Dwarkesh Patel: belief

Transcript context

…s because the agents aren’t good enough at using their tools yet. Either these companies are going to build the agents themselves, or agents are going to get good enough to be able to use those tools. I think it’s going to be a combination of both. I think in your latest filings, you had almost a $100 billion in purchase commitments with foundries, memory, and packaging. SemiAnalysis has reported that you will have $250 billion of these kinds of purchase commitments. One interpretation is that Nvidia’s moat is really that you’ve locked up many years of these scarce components. Somebody else might have an accelerator, but can they actually get the memory to build it? Can they actually get the logic to build it? Is this really Nvidia’s big moat for the next few years? It’s one of the things that we can do that is hard for someone else to do. We’ve made enormous commitments upstream. Some of it is explicit, these commitments that you mentioned. Some of it is implicit. For example, a lot of the investments that are upstream are made by our supply chain because I said to the CEOs, “Let me tell you how big this industry is going to be, let me explain to you why, let me reason through it with you, and let me show you what I see.” As a result of that process of informing, inspiring, and aligning with CEOs of all different industries upstream, they’re willing to make the investments. Why are they willing to make the investments for me and not someone else? The reason for that is because they know that I have the capacity to buy their supply and sell it through my downstream. The fact is that Nvidia’s downstream supply chain and our downstream demand is so large, they’re willing to make the investment upstream. If you look at GTC, people are marveled by the scale of it and the people that go. It’s a full 360 degrees, the entire universe of AI all in one place. They’re all in one place because they need to see each other. I bring them together so that the downstream can see the upstream, the upstream can see the downstream, and all of them can see the advances in AI. Very importantly, they can all meet the AI natives, all the AI startups being built, and all the amazing things happening so they can see firsthand all the things that I tell them. I spend a lot of my time informing, directly or indirectly, our supply chain, partners, and ecosystem about the opportunity in front of us. Some people always say, “Jensen, in most keynotes, it’s one announcement after another.” With our keynotes, there’s always a part of it that’s a little torturous in the sense that it almost comes across like education. In fact, that’s exactly on my mind. I need to make sure the entire supply chain, upstream and downstream, the ecosystem, understands what is coming at us, why it’s coming, when it’s coming, how big it’s going to be, and is able to reason about it systematically, just like I reason about it. Regarding the moat as you describe it, we’re able to build for a future. If our next several years are a trillion dollars in scale, we have the supply chain to do it. Without our reach, the velocity of our business… Just as there’s cash flow, there’s supply chain flow, there’s churns. Nobody is going to build a supply chain for an architecture if the business churns are low. Our ability to sustain the scale is only because our downstream demand is so great. And they see it, they hear about it, they see it all coming. That allows us to do the things we’re able to do at the scale we do them.…

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