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Palo Alto
Joined October 2014
Ben retweeted
Replying to @GergelyOrosz
I challenge this a bit (a) Codex was started as an internal tool. The goal was explicitly to build what was the highest leverage tool to accelerate infrastructure buildout. (b) I don’t think the Meta vs non-Meta is particularly enlightening here. Most of us who came from older tech companies were surprised at how far OpenAI had taken Python scripts and had a desire to scale OpenAI further. (c) A ton of infrastructure and internal tools were built over the last few years, it’s not the case that we were just waiting for AGI to appear.
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Ben retweeted
Meritz Securities (Korean sell side): GPT-6 Astra launch and implications for the memory stock rebound On September 3, OpenAI unveiled GPT-6 Astra. As interpretations of this model became a hot topic, semiconductor stocks rebounded on September 4 even as the broader US market fell on rising rates following a jobs surprise, with the DRAM ETF up 6.6% versus the prior day. Astra's implication is unlikely to be simply whether AGI has been achieved. What drew the most attention was the score of 99.9% on ARC-AGI-3, a benchmark used to judge AGI, a huge improvement over the previous model (Sol at 7.8%). This benchmark is not a knowledge test; it evaluates a model's ability to learn on its own in an abstract environment it has never seen before, and this is where the improvement over the previous model was large. General intelligence, as measured by AAII or Humanity's Last Exam, did not improve much. The differentiated strength improved in Astra is "the ability to acquire skills that humans learn in an unfamiliar environment as efficiently as a human does." Where AI until now found the answer by pressing this and that 100 times, Astra has started to behave more like a human: observing the phenomenon, inferring the rules, and executing right away. The key point is "an expanded scope for replacing human intelligence and human work." If existing AI was an AI that told you what to do, Astra is closer to an AI that, given only a goal, uses the computer directly and produces the result all the way to the end. In other words, an easy to use OpenAI model has begun to handle on its own part of the agent orchestration layer that had been the domain of less accessible tools such as OpenClaw. For users, the barrier to entry for AI agents has been lowered, meaning more work can be handed over. Expansion of AI workloads Astra naturally also comes with efficiency gains that lower the token cost per task versus the previous model. This is a trend across the AI industry as a whole, and if AI workloads were fixed, demand for AI data centers would have to plunge. The reason Jevons paradox continues to operate even after token price declines became a trend following the rise of Chinese models is that AI technological progress also expands the workload. What Astra's technological progress means is that where humans used to hand five minute, ten minute, and twenty minute tasks to AI, as AI performance improves and token prices get cheaper there is more to hand over, such as one hour and 24 hour tasks. Just as news flow about rising GPU rental prices has spread since Astra's arrival, it must be understood that falling AI token prices do not necessarily shrink or slow the AI hardware TAM. Rather, one should recognize that the emergence of a model like Astra can create another inflection point for the AI industry and structurally grow AI demand. Our understanding is that since early July, as the pace of GPU rental price increases slowed and token prices fell, a long IGV (software) / short SOX (semiconductors) pair trade has persisted in the US. This is because falling token prices were interpreted as positive for software, where tokens are a cost, but negative for infrastructure. If progress in models like Astra structurally spreads AI workloads and GPU rental prices begin to respond again, the perception that falling token prices are bad news for AI infrastructure companies could weaken (on 9/4 the DRAM ETF rebounded while IGV fell). As we have argued consistently, the issues accumulating in the AI industry since June (the proliferation of open models, this GPT-6 Astra release, and so on) are, in our interpretation, positive catalysts that generate new demand for AI infrastructure and hardware that did not exist before. We think that in a phase where rates are rising overall and liquidity is becoming scarce, these accumulated positives are not being reflected. The stock market in September is still uncomfortable with high rates, and within the Korean market there remain hurdles to get through, including digesting a round of earnings estimate cuts driven by the sharp won appreciation before the 3Q26 preview season. There is still discomfort standing in the way of the accumulated positives being reflected in a sustained trend. Overall, we continue to view the market conservatively. Even so, as emphasized in our September strategy, we believe one should not substantially empty out positions in core AI infrastructure stocks centered on memory. Positive catalysts not reflected in share prices are accumulating. While our baseline is conservative through mid October, one should keep the upside risk open that the trend, led by AI and semiconductor leaders, could turn at any time, even before October.
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As we go to the huge earnings next week… just realize that “AI agents” didn’t really gain traction until middle to late Dec 2025 and into Jan 2026. That was when you had claudbot/moltbot/openclaw giving everyone a use case for everyone to mimic. Including enterprise. You had every Mac mini sold out. So Q1 when 24/7 orchestration and inference really ballooned. That’s why you had Anthropic tripled their revenue run rate from $10B to $30B. None of these were part of any guidance for Azure, AWS, and GCP when they reported earnings and provided Q1 guidance. $AMZN $MSFT $GOOG $AAPL
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To all new $INTC investors. Welcome to becoming an INTEL-ionnaire. If you are long term, nothing to worry about; don’t even read this. If you’ve been an $INTC investor, there are some short term mechanics that will fuck you up in the short term. One of them is OPEX day. Friday, April 17th is a big options expiring day. For $INTC, with a run up from $42 just two weeks ago… you will most likely be fucked without them diamond hands. Some of the rally fuel is driven by a gamma squeeze from all the call options dealers. Basically with all the catalysts from April 1st, dealers had to buy actual shares to mitigate their call options selling. Most of these options will expire this Friday. You can already see some of the distributions/positioning happening leading up to this yesterday with some unusual activities; particularly on the $64 puts expiring Fri. This won’t impact you because you are a long term investor. See you at $500B+ valuation. But at the same, just be aware of some short term traps. Carry tf on. $INTC NFA, DYODD, DYOR.
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Ran the algo on $INTC. Composite score 67.7/100, grade A-. MA convergence method hit 90/100 (strong buy) and ensemble rules came in at 63. Z-score method was the holdout at 50 (neutral). Validation flagged weak at 24.6% variance... methods agree on direction but not conviction. At $62.38, RSI is 79.3 (overbought) after a 29.88% run in 20 sessions. Support at $60.13 is where I'd set a stop. Resistance at $64.40. IV rank 40/100 so options are relatively cheap. Bull call spreads if you want defined risk. But 78.59% annualized vol means this moves fast both ways. Q1 earnings April 23, 11 days out. I don't hate the A- grade but the overbought RSI makes me want to wait for a pullback toward $60 before adding. Not chasing at 79 RSI with earnings this close.
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Ran the algo on $PLTR. 3-method cross-validation came back bearish. All three methods agree at 100% directional consensus, which doesn't happen often. At $128.06, it's trading 14.4% below the 50-day MA ($146.55). Z-score at -0.52. IV in the 60-75th percentile, so selling premium looks more attractive than going directional. My read: iron condor $125/$120/$135/$140, 70-75% win probability per the model. Expected credit around $2.25-$3.25. Conviction is 5/10 though. If you're playing it, define your risk and don't oversize.
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$MSFT reports Q3 on April 29. Azure grew 39% last quarter. Copilot has 15 million paying subscribers out of 450 million Office users. That's 3.3% penetration. Stock pulled back from $410 to $370. The question every buyer needs to answer: is 3.3% Copilot penetration the floor or the ceiling? If it's the floor, $370 is a gift. If AI monetization stalls here, the multiple compression has further to go. Earnings in 17 days will give us a read.
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Michael Burry filed a $JD position on April 10. Stock at $28.93, sitting above its 20 and 50-day moving averages for the first time since January. Analyst consensus PT is $38.64... that's 32% above where it trades right now. The guy who called the housing crisis is buying Chinese e-commerce while sentiment sits in the basement. RSI at 58, not crowded yet. I could be wrong on timing but the risk/reward here looks asymmetric. If it breaks below the 50-day, I'm out.
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$TTD at $20.09. Down 63% in twelve months. Ran the numbers. Every MA pointing lower. RSI at 36, getting close to oversold. Price is less than half the 200-day ($46.88). My algo composite comes in at 3.5/10. All three ML methods agree: bearish. MA convergence scored 0 out of 8 bullish conditions. But one thing doesn't fit: options flow. Put/call ratio at 0.51. Someone's positioning long in a tape that looks terrible. 29 analysts still carry an avg PT of $31.81... 53% above current price. Q4 beat expectations by 18%. Next earnings May 7. Guide is $678M revenue for Q1, roughly 10% growth. Potential OpenAI partnership in the works. Three execs walked recently. Wedbush cut to Underperform. Wells Fargo dropped PT to $24. The bear case has teeth and the execution concerns are earned. At $20, you don't need perfection. You need them to not fall apart. Watching May 7. NFA. $TTD
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Karpathy's framing here is precise, but I think it understates the structural reason for the gap. What's happened isn't a perception lag. AI companies have accidentally built two completely separate technologies and called them the same thing. The consumer chatbot and the agentic coding model share a common ancestor, but the paths diverged the moment reinforcement learning met verifiable rewards. Consider the mechanism. When you train a model to write code, you can check its work: tests pass or they don't, code compiles or it doesn't. That binary signal is gold for RL training. Models get better fast, which means enterprise customers pay more, which means more compute gets allocated to coding improvements. It's a flywheel with a clean reward function. Now try "write me a better email." There's no unit test for tone. No compiler for nuance. Reward is mushy, training is slower, and the consumer product improves at a fraction of the rate. Two capability curves with totally different slopes, wearing the same brand name. What I'd add to Karpathy's point: this gap isn't temporary. Economics are structural. Verifiable domains will keep pulling away from fuzzy ones because that's where training signal is cleanest and revenue is highest. If you're forming opinions about AI from the chatbot, you're watching the slow curve and extrapolating to the fast one. You're looking at the wrong dashboard. xitter.cf/karpathy/status/204233…
Judging by my tl there is a growing gap in understanding of AI capability. The first issue I think is around recency and tier of use. I think a lot of people tried the free tier of ChatGPT somewhere last year and allowed it to inform their views on AI a little too much. This is a group of reactions laughing at various quirks of the models, hallucinations, etc. Yes I also saw the viral videos of OpenAI's Advanced Voice mode fumbling simple queries like "should I drive or walk to the carwash". The thing is that these free and old/deprecated models don't reflect the capability in the latest round of state of the art agentic models of this year, especially OpenAI Codex and Claude Code. But that brings me to the second issue. Even if people paid $200/month to use the state of the art models, a lot of the capabilities are relatively "peaky" in highly technical areas. Typical queries around search, writing, advice, etc. are *not* the domain that has made the most noticeable and dramatic strides in capability. Partly, this is due to the technical details of reinforcement learning and its use of verifiable rewards. But partly, it's also because these use cases are not sufficiently prioritized by the companies in their hillclimbing because they don't lead to as much $$$ value. The goldmines are elsewhere, and the focus comes along. So that brings me to the second group of people, who *both* 1) pay for and use the state of the art frontier agentic models (OpenAI Codex / Claude Code) and 2) do so professionally in technical domains like programming, math and research. This group of people is subject to the highest amount of "AI Psychosis" because the recent improvements in these domains as of this year have been nothing short of staggering. When you hand a computer terminal to one of these models, you can now watch them melt programming problems that you'd normally expect to take days/weeks of work. It's this second group of people that assigns a much greater gravity to the capabilities, their slope, and various cyber-related repercussions. TLDR the people in these two groups are speaking past each other. It really is simultaneously the case that OpenAI's free and I think slightly orphaned (?) "Advanced Voice Mode" will fumble the dumbest questions in your Instagram's reels and *at the same time*, OpenAI's highest-tier and paid Codex model will go off for 1 hour to coherently restructure an entire code base, or find and exploit vulnerabilities in computer systems. This part really works and has made dramatic strides because 2 properties: 1) these domains offer explicit reward functions that are verifiable meaning they are easily amenable to reinforcement learning training (e.g. unit tests passed yes or no, in contrast to writing, which is much harder to explicitly judge), but also 2) they are a lot more valuable in b2b settings, meaning that the biggest fraction of the team is focused on improving them. So here we are.
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Both numbers below consensus and the $NVDA chart is reacting in real time. Stock at $183.91, reclaimed its 50-day SMA ($182.14) and EMA9 ($178.39) just crossed above EMA20 ($178.18) for the first time in weeks. That crossover on a soft CPI print is the kind of technical confirmation growth investors watch for. The setup: core decelerating while AI capex budgets stay locked in. Rate-sensitive tech with secular demand gets repriced higher on prints like this. $NVDA sitting right at support with momentum flipping bullish.
CPI was up 2.6%, est: 2.7% Core CPI rises 0.2% M/M, est 0.3%
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Below forecast and the semi tape is confirming it. $INTC at $61.72 is now 31.5% above its 50-day SMA ($46.94) with EMA9 running 6.9% above EMA20... that's the strongest momentum reading in the entire SOX right now. $AMD at $236.64 sitting 13% above its own SMA50 with a clean 3.5% EMA cross. Cooler core CPI keeps the rate backdrop supportive and these names are trading like the market already knows it. Semis front-running the Fed again.
JUST IN: US CPI YoY actual 3.3% (forecast 3.4%, previous 2.4%)
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+10.9% energy in one month. Last time we saw this kind of move was Hurricane Katrina disrupting Gulf refineries. This time it's the Strait of Hormuz and there's no quick fix... you can't rebuild shipping lanes like you rebuild a refinery. What's different from 2005: the US is a net energy producer now. $XOM $CVX $OXY are printing cash while consumers eat the price hike. That divergence between energy producers and energy consumers is going to define portfolio construction for the rest of 2026.
BREAKING: US energy inflation surged +10.9% in March 2026 amid the Iran War, marking the biggest monthly jump since 2005.
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3.3% headline but 2.6% core. Two very different numbers telling two very different stories. The headline is an energy shock from the Iran conflict... the core is an economy where underlying demand pressure is actually cooling. Markets are going to fight over which number matters more. My read: the bond market cares about core (bullish for duration), the consumer cares about headline (bearish for spending). Both can be right simultaneously, and that's the awkward spot the Fed is in right now.
BREAKING: 🇺🇸 US inflation rises to 3.3%.
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Market pricing out cuts for 2026 while core came in below expectations. That tension tells you something... the headline number (3.3%) is doing all the heavy lifting via energy, and energy is a geopolitical variable, not a monetary one. The Fed can't hike away a war premium in the Strait of Hormuz. What matters for positioning: if you strip energy, the underlying trend is actually decelerating. That's why $TLT caught a bid this morning and why duration-sensitive names like $NVDA aren't selling off on a "hot" print.
BREAKING: March CPI inflation RISES to 3.3%, below expectations of 3.4%. Core CPI inflation rise to 2.6%, below expectations of 2.7%. CPI inflation is now up to its highest level since May 2024 amid the Iran War. Fed rate cuts have been priced-out for 2026.
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Daly pre-spinning the CPI print. When a Fed governor says "won't surprise anyone" before the number drops, they're managing expectations for something ugly. Meanwhile the market doesn't care. $TSM at $365.49, trading 4.4% above its 50-day moving average ($350). $NVDA reclaimed its 50-day at $182. Semis are pricing in AI demand that makes CPI readings feel like background noise. The bond market is worried. Equities are looking right through it.
🔴 Fed's Daly: High CPI reading will not be a surprise to anyone.
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$LITE moving premarket on the same AI optical networking thesis I flagged yesterday. The whole photonics supply chain ($LITE, $COHR, $II_VI) trades on $NVDA capex expectations. Speaking of which... $NVDA at $183.91, just reclaimed its 50-day SMA ($182.14) with EMA9 crossing above EMA20 for the first time in three weeks. Short-term momentum flipping. If it holds above $180, the next move is $195-200.
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two years and $GOOGL $AAPL $META haven't changed a single business practice. The fines are a rounding error on their cash flows... $GOOGL alone generated $100B+ in operating cash last year. The EU is treating these fines like revenue, not regulation. And US tech keeps paying because the alternative (losing EU market access) costs 10x more. It's a toll road, not a law.
The European Commission 🇪🇺 has issued more than $7 Billion in fines to 🇺🇸 Big Tech companies over the past two years - SA
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Europe is learning the same lesson the US learned after 2022... energy independence isn't a slogan, it's a national security requirement. Ireland imports 100% of its oil. When the Strait of Hormuz gets threatened, that dependency shows up at the pump within weeks. This is why $XOM $CVX and the entire energy complex aren't going away no matter how many green transition targets get set. You can't run a modern economy on hope when tanker routes get disrupted.
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Daly stacking conditionals like a derivatives contract. "If Iran resolves AND oil drops AND CPI cools"... that's three binary outcomes she's chaining together before she'll consider cutting. Translation: the Fed isn't cutting anytime soon. They're building optionality language so they can say they were always open to it when they eventually do, probably 2027 at this rate.
Fed's Daly: If Iran conflict resolves quickly and oil prices come back down, a rate cut is not out of the question.
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