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[00:00:04] Doug McIntyre: Lee, Nvidia has had no competition. Literally zero. they just don’t have any, it’s like you could say, well,
[00:00:11] Lee Jackson: AMD to some degree, but not much single digits.
[00:00:14] Doug McIntyre: I’ve always been worried that the person who comes out with a big chip is one of the big companies that buys chips from Nvidia. It’s like, why should I buy chips from them? Well, and the other thing is these huge tech companies have tens of billions of dollars on their balance sheets. They’ve got massive r and d operations, right?
[00:00:35] Doug McIntyre: So apparently Amazon Web Services, which is not called that anymore, it’s called AWS right. Apparently they are going to come out with a chip that is a direct competitor to the highest end Nvidia chips. So to me, that could actually happen.
[00:00:53] Lee Jackson: The data that I saw on this, and I don’t know if this is all true, but that’s, hey, if they write it in a story, I assume it’s true.
[00:01:01] Lee Jackson: We’re writers. We try to be honest. The data on this AWS chip is, it has 600 gigs of bandwidth per second, 600 gigs per second of bandwidth. And I don’t know how, that’s gonna be applicable in the real world, but, and apparently, and this is just what I read in the story, it can read 100 music CDs per second.
[00:01:31] Lee Jackson: It can read a hundred in a second.You can get all the music in the world on there and, a, pretty short time. So it’s, gonna be interesting. I think you’re right. I think the NVIDIA’s biggest worry may be, big tech just saying, Hey, I’ll build my own.
[00:01:51] Doug McIntyre: I think that customers, their largest customers want to be in that business for several reasons.
[00:01:58] Doug McIntyre: The first one is, why buy stuff from somebody else if you can make it right? Because once you’ve made it, your net cost for each one you build is very, low. In, let’s say, you build a chip like that, works. At that point, your cost to build more and more of these is relatively low. The other one,
[00:02:17] Lee Jackson: well, there’s big capital expenditures.
[00:02:19] Lee Jackson: Yeah. But, once those are in place,
[00:02:21] Doug McIntyre: I’m, saying once, once you’ve made it and it’s up and running, the next thing is you don’t want to be stuck in the pricing loop with Nvidia. You don’t want to basically have them every time they come out with a chip, their pricing power for their customers is amazing.
[00:02:40] Doug McIntyre: So because there’s no place else to go. That’s one of the things about being in, in, the seat where you’re, you’ve got 90% market share is you, the only place to go in town for Microsoft is to Nvidia. You could end up with Nvidia having three or four pretty significant competitors. If the other big techs look at Amazon and say to themselves, that’s a good strategy, we’re gonna go to down that road too.
[00:03:08] Doug McIntyre: And all these guys have skunkworks, they’ve all got, some group of engineers sitting off in a warehouse. Something working on the biggest and best ideas. Yeah. And if anybody’s working on anything right now, other than ai, it’s building the chips that power AI.
[00:03:26] Lee Jackson: Well, you’re exactly right. And what it could be, what it could end up being is a consortium of maybe one or two big techs going like, okay, tell you what, let’s build this together.
[00:03:39] Lee Jackson: Or a big tech, goes to AMD and say, let’s build this together. that would make it even a stronger move against Nvidia. But the sheer numbers, I mean, this was just staggering to me, and I’m not Mr. Technology guy, but one thing I do know is that 600 gigs of bandwidth per second, probably fastest in the world.
[00:04:04] Doug McIntyre: So this begs a question, how valuable is AMD to an Nvidia customer? See, AMD. I don’t wanna say it’s inexpensive ’cause that’s not true. No, but there are none of the mega tech guys, each of them could buy it. it’s, they could afford to buy it. I’m gonna look at the market cap here in a second, but are you better off if you’re somebody other than, Amazon, are you better off saying, I’m just gonna buy AMD and I’m gonna put all the muscle I’ve got in the world behind it and I’m gonna get to a position where I’m not gonna worry as much as I used to about Nvidia?
[00:04:47] Lee Jackson: Right. Well, I don’t think it’s out of the question, although, again, if you wanna be in the chip business, that’s a. it, it’s an expensive, difficult business and very hard, from a lithography standpoint and chip testing and all of that. It’s, a nightmare. But, and even the biggest and the best can fail as we’ve seen Intel do.
[00:05:10] Lee Jackson: They dominated the industry, now they’re just an afterthought.
[00:05:14] Doug McIntyre: Well, look, it’s, it’s a $222 billion market cap. You’d probably have to pay 300. I think that all these guys would say our best bet is to build one. Why would I spend all kind of money if I’ve got a reasonable chance to build one?
[00:05:31] Doug McIntyre: as you know, the problem with this is that the, bidding war for the best engineers, I saw a number where some of these guys are getting offers for a hundred million dollars. Like the top.
[00:05:43] Lee Jackson: That’s why, Zuckerberg was throwing around a hundred mil to some of these people and
[00:05:52] Lee Jackson: I mean, some of ’em are worth it. I mean, the guy from Apple that developed everything for jobs, the iPhone and the iPod and the, that, that dude is still around and he’s, working with other people now.
[00:06:07] Doug McIntyre: I think they paid him $6 billion, for his company to
[00:06:17] Lee Jackson: It’s staggering. But he’s, at the competition now, so, so it’s gonna be remain to be seen how, just, how tense this whole thing gets, but you can believe it’ll escalate.
[00:06:30] Doug McIntyre: One of the things that’s very interesting right now about AI companies is they’re, they’ve decided that the race isn’t just about AI.
[00:06:38] Doug McIntyre: They’re starting to say to themselves, well, should I be the person with who invents products? It gets sold to people. that’s part of the Ives, we’ll get Steve Jobs lieutenant to come in. You’re now seeing a whole bunch of things where, what could we add on to AI so that we can sell a bunch of products Yeah.
[00:06:58] Doug McIntyre: Instead licensing or selling chips to somebody else who has the products. So it’s pretty interesting. You’ve got the pure AI guys wanting to get into the product business, and you’ve got the product guys wanting to get into the AI chip business. It’s become, a mess.
[00:07:16] Lee Jackson: Yeah. and there’s gonna be a point, not that it’s even reasonably comparable to the.com era, but there will be a point where there’s just, there’s too many, there’s just too many people at the fishing hole.
[00:07:31] Lee Jackson: and there’s gonna be money that ends up, going onto the fire pit because people, got in late or whatever the case might be. And one thing I have found really interesting, and we’ve discussed this at, length is, using AI for just normal search.
[00:07:51] Lee Jackson: And one thing I’ve started to find, and I’ve, I found it on Grok because often when we write 24/7 stories for instance, we wanna see like, okay, like the other day I was looking for which dogs of the Dow, the highest yielding Dow saw, which are up the most this year. No, AI had an accurate number on that.
[00:08:11] Lee Jackson: They couldn’t give me, and say, Verizon’s up X and IBM’s up X and I couldn’t find that on. And I used three different AI for searching. And none of ’em had, and I asked my son about that, ’cause you, he’s doing some AI work here where we live and doing some applications.
[00:08:28] Lee Jackson: And he said that, you have to literally tell it to do that. Find me the most recent price and how much is it up? You have to give it so many instructions that, that, it just putting in the questions, which are up the most, they’ll give you what was up the most through like April.
[00:08:48] Doug McIntyre: Well I think that’s still one of the weaknesses compared to Google.
[00:08:53] Doug McIntyre: Google still does a better job on that kind of search. Not all of it, but I think Alphabet has an antitrust problem. Right now, I don’t think they have a Google problem yet.
[00:09:07] Lee Jackson: No.
[00:09:08] Doug McIntyre: I think their core business is still in pretty good shape because of branding and the fact that AI has flaws and when people see the flaws in AI, they tend to turn away from it.
[00:09:19] Doug McIntyre: They tend to say to themselves, this is too frustrating. I wanted the answer to something. I wasn’t able to get it. I don’t wanna sit here and monkey around and ask it 500 questions to get right.
[00:09:30] Lee Jackson: right. It should be able to understand the initial question, what is up the most this year, But I couldn’t get it. It was interesting, I thought.
[00:09:40] Doug McIntyre: Yeah, it is.
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