Chapter 10: NVIDIA's $99 billion AI investment machine

Uh, all right. Uh, let me move us along.

So, Dave, uh, you've been saying for months now that AI entrepreneurs need to figure out how to get into the front door of the Nvidia ecosystem because that's where the cash is. This week, CNBC tallied up Nvidia's total AI investments and commitments at $99 billion. For context, $99 billion is larger than the entire cumulative assets under management for all the venture firms on Earth. Nvidia has become one of the largest AI VCs. Dave, you want to hit this one?

Yeah. What I'm telling everybody is don't just think of it in terms of assets, which is already insane. Think of it in terms of assets in motion, because people tend to look at — you know, like a VC firm will inflate its AUM by saying, oh, we manage a billion dollars, but that's across five funds, you know, many of which stopped investing years ago. Like, well, how much are you actually investing this year? Same is true when you look at the mega banks. You're like, well, isn't JP Morgan really, really big compared to Nvidia? No. It's tiny in absolute terms, but it's also really tiny in terms of new investment decisions that it'll make this year compared to Nvidia.

So, if you look at it through the lens of money in motion, it's completely dominated by the big AI companies that now have, you know, 20 plus trillion in liquidity that they want to get recycled to reinforce their positions. So yeah, you work through the venture capitalists at the seed stage, but you really quickly want to be talking to the Magna Mobster companies who have massive amounts of investment capital.

Yeah. And by the way, everybody has heard this before, Alex coined a beautiful term, Magna Mobster [unclear], for the 11 companies at the heart of the innermost loop in the economy.

So, you know, it's the Microsofts and the sort of the FAANG companies on the one hand, but also the new members of the 11, including SpaceX and Tesla and, um, Broadcom, obviously.

Yeah. Yeah. Yeah. I love that term. So, when we speak about Magna Mobster, you know, now what that means.

And there's a song — there's a Magna Mobster song. You can Google it.

Of course. And Dave, the other thing that's going on is, of course, we created all these centimillionaires and billionaires when SpaceX went public. We're going to create the same when Anthropic goes public and OpenAI goes public, and all of these AI entrepreneurs are going to be reinvesting in the ecosystem. They're going to become the largest source of capital for seed stage, series A stage. Uh, and it's only going to accelerate everything faster and faster and faster. And this is what the singularity means.

I remember once in 1999, right just at the peak of, you know, the dot-com world, a friend of mine said, you got to go — got to go to Sand Hill Road. There's a river of gold flowing. Take your ladle and put it into the river of gold and get your capital for your startup, Peter. And that river of gold now is coming out of all of these companies uh and their employees.

That's right. And it's an ecosystem that's largely working within itself now. It's got more than enough capital within its own world to build an entire economy inside itself. Because what a lot of people in the outside world were looking for is, well, someday AI is going to show up and change my auto dealership or change my laundromat. Now, very unlikely they're going to bother disrupting the people that are outside that loop.

It's almost — this is taking it too far — but it's almost like, imagine it's a Brazilian rainforest village or an African village. You know, did the computer revolution decide, yes, I must take over that village? They said, I don't care. Just stay there and live without computers and electricity. That's fine. That's what AI is going to start doing. It's going to be this other group of people, like our Moonshots attendees, who are going to be operating in this alternate, massively scaling economy that is largely within itself. And there'll just be a couple of touch points with the legacy economy, like new drugs and cures will pop up and, like, oh okay, this goes out to the world, or, you know, new services, new video games, whatever. They're coming out of the AI world and going out to the regular world. But for the most part, the AI world is so big now and so self-contained that it doesn't need to go destroy all white collar jobs. And the byproduct of that is it's mostly going to leave people who don't care alone. But you don't want to be one of those people. You want to be part of this massive tsunami.

Yeah. You don't want to be left behind by the rapture of the nerds. Yeah.