RSI Is Closer Than People Think, Per Tae Kim

**John Coogan** (0:00)
We have Tae Kim in the waiting room. Let's bring him in to the TBPN Ultra Dome. Tae, how are you doing?

**Tae Kim** (0:06)
Hey guys, doing great.

**Jordi Hays** (0:08)
What's going on?

**John Coogan** (0:08)
So, hey, so tell me, last time you were on the show, you bottom ticked it? What's going on?

**Tae Kim** (0:14)
I think I made the bullish call on CPUs, memory and Nvidia. Nvidia's up like 5, 10%, but the CPU names have still doubled even after this big drawdown, and the HPM names are up 100%.
So, I'm hoping that it's the same thing again. I come on here, it stopped to go up again.

**Jordi Hays** (0:34)
Yeah, ideally we could have like an emergency reserve of Tae Kim appearances, so if the market is ever down, we just, a strategic reserve, we call you up, you jump on, and then it's up.

**Tae Kim** (0:44)
It was funny, because it was literally the exact bottle. That's amazing. You know, it went exponential after that.

**Jordi Hays** (0:50)
Tae Kim effect.

**John Coogan** (0:51)
So where are we right now with the level of FUD, the level of downward pressure on the AI trade broadly, the chips, the semi-trade, like reset for us on like where sentiment is, and then we can work through the different pieces of counter examples.

**Tae Kim** (1:08)
So I think sentiment is very negative. We kind of had this huge up, parabolic up move the last few months, and likely a lot of retail and hedge funds piled it in, and we were seeing this unwind now. I think the first big part of it was the Iran war getting worse.
Every time we had the first ceasefire, negotiations start taking off right after that, and then when we had the actual ceasefire, we had a follow-through, and then as soon as Trump started bombing Iran again, chip stocks have plummeted in the last two, three weeks.
Then now we're seeing just back to the old pattern of media, the viral hot takes spreading a lot of FUD. I think we saw earlier this month, I think Reuters quoted like Zuckerberg's about agentic AI, they took it out of context, and then every media person was with a hot take that this Meta was seeing bad returns that they're going to cut at CapEx. And then we had leaks right after that saying that it looks like Meta is going to raise CapEx. So we're seeing a lot of this hot take FUD. Yesterday, I think we had a flurry of stuff that scared people. The Wall Street Journal Vendor Financing article that we'll see what happens with that. We had CMXT IPO in China and everyone freaked out over that. We had the information article on ASML. We could go through each one. And then the Kimi thing, it's obviously a big thing.

**John Coogan** (2:39)
Yeah, we'll definitely get there. And I want to talk about open source and Nvidia strategy there, obviously, starting with the Mark Zuckerberg news in Reuters. This was July 2nd. Meta's Zuckerberg says, AI agent tech progressing slower than expected.
Zuckerberg added that the company's reorganization that included major job cuts was not as clean as it could have been. Zuckerberg and other Meta executives have been seeking to moderate some of the organizational changes introduced this year. And they said that the trajectory of agentic development over the last four months hasn't really accelerated in the way we expected.
The company's bets on new structure haven't come to fruition yet. And so people were sort of reading this as maybe Meta is going to pull back. But then it felt like the response was extremely quick with Boz going on a podcast and Alex Wang sharing a whole bunch of progress across a few different models and data points. And then a semi-analysis wrote a whole bull case for MSL talking about how they have compute. And also they have more of the internal structural alignment to sort of properly YOLO in the AI era. If I'm boiling it down as brutally as possible. Just because with Google, there's always this debate between, do you sell the TPUs or do you sell the cloud? Do you have vended in the product? Whereas Mark Zuckerberg is able to sort of like go all in on this new idea. So maybe there's more glimmers of hope there. But what else have you been tracking downstream of Meta's ambitions?

**Tae Kim** (4:18)
Well, I mean, they've been very upfront that they're investing heavily in AI. Alexander Wang is tweeting multiple times every few weeks that they're going full force. They're gonna redo open source AI models. I think he said that, the YC event over the weekend. I mean, if you actually look at, and then Reuters came out, I think, with an article saying that they're actually gonna raise capex dramatically this year and next year. So all that kind of fear that, that quote about it's fintech AI from the town hall, that kind of like spooked the market for a few days, it kind of, it was completely false.