The AI arms race rolls on and Samsung's CHIPS funding

AI

It was yet another big week in the artificial intelligence war, which included Samsung Electronics Co. Ltd. receiving up to $6.4 billion in CHIPS Act funding to build a Texas semiconductor complex.

Those subjects and more were part of what theCUBE Research industry analysts John Furrier (pictured, left) and Dave Vellante (right) dove into on the latest episode of the CUBE podcast.

“The big news is that Anthropic this week put out a new language model, Opus, that’s got great performance,” Furrier said. “And, today, Meta details Llama 3, 8 billion and [70 billion] parameter models reducing false refusals. Upcoming models are trained on 15-trillion-plus tokens that has 400 billion parameters. The arms race, as we talked about last time, is happening.”

What it means is that the conversation about Meta Platforms Inc. being in the game is true, according to Furrier. It also means that the company shouldn’t have changed their name to Meta, but to AI, given the fact that they’ll be an AI infrastructure.

“My prediction, we’re going to maybe look at the tape later on, but remember I said they could be the next AWS. They could be the next AWS for AI, what AWS was for startups,” Furrier said. “But AWS is upping their game as well.”

It’s important not to forget about the rumored Olympus, which is coming, according to Vellante. It reminded Vellante of a series of insurance commercials featuring the Allstate Mayhem guy.

“He causes havoc everywhere he goes. That’s like Meta. What they did with large language models, they came and said, ‘We’re going to open-source our stuff. We’ve got tons of resources,’” Vellante said. “And we heard they’re building, what, a million GPU cluster is their North Star to power Meta, right? They’re are the forefront of this stuff.”

The geopolitical implications of Samsung funding

When it comes to the huge amount of funding awarded to Samsung, the company says it plans to make two-nanometer chips by 2026, two years ahead of Taiwan Semiconductor Manufacturing Co. Ltd. That’s huge, according to Furrier.

“If they pull that off, that puts America, through Samsung’s team, the American manufacturing in a position,” he said. “We could be living in an era before we die, seeing where you have to only get chips from national companies. I mean, if we have this geopolitical environment where you’ve got World War III going on in the Middle East, and then you got the Cold War going on, cold chip war going on with China and that whole part of the world, maybe the U.S. [made] a good call to put everything in America.”

This will be a story to watch closely, because everyone knows that Intel Corp. is behind, according to Furrier. But there are supply chain issues at play, Vellante added.

“[Dutch chipmaking machinery supplier ASML Holding NV] missed its earnings and the stock got crushed, and it’s taking all the semiconductor stocks down, I think, basically, because a lot of these fabs are holding off on buying these machines because these machines cost hundreds and hundreds of millions of dollars,” Vellante said. “You don’t want to start buying new ones until you really need them, because you’ve got to get the machines online. You don’t want to overbuy.”

Navigating changes in VMware licensing

This week, Reuters reported that Broadcom Inc. had been questioned by the EU over VMware Inc. licensing changes. Also this week, Hock Tan, president and CEO of Broadcom, laid out the company’s mission for VMware customers.

“I said from day one, we’ll see if they keep the community and the event going. They lost the End-User Computing Group … but they’ve got enough meat on the bone to have the VMware Explore event,” Furrier said.

They do have all the top customers and likely factored into their model that it didn’t matter so much if people didn’t use vSphere, according to Furrier. It looks like they’re going to kill the free version, which will hurt the VMUGs of the world, he noted.

“If you look at, say, their strategy, they’re going to get all the top accounts, and that’s part of the plan. Now, they might forecast this … did they underestimate the switching cost problem?” Furrier asked. “What’s going to be very easy to tell quickly is the people that are revolting, are they, one, in the market basket of the customers that they don’t care if they move? Number two, it’s an alternative. Nutanix, is that going to be OpenStack? Is that going to be Oracle? Is that going to be Google?”

Watch the full podcast below to find out why these industry pros were mentioned:

Dr. Jim Goodnight, co-founder and CEO at SAS Institute
David Hatfield, board member at Lacework
Morris Chang, founder of TSMC and American-Taiwanese businessman
Gina Raimondo, United States Secretary of Commerce
Pat Gelsinger, CEO of Intel
Hock Tan, president and CEO of Broadcom
Charles Fitzgerald, consultative strategist and investor
Michael Dell, chairman and CEO of Dell Technologies
Lina Khan, chair of the Federal Trade Commission
Kara Swisher, journalist
Mark Zuckerberg, CEO of Meta Platforms
Sundar Pichai, CEO of Alphabet
Elon Musk, CEO of Tesla
Ray Wang, principal analyst, founder and chairman of Constellation Research
Andy Jassy, president and CEO of Amazon
Reggie Townsend, VP for data ethics at SAS Institute

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Photo: SiliconANGLE