The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Bernhardsson: GPU alt-clouds are real estate businesses adding little stack value
“It's like sort of like almost like real estate, right? Like they own sort of, you know, real estate and they rent it out, arguably sort of, you know, we work, you could say, if you want to be, you know, a little cynical, but like not a ton of value, like highe…”
Bernhardsson: LLM inference compute is shifting toward specialized chips like crypto mining
“I do think it's kind of fascinating how it's like kind of going in the same direction as like crypto mining towards more like specialized hardware.”
Bernhardsson: Modal discarded Kubernetes and Docker to build a custom stack
“So we built our own, we threw out Kubernetes out the window. We threw out Docker out the window. We built our own File system in order to optimize for how container images are distributed. We built our own scheduler in order to maintain this pool of workers an…”
Bernhardsson: AI inference spend will dominate model training spend long-term
“It's obvious that like in the long run, like inference spend will dominate just for like the obvious reason that like, that's where you make the money, right? Like, you know, when you're training a big model, that's like, you know, you, you're spending a lot o…”
Bernhardsson: Serverless architecture fits AI workloads better than web backends
“So it's sort of always felt to me like, you know, in, in hindsight, it looks like the right idea, but applied to the wrong problems. And I always like wonder, you know, now, like I'm looking at like what we built at modal. Like I I'm kind of convinced that lik…”
Bernhardsson: Demands for self-hosting mean the product isn't compelling enough
“One trap that I think a lot of startups fall into is that, you know, you go out and talk to a lot of customers and they sort of insist on, on self-hosting. In my opinion, like, you know, sometimes that's actually like a true, like hard concerns, but in many ca…”
Bernhardsson: Lower GPU prices increase value of developer AI software
“If GPU prices were to crash, like the relative value of that software actually goes up. So like, I'm not necessarily sure that like a crash in GPU would be bad for us. I think it actually could be great for us because, you know, if GPU prices go down, there's …”
Bernhardsson: People will train many custom AI models in the long run
“Like, so, I don't know, I'm a big believer that, like, you know, in the long run, like, people will train a lot of different custom models.”
Bernhardsson: Companies training their own LLMs makes almost no sense
“A couple of years ago, you know, a lot of companies try to train their own LMs. Like that to me, it makes almost no sense, right?”
Bernhardsson: Nvidia H100 GPU prices are falling significantly
“For a while, like, each 100 prices were, like, almost, like, going up, and then they were kind of still for a while, and then now they're, like, actually going down quite a lot, like, you know, what I'm seeing in the market, right?”
Bernhardsson: Early engineering teams thrive with far less formal management
“You can actually get much further, which a lot less of that than you, than people think is my experience. And you're actually better off doing that because you sort of retain people's autonomy. You retain people's ability to sort of, you know, come up with sol…”
Bernhardsson: Great developer experience requires cloud execution to feel local
“If you don't have like a good, super fast feedback loop, like you can never make it like so much of developer experience comes from having like a super fast feedback loop where you can like take code and execute in the cloud in a way where it almost feels like…”
Bernhardsson: Modal can typically scale customers to 1,000 GPUs within minutes
“And then if you one day need a thousand GPUs, we can get you, we can typically get you a thousand GPUs like pretty quickly, like talking minutes.”
Erik Bernhardsson: Suno relies on Modal for AI music inference
“Suno which is AI generated music. And, you know, they have a big cluster. They train their own models outside of modal and then they use modal for the inference side.”
Erik Bernhardsson: Very large-scale AI training is not a high priority for Modal
“It puts a lot of different, you know constraints on, on the infrastructure that we don't support today. It's something we're interested in, like, you know, somewhat like, you know, looking at down the road but it's not like a super high priority for the busine…”
Bernhardsson: Cloud trends are shifting toward multi-tenancy and application-layer security
“I think the general wind is like blowing in the direction of like multi-tenancy and like, you know, security moving away from the sort of network layer into the app layer and a bunch of different other things.”
Bernhardsson: Resource pooling is a rare free lunch in cloud economics
“Resource pooling is like one of the Free lunches that exists in sort of, you know, in the cloud economics, you know, you can get much faster capacity and much more liquid, you know, capacity, et cetera.”
Bernhardsson: AWS EC2 retains 50% to 70% profit margins
“At the end of the day, like EC two is like what, like, you know, 50, 60, 70% margins. It's actually, you know, not as much of a commodity as like people think.”
Bernhardsson: AWS Lambda has higher profit margins than GPU serverless products
“Margins on Lambda is much higher than margins on, on GPU serverless products.”
Bernhardsson: Sub-200ms latency requires a decentralized control plane
“In order to get to sort of latencies below, you know, a 152 hundred milliseconds, we probably need to split that up and run like a decentralized control plane.”
Model inference represents the majority of Modal's platform usage
“Model inference is probably the majority of our use case.”
Modal uses real-time pricing optimization to route GPU compute across 100 regions
“We actually have a system that continuously looks at cloud pricing and solves an optimization problem to sort of, you know, figure out How do we allocate capacity across like, you know, a hundred different regions in order to deliver the capacity we need to ou…”
Bernhardsson had no assigned manager during his first year at Spotify
“No one told me who my manager was for the last year, for the first year of Spotify.”
Bernhardsson: Modal containerizes Python code to scale execution to thousands of GPUs
“Modal makes it easy to build, scale and deploy applications in the data, AI, machine learning realm. So, so we basically, you can think of as like, we take, you write a little bit of Python code, and we take that code, we stick it in a container, we execute th…”