Why the infrastructure build-out doesn't need trillion-dollar labs

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 1:08:21

   Well, you know, all these different things, you just got to break it down, break it back down to first principles. And the part that people are trying to extrapolate, the $100 billion of AR or $125 billion with AR they're trying to extrapolate, is a small part, not a small part, it's just a part of the overall infrastructure build-out. For sure. And so the question is, are people going to continue doing shopping online?

2. 1:08:48

   Right. So that third of the build-out, let's call that a third. You said it's a third of your business. Take that to the bank. Yeah. Right? Right. That's not even a debate. So, a third of the build-out is going to occur. I said a couple of years ago that as we exit this decade, infrastructure build-out will probably be somewhere between $3 to $4 trillion a year. Obviously, it's closer to $4 than it is closer to $3.

3. 1:09:15

   Per year. Per year, yeah. By the end of the decade. Yeah. And if you said that $1.5 trillion of that was just compute. Right, right. Just compute. Now, why is it going to be so big? Well, it was half a trillion before AI started. Right. And if I told you that over the course of some six, seven, eight years, it became one and a half trillion because the world's just consuming more compute? Right. I mean, that's not illogical.

4. 1:09:41

   Right. On top of this, remember, Moore's law is over. Right. There was a time, if you want to get twice as many transistors, you just wait one year. Right. And if you want twice as many transistors, wait one year. same price. But if you want twice as many transistors now, it doesn't matter how long you wait, you have to pay twice as much, okay? Because Moore's law is over. And so whatever computing capacity that the world wants, every single year, if you want twice as much, you're going to pay twice as much. And so on top of that half a trillion dollars that was kind of growing just naturally, because the world just used more and more digital, you're going to have to effectively, you know, give it an X factor just to account for the fact that Moore's law is over.

5. 1:10:28

   And so without AI, the semiconductor industry was on its path to become the largest industry in the world. Right. And I've mentioned that long ago, just people forgot, which is one of those things that I said. Yes, yes, yes, yes. I just said that two years ago, yeah. Yeah. And so that's just one part. Right. And so the only thing that we, and then don't forget, because we're in a new computing platform shift, there are going to be a whole lot of startups. Innovation is part of the economy.

6. 1:10:56

   New companies- And we said it's accelerating. Yeah. So if we spent, if you go back to Moore's law, general purpose compute, $5 billion per gigawatt. Yeah. Today it's 50. Yeah. Right? For a Vera Rubin. So the question is, is Vera Rubin deliver 10x more value in the world? The punchline is, I don't think it's necessary to extrapolate any of the labs into multiple tons of dollars. Unnecessary to do that. I think that's a, I mean, it's an important one because I think people, you know, we just saw yesterday, you know, even in the market, you know, some chatter about was OpenAI's revenue 70 billion or 50 billion? I think you and I- They're going to be insanely successful companies.

7. 1:11:34

   Correct. Yeah. But you saw the pullback in a lot of the infrastructure companies, right, on the fear that, oh my gosh, OpenAI doesn't have the money, won't have the money in order to pay for the infrastructure. I think the point that you're hammering home is that when we look at the 40 gigawatts of infrastructure built out next year, at least a third of it is just going to write general purpose compute replacement, the basic stuff out of the hype.

8. 1:12:00

   for scalers, that a third of it's going to kind of neocloud, sovereigns, enterprises, everybody else who's using this, all the startups, and a third of it's going to not two labs, but to many labs, right? Including Grok and Thinking Machines and all the other- We're putting way too much pressure on two labs. I'm delighted to partner with them and support them. They're going to be two of the most consequential technology companies ever built in history. They're going to be magnificently successful, but they don't have to be anywhere near a trillion dollars in revenues to be successful right yeah and i think we're putting way too much pressure on that and then the rest of the industry we still do have to build out a few trillion dollars of computing infrastructure um just to keep going um let's let's shift how

9. 1:12:44

   good is this you guys come on by the way what are what are these called these are dried plums yeah dried plums the old dried yeah this this one particular store in taiwan is one of my favorites