Sonnet 5 Drops, Fable 5 Will Return & Fusion's First Plant Gets Licensed w/ Philip Johnston | #268

In this episode, the mates discuss the Sonnet 5 drop, China’s cheaper humanoid robot, Fable 5 coming back online, and Starcloud CEO Philip Johnston joins to discuss data centers. Get access to metatrends 10+ years before anyone else - https://qr.diamandis.com/metatrends Peter H. Diamandis, MD, is the Founder of XPRIZE, Singularity University, ZeroG, and A360 Philip Johnston is the CEO of Starcloud Salim Ismail is the founder of Open ExO, a GP at Exponential Venture Capital/The Organizational Singularity Fund and a sought after global speaker and thought leader. Dave Blundin is the founder & GP of Link Ventures Dr. Alexander Wissner-Gross is a computer scientist and founder of Reified – My companies: Apply to Dave's and my new fund:https://qr.diamandis.com/linkventureslanding Go to Blitzy to book a free demo and start building today: https://qr.diamandis.com/blitzy Your body is incredibly good at hiding disease. Schedule a call with Fountain Life to add healthy decades to your life, and to learn more about their Memberships: https://www.fountainlife.com/peter _ Connect with Philip X Linkedin Website Connect with Peter: X Instagram Substack Website Xprize A360 Connect with Dave: Web X LinkedIn Instagram TikTok Connect with Salim: LinkedIn X Apply for Salim’s Pilot Program Subscribe to Salim’s YouTube channel Exponential Venture Capital Connect with Alex Website LinkedIn X Email Substack Spotify Threads Listen to MOONSHOTS: Apple YouTube – *Recorded on June 30th, 2026 *The views expressed by me and all guests are personal opinions and do not constitute Financial, Medical, or Legal advice. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:00Speaker 00

  It's pretty clear that Sonnet 5 now is a way to kind of fill this gap until Fable 5 is back out. A kind of mediocre capability at a high price point, but people will still need to buy it.

• 0:10Speaker 01

  Anthropic's flagship model, Fable 5, has been offline for 15 days because the US government pulled it. Now Axios reports it may be back within days.

• 0:18Speaker 02

  Historians will look back and say, "This period in time marked the period towards the middle or the end game of recursive self-improvement."

• 0:27Speaker 01

  Helion cleared the required Washington State regulatory approvals for its Orion fusion power plant. It looks like fusion is finally here.

• 0:38Speaker 02

  If you were watching the right metric or the right figure of merit over the long term, you could predict when this is going to happen, and it's imminent.

• 0:45Speaker 01

  All right, mates, let's jump into data centers and space. And for that, we're pleased to bring a friend on. Thanks so much for having me. It's a huge honor. I've been a longtime fan.

• 0:58Speaker 02

  Now that's a moonshot, ladies and gentlemen.

• 1:03Speaker 01

  Welcome back to Moonshots, everyone. Your front row seat to the coming Singularity in the Age of Abundance. I'm here with my magnificent moonshot mates, Dave Blunden, our managing partner of Link Exponential Ventures, the number one funder of MIT and Harvard AI startups. Saleem Missmael, our global trotter, our CEO of OpenEXO, and of course, AWG, our in-house ASI. I'm Peter Diamandis, your host and your abundance evangelist. Gentlemen, good afternoon, good morning, good evening, wherever you are. So, you know, where's Waldo today, Saleem? Where on the planet are you and where have you been?

• 1:38Speaker 03

  We dropped our sun off at a camp in San Sebastian in Spain or near there, and I'm in Biarritz right now for a few days.

• 1:47Speaker 01

  Okay, and you were like in Germany before that?

• 1:51Speaker 03

  I've been in five countries in the last three days. It's really been nuts.

• 1:57Speaker 01

  Of course, of course. And Alex, all well with you? Yeah, I'm GDP maxing, or doing my best. Always be GDP maxing. I'm happiness maxing, gratitude maxing. And Dave? Good to see you, pal.

• 2:09Speaker 00

  Hi, I'm at Ling Studio. And just for, word for the wise, we have a ton of Northeastern and Princeton activity in addition to MIT and Harvard.

• 2:17Speaker 01

  That's true, of course.

• 2:18Speaker 00

  Yeah, TechTrek is killing it out in San Francisco, Lipputan, Andrew Feldman, the number two guy at Nvidia, they were all there on Friday, talking to the troops. So it's really rolling.

• 2:31Speaker 01

  Amazing.

• 2:32Speaker 00

  This is the thing we did with Eric Schmidt, and Eric Brinjolfson, and Daniel LaRusse.

• 2:36Speaker 01

  So today, we're going to cover a bunch of new stories. So we're going to catch up on robotics, energy, data centers. We've got 20 stories across six fronts. A lot's happening, and a lot of capital is flowing. For those of you joining us for the first time, our mission here at Moonshots, keep you informed, keep you optimistic about the future that we're creating. All right, let's jump in. I have three stories I want to hit on the abundance front.

• 2:59Speaker 03

  Wait, wait, I just got to make a quick point. To everybody watching, if you've not seen the last episode with Iman, I'm about three quarters of the way, because it's on I'm, we're trying to keep up with our own episodes when I miss one. And it was ridiculously amazing. So just a comment there.

• 3:14Speaker 01

  Yeah, and Iman's made some great releases in the last 48 hours on his latest model combinations. All right. I was going to open our first story on robotics, but before we do, because I want to talk about the predictions of how many robots we're going to have on planet Earth. I was having a conversation with a dear friend, Ramesh Nam today. Ramesh is one of the earliest Singularity University faculty members in Futurist. He's extraordinary. And he shared this chart with me, guys, that I'd love to discuss. It's a look at how experts consistently underestimate exponential growth. So in this chart on the left here, we see new solar, you know, growth in solar.

• 3:58Speaker 01

  And that that yellow exponential line is the actual growth in solar. It's been growing at an extraordinary rate. And what we see on these departures that go horizontal are the predictions that the experts make every year showing, you know, linear or, you know, just small incremental amount of growth. And over and over again, they underestimate it. The chart in the center there is the experts' predictions on EV growth. And again, we see exponential growth in EVs, and then the forecasts consistently are underestimating the actual growth. And then finally, we see the same chart going on in in battery sales. So it's an interesting phenomenon that while we're living in this exponential growth, the

• 4:43Speaker 01

  experts, who are the experts in the way things used to be, are not projecting the growth. They're saying very, you know, shall we say, sublinear in their in their estimates. So, Saleem, you and I have seen this before, and we've discussed this. Any thoughts?

• 5:02Speaker 03

  Oh, my God. Every presentation I ever give has a segment with several slides showing this, right? The poster child is a story about Moore's Law ending by 2022, which came out in 2013, some experts had. And you can go back and look at the technology press, and every two years, that article is appearing for 60 years, right? Because experts are really good at measuring the technology. They're terrible at the combined ecosystem around it. There's some really dramatic examples of from Romez around the energy ones, where the solar is vertical and every expert for 10 years goes horizontal in that in that thing. It's a it's an endemic problem.

• 5:43Speaker 03

  We have that whole headline in the original book, Peter, which we put together, saying, beware the experts, right? And this is the immune system, because when you've got somebody that's got 30 years of experience in something, they'll tell you how not to do something.

• 5:58Speaker 01

  Yeah, agreed. Alex, any thoughts on this particular note?

• 6:03Speaker 02

  I think the moral of the story is you should always take the logarithm of the actual history before you hand it to experts for their linear extrapolations, so you can get the right answer out.

• 6:13Speaker 01

  You know, I define an expert as someone. So geeky cute. I define an expert as someone who can tell you exactly how it can't happen. Right. And it's so true that experts today are sort of so ingrained in the past because if there's a disruption, if there's a revolution that comes, then longer the expert. And so it's just, it's against their best interests. So I want to tie this story to our first robotics story here. And it comes with two predictions. The first was Morgan Stanley. Morgan Stanley had originally predicted 14,000 Chinese robots coming out of China. And they've upped it to 26. Now they've just upped it to 50,000 and projecting 500,000 robots by 2030.

• 6:56Speaker 01

  But the fact of the matter is there's 140 humanoid robot companies developing hardware in China today. And at the same time, you've got Elon projecting, you know, tens of millions of robots to 50 million robots by 20, by 2030 and billions going into the early 2030s. On the flip side, what we're seeing here is, on the right-hand side of this, is a chart from Andreessen Horowitz that shows we're going to be seeing about $16 billion of hardware investments in Q1 of 2026. And the US is finally catching up. Alex, I know that you're heavily committed to this.

• 7:38Speaker 01

  And Dave, your thesis is we're moving from an AI-centric entrepreneurial ecosystem to a hardware-centric ecosystem. Would love your thoughts on this. Alex, you first.

• 7:48Speaker 02

  Yeah, as I've mentioned on the pod in the past, I think superintelligence is set to spill out of the data centers into the streets. And I think the most obvious vehicle for that is autonomous vehicles on the one hand, and humanoid and near-humanoid robots on the other. I think as we start to increase the number of humanoid or just say, general-purpose robots per capita. There are going to be certain regimes at the low number of humanoid robots per capita regime. It looks like robots performing industrial applications, robots in factories, robots doing logistics. At the, as we start to get, I think, closer to approximately one humanoid robot per

• 8:33Speaker 02

  capita, it looks like domestic robots everywhere. It looks like an iRobot style regime where everyone has domestic staff. As we start, interestingly, and a point that I don't think I hear frequently enough, as we start to push well through the approximately one humanoid robot per capita regime to 10 or 100 humanoid robots per capita, at that point, I think, to a hobby horse, I think of Saleem, we start to end up in some pretty exotic futures where there's no longer necessarily justification for the humanoid form. We end up with micro robots and nano robots.

• 9:13Speaker 02

  And there is sort of a natural sense in which the humanoid form is no longer natural in a world where we have 1,000 general purpose robots per capita and we can start solving all of the grand physical world challenges that would maybe be uneconomical if we only had one humanoid robot per capita. So I think we're going to very rapidly scale through the low per capita regime to the approximately one per capita regime to the many per capita regime. It's going to be a very exciting scale.

• 9:41Speaker 01

  So David, take a second and walk me through your thesis right now because we've been investing together in AI companies mostly. And you've said that you expect that is going to sort of fall off and more of an investment to hardware in the next couple of years. Why?

• 9:57Speaker 00

  Yeah, I think we have to think in terms of 10-year investment themes and, you know, 10 years in the age of AI is like 100 years in any normal world. And so I do think the next one and two years is still dominated by white collar automation, AI algorithms, chip design, AI that designs chips, the beginnings of data centers in space. But then if you think beyond two years in the future, you know, what are the investments that are going to really be big 3, 4, 5, 8, 10 years from now?

• 10:25Speaker 00

  The automation of construction of data centers is all going to be robotic. Biotech, chemical mixing, experiments, reading gels, that's all going to be robotic. And so the machines that do that, you take a guess, you know, how big do you think the US gutter cleaning industry is? People who go on your roof and pick the leaves out of your gutter. How much do we spend for a year? I do, I looked it up.

• 10:46Speaker 01

  How big?

• 10:47Speaker 00

  That use case alone is a billion dollars a year. If you built a robot that cleaned gutters and washed windows, those two tasks, that's a $20 billion global market. $20 billion global market. So that's a theme that will support, this slide says 140 humanoid robotics companies.

• 11:04Speaker 01

  In China, in China.

• 11:06Speaker 00

  In China.

• 11:07Speaker 01

  Yeah.

• 11:08Speaker 00

  There's room for thousands and tens of thousands of robotics companies specialized for various use cases. Everything from wafer movement inside a chip fab, to chemical mixing and biotech, to gutter cleaning, to just everything, you know, construction, construction has thousands of individual tasks. So it's a very broad, long-term investment theme. Kitchen work too, we're already starting to invest in that one. But kitchen work automation, because the fast food restaurants can buy at scale, and so they'll co-develop with you.

• 11:38Speaker 01

  This is where Travis Kletnik is focused with his company Adams, just fully roboticized kitchens. You know, what's interesting is this particular note of the 16.5 billion in last quarter was in 500 deals. I used to think that, you know, I'm a huge Star Trek fan, I used to think that Star Wars was kind of silly with all those, you know, hundreds of variations of droids out there, but it looks like it's coming.

• 12:01Speaker 02

  Peter, it's such an interesting point, you know, I'd be curious to hear your thoughts on this. Historically, the robots have been missing from Star Trek. Other than in the first few series, like Sung-type data robots, there were no robots. Maybe it was, what are your thoughts on that?

• 12:17Speaker 01

  I think they wanted to create a very humanistic series, and, you know, Gene Roddenberry was all about the societal implications of technology in this future. And he, and even, even Computer, right, even Computer was the name of the computer, which was Gene Roddenberry's wife Christine playing that role.

• 12:40Speaker 02

  Or Al Cars, right?

• 12:42Speaker 01

  Was very, you know, roboticized. It didn't predict this, you know, incredible empathic voices we have on our models today. Yeah, they missed that. Well, you know, we're gonna have Rod Roddenberry is gonna be with us at the Moonshot Summit. He's gonna be on stage, one of the judges of our Future Vision X Prize. So, we'll sit down and ask him. I think those are, those are important questions to ask. Why did they miss that part of the future?

• 13:06Speaker 02

  Was it just like low production budget? Because they added them in more recent Star Trek series.

• 13:10Speaker 01

  Yeah.

• 13:10Speaker 02

  They retconbed them.

• 13:11Speaker 01

  But, but still, nothing close to Star Wars. And, you know,

• 13:15Speaker 03

  You know, I think a lot of it had to do with the theme, right? Infinite diversity, infinite creativity. And they were focused very much on human interaction, all the aliens that were humanoid. Not just because you could put actors in those suits, but the fact that you were always dealing with the interpersonal elements in those, in the, in the plotlines of those.

• 13:36Speaker 01

  So, yeah, we've got lots of companies that are building robots now. Famously, in the US, we've got obviously Tesla with Optimus, we have Figure, we have One X. And in China, probably the robot company that's got the most, you sort of publicity, has been Unitree. We had one of the founders of Unitree on stage with us at the Abundance Summit. I want to play their latest video. It's got 11 million views. And this is a glance at the R1, which is incredibly selling for 4,900 bucks. I mean, this is the price of a cheap, used car, which

• 14:14Speaker 01

  is saying a lot. So, let's take a look at, at the R1. So, I mean, it's crazy. You know, my point is, it's an extremely capable robot, but the work here is gonna be on the software layers, right? You buy this robot. I don't think it does that out of the box, but I think you could probably buy the algorithms that enable you to do that. But I see an explosion in the number of people experimenting with these robots.

• 14:57Speaker 01

  At 5,000 bucks, that's affordable by, you know, almost anybody who has a reasonable income.

• 15:05Speaker 00

  All right. Alex, where does this go for you?

• 15:07Speaker 02

  Well, I think the elephant in this particular room, as with Elon demonstrating to the world that you could drive the cost of heavy lift to Leo down to effectively near zero through reusable propulsively landing rockets, the elephant in the room here, I think, is humanoid robots that are able to assemble other humanoid robots. If we take the cost of assembly down to near zero, what we're left is the cost of raw materials and the cost of energy, and that's going to be effectively de minimis. So I think as we drive, and by we in this case, I really mean Chinese organizations, because the West is woefully behind at the moment, as we as humanity start to drive

• 15:51Speaker 02

  the unit cost of general purpose robotic embodiments down to near zero, at some point we will need to cross the threshold of robots being able to assemble other robots in order to keep driving that cost down. And then, at that point, we have physical labor too cheap to meter. And as I pointed out in past, approximately two thirds of the service economy constitutes some sort of physical labor, and we can do for the physical world what AI agents are right now in the process of doing to knowledge work, which is basically driving the cost of knowledge work and soon physical work down to near zero.

• 16:29Speaker 00

  Can I make a point, actually, that we learned at the at the Gigafactory that I completely think is, it was lost on me, and I think it's critically important, is when Elon says humanoid robots building humanoid robots, it's actually the CNC milling machine or the auto lathe already exists. It's already making the parts. It's just a file loaded in. What those were designed for is a human to go and take the part out of the machine and put it in the next machine. And so the humanoid robot does not need to literally create, you know, with a file and a piece of metal, you know, the automation's already there. It just needs to do the part that the human is doing today, which is moving the part from machine to machine and doing the final assembly. So it's a much easier problem than than robots making robots sounds like.

• 17:14Speaker 01

  Yeah, I think the point I want to make here is we're heading towards commodity pricing on these things, 4,900 bucks, right? And so as we move to commodity pricing, the question is where's the value layer?

• 17:25Speaker 03

  Well, the value layer clearly will be in the software and the applications.

• 17:29Speaker 01

  Yeah, exactly. The point I want to make.

• 17:31Speaker 03

  Yeah, I think that's a really important point. And people are going to build apps. Look, if you go back to the original personal computers, you put them out there and people kind of like, we didn't know what they would do with them. And then over time, you had more and more applications built. Now these things show up, networked out of the box. There'll be profound new skills being emerging all the time from these things. I think it's going to take, I'm still going to say, I think it's going to take a lot longer than people think because the driving, it took us 20 years, and that's a very bounded domain space. Humanoid robots doing gardening, et cetera, there's a million edge cases. And I think there's a lot more to explore there.

• 18:06Speaker 01

  What's different here is that, you know, and this is sort of a, what does it mean for the entrepreneur out there? You can buy this and begin to build on top of it.

• 18:16Speaker 03

  Agreed.

• 18:17Speaker 01

  This is not something that requires permission from anybody. It's not something that requires a massive corporate budget. An entrepreneur can buy this for 4,800 bucks. It's like the Raspberry Pi moment. And you can start hacking and publishing software to these robots that becomes a new revenue engine. So I think that's what's most interesting for me, is the explosion of applications that come on top of the iPhone, that now come on top of these robots.

• 18:45Speaker 03

  I agree, but I still think we're going to spend a lot more time figuring out the industrial use cases and the dull, dirty, dangerous jobs and getting those automated. There's so much scope, it's going to take a decade to kind of get through that before we can get to somebody coming over and doing gardening for you.

• 19:01Speaker 02

  You know, we talked in a past pod about Royal We. I mentioned the idea that the export controls that we're seeing at the moment imposed on frontier models are, in some sense, you could look at them through the lens of immigration policy as being regulations on importing foreign or exporting, depending on your perspective, superintelligence. But that's the software layer. I do think, so admittedly, maybe a spicier take here, I think that as the cost of robotic embodiments, primarily from China at the moment, starts to come down, I would not be surprised to see similar Either import controls or other national security motivated restrictions start to

• 19:44Speaker 02

  kick in. It's not just about dumping. It's also about taking the embodiments for superintelligence and moving them across borders.

• 19:51Speaker 04

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• 20:55Speaker 01

  Well, you've heard the Trump administration saying they want to invest in the robotics industry. We've seen, you know, obviously Tesla and Brett Adcock from Figure getting massive investments to support the growth of these systems. It becomes strategic for the US, and we're going to find out in our next story. Let me just, let me just go there for a second, where we're going to start to see robots being used in a number of different areas, including law enforcement. So a drone, of course, is a robot, and I'm going to share a particular video here that Alex, you shared with me. This is out of Orlando, and this

• 21:37Speaker 01

  is the US law enforcement beginning to use drones as first responders. Let's take a listen to this video.

• 21:46Speaker 05

  And new at noon, the Orlando Police Department is now using drones as first responders, sending them to some 911 calls to give officers a live look at the scene. A new eye in the sky now responding to some of Orlando's most serious calls. Orlando Police Chief Eric Smith addressing a big question from the community. What would you say to the citizens who either are seeing this as an invasion of privacy or an overstep?

• 22:10Speaker 06

  We're not looking in people's windows, we're not spying on people, we're not just flying around, just fly around.

• 22:14Speaker 05

  Qualifying call comes in, a nearby drone can be dispatched to specific GPS coordinates. Then from the crime center, an FAA certified pilot can control the drone, giving officers a live view of the scene, including if a suspect runs, hides, or possibly has a weapon.

• 22:30Speaker 01

  So, interestingly enough, this was demonstrated on June 17th as a first deployment. It had what they call nine docks at different locations and 11 Skydio network drones. Skydio is sort of the US manufacturer today. It, you know, used to be DJI out of China, but we put, you know, import controls on DJI for a number of security reasons. And so Skydio, even though it's more expensive, it's something like three to ten times more expensive than the DJI drones are getting it. Interestingly enough, Salim, Rick Smith, who's one of my Abundance members, he's the CEO of Axon, it's the company that makes the TASER and the body cams, has the contract

• 23:15Speaker 01

  here and they're coordinating all this. They did a trial with a single drone and it beat patrol officers about a third of the time to get to the live location and provided useful information in 97% of the time, they claim. But you can imagine that we're going to have drones on buildings throughout the city and a drone will get there almost immediately. You know, I can imagine there's fear that people have on this subject, but I think being able to get to emergency locations, making sure you can assess situation, when you need to have medical personnel there, it's going to save lives. And I want to acknowledge the fear that people have, but I think on the whole, as

• 23:59Speaker 01

  long as you have good policy and good governance about how the data is retained or used, who gets access, I think this is an important step for law enforcement.

• 24:08Speaker 03

  It's huge. And you know, we did our very second sprint back in 2015 with Interproteccion, which is the largest insurance company in Mexico, 30 million users. And they actually deployed drones because they were so much faster than ambulances getting to an accident scene. And they would scan and map the whole area so that you, before people move the cars and everything like that. So they had full information before anything happened. It was kind of an amazing experience. So we've seen this trend over a long period of time. I think we can expect to see this accelerate pretty radically just because of the practicality of it.

• 24:45Speaker 02

  If I might add, there are regimes, as the cost of robotic embodiment trends towards near zero, becomes too cheap to meter, that we in the West are unaccustomed to, but that China, for a variety of reasons, including demographics, has seen for a number of years. For example, this is well-publicized, the Chinese Communist Party maintains members, officers, on a per-block basis. Certainly, this was the case during the pandemic in China. The West doesn't really have any concept of this. If you look at how first responders are geographically distributed in the US, it's on a per-municipality basis or precincts.

• 25:26Speaker 02

  There's no notion of, say, one or more officers per block that are just permanently stationed on a single block. But with drones, this becomes possible. We could have literally drones as densely distributed geographically as fire hydrants are. And you could literally just, if there's a problem in a block or a part of a block, just remotely activate the drone, and then you have an instant point of presence.

• 25:51Speaker 01

  Let me share the second story. It comes out of Sacramento. There was a suspect who had a knife, and they deployed a drone with a magnet to grab the knife and make the scene safe for the police to enter. Let's take a look at this.

• 26:13Speaker 01

  So here we see the drone going, the guy is holding a knife. A magnet or electromagnet has attached the knife and it pulls it out of the guy's hand as he's apparently sleeping. So, um, this is interesting. This is a drone that's disarming somebody. If you guys remember during the Abundance Summit, um, Rick Smith, again with Axon, uh, showed us his taser-equipped drone, uh, and I went on stage wearing a suit, uh, to protect me and he tased me from his drone. So I, I think this is coming, uh, this use of drones in law enforcement for both observing and for trying to de-escalate a situation. Uh, the drone market right now is about a hundred billion dollars around the world.

• 26:58Speaker 01

  It's going to be increasing. We're seeing drones being used, uh, obviously in the Ukraine, very famously Eric Schmidt's been funding a drone company, uh, to help the Ukrainians in their fight for independence. Uh, Dave, any thoughts from you?

• 27:13Speaker 00

  Yeah, you know, Scientific American did a, a great, uh, research study on why crime rates are down by half in the U.S. and they keep coming down and it was entirely connected to deployment of first responders in the right place at the right time, largely driven by GPS. Uh, but now with the drone footage, you can get much more accurate. You know, the, the first responders want to be there and they want to help, but getting the right people to the right place at the right time. But I'm a huge believer that the video footage is going to be massively impactful and the, the resolution just keeps going up and up and up and up. You know, the physical side of it where you're disarming somebody is, that's a little ways out. You know, that was kind of a, like, you can't see that.

• 27:51Speaker 01

  Very niche case.

• 27:52Speaker 00

  Yeah, very niche case. But the video side is like right here, right now. And as Alex was saying, you could easily, cheaply have as abundant a fleet as there are fire hydrants. That would cost next to nothing.

• 28:04Speaker 01

  Yeah.

• 28:04Speaker 00

  So that's, that's imminent.

• 28:06Speaker 02

  I'll also point out, if I may, this was all foretold by Minority Report. You remember the scene in Minority Report with the police officers deploying spiders to search an apartment complex for Tom Cruise's character? We're starting to catch up with that now. And yeah, right now, it starts with a couple of police precincts in the US. They're using drones for first response. My understanding is far more frequently in China right now than the US or the West in general are. But project forward a few years, when there are a variety of new form factors, maybe we get spiders, maybe we get drones. I have to imagine the drone, the flying form factor is a good deal more versatile for interacting with hostile scenarios.

• 28:49Speaker 02

  These are going to get smaller and cheaper and more plentiful. We haven't even seen what happens in the West from a first response perspective when police can deploy swarms of drones rather than just individual drones. But as cost goes down, we will absolutely see swarms.

• 29:03Speaker 01

  Yeah, I mean, again, I think the public is going to have a bit of a fearful reaction to this. It really depends what the drones are armed with. It depends, you know, what the drones, the guidelines on the use of drones are, and we need to address that. I mean, getting medical equipment to a site of an accident rapidly, you know, we're going to see EV tolls, flying cars, delivering ambulance personnel there. But getting a defibrillator, for example, to a location that's jammed by traffic, drones are going to play an important part of this, and they're getting better and better. Salim, you going to say?

• 29:40Speaker 03

  I just remember the counterpoint here. There was a fellow from the Dutch police force at one of our Singularity executive programs, and they were combating the fact that drug dealers were using drones. So they trained a bunch of hawks to drop mesh wires onto the drones to wrap them and tangle them. It's like so retro to be training up birds to be attacking drones. It was totally surreal.

• 30:07Speaker 00

  There's actually a real problem below a certain size.

• 30:11Speaker 00

  There are a lot of birds that go after these things. So the really small ones actually have a little bit of a problem in.

• 30:17Speaker 03

  In the Ukraine, they're having, they're having a huge problem because they've got strands of optical fiber from all of the drones that have attacked them lying everywhere.

• 30:24Speaker 00

  Oh, yeah.

• 30:25Speaker 03

  It's a massive issue.

• 30:27Speaker 01

  Well, I'll tell you, the number one use of drones I'm excited about came from the wildfire X Prize I talked about in the last pod. You know, where drones are able to get to a fire at inception, put it out rapidly before it, you know, causes hundreds of millions or billions in damage and, you know, causes the loss of significant life. So.

• 30:47Speaker 02

  And we didn't, we didn't get our flying cars in the end. I mean, we have, we have flying car companies, but they're relatively sparse. But I do think we're going to have skies over the next few years that are utterly filled, that are densely filled, I should say, with these drones.

• 31:01Speaker 00

  Well, the drone ambulance is the coolest thing ever because it's, no one's going to stand in the way of a drone ambulance, right? It's there to save somebody's life. But that'll unlock all the technology, all of the airspace, all of the regulatory barriers, and also prove the efficacy. So that, that's going to be a great, really cool stepping stone. I can't wait for that.

• 31:19Speaker 01

  One of the, one of the substacks I put out was about the fact that we're heading towards a point where you can know anything you want, anytime you want, anywhere you want. We've got orbital satellites, we have the 200 satellites from Will Marshall at Planet, and then we're going to have an aviation layer from the flying cars and these drones imaging everything at centimeter and sub-centimeter resolution. And then all the autonomous cars, you know, gathering terabytes of data on the road. So everything is going to be imaged very soon. And, you know, the spooky side of that obviously is, is loss of privacy, if you believe you have privacy. The positive side is that, you know, there's no crime.

• 32:00Speaker 01

  I put out a part of that blog saying, when people are observed, they act better.

• 32:07Speaker 01

  You know, I got a lot of negative feedback on that, but I think the fact.

• 32:11Speaker 03

  I can imagine.

• 32:12Speaker 01

  It's true. I think when, when there's someone, when a Despot has a CNN camera pointing at them.

• 32:19Speaker 03

  They do less.

• 32:20Speaker 01

  They do, they, they. Behave differently in the global stage. And one of the foundations I used to support was the Lindbergh Foundation that would fly drones over herds of elephants. And the poachers would stay away when the drones were flying over them. So.

• 32:38Speaker 00

  Well, you want to hear a funny, funny story from China? Sean, my son, who just got back from China, was talking to a guy who was mansplaining the entrepreneurship vibe in China and how to build a great company. And Sean said, well, it's all about the team, right? This is what we preach at Link Ventures. You get, you get great people, they succeed every time. He said, no, no, no, it has nothing to do with the team. You're like, well, then is it the business plan? He said, no, no, no, it's what the government needs next. That's the only thing that matters.

• 33:06Speaker 01

  Wow.

• 33:07Speaker 00

  We're like, wow, is that discouraging? So I think, you know, with the loss of freedom and privacy also comes the loss of innovation. So I would think that, I don't think the drones are going to be, you know, taking away all of our privacy and all of our freedom. I don't think that's a real issue. But in general, the slippery slope does kill innovation and entrepreneurship.

• 33:26Speaker 01

  Alex, should we talk about the innermost loop?

• 33:30Speaker 00

  Let's do it.

• 33:31Speaker 01

  All right. So our first story is out of Switzerland. And it's an important one. You know, Switzerland just voted to lift its ban on nuclear plants. So after Fukushima back in 2017, they phased out nuclear completely. Now they're reversing course. And just to give you a sense, you know, nuclear has been very slow. The country that succeeded so incredibly well is France, who has 57 operating reactors. The UK has nine, Spain has seven, Switzerland has four aging reactors that supply 40% of its power, and they were all due to be shut down. They're going to be upgraded instead of being shut down.

• 34:15Speaker 01

  Interesting, I was on the, on the Zoom earlier today with Ramez Nam-Salem, and Ramez is one of the most extraordinary thinkers in energy, and we should have him on the pod. I mean, We definitely should. He would do an extraordinary job giving us an overview of all things energy across solar batteries and so forth. And he was saying the reason that France actually succeeded as well as they did is because they masked produce a single reactor design instead of starting from zero and where the costs escalate and get out of hand. I asked him whether he thought other European countries would follow suit and be able to implement nuclear and he was like, nope, not gonna happen.

• 34:54Speaker 01

  But it's interesting that the buzz on nuclear is beginning to soften and the need is significant. Alex, your take on this?

• 35:04Speaker 02

  Europe's in a bit of a bind, so maybe here's a really relatable story. Whenever I'm in the Swiss Alps and it's not the winter, it's very difficult to find air conditioning. And I think Switzerland and a good portion of continental Europe has a real energy crisis. They have lost access to cheap Russian oil, thanks to recent events. They, except for France, under-invested in nuclear energy. They aren't this amazing native producer of their own solar PV. And they have a culture that one can sort of theorize where the culture comes from, but a culture arguably of energy scarcity.

• 35:44Speaker 02

  And now as global temperatures are rising and as power consumption is increasing, Europe is having to do an about-face and discover, sort of learn to love, nuclear energy, learn to love energy in general. And the risk, as we've talked about previously, cite to the EU 2031 scenario and other scenarios, Europe is going to need to start to radically increase the power consumption and power production per capita. And nuclear is a, fission in particular, is a very attractive way to do that. Otherwise, Europe will smolder in, under heat domes, including the one that right now,

• 36:26Speaker 02

  over the past week or two, Europeans have been suffering under. I forget the exact statistic, but thousands of Europeans are dying due to heat over-exposure every year. It's a startling statistic and it's unnecessary with better air conditioning and higher energy per capita. So I think this is the obvious trend of the future for Europe.

• 36:47Speaker 01

  Yeah.

• 36:48Speaker 03

  Yeah. I mean, the good news is AI is turning energy from the AI demand. It's going to turn energy from an environmental issue into a capacity issue.

• 36:57Speaker 01

  Into a commercial profit driven issue. Yes.

• 37:01Speaker 03

  Well, that, but, but at least into a national capacity issue, like every country has to deliver enough energy and it's going to get it from, from frission in the, in the short to medium term until fusion or whatever come along to cover the baseload.

• 37:16Speaker 01

  So let's talk about, let's talk about fusion in our next story. You know, interestingly enough, you know, the joke about fusion has always been it's 50 years away in holding. Well, it's now here. There are some 50 privately funded fusion companies that have raised about $6 billion. Two US companies lead the pack. It's Helion, which we're going to talk about and Commonwealth Fusion. I had Bob Mumgarth, the CEO of Commonwealth Fusion on stage with me at the Abundance Summit. They're expected, they're building a tokamak like design. They're expected to build their first 400, 400 megawatt plant back in mid 2030, circa 2032.

• 37:57Speaker 01

  But the second story here is Helion. It's a Sam Altman backed company. He was the largest early investor back in March 2012 and until just two months ago, he was the executive chairman of the company. Apparently he stepped down now. So Helion can actually do some large scale partnerships with OpenAI. And on June 16th, the news here is that Helion cleared the required Washington state regulatory approvals for its Orion Fusion Power Plant, which is intended to supply Microsoft with 50 megawatts of power, starting in 2028. So in success. This is the first fusion plant coming online. It's relatively small, 50 megawatts.

• 38:38Speaker 01

  You know, we talked about gigawatt level plants. This is 50 megawatts. They've raised about a billion dollars at a $5.4 billion valuation. But it looks like fusion is finally here. I've got a video showing how Helion works because it's a unique design. I think it's worth discussing, but Alex, do you want to?

• 38:59Speaker 02

  Comment before I show the video. Yeah, maybe just comment. So fusion or the lack thereof has long in futurist circles been the whipping boy of why long promised technologies never happen. But actually, if you look at one of the figures of merit for fusion, the so-called triple product, which is a product of the density of the plasma, the confinement time of the plasma, and the temperature of the plasma, there has been steady progress for the past half century toward self-sustaining and net positive in terms of power production fusion reactions over the past 50 years. This has been sort of not just it. It's not the case that there

• 39:41Speaker 02

  was suddenly some recent unlock, although arguably economically there has been in the form of high TC, high superconducting transition temperature ribbon. That's very helpful for certain architectures of fusion reactors. There has been continuous progress this entire time. So I think there's an interesting parallel that one can draw between fusion, which is arguably achieved by compressing enough matter into one volume that you achieve net power output, and AI slash ASI, which is arguably achieved by taking enough human knowledge and compressing it into a small enough information theoretic footprint until

• 40:22Speaker 02

  you achieve really a phase transition that produces prompt engineering and large language model behavior, all of that. What an analogy. Strong parallels. I think they're both inevitable, but they're both inevitable. I'll make a stronger analogy, which is if you were watching the right metric or the right figure of merit over the long term, you could see both of these from 50 years away. You could see, or maybe 30 years.

• 40:48Speaker 01

  It's just been a slow linear growth over time.

• 40:51Speaker 02

  You just watch the compression over time. Arguably, with large language models and AI, if you were, say, watching the Hutter Prize, if you're Marcus Hutter, and it's the late 90s and you're watching the ability to compress the English Wikipedia over time, you could see LLMs and AGI happening from decades away. Similarly, with Helion and all of its competitors, and you're watching the triple product, you could predict when this is going to happen, and it's imminent. Yeah.

• 41:20Speaker 03

  I think there's something incredible here because this is such a foundational technology for abundance.

• 41:28Speaker 01

  This is the

• 41:28Speaker 03

  This is the

• 41:29Speaker 01

  thesis at large, for sure.

• 41:30Speaker 03

  It's the foundational technology for this because once you have clean and cheap and dense energy, the cost of computation, desalinization, transportation, manufacturing, agriculture, I mean, everything becomes the cost of just the materials at that point. So this is such a big deal. And it's hard to get, one of the hardest conversations I have with CEOs and with companies and especially with public sector is the fact that energy is becoming abundant over the next few years. And when energy becomes abundant, all sorts of other dominoes fall.

• 42:06Speaker 01

  Energy is the number one correlate to GDP, to health, to education. The more energy a nation has, the better it is across the board. And this is something that Europe needs to learn. Interestingly enough, the challenge here is the fission plants, the small modular reactors and the Gen 3 plants are still not going to come online really till the early to mid 2030s. And the fusion plants, getting up to 400 megawatt plants like common oil fusion or getting helium up to that level, again, those are not going to be coming online till the early to mid 2030s. And so the question is, where do we get the energy from now?

• 42:50Speaker 01

  I had that conversation with Ramaz and he says it's from the grid, that it's going to be from the grid and that we just need to make use, better use of the grid. And he's got a company, Alex and Dave, called Agentic, that basically is sucking down energy to batteries in the middle of the night, between 1 a.m. and 6 a.m. and then pumping that energy out during peak storage. So there's plenty of energy on the grid if you could time shift it. So I think that was fascinating.

• 43:24Speaker 02

  Yeah, I think one of the questions that I don't hear enough people discussing is, what is the killer app of fusion going to be? It seems obvious we're going to get it, barring some surprise, not anticipated. But will fusion arrive in time to be transformative for terrestrial data centers? Maybe, maybe not. Will it be helpful for...

• 43:42Speaker 01

  And you're pushing space.

• 43:43Speaker 02

  Yeah, will it be helpful for orbital data centers? Maybe, but there's also a lot of solar in space.

• 43:49Speaker 01

  There's a 93 million mile away fusion plant that works really well in space.

• 43:54Speaker 02

  That's right.

• 43:55Speaker 00

  I'll tell you one killer app. Sorry, go ahead, Alex.

• 43:57Speaker 02

  So the punchline I was going to gesture at is, I think actually, space propulsion is one of the killer apps. If we get compact fusion reactors, then that's a wonderful application.

• 44:09Speaker 01

  Yes, my nine-year-old science fiction self loves that.

• 44:11Speaker 00

  Yeah. Yeah, hand in hand with that. If any material scientists or chemical engineers want to work on, if we have fusion, then any storage mechanism, even if it's inefficient, as long as it's clean, is suddenly viable. So if you have cheap, cheap, cheap, virtually free fusion energy, and you can put it into a car in a cheaper way than a lithium battery, right now, you have to have some degree of efficiency. You don't want to throw away electricity. But post-fusion, you won't care about the efficiency of the reversible reaction. So anything is good. And that's true for launching rockets, too. Once you've got fusion energy, you can create any reversible reaction very efficiently.

• 44:54Speaker 00

  Then you can port it out to your space station or to your moon base, have it do whatever it's going to do, come back and recharge it. You don't care if it's only 10% efficient.

• 45:02Speaker 01

  If you remember Bob Mungard, again, the CEO of CommAllFusion, when he was on stage, his goal there, once he gets his unit working, is to pump them out, to create the machine that builds the machines. The same thing here for Helion. I've got a short video that explains how Helion works. And given the fact that it may be the first fusion plant coming online, and it's unique in how it works, using magnetically propelled plasma, and then magnets to pull electricity out of the plasma, let's take a listen to this. I think it's valuable for our listeners to hear about Helion.

• 45:41Speaker 07

  Helion's pulsed fusion device directly recovers energy which is used to generate zero-carbon electricity from fusion. It starts with Helion's fusion fuel, deuterium and helium-3. These fuels are injected as a gas into Helion's formation chamber where they are superheated into an ionized gas called a plasma. The machine's capacitors are charged and send electricity to magnets that wrap around Helion's device. The magnets invert the plasma's magnetic field on itself into a toroidal, or donut. The device's magnets fire sequentially, accelerating the plasmas toward each other at a velocity greater than 1 million miles per hour. They collide in the fusion chamber and merge to become one hot dense plasma. In the center of the device, the machine's magnetic field is rapidly increased, compressing

• 46:25Speaker 07

  the plasma with a powerful force over 10 tesla. While these fusion reactions within the plasma convert matter into new energy which strengthens the plasma's magnetic field. As the plasma's magnetic field gets stronger, it pushes back on the magnetic field of the machine, causing a change in the machine's magnetic flux. In accordance with Faraday's law, this change in flux induces current in the machine's coils which is directly recaptured as electricity and returned to the capacitors that originally charged the magnets around the machine.

• 46:51Speaker 01

  You know, we really are living in the future. When I see that, it's like extraordinary. And their goal was to mass manufacture those Helion plants.

• 47:00Speaker 00

  Well, you know, it's really cool too, is that Helion raised a billion, also Commonwealth Fusion. Remember, we had dinner with him in Riyadh, March, and he had just raised a billion. So, you know, when we were at MIT, the budgets for this were in the tens of millions.

• 47:14Speaker 01

  Research budgets, yeah.

• 47:15Speaker 00

  Yeah, research budgets. Now, suddenly, you know, we've said this on the pod many times, but we're actually truly investing in the commercial sector in hard science for the first time in my lifetime. But something great will come out of those two $1 billion investments, for sure.

• 47:30Speaker 03

  I mean, Alex, look, to bookend this, once you make energy abundant, every other scarcity becomes negotiable.

• 47:38Speaker 02

  It's probably also worth, I think, pointing out what the so what of that explainer video is. So unlike many other fusion architectures, the whole point of Helion's architecture is direct recovery of energy from the fusion plasma. In a more conventional, say, Takamak style or other fusion reactor, there's a bucket brigade of energy production. You create the plasma through inertial confinement or through magnetic confinement, and then the plasma will be used to heat something, maybe water, and that produces vapor, and then the vapor goes into a turbine, and you turn the turbine, and that, you recover

• 48:22Speaker 02

  electricity from the turbine, inductively inducing via magnets, currents in wires. And it's like a 10-step process. The whole point, and what's potentially quite seductively attractive about the Helion architecture, is you're just directly recovering from magnetic fields that are being induced by the plasma, and then currents induced by those magnetic fields. You're almost directly recovering free energy from the plasma. So you're skipping a whole bunch of steps. It's potentially a lot more efficient. It's potentially a lot, I was going to say a moment ago, if I had to pick a sort of pattern match, a Mr. Fusion from Back to the Future Part II architecture, and identify the archetype

• 49:07Speaker 02

  of any one of the now many fusion startups that are out there, I think Helion is the closest to being a Mr. Fusion startup, because all of those extra steps that are being skipped could lead to potentially radical compactification of the ultimate fusion implementation. So it's very exciting.

• 49:25Speaker 01

  Yeah, it is. It's a beautiful, beautiful design. And again, something he can mass manufacture. And, you know, where does it go? It goes into every township, you know, depending on the size, every city, every place that you need baseload energy production.

• 49:43Speaker 02

  Compact fusion is going to be a thing.

• 49:44Speaker 00

  Well, if you told me that I'd be listening to a little chipmunk voice explain Faraday's law.

• 49:49Speaker 01

  I know. It was like, am I running this at 1.5? No, that's the voice they chose. All right, let's jump into AI and a really fun story to kick us off. There's a 1.8 million dollar incentive prize that was founded by Nat Friedman, former CEO of GitHub, and Daniel Gross. I know Nat is your friend, roommate.

• 50:12Speaker 00

  Roommate. It was my first roommate at MIT. Fun stories.

• 50:16Speaker 01

  And that was on stage in March of 2023 at the Abundance Summit, and he announced the Vesuvius Challenge. And here it is being won, you know, some three years later. So the challenge was there are these scrolls that were basically buried and burnt under Mount Vesuvius back in 79 AD. And the scrolls are fully carbonized. You can't open them and read them without destroying them. So they said, can we use technology? You know, can we use CT scans to gather the data and then use AI to read them? Well, for almost 2,000 years, they've been unreadable, and they have just been won. So this is the first time it's done.

• 51:00Speaker 01

  You can see here in the image, these scrolls of ancient Greek that have been linearized and laid out by the AI, 22 columns of ancient Greek text. And there are still hundreds of scrolls that can be read. I mean, this is using AI to basically do, you know, look back in time. Alex, this is, must be a favorite one for you.

• 51:28Speaker 02

  And not just because of the Nat connection. Objectively, I think computational archaeology powered by AI is going to be utterly transformative in the future. I've argued from time to time.

• 51:39Speaker 01

  You've spoken about this before, sure.

• 51:40Speaker 02

  Yeah, the killer app of the singularity is superpowering computational archaeology. And I'll inevitably cite to Nikolai Fyodorov, one of the fathers of the strain of philosophy called. Cosmism, the idea that humankind's common task is to essentially resurrect every human who's ever lived using technology. And I see in the Vesuvius challenge, the very beginning of a larger arc of technological progress that may require completion of this singularity that we're in to fully run its course. But imagine, just as a thought experiment, imagine if we could do what the Vesuvius challenge did, not just for, say, performing high resolution

• 52:24Speaker 02

  scans of the positions of ink, or the X-ray analysis of small blotches of ink in order to recover scrolls that were otherwise preserved from the eruption of Vesuvius. But now imagine being able to do this at planetary scale. Imagine that somehow, not going to say specifically what the mechanism of action would be, but imagine that we're able to scan the Earth and gain fine spatial and temporal precision, or position momentum canonical coordinates, if you like, for every atom on Earth. And imagine what, if we feed the entire Earth

• 53:04Speaker 02

  state into an AI, what we might be able to recover about Earth's history. I think the answers would be quite transformative. One of my favorite anecdotes is environmental DNA. Where if you go for a walk outside, you may or may not realize this, but you're just drowning in DNA that's been aerosolized from animals, alive and dead. If you look, if you dig into the soil, if you dig into, say, soil near a cemetery where human bodies have been buried, DNA has a surprisingly long half-life, even under environmental conditions. So there's a lot of state left over from Earth's past, not just in these scrolls that were preserved by volcanic eruptions, but in general, and I think, again, idiosyncratic

• 53:49Speaker 02

  position here, but I think with strong enough AI, in combination with strong enough scanning technology, some point in the future, we will be able to recreate large fractions of our past light cone.

• 54:00Speaker 01

  Well, you know, this is what colossal's doing in a way, right? Going and extracting DNA from fossils, bringing back the dire wolf, bringing back the woolly mammoth, in a very limited slice, and this is taking that to extremes.

• 54:16Speaker 00

  Yeah, there's another angle to this story too. If you're watching this podcast live and you look at the image and really zoom in on it, AI is very, very good at interpolating these fragments, these little like, if you look at the characters, no human being could ever reverse engineer what that original character was. But the AI is really good at filling in those blanks. And it's not regular LLM AI. It's not your anthropic or your OpenAI transformer. And this is where, Peter, you know David Siegel, right? The founder of Two Sigma. Sure. He's on the board of MIT. He has a project called Project Open Athena, which he's hugely funding, which is designed

• 54:56Speaker 00

  to give AI compute resources to people who have alternate versions of AI that are not necessarily transformers, that are very, very good at these types of problems. And so there are many, many, many of these. And as Alex was describing, if you wanted to look at fragments of DNA that are lying around and reverse engineer what happened in that room, that's a really good use case. But all of these world events, historical events, leave a little trace that's kind of scattered around. And there's usually only one interpretation of history that could have created that trace. Impossible for humans to glue together those fragments. But it's not LLM AI. It's core neural network AI that's built from the ground up to solve that problem.

• 55:39Speaker 01

  Let me do a shout out to the non-technical founders out there. If you've got an idea for a technology or for a company, but you're not a technologist and it's your dream to make it happen, imagine being able to use an incentive prize like this to actually aggregate the best experts in the world to come help you solve your problem. So in this case, a $1.8 million prize probably brought on the order of

• 56:10Speaker 01

  Tens of millions of dollars, if not more, of genius to apply and solve the problem. So think about this. This is what this is the basic principle of X Prize, to get people around the world to focus on solving a problem. And we get 30x the prize money spent cumulatively to solve a challenge like this. Saleem?

• 56:32Speaker 03

  I wanted to stress the prize model and the incredible, powerful, and what really strikes me in this is the before and after. The image of before and getting actual data and information out of it is so mind boggling.

• 56:44Speaker 01

  But the audacity that you think you can do that. And I think this is the abundance thesis again, that challenges we never thought were solvable fall as a result of the technologies that we're building.

• 56:57Speaker 08

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• 57:42Speaker 08

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• 57:57Speaker 01

  All right, let's move to the SpaceX universe. Grok 4.5 is coming out based on a 1.5 trillion parameter V9 foundation model. Interestingly enough, Elon has made the claim that he's going to iterate a new model and release it every month for the rest of the year. Alex, let's go to you on this one.

• 58:19Speaker 02

  And he said something, I think, even spicier, if I understood his announcement correctly, that he was going to start pre-training every month, not just distillation cycles, or not just post-training, or fine-tuning cycles per month, but start a new pre-training run every single month.

• 58:34Speaker 01

  A completely new model.

• 58:35Speaker 02

  From scratch.

• 58:36Speaker 01

  From scratch.

• 58:37Speaker 02

  From scratch, which means pre-training, which is, I mean, that's audacious, it's brute force, it's exactly, I think, what the world expects of Elon, a brute force attack. I've had a number of folks, since we first discussed in an earlier episode, my comments about Grok being put on life support in favor of SpaceX's hyperscaler resources being handed over.

• 59:00Speaker 01

  You got a lot of hate mail on that one.

• 59:03Speaker 02

  I got some spicy comments. I had people saying, okay, well, Elon's announcing this, Elon's announcing that, are you retracting your comments about Grok being put on life support? And I think, again, my comments may have been misconstrued, I want the frontier to be competitive. Right now, we are in arguably a duopoly between OpenAI and Anthropic, they're just running away with the race with Chinese open weight models a few months on their heels, and I want there to be a competitive frontier. And I think Grok is one of the possible competitors, along with Gemini, and maybe Meta will come up with something eventually. I want it to be competitive.

• 59:43Speaker 02

  And Elon's strategy historically, vis-à-vis XAI, has been brute force. And I think, hopefully, as SpaceX brings more and more compute online, this sort of brute force approach, where he has eventually more compute than everyone else, in combination with off-the-shelf algorithms, maybe this will work. I see the beginnings with Grok 4.5, in combination with Cursor, right now, the Cursor acquisition is taking the form of post-training of models that he already had. In the near future, Elon's promised that Cursor is going to be part of the pre-training recipe.

• 1:00:23Speaker 02

  If he can make that work, I think Grok has a fighting chance to join the frontier through brute force compute efforts.

• 1:00:30Speaker 01

  There's a few other things he's doing. First of all, he's got, you know, tens of billions of dollars of dry powder now to focus on this. The second thing is, and he's announced he's bringing in his smartest players from SpaceX and from Tesla to work on XAI. He is by no means giving up the ghost here. He wants to be number one. He wants to beat OpenAI. He wants to create Grok as the ultimate greatest seeker of truth. And again, I would never bet against him.

• 1:01:00Speaker 02

  Yeah, I think the best bet here is he will brute force his way back to the frontier. That's what I'm hoping will happen.

• 1:01:06Speaker 01

  Yeah.

• 1:01:07Speaker 00

  Well, he also doesn't. What you're describing, yeah, what you're describing is a two-horse race. He doesn't perceive that at all. He thinks it's still a race against Google specifically because the training directly toward a customized chip is a 10 to 100x unlock. And he doesn't perceive Anthropic to be near there. And then OpenAI has some activity there, but it's nowhere near. But Google has already got their whole vertical monopoly stuck together. And so he doesn't think he's going to lose because he thinks that he's going to actually be the first to have a reasonably good model that then is custom silicon that supports the model instantaneously with the design of the chip being AI.

• 1:01:52Speaker 01

  You know, we're seeing verticalization win every race here. We'll see it in the space industry. We're seeing with Google, seeing with XAI. I mean, it's fascinating. Celine, please.

• 1:02:03Speaker 03

  Yeah, there's a thought, there's an idea here that could allow him to leapfrog even faster, which is we're moving from models that were built on human artifacts towards models being trained on the actual process of human machine work, which is where the cursor data becomes really useful because that creates a flywheel. We have a better model, more usage, richer workflow, and then a better model. Right? And I think that's going to be serving very well in the future.

• 1:02:29Speaker 02

  I'll comment on that point narrowly. I think it's an interesting debate one could have. So the Cursor acquisition, I think, I viewed this at the time, commented on this on the pod previously, I viewed as a brain transplant for the future trajectory of Grok, given that ChatGPT also is going through the same brain transplant of making codex essentially a model that, or a class of models, together with scaffolding, that were optimized for code generation and recursive self-improvement. That's becoming the new mainline ChatGPTs. By analogy, XAI and SpaceX acquiring Cursor post-IPO to make Cursor essentially the

• 1:03:10Speaker 02

  new mainline Grok, I view as an analogous move. However, the data set from Cursor, which consists, in part, my understanding, is lots of reasoning traces driven from developers who wanted more code gen. I think that buys Elon sort of a leap to the near frontier in terms of code generation, but it will still be incumbent on Elon slash XAI slash SpaceX to achieve their own recursive self-improvement loop. You can only get so far by post-training on developer or user traces. At some point, the models need to start developing better models, and that's been historically, I think, a strength of Anthropic, probably a weakness

• 1:03:54Speaker 02

  of XAI, but maybe he can brute force himself to the front of the recursive self-improvement loop.

• 1:03:58Speaker 01

  Let's jump into a few Anthropic stories. Anthropic's flagship model, Fable 5, has been offline for 15 days because US government pulled it for national security fears, and hopefully we've talked to this ad nauseam. Now Axios reports it may be back within days. Secretary Lutnik accredited Anthropic for working on the risks through the Pentagon and NSA. They still haven't signed off on that. Interestingly enough, Stripe recently reported that they ran a test using Fable 5 to overhaul 50 million lines of code base in a single day, work that would have taken engineers many months. The government's treating Fable 5 as a commercial AI model, like a controlled munition, taking it offline

• 1:04:42Speaker 01

  and re-permitting it by users. And we're going to have to see how this evolves in the coming days. So let's talk about this Fable 5 coming on, and Anthropic is another story. Alex, if you want to cover that one, too.

• 1:04:58Speaker 02

  Sure, so I think there are a couple of interesting notes coming out of this. If Fable 5, as I do expect, will eventually become reavailable. One of the more interesting takes, I think, is this will have been a period of a few weeks when allegedly Chinese organizations that were leveraging access to Anthropic's frontier models or near frontier models for reasoning trace distillation will have been denied that access. So we talk on the pod all the time about how the US maybe has a three-month lead or a six-month lead or an eight-month lead, depending on how you count. There's a certain sense in which this one-month-ish shutdown, future-perfect tense, may have

• 1:05:42Speaker 02

  or will have denied China at least a month of catch-up time. That's a generous interpretation. A less generous interpretation is that this will mark, what will look back through time, historians will look back and say, this period in time marked the period towards the middle or the end game of recursive self-improvement, when months counted and the permitting of frontier intelligence became almost a zones of thought, to borrow from Wernher Vindji, or a block system, to borrow from the Cold War, when either before anyone could access

• 1:06:23Speaker 02

  frontier intelligence versus after, when now you have to be a US person and there is strict export control for capabilities and there's a non-proliferation regime where you have to gain access, if you're a non-US person, you gain access to models that are maybe a few months behind the frontier. But I also think a few years from now, when we look back on this time, I think this will have been, yes, there was a phase change in terms of the diffusion of frontier models, but I do think sometime in the next few years, we're going to get to the end of the recursive self-improvement rainbow and there's going to be a perfect model and we'll look back and say, this was just a period of months, you know, a delay, but ultimately, everyone

• 1:07:08Speaker 02

  is ultimately going to figure out what the perfect model looks like.

• 1:07:11Speaker 01

  Was this period of a month also a chance for a lot of critical systems to safe themselves against Fable 5?

• 1:07:18Speaker 02

  The most essential ones, maybe, but by and yes, there was the stand up both within the US government of vulnerability scanning and outside the US government, we saw three or four independent nonprofit or for profit organizations stand themselves up to do bulk vulnerability scaling using Fable 5. But I think to the extent Pausism has its day in the sun, I don't think this actually decelerated any AI at all. I think this is a net accelerant because even though public is sort of privately-

• 1:07:53Speaker 01

  I'm not thinking about decelerating AI. I'm thinking about decelerating black hats from being able to get in there and penetrate-

• 1:08:01Speaker 02

  I don't think so. I think black hat capabilities are proportional to capabilities overall. And I think what we saw during this time is Chinese models like GLM 5.2 gain ascendancy for anyone who wants near frontier capabilities to do essentially whatever they want with them. It may not be as capable as Fable 5, but this creates enormous pressure on Chinese organizations and the Chinese frontier labs to catch up. And so I think as with the original Paus AI movement, it had the net effect of accelerating capabilities globally. Same idea here.

• 1:08:33Speaker 01

  Quick, two implications from this slowdown, I just want to point out. One for investors, right? Regulatory risk is now one of the first order variables for you're looking at companies because it's real. And the second for technical founders is don't build your product or your company on a single model. You have to make sure you're able to swap out models because you have no guarantees as we're going forward. And Dave, you saw that. Do you want to, Dave and Alex, want to talk about the Sonnet announcement that came an hour ago?

• 1:09:07Speaker 02

  Dave, you first.

• 1:09:09Speaker 00

  Well, I mean, it's really obvious that AI is sold out and that when Fable 5 came out, you know, they doubled the price on us and but you had to use it because it's just so good. So it's it's pretty clear that Sonnet 5 now is a way to kind of fill this gap until Fable 5 is back out. But the price point is very high, given the amount of compute that they have to use to deliver it. But people will still buy it because, again, AI is sold out. So you see the revenues at Anthropic going through the through the roof. And it's because the demand for AI way outstrips the underlying chip supply. And so, you know, the byproduct of that is a lot of things, you know, the only the very

• 1:09:52Speaker 00

  top of the mountain use cases are going to get access. And then after Fable 5 comes back out, you know, I agree with what Alex was saying a minute ago, this moment in time will be remembered in history. This is the the intersection of AI and the government that's never going to go away now. But not every person on the planet and not every company on the planet is going to be able to access the models and it's supply constrained at the same time. So then there's going to be preferential routing. Sonnet 5 is is a kind of mediocre capability at a high price point, but people will still need to buy it. And then Fable 5 will come out at its extremely high price point. That's my read on Sonnet.

• 1:10:33Speaker 02

  Alex, any addition? I think this is a bizarre announcement. Admittedly, this is a hasty analysis since Sonnet 5 was released right before we went to air here. But I've been trained, as I think the majority of sophisticated users have been trained to expect that the Sonnet series from Anthropic would represent some distillation of the Opus series. And similarly, the Haiku series represents a distillation of the Sonnet series. And that as as you go down towards smaller, lower parameter count, more distilled models, you see some optimal frontier emerge in price performance space where performance, at least throughput

• 1:11:15Speaker 02

  goes up, price per token goes down, and performance goes down. And maybe I'm missing something, and maybe the answer will reveal itself in the next few hours. But just looking at the the the cost versus performance at agentic tasks.

• 1:11:30Speaker 02

  Curves that Anthropic released with Sonnet 5. It's a little bit bizarre. On the one hand, Sonnet 5 is an optimal frontier, sort of a Pareto improvement over the last version of Sonnet, Sonnet 4.6. But OPUS 4.8, which has been out for what in these singularity times passes for an eternity, is better. It's superior on a cost performance basis. So I'm not 100% certain I understand what Anthropic is hoping to achieve with Sonnet 5.

• 1:12:03Speaker 00

  I can tell you, Alex, it's everybody's working on these frameworks where you can bounce from model to model while keeping the context intact. And all of the work that's piling up, the prompt history and the intellectual property is piling up like crazy now. And so you have a choice between working in an open framework, but Claude code and Claude coworker are super compelling, you know, with all the MCP wrappers and connectors already built in. So the easy choice, kind of the Apple like, I'm going to pay more, but it all works choice, is to go with an all Claude stack. And then when you're working in OPUS 4.8, if you have a simpler question, you go to Sonnet, or it automatically goes to Sonnet. And if it's an even simpler question, it just goes down to Haiku. So that's the easy way to go.

• 1:12:44Speaker 00

  But the more cost effective way to go would be to bounce over to a different model. But then you have to use a third party context management platform. So that's the tension. But this is kind of like Anthropic becoming the Apple of AI, where you know you're overpaying by some insane amount.

• 1:13:00Speaker 02

  I feel like there, my intuition is there's some branding going on behind the scenes that we're just missing, like maybe in the sense that Fable and Mythos are the new high end models. Maybe there's some sense in which Sonnet is the new low end, like Sonnet is the new Haiku. And just viewing it through the branding of Sonnet is maybe incorrect. Maybe we should be thinking of it as the Haiku level, and it's just that Fable 5 isn't accessible. There's some weird Pareto optimal frontier, I think, that's missing in order to explain why we've seen a reversion of this optimal frontier.

• 1:13:36Speaker 00

  We will find out and we will get to the bottom of it.

• 1:13:40Speaker 01

  Welcome to the health section of Moonshots brought to you by Fountain Life. You know, AI is having an outsized impact on every aspect of our lives, how we teach our kids, how we run our companies. It also is having a huge impact on health, helping you prevent heart disease. One of the key things. I'm here with Dr. Dawn Musalem, our chief medical officer at Fountain. Heart disease has been personal for you as well, hasn't it?

• 1:14:02Speaker 09

  It really has, Peter. When my daughter was five, my husband died of sudden cardiac death. And so this is a topic that is one that I am mission driven to try to eradicate. Prevention first and early detection is absolutely critical. Fifty percent of people die of heart attacks with no warning signs.

• 1:14:18Speaker 01

  No shortness of breath, no pain, no nothing.

• 1:14:20Speaker 09

  No, silent killer.

• 1:14:21Speaker 01

  They just don't wake up in the morning.

• 1:14:23Speaker 09

  They don't wake up. And so, you know, AI, this is our mission to advance science, to try to help to one day democratize wellness. We know at Fountain Life, when we do this CT angiography with AI analytics, we are actually finding that eighty-eight percent of people coming in have detectable coronary disease. But Peter, what's more alarming to me is twenty-three percent of those individuals had soft plaque. This is the plaque that would not traditionally be seen on CT, looking at calcium scores alone. And this is the plaque that we must intervene with, with the multimodal testing we're doing, including diagnostic laboratory studies partnered with healthy lifestyle recommendations.

• 1:15:02Speaker 01

  So, listen, make sure you understand what's going on inside your body genetically, metabolically, and cardiovascularly. You can know, and it's your obligation to know. So, check it out at fountainlife.com/peter to find out more. And really, make sure that you're the CEO of your own health. All right, back to the episode. All right, mates, let's jump into data centers and space. And for that, we're pleased to bring a friend on. Philip Johnson is the co-founder and CEO of StarCloud, a startup building space-based data center. StarCloud has raised about two hundred million with its last round over a billion dollars. Famously, Philip's company launched StarCloud One, the first Nvidia H100 GPU in orbit. And apparently, Philip, you've trained your first LLM in

• 1:15:47Speaker 01

  space. StarCloud launched in November of 2025 on Falcon 9. Welcome, Philip. Pleasure to have you.

• 1:15:56Speaker 10

  Thanks so much for having me. It's a huge honor. I've been a longtime fan, so very privileged to be here.

• 1:16:02Speaker 00

  It's mutual. It's mutual.

• 1:16:04Speaker 01

  Yeah, I mean, a lot of stories we want to talk about in data centers in space to wrap up today's episode. But let's start with a little bit about Star Cloud. Tell us about the company, your vision. Where are you guys? What have you done with the H100? And yeah, let's go there.

• 1:16:20Speaker 10

  Yeah, yeah, for sure. So we started about two and a half years ago in January 2024. We're a team of about 20 engineers based in Redmond, Washington, actually right down the road from the Starlink manufacturing facility. So about half our team came from SpaceX and the rest are from the data center companies up here, so AWS and Azure and the others. And then, yeah, so we launched our first spacecraft, Star Cloud One, in November last year. It had actually five GPUs, two from ARM and three from Nvidia. But the most important one, as you mentioned, was the Nvidia H100. And so with that, we were the first to train a model in space. We trained NanoGPT from Andre Karpathy, which is a very tiny model, but it still counts.

• 1:17:04Speaker 10

  And then we actually were the first to run a version of Gemini in space. So we ran Gemma, which is DeepMind's cut-down version of Gemini. And then we've done a few other things. So now we're doing much more kind of useful workloads. So we've just been doing hypodimference on SAR data, synthetic capture radar data

• 1:17:23Speaker 10

  in collaboration with various DOW entities. And also, we actually just played Doom. We ran Doom on the space, on Star Cloud One.

• 1:17:32Speaker 01

  As one does.

• 1:17:35Speaker 00

  Little latency there, probably.

• 1:17:36Speaker 10

  And before we get into it, I just want to say you guys have been ahead of this trend more than most. So thank you for your support. I know Alex is often being vocal about your support. And Dave gave me a shout out early on. And Peter, I know you, in the interview with Elon, you were also very supportive. So really appreciate it.

• 1:17:56Speaker 01

  Yeah, well, you know, you're building the Dyson swarm and this is important for our great, great grandchildren, for all of us.

• 1:18:04Speaker 02

  Philip, just speaking for myself, I want there to be multiple Dyson swarms. We can't have a solar system scale monopoly.

• 1:18:11Speaker 10

  Agreed. Maybe a Mats Yoshida swarm, so we can have swarms inside swarms inside swarms.

• 1:18:17Speaker 02

  You know, there's Jupiter and Saturn. Plenty of atoms left to disassemble.

• 1:18:22Speaker 01

  So Philip, give us a sense of where, you know, you gave us a sense of where you are right now in terms of Star Cloud 1, but where do you go next?

• 1:18:32Speaker 10

  Yeah, so we've got three launches booked next year. We're launching Star Cloud 2 in January. It's about 100 times the power generation of Star Cloud 1. We'll have by far the largest commercial deployable radiator in space. And so, yeah, that's going to have a whole bunch of H100s also flying, the Blackrock chip from Embraer, and also some other interesting things like some Bitcoin mining ASICs, and also AWS Outposts, which is an on-premises server blade, so we can run like an instance of EC2 on orbit, which is useful for the OW customers. And then, as soon as possible, we'll be launching a

• 1:19:10Speaker 10

  much larger spacecraft, what we're calling Star Cloud 3. It's a 200-kilowatt, 3-ton spacecraft, which will fit on the Starlink, the Starship has the dispenser form factor. Actually, I can, if you guys can see this, I can even show you, we've got it welded up, a version of it welded on the, on the ceiling, the chassis, just so you get a sense. So this is the, this is the length of the chassis of it. So it's about 6 meters long, and with this, we'll have huge 100 meters deployables hanging off the side of that.

• 1:19:42Speaker 01

  How much power are you generating for that, to power that?

• 1:19:45Speaker 10

  That's 200 kilowatts. And 2 tons, you said? 3 tons, yeah. 3 tons, okay. Yeah, and we can fit about 50 of them per Starship. So talking about about 10 megawatts of new compute capacity per Starship launch. And yeah, we're hoping to be launching very frequently on Starship. I mean, they're building just absolutely enormous capacity, as I'm sure you're all aware. These two Starship Giga factories designed to produce something like 3 Starships per day. So hopefully, there'll be capacity for us to launch. And obviously, you know, we're looking at some other launch vehicles as well, but that's the primary one.

• 1:20:21Speaker 01

  So you have to ask the elephant in the room, which is when you're going in to pitch for investors, and they say, hey, but there is, you know, Elon and his mega plans, and Google's far behind. And are you picking a niche in this area that you're going to be competitive in?

• 1:20:39Speaker 10

  Yeah, it's a great question. So the main niche we're going after is to be more like an energy and infrastructure play than like our own cloud. And so, for example, we've got an agreement with Crusoe, where we essentially say to them, hey, we have a box, and that box has power calling connectivity, and we'll work with you on whatever chip architects you like, and you can sell to whichever customers you like, for whatever price you like, and you just pay us a fee. And the same way that you would pay a rental fee to somebody like Equinix, you pay that kind of rental fee to us, and you finance the chips. So that's kind of the approach we're thinking. I think in the early days, at least, it looks like SpaceX is primarily going to be serving their own, you know,

• 1:21:21Speaker 10

  cursor, Grok, and XAI workloads. And, you know, in the more medium term, we'll be providing a cloud service to folks like Anthropic. I think it's probably a bit further out that they're looking at doing, being just a pure infrastructure provider. Though I think actually Elon did mention something about that relatively recently. But that's the idea. I mean, so in general, it's a good point, because of course, we're going to have a higher cost base than SpaceX, because they own the launch. So long as we have a lower cost base than all of the other hyperscalers, I think we're in a reasonable position. You know, lots of, if we have a lower cost base than OpenAI, for example, they're going to need to figure

• 1:22:00Speaker 10

  out a space solution, and either they pay, you know, XAI to run workloads on SpaceX's satellites. In OpenAI's case, I think that sounds unlikely. Or they start building their own satellites. Right. Yeah. Or they start building their own satellites, and it's possible, but I mean, they're going to be way, way far behind. Or the last option is they'll look around, you know, in sort of two, three years, as Starship Cadence ramps up, and they're going to be like, okay, we're going to get left behind if we don't get on top of this. And they'll be like, okay, who who's the most advanced in the market now, maybe besides SpaceX? And at that point, I think we'll have a very significant lead over anybody perhaps besides SpaceX.

• 1:22:41Speaker 01

  Interesting. Dave, Alex, you want to jump in?

• 1:22:43Speaker 03

  I've got two questions.

• 1:22:44Speaker 01

  Okay.

• 1:22:45Speaker 03

  Okay. One was two years ago, you know, we didn't have data centers in space in our bingo cards at all. What had?

• 1:22:53Speaker 01

  Hold on, so, so, so, some of us did, some of us did.

• 1:22:57Speaker 03

  Definitely the mainstream did not. I know, Alex, you've been talking about Dyson Swarm since you were probably like five years old. But what has you jumped to that and say, we're gonna do that?

• 1:23:09Speaker 10

  Yeah, yeah, yeah. We actually started off by doing, well, we were initially just looking at space-based solar. So in mid 2023, I actually just on a randomly on a weekend, took a trip down to Starbase, Texas. Like even before the first launch, there are not as many people were looking at it back then. And I was just blown away by the scale of what they were building. You know, in my head, I was like, okay. All of the concepts from sci-fi that I remember reading about, Asimov was talking about space-based solar in the 40s even.

• 1:23:39Speaker 10

  Are gonna come true. It's just a matter of a timeline now. And so.

• 1:23:42Speaker 01

  Philip, if I could, space-based, you know, solar powered satellites for beaming energy down to the ground?

• 1:23:49Speaker 10

  Yes, exactly. Yeah. So huge, huge solar panels in space. And then either using infrared or microwave to beam power down. The main problem, and we spent, you know, several months on the math, on the math, essentially, on the breakeven. We wanted to know, okay, what is the breakeven launch cost at which space-based solar makes sense? And we came to a number around sort of $50 a kilo where that would make sense. And initially we thought, okay, that's kind of good enough. Starship will get there at some point. But then, and, and, you know, we started working on that. But then we were like, okay, well, the problem with space-based solar is you lose 90 or 95% of the energy in transmission from space to ground. And we were looking around and saying, okay, once we get the power down, what are we going to be using it for?

• 1:24:34Speaker 10

  And even two years ago, most new energy projects being built, particularly in the U.S., were being built primarily to power data centers. So the thinking was, okay, well, either directly or indirectly, that power is going to be going into data centers. And so if we instead can find a cheap way to get the data center to space, let's rerun all those calculations to know what would the breakeven launch cost need to be that that business would break even, you know, would make sense versus terrestrial. So we rerun those numbers. We came to a launch cost breakeven of around $500 a kilo if we had a cheap way to get the data center to space. And then that became the basis of a white paper that we put out in summer 2024. And then that essentially became the basis of the company.

• 1:25:14Speaker 01

  Wow, that's great. That's a great story. I mean, and it's an interesting entrepreneurial story for all the entrepreneurs listening, right? It's like you're going down one road and then all of a sudden you see a massive opportunity, especially we can go deep enough to look at it. Because the idea of space solar power satellites has been around since the, God, since the 70s. Gerard K. O'Neill at Space Studies Institute, you know, looked at, his solution was to build them on the moon and then fly them to Earth orbit where the launch costs obviously are de minimis.

• 1:25:46Speaker 10

  I'm sure that will happen. I'm sure that will happen. Yeah.

• 1:25:49Speaker 03

  Second question, what are the couple of biggest bottlenecks you're facing right now?

• 1:25:55Speaker 10

  We are actually very constrained on launch right now, as everybody is. We're so constrained that we're trying to book now on Relativity Space's first launch in January.

• 1:26:07Speaker 10

  I'm really excited about that. I think that would be super good to have a launch on there.

• 1:26:11Speaker 01

  And for those, we've covered Relativity Space in a podcast ago. This is Eric Schmidt's company where he's CEO. He bought it from Tim and Jordan when it missed the financing. And Relativity Space is about the size of, about the size of New Glenn, half the size of Starship.

• 1:26:33Speaker 01

  Well, if you're building toward the PEZ dispenser, actually, that's a problem. That's really interesting.

• 1:26:38Speaker 10

  Yeah. Yeah, it is a problem. I think we're gonna have to have two form factors. I mean, the primary one we're working on right now is for PEZ. But I think we're gonna need a form factor that will fit on. Also, Stoke Space is the only one which has a reusable upstage. Well, the only one that right now is seriously working on reusable upstage. So we're also looking at a Stoke launch vehicle form factor. But to be frank, the relativity one is, maybe just to take a step back. The business has two phases. The first phase is while launch cost is relatively high, we're launching on Falcon 9 and others. We're primarily serving edge and cloud, you know, providing edge and cloud services for other spacecraft,

• 1:27:23Speaker 10

  particularly, you know, DOW and Earth Observation Constellations. And then on a sort of three to four year timeframe, as Starship ramps up cadence and production, that's when we switch over to competing with all terrestrial data centers on energy cost. But in the, yeah, so all of these, when I say we're launch constrained right now, I'm even talking about for the first business. We've got three launches booked for next year, but if you want to book anything for 2028 on Falcon 9, there's just nothing available.

• 1:27:51Speaker 01

  Wow.

• 1:27:51Speaker 10

  The government's just plonked down 20 launches, which has bumped everything back. And so, yeah, unless you can get some priority, and we're going through various channels to try and get some priority on that.

• 1:28:04Speaker 01

  So this is GPUs, GPUs for use of processing in space?

• 1:28:09Speaker 10

  Yes, correct. So we will receive, for instance, raw imagery, hyperspectral or SAR or other types of satellite sensing data. We will, instead of having to wait for ground station and download enormous amounts of data, we can process all of that on the edge. And actually, this is one of the demonstrations we've just done. Is process a whole bunch of SAR data, identify the coordinates of a tank and then just downlink the coordinates of that tank. And rather than having to, you know, it could take three days to get enough brown station passes to get 100 gigabytes of SAR data off satellite. Rather than doing that, we can get all of that, receive all of that data optically in space, process it on orbit, and then just downlink the insight. And that's, that's the use case we're building towards right now.

• 1:28:52Speaker 02

  I'm curious, I'm curious, Philip. So the premise there is presumably bandwidth is scarce, scarcer maybe than launch. So you have to do a lot of edge inference in, in LEO or wherever you're doing this. I'd love to ask you the sort of a similar question that I asked Will Marshall of Planet in a previous pod episode. Let's project out 10 to 20 years well past the current bottleneck in heavy lift or heavy launch capability. What do you think as the founder and CEO of one of the incumbent Dyson swarms, plural, what do you think the Dyson swarm or Dyson swarms of call it 20 years from now look

• 1:29:33Speaker 02

  like? Does it look like LEO? Does it look like sun synchronous orbit? Does it look like the moon? Does it look like a Dyson swarm around the sun? Paint a picture for us what 20 years from now the Dyson swarm or swarms look like?

• 1:29:47Speaker 10

  Hmm, that's a, that's a good, good question. I hope within 20 years, we've started putting significant amounts of compute in a sun orbit, probably starting with the Lagrange points, although you probably don't want to clog them up too much. But even just a, just a distinct sun orbit that, you know, trails Earth or, or is in front of Earth. Because certainly you could put about 10 terawatts of compute in the Dawn Dust sun synchronous orbit, and then you're back to flying.

• 1:30:21Speaker 10

  In orbits which have an eclipse, you know, sort of night, 45 minutes of every 90 minute eclipse, that then drives the cost up significantly because you need batteries and all these other things.

• 1:30:31Speaker 02

  Scarcity of real estate. Yeah. SSO is going to get crowded. That's, you're, you're one of the few people, Philip, I hear talking, this is like overpopulation on Mars, talking about SSO getting crowded due to the SSO Dyson swarm, and then overflowing back to other orbits. That's fascinating.

• 1:30:48Speaker 10

  Yeah, yeah. Well, because there's only one SSO orbit that is, you know, is very rare and beautiful orbit, the dawn dusk sun synchronous orbit, which flies over the terminator line. I mean, 10 terawatts is a lot of compute. That's like 20 times the entire US power grid. And probably in 20 years, my expectation roughly is that in 10 years, we might hit a point where most new compute capacity is being deployed in space. If you ask me, what is the total percentage of compute in space at that point? It's still probably less than 5%. In the same way, you know, right now, most, in certain parts of the world at least, you know, Norway or whatever, most new cars coming from production line are electric.

• 1:31:29Speaker 10

  But if you want to know what is the percentage of the fleet which is electric, it's like 4% still. And it just takes a long time to replace all of the capacity that we're building on Earth terrestrially right now. So in 10 years, I would say most new compute capacity will be in space. In 20 years, it could be, I would be surprised if more than half of all compute is in space in 20 years even.

• 1:31:53Speaker 10

  But, but beyond that, certainly there'll come a point, and it's probably more like a 50th timeframe, where 99% of all computers in space.

• 1:32:00Speaker 02

  I also just have to ask, second elephant in an increasingly crowded room. If lift over the next few years, if heavy launch is the main bottleneck, have, have you, is there some plan in a back room somewhere for you either to build or buy your own vertically integrated heavy launch provider if that's the main constraint?

• 1:32:23Speaker 10

  We are in quite serious discussions to partner with various launch providers. Probably shouldn't go too much down that. Yeah, it's early days and, you know, if SpaceX can provide the capacity, we'll be very happy customers of SpaceX. You know, if not, then we'll need to figure out something. If you ask me, do I think SpaceX has a monopoly on launch in five years? The answer is yes. In 10 years, the answer is no.

• 1:32:51Speaker 01

  And we'll talk about Rocket Labs purchase of Irenium in a moment. And in fact, what I'd love to do is jump into a few stories, Philip, and have you comment alongside the mates here.

• 1:33:05Speaker 01

  Yeah, the first story is a recent conversation by Elon about basically Earth to, or space to Earth telephony. So let's, let's jump into, into that. So I'm going to play a short video. This is a video clip of Elon speaking with the, at the All In Summit, and then let's talk about it afterwards.

• 1:33:30Speaker 11

  So the phones that are able to use the spectrum that was acquired probably start shipping in around two years. And, and then we also need to pull the satellites that are going to communicate on those frequencies. So in parallel, we're building these satellites and working with the handset makers to add these frequencies to the phones. And then the satellites and the phones will then handshake very well to keep high bandwidth connectivity. But the net effect is that you should be able to watch videos anywhere on your phone.

• 1:34:01Speaker 01

  So fascinating story, vertical integration again, the whole stack. SpaceX owns it, launch satellite spectrum and increasingly compute. So direct to phone, you know, is a interesting product. It's going to be space-based internet to everybody on the planet. Thoughts on this? It's going to, you know, we're going to see the, you know, for investors, we're going to see the telecom industry getting disrupted.

• 1:34:31Speaker 10

  Yeah, yeah. And he didn't mention it here. Yeah, to a point on vertical inspiration, he didn't mention it here, and I think he's talking about working with phone providers. It would not surprise me at all if they. Either buy or start manufacturing their own phones as well. Um, I don't know. What was your read of that? My read was he was talking about working with phone providers and not talking about building their own phone. But um, at some point, I would be surprised if they don't think about building their own phone.

• 1:34:59Speaker 01

  Well, you know, it's been, it's been rumored, the Tesla phone's been rumored for a long time. Uh, and Elon, Elon famously does not work well with others. He tends to buy them or blow past them. So.

• 1:35:12Speaker 10

  And did you, did you see recently the possible acquisition of T-Mobile?

• 1:35:16Speaker 01

  Yeah, the rumors are out there and also with Charter Communications.

• 1:35:21Speaker 10

  I mean, Starlink is the most unbelievable business. Starlink is gonna produce hundreds of billions of dollars of free cash flow in the next sort of five to 10 years. Um, you know, they're gonna have direct sale. They're gonna have unbelievable bandwidth on uh, almost, you know. Unless you're really in the middle of Manhattan, I think Starlink would be the best option for most people. Uh, yeah, I, I can't see a world where on Starlink revenues alone, SpaceX isn't the most valuable company in the world. You know, on a sort of.

• 1:35:51Speaker 01

  We've been projecting 10 trillion by 2030 in terms of evaluation and, and scaling towards 100 trillion.

• 1:35:58Speaker 10

  I'd, I'd absolutely, I'd absolutely back that.

• 1:36:00Speaker 01

  Dave, what's your thoughts on this?

• 1:36:02Speaker 00

  Well, my question actually is if we have direct satellite phone connectivity, downloading videos. And there, you know, that implies tens or even hundreds of thousands of satellites in low earth orbit. And then data centers are gonna want that same space. That, so uh, is that actually gonna survive the escalating needs of AI? Uh, you know, cause if you figure, you know, as you said, you know, five to 10 years from now, almost all compute is going into space. That's, that's also a lot of very high value use case for that same LEO. So.

• 1:36:33Speaker 10

  Yeah.

• 1:36:34Speaker 00

  You know.

• 1:36:34Speaker 10

  And so they're they're a slightly different orbit because the um the Starlink satellites, they fly around four hundred and four hundred and sixty kilometers, I think it is now, but they are in a, I think it's a fifty degree inclination. So they they're not going over the poles. They're mainly going up to just, you know, mid midway through Canada. And they're flying as low as they can. And the actually with the AI satellites, you want to fly them as high as you can almost because even in this dawn dusk sun synchronous orbit, if you're flying at six hundred kilometers altitude, you still have, there's like a month of the year when you have a ten percent window, which is blacked out. The the ideal altitude

• 1:37:16Speaker 10

  to fly is actually twelve hundred kilometers. That's the lowest you can fly where you don't have any blackout throughout the year. So I think all of it, yeah, there's very, between four hundred and five hundred kilometers is going to get extremely crowded. I think where the AI satellites fly will will get very crowded, but it'll be for a different use case. I don't think they're going to be competing for the same real estate, essentially.

• 1:37:45Speaker 00

  Because are you going to run into Kessler Kessler effect problems if you go that high? I mean, that's.

• 1:37:50Speaker 10

  Orbital debris.

• 1:37:51Speaker 00

  We're talking. Yeah.

• 1:37:53Speaker 10

  Uh, the the main reason people don't want to fly that high right now is actually radiation from the Van Allen radiation. Do you mean because there's less drag? If you have any collision there, the debris is going to stay up for longer.

• 1:38:08Speaker 00

  Yeah, for millions of years. Yeah.

• 1:38:10Speaker 10

  Yeah. Well, even even at a thousand kilometers, you probably most stuff is going to deorbit within about fifty years. So which is not great. I mean, but it's not the, for example, I don't know if you know about in nineteen seventy, the US government dispersed four hundred million needles at about three thousand kilometers altitude because they wanted to bounce radio frequency off them, which is insane. So to think about that today.

• 1:38:32Speaker 00

  This is it was like an artificial ionosphere.

• 1:38:35Speaker 10

  Yeah, it was the most insane thing ever. But today.

• 1:38:39Speaker 00

  Yeah.

• 1:38:40Speaker 10

  Yeah. You can't imagine it being done today. But actually, every single one of those needles is now de-orbited, which people don't realize because people think that if you, you know, if you have quite a large satellite, it will stay up in at 3,000 kilometers for quite a long time. But things which are much smaller and don't have their own propulsion because of the way the sun and moon and all of the solar wind interact together. Every so often, they get closer to the earth and then they get dragged in and dragged in and dragged in. Because of the fact is, is something we really need to worry, pay attention to, but it's not as drastic as I think a lot of people sometimes.

• 1:39:20Speaker 00

  That's, that's good news.

• 1:39:21Speaker 01

  Salim, you have a question.

• 1:39:23Speaker 00

  Wait, what about cooling? I mean, cooling and radiation. Oh, sorry, go ahead, Salim.

• 1:39:28Speaker 03

  I was gonna ask that exact question.

• 1:39:31Speaker 00

  Oh, were you? Yeah, we were talking about this. I forget, you know, Philip, we were talking either in Riyadh or at A360, I forget where, but you had this all aluminum cooling and I was like, wow, that'll be incredible if that works. But that sounds like you're gonna move to, to liquid cooling or some kind of a liquid cycling process.

• 1:39:48Speaker 10

  Yeah, yeah. Well, it's, it's liquid through aluminum. So that, yeah, that design is the same as, yeah, it was in Riyadh, I think, that we spoke. Exactly. So it's a very large, low-cost, low-mass, deployable radiator. So radiators, we know work because the International Space Station has been doing it for 20 years. The problem with the ISS radiator is it is both expensive and heavy. And so the core.

• 1:40:11Speaker 03

  It's a government project. What else do you expect?

• 1:40:15Speaker 10

  Expensive, heavy, and light. So the core IP of our company is making this radiator cheap and light. And it's not a new physics problem, it's a manufacturing and engineering problem. And so our radiator design, and we've got it working, it's fabricated and gone through T-VAC and everything, is, our radiator design is 10 times less mass per watt of dissipation than the ISS radiator and about 100 times less cost. Yeah, about 100 times less cost per watt of dissipation than the ISS radiator. So I'm excited, that will, that will fly in January and it will be a big milestone, by far the largest commercial deployable radiator.

• 1:40:55Speaker 03

  I wanted to double click, I wanted to double click on something you said. Did you say over time, 95% of the compute we use will be done in space?

• 1:41:04Speaker 10

  99.9% I think over time. Wow. But that's on Alex's Dyson Swarm timeframe. That's right.

• 1:41:13Speaker 01

  So Philip Masasun just came out with a statement saying he disagrees with a thesis of orbital compute because energy is only 7% of the cost compared to everything else. Where do you come out on that? What's your answer to him?

• 1:41:31Speaker 10

  I did a post about this this morning because people kept tweeting at me. So I was like, okay, well, he also sold all of his Nvidia stock in 2019. So he's not always right.

• 1:41:44Speaker 10

  No, I mean, he is right that energy is a very small proportion. Energy and infrastructure, though, is actually quite, well.

• 1:41:55Speaker 10

  Yeah, I mean, it depends on, right now, chip cost is very high, and so that is by far the dominant cost. But if you include energy and infrastructure, you're talking about at least 30% of the cost. The main problem is, if you even, you know, to build a new energy project terrestrial, you're looking at like a five to 10 year long lead time on just the permitting of that.

• 1:42:15Speaker 01

  Yeah.

• 1:42:16Speaker 10

  And so the main problem is we can deploy this stuff extremely rapidly. So even if we were break even on energy and infrastructure, it would still make sense to do this. But we're looking at doing this about 10 times cheaper on both energy and infrastructure. But when I say infrastructure, what I mean is, we don't need batteries, cooling towers, big chillers, backup power. All we need is a dirt cheap radiator. Our radiator is really dirt cheap. And then a lot of the other infrastructure costs are gone. It's only then the launch cost is the additional piece we have. But that, as I say, is very rapidly trending towards a much lower launch cost.

• 1:42:56Speaker 02

  All right, Philip, if I might just pull the thread a little bit on launch. So projecting conservatively 20 to 30 years out, where do you think launch is going to come from? Or will we be using railguns to launch from the lunar surface? Will we have optimistically self-replicating von Neumann probes that are disassembling our solar system to build more compute? Where is all the matter and energy and launch coming from 20 to 30 plus years out in your mind?

• 1:43:27Speaker 10

  Um, I am, uh, Eli has this great quote, something like Optimus is the von Neumann probe. And I kind of agree with him. Like if you can get a hundred thousand Optimis to the surface, to the lunar surface and get them to build an Optimus factory on the lunar surface, uh, you know, then we're off to the races. Like then you have this insane exponential curve in terms of development, pace of development.

• 1:43:51Speaker 00

  Hyper exponential, yeah.

• 1:43:53Speaker 10

  Yeah, absolutely. Hyper exponential. Yeah. So, um, I do think we'll have mass drivers on the moon and I think they'll probably come sooner than most people. Well, if it was 20 years, I think that would, that if it was less than 20 years, that would be maybe surprising to me. If it was more than 20 years, I'd also be a bit surprised. Yeah. Around the, that time.

• 1:44:13Speaker 00

  All right, let's move to our last. I apologize. I apologize. I have one of the senior execs from State Street Bank waiting for me outside the door here and I'm gonna love watching this podcast because all of my questions are in Alex and Saleem's heads, but I can't wait to hear your answers. So super excited about what you're doing now. Congratulations.

• 1:44:31Speaker 01

  All right, Dave.

• 1:44:32Speaker 10

  Thanks so much, Dave. Appreciate it.

• 1:44:33Speaker 01

  See you, see you very soon again on our next pod recording, but let's move to our last story on the docket here. Rocket Lab is acquiring Iridium, creating yet another fully integrated, you know, space powerhouse. So Rocket Lab, for those of you who don't know, is a company started by Peter Beck, actually Sir Peter Beck. It's a $64 billion company now. Kudos to them. I mean, going, you know, Peter had no background in launch and he built arguably the second tier provider for launch after, after SpaceX. They have their Electron Launcher. It's a smaller sized launcher, but it's launched 91 times. It's got a very high reliability at this point. They're building their next vehicle called

• 1:45:13Speaker 01

  the Neutron. It's about half the size of Falcon 9 and it's planned for a first launch by the end of this year. Like Falcon 9, it's got a first stage which is reusable. Um, and they're acquiring Iridium. Um, I know Iridium well. I was playing in the big Leos in the early 90s when it got its license and started. Uh, it started commercial service. November of 1997 and it's a 66 satellite constellation orbiting at about 780 kilometers. A fun story. I don't know if you know this, Alex. It was originally called Iridium because it originally had 77 satellites, which is the atomic number for Iridium. When they changed it to 66 satellites,

• 1:45:57Speaker 01

  they did not change the name to Disperosium, which is atomic number 66. A good marketing move there.

• 1:46:04Speaker 02

  Also, I think it's a little bit more stable as a nuclei.

• 1:46:09Speaker 01

  Yeah, and you know, it sounds a lot better than Disperosium. So what makes Iridium interesting is it's got 10.5 megahertz of bandwidth at L-band that's globally coordinated. So they go through the ITU and they get, you know, importantly for our viewers here, you can get 10.5 megahertz in the US, but can you get in every country around the world? And that's what makes it a prize. So spectrum is the prize and vertical integration here is becoming the winning structure for the new space economy. So owning launch and manufacturing, they build, you know, at Rocket Lab,

• 1:46:50Speaker 01

  they build their own satellites as well and getting spectrum and operations is a winning combination. So they're playing on the SpaceX handbook. Pretty, pretty extraordinary. Thoughts for you, Philip?

• 1:47:06Speaker 10

  Yeah, I mean, it's a very smart move, I think. And it's particularly smart because, yeah, I think there's been quite a bit of commentary, people saying, you know, he's not trying to compete directly with SpaceX with this. And if he was, it probably wouldn't be as a smarter move. He's really carving out a niche. And the other thing is, his share price has gone to an insane multiple of his revenue and he's capitalizing on that because I'm pretty sure all of this is going to be in Rocket Lab's stock. And so Yeah, it makes sense to start paying for cash generative profitable companies in Rocket Lab stock when you're trading at a however many hundred X revenue multiple that they're

• 1:47:51Speaker 10

  trading at.

• 1:47:52Speaker 02

  I have to ask Philip a question just about the Spectrum side. There are a bunch of obvious questions I could be asking about vertical integration and does Spectrum and Leo Compute want to inevitably own or be owned by heavy launch capability? But I just want to focus on Spectrum. So to the extent part of the Iridium Rocket Lab story is the acquisition of RF Spectrum, I have to ask you, do you think radio has a future? Or will we find ourselves five to 10 years from now where it's all optical frequency direct laser links and radio has approximately no future?

• 1:48:28Speaker 10

  It's a great question. I would lean more towards the second of those two options. I wouldn't say radio has no future. It's useful because it's cheaper, because you don't need gimbal things. But laser is where everything's going. We've got three laser terminals on our second satellite launching in January with gimbal lasers. We're actually just signed a contract with SpaceX to for the next 25 of our satellites will have two Starlink, they call it laser plug and play laser terminals on our satellite and then one laser, SDA compliant laser that can connect with the government satellites. So yeah, lasers

• 1:49:13Speaker 10

  are the future for space comms and it's also unregulated, which makes it amazing.

• 1:49:17Speaker 01

  All right, guys. I apologize. I've got a hard out here as well. Philip, a pleasure and excited to watch Star Cloud 2 and Star Cloud 3 make it to orbit. Thank you for joining us. Saleem, are you coming home eventually?

• 1:49:33Speaker 03

  Hi, I am. I'll be here for a few more days and then I'll be back.

• 1:49:36Speaker 01

  All right. And Alex, how about you? What's your, what's your travel schedule looking like?

• 1:49:40Speaker 02

  Well, I don't know. I'd love to visit Leo or Sun Synchronous Orbit sometime soon. Philip, we should chat.

• 1:49:46Speaker 10

  We should, we should. And Peter, I think you're going to be in Paris in a week, so I might see you there.

• 1:49:50Speaker 01

  I think I may be there virtually. Oh, no.

• 1:49:53Speaker 10

  I see, I see.

• 1:49:54Speaker 01

  Wait, where am I? No, I'm in, I'm in.

• 1:49:57Speaker 03

  I'm calling the cattle black.

• 1:49:58Speaker 01

  Yeah, Calgary, Germany and Greece. Yes. Love you guys. Again.

• 1:50:04Speaker 02

  Thanks, Peter.

• 1:50:05Speaker 01

  Thank you, buddy. Thank you, Alex.

• 1:50:06Speaker 02

  Take care, guys.

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