"Today, I'm chatting with Dylan Patel, who  runs SemiAnalysis, and Jon, who runs the   Asianometry YouTube channel. Does he have a last name?   No, I do not. No, just kidding. Jon Y. Why is it only on..."

"Alright here’s my first question. If you're  Xi Jinping and you're scaling-pilled,   what is it that you do? Don't answer that question,   Jon, that's bad for AI safety. I would basically be contactin..."

"Why doesn't that drive up their wages? It's because it's very compartmentalized.   Back in the 2000s, before SMIC got big, it was  actually much more open and more flat. After that,   after Liang Mo..."

"Very rapid. That guy's a genius. That guy's  a genius. I don't even know what to say   about him. He's like 78 and he's beyond  brilliant. He does not care about people.  What does research to make th..."

"How do they get the 10 gigawatts data  center up? What else do they need?   There is a true question of how decentralized  do you go versus centralized. In the US,   as far as labs and such, you have..."

"centers ready. China could just build it in six  months, I think, around the Three Gorges Dam or   many other places. They have the ability to do  the substations. They have the power generation   cap..."

"extremely energy intensive refining and rare earth  refining and all these manufacturing industries   here. It would be very easy to hide it. It would be very easy to just shut down like…   I think ..."

"Jon, Dylan seems to think the export controls  are kind of a failure. Do you agree with him?   That is a very interesting question  because I think it's like…   Why thank you. Dwarkesh, you're so ..."

"then all of the sudden you aggregate  all the flops. There's no fucking way.   China can be centralized enough to compete  with each individual US lab. They could   have just as many flops in 2025 a..."

"they could have a bigger model than any of  the labs next year. I have no clue where all   the Ascend 910Bs are going, but there are rumors  about them being divvied up between the majors,   Alibaba, ..."

"want to do with these semiconductors. There's two parts there. The way the   US has sanctioned SMIC is really stupid. They've  sanctioned a specific spot rather than the entire   company. SMIC is stil..."

"Why do they have bad yield? Because it's hard.   Even if everyone knows the number, like say  there’s a 1000 steps. Even if you're 98-99% for   each, in the end you'll still get a 40% yield. If it's ..."

"the US, but when you flip to like… Sorry, I  don't fucking know what I was going to say. Nailed it! We're keeping this in That's fine, that's fine. Hey everybody. I'm super excited to introduce   our ..."

"And now back to Dylan and Jon, 2026 if they're centralized, they can   have as big training runs as any one US company… Oh, the reason why I was bringing up Shanghai.   They're building 7nm capacity i..."

"Do you think the dominance of Huawei is actually  bad for the rest of the Chinese tech industry? Huawei is so cracked that it's hard  to say that. Huawei out-competes   Western firms regularly with tw..."

"The military, because it's the PLA. It's generally seen as an arm  of the PLA. How do you square   that with the fact that sometimes  the PLA seems to mess stuff up?   Oh, like filling water in rocke..."

"That’s also the flip side. How much false  propaganda is there? There's a lot of,   "SMIC could never, they don't have the  best tools." Then it's like, “Motherfucker,   they just shipped 60 million p..."

"Another thing I'm curious about  is where that culture comes from,   but also how it stays there. With  American firms or any other firm,   you can have a company that's very good, but  over time it g..."

"“By the evil western pigs.” “Capitalist…” Or not capitalist, they don't  say that anymore. It's more like, “Everyone   is against China. China is being defiled. That  is all on you, bro. If you can’t ..."

"that’s better.” That's the beginning of what  we call the semiconductor equipment industry. In the seventies, everyone  made their own equipment. Sixties and seventies. All these people spin off.  Wha..."

"A bunch in Japan. A bunch in Japan. They all did this   thing. When going to leading-edge, it got harder,  which means you had to aggregate more demand   from all the customers to fund the next node. ..."

"What’s the point? Why is  2 nanometer not justified? I'm not saying it for N2 specifically, but N2 as  a concept. The next node should technically...   There will come a point where economically,  the..."

"2nm just for one player, TSMC? Ignore Intel,  ignore Samsung. Samsung is paying for it with   memory, not with their actual profit. Intel is  paying for it from their former CPU monopoly… Private equi..."

"I want to ask a normie question…  I won’t phrase it that way. Not for you nerds. I think Jon and I could communicate  to the point where you even wouldn't   know what we're talking about. Suppose Ta..."

"Cars are like 40% chips now.  There are chips in the tires. There's like 2,000+ chips in every car. Every  Tesla door handle has like four chips in it.   It’s like, “What the fuck?” Why? It’s like shi..."

"no automobiles, no weed whackers, because that  stuff has chips. My toothbrush has Bluetooth in   it. Why? I don’t know. There are so many things  that would just go poof. We'd have a tech reset. We w..."

"possible. ArXiv is a free thing. The paper  publishing industry is abhorrent everywhere   else. You can't just download IEEE papers  or SPIE papers or from other organizations.  At least up until late..."

"around something. Early on, we used to have  SEMATECH where American companies came together   and talked and hammered it out. But in reality  it was dominated by a single company. Nowadays   it's mor..."

"Most of the equipment in semiconductor fabs  runs on Windows XP. Each tool has a Windows   XP server on it. All the chip design tools have  CentOS version 6, which is old as hell. There are   so many ..."

"It's important to state that semiconductor  manufacturing and design is the largest search   space of any problem that humans do because  it is the most complicated industry that   humans do. When you..."

"Over what time period? The question is how much can we advance the  architecture. The other challenge is that   the number of people designing chips has not  necessarily grown in a long time. Company ..."

"There are a few vectors to go here. One you  mention is important to note. Hardware has a   huge influence on the model architecture that's  optimal. It's not a one-way street that better   chip equal..."

"investing hugely in. You go to conferences  and there are like 20 papers from Chinese   companies/universities about compute and memory. Because the FLOP limitation is here,   maybe NVIDIA pumps up th..."

"You have this divergence in tech tree and people  can start to design different architectures within   the constraints they're given. Everyone has  constraints, but the constraints different   compani..."

"Jon and Dylan have talked a lot in this  episode about how stupefyingly complex   the global semiconductor supply chain is. The only thing in the world that approaches   this level of complexity is th..."

"Anyways, you can head to Stripe.com to learn more. If you were made head of compute of a new AI lab,   if Ilya Sutskever’s new lab SSI  came to you and they're like,   "Dylan, we give you $1 billion. ..."

"Yes, you're going to make compute efficiency wins,  but with a billion dollars you probably just want   the biggest cluster in one individual spot. Small  amounts of GPUs are probably not possible to ..."

"Right. Anyway, if you were head of compute at SSI… Okay, I’m head of compute at SSI. There's   obviously no free data center lunch, in terms of  what we see in the data. There’s no free lunch if   you..."

"Now it makes the most sense to build your own  cluster instead of renting, or get a very close   relationship like OpenAI/Microsoft with CoreWeave  or Oracle/Crusoe The next step is Bitcoin. OpenAI   ..."

"but it's you have 14 mobile generators and  you're just burning natural gas on site on   these mobile generators that sit on trucks.  Then you have power directly two miles down   the road. There's no..."

"It's the ability to generate new power for these  activities. That’s why it's really difficult,   the economic regulation around that. But the real thing is if you look at   the cost of ownership of a..."

"the ability to get the power. I don't  want to turn it off eight hours a day. Let’s zoom out a bit. Let's discuss what would  maybe happen if the training regime changes and   if it doesn't change. Yo..."

"Are people bidding for that power? I think people just don't think they  can build a data center in Ethiopia. Why not? I don't think the dam is filled yet, is it? No, the dam could generate that power..."

"Middle East, and the rest of the world. Let’s  go back to your point. You have synthetic data.   You have the search stuff. You have all these  post-training techniques. You have all these   ways to s..."

"Microsoft/OpenAItheir partners for them.  It’s potentially even more. 500K GB200s   is like a gigawatt and that's online next year. The year after that, if you aggregate all the   data center sites, a..."

"Let's just give the number to like,  “Okay, it’s 2025 and Elon's cluster   is going to be the biggest…”  It doesn’t matter who it is. There's the definition game. Elon  claims he has the largest clust..."

"No. Sam has a superpower. It's recruiting and  raising money. That's what he's like a god at. Will chips themselves be a  bottleneck to the scaling? Not in the near term. It's more about  concentratio..."

"Wow. Okay you’re saying 1e30 you  said by 2028-29. That is literally   six orders of magnitude. That's like  100,000x more compute than GPT-4. Yes. The other thing to say is the way you count  flops o..."

"Given the fabs that are currently  planned and being built,   is that enough for the 1e30, or will we need more? I think so, yeah. Okay, so then the chip goal doesn't make any   sense.The chip goal st..."

"Who will need to see? Investors or companies? More so, TSMC needs to see NVIDIA volumes continue  to grow straight up and Google's volumes continue   to grow straight up, and so on down the list.  Chi..."

"that people can innovate when given the need to.  It's one thing if it's a shitty industry where my   margins are low and we're not growing really. All  of a sudden it’s like, "Oh, this is the sexiest..."

"This is intense. It's very intense. Jon, actually, if he's right, or not him, but  in general. If the capabilities are there,   the revenue is there… Revenue doesn't matter. Revenue matters. Is ther..."

"On AI in particular? No, just generally as a company. Now,  obviously there's other factors here.   Like what is Meta's ad efficiency?  How much of that is AI, right? That’s super messy. But here's th..."

"need the revenue in 2025-2026 to support  the $10 billion that OpenAI spent in '23,   or Microsoft spent in 2023 and early 2024 to build  the cluster, which model they trained in mid 2024,   which the..."

"What kind of socks are you  wearing, bro? Show them. AWS. GPT-5 is not here. GPT-5 is late. We don't know. I don't think it's late. I think it's late. Okay. I want to zoom out and go back  to the end ..."

"to radically get reshaped for many people.  Every time you increment up the intelligence,   the amount of usage of it grows hugely.  Every time you increment the cost down   of that amount of intellig..."

"How many billions of dollars a  year is this bubble right now? For private capital? It's like $55-60 billion so   far for this year. It can go much  higher. I think it will next year. Let me think abo..."

"At the turn of the 1990s, there  was an immense amount of money   invested in things like MEMS and optical  technologies because everyone expected   the fiber bubble to continue.  That all ended in 20..."

"where it is happening. What is that Warren Buffett  quote? I don't even know if it's Warren Buffett. You don’t know who's swimming  naked until the tide goes out? No, no, no. The one about how the  ma..."

"I want to hear the story of how both of you  started your businesses, the thing you're   doing now. Jon, how did it begin? What were  you doing when you started the YouTube channel? It’s all about you..."

"What year did people start  watching your videos? Let's   say like a thousand views per video or something? Oh my gosh, I started the channel in  2017 and it wasn't until 2018 or 2019   that it actual..."

"should know this but in the end, I just try  my best to bring interesting stories out. How do you make a video every  single week? These are like… Two a week? You know how long he had a full-time job?..."

"It’s all over the world and across many ranges of…  You have ex-hedge funds as well. You kind of have   this amalgamation of tech and finance expertise.  We just do the best work there, I think. Are y..."

"do. How it got there to where it is, is just like,  “Just try and do the best and try to be the best.” If you were an entrepreneur who's like, “I  want to get involved in the hardware chain   somewher..."

"If you have a passion for copper wires… I promise  to God, if you make the best copper wires,   you'll make a shitload of money. If you have  a passion for B2B SaaS, I promise to God,   you'll make fu..."