Grok 3.....and a light data week.

A Dose of Wisdom

"The factory of the future will have only two employees: a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment." — Warren G. Bennis (Leadership Expert)

THE FIRST HIT

I am certain that at times, life with me is a challenge. There are probably not too many of you that go to bed very late because you stayed up to watch the release of Grok 3. Then...when that is over....I get pulled down another rabbit hole, a lot of which is work related at the moment and before you know it, things that I am typing about that are going to happen tomorrow, are actually going to be happening THAT day....if you know what I mean.......

I can't help it with AI.....and to be honest.....you should be that way too. You don't need to be an AI scientist, but this thing is already permeating our lives in ways we could not have imagined a few years ago, and it's not even BARELY the tip of the tip of the iceberg........

Grok 3

Let's start with the name. "Grok". Why "Grok"?

Musk talks about it in this video but "grok" is a MARTIAN word meaning "deep, intuitive understanding" and comes from the science fiction novel, "Stranger in a Strange Land" by Robert A. Heinlein. Widely regarded as one of the most influential sci-fi books of the 20th century it explores themes surrounding individual freedom, religion, culture, and human nature.

The story follows Valentine Michael Smith, a human who was born on Mars and raised by Martians after the first human expedition to Mars failed. When a later mission discovers him as an adult, he is brought back to Earth—a world he doesn’t understand. As a result, Smith is a stranger in a strange land, trying to navigate human customs, laws, and emotions.

Smith, possessing superhuman mental abilities learned from the Martians (such as telekinesis and the ability to control his body at a cellular level), slowly integrates into human society under the guidance of journalist Ben Caxton and nurse Gillian Boardman. He becomes a spiritual leader, forming a new religion based on Martian philosophy, teaching people to "grok" (a Martian word meaning deep, intuitive understanding).

Like I said...."DEMOS" are not one of Musk's strong suits, but what x.AI demonstrated last night in the way of Grok 3 was pretty impressive.

Even more impressive was Musk's story of how he and the x.AI team were able to bring on-line 100 thousand Nvdia GPUs from start to finish in 122 days in a new, but abandoned Electrolux plant in Memphis, TN and how they expanded that to 200 thousand GPUs in another 92 days.

When Musk and the team at x.AI started looking at bringing a data center on-line, they weren't planning on building their own. They went to data center providers and asked how long it would take to bring 100 thousand GPUs on-line for AI training and the answers they got ranged from 18 to 24 months. That meant, in terms of an AI race, in Musk's words' "losing is a certainty, so the only option was to do it ourselves". So, from finding an existing and empty factory, to getting the GPUs, and networking them together, powering them in a reliable manner and cooling them was a MASSIVE undertaking.

Listen to Nvdia's CEO Jensen Huang talk about Musk and his team at x.AI building "the largest supercomputer in the world".

Side note....a little "back of the napkin" cipherin' on how enamored Jensen is with x.AI's data center. Musk and his team started with 100,000 GPUs. Then, they doubled it to 200,000 GPUs. At roughly $31,000/GPU, that is a smoooth $6.2 billion for Nvida just on this one data center. Granted, if Musk is buying 200 thousand of them, he is probably getting a discount, but when he wrote the check, it was still in the bilions.

I am a huge Lex Fridman fan and Lex is buddies with Musk, and he has been on Lex's podcast a number of times. Here is a clip from one of his podcasts where Musk talks about Grok 3 and the data center, AI, robots, and other things swirling around in his brain. Listening to how he breaks things down (First Principles) is actually quite facinating......

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CONTROLLED MARKET SUBSTANCE

10 Year Yield - I have been saying it for quite some time.....I THINK we are going to see interest rates falling farther and faster than most people think. I also think that will have to do, to some degree, with an event or events that are just over the horizon. We'll see....but if we break below 4.48% (which we TECHNICALLY did....just not convincingly) and we are head straight back to 4.333% (I like that extra 3) QUICKLY then just as quickly down to test 4.18%. That's not a prediction....I would not go trade treasury futures on it....but I DO think that is where we are headed.

Wishful thinking??? We'll see.......at the end of the day, it matters not. We are charged with puttiing people in homes and ferreting out opportunities no matter what rates are.......

Light econonomic calendar this week. A LOT of fed speak, some housing data (that never moves the market) and FOMC minutes...which COULD move the market. Other than that...not a lot of market moving data on this shortened trading week. There will be more news, tweets and tariffs then there will be data!