WEBVTT - The Black Market for AI GPUs with Steve Burke 0:00:02.160 --> 0:00:06.000 Also media, Hello and welcome to Better Offline. 0:00:06.000 --> 0:00:20.600 I'm your host ed ZiT Tron. And of course you 0:00:20.600 --> 0:00:23.400 can go into the notes for the episode. You can 0:00:23.440 --> 0:00:25.280 take a look at links from a newsletter. You can 0:00:25.320 --> 0:00:28.160 go and buy some merch as always, but much more importantly, 0:00:28.160 --> 0:00:31.200 today I'm joined by the esteem Steve Burke of Gamers Nexus. Steve, 0:00:31.200 --> 0:00:32.080 thank you for joining. 0:00:31.920 --> 0:00:33.199 Us, Thanks for having me. 0:00:33.960 --> 0:00:36.960 So you did an incredible video on the black market 0:00:37.080 --> 0:00:40.559 smuggling of in videos AI GPUs into China, and then 0:00:40.600 --> 0:00:43.160 there has been a thing that's happened where the video 0:00:43.200 --> 0:00:46.840 has been pulled down due to a DMCA complaint from Bloomberg. 0:00:46.920 --> 0:00:47.760 What is happening? 0:00:50.320 --> 0:00:54.960 Yeah, it's so the video, it's really cool video where 0:00:55.000 --> 0:00:58.200 we went all over China finding these GPUs. As part 0:00:58.240 --> 0:01:02.480 of that, we included a recap of all the news 0:01:02.480 --> 0:01:05.880 of export controls or the US controls GPUs that are 0:01:06.840 --> 0:01:12.440 above a certain performance threshold and the allowance to export 0:01:12.480 --> 0:01:15.160 those to China by American companies, and so that was 0:01:15.200 --> 0:01:17.240 the story we wanted to look into. Okay, but they're 0:01:17.240 --> 0:01:20.320 still getting to China and so how is that? And 0:01:20.959 --> 0:01:23.479 as part of that recap, go through all the news 0:01:23.480 --> 0:01:26.600 we've got clips of you know, various politicians. There was 0:01:26.600 --> 0:01:29.039 a clip of Obama in there, and there was a 0:01:29.040 --> 0:01:31.800 clip of Trump in there, a couple of them talking 0:01:31.840 --> 0:01:35.400 about AI or GPU export control bands. Of course AI, 0:01:35.520 --> 0:01:41.400 I know ed is one of your favorite topics. Yes, yes, 0:01:41.920 --> 0:01:48.080 me as well. And yeah, so we received a copyright 0:01:48.080 --> 0:01:56.400 strike from small, small publication called the Bloomberg. Yeah. So 0:01:56.480 --> 0:02:01.080 that strike took the video offline and now we are 0:02:01.120 --> 0:02:04.600 currently challenging it. And so the strike was for specifically, 0:02:04.600 --> 0:02:07.680 I believe it was minutes twenty two until minute twenty 0:02:07.720 --> 0:02:09.400 three point fifteen in the video. 0:02:10.000 --> 0:02:14.200 Of Donald Trump speaking the President of America. Correct, Yes, 0:02:14.720 --> 0:02:18.120 that is ludicrous. And you went to New York specifically 0:02:18.160 --> 0:02:20.440 to have it out with them, did they Where do 0:02:20.480 --> 0:02:22.200 we stand as we speak, because this is going out 0:02:22.320 --> 0:02:24.480 in about a week from now. It's August twenty eighth, 0:02:24.520 --> 0:02:27.080 so who knows what twenty sixth even, I don't know 0:02:27.120 --> 0:02:28.239 what happened next. 0:02:28.480 --> 0:02:30.640 Yeah, if it goes out in about a week, then 0:02:30.880 --> 0:02:32.720 that'll be pretty close to when we should have an 0:02:32.800 --> 0:02:34.600 update from YouTube. 0:02:35.360 --> 0:02:36.960 Because the video is off right now. 0:02:37.400 --> 0:02:41.880 Correct, the video's gone. And it's very interesting how copyright 0:02:41.960 --> 0:02:45.720 strikes work because if basically the way it works is 0:02:45.760 --> 0:02:50.760 a company files a strike. They decide if there's infringement 0:02:50.800 --> 0:02:55.720 of some kind, and they file it. YouTube then basically, 0:02:55.840 --> 0:02:59.919 especially for comedy, Bloomberg size will automatically approve it. It's then 0:03:00.120 --> 0:03:03.080 up to the creator to dispute that the videos offline. 0:03:03.120 --> 0:03:07.040 During this entire process, any money from the video is 0:03:07.080 --> 0:03:11.560 held at least in escrow, and so then you can 0:03:11.600 --> 0:03:14.480 dispute it if you want. At that stage, YouTube then 0:03:14.520 --> 0:03:16.960 decides if it's going to accept your dispute. It accepted. 0:03:16.960 --> 0:03:19.040 Ours is written by a lawyer, so that makes sense, 0:03:19.919 --> 0:03:22.160 and then they step back and they're like, Okay, we're 0:03:22.200 --> 0:03:26.440 not involved anymore. It's between you guys. And so the 0:03:26.600 --> 0:03:30.679 party that filed the claimant, so Bloomberg here, has ten 0:03:30.760 --> 0:03:35.680 business days to file proof of lawsuits. So they if 0:03:35.720 --> 0:03:38.560 they submit to YouTube proof that they are suing us, 0:03:38.560 --> 0:03:40.560 which thus far as we record this, they have not, 0:03:42.400 --> 0:03:45.760 then at that stage YouTube would keep the video offline 0:03:45.920 --> 0:03:47.640 and they kind of let the two parties resolve that 0:03:47.680 --> 0:03:50.920 amongst themselves. If they don't submit any proof of a 0:03:51.000 --> 0:03:53.440 lawsuit or they don't file a lawsuit and then show 0:03:53.480 --> 0:03:56.760 YouTube that they've done so, again, they haven't at this point. 0:03:56.880 --> 0:04:00.000 Then basically in ten business days the video goes back up. 0:04:01.000 --> 0:04:03.320 We get fucked over for the ten days in between, 0:04:03.800 --> 0:04:08.360 and then the money, in theory should be released back 0:04:08.360 --> 0:04:10.200 to us, the ad revenue that was made from it, 0:04:10.600 --> 0:04:14.200 if it follows that course. But the biggest damage that's 0:04:14.240 --> 0:04:17.480 done is from the loss of momentum in those you know, 0:04:17.720 --> 0:04:21.440 total time period maybe thirteen days or so. But why would. 0:04:21.200 --> 0:04:24.880 Bloomberg do this? Are they really that attached to videos 0:04:24.880 --> 0:04:26.840 of Donald Trump? Or is it something else? 0:04:27.720 --> 0:04:31.640 I mean, I yeah, we talked about this in our 0:04:31.720 --> 0:04:34.239 video where we flew out to try and speak with them. 0:04:36.360 --> 0:04:40.760 I have a number of theories. We don't know their 0:04:40.839 --> 0:04:44.479 motive precisely, but you know, there's a few strange things 0:04:44.520 --> 0:04:48.599 going on where first of all, I've noticed that they 0:04:48.640 --> 0:04:52.960 have not claimed any or struck any that I'm aware 0:04:53.000 --> 0:04:56.480 of the re uploads of the video. So that's interesting 0:04:56.520 --> 0:04:59.400 because there's hundreds of them. It was just hours that 0:04:59.400 --> 0:05:03.839 want top initially. Secondly, we have used that clip before 0:05:04.279 --> 0:05:08.839 and that hasn't been stricken and so specifically in this 0:05:08.920 --> 0:05:14.440 black market video. And yeah, the theories we came up 0:05:14.440 --> 0:05:17.880 with were there's some competing content from Bloomberg where they 0:05:17.920 --> 0:05:22.120 attempted to do what we did. It was really a 0:05:22.160 --> 0:05:26.440 failed attempt. They tried to find smuggled ai GPUs in 0:05:26.520 --> 0:05:28.359 China as far as they kind of presented it in 0:05:28.440 --> 0:05:30.719 data centers, they were unable to do so they couldn't 0:05:30.720 --> 0:05:33.480 get any access. They filmed sand in the desert. They 0:05:33.520 --> 0:05:39.280 go home. There's also that's all they go. Yeah, they 0:05:39.400 --> 0:05:42.000 drive around at a desert, they point the camera at 0:05:42.000 --> 0:05:45.000 some buildings that are being constructed. They say, you know, 0:05:45.760 --> 0:05:49.080 there's ai GPUs in them their hills, and then that's 0:05:49.120 --> 0:05:51.240 about it. 0:05:51.520 --> 0:05:54.600 It's kind of funny that you you appear to on 0:05:54.640 --> 0:05:57.760 your own and with your with your team obviously able 0:05:57.800 --> 0:06:00.960 to get this access to these large legacy media people don't, 0:06:01.000 --> 0:06:03.440 which it's meant to be the other way around based 0:06:03.480 --> 0:06:04.479 on what everyone says. 0:06:05.040 --> 0:06:08.720 So what is it the makes your approach. 0:06:08.440 --> 0:06:11.400 Different to bloombugs, Like why did you get stuff that 0:06:11.440 --> 0:06:12.919 they didn't? 0:06:13.040 --> 0:06:17.000 I think rather than just the desert, right, Yeah, Well, 0:06:17.080 --> 0:06:20.039 to be fair, we did not film the desert, so 0:06:20.040 --> 0:06:25.040 they did have an exclusive there. But I think it 0:06:25.040 --> 0:06:27.919 comes down to the approach where we looked at it 0:06:28.000 --> 0:06:30.679 like this is an interesting concept, this idea of black 0:06:30.720 --> 0:06:36.000 market GPUs, But from my point of view, we approached 0:06:36.000 --> 0:06:38.600 it as well, let's just see what are the people 0:06:38.640 --> 0:06:43.560 involved in this chain think and do they think it's 0:06:43.680 --> 0:06:45.960 a black market or do they just think it's a market. 0:06:47.720 --> 0:06:50.320 And a lot of the people we worked with were just, 0:06:51.040 --> 0:06:53.760 I think, amused at the concept of being involved in 0:06:53.800 --> 0:06:56.760 the media process and wanted to see how it works. 0:06:57.560 --> 0:07:00.080 And so I honestly, I think a lot of that access, 0:07:00.320 --> 0:07:02.159 especially to the people who are just sort of like 0:07:02.320 --> 0:07:05.960 normal people. They're not these big, you know, executives at 0:07:06.000 --> 0:07:10.040 some huge corporation. They're they're middleman and they're people transacting 0:07:10.080 --> 0:07:14.680 GPUs on the ground. I think for them, if you 0:07:14.760 --> 0:07:19.360 go into it without this free supposition of some kind 0:07:19.400 --> 0:07:26.280 of particular i don't know, leaning or ethics of whether 0:07:26.640 --> 0:07:28.960 what they're doing is or isn't okay or whatever, or. 0:07:29.000 --> 0:07:31.880 Even expecting what you'll find exactly. 0:07:32.320 --> 0:07:34.760 Yeah, I think if you go in with an open 0:07:34.760 --> 0:07:36.360 mind of like we're just gonna hang out with this 0:07:36.400 --> 0:07:39.960 guy for a day and just observe his job, people 0:07:39.960 --> 0:07:42.120 are you know, they're pretty happy to share that. 0:07:42.360 --> 0:07:46.680 So, yeah, how did you actually start those? So you 0:07:46.960 --> 0:07:48.480 you came up with the idea that you wanted to 0:07:48.520 --> 0:07:52.000 see how elicit GPUs making it into China. Did you 0:07:52.360 --> 0:07:54.800 have contacts in China or Hong Kong and so on 0:07:54.960 --> 0:07:57.760 that you talk to in advance and they kind of say, oh, 0:07:57.800 --> 0:07:59.480 if you come here, we can show you this. What 0:08:00.280 --> 0:08:01.560 was the process? 0:08:02.120 --> 0:08:06.040 Yeah, the process was really cool. We're still kind of 0:08:06.080 --> 0:08:10.400 learning how to iterate on this, but each time we're 0:08:11.160 --> 0:08:14.720 The big thing we learned this time for this investigation 0:08:15.840 --> 0:08:20.800 was really just trying to that first contact matters a lot, 0:08:21.080 --> 0:08:22.920 and being able to work with that first person we 0:08:22.960 --> 0:08:25.640 find to then find their contacts and kind of follow 0:08:25.680 --> 0:08:28.440 the chain down the line. And so the first guy 0:08:28.480 --> 0:08:31.240 we found is a professor at the Chinese University of 0:08:31.240 --> 0:08:37.760 Hong Kong. He buys and uses these high end GPUs 0:08:37.800 --> 0:08:42.520 in servers for educational purposes and research purposes. And as 0:08:42.520 --> 0:08:46.600 soon as we made contact with him, we were able 0:08:46.640 --> 0:08:50.160 to work with someone who first of all speaks you know, 0:08:50.360 --> 0:08:54.439 native level excellent English, so that certainly helped. And then 0:08:54.480 --> 0:08:57.720 secondly who has a lot of local knowledge and contacts. 0:08:58.040 --> 0:09:00.280 And I think a lot of it is just kind 0:09:00.280 --> 0:09:06.520 of knowing which, in our case, which link in the 0:09:06.600 --> 0:09:09.760 chain you need next to make the story makes sense. 0:09:09.840 --> 0:09:13.119 So in his case, he's a user of these GPUs. 0:09:13.600 --> 0:09:16.200 So next we need is some kind of supplier, you know, 0:09:16.200 --> 0:09:17.439 and then we need their supplier. 0:09:17.679 --> 0:09:22.200 Yeah, so what it's all quite complex. I did watch 0:09:22.240 --> 0:09:24.680 the video and it was it was what three three 0:09:24.720 --> 0:09:28.600 hours or so or more even really wonderful. And so 0:09:29.120 --> 0:09:31.679 what exactly are the GPUs that are restricted? Was it 0:09:31.880 --> 0:09:35.480 just aigpus? Was it like consumer level ones as well? 0:09:35.880 --> 0:09:37.960 What is exactly being handed around? 0:09:39.400 --> 0:09:45.800 It's both. So on the high end side, there's some 0:09:46.640 --> 0:09:51.240 smuggling and presence of these data center class GPUs, so 0:09:51.280 --> 0:09:55.840 that'd be things like EH one hundreds, Hopper one hundreds, 0:09:55.880 --> 0:09:59.040 A one hundreds. We actually physically saw several of those 0:10:00.000 --> 0:10:04.480 and things like that. On the consumer side, there aren't 0:10:04.520 --> 0:10:06.920 as many restricted consumer GPUs, but there are a few. 0:10:06.960 --> 0:10:10.480 So the RTX fifty ninety is one of them that 0:10:10.520 --> 0:10:13.720 has thirty two gigabytes of video memories. That's very valuable 0:10:13.720 --> 0:10:17.480 for these use cases. The ARTAX forty ninety actually is 0:10:17.520 --> 0:10:21.319 another one, and that one's kind of amusing because it's 0:10:21.440 --> 0:10:27.520 so GPU right, yes, consumer GPU, yeah, and last gen 0:10:27.600 --> 0:10:32.600 consumer GPU at that, but it's easily modified to carry 0:10:32.679 --> 0:10:37.160 double the video memory as the actual official end video 0:10:37.360 --> 0:10:42.319 spec and the skew so they can increase it from 0:10:42.320 --> 0:10:44.880 twenty four to forty eight gigabytes of memory, which is 0:10:45.080 --> 0:10:50.440 extremely valuable for these training and LLM type tasks where 0:10:51.520 --> 0:10:53.319 it may be a last gen So it's technically a 0:10:53.320 --> 0:10:56.640 little bit slower, but if you can fit it in memory, 0:10:56.800 --> 0:10:58.559 you can still run it, versus if you can't fit 0:10:58.600 --> 0:11:00.040 it in memory of the model you made, not be 0:11:00.080 --> 0:11:02.880 able to run it at all. And so those are 0:11:02.920 --> 0:11:06.480 the consumer cards the forty ninety. That was interesting because 0:11:07.040 --> 0:11:11.360 one of the guys we spoke to who is effectively 0:11:11.400 --> 0:11:15.680 a buyer and seller of these band GPUs, he was 0:11:15.720 --> 0:11:20.240 asking me on camera. He was seeking confirmation of well, 0:11:20.679 --> 0:11:23.560 but are you sure the fifty nineties banned? Yeah? And 0:11:23.600 --> 0:11:26.280 I said, yeah, I'm sure. Here it is on the list. 0:11:27.200 --> 0:11:31.560 And he was so confused because he said, but they're 0:11:31.600 --> 0:11:35.560 just all over the market next door. We walk over 0:11:35.600 --> 0:11:37.160 there and there's dozens of them. 0:11:37.320 --> 0:11:51.440 So it's so strange as well, because it doesn't seem 0:11:51.480 --> 0:11:54.640 like you basically walked off the plane and had a 0:11:54.679 --> 0:11:58.280 price sheet from just a guy, Like it wasn't clear 0:11:58.320 --> 0:12:00.920 how you got the price sheet exactly. Perhaps you can't say, 0:12:00.960 --> 0:12:03.480 but it was just Yeah, these things a band other 0:12:03.520 --> 0:12:05.160 than the fact we have just like guys who sell 0:12:05.240 --> 0:12:09.280 them literally everywhere. Yeah, getting in. 0:12:10.679 --> 0:12:12.840 So there's a couple of ways. The one of the 0:12:12.840 --> 0:12:15.640 ones that we showed in the video is really interesting. 0:12:16.800 --> 0:12:19.559 To the very end of the process. We actually this 0:12:19.600 --> 0:12:23.079 is one of the reasons we delayed initial publication. We 0:12:23.080 --> 0:12:27.560 were able to, with help of a viewer, locate someone 0:12:27.600 --> 0:12:30.520 you could actually classify as a smuggler in the US. 0:12:30.679 --> 0:12:34.360 So someone from China in the US. 0:12:34.960 --> 0:12:35.440 And. 0:12:37.000 --> 0:12:41.400 He buys GPUs from people in the US. He drives 0:12:41.440 --> 0:12:45.240 around all over and buys most through forty nineties, which 0:12:45.240 --> 0:12:48.600 are in a high demand in China, and then he'll 0:12:48.600 --> 0:12:52.440 strip those downs that could be removing the cooler. I 0:12:52.480 --> 0:12:56.160 don't think this particular guy disolders them. I've heard stories 0:12:56.160 --> 0:12:59.040 of some people desoldering GPUs and mailing them that would 0:12:59.040 --> 0:13:02.000 reduce your shipping costs a lot, increase your margin. But 0:13:02.120 --> 0:13:05.080 he buys the forty nineties ships the boards back his 0:13:05.160 --> 0:13:08.720 profits about three hundred dollars US per board before taxes. 0:13:08.920 --> 0:13:11.640 It wasn't a one hundred percent clear if he does or 0:13:11.679 --> 0:13:17.600 doesn't pay taxes. And then at that point, once they 0:13:17.880 --> 0:13:23.920 are either shipped into Hong Kong or Macau directly if 0:13:23.960 --> 0:13:27.400 they feel gutsy enough, or indirectly through a third country, 0:13:27.400 --> 0:13:31.000 a middle country where there is no export control, you know, 0:13:31.040 --> 0:13:33.840 then they arrive and they get redistributed from there. There's 0:13:33.880 --> 0:13:37.680 sometimes hand carried as well, like by students, international students 0:13:37.720 --> 0:13:39.840 who just fly back with a fifty ninety. They bought 0:13:39.840 --> 0:13:41.960 it best Buy or something, and they can double their 0:13:42.000 --> 0:13:43.880 money roughly if they're lucky. 0:13:44.120 --> 0:13:47.040 That's so, it's wacky that there is such a big 0:13:47.080 --> 0:13:50.280 black market, but I guess the export bends just created it, 0:13:50.320 --> 0:13:55.200 as did this whole AI, this crazed AI moment. Did 0:13:55.320 --> 0:13:58.000 in fact, while you were over over in Hong Kong, 0:13:58.040 --> 0:14:00.199 did you actually go to China or can't remember? It 0:14:00.280 --> 0:14:02.880 was just in home? So did you? This is an 0:14:02.960 --> 0:14:06.160 anecdotal thing. How was the pressure of AI there? How 0:14:06.200 --> 0:14:09.400 big was the conversation the advertisement? Did you see it 0:14:09.880 --> 0:14:11.800 on the same level? It's fine if you didn't, I'm 0:14:11.800 --> 0:14:12.400 just curious. 0:14:12.640 --> 0:14:15.200 I saw it more in Taiwan, which we went to 0:14:15.240 --> 0:14:18.040 as well. So yeah, after the China trip, we went 0:14:18.080 --> 0:14:20.840 over to Taiwan, and I don't think it made it 0:14:20.840 --> 0:14:23.720 into the cut, but we shot a short clip of 0:14:24.840 --> 0:14:27.359 just a bus, like a public bus with a gigantic 0:14:27.920 --> 0:14:32.080 AI the laptop advertisement on it. So I would say 0:14:32.560 --> 0:14:34.720 it's kind of at least there, it's similar to what 0:14:34.720 --> 0:14:39.200 you see here where it's you know, if you're anywhere 0:14:39.200 --> 0:14:42.440 in the vicinity of a best Buy or a city 0:14:42.440 --> 0:14:46.360 that has technology dealers, then you're gonna see AI ads 0:14:46.800 --> 0:14:50.600 In China, Yeah, I saw it in the tech markets 0:14:50.600 --> 0:14:54.040 for sure, some banners, but it just it. I don't know. 0:14:54.120 --> 0:14:58.440 That's I only understand Chinese if I'm actively trying to 0:14:58.520 --> 0:14:59.960 understand it, you know. So it's I think a lot 0:15:00.120 --> 0:15:03.160 like it's filtered out for me, right, Yeah, I was good. 0:15:03.360 --> 0:15:05.400 Yeah, I assume you speak some You seem to speak 0:15:05.440 --> 0:15:08.360 some Chinese. I can't speak anything but English, so I 0:15:08.600 --> 0:15:10.240 could not correct your Chinese, doll. 0:15:10.400 --> 0:15:12.800 You do speak more proper English than I do, though, 0:15:12.840 --> 0:15:13.160 so I'll. 0:15:13.080 --> 0:15:16.480 Get Yeah, yeah, I speak all kinds of it. These days. 0:15:16.280 --> 0:15:19.240 It's not going well. People criticize my accent all the time. 0:15:19.800 --> 0:15:23.600 So as far as how the government sets these limits, 0:15:23.600 --> 0:15:25.640 one thing he did really eloquently towards the beginning of 0:15:25.680 --> 0:15:27.200 the video as well, was he kind of went through 0:15:27.240 --> 0:15:30.720 how arbitrary the limits seemed to be and how in 0:15:30.840 --> 0:15:34.440 Video seems very capable of adapting around them to the 0:15:34.440 --> 0:15:36.600 point they almost doesn't make sense. 0:15:37.400 --> 0:15:43.000 Yeah, yeah, they they've modified the regulations a few times. 0:15:43.280 --> 0:15:50.680 And it's it's so this particular part I don't really 0:15:50.720 --> 0:15:53.560 blame and video for for this, which is just trying 0:15:53.600 --> 0:15:57.360 to you know, the government sets some regulations and a 0:15:57.440 --> 0:16:00.480 company says, okay, we'll comply with these, and then they 0:16:00.520 --> 0:16:03.000 comply with them, and then the government kind of says 0:16:03.000 --> 0:16:04.000 no weight not like that. 0:16:04.480 --> 0:16:08.240 Yeah, that's very standard for pretty much or regulation. It 0:16:08.320 --> 0:16:10.400 maybe it's good or bad what have you, but it's not. 0:16:11.720 --> 0:16:13.640 It happens all the time with companies. 0:16:14.200 --> 0:16:17.520 Yes, And in this case, one of the things that 0:16:17.600 --> 0:16:23.560 as the I guess AI world developed and the applications, 0:16:24.280 --> 0:16:28.360 one of the things that changed was this understanding that 0:16:28.760 --> 0:16:32.960 memory capacity is basically the most important aspect of it. 0:16:32.960 --> 0:16:36.080 And the initial versions of the formula didn't consider memory 0:16:36.400 --> 0:16:40.920 in any scenario. What I remember, it was based on 0:16:41.000 --> 0:16:45.880 the marketed flops of performance on the spec sheet multiplied 0:16:46.160 --> 0:16:50.040 against the bit length of the operation or something like that, 0:16:50.480 --> 0:16:56.040 and they later added memory bandwidth. Memory capacity though is 0:16:56.080 --> 0:16:58.920 still as far as I'm aware right now, is still 0:16:58.960 --> 0:17:01.400 not considered in the formula. 0:17:01.520 --> 0:17:04.119 Yeah, it just it feels just arbitrary. But I imagine 0:17:04.160 --> 0:17:07.840 also it's quite difficult to find a way to do this, 0:17:08.200 --> 0:17:10.760 especially when the people setting the regulation might not have 0:17:10.800 --> 0:17:12.720 the best handle on computers. 0:17:13.880 --> 0:17:16.600 Yeah, I think I think the best way to do 0:17:16.640 --> 0:17:18.800 this would probably be if they wanted to and I'm 0:17:18.840 --> 0:17:21.320 not I don't have a particular one way or the other, 0:17:21.359 --> 0:17:23.159 but if they wanted to control it, I think the 0:17:23.160 --> 0:17:26.120 best way is probably some kind of benchmark or set 0:17:26.160 --> 0:17:28.199 of benchmarks, just like you would do for a review, 0:17:29.000 --> 0:17:33.200 where you know, you say, okay, if it exceeds some 0:17:33.240 --> 0:17:36.240 performance threshold in this real world use case or multiple 0:17:36.240 --> 0:17:40.280 of them in aggregate, then it's control, it's export controlled. 0:17:40.320 --> 0:17:43.560 But instead they just kind of calculate based on the 0:17:43.600 --> 0:17:46.040 spec sheet and the companies that make these things. Obviously, 0:17:46.960 --> 0:17:51.119 you know, full appropriate credit to Nvidia. The company is 0:17:51.200 --> 0:17:54.320 extremely confident with making GPUs. They know what they're doing, 0:17:55.119 --> 0:17:58.159 and they're going to know a lot more about how 0:17:58.160 --> 0:18:03.560 to tweak those dials to comply then a government agency 0:18:03.560 --> 0:18:05.159 will so. 0:18:05.160 --> 0:18:08.040 So on the subject of Nvidia knowing things, do you 0:18:08.040 --> 0:18:10.760 think that do they seem aware of any of this, 0:18:11.440 --> 0:18:13.879 like any of any of this smuggling happening. Do they 0:18:13.920 --> 0:18:16.280 seem to Did you get any comment out of them? 0:18:17.640 --> 0:18:20.520 We asked a lot of the people in the chain 0:18:20.880 --> 0:18:27.120 what their perception was of Nvidia's awareness, and so the 0:18:27.119 --> 0:18:30.719 professor at the Chinese University of Hong Kong, he had 0:18:30.720 --> 0:18:32.159 a great answer when I asked him, do you think 0:18:32.280 --> 0:18:35.639 Nvidia knows? And he kind of he paused for a second, 0:18:35.720 --> 0:18:38.000 and then he said, how could they not? You know, 0:18:38.240 --> 0:18:42.119 like these things are very expensive. You've got thirty plus 0:18:42.119 --> 0:18:45.520 thousand dollars GPUs and it just seems like they would 0:18:45.520 --> 0:18:48.840 all be tracked. So what was the term? 0:18:48.920 --> 0:18:53.600 There was a specific terms like kind of like basically 0:18:53.600 --> 0:18:55.280 equivalent of ignoring him. 0:18:55.840 --> 0:18:59.840 Yeah, so the Chinese has done eg and b egn, 0:19:00.000 --> 0:19:03.320 which means open one eye, close one eye, or turn 0:19:03.359 --> 0:19:04.760 a blind eye? Is the idiot? 0:19:04.840 --> 0:19:07.680 Yeah, And that's awesome. 0:19:08.119 --> 0:19:11.040 It's just very cool. Yeah, it's super I mean the 0:19:11.400 --> 0:19:16.000 coolest part about that was multiple people said that exact 0:19:16.200 --> 0:19:22.800 idiom and it's it's just it's such a specific choice 0:19:22.840 --> 0:19:25.719 of words. It'd be the same as if you asked 0:19:25.760 --> 0:19:28.320 like three people a question, you know, they all said, oh, 0:19:28.400 --> 0:19:30.840 they turn a blind eye. At some point you're like, Okay, 0:19:30.880 --> 0:19:36.040 this seems to be a really consistent belief here, But yeah, 0:19:36.040 --> 0:19:40.639 I think from a video standpoint, it's whether or not 0:19:40.680 --> 0:19:45.720 they want to actually control what gets in. It's hard 0:19:45.760 --> 0:19:49.560 to say. Certainly, from a pure financial standpoint. The more 0:19:49.640 --> 0:19:53.360 gps they sell, the more money they make that they 0:19:53.359 --> 0:19:55.040 probably don't really care who they sell them to as 0:19:55.080 --> 0:19:56.680 long as they sell them to someone and then where 0:19:56.680 --> 0:19:59.320 they end up after that. I mean, maybe to the 0:19:59.359 --> 0:20:01.280 extent that video doesn't want to piss off the United 0:20:01.320 --> 0:20:05.719 States government. They you know, they try to comply as 0:20:05.800 --> 0:20:08.520 much as they reasonably can. But how much do they 0:20:08.520 --> 0:20:13.480 actually try to control ingress into a country that's export controlled. 0:20:13.480 --> 0:20:17.800 It's hard to say, But certainly I think they are 0:20:17.840 --> 0:20:19.960 aware of this happening, and I just I have a 0:20:20.000 --> 0:20:24.080 really hard time believing that they are unaware their gps 0:20:24.119 --> 0:20:26.320 are making it into China when they shouldn't be. 0:20:26.760 --> 0:20:28.879 And I imagine it must be quite hard to stop. 0:20:28.960 --> 0:20:31.080 Like I hate to have any sympathy for in video, 0:20:31.520 --> 0:20:33.840 but it does. It does feel like something that would 0:20:33.880 --> 0:20:37.480 be kind of a moving target. Because one thing that 0:20:37.560 --> 0:20:42.000 was consistent across the whole video was the ingenuity of 0:20:42.040 --> 0:20:45.520 the people involved. It does make you see like American 0:20:45.720 --> 0:20:48.439 entrepreneurs sometimes and they're like, oh, yeah, it's tough to 0:20:48.840 --> 0:20:51.159 you know that the hours are very tough, and you know, 0:20:51.480 --> 0:20:54.080 I was covering all not and all of these guys 0:20:54.080 --> 0:20:55.760 were just like, yeah, I've got a thing in the 0:20:55.760 --> 0:20:58.560 back of my car full of wires. Yeah I've got 0:20:58.840 --> 0:20:59.880 I have a whole rig. 0:21:01.240 --> 0:21:04.720 Yeah it's crazy, and that is I mean again, you know, 0:21:05.480 --> 0:21:13.320 from that particular side of things, I don't suspect. I mean, look, 0:21:13.320 --> 0:21:16.840 it's a government regulation, and if the government wants to 0:21:16.880 --> 0:21:19.639 regulate it, it's kind of up to them. Obviously the 0:21:19.640 --> 0:21:22.240 companies need to comply with it, but I wouldn't expect 0:21:22.240 --> 0:21:26.879 a company, even Nvidia, to send in any kind of enforcement. 0:21:27.280 --> 0:21:29.960 Maybe what they would do is if they wanted to 0:21:30.080 --> 0:21:34.040 enforce it, you know, they might identify, Okay, this purchaser, 0:21:35.480 --> 0:21:39.080 there's evidence of this purchaser exporting to China anyway, and 0:21:39.119 --> 0:21:41.199 so we're just gonna stop selling to them or something. 0:21:41.240 --> 0:21:44.080 But that's kind of I think the most you might 0:21:44.119 --> 0:21:48.600 expect of them. But yeah, as far as the ingenuity, 0:21:49.119 --> 0:21:50.880 it was pretty crazy. Like the guy in the US 0:21:50.920 --> 0:21:53.760 who buys the cards, he he just got a Prius 0:21:53.800 --> 0:21:57.760 with a massive like battery bank in the back, like 0:21:57.840 --> 0:22:00.440 a ups with a lithium ion battery in it. He's 0:22:00.440 --> 0:22:02.600 got a test bench hooked up to it, an ATX 0:22:02.640 --> 0:22:05.480 test bench. Pops the trunk open. He's got a spare 0:22:05.560 --> 0:22:07.680 license plate in the trunk for some reason. I don't 0:22:07.760 --> 0:22:12.359 know why. Uh, that's not to ask. Yeah, I don't 0:22:12.359 --> 0:22:15.200 need to know. And uh yeah. And if you want 0:22:15.200 --> 0:22:17.359 to sell him your card, you're just some American new 0:22:17.359 --> 0:22:21.480 found him on Facebook Marketplace. He at the time we 0:22:21.800 --> 0:22:24.600 were talking with him, he was paying two thousand dollars flat. 0:22:25.160 --> 0:22:27.560 He makes three hundred when he sells it, and you 0:22:27.600 --> 0:22:30.680 bring them the card, meet him wherever he tests it, 0:22:31.400 --> 0:22:34.119 and in the back of the you know, in the 0:22:34.160 --> 0:22:36.600 trunk of the car, he just runs a benchmark, make 0:22:36.640 --> 0:22:39.960 sure it's good, and then buys it and ships it 0:22:40.000 --> 0:22:44.639 back or carries it back, depending on how secure he feels. 0:22:44.320 --> 0:22:47.160 And then also to your point of ingenuity, the shops 0:22:47.920 --> 0:22:50.600 that are capable of modifying cards, where they're just they're 0:22:50.680 --> 0:22:53.120 repair shops, and they just happen to be really good 0:22:53.160 --> 0:23:00.000 at board level BGA or ballgrid array device repair or 0:23:00.119 --> 0:23:03.400 or swapping, so they can pull memory modules. They can 0:23:03.480 --> 0:23:08.000 add memory modules, swap the GPU between PCBs, and they're 0:23:08.040 --> 0:23:10.560 able to keep Silicon in service where you know, they're 0:23:10.560 --> 0:23:13.000 just repair shops, so it's kind of like from their perspective, look, 0:23:13.000 --> 0:23:16.280 they're not doing anything illegal in China, they're just keeping 0:23:16.280 --> 0:23:19.840 boards in service. But for people who need these high 0:23:19.840 --> 0:23:23.040 capacity GPUs for AI tasks and they having to be 0:23:23.080 --> 0:23:26.880