Relentless
00:57:57 · Sam D'Amico
[00:57:57] S0: probably They're building they're building a mid rise apartment buildings in Starbase. And so I think the level of seriousness is you need to treat this as a full system solve. And the full system solve includes the built environment and and making sure that we streamline that. And we should treat... And and there's actually... We've already have precedents for how to do this in a way that works. It's called like how we've enabled a huge build out of like Amazon warehouses and and, I mean, arguably data centers as well. It's like Amazon warehouses, data centers, and, like, cloud kitchen type stuff. Those have no problem. There's another thing that to also look at that's super important is there's actually a part of The United States that has not de industrialized, and it's the consumer goods economy. It's like your potato chip bag... Like your your bag of potato chips, your Pringles can, your Gillette razor, like, the stuff that you see in CVS and also our food supply chain and stuff like that, you can't really move it very easily. And it automated in the sixties before we had any of the outsourcing boom. And so, like, I I was told by, I was... I think I think Drew Baglino said this on another panel around, but basically, it was like, there's really good talent if you pull them out of the consumer goods industry in advanced manufacturing. And though that talent was a great source for Tesla making battery cells, for instance. And so I think there's things that we we we can look at as examples of like, well, clearly you can build facilities on the scale and operational complexity of a factory in cities like San Francisco today. And it's like, look at Amazon, look at the cloud kitchens, look at all this other stuff. And the second thing is like, where's the talent to staff them? And it's like, well, who's bagging the potato chips? And maybe you can cross train them to actually make chips. I don't know.
00:59:42 · Ty Morse
[00:59:42] S2: Sam, when we were talking off camera, you mentioned something very interesting that I wanna touch on. Does Apple export files? Or if not, what do they export?
00:59:50 · Sam D'Amico
[00:59:50] S0: So there is... There was a picture that was sent or was posted on Twitter, I think, a couple years ago, and it kinda made its rounds around the office when I was at when I was at Facebook, with a company formerly known as Facebook. And it showed United's top... It was like, a conference like that. It showed United's top customers. And the number one customer for United was Apple, and it was like to the tune of like a $100,000,000 or like, it was order of magnitude like a $100,000,000 in basically business... Exclusively business class travel spend that they were, you know, spending on their engineers, getting them getting them to go all over the world. So I would actually argue that what Apple exports is engineering expertise often in person, and they actually bring to bear a lot of the automation hardware, that ends up powering their factories much more than you would expect. Like Foxconn, in many cases, kind of supplies a room that Apple fills and a labor force that that that works than Apple actually, you know, exporting concepts to Foxconn where they then design it. Like, it's much more of a Centimeters model than a... What a contract manufacturer model than a JDM or joint development model than you would think for a lot, especially for their primary programs and stuff like that. So yes, while you're exporting files, the factory has been micromanaged by Apple to such a degree that it is effectively an Apple facility. The other thing is, where do they invent the process steps required to build these products that are so crazy? Like, I'll give an example of, like, I would be so jealous to be able to basically do this sort of, like, this sort of, like, ceramic to to, metal, like, like interface where there's no gap, you know, I'm jealous because I have a product that does something similar and we, we, we have, we have silicone on, on, on the gap like appliances would. But like Apple likely pioneered processes for all of their various, especially cosmetic services at their ID offices in Cupertino. And what I've been told is at those at those offices, which are restricted to even like, you know, it's the inner core of the Apple Brain Trust. They've got copies of like every core process machine that they end up tuning to figure out how to make them work.
01:02:00 · Sam D'Amico, Ty Morse
So it's interesting that like you could think of manufacturing reinforcement learning, but like Apple ends up doing a lot of that core work and kind of building, getting those core weights themselves and then pushing it through a scaling partner. So it's really like, yeah, they're not exporting files, they're exporting engineers. [01:02:18] S2: Google intended to basically reshor consumer electronics with Google Glass and Motorola. What attempts outside of Elon and his companies have been made to basically reshor consumer electronics?
01:02:31 · Sam D'Amico
[01:02:31] S0: Yeah. So, I mean, I I think we can also talk about Apple as well here, where, like, Apple did the the the trash can, Mac Pro was done in Texas. My understanding was like huge chunks of the dependencies to build that were all... Like, the the tooling was essentially built in China, and then it was designed in China, assembled in California. Which is kind of a kind of a kind of a joke statement, but like that's that's actually what really happened with, with with, with with the Mac Pro. And it was in some sense a political project to make sure that like consumer electronics tariffs didn't get raised during the first Trump administration. Going back to Google, so like I was there across the street from Aaron working on Google Glass and they did... I I think it's one of these cases of like, Sergei was right about this AI stuff. And if you go back to consumer electronics, was right about that too. It was just early. And the the story here is like, had realized that a bunch the IP was gonna be in like precision optical alignment of the the of the optical elements. And like, it was hard and kind of a first... Like, it would be like, you had to do it for the first time anyway. So like, if you were gonna invent the process that made like the the wave guide for the for the optics yourself, why not just do it yourself? Now, and they were willing, and at the time Google was flush with cash willing to, you know, willing to spend the CapEx to do it. I think what you saw... And then likewise, they bought Motorola because they're like, we need to get into the phone business with a vertically integrated phone partner, not just Android basically, Android and Google Play services and all other stuff. So they they realized that these pieces needed to exist. And I think we're directionally correct, but the problem was they didn't exist at the scale needed to kind of like, again, fully subsidize the supply chain that was... That that that like needed to also be brought along with it. So like you end up building Google Glass in San Jose, and where are the components coming from? Well, like I was flying to China, I was flying to... I was flying... I was flying... Was flying to... I was flying to Asia for a lot of the component engineering work. And if you kind of do the gradient descent of like, well, what's the best way to build this thing?
01:04:30 · Sam D'Amico
You end up back to manufacturing stuff in China basically. And, you know, organizations change over the years, different people come in. There's not like focus of vision of like, this is the directionally right thing to do and we have to just pay the tax until it works out. Like, obviously, Elon is really good at that. But you can see that Google, went through management changes, you know, different senior directors in organizations, you know, think think... These things these things are all natural evolutions of organizations over ten years, but, like, keeping that coherency of, like, this initial assumption was correct and carrying it through ten years later, you can actually objectively do this stuff. That didn't happen, in that organization. I do think that they'll probably make another shot at it though. Like, I think I think... And I think it's also worth saying, like, I think there's a similar story happened with AI, but like you can see right now, founders coming back into play. It's getting, you know, they're... They've been locked in pretty hard with Gemini and all this other stuff, and like, I think they're doing a good job. So, we'll see what hap... We'll see what happens. I'm also like, I'd be I'd be I'd be excited to see if that's something like that, you know, they they try to run it back again on that side. So...