Two Legendary Founders: Travis Kalanick & Michael Dell Live from Austin, Texas

I don't know if some of you knew I was an angel investor in some companies.

On the count of 3, what's my favorite angel investment of all time?

1, 2, 3.

Uber!

Thank you.

Give it up, Travis Kalanick.

Appreciate you.

All right.

Wow.

On a big news day, Travis is here on a very big news day.

You spent, uh, wow, I guess like 7 years just in the lab building.

Last year, every year I ask you, hey, you want to come to the All In Summit?

You want to say, nah, it's like, I'm gonna just chill, I'm building.

Next year, hey, you know, just toys available.

You understand I'm stealth.

Hey, stealth.

I'm stealth.

Nobody knows where I am.

Nobody knows what I'm doing.

The employees are not allowed to put the name of the company on their LinkedIn.

Thousands of employees that weren't allowed to put the company name on LinkedIn.

I mean, incredible.

And I'm like, okay.

And their parents thought they worked for the CIA.

Yeah.

And then he's like, and by the way, Jake, you can invest, you can't announce it and you have to sign an NDA.

You can't mention you're an investor.

It's like, okay, no problem.

I'm just happy to be on the cap table.

Is he like kind of like secret saying what he wasn't supposed to say?

Yeah, right now it's all public.

That just happened.

Well, you can— No, you're out now.

It, let's go.

You're out.

It's out.

You came out of stealth today.

Um, it's so funny.

It's so great.

You came out of stealth.

Well, you talked a little bit.

You came to All In Summit last year.

Is that true?

Is that fair?

You say you're coming out of stealth today?

Is that right?

Well, look, let's just start with what that meant for our employees, because again, imagine if you're at a multi-thousand person company and every single employee has stealth on their

LinkedIn.

Including salespeople,

okay, including recruiters.

Like, it was— they were, they were living life on hard mode.

It was kind of fun too, right?

I mean, I mean, yeah, it was like kind of cool.

What's— what is this?

Why are there— why is this massive density of stealth, right, startup people in Los Angeles?

What is happening over there?

Yeah, yeah.

Also, technically, the name of the company in different countries was very generic names of companies.

I mean, everything was designed to be stealth, right?

So we operate in 30 countries.

In the US, the kitchens product is known as Cloud Kitchens.

In Korea,

it's Kitchen Valley.

In the Middle East, it's Nama.

Latin America, parts of Latin America, it's Casino Sequeltas.

I mean, you get the idea.

You can't even remember all the names and all the code words.

Think about it.

Yeah, think it through.

But we have 4 in China.

You know, it's like all over the place.

Yeah.

But things have gone really well.

And you've been a little acquisitive.

So tell us about the branding today that you're announcing, and then maybe some of the acquisitions and evolution of the company.

You're not just renting kitchen space.

Those who

know how I thought about things in the Uber day, a lot of this stuff's not surprising.

I would often talk about digitizing the physical world.

I think I even did it all at Summit.

The quick version of this, I'll try to do it quickly, but it's like we know the bits world, the computer world, the one that Michael Dell essentially invented for us.

CPU, storage, network, these are 3 core computing resources when you go to computer science class your first day.

3 core computer resources.

CPU manipulates the bits, storage stores the bits, network moves bits from point A to point B.

But if you're digitizing the physical world, you're treating atoms like bits.

You're building an atoms-based computer.

And I'll explain what I mean to say.

I know this is a little, little out there.

CPU manipulates bits.

What manipulates atoms?

Manufacturing.

Storage stores bits.

What stores atoms?

Real estate.

Network moves bits from point A to point B.

What moves atoms?

That's transportation.

Or logistics.

So you have these three core computing resources in an atoms-based computer.

The name of my company was very obtuse and purposely designed to be as boring as hell, was called City Storage Systems.

So that's digitized real estate in an atoms-based computer.

Our first computer being a food computer.

What does that mean?

Manufacturing, real estate, and logistics for food.

And so you start to get there.

And the idea that the mission was infrastructure for better food, the idea was, can you get a meal that's prepared and delivered to you so efficient that it starts to approach the cost

of going to the grocery store?

If you can do that, you do to the kitchen what Uber did to the car.

But in the Uber day, the roads were there, the cars are unused, you just had to put an app in the app store.

It wasn't that easy, but kind of that easy.

In this world, you can't do this on a restaurant.

Restaurant doesn't have— when I left Uber, 13% of all San Francisco miles were Uber miles.

You can't get— and that was 10, 9 years ago.

You can't get there on food, on restaurants.

They have like 20% capacity.

Uber Eats and DoorDash fill it, but the infrastructure to do high-capacity, high-scale sort of

industrial production's just not there and the logistics just not there.

It just doesn't work.

That's why on e-commerce you go through Amazon, big-ass warehouses with awesome logistics.

You've gotta do the same thing when food, when food goes to e-commerce.

That was a lot.

Yeah.

Okay.

So bottom line is it's awesome.

We do this food computation stuff.

We're doing more computers now.

And so the name of the company is called Atoms.

And it's, let's say the mission is

physical automation to transform industries and move the world.

And so we have our food computer I talked about, then we're doing mining.

Mining as in mining minerals?

Not data mining.

We're talking about atoms, guys.

Yeah.

So, well, of course you do some mining data mining too, but the point is physical mining.

So automation of mines.

The mission there is more productive mines to power Earth's industries.

It's got this industrial atoms vibe to it.

Then on the transport side, it's wheelbase for robots.

If you're doing specialized robots, not humanoids, specialized robots,

you need to be able to move and act in the physical world.

But the minute you're moving, You gotta have a wheelbase.

So it's just part of the equation.

And a lot of people go look at Tesla, it's great.

Look at Waymo, awesome.

They're cruising around Austin, of course.

But there's so many things that move.

It's not just a ridesharing thing.

And so obviously including mining equipment that's doing its thing.

So you guys, that's the general sort of idea.

And we acquired a company on the mining stuff a company called Pronto, or it's about to close.

It's— we're inches from closing is the way to put it.

What were they doing?

What was their business?

Pronto?

Automating mining equipment.

Where are they based?

They're based in San Francisco.

So you and I were starting to talk about this backstage, but there's some folks I talked to in the mining industry who mentioned, you know, like the big issue with mining, number one,

is just surveying, like finding the locations, right?

Is there an advantage to be created there?

Because I know there's a couple startups that are trying to be really smart about selecting locations to to get the targets out of the ground.

Yeah.

And then the other one is like, well, can you go deep?

Because pretty much anywhere on Earth, you can get whatever you want if you're willing to go deep enough, but the cost is distance squared, right?

So the energy cost is like, how deep are you going to the second power?

So it becomes geometrically more expensive to go deeper, but the deeper you go, the more you're able to kind of not worry about getting the right location.

So does automation unlock that capacity?

Automation definitely does.

I mean, but yeah, I mean also it's like, man, does Boring Company have some good stuff going?

Like, I hope we were like, we're doing the mining thing, like, and Boring goes, makes, you know, some good tunnels for cars to do the thing.

But like, there's some kind of boring mechanism, automated tunneling to do some of this.

But to be honest, there's, They have this thing, it's like rare earths.

I don't know why they put plural, rare earths.

Isn't it rare earth?

I don't know.

But the—

Rare earth.

Yeah.

But it's not rare.

It's uncommon minerals.

Guys, it's not rare.

It's what you have to do to the land is aggressive.

And what's rare is

where are the places they'll let you do it that you can also sort of get people to.

When you automate, you can go to a lot of places.

Uh, well, first is all the mines that exist are way more productive.

Um, and the second is you can then sort of justify going to places you wouldn't have been able to go before because, um, you don't have as much of a labor footprint or a safety issue

or a whole bunch of other things that then— so it was inhospitable, if it's regulated, if it's like, I don't want to live there, it's the end of the earth.

Yeah, you can send robots and have people monitoring them remotely.

Yeah.

And yeah, this is like a future that feels like a little bit like science fiction.

Look, we're here in Austin.

You got to do the shout out to Tesla and all the things, because I like to sort of break down the physical AI stack

includes not just like, oh yeah, computation, and I've got to have physical AI models, and I gotta All the things you sort of think of.

What about land development?

That should be in that stack.

What about chemistry?

That needs to be in the stack.

Manufacturing needs to be a stack.

When you look at the stack, you're like, damn, Tesla's got this shit.

They are the Google of this era, which is what I mean by that is in the 2000s, if you were doing a startup in the 2000s, the first question you would get

is, why isn't, Why isn't Google going to kill you?

Or why isn't Google just going to do it?

Why?

Yeah, Google, they're not going to know that they killed you.

And before that, Microsoft.

And before that was Microsoft, the late '90s.

Uber had a time, 2010.

Yeah, what if Uber puts that in the app?

Come on.

It's like, dude, this is Uber.

I'm like, yeah.

But, you know, I think in the physical AI space, that's a, that's sort of a Tesla thing.

But there's so many things to do.

You got to shoot your shot.

I got to do some stuff.

And rumors that, um, Hey, you might not be done with self-driving, something that you were very early on.

How do you think about what you're seeing in the playing field of self-driving?

Because my Lord, you know, Waymo's making great progress, Tesla's making great progress.

Pick a winner.

Like, pick a winner between Tesla, Waymo, Uber.

Or like, Uber seems to be building a network of stuff.

Yeah, I mean, the number of— Pick a winner.

The number of players in this space is crazy now, right?

Yeah, look, there's— I think there's more noise, there's more bark than there is bite right now.

Look, I think Waymo obviously is ahead.

The existence proof is there.

Their issue is manufacturing and scale

and urgency and fierceness.

Like, let's come on.

Let's win.

Let's go.

Yeah.

You know, Uber had an autonomy project back in the day, and they have a different strategy these days.

I haven't been there for a while.

So, but the point is, is that you, so you got Waymo, then you've got Tesla, fundamentals, science,

hard mode times 100.

And the question is, do they get there?

In what timescale?

If they, and like honestly, everybody's like, could happen tomorrow, could happen in 5 years.

And I think that it's like, when does the ChatGPT moment happen for vision?

Is basically the thing, let's call it vision without other sensors.

So super inspiring, but like what's the timeline on it?

Yep.

Those are the base, this is basically the, and then there's a lot of other little guys that don't really have the stuff I believe yet.

There's nobody standing out just yet of the others.

Do you think we're at a point now, like obviously now that you're getting into more of these kind of autonomous systems that move around, like do we have these vision language action

models tuned and ready for primetime?

There's been a conversation like, who's going to have the Android, the operating system for vision, language, action, where I can use my voice, tell it to do something, and it knows

what I'm saying, and then it identifies the objects and does the thing in the physical world?

Do those models exist today, or they're still work?

And is that like a Google OS, or where does that OS come from?

Look, I think this is an area of a lot of energy a mix of research and implementation.

I think there's a lot of hope and interesting stuff.

I mean, the high level is we all remember what happened when you used ChatGPT 3.5 and you're like, holy shit.

Yeah, it's legit.

Whoa.

And then it went to 4 and you're like, okay, like some stuff just changed.

The world just changed and I can sort of connect some dots and shit's getting real.

Is it about to happen?

Is it about to happen for physical AI?

And that's what this is about.

And the fun part about it is machine learning, deep learning, this kind of thing for many years, decades was like inscrutable.

I don't know what the thing is thinking.

It just spits out an answer and I know it's correct.

Well, now you can have a conversation with it,

right?

Like imagine if it's driving your car

and there's different agents And one's just driving, the other's like, yo, look out over there.

Yeah.

It's like, oh, just like how we roll.

It was like somebody does that.

You're like, you're like, honey, that's like 200 meters away.

We're going to be okay.

Yeah.

Jason and I don't call each other honey, but I got you.

Yes.

Like sweetie, you know?

Yeah.

Okay.

So anyways, that was odd, wasn't it?

Okay.

Okay.

I didn't mean it that way.

I didn't mean it.

Yeah, you know I meant it.

Okay.

Language is a beautiful compression mechanism that humans use 100 watts of energy.

Like, and you put that in the scheme of things of like AI training, AI energy, the power plants that are built to do the thing that isn't even at human strength yet.

Okay?

The Waymo machine takes 100 times more energy to drive a Waymo than a human does to drive a Waymo.

So, so language, we, there are still things that humans are great at and that unbeaten, like the GOAT, we're still the GOAT at certain things.

Language is this epic compression and, um, we need to find ways to compress.

'Cause like when you think about how, how we first started looking at the physical world is we saw everything.

And you know what, guys?

And this is sort of obvious, like, it doesn't matter what the cloud is doing if I'm driving.

But like, the car doesn't know that.

It's pulling in every fricking data point and processing everything.

And it's, you know, look, they've been about sort of carving out the things that don't matter and things like this, but there's ultra awesome versions of this.

And you can imagine how you can use language or things that look like language to communicate either amongst agents or sort of safety systems with a driving system to sort of, get very

efficient answers and to identify safety issues very efficiently.

People don't know that you've moved to Texas as of— well, most people don't know, but it's out there.

Yeah.

You moved here in December, so now you're a resident of Austin.

Yeah, I was— thank you.

It's very exciting for me.

We've been getting to play some backgammon.

Backgammon cards.

We're having a good time.

So I've had a place on Lake Austin since 2021,

and I go there.

I'm an avid water skier.

You're impressive at water skiing, I have to say.

So I've had a place in Austin for 5 years.

Fricking love it.

It's my weekend.

I would go 15 weekends a year.

What do you think's going to happen in California?

It's pretty messed up.

Look, I grew up in Cali.

I grew up in Los Angeles.

My parents were born and bred in Los Angeles, which basically makes them the founders of LA.

Okay.

But

so I have a lot of heart, like my whole family, everything, you know, it's pretty, it's pretty, it's, I don't want to— A lot of us feel that way.

I don't want to get the violin out, but it just, but— It's heartbreaking.

The place, it totally, it's just a place you grew up.

It's your home, you know, when you have to leave, Uh, but it's getting weird out there,

and, uh, it feels like it's getting weirder.

And at some point, that's— it's just too weird.

It's too weird.

Do you think everyone's gonna leave?

I mean, it started with Elon, and it was like, yeah, he was— we don't want Elon here.

And then he's like, message received, right?

And then it kind of worked its way down the tech industry and in the kind of, you know, world of people building businesses and whatnot.

And now it's kind of gotten so broad in terms of the— and Joe Rogan, comedy, music, New Yorkers, restaurateurs.

I mean, this place is the fun— I'm not even talking about this, I'm just talking about everyone leaving LA, or sorry, leaving California, is almost like working down this path of— look,

my— the rest of my team's like, we're— when are we moving?

They're like, "Well—" And how are you dealing with that?

So that was the question was like— Gotta buy homes on the lake.

There are literally dozens of startup CEOs of,

call it successful or growing companies that I talk to who are like, "Dude, I want to leave, but I got employees here.

I got an office here.

I got a facility here.

I build stuff here.

How am I going to leave?" Yeah, I totally get it.

It's a real thing.

So look, I think like most things,

sort of when it's time and it feels painful to do something, sometimes it's actually not as bad as you think and you just gotta make the move and lead and do it.

And so that's kind of what, that's kind of the process, the almost like a mourning process I went through.

And that's just what it is.

And you're setting up a team here?

Yeah, of course.

And I got that office.

Right on the lake.

Did you get that?

Uh, it's the one we are negotiating.

No, it's all good.

No, no, it's all good.

We're negotiating right now.

Good.

But I'm gonna jet ski to work.

No, literally, it's a true story.

Last year we're like driving up the thing and I was like, wow, I wonder who owns that.

He's like, I will.

And I was like, did you look at it?

He's like, I looked at that.

And I was like, that's a— that would be a nice one.

But the truth is You know, and I had a couple people move here a couple years ago, and they all had the same reaction.

Oh my God, I'm living in a place that's twice as big for half as much.

The people here are dope.

The food is dope.

Everybody here has got this sense that we're building the future, and it's just fun, and we're all positive.

And, you know, for me, I got to live New York, LA, San Francisco.

I did 3 of the great cities in this country.

This one feels the most most like home to me, which is a very strange feeling to me.

But it feels like everybody here wants to build the future and it's very diverse, you know, like all these different industries and people pursuing stuff.

I, I think this is the future.

Yeah.

Here's the thing, like you go to San Francisco and I still have a little nostalgia when I go to San Francisco, just having built Uber there and the whole thing.

Um, I still get the, you know, the butterflies, just, I do, you know, but it does have something magical.

You just can't take it away.

And then you look at all of these bike lanes and these bus lanes that never have a bus or a bike in them and cost $400 million to build one mile.

And you're like, and it's literally, it's sort of like this subconscious desire to choke the city off.

Now remember, I look at things through roads.

That's how I think.

So I'm just like, obviously the city is totally busted.

Yeah.

Totally.

No, they, they literally took Market Street and they're like, What would be the optimal way to fuck this up and virtue signal at the same time?

And they're like, yeah, buses.

And it's like, nobody's on the bus.

Nobody takes the bus.

It's a beautiful small town.

That whole street is empty and painted red.

Okay, so we all bitch and complain nonstop.

When are you leaving?

Like, I'm number one, I get it.

But when are you leaving?

Okay, well, on the chat, you're the the best, right?

Yeah.

I'm like, okay, so let me just say, by the way, there's a couple glasses of wine in public-facing Friedberg.

Yeah.

And he's like, you know, I think there's a better way to do this.

And then there's like Darth Friedberg in group chat.

He's like, these people, these morons are— they're destroying society.

He is like Darth Friedberg in group chat.

Am I lying?

Am I lying?

Is he the most correct?

Especially after a couple couple glasses of water.

Yeah, when I start drinking, I gotta go.

He takes pictures, he's like, fourth beverage, and we're like, oh, it's worth staying up on the group chat.

And then I'm like, I'll go and attack this congressman on Twitter, which I really like.

Yeah, don't delete the tweet.

Yeah, I delete the tweets.

Okay, so there's a group of people trying to raise $500 million to create like a tech slash business coalition

to go to Sacramento, which arguably is something that everyone's left and avoided doing forever because no one wants to spend time in friggin Sacramento fighting politicians.

But it's almost like we're all falling off a cliff.

It's time to do something.

Do you think there's a realistic path back?

Do you think that people can actually get their shit together, that even if $500 million came in, there's a way to kind of turn around the state, fix some of the policies?

You think it's too late?

I don't think that.

But look, I would go— look, anybody who's doing anything to fix things, I'm like, Hell yeah, let's do something.

The issue is we all grew up in the tech world, which was like a libertarian place where you stay out of politics and that kind of— You felt.

It was that kind of vibe.

It was just everybody was like that.

Leave me alone, I want to make stuff.

Yeah, I just, I'm not, I don't do that.

And that's obviously, this is not a thing anymore.

In California, I think the ballot initiatives are very powerful and there's very clean ways to get something on the ballot.

Love that.

I think that your DAs who have decided we do not enforce crime at all anymore, that's like a sweet spot.

Like, I believe that— I sort of had this aphorism: truth and justice are the immune system for society.

When

the immune system is suppressed, all the social ills flare up.

So look for the places where truth and justice are being deteriorated, are being degraded, and say, how do we get at that?

Because if you get at that, everything else downstream will be better.

So that's kind of how I look at things and how I also determine whether the world's getting better or worse.

When I say weird, I'm talking about truth and justice.

That's what I mean when I say, oh man, it's getting weird.

It's getting weirder, which means it's weird.

I'm just talking about truth and justice.

Well, I mean, and you look at the homeless industrial complex, you look at Chesa Boudin, which the All In Pod, Sachs, myself, and the pod, like, we, we literally led the recall of him.

And then you had the same thing going on in LA where they were just like, if somebody— Gascon.

Yeah, Gascon.

I mean, we basically lost the script.

You're running the city for the criminals.

It literally is like a Batman movie.

It's like Bane.

I mean, you want to arrest the criminals.

Look, I was born in the darkness.

I mean, these guys are fucking lunatics.

Yeah, look, I, I know police officers in Los Angeles who are no longer police officers, and these are lifelong guys who protect and serve.

That's in their bloods or DNA.

They want to protect people.

They want the bad guys to be dealt with, and they, they almost have PTSD from

what it is like to want to serve and see bad things happening and not being allowed to stop it.

Yeah, nobody's got their back and they're not allowed to do their job.

It's, it's crazy.

And I— it's getting weird.

Okay, hey, I want to just go back to AI.

Sorry for the darkness.

I don't know, I think it's good.

I was trying to induce— I'm trying to induce dark Friedberg.

Well, I brought it up.

Yes, I mean, someone bring me a tequila, I'll get going.

Yeah, let's do it.

Can we get a couple of tequilas?

I went on this podcast yesterday and And the guy was like, the first hour was middle of the road.

I was talking about tech and science.

And then like politics came up.

He's like, so socialism.

And he said like, you lost it.

And then you were like, he's like the energy went 10x.

And who is this?

Yeah.

So it'll come out in a couple of weeks.

But I was like, it got me going.

Okay.

I want to talk about physical AI one more time.

Yeah.

So one of, now that you're doing this, I saw a presentation the other day.

Someone showed like a video of a squirrel jumping from one tree to another tree.

And they're like, a tenth of a watt or something.

Yeah.

Like, the biology is tuned and it's so perfect in terms of its efficiency of energy utilization to do physical things.

And we're taking these like big things of metal and motors and like actuators.

And if you add up or you compound all of the inefficiencies in the system, it's like 1,200 watts to get the robot to walk 4 foot.

Like, break apart not just the software, but the hardware layer And where are we at in evolving things like actuators and the materials and everything else that's gonna make physical

AI work and scale?

Well, look, a lot with the questions you're asking are going down humanoid lane, which is like this thing.

And everybody talks about how do you do the hand?

It's almost like Terminator 2 type obsession with the hand, which is fair.

Like it's a very critical part of it.

I mean, look at the, I like to look at the Achilles, the quote unquote Achilles tendon of any of these machines.

And you're like, that's where the action is.

This, this is a couple other places.

Look, I'm in the non-humanoid space.

I mean, but mechanical engineers have been dealing with actuators and, you know, all the sort of electromechanical sort of interactions that make machines do certain things.

But like, I'm in the food machine space, so I can tell you how to open a paper bag.

And put

a bowl in a paper bag without tearing the paper bag.

But I am less into the, I forget the name, perio, they're the senses to understand awareness and touch.

I'm not in that game.

So when you're mining, you're like, you're not like, you know, you know.

You're not threading a needle.

You're not playing tennis.

Certain things may be equivalent to tennis.

So look, the bottom line is we're seeing, obviously all you have to do is go online and look at where the humanoids are going over time and how much better they're getting.

It's wild and it's happening so fricking fast.

But any humanoid demo starts with dancing and martial arts.

Yeah.

We're sort of down specialized robot lane, which is gainfully employed robots.

So I know I didn't totally answer the question on the technology piece, but— I just like, do you agree that there's probably like a big opportunity for venture money and research to

go into material science?

Actually, yeah, for sure.

Because if the physical AI stack manipulation and all of the related things around it, is massive.

And so if you get the software working, it's almost like the hardware has to catch up.

Yeah, we got a lot of investment.

There's a lot.

I do.

Well, actually, it was— it's good that you bring this up.

You know, one of the things you pioneered, um, at Uber was, um, capital as a weapon.

And you were very thoughtful about, hey, if we can take this capital off the table, then that's going to— let's call it what it is— it's going to be an advantage versus the competitors.

And these other competitors couldn't get that capital.

That's now, I think people have seen that playbook and they're like, hmm, someone was like, that was smart, let me try.

And it's at a different scale now that you've come out of stealth.

Yeah.

Now that you've got, and people are starting to understand, just starting today, how big your vision is, capital as a weapon.

Yeah.

This is, I guess, in your plan.

Yeah.

Well, I mean, here's the thing, right?

So capital as a strategic weapon, for its own sake is not a thing, but when it is actually a strategic weapon, then it is a thing.

And what I mean by that is like in the Uber world, early days, if you didn't have capital, didn't matter how good your app was because Masa's gonna put a billion dollars into your competitor

and you're gonna lose 20% market share tomorrow.

So a critical competency, in fact, to your world-class competencies, one of them has to be raising capital and you do it better than everybody else.

And if you don't, you are going to lose.

Let me ask one follow-up to that.

Yeah, you go ahead.

But the Middle East.

Yeah, I've heard theories the last couple of days that big capital seekers are kind of fucked right now because of what's going on in the Middle East with the Iran war.

Dubai, Qatar, Saudis are kind of going to close up the capital flowing to the US right now.

And is that real?

I mean, do you think that's a real threat?

So, look, our Middle East business was supposed to go public in January and the Saudi market went down 20% over like a 2-month period.

And that was like a massive damper on the situation.

Now, part of that was because the oil prices had gone down so dramatically.

And if you went into KSA, you went to the kingdom, everybody's like, we need oil prices to go up.

That's the other side of the equation.

So I don't know what ha— look, I don't, I'm not in the market raising money right at this moment.

And this is a 2-week-old thing that I, you know, look, I see the news just like everybody else and I'm not out there calling while a war is going on and saying, hey guys, you got some

money?

So I don't know exactly what's going to happen, but if you are an optimist and you're like, okay, this isn't, this is not going on forever, just like The tariffs,

it was the end of the world, and then it wasn't very quickly.

If you're an optimist about this situation and it won't be the end of the world, maybe even a better world, then we get to a better place.

And I think progress, abundance, the golden age happens.

And a lot of it is about all the things that are happening in AI, in physical AI, and just the productivity gains that are coming in very massive ways.

Yeah.

Yeah.

It was shock, shock and awe, and then, hey, now we've got a steady state.

And let's hope that's what happens in Iran, is that we can depose these evil dictators and replace it with something a little more stable.

And related to this, before we wrap, they're going to China, there's a big trade deal being negotiated.

What do you hope comes out of this Chinese thing?

And what did you learn in China?

What would— yeah, what would you learn?

And what do you think would be great for America?

Like, what would you like to see and be like, man, that's going to set us all up, no more Look, here's the thing.

If you go to China right now and you go and just take a tour of the manufacturing that's going on there, just the manufacturing base,

the cities, especially if you've gone to China for a couple decades in a row,

you're like, "Damn." Yeah.

So let's just do two things.

You go to Shenzhen, which before felt like Kansas City, but 50 years ago and really humid.

Which I guess Kansas City sometimes, but you go there now and it's like one-upping Singapore,

right?

Or so that's the city view.

You're just experiencing a very awesome, you're like, this is advanced and you just get the vibe and it's everywhere.

And then you go and you start seeing the manufacturing base and you see what like Xiaomi is doing or, any of the other— there's so many scrappy guys, badass guys everywhere, and you're

like,

'F— they're hungry.' So does anybody remember the 2008 Olympics in Beijing?

Anybody?

Does anybody— this is a little bit— you're down a rabbit hole.

Does anybody remember the opening ceremony?

And you're like, 'These mofos are taking over.' At least that's what they want to do.

That shit's happening.

So I don't have any issue, or this is not negativity for me.

I'm like, these guys are killing it.

The best idea is winning.

They're fiercely going after truth and progress and they're making shit happen.

Let's step up our game.

Okay?

But we can also have a friendly game.

We don't have to be like the Detroit Pistons in the '90s.

Yes.

Don't go into the stands.

Yeah.

Yeah.

You know, there's a way to do this right.

And there's a way to do it like adults.

I hope that's where we would end up.

I have an employee who, 'cause we, for a long time, we're the largest kitchen builders in China.

I have an employee in China, has an American wife.

Okay.

They both live in China.

They're both from China originally.

Okay.

but want him to, it would be great for him to work here on some things I'm doing.

It's very hard to make that happen right now.

Now that's selfish.

Like I, like maybe selfish, like I'm like, there's a person I've been working with for over a decade.

I'd love to continue here.

Maybe there's other bigger picture items that I'm not dealing with.

I'm not the geopolitical guy, but I'd love for them to be sort of

good relations and good, like, if you have a significant other who is an American citizen, like, do we have to make that hard?

As an example.

Some normalcy would— Something, you know, I'm just saying.

Now, I agree, like, there are ways to do immigration properly.

Like, we effed it up super bad.

Don't even get me started.

But there's also, there's good migration too.

Like a lot of great innovators

all over the place came from other places for their own version of the American dream.

God bless.

Friedberg.

And we don't have to, that doesn't have to be a negative thing.

And so I'd like to see more of that.

And yeah, China's wild.

So let's keep our eye on the ball and let's give 'em a run for their money too.

Give it up for TK.

All right, well done, brother.

Good to see you, brother.

Wow, Michael Dell, my lord.

Texas native.

Michael Dell.

Yes, born in Houston.

Well, I missed the opening.

We jumped to the music, but you started Dell Computer here in Austin with $1,000.

42 years ago in my dorm room at Dobie at UT.

About 10 days before I finished my freshman semester.

Amazing.

And it's been working out pretty good.

Yeah, there's been some bumps in the road, but generally, generally worked out okay.

Yeah, we'll have about $140 billion in revenue this year.

So yeah, it's okay.

It compounds over time, doesn't it?

Yeah.

Yeah.

You know, you start small and just keep adding, and there you go.

That's how it goes.

Yeah, it's just that easy.

But why Texas?

Like, I think this is an important thing.

We're in Austin.

Jason lives here.

David Sachs lives here now.

More people are moving from California to Austin.

Why Austin?

Why Texas?

Why does it work here?

And is it getting better?

Is it just always worked?

You know, I think Texas has had a

you know, low-tax, pro-growth

environment for a long time, and pro, you know, sort of progressive business climate.

And, you know, if you sort of look at the growth of the Texas economy relative to the rest of the United States without Texas, you know, Texas just kind of looks like a better version

of the US economy.

And, you know, now you've got—

Austin is sort of just about in the top 10 cities in the United States.

So you've got—

when that happens, you'll have 4 of the 10 largest cities in America in Texas.

1 out of 10 children born in the United States born in Texas.

More New York Stock Exchange companies in Texas than in New York or anywhere else.

And, you know, you've got the University of Texas here in Austin, which I always think of as kind of the wellspring for a lot of the companies that are here, certainly ours.

And, you know, a long history of

innovative pioneering spirit and entrepreneurship.

And it's been a fantastic place for us.

And part of this, I think, Friedberg and Michael, is what's happened in the other great cities, or what were once great cities.

My hometown, New York.

I got to spend 10 years in LA and the last 12 in the Bay Area.

And what's happening there is incredibly un-American, and they're decelerating when compared— I think maybe the gap maybe, and the disparity from these

two locations has gotten greater.

Yeah.

And you're seeing a lot more people say, life there, here in Austin, seems a lot better than the life I'm living in New York, LA, or in the Bay Area.

Yeah, well, I've got a lot of new friends and neighbors, you know, that have come.

And certainly, I mean, if you look at the migration statistics, Texas has attracted an enormous number of people.

And look, I mean, when you look at the environment here and compare it to the other kind of situations that are going on, it's very attractive.

But, you know, it's kind of been great for a long time.

So

it's not really news to us that have been here a while.

Yeah, Elon had a great experience when he was building the Gigafactory over here.

They let you do stuff here, basically.

Yeah.

They let him build it, which he said was like an incredible experience for him because in California they didn't let him build these factories.

In fact, the Tesla factory set in Fremont was just an old ancient factory that he was able to retrofit.

So there's something going on here as well with the data centers.

And that's actually, I think, very close to what you're working on at Dell.

Maybe you could talk a little bit about the data center boom that's going on in Texas that maybe people aren't paying attention to?

Sure.

Well, there's, you know, obviously been enormous build-out of AI infrastructure.

And that requires, you know, lots of new data centers, lots of power.

Texas, you know, has an enormous advantage there relative to other states.

A lot of power, a lot of land.

And it's And you can build stuff, right?

So there's been a massive build-out, particularly in some of the cities and towns in West Texas where there's not a lot of population.

And so they're not really too opposed to having data centers out in the middle of nowhere where there's land and power.

And so,

yeah, I mean,

the demand for tokens is enormous.

You know, we've been building these AI data centers, not just here in Texas, but around the world.

And, you know, the growth in that has been tremendous.

You know, we, we introduced the first H100 server, it was literally a couple of weeks before ChatGPT was announced.

And, you know, the progression of our business in that area sort of gone from like $2 billion to $10 billion to $25 billion to this year, it'll be like $50 billion.

So, so tremendous growth.

And when you think about what these models are creating,

there's this phase change that's happened in computing, right?

We had 60 years of calculating and computing.

Now we have machines that are thinking and helping us think.

And so the demand for that kind of intelligence.

And, you know, the models are amazing, but they're also the worst they'll ever be.

And they continue to improve.

And so we just see

a lot more demand than supply.

And it's happening not just in the hyperscalers and the cloud service providers, it's happening in 4,000 enterprises where we're building these, these Dell AI factories It's happening

in sovereign AI, you know, like Palantir.

And, you know, people want to protect their data but also use AI on it.

They want to bring the AI to where their data is.

And, you know, when this kind of started a few years ago, we had some

really sophisticated, uh, large companies— think of like Fortune 100— and they started, you know, buying these AI servers from us and And they kind of knew what they were doing, right?

And we said, well, what are you doing?

And they were kind of taking and building their own models.

They were taking open source models.

They were running them.

Some of them were algorithmic traders or

derivatives of machine learning.

And of course, they needed a lot of help in doing that because it was sort of a complicated thing.

So about 2 years ago, we put together this product that we called the Dell AI Factory.

And now we've got 4,000-plus of these, and it's kind of running rampant across enterprises.

How do you think about

the payback time on the investment that's being made?

The administration put in place this accelerated depreciation rule.

Yeah, that's very helpful actually.

Yeah.

So just for folks to understand that a little bit, like if you spend $100 billion this year building data centers and buying infrastructure for those data centers, you get to write

off 100% of that this year.

Correct.

To deduct it.

So you don't pay taxes, you pay way much fewer taxes.

And that's in place for 10 years.

I think that's a 10-year deal.

Right.

Right.

Accelerating the investment.

How much is that helping?

Versus how are you seeing folks rationalize the investment relative to the return they're going to make and over what timescale?

This is still the big question.

Is the money really there?

The hyperscalers, maybe they're starting to come up, but end usage, end states, are we kind of, hey, wait and see, we don't know yet, or folks are getting 20% ROIC starting in year

1 after they've made the investment?

I can tell you in our business, in our company, we definitely see plenty of use cases where the ROI or the improvement in productivity efficiency is 20% or greater.

Right away it gets there.

I mean, it, you know, it's not like you just hit a button and you get 20%, right?

There's work required in thinking through the processes.

And it's worth a little bit describing that.

So, you know, when you have a any company,

its processes and tools and technology are a function of what was available at the time it created those things.

And so what you sort of have to do is step back and say, all right, what's the trajectory of the improvement of the tools?

What outcome are we trying to create?

And now let's simplify and standardize the processes, get all the tools together, get all the data together, and then apply the technology.

And this really has to be done in kind of a top-down way.

You can't sort of do it spontaneously, you know, in, in silos are not going to spontaneously improve themselves.

And often that means that you're completely changing the way the organization works.

It's like a wholesale rearchitecture.

It's a, it's a reimagining of the way a company works.

And, you know, I mean, the way I described this to our our team about 3 years ago is, you know, we were going to have a new competitor 5 years from now— that would be 2 years from now—

you know, that was in every business that we're in, except they were going to be faster and more innovative and more successful and lower cost, and they were going to put us out of

business.

And the only way we were going to prevent that is, is we're going to become that company, and here's how we're going to do it.

And it excited some people, it scared some people.

But I actually believe that that's

what's going to happen.

And so we've been dramatically changing our business.

I would say the biggest benefit by far is speed.

We're much faster at being able to apply innovations.

And so you look at our infrastructure business last quarter grew grew 73%.

Well, that's

kind of unusual for a business of this size.

And, uh, you know, this quarter we guided that it would grow even faster, like 100%.

So you've lived through a couple of paradigm shifts here.

The PC revolution, obviously you led that.

And then you, of course, had, you know, client-server, the network revolution, online, uh, Internet, mobile, cloud, mobile.

Yeah.

So each one of those, we saw massive disruption.

We were talking in the green room about, hey, we used to have a typing pool.

There was a mailroom.

All these things got abstracted away by the PC and networked PC revolution.

But it took a decade or two.

And this one's happening a lot faster.

Yeah.

Yeah.

This one, I think it's, it's like, you know, a quarter is like a year.

Maybe it's 5 times faster or something like that.

But But back to your question, I, I would say maybe 10 or 15% of large companies have really figured this out, and the rest of them are kind of fumbling around.

And, you know, there's a tendency when, when you hear about a new technology to like, oh, let's just, let's just go do it, you know, show the boss, hey, we did AI, you know.

The board said we got to do AI, we got to do AI, guys.

Are you proud of me, boss?

You know, yeah.

Yeah.

Um, and look at what I made.

Exactly.

And I also think, you know, it's an important point about, about, uh, this, which is, you know, the barrier to technology adoption is, is not technology.

It's culture and leadership and courage, right?

And, and so willingness to change.

And yeah, and, you know, if you, if you're in a business that you don't think is changing very much, or Change is really hard, right?

You have to, it can be very uncomfortable.

You're like, well, we're gonna stop doing that.

Well, we don't need this anymore.

Particularly if your bonus is dependent on not messing things up.

But let's use the internet as an analogy, which you saw up close.

There were businesses that were internet transition successful.

They made the transition.

Maybe Macy's.com versus Sears Roebuck, right?

Right.

Maybe Macy's did a better job of taking advantage of the internet than Sears.

But then there was internet-native businesses that seemed to blow them all out.

And maybe Amazon's a good example, or CSN stores, whatever they became, Wayfair, et cetera.

What's the right way to think about this evolution in industries generally?

Are we gonna have

businesses are going to transition successfully and those that aren't, and they're going to die?

And is this really going to— are we going to see AI-native businesses in every industry come in and just disrupt everything?

I believe we will.

And certainly, you know, when you talk to the Collison brothers at Stripe, they'll tell you that the rate of growth of the 2025 cohort companies is about 4 times faster than the 2018

companies.

And so every year, the new batch of companies are growing faster and faster because they're starting with all these new tools that— because they see all the new companies on their platform.

Exactly.

And so when you think about an incumbent company that already exists, it has— let's say it's got brands, it's got balance sheets, it's got customer relationships, whatever stuff.

But that's sort of like, those are expiring value assets.

If it doesn't change quickly and get onto the other side of this, I think it will go out of business, which is exactly the speech I gave to our team 3 years ago.

And

I think

you have to be

bold and you got to go make those changes to to not only survive this, but to thrive.

And, you know, I think about it as how do we prepare our company to be ready for the 2030s?

Right, isn't it like it's much more,

it's kind of the storyline, there's more to do than there ever was.

It's like when the internet kind of came around, Sears doesn't just need to sell locally, they can sell to the world.

Well, sure, I mean, this is the point.

And the AI lets everyone do everything.

When we have better tools, we can do way more things, right?

And when I hear people say, oh,

maybe we're just going to have all these great tools, and we won't do more things.

We'll just do the same things with fewer people.

It doesn't sound right to me.

I mean, there'll be some of that.

But I think most of it will be we're just going to do a whole lot more things.

We're going to solve a lot more problems.

We're going to accelerate scientific discovery.

That's the thing I'm most excited about.

We're, we're gonna invent all sorts of new things.

We're gonna solve all sorts of problems that haven't been solved.

And you know, that's, that's super exciting.

What do we have wrong on infrastructure?

So

the original build cycle looked a lot like everything's in a data center, everything's gotta sit there.

That's where all the intelligence, it'll all be in these kind of hosted proprietary cloud models.

Do you think that it's open source?

Is it distributed?

On the edge?

Where does the intelligence, where does the inference sit?

And how does that really change or kind of re-architect the industry, do you think?

It's really all the above.

I mean, it's not like there's one answer.

I mean, certainly if you go to

any industrial company or natural resources company, advanced manufacturing, retail, logistics, there's tons of inference at the edge.