moonshots sonnet 5 drops fable 5 ep268 transcript

It's pretty clear that Sonet 5 now is a way to kind of fill this gap until Fable 5 is back out. A kind of mediocre capability at a high price point, but people will still need to buy it. >> Anthropic's flagship model, Fable 5, has been offline for 15 days because US government pulled it. Now, Axios reports it may be back within days. Historians will look back and say this period in time marked the period towards the middle or the endgame of recursive self-improvement. and Helion cleared the required Washington state regulatory approvals for its Orion Fusion power plant. It looks like Fusion is finally here. >> If you were watching the right metric or the right figure of merit over the long term, you could predict when this is going to happen and it's imminent. >> All right, mates. Let's jump into data centers and space. And for that, we're pleased to bring a friend on. >> Thanks so much for having me. It's a huge honor. I've been a longtime fan. Now that's a moonshot ladies and gentlemen.

[00:01:03] >> Welcome back to Moonshots everyone. Your front row seat to the coming singularity in the age of abundance. I'm here with my magnificent moonshot mates Dave London our managing partner of link exponential ventures and number one funer of MIT and Harvard AI startups. Sel is male our global troder our CEO of open exo and of course AWG our in-house ASI. I'm Peter D. Mandis, your host and your abundance evangelist. Gentlemen, good afternoon, good morning, good evening, wherever you are. So, you know, where is Waldo today, Sem? Where on the planet are you and where have you been? >> Um, we dropped our son off at a camp in San Sebastian in Spain or near there. And I'm in Barretts right now for a few days. >> Okay. And and you were like in Germany before that. I mean, I >> I've been in five countries in the last three days. It's It's really been nuts. >> Of course. Of course. And Alex, all well with you?

[00:02:00] >> Yeah, I'm GDP maxing or doing my best. Always be GDP maxing. >> I'm happiness maxing. Um, you know, gratitude maxing. And Dave, >> good to see you, Paul. >> I am at Link Studio. And uh, just for word for the wise, we have a ton of Nor Eastern and Princeton activity in addition to MIT and Harvard these days. Of course. Yeah, we had Techre is killing it out in San Francisco. Liiputan, uh, Andrew Feldman, uh, the number two guy at Nvidia, they were all there on Friday talking to the troops. So, it's it's really rolling. >> Amazing. >> This is the thing we did with Eric Schmidt and Eric Bolson and Daniel Larus. >> So, today we're going to cover a bunch of new stories. We're going to catch up on robotics, energy, data centers. We've got 20 stories across six fronts. A lot's happening and a lot of capital is flowing. For those of you joining us for the first time, our mission here at Moonshots, keep you informed, keep you optimistic about the future that we're creating. All right, let's jump in. I have uh three stories I want to hit on the abundance front. >> Wait, wait, I just got to make a quick

[00:03:01] point to everybody watching. If you've not seen the last episode with Eman, I'm about threequarters of the way because it's a time we're trying to keep up with our own episodes when I miss one and it was ridiculously amazing. So, just a comment there. >> Yeah. and EMOD's made some great releases in the last uh 48 hours um on on his latest model combinations. All right. All right. So, we're going to open our first story on robotics. But before we do uh because I want to talk about the predictions of how many robots we're going to have on planet Earth, I was having a conversation with a dear friend Rames Nom today. Rome is one of the earliest Singular University faculty members and futurists. He's extraordinary. and he shared this chart with me guys that I'd love to discuss. It's a look at how experts consistently underestimate exponential growth. So in this chart on the left here we see uh new solar uh you know growth in solar and that that yellow exponential line is

[00:04:01] the actual growth in solar. It's been growing at an extraordinary rate. And what we see on these departures that go horizontal are the predictions that the experts make every year showing you know linear or you know just small incremental amount of growth and over and over again they underestimate it. Uh the chart in the center there is the experts predictions on EV growth and again uh we see exponential growth in EVs and then the forecasts consistently are underestimating the actual growth and then finally we see the same chart going on in in battery sales. So it's a interesting phenomenon that while we're living in this exponential growth the experts who are the experts in the way things used to be are not projecting the growth. They're staying very uh you know, shall we say uh sublinear in their uh in their estimates. So uh See, you and I have seen this before and we've

[00:05:00] discussed this. Any thoughts? >> Oh my god. Every presentation I ever give has a segment with several slides showing this. Right. The poster child is a story about Moore's law ending by 2022, which came out in 2013, some experts said. And you can go back and look at the technology press and every two years that article is appearing for 60 years, right? Because experts are really good at measuring the technology. They're terrible at the compounding ecosystem around it. The there's some really dramatic examples of from Rome around the energy ones where the solar is vertical and every expert for 10 years goes horizontal in that in that uh thing. It's a it's an endemic problem. We have that whole headline in the original book, Peter, which we put together saying um uh um beware the experts, right? And this is the immune system because when you've got somebody that's got 30 years of experience in something, they'll tell you how not to do something. >> Yeah, agreed. Alex, any thoughts on this

[00:06:02] particular note? >> No, I I I think the moral of the story is you should always take the logarithm of the actual history before you hand it to experts for their linear extrapolation so you can get the right answer out. You know, I define an expert as someone >> cute. >> I define an expert as someone who can tell you exactly how it can't happen, right? And it's so true that experts today are sort of so ingrained in the past because if there's a disruption, if there's a revolution that comes and no longer the expert and so it's just it's against their best interests. So, I want to tie this story to our first our first robotic story here. Um, and it comes with two predictions. The first was Morgan Stanley. Morgan Stanley uh had originally predicted 14,000 Chinese robots coming out of China uh and they've upped it to 26. Now they've just upped it to 50,000 and projecting 500,000 robots by 2030. But the fact of the matter is there's 140 humanoid robot

[00:07:00] companies uh developing hardware in China today. And at the same time, you've got Elon projecting, you know, tens of millions of robots to 50 million robots by 20 by 2030 and and billions going into the early 2030s. Uh on the flip side, what we're seeing here is uh on the right hand side of this is a chart from Andrea Harowitz that shows we're going to be seeing about $16 billion of hardware investments in Q1 of 2026. and the US is finally catching up. Uh, Alex, uh, I know that you're you're heavily committed to this and and Dave, your thesis is we're moving from an AIcentric entrepreneurial ecosystem to a hardware ccentric ecosystem. Would love your thoughts on this. Alex, you first. Yeah, as I've mentioned on the pod in the past, I think super intelligence is set to spill out of the data centers into the streets. And I think the most obvious vehicle for that is autonomous vehicles on the one hand and humanoid

[00:08:02] and near humanoid robots on the other. I I think as we start to increase the number of humanoid or just say generalpurpose robots per capita there they're going to be certain regimes at at the low number of humanoid robots per capita regime. It looks like robots performing industrial applications, robots in factories, robots doing logistics at the as we start to get I think closer to approximately one humanoid robot per capita, it looks like domestic robots everywhere. It looks like an iroot style regime where everyone has domestic staff. As we start, interestingly, and a point that I I don't think I hear frequently enough, as we start to push well through the approximately one humanoid robot per capita regime to 10 or 100 humanoid robots per capita, at that point, I I

[00:09:00] think to a hobby horse, I think of Seem, we start to end up in some pretty exotic futures where there's no longer necessarily justification for the humanoid form. We end up with microobots and nanoo robots. And there's sort of a natural sense in which the humanoid form is no longer natural in a world where we have a thousand generalpurpose robots per capita and we can start solving all of the grand physical world challenges that would maybe be uneconomical if we only had one humanoid robot per capita. So I think we're going to very rapidly scale through the low per capita regime to the approximately one per capita regime to the many per capita regime. It's going to be a very exciting scale. >> So David, take a second and walk me through your thesis right now because we've been investing together in AI companies mostly and you've said that you expect that is going to sort of fall off and more of an investment to hardware in the next couple years. Why? Yeah, I think we have to think in terms of 10-year investment themes. And you

[00:10:01] know, 10 years in the age of AI is like a hundred years in any normal world. And so I I do think the next one and two years is still dominated by white collar automation, AI algorithms, chip design, AI that designs chips, uh the beginnings of data centers in space. But then if you think beyond two years in the future, you know, what are the investments that are going to really be big three, four, five, eight, 10 years from now, uh the automation of construction of data centers is all going to be robotic. >> Uh biotech, chemical mixing, experiments, reading gels, that's all going to be robotic. >> And so the machines that do that, you take a guess, you know, how big do you think the US gutter cleaning industry is? People who go on your roof and pick the leaves out of your gutter. How much do you spend per year? I do. I looked it up. >> How big >> that that use case alone is a billion dollars a year. If you built a robot that cleaned gutters and washed windows, those two tasks, that's a 20 billion global market. 20 billion global market. So that's a theme that will support this

[00:11:01] slide says 140 humanoid robotics companies. There's room in China. >> In China. >> Yeah. >> There's room for thousands and tens of thousands of robotics companies specialized for various use cases. Everything from wafer movement inside a chip fab to chemical mixing and biotech to gutter cleaning to just everything you know construction construction has thousands of individual tasks. So it's a very broad long-term investment theme. Kitchen work too. We're already starting to invest in that one. But uh kitchen work automation because the fast food restaurants can can buy at scale and so they'll de co-develop with you. This is where Travis Clutnick is is focused with his company Adams just fully roboticized kitchens. You know what's interesting is this uh particular note of the 16.5 billion in last quarter was in 500 deals. I used to think that, you know, I'm a huge Star Trek fan. I used to think that Star Wars was kind of silly with all those, you know, hundreds of variations of droids out there, but it

[00:12:00] looks like it's coming. Um >> Peter, it's such an interesting point. You know, I I'd be curious to hear your thoughts on this. Historically, the robots have been missing from Star Trek other than in the first few series like Sun type data robots. There were no robots. Maybe it was what are your thoughts on that? I I think they wanted to create a very humanistic uh series and you know Gene Rodenberry was all about the uh societal implications of technology in this future and he and even even computer right even computer was the name of the computer which was Gene Rodenberry's uh wife Christine playing that role was >> El Cars right >> was very you know roboticized it didn't predict this you incredible empathic voices we have on our models today. Uh yeah, they miss that. Well, you know, we're going to have Rod Rodenbury is going to be with us at the Moonshot Summit. He's going to be on stage, one of the judges of our future vision X-P prize. So, we'll sit down and ask him. I

[00:13:02] think those are those are important questions to ask. Why did they miss that part of the future? >> Was it just like low production budget? Because they added them in more recent Star Trek series. >> Yeah, >> they retconed them. >> But but still nothing close to Star Wars. and you know going I I think a lot of it had to do with the theme right infinite diversity infinite creativity and they were focused very much on human interaction all the aliens that were humanoid not just because you could put actors in those suits but the fact that you were always dealing with the interpersonal elements uh in those in the in the plot lines of those >> so yeah we've got lots of companies that are building robots now famously in the US we've got obviously Tesla with Optimus We have figure, we have 1x and in China um probably the robot company that's got the most uh you sort of publicity has been Unitry. We had one of the founders of Unitry on stage with us at the Abundance Summit. Uh I want to play their latest video. It's got 11

[00:14:02] million views and uh this is a glance at the R1 which is incredibly selling for 4,900 bucks. I mean, this is the price of a cheap used car, uh, which is saying a lot. So, let's take a look at at the R1. So, um, I mean, it's crazy. You know, my point is it's an extremely capable robot. Uh but the work here is going to be on the software layers, right? You buy this robot. I don't think it does that out of the box, but I think you could probably buy uh the algorithms that enable you to do that. But I see an explosion in the number of people experimenting with these robots. Uh at 5,000 bucks, uh that's affordable by,

[00:15:01] you know, almost anybody uh who has a reasonable income. Uh Alex, where does this go for you? Well, I think the elephant in this particular room a as with Elon demonstrating to the world that you could drive the cost of heavy lift to LEO down to effectively near zero through reusable propulsively landing rockets. The elephant in the room here, I think, is humanoid robots that are able to assemble other humanoid robots. If you take the the cost of assembly down to near zero, what we're left is the cost of raw materials and the cost of energy. And that's going to be effectively dimminimous. So I I think as we drive and by we in this case I really mean Chinese organizations because the west is woefully behind at the moment. As we as humanity start to drive the the unit cost of general purpose robotic embodiment down to near zero. At some point the we will need to cross the threshold of robots being able

[00:16:01] to assemble other robots in order to keep driving that cost down. And then at that point we have physical labor too cheap to meter. And as I pointed out in past approximately 2/3 of the service economy constitutes some sort of physical labor. And we can do for the physical world what AI agents are right now in the process of doing to knowledge work which is basically driving the cost of knowledge work and soon physical work down to near zero. Can I make a point actually that we learned at the uh at the Gigafactory that I completely think is it was lost on me and I think it's critically important is when Elon says humanoid robots building humanoid robots it's actually the CNC milling machine or the auto auto lathe already exists. It's already making the parts and it's just a file loaded in what those were designed for as a human to go and take the part out of the machine and put it in the next machine. And so the humanoid robot does not need to literally create, you know, with a file and a piece of metal,

[00:17:01] you know, it the the automation's already there. It just needs to do the part that the human is doing today, which is moving the part from machine to machine and doing the final assembly. So it's a much easier problem than than robots making robots sounds like. >> Yeah. I think the point I want to make here is we're heading towards commodity pricing on these on these things. 4,900 bucks, right? And so as we move to commodity pricing, the question is where's the value layer? >> Well, the value layer clearly will be in the software and the exact point I want to make. It's yeah, I think that's a really important point and people are going to build apps. Look, if you go back to the original personal computers, you put them out there and people kind of like we didn't know what they would do with them and then over time you had more and more applications built. Now these things show upworked out of the box. There will be profound new skills being emerging all the time from these things. I think it's going to take I'm still going to say I think it's going to take a lot longer than people think because the driving it took us 20 years and that's a very bounded domain space. Um humanoid robots doing gardening etc.

[00:18:02] There's a million edge cases and I I think there >> what's different here is that you know and this is sort of a what does it mean for the entrepreneur out there um you can buy this and begin to build on top of it. This is not something that requires permission from anybody. It's not something that requires a, you know, massive corporate budget. An entrepreneur can buy this for 1,400 bucks. It's like the Raspberry Pi moment and you can start hacking and publishing software uh to these robots that becomes a a new revenue engine. So, I think that's what's most interesting for me is the explosion of applications that come on top of the iPhone uh that now come on top of these robots. >> I agree. But I still think we're going to spend a lot more time figuring out the industrial use cases and the dull, dirty, dangerous jobs and getting those automated. There's so much scope. It's going to take a decade to kind of get through that before we can get to somebody coming over and doing gardening

[00:19:01] for you. >> You know, we we we talked in a past pod about uh Royal Wii. I mentioned the idea that the export controls that we're seeing at the moment imposed on frontier models are in some sense you could look at them through the lens of immigration policy as being regulations on importing foreign uh or exporting depending on your perspective super intelligence but that's the software layer I do think so admittedly maybe a spicier take here I think that as the cost of robotic embodiment primarily from China at the moment starts to come down. I would not be surprised to see similar either import controls or other national security motivated restrictions start to kick in. It's not just about dumping. It's also about taking the embodiment for super intelligence and moving them across borders. >> This episode is brought to you by Blitzy, autonomous software development with infinite code context. Blitzy uses thousands of specialized AI agents that

[00:20:01] think for hours to understand enterprise scale code bases with millions of lines of code. Engineers start every development sprint with the Blitzy platform, bringing in their development requirements. The Blitzy platform provides a plan, then generates and pre-ompiles code for each task. Blitzy delivers 80% or more of the development work autonomously while providing a guide for the final 20% of human development work required to complete the sprint. Enterprises are achieving a 5x engineering velocity increase when incorporating Blitzy as their preIDE development tool, pairing it with their coding co-pilot of choice to bring an AI native SDLC into their org. Ready to 5x your engineering velocity? Visit blitzy.com to schedule a demo and start building with Blitzy today. >> Well, you've heard the Trump administration saying they want to invest in the robotics industry. We've

[00:21:00] seen uh you know obviously Tesla and and Brett Adcock from from Figure uh getting massive investments to support the growth of these systems. Uh it becomes strategic for the US and we're going to find out uh in our next story. Let me just let me just go there for a second where we're going to start to see uh robots being used in a number of different areas including um law enforcement. So, a drone of course is a robot. Uh and I'm going to share a particular video here that uh Alex you shared with me. This is out of Orlando. Uh and this is the US law enforcement beginning to use drones as first responders. Let's take a listen to this video. >> And new at noon, the Orlando Police Department is now using drones as first responders, sending them to some 911 calls to give officers a live look at the scene. A new eye in the sky, now responding to some of Orlando's most

[00:22:00] serious calls. Orlando Police Chief Eric Smith addressing a big question from the community. >> What would you say to the citizens who either are seeing this as an invasion of privacy or an overstep? >> We're not looking in people's windows. We're not spying on people. We're not just flying around. Just fly around. >> Qualifying call comes in. A nearby drone can be dispatched to specific GPS coordinates. Then from the crime center, an FAA certified pilot can control the drone, giving officers a live view of the scene, including if a suspect runs, hides, or possibly has a weapon. >> So, interestingly enough, um this was uh demonstrated on June 17th as a first deployment. It had uh what they call nine docks at different locations and 11 Skyo uh network drones. Uh Skyo is sort of the US manufacturer today. Uh it, you know, used to be DJI out of China, but we put in, you know, import controls on DJI for a number of security reasons. And so Skyo, even though it's more expensive, it's something like three to

[00:23:00] 10 times more expensive than the DJI drones are are getting it. Uh, interesting enough, uh, Salem, uh, Rick Smith, uh, who's one of my abundance members, he's the CEO of Axon. It's the company that makes the taser and the body cams, uh, has the contract here, and they're they're coordinating all this. They did a trial with a single drone, uh, and it beat patrol officers about a third of the time to get to the live location. Uh, and provided useful information in 97% of the time, they claim. But you can imagine that we're going to have drones on buildings uh throughout the city and a drone will get there almost immediately. You know, I can imagine there's fear that people have on this subject, but I think being able to get to emergency locations, making sure you can assess situation when you need to have medical personnel there, it's going to save lives. uh and I I want to acknowledge the fear of that people have but I think on the on the whole as long as you have good policy

[00:24:00] and good governance about how the data is retained or used who gets access I think this is an important step for law enforcement >> it it's huge and you know we did a our very second sprint back in 2015 with interpretexion which is the largest insurance company in Mexico 30 million uh users and they actually deployed drones because they were so much faster than ambulances of getting to an a an accident scene and they would scan and map the whole area so that you people as before people move the cars and everything like that. So they had full information before anything happened. It was kind of an amazing experience. So we've seen this trend over a long period of time. I think we can expect to see this accelerate pretty radically just because of the practicality of it. If I might add, there are regimes as the cost of robotic embodiment trends towards near zero becomes too cheap to meter that we in the west are unaccustomed to, but that China for a variety of reasons including demographics has seen for a

[00:25:00] number of years. For example, this is well publicized. The the Chinese Communist Party maintains um members uh officers on a perb block basis. Certainly, this was the case during the the pandemic in China. The west doesn't really have any concept of this. If you look at how first responders are geographically distributed in the US, it's on a per municipality basis uh or precincts. There's no notion of say one or more officers per block that are just permanently stationed on a single block. But with drones, this becomes possible. We could have literally drones as densely distributed geographically as fire hydrants are. And you could literally just if there's a problem in a block or a part of a block, just remotely activate the drone and then you have an instant point of presence. Let me share the second story comes out of Sacramento. Uh there was a suspect who had a knife uh and they deployed a drone

[00:26:01] with a uh with a magnet to grab the knife and and and make the scene safe for the police to enter. Let's take a look at this. So, here we see the drone going. The guy is holding a knife. Uh, a magnet or electromagnet is attached to the knife and it pulls it out of the guy's hand as he's apparently sleeping. So, um, this is interesting. This is a drone that's disarming somebody. If you guys remember during the Abundance Summit, um Rick Smith again with Axon uh showed us his taser equipped drone uh and I went on stage wearing a a suit uh to protect me and he tased me from his drone. So I I think this is coming uh this use of drones in law enforcement for both observing and for trying to deescalate a situation. Uh the drone market right now is about hundred billion dollars around the world. that's going to be increasing. We're seeing drones being

[00:27:00] used uh obviously in the Ukraine very famously Eric Schmidt's been funding a drone company uh to help the Ukrainians in their fight for independence. Uh Dave, any thoughts from you? Yeah, you know, Scientific American did a a great uh research study on why crime rates are down by half in the US and they keep coming down and it was entirely connected to deployment of first responders in the right place at the right time. Largely driven by GPS. Uh but now with the drone footage, you can get much more accurate. You know, the first responders want to be there and they want to help, but getting the right people to the right place at the right time. But I'm a huge believer that the video footage is going to be massively impactful and the the the resolution just keeps going up and up and up and up. You know, the physical side of it where you're disarming somebody is that's a little ways out. You know, that was kind of a like >> niche niche case. >> Yeah, very niche case. But the video side is like right here, right now. And and as Alex was saying, you could easily cheaply have as abundant a fleet as

[00:28:01] there are fire hydrants, that would cost next to nothing. >> Yeah. >> So that's that's imminent. I'll also point out, if I may, this was all foretold by Minority Report. You remember the scene in Minority Report with the police officers deploying spiders to search an apartment complex for Tom Cruz's character. We're starting to catch up with that now. And yeah, right now it it starts with a couple of police precincts in the US. They're they're using drones for first response, my understanding, is far more frequently in China right now than the US or the West in general are. But project forward a few years when there are a variety of new form factors. Maybe we get spiders. Maybe we get drones. I have to imagine the drone the the flying form factor is a good deal more versatile for interacting with hostile scenarios. These are going to get smaller and cheaper and more plentiful. We haven't even seen what happens in the West from a first response perspective when police can deploy swarms of drones rather than

[00:29:00] just individual drones. But as cost goes down, we will absolutely see swarms. >> Yeah. I mean, again, I think the public is going to have a bit of a fearful reaction to this. It really depends what the drones are armed with. It depends, you know, what the drones uh the guidelines on the use of drones are, and we need to address that. I mean, getting getting medical uh equipment to a site of an accident rapidly. uh you know we're going to see EV talls flying cars delivering ambulance personnel there but getting a defibrillator for example uh to a location that's jammed by traffic drones are going to play an important part of this and they're getting better and better you were going to say >> I'm just remember the counterpoint here there was a a fellow from the Dutch police force at one of our singularity executive programs and they were combating the fact that drug dealers were using drones so they trained a bunch of hawks to drop mesh wires onto the drones to to wrap them and tangle

[00:30:00] them. It's like so retro to be training up birds to be tracking attacking drones. It was it was totally surreal. >> That's actually a real problem below a certain size. Uh there are a lot of birds that go after these things. So the really small ones actually have a little bit of a problem in >> in the Ukraine. They're having they're having a huge problem because they've got strands of optical fiber from all of the drones that have attacked them lying everywhere. >> Oh, yeah. >> It's a massive issue. >> Yeah. Well, I I'll tell you the number one use of drones I'm excited about came from the Wildfire X-P prize I talked about in the last pod, you know, where drones are able to get to a fire at inception, put it out rapidly before it, you know, causes hundreds of millions or billions in damage and and, you know, causes the loss of significant life. So, um, >> and we didn't we didn't get our flying cars in the end. I mean, we we have we have flying car companies, but they're relatively sparse. But I do think we're going to have skies over the next few years that are utterly filled that are densely filled, I should say, with these

[00:31:00] drones. >> Well, the drone ambulance is the coolest thing ever because it's no one's going to stand in the way of a drone ambulance, right? it's there to save somebody's life, but that'll unlock all the technology, all of the airspace, all of the regulatory barriers and also prove the efficacy. >> So, that that's going to be a great really cool stepping stone. I can't wait for the >> one of the one of the substacks I put out was about the fact that we're heading towards a point where you can know anything you want, anytime you want, anywhere you want. We've got orbital satellites. We have the 200 satellites from Will Marshall uh at Planet. And then we're going to have an aviation layer from the flying cars and these drones imaging everything at centimeter uh and subcentimeter resolution and then all the autonomous cars uh you know gathering terabytes of data on the road. So everything is going to be imaged very soon and >> you know the spooky side of that obviously is is loss of privacy if you believe you have privacy. The positive side is that you know there's no crime.

[00:32:00] Um I put out a part of that blog saying when people are observed they act better. Uh you know I got a lot of negative feedback on that but I think the fact >> I can imagine >> it's true. I think when uh when there's someone when a desk bot has a CNN camera pointing at them right >> they do less >> they do they they behave differently in the global stage. One of the foundations I used to support was the Lindberg Foundation that would fly drones over herds of elephants. Uh, and the poachers would stay away when the drones were flying over them. So, >> well, you want to hear a funny funny story from China? Um, Sean, my son, who just got back from China, was talking to a a guy who was mansplaining the entrepreneurship vibe in China and how to build a great company. And Sean said, "Well, it's all about the team, right? this is what we we preach at Link Ventures. You got you get great people, they succeed every time. He said, "No, no, no. It has nothing to do with the

[00:33:00] team." You're like, "Well, then is it the business plan?" He said, "No, no, no. It's what the government needs next. That's the only thing that matters." >> Wow. >> You're like, "Wow, is that discouraging." Uh, so I think, you know, with the loss of freedom and privacy also comes the loss of innovation. So, I I would think that I don't think the drones are going to be, you know, taking away all of our privacy and all of our freedom. I don't think that's a real issue. But in general, the slippery slope does kill innovation and entrepreneurship. >> Alex, should we talk about the innermost loop? >> Let's do it. >> All right. So, uh, our first story is out of Switzerland. Um, and, uh, it's an important one. Uh, you know, Switzerland just voted to lift its ban on nuclear plants. So, after Fukushima back in 2017, they phased out nuclear completely. uh now they're reversing course and just to give you a sense you know nuclear uh has been very slow the country that succeeded so incredibly well is France who has 57 operating

[00:34:01] reactors the UK has nine Spain has seven uh Switzerland has four aging reactors uh that supply 40% of its power and they were all due to be shut down uh they're going to be upgraded instead of being shut down interesting I was on the on the zoom earlier today with Rames Nam Salem and Romez is one of the most extraordinary thinkers in energy and we should have him on the pod. I mean uh >> we definitely should. >> He would do an extraordinary job giving us an overview of all things energy across solar batteries and so forth. And he was saying the reason that France actually succeeded as well as they did is because they mass produce a single reactor design instead of starting from zero and where the costs escalate and get out of hand. Uh I asked him whether he thought uh other European countries would follow suit and be able to implement nuclear and he was like nope not going to happen. But uh it's interesting that the buzz on nuclear is beginning to soften and the need is

[00:35:01] significant. Alex, your take on this? >> Europe's in a bit of a bind. So maybe here's a really relatable story. Whenever I'm in the Swiss Alps and it's not the winter, it's very difficult to find air conditioning. And I I think Switzerland and a good portion of continental Europe has a real energy crisis. They have lost access to cheap Russian oil thanks to recent events. They, except for France, underinvested in nuclear energy. They aren't this amazing native producer of their own solar PV. And they have a culture that one can sort of theorize where the culture comes from, but a culture arguably of energy scarcity. And now as global temperatures are rising and as power consumption is increasing, Europe is having to do an about face and discover sort of learn to love nuclear energy, learn to love energy in general. and the the risk as we've talked about

[00:36:02] previously cite to the EU 2031 scenario and other scenarios Europe is going to need to start to radically increase the power consumption and power production per capita and nuclear is a veision in particular is a very attractive way to do that otherwise Europe will smolder in under heat domes including the one that right now over the past week or two Europeans have been suffering ing under I forget the exact statistic, but thousands of Europeans are dying due to heat overexposure every year. It's it's a startling statistic and it's unnecessary with better air conditioning and higher energy per capita. So I think this is the obvious trend of the future for Europe. >> Yeah. >> Yeah. I mean the good news is AI is turning energy from the though AI demand, it's going to turn energy from an environmental issue into a a capacity issue to commercial profit-driven issue.

[00:37:00] Yes. >> Well, that but but at least they knew a national capacity issue like every country has to deliver enough energy >> and it's going to get it from from fision in the in the short to medium term until fusion or whatever come along to cover the base load. >> So, let's talk about let's talk about fusion in our next story. Uh you know, interestingly enough, you know, the joke about fusion has always been it's 50 years away and holding. Well, it's now here. There are some 50 privately funded fusion companies that have raised about 6 billion. Uh, two US companies lead the pack. It's Helion, which we're going to talk about, and Commonwealth Fusion. I had Bob Mumgard, the CEO of Commonwealth Fusion, on stage with me at the Abundance Summit. They're expected, they're building a tokamac uh like design. They're expected to build their first 400 400 megawatt plant back in mid 2030 circa 2032. But the second story here is Helion. Uh

[00:38:00] it's a Sam Alman back company. He was the largest early investor back in March 2012 and until just two months ago he was the executive chairman of the company. Apparently he's stepped down now so Helion can actually do some largescale partnerships with Open AI. And on June 16th, the news here is that Helion cleared the required Washington state regulatory approvals for its Orion fusion power plant, which is intended to supply Microsoft with 50 megawatts of power starting in 2028. So in success, this is the first fusion plant coming online. It's relatively small. 50 megawws is, you know, we talk about gigawatt uh level plants. Um this is 50 megawws. Uh they've raised about a billion dollars at a $5.4 billion valuation, but it looks like Fusion is finally here. I've got a video showing how Helion works because it's a unique design. I think it's worth discussing, but Alex, do you want to comment before

[00:39:00] I show the video? >> Yeah, maybe just comment. So fusion or or the lack thereof has long in futurist circles been the the whipping boy uh of why long promised technologies never happen. But actually if if you look at one of the figures of merit for fusion the so-called triple product which is a product of the density of the plasma the confinement time of the plasma and the temperature of the plasma. There has been steady progress for the h past half century toward self- sustaining and net positive in terms of power production fusion reactions over the past 50 years. This has been sort of not just it it's not the case that there was suddenly some recent unlock although arguably economically there has been in the form of high TC high superconducting transition temperature ribbon that's very helpful for certain architectures of fusion reactors there has been continuous progress this entire time so I I think there's an interesting

[00:40:01] parallel that one can draw between fusion which is arguably achieved by compressing enough matter into one volume that you achieve net power output and AI/ASI which is arguably achieved by taking enough human knowledge and compressing it into a small enough information theoretic footprint until you achieve really a phase transition that produces prompt engineering and large language model behavior all of that strong parallels I think they're both inevitable but they're both inevitable as I'll make a stronger uh analogy which is if you were watching the right metric or the right figure of merit over the long term you could see both of these from 50 years away you could see or maybe 30 years uh at a minimum >> slow linear growth over time >> you just watch the compression over time arguably with large language models and AI if if you were say uh watching the

[00:41:00] Hutter Prize if you're Marcus Hutter and it's the late '9s and you're watching the ability to compress the English Wikipedia over time you could see LLM and AGI happening from decades away. Similarly with Helion and all of its competitors and you're watching the triple product you could predict when this is going to happen and it's imminent. >> Yeah, >> I think the I think there's something incredible here because this is such a foundational technology for abundance, >> right? >> This is the abundance thesis or Sure. That's it's the foundational uh technology for this because once you have clean and cheap and and dense energy, cost of computation, desalinization, transportation, manufacturing, agriculture, I mean everything becomes the cost of just the materials at that point. So this is such a big deal and it's it's hard to get one of the hardest conversations I have with with CEOs and with companies and especially with public sector is the fact that energy is becoming abundant

[00:42:00] over the next few years. And when energy becomes abundant all sorts of other dominoes fall. >> Energy is the number one coralate to GDP to health to education. The more energy a nation has the better it is across the board. uh and and this is something that Europe needs to learn. Uh you know, interestingly enough, the challenge here is the fision plants, right, the small modular reactors and the gen 3 plants um are still not going to come online really till the early to mid 2030s. and the fusion plants, you know, getting up to 400 megawatt plants like Commonwealth Fusion or getting Helion up to that level. Again, those are not going to be coming online till the early to mid 2030s. And so, the question is, where do we get the energy from? Now, I had that conversation with Rome and he says it's from the grid. Uh that it's going to be from the grid and that we just need to make use better use of the grid. Uh, and

[00:43:02] he's got a company, Alex and Dave, called Aentic, uh, that basically is sucking down energy to batteries, uh, in the middle of the night, you know, between 1:00 a.m. and 6:00 a.m. and then pumping that energy out during peak storage. So, there's plenty of energy on the grid if you could time shift it. So, I think that was fascinating. >> Yeah. I I think one of the questions that I don't hear enough people discussing is what is the killer app of fusion going to be? It seems obvious we're going to get it. Barring some surprise, not anticipated. But will fusion arrive in time to be transformative for terrestrial data centers? Maybe, maybe not. Will it be helpful? >> Yeah. Will it be helpful for orbital data centers? Maybe. But there's also a lot of solar in >> there's a 93 million mile away fusion plant that works really well in space. >> That's right. >> I'll tell you one killer. Sorry. Go ahead, Alex. So, so the the punch line I was going to gesture at is I I think

[00:44:00] actually space propulsion is one of the killer apps. If if we get compact fusion reactors then like that's a wonderful application. >> Yes. My my 9-year-old science fiction self loves that. >> Yeah. >> Yeah. hand in hand with that uh if any material scientists or chemical engineers want to work on if we have fusion then any storage mechanism even if it's inefficient as long as it's clean is suddenly viable. So if you have cheap cheap cheap cheap cheap virtually free fusion energy and you can put it into a car in a cheaper way than a lithium battery right now you have to have some degree of efficiency. You don't want to throw away electricity but postfusion you won't care about the efficiency of the reversible reaction. So anything is good and that's true for launching rockets too. You know once once you've got fusion energy you can create any reversible act reaction very efficiently. Then you can port it out to your space station or to your moon base, have it do whatever it's going to do,

[00:45:00] come back and recharge it. You don't care if it's only 10% efficient. >> If you remember Bob Mumgard, again, the CEO of KML Fusion, when he was on stage, his goal there once he gets his his uh his unit working is to is to pump them out to create a a uh you know, the machine that builds the machines. The same thing here for Helon. I've got a short video that explains how Helon works. And given the fact that it may be the first fusion plant coming online and it's unique in how it works um using uh magnetically propelled plasma and then magnets to pull electricity out of the plasma. Let's take a listen to this. I think it's valuable for our listeners to hear about Helon. >> Helon's pulse fusion device directly recovers energy which is used to generate zerocarbon electricity from fusion. It starts with helon's fusion fuel dutium and helium 3. These fuels are injected as a gas into Helon's formation chamber where they are superheated into an ionized gas called a plasma. The machine's capacitors are

[00:46:00] charged and send electricity to magnets that wrap around Helon's device. The magnets invert the plasma's magnetic field on itself into a tooidal or donut. The devices magnets fire sequentially, accelerating the plasmas toward each other at a velocity greater than 1 million mph. They collide in the fusion chamber and merge to become one hot dense plasma. In the center of the device, the machine's magnetic field is rapidly increased, compressing the plasma with a powerful force over 10 Tesla. While these fusion reactions within the plasma convert matter into new energy, which strengthens the plasma's magnetic field. As the plasma's magnetic field gets stronger, it pushes back on the magnetic field of the machine, causing a change in the machine's magnetic flux. In accordance with Faraday's law, this change in flux induces current in the machine's coils, which is directly recaptured as electricity and return to the capacitors that originally charged the magnets around the machine. >> You know, we really are living in the future. When I see that, it's like extraordinary. And their goal was to mass manufacture those helion plants.

[00:47:00] >> Well, if I had to cool too, is that that Helion raised a billion also Commonwealth Fusion. Remember we had dinner with him in Riad, March, and he had just raised a billion. So, you know, when we were at MIT, the budgets for this were in the tens of millions. >> Research budget. Yeah. >> Research budgets. Now, suddenly, you know, we've said this on the pod many times, but we're actually truly investing in the commercial sector in hard science for the first time in my lifetime. But something great will come out of those two $1 billion investments for sure. >> I mean, Alex, look, the to book end this once you make energy abundant, every other scarcity becomes a negotiable. It's it's probably also worth I think pointing out what the so what of that explainer video is. So unlike many other fusion architectures, the whole point of Helon's architecture is direct recovery of energy from the the fusion the fusion plasma in in a more conventional say um takome style or uh or other fusion

[00:48:03] reactor there there's a bucket brigade of energy production. And you create the plasma through inertial confinement or through magnetic confinement. And then the plasma will be used to heat something, maybe water, and that produces vapor. And then the vapor goes into a turbine, and you turn the turbine, and that you recover electricity from the the turbine uh inductively inducing via magnets, currents in wires, and it's like a 10-step process. The the whole point and what's potentially quite seductively attractive about the helon architecture is you're just directly recovering from magnetic fields that are being induced by the the plasma and then currents induced by those magnetic fields. You're almost directly recovering free energy from the plasma. So you're skipping a whole bunch of steps. It's potentially a lot more efficient. It's potentially a lot. I was going to say a moment ago I if I had to pick a sort of pattern match

[00:49:02] mi a Mr. Fusion from Back to the Future part two architecture and identify the archetype of any one of the the now many fusion startups that are out there. I think Helion is the closest to being a Mr. fusion startup because all of those extra step steps that are being skipped could lead to potentially radical compactification of the ultimate fusion implementation. So, it's very exciting. >> Yeah, it is. It's a beautiful beautiful design and again something he can mass manufacture uh and you know where does it go? It goes into every every township uh you know depending on the size, every city uh every place that you need base load energy production. Compact Fusion is going to be a thing. >> Well, if you told me that I'd be listening to a little chipmunk voice explain Faraday's law. >> I know. It was like, am I running this? Am I running this at 1.5? No. That's the voice they chose. All right, let's jump into AI and a really fun story to kick

[00:50:00] us off. Uh, there's a $1.8 million incentive prize that was founded by Nat Friedman, former CEO of GitHub, and Daniel Gross. Matt, I know Nat is your friend and roommate. Um >> he was my first roommate at MIT. Fun stories. >> And and that was on stage in March of 2023 at the Abundance Summit and he announced the Vubvius challenge. Uh and here it is being won uh you know some 3 years later. So the challenge was there are these scrolls that were basically buried and burnt under Mount Vuvius back in 79 AD. Uh and the scrolls are fully carbonized. you can't open them and read them without destroying them. So they said, can we use technology, you know, can we use CT scans to gather the data and then use AI to read them? Well, uh, for almost 2,000 years, they've been unreadable and they have just been one. So, uh, this is the first time it's

[00:51:00] done. You can see here in the image uh these uh these you know scrolls of ancient Greek that have been linearized and laid out by the AI 22 columns of ancient Greek text uh and there are still hundreds of scrolls that can be read. I mean this is using AI to basically do uh you know look back in time. Uh, Alex, this is uh must be a favorite one for you >> and not just because of the NAT connection. Objectively, I think computational archaeology powered by AI is going to be utterly transformative in the future. I've argued from time to >> before. Sure. >> Yeah. The the killer app of the singularity is superpowering computational archaeology. And I'll inevitably cite to Nikolai Fiorov, one of the the fathers of the strain of philosophy called cosmism. the idea that humankind's common task is to essentially resurrect every human who's ever lived using technology. And I see

[00:52:02] in the Vuvius challenge the very beginning of a a larger arc of technological progress that may require completion of the this singularity that we're in to fully run its course. But imagine just as a thought experiment, imagine if we could do what the Vuvius challenge did, not just for say performing high resolution scans of the positions of ink uh or the uh the X-ray analysis of small blotches of ink in order to recover scrolls that were otherwise preserved from uh the eruption of Vuvius. But now imagine being able to do this at a planetary scale. Imagine that somehow, not going to say specifically uh what the mechanism of action would be, but imagine that we're able to scan the earth and gain fine spatial and temporal precision or position, momentum, canonical coordinates, if you like, for every atom on Earth and imagine what if we feed the

[00:53:04] entire Earth state into an AI, what we might be able to recover about Earth's history. I think the answers would be quite transformative. One of my favorite anecdotes is environmental DNA where if you go for a walk outside, you may or may not realize this, but you're just drowning in DNA that's been aerosolized from animals alive and dead. If you look, if you dig into the soil, if you dig into say a soil near a cemetery where human bodies have been buried, DNA has a surprisingly long half-life even under environmental conditions. So there's a lot of state left over from Earth's past, not just in these scrolls that were preserved by volcanic eruptions, but in general, and I think again idiosyncratic position here, but I think with strong enough AI in combination with strong enough scanning technology, some point in the future, we will be able to recreate large fractions of our past light cone.

[00:54:01] >> Well, you know, this is what Colossal is doing in a way, right? going and extracting DNA from fossils, bringing back the direwolf, bringing back the woolly mammoth uh in a very limited slice and and this is uh taking that to extremes. >> Yeah. >> Yeah. There's there's another angle to this story too. If you if you're watching this podcast live and you look at the image and really zoom in on it, uh AI is very very good at uh interpolating these fragments, these little like if you look at the characters, no human being could ever reverse engineer what that original character was. But the AI is really good at filling in those blanks. And it's not regular LLM AI. It's not your, you know, your your anthropic or your OpenAI transformer. And this is where uh Peter, you know David Seagull, right? The the founder of Two Sigma. Sure. It's on the board of MIT. He has a project called Project Open Athena, which he's hugely funding, which is designed to give AI compute resources to people who have alternate versions of AI that are not

[00:55:02] necessarily transformers that are very, very good at these types of problems. And so there are many, many, many of these. And you know, as Alex was describing, if you wanted to look at fragments of DNA that are lying around and reverse engineer what happened in that room, that's a really good use case. But, you know, all of these world events, you know, historical events leave a little trace that's kind of scattered around. And there's usually only one interpretation of history that could have created that trace. Impossible for humans to glue together those fragments. But it's not LLM AI. It's it's it's you know core neural network AI that's built from the ground up to solve that problem. >> Let me do a shout out to the non-technical founders out there. You know if you're you if you got an idea for a technology or for a company but you're not a technologist and you want you know it's your dream to make it happen. Imagine being able to use an incentive prize like this to actually aggregate the best experts in the world to come help you solve your problem.

[00:56:01] Right? So, uh, in in in this case, you know, a $1.8 million prize probably brought, you know, on the order of tens of millions of dollars, if not uh more uh of genius to apply and solve the problem. So, think about this. This is what this is the basic principle of X-P prize uh to get people from around the world to focus on solving a problem. and we get uh 30x the prize money spent cumulatively to to solve a a challenge like this. Selim, >> I I wanted to stress the prize model in the incredible powerful. What what really strikes me in this is the before and after the image of before and getting really actual data and information out of it is so mindboggling. But the audacity that you think you can do that and I think this is this is the abundance thesis again that challenges we never thought were solvable fall as a result of the technologies that we're building. >> Voice agents are just software but software deserves a real development

[00:57:01] platform. I'm Nick Leonard, CEO and co-founder of Voice Run. Voice Run is your runtime and development platform for voice agents. On Voic Run, agents are built and configured in code. No limiting, no code platforms. For developers, that means total control. And for enterprises, that means extensibility that meets your complexity. We've built Voic CLI first, meaning we've kept your cloud code, codecs, and even your open claw in mind when we built it. Your assistant of choice can build and deploy voice agents, can test and simulate scenarios, and can analyze and evaluate at scale. In other words, we've closed the loop on voice agent development. We don't build demos destined to fail in production. Voic is where the best voice agents happen. Visit us at voiceerrun.com. All right. Uh let's move to the SpaceX universe. Uh Gro 4.5

[00:58:02] uh is coming out based on a 1.5 trillion parameter V9 foundation model. Interestingly enough, Elon has made the claim that he's going to iterate a new model and release it every month for the rest of the year. Alex, let's go to you on this one. And he said something, I think even spicier, if I understood his announcement correctly, that he was going to start pre-training every month. Not just distillation cycles or not just post training or fine-tuning cycles per month, but start a new pre-training run every single month. That's >> completely a completely new model from scratch. from scratch. >> From scratch, which means pre-training, which is I mean it's audacious, it's brute force. It's exactly, I think, what the world expects of of Elon, a brute force attack. Um I I've had a number of folks since we first discussed um in an earlier episode, my comments about Grock being put on life support in favor of SpaceX's hyperscaler resources being handed over in

[00:59:01] >> You got a lot of of hate mail on that one. >> I I I got some spicy comments. I I I had people saying, "Okay, well, Elon's announcing this, Elon's announcing that. Are are you retracting your comments about Grock being put on life support?" And I I think again, my comments may have been misconstrued. I want the frontier to be competitive. Right now, we are in a arguably a duopoly between OpenAI and Anthropic. They're just running away with the race with Chinese openweight models a few months on their heels. And I want there to be a competitive frontier. And I think Grock is one of the possible competitors along with Gemini and maybe Meta will come up with something eventually. I want it to be competitive and Elon's strategy historically visav XAI has been brute force and I think hopefully as SpaceX brings more and more compute online this sort of brute force approach where he has eventually more compute than

[01:00:00] everyone else in combination with off-the-shelf algorithms maybe this will work. I I see the beginnings with Grock 4.5 in combination with cursor. Right now the cursor uh acquisition is taking the form of post-training of models that he already had in the near future. Elon's promised that cursor is going to be part of the pre-training recipe. If he can make that work, I think Grock has a fighting chance to join the frontier through brute force comput efforts. >> There's a few of the things he's doing. First of all, he's got, you know, tens of billions of dollars of dry powder now to focus on this. The second thing is, and he's announced he's bringing in his smartest players from SpaceX and from Tesla to work on XAI. He is by no means giving up the ghost here. Uh, he wants to be number one. He wants to beat open AI. He wants to create, you know, Grock as the ultimate greatest seeker of truth. Uh, and I again, I would never

[01:01:00] bet against him. >> Yeah. I think the best bet here is he will brute force his way back to the frontier. That's what I'm hoping will happen. >> Yeah. Well, >> well, he also doesn't describing >> Yeah. What you're describing as a two- horse race, he doesn't perceive that at all. He thinks it's still a race against Google specifically because >> the the training directly toward a customized chip is a 10 to 100x unlock and he doesn't perceive uh Anthropic to be near there. And then OpenAI has some activity there, but it's nowhere near but but Google has already got, you know, the their whole vertical monopoly stuck together. And so he he doesn't think he's going to lose because he thinks that he's going to actually be the first to have a reasonably good model that then is custom silicon that supports the model instantaneously with the design of the chip being AI. >> You know, we're seeing verticalization verticalization win every race here. We'll see it in the space industry. we're seeing with Google, seeing with

[01:02:00] XAI. I mean, it's it's fascinating. Seline, please. >> Yeah, there's a thought there's there's an idea here that could allow him to leaprog even faster, which is we're move moving from models that were built on human artifacts towards models being trained on the actual process of human machine work, which is where the cursor data becomes really useful because that creates a flywheel where you have a better model, more usage, uh, richer workflow, and then a better model, right? And I think that's going to be serve him very well in the future. >> I'll comment on on that point narrowly. I think it's an it's an interesting debate one could have. So the cursor acquisition I think I I I viewed this at the time commented on this on the pod previously. I viewed as a brain transplant for the future trajectory of Grock given that chat GPT also as going through the same brain transplant of making codeex essentially a model that or class of models together with scaffolding that were optimized for code generation and recursive self-improvement that's becoming the new

[01:03:01] mainline chat GBT by analogy XAI and SpaceX acquiring cursor post IPO to make cursor essentially The new mainline Grock I I view as an analogous move. However, the data set from cursor which consists in part my understanding is lots of reasoning traces driven from developers who wanted more codegen. I think that buys Elon sort of a a leap to the near frontier in terms of code generation. But it will still be incumbent on Elon/XI/SP SpaceX to achieve their own recursive self-improvement loop. You can only get so far by postraining on developer or user traces. At some point, the models need to start developing better models. And that's been historically, I think, a strength of Anthropic. Probably a weakness of XAI, but maybe he can brute force himself to the front of the recursive self-improvement loop. >> Let's jump into a few anthropic stories.

[01:04:01] Anthropic's flagship model, Fable 5, has been offline for 15 days because US government pulled it for national security fears and hopefully we've talked this at nauseium. Now, Axios reports it may be back within days. Uh, Secretary Lutnik accredited, you know, credited anthropic for working on the risks through the Pentagon and NSA. They still haven't signed off on that. Uh, interesting enough, Stripe recently reported that they ran a test using Fable 5 to overhaul 50 million lines of codebase in a single day. Uh, work that will have taken engineers many months. Uh, the government's treating Fable 5 as a commercial AI model like a like a controlled munition, taking it offline and repermitting it by users. Uh, and we're going to have to see a a how this evolves in the the coming days. So let's talk about this Fable 5 coming on and Enthropic is another story Alex if you want to cover that one too. >> Sure. So I I think there are a couple of

[01:05:00] interesting notes coming out of this if Fable 5 as I I do expect will eventually become reavailable. One of the the the more interesting takes I think is this will have been a period of a few weeks when allegedly Chinese organizations that were leveraging access to anthropics frontier models or near frontier models for reasoning trace distillation will have been denied that access. So, we talk on the pod all the time about how the US maybe has a a 3-month lead or a six-month lead or an 8-month lead, depending on how you count. This there's there's a certain sense in which this one monthish shutdown, future perfect tense, may have or will have denied China at least a month of catch-up time. That's a generous interpretation. A less generous interpretation is that this will mark will look back through time. Historians will look back and say this period in time marked the period towards the uh

[01:06:02] the middle or the endgame of recursive self-improvement when months counted and the permitting of frontier intelligence became almost a a zones of thought to borrow from Verer Vinci or a block system to borrow from the Cold War when either before anyone could access frontier intelligence versus after when now you have to be a US person and there's strict export control for capabilities and there's a non-prololiferation regime where you have to gain access if you're a non- US person you gain access to models that are maybe a few months behind the frontier but I also think a few years from now when we look back on this time I I think this will have been yes there was a phase change in terms of the diffusion of frontier models but I do think sometime in the next few years we're going to get to the end of the recursive self-improvement rainbow and

[01:07:00] there's going to be a perfect model and we'll look back and say this was just a period of months you know a delay but ultimately everyone is ultimately going to figure out what the perfect model looks like. >> Was this period of a month also a chance for a lot of critical systems to to safe themselves against fable 5? the most essential ones maybe but by and yes there was the standup both within the US government uh of uh vulnerability scanning and outside the US government we saw three or four independent nonprofit or for-profit organizations stand themselves up to do bulk vulnerability scaling using Fable 5 but I I think to the extent pauseism has has its day in the sun I I don't think this actually decelerated any AI at all I I think this is a net accelerant because even though public sort of private >> I'm not thinking about decelerating AI. I'm thinking about decelerating black you know black hats from being able to get in there and and penetrate.

[01:08:01] >> I don't think so. I I I think black hat capabilities are proportional to capabilities overall. And I think what we saw during this time is Chinese models like GLM 5.2 to gain a tendency for anyone who wants near frontier capabilities to do essentially whatever they want with them. They may not be as capable as Fable 5, but this creates enormous pressure on Chinese organizations and the Chinese frontier labs to catch up. And so I I think as with the original pause AI movement, it had the net effect of accelerating capabilities globally. Same idea here. >> Uh quick two implications from this slowdown. I just want to point out one for investors, right? regulatory risk is now one of the first order variables for you're looking at companies um because it's real. Uh and the second for technical founders is don't build your product or your company on a single model. You have to make sure you're able to swap out models because you have no guarantees as we're going forward. And

[01:09:00] Dave, you saw that. Um do you want to Dave and Alex, you want to talk about the sonnet announcement that came an hour ago? >> Dave, you first. Well, I mean, it's really obvious that uh AI is sold out and that uh when Fable 5 came out, you know, they doubled the price on us and but you had to use it um because it's just so good. Uh so it's it's pretty clear that Sonet 5 now is a way to kind of fill this gap until Fable 5 is back out. But the price point is very high given the amount of compute that they have to use to deliver it. But people will still buy it because again AI is sold out. So you see the revenues at Anthropic going through the through the roof and it's because the demand for AI way outstrips the underlying chip supply and so you know the byproduct of that is a lot of things. You know only the very top of the mountain use cases are going to get access and then after Fable 5 comes back out you know I agree with what Alex was saying a minute ago. This

[01:10:00] moment in time will be remembered in history. This is the the intersection of AI and the government that's never going to go away now. But not every person on the planet and not every company on the planet is going to be able to access the models and it's supply constrained at the same time. So then there's going to be preferential routing. Sonet 5 is is a a kind of mediocre capability at a high price point, but people will still need to buy it. Uh and then Fable 5 will come out at its extremely high price point. That's my read on Sonnet. >> Alex, any addition? I think this is a bizarre announcement. Admittedly, this is a hasty analysis since set 5 was released right before we went to air here. But I I've been trained as as I think the majority of sophisticated users have been trained to expect that the sonnet series from Anthropic would represent some distillation of the opus series. And similarly, the haiku series represents a distillation of the sonnet

[01:11:00] series. And that as as you go down towards smaller, lower parameter count, more distilled models, you see some optimal frontier emerge in price performance space where performance uh at least throughput goes up, price per token goes down, and performance goes down. And maybe I'm missing something and maybe the answer will reveal itself in the next few hours. But just looking at the the the cost versus performance at agentic tasks curves that Anthropic released with Sonnet 5, it's a little bit bizarre. On the one hand, Sonnet 5 is uh an optimal frontier, sort of a paro improvement over the the last version of Sonnet, Sonnet 4.6. But Opus 4.8, 8 which has been out for uh for what in these singularity times passes for an eternity is better. It's it's superior on a cost performance basis. So I'm I'm not 100% certain I understand

[01:12:00] what Anthropic is hoping to achieve with Summit 5. >> I can tell you Alex it's everybody's working on these frameworks where you can bounce from model to model while keeping the context intact and all of the work that's piling up the the the prompt history and and the intellectual property is piling up like crazy now. And so you have a choice between working in an open framework, but cloud code and cloud co-work are super compelling, you know, with all the MCP wrappers and connectors already built in. So the easy choice kind of the Apple like I'm going to pay more but it all works choice >> is to go with an allclawed stack and then when you're working in Opus 4.8, if you have a simpler question, you go to sonnet or it automatically goes to sonnet and if it's an even simpler question, it just goes down to ha coup. So that's the easy way to go. But the more cost-effective way to go would be to bounce over to a different model, but then you have to use a third party context management platform. So that's the tension. But this is kind of like Anthropic becoming the apple of AI where you know you're overpaying by some

[01:13:00] insane amount. >> I feel like there my intuition is there's some branding going on behind the scenes that we're just missing. Like maybe in in the sense that Fable and Mythos are the new high-end models. Maybe there's some sense in which Sonnet is the new lowend. Like Sonnet is the new haik coup and just viewing it through the branding of Sonnet is maybe incorrect. Maybe we should be thinking of it as the haik coup level and it's just that Fable 5 isn't accessible. There there's some weird paro optimal frontier I think that's missing in order to explain why we've seen a reversion of this optimal. >> We will find out and we will get to the bottom. Welcome to the health section of Moonshots brought to you by Fountain Life. You know, AI is having an outsized impact on every aspect of our lives. How we teach our kids, how we run our companies. It also is having a huge impact on health, helping you prevent heart disease. One of the key things I'm here with Dr. Don Musalem, our chief medical officer at Fountain. Heart disease has been personal for you as

[01:14:01] well, hasn't it? >> It really has, Peter. My daughter was five. My husband died of sudden cardiac death. And so this is a topic that is one that I am missiondriven to try to eradicate. Prevention first and early detection is absolutely critical. 50% of people die of heart attacks with no warning signs. >> No shortness of breath, no pain, no nothing. >> No silent killer. >> They just don't wake up in the morning. >> They don't wake up. And so you know AI, this is our mission to advance science to try to help to one day democratize wellness. We know at fountain life when we do this CT angography with AI analytics we are actually finding that 88% of people coming in have detectable coronary arter disease but Peter what's more alarming to me is 23% of those individuals had soft plaque. This is the plaque that would not traditionally be seen on CT looking at calcium scores alone. And this is the plaque that we must intervene with with the multimodal testing we're doing, including diagnostic laboratory studies partnered

[01:15:00] with healthy lifestyle recommendations. >> So listen, make sure you understand what's going on inside your body genetically, metabolically, and cardiovascularly. You can know and it's your obligation to know. So check it out at fountainlife.com/peter to find out more and really make sure that you're the CEO of your own health. All right, back to the episode. All right, mates. Let's jump into data centers and space. And for that, we're pleased to bring a friend on. Uh Philip Johnson is the co-founder and CEO of StarCloud, a startup building space-based data centers. StarCloud has raised about 200 million with its last round over a billion dollars. Famously, Philip's company launched StarCloud 1, uh the first NVIDIA H100 GPU in orbit. And apparently, Philip, you've trained your first LLM in space. Uh, StarCloud launched in November of 2025 on Falcon 9. Welcome, Philip. Pleasure to have you. >> Thanks so much for having me. It's a huge honor. I've been a long time fan. So, very privileged to be here.

[01:16:01] >> Awesome. >> It's mutual. It's mutual. >> Yeah. I mean, I I a lot of stories we want to talk about in data centers and space uh to wrap up today's episode, but uh let's start with a little bit about StarCloud. tell us about the company, your vision, where are you guys, what have you done with the H100 and uh Yeah, let's go there. >> Yeah. Yeah, for sure. Uh so we started about uh two and a half years ago in January 2024. Um we're a team of about 20 engineers based in Redmond, Washington. Actually, right down the road from the Starink manufacturing facility. So about half our team came from SpaceX and the rest are from the data center companies up here. So AWS and Azure and the others. Um and then yeah so we launched our first spacecraft StarCloud one in November last year had actually five GPUs uh two from Marm and three from Nvidia but the most important one as you mentioned was the Nvidia H100 and so with that we were the first to train a model in space we trained uh we trained nano GPT for carpathy which very tiny model but it still counts

[01:17:02] >> totally counts >> and then we actually were the first to run a version of Gemini in space so we ran Gemma which is the deep minds cut down version of Gemma of Gemini. Um and then we've done a few other things. So now we're doing much more kind of useful workloads. So we've just been doing high power inference on SAR data synthetic aperture radar data um in collaboration with various DO entities. Um and also we actually just played Doom. We we ran Doom on the space on StarCloud one >> as one does. little there probably >> and and before we get into it, I just want to say you guys have been um ahead of this trend more than most. So, thank you for your uh support. I know Alex is is often uh being vocal about his support and and Dave gave me a shout out early on and Peter, I know you in the interview with Elon, you were also very supportive. So, really appreciate it. >> Yeah. Well, you know, you're building the Dyson swarm and uh and this is

[01:18:00] important for for our great great grandchildren, for all of us. Philip, just speaking for myself, I want there to be multiple Dyson swarms. We can't have a solar system scale monopoly. >> Agreed. We maybe a matchka swarm so we can have swarms inside swarms inside swarms. >> So there's Jupiter and Saturn. Plenty of atoms left to disassemble. >> So So Philip, give us a give us a sense of where, you know, you gave us a sense of where you are right now in terms of StarCloud 1. Uh but where do you go next? Yeah. So, we've got three launches booked next year. Uh, we're launching StarCloud 2 in booked for January. Um, it's about 100 times the power generation of StarCloud one. We'll have by far the largest commercial deployable radiator in space. Um, and so yeah, that's going to have a whole bunch of H100s also flying the black chip from Nvidia and also some other interesting things like some Bitcoin mining AS6. Um, and also AWS Outpost which is an on premises server blade. So we can run um

[01:19:02] like an instance of EC2 on orbit which is useful for the O customers. Um and then as soon as possible we'll be launching a much larger spacecraft what we're calling StarCloud 3. It's a uh 200 kilow 3 ton spacecraft which will fit on the Starlink the Starship head dispenser form factor. Actually I can if you guys can see this I can even show you. We've got it welded up a version of it welded on the on the ceiling, the chassis. >> No way. >> Just so you get a sense. So this is this is the the length of the chassis of it. So it's about 6 m long. And with this we'll have huge 100 meters deployables hanging off the side of that. >> How much power are you generating for that to to power that? >> That's 200 kW. Um and we can >> three tons. You said >> three tons. Yeah. >> Three tons. Okay. >> Yeah. and we we can fit about 50 of them per Starship. So, we're talking about um about 10 megawatts of new of new compute

[01:20:00] capacity per Starship launch. And yeah, we're hoping to be launching very frequently on Starship. I mean, they're building just absolutely enormous capacity as as I'm sure you're all aware, these two Starship Gigafactories designed to produce something like three Starships per day. So, hopefully there'll be capacity for for us to launch. Um and obviously, you know, we're looking at some other launch papers as well, but that's the primary one. So you I have to ask the elephant in the room which is when you're going in to pitch for investors and they say hey but there is you know uh you know Elon and his mega plans and Google's far behind and are you picking a niche in this area that you're going to be competitive in? >> Yeah, it's it's a great question. Um so the the main niche we're going after is to be more like an energy and infrastructure play than like our own cloud. And so for example, we've got an agreement with Crusoe um where we we essentially say to them, hey, we have a box and that box has power calling and connectivity and we'll work with you on whatever chip architecture you like and

[01:21:01] you can sell to whichever customers you like for whatever price you like and you just pay us a fee and the same way that you would pay a rental fee to somebody like Equinex, you pay that kind of rental fee to us and you finance the chips. So that's kind of the the approach we're thinking. I think um in the early days at least it looks like SpaceX is primarily going to be serving their own you know cursor gro and XAI workloads and you know in the more medium term we'll be providing a cloud service to folks like anthropic. I think it's probably a bit further out that they're looking at doing being just a pure infrastructure provider. Um though I think actually Elon did mention something about that relatively recently but that that's the idea. I mean, so in general, it's a good point because of course we're going to have a higher cost base than SpaceX because they own the launch. So long as we have a lower cost base than all of the other hyperscalers, I think we're in a reasonable position. You know, lots of um if if we have a lower cost base than OpenAI, for example, they're going to need to figure

[01:22:00] out a space solution. and either they pay, you know, uh, XAI to run workloads on XA or on SpaceX's satellites. In in OpenAI's case, I think that sounds unlikely. Or they start building their own satellites, >> right? >> Yeah. Or or they start building their own satellites, and it's possible, but I mean, they're going to be way way far behind. Or the last option is they'll look around, you know, in sort of two, three years as as Starship cadence ramps up, and they're going to be like, "Okay, we're going to get left behind if we don't get on top of this." and they'll be like, "Okay, who who's the most advanced in the market?" You know, maybe besides SpaceX. And at that point, I think we'll have um a very significant lead over anybody perhaps beside SpaceX. >> Interesting. Dave, Alex, you want to jump in? >> I've got two questions. >> Okay. >> Okay. One was two years ago, you know, we didn't have uh data centers in space in our bingo cards at all. What had you did, some of us did, some of us did, and definitely the mainstream did not. I know, Alex, you've been talking about

[01:23:00] Dyson swarm since you were probably like 5 years old. Um um but uh what has you jumped to that and say we're going to do that? >> Yeah. Yeah. Yeah. We actually started off by doing well, we were initially just looking at space-based solar. So in mid 2023, I actually just on a randomly on a weekend took a trip down to Starbase, Texas, like even before the first launch. So not as many people were looking at it back then. And I was just blown away by the scale of what they were building. And I, you know, in my head I was like, "Okay, all of the concepts from from sci-fi that I remember reading about Azimov was talking about space-based solar in the 40s even um are going to come true. It's just a matter of a timeline now." And >> Philip, if I could, space-based, you know, solar power satellites for beaming energy down to the ground. >> Yes, exactly. Yeah. So huge, huge solar panels in space and then either using infrared or microwave to beam power down. Um the main problem and we spent you know several months on the ma on the

[01:24:02] math essentially on the break even. We wanted to know okay what is the break even launch cost at which spacebased solar makes sense and we came to a number around sort of $50 a kilo where that would make sense and initially we thought okay that's kind of good enough that's starship will get there at some point but then and and you know we started working on that but then we were like okay well the problem with spacebased solar is you lose 90 or 95% of the energy in transmission from space to ground and we were looking around and saying okay once we get the power down what are we going to be using it for And even two years ago, most new energy projects being built particularly in the US were being built primarily to power data centers. So the thinking was okay well either directly or indirectly that power is going to be going into data centers. And so if we instead can find a cheap way to get the data center to space, let's rerun all those calculations to know what would the break even launch cost need to be that that business would break even, you know, would would make sense versus terrestrial. So we we rerun those

[01:25:00] numbers. We came to a launch cost break even of around $500 a kilo if we had a cheap way to get the data sent to space and then that became the basis of a white paper that we put out in summer 2024. Um and then that essentially became the basis of the company. >> Wow, that's great. That's a great story. I mean and it's an interesting entrepreneurial story for all the entrepreneurs listening, right? It's like you're going down one road and then all of a sudden you see a massive opportunity especially when you can go deep enough to look at it because the idea of space solar power satellites has been around since the god since the 70s. Gerard K. O'Neal at Space Studies Institute you know looked at his solution was to build them on the moon and then fly them to Earth orbit where the launch costs obviously are are dimminimous. >> I'm sure that would happen. I'm sure that will happen. Yeah. >> Yeah. Second question is, what are the couple of biggest bottlenecks you're facing right now? >> We are actually very constrained on launch right now. Um, as everybody is. Um, we're we're so constrained that

[01:26:01] we're trying to book now on Relativity Space's first launch in >> January. All right. I'm I'm really excited about that. I think that would be super cool to have a have a have a launch on there. >> And for those we've covered Relativity Space in a podcast ago. This is Eric Schmidt's company where he's CEO. uh he bought it uh from from from Tim and uh and and Jordan when it missed the financing and relativity space is about the size of uh uh about the size of New Glenn, half the size of Starship. >> Well, if you're building toward the Pez dispenser, actually, that's a problem. That's really interesting. How's that going to work out? >> I I Yeah, it is a problem. I think we're going to have to have two form factors. Um I mean the primary one we're working on right now is for players but um I think we're going to need a form factor that will fit on also stoke space is the only one which has a reasonable upper stage or the only one that right now is seriously working on reusable upstage. So we're also looking at a stoked um

[01:27:01] launch vehicle form factor. Um but to be frank the the relativity one is maybe just to take a step back. So the business has two phases. The first phase is while launch cost is relatively high. We're launching on Falcon 9 and others that we're primarily serving edge and cloud uh you know providing edge and cloud services for other spacecraft particularly you know DOW and Earth observation constellations and then on a sort of three to four year time frame as Starship ramps up cadence and production that's when we switch over to competing with all terrestrial data centers on energy cost but in the yeah so all of these when I say we're launch constrained right now I'm even talking about for the first business. We've got three launches booked for next year, but if you want to book anything for 2028 on Falcon 9, there's just nothing available. >> Wow. >> The the government's just plumped down 20 launches, which has bumped everything back. Um, and so yeah, unless you can get some priority and we're going

[01:28:01] through various channels to try and get some priority on that, but >> so this is GPU GPUs for use of uh processing in space. >> Yes, correct. So we we will receive for instance raw imagery hyperspectral or SAR or other types of satellite sensing data. We will instead of having to wait for a ground station and down link enormous amounts of data we can process all of that on the edge. And actually this is one of the demonstrations we've just done is process a whole bunch of SAR data, identify the coordinates of a tank and then just down link the coordinates of that tank. And rather than having to, you know, it could take three days to get enough ground station passes to get 100 gigabytes of SAR data off a satellite. Rather than doing that, we can get all of that, receive all that data optically in space, process it on orbit, and then just down link the insight. That's that's the use case we're building towards right now. >> I'm curious. I'm I'm curious, Philip. So, so the premise there is presumably bandwidth is scarce, scarcer maybe than

[01:29:00] launch. So, you have to do a lot of uh edge inference in in LEO or wherever you're doing this. I I'd love to ask you sort of a similar question that I asked Will Marshall of Planet uh in a previous pod episode. Let's project out 10 to 20 years, well past the the current bottleneck in heavy lift or heavy launch capability. What do you think as the founder and CEO of one of the incumbent Dyson swarms plural? What do you think the Dyson swarm or Dyson swarms of, call it 20 years from now look like? Does it look like Leo? Does it look like sunsynchronous orbit? Does it look like the moon? Does it look like uh Dyson swarm around the sun? Paint a picture for us what 20 years from now the Dyson swarm or swarms look like. That's a that's a good good question. I hope within 20 years we've started putting significant amounts of compute in a sun orbit. probably starting with the Lrangee points, although you probably don't want to clog them up too

[01:30:01] much, but even just a um just a distinct sun orbit uh that you know trails Earth or or is in front of Earth um because certainly you could fit about 10 terowatts of compute in the Dawn Dust synchronous orbit and then you're back to flying uh in orbits which have an eclipse, you know, a sort of n uh 45 minutes of every 90-minute That then drives the cost up significantly because you need batteries and all these other things. >> Scarcity of real estate. Yeah. >> SSO is going to get crowded. That that's you're you're one of the few people, Philip, I I hear talking this is like overpopulation on Mars talking about SSO getting crowded due to the SSO Dyson swarm and then overflowing back to other orbits. That's fascinating. >> Yeah. >> Yeah. Yeah. Well, because there's only one SSO orbit that is, you know, it's very rare and beautiful orbit, the dawn dusk sunsynchronous orbit, which flies over the terminator line. Um, I mean 10

[01:31:01] terowatts is a lot of compute. That's like 20 times the entire US power grid. And probably in 20 years, my expectation roughly is that in 10 years we might hit a point where most new compute capacity is being deployed in space. If you ask me what is the total percentage of compute in space at that point it's still probably less than 5%. In the same way you know right now most in certain parts of the world at least you know Norway or whatever most new cars coming for production line are electric but if you want to know what is the percentage of the fleet which is electric it's like 4% still and it just takes a long time to replace all of the capacity that we're building on earth terrestrifially right now. Um, so in 10 years I would say most new comput capacity will be in space. In 20 years it could be a I I would be surprised if more than half of all compute is in space in 20 years even. Um but but beyond that certainly there'll come a point and it's probably more like a 50 time frame where 99% of all computers is in space. I

[01:32:00] >> I also just have to ask second elephant in a increasingly crowded room. uh if Lyft over the next few years if heavy launch is the main bottleneck have have you is there some plan in a back room somewhere for you either to build or buy your own vertically integrated heavy launch provider if that's the main constraint >> um we are in quite serious discussions to partner with uh various launch providers probably shouldn't go too much down that yeah it's early days you know, if SpaceX can provide the capacity, we'll be very happy customers of SpaceX. You know, if not, uh, then we'll need to figure out something. Uh, if you ask me, do I think SpaceX has a monopoly and launch in five years? The answer is yes. In 10 years, the answer is no. You know, I realize >> and we'll talk about Rocket Lab's purchase uh of uranium in a moment. Yeah. >> Um, and in fact, what I'd love to do is jump into a few stories, uh, Philip, and

[01:33:01] have you comment alongside the mates here. Um yeah the yeah the the first story is uh recent conversation by Elon about uh basically earth to uh or space to earth telefan. Um so let's uh let's jump into into that. So I'm going to play a short video. This is a video clip uh of Elon speaking with the at the all-in summit and then let's talk about it after >> time frame. So the phones that are able to use the spectrum that was acquired probably start shipping in around two years. And um and then we also need to build the satellites that are going to communicate on those frequencies. So in parallel we're building the satellites and working with the handset makers to add these frequencies to the phones and then the the satellites and the phones will then handshake very well to achieve high bandwidth connectivity. But the net effect is that you should be able to watch videos uh anywhere on your phone.

[01:34:01] So uh fascinating story vertical integration again the whole stack SpaceX owns it launch satellite spectrum and increasingly compute. So direct to phone um you know is a interesting product. It's going to be space-based internet to everybody on the planet. Uh thoughts on this? It's going to, you know, we're going to see the, you know, for investors, we're going to see the telecom industry getting disrupted. Um, >> yeah. Yeah. And he didn't mention it here. >> Yeah. To to a point on vertical integration, he didn't mention it here, and I think he's talking about working with phone providers. It would not surprise me at all if they either buy or start manufacturing their own phones as well. Um, I I don't know what was your read of that. My read was he was talking about working with phone providers and not talking about building their own phone. But um at some point I would be surprised if they don't think about building their own phone. >> Well, you know, it's been it's been

[01:35:01] rumored that Tesla phones been rumored for a long time. Uh and Elon Elon famously does not work well with others. He tends to buy them or blow past them. >> So, >> and did you did you see recently the possible acquisition of T-Mobile? >> Yeah, the the rumors are out there. and also with charter communications. >> I mean, Starlink is the most unbelievable business. Starlink is gonna produce hundreds of billions of dollars of free cash flow in the next sort of five to 10 years. Um, you know, they're going to have direct sale. They're going to have unbelievable bandwidth on uh almost, you know, unless you're really in the middle of Manhattan, I think Staling will be the best option for most people. Yeah. I I can't see a world where on Starlink revenues alone, SpaceX isn't the most valuable company in the world, you know, on a sort of >> we've been projecting 10 trillion by 2030 in terms of valuation and and scaling towards 100 trillion. >> I' I'd absolutely I'd absolutely back.

[01:36:00] >> Dave, what's your thoughts on this? Well, my question actually is if we have direct satellite phone connectivity downloading videos and there, you know, that implies tens or even hundreds of thousands of satellites in low earth orbit and then data centers are going to want that same space that so is that actually going to survive the escalating needs of AI, you know, because if you figure, you know, as you said, you know, 5 to 10 years from now, almost all comput that's that's also a lot of very high value use case for that famous LEO. So >> yeah, you know, um so they're a slightly different orbit because the um the Starlink satellites, they fly around 460 km, I think it is now, but they are in a I think it's a 50 degree inclination. So they they're not going over the poles. They're mainly going up to just, you know, mid midway through Canada. Um and they're flying as low as they can. Um the actually with the AI satellites you want to fly them as high as you can

[01:37:00] almost because even in this dawn dusk suns synchronous orbit uh if you're flying at 600 kilometers altitude you still have there's like a month of the year when you have a 10% window which is blacked out um the ideal altitude to fly is actually 1200 kilometers. Um that's the lowest you can fly where you don't have any blackout um even throughout the year. Um so I think all of the yeah there's very uh between 400 and 500 km is going to get extremely crowded. Um I think where the AI satellites fly will will get very crowded but it'll be for a different use case. I don't think they're going to be competing for the same real estate essentially because >> are you going to run into Kesler Kesler effect problems if you go that high? >> I mean at scale you know we're talking Yeah. Uh the main reason people don't want to fly that high right now is actually radiation from the the Van Allen

[01:38:01] radiation belt. Do do you mean because there's less drag if you have any collision there the debris is going to stay up for longer in the >> Yeah. for millions of years. Yeah. >> Yeah. Well even even at a thousand kilometers you probably most stuff is going to de-orbit within about 50 years. So which is not great. I mean, but it's not the for example, I don't know if you know about in 1970, the US government um dispersed 400 million needles at about 3,000 km altitude because they wanted to bounce radio frequency off them, which is insane to think about that today. >> It was like an artificial ionosphere. >> Yeah, it was the most insane thing ever. >> Yeah. >> Yeah. You can't imagine it being done today. But actually every single one of those needles is now de-orbited which people don't realize because people think that um if you you know if you have quite a large satellite it will stay up in 3,000 kilometers for quite a long time. But um things which are much smaller and don't have their own

[01:39:00] propulsion because of the way the sun and moon and all of the solar wind interact together. Every so often they get closer to the earth and they get dragged in and dragged in and dragged in. There's not the Kzer effect is is something we really need to worry pay attention to, but it's not as drastic as I think a lot of people sometimes. >> That's That's good news. >> Sealem, you got a question. >> Wait, but what about cooling? I mean, cooling and radiation. Oh, sorry. Go ahead, Sim. >> No, go ahead. I was going to ask that exact question. >> You Well, we were talking about this. I forget, you know, Philip, we were talking either in Riad or at A360, I forget where, but you had this all aluminum cooling and I was like, "Wow, that'll be incredible if that works." But now sounds like you're going to move to uh to liquid cooling or some kind of a liquid uh cycling process. >> Yeah. Yeah. Well, it's it's liquid through aluminum. So that Yeah, that design is is the same as Yeah, it was in Riad, I think, that we spoke. Um Exactly. So, it's a very large lowc cost

[01:40:01] and low mass deployable radiator. So radiators we know work because the International Space Station has been doing it for 20 years. The problem with the ISS radiator is it is both expensive and heavy. And so the core >> it's a government project. What else do you expect? >> Expensive, heavy, and light. Um so the core IP of our company is yeah making this radiator cheap and light. Um it's not a new physics problem. It's a manufacturing you know an engineering problem. And so our radiator design and we've got it uh working is we've it's it's fabricated and gone through TVAC and everything is our radiator design is 10 times less mass per watt of dissipation than the ISS radiator and about 100 times less cost. >> Yeah. About 100 times less cost per watt of dissipation than the ISS radiator. So um I'm excited that that will fly in January and it will be a big milestone. By far the largest commercial development. >> I wanted to double click I wanted to double click on something you said. Did you say over time 95% of the compute we

[01:41:01] use will be done in space >> 99.9% I think over time uh >> wow >> if but that's that that's that's on Alex's Dyson swarm type time frame >> that's right so Masasan so Philip Masasan uh just came out with a statement saying he disagrees with a thesis of orbital compute because energy is only 7% of the cost compared to everything else. Uh where do you come out on that? What's your answer to him? >> Um, I I did a post about this this morning cuz uh people kept tweeting it at me, so I was like, "Okay, well, he also sold all of his Nvidia stock in 2019, so he's not always right." Um, no, I mean he is right that energy is a very small proportion. Energy and infrastructure though is actually quite well uh yeah I mean it depends on right right now chip cost is very high and so that is um by far the dominant cost but if

[01:42:02] you if you use include energy and infrastructure you're talking about at least 30% of the cost. The main problem is if you even you know to build a new energy project terrestrially you're looking at like a 5 to 10 year long lead time on just the permitting of that. >> Yeah. Uh and so that the main problem is we can do we can deploy this stuff extremely rapidly. So even if we were break even on energy and infrastructure um it would still make sense to do this but we you know we're looking at doing this about 10 times uh cheaper on both energy and infrastructure. But when I say infrastructure what I mean is we don't need um batteries, cooling towers, big chillers, backup uh backup power. Um all we need is a dirt cheap radiator. Our radiator is really dirt cheap. Um and then a lot of the other infrastructure costs are gone. It's only then the launch cost is the additional piece we have. But that as I say is very rapidly trending towards uh a much lower launch cost. >> Philip, if if I might um please just

[01:43:00] pull the thread a little bit on launch. So projecting conservatively 20 to 30 years out. Where do you think launch is going to come from? Are will we be using rail guns to launch from the lunar surface? Will we have optimistically self-replicating vonoyoman probes that are disassembling our solar system to build more compute? Where is all the matter and energy and launch coming from 20 to 30 plus years out in your mind? Um I am Elon has this great quote something like Optimus is the vonoyman probe and I I kind of agree with him like if you can get 100,000 optimiz to the surface to the lunar surface and get them to build an Optimus factory on the lunar surface uh you know then we're off to the races like then you have this insane exponential curve in terms of development and pace of development. >> Hyper exponential. >> Yeah. Yeah. Absolutely hyper exponential. Yeah. So, um I do think we'll have mass drivers on the moon and I think they'll probably come sooner

[01:44:00] than most people. Well, if it was 20 years, I think that would that if it was less than 20 years, that would be maybe surprising to me. If it was more than 20 years, I'd also be a bit surprised. I think yeah, around the that time frame. >> All right, let's apologize. I I apologize. I have one of the senior execs from State Street Bank waiting for me outside the door here. And I'm going to love watching this podcast cuz all of my questions are in Alex and Sem's heads. But I can't wait to hear your answers. Super excited about what you're doing though. Congratulations. >> All right, Dave. >> Thanks so much, Dave. Appreciate it. >> See you see you very soon again on our next pod recording. But let's move to our last story on the docket here. Rocket Lab is acquiring Iridium, creating yet another fully integrated, you know, space powerhouse. So Rocket Lab uh for those of you who don't know is a company started by Peter Beck actually sir Peter Beck it's a $64 billion company now kudos to them I mean going you know Peter had no background in launch and he built arguably uh the

[01:45:00] second tier provider for launch after after SpaceX they have their electron launcher it's a a smaller size launcher but it's launched 91 times it's got a very high reliability at this point they're building their next vehicle called the neutron on. It's about half the size of Falcon 9 and it's planned for a first launch by the end of this year. Like Falcon 9, it's got a first stage which is reusable. Um, and they're acquiring Iridium. Um, I know Aridium well. I was playing in the big LEOS in the early '90s when it got its license and started. Uh, it's started commercial service in November of 1997. And it's a 66 satellite constellation uh orbiting at about 780 km. A fun story uh I don't know if you know this Alex uh it was originally called Idium because it originally had 77 satellites which is the atomic number for Idium. Uh when they changed it to 66 satellites they did not change the name to disperoseium

[01:46:00] which is atomic number 66. Uh good marketing move there. Uh I don't think this >> also iridium I think is a little bit more stable as a a nuclide. >> Yeah. And you know it sounds a lot better than desperosium. Uh so what makes Iidium interesting uh is it's got 10.5 megahertz of bandwidth at Lband that's globally coordinated. So they go through the ITU and they get you know importantly for our viewers here you can get 10.5 megahertz in the US but can you get it in every country around the world and that's what makes it a prize so spectrum is the prize and vertical integration here is becoming the winning structure for the new space economy so owning launch and manufacturing they build you know uh at rocket lab they build their own satellites as well and getting spectrum and operations s uh is a winning combination. So, they're playing on the SpaceX uh handbook. Uh

[01:47:02] pretty pretty extraordinary. Uh thoughts for you, Philip? >> Yeah, I mean it it it's a very smart move, I think. And um it's particularly smart because yeah, you I think there's been quite a bit of commentary, people saying, you know, he's not trying to compete directly with SpaceX with this. Um and if he was, it probably wouldn't be as as smart a move. um he's really carving out a niche. And the other thing is his share price has gone to an insane multiple of his revenue and he's capitalizing on that because I'm pretty sure all of this is going to be in Rocket Lab stock. Um, and so yeah, it it makes sense to start paying for cash generative profitable companies in Rocket Lab stock when you're trading at a however many hundred x revenue uh multiple that they're trading at. >> I have to ask Philip a question just about the spectrum side. There are a bunch of obvious questions I I could be asking about vertical integration and does spectrum and uh and LEO compute

[01:48:03] want to inevitably own or be owned by heavy launch capability but I just want to focus on spectrum. So, so to the extent part of the Iridium Rocket Lab story is the acquisition of RF Spectrum, I have to ask you, do you think radio has a future or will we find ourselves 5 to 10 years from now where it's all optical frequency direct laser links and radio has approximately no future? >> Um, it's a great question. I I would lean more towards the second uh of those two options. I wouldn't say really has no no fre future. It's useful because it's cheaper because you don't need gimbal, you know, uh things, but but laser is is where everything's going. We've got three laser terminals on our second satellite launching in January with, you know, gimbal lasers. Um, we're actually just signed a contract with SpaceX to for the next 25 of our

[01:49:00] satellites, we'll have two Starlink, uh, they call it PLA, plug-and-play laser terminals, um, on our on our satellite and then one laser SDA compliant laser that can connect with the government satellites. So, yeah, lasers are the future for for Spacecoms and it's also unregulated, which makes it amazing because it's >> All right, guys. I apologize. I've got a heart out here as well. Um, Phillip, uh, a pleasure and excited to watch, uh, StarCloud 2 and StarCloud 3 make it to orbit. Thank you for joining us, Sem. Uh, are you coming home eventually? >> I I am. I'll be here for a few more days and then I'll be back. >> All right. And Alex, how about you? What's your What's your travel schedule looking like? >> Well, I don't know. I'd love to visit Leo or Sun-Synchronous orbit sometime soon. Philip, we should chat. >> We should. We should. And Peter, I think you're going to be in Paris in a in a week, so I might see you there. I think I may be there virtually. Oh, no. See, I see. >> Wait, where am I? I know. I'm in I'm in I'm in Calgary. >> Calling the cattle black. >> Yeah. Calgary, Germany, and Greece. Yes.

[01:50:02] >> Okay. Okay. >> All right. Love you guys again. Thank you, buddy. Thank you, Alex. Thanks. Take care, guys.