This Week In AI: Why SpaceX's $1.5 Trillion IPO is Undervalued

Josh: On paper, SpaceX's $1.5 trillion IPO would be the biggest in history, Josh: raising about $30 billion. Josh: But that's not the crazy part. The crazy part is that even at that price, Josh: we still believe it's undervalued. Josh: In fact, grossly undervalued because this all stems from one realization. Josh: It's turning Starlink into AI data centers in space. And the winner who deploys Josh: resources the fastest gets to reshape civilization.

Josh: It isn't just SpaceX stock finally available to the public.

Josh: This is Elon using Wall Street's money to build an Josh: orbital gpu swarm with these new satellites that are 150 kilowatts and starship Josh: will launch basically a small city's worth of ai power into orbit every single Josh: flight we're going to talk about all of this um because eventually this leads Josh: to lunar factories producing ai satellites and if he pulls this off it's going Josh: to be pretty amazing so in this episode we're going to break down why this ipo exists

Ejaaz: Only because of ai. Josh: This was not the case prior to this week how the physics actually favored data Josh: centers in space and why 1.5 trillion dollars may be a rounding error if SpaceX Josh: wins because, I mean, in this game, Ejaz, it's kind of simple.

Josh: Whoever can deploy compute the fastest, they win the AI race and they probably Josh: get to rewrite the future of civilization. Ejaaz: Yeah. I mean, before we get into it, I want to walk everyone through the kind Ejaaz: of series of events that kind of led to this groundbreaking bit of news. Ejaaz: So it all started off around Wednesday this week, where two news sources, Ejaaz: Bloomberg and the information leaked news that SpaceX was potentially going to IPO sometime in 2026.

Ejaaz: But we didn't quite know the valuation at that point. Ejaaz: And then it broke that it was a $1.5 trillion valuation. Ejaaz: And the reason why this is such big news is it would technically be the biggest IPO ever. Ejaaz: And then people were like, but Elon hasn't confirmed it. Ejaaz: Well, yesterday, Elon officially confirmed it. He responded to a great article Ejaaz: from Eric Berger where he kind of predicted why he thinks SpaceX is definitely going to IPO soon.

Ejaaz: And Elon confirming it all but means that, Ejaaz: If SpaceX IPOs, Josh, at $1.5 trillion, his net worth would effectively double, Ejaaz: which would put him just under, not exactly at, but just under $1 trillion overnight. Ejaaz: Once the IPO goes live, he owns 42% of SpaceX. Ejaaz: So listen, there's a bunch of big numbers here. Ejaaz: In order to successfully IPO at this valuation, he needs to raise $30 billion.

Ejaaz: Dollars um he needs to you know Ejaaz: technically deliver on a lot of stuff that we're going to get into in a second Ejaaz: but you know massive massive vision so the question i ask myself is why now Ejaaz: and what is he doing to justify this what is he telling the people that he's Ejaaz: raising 30 billion dollars from um to convince them to give him that kind of Ejaaz: money and it comes to one thing josh,

Ejaaz: AI data centers in space. Now, you and I have had a very tumultuous relationship with this. Josh: We've come a long way. Ejaaz: We've come a very long way. And by a long way, in the last four weeks, Ejaaz: when this kind of like entire trend started developing, at least on social media. Ejaaz: And the concept here is if you're able to put GPUs or AI data centers in space Ejaaz: and harness the energy of the sun, you effectively have infinite power.

Ejaaz: And in this game of creating the best AI to reach AGI level, Ejaaz: you need as much compute as you can get your hands on. And the fact is Earth's resources is scarce. Ejaaz: So Elon's whole pitch behind IPO-ing SpaceX is he believes he can control and Ejaaz: build data centers in space using his Starlink satellite network.

Ejaaz: Josh, he thinks he can create a constellation of Starlink satellites that can Ejaaz: speak to each other via laser beams, right? Ejaaz: So they can communicate and share compute and data between themselves, Ejaaz: harness solar energy from the sun and beam that down to earth to create AGI. Ejaaz: This sounds like something out of a sci-fi novel, Josh. Ejaaz: It seems like you're obviously bullish. How feasible is this? Ejaaz: What are we looking at here?

Josh: Yeah, it's funny because for the longest time, Elon was strictly no. Josh: No way are we ever going to go public. But the second that they realized that Josh: Starlink satellites can be architected as this distributed network of data centers, Josh: it went from no way to we kind of have to. Josh: Because a lot of this AI race, it kind of comes down to deploying assets just Josh: quicker than your competitors.

Josh: And we've seen this with XAI in the past where they did not exist, what, two years ago? Josh: And now they are at the forefront with everybody else. And it's because they Josh: were able to deploy their resources faster than everyone else.

Josh: They were the fastest to get to Josh: large coherent cluster of nvidia gpus Josh: and as a result they have some of the best models in the world so this Josh: is clearly a race to get to resources spacex has Josh: the ability to do so xai has the models to do so but spacex doesn't quite have Josh: the money so their projected revenue was i think it's about 24 billion dollars Josh: in the near term which for a fun fact is roughly equivalent to nasa's annual

Josh: budget but what they realized is wait a second if we're going to compete on Josh: a global scale and building AI data centers, Josh: we need far more money than that. Josh: And that is the reasoning why they're going to public markets, Josh: raising the $30 billion. Josh: And again, at $1.5 trillion, that's about $30 billion they're going to raise in addition. Josh: So Ijaz, I guess the question, I started by saying this is fairly undervalued Josh: because the stakes are so high.

Josh: We'll explain the reasoning, but I'm curious what your take is on the valuation, Josh: the $1.5 trillion number as it sits today. Ejaaz: Okay, assuming this is economically and physically possible, Ejaaz: Josh, it's a no-brainer. Ejaaz: And it's for one simple reason, which Andrew actually outlines pretty well in Ejaaz: this tweet that I'm showing here. Ejaaz: To win the AI race, you need the most compute, data, and energy.

Ejaaz: That last one, if you can get infinite energy from the sun, you've already won, right? Ejaaz: And the only reason why people haven't considered this before is because it hasn't been possible. Ejaaz: Elon will effectively own the highway and the tolling system into space. Ejaaz: SpaceX is like literally a decade ahead of the next nearest competitor. Ejaaz: So if he can create a monopoly on this and actually make this viable,

Ejaaz: he wins. Your point around him needing the money to apply resources to this, Ejaaz: we all know that Elon started SpaceX to get to Mars, right? Ejaaz: He wants human civilization on Mars. Ejaaz: And he didn't really have a good justification as to why he would IPO SpaceX, Ejaaz: aside from maybe getting extra cash to help fuel that vision.

Ejaaz: Now he realizes that he needs to kind of create this constellation of satellites Ejaaz: to pay for the Voyagers and the expensive mission to get to Mars. Ejaaz: So it's a means to an end is the way that I'm kind of thinking about it. Ejaaz: And so now when I connect the dots, Josh, is $1.5 trillion valuation undervalued or overvalued? Ejaaz: I think it's undervalued assuming he can get the data centers out in space and Ejaaz: beam it down back to Earth.

Ejaaz: Because it's not just going to be him and Grok and XAI that benefits from this. Ejaaz: It's going to be all the other frontier AI labs that are going to want to or Ejaaz: need to rather use his infrastructure. And that's my simple thesis. Josh: Yeah, you can ask the question, well, one, like, is this a monopoly? Josh: Yes, this is a monopoly. The next closest company is five to 10 years behind being Blue Origin. Josh: Is this a monopoly on a market that is meaningfully large? Yes.

Josh: AI, as well as low earth orbit satellites, as well as energy satellites, Josh: are about some of the biggest markets on planet earth so the total active Josh: market size is gigantic and the Josh: third question is is there an operator capable of actually doing Josh: the impossible and making the impossible a reality and the Josh: answer to all three of the questions are yes so there is Josh: a unique monopoly in a industry that Josh: is larger than any industry that exists today run by

Josh: the best operator in planet earth and the convergence of those three things if Josh: it works in the world that we do actually get ai data centers in space and we're Josh: building artificial general intelligence out there we're harnessing a lot of Josh: power of the earth that is a civilizational scale shift and the amount of wealth Josh: generated from that will make 1.5 trillion dollars feel like a drop in the bucket

Josh: so maybe today 1.5 trillion feels large but in the scale of things Josh: that's a very small number. Ejaaz: Typically, we speak about companies going from zero to one, and that's where Ejaaz: those exponential valuations come from.

Ejaaz: With this IPO and with Elon's kind of successful Starship launches and satellite Ejaaz: launches, we're somewhere between zero and one. We're at 0.5. Ejaaz: So the risk has been reduced because he's reduced the cost of going to space. Ejaaz: He's already launched satellites successfully. So now the exponential returns Ejaaz: seem really, really more feasible. Ejaaz: So I think he's going to raise that $30 billion in a matter of, Ejaaz: you know, months, if that amount, right?

Ejaaz: The other thing is, like, he's literally turning science fiction into reality here.

Ejaaz: We talked about the concept of the Kardashev scale, type two civilization, Ejaaz: which is, you know, humans being able to harness the energy of their local star, that is the sun. Ejaaz: And we've suddenly gone from it being zero. Ejaaz: So like that, there's no way he's going to pull it off to, ah, Ejaaz: you know what? He actually might. Ejaaz: And so $1.5 trillion seems kind of very undervalued if you have that kind of mindset.

Ejaaz: But again, people listening to the show, Josh, are going to be like, Ejaaz: well, I don't think the numbers make sense. Ejaaz: You can't get rid of heat in space. It's a vacuum. Ejaaz: How are you going to be able to launch satellites? They're going to need to Ejaaz: be kilometers square wide. Ejaaz: Josh, have you got any of the numbers that can help break this down?

Josh: Let's run the numbers. So we talked about a good bit of the logistics and Josh: the cooling in a previous episode earlier this or last week so Josh: go listen to that if you're interested in that the numbers that Josh: we're going to talk about today are the amount of scale Josh: they're actually able to get into outer space and what that looks like so elon Josh: recently posted on x their ability to get 150 kilowatts

Josh: per satellite into outer space so for some reference numbers the average u.s Josh: home uses about 10 500 kilowatt hours which is about 1.2 kilowatts of continuous Josh: energy so if an ai satellite can generate around 150 kilowatt of electrical Josh: power, like Elon is saying, Josh: 150 kilowatts divided by 1.2 is about 125 homes worth of continuous power. Josh: So one of these AI satellites has roughly the power budget of 120 to 130 American Josh: homes running all the time.

Josh: Now, how much can you do per launch? Because a launch consists of many of these satellites. Josh: So SpaceX's own site says Starship is designed to carry up to 150 metric tons of low Earth orbit. Josh: So how many is that? that's about 50 to 75 of these satellites per flight.

Josh: So if you do that math, 60 satellites times 150 kilowatts of energy is nine Josh: megawatts of power in orbit from one starship, Josh: which is equivalent to a small town in New England with every single launch Josh: that they make into outer space. Josh: That is 7,500 homes. That is 19,000 people's home usage. Josh: So every fully loaded starship launch is like dropping a small city's worth Josh: of electric households dedicated just to AI into orbit.

Josh: And that is an outrageously large amount of energy and compute that they're Josh: putting into outer space, especially relative to what people are trying to do back here on Earth. Josh: If you remember a Blackwell chip, which is NVIDIA's newest cutting edge rack, Josh: it uses 120 kilowatts per rack. Josh: And each one of these satellites surpasses a Blackwell. So it's like this gargantuan Josh: amount of energy and compute that's being sent to orbit every single launch.

Ejaaz: Yeah, he's tapped into the infinite energy clip and it's become a reality. Ejaaz: And if he can harness all of that, he basically wins. Ejaaz: The other thing I was thinking about, Josh, is Ejaaz: To your point around SpaceX or Starlink specifically being a monopoly on this, Ejaaz: that's effectively the way that I see it. Ejaaz: Like pretty much every single usable satellite out there is a Starlink-affiliated satellite.

Ejaaz: In fact, we've got this really cool graphic that we want to show everyone here. Josh: Oh, yeah, this is sick. Ejaaz: Okay, if you're looking at this, if you squint, it might look like a bacteriophage, Ejaaz: right? But no, this is a simulation of all live satellites that are orbiting Earth right now. Ejaaz: And if you notice my cursor, whenever I touch pretty much any satellite that's Ejaaz: kind of bumbling around here, you'll see Starlink repeated over and over and over and over again.

Ejaaz: So he has the market monopoly. I think something like 90% of satellites out Ejaaz: there are Starlink based or have been launched from SpaceX infrastructure and launches. Ejaaz: So he has the market monopoly. And the reason why that is so important is... Ejaaz: The capex cost of launching this out into space and making AI data centers in Ejaaz: space feasible, it actually becomes affordable to do this, right?

Ejaaz: Effectively, if you imagine having just empty data center slots bumbling around Ejaaz: in space, and all you need to do is fit in the latest GPU and launch it up there Ejaaz: for cheaper than the cost of the weight of the GPU, Ejaaz: Elon will be able to do that via SpaceX.

Ejaaz: So it's a crazy monopoly. I do not see anyone coming even close maybe it's uh Ejaaz: amazon or rather jeff bezos's blue origin but that's still a decade behind right Ejaaz: so as far as i see it elon's got this in the bag.

Josh: Yeah and they're i mean because of the rapid reusability of Josh: starship you're able to send just tons of mass to orbit elon he posted that Josh: he's expecting one megaton per year um so i mean 100 gigawatts it's on the that Josh: includes 100 gigawatts it's on the order of like a dozen large power plants Josh: so this map that we're looking at right now full of all these satellites is Josh: going to get much more full.

Josh: Another interesting thing about this map is the way that they communicate to each other, EJAS. Josh: A lot of the communication done on Earth is done through fiber optic cables Josh: when it relates to AI because it's the fastest way to move information as close Josh: to the speed of light as possible. Josh: The cool thing about Earth is it's vacuum with no resistance or friction.

Josh: So when these satellites are communicating with each other, even over a distance, Josh: the only limitation is actually the speed of light.

Josh: And the bandwidth with is huge because there is no friction Josh: in communication because they are simply sending photons to Josh: each other they're sending and receiving photons so the unlock that Josh: that enables where now you have a three-dimensional plane Josh: of earth where earth is two-dimensional you can only build so much here you Josh: turn them to three dimensions and you're restrained only by the speed of light

Josh: in terms of photons moving back and forth to each other this gets really sci-fi-esque Josh: very quickly but also you could start to see how effective this is and what Josh: an incredible business oh my god i am stoked for the CEO. Are you an investor at $1.5 trillion? Ejaaz: Yeah. Yeah, of course I am. Yeah. Josh: Hell yeah. Ejaaz: Dude, the TAM, the total addressable market, is literally infinite space. Josh: Yeah, but it does not exist.

Ejaaz: It doesn't exist. Yeah, exactly. Earth will eventually become energy constrained. Ejaaz: If you look at the energy bills, Josh, of the local towns surrounding data centers Ejaaz: that are in Abilene, Texas, it's gone through the freaking roof, dude. Ejaaz: And this is going to be something that we constantly come at odds with because, Ejaaz: you know, who needs it more?

Ejaaz: What's more important, humans that are kind of local and conducting their own Ejaaz: kind of business or creating absolute artificial super intelligence for the world to use? Ejaaz: I know some people might, you know, argue the latter. Ejaaz: So the point is, we need to find energy elsewhere. And the most obvious one Ejaaz: is the thing that stares at us in a blue sky every single day.

Ejaaz: So to round this off, Josh, and for the listeners and watchers of this show, Ejaaz: if you want to imagine what the end game of this looks like, Ejaaz: it's this graphic that we're showing you on this screen right now, Ejaaz: except it's Starlink satellites all over the sun. Ejaaz: And it's just absorbing the energy and transmuting that down to build artificial Ejaaz: general intelligence on Earth. It's a crazy, crazy vision. Josh: Things are getting really sci-fi really quick.

Ejaaz: And it's... Josh, I had one more. I had one more thing. Just a little nugget, a little Easter egg. Ejaaz: Okay. If SpaceX is one of your favorite, AI companies. Ejaaz: Give me another one. Just give me maybe your next three or four. Ejaaz: What's one company that comes to mind? I want you to say Google, Ejaaz: by the way. So you can cut this and say it. Josh: Well, clearly Google is one of them. We are huge fanboys. We love Google.

Ejaaz: Why do you ask that question? I was hoping you were going to say that. Ejaaz: They are an official percentage owner in SpaceX to the tune of around 8%. Ejaaz: That means they invested $900 million in SpaceX about six years ago. Ejaaz: Josh, that is currently worth $111 billion if SpaceX IPO is at 1.5. Josh: Trillion. When you got it, you got it, man. And Google just got the juice. Josh: Listen, I'm a SpaceX shareholder too.

Josh: My friend John and I, we worked so hard back in 2020 to find an SPV of an SPV Josh: of an SPV to get shares in. Josh: And it is now up like 50. I'm so excited to finally have some liquidity. Josh: Not that it matters. I fully intend to add more, but like, man, Josh: good time to be an optimist. Josh: Good time to be an investor in the future because it is getting so weird and so wild. So weird.

Josh: But if you are new here, every Friday, we release an episode about kind of a Josh: roundup of the world in AI. There's more stuff that happened. Josh: And this second half of the episode, we're getting into that, Josh: starting with what feels like a natural extension of this e-jazz, right? Where, Josh: We officially have the first AI data center in space that actually worked.

Ejaaz: Yep. So this tweet that you're seeing from Philip Johnson, Philip is kind of Ejaaz: like the guy that kicked off this trend, I would argue. Ejaaz: He is the CEO and founder of StarCloud, which is a startup incubated by Y Combinator Ejaaz: with a very bold vision of putting AI data centers in space.

Ejaaz: The one difference between Philip and Elon is he's actually put a data center Ejaaz: in space and he launched it through one of Elon's Falcon rockets last month. Ejaaz: And they put an NVIDIA H100 in space. It's currently out there running inference and training models. Ejaaz: And it was able to do two really cool things, Josh. Ejaaz: Number one, it trained a version, an open source version of ChatGPT from scratch Ejaaz: on all of Shakespeare's works.

Ejaaz: Just for fun, to see if it could figure it out. And secondly, Ejaaz: it took an open source version of Google's AI model called Gemma and is currently, Ejaaz: right as we speak, inferencing between that model in outer space back to Earth. Ejaaz: So you can send a prompt to the Gemma model out there and get a response in Ejaaz: a couple of seconds, which is just insane to say. Ejaaz: Now, people listening to this might be like, well, an NVIDIA H100, Ejaaz: that's an old GPU, who cares?

Ejaaz: And it's just one of them. This isn't the vision that you just pitched me of Ejaaz: a satellite network eclipsing the sun. Ejaaz: Baby steps guys this is baby steps the fact that this uh gpu can survive out Ejaaz: there dispels the rumors that you know oh you can't radiate the heat or radiation Ejaaz: is going to kill the gpu it's it's out there it's been running for two and a Ejaaz: half weeks now so this is a very feasible thing uh josh are you excited about this.

Josh: I'm i'm excited about it it's a great proof of concept Josh: it shows like okay shielding works okay heat dissipation Josh: works what i really love the most about this is the models that Josh: they run uh here on the post that you're showing they trained the nano Josh: gpt model from andre carpathy uh to work Josh: on those shakespeare things so it's cool like our i mean Josh: number one fanboy of andre here he created this like small little nano gpt and

Josh: now they've created a model in space and there's two models running there there's Josh: one that they actually trained and then there's one that they had pre-built Josh: that is returning tokens this is awesome it is a proof of concept and it shows Josh: that i mean granted i think people have now realized that this is possible but Josh: they are actively proving it in reality. Josh: And for that, it's awesome. StarCloud seems to be doing cool stuff.

Josh: I'm very happy with the company, very excited for the future. Ejaaz: Yeah, but enough talk about GPUs in space, Josh. Josh: Let's kind of like touch. You mean we're going to ground this conversation? Ejaaz: I am grounding the conversation. I am touching wood. I don't have any grass Ejaaz: near me right now, but I'm back on Earth officially.

Ejaaz: There is a GPU war going on between our two favorite foes, Josh. Ejaaz: The USA, and China. Now, they've had a very tumultuous relationship, Ejaaz: mainly because NVIDIA has been restricted from selling their GPUs to China. Josh: Which, by the way, Ejaaz: Makes up a huge percentage of their revenue every year. So the fact that Trump Ejaaz: said no to Jensen was a big deal.

Ejaaz: Until this week, when he gave the thumbs up to sell not just any NVIDIA GPU, Ejaaz: but their second older generation GPU, the H100 or H200 sorry. Ejaaz: To China. And it comes with a few stipulations, Josh, which is 25% of revenue Ejaaz: that NVIDIA makes from these sales to China needs to go to the USGov. Ejaaz: So he's paying a pretty hefty tax on this.

Ejaaz: And so people were pretty excited. NVIDIA stock jumped up on the news, Ejaaz: except on the same trading session in that same day, Ejaaz: it retraced because China put out a commentary officially saying, Ejaaz: we don't want your gpus and in fact we're Ejaaz: going to restrict the amount of h200 gpus that our Ejaaz: companies buy from you because they can just use chinese Ejaaz: gpus right so that was the response from china

Ejaaz: saying like listen we don't need it so it was a very volatile uh Ejaaz: day in terms of trading the nvidia stock except that Ejaaz: then the chinese companies themselves spoke up and Ejaaz: said uh hey we're deep seek over here Ejaaz: and we kind of need nvidia's gpus Ejaaz: because we can't trade oh we Ejaaz: can't train frontier level intelligence unless we Ejaaz: have those gpus so there's this there's been this big back and forth china in

Ejaaz: response to that has been like okay let's hold like a council session internally Ejaaz: let me talk to some of the companies here and figure out how many h200s you Ejaaz: guys actually need and i have a few thoughts about this josh but what's your Ejaaz: general reaction before. Josh: We get into it. It's funny. So the story isn't the fact that we made them available Josh: to China. It's that China said, we don't want them.

Josh: In fact, we already have them. We have stolen them. We have smuggled them in. Josh: So that is a generous offer of you. Josh: But hey, we've already been training models on your hardware for a long time. Josh: So thanks, but no thanks.

Josh: And that comes to the surprise of probably no one. Everyone had an idea that Josh: a lot of these were getting sent to Josh: I suspect what that means is these new DeepSeq models, which have been hyper-efficient Josh: in the past, will just become even more efficient going forward. Josh: And we've always talked about this constraint that they've had, Josh: where they've been resource-limited, therefore they've had to be resourceful on the software stack.

Josh: In a world where they are resourceful on the software stack, Josh: but also have a competitive hardware stack, that feels like a supercharged DeepSeq. Josh: And I feel like whatever model they release next is going to be a seriously heavy hitter. Ejaaz: Yeah, I mean, there's, it's a few things. There's the performance competition Ejaaz: that you just explained, but there's also a strategic political one. Ejaaz: And the strategic political one has two sides, okay?

Ejaaz: So if I'm China, I don't want my Chinese companies hooked on American GPUs. Ejaaz: I want them to use Chinese-made GPUs. Why? Ejaaz: Because if the Chinese-made GPUs are good enough to create frontier level intelligence, Ejaaz: we now have less of a dependency on the US. Ejaaz: In fact, it's probably the most important dependency that China has on the US Ejaaz: right now, stretching across from raw materials to computer energy to whatever you might be, right?

Ejaaz: So they want to rely on Chinese made GPUs, not the US made GPUs. Ejaaz: On the US side of things, they're thinking of this specific strategy, which is, Ejaaz: If we can keep selling China, older generation NVIDIA GPUs, their intelligence Ejaaz: will always lag ours and we will always be the leader. Ejaaz: The second way to look at that is also NVIDIA has a really sticky software moat.

Ejaaz: So typically anyone that runs NVIDIA GPUs isn't just hooked to them because Ejaaz: they're using the hardware. Ejaaz: It's because they rely on the software stack called CUDA, C-U-D-A. Ejaaz: I think it stands for Compute Unified Device Architecture, right? Ejaaz: The more and more they use NVIDIA GPUs, the more and more they rely on it, Ejaaz: Josh. So it's kind of like a drug for them. So this is strategic from the US. Ejaaz: They're like, sell them the GPUs, just take a 25% stack.

Ejaaz: We're releasing Rubin, which is NVIDIA's latest GPUs coming out in 2026. Ejaaz: Just keep them hooked on it. Keep them behind. Let's keep them in check. Josh: Well, it seems like that's what they're doing. So that's the update on the China Josh: front, which is interesting. But there's another update on the hardware front, Josh: EGIS, which I'm very excited to talk about, Ejaaz: And that is Google's new glasses.

Josh: Now, I am old enough to remember the Google Glass version 1, Josh: which came out probably over a decade now. Josh: And at the time, it was viewed as the nerdy Silicon Valley kind of like freak Josh: headwear device, and it never went anywhere. It didn't work very well. Josh: But all these years later, it appears as if Google has announced that they're Josh: getting back in the hardware game, back in the eyewear game, Josh: and releasing these classes.

Josh: So Ejaz, please fill me in. Tell me why these are not going to suffer the same Josh: fate as Google S 1.0 or Meta's Ray-Bans, which are still not on your face for good reason. Josh: So it's a very difficult thing to build the good eyewear and no one's done it. Josh: Why is Google going to make it differently if they even can? Ejaaz: So in terms of like specific details, we don't have much information beyond Ejaaz: this demo video that we're showing on screen here.

Ejaaz: They've termed the project Project Aura, which is basically going to be their Ejaaz: next gen version of Google Class.

Ejaaz: And from my initial reaction from this video is it looks very similar to the Ejaaz: Apple Vision Pro experience, coupled with a few different features that Meta Ejaaz: Ray-Bans kind of introduced in their demo a few months earlier. Ejaaz: My take is it's, okay, number one, it's gonna be better than Google Glass. I would hope so, right? Ejaaz: From the design of the glass, it looks more casual and applicable to a wider

Ejaaz: range of waters. It looks a little chunky on her head now that I'm actually Ejaaz: looking at the person that's using this. Josh: I was gonna say, they look beefy. Those are some chunky glasses.

Ejaaz: That's definitely way too big, which kind of implies that, you know, Ejaaz: assuming this is a prototype, Ejaaz: they've got a chunky kind of build-out a physical build-out like the computer Ejaaz: running I'm super curious what the sensors look like here how they've been able to optimize for it, Ejaaz: aesthetically it doesn't look like the best but functionally it Ejaaz: looks pretty cool like again like that Apple Vision Pro experience you can kind

Ejaaz: of like have several desktop screens across you can access all your favorite Ejaaz: apps the number one thing that I'm excited about this Josh is Google has built Ejaaz: out a range of different apps and services that I use on a daily basis this. Ejaaz: So if I can somehow kind of combine that in with my visual experience on a daily Ejaaz: basis, it automatically becomes useful, right?

Ejaaz: Apple kind of took a step in this direction going from the Apple iPhone to the Apple Watch, right? Ejaaz: People didn't have to pull out their phone, they could just kind of like look at their wrist. Ejaaz: Google can now have the benefit of like kind of your vision doing this. So, Ejaaz: automatically through that, I think it's going to be useful. Ejaaz: In terms of viability, I'm going to base it heavily on the Meta Ray-Bans reception, Ejaaz: which was absolutely terrible.

Ejaaz: I think Google has the benefit of being able to scale hardware manufacturing Ejaaz: way better or have more experience doing that way more than Meta can. Ejaaz: So that's pretty bullish, but it's going to come down to the execution and I'm Ejaaz: going to reserve my right to judge for now. Josh: Yeah, I'll go on record as being the biggest hater for this product. Josh: I think it's going to be terrible. Josh: But the thing that I love is that Google's making it. They're working on it.

Josh: And I'm excited for version three of whatever this is. Josh: So whatever they make this year or next year in 2026, this demo, Josh: that's not really appealing. Josh: Whatever the version two is, Josh: maybe the battery shrinks, maybe the glasses shrink. Still not that great. Josh: Version three, normally version three of these things start to get good. Josh: So maybe 2028 will be somewhere in the reasonably viable glasses world.

Josh: But it's cool. I'm glad Google's in the game because this is very clearly an Josh: important form factor in the future of the way we interface with AI and computers. Josh: And there's another company now working on manufacturing them. Josh: So for that, it is a win for everybody. Ejaaz: And the final item on the docket comes from the open source world. Ejaaz: Noose Research, which is a frontier open source intelligence lab, Ejaaz: had a really big breakthrough.

Ejaaz: And by big, I mean really small, big breakthrough. Ejaaz: They launched a 30 billion parameter model, Josh, which compared to frontier Ejaaz: intelligence models right now, which range from, I think, 700 billion to 1 trillion Ejaaz: parameters, this is tiny. Ejaaz: Except it did a very big thing. It scored an 87 out of 120 on the notorious Ejaaz: Putnam mathematics competition.

Ejaaz: For those of you who aren't aware of this competition, it is incredibly hard Ejaaz: for any of the smartest humans in the world to do. Ejaaz: And in fact, comparing its results to the human scores of last year, Ejaaz: it would have placed second, scoring a problem set of eight perfect scores, which is just Ejaaz: crazy. So the fact that this tinier model packs such a crazy punch is nuts.

Ejaaz: Now, for those of you thinking, oh, well, it's just a mathematics nerdy model, who the hell cares? Ejaaz: Bear in mind that Alibaba spent, I think, upwards of $15 billion in collectively Ejaaz: training their latest QEN3 model, which is a pretty amazing open source model. Ejaaz: They scored 27 out of 120 doing the same test.

Ejaaz: So the reason why this excites me is for a few reasons. Number one. Ejaaz: Noose Research open sourced this entire thing. Ejaaz: So if you're listening to this and you're curious to kind of test this out yourself, you can do it. Ejaaz: And 30 billion parameter models is something that you can feasibly run on consumer Ejaaz: hardware at home. That's number one. Ejaaz: Number two, they did this in a distributed fashion.

Ejaaz: So typically when you're training a model, you want to build heavy data centers Ejaaz: and run a bunch of reinforcement learning, reasoning, stuff like that to create Ejaaz: the model. They didn't use any of that. Ejaaz: They used a distributed network of compute to be able to create this. So that's really cool. Ejaaz: And number three, something that they pioneered, Josh, is something called an agent harness.

Ejaaz: Basically, the way that this model became so smart is in the post-training phase, Ejaaz: where they spun up a number of AI agents, which reasoned with each other in Ejaaz: a competitive tournament bracket style thing. Ejaaz: And the one with the best solution won and submitted their answer. Ejaaz: And that's how they reached this frontier level intelligence.

Ejaaz: The reason why this is so important is if you assume that compute is the only Ejaaz: thing you need to train frontier-level intelligence, this experiment disproves that. Ejaaz: This experiment proves to you that Ejaaz: you can achieve that same level of intelligence with much less compute. Josh: It's awesome they're getting these distilled models to be so powerful. Josh: And this is kind of a trend that...

Josh: Projects towards a loose bear case for ai which is if if Josh: you can continue to distill these down into these hyper-optimized Josh: models that can eventually run on your phone and does Josh: the ai at the edge overpower the ai in the data center and does that mean that Josh: the value of these large data centers goes down i don't think so but this is Josh: a proof of concept and directionally proving or i guess giving us some data

Josh: on what that actually means and how that looks this is cool It's a fun project. Josh: And the fact that they're doing it in a decentralized way seems interesting.

Ejaaz: That wraps up the end of today's episode. It was a big one. Ejaaz: If you can't tell, Josh and I are slight bulls on SpaceX and Elon's companies. Josh: You didn't show off your hoodie. Show off your hoodie. Oh, I didn't. Ejaaz: I got my news research hoodie. Josh: Yeah, so clearly you see where both of us stand here. Yes. Space maximalist. Ejaaz: Yes. Josh: Other maximalist. Ejaaz: Open source. Distributed. Josh: Distributed. Distributed training. Sick.

Ejaaz: I'm a fan of both. I'm a fan of both. And one thing has become clear to me as Ejaaz: we wrap up this episode is that the future of AI is dependent on a number of Ejaaz: different protocol layers, Josh. Ejaaz: I don't think SpaceX wins without Ejaaz: the help of Tesla, without the help of Starlink, without the help of XAI. Ejaaz: They all kind of feed into each other and I'm excited to see how this industry builds out.

Ejaaz: You can bet your ass Limitless is going to be the channel that breaks all this Ejaaz: news. I just want us to take a little bit of a victory lap, Josh. Ejaaz: We have called out two very important trends months earlier that have become super important. Ejaaz: One of them being AI data centers in space, the other one being the Google bull case. Am I missing any?

Josh: Um, well, another one, we had Blake Scholl on the podcast who does supersonic Josh: jets and he just announced a supersonic jet generator for AI data center. Josh: So we've been early and we've been right. I mean, granted, directionally right. Josh: We first started off as haters, but we've haters of the AI space, Josh: but we've changed our mind and we've been covering it along the way.

Josh: So listen, it might not always be right, but it's always early and you'll always Josh: be up to date on everything that matters in this world of AI and frontier technology. Ejaaz: Yes. So if you're listening to this and you aren't subscribed, Ejaaz: and that is 80% of you, by the way, please subscribe. Ejaaz: It helps us out so much. Wherever you're listening to it, it could be on Spotify, Ejaaz: Apple, YouTube, whatever.

Ejaaz: If you're on YouTube, actually hit the notifications button because that also Ejaaz: alerts you of the latest alpha. We drop three to four episodes a week. It's awesome. Ejaaz: And the final call to action is we have a banger of a newsletter which drops every Friday.

Ejaaz: And from next week, it drops twice, every Wednesday and Friday, Ejaaz: one with an SAE investment thesis on the company that Josh or I are super bullish Ejaaz: about and the other highlighting the top five bits of news in AI and Frontier Tech of that week. Ejaaz: So you don't want to miss it. If you want to keep up to date, Ejaaz: subscribe to the Limitless Ecosystem. Ejaaz: We will see you on the next one.