A massive development came down in the cryptocurrency world this week, as FTX Trading Ltd. founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud. That was one piece of big news for theCUBE Research industry analysts John Furrier (pictured, left) and Dave Vellante (right) to analyze on the latest episode of the CUBE podcast.

It was a tough sentence for the so-called crypto king. But it potentially represented a moment in time in which the community says that this isn’t the way to do business, according to Furrier.

“My thinking is that they probably gave him the sentence, and he’ll appeal out. Something will go downstream,” he said. “But it sends a message.”

However, it did raise some questions in Vellante’s eyes. Though money may have been frozen for a long time, people eventually got that money back.

“Sam Bankman-Fried was pretty bad for what he did. But the outcomes for people with [Bernie] Madoff were a lot worse,” Vellante said. “[Bankman-Fried] had assets he could liquidate, and people got their money back. Well, I guess you could say that they would make a lot more now with crypto rising the way it has. But I don’t know. It’s a philosophical question. He got what he got; he deserved it.”

AI arms race likely to bring a year of innovation

At 52 episodes, this week’s theCUBE Podcast marks a full year of podcasts, but it also marks a period in time in which AI hype has entered a new era. The consumer is now leading the market, according to Furrier.

“You’re going to see enterprise start to put stakes in the ground, and it’s going to be the year of show the steak on the grill. If you get the sizzle, you better show the steak, as they say,” he said.

Among the so-called sizzly announcements this week was Databricks Inc. launching DBRX, a general-purpose large language model that it says outperforms all existing open-source models. The company made a number of big claims, according to Vellante.

“I looked at it and said, wow, so much for small language models. I know it’s 36 billion parameters they use out of 132 billion, but that still feels pretty big to me,” he said.

SambaNova Systems Inc. leapfrogged that as it introduced Samba-1, a generative artificial intelligence model that features more than 1 trillion parameters. It all represents efforts to achieve breakthrough speeds without sacrificing precision, according to Furrier.

“It’s going to come down to … what will AI run on?” Furrier said. “That’s the big enterprise battle. Remember we used to use the NASCAR analogies, you like to say horses on the track. All the cars are kind of in a cluster. Someone gets ahead, someone slingshots out front. I think we’re going to see a lot more of this, where it’s going to be an arms race in AI like we’ve never seen.”

AI race brings investment surge and new alliances

In the AI arms race, there has also been a push from the investment community. That community is currently going all-in, even in spaces such as observability, according to Furrier.

“Jeremy Burton’s Observe got $115 million in a Series B, which is a good Series B round, but that’s a very tight market observability,” Furrier said. “He’s betting that they’re going to have a war chest of funds to propel themselves into the position to be in the pack.”

When it came to Observe’s funding, Burton’s wisdom was reflected, according to Vellante. The Observe CEO didn’t try to do the typical thing in maximizing the valuation. “He tried to maximize his balance sheet and his runway and create an attractive deal for investors,” Vellante added.

Within the AI race, there is still a huge gap when it comes to the LLMs that are being adopted, something Vellante has written about often in his Breaking Analysis series. OpenAI LP has a huge lead over virtually everybody, including Llama.

“There’s a lot of money out there, and everybody’s going after them. Just like everybody’s going after Nvidia,” Vellante said. “This Intel, Samsung, Qualcomm thing. Intel’s now in both, right? Isn’t Intel in that AI alliance that Meta and IBM did? Intel’s playing its cards in both decks, which, to me, if you really want to take on Nvidia, don’t split, don’t fork these alliances. Get together.”

For alliances to be functional, they need to do more than look good on paper, according to Furrier. That means keeping certain things in mind.

“Are they truly committed to the alliance? That’s one,” Furrier said. “Two, is the market moving too fast for the alliance to even get their eyes on the beachhead to be secure? That’s going to be another one. If they’re motivated by the fact that together, they’re winning together, then that’s something that could work.”

Watch the full podcast below to find out why these industry pros were mentioned:

Jeremy Burton, CEO of Observe
Jensen Huang, founder and CEO of Nvidia
Rob Hof, editor-in-chief at SiliconANGLE Media
Paul Gillin, enterprise editor at SiliconANGLE Media
Mark Zuckerberg, CEO of Meta Platforms
Sanjay Poonen, president and CEO of Cohesity
Lina Khan, chair of the Federal Trade Commission
Sam Bankman-Fried, former CEO of FTX
Bernie Madoff, mastermind of the largest Ponzi scheme
Bill Belichick, former head coach of the New England Patriots
Matthew Slater, former NFL wide receiver
Tom Brady, former NFL quarterback
Malcolm Butler, former NFL cornerback
Willie McGinest, former NFL linebacker
Troy Brown, NFL football coach

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Photo: SiliconANGLE