RSI Is Closer Than People Think, Per Tae Kim

This is our full interview with Tae Kim. We discussed why the AI trade is being misunderstood, why Kimi and better open-weight models could increase compute demand instead of reducing it, Meta's AI spending, NVIDIA's open-weight strategy, the race toward RSI, why data center fears are overblown, AMD's expanding AI market forecast, the future of agentic AI, NVIDIA's CUDA moat, and much more. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.com/ Codex - http://openAI.com/codex Sign up for TBPN’s daily newsletter at TBPN.com 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?

  We have Take Him in the waiting room. Let's bring him in to the TVP on Ultra Dome. Tay, how you doing?

• 0:06Tae Kim?

  Hey guys, doing great.

• 0:08Jordi Hays?

  What's going on?

• 0:08John Coogan?

  So, so tell me, last time you were on the show, you bottom ticked it? What's going on?

• 0:13Tae Kim?

  Uh, I think I made the bullish call on CPUs, memory and Nvidia. Nvidia is up like 5, 10%, but

• 0:21John Coogan?

  Nice.

• 0:21Tae Kim?

  The CPU names have still doubled even after this big drawdown and the HBM names are up 100%. So I'm hoping that, you know, it's the same thing again. I come on here and stocks go up again.

• 0:34Jordi Hays?

  Yeah, ideally, we could have like an emergency reserve of Take Him appearances. So if the market is ever down,

• 0:40John Coogan?

  Strategic reserve.

• 0:41Jordi Hays?

  Strategic reserve. We call you up, you jump on and then it's just up.

• 0:44Tae Kim?

  It was funny because it was literally the exact bottom and, you know, it went exponential after that.

• 0:50Jordi Hays?

  The Take Him effect.

• 0:51John Coogan?

  So where are we right now with the level of FUD, the level of downward pressure on the AI trade broadly? The chips, the semi-trade, like reset for us on like where sentiment is and then we can work through the different pieces of counter examples?

• 1:08Tae Kim?

  So I think sentiment's very negative. We kind of had this huge up, parabolic up move the last few months and likely a lot of retail and hedge funds piled in and we're seeing this unwind now. I think the first, a big part of it was Iran war getting worse. Every time we had the first ceasefire negotiations, stocks started taking off right, right after that. And then when we had the actual ceasefire, we had a follow through. And then as soon as Trump started bombing Iran again, you know, chip stocks have kind of plummeted in the last two, three weeks. And then now we're seeing just, you know, back to the old pattern of media and the viral hot takes,

• 1:52Tae Kim?

  spreading a lot of FUD. I think we saw earlier this month, I think Reuters quoted like Zuckerberg's about Agentic AI. They took it out of context and then every media person was with the hot take that this Meta was seeing bad returns and they're going to cut capex. And then we had leaks right after that saying that it looks like Meta is going to raise capex. So we're seeing a lot of this hot take FUD. Yesterday, I think we had a flurry of stuff that scared people. The Wall Street Journal, venture financing article that we'll see, we'll see what happens with that. We had C M X T IPO in China and everyone freaked out over that.

• 2:33Tae Kim?

  We had the information article on ASML. We could go through each one and then the Kimmy thing, it's obviously a big thing.

• 2:39John Coogan?

  Yeah, we'll definitely get there. And I want to talk about open source and Nvidia's strategy there, obviously. Starting with the Mark Zuckerberg news in Reuters, this was July 2nd. Meta's Zuckerberg says AI agent tech progressing slower than expected. Zuckerberg added that the company's reorganization that included major job cuts was not as clean as it could have been. Zuckerberg and other Meta executives have been seeking to moderate some of the organizational changes introduced this year. And they said that the trajectory of agentic development over the last four months hasn't really accelerated in the way we expected. The company's bets on new structure haven't come to fruition yet.

• 3:21John Coogan?

  And so people were sort of reading this as maybe Meta is going to pull back, but then it felt like the response was extremely quick with, with Boz going on a podcast and Alex Wang sharing a whole bunch of progress across a few different models and data points. And then Semi Analysis wrote a whole bull case for MSL, talking about how they have compute and also they have more of like the internal structural alignment to sort of properly YOLO in the AI era. If I'm boiling it down as brutally as possible, just because with Google, there's always this debate between, oh, do you sell the TPUs or do you sell the cloud? Do you have, vend it in the product?

• 4:05John Coogan?

  Whereas Mark Zuckerberg is able to sort of like go all in on this new idea. And so maybe there's more, more glimmers of hope there. But what else have you been tracking downstream of Meta's ambitions?

• 4:18Tae Kim?

  Well, I mean, they've been very upfront that they're investing heavily in AI. Alexander Wang is tweeting multiple times every few weeks that they're, they're going full force. They're going to redo open source AI models. I think he said that at the Y C event over the weekend. And it's, I mean, if you actually look at, and then Reuters came out, I think with an article saying that they're actually going to raise capex dramatically this year and next year. So all that kind of fear that, that quote about Agentic AI from the town hall, that kind of like spooked the market for a few days, it kind of, it was completely false.

• 4:55John Coogan?

  Yeah, it feels like it's a, yeah, it feels like it's a comms error because the, the language that's been coming out of Meta has been a little bit like AI is going to replace our employees and it feels like it'd be much better for them to, to come to the market with a message of, we're going on the offensive, like we're a hyperscaler.

• 5:14Tae Kim?

  Well, to be, to be fair, that, that was the internal town hall. They didn't mean to leak it. And Reuters leaked that one quote and put it out, put out the headline before their article came out.

• 5:23Jordi Hays?

  Yeah, it's interesting. Like Meta, did Meta basically go through like an eight year period where like internal town halls didn't instantly leak?

• 5:30John Coogan?

  I think everything leaked always. I think, I think everything's been.

• 5:33Jordi Hays?

  I know, but there was, there was a period where like the, the, the sort of attention of the media

• 5:38John Coogan?

  Sure, sure.

• 5:38Jordi Hays?

  was way, way, way less on like what Meta was doing internally relative to the 2010s. And all that attention just went to the labs, right?

• 5:48John Coogan?

  Yeah, yeah, yeah. No, that makes sense.

• 5:50Jordi Hays?

  Yeah, I guess the question is like,

• 5:54Jordi Hays?

  the question that I keep coming back to is like, where is their revenue ramp? Where is their AI revenue going to ramp and when? Right? Because as you just keep.

• 6:05John Coogan?

  Zuford would say ads, like the ads, like the AI has.

• 6:07Jordi Hays?

  Yeah.

• 6:08John Coogan?

  They're ads, they're accelerating, everything's good there.

• 6:10Jordi Hays?

  That's always been my view too, but when you're, when you're continuing to ramp capex

• 6:16John Coogan?

  Yeah.

• 6:16Jordi Hays?

  with and saying like, we're going all in on agentic and we're building a harness and we're also going to do open source. And it's like, well, what is the strategy?

• 6:25John Coogan?

  Sure.

• 6:26Jordi Hays?

  Like, where, where, what is going to take you to a billion dollars of like pure AI product revenue?

• 6:32John Coogan?

  Yep.

• 6:33Jordi Hays?

  Or, or, or just API revenue, what's going to, and then to five and 10? And what's going to allow you to like justify this spend other than, I think the market would love it. They just said, yeah, we actually need all these GPUs because we can actually be 10 times, we're already good at ads. We can be 10 times better. And that's where we're going to get the ROI on all of this capex.

• 6:54Tae Kim?

  Well, they're definitely getting ROI in that. The market is worried about, you know, all those extra capex on those. They're going for the frontier AI model race again and they had to reset. Like they had to, a lot of people left and now Wang hired a ton of people and we'll see what happens over the next. It's going to take time. It's going to take six to 12 months before we can see any more progress. But that first model that came out a few weeks ago was a lot better than people expected. It wasn't, you know, the frontier, but it was much better than what people expected.

• 7:24John Coogan?

  Yeah, yeah.

• 7:27John Coogan?

  So how have you been processing the Nvidia letter around open source? And all the back and forth, all the people jumping on, the companies that have been staying back?

• 7:40Tae Kim?

  I think it's been very impressive what they've been, they've basically united the entire tech industry against Anthropic in the last like three, four days.

• 7:49John Coogan?

  18 trillion in market cap has signed on. Last time I checked across.

• 7:54Tae Kim?

  I mean, Google took a little time, Amazon signed on eventually.

• 7:58John Coogan?

  Oh, they did?

• 7:59Tae Kim?

  Yeah. They signed on yesterday. They tweeted out.

• 8:01John Coogan?

  Interesting. I think Apple is still the holdout.

• 8:04Tae Kim?

  Apple's the one, which is kind of strange because they're the one that would most benefit from open source, open weight models being, you know, more available, I would think, but I don't know what Apple. But I mean, they pretty much got the whole tech industry to kind of corner Anthropic in their position.

• 8:23John Coogan?

  Yeah.

• 8:24Tae Kim?

  OpenAI signed on.

• 8:25John Coogan?

  Yeah. What did you think of Jario's?

• 8:27Tae Kim?

  Obviously Nvidia is afraid.

• 8:28Jordi Hays?

  Yeah, I don't know. I don't know how, how if, I don't know if they're really.

• 8:36Jordi Hays?

  I don't read it as being like cornered by any means, right?

• 8:40Tae Kim?

  Well, Jensen is on the record that, you know, he said, I think to Bloomberg that there was a rising sentiment that something was going to happen on the on the regulation front at White House or whatever.

• 8:52Jordi Hays?

  Sure.

• 8:52Tae Kim?

  So this was kind of.

• 8:53Jordi Hays?

  Yeah, we saw that this was, this was last week, you had at least four people in the admin. Say, we're not against open weights, we're against distillation, and at least I was reading into that of some type of regulatory action around open weights and then positioning it as we're targeting.

• 9:11Tae Kim?

  This is, this is like. Pretty much what Dario wrote yesterday, yeah. Um, about, you know, pushback and restrictions and he's doing it under the safety umbrella, but uh, definitely Microsoft and Nvidia are worried that what the White House or Congress is going to do something on this front and that's why they.

• 9:31John Coogan?

  Yeah, it seems very reasonable that he would have no problem with like Gemma or Llama or any of the open source from like American hyperscalers where if you find out that they're distilling, you just walk across the street and sue them. Uh, and also these big companies have huge, huge, I mean, they have safety teams, but also just like huge incentives to not have a safety incident happen on their watch because you're trying to like catch up to the frontier and then all of a sudden you have a safety incident. That's going to be really bad for your overall brand. Uh, and you have a different business to protect, whether it's social networking or uh, Google search. If all of a sudden the Gemma model winds up being uh, a thorn in someone's side for a cybersecurity reason or a bio reason, uh, that would be, uh, really, really bad, but

• 10:15John Coogan?

  uh, a foreign company that is just like hurling it over here can kind of just be like, you guys deal with the consequences potentially. So I think that's what, what, what Dario is worried about. What about, um, the overall idea of like where, where it feels like we're sort of replaying the deep seek moment? Open source is going to reduce cost and so, uh, that's a reason to pull back on the AI trade overall. How have you processed that?

• 10:40Tae Kim?

  It's almost, it's almost a perfect catalog. Uh, people are worried about Kimi.

• 10:44John Coogan?

  Yeah.

• 10:44Tae Kim?

  But when you actually read the technical paper and their blog posts, uh, this is not a tiny efficient model. This is 2.8 trillion parameters. It's going to require a ton of compute server. I mean, we saw it the first day they put it out, but their servers got slammed. Um, even in the blog post, they say it's best run on a, a kind of a a server with 64 GPUs. So big super clusters that are network well and, and that's perfectly runs great on Nvidia. And if you remember, you know, during the whole deep sea thing about a year, a year or so ago, uh, the market freaked out that, you know, deep seek was going to, was so efficient that it will lead to a compute glut, but deep seek was the example of the reasoning model that actually it was the opposite. It created a ton of demand.

• 11:29Tae Kim?

  And I think the same thing is going to happen with Kimi where, uh, when you have more capable models that come out, people find uses for them. And right now, just like last year when reasoning models took off, Agentic AI and agents are taking off right now. And the market is kind of like not realizing that because right now, just like last year when reasoning models were taking off, right now Agentic AI is taking off. And the next six, nine months are going to be bigger than anyone believes. And Sam is on the record, Sam is on the record over the weekend saying at the Y C thing again, like people don't, I don't know why people don't like listen to you. It's on YouTube.

• 12:09John Coogan?

  Yeah.

• 12:09Tae Kim?

  That the next six months, it's going to be much more dramatically better for AI than the last two years in terms of advanced capabilities. And I, I heard you say RSI before. I think it's going to be RSI.

• 12:20John Coogan?

  Yeah.

• 12:20Tae Kim?

  Uh, people inside OpenAI and definitely Anthropic, Anthropic put a blog post on this. RSI I think is a lot closer than people think. And if RSI actually happens in the next three, six, nine months, that's going to soak up insane amount of compute. I mean, we have this exponential ramp for reasoning, exponential ramp for Agentic. And then if RSI actually happens, and I think it sounds like both frontier labs think it's going to happen very soon. That's going to soak up an unbelievable amount of compute as the AI models, you know, use more compute to, to self-develop and improve. And I, I think that's one thing that people are missing. That both Anthropic and OpenAI are kind of winking that, oh, it's happening.

• 13:01Tae Kim?

  Anytime I tweet something on RSI, all these frontier AI speakers like my tweet. So I think that's good.

• 13:08Jordi Hays?

  Uh, what, what is your, what is your sort of framework around compute hoarding? Because certainly, certainly it is, it has been happening when you look at, when you look at, you know, uh, like going back to the meta example, right? They're not selling compute yet. They're maybe curious about it or, or exploring some deals. They have all this compute and they're betting on their own ability to create the capability that will have enough demand to uh, justify, justify that. Do you just think it, there, there, there's so much demand overall that it just, you know, even if there's, there's hoarding, it just will leak out? And it's okay?

• 13:49Tae Kim?

  Well, there's so much demand overall. I mean, the S K Heineck's executives said, uh, during their IPO run, um, that their customers are asking five to six times more than they're able to serve. And they're kind of double capacity over the next five years, they said. And their customers, and I, I'm going to assume it sounded like Jensen, um, are asking for five to six times more than they're, they're able to build. So there's overwhelming demand. You guys were at the advanced AI, uh, AMD event. Lisa Su raised her CPU, Agentic CPU forecast. Just three months ago, it was 120 billion for 2030. Three months later, they raised it to 220 billion.

• 14:29John Coogan?

  Yeah.

• 14:29Tae Kim?

  Like she doesn't do that. She doesn't do that.

• 14:32John Coogan?

  You have that just on the.

• 14:34Jordi Hays?

  I've got that ready. I can do whatever.

• 14:36Tae Kim?

  I mean, like.

• 14:38Jordi Hays?

  Well, I just love this chart because he called it perfectly.

• 14:41John Coogan?

  He actually did. It's crazy.

• 14:43Tae Kim?

  CEOs don't, don't, you know, raise their TAMS by like these multiples in a few months. If they're not seeing insane demand coming in.

• 14:53John Coogan?

  Especially not public CEOs who are serious business leaders who've been running like non-meme stocks for decades and are like serious.

• 15:01Tae Kim?

  Everyone's freaking out that this is like the dot com bubble all over again, the finance. But what if these hyperscaler GPU cloud businesses are amazing businesses? Like Morgan Stanley says, if you do inference, it's 60 to 80% profit margins, right? These are amazingly profitable businesses as long as we keep growing the next few years. And, and again, just like last year, we're, we're on this exponential run right now over the next two quarters and the market isn't seeing that. Everyone's freaking out that, oh no, we're spending too much. And even, uh, Sam Altman, uh, podcast came out today and another podcast.

• 15:37John Coogan?

  He's flooding us out.

• 15:38Tae Kim?

  Sam is out there. He said that he regretted, you know, pulling back on the compute purchases. They made a mistake by, uh, not putting the pedal to the metal because now things are taking off again. So like, I, I, I, like, Amazon, the CEO in April, if you, everyone read his annual letter, Andy Jassy wrote. He talks about how free cash flow works. We're not betting $200 billion on a hunch. We see the demand. We know it's going to be insanely profitable and free cash flow positive in the medium to long term. So that's why you're investing $200 billion now and in a year or two, we're going to see insane amounts of free cash flow.

• 16:18Tae Kim?

  The thing that people are worried about right now, it takes time to build out these data centers and fabs and you bet now.

• 16:25John Coogan?

  Hold on, hold on, hold on. Like if you, if you see, uh, you see free cash flow, that is, that assumes that uh, like, like the revenues have to catch up and then the capex can't grow more exponentially. And so that means you have to see some sort of plateauing. Maybe it's at the end of the chart. Maybe it's this 2030 range. But there is a different world of just like continued growth forever. And then we sort of like run out of money.

• 16:50Tae Kim?

  The pushback I have there is that's a static view, right? If they don't grow revenue for the next three years, yes, you can't do that.

• 16:59John Coogan?

  Yeah.

• 16:59Tae Kim?

  But they're growing, Azure is growing 40%, Google Cloud is going 80%.

• 17:04John Coogan?

  Yeah.

• 17:05Tae Kim?

  You know, Amazon's growing high, uh, double digits. So if, if if revenue is growing 40 to 80% this year or next year and the year after, that's more revenue you have, that's more operating cash flow you have to invest, right?

• 17:21John Coogan?

  Yeah.

• 17:22Tae Kim?

  So that's, that's what people are missing.

• 17:24John Coogan?

  Yeah.

• 17:24Tae Kim?

  And if this stuff, if, if the data center that you're building now, you're spending all this now generates unbelievable free cash flow in 12 to 18 months because, you know, this Agentic AI is actually aging and re-architecting all the workflows inside companies. And you need to do the Agentic AI coding agents to make your product better. Cause if you don't, if you don't iterate a hundred different iterations for your product in R and D, if you don't do AI, just like AT&T is doing at the Gen, uh, advancing AI at AMD, he's talked about they're putting a hundred gen AI models into production. They're burning a trillion tokens a, a month and then that's growing double digits. The reason why they're doing that is because, you know, by using Agentic AI,

• 18:09Tae Kim?

  you're providing a better customer service, a better, you have a better product R and D and you're helping your companies make better products and services. And if you don't incorporate AI into your company. Verizon, your other company is gonna do, is gonna incorporate AI and then disrupt you and then you lose all your revenue.

• 18:28John Coogan?

  Yeah.

• 18:29Tae Kim?

  So everyone's worried the ROI, ROI is important, but you also need return on revenue because if you don't use AI, your, your rival is gonna use AI to beat you in the market.

• 18:40John Coogan?

  Yeah, yeah, no, I, I think the diffusion story is still, e- even though we got like sort of jitters by the token maxing thing, just the actual usage of AI across companies is still pretty limited in terms of the amount of people that are using it, the time that those people are using it, like, there definitely is a San Francisco bubble of startups where everyone is using AI a lot, but if you just walk into a normal business, a lot of people are like, yeah, I gotta check that out, which is a

• 19:07Tae Kim?

  Let me give you some, some context here, some

• 19:10Jordi Hays?

  Yeah, Ara Karazian, Jared Sleeper, everyone actually saying, enterprise adoption disparity remains enormous. And he cited Ara saying, usage would a hundred X if every company adopted AI to the degree of the most advanced companies.

• 19:26John Coogan?

  Yeah.

• 19:26Jordi Hays?

  Like this, there's a small group of companies that are

• 19:28John Coogan?

  People forget in the ramp, i- i- in the ramp data, like adopting AI can mean like having a ChatGPT Pro account for someone, which is like not exactly the same as like using Codex and like coding agents and stuff like, it's important, I think that, you know, if I have someone on my team, I want them to be able to go and do a deep research report, but that's like table stakes. The question is like, are you actually speeding up anything that's repetitive in your job? And that diffusion is just starting to take hold.

• 19:57Tae Kim?

  So, so the total market size in terms of IT and knowledge management in corporations, it's about six trillion dollars, right? A year. The two main frontier AI model companies, OpenAI and Anthropic, I'm gonna say, I think this is roughly accurate, are doing a hundred twenty billion dollars combined in ARR.

• 20:16John Coogan?

  Yeah.

• 20:16Tae Kim?

  You know, why can't that go to two hundred, three hundred, four hundred billion in the next year or two? I mean, they're, they're growing at exponential rates.

• 20:24John Coogan?

  Yeah.

• 20:24Tae Kim?

  When we're taking off. And if the market is six trillion dollars, right? Why can't they grow to two hundred, three hundred, four hundred billion in the next couple of years?

• 20:32John Coogan?

  Yeah.

• 20:32Tae Kim?

  I mean, it's, it's like, just do a little logic and rational deduction.

• 20:37John Coogan?

  Yeah.

• 20:38Tae Kim?

  Um, this is definitely possible and it's happening right now and it's accelerating and people aren't, you know, they just taking, you know, these big headlines where we had this, you know, fifty billion dollars from Financial Times and we find out it's over thirty years. It's like on the homepage.

• 20:54John Coogan?

  We, we, yeah, yeah, okay, I wanted to ask you about this. Nvidia revealed its tenant for fifty billion dollar data center that will use its chips. Explain what, what is actually going on here?

• 21:03Tae Kim?

  So the Financial Times, you know, put on their homepage today, Nvidia is gonna backstop a lease for a data center in Texas.

• 21:11John Coogan?

  Yeah.

• 21:12Tae Kim?

  Fifty billion dollars. And I saw that, I was like, oh my gosh, oh, that doesn't sound good.

• 21:16John Coogan?

  Yeah, no, it literally sounds like they're buying their own chips. Like, it sounds like the most bad thing you could do.

• 21:23Tae Kim?

  Yeah. Then they actually read the article, like halfway down the article, it's like a fifteen year lease. Uh, and it's only fifty billion dollars if they renew the lease after fifteen years. So it's like over thirty years if they renew it. Then if you think about that, you're like, wait a minute, fifty billion divided by thirties if they renew it.

• 21:42John Coogan?

  Oh, okay, yeah. Nvidia's fifteen year lease commitment for the Texas site is worth basically twenty billion and renewal options would take the total value to fifty billion over thirty years, according to Hut eight.

• 21:55Jordi Hays?

  Okay, but what do you think their, what, what are their plans for the site? Is this, they are gonna have some, like, what, what do you expect them?

• 22:05Tae Kim?

  So, so my, my point is, this is a billion, you know, whatever, a billion or two billion dollars a year, right? It's a non-story, but it's a, it's a big headline, sensationalized headline on the homepage.

• 22:16John Coogan?

  Yeah, and also, and also, it's not that it's, i- i- it's not like you're taking a two billion dollar loss every year. It's, you are the tenant and then you are also renting that out, so hopefully you're making profit?

• 22:27Tae Kim?

  It, it's a rounding error. It's like, you know, they're doing three hundred twenty billion run rate a year now. That's gonna go to four hundred, five hundred billion next year. And we're talking about something that might be a billion, you know? Like, this is not a story, but, you know, this is how people run with the sensationalized headlines and people panic and freak out.

• 22:48Jordi Hays?

  I think they just wanted to say the biggest number.

• 22:50John Coogan?

  Yeah.

• 22:51Tae Kim?

  That's exactly the point. And, and we're gonna see what happens with this Wall Street Journal article. Um, both OpenAI and Nvidia are not commenting so far. Uh, we'll, we'll see.

• 23:01John Coogan?

  But take us through the rumor.

• 23:02Tae Kim?

  Wait.

• 23:02John Coogan?

  Rumor mail time.

• 23:03Tae Kim?

  It's not rumor, it's the Wall Street Journal and other people reporting that, yeah. Nvidia is in talks with OpenAI to backstop SoftBank up to two hundred fifty billion, you know, to be really off. We don't know the details and I don't wanna speculate and comment, but let's actually see the details before we, I, I think the market had a really big negative reaction yesterday.

• 23:24John Coogan?

  Oh, sure.

• 23:24Tae Kim?

  To this story, uh, because everyone, I mean, Jim Cramer was telling his audience, like, sell everything at Open today because AI and data centers dot com, you know, it was insane. It's just, let, let, let's see the actual deal and then metrics and the numbers before we panic and freak out.

• 23:44John Coogan?

  Yeah, yeah, yeah, yeah, that makes sense. Sell.

• 23:47Jordi Hays?

  Yeah, honestly, when you say freak out and sell everything, sell your dollars, sell your house, sell your house, sell your stocks, then I'll freak out. But until then, Tay, I feel, I feel okay.

• 23:59Tae Kim?

  I mean, I just see the fundamentals. I see the CEO of AMD expanding her TAM, you know, dramatically over the last three months. I see RSI under Horizon, like every AI researcher is like, oh my God, this is gonna happen, we have to get there sooner. And then I see, you know, the obvious use case of, uh, agentic AI where you have to re-architect your workflows internally. Every company has to do this. So everything is taking off. You see like, um, you see, uh, when the president of Korea came to San Francisco area last week, you know, they had like a day in the valley.

• 24:38Tae Kim?

  Instantly Nvidia CEO Jensen Huang, Broadcom CEO Hockton, Dario, you know, Sam Altman are there, right?

• 24:48Tae Kim?

  Yeah, do a little logic deduction. Why are they there like crazy? Cause they need HBM memory and they're dying to have it. So if you think about that, that means there's insane demand and HBM memory is in, in shortage. There's tremendous demand for it, right?

• 25:05John Coogan?

  Talk about the, oh, sorry, talk about the Nvidia CUDA mode. It feels like a, a big piece of AMD's advanced AI event was, uh, maybe the CUDA mode isn't as much of an issue anymore in the age of agentic AI, you can have an AI agent write you the software that you need to use any chip and that creates, uh, less pricing power for Nvidia, but there's another world where you're not really like Nvidia doesn't necessarily need a mode because everything's just growing so fast that they're still growing. But how, how have you interpreted the processing of like the potential death of the CUDA mode?

• 25:44Tae Kim?

  So AMD is on it. Kimi wrote like a couple paragraphs in their blog post about how they created a GPU kernel, all that. So everyone, you know, gets scared or whatever. It, it's like, we'll see what it's like in real life. You know, this is just, you know, AMD is incentivized to say, oh, CUDA's not a problem anymore. CUDA's been a tremendous mode and I think it continues to be a mode. And the reason why is, uh, it's super reliable, all the bugs have been optimized and fixed.

• 26:14John Coogan?

  Sure.

• 26:14Tae Kim?

  And that comes from hitting the software, you know, millions of times and billions of times, right? Like, you don't know if, you know, if you use Claude Code or Kimi, that what they figure out using their training data is gonna work in the real world, right? They could talk about one little piece that does well. Let, let's see how it actually works.

• 26:34John Coogan?

  Yeah.

• 26:34Tae Kim?

  But Nvidia's big mode is, uh, it's scale, it's co-design of actually working through the networking, the CPU, the GPU, and how everything works together. And the other big thing is their balance sheet and their ability to, uh, get supply commitments from, you know, I, I think I said this before. Um, optical startups are like upset because Nvidia secured all the supply for all the optical components. Same thing with TSMC wafer, same thing with HBM memory. So Nvidia is using their size and gorilla and being able to prepay and get components that are in shortage. So they've become the dominant, you know, over the next year or two, you're gonna see Nvidia able to add tons of revenue

• 27:19Tae Kim?

  because they were able to lock up all the supply components. That's another thing that people don't really talk about, is their supply chain and their ability to work with partners and secure, secure component inventory.

• 27:30John Coogan?

  Is there still energy FUD that we would run into an energy bottleneck before we run into a chip bottleneck?

• 27:37Tae Kim?

  So Jensen said this last week on a Bloomberg interview, that there are a lot of bottlenecks, including, um, data center shell, power and all those things, uh, components, um, energy, whatever. So all those things, it sounds really bad, right? And then right after that, he said, I think we have, the chip industry has enough supply to double their revenue every year, basically implying Nvidia has enough supply, uh, for, for energy and all that stuff. No one is pricing that in. So everyone talks about bottlenecks. Nvidia CEO just basically told you on Friday that they have enough, uh, enough supply chain and all the bottleneck stuff

• 28:16Tae Kim?

  to double revenue every year. And no one, you know, Nvidia's revenue, uh, estimates for next year are a lot lower than double, I'll tell you that.

• 28:25Jordi Hays?

  Do you think the market, uh, prices in just how much of almost every important AI company in every category Nvidia actually owns? Like, it, it feels like every single, like, we're constantly focused on who's gonna raise CapEx next and, and, and where is this quarter coming in? And it feels like in two or three years, people will look at Nvidia's balance sheet and be like, wait, they have what, what I imagine then will be, you know, could, could end up being a trillion dollar plus of just like ownership in all of these great companies, which again, just goes back to the advantages of that early scale while they're, you know, while, while all these companies are trying to compete away

• 29:09Jordi Hays?

  Nvidia's margins and all these different things, they've been able to accumulate, again, positions in, in all of these incredible companies. I mean, we saw the SSI news, uh, yesterday is a great example of that. Um, but, but how do you look, how do you see it?

• 29:25Tae Kim?

  So I, I think, look at Jensen's history in investing in these companies and CoreWeave and see how much money they made. Uh, they just bought stake in, uh, the optical companies, Momentum and Coherent. Jensen is enabling the future because he sees this overwhelming tidal of demand and he needs these companies to be able to build up their supply chain uh, and to give, uh, supplies and chips to Nvidia. So they actually ramp very hard. Um, you know, everyone's freaking out that this is vendor financing. What if hyperscale GPU cloud is so profitable? And these companies need capital to build up that supply so they can, uh, serve the GPU cloud services over the next year or two?

• 30:11Tae Kim?

  Maybe Jensen sees that coming like he did with all these other companies like CoreWeave. And, uh, that's why he's investing in these companies to be able to expand their ability to make the components, uh, the industry needs. So I, I think you're exactly right. In, in a year, two, three years, uh, Nvidia is gonna have like all these stakes in these companies and it's gonna look like, uh, he was a good investor, um, cause he has been in the past. I mean, I

• 30:38John Coogan?

  I mean, the man can buy a leather jacket for like five grand and sell it for a million dollars. I don't know what else you need to see.

• 30:44Tae Kim?

  I mean, think, think about

• 30:45John Coogan?

  Are you the secret bidder? Did you win that?

• 30:47Tae Kim?

  No.

• 30:48John Coogan?

  I gotta get you a jacket. Uh, the real, the real question is

• 30:51Tae Kim?

  I do, I do have

• 30:52John Coogan?

  How long until someone distills a jacket and open sources it? You can get a dupe of a Jensen jacket for two bucks. That's what I want. Anyway, thank you so much for coming on the show. Jordy, you got anything else?

• 31:04Jordi Hays?

  Uh, this was great.

• 31:05John Coogan?

  Yeah, this was great.

• 31:06Jordi Hays?

  Always a pleasure.

• 31:06Tae Kim?

  Thanks guys.

• 31:07Jordi Hays?

  Thanks for, uh, thanks for putting up with all of our jokes.

• 31:10Tae Kim?

  Hopefully this becomes the lucky charm for the markets.

• 31:14John Coogan?

  Yes, I agree.

• 31:15Jordi Hays?

  I, I agree. I agree. The bottom is in. Great to see you, Tay.

• 31:19John Coogan?

  Have a good rest of the week.