01:10:42 · Dylan Patel, Jordi Hays
[01:10:42] S3: Well, Elon, you have to remember what Elon's trying to do right now. Right? He's taking SpaceX and turning it into a Neo Cloud. Right? In in in some sense. Right? He's building ridiculous amounts of compute. And, you know, he's only got... You know, if you talk take his balance sheet, you know, he's got, what, like, $80,000,000,000 of cash on it. $20,000,000,000 is gonna go to, you know, rockets and stuff like that. But then the other 60,000,000,000 he can spend on compute, he's raising another 40,000,000,000 right now. At the same time, he claims he wants to build 13 gigawatts. 13 gigawatts, if you build all of that out, is is, you know, you know, 400 plus billion dollars. Right? You know, 500 plus billion dollars. So so where does he get the cash? Right? He has to monetize his compute as effectively as possible to able to pay for all the CapEx that he wants to do. And given what's going on in the spot compute market, right, you know, being able to sell GPUs for, you know, $15 an hour, when the TCO of them is only, like, $4 an hour, you you have this massive delta. And so he's exploiting that, and he needs to focus on how do I build the most compute, period. Right? And that's that's step one. Step two is, okay. How do I use that compute most effectively to dominate the universe? Right? It's sort of like, I don't know if you're, like... You take a evil look at it. I'm sure it's just to... It it is just to benefit humanity. But the only way [01:11:57] S0: you can build 13 gigawatts a little bit.
01:11:57 · Jordi Hays, Dylan Patel, Max Kan, Tyler
[01:11:57] S0: you can build 13 gigawatts a little bit. [01:12:00] S3: Yeah. But the only way to build 13 gigawatts or even 10 or even seven financially is if he makes as much money as possible from the compute he has. And so if that means, hey. He ripped some compute out of the x AI's team to sell it to Anthropic and Google, he had to do that. Right? Because, ultimately, a year from now, his x AI team will have a lot more compute to deliver by doing that. And and and so he needs to be able to generate all this cash flow and and and sort of bridge the financial gap to get him to being able to spend $3.04, $500,000,000,000 on CapEx over the next year or year and a half. [01:12:34] S2: Yeah. And he's gotta convince people that the the going rate for these gigawatts is not the 12 to 15, you know, billion a gig that people are signing five year contracts for. It's the, you know, 40,000,000,000 plus a gig that he was able to sell this, like, short term contract to Anthropic for earlier this year. But if you look at people who are actually all in on the personal assistant like, you know, a meta news, I I do not see them seeing, you know, stopping the subsidization anytime soon because they know it's gonna become economical at the year from now, and all that really matters at this current point in time is we we get the adoption, you know, we get the users. [01:13:08] S0: Makes sense. Makes sense. Any other questions, Tyler? [01:13:13] S7: I think... No. This is great. [01:13:15] S0: We covered it. Yeah. What else is top of mind for you guys before we jump off?
01:13:15 · Jordi Hays, Dylan Patel
[01:13:15] S0: We covered it. Yeah. What else is top of mind for you guys before we jump off? [01:13:21] S3: I I think one other thing that's really interesting is, you know, the frontier models are actually not the best at certain tasks from open and anthropic because they're safety classifiers. Right? Google and and Meta and the Chinese models are are better at, like, cyber tasks, at biotasks, at certain alignment tasks, and that presents a really interesting opportunity that certain markets should just actually not use open ananthropic unless they get into some specific sort of tent, that open air anthropic are willing to give, which plebs like, us at least are not able to. [01:13:57] S0: On, just reminded me something I wanted to ask earlier. It feels like there's a massive incentive right now for companies to come out and say, you know, we're bringing compute on prem and we're running open models and we're getting... How much should people read into that? I think the headline yesterday, I couldn't tell if it was real, is that Goldman is sort of banning the use of Claude Code and Codex internally and other coding agents. To me that seems kind of like an insane move given that they're, you know, underwriting underwriting the IPO. And it also feels like you're you're sort of betting against frontier progress and and capability increases. But, like, how should how should people think about those kind of headlines?
01:13:57 · Jordi Hays, Andrew Megalaa, Max Kan
[01:13:57] S0: On, just reminded me something I wanted to ask earlier. It feels like there's a massive incentive right now for companies to come out and say, you know, we're bringing compute on prem and we're running open models and we're getting... How much should people read into that? I think the headline yesterday, I couldn't tell if it was real, is that Goldman is sort of banning the use of Claude Code and Codex internally and other coding agents. To me that seems kind of like an insane move given that they're, you know, underwriting underwriting the IPO. And it also feels like you're you're sort of betting against frontier progress and and capability increases. But, like, how should how should people think about those kind of headlines? [01:14:48] S5: I think this is really funny because... I was... Go ahead. Yeah. I was gonna say, like, it's really funny that they would do this because, like, even on our finance, like, benchmark, it was very clear that none of the models were even able to, like, successfully do a task of an analyst. Like, the closest one got, like, 50% of the credit or something. So, like, even though if you use open models, you're just, like, shooting yourself in the foot because you're just, like, using worse models. And, like, even the frontier models aren't there. Like, imagine how much worse, like, an open source model would be. [01:15:19] S2: Yeah. But I think I think on prem slash open source, it is a real market. Is gonna keep growing, like, pretty fast in absolute terms. [01:15:28] S5: But if
01:15:28 · Andrew Megalaa, Max Kan, Jordi Hays, Dylan Patel, Tyler
[01:15:28] S5: But if [01:15:29] S2: you sort of believe that the world has these fundamentally intelligence fall in that domains, which, like Dylan was explaining at the beginning, and that people will be able to figure out how to use frontier intelligence in order to sort of earn high ROI in those domains relatively quickly, then you would expect sort of the market for frontier intelligence to grow faster on a relative basis than sort of the on prem slash open source market, even if, like, both of them still do pretty well kind of just in isolation. [01:15:57] S0: Yep. That makes sense. Cool. [01:16:00] S3: Yeah. I mean, we we we do believe the bulk of tokens will be non frontier models. We just think the bulk of dollars will be frontier models. And so, like, you know, great if Goldman bans their random, you know, year one, year two analysts from using Claude Code, you know, that's probably a shortsighted mood... Move. But you know who they're not gonna ban from using Claude Code? All of their pen testing. And they're gonna have to spend a lot of freaking money on pen testing because if Goldman's not secure, that's really bad. [01:16:31] S0: Yeah. Yeah. Well said. Cool, guys. Very... Thanks for thanks for coming on and breaking it down. And I'm excited to see how quickly all of the different participants can can hill climb this. You've certainly given them a lot of work. It's gonna be exciting. See you guys. Awesome. Cheers, guys. Have a good one. Let's see if there's anything else we wanna cover. I think we [01:17:02] S7: got John coming back on. Oh.
01:17:02 · Tyler, John Coogan, Jordi Hays
[01:17:02] S7: got John coming back on. Oh. [01:17:03] S1: Bring me back. [01:17:03] S0: There he is. [01:17:04] S1: I got the flash bang, the the the weather change outside the hotel room. So it's full, much brighter than before. But you can do a three up if you want. We gotta go through a couple a couple of more news items. We gotta talk CrowdStrike. First, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. No. I like this. So CrowdStrike's acquiring two AI security startups for a combined, $495,000,000. Fiddler AI and Dreadnode, such different names. One is, like, the most whimsical over just fiddler. [01:17:44] S0: The person who plays the violin, particularly in folk bluegrass country or traditional rural dance music, the fiddler. [01:17:51] S1: I love it. I love it. Yeah. It's it's it's funny. They're, they're taking security so seriously that they're just doing bulk acquisitions, announcing them simultaneously. But George Kurtz had a great post as well saying that he's creating the the the emergency button. What? I forget I forget exactly how [01:18:08] S0: The kill switch.