The MAD Podcast: How AI Gets Built — with Matt Turck
00:33:34 · Matt Turck, Nathan Benaich
[00:33:34] S1: So you're not a huge fan or you don't have a lot of hope for the whole concept of sovereign AI, which is, you know, I'm asking the question at the time when Jensen just, did a charm offensive and investing offensive across Europe. He was in Paris. He was in London. He was in Berlin for GTC just yesterday or a couple of days ago. But from your perspective, that's that's that doesn't have teeth. [00:34:02] S0: I just, it's a bit like national airlines. The countries will buy planes from Airbus and Boeing and then slap their logo on it, that doesn't make it like yours. It's still someone else's airplane. [00:34:14] S1: You know? So... But open source could be... If you believe that open source is gonna remain, you know, within reasonable earshot of closed source models. Maybe there's hope there? [00:34:26] S0: Yeah, but then they're Chinese. So you have another, you have another... [00:34:30] S1: It could be American as a reflection. [00:34:33] S0: But they're not frontier. Like none of The US like open ones as far as I can tell are frontier. And the ones that have all tried ended up working for Jensen. Okay. So I think his strategy is great. Like I think different things like, do I believe that like buying NVIDIA GPUs gets you sovereignty? Like, no. Do I think it's a good commercial strategy for NVIDIA? Absolutely. [00:34:55] S1: Yeah. They sold 30 plus billion on that.
00:34:55 · Matt Turck, Nathan Benaich
[00:34:55] S1: Yeah. They sold 30 plus billion on that. [00:34:58] S0: Yeah. Something like that. Yeah. And if you look at the national bids of which like globally there's roughly like a 138,000,000,000 in sovereign air committed over the next couple of years. You look at the most popular vendors amongst all of these, like it's it's by far NVIDIA. I don't I don't think there's much of an alternative. I think it's it's a good it's a good start and you and you need to do it because it is the best technology, but I don't think one should kid themselves that doing so gets you sovereignty. [00:35:23] S1: But still in the vein of a of of your recap, big moment this year was, when the US government decided to deny access to frontier model to non US nationals. So do non US countries and companies have any choice but at least to try? [00:35:41] S0: Again, I'm in like a few different minds about this. One, I think it's like worth trying, but do I think it's realistic? So I think it's important to, if you are gonna try that they should... That country should try to launch systems which are gonna do the white collar work. Like I think in The UK, we still... We have like a lot of capabilities to go do this to try to build like an OpenAI Anthropic competitor or like DeepMind or DeepSeek or whatever. But actually if you look at the... [00:36:14] S1: It's an interesting fruit and slip or whatever, right? Because the irony of all of this is that DeepMind is a UK company.
00:36:14 · Matt Turck, Nathan Benaich
[00:36:14] S1: It's an interesting fruit and slip or whatever, right? Because the irony of all of this is that DeepMind is a UK company. [00:36:20] S0: Yeah, you're right. Yeah. And I think part of the problem with actually like The UK AI ecosystem and its success in actually leading the world is that for too long the UK government kept saying that DeepMind is a British company. And I think it's only started to unwind that like very, very recently. [00:36:37] S1: Why is that a problem? [00:36:38] S0: Well it's a problem because then it believes that it's already number one. The UK is the best place to do AI and we are the best at AI because we have DeepMind. And so therefore we don't... [00:36:47] S1: The attitude behind the claim, which is a problem. [00:36:49] S0: Yeah. Because then in like, you know, in policy rooms then, you know, individuals for advocating for more investment in AI or we need more, you know, we need to procure more systems from AI companies or we need to make our country more appealing for AI companies to start, get answered with like, but we have DeepMind. [00:37:06] S1: What about defense AI? You're an investor in defense companies. I mean, that feels like an area where, the need for sovereign AI since obviously warfare of the future is going to be very driven by AI. That feels like a place where...
00:37:24 · Nathan Benaich
[00:37:24] S0: Yeah. I think it's Yes. Pretty Yeah. Yeah. So, yeah. So that push really started. I mean, like post like the Ukraine war, like almost five years ago at this point, but more importantly, think it was like two years ago when JD Vance went to the Munich Security Conference and effectively said like, you need to invest in your own defense and get serious about this, you being, you know, NATO and Europe. And so ever since then, there's been, you know, a variety of different initiatives to give more capital to the new defense companies, to encourage governments to be providing loans to businesses to improve their supply chain. And that's, you know, created a set of like neo primes, like, defense companies that are trying to compete with prime contractors. So companies like Stark or Helsing being... Quantum Systems being like the the main ones in Europe. And then, you know, as as like warfare has changed, like it's gone from... I don't know, you know, developing strike systems over the... Over sort of mid range to, you know, hit tank, you know, battalions to now being like, well, getting pummeled like every day with hundreds and hundreds of FPV drones or various other kinds of aerial systems that are autonomous and, you know, now can no longer be stopped with jamming because they use computer vision or they're guided by these like fiber optic cables, which by the way have gotten much more expensive because of data centers. And so we need more, you know, novel like air defense systems. And so that's where companies like Alta Ares in France and others have really been pushing. And and as you said, like the supply chain is super important because, for example, like, you know, NATO wouldn't procure systems in in Europe that don't have at least 70% of the parts from from, you know, non China basically. And countries are really queasy about taking US protection or US guarantees at face value because they're shifting on a weekly basis. So, yeah, I think that's an example of a market which is sort of has to be domestic by by design and can breed new companies that are much more competitive than their US peers.
00:39:41 · Matt Turck, Nathan Benaich
[00:39:41] S1: So then if Frontier AI cannot be built, outside of The US, then, let's let's go back to The US, a part of your report on on research effectively calls, Anthropic OpenAI and Google as as as winners, as like the definite winners, which obviously, you know, has been, years in the making, but, there was a moment where it felt like there was a plurality of labs. Effectively, what you're saying is that no, like those three are the winners. And does that include, I guess nobody knows what they actually do, like SSI and thinking machines and like there seems to be like hundreds of neo labs. [00:40:17] S0: Yeah. Yeah. Maybe meta on the margin. Yes. Super intelligence lab. Yeah. Especially as now they're pushing towards like serving their models through API, but also having an enterprise business. So that one, you know, that might change over the next like six to twelve months depending on how their go to market works. But yeah, would say it's probably those three plus meta. [00:40:33] S1: So your view is that the the advantage is gonna keep compounding and that's gonna be the state of the market
00:40:33 · Matt Turck, Nathan Benaich
[00:40:33] S1: So your view is that the the advantage is gonna keep compounding and that's gonna be the state of the market [00:40:39] S0: versus I think so for like the general purpose frontier. Now there's there's like examples of perhaps like a really focused bet on a on a particular capability, which has like... Where you can make certain trade offs to the model in order to get much better performance at a task. Like I'm referring to, for example, these classification models effectively, like JEV, which can grow really, really quickly and become popular. Again, TBD, how long it lasts. But I think it's I think it's an encouraging sign for entrepreneurs that shows that, you know, you can take a focused resource bet and it can pay off. But over time, it's again like TBD if there are like these kind of gaps and capabilities that are sufficiently exploitable. [00:41:17] S1: So what do you think happens to the dozens of neo labs? I mean, not to keep talking about Europe, like just in London, there's three of them. Right? There's, the David Silver thing and, like, another two the... You know, in The US every few weeks. There's one, you know, Jeff Dean's new lab and so on and so forth. So what happens to those?