B (2:34)

Well, we were talking about Nvidia, intel, everything that's kind of going on in the chip world last time. And Intel's getting some attention. They got some funding essentially from the government, they got investment from some other big players in the market. And then we raised the question of like, what's going on with amd? And we kind of bantered about like, well, we haven't really heard a lot about amd. I wonder what's going on with them. We should follow up with that. And then a couple days later, suddenly there's all this news about AMD investment into AMD. Big deal that they signed with OpenAI is taking up to 10% stake in the company. All this is going on and we really missed our opportunity to have an accurate prediction for the first time. Where we probably could have said something about AMD making their move in the world of AI.

A (3:20)

Yeah, for sure. So as I say, we're going to get into that. The main topic today is really looking at, when we say chip makers, we don't just mean fabs, but anyone who is able to ultimately create a chip. So that includes Apple for example. We're going to get into that. We've got a bit more detail on what's been going on there. I think sort of last month we were postulating on a whole bunch of things. We've got a bit more info now on some of these deals and what's been going on behind the scenes. So that's going to be interesting to get into, but we're going to hit the main headlines. These are things that, as it sounds, they hit mainstream news. So whether that could be like Wall Street Journal or Reuters or Forbes, et cetera. So, yeah, I think a couple of things have come up. Security AI has just been bought for 1.7 billion. What's that about, Sean?

B (4:06)

Yeah, so I saw this actually announced today, actually, since you're in the security world, are you familiar with security AI?

A (4:13)

You know what? I'm not. So that's an interesting. It could be where I am in the world. Maybe we just haven't seen them over here, but yeah. So what are they about, Sean?

B (4:22)

Yeah, so I never used their software. I've seen them around especially when in my prior role, when I worked for Skyflow since we were in the privacy and security space. We would see them at a lot of the same conferences that we were at. They are focused on doing security, sort of privacy compliance, discovery of sensitive data across wherever you're storing data and then being able to actually protect it. And they just sold for $1.7 billion. It was a sizable amount of money to a company I think it's called VM software which, which are. They have a whole bunch of different parts of software like data protection, backups, recovery solutions. I think they're owned by private equity. But Big Chuck going into this kind of shows, I think both of them there's still tremendous amount of momentum in the world of security but also I think specifically with what's happening in AI right now.

A (5:09)

Yeah, it is interesting. This is what I find to be honest, sitting over here in Singapore there are so many companies that just never cross my radar unless someone calls them out because their presence tends to be very US centric. And basically unless you set up a sales office over here, Singapore tends to be the sales hub for at least Southeast Asia. It's interesting that just so many actually quite sizable companies just fly under the radar. Pun not intended. So moving on to another well known company on both sides of the Pacific, LangChain has raised 125 million Series B and at a 1.25 billion valuation. Yeah. What do you think that's sort of signaling?

B (5:50)

I think it's a good thing for people out there building AI companies or interested in the space because it is one of the bigger fundraises and valuations that I've seen for a company that's not one of the model companies or running inference in the cloud, sort of the core infra for building these AI systems or the base foundation models, their certainly an abstraction and layer on top of that they also have good open source routes. So I think this is good sign for open sources, you know, live and. Well, of course they have ways that they're monetizing with hosting AI software and agents directly within their own cloud as well as their observability and eval testing tools and stuff like that. I do come across LangChain a lot. I think they were one of the early companies that really did made a name for themselves in the space when the early sort of large language models were really coming out and they've been able to adapt as well with the market change. Because really LangChain originally was a nice abstraction over top of all these different models where the model APIs were not necessarily that easy to use at the beginning. And then the model APIs have gotten significantly better. More and more have been sort of owned by the model companies and they've been able to adapt into things like Langgraph and adding additional functionality and become sort of more sticky player. All while the model companies like OpenAI anthropic, well, less so anthropic. But OpenAI has also made inroads into offering their own sort of competitive products.

A (7:19)

Yeah, and we've got a episode coming up, probably comes out after this episode with Pydantic AI. So for those that are familiar with Pydantic, they now have another product library, Pydantic AI, that's very much kind of in the same space as this, but they also did raise money for that. And that is a sort of commercial interest as much as an open source interest. So look out for that because certainly LangChain comes up in that episode a bit. Just sort of compare contrast, like the two approaches that are being taken to kind of the same problem around basically agents. So, yeah, look out for that. Moving on, we've got an announcement that a company called Periodic Labs has just kind of come out of nowhere. But who are they? They are one of OpenAI's most respected researchers, Liam Fidus, and his former Google Brain colleague, Ekin Dougis Kubik. I probably completely botched those names, but yeah, this is kind of interesting. 300 million seed round led by a 16Z modest seed round. Yeah, I mean, yeah, I believe as these things happen these days, they being offered checks before they'd even formed a company. So investors were getting nervous because they had nothing actually to invest in. So that's obviously a good place to be if you're about to found a company and you've already got that lined up. But yeah, what is Periodic Lab, or at least what are they saying they're going to be doing?

B (8:41)

So my understanding was they're kind of trying to bring together AI with the physical world. I think one of their taglines is AI gets a wet lab. They're trying to essentially build out a digital scientist in some respects, like DataBricks has their AI, sort of data scientists is trying to offload certain, or be a copilot or offload certain responsibilities that data scientists might typically have to do. In this world of snowflake, you have an AI analyst that offloads some of the analyst work. This is an AI scientist that can leverage AI essentially to do some traditional science work in the real world.

A (9:18)

Yeah, very interesting. I think also interesting. OpenAI. So one of the founders, one of the most respected researchers from OpenAI, but even though I believe when he was leaving, he sort of said, I've got the blessing of OpenAI and it sort of hinted that they would be investing that didn't materialize in the end. Probably for the best on both sides. Perhaps we're going to be getting into just a bit of OpenAI's financial web later on in relation to the chip makers. So Certainly finance for OpenAI is a bit of a open question right now. Moving on. Say we're recording this on the 22nd, 21st of October. We've just had a major AWS outage which, yeah, I'm sure for most of us. Well, I think again, I was in Asia, so Monday, it was my Monday, so it sort of killed the second half of my Monday. But yeah. What kind of actually happened here, Sean?

B (10:10)

Well, I mean I basically took down half the Internet, but I actually got some pings from my old company. Some people that used to be on my team asking for help with the website being down and Monday being a lot of the teams based in India, it was Diwali, so a lot of people were off. So you had this combination of factors and I let them know, well, it's okay, you're in good company because half the Internet's down. It's not just you, but what I understand there was. So basically US east one started experiencing some elevated error rates. Sometime in the middle of the night they started to investigate. It turned out some of these were related to DynamoDB service, which ends up having a lot of explosive damage across all of AWS because a lot of things run on DynamoDB, not just client services, but core services within AWS. So you get this cascading effect. If Dynamo's down, it's not just gonna be isolated to Dynamo, it's gonna essentially impact all these other services. So. So you ended up with people experiencing really slow response times from websites, things just timing out and essentially a ton of services were unavailable for the day.

A (11:19)

And yeah, there's been murmurings that this is effectively related to a brain drain aws. I saw some. I mean, again, I'm not going to say this is a accurate figure, but someone posted it that they'd laid off 40% of their infra engineers and now it's AI trying to do self healing, et cetera, et cetera. Do you think that's accurate? Is that something you're aware of or was there anyone else talking about this?

B (11:46)

Yeah, I mean, I read Corey Quinn's article that he wrote about this for the Register and basically that was sort of the position that he said that, look, they've had a ton of layoffs and as a result, of course good people have also left on their own accord because they're like, oh, this isn't the aws. I remember there's been a lot of public messages from some of those people who left, sort of criticizing some of the decisions that have been made at aws. I don't know about the idea of them being replaced by AI and whether that was a factor, but I certainly think that if a lot of your experienced engineers are no longer there and then you have some sort of outage like this, not only is it probably going to take longer to fix, but could have not happened essentially from the get go because they were experienced enough to recognize either the signs or knew the risks that were being taken that led to this situation.

A (12:34)

Yeah, Corey quinn, sort of Mr. AWS, so definitely look him up if you're looking for some good analysis of all things aws. Yeah, I saw a. Again, I think the timing was real. I don't think this was just a marketing stunt, but David Haneemar Hansen posted that. So he's Basecamp and obviously big Ruby on Rails, founder of Ruby on Rails and many other things. They've been doing quite a push to move away from AWS. They created their own framework called MrsK, so it kind of sounds like Merry Maersk, like the shipping line, so containers. So they've been moving to their entirely self sufficient bare metal server framework. And that day was when they had called like a town hall where DHH was standing up on a little mini stage and projecting to the team that they were closing their AWS account that day. That was like the final, final click off. And this was literally just a few hours after the outage had started. So of course he got exactly what he wanted. Lots of people saying how smart he was on this one. I think it's still going to be interesting just to see because what are the alternatives to Big Cloud? Well, just another Big Cloud, basically. If it's not aws, you're going to GCP or maybe Azure. But if you're not there, then you kind of have to take a basecamp approach of thinking about if you have those requirements. DHH claimed they were paying 3.5 million a year to AWS. And they're not a huge company, Basecamp. They're very profitable, but they're not huge. They're somewhere between 50 to 100 employees. So, yeah, 3.5 million is a big chunk of change. And they just said, we're paying that every year. We can invest that amount of money into something that costs way less and is way easier for us to run, basically. So interesting to watch that one.

B (14:20)

Yeah. I don't know. And maybe that's true for Basecamp. Maybe they have the existing talent, they can run those servers, and that's a good use of that talent and stuff like that. But I think for a lot of companies, is that burden of work really what you want to take on? I definitely think this is an incentive to maybe think about how you protect against such issues in the future of business. Like either not solely dependent on a singular region like US East 1 or multi cloud. There's a lot of different ways that you could potentially approach this problem that doesn't require you stacking and racking your own servers. That might be a little bit extreme as a result of this. The other thing that I thought was interesting that this. And I haven't closely tracked this, but I remember in the early days of AWS, this is over, like 10 years ago, these kind of outages used to happen all the time. It was very common that, like, oh, okay, well, like, US west is down today. And then you haven't really seen that, or at least from my perspective, I haven't seen it on a regular basis for quite a long time. Obviously, this is a huge outage. It was like 15 hours. And even if you said that there was no major outages for whatever number of years it's been AWS and the cloud providers, companies have become more and more dependent on them. They have a bigger, bigger footprint. So there is a tremendous amount of collateral damage when something like this happens, because they end up taking down so many businesses that are ultimately going to be losing probably millions of dollars by not being operational for some period of time.

A (15:45)

Yeah. And I think just to sort of wrap this up, I mean, the fact it was sort of roughly one region, that's actually quite confusing because you can be sitting across the other side of the world and sort of bits of a product stop working. But not all the bits, because it depends where are they doing Smart region on some things. Have they just said other things have to go through US East 1. So it was a kind of confusing down period because, yeah, sort of bits of products were working and nobody really knew. And also in a company slack, some people are affected, some people are not. So it causes a lot of confusion as opposed to just saying, okay, well, this is Just a outed like it's not like a power cut in a city or something where you just say, well, until it's back on, it's back on.

C (16:30)

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A (17:09)

So moving on. Last month we did touch on the private equity buyout of Electronic Arts. And yeah, there was just a bit more color on that one. This was private equity guy Durbin. So he's well known for putting together these massive deals in private equity and turns out that he was the mastermind behind this. We kind of didn't have that color on it before. Also given it was the Saudi Arabian Public Investment Fund. Also since learned that the leader behind that, he's very into gaming, just generally. So we know that that fund is a bit of a pet project. As much as it's called the Public Investment Fund, it very much does follow how the leader of Saudi Arabia just likes to whatever he's interested in. So I think this was a perfect deal where they could get someone who has a lot of money at hand and is actually interested in gaming. We have seen Battlefield 6 come out. It has got pretty good reviews, so I think that's kind of smoothed that one over. We were obviously questioning whether the hype was going to match reality and was that affecting anything. So, yeah, just a kind of interesting extra color there. Finally, Apple, they've actually allowed. So I'm sure people are vaguely aware that Apple had this Glass ui, which I think dropped maybe a couple months ago. And I'm not an iPhone user. I've got MacBook Pro, but I'm not an iPhone user. So this didn't really affect me. I didn't really have to think about it too much. But I'm aware that a lot of people were not very happy about it. And then other people were saying, no, no, this is the future. They're so smart. They're just getting us ready for AR experiences where everything will be kind of translucent in front of your face and so on and so forth. They have announced that they're Allowing a rollback though, of this. Have we seen anything like this from Apple before? Or is this actually the first time we're seeing them admit that maybe a design decision wasn't well received?

B (19:00)

I mean, I think it's pretty rare from what I can recall. I'm not an iPhone user either, but I have been in the past. But I think it's pretty rare that Apple sort of admits that their design decisions aren't one size fits all and we kind of know best for the consumer. So it seems like they're kind of learning. And maybe the backlash was just so extensive in this case that they had to admit, or maybe it signals some larger cultural change. But they're kind of trying to balance the aesthetics with accessibility and they're giving users more control instead of forcing them to have a uniform design. At least in this case. Whether that'll transcend other products or not, we'll have to see. But I haven't seen them do stuff like that previously. Generally it's like, hey, remember that port on your laptop that we said was the best thing ever? Well, we changed it for this new version of the laptop because it's even better and you got to buy all new adapters and new wires and we know best, so just go do it.

A (19:58)

Yeah. I must say I was very happy when they brought back MagSafe to MacBook Pros. At least it was just a very nice piece of technology. But the problem that they, as you call out, they just kept flip flopping between what the form factor of that was as well as, oh, we're going to remove it USB C and then put it back again. So if they just evolved rather than completely yo yo'd around. Yeah. With the liquid glass, they say that you can now have clear or tinted. So I'm afraid I don't really know what that means because again, I don't use an iPhone. But. But if you're an iPhone user, that's possible. Now, apparently one of the only other times they've walked something back in this realm is Safari's address bar moved to the bottom of the iPhone screen at some stage in 2021, people got very angry about that and they had an option to put it back to the top again, even though the bar at the bottom kind of makes sense. Your thumbs are there, but sure, yeah.

B (20:47)

I think a clear background is tough. Depending on what the background is. If you have a busy picture or something like that and then you have, I don't know, a clear notification on top of it. How are you going to be able to read the text. I think that's where it starts to become problematic.

A (21:03)

Yeah. I mean, I think to play devil's advocate, I do get frustrated on as I think most people do on their phone. Icons kind of have all smashed together in this sort of. A lot of them just look the same. Now if I'm reaching for say like Authy, Authian pocketcasts look very similar, red, white, circular. So it's kind of. You have to be quite diligent about organizing your space or just kind of muscle memory, kind of knowing where that app is and you know, it's not on the top or the bottom or something. But I don't think the glass translucent approach fixes that either. It didn't look like it would fix that if I sort of saw screenshots of it. It just looked perhaps even more confusing. But I don't know. Yeah, and just to kind of wrap that one up, they did achieve record iPhone sales this past quarter. So it doesn't seem to have actually affected product sales. It's just that they're sort of at least accepting that a lot of users have pushed back on wanting to take on this new ui. So. Okay, moving on to our main topic. So this is behind the scenes at the chip makers. What's really going on with a whole bunch of companies. So we're going to be looking at intel, we're going to be looking at amd. We will go back to looking at Apple in this lens, Nvidia of course, and then just also kind of looking at where does OpenAI. They're not a chip maker obviously, but they have a lot of fingers in pies of chip makers now. And we just want to kind of understand how are they affecting the landscape. So we're just kind of digging in on details of where everyone's at. Intel. We did touch on them. I think we touched on them maybe even for two past episodes. Just sort of they've been doing deals and having to get back up to financial strength. But I admit I did actually say, oh, they're not too big to fail, they're just sort of too important not to do well. But I think you're much more on the money, Sean. They were actually getting to failure point apparently behind the scenes.

B (22:54)

Yeah, it's crazy to think about. I mean they just were so dominant in the 90s back then. It was kind of a two horse race, but they were just. Almost everything was Intel. And then of course the early Apple computers and laptops were Intel. Now they gone and just started developing their own chip technology and stuff. It just seems like more and more both moved away from intel and then of course with GPUs in the AI era, they're playing some catch up there. So they've been struggling, I think even more than certainly I was aware of.

A (23:24)

Yeah. There was a comment from an ex CEO of Intel, Craig Garrett. He believes that even today, even after deals that they've done, the US government taking 10% and Nvidia investing 5 billion, which obviously isn't actually that much money when you take into account both of these companies, he still thinks that they're going to need about 40 billion injected. I mean obviously he's not part of the company anymore, but he probably has a pretty good idea and has a few back channel information sources as well. So he thinks about 40 billion still needs to be injected into intel to kind of get it back up to where it should be.

B (24:03)

Do you know what have any insights into like where that 40 billion goes to? Is that for, I'm assuming like 40 billion, that's a lot of money. Like they gotta be some physical manufacturing type of stuff that they have to be investing into. I mean there's R and D and stuff like that. But I mean 40 billion is a lot of money. Just of like, hey, we're this far in the hole and we need to inject a lot of money just to play catch up.

A (24:25)

Yeah, I mean I think it's basically because they are being bleeding customers and so, you know, their cash flows are just down and. Yeah, exactly. Where would that money go? Well, yeah, they really need to get back up to actually delivering chips that people want to buy. It sounds really obvious, but that seems to be the biggest problem, that basically the quality of what they produce has just gone down and down. That was obviously the most obvious, I think that affected anyone in software is the Apple moving away from their chips. I mean I had at least two MacBook Pros on Intel Silicon and they were terrible. Like they just, they were so unreliable and I used to have to get, you know, the whole logic boards replaced. It was just crazy.

B (25:09)

I mean that's partly what really hurt BlackBerry back in the day when they were scrambling to try to catch up to the iPhone when the iPhone came out and then they were just delivering like a really subpar product. So even people who are loyalists to BlackBerry were like, this is just not even functional. I can't use this thing.

A (25:26)

Yeah, I mean to maybe you or I, we would have maybe figured out, oh, it's intel that's the problem here. And our kind of perception of Apple doesn't go down massively. We're like, so long as they can get a better product out, it's Apple. We like Apple. But I think a lot of people at that time started just associating Apple laptops as being a bit subpar. And the fan was always on. It was supposed to be the quietest, fastest laptop and it was anything but.

B (25:52)

I mean that's part of the motivation for Google to develop the Pixel, even though they don't really mass produce them to that extent. Part of it was like they wanted to own essentially the entire phone so they could show that you can make a really high end Android phone. It's not like just because it's Android is like inherently wrong. The reason you might end up with an Android phone that doesn't function very well is because maybe some part of the hardware or something like that that was manufactured was not done at a quality level. Level that should have been done at.

A (26:21)

Yeah, exactly. So just to kind of round out what's been going on. Yeah. Pat Gelsinger who was CEO, he was sort of brought back, he was part of the company and then he was brought back in and everyone thought this was going to be the turnaround of intel and it was kind of the opposite. He focused on the CHIPS act which was basically lobbying the US government around. More chips needed to be made in the US as opposed to made overseas. Not to say that wasn't important, but it sounds like he maybe spent a bit too much time and focus on that as opposed to the company itself. Because I think it sounds like he was a bit complacent around where intel was. And this is during the time that Apple moved away and he sort of spun up a bunch of expensive R and D projects and they've all got can now under Lip Bhutan, the new CEO and now they're having to sell off assets basically. So they One of the first things libriturn was sell off 51% of the Altera programmable chip business. That got them 3.5 billion. Again, that doesn't sound like a lot, but I guess you just look at all the dribs and drabs of billions that they're accumulating and sure adds up to 10, 15, maybe 20. It just sort of feels strange that they're having to actually do this kind of stuff like sell off assets and they're Intel. But hey, here we are. So very interesting.

B (27:42)

Yeah, absolutely.

A (27:43)

AMD though this is. Well, I say we missed this Last month. But the point was, last month, I think quite deliberately there hadn't been a lot of chatter about amd, probably because they knew what they were about to announce. And yeah, they've announced that they're doing a big deal with OpenAI. So what are the kind of the terms of that deal?

B (28:01)

Yeah, so it looks like OpenAI is taking up the 10% stake in the company and as a result of that, their AMD stock grew 25%. It's actually kind of crazy how much some association with OpenAI or one of the leaders in the AI space dramatically impacts your public stock price, because those companies are perceived to be potentially probably the future leaders of addressable market of companies out there in the space. We have the FAANG companies and the next generation could be the OpenAI's and anthropics of the world, essentially. So having any name association with these companies suddenly has a dramatic impact on your stock price. And then on top of that, they also announced a deal with Oracle Cloud. They just signed a deal for 50,000AMD AI chips. So there's a lot of recent news that came out with amd. We had talked last time, as we mentioned, what's going on with amd. They seem really quiet and then suddenly they just came out with a whole bunch of stuff at once.

A (29:01)

Yeah, there was an interesting live interview with Lisa Su, the CEO of AMD. And I think it was Greg Brockman at OpenAI, I think he said of product. And it was an interesting dynamic because it's such a huge deal and they were sort of having to talk about what this was even about. And Bloomberg's quite good at that sort of being like, come on, give us real details here. This is all a bit hand wavy. They basically said that they're doing this is 6 gigawatts of AI compute and inference over the term of the contract, which is about. Well, I think it's at least three years, for example, but they think that 1 gigawatt is only going to come online in the second half of next year. So obviously to get to 6 is. Yeah, that's a bit of an interesting stretch there. It was interesting. Lisa Su actually used the phrase we're tied to each other now on Bloomberg and they even commented on that. They were like, that's quite a strong statement. Yeah. So this isn't just sort of, oh, we're investing a little bit here and there. They're kind of AMD. That's the CEO saying, we are tied to each other now. OpenAI is a part of our future. And she said partnerships like this take years to get comfortable. So, yeah, sounds like they really, as you say, Sean, the stock price went up quite a bit. Clearly the CEO sees OpenAI as a huge part of their future.

B (30:19)

Yeah, I mean, it's valuable from AMD's perspective, where this isn't just OpenAI purchasing AMD chips is actually like a true partnership where they're taking stake in the company too. So that way, in some sense, the switching cost is higher because OpenAI actually has stake in the AMD game at this point, where they own shares, they own common stock. So if amd does well, OpenAI does well. But this also goes back to, I think one of the things we talked about last time of just sort of the rinsing of money that's happening in the space right Now. It's like OpenAI gives Nvidia $20 and then Nvidia gives $20 back to OpenAI and then they give that money over to AMD and AMD gives that money back. There's a lot of this kind of repeated transactions that are happening.

A (31:04)

Yeah, exactly. I mean, there are these sort of circular financing concerns across the whole. Yeah, Nvidia invests in OpenAI, but then they use it to buy chips. And that's just going around in circle in quite a few of these companies. So we'll touch on a little bit more of that just at the end of this segment. Just in terms of any other circular things to maybe watch out for, just to sort of wrap up amd, it was interesting, they did clarify that this inference, this compute that's being rolled out a gigawatt and then in theory up to 6. This is not coming out of just AMD data centers. This is AMD chips being placed in wherever they can get them. Basically, they said Oracle are probably going to take a bunch and OpenAI gets compute from Oracle already or Oracle data centers, rather. So. Yeah, again, that sort of adds to the web, if you like. This isn't just sort of AMD able to say, well, we can provide with all our own infra and assets this compute. So still a lot of interdependence, I think, is what's going on here. There has been some collaboration between AMD and Intel. I mean, seems like more on the technology side. I mean, just taking one example, they just announced, it's called Checktag. I'm not obviously a processing engineer, but Checktag, it says, is a set of new and enhanced x86 instructions to detect memory safety violations, such as buffer overflows. And misuses of freed memory. I mean I think yeah we're all kind of vaguely familiar with what that means but interesting that they are actually collaborating like these two are collaborating and I maybe pick up that that's sort of like Nvidia is not invited to the party here and they need to. But yeah, I think interesting how who could be perceived as competitors or actually kind of collaborate on the behind the scenes tech as well.

B (32:56)

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C (33:21)

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B (33:53)

I would suspect that like chip manufacturers they want to get sort of, I mean if you look at like the, you see the explosion of growth and value that Nvidia's had, like I'm sure Intel and AMD from their perspective is like why isn't that us? So they're making the moves to make that happen.

A (34:08)

Yep. And you know, just looking at Apple through this lens I saw kind of an interesting analysis. I don't want to say this was some sort of deep analysis someone had done, but I think it was a good observation which was just that they thought that Apple kind of is playing the long game here. Just launched the M5 chips. I believe I'm getting an M5 today actually it's being delivered so I'm quite excited about that. And it's around the idea of running models locally. Privacy first, not needing to rely on expensive and environmentally unfriendly massive compute in data centers. And everyone's been kind of saying well where is Apple in the AI race if you want to give it that name. And it seems like they're really going for you can run models on our devices and our devices will be best in class at local AI. Is that what you see as well? Sean, do you See it differently.

B (35:04)

Yeah, it seems like that's kind of the market they're going after, which probably makes sense from an Apple perspective. I think they've always been very privacy focused company at least both from like the way that they build software and hardware but also from like a marketing perspective. So if they can kind of try to own the market around, you know, locally running LLMs and they feel like they can get to a place where they have like that's certainly going to be a market like even if you don't get to a place where you're running like GPT whatever, you know, 10 from several years from now, you're still going to be running like probably fairly powerful models locally on these devices. And if that's the future and Apple can go in that, then I would say they're making probably good strategic bets in the long term to do that.

A (35:48)

Yeah. And they've got you know, aiming for developers with Apple's tensor APIs. So this looks interesting because I mean of any strategies when it comes to like running AI, this is the one that interests me the most because I don't like the idea that we have to rely on these far away expensive, polluting data centers. Yeah, it'd be nice that we can actually do a lot of it locally. So. Yeah. And obviously from a privacy perspective as well.

B (36:13)

Yeah. And there's certain use cases that you would want to do locally because like translation for example, if you want to be able to do real time translation, you don't want to have to pay for the sort of the network cost involved in that. Even if it's 100 milliseconds or something like that, there's going to be a lag in being able to create experience like that. You probably have to run that locally.

A (36:34)

Yeah, for sure. And Nvidia kind of what's going on there at the moment is still appear to be doing well in sort of massive air quotes and stock prices generally hovering in a good place or price to earnings for example is still I think around like 50 or something, which is not crazy. I know it sounds probably like 20 years ago that would be crazy but in today's world that's not crazy. That's the same as Shopify for example, but they kind of have a target on their back basically that lots of custom chip alternatives are emerging and there's just such a huge price premium on Nvidia chips and I think this is when there's a huge incentive for other people to come and undercut them and create these custom alternatives. That fit very specific cases for a much lower price point. Jensen Huang, he's downplayed this threat. He says Nvidia provides complete server systems, including GPUs, CPUs and networking products, and not just individual chips. So this isn't apples to apples, but yeah, I don't know. My take on this is I think there's going to be some decrease to Nvidia's market share. Maybe that seems obvious, but I think there has to be and people will be able to create chips that just fit particular use cases better. Is my hot take. I think.

B (37:54)

Yeah, yeah. I don't know. I mean, I think at the same time that there's potentially threats to Nvidia to siphon off some of these workloads and value, there's also this like exploding market that's happening at the same time. So, you know, which is going to. Maybe their growth slows down as a consequence of that, but I don't know that their growth like totally goes away or anything like that. Like, I think they're still going to have a lot of growth. I mean, I think they're trying to bet on their entire CUDA ecosystem and developer tooling to go beyond just being like a chip provider. But they're providing all this other stuff. This is indispensable training, inference at scale. They have a lot of different Lego blocks that companies can OEM as well that want to be able to offer native inference within their, whatever their product is, or even agentic experiences and stuff. You can kind of just pluck that stuff off the, off of the Nvidia shelf and start using it, which isn't something that you're going to get from some of the pure chip manufacturing companies.

A (38:55)

To kind of wrap up this, we were just going to take a very brief look again at OpenAI and how are they influencing and affecting the space as well? We've talked about a bunch of deals they've done. I think the headline here is that they've done a reported $1 trillion worth of AI deals in 2025 so far. I mean, I say so far, but every month here is like a year in past times. So that sort of includes a 300 billion deal with Oracle for computer infrastructure over five years, a 22 billion deal with CoreWeave for data centers with Nvidia GPUs. They're just kind of like spraying cash. And when I say spraying cash, I mean we're talking like signing deals. It's just very unclear how they're going to reach kind of any kind of revenue that can cover these deals. And that just seems to be the concern really. And because these deals have propped up public company prices, stock prices, it's sort of like if a card starts to fall somewhere, how will this affect things? Because it seems like everything is glued together by OpenAI at this point of what are they doing, what is their next product, what next deal are they doing and who's involved. And if you're not involved, then you're nowhere. So it's a little concerning just from a sort of bubble perspective.

B (40:14)

It does have some bubbly features, I would say. Clearly not all these things are going to be able to survive and there's so much attached value to it. We talked about last time OpenAI I forget when exactly it was, but maybe a year ago or so they almost died when Sam Ellman was pushed out. There was a 48 hour period where.

A (40:35)

That seems like so long ago.

B (40:36)

Yeah, it does seem like a long time ago, but like that was a very real situation for 24, 48 hours there where OpenAI their future was pretty questionable. Obviously they come back roaring stronger than ever. But it does show how fragile some of this stuff can be for sure.

A (40:55)

So yeah, I hope that's been helpful to listeners. Just sort of understanding where are all the chip makers today and I guess the whys as well why some of them are where they are today, like Intel. We keep hearing that they're not doing well, but there were some reasons we touched on there. And yeah, we did get to finally talk about AMD having literally live because we sort of were like oh yeah, we've not really heard much about AMD lately and of course something quite big came out. So onto the favorite part of the show, Hacker news highlights as usual. I was trying to find developer off the deep end, so I'll get that one second. First one was actually it's kind of related to the AWS outage and it was the fact that someone posted that they're Postman, which is an API platform where you can send mock requests to what should be pretty local first experience. Turns out that when AWS was down, a lot of Postman was down, which I think is a little bit confusing when you're supposed to be able to run local requests. And as Postman the product has evolved. It seems like a lot goes through a central server these days. Yeah, and just sort of full disclaimer. I got well fed up of Postman. I just found that the UI kept changing around and it's super unintuitive to Set up groups of requests and this kind of thing. And I just did a random search for what was an alternative. And this thing, Bruno popped up and I've been really happy with Bruno. It's very. Just way pared back. It's open source. But yeah, I definitely felt this person's pain when they were like, why, when AWS is down, is my Postman down as well? But.

B (42:33)

But yeah. And actually mine is kind of related to that, which was. Is this post of just use Curl. And It's a website justuse.org curl and the user. I think it's Emerick or something like that, but essentially the gist of it. And they really attack Postman. And it's a little aggressive, but it's kind of funny. But I think the takeaway is like, let's not overthink things. You can use Curl just works. It's on your computer. Like you don't need a whole service for this thing. And I'm actually a fan of Postman, but I think there's still the sentiment of sometimes we can over engineer and overthink these things. If it's as basic as like, hey, I just want to hit this API endpoint with some payload and see what happens. You can certainly do that with Curl. You don't need a whole tool for it. And there's lots and lots of examples of that where we go for something that's like a heavier weight system to do something relatively simple.

A (43:25)

Yeah. I love this post quote. You know what's better than downloading Postman? Not downloading Postman. I think that's a reference to like the social network movie. There's a line of something like that in there. I agree. I agree that there's a ton that you should be able to just kind of get on with Curl and not like worry about a product like a Postman. I have found having a, you know, a product wrapper around it quite helpful for especially things like I do a lot of email testing. So like sending test email requests to a mail server that has to involve like a ton of headers as email does. I'm not really sure that it would be practical for me to like do that all in Curl it just to be able to actually see quite clearly what's being sent and so on and so forth. But yeah, I'm not trying to plug Bruno massively here, but yeah, do try Bruno. So I've just had a nice experience with it. So yeah, second one, this got a huge kudos. Upvote like 1700 at the time of me checking it yesterday, I think it was called bypassing Kindle drm. And I think, I guess this probably just resonated with a lot of people because people do believe if you buy a book, it's yours. There shouldn't be this kind of lock in does seem you download it from the Kindle store, an epub, which is an open format, and yet you try and run that epub on another device like a Kobo, and you can't do it. And this person just kind of got very aggravated by this. It was submitted by user pixelmelt, and I think that's the user because the blog is blog.pixelmelt.dev. and yeah, this was really interesting. I'll try and summarize it very briefly as best I can, how they actually got past the drm. They discovered that every page request on a Kindle is like a randomized Alphabet that gets deciphered, like every single page. So you can't just figure out how they've encoded it and then decode it. It's randomized on every page turn. So they then kind of discover that they had. So then they've also got a whole, in basic terms, for just say 26 characters in the Alphabet. And obviously there's more than that for books in general, but it means you've got five potential things that could be an A and five that could be a B. And they've done these funny ligatures through the letters, so it makes OCR very difficult. So basically what this person ended up doing was getting all the SVG renderings that could possibly be on a Kindle, then did a bunch of character matching and then re rendered the whole book in a new font and then recompiled as an ePub. But yeah, it turns out that removing the DRM is actually a lot about SVG and font rendering, because that's kind of how they've decided to approach this drm. Yeah, it feels crazy. And I'm on the side of PixelMelt. If you buy an EPUB just because you got it from Amazon, why on earth should it only be usable on a Kindle and not anything else? I don't agree with that, especially where.

B (46:28)

The books are generally mildly less expensive than buying a paperback, but not that much. You're buying a digital copy of this thing, which is roughly akin to buying a physical copy of it. And if I have a physical copy of it, I can do whatever the heck I want with the book. So I should presumably be able to have a similar amount of freedom with a digital copy.

A (46:50)

Yeah, it seems crazy. It's like buying a physical book and every time you want to open it, you need this special key from the bookshop.

B (46:57)

You got to use a decipher coder ring or something.

A (46:59)

Exactly. There's no. No, apart from obviously money. There's no logical reason to have that DRM on it. So, as usual, hacker news always giving us some interesting insights as well as developers who find the time somewhere to do these kind of deep dives on things like that. Looking ahead as usual, predictions we've just talked about. The name of the game here is we're usually way off with our predictions, but that's what makes it fun to just sort of compare what might have happened. That's vaguely similar. I'll go first this time. My prediction is related back to the main topic of where are the chipmakers and the OpenAI web. I predict we'll see some concrete reporting on a crack in that web. Just a lot of speculation right now, people saying, well, there's all these deals, but I think we might see something from one of the news outlets who've actually got a bit of information on something concrete on that one. That's my prediction. What are you thinking? That we'll see over what might be easy the next six weeks if we get back to normal scheduling.

B (48:04)

Yeah, this is probably one of my least out there predictions, but I think that after everything that happened with the AWS outage, I think we'll see some announcements of companies making some significant investment into going multi cloud.

A (48:19)

Interesting. Yeah, no, that's a good. Because companies do do that, but probably not enough. Yeah, like the big enterprises do multi cloud because they need obviously that amount of redundancy. But yeah, you're right, we probably don't see enough of it. So. Yeah, cool. That's an interesting one. Let's see what comes up there. As always, thank you for listening to another SED news. We'll be back. Yeah. In about four to six weeks as we get back to sort of the end of the month schedule. But yeah, nice to see you, Sean, and catch up again then. Yep.

B (48:47)

Thanks everyone.