(Preview) The Hidden Benefits of Bubble Economics, Microsoft and OpenAI Make a Deal, Notes on Taylor Sheridan, Sora, and Nexperia

Hello, and welcome to a free preview of Sharp Tech. Hello, and welcome back to another episode of Sharp Tech. I’m Andrew Sharp, and on the other line, Ben Thompson. Ben, how are you doing?

I’m doing fantastic. You look great, Andrew. Why do you look so good today?

Coming in nice and crisp today. A lot of good things happening in the Sharp Tech universe. You want to tell the people?

I have fiber. We have functional internet.

No, no, no. I think the thing to emphasize is that Ben didn’t have fiber internet for the last month or two, and so in some of the recording sessions, we were dealing with internet from 10 or 15 years ago. But now we’re coming in high-def, with no interruptions to any of the podcasts. I’m very excited about the future.

No, you understate how dire the situation was. I acquired—I bought the location that I’m at because one of my best friends literally lives next door. This, actually, I learned totally by accident. I moved into a place in Taiwan to be closer to the kids’ school.

Mm-hmm.

I moved into a place in Taiwan. Everything is a condo, right? You’re all in sort of high-rises. We’re in a 15-story building. The building we’re in has two units per floor. Literally next door ends up being this other guy from Wisconsin, who ends up becoming one of my best friends. We still hang out all the time. You’ve had the pleasure—

I’ve met him.

Yeah.

He’s great. It’s amazing that you ran into each other like that.

It is.

Yeah.

And I realize, actually, a real fundamental key to happiness is, in fact, location, location, location.

Mm-hmm.

Now, usually location is about weather, and I think weather does contribute to happiness. You should ask for an update on my weather feelings in 2 to 3 months.

Yeah. We’ll check back in February to see where your head’s at there.

But the other one is being close to friends, which is fantastic. So I got a house that is literally next door to one of my best friends. I did not think about or look into the internet situation at this house.

Mm.

This particular neighborhood was built 30 years ago or so, which means most of the people here are older at this point and maybe don’t appreciate what their expectations should be as far as internet goes. It’s a little bit remote, and their only option is the local cable company. The local cable company knows they’re the only option. There is fiber sort of across the street. I heard they built that out. Very few people took it up, I think, because of the dynamics that I’m talking about, so they just stopped building.

So I’ve basically had nonfunctional internet. I talked to technicians. I’ve had multiple technicians come over. They’re like, “Yeah, your neighborhood’s totally saturated.”

Impressively dysfunctional internet. Not just slow internet, but internet that would shut off inexplicably—

No. It goes down multiple times a day, all the time.

And just be down for 45 minutes—

Usually only for a few seconds.

Yeah.

Going down for a couple of seconds is not great for recording a podcast, okay?

Yeah.

So it’s not a few months—it’s been a while since I’ve been here. You actually had to remind me, “Make sure you switch to Starlink before every podcast.”

Yep.

Because at least it’s reliable, even if theoretically the speeds are not. So, first up, I love Starlink. God bless Elon Musk.

Thank you, Elon.

Yeah.

Yes.

No, it’s amazing. I have one on my house. I have a portable one that I’ve talked about before, using it around. But yeah, it’s absolutely, again, another example to get me back on the sort of anti-monopoly train, albeit a real sort of monopoly with wires in the ground—

Wires in the ground.

—and when there’s one option, they don’t need to fix it and make it better. So I’ve really spent an unfortunate amount of money. The way you can get fiber, you’re not going to get it from AT&T or whoever. However, there are business fiber companies that will build out to various locations if you’re willing to pay for it.

Mm-hmm.

Yeah. Well, you’re running a business over there—

I am.

—in addition to living next to your best friend.

Yes.

So it makes sense, and here we are.

It’s funny, though. I did appreciate and love every time that our podcast cut out for the last 3 months, because it just reaffirmed that this ungodly amount of money that I was spending was going to be worth it.

It’s funny because I would try to tell you, “It’s not that bad,” and you were like, “Don’t tell me that.” Then I would have the freedom to be honest and be like, “Ben, I didn’t hear what you were saying for about 4 minutes of that podcast.”

Well, maybe this is going to be a big problem for you. You’re going to have to have some accountability to actually listen to my ramblings when I’m going on a monologue.

There you go. A lot of pressure going forward.

But yes, back in the world of fiber, sincere thanks to Starlink. It has basically made Stratechery and Sharp Tech possible for the last 5 to 6 months. As good as it is, it does not compare to the clarity that we have right now. It’s amazing.

Mm-hmm.

Yes.

It’s great.

Yes.

One other question on your house: This is your first Halloween back in America. Are you prepped for the neighborhood? I feel like you’ve got a couple [?].

Full-size candy bars, baby. Full-size candy bars.

You go full-size?

Absolutely.

Wow.

You’ve got to make a good first impression.

Good.

Yes.

Good to hear. I love it. I’ll be trick-or-treating more than handing out candy with Charles, who’s about 2 and a half years old. I’m very excited for his first real trick-or-treating adventures.

My son was asking, “I’ve never really gone trick-or-treating.” I mean, they had it in Taiwan. The building always had it, so you’d go up and down the floors and get it. Then there’s one in the neighborhood where we’re at called Tianmu.

Okay.

All the stores will have stuff. It’s not quite the same as sort of walking down a busy street and going to a convenience store and getting some piece of Hi-Chew or something like that.

Yep.

The AIT, the sort of American embassy, had a neighborhood up on the top of Yangmingshan with traditional houses, and you could—

Ah.

—actually go door to door. But again, it was very much a case of, “This is a thing you’re going to do.” The idea of just going door to door in your neighborhood and it being sort of a thing—yeah, it was remarkable. You’re like, “I’ve never done that before.” It was kind of interesting. It’ll be cool.

So, do you do the Christmas light decoration thing, by the way?

What’s that?

Do you decorate your house with Christmas lights?

Oh, well, yes. I was wondering whether there was some special Christmas light thing. Yes, I do put Christmas lights on the house.

Okay. No, just thinking about planning. It’s very funny where all this stuff that is very normal, I’m sort of considering for the first time. So yeah.

A whole new world here in the United States of America.

1. Substrate Challenges Chip Manufacturing

Speaking of the United States of America, we’re going to begin the show with a note from Greg, who wrote in Wednesday responding to a digression of yours on the last episode as we were discussing American resilience. Greg writes, “It’s time for some American ingenuity, huh? Ask and you shall receive.” Then he links to Substrate.com before asking, “Does this have any legs?”

Ben, as fate should have it, you interviewed the CEO of Substrate this week. Delightful conversation. We’ll put a link in the show notes for people. And for anybody who hasn’t been following the news, Substrate is a company that claims to have developed an alternative manufacturing process for semiconductors that would cut the manufacturing cost in half by channeling light from a giant instrument known as a particle accelerator through a tool the size of a car. That technique would allow Substrate to print a high-resolution microchip layer comparable to images produced by the world’s leading foundries. I’m cribbing from The New York Times for that synopsis, but more importantly, Substrate is an American company. What do you think? Does it have legs? Does this idea have legs?

I don’t know.

Responsible answer.

Yeah. It’s really interesting because I got some pushback on this interview saying, “You didn’t push on any technical details. There are so many things that are going to go into this,” all of which are fair and appropriate. Part of the reason I’m not getting too much into technical details is that he wasn’t going to share any of them.

He couldn't, right. Yeah.

Well, yeah. To the extent there's something real, it is obviously a massively valuable secret, whatever they've figured out.

Mm-hmm.

2. Lithography Drives Chip Costs

The concept of X-ray lithography is not new. One of the weird things is that we talk about 1-nanometer, 2-nanometer, and 3-nanometer chips, which is mostly a marketing term. Basically, the idea is that the width of the lines you're drawing and the distance between the lines are getting smaller and smaller all the time.

Yeah.

The big breakthrough was EUV, which reduced the width of light to 13 nanometers. It's like, wait, actually, the light is wider than the lines? Yes, that is true, in the way that it's happening. But what happens is they do this crazy focusing with all these mirrors, and even when they get smaller, they sometimes have to go over a chip multiple times, called multi-patterning. Every time we do that, it's more complex, it's more expensive, and there are all these sorts of challenges.

Lithography has come to be by far the most difficult and most expensive step in the process. It's the number-one driver of why foundries are getting more and more expensive. We're in the $20 billion range. The next generation, we're going to be in the $30 billion to $50 billion range. I think, as you know, it might be in the $30 billion range right now.

And when we say lithography, we're talking about ASML, effectively, right?

Yes. They dominate the space. The story of how they came to dominate it is that it used to be Canon and Nikon. I think particularly Nikon was big in this space. They were very closely aligned with Intel.

There was a period when ASML was the upstart, and ASML and TSMC have always been sort of hand in hand. The rise of TSMC is the rise of ASML, and vice versa. A big factor—I think I might have talked about this on the podcast previously—was the shift from 200-millimeter wafers to 300-millimeter wafers.

Mm-hmm.

The physics of it changed. They're larger, right? Intel basically didn't care. This actually came up on the Intel earnings call, where the CFO said, "To be honest, we didn't really care about yields before."

Intel was always so far ahead and had such a monopoly and could charge such high prices that they didn't really need to care about throughput and efficiency. As long as it was good enough and they got the levels they needed, they could charge high prices and it would sort of pay for itself.

Mm-hmm.

One of the huge challenges they have in becoming a foundry is that you have to maximize throughput. You have to get as much stuff through as possible. Your yields have to be high so that you can be competitive on pricing. You're not internalizing everything; you have to charge a competitive price relative to TSMC or whatever it might be.

Right.

Their throughput was never actually that high—how many chips were going through per hour or per day, or whatever it might be. This is going back about 20 years. When you had this shift, the Nikons of the world—I can't remember whether it was Canon or Nikon that was the big one at the time—said, "Sure, we'll do bigger wafers." But they didn't rework the entire process.

If you're moving a larger wafer, you just do it more slowly because of the centrifugal forces and things like that. ASML actually completely reworked how their machines worked, hand in hand with TSMC. It's a new wafer, a new size; you have to rethink the whole thing so it can go through faster, so you can actually achieve the benefits of having a much larger wafer, which you can put more chips on.

If that larger wafer goes through much more slowly, which is basically what was going on at Intel, you're not getting any gains. You're just doing a bigger wafer more slowly. ASML and TSMC completely reworked this process to get the volume and the gains from going through it. There are other sorts of stories here.

More volume and better yields. Yeah.

Yeah.

It's kind of unbelievable.

There was a big earthquake in Taiwan in 2001, I believe it was. ASML got in there with TSMC and got the machines up and running in a matter of weeks. The Japanese machines took months. That was another sort of moment of this shift in balance and power.

All this culminated with ASML buying some of the critical technology for EUV way back when. We already discussed this. The idea came from Japan, actually. A lot of it was propagated by Intel and the U.S. government. ASML did the hard work to bring it to market, and now it's totally dominant. No one else can make an EUV machine, but they're extremely expensive.

I was going to ask: Ballpark, are we talking about $200 million?

I was like $500 million for the high... I think the current ones are around $250 million, but the next generation are closer to $500 million. I'm pulling these numbers out of my rear end, so—

And the foundry needs, like, 10 of those lithography machines?

Yeah, you need a bunch of them, right? And so—

Yeah.

So that's where the cost is in all of this.

Well, everything's expensive, to be clear, but the biggest center of cost, for sure, is lithography. I think it's around 30% to 35%, and that's much higher than it used to be.

The idea here is, what if we could do this instead of using blowing up tin, creating this artificial light, focusing it through these crazy mirrors, and drawing these lines? What if we could use X-rays to do this instead?

Mm-hmm.

It's actually even thinner, so theoretically you don't need to do multi-patterning, and it can just be cheaper overall. Now, a lot of the details are unclear, like I said, in terms of how it's going to work. The big question for X-rays has been a consistent light source, or a consistent source of X-rays, which they claim they're getting.

Okay.

They're using a particle accelerator to do it, which sounds absolutely crazy. There are questions about the X-rays breaking through and disrupting things. Does it interrupt the doping process, where you're actually infusing these transistors to make them more performant? There are all these open questions about X-rays that were faced in the '80s and '90s, and it was decided that ultraviolet light was actually a better solution with these mirrors and these optics.

That's where the industry went. Now, this theory—that it was an idea that didn't work 40 years ago but might work today—I think in principle is totally plausible.

Yeah.

I also think it's totally plausible that no one in the current semiconductor chain is going to go in this direction because they're all pot-committed to the way things work today, and they're under pressure as it is to make more and do more.

TSMC, as I wrote about this week, is kind of almost the brake on the AI bubble. Yes, they're building a ton and trying to support this. If this whole thing were to pop, they're the ones holding the bag because they're paying all this money for all this equipment.

A lot of upfront investment based on the ecosystem exactly the way it is today.

Right. It just—I mean, if it costs $30 billion to build a fab and that fab is not filled and not running—

Yeah.

—you are in big trouble. So this idea, number one, that an old idea could be possible today when it wasn't possible previously makes sense to me.

Mm-hmm.

The idea, number two, that no one in the current chain is going to do it also makes sense to me. And this idea that if you're going to do it, actually you need to not just make a lithography machine but be a foundry also makes sense because it—

So you say that makes sense. I'm very curious, because that's where I found myself raising an eyebrow. James Proud explained it to you, but Substrate—they're not only—

James Proud, yes.

James Proud, excuse me. They are not only trying to disrupt ASML but also TSMC. That seems very ambitious, and everybody—

It does.

—who's tried to displace either one of those companies has failed over the last 20 years. So why? Why are they building a foundry in addition to this lithography tool?

3. Substrate Must Rebuild The Foundry

Well, the key step—this is where I go back to that TSMC and ASML hand-in-hand partnership—is that the entire process has been optimized around this central step of lithography. It's the most expensive piece. It's the most complex piece. It requires the most precision, and everything sort of fits in around that.

If you're going to replace that, it makes sense that you actually have to rework the whole process, even if most of the steps are still the same. Those steps—you can buy the equipment.

It’s not like they’re going to reinvent etching machines, masking machines, or doping machines, or all these sorts of bits and pieces. But we already know the makers of these machines are happy enough to sell to whoever. The whole point is they’re selling to China. You’re using a lot of the same machines for trailing-edge chips as you are for leading-edge chips. Etching is going to happen at 20 nanometers, 14 nanometers, or 2 nanometers. Same thing—

Yeah.

—with a lot of these chemical coatings, all these parts. So it’s not that they’re going to reinvent every step, but if the key step is completely new, the way all that other stuff integrates into the process, it makes sense it would need to be reworked. And TSMC and ASML, it’s kind of like Windows and Intel, to an extent. It’s this hand-in-hand partnership that makes this all work, and if you’re tearing out one piece, you probably can’t just drop it into TSMC. And if you’re Intel—

Mm-hmm.

Even if you’re behind, all your expertise is still on the old way of doing things. Are you going to completely rework this? It makes sense you sort of have to start from first principles.

Yeah.

It’s also totally insane, right? And the chances of success seem—number 1, does the X-ray lithography even actually work? Have they actually overcome all these problems? It’d be nice to see more evidence than we got, just to be totally honest.

Mm-hmm.

And number 2, are you biting off more than you can chew, right? On one hand, it makes sense that a Thiel Fellow who’s most well known for creating a sleep tracker would take someone totally on the outside—

You would need fresh eyes.

—that’s kind of crazy to do this.

Yeah.

On the other hand, this is the guy who’s going to do this, right? So—

Well, I will say for the record, James Proud was pretty honest about it. He recounted conversations with investors and said, “There’s a 1% chance this will succeed, but I’m going to operate with 100% conviction that it can’t fail.” He said maybe the percentages have gone up a little bit since then as some of the technology breakthroughs have come through. But by the same token, I found him more credible by his frank acknowledgment of how long the odds are for any of this to work.

For sure. So why talk to him now? I mean, there’s an element of press—why are you discussing it? He’s like, “Well, this is not going to be a secret for much longer anyway.”

Mm-hmm.

There’s also a bit where I’m sure they’re going to be raising money soon. I’m sure this is tied to it. Was Chetecri basically used as a vehicle to help them raise money? Probably. But number 1, I’m certainly cheering for him.

Yeah.

That’s, you know, I want to see that succeed. But—

Not only that, but on the last episode, when you were talking about potential breakthroughs in the way we make chips, I recall thinking, on this end of the line, I mean, yeah, it’s great to want things. I don’t know why you would ever mention that, because for me, it’s a good reminder that the technology we have today is not fixed. It’s easy to forget that all of this can evolve, and has, when you look at the history of technology over the last 40 or 50 years.

It does make sense that the tech will be in a different place 10 or 15 years from now. Or—

It—

—at least could be.

4. Bubbles Coordinate Innovation

It does. And a topic we’ve come back to a couple of times over the last few months is that it’s so fascinating to be in a bubble. I was aware of the bubble in the ’90s. I wasn’t working in tech; I was consuming lots of stuff that was coming from the bubble, often to my financial benefit, because all these people were insane. But to actually feel the dynamics internally—

Mm-hmm.

Bubbles, we intrinsically, I think, attribute a negative connotation to them. You feel this as an analyst: “Should I write about this knowing that it could pop tomorrow, and then you look like a dummy because you supported stuff and then it blew up?” Even if you know intellectually this will pay off in the long run, right? I was just—

Yeah.

—I was just talking to John on Dithering: Pets.com truly exists today. It also took 20 years, a massive recession, and a total, total dead, cold-frost ice age in tech. Bubbles are viewed negatively. And there is the theoretical construct—the Carlota Perez construct—of productive bubbles.

Mm-hmm.

We’ve also talked about this. What is going to be the productive payoff from this bubble? Ideally, it’s power generation. We actually spend tons of money on power generation. All the investment that goes into it ends up being kaput, and people go bankrupt, but hey, we have power plants that run for 50 years or 100 years, or whatever it might be, and that is going to be a positive effect, right? The railroad tracks were a huge benefit, even though everyone building the railroad tracks went bankrupt.

My beautiful fiber probably at some point is touching some dark fiber that was laid in the late 1990s. It’s amazing, and it’s great, and we have a great video podcast, right? I appreciate WorldCom and everyone else that went bankrupt back in the day.

Yep.

What is that going to be today? You have GPUs that aren’t going to last for 50 years, right?

Mm-hmm.

And how are we going to get the productive angle? This is where I keep coming back to Byrne Hobart’s book, which was also about bubbles. He called it Boom. We discussed it. I had an interview with him.

What I got from the book originally, but didn’t feel until really recently, is that one of his points is the function of a bubble isn’t just this infrastructure investment. It’s coordinated creation, coordinated innovation, coordinated invention.

Yeah.

Basically, you have a lot of people working on a lot of hard problems all at the same time. A lot of the ones that succeed are going to pay off the other ones. Everyone’s really dependent on everyone else also inventing things at the same time.

And you have, this week, this discussion of this creation. You also have all these tech company earnings where they’re like, “Yeah, you thought we were spending a lot last year?” “Full speed ahead. We’re spending even more.” And that spending—a lot of it’s going to NVIDIA. NVIDIA—some of that money is going to TSMC. A lot of that money to TSMC is going to ASML.

And there’s so much money coming in that it is suddenly making someone like Proud and Substrate seem—

Yeah.

—why not? Yeah, it might be a 1% chance, but the payoff of that 1% is getting so astronomically large that here’s all the money you need to do it.

You have this new chip that was just announced this week. There’s this thermodynamic chip where you excite the chip according to a probability distribution that you want. As it decays and goes back to a neutral energy level, it’s actually doing computation according to a probability curve that you set it to, and you can do things like image generation, at least in theory, 10,000 times more efficiently than you can on chips.

And you think about it: We’ve talked about the idea that our chips today, even GPUs, are 1s and 0s. They’re binary computers, and it’s kind of weird we’re using binary deterministic computing for probabilistic outputs, which is what AI is. The idea, in theory, that you’ll have a probabilistic chip that actually uses natural forces, uses—

Mm-hmm.

—thermodynamics to do computation, of course that’s going to be dramatically more efficient. Of course that could align with probabilistic computing to have a probabilistic decay in this chip that is actually doing your computation. It also sounds totally insane. Who’s—

Yes.

—going to actually spend the money to do this? In a normal period, no one is.

Yeah.

In a bubble, when companies are spending tens of billions, hundreds of billions of dollars, you have all this crazy going wrong. Suddenly, all this insanity seems more viable. And yes—

So it pulls the investments forward; it makes the—

It coordinates—

—the opportunities clear to everybody—

—the investments.

Yeah.

You have all this stuff happening at the same time. And man, Byrne really nailed it with this insight. And we embrace the bubble, right?

Mm-hmm.

This is why I don’t feel bad talking to James, asking, “Is it going to work out? Have I pushed him sufficiently on the tech, or should he share more?” Probably all this is true, but is this all going to blow up, where at some point we’re going to say, “Wow, we got a little crazy then”? Yes. Is the future going to depend on what emerges from the rubble that would never have emerged otherwise if that hadn’t happened? Also, almost certainly yes.

Probably yes. Yeah.

And it’s really hard to write about and to analyze because as an analyst, you want to be sure. You want to have—

Mm-hmm.

—clarity. You want to be able to follow logic.

And it’s kind of like—sorry, dude. I hope you’re doing your job listening in my very—

I’m listening.

—high clarity—

Don’t worry.

—as I’m rambling.

I’m here.

I’ve just been thinking so much about this. It’s kind of like doing probabilistic computing on top of deterministic chips. It’s kind of weird and—

Yeah.

—a little uncomfortable. There is a bit where I want to be a deterministic analyst who follows a logic chain: A to B to C to D to E.

Mm-hmm.

I had the pleasure of doing that for the first decade of Stratechery. Actually, a lot of the job felt very easy because I felt I could see very clearly what was happening. I just needed to articulate it.

I could do a daily update about Microsoft earnings or Google earnings dropping and very clearly tie it to the dynamics of Aggregation Theory and all these sorts of pieces.

Yeah.

Welcome to the nonlinear future, Ben.

Here we are.

Yes. No, exactly.

Who knows what direction it’ll go?

I feel like I’m trying to do deterministic analysis on top of probabilistic outcomes. We’re in a probabilistic world, not just in terms of AI, but in terms of the expected value of what’s going to happen.

Mm-hmm.

Is James Proud going to figure this out? I don’t know. Is someone else—

Yeah.

—going to recreate the chip fabrication process? I don’t know. Is it important and valuable that someone’s trying to do it? Absolutely. Would the funding and the desire to do it exist without the mania that we’re in? Probably not.

Yeah.

That’s super important and valuable, and it’s—

I mean, it’s unbelievable.

—pretty crazy to be a part of.

5. Chip Controls Force Innovation

A premise of our chip conversations for the last 2½ years, specifically the Intel conversations, is that it’s just not economical for anybody in the US to try starting a foundry today. It would be insane. It’s not—

Yeah.

—going to happen.

Yeah. It takes so long to move down the learning curve that, in the meantime, you’re going to go bankrupt 100 times over because China’s making chips. TSMC is making chips. You have old GlobalFoundries running; you can’t just jump to 2 nanometers. We talked about this with China, right?

Mm-hmm.

They’re going to move down the curve because the chip controls give them a motivation to be super uneconomical. In a world without chip controls, nothing happens. TSMC just kind of rules the roost forever.

On the leading edge.

Right.

Yeah.

Right. And because, again, why would you buy from anywhere else? That’s why, number one, the chip controls are actually a big forcing function, and China probably is working on stuff like this as well. I’m sure they are looking at whatever—

They’re working tirelessly.

—Substrate is looking at—

Yeah.

—with a high degree of interest, to say the least. I’m like, “What’s your security situation like?” It better be very high.

Yep.

But leaving aside the geopolitical points and the global competition aspects, the fact of the matter is we have way more investment going into this space than we would normally. In this case, it’s because of political considerations.

The point of the bubble is that, because of the mania, because there’s so much money at stake, and because everyone is pushing in the same direction, it’s also insane. I appreciated James Proud being like, “We’re an ideological company. We think the US should win.” And you look at that, it’s like—

Mm-hmm.

“Could we have a technical reason why you’re going to win? Why this should be a thing?” But that doesn’t sound that much different from the AI companies thinking they’re inventing God.

Yeah.

You guys are religious about this. And it’s like, yes, they’re religious about this. That’s why they’re spending crazy amounts of money with the belief that there’s going to be an AI takeoff. There is going to be AI that dominates the world. And you—

Mm-hmm.

—need religious fervor to break through, to break out.

To push forward.

Stratechery was easy for the first decade because the tech industry was in stasis, because we were just coalescing around these Big Five tech companies who were in their lane, did what they did, and it got a little boring, right?

I thought in 2020 and 2021, “When’s the end?” just because I don’t want to write about antitrust—

What are we doing here?

—lawsuits for the rest of my life, right?

Yeah, totally.

So I’m getting what I wanted, good and hard. It makes my job much more difficult. But it is—

Your brain is melting on a weekly basis, but it is very, very exciting. Stasis is a good word for what the ecosystem can look like when you look around at trillion-dollar companies that are firmly entrenched, and then you remember that there’s always more to the story, and the future tends to be nonlinear and more complicated than one might expect.

Right. It’s precisely because TSMC is so dominant that you feel like a company like Substrate has a chance, just because you can see how TSMC is not going to respond to this. I’m sure they’re looking on with interest, and if they ever get asked about it, they’ll mumble something or whatever it might be.

Mm-hmm.

There’s no way they can even explore or think about this. They’re so large, so pot-committed to the current thing that’s going on, and so dominant in the space that it actually makes it more viable for something completely new to come along because there’s not going to be a response.

Yeah.

So, again, I’m not making any pronouncements on the viability, on how it’s going to happen, or on what’s going to work. I think it’s exciting that it’s happening, and all this stuff ties together.

Right.

The big tech company spending, the cost of these machines, and these crazy moonshots—again, at a 1% expected return, that overall number, if it succeeds, has to be really, really large. And we’re getting to the point of those numbers being really, really large. All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharptech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Stratechery and the Stratechery Plus bundle. Check it out, and if you've got feedback, please email us at email@sharptech.fm.