So that probably pulls forward the economic equation to want to go to space. But then again, that's going to prefer SpaceX and their compute stack and their compute

decisions over the hyperscalers and over anybody else. And so you're going to have a cost of an output token, I think, charustrily, particularly from the hyperscalers, be a little economically lopsided versus SpaceX. Once they get it to scale, now that's the key statement. Whatever is left on the ground, though, will be incredibly incredibly valuable.

“It'll be a diamond. These are diamonds. And the thing is, you have to find reasonable size.”

Right? You can't have a 10 kilowatt diamond. That's like a little pebble, no, but it cares. But if you're in the reasonable hundreds of megawatts to gigawatts, man, those are like, hope diamonds. Those are just lock them down, which I own. Travis, there was an interesting trademark filed this week. So more in the investigator investor investigator of the Tesla Plus SpaceX marriage that everyone seems to believe is going to happen.

You can say that you can give me credit for it. Of course, yes. As Chimuth has architected in his it is high perch, but this trademark way and how correct would that be? How cool would it be for

those kids going to happen? How's going to happen? It'll be incredible. And if you're lucky enough

to be an owner of both, oh, every time you know the bottom, Chimuth, every time he was the bottom, everybody can decide to be an owner of it. Jason, Jason, I'll be, I'll be making a love to myself when this happens. I'll be no different than any other Thursday. On the top and the bottom, if we could stop at the bottom, just like any other Saturday night, here's the

June, 18th, modular data center hardware for artificial intelligence computing comprised of

“network of computer servers, computer hardware for artificial intelligence processing, computer”

network hardware, electric power distribution units and cooling system sold as a unit, self-contained modular computing hardware systems for artificial intelligence workloads, yada, yada, yada. Essentially, well, just explain what this is. Well, yeah, let me just, let me just say it. Okay. So by the way, that description makes, I don't know it. I still don't know it. Essentially, what people are saying is this is going to be a giant battery pack with GPUs at the supercharge

stations, which have already been approved. That's the back channel. Chimuth, go ahead. You have a couple of issues right now to turn on compute to rest freely. So assume you have land that's relatively straightforward. Assuming you can get it's own, less straightforward. Assuming you can get power

very difficult. Then you have a very critical design decision. So all of these folks,

publish these things called the basis of design. And your, your BODs essentially tell you, here's the anthropic spec, here's the open AI spec, here's the core weave spec, here's the AWS spec, here's GCP, and you get these 15 up to upwards of 500 page documents of all these technical details. The issue that we have is, I don't know if you guys have used open the AI or anthropic recently, where you get the whole thing of like come back later, right? That

come back later is completely unacceptable. It just means that they have no compute. So in trying to find search pricing is coming. Yeah, let's go. So in trying to find the solution, what is happening is these basis of design, the restrictions, the specificity is being relaxed. And one of the

“key constraints is we've moved to an architectural model from Google and in video that is said,”

look, we have to liquid cool these racks. These are very complicated, big, girth supercomputer racks essentially. And now we're also going back and saying, you know what, maybe some of these older stuff, that's a little bit less proficient and a little bit less useful, but we can air cool them is useful. And everybody's like, yeah, you know what, we should try to use

everything that's available. In that second class, what's some very smart people are doing

are like, wow, well, here's a shipping container that you can just drop on a concrete pad, somewhere, plug in the power and let it rip. And so Jason, what you're seeing is that level of investment that's happening. So there are companies, you know, like Dell makes these racks, companies like Vertive make these modules. And I think if Tesla can make them available, folks like us for my data center project, we would be enormous buyers of these things,

because we would just literally prefab them in a warehouse, right? Get the chips prefab them, truck them to the place, train them in, turn it on, off to the races you go. You have like a 90 day build cycle, which is unheard of. So that's where these backopods are coming from. I hope it's not entirely consumed by Tesla and SpaceX internally. Well, that's the rumor is that he's going to put them at charging the supercharging network where he has a lot of land and he's got power

there already. And those are lightly used in some cases, you know, there are other requirements.

“The problem with some of these things is that you need to have certain levels of access. There are”

certain infosec requirements, or certain liquid cooling requirements that make many of the workload applications, unfesable at a place like a supercharger center where random bumble f***s are like traipsing around security guard for the doctor. So guys, I've got 500 properties with lots of energy, lots of mechanical cooling systems and lots of LNG access, or sorry, 9 LNG natural gas, sorry, already piped it. So on all the stuff I'm doing on robotics AI, physical AI,

we're literally looking at putting some of our compute into our kitchens. Compute kitchens. You're going to be able to buy small modular, let's put data center in a clip. But it doesn't matter. Like I just go by the GPUs and I'll just I just set it up at a kitchen. Right. It's not that, you know, hold on, it's not like a blinder. No, no, no, hold on, hold on. It's not that easy. Okay. Like if you guys want to build a cloud and contribute it to a pool,

you're going to have to sign up for liquidated damages. And you're not going to sign up to guys. I'm not a hyperscaler. I'm just using it for myself. Yeah, rack and stack. Oh, okay. Sure. You can use it for yourself. I'm saying the more interesting opportunity is, whenever Travis says, let's talk about the interesting stuff. No, I'm just saying, like, wow, what I thought you were going with this Travis is like, you could build a synthetic

pool and contribute it to him. Sure. And all I'm saying is to do that is a leap of things that you'd have to do that you probably don't want to do, because it veers you away from what you did. I think the security thing is the main issue around non-data center type real estate to be honest.

cooling. You have energy. Like there's a lot of things you got to do, but assuming you even

had all that, the architecture of a data center is set up like they have man traps, right? Or you go into a room that door closes behind you, that you got into with your fingerprint, then you go into the next part of it against your fingerprint, only when that door closes. Well, just, how much does one of those man traps cost? Like, why can't you put some of those in your-- Yeah, maybe you could. I'm just trying to help Travis and men. I'll try to interpret

“words you must go in a little bit, is like a mega pod that's sitting at a chart, like a public”

charging situation, because of the physical access of it. Like, there's probably some stuff you got to do if you're going to resell it, but if you're going to use it for yourself, you can use

it for yourself. The real value, I think, in the Travis example, which I find super exciting,

is if you can contribute it to a distributed training pool or a distributed inference pool that has a lower SLA, which is more of how this community-based oriented work, Jason, I think you've talked about bit tensor. I think Venice is a project. I think pluralis is another project, Travis. That's where I think it's super exciting. But the one thing I'll just throw out there, guys, the distributed training stuff. If these things are far away from each other, meaning we're not

right next to each other, they're so less efficient. Like, the efficiency drops dramatically. You want these things to be right next to each other physically. You get, like, multiple orders of men, at least in order to manage to type efficiency, maybe plus plus plus, I'd like,

it's a big deal. So, like, you could have to, we have to process these things.

“Having the jobs from one to the other is super important. And if it's on a peer-to-peer network,”

it's going to have lag. It's going to take a time. Even if it's on your own fiber, connected, like, two kilometers away, you're screwed. It's not a thing. There's a hundred percent true, but everything that cuts against training works for inference, where they respect. Well, latency is super important. And I do think, you know, a distributed inference distributed inference course, I get that. And to riff into riff on, like, what you

must said, and all of this, like, one, I mean, there is actually a startup that is trying to put four GPU units with kind of a battery on people's houses and give them a discount on their power. And then you can do inference for that neighborhood, you know, from those four GPUs, and it's like lock sealed so nobody can get in. But there's, there's another dynamic that I think we should talk about with all of this. And you can play into the megapods and, you know,

other people are kind of working on data centers. You know, Kristo is working on, you know, moderately assembling data centers, you know, kind of like a data center and think of it as like an 18 wheeler, what do you call those things, the 18 wheeler, you know, Kristo being container, whatever it is. But that is the disaggregation of inference into pre-filling decode. When you, when a model is answering your question, it's doing two things. The pre-fill part is understanding the question

“and it's answered us far. And think of, think of that as the more you can remember, the bigger”

your, you know, your memory capacity, literally the more words you can remember, the better decode is the process of generating the next token. And that is a memory bandwidth bound problem and think of it as the faster you can speak, the better. And these two types of inference are increasingly being disaggregated. And Chamoth was an investor in grock, which in videobot and they're going to use this. Sorybruss is the other solution today that is available. And you can put grock or

Sorybruss decode, you know, optimize chips. They will both say you can do more of the decode on them. And that's true. In front of old and video GPUs, like H100, so you can, you can lift H100s, H100s out of some old data center, put them in one of these mega, mega pods, you know, a rack of the shipping container, put a grock or a Siri bus in front of it, and you can get a very competitive solution. And so I do think the disaggregation of inference, we're going to be using

GPUs for seven years, 10 years, 12 years, and that's great, because it lowers the cost of finance them, which makes this AI revolution more financeable. Chamoth, you want to riff on grock, should we? Should we? I really agree with everything. You're incredibly well steeped in this space. It's so exciting. I don't have any investments or anything in the distributed compute space, but at the intersection of competing against China, having a vibrant American open source

community, having a bunch of distributed models for purposes of free speech and otherwise, the Travis mentioned earlier, I do think this idea of distributed inference has a real place in the American ecosystem. I don't exactly know where and how and how homeowners would get paid,

And yes, Travis, obviously, slower, but people are contributing compute to this,

“that's like kind of surplus compute or compute that's available and I don't know how to use compute,”

recycling unused compute. And then there's Targon, which is just straight up, people are putting, and you can rent H200s by the hour for three bucks, four bucks, and it's permissionless. Anybody can contribute, provided, and this is kind of the magic of BitTensor, there are validators, that make sure you're putting in what you're saying you're putting into the network. And so, if somebody just had the hardware and Tesla said, from now on, every power wall, and I don't

put it past him to do this, you buy a power wall, we give you a discount on it, every power wall has our GPUs in it, part of the offering is you can't buy a power wall without putting GPUs in it, and when you're not using it, we will pay you for your battery. And you put a starlink on your roof, and now you've got a distributed system where you get a couple of these power walls with their own silicon in it, and a starlink, and now Elon's created an infinite number of home battery

backup systems. People get their battery system for free. He gets the experience for 20 years. You guys see that there's a rumor that Elon's going to buy a T-Mobile. Good, just because three of us has blown up and got through a deal price, we should talk about

some rebirth of the little. So, to reverse had an incredible IPO, give us an update on where these

IPOs are happening. Obviously, SpaceX had an incredible IPO, but has retreated from this otherworldly $200 share price. So, to the extent you can talk about these two, as well as the two IPOs to come $4 trillion in backlog, we've obviously got open AI and Claude, I'm sorry, anthropic, which makes Claude, both of those will be worth a billy plus. You put it all this together, 4 trillion of new offerings, plus a reimbursed in there in the mix. How does the market

manage this much new inventory being put on the market? Obviously, the flow to SpaceX is notably small, but over time, people like yourselves and other insiders, founders, fund, etc. We'll be unlocked and have the ability to distribute to their LPs. So, this is going to be a moving target, I think, on terms of share price and can the market absorb this? Where does the money come from retail? Or does it come from people selling their Bitcoin and moving it over to something more exciting?

What's the dynamic here in the market? I know we're an uncharted territory Gavin. Well, for sure, there's no precedent for any of this, but a few things, I would say, like just in no particular order, I get droppings worth $3 trillion today.

“And it's very important. I'm sorry, did you say anthropic is worth $3 trillion?”

Yeah, I think that is roughly where it probably trade his a public company. And, wow. I mean, look, they're going to do, they're going to end this year.

Well, man, they're going to end this year, well over 100 billion. So, what we should.

What's the $28 million? Is it $2,000? Is it $200? Is it $300 million? It's probably not going to trade it. 10 times that number. And it will be very profitable at that scale because it'll be inference dominated in people reporting they have 85% gross margins on inference. But in terms of the market absorbing this, like the market's already absorbed it. You know, it's it's just shifting from private to public.

And so in the scale of global capital markets, they seem like really big numbers. You're just moving from the private markets to the public markets, which are even bigger.

“As far as SpaceX specifically, I think one of the more important things is everybody who's”

a SpaceX investor employee has had a chance to sell every six months for the last 10 years.

So, they never may not be the wall of liquidity that some people are thinking about.

I read this New York hedge fund short report that you could just short SpaceX on the lock up because so many people are going to sell. Really? Well, everybody was on a cap table. They had an opportunity to sell. And almost half the employees at SpaceX bought on the IPO. Now, I do think cerebrus, but I'm Gavin one thing that I got to say. So, I've had SpaceX since 2018, but what? But their little liquidity thing every year, like last year, it was like 350,

350 billion last year. So, you've got an 8x in one year. You could have a lot of people selling. Right? We're doing little 20% up, 30% up clips for many years. And then an 8x or could create that liquidity. Maybe. But we'll see. That's possible. But the employees are buying at the new price. And they're probably the, you know, it's a level. One of the biggest pools of, you know, ownership that's going to unlock. And then, you know, I do think a lot of people

probably on SpaceX through SPVs and those probably don't unlock her get distributed each time soon.

Yeah. They've known. He's definitely not, obviously. Yeah. So, and a lot of us and a lot of us aren't sellers, you know. And that's great. Yeah. Yeah. I mean, a lot of people who had large space expositions were large buyers on the IPL. On seriebras, so seriebras has out of a tough two days

“since they reported their first quarter as a public company. And I think they're, they're, they're”

two things that are very, that are worth discussing here. One is there is a whole generation of portfolio manager. There's a lot of people who are advocating for kind of squeezing the blood out of the stone on IPL prices. And the flip side of that is that there are a lot of portfolio managers who, if a stock breaks deal price, they sell it no matter what. They consider it a promise that was broken. And so, this is what has happened with seriebras to some degree over the last two days.

And, you know, this may seem irrational, but there are people who run giant funds, so I know personally, or if a stock breaks deal price, they sell no matter what. And so, stock breaks deal price. It can sometimes, you know, go to places you wouldn't think it would go. And this means that shorts, if a stock gets close to deal price, they short it because they

want to break deal price. And then, you know, they make a quick 10 or 20 percent. So, it becomes a

pile on because you have this price in sensitive selling, they can be driven. And this is what is happened to seriebras. You know, people talk about hate sale, hate selling, but they broke deal price. And so, just if you're going public and you're listening to this, tell your bankers, price this in such a way that we're not going to break deal price in our first nine months as a public

“company. And that's what I always advise everyone to do. And it gets important. But I also think,”

you know, it takes companies a while to learn how to tell their story and communicate to public markets. It's a very different audience than VCs. And the way, like the way I would have respectfully told the story of her story is what happened to seriebras is, they recorded a quarter. And they're growing fast, but relative to the rest of AI, they're not growing that fast in the March quarter. So, what I would have said is we signed this transformational, you know, when a $25

billion, I don't know the exact number, contract with OpenAI in December, December of 2025.

We immediately ordered more away first from Taiwan, Sydney. It takes 100, it takes four months. From when we make that order, Taiwan, Sydney, you know, says yes, they start producing, takes four months to make the chip. Then we then, it takes us two months, plus or minus to turn that chip into a server. And then, if we're lucky, and we can find the power, it takes us a month to energize that chip and start making tokens with it. So, the first time

you're going to see the impact of this OpenAI deal at the earliest is probably around Labor Day. So, you'll see a little bit of it in the third quarter, but then it really, it starts to build. And just like, really simple math. So, like, let's just use some rough numbers. Let's say, let's take some Nvidia numbers. It takes some 35 billion to bring on a gigawatts. And 15 billion, that you can generate 15 billion in token revenue and cloud revenue out of that gigawatts.

And somebody on the call talked about adding 50 megawatts a month. If they could add 50 megawatts a month, in 2027, forget 26. That means they exit the year, roughly a $9 billion cloud computing run rate. And, you know, we're at less than 40 billion of market cap. Now, that is going to be

really hard to do. And they've never done anything like that before. And, but I would focus,

“like as an investor, I think what matters here is not where they sit competitively,”

not what new demand they can bring on. But just how quickly can they bring on power? And listen, like outside of the hyperscalers, the only companies that have ever brought on more than a gigawatts, I think are coreweave, Crusoe, and SpaceX AI. So, bringing on 600 megawatts, it's really hard. And that is what, like, I'm focused on, has an investor. How many megawatts can they bring on? Because we know what they're going to monetize that. And that is the question. And we'll see.

Yeah. And I think that's also the other companies that have had this happen of late, I guess, Rivian and famously, Trimoth Facebook trade below IPO price in the first year, I think. And so, this isn't necessarily a mean of bad company. It just means a lot of hype or maybe going

grossly under price, grossly over price. And it's really hard to get right. And this is why

doing auctions for, you know, auctions are the way, auctions are the way. And so it's not hard to price if you just do it the way it's supposed to be done. It's hard to price when you're when you want it to be a certain number. Yeah. And you have many mouths to feed. And that

“here and everyone says the price. I don't think that happened here. I think there was a good faith”

to effort to price this thoughtful. But just, you know, there was such an in demand IPO. I think it was a hard IPO to price. All right. I'm so excited. Yeah. And you just auctioned it. I think that's different than underwriting it. You're underwriting. But the bankers, like, I think they just need to get more in the mode of just doing the auction. Yeah. Final topic was this $3 trillion or actually, now it's

your $3 trillion dollar call on inthropic would make it like $6 trillion in offerings. What do we think broadly? It's not an offerings because it's they're going to offer us false slice of that. Sure. And that's the most slice is very easy to absorb in the context. I believe we have no precedent. We'll see. I might be wrong. But it's not hard for global capital markets to absorb

this billion of an offer. It's not like, it's not like somebody has to come up. Yeah. It's a

$5 trillion or $50 billion. There's enough guys remember remember with 15 billion used to be a

“whole lot of money. Yeah. Yeah. Yeah. Weird is what's going on. How is it? Where is all this money?”

Coming. Yeah. Where was it all this time? Can we just reminisce, man? We have my, what I was a fidelity. My colleagues and I, we got Hillary. I think we priced over 14 billion. And we got Hillary the press for not knowing what we're doing. And it was, you know, then then of course, like six months later, I think you guys did around at what, like, 42 billion or something. But it's like, yeah, 14 billion. That was groundbreaking for private company back. Yeah, for sure. It was 17.

But you know, no, it's kidding. 17. No. You're right. I wanted 14. And we had like a big negotiation. We ran, we ran an auction. No, we just ran an auction. Yeah. You wanted 20. And maybe we landed at 17. Well, we did what we did was every person who want to be involved had to fill out a sheet of how much money they put at 10, 11, 12, 13, Fort all the way up to 20. And then we just did the Dutch auction. We said, we want to clear one and a half bill. We just did the auction and

cleared it went back to people and said, hey, you're not going to get it. You have another shot. They update their Excel sheet and it just moves the number up a little bit and then you, you

“close it down. But yeah, it started. That round started it. I think it was nine or 10 or something like”

that ended up at 17. Thank you for your service. Yes, it used to be. It used to be that that was a lot of money. And that was fun. He heard of at the time. And that was, well, it was 10 years ago. When we used to walk to school uphill both ways. We used to have to. Yeah, we used to eat potatoes with no butter just on potatoes. Sometimes that we're lucky that they would love that. Sometimes that's great. No, my dad. He told me that story. It's a famous job. The good story.

He'd say his mom would put like four, four potatoes in the oven. They'd wrap him in tinfoil, one in each pocket because they couldn't afford gloves. So you put your hands in your pocket with the hot potatoes. You get to school. You eat one for breakfast, one for lunch. I'm an insister, uh, Johanna, got a restaurant sold my aunt who died two young and they would just go eat these potatoes. That was their life, uh, walking to school. Yeah, and our kids are trying to both ways.

Yeah, they're trying to get the new iPhone 16 or 17. I don't know. I remember when Ramara used to be hard to raise $5 billion. It's just crazy. I remember when I was just crazy. It was hard to raise $1.5 million. Did I remember, I, yeah, I remember when it was hard to rate. Anyways, if we don't have to do this, it's okay. We already sound like Ramara's. It's fine. We sound like I'm on.

It was so hard to raise that first $1.5 million. It's just we don't need to go there. It's so funny, though.

I hate what this R.P. is laughing behind you. Is that like an R.P. so you made it? Yeah. No, this is staying at a rented house in Africa. Oh, okay. There you go. It's just a Airbnb. All right. Everybody for the dictator. Ha, you're my boy, Papeteer. And for David Sachs, T.K. G-B. We'll see you next time on the Wall and Pongers. Bye bye. Great job, everybody.

That's way on dog to give it a wish you drive way to sex.

“All right. I have a casual meaty effort. We should all just get a room and just have one big”

huge order because they're all Christmas. It's like this sexual tension that we just need to

release them out.

“What your V.B. What your V.B. We need to get more cheese. I'm going to the world. I'm going to the world.”

I'm going to the world.