Grok 3, AI Memory & Voice, China, DOGE, Public Market Pull Back | BG2 w/ Bill Gurley & Brad Gerstner

**Bill Gurley** (0:00)
I witnessed almost daily people that are either in government or even friends of ours who say we have to win the AI war with China. And I don't know what that means. Like, I can't imagine an end state where we control all the AI and they don't have any. It's already too late.

**Brad Gerstner** (0:19)
It's too late.

**Bill Gurley** (0:20)
And they're smart. Like, I think that's true.

**Brad Gerstner** (0:21)
And the reality is that we just need to focus on running our fastest race. We need the Teslas, we need the Open AIs, we need rockets that land themselves, we need all of this. But to think that they're not going to have BYD building great cars, or they're not going to have DeepSeek building great models, or they're not going to have rocket companies that copy us and can land themselves, like, that would be naive.

**Bill Gurley** (0:43)
It's remarkably naive.

**Brad Gerstner** (0:57)
Bill, it's good to be with you.

**Bill Gurley** (0:58)
Good to see you.

**Brad Gerstner** (0:58)
I mean, we're in this, wait, should we tell them that Steve Ballmer gave us this man cave?

**Bill Gurley** (1:03)
It's a private cave in the intro.

**Brad Gerstner** (1:06)
I mean, the truth of the matter is, the hardest thing about this pod, I love this pod, but you and I getting our schedules to match and actually getting together. And so I've gotten a ton of feedback, I've seen on Twitter people like, when are you guys gonna record the pod first? Thank you for the audience encouraging us to do this, because I love doing it.
Know that we would love to do it more, it's just a little challenging to get together and to do it. We have an ongoing dialogue, I think pretty much 24 by 7, about this stuff going on in the world. And then occasionally we get to get together and share it with you all. So I don't know, I thought maybe today, Bill, we'd kick it off with Grok 3 So we're now like 10 days out since Elon and his team, unveiled in pretty record time, an unbelievable model. And so maybe you can just help us zero base where you thought, what you thought when the model came out, where it stands, kind of in the rankings. Then we have a conversation about kind of the impact and what it means.

**Bill Gurley** (2:07)
So we've talked about this in the past, but everyone in the ecosystem was super impressed with how quickly they built the Memphis facility.

**Brad Gerstner** (2:16)
Exactly.

**Bill Gurley** (2:17)
And how big it was and is the largest, contiguous cluster in the world. And there was a lot of chatter about that ahead of time.

**Brad Gerstner** (2:25)
Yes.

**Bill Gurley** (2:25)
And I can remember some of the investors there saying, this will prove that pre-training still has headroom because this will be the biggest cluster ever trained on. Correct. And you can decide what your expectation was after that kind of line in the sand. The things that happened, I mean, I think the generic way of saying it is like, it went right up near the top of all the benchmarks.

**Brad Gerstner** (2:52)
Right.

**Bill Gurley** (2:53)
They had on some, not on others. Some people argued about whether they-

**Brad Gerstner** (2:58)
The reasoning component, the beta-

**Bill Gurley** (3:00)
Or did they cheat or over tune to a benchmark? But I don't think it matters. I think the biggest positive takeaway is there's a new player in the model market. And we had often- A lot of people said this is a sport of kings, there's only going to be so many players. Correct. There's a new one in the market that invested what they needed to do, that has access to capital, has a data asset that they argue is important and special, and was able to get at the front of the race. Let's just call it that.

**Brad Gerstner** (3:29)
Right. And you're looking at- We're looking at this artificial analysis that just shows, I mean, there's this clustering here in the upper right. Deep Seat kind of got up there a couple of weeks before. You had Grok. You know, what's interesting is they all seem to be coalescing in an impressive way around the top of these benchmarks. When we say they all, I mean, we're really only talking about five or six players who have a chance to be in this game at this point.

**Bill Gurley** (3:54)
Correct. Correct. And I saw people who interpreted Grok's fast rise as proof that pre-trainings still got legs. And to me, I kind of had the opposite reaction, which is I felt like they just slammed up against the ceiling that's holding everyone in.