Owning your own servers

`3:29:37`

in the way that back then, I ran the whole business on a single box with 2004 technology or probably a hundred megabit cable. Like the capacity we have access to both in terms of compute and connectivity is something that people haven't readjusted to. And this happens sometimes in technology where progress sneaks up on you. This happened with SSDs. I love that, by the way. We designed so much of our technology and storage approach and database design around spinning metal disks that had certain seek rate properties. And then we went to NVMe and SSDs, and it took quite a while for people to realize that the systems had to be built fundamentally different now. That the difference between memory and disk was now far smaller when you weren't spinning these metal plates around with a little head that had to read off them. You were essentially just dealing with another type of memory.

`3:30:38`

I think we're a little bit in that same phase when it comes to the capacity of new businesses to be launched literally out of your damn bedroom. — So you can get pretty far with a large user based with home labing? — Absolutely. — That's exciting. That's like the old school. That's really exciting, right? — It's bringing back the startup in the garage in the literal physical sense of the word. Now some of that is do we need to, you can get relatively cheap cloud capacity if you don't need very much. — Hell yes, we need to. I mean the feeling of doing that by yourself of seeing LED lights in your own home. I mean there's nothing like that. — There's just an aesthetic to it that I am completely in love with and I wanna try to push on. Now it's not gonna be the same thing as getting out of the cloud. I'm not sure our exit out of the cloud was not the exit out of the data center. We basically just bought hardware, shipped it to a professionally managed data center that we didn't even actually touch. This is the other misconception people have about moving out of the cloud. That we have a bunch of people

`3:31:38`

who are constantly driving to a data center somewhere to rack new boxes and change dead RAM. That's not how things happen in the modern world at all. We have a company called Summit, previously Deft, that is what we call white gloves. They work in the data center when we need something like, "Hey Deft, can you go down and swap the dead SSD in box number six?" They do it. And what we see is akin to what someone working with the cloud would see. You see IP addresses coming online. You see drives coming online. It's not that different, but it is a whole heck of a lot cheaper when you are operating at our scale. And of course it is. Of course it's cheaper to own things if you need those things for years rather than it is to rent it. In no other domain would we confuse those two things that it's cheaper to own for the long duration than it is to rent. — There is some gray area, like I've gotten a chance to interact with the xAI team a bunch. I'm probably going back out there in Memphis to do a big podcast associated with the Grok release.

`3:32:39`

And those folks, in order to achieve the speed of building up the cluster and to solve some of the novel aspects that have to do with the GPU, with the training, they have to be a little bit more hands on. It's a less white glove. — Oh, and I love that, right? They're dealing with a frontier problem and they're dealing with it not by renting a bunch of GPUs at a huge markup from their main competitor. They're going like, "No, screw that. We're gonna put a hundred thousand GPUs in our own tents," right? And build it in absolute record time. So I think if anything, this is testament to the idea that owning hardware can give you an advantage both at the small scale, at the medium scale and at the pioneer levels of computing. — By the way, you know, speaking of teams, that those are xAI, Tesla are large companies, but all those folks, I don't know what it is about, you said Jeff is really good at finding good people, at seeing strength in people. Like Elon is also extremely,