Title: Dan Niles: You need to have a viable open source community
Show: CNBC (David Faber interview, clip)
Guest: Dan Niles — Niles Investment Management, founder & portfolio manager
Date: 2026-08-04
URL: https://youtu.be/i-piCH_MHZc
Length: 4:20
Note: CNBC closed-caption transcript (all-caps) pasted by Stephen; (mm:ss) cues real; wording verbatim; clip ends mid-sentence.

(00:00) >> YEAH, BOTH OF THEM WILL HAVE VALUES ABOVE THAT OF PALANTIR. AT LEAST IT WOULD APPEAR IF AND WHEN THEY DO COME PUBLIC. SEEMA THANK YOU SEEMA MODY. LET'S STICK WITH TECH AND BRING IN NILES INVESTMENT MANAGER, MANAGEMENT FOUNDER AND PORTFOLIO MANAGER, DAN NILES. HEY, DAN, BEFORE WE GET INTO SOME OF THESE STOCKS, JUST TO FOLLOW UP ON THAT, I MEAN, DO YOU HAVE A VIEW IN TERMS OF OPEN SOURCE AND YOU KNOW WHAT THAT MEANS? AND THIS BATTLE THAT IS REALLY BEING JOINED ON ALL SIDES HERE IN TERMS OF THE CHINESE MODELS AND THE THREAT
(00:29) THEY POSE VERSUS THE LIKES OF A CARP OUT THERE SAYING, THIS IS THE ONLY WAY FOR CORPORATE AMERICA TO KEEP ITS OWN DATA SAFE AND BUILD ON IT. >> YEAH. I MEAN, I THINK THERE ARE TWO SEPARATE ISSUES. AND THERE. DAVID. THE FIRST ONE IS, I THINK FOR THOSE WHO ARE TAKING A BIGGER PICTURE, YOU LOOK AT WHAT HAPPENED WHEN ANTHROPIC WAS ON THE BOARD OF FIGMA, RIGHT? AND THEY STEPPED OFF THE BOARD.
(00:52) AND THEN LIKE A WEEK LATER, THEY LAUNCHED A COMPETING PRODUCT. AND SO I THINK IF COMPANIES ARE LOOKING AT THAT, THEY KNOW THEY HAVE TO KEEP THEIR DATA PROPRIETARY. SO I 100% AGREE WITH THAT. THE SECOND PART, WHICH IS SOMEWHAT SEPARATE FROM THE FIRST, YOU COULD ARGUE IS OPEN SOURCE, RIGHT? BECAUSE YOU CAN HAVE IF YOU HAVE OPEN SOURCE, THAT CUTS YOUR COST TO PRODUCE A LOT OF THESE TOKENS BY 90%.
(01:18) AND SO I THINK YOU NEED TO HAVE A VIABLE OPEN SOURCE COMMUNITY OUT THERE, BECAUSE NOT EVERY MODEL NEEDS THE HIGHEST END, YOU KNOW, ANTHROPIC OPEN AI GEMINI MODEL OUT THERE TO SOLVE. YOU DON'T NEED THEM FOR WHAT'S THREE PLUS THREE. IF YOU WANT TO GO AHEAD AND DESIGN A, YOU KNOW, A NEW DATABASE, THEN YES, YOU NEED THEIR HIGHEST END MODELS FOR THAT.
(01:41) SO I THINK THERE ARE TWO SEPARATE ISSUES. AND I BELIEVE IN OPEN SOURCE. AND I BELIEVE THAT COMPANIES SHOULD TRY TO KEEP ALL THEIR PROPRIETARY DATA PROPRIETARY AND NOT SHARE IT, BECAUSE THAT'S WHERE PROBLEMS GET CREATED. >> YEAH. ALL RIGHT. WELL, I'M CURIOUS, I MEAN, I KNOW YOU'RE A PUBLIC MARKET INVESTOR, BUT, YOU KNOW, YOU KNOW, THE PRIVATE MARKET VALUATIONS OF BOTH OPENAI AND ANTHROPIC, DO YOU THINK THEY'RE OVERVALUED? >> WELL, I MEAN, I THINK LET ME ANSWER THAT DIFFERENTLY.
(02:06) IF YOU WERE GOING TO A WORLD WHERE 90% OF THE COMPANIES AREN'T USING THE LEADING EDGE MODELS AND THEY'RE SWITCHING TO USING OPEN SOURCE MODELS, THEN KIND OF IF YOU'RE USING THE RIGHT MODEL FOR THE RIGHT THING, YOU DON'T NEED A FERRARI TO GO TO THE CORNER STORE TO GET MILK, RIGHT? IT'LL WORK JUST FINE. AND SO IF YOU'RE GOING AHEAD AND YOU'RE STARTING TO SPLIT THE WORKLOADS THAT WAY, I THINK OVER TIME, MY BELIEF IS THAT THE MODEL LAYER BECOMES MORE OF A COMMODITY.
(02:33) AND IF YOU GO AHEAD AND YOU'RE ON AZURE OR GOOGLE CLOUD PLATFORMS OR, YOU KNOW, WHATEVER, THOSE SERVICES WILL ROUTE WHATEVER YOU'RE TRYING TO DO TO THE BEST MODEL AVAILABLE FOR THE TASK. AND I THINK IN THAT SCENARIO, YES, ANTHROPIC AND OPENAI BECOME MORE COMMODITIZED OVER TIME, AND THE VALUE ACCRUES TO MORE OF THE INFRASTRUCTURE PLAYERS, WHICH INCLUDES THE CLOUD PLATFORMS AND SEMICONDUCTORS.
(03:01) >> SO IS THAT HOW YOU'RE POSITIONING YOUR PORTFOLIO TO A CERTAIN EXTENT, 100%. >> THAT'S ESPECIALLY AFTER THE LAST COUPLE OF WEEKS BECAUSE, YOU KNOW, A COUPLE OF THINGS HAVE OBVIOUSLY HAPPENED. THE SITUATIONAL AWARENESS, YOU KNOW, GETTING TAKEN OUT THEIR PUBLIC POSITIONS. THAT WAS A HUGE DEAL THAT KIND OF SOLVED MY ISSUES WITH THE SPEED BUMP, WHICH I SAW COMING.
(03:22) AND WHEN YOU LOOK AT THE RESULTS, AWS SAW REVENUE GROWTH ACCELERATE 9% FROM THE MARCH QUARTER TO THE JUNE QUARTER, THE 37% GROWTH, BUT MORE IMPORTANTLY TO ME IS THE OPERATING MARGINS ALSO EXPANDED BY A PERCENT. YOU LOOK AT AZURE, SIMILAR SITUATION WHERE THE GROWTH RATE FOR THAT ACCELERATED BY ABOUT 4% TO 43%, AND THE MARGINS EXPANDED BY A PERCENT.
(03:48) THE BIG WINNER, QUITE HONESTLY, IS GOOGLE. GOOGLE. BAD NEWS WAS THEY REPORTED ABOUT A WEEK BEFORE SITUATIONAL AWARENESS GOT SOLVED, RIGHT? BUT THEIR REVENUE GROWTH ACCELERATED 19% AND THE MARGINS EXPANDED BY 3%. AND SO AND BY THE WAY, THEY'RE GROWING 82%. THAT'S A HUGE NUMBER. AND SO YOU'RE SEEING BOTH GROWTH AND PROFITABILITY AT THAT LAYER.
(04:11) AND I REALLY LIKE THAT. AND WHEN YOU'RE CRANKING UP THE NUMBER OF TOKENS YOU'RE PRODUCING, BECAUSE NOW YOU'RE RUNNING OPEN SOURCE MODELS AT, YOU KNOW, 10% OF