YouSaid · the spoken record

Gavin Baker

lines on the record: 115
first: 2025-12-09
most recent: 2025-12-09
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It's an indication they process 1.35 trillion tokens. Google did like 800 or 900 billion. This is like whatever it is last seven days or last month. Anthropic was at 700 billion. Like XAI is doing really, really well and the model is fantastic. I highly recommend it. But you'll see XAI come out with this. OpenAI will come out faster. OpenAI's issue that they're trying to solve with Stargate is because they pay a margin to people for compute and maybe the people who run their computer are not the best at running GPUs. They're a high cost producer of tokens. And I think this kind of explains a lot of their”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And at that point, there's an enormous effort underway. DARPA has, there's all sorts of really cool DARPA and DoD programs to incentivize really clever technological solutions for rare earths. And then there's a lot of rare earth deposits in countries that are very friendly to America that don't mind actually refining it in the traditional way. So I think rare earths are going to be solved way faster than anyone thinks. You know, they're obviously not that rare. They're just misnamed. They're rare because they're really messy to refine. And so geopolitically, I actually think Blackwell is pretty significant and it's going to give America a lot of leverage as this gap widens. And then in the context of all of that, going back to the dynamics between these companies, I say I will be out with the first Blackwell model and then they'll be the first ones probably using Blackwell for inference at scale. And I think that's an important moment for them. And by the way, it is funny, like if you go on OpenRouter, you can just look. They have dominant share. Now, OpenRouter is whatever it is. It's 1% of API tokens.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Might be a big mistake. So if you just kind of play this out, these four American labs are going to start to widen their gap versus Chinese open source, which then makes it harder for anyone else to catch up because that gap is growing. So you can't use Chinese open source to bootstrap. And then geopolitically, China thought they had the leverage. They're going to realize, oh, whoopsie daisy, we do need the Blackwells.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's what I'm sure they're trying to do and everybody else. The big problem and the big giant swing factor, I think China's made a terrible mistake with this rare earth thing. So China, because they have Huawei asin, and it's a decent chip versus something like the deprecated hop preserving something that looks okay. And so they're trying to force Chinese open source to use their Chinese chips, their domestically designed chips. The problem is Blackwell's going to come out now and the gap between these American frontier labs and Chinese open source is going to blow out because of Blackwell. And actually deep-seek in their most recent technical paper V3.2 said one of the reasons we struggled to compete with the American Frontier Labs is we don't have enough compute. That was there very politically correct, still a little bit risky way of saying because China said we don't want the Blackwells.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's better, and they're using that model to train the next model. And if you do not have that latest checkpoint, it's getting really hard to catch up. Chinese open source is a gift from God to meta because you can use Chinese open source. That can be your checkpoint and you can use that as a way to kind of bootstrap this.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“By friendly employees who are not stealing from you, you're going to be a $20 billion company, a $30 billion company, like 15 companies have been able to do that. It's really hard. And it's the same thing. Doing all of these things well is really hard. And then reasoning with this flywheel, this is beginning to create barriers to entry. And what's even more important, every one of those labs, XAI, Gemini, OpenAI and Anthropic, they have a more advanced checkpoint internally of the model. Checkpoint is just kind of continuously working on these models and then you release kind of a checkpoint. And then the reason these models get fast.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“What taste means is you have a good intuitive sense for the experiments to perform. This is why you pay people a lot of money because it actually turns out that as these models get bigger, you can no longer run an experiment on a thousand GPO cluster and replicate it on 100,000 GPUs. You need to run that experiment on 50,000 GPUs. And maybe it takes days. And so there's a very high opportunity cost. You have to have a really good team that can make the right decisions about which experiments to run on this. And then you need to do all the reinforcement learning during post-training well and the test time compute well. It's really hard to do and everybody thinks it's easy, but all those things, you know, I used to have this saying like I was a retail analysis long ago, pick any vertical in America. If you can just run a thousand stores in 50 states and have them clean, well lit, stocked with relevant goods at good prices and staff.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“complexity and keeping the GPUs running at high utilization rate and a big cluster it's actually really hard and there are wild variations in how well companies run gpus if the most anybody because of the laws of physics you know maybe you can get two or three hundred thousand blackwells coherent we'll see but if you have 30 uptime on that cluster and you're competing with somebody who has 90 uptime you're not even competing So one, there's a huge spectrum in how well people run GPUs. Two, then I think there is these AI researchers they like to talk about taste. I find it very funny. Why do you make so much money? I have very good taste.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Anticipate our internal models quickly getting better, and we're going to run more and more of our AI on our internal models. Nope. Amazon. They bought a company called Adept AI. They have their models called Nova. I don't think they're in the top 20. So clearly, it's much harder to do than people thought a year ago. And there's many, many reasons for that. Like it's actually really hard to keep a big cluster of GPUs coherent. A lot of these companies were used to running their infrastructure to optimize for cost instead of performance.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like it's hard to do now, but you can see it beginning to spin. So this is an important fact number one for all of those dynamics. Second, I think it's really important that Meta, you know, Mark Zuckerberg at the beginning of this year in January said, I'm highly confident I'm going to get the quote wrong, that at some point in 2025, we're going to have the best and most performant AI. I don't know if he's in the top 100. So he was as wrong as it was possible to be. And I think that is a really important fact because it suggests that what these four companies have done is really hard to do because meta threw a lot of money at it and they failed. Yanakun had to leave. They had to have the famous billion dollar for AI researchers. By the way, Microsoft also failed. They did not make such an unequivocal prediction, but they bought inflection AI and there were a lot of comments from them that we”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because if a lot of people are asking a similar question, they're consistently either liking or not liking the answer, then you can kind of use that. Like that has a verifiable reward. That's a good outcome. And then you can kind of feed those good answers back into the model. And we're very early at this flywheel spinning.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Scale because of that flywheel. And that dynamic was not present in the pre-reasoning world of AI. You pre-trained a model, you let it out in the world, and it was what it was. And it was actually pretty hard to do RLHF reinforcement learning with human feedback. And you try and make the bot model better and maybe you'd get a sense from Twitter vibes that people didn't like this. And so you tweak it. They're the little up and down arrows, but it was actually pretty hard to feed that back into the model with reasoning. It's early, but that flywheel started to spin. And that is really profound for these frontier labs. So one, reasoning fundamentally changed the industry dynamics of frontier labs.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I would say he was 90% right. I modified the statement. I said foundation models without unique data and internet scale distribution are the fastest appreciating assets in history. And reasoning fundamentally changed that in a really profound way. So there was a loop, a flywheel, to quote Jeff Bezos, that it was at the heart of every great internet company. And it was, you made a good product, you got users, those users using the product generated data that could be fed back into the product to make it better. And that flywheel has been spinning at Netflix, at Amazon, at Meta, at Google for over a decade. And that's an incredibly powerful flywheel. And it's why those internet businesses were so tough to compete with. It's why they're increasing returns to scale. Everybody talks about network effects. They were important for social networks. I don't know to what extent Meta is a social network anymore. It's more like a content distribution, but they just had increasing returns.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“First thing, let me just say about frontier models broadly. In 2023 and 24, I was fond of quoting Eric Vishria and Eric Visria's statement, our friend, brilliant man. And Eric would always say, foundation models are the fastest appreciating assets in history.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I do think this is actually private equities maybe had a little bit of a tough run. Just multiples have gone up. Now private assets are more expensive. The cost of financing has gone up. It's tough to take a company public because the public valuation is 30% lower than the private valuation. So PE's had a tough run. I actually think these private equity firms are going to be pretty good at systematically applying AI.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that people are going to start to care if you have more and more companies print the C.H. Robinson-like quarters. I think the companies that have historically been really well run, the reason they have a long track record of success, you cannot succeed without using technology well. And so if you have a kind of internal culture of experimentation and innovation, I think you will do well with AI. I would bet on the best investment banks to be earlier and better adopters of AI than maybe some of the trailing banks just sometimes past days prologue. And I think it's likely to be in this case. One strong opinion I have, all these VCs are setting up these holding companies and, you know, we're going to use AI to make traditional businesses better. And the really smart VC is and they're great track records. But that's what private equity's been doing for 50 years. You're just not going to be private equity at their game.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. And so ROIC goes down, and you can see like meta, meta they printed, you know, because meta has not been able to make a frontier model. Meta printed a quarter where ROIC declined, and that was not good for the stocks. I was really worried about that. I do think that those data points are important in terms of suggesting that maybe we'll be able to navigate this potential air gap and ROIC.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Productivity that's impacting the revenue line, the cost line, everything. I was actually very worried about the idea that we might have this Blackwell ROI air gap because we're spending so much money on Blackwell. Those Blackwells are being used for training and there is no ROI on training. Training is you're making the model. The ROI comes from inference. So I was really worried that we're going to have maybe this three-quarter period where the CapEx is unimaginably high. Those black walls are only being used for training”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, let's just say a truck goes from Chicago to Denver, and then the trucker lives in Chicago, so it's going to go back from Denver to Chicago. There's an empty load at CH Robinson. It has all these relationships with these truckers and trucking companies. And they match shippers demand with that empty load supply to make the trucking more efficient. You know, they're a freight forwarder. You know, there's actually lots of companies like this, but they're the biggest and most dominant. So one of the most important things they do is they quote price and availability. So somebody, a customer calls them up and says, hey, I urgently need three 18 wheelers from Chicago to Denver. In the past, they said it would take them, you know, 15 to 45 minutes. And they only quoted 60% of inbound requests. With AI, they're quoting 100% and doing it in seconds. And so they printed a great quarter in the stock went up 20% and it was because of AI driven.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it was very important in the third quarter. This is the first quarter where we had Fortune 500 companies outside of the tech industry give specific quantitative examples of AI driven uplift. So CH Robinson went up something like 20% on earnings, which I tell people what C. Robinson does.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“On the cloud. The idea that you would buy your own server and storage box and router was ridiculous, and that probably happened like even earlier. That probably already happened before the first reinvent. The first big Fortune 500 company started to standardize on it like maybe five years later. You see that with AI. I'm sure you've seen this in your startups. And I think one reason VCs are more broadly bullish on AI than public market investors is VCs see very real productivity gains. There's all these charts that for a given level of revenue a company today has significantly lower employees than a company of two years ago. And the reason is AI is doing a lot of the sales, the support, and helping to make the product. I mean, there's, you know, iconic has some charts, A16Z, by the way. David George is a good friend, great guy. You know, he has this model busters thing. So there's very clear data that this is happening. So people who have a lens into the world of vinture see this.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're going to see, I think, something like that in every vertical. And that's AI being used for the most core function of any company, which is designing the product. And then it will be, you know, there's already lots of examples of AI being used to help manufacture the product and distribute it more efficiently, whether it's optimizing a supply chain, having a vision system, watch a production line. A lot of stuff is happening. The other thing I think is really interesting in this whole ROI part is Fortune 500 companies are always the last to adopt a new technology. They're conservative. They have lots of regulations, lots of lawyers. Startups are always the first. So let's think about the cloud, which was the last truly transformative new technology for enterprises. Being able to have all of your compute and the cloud and use SaaS. So it's always upgraded. It's always great, et cetera, et cetera. You can get it on every device. I think the first AWS reinvent, I think it was in 2013. And by 2014, every startup on planet Earth”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“How long it can work for, and you could think of that as being related in some way to context, not precisely, but that just task length needs to keep expanding because booking a restaurant and booking is economically useful, but it's not that economically useful. But booking me an entire vacation and knowing the preferences of my parents, my sister, my niece and my nephew, that's a much harder problem and that's something that like a human might spend three or four hours on optimizing that. And then if you can do that, that's amazing. But then again, I just think it has to be good at sales and customer support relatively soon. And then after that, it has to be, and I think it is already here, I do think we're going to see in a kind of an acceleration and the awesomeness of various products. Engineers are using AI to make products better and faster.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just being able to do things consistently and reliably. It's a hard problem. So I think context windows are a big part of it. You know, there's this meter task evaluation thing.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think we'll see that in more and more domains. But I do think they are already at a level where unless you're a true expert or just have an intellect that is beyond mind, it's hard to see the progress. And that's why I do think we need to shift from getting more intelligent to more useful. Unless more intelligence starts leading to these massive scientific breakthroughs and we're curing cancer in 26 and 27. I don't know that we're going to be curing cancer, but I do think from almost an ROIS curve, we need to kind of hand off from intelligence to usefulness. And then usefulness will then have to hand off to scientific breakthrough just that creates whole new industries.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“But it is like these new models are quite a bit better at helping who should I play? They think in much more sophisticated ways. If you're a historically good fantasy football player and you're having a bad season.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“If you're paying for Gemini Ultra or Super Grock and you're getting the good AI, it's hard to see differences. Like I have to go really deep on something like, do you think PCI Express or Ethernet is a better protocol for scale up networking and why? Show me the scientific papers. And if you shift between models and you ask a question like that where you know it really deeply. Then you see differences. I do play fantasy football. Winnings are donated to charity.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And compare it with your knowledge of the world what you think, what the model thinks, all this context, and it may be that like just really, really long context windows are the solution to a lot of the current limitations. And that's enabled by all these cool tricks like KV cache offload and stuff. But I do think other than scaling loss, slowing down, other than there being low economic returns to ASI, Edge AI is to me by far the most plausible and scariest bear case.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Other than just the scaling laws break. But in terms of if we assume scaling laws continue and we now know they're going to continue for pre-training for at least one more generation and we're very early in the two new scaling laws for post-training, mid-training, RLVR, whatever people want to call it, and then test time computed inference, we're so early in those and we're getting so much better at helping the models hold more and more context in their minds as they do this test time compute. And that's really powerful because everybody's like, well, how's the model going to know this? Well, eventually you can hold enough context. You can just hold every slack message and outlook message and company manual in a company in your context. And then you can compute the new task.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's one really obvious bear case. It is just edge AI and it's connected to the economic returns to ASI in three years on a bigger and bulkier phone to fit the amount of DRAM necessary and the battery won't probably last as long, you will be able to probably run like a pruned down version of something like Gemini 5 or Grok 4 or Grok 4.1 or ChatGPT at 30, 60 tokens per second and then that's free. And this is clearly Apple's strategy. It's just we're going to be a distributor of AI and we're going to make it privacy safe and run on the phone. And then you can call one of the big models, you know, the god models in the cloud, whatever you have a question. And if that happens, if like 30, 60 tokens a second at a 115 IQ is good enough, I think that's...”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's good for sure. But we don't know. And if as humans have pushed the boundaries of physics, biology, and chemistry, the natural laws that govern the universe, then maybe the economic returns to ASI aren't that high.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's this constant fight at every company, one of the factors in the prisoners dilemma is everybody has this like religious belief that we're going to get to ASI. And at the end of the day, what do they all want? Almost all of them want to live forever. And they think that ASI is going to help them with that.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Moving the big recommender systems that power the advertising and the recommendation systems from CPUs to GPUs, and you've had massive efficiency gains. And that's why all the revenue growth at these companies has accelerated. But like, so what? The ROI has been there. And it is interesting, like every big internet company, the people who are responsible for the revenue. Are intensely annoyed at the amount of GPUs that are being given to the researchers. It's a very linear equation. If you give me more GPUs, I will drive more revenue. Give me those GPUs, we'll have more revenue, more gross profit, and then we can spend money”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they would say they regret that. But with Blackwell and for sure with Reuben, the economics are going to dominate the prisoner's dilemma from a decision-making and spinning perspective just because the numbers are so big. And this goes to kind of the ROI on AI question. And the ROI on AI has empirically, factually, unambiguously been positive. I just always find it strange that there's any debate about this because the largest binders on GPUs are public companies. They report something called audited quarterly financials. And you can use those things to calculate something called a return on invested capital. And if you do that calculation, the ROIC of the big public spenders on GPUs is higher than it was before they ramped spinning. And you could say, well, part of that is, you know, OPEC savings. Well, at some level, that is part of what you expect the ROI to be from AI. And then you say, well, a lot of is actually just a”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And their competitors don't. It's an existential risk. And, you know, Microsoft blinked for like six weeks earlier this year.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, just does the model balance. They'll be really good at making models. Do all the books globally reconcile? They'll be really good at accounting. Double entry bookkeeping. It has to balance. There's a verifiable, you got it right or wrong. Support or sale. Did you make a sale or not? That's just like AlphaGo. Did you win or you lose? Did the guy convert or not? Did the customer ask for an escalation during customer support or not? Its most important functions are important because they can be verified. So I think if All of this starts to happen and starts to happen in 26, there'll be an ROI on Blackwell and then all this will continue. And then we'll have Reuben. And then that'll be another big quantum of spin. Reuben and the MI450 and the TPUV9. And then I do think just the most interesting question is what are the economic returns to artificial superintelligence? Because all of these companies in this great game, they've been in a prisoner's dilemma.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“function where there's a right or wrong answer or a right or wrong outcome you can apply reinforcement learning and make the”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and you can just imagine everybody talks about that, but you can just imagine it's on your phone. I think that's pretty near term. But some big companies that are very tech forward, 50% plus of customer support is already done by AI. And that's a $400 billion industry. And then if what AI is great about is persuasion, that sales and customer support. And so of the functions of a company, if you think about them, they're to make stuff, sell stuff, and then support the customers. So right now, maybe you're in late 26, you're going to be pretty good at two of them. I do think it's going to have a big impact on media. Like I think robotics, you know, we talked about the last time are going to finally start to be real. You know, there's an explosion and kind of exciting robotics startups. I do still think that the main battle is going to be between Tesla's Optimus and the Chinese because, you know, it's easy to make prototypes. It's hard to mass produce them. But then it goes back to that what Andre Carpathi said about AI can automate anything that can be verified.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“If I were to deposit like an event path, I think the Blackwell models are going to be amazing. The dramatic reduction in per token cost enabled by the GP300 in the probably more the MI450 than the MI355 will lead to these models being allowed to think for much longer, which means they're going to be able to do new things. I was very impressed, Gemini 3 made me a restaurant reservation. It's the first time it's done something for me. And I mean, other than like go research something and teach me stuff. If you can make a restaurant reservation, you're not that far from being able to make a hotel reservation and an airplane reservation and order me an Uber.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And even if you've made, from my perspective, the best ASIC team at any semiconductor company is actually the Amazon ASIC team, they're the first one to make the Gravitron CPU. They have this Nitro. It's called Super Nick. They've been extremely innovative, really clever. And like Tranium and Infantry, one, maybe they're a little better than the TPUV-1, but only a little. Tranium 2, you get a little better. Tranium 3, it's, I think, the first time. It's like, okay. And then, you know, I think Tranium 4 will probably be good. I will be surprised if there are a lot of ASICs other than Trainium and TP. And by the way, and Tranium and TPU will both run on customer owned tooling at some point. We can debate when that will happen, but the economics of success that I just described mean it's inevitable. Like no matter what the companies say, just the economics make it and reasoning from first.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then it's like, oh shit, I made this tiny little chip and whether it's admitted or not, I'm sure the GPU makers don't love it when their customers make ASICs and try and compete with them. And like, whoops, what did I do? I thought this was easy, you know, it takes at least three generations to make a good chip. Like the TPUV1, I mean, it was an achievement and that they made it. It was really not till TPUV3 or V4 that the TPU started to become like even vaguely competitive.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“And you cannot keep up with us. And then I think what everybody is learning is like, oh, wow, that's so cool. You made your own accelerator as an ASIC. Wow, what's the NIC going to be? What's the CPU going to be? What's the scale-up switch going to be? What's the scale-up protocol? What's the scale out switch? What kind of optics are you going to use? What's the software that's going to make all this work together?”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“But they did bring Media Tech in and the Taiwanese basic companies have much lower gross margins. So this is kind of the first shot against the bow. And then there's all this stuff people say, but Broadcom has a best 30s. Broadcom has really good certies, and certes is like an extremely foundational technology because it's how the chips communicate with each other. You have to serialize and do serialize. But there are other good Certes providers in the world. A really good Certes is maybe it's worth $10 or $15 billion a year, but it's probably not worth $25 billion a year. So because of that friction, and I think conservative design choices on the part of Google, and maybe the reason they made those conservative design choices is because they were going to a bifurcated supply, TPU is slowing down. I would say has the GPUs are accelerating. This is the first competitive response of Lisa and Jinsen to everybody saying we're going to have our own ASIC is, hey, we're just going to accelerate. We're going to do a GPU every year.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of course, they're not going to do that because of competitive concerns. But with TPUV8 and V9, all of this is beginning to have an impact because Google is bringing in Media Tech. This is maybe the first way. You send a warning shot to Broadcom. We're really not happy about.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“30 billion I think is a reasonable estimate 50 55 gross margins so google is paying broadcom 15 billion dollars that's a lot of money at a certain point it makes sense to bring a semiconductor program entirely in house so in other words apple does not have an asyc partner for their chips they do the front end themselves the back end and they manage taiwan and the reason is they don't want to pay that 50 margin so at a certain point it becomes rational to renegotiate this and just as perspective the entire opex of broadcom's semiconductor division is round numbers five billion dollars so it would be economically rational now that google's paying if it's 30 billion we're paying them 15 google can go to every person who works in broadcommi double their comp and make an extra five billion in 2028 let's just say it does 50 billion now it's 25 billion you can triple their comp and by the way you don't need them all”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple of things. So, one, for whatever reason, Google made more conservative design decisions. Part of that is so Google, let's say the TPU, so there's front end and back end of semiconductor design. And then there's dealing with Taiwan semi. And you can make an ASIC in a lot of ways. What Google does is they do mostly the front end for the TPU. And then Broadcom does the back end and manages Taiwan Semine and everything. It's a crude analogy, but the front end is like the architect of a house. They design a house. The back end is the person who builds the house. And they're managing Taiwan Semi is like stamping out that house like Lennar or, you know, DR Horton. And for doing those two latter parts, Broadcomer runs a 50 to 55% gross margin. We don't know what on TPUs. Let's say in 2027, TPU, I think consider estimates maybe somewhere around 30 billion. Again, who knows?”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Versus TPUs and all other ASICs. Now, I think Tranium 3 is probably going to be pretty good, and Tranium 4 is going to be good.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Once Google is no longer the low cost producer, which I think will be the case, the Blackwells are now being used for training. And then when that model is trained, you start shifting Blackwell clusters over to inference. And then all these cost calculations and these dynamics change, it's very interesting. Like during the strategic and economic calculations between the players, I've never seen anything like it. Everyone understands their position on the board, what the prize is, what play their opponents are running. And it's really interesting to watch. If Google changes its behavior, because it's going to be really painful for them as a higher cost producer to run that negative 30% margin, it might start to impact their stock. That has pretty profound implications for the economics of it. The gap is going to expand significantly”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, just any data center that can handle those, you can slot in the GP300s, and now everybody's good at making those racks. You know how to get the heat out. You know how to cool them. You're going to put those GP300s in. And then the companies that use the GP300s, they're going to be the low-cost producer of tokens, particularly if you're vertically integrated. If you're paying a margin to someone else to make those tokens, you're probably not going to be. I think this has pretty profound implications. I think it has to change Google's strategic calculus. If you have a decisive cost advantage, and you're Google and you have search and all these other businesses, why not run AI at a negative 30% margin? It is by far the rational decision take the economic oxygen out of the environment. You eventually make it hard for your competitors who need funding unlike you to raise the capital they need. And then on the other side of that, maybe have an extremely dominant share position. While that calculus changes,”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source
“get a coin. The GB300 is a great chip. It is drop-in compatible in every way with those GB200 racks. Now, you're not going to replace the GP200s, but just power.”
2025-12-09 · Invest Like the Best · Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451] · IDENTIFIED FROM THE TRANSCRIPT · source