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Supercritical geothermal, Google in hot water
62 Plays3 months ago
With the other hosts on vacation Anthony and Karthik discuss two news stories: first, they evaluate the ongoing efforts to commercialize supercritical geothermal energy; then dig into the Google's recent loss in an antitrust trial, and what that means for the future of AI.
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Transcript
Introduction to Sustainable Innovation
00:00:11
Speaker
Hello and welcome to Innovation Matters. It's the podcast about sustainable innovation brought to you by Lux Research. Here at Innovation Matters, we're having our hot boy summer, hot geothermal summer, right?
00:00:24
Speaker
we're having that summer We're having a super critical hot summer, actually, I think it's fair to say.
Olympics Reflections and India's Performance
00:00:31
Speaker
It's just Karthik and myself with you today. We've got a couple of interesting stories. First, Karthik, how are you doing? I know you've been ah watching the Olympics with maybe some some trepidation. So what's going on?
00:00:43
Speaker
Yeah, the um as you said, you know, it's super critically hot right now. um just ah Just weather-wise, but even ah in the Olympics front, you know, I think India lost five bronze medal matches, which is not, so that would have taken like, I think that would have tripled our tally of medals almost at the Olympics, which I was quite disappointed by.
00:01:05
Speaker
And on top of that, the women's middleweight final round, if I'm not mistaken, um Minish forgot she was disqualified because she was 100 grams overweight, which was very disappointing because you know we were definitely going to get a gold or a silver in the Olympics because of that. um But yeah, a lot of interesting rounds coming up in the Olympics. you know um And as the sports correspondent, we will definitely keep all our listeners up to date.
00:01:32
Speaker
and Okay, that's a very important function we serve here here at the Innovation Matters podcast.
Conference Insights and Innovation Potential
00:01:37
Speaker
Yeah, we've been watching the Olympics as well, but I was actually in Chicago the last two days. And it's funny because it was the weather was nice.
00:01:45
Speaker
And I was at this conference and everyone at the conference was saying, look, Chicago is next up when it comes to innovation because you can live here. like my you know um yeah say So it was pretty it was a little bit stark. It was a little bit stark. um But speaking of the heat, the pressure, it's rising.
The Promise and Challenges of Supercritical Geothermal Power
00:02:12
Speaker
But you, Karthik, were recently featured in an article and in New Atlas on supercritical geothermal power, which, embarrassingly, I'm not sure I know what I mean, I know what supercritical is and I know what geothermal is and I can imagine what they are, but i'm I'm not sure I really know what supercritical geothermal really is. So maybe we can start there. You could tell me a little bit about what's up with supercritical geothermal power and why is it, according to the title the the title of this article, limitless promise or impossible dream.
00:02:48
Speaker
Yeah, so with supercritical geothermal and and and as you rightly said, you know it's just combining the word supercritical for our you know technology nerds and geothermal together. um The deeper you go into the ground or in places where you have tectonic activity, volcanic activity closer to ah the surface of the earth,
00:03:07
Speaker
Your water is that is underground is pressurized and is at temperatures that are beyond its critical point. ah So this is where water is not going to behave as steam when it is above 100 degrees Celsius, but it it it exhibits these abnormal properties where it can um you know exhibit the characteristics of both a liquid and a gas at the same time.
00:03:32
Speaker
And that critical point for water is about 373, 375 degrees Celsius, 220 bar, if I'm not mistaken. So when the pressure goes up beyond 220 bar or about 220 atmosphere, same thing happens with water yeah you know temperature. If it goes beyond 375 degrees Celsius, water becomes super critical.
00:03:51
Speaker
And so why is this now very interesting? um Every time we talk about a supercritical geothermal, the reason why it's interesting is because of its enthalpy or the amount of energy it contains. um Because
Innovative Drilling Technologies for Geothermal Energy
00:04:03
Speaker
supercritical water can hold 5 to 10 times the amount of energy compared to superheated steam at the same temperature,
00:04:12
Speaker
If you are able to extract this power from under the ground, you're basically looking at a geothermal plant. Let's say if a conventional plant is sized at one megawatt, you can size this plant at 10 megawatts for the same footprint. That's nice. That's very nice, exactly. And then you are, and the other good news is that, you know, you can basically find magma everywhere on Earth, right? It's not limited to a specific geography. It's just that the depth at which you find it is different. Specifically, it's a lot deeper, right?
00:04:42
Speaker
Exactly. So it is very deep in some places and it's very shallow in some places. But if technologically we are able to you know innovate and find some solution that can drill us all the way you know down there and deep enough to extract this supercritical water, then you're talking about geothermal anywhere, which never is never possible with conventional geothermal. So one of the things the article flags up is this issue of the drilling itself. right And not just the drilling, but also getting this very hot working fluid up to the surface. and then Because presumably you would pump the supercritical water back up to the surface, or not even pump really, because it would it's so it's under such pressure that it would flow up on its own. um So talk talk about that. and then
00:05:29
Speaker
Is it possible? Could we stick the generator? Because it seems like the problem is getting between the very hot water down at the bottom of the the world and up to the power plant. What if we put the power plant at the bottom of the well? Is that even possible, feasible? I know some people I think have tried it with other more conventional geothermal. um Is that a potential solution here? It seems pretty pretty difficult, but I don't i don't know, actually.
00:05:57
Speaker
I would kind of try to try to tackle this um twofold. right so The first question is, how can I access this resource through conventional drilling, let alone get to the power generation part? It's not just the water that goes super critical because the pressure and temperatures are so high, but because of those pressures and temperatures, the mechanical properties of the rock or the subsurface geology down there is also very different. So yeah, because typically if you look at rock, you know, you can drill through it and then it cracks, right? It powders and it becomes finer, ah you know, stones or it becomes finer powder or sand. But when the rock's pressure is so high, it becomes a ductile. So you can, you know, you so there there are chances or ah there is a possibility where the rock that you're drilling into will start deforming like a sheet or like stretching like ah ah like a thin sheet of plastic.
00:06:47
Speaker
Oh wow. Yeah. And then what happens is when your rock starts deforming, it's naturally going to push rock beside it as well. And so one, your drill bit is going to wear because your rock is just, you know, deforming all the time and you're not able to drill through it. So you're ah you're stuck at the same spot, spending energy for nothing. And the second thing is you're going to induce some kind of seismicity because now you have, you know, movement between different plates of rock, which is not very good. From my understanding, is this deeper than conventional oil and gas?
00:07:17
Speaker
This is significantly deeper, it seems like, than conventional oil and gas drilling. Is that is that correct? So ah from what I know, for example, in places like Kenya, Iceland, where you have you know natural geothermal and tectonic activity or volcanic activity, you can go as as deep as you know two to three kilometers and you can still encounter magma because that's how the geography is. But if you want to, let's say, drill in a place like Thailand where you don't have a conventional geothermal resource, you may have to dig you know or or drill as deep as 20 kilometers, which is huge.
00:07:50
Speaker
Yeah, that's like, that's really crazy territory. Because I think the deepest, the coolest super deep borehole is like what? Like a couple miles deep, right?
00:08:00
Speaker
So now you're taking me to the miles to kilometer conversion, but I know it's somewhere about five to six and a half kilometers there. And that's like the deepest hole ever drilled. So like in Thailand is a huge challenge. Like you have to go four times as deep as the super deep borehole. And so now getting there, of course you have a lot of startups like Quaze that are trying to develop, you know, non-contact based drilling solutions because the big issue is your drill bit is wearing off.
00:08:24
Speaker
So, laser solutions. Yeah. So, either lasers, plasma, I know there are companies that are trying to use sound waves, like supersonic sound waves to vaporize rock. Really? I've heard of the laser gelling stuff. I thought it was crazy, but I never heard of supersonic. So, how does that work? Is it like an ultrasonic type thing, like an ultrasonic cutting, or what exactly is the mechanism? So, my understanding is that you're basically using shockwaves created from sonic booms to crack rock. Wow.
00:08:54
Speaker
So there are different companies that are trying to look at this, of course, but with any kind of laser or supersonic drilling solution, you're talking about expending large amounts of energy. So if you look at your energy payback, that's going to be very bad. Assuming you are able to drill down there, of course. So now that's the first bit. Now we have drilled down there. Amazing. We have the supercritical water that I can touch, which you shouldn't be touching. We've unleashed the ancient aliens.
00:09:19
Speaker
I just watched the X-Files movie with my wife, and it's all about ah it's all about underground ancient aliens, and they've they literally type them out on the ground. So we found that. Yeah, so now we found that, and now the question is, how are we going to take this water out? Now, in a typical geothermal well, as you said, you know you can have you know the moment you drill through, the pressure is so high that you know the the water just comes out.
00:09:45
Speaker
And when it loses pressure, it becomes steam. So you just directly pipe it to a turbine, you produce electricity grade. But one of the- I don't even have to do anything there. You just go straight to steam. You just get straight to steam,
Managing Geothermal Energy's Challenges
00:09:56
Speaker
right. But the issue though there is that because it's an open loop kind of system where the water that is underground is actually leaving the system, um you end up losing a lot of steam, which is why 20, 25 years down the line, you end up exhausting your geothermal resource at that site.
00:10:12
Speaker
Interesting and regular geothermal, from my understanding, it recirculates the water. Correct, so you also want to recirculate the water, um but I think that is why the closed loop systems make more sense, especially if you have something as, let's say, but ah disruptive as supercritical geothermal, then you don't want that ah resource to get exhausted, right? So any kind of closed loop system would make a lot of sense where you have another heat transfer fluid. So you have some heat exchangers at the bottom that are just you know taking the heat from the supercritical fluid, and then you're using that to you know run your turbine.
00:10:46
Speaker
Okay, that's interesting. yeah But the problem there again is that because supercritical water has these abnormal properties, water supercritical water can dissolve metal. Really? Yeah, it's very, very corrosive. And not just supercritical water, many supercritical fluids, for example, if you look at supercritical carbon dioxide, which is, you know, tried for the SCO2 turbines that you have, the gradient cycle ones, the impinge on the turbine blades, your turbine wears out, it's very, very hard to control it, which is why there's a lot of research going into this area. So so the second challenge is really looking at novel materials that can withstand those supercritical, you know, corrosive environments.
00:11:25
Speaker
And if they can't do that, then even if you have a power plant below the surface, not even above the surface, which is that you know closer or in proximity to that super critical resource, you're actually looking at damaging all your components very quickly. That's so interesting because there's a lot of work happening.
00:11:42
Speaker
in the, you know, I would say the broader chemicals industry in particular, on supercritical water processing technologies, right? Supercritical water, you have a lot of unique advantages when it comes to, for example, like processing waste, you actually can precipitate out a lot of things out of supercritical water that otherwise don't precipitate out. And then I guess it comes from its ability to dissolve different materials.
00:12:12
Speaker
Yeah, yeah. So some things like dissolve in water but don't dissolve in supercritical water, right? Some things that, you know, yeah, they do dissolve in supercritical water or they, you know, you could precipitate like chemical reactions a lot more easily and under those supercritical conditions.
00:12:29
Speaker
Um, and you can also actually do like hydrogen. You can start to donate hydrogen. So you can start to break down some of those water molecules as well, or break down other ah hydrogen containing products. But so like, you know, you have companies like Murra, I believe they're doing a super critical process for plastic recycling, uh, trade tech, their startup, they're doing a super critical process. Um,
00:12:52
Speaker
for like gasification, right, of of wastes, of municipal solid wastes. But um I wasn't aware there were such corrosion issues or material issues there. Is it more, challenging I assume it's more challenging if you're talking about something down whole, but you think those issues will be present in any type of supercritical process in Karthik? I would definitely say so because the properties are still the same, if you ask me.
00:13:17
Speaker
So whether it is above the ground or below the ground, the moment you're looking at anything super critical, then you have to consider you know what the physical properties of that super critical medium is going to be. um And that becomes the big challenge, of course.
00:13:33
Speaker
And not to mention with supercritical geothermal, you also have to look at things like volcanic gas emissions, if you drill into magma by mistake, magma leakage into the system because it's so close to magma. So you can literally physically damage your system even without the supercritical water, even if you manage it because yeah, because you're just so close to very hot substances.
00:13:55
Speaker
Yeah, yeah. So, I mean, you sort of touched on this and like, I think the article ends a little bit ambiguously, but but sort of undeniably in a bit of a negative direction, right? You talk about quays, you talk about all these challenges. I guess, you know, you expect it seems like in Iceland or in, you know, maybe Hawaii, right? Where you have, where in the Ring of Fire you have these better access to magma. It's it's it's maybe more possible, but I guess what are you looking through and or what are you looking for in terms of a breakthrough here? is there Is there one thing that could really tip the scales or is it more a type of like, we need a lot of small things, we need a lot of improvements to come together on the materials, the drilling technology, you know the geo I'm sure of the seismic or the Identifying the magma is probably not easy. right so what What are you looking for for in terms of improvements? Before we get into the solutions, I would say that for all our listeners out there who are very curious about supercritical geothermal and what's going on, there are about seven research projects that have been conducted. and The most notable one is the one in Iceland, the Kraftfla magma test bed, the KMT project.
00:15:03
Speaker
And they actually do want to drill into a supercritical resource by 2028. So this is something they recently discussed with another media outlet. We have also been writing about it um for our clients. And so um what would you have to look at in those kind of projects specifically if you want to monitor it? and And I would say it's threefold. So the first thing is understanding subsurface geology. So you should know where are the points that are still brittle enough to drill into.
00:15:32
Speaker
And that comes from you know sensors, digital solutions, AI solutions um that can help you understand subsurface geology better and it' will give you you know it'll help you recreate the path through which you're supposed to drill. That's the first part. The second one is, and the second one, of course, I would say, as you mentioned, is a combination of the materials for the drilling as well as materials for you know just able to being able to withstand super critical media.
00:15:58
Speaker
um And I think if you're able to get those non-contact solutions, plus if you're able to commercialize materials or or develop new materials that can withstand supercritical media, then I think that's a great step.
00:16:13
Speaker
Yeah, it seems important for a lot of other applications as well. Yeah. And, and, and now a lot of people may ask this question, you know, like, Hey, you know, you want to develop novel materials, you want to withstand high pressures, high temperatures. So it's going to be quite expensive, right? But I think the upside from the power generation that you get five to 10 X.
00:16:29
Speaker
could very well compensate for this. Unless you are drilling 20 kilometers, 25 kilometers deep where, because we're drilling for example, the deeper you go is exponential, you're drilling costs. So there may be specific instances where you know one trumps the other. But I would definitely say in these you know shallow sites, as you mentioned, you know Iceland, the Pacific Ring of Fire, where it's not too deep to drill into, all these tests could provide promising results.
00:16:58
Speaker
So I am quite skeptical that it will ever happen, at least in the next 10 years, because I feel material science still has some way to go. But you know, AI is coming up, material science and me material informatics have improved.
00:17:11
Speaker
yeah the problem again
00:17:15
Speaker
I don't know about that, but definitely I would say that, you know, because we have advanced so much on the materials front, I'm not as skeptical as saying you know what completely ignore this you know but it is very close to that ignore mark you know it is very close and hopefully that changes you know because it could completely change the way in which we look at different solutions that can complement solar and wind. you know You don't have to look at nuclear and waste management and anything like that anymore. you know Well, that is really interesting. um I also think, you know to me, I wonder if there's a way to to for any of the higher temperature applications, right doing like some sort of combined heat and power here you know with a higher temperatures team.
00:17:55
Speaker
Yeah, you could maybe even look at supercritical geothermal for pure heat for industrial applications and places where you know you have an industrial facility with that is struggling to acquire land for solar and wind that is looking for an energy-dense solution. But they don't want to deploy nuclear because of the anti-nuclear sentiment that can kick in any time. Fusion, you don't know what's going to happen. You don't have access to other resources like marine energy.
00:18:20
Speaker
you know, fuel cells are expensive, everything is expensive, hydrogen is expensive, and then you're like, I need something that helps, you know? I guess when you when you compare it that way, like the 10 year timeline, you know, minimum that you kind of called out, isn't even necessarily that bad. Like small nuclear is still probably...
00:18:37
Speaker
at least on that same timeline. Exactly. Yeah. That's interesting. That's interesting. So I don't expect anything to come in the next 10 years. um That is my expectation. But the good thing about being an analyst at Lux is if you're proven wrong with these technologies, I think you're the happiest person more than even the developer, because it's going to you know change the way in which we are going to view the energy transition. So hopefully that happens.
00:19:01
Speaker
Speaking of super critical, speaking of people under pressure, things under pressure, ah the other thing we really wanted to talk about is Google.
Has Google's Search Engine Declined?
00:19:13
Speaker
Google, that company, everyone knows it. Everyone, question mark, loves it, perhaps not. got it Before we get into this, in your experience, because I see a lot of people talking about this online, has Google search gotten worse for you?
00:19:30
Speaker
you know we're we're We're Googling a lot here at Lux, I think it's fair to say. um What is your experience of Google search band? Because for me, I think it's gotten a little worse. I think it's gotten a little, especially like trying to find very specific things or technical things, I think it's challenging. um I don't know if like some people like say, or I see online people posting, like you can't even use Google anymore or you can't find anything. I think that's a little overblown. but Has Google gotten worse for you? What's the deal? I mean, I would say that Google has already set such a high bar with its search engine that I feel when we say a little worse, you know, we're talking about being slightly worse than where it
Google's Antitrust Issues
00:20:12
Speaker
already is. It's not that it's a terrible search engine to use at all. um But I also feel that sometimes with Google's, I type something and then it thinks that I'm relating to something else and puts that first.
00:20:25
Speaker
or or it starts throwing ads instead of actually giving me the numbers. um So sometimes, for example, um I Google something like, what's the cost of cheetos in the Netherlands? And then the first thing it would show is an ad from someone who's selling it at the cheapest price and not tell me what's the price range. which and And of course, Google makes its money through ads, right? So I won't complain. But those are the kind of things that pisses me off a little bit, if I must say.
00:20:52
Speaker
And so that is the problem, right that um Google does make its money for my ads. And just, I think, this week, last week, um Monday this week, so we're recording this on the 8th of August, this Monday, a federal judge ruled that the us or the google Google had violated US antitrust law, specifically with its search business.
00:21:18
Speaker
right um What's interesting is that I think um the practices here were pretty well known, right? So Google has been you know has more than a 90% market share and it pays companies to have Google be the default search, right? The search provider of choice. Yeah. Apple is the best example. Apple is the best example. Google pays Apple something like $25, $26 billion dollars a year, maybe as much as $30 billion dollars a year for the privilege of of being Apple's chosen in search provider, right?
00:21:59
Speaker
um And like this has been pretty well known for years. right like This is something like Apple like reports on. like This isn't Apple's financial disclosures. It's $26 billion. dollars You can't like hide that much money. right So this has been really well known. So what's interesting about this case is that it's not really about um
00:22:21
Speaker
the facts so much, right? It's not like there was some secret conspiracy that was uncovered, right, to reach this finding. um
00:22:32
Speaker
It's really more a reflection, I think, of a shift in in policy. I mean, the this case is brought by the the District of Columbia, the District Court. Excuse me, that's not correct.
00:22:45
Speaker
um This case is bought by the brought by the DOJ, um the Department of Justice in the United States.
Policy Shifts and Tech Industry Impacts
00:22:53
Speaker
um And there's another antitrust suit as well by the Biden administration, um which is also going to go to trial in September right on on the ad the other part of the ad business. right um And so this is very much a policy choice, right? This is very much, you know, the the Biden admin is is very much interested in bringing much more aggressive antitrust and anti-monocly action here. So if this sticks, because there's gonna be appeals, there's gonna be a lot of legal wrangling, there's gonna be a lot of back and forth things.
00:23:34
Speaker
um And it's it's almost certain that to have this stick, you will need a Harris victory in in November, right? Because it's so it's it's it's pretty likely that Trump would drop this case. He would instruct the DOJ to to drop this kind of case. um Although I will say that antitrust and anti-tech sentiment is a little bit bipartisan, it seems. It's not really clear to me, um but but it seems like this specific use of of you know this type of government prosecution would would definitely be dropped into the Trump admin. So contingent on a Harris-Winn and on you know them continuing, you know it's possible the Supreme Court, for example, could intervene, like throw this out. There's there's a lot that could happen. um It's obviously a big deal for Google, right? It's a big blow for Google.
00:24:28
Speaker
um I think it's a big blow for the tech industry as a whole, though, because um a lot of tech industry business models are based on monopolies, right? you'll You'll hear this described as a moat, right? It's like, oh, we really want to invest in companies who have a moat. um And to me, that often is just like, yeah, we want to invest in a cop a company who can establish a monopoly.
00:24:59
Speaker
on a particular type of service or a particular type of activity, right? And then extract value, you know extract rent from that that service right for indefinitely and and ideally ah in a really profitable way. And that's kind of how Google operates. And the interesting thing with these monopolies is that it's not just the the main service or the branch or the trunk, I would say, that that you know they rely on, but it's also the sister services that branch offered.
00:25:28
Speaker
You know, for Apple with with Apple, for example, you know, it's the ecosystem is the app store. It's your Apple one subscription is the iCloud subscription. So yeah, that's not channeling a lot of money in. Apple is a really good and and to me, it's a slightly different example. um But it's still very important, right? Because it is and they've also been the the target of a lot of antitrust action, right, especially in the EU more than the US.
00:25:54
Speaker
Well, with Apple, right they have this very strong user base. They have a walled garden. you know They have this ability to exclude through the app store companies and services that they don't like. right um And it's that power to exclude that's really economically very powerful for them. right And that's actually what was subject. you know The EU basically said you have to allow third party, not just third party apps, but third party app stores.
00:26:21
Speaker
right And they have been slowly allowing it, but they've been basically trying to make it as like difficult as possible. right They've been fighting it every step of the way. Yeah, but ah one thing to go back to the, you know, maybe this is a blow for the tech industry. And I was just curious because this is related to Google search business. Do you think other search engine providers will now think, Hey, we have a window of opportunity here to maybe redevelop this business. If I'm not mistaken, Microsoft has stopped working on its Bing, ah you know, search engines for quite a while now. So do you think that is going to change?
00:26:58
Speaker
Yeah, I think it's possible. I mean, I do think Google has has but been resting on its laurels. Everything I hear about Google is that it's a very dysfunctional company, it seems like. They're sort of seemingly incapable of like launching a new product, it feels like. you know I think everyone's had the experience of Google launches some new product. They use it for a year. Maybe it's good. Some of these products are really great. Some of them are are terrible or make no sense. And then like it dies. I hope Sundar doesn't hear this.
00:27:28
Speaker
who sendarsonda picha who if he's an alexander Sundar, if you're listening, come on the pod for real. um We can talk cricket. I'm sure he's a <unk> up on that. But, you know, I think it's well known. I don't think this is would be shocking to him or surprising to him. Right. Like this is a well understood problem that Google has. It's really difficult for it to launch new products. And there's just a lot of organizational challenges at Google right now. And a big part of how they've still been so successful is basically by, you know, the maintenance of these monopolies, right? how So with that in mind, I think everyone is, you know, search more competition for sure. um But I think what's, what's interesting is that this is happening at this time where you were beginning to see AI integrated into search, right?
00:28:21
Speaker
like Google has done this, Microsoft has done this with Bing. um Even Lux Research, we've essentially done it, right? We have our own AI assistant, Luxor, now, and it uses a form of, basically, it's called retrieval augmented generation, where we have given the AI access to our database. You ask it a question.
00:28:41
Speaker
it reads the articles, it pulls the relevant snippets from our our research, and it puts them from our clients. And it's a really nice user interface. and And to me, it's a really great way of of searching our membersite. I'm someone who searches it a lot. like i I know the search tools really well. And I still find it useful.
00:28:59
Speaker
And I believe the language translation feature is also going to kick in soon. So you can type in your native language and then it, you know, it translates and retranslates back to your native tongue, which is pretty crazy. So it's like this very powerful capability for search in particular, right? But the big question is how does AI make money, right? It's very challenging for AI to make money. And I wrote this article a couple of weeks ago about AI, how I think, you know, I've been i've been maybe an AI skeptic or AI skeptics, I'm not a full on AI skeptic, like I think it's a useful technology in a lot of ways, but I've been very skeptical of the current businesses of AI, which are extremely expensive, extremely burning cash, and extremely far from profitability, right? And like Uber, you know, still just started making a profit and it's still negative like $40 billion dollars over the course of its corporate lifetime, right?
AI Profitability and Business Models
00:29:54
Speaker
And I think open AI and these companies like them are are in a similar position where they're
00:29:58
Speaker
ah negative Their are revenues compared to their spend is hugely, hugely negative. right um there Certainly, their are profits compared to their spend are hugely, hugely negative. Of course, that's like on purpose, so that's part of the business model. right and's ah yeah and I think you touched upon this on your blog as well, right where AI companies, they want to kind of give you low-cost solutions and think, okay,
00:30:20
Speaker
I'll predatory price myself into the market, gain large enough market share where I know I'm not gonna fail because it's open source. Everyone who's using it for such a long time, they it's become a necessity rather than a want or a nice to have. And then I can charge you know a premium or a subscription or I can start off with small slabs to make them feel like the product they have isn't premium enough and then you know start making money off of it. Do you think that's not sustainable for AI at this point?
00:30:47
Speaker
Well, I think the best way to do that is to have a monopoly, right? The best way to do that is to be like Google, right? Where, you know, for online advertising, there's basically no other choice, right? And for search, there's no other choice. um Those two things are very much you know linked together, right? And so they're able to, it's not just about the the pricing, it's more about the profitability, right? Google has not had to invest a lot in search.
00:31:14
Speaker
for more than a decade, right? They've just had to maintain their monopoly status and then they have this very profitable business, right? um And more to the point, it represents a route to really monetize AI, right? Is to get a monopoly and then, you know, like like you can imagine um open AI charging Apple, right? Or you know If OpenAI is the only AI in town, if it's head and shoulders better than everyone else, and no one can compete because of its scale, its size, its ah access to resources, then it can charge these big companies you know whatever it wants for distributing its services to to their customers. right um And so I think this ruling really makes it a lot more challenging.
00:32:00
Speaker
for tech companies in general to operate these highly profitable business models. And I think AI is one of the businesses that's most in need of a highly profitable business model because it's so expensive, because it's so resource intensive. So to me, it really, it's very damaging to the AI companies. And it's also even, if you think like, if Google is gonna integrate AI into its search, that's a very expensive thing to do, right? It basically adds,
00:32:30
Speaker
you know, probably doubles the cost of search for Google, at least, if not 10x, right? But probably more like 2x. I think people overestimate the cost a little bit. um But still, like, are you going to 2x the cost of something where now you're going to lose market share, right? You're going to go from 90 to, you know, if you lose Apple, that's maybe like a third of your share, right? like It's very challenging all of a sudden. And if Apple is also developing its own artificial intelligence and stuff, who knows whether they can integrate that with Google search and then Google need not make one. So it's also, I believe there is some uncertainty there as to which AI model will do well. So you're investing in something with no clue on returns or by when it'll give returns, even if it is poised to give returns. Yeah, that's the thing. I think the returns were already questionable, even if you could successfully form a monopoly.
00:33:17
Speaker
I would say it's it's not like search where search scales and it was always very profitable for Google. A lot of these tech companies, these early generation of tech companies were very profitable from the start. You know, SaaS companies and search, things like that where those business models made a lot of sense.
00:33:35
Speaker
But I was just maybe thinking as well, because for all these AI companies, you know data is money. And you know we did talk about the Apple Intelligence event and their you know collaboration with ChatGPT and how you know Apple's, they didn't talk about any monetary compensation, but they did say that you know because ChatGPT has access to all data that Apple's giving them. But it is private, of course, to an extent, supposedly.
00:34:00
Speaker
and And so that data is what is, you know what you could say is that in-kind revenue, something like that, if you could call it that, quote unquote. So is that insufficient for them to become a monopoly? Or do they still need revenue from another, this thing?
00:34:15
Speaker
I don't know. I don't know. it's's it's i think I think they need those other sources of revenue. like They need every source of revenue they can get, I think. And um I think this will also make it harder to do that. you know The scale of the data collection is you know it's complementary. right The bigger you can have that. google That's one of the reasons why Google is so valuable, right is they have that that scale of data collection. And so again, it's just like,
00:34:45
Speaker
the antitrust really hurts them on every angle. Right. It's not like just limited to this one element. It really hurts cuts across all the aspects of their businesses. All right. Well, Cardiac.
00:34:57
Speaker
Hopefully India wins something else soon. I don't know. Hopefully India wins something else brother. I mean, I can't speak as an American, you know, I'm i'm totally spoiled. America is already up top. You know, you can lose and you'll still, it won't matter. It's like being Google, you know, America is a monopoly. We have the monopoly. It's true. We really do. Um, it's crazy actually. What's nuts is that all these are, these are like college athletes in America. Like all our gymnasts are like, like the the male gymnast team that won bronze was like all like kids from Stanford. It's nuts.
00:35:26
Speaker
Yeah. And of course, if any AI company loses their monopoly or becomes a monopoly, we'll be the first ones to talk about it. We will be the first ones to talk about it. I think so.
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00:35:36
Speaker
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00:35:44
Speaker
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00:36:06
Speaker
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