Inside Hudson River Trading's Blistering Token Burn

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Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Tracy, we did another one of our live shows, this time, our biggest show ever in New York City. Our biggest show ever. It was absolutely amazing. We did it at City Winery in New York. I think we had over 300 people in the end. Yeah, I think it was like 350 people were there. Yeah, and the crazy thing is, I think it was our sort of first themed show, and we didn't really plan it that way, but it just worked out. Right, I guess it's themed and anti-themed at the same time because we're in this moment in which everything is just like AI markets, markets, AI, et cetera, but there's all kinds of new things to trade, and people are fascinated by the trade itself, and people are fascinated by the way the technology development is affecting the trade. So we really wanted to do a kind of future of trading show, which is a very broad thing, but it did sort of come out that way. Yeah, it really did, and you finally fulfilled your long-time dream of doing two-part episodes with our guests. So our first speaker of the evening was actually someone who's been on the show before. That's right. So we had them on the show last year, and we had them on our live show. Listen to our episode with Iain Dunning. He is the head of AI at Hudson River Trading, talked about all things implementing AI, GPUs, all that stuff within the context of a trading shop. Take a listen. Joe, this is your dream, right? You finally get to do a two-part episode. This is the thing I always think about, which is that after every episode we do, I'm like, oh, there's a question I wish I had asked. So we had Iain on sometime last year. So the last round was easy. This one will be tougher. That's what I'm a little worried about. Well, I was going to start first before we, you know, talk about what you do, et cetera. So here's the question I wish I had asked last time. So Hudson River Trading shop, you're involved in the AI stuff. Could you theoretically do what High Flyer did and launch an LLM with this tech stack that you have and launch a DeepSeek competitor? I think so. I think we're good at training models. We have a lot of compute and people are good at doing the cycle of research, which is required to catch up to the sort of frontier.
However, I guess reaching the frontier is clearly a very daunting task. So maybe it's with some effort DeepSeek, but beyond that, it's not a claim I'd be willing to make. It's a hugely capital intensive task clearly.
Do people ever chat about that? We could do this. Oh, we think about it.
I think perhaps we missed our moment to do so. There's so many open models now coming out from the US as well as China that it's like a huge array of them. It's kind of an interesting shift from that DeepSeek moment where it felt like it was the first bolt from the blue of here's a competitive open model. Now I see so many groups releasing them. I don't know what the future of open models is that they're all kind of a serious step back and the frontier is progressing so fast. I don't know how you keep up with that, but many people believe that it's possible. I'm not so sure I'm one of those people though.
Speaking of things moving so fast, my first question is slightly different. I looked up your Twitter feed before you came on the show. Your last tweet before today was, and I quote, feel this every day, worry it's some sort of AI induced delirium, but then again, various empirical measures are exponential looking, so it feels best to assume we're hurtling towards some sort of endgame. So first of all, please convince us all live on stage that you are in fact not suffering from AI induced delirium, but secondly, what is the endgame that you speak of here? Now I sound like a San Francisco person. You do, yes. I've been doing AI stuff since around 2016, and that started at DeepMind, and it was a bit of a culture shock for me because there are true believers then, and I was most certainly not a true believer, and I resisted it, and I was a natural skeptic for a long time. But certain empirical measures of the pace of progress in the outside world, and I also look at our own business, which looks somewhat exponentially, the amount of compute I'll have next year versus this year, and then I have to be able to have this year versus last year, looks kind of exponentially. And we're doing things today that I didn't really, I should have dreamt of. I wish I had that kind of visionary, say I'm a visionary and I can see the future I'm building towards it. But no, I think I'm a pragmatic, engineering archetype, and so it's been very incremental.