WEBVTT - Cathie Wood on What Comes Next in AI and Big Tech 0:00:00.360 --> 0:00:02.400 Hey, Odd Loots listeners, We're coming to DC. 0:00:02.840 --> 0:00:04.840 We're finally doing it, Joe. It's going to be our 0:00:04.840 --> 0:00:09.200 first live show in Washington, DC, our nation's capital. It's 0:00:09.240 --> 0:00:12.520 also finally going to be the time where we actually 0:00:12.520 --> 0:00:13.640 talk about the Jones Act. 0:00:13.840 --> 0:00:16.760 We've been talking about doing the Jones Act episode of 0:00:16.880 --> 0:00:19.400 Odd Lots for a long time and it's become this 0:00:19.480 --> 0:00:21.760 recurring joke that we've never done on But we're going 0:00:21.840 --> 0:00:24.520 to do it in grand style because we're going to 0:00:24.520 --> 0:00:27.080 be doing it live in DC and it's actually going 0:00:27.160 --> 0:00:27.840 to be a debate. 0:00:28.240 --> 0:00:28.560 Yeah. 0:00:28.640 --> 0:00:33.120 So we have Sarah Fuentes from the Transportation Institute. She's 0:00:33.159 --> 0:00:35.080 going to be taking the pro side, and we also 0:00:35.159 --> 0:00:38.600 have Colin Graybou of the Cato Institute. He'll be taking 0:00:38.880 --> 0:00:42.000 the against side. It's going to be really interesting to 0:00:42.040 --> 0:00:43.880 see how all of that shakes out. 0:00:43.960 --> 0:00:46.519 In addition to that, we're going to be speaking with 0:00:46.720 --> 0:00:50.080 Blair Levin, who was around during the telecom bubble, and 0:00:50.400 --> 0:00:53.440 we have Andrew Ferguson, the new head of the FTC, 0:00:53.560 --> 0:00:55.320 the one who's replaced Lena Kong. We're going to be 0:00:55.320 --> 0:00:57.920 talking about mergers and acquisitions and all that stuff. So 0:00:58.240 --> 0:00:59.320 it should be a really fun name. 0:00:59.520 --> 0:01:02.120 If you want to come and join us for that evening, 0:01:02.240 --> 0:01:05.119 it's going to be on March twelfth at the Miracle Theater. 0:01:05.440 --> 0:01:08.399 Go to Bloomberg dot com forward slash odd Lots and 0:01:08.440 --> 0:01:10.839 you can find the link to purchase tickets. We hope 0:01:10.840 --> 0:01:11.440 to see you there. 0:01:14.120 --> 0:01:28.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:01:29.720 --> 0:01:33.040 Hello and welcome to another episode of the Odd Lots Podcast. 0:01:33.120 --> 0:01:34.600 I'm Tracy Allaway. 0:01:34.319 --> 0:01:36.440 And I'm Jill Wisenthal Joe. 0:01:36.520 --> 0:01:39.400 I love it when we do live events. It's very fun. 0:01:39.680 --> 0:01:43.319 Sometimes there's audience participation, which is great. We get to, 0:01:43.480 --> 0:01:46.840 you know, sit on stage and look important. And this 0:01:46.920 --> 0:01:49.320 week we were on a very important stage. We were 0:01:49.360 --> 0:01:53.920 at the Bloomberg invest Conference. This is our flagship conference 0:01:54.400 --> 0:01:56.600 of the year, and we got to speak to someone 0:01:56.600 --> 0:01:59.360 who I've wanted to interview for quite a long time. 0:01:59.640 --> 0:02:02.920 I like doing live events, for sure, but you know, 0:02:02.960 --> 0:02:05.240 I also love the comfort of my headphone. It's not 0:02:05.320 --> 0:02:06.800 having to worry about how I look. 0:02:07.160 --> 0:02:09.120 I do get nervous about guests showing up. 0:02:09.680 --> 0:02:12.360 I get nervous, but that's always and they've always showed up. 0:02:12.400 --> 0:02:14.840 We've never done a live event where the guests didn't 0:02:14.880 --> 0:02:15.160 show up. 0:02:15.160 --> 0:02:17.240 Oh you're going to jinx it now, I know, but 0:02:17.720 --> 0:02:18.200 that's right. 0:02:18.320 --> 0:02:20.600 But on Tuesday, March forward, we were down at the 0:02:20.600 --> 0:02:23.840 Bloomberg invest conference and we got to interview Kathy Would. 0:02:24.240 --> 0:02:28.000 That's right. So Kathy Would famously the founder and CEO 0:02:28.480 --> 0:02:32.280 of ARC Invest, famously an investor in some pretty big 0:02:32.440 --> 0:02:35.079 tech names like Tesla. So we got to ask her, 0:02:35.120 --> 0:02:37.560 you know, questions about Elon Musk and things like that, 0:02:37.919 --> 0:02:40.760 and basically just hear what she thinks is coming down 0:02:40.760 --> 0:02:43.960 the pipeline in the upcoming years in terms of technology. 0:02:44.400 --> 0:02:46.000 She's very optimistic, Joe. 0:02:46.080 --> 0:02:49.960 She's very optimistic. She expects to see a golden age 0:02:50.320 --> 0:02:53.680 of tech investing, a golden age for American business, bigger 0:02:53.720 --> 0:02:58.000 than the Reagan era, as she called it. So take 0:02:58.000 --> 0:02:59.760 a listen to our interview with Kathy. 0:03:00.280 --> 0:03:03.160 So, the big story in markets right now is a 0:03:03.240 --> 0:03:05.960 widespread sell off in the past couple of days, But 0:03:06.040 --> 0:03:10.600 even before then, we saw something specifically focused on AI, 0:03:11.400 --> 0:03:14.240 and the worries seemed to come out of nowhere. Suddenly 0:03:14.280 --> 0:03:17.760 everyone was talking about deep Seek, this Chinese AI model, 0:03:18.080 --> 0:03:21.320 and we saw a really intense sell off. Were you 0:03:21.440 --> 0:03:25.440 aware of deep Seek before that day? And how big 0:03:25.480 --> 0:03:29.119 a problem. Do you think something like that is for USAI. 0:03:30.080 --> 0:03:33.640 Actually we were aware of deep seek are one. I 0:03:33.639 --> 0:03:38.559 think the paper came out in December, so our analysts 0:03:38.560 --> 0:03:40.480 had poured over it and thought it was a very 0:03:40.480 --> 0:03:44.520 interesting model. I think the surprise and the question was around, 0:03:44.680 --> 0:03:48.640 wait a minute, did this take only six million dollars 0:03:49.200 --> 0:03:54.400 to build this large language model? And did they really 0:03:54.520 --> 0:03:57.280 do it on a high end workstation? Are we going 0:03:57.360 --> 0:04:01.960 to need all this data center capacity after? And I 0:04:01.960 --> 0:04:05.880 think with time we've learned that they did a lot 0:04:05.920 --> 0:04:12.120 of pre training before. Apparently they have fifty thousand, fifty 0:04:12.200 --> 0:04:18.560 thousand cluster of GPUs which helped with the pre training. Nonetheless, 0:04:19.080 --> 0:04:23.680 as some of our finest technology experts, Sam Altman and 0:04:23.960 --> 0:04:28.839 Jensen Wang included, they commented they were terribly impressed by 0:04:29.200 --> 0:04:32.920 the algorithm itself. And I think what we were impressed 0:04:32.920 --> 0:04:37.320 by is it's open source. Anyone can use it. So 0:04:37.600 --> 0:04:41.880 here we go. Meta Platforms was really the open source 0:04:41.960 --> 0:04:45.880 platform large language model. Now we have deep Seek, and 0:04:45.960 --> 0:04:49.200 I think yesterday another one came out Kung Fu. 0:04:49.760 --> 0:04:52.480 Oh I totally, I totally missed that one. I love 0:04:52.520 --> 0:04:53.200 trying the new ones. 0:04:53.279 --> 0:04:53.720 I'll try it. 0:04:53.760 --> 0:04:57.320 I'll try it tomorrow. Right now, we're recording this March fourth, 0:04:57.600 --> 0:05:00.680 when the market sold off, was this concern like, oh, well, 0:05:00.720 --> 0:05:04.039 the greater efficiency mean at the margins, less demand for 0:05:04.200 --> 0:05:07.200 chips or less impulse to build out data centers. 0:05:07.640 --> 0:05:08.200 And there's no. 0:05:08.440 --> 0:05:10.880 Hard evidence so that you know, there's you know, the 0:05:10.920 --> 0:05:14.960 big tech company's enormous CAPEX budgets every single year and 0:05:14.960 --> 0:05:18.760 they're throwing out these unbelievable numbers their hints here and there. 0:05:19.160 --> 0:05:23.279 Have you observed anything tangible, say, over the last several 0:05:23.320 --> 0:05:27.040 weeks that to you suggests that there is some change 0:05:27.120 --> 0:05:32.160 at the margin deep seek aside in how much businesses, hyperscalers, 0:05:32.160 --> 0:05:35.080 et cetera are throwing at AI right now, I. 0:05:35.040 --> 0:05:36.640 Have not seen any change. 0:05:36.360 --> 0:05:39.120 In there's no evidence of the power. 0:05:38.920 --> 0:05:44.960 Of these models is profound. And if anything, we just 0:05:45.120 --> 0:05:50.320 had a conversation with one of the largest m we're under, 0:05:50.360 --> 0:05:54.719 an NDA said, I can't talk about which one providers. 0:05:55.440 --> 0:06:03.520 And it's clear that nation's educational systems and enterprises are 0:06:03.680 --> 0:06:07.359 all saying we have got to do this. This is 0:06:07.480 --> 0:06:12.279 transformational in so many ways. Many are talking and thinking 0:06:12.279 --> 0:06:18.320 about productivity and efficiency, but others are thinking about deep research, 0:06:18.520 --> 0:06:23.760 especially with the new reasoning models and deep researches one 0:06:23.800 --> 0:06:27.919 of them and are just blown away by the results 0:06:28.040 --> 0:06:31.160 that we're getting. So I'm not seeing any slowdown at all. 0:06:32.080 --> 0:06:35.520 So you mentioned the fact that deep seek is open source, 0:06:35.800 --> 0:06:39.360 and that was a big differentiator between it and some 0:06:39.400 --> 0:06:42.680 other models. I know you're a big fan of open source. 0:06:42.880 --> 0:06:46.400 How do you incorporate that aspect into I guess an 0:06:46.440 --> 0:06:50.960 investment analysis? And also, did open AI make a mistake 0:06:51.400 --> 0:06:53.080 by not going open source? 0:06:53.600 --> 0:06:57.480 Well, we've been tracking closed models and open source for 0:06:57.680 --> 0:07:01.479 quite ever since the chat GPT moment, and what you'll 0:07:01.520 --> 0:07:05.320 see is the goal closed models have been ahead of 0:07:05.360 --> 0:07:08.400 the open source models, but if you look at the 0:07:08.440 --> 0:07:12.880 slope of the line of the performance improvement, open source 0:07:12.960 --> 0:07:17.840 is actually a steeper slope. So the reason I love 0:07:18.000 --> 0:07:23.040 open source is it is helping along the competition, helping 0:07:23.080 --> 0:07:27.960 the movement along, helping it go faster. And I think 0:07:28.000 --> 0:07:31.880 that open source nipping at the heel of closed is 0:07:31.880 --> 0:07:32.600 a very good thing. 0:07:33.240 --> 0:07:37.440 So, you know, chaed GPT came on to everybody's radar. 0:07:37.560 --> 0:07:40.640 I guess it's late twenty twenty two, and I think objectively, 0:07:40.720 --> 0:07:44.920 anyone who spends any time with these tools in a sense, 0:07:45.160 --> 0:07:49.360 just absolutely jaw dropping, right. Are you surprised, however, that 0:07:49.400 --> 0:07:52.280 we're like this far into it and the tools are 0:07:52.320 --> 0:07:55.000 so in some sense extraordinary, But we can talk about 0:07:55.000 --> 0:07:57.760 some of the flaws and limitations, and yet we really 0:07:57.880 --> 0:08:01.760 haven't seen much of a macro impact from their use. 0:08:01.800 --> 0:08:04.240 We haven't seen some sector of the economy or the 0:08:04.320 --> 0:08:07.760 labor force get laid off. We haven't seen some major 0:08:07.880 --> 0:08:12.760 surge in measured productivity gains, although that's infamously hard to measure. 0:08:13.000 --> 0:08:16.080 Are you surprised any sense by the existence of the 0:08:16.120 --> 0:08:20.200 technology and what seems like sort of a modest macro impact. 0:08:21.360 --> 0:08:26.240 So I do think productivity has been boosted to some extent, 0:08:26.280 --> 0:08:29.320 And you're right, it's very difficult to measure this. My 0:08:29.400 --> 0:08:33.480 background's economics, and in the eighties, productivity was a big 0:08:33.600 --> 0:08:36.760 question mark, and we saw how flawed the measurements are 0:08:36.880 --> 0:08:40.520 and probably still are. So I can only tell you 0:08:40.600 --> 0:08:45.000 the rate of uptake is so much is that enterprises 0:08:45.160 --> 0:08:49.800 are seeing a difference. Maybe if they're not laying people off, 0:08:49.920 --> 0:08:55.280 they're not hiring them, And that's because these AI tools 0:08:55.400 --> 0:09:00.440 are making their own, especially engineers, so much more productive. Right, 0:09:00.679 --> 0:09:02.920 So you just don't have to hire that next person. 0:09:02.960 --> 0:09:08.000 If you've seen the number of coding employees in the 0:09:08.120 --> 0:09:11.439 United States has dropped like a cliff, I mean off 0:09:11.480 --> 0:09:14.000 a cliff. It hasn't dropped like a cliff. It's dropped 0:09:14.040 --> 0:09:17.120 off a cliff. And I don't know if you've seen 0:09:17.160 --> 0:09:21.240 that chart. So that very much has happened as engineers 0:09:21.360 --> 0:09:24.080 just become more and more productive. You know, one of 0:09:24.080 --> 0:09:29.000 the things that we're wondering is, Okay, what part of 0:09:29.000 --> 0:09:33.800 the software stack will this traditional software stack will this impact? 0:09:34.360 --> 0:09:38.439 And we think the AI revolution what we see already 0:09:38.559 --> 0:09:42.440 losing share to some extent. It is still growing, but 0:09:42.679 --> 0:09:46.320 losing share is software as a service. And you know, 0:09:46.360 --> 0:09:48.840 I think we're all paying very close attention to the 0:09:48.880 --> 0:09:53.080 revenue growth dynamics of these companies. A Salesforce, dot com 0:09:53.240 --> 0:09:56.760 revenue growth isn't picking up. In fact, it continues to decelerate. 0:09:56.800 --> 0:10:01.120 I think it's next quarter will be I think seven percent, 0:10:01.200 --> 0:10:04.679 down from nine percent. That's not what's supposed to happen here, 0:10:05.040 --> 0:10:07.640 and so I think that might be what you're referring 0:10:07.640 --> 0:10:10.480 to Wit a minute. Where are the top line dynamics, 0:10:10.480 --> 0:10:13.920 where are they coming from? Well, I think we have 0:10:14.000 --> 0:10:18.200 a lot of entrepreneurs in a lot of garages or 0:10:18.320 --> 0:10:22.400 in R and D centers who are creating the next 0:10:22.440 --> 0:10:27.880 big thing. And you know, we look at two profound 0:10:27.960 --> 0:10:32.839 ramifications of AI that we understand, we've been reaching researching 0:10:32.840 --> 0:10:37.560 them for so long. The largest AI project on Earth 0:10:38.240 --> 0:10:43.680 is robotaxis autonomous driving networks. We think that's going to 0:10:43.800 --> 0:10:49.600 drive eight to ten trillion dollars in revenue globally in 0:10:49.640 --> 0:10:52.559 the next five to ten years, up from zero now. 0:10:53.120 --> 0:10:58.560 So that's called embodied embodied AI. The most profound application 0:10:58.920 --> 0:11:02.679 of AI, we believe is going to be in healthcare, 0:11:03.320 --> 0:11:09.760 and the convergence of sequencing technologies, artificial intelligence and new 0:11:10.000 --> 0:11:16.400 technologies like Crisper gene editing are already curing diseases sickle 0:11:16.440 --> 0:11:22.160 cell disease and beta thllocemia cured. Chrisper Therapeutics has that cure. 0:11:22.559 --> 0:11:27.200 It is generating revenue. Now. People find this one very 0:11:27.240 --> 0:11:30.839 hard to believe because it hasn't happened before. But the 0:11:31.080 --> 0:11:35.199 R and D explosion in healthcare is like nothing I've 0:11:35.240 --> 0:11:37.960 ever seen, and we think we're going to return to 0:11:38.200 --> 0:11:41.280 the golden age for healthcare. I started in the eighties 0:11:41.320 --> 0:11:45.320 when genentech had taken off and created the Golden age 0:11:45.320 --> 0:11:48.680 for healthcare. Back then, returns to R and D back 0:11:48.720 --> 0:11:53.360 then we're in the thirty percent range. Today for the 0:11:53.480 --> 0:11:57.880 broad based pharma biotech field, the returns are down in 0:11:57.920 --> 0:12:01.360 the four percent range. We think with all of these 0:12:01.480 --> 0:12:08.040 new tailed, new tools and the incredible productivity being added 0:12:08.520 --> 0:12:12.120 to research and discovery in the healthcare space, we're going 0:12:12.120 --> 0:12:16.040 back to the golden age where returns on R and 0:12:16.120 --> 0:12:33.200 D could be thirty forty percent plus. 0:12:35.440 --> 0:12:39.040 Since you mentioned robotaxis, we got to talk about Tesla. 0:12:39.120 --> 0:12:44.280 Of course, obviously a big component of your portfolio. Elon 0:12:44.400 --> 0:12:49.000 Musk seems very busy nowadays. To put it mildly, as 0:12:49.080 --> 0:12:51.920 an investor, do you worry at all that he has 0:12:52.000 --> 0:12:56.360 perhaps distracted from, ostensibly the day to day running of 0:12:56.400 --> 0:12:56.920 the company. 0:12:57.559 --> 0:13:00.880 We've been getting this question practically since the beginning, So 0:13:01.440 --> 0:13:04.280 Tesla and then he starts all these other companies, right, 0:13:04.360 --> 0:13:07.920 and people were saying, does that not concern you? So 0:13:08.080 --> 0:13:11.160 I'll answer that first, then we'll bring in the government overlay. 0:13:11.760 --> 0:13:17.000 The reason it doesn't concern us is Elon Musk is 0:13:17.040 --> 0:13:22.360 probably the inventor of our age. But who understands that 0:13:22.720 --> 0:13:27.480 we're in the midst of the most profound convergence among 0:13:27.640 --> 0:13:36.360 technologies really catalyzed by AI. And he understands that the 0:13:36.480 --> 0:13:38.439 name of the game in terms of who's going to 0:13:38.480 --> 0:13:42.040 win all this through all of this are those companies 0:13:42.679 --> 0:13:47.120 that number one, have deep domain expertise. They take AI 0:13:47.640 --> 0:13:51.760 seriously and they're investing in it. And perhaps most important, 0:13:51.800 --> 0:13:55.240 they have data that no one else has, proprietary data. 0:13:55.760 --> 0:13:58.560 Think of all the data spewing out from all of 0:13:58.600 --> 0:14:04.200 these companies, even Neuralink, that's biological data. And the most 0:14:04.280 --> 0:14:09.000 prolific data explosion out there is in the healthcare space. 0:14:09.320 --> 0:14:13.200 We have thirty seven trillion cells in our body and 0:14:13.240 --> 0:14:15.960 they turn over every quarter. And now we have something 0:14:15.960 --> 0:14:19.840 called single cell sequencing that we can combine with AI 0:14:20.480 --> 0:14:24.080 to unlock the secrets of life, health and death. And 0:14:24.120 --> 0:14:27.400 that's what we're going to do. He understands that Neuralink's 0:14:27.640 --> 0:14:33.160 a part of this. Okay overlay in the government sector. 0:14:33.760 --> 0:14:36.560 I agree, he's doing something certainly for his country. 0:14:36.600 --> 0:14:40.160 I know he believes that he's tweeting a lot, that's 0:14:40.200 --> 0:14:42.640 for sure. He's tweeting a lot. 0:14:43.320 --> 0:14:46.240 He always has tweeted a lot, right, He always is 0:14:46.280 --> 0:14:52.120 tweeted a lot. Anyways, So he's I think what we 0:14:52.360 --> 0:14:55.120 have found with his companies and we own in our 0:14:55.200 --> 0:15:00.080 venture fund, the private ones as well of course as Tesla, 0:15:00.160 --> 0:15:06.840 and as we go through the quarterly reports and dialogue 0:15:06.840 --> 0:15:11.480 with management, critical to us is that he is keeping 0:15:11.520 --> 0:15:17.479 his eye on the technology balls that are his competitive 0:15:17.560 --> 0:15:21.400 or barrier to entry. And what Elon is expert at 0:15:21.480 --> 0:15:24.920 doing is if there's a bottleneck, he'll go in there 0:15:25.040 --> 0:15:29.120 and blow it up, and he will use first principles thinking. 0:15:29.680 --> 0:15:35.240 And he's surrounded himself by business people and engineers who 0:15:35.560 --> 0:15:40.720 want to work on the hardest projects in the world, 0:15:40.880 --> 0:15:44.080 the hardest projects that are going to help transform the 0:15:44.120 --> 0:15:47.800 way we live and work and so forth. Doje is 0:15:47.840 --> 0:15:51.760 another big project. It's not his full time job, even 0:15:51.800 --> 0:15:55.760 though one would not know that. But we have talked 0:15:56.000 --> 0:15:59.560 to our counterparts and you know, we aren't talking to 0:16:00.200 --> 0:16:04.560 Elan as much these days, but to other very important 0:16:04.560 --> 0:16:08.040 decision makers and they're really not skipping a beat. Now. 0:16:08.320 --> 0:16:14.360 The politics of what's going on have hit sales and 0:16:14.760 --> 0:16:18.640 so yes, that is true, that is why, and we 0:16:18.880 --> 0:16:22.520 knew that was going to happen. So there are a 0:16:22.560 --> 0:16:26.920 couple of calls this year, actually probably three. We knew 0:16:27.120 --> 0:16:30.040 model why it was going to be completely refreshed, largest 0:16:30.080 --> 0:16:32.720 selling car in the world that is beginning to happen 0:16:32.840 --> 0:16:36.120 throughout the world. And if the Model threees refresh as 0:16:36.320 --> 0:16:40.760 any indication this, this should work out very well. Perhaps 0:16:40.880 --> 0:16:45.160 more important is the lower cost car that they are 0:16:45.200 --> 0:16:47.800 going to put out in the first half of this year, 0:16:48.560 --> 0:16:54.080 so thirty thousand dollars or less and think less, especially 0:16:54.120 --> 0:16:57.840 with different credits. This is going to open up Tesla 0:16:57.920 --> 0:17:01.680 to a whole new market, as Elon says, and people 0:17:01.680 --> 0:17:05.800 don't believe him in this political dynamic, but its problem 0:17:05.880 --> 0:17:09.159 isn't demand. There are people who have been waiting for 0:17:09.160 --> 0:17:12.560 a car that just can't afford it, and they're very 0:17:12.560 --> 0:17:15.200 excited to have their first Tesla. So that's the second thing. 0:17:15.760 --> 0:17:19.000 The third thing, and we've watched this very closely. As 0:17:19.040 --> 0:17:23.360 you all know autonomous, We do believe well. They're launching 0:17:23.400 --> 0:17:28.760 in Austin in June. Another important milestone. Now analysts have 0:17:28.920 --> 0:17:33.720 to integrate into their models what autonomous will mean for Tesla, 0:17:34.320 --> 0:17:37.720 and so anyone who's been viewing Tesla as an EV 0:17:37.840 --> 0:17:41.159 manufacturer is going to have to go back to the 0:17:41.240 --> 0:17:46.640 drawing board and realize that the gross margins of its 0:17:46.760 --> 0:17:52.360 autonomous network. It's autonomous platform will be in the seventy 0:17:52.520 --> 0:17:57.400 to ninety percent range, whereas their EV gross margins are 0:17:57.400 --> 0:18:00.720 in the mid teens. Right now, that's a double tape. 0:18:00.760 --> 0:18:04.240 This is turning into US software as a service model 0:18:05.000 --> 0:18:11.120 and that finally, I think will bring technology investors and 0:18:11.240 --> 0:18:17.840 analysts into this stock. They understand SaaS and how different 0:18:18.359 --> 0:18:23.600 the model is compared to an EV model. And the 0:18:23.760 --> 0:18:29.160 other thing about the AI opportunity and autonomous is its 0:18:29.200 --> 0:18:33.960 winner take most. And we do believe that Tesla will 0:18:34.280 --> 0:18:36.280 be in the is in the pole position here in 0:18:36.280 --> 0:18:40.200 the United States. Anyone who's tried a Weiymo car as 0:18:40.240 --> 0:18:46.120 I have in fans, big, big fans. If you look 0:18:46.160 --> 0:18:49.880 at Big Ideas twenty twenty five, which is our annual report, 0:18:50.440 --> 0:18:54.399 you will see why. And kudos to Weimo. I agree 0:18:54.440 --> 0:18:58.840 it's a delightful ride. But in terms of the economics, 0:18:58.840 --> 0:19:05.280 for Weimo, car is uneconomic, totally economic. It's going to 0:19:05.320 --> 0:19:08.359 be very difficult for them to scale without deciding to 0:19:08.400 --> 0:19:12.200 lose a lot of money. And you'll feel you'll find 0:19:12.200 --> 0:19:14.520 that delineated in Big Ideas twenty twenty five. 0:19:14.800 --> 0:19:17.040 Since you mentioned the stock and the idea of like 0:19:17.080 --> 0:19:20.840 tech investors coming back, Let's talk about tech stocks because 0:19:20.880 --> 0:19:23.760 obviously they've gotten really hit hard over the last week. 0:19:23.880 --> 0:19:26.639 But overall, you know, there was that furious post election 0:19:27.000 --> 0:19:31.000 rally sometimes you know, the various peaks in things. December, 0:19:31.280 --> 0:19:34.239 there's been this decline. What's going on? Is there a 0:19:34.280 --> 0:19:37.680 macro story behind the tech sell off when you look 0:19:37.720 --> 0:19:40.359 at how the markets behaved, what's your answer? 0:19:40.560 --> 0:19:45.800 Well, I think, I mean fear and greed is you know, 0:19:45.880 --> 0:19:49.879 a constant trade off. And I think after the election, 0:19:50.119 --> 0:19:53.760 the day after the election, the market started broadening out 0:19:53.920 --> 0:19:58.040 enormously away from just the mag six towards our kind 0:19:58.040 --> 0:20:05.359 of stock. And the reasons for that include deregulation. Deregulation 0:20:06.359 --> 0:20:11.919 or regulation has been a menace for innovation generally. But 0:20:12.160 --> 0:20:15.320 even the FTC not only allowed not allowing M and 0:20:15.400 --> 0:20:19.760 A and not allowing strategic price discovery to say, hey, 0:20:19.880 --> 0:20:22.560 this new innovation is going to be worth a lot 0:20:22.640 --> 0:20:23.679 and we need it. 0:20:23.640 --> 0:20:26.800 Now, the FTC is keeping the same merger guidelines. Pardon 0:20:27.080 --> 0:20:30.560 the FTC is maintaining the merger guiden guidelines. So we 0:20:30.600 --> 0:20:32.480 haven't seen this big anyway. 0:20:33.200 --> 0:20:36.040 I think, I think I think we will see it. 0:20:36.119 --> 0:20:44.040 I think deregulation is critical to this administrative administration's mandate. 0:20:44.240 --> 0:20:47.080 It feels it's one of and it's one of the 0:20:47.119 --> 0:20:52.119 most important variables, because if you think about what was 0:20:52.160 --> 0:20:56.280 going on before no M and A, even if companies 0:20:56.280 --> 0:20:59.280 didn't compete directly with one another, they disallowed so much 0:20:59.520 --> 0:21:03.520 M and A that you know, the big companies kind 0:21:03.520 --> 0:21:06.240 of could sit back fat DOWMN and happy, and their 0:21:06.240 --> 0:21:08.680 shareholders didn't want them to buy anything because that would 0:21:08.720 --> 0:21:13.520 take away from their own whether it's share repurchases or 0:21:13.920 --> 0:21:18.160 profit or profit sharing and so forth. So I think, 0:21:18.680 --> 0:21:23.960 I think that this administration is going to provide a 0:21:24.080 --> 0:21:28.920 really beautiful runway from a regulatory point of view for innovation. 0:21:29.600 --> 0:21:33.920 And I feel that what is also behind this, as 0:21:33.920 --> 0:21:37.280 you might imagine China with deep seek as we were 0:21:37.280 --> 0:21:41.159 talking about, okay, they're on our tail right, Well, the 0:21:41.160 --> 0:21:46.680 Trump administration is extremely competitive and has China in focus. 0:21:46.840 --> 0:21:49.600 Shall we say, So this is this is a very 0:21:49.640 --> 0:21:53.720 this is a good news thing. So let's let's do this. 0:21:54.119 --> 0:21:57.560 The other reason I think the market took off, or 0:21:57.560 --> 0:22:01.200 there are many reasons, but I think tax rates coming 0:22:01.240 --> 0:22:06.080 down broadly, which I think they will as an offset 0:22:06.119 --> 0:22:08.720 to some of the tariffs. And I understand tariffs. I 0:22:08.720 --> 0:22:12.120 don't like tariffs. Tariffs are taxes. But if you listen 0:22:12.160 --> 0:22:15.840 to Kevin Haszard, it seems there's a quid pro quode 0:22:15.840 --> 0:22:19.439 developing here where Wait a minute, in the early days, 0:22:20.040 --> 0:22:23.560 in the early days of our country, all of government 0:22:23.640 --> 0:22:27.760 was funded by tariffs, all of it, and now very 0:22:27.840 --> 0:22:30.439 little of it. I think they might be into a 0:22:30.480 --> 0:22:33.920 little bit of a rebalancing game. And what the clue 0:22:33.920 --> 0:22:37.199 there is in terms of tax rate reductions? What are 0:22:37.200 --> 0:22:42.800 the first ones they've announced, tips, social Security? And over 0:22:42.840 --> 0:22:47.359 time those are very appealing to the lower to middle 0:22:47.560 --> 0:22:53.680 income demographic. Right, I think lowering all tax rates are 0:22:53.680 --> 0:22:57.320 going to is going to be much more acceptable with 0:22:57.560 --> 0:23:00.680 that kind of dynamic at work as well. He's looking 0:23:00.760 --> 0:23:03.520 out for the little guy like he said he would, right, 0:23:04.080 --> 0:23:06.479 And so I think, as a student of Art Laugher, 0:23:06.960 --> 0:23:14.920 lowering tax rates deregulation is we think going to is 0:23:15.000 --> 0:23:17.720 going to recreate something like the Reagan Revolution. But I 0:23:17.720 --> 0:23:19.720 think it's going to be bigger. It's going to be 0:23:19.760 --> 0:23:26.520 bigger because there are five innovation platforms now fourteen different technologies. 0:23:26.520 --> 0:23:29.160 Whereas back then it was the PC, it's the PC 0:23:29.720 --> 0:23:34.679 now we have five robotics, energy storage, AI, blockchain technology, 0:23:34.800 --> 0:23:38.880 multiomix sequencing five at the same time. They involve fifteen 0:23:38.960 --> 0:23:46.200 different technologies, and they're converging autonomous taxi networks, convergence of robotics, 0:23:46.640 --> 0:23:51.239 energy storage, and AI. Those are each Each one of 0:23:51.280 --> 0:23:53.919 those has its own s curve, and now they're going 0:23:53.960 --> 0:23:57.639 to be feeding one another. I mean, I think the 0:23:57.760 --> 0:24:01.840 Reagan Revolution I was there and it was so enjoyable. 0:24:01.960 --> 0:24:06.360 It was the heyday, golden age of active equity management. 0:24:06.400 --> 0:24:08.720 And I think that's coming back. I think it's coming 0:24:08.760 --> 0:24:13.719 back big time. I think this will dwarf that, and 0:24:13.760 --> 0:24:14.520 that was pretty good. 0:24:31.040 --> 0:24:33.520 I want to ask a sort of general question about 0:24:33.560 --> 0:24:37.280 your investing strategy, and I know you emphasize that you're 0:24:37.280 --> 0:24:43.320 making long term bets on transformational technology like AI, which 0:24:43.320 --> 0:24:45.600 we've been discussing, or robotaxis. 0:24:46.080 --> 0:24:46.600 I guess my. 0:24:46.640 --> 0:24:51.520 Question is, at some point the promise of that world 0:24:51.760 --> 0:24:56.159 has to come to fruition and actually be monetized. Do 0:24:56.240 --> 0:25:00.800 you ever set yourself deadlines for positive turns or is 0:25:00.840 --> 0:25:03.520 there a time frame you have in your mind for 0:25:03.640 --> 0:25:04.800 when this will pay off? 0:25:05.280 --> 0:25:09.880 So we are our investment time horizon is five years, 0:25:10.600 --> 0:25:14.440 what's very important about the way we do our research. 0:25:15.040 --> 0:25:19.520 The most important variable in terms of determining how quickly 0:25:19.600 --> 0:25:26.680 these technologies are going to scale is units now and 0:25:27.280 --> 0:25:29.560 something called rights law. I don't know if you want 0:25:29.600 --> 0:25:32.120 me to go into it. It's a relative of More's law. 0:25:32.160 --> 0:25:35.400 It's a way to understand how quickly the cost associating 0:25:35.440 --> 0:25:40.560 with the associated with each technology or falling. So we 0:25:40.640 --> 0:25:44.400 have had a good sense of all of these technologies 0:25:45.040 --> 0:25:49.960 cost decline dynamics. What was one of the biggest things 0:25:50.000 --> 0:25:54.639 that happened over the last five years. Unit growth plunged 0:25:54.960 --> 0:25:59.000 during COVID, and then we faced all of these massive 0:25:59.119 --> 0:26:04.760 supply construcs that hurt the rate of change for some 0:26:04.840 --> 0:26:07.639 of our technologies. We're on the other side of that. 0:26:08.320 --> 0:26:11.280 We are on the other side of that. In fact, 0:26:11.760 --> 0:26:16.600 we're on the other side of three major headwinds over 0:26:16.640 --> 0:26:20.879 the last four years that really hurt our strategy. First 0:26:20.960 --> 0:26:24.480 was the boombust associated with COVID and all of the 0:26:24.520 --> 0:26:30.560 accesses around that. Second, interest rates, very importantly a response 0:26:31.200 --> 0:26:35.359 twenty fourfold increase in little more than a year's time. 0:26:35.480 --> 0:26:38.879 That was a major shock to the system. Now, do 0:26:39.119 --> 0:26:42.520 higher interest rates always hurt our strategy? Not at all. 0:26:42.760 --> 0:26:45.879 In fact, twenty seventeen and eighteen we had some of 0:26:45.920 --> 0:26:48.000