Gavin on why the hyperscalers are under-earning: " I literally spoke to a company this morning who rented a cluster of several thousand Blackwells at somewhere in the mid $2 per GPU hour,  and this is one of the sexiest startups that people want to be in business with. They're renting the exact same cluster, and they're hoping 7 months later to pay just under $4. That's pretty crazy because a really gentle decline in prices would be bullish. Instead, we're up, depending on the starting point, 50 to 60% in six or seven months. And there have been so many anecdotes like that. One of the inference clouds, I think it was Baseten, they went on a podcast and essentially said, "We are planning to pay 100% more for Blackwells when our contract expires. And that just means that essentially all the hyperscalers are under-earning. My main mission out here this week is: tell me something negative."

Sam Altman: “Concentration of power with AI is a terrifying thing.” "A lot of the talk about safety concerns is well-founded, and then a lot of it is about people that just really, even if it's slightly subconscious, wanna concentrate power. I don't think anyone should want to live in a world of AI overlords, where someone is making decisions for all of the future, and in exchange for a cure for cancer,  which obviously is a wonderful thing, we collectively cede all agency. I am terrified of a world where the very real fears of AI are used as a way to say, “Only this small group of people can have it because it's too dangerous, and only they understand it. But don't worry, they're gonna make the right decisions for all of us.” I was a child of the internet. There were no rules. It was amazing, and I think it's critical we preserve that spirit with AI."

Sam on Kimi, distillation, and open source: “I have always assumed that there are going to be great cheap models in the world, and we better be the greatest and the cheapest. You get a better deal today, at least at a particular latency, using OpenAI's models than Kimi. We distill our own models. That’s how we make smaller, cheaper models. That’s a very good thing to do. There will clearly be an important place for open source models in the world and people that will want their own weights. We have so much usage of our models that we do not need to be a gigantically high-margin business to be able to afford model training. I would rather people not distill from us, for sure. But this is not in my top ten list of worries.”

My conversation with Sam Altman (@sama), CEO of OpenAI. We discuss: - Kimi, distillation, and open source - OpenAI's compute bets - The Hugging Face incident - What happens after AGI - Raising kids in an age of abundant intelligence - And much more Enjoy! TIMESTAMPS 0:00 Intro 4:10 The Race for Compute 14:24 A Sci-Fi Cyber Incident 16:14 The Promise and Risks of AGI 23:27 How AI Will Change Jobs 29:38 Sam’s Vision for a Personal AI 35:02 Robotics, ChatGPT, and What Comes Next 44:39 The Weight of Leading OpenAI 51:36 OpenAI’s Biggest Lessons

Krishna Rao is the CFO of Anthropic, and this is his first podcast appearance. He joined the company two years ago when run-rate revenue was about $250M. Today it is $30B. He has helped raise ~$75B and is responsible for the procurement and allocation of compute. I feel lucky we get to hear what it is like to sit inside a company this consequential at a moment this pivotal. We discuss: - The cone of uncertainty - How he allocates compute across Trainium, TPUs, and GPUs - What investors misunderstand about model companies - Why the returns to frontier intelligence keep rising - Platform vs application and where Anthropic builds its own products - How Anthropic uses Claude internally I have asked my closing question about the kindest thing more than 500 times. Krishna's answer is one I have never heard before. Enjoy! Timestamps: 0:00 Intro 2:38 The Compute Canvas 6:51 The "Cone of Uncertainty" 11:58 Why the Returns to Frontier Intelligence Are So High 16:45 Recursive Self-Improvement 20:20 Scaling Laws 23:30 Sourcing $100 Billion in Compute 28:05 Platform vs. Application Strategy 32:52 Pricing Dynamics 38:48 How Anthropic’s Finance Team Uses Claude 43:24 Raising Capital & Overcoming Investor Skepticism 52:32 Public Perception, Risks, and Government Regulation 57:25 Mythos Release 1:12:33 What Could Derail the AI Revolution? 1:13:47 Biotech and Healthcare 1:15:31 The Kindest Thing

This is my fifth conversation with @GavinSBaker. Gavin understands semiconductors and AI as well as anyone I know and has a gift for making sense of the industry's complexity and nuance. We discuss: - Nvidia vs Google (GPUs + TPUs) - Scaling laws and reasoning models - The economics of AI compute - Why Blackwell's delay mattered - The bear case on the AI capex buildout - Data centers in space - The mistake SaaS companies are making Few people love investing more than Gavin. His closing answer about why he loves it turned into a full reflection on his investing origin story, which I had never heard before. Enjoy! Timestamps: 0:00 Intro 5:03 The Blackwell Transition 23:15 The Prisoner's Dilemma 27:12 The Bear Case: Edge AI 37:19 Meta, Open Source, and Model Depreciation 43:08 Geopolitics and Rare Earths 50:42 Data Centers in Space 56:06 Power Constraints as a Governor 1:11:31 The SaaS Mistake 1:16:17 Nuclear and Quantum 1:22:25 Gavin’s Investing Origins