TEK2day Podcast

Proprietary LLM builders need to experience a valuation haircut as open source LLMs take share from proprietary LLMs. Proprietary LLM builders (OpenAI, Anthropic, Google, Microsoft, Amazon), have enjoyed lofty valuations over the past several years. Given the rise of open source competitors - which are on par with proprietary models from a performance standpoint and can be operated at a fraction of the cost - the proprietary model builders should suffer a valuation haircut. I believe that open source LLM builders such as DeepSeek and META will win the day and that 80% of LLMs and SLMs in production 5 years from now will be open source language models. https://open.substack.com/pub/tek2day/p/valuation-haircut-is-due-for-proprietary?r=1rp1p&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false

Originally published Dec 21st 2024. View the video version here on YouTube: https://youtu.be/6P0jQxZTuQo?feature=shared

We demo NotebookLM for a YouTube video, for a TEK2day article and for an EPS call transcript. Watch the video version of this episode here: https://youtu.be/wjqMhBdTxSQ?feature=shared

Watch the video version of this episode here: https://youtu.be/dc68lkZ1Bxo?feature=shared At some point cost and payback period will factor into frontier LLM building, especially as use cases are not well defined. We are at the $1 billion LLM level today. $10 billion will likely be the cost of developing frontier LLMs by 2026, $100 billion by 2027 and $1 Trillion by 2028 should the current pace of development continue. In episode 507 we make the case for smaller, “baseline” language models that are industry domain-specific, trained with opensource data as well as with proprietary enterprise data. These baseline models could power various applications and services and also be used to train third-party models. This scenario would create a natural selection/survivorship process for language models whereby smaller models power well-defined use cases that address specific commercial needs. This path makes more economic sense than developing ever larger monolithic LLMs in a vacuum.

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We walk you through Google's AI-based podcast generation tool. Watch the video version of this podcast episode here: https://youtu.be/y2CNtayIBrU?feature=shared

View the video version of this podcast episode here on YouTube: https://youtu.be/dbwP3r6Nvqw?feature=shared Read the related TEK2day article here: https://tek2day.substack.com/p/backtesting-the-tek2day-founder-ceo See the backtested portfolio here: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3zih7QmbLhWF4jG4AUChu1 See this podcast episode on X: https://x.com/JonathanMaietta/status/1828490305815093585

Watch the video version of this podcast episode on YouTube: https://youtu.be/7XHKgYLYZP0?feature=shared Read the related Substack article here: https://tek2day.substack.com/p/founder-ceos-vs-comps Watch the video version of this podcast episode on X: https://x.com/JonathanMaietta/status/1828445724075254096

Eric Schmidt's comments regarding Agentic AI were overly bullish in our view whereas Deepmind co-founder Demis Hassabis has a more grounded perspective. View Schmidt's remarks on our Substack page: https://open.substack.com/pub/tek2day/p/former-google-ceo-eric-schmidt-speaks?r=1rp1p&utm_campaign=post&utm_medium=web View Schmidt's remarks on X: https://x.com/JonathanMaietta/status/1826427051693502607 View Hassabis' talk on the subject of Agentic AI: https://youtu.be/pZybROKrj2Q?feature=shared View the video version of this podcast episode on YouTube: https://youtu.be/EJRSNHKlQwo?feature=shared

View the video version of this podcast on YouTube: https://youtu.be/8Y9MCNVQlcY?feature=shared

A CrowdStrike update that was pushed this past week took down Microsoft, which had a cascading effect across the real economy. MSFT could use M&A to mitigate that risk going forward. Microsoft could acquire 100% of the equity or at least a meaningful equity stake in any technology company that strategically impacts Azure, Windows, and Microsoft in general in order to enforce a rigorous process around third-party software updates. Such an equity stake likely would have prevented this week’s CrowdStrike disaster. In addition, owning a material equity stake in strategic technology partners would enable Microsoft to influence product strategy and direction. The risk of a material, negative event caused by a third-party application is too great for MSFT to not want to take risk mitigation measures. Equity stakes are a great risk mitigation tool. Watch the video version of this episode here: https://youtu.be/kyN4RMAWibs?feature=shared

A back-end loaded year puts the FY'25 consensus revenue estimate of $120 Billion at risk. Watch the video version of this podcast here: https://youtu.be/RqVDLOhcSOc?feature=shared

We cover NVIDIA's insider activity which is heavily weighted toward insiders selling. In fact, over the past 3 months, 99% of NVDA insider transactions have been share sales. We also cover Gen AI.

MSFT is enjoying a 3,000x MVA to Gen AI Revenue multiple. Read the full TEK2day article here: https://tek2day.substack.com/p/msfts-3000x-market-value-added-to Watch the YouTube version of this podcast episode here: https://youtu.be/465MY47xG6Q?feature=shared

If Microsoft’s Gen AI effort is to be a success on the order of justifying MSFT’s share gains (up 87% since Dec 30th 2022), Copilot Pro ($20 per user per month) needs to be a success. Read the full article here: https://open.substack.com/pub/tek2day/p/microsoft-copilot-pro-show-me-the?r=1rp1p&utm_campaign=post&utm_medium=web Watch the YouTube version of this podcast episode here: https://youtu.be/LOOfcW7Rt3I?feature=shared

View the video version of this episode here on YouTube: https://youtu.be/0Lx7Njk4QLE?feature=shared

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See our related article here: https://open.substack.com/pub/tek2day/p/recessions-happen-when-fed-funds?r=1rp1p&utm_campaign=post&utm_medium=web