00:00Switchyard Partners CEO Joe Kaiser looking ahead to the next phase of the AI race,
00:05writing, quote, chips and models have been the headline, but the next phase is infrastructure.
00:10The binding constraint for AI development in a ubiquitous way is which companies can power
00:15the compute for both the data centers and inference. Joe joins us now on set. Joe,
00:20a lot of big words there. But when we look at kind of this AI evolution and the AI build
00:24out,
00:25how are you thinking about the winners going forward in the near term and the long term,
00:28just given we've seen such a big rush and talk about bottlenecks around semis,
00:32a rush and talk about bottlenecks around energy access? Well, Bailey, it's great to see you again.
00:37I think about it in kind of chapter one versus chapter two. Chapter one was really about how do
00:43we get access to chips and how do we power these data centers, how we build them. And now in
00:49chapter
00:49two, it's more about the power and finding scarcity. So the way that I think about it is there's two
00:57things in chapter two that are important. One, it is bringing the compute to the power versus
01:02bringing the power to the compute, which is what edge computed inference enable. And then the second
01:08part is the first party data. Whether it's open AI, it's anthropic, these models are doing such amazing
01:17things, but they're doing it almost at the same pace. So it's creating a commodity. The frontier is
01:22actually becoming commoditized. CEOs that I talk to are shifting to open weight models. And so the data
01:28that power those open weight models is where the gold lies. How much is there concern, Joe, that we're
01:34going to see massive delays and that all of this spending is going to get pushed out anyway? I mean,
01:39that surely will affect the stocks of all these companies. Well, Bonnie, the way that I think about
01:43the delays, you know, the moratoriums that are happening all over the country related to power,
01:48that it actually creates a really interesting opportunity. And that goes back to what I was
01:53just saying about, let's bring the compute to the power as opposed to how we've done it in the past
01:58and cause trying to build these massive power plants behind the grid or behind the meter.
02:03And so looking for assets that I was joking with a friend, let's, let's make the entirety of downtown
02:11St. Louis into a gigantic data center because the power and the water are already there.
02:17You know, I think there's a resident or two who might tell you where to go on that one, but
02:21yeah.
02:21Yeah, a lot of debate there. But Joe, it is an interesting time, again, heading into the midterms,
02:25heading into a likely Anthropic IPO ahead of the midterms. How do you think potential pushback
02:30against Anthropic? We saw a number of posts on social media from former and current employees
02:36about what AI can ultimately mean for humanity as a whole. How do you think about the impacts of that?
02:41Yeah. So, so Bailey, I think what the power, the power of what, where the opportunity lies is not
02:49in governing AI. I think that is where we might see a slip up, but the power is, is actually
02:54capitalism.
02:55So if we empower companies and motivate companies to go build the guardrails around AI, so AI is not
03:03slowed down, that's where I think the answer lies. I mean, just think about this a couple of weeks ago,
03:09even. We were talking about, well, we're, we're, uh, token maxing. And all of a sudden there's a
03:14hundred companies solving that very problem. So if, if the government and, and investors motivate
03:20companies to build guardrails, I think that's how we ultimately get to the right answer.
03:25You know, you talk about bringing the data centers to the power. What really do you mean though?
03:29Because, you know, we can joke about a city, but say take Lake Mead, for example, there's lots of
03:34open space around there. Right. But there's no water in Lake Mead. So, you know, that's not going
03:39to work. Solar panels. I mean, what do you mean? Well, there is no silver bullet, Bonnie, but I think
03:46where you're going to see a lot of the compute start to be stood up is in the middle part
03:50of the
03:50country. So where does power exist? You know, one of the things that, um, we, we look for is there's
03:58power that's trapped if you will. So there's plenty of electrons, but they can't get to where the need
04:05for those electrons are. So think about there's a power plant in Kansas. It can't economically push
04:10those electrons all the way to Northern Virginia. So why not build the power plant in, sorry, build the
04:17data center in parts of the country like Kansas. The other thing that I would stress though, is that
04:23we are seeing this emergence of inference and edge compute. So a lot of the CEOs that I talked to
04:30are
04:30saying like, we can't keep spending the rate at the rate that we're spending for tokens. And so
04:36they're implementing open weight models, cutting, literally cutting the cost of what they would spend
04:41with Anthropic or open AI to sense on the dollar, bringing their own data to train and then, and then
04:47deploy those models. Um, and you use far less compute and therefore electrons to do that.
04:53Just very quickly here. How do you think about the access to capital though in the private markets
04:57and the public markets when you're going up against a Google and Anthropic and companies that can raise
05:01essentially blank checks? Yeah, that's a great question, Billy. I think what's happening right now
05:06is, um, the opportunity. We are in the earliest days of the next industrial revolution. And so there is
05:14not a shortage of capital for those, for, for new and emerging technologies. I think where folks like
05:20Anthropic are, are challenged going forward is they really have to solve for what, what, how I think
05:27about flops per task or the required compute per task. They must drive that down to grow into their
05:35valuation. Joe, I have to ask you, where are you from specifically? I am from Missouri. So hopefully
05:41Governor Kehoe will let me come back.
Comments