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Speaker 1: And time to get up with Sam Dicky from Fisher

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Speaker 1: Funds kid A.

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Speaker 2: Sam, Hey, Jack, Hey, we want to.

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Speaker 1: Talk to you. Yeah, very good, Thanks, talk to you

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Speaker 1: a little bit about AI. Obviously, so much hype ever

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Speaker 1: since chat GPT launched in twenty twenty two. A lot

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Speaker 1: of hype baked into stock prices. But there's a fundamental

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Speaker 1: question when it comes to investments, right, can the reality

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Speaker 1: actually live up to the hype?

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Speaker 2: That's right, Yes, there is a lot of Yeah, I

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Speaker 2: didn't notice that was the question. Yeah, I agree with you.

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Speaker 2: And there is a lot of hype around animal spirits

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Speaker 2: or irrational exuberance, and people are obviously excited that AI

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Speaker 2: is going to change the way with business, the way

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Speaker 2: we search, how we interact with companies, and the marker

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Speaker 2: is convinced a few companies are going to make literally

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Speaker 2: trillions of dolls out of that. And I think it

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Speaker 2: was Roy Emara, who's a futurist. Don't if you know

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Speaker 2: many futurists, Jack unfortunately said, we typically overestimate new technologies

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Speaker 2: in the short term and underestimate them in the long term,

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Speaker 2: and only eighteen to two months into the modern AI era,

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Speaker 2: we're most definitely in the short term at the moment.

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Speaker 1: Yeah. Yeah, that's a very interesting content day. And there

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Speaker 1: are lots of other technologies in the past where that

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Speaker 1: is certainly born out over time. So can you paint

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Speaker 1: a bit of a picture for us about the hype

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Speaker 1: around AI the moment, give some numbers for context.

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Speaker 2: Yeah, So, I guess the bluntest and simplest number is

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Speaker 2: we can just see how much market capitalization or stock

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Speaker 2: market valuation creation has been in a handful of stocks.

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Speaker 2: So we'll take in Video obviously, Apple, TCMC, Advanced Micro

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Speaker 2: broad Common, Microsoft, So I think it's half a dozen stocks.

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Speaker 2: And that's a combination of AI chip designers, AI chip manufacturers,

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Speaker 2: and AI software sellers. So the people are using the

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Speaker 2: chips to sell software to.

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Speaker 1: You and I.

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Speaker 2: And so since, as you said, chat Ept was launched,

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Speaker 2: which kind of kept off the modern AI era, their

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Speaker 2: market capitalization or valuations have gone up by over ten

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Speaker 2: trillion New Zealand dollars. And that's only half a dozen companies.

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Speaker 2: And of course all that ten trillion is related to

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Speaker 2: this AI phenomenon, but a decent chunk of it is.

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Speaker 2: And imagine the you know, the tens of thousands of

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Speaker 2: other companies that are out there that are either listed

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Speaker 2: on the stock market or they're unlisted startups that have

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Speaker 2: had their evaluations sore too. So quite a bit of

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Speaker 2: enthusiasm out there.

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Speaker 1: And it's interesting though, like when you when you list

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Speaker 1: those companies, it's the it's the classic like the people

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Speaker 1: getting rich at the moment, all the companies getting rich

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Speaker 1: are generally the ones selling picks and shovels, not the

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Speaker 1: ones selling the goal.

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Speaker 2: Right, well, the picks and shovels are the I guess

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Speaker 2: the chips.

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Speaker 1: Yeah, but back in.

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Speaker 2: The day that you sell the you put on the

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Speaker 2: picks and shovels. Who are providing the picks and shovels

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Speaker 2: the gold miners in today's parlance or in an AI world,

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Speaker 2: the picks and shovels are the cloud providers like Amazon

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Speaker 2: and Microsoft and in Google, who are providing the compute

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Speaker 2: capacity for people to build all their gold minds on.

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Speaker 2: But in reality, on the ground, there's just not that

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Speaker 2: much revenue out there that's been generated on the back

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Speaker 2: of these chips. And in other words, you and I

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Speaker 2: are not really prepared to pay that much yet for

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Speaker 2: this new phenomenon. And you think about post a child

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Speaker 2: of the AI revolution. So Open Ai created a chat GPT.

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Speaker 2: The annualized revenue today from selling their AI models is

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Speaker 2: less than four billion dollars so far, So think about

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Speaker 2: that ten trillion. I've talked about it before. It was

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Speaker 2: a bit of a yawning gap.

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Speaker 1: Yeah, yeah, it's massive. So talk to us just a

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Speaker 1: bit more about about what is baked into the stocks

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Speaker 1: at the stage.

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Speaker 2: So there's ten trilli in, there's the blunders. But I

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Speaker 2: guess another way to think about it is if you

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Speaker 2: add up all of these accelerated compute chips or AA

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Speaker 2: chips that have been been sold by in Video and

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Speaker 2: others to customers who are now desperate to get a

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Speaker 2: return on their investment and create new killer applications to

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Speaker 2: sell to you and I to justify the cost of

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Speaker 2: these chips. If you added up all that we really

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Speaker 2: need to see today about trillion dollars KEIW of revenue

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Speaker 2: stemming from these new application today. So one marker in

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Speaker 2: the sanders Open AI the post of child's generating four billion.

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Speaker 2: But if I add up all the AI revenue streams today,

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Speaker 2: you don't even get to one hundred billion dollars. So

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Speaker 2: we're still sort of nine hundred billion short, Yeah.

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Speaker 1: Not even a tenth. How do you marry those things up?

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Speaker 2: You wanting gap? That's tricky. So we need one of

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Speaker 2: two things to happen. I guess we need someone to

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Speaker 2: launch or discover a new killer AI application that we're

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Speaker 2: all prepared to pay for and pretty quickly jack because

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Speaker 2: the market is losing patients. Or we need these AI

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Speaker 2: stocks to fall in value. It just has to be

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Speaker 2: one of those two things.

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Speaker 1: Yeah, right, right, So how should we think about all

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Speaker 1: of this from visas? How should vistas be thinking about this?

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Speaker 2: I think it means we're in for a bit of

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Speaker 2: a bumpy rider head. I mean, just remember that comment

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Speaker 2: is you know, even for AI ball, we overestimated technology

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Speaker 2: in the short term and underestimating the long term. And

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Speaker 2: we are and we need a peak of the early

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Speaker 2: hype cycle eighteen months and so be ready for a

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Speaker 2: bumpy ride. If you are a long term AI ball,

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Speaker 2: then make sure you have some dry powder or in

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Speaker 2: other words, some cash on the sidelines, because there will

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Speaker 2: inevitably be, as there always is with new technologies, an

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Speaker 2: air pocket. So make sure you've got some dry powder.

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Speaker 2: They're ready to go.

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Speaker 1: Yeah, it'll be interesting actually, just to see how the

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Speaker 1: end of this year and the US election kind of

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Speaker 1: affects some of these stocks, right, because you know, you

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Speaker 1: think about especially with the big Taiwanese chip market, and

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Speaker 1: what a Donald Trump presidency might mean, or the volatility

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Speaker 1: of a Trump presidency might mean for some of the

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Speaker 1: trade relationships between the US and these big producers could

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Speaker 1: be very interesting.

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Speaker 2: Very much. We saw someone that last night. We saw

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Speaker 2: a Trump sort of tape bomb and a lot of

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Speaker 2: these companies lost sort of six, seven, eight nine percent

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Speaker 2: of their value. Geopolitics is going to be writ large.

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Speaker 1: Yeah, I mean that's crazy volatility. That is just nuts, right,

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Speaker 1: that he can just do that and then it does

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Speaker 1: six or seven percent.

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Speaker 2: God, yes, he had an amazing power with his tweets.

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Speaker 1: Yeah, I mean it goes both ways. Let's be honest.

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Speaker 1: You know, it's like the volatility goes both ways. Hey,

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Speaker 1: thank you so much, Sam, Really appreciate it. Sam, Dicky

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Speaker 1: Deer from Fisher Funds. For more from Hither Duplessy Allen Drive,

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Speaker 1: listen live to news talks. It'd be from four pm weekdays,

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