The Information's TITV
00:22:36 · Umesh Padval
[00:22:36] S2: Great question. I've been long enough in the semiconductor and hardware business. I've seen three cycles of up and down. One thing which is common in the semiconductor, is demand and supply always cross each other. Few years, there's feast. Few years, there's famine. And when famine happens, structural problems change. So my prediction is this cycle has lasted for a lot longer than I thought because of the incredible demand from AI infrastructure. But at some point, enough fab capacity is coming online. Enough utilization of GPU is happening because right now, it's at 30 to 40%, and it's gonna go up to 80% just like the CPU utilization in the past went up. And the third thing is applications have really not taken advantage of all the infrastructure. As all these three things happen, there's gonna be a time in the next twelve to eighteen months or somewhere around there where supply is gonna outpace demand. As soon as that happens, believe me, a lot of these neo clouds, which are hundreds of them which have come out, will face a difficult moment in terms of consolidation of that as well as the inferencing companies you've seen raising money every year. I feel both those are going to be challenged when the supply and demand supply outpaces demand, and then pricing pressure will come on all the semiconductor companies. At that point, this is the way history to... You know, if you learn from history, that's what happens.
00:24:13 · Akash Pasricha, Umesh Padval, Ben Pouladian
[00:24:13] S0: But, Umesh, isn't there an argument to be made here that we've seen the Neo Cloud boom with the NVIDIA focused companies. Now we have FluidStack, of course. I mean, don't you think that we... Before the supply demand dynamics equalize here a bit, I mean, I'm sort of seeing maybe Neo Clouds moving more to TPUs as a way to differentiate themselves. Do you see that happening? [00:24:38] S2: Yeah. Meaning, I think people will have GPUs, TPUs. They could have AMD's processors available. They're new clouds, basically. But the business model is GPUs for rent with the software. Right? But if the demand stops Yeah. That falls under supply, what do you do? Customers are gonna say, what contracts? I don't remember what contract is. You can't ship to me. I'm gonna negotiate the price down, and that's gonna put the margin pressure as well as these new clouds are heavily leveraged with debt. And how that works out when the demand outpaces supply is a big question in front of us in the next few years. [00:25:19] S0: Right. Ben, Ben, I'll I'll let you take us home here. You you were gonna say something? [00:25:24] S3: I mean, I agree with the consolidation, but at the same time, one of the differences between a TPU and a GPU, the GPU obviously has CUDA, I don't know, a 100,000 developers around the world that are constantly improving it. And then the NVIDIA libraries behind it, like, cue DSS and cue bio, like, all that stuff runs on GPUs and is optimized for that. [00:25:47] S2: The
00:25:48 · Ben Pouladian
[00:25:48] S3: challenge is with, like, the TPU, because it was closed source for Google's own consumption, they need to basically build a developer community from scratch from the outside and open it up to everyone and kind of open source it. So there's a mismatch in timing and history of these two different types of technologies, which will take time to ramp. And at the same time, obviously, with NVIDIA and CUDA, you're getting... The whole team there is basically working to squeeze out more improvements from the stack all the way from the walls of the building, from the electrons coming in to the tokens coming out of Dynamo and all these other different projects that they have, which is pretty it's interesting because they basically designed the whole data center from soup to nuts, optimized on their stack with the DSX program or anything. So Google has some catching up to do if they really want other people to embrace their technology and their chips. It's a good step in the first direction, but you really need to open up the kimono and embrace developer communities to show what you have. And I agree with Umesh on the Neo Clouds. I've... There's a clip where I referenced Bane from Batman. You know, one of one of them is gonna die. It it has to be found in the wreckage. I mean, that's part of it. There'll be consolidation. It comes down to what is your your cost of electricity and your operating costs and your financing costs and what are you producing tokens at. And some people will be backwards. And you have other neo clouds like SpaceX, which now have a full stack and a use case to basically use that token demand for inference on their prod... Products like Grok or X or even the Optimus robots that are coming out. We really need to have a
00:27:39 · Akash Pasricha, Ben Pouladian, Umesh Padval
[00:27:39] S0: When demand they be... You know, when they become a a single company, they'll have they'll have lots of more engineers. [00:27:45] S3: Yeah. That's coming. [00:27:46] S0: That's coming. Power problem. [00:27:47] S2: What... Okay. Akash, one point I'll make to Ben, I agree with Ben on the CUDA ecosystem. What is changing, and it's a relatively one year change, is Claude. Claude is so good at creating emulation of the CUDA that a lot of my startup companies can use Claude to try and emulate and get to the CUDA compatibility faster. So that's something to really watch out. Claude can help on that. [00:28:16] S0: Great. Okay. Well, I want to thank you both for coming on. That is Umesh Padval from Seligman Ventures and Ben Pouladian from BEP Research here on TITV. [00:28:25] S2: Thank you, Akash. [00:28:27] S0: Amazon has been experimenting with a pretty shocking new way to list products on its website. The company has been listing two fifty million products that direct to rival retailer and brand websites, though merchants have largely been left in the dark on how any of this is actually working. My colleague, Catherine Perloff, who covers Amazon, wrote about that in a story out this week. I want to bring her on to share more of her reporting. Catherine, welcome back to the show. It is great to have you here. Tell me about these outside listings that Amazon is experimenting with.
00:28:27 · Akash Pasricha, Catherine Perloff
[00:28:27] S0: Amazon has been experimenting with a pretty shocking new way to list products on its website. The company has been listing two fifty million products that direct to rival retailer and brand websites, though merchants have largely been left in the dark on how any of this is actually working. My colleague, Catherine Perloff, who covers Amazon, wrote about that in a story out this week. I want to bring her on to share more of her reporting. Catherine, welcome back to the show. It is great to have you here. Tell me about these outside listings that Amazon is experimenting with. [00:28:59] S5: Yeah. Hello, Akash. Basically, on Amazon right now, you can shop, browse for products Amazon does not sell, which is kind of surprising. And the way that works is there will be listings that pop up that will say shop direct. So when you see that, you can click to another retailer's website and buy the product. Some of the prominent brands displayed are Alo Yoga, Warby Parker. Both of these companies don't sell on Amazon, but you can find their products on Amazon and then go to this site and buy them. Amazon also has an option for some products, a more limited selection to actually buy the product on Amazon, even if Amazon doesn't sell it, but they use an agent to go out to that retailer site and buy it for you.
00:28:59 · Catherine Perloff, Akash Pasricha
[00:28:59] S5: Yeah. Hello, Akash. Basically, on Amazon right now, you can shop, browse for products Amazon does not sell, which is kind of surprising. And the way that works is there will be listings that pop up that will say shop direct. So when you see that, you can click to another retailer's website and buy the product. Some of the prominent brands displayed are Alo Yoga, Warby Parker. Both of these companies don't sell on Amazon, but you can find their products on Amazon and then go to this site and buy them. Amazon also has an option for some products, a more limited selection to actually buy the product on Amazon, even if Amazon doesn't sell it, but they use an agent to go out to that retailer site and buy it for you. [00:29:51] S0: Okay. So this is like... This is pretty shocking. I'm not going to lie. I mean, like the idea that Amazon is going to let people buy things without the whole infrastructure, the delivery, I mean, like, did you see this coming when you started reporting this?