SpaceX's $2T Case, Nvidia's Shock Selloff, America Turns on AI, Trump Pulls AI Order, Bond Crisis?

It's the all-in podcast episode 274, sex is out today, but we're very lucky to have Gavin Baker from a treaties management joining us. The spicy takes must flow.

Welcome back to the program, Bestie Gavin. Thanks for having me. Always love it.

It's been a huge week in tech. We can start with the SpaceX and OpenAI IPOs. We've got Andre

“Carpathie joining a therapy and video crushing it. So many different places to go, but I think we'll start with Andre”

Carpathie joining a therapy. Carpathie is only 39 years old. He's already a legend in the tech industry. If you don't know him, I believe he's also coming to liquidity yetchema. He's going to keynote on Monday morning. Oh fantastic to note Tuesday, Tuesday, Tuesday, Tuesday, Tuesday. Day two. I think he's doing okay. As is Gavin Gavin will be there. Founding member. Gavin angry. Day two. As Excellent. Yeah, and this is Gavin's second appearance. Hey, look at those two bookmarks.

Andre Carpathie and Gavin Baker. Yeah, you know, liquidity pulls in the stars.

Obviously, Andre was a founding member of OpenAI. He led the self-driving team. Also, hold on. Gavin is going to help us judge the best ideas section as well. Excellent. I don't know if you know that Gavin, but you're a judge. You're a judge. I'm a pretty thing man. I'm easy.

“Yes, Carpathie also coined the term vibe coding. He recently built auto-research. I think we talked about”

that here a bit. That's an open search training tool. It helps AI models improve themselves by running five minute experiments. That got over 82,000 stars in GitHub. He did that like as a weekend experiment and all these civilians started building their own recursive LLM's really inspiring. And the Andre Carpathie skills is a tool based on his set of principles for clawed code. And somebody just released that. And so that's just pretty crazy when you think about it.

He's going to be in charge of a new pre-training team at Enthropic. The focus obviously being recursive self-improvement. In other words, they're going to have clawed improve itself. And they've already talked a little bit about AI improving AI over Enthropic. What you're taking on this is this super important in 2026. Obviously, Carpathie is super well respected. He's obviously, you know, one of the true talents in this space. But hey, we're in a different inning than we were

say 10 years ago when he was at Tesla or five years ago when he co-founded open AI. You know what's interesting? If you go back to like Google, the culture of Google, which they got right was the singular technical talents there. They were single-down and they were called Google Fellows. I don't know if you guys remember this like how it's single, Shreddara, Miswami, Jeff Dean. These guys are stars. And what's interesting is if you

track what folks particularly Jeff Dean, I guess now, because the other two aren't there anymore. But what they did inside of Google, it's like wave upon wave. They were at the foot of those waves.

Well, it's interesting about Andres. He's been at the wave upon wave of AI. He was probably the first

person that really commercialized the Richard Sutton bitter lesson essay when he was leading FSD at Tesla, which was really about the brute force computation. And I remember him telling me this story. I don't know if he said this publicly or not, but we're he spent a portion of his time. I want to say a quarter of his time labeling data. Could you imagine like 2016, 17, like hand labeling video data from Tesla's. So he did that. Then he'd go founder of open AI.

He's a star. And he's an exceptional human being and he's super curious. And then what he's

“done as a kind of a free agent is also quite impressive. So I think that this is a really important”

deal. I think he's one of these really curious people that can be sent off and they'll just go invent new things. And I think this idea of recursive self-learning puts these models on a combination of overdrive and autopilot. And so if you put those two things together, I think that you start to you can potentially live out this idea that there's an order of magnitude improvement on a yearly basis. So like this new form of Moore's law. So then the model quality just goes

absolutely parabolicly just like this straight up. I think a bunch of compute at the problem and these things learn really quick. I think is the high order bit there Gavin. What are you which are taken on anthropics, recent success, and their massive hiring binge? The success is extraordinary. It's undeniable. I think the fact that they are not, they were even positive for the Wall Street Journal. And the most recent quarter is a really important fact for kind of the whole AI narrative.

Because now there's, you know, you could talk about circular funding. You could talk about ROI. And we could go look at the ROI, see if the hyperscaler is. But if open AI and anthropic are

are there. And then if we add in, and they're grown really fast. If we add in Gemini, we add in cursor,

we add in XAI, we add in open source. You know, it's not hard to see $200, $300, $400 billion of ARR

at the end of this year at high margin. Across all of the language models. And you're trying specifically about the private language model companies, maybe not Google, which is a public Google. But I was excluding, you know, a lot of the returns to this GPU spend have come from, you know, better recommender systems at Facebook and Google, Amazon, better ad targeting, better ad measurement. Sure. So it's excluding that and just narrowing it to LLMs, which at tokens, it's just possible

definition. And it seems like there's going to be a really strong ROI this year. Even excluding what are still some of the most economically important and profitable use cases for GPUs and AI infrastructure.

I do think what Carpati is working on, recursive self-improvement is really important and

unlocking that and continual learning, you know, maybe the two final frontiers for AI. And just the idea of recursive self-improvement that the model, while it is training during a forward pass, has input into its training or another model has input into the training.

“That could be really powerful. And I think schemoths, statistics of, you know, 10x thing every year.”

You know, my team conservative, if that comes to pass and then of course, continue learning is a holy rail where the model learns from experiences the way humans do. Yeah, and that's something we haven't unlocked yet. And those, those, those two combined, I think would, um, they might pull the future forward in a very real way. Yeah, and we have right now in Thropic has a decent lead on everybody else, whether it's three months or six months, obviously,

they're probably six, 12 months ahead of open source, maybe the three, six, nine months ahead of their contemporaries, but they have a lead, you put Carpati in there, freeberg, now you have Carpati, he does recursive. And at some point, and it may have even occurred at in Thropic, the AI is going to be improving the language model more than the humans in the loop are doing it. Obviously, they're orchestrating it freeberg, but at what point do we think this,

let's call it super recursiveness occurs. When will we cross the recursive valley, and AI is doing more to build a language model than humans are? I'm not sure when this idea that you feed the whole model into a context window to train itself and build a new model is going to happen,

“but I think there's probably a lot of different architectural paths that could be walked here.”

One of which is this idea that you could make much smaller models, and then create networks of smaller models that work together where you ultimately have less energy or less cost per token produced out of a aggregation of models, then you did with one single large model. I've said this probably three or four times now, there's a lot of work and a lot of opportunity ahead in kind of re-architecting models and re-architecting how models work together to solve

problems. My guess is a lot of leadership that he can bring to exploring those paths and all it takes

is a minor breakthrough and your cost per token drops in half. That's a tremendous efficiency game

that seems very much on the horizon because some of the early papers, I think I shared one from MIT a few weeks ago, indicate that there's a lot of room to run here in terms of re-architecting models and deployment models. These very small models, small language models, and then verticalized ones are the future. We've got a company advocates that's doing it for corporations crushing it. Everybody's got an interest in doing this, and I don't know if you saw the news this week,

Chema, it happened about two weeks ago, very quietly, Chrome included Gemini or Google included in their Chrome browser, the Gemini Nano model, without telling anybody, four gigabytes on your computer, and that's the one that does like proofreading, spallying, auto-complete, all that. So now we have Google covertly installing this on everybody's operating system. Oh, hold on, hold on, co-coverts a strong word, so let's like use that word. Without telling people, without giving

people a heads up, let's say it in a way that we can both agree. We're in the phase now where

“I think breathlessly talking about every model improvement is a waste of time. There's no”

ROI in it. We are on a path of accelerated learning, and we're going to start to see

we were able to solve, I'm just collectively saying we, in this case it was specifically

open AI. By the use of a human, and this is important, you know, a math problem that stood out standing not been solved for decades and decades. I can tell you in a different example, there are drug candidates that are about to enter clinical trials and I and D's that we're sitting on the shelf and people didn't think we're very viable at all. So we're at the phase now where these things are front and center. They're useful to people. They're increasingly valuable.

“I think what we should do now is focus on these end-user use cases because the way that you say it”

in my opinion is part of the problem because it starts to create this boogeyman us versus them thing. And I'm not saying you're doing it on purpose, but I'm saying this is exactly why I think so many people are becoming sort of like it's a four-letter word now when you mention AI because it's presented as this thing. And I think we have to present the other side of it, at least so that people have the data. So I don't think Google's in the business who are doing

sh*tty or shady things. I don't, they're not that company. There are other companies that would. I'm not going to say which ones. But Google is not that company. So I think that the reason they did is because there's use of utility. And my point is we should focus on the use of utility because I think that's the story we're telling from now on because I think we collectively, the four of us can responsibly tell both sides of the story in a well-balanced way because I think

nobody wins if we become bloodlights and go back in time. And I think that if we don't, if we're not

“careful with our words, that's what will happen. Yeah, and by the way, obviously not a lot of”

this is what has been reported by a lot of folks that people were surprised shocked when they saw the size of the model being done in the background and it has triggered some people looking at it around privacy and I do agree that Google is not a bad actor in the space. So probably a speed hour or more than anything, I would say. Maybe just add two things. There's a turning maxing, and then there's a turning maxed. And Google is probably a turning maxed. Yes, yeah, and I have

been for a long time. And the second thing I would say is I do think it's incumbent on all of us

has Americans who are involved in the technology industry in one way or another to be advocates for the positive, optimistic possibilities that AI produces to everyone in this world because it is starting to feel or seem like there may be a CCP funded campaign against AI and data centers

“in America. And that's very logical for China, but it is not good for America. And so I just, I think it's”

it we all have responsibility, just what I would say. Yeah, who do you think's doing a poor job at that and responsible for this? Is it Dario with his constant, hey, everybody's going to lose their job? Who's responsible for this? Is it the CEO's blaming AI

for their layoffs, what's your take on this Gavin? Look at a lot of second. Everybody is

trading their own book. It makes enormous sense for Dario to try to create the boundary conditions for a regulatory mode because he will be inside of the tent pissing up. He's big enough know. And if you notice that a lot of the breathlessness has ramped up at Jason, we've talked about this, you can annotate successive rounds of fundraising and successive scale with the volume. So I think that it's a reasonable business strategy. And I think that he's quite clever. And I think

that look, if you actually and I do this, if you actually just have a NASH bot, a NASH agent, inside of quad and you ask it what it would do, it would come up with this strategy. And mean while there are other versions of other counter strategies and counter exploitative strategies, the point is that each CEO has a clear incentive. They're operating at such a level of scale that they're just reading their own book. So it's up to us to take a step back and actually

see the forest from the trees. I think Nick, can you find this, there was a clip of Shamsankar, friend of the pilot, fabulous guy, the CTO Palantir. And he was, I think he was on Fox news. And he said, stop breathlessly asking these model makers what they think. Go to the end user and ask the person in the factory that's using the model and ask him what he or she thinks, ask what the doctor thinks, ask what the scientists think. And start to tell

those stories. That's what we should be talking about. Yeah. And Gavin, you were, I was sort of asking

folks you think in the industry who are representing it particularly well? We can point out,

hey, you on has said we're going to move to a world of incredible abundance and working will be

“optional. I think that's on the margin a little scary for people to hear because they hear no job.”

But he does say, hey, universal basic income is probably going to have to come into, you know, place. He said that multiple times. You have Dario, according to Chema, talking his own book, scaring the bejesus out of people in order to get regulatory capture. What do you think is going on here? And how do we do better as an industry? I think Chema thought lines like a very viable and positive path forward. We're just, you know, real people who are not, you know, at the

tip of the spear. These are the positive impacts that I saw on my life. I was at a, I was at an event

maybe 10 days ago, and someone who runs a hedge fund, his daughter was born with a very rare genetic mutation that effectively would have normally condemned to a life devoid of joy, meaning everything, the neurons in her brain were not firing. So she wouldn't, you know, who knows what her life expectancy would have been or what the quality of her life would have been. And it's, it's a tragic disease. He said, he didn't accept that as an answer. He found, he did an enormous

amount of research with LLMs and found an existing state drug on the market that they thought would

“have a meaningful impact on his daughter's condition. And it did. It took, I think the percentage”

of times the neurons were firing was 30 or 40%. And it took it up to 80 or 90%. And that means that she can live a normal life. She may not be as smart as she would have been, but she can live a normal life. And he's now figured out how to use AI, how to further tailor that drug. And, you know, there have been all sorts of advances and protein design, et cetera, et cetera. And he's reasonably confident. He's going to have a drug. And months, there is a complete care. And that's

just one person, one dad, was unwilling to accept a feat for his daughter and who changed her life in the life of everyone else with that disease. And I mean, tell those stories. So I think Elon's doing a good job, a future where work is optional. I think that sounds great to some people. And you

“know, scary to others, you know, four day work week. You know, I think it's probably something”

that sounds good to a lot of people. I think Jensen is doing a good job of being an effective advocate. And I do think anyone who is trying to drive, I just, we need to stay focused on the positives as well. Freeberg, what you're taking here on the AI PR crisis, if we'll call it that, we had three different commencement speeches that were booed. Eric Schmidt being one of them, two other ones by maybe less notable folks, when you hear young people booing AI, for Siftersley,

why are they doing that? Freeberg and what you're taking on the overall PR problem when I had to turn it around. That's a, there's a long answer to that question. It relates in some ways to your concerns about socialism and polarization. What's the long answer? What's the long answer? I mean, that's like, like, why do people hate technology? They do a logical, why do they just technology? They love their phones. They love the internet. This technology they. I think that

there's like an underlying view that technology creates leverage for a small group of people, which creates power and balances. And nothing represents that more than AI, that a small number of people that control and profit from and benefit from AI are going to end up getting outside's returns relative to the broader population, that the time to diffusion of the technology,

because ultimately all technologies like commoditize and diffuse, but the time to diffusion here

is such that it's going to be like extremely asymmetric for society. And I think that there's something fundamental about that. It's like, you know, nuclear bombs. I think really created this moment in people's minds in the mid 20th century that by the back half of the 20th century gave everyone a high degree of skepticism about technology and science. Generally, that those who have the knowledge and those who engineer solutions with the knowledge can create outside of advantages for

themselves and it puts the rest of us at risk, the rest of the world, the rest of the population

Can't be answered today? The economic benefit that's accruing to the few today becomes the narrative,

it becomes the story and it becomes this like power system that a few people take from the many. And so there's something deeply disturbing for the average person about that. They don't understand how it works, why it works, what it'll do for them, when it will do it. And all that

“they're being told is that some people are making trillions of dollars. So I think that it's”

pretty obvious why this has got such a backlash. Secondly, I think that there's a deep amount of external energy that's fueling this anti-technology sentiment in the United States and has been for decades. I think to Gavin's point, I don't think it's just China with NGOs today. I think that there is a long history of state actors intervening in media activities and foreign nations to try and create the sentiment and fuel a sentiment that reduces progress in that competitive

state. I think this goes all the way back to KGB design during the Cold War and it's been refined and honed and improved over time. This is not just some conspiracy theory. There are plenty of great books about this. The techniques of what's going on specifically today. I don't know enough. I don't have any great details on that. But I don't think that there's no foreign interest in seeing technology advancements slow in competitive nations. The United States probably does similar things

“to other nations. And I think that that's probably a key part of this. And then I think this”

this like third piece is like when the Copernican Revolution happened, it was a mine

heliocentricity was a totally new way of thinking for humans and it was a deeply disruptive to the church. And it was deeply disruptive to the power centers which were the centers that could tell people Earth is at the center of the universe. We're in control. We're the direct channel to God. And the idea that the sun is at the center of the solar system and we spin around it and we're tiny speck in the universe was very hard for people to grasp. There's something about AI that's

very like not human centric and it kind of shifts and f***s with the ego of the human. It's almost anti-humanist. And I think that that's like the deep psychological current, a lot of people and their disdain for this technology. It feels it. It's not the cause but I think it feels it.

“So I think there's a lot of complicated aspects to this check out. I don't think there's a simple”

put put charm on a podcast and he'll solve the problems that they are right now. I think that there's a real shit set of shifts happening. And there's a real set of global competition underway where various state actors and interests are competing with each other. Do you think that we should slow down? I don't think you can. No, no, no. Do you think we should slow down? No, I think I was just talking to some people on Zoom right before this. But I think after the

Manhattan Project, the research labs were set up to maintain our scientists that worked on the Manhattan Project from effectively leaching back or leaking back to Russia and Germany and other places that were adversary to the United States. And they all were against the nuclear bomb. They worked on it because it was necessary for the United States security. But then when Russia got a hold of the secrets, they were leaked because people were worried that if the US had all the

power, there would be no counterbalance to the power. And so the nuclear secrets were leaked to Russia for that purpose. Then when Russia had the nuclear secrets and they began developing hydrogen fusion bombs. And it was clear that they were going to race ahead. The United States race ahead with developing nuclear bombs as a counterbalance to Russia. When the proliferation began, there was no stopping it. It began and you had to have this balance in the world. Otherwise,

you have effectively an asymmetric power that can do whatever it wants globally. I think there's that moment in the world right now where if the United States does not advance its AI technology, the availability of it, TBD, industry, taxation, all these things that we're talking about doing, there will be someone else that will. And if someone else does, we can go through what would happen. There's a complicated game theory on this. But what would

happen if China had sufficiently advanced models and sufficiently advanced scaled deployment

of those models relative to the United States? As you do that analysis, you realize, wait a second,

that's probably not a healthy place for the world to be. It's also probably not a healthy place for the United States to be the only one with AI. And so I think what we end up seeing is if we do try and slow down AI, we kind of lose this moment of balance that's necessary when you have a technology proliferation like we saw with the arms race after World War II, that we're going to see again here. Tramothi, I think bring up a good point. Should we slow it down or

would be, hey, with self-driving, people are scared that all these cab drivers are going to lose

their jobs, Uber drivers, cab drivers, bus drivers, truck drivers. This is, you know, over 10 million

people in the United States driving things for a living, would you be in favor of some of the announcements that that will be a pastoral out? It wouldn't happen all at once. In other words, those people will be giving some amount of jobs security to stay behind the wheel with it. Another example that's been given is if you put optimists into Amazon factories or the figure robot, just did like a week of just sorting packages. I'm sure everybody saw that video. We'll insert it here.

That figure robot. So we're in these, hey, if Amazon deploy, so it's there'll be attacks on those per hour and we'll tax humanoid robots in some ways and then use that for, say, retraining people. There are two very specific conditions and approaches that people have been promoting

“to either of those resonate with you and anyone. I think it's interesting that in all of those”

discussions, I've yet to see an actual survey of only the truck drivers and only the package orders. The question that I would have is, do the people that do these jobs want these jobs? And if they do, then there's a reasonable claim to make to keep those jobs the way that they are. If you're saying, this is the job that I do. I love it. I'm able to provide for my family. Great. That's a very different argument than, well, you know what,

Amazon has 35 or 40% churn inside of their warehouses. And we should probably ask the question, why is that? Because if it was such a great job, I suspect the churn would be three or four percent. So what exactly is it that we want to protect and have you ask them? And I think that this is just the, again, a bunch of people in the peanut gallery want to take a moral high ground and try to make some other group of people feel guilty or feel bad.

At no point, or we actually asking the conversation that that we should be having, which is, it's interesting to me that they're supposed to be an EO, an presidential executive order that was announced

“today. And then it was pulled. It was scrubbed at the last minute. Did you guys notice that?”

Yeah. And yesterday, what was leaked was everybody that was attending. It was all the big Neolab's CEOs and it was all the big hyperscaler CEOs, including, friend of the pod, Nikeshwarra, shout out to Nikeshwarra. And then it was scrubbed an hour ago. Why was it scrubbed? And the president said that there were aspects of the bill that he didn't agree with. And as far as we can tell, the aspects would have required some amount of supervision, insight review

from the federal government of language models specifically of these frontier models is what I read.

Not language models, because there's going to be many different kinds. They're not always

going to be language models, but of AI. So look, I think freeberg is right. We are in a proliferation with China. I think it's actually good that China is less than nine months behind us. I think it allows us to find a detent where we have a certain magnitude of capability that they also have. And that allows all of us to then seek peace and abundance. And the fact that we are orthogonal societies, we are organized differently, increases the probability of finding peace,

using the renagerar kind of framework of magnetic theory. Then if it was like us in another country that was exactly similar to us. So I think what we need to do, we probably need KYC. I think that that should be something that us in China get together and say, you don't want it to get into the hands of people. You can't control, you probably already KYC those models anyway inside of China. You already review those training runs before you allow these models to get least. We already know

that that's happening. Yes. So we should probably do some sort of KYC. So some crazy person doesn't create some biological weapon. I think that those are some reasonable ground rules. But otherwise

“freeberg is right. You have to take a little bit of a deterministic view here, which is that”

we are in this existential race. And we need to get to the place where each of us, meaning us in China, can look each other in the eye and say, all right, weapons down. So to speak. Gavin, I'm going to hold you to answer two questions. One should we run Frontier models because

that's specifically what was mentioned in the league about the EO Frontier models, the powerful ones.

Should they be run through some sort of testing before they're released and should there be some regulatory framework for that? That's my first question to you. Yes or no question? And then you can explain your answer. Gis. Like I just think it's such a complicated topic. It feels we're a little early for that. I don't love the idea of the United States doing it and no one else doing it. I like I think at a world where we hold hands with China. Look, I think that's

capabilities. I do agree. Yeah. Let me then rephrase it. Should China and the U.S. come up with

those simple battery of things that have to be tested before these go out, including bioweapons, terrorism, and that genre of in that vertical of just really known dangerous things. Just like

“the FDA might test for poisons or contaminants in a food or a drink. Would you be in favor of that?”

I'm curious. So a few things like the one thing that's great about America is there is or one thing that's just we have other forms of regulation. Self-regulation, true. We have self-law one. We have self-regulation. Also we have the courts. And if an AI model company behaves irresponsibly, they know that there are ways that people who have been harmed can seek recourse. And so we already have a system that encourages responsible behavior on the part of the model makers.

That's a great point because Open AI is being sued right now by a kid who killed themselves after talking to Open AI's model. So you're correct in that after the fact. And we'll see more of that. I just, to me, once you give something, give a power to the government,

it's almost never taken back. Yes, to grow. And it's kind of a one-way pass.

“One-way ratchet. Yeah. And then what's the second question then?”

Chamoff is saying, hey, nobody listens to these cab drivers or maybe the people sorting the packages do they want the jobs? They're not actually the UK. There was just a 60-minute special and UK and also Boston and New York are pretty adamant that they want humans to stay and they want to ban self-driving in those locations or severely limit it or maybe limit it in some way to let those people keep their jobs. How do you feel about that possibility? Is that

something you think society should be open to some gradual licensing? They're going to get sued for a wrongful death. When somebody runs over somebody else and you could have implemented a solution that has a zero death rate, that's very different from package sorting. Okay. Go talk to the package orders is what I say. Go talk to the people inside the Amazon warehouse ask them what they would rather do at Amazon. Ask them. Yes, sure. But Gab,

“what are your thoughts here on either one of those examples here? I think you're going to a city”

or you can't get an away bow or a cyber cab is going to feel barbaric and unsafe. Continue. I agree. I don't remember let but the early days of Uber. Sometimes you go to a city where there was no Uber. Yeah. I mean, incredibly frustrating. Well, I'm not going to come back until they have Uber. It's so inconvenient. And I think so whatever individual municipalities decide,

I do think one, Chamospoit is really powerful. There's 50,000 automotive deaths per year

in the United States, if I recall correctly, and a million globally. And you know, that's not tolerable. And there will for sure be wrongful death lawsuits. And then just from a convenience equality of life perspective, I just don't think it's going to persist. And then another great thing about America is, you know, you have this patchwork of different states and municipalities and each one doing things in a different way. And I'm not suggesting that's good

for AI. But it does tend to, you know, has this historically, the curly effect decide, led to, you know, I think more positive outcomes were cities and states compete. You know, the curly effect being. It is there. Yeah. There's this is a really important point you're making, Gavin, with flock safety. As but one example, we had an AI, there's an AI tool called Flag Safety. It's cameras that use AI, monitor people who are committing crimes. There's a

privacy issue around it. It is bottom up. You just do it by town. It's not top down. And states can regulate it. The same thing will probably happen. What's up, driving. And states will probably have some say in how AI is deployed, even if maybe some centralized governments don't want to do that. I really think this only comes down to a small safety thing. I think it's so good. Jason, crime is the out choice. Yeah. You know, I think the care that Cambridge has been voted to turn off

gunshot detectors two days ago. And which city did that? Which one is that one? Cambridge? Cambridge. Cambridge. That's the place where Harvard is. That's the place where Harvard is. So the geniuses coming out of Harvard in that town decided gunshot detection, we don't want to occur. We don't want contact detection. Just sort of. It's wild. Because, you know, there's a theory that it disappears. You know, that it might lead to an illegal migrant.

We should have done being apprehended. And we don't want that kind of. At A16Z, you had a great essay on flock. We can really, really solve crime. And it's just a choice.

And I'm sure they don't cast it as pro-crime. There's, you know, some sort of, you know, moral

“or ethical reason. They're making that choice. But people will vote with their feet over time.”

And then voters will vote with their votes. And we'll see what works. Have you guys been to Vegas recently? My wife and I went to visit Vegas and we spent the afternoon with Ben Horowitz and his

wife Felicia. She has done this incredible job with the Las Vegas Police Department.

It is one of the most impressive things I've ever seen. And to your point, crime is an option. And they've said no. So what happens there is they have gunshot detection. They have drones that get deployed off the roof of the police building. We were sitting inside a mission control where you see it happening. Jason, if something happens, they have eyes on sight within minutes. They can track offenders and bad guys all the way to wherever they're hiding.

And you walk out of it and you feel incredibly safe like they're really on top of it. And when you understand the level of investment, it doesn't take billions of dollars to the cost of minimums. It's the minimums. It's the minimums. It's the minimums. It's the minimums. It's the minimums.

When compared to the cost of the crime occurring. Exactly. If you gave the Las Vegas Police Department

$30,000,000,000,000 a year, it would be the safest city in America. And that's all of the take. Yep. Exactly. And for the privacy concerns, Freeberg, there are very simple solutions to this. I am a privacy advocate myself. Of course, we all want some level of privacy. I had the flock CEO and this week in service twice in the past 10 years. He's very considered.

“And the way they do it with flock is they allow you to have a rolling database. And I think there's”

a maximum you can save the license plates for. And they don't do facial recognition. I don't see why not. But let's put that aside. You can only keep it for two or three years. And then they insist on having an audit challenge. So there are all little things you can do on the back end to protect privacy, with audit trials, etc. We got a lot more to get to in the doc at it. I just want to give my final thoughts on what we're talking about here in terms of the AI problem in the PR problem.

I think we have to recognize that the layoffs that are occurring in big tech and in a lot of these places are not just the bloating issue anymore. And I'm just going to point to two factors that I think are scaring the bejeezes that a people. And we just have to admit that this is occurring as opposed to we've been debating it here. Is it occurring? Is this just cover? And are we AI washing? The first one I want to give an example of is Matthew Prince, who is the CEO of cloud

flair, incredible company, public company. Two weeks ago, I laid off one of the 20% of my workforce.

I didn't do it because cloud flair is struggling. We posted record revenue growth, have strong free cash flow. And are adding an unprecedented number of customers, yada yada yada. And he says basically, he's getting rid of measures. Measures are the people who manage people and who measure data. And he just says we're getting rid of all those people. They're unnecessary because of AI. And we'll be adding to people in other positions. At the same time, Zuckerberg did

another round of layoffs. And they were done in a way that people felt was not considered. And a bit what's the word dystopian dystopian. Thank you, sir. He did him in a pretty dystopian way. Here's Zuckerberg for 30 seconds. In general, the average intelligence of the people who are at this company is significantly higher than the average set of people that you can get to do tasks if you're working through the contract through these contractors. So if we're trying to teach the models

coding, for example, then having people internally build tools that or solve tasks that help teach the model how to code, we think is going to dramatically increase our models coding ability faster than what others in the industry have the capability to do, who don't have thousands and thousands of extremely strong engineers at their company. Okay. So what Zuckerberg did at the same time, concurrently he told everybody we're laying off these 8,000 people. A lot of those people are incredibly

talented. Some of them are an H1B visas, creates all kinds of chaos for them in their personal lives and obviously they're having record profits there as well. At the same time, he was laying off those 8,000 people. This is after tens of thousands of layoffs before, which were obviously because of bloating. He said we're putting recording software on every single person in the company's computers to study and train our model and people are like, oh, and previous people said, I built

during the AI hackathons they had months ago. I built all this AI tools to make my job more efficient and then Zuckerberg weighed me off. So the now, the perception people have now and it's quite

“correct I think is the most you can hope for here is you keep this job for some amount of time”

and train your way out of it and hopefully there's some more work for you, but they're studying you and Zuckerberg just said it plainly there. Hey, we're going to study everybody here and that's going to lead to more replacements. This is scaring the bejesus out of people and we need to have

like from the PR school of retards. Okay, here we go. You could not have written a worse memo. It's like you reduce humans to a label called the measureer and then you're like I'm going to lay off all the measureers. I mean, I just think that part of this again I'll go back to the and maybe the Sean Sankar quote that I'm thinking about should be extended beyond the model makers. You know, can you just play this for one second and I'll tell you why I think this is too

good. And then we'll go on to the S1 from Smiths. We're listening too much to the inventors of AI. I know that's appealing. Their geniuses, they're smart. We need to be listening to the frontline factory workers who are using AI saying, wow, I was able to add a third shift. I was able to hire more workers or the ICU nurse who says, I have more time to spend with my patients. I'm able to ensure they don't code during a shift. Okay, so my point is like the first part

of what he said applies here, which is who cares what Matthew Prince thinks. Because the reality is

that if this is the way that you're going to message something as critical as this, I think you did a horrible job. And now you label these people and you put a scarlet letter on their backs and now when they try to get a different job, they're like, oh, you're one of the cloud flare measures. How does that help anybody? It didn't need to be done this way. There's enough of these tech CEOs that are now public. You can hear them. You can understand them. And I think what we're

learning is, man, they're really good at one thing and they're not necessarily as good at all the other things. Okay. And so I would say shut the f*** up. Get behind the keyboard, just do your job.

“And if you need to manage something, just manage it, but don't write these misses. You're terrible at it.”

All of you, you're all terrible. You suck at this. All right, uh, we'll end of my TED Talk. Thank you for coming to my TED Talk. Well, uh, keep moving on. Sorry. And so when everybody gets upset, this will be why. Yes. I do think the Zuckerberg, this and Jackson, you know, hey, we're going to have have as many people. Everybody will purge directly to me. This is all building this fear in society. And I think people are right, rightfully scared. If the people building it, tell you,

be scared. Your job's going away. Wait till the next regulatory filing comes out from these companies. And they authorize a massive share by back in an increase in their dividend. Yeah, and their cash pile grows. All I'm saying is there's a right way to do this, make these decisions. And then there's a wrong way to do it, which is to message it in the way that they're doing it. So whoever is running PR and comms and approves and reviews these things are really sh*** at their job. They don't understand

the moment. Oh, some breaking news here. It looks like anthropic has higher three more people. Here. We got to see. Oh, here we go. Personal job news from Sam Altman. He'll be joining anthropic. I say that's pretty good. Okay. This is joining. Let's see. We checked everybody's socials. Oh, Tucker, Tucker, constantly also joining Anthropic. We're doing their PR and podcast from Anthropic headquarters. And who else? Oh, Shamass. Looking good. Well, you look like you put five

pounds on. And this is not how I, first of all, this is not, this is not what I look like. And

did you have five pounds? No, you don't worry, are you not wearing underwear? He's not either where

“he's wearing his khakis, but I think it's just he's trying to not show off those scrawny,”

those scrawny sclinth, those those little slatzy calls legs. He's covering them up now. Uh, all that I'm going to say. I don't want to let you in. I knew that this was going to come up. I'm going to send Nick an updated picture of my legs. And you, that you can deal with this. You can photoshoot your legs all you want. I didn't. I didn't photoshoot your brother. >> Those are not $100 a day.

>> They may not be photoshopped, you may have been leg-maxed. >> He could be leg-maxed. >> On VP157, you're legs. What are you doing first of all? >> First of all, I'm six foot two.

You fucking good. Okay, so goshfage legs.

All you little people, Jason, you're five foot f*** all.

So, you're a building to have a good day. What my platform, so you're a building to have legs is different, because my muscle mass won't show on my legs. >> Oh, I don't think you're having a... Look at, you know what he's doing there?

Freeberg, you see it, right? Look at how springing the calf, sir. And then look at how he's doing this. >> He's on my dad's boots. >> That's a pushup right for your quads.

>> Oh my god. >> That's the equivalent of a pushup right. He has those bansu balls. He put bosu balls under his hammies to, you did it. You're using filets to tighten those up.

>> That legs and I flak, okay, you know what, move on.

“>> You don't have to say, I think we should get credit.”

>> Credit is due. >> Yeah. >> The moth legs. >> Better. >> Both has been doing a lot of work on his legs.

>> Thanks, little better. >> Thank you. >> It's better. >> I'll give him better, but I do think that he's pumping him up here. Okay, let's keep going here.

All right, it's often to his face that's just filed. They're S1 on Wednesday.

To be the largest IPO, ever buy more than double Saudis or RAMCO, 29 billion to our IPO

a couple of years ago.

“This thing is expected mid-June, like the June 12th, Tiger will be SPCX.”

We got a lot of interesting information in the S1 tear down, obviously SpaceX has three main business units. Starlink is the money printer right now, but there is a second one that's emerging. Starlink did 11.4 billion in revenue last year on 50% growth with 4.4 billion in operating income.

10 million people are now subscribing to Starlink, that business could easily be hundreds

of millions of paying subscribers, so that's a lot of growth potentially there. The space business is but 4 billion in revenue, it's growing 17% growth, which is still the strong growth, but had 650 million in operating losses, AI did 3.2 billion in revenue, that's more than double year over your growth, but it had 6.4 billion in operating losses. SpaceX had 20 billion in Capac spend last year over 60% was for the AI compute build out,

and obviously they were trailing anthropic and opening AI in Gemini in terms of XAI, playing catch up and he did a big reboot of that as we saw on the Twitter. But here's the big one, EWS, Elon Web Services, as we call it here on the oil impod, has exploded. And Thropic is paying SpaceX wait for it 1.25 billion a month to rent out Colossus 1 and parts of Clause 2. It's a $45 billion deal over 3 years, 15 billion a year. In other words,

they added a starlink in terms of revenue to the party, plus if they buy cursor, that's going to add another 2.3 billion. Not if. I already told you they already, okay. I'm just trying to, you know, dot the eyes and tease here, but when they buy cursor, that adds to a $3 billion. That's not in the S1. That's also growing and doubling. Yeah, that's probably grown to XU over year.

And who knows how much faster will grow? Polymarket. 71% chance, SpaceX closes its first day of trading with a market cap above 2 trillion. Thank you to our partner, Polymarket. I'll stop here, Gavin. You've been involved in the company for a long time. Chumap, you, I think, were a big investor in the satellite company that became part of Starlink, which is the revenue driver there. So you both have a lot to say about this Gavin.

You're take on the S1. And I think specifically, Elon Web Services.

“I think what's important about Elon Web Services does make me laugh.”

But 15 billion, that means the AI business right there is going to quadruple. It has already effectively quadrupled. And what's important about that is there's a statinit that for, I think the, their first data center was 122 days. The second one, it took them 91 days. The third one was I think 66 days. They build data centers dramatically faster than anyone else at a lower cost. And now that you have a clear off-take partner and out-expect partner to become partners,

there is no reason. They can't start stamping these data centers out really fast. And having watched Jensen for a long time, it is important to Jensen that his GPUs be used. And so GPUs will be allocated to who can plug them in, turn them on, and start converting electrons into tokens. And so I think this business can grow dramatically faster than I think you know, maybe what anyone could have contemplated three months ago. But $15 billion

from anthropic is extraordinary. Important note, it can be canceled by either party with 90 days notice. Just want to make sure we also have that in there. So that means Elon might want to compute back or anthropic may find another solution. So they do both have an out. And I think that's

“you know, I think that's probably an important provision for everyone. But I think the other thing”

they came out this week, which was not in the S1, Nick, can you throw up the parade of frontier and maybe don't include the email on the names and everything, but the composer 2.5 stat, I think this is really extraordinary. So cursors, composer 2.5 model, came out this week. And I mean, this is Pareto dominant. And this is just, you know, three four weeks of doing reinforcement

learning on Colossus 2 with cursors data. And cursor has we will never know, but cursor allegedly has

more tokens of coding data than exist on the public internet. And that is the stat for my

anthropic probably have the most proprietary tokens of coding data. And what this, this jump from composer 2 to composer 2.5 showed us is that when you do an appropriate amount of reinforcement learning, using a data, let alone injecting it into the pre-training of a new base model. Because composer 2.5

is the same base model as composer 2. Which is Kimmy K. K.25. Like this is amazing. This is three or four

weeks. And it is Pareto dominant, the parade of frontier. If you draw a curve of the blue dots, you can see, composer 2.5 is literally, well outside the parade of frontier. And that's after three weeks. And what's going to happen next is you're going to have a new base model with a cursor model in it. Yep. Then the cursor model are held using the biggest coherent clue compute cluster

“in the world. And I think this is, I think this may. It's a significant, yeah. It's extremely”

significant for XAI and cursor. And cursor was dead in the water in terms of access to compute

and they were falling very far behind code X, Google, Anthropic. And then you want to let them on

classes and boom instantly, their models are growing faster. And this could be, we could be sitting here a year from now and they're the dominant player. And could we be sitting here, Gavin, in a year and Elon is selling compute to Google and open AI. Is that a possibility or not? Well, I think it's much easier to see him selling compute to Google. And that's going to happen. And there've already been posts about that. Yeah. And for sure, Google is going to want to be part of,

orbital compute. You know, it's a very funny, the only people who are skeptical of orbital compute are those people who are not involved in data centers or space, Google, Anthropic, Amazon, Nvidia, they are all very convinced that orbital compute is going to be reality. And obviously SpaceX is an extraordinary world position for that. But I do think that composer 2.5 data point

is really powerful. Keep an eye on it. Yeah. And the other thing that's come out is

“graph builds. So what graph lacked that a lot of other models had. And I think it's important to remember”

that the newest version of graph 4.3 is on the Pareto Frontier for all Frontier models. And you either on the front here or you're not. And the companies on the front here are XAI with one build of graph 4.3, which is a 500 billion parameter model, Google 3.1 probe, and then open AI and Anthropic, and that's it. Those are the companies on the front here. And I have the four horses in Google today. You have one dot on the Pareto Frontier. And obviously you want as many dots as

possible. But Grock lacked the harness. So Claude had Claude code, open AI had codef, and now it's Grock build. There is a harness that is available to Grock. And, you know, has them as I'm sure a downloadable app to translate into English that has integrations to all your favorite stuff, whether it's notion, Gmail, Slack, et cetera. And if you don't have that, it's just like using a basic chatbot from a year ago. So now they have their downloadable.

It's in market and they are cooking with oil on it and they're playing catch up, but they're moving fast. And it's more than just an app. It's it's a run time. It's an environment,

“it manages memory. It makes these models dramatically more useful to the extent that I think”

the people at the front here all agree that the harness is essentially has important as the model, especially in an agentic world. And the harness in the model need to be developed together. So the release of Grock build and their pace at which they're iterating is I think also really encouraging. So now you have cursor, you have the cursor data, you have a clear existence proof that the cursor data is really important because composer 2.5 is now

parade of dominant and the most selected model on cursor. And that's also important because these e-values don't capture everything. This is why people on X talk about the vibes and the vibes on cursor 2.5 are also really good. They're a macular. Yeah, with Grock build, I think these are really important developments. Yeah, there there was Elon was incredibly frustrated by the state of affairs at XAI. He was very public about that and he's less frustrated now and he's

shipping a lot faster. And so I think that says something and he has been very focused on it.

might look like a year or two from now, especially if like many people believe, Tesla and SpaceX Merge, what do you think of dollar sign ELO, ELO, and has an entity and what impact it might have as if those two were put together in the market cap, we put them in the fourth largest company in the world. We can revisit our earlier conversation about an anti-tech anti-AI, anti-progress world and society ahead. And if there is an effort, a concerted effort and organized effort

by governments to stop or block access to information, restrict freedom of speech, restrict

“freedom of purchasing or buying things to control more things. And I think there's a trend line”

in this direction right now globally. The internet has always been lauded at this kind of

system that provides an open alternative to physical commerce that you could create digital commerce, digital information, digital media that you could share. And it's almost the digital representation of society, but the internet has to sit physically somewhere and the assault on data center builds apps in the United States right now. I think may indicate the importance of having an alternative internet. From the ground layer up, if you have a communication network that isn't restricted

and controlled by a government on Earth, it's almost like a backup for civilization, but it's a backup for progress. And I don't know in any SpaceX shares, and I'm not trying to sell the book

“of SpaceX, but I think that there's like an important aspect of, can you create a system that's not”

under the control of governments as a way to ensure humanity's progress to ensure a civilizational continuity, if things go south, if things aren't good, if things are restricted and if, you know, fundamental forms of tyranny start to restrict speech, restrict commerce, restrict information flow and whatnot. And I think having like a space-based communication network, space-based data centers and space-based communication backed down to Earth, wireless. I think it's generally a good

thing. It's good to have a backup. Yeah, so put all the economics aside and the multiples and evaluations and whatnot and whether it's SpaceX or not. I think the idea that you could have data center's store information, transmit information, route information, and access information through space-based systems that can't be controlled, manipulated, and destroyed by governments is important. And I just, I like that. Yeah, if you, most people don't remember this, but when

you were on the starting space, the original idea, when he was running around with a dayo and they were looking at some rockets and getting carriage from Russian rockets was to back up the biosphere. And he came back from that trip and I remember talking to him about it and he said,

“I think I just have to make my own rockets because that's actually where the problem is,”

and it would be easier just to make my own rocket to back up the biosphere. And he wanted to put geodomes like geodesic dooms in space with all the plants and wildlife and creatures

and what incredible vision. And then it, you know, there was the necessity of actually getting

that up into space and that's the unknown origin story. I will say this, Chema. The idea of putting a data centers in space seems completely doable, even though there are a bunch of people who are saying it's not when you compare it to what happened with space acts with Starlink, which people said also wouldn't work. And now he's got 10,000 Starlings up there. The difference between a Starlink satellite and a data center satellite is really not that different.

And they're pretty different. Well, conceptually, of course, they're physically different. But conceptually, Elon put 10,000 Starlings up. Is he capable of putting 10,000? No. The size is much bigger Jason. The foils are much bigger. The wings are much worse. But yeah. My point is it's not different if he has the new Starship. Because that's 10 times bigger. You can't just scale like this. That being said, it's technically

possible. I think he will be the first one to figure it out. But I'll just take a much more pedestrian take, which is okay, you're sitting here. And if I'm asking myself, Chema, how do I underwrite space acts at 2 trillion? Here's the basic math that I would do. Well, last year

did 18, 19 billion dollars. It'll probably do 25 to 30 this year. Okay. So I'm buying this thing

at a fairly costly premium, right? So what am I buying? Well, I'm buying probably the most

That's going to scale to hundreds of millions of users. And the reason that's going to scale to hundreds of millions of users is it's just very useful and it's just going to be come cheaper and cheaper and cheaper. So that's number one. I'm buying a delivery infrastructure,

“but I think over time GDP plus 10, GDP plus 15 kind of a grower. So good business,”

valuable business, but it's the underlying platform that allows everything else to have it. And then I'm buying an AI business, which will be at the top level of the apps, but at the bottom layer, all the compute capability. And I think when you scale that out, like why is class is so valuable to unthrob it? Maybe that's like a good question to ask. It's because if you look at who's actually capable of delivering a gigawatt data center,

these guys are the closest. Like an actual gigawatt. And the reason is is that this stuff is very complicated and very, very hard. I think you've probably heard this famous story where Jensen was like, yeah, he was the one that figured out this one thing that nobody else could figure out so that you could strip a bunch of racks and drive a bunch of East plus traffic and make the whole thing

work together. So I suspect what happens is next year it's probably 40, 45 billion. And then the

year after that, it probably doubles again. So now I'm buying it at 20 times revenue. And you would say, well, why can you buy a company like this on revenue versus earnings in cash flow? And I think the reason is because what the revenue does is it gives him the operating leverage to go and invest in all of these other businesses that ultimately consolidate his differentiation and his competitive mode. Because what he creates is a capital mode that then accelerates a technology mode, that

“then accelerates an execution and a learning mode. And that's why we owe it when it starts to spin”

very quickly. And you would say, hey, hold on a second, it's probably spinning quickly now. I would say we're at the beginning of the beginning. Because he's, again, he still has all these disparate assets. I still don't like the fact that Tesla's over here. And as I told you, that will get merged in. And now you have this incredible corpus of physical capability, movement of all kinds, X, Y, and Z, right? You have learning capability. You have infrastructure. You have all the

connectivity. That thing will look very cheap. I think in a few years. And he has this one thing

that nobody else. If you look at the big CEOs, who steps on stage where you're always curious,

okay, what does he got up his sleeve? You know, the Steve Jobs, oh, and one more thing. This is the only guy at the scale of civilizational, out-of-left fields. He's, he's the guy. Whether you like him or you hate him, he's the guy. And there's a premium that is well-deserved that comes with them. So if you had to pick an underwriting case, Jason, I would flex the revenue and realize that terrestrial data centers alone are a hundred or two hundred

billion dollars of revenue by 20, 30, 20, 32. Just. And that means just building it. So already you're buying it at 20 times revenue just for that business. And anything else is the colossus on the ground earth. It'll be not a big space. No, no, forget space for a second. It's like colossus three, colossus four. It pencils out with that. Yes. Getting a name plate one, giga-look, look, it is freaking hard, man. Getting a giga-watt name plate working is almost. And then,

by the way, there's all the stuff that he can do on land that he's the best position to do. I'll give you one example. There's a great push that Jensen's making, which he needs a partner.

“And I think he wanted to come to natural partner to do DC to DC. Forget all this DC to AC to DC”

nonsense that goes inside of a data center. All the laws he has to explain what that is in the issue forever. Just like, look, you go through a bunch of power transformations to actually deliver the electrons into the rack so that, as Gavin said, you can generate the token on the other end. Today, it's, it's very inefficient. It's very costly. It requires a lot more power. It requires a lot of cooling. It requires complexity. And what people have said is, wow, if we could just do

DC to DC like it comes in as DC direct current, it goes right to the rack as DC. But it requires a fundamental rearchitecture. Jensen needs a design partner and a thought partner to get that done. He's probably the only one. So I just think there's a lot of reasons where you can underwrite this to a multiple of revenue plus the X factor, which is just the creativity and the the one more thing. Love it. And then here's two charts, and we'll have you come in on the

least Gavin after it. Here's the rocket sizes, just in terms of scale. And most people have not actually seen a starship in person. When you see this thing in person, and I, I've been inside

that rocket. I think we were together, Gavin, when we were in the first build. And like inside

that's what it feels like when you're inside, right? Like a 47 in terms of the amount of space in it.

“Especially when you compare the Falcon Heavy, which is their workhorse, correct Gavin?”

Yeah, and Starship's going to get bigger. Based on the road map, it's going to get a lot bigger. A lot bigger. And then this one is the most interesting that this started trending last week. This is Cuman of Payload's launch, 1957 to today. SpaceX is basically about two in just that. And and this is really what exponential growth is about. And this is what disruptive technologies are about. Just from 2012 to today, SpaceX is about to dwarf the rest of the world's cumulative

payloads into space. So Gavin, maybe take the other side of it. When do these data centers in space happen? What has to happen for those to be a reality? When does that hit SpaceX's bottom line?

We've heard from Chimoff, hey, here's all the things that hit the bottom line in the short-term

“and midterm. But I think data centers in space would be a midterm to long-term play three”

years is what I'm hearing. So tell us about that business in relation to the two charts, I just sure. Well, the way I would just say, well, first, all those charts about launch are before Starship was operational, and most of that master orbit was done by Falcon. Yes. And Starship, Falcon is reusable. Starship is designed to be rapidly reusable, and this is a critical difference. Like, let's say, Blurgeon successfully solves reusability. There where SpaceX was 10 years ago.

Let's say China solves it. 10 years ago. Rapid reusability means that you extensively refer

to the rocket, the engines, everything, the fairing, it takes a lot of time. Maybe you can fly that

rocket again in 30 days, 60 days. Rapid reusability means that you can fly the same fly and land the same rocket multiple times per day. So if SpaceX and it's really hard to do

“rapid reusability, I think it would have been not trivial, but much easier to have Starship's working.”

If it was just designed to be reusable, that's not enough for what Elon wants to achieve of, you know, a mood-based, a colony on the moon, a colony on Mars, bass drivers on the moon. You need rapid reusability, and that is why Starship is such an engineering challenge, and will be such an impressive achievement when they have rapid reusability. But I do think that master orbit, rapid reusability in Starship means... When do you predict? I'll have that.

Rapid reusability is best, you think? I mean, we're going to find out. We find out, I'm going to be at Starbase today for the launch. We turn over cards and it's important for everyone to remember. Let's just say it's a fireball. SpaceX will still learn from this. They learn from failure. If you don't fail, you're not learning. Same way, if you're not wrong, you don't learn anything in that day. And this is a brand new rocket, a brand new booster,

a lot of new technology. There's a lot of instrumentation on it. So whatever happens today, SpaceX is going to learn and rapidly iterate. I don't know when I don't want to make a prediction, I would guess a year or two. Maybe sooner. I think that's most consensus, year or two, is sending perfect consensus here. We'll see. Even if everybody else solves reusability, master orbit from everything else will quickly asymptote to a very small number.

As far as wind will orbital compute the reality, I would say, well, it is important to realize there is a working H100 in Nvidia, H100 GPU in space today. Yeah, Andre Carpathi, both trained about a lot and used for influence. So this is, you know, there's a working GPU in space today. And Nvidia is making a space designed version of this, which will be different, because the heat sink has to be different. There's a bunch of weight that you put on it when it's

in a data center that you don't need in space. And you also have to reinforce it for the journey two space because these things are going to shake and break apart. The data center ones are not made to have that many G's put on them. So you're going to need an industry or an industrial strength one that gets to space that is a different profile. Yeah, Gavin. Well, one of the things that's been so magical about space access, they're very good at engineering the rocket and payload.

Some of the things that you can use semiconductors that are not designed

of my my firm attorneys is an investor in company called the Excite Labs that it's a matter of public record is going to be an essentially every star link. And the chips were not designed to go to space. They're not radiation hardened. You know, everyone, you know, SpaceX really liked a lot of the specifications on the chips. And then it's like, well, we'll see how they do with bad testing. And they just happen to pass. And so that is one of like one of somebody that's very

“under appreciated, I think about space. One of their specialities. What are their specialities?”

Yeah, but I think all right, you second half of 28 to first half of 2030 would be by point prediction. All right, let's do in video and then the market recaps. Since we have here Gavin and since Freeberg, you wanted to get it on that, in video blew out its earnings. Again,

Q1 performance is just mind boggling. 81.6 billion in revenue up 85% year over year, 20%

quarter of a quarter. High growth in stock market for those people who don't participate. 20% would be a high growth company year over year. They did that quarter over quarter, 58 billion of net income. And 48 billion in free cash flow. They're doing all this at 75% gross margins. They're growing massively. And they're obviously the most valuable company in the world at a 5.3 trillion dollar market cap stocks up, but 16% year this year with all that growth. That's a magnitude

of that 16%. And they've announced another 80 billion in additional buybacks on top of 100 billion in buybacks. They did at the start of 20, 23. So they're buying back about 4% of the company. They raised a quarterly dividend 25x from 1 cent of share to 25% cents per share. And they're CFO, so they're going to return 50% of the free cash flow to share home. There's that we're been a company like this, huh, Freeberg. The scale of this is just extraordinary.

Uh-huh. Yep. Don't, don't say it. They're having fairs. There's your market report from Freeberg. Don't seem selling foods. Yeah. It's a mm-hmm. He's got potatoes in the oven. I have a question for Gavin. He did a really interesting talk with Patrick O'Shanasi. And there was this one thing that I wanted to ask you about because I thought it was so interesting. You said, when you look at the revenue multiples of the chip companies and you look at the revenue

multiples of the DRAM companies, both cannot be true. In the context of Nvidia's earnings, can you just explain maybe in plain language for folks? I just thought it was so fascinating because

“it explains, yeah. It explains, I think, just to set it up. Where is value over the next five years?”

Like, I think if you looked at Leo Ashenbrenner, his fund has gone from like zero to five

billion dollars overnight and it looks like he's just got massive puts on the chip sector and he's

kind of rotated. So just give us context, Gavin, where's the puck going? Well, so maybe take the questions and reverse orders. For Leo Paul, it was clearly a brilliant man. I think he has a road scholar like 19. And I think my engineers are putting a pretty extraordinary number as I have yet to meet him. Yeah, I actually shares an office since here, if it's just go with a friend of mine. So I think I'll probably meet him sometime soon. But it's got to for that 13F

that he filed was at the end of the first quarter. When, you know, I would say we were in the, you know, the thick of geopolitical fears. And I think you saw a lot of puts on a lot of 13Fs.

“And I don't know that those puts are still there. Okay. You know, I think a lot of people wanted”

to be hedged for Ron. And, you know, now I think it's a little more clear. So I wouldn't read, I wouldn't read Leo Paul's 13F as being super negative on, on the same chips. Okay, on chips.

Second thing, I think cross actually, if you look at the valuations for all these the items,

they just, they can't all be accurate. You have memory makers that, you know, three to five times PE. You have Nvidia at a really low PE. You actually have, you know, some other accelerator companies are reasonable multiples. And then you have everything else. Everything in power, everything in cooling. And when I say power, I don't mean utility. So IPPs are actually quite reasonably valued. But power, cooling, even probably some of some of the optical names.

These are discounting very different things. If the multiples on the power, cooling, optical names are correct, Nvidia, memory, they're going up a lot. If the multiples on a video in memory are correct, everything else is probably going to underperform. The AI market is cross sexually inefficient right now, which is what I was trying to say. As far as the Nvidia quarter, they went to a newer party structure, data sitter, and AI, and the data center and

AI clouds, industrial, and enterprise. But I believe, as if we were to make it true apples to apples comparison. And broad cob, you know, there's a narrative that Nvidia is losing share to the TP.

And broad cob guided for 143 percent year over year growth in their AI semiconductor revenue

in the quarter that they will report. This comparable to the one in video to support it.

“I think, if you were to, and I just, I so wish they had reported slightly differently,”

I wish they'd done hyperscalers, AI clouds, and then industrial and enterprise. Because I think the segment that is comparable is the sum of hyperscalers, plus AI clouds, stripping out China. Because broad cob just did not have to try to business and video to it. And I think on that basis, in other words, and within the Western AI world, within data centers that need to be built, whether they're being built by core weave, XAI, Amazon, Google, Nvidia's AI business is growing

faster than broadcums. And faster that a lot of other companies that are, you know, see this part of this asix shared game story. And, you know, I think Jitsa has become, and you can, you can hear it. Increasingly frustrated rightfully so two things. I would say, what is the performance of stock? To, to, to have been vocal about that. Like, what is that on here? You were putting up record numbers and we're getting no,

like, credit. And yeah, I get it. And it just, how could there be a share loss narrative if I am getting share? And it is indisputably true that he is growing faster that hyperscaler capex, even without these adjustments. Yeah. I think the other thing that's so frustrating to him is these other a6. Are not being submitted for benchmarks? They're not in the sum of analysis and for inference backs, they're not in ML Perth. And the reason they're

not being submitted is they will lose. And you can't fight shadows. And until we see a clean benchmark of whether it's GB300s versus TPU, V7s are, you know, versus inferentials. Yeah,

“versus trading. Yeah. We're not going to know. And that's why a lot of these other”

channels. I think, I think trading is a great spot. Artbeaks are a bit of it. But nevertheless, if it is doing well, what do you become the largest company in the world? You kind of you tend to trade by observation, which would be at stair step patterns, where you kind of the multiple compresses compresses, compresses, because people are skeptical of the size. Then you have a re-rating, and then you re-rate, new floors established at a higher rate.

Yeah. I think there was one other really important thing in the beta quarter. It's they said if they thought their CPU business was going to be $20 billion. Yeah. Yeah. Yeah. That's a burden here. It means a carbonite for one of the world's largest CPU manufacturers. And I think that is a testament to, Nvidia has a unique position. They're the only company that works with every lab. And so that puts them in the best position to architect their chips.

They call it co-design for where the models are going. And I think that $20 billion CPU figure is pretty extraordinary. This is a thing like, at the end of this growth transaction last year, my kind of prevailing thought on this is we're going to move to these domain-specific architectures. I think that that was like a fethical play. We're just now

waiting for which models. But the reality is that that DSA market evolution is actually

“happening inside of Nvidia. That's what's so insane to me. That was my takeaway from the”

quarter as well, which is like Holy ****. These guys actually have domain-specific architectures, because they're doing these design programs with every, this is why back to sort of the, you know, when he does DC to DC with Elon and Colossus 3 or whatever, it's just, it's another game changer for everybody. He does, he makes nine. And then I think the cost of what you can finance these chips that these useful lives is really important. You had an incredible insight,

which is the amortization schedule for core weave and all these guys. They got saved. You may want to just explain what that is and why you said, I thought that was a great insight. No, thank you, Jamata. I appreciate it. So, when core weave and all these neoclouds came public, and by the way, this goes for the hyperscalge, too. There is a big bear case that, hey, these guys are amortizing their GPUs and CPUs over four or five, six years. And that's way too

short of a lifespan. The true lifespan of a GPU is more like two years. And therefore,

you know, the profits of all these businesses are overstated. The reality is, this was Michael

Barry, who put this out there. Yes, this would be clear. Yeah. And, you know, thank you, Michael Murray. We need bears. Yeah. Thank you. Yeah. That's like, it's like asking Gerardo about modern music. Well, I don't, I don't want to cast this person to a Michael Barry. He's a, he's a brilliant man,

Oh, my God. Millie Vanillie checking out these. What a waste of time. What a waste of time. Oh, poor amount. Come on, the program at the time. I'm like a bird. Kevin, Kevin. Yeah, I'm Kevin. Yeah, I'm Kevin, I'm Kevin, I'm having a chat. But now that we just aggregated in front of us, we have these different domains, specific accelerators. You can mix and match them.

“And I think the GPU stays in a lot of ways at the center of this constellation for a while.”

And you can put whether it's a grock accelerator, whether, you know, it's a cerebral accelerator and front of all GPUs, use grock or cerebral for decode. And then those older GPUs, they have a useful life for 10 or 15 years. And this means that you can finance GPUs. Hey, Corrie's lowest financing. I can't forget if it's six or seven percent. Six percent. It's going to come down. Yeah. But if you can get an asset back to low and an asset back to financing,

poor GPUs that'll lower rate than other chip. No, and that's a profound advantage. That quarter, single-handedly saved Neal Neal's clouds, this one, and it says, I mean,

they single-handedly saved them all. I think they, they should all, they should all say an incredible

thanks to Jensen. Because I interviewed the CEO of Corrie with Michael in Trader. Michael in Trader. Yeah. And he was saying, hey, listen, people have no problem buying and financing these over a six year period. And people are asking for things that are coming off. And that he thinks they're going to have years seven, eight, nine, they'll have some useful life, you know, in addition to that. So, yeah. So, he's like, I don't know what anybody's talking about here. Like, this is just

not informed analysis was his point. Like, the game on the field, and people are betting with their dollars with him. He has them pay in advance and sign six year contracts. If they didn't think it has six year lifespan, they wouldn't be signing a six year contract. Pretty straightforward. And they can't get enough of them. Okay. Let's end on this market, update macro picture, not great. Oil remains elevated. Although there might be a settlement every week. We have

there as a settlement coming. Maybe this time, a 16-time, it's a charm and the Iran more is going to wrap up. But we're in week 12 of it. And it's supposed to be four to six weeks. So,

words never get resolved quickly. That's one thing we've learned in our lifetimes.

Oil is driving inflation massively higher. Polymarket says 99% chance manipulation comes in at 4.2% or higher. Survey of professional forecasts is projecting CPI hits 6% you heard that right folks. We weren't just talking about the 3% handle, which we just hit. Now, people are saying 4.5 and 6% in Q2. And obviously that's a huge revision. And the narrative was, hey, more Fed rate cuts coming. Now, we're talking about Fed rate increases inflation is causing

obviously bond yields rise. 10 year hit, 4.6% and remember we've had best and only a pod multiple times. And his goal was to get that under 4%. Now, it's significantly above that number. And also, if we go around internationally, Japan's 30 year is at a high of 5.1% highest ever recorded UK yields, highest since the great financial crisis, Germany, highest since 2011. And in Korea, retail investors are borrowing, borrowing, record amounts of money to trade in AI chip stocks.

They also had a incredible running Korea betting on crypto at the peak. So, that's some sort of an

“interesting signal. Friedberg is your ult personality going to come out right now. Are you concerned?”

Is Dr. Doom making an appearance here? Or do you think this is manageable? How concerned are you? What is the point of being concerned when you have ridden the roller coaster to the top? And it is getting it's the center. I don't know what there is to be concerned about the the force of gravity is inevitable. The roller coaster will roll down. We will throw our hands in the air. We will scream, we as we go for the ride. Global debt to GDP is 310%. Reserve currency status

to the side. The spending problem at the federal state, local level, the spending problem at every country to basically keep economies growing to support existing leverage. Ultimately, creates a cascading effect. It ultimately breaks. And as it starts to break, you have massive inflation because the value of your underlying currency collapses. And then you have money printing and all this other stuff, which inflates the value of assets, which allows you to keep servicing your

debt. And the spiral takes off. And so we will just enjoy the ride. This is the moment, you know,

“30-year treasury 5.2%. This Japanese yield, some argue you might, you know, you should talk”

to more active market participants than me. But and probably some economists who trade the market. But I would think that this is one of those things that could be a catalyst for a credit crisis because there's a lot of people that are in this carry trade. And we'll see, you know,

Thomas here is a lot on Dr. Dooms, panic attack of the month. Is this time real? Is this the 17th

prediction of the next six recessions? What do we got here, Chumoff? Are you concerned? How concerned? Are you about these signals that are flashing? I think that's exactly what that is, season. There's signals that are flashing. I think there's pockets of the market that still makes sense that you can underwrite. If you want to buy businesses that represent the future and if you can find a few of those and you can get comfortable with that and you can own it for 10

“years, I think you buy those companies. And generally, everything else, I think you should not speculate”

and you should generally avoid, not just because it's an up market, but in every market. I've learned this the hard way. We've all kind of gone through this. As I get older, it's just

not worth the facetitudes of the market. Don't give me anywhere near the sugar high it used to

on the way up and it makes me feel horrible on the way down. So how I manage myself is I have a few companies that I really believe in. I have extremely concentrated, large holdings of those, large for me doesn't mean large for everybody else. And then otherwise, I just kind of stick to my dealing and keep my head done. It's a much more rational way to behave. So how many public stocks can you keep in your brain and still sleep at night, holding for the long term.

What's there? Is there a number for you? Is it five? Is it ten? Seven? It's five or less. Five or less. Five or less. And so what you're largest holding right now is what percentage of your network, which is a? I don't like like top two, maybe. Yeah. Who top two? Yeah, like one into one is twenty two is fifteen or one is forty two is twenty. I don't know. Again, it depends on the day,

“but I don't know. But it's just just curious. But I think that's I think that's really important.”

My point is there's no thirty things that I'm tracking. I don't, I don't have the time. I'm not smart enough. There's too much information. There's more things that I stay on top of. Gavin, you do this for a living. How many positions do you manage and what you're taking on some of the flashing signs that are saying, hey, slow down or maybe there might be a rack around the corner here, you know, when they do the checkered flag and the F1 or whatever the metaphor you want to use is.

Well, so one, I, I managed more than a hundred positions at my firm. And I do that with a team wherever thirty people now. So it's not just me and I work with some great people. Then three things can be true. Rates going up is very concerning. What is happening with AI right now withinthropic growing faster than any country, any company in history at massive scale? And certainly any country absolutely unprecedented. Yes, they're actually, they're they're down the size of,

you know, yeah, yeah, they're would pull up with a bigger than a hundred different countries for sure. Exactly. And keep it really fast and now profitable. Yeah, which I think really changes moment, which is this narrative. Yeah, how did that happen? So those things can both be true. And I wish it all remember the tech bubble happened with, you know, the tenure and the thirty-year much higher than they are today. And, you know, the the Nvidia of the tech bubble of Cisco

and it traded a hundred times forward earnings. And, you know, I think Nvidia is probably at a low teens multiple of kind of low to mid teens multiple of real earnings, you know, if you

that would be a bicep consensus, not a trade number. And then the third thing that I think is true

is a straight-up for most being closed while it's terrible for everyone. It is relatively the best for America. Because we're self-sufficient in energy, we're self-sufficient in food. We've become a massive exporter of oil. We're now the world's largest, not only oil and gas producer, but oil and gas exporter. And, you know, those three things can be true. What do they mean? I think it's probably hard for me to see with America being the most advanced by what is going on.

We're still the best currency. Yeah. So the best economy. We still have the best public economy. And we have the best private market companies. Yeah. And we are one of the greatest producers of oil in the world. So we're in good shape despite this international chaos. I don't think a dollar crisis is around the world. Now listen, like if, you know, the Buddhist bank was still in charge, you had the Deutschmark. And there was a currency with better fundamentals.

We would be at very high risk probably. But just because we're the best house. And what is globally a, you know, bad neighborhood of high debt levels? And we have AI in our corner. And we have energy self-sufficiency. And every day the straight-up form was disclosed. I think it's relatively

“good for the re-industrialization of America. Like I think, you know, you have to, you have to,”

all of you're saying it's a forcing function. It makes us just like COVID did be more resilient

process, essentially all of them. And what we make electricity with in America overwhelmingly

is natural gas. And you can look it up. In G1, it is down this year. The input cost for electricity in the rest of the world, you know, lots of different things. But allergies are very important one. And it's up 100, 200 percent. And so the straight-up form was is absolutely bad for everyone,

“but relatively good for America and relatively good for Trump's policy goals. And that's why I”

think he's in no hurry. Every day the straight is closed. And for whatever, he does seem like a relative thinker. Every day the straight-up form was as close as relatively good for America. It's terrible for Europe. It is terrible for Asia. Japan and China need that oil. Philippines need it. India needs it. Yeah. Yeah. And so all these things can be true. But the one thing I do just want to say is

rates going up. And inflation going up is never good. But we have to hold what's happening with AI

where the fundamentals are getting a lot stronger in our mind. And the one thing I would just add is AI has been seasonal. The market seasonal, you know, it often, you know, selling may go away. And AI fundamentals also appear a little seasonal in the past that's been because, you know, because college students, they used a lot less chatGPT and Claude in the summer. And generally people may be working a little less hard when the weather's nice. Now with the GTKI,

will the fundamentals still be seasonal? We will see. Oh, that's a really interesting point. Right. We see that e-commerce apps, subscriptions, but as investors in a lot of these companies,

we would always have these board meetings, Chema. Oh, Q3. Yeah. People are out gallevanting and they're

not playing candy crush or buying com or whatever. But oh, hey, Uber and Door Dash went up. People are traveling, etc. Okay. Final story of the week. We had a 48-hour jaunt by a bunch of tech CEOs and the president to hang out with she, a lot of high-fives, a lot of handshakes, a lot of great vibes. But coming out of it, we haven't seen anything definitive for Eidberg in terms of policy. This was supposed to be some big breakthrough. It would have downtree

effects on tariffs, on us selling chips to China. We did see a little movement there and the straight-of-war moves. We would become, you know, wonder twins with she and Trump reopening it. But nothing really definitive other than some soybeans being sold and some H-100s, H-200s, getting sold to buy, do in some of the top folks. So what do and maybe some clients got sold to? So other than a little BD, a little business development is, uh, Freyberg, what's the outcome?

Here, or was it just a bit performative in your mind? There was a question with the administration leave China with a grand deal that made everyone feel like there's a

“long range view on a partnership. But I don't think that that's what happened. There were a few”

announcements obviously around an intention to continue to work together in a cooperative way and find a path to partnership and intention to establish additional trade deals and, you know, there were some purchases of aircraft and some agricultural product commitments. But fundamentally the grand deal, the big deal that I would say reduces the de-escalates tension, probably didn't manifest as some had hoped it would. And I don't think it's any surprise

that Putin is with she today. And this is also a performative that following the U.S. visit, there's now a relationship bonding moment happening between China and Russia. So the story continues, you know, there is no happy ending and there is no rainbow-colored chapter three in this book. It's going to continue to be a dramatic arc as this rising power continues to challenge

“the United States and making the story continues. Were you expecting a happy ending?”

I can't answer that question. I mean, to the story of the China visit, not about talking about any other things going on in your life. But did seem like some planes and soybeans got sold. Some H-ringers, perhaps. But I think me, it wasn't like there was some grand deal that occurred. But it's nice to see them together, right? I mean, that is nice. I think it was successful. I think there's what you see on the

surface and then there's what happens behind closed doors. And yeah, but that's speculating too much. I think that it was a useful and productive trip. I think the the biggest thing that they probably got alignment on is just geopolitically the tic-tacto of what has to happen next. And I think that there's some amount of agreement there. I'm just guessing.

and Taiwan. You have, I would just say, here's, here's political chess board.

“Yeah. Here's what I would say, just very generally. Like, I think that there's a”

way to divide up the game board in a way that helps them and helps us. Gavin, any thoughts on specifically in video being able to sell more chips into China, material for the company, good for America. I mean, it's obviously a pretty debatable issue. I think I disagree with Moth on this. I think, selling and deprecated in video GPUs to China, lowers the odds of them developing their own alternative ecosystem, which would be a lot of power hungrier because you

use optical, they bring an optical a lot earlier for scale up fabrics. I think there's sound arguments

that this is stabilizing for the world and is the best highest probability path for keeping America

ahead in AI and kind of keeping control of AI. And that's almost a shame we've had to have this debate because now people like me have said this many times and China, if they didn't understand it, they probably do really understand it. By the way, that's not to say we shouldn't have had the debate.

“But that is what I believe, you know, reasonable minds can disagree.”

Anyway, what where do you think we disagree? I'm not sure. I agree with you. Oh, good. I'm not going to tell you. I'm just going to tell you. You started. You started with Italian agreement on, I'm like sell it. I'm like sell everything to that. No, what I was just saying is that there was what you see on the surface of what they can speak to the press. But I think

the most important thing was the negotiation of hey listen, like we're going to do these things.

You do these other things. And that's never going to get put out in a multi, you know, memode press release. And that's my point. That's all I'm saying. Yeah, I would you say listen, it's like American trying to talking is only good. We want to avoid the fact that he's trapped. That is very discussed and I'm trying to talk to about a lot. They're very aware of it. And they brought it up. Yes, and she brought it up by name. Yeah, talking is a

integral step of avoiding. Yeah. I have to say it's a nice resolution. I do it from my perspective. Like the greatest superpower Trump has is a ability to bond with dictators, monarchs, royal families, golf monarchies. He's just great at it. They see eye to eye. They vibe. He has no problem going to see them. He has no problem inviting them to UFC fights. Like this is like if she comes to the United States and he's sitting in court side with Dana White, like that's when we

know things are going to be okay. I do think he's probably given him the green light on like hey, Taiwan's yours. Just let's not have it during my administration. Maybe like we do a 30 year deal or a 20 year hand off deal. I wouldn't be surprised if something like that happens. Or a 100 year deal or a 200 year deal. But the one thing I would just say that I'm sure was communicated is hey, wars consume a vast amount of oil. You buy your oil from Iran,

Venezuela, and Russia. Russia alone can supply a fraction of what you need. And now it should be clear to the world. 203 or off the chessboard. Yeah. If you two three are off the chessboard, if you do something we don't like, Venezuela, oil, gone for you. American oil, gone. Brazilian oil, gone. And we'll say to all of our good friends in the GCC, we're so sorry, but we have to close the street to form laws again. So Iran, all of Middle East oil, gone for China. Now you just have Russia

and good luck fighting a war with just Russian oil against us, Japan, South Korea, Australia, UK, France, Germany, the world. Good luck. Who knows about Europe? But for sure, come to come here. For sure, Japan would be there. Oh, and Australia, for sure, Korea, for sure. Yeah.

“And so I think it's going to be a more stable world on the other side of Iran, however it”

results. And I think that's not a good good. I think that's a good insight. I think it's a great insight. All right. Listen, we missed your sacks. Come back soon. And Gavin, big shout out to Bestie Gavin. Thank you. Yeah, you're so great. Thanks for coming. We appreciate it. Hey, and your father-in-law, what's his name again? Jeff Painter. Jeff Painter. We love you. Thank you so much for all the kind words. We'd love to invite you to come to liquidity or the summit. I know you're a big fan of the

show. I wanted to give you a shout out here on the show. Thanks. I used your fandom of the show to leverage Gavin who was like, I can't make it today. And I was like, tell your father-in-law, we're going to get him backstage VIP tickets to the next two events if you show up today. And if you

Love you boys. I love you a little bit of pressure. That's my way of the board. That's mine from

“most strength. Yeah, so I'm always there for my father-in-law. Absolutely. We'll see you next time.”

You know what? I'm going to all the new ones.

Besties are gone.

“Get a room and just kind of want to thank you, Georgie, because they're all just useless. It's like”

this sexual tension that we just need to release them out.

We need to get more cheese on the ground. I'm going to all the new ones. I'm going to all the new ones.