462: Goodbye Charlie, Nvidia Q3 & China, Google Chrome, Amazon GenAI Ads, Half-Life Documentary, EVs, and Netflix Got Conned
"the choice itself is a recursive part of the decision"
You must know the big ideas in the big disciplines and use them routinely – all of them, not just a few.
Most people are trained in one model – economics, for example – and try to solve all problems in one way.
You know the old saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.
–Charles T. Munger
😢 💚💚 Goodbye, Charlie. I’ve learned so much from you.
I’ll miss your independent mind, thirst for knowledge, and generosity in sharing what you’ve learned.
Oh, and your sharp wit too!
I have nothing to add.
🏋️♂️💪 I have been keeping up with my strength training.
Not quite with an iron discipline, but enough to notice improvement.
I’m glad I got the Nüobell adjustable dumbbells and the REP workout bench (I wrote about them and posted photos in Edition #449), because recently I’ve been doing more at home than at the gym (friction matters!).
A new tool has been helping me, and it’s not made of iron, but bits:
The Hevy app is a pretty good workout tracker. I initially tried the Strong app, and I like the UI better than Hevy, but my friends are on Hevy and development velocity seems higher for Hevy, so I switched over.
As a metrics/statistics nerd, I find tracking progress very helpful and motivating.
I love how the app can show a radar chart of which body parts are being trained and keeps track of routines, weight amounts, and personal records.
It’s also neat that it keeps track of cumulative volume in absolute terms. For example, it’ll tell you that you lifted 12,000 lbs during a workout, and then tell you that this is equivalent to a pickup truck or helicopter. It doesn’t serve any immediate purpose, but I like it!
In fact, if I worked on the app, I’d add a few other ways to visualize stats in fun ways (if there’s one thing we know how to do in finance, it’s data viz!), and I’d try to make the UI as satisfying as possible when it comes to checking off sets.
It’s the attention to detail that differentiates apps, like buttons that feel fun to tap, with nice visual and haptic feedback.
👩🏫🚫👦🏼👦🏻😣 We’re in week #2 of the teachers’ strike at my kids’ school, and it hasn’t been good for my family’s mental health.
Somehow, we pretty quickly went back to feeling a bit like we did during the pandemic.
I live in one of the jurisdictions in the West where we had the most days of lockdown — it was endless, months and months, and always started with “let’s do 2 weeks” and then that would turn into 3 weeks, 4 weeks, 6 weeks, 8 weeks, etc. Clearly, we have some PTSD from it, and it doesn’t take much to trigger it.
At the time, the uncertainty made everything worse, and it’s part of the problem with this strike. Will it be over this week? By Xmas? ¯\_(ツ)_/¯
It doesn’t help that up North, it’s the most depressing time of year.
Deep into November, there’s little light — the sunrise is late, the sunset is early — and many many overcast days. And we don’t even have much snow yet to brighten things up (snow makes a big difference. It’s so reflective that it’s like having more sun).
We’ll get through it — never give up, never surrender! — but I could have done without this...
🍷🥃🧬 Back in Edition #460 I wrote about the concept of the solera, both for wine and spirits and as a metaphor for other things (gas tanks, water heaters, batteries, bioreactors, etc).
You shared some good ideas of other things that are solera-like, including how our DNA is a bit like that, with sexual reproduction acting like fractional blending, and mutations over evolutionary times providing new genetic material that replaces some of the old one.
Reader Low Risk Rules linked to a concept that I had seen years ago but forgot about:
It sounds very Avengers-like, but it’s just creating your own solera bottle:
The infinity bottle (or “fractional bottle” or “living bottle”) seems to have first entered prominence courtesy of a 2012 video by popular whiskey YouTuber Ralfy Mitchell. In his thick brogue, he rhetorically asks viewers, “How can you create something which is 100 percent uniquely yours? That is part of your whiskey or spirit drinking history? That becomes, in fact, a family heirloom in time?”
His answer is what he calls a “solera bottle,” likening his experiment to the world of sherry, in which casks are fractionally blended over time via the solera system in order to create consistency. Using an empty bottle from WhiskyBlender, Mitchell affixed a label to the back in order to keep a running tally of each new whiskey he added, and when. An infinity bottle, he says, can create “a taste that you just can’t buy,” one worth far more than what he paid for the component whiskeys. He also imagines a world where children inherit their parents’ or grandparents’ solera bottle started decades before.
Maybe I should start my own Infinity Bottle 🤔
💚 🥃 🐇 I know you’ve been sitting on the fence for a while, meaning to support this project but putting it off to a later time.
Well, *now* is the time!
Your support makes a big difference and every new signup makes my day (I email each one individually):
🏦 💰 Liberty Capital 💳 💴
🔥 Nvidia Q3 Highlights 🔥
The whole world was scrutinizing Nvidia’s quarter, so I won’t rehash all of it. I just want to highlight a few things.
First, Nvidia is now on top in the semi industry in both revenue (above) and operating profit when it comes to the quarter:
Nvidia: US$10.42 billion
TSMC: $7.21 billion
Intel: Loss ($8 million)
Samsung chip division: Loss (₩3.75 trillion) ($2.86 billion)
Also, here’s Jensen:
Generative AI is the largest TAM expansion of software and hardware that we've seen in several decades. [...]
there's a whole new segment of software called copilots and assistants. Instead of manually used, these tools will have copilots to help you use it. [...]
We'll connect all of these copilots and assistants into teams of AIs, which is going to be the modern version of software, modern version of enterprise business software. And so the transformation of software and the way that software is done is driving the hardware underneath.
I’m sure that Satya Nadella was smiling when he heard that one.
AWS is making big orders get getting closer to Nvidia. They will be the first to get the H200 version of Grace Hopper :
AWS said it will operate more than 16,000 Nvidia GH200 Grace Hopper Superchips
These have triple the memory of H100s.
🇨🇳 Nvidia Delays China Chips 🐌 🐜
Nvidia has told customers in China it is delaying the launch of a new artificial intelligence chip it designed to comply with U.S. export rules until the first quarter of next year [...]
The delayed chip is the H20, the most powerful of three China-focused chips Nvidia has developed to comply with fresh U.S. export restrictions [...]
The sources said they were told that the H20 was being delayed due to issues server manufacturers were having in integrating the chip.
I have an uneasy feeling about Nvidia’s relationship with China.
On one hand, perhaps Nvidia being able to sell very powerful chips to China could benefit the West over the longer term by keeping China more dependent on CUDA and the adjacent software stack than if they were cut off cold turkey. But I kind of doubt it.
It’s very obvious to the CCP that supply could evaporate at any time, and they’ve been pushing Huawei and others to create homegrown solutions.
They also benefit from a lot of open source software that tries to abstract away CUDA and allow code to also run on AMD and Intel chips, even though it was never meant to help China specifically, just to create more competition and reduce dependence on Nvidia.
Is Nvidia supplying China with most of what it needs while they work hard to eventually replace it? Is the US going to bear most of the costs of export controls without getting much long-term strategic benefit by making China become a lot more self-sufficient?
Although the cut-down Nvidia chips may make training very large models difficult, the H20 seems pretty great at inference.
What if China throws a lot of hardware at training, resulting in higher costs and lower efficiency, but allowing them to ultimately still create very large and sophisticated models?
They have been stockpiling A100s and A800s for a while, and no doubt got a bunch of H100s by routing them through other countries and circumventing the ban. So the cost to train a model may be higher than if they still had an all-you-can-eat-GPU-buffet, so they may not be able to get to the cutting-edge, but I suspect their capabilities are still very high.
Another possibility is that through espionage they steal cutting-edge Western models, making training relatively moot. As long as they can fine-tune and do inference, they’d have most of what they need, at least for certain use cases.
Western AI labs should definitely beef up InfoSec as much as they can (there’s been news of Anthropic hiring more security experts a few days ago).
🏇🤺 7 Signs of High Agency People ⛹️♀️ 🥋
1. Weird teenage hobbies - Teenage years are the hardest time to go against social pressures. If they can go against the crowd as a teenager, they can go against the crowd as an adult.
2. Energy distortion field - If you meet with them when you’re tired and defeated, you leave the room ready to run a marathon on a treadmill with max incline. Low-agency people do the opposite.
3 Golden question - If you’re in a 3rd world prison cell and had to call someone to get you out, who would you call? That’s the highest agency person you know.
4. You can never guess their opinions - The boxer that writes poetry. The advertiser obsessed with the history of war. The beauty queen who reads Nietzsche. If their beliefs don’t line up with their stereotypes, they’ve exercised agency.
5. Immigrant mentality - If they’ve moved from their hometown, that’s a good sign. If they’ve moved from their home country, that’s an even greater sign.
It takes agency to spot you’re in the wrong place, resourcefulness to operationalize a move, and a growth mindset to start from zero in a new location.
6. They send you niche content - Low agency people look at the social engagement of content before deeming its quality. High-agency people just look at the content. They spot upcoming trends very early.
7. Mean to your face but nice behind your back - The social incentives are to be nice to people’s faces and gossip behind their backs. To do the opposite requires agency because they’re swimming against the social tide.
🔌🚘🔋 The Electric Vehicle Cycle is Wobbling 📈📉
From shortages, tight supply, and rising costs to this:
The world is unexpectedly awash in battery-grade lithium and nickel, pushing down their prices 76% and 44%, respectively, year to date.
Carmakers—worried about tepid EV sales growth compared with their lofty expectations—have slashed EV prices to eliminate unanticipated inventory on their sales lots, and scaled back plans for future assembly plants. [...]
the cost of battery packs this year [was] $139 per kilowatt-hour, a 14% decline from 2021
As usual, what matters is the delta (▲) between expectations & reality.
The absolute number of EVs sold is still very high, and any long-term historical chart of unit volume looks healthy. However, like with many other things during the pandemic years, expectations got a bit crazy, and short-term trends were extrapolated, and we’re now in the adjustment period.
It should help that the industry is standardizing on one plug — NACS which is Tesla’s plug — and EV owners will benefit from access to all the fast-charging infrastructure out there. One fewer reason to be skeptical of going electric.
But generally, EVs will win through further refinement, iteration, and lower prices.
China is where EVs are currently hottest despite a slowdown:
EV penetration in China reached 22% of new car sales in October [...]
In the U.S., EVs had just a 7.9% share of new sales in the third quarter. But sales growth is slowing in China, too: Rating agency Fitch said EV and hybrid sales growth in China dropped to 28% in the third quarter, from 108% in the same period last year,
🏰 The Strategic Importance of Chrome for Google
I recently wrote about the gigantic mountains of cash that Google has been paying Apple to secure the default search engine spot in Safari on iOS and Mac.
In that context, can you imagine how valuable Chrome is to Google?
Friend-of-the-show Byrne Hobart (💚💚💚💚💚 🥃 ):
When Google launched Chrome, Microsoft's browsers had 59% market share. In other words, more than half of Google's search business relied on an application owned by a company with its own search engine. And that company also had the privileged position of determining system-level defaults, such as how often the OS should nag users about whether or not they want to update their default browser (conditional, perhaps, on whether or not that default browser is owned by the company that makes the operating system).
The defensive aspect is clear, but there’s also a more offensive data advantage that helps Google with search results and ads, as well as having more control over web standards through sheer user mass.
♾️🔁 Interview: Derek Sivers
I’ve long been a fan of Derek Sivers — I was buying CDs from his company 20+ years ago — and really enjoyed both of his recent appearances on Infinite Loops:
The discussion about the counter-intuitive idea that whatever choice you commit to *becomes* the best choice was incredibly thought-provoking.
It’s a kind of non-financial reflexivity, and makes the choice itself a recursive part of the decision.
📺 Amazon to Small Merchants Video Ad Buyers: We’ll Make the Ads for You
Amazon has relationships with millions of merchants, many of which buy search ads on its website. The company is trying to reduce friction for them to also buy ads on its streaming video properties:
Amazon is approaching brands that already buy search ads on its e-commerce website with an unusual pitch: if you buy streaming TV ads, we’ll make them for you. [...]
Amazon in recent months has been paying for the writing, shooting and editing of commercials if brands spend at least $15,000 to run them on Amazon streaming sites like Freevee and Twitch, according to two marketing consultants whose clients have taken Amazon up on the offer.
It’s an interesting experiment.
I doubt it scales if Amazon has to create ads the old-fashioned way, but I suspect that with generative AI tools improving rapidly, it may soon be able to do it relatively quickly and inexpensively.
Amazon conducts a lot of smaller experiments. This one may not go anywhere, but with both Meta and Google also offering generative AI tools to create ad campaigns, I wouldn’t be surprised if this one stuck.
🧪🔬 Liberty Labs 🧬 🔭
🔥 🎮 Half-Life: 25th Anniversary Documentary 🔥
A fun look behind the scenes at how one of the best and most influential video games of all time was created by a rag-tag crew of mavericks.
There’s a fascinating moment halfway through: They’re approaching the game release deadline, and they realize that their game isn’t fun to play, despite an incredible amount of work and innovation.
So they decide to push back the release (“Late is just for a little while, suck is forever”) and financed the extended development themselves, allowing them to come up with a creative system to make it fun.
🍎 CT Scanning Counterfeit Apple AirPods 🥸
Fake products have always been around, but as technology marches on, counterfeiters have become a lot more sophisticated.
It’s one thing to make a fake handbag or pair of sunglasses, and it’s another to make fake — but working — AirPods.
Jon Bruner at Lumafield used an industrial CT scanner to look inside real and fake AirPods:
Today's counterfeit products are so sophisticated that they often appear visually and functionally identical to the genuine articles—at least initially. [...]
Moving to the internal circuitry, the genuine AirPods are a marvel of miniaturization and precision engineering. They use a combination of rigid and flexible printed circuit boards to pack components densely and ensure that every millimeter of space is used effectively. On the other hand, the counterfeit AirPods reveal much simpler electronics cobbled together from off-the-shelf components. That leaves less room for functionality; the counterfeits have fewer microphones and less control circuitry, compromising their sound quality.
If you follow the Lumafield link above, you can look at the 3D scans from any angle (rotate them, zoom in, etc). It’s very cool.
Lastly, the contrast in overall build quality is dramatic between the genuine AirPods and their counterfeit counterparts. One of the fakes doesn't offer wireless charging at all (no coils are visible in the scans), and the other one has wireless charging coils but lacks the magnets that snap the real AirPods case onto Apple's Watch charger. The counterfeit AirPods even resort to using internal weights with no other function than to mimic the heft of the genuine product, a deceptive tactic for making them feel heavier to compensate for poorer materials and less functionality.
I wonder how many people are currently using “AirPods” that aren’t from Apple… 🤔
⚡️ ‘A slice of Western Link subsea cable’ ⚡️
This can handle 600,000 Volts of direct current (DC) at a 2.25GW continuous rating! 🤯
h/t James Watson
🎨 🎭 Liberty Studio 👩🎨 🎥
🎬 Netflix gave this director $55 million — he spent a lot of it on crypto, stock trading, and five Rolls Royces 💸
The project with Mr. Rinsch has turned into a costly fiasco, a microcosm of the era of profligate spending that Hollywood studios now are scrambling to end. Netflix burned more than $55 million on Mr. Rinsch’s show and gave him near-total budgetary and creative latitude but never received a single finished episode. [...]
He gambled a large chunk of the money from Netflix on the stock market and cryptocurrencies. [...]
Mr. Rinsch then went on a spending spree. He bought five Rolls-Royces, a Ferrari, a $387,630 Vacheron Constantin watch and millions of dollars’ worth of high-end furniture and designer clothing. The tab came to $8.7 million, according to a forensic accountant hired by Ms. Rosés.
He lost close to 60% of the $11 million that he transferred to his brokerage within weeks doing option trades, but he was luckier buying Dogecoin during the 2021 crypto wave.
The guy certainly has guts — he’s now suing Netflix, claiming they owe him an additional $14 million:
Mr. Rinsch and Netflix are now locked in a confidential arbitration proceeding initiated by Mr. Rinsch, who claims the company breached their contract and owes him at least $14 million in damages. Netflix has denied owing Mr. Rinsch anything and has called his demands a shakedown.
Via BuccoCapital (Artie! 🇮🇹)
👾🎮 Why do Video Games have a Relatively Low Cultural Footprint? 💰🎬🍿
Friend-of-the-show Rohit Krishnan asked an interesting question:
What's the best theory on why games have such a low cultural footprint despite the incredible economic prowess?
It's so much bigger than music or movies but our references for it seem limited. Mario, doom, quake, prince of persia, halo, unreal, there are a lot but it's just not like a common lexicon at the same level.
I came up with some theories, but I could pretty easily argue against each… So my answer is: I don't quite know ¯\_(ツ)_/¯
I suspect it’s a mix of multiple factors that don’t seem to explain things in isolation, but that taken together add up to games punching below their weight culturally 🤔
What do you think?