1 00:00:02,720 --> 00:00:08,560 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I feel like we 2 00:00:08,600 --> 00:00:11,320 Speaker 1: need your address things. Yes, go One is that I 3 00:00:11,360 --> 00:00:11,920 Speaker 1: sound like this. 4 00:00:12,119 --> 00:00:14,080 Speaker 2: You sound great, I know, but it's different. 5 00:00:14,120 --> 00:00:16,319 Speaker 1: I have a cold, so it's going to be like 6 00:00:16,400 --> 00:00:19,480 Speaker 1: the best, the best voice you've ever heard on a 7 00:00:19,520 --> 00:00:21,279 Speaker 1: podcast for like ten minutes, and then I'm going to 8 00:00:21,320 --> 00:00:23,279 Speaker 1: lose my voice and it's going to be over. So 9 00:00:23,280 --> 00:00:24,599 Speaker 1: it'll be great on both accounts. 10 00:00:24,800 --> 00:00:25,000 Speaker 2: Yeah. 11 00:00:25,120 --> 00:00:26,400 Speaker 1: The other thing I want to address is what are 12 00:00:26,400 --> 00:00:27,200 Speaker 1: you going to be for Halloween? 13 00:00:27,320 --> 00:00:30,040 Speaker 2: Oh my god, man, I'm so thrilled you asked. I'll 14 00:00:30,040 --> 00:00:32,919 Speaker 2: probably just dress in all black and put on caddiers. Okay, 15 00:00:33,000 --> 00:00:35,800 Speaker 2: but that's what I do most Fridays. Yeah, right, what 16 00:00:35,800 --> 00:00:36,239 Speaker 2: about you? 17 00:00:36,720 --> 00:00:38,159 Speaker 1: I think I've dies this bullet? 18 00:00:38,440 --> 00:00:40,239 Speaker 2: Is it a bullet? Isn't it just joyful? 19 00:00:40,640 --> 00:00:44,320 Speaker 1: Is joyful to take your kids around in their costumes 20 00:00:44,440 --> 00:00:47,239 Speaker 1: when you're not in a costume? I shouldn't it? Like 21 00:00:47,360 --> 00:00:49,680 Speaker 1: I see like the people with family costers, like, Okay, 22 00:00:49,680 --> 00:00:50,960 Speaker 1: that's cool, and I kind of want to do it, 23 00:00:51,000 --> 00:00:54,200 Speaker 1: but like not enough to Yeah, for adults, it's got 24 00:00:54,240 --> 00:00:54,960 Speaker 1: to be creative. 25 00:00:55,120 --> 00:00:57,960 Speaker 2: There are onesies out there, but I hear, yeah, I 26 00:00:58,000 --> 00:01:01,520 Speaker 2: don't really want to cut around really psyched. I mean 27 00:01:01,520 --> 00:01:03,960 Speaker 2: not to go running a one sie. I spoke too soon, 28 00:01:04,480 --> 00:01:07,520 Speaker 2: but I'm just I love Halloween so much. I'm really excited. 29 00:01:08,360 --> 00:01:10,320 Speaker 2: I'm an adult and I don't have a child, so 30 00:01:10,360 --> 00:01:12,440 Speaker 2: I feel like I can't. But we're going to walk 31 00:01:12,480 --> 00:01:18,000 Speaker 2: around Hoboken because Hoboken goes hard on Halloween. A lot 32 00:01:18,040 --> 00:01:18,280 Speaker 2: of these. 33 00:01:19,319 --> 00:01:20,399 Speaker 1: Yes, but okay, I. 34 00:01:20,319 --> 00:01:22,039 Speaker 2: Mean I'm not going to like knock on doors and 35 00:01:22,080 --> 00:01:25,360 Speaker 2: take candy. If someone with a bucket of candy comes 36 00:01:25,440 --> 00:01:26,679 Speaker 2: up to me and says, do you want a piece, 37 00:01:27,280 --> 00:01:29,680 Speaker 2: I'm not going to turn them down. That'd be crazy. 38 00:01:30,200 --> 00:01:33,520 Speaker 1: Are you going to wear your cat ears on air? 39 00:01:33,840 --> 00:01:35,479 Speaker 2: No? No, I won't. 40 00:01:35,680 --> 00:01:37,280 Speaker 1: I feel like one year, I want you to wear 41 00:01:37,360 --> 00:01:39,720 Speaker 1: like a children's ghost costume, you know, just like a 42 00:01:39,840 --> 00:01:41,600 Speaker 1: sheet of holes for eyes on air. 43 00:01:41,760 --> 00:01:44,399 Speaker 2: I usually subtly try to dress up on air. 44 00:01:44,520 --> 00:01:46,000 Speaker 1: Like you've worn the cat I feel like we talked 45 00:01:46,000 --> 00:01:48,280 Speaker 1: about this last year, but you really did. 46 00:01:48,680 --> 00:01:50,960 Speaker 2: Some dedicated listener can tell us. I mean, I always 47 00:01:51,080 --> 00:01:53,560 Speaker 2: I have this like Christmas shirt that I try to 48 00:01:53,560 --> 00:01:56,040 Speaker 2: sneak in once a year. Tomorrow, I've I think I'm 49 00:01:56,040 --> 00:01:58,520 Speaker 2: going to wear all black, like a black turtleneck and 50 00:01:58,640 --> 00:02:00,400 Speaker 2: just be kind of spooky. 51 00:02:00,680 --> 00:02:03,000 Speaker 1: Okay, just subtle, just a. 52 00:02:03,000 --> 00:02:06,960 Speaker 2: Little maybe like a cat eye eyeliner. But I will 53 00:02:07,000 --> 00:02:10,640 Speaker 2: mention over and over again that it's Halloween. I love Halloween. Yeah, 54 00:02:10,760 --> 00:02:12,440 Speaker 2: I want to put someone in a ghost costume and 55 00:02:12,520 --> 00:02:15,400 Speaker 2: just have them walk behind me at some point, just once. 56 00:02:15,840 --> 00:02:17,760 Speaker 1: I think you should actually have a ghost cut host 57 00:02:17,800 --> 00:02:18,720 Speaker 1: who doesn't say anything. 58 00:02:18,800 --> 00:02:22,040 Speaker 2: That would be kind of funny. They just like a 59 00:02:22,160 --> 00:02:25,240 Speaker 2: human and a ghost, like yeah, like. 60 00:02:25,200 --> 00:02:27,000 Speaker 1: Many glasses over the ghost pace, you know. 61 00:02:27,200 --> 00:02:30,360 Speaker 2: Yeah. I turned to them and like say something, and 62 00:02:30,360 --> 00:02:35,800 Speaker 2: then I turned back like this sounds great. 63 00:02:36,200 --> 00:02:39,000 Speaker 1: I've got your TV shows all right, podcast. 64 00:02:38,720 --> 00:02:40,919 Speaker 2: Now, we're just trying to run out the clock here. 65 00:02:42,200 --> 00:02:43,679 Speaker 1: To the podcast like that. 66 00:02:43,880 --> 00:02:47,880 Speaker 2: Yeah scary. 67 00:02:49,600 --> 00:02:53,040 Speaker 1: Hello and welcome to the Money Stuff podcast, your weekly podcast. 68 00:02:53,080 --> 00:02:57,120 Speaker 1: Where are you talking about stuff related to money? I'm 69 00:02:57,120 --> 00:02:59,079 Speaker 1: Matt Levine and I write the Money Stuff column for 70 00:02:59,160 --> 00:02:59,960 Speaker 1: Bloomberg Get Thing. 71 00:03:00,680 --> 00:03:03,160 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 72 00:03:03,200 --> 00:03:18,920 Speaker 2: an anchor for Bloomberg Television. We're in We are in 73 00:03:19,000 --> 00:03:23,120 Speaker 2: the heart of magnificent seven tech earnings, which means we 74 00:03:23,160 --> 00:03:26,400 Speaker 2: are in the heart of those tech companies just saying 75 00:03:26,440 --> 00:03:29,840 Speaker 2: how much they're going to spend on AI infrastructure, and 76 00:03:29,919 --> 00:03:31,040 Speaker 2: it is so much. 77 00:03:31,639 --> 00:03:34,320 Speaker 1: It's really like either you do or you don't believe that, 78 00:03:34,360 --> 00:03:36,880 Speaker 1: Like the entire world is going to change with AI. 79 00:03:37,080 --> 00:03:38,640 Speaker 1: And if you believe it, you're like, yeah, sure, ten 80 00:03:38,680 --> 00:03:41,360 Speaker 1: trillion dollars, no problem, right, But it is like it's 81 00:03:41,400 --> 00:03:44,960 Speaker 1: easy to be nervous or skeptical or make fun of 82 00:03:44,960 --> 00:03:46,480 Speaker 1: those numbers because it's a lot of money. 83 00:03:46,640 --> 00:03:49,520 Speaker 2: Yeah. Well, something that I've been talking about on television 84 00:03:49,560 --> 00:03:52,080 Speaker 2: and casually with my friends in the newsroom is how 85 00:03:53,000 --> 00:03:55,440 Speaker 2: a lot of this these hopes and dreams and these 86 00:03:55,440 --> 00:03:58,520 Speaker 2: ambitions of these big tech companies to spend all this money, 87 00:03:59,160 --> 00:04:01,200 Speaker 2: A lot of it has been able to be funded 88 00:04:01,240 --> 00:04:04,000 Speaker 2: from free cash flow, but increasingly they're having to tap 89 00:04:04,040 --> 00:04:06,280 Speaker 2: the bond markets. But as you laid out in a 90 00:04:06,280 --> 00:04:08,760 Speaker 2: column this week, they have stellar credit ratings, so they 91 00:04:08,800 --> 00:04:12,360 Speaker 2: don't necessarily want to rely too much on the bond market. 92 00:04:12,720 --> 00:04:14,080 Speaker 1: Yeah, it's a mixed bag, right, Like you have a 93 00:04:14,120 --> 00:04:16,200 Speaker 1: stellar credit rating, so you can borrow in the bond market, 94 00:04:16,200 --> 00:04:17,680 Speaker 1: but like you can't do too much because then you 95 00:04:17,720 --> 00:04:19,880 Speaker 1: lose the credit iting. So Meta is out this week 96 00:04:19,920 --> 00:04:22,919 Speaker 1: with a twenty five billion dollar investment grade deal. Yes, 97 00:04:22,960 --> 00:04:25,840 Speaker 1: but they want more than twenty five billion dollars and 98 00:04:26,520 --> 00:04:31,520 Speaker 1: to do that they have tapped the woo like I guess, 99 00:04:31,560 --> 00:04:33,840 Speaker 1: I don't know. You call it like people sometimes called 100 00:04:33,880 --> 00:04:36,520 Speaker 1: the hybrid's market, but also like it's the kind of 101 00:04:36,520 --> 00:04:40,480 Speaker 1: project finance. Yeah, it's like off balance sheet financing. Basically, 102 00:04:40,560 --> 00:04:43,920 Speaker 1: like they set up a joint venture where the joint 103 00:04:44,000 --> 00:04:47,040 Speaker 1: venture will operate their data centers, and the joint venture 104 00:04:47,120 --> 00:04:50,159 Speaker 1: will be owned by in this case Blue Owl, but 105 00:04:50,279 --> 00:04:56,640 Speaker 1: in the general case someone who is uh, basically credit 106 00:04:56,680 --> 00:04:59,000 Speaker 1: firm but is willing to do weird stuff, and so 107 00:04:59,160 --> 00:05:01,000 Speaker 1: Blue Oul is the equ the owner of the data center, 108 00:05:01,400 --> 00:05:04,800 Speaker 1: and Meta signs a series of contracts that in the 109 00:05:04,839 --> 00:05:06,840 Speaker 1: aggregate kind of look like that. Like they sign like 110 00:05:06,960 --> 00:05:10,480 Speaker 1: leases and a residual value guarantee, where like at the 111 00:05:10,560 --> 00:05:11,919 Speaker 1: end of the term of the lease they have to 112 00:05:11,920 --> 00:05:15,480 Speaker 1: buy the chips in the data center. But those contracts 113 00:05:15,560 --> 00:05:19,039 Speaker 1: look enough like debt that Blue Owl can package it 114 00:05:19,040 --> 00:05:21,520 Speaker 1: into bonds and sell it to Pimcar or whatever, but 115 00:05:21,680 --> 00:05:26,600 Speaker 1: also enough not like debt that it doesn't affect Meta's 116 00:05:27,000 --> 00:05:30,320 Speaker 1: accounting or its credit ratings. So it's like not debt 117 00:05:30,320 --> 00:05:32,800 Speaker 1: of Meta. For the purposes of like Meta, but it 118 00:05:32,839 --> 00:05:35,280 Speaker 1: is kind of debt of Meta for the purposes of 119 00:05:35,320 --> 00:05:36,400 Speaker 1: the people buying the bonds. 120 00:05:36,839 --> 00:05:41,599 Speaker 2: So you talked about how this is a fantastic trick 121 00:05:41,839 --> 00:05:44,040 Speaker 2: that if you want to call it that that has connotations, but. 122 00:05:44,080 --> 00:05:46,040 Speaker 1: It's just like it's just the thing people do. Right, 123 00:05:46,160 --> 00:05:48,120 Speaker 1: It's like it turns out there are things that are 124 00:05:48,160 --> 00:05:49,760 Speaker 1: debt and there are things that are not debt, but 125 00:05:49,800 --> 00:05:52,640 Speaker 1: then there's like this huge middle ground of things that 126 00:05:52,760 --> 00:05:56,320 Speaker 1: they kind of that that and like, for the most part, 127 00:05:57,200 --> 00:05:59,880 Speaker 1: things are pretty binary for like ratings and balance sheet. 128 00:06:00,160 --> 00:06:02,360 Speaker 1: Either it's on your balance sheet or it's not. Either 129 00:06:02,440 --> 00:06:05,040 Speaker 1: it effects your credit anying credit atings are more not 130 00:06:05,120 --> 00:06:08,520 Speaker 1: quite binary, like the ratings agency sometimes gives things partial credit. 131 00:06:09,080 --> 00:06:11,120 Speaker 1: But you know, if you like check the right boxes, 132 00:06:11,160 --> 00:06:14,400 Speaker 1: then it's not quite debt. But you can convince people 133 00:06:14,920 --> 00:06:17,520 Speaker 1: to buy the bonds because they look pretty much like 134 00:06:17,560 --> 00:06:18,000 Speaker 1: your debt. 135 00:06:18,120 --> 00:06:20,839 Speaker 2: Yeah, give or take you do, right though. That The 136 00:06:20,880 --> 00:06:25,039 Speaker 2: bonds for the Hyperion Hyperion the name of the data center. 137 00:06:25,120 --> 00:06:27,560 Speaker 2: They price with a coupon of almost six point six percent, 138 00:06:27,600 --> 00:06:31,360 Speaker 2: which was roughly a percentage point higher than Meta's outstounding 139 00:06:31,400 --> 00:06:34,239 Speaker 2: corporate bonds and in line with the average jump on yields. 140 00:06:34,360 --> 00:06:37,920 Speaker 2: So hear what you're saying. But at a certain point, 141 00:06:37,920 --> 00:06:40,840 Speaker 2: I feel like people and investors see through this. 142 00:06:41,640 --> 00:06:43,440 Speaker 1: They do, and they don't, right, I mean, they don't 143 00:06:43,640 --> 00:06:45,360 Speaker 1: treat it like Meta debt exactly. 144 00:06:45,560 --> 00:06:45,760 Speaker 2: Yeah. 145 00:06:45,760 --> 00:06:47,600 Speaker 1: They you know, they're happy to buy it at a 146 00:06:47,839 --> 00:06:50,480 Speaker 1: yield and they're like, oh, yeah, it's great. It's like 147 00:06:50,560 --> 00:06:53,359 Speaker 1: it's backed by Meta. You know, it has structural features 148 00:06:53,360 --> 00:06:55,240 Speaker 1: that make it not quite as good as Meta debt, 149 00:06:55,240 --> 00:06:58,279 Speaker 1: but yeah, so it trades that a yield that is 150 00:06:59,200 --> 00:07:01,640 Speaker 1: a reasonable cut the capital for building a data center 151 00:07:01,680 --> 00:07:05,080 Speaker 1: and kind of keeps it off of Meta's pristine balance sheet. 152 00:07:05,320 --> 00:07:10,320 Speaker 2: Yeah, we're talking about this like weird structure, this SPV 153 00:07:10,520 --> 00:07:11,280 Speaker 2: that Meta is doing. 154 00:07:12,760 --> 00:07:15,360 Speaker 1: It's weird ish a little, but it's also like, you know, 155 00:07:15,480 --> 00:07:19,240 Speaker 1: the basic format of doing some sort of project finance JV. 156 00:07:20,240 --> 00:07:22,080 Speaker 1: They didn't invent that for data centers. 157 00:07:22,280 --> 00:07:22,840 Speaker 2: That's true. 158 00:07:22,920 --> 00:07:24,760 Speaker 1: It's been done for a while and a lot of 159 00:07:24,760 --> 00:07:27,320 Speaker 1: industries in different forms. And you know, I wrote this 160 00:07:27,360 --> 00:07:30,760 Speaker 1: week about it's very general purpose. And so Carrig Doctor 161 00:07:30,760 --> 00:07:35,520 Speaker 1: Pepper is putting its k cup manufacturing in JV so 162 00:07:35,560 --> 00:07:39,040 Speaker 1: that it can borrow against the k cups without tarnishing 163 00:07:39,080 --> 00:07:40,760 Speaker 1: its credit rating to do an acquisition. 164 00:07:40,960 --> 00:07:42,640 Speaker 2: Okay, so it's not weird. I do feel like a 165 00:07:42,680 --> 00:07:45,360 Speaker 2: lot of folks, myself included, have thought more about this 166 00:07:45,440 --> 00:07:48,680 Speaker 2: in the past two weeks, and maybe I have. Ever, 167 00:07:49,320 --> 00:07:53,000 Speaker 2: it's a concept that's being more widely socialized than perhaps 168 00:07:53,000 --> 00:07:53,240 Speaker 2: in the. 169 00:07:53,200 --> 00:07:54,520 Speaker 1: Past and higher profile. 170 00:07:54,760 --> 00:07:55,960 Speaker 2: Yes, that's the thing. 171 00:07:56,160 --> 00:07:57,800 Speaker 1: And the other thing about it that is interesting is 172 00:07:57,800 --> 00:08:00,000 Speaker 1: that it's really interacting with the private credit right. Yeah, 173 00:08:00,200 --> 00:08:03,040 Speaker 1: you look at all the private credit firms and stereotypically 174 00:08:03,080 --> 00:08:07,920 Speaker 1: private credit means leveraged acquisition finance. And the reason for 175 00:08:08,000 --> 00:08:11,040 Speaker 1: that is because you know, private equity sponsors are willing 176 00:08:11,080 --> 00:08:15,880 Speaker 1: to pay up for flexible, fast, guaranteed debt, so you 177 00:08:15,920 --> 00:08:17,800 Speaker 1: can make money doing that, Like you can charge more 178 00:08:17,800 --> 00:08:20,400 Speaker 1: than the public markets would if you can offer sponsors 179 00:08:20,440 --> 00:08:23,720 Speaker 1: like user friendly product financing their acquisitions. But then, like 180 00:08:23,800 --> 00:08:25,200 Speaker 1: you know, these private credit firms, like they have a 181 00:08:25,240 --> 00:08:27,600 Speaker 1: lot of insurance clients, they want to deploy a lot 182 00:08:27,640 --> 00:08:30,240 Speaker 1: of money. They need to eventually get into investment grade debt, 183 00:08:30,400 --> 00:08:33,360 Speaker 1: and it is harder to get into investment grade debt 184 00:08:33,360 --> 00:08:34,920 Speaker 1: because you go to like Meta and you say I'll 185 00:08:34,960 --> 00:08:36,840 Speaker 1: buy your bonds and metas like, sure, our bond's price 186 00:08:36,880 --> 00:08:40,120 Speaker 1: that you know, that's right, and it's not super exciting 187 00:08:40,160 --> 00:08:43,800 Speaker 1: for private credit. But then you do this project financing, 188 00:08:43,840 --> 00:08:45,200 Speaker 1: and you can do a thing that gets an A 189 00:08:45,280 --> 00:08:50,000 Speaker 1: plus rating and also has a yield. And also you're 190 00:08:50,040 --> 00:08:52,160 Speaker 1: not competing in the same way with the public markets 191 00:08:52,160 --> 00:08:56,720 Speaker 1: because regular public market bond investors can't necessarily buy two 192 00:08:56,760 --> 00:08:59,000 Speaker 1: point five billion dollars of equity in a data center, right, 193 00:08:59,040 --> 00:09:01,480 Speaker 1: Like the private credit firms are a little bit more 194 00:09:01,480 --> 00:09:04,040 Speaker 1: flexible and like what kind of financing arrangements they can do, 195 00:09:04,080 --> 00:09:05,760 Speaker 1: and a little bit more creative, and so they can 196 00:09:06,000 --> 00:09:08,439 Speaker 1: do this to get tens of billions of dollars of 197 00:09:08,520 --> 00:09:10,440 Speaker 1: investment grade financing, which is what they want. 198 00:09:10,679 --> 00:09:14,760 Speaker 2: Yeah, I do want to talk more broadly about META, Yes, 199 00:09:14,840 --> 00:09:17,280 Speaker 2: but before we get there, so you made the point that, okay, 200 00:09:17,320 --> 00:09:20,920 Speaker 2: even with this what they're working out, they also tap 201 00:09:20,960 --> 00:09:23,160 Speaker 2: the market, the public market for that twenty five billion 202 00:09:23,200 --> 00:09:27,160 Speaker 2: dollar bond. Apparently it was super oversubscribed according to our reporting. 203 00:09:27,200 --> 00:09:28,720 Speaker 2: But you think about. 204 00:09:30,480 --> 00:09:33,040 Speaker 1: You know, META has capacity to do hundreds of billions 205 00:09:33,040 --> 00:09:34,360 Speaker 1: of dollars then, and they don't do it because they 206 00:09:34,400 --> 00:09:36,400 Speaker 1: want to keep good rating. So they Yeah, they want 207 00:09:36,440 --> 00:09:37,000 Speaker 1: to met a bond. 208 00:09:37,080 --> 00:09:39,440 Speaker 2: Yeah, one hundred and twenty five billion dollars of bids 209 00:09:39,520 --> 00:09:40,439 Speaker 2: for this twenty. 210 00:09:40,160 --> 00:09:42,040 Speaker 1: Five So like over subscribe never means anything. 211 00:09:42,120 --> 00:09:45,679 Speaker 2: Yeah, well nothing truly means anything, Matt. But something I've 212 00:09:45,679 --> 00:09:47,800 Speaker 2: been thinking about, not just as it relates to Meta, 213 00:09:47,840 --> 00:09:50,760 Speaker 2: but all the spending that all these big tech companies 214 00:09:50,800 --> 00:09:55,680 Speaker 2: are doing. You think about the typical profile of investing 215 00:09:55,800 --> 00:09:59,959 Speaker 2: in tech from the equity market perspective, It's like, Okay, 216 00:10:00,160 --> 00:10:04,680 Speaker 2: these companies have pristine, tidy balance sheets, they're very capital 217 00:10:04,760 --> 00:10:07,520 Speaker 2: light businesses, et cetera, et cetera. And I do wonder, 218 00:10:07,760 --> 00:10:11,920 Speaker 2: you know, if the nature of investing in the tech 219 00:10:12,120 --> 00:10:15,719 Speaker 2: space is starting to change, And I keep asking people. 220 00:10:15,440 --> 00:10:18,120 Speaker 1: That just not capital light these days? I know, I 221 00:10:18,160 --> 00:10:19,440 Speaker 1: know it's the opposite. 222 00:10:19,640 --> 00:10:21,880 Speaker 2: It's just you think, like five years ago, the conversation 223 00:10:22,080 --> 00:10:26,600 Speaker 2: was about you know, intangible assets, and that week. 224 00:10:26,600 --> 00:10:29,840 Speaker 1: Meta right like five years ago was Meta called Facebook. Yeah, 225 00:10:30,640 --> 00:10:33,120 Speaker 1: but like you think, like the stereotypical business model of 226 00:10:33,160 --> 00:10:35,360 Speaker 1: Facebook is like it serves a web page, right, It's 227 00:10:35,360 --> 00:10:38,000 Speaker 1: like marginal cost is zero, right, so it's scales like 228 00:10:38,160 --> 00:10:41,120 Speaker 1: really really effectively. So Facebook is this classic investment where 229 00:10:41,160 --> 00:10:44,319 Speaker 1: you know, venture capitalists put money in and it goes 230 00:10:44,360 --> 00:10:47,600 Speaker 1: from being a dorm room project to being a one 231 00:10:47,679 --> 00:10:51,840 Speaker 1: hundred billion dollar company with kind of no additional spending. Yeah, 232 00:10:52,120 --> 00:10:55,880 Speaker 1: and that switch just flipped and now it's just everything 233 00:10:55,960 --> 00:10:57,720 Speaker 1: is a trillion dollars of data centers. 234 00:10:57,800 --> 00:11:02,000 Speaker 2: Well, I love talking about meta because you remember the 235 00:11:02,040 --> 00:11:05,840 Speaker 2: reason why Meta is called meta because they do. Hey, 236 00:11:05,840 --> 00:11:09,280 Speaker 2: one's so big on the metaverse, which I never talked 237 00:11:09,320 --> 00:11:12,240 Speaker 2: about before Mark Zuckerberg was lighting money on fire. 238 00:11:12,440 --> 00:11:15,160 Speaker 1: I don't really know what that entel, but it would 239 00:11:15,160 --> 00:11:17,439 Speaker 1: be funny if there were like data centers out there 240 00:11:17,520 --> 00:11:20,080 Speaker 1: that were optimized only for the metaverse and are now 241 00:11:20,120 --> 00:11:21,760 Speaker 1: just like tumbleweed is blowing through them. 242 00:11:21,840 --> 00:11:24,360 Speaker 2: I love it. I love it. But that led to 243 00:11:24,480 --> 00:11:26,600 Speaker 2: Meta's year of efficiency, et cetera. 244 00:11:26,679 --> 00:11:29,000 Speaker 1: It was this whole thing and now the opposite. 245 00:11:28,720 --> 00:11:31,880 Speaker 2: Alphabet and Microsoft. You can make a case for why 246 00:11:31,880 --> 00:11:35,240 Speaker 2: they're going so hard on AI when it comes to Meta. 247 00:11:36,160 --> 00:11:38,920 Speaker 2: I'm not sure what the payoff is. They said that 248 00:11:39,120 --> 00:11:42,280 Speaker 2: they're investing so hard because it's going to help better 249 00:11:42,320 --> 00:11:48,760 Speaker 2: target their advertising. But is that is that? Is that 250 00:11:48,840 --> 00:11:53,560 Speaker 2: a trillion dollar endeavors? It's wild, it's wild, and I've. 251 00:11:53,480 --> 00:11:56,160 Speaker 1: Learned is that the purpose of the economy is to 252 00:11:56,200 --> 00:11:57,640 Speaker 1: serve customized ads. 253 00:11:57,960 --> 00:12:01,440 Speaker 2: For sure, for sure, all the water sources be damned. 254 00:12:01,440 --> 00:12:04,040 Speaker 2: But I don't know. I'm curious to see how this 255 00:12:04,080 --> 00:12:07,520 Speaker 2: plays out for Meta Apparently, Mark Zuckerberg did say on 256 00:12:07,520 --> 00:12:10,040 Speaker 2: the earnings call they reported on Wednesday this week that 257 00:12:10,080 --> 00:12:12,400 Speaker 2: the company has options if it ends up spending too 258 00:12:12,440 --> 00:12:15,720 Speaker 2: much on infrastructure. In one scenario, he said, the company 259 00:12:15,720 --> 00:12:18,480 Speaker 2: could use the extra computing capacity for its core business. 260 00:12:18,720 --> 00:12:21,640 Speaker 2: In another, it could sell the power to other companies. 261 00:12:21,400 --> 00:12:24,400 Speaker 1: Or or really good metaverse. 262 00:12:24,920 --> 00:12:27,080 Speaker 2: That metaverse, really good metaverse. 263 00:12:27,360 --> 00:12:30,760 Speaker 1: Yeah, there's the centers full of legless Mark Zuckerberg. 264 00:12:31,240 --> 00:12:33,520 Speaker 2: I mean, they're still committed to that in there. I 265 00:12:33,520 --> 00:12:37,199 Speaker 2: believe that falls under the Reality Labs division, which reported 266 00:12:37,240 --> 00:12:40,120 Speaker 2: a loss of four point four billion dollars for the 267 00:12:40,160 --> 00:12:41,000 Speaker 2: third quarter. 268 00:12:40,880 --> 00:12:43,319 Speaker 1: On revenue of twelve cents revenue. 269 00:12:42,960 --> 00:12:46,600 Speaker 2: Of four hundred and seventy million. I'll have you know. Anyway, 270 00:12:46,960 --> 00:12:50,800 Speaker 2: I think it's super interesting. At least Mark Zuckerberg's thinking 271 00:12:50,840 --> 00:12:54,080 Speaker 2: about the prospect of maybe they're overbuilding. 272 00:13:08,840 --> 00:13:10,720 Speaker 1: Also, we're in hundreds of billions of dollars of a 273 00:13:10,880 --> 00:13:13,120 Speaker 1: spending open AI is a regular company. 274 00:13:12,880 --> 00:13:16,920 Speaker 2: Now I know it's exciting so regularly anti climactically. 275 00:13:17,280 --> 00:13:20,000 Speaker 1: Yeah, I was assuming there'd be like years of litigation, 276 00:13:20,240 --> 00:13:24,320 Speaker 1: and like all the state attorney generals and Microsofts were like, okay, good, 277 00:13:24,360 --> 00:13:26,400 Speaker 1: it's fine, So cool. They did their. 278 00:13:26,320 --> 00:13:29,319 Speaker 2: Conversial at this moment too. Elon Musk is a bit distraction, 279 00:13:29,679 --> 00:13:32,520 Speaker 2: which will brew we'll get to I'm sure he'll keep suing, 280 00:13:32,600 --> 00:13:35,560 Speaker 2: but yeah, we'll get to that anyway. Open Ai apparently 281 00:13:35,600 --> 00:13:39,240 Speaker 2: is so normal that maybe they're going to IPO in 282 00:13:39,480 --> 00:13:41,320 Speaker 2: next two years or so. 283 00:13:41,559 --> 00:13:43,400 Speaker 1: Yeah, sure, maybe, right. 284 00:13:43,280 --> 00:13:44,600 Speaker 2: That's what Reuter's told us. 285 00:13:44,840 --> 00:13:48,000 Speaker 1: Sure. I just feel like any large private tech company 286 00:13:48,080 --> 00:13:50,080 Speaker 1: might IPO in the next two years. 287 00:13:49,920 --> 00:13:52,760 Speaker 2: I know, but this one I feel like it urgently 288 00:13:52,800 --> 00:13:55,760 Speaker 2: needs to really. Okay, Yeah, they've committed to like one 289 00:13:55,800 --> 00:13:58,520 Speaker 2: point four trillion dollars of spending. Where are they going 290 00:13:58,559 --> 00:13:59,640 Speaker 2: to get the funds. 291 00:14:00,040 --> 00:14:02,200 Speaker 1: From, like an IPO? Maybe a little from an IPO? 292 00:14:02,400 --> 00:14:06,120 Speaker 1: Sam Almons, if open Ai and Fanny and Freddie I'll 293 00:14:06,120 --> 00:14:09,800 Speaker 1: go public like next year, God, what IPO? 294 00:14:10,440 --> 00:14:14,160 Speaker 2: So many good podcasts? No. Sam Almons said that I 295 00:14:14,200 --> 00:14:16,280 Speaker 2: think it's fair to say that it's the most likely 296 00:14:16,320 --> 00:14:18,920 Speaker 2: path for us, given the capital needs that we'll have. Yeah, 297 00:14:19,520 --> 00:14:20,960 Speaker 2: during a live stream on Tuesday. 298 00:14:20,960 --> 00:14:25,440 Speaker 1: Matt find the the public equity markets and the public 299 00:14:25,480 --> 00:14:29,600 Speaker 1: bond markets and the project finance markets. It's amazing, so 300 00:14:29,720 --> 00:14:32,080 Speaker 1: much money for AI. Yeah, so they're a normal company. 301 00:14:32,080 --> 00:14:33,880 Speaker 2: I don't know, a normal company. 302 00:14:33,680 --> 00:14:35,720 Speaker 1: Owns twenty seven percent. 303 00:14:35,960 --> 00:14:37,280 Speaker 2: Twenty seven percent. 304 00:14:37,480 --> 00:14:41,920 Speaker 1: The nonprofit owns twenty six percent but has like super 305 00:14:42,000 --> 00:14:46,840 Speaker 1: voting board control. It's very hard. Yeah, you be like, 306 00:14:47,440 --> 00:14:49,520 Speaker 1: we started as a non profit. We shore donations. Theydn't 307 00:14:49,520 --> 00:14:52,320 Speaker 1: think that much in donations, but in donations, and now 308 00:14:52,480 --> 00:14:55,400 Speaker 1: we're a five hundred million dollars private company for the 309 00:14:55,400 --> 00:14:58,040 Speaker 1: benefit of our investors. And one way to sort of 310 00:14:58,440 --> 00:15:01,560 Speaker 1: smooth that transition is that the nonprofit will continue to 311 00:15:01,600 --> 00:15:05,280 Speaker 1: control the company and have like supervoting rights. I don't 312 00:15:05,280 --> 00:15:07,280 Speaker 1: know how that will go for an IPA, but it'll 313 00:15:07,320 --> 00:15:10,480 Speaker 1: go fine. Like no one cares. You could imagine being like, 314 00:15:11,320 --> 00:15:13,760 Speaker 1: if this company is not run for profit, maybe I 315 00:15:13,800 --> 00:15:18,480 Speaker 1: shouldn't invest in it. Yeah, seeking an enormous financial return, 316 00:15:18,960 --> 00:15:20,400 Speaker 1: But no one has ever had that thought. 317 00:15:20,640 --> 00:15:22,720 Speaker 2: Yeah, or ever will. Yeah, that's so clean. 318 00:15:22,920 --> 00:15:25,520 Speaker 1: It's like I is definitely looking to give you a 319 00:15:25,600 --> 00:15:28,800 Speaker 1: high financial return on your investment, which is nice. 320 00:15:29,200 --> 00:15:32,200 Speaker 2: So do you not take Samulmon at his words, which 321 00:15:32,240 --> 00:15:35,400 Speaker 2: words that they need to do this to get the 322 00:15:35,400 --> 00:15:36,400 Speaker 2: capital that they need to know. 323 00:15:36,920 --> 00:15:38,920 Speaker 1: I believe that they need to do this to get 324 00:15:38,920 --> 00:15:42,160 Speaker 1: the capital. But like even now that they're a for 325 00:15:42,280 --> 00:15:46,080 Speaker 1: profit company, they're a public benefit company, which is slightly 326 00:15:46,160 --> 00:15:48,320 Speaker 1: less than for profit but still pretty for profit. But 327 00:15:48,320 --> 00:15:51,440 Speaker 1: they're controlled by a nonprofit board, right, Like the nonprofit 328 00:15:51,480 --> 00:15:56,040 Speaker 1: boards to put the interest of humanity first. But no 329 00:15:56,040 --> 00:15:58,000 Speaker 1: one cares about that. No one's worried about that. 330 00:15:58,080 --> 00:16:01,720 Speaker 2: I thought that a nonprofit board couldn't fire members. 331 00:16:02,400 --> 00:16:04,800 Speaker 1: Well, they're not going to fire him like that, lesson. 332 00:16:05,200 --> 00:16:08,080 Speaker 2: Well I know that, but even other members, like other 333 00:16:08,200 --> 00:16:10,680 Speaker 2: open AI executives. So when when you say they're in control, 334 00:16:10,720 --> 00:16:12,040 Speaker 2: I mean, what does that mean if they're not going 335 00:16:12,120 --> 00:16:14,320 Speaker 2: to fire the people running it? 336 00:16:14,600 --> 00:16:17,160 Speaker 1: That's a good question the board of directors, right, So, 337 00:16:17,240 --> 00:16:19,880 Speaker 1: like typically one of the main things the board does 338 00:16:19,960 --> 00:16:22,480 Speaker 1: is decide whether or not to do a merger. And 339 00:16:22,520 --> 00:16:25,200 Speaker 1: they're too big to do a merger, you know, yeah, right, Like, 340 00:16:25,200 --> 00:16:27,760 Speaker 1: I don't know how much operational control they have. One 341 00:16:27,760 --> 00:16:30,360 Speaker 1: thing the board of directors does is fire the CEO 342 00:16:30,440 --> 00:16:33,680 Speaker 1: if he does a bad job. But there's a constraint 343 00:16:33,760 --> 00:16:36,920 Speaker 1: on that job number one, Right, Like the board of 344 00:16:36,920 --> 00:16:42,360 Speaker 1: open Ai within recent memory has fired Sam Altman, not 345 00:16:42,400 --> 00:16:44,880 Speaker 1: for doing a bad job of developing products or leading 346 00:16:45,040 --> 00:16:48,880 Speaker 1: the people or achieving shareholder value, but for the crime of, 347 00:16:50,400 --> 00:16:52,440 Speaker 1: I don't know, something else. No one really understood it. 348 00:16:52,480 --> 00:16:54,720 Speaker 1: But it was kind of in the ballpark of like 349 00:16:54,920 --> 00:16:57,760 Speaker 1: not being for the benefit of humanity or like deceiving 350 00:16:57,760 --> 00:16:59,760 Speaker 1: the board. And I'm like, no one really knows, and 351 00:16:59,800 --> 00:17:02,880 Speaker 1: they quickly unfired him and then fired themselves. Yeah, so 352 00:17:03,640 --> 00:17:04,600 Speaker 1: that won't happen again. 353 00:17:04,680 --> 00:17:06,520 Speaker 2: Yeah, that was just about two years ago. 354 00:17:06,720 --> 00:17:09,440 Speaker 1: Yeah, it's amazing in theory, Like you can look around 355 00:17:09,480 --> 00:17:13,760 Speaker 1: a lot of like boards of big founder led tech startups. 356 00:17:14,440 --> 00:17:17,400 Speaker 1: Sometimes those founders do weird stuff and you can imagine 357 00:17:17,400 --> 00:17:19,600 Speaker 1: a board firing them, but you can't really because they 358 00:17:19,640 --> 00:17:20,359 Speaker 1: never would. You know. 359 00:17:20,520 --> 00:17:23,760 Speaker 2: There's been so many natural segues to yes. 360 00:17:23,720 --> 00:17:25,200 Speaker 1: Right, let's move straight along. 361 00:17:25,440 --> 00:17:28,160 Speaker 2: Okay, Well, the only thing I was going to say 362 00:17:28,240 --> 00:17:30,320 Speaker 2: is that when it comes to the capital needs, obviously 363 00:17:30,359 --> 00:17:32,439 Speaker 2: we've talked a lot about the private markets and the 364 00:17:32,440 --> 00:17:35,240 Speaker 2: public markets melding that if you're a private company, you 365 00:17:35,280 --> 00:17:36,960 Speaker 2: can get most of the funding that you need in 366 00:17:37,000 --> 00:17:41,440 Speaker 2: the private markets. This obviously is such an extreme example 367 00:17:41,960 --> 00:17:44,720 Speaker 2: that maybe it's not even worth mentioning, but it is 368 00:17:44,760 --> 00:17:47,000 Speaker 2: a limit perhaps of the private markets. 369 00:17:47,280 --> 00:17:50,040 Speaker 1: Yeah, sure, right, I tak that point, although we're not 370 00:17:50,160 --> 00:17:52,520 Speaker 1: there yet, right, No, this is like they're rumored to 371 00:17:52,560 --> 00:17:54,200 Speaker 1: be interested in going public in twenty twenty. 372 00:17:54,320 --> 00:17:57,240 Speaker 2: My mind, they're already public for now. They have floated 373 00:17:57,240 --> 00:17:58,680 Speaker 2: a trial balloon with Reuters. 374 00:17:58,880 --> 00:18:01,000 Speaker 1: No, Like, what do they need capital for? They need 375 00:18:01,040 --> 00:18:03,760 Speaker 1: to like get chips and data centers and compute like 376 00:18:03,760 --> 00:18:06,119 Speaker 1: they're getting all of that, right, but they're funding it 377 00:18:06,160 --> 00:18:10,440 Speaker 1: with vague promises of future trillions of dollars of capital raising, right, 378 00:18:10,480 --> 00:18:14,560 Speaker 1: Like they have not needed to go public to meet 379 00:18:14,600 --> 00:18:18,479 Speaker 1: their enormous capital spending needs yet. Yeah, right, they're incurring 380 00:18:18,520 --> 00:18:21,480 Speaker 1: obligations that might require going public. But loo, I agree 381 00:18:21,480 --> 00:18:23,200 Speaker 1: with you that, like, if Sam Altman is feeling the 382 00:18:23,240 --> 00:18:26,240 Speaker 1: pressure to go public, that does show some limit on 383 00:18:26,920 --> 00:18:30,480 Speaker 1: the ability of private markets to fund absolutely everything. Yeah, 384 00:18:30,640 --> 00:18:34,119 Speaker 1: that he's got a five hundred billion dollar company that 385 00:18:34,200 --> 00:18:38,400 Speaker 1: keeps signing trillion dollar deals and is not public. So true, 386 00:18:38,480 --> 00:18:40,040 Speaker 1: the limit is we haven't hit it yet. 387 00:18:56,440 --> 00:19:00,359 Speaker 2: If we're looking for another segue, SpaceX obviously is private 388 00:19:00,400 --> 00:19:01,960 Speaker 2: company that has a lot of capital needs. 389 00:19:02,040 --> 00:19:04,400 Speaker 1: Yes, so it turns out that shooting rockets to Mars 390 00:19:04,920 --> 00:19:08,680 Speaker 1: costs much, much, much less than training chatbots. 391 00:19:08,960 --> 00:19:11,399 Speaker 2: What a world. It's what a world, right, Elon Musk, 392 00:19:12,160 --> 00:19:15,639 Speaker 2: he's the whole company, the whole board of Tesla. Well really, 393 00:19:15,880 --> 00:19:18,680 Speaker 2: Robin Denholm has been on a media tour. 394 00:19:18,960 --> 00:19:21,920 Speaker 1: Yeah, Robin Denholm and the board of Tesla are going 395 00:19:21,960 --> 00:19:27,480 Speaker 1: around to big shareholders and also frankly media, Yeah, to 396 00:19:27,680 --> 00:19:30,560 Speaker 1: drum up support for Elon Musk's big pay package because 397 00:19:30,760 --> 00:19:33,560 Speaker 1: the sharelders have to vote on it, and the big 398 00:19:34,080 --> 00:19:37,200 Speaker 1: shaholder advisory firms Iss and Glass Lewis have recommended that 399 00:19:37,240 --> 00:19:40,360 Speaker 1: the sharelders vote against giving Elon Musk a pay package 400 00:19:40,440 --> 00:19:45,120 Speaker 1: that has a nominal value of one trillion dollars. Yeah. 401 00:19:45,160 --> 00:19:47,720 Speaker 1: I really don't like that framing. No, because like basically 402 00:19:47,760 --> 00:19:49,000 Speaker 1: what it is that they want to give Elon Musk 403 00:19:49,000 --> 00:19:51,200 Speaker 1: twelve percent of the company, and twelve percent of the 404 00:19:51,200 --> 00:19:54,600 Speaker 1: company right now is worth one hundred and eighty billion dollars. 405 00:19:54,640 --> 00:19:56,879 Speaker 1: There's a lot of money. Yeah, not a trillion dollars. 406 00:19:57,600 --> 00:20:00,960 Speaker 1: But in order to justify doing this, they're like, we'll 407 00:20:01,000 --> 00:20:02,720 Speaker 1: only give him twelve percent of the company if he 408 00:20:02,800 --> 00:20:06,840 Speaker 1: hits like these really ambitious operational and stock price targets, 409 00:20:07,800 --> 00:20:09,880 Speaker 1: and if he hits all those targets, the company will 410 00:20:09,880 --> 00:20:12,040 Speaker 1: be worth eight point five trillion dollars, and his twelve 411 00:20:12,040 --> 00:20:15,760 Speaker 1: percent package will be worth a trillion dollars. But like 412 00:20:16,200 --> 00:20:17,760 Speaker 1: they're trillion dollars today. 413 00:20:17,880 --> 00:20:21,720 Speaker 2: Yeah, they're not giving him a trillion dollars, right, They're. 414 00:20:21,560 --> 00:20:24,720 Speaker 1: Giving him the chance to get twelve percent of the stock. 415 00:20:25,280 --> 00:20:27,720 Speaker 2: Well, listen, you don't like the trillion dollar framing, but 416 00:20:27,800 --> 00:20:31,880 Speaker 2: everyone listening to this podcast now is thinking about it differently. 417 00:20:31,680 --> 00:20:34,399 Speaker 1: So no, they're not. It's fine anyway. But yeah, I 418 00:20:34,440 --> 00:20:37,240 Speaker 1: wrote today on Thursday, it's interesting to me, like the 419 00:20:37,280 --> 00:20:40,120 Speaker 1: trillion dollars is really embarrassing. No one wants to vote 420 00:20:40,119 --> 00:20:42,000 Speaker 1: to give Elon Musk a trillion dollars. Yeah, I think 421 00:20:42,000 --> 00:20:45,000 Speaker 1: it sounds insane. It's clearly like part of the pushback 422 00:20:45,040 --> 00:20:48,840 Speaker 1: to the proposal is it's a trillion dollars, right. Elon 423 00:20:48,960 --> 00:20:50,960 Speaker 1: Musk has been very clear that what he wants is 424 00:20:51,000 --> 00:20:53,120 Speaker 1: to control twenty four percent of the votes of TESLA. 425 00:20:53,359 --> 00:20:55,280 Speaker 1: He's like, I don't want to be voted out by 426 00:20:55,359 --> 00:20:58,879 Speaker 1: like dom shaolders. I want to have like enough voting 427 00:20:58,960 --> 00:21:00,720 Speaker 1: control that I have a lot out of control, but 428 00:21:00,760 --> 00:21:02,239 Speaker 1: not so much that I can't be voted out if 429 00:21:02,280 --> 00:21:06,119 Speaker 1: I become insane, which is okay. And so it seems 430 00:21:06,160 --> 00:21:08,120 Speaker 1: to me the obvious solution there is to give him 431 00:21:08,119 --> 00:21:10,439 Speaker 1: twenty five percent of the voting power without giving him 432 00:21:10,480 --> 00:21:13,679 Speaker 1: any more stock, which is not easy to do, and 433 00:21:13,720 --> 00:21:16,520 Speaker 1: in fact, in an interview with the Ft, Robin Henholmes said, 434 00:21:16,520 --> 00:21:17,879 Speaker 1: we tried to do that and we couldn't find a 435 00:21:17,880 --> 00:21:19,720 Speaker 1: way to do it. I don't know, man, it seems 436 00:21:19,720 --> 00:21:21,119 Speaker 1: to be like you could do it. You could like 437 00:21:21,520 --> 00:21:23,919 Speaker 1: find a way to give him super voting shares. You 438 00:21:23,920 --> 00:21:26,520 Speaker 1: could get shareholders to approve that, and then you wouldn't 439 00:21:26,520 --> 00:21:28,119 Speaker 1: have to give him a trillion dollars. You could just 440 00:21:28,119 --> 00:21:29,520 Speaker 1: be like, we're giving him twenty five percent of the 441 00:21:29,600 --> 00:21:30,639 Speaker 1: vote because that's what he wants. 442 00:21:30,920 --> 00:21:33,720 Speaker 2: Robin Denholm went on Bloomberg TV. You could have stopped 443 00:21:33,760 --> 00:21:36,639 Speaker 2: her in person and told her about that idea. I 444 00:21:36,680 --> 00:21:40,480 Speaker 2: was writing, you were busy, it's busy, well, and. 445 00:21:40,400 --> 00:21:44,359 Speaker 1: I wrote it, and she can whatever, because surely they've 446 00:21:44,359 --> 00:21:46,119 Speaker 1: had that idea, because she did say to the Ft, like, 447 00:21:46,119 --> 00:21:48,080 Speaker 1: we tried to do it, and it couldn't find a 448 00:21:48,080 --> 00:21:49,480 Speaker 1: way to work. But I don't know why I couldn't 449 00:21:49,480 --> 00:21:50,560 Speaker 1: find a way to make it work. 450 00:21:50,640 --> 00:21:52,800 Speaker 2: Yeah, it didn't tricky. Didn't you say we searched high 451 00:21:52,840 --> 00:21:53,600 Speaker 2: and low or something. 452 00:21:53,680 --> 00:21:55,879 Speaker 1: It seems tricky. Like I'm not saying it's trivial to 453 00:21:55,920 --> 00:21:57,360 Speaker 1: be like, we're going to give this guy a new 454 00:21:57,400 --> 00:22:02,960 Speaker 1: super voting share, but you know, yeah, doesn't seem impossible. 455 00:22:03,200 --> 00:22:04,359 Speaker 1: So no, that's just the guy. 456 00:22:04,640 --> 00:22:07,000 Speaker 2: That was an interview she did with The Financial Times. 457 00:22:07,320 --> 00:22:09,840 Speaker 2: She also went on Bloomberg Television and said that the 458 00:22:09,880 --> 00:22:14,440 Speaker 2: board is looking at internal CEO candidates should Elon Musk leave. 459 00:22:14,400 --> 00:22:17,320 Speaker 1: Right, They're definitely going around being like if this Preybaggers 460 00:22:17,320 --> 00:22:19,479 Speaker 1: doesn't get approved, he is out the door, which is 461 00:22:19,840 --> 00:22:21,840 Speaker 1: you know, maybe. Yeah. 462 00:22:21,880 --> 00:22:24,520 Speaker 2: She said that the company has a deep bench of executives, 463 00:22:24,520 --> 00:22:27,720 Speaker 2: which I always like hearing because we never hear from 464 00:22:27,720 --> 00:22:28,760 Speaker 2: them or about them. 465 00:22:29,280 --> 00:22:32,320 Speaker 1: So I think she's also said there's no Elon mark too. Right, 466 00:22:32,359 --> 00:22:34,080 Speaker 1: it is possible that you can have both a deep 467 00:22:34,119 --> 00:22:39,440 Speaker 1: bench of very excellent car executives and also not have yeah, 468 00:22:39,640 --> 00:22:41,560 Speaker 1: Elon Musk light waiting in the wings. You know. 469 00:22:41,720 --> 00:22:44,480 Speaker 2: Well, apparently one of them is their global production chief. 470 00:22:44,480 --> 00:22:47,159 Speaker 2: In China head tom Ju, which is funny, I guess 471 00:22:47,640 --> 00:22:51,119 Speaker 2: because initially when I read that headline, it was like, oh, well, 472 00:22:51,160 --> 00:22:53,000 Speaker 2: it's going to be really interesting to see if like 473 00:22:53,000 --> 00:22:55,320 Speaker 2: Elon Musk fires all of them, because he has CEO, 474 00:22:55,560 --> 00:23:01,040 Speaker 2: so he could, but I guess there's potential internal candidates. 475 00:23:01,119 --> 00:23:04,680 Speaker 1: Yeah, I don't think he will. I think, like, if 476 00:23:04,720 --> 00:23:08,000 Speaker 1: you take them at their word, that Elon Musk might 477 00:23:08,080 --> 00:23:11,399 Speaker 1: quit if he doesn't get this control. Yeah, it would 478 00:23:11,440 --> 00:23:14,000 Speaker 1: still be a terrible idea for him to sabotage Tesla 479 00:23:14,000 --> 00:23:15,359 Speaker 1: on his way out the door. Like he could be 480 00:23:15,400 --> 00:23:17,560 Speaker 1: mad at the shareholders and he could be like, I'm 481 00:23:17,560 --> 00:23:20,320 Speaker 1: going to spend my time on something where I have 482 00:23:20,359 --> 00:23:23,200 Speaker 1: more control, because what I want to do is build 483 00:23:23,240 --> 00:23:25,280 Speaker 1: a robot army, and I need to have twenty zero 484 00:23:25,359 --> 00:23:27,520 Speaker 1: present voting control of anywhere I build a robot army. Right, 485 00:23:27,600 --> 00:23:31,320 Speaker 1: you believe what they're saying. Right, That's still not a 486 00:23:31,359 --> 00:23:35,159 Speaker 1: reason for him to sabotage Tesla because Tesla remains more 487 00:23:35,280 --> 00:23:36,960 Speaker 1: or less the majority of his wealth, right, and so 488 00:23:37,119 --> 00:23:39,600 Speaker 1: like if he were to leave in a huff, the 489 00:23:39,640 --> 00:23:42,800 Speaker 1: stock would tank, Yes, but if he were to leave 490 00:23:43,240 --> 00:23:45,679 Speaker 1: in a huff, but also saying, I've left this in 491 00:23:45,920 --> 00:23:48,600 Speaker 1: charge of my good friend who's really good at this, 492 00:23:48,800 --> 00:23:54,040 Speaker 1: Tom Hu, then it's better for his wealth than leaving 493 00:23:54,040 --> 00:23:55,440 Speaker 1: in a huff and burning it down on his way 494 00:23:55,440 --> 00:23:55,880 Speaker 1: out the door. 495 00:23:56,000 --> 00:24:01,480 Speaker 2: That's true. He seems logical way to think about things, Matt. 496 00:24:01,760 --> 00:24:05,200 Speaker 1: Yeah, you know he's not illogical. 497 00:24:05,520 --> 00:24:09,119 Speaker 2: No, he does host somewhat emotional. 498 00:24:08,840 --> 00:24:11,480 Speaker 1: Weird stuff, but I think he's going to be rational. 499 00:24:11,560 --> 00:24:14,919 Speaker 2: Well you know, well, maybe find out but probably not. 500 00:24:15,160 --> 00:24:17,680 Speaker 1: Probably not. Probably the shareholders will appear of the package. Yeah, 501 00:24:17,720 --> 00:24:19,600 Speaker 1: I'm guessing. I don't. I don't have no basis in 502 00:24:19,680 --> 00:24:21,119 Speaker 1: saying that. I just they always do. 503 00:24:21,680 --> 00:24:25,280 Speaker 2: Well, it's thirty percent of their investor bases retail shareholders. 504 00:24:25,880 --> 00:24:28,920 Speaker 1: He'll be fine. Yeah, they're like creating drama, but they'll 505 00:24:28,920 --> 00:24:30,360 Speaker 1: be fine. But if they're not fine, I'll be very 506 00:24:30,359 --> 00:24:31,440 Speaker 1: interested to see if he quits. 507 00:24:31,560 --> 00:24:36,000 Speaker 2: Yeah, me too, mail Bag, mail Bag. 508 00:24:36,760 --> 00:24:39,080 Speaker 1: I do want to talk briefly about some emails. 509 00:24:39,320 --> 00:24:42,600 Speaker 2: Yeah, I'm not going to sing mail bag with us mail. 510 00:24:42,359 --> 00:24:44,920 Speaker 1: Bag those voice. But I don't know if you listened 511 00:24:44,960 --> 00:24:47,520 Speaker 1: to last week's podcast episode, But if you did, insisted 512 00:24:47,720 --> 00:24:51,359 Speaker 1: entirely of Katie reciting facts about the new JP market Headquarters. 513 00:24:51,400 --> 00:24:53,600 Speaker 1: But here are some more facts about the new JP 514 00:24:53,680 --> 00:24:54,600 Speaker 1: Market Headquarters. 515 00:24:54,720 --> 00:24:56,840 Speaker 2: I was worried that people wouldn't like that. 516 00:24:57,000 --> 00:24:58,399 Speaker 1: But I was sure people would like. 517 00:24:58,560 --> 00:25:01,000 Speaker 2: People did well. We got a lot of age. This 518 00:25:01,040 --> 00:25:03,399 Speaker 2: is from Eric Okay. I went on a tour of 519 00:25:03,440 --> 00:25:06,200 Speaker 2: the HQ as part of an annual meeting earlier this year, 520 00:25:06,520 --> 00:25:09,399 Speaker 2: and during the tour they highlighted the HVAC system for 521 00:25:09,440 --> 00:25:13,040 Speaker 2: the flag. It is actually capable of mimicking the conditions 522 00:25:13,040 --> 00:25:16,280 Speaker 2: outside the building, so the flag always waves in the 523 00:25:16,320 --> 00:25:18,960 Speaker 2: way it would if it were outside. Man, it must 524 00:25:18,960 --> 00:25:22,760 Speaker 2: be going crazy today because it's raining. There's a story 525 00:25:23,040 --> 00:25:26,600 Speaker 2: it's raining in the lobby. Maybe it's like the Hogwarts 526 00:25:26,640 --> 00:25:27,520 Speaker 2: ceiling really good. 527 00:25:28,400 --> 00:25:30,119 Speaker 1: Yeah, because we were talking about like there's a flag 528 00:25:30,119 --> 00:25:32,760 Speaker 1: in the lobby that blows in the breeze and yeah, 529 00:25:32,880 --> 00:25:35,040 Speaker 1: you mentioned the fanning system and I was like, is 530 00:25:35,080 --> 00:25:37,359 Speaker 1: it a guy with a desk fan on a stick? 531 00:25:37,400 --> 00:25:40,440 Speaker 1: And no, it's a very fancy HPY system that makes 532 00:25:40,440 --> 00:25:41,080 Speaker 1: it rain inside. 533 00:25:41,200 --> 00:25:44,520 Speaker 2: I have to say that the flag was waving like 534 00:25:44,560 --> 00:25:46,760 Speaker 2: there would have to be a strong gust of wind 535 00:25:46,800 --> 00:25:49,040 Speaker 2: the way it was waving last Tuesday, and I don't 536 00:25:49,080 --> 00:25:50,960 Speaker 2: remember it being that one. Dy outside maybe. 537 00:25:50,920 --> 00:25:53,040 Speaker 1: Like mimics but somewhat amplifies. 538 00:25:53,440 --> 00:25:57,360 Speaker 2: Yeah, it enhances, it makes it a little Yeah, definitely. 539 00:25:57,560 --> 00:26:00,399 Speaker 1: This is from Riot regarding Matt's observation that the building 540 00:26:00,400 --> 00:26:02,560 Speaker 1: has a precarious overran. I don't want to say it 541 00:26:02,640 --> 00:26:04,800 Speaker 1: just looks sick. It might fall on you. Yeah, surely 542 00:26:04,800 --> 00:26:07,520 Speaker 1: you were aware of the design and construction flow of 543 00:26:07,520 --> 00:26:09,520 Speaker 1: the City Court building in the late seventies. This is 544 00:26:09,560 --> 00:26:12,119 Speaker 1: taught in basically all engineering programs today. I assume it 545 00:26:12,200 --> 00:26:14,280 Speaker 1: must be well known in finance circles too. I think 546 00:26:14,359 --> 00:26:16,560 Speaker 1: less well known in finance, but not unknown. But yeah, 547 00:26:16,560 --> 00:26:18,040 Speaker 1: there's a city building. 548 00:26:18,840 --> 00:26:19,639 Speaker 2: I did not know this. 549 00:26:19,800 --> 00:26:21,520 Speaker 1: So it's on like near us. It's at like six 550 00:26:21,560 --> 00:26:23,440 Speaker 1: o one Lex. It's like just kind of down the 551 00:26:23,440 --> 00:26:26,439 Speaker 1: street from the Bloomberg offices, and they built it in 552 00:26:26,440 --> 00:26:28,679 Speaker 1: the late seventies and it's very cool. It's like very 553 00:26:28,760 --> 00:26:31,120 Speaker 1: much like you know, there's a plaza underneath it and like, yeah, 554 00:26:31,359 --> 00:26:34,320 Speaker 1: big massy building is on top of like little stick legs. 555 00:26:34,960 --> 00:26:37,680 Speaker 1: And the famous engineer who designed it didn't take into 556 00:26:37,680 --> 00:26:41,680 Speaker 1: account quartering wing winds. Quartering winds they're like the winds 557 00:26:41,720 --> 00:26:44,919 Speaker 1: that don't hit the thing head on. And then like, 558 00:26:45,160 --> 00:26:46,840 Speaker 1: you know, it's a fancy building, and so a couple 559 00:26:46,840 --> 00:26:49,280 Speaker 1: of like engineering and architecture students like studied it for 560 00:26:49,320 --> 00:26:51,600 Speaker 1: class projects and they were like, wait a minute, if 561 00:26:51,640 --> 00:26:53,639 Speaker 1: this gets a wind from the run direction, it'll fall over. 562 00:26:54,480 --> 00:26:56,639 Speaker 1: And they emailed him or they wrote to him, and 563 00:26:56,680 --> 00:26:59,680 Speaker 1: he was like, oh, no, you're right, And so they 564 00:26:59,760 --> 00:27:01,520 Speaker 1: like know while people were working in the building every 565 00:27:01,600 --> 00:27:03,119 Speaker 1: night they'd go home and like people would come in 566 00:27:03,160 --> 00:27:05,119 Speaker 1: and shore up the bolts in the building to make 567 00:27:05,119 --> 00:27:05,960 Speaker 1: sure it didn't fall over. 568 00:27:06,119 --> 00:27:08,640 Speaker 2: Right, that the engineer was humble enough to take the feedback, 569 00:27:08,680 --> 00:27:09,840 Speaker 2: but also maybe he should. 570 00:27:09,520 --> 00:27:12,399 Speaker 1: Skis a little grab. It's like he contemplated the suicide. 571 00:27:12,480 --> 00:27:14,800 Speaker 2: Oh that's not good. But I was gonna say maybe 572 00:27:14,840 --> 00:27:15,760 Speaker 2: he shouldn't work again. 573 00:27:16,240 --> 00:27:17,680 Speaker 1: I think he was fine, but yeah, it was a 574 00:27:17,720 --> 00:27:19,680 Speaker 1: little not a great day for him. 575 00:27:19,760 --> 00:27:21,880 Speaker 2: I can't wait to read the Soukapedia article. I will 576 00:27:21,880 --> 00:27:24,040 Speaker 2: say I would love to see the JP Morgan lobby 577 00:27:24,040 --> 00:27:26,720 Speaker 2: flag in a quarter England. Yeah, sounds pretty cool. 578 00:27:27,359 --> 00:27:29,280 Speaker 1: They should do that, just as like a little engineering 579 00:27:29,280 --> 00:27:29,760 Speaker 1: and side jack. 580 00:27:29,960 --> 00:27:33,320 Speaker 2: Yeah Nick Nick says, I just went to a meeting 581 00:27:33,400 --> 00:27:35,920 Speaker 2: there and wanted to share a couple of things. Apparently 582 00:27:35,920 --> 00:27:38,879 Speaker 2: the pub doesn't start pouring beer until four pm. The 583 00:27:39,000 --> 00:27:42,480 Speaker 2: rumor going around was that Jamie Diamond himself was refused 584 00:27:42,480 --> 00:27:45,040 Speaker 2: to drink at three pm. We haven't fact tracked any 585 00:27:45,080 --> 00:27:46,560 Speaker 2: of this, By the way, I kind of don't. 586 00:27:46,320 --> 00:27:50,119 Speaker 1: Believe that Jamie Diamond was like wandering down to the 587 00:27:50,119 --> 00:27:51,760 Speaker 1: in office pub at three pm and to be like, 588 00:27:51,800 --> 00:27:53,320 Speaker 1: I'll have a beer, Like that doesn't sound like. 589 00:27:53,320 --> 00:27:56,320 Speaker 2: DAMMI maybe they like Also, I don't like you. 590 00:27:56,320 --> 00:27:57,960 Speaker 1: Could imagine him being like I'm going to do a 591 00:27:57,960 --> 00:28:00,600 Speaker 1: little like stunt of like order a beer to like 592 00:28:00,640 --> 00:28:03,399 Speaker 1: demonstrate the pub to people, and like he wasn't served. 593 00:28:03,680 --> 00:28:06,159 Speaker 2: Yeah, but I feel like they would make like refuse 594 00:28:06,240 --> 00:28:08,480 Speaker 2: him once but then be like, actually, here's the pier. 595 00:28:09,000 --> 00:28:11,480 Speaker 2: But I don't know. I only have a parasocial relationship 596 00:28:11,480 --> 00:28:13,119 Speaker 2: with Jamie Diamond, so I'm not actually sure. 597 00:28:13,680 --> 00:28:16,560 Speaker 1: Right, we do need to interview the bartender who a 598 00:28:16,640 --> 00:28:20,160 Speaker 1: drink at the Jamie Diamond controlled pub, and. 599 00:28:21,400 --> 00:28:24,040 Speaker 2: I want to go there and we can look at 600 00:28:24,040 --> 00:28:24,880 Speaker 2: the flag. 601 00:28:25,280 --> 00:28:26,320 Speaker 1: If you're that bartender. 602 00:28:27,040 --> 00:28:30,040 Speaker 2: Yeah, no, I want to do a podcast from the. 603 00:28:30,000 --> 00:28:33,280 Speaker 1: Pub Whipping Wind. The pub is the pub is not. 604 00:28:33,280 --> 00:28:35,879 Speaker 2: In that's on the thirteenth floor. The flag is in 605 00:28:35,920 --> 00:28:36,359 Speaker 2: the lobby. 606 00:28:36,480 --> 00:28:38,160 Speaker 1: We're going to do the podcast from the pub. 607 00:28:38,320 --> 00:28:38,840 Speaker 2: It'll happen. 608 00:28:44,360 --> 00:28:45,960 Speaker 1: And that was the Money Stuff Podcast. 609 00:28:46,240 --> 00:28:48,360 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 610 00:28:48,560 --> 00:28:50,720 Speaker 1: You can find my work by subscribing to the Money 611 00:28:50,720 --> 00:28:52,760 Speaker 1: Stuff newsletter on Bloomberg. 612 00:28:52,320 --> 00:28:54,920 Speaker 2: Dot com, and you can find me on Bloomberg TV 613 00:28:55,080 --> 00:28:58,520 Speaker 2: every day on the Clothes between three and five pm Eastern. 614 00:28:59,240 --> 00:29:01,680 Speaker 1: We'd love to hear. You can send an email to 615 00:29:01,800 --> 00:29:05,120 Speaker 1: Moneypod at Bloomberg dot net, ask us a question and 616 00:29:05,240 --> 00:29:06,520 Speaker 1: we might answer it on the air. 617 00:29:06,880 --> 00:29:09,480 Speaker 2: You can also subscribe to our show wherever you're listening 618 00:29:09,520 --> 00:29:11,400 Speaker 2: right now and leave us a review. It helps more 619 00:29:11,400 --> 00:29:12,280 Speaker 2: people find the show. 620 00:29:12,680 --> 00:29:15,560 Speaker 1: The Money Stuff Podcast is produced by Ana ma Aserakis 621 00:29:15,640 --> 00:29:16,600 Speaker 1: and Roses Ondan. 622 00:29:17,080 --> 00:29:19,320 Speaker 2: Our theme music was composed by Blake Maples. 623 00:29:19,800 --> 00:29:22,160 Speaker 1: Amy Keen is our executive. 624 00:29:21,640 --> 00:29:24,960 Speaker 2: Producer, and Sage Bauman is Bloomberg's head of Podcasts. 625 00:29:25,320 --> 00:29:27,800 Speaker 1: Thanks for listening to The Money Stuff Podcast. We'll be 626 00:29:27,840 --> 00:29:29,520 Speaker 1: back next week with more stuff.