AI in Gaming, Nvidia and GPU Clouds, Nuclear Energy Challenges, and Waymo Updates | E2038

0:00 I I wasn't aware of the bee story but I think we need to be thoughtful about this because this could come back and sting us if we don't stop buzzing around the issue and get to the heart of it which is whatever happens to this specific type of bee could the BB moved I mean to be or not to be that is meta's question uh but there's other I didn't I knew if we went down the B Avenue we end up here for a long time we were stuck in Honey this weekend startups is is brought to you by Squarespace turn your idea into a new website go to squarespace.com twist for a free trial when you're ready to launch use offer code twist to save 10% off your first purchase of a website or domain open

0:46 phone create business phone numbers for you and your team that work through an app on your smartphone or desktop twist listeners can get an extra 20% off any plan for your first 6 months at open phone.com Twist and lemon. hire prev vetted remote developers get 15% off your first four weeks of developer time at lemon. twist all right everybody welcome back to this week in startups with me again Alex wihome how is your weekend star you know Jason uh my weekend was actually very rough I'm not gonna lie our porn is going through a period of colic and uh yeah so uh going to work today has actually been lovely It's been a respit from uh just for you yeah this

1:34 weekend was really hard I'm not going to lie oh man I am so sorry well you know here's the thing you know that since you have an older one is that it gets easier and easier and uh you forgot didn't you how hard it is I I think she forgot between the first and the second I think this one is so when we started off our new baby was easier than our first baby and now now she's definitely harder so it's it's kind of a mixed bag but uh cently colic Peaks at around 3 months so it'll get easier in a bit I'm just glad to be back at work yeah uh well uh I hope Mom's doing well good luck to the baby uh it's part of growing up uh you'll get through it it is you'll just have a lack of sleep but don't worry I will carry the show today we've got a

2:20 full docket I've been there my man I'm I'm eight years removed from it my youngest are eight-year-old twins yeah and it's so great to see all of the live viewers uh for people who don't know Alex and I decided we would do this show live so if you go to uh Twitter SLX and you follow Twi startups or you go to YouTube and you follow the show on YouTube you can watch the show live Monday Wednesday and Fridays 12 central time which is 1 pm Alex time also known as eastern time yes sir 10 AM Pacific Time known as Silicon Valley time so 10121 whatever your jam is join us and uh if you're hearing this on the podcast stream you're going to get the same show except uh we clean it up a little bit in

3:06 post production so if you watch live we we stumble when we try to pull things up but it's kind of fun it's like watching a little bit of CNBC we're gonna lock in next year to Monday Wednesday Friday shows and we're getting close now aren't we Alex we're getting close we're getting very close in fact we're doing I think more shows uh right now than we have all year and I got to say humming along having a lot of fun and and I I think to day Jason we can provide people with a little bit of a respit from the other thing that's going on tomorrow oh right tomorrow is the election yeah I've spent the weekend as since we for the last two weeks I've been trying to understand and we'll leave this in the show because I think it's important for all Americans to understand election Security in America what could be better sure and what the reality is and what

3:53 you're going to see for the next week or two uh and hopefully not much longer than that there's a bunch of people arguing fighting sharing media about how insecure our elections are and I take this as a positive Alex because we have so much scrutiny on the 50 different disperate systems also known as our states uh it's basically resulting in the election system getting Tighter and better every year 35 out of 50 states have voter ID laws watermarked ballots and are essentially impossible to game at scale and that's the important caveat here if you are worried about the national election for your candidate whoever you got and it's 5050 right now respect to everybody for their choices

4:39 um you know even if I I might disagree with one of them that's that's America but the good news Alex is is even in your sleep deprived rough weekend State you can cognitively understand that the lowest swing state is 13,000 votes and that is Georgia and to swing Georgia which take 13,000 fake IDs fake ballots and some number of people to go execute against that plan is it possible no uh could people cheat and do a hundred or 200 or maybe even 500 sure I guess but it's extremely hard to do that and so I have been fighting the good fight online Alex you may have seen me on Twitter I I actually what's funny

5:25 is Jason I'm now associated with you in a way that I haven't been before and so I'm catching your Twitter Strays pretty consistently and uh you have picked the single most thankless political position and media job in the history of mankind and I was G I was going to text you this but I'll just do it live I I want to give you like three points for being on Allin your other show and which I I would say the majority of the hosts there have one particular view yeah and you have not gone along with them because you're having your own view which I think is very respectable but you're taking a lot of flak for it from I think every single side because some people think you're a squish on the right or you're too conservative for the left and it seems

6:12 that you don't have that many friends and allies so I'll say it 10 points Jason for sticking to your guns I I literally have the left telling me that I'm a sellout for the right and I have the right telling me that I have Trump derangement syndrome which to me is the greatest compliment ever because I believe believe that both parties have been hijacked by the fringes I think that's pretty obvious and I don't like either candidate I'm sorry I'm going to just stick to my guns I don't like either candidate I don't like how either part is behaving and I do think America will survive either candidate for me the number one issue is the spending and I guarantee you Alex if you want to make a bet let's see if you'll take this bet over or under trillion doll more at the end of

6:59 this uh you know term the next four years 2025 through 2028 at this end of this next presidential term we will have $9 trillion added to our national debt which is basically the average of the last two years which we've added about 16 17 18 trillion we'll see what it winds up at but basically eight to n trillion is what each president has done in the Press too I think we will be sitting here in four years with 9 trillion more in national debt you take the over the under I think and I don't like this answer I'd take the over on that okay so for me I think we're going to wind up in the same exact situation we've been in which is we're going to just bankrupt this country if we don't change it and I

7:45 I hope I hope the one good thing for me that could come out of the Trump a trump win would be if Doge the department of government efficiency actually happened I mean independent of how I feel about Trump that would be an amazing thing so I hope happens um and you know I hope you all vote and I hope your vote counts yes you know that's I think every American should want that for every other American hate to be Captain Nuance here but I hope everybody's vote counts and I hope you do vote yeah if you don't vote don't call you know I mean take take take part if you don't vote you don't get to complain have a say and then complain but don't not have a say and then complain that's the only thing I can't stand uh but if you were not in the US you're probably saying dear God Jason I know you're trying to keep it to a

8:31 minimum but move on so I'm going to do that just for the sake of our European African Asian and Latin American friends so Jason on the show today I have a video sorry an AI generated video game it's gonna blow your mind then we're gonna talk about Nvidia being once again the most popular and sorry most valuable company in the world and some notes on GPU clouds that are very interesting then what the hell is going on in nuclear power for AI cuz it is a bit of a mess and then finally if we have time I had the latest numbers from California regarding wh's self-driving ride growth so quite a lot to get to twist is brought to you by Squarespace Squarespace is the place to build a beautiful website you know we're huge fans of Squarespace here at this week in startups because every startup needs a

9:16 gorgeous website people will judge a book based on its cover but you don't have a ton of time you don't want to waste Cycles on doing something repetitive like creating a website oh my lord your team is busy building your product or service why not use the best and most powerful website builder ever created and that's Squarespace and they have a new AI powered design intelligence tool that's going to help you build something great unique and fast and they've of course got an e-commerce engine built in it's so simple to use with built-in payment technology so if you're selling something online you can start racking up that Revenue right away Squarespace will also give you all the tools you need like an email campaign donation capabilities and of course domains

10:02 analytics SEO all built in from day one Squarespace has what your startup needs and we can save you a few bucks squarespace.com twist for a free trial and when you're ready to launch go to squarespace.com twist and get 10% off your first website or domain purchase again squarespace.com twist an amazing product that I personally use and endorse and the longest running supporter of this week in startups go ahead and tell them that you found out about Squarespace from the week at startups uh but first Jason I'm gonna pull a sunny and I'm going to give you an AI demo here love it and I want to know have you heard of a company called deart decart I have not okay so deart put it in it's not even spelled like

10:47 deart the philosopher it's literally DC a r t so there's many jokes um anyways they have a new thing called Oasis Oasis is a playable real-time open world AI model what that means me is it generates a Minecraft Style game frame by frame so this is a literally a an AI model that's autogenerating a game as you interact with it which I think is pretty cool and we have a a video that we took of Stuart from the production team playing this earlier today so we could avoid there's a big wait list for this I'll show I'll tell you why in a second but Jason this is what it looks like this is the current state-of-the-art if you will okay so Stuart is going to pick Mountain Meadows and we will be transported through this Wormhole type thing and if

11:33 if you're on the audio this looks like Minecraft it it looks very similar to Minecraft and it takes normal inputs so Jason first thoughts of the graphical Fidelity what do you see here um okay so it looks like my kids are playing Minecraft on their iPads uh or we're playing Doom or Quake 20 years ago 25 years ago uh and um you're saying this world and the game itself was generated by AI yes so the AI engine is taking the inputs from the player and the information that it has and re and building the game around you as you play this is really cool but it also has some drawbacks one thing it doesn't seem to have right now is any idea of permanence so Stuart who played this for us take

12:20 this take this little video is eventually going to turn around and what is behind him is not at all what was behind him before and every time he turns around it regenerates the world but those see this is for example brand new if you're watching the video this wasn't there before that's all new right but oh my gosh Jason we can now do this with off-the-shelf is technology and uh I think this is going to be in two years absolutely enormous I was blown away by it I mean this is I think what people believe using a computer will be like in the future which is to say instead of downloading apps you'll talk to an AI and it will build the app in real time for you so they'll say you know I really like Age of Empires I like a real-time strategy game but I'd like it to be

13:05 based on you know pictures from my photo album of my extended family and can you please invite them and then it'll just generate that for you just like right now you could go in there and say hey I'm doing some research on voter irregularities can you give me a bunch of information and when I was actually doing my research on all the voter stuff I was using chat GPT Claude G uh Gemini and then having a check fact and it's pretty interesting how we're getting closer now you know every six months in iteration to the hallucination and the accuracy issue I don't want to say it's resolving itself but it's slowly getting better and so I feel like the citations I'm seeing them more often and uh yeah

13:50 this could be one of these moments where you know if you if you think about what we just witnessed and the Fidelity of it imagine also describing I really love Star Wars and these three characters are meaningful to me can you make me an episode of the Mandalorian that occurs between these two episodes and you know make it super spicy and interesting for me in these ways and I want Darth mole to show up this could be the future of Netflix and other platforms whether it's Games music or here uh you know here games but it could be music and you could see this happening on Netflix or Disney's app as well I I want to show one one thing here we have a chart Jason showing the um number of unique users who have played the game that I just showed you and it's

14:36 a chart that every VC loves to see because it just goes in One Direction so here is the uh cumulative unique users that have played this Oasis game from dcart this is very impressive so one million unique users in less than four days eventually I believe and I wrote a short story uh back in like the late '90s or early 2000s when I was a journalist I wrote a short story I got to find it on one of my old laptops and the story basically revolves around a kid who made a piece of software that a billion people downloaded and paid a dollar for he made a billion dollars overnight and it was in his bank account and it was all in eash uh and I think actually that concept is something we're going to see in our lifetime which is

15:22 somebody makes something on the Internet a billion people see it we've seen it with songs like baby shark um oh God we've seen it with viral memes like David Goes to dentist and stuff like that but it's only a matter of time before a startup does that same thing and I think that's the great hope for Venture Capital today in Angel Investing is that what you're seeing there and it's really great that you talk about as you know venture capitalist going whoa wait a second how did that how many people did it hit in 79 hours did it say what was the number uh it surpassed one million unique users in three days and seven hours amazing you know and you think about what Facebook took to do that probably a year or Myspace probably two years you know it takes a while to get a million people to do anything but this is the

16:09 world we will be living in and a large portion of this is because of the platforms that are out there that are already at scale to share these things so this probably went viral on some combination of Reddit Twitter Instagram Etc Tik Tok yeah and um this is our future is somebody like gosh I don't even want to say but the girl who had a on the street interview and became very famous yes I I recall that situation yes and then then she has a podcast now named after her catchphrase like this is what the future is instant virality and if those million people pay $10 each imagine like that's kind of the next card to turn over here is a group of people releasing these things on Tik Tok

16:55 so as a strategy for startups I think the takeaway here is if you make something compelling package it over and over and over again in Tik toks tweets you know other viral formats and share it over and over and over again and see if you can catch fire and if you do you could eliminate a round of funding you could literally get rid of your series a and not dilute 20% and just go to series B how do I know this I had a company we invested in um and I called them an Alicorn a unicorn with Pegasus wings and that was Comm com.com did a seed round the next thing I need knew they did like a 250 million round they never did that series a in between and what that did to the cap table was instead of everybody taking 20% dilution and having to go on

17:40 a fundraising tour the app had they had just figured out paid marketing really well and Comm just surged from you know a couple of hundred thousand in Revenue to tens of millions without doing a delu financing round uh one last note about this one though just to add to the startup story you're telling Jason so uh dcart the company that made the Oasis model is working with etched which is a Twist 500 company that's building Pro uh sorry chips that are Transformer specific so literally all these chips can do is do Transformer stuff now Oasis was not running on etched Hardware yet but the companies did say that when etched their their Transformer Asic does come out um this will run in a 4K resolution so we'll see it again when ET has its Hardware out but cool to see a

18:26 hardware startup and a software startup working together make uh hit AI products if you will I think I saw Runway AI another one of these cool AI companies and maybe our producers will find it before the show ends they had you know in their model for doing video um the ability to change the camera angle in real time and I don't know if you saw that go viral but that to me was a revelation because all of these AI video creation tools were doing 5 seconds and you couldn't really change it right if got a video and then you asked it with the same prompt to make another video would make something completely different there was no uh Providence or ability to edit it uh and iterate on it which makes it worthless

19:12 it unless it happens to hit our home run the first time yeah but the ability to say hey change the angle on this or let's do you know a pan tilt Zoom this direction that actually makes it usable so I think we're very quickly um getting over the constraints that the software had uh and the GPU processing had and the limits of the amount of Hardware that was out there from uh what do they call them um Neo servers or neoc clouds Neo NE neoc clouds AKA clouds yeah and so here it is uh this is I think Runway gen 3 Alpha and what you're seeing is it made you know these beautiful images but then

19:59 um you can actually go in and change the viewing angle and that's really like a New Concept here of um being able to actually take what AI is building and actually use it in Hollywood yeah because I'm not impressed with these 5-second clips everyone's like oh my gosh this look at this 5-second you know clip that looks like a Marvel movie I'm like okay cool one do it again have some Fidelity between shots and actually Stitch things together that's what I've been waiting for so I hope this is a movement in that direction because in theory I do want to be able to say you know make me a Marvel movie but with myself as Captain America because I'm so handsome and strong Founders know that every miss call is a missed opportunity customers don't want to wait they will call

20:46 someone else if you don't pick up but if you use open phone you're never going to miss another customer call and guess what it's super affordable and easy to use people used to spend tens of thousands hundreds of thousands of dolls putting in a corporate phone system and now for just $15 a month open phone will give you a business phone line and complete control of your destiny want to know who's answering customer calls and how they were handled open phone can do incredible things like sync with HubSpot and give you AI powered call summaries automated responses to ensure you don't miss a single ring well that's all built into open phone and if you've got an existing phone number they will let you port it over at no extra charge get 20% off your first 6 months what an amazing offer at open phone.com Twist that's OPN

21:34 P ne.com twist for 20% off for six months all right I want to talk about Nvidia um I'm a public markets nerd Jason you know that and envidia once again took the absolute top spot and as the most valuable Public Market company in the world I have a screenshot of this they beat Apple Microsoft alphabet Amazon aramco and meta the other leaders uh with a market cap of just about $ 3.4 trillion now the context here and the reason why I want to bring this up to our startup audience is that there's some stuff that goes into this one element is that Nvidia is going to replace Intel on the Dow Jones Industrial Average which is kind of like I don't know a Coming of Age moment for a company like when you reach the djia you've really made

22:20 it yeah it is an honor to be in those indexes there are you know only a certain number of slots one person comes in somebody has to get dropped off the list I remember when it happened to Uber it was a big deal and you you know there's some programmatic buying that occurs in indexes obviously if you buy an index fund as we've always talked about you're a fan of them low fee index funds a really great way to compound wealth then you have people programmatically buying your stock it just builds the base of of people the undercurrent I'm hearing um which was in the financial times today uh and uh was and and this is something we've talked about on this podcast last year and we talked about on all in as well is the

23:08 concept of roundt tripping and conflicted transactions and how nvidia's balance sheet is shaping up yes now it's important to say this is all speculation but there is a group of people speculating that this is a house of cards and that there are accounting irregularities at Nvidia yes I'm not saying that but this is a buzzy undertone so how insane is this that the world's number one company there is now this undercurrent of is this a house of cards and is there something funky going on here so maybe you could unpack where this thread is coming from uh and why people are starting to I guess it's kind

23:54 of like the Tesla movement where they added the queue I I don't think anybody's shorting in video here that would be a crazy thing to do but there was this sort of like anti- Tesla movement that occurred for a while because the stock was pretty high and you know they people didn't believe they were going to get you know a cheap car on the road of course they have now the bestselling car I think is the model why cheaper than the model 3 I think it's a little bit more it's like the fat version of it so the model 3 is a little bit sporty and has a trunk the model y has a hatchback and is like a little bit bigger so if you're taller and you want more room and you want more storage you go model y if you want something Zippy with a trunk and not a hatchback I think you go with model y okay that helps a lot because I I see threes and y's a lot

24:39 and I the Y is the one that's just stretched like this essentially yeah it's a little bit Cher it's a little bit beefier it's a beefier version let's go through this because I think it's important when these kind of allegations start coming up that we we kind of just understand what the underpinnings here are okay so there's thread that we're talking about here and we're going to have the thread uh up on the screen we will also link to it in the uh the video and the show notes so if you want to follow along you can this is from um mandm cash app serum and he has three ideas about how Nvidia might be let's just say buttering up its investors by telling them things they want to hear so the first thing he brings up is that Nvidia might be essentially giving out sales rebates but then booking that

25:25 separately so it doesn't actually impact net revenue and the argument here is that this would show up quote under the balance sheet item prepaid expenses and other current assets so Jason I went through nvidia's last earnings reports I went through their earnings transcripts and I tried to find anything interesting about prepaid expenses and other current assets basically nothing not in the CFO commentary not in the Q&A not much the thing that I did notice here is that the amount of prepaid expenses and other current assets at Nvidia is pretty small compared to its overall scale and I think most importantly as you see from this chart has leveled off so this is not going vertical still it's decelerated and so to me I don't think there's enough here to actually be smoke

26:11 hinting at fire got it uh and so I have seen entrepreneurs do this before they will tell us they have a certain amount of Revenue and they have a certain cost of goods cogs you know and and we kind of net it out and then we find out that they're discounting their product and that comes up on another line item where they're you know let's say the this product cost 10,000 a year um it's about a thousand a month whatever 10,000 a year per customer sure some SAS product but they're actually giving the salespeople the ability to discount it uh for 5,000 a year so they say they have a million dollars in Topline revenue and the revenue is growing but

26:56 what we find in the last three month months is that they had to Discount the product 50% 60% 70% in order to hit their numbers so it looks like the top line is still growing but somebody's getting a 50 or 60 or 70% discount and that's coming in a line item later in so there are such a thing as discounts that can occur you might imagine that with Car Sales where you know you sell it for a certain amount and then there's a discount a spiff all kinds of weird things I don't people do this just sell your product whatever you sell it for don't play games with hiding discounts in other places because it creates uh the appearance of impropriety and what I learned early in my career is the appearance of impropriety will like we

27:43 talked about with this Minecraft game Dart is making you know the same way that can go viral here you could have round tripping allegations or discounting go viral which is what's happening right now the the next issue that I think is going to come into play because there are multiple issues here one you have this discounting kind of thing the second is what is the lifespan of NH h100 and then people are giving loans to companies like cor weave a Neo uh cloud provider and so this ft story was talking about just billions and billions of dollars in loans being given by private Equity firms to companies that are going public and then also Nvidia is

28:32 investing in those companies while those companies are buying from them and that is called round tripping and then there is this house of cards in some people's mind where maybe we're going to build too much capacity like we did in the fiber era like I talked about previously on the show and that the floor will come out there'll be too many h100s too much Supply too many Neo clouds available and we'll see the cost for h100 which I think was at $8 this ft story said it was $8 an hour to use an h100 now it's down to two so it's like 75% cheaper which is what you would expect things get cheaper in technology but you know

29:18 all of these things coming together I don't know if it's a house of cards but over Supply the appearance of round tripping this all could add up to you know maybe be some cataclysmic moment for NVIDIA all right Founders are you tired of doing all your own software development do you need help but you can't afford all this time it takes to find great talent are you dreading the endless interviews and email chains just to find somebody great it takes six months it takes a year well what you need is lemon. lemon. has thousands that's right thousand thousands of on demand developers who can help you and they've done the work already to vet these

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30:50 hours or less that's right and twist listeners get 15% off the first four weeks stop earning money hire developer smarter and faster at lemon. twist okay so round tripping is a thing that comes up I mean honestly every couple of years in technology and Jason before this situation we talked about this a lot in terms of Microsoft's investments into open Ai and the question was are they giving them investment in the form of cloud credits and then money goes out money comes back in you basically take you know cash flow and turn it into Revenue kind of cool it but it also dicey I've never actually sorted out precisely when this becomes illegal if that makes sense because some round ding is probably accidental um if you invest in a company and they buy a

31:36 computer if Dell invests in Jason Inc and you go buy some Dell laptops is that round tripping probably not but uh where do you draw the line on that actually um I would say the way you would draw the line on it is the scale does the scale hit anything material and so let's take the open AI example let's say Microsoft invest 10 billion in cash in open AI okay okay so now they have 10 billion sitting in their bank accounts and then openai proceeds to buy five billion in Cloud credits from Microsoft in the next year and then another five billion the year after that okay so now you've got billions of dollars going back and forth

32:21 between bank accounts if this was done in a coordinated way it would be illegal so if I said to you like you have no need for this Cloud but I want you to do it anyway that's if it's not needed and necessary then it definitely doesn't pass the sniff test I know this because there was a certain accelerator which I won't name because they constantly like to pretend they're being bullied even though they're the number one accelerator there was a strategy inside this accelerator where the founders would buy each other software to ring their cohort so imagine you have two or 300 companies and 20 or 30 of them agree to buy each other software for the year and do it in

33:07 a coordinated fashion you buy my SAS software I buy yours uh and now do it 10 times and all of a sudden things grow this is easily found out by investors because we always ask during our diligence tell us your top five clients Right Where You Source them we we'll have them literally we'll ask a Founder to put this in a Google sheet and we train our Founders to do it hey tell us about your five largest clients by dollar amount tell us by the five largest by engagement in other words how many people are using the software every day and um put it in a Google sheet tell us how you Source them when they started paying and how much they've paid every month and to date and oh and also put the contracts that you have with those folks in a in a drive this is called due diligence startups when they become past

33:54 the seed and Angel stage will be required to do this and Seed investors put in anything let's call it above 250 or 500 will start a diligence process why will they start a diligence process because they are investing OPM other people's money when you invest other people's money you're What's called the fiduciary and you have to do due diligence you have a fiduciary responsibility to do that so don't get upset if like a VC asks you for U diligence folder they have to make sure that they're not investing in FTX and theives and if you watch those examples people did not do diligence they they basically just said other people did diligence I'll skip mine uhhuh and then there are some nefarious Founders who say you don't need to do diligence somebody else did it that's the major

34:40 red flag hey if somebody else did diligence you don't have to not a good approach to life um and so if you were in the same example of open Ai and Microsoft Microsoft invests 10 billion 9 billion of it goes to salary marketing whatever investment and one billion of it 10% goes back to Microsoft and Microsoft's Cloud businesses 50 billion so it's but 2% of Microsoft's Revenue yes it's 10% of the amount invested you would be like okay pass this a sniff test if it was 5% or 10% of Microsoft's and they did that same technique five times then you'd start going huh and I think the challenge is

35:26 NVIDIA has invested in multiple companies now and that's where I think they're going to get either investigated if they haven't been already um or somebody's going to come in and due diligence and they're it's just not worth it they should if they really feel they should be investing they should give money to a venture capital firm that's dedicated to AI take a former employee of Nvidia and start a venture firm that's a spin out where you put money in and they make the decisions outside of people buying h100s that would be much better hygiene because then you could say well Jensen isn't making these deals so it's not like the sales team is selling it uh and there's a corporate development person investing and it's

36:12 the same conversation so the proximity of these conversations is the other piece to your question of when is it illegal I know this because I worked at AOL and shth worked at AOL um we both saw this up close and personal there were salespeople who were selling people on um paying AOL $50 million to be the default music provider ah yeah and then AOL was also giving them $50 million to invest in their company and this round tripping Scandal you can type in AOL roundt tripping Scandal and find out all about this resulted in I believe people going to jail and a bunch of sanctions it didn't make its way all the way to the top and this is where a sales team and incentives matter if the sales team you

36:58 know runs a muck like this and they start trying to hit sales numbers and they get commissions they will rightfully do whatever it takes to to hit that incentive and this is where management needs to be on top of things and avoid the appearance of impropriety okay so a couple thoughts about this in the case of Nvidia one we have a chart from the same Twitter thread we're talking about illustrating the concern here this is round tripping in a single image so scale I think does matter and I'm glad we got to that because I don't know if the numbers in question here really add up to the potential for impropriety now I do agree that core weave and Lambda and the other GPU clouds that are you know borrowing up to 11 billion as the Ft said are sending

37:43 material money to Nvidia but Nvidia is not underwriting the debt in question so that's actually not a roundt tripping concern I do agree there is a hygienic point to be made about Nvidia investing in smaller companies and then having those companies purchase its Hardware but I just don't think the sums in question scale to the point of being a concern to make Nvidia a quotequote house of cards and just to make that point kind of clear nvidia's biggest risk right now to me isn't uh a a lack of financial uh not hygiene per se but just like Clarity but it's the massive dependence it has on a couple of customers so for example uh customers a b c d and e and it's sec filings these are your alphabets your microsofts your

38:30 Amazon and so forth um just the top four customers of the company in its last quarter were 25 36 46% of its um total revenue top five customers equal 46% top four customers four customers equal yeah so yeah you have to ask yourself at some point do they have enough uh clusters to do the work they want to do well xai put together what it said was the biggest you know GPU supercomputer 100,000 h100s and Nvidia was very proud of this they were like and they're gonna double it and one more point I'm gonna say this uh going back to Microsoft's uh earnings call Sati Nella a man who is

39:15 putting a lot of his eggs in the AI basket um said that uh the good news for us is that we're not waiting for the inference I demand to show up if you sort of think about it this is going to be the fastest Grill to 10 billion of any business in our history and it's all inference so I think there's a case to be made that the demand is higher than they can supply people are spending a lot to build up this capacity there may be an overrun I don't think we're in danger of a fiber collapse again though okay there you have it uh I at some point you know there will also be competitors and the margin will come out of these systems so oh yeah I don't know if I would put my money into a GPU Cloud I just don't think there's any an aans I mean here's one last thing just for the financial nerds out there Jason if I

40:02 underwrote a loan to you for $5 billion predicated on the fact that you had purchased five billion of Nvidia h100 chips and then Blackwell comes out their next generation and suddenly those are worth half half yeah yeah so then to me it's a it's a sketchy way to underwrite I don't know if I do that yeah so the life what's the reasonable lifespan of these chips you know if you looked at Google server or Facebook servers when they built these large clusters I I don't actually know the number of years that those computers would operate but I would think it would be six seven eight nine 10 years I do know that when these computers and clusters would have a bad hard drive or a bad server I was told by the people who architected them that it

40:48 wasn't worth going and finding the computer and removing it from the rack they just remotely turned the power off on those so because like literally somebody there was like okay it's a $1,000 you know server blade just turn it off we've been using it for seven years just no more power to it and we'll just turn it off and I think that's going to be the real question is what is the lifespan of these will it be six seven eight nine 10 years or will it be one two three four years and then also the the software is getting more efficient and so as software gets more efficient and you get more out of each GPU which I think is a big Focus right now is writing software that maximizes

41:33 the utilization of these gpus my understanding is in some cases Sunny said you know you're using 20 30 40% of the capacity of a GPU when you're running certain jobs and they could be more efficient uh you know and how they move data and jobs Etc so uh it's definitely worth keeping an eye on this and it's definitely worth startups understanding that the impact of any Financial uh irregularities or appearance of irregularities and what we're probably dealing with here is these this is probably an appearance issue I don't think someone like Jensen would take this kind of risk the companies already worth a trillion dollars does they need to optimize on the margin this way I don't think so so

42:20 why would anybody take the risk I could see salespeople taking the risk and management turning a blind eye to it at AOL the end of the Empire and that's where like maybe a house of cards could exist and and their round tripping issues did exist you know a data point that I just thought of Jason about this is if you look at how Nvidia is handling shareholder return its buyback schedule how it's handling its cash Supply it all looks very copae to me yeah it doesn't there's I I did when we work went public it's S1 filing was a Litany of obfuscation would I read nvidia's numbers they're impressive but they don't there's no bad smell in them that I can tell at least so if there's something hiding in here bad but um you

43:07 know everyone just look at the numbers yourself before you stop doing and well stop doing the round tripping that's my number one piece of advice take the round tripping out of this just make a venture arm commit a hundred million a year a billion dollar a year whatever tickles your fancy and have it run separately with an independent group and let them have carry and management fees and and then take the gains but don't let the sales team or the management at Nvidia make the decisions of who to bet on while concurrently selling them product that's the conflict internal right now that is going to make everybody bring this up over and over and over again yeah you remember when

43:52 Jensen uh went viral for having like 30 direct reports and how he um kind of did the founder mode argument before Airbnb did if you will you know I wonder if you could get that past him because I think you and I share a general Vibe with Jensen and how he would approach business oh he's handson yeah yeah very high bar and he's very Hands-On that is theoretically a strong Bull workor against the sales team getting into territory yeah so all right uh let's move on Jason you want to talk about Amazon and how their big deal for nuclear power has uh hit a bit of a roadblock with a some called Talent so I'm curious why did this cut your eye well you know we're discussing not only how many chips you need for AI to process these jobs and hit super

44:39 intelligence uh and solve The World's problems but energy seems to be a blocker and consistent energy that doesn't burn out the grid and doesn't burn a hole in the ozone layer and burning carbon and fossil fuels you know in order to make these great uh Advan is seems to be um critically important and other countries namely China are really big on nuclear and they're moving very quickly and they have top down um authority to just say we're doing it here in the United States you have regulatory bodies you have citizenry Etc who can have these you know major debates around uh the reiring or reopening of

45:29 defunct nuclear power plants and the building of new ones so I think it the most interesting part of the nuclear story here in America is that I don't hear people saying I don't want nuclear anymore I don't see massive protests and I'm actually seeing the opposite which is people saying hey you know what' be great if we didn't have a dependency on foreign oil and we had more consistent power and you know what I think we went on a complete diversion with the no nukes concert series and the hippie saying this is not clean power and it's unsafe because a Fukushima Chernobyl and Three Mile Island yeah which in total had under a thousand under a hundred deaths Associated directly with the meltdowns

46:15 that occurred in those emergencies however we would frame them that to me feels like a sea change but now there seems to be a blocker here and maybe you could explain the thinking behind the blocker to m Microsoft buying basically energy from a nuclear power plant okay so there's two stories that came out in the last couple days about this the first one was that meta uh they had some plans to build an AI data center that was going to run on nuclear power and it appears to have been thwarted because there is a very rare type of bee on that land a bee like I said an insect a be a rare species of bee yes the insect that goes and flies around stings you now I don't want to pick the endangered species fight but I'm G to move us on to

47:01 the Amazon story so Amazon bought a I wasn't aware of the be story but I think we need to be thoughtful about this because this could come back and sting us at any moment if we don't you know stop buzzing around the issue and get to the heart of it which is you know whatever happens to this specific type of bee could the bee be moved 100 feet you know 100 yards past where this is going to be and could they build a special Sanctuary for bees adjacent to it and spend a billion dollars on saving these bees I mean to be or not to be that is meta's question uh but there's other I did I knew if we went down the B

47:49 Avenue we'd end up here for a long time this we were stuck in Honey Amazon spent $650 million to buy a data center campus that was going to be next to the um susqu nuclear facility in Pennsylvania now that's owned by Talon Talon um has a interconnection agreement with pjm and I know everybody you don't care about this but I'm going to explain to you anyways because I had to learn about it yeah and there was a a a proposal to increase the production at sesana nuclear plant from 300 to 480 megaw now this all came got squarely because of an interconnection agreement with other people so there's there's energy production there is a grid and there is interconnection and there's agreements and rules but that

48:35 fall down there the FC the Federal Energy Regulatory Commission just voted down a plan that would have allowed for more energy to be generated from 300 to 480 megawatts notably Jason and this was to my surprise I thought it would be Democrats being opposed to something like this it was actually the Republicans who voted against this and one Dem voted in favor of more capacity uh but it all seems to be a little bit hard to parse out I I'm not going to lie I've now read for the first time um these interconnection service agreements or isas I'm not an expert in the law here but it's a bad sign that this deal didn't work out the way people wanted it to because other groups like constellation with Microsoft as you

49:21 mentioned want to collocate Data Centers by nuclear facilities ramp up the production and then go to work it gets weird when you talk about Basel load power grid capacities and then uh if you're before or behind the meter but this is still an overall I think bad note for the nuclear will save AI moment yeah we're going to need to get some leadership here to explain to the local regulatory bodies that if we don't allow this type of of arrangement where nuclear and data centers come together uh we're probably going to fall behind in the AI race to China and other places

50:09 where uh they will allow this uh to occur now I do wonder if we could accomplish what people want to accomplish with nuclear by going into the desert putting a lot of solar and a lot of batteries which would be a lot obviously uh and trying to do the same thing with Renewables and batteries I don't know if it's possible but if anybody could do it it would be Elon and we'll see well I'm I'm very optimistic about that but with some variations because one I like solar I like power walls give me a big battery pack I'll high five you a company that we also have in the twist 500 it's called EXO wat and they're doing solar lenses versus solar panels and they're doing heat based storage instead of electricity based storage which

50:54 apparently has a lot of industrial applications so I'll take my solar panels along with my solar lenses and my lithium ion next to my iron batteries next to my you know heat batteries I like all of the above but that includes nuclear and so I'm just disappointed that here we are seeing what seems to me to be a very technical conversation about grid load and who pays for interconnection and just some technical things that we should be able to get past to prevent what would be a collocated data center by a effectively zero carbon power I mean guys this is what we want we should be fighting to make it happen not pissing and moaning about interconnection I mean and burning yeah burning natural gas and coal seems like a not great solution to this problem the

51:40 good news is you know one of the things I found is when in business is when there is a big prize all of a sudden people get very creative because there is a big prize and a lot of money at stake and um you know that is what I suspect will happen happen here is people with very big Pockets like Microsoft or open AI or xai or apple Google alphabet meta because they have so much money because they have lobbyists because they have lawyers they're going to be able to fight this fight on behalf of people like American citizens who could never mobilize to fight this and this is one of the great things about capitalism is there's such

52:25 a big prize in solving General AI that dep pocketed investors will you know race to provide this productservice uh to the Big Iron holders whether it's Microsoft or meta and so I think we're we're going to figure this out that's what my dut tells me if we don't maybe Mexico and Canada get the business maybe data centers will be in Mexico and Canada and will literally you know use hydro and nuclear power plants in those locations like I mean it sounds crazy but Mexico's right there and maybe Mexico wants the business and we'll just put five nuclear reactors near the border and they'll get all the data center business and we'll be flying

53:11 flights from the United States to these regions in Mexico that decide you know what we do want to uh have this business and that's one of the great things about jurisdictions you know as I get older and I've lived in three different states I really think one of the great features of the United States I was talking to somebody from Europe the other day yeah these podcasters from trigonometry and um you know it's a we have this really great way that you can compete in the United States Texas Florida can compete with New Jersey and New York and California for the same group of people you see Seattle uh Washington now is I think they have on their referendum to get rid of state capital gains tax again I saw a headline and I haven't been following it

53:57 but they were using Bezos as an example of somebody who moved from Seattle Washington where Amazon is headquartered to Florida and then he magically sold a bunch of shares when he was in Florida and they're like wait a second we could have kept him here if we didn't charge him the capital gains tax maybe he said he moved for family and for you find that slimy like he the guy builds his company in Seattle and then the moment he wents to make a lot of money he's like I'm gonna go give I just it I think it is you know he I I think he moved to Seattle and a lot of people did Microsoft as well because they had that tax treatment originally and they changed it so you know I think what's going to make people competitive in the United States is if you uh if you

54:45 overcharge or you take away people's rights well you know you have both of these things occurring concurrently in some jurisdictions people are going to have to uh people will make the BET of their attention and the greatest attention is where you domicile yourself and your businesses based upon how that jurisdiction treats you whether it's Safety and Security or it's tax treatment or education systems or some combination of it or bodily autonomy as we've seen in Iowa and Texas right some people are literally I I know some technology companies that are having a hard time getting people to come to Texas because because there are questions about abortion can you get one

55:30 if you needed to get one well I I I love the competition among states for um people's custom you know business or whatever um and I I my my beef with uh with someone leaving their state it's just that it feels to me a little bit un like disloyal but then again capitalism is competitive so maybe I'm overthinking it I I don't want to get too caught up in the Nuance of of interestate tax policy but I just want to say you know talking about Canada and Mexico picking up uh business that we might not want in the US for one reason or another I just want a really big United States why can't we just like take Canada right and just tuck it in and get like six more States and then we'll have the 56 States add Puerto Rico 57 and then we'll have like big America how cool would that be I would love to see a president

56:15 propose uh making additional cities um which I've been a fan of because we have so much land here and I think somebody got trumped to say that was a good idea as well like make a new city like that's what China does they just like we need a new city let's pop one up we have the resources to do that we have the land to do it why not pop up a new city from scratch from first principles and yeah why not try to buy some land and create a 501st 502 55th you know state if people want to be part of the United States maybe Puerto Rica wants to be part of the United States officially and be the 51st state I'm here for it oh yeah no I'm totally in favor of right all right guys that's the AI power story it's going to be a recurring event this is why for example why smrs small modular reactors are in the news and all

57:02 SMR startups are doing well because everyone's desperate for power but let's move on and talk about our favorite thing in the world Jason which is self-driving cars because I have some good news for you and me uh can we get this tweet up on the screen guys Nate Nat Bullard um found this data before I did so I want to give him credit for this here is a chart showing the number of driverless rides that weo has done in California per month and it's gone from 12,000 in August of 2023 to 312,000 in August of 2024 yeah uh and I I went Jason I did the work and I went through all the filings downloaded all the documents found the information that we needed and we prepared a chart um showing you the progress the company's made in the last three months so can we get that up on the on the screen Stuart

57:48 here we go and the the headline stats are as follows total miles driven by weo self-driving cars in California in June was just over 1.1 million 1.4 million in July 1.8 million in August number of pass sorry miles with passengers 800,000 to 1.1 to 1.4 million and this is the stat that blew my mind the total passengers that they had in June was 291,000 by August it was just under 500,000 so to me the technology is scaling people want it and have you heard about a lot of crashes Jason I haven't I mean it's pretty clear that at low speed uh in a contained environment weo can do it now there will be

58:35 criticisms that they're using Mission Specialists and how much intervention is going on but uh the rides are occurring and this is great for Humanity young people are not going to buy cars is my prediction uh at the same rate they did uh and so you know everybody wants to know how I feel about Uber oh my god well you know I don't own the same number of uber shares I've always own that doesn't mean I don't have confidence in them but I do think Uber will participate in this I do think Tesla weo obviously wh's got a deep partnership with Uber now the Austin and uh Arizona rides are going to go through Uber yeah the number of rides and we've done this you know over and over again we keep doing the back of the envelope math this is going to take 10 years to

59:20 roll out to hit 10% of rides in the US is my estimate maybe it takes 10 years to hit 15% of rides in the US which would be an absolutely ginormous Tam and growing I wonder what the point of owning a car will be if rides are everywhere constantly and the wait times in the suburbs and the BBS goes down to under 10 minutes if it was under 10 minutes everywhere to get a ride and it was cheaper ultimately than um owning a car I don't see people wanting to own cars um or maybe a family that would own two or three would own one and then you know so that that could be how this hashes out you know I own four cars I

1:00:09 own two collectible cars and three cars in service so if you take the two Collectibles which I don't ride I have three cars for a family of five that makes sense because I need my car and then two sets of kids going in two different directions we need three M but do I need my car no uh I could I don't drive it enough I could be uh in a in Uber all the time you own one car or two in your family we're we're a one car family uh and I'm well we own I keep almost buying a car but then it's so annoying Jason to actually go through all the little options and the car you want in like Idaho and then you have to ship it and then we only have two spots and we have a nanny who drives and we have one car yes so basically you've come to the conclusion that getting a second car the juice ain't worth the

1:00:54 squeeze you could afford to it I'm sure but the you know the the rig moral of getting one ensuring it maintaining it is greater again the juice ain't worth the squeeze um is what a lot of people will come to the conclusion on and so I think this is going to be also good people forget this but one of the reasons we really liked um what do we call it when people shared the sharing economy we had a buzz word for the sharing economy uh well I thought it was the sharing economy the G yeah there was another word for Crow not crowd sourcing but anyway the sharing economy was a concept that startups went through like oh you know your skis your

1:01:40 you know basketball collaborative consumption peer-to-peer economy Marketplace oh yeah economy sharing economy I think is probably the best term the sharing economy was something people thought um we would have for anything over $1,000 so a lawn mower instead of owning a lawn mower lawn mower and using it once every two weeks the idea would be you would come to my garage take mine and we would rent them it we're so um we have so much abundance in the United States in the Western World RIT large you kind of don't need to do that uh but if it becomes easier and the lawn mower comes to you

1:02:26 and you know it's crazy to say this but I was driving uh through one of the communities here in Austin Texas and I saw not one but two robotic lawnmowers yeah two different homes with robotic lawnmowers and I just thought to myself well there's no reason that that one lawnmower which goes out every week and trim somebody's lawn couldn't do the other 10 Lawns so why are 10 people buying these it makes no sense it's not good for the environment and it's wasteful why not just have it hop the fence and go to everybody else's yard uh same thing with internet connections I've always wondered why people don't share them more often um I guess privacy is one of the reasons but like yeah if one person were to buy an internet connection for their apartment why don't five people share it and split the bill

1:03:12 I know why it's because someone's gonna start tanting half the internet and then uploading half the internet and then blow theivy tragedy of the commons it's another way of saying that I I am a big fan of the sharing economy in theory other than the fact that I just don't have a lot of time and so I the amount of money I could get for renting out my backyard to a a dog company or rining out my my my child's cool car that we push her behind because she all the kids want to ride on it I just it's not enough money for me to care about and that's that's the thing I do know that Facebook Marketplace has become absolutely H critical mass so the recycling economy yes um that has happened for clothes I know with my 14-year-old daughter all of

1:03:58 her friends are very cognizant of the environmental impact of clothes specifically and they like thrifting it is like a Pursuit and they they don't like it just to save money they like the act of going to a thrifting store and creating outfits and they like the idea of going online and getting things cheaper um and and being able to resell stuff they have so Facebook Marketplace seems to have really taking Craigslist and eBay to another level of recycling of goods I I put a bunch of computers when I moved and stuff like that on the Facebook Marketplace and man boom they were gone same day yeah same day people come and pick it right up people would tell me that the only reason they're

1:04:44 still on Facebook is for Facebook Marketplace it is that good and there's the uh the buy nothing groups that all are all about swapping back and forth this is why when people are like oh no one's actually worried about climate change I'm like I don't know man some people do take it pretty freaking seriously but what is wait wait what is buy nothing um there these buy nothing groups I think it's designed to facilitate swapping or just like literally like I have a thing do you want it and it's a way to just reduce overall consumption and therefore reduce waste and so forth yeah I I don't take part in this because I buy so much stuff um I I have never heard of the buy nothing movement and this is super cool there is a buy nothing project.org 11 million neighborhoods 2.6 million gifts

1:05:30 month a month 245 communities wow this is very cool uh I guess people on buy nothing which is an app there is an app apparently oh yeah it seems like this is a thing um not good for the economy not good for capitalism but uh you may be good for the planet and therefore good for capitalism long term but Jas I I want to go back to something you said about not buying a car I'm actually literally the person you're talking about because I do take Ubers in and around Providence when something's a

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