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- [00:02]
A
Massive day today. Tons of big stories. Five big stories I want to go through. Obviously, the first one is that the US jury finds OpenAI CEO Sam Altman not liable to Elon Musk for straying from charitable mission because Musk waited too long to sue. Weird. Like, technicality, I guess. But Good news for OpenAI. Judge confirms verdict. And. And that Musk's lawsuit is dismissed.
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B
Yeah, apparently they deliberated for about 90 minutes.
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A
90 minutes.
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B
And they didn't really make any type of statement other than a statute of limitations.
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A
And so Max Zeff over at Wired says jury unanimously rules that Musk's claims are dismissed on the timeliness issue. He filed the lawsuit too late. Court affirms it will uphold the jury's decision. It's over. Musk loses the lawsuit against OpenAI and Mike Isaac, the Rat King says unanimous verdict in Musk vs OpenAI is in after only 90 minutes of deliberation. So did they deliberate today? They showed up at 9 and went from 9 to 10:30 and then delivered the verdict. Is that what we think happened? Because Friday's off in the jury, right? No, Fridays. Yeah.
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B
Jury showed up this morning.
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A
Okay. Talked.
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B
Talked for 90 minutes, but they get
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A
to think about it all weekend. And Friday, interesting, of course. Rat King says, huge day. Wow. And what did Tyler post? He posted a video of Drake talking about something. What's going on over here?
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C
W's in the shot.
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A
Shot.
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C
W's in the shot.
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A
Is that the song of the OpenAI Slack right now?
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B
I think that's when he is gambling in front of him.
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A
It is a funny way to pronounce chat, but I enjoy it. The big news that was going on all weekend, actually, there was a lot of anticipation for Leopold Aschenbrenner, situational awareness hedge fund, to drop the 13F. It was supposed to go out Friday night, 5pm Everyone was saying, oh, if he. If he's not.
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B
Well, people were expecting it throughout the entire day.
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A
Yeah, they were very excited.
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B
And then there was some speculation that he'd been able to petition to not have to release it.
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A
That was one theory.
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B
That was one theory. The other theory is that he was just entirely in cash.
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A
Yeah. Don't need to report it. Just wind it down.
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B
Said it was a good run. Yeah, it's over.
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A
Yeah. Yeah. He's like, I counted the ooms and there's none left to count. We're done. Pack it up. No, quite the opposite. Leopold Aschenbrenner, the hedge fund's chief investment officer, is known for making extremely successful investments based on his core assumption that frontier AI will continue to improve at half an order of magnitude 0.5 ohms per year, which translates into a thesis that AI will create unprecedented demand for compute and its associated bottlenecks.
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B
John, they're saying it is blindingly light.
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A
It is brighter down, isn't it? Yeah. I think we got some new lights. We're sort of, you know, tweaking things. I do like that the wide is less dark. There's been a number of times we've gone to watch videos and we've been very dark in the front, so we're bringing some light around. We'll see. Maybe. Maybe we overdid it. Maybe we'll dial it back. I need to brush my hair. My hair's a little scruffy today. I also need a haircut, but we'll get to that. Some.
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B
We'll get to that. Later in the show, John will be getting a haircut live on the program potentially. But before we go any further.
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A
Yeah.
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B
I. Nick, over the weekend picked up a little gift for our very own Tyler.
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A
Let's.
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B
So we wanted you to open. Open it on the video. On the video. Nick, hold it up. He waited in line.
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A
Look at this.
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B
Waited in line.
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A
Hey, what do we got for Tyler?
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B
Very long line just for you, Tyler, because. What is it? I'm trying to open it. Wow. It's a. What is. I don't know how to pronounce this. Am I reading upside down? It's a little.
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A
Little.
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B
Watch. Let's go. Thank you.
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A
It is not.
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B
I don't know if you thought it might be. It might have been something else, like the Swatch AP collaboration, but really, like
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A
the whole, you know, everything in the Swatch portfolio is fantastic, including this. I don't know. Describe what's on there. What is on there?
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B
Yeah, Nick, what is it? It has a rotating bezel.
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A
That's right.
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B
Oh, he says has a rotating bezel. Okay. But just to be clear, it's not the.
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A
It's not the Royal Pop, which was completely sold out and causing, like, stampedes all over the country. All over the world. I saw footage, I think, from an international country around people really mobbing it.
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B
You.
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A
You were mentioning that you thought it was maybe an aura loss for both companies because of the craziness.
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B
Yeah, I just.
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A
Your brain is now associated with chaos. That's not good. Right? And ap, although it's exclusive, like, you have to sort of wait in line. The waiting in line is like, here, have a Diet Coke and sit in this private room while I tell you that you will not be getting an allocation in the skeletonized ap.
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B
Come back soon.
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A
Royal Oak or whatever. Right. Come back soon. And it's a very high brow. Waiting in line.
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B
Yeah.
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A
And this was.
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B
Yeah, they had to come out over time and say, these are not going to be limited, we're selling them a lot. And so the people that wait in line just to sell on the secondary market, I think have done pretty well, at least in the short term. I would expect that over time prices will sort of retrace toward retail. I did see a funny graphic of somebody that was basically saying comparing getting a job versus waiting in the line to get it. And you actually did quite a bit better if you just got a job on Monday instead of getting. Yeah. And then over time, you know, your earnings really ramp out.
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A
Let's go back to Leopold aschenbrenner and his 13F, the infamous 13F. There's a lot of discussion around it on the timeline. Really. Like we have not seen this level of attention on a hedge fund's filings in a very long time because it's breaking out of Fintwit, it's breaking into Tech Teapot and Techx and all of that. Mostly because a lot of the discussion centers around the filing shows he's made some massive puts across the semiconductor sector. 2 billion on SMH, the Vanex semiconductor ETF. And so it feels like maybe more of a pointed thesis, less broad, hey, semiconductors are going to do well. More. I actually me, Leopold in this case understand where the real value is, what companies within the semiconductor industry are undervalued, which ones are actually going to be useful in the next iteration of the build out. And a lot of stuff has been priced very hotly. Some stuff is overheated. The Nvidia trade for a while became like crushingly obvious and then it grew so much that that was not one of his early positions. Now it is looking like he is going long Nvidia, which is interesting in the backdrop of. Is Nvidia a car? Do they still have a moat? Well, there might still be something else going on there. You have to dig in through this and understand what's going on. But the filing is hard to interpret Cleanly because a 13F is only a snapshot of holdings as of March 31, 2026. These positions are stale. You might have rotated out of these 13Fs do disclose put and call options. They don't disclose the strike prices, expirations, premiums, paid hedge ratios, short position swaps, or whether the options are part of broader structures, so you have to be careful out there. If you're trying to read the tea leaves too precisely, you can only take away so much from these. So Fei Zhao I don't know how to pronounce that says unfathomably bad. Takes around this morning and a good reminder of why 13F digging is mostly a waste of time. March 31 we were in the heat of the Iran war. Makes sense to put on hedges at the time. Options exposure on 13F gets quoted notionally as if it were 100 Delta, that is all 100 shares per contract. So when you see something like oh he owns a billion dollars at intel, it's usually he owns the right to purchase a billion dollars of intel and he has actually deployed far less capital into that position. Although it is sometimes an important sign of things to come, we have no way of knowing whether these were five delta convexity hedges. Convexity hedges and represented a fraction of what people are saying were billions in puts or whether they were ITM puts in the money puts. Further outright shorts don't get reported either. Too much noise associated with the things that happened back in March that aren't relevant now. We have no idea about his turnover in assets and trade frequency. A lot happened in the months of April and May. His positioning could be completely different. Making investment decisions for 80 volume assets based on data from months ago sounds like a good way to burn money. So don't idolize people and develop your own thesis for why you own and sell things. That is a good takeaway. Anyway, the AI backlash is continuing in a bunch of different ways and one interesting sort of twist on this is that a lot of the AI maxis, the AI bulls, were sort of concerned at least that this would all be fossil fuel based build out because everything else was too slow. They might be, they may be fans of nuclear, they might be fans of solar, but it was seen as infeasible, seen as the timelines being far too long. So if Leopold is inf fact taking a position in T1 energy, that sort of leads me to think that there's a little bit of a shorter timeline to at least bringing some solar power to bear during the AI buildout, that it's not all just sort of a hope and a dream that there will be solar power on the grid in any near amount of time. A lot of the nuclear power companies are moving on the backs of the AI buildout but. But it's still 2032. You know, when we talk to these folks, even the optimistic ones. So there has been big pushback on AI data centers across the board. We've talked about this a bunch and it's both a left and right wing issue. Now. Sagar and Jetty predicted this, I think last year when he joined our show, and it's been interesting. Left wing is worried about job displacement, theft of art, destruction of creativity. Right wings sees them as surveillance centers. That's the latest term is that they're, they're, they're used to spy on people. So that's an anti libertarian, anti right wing position. But there are a whole bunch of others. Just this hollowed out coal town is voting right wing and then data center comes to town and they see it as, you know, just making their town worse off and benefiting. Like the coastal elites and like the
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B
people have flagged too that both sides are using AI to create graphics to oppose data centers.
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A
That's true. Yeah. There's all these like deep ironies. There's. There was a whole piece on someone who's protesting data centers and using a lot of AI to research how she can push back.
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B
Gabe says data centers need to be rebranded to Data Ranch.
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A
Data Ranch. I like a Data Ranch. That's a good one.
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B
Aux, we got AUX powered.
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A
Oh, interesting. Salty says that Leopold sold Blue Energy in the latest 13F. So trimmed or trimmed. So if that's, if that's the case, then there you go. The latest debate that I saw was over this huge data center in Utah that's being championed by shark tanks. Mr. Wonderful, Kevin O'. Leary, are you familiar with this whole thing? Yeah, someone dug into like the plan and the plan actually seems pretty reasonable. But Mr. Wonderful is a, he's sort of an over the top caricature of a businessman. Like he plays one on tv. He is a real businessman, but he also plays a businessman on tv. And so he's a bit of a soft target. Like he was recently seen sporting not one, but two expensive watches. Not unlike Tyler Cosgrove over there. He went to the Oscars wearing a Cartier crash skeleton and a ruby Rolex or Daytona. And I believe he also had a, like a trading card around his neck. So very ostentatious, very over the top, a very soft target. If you're looking for someone to target in like a. He's doing it for the money, you know, like it's pretty, pretty easy. And so if you want to paint data center construction as maybe not in the best interest of average Americans, Kevin o' Leary is going to do a lot of That a lot of the heavy Mr.
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B
Wonderful, in the context of developing large scale infrastructure that people are afraid of, sounds like a super villain too.
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A
Yes. And also like you can put this in contrast to Eric Schmidt or Tim Cook, where the previous generation, like the major hyperscalers, like the big tech companies, they've done a pretty good job building a lot of infrastructure, making really, really bold climate pledges saying we're going to be net zero by this year. Our data centers are really clean. They built a lot of data centers without really any disruption. There was no backlash to Google Cloud through 15 years or 10 years of building AWS.
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B
And so now neither of them were rocking dual iced out.
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A
So you make the case for quiet luxury. The quiet luxury of a Tim Cook or an Eric Schmidt.
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B
Definitely.
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A
Yeah. I mean, in this case, no.
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B
I think Mr. Wonderful is not the guy to be the face of.
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A
Potentially not. But apparently his actual data center plans are reasonable. It actually seems pretty by the book. According to current plans, it's in a remote area, it uses its own power and water, and it doesn't seem to disrupt any local communities. We can pull up this video from Quick Thoughts that has a little bit of a breakdown.
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C
Million views complaining about a giant data center in Utah. And I'm kind of confused by that because I would think that an uninhabited desert valley in Utah is the perfect place to build a giant data center.
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D
I've been following really closely what's happening in Box Elder County, Utah, where Canadian billionaire Kevin O', Leary, who's Canadian, that's a big data center. A $100 billion project. Okay. This would be the largest data center in the world at over 40,000 acres. And at full capacity, the data center, which is called the Stratos project, is set to use 9 gigawatts of electricity.
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A
Gigabytes. You saw that.
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D
Double the entire amount of electricity used by.
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B
Well, she said, she said it correctly.
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C
The data center is built.
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A
Yeah, yeah, but, but, but the transcript said gigabytes, which is funny. AI fails again. We need another data center to fix that.
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B
Steve in the X Chat says TVPN Studio uses the equivalent of 23 atomic bombs and energy to produce niche technology content.
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C
They are buying water rights of the current property owners. So the current property owners are using water for agricultural irrigation. The data center project buys that land, buys a huge.
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A
So he makes this sound good, but then it's like, wait, are we going to have less food? That doesn't seem that good. The point is, is that he's not taking it from like someone who is going to be paying water or some local community. It's like there's already water rights there that are staying in that valley.
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C
It's not drawing power from the grid. If we look at electricity consumption by state, we can see that Utah just doesn't use that much electricity compared to other states. There are plenty of states that use double or triple. Tennessee is about triple. Pennsylvania four times. Texas is like 10 times more than 10 times what Utah uses though if over the course of this project they reach their goal and they double or triple Utah's electricity usage. So why is that bad? It's not incurring more cost to the people of Utah because they're building their
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D
own power plant by Utah as a whole. Robert Davies, a physics professor from Utah State University, says that he actually thinks the project will require an additional 7 to 8 gigawatts of waste heat energy, Meaning that the project in total will be 23 gigawatts of total thermal energy, which is the equivalent of dropping 23 atom bombs in Utah every single day. Also, let's.
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C
Okay, electricity generation across every state is going to have that same thermal load property. Not every generator is perfectly efficient, so they're going to generate waste heat as well. So if you say, okay, we're going to have 23 atom bombs a day worth of electricity going off and in Utah, well then currently we have 230 atom bombs a day going off in Texas.
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A
You got to put everything. Hundreds more atom bomb comparison. Like your car is like the size of like five atom bombs. Like an atom bomb is like maybe this big. Maybe a little bit bigger.
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B
Yeah.
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A
Your car weighs as much as seven atom bombs. It makes it sound so much more like weighty. When you're like just comparing everything to atom bombs.
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D
Night temperature by 20.
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A
This is actually pretty crazy. 28 degrees feels like a lot.
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C
Daytime temperature could increase 2 to 5 degrees throughout Hansel Valley. Not the state of Utah. The valley where the data center is being built. Same with nighttime temperature. Could increase up to 28 degrees. Trapped in the valley. Hansel Valley is an uninhabited desert valley. So if you build a big power plant here and a big data center here, maybe it'll increase the temperature of this valley by 5 degrees. But okay, nobody lives there. I think this project solves a lot of people's stated concerns with data centers. You're worried about water usage. They're reallocating agricultural water to cool the data center. Worried about power cost.
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B
They're building their own mind is not helping.
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A
But I like vegetables.
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C
Desert valley where it's already hot and you're worried about. This is such a huge project. This is a giant data center or something. World's biggest data center. Well, that's just data centers that don't have to be built in other places that are being built in this uninhabited desert valley. I think the concerns in her video are just fear mongering for reasons that I hope I've explained here. Thanks for your time.
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A
I guess the question is they say that there's water for agricultural usage right now in that valley, but the valley's uninhabited and it seems like a desert, so it doesn't seem like they're growing food there. Where is that water actually going? Because is it just getting piped to some other farm like far away or was it like they were way, way,
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B
way back in the day? Way back in the day you could just have a piece of land, you could drill a well and you could pull up as much water as you wanted.
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A
Yeah.
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B
And then people realized that if you have a property here and there's property here, here, here, here, here, they're oftentimes all pulling from the same aquifer. So you all of a sudden, if you come in, you move in next to me and you start pumping billions of water.
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A
I drink your milkshake.
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B
Yeah, you're drinking my milkshake.
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C
I drink your milkshake.
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B
I drink it up. And so it's very possible that all these parcels of land which they collectively bought, they all have their own water rights. That doesn't mean they are being used. Right, so because people will sell their water rights to like a neighboring property. That is.
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A
But my question is like, sounds like they sold the water rights previously or they had some sort of deal to send the water that they were getting out of the desert, which I can't imagine produces that much water, but I guess it does use it for like agricultural purposes. Like what were they growing?
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B
Well, agricultural could mean you have some, like you have some cattle. Like there's a. But there's a bunch of different potential meanings for that. It doesn't mean you're growing fresh produce.
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A
But were they actively using or were they just like.
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B
No, that's the other thing. That's the other thing too. It could have been agricultural land.
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A
Yeah.
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B
But not.
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A
Could have been like a failed farm, it's not farming anymore. Like a former livestock, like farm. Something like that. But I don't know. These points, like as you said, I think are going to be hard to break through just because AI is so deeply unpopular for a variety of reasons. And we should watch the video of Eric Schmidt getting booed on stage at University of Arizona. He says, this is incredible. Artificial intelligence getting booed out of the stadium in any commencement speech. It's mentioned in maybe telling college students AI was taking their jobs wasn't the best strategy. Let's watch this clip.
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B
The architects of artificial intelligence.
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A
Interesting. The question is whether you will help shape artificial intelligence. We do not know. We do not know the precise contours of what this. If you'd let me make this point, please. Step one, get. If you're giving commands and proceeds, you got to bring a soundboard. You got to be like, AI yeah, it's not that bad. But also, I hear you. Looting the perspective of the immigrant who has so often been the person who came to this country. They're really going crazy. We thought that we were adding stones
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B
to a cathedral of knowledge humanity had
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A
been constructing for centuries.
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B
There's just a low level boo the whole time.
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A
It's so rowdy. Like, normally you think there'd be like a little bit of boo and then they just like, get. Quiet down. Okay. Is about to turn into a riot. This is crazy. Did he just bail on this thing? No. Your agency we have only seen at this point, I mean, you got to go off script.
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B
You could. You.
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A
You can't stay.
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B
It is funny that if you cut it up in the right way, you could make it seem. Sound like the most like you will surrender your agency.
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A
Yeah. The big thing is like, I don't know that that is like, everyone is booing for a slightly different reason, but it's like this ensemble of problems and grievances with AI generally. Like, one thing that I'm. That I've been, like, frustrated about is everyone is vibe coding, like 24 7, leaving MacBooks open, talking about, like, productivity, and yet the, like, the magical moments. The consumer technology has been, like, completely left behind. There was a time when we got the cloud. We were building a lot of data centers, but every year you'd get like, a cool new thing. Like, Yelp would come out. And it was like, it wasn't changing the world, but it was like, oh, you could find a cool new restaurant and maybe like. Or Groupon. Like, Groupon was like, not a great business ultimately, but, like, for the first couple months of Groupon, you could, like, go try a restaurant for like, half price. And it just felt like magical. Or like Uber. When that came out, it was like, wait, I can go out and call a taxicab service. Maybe it comes. Maybe it doesn't stand outside in the cold, try and flag a car.
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B
There were all these places, do you think they were like angry at usage? Nano banana usage limit?
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A
Probably. Probably that.
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B
Is this whole thing just a misunderstanding?
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A
They might think we're in a plateau and they might just be upset with the lack of progress outside of coding domains. Yeah. The writing is just still not that good on any of these models.
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B
I can clock it.
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A
Yeah. It's still clockable. Yeah.
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B
Yeah. At first I thought they were mad that like at Google, Eric Schmidt was. He was doing too many, you know,
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A
stock buybacks and investing too much cash. Technology. Yeah. Having 100 billion on the balance sheet and cash is just unacceptable. Like, yes, you get Waymo. Yes, you get DeepMind. Yeah.
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B
Because it just shows they don't know what to do with the money.
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A
Yeah, yeah. They weren't innovating for a long time. And that makes a lot of sense why you would boo them sort of. The tealian.
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B
The tealian boo.
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A
Boo.
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B
Just in those handful of sentences like, is that. That felt like a speech more potentially like oriented towards maybe like the Stanford student body, which is like, how are you going to contribute to AI? That's what I was like, that's what was standing out to me, being like, don't be afraid of this thing. Like, jump in and help shape it.
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A
Yeah.
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B
And if you're maybe someone in Stanford.
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A
Yeah.
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B
And you have the opportunity to go actually be involved and you're at the epicenter of all this progress, maybe that would land.
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A
Yeah.
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B
But at U of A where people are hearing like, hey, all the different career paths that I'm.
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A
I would prefer, in terms of commencement speaker. I would prefer someone like a Sam Sulek to give the commencement speech. People don't want other stuff built. Generally, like there's very, there are very, very few things that people are like, yeah, I'd be down for that to be built. People like the status quo. They're happy with things as they are and they don't like change. So, like anything new is going to be like somewhat unpopular as nuclear power was not building out. Nuclear power 50 years ago was of course, one of the greatest mistakes humanity has made and that contributes directly to data center opposition today. Given questions about the impact on energy bills, we have to do this another time. But did we run out of nuclear scientists? Was that what stopped the build out? Did we not have enough geniuses? I don't know. Maybe we'll dig into it.
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B
People are saying homes in the chat. But then again, people don't really want more homes in their area. Once they already own a home, they
- [24:54]
A
block them all the time. They block home construction all the time. And also permitting and also expansion of existing homes. These things. I'm not saying that they're like as unpopular as data centers. No way. Data centers are at the bottom. But homes are something, maybe in the abstract, but like, new housing in communities is like razor's edge. 50, 50, 60, 40. Like, it's like there is a lot of opposition to building just in America, broadly. Like, that's just the nature of our society. So Ben Thompson has some solutions, though. What do you got to do to build a data center properly? He says. First, this sounds obvious, but tech needs to fix its messaging problem. The issue, and if an answer seems obvious, then there surely must be some other problem at play, is threefold. First, a good number of people in tech, particularly at one of the leading labs, genuinely believe most jobs are going away. They could lie more effectively. But beyond being dishonest, it's also a betrayal of the fanatical devotion with which they are pursuing AI despite obstacles, including the challenge of spending billions and billions of dollars on models that are obsolete in months, if not weeks. Second, it is extremely hard to describe the benefits of inventions not yet made, cures not yet discovered, economic activity not yet engaged in, et cetera. This is always the burden of those arguing in favor of progress. And the sheer potential of AI actually makes the problem even harder. 50 years ago, everyone was like, electricity isn't that expensive. Why do we need to build nuclear power plants? They're scary. And now electricity is expensive, and we're like, oh, we should have built those. That's the way these things always go. Third, tech is and always has been terrible at understanding and relating to the rest of society. I go back to how Silicon Valley was extremely skeptical of Facebook, a company predicated on connecting with friends and family, precisely because it's filled with people running away from their friends and family. You can optimistically say that people in tech live in the future. You can also more cynically say they live in opposition to and denial of humanity, for better and in this case, for worse. Second, tech could control the misinformation. TikTok is a major point of this. He talks about how the algorithm is still controlled by the Chinese, and maybe there's misinformation there. Second, in a rather ironic twist, Meta has learned the lesson of trying to control misinformation. Doesn't want to overtly censor, but now the company gets no credit for not censoring misinformation about data centers. And so. So it's like this weird thing. And then third, this was a wildcard, which I didn't think of. But X is the social media platform X and Twitter, formerly Twitter is actually incentivized to be anti data center in a weird way because X is owned by SpaceX. And a big part of SpaceX's upcoming public offering is the possibility of building data centers in space. This is like total tinfoil hat, I think. But it's an interesting like, okay. And he says to be clear, he hasn't seen any evidence of thumb on the scale or not. I certainly haven't. But part of the problem though is that we would never know if there were. He goes on to propose something very, very bold. Very, very bold. He says instead, the most obvious solution is the most crass. Simply start giving people money. Not universal basic income, though. If data centers are a resource for our AI future, then start paying people for that resource. If that data center up the road weren't sold to my neighbors based on amorphous data tax benefits that my local government may or may not spend appropriately. And I was talking to Tyler about this earlier, but rather were to result in a check in the mailbox every year, I suspect you could get a lot of people on board. So he put some numbers together and he says, for the data center up the road, it was expected to be 1.6 gigawatts, which could generate around $3 billion in annual operator revenue. DeForest, the village it was to be built in has around 11,500 people. So you could pay every person in that village $10,000 a year, and it would only equate to 3.8% of annual revenue grossed by the data center. And he says, I bet that that proposal would have been approved. And I bet the operator could very easily pass on those costs to actual data center users. It also highlights how relatively pathetic the the original commitment. I think the data center said, hey, we'll give you 50 million, which is like nowhere near what that math works out to. So data centers coming to town, you get to vote for it. But the data center company says, hey, we'd like you to vote for this and we will give you a $10,000 check in the mail every year forever while we're operating this. And that seems like that could actually get people on board. So this is ridiculous.
- [29:29]
B
This goes back to even months ago at this point we were saying, you know, AI is not a. Is not like a, you know, natural resource where you benefit from having it in your backyard, right? If you're just an everyday AI user, you do not care where the data center is at all. And so if someone is coming to put it in your community, it's pretty fair to want to benefit from that in some way. And like a direct payment like that, I think. I'm sure that will happen more.
- [30:00]
A
And we will see you tomorrow.
- [30:01]
B
Have a wonderful evening.
- [30:03]
A
Goodbye.