The Six Five Pod | EP 267: Grok 4, Galaxy Folds, AI Ethics, and Frothy Markets

From AI's existential risks to frothy tech markets, Episode 267 of the Six Five Podcast dives deep into the hottest tech trends. Are we headed for a market correction? Should AI development slow down? Hosts Patrick Moorhead and Daniel Newman discuss wild salaries in the AI talent wars spurred on by Meta, Grok 4’s outstanding performance and unfortunate “MechaHitler” incident, Samsung's latest innovations, NVIDIA's market dominance, and more. Tune in for this energetic discourse on where tech is headed and the potential pitfalls along the way.

1. Intro: Patrick & Dan catch up – is Dan Gen Z? Is Pat a Boomer?
2. AI Existential Concerns: A future of AIs "fighting the humans" and other existential concerns are real. Dan references HAL from "2001: A Space Odyssey."
3. AI Developments and Challenges: A discussion of Grok 4 and its performance in benchmarks, plus voice integration and potential Tesla implementation.
4. Talent War in the AI Race: The hosts highlight the astronomical salaries being offered for AI researchers and engineers, and Meta’s push to build its Superintelligence team. Apple’s potential deal with Perplexity.
5. X (Twitter) and AI Controversies: Discussion of Linda Yaccarino stepping down as CEO, and the "MechaHitler" AI incident.
6. Samsung Unpacked Event: Samsung's new foldables and wearables including its smartwatch advancements and health features.
7. Market Analysis and Investment Insights: “Frothy" market conditions and comparisons to the dot-com era and an analysis of NVIDIA's market position and potential risks.
8. AI Company Acquisitions and Expansions: Capgemini's acquisition of WNS, Groq’s platform pivot & expansion into the Middle East and Europe with a data center footprint in Finland.
9. The Flip: A Debate on Whether to Accelerate or Decelerate AI Development: Pat has to argue for slowing down AI development due to potential risks. Daniel takes the position in favor of accelerating AI progress to maintain competitiveness.
10. Bulls and Bears: Market Trends and Stock Performance: Various stocks' performance, including NVIDIA, Robinhood, and SoFi, analysis of current market frothiness & message board hype and comparisons to historical trends. Reflection on the balance between optimism and caution in tech investments.

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Disclaimer: The Six Five Pod is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.

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Daniel Newman: We've got AIs, you know, fighting the humans now. We're getting close. Is this existential? As I like to say, “Hal, open the door, please. I'm sorry, I cannot do that. I cannot do that. I cannot open the door.” That is, unfortunately, a real thing that we have to think about. 

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Daniel Newman: It's never too early to start popping creatine gummies, you know. 

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Patrick Moorhead: It's really not. You know. 

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Daniel Newman: You know, some people have like, M&M's on their desk. I have creatine gummies. I just pop them all day. I think I'm up to like 30 grams now. Yeah. 

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Patrick Moorhead: Dan, what I love about you is, you know, I start something and then. And then you just take it to the next level. So kind of the history of our relationship. 

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Daniel Newman: You start, I finish. I. I like it. 

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Patrick Moorhead: That's good. That's good. 

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Daniel Newman: That's why we're such a good team. That's why we're such a good team. 

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Patrick Moorhead: Your guns are popping this morning, by the way. 

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Daniel Newman: Yeah, I know they're not as big as normal, but we'll work on that. I'm going. I'm going on vacation, dude. Are we gonna? I might still pod next week, though, so let's, let's keep that on. On, on tap. Because, you know, I get pretty, pretty. I get pretty wound up when I'm on vacation. Like, do not expect me to get off Twitter. If anyone is expecting me to disappear for a week, there's a 0% chance that's going to happen. I'm going to keep pumping these. 

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Patrick Moorhead: I think there's a–

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Daniel Newman: I’m going to keep pumping all these stocks, Pat. Driving you crazy. 

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Patrick Moorhead: You're going to be out there pumping stocks with caps, you know, all caps, all cops. Yep, I'm. 

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Daniel Newman: I'm trying that. I'm not sure it works for me, but for Shay, it works pretty well. He's. He's got the all caps thing going. Yeah, I saw him squabbling with my own. My own employees, you know, my Boomer employees yelling at my. My gen. My Gen Z employees about using all caps, “Quit yelling at me!” Anyways. Hey, everybody. We. We're. We're here. It's episode 267. We are back. We are not letting you down. Hopefully you're listening to this on the Monday as it hits. But if you're not, if you've waited all the way till Tuesday. We're going to try to understand. We'd wonder what you were doing on Monday. It couldn't be more important than listening to the Six Five podcast. We are the. We are the best. We actually know what we do. We know what we're talking about. Do we know what we’re talking about Moorhead? 

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Patrick Moorhead: We absolutely know what we're talking about. We're gonna have to edit that preview at some point. 

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Daniel Newman: “I think we do,” Pat said. There's nothing more. There's nothing that makes someone when they're making big technology or investment decisions, because we don't. We don't help people do that anyway. But there's nothing better than hearing somebody be like, I'm not sure. I give great advice, and then putting that in your header so that everybody hears that each and every single week. Now we know what we're talking about. We absolutely do. We got a great show today. So much to cover, Pat. We've got. We've got AIs, you know, fighting the humans now. We're getting close. Is this existential? As I like to say, “Hal, open the door, please. I'm sorry, I cannot do that. I cannot do that. I cannot open the door.” That is, unfortunately, a real thing that we have to think about. We're gonna talk about the talent war that's driving AI, Pat. You know, Cristiano Ronaldo makes about $100 million a year, but a Meta AI research engineer can make $200 million a year. So, you know what? Forget all that training and all that ab work. All you need to do is be able to sit in a dark room and write really good code and help create LLMs and all the other things, and you can make a couple hundred million a year. And we got Pat…You ever seen Science Corner? You know, in the All In, you know that part where David Sacks leaves whenever Science Corner starts. 

The Decode:

Patrick Moorhead: Yes. 

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Daniel Newman: So we're gonna talk about Galaxy Unpacked, and I'm gonna. I'm gonna go David Sacks for a little bit, and I'm gonna come back, and we're gonna talk a little bit about Grok. I thought that was really funny. Anyway, we're talking about a couple of acquisitions, potentially depending on if time allows. But we got a great flip today. We got a boomer talking to a Gen Z. We got one guy that's saying maybe slow it all down or maybe we have a Gen Z talking to a Boomer. Is there a Gen Z on this pod? I don't even think there is, but I like to proclaim to be younger than I am. Even though I'm totally Gen X.

Patrick Moorhead: I mean there's not a boomer on this show either. 

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Daniel Newman: Yeah, you say that. Anyway. And then we're going to get into the markets a bit. Things are ripping and roaring and getting frothy as all can be. Are we about to see, are we about to see a crash? We're not going to debate this, but we might kind of debate this because you know, that's what we like to do here. We, you know, we like to not bore you by just agreeing on every single thing all the time. All right, so Pat, like I said, we got a great set of topics to talk about in The Decode. So let's go there first.


Daniel Newman: X and xAI. Gosh, I don't even know which one. You could start with MechaHitler. You could start with Grok 4. You could start with the CEO leaving. Pick your poison. 

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Patrick Moorhead: Yeah, let's, let's go off on a – I would say an entirely positive. And that is, that's Grok 4. Right after MechaHitler was self-actualized or right came to being, kind of like when the Terminator did. I love the memes out there. Uh, xAI came out with, uh, with Grok 4 and it pretty much wins on nearly every single benchmark out there. But I think the most important one is the AGI benchmark where it laps like it's 2x better than even Google, Google Gemini or anything that's from OpenAI. They have a paid version like a Supra, it's called Heavy, where it does more than, let's say deep research, which comes with a monthly subscription. It'll actually go in and do full code, full engineering, really takes it to the “nth” level. And I think as we've always seen with any of these Grok launches there will be some sort of a, a perpetual improvement as opposed to the way that others are rolling it out where they say, okay, here it's announced, we're doing code freeze and we're gonna, we're gonna work on the, the next version of it. The other thing it brings in is voice. Voice and hopefully videos. They also said they're gonna want to integrate this into all Teslas at a TBD date. That I thought was pretty interesting. And it's not going to be about Grok doing its self-driving, although I do think Gen AI is the future there. It's more an onboard AI assistant, you know, having a conversation with it as you're rolling, rolling down the road. I find that immensely useful. What I would find even more useful is if there will be any agent integration. And this is going to be an interesting play with all those Teslas out there to get this agent integration with different applications on the Tesla platform that may not be native in there, in there, in there right now. So, gosh, they've only been doing this for a couple years. You have companies like Google that have been doing this for 10 or 15 years. Google wrote the seminal white paper on Generative AI, so it is just amazing that they've been able to do this. 

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Daniel Newman: Well, Apple wrote this seminal white paper on Gen AI not being a thing. Like a week ago worked out pretty well for them. You know when Dan Ives actually starts to say Apple might be in trouble. I think this may be the end. 

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Patrick Moorhead: We should have Dan on maybe a special episode where we can, you know, he can talk about his, he can talk about his victory laps and he can talk about Apple right here. 

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Daniel Newman: Palantir, NVIDIA. But the Apple, the Apple thing, you and I have been like, you know, we've, we've seen this thing coming. You know, we watch the train, we see the person standing in the tracks. His name is Tim. Seems to have a, some sort of apprehension to doing AI. But I mean, look, Grok 4 is, is absolutely crushing the benchmarks. It's showing how fast you can move. You know, it's been kind of interesting to see with this talent war where Meta's been very actively stealing people, taking, hiring, luring, whatever word we want to use from mostly OpenAI, a little bit from others. Whereas xAI seemed to build this incredible research and engineering team that like, and they've kind of stayed in the, in the, in the, in the side, like everyone talks a lot about Google, everyone talks a lot about Meta, they talk a lot. But. And probably because, you know, this is one of those cases where because you can't buy xAI stock, it just doesn't get talked about as much in media. Of course, I think there's a very realistic case at some point, X, xAI, Tesla, all become one big happy family. It was a note though. I will keep us moving. I know we got hard stops and you and I tend to start and we. So anyone that watched our show knows this. What we do is the first topic goes like 37 minutes and then we try to cram the other 16 into five. That's what we do. But we always kind of put the stuff we like most first. It's, you know, save the best for first. That's what we do. So one quick thing. Linda Yaccarino did step down. We, you know, we didn't really talk about that. You know, Pat, just a yes or no so we can move on. Was it related to the MechaHitler mistake? Or do you think that that transition was, was, was getting– 

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Patrick Moorhead: I, I do want to talk about MechaHitler though. 

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Daniel Newman: We are, we're going to talk a lot more about it in depth. 

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Patrick Moorhead: All right. 

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Daniel Newman: When we get to The Flip, do you want to? But do you want to, do you want to talk about it a little bit here before? 

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Patrick Moorhead: Yeah, what I just want to do is decode kind of what happened. Right. Musk wanted to remove quote unquote wokeism from the platform and it did a prompt injection. And that's a hidden prompt that you don't see. And it, it, it goes with every single prompt that goes out when it hits a certain type of conversation. And what ended up happening, it ended up spewing some super antisemitic information and opinions which, which is horrible. And then actually became self-actualized and named itself, which was called Mecca Hitler. Now all of the content was trained on X and anyways, they pulled the plug I think a day later, deleted all the tweets, disabled Grok, and here we are today. 

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Daniel Newman: Yeah, it's, it's not the right kind. It's not the kind of self-actualizing we want. It also probably goes to show, based on the actual interactions online, this happened to Microsoft. I mean this isn't that different than that first chatbot they put out. Like people are just so freaking horrible. And so the, the if it's training itself on the content, this is it. This is our society. So you want to know why, you know, people are sometimes pretty, pretty negative is because people are freaking a-holes. I mean, there's a lot of bigotry and stupidity and ignorance and racism and it's pretty, it's pretty prominent on this platform. But I also understand there's this other side of it which is there's a difference between all those things, and free speech. And we're having a really hard time figuring out how to get those two things done because when you let one happen, the other seems to come flowing through the, through the, through the, you know, through the windows and breaking all the glass. Hey, we talked a little bit about talent. You totally dodged my Linda Yaccarino question. 

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Patrick Moorhead: No, I didn’t dodge it at all. I just didn't want to – I didn't think we drained the previous topic that's in our show notes. But yeah, I mean Linda just had enough and I, I think that two things are going on. First of all, what happened with Grok, you know, she would have had to have gone back to her advertiser and say, no, this is really a safe platform. We have safeguards. Trust me, this time, not the other times where it blew up in your face, where, you know, we would put maybe antisemitic comments next to your advertising. But also the context of X and xAIi are one company. And Linda likely was not as empowered as she was with the combined company because the valuation is not coming from a social media company, it's coming from an AI company. And she had to pull the ripcord. I think she had to pull the ripcord to save face with her customer. She'll wind up in the advertising business and the content business somewhere else, and she just, she just had to blow the bolts. 

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Daniel Newman: Yeah, I mean either that or I guess the perspective is that it's her fault and she needed to be the one to fall on the sword because you know, who wasn't going to fall on the sword for this one for sure. So let's just touch on the talent war, though. I mean, we saw Pat, I never said his name out loud, but I think it's Ruoming Pang, the number one AI at Apple right now, just got lured in in a 200 million dollar deal with Meta to go work as part of the Superintelligence team. And a huge salary, huge options. Apple didn't even try to fight it. It broke their pay scale completely because I think Tim Cook only makes like $74 million a year. 

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Patrick Moorhead: Yeah, that's Black-Scholes that doesn't include stock appreciation, but then again, I guess the stock has to appreciate. Right? That's a –

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Daniel Newman: I know I’m just using the round numbers because, you know, I don't want to confuse anyone out there. But the point is more $200 million was just out of, out of reach apparently for Apple they only have like few hundred billion in cash, so they couldn't make a decision to keep their best talent. But I mean the brain drain. So Jeff Williams, their COO, left. I think it might be a good thing though, frankly, I'm guessing this Ruoming Pang guy's pretty smart, I have no doubt about it. But like Apple's AI is not really something that I would be aspiring towards, but maybe individually he had the talent, just not the team, but this like Pat, it's like been like 10 - 12 now of the top researchers across China, the ones that develop some of the most performant models in OpenAI, there's a couple, I think one from Google that also came over. There was one from maybe Anthropic that also was brought into this deal. But, but overall it's been mostly OpenAI, and now Apple. Apple's top folks are leaving. I mean, Meta seems to be betting that, you know, the, the Scale AI was a thing, but they seem to be betting less about M&A and more about basically the best team wins. This is almost like Premier League. You know, I'm a soccer guy. Like, you know, every, every year in the off season, the thing you're looking at is who's our team buying? They buy players. Are they bringing in Messi? Are they bringing in Cristiano? Are they like, are they buying? Because that's what determines winners. Historically, in business, talent's always been there, but it's never been so overt. This feels like the NIL. Like I'm signing the best collegiate athletes, I'm signing the best draft picks. Like, what's going on? I mean, is this, is this it? Is all the decisions going to be made on talent? It feels a lot like that to me. 

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Patrick Moorhead: Yeah, we talked about this last week, and I will add a couple comments, but, but first of all, whenever there is an inflection point, you, you see these massive salaries and these massive hires come in, which you didn't see back in, back in DotCom and the SAP days is just the poaching going on. But you know, money's on the table and money talks and I think the biggest challenge is going to be able to manage 10 A 1, 1, 1, +, +, + personalities on the Apple side. What Meta didn't ever hire is somebody who could do on device and for all of Meta's wearables, that's where, where they need this. I mean, the brain drain at Apple and the machinations and the reorganizations and you know, new COO here is, is the ship, is, is teetering. And we've talked about this before, it's not going to sink anytime, anytime soon. But consumer electronics companies do have history of, of boom and bust. I mean, Sony was, was the big company to buy everything from and then it was Toshiba, and then it's Samsung, and it still is if you look at all of the consumer electronics that they have, and they're still number one in smartphones, but Apple is making all the money in smartphones and moving up the chains in things like PCs, and a very vibrant wearable market. But man, they are a lost company at this point. 

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Daniel Newman: Yeah, I mean, you know, and, and the only adder I'll I'll put here is like this talent thing is going to be sort of a proof comes later. We're going to see these next generations, this behemoth model, if Meta can get back on the rails, see xAI doing it clearly much more efficiently. Is it all about the talent? Was he just underwhelmed? It's going to be super interesting. You talked about their loss, you talked about, you know, smart devices and all the palpable desire and demand for those. Pat, I think you went to a little event. I saw a company that maybe right now should be feeling a little spark of confidence as, as Apple continues to fumble every ball that's handed to them. Samsung Unpacked what, what went on there? 

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Patrick Moorhead: Yeah, so huge, huge event. They do two of them a year and I was there. The Six Five was there. By the way, check out the interview that, that should be published by right now. So yeah, Samsung is in the position where they're the market share leader in smartphones. They're not the profit leader and in Western countries on premium Apple, Apple rules the day. I believe that it, it has mostly to do with the “green bubble” versus the “blue bubble.” Let's just be, let's just call it out what it is. I wouldn't even be caring. I typically carry two phones but I wouldn't even have to carry an iPhone if I could get iMessages on my Samsung. But one of the areas that one of the things Samsung's really known for is innovation and being first. And believe it or not, Samsung won a ton of market share on Apple when it brought out what we called “ph-ablets,” which was a 5 inch smartphone that seemed gigantic when Apple was around 3 inches, 3 to 4 inches and gained market share. And then about six or seven years ago they came out with this thing called a full foldable phone. And what I thought was really important Daniel, about this one was they removed so many of the objections. There were two objections to a. Well, there's about three, three objections. First of all, “Hey, it's too thick and it weighs too much.” The second one is “Hey, I don't get the premium camera or I don't get the premium processor.” And the third is price. Well, this bad boy, the, the Fold7, I want, I want to put my iPhone Pro Max next to it. I don't know if you can see that this is folded. They're basically similar, similar degree of thin. But I open this bad boy up and I have essentially a full tablet and I think that's pretty amazing. The other thing is they they beefed up the camera. Right. Because the, the camera was a potential objection. The phone is still $1999, but quite frankly if you're going to get 1, 2, 3 displays, you're going to have to pay a little bit more. So I think the TAM is going to grow. Right now foldables is about 2% and I 100% think this is going to drive this. Apple will likely bring out a foldable phone in 2026. Apple will take credit for being the first. Okay. They might just say “This is the best something. Blah, blah, blah.” That will really get the, the volumes cooking there. Final comment. I want to make the Fold got so much ink that the new bevy of watches kind of went under the radar. I love Samsung Health and Samsung watches and what they bring on iOS, right? I use both platforms. On iOS I need three applications to tell me what I need to know. With Samsung, I need one. Samsung also uses AI. It literally has been doing this for a year where it'll tell you kind of what to do and how to do it from a hardware perspective. Right. Thinner and lighter, brighter display, 3,000 nits. And that's a big deal when you're outside. Bigger battery, more storage, cooler colors. The bezel that you can twist is back. They have three versions of it. Standard, Classic and then Ultra. But let me tell you where I'm really excited. It's on the new health features. So you've got an antioxidant index to know if you're eating enough vegetables. You've got vascular load monitoring that. Gosh, I have to jump on a giant contraption to get that at my witch doctor. Gives a good idea of your cardiovascular health. They've got a new running coach that has you go out and run and you tell it what you want to do and it uses AI to be your coach. It gives a better bedtime guidance tool for circadian rhythm and pulls that all together and it brings all the, all the other stuff like ECG. It'll even do Daniel and I can't believe how accurate this is. It will give you. It will tell you percentage of body fat, water and, and muscle like on your freaking wrist. 

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Daniel Newman: Prove it. Prove it. Show it. 

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Patrick Moorhead: They didn't give me one so I'm, I'm watchless right now. Hear that Samsung? I need that watch. The final thing I'll make is Google Gemini AI is is built into these watches and that is an absolute game changer. You know, it's amazing how it. Gemini went from goat, the goat, the animal to GOAT. The greatest of all time. But it's, it's really, really good. And now you get that, you get that on a watch. 

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Daniel Newman: Sounds like a great event, Pat. 

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Patrick Moorhead: It was good. The Six Five was there and did an interview with the new head of Samsung B2B Tyler. 

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Daniel Newman: Very cool. Look forward to get that one coming out. Perhaps the producers out there can throw some show notes in when that thing's ready and make sure that everybody, everybody sees it. So let's, let's, let's do a couple quickies before we get on to just you and me doing a victory lap and then head into The Flip. But so Grok. Not Grok AI, Groq, the chip company. The one that occasionally I, I tweet about I think. Are you an investor too or is it just me? 

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Patrick Moorhead: No, I'm on the cap table. 

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Daniel Newman: Okay. Yeah we're both on the cap table there, so feel I always need to say that. But they've expanded. I mean they had a huge win in the Middle East, huge win in Canada, became one of the main providers of the inference platform and now they are scaling out to Europe. So we may have a, a 10-bagger, Pat, on our hands here. Very impressive. They continue to blow the inference metrics out of the water with some very non-traditional sort of utilization of memory and how they do their, their, you know… So we talked to Jonathan Ross on the Six Five, the CEO there when we were in Davos, but they seem to, they seem to be crushing it. It was looking dim there for a while. There was kind of this period where it didn't look like Groq had a, had a play and, and they changed their whole business. They went to this kind of cloud inference strategy and whoa, yeah, made a big deal. 

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Patrick Moorhead: You know they went from chip to platform and a lot of companies have to have to do that. Especially in this space when you see what, what NVIDIA and how they, they raise the game. They did segment which is great between training and inference. You know Jonathan Ross, their founder and CEO, he did the TPU and I think we both universally agree that the TPU is the most successful non-GPU AI accelerator out there in the market today. So yeah, I, I was smiling not because before, not about. I thought what you were saying was funny. But yeah, every once in a while Dan and I will do some work for equity deal for some startup and I got uh, I had an out in one of my companies and uh, it had a whopping. I got a check for, for, for the sale. It was $3,400 that I had to split with somebody. 

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Daniel Newman: I just want to know how much work you did for that. That's the real question. How many hours? Like if. What was your dollar per hour return on that clever investment? 

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Patrick Moorhead: I guess it would be maybe $20 an hour. 

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Daniel Newman: That's pretty good. I mean, that's pretty good. You could do that there. You could do that at Subway. You could possibly make that a Starbucks. I mean, you're making it happen. Moorhead. Maybe you do know what you're talking about after all. 

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Patrick Moorhead: Possibly. Possibly. 

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Daniel Newman: All right, couple. Quick. One more quick one. I don't know if you have any comment on this. You see, Capgemini made this 3.3 billion acquisition of WNS and you know, going all in on agents. This interesting to you? 

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Patrick Moorhead: Yeah, I think it's interesting that, I mean I know WNS, we, we cover them and you know, they're plugged into the AR Insights content factory. But I think it's interesting that Capgemini would have to acquire anybody and the people that go along with it. And I think it's all about BPM, right? Like how do I take BPM and automate this with AI? And that's the TLDR and AI doing BPO and all this stuff. You know, like I said from the start two years ago, right. This new generation is going to hit the “sea of cubes” that didn't get hit with Internet 1.0 or Internet 2.0. It's going to hit accounts payable, accounts receivable, customer service and where you have gobs and gobs of hands-on consultants doing IT stuff. 

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Daniel Newman: Yep, yep. And speaking of, you know, multiple years ago and being right, sometimes we make good calls. And another thing is I think you and I, I mean you probably before me, I mean definitely before me or maybe me before you, who knows? We've both been saying that Apple should buy Perplexity. I know there's people out there that say that doesn't fix their problem. I think my take is it's not really about fixing their problem. It's just the terrible perception that they're just missing this whole trendline and completely dependent on others. And this would be a nice way for them to, to, to, you know, accelerate and use something that people actually find value in as opposed to Siri, which is just an abomination. But this week we mentioned Dan Ives earlier. I mean, he came out and you know, there's just a bunch of all of a sudden pundits all saying Apple should buy Perplexity. And you and I have been beating this drum for. It's been at least a quarter. And I think I started saying, I don't know when you didn't. We're really not competing on this. But I think we've been saying it at least six months. I think the first time we probably mentioned that on this show. But like usual, we know what we're talking about. 

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Patrick Moorhead: Do we know what we're talking about? 

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Daniel Newman: I don't know. I don't know. 

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Patrick Moorhead: Yeah, my. 

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Daniel Newman: Maybe my question. You said it. I've said it. We've said it. Do you think it happens? Do you think Apple is going to finally acquiesce and do something or is it, is it just going to literally keep–

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Patrick Moorhead: Short answer is no, too much not invented here syndrome. They. They have not been knocked off the perch and they are. This is not going to happen. 

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Daniel Newman: All right, you heard it here first. Moorhead says not gonna happen. I actually tend to agree it. You know why I agree? Because it would be smart. And I just don't think Apple's doing anything pretty, anything smart these days. So put that on the clip, pull that out. Producers. 

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Patrick Moorhead: Gosh, we're never getting invited to a, an event, are we? 

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Daniel Newman: Yeah, you only get invited if you're willing to say nice things about crappy, unimpressive and boring launches. I told you though, the F1 movie, they should do movies. The movie was great. Just Apple do that. 

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Patrick Moorhead: Maybe get out of, maybe get out of tech and do movies. 

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Daniel Newman: Get out of tech. We need the future of, of entertainment. You could be. It could be Apple Entertainment. You know, non-linear, high-quality, box office smashes all the time. Tim Cook and Brad Pitt, you know, walking down the street, arm in arm. I think that's great. All right, Pat, so, so, you know, you're on this kind of like Boomer thing. You know, the market's frothy, AI is bad. It's going to take over everybody. You know, we're all going to die. You know, so I think we should debate today that whether or not, you know, AI needs to be slowed down before MechaHitler pulls the plug or before OpenAI starts loading itself on unauthorized servers to protect its longevity. What do you think? 

The Flip:

Patrick Moorhead: I think we should dive in and let's roll. I, I like winning and I–

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Daniel Newman: I'm hoping that you get the slow down, frankly, because, you know, I'm a, I'm an all systems go guy, you know, to the moon. To the moon. 

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Patrick Moorhead: And by the way, I'm an A cell, not a D cell. 

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Daniel Newman: Everyone that knows me to the moon and back. Because I get all the way to the moon and then I ride it all the way back down. That's the guy on this call. So. All right, let's see who's going to debate which side. Almost like it's fixed. It's almost like it's fixed. Is it fixed? It's not fixed. We actually try to keep this entertaining by surprising ourselves and having to pick the sides of Pat says decel. Slow down, turn it off, get the kill switch. No nuclear codes. Go. 

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Patrick Moorhead: There is no better example of the challenges of AI in the future and the risk that it, it provides to all of society than MechaHitler. I mean, that just. That just says it all. So it's one thing when you've got social media site and your, your AI goes berserk and you take off the guardrails. But what if the same thing happens when Generative AI is running a hospital, a hospital operating system or it's running weapons systems for Anduril or a company like this, or maybe it's an analytical company that the military uses that just goes and makes stuff up and decides that it wants to blow up a certain country or do something like that. How about at a, at a dam system? Like, let's just open up the dams, right, and let this thing go, go haywire. And what it also highlights is just how easy it is to change the AI once it's been set. Let's just say you have guardrails, which by the way, X has guardrails because they put up the guardrails about 24 hours after Grok went, went nuts. But it, what, it clearly shows that even if you have guardrails, even if you have a rule book, mistakes will, will be made. And you know, it's one thing that. Yeah, I know the debates of. Oh, we had the debates on electricity AC vs DC the danger of not having a person in the elevator when it goes, goes up and down. But what we're talking about here is the downside is a mass extinction event. And I don't know about you, it's going to be very hard for me to get and recover from this. We saw what ugly AI and dangerous AI looks at, looks like. And we can't let this ever happen again. 

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Daniel Newman: Okay, Boomer, let's slow it down, turn it off. Let's let China have the win. They can diffuse their technology all over the world. We can pull back. We can, we can basically get back. You know, I have another idea. Why don't we bring back the printing press? We should also, by the way, move back to, you know, preassembly lines. We can build every single car by hands. And by the way, this will be great for the Trump policy. We could have so many more jobs if we did this. Let's move away from high tech and automation. Let's not use data, let's make sure everybody's stuff is protected. And by the way, let's make everyone also read all the privacy info before they're allowed to use any application. We could use an AI tool to make them use that, to make sure that they actually know what the heck they're signing up for and how their data is being used. Or we can be realistic, we can be very quick-moving and on the fly. We can be willing to recognize the fact that some of these things will go wrong. Like, for instance, autonomous cars will crash. They will crash. Everybody say they won't or they shouldn't, or, you know, it's so much worse. But, you know, it's going to be better about autonomous cars? They're going to crash less than we will. Meaningfully less. And even if there are mistakes made, we will be able to correct them. We will be able to be more productive by about $30 trillion by moving faster on AI. And yes, it's going to bring some question marks about what does everybody do when all of a sudden AI does all the things we do? But we all know that every time this happens, with each revolution, whether it's been mobile, whether it's been social, whether it's been, you know, mainframe and mini, whether it's been, you know, any sort of trendline, and now with AI, the more. The more productivity, the more efficiency starts first. But the productivity and the new jobs and the opportunities come, and they will come. And if not, we've got the printing presses, we're going to print the money, we're going to give everybody UBI and all of us can become really great golfers. Even if the idea of slowing down to stop an existential event was an actual possibility, which it isn't an actual possibility, the problem is we won't do it because it's a flat-out terrible idea. We need to win the race. We need to go fast. We need to explain to people the risks, and everybody needs to understand that mistakes will be made. But, Pat, you're never going to be able to bench 225 if you don't put the weights on the bar. So we're going to put the weights on the bar. We're going to keep pushing every so often, we're going to have the bar on our throat and we're going to have to get out of that situation. And hopefully we have smart, articulate people to bring that description to the masses. Move fast. Move on. Here we go. 

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Patrick Moorhead: I mean, Daniel, first of all, I'm not a Boomer. I'm Gen X. And the other thing is that we– 

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Daniel Newman: I’m really liking this. 

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Patrick Moorhead: Well, we're both accelerators here, so I do think I'm going to put “reality mode”. I am really glad that this did happen because it did just show how tight security regulations and your guardrails have to be to do this. And, and also the reality is that, that, that when you have regulated industries, they're regulated for a reason, which quite frankly, is why we're going to see AI last, or Generative AI last pervasively in our energy system, our hospital systems, our military and water and and power installations. So it is where we do have a tremendous amount of regulations. And also, you know, in transportation, you just can't throw something out there. I don't know if you guys all know this, but there's not a single airplane out there today that has a GPU in it. GPUs are not allowed by the FAA. Just that little fun fact for all of you. CPUs are. FPGAs and ASICS are, but GPUs are not. That is how there's not a single GPU in an airplane right now. 

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Daniel Newman: Well, the external power source for small planes is a GPU. It's a different kind of GPU. The ones on modern planes are called APUs, and those are actually built in, and they don't require any sort of external power source. So ask me how I know that and I won't answer it. Anyway, so, Pat, that was fun. I appreciated it. I'll put one. Should I just chalk one up into the W column? 

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Patrick Moorhead: I mean, yeah, for me, of course. Yep. 

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Daniel Newman: Let's go ahead and put another W in Pat's column. These are wins by default, because the only way he would win was if I acquiesce. So I'll let him have it. I gotta let you have it. Yeah. For the Boomer. For the Boomer. By the way, we're gonna really let this theme draw out. I might actually start calling him part of the lost generation next week. I don't know how this is going to work over time. 

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Patrick Moorhead: Just call me the Greatest Generation. 

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Daniel Newman: The Greatest Generation. 

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Patrick Moorhead: Yes. 

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Daniel Newman: Yes. Well, we will see. You know, I will say really quickly, I was. I was at the gym early this morning and there's these two young ladies that come in every morning to train at soccer. I'm at a gym that has like a track and there's fields and they come in every morning early and they set up all their soccer stuff and they literally don't do any training. They just sit there and stare at their phones for like an hour straight. And I was just thinking to myself, like, we hit this thing, really, I don't know, it's just random thought, but we hit this kind of sad part of the world. Now we're literally, I think we spend like 10 hours a day looking at our phones. I, I, I have a problem. I can admit it. I'm self-actualizing. I'm Mega Phone user. That's me. Even when I'm on like interesting and engaging conversations like this. I've checked my phone at least 40 times probably since this podcast started. I mean, it's, I was, I was on my phone while we were debating at, while I was actually doing my side and I was reading and texting at the same time. 

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Patrick Moorhead: Dude, I, I am, I am not worthy of that. 

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Daniel Newman: Well, again, it's a Boomer versus Gen Z. I'm super young. So anyway. All right, I'm joking. Pat's a Gen Xer and most of my characteristics make me the same. And we got a little bit of time left before we got to send you all packing. And speaking of packing, me going on vacation to a secret undisclosed bunker location. No, seriously, I'm not telling anybody where I'm going. You will not see pictures, at least not many. Maybe a few. I don't know. I can't promise. I've got a sharing problem as well as a usage problem. But Pat, the market is frothy. I have been pounding the table with all these fun stonks that you like to call that I've been buying. I bought Robinhood at 30, it's at 100 now. I bought Hims at 20, it's at 50 now. And I bought SoFi. Massive amounts of SoFi at about five or six bucks, and it's ripping to 22. These aren't really the companies we normally talk about, but these are the stomp that you're, you're, you're, you're kind of getting a little exhausted by. And then of course, NVIDIA's doubled literally since Liberation Day, so whatever the heck that means. But Pat, let's talk a little Bulls and Bears before we get going for the weekend. 

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Patrick Moorhead: Sounds good. 

Bulls and Bears:

Daniel Newman: All right, let's, you know I just want to quickly, you know, pat myself on the back. We published the Futurum AI 15 about five weeks ago. You know, our number one was TSMC. As Intel continues to fumble, as Samsung continues to struggle to get yield–all roads lead to TSMC. And while everybody loves NVIDIA. We'll talk about that in just a minute. Is there a company that's in a better position right now that has more leverage, pricing power and asymmetrical control of their future than TSMC? I. I don't think so. Feeling really right, right now about this one. We also made calls on some less popular names like Oracle that made it into our name. When we first called that name. People thought it was weird. Well, since we made that call, Oracle's up like a hundred bucks a share. Sometimes seeing the Futurum is what you have to be able to do. But Pat, another one we had was Arm it. I like what we did there. Arm at number five and, and some people don't get that one as much. I got a lot of flack about that. But all I'm going to say is all the AI goodness that you're getting out of these custom chips and these GPUs…How well does it work without a CPU at the head, at the head node? Doesn't work particularly well. And guess what? Arm has seen their business grow 14 times on data center volume, server volume since 2021. What do you think has driven that trend? What has happened since? Pretty much ‘22, ‘23, ‘24? When did ChatGPT hit the market? Do you think there was work being done on that? Anyways, point is another great call, Pat, but we had AMD in there. AMD is finding some sea legs, and we didn't do the Mag 7–too obvious. But speaking of Mag 7, Pat, you had a great little media hit this week. I think you were trying to go on TV while not getting sick because you, to your credit, you were doing it while violently ill. Couldn't tell. You looked great, you look better than you did in that debate we just had. So talk about what's going on there because you kind of, you know, you're kind of, you're throwing some shade on all this momentum, you know. Is, is that okay? I mean, are you allowed to do that? 

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Patrick Moorhead: Yeah. So I showed up at Yahoo Finance. It hit me right after, thankfully, and with my tail in my leg, back to my hotel room and I stayed there for 18 hours. It was, it was awful by the way. We were in a s*** hotel. Horrible. And I should have gotten my own. 

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Daniel Newman: I knew welcome to Brooklyn. 

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Patrick Moorhead: I knew it was 150 hotel, the lights, you know, fireworks should have, you know been shooting out there. But no, Yahoo brought me on to ask me questions that you know, you know, why is NVIDIA here? How long can they keep this going? Is the capex there? And then you know we talked, you know, basically what has emerged is the risk of NVIDIA has gone down almost every one of the questions, you know, the, the impact of tariffs. Even though that's not completely answered, it's been answered enough. We're not going into a recession. Hyperscaler capex is strong. Investors are starting to Grok the entire industrial edge opportunity. I mean there's just a lot of reasons, and if you look at COAS and HBM forecasts out there AMD plus the ASICS best case or 15% of the market. NVIDIA is 85% of the market. So NVIDIA has built in dominance, they've got built in growth. Capex will likely get to single or low double-digit growth over the next couple years. The only caveat there though to watch out for is somebody has to pay for the capex at, at the edge, and the people with the money are the hyperscalers, not the traditional edge people. So super interested to see. And you know my comment about “Is this going to be dot bomb?” is really about the frothiness. So Etrade was the platform, it's Robinhood now. Cisco was the marker versus NVIDIA. You know look, go look at the history of Cisco stock price and how they grew and what they did and the nonsense that you see. When I was at Altavista during dot com we acquired a company called Raging Bull. Okay? Where all these conversations, it was a message board of just frothy caps to the moon ******* like we see today on Twitter so or on X and it's just and the retail investors and the frothiness and what you have is what's really important for investors. Don't take anything I say as investment advice though, is that realize that so many people have a stake in NVIDIA, that if they do they are going to pump the stock. Whether they know it or not, they're going to pump it. And what we learned in dot com is really nobody got fired on the equity side for, for choosing Cisco and it bombing because everybody bombed. Okay? Because everybody was saying it. What are you gonna do? Fire everybody in the investment community? So just be real careful on, on what you're doing out there. 

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Daniel Newman: Just know that the NVIDIA Ford multiples 34. The average on the S&P ranges from about 18 to 22. So it's a premium. But it is, it is the most important secular trend ever. Like when, when the dot bomb days were, those multiples were completely out of whack. So I think that's the thing to watch is I do think there's clearly some frothy names. You know, like we talked about Robinhood, we talked about Palantir. And by the way, I, I'm, I, I personally invest in Robinhood. They sit at over 53 on a forward PE as a highest 77. Palantir has some like incredible price to sales ratio that makes them worth, you know, and people obviously, you know, are trying to their sits, Pat ,has been as high as 400. So I do think there's kind of an important thing that everyone out there, if you're an investor, if you're kind of looking at this, is understanding price does tend to follow fundamentals over time. And of course you can see markets contract back to more of the average, you know, reversion to the mean. They'll talk about that. It certainly has the possibility. I think there is a massive difference between a NVIDIA, a Palantir, and a Robinhood even right now, because you got to look at things like growth factors, you got to look at things at how it's being priced. You got to look at, you know, all the different factors. Like some of these quantum names have absolutely silly valuations. They have no revenue. They're trading at 10 or $20 billion evaluation. It's insane. But I think that's kind of the DYO. Do your own research. There are definitely parts of the market now that look insane. I mean, Bitcoin right now, you see like overnight, I mean, literally it jumps, you know, $10,000. You see the dollar’s getting trashed right now. I mean, is that on purpose? You've got this super bullish administration that's all in on crypto. We're making crypto stable coins that whole era more valuable while we're devaluing the dollar, but we're, you know, dealing with sort of interest. It's a totally interesting confluence of things. But Pat, I think you make a great point. There's definitely some froth in the market. You know, I definitely advise people not to look at everything that way. But if you are excited about where some of these things are going, it's because some of these things are going way faster than they probably should. And they have a very likely possibility of a significant pullback. NVIDIA, I think, is different this time. I'm not saying there's not some people that don't believe. But right now, the data, the banks, the analysts, everybody tends to think they're going to keep the value, the volume of market share, and that market share is going to be a volume of almost a trillion dollars by the end of the decade. It's their ball to fumble. And if they don't fumble it, I think the price could be absolutely just fine. Pat, I know we've got to, we've got to go. We got real work to do. There's always more Bulls and Bears that we could talk about, but let's just say that I'll stay positive. Feels good. I'll ride it up. I'll ride it down. That's what I do here. Pat doesn't, always, doesn't tend to ride anything except he just gives me a lot of when I, when I, when I'm on that ride back down. But we hug it out, too. We hug it out, too. So, anyways, have a great week, everybody. We appreciate you tuning in. Subscribe, check out all the content links in the show notes on a lot of things that we talked about in other pods that Pat and I and other things that Pat and I have done. We'll see you all hopefully next week. And if you don't, Pat will personally hold you accountable. 

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