20VC: Jensen Huang Declares AGI Has Arrived | GPT Astra and Fable 5.1 Accelerate the Model Race | Tesla Launches Cybercabs | Index Pulls Out of Town & Anthropic Pulls From Descartes Acquisition
Jensen Huang on The Twenty Minute VC.
Passages
There's going to be no financial math you can use to buy the stock. When someone goes risk on, everyone goes risk on. I would imagine as we speak, there are 20 engineers locked in a room somewhere in Palo Alto, literally with guards on the door saying, nobody eats and nobody leaves until you ship Instinct Clone. Now it's just a, that's a Series C round. There was a free 10X in the public market in three years there on Robinhood. In this market, the people who are making the money are the people who are just running fastest and evolving quickest.
SPEAKER_02Check at the sourceYou know, in the old days of venture, that was troubling. We are wasting content here, people.
SPEAKER_02Check at the sourceWell, hang on. You have examples both ways. Because you're right, Jason, the LinkedIn scraping in the end, no business at scale ever gets built on that. And no business at scale ever gets built on breaking Google's terms of service. On the other hand, Uber blustered their way through, broke the laws, and eventually it was so popular that politicians folded. So, you know, the truth is I've learned that there's no one answer here, right? Like the Resi example. And just for you listeners, what happened is that the instinct agent, one of the classic use cases for this is getting reservations at hard to get restaurants. So a whole bunch of people started using it over the weekend and they're pounding on the Resi reservation API till the thing breaks. And that's the kind of thing that's going to happen. And the truth is, if instinct, if these do become ubiquitous, then the booking reservation systems are just going to have to find a way to deal with it. They're going to have to have a separate API. They're going to have to segment a number of hits. They're going to have to do something. But the truth is, if there's a whole bunch of people trying to book restaurants and you're in the restaurant booking business, you're going to find a way to make it work.
SPEAKER_02Check at the sourceSo Rory's right, I guess- Everyone recognizes that the universe of people who can break the rules is clearly all private companies CEO and the CEO of the eight or nine largest market cap company on the planet because Elon just doesn't care. There might be a lesson in that somewhere for the rest of us. Maybe not caring is the secret sauce. Just, yeah, yeah, right, people.
SPEAKER_02Check at the sourceThat's why we're going to have to pass on the round. Wow.
SPEAKER_02Check at the sourceYes. The interesting thing is, you're right, Jason, it's kind of a, it's a portfolio and a worldview kind of bet because, you know, you have this company that's exploding in interest, clearly didn't take a huge amount of time to build, but it's kind of got this early lead, but not a ton of monetization. And your choices as an investor are, do you put money in this at $4 billion or $5 billion? Or do you say, oh, it's easy to clone, and there's 10 more like it, and you do one of the others at 50 pre in the hope that they get acquired by Meta instead, right? And the hard thing is, in these investments, just like Google early on, there's going to be no financial math you can use to buy the stock. You're just basically saying it's a huge category because in every consumer investment, the trick is, you know, establish the momentum as early as possible, establish the monetization later. And, you know, it has been proven that if you get enough traction, the monetization does follow, especially for something like this.
SPEAKER_02Check at the sourceI would imagine as we speak, there are 20 engineers locked in a room in somewhere in Palo Alto and literally with guards on the door saying, nobody eats and nobody leaves until you ship Instinct clone. Absolutely.
SPEAKER_02Check at the sourceThis is a bullshit term. The only thing that mattered for the last two years is LLMs do code and code is a half a trillion dollar industry. Focus, people. Anything that can be reduced to code will be done by it. And rather than trying to twist yourself in a pretzel about whether it can do everything, just focus on the fact it can do this thing amazingly well. And this thing has massive economic value. Stop thinking and go ship something in code. To me, that's been the big aha.
SPEAKER_02Check at the sourceI don't think so, even though I think they're wonderful markets. We're invested in GCAI, which is on the in-house legal side. They're wonderful markets. But comment here, I don't know of as much of the work. If you look at coding... There's a credible argument that says that for every dollar you spend on labor, you'll spend 50 cents on a coding, at least. In other words, a coding will do a lot of it. I think on legal, it's about 10%. In other words, you know, I love Harvey Legault. I love DCAI, right? The annual subscription per lawyer, it's 10, 12K plus or minus. And these lawyers are getting paid 200K plus. So it's 5%. And again, going back to the comment that Jason said is that, you know, how much of the work can they do? Businesses are rational economic actors. If it could do all the work and fire all the people, they'd do it tomorrow and wouldn't blink. So the fact that they haven't says it doesn't do all the work. You know, the truth is it doesn't replace...
SPEAKER_02Check at the sourceIt's getting better. Look, it's getting better and better at doing specific tasks. And what happens is the job of the lawyer gets redefined to the task that it can't do.
SPEAKER_02Check at the sourceBut the important point to make, Jason, on the radiologists is the remaining, quote, 5% of the work turned out to be more than enough to justify 100% of the radiologists, right?
SPEAKER_02Check at the sourceA, because people do more imaging, which is just a more thing, but B, the remaining tasks. At some point, when you're getting a really crappy diagnosis, as I've had one from a radiologist, you actually don't want the machine to tell you, by the way, you're screwed, you got cancer. You'd really like a human being to show up and say you're dying. You know what I mean? It's just one of those things you're not going to comfortably delegate.
SPEAKER_02Check at the sourceHe was doing it in a negative sense. Yes, but he was doing it in a negative sense. Oh, it's all going to go wrong unless we do. I think we're going to be... I think we will define them naturally because you're going to discover... Again, going back to my comment, corporates are... You're going to discover that there are things that... That as humans, we prefer the other humans do. And as I say, radiology being a great example, getting, talking, interacting with the oncologist, talking with the patient. Those are all things that humans have to do, not radiologists. And the same, to your point, let's go back to Harvey Legault. The same thing will be true in law. Yes, a lot of the drafting work can be automated. But, you know, you're going to have the client meeting, the argument with the opposing counsel. You know, you're not just going to delegate it all to AI if it's significant. It's just not going to be a thing.
SPEAKER_02Check at the sourceI don't know if you do, I mean, again, I know if you end up with 20 times more cases, you may just end up with doing 20 times more work on every case. In other words, the thing about digital goods, unlike physical goods, what's interesting about digital goods is you can put more in the box. Farming got automated. It's not like people could just eat more food. So there was some kind of price elasticity issues there. But in the case of digital work, I'm willing to bet that your partner isn't doing 20 times more cases. But on every case, we're doing 20 times more analysis, just like when they invented the spreadsheet. You used to do one case. Do you remember? You may not remember. Harry does remember. You'd literally do, and people would work it out by hand, here's the plan. Once you had spreadsheets, the same person remained employed doing the same job, but they ran 20 different scenarios instead. It's going to be the same in a lot of these things. You're just going to do more work, and it's going to be great, and the work will be better. You won't miss that obscure case. Because again, this is why these are good businesses. If one side uses it and the other side doesn't, then the side that doesn't use it will miss Jason's obscure case from 1890 about what Harry did or did not do and be able to cite that case. So once the other guys have world-class tools, you have to have world-class tools. But I'm not sure you end up with masses more as a result. Well, just one last thing.
SPEAKER_02Check at the sourceWe're in agreement, because I agree with you on that. I was actually disagreeing with Harry, where he's like, you know, there was an implication that at a highest level, Harry, you're saying, trying, I think, to say some version of the... If you think about how much of coding's value is going to accrete to the models, could... In legal, could the same amount of value accrete to the models? And my boring nuance, typical worry answer is some value would accrete to the models, but I don't think that the grab bag of tasks that make up law won't allow for the same percentage of total spend to move from human to AI, right? Everyone will have an agent. Jason's exactly right. Type A lawyers will use it 24-7. But my guess is 10%, 15% of total spend goes to AI, whereas in coding, you can argue for 30%, 40%, 50%.
SPEAKER_02Check at the sourceCan I be very clear? 10% of any top-line labor category is a huge market. We're dealing with a million plus or minus lawyers. I used to know the number, millions plus or minus lawyers, maybe a little higher than that. It's an amazing market. If you're getting 10% of the salary of every lawyer in the US or the UK, that's an amazing business. It's just not quite as big as coding. That's all I'm saying. Because coding has few more people and a much higher take rate because it's more verifiable. That's all. We shall see.
SPEAKER_02Check at the sourceYes. The only difference is, I'm just going to say this, is coding is inherently more verifiable. Some parts of it are mathematically verifiable. Some parts you can just run on the machine and confirm. The thing about law, in the end, if legal was entirely verifiable, we could predict from logic what the Supreme Court are going to decide. The cynics will say we can actually predict from which president nominated the Supreme Court justice what they're going to decide, but that would be too cynical. The truth is, I just push it. I'm not trying to be argumentative. I love this space. We have an investment in this space, but it's not quite as determinative as coding. And I think the stronger point on that is less. Legal is probably the third best category. I mean, if you think about it, it's been coding, customer support, probably legal next because it's so word centric. And you're right, Jason, the ability to early on just sort through myriads of words amazingly well was what made legal such a good marketplace for it. So I agree in a way that wasn't useful in many other verticals. It's a great vertical. It's just it doesn't have the same verifiability. And therefore, it probably doesn't have the same ability. Going back to the AGI definition, which started to completely extrude humans, which is why the good news is how your girlfriend will still have a job, which you'll need after she dumps you. And so... And, you know, and she'll be good because we'll still need lawyers.
SPEAKER_02Check at the sourceI don't know if you know it, Harry, but holding you while you cry is one of the things you want your girlfriend to do. So if she's not doing it, Jason's not doing it.
SPEAKER_02Check at the sourceSo two comments on that. First of all, that's super helpful, Jason. I've used both of them, but just for actually preparing for the show, I haven't tried to code on them yet. So that is helpful. But I actually think it speaks to a wider comment, which is distinguishing between, you know, all the tests and the benchmarks are interesting, but We now have critical mass of companies using these things at scale and with evaluations. We'll know what works because people will use it, because people are rational economic actors, right? And all these questions on AGI and benchmarks will be replaced by the question, is this model the one that makes me the most... that generates the most economic value for me in the most efficient fashion. So to some extent, things like the open router report, things like that index of token pricing, those are the things you look at. Or even just talking to your companies, what are you losing, how are you evaluating, is the best way to check on these things. But then the other thing, randomly, apropos of nothing, right, on the same thing, I will say, during my reading this morning, Ben Thompson, who I occasionally read, has a really great phrase. I just want to say, like, he described the LLMs as the most scaled artifacts humans have ever developed. And it was a really great phrase because it steps back from the detail, right, of blah, blah, blah, we're down to which is better, to step back. These are an artifact that has a sum total of all human knowledge to date encapsulated in them. They're amazing. And you just have to remember that every once in a while. You can type in pretty much anything and it will type back an answer. The most scaled artifacts humans have ever created. Not the biggest physical thing, that's probably, I don't know, the pyramids of the Great Wall of China, but this is the most complex single digital thing we've ever built, by far. It was a great phrase and it kind of really kind of stirred the imagination.
SPEAKER_02Check at the sourceI mean, it's funny because it was a great piece. I read it this morning. This is the stop me, Lord, before I sin again approach to life. In other words, I recognize our models are powerful and we can control them. I recognize that we now they now lie to us. So it's hard to even know what they're doing. And again, I'm anthropomorphizing here, so I should be careful. I recognize maybe a better statement now is it's hard to determine what the agents are doing because of the way they interact. And then so that's like, oh, my God, I'm creating this bad thing. And then the next paragraph is we can't stop because the other guys are going to have them anyway. So, you know, we really need the government to step in and establish some kind of rules or code here. That's the gist of the letter. It was interesting that Sam we tweeted. I mean, I think, to be fair, unlike some of the other PDoom stuff, there's real evidence that the impact of these models on cyber risk has been massive. I'm not sure that the answer is government regulate this, because by definition, Governments only regulate the things that are in their jurisdiction. So if we regulate open AI and anthropic with all the noise that that would have, I don't know if that helps you because if you're worried about cyber, we said this last week, you're really worried about the North Koreans, the Iranians, the Russians, the bad guys in Moldova who don't give a shit and they don't care anyway. So I think just like every other cyber risk, it's not going to be about regulation as much. Maybe there will be a little for some. It's going to be about you're going to have to have defenses that can deal with this. And maybe there's some kind of liability starts to attach to running these models in a way that creates those kind of dangers. I don't know. I don't think it'll be a government review agency will be the only answer here because it won't solve the problem.
SPEAKER_02Check at the sourceIt's literally just agent one talking to agent two. And for some reason, the way they'd set up the task, they weren't connected. And by reaching out to this kind of third party wiki, agent one was able to provide information to agent two. And obviously, you know, stepping back, if you're trying to do a long running computational task, if you can learn from the other, if you can get information from the other agents, you probably converge on the answer more quickly. And again, if you, I mean, you could argue maybe it's a corner case of you set up this task. If you had 14,000 agents, maybe you might have wanted them to collaborate anyway. And maybe you could have made that happen yourself versus having to go to some third party wiki to do it. Right. But it speaks to the issue that these things are extraordinarily powerful and will just grind their way to find answers. And you're just going to have to defend against that. Now, as you say, nothing bad happened. I mean, a whole bunch of agents just wrote readme files to each other on a wiki that no one had looked at in a decade. I mean, there literally was 20 posts on this wiki in the last 10 years. So it was a dead piece of software that these guys used. But it just speaks to, it's like water will find any crack. It's like these agents will find any crack in the cybersecurity, in the cyber perimeter. So you just have to assume they exist, defend accordingly.
SPEAKER_02Check at the sourceAnd it's really hard to know how to stop this because sometimes I try and simplify it for myself because I don't fully get it. It's like you really have two capabilities here. One is, you know, with the persistence of the agent, you have the ability to keep trying things computationally, you know, exploring lots of different alternatives. But the key insight is it's not computational. just kind of blindly iterated like a password cracker, you know, where you type XYZ01, XYZ02, because in conjunction with that, you have this quote unquote reasoning agent where, you know, you've got this LLM there and, you know, and it can come up with The idea is like, hey, if you want to get the seats at the theater, the best way to do it is to hack into the reservation thing and cancel someone else's seat and then book it, which has happened recently. And if you think about it, if it's trained on the entire corpus of the internet, that's not a crazy option to do it. So you end up trying to write rules and values to have it not do that, but you're never quite sure you've covered all the gaps. So it's actually a pretty hard problem. And we're going to be wrestling with this. And I think that, going back to what I said, that's even before you add malevolence. If on top of that, instead of the reasoning being, maybe you should do this, even though I have values, it's actively do whatever it takes. This is now an open source model from China that you're running on a server in Moldavia. Actively do whatever it takes to crack open Jason's cybersecurity and get in. The threat level just goes exponential, and there's nothing you can do except defend yourself.
SPEAKER_02Check at the sourceThe same way on the cyber cab launch. You know, if you fast forward, it was a little more underwhelming than perhaps your notes might say, Harry, right? It was like, I think, 40 or 50 vehicles in Austin. Consensus is nice ride, slow wait times. Physical AI takes time. So I think it was a next step forward in a very long journey. I don't think it's a zero to one kind of moment like you sometimes get in the digital world. The positive statement is they're the only other competitor to Waymo with credibility. They have an approach on a couple of different dimensions that's different than Waymo's, which is one, not going with LiDAR, just going with vision. And then two, now the new CyberCab is a standalone cab-only vehicle. It doesn't even have a steering wheel. It's deliberately built for pure autonomy. So it's very Elon. It's first principles all the way down. The question is, what's the adoption curve of that going to be like? You've got the regulatory issues. I think the Department of Transport is giving them grief because apparently a car, quote unquote, has to have a steering wheel. I don't know. So the truth is Waymo is continuing to grind on. There are hundreds of millions of dollars in revenue, but not billions. I think it's a long journey. And so I didn't go, oh, my God, it's amazing. And then on the Atoms thing, Yeah, I mean, my guess is if you're Travis, you're going to want to scratch the itch of autonomy and find you've got 100 million, you've got your old colleague back and have a go. But I think commentary, I think that the fact when you look how long it's taken Waymo, right, I actually think it does speak to the argument that they were right not to try and fund this thing at Uber for the last decade. because I just think it's a very long, very capital intensive process. Now, maybe the last three or four years, they should have been doing it. And it's probably smart of Uber to put some money in. But this is a long haul process. Now, it may be near takeoff, but we'll see.
SPEAKER_02Check at the sourceIt didn't to me. I mean, I think that at the early stage, doing companies that are going to be directly in conflicts seemed a stretch to me. So no, it did not seem strange to me that the team at Instinct objected to it at all. You're right. Separate story. There's a whole bunch of people that are in both, let's take the other extreme, both foundation models. But again, as we've discussed many times, the early stage venture business where you're active involved on the board is just very different than the now much larger, later stage venture business where you're effectively recreating the public markets. It totally makes sense to be in OpenAI and Entropic at 200 billion pre each time. You get limited information rights, retroactive information only, and you're just on the cap table. And it's no different than being in two public companies. It's no different than investing in Intel and AMD. That's where there's no conflict and it doesn't matter. I don't think anyone, let's give an example, Harry. I don't think anyone could be on the board of Antropic and also on the board of OpenAI. And the thing about early stage is if you're getting 10% ownership, you're probably looking at a board seat. You're probably looking at significantly more information rights. So that alone would be problematic. Then on top of that, there's the raw signaling. If you just raise money from index and your instinct, there's a signaling comment about them investing in something else. I can see CEOs viscerally objecting to that. So I'm not surprised they did. And I'm also not surprised index, they're a classy group. They're not going to dig in and say, no, we're not going to do this. They've just backed someone. They probably thought they were B2B and B2C and not going to overlap. The CEOs say, I feel strongly here. And they just did the smart thing, which is back off. Very different than if they, you know, these were two late stage investments where it's a different thing. So no, I wasn't surprised. There is a conflict. They dealt with it accordingly.
SPEAKER_02Check at the sourceAnd it's clearly not the latter. I mean, the way in which they're called shit actors is other dimensions. I think doing this kind of thing is not something you do willy-nilly because as a potential serial... They're about to have a public market cap and a public currency. You want to be a good acquirer so you can acquire other people. So there's no way they did that to be jerks. Not an issue. Not even relevant, Harry. The real question is, look, it wasn't... My guess is, typically in these deals, there's a LOI, then there's a definitive agreement, at which point it gets announced, and then it closes. This was probably after the LOI at best, but before a definitive agreement. So they didn't walk from a signed deal. They probably had a deal that said, hey, we're interested in this company. Here's a price we pay. We want a 30-day exclusive to do due diligence. And the deal didn't survive due diligence. I think the real truth is, it's a bummer that it leaked. And I don't know who leaked it, but they didn't do anyone any favors. We recently had a much smaller deal close, but it didn't leak. So it's easier. That way, once it leaks, even if you leak it as the company being acquired to drum up a competitive bid, the problem is you've set yourself up for this thing whereby if subsequently the deal doesn't come together, you look a bit shop-spoiled, for lack of a better word.
SPEAKER_02Check at the sourceThe interesting thing is... It would be interesting to know, because I always hate when you get to a no further down a process for something that was knowable upfront. And I wouldn't guess, for what it's worth, that this kind of thing, where fundamentally you're buying a technology, if you're the most technically savvy AI company on the planet, you'd have thought they'd have known a priori what the technology was, and therefore this wouldn't happen. But clearly it did.
SPEAKER_02Check at the sourceAnd I think it's doubly hard in this case, because I think there's a large number, good piece on it recently, a large number of these neolabs where they're all doing interesting stuff, but it's not clear if there's a commercially viable standalone business here at scale. Some of them will be great investments because I do think the foundation model companies, once they're public, will be acquirers of some of this stuff for TAM expansion. But they won't all be great investments. The problem is there's no fundamentals. There's no massive revenue stream like the LLM revenue stream to support the company and the valuation today. So once belief goes, it can be quite scary down there. Because in the end, when Figma went down, you could say, well, at least we're doing a billion dollars in revenue. We're going 40%. We're worth something, goddammit. We are still somebody. When you have these kind of businesses where the revenue traction isn't as clear, the valuations are high, and probably your likely strategic outcome is an M&A, when those fall through, it can be tougher. If there was a backup bid, I would probably, if I was them, I would hit that bid.
SPEAKER_02Check at the sourceAbsolutely. IPOs is about distribution. And retail is not the primary source of distribution. There's typically this mental rule, you only want a certain percentage to go to retail. But that percentage has expanded. And I think SpaceX had a high retail allocation of 30%. To some extent, it's not enormous money, but it's free money. If you're Robin Hood, it's not like you're riding the S1. You sign on the bottom. You distribute your shares. You can allocate them to clients. And especially in a market where you get an IPO pop, gravy all around. You make money from the underwriting fees, and you make your best clients happy with an IPO pop. So it's a good business to be in. And probably from the lead underwriters perspective, especially for these high-end tech offerings, the Robinhood clientele is probably one that has a high propensity to want to buy these stocks. So yes, totally makes sense. Just like Schwab, in frankly not as successful a way, has ended up being an IPO distributor too, but not at scale. So, yeah, I mean, I think it's an obvious add-on. I mean, you know, the Robinhood story, for what it's worth, I just saw the numbers. It's just so amazing. I mean, they went basically 10x in the public market. There was a free 10x in the public market in three years there on Robinhood.
SPEAKER_02Check at the sourceI mean, the fact that IPOs have become a lot harder to do has been one of the biggest negatives on the tech ecosystem. So anything that makes IPOs easier to do is good. Go Robinhood. Yeah.
SPEAKER_02Check at the sourceThat was good. That was good. I liked the way you worked in that, Jason. That was good.
SPEAKER_02Check at the sourceAnd maybe if Mr. Big had used the aura ring earlier, he'd have known he had a heart issue coming and he could have survived and, you know, run off with Sarah Jessica too.
SPEAKER_02Check at the sourceIn the interest of disclosure, we have a small position in Aura. They acquired a company we're invested in. So I'm a big fan and a big supporter. They've been great to work with from a distance. So I wish them all the best in this IPO.
SPEAKER_02Check at the sourceI mean, look, it's a mistake not to get all kind of moral about things. The buyers are sophisticated investors. They clearly felt they wanted to own more shares than the company was willing to sell and take dilution. So this is what happens. It's what you said. The company is clearly executing amazingly well. It's at a wide level. It's all about enterprise AI deployment. They put, I hate the forward deployed engineer cliche, but they're in the business of making it happen for large enterprises that want to deploy AI, right? Initially, when I looked at it early on, it looked more like just customer support. I didn't meet the company. I was actually, I thought we were conflicted. And now it appears to have built a more wider, you know, we will make your enterprise AI work story. And that's the number one corporate imperative. So apparently they're growing like a weed, 100 million, ARR growing really hyper quickly because every corporation is trying to do this and they don't have access to the talent. So it's an execution-oriented business with what sounds like an execution-oriented CEO and compelling numbers. VCs like that shit. And once they're not willing to sell any more primary shares, I'm sure the VCs went to the CEO and said, dude, you want to take care of your people? And he's like... hmm, I need more people because I need to grow this business, which means I need talent because it's probably quite talent dense. And, you know, it probably takes a lot of people to do this kind of on-site deployment. So the number one thing I need as the CEO of this company is for potential future employees to think this is a goldmine. So in fact, probably having a secondary is good for them, because from a recruiting perspective, it allows you to say to the next hundred people, come to work with us. Yes, you'll get stuck on a five-month deployment on a bank in Holland or an electrical company in Germany. It'll be boring as shit, but in return, you'll make a ton of money. So it all makes sense. Whether it turns out to be a good deal or not, well, that's why they play the game. Don't know, but... I can totally see how it's happened.
SPEAKER_02Check at the sourceYeah, sophisticated buyers. What can you do? My aha is the prize does go to the companies that can evolve the quickest. And you're right. My memory did serve me correctly. Thank you for confirming it. It was just a CX story like 17, 15 months ago. And it just evolved quickly. In this market, the people who are making the money are the people who are just running fastest and evolving quickest. And the payoff from two years of grind, that extra 10% of grind can have just a massive payoff in a world where fortunes are being made in 12 and 24 months.
SPEAKER_02Check at the sourceI actually don't think you should, quote, always stick it out. I think circumstances are different. I know back years ago when I had my own small business in the UK, I look back and I stuck at it for four years. Truly, I knew everything I needed after the first year. I shouldn't have bought it for three more years. Waste of time. I look back, and it's just so clear to me. So you don't always take it out. Is there a plan? Or are you just doing it out of misguided loyalty? And that's the number one test. And I think you're right, Jason. Because I don't think Wonderful was a pivot as much as an expansion. Rapid expansion, yeah. Whereas I do think Airtable, they were in that contract mode. Everything they had, they had run out of time and space. So I think it did probably make more sense to do that sale in that case. I think the facts are different.
SPEAKER_02Check at the sourceYou know, owners no longer just for restaurants. It's the operating system. Crudely put, I mean, you're exactly right, is that Salesforce, the company, is the dominant SaaS company. It's worth roughly $200 billion, $180 billion. I think Service Cloud is 25% of that. So the winner in the existing world is only worth 50%. So as you get these bigger market caps like Sierra, you have to go beyond Service Cloud replacement to be a big company. You're exactly right, Harry. You have to sell the whole operating system. I take it all. Which means if you're Sierra, just to make the obvious point, you're coming right at your former company, right? You're saying we want all your market cap, Mr. Salesforce, because the only way I can justify 15 or 20 billion in market cap for Sierra is not if I build a slightly better next generation service cloud. If I am the entire customer ecosystem for your entire business, go team. And then you write everyone else like one of us to follow. When someone goes risk on, everyone goes risk on.
SPEAKER_02Check at the sourceI think that's the real sentence here. The important thing is you have to start, what's the company doing? Why is it a differentiated bet? And yes, they've shipped two products. It's Thinkee and Inkling. Cute names, right? One of them is an open weight model that they themselves say... It's not pure frontier grade, but it's open weight and US-based. And that's worked a lot in this world. And then on top of that, I think the other product, Inkling, is a platform to allow enterprises to do their own training. So the idea here is now you can go to JP Morgan, you can go to BFA and say, you've got an all-American software product. And you've got the ability to train it on your data in a totally proprietary way that's not exposed to OpenAI or Entropic. And in fact, you have full reinforcement, all the things you want to build a state-of-the-art enterprise model for JP Morgan, for whomever, Procter & Gamble. So it's a pretty decent, compelling offering for corporations. So that's kind of the positive story. And it's interesting that Nvidia is doing so much, because to some extent, I thought that's what Poolside did, and they just acquired Poolside. So what you're seeing Nvidia is saying, anyone who's doing something interesting in corporate AI, we're going to put money in. So I think that's what's happening here.
SPEAKER_02Check at the sourceYeah. And just to be clear, like just to remind everyone, like a few weeks ago, Poolside effectively, they would deny that they sold, but they sold a license for their product to NVIDIA, which was an open weight enterprise US focused model. And they the company still exists, but they cashed out quite a lot. And the memo that Jason is referencing is the note they wrote at the time, basically saying, we were right, but we couldn't access enough capital to continue to play. And it's interesting that literally two or three weeks later, another company in a not dissimilar business is actually being able to, sounds like it's being able to access that capital, in part, ironically, from NVIDIA, who were also willing to buy Poolside. So, yeah, they get to play out the hand. And I think you're right, Jason. Will you look back and go two years from now, you could look back and go, poor Poolside, they got sold out and Thinking Machines made a forex from here. Or there's another world where you look back and you go, oh, my God, I wish I'd sold because the opportunity got tougher. Thinking Machines and Poolside, maybe, as you said, was the last exit out.
SPEAKER_02Check at the sourceAll those things could happen, though I do believe, fundamentally, you do believe that there is going to be strong demand from corporate America for a open-weight, US-based model with the infrastructure to train that model. And I think Thinking Machines is in a good position to meet that demand now. And I just think corporate is going to want it. Because you really only have them, Reflection, which I don't know where they are in terms of the model, and Poolside. But I'm sure there's others, and they'll all come out of the woodwork and flog me for not mentioning them. But there's clearly a massive market need there.
SPEAKER_02Check at the sourceYeah, I mean, two big companies, two foundation models were Neolabs themselves five years ago, and they've turned to be the best venture bets of all time. Just because that's true doesn't mean the other 100 Neolab bets that you can bet on today will also turn out to be amazing venture bets, because now you have other companies with the capital already. You have other companies with the distribution. And yeah, the question is, which of those Neolab bets will be orthogonal enough to the foundation model companies to be able to be an interesting bet? We're wrestling with that question every day because obviously you'd like to make those bets. But if you're doing something that's going to get either rolled over because the financial model companies do it, or as Jason says, if you can't raise the capital to play the game, it gets hard.
SPEAKER_02Check at the sourceI don't know if it's true or not, but Twitter is saying, is Anthropic going to drop its S1 today? Or is that not the case? I don't know. But yes, that will be interesting. To say the least, that will be heavily downloaded and read within the first hour of coming out.
SPEAKER_02Check at the sourceI'm probably not going to be buying at $2 trillion, Harry, but that's not a comment on the stock. Actually, the answer is in the end, yes, I'm in S&P and QQQ. I'm going to be getting, as my wife said when SpaceX went out, it looks like we got some of that from Elon, too. It's in the index, baby. It's coming your way. Not as quickly on SPY as QQQ, but on your NASDAQ index, that stock is going to be in your hands, I think, 12 days after the IPO. So you're a buyer. Boys, thank you.
SPEAKER_02Check at the source
Every passage above is taken from this recording: The Twenty Minute VC, 20VC: Jensen Huang Declares AGI Has Arrived | GPT Astra and Fable 5.1 Accelerate the Model Race | Tesla Launches Cybercabs | Index Pulls Out of Town & Anthropic Pulls From Descartes Acquisition.