Limitless: An AI Podcast

Josh:
China just released KimiK3, the most powerful model to ever come out of the

Josh:
country. The question on everyone's mind is, is this going to create a bubble

Josh:
or is it already happening in front of us?

Josh:
KimiK3 is the most impressive model leapfrogging the frontier American models

Josh:
and some benchmarks and doing so in a way that is significantly cheaper and open source.

Josh:
So the conversation over the entire weekend is not only is there a bubble,

Josh:
but how credible, how strong is the American moat as it comes to China.

Josh:
We always discuss the timelines and how America is normally ahead by,

Josh:
I mean, let's say six to 12 months.

Josh:
It seems like that timeline has kind of shrunken a little bit.

Josh:
And you see how these two countries are kind of juxtaposing the way they're

Josh:
going about it. There was two speeches that happened on Friday.

Josh:
One was from America blaming China on rigging votes. And the other was China

Josh:
very strongly presenting themselves as the up and coming AI leader.

Josh:
So there's a lot to unpack here, probably starting with the market,

Josh:
which was nothing but red over the last couple of days because you have to assume

Josh:
there is a little bit more uncertainty than normal as it relates to

Josh:
just ai models in general and how how it turns into china i mean look at this

Josh:
look at the screen share that is a wall of red

Ejaaz:
Yeah, so last week was basically China's retaliation to the American frontier

Ejaaz:
models, and it happened in a pretty big way.

Ejaaz:
As you mentioned, Moonshot Labs, which was the creator of this model called

Ejaaz:
Kimi K3, which is completely open source, is now the largest open source model ever.

Ejaaz:
It comes in at around 2.8 trillion parameters, and it's super cheap to use when

Ejaaz:
you compare it to Fable 5 and GPT 5.6.

Ejaaz:
Now, the question on everyone's mind is, is it necessarily good enough?

Ejaaz:
If you look at the NASDAQ market and how it responded last week,

Ejaaz:
it shaved off hundreds of billions

Ejaaz:
of dollars, like it was down completely in response to this model.

Ejaaz:
The reason being is, it doesn't matter if it competes with Fable 5 or if it's

Ejaaz:
as good as GPT 5.6, what matters is the cost.

Ejaaz:
When you look at Fable 5 specifically, you're paying around 50 to 56 bucks per million tokens input.

Ejaaz:
And when you compare that to Kimmy K3, you're paying around 50 cents to a dollar.

Ejaaz:
So if you're an enterprise that is burning tens to hundreds of millions of dollars,

Ejaaz:
or if you're a software engineer that is spending all your tokens on an expensive

Ejaaz:
$200 a month membership, you might want to consider an alternative model.

Ejaaz:
And in this case, it'll be a Chinese model. Now, the craziest part about this

Ejaaz:
is the valuation of Moonshot Labs in January of this year was $4.3 billion.

Ejaaz:
Now, after they released Kimmy K3 just last week, they announced that they're

Ejaaz:
raising at a new valuation of $30 billion.

Ejaaz:
That is still 30x cheaper than OpenAI's $1 trillion valuation.

Ejaaz:
And Anthropic is valued at the same amount. So the question in everyone's mind is,

Ejaaz:
are the American labs overpriced or are the Chinese labs underpriced?

Ejaaz:
We're going to have a series of Chinese IPOs coming from the AI labs,

Ejaaz:
such as DeepSeek and Moonshot over the next roughly six months or so.

Ejaaz:
And the Chinese president Xi Jinping reinforced this in a very big way on Thursday,

Ejaaz:
where he took the stage in Shanghai in person at the World AI Conference,

Ejaaz:
the first time since 2018 to make his first public commentary on the AI landscape.

Ejaaz:
And he had some pretty major takeaways for everyone.

Josh:
Yeah. Like you mentioned, this is the first time since 2018 taking the stage.

Josh:
This is a fairly big deal. And his kind of thesis could be summarized in one

Josh:
line, which is AI should not be a solo performance by a single country.

Josh:
It should be a symphony of international cooperation, followed by a shot at

Josh:
Washington, which said we should jointly oppose overstretching the national

Josh:
security concept in the field of AI or placing one country's security over that of others.

Josh:
And it was really interesting. I mean, I mentioned this in the intro briefly

Josh:
to see that kind of juxtaposed against the other speech that was happening simultaneously

Josh:
on Friday night, but back in Washington, where President Trump,

Josh:
he went on to accuse Beijing of the largest compromise of election data in history.

Josh:
So while one president is standing up in front of the AI conference for the

Josh:
first time, offering the world basically free frontier intelligence through

Josh:
these open source weights, another one is complaining that we've been robbed and

Josh:
That we're not simultaneously while this kind of lead that we have is continuing to shrink.

Josh:
And there's this post he says, I shared it with you just before recording.

Josh:
I loved it. It was from Travis Kalanick.

Josh:
And for those who don't know, Travis Kalanick, founder of Uber,

Josh:
he's the guy who has famously went into China and convinced them somehow to

Josh:
allow him to let robo taxis into this country is very familiar with how they were culturally.

Josh:
He said, in my experience, China rules different on these topics.

Josh:
If you're in China and you tell a business colleague, dude, they frauded me, they took my stuff.

Josh:
The natural response is, why'd you let them get your shit together?

Josh:
And I think this is kind of beginning to show the two differences in cultures.

Josh:
We know that China doesn't have any regard for IP and therefore is able to distill

Josh:
the models, is therefore able to rip off all of our IP. And that's how they're

Josh:
able to accelerate so well.

Josh:
I think my question now, Ejaz, is are they actually going to ever be able to

Josh:
flip the United States in terms of capabilities if they continue to just distill and follow along.

Josh:
It feels like they can maybe get that lead closer and closer,

Josh:
but in order for them to actually break through and create something better,

Josh:
it will require some technical breakthrough that they haven't quite shown.

Josh:
So when we look at the market, does it feel overreactive that it's down so much,

Josh:
even though they don't actually have a frontier model and getting a true frontier

Josh:
model would imply a lot of breakthroughs that they've never been able to do.

Josh:
I mean, they can't even serve this model yet. They're overflowed with just Kimmy requests.

Ejaaz:
Yeah. And I think what you're referring to in that last sentence is Moonshot

Ejaaz:
Labs announced over the weekend that they don't have enough GPUs to support

Ejaaz:
everyone's signup and request.

Ejaaz:
So they've had to pause new subscriptions. So it's an over-demand.

Ejaaz:
And I actually have this really cool chart from the folks at Open Router who

Ejaaz:
basically allow anyone and everyone to get access to these open models as well

Ejaaz:
as American frontier models.

Ejaaz:
And it shows that 58%, near 60% of users in America now are using open source Chinese models.

Ejaaz:
So we're now flipped from using American frontier models in the majority of

Ejaaz:
token expenditure to Chinese models, which is very significant.

Ejaaz:
But to answer your question more directly, Josh, it depends how you define what a breakthrough is.

Ejaaz:
Now, a breakthrough in itself is Kimi K3. It may not be Fable 5 worthy,

Ejaaz:
but the The fact that it's been able to catch up to within like,

Ejaaz:
you know, striking distance of Fablefy, but not quite as good,

Ejaaz:
but at a fraction of the cost,

Ejaaz:
could be considered a breakthrough. If you look at their white paper,

Ejaaz:
you've seen that there's a bunch of new research things that they've been able to figure out.

Ejaaz:
I think they call it Kimi Delta, attention attenuation, or whatever the hell

Ejaaz:
that's called, which allowed them to efficiently scale two and a half times

Ejaaz:
more efficiently than any other frontier lab has done.

Ejaaz:
Now, if you look at America, they haven't been able to do this.

Ejaaz:
What they have been able to do is throw tens to hundreds of billions of dollars

Ejaaz:
at the problem and hope that it would fix itself.

Ejaaz:
So more efficiently for a much cheaper cost.

Ejaaz:
Now, if you ask me if the American labs stopped putting out new models,

Ejaaz:
so let's say we never got anything later than Fable 5 from Anthropic going forwards,

Ejaaz:
I think it would take Chinese labs significantly longer to catch up with them

Ejaaz:
simply because they have been distilling. You know, you talk about their disregard for IP.

Ejaaz:
That is primarily the way that they've been able to catch up to America frontier

Ejaaz:
models. Now, my question that I throw back to you maybe, I'm curious what your

Ejaaz:
thought is, is distillation necessarily malpractice?

Ejaaz:
I think everyone is kind of doing it, like I looked at,

Ejaaz:
Thinking Machine Labs last week, which is Mira Morati, ex-OpenAI CTO's new lab.

Ejaaz:
And they announced this new open source model. It's their flagship model.

Ejaaz:
It got a lot of attention.

Ejaaz:
Every American spokesperson was like, hey, American open source is so back.

Ejaaz:
Look at this new cool model.

Ejaaz:
Now, if you look at the white paper, they basically distilled DeepSeq v4's architecture from China.

Ejaaz:
So we're kind of like all distilling and copying everyone's kind of trends and

Ejaaz:
research to collectively make better models.

Ejaaz:
And I don't necessarily know if it is a bad thing. The final thing I'll say

Ejaaz:
is Fable 5 was restricted and banned for a while.

Ejaaz:
It's only actually been fully live for like three weeks right now.

Ejaaz:
There is no way Moonshot Labs was able to fully distill the model and create

Ejaaz:
Kimi K3 in that shorter time span. So they're doing something different, is what I'm saying.

Josh:
Yeah, well, Fable is like one model. I'm sure they have been doing this with others.

Josh:
And I think when it comes to research, like algorithmic improvements,

Josh:
similar to what Murmurati's company was doing, it's a little bit different than blatant IP

Josh:
copying, where like, sure, there are these technical techniques,

Josh:
like the transformer that everybody uses, but then there is the actual IP built on top of it.

Josh:
And that is where I mean, it is just illegal to do these things is illegal to

Josh:
steal other companies information like this.

Josh:
And it's obvious that China doesn't have any regard for this.

Josh:
So I would say it is different in the sense that this is just like blatant IP

Josh:
ceiling. And while it is sure a gray space and a lot of companies distill from a lot of places.

Josh:
This is just blatant, illegal...

Josh:
Disregard for copyright. And I think that is like where you can comfortably draw a line.

Josh:
If you are the United States, I worry that perhaps there is an over-indexing

Josh:
coming just before we were recording, Ejaz, you mentioned there's a possibility

Josh:
that open source models are going to start to have some pushback,

Josh:
perhaps from the government.

Josh:
There is some resistance happening towards that.

Josh:
And should that happen, I do worry what the world looks like then,

Josh:
because when you think about the costs of these things, like frontier intelligence

Josh:
models, You're paying, what, $10 to $50 per million tokens.

Josh:
And for these frontier open source models, these Kimi models,

Josh:
you're paying, what, $1, $0.50, maybe $2.

Josh:
Yeah, $0.50. And it's like that, if those start to get banned here in the United

Josh:
States, you're almost in a way forcing consumers to pay a significantly higher

Josh:
price for similar levels of intelligence.

Josh:
Like if you're paying a 50 times multiple for a model that is perhaps 10% better,

Josh:
that seems like it is problematic for just general users in the United States

Josh:
who don't want to pay perhaps $50 per million tokens, but they also want access

Josh:
to close to the frontier.

Josh:
There isn't really an option for them right now. And banning these open source

Josh:
models also doesn't seem like a good place to be either.

Ejaaz:
I think people are just tired of overpaying and they're starting to kind of

Ejaaz:
like look at their wallets and budget spends and thinking, well,

Ejaaz:
maybe if there is a sexier alternative, I'll go use it. I don't care if it's

Ejaaz:
Chinese, it's open source after all.

Ejaaz:
Now, it hasn't escaped me that the irony of China being the open source proponents,

Ejaaz:
the fact that in Xi Jinping's speech over the weekend, he basically said like,

Ejaaz:
hey, we need to be openly collaborating with each other.

Ejaaz:
This can't be a solo kind of like country thing. And we also can't be imposing

Ejaaz:
export restrictions. We've just got to just got to let people build, man.

Ejaaz:
Compare that to like Trump's America or rather, you know, capitalist America,

Ejaaz:
who is supposedly meant to be proposing the same kinds of things,

Ejaaz:
but they're actually like, you know, we might actually end up banning the Chinese

Ejaaz:
open source models. Like, it's just ironic to me.

Ejaaz:
If you're looking at this objectively, the question that you should be asking

Ejaaz:
is, are these models actually good? Like, what are they actually good for?

Ejaaz:
If they're not Fable 5 worthy, like, what can I be using it for?

Ejaaz:
And I think there's a really good example from David Sachs over the weekend here where he goes,

Ejaaz:
Kimi K3 just fixed 15 critical security bugs that Codex and Fable refuse to

Ejaaz:
because of cyber guardrails.

Ejaaz:
And over the weekend, I was using Kimi K3 quite a bit. And I will tell you,

Ejaaz:
the number one feature has got nothing to do with how smart it is,

Ejaaz:
or how long it is, or how cheap it is.

Ejaaz:
It's the fact that I can ask it a question, and it just answers,

Ejaaz:
or I can give it a task, and it just does it. There is no relegation to a lower class model, Kimi K2.

Ejaaz:
It just kind of like does the thing. If I did the same thing for Fable 5,

Ejaaz:
if I did the same thing for GBD 5.6, there is a very high probability that they

Ejaaz:
would just say, sorry, I can't answer that.

Ejaaz:
Or sorry, I'll give you a cheaper, crappier model to do your thing. And it's quite freeing.

Ejaaz:
It's kind of like the feature in itself. Like I don't really care about the

Ejaaz:
benchmarks. It's the fact that I have a near enough really good model that can

Ejaaz:
just do the work. Is it slower? Yes. Does it use more tokens?

Ejaaz:
Yeah. Is it as cheap as I could have hoped?

Ejaaz:
Maybe not, but I don't really care because it's unrestricted.

Ejaaz:
I don't know if that makes sense, but like, yeah, that's my experience.

Josh:
Yeah. And this is the difficult part too. It's because like that wasn't really

Josh:
always the intention either.

Josh:
It's like if they wanted to release this model in the public,

Josh:
the government would not allow it without these safeguards.

Josh:
And they tried and it got banned for almost a month. And that's,

Josh:
that's part of the problem that I think a lot of these labs,

Josh:
and that's kind of what David Sachs is referencing now,

Josh:
is that if you have a frontier model, you are now burdened by the approval process

Josh:
of the U S government before comes out, which will oftentimes include these

Josh:
restrictions that do set things back.

Josh:
And the reality is, is that, I mean, Kimi K3 is basically close to frontier

Josh:
level cyber capability, and it's going to be freely downloaded soon.

Josh:
And if it's not Kimi K3, it will be Kimi K4 in a couple of months.

Josh:
And the reality is, is that while these safeguards are very important to have

Josh:
when they are truly at the frontier, the moment it becomes freely and openly

Josh:
available elsewhere, it loses all the advantage and then therefore puts everyone

Josh:
who is burdened by those safeguards at a disadvantage. And that's this really difficult thing is

Josh:
If you're the AI labs, you want safe intelligence that is aligned with our best human interests.

Josh:
And you also want to offer people the best tools possible.

Josh:
And the US government is saying, well, this is great, but they need to be safe.

Josh:
We need to approve these things.

Josh:
And all the while, this is slowing things down. I mean, how long did it take for us to get GPT 5.6?

Josh:
It was sitting there ready for many, many weeks until they approved it.

Josh:
And during that time, we got Kimmy K3. And there's this really difficult disconnect

Josh:
that's getting hard to wrap my head around.

Josh:
As it relates to the Chinese frontier labs, just kind of burning, scorching the earth.

Josh:
I mean, this was very much Meta's plan when they first were trying to come up

Josh:
in the world of AI, where they were just going to scorch the earth,

Josh:
create the best open source models, distribute it to everybody,

Josh:
and lower the margins of the frontier labs.

Josh:
And the reality is, is that China's just kind of taking that and grabbing it

Josh:
by the horns and running with it.

Josh:
And I'd say doing a pretty good job so far.

Ejaaz:
Yeah. Okay. So something that we have discussed a lot on this show, Josh, is valuations.

Ejaaz:
It's ipos it's generating wealth let's talk is there a bubble or not you just get into it,

Ejaaz:
well okay yeah there's definitely a bubble the question is,

Ejaaz:
is should the bubble be popped and this is a very visceral example that we're

Ejaaz:
showing on the screen right now right so you have opening eyes valuation at

Ejaaz:
the top which is near a trillion dollars

Ejaaz:
and then you have deep seek which is a fraction of that at 71 billion dollars

Ejaaz:
and then moonshot this week who got a valuation upscale to $30 billion.

Ejaaz:
So it's sitting at 30x less the price of OpenAI, despite being near frontier

Ejaaz:
capability of their flagship model, GPT 5.6.

Ejaaz:
Now, we know that there is a ton of frontier American IPOs that are happening

Ejaaz:
by the end of this year. You've got OpenAI, you've got Anthropic,

Ejaaz:
and you've got a few more chip companies as well.

Ejaaz:
And then you've compared that to the Chinese IPO.

Ejaaz:
Aiming for a valuation that is considerably less than that, you've got Moonshot,

Ejaaz:
Kimike2, Kimike3, sorry, doing the same exact thing.

Ejaaz:
And the question is, which one is overpriced or underpriced?

Ejaaz:
Now, my guess, if I had to have a take here, would be that,

Ejaaz:
I think the Chinese frontier labs are going to bring the valuation of these

Ejaaz:
open AIs and anthropics down in the medium term. And what I mean by that is

Ejaaz:
they have proven that you can get frontier capability for a fraction of the cost.

Ejaaz:
But the premium that sits with American frontier labs sits in the research,

Ejaaz:
sits in the talent, and sits in the fact that whoever is closest to building

Ejaaz:
self-improving models will end up capturing quite a bit

Ejaaz:
of future economic valuation that any of these AI models create.

Ejaaz:
And right now, the best bets, if you had to place it on Polymarket or wherever,

Ejaaz:
would be with Anthropic and OpenAI. So it's very important. You can't just look at models right now.

Ejaaz:
That's just a snapshot. You need to be thinking of Fable 6. You need to be thinking of GPT-6.

Ejaaz:
Can those models build themselves and build the next versions of themselves?

Ejaaz:
If the answer is yes, then you could justify some of these valuations.

Ejaaz:
But it is a bit of a leap. It's a bit of a thought boy kind of take,

Ejaaz:
I guess. I don't know. Do you think differently?

Josh:
Yeah, no, it could be true that both OpenAI is overvalued and Moonshot is undervalued.

Josh:
And the reality is, is that they should exist somewhere in between.

Josh:
The big difference, the reason why we see this 28 times multiple on these different

Josh:
companies is because one has a tremendous amount of revenue and a predictable

Josh:
future amount of revenue, and the other does not. We just saw how Kimmy had a huge success.

Josh:
They were unable to satisfy the demand. They had to shut down the signups of

Josh:
new people using their product because they just don't have the GPUs.

Josh:
So there is just not enough compute available to them in order to earn a higher

Josh:
multiple at this moment.

Josh:
They're offering it for free. There isn't predictable revenue drivers on it. It's just not possible.

Josh:
OpenAI, on the other hand, is trading at a very high multiple on its revenue.

Josh:
But the reality is, is that like you mentioned, it is somewhat close.

Josh:
You have to imagine getting closer and closer to this like self-recursive learning

Josh:
loop. And we have no idea what that's going to look like, But we can suspect

Josh:
and we can hypothesize that the totals demand for tokens is going to continue to be up only.

Josh:
Basically forever or for at least a very long time. And should that be the case,

Josh:
there are only a few companies that are able to satisfy that demand,

Josh:
let alone satisfy that demand at a high quality.

Josh:
So it's really this race for GPUs. And it's funny because at the end of the

Josh:
day, the real winner here is Jensen.

Josh:
And I have a feeling this is why he's been so supportive of open source in general,

Josh:
because it just, it requires a tremendous amount of GPUs. it makes AI more accessible to more people.

Josh:
And as other companies begin to make their own custom ASICs or their custom

Josh:
accelerators like Tranium and like the Google TPUs, there is going to be this,

Josh:
again, increasing demand throughout open source communities of the GPUs

Josh:
And I don't know if I'm looking at the market right now, I'm seeing things getting crushed.

Josh:
I'm kind of, I'm kind of bullish. I'm kind of like, wait a second,

Josh:
this is just a discount. None of the market sentiment, or I guess none of the

Josh:
market forces have really shifted in a meaningful way.

Josh:
The only thing that's changed meaningfully is the sentiment because people are

Josh:
a little bit concerned about where China stands.

Josh:
But the reality is to me is that while China has pretty great models that are

Josh:
very efficient, very open source, they're still so far away from the real frontier

Josh:
because the frontier so much more than just intelligence per token.

Josh:
It's the infrastructure.

Josh:
It is the sales teams. It is the business development. It is the reputation.

Josh:
It's the American institutions trusting your product.

Josh:
And so much of that is already baked into OpenAI, into Anthropic,

Josh:
into these large AI labs that it doesn't seem to me like there is a problem.

Josh:
Like, okay, these models are great, but they can't serve them.

Josh:
They aren't going to pass the frontier.

Josh:
And Anthropic and OpenAI, in the meantime, are just going to continue hurling

Josh:
so fast forward with very predictable revenues that are going to,

Josh:
I mean, expect it to go up only.

Josh:
And I think that makes me feel like this is a pretty actually decent buying

Josh:
opportunity and that maybe there is like a little bubble pop,

Josh:
but that happened for 72 hours and now we're back on our way.

Josh:
It seems to be like the market has become very resilient. And even though it's

Josh:
short-sighted, there is this kind of weighing machine over a long period of

Josh:
time that will work itself out to continue to guide upward, I think is the idea.

Ejaaz:
Yeah, I feel the same. When I look at valuations, when I see how volatile the

Ejaaz:
stock market is, I do think it is based on a lot of people's emotions.

Ejaaz:
But the fact of the matter is, whether you end up with a frontier model that

Ejaaz:
costs a lot of money, or if you end up with an alternative model that costs

Ejaaz:
a fraction of that, people are going to use the thing.

Ejaaz:
People who want frontier intelligence and can't afford the Kimi K3 intelligence

Ejaaz:
deficit will end up using Fable five and paying for the extra cost because they

Ejaaz:
get so much more, they make so much more money or they create so much more output on the back end.

Ejaaz:
The people who are hobbyists, who are young founders and startups who can't

Ejaaz:
afford the expensive models will use Kimi K3.

Ejaaz:
It'll take longer, but they'll end up building amazing things.

Ejaaz:
And Jevin's paradox will play out at the end of the day.

Ejaaz:
People will want more tokens. They'll want to consume as much AI compute as

Ejaaz:
they can for various different use cases. The winners at the end of the day

Ejaaz:
are you who are listening to this. The winners at the end of the day are the

Ejaaz:
businesses who want to use AI to accelerate their own purposes.

Ejaaz:
And I think that if you're looking at where, you know,

Ejaaz:
parking your money might make sense, again, like not investment advice,

Ejaaz:
it would be kind of like at the bottom of the stack, the people that are creating

Ejaaz:
the infrastructure, the people that are helping serve these tokens,

Ejaaz:
the people that are helping power these GPUs, the people that are creating the

Ejaaz:
memory to remember all the context that all these different models are going to create about you.

Ejaaz:
The fact of the matter is, if you look at Trump, you look at his speeches and

Ejaaz:
the policies that he's making. If you look at Xi Jinping, these guys are adversaries.

Ejaaz:
He's got the opposite kind of take. The ultimate unifying thread is more consumption,

Ejaaz:
more demand for more AI, more GPUs, more infrastructure. And that is technically.

Ejaaz:
The sector or the companies that are going to end up winning.

Ejaaz:
The most important Kimi announcement over the weekend is this one.

Ejaaz:
Kimi K3 has received far more love than we expected and our GPUs are feeling

Ejaaz:
it. They've stopped signing members up because they've run out of GPUs.

Ejaaz:
Now, whether they're using Huawei's GPUs, which was announced at the same conference

Ejaaz:
that Xi Jinping had a speech at, or whether they're using NVIDIA GPUs, the point is,

Ejaaz:
infrastructure is the moat and that's where capital is headed so whether memory

Ejaaz:
stocks are down whether these gpu stocks are down i think in the long term i'm

Ejaaz:
i'm pretty bullish and i know i'm pretty bullish relatively on this show but.

Josh:
I think we both are

Ejaaz:
Please prove me wrong like i'm i want to see the counter thesis.

Josh:
Yeah well listen it's been correct so far because i mean since the conception

Josh:
of the show we have essentially been up only and the market forces continue

Josh:
to point that way you know it's like there there is somewhat of a case to be made that perhaps the

Josh:
there being just two AI labs isn't going to work out great for everyone else.

Josh:
But the people who it works out for, like you mentioned, is the people who are

Josh:
providing the infrastructure to build this out.

Josh:
Because even in the case, let's say Kimi K4 is a true frontier model,

Josh:
they're still going to need a huge amount of compute and all the other labs

Josh:
are going to need a tremendous amount of compute to keep up.

Josh:
And the thing with this competition is, like, so long as the demand is there,

Josh:
the amount of resources required to supply that demand is just going to continue to be up only.

Josh:
And regardless of these outcomes, regardless of the open source starting to

Josh:
ship away at closed source or closed source maintaining its moat and just shooting

Josh:
ahead through the self-recursive learning, both of those realities require

Josh:
so much more compute, both to serve the larger models and both to keep up with this increased demand.

Josh:
Clearly, China can't do that. So I'd say safe from disaster.

Josh:
Once again, we've survived our second deep seek moment, perhaps.

Josh:
It only took us 48 hours to kind of rebound and get back to it.

Josh:
But we'll see what comes next. I mean, there are rumors, EJs,

Josh:
and I don't want to speculate, but I have heard that Ilya is beginning to wake

Josh:
up and has been receiving some pressure from investors to share what they've been working on.

Josh:
Ilya Sitskever, yes, Safe Super Intelligence, that guy, co-founder of OpenAI,

Josh:
he's been working quietly for how many years now?

Josh:
And I'm seeing on X all the time. It's like, hey, the investors at this company

Josh:
are kind of like getting a little restless.

Josh:
They know what's going on, but the world doesn't know and they want to get that bag secured.

Josh:
So I'm exceptionally excited for announcements like that, where perhaps there will be this huge sort of

Josh:
Improvement in efficiency or algorithmic improvement or something new and novel

Josh:
that can really push things forward in a big way so we are we are always a single

Josh:
breakthrough away from this catastrophic

Josh:
event either a catastrophic up or down we don't know but for now

Josh:
safe from explosion of the bubble for now and again like i mean china's just

Josh:
on their way and they're going to continue to keep firing with no regard for ip

Josh:
or any any sort of american laws and i think that's kind of where we could leave

Josh:
it is like hey kimmy k3 is a great model um you can't use it right now because

Josh:
it's a little too good um but it's a great model nonetheless and and the american

Josh:
markets felt it and hopefully it's um

Josh:
it keeps everyone on their toes

Josh:
moving forward very fast when it comes to iterating through these models

Ejaaz:
Yeah that's pretty much it i think if if there was a single sentence that I

Ejaaz:
would want to leave you folks with is we can't keep ignoring China.

Ejaaz:
Like those days are gone. They are here to play in a very meaningful way.

Ejaaz:
And they're leading the open source frontier, which means that,

Ejaaz:
you know, you can own your AI at home. These, the cost of hardware is going

Ejaaz:
to get a lot cheaper and you'll be able to have the privacy access and the cheap

Ejaaz:
efficiency costs that comes with that.

Ejaaz:
So keep an eye on the pulse, on the radar. If you can't do that,

Ejaaz:
if you're not on X the entire time, hey, we've got this really fun podcast called

Ejaaz:
Lemon Rhapsody. Subscribe to us.

Ejaaz:
We do four episodes a week. We post twice on a newsletter to hundreds of thousands

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Ejaaz:
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Ejaaz:
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Ejaaz:
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Ejaaz:
will say is Limitless has officially spun out. We are on our own.

Ejaaz:
We're keeping the lights on at home ourselves.

Ejaaz:
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Ejaaz:
And I think that's it, Josh. Anything else?

Josh:
That was pretty good. Dude, you got the outro dialed now. I think that covers

Josh:
just about everything and then some.

Josh:
Clearly we've been doing this for a lot. This is what, episode 210 now?

Josh:
So yeah, if you've made it this far, you know the deal. Thank you guys so much

Josh:
for watching and we'll see you in the next one.