Bg2 Pod

Elon Musk just said the AI community is misunderstanding the math of superintelligence by two orders of magnitude. Not slightly off. Not directionally wrong. A hundred times off. Musk: “Most people in the AI community don’t yet understand. The intelligence density potential is vastly greater than what we’re currently experiencing.” Everyone is focused on the hardware race. Bigger data centers. More GPUs. Nuclear power plants built to feed the compute. That’s half the equation. Musk: “I think we’re off by two orders of magnitude in terms of intelligence density per gigabyte. That’s just algorithmic improvement. Same computer.” Read that carefully. Not more hardware. Not more energy. Not more capital. The same machine. A hundred times smarter. Through software alone. That’s before the hardware improvements compound on top of it. Musk: “And the computers are getting better. That’s why I think it is a 10x improvement per year type thing. 1,000 percent.” A thousand percent compounding annual growth rate in raw intelligence. A system that becomes 10x more capable every twelve months doesn’t follow a linear curve. It doesn’t follow an exponential curve that human intuition can track. It follows a curve that human intuition cannot simulate at all. In year one it’s 10x smarter. In year two it’s 100x. In year three it’s 1,000x. At that point, the gap between that system and a human brain is wider than the gap between a human brain and a calculator. This is the math the public isn’t running. The models aren’t just getting better. They are compounding on themselves at a rate that makes every previous technology curve look flat. Musk: “The intelligence density potential is vastly greater than what we’re currently experiencing.” We aren’t approaching superintelligence on the timeline most people imagine. We are already inside the curve.

Brad Gerstner goes on Fox Business and basically says we are at the front end of a monster AI supercycle, bigger than the internet, but nobody can see clearly through the fog yet. Markets are repricing everything in real time, discount rates shift, terminal values reset, and software multiples get questioned, which is exactly why you are seeing drawdowns across $IGV and names like $SNOW, $NOW, $MDB, even $CRM and $WDAY where AI spend is high but near term ROI is still being debated. Translation, this is what early innings of a regime change look like. Volatility is not a bug, it is the feature.

Kids don’t care about your politics. Jumpstart their futures. We are all on Team America. 🇺🇸🇺🇸

Jensen Huang: the AI infrastructure buildout is the largest in human history, a once-in-a-generation event. It's going to take us some 7,8 years. No body is ready for 7,8 years, many people said capex cant go up after 2024, then 2025, then 2026 etc.

Jensen Huang pushes back on common misconceptions about China's tech capabilities, arguing the West is dangerously underestimating its competitor. He challenges three narratives he's heard: "They could never build AI chips. China can't manufacture. If there's one thing they could do is manufacture. And they're years behind us? Come on. They're nanoseconds behind us." Jensen explains why China is such a formidable competitor, starting with talent and work ethic: "Don't forget that China has some of the best entrepreneurs in the world because they came from some of the best STEM schools in the world. They're the most hungry in the world." He references the infamous "996" culture (9am to 9pm, 6 days a week) and notes that China is producing the most AI engineers in the world. Beyond talent, Jensen highlights a structural advantage most people overlook: "They are very lightly regulated, right? Less regulated, ironically, than we are in a capitalist system." He pushes back on the assumption that central governance means top-down control: "The genius of China was distributed economic systems. All of these 33 provinces and all the mayors… has driven enormous amount of internal competition, internal economic vibrancy." The result, Jensen argues, is a country that is "creative, hungry, fast-moving, underregulated." Looking ahead, Jensen says he takes China's stated goal of being an open market at face value: "What's in the best interest of China is for foreign companies to invest in China, compete in China… and they would also like to come out of China and participate around the world." For Jensen, the American tech industry is a national treasure, and the answer is simple: "Why would we not allow this industry to go compete for its survival?"

Watch Nadella describe SaaS apps as nothing more than a CRUD database with some business logic, but once the business logic moves to AI agents, SaaS is over:

Nvidia’s Jensen Huang says the AI infrastructure buildout will continue to grow exponentially for the next 7–8 years before reaching a level that will need to be sustained. Amazon, Meta, Google, and Microsoft are expected to spend around ~$700B in capex in 2026, up ~60% vs 2025. Growth rates like this are likely to persist for several more years.

Software/SaaS stocks fall despite stable/rising revenue. e.g. Salesforce free-cash-flow multiple ~30x→~15x. Because, investors price much higher future uncertainty; AI makes software's long-term (15+ years) cash flow visibility so much less certain

Every child. Forevermore. A direct shareholder in America. 🇺🇸🤍🇺🇸