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

Jason and Alex kick off the show (0s)

• The show is brought to you by Squarespace, where you can turn your idea into a new website and get a free trial at squarespace.com, and use the offer code "twist" to save 10% off your first purchase of a website or domain (30s).
• OpenPhone is also a sponsor, providing business phone numbers that work through an app on your smartphone or desktop, and listeners can get an extra 20% off any plan for their first 6 months at openphone.com (46s).
• Lemon is another sponsor, offering pre-vetted remote developers, and listeners can get 15% off their first four weeks of developer time at lemon.twist (1m0s).
• Alex's weekend was rough due to his baby going through a period of colic, but he's glad to be back at work (1m15s).
• Jason mentions that having an older child makes it easier to forget how hard it is to care for a newborn, but Alex's second baby is currently harder to care for than the first one (1m38s).
• Colic typically peaks at around 3 months, so it should get easier for Alex's baby soon (1m55s).
• The show is live on Twitter and YouTube, and viewers can watch on Monday, Wednesday, and Friday at 12 central time, 1 pm eastern time, or 10 am Pacific time (2m30s).
• The live show is a bit more unpolished than the podcast stream, but it's still fun to watch, and the hosts are considering locking in the Monday, Wednesday, Friday schedule for next year (3m2s).

Election security in America and challenges of swinging state votes (3m34s)

• Election security in America is a topic of discussion, with many arguing that the system is insecure, but the reality is that the system is getting tighter and better every year due to increased scrutiny on the 50 different state systems (3m34s).
• 35 out of 50 states have voter ID laws, watermarked ballots, and are essentially impossible to game at scale, although it is possible for individuals to cheat on a small scale (4m18s).
• The lowest swing state is Georgia, which requires 13,000 votes to swing, making it extremely hard to cheat on a large scale (4m52s).
• The discussion highlights the challenges of swinging state votes, with the speaker arguing that it is not possible to cheat on a large scale without being detected (5m7s).
• The speaker praises Jason for taking a neutral stance on politics, despite facing criticism from both sides, and for sticking to his guns (5m44s).
• The speaker expresses their dislike for both presidential candidates and their parties, citing the national debt as a major concern, predicting that the debt will increase by $9 trillion over the next four years (6m43s).
• The speaker hopes that the Department of Government Efficiency will be established, regardless of who wins the election, to address the country's spending issues (7m51s).
• The speaker encourages everyone to vote, emphasizing the importance of having a say in the democratic process (8m0s).

AI-generated video game by Decart and its potential in gaming and entertainment (8m41s)

• The discussion will cover several topics, including AI in gaming, Nvidia, GPU clouds, nuclear energy challenges, and Waymo updates (8m41s).
• Nvidia is once again the most valuable company in the world (8m45s).
• The discussion will touch on GPU clouds, which have some interesting notes (8m48s).
• There are challenges in nuclear power related to AI, which will be explored (8m53s).
• The latest numbers from California regarding Waymo's self-driving ride growth will be shared (8m57s).

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• Dearcart, a company, has developed a new AI model called Oasis, which generates a Minecraft-style game in real-time, frame by frame, as the player interacts with it, creating a unique gaming experience (10m38s).
• Oasis is a playable, real-time, open-world AI model that autogenerates a game, but it currently lacks permanence, meaning the game world regenerates every time the player turns around, and the environment changes (11m57s).
• The AI engine behind Oasis takes player inputs and information to build the game around the player as they play, offering a dynamic and immersive experience (12m0s).
• The technology used to create Oasis is off-the-shelf, and it is expected to have a significant impact on the gaming industry in the near future, potentially changing the way people interact with computers and download apps (12m38s).
• AI technology can generate personalized content, such as a customized version of Age of Empires using pictures from a user's photo album, in real-time (12m57s).
• AI models like Chat GPT, Claude, and Gemini are improving in accuracy and reducing hallucination issues, with citations becoming more frequent (13m28s).
• The future of entertainment platforms like Netflix and Disney may involve AI-generated content, such as customized episodes of shows like The Mandalorian (13m57s).
• A chart showing the number of unique users who played a game called Oasis from dcart reveals over one million unique users in less than four days (14m32s).
• This rapid growth is impressive and may be a sign of things to come, with the potential for startups to reach a large audience and generate significant revenue quickly (14m50s).
• The concept of a piece of software or content going viral and generating a large amount of money overnight is becoming more plausible, with the potential for a startup to reach a billion people and earn a billion dollars (15m9s).
• Social media platforms like Reddit, Twitter, Instagram, and TikTok play a significant role in helping content go viral and reach a large audience (16m15s).
• The future of entertainment and content creation may involve more personalized and AI-generated content, with the potential for new creators and influencers to emerge and gain fame quickly (16m38s).
• The concept of instant virality is shaping the future, where a large audience can be reached quickly, and if a million people pay $10 each, it can be a significant revenue stream (16m42s).
• A strategy for startups is to create something compelling and package it in a way that can be shared repeatedly on platforms like TikTok, Twitter, and other viral formats to reach a wider audience (16m55s).
• Releasing content on TikTok can be an effective way for groups of people to share their work and gain traction (16m52s).

Viral growth strategy for startups and collaboration between Decart and Etched (17m7s)

• A viral growth strategy for startups can potentially eliminate the need for a series A funding round, thereby avoiding 20% dilution, as seen in the case of Comm.com, which went from a seed round to a $250 million round without an intermediate series A round, thanks to its successful paid marketing efforts (17m10s).
• Decart, the company behind the Oasis model, is collaborating with Etched, a Twist 500 company that builds Transformer-specific chips, with plans to run Oasis on Etched's hardware in the future, which will enable 4K resolution (17m59s).
• Etched's Transformer ASIC is designed to handle only Transformer-related tasks, and the collaboration between Decart and Etched is an example of a hardware startup and a software startup working together to create AI products (18m3s).
• Runway AI, another AI company, has developed a model that allows for real-time changes to camera angles in video creation, making it a more usable and editable tool (18m36s).
• This development addresses previous limitations in AI video creation tools, which were unable to provide consistency or editing capabilities, making them less useful for practical applications (19m5s).
• The advancements in AI video creation tools are rapidly overcoming the constraints of software, GPU processing, and hardware limitations, making them more viable for use in industries like Hollywood (19m29s).
• The ability to edit and iterate on AI-generated content, such as changing viewing angles, is a new concept that has the potential to revolutionize the use of AI in content creation (20m1s).

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• OpenPhone offers a business phone line and complete control for just $15 a month, a significant cost reduction compared to traditional corporate phone systems that cost tens or hundreds of thousands of dollars (21m0s).
• OpenPhone provides features such as syncing with HubSpot, AI-powered call summaries, and automated responses to ensure no calls are missed (21m11s).
• The platform allows users to know who is answering customer calls and how they were handled (21m8s).
• Existing phone numbers can be ported over to OpenPhone at no extra charge (21m22s).
• New users can get 20% off their first six months by visiting OpenPhone.com and using the code "Twist" (21m29s).

NVIDIA's value, financial speculation, and customer concentration (21m37s)

• Nvidia has become the most valuable public market company in the world, surpassing Apple, Microsoft, Alphabet, Amazon, Aramco, and Meta, with a market cap of approximately $3.4 trillion (21m56s).
• As a result, Nvidia is set to replace Intel on the Dow Jones Industrial Average, which is considered a significant milestone for the company (22m7s).
• The inclusion in the Dow Jones Industrial Average can lead to programmatic buying of Nvidia's stock, as index funds and other investors automatically purchase the company's shares (22m34s).
• There are speculations and allegations of accounting irregularities and potential conflicts of interest at Nvidia, which some people believe could be a "house of cards" (23m24s).
• These allegations are not confirmed, but they have sparked a discussion and raised concerns among some investors and market observers (23m28s).
• The situation is compared to the "anti-Tesla movement" that occurred when Tesla's stock price was high, and some people doubted the company's ability to deliver on its promises (23m54s).
• The discussion highlights the importance of understanding the underlying issues and allegations when they arise, in order to make informed investment decisions (24m51s).
• A thread by "mandm cash app serum" on the topic is mentioned, which outlines three ideas about how Nvidia might be "buttering up" its investors (25m4s).
• Nvidia might be giving out sales rebates, but booking them separately, which would not impact net revenue, and this would show up under the balance sheet item "prepaid expenses and other current assets" (25m15s).
• An analysis of Nvidia's last earnings reports and transcripts did not find any significant information about prepaid expenses and other current assets, and the amount of prepaid expenses and other current assets at Nvidia is relatively small compared to its overall scale (25m34s).
• The amount of prepaid expenses and other current assets at Nvidia has leveled off, indicating deceleration, and it is unlikely that there is enough evidence to suggest that Nvidia is hiding discounts in other places (25m58s).
• Entrepreneurs may tell investors they have a certain amount of revenue and cost of goods, but then discount their product, which can create the appearance of impropriety (26m11s).
• Discounts can occur in various industries, such as car sales, and it is essential to be transparent about pricing to avoid the appearance of impropriety (27m12s).
• The lifespan of Nvidia's H100 is uncertain, and companies like CoreWeave and Neo are receiving loans from private equity firms, which can create a "round-tripping" situation where Nvidia invests in these companies while they buy from Nvidia (28m8s).
• There are concerns about the potential for overcapacity in the market, similar to the fiber era, which could lead to a decrease in demand and a subsequent decrease in prices, such as the 75% decrease in the cost of using an H100 from $8 to $2 per hour (28m49s).
• The potential risks and consequences of over-supply and the appearance of a round tripping issue could lead to a significant and potentially cataclysmic moment (29m20s)

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• NVIDIA is mentioned in the context of a potential partnership or investment, but the details are not specified (29m32s).
• Lemon is a platform that offers on-demand developers to help founders with their software development needs, with a minimum of 3 years of experience and competitive rates (29m52s).
• The concept of "round tripping" is discussed, where a company invests in another company and then receives revenue from that company, potentially creating a conflict of interest (31m0s).
• The example of Microsoft investing in Open AI and Open AI buying cloud credits from Microsoft is used to illustrate the concept of round tripping, with the potential for billions of dollars to be exchanged between the companies (31m54s).
• The scale of the investment and the coordination between the companies are factors in determining whether round tripping is illegal (31m45s).
• A strategy used by an accelerator, where founders would buy each other's software to inflate revenue, is mentioned as an example of round tripping (32m46s).
• Investors can detect round tripping by asking for information on a company's top clients and revenue sources during due diligence (33m18s).
• Startups that have passed the seed and Angel stage may be required to provide due diligence information to investors, including details about their five largest clients by dollar amount and engagement, as well as contracts and payment history, as investors have a fiduciary responsibility to ensure they are not investing in potentially problematic companies (33m28s).
• Due diligence is necessary when investing other people's money, and investors should not be upset if venture capitalists ask for this information, as it helps prevent investments in companies like FTX (34m4s).
• Some founders may try to avoid due diligence by claiming others have already done it, but this is a major red flag, and each investor should conduct their own diligence (34m34s).
• In the case of Microsoft's investment in Open AI, 10% of the investment went back to Microsoft's cloud businesses, which is a relatively small percentage of Microsoft's revenue, but could raise concerns if repeated multiple times (35m2s).
• NVIDIA's investments in multiple companies may lead to investigations or due diligence, and it may be better for the company to invest through a dedicated venture capital firm to avoid conflicts of interest (35m28s).
• The proximity of sales and investment conversations can be a problem, as seen in the AOL round-tripping scandal, where salespeople were incentivized to make deals that benefited both parties, but ultimately led to sanctions and jail time (36m21s).
• Management needs to be aware of potential conflicts of interest and avoid the appearance of impropriety, especially when it comes to sales teams and incentives (37m10s).
• Nvidia's GPU clouds, including CoreWeave and Lambda, are borrowing large sums of money, but Nvidia is not underwriting the debt, which reduces the concern of round-tripping. (37m43s)
• There is a concern about Nvidia investing in smaller companies that then purchase its hardware, but the sums involved may not be significant enough to be a major concern. (37m54s)
• Nvidia's biggest risk is its massive dependence on a few large customers, such as Alphabet, Microsoft, and Amazon, which accounted for 46% of its revenue in the last quarter. (38m33s)
• Xai has built a large GPU supercomputer with 100,000 H100s, and Nvidia is planning to double its capacity. (38m58s)
• Microsoft's Satya Nadella has stated that the company is not waiting for inference demand to show up, and the demand for AI is expected to be the fastest-growing business in the company's history. (39m12s)
• The demand for AI hardware is high, and people are spending a lot to build up capacity, but there may be an overrun, and the margin will eventually come out of these systems. (39m32s)
• The lifespan of Nvidia's H100 chips is uncertain, but it is likely to be around 6-10 years, similar to the lifespan of Google and Facebook servers. (40m22s)
• The underwriting of loans for GPU purchases can be sketchy, especially if the value of the chips drops significantly with the release of new generations. (40m10s)
• The lifespan of GPUs is a significant concern, with the possibility of them becoming obsolete in 6-10 years due to advancements in software efficiency, which is a current focus in maximizing GPU utilization (41m4s).
• Software is becoming more efficient, allowing for more output from each GPU, with some cases showing that only 20-40% of a GPU's capacity is being used when running certain jobs (41m20s).
• Nvidia's handling of shareholder return, buyback schedule, and cash supply appears transparent and copacetic, with no apparent obfuscation or bad smell in their numbers (42m40s).
• A potential conflict of interest exists within Nvidia, where the sales team and management are making decisions on who to invest in while concurrently selling them products, which could lead to round-tripping issues (43m32s).
• To mitigate this conflict, it is suggested that Nvidia's venture arm be run separately with an independent group, allowing for carry and management fees, and taking gains without involving the sales team or management in investment decisions (43m16s).
• Jensen Huang, Nvidia's CEO, is known for being hands-on and having high standards, which could work against the sales team getting into potential round-tripping issues (44m8s).

Amazon's nuclear power deal and regulatory challenges (44m16s)

• The discussion revolves around the importance of energy in achieving advancements in AI, with a focus on nuclear power as a consistent and clean source of energy, especially in countries like China, which are moving quickly to adopt it (44m16s).
• In the United States, there are regulatory bodies and debates around the reopening or building of new nuclear power plants, but there is a growing interest in nuclear power as a way to reduce dependency on foreign oil and have more consistent power (45m11s).
• A recent development in the nuclear power story is the blocking of Amazon's plan to buy energy from a nuclear power plant due to a rare species of bee found on the land, highlighting the challenges of balancing environmental concerns with the need for clean energy (46m43s).
• The issue of the rare bee species has raised questions about whether it's possible to relocate the bees or build a sanctuary for them, and whether the benefits of nuclear power outweigh the environmental costs (47m20s).
• Amazon spent $650 million to buy a data center campus next to the Susquehanna nuclear facility in Pennsylvania, but the plan is now blocked due to an interconnection agreement issue with Talen, the owner of the facility (47m50s).
• The proposal to increase production at the Susquehanna nuclear plant from 300 to 480 megawatts was also affected by the interconnection agreement, highlighting the complexities of the energy infrastructure (48m14s).
• The Federal Energy Regulatory Commission (FERC) voted down a plan to increase energy production from 300 to 480 megawatts, with Republicans opposing the plan and one Democrat voting in favor, which may hinder the development of nuclear energy and data centers. (48m39s)
• The decision is seen as a bad sign for the nuclear industry, particularly for companies like Constellation, which wants to collocate data centers by nuclear facilities and increase production. (49m18s)
• The lack of leadership in explaining the importance of nuclear energy and data centers to local regulatory bodies may cause the US to fall behind in the AI race to countries like China. (49m49s)
• An alternative to nuclear energy could be using solar power and batteries in the desert, but it's unclear if this would be possible or effective. (50m13s)
• Companies like Elon Musk's ventures and EXO Energy, which is working on solar lenses and heat-based storage, are exploring alternative energy solutions. (50m44s)
• The conversation around grid load, interconnection, and technical issues is seen as a hindrance to progress, and it's argued that nuclear energy should be a part of the solution to reduce carbon emissions. (51m12s)
• The potential for big prizes and profits in the AI industry may drive companies like Microsoft, OpenAI, and Google to invest in and advocate for nuclear energy and data centers. (51m50s)
• The United States may lose data center business to Mexico and Canada if it fails to provide favorable conditions, with the possibility of data centers being built near the US-Mexico border and utilizing hydro and nuclear power plants in those locations (52m30s).
• The competition among US states for businesses and residents is a great feature of the country, allowing states like Texas and Florida to compete with New Jersey, New York, and California for the same group of people (53m27s).
• Some states, such as Washington, are considering eliminating state capital gains tax to retain businesses and residents, with the example of Jeff Bezos moving from Seattle to Florida to avoid capital gains tax (53m46s).
• The tax treatment and other factors such as safety, security, education systems, and bodily autonomy can influence people's decisions on where to domicile themselves and their businesses (55m1s).
• Some technology companies are having trouble attracting employees to Texas due to concerns about abortion access, highlighting the importance of considering various factors when deciding where to locate a business (55m21s).
• The idea of the United States expanding to include Canada and Puerto Rico, potentially creating 57 states, is mentioned as a way to maintain competitiveness and retain businesses (56m1s).
• The idea of creating new cities in the United States is proposed, drawing inspiration from China's approach to building new cities, with the possibility of using available land and resources to establish new cities from scratch (56m10s).
• The concept of creating a new state is also discussed, with the possibility of Puerto Rico becoming the 51st state if its residents want to be part of the United States (56m45s).
• The topic of nuclear energy and small modular reactors (SMRs) is touched upon, with SMR startups doing well due to the increasing demand for power (56m58s).
• The progress of Waymo's self-driving car technology is discussed, with the number of driverless rides in California increasing from 12,000 in August 2023 to 312,000 in August 2024 (57m21s).
• Waymo's total miles driven by self-driving cars in California have increased from 1.1 million in June to 1.8 million in August, with the number of miles driven with passengers also increasing from 800,000 to 1.4 million during the same period (57m51s).
• The total number of passengers using Waymo's self-driving cars has increased from 291,000 in June to nearly 500,000 in August, indicating the technology's scalability and growing demand (58m10s).
• The potential impact of self-driving cars on the automotive industry is discussed, with the prediction that young people may not buy cars at the same rate as previous generations, and the possibility of Uber and other companies participating in the self-driving car market (58m43s).
• The idea that owning a car may become less necessary if self-driving car services become widely available and affordable, with wait times under 10 minutes and costs lower than car ownership (59m32s).
• The concept of car ownership is changing, with some people considering owning only one car or using alternative transportation methods like Uber, as the hassle and cost of owning multiple cars may not be worth it (59m55s).
• A family of five may only need three cars, but with the rise of sharing economy and alternative transportation, owning multiple cars may become less necessary (1h0m13s).
• The idea of the sharing economy, where people share resources like cars, lawn mowers, or internet connections, could become more prevalent, reducing waste and environmental impact (1h1m11s).
• However, the sharing economy also raises concerns about the tragedy of the commons, where individual self-interest can lead to the degradation of shared resources (1h3m17s).
• Despite the challenges, the sharing economy has the potential to make resources more accessible and affordable, with the possibility of renting or sharing items like lawn mowers or internet connections (1h1m50s).
• The rise of robotic lawnmowers and other technologies could make sharing resources easier and more efficient, reducing the need for individual ownership (1h2m27s).
• The concept of collaborative consumption and peer-to-peer economy could become more mainstream, changing the way people think about ownership and resource sharing (1h1m40s).