Dylan Patel

And then they have like how much they allocate to search and generative search is not really necessarily competing with open AI.

It's the mega models.

So if you have this tremendous vision of what's going to happen with AI, you know that it takes a ton of compute to build them.

You know pretty much the amount of compute you could dedicate to these models is limitless, and they will get better.

Now it's a log-log scale, right?

I.e., you need 10x more compute to get to the next tier of performance.

You might think of it as diminishing returns, but what if the next tier of performance is like a 6-year-old versus a 16-year-old?

A 6-year-old, you can't get to do much, right?

And this is not exactly the way to think of AI, but this is the conundrum that OpenAI is in.

They have to race with the giants.

These giants are trillion-dollar businesses.

So how does OpenAI get there?

Well, it's partnering with Microsoft.

Well, that soured some, right?

It's partnering with Oracle.

Well, Oracle can do a lot, but Oracle doesn't even have a balance sheet like Google and Microsoft and Amazon and Meta.

Elon.

This is very much like the Pascalian wager nature of all of this with the tech giants.

Oracle can be part of it, but OpenAI needs allies.

They need people to effectively spend the capex ahead of the curve and trust that they'll be able to pay the rental income.