00:00 Host
Nvidia’s foray in CPUs stirring up chip competition with AMD and Intel, and OpenAI has a new eye watering funding round, but another story is gaining steam as well, and it goes hand in hand with CEO Sam Altman very nicely done by the producer there. To unpack all the headlines we’re calling in for tech support with Yahoo Finance’s Dan Howley. Dan we got a lot to discuss. Let’s start here. Nvidia, you have a new great story out. You say Nvidia is moving in on Intel and AMD’s turf. How so?
00:32 Dan Howley
They’re horning in on their on their corner. Basically, uh what’s going on here is yesterday or the other day there was this big announcement uh Tuesday where uh you know, Meta and Nvidia have a new kind of expanded deal. Millions of of GPUs, whether those are uh Blackwell or uh Ruben, didn’t give us a dollar number.
01:00 Dan Howley
Okay, you already had a deal. What what’s the difference?
01:03 Dan Howley
We’ll just leave that aside. One of the smaller notes though was that uh Meta is going to start using CPU only servers from Nvidia. Now, okay, CPU, that’s like the thing that powers this guy, right? Like it’s not a not a dedicated GPU. There’s no GPU in it at all. And that’s the thing that Nvidia is known for is these big beefy GPUs, not CPUs. That’s Intel’s game, that’s AMD’s game. But they’ve been putting CPUs into their big graphics uh uh servers, right? The big AI servers as part of it. You can’t have a graphics server without having a CPU. Now they’re just selling the CPUs alone. And that’s basically to run certain AI workloads. Here’s the thing, Intel, AMD, they do that already.
02:00 Dan Howley
Intel, the leader in the space, they’ve been losing market share to AMD as of late. So that the question is, okay, what does then this mean for Intel, for AMD? What does it mean for Nvidia? And, you know, it’s it’s going to be a thorny question for Intel moving forward. They just had their earnings recently. Uh great earnings, bad outlook. They their capacity constrained. Part of the problem is they had to sell off some equipment.
02:30 Dan Howley
It comes at the absolute worst time possible for them because now they they have this huge demand for these CPUs, they can’t deliver on it. AMD’s over there, you know, licking their chops like, all right, we’ll we’ll get a hold of this. And then in comes Nvidia to say, hey, maybe we’ll play in this space. Let’s make a little room in the sandbox for us. We’d like to play too. And so that’s that’s kind of where we’re at right now. I mean, it it has been an interesting kind of pivot for Nvidia, but it’s it’s not something that
03:07 Dan Howley
we we didn’t suspect was coming.
03:10 Host
Let’s just nerd out for one quick minute because you touched on an important point. A lot of investors, Dan, I think they think AI equals GPUs. Why are CPUs so important?
03:26 Dan Howley
So, okay, so super high-level nerdification is you have the GPUs, they’re going to do the big training of these these algorithms, right? These these AI models rather. And so you need the parallel processing that comes with a GPU to do that. Now, you don’t necessarily need that when it comes to inferencing, which is just a dumb word for running an AI model. Everything has to have its own special word. So, basically running the AI model. Certain AI models, smaller versions can run on CPUs. And so
04:09 Dan Howley
a lot of companies are now saying, well, okay, maybe it’s more cost efficient to just go with the CPU, have that run it, maybe play, you know, traffic cop for some of the GPU data that’s going back and forth, and that would benefit us. And so that’s where we’re starting to see this, you know, it’s not just all or nothing with GPUs, it’s, oh, we can also get CPUs in here as well. It benefits Nvidia because, hey, now they’re full soup to nuts, right? They got the CPUs already, they got the GPUs already. They’re in networking like crazy. It’s one of their bigger business lines that, you know, people don’t really talk about. So they’re just saying, hey, here’s a a dump truck load of equipment, go and install.
04:54 Host
One- stop shop for the data center. One- stop shop. Switching gears, let’s talk about this because we we got some OpenAI news to talk about. Bloomberg reporting OpenAI Daniel, is close to finalizing the first phase of a new funding round likely to bring in, here it is, more than a hundred billion dollars. Overall valuation for Sam Altman’s company could exceed 850 billion. Numbers that are almost hard to get your head around. What do you make of it?
05:32 Dan Howley
I think it’s it’s obviously necessary to pay for their massive build out, right? I mean this is a company that is on the books for what, $1.4 trillion to just pay for all of the data centers that they’re doing, all of the GPUs that they’re buying, you know, everything I just talked about with Nvidia, they’re buying all that and then some, they’re buying it from AMD, they’re looking into building their own chips. It’s it’s one of those things where this is probably the best way for them to continue to move forward. The the folks that are uh supposedly investing in this, this is according to Bloomberg again, Amazon 50 billion, Softbank maybe uh 30 billion, Nvidia is getting in there. Interesting story that, you know, Nvidia back and forth, 100 billion, but then it’s like, well, it’s not really, you know, let’s not go nuts. What’s, you know, a few billion between friends. Uh you know, Microsoft obviously already in there. And so it’s one of those things where, you know, you’re you’re just waiting for this this company to eventually IPO and what what’s that going to look like?
06:40 Dan Howley
But also, when do you start making some some cashola, right? Because you guys are blowing money out the door, right? I mean, at what point do you start raking in enough to pay for what you’re actually doing?
07:00 Host
Now, who has the better model? You ask. How do we rank these things? Is it OpenAI? Is it Anthropic? Polymarket has thoughts, Dan. Anthropic has the better AI model. Interesting. I don’t know how we’re defining better, but what do you think of that?
07:23 Dan Howley
It’s it’s well maybe not after today, Google just announced a new version of their Gemini Pro. It look, it’s I mean, it’s these kind of rankings are like, you know, where where everybody’s going back and forth and every time something, something new comes out it’s like, well here’s the best thing ever, right? And here’s the best thing ever. Everything is just going to keep evolving over time. It’s like, well, okay, so my computer’s faster than yours. Like, well, your computer, you know, is brand new, mine’s, you know, from last month. It’s kind of the same idea, right? It’s like, cool, your your, you know, new car is is faster or gets better gas mileage than my, you know, like, I don’t know, 72 Oldsmobile. It’s like, well, yeah, time
08:22 Dan Howley
usually means that we’re going to get better and better models. It’s just going very fast with AI. So it it’s not one of those things where it’s going to be permanent. At some point, I mean, these are all going to be basically commoditized because it’s, you know, I’m going to grab this one, this one, this one, this one. Which can do it for me better for whatever purpose I need. Right now, Anthropic is leading because of coding. But, you know, I mean, it’s not like OpenAI is dumb. They’re going to, you know, come up with their own action as well. It’s just they’re more spread out because they have the consumer business, they have the the enterprise business. Anthropic’s saying, yeah, all right, well, consumers, you guys can try it, but we’re really focusing on the enterprise.
08:58 Host
Uh, Sam Altman did make some comments to CNBC. I thought these were interesting. Uh on the great AI race with China. Who’s in the lead? Fun topic. Sam saying the pace of technological advance in many fields over there, he says, including AI. He calls, it’s going amazingly fast over there. Now, did you believe that or did you think Sam was, I don’t know, was he sort of suggesting maybe, hey, it’s going so well over there, you don’t want to, you don’t want to handcuff me right now. You don’t want to bring out guard rails. Come on. I’m I’m I’m racing with big guys. What did you think? Or it could be both?
09:50 Dan Howley
I don’t know, what do you think? Also, maybe throw us some cash on the side. You know, he was talking about the uh how the the government there uh, you know, pays into these companies, helps helps them along. You know, I I think it’s it’s uh column A, column B, right? It’s that China’s models are advancing very quickly as well. The entire AI field is advancing very quickly. You know, if if you look at uh uh Jensen Wong’s last keynote at CES, he basically showed where these models are as well as far as open source and Chinese models doing very well in open source. Uh you know, the proprietary models in the US, they’re doing better than the Chinese models. But like it’s just like I just said, you know, there there’s the the Anthropic, the OpenAI, the X, the Google, they’re constantly changing. It’s the same thing with China. They continue to to level up as well. So it’s it’s they’re they’re advancing. Uh as long as the US keeps advancing then then that’s also good too.
11:03 Host
Finally, I think you know where I have to go with this one. Uh Sam Altman and Anthropic’s Dario Amodei on stage. I think we even have pictures of this. Prime Minister of India declining to clasp hands. Uh we have a picture of it. It really was as awkward, there it is. It was as awkward and uncomfortable as I’m describing it. I don’t even know what the issue was. I mean, is this competition can’t stand you? Is this almost like some type of intense debilitating hypochondria? I don’t I don’t know what’s going on. What is this?
12:00 Dan Howley
Sundar Pichai is standing right there, by the way, and no one has talked about this him in this picture at all. He’s literally right there. Um you know, I it’s it’s clear that the two don’t like each other. They take, you know, stabs at each other constantly online. Uh I mean, look, uh uh uh Dario has said how, you know, some companies, I won’t name them, but are just blowing money all over the place. And it’s like, yeah, that’s we know who you’re talking about.
12:35 Host
And and also, come on, that Super Bowl ad. I don’t think you could help but notice a certain resemblance to a certain opening. I mean that was that was a resemblance to Altman. Come on.
12:50 Dan Howley
It’s it’s also, you know, it’s interesting that when when uh Anthropic or or Amodei come out and say something along these lines like, you know, like take like a the fight to to OpenAI, Sam Altman will then get on X or Twitter and like start talking about it. And I mean this is first of all, the hand raising thing, weird in the in the first place, like, you know,
13:16 Host
But if you’re going to go for it. You gotta go all the way.
13:20 Dan Howley
Come on. It’s it looks they it’s a it’s the Streisand effect, right? It’s like, okay, it wouldn’t have been a big deal until you like you guys made it the big deal. It would have just been a a photo op and that’s it and now it’s
13:37 Host
Now there’s your headline. Now Howley and Lipton are talking about it. Thank you, sir.