FULL INTERVIEW: Why I Think Nvidia Is Perfectly Positioned In The AI Race

This is our full interview with Tae Kim, recorded live on TBPN. We discuss why he believes fears around Nvidia and AI infrastructure are overblown despite recent market pullbacks, unpack how exploding inference demand from coding agents and enterprise adoption is driving a sustained compute shortage that Nvidia is uniquely positioned to capture after locking up key supply, and debate what this next wave of AI means for everything from GPU scarcity and chip strategy to token demand, vertical agents, and whether the current boom is the early innings of a multi-year expansion or the setup for a future compute glut. Sign up for TBPN’s daily newsletter at TBPN.com TBPN.com is made possible by: Ramp - https://Ramp.com AppLovin - https://axon.ai Cognition - https://cognition.ai Console - https://console.com CrowdStrike - https://crowdstrike.com ElevenLabs - https://elevenlabs.io Figma - https://figma.com Fin - https://fin.ai Gemini - https://gemini.google.com Graphite - https://graphite.com Gusto - https://gusto.com/tbpn Labelbox - https://labelbox.com Lambda - https://lambda.ai Linear - https://linear.app MongoDB - https://mongodb.com NYSE - https://nyse.com Okta - https://www.okta.com Phantom - https://phantom.com/cash Plaid - https://plaid.com Public - https://public.com Railway - https://railway.com Ramp - https://ramp.com Restream - https://restream.io Sentry - https://sentry.io Shopify - https://shopify.com Turbopuffer - https://turbopuffer.com Vanta - https://vanta.com Vibe - https://vibe.co Sentry - https://sentry.io Cisco - https://www.ciscoaisummit.com/ai-virtual-summit.html Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  Hey Kim, how are you doing?

• 0:02Tae Kim?

  Hey, great.

• 0:02John Coogan?

  Thank you so much for taking the time to come chat with us.

• 0:06Jordi Hays?

  And congratulations on the incredible launch of your business.

• 0:10John Coogan?

  Yes.

• 0:10Tae Kim?

  Thank you. I mean, it's been really gratifying. That first day, you never know who's going to show up.

• 0:16John Coogan?

  Totally.

• 0:16Tae Kim?

  I was thinking maybe 15 subscribers or 20 subscribers, but like hundreds of people showed up. Tons of billionaires and tech founders. It's insanely gratifying. Thank you.

• 0:26John Coogan?

  Yeah, it's great.

• 0:27Jordi Hays?

  Incredible.

• 0:28John Coogan?

  So, is it over for Nvidia? They're down 21% we just read since the 52-week high. Is it doom and gloom? Is it over?

• 0:38Tae Kim?

  No. I mean, I think I was on last December and the stock is, semis and chips have gone up and now they're back down to where they were in December. The chip sector's flat on the year. Nvidia is down 10%. And it reminds me a lot about a year ago. Do you guys remember? Everyone was freaking out about deep seek, the super efficient models. We're going to destroy AI compute. There will be a huge compute glut. And then everyone freaked out about Trump's tariff wars, the liberation day. And this year seems very similar to that. Almost it's like Groundhog Day. We have fears over AI capex. People think that it might be the peak.

• 1:19Tae Kim?

  And then we have the Iraq war. And one of these things is the oil up here.

• 1:25Jordi Hays?

  Iran. Easy to get it mixed up. They happen so much.

• 1:28Tae Kim?

  It feels like the same thing over. But, um.

• 1:33Jordi Hays?

  Sorry to distract. We wanted to.

• 1:35John Coogan?

  We want to show respect.

• 1:37Jordi Hays?

  We wanted to show respect.

• 1:38John Coogan?

  To a real podcaster.

• 1:41Tae Kim?

  I mean, it's very similar to Iraq.

• 1:45John Coogan?

  These are great.

• 1:45Tae Kim?

  But in $100 oil, this stuff is unsustainable and will probably subside.

• 1:51John Coogan?

  Okay, so, because when I, I like the deep seek analogy and I feel like the market half digested the agentic coating narrative. And the Citrini article, whether you thought it went too far, it was too hypothetical, like clearly the markets did react and a lot of names sold off, but. In a world where you believe that narrative, you would think that Nvidia would be going up. But you're saying that there are other factors at play that are sort of tamping down the excitement in the market broadly.

• 2:20Tae Kim?

  I mean, there's no doubt, just like tariffs a year ago, Nvidia had 30% drawdown.

• 2:25John Coogan?

  Yep.

• 2:25Tae Kim?

  When their business was actually flying, the actual fundamentals of the business. I think the same thing is happening here with the Iran war.

• 2:34Tae Kim?

  Things will eventually subside. Oil can't be $100 for forever and Trump will probably backpedal in the next few weeks. Ahead of the Trump.

• 2:41John Coogan?

  So let's recap a few of the key stories around Nvidia. We just came off of GTC and there's a lot going on at the company. I mean, it's a huge company. Maybe it'd be good to start with just next generation chips, changes to strategy, what people are actually buying. Maybe that means great CPU standalone sales or the development with the Grok partnership. What's sticking out just on the actual AI product side to you that you're most excited about?

• 3:14Tae Kim?

  Well, inference demand is exploding, driven by the AI agents.

• 3:18John Coogan?

  Sure.

• 3:18Tae Kim?

  And the coding assistance.

• 3:20John Coogan?

  Yeah.

• 3:21Tae Kim?

  What I met with Ian Buck, I met with dozens of engineers at Meta, Google, Nvidia. And all of them are seeing crazy inference demand and AI compute shortages. So across the board, people are in crazy clamoring need for AI.

• 3:37John Coogan?

  And we're, I mean, we're, yeah, you're seeing that from talking to engineering leaders at big tech companies. But we're also seeing it from vibe coders who are just on X and Twitter and talking about how they're hitting rate limits. And they're, they're subsidized and they have multiple plans and they actually shift around from one model provider to another just to make sure that they're getting the tokens they need to build whatever they're building.

• 3:58Tae Kim?

  And you see the tweets, like people are like. Building bots to pick up any kind of B200 GPU that can.

• 4:07John Coogan?

  Oh, yeah.

• 4:07Tae Kim?

  They're waiting like weeks and months or whatever.

• 4:09John Coogan?

  Basically like sneaker bots, but for Neo Cloud.

• 4:12Tae Kim?

  That's crazy. Exactly.

• 4:13John Coogan?

  I can't believe that.

• 4:15Tae Kim?

  And the great thing is Jensen, you know, he's very prescient. He probably saw this demand months away. He locked up all the supply agreements for memory, co-OS, you know, connectors ahead of time. He saw this inference demand and to take advantage of this coding system boom. It's almost like a gold rush. You see OpenAI pivoting toward it. Anthropic obviously is thriving on it. Billions of ARR every few weeks. And Jensen's acquired Grok, acquired the assets of Grok and the people of Grok. And this, the combination of integrating Grok's technology together with Vera Rubin, lets Nvidia serve this tremendous wave of compute demand economically.

• 5:00Tae Kim?

  And Ian Buck talked about it. Jensen talked about it. So Nvidia is positioned perfectly to thrive on this coding agent wave that we're seeing right now.

• 5:08John Coogan?

  On the Grok deal, Jensen did a fantastic interview with Ben Thompson and was sort of asked the same question two years in a row about ASICs, the threat of ASICs, the idea that the GPU, the general like, like general architectures can truly satisfy 100% of demand. It feels like there's a shift in Nvidia's strategy there. Do you see that? It feels like the right move, but do you, do you see it as a shift in the philosophy of the company or the strategy? Or, or is this just something that the gears have been turning for a long time? And this is maybe just an unveiling of a strategy that makes a lot of sense and has made a lot of sense for a while.

• 5:52Tae Kim?

  I think what Johnson does, he sees where the market is shifting and where the economic value is with Mellanox, he did this in 2019.

• 5:59John Coogan?

  Yeah.

• 5:59Tae Kim?

  He saw the world shifting to, it's a networking chip, but he saw the world shifting to like these 10,000, 100,000 GPU clusters and Mellanox. And in the same manner, he saw AI agents and the inference behind that taking off. And he said, oh, this Grok thing will work perfectly. It doesn't replace everything. And Johnson has talked about 25% of the inference demand would be, Grok would work on that. But them working together where 75% of the inference is Verarubin, 25% is a Grok low latency stuff, that's, it's like the perfect combination to take advantage of this.

• 6:39Tae Kim?

  And the other thing is, like, we're just in this great liftoff of AI innovation. We've talked about anthropic mythos, the blog post that leaked out. So we're going to have this, you know, step up function. They told Fortune it's going to be a huge step up change. OpenAI is coming out with their model soon. And then when I went to GCC, the biggest takeaway I had was this session between Jeff Dean and Bill Dallie, both chief scientists of Google and Nvidia. And it's online, I highly recommend people watch it. And he talked about, Jeff Dean talked about the context, have context window innovations where they could focus on the 10,000 documents that work well with your request and query. So we're going to have this context window innovation.

• 7:23Tae Kim?

  Both chief scientists talked about stacking memory right on top of the GPU or TPU, and that's going to be a huge innovation in the coming months or years. And so you have, and then Jeff Dean talked about synthetic data for audio and video. There's this huge runway that data is not over, and then they're going to be able to take advantage of all this data that people don't realize yet. So you have like all these vectors where AI models you could just keep getting better and better.

• 7:54John Coogan?

  Yeah. How are you processing the idea that Nvidia will be investing in an open source frontier lab capability? That feels like potentially competitive with some customers. Nvidia is like never really been in that market before. But at the same time, I've been the biggest like supporter of open source American AI models. I loved when Meta was doing it. I want more of it. I loved when OpenAI, open source GPT OSS. It feels really, really important, really great, but it does feel like a strategic shift. How did you process that announcement?

• 8:32Tae Kim?

  It's not a huge, I think it's like 25 billion over the next few years, which doesn't really compete with what OpenAI and Anthropic doing.

• 8:39John Coogan?

  Yeah, I guess you're right.

• 8:40Tae Kim?

  But these smaller models are going to be helpful for people running smaller use cases.

• 8:45John Coogan?

  Sure.

• 8:46Tae Kim?

  GPUs, as long as they're utilized even locally or in the cloud, Nvidia benefits.

• 8:51John Coogan?

  Yeah.

• 8:51Tae Kim?

  And saw the, the, the top people at Quen left and we don't know where they went left to. Quen is an amazing model. It's kind of like what Deep Deep is, what people thought Deep Deep should be. Quen works well locally.

• 9:04John Coogan?

  Yep.

• 9:05Tae Kim?

  Quen kind of subsides because all the people left.

• 9:07Jordi Hays?

  What's your theory on, what's your theory on where they all went? Another Chinese lab or international?

• 9:13Tae Kim?

  I asked, I asked all the engineers when I was at GTC. No one really knew. But people are, people are trying to say Nvidia should actually hire them.

• 9:20John Coogan?

  Yeah.

• 9:21Tae Kim?

  Because the more capable open source models, Nvidia doesn't care if you're using GPT to run open source or not. They just want, you know, more AI adoption across the board.

• 9:31John Coogan?

  Yeah. And Nvidia has more, probably more levers to pull if it, if it turns into a negotiation with China. Like we're, we're, we're tracking like the Manus story with Meta. And there isn't that much that Meta can give to China in exchange. If there's like, hey, like look the other way on this particular deal, like let this one flow through. We'll trade this. Meta not really doing any business there, but Nvidia of course is going to be selling black wells at some point in the near future. And there's probably some level of pricing, you know, it can be part of a larger discussion, which makes a lot of sense.

• 10:07Tae Kim?

  And one thing that kind of went under the radar, Jensen literally said at GTC, they got license approvals on both the US and China side. So we're going to see billions of dollars of H200 orders.

• 10:18John Coogan?

  Okay, so yeah, I mean, it seems like it seems like there's a path on the demand side that's very, very clear. You've mapped it out a few times. It's a huge number. It's already a massive revenues, just in incredible growth. But what is what is the supply side looking like? Because it feels like TSMC is not ramping CapEx nearly fast enough over the next few years. And if we see another 10x increase in compute demand, we could be really constrained on the leading edge FAB side. So how do you think Nvidia is going to process that?

• 10:54Tae Kim?

  Well, Nvidia is in the driver's seat because Jensen goes there five, six times a year and his best friends at TSMC and speaks at their employee day. So they're going to get higher. They are getting a higher allocation to wafers and co-LoAs and all that stuff. So Nvidia will benefit. But I agree with you that industry wide, like, Google is dying to get more TPU wafer capacity.

• 11:14John Coogan?

  Sure.

• 11:16Tae Kim?

  All the all the hyperscalers that have ASICs are trying to get more wafer capacity. So there is going to be an AI compute shortage in the years to come, just like you said.

• 11:26John Coogan?

  Yeah.

• 11:27Tae Kim?

  And Nvidia just benefits because, you know, they're the biggest dog in the house and they can prepay tens of billions of dollars to get the allocations they need.

• 11:35John Coogan?

  Yeah. I mean, maybe there's some offtake in ASICs that can potentially be fabbed somewhere else at some point. I don't I know that a lot of the ASIC companies wind up fabbing at TSMC, but it feels like if you're already doing some sort of rearchitecture, maybe there's a way that you can get you can squeeze something a little bit out of, you know, an Intel deal or something else. I'm not exactly sure.

• 11:59Tae Kim?

  It's Samsung and Intel.

• 12:01John Coogan?

  Samsung and Intel, yeah.

• 12:03Tae Kim?

  FAB. Possibly do it.

• 12:05John Coogan?

  Yeah.

• 12:05Tae Kim?

  That's the bookcase on Intel.

• 12:07John Coogan?

  Yeah, yeah, is that is that at some point the labs and and Google like like we're across TPU, extra GPU capacity, Nvidia, the new R like there's just so many buyers of lab capacity of fab capacity now that you could imagine everyone coming to the table potentially in Washington DC or Mar-a-Lago since the US government owns a slice now and everyone's saying, okay, let's hold hands and jump across this and say that if the if the if the supply comes online, we will buy it at this price because we have really, really solid use cases that that will justify the investment for us and for Intel. So that would be a really, really

• 12:49John Coogan?

  good case. But again, even if the money is there, how long does it take to get to, you know, good production numbers?

• 12:55Tae Kim?

  I mean, I suspect like Apple and Nvidia are considering either Intel or Samsung for their lower end stuff.

• 13:02John Coogan?

  Yeah.

• 13:02Tae Kim?

  Whether it be like a mid range iPhone or Nvidia side, definitely their consumer gaming GPUs. They may go back to Samsung and maybe even Intel.

• 13:11John Coogan?

  Yeah, I have one more, but.

• 13:12Tae Kim?

  Go for it.

• 13:13John Coogan?

  I wanted to know how you're processing the ARM CPU announcement. It's an interesting dynamic because they're sort of frenemies with Nvidia now. They're competing in many ways to break the x86 monopoly because they both are selling ARM CPUs, but then they're also competing. And so I'm wondering how you think that plays out, what that means for Nvidia and just the rest of the semiconductor supply chain.

• 13:42Tae Kim?

  I think ARM is their CPU opportunities, a longer term, you know, for even they said 2030, 2031.

• 13:49John Coogan?

  Yeah.

• 13:49Tae Kim?

  It's a longer term opportunity. I don't really expect the major hyperscalers like Amazon to switch to ARM's product offering. They have their own. And same with same with Nvidia, they have their own ARM CPU that they're they're going to incorporate and sell. So it's not that big of a. I don't think Amazon or Nvidia are really worried that ARM is going to take any big share. It's probably going to be on the margin for companies that can't develop their own ARM CPU, the more the mid-tier hyperscalers or enterprises that use these things. But I think the ARM thing is very important because it kind of confirms what the biggest underlying thing that's not really consensus yet is this massive CPU shortage that we're seeing.

• 14:34Jordi Hays?

  Yeah.

• 14:34Tae Kim?

  Just over the last few months, we have Dell, AMD, Intel CFO talked about, they're talking about three to five year locked in supply contracts from hyperscalers. So this is a major trend that's going to go over the next few years. And the reason why is AI agents need more CPUs. The ARM CEO talked about four times more CPU cores versus last year's kind of AI infrastructure model. So we're going to see this massive demand for CPUs that people aren't really understanding it because AI agents, the whole thing, requires orchestration, tool calls, database queries, web searches, and that's all handled by the

• 15:19Tae Kim?

  CPU.

• 15:20Jordi Hays?

  Yeah. Give me your bull and bear case for TeraFab.

• 15:25Tae Kim?

  TeraFab, I'm not that optimistic. I mean, it's so hard to build that.

• 15:31Jordi Hays?

  Give me, do your absolute best to give me the bull case.

• 15:36Tae Kim?

  Because TSMC is so short that, you know, Elon needs to find. But even then, like, how is he going to buy like semi-cap equipment from ASML and AMAT? Like, there's just no capacity there. So I'm not optimistic on that.

• 15:53Jordi Hays?

  Hmm.

• 15:54Tae Kim?

  And this is stuff that takes decades.

• 15:58Tae Kim?

  Chip fabs is almost like cooking and it's not like something you could just follow follow a manual. It's like it's almost like cooking where it takes a lot of trial and error accumulated over decades, TSMC and even Intel. So it's not something you could just jump right in and do.

• 16:17John Coogan?

  Yeah.

• 16:17Tae Kim?

  Unless they partner with.

• 16:20John Coogan?

  Yeah, it's someone goes back to the XAI debate about like, do they need AI researchers? Or should everyone be an AI engineer? Like, are we in a research period or a, you know, the Ilya Sutskever age of research versus the Elon Musk age of engineering? Where are we in semiconductor production? It feels very engineering, like, like an engineering process, but what we've seen from ASML is that it and in TSMC is that it does feel like there's a little bit of research and artistry to it and the cooking analogy holds.

• 16:55Tae Kim?

  Yeah, I've been doing a lot of search into space and it's a lot of trial and error and like cooking a recipe.

• 17:02John Coogan?

  And, and, and it also feels like in, at least with XAI, if all the researchers are in San Francisco, you can sort of just like walk across to the coffee shop, poach someone. But if, if the best, if the best, you know, semiconductor engineers or technicians are in Taiwan and they see it as a national, you know, urgency to, you know, bring, you know, stability to the country, both economically and geopolitically, then you have a very different calculation. It's like, oh yeah, I could make five times as much if I left my home country to like be abandoned. That's a very different calculation. And, and everything that I've heard about the culture at TSMC is that the, the folks who work there are

• 17:46John Coogan?

  extremely dedicated beyond the economics. They are true missionaries, not necessarily mercenaries. And so it does feel like it's even harder to do like a talent raid in, in the leading edge fab world than even the AI world, which is extremely competitive and there are still tons of missionaries, but.

• 18:04Jordi Hays?

  I guess, I guess another question I have is, would you expect, would you expect XAI slash SpaceX at any point to get to basically just open up a shop as like a NeoCloud? Because the thing that was like probably the one of the least compelling aspects of, of the TerraFab pitch. Was him just saying, we need all of this compute.

• 18:26John Coogan?

  Hmm.

• 18:26Jordi Hays?

  We need to do this because we we're going to be so chip constrained, we're going to be so supply constrained, but there was no explanation of

• 18:33John Coogan?

  Where the demand is coming from.

• 18:34Jordi Hays?

  Where the demand was going to come from, is it going to come from?

• 18:36John Coogan?

  Training Tesla models, Optimus, or Grok, or Twitter.

• 18:42Jordi Hays?

  It was just very unclear.

• 18:43John Coogan?

  There's a lot.

• 18:44Jordi Hays?

  But there's even the question right now is, should XAI be kind of renting GPUs? I don't know, I don't know.

• 18:52John Coogan?

  Renting out GPUs? Because the biggest win has been Colossus 2. Yeah, Colossus 2, which was built very fast.

• 18:59Tae Kim?

  I I think Elon's pitch with the SpaceX IPO, and we'll see it in the coming months, is the AI compute is going to be so, there's going to be so much demand over the next five, 10 years, that you're going to have to use these SpaceX satellites that have GPUs in them to to serve that.

• 19:17John Coogan?

  And and maybe, maybe, I mean, even though Tesla's been vertically integrated to the point of being a consumer product, SpaceX has not, it's been a railroad, and there is a world where you fab the chips, you put them on satellites, on Starlink's in space, and then you let other companies do whatever they want with those GPUs.

• 19:34Tae Kim?

  Think what Elon did with Starlink. I mean, that's a telecom infrastructure play, and this will be an AI computing infrastructure

• 19:40John Coogan?

  Yeah, yeah, yeah, yeah.

• 19:41Tae Kim?

  That fits that model.

• 19:42John Coogan?

  There's a world there.

• 19:43Tae Kim?

  I'm not going to bet against Elon.

• 19:45John Coogan?

  Yeah, yeah, yeah.

• 19:47Jordi Hays?

  Uh, what about, what's going on with helium? What are you tracking there? There's chatter about helium shortages, potentially.

• 19:54Tae Kim?

  Jensen has talked about this, this is a risk, but there is probably like six months, six to nine months of inventory in the channel. Bernstein has talked about it's not a risk in the short term. So, so if this thing, if this Iran stuff lasts

• 20:11John Coogan?

  Yeah.

• 20:11Tae Kim?

  in, you know, two, three, four, five months, then becomes a problem.

• 20:15John Coogan?

  Okay.

• 20:15Tae Kim?

  But if it, you know, gets solved, or its fair move opens up with the toll, or whatever final negotiation they come up with over the next few weeks, I don't think it's going to be a problem.

• 20:25John Coogan?

  Yeah, I do think that like, like most of these materials, there are extra deposits. They're just not economical to mine. I don't think that all the helium exists in the Middle East.

• 20:36Tae Kim?

  It's similar to the rare earth thing, just like you said.

• 20:39John Coogan?

  Yeah, where, where in a supply constraint scenario, it becomes more economical to mine American helium.

• 20:45Tae Kim?

  Let me put it this way, if helium becomes an issue, we're going to have bigger problems at our hands.

• 20:48John Coogan?

  Okay.

• 20:49Tae Kim?

  I mean, there's going to be world starvation.

• 20:51John Coogan?

  Let's hope not, let's hope not.

• 20:53Tae Kim?

  That'll be the least of our problems if helium becomes a problem.

• 20:56John Coogan?

  Take me through depreciation gate. How did you process that? And where do we stand now with the fear that GPUs will depreciate precipitously? And H100s will be worthless in six to 12 months.

• 21:09Tae Kim?

  It's totally not a problem right now, like CoreWeave has talked about, uh, these things are lasting five to six years. Uh, and they're getting like almost 90, 95% of the pricing. So it could be, potentially be a problem if the whole, if this is a bubble, I don't think it's a bubble.

• 21:26John Coogan?

  Yeah.

• 21:26Tae Kim?

  But if this is a bubble two, three years from now, and there's a compute glut, then

• 21:29John Coogan?

  Yeah.

• 21:30Tae Kim?

  the stocks are going to go down because there's a compute glut. But as of now, it's the opposite, like all the GPU rental prices, even for stuff that's six years old, is still being sold out and it, the AI compute demand outpacing supply is so large that this is not an issue right now.

• 21:47Jordi Hays?

  Do you have any theories on, on where the next step change in token demand could come from? Cause right now we're seeing it in code gen and there's a lot of optimism around uh, these types of workflows being applied to other forms of work. But we were talking about this on Friday, like even if AI can just one-shot beautiful financial models, it, it won't necessarily even make a real dent in token demand. At least compared to CodeGen because no company needs to just constantly be generating models at the rate that, let's say, Gary Tan generates code.

• 22:28Jordi Hays?

  And so I'm like, kind of been trying to wrap my head around where could these incremental use cases come from?

• 22:35Tae Kim?

  I actually think CodeGen is still just early innings.

• 22:38Jordi Hays?

  Yeah, and I don't disagree with that.

• 22:40Tae Kim?

  Ten, twenty agents and they're kind of overseeing them. But then we have this other stuff where these models, the Mythos and OpenAI, they're just gonna get better where you could automate all these work process flows. Companies are gonna use them for every single vertical, customer service, research, simulating chip design where they can verify drug discovery, where they verify if drug molecules can do. So we're just getting started at this stuff. So you're gonna see vertical AI agents on every single category. And I think Logan's coming on, he wrote this great post on X that he says this, the AI

• 23:20Tae Kim?

  agent wave is gonna kind of attack this six trillion dollar knowledge economy, right? It's not just about programming anymore.

• 23:29Jordi Hays?

  They're coming for us.

• 23:30Tae Kim?

  Yes. I'm actually...

• 23:35Jordi Hays?

  They're attacking the key context economy and the TVPN economy.

• 23:39Tae Kim?

  No, I think it's like a calculator, a spreadsheet. You know, thirty, forty, fifty years ago, we had like fifty accountants doing the spreadsheet manually, right? And now after a spreadsheet came, it didn't get rid of all of knowledge work, it just enabled people to think at a higher level and get more done. And I'm very optimistic about that.

• 24:01John Coogan?

  I mean, one way that you 10x token demand around a financial model without 10x-ing the number of financial models that you're building is having the agent go and collect ten times as much data. And so there's a lot of situations where, I mean, you look at like hedge funds that want to understand the price of Walmart stock.

• 24:24John Coogan?

  There are hedge funds that will task satellites to take pictures of Walmart parking lots, estimate the number of people on a day by day basis that are going into the Walmart to shop, and then using that as a proxy to project revenue and then flow that through to cash flow, and then flow that through to the DCF and the actual evaluation of the company. And if you think about all the different financial models and all the different businesses where you could go and say, well, for this company, I need to go to every single local, like, I want to know the price of Squarespace, let me go to every single website that's powered by Squarespace and estimate the revenue that they're bringing in and their willingness to pay for their hosting service, something like that. And all of a sudden, like, it's just one spreadsheet, it's just one number at the end of the day,

• 25:09John Coogan?

  but it's like a thousand times more work went into it.

• 25:12Tae Kim?

  Let me give you this great example. Every year I do this, the same store sales for these fast casual companies, so like Chipotle, Kava, and I put out this tweet, it goes viral. A year ago, when I do it, I would have to manually go to every IR website for these six fast casual restaurants.

• 25:33John Coogan?

  Yeah.

• 25:34Tae Kim?

  It would take me like an hour or two.

• 25:35John Coogan?

  Yeah.

• 25:36Tae Kim?

  I would try to use a chatbot, they would get it wrong.

• 25:38John Coogan?

  Sure.

• 25:38Tae Kim?

  I did it like a few weeks ago, and all the chatbots got perfect. So it just saved me two, three hours of tedious manual labor. So that's only going to get better and better.

• 25:48John Coogan?

  Yeah. Yeah, it's only going to take you one, like, like, this year is the year that you, you do it with multiple chatbots, and you fact-check it yourself, and then forever, it's going to be just one prompt.

• 26:00Tae Kim?

  And it got it right.

• 26:02John Coogan?

  And it got it right.

• 26:02Tae Kim?

  A year ago, it wouldn't get it right, but now, in one, two minutes, I put, give me the same store sales for these six restaurants. I put in Gemini, I put in ChatGPT, and just to, to make sure they're right, and they're right. So that, all, all the tedious labor, all the manual labor, all the data entry that, you know, all of us are used to, that stuff is going away, and we could think higher level. So I could look at the same store sales and say, oh, the economy is at risk and whatever, but all the grunt work, all the tedious work is going to be taken care of by these AI agents.

• 26:36John Coogan?

  I can agree completely. I agree completely.

• 26:40Jordi Hays?

  We got a lot of, a lot more sound effects since the last time you joined. Uh, last, uh, last question for me. What, what's your outlook on, on Meta? It feels like the, the broader market right now has zero faith in Meta to actually put all their AI investments to use.

• 26:59Tae Kim?

  I had, I had this history with Meta is that in every time it starts falling apart, I say, it looks cheap and then it goes down another 30%. But nothing has changed. Like no one's going to replace that a digital ad position. I mean, like I would even say in the AI world, they're even better positioned because Google might lose digital ads share to AI chop, chatbots, their search position going future. So like no one's going to replace Instagram. No one's going to replace Facebook. Billions of people are still going to use those, uh, social media apps and, uh, you know, it's every six, six months to 12 months, everyone goes through this bare meta cycle, but their pure competitive position really hasn't changed. And you saw what happened to Sora, right?

• 27:43Tae Kim?

  Like, you know, everyone was all excited about Sora and, and that, that got shut.

• 27:48John Coogan?

  Yeah. And, and there's just this world where even, even if like the AI spending is like a side quest, it's like, really, they just pulled forward like three or four years of CapEx and they will use that for their other products. It's probably even less like wasteful than reality lab spend, which might take even longer to realize that the cash flows from, like they can recoup. Okay. We built this massive data center. We did this training run. We didn't get to the frontier. We're not getting a lot of like gen AI usage, but we can apply it to our ads platform and tools and reels, recommendations and a million other things, just in years 2028, 2029. And yeah, we're a little bit ahead of schedule.

• 28:29Tae Kim?

  Our core ad engine monetization.

• 28:32John Coogan?

  100%. Yeah. The gen model.

• 28:34Tae Kim?

  Reality labs, he made a waste of 70 to 80 billion dollars. He might waste a hundred billions of dollars on, on these frontier AI models.

• 28:43John Coogan?

  The business is good.

• 28:44Tae Kim?

  Our ad engine, core business. That money making engine has, it's not going to be affected by this.

• 28:51John Coogan?

  Yeah. Well, thank you so much for taking the time to come hang out. Always a great time, Tay. Go subscribe to Key Context on Substack. Follow Tae Kim on social media, First Adopt.

• 29:03Jordi Hays?

  Join the many beaners that were the first adopters.

• 29:05John Coogan?

  Yes, yes, you'll be in good company. And thank you so much. We'll talk to you soon. Have a great week.

• 29:10Jordi Hays?

  Great to see you.

• 29:11John Coogan?

  Bye.

• 29:11Jordi Hays?

  Cheers.