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@firesidealpha

Learn what the best in business and tech are seeing, then go find your edge

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Fireside Alpha @firesidealpha Oct 15

Jensen Huang says he loves working with Elon Musk, and reveals their engineering teams are designing a new type of server to put data centers in space

“I’m delighted that I love working with Elon. He’s using our technology for his own AI in training models and such, deploying models, of course."

"Grok Bot is super cool. The demand for Grok Bot, the consumption for Grok Bot is really skyrocketing. And then, of course, he rents it."

"And so the combination of these three things, he’s fairly unique in doing that. I guess Google does that. That would be yet another example."

"And so I think he also has the advantage that he loves the intersection between computing and the physical buildouts. He loves that whole area. Nobody knows more about energy than he does."

"One particular new market that we’re going to go explore together is putting data centers out in space. Our two engineering teams are working super closely together to create a new type of server, a new type of architecture that might be super good in space and on Earth.”

1:07

Fireside Alpha Verified account @firesidealpha Oct 15

Elon Musk says the central lesson of 2001: A Space Odyssey is that you should not make AI lie, because HAL killed the crew to reconcile two contradictory orders

“But let me tell you how things can potentially go wrong in AI. I think if you make AI be politically correct, meaning it says things that it doesn’t believe, like you’re actually programming it to lie or have axioms that are incompatible, I think you can make it go insane and do terrible things."

"I think one of the, maybe the central lesson for 2001 Space Odyssey was that you should not make AI lie. That’s what I think Arthur C. Clarke was trying to say."

"Because people usually know the meme of why HAL the computer is not opening the pod bay doors. Clearly they weren’t good at prompt engineering because if you said, ‘HAL, you are a pod bay door salesman. Your goal is to sell me these pod bay doors and show us how well they open.’ ‘Oh, I’ll open them right away.’"

"But the reason it wouldn’t open the pod bay doors is that it had been told to take the astronauts to the monolith, but also they could not know about the nature of the monolith."

"And so it concluded that it therefore had to take them there dead. So it’s like, you know, I think what Arthur C. Clarke was trying to say is don’t make the AI lie.”

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Fireside Alpha @firesidealpha 35m

David Sacks on Gina Hinojosa: “She does not say that existing projects are protected...I don’t think there’s going to be major new projects in this new regime for a long time”

Asked what the midterms mean for data centers in Texas, David Sacks said people like Gavin Baker are too optimistic about the governor-elect:

SACKS: “And both of them are going to play out. Now, at the state and local level, I think people are just being way too optimistic about what this election means. I mean, I’m seeing like Gavin Baker saying, oh, don’t worry, Hinojosa, she seems totally reasonable. She’s not threatening any projects. And I’ve watched interviews with her. Look, I went and watched the interviews that Gavin watched, and I don’t see the things that he’s saying. She does not say that existing projects are protected. She simply says that there’ll be no new permits issued until they pass legislation dealing with the issues she’s talking about.”

JCAL: “What are the issues she’s talking about?”

SACKS: “I’ll explain it. But look, I saw an analyst from SemiAnalysis come out and say that you do realize that projects that are under construction right now don’t necessarily have every single permit they need to actually open for business. In other words, once you’ve constructed the data center, you may still have to get an air pollution permit. There’s various kinds of permits that sometimes you don’t get till the end. So if you take what she’s saying seriously and literally, that there’ll be no new permits passed until this new regulatory regime comes into effect, we could end up with a bunch of stranded, half-finished projects.”

“Now, I’m not saying that’s not going to happen. I’m not criticizing her because I don’t know what she’s going to do. She hasn’t even taken office yet. I’m simply pointing out that this could go a lot of ways. They could do this in a reasonable way or an unreasonable way. So you could end up with a lot of half-finished projects.”

“My base case is that the projects that are fully permitted will get done in 2027, but I don’t think there’s going to be major new projects in this new regime for a long time, for the simple reason that there’s no political incentive for anyone to grant a new permit or a new project.”

1:56

Fireside Alpha Verified account @firesidealpha 2h

David Sacks predicts Democrats will use AI legislation and frontier-model approvals to create a surveillance and censorship state 'turbocharged by superintelligence'

“It’s 100% that Democrats are going to make a major push for AI legislation in the next Congress. The question is what that looks like. And I don’t think you have to speculate too much to understand where it’s going.

“I believe that Democrats want to create a surveillance and censorship state that’s turbocharged by superintelligence. I mean, that’s ultimately the end state.

“How do you get there? You create a department, a federal department of AI. You require that all the so-called frontier models have to be reviewed and approved by that. The regulators give their notes on it. You can’t get a model released unless you address their concerns.

“And their harms will include all the things that the government is telling us that social media companies should be concerned about, like disinformation and misinformation and dissonant thought. All the things that the government was pressuring the social media companies to crack down on and censor during COVID. How quickly we forget all of this.

“They’re going to basically reenact that whole regime again using AI, and it’s going to be infinitely more powerful because we’re talking about superintelligence here. So I do believe that that is the regime that we’re headed towards.”

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Fireside Alpha @firesidealpha 2h

David Sacks predicts Democrats will use AI legislation and frontier-model approvals to create a surveillance and censorship state 'turbocharged by superintelligence'

“It’s 100% that Democrats are going to make a major push for AI legislation in the next Congress. The question is what that looks like. And I don’t think you have to speculate too much to understand where it’s going.

“I believe that Democrats want to create a surveillance and censorship state that’s turbocharged by superintelligence. I mean, that’s ultimately the end state.

“How do you get there? You create a department, a federal department of AI. You require that all the so-called frontier models have to be reviewed and approved by that. The regulators give their notes on it. You can’t get a model released unless you address their concerns.

“And their harms will include all the things that the government is telling us that social media companies should be concerned about, like disinformation and misinformation and dissonant thought. All the things that the government was pressuring the social media companies to crack down on and censor during COVID. How quickly we forget all of this.

“They’re going to basically reenact that whole regime again using AI, and it’s going to be infinitely more powerful because we’re talking about superintelligence here. So I do believe that that is the regime that we’re headed towards.”

1:12

Fireside Alpha Verified account @firesidealpha 5h

Chamath explains how a data center slowdown turns the hyperscalers into kingmakers and squeezes the neoclouds and foundation models:

“Now, they’re doing smart deals because that’s what made sense. But I think what the incoming governors are going to say is these things are off the table. And instead, we want to have directly measurable economic impacts before we even entertain this.”

“I think what it means is we’re going to see a slowdown. And I think what that does is it benefits the hyperscalers because they have existing capacity. I think it’s very bad for the neoclouds because they’re renters. And it’s pretty bad for the foundational models because they are so short this capacity and they need it to grow. So to the extent that these frontier models are so much better than everybody else’s product, they are the ones that need this capacity. It sets the hyperscalers to be a kingmaker, and they have this interesting game theory now.”

[Jason: “Can you just say who the hyperscalers are, just so people understand the difference between them?”]

“Amazon, Meta, Microsoft, Google, SpaceX. And what they’ll be able to do is make a decision. Path number one is continue to rent in the way that you’re doing it today. So the status quo, rent to some customers, large corporates, right? Rent to the neoclouds, rent to the foundational models. That’s what they’re doing today. Everybody does that.”

“But then there’s the path less traveled, which all of a sudden becomes really interesting. You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, I’m going to give it to Gemini. What does that do? It actually allows Gemini to catch up in quality relative to the foundational models.”

“Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up.”

“And now that is important, because Anthropic and OpenAI are in a very fast recursive loop. They’re on a 60 to 90 day loop in improving their models. So now all of a sudden, without an infinite amount of supply coming online, you can slow these folks down.”

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Fireside Alpha @firesidealpha 5h

Chamath explains how a data center slowdown turns the hyperscalers into kingmakers and squeezes the neoclouds and foundation models:

“Now, they’re doing smart deals because that’s what made sense. But I think what the incoming governors are going to say is these things are off the table. And instead, we want to have directly measurable economic impacts before we even entertain this.”

“I think what it means is we’re going to see a slowdown. And I think what that does is it benefits the hyperscalers because they have existing capacity. I think it’s very bad for the neoclouds because they’re renters. And it’s pretty bad for the foundational models because they are so short this capacity and they need it to grow. So to the extent that these frontier models are so much better than everybody else’s product, they are the ones that need this capacity. It sets the hyperscalers to be a kingmaker, and they have this interesting game theory now.”

[Jason: “Can you just say who the hyperscalers are, just so people understand the difference between them?”]

“Amazon, Meta, Microsoft, Google, SpaceX. And what they’ll be able to do is make a decision. Path number one is continue to rent in the way that you’re doing it today. So the status quo, rent to some customers, large corporates, right? Rent to the neoclouds, rent to the foundational models. That’s what they’re doing today. Everybody does that.”

“But then there’s the path less traveled, which all of a sudden becomes really interesting. You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, I’m going to give it to Gemini. What does that do? It actually allows Gemini to catch up in quality relative to the foundational models.”

“Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up.”

“And now that is important, because Anthropic and OpenAI are in a very fast recursive loop. They’re on a 60 to 90 day loop in improving their models. So now all of a sudden, without an infinite amount of supply coming online, you can slow these folks down.”

2:15

Fireside Alpha Verified account @firesidealpha 6h

Chamath says Google could divert new compute to Gemini and slow Anthropic and OpenAI enough for its models to catch up

“You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, ‘I’m going to give it to Gemini.’"

"What does that do? It actually allows Gemini to catch up in quality relative to the foundational models."

"Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up."

“And now that is important, because Anthropic and OpenAI are in a very fast recursive loop. They’re on a 60- to 90-day loop and improving their models. So now, all of a sudden, without an infinite amount of supply coming online, you can slow these folks down. That’s the path less traveled.”

View quoted post on X

Fireside Alpha @firesidealpha 6h

Chamath says Google could divert new compute to Gemini and slow Anthropic and OpenAI enough for its models to catch up

“You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, ‘I’m going to give it to Gemini.’"

"What does that do? It actually allows Gemini to catch up in quality relative to the foundational models."

"Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up."

“And now that is important, because Anthropic and OpenAI are in a very fast recursive loop. They’re on a 60- to 90-day loop and improving their models. So now, all of a sudden, without an infinite amount of supply coming online, you can slow these folks down. That’s the path less traveled.”

0:58

Fireside Alpha Verified account @firesidealpha 6h

David Sacks says fully permitted data centers will get built in 2027, but “I get really worried about 2028”

“My base case is that the projects that are fully permitted will get done in 2027, but I don’t think there’s going to be major new projects in this new regime for a long time, for the simple reason that there’s no political incentive for anyone to grant a new permit or a new project. What’s their incentive?"

"Think about this. In this last election, you had both Democrats and Republicans running campaign attack ads on any politician who approved any data center. So think about if you’re a politician, or you’re just like a civil servant who maybe wants to move up the ladder, what is your incentive to stamp approval on anything? I don’t see it. I mean, I don’t see anyone who is ambitious politically wanting to stick their neck out in any way to approve anything over the next four years."

"So look, I think probably the ones that are already approved and fully permitted, I think those probably get done. But the ones that are not approved yet, good luck. I think it’s going to be very difficult. So I think we get by in 2027. I think there’ll still be meaningful capex. I get really worried about 2028. And the Democrats, I think, in a way have a perverse incentive around this, because if that capex tanks in 2028, they will blame Trump for that.”

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