E143: Nvidia smashes earnings, Arm walks the plank, M&A market, Vivek dominates GOP debate & more
All-In with Chamath, Jason, Sacks & FriedbergFri Aug 25 2023
Sultan of science interview with NASA Astronaut Woody Hoburg:
- Woody listens to the podcast on the ISS while working out
- He got his PhD at Cal in computer science and did a thesis on convex optimization applied to aerospace engineering
- Became a professor at MIT for three years before joining the astronaut program
- Pilot of SpaceX crew six mission to the ISS since March
Tequila update:
- Poll showed interest in an all-in tequila brand
- Pricing around $180-$190 per bottle could maximize demand
Nvidia's strong earnings report:
- Q2 revenue of $13.5 billion, up 101% YoY and 88% QoQ
- High growth in gaming segment (up 2030% YoY)
- Net income of $6 billion, up 843% YoY
- Market cap approaching Amazon and Google levels ($1.2 trillion)
Arm files for IPO:
- Revenue down slightly YoY but up QoQ
- Major business is smartphones (99% use Arm chip architecture)
Challenges for Arm IPO and public markets overall: - Market has shifted away from hardware focus towards AI and open source alternatives like RISC-V - Apple has started designing its own chips instead of using Arm architecture - Increased competition and commoditization in embedded systems market - Difficult valuation due to headwinds and limited growth potential
SoftBank's need to de-lever balance sheet: - Taking Arm public as part of this effort - Selling off assets like Alibaba shares to replenish liquidity
Challenging IPO market and need for profitability: - Lack of IPO window due to market conditions - Companies forced to get profitable or find other exits like M&A or aqua hires - Limited ability to raise capital through secondary offerings post-IPO
M&A market currently dead:
- Regulatory scrutiny on acquisitions, such as Adobe Figma and Microsoft Activision deals
- Uncertainty and challenges in getting regulatory approval for mergers
Need for companies to become profitable and focus on customer experience:
- Restructuring ambitions and plans to build sustainable businesses
- Profitability becoming a core part of company DNA for long-term success
Outlook for public markets and potential catalysts:
- Lack of IPO candidates that can catalyze the market
- Starlink could be a potential catalyst if ready for IPO
- Companies have no choice but to focus on profitability and survival
GOP Debate breakdown: Vivek's statement, DeSantis's strategy, Haley & Christie solidify positions:
- Nikki Haley gained interest with her personality and content
- Vivek was dynamic but faced criticism on his content
- Chris Christie had strong comebacks
- DeSantis positioned himself well as a governor
Vivek's comments on the Climate Agenda:
- He called the climate change agenda a hoax, drawing mixed reactions from the audience
Discussion on climate change beliefs and renewable energy options:
- People are skeptical due to past instances where institutions were wrong about certain things, leading them to question what they are being told now.
- The COVID pandemic has also eroded trust in scientific claims made during that time.
- There are multiple reasons to pursue sustainable energy, including economic benefits, environmental concerns, geopolitical considerations, and national security.
- However, people are less likely to blindly trust self-proclaimed experts without thoroughly examining the evidence themselves.
Discussion on recent events related to Russia:
- Speculation about the death of Purgosian after his involvement in a mutiny against Putin's regime.
- Uncertainty surrounding the cause of his death (explosive device or mechanical difficulties).
- Analysis of Putin's calculated actions in dealing with internal threats.
- Recognition that the Russian regime is stable and Putin remains in control, making regime change unlikely.
Overall commentary on political figures:
- Criticism of politicians' behavior and their focus on personal interests rather than serving the public.
- Satirical remarks about their interactions and sexual tension among them.