Richard Li

🆕 SF Compute: Commoditizing Compute latent.space/p/sfcompute We're excited for our latest deep dive into the compute market with @evanjconrad of @sfcompute! It should not be normal for the prices of one of the world’s most important resources right now to swing from $8 to $1 per hour (as @picocreator observed) based on drastically inelastic demand AND supply curves - from 3 year lock-in contracts to stupendously competitive over-ordering dynamics for NVIDIA allocations — especially with increasing baseline compute needed for even the simplest academic ML research and for new AI startups getting off the ground. The entire point of SFC is creating liquidity between GPU owners and consumers and making it broadly tradable, even programmable. As we explore, these are the primitives that you can then use to create your own, high quality, custom GPU availability for your time and money budget, similar to how Amazon Spot Instances automated the selective buying of unused compute. The ultimate end state of where all this is going is GPU that trade like other perishable, staple commodities of the world - oil, soybeans, milk. Because the contracts and markets are so well established, the price swings also are not nearly as drastic, and people can also start hedging and managing the risk of one of the biggest costs of their business, just like we have risk-managed commodities risks of all other sorts for centuries. As a former derivatives trader, you can bet that swyx doubleclicked on that… Also to end off, we of course had to ask about how on earth SFCompute manages to have such immaculate vibes.... Timestamps [00:00:05] Introductions [00:00:12] Introduction of guest Evan Conrad from SF Compute [00:00:12] CoreWeave Business Model Discussion [00:05:37] CoreWeave as a Real Estate Business [00:08:59] Interest Rate Risk and GPU Market Strategy Framework [00:16:33] Why Together and DigitalOcean will lose money on their clusters [00:20:37] SF Compute's AI Lab Origins [00:25:49] Utilization Rates and Benefits of SF Compute Market Model [00:30:00] H100 GPU Glut, Supply Chain Issues, and Future Demand Forecast [00:34:00] P2P GPU networks [00:36:50] Customer stories [00:38:23] VC-Provided GPU Clusters and Credit Risk Arbitrage [00:41:58] Market Pricing Dynamics and Preemptible GPU Pricing Model [00:48:00] Future Plans for Financialization? [00:52:59] Cluster auditing and quality control [00:58:00] Futures Contracts for GPUs [01:01:20] Branding and Aesthetic Choices Behind SF Compute [01:06:30] Lessons from Previous Startups [01:09:07] Hiring at SF Compute