"Jensen Huang's Exit Could Change the AI Industry Forever" - Dylan Patel

It's not a Duo. It's a Samsung.

I've had this for... I've had foldables for three or four years.

Ahead of the curve. Ahead of the curve. Always.

iPhone Air?

iPhone Air.

Oh, two phones. You're class.

One for work, you know. One for work.

One for personal.

Good.

We'll have to fix that. We'll have to fix that. To be fair, I only...

I'm updating our priors on our... on our friendship. I thought I was texting the personal the whole time. I thought we were like that.

Like actually trying to like...

What were your... what were your guesses?

Well, the big one... the big one that everyone's been like waiting for is... is like some result from the next training run that shows that there's not another leg up beyond coding. That there is something that taste is the new mode. And for so many white collar jobs, it really does matter that you can sit across the table from someone, shake their hand. And so we're never going to replace the lawyer or the doctor or... or even augment them to the tune of because you don't even need to do the job displacement thing. It's just the fact that a software engineer can deploy $100,000 worth of AI in a year without people blinking. That hasn't happened for the marketer, for the salesperson yet. And if that does happen, the revenues do go to a trillion dollars. But if it doesn't...

No, it's not a black swan. That's uh...

Exactly. No, but... but another... another thing I would say is like I was very confident that at least for the next year Jensen would not let a company... an AI company valued at north of $10 billion fail, like period.

Like he was like, I don't... I'm not going to have that headline. I have the ability to give any company a meaningful up round and keep everyone in the game because a lot of people want the headline even though in the grand scheme of things right now a 20 billion company could go to zero wouldn't really have that much impact. But it didn't feel like Jensen would even tolerate that kind of headline just because the bears would sort of sink their teeth into it and... and um have a nice tasty uh meal.

Yeah. I mean it's... it's uh I think... I think the black swan is this, right. I think we... we've all predicted all sorts of things. Totally.

Um even with all the knowledge and insight and you know rumors. I mean I had even heard about like uh you know rumors which I didn't like put much credit to but like people in the industry like oh yeah Jensen does this with someone at... at Nvidia. I was like...

Elon... Elon has slept with employees, but not to this...

But... but his get out of jail free card is that he has like 15 baby mamas. So it's... you can't like pin that on...

And... and... and he has a lot more uh control. I think the question that we've been asking... we've been asking ourselves is like...

Yeah.

Mhm.

Yeah. Yeah. Yeah. Yeah. Which... which kind of meant the... like the... the basic analysis was like okay well if... if the whole family's there probably nothing's happening like maybe this is purely... maybe he's the purely rational economic actor he's playing it as aggressively as you can to grow the business internationally. We don't like that from a chip export position if you're a China hawk you don't like that but there is the letter of the law and we rarely like CEOs don't get fired for pushing it right up to the letter of the law. Uh, and so if you're selling the... the absolute max, like the H20, which was designed to get around the... the chip exports, like a lot of China hawks didn't like that, but they were like, ah, like that's the letter of the law. You found the loophole. You found the edge. And so, uh it... it is... it is just a complete black swan in that it's so much further than what... what anyone...

Yeah I think... I think like that's the biggest like worry for Nvidia is that now it's like a committee of people doing stuff and that's just going to make decisions slow. Um technically they could fall behind because of this. Obviously the other big aspect... there's sort of three main things right? There's the technical side. Nvidia is so ingrained in helping make decisions there... there's no one clear technical lead. I mean maybe Jonah is but then like there's a lot of people who are also directly reporting to Jensen doing technical stuff so it's hard there to move as fast. Supply chain wise right? Nvidia wants to make aggressive things, do aggressive things, lock up supply, convince the supply chain to do things that they've never done before in terms of technology and supply and locking it up to Nvidia and that's probably a lot harder to do given, you know, whoever the CEO is is probably not as charismatic as Jensen and they're not going to, you know, be like, "Yeah, sure, Nvidia, you can have 60% of my capacity or 70% of my capacity um at a price that's below market rate." Like, that's just probably tough. And then the third leg of it is like, you know, Nvidia is propping up a lot of things in the supply chain, right? Open source in America would not exist without Jensen. Um both Reflection and Thinking Machines are pushing the open-source frontier in America and both of them have massive investments and backing from Nvidia as do many other companies across the ecosystem. Um and all these application companies rely on you know open models right whether it's the Harveys, the Instincts, the Sierras, they all use open models. Um all the inference providers which are you know multiple of the 10 plus billion dollar companies all rely on open models from China. And if we're slamming the hammer down now on China way harder because the biggest defender against restrictions was Jensen and his team, um what now happens is given their credibility is out the window and they're being investigated and subpoenaed and whatever is going on on that side, then there's going to be a lot more restrictions in which case Chinese models are, you know, do they continue to progress at this current pace? Um and if they do continue to progress, do they open source everything? Um these are... these are real questions out there. I think the biggest loser is the open source ecosystem for sure. Um, you know, if you're talking about outside of Nvidia...

techno... like inspiring, no doubt inspiring people and bringing them in. Um he's not... he's not designing the architecture, but when there's a decision, you know, I think the... the common thing that everyone sort of, you know, who's following Nvidia ends up seeing is that you hear real valid things about option A, B, and C and Nvidia could be doing all three at once and then at the last second, Jensen is pushing all the weight behind one.

Oh yeah, that's the founder mode thing.

That's really hard.

Yeah. Yeah. I remember in Meta at one point they had two different operating systems for their virtual reality strategy. They had XR and AR and VR or something. And like it was just so much extra work being done and then Zuck had to go in founder mode and be like look there's going to be some people that are getting reassigned. There's going to be some layoffs like it's going to be aggressive and... and that's the benefit of the founder mode company. So uh who is on the short list for potential successors? Can Colette not do it? Are there... is that... is she not want it? How does this develop from here?

I... I'm not sure what Colette wants. Um, I think she's awesome, but at the end of the day, she cannot lead technically the company.

Um, I think internally the two people that I think would be best suited would be Ian Buck and Jonah Alvin. Um, I think that Ian is great. I think Jonah is not so much in the public light, but he's technically like the closest to the leader. Um and... and is technically like in charge of most of the technical orgs. Um and so I think those are the two that are the most important from that perspective. Um but like you know, yes, Ian is charismatic, probably, you know, really probably pretty good at wheeling and dealing, not nearly as good as Jensen will ever be, but then is he going to be as good on the technical side? Is he going to be as good on the supply chain side? Or Jonah, is he going to be good on the supply chain side? Is he going to be good on the wheeling and dealing? Um and so, you know, I don't know if, you know, someone can be propped up and not... and... and take over the role of Jensen like in that way. Um and if you do like if Jonah is now or Ian is now in charge, do... is the stuff that they were in charge of fall down to some extent like in terms of like the focus that they had on it, the relentless effort. So now my favorite picks for CEO would be from an external perspective. Um it would be Charlie Quas and Johnny Shrogi. Um these two guys, uh Charlie is number two at Broadcom and has been for a long time and is... is awesome. Um and Johnny is the head of hardware at um Apple and he's the one who's basically led the chips team and strategy. Those are the only two people I think in the world that can uh navigate a supply chain um and technical details like... like that. Um I think obviously there are you know... you know it'd be better if it was Hawkan or Lisa Sue but I don't think either of them will do this. I think they're just like...

Andy... Andy Jasse is the one who wanted to buy Annaperna Labs. Well, he's not going to leave Amazon CEO to be Nvidia CEO. Um you take some steps down. Um I think there are really great people there. Um I really love the teams at Amazon. They work and move super fast. I think Google's awesome, but I don't think they have like a single person that can do all of the above. I mean, if anything, like, you know, I think um...

uh Amin Verad is at Google is like, you know, the lead of all this infra stuff, but I... I... I don't know if I've... never asked him. I just have a feeling he wouldn't want to do this, right? I have a feeling that like the leaders of Tranium I know they're very much want to be in the background and like you know of all the Amazon chip stuff I don't think they want to do this.

tiny companies right?

I... I don't know Nikosh too well. I've met him once. I think he's awesome, but like technically like Palo Alto has shipped hardware, right? Like that's definitely a part of their business, but like is it... is it the same thing as Nvidia leading edge doing crazy stuff? I mean, like look at Blackwell was amazing. Blackwell, if they did not do what they did with Blackwell, they would have lost a lot of market share. They decided at the last second what to do. I mean, shoot, you know, with... with Volta they added... they decided to add the Tensor Core like 3 months before they taped it out. Who would have said, "Yeah, let's just push out the current thing. Let's add it into the current thing." They would have been like, "Oh, let's add it to the next thing." If they add it to the next thing, how much further behind would they have been in AI? Nvidia never would have established dominance, right? It's these techn... and... and it's not like you're fighting like...

no... no... no knocks against Palo Alto Networks, but their competitors are like not that amazing versus Nvidia is fighting an OpenAI chip team, a Broadcom chip team, a Google chip team, an anthropic chip team, a Meta chip team. You know, these guys, Amazon chip team, these guys are good. Like, you know, AMD, um they're all really good. And all these startups, right? To the startups, they're all good.

Um it's not like they're incompetent, you know? I think it's... it's... it's... it's very different, right? You know, as great as Lisa Sue is, she took down Intel who was incompetent, right? Like what is... what is the person who defined a category and created it and kept all the invaders at bay? It's very different than being second place or, you know, making smart tactical business decisions, innovating on something, you know, that, you know, once there's already a category established, it's just very different.