The Black Market for AI GPUs with Steve Burke

In this episode, Ed Zitron is joined by Steve Burke of GamersNexus to talk about the black market for AI GPUs in China - and how Bloomberg suspiciously forced YouTube to take his video down. Premium Newsletter: AI Bubble 2027 - https://www.wheresyoured.at/ai-bubble-2027 GamersNexus: Our Channel Could Be Deleted (GamersNexus) https://youtu.be/tUnRWh4xOCY?si=AD2hyE6z5-ZiyInW Mirror of NVIDIA AI GPU Black Market Story - https://www.youtube.com/watch?v=ZyWelvEP_CQ https://www.youtube.com/gamersnexus https://gamersnexus.net/ https://bsky.app/profile/gamersnexus.bsky.social https://bsky.app/profile/gamersnexus.bsky.social https://x.com/GamersNexus YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. BUY A LIMITED EDITION BETTER OFFLINE CHALLENGE COIN! https://cottonbureau.com/p/XSH74N/challenge-coin/better-offline-challenge-coin#/29269226/gold-metal-1.75in --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/ Discord: chat.wheresyoured.at https://discord.com/invite/QUUQUP9szv Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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• 0:00Speaker 00

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• 1:19Speaker 03

  Call Zone Media.

• 1:22Ed Zitron?

  Hello and welcome to Better Offline. I'm your host, Ed Zitron.

• 1:36Ed Zitron?

  And of course, you can go into the notes for the episode. You can take a look at links from a newsletter. You can go and buy some merch as always. But much more importantly, today I'm joined by the esteemed Steve Burke of Gamers Nexus. Steve, thank you for joining us.

• 1:49Speaker 05

  Thanks for having me.

• 1:51Ed Zitron?

  So you did an incredible video on the black market smuggling of Nvidia's AI GPUs into China. And then there has been a thing that's happened where the video has been pulled down due to a DMCA complaint from Bloomberg. What is happening?

• 2:06Speaker 05

  Yeah, it's so the video, it's really cool video where we went all over China finding these GPUs. As part of that, we included a recap of all the news of export controls where the US controls GPUs that are above a certain performance threshold and the allowance to export those to China by American companies. And so that was the story. We wanted to look into, okay, but they're still getting to China. And so how is that? And as part of that recap, go through all the news, we've got clips of, you know, various politicians. There was a clip of Obama in there. And there was a clip of Trump in there, a couple

• 2:47Speaker 05

  of them, talking about AI or GPU export control bans. Of course, AI, I know Ed is one of your favorite topics.

• 2:56Ed Zitron?

  My faves, yes.

• 2:58Speaker 05

  Yes, me as well. And yeah, so we received a copyright strike from a small, small publication called Bloomberg. Yeah, so that strike took the video offline. And now we are currently challenging it. And so the strike was forced specifically, I believe it was minutes 22 until minute 2315 in the video.

• 3:26Ed Zitron?

  Of Donald Trump speaking, the president of America.

• 3:30Speaker 05

  Correct. Yes.

• 3:31Ed Zitron?

  That is ludicrous. And you went to New York specifically to have a doubt with them, did they? What, where do we stand as we speak? Because this is going out in about a week from now. It's August 28. So who knows what 26 even, don't know what happened next.

• 3:45Speaker 05

  Yeah, if it goes out in about a week, then that'll be pretty close to when we should have an update from YouTube.

• 3:51Ed Zitron?

  Because the video is off right now.

• 3:54Speaker 05

  Correct. The video is gone. And it's very interesting how copyright strikes work because if basically, the way it works is a company files a strike, they decide if there's infringement of some kind, and they file it, YouTube then. Basically, especially for a company Bloomberg's size will automatically approve it. It's then up to the creator to dispute that. The video is offline during this entire process. The any money from the mid, the video is held at least in escrow. And so then you can dispute it if you want. At that stage, YouTube then decides if it's going to accept your dispute. It accepted ours, written by a lawyer, so that makes sense.

• 4:37Speaker 05

  And then they step back and they're like, okay, we're not involved anymore. It's between you guys. And so the party that filed the claimant, so Bloomberg here, has 10 business days to file proof of lawsuits. So they, if they submit to YouTube proof that they are suing us, which thus far as we record this, they have not. Then at that stage, YouTube would keep the video offline and they kind of let the two parties resolve it amongst themselves. If they don't submit any proof of a lawsuit or they don't file a lawsuit and then show YouTube that they've done so. Again, they haven't at this point, then basically in 10 business days, the video goes back up.

• 5:18Speaker 05

  We get fucked over for the 10 days in between and, and then the money in theory should be released back to us, the ad revenue that was made from it, if it follows that course. But the biggest damage that's done is from the loss of momentum in those, you know, total time period, maybe 13 days or so.

• 5:38Ed Zitron?

  But why would Bloomberg do this? Are they really that attached to videos of Donald Trump or is it something else?

• 5:45Speaker 05

  I mean, I, yeah, we talked about this in our video where we flew out to try and speak with them.

• 5:53Speaker 05

  I have a number of theories. We don't know their motive precisely, but yeah, there's a few strange things going on where, first of all, I've noticed that they have not claimed any or struck any that I'm aware of, of the reuploads of the video. So that's interesting because there's hundreds of them. It was just ours that went up initially. Secondly, we have used that clip before and that hasn't been stricken. And so specifically in this black market video and.

• 6:30Speaker 05

  Yeah, the theories we came up with were there's some competing content from Bloomberg, where they attempted to do what we did. It was really a failed attempt. They they tried to find smuggled AI GPUs in China as far as they kind of presented it in data centers. They were unable to do so. They couldn't get any access. They filmed sand in the desert, they go home. There's also

• 6:53Ed Zitron?

  That's all they got?

• 6:54Speaker 05

  Yeah. They drive around in a desert. They point the camera at some buildings that are being constructed. They say, you know, there's AI GPUs in them there hills and then that's about it.

• 7:08Ed Zitron?

  It's kind of funny that you you appear to on your own and with your with your team, obviously, able to get this access that these large legacy media people don't, which it's meant to be the other way around, based on what everyone says. So what is it that makes your approach different to Bloomberg's? Like, why did you get stuff that they didn't? Rather than just the desert?

• 7:32Speaker 05

  Right. Yeah, well, to be fair, we we did not film a desert, so they did have an exclusive there. But I think it comes down to the approach where we looked at it like this is an interesting concept, this idea of black market GPUs. But from my point of view, we approached it as, well, let's just see what are the people involved in this chain? Think and do they think it's a black market? Or do they just think it's a market? And a lot of the people we worked with were just, I think, amused at the concept of being involved in the media process and wanted to see how it works.

• 8:15Speaker 05

  And so I honestly, I think a lot of that access, especially to the people who are just sort of like normal people. They're not these big, you know, executives at some huge corporation. They're they're middlemen and they're people transacting GPUs on the ground. I think for them, if you go into it without this presupposition of some kind of particular, I don't know, leaning or ethics of whether what they're doing is or isn't okay, or whatever.

• 8:46Ed Zitron?

  Or even expecting what you'll find in advance.

• 8:49Speaker 05

  Exactly. Yeah, I think if you go in with an open mind of like, we're just gonna hang out with this guy for a day and just observe his job, people are, you know, they're pretty happy to share that. So.

• 9:00Ed Zitron?

  So, yeah. How did you actually start though? So you you came up with the idea that you wanted to see how illicit GPUs making into China? Did you have contacts in China or Hong Kong and so on that you talked to in advance and they kind of said, oh, if you come here, we can show you this? What was the process?

• 9:19Speaker 05

  Yeah, the process was really cool. We're still kind of learning how to how to iterate on this, but each time we're the big thing we learned this time for this investigation was really just trying to that first contact matters a lot and being able to work with that first person we find to then find their contacts and kind of follow the chain down the line. And so the first guy we found is a professor at the Chinese University of Hong Kong. He buys and uses these high-end GPUs in servers for educational purposes and research

• 9:58Speaker 05

  purposes. And as soon as we made contact with him, we were able to work with someone who, first of all, speaks, you know, native level excellent English. So that certainly helped. And then secondly, who has a lot of local knowledge and contacts. And I think a lot of it is just kind of knowing which, in our case, which link in the chain you need next to make the story make sense. So in his case, he's a user of these GPUs. So next we need is some kind of supplier, you know, and then we need their supplier. Yeah.

• 10:36Ed Zitron?

  So what it's all quite complex. I did watch the video and it was it was what three three hours or so or more even it was really wonderful. And so what exactly are the GPUs that are restricted? Was it just AI GPUs? Was it like consumer level ones as well? What is exactly being handed around?

• 10:56Speaker 05

  It's both. So on the high end side, there's some smuggling and presence of these data center class GPUs. So that'd be things like H100s, Hopper 100s, A100. We actually physically saw several of those and, and things like that. On the consumer side, there aren't as many restricted consumer GPUs, but there are a few. So the RTX 5090 is one of them. That has 32 gigabytes of video memory. So that's very valuable for these use cases. The RTX 4090 actually is another one. And that one's kind of amusing because

• 11:38Ed Zitron?

  And that's a consumer GPU, right?

• 11:40Speaker 05

  Yes, consumer GPU. Yeah. And last gen consumer GPU at that. But it's easily modified to carry double the video memory as the actual official Nvidia spec in the SKU. So they can increase it from 24 to 48 gigabytes of memory, which is extremely valuable for these training and LLM type tasks where it may be a last gen, so it's technically a little bit slower. But if you can fit it in memory, you can still run it. Versus if you can't fit it in memory, the model, you may not be able to run it at all. And so those are the consumer cards.

• 12:21Speaker 05

  The 4090 though is interesting because one of the guys we spoke to, who is effectively a buyer and seller of these banned GPUs. He was asking me on camera, he was seeking confirmation of, well, but is, are you sure the 5090 is banned? Yeah. And I said, yeah, it's, I'm sure here it is on the list. And he was so confused because he said, but they're just all over the market next door. We walk over there and there's dozens of them. So.

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• 15:10Ed Zitron?

  It's so strange as well because it doesn't seem like you basically walked off the plane and had a price sheet from just a guy, like it wasn't clear how you got the price sheet exactly, and perhaps you can't say, but it was just, yeah, these things are banned, other than the fact we have just like guys who sell them literally everywhere.

• 15:28Speaker 05

  Yeah.

• 15:29Ed Zitron?

  And how are they getting in?

• 15:31Speaker 05

  Uh, so there's a couple of ways. The one of the ones that we showed in the video is really interesting. So the very end of the process, we actually, this is one of the reasons we delayed initial publication. We were able to, uh, with help of a viewer, locate someone you could actually classify as a smuggler in the US. So, uh, someone from China in the US. And, uh, he buys GPUs from people in the US. He drives around all over and buys mostly 490s, which are in high demand in China. And then he'll strip those down. So that could be removing the cooler.

• 16:13Speaker 05

  I don't think this particular guy desolder's them. I've heard stories of some people desoldering GPUs and mailing them. That would, that would reduce your shipping cost a lot, increase your margin. But he buys the 490s, ships the boards back. His profit's about $300 US per board before taxes. It wasn't 100% clear if he does or doesn't pay taxes.

• 16:35Speaker 05

  And then at that point, um, once they are either shipped into Hong Kong or Macau, uh, directly if they feel gutsy enough or indirectly through a third country, a middle country where there is no export control. Um, you know, then they arrive and they get redistributed from there. Uh, there's sometimes hand carried as well, like by students, international students who just fly back with a 590 they bought at Best Buy or something, and they can double their money roughly, uh, if they're lucky.

• 17:05Ed Zitron?

  That's so wack. It's wacky that there is such a big black market, but I guess the export bans just created it, as did this whole AI, this crazed AI moment. Did, in fact, while you were over, over in Hong Kong, did you actually go to China? I can't remember. Or was it just in Hong? So did you, this is an anecdotal thing. How was the pressure of AI there? How big was the conversation, the advertisement? Did you see it on the same level? It's fine if you didn't. I'm just curious.

• 17:33Speaker 05

  I saw it more in Taiwan, which we went to as well. So yeah, after the China trip, we went over to Taiwan. And I don't think it made it into the cut, but we shot a short clip of just a bus, like a public bus with a gigantic AI, the laptop advertisement on it. So I would say it's kind of, at least there, it's similar to what you see here where it's, you know, if you're anywhere in the vicinity of a, of a Best Buy or a city that has technology dealers, then you're going to see AI ads. In China, uh, yeah, I saw it in the tech markets for sure, some banners, but

• 18:13Speaker 05

  it's just, it, I don't know, that's, I, I only understand Chinese if I'm actively trying to understand it, you know? So it's, I think a lot of that gets filtered out for me.

• 18:23Ed Zitron?

  Right. Yeah, I was good. Yeah, I assume you speak some, you seem to speak some Chinese. I can't speak anything but English, so I could not correct your Chinese at all.

• 18:31Speaker 05

  You do speak more proper English than I do there, so I'll give you that.

• 18:35Ed Zitron?

  Yeah, I speak all kinds of it these days. It's, it's not going well. People criticize my accent all the time. So as far as how the government sets these limits, one thing he did really eloquently towards the beginning of the video as well, was he kind of went through how arbitrary the limits seem to be and how Nvidia seems very capable of adapting around them to the point that it almost doesn't make sense.

• 18:58Speaker 05

  Yeah. Yeah. They, they've modified the regulations a few times and it's, it's so, this particular part, I don't really blame Nvidia for, for this, which is just trying to, you know, the government sets some regulations and a company says, okay, we'll comply with these and then they comply with them. And then the government kind of says, no, wait, not like that.

• 19:25Ed Zitron?

  Yeah, that's very standard for pretty much all regulation. Like it may be, it's good or bad, what have you, but it's not. It happens all the time with companies.

• 19:35Speaker 05

  Yes, and in this case, one of the things that as the, I guess, AI world developed and the applications, one of the things that changed was this understanding that memory capacity is basically the most important aspect of it. And the initial versions of the formula didn't consider memory in any scenario. From what I remember, it was based on the marketed flops of performance on the spec sheet multiplied against the bit length of the operation or something like that. And they later added memory bandwidth. Memory capacity, though,

• 20:17Speaker 05

  is still, as far as I'm aware, right now, is still not considered in the formula.

• 20:22Ed Zitron?

  Yeah, it feels just arbitrary, but I imagine also it's quite difficult to find a way to do this, especially when the people setting the regulation might not have the best handle on computers.

• 20:34Speaker 05

  Yeah, I think, I think the best way to do this would probably be if they wanted to, and I'm not, I don't have a particular one way or the other, but if they wanted to control it, I think the best way is probably some kind of benchmark or set of benchmarks, just like you would do for a review, where, you know, you say, okay, if it exceeds some performance threshold in this real world use case, or multiple of them in aggregate, then it's export controlled. But instead, they just kind of calculate based on the spec sheet. And the companies that make these things, obviously, you know, full appropriate credit to Nvidia, the company is extremely competent with making GPUs. They know what

• 21:14Speaker 05

  they're doing. And they're going to know a lot more about how to tweak those dials to comply than a government agency will, so.

• 21:26Ed Zitron?

  So, on the subject of Nvidia knowing things, do you think that, do they seem aware of any of this, like any of, any of this smuggling happening? Do they seem to, did you get any comment out of them?

• 21:38Speaker 05

  We asked a lot of the people in the chain what their perception was of Nvidia's awareness. And so the professor at the Chinese University of Hong Kong, he had a great answer when I asked him, do you think Nvidia knows? And he kind of, he paused for a second and then he said, well, how could they not? You know, like these things are very expensive. You've got 30 plus thousand dollar GPUs and it just seems like they would all be tracked. So

• 22:09Ed Zitron?

  What was the term? There was a specific term as well for like, kind of like basically of ignoring him?

• 22:16Speaker 05

  Yeah. So the Chinese is zhan yi jian, be yi jian, which means open one eye, close one eye, or turn a blind eye is the idiom.

• 22:25Ed Zitron?

  Yeah.

• 22:26Speaker 05

  And

• 22:28Ed Zitron?

  That's awesome. It's just very cool.

• 22:30Speaker 05

  Yeah, it's super. I mean, the coolest part about that was multiple people said that exact idiom and it, it's, it's just, it's such a specific choice of words. It'd be the same as if you asked like three people a question, you know, and they all said, oh, they turn a blind eye. At some point you're like, okay, this seems to be a real like consistent belief here. But yeah, I think from Nvidia's standpoint, it's whether or not they want to actually control what gets in, it's hard to say. Certainly from a pure financial standpoint, the more GPUs

• 23:11Speaker 05

  they sell, the more money they make. They probably don't really care who they sell them to as long as they sell them to someone and then where they end up after that. I mean, maybe to the extent that Nvidia doesn't want to piss off the United States government, they, you know, they try to comply as much as they reasonably can. But how much do they actually try to control ingress into a country that's export controlled? It's hard to say, but Certainly, I think they are aware of this happening. I just, I have a really hard time believing that they are unaware their GPUs are making it into China when they shouldn't be.

• 23:47Ed Zitron?

  And I imagine it must be quite hard to stop. Like, I hate to have any sympathy for Nvidia, but it does, it does feel like something that would be kind of a moving target because one thing that was consistent across the whole video was the ingenuity of the people involved. It does make, you see like American entrepreneurs sometimes and they're like, oh yeah, it's tough to, you know, the hours are very tough and you know, I was coding all night. And all of these guys were just like, yeah, I've got a thing in the back of my car full of wires. I've got, I have a whole rig.

• 24:22Speaker 05

  Yeah, it's cra- and that is, I mean, again, you know, from that particular uh, side of things, I, I don't suspect, I mean, look, it's a government regulation and if the government wants to regulate it, it's kind of up to them. Obviously, the companies need to comply with it, but I wouldn't expect a company, even Nvidia, to send in any kind of enforcement. Uh, maybe what they would do is, if they wanted to enforce it, you know, they might identify, okay, this purchaser, uh, there's evidence of this purchaser exporting to China anyway, and so we're just gonna stop selling to them or something, but that's kind of, I think, the most you might expect of them.

• 25:06Speaker 05

  Um, but yeah, as far as the ingenuity, it was pretty crazy. Like, the guy in the US who buys the cars, he, um, he just got a Prius with a massive, like, uh, battery bank in the back, like a UPS with a lithium ion battery in it. He's got a test bench hooked up to it, an ATX test bench, pops the trunk open, he's got a spare license plate in the trunk for some reason, I don't know why.

• 25:29Ed Zitron?

  That's not to ask.

• 25:31Speaker 05

  That's not to ask, yeah, don't need to know. And, uh, yeah, and if you want to sell them your car, you're just some American who found them on Facebook Marketplace. Uh, he, at the time we, we were talking with him, he was paying $2,000 flat. He makes 300 when he sells it and you bring him the card, meet him wherever he tests it. And um, in the back of the, you know, in the trunk of the car, he just runs a benchmark, make sure it's good. And buys it, ships it back or carries it back depending on how secure he feels. And, and then also to your point of ingenuity, the shops that are capable of modifying cards where they're just, they're repair shops.

• 26:12Speaker 05

  And they just happen to be really good at board level, uh, BGA or Balgood Array, device repair or swapping. It's like, pull memory modules, they can add memory modules, swap the GPU between PCBs and they're able to keep silicon in service where, you know, they're just a repair shop. So it's kind of like from their perspective, look, they're not doing anything illegal in China. They're just keeping boards in service. But for people who need these high capacity GPUs for AI tasks and they happen to be export controlled, a shop like this would be capable of taking a card that has died, uh, you know, through, through use, uh, or just needs to be upfit to be better.

• 26:57Speaker 05

  And, and they can do that for pretty cheap and basically in a couple of hours.

• 27:01Ed Zitron?

  And it's not illegal to sell them in China once they're there, right? They've like, that is not a crime, like China is not prosecuting people for any of this.

• 27:11Speaker 05

  Correct. The, it is not illegal to own or sell these GPUs or buy them, uh, in China. It's illegal if you are an American company, if you're Nvidia or you're, um, Best Buy or a partner or whatever, it would be illegal to sell. To export controlled cards to a company or an entity or person in China. But once it's there, yeah, there's no real control over it. The only place that we found that China steps in is if there's some kind of undeclared ingress through port. So like, for example, there were GPUs and GPUs at various points in the last several

• 27:56Speaker 05

  years that were smuggled in with crates of live lobsters or prosthetic baby bombs.

• 28:01Ed Zitron?

  But was that real? Was the lobster thing real?

• 28:03Speaker 05

  The lobster thing was real, despite what Nvidia said.

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• 30:20Ed Zitron?

  Hell yeah. I love the, so what, actually, describe the full lobster situation. I think everyone wants, will want to hear about the lobster.

• 30:28Speaker 05

  Yes. So, uh, the lobster situation, as it were, is, um, uh, basically there was a Hong Kong, uh, port, so customs intercepted a white van, I think it was, there's like a customs post, they post photos of the things that they are able to snipe, um, being brought in improperly. So Hong Kong's a free trade port, uh, but there's still certain declarations you have to make, and sometimes people won't make those. And so there was a van bringing in crates of undeclared live lobsters, uh, driving on, I think it was the Macau or the Duhai Bridge or something. But

• 31:12Speaker 05

  anyway, they got intercepted and alongside the live lobsters were GPUs, and they were older, so they were, I think they were Quadros, but they were brought, all being brought in improperly. And, um, yeah, so customs post the thing, they're like, we found this, you know, and I think that's just kind of like the, here's us doing our job and maybe scare people off or whatever. And then, um, later, and AI startup Anthropic released a statement, uh, talking about how there needed to be more, um, strictly enforced export control in the US. And, uh, they mentioned smuggling of

• 31:53Speaker 05

  GPUs with, uh, with lobsters. Nvidia responded, I don't have their statement in front of me right now, but, uh, it was something along the lines of, it would be better if, uh, American, you know, AI companies would focus on innovation, rather than, the part I do remember was, uh, tell tall tales of, uh, prosthetic baby bump smuggling or, uh, GPUs, sensitive electronics being smuggled with live lobsters. Turns out, that is not a tall tale, that is a thing that happened. So.

• 32:25Ed Zitron?

  Yeah, this is the thing. People say Jensen Huang is cool. If you're cool, you say, yeah, well, our chips are like, we don't like this happening. This is bad. We're doing everything. We can't stop it. But yeah, they're doing James Bond shit to get our GPUs.

• 32:37Speaker 05

  Right.

• 32:37Ed Zitron?

  Like, come on. You could just say that. Like, they do seem a little sensitive and we're recording this the day before their earnings and I got no idea what's gonna happen. No one does. Everyone's a bit, everyone's a bit worried about it. So it's, I think it, the China market is gonna get extremely interesting because they've got the H20 ban, but now the H20 ban has been lifted. And now we're in this weird spot where, I don't know if you've heard anything about this yourself, where there are suggestions that the Chinese government is actively saying not to buy Nvidia GPUs. Have you heard anything about that?

• 33:13Speaker 05

  Yes. So the Chinese government, I believe it's called the Cyberspace, it might be a security agency or something like that. But one of their government agencies put out a statement following a separate statement from a state-owned or at least state, you know, controlled in some capacity media report. Where the statement said, or at least floated the possibility that Nvidia's H20s may have some form of spyware in them. And so the suggestions were tracking or government backdoors. And so that was kind of the accusation.

• 33:54Speaker 05

  Nvidia, of course, posted a statement saying, absolutely not. This is not a thing. And, you know, just to be fair here, there's not currently, as far as we're aware of, any firm evidence of this. But I'm also sure that governments know things about, you know, about products from other nations that we would never know anyway. So who knows? But, but that's where it stood. Nvidia said, we don't have these. China's agency said to companies in China that they should be wary of using H20s. And advised against purchasing them for fear of some kind of backdoor or spyware.

• 34:32Ed Zitron?

  So how realistic would it be for, I actually, did you hear any scuttlebutt around this of switch into Huawei chips or something?

• 34:40Speaker 05

  We did ask, yeah, I think we might have only kept one of those questions in the actual video, but I did ask a lot of people. Huawei, from the users' perspectives, the people we spoke to, they, none of the people we spoke to are using Huawei components right now. So they're getting more powerful, from what I understand. I think there's a few hurdles. One of them is, it's kind of the same reason where

• 35:11Speaker 05

  the companies aren't even really using AMD, and they've been doing this for a while, whereas Huawei is pretty new. And a lot of that comes down to CUDA, where Nvidia is the proprietor of CUDA, which is a library they can use to accelerate tasks, and which a lot of software is written to use. I mean, even just rendering a video.

• 35:33Ed Zitron?

  It's the coding language to get accelerated computing, right?

• 35:37Speaker 05

  Correct, yeah.

• 35:38Ed Zitron?

  Specifically on Nvidia GPUs, though.

• 35:40Speaker 05

  Yes, it specifically works on Nvidia and nothing else. And so AMD would have to use, I don't know, OpenCL or something else, depending, like for video encoding, you'd maybe use OpenCL. But that's the biggest limitation, where a lot of the sort of so-called AI tasks are reliant on CUDA to operate at any reasonable speed. And so until there's a big push to move away from that, it's Nvidia GPUs all the way down, you know, so. And maybe the push is export control, maybe the groups in China that need a higher volume of GPUs than they're able to easily get, eventually say, okay, let's just, let's put all of our resources on

• 36:24Speaker 05

  trying to use OpenCL or use something other, PyTorch or whatever. So that may be the direction it goes.

• 36:32Ed Zitron?

  Yeah, it does actually feel like CUDA is the thing that needs to be broken here. For better or for worse, I'm just saying that there's a lot of talk about, oh, making more powerful chips here and there with AMD or Huawei. But it feels like CUDA really is the thing that they actually need to change. And I guess the probably explaining to the markets what CUDA is is difficult enough. But it feels that if they could move past CUDA, that would be the actual thing that we're doing.

• 36:57Speaker 05

  Yeah, it's kind of like the x86 situation where you're getting off of x86.

• 37:03Ed Zitron?

  And just for the listeners, what do you mean by that?

• 37:07Speaker 05

  Yeah, so your average computer is very likely an x86 computer, which is a specific microarchitecture that has to do with how software runs and interacts with the hardware and the other software on the system. And so it's kind of like a prerequisite for you might have an application that requires Windows to be compatible. And this is another one of those types of foundational prerequisites. Okay, x86 as opposed to, for example, ARM. And ARM laptops made kind of a splash a while ago because they were trying to basically assert that, hey, look, we can run stuff that typically would only run on an old x86 microarchitecture. And now we can run it on ARM.

• 37:53Speaker 05

  And so that is something where Intel and AMD, although mostly Intel, have a vested interest in keeping everything on x86. And likewise, Nvidia has an interest in keeping things on CUDA. From an end user standpoint, there are benefits to this where CUDA, for me, for rendering a video, it just works better than something else.

• 38:17Ed Zitron?

  Right.

• 38:18Speaker 05

  Right. And so it's kind of, it is a chicken or the egg problem where it's kind of like, well, okay. You know, on one hand, You don't want a company to develop a monopoly only because there's some kind of anti-competitive practice that's keeping them in place. On the other hand, you don't want to punish a company either for inventing something that's just better. And the problem we run into with software is the developers need to choose what to support. And a lot of times, they choose Nvidia and maybe not something else, because if you have limited resources, you're going to go with what 90% of the market has. It's kind of self fulfilling. You know, it's a feedback loop, basically. So to expand it to something like Huawei, they would have to break that CUDA. I don't know if you want to call it a mote or something

• 39:03Speaker 05

  like that, but or a walled garden, I guess, either one of those, or a walled garden with a mote around it. But they would have to break that down to to really become more viable and increase their performance.

• 39:15Ed Zitron?

  So before we go, did you catch any Blackwell out there or any signs that Blackwell would even make it out there?

• 39:21Speaker 05

  Yeah. So in addition to the 5090s, which are Blackwell, as far as like the high end server stuff, we did work with, we so there's two companies we worked with here. One of them, we physically visited in Taiwan. And there was another one we were talking to in Singapore. And what we learned is that there is some intermediary basically pass throughs that can happen through, for example, a Taiwanese testing agency where a Chinese company might ask them to purchase Blackwell servers or high end hopper servers and bring them into Taiwan under their company, perform testing or pre testing on them, assembly,

• 40:06Speaker 05

  whatever, packaging, whether it's a facade or not, basically, the stated purpose is make sure it all works. And then, once it does, forward that shipment to their customer, the Taiwanese company's customer in China. And so that would allow them to potentially get into China. And so in that situation, yeah, we were shown a room filled with, for example, GB or Grace Blackwell servers that were being tested and prepped.

• 40:34Ed Zitron?

  Yeah, well, I'm gonna, I think we should wrap it there, Steve. So, the status of the video right now as we record this is it's offline, but by the time this goes live, you know, in September the 3rd, it will go up. Hopefully, it's back on. Where can people support you?

• 40:49Speaker 05

  Gamers Nexus, just the YouTube channel is the best place to go. And yeah, hopefully, it's back up within, should be within a couple of days of you posting this, unless Bloomberg submits, files a lawsuit. In which case, they'll hear about, yeah, everyone will hear about it.

• 41:08Ed Zitron?

  Oh, and they'll hear about it from me as well. This is utter bullshit, what Bloomberg is doing. It's ridiculous. But you have been listening to Better Offline. I'm Ed Zitron. Steve, thank you so much for joining us. And yeah, we're gonna do something in a couple of months as well. But always a pleasure to have you, man.

• 41:22Speaker 05

  Thank you.

• 41:23Ed Zitron?

  Right. Thanks so much.

• 41:33Ed Zitron?

  Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Osowski. You can check out more of his music and audio projects at mattosowski.com. M-A-T-T-O-S-O-W-S-K-I dot com. You can email me at [email protected] or visit betteroffline.com to find more podcast links and of course, my newsletter. I also really recommend you go to chat dot wheresyoured dot at to visit the Discord and go to r slash betteroffline to check out our Reddit. Thank you so much for listening.

• 42:06Speaker 03

  Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

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