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THIS WEEK IN AI: Anthropic SpaceXAI Deal | Elon vs OpenAI Trial · In the Loop AI

0:00
Ejaaz: This is the most ridiculous turn of events. No one saw this coming.
0:04
Ejaaz: Two of the biggest rivals in AI, SpaceX and Anthropic, are teaming up to take
0:10
Ejaaz: down Sam Altman at OpenAI.
0:13
Ejaaz: And the reason why this is so ridiculous is literally a month ago,
0:17
Ejaaz: Elon was posting tweets like this.
0:19
Ejaaz: Anthropic hates Western civilization. What else have we got?
0:22
Ejaaz: We've got your AI hates white Asians, heterosexuals, and men.
0:26
Ejaaz: This is misanthropic and evil. all the way to today or yesterday where he announced
0:31
Ejaaz: that I've reviewed Dario, I've spoken to the senior team at Anthropic,
0:36
Ejaaz: and I have determined that they are in fact not evil.
0:39
Ejaaz: And Claude, I quote, will probably be good.
0:43
Ejaaz: This is a huge ton of events. They've signed a big deal where Anthropic is going
0:47
Ejaaz: to buy $5 billion worth of SpaceX's GPUs, also known as Colossus One,
0:52
Ejaaz: their first major data center.
0:55
Ejaaz: And in turn, they're going to double everyone's Claude restriction limits.
0:58
Ejaaz: And Claude is finally going to catch up with OpenAI.
1:01
Ejaaz: I am shocked that this partnership is happening, but it's great to see.
1:05
Josh: You got to love a CEO that changes his mind. The guy who hated Anthropic,
1:08
Josh: he spent a week with them and he was like, you know what? These guys aren't that bad.
1:11
Josh: What did he say here? He says, so long as they engage in critical self-examination,
1:16
Josh: Claude will probably be good.
1:17
Josh: He said, everyone I met was highly competent and cared a great deal about doing the right thing.
1:21
Josh: No one set off my evil detector. So he went, he did some background checks and
1:25
Josh: he said, yeah, we'll give you the entire Colossus One data center. I'm now your landlord.
1:30
Josh: That's a really funny turn of events. I think it's important to highlight the
1:33
Josh: context of why this is so important for anyone who has been following along.
1:37
Josh: Anthropocos had a really difficult time keeping up with their compute demands,
1:40
Josh: mostly because they have grown so quickly.
1:42
Josh: In fact, yesterday at Claude's coding event, we had a clip from Dario who was
1:46
Josh: kind of doing just a general state of the union.
1:48
Josh: And he shared with the public that anthropic was off by a factor of eight in
1:53
Josh: projecting their growth. So over the course of the year, they projected
1:56
Josh: For about a 10x multiple on the amount of compute they would need.
1:59
Josh: The reality is that this year alone, they are now guiding for 80 times what they were expecting.
2:05
Josh: A full 8x multiple higher than what they were projecting.
2:09
Josh: So therefore, they had a big problem. They couldn't serve the compute.
2:12
Josh: The quality of Opus was getting much worse. They needed compute.
2:15
Josh: Where is the only large coherent cluster that's sitting dormant? Well, it's owned by XAI.
2:21
Josh: It's owned by the SpaceX team, and they signed a deal to give them the entire thing.
2:25
Josh: So the whole Colossus 1 cluster that XAI was using to train their early models is now run by Anthropic.
2:30
Josh: And as a result, like you mentioned, DJAS, they doubled the rate limits.
2:33
Josh: And now Colossus 2, which is the new largest cluster, that's where SpaceX AI
2:38
Josh: is going to be training their new data centers.
2:40
Josh: Now you'll notice I said SpaceX AI and not XAI, because as of yesterday,
2:44
Josh: XAI has been depreciated. It no longer exists.
2:47
Josh: SpaceX is kind of rolling everything up into one. And now they are working together
2:51
Josh: right down the street anthropic is serving ai from one data center and spacex
2:56
Josh: ai is serving data from the other and this is a pretty big change of heart in
3:00
Josh: the ai race this is a big deal
3:01
Ejaaz: There's so many stories wrapped into this one story both positive and perplexing
3:07
Ejaaz: to me that like i don't know i'm just gonna uh mind dump on you for a bit josh
3:12
Ejaaz: and like let me know where where you think i end up okay so
3:15
Ejaaz: Number one, SpaceX has been, or XAI, has been trailing behind the frontier labs,
3:21
Ejaaz: right? They didn't have enough compute.
3:22
Ejaaz: We haven't had a good pioneering grok release for like ages at this point, well over a year.
3:28
Ejaaz: And so the idea was, okay, if you amass enough GPUs, you can create a better
3:32
Ejaaz: model. But that hasn't been the case.
3:34
Ejaaz: And an article broke last week that said that XAI hasn't even been utilizing
3:40
Ejaaz: all their GPUs. In fact, 11% of the million GPUs that they have hasn't being used for Grok.
3:46
Ejaaz: And the idea here would be that Grok just isn't as in demand as some of these
3:51
Ejaaz: other models like Claude and ChatGPT.
3:53
Ejaaz: So now we see Elon pivoting to a NeoCloud to become an AI compute infrastructure provider.
3:59
Ejaaz: And this isn't the first time that he's done it. Literally two weeks ago,
4:02
Ejaaz: he signed a deal with Cursor to do the exact same thing.
4:05
Ejaaz: And that, by the way, was for Colossus 2. So although we're saying he's using
4:09
Ejaaz: Colossus 2 to train Grok models, he's also sectioning off a portion of that
4:13
Ejaaz: to allow Cursor to build their own coding model.
4:16
Ejaaz: Now, that's a bit of a different deal because the agreement that they've signed
4:19
Ejaaz: is if Cursor builds a really good coding model, hey, could you like lend that
4:23
Ejaaz: to XAI for Grok as well so we can pass it off as a code code competitor?
4:27
Ejaaz: So that's a little more symbiotic between the two companies.
4:30
Ejaaz: But for Anthropic, it's pretty clear. Anthropic pays $5 billion for
4:34
Ejaaz: Elon gets to register that as revenue so that, you know, XAI makes a bunch of money.
4:39
Ejaaz: And for Anthropic, they get access to 300 megawatts of power this month.
4:44
Ejaaz: That is a crazy amount of power to have online. And it's pretty clear from Dario's
4:48
Ejaaz: words in that clip that we just showed, which is that Anthropic has been lagging behind on compute.
4:54
Ejaaz: We finally have the answer as to why we don't have clawed midos.
4:57
Ejaaz: In my opinion, it's not because it was too dangerous.
4:59
Ejaaz: It's because they didn't have enough compute to serve it in the first place.
5:01
Ejaaz: And Living Proof is literally their biggest rival, OpenAI, which delivered 5.5 to everyone.
5:06
Ejaaz: And it is called Mythos Little. So the story writes itself.
5:10
Josh: Yeah, now Anthropic, they're basically serving compute from every single hyperscaler.
5:14
Josh: They have a deal with AWS, with Google, with Microsoft, with NVIDIA,
5:17
Josh: with FluidStack, and now SpaceX.
5:19
Josh: And SpaceX is the most exciting, the most noteworthy of these,
5:22
Josh: because this seems like a pretty large pivot in their business model.
5:24
Josh: Now they have Colossus 2, which is currently 500,000 coherent Blackwell chips in a single cluster.
5:31
Josh: That's the most powerful in the world so hopefully we start
5:34
Josh: to see some amazing stuff coming out of this SpaceX AI team
5:37
Josh: but more importantly when you look at the SpaceX business model
5:40
Josh: that's performed so well it's very much a services industry they're taking
5:43
Josh: satellites and they're blasting them into outer space and they have their own
5:46
Josh: business built on top of it with Starlink but they are that service provider
5:49
Josh: and owning the rail has proved to be very lucrative as a business model now
5:53
Josh: what SpaceX AI is doing currently is kind of the same thing but early stages
5:57
Josh: where they have this infrastructure they're incredible at building data centers
6:00
Josh: faster than everyone else.
6:01
Josh: And now they're leasing it out to other people who need it.
6:04
Josh: This applies further out with space as well.
6:07
Josh: Now, in the announcement that they spoke about, they very clearly mentioned space AI data centers.
6:12
Josh: Anthropic is very excited about this. And it seems as if they're going to be
6:15
Josh: working together as well for the space part of the deal.
6:18
Josh: So once that Starship 3 rocket comes online this year, once they start getting
6:22
Josh: payload into space and they start launching satellites, Anthropic is going to
6:25
Josh: have data centers on those rockets into outer space to help with their compute needs.
6:29
Josh: So not only is SpaceX AI currently sitting on the largest coherent cluster of
6:32
Josh: GPUs with Colossus 2, but
6:35
Josh: They now own all of the rails and the only way of getting compute into outer
6:39
Josh: space for themselves, but also for every other company in the world who's going
6:43
Josh: to need more data centers that are going to need to go out in outer space.
6:45
Josh: It's a pretty amazing business they have.
6:47
Ejaaz: I think this is a great move for Elon on Xair.
6:50
Ejaaz: And I'm in fact more bullish on Xair after they've made this announcement because
6:54
Ejaaz: Elon is just doing what he does best.
6:57
Ejaaz: He does a zero to one innovation and then he scales the crap out of that.
7:02
Ejaaz: He did that with electric cars. He's doing that with humanoid robots,
7:05
Ejaaz: and now he's going to do that, hopefully, with compute.
7:08
Ejaaz: No one has built a data center as large and as powerful as he has in the time that he has.
7:14
Ejaaz: Do you know what I mean? So he just has a very impressive knack for scaling things.
7:18
Ejaaz: I want to share this tweet, which I think summarizes this entire story with
7:22
Ejaaz: a nice bow tie, which is, XAI is a middling frontier lab and an incredible world-class infra provider.
7:29
Ejaaz: Anthropic is an incredible frontier lab and a middling infra provider.
7:34
Ejaaz: They had to join forces in order to defeat OpenAI, which is both a good frontier lab with good infra.
7:40
Ejaaz: And that's very much how I see this playing out. Anthropic needed compute.
7:44
Ejaaz: XAI has a lot of compute needed to sell it, so it works vice versa.
7:48
Ejaaz: It's important to note that having Anthropic as one of your major customers
7:52
Ejaaz: for compute is probably one of the biggest compliments you can get.
7:55
Ejaaz: I just want to point out that Amazon, Google, and I believe Microsoft's 50%
8:00
Ejaaz: of their compute backlog is purchased by Anthropic themselves.
8:04
Ejaaz: So Anthropic is trying to get their hands on all the compute that makes sense.
8:07
Ejaaz: And this is just another partnership that enables that. So cool to see.
8:10
Josh: Yeah, they're trying to play catch up and it seems as if they have this.
8:14
Josh: It's funny. This was literally the only way they could have got it.
8:16
Josh: This is the only compute cluster of this size available on earth for them.
8:20
Josh: And they somehow managed to secure it.
8:22
Ejaaz: Well, actually, Josh, there is another company whose stock has been underperforming
8:26
Ejaaz: for the last month, who also has the second biggest cluster or data center,
8:32
Ejaaz: and might also do the same thing because their AI products aren't in demand.
8:36
Josh: You guess? Oh, can I take a guess? Yeah.
8:39
Josh: Speaking of products that are not in demand, we have meta who has
8:42
Josh: also spent a tremendous amount of money on ai and compute and has yes nothing
8:47
Josh: to show for it or not much at least so is that who comes next is this the new
8:51
Josh: type of business model did like spacex just start the new thing like hey if
8:56
Josh: you suck at ai perhaps you can just like use our compute until we figure it
9:00
Josh: out and you pay us a lot of money for that i
9:02
Ejaaz: I can do you one better um meta actually announced on their previous uh earnings
9:06
Ejaaz: uh zuck in a note to to the public said,
9:10
Ejaaz: we're making this massive bet because we can't afford to lose the compute race.
9:14
Ejaaz: But in the event that our AI products aren't in as demand as we project,
9:19
Ejaaz: we can just resell that compute to all the other AI labs that need it.
9:23
Ejaaz: So he's preempted what Elon and Anthropic announced yesterday.
9:27
Ejaaz: So I think Meta's next and it might actually be bullish for the stock, to be honest.
9:30
Josh: And this gets back to our bubble episode from yesterday, which if you haven't
9:33
Josh: watched, I highly advise.
9:34
Josh: But basically, so long as the demand is there for tokens and people are willing
9:38
Josh: to pay for that, everything works.
9:40
Josh: So as long as we can continue to build valuable tools, people will figure it out.
9:43
Josh: The tokens will get allocated and things will be good. Now, what I found interesting,
9:47
Josh: most interesting about this Elon post is the fact that he said he spent last
9:51
Josh: week with the Anthropic team because he had a very busy week,
9:54
Josh: clearly, because he was doing other things as well,
9:56
Josh: most notably the trial that he's currently involved in.
9:59
Josh: So he has been going to trial with Sam Altman,
10:03
Josh: OpenAI against each other, debating whether or not it is
10:06
Josh: okay for open ai to exist as a for-profit entity
10:09
Josh: when it started off as a non-profit now thankfully as
10:13
Josh: we always do with these court cases we get some good banter we get some
10:15
Josh: good clips and we get some good intel in this case
10:18
Josh: we have texts from mira marati which for those
10:21
Josh: of you who are not familiar she is one of the co-founders of open ai who
10:24
Josh: has since left to start their own uh business called
10:27
Josh: thinking machines but we have these texts that happened in real time as sam
10:32
Josh: altman was getting fired from open ai if you'll remember this was what two years
10:35
Josh: ago now uh sam was actually fired as ceo of open ai and completely kicked off
10:39
Josh: the company shortly after they brought him back but these texts i read were
10:43
Josh: so funny because it gives you an inside look
10:46
Josh: Exactly what was happening as the news was going down. So Sam Altman texts Mira.
10:50
Josh: He says, can you indicate directionally good or bad?
10:52
Josh: Satya and others are anxious as in Satya Nadella, CEO of Microsoft,
10:56
Josh: who is the largest stakeholder of OpenAI.
10:58
Josh: Mira replies, directionally, very bad. Sam goes, okay, can you wrap up soon?
11:03
Josh: Lots of pressure from Microsoft for an update.
11:05
Josh: And then Mira just goes, Sam, this is very bad.
11:08
Josh: And this is a series of a lot. Sam's like, can I come in?
11:11
Josh: And then Mira says, they don't want you to. And then Sam says, what
11:14
Josh: do you want to make it better i'm still willing to just walk
11:17
Josh: away if that helps if they are ramped up for crazy lawsuits against me
11:20
Josh: then i'm not sure what it's just so funny to see into his mind as
11:23
Josh: this is going on and you kind of just see the chain of thought of a ceo it's
11:28
Josh: really funny he asked like can i come in and talk about a path forward with
11:31
Josh: them they're saying no they need more time and it's it's really funny and then
11:35
Josh: the one line that has turned into a meme is mira mentioning the new ceo who
11:38
Josh: they put in place and the new ceo was um she says
11:42
Josh: This new guy is a random Twitch guy. And it turns out that random Twitch guy
11:47
Josh: was Emmett Shear, who is the guy who turned Twitch into a billion dollar exit and very successful.
11:52
Josh: And he turned it into his ex-header profile background.
11:56
Josh: And it was just, it's a very funny story seeing the inside look at what the
11:59
Josh: communications looks like during a time as chaotic as this one.
12:03
Ejaaz: They're just all human. That's the best part about these lawsuits is we just,
12:08
Ejaaz: the public gets to gossip on all of their texts, which just get revealed.
12:12
Ejaaz: Now, the other personal text that was revealed, especially over this week,
12:18
Ejaaz: was Greg Brockman's diary.
12:19
Ejaaz: Now, we referenced this in a previous episode that we did literally last week
12:22
Ejaaz: covering the first couple of days of the trial. A lot has happened since.
12:26
Ejaaz: A few things, a few highlights that I want to point out. Number one,
12:30
Ejaaz: this lady that you're looking at on the screen right now, her name is Siobhan Zilas.
12:36
Ejaaz: And she is a partner to Elon.
12:39
Ejaaz: They've had like four kids together, But she's also a genius.
12:42
Ejaaz: She works at Neuralink, I believe.
12:43
Ejaaz: And she was brought on as a witness by the Musk team to basically testify that,
12:49
Ejaaz: you know, in the early days, because she was involved in the whole OpenAI founding
12:52
Ejaaz: and she did a bunch of work for Elon at that point.
12:55
Ejaaz: She wanted to point out that, like, you know, they being Sam and Greg Brockman
12:59
Ejaaz: had issues or intentions to make it a full profit eventually and to testify against Sam's nature.
13:06
Ejaaz: She was brought to the witness stand, as well as a host of other Musk team witness candidates.
13:11
Ejaaz: Now, the other revealing thing was Greg Brockman's diary was exposed,
13:16
Ejaaz: and he explicitly says in that diary or in his list of exchanges with Sam that
13:22
Ejaaz: we should kind of be strategic about when we turn OpenAI into a for-profit.
13:27
Ejaaz: I don't want to do it whilst Elon is involved or is a stakeholder.
13:30
Ejaaz: Otherwise, it would seem like we are ousting him. So literally the case that
13:34
Ejaaz: Elon Musk's team is making is being proven in the words that Greg is saying.
13:38
Ejaaz: Now, his response to that in court was...
13:41
Ejaaz: I was just referring to it being when it turns into a billion dollars.
13:46
Ejaaz: Not my $29 billion, sorry, not my $30 billion stake that I currently own in open air right now.
13:52
Ejaaz: And Musk's team is basically saying, you own $30 billion worth of open air.
13:56
Ejaaz: How is this not a full profit? Like, how are you not somewhat incentivized to
14:00
Ejaaz: cash this out and make more money or turn it into a full profit?
14:03
Ejaaz: And his response was, I was just talking about making a billion dollars,
14:06
Ejaaz: not the extra, you know, $29 billion to which Elon's team responded saying,
14:10
Ejaaz: why don't you donate the $29 billion then?
14:13
Ejaaz: Like, and we can settle this lawsuit up. And so there's a lot of like,
14:16
Ejaaz: back and forth going on between them.
14:18
Ejaaz: Now, it's been very Elon centric in the news for this court case in particular,
14:22
Ejaaz: because Elon's been the first to step up and produce his witnesses.
14:26
Ejaaz: But next week is when the script officially flips and Sam takes the witness
14:30
Ejaaz: stand as well as OpenAI's witnesses.
14:32
Ejaaz: And we might see a similar case where they end up shooting themselves in the
14:35
Ejaaz: foot similarly to how Elon has happened for the first week of the trial.
14:38
Josh: And what I'm really enjoying is how now they're available via audio.
14:41
Josh: So you can actually tune in and listen.
14:43
Josh: You can't watch the presentations, but you can listen to the testimonies.
14:46
Josh: People have been doing it and kind of sharing the hot takes and the information from it.
14:50
Josh: It's very invasive in a way, but in the sense that you just mentioned earlier,
14:54
Josh: where people are just human, like obviously Greg Brockman wants to make a billion
14:57
Josh: dollars and sure you want the nonprofit, but he's just a human.
15:00
Josh: Why would you not? And it's interesting to see these dynamics play out,
15:03
Josh: particularly with Siobhan.
15:04
Josh: Siobhan is such a sweetheart. She, for people who don't know, she actually
15:07
Josh: joined open ai in 2016 which i think was when
15:10
Josh: it first got started as a general advisor later moved
15:13
Josh: on to the board of directors then went over to neural
15:16
Josh: link she was at tesla for a small stint of time she is
15:18
Josh: the mother to a few of elon's children there's this whole lore and background
15:22
Josh: she actually left the open ai board of directors when elon began xai because
15:26
Josh: the conflict of interest so she has become this kind of key feature in this
15:30
Josh: early part and it's been interesting to see it play out we're going to continue
15:32
Josh: to follow along next week we'll hopefully have some updates It's from the OpenAI side.
15:37
Josh: And then the following week, I believe, we're getting close to a verdict.
15:40
Josh: So we're going to start to see
15:41
Josh: things move quickly over the next few weeks as it relates to the trial.
15:44
Ejaaz: Shifting gears slightly, Anthropic, aside from the partnership that they signed,
15:48
Ejaaz: has had a pretty promising week of developments, product development specifically,
15:53
Ejaaz: as is normal for Anthropic style.
15:56
Ejaaz: Finance, they released a big finance update where basically they are creating a
16:01
Ejaaz: a bunch of ready-to-run agent templates for the most time-consuming work in financial services.
16:06
Ejaaz: Now, if any of you listeners have worked or are working in the financial industry,
16:11
Ejaaz: you'll know that there's a bunch of admin work.
16:14
Ejaaz: There's a bunch of memos you need to review, a bunch of financial modeling that
16:18
Ejaaz: you need to do, a bunch of paperwork and administration that just takes up a
16:22
Ejaaz: bunch of time and, in an ideal sense, could be automated, but still requires
16:26
Ejaaz: a lot of human input and judgment.
16:28
Ejaaz: Well, Claude, specifically Claude Co-Work and Claude Code has now become smart
16:34
Ejaaz: enough to be able to assess and do this work for you.
16:37
Ejaaz: And they've released a bunch of templates, specifically AI agent workflows that
16:42
Ejaaz: can do this for you. Now, it sounds kind of unsexy, right?
16:45
Ejaaz: Claude Code and Claude specifically has been able to run Microsoft Excel,
16:49
Ejaaz: PowerPoint, and Word pretty well now.
16:51
Ejaaz: In fact, they've integrated directly into Microsoft Suite for all of those software
16:54
Ejaaz: programs, but there hasn't been a combined package.
16:57
Ejaaz: Usually when you get access to these things, you can be like,
16:59
Ejaaz: okay, this is cool, but I don't know what to prompt it. What do I say to this?
17:02
Ejaaz: How do I connect it to my database and my company?
17:04
Ejaaz: How do I make it do the thing that I want it to do? These templates basically solve that.
17:08
Ejaaz: And it is once again, Anthropic step towards taking over many different sectors
17:13
Ejaaz: that are adjacent to what they do. First, they started off with code.
17:16
Ejaaz: Now they're focusing on enterprise, specifically financial services.
17:19
Ejaaz: Tomorrow, it could be law.
17:20
Ejaaz: It's just a continuing trend of Anthropic doing this particular pattern taking over sectors.
17:25
Josh: If you're in college right now and you're in finance and your goal is to make
17:28
Josh: it to Wall Street, what are the kind of jobs and the skills that you're optimizing
17:32
Josh: for, for that entry-level job, right?
17:33
Josh: You're building pitches, you're preparing for meetings, you're reviewing earnings,
17:37
Josh: you're building out models, you're doing market research, you're kind of doing
17:40
Josh: all of these basic tasks.
17:42
Josh: Every single one of these has been turned into one of the financial templates.
17:46
Josh: And I'm actually reading from the list of things that Claude has automated because
17:50
Josh: it sounds like a job description. And I think this is one of the really powerful
17:54
Josh: things that when people are gonna see, they're going to say,
17:56
Josh: oh my God, it's taking all the entry-level jobs.
17:58
Josh: But the reality is now that child who is in school, who is in college trying
18:02
Josh: to be working Wall Street, be in finance,
18:05
Josh: has these tools at his disposal to go and accelerate progress
18:08
Josh: to do the next level of things what are the things that come after you
18:11
Josh: do these market research reviews or the valuation reviews or
18:14
Josh: whatever it is that's where i think people should spend a lot of their time and instead
18:17
Josh: of viewing this as this detriment to the entry-level class
18:21
Josh: of wall street it's like think about how more powerful you can be you
18:24
Josh: can just use all of these you have your own employees now so so think bigger
18:27
Josh: build better and i think this anthropic update empowers people to do that and
18:31
Josh: it's it's cool i i want to test it out i want to apply this to our episode that
18:35
Josh: we talked about yesterday of the ai stack and have it kind of build out uh models
18:40
Josh: and valuations on what i should get an investment
18:43
Ejaaz: Model we should see yeah for this.
18:45
Josh: Dude it's like we we don't need to be on wall street or pay hundreds of thousands
18:48
Josh: of dollars to hire this entry-level job we just have the templates now on cloth
18:52
Josh: and you just ask it questions you use their plugins and it will generate like
18:56
Josh: pretty proficient research so i think it's it's very empowering i wonder
18:58
Ejaaz: If we could hook that up to like a temporary bank account that we can spin up
19:03
Ejaaz: that can then just like invest in a bunch of stocks for us. That might be an episode in itself.
19:08
Josh: I mean, again, your imagination is the only fixed variable here.
19:12
Josh: It's like the only limitation. It could do basically anything you want.
19:14
Ejaaz: I like that. Well, in order to pull all of this off, right, let's assume financial
19:19
Ejaaz: services goes crazy and AI is applied to pretty much everything.
19:23
Ejaaz: There's a trend. tokens are being consumed, Josh. We need more compute.
19:27
Ejaaz: And the one company that has all of the demand but not enough compute is,
19:31
Ejaaz: like we mentioned earlier, Anthropic.
19:33
Ejaaz: But it's had an inverse side effect, which is
19:36
Ejaaz: Google is now the most valuable company in the world, more valuable than NVIDIA, right?
19:42
Ejaaz: So we have a new king of the throne, I guess.
19:47
Ejaaz: Anthropic signed a $200 billion deal with Google to get access to their compute
19:52
Ejaaz: via Google Cloud and through their TPUs.
19:55
Ejaaz: Now, it's important to point out that this has spread over five years,
19:58
Ejaaz: but it is a locked-in deal.
20:00
Ejaaz: In fact, it makes up over 50 to actually 60% of Google's revenue backlog for
20:06
Ejaaz: the next couple of years.
20:07
Ejaaz: Now, what's important to point out here is Anthropic has already been a big
20:11
Ejaaz: fan and customer of Google and it works both ways.
20:14
Ejaaz: Number one, Anthropic uses a bunch of Google's TPUs, which is their own version
20:18
Ejaaz: of GPUs that competes directly with NVIDIA to train and serve Claude and it's
20:22
Ejaaz: actually helped Claude improve massively.
20:25
Ejaaz: Mythos was trained on Google's TPUs.
20:27
Ejaaz: Now, the other side is Google is one of the biggest stakeholders and investors
20:31
Ejaaz: in Anthropic themselves.
20:33
Ejaaz: In fact, I think they own roughly right now after this deal and after a few
20:36
Ejaaz: other deals that happened over the past month, around 15 to 17% of Anthropic.
20:41
Ejaaz: Now it's Google and Amazon combined staked, I think it's like 43% in total of Anthropic.
20:47
Ejaaz: So it's just insane. Anthropic is selling a lot of their stake to these competitors
20:51
Ejaaz: or infrastructure providers, but there is now a symbiotic relationship where
20:55
Ejaaz: Google is more inclined to serve up compute to Anthropic.
20:59
Ejaaz: The one thing I couldn't get my head around, Josh, I guess is similar to the
21:03
Ejaaz: SpaceX AI and Anthropic partnership is.
21:07
Ejaaz: If you're working at Google on the Gemini team, if you're Demis Sibis,
21:11
Ejaaz: right, and you know you need compute to make Gemini a better model,
21:14
Ejaaz: you must be thinking, could you please just give us that compute so we can train
21:18
Ejaaz: the number one frontier model instead of Anthropic and Claude?
21:20
Ejaaz: It seems like Google is just kind of like giving them over the reins at this point.
21:24
Josh: Well, what's the problem? It's like, is Gemini having an issue?
21:27
Josh: Are they hitting a wall where they haven't quite figured out where to spend that compute on?
21:31
Josh: Because it's clear Gemini doesn't have nearly as much compute constraints
21:35
Josh: in terms of serving up inference to users that anthropic does
21:38
Josh: so i wonder if this is a hedge against
21:41
Josh: deep mind of the google business like in
21:44
Josh: terms of if you are the ceo of google and you have all of your chips on
21:47
Josh: deep mind are you going to continue to bet 100 of
21:50
Josh: your tpus that deep mind is going to be the one
21:52
Josh: to build this incredible ai or are you going to start hedging against
21:56
Josh: that by offering your compute to others now there's a few reasons why they
21:58
Josh: would offer their compute to others as that hedge but also just because they're having
22:01
Josh: the xai problem where they have good models but
22:04
Josh: they haven't quite matched the users with that compute and
22:07
Josh: they they don't really need all those tpus so we
22:10
Josh: could speculate for many reasons but i think the idea is that um
22:13
Josh: capitalism rocks man all the arbitrage is going down across all these companies
22:17
Josh: if you have any dark gpus they get snapped up immediately and people are willing
22:21
Josh: to pay a very large market price in order to do so so the market is efficient
22:24
Josh: tpus are being bought and sold all over the place same with gpus and we're just
22:29
Josh: going to continue generating these tokens at whatever the cost takes
22:31
Ejaaz: Oh my god you just reminded me of something. Did you see that crazy startup
22:36
Ejaaz: announcement this week, Josh, where they're putting NVIDIA GPUs and attaching it to your home,
22:43
Ejaaz: like to the outside wall, so that your home becomes its own siloed data center,
22:49
Ejaaz: which then gets interconnected with a bunch of other homes in your neighborhood,
22:52
Ejaaz: effectively, like turning a home neighborhood into a data center. Did you see this?
22:58
Josh: Uh, no, but that sounds a little freaky.
23:00
Ejaaz: It was the craziest suggestion ever.
23:03
Ejaaz: And like NVIDIA's investing into this startup, just to point that out.
23:07
Ejaaz: But someone pointed out, which was like, if I see this outside of your home,
23:11
Ejaaz: I'm probably going to rob you, right?
23:13
Ejaaz: It's the biggest advertising to just to say like, hey, I have all this money, I can afford these GPUs.
23:17
Ejaaz: I come anyway, like to talk about your capitalist comment, I was like,
23:21
Ejaaz: we might be going too far at this point.
23:22
Josh: Oh, well, I'll do you one better quickly, which is this is a plan loosely for
23:26
Josh: the Tesla network of autonomous vehicles.
23:27
Josh: As they roll out AI5, AI6 chips in these cars, they're going to essentially
23:31
Josh: have supercomputers that are connected to the internet.
23:33
Josh: And what better use of idle driving
23:35
Josh: time than to turn them into a mega cluster. So the idea is out there.
23:39
Josh: I'm sure someone is going to capitalize it. And I'm very excited for whatever
23:41
Josh: the first person who does that and what it looks like.
23:44
Josh: Because man, that'd be pretty cool. I mean, you run some GPUs in your house,
23:47
Josh: you get paid for it. You maybe get free electricity, whatever it is. I don't know.
23:50
Josh: And then another great business model, which seems like it's not going to work,
23:53
Josh: is Eleven Labs, who somehow manages to continue to surprise and delight everyone in the market.
23:58
Josh: 11 Labs, for those who aren't familiar, you could think of them as the audio AI company.
24:02
Josh: They are the flagship AI company when it comes to anything that enters your
24:06
Josh: ears, whether it be voices, whether it be music, anything that you hear,
24:10
Josh: 11 Labs has specialized in it. And now they're not the only ones.
24:13
Josh: Google has an audio model that makes music really well. There's a few other
24:16
Josh: companies that are trying, but for some reason, 11 Labs is doing it the best.
24:20
Josh: And it's thanks to their CEO, Matty, who had an announcement of $500 million
24:25
Josh: of ARR this year. This is a huge announcement from the team.
24:28
Ejaaz: Yeah, super impressive. One thing that 11 Labs has done well is they've,
24:32
Ejaaz: manage to maintain and build a really cool, attractive image on the outside.
24:37
Ejaaz: So many celebrities are partnered or invested in 11 Labs, the main one being Matthew McConaughey.
24:42
Ejaaz: We've got Jamie Foxx joining us around, Eva Longoria. So that helps with your
24:46
Ejaaz: distribution mode of making 11 Labs cool and appealing to the people that they're
24:51
Ejaaz: eventually going to be replicating or replacing, right?
24:53
Ejaaz: Like there's a whole fear in Hollywood that it's like, you know,
24:56
Ejaaz: AI is going to replace us, it's not authentic.
24:58
Ejaaz: But if you can kind of license your IP, your voice, your character in a way
25:03
Ejaaz: that you can control, such as with 11 labs, you can end up, you know,
25:07
Ejaaz: making a bunch of money and 500 million AR kind of like plays into that.
25:10
Ejaaz: So a massively successful model.
25:12
Ejaaz: But there is another story that I saw today.
25:15
Ejaaz: Well, rather, not a story, Josh, but a clip. Have you ever seen a robot, right?
25:21
Ejaaz: Crack an egg before with such precision? I'll do you one better.
25:24
Ejaaz: Have you ever seen a robot carefully take a pipette and
25:27
Ejaaz: pipette the right amount of stuff into a petri dish or have you ever seen it
25:31
Ejaaz: solve a rubik's cube or have you ever seen it what is it doing here is this
25:35
Ejaaz: like blending and making a shake anyway the point i'm saying is this new startup
25:39
Ejaaz: announcement from genesis ai has created a new generalized robotics model that
25:43
Ejaaz: can be applied to any kind of robotic machinery.
25:46
Ejaaz: Instantly give it a very precise amount of movement and precision in the way
25:52
Ejaaz: that it interacts with different objects to a point that we have never seen before.
25:57
Ejaaz: I think robotics is finally reaching escape velocity. We've seen a bunch of
26:00
Ejaaz: announcements from the likes of Figure and Unitree, which, you know,
26:04
Ejaaz: the robot's doing cool things, but it's mainly at a manufacturing process level,
26:07
Ejaaz: like they work in factories.
26:08
Ejaaz: This is the first time where I'm like, oh, the robot looks pretty human and
26:11
Ejaaz: I might have it in my home. It's just pretty cool.
26:13
Josh: Yeah okay so we're going to speed around the rest of these because a few
26:16
Josh: interesting news topics that are left one is a new round that
26:19
Josh: is led by peter teal for a company named panthalassa
26:23
Josh: i think i'm saying that right um 140 million dollar
26:26
Josh: round led by peter teal and their entire basis of this
26:29
Josh: company is to build planetary scale energy in the middle of the ocean so basically
26:33
Josh: they have these you could think of a compute cluster a data center that we have
26:37
Josh: kind of like in texas or that we have in tennessee what they're doing is they're
26:41
Josh: taking that data center they're making a float and then they're driving it off
26:44
Josh: into the middle of the ocean to function independently.
26:47
Josh: So you can unlock the ocean as a planetary scale resource and
26:51
Josh: This is pretty mind-blowing when we think about how AI is going to scale.
26:55
Josh: I mean, we are very familiar now with the AI data centers in space conversation,
26:58
Josh: but the AI in the ocean seems pretty noteworthy, pretty interesting.
27:02
Ejaaz: And finally, we have some, I guess, AI-adjacent news, but not really.
27:07
Ejaaz: We were just blown away by this, and we had to call it out.
27:10
Ejaaz: Guys, the next coronavirus apparently is around the corner, and it's appropriately named Hantavirus.
27:16
Ejaaz: There's a luxury cruise trip right now where it has an outbreak,
27:20
Ejaaz: very reminiscent of coronavirus. I'm getting PTSD.
27:23
Ejaaz: And nearly 150 people are still on board with no symptoms, but they are some
27:27
Ejaaz: seriously ill passengers. Josh, what's going on here?
27:30
Josh: Dude, I woke up this morning. This was my entire feed online.
27:32
Josh: I'm like, what is going on? Is the world ending?
27:34
Josh: And when we recorded our episode yesterday on the threats to the AI bubble,
27:38
Josh: this was not baked into the equation. So we're just sharing this just to bake
27:41
Josh: it in. This is highly speculative.
27:43
Josh: According to Polymarket, there's only a 9% chance this turns into a pandemic.
27:46
Josh: But it is like it's funny and not funny
27:49
Josh: but like it is scary to see the kind of rerun of
27:51
Josh: this traumatic event that happened but in a different flavor in this different
27:54
Josh: context and i just wanted to just highlight as another thing to you know keep
27:58
Josh: your eyes on everything's fine for now but people in at least three u.s states
28:01
Josh: are reportedly being monitored for possible exposure and like a people have
28:05
Josh: died and things are happening so just you know want to make sure everyone's aware everyone's okay
28:10
Josh: things are going to be fine. According to Polymarket, the odds are low.
28:13
Josh: They're still in our favor.
28:15
Josh: The up-only pump is going to continue, but this should be hedged into your models at least.
28:19
Josh: Add this to your LLMs. Tell them, hey, create this as a parameter when you're
28:22
Josh: evaluating risk going forward.
28:23
Ejaaz: Yes, yes. Well, there you have it, folks. You are officially caught up by the
28:28
Ejaaz: end of the week of everything that's been happening in AI.
28:31
Ejaaz: Everything from the drama in the courtroom to the latest partnerships between
28:35
Ejaaz: the rivals that are to kill the other rival, all the way to breaking virus news.
28:40
Ejaaz: You can get everything here at Limitless.
28:42
Ejaaz: We released a bunch of episodes this week, which jumped into the depths of why
28:47
Ejaaz: all the semiconductor stocks are pumping massively.
28:50
Ejaaz: We covered OpenAI's new phone that's releasing as early as 2027.
28:54
Ejaaz: And we compared the motherlode of all AI models, GPT 5.5 versus Claude,
28:58
Ejaaz: Opus 4.7, which one's the best. We did a breakdown. We did a bunch of demos.
29:02
Ejaaz: We may or may not have recreated Mario, definitely go check out all those episodes.
29:06
Ejaaz: If you are listening to us on whatever platform you're on, YouTube,
29:09
Ejaaz: Spotify, or Apple, please leave us a review, give us a rating.
29:12
Ejaaz: It helps us out massively.
29:14
Ejaaz: Josh, any final parting thoughts?
29:16
Josh: Thank you so much for watching. If you made it this far, you're a real one.
29:19
Josh: I very much appreciate all the support of getting caught up. Go enjoy your weekend.
29:22
Josh: Have a great time touching grass because you're all caught up.
29:24
Josh: Thank you so much for watching and we will see you guys next week.
29:26
Ejaaz: See you guys.