Samsung’s $70B Chip Bet, Apple Doing Nothing But Winning AI, Bezos’ New Fund | Diet TBPN

Last time we had Mark Cuban on the show we were debating ads in LLM's and since then we've gotten a bunch of data points about ads in LLM's

and I think that some of his takes have probably aged well some of our takes have probably aged well it will be an interesting time to re-evaluate what's actually happening

There are a lot more points. I don't know John. I said that ads would be fine. Well, and now the world is ending

Yes, here's a white pill. Samsung is investing $70 billion to advance their fab capacity. They're getting back in the AI chips game

They've always been in the AI chips game. So brief history of Samsung you probably know them from the phones from the TVs

They of course are a major player in HBM high bandwidth memory. They are a massive company over a quarter million employees

They're close to touching a trillion dollars in USD market cap. They pull in around 200 billion USD a year in revenue

Maybe 250 billion this year in revenue. Really good. All that's USD. I like to think in USD because I'm an American

They're the global leaders in memory and OLED displays as well

So a lot of the displays that you see in other electronics even it has a different brand name. It's still Samsung actually making that OLED display

But they're second in smartphones to the iPhone and Apple and they're second in the semiconductor Foundry business to TSMC

Semiconductor is still make up 30 to 40% of their business and they supply HBM to Nvidia for the H100 and Blackwell system

So it's not like they're sitting out the AI bull market. They are doing great. They are definitely participating. They're incredibly important in the AI build out

TSMC is bottlenecked and TSMC is sort of a risk off and they're not going to be guiding to like insane CapEx numbers while every American hyperscaler is

Well, that creates an opportunity for Samsung and so Samsung is stepping up and they're announcing that hey

We're going to put another 70 billion to work on this particular business

So Tesla has been working with Samsung on the Foundry side in AI for a while

So Samsung's never really been on the frontier with a direct competitor to the H100 or the Blackwell chip

That's been more of like AMD's game and AMD also fads at TSMC

So there hasn't really been this like neck and neck battle between TSMC and Samsung

But it's like you can do AI inference on a Samsung chip and we know that because

Tesla went to Samsung years ago and said we need a chip that can take in pictures from the road

Decide where the lines are said decide they want their chips at the dip they want their chips with the dip and that's all I'm saying

And so the FSD system if you have a Tesla you might be familiar with like HW3 hardware 3

That has been deployed into millions of cars and it was fabed on Samsung's 14 nanometer process

Which is a lagging node it were not in the three nanometer the crazy frontier stuff

But it's working and it's on the road and according to a US regulatory probe there were 3.2 million vehicles

Tesla's on the road in America with FSD systems that were basically all running Samsung chips inside

Now to be clear Tesla just like any foundation model lab company they have training and then they also have inference

They're a little bit different than many of the labs that you know and love because

They do training in a data center using what's called the dojo chip and that is fabed at TSMC

So they train the system they take all the data in from every Tesla camera every road all the information that they have

Every time that there's a disengagement that's feedback to the reinforcement learning system

It says hey we were in FSD mode but then someone grabbed the wheel or someone stepped on the brakes

You made a mistake understand what happened to get you to that point where you made that mistake

And so that all that data gets collected in a Tesla data center runs on these dojo chips

They do the training and then they deploy the model onto the Samsung chips in the actual cars

So with the backdrop of NVIDIA's massive GTC news cycle they've done so much press around GTC

And so many different launches you know that NVIDIA is just going to suck a lot of the air out of the semiconductor discussion

This we know the clean room out of the clean room. Yes, which is recycling all of the air every three seconds or something like that

Yeah, but I think this is like particularly important especially this morning the I guess the CCP put something out in the last 24 hours

Basically saying hey Taiwan it's going to have an energy crisis due to the broader global energy crisis

So we need to reunify and there's an opportunity for peaceful reunification

But peaceful reunification even it was completely peaceful and all the Taiwanese people just say hey we want to be part of China

And they all vote for it democratically that's going to be rough for the American ship buying industry

And so having another chip on the board metaphorically to make physical chips is probably a good thing

So yeah, Samsung's been doing well over the last five days stocks up 11% during time when the NASDAQ is down 2.2%

And geopolitical tensions continue to rise the compute bottleneck we know it's important we've been discussing this constantly

And it's going to be very constraining over the next few years so every increase in CapEx and the supply chain

It is a step in the right direction. And so Samsung gets the first gong hit up

Congratulations, Doug, we're over at the Samsung making making a big bet

Cursor is out the composer to composer to it is frontier level at coding

At 50 cents per million input tokens in two and a half dollars per million output tokens

It's also they have a fast version they say we're able to significantly improve the model quality and cost to serve

These quality improvements come from our first continued pre-training around providing a far stronger base to scale our RL

It's not one of these graphs that's just like oh look we made some arbitrary X and Y axes

And like we're in the top right corner of course because the axes are like good and cool

We're the only one on tbpn

Tbpn bench

Yes

Technology podcasts

Yes

Publish at least three hours of content every week

Yes

Natalie

Exactly

We are the right of the top

Right at the top

And it's actually there's no one else on there

Yes

But yeah I mean this seems fair it is a little bit odd to read this because the cost

It cost is on the X axis and it's inverted so the further you are to the right the cheaper you are

Which makes sense because people

Associated an X and Y graph with you want to be in the top right quadrant and they certainly are

And it does seem like in terms of this parade of frontier

You want to be on the frontier you want to be pushing out across every single curve

Maybe if you are interested in

Sparing no expense you'll go with the gpt 5.4 high or medium model and you can you know align cursor to to gpt

I'm sort of surprised that opus is not doing as well on cursor bench

That feels

Surprising based on like the general vibes around around opus

4.6 generally but cursor has specific needs for specific customers and

I don't know what else do you think is going on here

Yeah, I mean the cost is really big like this is basically like 10x cheaper than opus

So I think also cursor has kind of been like not really a dark horse like everyone knows about it

But in the coding race it's like everyone's like okay there's codex first cloud code

Yeah if you imagine that cloud code and codex are kind of like these

Environments for getting a ton of like really good data for training coding models

Like cursor has had that for way way longer than open-air anthropic

Yeah

So you should imagine that like at least you know in the near term like they actually have like really good data

Yeah, that they can you know train these these good models on it and obviously like this is a very

Specific model this they've said it like you're not going to write poems with this model

It's this very like specific almost like point solution model where it's don't listen to them Tyler

Write a poem with the model poem bench poem bench

Yeah, I would be interested to know like how many sacrifices were made

Because it's at a certain point like I remember talking to

An AI researcher actually a semiconductor

Who was saying that like he actually thinks he actually does believe that importing like the Odyssey

And like Homeric epics is key to humanoid robots learning to walk

Yeah, well I think like if you look back at just like the general history of like machine learning AI

Like the lesson is that like big general models always be the small specific models

Yes, but if you kind of zoom in on the timescale like you can still train

GLM some open source model on a very specific task like accounting or something

And you can like ill climb and you can actually make it better than the frontier models right now

At that specific thing

And especially at cost especially at cost

Yeah, yes, very much so but like on the long term if you zoom out what actually once here it seems like it's basically always going to be these big

Yeah, you know general models but I wonder I wonder if that's true

I mean we talk about this a lot where the big general model outperformed the smaller model

But at the limit like if you were to think about like a Python if statement

Just like flow control that is truly deterministic

If you if you pipe the same question of like the if statement like is this number bigger than this number

You pipe that into 5.4 it's going to get it right all the time

It's going to be very expensive compared to an if statement which takes like no no compute whatsoever

But the if statement is 100% accurate

Legendary posters send call says all SHITS and giggles on that headline till anthropic or opening

I decide to cut off their access to cursor referencing the Bloomberg article

Cursor is taking on inthropic and opening I with a new AI coding model

Would would that matter like at this point if they have if they have composer 2

And it's a small model but it's good at writing code and it performs well in cursor bench

And the cursor users are satisfied with the composer 2 model

And they do cursor does get their access cut off

And when you install cursor you roll it out to your organization you just get composer 2

And you know what it's it's you know maybe there's taste that wouldn't pull you forward

Yeah we're just saying at this point right now

I don't think we have any visibility into like how much of cursor's revenue right now is tied to using opening

Ironthropic models George says I'm hearing tons complaints from cursor customers at enterprise companies a silent change but almost all models cursor uses behind max mode

Devs he used to manage to spread out monthly credits over a month see all of it used up in one to two days

Oh interesting are furious and switch it does feel like there's a little bit of like an economic war here

Yeah and this is what came up earlier this month around the lab sort of subsidizing

Yeah you know who's they're not they're not in an easy position but they're such a talented team

Yeah so it says we're rolling out summaries for articles now just tap the summarize button if you want to know if it's worth your time to read it

Yes and yeah it's basically rock turn this into a regular tweet

I am excited about the listen button I've had this I you know on my commute

Yeah there's so many moments where I'm like I wish I could just somebody read this article

Yeah I actually wound up doing this with a number of will minitis long form essays

I would copy them put them into 11 reader from 11 labs and have it read it to me in sort of a silly voice

A silly voice it was a good time well I was trying I was actually trying to use

But it was actually in I was trying to use groc in the x app to just take an article

Paced it into groc and say hey can you read this to me yeah it said cannot find the post

This is this is a response to you know every article people would post people would always say groc summarize this

And now there's just a button I recently learned that you can only ask groc like at groc is this true

You can only do that if you're paying for x sort of underrated how well x has seemingly I don't know how big the subscriber basis

But that was a crazy idea to have a paid social network

I think it's because people are people are deeply addicted to x

Yeah

It is very valuable to them to be on there to participate

Yeah

And the paid functionality the way that it was marketed and the way that it generally worked was like

You were going to have a bad time on x like if x was valuable to you and you didn't pay the $10 a month

It was going to be like significantly less valuable to you probably you know you might you might

You might depending on what kind of business you're running or what you use x4 it might be the equivalent of like losing thousands of dollars a month of value

Or you could just pay the $10 so it was a good trade

Yeah

But it was also just it was weird how the targeting never seemingly got dialed to the point where you could actually target the CEOs of companies who were on x

Like I mean you see Travis Kalanick on x like we're applying to things it's like he's raising money he's growing a business

Like there's a lot of value in advertising to him because he's going to be picking a corporate card soon

Or he probably already has or it might be in that market you might be picking up payroll sweet

Like there's all these things where if you could deliver that to that audience it would be incredibly valuable

And the cpm should be like through the roof but I think for privacy reasons and for a variety of other reasons and sort of like

Like really monetizing that long tail has been very difficult across every platform

So they've just gone with scale and the products that have sold the most on social networks have been very broadly marketed

The criticism that we saw from the Oscars is always like YouTube ads are generic

It's just like for a pillow or like injury or like something that applies to every single person

But there's always this like hyper targeted opportunity there

Yeah the other thing is is the paid program with x has seemingly worked

That we know a lot of people that happily pay and have no plans to turn

But it would be a failure in the context of like meta scale

I think the last reported number that I saw was something like one to one and a half million paid subs at $10 a month

Oh on x?

Yeah so you're talking about somewhere in the range of 100 to 200 million of like ARR

If Zuck had launched a product like that he would just wind it down

Right, like reels went from zero to 50 billion of run rate in like a handful of years

That's what a home run looks like

And so I think it makes sense for x but it certainly is not a home run from a consumer application standpoint

And they still need the overall business

Olivia Moore said a big story that most people are missing in the AI race for the consumer

Chat GPT versus Claude is ads right now

Most consumer AI revenue is coming from power users who are willing to pay high subscription costs

This currently skews positive for products like Claude but this will not be the end state

Google makes $460 per user per year in the United States mostly on ads

I didn't know that their ARPU was so high meta makes around 250

I mean I guess those Google ads are really really valuable

And it's so intent driven that it makes sense

Chat GPT's ad based ARPUs will be even higher as they will ultimately have deeper, more frequent user engagement

Even at the $460 level monetizing everyone in the US via ads is 152 billion in annual revenue by contrast

If you're able to monetize even 5% of the population at $200 a month subscription which is a stretch that's only $40 billion

That's actually a crazy difference because $200 a month subscription is like super high

Like talking 20 times like Netflix or something else that's premium and like really important

Yeah the $200 subscription at the time was crazy

But even at that point some of the people that were more AI-pilled generally

We're like oh it's actually possible that someday you could spend $20,000 a month

I was like give me the $20,000 monthly so she says I suspect this will be even more drastic outside of the United States

Where user even less willing to pay or directly pay for subscriptions

And the earliest data from a very small rollout shows chat GP ads are already outperforming meta in effectiveness

Just gets better over time so interesting this is an interesting story

This is an interesting story Apple is way behind an AI and still making a fortune from it

Let's see

Thanks the question are they actually behind

It might not

The AI revenue is set to top 1 billion this year reassuring investors wary of rivals sky-high spending

And keep in mind this is a part here showing gross revenue from Gen AI apps as well as Apple's commission

So look at this the beginning of 2025 was really the boom of Gen AI app growth 400 million is this is this monthly app store revenue

Wow they're really cooking and then sort of a flat line

Yeah so and so interesting that that it actually drops back

Well we did read that article a few days ago about how Apple has been pushing back against some of the vibe coding apps

And there's this question about you know where are the bounds obviously apples had pretty strict app store rules around adult content

And you know what else you can do even just the app reconstituting itself pushing changes because they want to review every line of code that goes into the app store

If someone's pushing 10 20 30 thousand lines of code a day that's a lot of code for Apple to review going to slow things down

That could be a little bit of what what we're seeing maybe they've capped out on their ability to review all the vibe coded apps that are flooding the app store

Apple's on pace to surpass 1 billion in AI revenue this year a tidy sum that demonstrates the company's AI advantage even as it struggles to deliver an AI strategy of its own

Siri chatbot is still weak by modern AI standards

What Apple does have that the other AI players don't is a dominant position making devices however

Fancy open AI Google and thropic an x app make their chatbots iPhones are still a primary way to deliver them to customers

That means they typically pay the app store tax roughly 30% of subscription fees in the first year and 15% a year thereafter though rates very

Genai apps paid Apple nearly 900 million dollar an app store fees in 2025 almost a billion of revenue and very very very little capex

Three fourths of the revenue Apple rakes in from Genai apps and it's apps where come from chatgbt

Oh, next to about 5% is xh as grok

There we go grok

I mean there's so many different like funnels they did the essay competition they did the video competition

And I've talked to people that are just people that are in the Apple ecosystem they're like in the Tesla ecosystem

So they're like yeah, I talked to grok on my way to work. I'm not kidding

Yeah, grok in the iPhone app store is that did 12 million last month?

Yeah, and I know I know like the the true like AI heads will be like groks behind on this benchmark model or whatever

And Tyler is that a cracked characterization? Yeah grok did more revenue grok did more revenue last month than it then Claude in the iPhone app store

I've started having conversations with I mean I'm using chatgbt

But I wanted to just I wanted to get up to speed on Taiwan and the just the like what was the reason for the original civil war and stuff

And so I was just having a conversation back and forth and no point was I like oh I really needs to be like you know

GPT 5.4 pro

It's like these are things that exist just like with one search to Wikipedia or one search to any it's probably baked into the weights of 3.5

So like if I'm just going to be like chatting with someone who's like reasonably smart like I would say grok is there and so what do you think?

Yeah, but like you could be talking to someone who's really really

No, like not if you're asking like basic basic knowledge retrieval questions that like the like any model is going to one one shot and just be like

Yeah, but you're just trying to stuff that you could just like actually Google but I can't Google via voice in my car on the drive and for someone who's driving a Tesla

And has a grok integration right there. They're just like sure like this is great. Okay. Yeah, that's fair

But like I don't think those people have actually tried like GPT 5.4 pro but I don't so good

It is it is good, but it's slow and

Truthfully like you can fire off the exact same query to 5.4 pro and 5.4 and 5.4 fast

Fast and and if the query is simple enough the answer will be exactly the same because if I ask if I ask 5.4

5.4

Extended thinking like what is the capital of California and it thinks for 10 minutes and it just tells me say

They sacrameno see you

Yeah, that's why you need to think a lot of people I told you I run my life on GPT 2

I

Elucinate a lot but people have said I have the mind of GPT 2 it's true

It's true

Anyway, let's continue apples revenue from generative AI apps rose from about 35 million in January to a high of 100 million in August

Do nothing win do nothing win sales have fallen from their peak partly because

According to the data as a proportion of apples total sales one billion dollars is small yet

Gen A apps are gen AI apps are growth driver for apple services business which investors have focused on in recent years

Because it has grown faster than device sales and both higher profit margins apples dominant share at the top of the smartphone market

Affords it another luxury time to get its own AI strategy right so they're making money while they figure everything else out

Apple's AI plans plan runs counter to strategies of competitors that are spending hundreds of billions of dollars on chips and data centers to build

Frontier language models apple is spending a fraction of that aiming instead to use all of the personal information people

Store on their iPhones together with the chips that it designs itself to power an on-device AI strategy

If they can act as a toll road for providers of AI then they'll probably end up looking good long term for not having the big

Cap ex overhang I have to imagine that apple is not capturing any revenue from

Any prizes developers called code codex any of those developers they're probably not even if they even if they are

Winding up using like a chat GPT subscription in codex they're probably setting that new subscription up on desktop

On desktop road on on the actual yeah, but it's a toll road on consumer which is consumer sales all the more

Reason to get an ads honestly because apple does not tax those an AI is exciting for apple because they need they need a new product

That they can just randomly bill you like $2.99 yeah any time they need a cat like a

$2.99 like don't don't you get just random bills from Apple like here

$2.99 like $2.99 cents yeah, like I feel like every time I check my email it's like Apple has charged you

Random a map for some for some subscription in other news

Rolls Royce has scrap plans to go all electric by 2030 as quote drivers prefer V12 engines

Would you look at that I mean and this is just a total shot total shot yeah total shot yeah drivers totally had to experience

You know being forced EVs forced upon them for the last few years to know that they they preferred

Combustion engines after all of course I'm kidding Elon has been saying the roads to reveal will blow your mind if it has a V12

We've been we've been we've been talking crazy if he drops a V12 that would completely break the internet yeah it'd be incredible

Let's talk about this Tesla that you were following yesterday. Oh, yes. Did you drop this in the chat already I sent it to you I know we

We shouldn't we shouldn't we shouldn't share the actual picture

I saw a Tesla that was a very funny mix of it had the anti-Elon club on it

But also in 1199 license plate and it was a plaid and it just like mixed every possible political idea and

And it had a vanity plate that was very sci-fi sci-fi so mixing like I do want to go to Mars. Yep, but not with Elon

Yep, the license plate basically said beam me up. So they want to go to Mars, but not with Elon. They support they have an incredible

That's possible in combat law enforcement. They enjoy high trim levels, but they say they do not agree with Elon's actions

Well, maybe they work for a rival AI lab or something and so they they're extremely sci-fi pill, but they just don't like it

They just feel like they're competing with XA

California has now spent over a hundred million dollars on a new bridge to nowhere

It is a wild life bridge which I have driven by hundreds of times

I've been seeing it. I've been experiencing the traffic that it causes. I'm not against the concept of a wild life bridge

In fact, I think it's fantastic. It does feel like it is a concrete jungle. This is beautiful

Totally. This has a lot of opportunity to actually improve the visual aesthetics of this particular part of the state

Caleb Hammer says, bro, the state cannot be real. It's very real.

He's in Caleb Hammer. He's like a finance. Yeah, he's got like the number one. He's like the one person you'd come to to be like, should I spend a hundred

Million dollars in a bridge? Yeah, and it's actually it's actually quite a bit more than a hundred

You got this point and the funny thing is like it's just kind of a bridge, but it doesn't it's lacking the entrances of the bridge

I feel like it's basically just like even just a little bit of wood to like smooth it out

So that it looks like there's at least the going to be start of

Of a ramp to get on the bridge like the bridge looks solid the actual center part looks solid

It doesn't feel that hard to finish this bridge. I'm optimistic that this gets done in the next hundred years like top

Apparently Colorado built a built a wild life bridge or a low cost of 15 million dollars

It's like a functionally something very very similar. The interesting thing is apparently the bridge

As is in some part for cougars cool and the wild thing is like on one side of the bridge you have a bunch of like residential

Homes and on the other side you have a bunch of cougars and so they're now going to have the cougars

It's exciting to go hang basically hang in all the backyards. So we'll see how this goes

But I'm excited for this to be finished up. Mm-hmm. What else is Anthropic doing there hiring for a policy manager who will be in charge of

Chemical weapons and high yield explosives this reads like you're going to be building high yield explosives

Which sounds like an androle job posting, but it is in fact for a policy manager who will be hopefully stopping people from

No, no, no. I read this as somebody whose job it is to decide how cloth is used to create chemical weapons and high yield explosive

I think it's probably like this person decides like where's the edge if you're asking like okay

I have a firework and I want to make sure it doesn't go off like

Should I you know throw in the trash or put in the recycling or take it to a special place like

Should answer that but if you go to it and you ask it like how do I build this c4 or something like that

Like there's all these like policy edges where if you're talking about counter strike and you say like let's plant the bomb

It shouldn't flag that as okay, you're actually trying to plant a bomb

It's like you know you're asking about a video game. We know how to interpret that appropriately

But there needs to be like a human in the loop to decide like where that frontier is and where that particular tree is

Martin Screly what's he saying he's coming on Monday for the great debate

The peptide debates says good music is the last mile of AI and Lil Wayne has some thoughts on AI music

Let's play this play this two-minute clip. How are you able AI in this business now?

Too much the challenge. I love it. AI is a better thing. I love that AI is what it is. Yeah

Because man, I love to be able to stand right next to whoever AI is he she they whatever or whatever

AI is standing right now. I'm still better

I'm going to talk about what you do again. Yeah, I'm going to go ring your listen. I do this. I do that

I love it. I love the challenge of it. The first time I seen somebody was it

My friends was a little worried. They was like man really got this AI stuff or you can just ask get to do

Give you a verse like Lil Wayne. And so I did it. I said, let me have a verse. He gave me a better shot. Yeah.

Not that I don't know a couple of devices asked her to give me one and they are all you suck.

I'll be okay. I'll fuck with that. I think he had to use it because he like

And voiceless. Yeah, another rapper to mock basically that's just take. That's so fun. That's great.

There is some breaking news that we do got to talk about Jeff Bezos in talks to raise a hundred billion for AI manufacturing fund.

Amazon founders traveled to the Middle East Singapore and fundraising effort linked to project Prometheus. That is incredible.

We have the red lights, exciting, breaking news, advanced talks. I don't care if it's just in there. It's toxic.

Meeting with some of the world's largest asset managers to raise funds for the project.

A few months ago he traveled to the Middle East to discuss the new fund with sovereign wealth representatives.

It's being described as a manufacturing transformation vehicle. I am absolutely against TK, right?

I mean, TK is not as directly focused on manufacturing. Like this is something I asked you.

Is there a generation vehicle, right? No, no, you think manufacturing transportation like it's a vehicle of fund for transforming manufacturing.

Oh, yeah, yeah, yeah, yeah. It's like an investing vehicle.

It's aiming to buy companies in major industrial sectors, such as chipmaking, defense, aerospace.

It would dwarf the size of some of the world's largest bio funds and rival soft banks, a hundred billion dollar fund.

How much do you think Jeff is pitching in himself? I'm good for 30, something in that range.

This is such a white pill. Basically, we need to reindustrialize America.

We're not going to do it by just copying everything from the past. There's some element of transformation that needs to happen as well as new efforts.

This is tremendous news.

I mean, there has been like a venture capital boom in reindustrialization, but most of the funds that we talk to that are in that category are 50 million, couple hundred million, certainly nothing at this scale.

And this has got to be incredible news for the founders that we talk to that are part of the reindustrialization effort.

Thank you for watching. Leave us five stars in Apple Podcasts and Spotify.

It's been an honor. We'll see you tomorrow. Good bye.