00:28:49 · Jaimin Rangwalla
[00:28:49] S0: Yeah, so for some amount of the last, the greater part of the last three or four years, it was very much a one CPU to even eight GPUs. That was kind of the, and it had gone up to 16 GPUs, which was all of the math and all of the computation is happening at the GPUs, and then they just kick it out to the CPU when it's time to execute the final step. But now the ratio has been actually moving to one CPU to four GPUs, and so it's improved kind of by 2x already. And we think it actually has a chance to flip the opposite direction, which is one GPU to four CPUs. And some people, very aggressive, say that it could go to one GPU to eight CPUs, right? And so I think that it's just more a function of how many of those tasks are being completed and how many of those new tasks are being done that don't require the parallel compute, but will require more just serial task completion. And I think that, again, it's just another way that I think about it is there's 7,000,000,000 people or so, plus or minus. Everyone has their technology needs. But if every person has, you know, a thousand, right, the 7,000,000,000 multiplies by a thousand. Right? And so just think about how many more people effectively are on the earth than there are today. I think that all of those people are going to require serial processing, parallel processing, memory, like all of the things that every human would have. Think that it's just another way to think about just almost population expansion. If we expanded the population by a thousand, and this is a digital population that we're expanding, just all of the resources that are required for that digital population.
00:30:21 · Molly O'Shea, Jaimin Rangwalla
[00:30:21] S1: Who are the main players within this stack? [00:30:24] S0: On the CPU side, it's Intel, AMD, and ARM. Amazon has done a great job. They actually have one of the most efficient CPUs, but they've always kind of kept it internally. They bought a private company that helped them do this, and it has helped, I think, drive AWS success, especially as we move to CPUs. I think it really helps be a tailwind to their business. But Intel for years has been almost like the forgotten child in semiconductors. They had a lot of missteps along the way, whether it was a technology issue, product issue, They've had a lot of leadership changes, but they have an amazing CEO now. Sometimes we try to keep things simple, which is you have a four to one going to one to four, which is mathematically a 16x improvement in market size. And then you have Elon Musk giving a stamp of approval to Intel and increasing the pace of innovation. And so I think that to me, it's just some of the best thesis are the simple thesis, and you don't want to overthink it. And I think that just the combination of that for a stock that, yes, it's had a big move this year, but if you think about every semiconductor company over the last four years in this heyday of AI, they're all up five, seven, 10x. It's still a laggard over any period beyond twelve months. So to me, there's still a lot of catch up for that company. [00:31:40] S1: Is that really exciting for you? Because you started your career in the semiconductor space, and now you're like, I mean, that was gaming back then, and now
00:31:40 · Molly O'Shea, Jaimin Rangwalla
[00:31:40] S1: Is that really exciting for you? Because you started your career in the semiconductor space, and now you're like, I mean, that was gaming back then, and now [00:31:48] S0: I will tell you the first seven or eight years of my career, all I did was work on it with shorts because semiconductors are viewed as the deep cyclical business. You overbuild at the top, you burn a tremendous amount of cash flow, very fragmented. Just companies go up. They make one product. They sell it to Apple. In a year, Apple says, Okay, we're going to now double source you or triple source you, and the companies go down 90%. Now, I spent almost all of my time working on shorts. We never really owned semiconductor stocks. We owned internet stocks, software stocks, other types of stocks. So to me, it's almost just like, wow, my career has come full circle. I have the chance to make decisions at the portfolio level at a time where the sector that I started twenty years ago is now the most profitable sector, generates the most cash flow. Like, I never would have thought I would tell you that Samsung and Hynix together generate more cash flow than every hyperscaler. Like, it's crazy. Like, it is crazy, but it is exactly what is warranted in this time and why you have to always be changing how you think. If I had just stuck with the view from fifteen years ago that semiconductors are shorts, it would have been the most costly mistake that we would have ever made because those are the stocks that are dominating the market today.
00:31:48 · Jaimin Rangwalla, Molly O'Shea
[00:31:48] S0: I will tell you the first seven or eight years of my career, all I did was work on it with shorts because semiconductors are viewed as the deep cyclical business. You overbuild at the top, you burn a tremendous amount of cash flow, very fragmented. Just companies go up. They make one product. They sell it to Apple. In a year, Apple says, Okay, we're going to now double source you or triple source you, and the companies go down 90%. Now, I spent almost all of my time working on shorts. We never really owned semiconductor stocks. We owned internet stocks, software stocks, other types of stocks. So to me, it's almost just like, wow, my career has come full circle. I have the chance to make decisions at the portfolio level at a time where the sector that I started twenty years ago is now the most profitable sector, generates the most cash flow. Like, I never would have thought I would tell you that Samsung and Hynix together generate more cash flow than every hyperscaler. Like, it's crazy. Like, it is crazy, but it is exactly what is warranted in this time and why you have to always be changing how you think. If I had just stuck with the view from fifteen years ago that semiconductors are shorts, it would have been the most costly mistake that we would have ever made because those are the stocks that are dominating the market today. [00:33:01] S1: We were in the kitchen, and I think the analogy was it was like the nerdy kid who became cool.
00:33:01 · Molly O'Shea, Jaimin Rangwalla
[00:33:01] S1: We were in the kitchen, and I think the analogy was it was like the nerdy kid who became cool. [00:33:07] S0: It's exactly that. I mean, they were the CEOs that no one ever wanted to sign up for meetings for at conferences. Everyone to go meet the Facebook CEO, and everyone wanted meet the Google CEO. Everyone wanted to meet, like, you know, those were the companies of the 2010s, and now it's like the opposite. You go to, you know, one of the bank's conferences, like, there's like 4,000 people wanting to listen to Jensen speak. It's like unreal. [00:33:31] S1: And GTC is like a Taylor Swift concert. [00:33:34] S0: It is an event. It is an event. I've been going to GTC since 2016 was my first one, and it was like a small hall at the San Jose Convention Center that was half of one building and like 100 people there. It's amazing what it has turned into. [00:33:50] S1: It's crazy how he does the whole presentation without a teleprompter. Two hours. Yeah. That's so wild. Yeah, it's pretty incredible. So I'd love to talk about how data centers are fitting into this space and how you're monitoring whether or not build outs are happening and that kind of thing.
00:33:50 · Molly O'Shea, Jaimin Rangwalla
[00:33:50] S1: It's crazy how he does the whole presentation without a teleprompter. Two hours. Yeah. That's so wild. Yeah, it's pretty incredible. So I'd love to talk about how data centers are fitting into this space and how you're monitoring whether or not build outs are happening and that kind of thing. [00:34:07] S0: Yeah, not in space, And it helps me kind of think through, like, how are bottlenecks easing, not easing? Like, is something changing in the environment? Like, at the end of the day, for me, the most important thing is what is the rate of change, and is the rate of change moving towards tighter rate of change, or is it easing? And if it's easing, what is causing the easing and what is the degree of easing? And is it easing to the point where it's a problem, or it's just easing to the point that it's healthy and it just facilitates the growth? And so I think that we're super focused on the data center companies. We're super focused on neo clouds, hyperscalers, on the ground where all the new build outs are happening, where is power available, where is equipment available, where is labor available, and we're trying to track all of that in real time.