![Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451]](https://image.scripod.com/https://megaphone.imgix.net/podcasts/d97fee14-d4d7-11f0-8951-8324b640c1c1/image/d3a8b5ecbf3957de5b91f278a191c9ff.jpg?ixlib=rails-4.3.1&max-w=3000&max-h=3000&fit=crop&auto=format,compress)
Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451]
Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451]
Gavin Baker - Nvidia v. Google, Scaling Laws, and the Economics of AI - [Invest Like the Best, EP.451]
In this compelling conversation, Patrick O'Shaughnessy reunites with veteran investor Gavin Baker to explore the rapidly evolving landscape of artificial intelligence, from foundational technologies to long-term strategic implications. With deep expertise in tech investing and a track record of foresight on companies like Nvidia, Baker offers a nuanced perspective on how AI is reshaping industries, infrastructure, and investment opportunities.
Gavin Baker discusses the resilience of AI scaling laws, which continue to drive progress despite hardware bottlenecks. He highlights Google's temporary edge in cost-efficient AI training and NVIDIA’s delayed but transformative Blackwell architecture. The discussion covers AI's shift from raw intelligence to practical usefulness through long-context models and personalization, while examining threats like Edge AI decentralizing cloud dominance. Baker underscores power as a critical constraint, making energy access a key differentiator for large-scale AI operations. Speculative ideas like space-based data centers emerge as potential solutions. Meanwhile, Fortune 500 adoption lags behind agile startups, and SaaS companies are better positioned to monetize AI through existing workflows. The semiconductor ecosystem sees renewed innovation, fueled by VC interest and vertical integration. Baker closes with his personal investing origin story—how a reluctant internship sparked a lifelong pursuit of truth through markets, grounded in intellectual curiosity and adaptability.
06:00
06:00
Gemini 3's release confirmed the intactness of pre-training scaling laws
09:05
09:05
Post-training scaling laws have enabled breakthrough AI progress since October 2024
12:14
12:14
The first models trained on Blackwell are expected in early 2026, likely from XAI.
24:36
24:36
Gemini 3 successfully makes a restaurant reservation, showcasing near-term AI assistant potential
33:45
33:45
Booking a vacation with family preferences is harder and more economically useful than booking a restaurant.
34:38
34:38
VCs are more bullish on AI due to observed productivity gains with fewer employees
42:35
42:35
Reasoning enables a flywheel effect in AI, where good answers improve the model iteratively.
46:35
46:35
Chinese open-source can serve as a checkpoint, but lack of Blackwell access widens the AI gap with U.S. labs.
53:54
53:54
Space data centers using laser-linked satellites enable faster, more efficient AI inference than Earth-based systems
56:49
56:49
AI constantly requires compute, making sustained demand different from past tech cycles
1:00:18
1:00:18
Power as a constraint makes the price of compute less relevant.
1:05:57
1:05:57
The semiconductor ecosystem must evolve together to sustain annual cadence gains
1:09:54
1:09:54
AI companies can generate cash earlier despite sub-40% gross margins due to fewer human employees.
1:11:10
1:11:10
SaaS companies have a structural advantage over AI-native startups in adopting AI agent strategies due to existing cash flow and customer data.
1:19:19
1:19:19
Taking risks, changing minds, and admitting wrongness are crucial for learning.
1:25:23
1:25:23
Investing is a game of skill and chance where history and current events create an edge.
1:26:56
1:26:56
Investing is the only thing I'm good at
