Relentless
00:29:36 · Sam D'Amico
[00:29:36] S0: I mean, you go to BYD and then you have a very integrated campus where it's like, oh, like, they have much of the dependencies of the electric stack all in house in a lot of cases. Now, they they also go to sub suppliers. They also do do all sorts stuff, but like, you have the optionality of being able to go full vertical. And then you see, like, the the... Like, you see what Elon's been doing lately, especially with, Starlink and and and and and stuff like that. And you're like, okay, this guy is trying to go full vertical where he has his own industrial concern. Now, I would argue you need to start from demand and pull everything up because you can't finance this with venture dollars. Like, I I don't think you can... No. Some of our friends have successfully financed large manufacturing concerns with venture dollars, but, but, like, you're... That's not gonna... Like, that's not the way that the capital markets work in The United States. And there's actually... I think one of the other pieces of kind of deindustrialization that people forget is we didn't have national bank branches in, in the, like, you know, like, in in 1900 or whatever, like, when, you know, this facility was built. But if you had a local bank in your town, it could only invest in, like, the the the the crazy people in the town. And so it was a lot actually, in some ways, easier to get capital because the markets weren't as mature. So they're like, I guess we have to invest in, you know, stove guy and injection molding guy because they're the only game in town doing doing stuff that actually can, you know, make me returns. Now, we've replaced some of those systems with ever bigger venture funds that are kind of more like private equity firms, especially at the top level. But, like, I I think that you see, like, what Palmer Luckey doing with Arabora and all sorts of stuff. It's like, there's definitely a reaction to to, like, we we we we forgot how to do the capital market side of this thing. But there's another thing that I I think is really important to just highlight is we're in an AI boom right now. And I think it's like there's an enormous opportunity from the AI boom and people are missing what it is. So the the missing pieces, people think, oh, we can onshore stuff because we can get humanoid robots and, like, it's gonna magically solve these things.
00:31:28 · Sam D'Amico, Aaron Slodov, Ty Morse
It's like, you can just automate the factories, whatever. You know, you know, honestly, that's stupid because you look at what... How Starlink onshore their consumer electronics line into the millions of units, it was a manual production line that they'd later automated. Like Elon's little algorithm or whatever, says the last step is automating. Like, he learned that the hard way because he laid out an automated line at Tesla the wrong way. [00:31:50] S1: And almost killed [00:31:51] S0: the company. And almost killed the company. And so... But the point is, like, you you can actually start manual with final assembly and be totally fine, and this stuff works. So so going back to the AI boom, we're miss... What we're clearly missing. Currently, are building... Like, the hyperscalers are ordering tens of thousands of units of, like, let's call it 3 to $4,000,000 data center racks. And these things have, like, you know, hundreds of GPUs in them in some cases, like a 100 GPUs, some... Something kind of crazy. They've got all of the various pieces. They've got energy storage built in. They've got, like, they've got all of these different, like, they've got advanced power supplies. They've had the full electric stack at the most advanced node. They have all this photonic stuff. They have, like, all of these key technologies, and the demand is there. The... And the demand is they're installing it in The United States. [00:32:46] S1: And... Until until all these states shut it down. [00:32:48] S2: Well, then... And then...
00:32:49 · Sam D'Amico
[00:32:49] S0: Well, the enemy of manufacturing is Nimbeez, but... Yeah. And, you know, some of them could be... I'll I'll go into conspiracy theories later. But basically, basically, the the point is like, there is massive demand for the most advanced computers in the world. And these are, in some sense, electromechanical systems like they've got, you know, they've got all of the... They've got injection molding, they've got stamping, they've got all of this stuff. And why is... Why aren't there not American supply chains spinning up to service this demand at scale? Like, seems very straightforward to be like, this is possible. Instead, what's happening, and this is a very spicy take, is there's no tariffs on this stuff. So meanwhile, like, you know, meanwhile, like, I gotta pay the full full tariffs on, you know, stoves or whatever. But, the other, like, you know, the other Sam, you know, down the street, he doesn't have to pay anything. And so, and I think this is actually, like, I I don't think people won't... Like, have talked about this in, like, a... In a in a very clear way, but, like, I just see this immense opportunity to use the data center boom to pull onshore a bunch of these advanced capabilities. Just like how the EV revolution and and like and like the the automotive companies going EV has been able to pull some of the battery technologies and other things onshore. And we're just not doing it. And I think I think I think that's gonna be a big regret that we'll have five to ten years from now, because it's like, cool. There's this immense CapEx boom that we could muster we could muster to basically onshore advanced manufacturing.
00:34:17 · Ty Morse
[00:34:17] S2: How do you think about that? Because if right now we're in the early stages of basically putting in all the weights and training, you know, this this new supply chain, how do we basically reverse that so that we do actually end up with the, you know, most advanced manufacturing...
00:34:29 · Sam D'Amico, Aaron Slodov
[00:34:29] S0: I mean, I mean, you had me run industrial policy, would be... Things would be a little different, but like, but basically, I don't want to nominate myself, you know, in future administration, but basically, I want to run businesses. But basically, basically, I think that we need to be thinking about this from the systemic level of like, you need to have a baseline capability of being able to do this stuff. And to... And military demand is not enough to sustain... Like, I got someone who was yelling at me about, like, like how I didn't understand American PCB manufacturing, and there's, like, this one company that basically makes, like, all the US military's PCBs. And I'm like, I actually have never heard of this company because they don't do anything for consumer electronics, except for Huawei apparently, which is a little interesting. And so we basically don't work that muscle at all now for the reasons that, like, I think you've described, which is, like, the American vendors are, like, have been squeezed so much. They don't wanna play ball with, like, crazy stove guy or whatever. Yeah. And frankly, like, then you go go to China, and it's, like, red carpet rolled out. Hey. Do you wanna work on some cool stuff? It'd be really cool to build that because it's just cool. [00:35:34] S1: There's a South Park clip about that.
00:35:34 · Aaron Slodov, Sam D'Amico
[00:35:34] S1: There's a South Park clip about that. [00:35:38] S0: And and it's like it's like... And and it's awesome. And also it also also, like, it's such a flex when these companies go and, like, pick you up in a car or whatever, and it's literally a car they make. I mean, the... There there's another company... Like, the only other company can do this is basically, you know, in the Elon universe, obviously, obviously, that's... That that exists, but it's kind of like, oh, but in China, there's 20 of these. And there's 20 of these, and you can hire them to do advanced manufacturing projects for you. So, like, if I could go hire Tesla to go build the best induction stove in the world and they gave me their Bay Area engineers to do it, would it be worth it? Probably. I think it would actually I think it would actually work great. Now, are they set up as a business to do that? Absolutely not. And, that's the other missing piece of The US ecosystem is like, I don't think that's a venture scale business or maybe it is, but like, maybe I need to be more thoughtful about what the financial structure ends up looking like. But we don't have the incentives in the capital markets for businesses like BYD or Goertek or like Longcheer or, I'm thinking of a couple or or or or, yeah, to exist, basically. [00:36:50] S1: I I can push back on this a little bit just because I've been trying to make a case that this level of basically, like, let's just build Chinese level capacity here. Right? [00:37:02] S0: Take.