WEBVTT - Stocks Look Forward Past Nvidia 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.880 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:26.840 or watch us live on YouTube. 0:00:26.960 --> 0:00:30.360 Let's dive a little bit deeper into the Nvidia earnings. 0:00:30.520 --> 0:00:33.400 Who do you want to dive deeper in than d. 0:00:33.920 --> 0:00:34.879 No better person right now? 0:00:34.920 --> 0:00:36.800 That's our guy. I mean, he's getting geared up for 0:00:36.880 --> 0:00:40.199 Penn State, Nevada this weekend, but he's probably focusing a 0:00:40.240 --> 0:00:42.559 little bit here on Nvidia. Hey, Dan, I thought these 0:00:42.680 --> 0:00:46.159 numbers were darn good, but I know there's the law 0:00:46.200 --> 0:00:49.159 of large numbers. I know there's a whole thing about expectations. 0:00:50.120 --> 0:00:54.120 Give us your take on these Nvidia numbers, Dan, I. 0:00:54.200 --> 0:00:57.080 Thought they were robot and I think the some extent 0:00:57.120 --> 0:01:01.760 when you factored China and they actually beat expectations, especially 0:01:01.760 --> 0:01:03.880 when you look at the outlook. I think there's a 0:01:03.880 --> 0:01:07.959 stock that's up today and I think it further validates Well. 0:01:07.959 --> 0:01:09.959 We've obviously been talking a lot, you know, with you 0:01:10.040 --> 0:01:13.440 and the team about about the AI story now playing 0:01:13.440 --> 0:01:17.920 out into the next stiege of growth. This is bullish 0:01:17.920 --> 0:01:19.119 in my opinion. 0:01:19.959 --> 0:01:22.760 Dan, what was your takeaway here as it relates to 0:01:23.480 --> 0:01:25.399 a lot of the spending here Capax. 0:01:27.440 --> 0:01:29.800 I think it just sures there's one ship in the world, 0:01:29.840 --> 0:01:33.040 fewling the AI revolutions led by godfather of AI, Jensen, 0:01:33.080 --> 0:01:36.120 the Vidning and you what's happened on Capex. It's just 0:01:36.200 --> 0:01:40.120 continuing to accelerate, and then you factor in China that 0:01:40.160 --> 0:01:43.199 could be fifty billion. I mean in just talking about 0:01:43.200 --> 0:01:46.680 the fifty percent growth. I look, I think this is 0:01:47.000 --> 0:01:50.960 just now it's showing the next feeds of the AI 0:01:51.040 --> 0:01:54.040 revolutions now starting to play out, especially when you combine 0:01:54.080 --> 0:01:57.920 it with hyper scalers and everything we've seen from Pallenteer 0:01:58.400 --> 0:02:02.280 now Snowflake, Mango de Be, the use cases are expanded. 0:02:03.440 --> 0:02:07.320 Dan, flush out for us the whole China situation. Where 0:02:07.400 --> 0:02:10.560 is in Vidio today visa via China? And how do 0:02:10.560 --> 0:02:11.920 you think this is going to play out over the 0:02:11.960 --> 0:02:13.800 coming quarters with our age twenty. 0:02:13.720 --> 0:02:19.400 Chip Yeah, Paul, Look, they're they're cognmental between US and China. 0:02:19.440 --> 0:02:22.720 But the reality is Jensen's ten percent politician, ninety percent 0:02:22.880 --> 0:02:26.400 CEO and Trump administration to do is big as Chip 0:02:26.440 --> 0:02:29.280 on the broker table is in the video. So as 0:02:29.320 --> 0:02:32.239 this all plays out there, it's to pay for play model. 0:02:32.280 --> 0:02:35.160 They're going to have access to China, even if it's restricted, 0:02:35.600 --> 0:02:38.120 and that's going to add and incremental what two five 0:02:38.400 --> 0:02:43.080 six billion per quarter. And you know, even though Beijing's 0:02:43.120 --> 0:02:45.960 saying telling you know, maybe these companies you don't want 0:02:46.000 --> 0:02:48.400 to buy in video chips, that's like telling a kid 0:02:48.560 --> 0:02:54.079 not eat candied. Big tech in China wants in video chips. 0:02:55.080 --> 0:02:57.560 So, I mean, as we dig in here into the data, 0:02:57.600 --> 0:03:00.680 what we saw from the earnings report, what is takeaway 0:03:00.680 --> 0:03:03.679 in terms of what they were able to see specifically 0:03:03.680 --> 0:03:06.600 in terms of data center AI demand. That's definitely something 0:03:06.600 --> 0:03:08.239 that's been in focus here with this report. 0:03:09.840 --> 0:03:12.200 Yeah, look, I think it's noise in terms of any 0:03:12.520 --> 0:03:15.919 quote unquote like miss because when you factored China, it's 0:03:15.960 --> 0:03:19.919 basically over a billion and a half feet. They're seeing 0:03:20.040 --> 0:03:24.200 demand accelerate. I mean, no region is not showing acceleration. 0:03:24.919 --> 0:03:26.960 And now you're starting to factor what's going to happen 0:03:26.919 --> 0:03:29.560 in Middle East, what's going to happen in China. It's 0:03:29.560 --> 0:03:32.760 got to rest the world and you're really talking about 0:03:32.840 --> 0:03:35.480 one chip that's fueling it. So when I walk in 0:03:35.480 --> 0:03:37.720 a video, I think there's a five trillion dollars mark 0:03:37.800 --> 0:03:40.800 cap attention by a year under early twenty six, and 0:03:40.800 --> 0:03:44.600 it's just further validation for the AI revolution. Biasis. 0:03:46.280 --> 0:03:48.680 So talk to us DAN about their customer base and 0:03:48.720 --> 0:03:51.040 the concentration of the customers, and I know they want 0:03:51.040 --> 0:03:53.920 to broaden out their customer base maybe to sovereigns into 0:03:53.960 --> 0:03:57.720 other net buyers out there. How do you think that's 0:03:57.720 --> 0:03:58.320 going to evolve? 0:04:00.080 --> 0:04:02.280 Big tech is going to continue domino as a quote 0:04:02.320 --> 0:04:06.080 unquote customer base in terms of the concentration. But now 0:04:06.120 --> 0:04:09.520 as sovereigns play out, as enterprises play out, and you're 0:04:09.520 --> 0:04:12.960 going to see more and more people you know, obviously 0:04:13.000 --> 0:04:17.320 start to understand that this revolution is not just big Tech. 0:04:18.040 --> 0:04:20.599 It's about other sort of regions starting to play. And 0:04:20.600 --> 0:04:22.719 there's only one ship in the world fuel in it, 0:04:23.200 --> 0:04:24.040 and that's in video. 0:04:25.520 --> 0:04:28.159 So taking a step back here in video wrapped up 0:04:28.360 --> 0:04:30.920 all of the mag seven earnings here. What were your 0:04:30.960 --> 0:04:33.960 thoughts more broadly overall this earning season. 0:04:36.000 --> 0:04:39.000 I mean, I think this is the bullish Tech earning season. 0:04:39.080 --> 0:04:42.440 We talked about it, the validation of the AI revolution, 0:04:42.680 --> 0:04:46.920 his next stage of growth it's spreading, second, third, fourth derivatives. 0:04:47.080 --> 0:04:49.560 Now grant look in video is a Scottie chauffeur of 0:04:49.680 --> 0:04:52.280 tech okay, But what you're just starting to see now 0:04:52.400 --> 0:04:57.360 play out is those derivatives, the spending, the multiplier, it's 0:04:57.360 --> 0:05:00.839 all happening. And I think that's just bullish going into 0:05:00.920 --> 0:05:03.479 year end in terms of tax stocks, and I think 0:05:03.480 --> 0:05:08.960 this bull market has two to three year run still left. Dan. 0:05:09.080 --> 0:05:12.040 So as you talk to institutional investors, how are they 0:05:12.120 --> 0:05:17.040 viewing this fifteen percent? I don't know government fee that 0:05:17.360 --> 0:05:19.440 the US government may impose on some of these chip 0:05:19.480 --> 0:05:23.800 sales that China. How's that being viewed by investors? 0:05:23.839 --> 0:05:28.800 Look, it's obviously it's unusual. It's a pay for play model, 0:05:28.920 --> 0:05:31.600 but guess what, investors, it's new rules of the road, right, 0:05:31.880 --> 0:05:35.040 big text, start and understand how that works. But when 0:05:35.080 --> 0:05:39.200 it comes in video, okay, pay fifteen percent, that's breadcrumbs. 0:05:39.240 --> 0:05:42.360 You can raise prices fifteen percent. You need access to China. 0:05:42.720 --> 0:05:45.840 You can't give Huawei on a silver platter that market. 0:05:46.200 --> 0:05:48.640 So as it continues to play out, I think investors 0:05:48.640 --> 0:05:52.040 have accepted they want to video open access to China 0:05:52.120 --> 0:05:55.640 because that continues to be the golden goose that Jensen's 0:05:55.680 --> 0:05:56.560 going after. 0:05:58.000 --> 0:05:58.160 Dan. 0:05:58.240 --> 0:06:00.200 I want to quickly go right back to what we 0:06:00.200 --> 0:06:02.799 were talking about here when it relates to data centers. 0:06:02.839 --> 0:06:05.919 How concentrated is in Video's revenue right now or like 0:06:05.960 --> 0:06:08.720 you know, the top five hyper scalers still the overwhelming 0:06:08.760 --> 0:06:10.239 majority of data center sales. 0:06:11.560 --> 0:06:14.560 You know, it's concentrated. But that's just the nature right 0:06:14.600 --> 0:06:18.120 now big text three hundred, what fifty during sixty billion? 0:06:18.680 --> 0:06:22.080 But it's going to spread sovereigns enterprises the rest of 0:06:22.120 --> 0:06:24.240 the world, and Vidia is going to continue to own 0:06:24.320 --> 0:06:27.440 that so contrade today when you look out three four, 0:06:27.560 --> 0:06:31.320 five years ago, that concentration will continue, I think to 0:06:31.400 --> 0:06:36.960 diminish as more players get into AI. But there's one 0:06:37.040 --> 0:06:38.560 chip fuel in it. It's in video. 0:06:39.560 --> 0:06:42.400 Dam How do you think about the competitive environment for 0:06:42.760 --> 0:06:43.240 in Nvidia? 0:06:43.360 --> 0:06:43.600 Here? 0:06:44.080 --> 0:06:46.839 Is it AMD? Is it Huawei? Is it others? We 0:06:46.880 --> 0:06:48.440 don't know about at the moment. 0:06:48.920 --> 0:06:52.880 Here, well, glease issue in AMD clearly competition. I think 0:06:52.960 --> 0:06:55.559 that we continue to be bullsh in that in terms 0:06:55.560 --> 0:06:59.200 of getting more and more pieces of pie. Huawei is 0:06:59.240 --> 0:07:01.640 a competitor, but that's the whole reason that you don't 0:07:01.640 --> 0:07:04.000 want to just give them full access to China because 0:07:04.000 --> 0:07:07.080 that will help them narrow the gap for bulls obviously 0:07:07.080 --> 0:07:09.960 on Broad common others. And I think, look as this 0:07:10.120 --> 0:07:12.720 plays out, in Vidia is years ahead of any of 0:07:12.800 --> 0:07:15.440 their competition. And even when you hear talked about you know, 0:07:15.640 --> 0:07:19.480 US government and obviously you know SoftBank investing in Intel. 0:07:19.840 --> 0:07:23.920 I mean, Intel is you know, so many years behind. 0:07:24.920 --> 0:07:27.280 You know, they continue to really have just a massive 0:07:27.360 --> 0:07:29.680 uptil battle. And that's why video is top of the mountain. 0:07:30.320 --> 0:07:32.520 All right, Dan, your Penn State Nitley Ions open the 0:07:32.520 --> 0:07:36.720 season Saturday, three thirty pm on the CBS Television network, 0:07:36.720 --> 0:07:40.760 Compariment plus against Nevada forty three and a half point favorites. 0:07:40.760 --> 0:07:42.440 How do you feel about you Nitley Lions this year? 0:07:43.120 --> 0:07:45.960 I mean, look, I was at practice last week State College. 0:07:46.120 --> 0:07:47.960 I told you, I think this is the year. I 0:07:47.960 --> 0:07:50.520 think we win the nanty. We have some tough games 0:07:50.560 --> 0:07:53.960 of Oregon Ohio State, but I think Big ten continues 0:07:54.000 --> 0:07:56.680 to hold the mantle. I like al our Singleton and 0:07:56.720 --> 0:07:58.640 Penn State. I think I think we'll be holding the 0:07:58.680 --> 0:08:00.000 trophy in January. 0:08:00.360 --> 0:08:03.280 I like the call LEAs and clear and confident. Dan 0:08:03.360 --> 0:08:06.720 ives Global ahead of technology Webush Securities appreciate getting a 0:08:06.760 --> 0:08:10.000 few minutes of Dan's time here today on Nvidia and 0:08:10.040 --> 0:08:12.800 big tech. Stay with us. More from Bloomberg Surveillance coming 0:08:12.880 --> 0:08:13.760 up after this. 0:08:19.840 --> 0:08:23.400 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:08:23.480 --> 0:08:26.640 weekday afternoons from seven to ten am Eastern Listen on 0:08:26.720 --> 0:08:30.400 Applecarplay and Android Auto with the Bloomberg Business app, or 0:08:30.560 --> 0:08:31.920 watch us live on YouTube. 0:08:31.960 --> 0:08:35.640 Anastasia Amoroso joints as chief investment strategist at Private Wealth 0:08:35.679 --> 0:08:40.360 at Firms Partners Group. Anastasia, the market's been so fixated 0:08:40.400 --> 0:08:43.839 on AI and then I guess Nvidia is probably the 0:08:43.840 --> 0:08:47.280 poster child for AI. How do you think about that 0:08:47.360 --> 0:08:49.720 as a theme for the market. How important is that 0:08:50.000 --> 0:08:52.280 to you? The NVIDIAs of the world in this AI? 0:08:52.400 --> 0:08:55.280 Sure well, obviously very important, and Paul, I'm with you. 0:08:55.320 --> 0:08:57.880 I thought the Nvidia numbers were just fine. It's really 0:08:57.880 --> 0:09:02.160 interesting that on the surface, investors were disappointed because in Vidia, 0:09:02.400 --> 0:09:04.760 despite the fact that they beat and raised, they didn't 0:09:04.760 --> 0:09:07.960 meet the loftiest of expectations. Of course, that probably makes 0:09:08.000 --> 0:09:09.760 sense because the stock has rallied as. 0:09:09.720 --> 0:09:11.840 Much as it has, I think over one hundred percent. 0:09:11.760 --> 0:09:14.080 Since since the bottom in April, so I thought the 0:09:14.120 --> 0:09:18.800 numbers were fine, and the AI theme is obviously hugely important, 0:09:18.880 --> 0:09:21.160 and I think in Vidia highlights that it's still top 0:09:21.200 --> 0:09:23.239 of mind in front and center for investors. 0:09:23.600 --> 0:09:25.480 And I say that because, you know. 0:09:25.600 --> 0:09:28.400 Analysts focus on the growth rates that are tapering off, 0:09:28.440 --> 0:09:29.720 but consider the base. 0:09:30.120 --> 0:09:31.240 You know, consider the. 0:09:31.240 --> 0:09:35.440 Fact that AI hyperscalers are going to spend four hundred 0:09:35.480 --> 0:09:39.240 billion dollars in AI cap x in twenty twenty six. 0:09:39.480 --> 0:09:41.920 This would be a number that was unthinkable about just 0:09:41.920 --> 0:09:45.240 a couple of years ago. So we're at a significantly 0:09:45.360 --> 0:09:48.280 higher scale. But what happens at that point? It's natural 0:09:48.320 --> 0:09:51.320 that some of those growth rates taper off, But for us, Paul, 0:09:51.480 --> 0:09:55.160 it's still AI is such an important theme, and I 0:09:55.160 --> 0:09:58.480 think in Vidia results also highlight that there's so many 0:09:58.520 --> 0:10:02.679 other ways to access that, including in private markets, including 0:10:02.679 --> 0:10:03.560 in infrastructure. 0:10:03.640 --> 0:10:05.080 So that's what we're really focused on. 0:10:05.440 --> 0:10:07.280 I mean, when we look at any sort of earnings 0:10:07.280 --> 0:10:10.000 report from Nvidia, there's a lot of anticipation heading up 0:10:10.040 --> 0:10:11.320 to it, and we do see a lot of these 0:10:11.400 --> 0:10:15.040 lofty expectations. As you noted, is there any concern that maybe, 0:10:15.080 --> 0:10:18.400 you know, expectations are too high for some of these companies. 0:10:19.120 --> 0:10:21.640 I mean, they've certainly been ratcheted up. But I will 0:10:21.679 --> 0:10:22.200 say that if. 0:10:22.120 --> 0:10:24.400 You look at the history of Nvidia, for example, it 0:10:24.520 --> 0:10:27.760 has a history of delivering on those expectations, and maybe 0:10:27.760 --> 0:10:30.760 on the exact earnings day, they don't always deliver on 0:10:30.800 --> 0:10:33.679 the loftiest of expectations. But what you see over time 0:10:33.800 --> 0:10:37.360 is the price continued to march higher because the expectations 0:10:37.360 --> 0:10:40.600 have continued to march higher. So I think that's something 0:10:40.640 --> 0:10:43.760 that supported the stock and probably will continue. And look, 0:10:43.840 --> 0:10:47.000 you know, broadly speaking, if I think about is AI 0:10:47.280 --> 0:10:51.240 meeting expectations, I think it is for what it is today. 0:10:51.600 --> 0:10:54.199 We are starting to see some early signs of monetization, 0:10:54.480 --> 0:10:56.280 and you can think about it in terms of a 0:10:56.320 --> 0:10:57.359 couple of pockets. 0:10:57.520 --> 0:10:58.360 You can think about it. 0:10:58.360 --> 0:11:02.080 In terms of cost reduction, in terms of productivity improvements, 0:11:02.160 --> 0:11:05.400 and also in terms of actual new revenue streams. And 0:11:05.480 --> 0:11:07.800 I think the actual new revenue streams maybe are a 0:11:07.840 --> 0:11:10.520 little bit further off for some companies. Although I think 0:11:10.559 --> 0:11:12.720 we are starting to see more cloud, we're starting to 0:11:12.760 --> 0:11:17.240 see utilization, We're starting to see more social media success, for. 0:11:17.120 --> 0:11:18.760 Example with our targeted ads. 0:11:18.960 --> 0:11:21.480 So I think you start to you do have some 0:11:21.720 --> 0:11:24.800 positives in that revenue generation pocket, but you have more 0:11:24.800 --> 0:11:27.600 and more positives that companies are citing in terms of 0:11:27.960 --> 0:11:30.800 efficiency gains and in terms of cost reductions. 0:11:31.040 --> 0:11:32.120 And so that's. 0:11:31.880 --> 0:11:35.679 Why the momentum for US for AI is likely to continue, 0:11:36.000 --> 0:11:39.040 because there are tangible benefits that more and more companies 0:11:39.080 --> 0:11:39.600 can point to. 0:11:40.440 --> 0:11:44.280 So what are the ways are you suggesting that investors 0:11:44.280 --> 0:11:46.760 get exposure to AI? A lot of folks saying maybe 0:11:46.800 --> 0:11:49.080 like power generation or something like that. How do you 0:11:49.120 --> 0:11:51.600 think about that? Because not everybody is comfortable paying some 0:11:51.600 --> 0:11:54.480 of these technology multiples, and maybe a lot of folks 0:11:54.520 --> 0:11:56.840 think that some of these tech names, like the software 0:11:56.880 --> 0:12:00.760 names or maybe the hyperscalars, have kind of outrun comfort level, 0:12:00.800 --> 0:12:02.160 so they're looking for other ways. 0:12:02.080 --> 0:12:04.160 Right, Well, I think the first thing investors have to 0:12:04.160 --> 0:12:06.520 do is take a giant step back and just size 0:12:06.600 --> 0:12:09.160 the opportunity set. Right, a couple of years ago, the 0:12:09.320 --> 0:12:13.280 GENAI total addressable market was somewhere around two hundred billion dollars. 0:12:13.520 --> 0:12:16.920 You fast forward to twenty twenty seven, twenty thirty, you're 0:12:16.920 --> 0:12:21.359 now looking close to a trillion dollar TAM for artificial intelligence. 0:12:21.600 --> 0:12:24.840 So that means that it's not just nvidiaan semiconductors. But 0:12:24.880 --> 0:12:28.080 it's a whole host of beneficiaries, and I would put 0:12:28.120 --> 0:12:31.319 them in two sorts of opportunities bucket. The first one, 0:12:31.320 --> 0:12:33.760 I would say, is an infrastructure. We have to build 0:12:33.840 --> 0:12:36.560 up the infrastructure to ensure that AI is possible. 0:12:36.800 --> 0:12:37.600 So what does that mean. 0:12:37.720 --> 0:12:40.960 That certainly means data centers, and not just any data center, 0:12:41.000 --> 0:12:43.760 but an AI specific data center, which. 0:12:43.559 --> 0:12:45.840 Requires more power density. 0:12:45.440 --> 0:12:48.400 Which requires greater connectivity, which requires more cooling. 0:12:48.679 --> 0:12:50.640 So that's a big topic for us. 0:12:50.880 --> 0:12:54.200 The second one, as you mentioned, it's actually power generation. 0:12:54.400 --> 0:12:57.560 You can't really run that data center without the power. 0:12:57.920 --> 0:12:59.719 And if you think about the power. 0:12:59.480 --> 0:13:02.199 Consumption, and it's for some of these things, it's approaching 0:13:02.360 --> 0:13:05.720 one gigawot, you know. That's what we're talking about here. 0:13:06.200 --> 0:13:09.560 The third component, which is not as well talked about, 0:13:09.600 --> 0:13:12.320 I would say, is actually fiber and all sorts of 0:13:12.320 --> 0:13:15.760 wireless connectivity. You know, it's one thing to train AI 0:13:15.920 --> 0:13:17.599 in a data center, let's say, in the middle of 0:13:17.679 --> 0:13:20.320 the country without a proximity to the end user. But 0:13:20.400 --> 0:13:22.320 it's a whole different thing if you start to do 0:13:22.679 --> 0:13:26.880 inference and you need that instant feedback loop and reaction, 0:13:27.040 --> 0:13:31.080 so you need fiber. You need you know, dense network, 0:13:31.120 --> 0:13:33.679 you need towers, you need small cells. So there's so 0:13:33.800 --> 0:13:37.400 many opportunities within infrastructure. And then Paul the other thing, 0:13:37.440 --> 0:13:40.760 I would say in software, there's going to be winners 0:13:40.760 --> 0:13:44.640 and losers in software. But companies that we're emphasizing are 0:13:44.679 --> 0:13:47.560 those that maybe have a proprietary data set. 0:13:47.640 --> 0:13:48.920 I think that's really important. 0:13:49.440 --> 0:13:53.280 They are developing AI tools, like large language models that 0:13:53.360 --> 0:13:56.640 are able to use some of that proprietary data. They 0:13:56.720 --> 0:14:00.960 automate certain workflows and in some cases completely sort of 0:14:00.960 --> 0:14:04.440 substitute what a human may do in that situation. So 0:14:05.200 --> 0:14:08.800 you know, it's definitely a careful selection approach. But I 0:14:08.840 --> 0:14:12.520 would say so many of those companies AI software companies 0:14:12.559 --> 0:14:16.120 are actually available in private markets, much more so than 0:14:16.160 --> 0:14:17.480 what's publicly traded today. 0:14:18.240 --> 0:14:21.320 So you know, we heard that Nvidia expects to spend 0:14:21.400 --> 0:14:25.480 three to four trillion dollars on AI infrastructure through between 0:14:25.480 --> 0:14:28.480 now and the end of the decade. Here, do you 0:14:28.520 --> 0:14:31.920 have any sort of thoughts about what CAPEX looks like 0:14:32.000 --> 0:14:34.280 right now, what is spending right now in the space 0:14:34.640 --> 0:14:37.880 technology more broadly when it pertains to AI spend. 0:14:38.120 --> 0:14:40.480 Yeah, well, let's look at the hyperscalers for example, you know, 0:14:40.520 --> 0:14:42.800 I mentioned that in twenty twenty six they're likely to 0:14:42.840 --> 0:14:45.960 spend four hundred billion dollars. That's up from three hundred 0:14:46.000 --> 0:14:49.560 and fifty billion that we're forecasting for twenty twenty five. 0:14:49.640 --> 0:14:51.080 And that's up a lot. 0:14:50.800 --> 0:14:53.240 From you know, one hundred billion dollars so run rate 0:14:53.560 --> 0:14:56.520 just a couple of years ago. Now, the interesting thing 0:14:56.560 --> 0:15:00.520 about that is those estimates have been consistently moved higher, 0:15:00.800 --> 0:15:03.040 and that I think goes back to the point is 0:15:03.080 --> 0:15:06.160 a demand for AI at this point is really insatiable, 0:15:06.440 --> 0:15:09.840 and it's because we're starting to see those early signs 0:15:09.880 --> 0:15:13.000 of payoff. And so you know, if the question is 0:15:13.000 --> 0:15:15.480 do we have a concern about the sort of massive 0:15:15.880 --> 0:15:20.200 spend on AI, I wouldn't say so because the demand 0:15:20.360 --> 0:15:21.640 is just so robust. 0:15:21.840 --> 0:15:23.480 All right, let's back away from the air. I talked 0:15:23.480 --> 0:15:25.600 a little bit last week to talk was about the 0:15:25.600 --> 0:15:27.400 Federal Reserve and what are they going to do with 0:15:27.480 --> 0:15:29.560 interest rates? What did you take away from Jackson Hole 0:15:30.120 --> 0:15:31.800 and moving forward here through major. 0:15:31.880 --> 0:15:35.760 Right, Well, it was probably a strong Evan nod to September, 0:15:35.960 --> 0:15:39.160 as we could have expected from Fetchair Powell. And you 0:15:39.160 --> 0:15:41.680 know what's interesting is he clearly pivoted to focus on 0:15:41.720 --> 0:15:44.440 the labor market weakness, and we saw that once again 0:15:44.480 --> 0:15:46.840 in the conference board. For example, we saw that the 0:15:46.920 --> 0:15:50.640 labor market differential meaning the jobs that are plentiful versus 0:15:50.680 --> 0:15:53.880 hard to get, that continues to narrow. So that suggests 0:15:53.920 --> 0:15:57.480 that labor market weakness. The other thought that I thought 0:15:57.600 --> 0:16:01.880 was interesting from Jackson Hole is that while inflation is 0:16:01.960 --> 0:16:05.760 surely likely to spike in the coming months, they're willing 0:16:05.800 --> 0:16:08.440 to look through that. And part of the reason for 0:16:08.520 --> 0:16:10.720 that is because they don't expect it to be sticky. 0:16:11.000 --> 0:16:13.000 They don't think this is going to be systemic, they 0:16:13.000 --> 0:16:15.480 don't think is going to be structural. The reason for 0:16:15.520 --> 0:16:19.240 that is actually that weakening labor market. And you know, 0:16:19.400 --> 0:16:22.760 if you're trying to raise prices into a weakening consumer 0:16:23.240 --> 0:16:25.680 or into a weaker jobs market, you're likely not going 0:16:25.720 --> 0:16:28.520 to be successful. And so that's becoming part of the 0:16:28.520 --> 0:16:31.640 FED narrative as well. So I think it is a 0:16:31.760 --> 0:16:35.440 layout for September. I mean, barring just a huge upside 0:16:35.480 --> 0:16:38.600 surprise on payrolls, which I don't expect, or you know, 0:16:38.680 --> 0:16:41.400 barring I would say not only a spike in inflation, 0:16:41.480 --> 0:16:42.760 but a spike in inflation. 0:16:42.480 --> 0:16:45.280 Expectations, and I don't think we're seeing that. Do you 0:16:45.280 --> 0:16:48.080 agree with that view from the Fed right now? I mean, 0:16:48.200 --> 0:16:50.560 of course we know about this dual mandate. It's about 0:16:50.600 --> 0:16:55.120 stabilizing prices, bringing down inflation, and of course maximum unemployment 0:16:55.400 --> 0:16:56.640 or maximum employment excuse. 0:16:56.440 --> 0:16:58.280 Me, Yeah, I do actually very much agree. 0:16:58.360 --> 0:17:01.880 You know, I do think the FLA story, the teriff 0:17:01.880 --> 0:17:05.359 for re lated induced inflation is a one time step 0:17:05.440 --> 0:17:07.840 up higher in the price levels, and I very much 0:17:07.880 --> 0:17:10.679 agree with the argument that you don't have the labor 0:17:10.800 --> 0:17:13.200 market strength in order to be able to fully pass 0:17:13.240 --> 0:17:14.359 through those increases. 0:17:14.560 --> 0:17:14.760 You know. 0:17:14.840 --> 0:17:17.359 The other thing I would say, if you look at companies, 0:17:17.400 --> 0:17:20.720 including our portfolio companies, they're using a mix of tactics 0:17:20.760 --> 0:17:23.040 in order to deal with tariffs. Some of them are 0:17:23.080 --> 0:17:25.399 passing through all of the cost increases, for example in 0:17:25.440 --> 0:17:28.520 the data center space, because they can. Some of them 0:17:28.560 --> 0:17:32.760 are passing through partial cost increases. They're working with suppliers 0:17:33.080 --> 0:17:36.679 to absorb some of those TERRAF related increases as well, 0:17:36.920 --> 0:17:38.760 and some of them are shifting supply chains. 0:17:38.880 --> 0:17:40.160 So for that reason, I. 0:17:40.040 --> 0:17:42.680 Don't think we're seeing a huge we're going to see 0:17:42.720 --> 0:17:46.000 a huge spike in inflation as it could have been 0:17:46.200 --> 0:17:47.040 in the coming months. 0:17:47.160 --> 0:17:48.840 So that's the first part that I agree with. 0:17:49.040 --> 0:17:51.600 The second part I agree with is the labor market 0:17:51.680 --> 0:17:52.840 is clearly. 0:17:52.480 --> 0:17:54.480 Weakening, and I would say it's sort of I don't 0:17:54.480 --> 0:17:56.360 want to say the precipice, but I'll call it. It's 0:17:56.359 --> 0:17:57.320 sort of on edge. 0:17:57.359 --> 0:17:59.840 It's sort of on this edge, and if you tip 0:18:00.040 --> 0:18:02.800 it over, you're going to tip it over into weakness. 0:18:03.040 --> 0:18:04.960 You know, if you look at the unemployment rate of 0:18:05.000 --> 0:18:07.879 four point two likely go into four point three percent. 0:18:08.240 --> 0:18:11.600 If you look at the layoffs, you know, we're just 0:18:11.800 --> 0:18:17.760 this close to actually slipping into outright potential negative job growth. 0:18:17.800 --> 0:18:20.200 And by the way, you know, I mentioned that if 0:18:20.200 --> 0:18:22.639 companies are not passing through the cost increases, what are 0:18:22.640 --> 0:18:26.000 they doing. They're absorbing that in their margins. So that's 0:18:26.000 --> 0:18:29.040 why the labor market in turn is again on this edge. 0:18:29.160 --> 0:18:31.119 So I do very much agree, and I hope we 0:18:31.160 --> 0:18:33.920 see a rate cut in September. I do associate scope 0:18:33.960 --> 0:18:35.280 for a couple more this year. 0:18:36.600 --> 0:18:39.280 Other than technology. What screens well for you guys these days? 0:18:39.280 --> 0:18:41.880 I don't know if you'd do it by industry, sector, 0:18:41.960 --> 0:18:44.720 by factor, how do you guys try to find some opportunities? 0:18:44.920 --> 0:18:48.920 We do it by theme and also of course by 0:18:48.960 --> 0:18:51.879 industry sector as well. But when I think about some 0:18:51.960 --> 0:18:54.159 of the themes that we're excited about, it's clearly the 0:18:54.200 --> 0:18:57.880 digital transformation and the many sectors that it touches. We're 0:18:57.920 --> 0:19:03.320 also investing along the sustained nobility theme as well. And finally, 0:19:03.480 --> 0:19:06.439 this notion of new living. The way we consume, the 0:19:06.440 --> 0:19:08.720 way we take care of ourselves, the way we exercise, 0:19:08.800 --> 0:19:11.719 the way we live is all very different today, and 0:19:11.720 --> 0:19:13.160 in many ways it's tech enabled. 0:19:13.440 --> 0:19:13.600 You know. 0:19:13.720 --> 0:19:16.080 Further, I would think of it in terms of different 0:19:16.320 --> 0:19:21.040 sectors within sort of the private market space, and it's 0:19:21.320 --> 0:19:26.120 it's goods and its services, it's goods and products, it's technology, 0:19:26.520 --> 0:19:30.320 and it's also healthcare, health and healthcare sciences. And so 0:19:30.400 --> 0:19:34.200 we're we're finding a multid of opportunities along all those, 0:19:34.320 --> 0:19:34.880 all four of. 0:19:34.800 --> 0:19:37.640 Those, digging into healthcare because I mean, it's the worst 0:19:37.680 --> 0:19:39.480 performing sector so far this year in the S and 0:19:39.480 --> 0:19:42.040 P five hundred. Where are you seeing opportunities there? 0:19:42.840 --> 0:19:43.080 Right? 0:19:43.680 --> 0:19:47.119 So clearly healthcare in the public markets has been the 0:19:47.200 --> 0:19:49.639 mercy of what's happening in Washington, d C. And the 0:19:49.680 --> 0:19:53.359 policy there. You know, one secular growth in healthcare, I 0:19:53.359 --> 0:19:56.159 would say, is within pharmaceuticals and the fact that so 0:19:56.400 --> 0:20:00.119 many R and D dollars have gone into new clinical 0:20:00.200 --> 0:20:04.280 trials and new discoveries and eventually for some companies those payoff. 0:20:04.560 --> 0:20:08.760 That's not actually where we're taking our risks, but rather 0:20:09.040 --> 0:20:13.480 we're looking at pharmaceutical services that cater to the large 0:20:13.640 --> 0:20:16.919 or small farmer companies in helping them develop some of 0:20:16.920 --> 0:20:20.080