Which Company Is Going To Win The AI Race? - David Friedberg

who's your number one Who's your number two if you had to could only bet on two here to achieve super intelligence AGI let's just say win the AI re win the AI uh big prize the big prize super intelligence AGI you know in the midterm five years five years from now we're sitting here Thomas give me your number one give me your number two look I I think to me number one I I still think Nvidia right I don't see the GPU kind of getting displaced I see additional architectures kind of coming on board right and growing the market but um at the end of the day all roads still lead to the GPU for all of these models So I would kind of still put um kind of Nvidia on that My number two more of a

dark horse but I I would pick Tesla I do think it has the most potential for vertical integration right From all the way the silicon to the model to actually the hardware right That might become super important not just in cars but in Optimus So Nvidia 1 Tesla is my dark horse Wow stunning Chimath who's your number one and number two In the midterm 5 years from now we're sitting here on AllIn episode 700 Tesla's one and Google's two And the reason is because they are the closest to having that vertically integrated stack that I spoke about I think that Tesla has the best vision models Now with XAI they'll have one of the best LLMs and reasoning models and they'll be able to eventually

stick that on Dojo And then all of that will be in all of the physical AI that you will interact with in your daily life whether it's a robot or whether it's a car or whether it's a robo taxi So that's number one And then number two for many of the same reasons I think Google because you'll have the Gemini family of models which just absolutely kickass like VO3 which we haven't really spoke about is going to destroy Hollywood like in the next year Like Hollywood is done I think but they're landing model after model They have the TPU and the next generation TPU I think is exceptional They're baking quantum and then they have an entire funnel of billions of people that they can direct

experiences to So Tesla one Google 2 Chimath quick followup on that I'm curious on Google This is the because I I oscillate a lot on this particular name Can Google win if search declines Yes And I think that what probably has to happen is bear with me when I say this but if you had to boil down Google's economic northstar metric right not the value northstar the economic northstar metric would be price per click And I do think that Google is extremely well positioned to pivot that to price per token And I think that they have some emerging classes of physical AI but they have the largest pool of people where they can generate a price per token value framework through YouTube

through Gmail through Workspace I think through search but probably it's a different kind of model It just requires them to rip the band-aid off at some point But yeah I think Google can do it I'm going to go with you Chimoth I'm one uh my one and two are either Google uh or Elon And I I'll just say Elon because I uh like you I spent a day up at um XAI and I saw what a magnet for talent he is I got to sit in some meetings and just he was interviewing people and he was working with that talent 8:00 at night There's a lot of people there on a Saturday grinding it out It was nuts I first went to XAI In the 15 minutes that I was in the parking lot finishing a call the kinds

of people that were walking in and out of there you could tell they were big brains Yeah I don't know how you know what I mean Like from every walk of life they all just looked much smarter than the rest of us Yeah It some of them were like chain smoking cigarettes and just like stressed out It was crazy I hit a couple of zins I'll be totally honest Um but the reason I say Elon versus Google is I think Elon's in a unique position I don't have any insider information here and and I haven't talked about this or I'm not back channeling from Elon lest anybody aggregate this I think what Colossus has done and what Tesla has done both of these things Tesla with

their own stack of hardware to your point Shimoth hardware plus software plus the user application of FSD and Optimus Then you put that together with the data the real-time data of X formerly known as Twitter plus um you know what he's building with XAI and obviously those two companies merged I think Tesla board XAI board have to get together put those two companies together One's worth a trillion one's worth 100 billion Put them and just have all that brain power going in one direction as opposed to Elon T switching between the two You do that I think he wins number one you don't do that I think he either gets one or two and then I think Google um is going to have a

better search product Thomas I think it's a really important point Do they lose search share Doesn't matter What I think matters is are their ads more effective Is their ad network more effective And I think based on what they know on you from your chat searches and your discussions and what they analyze in your email just analyzing your Gmail and your surfing behavior and Chrome if they get to keep it your Android phone if you use it your YouTube list and what you how when you drop off allin and when you start listening to another podcast whatever it is all that data all that data is going to lead to an ad network that performs so much better that even if they lose search hair their ad

network is going to continue to grow and I think it will increase in velocity So those are the my top two Freeberg I'm curious from your position which one you think is number one and number two I saved you for last because you know what we do here We save the best for last Free part go ahead I think there's a difference in how I would kind of lump them I I think that Tesla probably has the it is the best place to invest if you want to have a shot at a massive new industry So they've got a baseline business in in obviously the automobiles but I think this humanoid robot opportunity is absolutely mind-blowingly ginormous And I don't

think that there's a better company on Earth positioned to execute against this humanoid robotics opportunity than Tesla So you know it's sort of like I would call it a low probability high upside sort of call option embedded within that business And obviously you're paying a premium for that because it is still a very healthy premium you pay for that business I think Nvidia to Thomas's point I think the common thesis is it is the most protected The durability of the business is there But I would argue that there's actually a low probability but very high severity risk to Nvidia in China There was just a demonstration last month of a 1 nanometer semiconductor manufacturing process out

of China I think the more that we continue to try and isolate China from a policy perspective the more we are emboldening investment in China meaning from the government from private industry into China to create alternatives to the chip stack where the United States companies particularly Nvidia have emote today So I do think that there's going to be an emergent competitive threat coming out of China to Nvidia And just like we were knocked over by DeepSeek I think we will be knocked over by some semiconductor manufacturing processes um coming out of China in the near term But the overall kind of by the way Dave just on that point I think Sax's work on the

diffusion rule just generally I don't think has kind of gotten enough attention in the rescending of the diffusion rule which essentially handicapped our ability to even arm our allies right with our sem with our semiconductor technology um in my opinion was kind of a milestone and very important moment um to to try and offset exactly what you were just describing That's exactly right I mean there there there was a report a few months ago and I mentioned it on the show or maybe I didn't or maybe I sent it to Sax and we talked about it offline I I can't remember but it was about a $40 billion investment being made in developing competitive semiconductor manufacturing

full stack solutions out of China So I I do think that the lithography IP moat is being crossed in China I do think that China is developing actually new technology for uh DUV and EUV systems I I do think that there's a risk uh to Nvidia's core Now look Nvidia is such a durable business There's great modes great advantages but we're creating every incentive for an alternative to Nvidia to emerge from China And then my my third kind of categorization would be what's the portfolio uh solution I think that's Google I think that there's a diversification of high beta bets inside of Google of any one of which could have

call it a trillion dollar market cap outcome ranging from Whimo to quantum computing to the biologics work that uh Demis is working on out of um isomorphic Uh there's a number of things that do not get a lot of attention at Google So yes there's a there's a core business that that may be at risk Thomas but I think that there's a a portfolio of options you get at Google and you just need any one of them to hit to kind of make up for the loss But I do think also Sundar in my interview with him which we put out a couple of weeks ago is very thoughtful about where search evolves to and he is being I think reasonably aggressive in in trying to evolve the search product architecture to meet the

market to meet the consumer I do give him credit for that So Google would be in a good place for me as an overall kind of pick in that set of options So just to be clear Nvidia one Google 2 or Nvidia Tesla Like I said I think in terms of like having the right sharp ratio is how I would think about it The alpha and the beta adjusted returns I would put Google number one I would probably put Tesla Uh Tesla's valuation I think already has a premium associated with those options So I don't know Yeah So I don't know if I would really pay that premium I think um aside from the valuations let's take valuations out of it Just the the game here is who wins the AI prize 5 years That's how I

understood it as well Yeah So valuation irrelevant Valuation irrelevant Who wins the AI prize One you're saying Google Two you're saying Tesla I think Google's in such a position I I mean look Deus uh Demis I think has been fairly koi about where they are They obviously promote Gemini 2.5 but there's a lot still coming And it's and and as Chimath pointed out it's not just LLMs There's a pretty sizable family of models including a a lot of these um graph-based models that are being used in really novel applications that no one else is even close to no one's spending time on I mean some of the weather forecasting it might seem small and

trivial but it's a demonstration of Google's competency in in core model development that shows an understanding and a depth of research and work that goes well beyond LLM So I'm pretty bullish on the depth of talent the full stack Yeah And whatever they learn there could apply to Gmail could apply to search could apply to ads could apply to YouTube algorithm right It's just goes up and down Yeah Yeah From a product perspective I do think you see this kind of multi-model emergence that that we're now seeing that no one talks about the single model that sits behind the application There are multiple models that work together And obviously this agentic architecture unlocks another

layer of not just kind of solutions to complexity Sure And so there's there's quite a lot I think that's emergent here um that Google will start to kind of benefit from uh in the year ahead