259: Nvidia Investor Day, Spotify & Google, Lapsu$ Hackers, Constellation Software, Lord of the Rings in Silicon Valley, Microsoft AI, and Boogie Nights
"The warehouse is also a robot"
A clever person solves a problem.
A wise one avoids it.
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🥃 🥃 Over the weekend, I drank some Laphroaig 10yo cask strength with my friend JPV, and the smokey flavor of the scotch was so delicious and intense, it made me wish that Laphroaig made cough drops.
Just picture the scene: a sore throat on a cold winter day, you pop a Laphroaig lozenge in your mouth and instantly feel comforted by the warm fireplace on your tongue!
I bet if they made these, they would go viral. It’s a clever concept, and everyone keeps describing Laphroaig as having kind of a “medicinal” taste anyway.
This is my free idea to Laphroaig. Sell them at the gift shop at the distillery, it’ll draw crowds and you’ll get thousands of social media videos of people making non-scotch drinkers try them!
🕯 If you say something in public, and someone pushes back on what you said (from mild correction on a detail to a full disagreement), the first thing that should pop in your head isn’t “how can I prove them wrong, what’s the flaw in their claim” but instead “is what they’re saying correct?”.
Attacking it from that angle leads to much better outcomes for all involved.
💚 🥃 If you are not a paid supporter yet, hopefully this is the edition that makes you go:
“Hey, I think I want to support what he’s doing here.”
Thank you for that!
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📚 A Word From Our Sponsor: Founders Podcast 🎧
Generally, sponsorships are written by the sponsors, not me. But I asked David to write this ad myself, because I’m such a big fan of what he does.
If books are the distilled knowledge and experience of exceptional people — literally years and decades of their lives that can be downloaded into your brain over 10-20 hours of reading — then Founders Podcast is exactly the same thing, but for the books themselves.
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Investing & Business
🔥 Nvidia Analyst/Investor Day Highlights 🔥
I think I’ve had Nvidia NVDA 0.00 stuff in 3 editions in a row (can we make it 4?), but what can I say, when there’s interesting stuff, I’ll write about it, and they have a lot of interesting stuff lately ¯\_(ツ)_/¯
NVIDIA currently has over 3 million developers in our program, growing from just -- from 2.5 million from just over a little a year ago.
Reminds me of Ballmer’s classic chant: Developers developers developers…
When we announced Grace last GTC, we only told half the story. The full Grace is truly amazing. The Grace CPU is a super chip, connected by 900 gigabytes per second NVLink. Grace CPU Super Chip has 144 cores and an insane 1 terabytes per second of memory bandwidth. Grace is on track for production next year.
Grace moves and processes mountains of data and is ideal for AI infrastructures, scientific computing and Omniverse digital twins.
One of Grace's best features is the rich ecosystem of servers, CUDA-X libraries, NVIDIA software platforms, RTX, HPC, AI and Omniverse and a world of partners that we will bring to Grace. NVLink will be coming to all future NVIDIA chips, CPUs, GPUs, DPUs and SOCs. We announced NVLink is open for customers and partners to build custom chips. NVLink opens a new world of opportunities to build semi-custom chips and systems that leverage NVIDIA's platforms and ecosystems.
Jensen also made it clear that even with that, we don’t know everything about the Grace CPU yet (“there are more surprises for Grace that will be coming out.”)
Modern fulfillment centers are evolving into technological marvels, facilities operated by humans and robots working together.
The warehouse is also a robot, orchestrating the flow of materials and the route plan of the AMRs inside.
You want TAM? We’ve got TAM:
In computing, we will distill our opportunities in serving $100 trillion of industries, cloud computing, consumer Internet, health care, financial services, energy, retail and logistics, manufacturing, industrial automation, higher education, scientific computing, digital content creation and more into chips and systems and our 2 major software platforms, NVIDIA AI and NVIDIA Omniverse.
We estimate our own available market opportunity at about 1% of the industries we serve. Over the years and decades ahead, our TAM will grow into this opportunity as you will hear today
AI isn’t just about plugging into and/or replacing traditional IT use cases, it expands into new areas of businesses:
We have created more AI software than anyone. We see this as our business opportunity, both hardware and software.
But also, AI is about use cases that change industries, either saving money or enabling new business. For example, in retail, AI is being used for automated checkout, a new experience that simplifies the shopping experience, driving more customers to stores. And it is also being used for loss prevention, saving money.
In financial services for fraud detection, in logistics for optimizing delivery. So this is not just about the envelope of traditional IT spend rather there is an opportunity for an AI provider to participate in the revenue of the industry itself.
It is estimated that the cloud server market installed base is 20 million servers and analysts project that this number will grow to 35 million by 2025. Driving that growth is the consumer Internet. [...]
From Meta to PayPal, Pinterest, Snap and Twitter, AI is being developed everywhere to process every engagement, every product, every recommendation to deliver great customer experiences. As a result, AI recommenders are becoming the engine of e-commerce, with over $7 trillion worth of sales projected by 2025.
Recommender AI models are now popular enough to deserve their own silicon, a dedicated accelerator *inside* of the AI accelerator...
70% of the AI papers published in the last 2 years incorporate Transformers into their work. Transformers are also the building blocks of the world's largest neural networks for large language models like OpenAIs GPT-3 and NVIDIA's own Megatron-Turing NLG-530B. This neural network has 530 billion parameters trained on the corpus of the Internet to build intelligent chat bots and other intelligent language applications.
Hopper, with its new transformer engine, is explicitly designed to accelerate these transformers. It can train GPT-3 6x faster than A100, reducing the time to train from 5 days down to just 11 hours. And it gives the latest mixture of expert -- transformer models from Google, a 9x boost, reducing time to train from a week to less than a day. Hopper's innovations don't just benefit training. When deploying these models for inference, Hopper delivers a 30x higher throughput compared to the A100.
We estimate auto to be a large $300 billion market opportunity. And NVIDIA's opportunity spans both hardware, software and services in the car and in the cloud. Inside the vehicle, there are nearly 100 million cars sold a year that will each need a high-performance computer. […] our 6-year pipeline from fiscal '23 to 2029 is now estimated at $11 billion. [...]
Today, electric vehicles and vehicles with L2+ or higher software represent less than 10% of cars sold a year. But in the next decade, a majority of the vehicles being sold each year should be electric, software-defined vehicles that support L2+ or higher capability.
That sounds like a rather large opportunity if they can be one of the winners (it’ll no doubt be a power law).
Here’s the % of gamers per generation and data-center revenue since 2018:
Valve continues to highlight gaming momentum. Last year, there were 30 million more gamers buying games on Steam. And the number of engaged concurrent gamers on Steam has more than doubled in 5 years. This past weekend set yet another record. The Epic Games Store has shown similar strength, adding almost 100 million users in just 2 years.
That’s a lot of new gamers! And only about 30% of Nvidia’s installed-base is on RTX capable GPUs, so the upgrade cycle has just started.
R&D since 2000 and capex since 2010:
In the Q&A the CFO mentions that their paid software sales are “a couple hundred million” in ARR, but with quite a bit of growth opportunity.
Jensen’s longer-term vision for where computing is going:
Long term, I expect enterprise and edge to be bigger than hyperscale. I believe that there will be not just hundreds of data centers in the world, but there will be millions of data centers in the world. And I believe millions of data centers will be out of the edge. And they have to be built, designed, orchestrated like it's a cloud computer, but it's all over the place so that you can ensure guarantee nanoseconds surely less than a millisecond of latency and guarantee that service every single time. Not best effort, no excuses doing high traffic times.
Because there's an industrial application connected to it. There are robotic applications, they're working hand-in-hand or machine to machine and they're communicating with each other, and they just can't afford to get behind
I think I’ll leave it here. 👋
Update: Just before sending this edition, Ben Thomspon (💚 🥃 🎩) published an interview with Jensen (I had kind of foreseen it here). I haven’t had a chance to read it yet, but am looking forward to it:
‘Spotify and Google Announce User Choice Billing’
Spotify SPOT 0.00 and Google GOOG 0.00 released a “we are excited!” kind of press release about “user choice billing”, which will allow the Spotify app to show both Google’s payment processing and Spotify’s.
Users who’ve downloaded Spotify from the Google Play Store will be presented with a choice to pay with either Spotify’s payment system or with Google Play Billing. For the first time, these two options will live side by side in the app. This will give everyone the freedom to subscribe and make purchases using the payment option of their choice directly in the Spotify app. Spotify will continue to freely communicate with users about our Premium subscription service, promote discounts and promotions, and give listeners on our Free tier the ability to convert to Premium directly in the app.
I’m not seeing anything about allowing different prices.
Maybe they just buried the lede or are ambiguous on purpose and this is part of “promotions”, but if there’s no price difference, what reason is there for users of the app to pick a third-party billing system?
After-all, there are benefits to using the platform’s payments — a lot of integration and consolidated billing and one process to unsubscribe and all that.
The problem never was that integration on the platform offers no advantages, just that many thought the platforms were charging too much for it and artificially restricted competition.
Google has made it clear that Spotify would still pay it a “service fee”, so it’s not like it would save the full Play Store cut. But from the user point of view, if prices are the same.. Well, what’s the point?
So hopefully pricing is up to Spotify and we start to see some real competitive pressures and price discovery, to allow the market to find out what this integration is worth to customers.
⚔️ ‘Like Lord of the Rings, but set in Silicon Valley’ 🧙♂️
Friend-of-the-show and supporter Frederik Gieschen (💚 🥃) has a great interview with friend-of-the-show and supporter Jimmy Soni (💚 🥃) It’s always fun when there’s more than one friend on a podcast:
The subtitle above is a line that Jimmy used to describe his vision of the book to Peter Thiel during their first meeting. I think it should’ve been the book’s subtitle!
Local newspaper in Moscow
Local newspaper in Moscow:
"NOTHING IS HAPPENING. Walk on by. A special operation is underway. No one is growing poor. The economy is growing."
h/t Marc Bennetts
Science & Technology
Lapsus$ black-hat hacker group run by… teenagers
Fulfilling every old-person-cliché of a hacker:
Cybersecurity researchers investigating a string of hacks against technology companies, including Microsoft Corp. and Nvidia Corp., have traced the attacks to a 16-year-old living at his mother’s house near Oxford, England.
Four researchers investigating the hacking group Lapsus$, on behalf of companies that were attacked, said they believe the teenager is the mastermind. [...]
Another member of Lapsus$ is suspected to be a teenager residing in Brazil, according to the investigators. One person investigating the group said security researchers have identified seven unique accounts associated with the hacking group, indicating that there are likely others involved in the group’s operations.
The teen is so skilled at hacking -- and so fast-- that researchers initially thought the activity they were observing was automated, another person involved in the research said. [...]
Lapsus$ has even gone as far as to join the Zoom calls of companies they’ve breached, where they have taunted employees and consultants who are trying to clean up their hack, according to three of the people who responded to the hacks. (Source)
Kind of tragic, really…
Such technologically savvy people could no doubt find great jobs as engineers or start their own businesses or whatever, instead of getting themselves in big trouble… Even if they don’t go to jail as minors, getting conditions like limited computer/internet access like Mitnick must suck.
👀 Microsoft Edge uses AI to generate image labels for low vision users 🧑🦯
More than half of the images on the web are missing alt text, according to Microsoft. Image labels are key for many who are blind or low vision, as they provide screen readers with text to read aloud. Microsoft is now attempting to fill the gap with auto-generated alt text for images on the web. [...]
“When a screen reader finds an image without a label, that image can be automatically processed by machine learning (ML) algorithms to describe the image in words and capture any text it contains,” explains Travis Leithead, a program manager on Microsoft’s Edge platform team. “The algorithms are not perfect, and the quality of the descriptions will vary, but for users of screen readers, having some description for an image is often better than no context at all.” (Source)
That’s how you use technology to improve the world!
Something to note: Apple has been particularly good at this kind of stuff, making “accessibility” features a high priority compared to most other platforms. I hope this becomes more widespread. MSFT 0.00
The Arts & History
‘Boogie Nights’ (1997, Paul Thomas Anderson)
I wrote about watching and really enjoying ‘Licorice Pizza’ (2021) by Paul Thomas Anderson in edition #253. It made me want to go back and re-watch ‘Boogie Nights’, which I hadn’t seen in probably about 20 years (damn, I’m now old enough that I can say that).
It’s crazy what scenes had stuck in my memory vividly, and which I had mostly forgotten.
The drug deal/robbery with the firecrackers… tense! 💥
I remembered them running out of that house to the red Corvette…
I had forgotten the donut store scene and it came as a surprise — for a moment I was really afraid that a stray bullet had hit his pregnant wife in the parking lot… Thankfully PTA didn’t go that far. 😮💨
And how young did Philip Seymour Hoffman look!
It was an interesting choice to have the character mostly end up in the same place that they started, not much growth. It could easily have been the traditional arc, but I think Anderson was more interested in the “finding a family for yourself” angle.
Oh, and if this is true, Burt Reynolds probably should’ve read the script a bit more closely (what a great performance he gave, despite not liking it):
After seeing a rough cut of the film, Burt Reynolds regretted making it. He fired his agent for recommending the role to him, and did not participate in promotional interviews. Reynolds ended up winning a Golden Globe for the role, and being nominated for an Academy Award for his performance. Despite being a front runner for the latter, it was widely rumored that he did not win because he had distanced himself from the movie earlier.
But whatever you do, don’t watch this with your kids, or your parents (poor Moses) 😬
I give you an A for the edition, and I give you an "EWW!!" for your selection of Sweaty Steve Ballmer picture. Yummy 😷🦨...... [it keeps moving.... make Steve stop moving.... 😉]
Laphroaig cough drops is why I read this newsletter.