BG2Pod Episode 17: Welcome Jensen Huang Hosted by BG2Pod with Brad Gerstner and Bill Gurley

Podcast Information:

• Title: BG2Pod with Brad Gerstner and Bill Gurley
• Host/Author: BG2Pod
• Description: Open Source bi-weekly conversation with Brad Gerstner (@altcap) & Bill Gurley (@bgurley) on all things tech, markets, investing & capitalism
• Episode: Ep17. Welcome Jensen Huang | BG2 w/ Bill Gurley & Brad Gerstner
• Release Date: October 13, 2024

1. Introduction and Setting the Stage

The episode opens with Brad Gerstner welcoming Jensen Huang, CEO of NVIDIA, to the Nvidia headquarters. Brad expresses gratitude for Jensen’s presence and highlights the importance of their annual investor meeting focused on the implications of Artificial Intelligence (AI) and scaling intelligence towards Artificial General Intelligence (AGI).

Notable Quote:

• Brad Gerstner [01:01]: "We have our investor meeting, our annual investor meeting on Monday where we're going to debate all the consequences of AI, how fast we're scaling intelligence."

2. Scaling Intelligence and the Journey Towards AGI

Brad initiates a thought experiment by envisioning AGI as a personal assistant with perfect memory and the capability to handle tasks autonomously. Jensen responds optimistically, indicating that such personal assistants are "soon in some form" and will progressively improve over time.

Notable Quotes:

• Brad Gerstner [01:26]: "If I colloquially think of AGI as that personal assistant in my pocket... when do you think we're going to have that personal assistant in our pocket?"
• Jensen Huang [02:16]: "I think in the beginning it'll be quite useful, but not perfect. And then it gets more and more perfect over time."

3. NVIDIA's Competitive Advantage and Moat

The discussion delves into NVIDIA’s deep competitive moat, which extends beyond superior hardware to encompass a comprehensive software and hardware stack. Jensen emphasizes that NVIDIA’s real strength lies in its ability to innovate across the entire computing stack, driving costs down and enhancing performance exponentially.

Notable Quotes:

• Jensen Huang [03:01]: "We drove the marginal cost of computing down by 100,000x over the course of 10 years... a super Moore's Law rate of innovation."
• Clark [06:03]: "One of the most misunderstood things about NVIDIA is how deep the true NVIDIA moat is."

4. Inference vs. Training in AI Workloads

Brad and Jensen explore the differences between training AI models and inference (deploying models for use). Jensen explains that while training was once considered the more challenging aspect, inference has now become equally, if not more, complex due to the need for real-time processing and reasoning.

Notable Quotes:

• Jensen Huang [05:31]: "Now we're seeing scaling with post training and we're seeing scaling at inference."
• Brad Gerstner [58:09]: "Over 40% of your revenue today is inference. But inference is about to go up by a billion times."

5. Custom ASICs and Competitive Dynamics

The conversation shifts to the emergence of custom ASICs (Application-Specific Integrated Circuits) from companies like Amazon’s Trainium and Google’s TPUs. Jensen clarifies that NVIDIA’s strategy focuses on building a universal AI computing platform rather than competing on specialized chips, positioning NVIDIA as a market maker rather than a share-taker.

Notable Quotes:

• Brad Gerstner [21:32]: "Custom ASICS that are being built... do any of those things change that dynamic or are they complements to the systems that they're all buying from you?"
• Jensen Huang [24:22]: "NVIDIA is a market maker, not share taker."

6. OpenAI Partnership and the Role of AI Models

Brad highlights the significance of OpenAI raising funds and its rapid revenue growth, comparing it to early-stage tech giants. Jensen lauds OpenAI as a consequential company driving public awareness and usage of AI, emphasizing the transformative impact AI has across various industries.

Notable Quotes:

• Brad Gerstner [38:56]: "OpenAI raised $6.5 billion this week at a $150 billion valuation. We both participated."
• Jensen Huang [40:03]: "This is one of the most consequential companies of our time, a pure play AI company pursuing the vision of AGI."

7. Safe AI and Regulatory Coordination

The podcast addresses the critical issue of AI safety and the role of regulation. Jensen advocates for a multi-faceted approach to AI safety, integrating various AI systems to monitor and align each other. He emphasizes that regulation should be specific to applications rather than enforcing a one-size-fits-all model.

Notable Quotes:

• Jensen Huang [68:51]: "AI created to align AI, synthetic data generation AI to expand the knowledge of AI to cause it to hallucinate less... all of that, all of the harnesses that are being built at the velocity that's been built is incredible under celebrated."
• Brad Gerstner [71:00]: "Regulation. Remember, AI is a capability that can be applied and it's necessary to have regulation for important technologies."

8. Open Source vs. Closed Source Models

The discussion touches upon the balance between open-source and closed-source AI models. Jensen supports a hybrid approach, recognizing the necessity of open-source models for innovation across industries while also valuing closed-source models for sustaining economic engines.

Notable Quotes:

• Jensen Huang [74:23]: "Open source versus closed source is related to safety, but not only about safety. It should be both open and closed."
• Brad Gerstner [73:27]: "How do you feel about your own open-source models' ability to keep up with Frontier?"

9. NVIDIA's Culture and Productivity

Brad and Jensen discuss NVIDIA’s unique corporate culture, which emphasizes efficiency, flat organization, and leveraging AI to enhance creativity and ownership. Jensen envisions a future where AI acts as a digital workforce, significantly amplifying productivity without proportionately increasing the number of employees.

Notable Quotes:

• Brad Gerstner [60:55]: "You've built a culture of efficiency that really has unleashed creativity and innovation and ownership and responsibility."
• Jensen Huang [62:14]: "AI will change every job. AI will have a seismic impact on how people think about work."

10. Future of AI and Computing Infrastructure

Jensen shares his vision for the future, where AI drives a new era of computing infrastructure. He underscores the importance of modernizing existing data centers to support AI workloads and anticipates the need for distributed and federated learning systems. Jensen is optimistic about sustained growth and relevance through continuous learning and adaptation aided by AI.

Notable Quotes:

• Jensen Huang [33:02]: "We're reinventing computing... the new infrastructure are going to be AI factories that operate these digital humans."
• Brad Gerstner [37:23]: "Is there any reason your revenue doesn't [continue to grow exponentially]? No."

11. Conclusion and Reflections

As the episode wraps up, Brad and Jensen reflect on NVIDIA’s journey and the transformative role of AI in enhancing productivity across industries. Jensen expresses his unwavering passion and optimism for the future, driven by continuous learning and the strategic integration of AI within the company.

Notable Quotes:

• Jensen Huang [80:31]: "I had great time. I couldn't imagine anything else I'd rather be doing."
• Brad Gerstner [80:42]: "It's the most consequential moment of our careers. We're deeply grateful for the partnership."

Key Takeaways

• NVIDIA’s Strategy: Beyond hardware, NVIDIA builds a comprehensive software and hardware ecosystem, maintaining a strong competitive moat.
• Inference Dominance: Inference workloads are set to grow exponentially, potentially outpacing training in revenue and impact.
• AI Partnerships: Collaborations with entities like OpenAI are crucial in driving AI adoption and innovation across industries.
• Safety and Regulation: Emphasis on multi-layered AI safety mechanisms and the need for application-specific regulation.
• Open vs. Closed Source: A balanced approach is necessary to foster innovation while sustaining economic viability.
• Future Vision: NVIDIA aims to lead the AI revolution by continuously evolving its computing infrastructure and leveraging AI to enhance productivity and creativity.

This episode provides an in-depth exploration of NVIDIA’s pivotal role in the AI landscape, Jensen Huang’s visionary outlook, and the broader implications of AI on technology, markets, and society.