00:00 Speaker A
You have been hot on something you are calling hybrid AI.
00:04 Speaker A
Yeah. First of all, what the heck is hybrid AI?
00:05 Speaker B
It’s a fair question. Uh so look, the idea, there was back in the day of the cloud. First, there was the public cloud and then there were companies who did it on their own. That was private cloud. And then there was what was called hybrid cloud, which was means you use some of the company’s resources and some of the public compute resources. The same thing is happening with AI. So we started out with all this AI in the cloud, Open AI, all these big companies and that’s still where the vast majority is happening.
00:36 Speaker B
But increasingly, we’re seeing companies start to invest in their own GPUs. So, uh Jensen calls it the Enterprise AI factory. We’ve seen all these other companies. So all your big server companies, your Dells, HPE, Lenovo, uh Cisco, Super Micro, these companies are building it, you know, servers again that companies like a Coca-Cola and a GM and all these guys are putting into their data centers because it turns out the most precious data that they want to use to train and fine tune their models
01:03 Speaker B
is still behind the firewall.
01:05 Speaker A
Okay, I I’m going to take another I I want to like sort of break that down a little bit. So when we’re talking about the cloud traditionally, when you what you call the public cloud, we’re not talking about like public as in government. We’re talking about public as in the so-called hyper scalers, the Amazons, the Googles, the Microsofts of the world, where my data is not on my computer, it’s not on the server that’s in my company’s basement, it’s in their data center server. And that they manage that for me. But what you’re talking about is that now maybe it’s still is some of it on the server in my basement. And that because my company’s um information, proprietary information is valuable to train an LLM that there’s a case still to be made for the server in the basement or wherever it is, my own data center.
01:52 Speaker B
Yeah. No, exactly. And thank you for explaining it in a more uh humane way. Um but yes, at the end of the day, that’s what it boils down to. And the thing is you can start to leverage a combination of these things. Some workloads, you can do some of the work locally and some of it you can do in the cloud. And they’re figuring out ways there are these technical standards called MCP and A2A for agents to make all this magic work together. And then the final piece of the puzzle actually is we’re starting to see some of this stuff move to the edge. And the edge sometimes is a computer.
02:29 Speaker A
The edge is the computer, the phone, the device.
02:32 Speaker B
It could be robotics, it could be factory automation tools, sensors collecting a lot of data. They do some of that AI work there and then they can transfer some of that to the cloud. So it’s that combination of all of those things that’s really starting to change the game. And that in turn is allowing companies to start to build applications that they can actually leverage AI as they were just discussing in that last segment to start to generate revenue because right now we’re just we’re building the hardware infrastructure, that’s great and all the companies selling the picks and shovels are doing great.
03:07 Speaker B
And now it’s about, okay, now let’s convert that into real income and real things that matter. And and that’s where the AMD story is interesting speaking of their event, which I will be at today because one of the things AMD talked about last week was the strength of their CPU business. We always focus on GPUs, but at the end of the day, a server still has a CPU, a PC has a CPU and that’s a big part of what uh drove some of AMD’s growth.
03:36 Speaker B
And of course, yes, they also have GPUs. They are the clear number two versus Nvidia. They’re seeing strength, a lot of companies, of course want to see more alternatives from Nvidia. Uh AMD’s that obvious choice. So I think we’re going to hear a lot about what they’re doing on that front today.
