Transcription
And that has always been my belief is that these models will be commoditized, that you don't need to use the most expensive ones, and that the corporations haven't figured out yet how to use them. When you put all that together and then you add in Bernie Sanders and Donald Trump want to own part of the companies, I I posted on X, there are so many headwinds when the Pope speaks out against the models. Like, how many things do you want to have where people are like, "Slow this down."
And then, what's going on, guys? Today, we got a great conversation with Jordy Visser. In this conversation, we talk about the SpaceX IPO, what he likes about it, where he thinks there could be risk, and what you should think about in your portfolio. On top of that, we talk about artificial intelligence, orbital data centers, what's going on with the model companies, token cost, and usage of these products. And then we get into physical AI and robotics, what Jeff Bezos is doing, how Jord is thinking about all these different tools. And last but not least, we talk about the New York Knicks, the future NBA champions, but we don't talk about it from a basketball perspective. We talk about it as how it relates to AI in crypto. and I think it'll give you a lot to think about as to where the future is going. Here's my latest conversation with Jordi Visser.
All right, Jordy, let's talk about the SpaceX IPO. Yesterday, it goes public. Everyone's super excited about it. What's your general take on the company valuation, whether investors should look at this as a space company, an AI company? Just how do you evaluate Elon's great accomplishment here?
>> Um, so I'll break it into two components, the now and the future. Um, so think of it as the same way I think of AI and Bitcoin, meaning AI and crypto. We're in the agentic side. Everything matters about that. So what do they have in the agentic side that matters? Well, they've obviously got the Colossus side. I think they're now the fourth largest hyperscaler. So I just want to like say to everyone listening >> no 30 days 45 days meaning they didn't have any deals and now they have anthropic and Google >> and his ability to do the first colossus was 122 days on something that is normally taking people years to get done. So Elon is the master of engineering and the ability to um vertically integrate all of this stuff but he also figures out solutions along the way. So, if anyone's going to be able to build data centers faster than all of the chaos we're seeing, I go back to something I said here, which Elon said publicly, which was when you get software guys trying to do hardware. It's a very different game. So, he's a hardware guy who's involved in the software game from the AI side with XAI. Remember, he I'm going to leave the the AI side alone for a second. Starlink is the other part that is today. So, Starlink is really important. I have a Starlink up in Maine. And the reason I have it in Maine is because I'm in a very quiet place where there is cable, but it goes out all of the time. And so by having Starlink as a backup choice, it allows me to do this with you during the summer in Maine if there's a storm. And I have a feeling with all the humidity that's already in the arc, there's going to be storms this year that weren't last year. Um, so Starlink gives me the capability of doing this any time. But the ability to expand that and the revenues, those are today's businesses with the Colossus thing being massive in terms of the dollars. The future for SpaceX is space stations. The future is all of these different parts of being able to deal with the rocket ships coming back and then going out the same day, which if he gets it done next year, great. This kind of is like the Tesla part. So, if you think about his business, he now has all of a sudden out of nowhere this component part which is revenues coming in the door in a business where it makes him the fourth largest hyperscaler. I mean, it's really hard to describe that he's joined in with Amazon, Microsoft, and Google already and he's getting business from one of them and he's getting business from Anthropic on that with Starlink >> and he did the deal with Cursor >> and that's the the next thing I was going to say is you get the AI part two. So, he's behind with XAI for sure, but what Curser allows him to do is accelerate the coding side. And so, that has already helped. And remember, he gets to plug into the same thing that Anthropic and Google are plugging into, which again was the first real thing of Blackwells. Now, from what I've heard, and I heard this on a podcast recently, he has secured 20% of all of the Vera Rubin that'll be going out. Now, >> interesting. >> The reason that's important is because if Jensen was going to give these to anyone, these racks, he'd go with the person that's already proven that he can build the data center in this type of environment. And that's the part that I don't think people have have have fully figured out is I think the premium that should come for SpaceX is the ability of him to navigate the bottlenecks that we're seeing and be able to build these data centers both terrestrial where he's getting the side. But he also put out the information on what the space stations will be. So when you break it down, uh a data center right now for 1 gawatt is like 60 billion of of of that about 35 billion is the chips. So you're left with 25 billion. and he's saying he can do the um space station for 5 billion. 5 billion versus 25 billion. The chips are still going to be the same. That's a dramatic difference, which means the margins on his compute would be up there. So, if he's able to do that, and I think Google's invested in that, too. Meaning the reason they did the deal is if he's able to do this, they want to have already secured the rights to that. So, who knows what's in the documents. So, I think SpaceX is really two companies. you're getting a put in it, which is the revenue that's coming in right now. It's still valued extremely rich, but then you're getting this massive call option on these other parts.
>> So, the way I break down I think the investor conversations I'm seeing or debates, there's people who use spreadsheets and they're looking at you know SpaceX is 25 times more uh you know overvalued than they'll name some company. They'll look at uh first AI IPO performance versus the first 6 months or 12 months. uh every historical norm, every historical trend, every single data point in their spreadsheet is telling them SpaceX is overvalued. The other side of the debate are people who essentially believe in Elon and they're saying, "This guy has a track record of being successful. He's the best entrepreneur of our lifetime. I'm willing to bet that just like with Tesla, which is up 25,000%, has compounded annually at 40% a year since he went public. He's going to figure it out and he's going to be able to drive returns for investors." So, if that's the debate, which I I generally think it is, if you then go look at like orbital data centers, I hear it in a very micro way where people say, "Oh, I'm going to take these same exact chips. I'm going to put them into space." A bunch of people say, "Orbital data centers plus Elon Musk, I'm in." And then I hear people say, "What happens if the chips get uh need to be uh refurbished or there's an issue? Uh, we don't have humans there, so I'm not going to invest because, you know, we haven't solved that problem yet." And again, it goes back to I think that there's this like rational spreadsheet driven kind of approach and then there is just like I'm betting on the person.
>> How do you balance those two things?
>> Well, there's a lot in there. Uh so I think the problem and and I've started to talk more and more about this. Building data centers on land might be at this point more complicated than doing them in space. And it's very hard for people to go through this. So >> because >> because of the amount of complexity there is with all of the components that the cooling which is not needed in space. Like when you go through all of the components that go from 25 billion to 5 billion, you're reducing a lot of the friction. But the other thing you're reducing where do we get the land from? Where do we get the power from? This is why he wants to do it in space. Let's just take two parts. The cooling and the energy. Okay? The sun's producing the energy and the cooling we don't need. If you go through that and then you add in the government regulations, the push backs that are coming from we can't do this in the land, I find it very hard to believe that that path is going to be anywhere near as smooth as all of these charts that the sell side puts out on a regular basis. Now, I'm a person that believes in the token usage and believes that we will get to the gigawatts necessary. If you ask me, the two ways we're going to get there, one is going to be batteries. We have to have more storage because I don't believe the government's going to allow us and the the lack of plumbers, electricians, the bottlenecks that are happening at all different components. Memory is going to allow us to get done faster. I think the reality is if we can store energy off the grid, then we can get to the point where we already have enough on the grid on the land. It's going to take a while for the the batteries. All of this is a game of how quick can the innovation happen to get us there. So, when you're betting Elon, you are betting on the person. You're betting on this. But I just want to make one more thing clear for people. So all of last year when I was talking about Micron, it was a $60 to $110 stock between January and let's say April May even even in May. The reason people didn't want to own it is because they didn't think the earnings would happen. Okay. So then the stock goes to 700, 800, 900, a,000. How is something go up a,000% from where it was during the first quarter of last year and it's still cheap today? Well, for that to happen, everyone's forecast on the exponential needs were wrong. This is the issue is if SpaceX is able to send rocket ships up and back down and by the end of 28 they're doing what he wants, which is thousands a year, which means at least three a day where the ship is going up and coming back. Then all of a sudden the amount of satellites that he has out there. Who else can do this? Who's the competition? That's part of what goes into a price. Can Google do that? They don't have the rocket ships to do that. Where are they going to secure the rocket ships? He has most of the satellites in space. So at some point you have to get into the challenges of doing things on land. Who the person is and has he proved that he can do things that are unthinkable and has he figured out a way to go through this? And we're all leaving out the fact that within the next 5 years he'll be using humanoids to do a lot of this stuff. So I just think it's a very hard thing for people to get in. But if the earnings come through even slightly above expectations and if he's sending rocket ships into space and they're coming back and then going back out in the same day, you're going to have a valuation change. Now, that's still on the distribution of outcome. So, I can see where people are bearish the name. I can see where they go through it. But Elon has proven that if you if you get uh if you go against him on the possibility, he has enough of a fan base and enough people that have believed him and made a lot of money off him that I think that bid's going to be underneath no matter what. The whole thing about um space and the ability to do this to me is uh reinforced. There's a book that I read. I know you don't read books but uh it's called the algorithm and it was written by the guy who became the I think the president of Tesla and he talks about the way he got hired was uh he got introduced by Cheryl Samberg. Elon basically is like I got a problem in our sales uh process. And so this guy goes to a bunch of Tesla dealerships, uses different emails and does some test drives. And he's trying to go through the sales process and figure out where are the bottlenecks. and he came from the manufacturing world and what he realized was the way you determine where the bottlenecks are is you look where the physical products start to pile up naturally go over there and figure out why is this piling up and unblock the the bottleneck.
>> So he tells a story that at Tesla what happened is everyone was uh being compensated for test drives not for conversions. And so what happens you'd go and you do a test drive and no one would ever call you. So he calls up the guy who's head of sales and says, "Hey, no more test drives for a week. Call every single person back." All of a sudden sales explode, right? And they go and so he goes and he works there and Elon's way of hiring is, "Hey, you solve the problem." So like you must be able to solve other problems here. He talks about the algorithm which now is famous in Elon world. And the entire idea of the algorithm is you go and you find the bottleneck and then you undo the bottleneck and then you go to the next bottleneck and you undo it. But what he believes is that you should be subtracting as much as possible. when he's got this like idiot index of what are the cost of the inputs and what is the end product. What you just described is like the perfect implementation of the algorithm. One of the bottlenecks is energy. Well, what if we just get energy all the time from the sun?
>> Mhm.
>> One of the bottlenecks is all the cooling. What if we just remove that? Right? And he just keeps going through this. But I also think it's the other side of this which is he understands and is way more strategic than people I think give him credit for that he has a monopoly on rocket launches.
>> Mhm.
>> And so not only can he make his business successful, can he drive the cost down and and you know be competitive, but he's also going to do something that no one else can do. And so it provides this huge moat that only really exists in the hardware world going forward. Like the AI world, it's going to be very hard to build these modes, which you've talked about a bunch as well, right?
>> Yeah. Here here's where I'll get um more negative on investing in SpaceX just on everything you described. So we love narratives of course it's what makes human beings happy sitting around the fire when we started eating meat and our brains started you know changing and we're telling stories and at the end of the day I'm a storyteller you're a storyteller like we tell stories but
>> I invest
>> got a fireplace here. Yeah, exactly. Um, the reason I chose Micron over other things last year and I remember talking to Phil Rosen about this when he put this in his his paper which was um so why Micron and I gave all the reasons for the next well to build the data centers and to move into the agentic world and the agentic world is necessary for humanoids down the road. This is a never- ending thing. We need memory. And I don't think people have really realized that eventually when we make that change into the vision of the agentic world, the amount of memory we're going to need is off the charts. So Micron is a component of that. Here's what I just said. Batteries on one side and orbital space stations for data centers. Do you know what both of them need a lot more of than the traditional one? Silver. I want more silver. So, I listened to a podcast this week from All-In at their liquidity event or whatever they're calling it, and they interviewed someone on the material side, and I highly recommend it's a 25minute interview. The reason it's 25 minutes is I'm sure people won't care that much about it. I mean, if it was Bill Gurley or someone, he'd be up there for over an hour. Um what the guy said, okay, the amount of copper we need for the next 10 years is equivalent, and I think he said 10 years, but it's 10 or 15, it doesn't really matter for the point, is equivalent to all the copper mined over the last 10,000 years. So when people look at this problem, I'm looking for the parts that they're going to need to actually accomplish this cuz it might take him 20 years to get all Elon's been known to say it's going to happen sooner. It helps him raise more money. It helps him do things. So, let's assume it takes double the time for humanoids, for everything. Well, during that time, silver is going to be a bottleneck the entire time, and I think it'll go 10 times where it is today. Now, because it's not working right now, everyone's not involved cuz they like narratives on things that they can buy. Same thing with Bitcoin. Same thing with the whole crypto market. It's the reason why last week we talked about Lily. I know when to bring things to people. It's like, okay, they like to buy 52- week high, so I'll just focus on it. Nobody wants to buy Bitcoin right now because it's way below the 200 day moving average. And I get it. Um, narratives are things that give human beings the ability to feel comfortable that they can ride something because the dream is there. A lot of what Elon talks about is a dream, which I believe in, but I also understand from my father the distribution of possibilities of him accomplishing everything he needs for SpaceX to be worth what it is today. It's not I mean, it's a it's he needs to accomplish a lot and so it's a low probability event. I'll take silver and building a position here in silver and in copper. I have copper stuff. I'm buying energy because all of these things that you mentioned to get to the point where we're actually producing compute, we need to have these physical commodities. And what the guy said at all in is I don't know how we're going to get them. It's a very hard time to get them.
>> Does that just mean that we're not going to be able to solve the problem and so price explodes or does that mean that we can't solve it in the short term? price starts to go up, but then there's a belief that innovation, entrepreneurs, more investment will then kind of unlock the bottleneck.
>> Well, not so you I don't care how good innovation is, you can't get copper out of the ground quickly. You can be the smartest person in the world. If you want to create an algorithm, yeah, you can let that happen. Um, he brought up a point which, and I'm going to I'm going to butcher the name on this, but you guys can all go look it up. Indium, I think it's indium phosphate is a critical mineral. It's very >> that sounds like something I should own, right? >> Well, here's the thing. It's it's a part of the world for Marll. It's a part of the world for Coherent. It's a part of the world for Lumenum. And guess who owns all of it? China.
>> So, one of the reasons that I fully believe that the straight of Hormuz will open up when it needs to is China needs oil. China needs to import. Most of the oil they get are from Venezuela and Iran and Russia. And so when you go through it, we've taken away Venezuela and we've gone through it. So magically the coherent CEO was flying over to Trump when he went to go visit shei. And if you go look up indium indium phosphate, you'll realize it is the critical mineral in all data centers. You can't build data centers without it. And they control it. And they've kind of shut it off like they did rare earth. So when you get into these games behind the reason I bring it up is we need so many physical commodities that are impossible for us to get that if China and the US are continuing on this battle the friction of being able to get all this stuff done on the input costs is really difficult and that's why on the commodity side there will be hoarding we will continue to do it I think the US is trying to hoard energy China's hoarding all of the commod all of the minerals that they spend time on we have to figure a way to make new minerals that's what he was talking about so I just want to make sure when people go through this they realize this is not a smooth path. There are a lot of obstructions to getting to those numbers. And I've been talking about an AI midcycle slowdown, which to me is all about that the growth rate that we had already was a lot of hoarding. And now we're going to be in a phase for the next 3 to 6 months where a lot of these semiconductor names and a lot of the cooling names and a lot of all the things on the infrastructure. We're probably going to have equal news of disappointment with equal news of surprises because we just made it through where we shocked everyone and now we've got expectations of some of the largest earnings growth in the history of the market.
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>> All right, you ready for this? Uh, very in line with this. I had to look this up to make sure I don't screw this up.
>> Okay,
>> so there's a guy Alexander Cortez uh who I've met before. Um, he describes himself as a bro scientist. So he's very into lifting, very into nutrition, very into all of the the things that you would associate with a a bro scientist. Very proud of that fact. One of the things that he obviously is into is creatine.
>> In creatine, he realized that there was some ingredients that are not made in America. And so as a pro scientist, if you're into creatine, you might be worried about the national defense of the supply chain of creatine, right?
>> Is this the merging of us and Uberman right now? So, so this is uh a true story. So, he starts a company. The company is called Athanor. A T H A N O R. It is described as the specialty chemical platform of American defense industry.
>> Now, when as he goes through it, what he basically says is that he believes America shifts towards greater industrial sovereignty. They're rebuilding the underlying chemistry. The mission is American independence in critical nitrogen chemicals >> starting with defense. So what he basically came to and people can go check out the website and stuff, right? But what he basically came to the conclusion of was there was this uh nitrogen type uh chemical that is in creatine >> and he discovered it as a bro scientist and realized hey that's not in America. So he went down this deep rabbit hole but then he realized hey, there's a lot of other applications for it. My take away from that is I don't know anything about the science. I don't know if he will be successful or not. Smart guy he's got some funding and and he's going to go try to do this. how many like you're talking about critical uh or rare earths and critical minerals and all. He's talking about chemistry like if you were to make a list of how many things go into the products that we need here in America that are not controlled by America almost on a weekly basis now I realize that list is longer than I thought it was.
>> Yeah. And now we're entering the point where we're going to figure out what we need for all this to go through it. So the the figuring out of what we need is going to happen. And remember, if you haven't read the story behind where they found a GLP1, it's a heila monster.
>> A what?
>> Hila monster.
>> What is that?
>> Give us a lizard.
>> A lizard?
>> Yeah.
>> It was like in the lizard's body and then they extracted it.
>> I And I again, if you go listen to the interview,
>> you're telling me that all these people trying to lose weight are using lizard extract?
>> Well, lizards basically don't get hungry, I guess, is what it is. And they figured this out. So they wanted to find out how something could go long periods of time without eating much. I David Ricks and and Jensen Yuang talked about this on their interview from uh David Ricks from Eli Liy, but that is like the beginning part of studying and this is where almost every drug we get where he talks about how they would have scientists that would have to go they would just go every year into various countries and go strip soil and fungi from
>> the earth,
>> go test it and see what materials or chemistry was in it that they had never seen before and then see if it might be something that could be used on
>> Darwin. Wasn't he is he the one who was on the uh the trip around the world on the boat and and discovered like by studying a bunch of animals a bunch of like scientific theories?
>> Yeah. Andos.
>> Yeah. Yeah. Yeah. All right. So, we got Darwin Jensen.
>> But this is the way pharmaceutical companies would find new advancements. But again, from the time you'd find it until the time that it went into a human body and it went through it. I mean, it could be a 30, 40, 50 year process. So, the Hila monster thing, it GLP1s had been around for a while, but
>> maybe that's where lizard brain came from. You ever heard that term?
>> No. But
>> yeah, a lizard brain like like you know if somebody's got a lizard brain like a game because they're the ones trying to lose weight. Maybe
>> you're teaching me new stuff today.
>> All right, let's talk about for a second uh the AI model. So there's these two uh tweets that I saw that I think are very related but but pretty interesting. So the first is that uh Semi analysis the uh research firm went and they did a study. These guys went and they bought subscriptions to I think it was OpenAI and Anthropic and they basically started to use the product and they were trying to measure how many tokens are we using. What is the API cost of those tokens and then under the subscription what are we paying and so are these matching up or not? And the basics were these are being heavily subsidized by the companies. The companies are selling you tokens below their actual cost of production and therefore the companies may be driving tons of revenue but they're actually losing money in the short term. We've seen the story before. We've seen venture capitalists basically subsidize uh ride sharing, many other industries. At the same time, there is a guy who was tweeting saying that he thinks somewhere around 80 85% of queries could be moved off of the latest models. And so you don't need to use Fable 5 to figure out what the weather is or you know what uh the address of something is. Instead, you may be able to use just cheap free uh Chinese open source models. that feels like a lot of pressure on these AI companies. So on one hand you have at some point your investors are like stop subsidizing and get the positive unit economics and you know make sure that these are sustainable businesses. At the same time your customers are essentially saying wait a minute I am spending way too much money and so rather than having token leaderboards people are now talking about token limits for employees and and actually throttling the use of these technologies internally. Do you worry at all about the anthropic and open AIS and the, you know, pending IPOs and all that stuff from these stories or do you feel like the demand for this is just so off the charts that none of that matters?
>> Well, I think there's two separate answers. Of course, it matters from a stock perspective. Does it matter for the companies being a bubble? No. Does it matter from the And I'll go through why. Does it matter from the company's um one of them being in trouble? Everyone thinks Open AI is in trouble. I I don't see it that way because we're still in the very early stages of adoption. Um the very early stages. So I think a lot of the issue is the acceleration again. And I'm going to keep saying this again and again and I think people need to, you know, to fully grasp it. If this was just software, there's no shortages or bottlenecks. Part of the issue that comes in on this is you talked about the price is going lower. The other side is the cost of producing the tokens is going up dramatically. And when I mean dramatically, I mean we're talking about four times where it was a year ago and it might get cheaper, you know, over time, but that's not happening yet. And we have bottlenecks. So, can we give them the capacity they need is one problem to be able to sustain the ARR. So, it's great if you have more adoption, but it's like, hey, I we have a thousand people that want to come in the restaurant tonight, but we only have 20 seats. Well, you're not making new seats. So you're in trouble. So you can charge more prices, you make it more exclusive, and that's what ends up happening with great restaurants. The model situation is is going to be a problem in my opinion for the near term. And that's why they're racing to the market. When you connect all the dots, why are they all coming to the market at the same time? Why did Google raise money? Why did Meta say a week or and a half later that they were going to come to the market for tens of billions? Why is SpaceX, which is an AI company, Anthropic, Open AAI, and then Open AI, Wall Street Journal article this week, price competition, we're going to lower prices. Like, I I think it's a it's a problem. And if that was not enough, you mentioned something critical. Deepseek is a major story that did not get any press in the last month. So they not only released their model which on a comparable basis is very close to the models but they reduced their price cost dramatically. the AI uh Chinese stocks, the model stocks are selling off and the reason is because they're in a deflationary situation and that has always been my belief is that these models will be commoditized that you don't need to use the most expensive ones and that the corporations haven't figured out yet how to use them. When you put all that together and then you add in Bernie Sanders and Donald Trump want to own part of the companies. I I posted on X. There are so many headwinds when the Pope speaks out against the models. Like, how many things do you want to have where people are like, "Slow this down." And then Daario released just yesterday. I think it was yesterday, maybe it was this morning, I don't know, but he released and I forget the name of it, but he released why we're at a critical point. Now, again, he does this all the time, but I happen to agree with one thing. We are getting closer and closer to AGI because coding is getting better and better. That is the next step to it. We've been doing it without Blackwell and Ver Rubin. Now we're going to have those as well. This is going to accelerate. So for everyone like just thinking there's no downside and that these curves are going to walk out. It's not going to happen that way.
>> Why is everyone going public when the music's on? You better be dancing. George Soros, when I see a bubble, I rush in to push it higher. Like that's why, right? is like you go public now or you may not get a chance in 12 months, 18 months, whatever. So that's first. Second, the number one thing I tweeted this back in May and you know people, they're still trying to figure out if I know what I'm talking about with the AI stuff. I said, every single conversation I'm having with the CEO of private companies right now, the mandate from heaven 12 months ago, everyone use AI. Now, wait a minute, these bills are too high. how do we go and try to figure out some different way doesn't mean we don't want you to use the AI but we need to get smarter about how we efficiently consume these tokens right so it was we want to use AI we just want lower cost and so naturally there there's an economic incentive to go pursue this
>> now what I also find really interesting is people in terms of users whether it's open AI anthropic we see it with Sylvia etc they are learning what the limitations of these products are but they're realizing that the limitations are way further than they thought they were. And so you I have the Sylvia data. It used to be that people ask six questions per week per user.
>> Mhm.
>> It's a lot. Almost one a day. It's now 15. I'd like to think we're some geniuses and we made the user experience so much better. Whatever. No. People started to realize what can I do with this thing? The thing got smarter because we keep upgrading the models and therefore you at from a demand perspective ask more and more questions. That's got to be happening. You're you're telling me that Fable 5, you know, uh, queries per person per week is not higher than whatever, you know, opus 4.6 or what? Of course, it is.
>> And so, as you see this going, it again is not just a look at today's demand and look at today's supply. This is a very weird market where demand is actually going exponential
>> and the supply is not responding in the way that it needs to. So, the problem you're identifying today is actually getting worse. And I think that's maybe the the aspect that people don't quite yet wrap their head around is if the models are getting better and demand is also exponentially increasing and that's just humans we haven't talked about the AI agents doing all this stuff how does this end like do we get to a point where do you see the ad uh product so when you when you uh put in a query somebody built a plugin
>> Mhm.
>> So you put in a query, you got to wait. Well, why don't I just serve you ads and if you watch the ads, then you can get paid to cover some of the cost of the compute that you're using at the same time.
>> So like you people are going to start doing what the internet does, right?
>> Do we just end up in a world where everyone is watching the spinning dial and just, you know, waiting and waiting and waiting and waiting.
>> Well, I I think you brought up a point that that I've said to people when they get too negative. So the one side it's like, okay, don't be too positive. And the other side, you're talking about innovations that are going to happen that they're going to figure out. So I I'll give you two examples. One is when you get on an airplane, there's first class, there's business class, there's comfort, there's all these different things and they're priced differently. Um the amount of capacity that Anthropic has access to. You mentioned that there's a lot of things that are costing them money, but then on the flip side, they have a lot of high margin agentic stuff and for inference. Now, if a cancer company is willing to pay for this cuz they have a product that could make them a ton of money, then why shouldn't they be using this than Tom and Mary using it to just chat and paying the $20 which is costing them money cuz they're using it all the time. Eventually, what'll happen is that'll change and they'll direct people to cheaper models because they're like, "Hey, it's $5 if you use Opus 4.7, which is a great model. It's just not as good as Fable." and they'll start figuring ways to get that capacity off of there over time. There'll be ways for them to do an open source model. We're starting to see more open source models. So, we didn't talk about it, but Neatron Neatron, which is the Nvidia one, it's pretty high on the list. I was shocked at how well it did. I mean, Nvidia puts out an open source model to compete with the Chinese models, and it's not that far below. I read some of the things on there. I mean, it's it's it's a lesser model, but the question is, do you actually need those? And if you can get a laptop and a phone that has Neatron on it, is that a better way to do things? So, I think we're we're missing that between Yeah. advertisements will be on. You're going to have this. You'll have surge pricing like, "Hey, just like you do with Uber. It's like, hey, right now we've got this much capacity. Who wants it? You can pay the most. This is what you're going to pay for." I think everything is going to be over time automated more. I just think that this period for the next three to four years, we just don't know what's how commoditized it'll get, how difficult it's going to get for all these companies. And I've believed all the time and I still believe it. I don't think all of these companies are going to win in the end.
>> Who's going to lose?
>> Come on, we're here for Alpha. So I I will say that if you ask me between Daario and Sam Alman who I think now Sam Alman in my guess is not going to be the leader of OpenAI at some point soon. That's just my guess.
>> Soon.
>> Yeah. I I would be shocked if with within a year if he's still running OpenAI. That's just me.
>> Because he doesn't want to run or because they may ask him to step down.
>> I I'm going to say both. Um remember the incident at his house and all this stuff. I I'm I'm not sure it's fun like to be in that position right now. Uh I just think that Daario has chosen a political angle in this whole thing which is fairly popular with half of the country and I think Sam Alman has nobody who seems to really like him. Um but the product people do like and I still use it at this point or not still. I did have a period where I used Claude almost exclusively and it went down significantly but now I've gone back to Chad GBT. So I just think in the end OpenAI has an uphill battle because they made a bad decision. They tried to choose the consumer Apple side as opposed to the enterprise side. And I think as long and since Andre Carpathy was brought into um CL uh Anthropic and I keep hearing that they're just attracting the best talent now. I think it's really going to be hard for them to catch up in something as important as coding which will lead to AGI. I I just think at the end anthropic is is is the winner of that battle from from my perspective of
>> I mean they are definitely the winner today right um in growth rate revenue momentum you know all all of that stuff um it is a different market that they're going after but but I do think that that's a key part the big thing I wonder is uh can they go and strike uh open can they go and strike deals like could they be part of the Apple ecosystem and you know somehow get their product embedded I I have no clue But, uh, that seems big.
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Let's talk um you and I are both Knicks fans.
>> We're not going to spend a lot of time on the fact that uh the New York Knicks are going to win the NBA championship and uh you know, greatest comeback of all time, etc. U we could talk all day long about how uh Wimi is the greatest choke artist of the NBA. Um or that he's soft and got hit in the head with an egg. We're not going to talk about all that.
I >> guess you're trying to lose the San Antonio audience now.
>> Well, you know, Charles Barkley already shared a lot about San Antonio. I'm not going to go there. Um but but uh you went to the game
As did I, and you had a very interesting insight, which the Knicks NBA Finals experience drew something back to your thought process around AI, crypto, etc. Explain a little bit, uh, what your takeaway was.
Well, first of all, if you go to my YouTube channel and you look at my image there, I have a Knicks hat on. That's from years ago. Um, the Knicks are a very important part of who I am as a person. I'm not going to go into great detail. I'll probably write something about this soon, but let's just say I went to hundreds of games, uh, as a kid myself. Meaning, my father never took me to a Knicks game ever. I decided, when my parents got divorced, I started going to the Knicks games. And I was a young kid, skinny, acne, introvert, and someone who, let's just say, was more on the popular side of school, uh, kind of adopted me. I was a good athlete, um, captain of some of my teams and, um, had a brain, and he identified that. But I was a massive sports fan, and I was a bit of a, uh, strange kid in the fact that I could memorize baseball cards and I knew stats on everything, and I was an analytical geek. And we just started talking sports, and he and I started going to the Knicks games.
Uh, for those of you old enough, Harry M. Stevens, which used to do the, um, the refreshments and everything there, selling the cotton candy and the stuff in the stands. Well, let's just say to get in the games, I paid those people. I would show up with my friend. We'd pay them five bucks, and they'd bring us up the back halls and bring us into the game.
And, uh, in those days when they were really door, >> Yeah, they were really bad. Uh, I'd sit wherever I wanted 'cause there's nobody in there. Uh, the scalpers, I knew all of them by name. We would sit outside, and they'd throw the tickets, crumbled tickets at us, because we would wait until the end. We said we'd give them five bucks. They would hold out, and then at halftime, they'd give us the tickets, we'd go in. So it was a huge part of me starting to take risk. It was a huge thing. But I remember all of this, and in 1999, after having gone to most of the important games because luckily I started making enough money to be able to afford them, my friend and I went in '99, and that game ends. Disappointment. We're depressed. We're both Nick fans. We're both Met fans and Ranger fans and Jet. Well, I was a Jet fan. He was a Giant fan, but next year we go to the Subway Series. And here's where the long story ends.
Um, >> Other than your poor team selection, other than the Knicks. >> Yeah. No, no, no. Let's just take it for where it is. So, we go to the Subway Series games, and at the end of them losing, he turns me 'cause I bought all of the tickets to all of the games, and he's like, "Are we going to have enough money to buy tickets when these teams finally win?" So he died a year later in 9/11. And so the hard part for me in going to hundreds of games with that one person, how do I go back to a game? And the Knicks are my team. Like, that is it. The other teams I like. Um, the Knicks I love, and it's a passion for me. So it took me a while to go back to the Garden.
So fast forward to this particular event. >> Um, Wednesday was Wednesday, the, the >> Greatest basketball game ever played. >> The greatest comeback ever. And I will say, um, I've become good friends and actually advisor to a company, Candy Digital, and we both know Tad Smith who's involved with it, and I got to go with them. Now, Candy Digital, the reason I got interested in what they were doing is because of the experiential side. So, I've written about my belief in stablecoins, tokenization, and NFTs as the three stools of the utilization and the network effects of crypto. And being at the game Wednesday, uh, as a sports fan, when you win two in a row on the other team's home court, your brain is immediately, okay, we got a 90-plus percent chance of winning this thing.
>> Knicks fans were outside with brooms. >> We're going to have this done. Then you go to game three, you watch it, and you're like, okay, you know, we were a little too high on things. We had to come. When you're in the stadium, and this is what I thought about in game four. So for crypto people, this is what I believe. The world is filled with AI slop, and it's only going to get worse. The world is filled with deep fakes. It's only going to get worse. This will never stop. Anything that you watch, there will be billions of movies. There will be, it will be impossible. There will be billions of podcasts, and there will be impossible to find stuff. The best content will rise to the surface. But the experiential side of Wednesday night blew me away.
So I sat there thinking about NFTs from the community aspect of being there. It was a game where I thought they were, halftime, I'm like, "Oh my god, my brain, the anxiety that's happening. We not only won the first two, but now we're going to lose the next two, have to go back. We lost home court advantage." So I was already extrapolating if they lose, how bad it'll be. You can't replace that with AI. That feeling when I left and I headed back to Brooklyn, I took subways. Everyone on there was screaming. It was filled at >> the subway, the subway employees. >> They were honking the horn when they came into the station at both places. So the city itself, the community, and these were people not at the game. So people realize >> the community aspect, the experiential side of "I was there, I'm a Nick fan," all of those things. You guys don't have to believe in NFTs because of the art side and all of the things you saw, but the true aspect of how important that event was and how it cannot be replaced by me, by a TV show, by anything. And being there and feeling it was the most powerful thing. And so in a world of AI, in a world where you don't know what's real on anything, I fundamentally believe the blockchain and crypto is critical to all this stuff. So, it was a big event for me on many, many levels, but it was especially a big event to connect it back to this thing of having an NFT for it, to knowing that I'm part of the Knicks community, feeling it afterwards, and just feeling the special nature of what the city was like.
All right. I, I, uh, I won't play devil's advocate for this. >> Okay. >> Because, uh, while you were talking, I remembered the tickets I had were on my phone, >> You know, Apple Wallet. I go up, very easy to get in, by the way. Anything you read on, uh, uh, in the media that it was hard to get in was not my experience. I don't know about you. >> Ticketmaster is an early edition of NFTs. >> Yeah. So those tickets though on your Apple Wallet disappear in the sense of you can't do anything with them. >> Mhm. >> So what did the Knicks do? They gave out, every fan who showed up got three things. You got a t-shirt. >> Monday night t-shirts were awesome. Like old school wrestling t-shirts, basically. Get a towel, and then they handed you a physical, inside of a laminate case, a physical commemorative ticket. And I said to myself, it's like hilarious that everything went digital, but people still want the commemorative ticket. Now, the reason why that's interesting to me is Darren Rovell, sports business guy, super into collectibles and physical stuff. Um, couple hot takes here and there, doesn't like Bitcoin, but that's besides the point. Um, he was talking about those commemorative tickets from the game Wednesday night, game four, greatest comeback of all time, already by Thursday morning, like 50 of them had sold on eBay. And so you say to yourself, wait a second, this isn't even a real ticket to the game. This is basically like a chachki that got handed out right now. It has a story behind it. It has, you know, in the moment, like the morning after, versus will they be valuable in 10, 20 years? Who knows, right? But isn't them giving that commemorative ticket, the fact that people watch something physical as the like memory? >> No. >> Or do you think it's a both? It's not an either or. >> So, let's put it this way. Um, tomorrow, if these things are selling on eBay for any amount of money, there'll be a flood of fakes in two seconds made, and there'll be 24 million of them sold at whatever price people want to pay for until the price drops. This is the whole point of scarcity. This is the whole point of, is it a real thing or is it a fake thing? Well, you don't know unless it's on the blockchain. And this is my belief on on on AI and deep fakes. This is my belief in everything is that people are underestimating that that event is much better for two reasons on the blockchain. Number one, it's actually proof that you were at the game. Number two, you don't have to worry about losing it. You have it. It's in your wallet. It's part of your DNA. It's a passport. It is what it is. This is the whole point of going through it. So, I just, I sent a photo of the one that I got at game one, at game three, and then sent it out at game four. But that thing means nothing to me. And it comes from a person who handed down to his son Bernard King jerseys. I handed down to him the New York Post headline of the Subway Series when they were starting it with all of the tickets to the game, the physical tickets to the game. When my friend died in 9/11, the obituary in the New York Times said that in his wall were Nick tickets and Bruce Springsteen tickets everywhere. So again, those physical tickets >> That's been in the past. >> Did you say, Did you save yours? >> Save which one? >> The commemorative ticket from game four. I'm, I'm about to break your heart or make you very happy. >> Yes, I did. >> Okay. I, I have one. Thankfully, my wife also saved hers. Right now on eBay, >> Yep. >> They're going for between $300 >> Mhm. And I see some listed as high as, uh, $450. I mean, that's crazy. By the way, that's more the commemorative tickets from game four might be more than some of the Spurs tickets were >> Earlier in the playoffs. >> Yeah. Again, I, I think it's very difficult for people to envision the world that's coming due to AI. But again, I do this as a joke, but I'm like, if you're not thinking that five, if you go back five years, that is after COVID, that's how soon five years ago was. Well, five years from now, we're going to have humanoids >> in the street. We're going to have humanoids in many, many places. >> So, you can't envision the world that is going to be here when everything you don't know if it's real or fake. You already really don't know that with anything. And people might think they are, but I'm telling you, things will have to be put on the blockchain. And whether it's real world assets that are converted, my belief, and that's why these things right now might have some value to people because they want to have them and say that they were there, but the reality is it's not going to >> Last thing. Uh, we did not plan to talk about this. We only got a couple minutes before we got to go, but, uh, Jeff Bezos announced Prometheus, I think is how you pronounce it. Um, maybe I'm butchering it, but matters. Jeff Bezos's new company. He's co-CEO, which, uh, he seems pretty involved. They raised something like $12 billion at a $40 billion valuation. Some crazy number. Uh, to be honest, like Jeff Bezos, I'm surprised he doesn't just raise at a trillion. Like he's like, "I'm Jeff Bezos and I'm doing something in manufacturing." But the entire idea is he basically wants to use AI and he wants to use hardware to get better at building things. So his thing is, if it would take, I think the quote I saw was something like 10,000 people 10 years to do something, why can't we do it with 100 people in a year, right? How do you significantly increase the efficiency? Um, excited about this? Think this is, you know, Bezos's retirement plan and he's just, you know, playing around. What, what are your take? >> I, I mean, to a degree, this is kind of Chimath's 80/20 business. I think it's 80/20, or is it 90/10? I can't even remember. But regardless, um, let me do 90% of the work with 10% of the people, or 80% of the work with 20% of the people. I think when I pay attention to the pharmaceutical industry, and I think about how they're going to move from getting things from phase one, and as I mentioned with the Eli Lilly paper, when a company that has historically showed the world what it's doing in phase one, and now it won't do that because it believes that the ability to catch up due to AI on something like pharmaceuticals is quick, that it only makes sense that they would start doing this in the manufacturing and the physical side, particularly as we're getting closer to humanoids. So, does it make sense? Of course it makes sense. And I think this is the trend. I think from the perspective of what he's doing, he's trying to get ahead of the curve and make sure that on the physical side, there's a company that can be used to be used in the process. And I think that's where this is all going is that it's much easier to have an outside place be hired to do that as opposed to you figuring out as a company how to spend the money and go through it. And so all of these moving pieces with very smart people in Silicon Valley, and this is I think where the MIT grads are going, is everything is now towards the physical hardware side because that is the bottleneck. So the one good thing about innovation in human beings, if there's a bottleneck, that means there's inflation. If there's inflation, that means there's margin that can be made and there's a demand for it. Because if inflation at a time where we have constant deflation due to innovation, the way that we solve that problem is we throw a lot of money at it, and we throw a lot of innovation at it. And so I think he's just hitting on a topic that I talk about all the time here, which is the bottlenecks are real, and he's trying to get a company that is to help with the bottlenecks regardless of where it is.
All right, before I let you go, this is my one AI use case of the week to blow your mind. We're going to start a new series here now that we're in the conversation cathedral. Todd Saunders tweeted, "Methos and Fable is unbelievable. I was on a customer call today and had Claude transcribing in the background. As the customer was telling me about the features they wish their current software had, Claude was building the features in real time. By the end of the call, I was able to show a fully working product with the exact workflow they mentioned 15 minutes earlier. Autonomous looped building triggered from a customer call. If you're a salesperson and you can do that, you may become a trillionaire." Like, if you can build custom software while on the call with the customer before the end of the call, show them the solution. >> Yeah. >> So, let's just get back to the parents out there of kids. And I met with someone I worked with when I first got to Morgan Stanley. Um, he wanted to, uh, he wanted me to sit down with his oldest kids. So, I met them, um, after a workout. I sat down. We talked for an hour and change. And the entire conversation was about artificial intelligence. And, you know, I have this, and we talked about this beforehand, but I put together this paywall because there were three components that I think are critical. And this is not a promo for people to go sign up, but this is just the way that I would think about it. So for me, in trying to explain to people what's going on every day, you and I talk about everything that happens. And we don't have to create a script on what we talk about. It's just you and I going through X and reading the same stuff. It's amazing everything that happens in a week. It is impossible for a human being to keep up on that at a job unless they're listening to podcasts where someone is doing it for them. Well, that's what I do on the paywall is I'm trying to, in the weekly video, it's give people what's happened for the week. In the paywall, I go further and I write papers about specific topics and things like that to explain it in a way that hopefully they understand it. That's the signal part, like there's value in knowing what's happening and what's going on. The alpha part is for the investors, and that part is what names they should focus on. If I talk about Micron, if I talk about Marvell, how are they connected? It's giving them the explanation of which theme they fit into in AI and the whole infrastructure. So from an empowerment basis, this is a bull market in AI, and there are going to be periods like now where I think we're in a mid-cycle slowdown. That doesn't mean that it's a bubble. That just means they go sideways. Some of the names have trouble, but I think the hyperscalers have more trouble than these guys do. So I try to prevent waves that they can be long and things that can be short, what the timing would be. But the final part is the most important, and that's what I spent the time with, um, my friend's son, and that's what the parent should do. Your children need to be using AI. So that example you gave, anyone can do something like that, but they have to use artificial intelligence every day. And so when someone goes, "Well, this is this the major I have, and this is the degree, the job I want to get." I'm like, "There are no more silos, guys. Like the silos are over. I know you think you have to stay in your major. Don't think that way. Take a job, help a company in a different business, help a company in something else. All of those skills, by the end of time, you'll be an AI native person that is able to do the things that you mentioned."
I, um, I think that this is just the tip of the iceberg. Like I saw that and I was like, "Oh my god, imagine how you could build things for children, you could build things for customers, you could build whatever." So, um, all right. You're not going to tell people to go sign up. I'm going to tell people to go sign up for your paywall. Uh, what is the URL for this thing? >> It's, uh, ai.22vresearch.com. >> All right. AI.22vresearch.com. If Jord's ever helped you, go sign up. Just, just do it. I'm not going to give you some hard pitch, whatever. Help the guy out, right? He's doing a lot of work. Uh, it'd be very nice of you. You know, consider like a Father's Day gift, maybe a birthday gift, anniversary gift, what, whatever. >> And this week I did put up how to build a knowledge brain in 30 minutes, so you can build Jensen Huang's knowledge brain that I've talked about on this show. >> Yeah, there you go. So, if you've made money listening in shorty, come on, let's go. It's called a tip. Go tip them at ai.22vresearch.com. Um, thank you for doing this. Do it again next week. Go next.