EVERY SPOKEN WORD
25 min read · 5,092 words- 0:00 – 1:02
Intro
- DGDavid George
Are we in an AI bubble?
- GBGavin Baker
Uh, I do not believe we're in an AI bubble today. I was, depending on how you look at it, the privilege or the misfortune of being a tech investor during the year 2000 bubble, which was really a telecom bubble, and I think it's really helpful to compare and contrast today to the year 2000. The year 2000 internet bubble, or telecom bubble, was defined by something called dark fiber. At the peak, 97% of the fiber that had been laid was dark. Contrast that with today. There are no dark GPUs.
- SPSpeaker
[upbeat music] And that brings us to our opening fireside chat. We're gonna start with a taboo question right out of the gate. Are you ready for it?
- DGDavid George
Yeah.
- SPSpeaker
If AI... [laughs] I love it. If AI is the biggest trend in the world right now, where is the evidence for it? Why is it only just beginning to show up in the economy? And as Andrej Karpathy asked, are agents really just ghosts? To kick this off and to help us answer this question, please join us in welcoming Gavin Baker, managing partner and CIO of Atreides.
- 1:02 – 2:41
Are We in an AI Bubble? Setting the Stage with Data
- SPSpeaker
Now, some of you may know Gavin as that really thoughtful guy on Twitter. Anytime some big piece of AI news comes out, I know more than a few people who count on Gavin to explain what the F is really going on. So a huge thank you to Gavin for being with us today. Joining him is our very own David George, general partner at a16z. [applause] [upbeat music]
- GBGavin Baker
[laughs] Who knows what that music was from?
- DGDavid George
Glad they got our pump-up music right.
- GBGavin Baker
Yes. Battlestar Galactica, the original 1977 one, in case we have to all fight Cylons in a few years.
- DGDavid George
It's, it's, uh... Yeah, good, good segue into the topic, I guess. Um, so thank you for being here. I always love talking to you.
- GBGavin Baker
Same. Um, really grateful to you for inviting me, grateful to your colleagues for having me here. I'm really looking forward to the next, uh, two days. I think I'm gonna learn a lot, so thank you.
- DGDavid George
Yeah. Okay. All right. So the big topic is AI bubble, kind of macro view of things. Um, so maybe just to start with a couple stats to set the stage, and then I want to get your take on, on where we're at. So we have about a trillion dollars of data centers in the US. The plan is to add three to four trillion dollars in the next five years. Over the past three years, we have already built out, in data center capacity, a larger amount of dollars than the entire US interstate highway system, which took 40 years,
- 2:41 – 5:07
Lessons from 2000: Dark Fiber vs. “No Dark GPUs”
- DGDavid George
just in terms of dollars, and that's inflation adjusted. OpenAI alone, I think, has more than a trillion dollars of deals set up that they've committed to, and we can talk about that. Um, but at the same time... So those are all, like, big numbers on infrastructure, and they're scary, and they say, "Oh, bubble." And Google, uh, released a stat recently that they have seen a 150X increase in the amount of tokens processed in the last 17 months. So on the one hand, you've got this crazy, scary-sounding build-out. On the other hand, you actually have a bunch of usage that's happening. So are we in an AI bubble?
- GBGavin Baker
Uh, I do not believe we're in an AI bubble today. Uh, I was, um... I had, depending on how you look at it, the privilege or the misfortune of being a tech investor during the, um, the year 2000 bubble, which was really a telecom bubble, and I think it's really helpful to compare and contrast today to the year 2000. Um, you know, first, I think, uh, Cisco peaked at 150 or 180 times trailing earnings. Nvidia's at more like 40 times. So valuations are very differently. Very different. Most important, however, is that the year 2000 internet bubble, or telecom bubble, was defined by something called dark fiber. Um, and if you're a veteran of, of the year 2000, you'll know what that was. But dark fiber was literally fiber that was laid down in the ground and not lit up. Fiber is useless unless you have the optics and switches and routers, uh, that you need on either side. Um, yeah, so I vividly remember, you know, companies like Level 3 or Global Crossing or WorldCom would come in and they'd say, "We laid 200,000 miles of dark fiber this quarter. This is so amazing. The internet's gonna be so big. Um, you know, we can't wait to light these up." At the peak of the bubble, 97% of the fiber that had been laid in America was dark. Contrast that with today. There are no dark GPUs. All you have to do is read any technical paper, and the, one of the biggest problems in a training run is that GPUs are melting. And there's a very simple way to kind of cut to the heart of all of this. It is the return on invested capital of the biggest spenders on GPUs, who are all public. And those companies, since they ramped up CapEx, have seen, call it a
- 5:07 – 6:42
ROI on AI: Why This Time Is Different
- GBGavin Baker
10-point increase in their ROICs. So thus far, the ROI on all the spending has been really positive. It's a really... It's an interesting and open debate about whether or not it will continue to be positive with the quantum of spend we're gonna have on Blackwell. I personally think it will. But there's no debate that thus far the ROI on AI has been really positive, and valuation-wise, we're just not in a bubble.
- DGDavid George
I couldn't agree more. The other thing that I would say is you can contrast the actual adoption and usage of the technology from then, right? The internet was actually really hard because it-- you had to build a two-sided network. Like, you had to build websites, and then you had to get users, and it's much more difficult. In the case of the AI tools, you know, all you have to do is kind of light them up via API or, you know, turn on your website ChatGPT, and everybody has access to them, right?
- GBGavin Baker
Yeah.
- DGDavid George
Built on top of cloud computing, on top of the internet, uh, and, you know, you can get to instant distribution, a billion people right away.
- GBGavin Baker
Absolutely.
- DGDavid George
So, uh, the other thing is the counterparties, so you mentioned this, they happen to be the best companies in the history of the world, right? I think collectively the people who are coming out of pocket, they're writing checks, uh, for this CapEx, I think they collectively generate like three hundred billion dollars of free cash flow a year. Is that right? Some directionally.
- GBGavin Baker
Round numbers.
- DGDavid George
Yeah. And they have five hundred billion dollars of cash on the balance sheet. So whenever people are like, "Oh my God, it's a bubble, is it gonna pop?" I'm like, "I think it's kinda fine." I mean, you know, it costs like forty or fifty billion dollars to light up one gigawatt.
- GBGavin Baker
Yeah. If you're... On-
- DGDavid George
Full stack
- GBGavin Baker
... Nvidia
- 6:42 – 8:36
Nvidia, Google, and the Race to Win AI Infrastructure
- GBGavin Baker
chips, fifty billion.
- DGDavid George
On Nvidia chips.
- GBGavin Baker
Yeah.
- DGDavid George
Yeah. So-
- GBGavin Baker
Yeah
- DGDavid George
... you know, there's kind of like an eight hundred billion dollar buffer growing three hundred billion dollars every year.
- GBGavin Baker
Yeah. I'll... I mean, um, free cash flow at some of them has begun-
- DGDavid George
[laughs]
- GBGavin Baker
... to maybe, uh, you know- [laughs]
- DGDavid George
Well, this is... This goes to your point on return on invested capital.
- GBGavin Baker
Yes. It might-
- DGDavid George
We should see that next year
- GBGavin Baker
... creep down a little bit.
- DGDavid George
Yes.
- GBGavin Baker
Yeah.
- DGDavid George
A little bit of a mismatch at the b- at the build-out. But, you know, it's j- you know, Larry Page apparently internally said, "I'm happy to go bankrupt rather than lose this race." And I think that is the mentality for sure at Google and perhaps Meta. Um, it's just seen as existential, and you have to win. Okay. So, uh, lots has been written about these round-tripping deals. So give me the... 'Cause it, you know, round tripping is a very scary concept from, you know, the internet build-out, that was a big problem.
- GBGavin Baker
Oh, a hundred percent.
- DGDavid George
What do you make of it here?
- GBGavin Baker
It is objectively happening. Um, you know, money is fungible, so Nvidia, if they sign a deal with OpenAI, they can say, "Hey, you can't use our money to buy our chips," but money is fungible. But it's happening at a very small scale. [both laughing] Yes. Yeah. And I think, um-
- DGDavid George
I know this is like a crypto or blockchain-
- GBGavin Baker
Yeah. Exactly
- DGDavid George
...
- 10:58 – 12:22
Google’s TPU Advantage and the Four Leading Labs
- GBGavin Baker
All of the big, um, you know, today's biggest tech companies have all of those in spades. So as long as they execute
- 12:22 – 13:46
The Application Layer: It’s Still Early
- GBGavin Baker
well, hire good people, um, and have a sound strategy, like I think you could see it be a sustaining innovation for a lot of members of the Mag Seven. On the other hand, I do think it's existential, and if you don't execute, you know, IBM might be a, might be a good fate.
- DGDavid George
Yeah. Yeah. [chuckles]
- GBGavin Baker
Yeah.
- DGDavid George
Yeah. That's, uh, that's tough. Uh, yeah, data distribution, compute, dollars, talent-
- GBGavin Baker
Yeah
- DGDavid George
... and like-
- GBGavin Baker
They have every right to win.
- DGDavid George
Yeah, they have every right to win, and it seems now more than before they're taking it quite seriously.
- GBGavin Baker
Yeah.
- DGDavid George
Google. Maybe Google in particular, but-
- GBGavin Baker
Oh, no, no
- DGDavid George
... and obviously Meta, Meta's making the dramatic moves they're making too.
- GBGavin Baker
No, to me, ChatGPT was [clears throat] Pearl Harbor for Google, and we're gonna see how they responded, and they're slowly starting to respond.
- DGDavid George
Yeah. And then what do you think... What's your forecast for, uh, that sort of inf- the platform piece of their business, the infrastructure piece? What do you think... How do you think it shakes out in terms of, like, business model, market structure? So do you think they end up as high margin businesses like the clouds or like aircraft manufacturers, or do you think they end up very competitive and low margin businesses like airlines?
- GBGavin Baker
Um, I don't think they'll be airlines, [clears throat] but you can, anybody can just look at the P&L, you know, of a SaaS company circa two thousand twenty-one and two thousand twenty-two, and you see, you know, 80, 90%
- 13:46 – 15:24
Big Tech’s “Right to Win” and the Execution Gap
- GBGavin Baker
gross margins. And the nature of AI, because of scaling laws, Richard Sutton's The Better- The Bitter Lesson, um, they're just more compute intensive, so their gross margins are structurally going to be lower, but that doesn't mean they can't be great businesses. I just... I think it's gonna be a long time before we see a truly kind of, you know, an AI lab, a frontier lab with gross margins anywhere near SaaS or internet era margins. Now, their Opex can be a lot lower, um, and, you know, maybe that's how you square it, but just the gross margins are fundamentally different, and until scaling laws change and the importance of test time compute and things like that ch- change, which I don't see happening, they're, they are gonna be lower margin.
- DGDavid George
Yeah. Okay, so let's talk about, uh, application layer. So y- you just, you just kinda got into it a little bit with the SaaS businesses, and, uh, I don't know if you've waded into this fight on Twitter, but it's sorta, you know, the, the, like, you know, every few months it comes up and it's like SaaS is terrible and it's dead and, you know, it's all gonna go away. And then, you know, with, uh, Andre's, uh, [clears throat] Dwarkesh interview he just did, it's, you know, like the market's reacting positively to it and it's like a whipsaw reaction. So what do you think happens with SaaS and software?
- GBGavin Baker
You know, I think I've, you know, first said probably in early '24 that I thought all of application SaaS might be a zero, different than in, than, um, infrastructure SaaS. I, I would say I have a more nuanced view now, and I think there could
- 15:24 – 17:18
Margins, Scaling Laws, and the Business Model Shift
- GBGavin Baker
be some really big application SaaS winners, especially if you serve like a more fragmented SMB customer base. Um, you know, Google is making it really easy if you're a customer of theirs to use your data and essentially make any SaaS app you want, and then your data isn't shared with anyone else. Um, but the critical mistake that I think a lot of retailers made, um, in dealing with Amazon is they looked at Amazon's margins and they said, "We don't want to be in that business." And that was obviously a terrible mistake, and here we are twenty-five years later and, you know, Amazon has really healthy, uh, retail margins. And I worry that application SaaS companies are trying to preserve their existing gross margin structures because they believe that if their gross margins go down, um, their stocks will go down. It is definitionally impossible, given what we just discussed, to succeed in AI without gross margin pressure, and I do not know why they have concerns, because we have an existence proof that a software company can deal well with declining margins in Microsoft and Adobe to the whole AI thing came along. You know, it used to be that companies were scared to go from on-premise to the cloud 'cause margins were lower. Cloud margins are, are, are lower. They're still good. And Microsoft, they transitioned, you know, from, you know, on-premise perpetual licenses with maintenance, uh, to a cloud model, and it was a pretty good stock for ten years. So I don't... If you're an application SaaS company, like, uh, what I would just say is don't be scared and look at declining gro- gross margins kind of as a mark of success rather than, you know, a badge of shame or something to be feared.
- DGDavid George
It's actually so funny you say that because whenever we have these discussions about companies, y- basically every company that comes to present to us is like, "We're an AI company." And, um,
- 17:18 – 19:44
Why Lower Gross Margins Mean Real AI Usage
- DGDavid George
we always look at their gross margins, and it's become like a badge of honor for them to actually have low gross margins.
- GBGavin Baker
Oh shit.
- DGDavid George
Kind of like, "Oh my God, people are actually using your AI stuff."
- GBGavin Baker
Yeah.
- DGDavid George
But if you show up and you're like, "I'm an AI company," and it's like, "I got eighty-two percent gross margins," you're like, "I don't think anybody's really using it." Uh-
- GBGavin Baker
You are not.
- DGDavid George
So yeah, [chuckles] it's, uh, it's interesting. Yeah, if you're, if you're one of these public companies, would you rather have like ten bucks of revenue with ninety percent gross margins or fifty bucks of revenue with sixty percent gross margins?
- GBGavin Baker
Not hard.
- DGDavid George
Like it's not that com- yeah, not that complicated.
- GBGavin Baker
Yeah.
- DGDavid George
But it's hard to do in the public market.
- GBGavin Baker
It's hard to do in public, but if you communicate it, you draw parallels to the cloud transition, I mean, I'm an investor and I would be excited about it, [chuckles] you know?
- DGDavid George
Yeah.
- GBGavin Baker
And I don't think I'm alone in the world. And then the big advantage these legacy application SaaS companies have is they do have these really profitable existing businesses, and so you can run your new AI products at break even. Um, and, you know, catch up to the leaders, et cetera, et cetera. And I'm just surprised more people have not done that. Like, why are none of the public coding companies even trying to compete with Cursor?And the reality is, cursor now, they have a trillion dol- trillion tokens, and, you know, there, there will be a point where they have enough coding tokens that it's tough to catch them. But I think today, if you're a public coding company and you said, "I'm gonna lean in, I'm gonna run it break even, I have an existing business, I'm gonna attach it to everything," hey, you have a chance, and, you know, the prize is clearly really big. I see Martin is skeptical.
- DGDavid George
Martin, Martin Shkreli said-
- GBGavin Baker
I said a-
- DGDavid George
... you have a chance.
- GBGavin Baker
I said a chance.
- DGDavid George
So it's like-
- GBGavin Baker
I said a chance.
- DGDavid George
It's like a Dumb and Dumber, "You're telling me there's a chance," not like a real chance.
- GBGavin Baker
[laughs] Yeah. You're telling me there's a chance.
- DGDavid George
You're telling me there's a chance.
- GBGavin Baker
So yes, exactly. [laughs]
- DGDavid George
[laughs] It's like a... Yeah, exactly.
- GBGavin Baker
Yeah.
- DGDavid George
I totally agree. Yeah, we actually saw-- I mean, you know, we see it, uh, you know, we may... If we, if we, uh, you know, Figma, for example, like when they went out, they are extremely high gross margin, and they're like, "Hey, we're gonna, you know, pretty aggressively distribute our AI tools, and our gross margins are gonna go down." And, you know, investors asked a few clarifying questions, and then they were like, "Oh, that actually would be a good thing."
- GBGavin Baker
Yeah.
- DGDavid George
And so I'm surprised more people in the public markets aren't doing it.
- GBGavin Baker
It worked out okay for them.
- 19:44 – 21:12
SaaS, Software, and the Cloud Transition Analogy
- DGDavid George
uh, with, uh, with AI. Although I tried the browser today and I tried to do some pretty basic shopping stuff and it's, you know, still, still some work to do. But I think it will get there. So what do you actually think happens with the sort of market structure of the consumer internet companies? Do they get subsumed into a component of a chatbot interface, or do you think it's something else?
- GBGavin Baker
Um, so one, humility, hard to say. Two, I would just say, I think, um, the AI companies that have launched these AI browsers may come to regret it 'cause there's something called Chrome that has-
- DGDavid George
[laughs]
- GBGavin Baker
... whatever it is, five billion users, and if you're Google, um, you know, you can just go look at what happened with Google Buzz. You know, they are very cautious. You know, there's, you know, they're currently in, in litigation with the government. Um, and they could easily do this and probably do it even better, but they didn't wanna be first. So now you have two AI native companies with their own browsers, let them run for three to six months, get a little head start, and then, "Wow! Here we are. We had to do this," and-
- DGDavid George
[laughs]
- GBGavin Baker
... I don't know how that's gonna work. Um, [laughs] maybe for the companies other than Google who don't own Chrome. Um... [clears throat]
- DGDavid George
[laughs]
- GBGavin Baker
Yeah.
- DGDavid George
I guess data and distribution's pretty powerful in that sense.
- GBGavin Baker
Yeah. Hindsight's 2020. Um, and the one thing I would say is
- 21:12 – 23:26
Consumer AI, Browsers, and the Battle for Distribution
- GBGavin Baker
I do think it's tough to bet against the companies with large existing user bases today. Um, a-a-and I also think reasoning has fundamentally changed the economics of these frontier models. You know, pre-reasoning, um, I often said if you are a frontier model without access to unique, valuable data and internet scale distribution, you're the fastest depreciating asset in history. I think reasoning really changed that because the way RL works during post-training, having a big user base now kind of unlocks that flywheel that was at the center of every great consumer internet company, where, um, you have a good product, you get a lot of users, the users make the algorithm better, um, the algorithm makes the product better, and it just spins. And that... It's not quite spinning yet in AI, but you can squint and see it. And so I think that fundamentally changes the economics for Anthropic, for xAI, um, for OpenAI. Um, but I mean, Mark Zuckerberg's trying hard.
- DGDavid George
Yeah.
- GBGavin Baker
We'll see.
- DGDavid George
Yeah.
- GBGavin Baker
Yeah.
- DGDavid George
Yeah. A lot of smart people in there know.
- GBGavin Baker
Yeah, for sure. I, I think the worry is, and I think this is another interesting thing, is if you don't... Like, in a strange way, the Chinese open source model ecosystem is a godsend to any American company that's trying to catch those four leading labs. Because the problem is, if you don't have Gemini 2.5 Pro, or a later checkpoint of it, or a later checkpoint of Grok that we don't see, or a later GPT Checkmate, uh, checkpoint, training the next model, you're at a big disadvantage. Oh, by the way, one thing I just want to say that drives me crazy is all these people who say that GPT-5 is the end of scaling laws. GPT-5 is a smaller model.
- DGDavid George
[laughs]
- GBGavin Baker
It was not designed to be better. It was designed to be more economical for OpenAI and Microsoft to run. It... Any reference b- to GPT-5 and scaling laws is crazy. Um, yeah. Sorry. Rant, rant over.
- DGDavid George
We got the pedestal up here if you want.
- GBGavin Baker
Yeah, [laughs] exactly.
- DGDavid George
Shaking your hand.
- GBGavin Baker
Yes.
- DGDavid George
[laughs] It'd be good.
- GBGavin Baker
Yeah.
- DGDavid George
That'd be good.
- 23:26 – 25:02
Reasoning Models and the Data Flywheel Effect
- DGDavid George
Uh, do you wanna talk about chips?
- GBGavin Baker
Sure.
- DGDavid George
So okay, I know you love Nvidia. Talk about, you know, your view of Nvidia, AMD, TPUs, ASICs, and how do you think sort of market structure shakes out there, you know, competitive advantage that the various players have.
- GBGavin Baker
Yeah. Um, I think it goes... I think it is really, um, it's a fight between Nvidia and, um, the Google TPU. And then something that I don't think is broadly appreciated is the extent to which Broadcom and AMD are effectively going to market together. Nvidia is no longer just a, a semiconductor company, as I'm sure you'll hear from Jensen tomorrow. You know, not... It was a semiconductor company, then a software company with CUDA, now a systems company with these rack level solutions, and now arguably, you know, a data center level, uh, company with the, you know, level of architecting they're doing with scale up, scale across, and, um-Scale out, scale across networking. Um, [clears throat] so the networking, the fabric, the software, it's all important. And what Broadcom is saying to companies like Meta is, "Hey, we will build you a fabric that can theoretically compete with Nvidia's fabric," which is a mixture of NVLink and either InfiniBand or Ethernet. Um, but we'll build it on Ethernet. It's gonna be an op-open standard, and hey, we'll, we'll make you your version of, of TPU, which by the way, took Google three generations to get working. And you know what? If your ASIC isn't good, you can just plug AMD right in. Um, but I, I personally believe most
- 25:02 – 27:18
Chips, TPUs, and Broadcom’s Bet Against Nvidia
- GBGavin Baker
of those ASICs are gonna fail, um, particularly if it's-
- DGDavid George
In the fullness of ti-- like, over a period of time, or in fullness of time?
- GBGavin Baker
In the next three years.
- DGDavid George
Yeah.
- GBGavin Baker
I think you'll see a bunch of high-profile, um, ASIC programs canceled, especially if Google, um, starts selling TPUs externally, which has been all over X. And they, you know, they, you know, who knows exactly how that would work, 'cause if you're Anthropic, you know, it's just rumored Anthropic wants to buy tens of billions of TPUs. If you're Anthropic, maybe you don't want Google seeing your secret sauce, but there's ways around that. So I think this is really a battle between Google and its TPU, enabled by Broadcom for now, and Google can take the TPU away from Broadcom whenever they want.
- DGDavid George
Yeah.
- GBGavin Baker
Now, they can't do the Ethernet networking that Broadcom is, is doing, uh, but they control the TPU. Um, so it's really Google and the TPU versus, um, Nvidia, you know, with, with, you know, Amazon. Like, that's a very talented team, arguably the most talented silicon team at any hyperscaler, the Annapurna team. Like, I think the Trainium3 will probably be a much better chip than the Trainium2. It took Google three generations to get the TPU right. Um, and then AMD will, you know, will always be kind of the second source, and you need a second source.
- DGDavid George
All right. Exciting. Uh, what do you think happens... Okay, so I wanna go back, um, to business models. So one of the big things that is widely discussed is, like, you know, source of disruption, and most of the CEOs in this room are CEOs of startups who are trying to go beat some incumbent or find, you know, some new market opportunity. And the most ripe opportunities tend to come when you have a big platform shift that is also accompanied with a business model shift. Um, and so there are a couple of areas where I can see it, I feel like in an obvious way. So, you know, we're investors in Decagon, customer support. Like, you can pretty easily see a business model that is priced on the resolution of a task because it's so measurable. Um, you can see, you know, like in coding, like a lot of the business model has now shifted to consumption and, you know, obviously, especially for developer-facing things, like that's comfortable, um, and pretty well known. What about the rest of the industry? 'Cause I feel like there's sort of this hand
- 27:18 – 29:41
The Future of Business Models: Paying for Outcomes
- DGDavid George
wave thing that is going on, which is like, "We're gonna go get all of services." But it's like, okay, so how do you actually go do that? It's gonna be pretty hard. So do you have any prediction on how that plays out?
- GBGavin Baker
Well, I think what you're seeing in customer service, which is kind of like an easy first example, um, we have a lot of textual data. The LLMs are good at text. You can kind of, you know, probably really easily run some RL to make sure that they, you know, get a good verified reward, you know, verified reward being a happy customer-
- DGDavid George
Yeah
- GBGavin Baker
... or first call resolution or whatever it is. Um, and but I do think you will see that played out. Like humans, we're fundamentally played for out- paid, paid based on outcomes, and a lot of AI will be augmenting humans, but probably also replacing some humans, and that will involve being paid, um, paid for outcomes. You know, going back to the consumer business model, you know, everybody's talking about affiliate fees, and for sure, I'm gonna have, you know, my own AI. It will be a version of Groq, um, 'cause we're both ex-AI shareholders.
- DGDavid George
[laughs]
- GBGavin Baker
It will be a version of Groq that knows me, and it likes me. Um, and you know, when I, when I wanna, you know, the next time I wanna go on vacation, it will know the hotels that I like to go to, and it'll say, "Hey, three hotels. I have Gavin, you know, I have Gavin coming. Who's got the best price and the best room?" Um-
- DGDavid George
It's gonna massively upgrade the gifts that you give to Becky.
- GBGavin Baker
[laughs] Yes.
- DGDavid George
In case she's-
- GBGavin Baker
Yes, Becky, Becky's in the audience. She really appreciated your Dumb and Dumber reference, I'll have you know.
- DGDavid George
[laughs]
- GBGavin Baker
Um, but, um, yeah, and then there will probably be some sort of affiliate fee. And again, that's just being paid for an outcome and kind of closing that loop, which will be probably a little bit of a business model degradation because the great-- Why, why did Google never start a marketplace? Because people overvalue systematically their ability, once they've acquired a customer through Google, to keep it as an organic customer. So they systematically overpay, and they continue doing that. That's why Google never went to outcomes or a marketplace, because advertising leads to the advertisers systematically overpaying. So that inefficiency will be squeezed out. But yeah, it will go to outcomes, and you know, I think Elon tweeted today that, you know, work would become optional. You know, like instead of buying your vegetables, um, you know, at a, at a supermarket, you can grow your own garden if you want.
- 29:41 – 31:44
Robotics, Humanoids, and Elon’s Optimus Vision
- GBGavin Baker
Now, who knows how long it takes us to get there, but I, I... That doesn't sound wildly implausible to me for how powerful this technology is. And I was just struck, Karpathy, you know, whatever, two days ago, you know, is being painted as like a skeptic for saying AGI is 10 years away. Are you kidding?
- DGDavid George
[laughs] Insane. 10 years?
- GBGavin Baker
Yeah.
- DGDavid George
That's wild.
- GBGavin Baker
Yeah, sign me up.
- DGDavid George
Most likely-
- GBGavin Baker
Well, we're of shorter timelines. Please.
- DGDavid George
Yeah, well, so [laughs] no, that's awesome. While we're on the topic of, like, very exciting futuristic things, robotics.
- GBGavin Baker
Oh-
- DGDavid George
Do you have a view on-
- GBGavin Baker
Yeah, very real, and it's gonna be Tesla versus the Chinese in the same way it's Tesla versus the Chinese in, in, uh, cars.
- DGDavid George
Electric cars, yeah. Yeah.
- GBGavin Baker
I would just say cars, not electric cars.
- DGDavid George
Yeah, cars.
- GBGavin Baker
Yeah.
- DGDavid George
Do you have a sense of timeline?
- GBGavin Baker
I mean, you can, you can all watch the Optimus videos. Um, every roboticist I know is extremely impressed. Um, you know, there's, there's a giant debate, is it gonna be humanoids or not humanoids? I think that debate is over because humanoids can kind of learn, you know, from watching YouTube videos, and then it's easier for a human being, um, you know, to put on a suit and show the robot how to do it. I mean, it's kind of crazy to watch the video of all, you know, the 50 Optimus robots doing 50 different tasks, and then it's very simple, you know? Did you, did you put the glass in the dishwasher correctly or not?
- DGDavid George
This is so fun, Gavin. I, I always love chatting with you. Uh, let's give a hand to Gavin.
- GBGavin Baker
Thank you, David. Thank you.
- DGDavid George
All right. Next up, we have a very exciting panel on building out real-world infrastructure. Uh, but first, give us a few minutes. We gotta do a quick, uh, sta- uh, stage change here. So thank you.
- GBGavin Baker
Thanks, everybody. [clears throat] [upbeat music] [laughs] Thank you, man. [upbeat music]
Episode duration: 31:52
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