Latest / Going Direct Conversations / #78 Ben Cartwright: The Second Life of AI Hardware Will Become a Big Market

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#78 Ben Cartwright: The Second Life of AI Hardware Will Become a Big Market · Going Direct Conversations

0:00
SPEAKER_02: Do you remember the first time you saw somebody use an iPhone?
0:03
SPEAKER_00: Like, the people I
0:19
SPEAKER_00: I saw using it,
0:19
SPEAKER_00: they would text with it,
0:21
SPEAKER_00: maybe take pictures, grainy pictures, maybe check their email on it.
0:25
SPEAKER_00: But now a phone is like indispensable.
0:27
SPEAKER_00: It's changed fundamentally how technology affects our society.
0:30
SPEAKER_00: And I feel like we may be on the verge of that with AI.
0:34
SPEAKER_00: Because a lot of people I know don't Google things anymore.
0:37
SPEAKER_02: They just ask Chad GPT.
0:38
SPEAKER_02: Ben spent six years living in China.
0:40
SPEAKER_02: He's a specialist in the manufacturing process,
0:43
SPEAKER_02: and he has an inside view of what's going on in the industry.
0:46
SPEAKER_00: Being able to bridge that,
0:47
SPEAKER_00: like understand them,
0:48
SPEAKER_00: not just the language,
0:49
SPEAKER_00: but their culture,
0:50
SPEAKER_00: their business landscape,
0:52
SPEAKER_00: and then come to America where it's like home turf for me, it made it like really...
0:57
SPEAKER_00: I think what we were able to provide to the market was unique and useful.
1:01
SPEAKER_02: Now, with this historic AI build-out that we're undergoing,
1:04
SPEAKER_02: things are going to change very,
1:05
SPEAKER_02: very quickly when it comes to disposing and remanufacturing IT equipment.
1:09
SPEAKER_00: In the West,
1:10
SPEAKER_00: right now,
1:11
SPEAKER_00: in 2026,
1:12
SPEAKER_00: we started to see an increasing flow of the first generation
1:16
SPEAKER_00: of real dedicated GPU systems.
1:19
SPEAKER_02: We discussed Ben's vision for reshoring the electronic recycling process,
1:23
SPEAKER_02: and all that it takes is just one off-taker.
1:25
SPEAKER_02: Hope you guys enjoy the conversation.
1:27
SPEAKER_02: Remember to go direct.
1:35
SPEAKER_02: Hey, my friends, Jordan here.
1:36
SPEAKER_02: Just a few words before we hop into today's episode.
1:39
SPEAKER_02: First and foremost,
1:40
SPEAKER_02: a sincere thank you and appreciation for all of our early listeners,
1:44
SPEAKER_02: readers, and supporters at Going Direct.
1:46
SPEAKER_02: It's really what keeps me going to do this each and every week
1:48
SPEAKER_02: because there's clearly a community of of folks out there looking to build
1:52
SPEAKER_02: a Going Direct economy, which gets me super excited.
1:55
SPEAKER_02: Secondly, if you haven't subscribed, please do so.
1:58
SPEAKER_02: Our main channel and community is forming over on Substack.
2:01
SPEAKER_02: The link is in the show notes below.
2:03
SPEAKER_02: And we'll also be putting out our weekly conversations at YouTube, Spotify, and Apple Podcasts.
2:08
SPEAKER_02: I hope you all have a great day and remember to go direct.
2:12
SPEAKER_02: All right, we are live.
2:13
SPEAKER_02: Ben, how are we doing today?
2:14
SPEAKER_00: So far, so good.
2:15
SPEAKER_00: The Broncos won, so I'm happy.
2:19
SPEAKER_02: Man, my lions are not looking as hot.
2:24
SPEAKER_00: Yeah, well, it didn't get off to a good start, but this weekend was good.
2:27
SPEAKER_00: So hopefully it's the start of a roll.
2:32
SPEAKER_02: Nice.
2:32
SPEAKER_02: Because you're originally from Colorado, no?
2:35
SPEAKER_00: Yeah, a little bit of Texas, a little bit of Colorado.
2:39
SPEAKER_00: So I was born in Texas, but I've always felt like Colorado is home.
2:42
SPEAKER_00: So I moved there as soon as I could, and I can't wait to go.
2:47
SPEAKER_02: And I've always said Colorado is definitely one of my top places in the U.S., that is for sure.
2:54
SPEAKER_02: Yeah.
2:55
SPEAKER_02: Well, hey, listen, I appreciate you coming on the pod.
3:00
SPEAKER_02: And just for a quick little background, shout out to Zach for originally connecting us.
3:06
SPEAKER_02: But, you know,
3:07
SPEAKER_02: most everyone knows,
3:08
SPEAKER_02: unless you're living under a rock,
3:10
SPEAKER_02: that we are in basically the biggest infrastructure buildout,
3:13
SPEAKER_02: technological infrastructure buildout in history.
3:17
SPEAKER_02: I think it's something like expected next year, something like $2 trillion.
3:20
SPEAKER_02: Yeah.
3:21
SPEAKER_00: And the numbers keep changing and they just keep going up.
3:24
SPEAKER_02: Yeah.
3:24
SPEAKER_02: So it's just like insanity.
3:27
SPEAKER_02: And what was interesting is when we had a conversation a couple of weeks ago
3:31
SPEAKER_02: in your background in the hardware lifecycle aspect,
3:39
SPEAKER_02: Asset Lifecycle Assessment in Remanufacturing Process,
3:43
SPEAKER_02: and also known as simply Electronics Recycling and Demanufacturing,
3:48
SPEAKER_02: we had a really interesting conversation around kind of what you were seeing in
3:52
SPEAKER_02: the space and as many Folks know the kind of the heart
3:56
SPEAKER_02: of this Going Direct economy is how do we decentralize production
3:59
SPEAKER_02: and reindustrialization is a big piece to that.
4:01
SPEAKER_02: And so we got
4:02
SPEAKER_02: into this interesting discussion around how do we bring this infrastructure back
4:07
SPEAKER_02: where we actually can process a lot of this material that's going
4:11
SPEAKER_02: to start becoming decommissioned over the next few years and it's going to ramp up
4:15
SPEAKER_02: in a pretty insane rate.
4:16
SPEAKER_02: And so I think you have a very interesting perspective in which we'll get into.
4:19
SPEAKER_02: So thanks for hopping on.
4:21
SPEAKER_00: Sure.
4:22
SPEAKER_00: I love it.
4:22
SPEAKER_00: It's interesting to me.
4:24
SPEAKER_02: Cool.
4:25
SPEAKER_02: Well, let's start here just for folks that are not familiar with,
4:31
SPEAKER_02: you know,
4:31
SPEAKER_02: people typically hear electronics recycling,
4:34
SPEAKER_02: but let's just start with what actually is demanufacturing?
4:38
SPEAKER_00: Yeah, so whenever a computer,
4:41
SPEAKER_00: whether it's a mobile device,
4:43
SPEAKER_00: a laptop,
4:44
SPEAKER_00: a desktop,
4:45
SPEAKER_00: or a server,
4:46
SPEAKER_00: any computer, it's going to reach sort of the end of its lifespan as that device.
4:52
SPEAKER_00: But it's made up of A bunch of high-tech components that may still have demand for further use.
4:59
SPEAKER_00: So your five-year-old desktop, no one wants it.
5:04
SPEAKER_00: I mean, you can sell it on eBay for $10 or something, but no one really is buying it.
5:08
SPEAKER_00: There's not a huge demand for it.
5:09
SPEAKER_00: But inside that desktop,
5:12
SPEAKER_00: there may be a hard drive that has demand,
5:14
SPEAKER_00: a CPU that has further demand, RAM modules that have further demand.
5:18
SPEAKER_00: So you have to,
5:19
SPEAKER_00: somebody,
5:21
SPEAKER_00: especially at scale,
5:22
SPEAKER_00: can take those devices,
5:23
SPEAKER_00: Take them apart,
5:24
SPEAKER_00: take the parts out,
5:26
SPEAKER_00: and then separate the parts that have further demand and move them to where
5:29
SPEAKER_00: that demand is or the reuse scenario is for
5:33
SPEAKER_01: those parts.
5:35
SPEAKER_00: And for servers and data center equipment, the scale is huge.
5:40
SPEAKER_00: When they get decommissioned, they get decommissioned in big groups and they can flow through.
5:44
SPEAKER_00: You can set up a very efficient process then to take them apart and you're producing
5:49
SPEAKER_00: a significant enough quantity of those parts That are in demand to then have
5:57
SPEAKER_00: a pretty robust supply chain feeding that demand wherever it is.
6:04
SPEAKER_02: Great.
6:04
SPEAKER_02: And one other kind of 101 of electronics recycling is just explain to folks what ITAD is.
6:10
SPEAKER_00: So ITAD is IT Asset Disposition.
6:13
SPEAKER_00: And it is the process of taking those decommissioned assets and moving them
6:21
SPEAKER_00: to their best next life.
6:23
SPEAKER_00: So in general,
6:25
SPEAKER_00: an enterprise user,
6:27
SPEAKER_00: when they decommission an IT asset,
6:29
SPEAKER_00: whether it's data center stuff or the laptops from their employees or all
6:35
SPEAKER_00: the Chromebooks for the kids at school,
6:37
SPEAKER_00: whatever it is,
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SPEAKER_00: when those devices get decommissioned,
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SPEAKER_00: the owner of the devices,
6:42
SPEAKER_00: the initial user, has two liabilities that they have to address.
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SPEAKER_00: One is a data liability because there's data on those devices,
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SPEAKER_00: and as the owner decides,
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SPEAKER_00: They have a responsibility then to destroy that data
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SPEAKER_00: because we don't want our pictures and financial information just escaping.
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SPEAKER_00: So they have that legal liability to destroy that data.
7:02
SPEAKER_00: So they can do that with physical destruction via a shredder
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SPEAKER_00: or software destruction via a wipe,
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SPEAKER_00: but they have that obligation, that liability for that data.
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SPEAKER_00: Second liability is an environmental liability because in most cases,
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SPEAKER_00: Those devices could be classified as toxic waste because they'll leach chemicals
7:24
SPEAKER_00: or metals, so they have to be disposed of properly.
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SPEAKER_00: So a big organization,
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SPEAKER_00: they decommission these assets and they have these two liabilities they have
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SPEAKER_00: to worry about.
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SPEAKER_00: ITAD, at its core, exists to provide those two services.
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SPEAKER_00: You give your service to me, I'll destroy the data and give you proof.
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SPEAKER_00: I will, one way or another, recycle it in the way that recovers the most value.
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SPEAKER_00: And then you have been absolved of your two liabilities.
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SPEAKER_00: It's kind of like it works like an insurance policy.
7:54
SPEAKER_00: Great.
7:55
SPEAKER_00: Thank you.
7:55
SPEAKER_00: Thank you for that.
7:56
SPEAKER_00: Thank you for that breakdown.
8:21
SPEAKER_02: So let's,
8:23
SPEAKER_02: I want to move over,
8:24
SPEAKER_02: I usually don't do this so quick in the conversation,
8:27
SPEAKER_02: but I think it's important because it'll give better framing for everyone watching
8:31
SPEAKER_02: or listening, which is, what does Circadis do?
8:36
SPEAKER_00: So Circadis,
8:38
SPEAKER_00: our company,
8:39
SPEAKER_00: started out originally at its core over a decade ago,
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SPEAKER_00: taking those components that have been brought out of decommissioned hardware in
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SPEAKER_00: the West and Especially the components that were of value and reusing them
8:55
SPEAKER_00: in manufacturing in Asia.
8:59
SPEAKER_00: So as they're getting these components inbound,
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SPEAKER_00: making new devices out of them,
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SPEAKER_00: then the gradual,
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SPEAKER_00: natural next step in their growth was to start securing that supply more directly
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SPEAKER_00: from the West.
9:13
SPEAKER_00: So they started an office in LA.
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SPEAKER_00: That's where I was brought in.
9:17
SPEAKER_00: And we started developing relationships with specifically with ITAB companies,
9:21
SPEAKER_00: because part of their Recycling process is they may not recycle it themselves.
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SPEAKER_00: They'll destroy the data and then sell it to a recycler or whoever the next step is.
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SPEAKER_00: So we were buying from those ITAD companies to get the component.
9:36
SPEAKER_00: So that's how we started.
9:38
SPEAKER_00: Then the next step of our growth is to provide ITAD services directly
9:42
SPEAKER_00: or somehow secure more of that supply directly.
9:45
SPEAKER_00: Then nowadays with the growth of people's IT estates ramping up,
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SPEAKER_00: Then they start needing even more services.
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SPEAKER_00: So the whole ITAD space or hardware lifecycle has turned
10:00
SPEAKER_00: into hardware lifecycle management because,
10:03
SPEAKER_00: as you can imagine,
10:03
SPEAKER_00: when people are spending hundreds of millions of dollars,
10:06
SPEAKER_00: even for any company,
10:07
SPEAKER_00: even for the biggest companies in the world, nine figures gets people's attention.
10:11
SPEAKER_00: You move up the corporate ladder pretty far when decisions have this big of
10:15
SPEAKER_00: a ramification and more when it's in the billions or tens of billions or hundreds
10:19
SPEAKER_00: of billions for some of these companies.
10:20
SPEAKER_00: So when they spend that much money,
10:23
SPEAKER_00: Then they really need to project,
10:24
SPEAKER_00: what is this money going to do for us this year, next year, the year after that?
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SPEAKER_00: And when we retire it, where is it going to go?
10:31
SPEAKER_00: How much are we going to get back?
10:32
SPEAKER_00: So when they ask those questions about the lifecycle of that hardware,
10:38
SPEAKER_00: the people that are in the best place to provide technology,
10:42
SPEAKER_00: Consulting services for this decision are the people who are at the end of
10:46
SPEAKER_00: that value chain that can tell them, hey, you spend that money today in three years.
10:52
SPEAKER_00: Here's where it's going to go.
10:53
SPEAKER_00: Here's how much it's going to be worth.
10:55
SPEAKER_00: Here's how it's going to impact your organization.
10:57
SPEAKER_00: So for a company like us,
10:59
SPEAKER_00: as these things have grown,
11:01
SPEAKER_00: then our portfolio of services can grow and better service clients.
11:10
SPEAKER_02: So one of the things I want to drill into here on that is...
11:16
SPEAKER_02: Really?
11:17
SPEAKER_02: So I'm going to rephrase it just to simplify for folks,
11:21
SPEAKER_02: which is obviously you have the ITAD providers,
11:23
SPEAKER_02: which are typically working directly with the companies,
11:25
SPEAKER_02: as you were mentioning,
11:26
SPEAKER_02: and then they're providing the service to destroy the data or wipe the data.
11:31
SPEAKER_02: And then they're working with someone like you,
11:33
SPEAKER_02: or Circadius historically,
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SPEAKER_02: who then takes the physical products,
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SPEAKER_02: takes the,
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SPEAKER_02: remanufactures them,
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SPEAKER_02: brings them over to China,
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SPEAKER_02: remanufactures them, and then makes new products out of it, resells it.
11:44
SPEAKER_02: Yeah.
11:44
SPEAKER_02: Okay.
11:46
SPEAKER_02: So can you tell folks a little bit more,
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SPEAKER_02: because I like getting into the nitty gritty of the supply chain stuff,
11:55
SPEAKER_02: because I don't think most people realize this,
11:56
SPEAKER_02: but what percentage of electronics in the United States end up back in the East or
12:04
SPEAKER_02: in China for remanufacturing versus what stays on shore?
12:11
SPEAKER_00: So like you're saying for the used electronics that the West generates,
12:16
SPEAKER_00: how much of it eventually in this life cycle process goes offshore?
12:21
SPEAKER_02: Yes, in the e-waste cycle.
12:23
SPEAKER_02: Approximately, I mean, if you
12:24
SPEAKER_01: were to
12:24
SPEAKER_01: guess or estimate.
12:27
SPEAKER_00: Well, okay, so I would break it down like this.
12:33
SPEAKER_00: Like if you have a used server, it's heavy.
12:36
SPEAKER_00: And the parts that are worth money for manufacturing,
12:38
SPEAKER_00: the parts that are going to go back into manufacturing,
12:42
SPEAKER_00: The
12:44
SPEAKER_00: CPU, the RAM, maybe the SSDs, maybe the hard drives.
12:51
SPEAKER_00: The rest is just off-the-shelf components.
12:54
SPEAKER_00: So traditionally,
12:55
SPEAKER_00: what you would do with a server then is demanufacture,
12:58
SPEAKER_00: as in take those high-value components out here in America.
13:02
SPEAKER_00: Then the RAM and the CPU, for example, will go to Asia.
13:07
SPEAKER_00: You reduce the weight significantly and the space significantly.
13:11
SPEAKER_00: And that's all that's in demand over there.
13:12
SPEAKER_00: So you take that, send it off.
13:14
SPEAKER_00: The carcass,
13:16
SPEAKER_00: which is the metal case,
13:17
SPEAKER_00: the plastic parts that fit into it,
13:19
SPEAKER_00: and the PCB, the green circuit board, motherboard, will stay here and get recycled.
13:26
SPEAKER_00: Circuit board is an interesting thing because traditionally,
13:30
SPEAKER_00: for the last,
13:30
SPEAKER_00: I don't know,
13:31
SPEAKER_00: years and years,
13:33
SPEAKER_00: circuit board has a finite value of recoverable
13:38
SPEAKER_01: precious metals,
13:39
SPEAKER_01: semi-precious metals.
13:42
SPEAKER_00: So let's say the circuit board is worth $45 in recoverable metals.
13:47
SPEAKER_00: So your profit margin, it's only worth $45.
13:50
SPEAKER_00: The only way to increase your profit margin after you've bought it is
13:56
SPEAKER_00: to reduce your operating costs.
13:58
SPEAKER_00: So the cheapest place to run it through a smelting operation in the world may be Southeast Asia.
14:05
SPEAKER_00: So people would take the circuit boards and send them to Southeast Asia
14:08
SPEAKER_00: because it's cheap smelting.
14:10
SPEAKER_00: More and more enforcement now is really doing a good job of shutting down that flow.
14:18
SPEAKER_00: And there's more smelters coming online domestically so that it does cost
14:23
SPEAKER_00: a little bit more,
14:24
SPEAKER_00: but there's a lot of other commercial considerations
14:26
SPEAKER_00: that incentivize domestic smelting now.
14:29
SPEAKER_00: And like you know,
14:31
SPEAKER_00: there's a lot of growth in technology and people bringing other options online
14:35
SPEAKER_00: or researching other ways to recover those metals from I would say
14:41
SPEAKER_00: a certain percentage of every electronic device goes to Asia,
14:47
SPEAKER_00: for all intents and purposes.
14:48
SPEAKER_00: But percentage-wise of those devices,
14:52
SPEAKER_00: It's a small, not 100% of the device will go to Asia, only a little bit of it.
14:56
SPEAKER_00: And just to figure out what in here is going to go,
14:59
SPEAKER_00: it's the high-tech stuff that you can only buy from a few people in the world.
15:03
SPEAKER_00: There's only a few people who manufacture the memory chips that make up RAM or SSDs.
15:08
SPEAKER_00: So they control, they sort of, they have a monopoly on those.
15:13
SPEAKER_00: So they have high prices, which creates a demand for refurbished or reused devices.
15:20
SPEAKER_00: They're so high-tech.
15:22
SPEAKER_00: Same with CPUs.
15:23
SPEAKER_00: You can only get your CPUs from Intel or AMD, more or less.
15:26
SPEAKER_00: And so there's a robust market for used CPUs.
15:35
SPEAKER_01: And so when Circadist takes these components,
15:40
SPEAKER_02: the highest value components back,
15:41
SPEAKER_02: and then are they,
15:43
SPEAKER_02: just explain a little bit more about what you're remanufacturing and
15:46
SPEAKER_02: then what you're selling and how you're selling those things.
15:49
SPEAKER_00: Yeah, so it's really interesting to me.
15:53
SPEAKER_00: The RAM is pretty easy to understand because if you take a server RAM module,
16:00
SPEAKER_00: anybody who's spending the money to put servers in a data center is not going to try
16:05
SPEAKER_00: to cut corners by buying cheap RAM.
16:08
SPEAKER_00: They're already spending zillions of dollars.
16:09
SPEAKER_00: So they're just going to go order brand new RAM,
16:11
SPEAKER_00: put them in the brand new servers, fastest, best, greatest, greatest.
16:16
SPEAKER_00: So there's not a huge market for used server RAM.
16:20
SPEAKER_00: But the chips that make it up are the same chips that are in everything that needs RAM.
16:25
SPEAKER_00: So you can take those chips off and use it to make new consumer RAM for desktops
16:29
SPEAKER_00: or laptops or whatever that sort of second tier market would be.
16:36
SPEAKER_00: So you can take the chips off of a used server module and then use it
16:40
SPEAKER_00: to make other new consumer level products.
16:44
SPEAKER_00: Same with SSD, same with CPUs.
16:48
SPEAKER_00: It's interesting because
16:51
SPEAKER_00: Any computer that has a CPU probably has another microprocessor on it
16:58
SPEAKER_00: that acts like traffic control for the motherboard.
17:01
SPEAKER_00: And if it's an Intel CPU, that's an Intel controller chip.
17:05
SPEAKER_00: So now there's two devices on just any computer that are made by Intel that creates
17:11
SPEAKER_00: a secondary demand.
17:14
SPEAKER_00: Servers also have them.
17:15
SPEAKER_00: So there's a few components there.
17:17
SPEAKER_00: The most high-tech components have a second life.
17:20
SPEAKER_00: And even this year,
17:22
SPEAKER_00: I went back to China just to visit some of these facilities and the operations.
17:25
SPEAKER_00: And you think like, okay,
17:27
SPEAKER_00: like of this three years old,
17:29
SPEAKER_00: four years old,
17:30
SPEAKER_00: like an iPhone, you know, three or four-year-old iPhone still has a decent demand.
17:35
SPEAKER_00: We can all kind of conceive of that.
17:37
SPEAKER_00: But you think like four, five, six-year-old phones, demand really drops off.
17:42
SPEAKER_00: And you think it must Extrapolate similarly to like tech.
17:46
SPEAKER_00: Well, it was really interesting to me because there was even parts that come out
17:50
SPEAKER_00: of computers that are like 10 years old, like a 10-year-old CPU, 10-year-old RAM.
17:55
SPEAKER_00: And you think like, where's the cut line here?
17:57
SPEAKER_00: But those things are still being used to make new products in Asia.
18:04
SPEAKER_00: So I'm thinking like my American mind, I guess, is like if I'm going to open...
18:12
SPEAKER_00: A chain of grocery stores or accounting firm or something
18:16
SPEAKER_00: where I need little desktops for all the workstations.
18:19
SPEAKER_00: Then I could go to DollarHP and just go, what's their budget line?
18:24
SPEAKER_00: And that can be my budget.
18:25
SPEAKER_00: I need 100 of these, whatever their cheapest one is.
18:28
SPEAKER_00: But in reality, there's places in the world where their budget may be lower than that.
18:34
SPEAKER_00: Whatever they can buy new from these major manufacturers.
18:37
SPEAKER_00: So people over in these places are taking old technology
18:42
SPEAKER_00: that gets decommissioned here,
18:43
SPEAKER_00: take those components out and use it to make a new desktop,
18:47
SPEAKER_00: a brand new desktop,
18:48
SPEAKER_00: new motherboard that runs a 10-year-old CPU,
18:53
SPEAKER_00: remanufactured RAM out of 10-year-old parts.
18:57
SPEAKER_00: But you boot it up with a clean operating system and it's going to be enough to run
19:01
SPEAKER_00: a point-of-sale system.
19:02
SPEAKER_00: Or spreadsheets for doing simple math.
19:06
SPEAKER_00: It doesn't need to be like a supercomputer.
19:09
SPEAKER_00: So even at that level,
19:12
SPEAKER_00: there's new stuff,
19:13
SPEAKER_00: there's recent used stuff,
19:15
SPEAKER_00: there's old used stuff,
19:17
SPEAKER_00: and there's stuff
19:17
SPEAKER_00: that technologically would be like ancient used stuff that's still getting reused
19:22
SPEAKER_00: over there.
19:25
SPEAKER_02: And when you're remanufacturing this,
19:27
SPEAKER_02: like does Circadus have their own facilities or are you working with a network
19:31
SPEAKER_02: of external facilities and then you're reselling the property?
19:35
SPEAKER_00: We used to have our own facilities,
19:36
SPEAKER_00: but as our sort of lifecycle services have grown so much in America,
19:42
SPEAKER_00: we have outgrown what was our original manufacturing operations.
19:48
SPEAKER_00: So nowadays it's mostly working in conjunction with partners
19:51
SPEAKER_00: because we We had this need and we came to America to fill it,
19:56
SPEAKER_00: but eventually we were able to get this amount of supply.
20:00
SPEAKER_00: So it was more than we needed.
20:02
SPEAKER_00: But when the supply is big enough,
20:03
SPEAKER_00: then the people who do need this amount of supply, you get their attention.
20:08
SPEAKER_00: And they're like, just give us all your stuff now.
20:10
SPEAKER_00: So we've got some major manufacturing partners and we just supply them now.
20:14
SPEAKER_02: Okay, so you're not even reselling the computers and server racks or anything like
20:19
SPEAKER_02: that yourself.
20:21
SPEAKER_02: You're just actually providing them and they're handling that?
20:23
SPEAKER_00: Yeah, for the demanufacture and reuse stuff, yeah.
20:27
SPEAKER_00: But we're getting more and more into,
20:30
SPEAKER_00: with all these neoclouds and their business models,
20:32
SPEAKER_00: like I said, our services are growing.
20:34
SPEAKER_00: We're even in the new hardware in the West, we're providing more and more services.
20:38
SPEAKER_00: But for the deman, yeah,
20:40
SPEAKER_00: I think for the purposes of this conversation,
20:41
SPEAKER_00: that demanufacturing and reuse, We're providing bigger manufacturers now.
20:48
SPEAKER_02: Great.
20:49
SPEAKER_02: And we're going to get into neoclouds and the whole transition here shortly.
20:52
SPEAKER_02: Don't worry.
20:53
SPEAKER_02: But I thought it was very interesting because you spent,
20:57
SPEAKER_02: was it, I don't know, several years in Asia, right?
21:01
SPEAKER_02: In China?
21:02
SPEAKER_00: I lived in China for about six years total.
21:04
SPEAKER_00: Okay.
21:04
SPEAKER_00: Yeah.
21:05
SPEAKER_02: Just give us a little bit of the background of what landed you there and is
21:09
SPEAKER_02: that kind of how you got your first foray into the whole world of electronics,
21:13
SPEAKER_02: recycling, demanufacturing?
21:14
SPEAKER_00: In a roundabout way, yeah.
21:17
SPEAKER_00: I was single and I was living in Colorado and I just wanted to,
21:20
SPEAKER_00: I lived there for 10 years and I wanted to experience living overseas and I kind
21:23
SPEAKER_00: of traveled around the world and looked at a few places.
21:26
SPEAKER_00: And I didn't want to move to China at first.
21:29
SPEAKER_00: I just wanted to see the Great Wall.
21:31
SPEAKER_00: But when I was there, I met other Americans that were living in Beijing.
21:34
SPEAKER_00: I remember one guy in particular, he was like, man, you got to move here and learn Chinese.
21:39
SPEAKER_00: And I'm like, I don't want to learn Chinese.
21:41
SPEAKER_00: I didn't really want to learn.
21:42
SPEAKER_00: That wasn't part of my journey, like learning a language.
21:45
SPEAKER_00: It was one of the experiences.
21:48
SPEAKER_00: He's like, no, man,
21:49
SPEAKER_00: you learn Chinese because it will unlock whatever you want to do for the rest
21:53
SPEAKER_00: of your life.
21:54
SPEAKER_00: He said, you want to live in France, you get a job because you speak Chinese in France.
21:59
SPEAKER_00: You want to live in Africa,
22:01
SPEAKER_00: you can get a job where you can use your language skills to live in Africa
22:04
SPEAKER_00: or America or China or whatever you want.
22:06
SPEAKER_00: And you kind of had this conversation.
22:08
SPEAKER_00: I'm like, this does make a good point, probably.
22:11
SPEAKER_00: So I committed to it.
22:13
SPEAKER_00: I moved to Beijing, learned Chinese.
22:15
SPEAKER_00: And then I really loved how it opened up the culture.
22:18
SPEAKER_00: Learning about their culture and their history sort of firsthand.
22:22
SPEAKER_00: I could read something about history and then go visit that place and touch it
22:26
SPEAKER_00: and feel it and smell it.
22:28
SPEAKER_00: I loved it.
22:29
SPEAKER_00: It was great.
22:30
SPEAKER_00: And then I met my wife over there.
22:33
SPEAKER_00: She's also a Texan who was learning Chinese over there.
22:36
SPEAKER_00: And so now we both live in this Chinese area of Los Angeles.
22:39
SPEAKER_00: But I got into this industry because the demand for all
22:43
SPEAKER_00: the used electronics was driven by what's happening in China.
22:47
SPEAKER_00: Being able to bridge that,
22:48
SPEAKER_00: like understand them,
22:50
SPEAKER_00: not just the language,
22:51
SPEAKER_00: but their culture,
22:52
SPEAKER_00: their business landscape,
22:53
SPEAKER_00: and then come to America where it's like home turf for me,
22:56
SPEAKER_00: it made it like really,
22:57
SPEAKER_00: I think what we were able to provide to the market was unique and useful.
23:04
SPEAKER_01: Yeah, it's a very interesting journey in NIA.
23:10
SPEAKER_02: I wanted to ask you,
23:11
SPEAKER_02: you know,
23:11
SPEAKER_02: as ignorant Americans that most people have never been over to China,
23:16
SPEAKER_02: I have never actually been to China.
23:18
SPEAKER_02: So all you hear is like headlines and the media.
23:21
SPEAKER_02: And so, you know,
23:22
SPEAKER_02: is there one or two things that really stand out for you
23:24
SPEAKER_02: for like how you think America misunderstands China just at a high level?
23:29
SPEAKER_02: Just curious.
23:33
SPEAKER_00: There are, and I hope this is just from my perspective.
23:37
SPEAKER_00: This is what I would say was my experience and my perspective.
23:40
SPEAKER_00: Is that in the Western culture,
23:44
SPEAKER_00: there is,
23:44
SPEAKER_00: I think humans in general respect honesty and hospitality and those things.
23:52
SPEAKER_00: But those are expressed through the lens of our background and our culture.
23:57
SPEAKER_01: And like in the West, our lens kind of has this golden rule
24:06
SPEAKER_01: foundation.
24:07
SPEAKER_00: Like don't Do to others what you want them to do to you,
24:11
SPEAKER_00: which emphasizes proactively what you do to other people.
24:17
SPEAKER_00: And then in our interactions, There's an expectation of honesty.
24:23
SPEAKER_00: You know,
24:23
SPEAKER_00: if I go to buy a used car,
24:25
SPEAKER_00: and maybe I'm at a disadvantage from the sale,
24:28
SPEAKER_00: the car seller,
24:29
SPEAKER_00: because he knows his car, he knows its history, and he knows its value.
24:33
SPEAKER_00: And I'm kind of an amateur.
24:34
SPEAKER_00: You know, I don't buy a car every day.
24:36
SPEAKER_00: So I'm coming into it.
24:37
SPEAKER_00: I don't know if this car is $5,000, $10,000, or $30,000.
24:42
SPEAKER_00: And in our culture, we would expect that car salesman by default to be relatively honest.
24:51
SPEAKER_00: And if he sells me an old Beater 1970 Datsun for $50,000,
25:00
SPEAKER_00: people hear about it and be like, oh my God, that guy's a crook.
25:03
SPEAKER_00: That would be a normal expectation of people's reaction.
25:07
SPEAKER_00: So my experience in China was they have the same sense of responsibility
25:13
SPEAKER_00: and honesty, but it expresses a little differently in that
25:20
SPEAKER_00: The family has primary responsibility is to his family and his kids, not to you or me.
25:27
SPEAKER_00: So if we come into this relationship and he has an advantage,
25:33
SPEAKER_00: then he,
25:34
SPEAKER_00: in a way,
25:34
SPEAKER_00: has this sense that he needs to leverage his advantage for the best interests
25:40
SPEAKER_00: of his family.
25:42
SPEAKER_00: And you need to do the same.
25:43
SPEAKER_00: So we're still equal.
25:45
SPEAKER_00: Like, you need to do your research and know how much this car is.
25:48
SPEAKER_00: And you come to me and you lowball me.
25:49
SPEAKER_00: And I'll ask for a high price.
25:51
SPEAKER_00: And we'll meet at a fair place.
25:53
SPEAKER_00: Those are the rules.
25:55
SPEAKER_00: But he's really looking to take advantage of any leverage he has for the sake
26:00
SPEAKER_00: of his own responsibilities.
26:02
SPEAKER_00: Not to take advantage of the other person, but just to do the best that he can for his family.
26:07
SPEAKER_00: So in his mind,
26:08
SPEAKER_00: in their culture,
26:09
SPEAKER_00: it's still ethical and honest and It's just if both sides are playing
26:15
SPEAKER_00: by different rules, then there can be this discrepancy.
26:19
SPEAKER_00: You come into it as the amateur and expect him to not take advantage of your deficiency.
26:25
SPEAKER_00: And he comes into it expecting you not to have a deficiency.
26:30
SPEAKER_00: And any deficiency you have is giving him the green light.
26:34
SPEAKER_00: You're almost saying like, well, I don't care.
26:36
SPEAKER_00: You take advantage of it if you want.
26:38
SPEAKER_00: So, yeah, and I could probably ramble about this for too long.
26:42
SPEAKER_00: But I think that in a business sense is interesting just to understand.
26:47
SPEAKER_00: It doesn't read as unethical.
26:49
SPEAKER_00: This person's not going to read as a crook or trying to cheat you or anything.
26:54
SPEAKER_00: It's going to read your senses, your instincts.
26:56
SPEAKER_00: They're going to tell you, this is an honest, ethical person who likes me.
26:59
SPEAKER_00: We could be friends after this.
27:02
SPEAKER_00: But that does not negate in that culture.
27:05
SPEAKER_00: That doesn't necessarily negate your obligation to come into it well-armed
27:10
SPEAKER_00: to have this discussion on equal footing.
27:12
SPEAKER_00: So in a business sense, I mean,
27:14
SPEAKER_00: it doesn't matter if it's Boeing making airplane parts over there or like as
27:17
SPEAKER_00: a tourist buying a t-shirt.
27:20
SPEAKER_00: I feel like I see that dynamic replayed a lot where people...
27:26
SPEAKER_00: Don't realize that they're playing by different rules.
27:28
SPEAKER_00: And then there's miscommunication or maybe people get upset or something.
27:32
SPEAKER_00: But yeah, it's interesting.
27:34
SPEAKER_00: And I really appreciate that in a general sense,
27:39
SPEAKER_00: both sides can be trying to operate ethically and honestly.
27:43
SPEAKER_00: But finding that agreeing on the framework of the rules is kind of an important step
27:49
SPEAKER_00: in making the relationship successful long term.
27:53
SPEAKER_02: That's interesting.
27:54
SPEAKER_02: And that's rooted in what specifically around that you're just your obligation is
28:00
SPEAKER_02: to your family because he's trying to do the best that he or she can.
28:04
SPEAKER_00: I don't know.
28:05
SPEAKER_00: That's my way of sort of processing it, I think.
28:09
SPEAKER_02: Okay.
28:09
SPEAKER_00: Because you could probably do doctrinal, whatever thesis papers on it.
28:15
SPEAKER_02: Sure, of course.
28:16
SPEAKER_00: Because their recent history included a lot of like
28:23
SPEAKER_00: Internal conflict,
28:25
SPEAKER_00: the Great Leap Forward,
28:26
SPEAKER_00: the Cultural Revolution, and times that put a lot of stress on their society.
28:33
SPEAKER_00: And I don't know if it's like religion,
28:35
SPEAKER_00: if it's culture,
28:36
SPEAKER_00: if it's history, if it's recent history, and these sort of filter events.
28:41
SPEAKER_00: And you could read, I've read books that kind of would lean toward each one of those options.
28:48
SPEAKER_00: But The end result is that's how I see it.
28:51
SPEAKER_00: I'm not saying anything bad about the culture.
28:53
SPEAKER_00: I love the culture.
28:54
SPEAKER_00: I love my friends.
28:56
SPEAKER_00: And I'm not sure what got this generalization to be the current state of affairs,
29:01
SPEAKER_00: but it seems like it's,
29:03
SPEAKER_00: and it's a generalization, but I see that dynamic playing out a lot.
29:07
SPEAKER_00: So there was times in China where our generation's parents or grandparents went
29:15
SPEAKER_00: through periods where there was massive starvation.
29:19
SPEAKER_00: So if you go to the store and you line up, you can do the math.
29:26
SPEAKER_00: Like, hey, I'm halfway in the front of this line.
29:32
SPEAKER_00: And they only have enough food for the first 25% of people in the line.
29:38
SPEAKER_00: So I could stand here all day.
29:39
SPEAKER_00: I'm still going to go home empty-handed to my family that's starving.
29:42
SPEAKER_00: So what do you do?
29:44
SPEAKER_00: Does your drive to take food home for your children outweigh your drive to stand
29:49
SPEAKER_00: in line with good manners?
29:51
SPEAKER_00: And if all the people who go, no,
29:53
SPEAKER_00: the manners in society are important,
29:55
SPEAKER_00: so I'm going to stand in line and hope there's food, and then there's not.
29:58
SPEAKER_00: There's Maybe all those people died and starved to death.
30:02
SPEAKER_00: So the only ones that survived are the ones who were more aggressive or had
30:06
SPEAKER_00: a different value set.
30:08
SPEAKER_00: And then that caused a lot more of those values to be passed on the following generation.
30:13
SPEAKER_00: That's one theory, for example.
30:15
SPEAKER_00: I'm not qualified to make a decision or a determination.
30:18
SPEAKER_00: Sure.
30:20
SPEAKER_02: Yeah, but you know,
30:20
SPEAKER_02: it's interesting whenever you're, you're,
30:22
SPEAKER_02: you were there for six years and, and, and, and,
30:24
SPEAKER_02: and you worked there and so you saw things and I'm,
30:27
SPEAKER_02: I'm, I'm a big fan of just kind of like the common sense test, right?
30:30
SPEAKER_02: It's just things that you feel and those are oftentimes like.
30:33
SPEAKER_00: Like you don't, you don't have to overthink it sometimes.
30:35
SPEAKER_00: Like I had this experience once that, that,
30:38
SPEAKER_00: that I was flying,
30:40
SPEAKER_00: I don't know if I was flying back to the States or something from Beijing
30:43
SPEAKER_00: and I lived, Beijing has these concentric ring roads.
30:47
SPEAKER_00: And the airport was here.
30:49
SPEAKER_00: And I lived over here on the complete opposite side of the city.
30:53
SPEAKER_00: And there's no straight path.
30:55
SPEAKER_00: You have to go around the city and then go out to the airport.
30:58
SPEAKER_00: So I had to take a bus all the way around here.
31:02
SPEAKER_00: So I'm doing the math.
31:03
SPEAKER_00: It's a massive city.
31:04
SPEAKER_00: So I want to be at the international flight.
31:07
SPEAKER_00: So I got to be there two, three hours early.
31:09
SPEAKER_00: And it's going to take me Maybe an hour and a half or two hours to get to
31:14
SPEAKER_00: the airport on a good day, but there's traffic.
31:16
SPEAKER_00: So I'm trying to leave first thing in the morning, just that I don't want to miss the flight.
31:21
SPEAKER_00: So you go to the bus stop, and there's always...
31:24
SPEAKER_00: It's probably better now.
31:25
SPEAKER_00: I think it's better now,
31:26
SPEAKER_00: but back then,
31:26
SPEAKER_00: especially 20 years ago,
31:30
SPEAKER_00: when the bus came,
31:32
SPEAKER_00: there was always more people who needed to get on the bus than there was space on
31:36
SPEAKER_00: the bus.
31:38
SPEAKER_00: So people...
31:40
SPEAKER_00: Form these masses.
31:42
SPEAKER_00: And then the ones who were most aggressive would push their way onto the bus.
31:46
SPEAKER_00: But the result was there was sort of this natural flow where there was this balance
31:52
SPEAKER_00: of people being aggressive and people sort of waiting maybe to their level
31:57
SPEAKER_00: of aggressive bus riding would move up with each bus.
32:02
SPEAKER_00: So it was more or less fair.
32:03
SPEAKER_00: This is kind of the same effect as waiting in a massive line.
32:06
SPEAKER_00: But here I am, a foreigner with two massive suitcases.
32:11
SPEAKER_00: So there's no way,
32:12
SPEAKER_00: just like fluid dynamics,
32:14
SPEAKER_00: there's no way I can push my way to the front of the crowd
32:16
SPEAKER_00: with these two massive suitcases.
32:18
SPEAKER_00: So I'm trying to work the system,
32:20
SPEAKER_00: and I'm watching the clock tick down, and I'm getting more and more nervous.
32:25
SPEAKER_00: And I think, well,
32:26
SPEAKER_00: maybe the crowd will thin out,
32:27
SPEAKER_00: and we'll get on the next bus,
32:28
SPEAKER_00: and then more people would come,
32:29
SPEAKER_00: and more people would come, and more people would come.
32:31
SPEAKER_00: And I realized, I'm going to miss my flight unless I get on the bus.
32:35
SPEAKER_00: So my aggressiveness eventually maxed out, and I had to...
32:39
SPEAKER_00: Push my way onto the bus with these massive suitcases,
32:42
SPEAKER_00: which by definition means I'm pushing people out of the way.
32:45
SPEAKER_00: And it's not all just robust, middle-class working men.
32:49
SPEAKER_00: It's old ladies and little kids and stuff too.
32:52
SPEAKER_00: But it's the way things function there.
32:55
SPEAKER_00: So I tried to do it in the proper way.
32:58
SPEAKER_00: But it was,
32:59
SPEAKER_00: I don't know,
33:00
SPEAKER_00: it's like a core memory I have of having to,
33:04
SPEAKER_00: in that system, how do I do the thing I have to do in this system?
33:10
SPEAKER_00: I think sometimes it was a lesson to me on that balance between needing
33:15
SPEAKER_00: to do something and having to maybe compromise on how you do that.
33:20
SPEAKER_01: Sure.
33:21
SPEAKER_02: You know, it's so interesting.
33:22
SPEAKER_02: I think a lot about this just because my wife is French.
33:25
SPEAKER_02: I spend a lot of time over in Europe and France.
33:29
SPEAKER_02: And it's interesting you brought up this about kind
33:32
SPEAKER_02: of obviously how your history affects you as a culture.
33:36
SPEAKER_02: And so it's very interesting that
33:41
SPEAKER_02: So religion,
33:42
SPEAKER_02: obviously in the U.S.
33:43
SPEAKER_02: kind of culturally, everyone speaks pretty openly about religion generally.
33:49
SPEAKER_02: In Europe, specifically in France, like people, like religion is kind of kept inside your home.
33:55
SPEAKER_02: And it wasn't until someone was explaining to this to me when, and I was like, why?
34:00
SPEAKER_02: It's just like,
34:01
SPEAKER_02: so I have a, my,
34:02
SPEAKER_02: my wife's,
34:03
SPEAKER_02: one of her closest friends growing up, his family's Jewish and like best friend.
34:08
SPEAKER_02: She never went and they,
34:10
SPEAKER_02: and they were,
34:10
SPEAKER_02: and they celebrated Shabbat every week and she never went over
34:13
SPEAKER_02: to one Shabbat dinner.
34:15
SPEAKER_02: She was the best friend, neighbor, neighbor.
34:18
SPEAKER_02: Wow.
34:19
SPEAKER_02: And I was like, what?
34:20
SPEAKER_02: Like, that's so interesting.
34:22
SPEAKER_02: And she,
34:22
SPEAKER_02: and someone explained to me,
34:26
SPEAKER_02: Which makes sense,
34:26
SPEAKER_02: which is like the reason why everyone is very much keep it to yourself is just
34:33
SPEAKER_02: a couple of generations ago,
34:34
SPEAKER_02: grandparents during World War II,
34:37
SPEAKER_02: the Nazis were coming into people's homes and taking everything and killing people
34:41
SPEAKER_02: and doing all the atrocities they were doing.
34:43
SPEAKER_02: And then you just like, I didn't even put two and two together.
34:46
SPEAKER_02: That has a multi-generational effect about how they deal with religion today.
34:51
SPEAKER_00: Yeah.
34:52
SPEAKER_00: It makes sense.
34:53
SPEAKER_00: You could see it.
34:55
SPEAKER_02: Yeah, no, it's interesting.
34:56
SPEAKER_02: It's sorry, that's a little side bend, but all right, so back to AI, electronic recycling.
35:02
SPEAKER_02: So, all right,
35:04
SPEAKER_02: so let's talk about the transition because I think this is one of the crux of
35:07
SPEAKER_02: the conversation, right?
35:08
SPEAKER_02: So obviously,
35:09
SPEAKER_02: historically,
35:12
SPEAKER_02: the massive growth has been in things like phones,
35:15
SPEAKER_02: laptops,
35:16
SPEAKER_02: servers, CPUs,
35:17
SPEAKER_02: and now obviously we have this whole kind of next generation
35:19
SPEAKER_02: of high-performance AI infrastructure equipment.
35:22
SPEAKER_02: And so...
35:24
SPEAKER_02: Can you just kind of explain what you're seeing on the field right now as this kind
35:28
SPEAKER_02: of transition is happening?
35:29
SPEAKER_02: Because the volumes and the needs of services are just going to change,
35:33
SPEAKER_02: I think, in an interesting way.
35:34
SPEAKER_02: And so, I don't know, I'll let you answer it however you want.
35:38
SPEAKER_00: So there is a huge change right now in this landscape where
35:45
SPEAKER_01: the volume
35:46
SPEAKER_01: of used electronics is just
35:48
SPEAKER_00: growing exponentially.
35:50
SPEAKER_00: So...
35:52
SPEAKER_00: The solutions and the services that were needed 10 years ago is going
35:58
SPEAKER_00: to look totally different from 10 years from now.
36:02
SPEAKER_00: And we're right in the middle of that change.
36:04
SPEAKER_00: What services does the market need?
36:06
SPEAKER_00: How do we perform those services?
36:09
SPEAKER_00: So we're in the middle of this big, massive change.
36:13
SPEAKER_00: And the other thing is,
36:17
SPEAKER_00: there's going to be truckloads and truckloads and truckloads of servers.
36:22
SPEAKER_00: Getting upgraded on a weekly basis from now on.
36:25
SPEAKER_00: That's not going to change.
36:26
SPEAKER_00: It's only going to increase.
36:28
SPEAKER_00: And so how we deal with that is in the middle of a change.
36:32
SPEAKER_00: I think it was in our first conversation,
36:34
SPEAKER_00: we may have talked about this,
36:35
SPEAKER_00: but the traditional flow was there was a flow of used electronics.
36:42
SPEAKER_00: These high-tech components could go to China and get reused in manufacturing.
36:46
SPEAKER_00: And there are some nuances to the regulations.
36:53
SPEAKER_00: Industry regulations and in some places,
36:56
SPEAKER_00: international laws that govern that flow of used electronics.
37:01
SPEAKER_00: I think my opinion as someone in the industry is that we have totally outgrown some
37:06
SPEAKER_00: of those regulations and laws because they're written sort of from the standpoint
37:10
SPEAKER_00: of dealing with waste, trash, and not dumping your trash in another country.
37:15
SPEAKER_00: But right now,
37:15
SPEAKER_00: there's so much high technology that would follow a similar path that we need
37:21
SPEAKER_00: to differentiate.
37:22
SPEAKER_00: Technology reuse path from trash path.
37:26
SPEAKER_00: And then you can more effectively regulate each one.
37:28
SPEAKER_00: Because if you try to regulate them together, you have this problem.
37:31
SPEAKER_00: The high technology is going to go down this path.
37:36
SPEAKER_00: But the regulations are written for trash.
37:38
SPEAKER_00: So all the technology that's going down there has to sort of be hidden or obfuscated
37:44
SPEAKER_00: and gray area its way where it's going to go.
37:48
SPEAKER_00: There's no stopping it.
37:49
SPEAKER_00: There's too much demand, too much money, too much flow.
37:52
SPEAKER_00: It's like trying to stop the water coming out of a dam.
37:57
SPEAKER_00: So then you're not efficiently regulating either one.
38:01
SPEAKER_00: But if you...
38:03
SPEAKER_02: Sorry, unpack that a little bit more for me.
38:04
SPEAKER_02: Like how specifically when you're saying the regulations are set up
38:08
SPEAKER_02: for waste versus this higher value.
38:12
SPEAKER_00: So you've probably seen like in your neighborhood where they're like e-waste drive or something.
38:17
SPEAKER_00: And you can go donate or dispose of your old e-waste and they'll take it
38:22
SPEAKER_00: and responsibly recycle it.
38:26
SPEAKER_00: Or you can dump your old computer at Best Buy.
38:29
SPEAKER_00: You can take your old computer to Best Buy and they will efficiently or responsibly recycle it.
38:34
SPEAKER_00: That is a stream of random waste.
38:38
SPEAKER_00: Old TV remote controls, old cable boxes, old laptops, old phones, whatever it is.
38:44
SPEAKER_00: It can all go down and it's this random mix of everything and it probably has very little.
38:49
SPEAKER_00: So what can happen with that?
38:56
SPEAKER_00: You aggregate all of this different waste stream from community e-waste drive,
39:00
SPEAKER_00: school e-waste, certain retailers who take e-waste.
39:03
SPEAKER_00: You aggregate all of that into a LA, for example.
39:08
SPEAKER_00: You sell it all in a container, and then you get it all for free.
39:12
SPEAKER_00: So then you sell it to somebody in a developing country for $100,000.
39:18
SPEAKER_00: They take that container and they can pay their low labor costs to go
39:22
SPEAKER_00: through it one device at a time and be like, oh, this is the PCBs.
39:26
SPEAKER_00: We can smelt those over here.
39:28
SPEAKER_00: This is the copper wires.
39:29
SPEAKER_00: We can recover copper over there.
39:31
SPEAKER_00: And there, the labor costs work.
39:34
SPEAKER_00: So that's the flow of the waste.
39:37
SPEAKER_00: And then there's regulations and laws to try to make sure
39:39
SPEAKER_00: that that's not just dumping trash or leading to these dirty, polluting operations.
39:47
SPEAKER_00: But what about the big company who decommissions 100,000 servers and pulls out
39:54
SPEAKER_00: a million sticks of RAM?
39:58
SPEAKER_00: Those RAM modules worth tens of millions of dollars.
40:03
SPEAKER_00: Is that e-waste?
40:05
SPEAKER_00: What would you say?
40:08
SPEAKER_01: What laws are going to cover it now?
40:10
SPEAKER_00: Now I've got a warehouse full of RAM.
40:11
SPEAKER_00: Is it e-waste?
40:13
SPEAKER_00: If it's e-waste...
40:15
SPEAKER_00: Then it can't go anywhere, right?
40:18
SPEAKER_00: I'm not allowed to export it to, well, technically America allows you to export it.
40:22
SPEAKER_00: No one allows you to import it.
40:23
SPEAKER_00: So I can't send it to Hong Kong.
40:26
SPEAKER_00: I can't send it to China because it's e-waste.
40:28
SPEAKER_00: It's electronic waste.
40:29
SPEAKER_00: So, okay, it's electronic parts.
40:33
SPEAKER_00: It's computer parts.
40:34
SPEAKER_00: It's not waste.
40:35
SPEAKER_00: It's computer parts.
40:36
SPEAKER_00: Well, then they say, well, what, what, are you going to do with it?
40:41
SPEAKER_00: Are you going to put it in a computer when you get here?
40:43
SPEAKER_00: No, we're going to take the chips off and reuse the chips.
40:47
SPEAKER_00: It sounds very similar at that point to the guys who bought the container of garbage, right?
40:52
SPEAKER_00: You're going to sit there and sort through it and take parts out and throw parts away.
40:56
SPEAKER_00: So,
40:59
SPEAKER_00: It makes the whole supply chain very inefficient when it's not properly categorized
41:04
SPEAKER_00: and regulated.
41:05
SPEAKER_00: And that's fine because,
41:07
SPEAKER_00: like I said, the world has changed since most of those regulations were written.
41:11
SPEAKER_00: But now you're dealing with industry regulations, export laws, import laws, shipping laws.
41:17
SPEAKER_00: You name it.
41:18
SPEAKER_00: And it gets very complicated very quick.
41:20
SPEAKER_00: But the state right now makes it very hard to correctly identify
41:25
SPEAKER_00: and regulate these different flows.
41:28
SPEAKER_00: It's all more or less default into electronic waste,
41:32
SPEAKER_00: which leads to people just doing things really messy.
41:35
SPEAKER_00: And none of it's regulated very well.
41:38
SPEAKER_00: Got it.
41:38
SPEAKER_00: So that kind of comes back around to onshoring,
41:42
SPEAKER_00: which would be a big part of providing some solutions to that.
41:47
SPEAKER_02: So before we go over there, can you just give folks like, so today, right?
41:54
SPEAKER_02: So if you're just talking about kind of an AI data center and GPUs,
42:02
SPEAKER_02: and if they're going to decommission some racks or a company is going
42:07
SPEAKER_02: to decommission a bunch of GPUs that they had for whatever reason or they're going
42:10
SPEAKER_02: to upgrade...
42:13
SPEAKER_02: How does that work today right now with that flow?
42:17
SPEAKER_02: Because it is a higher value.
42:18
SPEAKER_02: Obviously, there's a huge shortage of memory.
42:20
SPEAKER_02: There's a huge shortage of GPUs.
42:23
SPEAKER_02: What happens today?
42:29
SPEAKER_00: What I would say is that the infrastructure
42:32
SPEAKER_00: to support AI data centers is more mature in The West,
42:40
SPEAKER_00: North America or Western Europe than anywhere else in the world.
42:43
SPEAKER_00: Because they have to re-engineer data centers,
42:46
SPEAKER_00: more electricity, more connectivity, more redundancy, more cooling.
42:50
SPEAKER_00: So a data center that's 10 or 20 years old may not support the latest and greatest GPUs.
42:56
SPEAKER_00: So they're building data centers to support,
42:58
SPEAKER_00: they're building out the infrastructure to support the GPUs now.
43:01
SPEAKER_00: And the West is more ahead than the rest of the world.
43:05
SPEAKER_00: In the West,
43:06
SPEAKER_00: right now,
43:07
SPEAKER_00: in 2026,
43:07
SPEAKER_00: like Q4, 2026, Q3, Q2,
43:10
SPEAKER_00: a little bit,
43:12
SPEAKER_00: we started to see an increasing flow of the first generation
43:17
SPEAKER_00: of real dedicated GPU systems,
43:20
SPEAKER_00: complete engineered GPU systems, hitting this upgrade cycle.
43:27
SPEAKER_00: So let's say you have a three- or four-year-old GPU system,
43:31
SPEAKER_00: which is lots of racks, lots of switches.
43:35
SPEAKER_00: Being decommissioned at once.
43:39
SPEAKER_00: There is still huge demand for those systems.
43:42
SPEAKER_00: So it's either the people with the infrastructure that's trailing a little bit in
43:47
SPEAKER_00: the West, which we still see right now.
43:49
SPEAKER_00: People are buying those used systems from your top tier guy who's used it for three years.
43:53
SPEAKER_00: And then your second tier,
43:55
SPEAKER_00: third tier people are buying them up
43:57
SPEAKER_00: and putting them anywhere they can get data center allocation.
44:00
SPEAKER_00: Because the compute that they produce is still in demand.
44:04
SPEAKER_00: So they can still sell that compute at a decent profit margin.
44:09
SPEAKER_00: And that doesn't even account for eventually over the next few years
44:13
SPEAKER_00: as other developing markets catch up with their infrastructure,
44:16
SPEAKER_00: other countries, other regions.
44:18
SPEAKER_00: Then the first thing,
44:19
SPEAKER_00: once they get their infrastructure done,
44:20
SPEAKER_00: they're going to need to put stuff in there.
44:23
SPEAKER_00: So I foresee the demand will stay pretty strong for a while.
44:27
SPEAKER_00: So traditionally, servers at the end of three, four, five years, they just get demanufactured.
44:32
SPEAKER_00: So there's not a huge demand for an old server that just does math server stuff.
44:38
SPEAKER_00: But AI servers, even the old ones, are still very much in demand.
44:43
SPEAKER_00: So they're not getting demanufactured yet.
44:46
SPEAKER_00: They're getting more or less refurbishingly sold.
44:50
SPEAKER_02: Yeah, it's interesting.
44:51
SPEAKER_02: And then it gets into this debate of, which I'm a huge fan of, which is decentralized AI.
44:55
SPEAKER_02: And obviously,
44:56
SPEAKER_02: as we see more and more open source localized models and just kind of like
45:01
SPEAKER_02: the reality of it is most,
45:03
SPEAKER_02: unless you're on the frontier when you're working with this stuff,
45:05
SPEAKER_02: like the vast majority of intelligence,
45:08
SPEAKER_02: especially for like workflows and basic enterprise level work, right?
45:12
SPEAKER_02: You don't need such heavy workloads on these GPUs.
45:15
SPEAKER_00: Yeah.
45:16
SPEAKER_00: You know, I noticed... Do you remember when the iPhone first came out?
45:20
SPEAKER_00: Do you remember the first time you saw somebody use an iPhone?
45:23
SPEAKER_00: Of course.
45:24
SPEAKER_00: And they didn't...
45:27
SPEAKER_00: The people I saw using it,
45:28
SPEAKER_00: they would text with it,
45:30
SPEAKER_00: maybe take pictures, grainy pictures, maybe check their email on it.
45:34
SPEAKER_00: And then that kind of turned into web browsing,
45:36
SPEAKER_00: and there was apps, and everyone's like, what's an app?
45:38
SPEAKER_00: And there was a few apps that I'm like,
45:41
SPEAKER_00: maybe I would use that app, maybe I wouldn't, like a Chinese dictionary one.
45:45
SPEAKER_00: But now a phone is indispensable.
45:48
SPEAKER_00: I can travel the world with only my phone.
45:50
SPEAKER_00: It's got my ID.
45:51
SPEAKER_00: It's got my passport.
45:52
SPEAKER_00: It's got my credit cards.
45:54
SPEAKER_00: It's got my plane tickets.
45:55
SPEAKER_00: That's the only thing I need.
45:58
SPEAKER_00: And so it's changed fundamentally how technology affects our society.
46:04
SPEAKER_00: And I feel like we may be on the verge of that with AI because a lot
46:08
SPEAKER_00: of people I know don't Google things anymore.
46:11
SPEAKER_00: They just ask ChatGPT.
46:12
SPEAKER_00: I'm not going to Google turkey recipes.
46:14
SPEAKER_00: You just ask ChatGPT what you want to do, and it tells you one.
46:18
SPEAKER_00: And I think if that's where we're starting, what is it going to bleed over into?
46:24
SPEAKER_00: So I feel like this humanity's relationship with technology may be undergoing
46:34
SPEAKER_00: a major fundamental change.
46:37
SPEAKER_00: Where that technology starts to integrate more into our life, which,
46:40
SPEAKER_00: from my perspective,
46:41
SPEAKER_00: would just keep the demand high for this industry and
46:44
SPEAKER_00: for hardware lifecycle services.
46:48
SPEAKER_02: No, I mean, listen, this is obvious, right?
46:51
SPEAKER_02: It's going to go screenless and it's going to be ambient AI all around us,
46:54
SPEAKER_02: which I think gets to the point of You know,
46:58
SPEAKER_02: when you're looking at these like very high performance,
47:01
SPEAKER_02: high end GPUs,
47:02
SPEAKER_02: and then when you're talking about re utilization or even remanufacturing down,
47:06
SPEAKER_02: down the line, I mean,
47:08
SPEAKER_02: there's just going to be endless demand,
47:10
SPEAKER_02: in my opinion, all up and down, all up and down the stack.
47:14
SPEAKER_02: So you mentioned something about.
47:18
SPEAKER_02: From a circadian standpoint, providing services now to neoclouds.
47:23
SPEAKER_02: So can you tell me how you're seeing your business shifting in more detail based
47:28
SPEAKER_02: upon the needs that you're seeing that are going to be coming up the next two,
47:32
SPEAKER_02: three, four years?
47:33
SPEAKER_00: So there's a couple of things.
47:35
SPEAKER_00: One is with the demand for hardware.
47:39
SPEAKER_00: These neoclouds have such a demand.
47:41
SPEAKER_00: And there's tiers of neoclouds.
47:43
SPEAKER_00: You've got CoreWeave and Lambda and those guys.
47:46
SPEAKER_00: All the way down to people that just started last week.
47:51
SPEAKER_01: And they all need the same thing at a different
47:56
SPEAKER_00: scale and for a different budget.
47:58
SPEAKER_00: So you get down in this lower half of neoclouds and they're the ones who are buying
48:04
SPEAKER_00: the A100s and the used H100s.
48:08
SPEAKER_00: And they have their business model where they just need to get it.
48:12
SPEAKER_00: They pay...
48:14
SPEAKER_00: A good price for it because the stuff is still going for not far off what it costs new.
48:20
SPEAKER_00: So they still can make money.
48:21
SPEAKER_00: They're still making a profit even at that price point.
48:24
SPEAKER_00: And they're getting that hardware.
48:27
SPEAKER_00: They need as much of it as they can.
48:28
SPEAKER_00: But for data destruction, for example.
48:30
SPEAKER_00: So the original user runs these AI systems.
48:33
SPEAKER_00: Then they're just going to take all their SSDs out and shut them.
48:36
SPEAKER_00: So we can resell the systems.
48:38
SPEAKER_00: But then the first thing that person needs is SSDs.
48:43
SPEAKER_00: So can I sell them at used SSDs?
48:46
SPEAKER_00: Can I distribute new SSDs to them?
48:50
SPEAKER_00: There's ways we can increase our services and our value to these clients
48:55
SPEAKER_00: who are buying new stuff.
48:57
SPEAKER_00: Then if their business works, next step for them is they want the new stuff.
49:01
SPEAKER_00: So they know me, they come to me, can you help me get new stuff?
49:04
SPEAKER_00: Sometimes, yes,
49:05
SPEAKER_00: because in the overall global world,
49:08
SPEAKER_00: IT infrastructure, there are these weird pockets.
49:11
SPEAKER_00: The normal flow goes like NVIDIA to Dell, Dell to Bayer.
49:16
SPEAKER_00: But sometimes some global corporation will buy 1,000 GPUs and then they only use 990.
49:23
SPEAKER_00: So they've got 10 sitting there that they decide to liquidate.
49:27
SPEAKER_00: And those channels may flow across our desk.
49:31
SPEAKER_00: So there are times when I get relatively low quantities of even new stuff.
49:35
SPEAKER_00: So these neoclouds, these lower-tier neoclouds, smaller-scale neoclouds, I should say.
49:43
SPEAKER_00: Sure, sure.
49:43
SPEAKER_00: Smaller-scale neoclouds will still have a demand for even that new stuff.
49:47
SPEAKER_00: And they're not big enough to even get on Dell's radar.
49:49
SPEAKER_00: So Dell's not going to give them the time of day.
49:52
SPEAKER_00: But Ben might.
49:52
SPEAKER_00: Ben's like, hey, I got 10.
49:54
SPEAKER_00: Do you want 10?
49:55
SPEAKER_00: And they're like, man, we'd love to have 10.
49:57
SPEAKER_00: And they'd have to wait in line for them.
49:58
SPEAKER_00: They can get them next week.
50:00
SPEAKER_00: So that's kind of an area where we're seeing a lot of growth for us right now.
50:04
SPEAKER_00: And the NeoCloud space is just like the Wild West.
50:07
SPEAKER_00: So some of these guys are going to go out, they'll fall off, and some of them will explode.
50:12
SPEAKER_00: And then the other thing is,
50:14
SPEAKER_00: the way a lot of NeoClouds work is,
50:16
SPEAKER_00: they get,
50:19
SPEAKER_00: I don't know,
50:19
SPEAKER_00: they're clever enough to have a business and a business model and
50:22
SPEAKER_00: an off-take contract.
50:24
SPEAKER_00: So they've got a contract with somebody that's going to agree to,
50:30
SPEAKER_00: pre-commit to three years of off-takes.
50:33
SPEAKER_00: From a GPU system.
50:36
SPEAKER_00: Now they need to buy the GPU system.
50:37
SPEAKER_00: The GPU system is really expensive.
50:40
SPEAKER_00: So they take the off-take contract,
50:42
SPEAKER_00: and maybe they find data center space,
50:45
SPEAKER_00: and they find a venture capital company that's going to come in and give them
50:48
SPEAKER_00: a chunk of money.
50:49
SPEAKER_00: Not enough to buy what they need, but enough to leverage.
50:52
SPEAKER_00: So now they need to get the hardware.
50:58
SPEAKER_00: So they need $50 million worth of hard work, but they've only got $20 million in the bank.
51:02
SPEAKER_00: But they've got a contract where they're going to get $700,000 a month for the next three years.
51:07
SPEAKER_00: So they can afford a down payment and a lease payment.
51:11
SPEAKER_00: And they have an off-take contract.
51:13
SPEAKER_00: They have a data center contract.
51:14
SPEAKER_00: So all the pieces line up and they can afford the payment.
51:18
SPEAKER_00: So we're even getting into leasing now where we can help them buy that equipment.
51:24
SPEAKER_00: We'll lease it to them.
51:25
SPEAKER_00: And then their business runs,
51:28
SPEAKER_00: we help them grow,
51:29
SPEAKER_00: hopefully it scales, and they get more off-take contracts and need more equipment.
51:34
SPEAKER_00: And so that's another area
51:35
SPEAKER_00: where we're seeing hardware lifecycle services really growing way outside
51:39
SPEAKER_00: of what I taught traditionally.
51:42
SPEAKER_02: Yeah, that's so interesting, the fact of getting into actually leasing.
51:46
SPEAKER_02: Yeah.
51:47
SPEAKER_02: I would not have thought that, but it makes sense.
51:50
SPEAKER_02: I mean...
51:52
SPEAKER_00: Yeah, it's like a weird artifact for just how NeoCloud sprang up overnight
51:58
SPEAKER_00: and how their business model works.
52:00
SPEAKER_00: That leasing is really the solution that fits that business model best.
52:07
SPEAKER_02: Yeah, I mean, which makes sense, right?
52:09
SPEAKER_02: Because it's kind of like,
52:12
SPEAKER_02: it's no different than kind of traditional real estate development where like
52:15
SPEAKER_02: a developer, they're like, hey, I'm going to buy this building.
52:18
SPEAKER_02: I'm going to develop this building.
52:19
SPEAKER_02: I'm going to go get a tenant first.
52:21
SPEAKER_02: You're going to sign a 10-year lease or a five-year lease.
52:23
SPEAKER_02: And then they go get some equity.
52:25
SPEAKER_02: They get the bank loan.
52:26
SPEAKER_02: And then they do their thing.
52:29
SPEAKER_02: So it's very similar.
52:30
SPEAKER_00: It's funny.
52:31
SPEAKER_00: Did you just think of that?
52:33
SPEAKER_02: Well, I spent...
52:36
SPEAKER_02: Almost 15 years developing commercial real estate in Detroit.
52:41
SPEAKER_02: Oh, that's right.
52:42
SPEAKER_00: I've heard people talk about that.
52:43
SPEAKER_00: They've likened a NeoCloud business model to building apartment complexes.
52:49
SPEAKER_00: You get a bunch of renters, all you need is the apartment building.
52:52
SPEAKER_00: And then you make your payment on the construction loan or the whatever.
52:58
SPEAKER_00: And then you take in the rent from everybody and have a cash flow, positive cash flow.
53:04
SPEAKER_02: Yeah, it's a similar mechanic.
53:05
SPEAKER_00: Very similar, yeah.
53:08
SPEAKER_02: All right, let's get over the reshoring conversation.
53:10
SPEAKER_02: All right.
53:12
SPEAKER_02: So this whole conversation between you and I started,
53:14
SPEAKER_02: I'm like, oh, you got to come on and we got to unpack this on the pod.
53:18
SPEAKER_02: Yeah.
53:19
SPEAKER_02: Speaking of offtakers, we were talking about, obviously, the huge shortage currently in memory.
53:24
SPEAKER_02: Yeah.
53:25
SPEAKER_02: And then kind of your kind of view that,
53:29
SPEAKER_02: you know,
53:29
SPEAKER_02: you think the time is actually right for a variety of reasons where we can reshore
53:36
SPEAKER_02: a lot of this,
53:38
SPEAKER_02: especially because of the value of a lot of these individual parts
53:41
SPEAKER_02: or selective parts.
53:42
SPEAKER_02: And so can you just kind of talk me through kind of what you're thinking about there?
53:45
SPEAKER_00: Here's so the process of harvesting these high value components, CPUs or memory chips.
53:53
SPEAKER_00: Is pretty low-tech.
53:57
SPEAKER_00: It doesn't take a massive infrastructure investment, I would say.
54:01
SPEAKER_00: You can get an operation up and running pretty simply,
54:05
SPEAKER_00: and you don't need people with a huge engineering background to understand it
54:10
SPEAKER_00: and run it.
54:12
SPEAKER_00: And now,
54:13
SPEAKER_00: you're harvesting memory chips,
54:15
SPEAKER_00: which are huge in demand,
54:17
SPEAKER_00: and CPUs,
54:18
SPEAKER_00: which still have a demand, and You can then put them back into manufacturing.
54:24
SPEAKER_00: And these parts that are soldered onto motherboards, it's just called surface mount technology.
54:31
SPEAKER_00: So you use
54:35
SPEAKER_00: a certain thermal process to melt the solder and remove the component
54:41
SPEAKER_00: from the circuit board, right?
54:44
SPEAKER_00: So that's not hard.
54:46
SPEAKER_00: It's just as simple as it sounds.
54:48
SPEAKER_00: You clean it up.
54:50
SPEAKER_00: And then you put it in trays.
54:53
SPEAKER_00: Then you reball it.
54:55
SPEAKER_00: You put new solder on all those little contact points,
54:59
SPEAKER_00: which is very similar to screen printing a t-shirt.
55:03
SPEAKER_00: And then you have your component in a tray,
55:08
SPEAKER_01: which means it's all very uniform organization,
55:13
SPEAKER_00: alignment, and then it's reballed.
55:17
SPEAKER_00: So now it's ready to go into an automated,
55:19
SPEAKER_00: it's got this orientation, now it's ready to go into an automated process.
55:23
SPEAKER_00: And then you put in an automated process where like
55:25
SPEAKER_00: a robotic assembly line can run new circuit boards through here
55:29
SPEAKER_00: and pick up those components, heat them up.
55:33
SPEAKER_00: Really, it's like a little LED light that heats it up,
55:35
SPEAKER_00: melts the solder to exactly the right temperature,
55:37
SPEAKER_00: and then puts it in the exact right place on a new motherboard.
55:41
SPEAKER_00: That's it.
55:41
SPEAKER_00: I mean, that's the short version.
55:44
SPEAKER_00: But I mean, obviously, you can be good at it or bad at it.
55:47
SPEAKER_00: But that's it.
55:48
SPEAKER_00: That's the whole process.
55:49
SPEAKER_00: It's not highly toxic.
55:50
SPEAKER_00: It's not highly dangerous.
55:52
SPEAKER_00: It's not super high-tech.
55:54
SPEAKER_00: It's not like manufacturing new chips.
55:56
SPEAKER_00: And these chips are incredibly resource-intensive to manufacture.
56:01
SPEAKER_00: So reusing them is a wonderful continued use of that resource-heavy product.
56:10
SPEAKER_00: Device.
56:12
SPEAKER_00: Component.
56:13
SPEAKER_00: So you really are extending the life of those resources that went into the initial manufacture.
56:19
SPEAKER_00: So why can't we do that here?
56:21
SPEAKER_00: Why is it all being done overseas?
56:25
SPEAKER_00: And if you redid it here,
56:26
SPEAKER_00: and the reason why it's being done overseas is because generally,
56:29
SPEAKER_00: this hardware is just companies evaluate their downstream partners on the basis
56:35
SPEAKER_00: of how much money did I get back from it?
56:38
SPEAKER_00: So I deconditioned a thousand servers.
56:40
SPEAKER_00: This guy's going to help me recover $500,000.
56:42
SPEAKER_00: That guy helps me recover $550,000.
56:45
SPEAKER_00: So he's better.
56:46
SPEAKER_00: And that's it.
56:48
SPEAKER_02: And that's all that goes into the decision?
56:50
SPEAKER_02: That all goes into the decision right now?
56:51
SPEAKER_00: That is the only metric.
56:52
SPEAKER_00: They'll tell you other things and they can say other things.
56:55
SPEAKER_00: But at the end of the day,
56:56
SPEAKER_00: the guy who's making the decision is more or less held to that metric
57:00
SPEAKER_00: above all others.
57:01
SPEAKER_00: But if a company wanted to invest in the process and say,
57:04
SPEAKER_00: look, and they don't really have to sacrifice much money.
57:06
SPEAKER_00: It's still a profitable endeavor.
57:09
SPEAKER_00: But just get that who's paying the most money out of your head because
57:13
SPEAKER_00: that guy now has to cut his costs,
57:16
SPEAKER_00: which means doing it somewhere else is probably still going to be cheaper.
57:19
SPEAKER_00: But for regulation reasons and for onshoring reasons and
57:23
SPEAKER_00: for just cool vibes reasons,
57:25
SPEAKER_00: you could take all of that process and say, look,
57:29
SPEAKER_00: let's make a partnership with somebody who wants to do this process domestically.
57:33
SPEAKER_00: You could build it up.
57:33
SPEAKER_00: You could build it up in Detroit.
57:37
SPEAKER_00: You could do it right in downtown.
57:39
SPEAKER_00: It doesn't even, like I said, it's not that toxic.
57:41
SPEAKER_00: It doesn't take a massive facility.
57:42
SPEAKER_00: It's made a huge amount of infrastructure.
57:45
SPEAKER_00: You plug in some industrial machines, train some people how to use them.
57:49
SPEAKER_00: And it's exciting.
57:50
SPEAKER_00: It's a cool kind of entry-level tech job, I think.
57:54
SPEAKER_00: There's a lot of,
57:55
SPEAKER_00: we've even done some experiments with some of our processes in demanufacturing
57:59
SPEAKER_00: with like, you can service a unique niche of the job market.
58:05
SPEAKER_00: Because you can train people that are looking to upskill.
58:08
SPEAKER_00: You can put neurodivergent people to work because in some ways,
58:12
SPEAKER_00: it's a very technical but very repetitive job.
58:15
SPEAKER_00: So some of those people,
58:17
SPEAKER_00: it's a really,
58:19
SPEAKER_00: really great job for them because it really is exactly the kind of stimulus that
58:26
SPEAKER_00: That they need to feel very engaged and satisfied without feeling overstimulated
58:30
SPEAKER_00: or overwhelmed.
58:32
SPEAKER_00: So there's a lot of really good community reasons to think about doing this.
58:36
SPEAKER_00: And now,
58:37
SPEAKER_00: all you have to do is take who are the people generating the massive supply of it,
58:41
SPEAKER_00: and would one of them be willing to invest in this process?
58:45
SPEAKER_00: Because they can generate,
58:47
SPEAKER_00: these people,
58:47
SPEAKER_00: just think of who you know who's running all the data centers in the world.
58:51
SPEAKER_00: You know, your top five, six, ten hyperscalers.
58:54
SPEAKER_00: They're generating all this stuff.
58:56
SPEAKER_00: And their brand image and their community responsibility score,
59:00
SPEAKER_00: good citizen score, is important to them.
59:03
SPEAKER_00: Especially now.
59:04
SPEAKER_00: Especially right now.
59:05
SPEAKER_00: Yeah.
59:07
SPEAKER_00: The time is right for somebody to invest in this process.
59:09
SPEAKER_00: So they take all their server RAM that they're generating, that they're dumping.
59:13
SPEAKER_00: A lot of them are reusing some of it now.
59:14
SPEAKER_00: But the stuff that they're getting read up,
59:16
SPEAKER_00: they feed it to their partner who does this process with it.
59:20
SPEAKER_00: And out the other end comes new Amazon Basics or Google brand memory that they could sell.
59:28
SPEAKER_00: Yeah, it's not...
59:30
SPEAKER_00: It is what it is,
59:31
SPEAKER_00: but you've closed the loop for taking their retired data center stuff and turning it
59:36
SPEAKER_00: into a new useful product that extends the life of something that already has
59:40
SPEAKER_00: a bunch of carbon invested in it, time and energy and money invested in it.
59:45
SPEAKER_00: And I think that's a super cool business model.
59:47
SPEAKER_00: I would love to find a partner that we could do that with because we have all
59:51
SPEAKER_00: the expertise to do it.
59:53
SPEAKER_00: I think all the pieces are there.
59:54
SPEAKER_00: It's just one of those problems that takes bringing the right people together to
59:58
SPEAKER_00: the right table at the same time.
1:00:00
SPEAKER_00: And fleshing out the project and somebody being willing to invest in it.
1:00:06
SPEAKER_02: Right.
1:00:06
SPEAKER_02: And then the simple question is, okay,
1:00:08
SPEAKER_02: instead of selling your racks and servers for $500,000,
1:00:14
SPEAKER_02: then you're providing that supply and then maybe there's some sort of revenue split
1:00:20
SPEAKER_02: or something like that.
1:00:21
SPEAKER_00: Yeah.
1:00:22
SPEAKER_00: I mean, that's basically what happens now.
1:00:23
SPEAKER_00: You're just changing...
1:00:25
SPEAKER_00: The pieces between the revenue split and the output.
1:00:28
SPEAKER_00: And you could easily just ramp it up.
1:00:30
SPEAKER_00: It doesn't have to be too much of a commitment.
1:00:34
SPEAKER_02: Well, you know, it's so interesting.
1:00:35
SPEAKER_02: It's interesting you bring that up because these are such easy,
1:00:40
SPEAKER_02: simple things that I'm just a big believer in you do it.
1:00:47
SPEAKER_02: This is such an easy thing for any of these hyperscalers to actually do in
1:00:50
SPEAKER_02: the context of how much money and what they're making and what they're doing
1:00:53
SPEAKER_02: and how much money they're spending where it's like, okay, well,
1:00:56
SPEAKER_02: we might as well just utilize all of this spend and the investment
1:01:04
SPEAKER_02: that we're making.
1:01:05
SPEAKER_02: Why wouldn't we close the loop on it?
1:01:08
SPEAKER_02: It just doesn't even make...
1:01:09
SPEAKER_02: And then it's just even better for them because then you're remanufacturing,
1:01:12
SPEAKER_02: remaking more memory,
1:01:15
SPEAKER_02: more hardware that then goes into powering the stuff that they're selling
1:01:19
SPEAKER_02: to consumers and businesses.
1:01:21
SPEAKER_00: Yep.
1:01:21
SPEAKER_00: It makes sense.
1:01:23
SPEAKER_00: I think it's cool.
1:01:24
SPEAKER_00: I think it'll happen eventually.
1:01:26
SPEAKER_00: I hope that we get to be a part of it when it does because I think it's exciting.
1:01:31
SPEAKER_00: I would love to...
1:01:32
SPEAKER_00: I think it's the kind of thing you feel good about doing in your job.
1:01:36
SPEAKER_02: Yeah, because there's a why there, right?
1:01:42
SPEAKER_02: There's a reason why you're doing it.
1:01:44
SPEAKER_02: Are you ready for a little rapid fire?
1:01:45
SPEAKER_01: Then we'll wrap up?
1:01:46
SPEAKER_01: No, but let's do it in a little.
1:01:54
SPEAKER_01: Finish this sentence.
1:01:55
SPEAKER_02: The reason decommission hardware still ends up overseas is?
1:01:59
SPEAKER_00: People prioritize value recovery over what actually happens to it.
1:02:05
SPEAKER_02: What does China do better than the U.S.
1:02:06
SPEAKER_02: in this business that most people don't understand or is
1:02:09
SPEAKER_01: not obvious?
1:02:13
SPEAKER_00: Getting value out of the things most people discard.
1:02:17
SPEAKER_01: Most undervalued piece of hardware sitting in a data center right now?
1:02:26
SPEAKER_01: Who else should I have a conversation with here?
1:02:27
SPEAKER_01: Going Direct.
1:02:31
SPEAKER_00: I could think of a couple of people.
1:02:32
SPEAKER_00: Do you want me to say their names?
1:02:33
SPEAKER_02: Sure.
1:02:34
SPEAKER_02: And then if it's a fit, I'll reach out to you.
1:02:37
SPEAKER_00: I have a friend who works at a company called NF Smith, Parker Deardorff.
1:02:42
SPEAKER_00: He sort of spearheads their data center services, their data center client relationships.
1:02:48
SPEAKER_00: Very smart guy.
1:02:49
SPEAKER_00: Very nice.
1:02:50
SPEAKER_00: He's really, really innovative when it comes to seeing how to service this industry.
1:02:57
SPEAKER_00: I think Sean McGann at SEMS.
1:03:01
SPEAKER_00: It was an ITAD company, sends lifecycle or sends models management.
1:03:06
SPEAKER_00: He's a nice guy and a good friend too.
1:03:08
SPEAKER_02: Cool.
1:03:09
SPEAKER_02: I might take you up on that offer because I think... Or Zach.
1:03:13
SPEAKER_02: Or Zach.
1:03:16
SPEAKER_02: We'll get him up on the pod.
1:03:16
SPEAKER_00: He's a fun guy.
1:03:17
SPEAKER_02: He's not ready yet.
1:03:18
SPEAKER_02: He's not ready yet, but we'll get him up.
1:03:21
SPEAKER_02: But...
1:03:22
SPEAKER_02: No, listen, I really appreciate you taking the time.
1:03:25
SPEAKER_02: And I love talking about this stuff now because it's,
1:03:28
SPEAKER_02: I think it's,
1:03:30
SPEAKER_02: obviously people in your industry are starting to think about it,
1:03:32
SPEAKER_02: but there's a lot to navigate.
1:03:34
SPEAKER_02: And I get really excited when you have the amount of growth that we have in this industry.
1:03:38
SPEAKER_02: And like you were saying, like a lot of stuff's changing.
1:03:40
SPEAKER_02: So there's gonna be new business models, new ways of thinking through things.
1:03:43
SPEAKER_02: And It's a fun time to think about it.
1:03:46
SPEAKER_02: So if it's completely like with the onshoring and decentralized production theme
1:03:50
SPEAKER_02: of Going Direct.
1:03:51
SPEAKER_00: Yeah.
1:03:51
SPEAKER_00: I like just getting the getting the ideas out there.
1:03:54
SPEAKER_00: You know,
1:03:55
SPEAKER_00: as long as you get these ideas and innovation in the mix,
1:03:58
SPEAKER_00: good things will come out of it.
1:04:00
SPEAKER_00: And as the industry grows and as the world changes,
1:04:02
SPEAKER_00: there's just like unlimited opportunity right now.
1:04:04
SPEAKER_00: So it's exciting.
1:04:06
SPEAKER_02: Totally.
1:04:06
SPEAKER_02: Oh, I do want to ask you one thing before we wrap is.
1:04:10
SPEAKER_02: I noticed that you guys launched a market intelligence product,
1:04:14
SPEAKER_02: which I thought was really interesting.
1:04:16
SPEAKER_02: And so how does that actually work?
1:04:19
SPEAKER_02: How do we look at the data that goes into it?
1:04:21
SPEAKER_00: How does it work?
1:04:22
SPEAKER_02: Yeah, so just for enterprises,
1:04:25
SPEAKER_02: just so folks know if they're actually interested in that,
1:04:27
SPEAKER_02: who are watching or listening, to have market intelligence around their hardware.
1:04:32
SPEAKER_02: So I would say there's two...
1:04:35
SPEAKER_00: Two keys to it.
1:04:37
SPEAKER_00: Two applications of it.
1:04:39
SPEAKER_00: One is for an enterprise user who says,
1:04:41
SPEAKER_00: hey, we're retiring this stuff or we have all these assets in our portfolio.
1:04:44
SPEAKER_00: How much are they worth?
1:04:45
SPEAKER_00: They need to know that or just curious about it.
1:04:48
SPEAKER_00: They can use that tool to just get a number.
1:04:50
SPEAKER_00: And that data, we already have it.
1:04:51
SPEAKER_00: We already know.
1:04:53
SPEAKER_00: They don't have to send it to us as an official bid.
1:04:55
SPEAKER_00: We're happy to help people.
1:04:57
SPEAKER_00: Just We're not trying to sequester data and control people.
1:05:02
SPEAKER_00: We're happy to share if it's helpful.
1:05:04
SPEAKER_00: And we feel that by being helpful,
1:05:06
SPEAKER_00: good players in the industry,
1:05:08
SPEAKER_00: we'll have a reputation for being good, helpful people.
1:05:10
SPEAKER_00: And that's good for us, our reputation, our business.
1:05:13
SPEAKER_00: The other one is because of the way AI hardware purchasing and financing has changed
1:05:21
SPEAKER_00: with these SPVs,
1:05:23
SPEAKER_00: with leasing,
1:05:24
SPEAKER_00: with loans and bonds in some cases,
1:05:27
SPEAKER_00: then there's There's a big bank interest in what is the value of this asset?
1:05:32
SPEAKER_00: What is the value of this collateral this year, next year, the year after that?
1:05:36
SPEAKER_00: That is more of a service that we can provide because those people aren't just curious.
1:05:41
SPEAKER_00: They need it.
1:05:42
SPEAKER_00: They need that service for their books and for their calculations.
1:05:45
SPEAKER_00: And because we see all parts of the industry, it's not theoretical.
1:05:49
SPEAKER_00: It's not we're guessing.
1:05:50
SPEAKER_00: It's not anything like that.
1:05:52
SPEAKER_00: We see transactions every day in this stuff.
1:05:55
SPEAKER_00: What's the high?
1:05:56
SPEAKER_00: What's the low?
1:05:56
SPEAKER_00: What's the demand?
1:05:57
SPEAKER_00: What is no one interested in?
1:05:59
SPEAKER_00: Then we can squeeze all that in to our internal systems
1:06:04
SPEAKER_00: and really accurately tell you exactly what your IT assets are worth right now.
1:06:10
SPEAKER_00: And when you're looking at it from a banking angle,
1:06:13
SPEAKER_00: banking lens for like a collateral valuation,
1:06:16
SPEAKER_00: then there's a few, you kind of want to know all the parameters, you know.
1:06:21
SPEAKER_00: And so there's becoming more of a need for that.
1:06:24
SPEAKER_00: And I feel like we have the ability to provide that service way stronger than a lot
1:06:29
SPEAKER_00: of the other people I've seen advertising it online.
1:06:33
SPEAKER_00: Because we're like the ones, they all want our data, to be honest.
1:06:37
SPEAKER_00: And I'm like, I don't know if I'm ready to share it or give it away.
1:06:43
SPEAKER_00: Because I'm realizing the data and the visibility we have
1:06:46
SPEAKER_00: into actually what's happening every day in the market is valuable.
1:06:49
SPEAKER_02: Sure.
1:06:50
SPEAKER_02: Totally.
1:06:51
SPEAKER_02: Cool.
1:06:51
SPEAKER_02: Well, thanks, Ben.
1:06:52
SPEAKER_02: I appreciate it, my man.
1:06:53
SPEAKER_02: And we'll keep in touch and maybe we'll get this project off the ground.
1:06:57
SPEAKER_02: I would
1:06:58
SPEAKER_00: love to.
1:06:58
SPEAKER_00: I would love to.
1:07:00
SPEAKER_00: Where in France are you?
1:07:02
SPEAKER_00: Paris.
1:07:03
SPEAKER_00: Okay, cool.
1:07:04
SPEAKER_00: Well, enjoy.
1:07:06
SPEAKER_01: Thank you.
1:07:07
SPEAKER_00: Take care.
1:07:08
SPEAKER_02: Hey, my friends, Jordan here.
1:07:10
SPEAKER_02: First and foremost,
1:07:11
SPEAKER_02: a sincere thank you and appreciation for all of our early listeners,
1:07:15
SPEAKER_02: readers, and supporters at Going Direct.
1:07:17
SPEAKER_02: It's really what keeps me going to do this each and every week
1:07:19
SPEAKER_02: because there's clearly a community of folks out there looking to build
1:07:23
SPEAKER_02: a Going Direct.
1:07:24
SPEAKER_02: I hope you all have a great day and remember to go direct.