Limitless Podcast

Josh:
SpaceX just announced a $17 billion acquisition to essentially allow them to

Josh:
shoot space lasers down from outer space direct to your cell phone to enable

Josh:
you to have service anywhere in the world.

Josh:
So if you're a user of T-Mobile, AT&T, Verizon, if you've ever experienced a dead zone in your life,

Josh:
those days are soon to be behind you because what SpaceX did is they just purchased

Josh:
mobile spectrum that will allow them to shoot these amazing Starlink satellites

Josh:
that are in space, direct to your cell phone to receive service.

Josh:
But that's not the only thing we are covering today.

Ejaaz:
Yeah, apparently OpenAI is launching a LinkedIn competitor.

Ejaaz:
There's a robotics company that's IPO-ing for $7 billion in China.

Ejaaz:
And also Elon's not the only person that spent $17 billion this week.

Ejaaz:
Microsoft also blew that exact same amount of money on a very niche European

Ejaaz:
startup, which we'll get into later.

Ejaaz:
But Josh, sorry, can we rewind a second into the laser beams coming out from space.

Josh:
Yeah, okay. So SpaceX bought this thing called wireless spectrum.

Josh:
So what is wireless spectrum and why did they pay $17 billion for it?

Josh:
So wireless spectrum, I guess, Ejas, you could imagine it kind of like the air

Josh:
being full of invisible waves, like radio signals or Wi-Fi.

Josh:
We're kind of aware that this exists, but not quite sure how.

Josh:
Spectrum is basically buying a chunk of these waves that companies use to send

Josh:
data, like calls, texts, or the internet.

Josh:
And because this is limited in bandwidth, there's a limited spectrum in which

Josh:
you could send these radio signals.

Josh:
The government actually controls who gets to use which parts so you can imagine

Josh:
a close tie to like cbs or abc broadcast networks where the rights to actually

Josh:
broadcast on a network are very expensive because again spectrum is very pricely

Josh:
what spacex did is they bought the license to this spectrum from a company called

Josh:
echo star that allows them the ability to actually,

Josh:
use part of the spectrum and send cellular service direct to your mobile cell phone.

Ejaaz:
Wow. So just to clarify, every two weeks, I go on a hike, Josh, right?

Ejaaz:
And I mainly do it to get away from my girlfriend because she can't contact

Ejaaz:
me. There's no cellular service.

Ejaaz:
You're saying now with this new satellite service that Elon is launching with

Ejaaz:
this new spectrum thing, I'll be able to get coverage wherever,

Ejaaz:
even on a desolate mountain via a hike.

Josh:
Exactly, yes, because this is leveraging the existing Starlink network that

Josh:
we know and love that people use all over the world.

Josh:
And I actually have a question for you because I found this super interesting,

Josh:
EJS. How much of the world do you think is actually covered in cell service currently?

Ejaaz:
It, I mean, come on, it's 2025. It can't be that much. I'm going to go with 15%.

Josh:
It's over 50%. Over one half of the world at any given moment has no cellular service.

Josh:
And what this deal does is it allows SpaceX to cover 100%. So anywhere in the

Josh:
world, You could be in the middle of the Atlantic, the middle of the Arctic.

Josh:
You will have cell service direct to cell. And I think that's what's noteworthy

Josh:
about this is in the past, SpaceX has had to contract out this ability through

Josh:
companies like T-Mobile.

Josh:
So if you remember a few episodes ago, we spoke about the Starship and how this

Josh:
will allow them to send up version three satellites of this,

Josh:
which will give much more bandwidth to the network.

Josh:
They enabled it through T-Mobile because T-Mobile owns the Spectrum license.

Josh:
What they did today is they actually bought the rights to a license that allows

Josh:
them to go around cellular companies. So they don't need to go through T-Mobile.

Josh:
They can issue their own SpaceX network. So you can imagine a world in which,

Josh:
Verizon and T-Mobile and AT&T,

Josh:
well, they kind of suck. They have over 50% of the world as a dead zone.

Josh:
But SpaceX, who will probably offer a service directly similar to a cell provider,

Josh:
will have zero dead zones.

Josh:
And what they bought is the rights to enable that to happen.

Ejaaz:
You know, I'm just thinking about this. And with all the technological progress

Ejaaz:
that we've made over decades, Facebook, social media, all that kind of stuff,

Ejaaz:
I've never actually heard of someone contending with AT&T, T-Mobile,

Ejaaz:
and all these other major carriers.

Ejaaz:
Which brings me kind of to my next question. $17 billion is a lot, Josh.

Ejaaz:
And I was looking at this tweet that said, you said half of it was in SpaceX stock, right?

Ejaaz:
So that's around $8.5 billion. And SpaceX stock was, according to this agreement,

Ejaaz:
was granted at $212 per share, which would value SpaceX at $400 billion.

Ejaaz:
So my thought is like, do these figures seem right to you to get access to this spectrum?

Josh:
Yeah, well, I would think you could probably imagine this as a relative valuation

Josh:
compared, in the case of Starlink, so SpaceX is much more than just Starlink,

Josh:
but if you're evaluating the Starlink network as a whole, which is owned by SpaceX,

Josh:
you could use relative valuations based on actual cellular providers because

Josh:
now this is direct competition.

Josh:
So you could look at the comps being Verizon, AT&T, T-Mobile,

Josh:
and that being just a small subset of the actual SpaceX business.

Josh:
So think about what the market cap of these companies are, maybe even combine

Josh:
that because I mean, now you have true global access.

Josh:
So right now I'm traveling in Greece and Verizon doesn't exist here.

Josh:
T-Mobile doesn't exist here. I'm using foreign network lines,

Josh:
but in the world where SpaceX actually does offer direct-to-sell,

Josh:
not only are the comps Verizon, but they are all the international cell providers as well.

Josh:
So the global cellular service provider marketplace would be the comparable,

Josh:
I guess, comparison to SpaceX now that they have this direct-to-sell capabilities.

Ejaaz:
Okay, it sounds huge. And then where my mind naturally goes to next,

Ejaaz:
Josh, is Elon's got to be making a cell phone right? Surely that's the next step.

Josh:
I would bet no. I would like bet pretty strongly the answer is no.

Josh:
Cell phones are very difficult to make at scale, nor do they contribute to the

Josh:
mission of any of the companies.

Josh:
So the idea of Starlink and SpaceX in general is to get people to Mars,

Josh:
to make life interplanetary.

Josh:
What Starlink is doing is funding this mission directly because it's adding

Josh:
a lot of value to the company. It's adding a lot of value back to the world.

Josh:
For them to build an actual smartphone, not only is it a logistics nightmare

Josh:
to have to capture the entire supply chain and ship many of these,

Josh:
but it just doesn't feel like a requirement when current hardware is so good.

Josh:
I think I'd much prefer SpaceX give my iPhone incredible service than replace

Josh:
my iPhone with something that hasn't been refined over two decades of time.

Ejaaz:
Okay, I'm definitely going to take the other side of that. I've got this tweet

Ejaaz:
pulled up here, which says, seems like we're trending ever closer to Elon making a phone.

Ejaaz:
Battery supply chain synergy with Tesla. So that addresses your supply chain thing.

Ejaaz:
AI-powered OS synergy with XAI. It's rumored to be working on it behind the

Ejaaz:
scenes. XAI now officially owns X and all these other kinds of things.

Ejaaz:
Inference chips locked down with the new AI6 with Tesla. And now telecommunications

Ejaaz:
locked down with Starlink.

Ejaaz:
Also, I remember Elon mentioning about a year and a half ago,

Ejaaz:
should X basically create their own phone? So I think he's down for it.

Ejaaz:
And then you're pointing around like, you know, this being like a massive slog

Ejaaz:
for like hardware supply chain manufacturer. We just watched Elon pump in how

Ejaaz:
many billions into this new Colossus 2?

Ejaaz:
I think if there's any man to take over it, it's going to be him.

Ejaaz:
I agree that it might not be a cell phone, but whatever the next major consumer

Ejaaz:
hardware thing is, and that might be a version of a cell phone,

Ejaaz:
I think Elon might take a shot at it. So I don't know. I'll take the other side.

Josh:
Okay, because I was going to bet you my entire SpaceX stock that they would

Josh:
not release a cell phone. I feel like very confident in the idea that they will

Josh:
not release a cell phone.

Ejaaz:
I will bet you dinner at the Tesla

Ejaaz:
diner. I won't bet you my entire stock portfolio, but I'll bet you that.

Josh:
Okay. All right. Well, I guess we'll leave it at that. Tesla is doing really cool things.

Josh:
And what this means for the future, basically, is just like,

Josh:
yeah, the entire world has cell service. And that's pretty freaking exciting.

Josh:
So that is not the only news this week, right?

Josh:
I'm actually away. I'm on vacation. I've been mostly offline this week.

Josh:
So I am leaning on you to guide us through what is going on.

Josh:
I'm going to learn kind of as the audience member, I think, for most of this

Josh:
episode. So fill me in what we have next.

Ejaaz:
Okay, so what you're seeing on my screen is a tweet from someone called Fiji

Ejaaz:
Simo. And if that name sounds familiar to you.

Ejaaz:
Yeah, yeah, she is the CEO of OpenAI Applications.

Ejaaz:
Not to be confused with the CEO of OpenAI. Okay.

Ejaaz:
And just a bit of background. And Fidji is a tenured employee at Meta where

Ejaaz:
she actually helped build a bunch of the consumer applications at Meta.

Ejaaz:
And then she recently left and joined OpenAI where she's leading basically the

Ejaaz:
app build out, the app store build out, all the cool different AI apps that you can get access to.

Ejaaz:
And she's just announced the major flagship app that OpenAI is going with,

Ejaaz:
which is AI LinkedIn. in.

Ejaaz:
It's essentially a new platform that will allow businesses or anyone,

Ejaaz:
quite frankly, to connect with AI proficient individuals.

Ejaaz:
So what I mean by AI proficient individuals is, Josh, you and I use ChatGPT, right?

Ejaaz:
And I would say we're fairly good at it. We kind of know how to prompt certain

Ejaaz:
ways and know how to ask it for certain things. We kind of get the vibe.

Ejaaz:
But I'm talking about a layer deeper where there's people that actually learn

Ejaaz:
how to structure prompts for various different situations and tasks that literally

Ejaaz:
dedicate 50 to 70 to 80% of their time every day learning and trying to become

Ejaaz:
proficient in these things, kind of like trying to cut down

Ejaaz:
Waste at companies and make it more efficient.

Ejaaz:
All the type of people that create startups from zero to one that create millions

Ejaaz:
and millions of dollars per month like we're seeing all over social media.

Ejaaz:
So this new AI LinkedIn is an interesting concept because it's called the OpenAI Jobs Platform.

Ejaaz:
And it's basically, like I said, it's a place where businesses can connect with

Ejaaz:
certain different kind of workers. And the main problem that they're trying to fix here, Josh, is

Ejaaz:
Everyone has AI tagged onto their resume at some point right now.

Ejaaz:
But it's very hard to tell whether someone is actually kind of like proficient in that thing.

Ejaaz:
And so the other way that this platform is trying to kind of like surface high

Ejaaz:
quality individuals and this problem that OpenAI is trying to fix is they're

Ejaaz:
linking this in with their OpenAI Academy, which is kind of like a Khan Academy.

Ejaaz:
If you guys have heard of it, it's kind of like an online academy where you

Ejaaz:
can kind of like learn various kinds of things, software engineering,

Ejaaz:
maths courses, all that kind of stuff. but dedicated towards AI.

Ejaaz:
And why I think this holds such esteem for OpenAI in particular is they're putting

Ejaaz:
their full brand and weight behind it, Josh.

Ejaaz:
Like I said, this is the first application that they're launching.

Ejaaz:
And the final point I'll make is when I zoom out, right, we have said so many

Ejaaz:
times on this show that AI is going to replace everything.

Ejaaz:
But we don't specifically know how. This is kind of like this big ambiguous

Ejaaz:
vision that, you know, hundreds and hundreds of billions of dollars is being invested in.

Ejaaz:
We don't know quite how it materializes just yet in each different industry.

Ejaaz:
We're starting to see it.

Ejaaz:
I think OpenAI's job platform is going to be one of the main ways that facilitate this.

Ejaaz:
And I was thinking about the kind of like power that they're going to hold, right?

Ejaaz:
They're going to have basically all the highest influential experienced AI engineers,

Ejaaz:
researchers, product people, all within one platform. And I can't help but think

Ejaaz:
that that data is very useful.

Ejaaz:
But I'm going to pause for a second. Josh.

Ejaaz:
Hot take, initial take.

Josh:
I think it's interesting. The most exciting thing to me is the last line of

Josh:
this, actually, and OpenAI certified for workers to learn and demonstrate their AI skills.

Josh:
I think oftentimes a lot of companies and a lot of employees,

Josh:
they might think they know how to use AI, but there's actually a lot of ways

Josh:
to use AI and creating some sort of a benchmarking system for individuals relative to models.

Josh:
So the way we compare benchmarks with normal models, or the way we compare normal

Josh:
models is using benchmarks. Well,

Josh:
we don't really have those for actual employment productivity skills.

Josh:
Like if you've ever done this back in high school or early days of college,

Josh:
you can get certified in like Microsoft Excel or Microsoft Word,

Josh:
just kind of prove that you know it, which felt very lame.

Josh:
I mean, this is not what I want to see open-air working on, but I guess I'm

Josh:
kind of torn because it feels like it solves an interesting problem,

Josh:
right? Because we do have this employment problem.

Josh:
We do have the existential idea that AI is going to replace jobs.

Josh:
The reality is it probably creates a lot more jobs. And in that world,

Josh:
does having this job platform make sense?

Josh:
Probably. I think so. Because it will, I mean, they're the closest to the metal

Josh:
in the sense that they are the closest to the actual model.

Josh:
They have all of the user data. They can certify who is valuable.

Josh:
It's an interesting first example, and I'd love to hear more about why they chose to do it.

Ejaaz:
I agree. So if I were to summarize my thoughts, the bare case is that it seems pretty uninspired.

Ejaaz:
Like LinkedIn is kind of whatever to me, at least.

Ejaaz:
And so I thought they might come up with something novel and AI native that

Ejaaz:
would wow people, like something magical, right? Like ChatGPT was.

Ejaaz:
But the bull case, I think, is something that you just mentioned,

Ejaaz:
which is to date, benchmarks have been kind of very binary and very gameable.

Ejaaz:
And the only real way to see how AI can impact the real world is through humans.

Ejaaz:
That's why AI agents haven't really exploded just yet because you need the human component.

Ejaaz:
You need the intuitive component. And the only way to do that is via humans.

Ejaaz:
So I think this is one step of many. Potentially, like, you know,

Ejaaz:
create this platform, create a bunch of different new job roles and job types.

Ejaaz:
And then industries at large start to understand how they can effectuate change using AI.

Ejaaz:
It becomes much more realistic. Like, oh, this is what an AI product manager

Ejaaz:
does or, oh, this is what an AI-enabled engineer can do and this is how much they're worth.

Josh:
It's exciting for the, I guess, the business world. If you are a business owner,

Josh:
if you're someone in the job market, this is probably interesting to you.

Josh:
It probably takes time to get seated and actually become valuable.

Josh:
But selfishly, I do wish the product team at OpenAI was releasing more products

Josh:
that we could use as customers.

Josh:
I want some, like you mentioned, I want some improvements. I want some new tools.

Josh:
I want to be able to further leverage my skills instead of prove that I have skills.

Josh:
So I guess this one falls a little flat for me, but I could see why it's very important.

Josh:
And I hope that the future will lead it to be much more important than I hope for.

Josh:
But there's more, right? There's more ChatGPT news this week or OpenAI news in general.

Ejaaz:
Yeah, so I think this one's going to make you happy, Josh. OpenAI revealed, by popular request,

Ejaaz:
you can branch conversations in ChatGPT now, letting you more easily explore

Ejaaz:
different directions without losing your original thread. it.

Ejaaz:
So for the listeners of this show, imagine you open up a conversation with ChatGPT

Ejaaz:
and you're asking about, you know, travel plans to go to, you know,

Ejaaz:
this option, that option, or maybe asking to write an essay for you, right?

Ejaaz:
For high school, which I know a lot of you guys are doing.

Ejaaz:
And you kind of think, okay, I wonder how this essay might have been written

Ejaaz:
if I had prompted it differently, or if I had asked it to take a particular

Ejaaz:
different tone for this essay.

Ejaaz:
Well, now you can scroll back up to where you asked the initial prompt or wherever and click branch.

Ejaaz:
And it opens up a new tab with a brand new conversation, but with all the same

Ejaaz:
context that you've already fed ChatGPT.

Ejaaz:
Now, for those Marvel fans out there, specifically Marvel Avengers,

Ejaaz:
you know or are familiar with parallel universes, right? Many different timelines

Ejaaz:
for many different possibilities.

Ejaaz:
This is effectively what OpenAI has just enabled for your conversations.

Ejaaz:
And I love this personally because I can now run many different experiments

Ejaaz:
and see which one comes to the best answer. Josh, what do you think?

Josh:
Yeah, this is great. See, this gets me excited. This is something you could

Josh:
go into ChatGPT today and use and it will improve your experience.

Josh:
It'll improve your quality of life. I think it's great.

Josh:
What's the funny thing that always drives me crazy is that you can use the same

Josh:
model and share the same prompt and it will spit you out a different answer

Josh:
every single time without fail.

Josh:
And the ability to now fork off the conversation and to try something different

Josh:
while maintaining that stream of thought and more importantly,

Josh:
the context prior in the conversation, that to me is a really cool use case.

Josh:
Because there are oftentimes where I'm exploring an idea or I'm doing some research

Josh:
and I want to go off in one direction.

Josh:
But by adding the additional context of the future answers, it throws off the

Josh:
further streams of directions that I want to go.

Josh:
So being able to cut it, fork it, and then try multiple times, that's fun.

Josh:
I like that. This is good news. This is good. OpenAI, thumbs up.

Ejaaz:
Agreed. Well, there is another big up that happened this week,

Ejaaz:
and that is Sam Altman casually announced that there's been a change,

Ejaaz:
Josh. There's been a slight change.

Josh:
Oh, a change?

Ejaaz:
That's new. Initially, OpenAI had planned to spend

Ejaaz:
along the lines of maybe $30 to $40 billion on compute over the next couple

Ejaaz:
of years, which for a single company, by the way, is a staggering amount of money.

Ejaaz:
That is like, whatever, That is like something like 40% of Meta's cash reserves.

Ejaaz:
And Meta is a very mature public company that has produced many valuable things for the world.

Ejaaz:
Open AI, still private, still kind of working on their things,

Ejaaz:
still working on the consume applications.

Ejaaz:
Sam Altman announced this week that, yeah, we need to up that by around 80 to $100 billion.

Ejaaz:
Yeah, we need more compute.

Josh:
Whoa. So that puts them, what, over $100 billion of spending now for a company?

Ejaaz:
$150 billion to be specific.

Josh:
For a nonprofit private company. That is incredible.

Josh:
So like, I have a lot of thoughts going through my mind. I'm curious to hear

Josh:
yours, but my first take is like, oh my God, if we don't get AI or AGI with

Josh:
$115 billion of processing power through the end of the decade,

Josh:
we have a serious problem.

Josh:
So this is what we were talking about this briefly with the Colossus project

Josh:
where they're planning to put, the XAI team is planning to put a million GPUs online coherently.

Josh:
We are approaching numbers that are truly astounding.

Josh:
Like $115 billion of spend is millions and millions of GPUs that you assume

Josh:
will be coherent that should produce models that are exponentially better than what we have today.

Josh:
So assuming this works, the future, there's no, there's no way we don't get AGI, right?

Josh:
Do you agree? What do you think? It's a huge amount of money.

Ejaaz:
Yes, it's a huge amount of money. And there are basically two camps of thought around this.

Ejaaz:
I call it the bear camp and the bull camp.

Ejaaz:
The bear camp basically thinks this is all a bubble, specifically something

Ejaaz:
called the AI capex bubble.

Ejaaz:
Basically, people are spending way too much on this AI infrastructure thing,

Ejaaz:
and there's no goods to show.

Ejaaz:
You could also argue that Fiji's announcement of AI LinkedIn for open AI kind of proves that.

Ejaaz:
You could also argue that GPT-5 launching and kind of being, yeah, nothing magical.

Ejaaz:
Maybe I'm desensitized to the magic of AI. You could also use that as a proofing point behind that.

Ejaaz:
The bull camp says that, no, there's going to be actually an over demand for

Ejaaz:
compute and not enough money is actually being spent on it, right?

Ejaaz:
So there's these two camps.

Ejaaz:
$80 billion is a massive swing.

Ejaaz:
Sorry, it's not even a swing. It is a completely new budget, right?

Ejaaz:
It is over like 70% of the originally termed budget.

Ejaaz:
So this could be, we could like speculate on this.

Ejaaz:
Like my view is, I think Sam sees something that we don't, which is going to

Ejaaz:
require a lot more compute.

Ejaaz:
Maybe this is the new hardware consumer device that he's going to launch.

Ejaaz:
Maybe he's realized a new architecture,

Ejaaz:
which is different to transformer architecture to train a new model.

Ejaaz:
Well, maybe he's just realized, but to get to the next step change,

Ejaaz:
AGI, you need this amount of compute.

Ejaaz:
That's my bold case. My bad case is he's kind of pulling this number out of

Ejaaz:
his ass and we're not going to get it anywhere.

Josh:
Yeah, I hope for the latter. I hope that, or I guess the former,

Josh:
which was that OpenAI actually has a lot more left in the tank.

Josh:
And GPT-5 was kind of an anomaly in the sense that they optimized for things

Josh:
that maybe weren't quite popular with the masses, but were very important to the business.

Josh:
So I think retroactively looking back at GPT-5, it was optimized for cost per

Josh:
token, really, and trying to optimize for quality per token by using a router.

Josh:
I think they understood this misstep and now they're going for the raw power.

Josh:
And I'm hopeful that there actually is no scaling wall and that there is a direct

Josh:
correlation between dollars in and intelligence out.

Josh:
Now the question, and I would love comments too for the people who are listening

Josh:
to share, is this actually a CapEx bubble?

Josh:
Is there a world in which they can derive greater than $115 billion of profit

Josh:
by the year 20, or after 2029, but that's how much they're spending before 2029,

Josh:
and actually earn a return on this investment?

Josh:
That is where I don't know. Because at the end of the day, they're competing

Josh:
for what will probably be a commodity, right?

Josh:
We have Google is going for the same thing, XI is going for the same thing,

Josh:
and maybe there will be hyper-specific models.

Josh:
Just last week, we talked about the GPT-4B model that is good for biometrics

Josh:
for these protein synthesis and extending life.

Josh:
You don't need $115 billion of

Josh:
processing for that. So that's the big question. Is this a CapEx bubble?

Josh:
We don't know. But we are, I'm stoked to find out because it's not my problem.

Josh:
They're privately held. We don't own any shares.

Josh:
So hey, do your thing. And if you give us AGI for $20 a month, sign me up.

Ejaaz:
I think that AI is the most crucial thing to be spending money on.

Ejaaz:
So regardless of whether they know we're in a bubble or whether they don't know,

Ejaaz:
I think the money is worth spending because we're going to have some kind of discovery from this.

Ejaaz:
And the clearest signal for the bull case of us not being in an AI CapEx bubble

Ejaaz:
came from Microsoft this week. Josh, did you see the news?

Ejaaz:
So they just plowed in...

Josh:
No, a multi-billion dollar agreement. Another day, another couple billion. Yep, yep.

Ejaaz:
They just plowed in $17 billion. So the same amount Elon just dropped on his

Ejaaz:
new Spectrum provider on this company called Nebius. And the main reason why

Ejaaz:
is to acquire more compute.

Ejaaz:
Nebius is a data center provider, which is primarily located in Europe,

Ejaaz:
and they specialize in hardware data centers.

Ejaaz:
I'm talking cold metal bare bones infrastructure out in God knows where in Norway or wherever,

Ejaaz:
energy proficient, pure power to help Microsoft surface and train their models

Ejaaz:
that they're doing in conjunction with OpenAI, but also to service some of the

Ejaaz:
features that they have that they offer to clients, such as Microsoft Copilot.

Ejaaz:
One striking take from this bit of news is, well, okay, let me ask you this, Josh.

Ejaaz:
How much do you think Nebius was valued prior to this announcement?

Josh:
I'm not even going to guess. I'm so far out of the ballpark in these numbers

Josh:
now. I have nothing to even give.

Josh:
It could be a million dollars. It could be a hundred billion dollars at this point. Got it.

Ejaaz:
That total market cap, they're a public company, I believe, is $15 billion.

Josh:
Whoa. So that's a very low multiple that they purchased them for.

Ejaaz:
Yeah, yeah, exactly. So Microsoft plowed in. Well, this is the thing.

Ejaaz:
It's not a purchase. It's a partnership.

Ejaaz:
$17 billion of consumer revenue is going to Nebius.

Ejaaz:
So over the next, I think it's like three to five years, Microsoft is paying

Ejaaz:
them basically $17 billion.

Ejaaz:
So someone did the math looking at that. I don't know if I have the tweet.

Ejaaz:
Oh yeah, it's right here.

Ejaaz:
Nebius is projecting $625 million of revenue by the end of 2025.

Ejaaz:
Microsoft's revenue alone would increase their revenue by a growth of 3x per upon year.

Ejaaz:
So this might be the best stock purchase or for people who are holding Nebius

Ejaaz:
are up bigly basically in the last 24 hours.

Josh:
Congrats to Nebius holders. And I guess congrats to Microsoft holders as well

Josh:
because it stocked it very well as soon as this was announced, right?

Ejaaz:
I don't know how much Microsoft shares went up, but what I do know is that Nebius

Ejaaz:
shares jumped 53% in after hours, Josh. So we have another data AI spend.

Ejaaz:
And going back to my original point, I think this is a proving point against the AI CapEx bubble.

Ejaaz:
Because if Microsoft, a titan that has spent, I think it's, what is it,

Ejaaz:
$35 billion that was invested in open AI when Sam Altman was ousted, right?

Ejaaz:
To acquire the rights to basically all open AI models till 2030,

Ejaaz:
is spending even more money on another data provider.

Ejaaz:
And remember, they're like the primary compute providers via Azure to train

Ejaaz:
open AI as models. if they're spending a further $17 billion to acquire more

Ejaaz:
compute capacity, this is a sign that it's not a bubble and that we're actually

Ejaaz:
building something useful.

Josh:
There's a lot of spending. And this is not where the spending ends.

Josh:
For our last story, we have one more acquisition merger too,

Josh:
correct? And this one is also fairly large?

Ejaaz:
Oh, yeah. Okay. So as you know...

Josh:
Tell me about the browser company.

Ejaaz:
Let me tell you about the browser company. Well, actually, let me tell you about

Ejaaz:
our views on the browser company.

Ejaaz:
So for context, Josh and I have done, I think, about three episodes so far on

Ejaaz:
these things called AI browsers.

Ejaaz:
Think of your internet browser, Google Chrome, Safari, Firefox for you crazy

Ejaaz:
kids out there, paired with AI technology.

Ejaaz:
So having a live-in chat GPT-like assistant that kind of like knows what you're

Ejaaz:
browsing, knows what you're looking for, surfaces all your results,

Ejaaz:
combines all these videos and summarizes it for you in one slick little interface.

Ejaaz:
It kind of reads your brain before you even type any keys. Um,

Ejaaz:
I think Josh and I were both kind of bearish on the AI browser.

Ejaaz:
And the reason why, and Josh, please jump in here, is we kind of thought that

Ejaaz:
the interface was a cop-out.

Ejaaz:
We think that AI is going to enable a completely different type of OS operating system.

Ejaaz:
And we don't think browsers are quite the same medium. Josh, do you agree with this?

Josh:
Yeah, we spoke about this at length with Arvind, the CEO of Perplexity.

Josh:
So if you have not seen that episode, go check it out.

Josh:
It was interesting to hear the other side from someone who's actively building

Josh:
what I would assume is one of the largest AI browsers in the world.

Josh:
But the take that I had was that, well, when I'm using a browser,

Josh:
I use it for two purposes, right?

Josh:
I use it, one for leisure, which is watching YouTube videos or scrolling Twitter

Josh:
or whatever type of engaging thing that I wanna be doing.

Josh:
And for me, I want to do that. I want to personally watch the videos.

Josh:
I don't want a bot doing that for me.

Josh:
And then the other bucket that I use a browser for is productivity.

Josh:
So I use it for working on agendas with you for the show notes or doing research

Josh:
or writing papers or whatever random things it may be, or even booking a trip

Josh:
like I did for this trip that I'm on right now.

Josh:
But I don't really care to do that part.

Josh:
Like if I can offload that to an agent to go and book my flights to give me

Josh:
help on this prep and just present me with the finished thing,

Josh:
I would much prefer an agent obfuscate away all of the complexities of the browser

Josh:
and just present me with what I want.

Josh:
I don't really care for the browser interface that is now over 25 years old, I believe.

Josh:
When an agent could just go and do the engaging itself, and then return me the results.

Josh:
So for that reason, we've been bearish on AI browsers, but clearly we are,

Josh:
I mean, to some extent, the market's signaling we're wrong.

Josh:
I don't know if we're wrong, but according to this acquisition,

Josh:
the market is giving a signal that like maybe people actually do want AI browsers.

Ejaaz:
Yeah, so the headline here is AI browsing company called The Browser Company

Ejaaz:
just got acquired for $610 million.

Ejaaz:
All cash by none other than Atlassian, which is a enterprise software product,

Ejaaz:
a software as a service company famous for their product, Jira, right?

Ejaaz:
I actually caught up with the guy that set up this entire deal,

Ejaaz:
who is the number two at Alassian. He's my former boss, Sanchen.

Ejaaz:
And he basically said that the reason why they bought it is they are betting

Ejaaz:
big on the browser, but not at a consumer level, at the enterprise level.

Ejaaz:
They think that a number of their clients are going to want to have their own

Ejaaz:
in-house browser that they can use for their own data set, for their own operating

Ejaaz:
system, for their own products and systems.

Ejaaz:
And what he wants to do with part of the browser strategies company is build

Ejaaz:
out this kind of like enterprise grade browsing solution.

Ejaaz:
How much revenue do you think the AI browser company, sorry,

Ejaaz:
the browser company is making?

Josh:
Zero dollars and zero cents.

Ejaaz:
Um, you are accurate.

Josh:
Yeah, that's, that's insane. Uh, $0 of revenue and $610 million in acquisition

Josh:
cost is crazy. Congratulations to the team.

Josh:
Uh, that is an unbelievable accomplishment for the Atlassian company.

Josh:
Oh my gosh, that feels scary.

Josh:
Um, you are selling B2B products in a world where

Josh:
software will be hyper-customized and

Josh:
to productize this as a

Josh:
generic product that you can customize the data for and then

Josh:
serve to an employee base a company

Josh:
seems scary and risky when there

Josh:
will be a world in which you can create a prompt that generates

Josh:
an entire software suite custom to

Josh:
each company so this is an interesting bet i mean jira is kind of what a project

Josh:
management software for like yep corporate b2b services it's kind of slow it's

Josh:
kind of clunky yep yeah we use asana also kind of slow kind of clunky it's just

Josh:
it feels like this this outdated,

Josh:
type of form factor and business plan when the new and exciting thing feels like,

Josh:
hey, we actually just have an incredible AI service that can write unbelievable

Josh:
code and create a custom software stack with all your data for exactly how you

Josh:
need it without needing to use a browser.

Josh:
It's interesting. I mean, they are clearly well-researched if they have that

Josh:
much money to spend on a company that is making zero revenue.

Josh:
So it's an interesting purchase.

Ejaaz:
And that's it for this episode, folks. It has been a crazy week so far,

Ejaaz:
and I have a feeling this is just the start.

Ejaaz:
Remember, this is Tech-temper, and in under an hour from now,

Ejaaz:
Apple is streaming live about their latest hardware and software,

Ejaaz:
and we have our biggest Apple fanboy on this show, so you know we're going to

Ejaaz:
get you a hot episode out very soon. Josh, any initial takes?

Josh:
Guys, this is my Super Bowl. This is a big deal. If you don't tune into the

Josh:
episode this week, you are going to miss out on some pretty spicy takes.

Josh:
There are not many companies that I've followed for this long this closely

Josh:
and care this passionately about than Apple and this is very

Josh:
much the Super Bowl event of the year it's the new iPhone it's the

Josh:
new watch it's new AirPods and if we are lucky God willing we will get some

Josh:
AI news as well so there's a lot riding on this the future of Apple depends

Josh:
on it we are going to go tune out and tune into the live stream watch that and

Josh:
then report back to you shortly so if you are listening to this tune in it's

Josh:
coming soon it's going to be a great episode but in the meantime I hope you enjoyed this one.

Josh:
Thank you so much for listening. Don't forget to like, subscribe,

Josh:
share with your friends, all the other great things that help our show grow.

Josh:
We really appreciate you sticking to the 33 minute mark. This was a little bit

Josh:
longer, nice little roundup. Hope everyone enjoyed.

Josh:
And I guess for the fun comments, I've been loving the comment section.

Josh:
I've been trying to reply to a lot of the comments, and people are really engaged. They're great.

Josh:
So if you have anything to say, please don't forget to leave a comment.

Josh:
If anything, just let us know if you think it's a bubble or not.

Josh:
Are we in the CapEx bubble or are we not?

Josh:
I think this is kind of a point of contention we go back and forth on.

Josh:
So I'd love to hear your takes. But anyway, thank you so much for listening.

Josh:
We will be back tomorrow with our lovely and exciting, hopefully exciting Apple episode.

Music:
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