E143: Nvidia smashes earnings, Arm walks the plank, M&A market, Vivek dominates GOP debate & more

Within the next several years (by ~2026–2027), competitive entry in AI accelerators (custom chips from hyperscalers, Tesla Dojo, RISC‑V, etc.) will materially erode Nvidia’s profit margins and reduce its upside earnings growth relative to the levels implied by its 2023 results.

“so it probably just motivates them even more and accelerates the path where you see competition... and I think we're going to have to figure out when the market prices that in, because I think that that probably decays the Nvidia margin and upside over time.” View on YouTube

The extremely elevated level of GPU/AI-compute spending that is driving Nvidia’s 2023 results is not a long‑term steady state; total spend per application will be rationalized downward as companies discover the efficiency frontier, leading to lower growth in aggregate Nvidia compute demand within a few years (by ~2026).

“So I would I would envision Nvidia is probably writing, writing a little bit of a discovery of the efficient frontier wave right now, and that this probably is not necessarily steady state” View on YouTube

Nvidia’s AI‑GPU demand growth rates seen in 2023 will slow substantially going forward, but the long‑run steady‑state demand level for such chips will be at least as high as the 2023 level rather than falling below it.

“I think we can say that it can't continue at these growth rates, but probably there will be some steady state of demand that's you know, it probably is at least where we are today.” View on YouTube

Over the next 4–5 years (by roughly 2028), large tech companies’ AI platforms and models (e.g., Llama 2, Tesla Dojo/FSD, other foundational models) will be made available on an open‑source or quasi‑free basis, and this will enable the creation of hundreds of new startups, including at least one major breakout company built on top of these freely available AI tools.

“all of that stuff will be given away essentially, I think open source, quasi free to the ecosystem over the next few years. And I think that will be a really important moment, which will create hundreds of new companies doing really clever and cool things. So we haven't yet seen the big breakout company yet. And so I think that right now most of this CapEx is going to the big guys. But the dividends of all the work that these big guys are doing will be seen over the next few years in the startups that get started in the next 4 or 5 years.” View on YouTube

In the coming years (by around 2028), most major AI models and platforms will be open‑sourced or have open equivalents, and this trend will extend to AI hardware, with open reference designs for AI servers/chip systems becoming widely available and used, analogous to Facebook’s Open Compute in Web2.

“I think it makes logical sense that you can expect the same things to happen in the AI world. The AI models and the AI platforms and all of that stuff will first get open source because it's a data integrity security issue, and then the hardware will get an open source as well, because you just want simple reference designs you can use and plug and play.” View on YouTube

Arm’s intrinsic public‑market equity value, once it trades in a normal post‑IPO environment (e.g., after initial lockups and hype have cleared), will settle around $15–20 billion, substantially below the $60–70 billion valuation SoftBank is targeting for the IPO.

“Trying to stretch to a 60 or 70 billion dollar print, I think is really tough. This is a honestly a 15 to 20 billion dollar company.” View on YouTube

A Starlink IPO, if it occurs in roughly the next year or so after this August 2023 discussion (by end of 2024), would be the single offering capable of broadly re‑opening and catalyzing the U.S. tech IPO market, bringing many investors “off the sidelines.”

“I made this prediction earlier. But I think the only company that can really catalyze things would be if people are ready to do Starlink. I mean, it's the most obvious, natural, logical thing that would just get everybody excited and off the sidelines and into the arena. But that may take another year, may not, but it may.” View on YouTube

Over the weeks following the first GOP debate in August 2023 and into fall 2023, Vivek Ramaswamy will build significant momentum among Republican voters, particularly Trump loyalists, by positioning himself as offering Trump-like policies without Trump's baggage.

“I'm fascinated to see what the Republican Reaction over the next few weeks will be to Vivek...If he is able to thread that needle, which is what I think his effective strategy has been. He could really build momentum going into the fall.” View on YouTube

Following the first GOP primary debate in August 2023, Vivek Ramaswamy will experience the largest positive bounce in support (e.g., in polls/attention) of any candidate on that stage in the immediate post‑debate period.

“He's going to have the biggest bounce out of the debate.” View on YouTube

If Donald Trump is forced out of the 2024 presidential race (e.g., by legal trouble or collapse in support), Vivek Ramaswamy will become the frontrunner for the Republican nomination by inheriting most of Trump’s base.

“And then the bet is that there's some chance, not 100%, but some chance that Trump doesn't make it all the way. He ends up in jail, or people start to turn on him, and then he's the frontrunner because he's basically captivated that audience with the same message.” View on YouTube

By the later stages of the 2024 Republican primary (when only three or four candidates remain meaningfully competitive), the non-Trump field will consist of Ron DeSantis, Vivek Ramaswamy, and either Tim Scott or Nikki Haley.

“I think it'll be DeSantis, Vivek, and it'll be either Tim Scott or Nikki Haley.” View on YouTube

In the struggle among GOP factions for control of the party going into the 2024 election (neocon, religious right, MAGA), the MAGA faction will ultimately prevail and produce the Republican presidential nominee.

“But I think it's probably going to be the MAGA faction.” View on YouTube

Donald Trump will likely skip all GOP primary debates for the 2024 cycle yet still secure the Republican nomination ("get elected" in the primary) while maintaining a large polling lead.

“I don't know if he's going to show up. I don't know why he would if he's up 50, 60, 70% in the polls. I mean, it would be it would just be such a Trump move to just not show up to any of these debates and just like, get elected.” View on YouTube

Vivek Ramaswamy has a strong chance to win, and may in fact win, the Republican presidential nomination for the 2024 election.

“I think that Vivek has a really good chance of winning this Republican nomination. That's what I saw. I saw... No no no no. I really do think he's he can win this thing.” View on YouTube

Absent Vivek Ramaswamy successfully overtaking Donald Trump within the GOP electorate, Donald Trump will win the 2024 Republican presidential nomination.

“If Vivek doesn't figure out a way to slipstream past Trump, that Trump will win the nomination.” View on YouTube

Western efforts to achieve regime change in Russia—i.e., to remove Vladimir Putin from power via external pressure or support for internal opposition—will not succeed during the current Russia–Ukraine war; Putin will remain in power and the Russian regime will stay stable, requiring other countries to negotiate/deal with him rather than expecting his ouster.

“The Russian regime, whether you like it or not, is stable. It is not unstable. Russia is winning the war. And you may hate Putin, but he is still a master of Russia and eventually we're going to have to deal with him. These fantasies that we're going to be able to regime change him, I think are absurd.” View on YouTube