Chapter 241 - After the Tomorrowland

A few days after the Tomorrowland frenzy, Pepper and I were talking at my house in Santa Monica.

“Beats was an even bigger explosion than I expected,” I commented while looking at the sales report. “190 thousand units in just a few days.”

Pepper nodded, “Way beyond what I was expecting. We’ll need to bring shipments by air to make sure we don’t face shortages. We’ll pay a few extra dollars per unit, but nothing that really affects our margins.”

She continued, “We already have estimates that sales could reach 500 thousand by the end of the month.”

“That would put us among the top electronic launches. Still far from the earthquake that was the PS2,” I remarked. “I read they sold 2.5 million globally, and that was with stock issues. Otherwise, it could have been much higher. What about us, Pepper? Any risks?”

“Low. Only if it blows up beyond precedent. Our team already mapped out Plan B and Plan C for factories that could assemble the Beats,” Pepper replied. “Since headphones are much simpler than a video game console or a cellphone, production lines are less complex. 

Foster Electronic, our driver supplier, already assured us they can meet demand, even if it reaches millions.”

"And we will only go more aggressively into marketing once we are sure we can handle the demand," Pepper concluded

“If we had the expertise, we could also enter the MP3 player market. With the Beats boom, it’s easy to think about the growing need for better music players,” I pointed out.

Pepper shook her head, “I had the market researched, and there’s still no small storage drive available. And touch-sensitive technologies don’t have the required quality yet. 

We’d have to develop everything ourselves or try to encourage specialist companies to do it. In either case, it’s not easy to predict the time needed for production"

“I don’t think it’s worth the risk,” I said thoughtfully. “Better invest in Apple and let them handle that. That weirdo freaky genius might come up with something better, and we’d just burn money.”

Jobs, Musk—don’t bet against these lunatics unless you’re sure you have a much better hand. It’s easier to invest in them, let those MFs work like madmen, while I stay relaxed waiting for the results.

“If we really buy UMG, the world’s biggest record label, it’s unlikely the other labels would agree to unite with us in something like iTunes Store,” Pepper commented. “Not to mention we’d need an essential technology: DRM to protect against piracy.”

Yeah, another massive hit from Apple. Selling music online. iTunes already exists, but the iTunes Store is still to be launched (if I remember correctly, it should be next year, 2003).

“Leave that to Jobs, we already have enough fronts we’re working on.” I shifted the subject. “Did Jobs say anything about our product?”

“He did. He whined that we copied them. I told him these exact words: ‘Steve, you sold 180 thousand iPods in four months. We sold that in less than a week. We are not copying you at all,’” Pepper answered, unfazed.

I winced, “Jesus, Pepper, that was brutal!” Then I grinned, “I love it!”.

“Pepper, if we buy Universal, I want to be in the meeting where he comes begging to sell music for his iTunes Store. 

There’s no way he won’t come. UMG holds 30%, plus my rights, Marshmello’s rights. There is also JDS, and we can strike a deal with Sony beforehand." 

“Let’s leave that for the future, if it actually happens,” Pepper replied more grounded. “What’s the other topic you wanted to discuss, Jake?”

“Our fourth future pillar, Pepper. The first three are JD AdSense, YouTube, and Facebook—nobody will give them the real credit for a good few years 

The fourth pillar will be the complete acquisition of Nvidia,” I declared.

Pepper nodded for me to continue.

“Today Nvidia produces video cards—basically GPUs. Right now, they’re essentially used for graphics,” I began to explain. “Currently, most calculations are handled by CPUs. Depending on the need, they’re very expensive and require massive quantities.”

I handed her some papers.

“Here’s the concept with some early research: General-Purpose computing on GPUs, or GPGPU.”

“This is the future, Pepper. GPGPU is the idea of expanding GPU use to general-purpose calculations, not just images. 

For that, we’ll need the Compute Unified Device Architecture—CUDA. A programming model to make GPGPU a reality. And to complete the equation, the essential part: hardware that can support it. That’s why Nvidia.”

Since I always loved investments, I had studied the reasons behind the success of the major companies. And Nvidia’s path lies with GPGPU, CUDA and g80. 

“How big is the impact, Jake?” Pepper asked while flipping through the report.

“Massive. If we can make it work, it could revolutionize multiple sectors. Animations, CGI, and special effects would be faster, cheaper, and drastically improved in quality. Games would evolve to another level. Scientific research, military use, and beyond. We’d become the provider of the future’s infrastructure,” I explained.

“Pepper, this is what I envision for JD. People see us as the company of entertainment and consumer products. While they focus on the golden calf of blockbusters, the golden calf of Monster, Beats—we’ll be quietly moving a whole herd behind the scenes. 

A waterfall of money, with JD AdSense dominating internet advertising, Facebook and YouTube growing alongside, and finally Nvidia building the infrastructure everyone will depend on.”

Pepper took a deep breath and grew thoughtful, “If we reach the level you’re imagining, it will be too much power concentrated in a single company. It could end up like Microsoft.”

“Yes. Or like Rockefeller, having to break the company into several smaller ones. But he was a piece of shit. We’ll sell ourselves as the necessary company that doesn’t exploit the population,” I said.

“We need a long-term project. Create tens of thousands of jobs in countries like Germany, Ireland, etc., and present ourselves as a strategic company for the U.S.—anything that can block regulation ideas.” 

And for those who still have funny ideas, they will witness the power of social networks