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uh, about what you said. The US economy is confidently overcoming rising interest rates, an inverted yield curve, tariffs, a government shutdown, and war. It continues to show high growth rates, and you will see this in the coming years thanks to a factor that can be compared to the Industrial Revolution, namely— AI.
Certainly. Well, we're actually building on the experience of the Industrial Revolution. If you look back 400 years to the Industrial Revolution, Bret Winton, our chief futurist, did this work. Well, real global GDP growth was about 0.6%, and then, with the Industrial Revolution, which was actually the last technological revolution, we got to 3% global GDP growth.
Well, so it was a fivefold increase. Well, we think that over the next 3-5 years we will see regular growth, perhaps averaging over 7%. Well, and that's only two and a half times more, despite the fact that much more technology is being developed today than back then. Back then, it was electricity, the telephone, and the industrial internal combustion engine.
Now we have, uh, AI, which is important, robotics, energy storage, blockchain technology, and multi-omic sequencing in the life sciences. Well, so, uh, a lot more technology is moving a lot faster. So I actually think 7 % will eventually seem like a conservative figure. There are many other, uh, interesting notes, and here we are closing the session, and you know, concerns about inflation, you know, are on everyone's lips.
Do you think it is on the verge of a long-term decline? Why? Yes. I believe that productivity growth, which is important, is one of the reasons. We also believe that oil prices will decline quite significantly as transportation shifts to electric grids. And power grids don't use oil . 57% of oil consumption is related to transport.
Therefore, we believe that as transportation moves to networks, demand for oil will decrease. And there we say, there's a graph that shows that every time we're in a crisis, the price of oil drops to $30. We believe that this will not be a crisis, except perhaps for oil companies and energy-dependent countries , but we think that it could happen again, but this time it will become stable.
During the Industrial Revolution, you had an inverted yield curve that didn't cause a recession, and you expect something like that again. Can you explain why short-term rates are rising while long-term rates are expected to remain stable? Why is this happening in the economy that you predict is doing this?
Yes, again, drawing on the lessons of the Industrial Revolution, short-term rates in the 50-year period ending in 1929 before the Depression. Short-term rates averaged nominal Treasury bond rates. And for me, that's a mistake. So I think ultimately the stakes will continue to rise, even if we reach an agreement with Iran, which is highly unlikely, at least one that will be implemented.
And that's also part of why markets are rising today. You know, it will take a long time to get oil back to its previous levels in terms of its real value, not the commodity trading that we see, given its impact on the economy. So right now we're just seeing spending increase, we're seeing the Fed clearly sticking to a policy tightening schedule.
You can't tighten policy just once, and by the way, 25 basis points doesn't do anything if you're trying to fight inflation. So I think the market shouldn't ignore rates because I believe that right now the 10-year bond is competitive, except for the greed factor. So you continue to see, and what will not be taken off the chain is the cost of artificial intelligence.
We hear this over and over again. Now we'll hear it again when Micron reports in about a week, and so I think the market is supposedly okay , but you know, I bought some stocks that were heavily undervalued, but I'm not putting new money into this market, not with where the rates are going. Historically, the correlation is quite strong, especially above 5%, you know, 10- year bonds, which are rising.
Yes, you're talking about 5% for 10-year bonds. I actually talked to a lot of investors , wrote an article for CNBC Pro. Kevin, I want, I want to discuss this with you. If you look at one-month bonds yielding almost 4%, if you want to wait out some of these issues with AI uncertainty and rising oil prices, you can just borrow money from the government for a month and get almost 4%.
This seems to be a definite negative factor for stock markets. Well, I think that should be a certain negative factor for the stock markets. I don't want to seem too pessimistic. When I was here last week, I said that I think the bar is getting a little higher. The threshold for risk gets a little higher, and every time yields go up, you mentioned the one-month, I meant to say the 10-year, but every time yields go higher, I think that bar goes a little higher.
Interestingly, the two things I have on my ticker next to the S&P 500 are the 10- year bond yield and the price of oil. And I think in both cases we see an inverse trade: if they go up, risk goes down, if they go down—we see risk go up. If they grow at the same time, it's a double whammy, because you have to worry about margins and many other aspects.
But I want to think about what might go according to plan. The plan may lead to a settlement of the situation in the Middle East. If energy prices fall, it will significantly reduce the pressure. But if not Before we move on to today's topic, if you want deeper stock market analysis and exclusive opinions, become a member of the channel.
Members get access to premium stock analysis and additional market content. Now let's move on to Nvidia. When you compare Nvidia to the world's largest technology companies, one thing immediately stands out. The company's valuation doesn't seem to match its growth rate. Nvidia trades at a multiple of around 14–15 to earnings.
Whereas Apple has a ratio of about 35 to earnings . Now look at the difference in height. Nvidia is planning for approximately 17% annual growth. And this is not the kind of company that is trying to find customers. . And this created a very unusual situation. You have huge growth, strong demand, and a company at the heart of the AI ecosystem.
But investors should ask another question. How quickly does Nvidia hardware actually age? For a long time, investors assumed that each new generation of GPUs made the previous one irrelevant. A new architecture emerges and companies are modernizing . Old equipment depreciates, and the cycle begins again.
But real-world usage shows something different. Let's take the Nvidia A100. This architecture dates back to approximately 2020. Yet some of these systems are still contracted for operation until 2029. . Why? Because not every AI task requires the latest GPUs. You may need the latest Nvidia architecture to train advanced basic models, but for other tasks you don't necessarily need the latest hardware.
Older GPUs can still handle inference, batch computing, AI physics research, and enterprise tasks. become obsolete. It can simply move to another part of the AI ecosystem. This extends its productive life. And for cloud operators, this is extremely important. A GPU that continues to generate revenue years after deployment has much better economics than an asset that becomes useless after a short time.
Now, as we move into the next generation with Vera Rubin, the first systems are already starting to arrive at customers. Some of the deployments use the NVL72 configuration. But this is something we sometimes tend to overlook . A GPU is not a data center for AI. This is just one component. You also need racks, networking, power, cooling, data center space, and software to manage the entire system.
All these elements have to work together. Otherwise, you will not get usable computing power. And that's why ir job is to turn expensive hardware into computing power that customers can actually use. And now the demand is extraordinary. Some providers actually say that every GPU they can get can be immediately distributed among multiple customers.
That's how tight this market is, friends. Of course, this won't last forever. The market will eventually respond to the shortage, and chip production will increasvailable.
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