Invest Like the Best with Patrick O'Shaughnessy
00:37:08 · Sarah Guo
[00:37:08] S2: use cases or the bioweapons, biosecurity use cases. We just need to look at that reality and think about what are the other ways in which you control this. But attempting to stop technological progress and openness around it. If you did restrict use of open source models in The United States, you'd basically just restrict law abiding American businesses and slow them down or move profits, different pockets, prevent certain uses of them because the actual attackers or people who have adversarial uses of these things are not affected by your restrictions. You're restricting your own people. My view would be there should be testing and understanding of these models at the frontier. People are very worried about backdoor like behaviors in Chinese models. The thing to do would actually be, like, have a very rigorous set of safety testing on that. Like, let's go find out as much as we can instead of talking about how there might be this issue in a speculative way where there's not been nearly enough actual research on it. The future where there is broad access to intelligence too cheap to meter, as Sam put it, that is coming. It will be supported by open source. Businesses want it to control their own destiny for economics, for capacity. If given those models and the increasing democratization of the skills to post train these models, build harnesses, use tasks, The economy is so big. Every individual has these use cases that are not going to be imagined by a researcher in a frontier lab. You can't imagine the diversity of reality. Even if you trusted the models to go figure out what to do, they have to get there. The best way for that to happen is a ecosystem of businesses as we've always had in the economy, cheap infrastructure.
00:39:07 · Patrick O'Shaughnessy, Sarah Guo
[00:39:07] S0: Do you ever worry that an alternate version of US history is that there was energy too cheap to meter because we built a thousand AP one thousands or something, much like China is doing now in nuclear. And just a set of circumstances happened such that, like, we just didn't get that. Do you ever worry about that as it relates to intelligence? It does seem inevitable that we're gonna have abundant, accessible, low cost, valuable intelligence. Can you imagine a world where we don't? [00:39:31] S2: Yes. Absolutely. And I also think I can imagine very easily a world where we don't have that in a competitive way because it is essential to economic competitiveness and national security. There is not a version of the world where we rebuild our industrial base without automation in The United States. If we don't import people and our people are expensive and we lack some of the skills, want to produce a lot more goods and have a more resilient supply chain. [00:40:00] S0: Just doesn't add up.
00:40:00 · Patrick O'Shaughnessy, Sarah Guo
[00:40:00] S0: Just doesn't add up. [00:40:00] S2: Who's gonna produce this stuff? People in The United States do not want to work and should not want to work for $13 an hour doing a very inhuman job. Don't I think it is inevitable that we are competitive. And I think we need to like make that decision actively. The version of it that I think is very possible is that people are rationally afraid of the impact of AI on jobs or dislike the capture of rent by a small number of technology firms, rejecting the idea of being in the permanent under class and then connecting that to a anti capitalist orientation. That contingent of thought can slow down build of energy and infrastructure and industrial capacity. One of the most important inputs is compute. If we don't have it, we're naturally not competitive or we're at least not independent. I think we're gonna start talking much more about compute independence. That's a big problem.
00:41:00 · Patrick O'Shaughnessy
[00:41:00] S0: So on this point of compute independence, what does that mean? What are the missing pieces of compute independence? Like, the most obvious one might be more fab... More leading edge fab capacity here in The US or something like this. There's all sorts of stuff upstream. There's particular kinds of glass, very important that's controlled by basically one company that TSMC has like monopoly on the supply of. There's all these component parts. But if you think about compute independence, like if so much boils down to compute, what's to be done about it? Are you trying to invest in companies that are solving that problem? What is the problem? Say a bit more about what it'll take.
00:41:33 · Sarah Guo, Patrick O'Shaughnessy
[00:41:33] S2: Well, if you just work backwards from a data center full of GPUs, cooling, powering, training, and inference so we can support the use cases. All of those inputs, it actually looks a great deal like energy independence or something like that. All those inputs, there is a global supply chain. I've got my TSMC mug with me. There are parts of that supply chain that are like a very thin sieve in a place that is not necessarily stable or accessible to The US and allies. A different version of the world that will take a bunch of investment and national security and energy policy is, for example, Jacob Helberg is working on something called Paxilica. And it was like, okay. For every part of the supply chain, can we invest in more capacity and figure out what the independent paths are? I don't think that means it's all got to be created in The United States. Comparative advantage is real. But having more than one source is a position that everybody wants to be in. When we think about the components that we've invested in, we've invested in the labor gap for data centers and robotics. We've invested in nuclear energy. We've invested in alternative chip architectures. We keep looking at people who are essentially data center builders, solar and battery installers of some kind. Part of this is the actual capacity buildup. That's a very operational business, like somewhere between operations, some technology, and real estate. [00:43:03] S0: And financing. Yeah.
00:43:03 · Patrick O'Shaughnessy, Sarah Guo
[00:43:03] S0: And financing. Yeah. [00:43:04] S2: And financing. Absolutely. That's probably the dominant thing. We have not invested in it yet despite looking very closely. I'm not opposed to it, but fundamentally, I'm a technology investor. Like, I wanna understand what it is that is the durable product asset people are building. [00:43:20] S0: What are the base debates inside of conviction? You've got such an interesting team. Like, partner is a very technical person, amazing engineer. The young talent in your firm brings really interesting perspectives. So I'm imagining great lively debates about things that matter, etcetera. What are the big debates today? [00:43:38] S2: Alad and I have a podcast called No Priors. This premise of some of the things you believed, especially about markets as a pastor, like no longer true is an interesting one. And regularly, we look at companies in domains that are not traditional software domains. Not even traditional software domains, but can you make money in this market at all? Venture investing in semis companies, Lip Bu Tan aside, was like a god awful business for the longest time. The returns [00:44:10] S0: Everyone told me this.