Eric Vishria - A Decade of Lessons Investing in Software & Hardware

**Patrick O'Shaughnessy** (0:01)
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**SPEAKER_2** (1:53)
Patrick O'Shaughnessy is the CEO of PositiveSum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PositiveSum may maintain positions in the securities discussed in this podcast. To learn more, visit PSUMVC.

**Patrick O'Shaughnessy** (2:20)
I love asking you and all your partners this every time we hang out, which is, okay, you've got these singular investments. You don't do that many investments each per year.
Then the ones that go on to work, so far Sierra and Fireworks certainly are. You get to learn so much about the world through the lens of the company. So I'd actually love to do both of those, maybe starting with Fireworks. What do you know or what have you learned about the world and how it's reordering itself based on watching the world through the lens of Fireworks that would maybe be surprising or interesting?

**Eric Vishria** (2:49)
One really interesting thing is these models are big. These are two trillion, three trillion, four trillion parameter models. It turns out running those models is damn hard, and running them efficiently is like super hard. The way to see this, and everybody can see this, which is everybody from AWS to Azure, to GCP, to the Neo Clouds, to the Fireworks based on Togethers of the World, like all of them.
They all run these stock open source models that are available in their developer pools and everything else, and that's what it is.
The performance difference for a Fireworks versus a Cloud Provider is like 5x, and that is just the speed performance. Then you add on top of that throughput, which is not visible externally, it's only visible if you know the economics of these businesses, and you're like, wait a minute, this is the same open source model with the same NVIDIA hardware, and there's a 5x performance difference and a multiple x throughput difference, and the way to just simply understand that is these companies are paying the margins of the Cloud Providers and running on top and making money. How can that be? My big takeaway on it was, wow, this stuff is actually really hard to run. It's just really hard to run, and there's a lot of expertise involved in doing that, and it's this very specific expertise that exists. And it is the kind of thing that when you look at it as an investor from the outside, and we should talk about the early days of AWS, but when you look at it from the outside, it's like this is a commodity. This is just like pass-through resale. Scale game. Yeah, scale game, like whatever. And you're like, oh, wait a minute. No, it turns out it isn't. It isn't at all.