Austin Vernon - Energy Superabundance, Starship Missiles, & Finding Alpha

Austin Vernon is an engineer working on a new method for carbon capture, and he has one of the most interesting blogs http://austinvernon.site on the internet, where he writes about engineering, software, economics, and investing. We discuss how energy superabundance will change the world, how Starship can be turned into a kinetic weapon, why nuclear is overrated, blockchains, batteries, flying cars, finding alpha, & much more! Watch on YouTube https://youtu.be/YSgfu7XprIM. Listen on Apple Podcasts https://apple.co/3D5OJZe, Spotify https://open.spotify.com/episode/2Z8jmHgLNP9sBrRqQeKXY0?si=U2Mk1hkvRCqPuugKdH2s0g, or any other podcast platform. Read the full transcript here https://www.dwarkeshpatel.com/p/austin-vernon. Follow Austin on Twitter https://twitter.com/Vernon3Austin. Follow me on Twitter https://twitter.com/dwarkesh_sp for updates on future episodes. Timestamps (0:00:00) - Intro (0:01:53) - Starship as a Weapon (0:19:24) - Software Productivity (0:41:40) - Car Manufacturing (0:57:39) - Carbon Capture (1:16:53) - Energy Superabundance (1:25:09) - Storage for Cheap Energy (1:31:25) - Travel in Future (1:33:27) - Future Cities (1:39:58) - Flying Cars (1:43:26) - Carbon Shortage (1:48:03) - Nuclear (2:12:44) - Solar (2:14:44) - Alpha & Efficient Markets (2:22:51) - Conclusion This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.dwarkesh.com https://www.dwarkesh.com?utm_medium=podcast&utm_campaign=CTA_1

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dwarkesh Patel?

  Okay, today I have the pleasure of interviewing Austin Vernon, who writes about engineering, software, economics, investing on the internet. But not that much else is known about him. So Austin, do you want to give us a bit about your background? I know that the only thing the internet knows about you is this one little JPEG that you had to upload with your recent paper. But what about an identity reveal? Or I guess a little bit of background reveal to the extent that you're willing to, comfortable sharing?

• 0:29Speaker 01

  My degree is chemical engineering and I'm kind of like a lifelong love of engineering. And also things like Toyota production system and stuff like that. And I've worked as a chemical engineer like in a large processing facility. I've done a lot of petroleum engineering. Let's see, then now, you know, I taught myself how to write software. And now I'm working on kind of like more research, early commercialization of CO2 electrolysis.

• 0:59Dwarkesh Patel?

  Okay, yeah, so I'm really interested in talking about all those things. But so I guess the first question I have is Alex Berger, who is the co-CEO of Open Philanthropy. He asked this question when I asked on Twitter what I should ask you. And he suggested I should ask you, why so shady? So you have, I mean, famously, you have kind of like a anonymous personality, pseudonymous thing you have on the internet. What's up with that?

• 1:24Speaker 01

  Yeah, yeah, I think he posted a tweet that said, you know, like, I don't know who this guy is or like if he's credible at all. But, you know, his stuff sure is interesting. And that really made me laugh. I thought it was hilarious. And it just doesn't seem necessary. I think I'm fine with my ideas being well-known and communicating, but I have less desire to be like personally famous, so.

• 1:51Dwarkesh Patel?

  I gotcha, I gotcha. I wanted to start off with a sexy topic. So let's talk about using Starship as a kinetic weapon. I thought that was like one of the more amusing posts you wrote. Do you want to talk more about how this would be possible?

• 2:07Speaker 01

  Well, I think the main thing with Starship is like it's, you know, you're taking a technology and you're making it about 100 times cheaper for cargo and 1,000 times cheaper for people. So when things like that happen that drastically, you're just like looking at huge changes and it's really hard to anticipate what some of those can be and the change is that drastic. So I think there's like a lot of moon-based, Mars-based stuff that, you know, doesn't really catch the regular public's eye. And I think they also have trouble imagining some of the like point-to-point travel that could be possible. But as far as like, you know, you start talking about it like as a weapon and I think that's,

• 2:53Speaker 01

  you know, it lets people know they should be paying attention to this technology. And we certainly do not want to be second or third getting it. And we should make sure that we're going to be first.

• 3:05Dwarkesh Patel?

  Yeah, I think you mentioned this in the post, but so as recently in the 90s, the cost of sending one kilogram to space was around 20,000. More recently SpaceX has brought it to 2,000. And then there's like a lot of interesting questions you can ask when you ask, what will be possible once we get it down to $200 per kilogram to send into orbit? Yeah, so one of them might be to manufacture these weapons that are not conventional ballistics. But do you want to talk about like why this might be an advancement over conventional ballistic weapons?

• 3:37Speaker 01

  Well, regular conventional ballistic weapons are extremely expensive. You know, this is more like a bomb truck, you know, but it's even like usually we think of like B-52 as the bomb truck and this could be even, you know, cheaper than the B-52 delivering just like mass on target. When you think about like how expensive it is to fly a B-52 from like Barksdale, New Zealand, all the way across the world. You can do it from South Texas or Florida with the Starship and get, you know, more missions per day and the fuel. Ends up being like when you go orbital, it takes a lot to get to orbit, but then once you're in orbit,

• 4:17Speaker 01

  your fuel consumption is pretty good. So over long distances, it has a lot of advantage. It's why the point to point works for like the longer distances. There's really like a sweet spot with these weapons where you want it to be like pretty accurate, but you also want it to be cheap. Like you're seeing that problem with like Russia right now is they have some like, you know, fancy parade style weapons that are really expensive, like multi-billion dollar cruise missiles. But they're missing like that, you know, $5,000 guided artillery shell or like that, you know, like $20,000 JDM that you can just like pit massive or the, you know, the multiple launch rocket system guided rockets.

• 4:58Speaker 01

  I really like short on all those because I think they had just had like a limited amount of chips they could get from the US into Russia to make these advanced weapons. But yeah, so the kind of a starship gives you just like a platform to deliver like you could, you know, pit JDAMs in a shroud or you could just like, you know, have the iron unguided kinetic projectiles. And it just becomes impossible for, you know, a ship to launch missiles to intercept yours if your cost, if your cost is so low, you can just overwhelm them.

• 5:29Dwarkesh Patel?

  All right. There are a few terms there that neither I nor the audience might know. So what is, what is JDM? What is shroud? And why are chips a bottleneck here? Like, why can't it just be a microcontroller?

• 5:42Speaker 01

  So JDAM is joint direct attack munition. So what we did is we took all like our Vietnam surplus bombs. We put this like a little like fin kit on it and it costs like 20,000 bucks, which is cheap for a weapon because it, you know, the actual bomb costs like, I don't know, 3,000 bucks. And then you, it turns, you know, it is into a guided weapon that before you're, you were probably lucky to get within 500 meters of a target. Now you can get it in with like two meters. So the number of missions you have to do with your planes and all that goes down by like orders of magnitude. So it's absolutely like huge advantage in logistics and, and just how much firepower you can put on a target.

• 6:26Speaker 01

  And the uh, and you know, like, we didn't even have to make new bombs. We just put these kits on all our old bombs. Let's see, then the chips are a problem. There's like this organization called Rusi. I think they're in, in the UK. But they've been tearing down like all these Russian weapons they found in Ukraine and they all have American chips in them. So, you know, technically we're supposed to like, they're not supposed to be able to get these chips. And you know, Russia can't make a lot of its own chips. And especially not the specialized kinds you might want for guided weapons. So they've been somehow smuggling in chips from, from Americans to make their advanced weapons.

• 7:03Dwarkesh Patel?

  What is special about these? I would assume that like, uh, they haven't like, as far as I'm aware, the trade with China is still going on, right? And we get a lot of our chips manufactured from Taiwan or China. So why can't they do the same?

• 7:14Speaker 01

  It's the whole like integration, like, you know, it's not just like a specific chip, but like the, the board, it's like, they're more like PLCs. Where um, where you're like, why almost have like wired in um, programming and stuff like that. And they come with like, just like the, to be able to do the guidance and all that stuff. It all kind of has to work together. I think that's the way I understand it. I don't know. Maybe I don't have a really good answer for that one. But they're hard to replicate is what matters.

• 7:43Dwarkesh Patel?

  Okay, that's interesting. Um, yeah, and I guess that has a lot of interesting downstream effects because uh, for example, India buys a lot of its weaponry from Russia, right? So if, if Russia doesn't have access to these, then other countries that buy from Russia won't have access to these either. You had an interesting speculation in the post where you suggested that you could just keep these kinetic weapons in orbit, like a sort of Damocles, really. Uh, almost literally. Yeah, that sounds like a really uh, scary and risky scenario where, I don't know, you could have orbital decay. And you can have these kinetic weapons falling from the sky and destroying cities. Uh, do you think this is what it will look like in, or could look like in 10 to 20 years?

• 8:26Speaker 01

  Well, yeah, so the, the advantage of having on orbit is you can hit targets faster. So. You know, if you're launching the rocket from Florida, you're looking at like maybe 30 minutes to get, get there. So, you know, target moves in that time. Whereas if you're on orbit, you can have them spaced out to where you're hitting, you know, within like a few minutes. Um. So that's the advantage there. When you actually look at like the. You really have to have like a two-stage system, I think, for most. Because if you have like a really aerodynamic rod that's going to give you good performance in the low atmosphere, it'll get going too fast and just like burn up before you get there. You know, tungsten's maybe the only thing that you could have that could go all the way through.

• 9:12Speaker 01

  That's why I like the original concept, use these big tungsten like rods the size of like a telephone pole.

• 9:18Speaker 01

  But you know tungsten's pretty expensive and like just the rod concept, it kind of limits to what you can do.

• 9:26Speaker 01

  If you just do the rods. So a lot of these weapons will have like, that's what I was talking about like with the shroud, like something that actually slows you down in the upper atmosphere. And then once you're to the velocity where you're not just going to melt, then you open it up and let it go. So if you actually had it, you know, fall from the sky, some may make it to the ground, but a lot would burn up. So the, a lot of stuff that makes it to the ground is actually pretty light, you know, it's like stuff that can kind of like float. It has a large surface area.

• 9:57Speaker 01

  Yeah, so that's like the whole thing with Starship, like there, or not Starship, but Starlink. All those satellites are meant to completely, you know, fall apart on de-orbit.

• 10:09Dwarkesh Patel?

  I see. Like, one of the implications of that is that these may be less powerful than we might fear because if, like, if kinetic energy is mass times, you know, a velocity squared, then you have to, if there's an upper bound on the velocity and then the velocity is the component that grows the kinetic energy faster, then it suggests that you can upper bound the power these things will have. You know what I mean?

• 10:32Speaker 01

  Yeah, so, so even the tungsten rod, sometimes people like, you know, they're not good at physics or something, so they don't like do the math. They think it's going to be like a nuclear weapon, but it's really, I think even the tungsten rod, I might have put it in there. I think if I'm remembering correctly, like 10 tons of TNT or something. It's like a big, a big bomb, but it's not.

• 10:52Speaker 01

  You know, it's not like a super weapon. So that's, I think I said in the post, it really has like, it's like advanced missiles where they're almost more defensive weapons. So I can keep you from hitting your ship somewhere, you know, and like, yeah, I could like try to bombard your cities, but I can't, I can't take ground with it, you know, I can't even like police sea lanes with it really. I'd still have to have regular ships, you know, if I had this air cover essentially to, you know, go like, enforce the rules of the sea and board freighters and stuff like that.

• 11:23Dwarkesh Patel?

  Yeah. So you speculated in the post, I think that you could have like potentially these, you could like load this up with shrapnel and then it could like explode next to an incoming missile or an incoming aircraft. Yeah. Could these get that accurate? Cause that was surprising speculation to me.

• 11:42Speaker 01

  Uh, yeah, I think like for ships, I think it's pretty, you know, like I was like watching videos of, you know, how fast a ship can turn and stuff. Cause you'd wanna like release your shrapnel. You know, if you're gonna like do an initial target on a ship to like try to kill their radars and stuff. You'd wanna do it above the ceiling of their missiles. So it's like, how much are they gonna move between your release where you stop steering and, and that, and it's really, you know, it's like maybe like a thousand feet. So that's pretty simple. You just like shrapnel the area. The aircraft you would be steering all the way in. So it's maybe actually,

• 12:19Speaker 01

  I'd say it's doable, but it'd be pretty hard. Yeah. And you'd actually maybe wanna even go slower than you would with the ship. Attack, you know, you need like a specialized package to do the aircraft. But you can see these aircraft on, like if you have enough synthetic aperture radar and stuff like that, you can see them with satellites and then guided in the whole way. You could even like say load like heat seeking missiles into a package that, you know, stop, you know, unfurls right next to them and launch conventional missiles to probably. And that's it. That'd be pretty hard to do some of this stuff, but it's just like, kind of, you know, the things you might be able to do if you put some effort into it.

• 12:57Dwarkesh Patel?

  Yeah, the reason I find this kind of speculation really interesting is because when you look at the modern weaponry that's used in conflicts, it often seems like it just seems like directly descended from something you would have seen in World War II or something. It doesn't seem,

• 13:15Dwarkesh Patel?

  like, if you think about like how much warfare changed between like 1900 and 1940, it's like, yeah, they're not even the same class of weapons anymore. So it's interesting to think about possibilities like these where the entire, the entire category of weapons has changed.

• 13:32Speaker 01

  All right. And that's because, you know, the same thing, like, you know, our physical technology hasn't changed that much. So it's, it really has just made more sense to like, put better electronics in the same tanks we have than to build it like, you're just not going to get, we haven't learned enough about tanks to build like a new physical tank that's way better. So we just keep upgrading our existing tanks with better electronics. So they're, they're, they're much more powerful. They're more accurate. You know, a lot of times they have longer range weapons. They have better sensors. So the tank looks the same, but you know, it may be as like several times more like killing power, what have you. But, you know, you, the Ukraine war right now, kind of, you know, they're using a lot of like,

• 14:15Speaker 01

  40, 50 year old weapons. So that especially looks like that.

• 14:20Dwarkesh Patel?

  Yeah, yeah. Which, which kind of worries you if you think about the stockpiles our own military has. I'm not well educated on the topic, but I imagine that we don't have the newest of the new thing, right? Like, we'll probably have maintained versions of decades old technology.

• 14:34Speaker 01

  You know, I mean, we spend so much, we've got relatively, this kind of gets into like, there's a lot of debate about like how ready our military is. And for certain situations, it's more ready than others. I'd say in general, most people talking about have the incentive to

• 14:53Speaker 01

  downplay our capabilities because they want more defense spending or

• 14:58Speaker 01

  just there's lots of reasons. So I think we're probably more, more capable than, than what you might see from like, you know, some editorial in the Hill or whatever. And I think just like us just sending a few weapons over to Ukraine and how successful they've been using them, I think shows a little bit of that. But There's so much uncertainty when it comes to fighting, you know, especially when you're talking about like a naval engagement, whether we just don't have that many ships in general. You can have some bad luck. So I think, I think, you know, you always want to be a little bit wary, you know, don't want to get overconfident.

• 15:37Dwarkesh Patel?

  Yeah. And if, like, if, if the offensive tech we sent to Ukraine is potentially better than the defensive tech, like, it's very possible that even a ballistic missile that China or Russia could launch could sink like a battleship and then kill 2,000, you know, a thousand or whatever soldiers that are on board. Or I guess, I don't know, you think this opens up avenues for defensive tech as well, or?

• 16:03Speaker 01

  Yeah, I mean, generally, the consensus is that defensive technology has improved much more recently than offensive technology. And there's so China, this whole like strategy China has, they call,

• 16:18Speaker 01

  it's like area denial,

• 16:21Speaker 01

  anti-access area denial, A2AD.

• 16:26Speaker 01

  And so that's basically just like missiles have gotten better because the sensors on missiles have gotten better. So they can keep our ships from getting close to them. But, you know, they can't really challenge us like in Hawaii or something. And it really goes both ways. I think people forget that. So, yeah, it's like hard for us to get close to China, but, you know, Taiwan has a lot of missiles with these new sensors as well. So I think it's probably tougher for China to get close to Taiwan than than most people would, would say.

• 16:55Dwarkesh Patel?

  Oh, interesting. Yeah. Can you talk more about that? Because every time I read about this, people are saying that if China wanted to, they could knock out Taiwan's defenses in a short amount of time and take it over. But yes, can you talk about why that's not possible?

• 17:10Speaker 01

  Well, it might be, but I think it's a guess of the uncertainty thing. But Taiwan, you know, has actually one of the largest defense budgets in the world. And they've recently been upping it. I think they spend like, I don't know, 25 billion a year and they added like an extra 5 billion. They've been buying a lot of anti-ship missiles, a lot of air defense missiles, stuff that like, you know, Ukraine could only dream of. I think Ukraine's military budget was like 2 billion. They have, you know, professional army.

• 17:37Speaker 01

  They're gearing, and then the other thing is they're an island. So, you know, like Russia could just like roll over the land border into Ukraine. But, you know, I mean, almost, there's just very few successful amphibious landings in history. Like some of the recent, most recent ones were all, you know, the Americans and World War II in Korea. So like the challenge there is, is just, you know, it's kind of on China to like execute perfectly and do that. And so if they like had perfect execution, then possibly, but, you know, if like maybe their air defenses on their ships aren't quite as good as we think they could possibly be, then, you know, they could also end up with half their fleet underwater within, you know, 10 hours.

• 18:19Dwarkesh Patel?

  Hmm, interesting. And how has your view of Taiwan's defensive capabilities, how, like, how has the Ukraine conflict updated? Your opinion of what might happen?

• 18:29Speaker 01

  I didn't really know how much about it. And then, you know, I like started looking at like Wikipedia and stuff and like all this stuff they're doing. And so, you know, the Taiwan just has like a lot of modern platforms, like F-16s with our anti-ship missiles. They actually have a lot of their own. They have indigenous fighter bombers, indigenous anti-ship missiles, because, you know, they're worried we might not always sell them to them. They've even recently gotten these long-range cruise missiles that could possibly target leadership in Beijing. So I think that makes it uncomfortable for, you know, the Chinese leadership. Like if you attack them, you're going to have to go live in a bunker.

• 19:09Speaker 01

  So there, there's lots of like, you know, but again, there's, I'm not like the full-time military analyst or something. So there's a lot of uncertainty around, around what I'm saying. It's not, it's not a given that China's just going to roll over them.

• 19:22Dwarkesh Patel?

  Yeah, that's comforting to hear. Let, let's, let's talk about an area where I, I, I have a little bit of a point of contact. I, I thought your blog post about software and the inability of it to increase productivity numbers. I thought that was super fascinating. So before I ask you questions about it, do you wanna, do you, do you want to lay out the thesis there?

• 19:43Speaker 01

  Yeah, so the uh, yeah, if there's one post I kinda like felt like I caught lightning in a bottle on is that one. It really like everything I wanted to put in it just like fit together perfectly, uh, which is usually not the case. But yeah, I thi- I think the idea is the world's so complex and we really underestimate that complexity. And if you're going to like digitize processes and automate them and stuff, you have to capture all that complexity basically at the bit level. And that's extremely difficult. And then you also have like diminishing returns where like the easily, you know, automatable stuff goes first and then it's like increasing corner cases to get to the end. So you just have to write like more and more code basically.

• 20:29Speaker 01

  And so that's why we don't see like runaway productivity growth from software is because we're fighting, you know, all this increasing complexity.

• 20:39Dwarkesh Patel?

  Yeah, have you have you heard of the waterbed theory of complexity, by the way?

• 20:42Speaker 01

  Uh, I don't think so.

• 20:44Dwarkesh Patel?

  Okay, it's it's uh, it's something that comes up in compiler design, but the idea is that there's like a fixed amount of complexity um in a system. And if you try to reduce it, uh, what you'll end up doing is just you'll end up migrating the complexity elsewhere, right? So I think an example that's used of this is is when they try to program languages that are uh, uh, not type safe, something like Python. You can say, oh, like it's a less complex language, but really you've added complexity when but when, I don't know, two different types of numbers are interacting. Uh, like a like a float and an int, right? You've added complexity there uh, that, I mean, as your program grows, that complexity exponentially grows. Uh, of all the things that could go wrong when you're making two things interact that are

• 21:27Dwarkesh Patel?

  in a way that you you were expecting not to. So yeah, the the idea is um, you you ha- you can you can just choose where to have your complexity, but you can't get rid of that complexity.

• 21:38Speaker 01

  Yeah, yeah, yeah, it's, I think there's like this, there's kind of like an interesting thing when you start pairing it with management theory and like how it kind of. Starts tying into some of my other posts is that for a long time, when you add up like all the factors, the most complex thing we're doing is, is you know, high volume car manufacturing. And so we got a lot of innovations and organization from car manufacturers, like the assembly line. Then you had Sloan at GM, basically, you know, creating the way the modern corporation is run. Then you have Toyota production system. But arguably now, creating software is actually the most complex thing we do.

• 22:19Speaker 01

  So there's like all these kind of like squishy concepts that underlie like Toyota production system that software has had to learn and like reimagine and adopt. And you know, you see that with like Agile where we just can't have long release times. We need to be like releasing every day, which is like, you know, we're limiting inventory there. Or, um, yeah, there's just, there's like a whole thing, especially that's showing up in software that existed in car manufacturing where you're talking about, you know, reducing communication. So like Jeff Bezos, kind of like now famously said, you know, I want to reduce communication, which is counterintuitive to a lot of people.

• 23:00Speaker 01

  This is like age old in car manufacturing where you have like Toyota has these cards that go between workstations and they tell you what to do. So people normally think of them as limiting inventory, but it also tells the worker exactly what they're supposed to be doing, at what pace, at what time, and the assembly line is like that too. You just like know what to do because you're standing there and there's a part here and it needs to go on there. And it comes by at like the pace you're supposed to work at.

• 23:29Speaker 01

  And there's, it's like so extreme that there's this, I think it's a famous paper, but it's by like List, Seiverson and Levitt. And they went to a car factory and like, you know, studied how like the defects propagated in cars and stuff. And once like a car factory gets up and running, like it doesn't matter if you, what workers you put in there, like if workers are sick or you get new workers, like the defect rate is the same. So like everything is just like, all the knowledge is built into the manufacturing line. And there's like, These concepts around like idiot proofing and everything like that that are very similar to like what you'll see you at Uncle Bob on there.

• 24:09Speaker 01

  So Uncle Bob, you know, says like only put one input into a function and stuff like that because you'll mix them up otherwise. So it's kind of like this, the Japanese call it like poke yoke. It's like you, you make it where you, you can't mess it up. And that's another way to like reduce communication and then software, of course, you have API. So I'm really interested in this. Overall concept of like reducing communication and reducing how much cooperation and like. And everything we need to run the economy.

• 24:41Dwarkesh Patel?

  Right, right. They, speaking of the Toyota Production System, like one thing they do to reduce that defect rate is if there's a problem. All I, all the workers in that chain are forced to go to the place where the defect or problem is. And fix it before doing anything else. And I guess the idea there is. This will give them context to understand what the problem was, how to make sure it doesn't happen again. And also prevent a buildup of inventory in a way that like keeps making these defects happen. Or it just keeps, keeps accumulating inventory before the place that can fix a defects is able to take care of them.

• 25:17Speaker 01

  Right. Yeah, yeah, exactly.

• 25:19Dwarkesh Patel?

  Yeah. But you know, I, I think one interesting thing about software and complexity is, I think you said a little bit earlier that. Software is a place where complexity is the highest in the world right now. And one of the interesting things is, yes, that's true, but you, I guess software gives you the choice to interface with the complexity you want to interface with. And I guess that's just part of specialization in general. But you could say like, for example, a machine learning model is like really complex. But ideally you get to a place where that's the only kind of complexity you have to deal with. You're not having to deal with the complexity of like, how is, how is this program compiled? Like, well, how, you know, like, how are the libraries that I'm using? How are they built?

• 26:00Dwarkesh Patel?

  You can, you can like fine tune and work on the complexity you need to work on. It's similar with like app development, right? Bernhard Hobart has this blog post about Stripe as solid state. I forget the exact title of the blog post, but the basic idea is that Stripe hides all the complexity of the financial system. It charges a higher fee, but you can just kind of treat it as an abstraction of a tithe you have to pay. And it'll just take care of that entire process and you can focus on your comparative advantage.

• 26:29Speaker 01

  Yeah, and it's it's really actually very similar in like car manufacturing and Toyota production system. If you really get into it, it's it's very much the same conceptual framework. Also, there's like this whole idea, like in Toyota projection system, everywhere, everyone works at the same pace, which you kind of talked about. But also like your content, your work content is the same, like there's, there's, there's no room for not standardizing like a way you're going to do things. So everyone like gets together and they're like, all right, we're going to this certain part, we're going to put it together this certain way at this little micro station. And it's going to be the same way every time. And that's part of like how they're, you know, reducing the defect rates. And then if you,

• 27:12Speaker 01

  you know, like if your assembly product is too long, like it's longer than what your like time allotment is to stay in touch with the rest of the process, then you just keep breaking it down into smaller pieces. And so, you know, each, each person only has to know like a very small part of it. And even the, you know, even like the, the overall engineering team, you know, has all sorts of strategies like this too. There's all they have all sorts of like tools to like help them break up all these processes into very like small parts and to make it all like hold together. Still very, very hard, but um, it's kind of like a lot of the same ideas.

• 27:53Speaker 01

  As you're taking away like the complexity of making like a thirty thousand dollar car or thirty thousand part car. Where everyone's just focusing on their one, their one little part and they don't care how, what someone else is doing.

• 28:06Dwarkesh Patel?

  Yeah, but the uh, uh, but the interesting thing also there is it seemed like there, you need one person who knows how everything fits together. Because one of the, uh, uh, from what I remember, one of the tenants of the Toyota production system was you need to have a global view. So I mean, in that book, um, was it the machine or the other one, the Toyota production system book? But anyways, they were talking about examples where people would try to optimize for local efficiencies. I think they, they especially pointed to like Ford and GM for trying to do this, where they would try to make machines run all the time. And locally, you could say that, oh, this machine or oh, this process is super. Efficient, you know, it's always outputting stuff. But it ignores how that that added inventory or that process had a bad consequence for the whole system.

• 28:50Dwarkesh Patel?

  And it's interesting if you look at a company like Tesla that is able to do this really well. The interesting thing is that Tesla is run like a monarchy. And this one guy has this like total global view of how the entire process is supposed to run. Where do you have these inefficiencies? You have some great examples of this in the blog post. But yeah, I think one of the examples that I think was it the Toyota Production System book? But anyways, this guy goes to this factory and the author and he asks, is this like an efficient factory? And the guy's like, yeah, this is totally efficient. There's nothing we can do adopting the Toyota way to make this more efficient. And so then he's like, okay, let me look. And he finds that in one of the, they're like treating steel in some way, but it's only, it should only take a couple of seconds.

• 29:32Dwarkesh Patel?

  And the main process does only take a couple of seconds, but some local manager decided that it would be more efficient to ship their parts out to get the, get the next stage of the process done somewhere else. And so this is like locally cheaper, but the result is that it takes weeks to get these parts shipped out and get them back. And so that means that the actual time that the parts spend getting processed is like 0.1% of the time, which makes the whole process, the whole super inefficient, right? So I don't know, it seems like the implication is you need, you need like a very like monarchical structure with like one person who has a total view in order to run such a system? Or am I getting that wrong?

• 30:12Speaker 01

  Not necessarily. I mean, you do have to like make sure you're not optimizing locally, but I think it's the same. You know, you have that same constraint in software, but I think a lot of times people are just like running over it because processing has been getting so much cheaper. You know, and like people are expensive. So like, if you could save development time, you know, it just ends up, you know, the, the trade offs are different when you're talking about like the tyranny of like physical items and stuff like that.

• 30:43Speaker 01

  You know, you get the constraints get a little more severe. But I think you had like the same, the same overall, you know, you still have to fight local optimization, but the level you have to is probably different with physical goods. I was thinking about like the, the smart grid situation from like a software perspective. And like there's this problem where like, okay, I'm pitying my solar farm here and it's impacting somewhere far away. And that's in like creating these like really high upgrade costs, you know, that costs two or three times more than my solar farm. Well, you know, the, the obvious thing would be if you're doing software is like, you're like going to break all these up into smaller sections.

• 31:23Speaker 01

  And then you wouldn't be impacting each other and all that. And you could, you could work and focus on your own little thing. But the problem with that is if you're going to like disconnect these areas of the grid. So the equipment to do that is extremely expensive, you know, like it's not like I'm just like going to hit a new tab and open a new file and, and start writing a new function. And not only that, but you still have to like actually coordinate how these, this equipment is going to operate. So if you just like let the grid flow as it does, everyone knows what's going to happen because they could just calculate the physics. So if you start adding in all these checkpoints where humans are doing stuff, then you have to like actually interface with the humans. And, and the, the amount of things that can happen really starts going up.

• 32:08Speaker 01

  And so it's actually a, a really bad idea to, to try to part all this stuff off just because of like the reality of the, the physical laws and the equipment you need and everything like that.

• 32:22Dwarkesh Patel?

  All right. Interesting. And then I think you have a similar sort of like co-seen argument in your software post about why vertically integrating software is, is beneficial. Do you want to explain that thesis?

• 32:34Speaker 01

  Yeah. And I think it's just like you know, it actually gets to what we're talking about here where it allows you to, to avoid like the local optimization. Because you know, a lot of times right, you're trying to build like a software MVP. You're like tying together like a few services. They don't do quite what you need. So if you like try to scale that like it would just break.

• 32:55Speaker 01

  But if you're like gonna take a really complex process like car manufacturing or distribution, retail distribution, or you know, like the home buying process or something. You really have to vertically integrate it to be able to create like a decent end to end experience.

• 33:15Speaker 01

  And avoid that, that you know, local optimization.

• 33:20Speaker 01

  And you know, it's just very hard otherwise. Cause there's no, you, you just can't coordinate effectively. If you have like 10 different vendors trying to do all the same thing, you end up in like just constantly like vendor meetings where you're like trying to decide what the specs are or something instead of giving someone the authority or giving a team the authority to just go start building stuff. And then if you look at these companies, like they have to implement these decentralized, somewhat decentralized processes when they get too complex. But at least they have like control over how they're interfacing with each other, you know, like Walmart. As vendors control their own stock, you know, they don't like tell the vendor, we need X parts.

• 34:03Speaker 01

  It's just like, it's on you to make sure your shelf is stocked.

• 34:07Dwarkesh Patel?

  Yeah, yeah. So I, what was really interesting to me about this part of the post was, I don't know, I guess I had this vision of, or I had heard of this vision of where software is heading where everybody will have a software as a service company and they'll all be interfacing with each other. And some sort of cycle where they're all just calling each other's APIs. And, and that like, yeah, but basically everybody and their mother would have a SaaS company. And it's, the implication here was from your argument was the, given the necessity of integrating all this complexity vertically in a coherent way. Then the winners in software should end up being a few big companies, right? That compete with each other, but still.

• 34:49Speaker 01

  I think that's especially true when you're like talking about like you're combining bits and atoms.

• 34:56Speaker 01

  You know, maybe less true for like pure software. The physical world is just so much more complex and so the constraints it creates are pretty extreme. You know, compared to like, you could maybe get away with more of like everyone, their mom having an API and like a pure, pure software world.

• 35:14Dwarkesh Patel?

  Right. Yeah. Yeah, I guess you might think that in the other kind of world, even in the physical world, given that people really need to focus on their comparative advantage, they would just try to outsource the software parts to these APIs. But is there any scenario where the learning curve for people who are not in the firm can be fast enough that they can keep up with the complexity? Because you know, there's huge gains for specialization and competition that go away if this is the world we're forced to live in. And then I guess we have a lot of counter examples, or I guess we have a lot of examples of what you're talking about, like Apple is, you know, the highest, most, the biggest market cap in the world, right? And famously, they're super vertically integrated.

• 35:58Dwarkesh Patel?

  And yeah, obviously their thing is combining hardware and software, but yeah, is there any world in which you can keep that kind of benefit, but have it be within multiple firms?

• 36:10Speaker 01

  This is like a post I've got on my list I want to write, the blockchain application I'm actually like, you know, which excites me personally the most is reimagining enterprise software.

• 36:23Speaker 01

  Because like the things you're talking about, like hard typing and like APIs, it's just like basically built in to some of these protocols.

• 36:33Speaker 01

  So I think it just really has a lot of exciting implications for how much you can decentralize software development.

• 36:42Speaker 01

  And you can, but you know, the thing is you can still do that within the firm. So I think, I think I mentioned this as like, you know, if the government's going to place like, like all these like rules on the edge of the firm, like it makes transactions with other firms expensive.

• 36:59Speaker 01

  So if you, internal transactions can be cheaper because they're avoiding like the government, you know, reporting and taxes and all that kind of stuff. So I think you'd have to think about how these technologies can reduce transaction costs overall and decentralize that. But also, what are the costs in between firms?

• 37:22Dwarkesh Patel?

  Yeah, it's really interesting if there are, if the costs are logistic, or if they're, if they're based on the knowledge that is housed, as you were talking about, you know, within, within the factory or something. Because if it is just, you know, logistical and stuff, it's just like you had to report any outside transactions, then yeah, that does imply that a technology like blockchain could help. But if it's just that, yeah, you need to be in the same office. And if you're not, then you're going to have a hard time keeping up with what then you require or the API are. Then maybe it's that, yeah, maybe the inevitability is that you'll have these big firms that are able to vertically integrate.

• 37:59Speaker 01

  Yeah, like for these big firms to survive, they have to be like somewhat decentralized within them. So I think you have, you're, you're going to the same place. It's just like, what, what does it like, you know, what's our friend? Like, how are we viewing it? What's our perception, you know? So even if it's like a giant corporation, it's going to have like very independent business units.

• 38:22Speaker 01

  As opposed to, you know, something like, you know, a 1950s corporation.

• 38:29Dwarkesh Patel?

  Yeah, Bern-Hobart, by the way, has this really interesting post that you might enjoy reading while you're writing that post.

• 38:35Dwarkesh Patel?

  It's like type safe communications. And it's about that Bezos thing about how, yeah, his, his strict style for how to communicate and how little to communicate. There, there's many examples in Amazon protocols where you have to, the only way you can like put in this report is in this place, you had to give a number. You can't just say this is very likely. You had to say like, well, we, we project X percent increase or whatever. So it has to be percent or, and you know, there's many other cases where there's, they're strict about like what type definition you can have something have in the, in written reports or something. And it has a kind of the same consequence that type strict languages have, which is that you can keep track of what the value is

• 39:17Dwarkesh Patel?

  through the entire chain of the, the flow of control. So.

• 39:22Speaker 01

  You've got to keep work content standardized.

• 39:26Dwarkesh Patel?

  So we've been hinting at the Coaseian, the Coaseian analysis to this. I think we just talked about it indirectly. But yeah, for the people who might not know, the, yeah, so the Coase has this paper called the theory of firms. And he's trying to explain why is the case that we have firms at all, like, why not just have everybody compete in the open market? For employment, for anything, like, why do we have jobs? Why not just have, you can just like hire a secretary by the day or something? And the conclusion he comes to is that if you, by having a firm, you're reducing the transaction costs. So, you know, people will have the same knowledge about like what needs to get done. You're obviously reducing the transaction cost of like the contracting, finding labor, blah, blah, blah.

• 40:07Dwarkesh Patel?

  And so the conclusion he comes to is the more the transaction costs are reduced within people in a firm as compared to the transaction cost between different firms, the bigger firms will get. And yeah, so I guess you're, that's why the implication of your argument was that there should be bigger tech firms, right?

• 40:27Speaker 01

  Yes, definitely, because they can basically decrease the transaction costs faster within. And then even at the limit, you know, if you have, you know, large transaction costs outside the firm, between other firms that are artificially imposed, then it will make firms bigger.

• 40:45Dwarkesh Patel?

  And then, so what does the world look like in that scenario? So will we just be like these Japanese companies? These huge conglomerates who are just, you rise through the ranks as from the age of 20 until you die? Or is that what software will turn into?

• 41:00Speaker 01

  You know, it could be, I mean, I think, I think it will be lots of very large companies unless, you know, there's some kind of change in inter-firm transaction costs. And again, that could possibly come from blockchain-like technology. But you probably also need, you know, better regulation to make that cheaper. And then you would have smaller firms. But again, I'm not, you know, in the end, it doesn't really matter. Like you'd be like working in like your little unit of the big, big bank of corp or whatever. So it, it, it may not.

• 41:35Speaker 01

  I don't know what that would look like, you know, like as like a personal level.

• 41:40Dwarkesh Patel?

  Yeah, yeah. Okay. So speaking of these Japanese companies, let's talk about car manufacturing and everything involved there. Yeah. So we kind of hinted at a few elements of the Toyota way in lean production earlier, but do you do you kind of want to give a brief overview of what that is? So we can compare it to potentially other systems.

• 42:01Speaker 01

  You know, I think like all these kind of like lean Toyota process like systems, they they do have a lot of similarities and you know, mostly you want to even out your production. So you're producing very consistently and you want to,

• 42:20Speaker 01

  you know, break it into small steps and you want to limit the amount of inventory you have in your system. So that there's and when you do this, it makes it easy to

• 42:31Speaker 01

  see like how their process is running and limit defects. And, and you know, the ultimate is, you know, you're really trying to reduce defects because they're very expensive. That's maybe it's, it's, it's a little bit hard to summarize. I think that's my best shot at it there quickly off the top of my head.

• 42:49Dwarkesh Patel?

  Yeah, I, the, the, the interesting thing about the Toyota system. So at least when that the machine was released, they talk about that book was released, I think in the 90s. And they went to like the history of Toyota. And one of the interesting things they talked about was there, there was a brief time where the company ran, I think it was this after World War II. But anyways, the, you know, the company ran into some troubles. They needed to reduce, they needed to lay off people to not go bankrupt. They had much more debt on books than they had assets. And so, yeah, they, they, they wanted to lay off people, but the, obviously, the people were not happy about this. So there were like violent protest about this. And in fact, I think the US,

• 43:32Dwarkesh Patel?

  the US Constitution like gave strong protections to labor that they hadn't had before. So which, which made it, which gave labor even a stronger hand here. And so anyway, so the Toyota comes to This agreement with the unions that they'd be allowed to do this like one time layoff to get the company on the right track. But afterwards, they could never lay somebody off. And then so the, which would mean that like a person who works at Toyota works there from the time they graduate college or high school till they die, right? And I, I, I don't know, like that's, that's, that's super intense in a culture. I mean, in software where you have average tenure at a company is like one year. The difference is so much and there's like so many potential benefits here.

• 44:15Dwarkesh Patel?

  I guess a lot of drawbacks too, but one is obviously if, if you're talking in a time scale of 50 years rather than one year. The, um, the incentives are right well aligned between the company and the person. Cause like any, anything you could do in like one year is not going to have a huge impact on your stock options. In that, in that amount of time, but if you're planning on, if this company is your retirement plan, then you have a much stronger incentive to make sure that things at this company run well. Which, which means, yeah, you're, you're probably optimizing for the company's long-term cash flow yourself. And also, yeah, there, there's obviously benefits to having that, um, uh, that knowledge build up in the firm from people who have been there for a long time. But yeah, that was an interesting difference, uh, one of the interesting differences at least.

• 45:00Speaker 01

  I mean, I, I think there's like a diminishing returns to how long your tenure is going to be like. Maybe one year is too short, but there's a certain extent to where, you know, if like you grow faster than your role at the company, then, then it's time to switch. And you know, maybe that's like, it's going to depend on the person, but maybe like five years is a good, a good number. And so if you, if you're not getting promoted within the firm, then your human capital is being wasted. Cause you could go somewhere else and, and, and have more responsibility and perform better for them.

• 45:34Speaker 01

  And another interesting thing about like you, that story is almost all lean turnarounds, you know, or like, we're going to implement something like Toyota production system. They come with no layoff promises because, um, you know, if you're going to increase productivity, that's everyone's like, oh gosh, I'm going to get laid off. So instead you just, you have to, uh, increase output and take more market share is what you do.

• 45:58Dwarkesh Patel?

  It's like, it's kind of like burning your bridges, right? So you, this is the only way.

• 46:03Speaker 01

  You really, like, the process really requires, like, complete buy-in because a lot of your ideas for how you're going to standardize work content come from your line workers. Because that's what they're doing every day. So you can't, if you don't have their buy-in, then it's going to fail. So that's why it's really necessary to have those kind of clauses.

• 46:22Dwarkesh Patel?

  Yeah, yeah, that makes sense. Was it in your post or in the book where they talked about? No, I think it was in your post where you said if somebody makes their process more efficient and therefore they're getting like more work allotted to them, then obviously they're going to stop doing that, right? So, which means that, I don't know, do you have to give more downtime to your best workers or something? Or the people who are most creative in your company?

• 46:48Speaker 01

  I was just going to say, like, you know, if you're like a, you know, worker at a plant, then usually they have like small, a lot of times, like, for that level employee, like, actually small rewards work pretty well. Like, a lot of people used to like on drilling rigs, used to like if you met certain targets, like give the guys like hundred dollar Walmart gift cards. So sometimes like small to reward, you know, new ideas, stuff like that works. But because the whole system has to row together, like if you just improve, like, one part of the process, it doesn't, it may not help you. You know, you have to be like improving all the right process and stuff. So normally it's much more collaborative. Like, there's some engineer that's looking at it and like, all right, this is our, is

• 47:31Speaker 01

  where we're struggling or we have our defects here. Then you go get together with like, you know, that supervisor and the workers in that area. Then, you know, you all figure out like what improvements could be together. Because usually the people already know, like, this is like, you know, you see a problem at the top and you're just now realizing it. And then you go talk to the, the people doing the work and they're like, oh yeah, I tried to tell you about that like two weeks ago, man.

• 47:55Speaker 01

  And then you figure out, you know, a better process for them.

• 47:58Dwarkesh Patel?

  Based on your recommendation and Stephen Molina's recommendation, I recently read The Goal. And after reading the book, I'm much more understanding of the value that consultants bring to companies potentially. Because before you could think, what is a 21-year-old who just graduated college? What do they know about manufacturing? Like, what are they going to tell this plant that they didn't already know? How could they possibly be adding value? And afterwards, it occurred to me that there are so many abstract concepts that are necessary to understand in order to, you know, like, to be able to increase your throughput. And so now, now I guess I can see how like somebody who's generically smart, but doesn't have that much industry knowledge might be able to contribute to a plan. Like, but what value consultants could be bringing?

• 48:43Speaker 01

  I think there's like, you know, this applies to consultants or like young engineers. Like, a lot of times you put young engineers like just right in the thick of it. Like, you know, like working in production or process like right on the line, where you're talking to the, you know, workers the most. And there's really two advantages. There's several advantages to that. One, the engineer learns faster because they're like actually seeing the real process. And the other is there's, there's like easy opportunities for them to still have a positive impact on the business because there's just like $100 bills laid on the ground just from going up and talking to your workers and learning about stuff and figuring out problems they might be having and things like that.

• 49:27Speaker 01

  That could, that could help you lower costs. I think, I think there's a lot of consultants that, you know, I don't know how the industry goes, but I would guess there's like, you know, I know Accenture has like 600,000 employees or some like, or maybe, I don't know if that many, but it's just a large number. And a lot are doing more basic tasks. And then, you know, the, there are some people that are doing like the high, more high-level stuff. There's probably a lot less.

• 49:52Dwarkesh Patel?

  Yeah, yeah, there was a, there was a quote from one of those books that said, "Add to it, we don't like, consider you an engineer unless you need to wash your hands before you can have lunch."

• 50:03Dwarkesh Patel?

  Yeah. Okay, so in your, in your book about, oh, sorry, not your book, in your, in your blog post about the car manufacturing, you, you talked about Tesla and then you know what was really interesting is that in a footnote, I think you mentioned that you bought Tesla stocks in 2014, which also might be interesting to talk about again when we go to the market and alpha part. But anyways, yeah, so, okay, so, and then you talk about Tesla using something called metal manufacturing. So if you wanna, first of all, like, how did you know in 2014 that Tesla was headed here? And then, yeah, what is metal manufacturing and how does it differ from the Toyota production system?

• 50:42Speaker 01

  Yeah, so, yeah, I just like was goofing around and made that up. Someone actually emailed me and they're like, hey, like, what does this metal manufacturing? I want to learn more about this. It's like, oh, sorry, I just kind of like made that up. I thought it sounded funny. But yeah, I think, I think it's really the idea that there's, there's this guy, Deming, yeah, W. Edwards Deming. And he like had a lot of, found a lot of the same ideas that Toyota ended up implementing and like they, you know, Toyota, you know, respected his ideas a lot and, and America never really, except for the software industry recently, never really like got fully on board with this in manufacturing.

• 51:22Speaker 01

  And so this new, and of course, it's like software people that are, you know, coming and implementing this in manufacturing. And it's like the real American way of doing things. Cause when you look at like these manufacturing processes, like the best place to save money and optimize is like before you ever build the processor, the plant, it's, it's very early on. And so I think if there's like a criticism of Toyota, it's that they're, they're optimizing too late and they're not like creative enough. And their production technology and stuff, they're very conservative and like, you know, that's why they have,

• 52:00Speaker 01

  you know, hydrogen cars and not battery cars, even though they, you know, came out with the Prius, which was like the first, you know, large sales hybrid.

• 52:12Speaker 01

  So yeah, I think this this whole like what Tesla is doing with really just making Deming's ideas our own and really just like Americanizing it with like, you know, like, oh, well, we want to cast this because that'd be easier. Well, we can't because we don't have an alloy. Well, we'll invent the alloy. You know, I love it. It's great. Mostly, I just like Tesla because they do such like, I agree with their like engineering principles and stuff like that. And so I didn't know that their the company would come to be so valuable. It's just like I was just always reading their stock reports and stuff. I'm like, well, I at least need to buy some stock so that I so that I, you know, have a justification for spending all this time reading their 10 Ks and stuff.

• 52:53Dwarkesh Patel?

  I want to get a little bit more in detail in the the exact difference here. So so lean production, I guess, is, yeah, they're able to produce their cars without defects and without, you know, matching demand or whatever. And then so but what is it about their system that prevents them from making the kinds of innovations that Tesla is able to make?

• 53:16Speaker 01

  It's just it's just too too incremental. It's it's like it's it's so hard to get these processes working. So the faster you change things, like, it's it becomes very, very difficult to like, change the whole system. So one of the one of the advantages Tesla has is, well, if you're making electric cars, like, you have just a lot less parts. So that makes it easier. And then also, they're like, you know, once you start like, doing the really hard work of basically like, digitizing, you know, like, stuff like, you know, they don't have speed limit dials. You start just removing parts from this from the thing. And you can actually then start increasing your rate of change even faster. And it makes it hard

• 53:57Speaker 01

  to get behind, you know, if you have these like, old dinosaur processes. But some I think there's someone, there's like a YouTube channel called The Limiting Factor, and he actually went into like, the the detail of like, numbers on what it costs for Tesla to do their gigacasting, which saves like, tons of parts and deletes like, you know, zillions of thousands of robots from their process.

• 54:21Speaker 01

  And if you already have like an existing stamping line and all that where you're just changing the dies based on your model, then like it doesn't make sense to switch to the casting. But if you're building new factories like Tesla is, well, then it makes sense to do the casting and you can build new factories very cheaply comparatively and much easier. So there's a little bit of like, you know, they have lots of, they just have lots of like technical debt, I guess you could say in a software sense.

• 54:47Dwarkesh Patel?

  Yeah, that's super interesting. The analogy is actually quite, it's like Microsoft has probably tens of thousands of software engineers who are just basically servicing its technical debt and making sure that the old systems run properly, whereas a new company like Tesla doesn't have to deal with that. The thing that's super interesting about Tesla is like, it's, what is, Tesla's market cap is like way over a trillion, right? And then Toyota's is like 300 billion. And Tesla is such a new company, like the fact that you have this Toyota, which is like legendary for its production capacity and it's a production system rather, and you'd like this, this is like company that's like less than two decades old, this like worth many times more is, it's kind of funny.

• 55:32Speaker 01

  Yeah, I would, I would say that in that measure, I don't like market cap. You need to use enterprise value and the, when you start, these companies, these old car companies have so much debt that if you look at enterprise value, the, it's not so jarring. Like literally, you know, like, I don't know, I can't remember what like GM's worth, like 40 billion or something, and then they have like 120 billion dollars in debt. It's like, so their enterprise value is like five times more than their, than their market cap.

• 56:01Dwarkesh Patel?

  What is enterprise value?

• 56:03Speaker 01

  Enterprise value is basically like, what is the value of the actual company before like you have any claims on it? It's the market cap plus your debt. Simple, the most simple, but basically, you know, if you're the equity holder, like in the company gets sold, like you have to pay the debt first. So you only get the value of what's left over after the debt. So that's why market cap is, when Tesla has very little debt and a lot of market cap, and then these other guys have a lot of debt with less market cap, it skews the comparison.

• 56:34Dwarkesh Patel?

  Yeah, and then, I mean, one of the interesting things, it's similar to your post on software, is that, yeah, it seems like one of the interesting themes across your work is automating processes often leads to decreased, decreased eventual throughput because you're probably adding capacity in a place that you're just adding excess capacity and you're also making the money-making part of your operation less efficient by having it making, have it to interface with this automated part. And it's, it's, it sounds like there's a similar story there with car manufacturing, right?

• 57:08Speaker 01

  Yeah, I think, I think if we tie it back into like what we were talking about earlier, automation promotes local optimization and premature optimization. So a lot of times, it's better to figure out, like, you know, instead of like automating a process to make a really hard to make part, you know, you should just figure out how to make that part easy to make. And then after you do that, then it may not even make sense to automate it anymore. Or, you know, get rid of it altogether, then you just delete all those robots. So.

• 57:37Dwarkesh Patel?

  Yeah, yeah, it's interesting. Okay, so let's talk about your, uh, let's talk about your, the project, uh, that you're working on right now, the CO2 electrolysis. Um, do you wanna, do you wanna explain what this is? And like what your current approach is? How, what is going on here?

• 57:55Speaker 01

  Yeah, so I think just overall, like, electrofuels right now are like super underrated because you're about to get, hopefully, some very cheap electricity from like solar, or, you know, it could be maybe some wind, possibly even if we get really lucky, some nuclear geothermal. And it will make sense to make like liquid fuels or natural gas or something just from electricity and air, essentially. Um, so there's, there's many, there's like a whole spectrum of, of ways to do this. So, um, CO2 electrolysis is one

• 58:33Speaker 01

  of those. And what, you know, it's basically you take water, electricity and CO2, um, and, and a catalyst, and then you make more complex molecules like carbon dioxide, or carbon monoxide, or formic acid, or ethylene, or ethanol, or methane, or methane. Those are all options.

• 58:55Speaker 01

  But it's it's important to point out that right now, I think if you added up all the CO2 electrolyzers in the world that they, you know, you'd be measuring their output in kilograms per day. And of course, like the products I just mentioned, we make millions of tons per day of. So there's like a massive scale up if it's going to have a wider impact. And and so there's some debate. I think the debate for the whole electrofuels sector is how much are you going to do in the electrolyzer? So one, one company that I really like their approach that is different than mine is Terraform Industries and they want to make methane, which is the main constituent of natural gas. But they're just making hydrogen in their electrolyzer.

• 59:38Speaker 01

  And then they, you know, capture the CO2 and then put it into a methenation reaction. So everything they're doing is like already world scale, basically, like, you know, we've had hydrogen electrolyzers, power,

• 59:52Speaker 01

  you know, fertilizer plants without, you know, provide them with the hydrogen they need. We've had, you know, methenation happens in like all ammonia plants and several other examples. It's well known, very old.

• 1:00:04Speaker 01

  And methenation is like hydrogen and CO2 combined and make water and methane. Yeah. So their approach is like the more conservative, but if you add, if you do more in the electrolyzer, like I'm going to make the methane actually in the electrolyzer instead of adding this other process. You could potentially have a very, a much simpler process that has less capex and scales downward better. You don't need traditional chemical engineering. Like heavily favor scaling. So with the more like terraform processes, you know, their plan is like absolutely ginormous factories, you know, and these, these can take a long time to build. So like one of the things they're doing

• 1:00:44Speaker 01

  is, you know, they're having to fight like the, the complexity that creeps into chemical engineering every, every step of the way. Because if they don't, they'll end up with a plant that takes 10 years to build and that's not their goal. You know, like it takes 10 years to build a new refinery because they're so complex.

• 1:01:04Speaker 01

  So yeah, so that's like, kind of where I am. I'm like more on the speculative edge. And it's not clear yet which products will be favorable for which approaches.

• 1:01:15Dwarkesh Patel?

  Okay, yeah, and you're building this out of your garage, correct?

• 1:01:19Speaker 01

  Yeah, so that's where like the electrolyzers, everything with electric industry is like a flat plate instead of a vessel. So it scales down. So like I could have a pretty good idea of what my, you know, like hundred square centimeter electrolyzer is going to do if I make it quite a bit bigger. You know, I have to worry about like, you know, how my flow might interact in the larger one and you'll make sure the mixing is good. But it's pretty straightforward because you're just like making your flat plate a larger area.

• 1:01:49Speaker 01

  Whereas the, you know, the scale is different than scaling a traditional chemical process.

• 1:01:56Dwarkesh Patel?

  I'm curious what, how cheap energy has to get before this is, this is efficient. And if you're turning it into methane or something like that, presumably for fuel, is the entire process energy positive? Or like, how cheap would energy electricity need to get before that's the case?

• 1:02:17Speaker 01

  So yeah, so the different products and different methods, so different crossovers. So like terraform ministries, they're shooting for like $10 a kilowatt, a megawatt hour

• 1:02:27Speaker 01

  for electricity. But again, their process is simpler, a little less efficient than a lot of the other like products are a little like also have like better premiums, like just worth more per ton than methane. So your crossover happens somewhere in between $10 and $20 a megawatt hour, which is, I mean, that's pretty, right now, solar.

• 1:02:50Speaker 01

  It's maybe like 25, maybe it's a little higher because panel prices have gone up in the last year. But, you know, I think the expectation is they'll come back down. And so getting down to like 15, where you start having crossovers for some of these products like ethanol or ethylene or methanol.

• 1:03:05Speaker 01

  Yeah, it's not. It's not science fiction.

• 1:03:07Dwarkesh Patel?

  Yeah, I think in Texas where I live, the that's where it's at, right? The cost of energy is like 20 or something dollars per megawatt hour.

• 1:03:15Speaker 01

  Well, not this summer, but recently, a lot of times in Texas, the wholesale prices are around like 25 to 30.

• 1:03:26Dwarkesh Patel?

  Gotcha. Okay, so a lot of the actual details you said about how this works went over my head. So what is a what is a flat plate? I guess before you answer that question, can you just generally describe the approach? Like, what is what is it what you're doing to for to convert CO2 into these other compounds?

• 1:03:45Speaker 01

  Well, yeah, like, so it just, I mean, it literally just like looks like a, you know, an electrolyzer, you're like, you have two sides, an anode and a cathode. And they're just smushed together like this because the electrical resistance, if you put them far apart, it makes it uses up a lot of energy. So you smush them together as close as you can. And then you're basically just like trading electrons back and forth. On one side, you're turning CO2 into a more complex molecule. And on the other side, you're taking apart water. And so when you take apart the water, you you know, kind of like balances out the equation, balances out your electrons and everything like that. I need I probably need to work on that on that elevator pitch there.

• 1:04:30Dwarkesh Patel?

  I guess the basic idea is you need to put like power into convert CO2 into these other compounds.

• 1:04:38Speaker 01

  The inputs are electricity, water and CO2. And the output is usually oxygen and like whatever chemical you're trying to create is along with some side reactions.

• 1:04:49Dwarkesh Patel?

  And then these are these chemicals you mentioned, I think ethanol, methane, formal acid. Are these all just fuels or are there? What are the other uses for them?

• 1:04:58Speaker 01

  So the idea, a lot of people are taking like a hybrid approach with carbon monoxide. So this would be like 12 CO would be they've raised a lot of money to do this, have like 100 employees or something. You can take that carbon monoxide and make hydrogen. And then you have to send gas to make liquid fuels. So like they want to make all sorts of chemicals. But one of the main volume ones would be like jet fuel. Let's see, formic acid is like a, it's like the small, it's the little, the small fry of all these. It is like an additive in a lot of things, like preserving hay for animals, stuff like that.

• 1:05:38Speaker 01

  Then ethanol, you know, there's people that wanna like, there's like this company that makes ethylene, which goes into plastics, it makes like polyethylene, which is the most produced plastic. Or you can burn it like in your car, although I think ethanol is a terrible vehicle fuel.

• 1:05:59Speaker 01

  But then you can also just make ethylene straight in the electrolyzer also.

• 1:06:04Speaker 01

  So there's kind of like a, there's many paths. So you know, which path wins is, is kind of like an interesting race to see.

• 1:06:11Dwarkesh Patel?

  Yeah, the, the, the, the ability to produce jet fuel is really interesting because in your energy superabundance paper, you talk about, you know, like you would think that even if, even if we can electrify everything in solar and when it becomes super cheap, that's not going to have an impact on the prices to go to space, for example. But I, I don't know, a process like this is possible, then it's like some way to, I guess in financial terms, a good thing like add liquidity and then like turn basically this cheap solar and wind into jet fuel through this indirect process so that like the, the price to send stuff to space or to, I guess just, you know, have like a cheap plane flights and whatever, all of that goes down as well.

• 1:06:52Speaker 01

  It basically sets like a, a price ceiling on the price of oil, you know, and whatever, whatever you can produce this for is like the ceiling now. Which is like, uh, maybe the, the way I think about it.

• 1:07:04Dwarkesh Patel?

  Yeah. Um, so do you want to talk a little bit about like how your background led into this project? This is your full-time thing, right? So I don't know if I'm right about that, but where, where, where did you get this idea and like, how long have you been pursuing it and you know, what's the progress and so on?

• 1:07:19Speaker 01

  You know, I've always loved chemical engineering and I love working at the big processing plant because it's like kid in a candy store, like I just like. My, you know, if I had extra time, I'd just like walk around and look at the plant. So that is so cool. But the uh like the plant where I worked at, like their uptime was like ninety nine point seven percent like it just. So like if you want to change anything or do anything new, like it terrified everyone because they're like. And you know, that's how they like earn their bonuses was like run the plant, you know, one hundred percent uptime all the time. So that that was just wasn't a good fit for me. And also like, you know, so I thought I always wanted like my own

• 1:07:58Speaker 01

  chemical plant, but you know, it's like billions of dollars to build plants. So that is like a pretty big step. So I think this new technology of like, you know, there's like a window where you might be able to build like smaller plants, you know, until it it optimizes to be, you know, hard to enter again.

• 1:08:20Dwarkesh Patel?

  Oh, and and then why why will it become hard to enter again? Uh what will happen?

• 1:08:26Speaker 01

  Well, hey, you know, if someone figures out how to build a really cheap electrolyzer, they, you know, just keep it as intellectual property, then you know, it would be hard to rediscover that, you know, and compete with them.

• 1:08:38Dwarkesh Patel?

  Uh and so how how long have you been working on this?

• 1:08:41Speaker 01

  Uh about, oh, not quite a year. But I actually thought got this idea to work on it from writing my blog. So when I wrote the uh heating fuel post, I didn't really know much about, there's another company in the space, Prometheus fuels. I'm like, oh, this is an interesting idea. And then I got talking to um a guy named Brian Helgman and uh he's like, you should you should do this, but not like what Prometheus is doing. And so then I started looking to it and I liked it. So I've been working on it since.

• 1:09:08Dwarkesh Patel?

  Yeah, it's it's interesting because if energy does become a as cheap as you suspected might, and if um I if this process works, then yeah, this is like a trillion dollar company probably, right? I I if you're gonna get the patents and everything.

• 1:09:21Speaker 01

  Uh, yeah, I mean, maybe there's like with chemical plants, there's like a certain limitation where like your physical limitations like, you know, like you, there's only so many places that can have a good, like are good places for chemical plants. You start getting hit by like transportation and all that. So like, you know, you can't, you can't just like produce all the chemical for the entire world in Texas and like transport it all around. It it wouldn't work. So then you're talking about like a full globe spanning thing. And then at that point, you know, if you're like building factories all over the world, someone's going to. You know, like, figure out what your intellectual property is and all that. So you would have to, like, keep, keep innovating, you know, to stay ahead of the competitors.

• 1:10:06Speaker 01

  And I think that would limit your, you know, ultimately, it's a commodity. So you're making commodities. So you don't have the same kind of defensibility that, you know, other sectors do.

• 1:10:18Dwarkesh Patel?

  I see. Yeah, yeah, yeah. Okay. There's not, like, network effects, I guess.

• 1:10:22Speaker 01

  Yeah, so, so, yeah, so not only, like, if you try to, you know, so like, you know, what I was talking about, that's not quite consistent, maybe with what I just said about, like, harder to enter. So you, but I think, like, what happens is, like, the scale starts increasing as you go on. So there's certain, even though, like, this is easier to scale down, there's certain elements that are, are very much hard to scale, and then the art organization as well. So, but you only need a few competitors to, basically, you'll end up with, like, early on, a few competitors that continue to grow against each other and limit the, the margins. And it'd hard, be hard to be, like, the fifth, you know, 30 years down the line.

• 1:11:05Dwarkesh Patel?

  But is this state of this project right now? So are you guys planning on starting a company? And, um, yeah, like, what are the, what are the milestones you guys are shooting for?

• 1:11:13Speaker 01

  Right now, it is just me, but, um, you know, I have, like, a, a family of engineers. We're all engineers. So it's kind of like, you know, loosely supported, uh, right now, by, by other people in my family as well, they're participating some. Um, but yeah, basically, I just have to, like, get, you know, I've already done a lot of the theoretical design work at just, like, a very cursory level to make sure it makes sense and, like, you know, the cost will be reasonable and stuff like that. So then I know it's like working on the electrolyzer to basically meet the targets you need for, like, reliability and product concentration and, um, energy costs.

• 1:11:57Speaker 01

  And also then just, like, is it manufacturable? Because right now, a lot of electrolyzers, like, they use in the, in the labs, like, they're literally smaller than a postage stamp, and they're very difficult to make, so.

• 1:12:08Dwarkesh Patel?

  Okay, I see. And had you started working on this, uh, before or after you had quit your job?

• 1:12:14Speaker 01

  Um, oh, yeah, after. I, I quit my job, like, five years ago or something. I was doing, like, software stuff in between.

• 1:12:21Dwarkesh Patel?

  Oh, yeah? What, what did you work on?

• 1:12:23Speaker 01

  I worked on several products. I have one that's like a data service that is so like oil and gas data service that's somewhat successful. Has got paying customers, but it's still relatively small.

• 1:12:37Dwarkesh Patel?

  Okay, okay, uh, I see. And then, uh, yeah, so it seems like your blog is pretty recent, right? Like you started about you started that about a year ago. What, what, what, what encouraged you to do that?

• 1:12:48Speaker 01

  Well, let's see. I was curious about, um, like cryptography in general, but specifically for blockchains. And so I, uh, like, you know, I wanted to be able to read the Bitcoin white paper and understand some of this like IPFS. So I figured the best way to do it was, um, and I thought, you know, people talk about like, oh yeah, you should write blah, blah, blah. Um, so I did like, oh, I created an IPFS blog.

• 1:13:14Speaker 01

  I did that and learned a lot. And, you know, it was not the most reliable blog when I was like running it on my own droplet and everything. So thankfully I like migrated to a, a, a service that has much more uptime than in my own server.

• 1:13:31Speaker 01

  Yeah. So then like, you know, I wrote several, like I wrote, you know, posts to basically to learn about it. I wrote posts about like hash functions and,

• 1:13:40Speaker 01

  private key cryptography. So then I could understand like the white papers and like actually, you know, what they're doing with the math and everything. And the cryptography and eventually like, you know, I had this blog. So it's kind of like how space it will travel. I blog all right. So my first non crypto topic was on, like building it, how to build a cheaper house or, you know, like it's difficult to reduce like home construction costs. And that kind of like, you know, like made it on hacker news and all that. It's like, oh, maybe actually people want to read this stuff. So, so I've just kind of been writing since then in my spare time.

• 1:14:18Dwarkesh Patel?

  I, I, I don't know if, if, um, uh, I actually interned for Protocol Labs, which is a place that built IPFS.

• 1:14:25Speaker 01

  Oh, yeah.

• 1:14:26Dwarkesh Patel?

  And yeah, so I, I, I got a chance. I got a chance to learn a lot of, uh, about it. And then, um, yeah, like trying to learn about how Filecoin exactly works. That, that part was the, that threw me into a whirl for a while, but, um,

• 1:14:39Dwarkesh Patel?

  Yeah, it's really interesting. I actually had a blog on IPFS. I mean, it was like kind of just a toy thing, not the one that I actually ended up writing on, but yeah, it's kind of interesting. The thing is, though, obviously, like, at the moment being, it's like, nobody else is gonna seed it for you, so you have to, you gotta use like a centralized service anyways, like Piñata, but it is a fun exercise.

• 1:14:57Speaker 01

  Yeah, I was just like running it off a droplet and on Digital Ocean. And that, you know, if you use the, the like, direct content hash, it works pretty well, even if you're like linking through your ENS name. But the problem is, of course, like, when I was first doing this, like, the fees on Ethereum were so high, that I didn't want to change that link all the time. So I tried to use the pending feature with like IPNS. And like going through, because you know, Cloudflare does the ETH dot link, and then they look up your, you know, whatever your IPNS name is, and then they try to go find it. So the part that was breaking for me was like Cloudflare couldn't always find my server using IPNS.

• 1:15:42Speaker 01

  But if you switch to, so I still have an IP, it's still on IPFS. But if you, like the service I'm using called FLEAK, they basically go directly to the content hash. And, but they're on DNS, it's cheap to change, you know, you can change it in one minute, so. So if you, it's like Ethereum fees got lower, I might, I might switch back to that, but, you know, I don't wanna, like eventually, and I think it will be, but you know, what if it's like one cent transactions, then it would be no big deal to just change the content hash every time you updated your website.

• 1:16:17Dwarkesh Patel?

  What is the reason for having it on Ethereum?

• 1:16:21Speaker 01

  Just for fun.

• 1:16:23Dwarkesh Patel?

  It is inconvenient, I guess, if your content hash is changing every time you update the website, so you gotta keep re-updating the actual, where people can find the site, or use something, some other service to take care of it.

• 1:16:34Speaker 01

  I mean, yeah, if transactions are cheap, then you just have like, you know, it'd be all, you could automate it all, and it'd just cost you a little bit of money each time, and it'd be fine, but, you know, it was like $50, so not gonna like pay $50 to post a blog post.

• 1:16:46Dwarkesh Patel?

  Yeah, yeah, yeah. And then you find that typo, it's like, oh, gosh. Can't resist that.

• 1:16:53Dwarkesh Patel?

  Okay, yeah, so let's talk about your, you have a paper that you recently released with Eli Dorado on energy Superabundance and you have lots and lots of interesting speculation in there for what might be possible if energy gets a lot cheaper. I think, I think we should just jump into it. So, okay, like on the big picture, as I'm sure where per capita energy use since the 1970s has not gone up. Before that, there's this thing called the Henry Adams curve where per capita energy use would increase 2% in a year and then you know, after 1970, that was no longer the case. Ironically enough, right after the Department of Energy was created. But nonetheless, we've still had economic growth since 1970s.

• 1:17:34Dwarkesh Patel?

  I mean, it's been slower, but even though per capita energy hasn't increased, per capita GDP has increased. So is, I think in the papers abstract or the introduction, you talk about like why increasing energy use is necessary for increasing economic growth. But doesn't that pattern suggest that you can still have decent economic growth without having to use energy? Or have we just not come across the constraints yet?

• 1:17:57Speaker 01

  I think you just have diminishing returns, you know, like you can only, there's like physical limits to how efficient things could be. And as you get closer to that efficiency limit, it's harder and harder and takes more and more effort. So there's some diminishing returns there where if you can just like, like, so a perfect example, we were just talking about is oil is quite expensive and natural gas is expensive too. While oil is easy to transport, you know, you can produce it anywhere in the world and get it anywhere else pretty cheaply. Natural gas is extremely expensive to transport, but it's very useful fuel and for also like, you know, making fertilizer or anything else. So if you just

• 1:18:39Speaker 01

  have like, you know, independent energy, because not everyone has natural gas or the economic capability to extract natural gas using like traditional processes. So if you have, can just like build these natural gas factories where you're just using sunshine and water and air, then all of a sudden, everyone has, has access to natural gas, even if you don't have any, you know, you weren't blessed with easily obtainable natural gas reserves. And I think that's, there's really this whole story. About like the the tyranny of geography here when it comes to energy is there are some countries that have like extreme electricity use per capita, but it's like Iceland and Norway where they have

• 1:19:20Speaker 01

  like crazy amounts of hydropower and then people build aluminum plants there and stuff like that. But you know, then you have places like in Africa where they have no coal, very little gas.

• 1:19:34Speaker 01

  You know, they're just like energy starved, you know, their transportation system sucks. You can't transport coal in. The hydropower is there's only so much of it, may not be close to where their cities are. So if you start like adding solar to the mix for them, like it it and some of these other technologies, it could really be an incredible increase in energy availability for them. And you know, they aren't even like meeting the, I think we talked about that in the paper. We're like looking at doubling rich world use, but it would be like more like 10x for, you know, if you live in Africa.

• 1:20:08Dwarkesh Patel?

  Yeah, yeah. And then so I wonder if that's the case, then if energy becomes that abundant, then does the bottleneck in terms of what our civilization needs will just be the resources that are used to that that are the backbone of the things that energy is doing. So I don't know, like the actual resources that are necessary to build the factories and the raw raw materials, or to what extent can even that be?

• 1:20:34Speaker 01

  I would argue the ultimate limit is like, oh, it it's really human capital.

• 1:20:40Speaker 01

  And what more abundant energy does is it allows you to redeploy human capital away from trying to figure out how to use scarce energy sources into just like, just like, you know, what you know, you can waste some of it now or like here's here's like a an example I love about trucking. So I love trucks, not not as big a fan of freight trains. The freight trains are like extremely efficient, like literally they get like.

• 1:21:11Speaker 01

  You know, they're like, I can't remember. It's like 10 times more efficient than a truck or something like they use just very little fuel. Um, but if you're gonna like, you know, the train doesn't come by all the time and like they may not hold to the schedule. You have to aggregate your your product with the other stuff or your raw materials and it adds a lot of cost to your your production like, you know, Toyota production system runs on trucks, not trains.

• 1:21:38Speaker 01

  And for the reason is the truck is just like extremely flexible, like it comes when you need it, it goes when you need it. And even then, you know, people still complain about truck drivers, but like not showing up when you want them. But um, so when you have cheaper energy, you know, like this electrification, automation of trucking. You are gonna shift a huge amount of goods from trains to trucks. And it's going to just have like huge knock on effects all across the economy. It's more specialization. You know, you can go, there's a lot of products that, you know, you're just limited on your suppliers because of the transportation is expensive.

• 1:22:18Speaker 01

  It reduces working capital because a lot of times you're you're it takes longer on trains. Similar stuff like smaller ships, more air freight, like one thing that shocked me is Eli was telling me about like how the elasticity of demand for air freight is just like insane. When you decrease the cost a little bit, demand goes to the roof. So I'm pretty sure that there'll be some kind of

• 1:22:41Speaker 01

  like, there's like, you know, you always think like, oh, we can't do this with batteries. And then someone comes up with like a more clever idea. So, you know, even if you have like a 500 mile range limit for your freight plane. You know, the freight doesn't care if you have to stop like every 500 miles to refuel or recharge. And you can go overland on almost all these routes, like, you know, you could go up through like Japan and the Aleutian Islands, or you could go overland from China to Europe, charge just wherever's convenient.

• 1:23:15Speaker 01

  And you know, if that electric plane is has half the operating cost of the jet plane like the amount of freight you're moving

• 1:23:23Speaker 01

  on airplanes will go way up and it'll go down, you know, on ships. And then everyone will be better off because like right now, if you're a shipping company, you have like real working capital problems because your stuff sits on boat for like a month and you've got to finance that and do all this stuff and then you know, what what if things change in the meantime, you know, like, oh, I don't really want that product anymore. So the air freight is just like an absolute economic, just like booster. So if you can make that cheaper, it's it's really exciting.

• 1:23:57Speaker 01

  But it uses way more energy, so.

• 1:23:59Dwarkesh Patel?

  It did, uh, an analogy that just occurred to me is like, you could imagine that if um, confrontational power, if Moore's law had stopped in two thousand and five, we would still have a lot of interesting applications using a compute and the effects of the computer would still have permeated society. But obviously, a lot of things that are like possible today with computers would have just like they just wouldn't have been tried or been possible in that kind of world.

• 1:24:27Speaker 01

  Okay, I mean, all your engineers would be, uh, you know, working on optimization instead of building new products.

• 1:24:33Dwarkesh Patel?

  Yeah, I think um, I think in uh, Jay Storehall's new book on, we're not putting you at this point, but his book on where's my flying car, one of the points he makes is that GDP growth has been probably overstated because a lot of what counts as GDP growth has just been increasing the efficiency of existing machines to make them use less energy. Which doesn't, which still doesn't uh, result in like more total resources or goods or services being produced. But yeah, it's sort of like making the laundry machine more efficient. You can just like create a new kind of machine that may use, need to use more energy. Yeah, okay, that's interesting. Okay, and then so for this vision to come to pass, do you need energy to is it just enough that energy becomes super cheap? Or do you need advances in the ability to store that energy as well, right? So if like

• 1:25:19Dwarkesh Patel?

  if um, if if I don't know, lithium batteries are the bottleneck. Um, it doesn't matter if you can uh, get energy super cheap. If you can't like put them in uh, you know, appliances or cars or planes or whatever.

• 1:25:32Speaker 01

  I think the important thing to think about here is that our air current energy is so expensive, especially electricity. It's quite with like our energy resources, which are basically thermal. It's quite difficult to make electricity comparatively. And so what we use electricity for is like stuff we really want to use electricity for. So like it's it's hard to imagine that, you know, we're not going to turn our air conditioner off. Like we're going to run it. And so we're willing to pay a lot of money for that electricity to run our air conditioner. Whereas like, oh, if you look at really closely at a lot of the use cases that that use like tons of extra energy, they're much more flexible in how they use the energy.

• 1:26:17Speaker 01

  And there's not a whole lot of storage involved. Like if you're looking at, you know, growing crops or making methane for rocket fuel or making chemicals. Like you can design these processes to run when the energy is available.

• 1:26:35Speaker 01

  And and so the batteries are really going to be

• 1:26:41Speaker 01

  for keeping your air conditioner on where you're willing to pay a lot of money. So I don't really see the batteries and storage as a limit.

• 1:26:47Dwarkesh Patel?

  Okay, so I guess I didn't, I guess I didn't like if you ask them like, like air freight, right? If if that's the thing we're concerned about, like wouldn't you need some way to store that electricity for air freight? Or maybe you can just convert it to jet fuel? Is that what you're saying?

• 1:27:02Speaker 01

  Yeah, I was thinking more like grid storage. But yeah, like in the in the transportation. I mean, transportation is going to dominate battery demand. It's going to be like like grid storage is like tiny in comparison.

• 1:27:13Speaker 01

  But I think there's there's like, you're basically getting to the point where we're making batteries out of dirt.

• 1:27:19Speaker 01

  Because that's that's how you scale it. So you know, if you're making batteries out of like carbon and iron and and phosphate, you know, you're just, there's like, it's just how many battery factories you want to build, you know? And there's plenty of lithium. It's just you have to build the lithium mines. I don't really see any hard limits there. Eventually, once you build all the factories, then then you're pretty much ready to go.

• 1:27:43Dwarkesh Patel?

  And then so I is the point you're making with the alternative batteries that even if they're of less, even if they're like worse than lithium batteries, they'll we'll have just so much energy that it doesn't matter like, even if we lose a lot of it, that's fine. We'll just use whatever we can take. Or are you saying that they can we will produce batteries with other chemistries that are as good as lithium batteries or better?

• 1:28:05Speaker 01

  You know, right now, the shortage is really nickel. So like in the very short term, lithium is kind of starting to become a shortage, but it just there's plenty of lithium and it won't be so like the lithium iron phosphate or like whatever what there's like a huge amount of substitution into right now because it's avoiding nickel.

• 1:28:25Speaker 01

  And it's not quite as good as some of the nickel chemistries. But for a lot of applications, like it just doesn't matter. A lot of cars and everything like that. And you're going to have, you know, like the aircraft and stuff playing paying the premium for the high energy density batteries. And eventually there are technologies that they just use less and less materials because they're just better batteries. Like some of these concepts around solid state. I'm not sure. You know, if those will come to fruition and if they'll be really that much better when they do come. But I think, you know, there's lots of opportunities for substitution down the line.

• 1:29:02Dwarkesh Patel?

  What is solid state, by the way?

• 1:29:04Speaker 01

  Right now, all our all our batteries. The lithium, like they charge and discharge through the lithium ion going back and forth between the cathode and the anode. And it travels through a liquid. And and the liquid is electrolyte, which means ions can travel through it. So solid electrolytes are a little more a little more challenging, kind of hard. So that's why we don't have them. So you get rid of the liquid and it's just like the the ion has to travel through a solid instead.

• 1:29:37Speaker 01

  And the the promise is like it could be like a much higher energy density and theoretically cheaper too, just because it's like weighs less and stuff. But yeah, there's like all sorts of problems around like they degrade faster or you know, batteries have like six different areas that you have to hit the requirements. And if you miss one, then it's no good. So they're kind of hard to improve in that sense.

• 1:30:01Dwarkesh Patel?

  Um, yeah. So I guess if the energy super abundance is going to come from solar and wind, obviously, these are intermittent sources of energy. In that case, you would need there to be like progress in the battery storage, right? That that's contingent on that, right?

• 1:30:16Speaker 01

  Oh, yeah, I think that's what I mean. Like, a lot of the extra energy uses that we talk about don't really require many batteries, if any batteries at all. I mean, like, like the transportation, yes, you have like batteries in the but if you're going to like have abundant like nuclear electricity or abundant geothermal electricity, like you still have to build all those electric vehicles. You still need the batteries for that. So like the extra batteries that solar wind require over like geothermal, I think could end up being pretty minimal. I the way that maybe the way to think about it is, is, you know, if you can have solar farm that's going to give you $10 a megawatt hour electricity, you know, you just have you have to figure out how to utilize that. And if you do, then you'll be very rich.

• 1:31:02Speaker 01

  You know, and and you'll beat the guy who's paying $40 a megawatt hour from the from the more expensive traditional generators.

• 1:31:11Dwarkesh Patel?

  Mm hmm. Yeah, yeah. But before we get into which sources of energy are most promising, let let's talk about some of the other implications of an energy super abundance. So, yes, I I was I we talked a little bit about travel, but one thing that might be concerning with like air travel, at least for passengers, is if the bottleneck step there is like TSA and other regulations, to an extent, while reducing the travel time, or or, you know, like, yeah, increasing flight speed or number of flights, to what extent would that have have an impact on how much time you're going to spend in an airport or in transit?

• 1:31:47Speaker 01

  Well, so right now, if you think about, you know, like Airbus, they have this like super jumbo thing. I can't remember what that plane, its number was. But like, none of the airlines really like loved it because it's it's too big. It's too hard to get like everyone loaded and unloaded. And you really just like hit um diseconomies of scale. So the electric planes are likely to be just like tiny in comparison, like ten passengers. So that's it's easier to load and unload. You're gonna fly out of smaller airports. So you know, you won't be going to like this giant regional airport that's just has all the parking problems and all the security. You'll be driving to like your neighborhood general aviation airport.

• 1:32:28Speaker 01

  Where there's like a a small line to get through and a lot of these small aircraft under certain situations even. Avoid some of the screening requirements because they're just not as dangerous, you know, if if you only have if you have a small plane, there's only so much damage you can do with it.

• 1:32:42Dwarkesh Patel?

  I did not know that. That's I gotta start booking planes from the small airports or something to to avoid the TSA.

• 1:32:48Speaker 01

  It's it's very nascent, but there's like some business models that are like coming. Down from like the NetJet style. To like a little more commercial. So it's it's like kind of like I think that they're trying to like hit a price point that's similar to first class, but you get you get to avoid all the. Airport craziness. So I think and I think I like I'm just kind of a believer in like if that existed, people would get angry enough that. They would loosen up a lot of the rules. It it seems like impossible to change those rules now. But I think like the average person, it just costs them like. No time because most people don't even fly very much. So.

• 1:33:25Dwarkesh Patel?

  Yeah, yeah, yeah. Um, yeah. And do you want to talk about what? Your vision for what a city could look like if energy got a lot cheaper? I mean, in the paper, you're you have all kinds of interesting projections about drones and electric deliveries and. Um, ju- just the entire congestion of the 3D space and I guess with tunnels as well. The the the. Well, what what does a city look like with energy super abundance?

• 1:33:48Speaker 01

  Basically, like disaggregate the car to a certain extent where you're using. You know, not like inner city car trips are less because cheap flying is going to be cheaper. And it's going to be more convenient to like have the bots deliver. Your stuff. And you know, the the tunnels, I love the tunnels because you know, I don't like taking people's land. So you with tunnels, you can run. You know, new roads and everything without imminent domaining and taking people's land away from them when they don't want to lose their land. And I think like it's in that process is so people it makes people so angry when you take their land that it's very expensive to end it domain people because they will fight you.

• 1:34:32Speaker 01

  You know, until like literally the sheriff has to show up and haul them away. So. If you can go around that with tunnels using existing rideaway, it just makes that like. Societal cost of doing some of this stuff significantly less expensive and it's, you know, then it's the engineering challenge and. And I think there's, there's really an opportunity now there like boring company is the famous, but you know, recently I think there's a hacker news, another company that wants to do. Tunnels for electricity and they have like this plasma boring machine concept. I mean, it's pretty, it seems pretty crazy right now, but.

• 1:35:14Speaker 01

  It's just one of those solutions that you're going to reduce the coordination cost across the whole economy. And improve property rights. And so people should really try to build it.

• 1:35:26Dwarkesh Patel?

  You mentioned one of these machines in your blog post on tunneling and it was the SpaceX one. I forgot the name of it, but yeah, it's, it's like this insane thing. It's.

• 1:35:34Speaker 01

  Proofrock?

• 1:35:35Dwarkesh Patel?

  Yeah, exactly. Yeah, yeah. It's, you know, it's like pretty big, but it's apparently it's all electric, which is kind of insane. And yeah, it can just like do it in one. How, how is it getting the material out? Like you're, you're just, if you're just doing the tunneling in one step?

• 1:35:51Speaker 01

  The problem that like most of the tunneling is in soft soil and it just, it's really kind of like, it's, it's kind of like difficult to drill through soft soil because of the materials handling. It's like when you first start drilling an oil well through this stuff, like you actually have to limit your drilling speed. And you don't even have to put any weight on the bit, like just the pumping fluid around basically like jets out the fluid. So that's kind of what you're doing with the boring machine and the soft soil stuff. So managing. The spoils, which is like, you know, like they have like muck carts a lot of times. I think maybe it's basics trying to do a conveyor belt, but you could also. Just make it a full liquid and pump it out. Like in the oil field, you know, we, we carry our cuttings in mud and we pump it.

• 1:36:35Speaker 01

  But yeah, and then they have the other big challenges. They have to keep the walls from caving in on them. So that's like, there's like, like current boring machines and soft soil spend enormous amount of time.

• 1:36:49Speaker 01

  Erecting these tunnel supports that keep it from collapsing in themselves. So it's kind of counterintuitive. It's actually dramatically faster to bore in hard rock than is soft soil. Cause you, cause the soft soil, you spend so much time, like nonproductive time, or in the hard rock, you're just like blowing it going.

• 1:37:08Dwarkesh Patel?

  Interesting. Um, yeah. Okay. And then, so to get back to the, to the cities. The, you mentioned something in the paper, yeah, Mercedes constant, uh, which is the amount of like people's. But wasn't it that the amount of time people spend in transport per day, um, is, is the same. So if you just increase the amount of, uh, increase the speed in which they can move. But VTOLs or other kinds of things, then they can, they have a wider surface area in which they can explore, right?

• 1:37:37Speaker 01

  Yeah. So, yeah, I don't, I don't know if like physically the cities will look that much different, but like. Their effective economic size will be much larger because you know, you could, you could live in. You know, like Cedar Rapids and, you know, commute to Minneapolis with some of these technologies. So your, your city in Cedar Rapids still looks the same. But you know, like you, you can, you know, you don't have to work there. If you have a better job in Minneapolis, you could commute there, you know, three times a week or whatever it is, five days a week.

• 1:38:11Dwarkesh Patel?

  Yeah, yeah. It's super interesting. Yeah. But does that imply by the way, that if the, uh, if the commute time stays the same and like people just get more spread out, if energy becomes cheaper, then. Neighborhoods and cities kind of become this unwalkable mess out of like a Jane and Jacob's nightmare. Uh, uh, uh, if the conglomeration goes away.

• 1:38:29Speaker 01

  I think, I think it's actually the opposite, you know, like if you have tunnels. And if you have, um, you know, some, like these alternative methods to cars, then you use cars less. And I think like in, in many cities, you know, they never made sense for cars anyway, because they were built before cars. So you know, in New York City, you're never going to move everyone around on a car unless you build tunnels, you could then. But even then, I think. There's other technologies there that make a lot of sense. And I think people like walkable. So you know, even even though I live in a city that's that requires a car. Like some of the hottest neighborhoods are like walkable neighborhoods where like the neighborhood is walkable itself.

• 1:39:13Speaker 01

  And then you just like drive your car to wherever else you need. But it's like the the car is like hidden within the neighborhood.

• 1:39:21Dwarkesh Patel?

  Okay, so interesting. I I guess maybe we'll see more segregation than not in the not in the racial sense or anything. But in the sense that people prefer to live in like with these walkable neighborhoods. But they don't have any problem to like commuting to work using a VTOL or something. So then you would have what you'd end up seeing is like these walkable neighborhoods. And then like industrial zones that are like way far away distance wise, but not that far away time wise.

• 1:39:46Speaker 01

  Right. And it's the same for like, if you want to live in a small town. That's just happens to be, you know, now would be too far to commute to a city, but you could in the future.

• 1:39:56Dwarkesh Patel?

  Yeah, yeah, more choice. I see.

• 1:39:59Dwarkesh Patel?

  So what is holding back VTOL VTOL, by the way, is vertical takeoff and landing. This is what the reason you need to go to the airport is because you need like a large landing pad to take off and land. The hope is that if you could just like vertically take off, then you would be able to like lift off from your roof or something. Obviously, we've had prototypes of this kind of stuff since like the 30s. What like, why don't we have these widely available? Is the energy the constraint or is it something else?

• 1:40:26Speaker 01

  Well, I think in the past, you know, theoretically, liquid fuels are dense enough. But they're they're too complex, too expensive.

• 1:40:35Speaker 01

  Because when you're turning heat energy into mechanical energy. It's just like a lot of weight and complexity comes with that. Like some of these old concepts, you know, you have like all these engines and all that. And so if you electrify them, it really changes the game. And so just now we we have because it's not just batteries. It's the motors and the inverters are now getting dense enough and small enough to make sense. But it takes time to get this stuff through FAA, you know, for for better or worse. So, you know, it's like the technology hasn't been good enough, long enough to get stuff through FAA. And there is some limitations, I think, right now, they wouldn't a lot of people wouldn't use batteries.

• 1:41:19Speaker 01

  Like the batteries are just on the edge of good enough. Like, you know, you're going to have like a 50 mile VTOL, not like. A couple hundred mile VTOL, but eventually like my like dream VTOL application is like a a nuclear powered quadcopter that carries like a container. So you can take the container like directly from, you know, the factory in Vietnam or wherever directly to the the people who are using it or the warehouse like in in Arkansas or whatever.

• 1:41:50Dwarkesh Patel?

  Yeah, yeah, that would be interesting. I mean theoretically, you could have like these drones that are carrying like these huge payloads. Um, weight wise.

• 1:41:58Speaker 01

  Yeah, but you wouldn't, you wouldn't necessarily want a large payload.

• 1:42:03Speaker 01

  You just want like the, whatever the customer wants, you know, you want to size your your vehicle to deliver that payload. That's the most efficient.

• 1:42:12Dwarkesh Patel?

  Oh, I see. Right. Because you don't need to, it doesn't need to be like a shipping container or like a shipping vessel where you you just have it be huge. Okay, I see. Okay. Um, yeah, yeah. Interesting. Uh, and then what does this mean for computing? So if energy gets a lot cheaper? Um, I, I guess Bitcoin mining becomes, well, it doesn't necessarily become more profitable because other people's energy is cheaper too, but what are the other consequences? Is spinning up an AWS server just become trivial now and then uh, building a deep learning model costs like nothing in terms of GPU time? Uh, what would impact this on computing?

• 1:42:48Speaker 01

  Yeah, I mean, I think the limitation would probably still be just like chips for a while until you figure out a better production process for that. I think it's, it'd be a while before it's like becomes energy. I think, you know, like smartphones really worry about energy. So there could be some interesting things with um smartphones. If you have like a, a very power dense like Beta Vultak battery, it's like a nuclear battery, something like that where you where you don't have to worry about like running down your battery. Um, but outside of, outside of smartphones, I'm not sure that energy is like. The limit for a lot of this computing.

• 1:43:26Dwarkesh Patel?

  And one of the interesting things to speculate about at the end of the paper is about a potential carbon shortage. And I think in an email to Tyler Cowen, he published on his blog, he, you said, like, by the end of the century, we'll have a carbon shortage, because presumably because of the process you talked about earlier, the thing you're working on, right? If you can take CO2 out of the atmosphere. All right. So what is the probability that this ends up happening? Like, do you think it's like, more than 50% by the end of the century? Or is it just speculation?

• 1:43:58Speaker 01

  I think it's extremely high that it happens. And it's harder to put the timeline on it. By the end of the century, it might be like a little, if you, I think, I think I ran some numbers in there, like, if you 10x current plastic production, and you're just like pitting it landfilling it all. I think it was a little over like 100 years to get, and you're assuming like, you're out, the rest of your carbon output is zero in that scenario. But it's probably pretty hard to do it, like in 100, like by the end of the century, without a lot of growth. But it's kind of the exponential thing can get you where, you know, like, I think all the, you know, some large number of the carbon emissions have

• 1:44:39Speaker 01

  happened in the last 20 years. Like, and it was very small before, like, 1950. So, you know, you could kind of like, get surprised at the back half, the last 10 years, you know, it goes crazy. It makes it hard to predict.

• 1:44:52Dwarkesh Patel?

  Yeah. Yeah. By the way, so in Wilmer Castile's new book on long-termism, one of the things he speculates about is if society collapses and we need to restart, one of the things we'll need is coal, or some other sort of like dense, easy to use fuel. And the problem is, we've been burning up easily accessible coal, like coal in places where you could just like dig up and find it. And so one of the things he's concerned about is like, making sure we leave some easy access, easily accessible coal silos around, so that in case, you know, society collapses, we can restart and use these to power up our, like, a second industrial revolution. I wonder if you could use a process like this, with carbon sequestration,

• 1:45:35Dwarkesh Patel?

  to actually just build up these kinds of reserves. I don't know if like, a long-termist or somebody's like, really interested in making sure we have that kind of resource, they could just use this process to, is that possible?

• 1:45:50Speaker 01

  Also, actually, there's a company called like Charm Industrial.

• 1:45:55Speaker 01

  They're basically doing that because they take trees and they do a process called fast pyrolysis. It's where you burn biomass without oxygen in toxic environment. And it makes this bio oil and then they're injecting the bio oil down into wells and selling carbon credits. So it's already happening, you could say.

• 1:46:15Dwarkesh Patel?

  Oh, wow. I knew that that is easy to burn and stuff. Like you could.

• 1:46:21Speaker 01

  Yeah, if you if you just want to like burn it for heat, it's it's okay, but it's it's hard to refine. But this was like a, there are a lot of people that tried to do bio oil as an alternative for petroleum. Like 20 years ago, like Clean Tech 1.0 and they they all failed. So it makes me laugh that like they're reimagining the process to sell what are right now very expensive carbon credits.

• 1:46:44Speaker 01

  But you could do something similar. There's actually, you could do something similar just to make straight carbon and stuff if you wanted to.

• 1:46:50Dwarkesh Patel?

  Okay, I see. The the thing that I find interesting about this is often in the case of global problems. People will early on identify that a thing is going to be a problem. But it often ends up being the case that they get the direction of the problem opposite. Like if you think about population, right? In the 70s, people were like correct. That global population was going to be a problem. The thing is, it probably, it seems like now the problem is going to be that the population might decline too fast, right? Now that it's going to grow exponentially. And I think this is like another example of this kind of thing where CO2 is going to be a problem either way. It just like it's, I'm not sure if it's going to be a problem, we'll overproduce it or we'll have shortages.

• 1:47:36Speaker 01

  Yeah, I mean, if you if you just think about like the the large scale, if you're going to be like Kardashian, whatever scale civilization. Or you're using like condensed amounts of energy, like that's going to have.

• 1:47:49Speaker 01

  You know, side effects and you're going to have to figure out how to manage that one way or the other. And I mean, one of those is eventually Earth may just be like a a nature preserve and we all live in space or something, but.

• 1:48:01Dwarkesh Patel?

  Yeah, yeah. Okay, let's talk about nuclear. It seems like it seems like you're much less optimistic about nuclear than you are about solar and wind. Do you want to do? Do you want to explain why that's the case?

• 1:48:15Speaker 01

  Yeah, well, especially solar more than so than wind. Wind, I think it's limiting because it's transmission problems. And again, you know, like you're, if you want to build out huge amounts of wind, like some of these zero carbon

• 1:48:31Speaker 01

  plans call for, like, you're going to have to take a lot of people's land to, like, build transmission lines and stuff. And again, really pisses people off and they fight hard and it becomes expensive. So, and it's not like, you know, the wind turbines are easy, are relatively easy to site, like, because you pay people. You'll actually see, like, they never put above ground power lines on the people's land where they put the wind turbines. They're always underground. So at least they get to the county right away. But like, when you get these giant transmission lines, like, you know, grain belt or something, like, they almost inevitably have to go across a lot of people's lands and you can't just stuff them all in county and state right of ways because they're the pylons are so big.

• 1:49:11Dwarkesh Patel?

  Sorry, what is a pylon?

• 1:49:13Speaker 01

  The pylon is like what holds the wire up, the tall tower. So, yeah, so solar is like, it's much more flexible where it can go. And I think the solar getting cheaper, the obstacles are just like pretty simple. It's like, well, gosh, this, it's expensive to fill with racking. Why don't we just lay the panels on the ground or like, gosh, that's glass we're encasing with is getting expensive and we don't need it to last 80 years or 50 years. You know, we can just like put some plastic on it instead. Or, you know, we've gotten these, you know, the, the actual photovoltaic cells so cheap. And like all the other labor and stuff is getting more expensive. Well, why don't we just add another layer and make more energy? So those are kind of like your, your solar solutions to get down to like $10

• 1:49:55Speaker 01

  a megawatt hour and they're pretty straightforward. Whereas like nuclear is like, well, you know, a light lot of reactor can't go there. Like, let's instead cool our reactor with sodium, which you know, catches fire when it explodes when it reacts with water and catches fire when it reacts with air. Or there's, you know, you could cool it with lead, liquid lead, that's an option. Helium, which, you know, leaks a lot.

• 1:50:21Speaker 01

  Or you could do molten salts that like corrode everything. We don't really have anything that.

• 1:50:27Speaker 01

  And so I think when you start looking at like, you know, this is for large reactors. So I think those solutions for very large reactors are are are pretty hard. It's pretty difficult. And there's a lot of reasons why.

• 1:50:42Speaker 01

  Why did we make these weird choices? Well, there are a lot of stuff just reacts poorly. You know, when you expose it to neutrons and stuff. So they have they're like, gee, to have their own features that make them possibly good candidates. So that's that's really where and I actually think like, regulation is actually kind of like a.

• 1:51:01Speaker 01

  It's oversold a little bit. And and I think actually, to the extent that. If people were internally consistent, then they would see NRC as a regulatory success story. Because and the kind of background on this is my. My wife's mom and stepfather are nuclear engineers. But I've like worked, you know, from at all levels of nuclear power industry. So I get to ask them. You know, the general questions and learn a lot about it, which is nice. It's very helpful for learning about it, but there's. Like back in the 80s, the nuclear power industry was like in real trouble because. Their competitors in coal and natural gas got deregulated.

• 1:51:43Speaker 01

  Like the most of the cost of coal is the rail getting there and the rail industry got deregulated. And then the natural gas industry got deregulated. So the cost of their alternatives was falling and they had the cost of. You know, they had to build more safety into their plants because of all these. It wasn't just Three Mile Island. It was like Brown's Ferry. It was Rancho Echo. All these. Like, you know, things that could have been really scary and. Certain extent, we got like a little bit lucky that we didn't have like a worse. Disaster. You know, they were just like relatively limited accidents at their sites. So what the, and like, there's actually a time where nuclear power plants were selling

• 1:52:28Speaker 01

  for less than what their fuel was worth they had on in their plant.

• 1:52:33Speaker 01

  Like around there. So the, what the industry did and what NRC did is they uh moved to probabilistic um risk assessment, which is like, you know, usually the gold standard. Like people are really happy that we use probabilistic risk assessment for commercial crew with NASA and SpaceX and they want FDA to use more probability, you know, more expected value. So, and what this allowed was it's basically you're, you're rolling up some of the rules and moving into the risk assessment.

• 1:53:08Speaker 01

  So like around 1980, like nuclear power plants only ran about 60% of the time. They weren't very reliable. They had all sorts of like unplanned outages, stuff like that. And these, the safest mode of operation is just running as designed. So the, the more, the more consistent nuclear power is, the safer it is. So the, the probabilistic risk assessment allows you to do repairs while you're running, which was kind of like discouraged before. So it'll be like, if your main cooling pump is um leaking before you'd be like, oh gosh, I hope we can make it. And then eventually it just fails and you shut down the reactor. And now it's like, all right, well, we have backups. The safest thing to do is actually repair

• 1:53:53Speaker 01

  it now while the plant's still running and then get it repaired and put it back online.

• 1:53:59Speaker 01

  And so the, so not only like to give you the idea of like the safety standards that NRC has, um, I think for like the, the nuclear, the plant taking damage is like one time in 10,000 reactor years. And then for a large release is one in 100,000 reactor years. And there's ninety three operating reactors that, you know, less than ninety three sites. So like, we should only see like a three mile island under the current standards, like,

• 1:54:29Speaker 01

  you know, once every hundred years or so in a large release like a Fukushima type situation, like once every thousand years. But, you know, they have like, just in a few years of the nineteen seventies, like, the industry had like three or four of these like damage events, you know, at least. I don't know how many like officially count, but probably at least three. So the safety is like, god, incredible. And now the operating operating capacity is up to like over ninety percent. So the plants are just extremely reliable and it lowers their costs because their costs are so fixed. And like, yeah, like, can you compare it to like a country like France, that they've had a lot of liability problems with their nuclear fleet in the last couple of years, like this year?

• 1:55:12Speaker 01

  You know, their only their capacity factor, I think it's all might barely be over sixty percent. And they have, you know, we have like ninety gigawatts nuclear, they have sixty gigawatts. So that's like, makes a huge difference for Europe, that those plants aren't running full out. And it's really, and you see a lot of charts about like, if Germany didn't shut down its reactors, what would the, you know, energy balance be? But you don't see as many like, if the French could run their reactors like American reactors, what would the energy balance be?

• 1:55:40Speaker 01

  So I think there's, I could go on about like how that integrates into new plants, if you want about that.

• 1:55:46Dwarkesh Patel?

  Yeah, I do. Yeah, because the the line I've always heard on this from my bubble is like, oh, they haven't approved a new plant, the NRC has not approved a new thing since, um, a new plant since it was created. I guess they just approved the design for the new small modular reactors, which I guess I've looked at your opinion on as well, but, um, uh, but yeah, yeah. So I I I'm very curious to hear this perspective.

• 1:56:07Speaker 01

  Well, okay. So think about it, you in the nineteen eighties, you had new sources of fuel, you had new competitors. You also, by the end of the decade, you increased the amount your nuclear power plants ran by a lot. So a lot of these new power plants that people are thinking about building were at existing sites, like an extra reactor at Watts Bar or whatever. And well, you, you know, you basically just got like a Buy to get one free by running your plant better. So you don't really need them as much. So all those contributed to like, just not making sense to build new nuclear power plants. Because the existing fleet ran better, and more competitors, and electricity demand slowed down.

• 1:56:49Speaker 01

  So I think there's like, is it hard to get through NRC approval? Like, yes, that last one, the mini reactor you're talking about took like, I don't know, 10 years or something. But, you know, when you think about like a probabilistic risk assessment, like, you know, no one ever says like, well, gosh, NRC's current standards of like a large release, which would basically happen whenever 1,000 years, like, is that, you know, we're not arguing over that. We're just like, talking past each other, I guess, instead. So to me, like, that's a pretty reasonable risk level. Like, you know, if you're gonna like 10 times your reactors, and that means like, almost certainly you'd have a Fukushima within your lifetime if you go with NRC standards.

• 1:57:32Speaker 01

  But it actually turns out that it's pretty cheap to like do way better. You know, a lot of the reason why the plants weren't built may not necessarily been because of regulation, but because like, you know, like the market conditions changed. You know, you had more competitors and the coal with the gas being deregulated. And then you also had, you know, increased production from the existing nuclear plants. So if you're gonna build an extra nuclear plant and or an extra reactor at an existing site, then you know, you might not have needed to anymore because you got so much more production out of your existing plants. And the stuff like they shortened the fueling time, and just a lot of like, all around improvements.

• 1:58:18Speaker 01

  Paired with electricity demand flattening that really made new plants not economic or not necessary.

• 1:58:27Speaker 01

  And, you know, really, when we think about the probabilistic risk assessment, it just takes a lot of engineering time to get it through. Like, if you look at how hard it was for SpaceX to get Falcon 9 and Dragon through NASA's loss of crew, risk calculations, you know, it took years, took hundreds of millions of dollars. So it's kind of funny that, like, people see that as a success. And especially when the stakes were only like a few lives for people that volunteered for danger. And then you have like a nuclear power plant where we're going through the same probabilistic risk assessment. And, you know, it could impact many more people's lives. And, you know, it's like, oh, it's not, you know, that's not good enough.

• 1:59:11Speaker 01

  So, I mean, I think it would make more sense to argue about, you know, if the risk factor, you know, should we, how much risk should we take, like with the actual numbers as opposed to just like, oh, I'm mad that we're not building nuclear power plants.

• 1:59:28Speaker 01

  And actually, it becomes just like very inexpensive to actually to improve the risk probabilities because the old plants that we're running now, they have like active safety systems, which means you have to maintain them and they have to work. So like, if you want to like move the control rods back into the reactor, well, there's like a mechanism and a motor that does that that can fail. So that, you know, when you're calculating your risk, you have to calculate, oh, gosh, what if this motor fails? Or what if my control fails? Or what if I don't have a properly trained operator to do it?

• 2:00:03Speaker 01

  And it's the same for the cooling systems. But this new generation of plants, they have passive safety systems where like natural convection can cool the reactor in an emergency, or the rods are more like dead man switch where, you know, if something happens, they just drop in from gravity. And so the new power plants like this one that just got approved, or the one they're building down in Georgia, you know, can be orders of magnitude safer than the, than the running plants. And it's not really like a huge cost increase. You're just changing how you do these things. And in fact, like, if you look at all these, like, all the literature for them, they're actually supposed to be less complex and easier to build. But, you know, you're talking about a project that...

• 2:00:47Speaker 01

  It's so complicated. It takes thousands of workers, years and years to build, working every day.

• 2:00:54Speaker 01

  And it's like, if you're going to go through and do the engineering in great detail to prove that you're playing a safe under the probabilistic risk assessment, it's going to take hundreds of thousands of hours of engineering time. I mean, it's going to take a long time. And that's why you see, I mean, investors are willing to pay that at this point. It's just like, you know, after you build it because of, you know, the rank and cycle and all that, is it going to generate economic power? And, you know, it's not necessarily going to. I think, I think one way to think about this is my father-in-law, he always says, you know, when people ask him about why we're not doing more nuclear, he says, well, you got to think about the politics first and the economics second. And those are like the important ones.

• 2:01:38Speaker 01

  And so people are submitting designs and when to build plants that are big enough to impact lots of people's lives, even if that risk is very low, you know, some people still are bothered by that. But also they're selling an easily substitutable commodity in most cases. And so I think a lot of times on the political side, if you can substitute nuclear power, people will, even if it's coal or whatever, people don't really care that much about the emissions. Like they just care about their electricity turning on. And I think you see the, the opinion change very fast when nuclear power is no longer a substitute. Like all of a sudden, you know, Germany is like, well, we could turn our reactors back on or Japan, same way. You know, they've had these reactors off for years, but now that there's an energy crunch, they're like, whoa, let's turn them back on.

• 2:02:25Speaker 01

  So I think, I think the, the future for nuclear power, which would be a better future, is you create products that impact less people's lives or have the potential to impact less people's lives and also are not substitutable. And I think that means small reactors, like if you have a battery that can power your phone or you have like a little battery out in your garage that can power your house.

• 2:02:50Speaker 01

  The real, you know, these are hard to make. There's a lot of problems, especially on power density. Like, you know, the nuclear is very energy dense, but not necessarily power dense. So you have to do a lot of work on that to get there. But one of like the most exciting examples of recent nuclear technology is these people at some national labs and NASA got together and created this crusty reactor. It only to, it's like only one kilowatt. So it's small. You know, I think the thing weighs like 400 kilograms. It fits in the room. They got the whole project done in a couple of years for like less than $20 million. And it worked great. It's very safe just because partly because it's so small, but it has almost no moving parts.

• 2:03:31Speaker 01

  Like the whole thing is, you know, has like a strolling engine on top and that's like the only moving part. So it's really, um, you know, and there are several startups now that are working on improving that technology and commercializing it. So that's the kind of like nuclear stuff that, you know, why I talked about small nuclear, micro nuclear is really exciting to me.

• 2:03:54Speaker 01

  Because it has so much potential. And when you start putting nuclear in that small form factor, there's no other energy source that can compete with it on energy density. So you can do things you could never do before. Whereas like selling to the grid in a large power plant is like, well, I can do that lots of ways. And if you think, think through this lens and you see like the entire nuclear debate is, you know, the nuclear proponents trying to claim that nuclear is not substitutable and that we should pay more, accept the, accept the risk or, or whatever. And maybe we should. But it, it makes it hard to promote that technology. If you can have a phone that you never tried to charge, like people would love that. It'd be like, I don't care. It's nuclear. I just have a phone that,

• 2:04:39Speaker 01

  you know, never goes dead.

• 2:04:41Dwarkesh Patel?

  I guess the question is to what extent are those, um, is the lengthy and expensive process necessary for the probabilistic risk assessment? If there's like a way you could just have the process not be more streamlined and have the same, be as effective in evaluating the harm. And then I guess another thing is, if we haven't seen, it's like zero people or like very few people have like directly died from nuclear, right? So is it just that we've gotten lucky? Or like you're saying, that could have been like way more and we're just in a lucky timeline?

• 2:05:13Speaker 01

  I guess I'll go backwards a little bit here on answering those questions. So more so than I think what people are responding to is just because like Fukushima didn't have, you know, airborne radiation that was very dangerous, but people still got removed from their home, you know, and there's a lot of costs associated with that. And, you know, it's hard for me to believe that if we had a similar thing in the US that there wouldn't be, you know, some type of mandatory evacuations that were really unpleasant.

• 2:05:47Speaker 01

  And if you could, you know, get your power from coal or natural gas without that risk, I mean, a lot of people would make that trade off. And I think the other thing with Fukushima is, as I understand it, like they were able, because it was on the ocean with fast currents, they were able to use like a lot of seawater to keep the reactor from getting too out of control. But they were just like dumping, you know, a lot of the like radioactive stuff into the ocean, but it was dispersing quickly. It wasn't a big deal. So, you know, if you're on like a freshwater reservoir, like most nuclear, most US power plants are, like your risk equation might have been different there. I don't know enough about it to know if that really matters. But I think the main thing is because of precautionary principle,

• 2:06:32Speaker 01

  people are still going to get removed from their homes. And people don't like that.

• 2:06:39Speaker 01

  Let's see, making it fat, I mean, you can always streamline processes, but the thing is like people are submitting designs that are extremely complex. So whether your design is ultra safe or not safe at all, to do all the engineering to prove that costs about the same either way. So that's part of why these new plants are so much safer than the NRC standards.

• 2:07:02Speaker 01

  It's just not that hard to make them that much safer and a lot of your licensing is going to be, you know, you're going to spend the same engineering resources no matter what, based on your plant complexity. So the, you know, that's like the difference why Krusty was able to go through so fast. Well, you know, they went is, you know, their thing is very simple. It'll have very many moving parts. Like, there's only so many things that can go wrong with it. And so that, I think that's what's exciting to me about these other startups is they have the potential to get through faster with less money. And then there's real markets in like remote power, space, military, where people are willing to pay the premium for these initial models.

• 2:07:43Dwarkesh Patel?

  Okay, I see. Okay, so you're, so you're not bearish on nuclear or the future, given the new designs with passive, passive cooling and stuff like that. It was more like the old designs that you're pessimistic about. Is that correct?

• 2:07:56Speaker 01

  Yeah, I mean, like, if you look at like the, what the cost of electricity is going to be from that, you know, if they ever build the reactors that just got proven or just got approved, like, it's quite expensive. You know, I think usually it's around like forty, fifty dollars a megawatt hour, best case, but more likely it could be up to like eighty dollars a megawatt hour. So, you know, they're not building it, you know, in deregulated power markets. Because you, you know, you lose money. But there are places where it could make sense. You know, some places like in Europe have very expensive electricity.

• 2:08:31Dwarkesh Patel?

  And Japan and Singapore, and there's a lot of other places that are.

• 2:08:34Speaker 01

  Yeah, yeah, so there could be some markets in there, but, you know, that technology then still has to compete with those places building solar panels or, or, you know, all these other technologies that you could do. And, you know, then there's the whole argument, oh, well, nuclear can do this and that. But, you know, I think the, the people building the reactors clearly don't want to build them in deregulated power markets because it's not economic. You know, that's why I'm excited about the small because there's alternative markets other than selling this substitutable commodity that's very cheap.

• 2:09:07Dwarkesh Patel?

  Well, what is, have you talked to Eli about this or what is his opinion?

• 2:09:11Speaker 01

  Yeah, so Eli finds out about these like new startups that fit this bill and sends me the information on because he knows, he knows I'm excited about it.

• 2:09:21Speaker 01

  So I think, I think he's also, you know, he also like, of course, you know, his like specialty is like governmental affairs. So there's still, I'm sure there's still lots of opportunity to improve the process at NRC. Like recently, IMPO, which is like the industry group, that's very much like a German style industry group. It's very powerful. You know, their goal with NRC was like reduce the nuclear rules by like one third.

• 2:09:46Speaker 01

  And then you also have NRC writing new standards for like gen four reactors that caught, that's supposed to be done in a couple of years, but Congress instructed them to do it. So there's lots of opportunity to try to improve the process, but it, it's very complex. Like I'll give one example, the Browns Ferry accident. The main thing that came out of that was you can't have control cables for safety systems on redundant safety systems on the same cable tray. Because that cable tray catches on fire, you lose both systems. So it's very, very expensive to run extra cable trays and all this cable separation. And like, that's actually one of the problems that's like delaying Vogel and Georgia right now is they had like 500 issues of

• 2:10:30Speaker 01

  sharing the same, like safety systems, sharing the same cable tray. So they have to like, you know, build all new cable trays and clean out the mess of the stuff they already built and redo it. Super expensive. So NRC is like tried, they tried a pilot program where they did like a performance based safety on, you know, as opposed to like just the strict cable separation rule. And like, I think Ocony was one of the power plants that tried it and ended up being more expensive than just the simple rule. So the, you know, the reality is often very complex. And I think when you have these complex plants, like it's just hard to do.

• 2:11:08Speaker 01

  So it can always be improved, but you know, I think the small could end up greatly outcompeting the large because they have less complexity.

• 2:11:18Dwarkesh Patel?

  Yeah, you had a small section in that piece about fusion where you you're you're especially pessimistic about fusion. Uh, what is your what is your take on fusion?

• 2:11:27Speaker 01

  Oh, no, it's kind of the same thing. I'm not pessimistic about fusion. I'm pessimistic about fusion technologies that heat up water to make steam and run it through a steam turbine.

• 2:11:36Dwarkesh Patel?

  Because they're not efficient?

• 2:11:38Speaker 01

  It's just so expensive to do the like, literally like just pitting in like the steam turbine and the condenser and all that kind of stuff you need for that basically makes you uncompetitive at most on most deregulated power markets.

• 2:11:53Dwarkesh Patel?

  Yeah, so I mean, there are startups who have plans to do direct energy conversion. I don't know how feasible those plans are, but yeah, like presumably you think those are in those cases, you think fusion and could have a big future?

• 2:12:06Speaker 01

  Yeah, yeah, I again, I like, I don't know too much about the same as you. I don't know too much about their specific technology, but if you're pursuing a direct conversion technology, it's just you're you actually have a chance of success, you know? I think a lot of people I've talked to in like the fusion space, they're like, well, I can make, you know, electricity for $50 a megawatt hour and because I'm fusion, people should pay me $50. And it's like, well, not everyone may want to pay you $50.

• 2:12:34Dwarkesh Patel?

  Yeah, yeah. I mean, it might involve an initial period of like large subsidy that we had to give electric electric vehicles and even solar. I like we had to give huge subsidies to solar in the beginning when we were at the beginning of the learning curve. So that might be necessary, though.

• 2:12:49Speaker 01

  Yeah, I mean, I really disagree with like the subsidy solars had actually. And and I think it just like if you actually look at the numbers, it proves the point like the people say like, oh, because Germany did the feed in tariffs that like made solar cheap. So if you had a country that's 1% of the population, they spent like a tiny portion of their GDP. And that was enough to scale the technology. Well, you should just let some other fool do that, you know, reap the benefits. So I would be supportive of taking away most of the subsidies for energy in general.

• 2:13:21Dwarkesh Patel?

  Just to make sure I understood that argument, you're saying that like it's unlikely that the small subsidies that Germany gave were enough to actually make the difference?

• 2:13:29Speaker 01

  Well, I'm just saying if you if they were, if it took such a small amount of subsidy to do it, like someone will be foolish enough to do that. You know, in this case, it was Germany. They spent a lot of money doing that. That was, you know, they're not reaping the benefit from.

• 2:13:42Dwarkesh Patel?

  Yeah, it's not compatible with their environment. So and their climate. I mean, yeah.

• 2:13:47Speaker 01

  So, I mean, we benefited from them doing that. We didn't have to, you know, we still do spend some subsidies on solar. And I think they're very like poorly designed. So I would be better just to get rid of them. But but but the thing with fusion, if you're just heating up, heating up water to make steam, is that technology, there's no learning curve for anymore for steam engines, basically, because, you know, that technology is so mature. I mean, now, so that's why some people are looking at like super critical CO2 cycles is because well, maybe this could be a little cheaper than doing steam turbines. That's that's some possibility there. But it's and there's some other technologies that maybe someday you have like thermo electric generators and stuff like that. But I think the direct

• 2:14:31Speaker 01

  conversion technologies have just a massive advantage, not only in initial cost, but in ongoing operating costs.

• 2:14:39Dwarkesh Patel?

  Okay, okay. There's one more topic I really want to talk about, which was, yeah, you have this interesting post on where you can actually expect to find alpha, given that at least public markets are efficient. I do you want to like, explain the basic thesis of that post before I ask you specific questions about it?

• 2:14:58Speaker 01

  Yeah, if I was going to like, down that post down, like, I love Fama's original paper, where he lays out this efficient market hypothesis thesis. And, you know, he's like, there's multiple types of information. And so the first is, you know, if you just have like pricing data for stocks or whatever securities, like, you can be the smartest person in the world, and you're not going to make any money doing that because it's just like random. But the if you start incorporating more information, like what's in 10 Ks and all that, like, if you're like, super, super smart, you might be able to make a little bit of money there. And you know, we see that with people like Renaissance Technologies. And you can debate about, you know, Warren Buffett and all that.

• 2:15:42Speaker 01

  But then there's the third category, which is like the strong type information. And it's basically you have legally acquired private information. And the, you know, you can make money that way and be significantly less smart. So if you, if you want to like, just take Fama's paper and like, how do I make money? It's like, okay, well, I should find legal ways to acquire, you know, this information. And then I don't have to be, you know, a super genius to make money on it.

• 2:16:11Dwarkesh Patel?

  Yeah, what I thought was really interesting in your post was you had this point about how one of the ways you can actually earn excess returns is through like labor, right? Like Buffett, in the early years, at least, he would like go into these factories or companies and like interrogate every single piece of operations and whatever. And I thought that was an interesting twist on Piketty's thesis. So I don't know if you've seen his stuff, but he has this claim that well, not only does capital earn more than, the gains to capital are higher than the gains to labor. But the more capital you have, the higher returns you can earn. Like I guess Harvard has access to hedge funds that may be able to earn like excess returns.

• 2:16:54Dwarkesh Patel?

  I thought yours was like an interesting, basically if you take this view, it's basically the inversion of Piketty because like over time, as Buffett has gotten wealthier, his returns have gone down because it's harder to like invest the marginal dollar more effectively. And as you said, with the medallion fund, yeah, they no longer accept outside money. And, and then the interesting thing about labor is like, the reason that Buffett was able to earn those excess returns in the beginning was because of the labor he put in, right? So the interesting thing is like capital is just fungible with other capital. So capital doesn't enjoy as high returns as like really good labor, really smart labor, which is like the opposite of the Piketty thesis.

• 2:17:33Speaker 01

  And I think there was actually a paper, I think it was on marginal revolution a couple of years back. So I'm pulling from my memory here, so I could be missing a little bit, but basically it studied like all these businesses and what happened to the business after like a founder unexpectedly died and like the profit just like, you know, and it looks like on, you know, these are capital returns. So it's like many people would see them, but then the, you know, the earnings just like drop like a rock like because they lost some irreplaceable human capital there. And, you know, they didn't spend any time training them because they died unexpectedly.

• 2:18:10Dwarkesh Patel?

  Right. Which also has an interesting implication for CEO pay, which suggests that actually like, okay, in the Marxist sense, what is pay? It's like your pay is what it costs to replace you, right? And if it, if the, if Steve Jobs is so irreplaceable that, you know, if he goes away, like earnings are going to drop like a rock and like a rock and its stock price are going to drop like a rock. Actually, that means that he should get paid like if that's how expensive it is to replace him. He may be like irreplaceable, right? So it's actually worth whatever like dozens of millions of dollars you're paying him.

• 2:18:43Speaker 01

  Yeah, yeah, I'm generally a proponent for letting the market decide that.

• 2:18:49Dwarkesh Patel?

  Yeah. Okay. And then another way you suggested that maybe firms could earn excess returns is like by developing a unique brand, right? So like Y Combinator is probably able to earn excess returns to normal venture capitalists because of their unique brand. Yeah, I thought that was really interesting. Do you want to talk more about that?

• 2:19:06Speaker 01

  I think it's just like a lot of this intangible capital and labor are complements for regular capital. And, you know, I think you can see it too. Like, you know, you, if you build a brand around that you're a good investor, like you can raise money from other people and charge the money on it, you know, more so than if you're just like a no name. So I think there's lots of examples of that where building a brand or building relationships is extremely valuable and can, just like specific knowledge can, can juice your, your returns. I mean, it's like a type of specific knowledge.

• 2:19:45Dwarkesh Patel?

  Well, what do you mean it's specific knowledge?

• 2:19:48Speaker 01

  Well, I mean, to build a brand like Y Combinator, you have to like, understand what tech founders want. So they, they, you know, use that knowledge to create, you know, a place that's great to do, go do your startup.

• 2:20:02Dwarkesh Patel?

  Yeah, yeah, yeah, interesting. Is the market for blogging efficient? So now there's actually a financial rewards to blogging, you know, the effective ideas blog prize. There's other kinds of grants like this, you know, recently open for a contest of you suggest a cause area. I had to have like, you know, there's many prizes where like, if you're good, it seems like if you're pretty really good at blogging, you could like earn six figures, it seems, given like the regularity and size of these prizes. Yeah. So is this a market that we should expect to be efficient?

• 2:20:34Speaker 01

  I think it would be hard to measure, like, given my own experience, like I'm blogging for free. But the benefits I've gotten from learning about what I'm blogging about and then like a few connections I've made, but then helped me like with what I'm, my projects I'm working on, you know, like there's like huge returns could, and it could be, you know, like if my project's successful, like it'd be just like almost immeasurable. So yeah, I would guess it's very hard to measure and probably inefficient that more people could blog, because it's hard to predict the returns to what your blogging might have. But I guess if you're going to do these blog prizes, I don't know if the blog prize, you know, because the blog prizes are about specific topics, I don't know if that, how much that helps the efficiency there.

• 2:21:20Dwarkesh Patel?

  Yeah, yeah. Let's take that part of it out. Let's just talk about the factor you mentioned, which is that you can, this is a regular thing you hear from people who write online, which is that the gains they get are huge, and that's also the case in my case. And so it's kind of interesting, I guess efficient markets doesn't like, just because the stock market is efficient, doesn't mean that everybody will put their money into the stock market, right? That's not the implication. So i- i- it's very possible that you have irrational actors who are not like invested in or like writing. But then the question is, given that you write something that's high quality, will it get noticed by the market? Like, will it get the attention and broadcasting that it is? And in my experience, actually, like, I guess this was the case, you mentioned that your, some of your first posts ended up on Hacker News, right? So in that sense, that market was efficient.

• 2:22:06Dwarkesh Patel?

  But yeah, it seems to me that when somebody finds a good blogger, they, it's not hard for their initial post or like at least their subsequent post as they get better to gain an audience.

• 2:22:18Speaker 01

  Yeah, I do think, I do think that, and you know, I don't know what the, what the counterfactual is, you know, we don't know about the people that didn't be, you know, didn't have posts go to Hacker News. So like, it could have easily been, I mean, I think that what the alternative for me is I just would have blogged way less, you know, if, if one of those early posts hadn't, hadn't gotten more attention. So yeah, it's hard to know what the counterfactual is, how many people have just like abandoned blogs that did like three posts and they would have written one more, maybe it would have, it would have been better.

• 2:22:50Dwarkesh Patel?

  Yeah, yeah. Okay, Austin, this has been a lot of fun. Thank you so much for, I think we're two hours over at this point, so thank you so much for your time.

• 2:22:59Speaker 01

  All right, thank you.

• 2:23:00Dwarkesh Patel?

  I don't know if you have any other like other final thoughts or any other subjects that we should hit on or?

• 2:23:06Speaker 01

  No, you know, I think, I think we've covered everything.

• 2:23:08Dwarkesh Patel?

  Okay, cool, cool, awesome. And then just, people can find you at austinvernon.

• 2:23:15Speaker 01

  Dot site.

• 2:23:16Dwarkesh Patel?

  Okay, austinvernon dot site. And then your Twitter is?

• 2:23:20Speaker 01

  I think it's Vernon3Austin.

• 2:23:22Dwarkesh Patel?

  Okay, and it'll also be on the show description, but yeah. All right, yeah, thanks so much for coming on, man. This was a lot of fun.

• 2:23:28Speaker 01

  All right, thank you.