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THIS WEEK IN AI: Grok Bot (and 4.6), AI Watermarks, Deepseek Strategy, Selling the Lakers · In the Loop AI

0:00
Josh: There's a new Frontier model in town, and it comes from a not-so-suspecting company in SpaceX AI.
0:05
Josh: They just released Grok 4.6. This is now possibly the best model that there
0:10
Josh: is out there, depending on what you care about. As we look at this benchmark
0:13
Josh: card, it shows that Grok 4.6 High is scoring higher than even Fable 5 on some tasks.
0:19
Josh: And this is shocking because, I mean, just last week, if you would have asked
0:21
Josh: us where Grok stood in the AI race, we would say, well, they're like a distant
0:25
Josh: third competing probably with Meta and Gemini.
0:28
Josh: The reality is that with this new model, they are now right at the front.
0:31
Josh: And not only that, but the new model, Grok 4.7, is expected to come out in the
0:35
Josh: next three to four weeks and be even better than this one.
0:39
Josh: This comes on the back of Grok releasing a new product called GrokBot,
0:42
Josh: which we'll get into, as well as a lot of other interesting news from this week.
0:46
Josh: This is the roundup, the weekly roundup every Friday that we publish,
0:49
Josh: where we cover all things about news and AI, things like covering earnings from
0:52
Josh: NeoClouds all the way over to the new acquisition of your favorite or least
0:56
Josh: favorite sports team. But we have to start here with Grok 4.6.
0:59
Josh: They're back. They're right here at the frontier. This is an amazing model.
1:02
Ejaaz: So back. Yeah, no. So for the longest time, SpaceX had kind of lost the frontier race.
1:08
Ejaaz: Elon's engineering team had made a few wrong moves and they kind of fell behind
1:12
Ejaaz: the likes of Anthropic OpenAI and Google, which is crazy to say because Google's
1:16
Ejaaz: fallen behind a lot since then.
1:19
Ejaaz: They're officially back. Grok 4.6 comes, I think, three weeks after Grok 4.5
1:25
Ejaaz: got released, and it is a bigger and better model.
1:28
Ejaaz: Now, specifically, if we look at a few different benchmark comparisons,
1:33
Ejaaz: there's this thing called the AA Intelligence Index. It's a really good way
1:37
Ejaaz: of testing just the general level of intelligence across different models.
1:41
Ejaaz: And on your screen here, you'll see it compared directly to GPT 5.6 Sol Max.
1:47
Ejaaz: So that's like the highest, hardest version from OpenAI, as well as Fable 5 Max.
1:52
Ejaaz: And you'll see it is the equivalent to GBD 5.6 Sol and just a point of Fable
1:58
Ejaaz: 5. So you could argue that its general intelligence level is right up there.
2:02
Ejaaz: But the best part is it comes at a fraction of the cost. So it's 5x cheaper
2:07
Ejaaz: output than Sol, 8.5x cheaper output than Fable.
2:12
Ejaaz: Overall, you're kind of ranging between 3 to 5x cheaper than these two models,
2:15
Ejaaz: which is a big thing if you're like a company that's using these frontier models
2:19
Ejaaz: and want to kind of figure out
2:21
Ejaaz: how to cut your cost down from tens to hundreds of millions of dollars.
2:24
Ejaaz: Now, the main way that they're able to achieve this frontier intelligence,
2:28
Ejaaz: well, there's a few ways, but the main one is they spin up a bunch of agents.
2:32
Ejaaz: So Grok 4.6 uses multiple agents to kind of like solve your query.
2:35
Ejaaz: Now, this isn't something that's relatively new.
2:38
Ejaaz: This is something that Meta is doing in their smaller models.
2:41
Ejaaz: It's something that a lot of Chinese open source models are also doing. So that's one part.
2:45
Ejaaz: Two, and this is like, I have to emphasize, this is SpaceX's like biggest moat.
2:50
Ejaaz: They have a lot of data, a lot of useful data that makes these models insanely
2:55
Ejaaz: smart. They can just bung it into it when they're training it.
2:57
Ejaaz: And also a hell of a lot of compute, which Elon has been very strategically
3:03
Ejaaz: amassing over the last year. He has like the most compute out of anyone in the game.
3:07
Ejaaz: And we're starting to see this, like you mentioned, like 4.7 is coming out in
3:10
Ejaaz: a few weeks time, and it's going to be even bigger and better than this.
3:13
Ejaaz: I think it's going to be like a three to five trillion parameter model.
3:16
Ejaaz: So you can only imagine that, like, you know, with the cost benefits and with
3:20
Ejaaz: the intelligence that's increasing, like SpaceX is in a new world right now. It's very impressive.
3:26
Josh: Yeah, this is where things are going to start to get really interesting because it was.
3:29
Josh: Mostly a matter of if not when and now it feels like it's a matter of when when
3:34
Josh: they actually get to their frontier and eclipse it
3:37
Josh: for a few reasons the first of which is that i mean as we mention all the time
3:41
Josh: the spacex team is the best team in the world at building physical things at
3:45
Josh: moving atoms around at compiling data centers quickly
3:49
Josh: it is nothing compared to building a rocket ship to just put a couple servers
3:52
Josh: on a rack on the ground and plug them into electricity so they have been doing
3:56
Josh: this quickly and efficiently in the episode yesterday we talked about micro
3:59
Josh: hard which is the small version of macro hard
4:02
Josh: yet it is the same exact footprint in terms of gpus in a cluster so basically
4:07
Josh: they've able to they've been able to figure out how to get 200 000 coherent
4:10
Josh: gpus into a package the size that's
4:13
Josh: about one third of macro hard so it's this amazing iterative process that they
4:16
Josh: have on hardware and then they have this amazing iterative process on software
4:19
Josh: where they're planning to publish these models once a month
4:22
Josh: that are incrementally stronger and stronger you said now you just i think we're
4:25
Josh: at three to five i'm pretty sure there's plans for like eight to 10 trillion parameters
4:29
Josh: in terms of parameter count.
4:31
Ejaaz: They actually have that training run going right now for a 10 trillion parameter model.
4:35
Josh: It's in the oven right now. So we are going to get that after it's done with
4:38
Josh: the post-training alignment phase.
4:40
Josh: But the idea is that it's all coming. It's all happening.
4:43
Josh: The hard part is mostly done. They've gotten from zero to one.
4:47
Josh: They've reached it back to the frontier.
4:48
Josh: Now it's just a matter of seeing how far they could push it, how quickly.
4:52
Josh: I'm going to guess like pretty quick. I don't know. when i think about other
4:55
Josh: advantages like their data set like you mentioned having access to all the proprietary
4:59
Josh: space rocket science data that seems valuable in terms of science and intelligence
5:04
Josh: basically they have this open corpus of data that no model has ever been trained
5:07
Josh: on that's proprietary and for
5:09
Josh: those that aren't familiar like starship the giant rocket that's going to mars
5:13
Josh: that was built 100 by humans there was no ai in the process so all of the math
5:17
Josh: all of the science all of the hardware schematics
5:20
Josh: that's incredibly valuable and that's what grok 4.6 is being trained So this
5:23
Josh: model is an amazing model and I'm very excited to see where Grot goes from here.
5:28
Ejaaz: Not to mention that Elon Musk has specified that by the end of the year,
5:33
Ejaaz: Grok 5 will be released. I believe that will be the 10 trillion parameter model.
5:37
Ejaaz: So we're talking about mythos grade level model.
5:40
Ejaaz: But it'll be the smartest engineering AI model in the world.
5:44
Ejaaz: And the reason why he says that is it'll be trained entirely on SpaceX's engineering data.
5:49
Ejaaz: And there is no better physical engineering team in the world that isn't at
5:54
Ejaaz: SpaceX. So not only is he building better generalized models,
5:59
Ejaaz: he is building hyper-specific ones that are going to hopefully push the frontiers
6:02
Ejaaz: of science, material sciences forward.
6:04
Ejaaz: Now, for those haters out there that have, you know, validly pointed out that
6:08
Ejaaz: Elon makes a lot of big promises but doesn't really fill his shoes,
6:12
Ejaaz: this is one instance where he definitely is doing this.
6:14
Ejaaz: And I don't think it was, it was until a few days ago, priced into the market.
6:18
Ejaaz: But like right now, when you look at the stock, it is up 26% in the last five days.
6:24
Ejaaz: I remember when we made our episode last week when the stock was down, I don't know, like 35%.
6:29
Ejaaz: And we literally said that like, you know, like there's a lot of unlocks coming out.
6:32
Ejaaz: We understand that there's a lot of supply constraints and issues here.
6:35
Ejaaz: But if you are somewhat a mid to long-term holder, SpaceX so obviously has a
6:41
Ejaaz: track record for execution, being able to pull feats like this off and people
6:45
Ejaaz: just weren't pricing into the air completely.
6:47
Ejaaz: Remember, when you buy SpaceX stock, You are just buying like a rocket company, right?
6:51
Ejaaz: You're buying a satellite connectivity company.
6:55
Ejaaz: You are buying the cheapest way to get into space and launch your own compute
6:59
Ejaaz: if you wanted to harvest that. You're buying a rocket company as well.
7:02
Ejaaz: And you're also buying an AI company. Oh, also the social media company of the
7:06
Ejaaz: world that's going to distribute a bunch of these things. Include it.
7:09
Ejaaz: This new product that has just come out, which we have been playing around with
7:13
Ejaaz: called GrokBot. It's my understanding that this is basically their version of
7:18
Ejaaz: OpenClaw, except it actually works. Do I have that right, Josh?
7:22
Josh: It's a remarkable product. I am obsessed with GrokBot. It feels like the SpaceX
7:26
Josh: AI team is jumping to endgame of what a agentic product could actually look like.
7:31
Josh: Like you mentioned, it's very similar in sense to OpenClaw, but it feels like
7:35
Josh: it's a much more improved and refined version of OpenClaw in the sense that it's fully agentic.
7:39
Josh: And maybe I could explain the way it works. So basically you join this application
7:42
Josh: and it just gives you a text box similar in style to iMessage.
7:45
Josh: You could picture like where you send your text messages, except you could spin up an agent.
7:49
Josh: You can give them a task. You can give them a personality. You give them a name
7:52
Josh: and then they will be that person for you. So for example, if you like working
7:56
Josh: out, you go to the gym, you create a little chat bot and you say,
7:59
Josh: Hey, you're my gym workout companion buddy. You are a world-class expert at fitness.
8:03
Josh: You are going to give me an entire workout program based on these 10 things
8:07
Josh: that I know about my body and I'd like to work with you every single day to
8:11
Josh: Actually get more fit and more healthy and remind me every day to go and work
8:15
Josh: out. And if I don't check in with you, then remind me again and again until
8:18
Josh: I actually get my ass to the gym and work out.
8:20
Josh: And this is a very basic version of what it's capable of. But I think it's really
8:24
Josh: interesting in a way that OpenClaw wasn't because OpenClaw required a bit of
8:28
Josh: technical expertise. You need to host your own server.
8:30
Josh: You need to download the software on the server. You need to run maintenance.
8:33
Josh: You need to manage the memory system. You need to manage all the nuance and complexities.
8:37
Josh: With this program all you have to do is just log in and you just start talking
8:41
Josh: to it it hosts it on their servers the application is beautiful they've done
8:45
Josh: this really cool thing that i love which is the design of the actual
8:48
Josh: agents they have this very cute animation it kind of disarms the feeling that
8:52
Josh: you're working with this like
8:54
Josh: kind of scary spooky ai and just turns it into a really fun experience
8:57
Josh: and it's available on mobile it's available on desktop and i like cannot encourage
9:02
Josh: trying it out enough and you don't even realize that you're talking to a system
9:05
Josh: similar to open claw because it's so easy to set up it's all handed on the background
9:09
Josh: i think amazing product from grok
9:11
Ejaaz: If you're listening to this and you're wondering okay is this a new ai model
9:15
Ejaaz: should i be using this i tried that open call thing out and it was terrible
9:18
Ejaaz: it stole all my money from my bank account
9:21
Ejaaz: Let me try and explain like who this product might be pitched at,
9:24
Ejaaz: right? So it is not the ideal product to use if you are a hardcore software
9:30
Ejaaz: engineer, if you want to code every day.
9:32
Ejaaz: This is pitched at sort of knowledge workers who spend a lot of time doing software
9:37
Ejaaz: or desktop-based tasks, but want to automate some of the more.
9:42
Ejaaz: Menial things like email admin or calendar scheduling or customer support and stuff like that.
9:49
Ejaaz: These types of things take up a lot of time. And if you kind of like sum up
9:53
Ejaaz: the economic value of all of it across like every single sector, it is quite a large sum.
9:57
Ejaaz: And I think to understand why GrokBots isn't just a toy is to understand what
10:02
Ejaaz: Elon Musk said, I think about six months ago, which is,
10:05
Ejaaz: it is very much XAI and now SpaceX AI's mission
10:08
Ejaaz: to replace a lot of human software-based tasks, not so that it replaces people's
10:15
Ejaaz: jobs, but to give them the freedom to not waste their time on stuff that doesn't need to be wasted.
10:20
Ejaaz: They can kind of like automate away all the boring manual labor that you get tired of doing at work.
10:24
Ejaaz: And it frees you up to do more creative, impactful things in your actual job.
10:29
Ejaaz: He references it as a human emulator. So it's basically, you can interact with
10:34
Ejaaz: these agents and you don't even know that it's another human.
10:36
Ejaaz: That's like the real test, the benchmark on the other end. And this is the first
10:39
Ejaaz: step towards that. Now, is this that?
10:41
Ejaaz: No. But is this a really refined and easy to use version like you mentioned, Josh?
10:46
Ejaaz: Yes. You sign up. They spin up a virtual machine in the cloud and your agents
10:51
Ejaaz: just kind of like run riot and they can like simultaneously take over your computer,
10:54
Ejaaz: but it's done in a very safe mannered way so that they can't do anything crazy.
10:59
Ejaaz: And the thing that pops to the top of my head when I read through and watch
11:04
Ejaaz: all the demos of this problem and read the feedback is...
11:07
Ejaaz: This is a direct attack against not OpenAI or Anthropik, but Apple,
11:12
Ejaaz: who is releasing Siri AI in a few months' time now and is meant to function
11:17
Ejaaz: and perform completely on your phone.
11:20
Ejaaz: It's meant to interact with all your apps and all that kinds of stuff.
11:22
Ejaaz: Now, granted, GrokBot can't do that right now, but it is accessible and available on your phone.
11:26
Ejaaz: You can text it whenever you want. And I can only imagine that eventually this
11:31
Ejaaz: will get access to some types of phones, maybe Android first because the Apple ecosystem is so closed.
11:35
Ejaaz: But I see this as a direct competitor to that. And I'm just so happy to see
11:39
Ejaaz: Elon make a functional product that isn't just a model because that's why he's best at. Yeah.
11:42
Josh: And at the very least, you at least you get the app on your phone and the new
11:45
Josh: Siri is actually launching in about a month from today. So it's coming very soon.
11:49
Josh: But this feels like the magic that I felt with Open Claw, except a more refined
11:54
Josh: and far more productive version.
11:55
Josh: Currently, it's baked in with GPT 4.6, which we just said is a remarkable model
12:00
Josh: for incredibly low price.
12:01
Josh: As these models continue to improve having those baked into this agentic experience
12:07
Josh: feels pretty incredible
12:09
Josh: it's like you open up your phone out of your pocket and you have this series of brilliant
12:13
Josh: supercomputer helpers that can do anything in the world for you they can work
12:16
Josh: together they can gain access to your context it feels like a peek into the
12:19
Josh: future this feels like open claw 2.0 so it's a really exciting product i think
12:23
Josh: we're going to follow this one
12:24
Josh: closely and see what the other company's reactions to a product like this
12:27
Josh: are going to be but that is the grok update congratulations on your new Frontier slot.
12:31
Josh: Looking forward to the next one. For the next topic, we have another,
12:35
Josh: I mean, kind of Frontier model, except this one on the open source side.
12:38
Josh: DeepSeek is back with another release as well. DeepSeek v4.0.
12:43
Josh: Pro. And the price floor has moved once again. This is a pretty big deal.
12:48
Ejaaz: Yeah. So DeepSeek, if we kind of harken back to, what is it,
12:52
Ejaaz: like a year and a half now, which is not that long ago at all,
12:56
Ejaaz: caused a massive disruption in the AI field because back then, compute was king.
13:02
Ejaaz: Sam Altman was on top. And if you could buy as much compute as you can,
13:05
Ejaaz: you could train the smartest models.
13:06
Ejaaz: DeepSeek came along, which is, I believe, birthed out of a hedge fund, Liang Wangfeng.
13:11
Ejaaz: Yeah, he's a hedge fund manager in China and basically said,
13:14
Ejaaz: hey, yeah, I ran a bunch of quants and asked them to make a model that would
13:18
Ejaaz: help it with financial trading and ended up creating a groundbreaking model
13:21
Ejaaz: that didn't require as much compute. And it kind of like tore the market apart.
13:24
Ejaaz: Well, since then, they've released, I think, one more model.
13:27
Ejaaz: And now they're back with like their big boy model. Now, this isn't an official
13:31
Ejaaz: release. This has been rumored to be released soon, but we had an official leak
13:35
Ejaaz: about the benchmarks for this model, DeepSeek V4 Pro.
13:39
Ejaaz: Now, yes, it is re-rated the cost sheet as always. It is always the cheapest
13:43
Ejaaz: cost per unit intelligence for an AI lab out there.
13:47
Ejaaz: But what struck me was some of these benchmarks that were leaked.
13:50
Ejaaz: Now, if you look at Terminal Bench 2.1, which is a popular coding paradigm or
13:55
Ejaaz: benchmark, it comes in at 87.9, right?
13:58
Ejaaz: Now, when you compare that directly to, say, Fable 5, it is,
14:02
Ejaaz: what is that, 0.1 of Fable 5's level of coding capability, measured at this benchmark.
14:06
Ejaaz: If you look at Opus 4.8, Kimi K3, and GLM Fiber 2 absolutely crushes it.
14:11
Ejaaz: But the other worrying part is this one over here.
14:15
Ejaaz: It's the CyberGym benchmark.
14:17
Ejaaz: It is not only rivaled, but it's slightly better than Fable 5 at cyber capabilities.
14:23
Ejaaz: Now, the reason why this worries me is Dario had a really good post.
14:27
Ejaaz: I think about a month ago, where he said, in about six months time,
14:31
Ejaaz: we are going to have an open source version of Mythos' level of cyber capability.
14:36
Ejaaz: And that's going to be an issue because it's going to have no safeguards around it. So.
14:41
Ejaaz: The reason why Mythos hasn't been able to wreak havoc on the world is because
14:44
Ejaaz: they have safeguards around it.
14:46
Ejaaz: DeepSeek, if they release this in an open source fashion, is going to have,
14:49
Ejaaz: you know, a bunch of amazing effects where you can run it at home,
14:52
Ejaaz: it's cheaper, private, blah, blah, blah.
14:54
Ejaaz: But also, if it was put in the hands of a malicious actor, it could end up causing
14:58
Ejaaz: havoc. So I just wanted to point that out. Like, it isn't an official release
15:01
Ejaaz: just yet, but it's something that I'm keeping my eye on.
15:04
Josh: It's coming. Well, we did have an official release, and it came in the form
15:06
Josh: of an earnings release. In fact, we had two of them.
15:09
Josh: Uh one from core weave and the other from nebius for those not familiar these
15:13
Josh: are neocloud providers neocloud providers they're basically
15:17
Josh: they they work with the gpu providers to collect gpus they build their own infrastructure
15:22
Josh: and they rent out that infrastructure to people who want to train their ai models
15:25
Josh: or use them for inference or whatever it may be so you could think of it as
15:28
Josh: like ai training or ai inference as a service they offer to people
15:32
Josh: they had a pretty unbelievable quarter both of these companies when we look
15:36
Josh: at nebius how much was it up on the day i'm not seeing it on the chart but i
15:39
Josh: know it was up like a huge amount i think it was up
15:41
Ejaaz: 25 on the day.
15:43
Josh: Yeah and core weave i believe was up 31 at least this week yes both of these
15:48
Josh: companies showed blowout numbers mostly because um
15:52
Josh: as we mentioned in the previous episode the price per rental hour of gpus is
15:56
Josh: just going through the roof everyone when they initially evaluated these neocloud
15:59
Josh: providers they were baking in depreciation of these gpus over time
16:03
Josh: because when you have a gpu you assume it's a depreciating asset,
16:06
Josh: you mark it down year over year until it reaches a settling point.
16:10
Josh: What's happening is the inverse. The number's going up. So therefore,
16:13
Josh: the amount of revenue that they're making is going up. And from the Corby Verning's
16:16
Josh: call, we have a quote here. It says, we recently signed an A100 contract.
16:20
Josh: Again, those are the 2020 GPUs.
16:22
Josh: That extends into 2029 GPUs.
16:25
Josh: At an attractive price. So people are signing contracts for three years out on GPUs that are 25%
16:30
Ejaaz: Higher than they rented out two years ago, by the way.
16:33
Josh: That's incredible. So on the surface, I mean, that looks, that looks great.
16:37
Josh: We're like, okay, this is a good company. But then also I do have to,
16:40
Josh: I do have to say, I was looking into the earnings, particularly of CoreWeave,
16:43
Josh: which I'm more familiar with.
16:44
Josh: And I realized that they actually have a bit of an issue on their hands.
16:49
Josh: They're spending a lot of money that they don't have. So one of the things that
16:52
Josh: we look at when we look at the hyperscalers in particular, like Google and Amazon,
16:56
Josh: is they're spending a lot of money out of their free cash flow.
16:58
Josh: They're not going into debt.
17:00
Josh: What's happening with Corbiv at least is they have $6.5 billion of capex,
17:03
Josh: but they have a negative free cash flow of just under $6 billion,
17:07
Josh: which means they're losing money.
17:08
Josh: They have debt around $35 billion of it. And this is a company,
17:13
Josh: when I see that, I'm like, oh, wait, that's the thing we've been looking out for.
17:16
Josh: The hyperscalers don't have that because they're making enough revenue in order
17:19
Josh: to offset that. But this company,
17:21
Josh: I don't know. I just noticed that. And I was like, huh, okay.
17:24
Josh: A little flag went off. I'm like, okay, great earnings.
17:26
Josh: Number one up. But we're spending a little bit more than we can afford right now.
17:30
Ejaaz: But they also have a revenue backlog of $104 billion.
17:34
Ejaaz: And they just signed $25 billion in customer commitments, which I think about
17:39
Ejaaz: 50 to 60% of that is paid up front, just for Q3 alone.
17:44
Ejaaz: So you're definitely right to call out the debt backlog. I saw Martin Shkreli,
17:48
Ejaaz: our financial analyst provocateur make the point around that they're in a lot of debt.
17:53
Ejaaz: But I think this is just the name of the game over the next couple of years
17:57
Ejaaz: where a lot of hyperscalers, especially these neoclouds who have to compete
18:01
Ejaaz: with the big boys like Microsoft and Google and AWS.
18:04
Ejaaz: Need to double down on AI CapEx if they want any shot of winning.
18:09
Ejaaz: And if you look over at the Nebius kind of breakdown, by the way,
18:13
Ejaaz: we should get into the revenue numbers just very briefly, like their revenue
18:18
Ejaaz: is up 454% year upon year.
18:21
Ejaaz: That is an insane business. And that is not too indifferent quarter to quarter
18:27
Ejaaz: as well. I think they're compounding by like 50%, which is just absolutely insane.
18:30
Ejaaz: But the point around Nebius is this is a more, shall I say, grown up version of CoreWeave.
18:36
Ejaaz: And they're sitting on about $8 billion in cash. So I think of like CoreWeave
18:41
Ejaaz: being a younger gun that's like really eager and might end up flying too close
18:45
Ejaaz: to the sun, but they do have the backing of NVIDIA.
18:48
Ejaaz: They do have contracts with Anthropic, I believe, which essentially prop up
18:52
Ejaaz: that revenue backlog that I mentioned earlier on.
18:55
Ejaaz: And I just want to explain something that separates what these neoclouds are
18:59
Ejaaz: versus like some of these hyperscalers. When you look at Google,
19:02
Ejaaz: when you look at AWS, when you look at Microsoft, they've been in the cloud game for a while.
19:06
Ejaaz: So when this AI stuff came along, they basically looked at it and said.
19:09
Ejaaz: Oh, cool. I'm squeezing 30 to 40% margins on normal cloud.
19:14
Ejaaz: I should be able to do the same with AI, right?
19:16
Ejaaz: So they go to Jensen and they buy all these GPUs and they realize,
19:20
Ejaaz: oh, Jensen's taking 70% margin, so I have to take less...
19:24
Ejaaz: Percentage on this. So they become a little more difficult to work with.
19:28
Ejaaz: When you're a company that wants to least compute for some of these hyperscalers,
19:30
Ejaaz: they don't do anything and everything for you.
19:33
Ejaaz: Compare that to Nebius and CoreWeave, they will go out to build a specific cluster
19:37
Ejaaz: that works for your specific workload.
19:40
Ejaaz: And that's the difference between these two companies or these two types of
19:43
Ejaaz: companies and why I think Nebius and CoreWeave are actually going to do pretty well in the future.
19:46
Josh: Yeah, I hope so. We'll see. We also had news from another company similar in
19:50
Josh: this space with Intel, who was saying, they're like, hey, actually,
19:54
Josh: we kind of need some more money. Can we get $15 billion?
19:57
Josh: And they asked for $15 billion and the market kind of hated it.
20:00
Josh: The stock fell 5% after announcing that they are doing a $15 billion common
20:05
Josh: stock issuance to help fund the AI build out and growth opportunities.
20:09
Josh: Market was like, ooh, we don't like that. Again, to the CapEx thing.
20:12
Josh: Everyone's allergic to CapEx for some reason. They think that these companies
20:15
Josh: are not good at allocating money.
20:17
Josh: Clearly, they're wrong because, I mean, in the last day, Intel has now bounced
20:20
Josh: back. They're doing fairly well.
20:22
Josh: But what is the story behind this reaction and the kind of knee-jerk reaction
20:26
Josh: in which initially they were a little upset? But then it seems like today the
20:30
Josh: market's kind of coming to its senses and figuring, like, wait a second, maybe we do like CapEx.
20:35
Ejaaz: Well, people obviously do like it, but specific people, which are the investors
20:40
Ejaaz: in Intel. So they originally asked for $15 billion, but they ended up getting
20:45
Ejaaz: demand for $100 billion.
20:47
Ejaaz: And they thought, okay, well, we won't take $100 billion worth of equity sell,
20:51
Ejaaz: but we'll take an extra $5 billion. So they ended up raising $20 billion in
20:55
Ejaaz: under 24 hours, might I add.
20:58
Ejaaz: Now, you might be wondering, why on earth do they need more money?
21:01
Ejaaz: Why are they selling equity? Why are they diluting shareholders?
21:04
Ejaaz: Well, number one, the dilution isn't actually that much, who cares?
21:07
Ejaaz: But if you listen to their last earnings call, Li Bhutan, who is the CEO,
21:12
Ejaaz: who has been changing things around a lot for Intel, as well as the CFO said
21:16
Ejaaz: something very specific, and I'll quote it.
21:18
Ejaaz: He goes, things are going really well, and we have almost $20 to $30 billion.
21:24
Ejaaz: Cash balance that we can spend on anything and everything.
21:27
Ejaaz: However, if things are going really well, we may raise external capital.
21:33
Ejaaz: And what he was referring to there is if they have a lot of signed contracts
21:38
Ejaaz: and upcoming customers, big customers that want to use their foundry.
21:43
Ejaaz: There's something called Intel Foundry where Intel is basically building a chip
21:46
Ejaaz: fab that is going to go up against NVIDIA and the likes of AMD as well.
21:50
Ejaaz: Then they will raise external capital. This is the clearest signal that they have those customers.
21:55
Ejaaz: So I have a feeling over the next couple of months, we're going to see an announcement
21:58
Ejaaz: from Intel saying that they've signed a major client like, I don't know,
22:02
Ejaaz: an Apple or an Anthropic or OpenAI, basically saying, yeah, we're going to be
22:06
Ejaaz: designing custom chips for them, which I think is a big deal.
22:09
Ejaaz: So I'm happy to see Intel winning and I'm a pretty big fan.
22:12
Josh: Yeah, well, part of the reason why they're needing this build out is because,
22:14
Josh: I mean, again, we talk about the increased amount of inference that has been happening.
22:18
Josh: There's just so many inference tokens required because of agents and if you're
22:22
Josh: building with agents we have a message for you from our friends and sponsors
22:25
Josh: over at ledger because oftentimes if you're building with agents you're probably
22:29
Josh: worried about security we've seen all these breakouts that have happened recently
22:32
Josh: in the space it's kind of scary ledger has a solution to this it comes in the
22:35
Josh: form of three parts where the agents propose the humans approve and then the ledger signers enforce
22:40
Josh: this is the three-step process to ensure that you are safe when you're working
22:43
Josh: with agents ledger has this thing called an agent stack it's totally open source
22:46
Josh: it comes equipped with tools to help you manage the way that you work with your agents.
22:50
Josh: It works with cloud code, codex, cursor, anywhere you really interface with
22:54
Josh: AI, and it's totally open source.
22:55
Josh: So you can check it out in the link in the description below.
22:58
Josh: Thank you so much to Ledger for sponsoring this episode. Now we have to move
23:01
Josh: over to watermarking, which is apparently a thing that's been happening now.
23:04
Josh: What's the watermarking story here?
23:07
Ejaaz: I'm still trying to figure it out myself, but basically our friends across the
23:11
Ejaaz: pond in the EU, they like regulating stuff, especially tech and especially AI.
23:17
Ejaaz: And their latest law has basically required the top AI labs to watermark the
23:24
Ejaaz: text output or the response that your AI chatbot gives you when you write to it.
23:30
Ejaaz: So let's say you ask Anthropik or Claude specifically, hey, like,
23:35
Ejaaz: can you teach me how to do A, B, and C? Or let's say you ask it to do a bit
23:39
Ejaaz: of work at your job, right? Like help you generate a structure for a document.
23:43
Ejaaz: That text that it generates will have an embedded watermark that can be traced
23:49
Ejaaz: back to being Claude. So let's say you copy that text and you paste it into your work document.
23:55
Ejaaz: And eventually your manager is like, oh, I'm going to run this through a detection
23:59
Ejaaz: system just to see if this was written by Claude.
24:01
Ejaaz: By the way, even if you edit it, it'll still work. So he runs it through Claude
24:05
Ejaaz: or runs it through Anthropics New Thing.
24:06
Ejaaz: And apparently it'll become flagged as written by Claude or AI specifically.
24:11
Ejaaz: And the EU's justification behind this is essentially, we want to make sure
24:15
Ejaaz: that we protect users from AI generated content and be able to distinguish between
24:20
Ejaaz: human generated stuff and AI generated stuff.
24:23
Ejaaz: I have a bunch of questions around this being number one, is this official?
24:28
Ejaaz: Number two, why is an EU act being applied to the entire world?
24:31
Ejaaz: By the way, this will be applied to not just EU countries, but models anywhere
24:35
Ejaaz: and everywhere in the world. I don't really know what to think of this.
24:37
Josh: Yeah, the EU has this really funny thing where like sometimes they ruin the
24:41
Josh: world sometimes they help the world and there's a funny example that i love
24:43
Josh: to reference here which is like the iphone
24:46
Josh: um the iphone had this proprietary cable which was lightning and it was kind
24:49
Josh: of annoying because it was the only device that used a lightning adapter it
24:52
Josh: was proprietary it only worked for apple
24:54
Josh: The EU was being being annoying as they are. They said, no, no,
24:56
Josh: no, no, no. You must use a generic port. You must use a port that everybody
25:00
Josh: else is using. That's not proprietary.
25:02
Josh: So Apple had to accelerate the switch over to USB-C. And it turns out that worked
25:07
Josh: out well for everyone. We enjoyed that.
25:09
Josh: This seems like a different case. I'm not really sure. I think we could kind
25:11
Josh: of stay tuned for more information on how this is going to roll out and what
25:14
Josh: this will actually look like.
25:15
Josh: But an interesting development nonetheless. There's another interesting development
25:18
Josh: that I actually I added to this agenda intentionally because I needed to talk about it today.
25:22
Josh: Not because i care about the la lakers but we care i care about the people who
25:26
Josh: bought the la lakers so for those who aren't familiar
25:28
Josh: the la lakers was sold last year for about 10 billion dollars i believe it was
25:33
Josh: flipped in the matter of 12 months to a new owner who just purchased the stake
25:37
Josh: for 12.5 billion dollars the most expensive sale in american history
25:42
Josh: there are two people behind this purchase the first one
25:44
Josh: His name is Bob Iger. You might know him as the dude who acquired Marvel,
25:48
Josh: Lucasfilms, 21st Century Fox.
25:51
Josh: That's like Star Wars, Iron Man, Avengers. This is the movie guy.
25:54
Josh: This is the CEO of Disney.
25:55
Josh: He partnered up with this other guy named Joshua Kushner, who you may also have heard of as the
26:02
Josh: Perhaps the single largest, if not one of the largest investors in OpenAI and
26:06
Josh: one of the most active investors in the company to which Sam Altman frequently
26:10
Josh: references him as the flagship person who you want to invest on a cap table.
26:14
Josh: I find this to be really interesting because this very much feels like the barbell
26:18
Josh: strategy in which you have a fund, Thrive Capital being the name of it,
26:21
Josh: which is fully invested in the frontier.
26:24
Josh: They're investing in AI, they're investing in all this robotics infrastructure,
26:27
Josh: all these things that are coming down the pipeline.
26:28
Josh: And then they're also investing in what you could imagine is a post-EGI world.
26:32
Josh: What things actually matter, what things go up in value when AI can automate
26:36
Josh: everything. Well, I mean, people aren't going to stop watching basketball, right?
26:39
Josh: And that's uniquely human. We're not going to get humanoids involved in that.
26:42
Josh: So they're looking to purchase assets that are durable post-AGI and I just found
26:47
Josh: this to be a really interesting story of if anything a thought experiment when
26:50
Josh: you think about the world's after we have artificial super intelligence we have
26:54
Josh: humanoid robots walking around everywhere we have
26:56
Josh: robotics at scale what are the things that still matter to us as humans that
27:00
Josh: we're going to continue to spend capital on it's probably something like these
27:02
Josh: human experiences and the LA Lakers are a pretty sweet brand so they dropped
27:06
Josh: a bag on securing this and I just thought it was really interesting and worth mentioning.
27:10
Josh: And just like an interesting thought experiment on like, hey,
27:12
Josh: where's the world going to go once we figure all these hard problems out?
27:15
Ejaaz: Yeah. Largest transaction for a sporting franchise ever. That is a large amount of money.
27:23
Ejaaz: I'm big fans of Thrive and I like the way that Josh thinks of a lot of his investments.
27:28
Ejaaz: But yeah, to your point, I think this is a very intentional bet on humanity,
27:34
Ejaaz: which is very refreshing to see from one of the largest AI investors in the world.
27:39
Ejaaz: And I think that, you know, as time progresses, human created or human authenticated
27:44
Ejaaz: IP is going to become incredibly valuable. And sporting is a.
27:48
Ejaaz: Just happens to be one of those franchises where, you know, that condenses pretty
27:52
Ejaaz: strongly. And I think, you know, it's just also pretty dope to just buy your
27:55
Ejaaz: favorite team. I think that's a freaking epic, epic baller trade for them.
28:01
Ejaaz: And yeah, so to round off the docket, speaking of OpenAI, they're churning through,
28:06
Ejaaz: these employees, man. But just to round this off, Brad Lightcap,
28:10
Ejaaz: who joined, I believe, as their head of growth and then ended up becoming the COO, has left,
28:16
Ejaaz: Brad Lightcap was pretty definitive to a lot of OpenAI's growth stage,
28:21
Ejaaz: specifically from like GPT-3 onwards.
28:23
Ejaaz: He's been toiling away, but now he's left to go do bigger and better things.
28:26
Ejaaz: We don't actually know what he's doing. But the point is, OpenAI has seen quite
28:30
Ejaaz: a lot of churn over the last couple of months.
28:33
Ejaaz: It happens to come around a time where they're rumored to basically be IPO-ing.
28:38
Ejaaz: When I look over Anthropic, I see the opposite.
28:41
Ejaaz: They're like a magnet attracting a bunch of people. And I do wonder what the
28:44
Ejaaz: differences between them are actually.
28:46
Ejaaz: But that being said, it doesn't seem to be having any change structurally.
28:49
Ejaaz: The research team is still pounding along and creating better models.
28:52
Ejaaz: But it's just interesting to see. And you know, Brad, if you're watching this,
28:55
Ejaaz: dude, like, thanks for everything, dude, you've absolutely killed it.
28:58
Josh: So yeah, pretty legendary run. Yeah. Open AI seems to have this remarkable rate
29:02
Josh: of turn where a lot of top leadership leaves as a lot of very impressive people come in.
29:07
Josh: And I think it's interesting and just noteworthy. I'm not sure what that implies,
29:11
Josh: but a lot of people want to work there. A lot of people are going there.
29:13
Josh: I guess it's testament to how intense it is to work there, but noteworthy nonetheless.
29:18
Josh: Thank you for your services. My dear Brad, you have made a meaningful impact
29:21
Josh: on the world through OpenAI and I'm sure whatever is coming next.
29:25
Josh: Sam Altman said that he looks forward to working together. So whatever this
29:27
Josh: new thing is, I suspect they're going to be doing it as some form of a partner. We'll see TBD.
29:33
Josh: But that is the roundup. This is a fairly long one we had a lot to cover this
29:36
Josh: week a lot of cool and exciting news and it's funny it felt like this was a down week
29:40
Josh: this week felt kind of like a lull there wasn't that much going on and yet still
29:43
Josh: we are here talking about so many things that are happening every single day
29:47
Josh: i think the highlights this week really i mean grok coming out with that new
29:50
Josh: model was pretty big meta releasing the open source models were pretty big
29:54
Josh: we had the full diagnosis on the exploit that happened
29:58
Josh: with open ai and breaking through hugging face you could check out all those
30:02
Josh: videos we filmed entire episodes about that if you haven't made it through.
30:05
Josh: But if you have, and you've reached this point of the video,
30:07
Josh: made it through another week, congratulations. Thanks for sticking with us.
30:10
Josh: It was a really good one. Really exciting. You are now fully up to date.
30:13
Josh: You can go and touch some grass. Enjoy your weekend.
30:15
Josh: Maybe look at the sun, but not for too long. The eclipse happened yesterday
30:18
Josh: at the time of recording. It looked amazing. I went to the last two full eclipses
30:22
Josh: and I missed this one. And I have so much FOMO. So if anyone was there,
30:25
Josh: I'd love to hear about your experience.
30:26
Ejaaz: What do you mean you went to the last two eclipses? Like you traveled to a country
30:30
Ejaaz: where you could see them?
30:31
Josh: Yeah, the United States of America, dog. It was great.
30:34
Josh: Tennessee. And then I forget where the second one was a couple of years ago.
30:37
Josh: But they're amazing. They're unbelievable experiences. And another one just
30:40
Josh: happened. It covered a lot of Spain.
30:42
Ejaaz: Wait, Josh, I thought they were every 90 years. this wasn't the last one like 1999.
30:48
Josh: No dude i saw the last one like a couple of years ago right right like it was
30:51
Josh: like a four-hour drive away from you wait
30:52
Ejaaz: Wait let's let's track this up so that sounds epic i mean it.
30:57
Josh: Must be it's just like unbelievable experience similar i guess you could kind
31:00
Josh: of make it a comparison to the world cup in a way where it's like this unifying experience that feels
31:06
Josh: credibly neutral like sure the world cup everyone has like their favorites but
31:10
Josh: it's this unifying thing where you experience this together and you're like
31:13
Josh: holy shit like we're actually
31:14
Josh: we're pretty small beings in this universe we don't mean a lot there's like
31:17
Josh: really powerful things happening and it's it's something that's totally out
31:20
Josh: of our control that is like remarkably beautiful and unique and rare
31:24
Josh: and i could see why if people like who didn't know what this was
31:28
Josh: had this happened to them you'd probably be pretty freaked out you'd probably
31:31
Josh: believe in aliens or whatever crazy stuff because like it that's what it feels
31:34
Josh: like um so next one next we'll find where the next one is we'll put on our calendars
31:38
Josh: we'll book a flight and we'll go because it's amazing but that's why I just
31:41
Josh: had a little bit of fun with that.
31:42
Ejaaz: I saw some insane photography and videography about people seeing this for the first time.
31:48
Ejaaz: And also there was this awesome video of a guy skateboarding off a half ramp
31:52
Ejaaz: into the eclipse sun as it was setting. It was just the most insane thing ever. Everything was dark.
31:59
Ejaaz: And I couldn't help but think,
32:02
Ejaaz: is this AI. And so I'll leave you on this note. That was real.
32:05
Josh: Wait, also one cool thing about, like, because it mostly happened in Spain,
32:09
Josh: in Mallorca, the sun was going down right at the time of the eclipse happening.
32:14
Josh: And when the sun is closest to the horizon, it's largest. So it looked like
32:17
Josh: this huge eclipsing sun. And I think that's the video you're referencing of
32:20
Josh: this, like with the telephoto lens, you can get some pretty unbelievable shots.
32:23
Ejaaz: It looked like the end of the world, honestly. It was pretty insane.
32:27
Josh: So cool.
32:27
Ejaaz: But yeah, that is it. That is the roundup. Thank you so much for listening.
32:30
Ejaaz: If you are listening to us, if you're watching this and you aren't subscribed
32:34
Ejaaz: or you don't have notifications on, please do. It helps us out massively.
32:37
Ejaaz: Leave us a comment, DM us.
32:39
Ejaaz: A bunch of you have been saying hi in IRL as well. So we love that.
32:43
Ejaaz: Keep approaching us. Keep saying hello. We'd love to hear from you.
32:45
Ejaaz: And yeah, that is it. We will see you next week. Back again on the list.