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Hello and welcome to bear Offline. We are not a car. This is a podcast, not a car, and I am ed Zetra. Today we have returning champions Steve Burke of Gamers Nexus joining us to talk about a little company called Video. Hey doing Steve, I'm also not a car. Good stuff. I was just making sure, just checking are you triggered as well, because based on the Stanford video, there's an interview with Jensen woggot Stanford. He appears to have been both triggered but also not mad at the same time.
Yeah, well, I mean he definitely seemed a little sensitive in that one.
It's interesting, So just to be clear to the audience, there was an interview about a month ago or two ago with Jensen Huang on the Dwarkesh podcast, which is a podcast that's both very fluffy but also occasionally has sentient thoughts, and there was this bizarre bit where I forget what the question leading in was, It's something about China perhaps, and Jensen Wang just gets pissed on goes we are not a car. We are not a car, and it's just he.
Also, I think that was the same podcast right where he was like, I'm not a loser. America is not a loser. We're not losers like he wound this.
This is I say this as a I was a very fat child and I was bullied a great deal. Let me tell you something. When someone's saying they're not upset that they're not a loser, they are like they they are, just that's them saying it. Except I was. I was just large. I wasn't a five trillion dollar company. It really feels like Jensen is starting to go off the wheels a bit.
Yeah, And I don't know if it's because it could I guess it could be all the things. It could be he's gotten to a size where he just doesn't care anymore. Maybe he is so important he's just dropped like that's just how he is, and he's kind of dropped the actor, or you know, maybe it's a top endicit or I don't know.
I think it's more likely that because here's the thing. If we're talking about this. A few episodes back in twenty twenty five, he was signing Woman's Boobs. He was he was all swaggy. He'd go out on stage at GtC and just be like, the more you buy, the more you say we're the best, and everyone was cheering for him and he was like a rock star. Now he seems like Boakeshpottel is twenty three years old. If a twenty three year old was it was rude to me.
Other than the numerous times they are online, I would I would just be like, Okay, it's not that not that big a deal.
Especially if your companies worth trillions of dollars.
And the quote is just a quote. We are not we are not a car. We are not a car. The fact that I can buy this car brand one day and use another car brand the other day easy computing is not like that. There's a reason why why the XA six deal exists. There's a reason why ARM is so sticky. These ecosystems are hard to replace. Oh no, if that, I mean, like.
It's not really a clean analogy.
It's also the kind of thing. It's also insane that they've got to this point without having a cleaner one than that.
Yeah, I mean, it's that's easy to poke holes. And I get what he's trying to say. I get it. Like the architecture is, yes, it's difficult to move off of. But also on the consumer side, which is what he's talking about with buying a car and then buying a different one, you can in fact do exactly that with GPUs.
So like, yeah, I get what.
He means more on the business side, but it is uh, I don't It's just such a sensitive topic for him lately, and I don't understand if that's coming from a place of insecurity or I don't know. Just at this point, you know who you need to have on It's not me. It's like a therapist, Toshy analyze. He's like a therapist to break down his mental state.
A director's commentary style, thinking like well, okay, stop there. You see when he says he has a car, this is a sign that just like in here, he's he's gonna cry. But they paused there. I So my theory is and we kin, we kind of talked about this and then we're not dipped into it a tom But there was a short cell report from Corporate Research that came out that suggested that over twenty percent of Nvidia's fiscal year twenty twenty six revenue came from China, right
through a company called Megaspeed. I think what it might be is that he really does need China. I think it may be as simple as he really needs China. He needs China so bad, and Chinese GPUs terrify him in a way that that he's like the he's perhaps not willing to willing to totally ye talk about. And also he's not scared of am D. I don't think them. I instincts are gonna get a scare and video at all that would require.
I don't think so. I Also, I think a m D is a known quantity at this point for Johnson, Yeah, and their strategies are known, their technology is known. It's really it's the the unknown technologies and strategy is probably what he needs to worry about. And right now, most of that's coming from Chinese companies. There's there's a lot of them. I we have some coverage coming up on Yeah, on Chinese GPUs, the rise of them kind of like our rise of Chinese memory video and they get It's interesting.
It's interesting to watch companies like Jaoshan, which makes CPUs, come to market and when they do in the consumer space, they get kind of ship on for being a couple generations behind, because I remember when some of their first cps came out and the early media reports that tested it were, oh, they're about the same as a three or four generation old Intel CPU, And like I the perspective was one of mockery. But I think that should really concern some of these companies because like, if you
come from nowhere, Silicon is not an easy technology. Architectures hard, and if you come out of nowhere and you're like four generations back instantaneously, that should be pretty scary, I think for the companies that are in the space, because it's it's the getting started that's the hard.
Part, right What do you mean by that? What is the getting started in this case?
The getting started in this case, at least in the scope of China, is largely going to be things like figuring out your fab. So who's going to make the product? Do they have the technology to make it? And if they don't, how do you kind of work within the limitations of what you have access to?
Right?
Right?
Because technically TSMC is not supposed to make products for like Chinese GPUs or I mean sometimes it kind of happens anyway, but in the past, but there's limitations of the fab that's a big challenge for them. And then there's also just the actual first coming up with an architectural design. Once you have that, you can iterate on it and make changes that advance it. But getting anything to work at all, that's that's the hard part, right.
So once they pass that barrier and they have a fab that can make it from there, you just iterate. And as long as they have some customers, they yeah, they can like any other company, they just iterate. And if China has a built in pool of customers because they have restricted access to external hardware, then whether or not they're competitive, they're they're gonna have buy because yeah.
Well the other thing is as well, and this is one of my own personal things is I also have to wonder if there's not this whole thing I've been said about data center's not getting built. And when I say that, because I always get one comment from someone saying, actually I just saw one being built near me, and uh, people just with I assume no object permanence, which like I sought one, even though I'm saying they're not getting finished. If that's the case, I imagine that's quite scary to get.
Maybe this isn't it, but I imagine that's quite scary to Jensen as well, because if these things aren't getting built and China is saying we don't need these GPUs, then that makes vera Rubin a much weirder proposition as well, because it's like, Okay, if China doesn't need these and we don't have the space for the new ones, where would we buy the new ones or what would we do with these old ones? Do we just junk them? Is the walls kind of closing infamous to one?
Yeah? I think so, I will say, though on the premier of death and are not being built. I'm not sure if you saw, but Oracle has a very nice beam in the ground, several of them.
I love that. There's one photo I forget which data center is. There's just they put up the first steel beam I think in Wisconsin and there's one bloke with his hand on it and three others walking up. Yeah, And it's just it's so good because it's like, yeah, yeah, I've seen this in London a hundred times, like a bunch of guys with hard hats going or my yellow to it's going to take a minute or is it stable? We better lean on it another minute, mate. It's so
it is funny watching that happen. But it is also so very weird that going back to the Stanford thing as well, at that moment where it's like, oh, thank you for triggering me again. These are children, These are children. These are children with questions that you should be ready for. But these are children. How do you and your seventeen thousand dollars leather jacket not just reflect these unless there are like very simple problems.
Here on that. That one was interesting too because that segment he gets into I'm not sure who the guy was sitting with him. I assume someone who works for Stanford. He's the guy okay, yeah, yeah, yeah right, the guy fielding the questions, though he makes a count at one point where he says, you know, we at Stanford have a forty billion dollar endowment, and he's talking about how they're having trouble getting access to compute and GPUs and
Jensen effectively me paraphrasing it, but not that much. He effectively says, you just need money, like you, And he talks about how the first thing he would do is cut a billion dollars and send it off to a cloud data data center service provider for compute, as opposed to you know, buying and having their own solution in house, which that I think also is it's concerning because it's the thing we've been worried about in then ssumer space
for a while, which is that you'll own nothing. And you know, the companies.
Right right, they want to get away from providing anything other than dumb clients, right.
Except this is we're not talking about a guy who's saying he can't get a GPU for video games. We're talking about like a university that's considering whatever, hundreds of millions or a billion dollars of spend and Jensen's telling them to fuck off and use laptops to connect to a cloud provider. And to me, it just it kind of seems like they're being a lot more open with the concept that owning the devices is dead and it's
all going to cloud, and that is he was talking about. Well, you know, you see people today, they all have a laptop and they connect and the compute's not local anymore. That's what he's talking about, and that should scare a lot of people.
How likely do you think that actually is though, because know it just with the speed of internet connections, I just don't know what like I don't know how like practically it would be. But no, these people don't really give a fuck, Like I think that Jensen Wong doesn't give a fuck about other countries outside of how many GPUs they buy. But it's like I was on an airplane. Yes, I was on an airplane. It's one hundred years old, and like I could barely connect to the internet if
at all. That alone makes me feel like this might not be or is the suggestion that this would be like a very classist thing. This would be like if you the only laptop you can afford is one that is effectively just a device that connects to the cloud.
I do think you start to see it cause segregation by class in terms of access to hardware, although that's maybe not unique to this industry, but the the likelihood just to pull a number g fours now, which is the low end online gaming service game streaming to basically any device. Yeah, they claim to have thirty million users for that hu which seems like a lot.
That also really yeah this is g force now.
Yeah, g Force now, there's a public document that they talk about thirty million users.
Yeah, thirty million users. I don't know that that just feels very I'm just thinking of the PC gaming industry, like I for something of that scale, you would, I just maybe I'm just terribly ignorant. That just feels very high to me, because like every other game streaming service.
I mean, they might be pumping their numbers because they do have an AD supported free tier.
Well here's the thing. I just looked this up while on air. There are thirty five million subscribers to Xbox Game Pass.
Yeah.
I'll find it very unlikely that video which has failed to like they failed every single other like software like the omniverse, you know your for you and my favorite subject, the omniverse like a terrible face. Have they ever succeeded with any kind of external thing other than hardware? Yeah, exactly not. I just I don't believe that they have nearly as many, even with an AD support thing.
So they have a PDF called Nvidio dash Story pdf our Story twenty twenty five and in here is where they I'll have to send it to you, and here's where they. Yeah, over thirty million members in more than one hundred and ten countries now have access to more than nineteen hundred.
Ah, there you go, there's your thirty million members over a nonspecific period now have access could theoretically use so that thirty million people have signed up and given an email address. Yeah beautiful.
Yeah, and so like how how likely that is? I'm not sure, but that that's an interesting story because I just learned thanks to the recent Force Now partner breach, right, Yeah, that Nvidia has partners to propagate this service kind of like some kind of like a Wi Fi range extender.
Makes sense, That makes some sense.
Yeah, And I guess that's to try and solve what you're talking about, which is the latency issue. I mean, the US is pretty willfully far behind right in a lot of places for Internet where it's just non viable.
It's all just a very strange time. Actually, before I go any further though, what is this g Force breach you mentioned to me just before we came on the call, and I realized we should give it some an time.
Yeah, it's so the hacking group Shiny Hunters, or someone at least posing as them. It's kind of the funny thing with the hacking groups. It's difficult to verify. Sometimes they impersonate each other and there's no real good way
to verify it. But a user representing Shiny Hunters posted on a breach forum basically dark web stuff with an offer to sell I think it was for one hundred thousand dollars a data packet where they claimed that they had breached and harvested data including two factor authentication information, Jesus access flags, usernames, dates of birth, things like that, and they're offering it for sale for I think it was one hundred grand I'd have to check. And that
was on a forum they said. They wrote it as if they had compromised all of Nvidia G Force now and Video responded within a couple of days and said, we've looked into this. Nope, what they've compromised is one of our partners representing the Armenia region.
Uh.
And then Video kind of pointed the finger to just Armenia for the breach, that the partner actually does service other countries as well and regions, so like, I think it's I want to take Kazakhstan and news Backstan. And they didn't talk about if any of them were breached, so it could actually be wirer than Nvideo is representing.
But anyway, doesn't I find it hard to believe in Video would misrepresents something.
Yeah, straightforward, Yeah, never any slipper rewording.
But let's change tag to China, China, China, China, and this is so you've got you. We just what matched us up for this episode was that GPU smuggling thing, and we can talk about the super micro stuff, which I think rocks. I think that I've this whole time. All of these scumbags have been scummy, but in a
very boring way. There's not been any goofy science fiction share or hair dryers and the fact that this that Wali Leao was going one of the blokes was going into the warehouses and just kind of hair drying off the cereal them. But I know we might have talked about this last time, but it was funny enough to go over again. I love it. I think it's hilarious.
And there were a lot of interesting things in the timeline where a lot of the stuff happened in August and some of the investigation in August, and that was the same time we ran our report and we were digging into some of that stuff too, and a lot of it matched what we found where you know, during our Black Market GP report, we did talk to Taiwanese company and a company that operates also in Singapore, and one of the things we learned was that they'll act
as intermediaries where this one company I couldn't show them or anything on camera back then, but we talked about it. Yeah, they work to bring in nvidio. I want to say it was GB two hundred, Maybee three hundred, GB two hundred systems, so like actual racks of hardware. Yeah, like actual you know, full racks, and they'll bring them into Taiwan and run testing. So it's a testing house. They
do pre testing before it gets deployed. They do configuration stuff like that on behalf of other companies, not for themselves, and their clients were in China. I remember talking to them about it because there's just showing us these GPU racks and explaining that, oh, we test it and you know, it's for a company in China that we work with, and they seemed somewhat oblivious to the fact that this is not supposed to happen as they were giving us
all this information. Was it, yeah, go on, sorry, Yeah, So I mean they basically test it, forward it and that was what we reported, and that's also exactly what back last year Jensen was regularly talking about all these things. They weighed thousands of pounds. It's not like some small potato chip you can put in your pocket. Yeah right,
And it's a total misrepresentation to your earlier point. And as far as we could tell, like this, this is not it's not like they're just smuggling in GPUs and crates of lobster and shrimp, which has also happened, by the way, but actually completed server product.
But the thing is, I didn't realize. I guess you couldn't have set back then. I didn't realize it was an MVL seventy two.
I'm not sure if it was an MVL seventy two, which it was a two hundred rack, I don't know how many were in there.
But if it was like a full rank, that's still good. That was last year as well. If they had GB two hundreds, yeah, I mean I should have really us at the time, but like, well, I don't know if you could have actually disclosed. But that's the thing, Like, because these various reports, the super Micro one, the Culpur report, they will come back to a thing which is in video frames. It as oh, nothing has got through or if anything did. It's just a few things. You couldn't
get the big stuff through. But every report seems to be like, yeah, entire racks are making it over. Yeah, we've got and they have dummy servers, which is the craziest shit they have just like fake ones.
That's fascinating to me.
I wonder what's in them.
It's yeah, it is, I guess, brilliant and like it's
a very dumb solution. I don't mean that in a mean way, right, Like it's just how do we how do we trick the inspectors, because basically inspectors will come through to ensure compliance, make sure that people who handle large amounts of these restricted GPUs, just like I guess handling large amounts of I don't know, if you're in the pharmaceuticals industry, there's probably some level of inspection also, and they inspect it, make sure it's compliant, and sign
off on it. And so you work with third parties for this process and to pass inspection. They had, like you said, used hair dryers to remove serial numbers and labels, and then they had staged dummy servers that were compliant to kind of disguise the real operation that's the day.
So I guess it's only a physical inspection.
Yeah, I'm not sure. I was wondering that too, because I did read the entire report, and unfortunately the DJ had screenshots of the warehouse, but they didn't. It was like screenshots of surveillance camera footage, but no actual surveillance camera footage I can find. So from everything we know, it looks like a physical inspection. I don't know that there's ever a power on. If there is, though, you could still do dummy servers for that, but I'm not sure you know what it is.
They It's good to turn out that you do more thorough testing than the DOJ, because think about like, I mean, you do this, you know obviously hundreds of times more than this about this than I do. But surely you could run a simple like load test on it or something that would like be like, okay, this could do this, Yeah, I.
Mean you could. It's it's easier to make something underperform obviously than overperform, so if they need to bring something down to look like it's a lower and part, they could, But the probably really run into one physical inspection if someone knows that they're looking at you'll be able to identify it anyway, depending on what that entails. But two is on the software side. You can look at firmware and you can look at the diagnostics, and that stuff's
pretty hard to trick. Normally can spoof things, but anyone who most yeah, it's just I'm not the government. What I can say is when I I spoke to people in DC last year, they had their tech guy in
the room. These are staffers of Congress, and he seemed pretty okay actually, But there was a moment when I was talking about memory capacity ninety six gigabyte one twenty eight forty eight, things like that, and someone interrupted me and asked me to clarify if that number was the bandwidth, you know, and we're not talking in per second or anything. It was just gigabytes. It's like, no, that's capacity. And I needed to briefly explain kind of the you know,
the difference. And I'm sure they have people who understand this stuff. Maybe just wasn't in the room, but but I did learn that they don't really have any sophisticated testing because the point I made it was like, look, restrict him or not. I don't really I don't know.
I don't know if I care, But if you're going to restrict it, like at least do it in a way where it makes sense, where you can inform worse it And that would require some level of benchmarking, because right now the restrictions are done entirely based on the claimed performance metrics from the manufacturer, and the manufacturer knows a lot more about these GPUs obviously than the government. They can tweak the knobs to comply just barely right.
And so the point being, yes, I think any bedroom benchmarker who's just started their YouTube channel probably is more sophisticated. And so yeah, that's why on Nvidia, you know, they're in just such a dominating position because they're they're up against people who don't understand their technology.
So I'm reading off the Culper report here. So numerous experts told us that in Nvidia has long possessed the means to detect diversion, including pre sale signposts and standwood standard stand would Jesus standard KYC checks e g. Recently incorporated customer suddenly placed in large orders with that warranties, as well as post sale technical indicators server IP data mismatch server latency times and surfers going dark. With that explanation,
because that's the thing. I assume that in video must have some connection to every GPU, right, maybe not completely phone home.
But yeah, they should know. I mean it's they do know.
So I'm not saying they know for sure, because that would obviously be impossible to verify. But I don't see how they don't know.
I mean, it's the professor we spoke with last year for a documentary. I asked him the question, you know, do you think Nvideo knows? And his response was how could they not? These things are valuable. You'd think they'd keep very good track of every single one of them.
I just I'm wondering. So let's back to the wider AI bubble with in video GPS, especially like the next generation and then the generation after that, so Vera Rubin one and then Vera Rubin two, which is the one megawatt scale racks. It's I feel like I'm taking crazy pills when I talk about this stuff, because when you actually think about it, if they indeed, I think it's moving to Kuyber racks, they call them the one megawa once.
Okay, Kyber, I'm not familiar with, doesn't.
Yeah, it's it's the next one that will mean that the majority of I mean, all data centers are useless, as in, you can't just install a one megawatt rack in a data center that's full of that much more distributed, even one hundred megawats because just the power requirements. And it's just it feels like at some point in Nvidia is going to escalate too far that they just won't understand that. They will just think our customers have unlimited money and will do whatever we want.
Yeah, I mean, in some way, it seems like I feel like they're starting to address some of that by having now the government as more of a potential customer as well, where I don't know if it's like you run out of money from private equity and you turn to government or what is going on, but they definitely have gotten a lot more interested in military.
Uh. But even then, if the data center is all getting built because Oracles giving them a bunch of GPUs, we know that, right, And it's just I I don't know, I mean, I don't know how this ends, but I'm also just I don't know how this continues.
I think, to me, the real top indicator, And I don't know. I mean, like the market's probably after I say that, the market's gonna fucking rip for like the next yea, three years or whatever, you know. But I'm not a market guy. But like the point is to me, the thing that jumped out as like, oh this this reminds me of like Crypto when it was getting too crazy? Is this company Span. Did you hear about them? I'd never heard of them.
Oh you mean the distributed thing?
Yes, Oh they want to do distributed like many component of a data center right there in your yard. Yeah, right where you want it with RTX pro six thousands, which is like I hope they change the power connection from twelve high power so it doesn't catch on fire.
But the plan I don't really get it, Like it's it seems like so the idea of the concept is we're gonna put this nice box in your yard that kind of resembles like an air conditioning unit on the ground, and it's gonna have hardware in it to distribute the compute capacity across a wider area where there's maybe easier access.
You don't need to go through all these pesky zoning laws, and maybe you partner with an hoa with three hundred houses in the neighborhood, or your partner with individual homeowners or whatever, and they say they'll give you discounts on your energy, which is silly because it's like the energy costs you're going up because of data centers. Yeah, so that was a small one in your yard and discounted after we've increased it, which is like at best, you're
back to where you were. And yeah, and the whole thing. I just it's like the latency. It's not going to work for massive important projects. It works for smaller stuff, I guess, But I don't understand how this idea comes to fruition. And I also wonder how do you stop the tweakers from opening the box and stealing all the copper, Cause like.
Yeah, this is that. And there's also oh no, I was unfortunate enough to live in an ha community several years ago. It was truly awful. And I'll tell you, even in a nice place, the electric is bullshit like that.
I had to replace the circuit breaker or whatever you call like you're going to have to do that in every single house in the development, and probably a bunch of the transmission lines just to make sure that I don't know if they're generating Marmaduke with a seventh crashing at seven or seven, like that is going to like cause a blackout in the neighborhood. How do you prioritize power in the neighborhood?
That was my question too, Like in a winter storm, who gets priority right and and.
You know, just run the JPUS.
That's true, that's solved it. Yeah, I mean it's but that reminds me of the crypto stuff where I remember during one of the crypto peaks mining there were these space heaters where it's like, buy our space heater and it's actually just a miner and it makes you money, but also it's a space heater. And there was some other one I remember where it was you know, the mind money goes to them, like they get that, but you get free space heating. And it just sounds an
awful lot like the distributed data center thing. I just I don't know, it seems too we've like lost the plot on this, you know.
Yeah, it's it feels like one of those theoretical things that comes with the end of any era, like towards the end of the Metaverse era, there was the whole thing about people buying millions of dollars of real estate. Yeah, that was one of the last ones. But the real, the real final one for me was the Other Side. Do you remember other side from the board apes, the board apes, the board apes, the other side, and it was just they were like, look, we've finally done it.
We've got the Other Side demo, and it was just a giant open world. We're just let you And you didn't get to go in as the ape you owned. Oh great, okay, he went as just a a regular not a regular ape. They were like these kind of gorillas rip offs.
So they've realized, yeah, this is like yeah metaverse. I had the same feeling. Or it's just you look at it and you kind of go, do you You guys know that video games have already.
Ex exactly like I was playing EverQuest like back in nineteen ninety nine, like I I know how this goes, and I didn't have to pay one hundred thousand dollars for my character. I just had to give up most of my life. Yeah, I just had to play for eleven hours a day to make level fifty. Those of us pre kunok people, k u nar k. This is the second expansion. It was much harder, very unfair of those of us.
Plans of power.
So damn do pop was good place of powers? Like the end of the end of how good that was? I like though, the whole planes of time thing. I don't know if you followed that.
I did a little bit.
Yeah, the collapse of everquests with the fires of Heaven. Oh anyway, we shouldn't talk about that, so all I'll talk about. But with the other side metaverse, that was what I think was the top was when everyone went in this big session. But what's crazy is they are still doing this. They're still doing the metaverse that they're still going to limp along, which may which I think
is what's going to happen with the AI bubble. I think it bursts, but there's going to be like a cloister of perverts who still try and keep this going. And it's just insanely expensive.
That's a that's a brilliant strain of words. You've just.
Yes, that's just right off the dough. Just think it's inspired by these people because it's like, I, have you been I realized someone off the topic of GPS, have you've been following this git hub co pilot thing as well.
I only just saw the headlines. Like g hub that I've been following lately has been the Bamboo lab situation, but I have not seen the one you were.
Talking about now. It's just that they're switching the token based bailing on June first, and the subreddit is just people being like, hey, so I'm able to burn a thousand dollars worth of tokens to ten dollars. Does anyone
know if there's an alternative to do this? And just people being like, yeah, anthropic, I guess, And it's just people realizing in real time how much this ca I think the I think you're going to see a rush of people to try and do this on a hardware, and a rush of people to try and like buy up old GPUs and try and do the post dot com bubble thing. But it's not gonna work because there is no there's absolutely nothing, like, there's no way to
make this economically viable. And I think the lost it's gonna be like all I was about, say the Alamo Star, but like a just like a final stand of just guys burning out the remaining capital until it all falls apart.
I absolutely do wonder. I mean, it's it's the PC industry and the DIY industry. Yeah, seems to be the first casualty of AI. And it's it's like AI is born and then it immediately kills the thing it was born from, you know. Yeah, And so I'm not sure, like even if the bubble bursts, there's gonna be a lot of damage.
First there was I was gonna was going to ask, like, what, let's just see who the bubble busts and the AI rolls back and the in video is no longer only selling those GPUs. Isn't that like a significant amount of damage to the supply chain of PCAs?
Oh? Yeah, I mean people can't do business with this climate, because it's interesting where RAM prices are a lot to do with where we're at now with the PC industry, but a lot of I guess people who aren't in PC building may or may not realize, but there's a lot of other component manufacturers who have absolutely no control over any of this. So even though the RAM is expensive and the GPUs are hard to get her expensive and whatever, the company that makes cool arty computer cases,
they don't have any control here. And so they're just a loan for the ride. And historically those types of companies liquid coolers that you know, enthusiast air coolers, cases, whatever, they live and die, buy GPU and CPU launch cycles to where they need to have their best product lined up for the new architecture launch. So if something comes out now, then eighteen to twenty four months for now they need to have their next big thing ready. And now the cycles are lengthening.
For those which what do you mean by that? As in there is they're skipping a year of conceiving GPUs.
The architectural cadence for Nvidia has slowed for a while. They were like roughly eighteen months. For a little bit, they tended to average twenty four months between major architectural launches, and now they're moving closer to thirty months. And for a company that relies on that GPU to be there to spur sales for enthusiast PC builds for example, that's a long time to wait, you know, for your next
big wave of customers. And if you sell cases and coolers, even motherboards, you can't really self generate that much momentumly you can if you launch the best case ever killer product in the middle of a cycle. Yeah, you'll do okay, but there's just far fewer people building a computer at that time versus waiting for the next big launch because normally so GPU that triggers.
So that I understand. So a new GPU comes out every two years, you're saying, and that launch is what spurs people to buy a bunch of new cases. I know this sounds obvious. I just want to spell it out right. So and that cycle is now broken.
Yeah, because it's it's that launch that people use that as a trigger for when they want to build their new system and video or AMD. Same for CPUs. But you know, the thing that really dictates your performance, broadly speaking for most people is the CPU or the GPU, and once you've built, there's not a lot of reason to change it until the next big thing comes out. So there's that where everyone's along the ride, along for
the ride for the silicon launches. And then there's also the memory prices where even companies like gez Skill, which is a memory stick maker, so they don't make the actual memory of the silicon, but they put it on a stick and put a heat sink on it and sell it. Even companies like them. We did an interview with them, and they're down just as much as the case company is for revenue, even though there's stuff is going up in price, and it's because they're not getting
priority and that's the data centers. And they also obviously if they increase their retail cost, fewer people can buy it, and so you just run into this volume trap where they just can't move enough stuff because no one's buying anything. So a lot of the companies we spoke with are down on the year forty to sixty percent, and an year on year about seventy percent.
God, it's very fucking grim like. What's left at the end of this, genuinely what's left?
Yeah, A lot of really talented people have lost their jobs or will be losing their jobs after for Computex, which is in two weeks, like some of the best designers I know in the industry, and the companies you know, they can't keep them employed because they're not selling anything.
So that's fucking grim like. I mean, can any of this recovery afterwards, because I get the sense that in video, let's say they walk away from GPUs at the industrial scale, I guess they could return to gamers, but reallocating all of that, I don't know. Capex, I guess it would be.
Yeah, they just can't get that much money out of it. So if ny Video wants to be anything like it is now, yeah, maybe they whatever ship a couple of billion dollars more stuff to gamers, But it's just the.
Does that revenue exist? Is there that much revenue in the gamers?
Yeah, and there is billions of dollars, but there's not tens of billions of dollars, you.
Know, there's not fifty billion dollars a quarter.
All right, Yeah, And and so I don't know, even if they kind of come back, it's also going to leave the market in shambles where whoever survives at the end of this. It's not clear if those are the companies that are going to be the pro consumer companies, because there are actually a lot of companies that do the right thing for consumers in the DIY space, but they're smaller and I don't know that they can survive
this type of thing. But you know, if there's a situation where I currently, to me, it feels like a new player, as a new GPU maker, would have to bail out the DIY industry with something or like a government would have to come in and do some kind of you know, antitrust or whatever bust, which isn't going
to happen. So I'm not really sure. And the memory prices aren't solved with either of those two things, so it's unless it seems like the AI bubble has to pop. I don't know who's holding the needle though.
Yeah. I mean when this comes out, it will be the day of in video earnings, so there's no point of ever. They'll probably be and raise again. And it's interesting because without saying anything definitive, it is taking the piss a bit like just like it's like beating raised every single time, like without fail more than an analysts could ever say. All while nowhere near as many data centers get built as the chips that have been shipped, it feels like something is gonna pop here. It feels like
something is weird as happening. I think that's actually the best one. It's just things feel very goddamn weird.
It doesn't seem I know, markets aren't rational, this seems like beyond irrational. It seems artificial to me.
Yes, I mean a propos i guess for the name. But it's like, but it's it's also all in pursuit of what exactly because all of these because at least with gaming, people have fun. I think AIL was like the least joyful thing ever, Like it's just it's just when you would like the we talked about this before as well, but this year's GtC when he's like, it's a gentic, it's Nemo claw. Hey remember remember open Claw? Remember that shit? It's like when when that like remember this?
If today in video beats some races, which they very well made, then if they don't, we but let's say remember their big announcement last GtC was we made open Claw, Like, this is what this is why people are buying all the GPUs. This is the reason I don't know. Something's up up man.
I will say there was. If anybody needs something to feel positive and find some.
Joy, this is a good way to it. Please please.
There was a great clip that was circulated yesterday today of one of the former Google I think CEO right, who did a commencement speech. Oh yeah, and he mentions AI and immediately gets booed.
It's and then that happened as well to some McKinsey eye person at another school who I don't know if some woman went up and had the same thing and she just looked. In both cases they looked so surprised.
Yeah, they looked like and that's how you know they're out of touch. I did see some one count where a guy was like, Oh, these billionaires don't care about getting booed, you know, they get so much money or whatever. I actually I do think they care. I think if you're that level, you're a begelomaniac and like that probably deeply bothers them, which is great because it's like you can't take anything else from them, so at least make sure they hear the booze echo and they try to sleep at night.
Well that's the thing as well, Like I don't think anyone is immune to a group of people booing them. No, I think actually that is the best thing we could do. But I think it's funny as well, because I was watching it as we wrap up here. I was watching that and I was thinking, Yeah, you used to be that these fuck nuts would get on stage to'd be
like it's all about hard work. And I remember when I sat like by sir Gabrion and Larry Page and we're all doing business together and we were just like, wow, I love doing hard work so much, and everyone collapse. It's like, wow, if I work hard, I could be one of these guys, even though that's not how that works right now. It's just like ay for a I. You don't do this, You're dead everything.
You know.
She has her commencement speech like ten days from Lisa boom much.
But that's the thing, Lisa's that's I will be honest, Lisa. SU's the biggest disappointment of them because in my history of gaming and PC gaming, AMD always seemed more normal.
Yeah, she says like they gave the turncoat I think for a lot of but.
She turned them around and now she's just like right into the void with you.
Thanks for getting me where I needed to be.
Now I can make a three hundred. Do you hear about they deal with Cruso. Cruso is buying a bunch of GPUs and then AMD is going to rent them back. Okay, it's so cool. That needs to and but no, I think that the booing thing is good. I think we need more of that. I think I think it's necessary because they clearly are not reading anything that people are actually saying or talking to, people having any experiences outside of the perimeter of security guards that surround them at all time.
Change like how the schools work on their own programs. I mean, you don't know like that kind of response. You know, people might look at it and it can have a ripple effect where maybe people watching this commencement speaker get booed realize like, uh, there's a little more nuanced this AI thin beyond just make money and you know, replace humans.
Yeah, I've I mean, I've done a few things with a few universities, and it's interesting because it's like a fifty to fifty split of the people who clearly don't do any work at the university. So people at the top are like are like, okay, well here we go. Yeah, this is the best thing ever. I love AI so much, And then everyone else who actually does the work is like, yeah,
you've never used that. You've never used this. You talk to it and it tells you things you like to hear, and you're like, this is amazing, And I think that that you're right that the booing is the only thing that we'll get to these people but I also think that there are some of them who are like, well, they just don't get it yet. And I think if an executive says that, look the Soul movies, I feel like Jigsaw goes a little too far. But I think the idea of just keeping someone in one place and
explaining something vigorously could work on them. I'm not saying we totally copy Jigsaw. I'm just saying that the focused thing of no, you need to listen might work. Or alternatively, we just change the law so that CEOs have personal liability, right.
But just just for just for speaking of liability, not fully endorsing methods.
No, no, no no, we were just very.
His They just they don't get them, the people exactly.
I think that Jigsaw Jigsaw went too far. But the focus that Jigsaw got from people is something could be like. I think that that's a good place to wrap it as well. There this anti saw anti Jigsaw, but considering all managerial effects, Steve, where can people find you?
Uh? YouTube dot com, slash gameras and access? And I hope, I hope when the FBI visits both of us to ask about our cowents on Jigsaw, you'll have me back.
On yes, and just to be clear to the to everyone that was a bit, we are joking and we're not talking with any specificity anyway. Thank you so much. You've been listened to better or flower back back with a monologue in a few days. Cheers. Thank you for listening to Better Offline.
The editor and composer of the Better Offline theme song is Mattersowski. You can check out more of his music and audio projects at Mattasowski dot com, m A T T O S O W s ki dot com. You can email me at easy at Better Offline dot com or visit Better Offline dot com to find more podcast links and of course my newsletter. I also really recommend you go to chat dot Where's youreed dot at to visit the discord, and go to our slash Better Offline to check out our reddit.
Thank you so much for listening.
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