저자: CathieWood · 외국인
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ARK CEO 캐시 우드가 AI·로보틱스·로보택시·블록체인 등 5대 혁신기술이 2030년까지 연 40% 복합성장하며 글로벌 GDP 성장률을 연 7%로 끌어올릴 것이라 주장. AI 소프트웨어 시장 약 8~9조 달러 가능성, 테슬라 로보택시 상용화 임박 및 2인승 저가차 전망, FSD v12 기대. 규제(AI 행정명령, 원자력 사례)가 기술 발전을 억제할 위험과 암호자산 규제 피해를 경고.
다듬은 글
If the Fed has sufficiently bent the curve on inflation then why take the big risk of breaking something major things could have gone catastrophically wrong for Humanity these Technologies are going to compound over the course of the decade at a 40% rate wouldn't take a big team to make it much much better so then you have to ask what are they waiting for honestly we're at the beginning stages of multiple escorts that are compounding on top of each other a lot of good faith people lost money permission that is granted by the SEC blessing this product is going to create all kinds of credible arguments that like investment Banks can make other Regulators around the world will look at this and say oh okay this is permissible now it does seem like companies are almost scrambling to figure out how to apply this they had counterparty risk that they couldn't really assess because the government was like preventing kind of like legitimate counterparties to from coming to the table is Elon making a big mistake getting so political on X should he just shut up ivilege of being here with Brett Whitten it's been 11 months since we last chatted thank you for inviting us back oh my pleasure thanks for coming did they discover AGI it's a funny question because no uh and the definition of AGI I think is going to always be shifted to keep it from being discovered for some foreseeable future I think that um you know because of the board resolution not because of the board resolution no so not specific to open Ai and that's maybe a separate conversation instead I think that people humans have like this idea that like AGI is a thing that we're going to achieve right and um but any technology that gets sufficiently Advanced kind of becomes seemingly mundane to us and so then we set a new goal post for something that needs to be achieved uh and I think we're going to be in a state of um kind of like AI systems like exceeding benchmarks that we never thought were possible to be exceeded and then we as humans continuously defining different benchmarks that uh they haven't yet achieved and saying well that's something that is actual AGI or artificial general intelligence where do you see the biggest benefits is it uh in in medicine or mostly I mean I know we've all got GPT now which is crazy because when we last met that was just starting right uh but I feel like at least my personal usage has sort of bell curved where it was like up and now it's kind of tapering off a little bit what's your experience been and what do you see for the future for AI I think my own experience is like it's a great kind of search then information retrieval Tool uh and and then also a kind of like certain written output basically like def frictioning uh for me so it's like um I use it for um for instance a GPT add-on to basically just be able to type extremely quickly and then it um kind of maintains my sentence structure but then like compresses it like not just fixing misspellings but also adding appropriate transitions between sentences and so so it it like really tracks kind of like the idea flow that I'm doing and just like uh leaves allows me to remain in flow in first draft mode rather than kind of like word picking mode kind of I like that what is that called uh that's flow speed typist so it's a GPT a GPT with an open framework um I think that generally right now Enterprises are experimenting with hey how can we get a return on investing in this technology and and they're trying all kinds of things it's obvious that some of kind of like is going to work and some is not um and then over the medium time frame I think the right way to think about this is that um this is really knowledge worker productivity enhancement that's going to occur um so um you know you could think of it as augmented intelligence but it's really like how much can I do as a knowledge worker and how much quicker will I be able to do that so like ways in which we've used it internally is it's like we have a database of 30,000 different rare diseases and um to previously like say um what like how severe is this disease and what is the human health cost of this disease uh and what's the addressable market for this disease we might have to be like okay we're going to have an intern like go through all of these things and try to figure out the health impact and how severe it is now you can kind of um throw kind of the descriptions of those diseases at uh at GPT uh combined with some actually hand-coded data that you've done uh to then actually produce an estimated kind of severity and um basically life impact that those diseases have from that you can um estimate you know what is the human health impact of all rare diseases and then what's the market value in solving it and so it's like an example of like something where it was possible to do if I wanted to go to the trouble of like trying to find like you know kind of interns to do it but then their first cut at it might be wrong and it would take a while and then you have to like you just get into a faster iteration cycle of how do I take data and convert it into information uh and so like at a aggregate level we think that um AI software will improve knowledge worker productivity by roughly 10x a little less by by 2030 and that like 50% of the knowledge working population will be using these tools actively to well they still have jobs well of course because it's like you know I think that there is a set of circumstances in where these systems just Spin and be able to operate themselves but for a very long time it's really going to be like augmented intelligence type products where it's um you know there's a lot of um intuition and human pattern recognition that even is guiding like what is the right spot to to guide this software where we might generate something of interest and so um you know and you can imagine like how would that manifest it's kind of like um from the consumer side it might be like I get a much better understanding of of how good a product is for my spe specific use case before I commit to buying it so essentially it's kind of like the the interfaces between people trying to sell services and people receiving services are going to get much less full of friction often like my wife will get something from Etsy and she'll receive and be like oh I didn't know it was this size as opposed to this size right you know so that's like a simple example of like where there's really like a a lack of information in the marketplace and that'll get cleaned up a lot and then kind of all the entertainment products will get that much more compelling because of it so we'll just get sucked into digital experiences more completely but net if you go back to that expectation of productivity enhancement to knowledge workers um usually businesses pay uh roughly 10% of the um value they get out of a software for the software itself W so if you do the calculation there's roughly $30 trillion in knowledge worker wages by 2030 outside of China if I improve their productivity by half of their productivity by almost 10x you get to a number that you know is like 130 trillion in um kind of like value that's generated to the economy and basically better knowledge work and then businesses will pay 10% of that so $ 13 trillion in AI software Revenue by 2030 do some more math and you can conclude well that suggests there's you know 8090 trillion do worth of AI software market cap wow by 2030 there's I mean that's half of the entire US GDP more than half relative to today sure just in artificial intelligence uh potential productivity generated Revenue yes yeah exactly but think think about it on a global basis if I'm paying knowledge workers $30 trillion and um you know in a world without AI you know their output would be X yeah so I'm getting essentially almost 5x that output um surely like i' it' be worth it to me to you know increase their wages by 50% but instead of throwing it at knowledge workers I'm paying for kind of AI systems to basically enhance and you know allow them to generate better forecasts allow us to think about how much Capital time and energy is wasted on technologies that simply aren't going to work right right and so if if you have like a better way to tune and understand take drug development like early in a drug development process that hey kind of like this biological system is not going to like respond in the way I think it's going to if I plug in this molecule then you can forgo all of the expense in time of human trials that would lead you to that conclusion hundreds of millions of dollars and savings GDP then uh you get to a product quicker so GDP can grow faster essentially with output so yeah that might represent a large number seemingly today but your suggestion is output could explode through this right so at a at a very high level and actually this is like an important macroeconomic point if you look over the course of history um it's not um it's not a historical for us to cross a threshold when suddenly GDP growth changes in a structural way up as in um you know in like the the post kind of like the turn of the 20th century um we entered a new Global GDP growth regime because of the introduction of electrification and the telephone and the internal combustion engine and all the innovations that have happened like prior to that kind of like GDP growth was maybe half as much and so like when you change the rate of growth um you actually end up with much much bigger numbers on the back end so if if you look at the long run of History we actually think over the course of this decade compounded annual real GDP growth will average um 7% from here forward wow so it's it's actually a step change up and and to be clear that's us or global global okay okay so like consensus if you look at like consensus forecasting agencies the idea is that um by 2030 the GDP Global will be around $130 trillion this is 2021 and we think it'll be7 trillion so you go from uh expectations of $155,000 GDP per capita to $20,000 GDP per capita and so that's on the basis of like hey if there's a like given the rate at which these structural changes of GDP growth have happened historically you could roughly conclude that and then it's supported by the fact that if we look at the underlying technologies that we focus on you can justify that forecast just based on our expectations for Robotics and Robo taxis even leave out the AI sof software knowledge work side that's so interesting just because so many have uh argued oh artificial intelligence is just a fat it's just it's going to be here today gone tomorrow sort of thing uh and your argument is what we've just done with AI is almost changed the rate of growth of our global economy uh almost to a similar fashion as what electricity did for our Global economies do I understand that right yeah I think that and and actually like the way we think about the world is that there there are these major like um signpost Technologies like major technological innovations so the steam engine electrification uh and uh and the internal combustion engine and that like at the the most kind of we've had enter the E economic Marketplace at the same time is at the turn of the 20th century when there were three and right now we think there are five between energy storage public blockchain AI Robotics and what we think of as multiomic sequencing all kind of hitting these credit stages of inflection at the same time and so then it's it's like consistent with history that that would Trigger or catalyze just a change in growth I mean if you have a you know leave aside the knowledge work side which is a little intangible and I think a lot of that is going to acud to people's benefit without getting recognized into GDP statistics if we have a humanoid robot that you can buy that can basically make things to the same like quality or even lower quality but just working 24 hours a day as uh human manufacturing worker um then like the amount of created stuff can explode you know uh and like you all drove down here down the PCH like what a waste of your wonderful brain to have to be piloting a vehicle for that long you know in traffic like you'd rather be admiring the view or kind of like I don't know doing one of your crazy real estate deals something like that well like the a robo taxi will free you up to do that while costing basically the same per mile that you're already paying to drive yourself and so kind of like that in GDP statistics that'll appear in the amount you're paying for that service uh plus kind of like the other stuff that you're doing when you would otherwise be driving so you're taking kind of non-paid wages which is you driving right now and turning it into a market service and plus freeing up your time to do some other either watch Netflix so you're paying somebody else or doing work that generates kind of like income for your consuming or generating that's really interesting now you uh have been tweeting about two seat uh Robo taxis and looking at how little usage there is in taxis uh above basically two people in a taxi uh and you're really into cars I mean are people going to be into two seat Robo taxi does it matter how many seats there are I mean I think from a the the general idea and this is uh something that Sam corus our batteries analyst and I have been discussing a lot is that probably Optimum strategy for Tesla uh for uh Robo taxi is a twodo vehicle might be four seats but it's really like a two- seat vehicle um because like if if you're if you can deliver Robo taxi service to your vehicles you want to minimize your manufacturing cost and maximize your unit volume so you can basically maximize ride liquidity like maximize the number of places markets that can service and maximize your data intake rate so it's not you know it's not true that like a four-door vehicle costs twice as much as a two-door vehicle but it definitely costs more than a two-door vehicle all right so um it seems likely to me that the platform they develop for robo taxi is a two-door car the the issue is if um somebody doesn't believe that Robo taxi is possible and they find out Tesla's nextg $25,000 car is a two-door car a traditional analysts will conclude well there's no market for two-door cars like there's no Mass Mark you know it's not like the Honda Civic it's TW doors that's a four-door vehicle and they'll conclude that uh you can't like this will actually kill the sales demand for the vehicle if you don't believe in Robo taxi now one I think that every Market that Tesla's entered into has been a market that didn't actually really previously exist as in when they launched the model X even like SUVs at that price point were not a thing right and and actually they move people up Market into it there are kind of uh in in in expanded the category meaningfully like there is like a neighborhood electric vehicle category that's lying nent there's like smart cars that you know are fun except if you're driving around with a bunch of SUVs you might get like pancaked by somebody on the road um and I suspect that kind of like even ex Robo taxi Tesla launching a $25,000 vehicle if it has two doors will actually sell like quite well um but you know our expectation is robotaxi Will commercialize basically this year or next year and then that that commercialization event will you know transform the economics of Tesla and then it will you know um mean that that kind of mass Market type vehicle is probably not even being sold into individuals in a material way it's being acquired by operators who are trying to operate it as part of a robot taxi Network and then with a two two even a two- seat vehicle you can make you can meet more than 90% of the demand for kind of Robo taxi and ride haill um what's your concern with uh potentially Herz complaining and now selling some of their used Tesla Fleet on the belief that or the realization that maintenance for these cars and the taxi Fleet or Uber Network or whatever rental network uh has been too expensive relative to ice Vehicles because they've had challenges finding Parts not as readily available there are not as many service techs available to repair Cosmetics inside uh these these Ubers or whatever to where uh Herz is now returning back to ice vehicle for their Fleet I don't know if it's accurate to say they're returning back to ice vehicles for their Fleet I do think like if you the the price volatility in electric vehicles generally relative to internal combustion has been effectively higher in part because also there's not the kind of like um call it buffer of selling into uh dealers that then hold the inventory on lot and sell it at a discount without nationally discounting price uh and so Herz in a position where they were acquiring a bunch of Robo taxis in 20 or a bunch of Teslas in 20121 uh and then being forced to like recognize well the value of these is dropped just because like The Upfront price has dropped then feeds into their kind of financials in a way that they weren't expecting so I I don't you know I I think that there's a um there's some kind of like hey you know they their financial statements have to recognize the fact that these vehicles have depreciated much more quickly than they thought they were going to because if you look at kind of like the historical depreciation rate of EVS it's actually they depreciate less quickly than internal combustion and so um it's kind of like a the mapping to their financial reporting is definitely not what they expected and so then they have to have kind of like an explanation for that for Wall Street a PR move is what you're saying well it's not PR I mean it's kind of like listen you know if if you bought or I bought like an electric vehicle in 2021 uh relative to what I could get it at today I overpaid oh yeah but the fact is like I it doesn't change like my cost per mile of driving that car it's kind of like when you buy a car you're pre-commit to basically a number of a bundle of miles at a specific cost per mile and you know when you make the purchase decision that's what you're committing to you're not you know or I am not doing it saying oh and then three years from now I'm going to sell the vehicle for X right you know and I'm and it's actually like on a cash basis I'm not at all sensitive to that um so whereas someone who's if you were strictly reporting that through like a financial statement that you're having to present to I don't know Wall Street or kind of like to your family you know you'd be like ah I made a bad move you know um but practically like I think that the um even Tesla sold at kind of the peak purchase price those vehicles are continuing to improve year-over-year because they're delivering software updates to those vehicles that make them more useful and that's very different from kind of traditional vehicles and you D have a Tesla right yeah uh is that your black X yes nice yes um so FSD how have you seen it evolve over the last year oh it's amazing like or for me it's a massive stress reducer and kind of like keeps me more alert even driving around La uh so also safety enhancer I have kids kids are in the back kids need a snack if you're driving like trying to like you know yeah give a snack back to the kids is like definitely net unsafe if you don't have some kind of like driving augmentation and it performs amazingly well in that and it's improved it's gotten smoother it now crosses kind of like what I think of as the the wife test where she's in the passenger seat we have it on she's not like being like you have to turn that off this is making me motion sick um and there's still a lot of work to do like I think that the um you know I use I basically use it at all times while driving and then there are intersections I come to where I'm like I don't bother to try to leave it on through the intersection even though it could probably make it through the intersection on its own it's more like I'm making a left turn and a two-lane left and it's just like I I trust myself more than the system you know uh and I do think that so sometime this month likely to in customers they're going to release version 12 which is um uh full stack nurl Nets from top to bottom uh by doing that they're eliminating 300,000 lines of of code out of the system and so it's like well what are they replacing that with they're replacing it with 3,000 lines of code and lots of data compressed by lots of compute uh and so one way to think about the Improvement rate of the full self-driving system is prev viously like they would run into unique problems and then they would have to come up with a unique solution to each unique problem it's like how do I deal with a roundabout you know and so you need a software engineer to think about okay what's the car going to go through as it goes through a roundabout what are the if then statements about like when it can turn how does it determine when to turn uh and and uh and so every single Corner case required a clever software engineer to figure something out and kind of each incremental kind of reduction in the number of interventions you need unveils probably an order of magnitude more Corner cases so you're always running up against this wall of like either I'm hiring 10x more people for each kind of like step up I make in kind of like the log error rate or um I need another solution so once you go full stack neuronet my intuition is that then every unique problem has the same solution you throw more data and compute at all of the problems uh and so it means that not only should there rate Improvement now just be governed by how much compute they can throw at the problem because they're not data constrained it also means that their ability to forecast the Improvement rate should improve so uh Elon Musk has famously said basically we're a year away from commercialization for maybe four or five years right whereas kind of in our forecast we've been we've slipped slightly but it was 2023 for a while and now it's 2024 like as in we really thought this was around the time frame where it would happen now I think they'll have much better line of sight on this is the Improvement rate this is how much additional Improvement rate we get to throwing more computational power at it this is how much cash we have to throw at computation uh and so they can um kind of with much more Precision say this is the thresh the place in which we'll cross a threshold in the specific geography say California where we can commercialize the product and so um there will be they'll be ble to both business plan and message the street a lot more um precisely on like when Robo taxi is going to commercialize and what that will look like uh and then so from the analyst perspective not us but ones that um essentially rely on management to tell them what's going to happen and then map that to how they think financials are going to occur um there will be like um an ability to begin to underwrite that into the stock uh and and and that'll you know it it totally transforms the business model if and when that occurs there's no um you know there's not a comparable transition probably in any corporate entity's history um to what that could do to cash flow generation for Tesla do you expect early Robo taxi to have any level of Geo fencing well yeah in that I mean not at the block by Block Level I would but yes at the kind of like Geographic entity by Geographic entity level as in like you know maybe it's just City of La or maybe it's state of California or maybe you know they're going to have to get regulatory approval at least at the state level and maybe at the city level in order to launch and so it's like Austin Texas probably lets it happen uh and then there will be areas where you know it's as performant but you're not yet allowed to commercialize it and then there will be areas where it's just not as performant because they don't have as much training data uh and I think it's an open question um like not just for Tesla but for all of the players like what is the yeah rate expansion like to what degree should they be concentrating on you know specific streets like wh Mo's um strategy has been we're going to keep the thing off the highway you know and so we're g to and it means that for longer trips it's not you know you're having to sacrifice like double the trip length um in order to ride in a robo taxi that's priced kind of the same as a traditional Uber and so then it doesn't actually make sense as a product that scales um and so I think that Tesla's approach is more aggressive but ultimately more scalable where it's like at least in the geographies we've trained on this thing should be able to drive in any conditions and we're not going to Blacklist any intersections or type of um driving in part because I think a problem with a a more precisely Geo fenced system is then um an intersection that you have whitelisted suddenly becomes an intersection it can't clear through like it it like you know the intersections under construction or like the structure of the intersection changes and so suddenly it acts more like an uncontrolled intersection rather than one with a traffic light and so then you end up with like a really bulky and kind of like subject to lots of kind of hand tuning and changing uh system and and it's likely both bad consumer experience and then you have a huge kind of operational expense of just like figuring out like what the map looks like for you at any given time or any given day well that was the whole I think uh crw problem was they had 1.5 workers per car driving on the road essentially for that operational control I think this is interesting because what what you've just described is essentially uh you can underwrite uh once once Tesla starts providing that guidance you you're you'll see the market more likely underwrite the value of Robo taxi from what's probably underwritten now of zero to whatever it might be uh more maybe so than full self-driving is that your argument that people that there'll be more value really out of the robo taxi than trying to convince people to t you know pick up full self driving the take rate seems like pluming yeah I think that's a or it's not a sideshow like it's material to their gross margins but I don't think it actually um yes as in like I have full self-driving it's an incredible luxury product for me as in it's expensive and it delivers me a lot of value in terms of my Driving Experience is much better and I can understand somebody buying a Tesla and being like $122,000 for what even though the comparable like even if you're buying a BMW or whatever like comparable like just you know Lane following on Highway and active cruise control is like sometimes like A6 $7,000 option so actually Tesla's living delivering you know I would argue substantially more value per dollar and it's something that people I can understand how people aren't opting into it because it's like I don't have $122,000 extra to spend and for what do you know what I mean well a lot of people also have that trust Factor too I notic that especially in uh older Generations frankly uh 40 plus there a lot of people I just won't trust it have the Tesla but I just don't trust it right right and so it really has to for people to kind of like buy that option they also have to have experienced it in some way they have to know it's worthwhile but all of that kind of disappears once you deliver Robo tax or or or that Nuance doesn't matter anymore think about it this way this is very crude math so consider it heavy approximations but roughly right okay so um I sell you a model 3 you should be a model 3 buyer uh I sell it to you for $50,000 what is Tesla net an operating revenue for that sale maybe $5,000 call it a 10% operating margin it's not exactly precise but roughly okay so it's a one-time $5,000 operating uh profit for Tesla what if that model 3 becomes a robo taxi okay so we think the model 3 could roughly do 100,000 miles per year as a robo taxi that might be an overestimate but it's it's like that there's ways in which you can model it where you think that's kind of the utilization it could get to okay and uh at a dollar per mile we think there's uh a trillion miles addressable globally there so let's say we're that the first trillion miles of Robo taxi driving is occurring so you can charge a dollar per mile for 100,000 miles okay so then uh there's gross revenue somebody is paying you know $100,000 a year to ride in that vehicle now Tesla gets to extract a platform fee off of that just like uber oryt do they should be able to do something more than Uber or lift because they're delivering this whole autonomous Driving Experience say it's 50% okay so then that's $50,000 in Revenue to Tesla if they're getting like software type margins on that that's $25,000 in operating profit to Tesla okay so I've gone from one time $5,000 in operating profit to annual for every vehicle that's capable and turned on $25,000 in operating profit per year into perpetuity okay so from Tesla my gosh like I've I've quintupled my operating profit per vehicle and turned it into an annual thing as opposed to the one time I sell it based on this very expensive Factor I've built to produce these things so the financials explode cash flow okay now think about it from your perspective though and this is actually a really interesting and nuanced point is like you paid $50,000 for the car now it's generating $50,000 in net revenue to you if Tesla's only charging a 50% platform margin and your cost to run that vehicle is you know you can estimate it in various ways but it's on the order of 15 cents a mile or 20 cents a mile maybe okay so that's $30,000 in profit to you who bought the the Tesla per year so clearly you underpaid for that asset at $50,000 buying an asset for $50,000 that generates $30,000 in income it's worth much more than that so then like what practically will happen is Tesla will actually collect more than 50% platform fee at that time cuz you shouldn't be getting like all of that right or the cost per mile collapses as everybody's showing right right so so then there's the demand side like if there's a gazillion M if there's more than a trillion miles then being driven then it collapses down to ultimately we think around 50 cents is the equilibrium price going out um but like between here and there um kind of like you can think of like buying Robo taxi now is you're buying the experience of having or buying FSD now buying the experience of having the car help you drive for a while plus buying a modern day taxi Medallion where it kind of like gives you kind of the opportunity to kind of extract value out of this vehicle or sell this vehicle who's going to maximize it as a robo taxi in the future um and so like the I think the they'll have a lot of kind of like levers they can pull in terms of like how much did they charge for FSD versus what is their take rate in terms of platform fee um you know but ultimately it's I think from a financials perspective it's all going to flow through into an effective take rate against miles for them yeah that makes a lot of sense the uh so another thing that was fascinating that you mentioned is this idea that you can create a robot that can work even less like quality uh or or create a less quality output than a human but work 24 hours a day so really there's this idea of even if it's just let's say unboxing boxes out of a freight truck or whatever uh neither of these these these robots that could work 24 hours a day or robot taxis neither are really underwritten into Tesla's valuation today so where do you see Tesla going in the next decade even if they just started producing and selling the first robots to let's say Pepsi or whatever like when does that that sort of trigger hit is it at the first sales and what does it do I I think it's hard are one interesting thing that's happened to me as somebody that focuses on technology is I feel like my line of sight is actually getting compressed forward as in I think it's hard even going out a decade from 2024 I think it's much harder than it was going out a decade from 2020 uh because of the rate pace of change of artificial intelligence I will say that like relative to at the technology level um kind of our expectations for Robotics are the ones that have shifted most this year compared to last year um because um I or call it we had concern that there was like mechanical and actuator constraints that were going to prevent kind of robots from being super useful and so even if you had great software that you could attach to them if if like kind of like the ability to actually mechanically actuate these systems was the constraint then that's like a hard Hardware problem which usually takes longer and the evidence that we've seen there's an open source robot for it's like 20 or $30,000 that can you know flip an egg and do all kinds of stuff in a teleoperated way uh that uh there's just a paper published on the demonstration certainly from Tesla's Optimus bot is much more um kind of mechanically faasil than I would have expected given they've been working on the project for relatively short when they film that though they're wearing the sort of uh goggles and like it's the robots really just mimicking the person rather than the robot well yeah that could be or I I don't know for sure but but that's also fine as in if if my concern was the governing constraint was like the being able to move fingers in a fluid way and being able to pick up an egg and you know um if if it's teleoperated then that indicates well that's not actually the constraint then the constraint is the software side and so then on the software side it's like very clear that kind of AI is going to just any Benchmark you can set for it saturate that Benchmark very quickly uh and so kind of like a way to think about it is is we think AI costs are declining 3x per year so what in traditional compute takes two years to occur uh where every two years you get a hot cost having in AI happens every six months uh and so one like Universal rule of technology is people overestimate how much is possible in the short term and underestimate how much is possible in the long term well if you consider long-term in traditional Computing like eight years in AI That's two as in so things that we think like the thing the the time frame over which people underestimate performance I think is is getting compressed because of how quickly AI systems are advancing so your concern was that is the hardware even going to be able to catch up to how quickly the software is moving so you're very optimistic then from what you're seeing yes I mean I I think I think yes from the I it seems like hardware and and the two are interrelated and that you can imagine you can have a very very precise Hardware system which is then very expensive um and you can trade down in terms and and but it's very precise it can go to the millimeter that you need but that's not how your body works your body like if I'm going to pick up that object over there I like my hand gets near it and then I look and see how close my hand is it's not like I like try to like close my eyes and grab the thing and so having good software allows you to trade into like less precise hardware and still achieve the same event um but generally there was like a um um yeah can you get actuators small enough and with Loosely precise enough that you can attach software to them and make them work and now I'm more optimistic on that front think about it this way so this 20 to $30,000 robot that I talked about um Hardware is open source and they demonstrated that you can tell operate it to like crack an egg and flip an egg and and do all kinds of like everyday tasks well maybe there's a bridge state in which um kind of the AI soft Ware is good but not perfect and so you have a teleoperator on the back end who's helping the thing like you know think about like the marginal cost of somebody to cook for you if you're paying Los Angeles salaries is a lot higher than if I'm paying somebody in Mexico to teleoperate that robot oh wow uh and so you could you could have the hardware infiltrate with like a kind of hybrid type model um and and actually you know provide return to people um that uh even even if the software is not all the way there that's fascinating I mean you could have a an Indian Chef who's cooking you Indian food but they're in India yeah possibly I mean and and and and then like the the feedback loop in AI is like the software is going to improve on the basis of how much compute you throw at the problem and then how much data do you have on the problem you're trying to solve well having kind of like that hybrid type robot provides the data that then will improve the software so you don't need the Indian Chef anymore right and so um they're training their own replacement exactly but we're all training our own Replacements in some way I mean what are you doing with your kids I'm training my own Replacements they're like seven and 10 years old that's a good point that's a very good point during your last interview with Kevin I was behind the camera on that one but you were talking about the the power of AI and how much it's going to grow and you were expecting a Sevenfold increase in the like aggregate capabilities of AI systems in 2023 how accurate do you think were you on that prediction and then what do you expect going forward I mean it's hard it's hard to measure but I think I'm roughly accurate as in like the cost declines have happened more quickly than we anticipated in a lot of ways um and so um okay I can't okay I know when that interview occurred okay so gp4 for example um they released GPT 4.5 turbo or whatever right the that on a cost per token basis was at roughly a a third the the price so that in itself was a third cost Decline and it was over 240 days not 365 days and then if you adjust for latency um as in like the tokens get produced more quickly out of it so same accuracy at a third the cost and uh and it was roughly three or four times faster so performance adjusted it was probably a 10x Improvement in terms of that specific AI system so it was basically under uh on on a very clear like light like for like basis um but there is so much evidence that these systems are just um they are wildly under optimized right now like we we really are just figuring out how to use them the fact that you can you can ask an AI system a question in a slightly different way and get like a 10 or 20% Improvement in its answer rate is just indicative of how kind of undertuned the systems are like compar to like I was was watching a video the other day of an internal combustion engine being manufactured like a V8 BMW V8 was like massively optimized you know like so automated and precise and like you can tell that every single process that creates it the entire design has been to squeeze all of kind of like the energy input into horsepower output out of that system and the like last iteration of something is always the best version of that thing because you you've just like you know tightened every screw and in AI it's like all the screws are wildly loose and people are just trying to tighten one versus another being like Oh my gosh this works and this works and you combine it together and it works this much and so like at the architecture level at the kind of data that we feed into it level at the applied to this class of problems level at the kind of like how do we yeah query the systems level there are still massive Improvement opportunities of available and so kind of yeah our our forecast is tuned really to the like how expensive is it to train the raw underlying models and and we think that's declining 3x per year but there is so much on top of that that is improving system performance uh and even like if if you think about the magic of mors law was in part like if you can press the number of transistors on a chip then kind of like the number of transistors you get for the same amount of raw material doubles and because they're closer together like the cycle time of the chip can improve so you got like a dual performance boost similarly with AI as you are creating models that are um the same performance on a smaller number of parameters then it's less cost to actually infer that model and you generate material more quickly so you get this double cost decline characteristic of like I can charge 3x less per token and I'm delivering you know three or four times more speed uh and so uh it it yields this you know that's interesting too because you're really not to cut you off there but I mean this it does seem like companies are almost scrambling to figure out how to apply this and uh it's almost as if the AI in a weird way is way ahead of us figuring out where to put it yet uh and uh then I look at a company like paler and I feel like they've always always been in AI that it just used to be called Big Data and now it's Ai and it seems to me they feel like one of the few very profitable AI companies whereas everybody else is just trying to figure it out maybe include open AI with paler what's your take on that or is who else really stands out in the AI uh space yeah I mean I I think that there is broadly a set of companies that have um both a product that can like benefit a lot from just deploying AI against it that um they will deliver productivity advances to employees that then they're going to be able to charge for in some way so like look at Zoom which by the way right now is like in the Russell 1000 value index like it has selling for 13 times right now it's it the the embedded expectation for that company is that you know it's basically X growth that's like how much cash flow can we scrape out right five bucks I think is the curing current EPs and it's expected to be there for the next like five years so zoom's marginal competitors are clearly like the Google suite and the Microsoft Suite right like um and I think it's there's plenty of compelling evidence that even companies that use those products internally still need Zoom for all external meetings because like as a salesperson the worst thing that can happen is like the meeting gets delayed by 10 minutes because people are trying to install software or they can't get logged in and stuff yeah yeah yeah exactly uh and and and zoom provides a frictionless experience and they are layering on AI capabilities onto their system right now they're not upcharging for those in a meaningful way but Microsoft is if you look at like at least on a list price basis Microsoft thinks they can almost double the price of Office 365 once they layer in AI systems and if you look at at least what Google's announced they also think they can double the price of Google office suite layering in AI so so there there is either Zoom is going to become a much more compelling like you know cost tradeoff versus those products or Zoom also is going to be able to increase prices based on the productivity they deliver for AI so that might be their growth opportunity is is just provide more value raise the price so to speak and that could be meeting summaries or or whatever sure uh I suppose isn't there some risk though that there's almost this endless competition in these software software Suites that you get you've got to get price compression at some point rather than price increase you know I mean it's funny like over time you know uh software franchises have proven to be incredibly durable at least on the Enterprise side I like I think that enterprises tend to um be very conservative in shifting soft like you know you get a software get look at like Oracle or or you know any of these kind of software packages look at Salesforce people kind of um develop on top of the tools not even officially but also in in kind of implicit ways within their organization that makes it very difficult to unseat the tool once it's developed in and if anything I would think that kind of AI systems will increase the stickiness not decrease the stickiness of a particular software system um so then Zoom also has like a potential call option where they're trying to develop a document um type system that will be AI facilitated on top of kind of the zoom Enterprise Suite and you can imagine like look at like even think about the Microsoft versus Google competition in office software over time like why did Google manage any penetration against Microsoft it's because when they designed docs and sheets and stuff they designed it with a kind of cloud collaboration first mentality right and even today it's like very clear that Google Docs works better for collaboration than Microsoft where I don't know how many times I've had my dock desync and some like massive headache issue on the back end that actually cost me productivity it doesn't deliver productivity and frustration Factor yeah and and so I think it's there it's really valid to say that whatever the kind of like office productivity Suite looks like if you were designing from scratch with the AI capabilities that we have today you would design it in a different way see the whole front end would look different right now Excel has like even like toolbar and then another menu bar above that like it's clear that there's lots of UI Cru that's been layered on to that software product over time as kind of compute paradigms have changed and so I think um you know it's possible that you have another like a a real competitive office type Suite develop AI first that then penetrates the Enterprise and if and as that occurs it massively expands kind of like the market opportunity for the likes of Zoom there's no guarantee that they get there but it's like a call option embedded in a company that's being treated like okay let's see how much cash flow we can scrape off this thing yeah like you said like a value stock right now exactly yeah right uh so what about um uh um you know there's so much hope that Elon is going to be able to turn into like an AWS for example running a software data centers doing the AI compute uh you've got uh a lot of talk about Amazon started as a bookstore and now 70% of ebit is from data centers uh people don't even seem to underwrite Amazon anymore for the fact that it delivers of stuff overnight can that happen at a company like Tesla sure I mean I I think the transition from selling vehicles to like generating Revenue off Robo tax SE would look like that and then like I think that there's a valid um perspective that essentially having all the vehicle data uh feeding into their data center provides them a better Foundation model for things operating in the world Tesla's bias will be to vertically integrate and kind of like just develop the robots themselves and not um essentially sell kind of those models as a service but it gives them strategic optionality to do it so I think one way to think about companies is like what is the like optionality they're developing on top of the intangible assets that are acing on their balance sheet which don't appear in the financials uh and then what is the monetization value of that and they don't you know you could ask Elon right now and he'll have a statement about the direction he thinks he's going but uh one I think real value of having a a a a a founder-led franchise that is that is willing to take hard moves is if his prior conceived Notions about what the Strategic direction of the franchise um were uh changes he'll shift the franchise towards that so if there's like a point at which it's like well the op Optimus Hardware is working we're deploying AI models against it but actually the future requires there to be all different kinds of form factors of robots being manufactured and there's all different kinds of people making these things and we're better off kind of like selling access to the underlying model embedded within our data center to empower you know a whole variety of applications that might be the way to maximize value as an owner of the franchise Ron Baron has this idea of Tesla inside that uh you know the the FSD in the cars or maybe the brain of the robot could be the new Intel Inside uh is that roughly align yeah I mean I think that there's a question of like do they at least in the vehicle level do they license the robot taxi technology out to other manufacturers and um I mean to be honest like yes that will be Optimum if like other manufacturers are stepping up to the plate in terms of um electric vehicle production sufficient to to meet the needs so um you know if Tesla is ultimately constrained by the number of units they can get onto the road then yes they'll license the technology um but you have to have like and and maybe in a geography like China it makes a lot more sense where they're probably not going to be able to get full share of the economics of a robotaxi platform anyway right um just from a kind of like sensitivity to government perspective and kind of like how much um they'll rely upon being allowed to operate that service uh and so their kind of optimal strategy might be to license it collect some like smaller platform fee and essentially deal in some of the local Chinese players um we'll see I I I think that um if anything the last year has on the traditional autom manufacturer side demonstrated the danger of being a shareholder sensitive management team where it's like um GM and Ford particularly GM basically like almost throwing in the towel but at least announcing that like this generation of EVS is not going to work for us and therefore we're kind of like pulling back and buying back some stock and kind of you know it it it's almost like announcing to the world they're going to run down their franchises uh and um because you know we think 70 million EVS are going to be sold by 2027 uh it's most of the market uh and um so what is going to be the value of an internal combustion engine franchise if you alongside everybody else who hasn't invested aggressively have factories that are like producing kind of like you know vehicles that people no longer want like it's unclear like to me that's a recipe for bankruptcy and consolidation um and so I I just don't know that they'll have that many people to license their software into where we be Optimum for Tesla to license versus kind of like just delivering to their own Fleet you know Brett actually accurately predicted grock last year when you were talking you had mentioned that Twitter has a very and I think it was still Twitter at the time uh Twitter has a very unique data set and that you thought it was obvious that they would be coming up with their own llm um but my my question actually is there's a lot of money that's getting thrown at AI right now and I don't know how much of it is going to R&D and how much of it is going towards marketing but we've seen some really amazing marketing uh and I expect a lot of them aren't going to end up you know fulfilling that so what do you look for when you're researching these companies as far as what's truly good Ai and what's just really flashy marketing oh I mean it's partly like using the tools and seeing if they're delivering value um and I you know a lot of in talking to management teams like you end up with a real sense for how strategic It Is by talking through like what is your AI strategy and and how do you think about kind of your or um kind of superpower that you can use to to deliver on that AI strategy and I agree like with any technology cycle it's suddenly like you have the you know blockchain IC te company or you know people begin saying AI because they're like oh Wall Street wants to hear Ai and so they like attach AI to anything um and you know on the private and Venture side it's like we've talked to a number of companies where it's clear that they develop technology you know prior there was more machine learning traditional machine learning now that um kind of the large language models have come out now they start talking about their technology as if well this is AI and it's like okay I mean I guess that's within a loose definition of the concept it is um and it's actually you're you're in a structurally disadvantaged position because you've sunk a lot of money into a system that is basically being surpassed by another set of systems uh and so it's actually um you know uh it it uh it they would be dangerous spots to take from a allocators but from an investor perspective because they they actually are being disrupted by rather than disrupting um but when you're being like it's universally true when companies are being disrupted they Co-op the terms and say we're already doing that like you know that's that's like always what happens uh and um and you know that doesn't change like the trajectory of disruptive technology it's just indictive that uh companies are getting into scramble mode and realizing this is where the puck is moving and that they're not well positioned for it there's a small disruptive technology I wanted to ask you about Bitcoin yeah we've obviously just gotten uh Bitcoin ETF approvals and uh you have a comparison uh of comparing the future value of Bitcoin to what happened after the exchange traded products for gold uh were released uh one of the concerns that I had that I wanted to ask you about that was it appeared the real takeoff and value of those gold ETFs occurred during the recession is it possible that might not be the best comparison then using gold to bitcoin no I mean I think it creates potential energy is the way to think about it you're absolutely so like the gold ETF listed in the US in 2004 in over eight years like the price of gold went up 4X um and um but it was heavily catalyzed by the financial crisis right as in kind of like people you know the story of gold became a story people were paying attention to uh in part because they're like oh the whole world is you know going to go bankrupt and we need to own the asset that's going to survive afterwards right and um the the um gold as a call it a tool in the financial toolbox of investors um gra gained credibility because of that listing right as in like if you look after that you know all the strategies and stuff began to put out papers on portfolio allocation and precious metals and how to think about the characteristic price movement of gold relative to other you know things equities and bonds and everything else this is a different asset and you should think about it as a you know low singled digit allocation in an efficient portfolio allocation um and so um the I think similar so and then there's an important difference between gold and Bitcoin which is the price of gold went for up Forex over over eight years uh and that caused a lot more people to go out and find gold in the ground and dig it out so like over the decade 20 2004 to 2014 like annual gold production went up 25% so regardless of what the Bitcoin price does uh you know eight years from now uh it'll be basically like a quarter uh annual Supply what it is today roughly uh and so um you can you know there's reason to believe like so I think it's valid to say that that kind of the listing of the Bitcoin ETFs uh you know is a a a threshold and Tipping Point that is really momentous for Bitcoin as an asset class because now all of the traditional Financial ecosystem at least in the US is allowed to like look at it and say hey this is something I should consider in portfolio allocation so maybe that 6040 Bond uh stock Bond portfolio turns into a 65 35 something of that sense whatever the allocation is the point is it can be allocated now the follow up question to that is theoretically it could have been allocated already versus with gold you know you got a before the ETS you had to buy the gold you had to store it somewhere whereas with Bitcoin we were still able to digitally buy it beforehand yeah you and I can like retail normal like people who are like hey I'm interested in Bitcoin I'm going to open up a coinbase account we could buy it a financial adviser would in many cases like no chance one think about it like if I'm a financial adviser I'm advising a client I basically have like access to their brokerage account right so if they can't buy the asset through their brokerage account I might think it's the right thing to do um the person I work for might say no you're not allowed to advise that but the reason they would is they would say to protect client but it's really because if I tell my client to hey take some dollars out of this brokerage account go open a coinbase account and get some B coin yeah there goes the AUM exactly that cost me money and by the way hey people respond to incentives I'm it's it takes a lot of belief in Bitcoin to tell my to basically uh hope that my client will do well by it and then appreciate me more even though I'm costing myself money by doing it whereas now the financial adviser can be like hey this is a useful thing in your portfolio allocation you should you know buy this spot Bitcoin ETF because it's low fee and it's an efficient exposure and it fits right in like if you're borrowing against your portfolio in any way it fits right in it if you're you know I still get credit for allocating you to it you know it fits right in and so it's it's it's actually an important Bridge into the traditional all of the processes that happen in traditional financial services that previously Bitcoin was excluded from like imagine you're a financial adviser and you tell your client hey you should buy Bitcoin it's a good thing to do and you send them to FTX as opposed to coinbase yeah well then you might be subject to a loss like you know so then you as a financial adviser do you really want to like try to underwrite coinbase to help your you know client like custody Bitcoin somewhere no you just want to be able to like you know I know that whoever Fidelity or Schwab is is an institution that's going to exist I know that there are rules in place even if Schwab goes bankrupt that those assets will still be my clients and so therefore I can trust anything that's on that platform as something that I can invest in that's fair and you get cpic at that point sipc insurance so that's interesting then so let's say we get a lot more institutional institutionally allocated Capital to bitcoin that should be great for the underlying Bitcoin does it hurt coinbase though to see retail which is the most profitable trading sector for coinbase somewhere around 73% of their revenue is uh uh from Trading about a third of that is from Bitcoin uh and their most profitable segment being the retail consumer if they shift from coinbase Trading to an ETF now because it has cpic coverage it's easier it's part of the brokerage account great is that going to devastate coinbase's revenues well one coinbase is custodian on most of the Bitcoin spot ETF product so they're generating Revenue on the money that goes into that albe it it's different you know a different um kind of like take rate relative to the retail trading dollars two the people who are in coinbase are typically not people who are just wanting to own Bitcoin they are owning Bitcoin they're staking ethereum they are kind of investigating the entire kind of smart Contracting protocol space and and so like net it's beneficial for coinbase if the entire you know set of assets goes up in value and this if anything probably opens up and solidifies the foundation on which smart Contracting Protocols are going to be built you know there's going to be I think you know who knows what will happen with ethereum in terms of any SEC listing but certainly there's going to be any appreciation and Bitcoin will likely spill over into the other crypto assets and having like a larger uh more diverse holder base of individuals who will frankly raise hell if Congress tries to do anything to these assets is net better for kind of like coinbase's both political stance and the future prospects of like the call options embedded within their business model um in in some ways I think it's like there's a VIN diagram between the people who own on coinbase and the people who are going to own within traditional Financial ecosystems and there's actually not as much overlap as you'd expect one I think interesting call it byproduct that is this in terms of financial Innovations it's like typically like big people get it first and then little people get it later right and a lot of the Innovations are let's take big person pricing and convert it into little person pricing like securitization was like big giant corporations could could you know borrow money in the bond market but little individual homeowners couldn't well if you securitize mortgage um mortgages then it allows little consumer homeowners to actually get big corporate pricing on their bonds here it's like retail has had access and now only now is institutional getting kind of dealt in in at least in a robust way so you don't think then it doesn't sound like a a coin Bas is a bearish move for you nor does it sound like you think uh being bearish on on let's say Bitcoin where maybe it could stagnate like the price of gold over the last decade or so uh is in your forecast instead bullishness well I mean think about it there's like a couple ways to approach the problem but like one way to think about it is we think that there's going to be roughly a quadrillion dollars in financial assets globally by 2030 okay uh and that's not making anything any there's no aggressiveness embedded in that forecast other than our GDP expectations of 170 trillion as opposed to 130 trillion so Bitcoin at a million dollars a coin uh suggests that Bitcoin is around 20 trillion dollars so 2% of that wait 100 trillion 10 trillion sorry less than less than 2% of that quad you know 0 2% of that quadrillion right and so it's like uh oh no sorry 2% of that quadrillion sure right uh and so that's roughly like we have a official Bitcoin forecast that's out there that's constructed from like a a low singled digigit percent allocation from corporate treasuries and from institutional allocators and Bitcoin displacing you know some substantial share of marginal gold holders we just think it's a better way to store and protect value than gold one and a half million per coin is the bull case right right and then 600k I think base case what's your what's your bare case for Bitcoin uh I think in the published forecast it's around 300K per coin uh but I think it's like one you can look at portfolio allocation you know documents and show that like a single digit percent exposure to bitcoin is the right thing to do from a like correlation and excess returns uh perspective uh and to me it's reasonable that like if you think about like 2% of financial wealth acre into Bitcoin you know that actually is going to be like very unevenly distributed as in like some people are going to have a lot so then a lot of people are still going to be under allocated uh and and be trying to like essentially catch up uh in some ways it's a like if Bitcoin returns very well it'll attract more Capital there's definitely like momentum embedded in Capital markets but um I think and and also just like if you look at um not the total market cap but the amount allocated to um gold for example uh over time after the ETF listing even after the kind of um the the the financial crisis which caused it to like move to a different level in terms of the amount of wealth that people are allocating to Gold annually on a net basis um you don't have to assume that Bitcoin gets to that level um to get to a million dollars a coin you actually just needed to proportionally move up as much as in kind of like I think people you know on the margin people have a certain amount of wealth and they shift a little of that wealth into the assets that they are interested in or they think they need more exposure to and kind of like you can kind of track a a a reasonable forecast to that and get to a million dollars of coin saying million dollars a coin is your modest estimate well it's probably I mean we haven't produced our official estimates for this year that'll be an a big Ideas deck that comes out sometime this month likely um and like on the prior published estimate $1.5 million is the upside case and 300,000 is the downside Case by 2030 uh and I think the the midc case is 700 to 800,000 I think if anything the you know we didn't know that the Bitcoin spot ETFs were going to get approved if anything this like uh enhances and probably enables um the institutionalization to happen uh in a way that hadn't happened before because think about it like it's really it's not just the ETFs the permission that is granted by the SEC blessing this product is going to create all kinds of credible arguments that like investment Banks can make that that you know other Regulators around the world will look at this and say oh okay this is permissible now uh and so I think it's going to catalyze like a lot of call it officialized to you know think about how to manipulate financially like it does not it it is so obvious to me that like investment Banks should be combining like energy trading with Bitcoin mining with Bitcoin primary generation into kind of like like trading function for Bitcoin and if investment Banks don't like coinbase probably will right and now kind of the Goldman's and Morgan stanes of the world you know prior to this there was all kinds of signals from the administration this stuff is off limits it's radioactive don't you dare touch this you know this is like we're going to try to you know put anybody out of business who deals with this stuff to now Hot Potato yeah yeah now it's like well you know you've just invited you know every person with with any brokerage account into owning kind of products tied to this underlying directly and that sends a signal and it makes the investment bankers able to go to the banking regulator and say listen you have to let us participate in this market because there is wealth being created here that we're being held out of um because you've held us out of this market and for what good reason you just approved all these ETFs you know a different regulator but a regulator within the US government and so I think it'll create a lot of whereas before all of the kind of official parties in the financial ecosystem were rightly concerned about what this meant for them now it's like this is happening whether you like it or not and so you better like move in to get your piece uh and so then that creates like this whole like once an investment bank has it well then they have a Salesforce that's going to go out and try to sell it and try to sell all their services and you know so so like really what this is doing is turning on the kind of distribution of traditional Financial Services into advocating for an asset whereas before there was as much incentive in the world as possible for them to Advocate against it including going to the regulators and saying you have to stop this stuff and you know so like the whole dynamic is inverted um I mean it goes as far as like uh we spoke with multiple different Securities attorneys last year as we're working on projects and they would say we can file you know regd documents reg a documents like this like this if we mention the word crypto we'll be at the back of the list and it'll take three times as long right and that you know depending regulator unreg like there still might be some of that friction in the system and I think it's it's it will be much harder for that friction to persist now than it was even even a month ago like or a few months ago when when you know the SEC was still digging in its heels so I I I you know I think it's it's it's like a quasi Blessing by the administration that we can't stand in the way of this technology and I think that's net better for the world like I honestly think that the administrative stance opposed to cryptocurrency and crypto assets broadly has been backwards and like I think that there is a group of call it gray-haired people in government who um really have been worried about what this means for their particular lever of power that they get to pull uh but the Strategic interest of the United States and of Freedom globally I think is is in having an asset that is uncensorable and it's just like you know information should flow freely and monetary systems are just like information systems and um somehow having some person with gray hair who's able to say no that information is not allowed I think that's actually a dangerous stance and and it's it's it's um it's actually comforable to like imagine that the US government had gone through a multi-year effort to try to prevent the development of universal translation technology because they were worried about what it would mean for the Primacy of English right right that's basically like I think the relationship of the fed and the SEC and to kind of thinking about the Dollar's relationship to to bitcoin I think Bitcoin is universal translation technology or cryptocurrency broadly but Bitcoin specifically Universal translation technology for money and the likely result of that is not to diminish the importance of the dollar but it's actually going to magnify the importance of the dollar because you're going to end up with like one proof of work coin and then one Fiat coin probably you know and and kind of like all of the monetary systems like down stack become much less meaningful and in fact maybe um are under threat uh right but that's almost isn't that almost a risk factor that at some point if this is somewhat of a crazy argument but that if we can't print money anymore we can't sustain our fiscal deficits and that we the dollar collapses and we have the real Great reset which basically uh I don't think is near personally but uh that's a big fear is that we're gonna have to go back to to paying you like having a balanced budget imagine that right yeah I mean but I mean look at the so the argument is basically by by being the reserve currency for the world we get some kind of like Financial benefit and that we can borrow cheaper than we'd otherwise be able toig go um but like look at the borrowing cost of the US versus like Greece right now I think we borrow more expensive than Greece so clearly it's not I I don't think it's as kind of it's not clear to me how much benefit we get then the other argument is well being able to like impose Financial sanctions is an important kind of strategic aim of the US government and I have yet to have anybody Point me towards like a set of financial sanctions that have actually produced the outcome that the government was like looking it worked against Russia oh wait yeah well or even go back in history it's not like it's not like imposing embargos on Cuba did a lot for our strategic interest there over a long long time uh and like if anything kind of like the it seems like the result is that you cement dictators into power at the expense of their population's well-being so from a like a universal like humanitarian perspective it seems like it's a net um net bad and I'm I'm sure maybe there are examples out there I'm sure there are I'd love in the comments somebody tell me what I'm wrong about here but I think it's more like you know I've been reading a book it's the history of the CIA which is incredibly depressing uh and um people like to be able to pull levers yeah and like the thing that kind of like when people are in power they want to be able to impact things and so if you're taking away a lever for them even they will convince themselves that that's bad for the world even though kind of objectively it's probably net good uh and and I think you know I think a you know cryptocurrencies and and smart Contracting protocols like crypto assets broadly are going to be net good for the world in a profound kind of like our ability to motivate Capital into the most useful products for the benefit of humanity fashion uh and and and they will deliver you know a a much more efficient Capital allocation system system uh and kind of like that will redown to the benefit of the the country that um you know is most geared to technological innovation and enables the most technological innovation and the US is undoubtedly that country at least right now uh and and so I think you know it's in our strategic best interest to enable that new system to thrive and flourish as quickly as possible and we can essentially succeed through just GDP and productivity growth and the optimism that comes with I have a feeling BR is slightly bullish on crypto that's the vibe I'm getting what are your thoughts of countries like El Salvador or the Central African Republic that actually use it as a legal tender well I don't think that there's actually um been that that much utilization of it as a transactional asset you know we're still in kind of like the store of value area and I think you know for the likes of um El Salvador or you know these countries like they are um both they're making a strategic bet and appreciation which I think is a wise one and they're trying to like reduce their both dependence and the power that the US government has over them which is probably also a wise strategic move and you can understand why the US government would not like that but I think that from a the perspective of like you know can I do what I want internally without suddenly the US government you know taking away the money that is supposedly mine like that's probably n wise for them I I think that um what I think is interesting or useful about the technology is once once those countries basically say hey this is potentially legal tender it gives people kind of a framework by which they can kind of uh diversify their own risk internal to El Salvador away from the El Salvadoran currency or the dollar that is denominated against and so like I I do think that there will be like emerging markets that transition either voluntarily or involuntarily into a more Bitcoin based economy um simply because it's like going to there will be kind of universal tools for onboarding and holding digital wallets and stuff that won't be um kind of like developed in that country like if you think about like a a banking license is actually an incredible rent seeking um thing to have in a lot of Emerging Markets because you can extract you know extraordinary fees off of the customers that you service which and then you cut out and don't care about the people that don't have that much money because like why bother servicing them right and so it's like the the kind of bureaucracy and the fixed cost of opening a bank account basically leaves a lot of people out of the traditional Financial system and there's no incentive for the banker to actually go and service that marginal poor customer whereas um with Bitcoin or cryptocurrencies broadly it's like well there's going to be a universal set of tools that the marginal cost of delivering it to somebody is going to be effectively zero and so they'll get on board but not through traditional currency through kind of like the set of crypto assets um you think heav is going to succeed in getting rid of the central bank I don't know if I know enough to actually com I mean should we End the Fed in the United States probably not we shouldn't fire Jerome Powell is he keep using firing Jerome Powell is not equivalent to ending the FED um you know and I think that we'll see what happens economically over the next 12 months do you think we'll stick a soft Landing history would suggest no what do you personally think I mean I think that it I think we are kind of like teetering right now I think that the um there could be like uh I think we're in a position where things are set up where something major could break oh wow right and and but it's you don't know for sure you put something under enough strain and it's like it might hold and kind of like it snaps back but in event of breakage it could get pretty messy uh and so I think that kind of like a stance of uh you know lowering rates would be like net safer to the economy as soon as possible yeah I mean I think that the you know imagine like a set of consumers that's out there that had this like you know kind of bloat of savings that's worked into their balance sheet that um they spending down the reason people hate the economy right now is is not necessarily because of their income it's because they had this lump of savings that they're spending more quickly than they thought they needed to and some are getting into distress and kind of like there's clear like damage in terms of capital asset purchasing as in I'm not like making big purchases um and um you know borrowing some interest rate relief like I think more and more people will get broken over the back of um kind of like the interest rate burden um so not necessarily another banking collapse but a broader consumer collapse that could lead to joblessness or or where do you see the St I mean the the two are co-related as in like I think that the you know a you know there's like in the property sector there's clearly a bunch of players that are in trouble right so what do they need to like survive they need to roll their loans at some rate that's not exorbitant from the banks if the banks aren't sitting there and being like hey have a loan uh you know then they die right and so the way they die is basically the the keys to the bank so then the bank like takes property on its balance sheet that it doesn't want so you know how does the bank manage that do they sell it into the mark like there's a lot of potential Cascade effects in the real asset in real asset land that could like Cascade back onto the bank's balance sheets and I'm not saying it's you know it's not certain it's going to happen it's just there's like a very high potential there and so I think from the fed's perspective it's like uh at least from you know we think that technology delivering a lot of deflation into the economy right now um there's plenty of evidence within the technology space that consumers are beginning to like trade down and kind of like you know Force pricing down uh and um you know if if the FED has sufficiently bent the curve on inflation then why take the big risk of breaking something major rather than you know cutting aggressively to to kind of like try to land the plane is there the risk that they pull a mid1 1970s and by not staying high for as long or longer they reinduce inflation by breaking expectations I don't think there's strong evidence that there's been a wage price spiral in the same way that there was in the 70s it's really like the consumers had this like set of savings that they were spending so it's like the consumer wasn't faced to make internal adjust wasn't forced to make internal adjustments because they still had a bank account it's not because hey I'm making more money this year than last year so therefore I can spend SP more instead it's like well you know I guess I'll order from door Dash again cuz I have all this money in the savings account even though I know it's net expensive for me you know and then suddenly somebody spent I don't know somebody was posting on Twitter they spent $30,000 on door Dash last year oh my Lord and it's like well that was a dumb move like you could have you could have walked down the block and gotten that food and and you know reduced kind of like net spend uh and maybe bought a car you know and and so I think that um because it has n like fed through into wages uh there there's there's not the same Dynamic with employers where it's like oh there's an expectation that I'm going to get a raise this year you know instead people are marginally uncertain about their jobs so I don't I don't think that you know cutting rates and kind of like saving Property Owners from like sending their buildings back to the bank is necessarily going to feed through until suddenly the consumers have leverage against kind of like employers to demand oh interesting so uh in other words uh uh save save the wealthy because something bigger might break well I mean you call somebody wealthy but if you look at like the average office building that person might have zero equity in that building as in as in you know they're wealthy in that they have uh a loan out for more than the value of the business from the bank that's actually net unwealthy right and so like the reason they're sending their keys back is because it's like I can't roll this loan and make it make sense so good luck with this asset do you know what I mean uh and so I don't know if it's you know yeah I don't know if that's exactly the framework I'd think about it through Fair who's going to win the election I don't know it's like I I think it's it I just go with betting markets it's basically 50-50 Democrat versus Republican with your mix of Republicans on the one side and a mix of Democrats on the other because people still think that Biden might like drop out or somebody might step in right do you think that uh the economy will be the primary deciding factor that is let's say we get to November 2024 stocks up real estate market didn't collapse we didn't have mass joblessness we get Biden uh stocks down mixed red pain joblessness you go for a change of regime just like you know' 08 the hope you can believe in um I do think it plays a factor and I think to be honest it probably from the fed's perspective will feed into their decision Matrix as you think the fand is going to be manipulated by potentially the prospects for what how they want the election to move well I I mean it depends on how broadly they interpret their mandate but I could imagine members of the FED saying that we're interested in kind of like the stability of the dollar and believing that um Trump poses a danger to kind of the stability of the dollar and so then you know and that won't appear in the minutes of course but I I I can't imagine that that's not a internal bias that they wow so I mean it's not like Trump's ever threatened a fire poell oh wait yeah I think I think you know again it goes back to the like the levers of power bit right where it's kind of like the FED Governors are incredibly powerful right now you could imagine a a situation in which the power of that seat is dramatically diminished if somebody gets into government and says you know what I want somebody who answers to me to be in that seat wow uh and so with that as a perspective I think that there's probably I I I think it biases me towards more rate Cuts this year than I would otherwise interpret how interesting uh few final questions uh Roblox they've got about $100 million of cash flow quarter uh growing at about 38% however despite this growth their losses are widening a lot of their expenses like 70 plus percent of it going to stock based comp when is Roblox ever going to be profitable well like this is the way we think about the consumer space broadly which is that there are um going to be probably a handful of enter entertainment Platforms in which people spend a majority of their time right and these platforms are going to be incredibly powerful and compelling and the platforms that enable kind of like the creation of interactive experiences and content are going to command a ton of attention and so like the if you think about where robot roblock stock based comp is going it's going to people that are trying to create these experiences and create the platform okay right so if the cost of creating the experiences and compelling experiences collapses as then you can have users generating those kinds of experience and still compel their users attention um then actually you get great essentially leverage against the model where um the where you want to be is as big a user footprint as possible with as Dynamic a platform as possible that then can have all kinds of things built on top of it uh and Roblox is a candidate for that and so you know you there's like them and then there's like fortnite uh and epic games like I think those are both great kind of candidate um game engines for um like immersive experiences that'll can command a ton of consumer attention and then from a like consumers generally will pay either implicitly through ads or or explicitly through like virtual items and or wagering or whatever uh or buying Commerce items um for the time they spend on those platforms uh and so kind of the this is the early days of that story this is not like the late kind of like extraction of value portion so you're you're still very early on the scurve in your expectations for Roblox sure are you in Roblox right now uh my children are okay right right right oh your children are going to grow up and have spending power and it's kind of like the diversity of experiences that are available there are going to expand um and it's uh in some ways it's like um you know the it's it's similar to The Social Network story just on a different kind of like interaction layer is the iPad uh or sorry is the Apple Pro Vision going to be the next iPad moment for Apple no it's too too it's too expensive and nobody I I'm I haven't used it yet so say that a fire trck going by um and I'm really curious to see how the like the vision tracking feels like I think that's like a unique user interface Paradigm but $3,500 for a device is way out of range to attract enough users to like spin up a developer ecosystem uh and generally I think with new user interface paradigms actually the software that's going to work is going to be the software that's developed specifically for that it's not going to be I'm taking iPad apps and like pting it into that experience so it's hard for me to imagine like like our analysts are going to shift from like looking at a screen to like wearing this thing and trying to multitask against virtual screens because of like weight discomfort because of like lack of resolution because it's kind of like the user interface will be bulky and so I don't think it's actually G to certainly at this price point there I I would put a very low odds on it working and um even given an expectation for a price curve they can ride down um it's hard it really has to be the primary compute device to make economic sense and it's hard for me to see it sitting there like I have much more faith in kind of like meta rayb bands as being something that people would wear and kind of like use as a way to interact with the world or like the you know the rabbit device that just came out at CES that's like a consumer device that that's purpose-built for all the interaction that becomes available to you when you use AI to interact like I think that's like a more interesting or likely pathway that things develop I don't know if that device specifically is going to work but the design is great and it only cost 200 bucks and so they sold I think it was something like 10,000 of them on the first day wow right and they sold 10,000 because people are like well 200 bucks for a really well-designed device that might offer me utility right that seems like a reasonable bet it's like a Kickstarter project but we'll actually deliver you the product you know and and um in the history of compute like when you have a massive change in your user interface that's what leads to platform transitions so you know going from the keyboard to the mouse uh that's what displaced IBM and led us to Windows going from the mouse to the multitouch screen LED us from like Windows to uh Apple well now we're clearly in a different user interface paragon I can talk to a computer and it can respond you know and um you know maybe there maybe I can gesture and stuff like so people are figuring out exactly how to use it but it suggests to me that at the very least like the way in which software and compute Hardware is designed and works is going to change uh and typically the person who dominated the last platform in user interface has so much Legacy user interface design and training for their users that they have they struggle to make that transition so you think Apple might be left behind it's possible so the counterargument would be listen they have like their constellation of devices they're just going to do like uh voice interface through their airpods and they're fine and I mean I don't know that that company is showing its kind of legac in age to some degree like Siri you mentioned earlier yeah how long is Sir been now like that that is it is actually comically bad now relative to what somebody could develop just wouldn't take a big team to make it much much better so then you have to ask well what are they waiting for honestly like what is who is the product manager of Siri who's like hold on guys let's not improve this thing because people really enjoy like asking it six times to try to just play a stupid song you know like what what is the what is the holdup here and I'm sure they're going to deliver some AI enabled product hopefully this developer cycle but honestly it should have already happened and the the kind of like the framework of how I approach what I do on my phone is feels full of friction now it's like I'm searching for like a specific app to do a specific thing I have to remember what that app is I have like you know 100 apps on my phone I use like 15 like there is there is a different way in which our relationship to computers is going to work on a go for for basis and it's hard to bridge from like everything runs Central through the iPhone to maybe it's you know more ambient Computing where it's like I have a user interface that's independent of the hardware that um kind of like has to be able to bounce around to all of my systems in some way uh and so I don't I'm you know they clearly feel like they're in extraction phase of their Monopoly and that's usually not a stance where you can motivate a Workforce to actually build the next system wow last question I have and then I'm sure you have some questions to Mikey we'll wrap up here in a few minutes um is Elon making a big mistake getting so political on X should he just shut up I think he should say whatever he wants to say like honestly I think that um you know there's there's like the Strategic framework perspective where imagine the election coming up as 50/50 yeah and imagine that uh if one side wins they'll basically like have a set of rules that they follow in terms of how they deal with entities and stuff if the other side wins there's going to be much less adherence to the rules and much more kind of like call it um responding to um who they perceive as being loyal versus disloyal uh and so uh if you're operating within that framework where it's kind of I know what the rules are if one side wins and I don't know what the rules are if the other side wins then you're better off kind of aligning yourself in a way where in the event where the rules are fuzzier kind of you're GNA be in the good graces of the person that's making the new rules so there's like wow that was a very interesting way of basically saying if Trump gets in and everything goes into chaos at least I was on the side of supporting Trump and maybe we'll be okay as Tesla I mean I I think that you know not quite as crudely as that but I I can understand I can understand how that would be like uh Optimum strategy uh and I think you know there are clear things that he believes that I absolutely adhere to as well which is that there should not be kind of suppression of information and speech and that I think that um X as a platform is actually the right way for information to propagate around the world and uh and I think that it's an incredibly um powerful kind of like Way by which kind of all the information that's out there down to the raw material in the synthesized material can be like you know collated and and and and raised and I think that he is you know both demonstrating that and and kind of using the platform to its maximum benefit for him that's a great answer Mikey what do you at all right I got a few we'll go fast in you know respect to your time uh I guess I'll kind of work backwards so one of the last things we talked about was that rabbit that just came out I think it's called the R1 I've already heard that referred to as the iPad moment for AI and I think you can take that to mean a few different things but one of the things that stood out to me is with the iPad it was a device that nobody thought they needed until it came out and then everyone was like oh I actually need that so do you think there's some Merit to that or do you think they're making a mistake by making it a standalone device and it should be something that's in your iPhone or Android instead well I think that you should understand it within the perspective both of corporate strategy and of kind of like the the previous thing I was talking about where like the user interface I think it has to change if you can if you can interact with these things in in kind of a voice first way so from corporate strategy perspective imagine that they were instead of releasing a hardware device to try to launch an app on Apple okay one they're subject to the Apple tax so any commercial transaction that they develop through that they have to pay 30% back to Apple and for what it's for Apple's distribution but also they're probably uh restricted in how much data they can ingest and extract off of the used use behavior um if they're on you know the iOS ecosystem and so they both lose kind of like some of the data they need to improve their system and they give up some of the economics and I think one I ordered one because like Teenage engineering which did the hardware design for that is a great kind of like Hardware design organization like I I want to order all of their stuff it's beautiful I know it'll like be like good in my hands like there's you know so and the price point is like $200 not meaningful and is it going to be useful I'll find out you know and I that there is a like the iPad yes I mean Kevin's over here using one I'm looking at the rabbit right now I'm like this is very interesting um well you missed the first set of orders you're going to have to wait for delivery um the the um the iPad is useful and I feel like particularly like as a smart home control device it's still like bulky and actually not very useful and and I think the the question I have about this specific device is is it really credible that people are going to carry two things in their pockets probably not or a minority of people are going to so it could be that some people are more like I'm going to do it myself and I have a smartwatch that's connected to a cell phone and then I have this thing that is like my you know personal Communicator with the world or device you know and and like they get off of the phone as the primary thing in pocket or it could be that people have this more as like a hey this is my interface that actually works with all the systems that I have in my home which span like you know Sonos and apple stuff and and you know that where I'm kind of like using it to control more of the home envir yeah and I think that's maybe a way it will be useful and it's kind of like a we'll see and and from the think from the corporate strategy perspective it's like if you look at these large language models that have been uh reinforcement learned where uh you you're like you're providing human feedback to make them better and more interactive the N the amount of data you need for reinforcement learning is actually like it's not that much it's costly because you're paying humans to do it but it's you know 150,000 or 200,000 or maybe even 100,000 kind of like um kind of nudges to the model to to train that policy Network so if you can get you know they sold 10,000 of these things uh if they're getting like 10 interactions that are useful from a reinforcement learning perspective per device at all you know that probably improves their kind of underlying model that they're using and so I think it's like both clever and that kind of well-engineered device great price point that people are going to order and then if they can drive any engagement at all they're probably getting useful information off of that which will then improve their system over time and one real difference between kind of AI software and traditional software is actually you should see more continuous and dramatic Improvement in the software over time as in like iOS generation to generation they only release a new one every year and it's like what's the marginal Improvement it's like oh now I can change my background screen you know it's it's not like there's not marginal Improvement and so kind of like the I think the The Stance towards like how do we improve our software over time and what does that mean to the end user is going to change so it's like similar to a Tesla like the rabbit the R1 that I buy today I I expect it a meaningfully more performant a year from now whereas the the I phone I buy today you know like the software improvements they're going to offer are not going to be that great and they may even degrade like battery life in the device so then you know it's it it actually kind of changes our relationship to kind of the value of the technology that we hold when we talk about the growth of AI uh you were talking about Moors law earlier do you see it linear in that same fashion or do you think it's more of an s-curve and if it's an s-curve where are we on that curve well I mean mors law is not you mean it it's it it compounds at a consistent rate uh and and so um I think one as I described it's it's kind of like the there are so many different Improvement vectors right now in AI that it's probably the cost decline is we've clearly under for we say it's declining at 3x per year but clearly it's it's it's improving faster than that on a cost basis uh and I think right now it's it's semi chaotic uh and there's so much optimization happening that depending on how you measure cost declines you can you know get really meaningful performance like kind of performance discontinuous breakthroughs uh and and we're in the very early stages of that and and I think that then you will have a consolidation into a more both measurable and kind of forecastable set of cost declines but we're not there yet but this is all caveat with like even the fundamental architecture is still in Improvement mode there was just a paper out um that was demonstrating that the the Transformer based large language models are not Turing complete meaning you can't you can't give it any arbitrary op operation and have it like compute an output and so one way to think about that is the large language models right now as they're currently designed it's it's almost like a calculator right like a calculator is a really useful thing right it's a really useful thing but I can't give it an iteration Loop that then like uh kind of like computes any arbitrary thing I want there's like a limited set of operations it can do uh and the paper was demonstrating actually if you combine two Transformers in a model in a clever way you can make a a t complete AI model uh and we don't know yet but to me it seems like an architectural breakthrough where actually these systems could become you know wildly more applicable to almost any task uh and so there's lot that's an example of one paper there's the we're so early in figuring out what the existing systems we have can do what the next system is going to look like you know even just improving the existing systems we have by throwing more data at them um that it's like to say it it's it's almost like they're we're at the beginning stages of multiple s-curves that are compounding on top of each other and so it's like the the I I think you're more likely to see rate improvements that are that kind of like are wildly volatile and then these huge step changes in in capability then you are to say oh okay so now it's this good and then next year it's going to be that good I think we're we're like in early realization stage I wish we had all day with you uh I I want to talk about roadblocks about cybertruck but I I'll ask one more question uh I've heard a rumor that everyone in La is selling their Teslas and buying rivan how ACC accurate is this I mean I think people in la love their cars I don't know of anybody that's selling a Tesla I have seen a lot of rivian driving around I know someone who drives a rivan loves it uh I think that the um there's like there's actually a characteristic in California where it's like a um California tends to adopt early automotive technology earlier like the Prius penetrated 10% of California prior to then it penetrating basically 10% of the country and I think it's accurate that like most everyone in La their next vehicle purchase they're looking at is electric I think on a dollar per dooll basis Tesla's the best value and so people tend to go with that what about byd well it's not available here yeah yeah yeah I mean conceptually they'll be manufacturing through Mexico or something and and bringing their cars into into uh the us at some point but and and I think like the marginal High ticket price buyer uh might be buying a uh rivan in La like the person that you know like doesn't buy cars they like lease cars and and they're flipping them every three years uh and listen rivian's products like look great they're amazing uh I do I think you know a company that may end up having to license Tesla's self-driving technology rivian's like a a fairly good candidate for that um and scaling production is massively difficult like I think that you know I real credit to them for products I think and I've written them they're amazing um I don't know that anybody's like actively selling a Tesla more like they're rolling off their lease and like I'm getting the next you know cool thing okay um yeah but BD is not going to beat up Tesla the the competition for Tesla is not EV manufacturers it's traditional internal combustion and we're like so early still uh in in kind of like Crossing this cost Thresh thresholds uh and then you layer on top of it kind of like even look at the newest model 3 and compare it like spec for spec versus like a uh BMW 3 Series right it it's like less expensive uh has like you know a screen in the back like it basically now has better interior finishing than than it prior than it did prior and on a total cost of ownership it's it's an amazing deal and it's safer and you get like software improvements over time like the my model is like a better car today than it was when I bought it four years ago you know that's amazing that's like that's not precedented uh and actually I think just like broadening a little bit and it I think that there is increasingly Hardware is going to have to be attached to some aftermarket kind of like software Revenue generation because like think about the Optimus robot they're going to sell that into a company that can make an Roi decision on it given current capabilities but that Optimus robot is going to improve not depro or whatever the word is over time right and so like the utility of that system is going to improve like I I'll start out because I can I can make a case because it's breaking down boxes which previously I had somebody doing like or taking out my trash gosh you know and and then suddenly it'll be able to do the dishes uh and if they've only sold it Upfront for a price you know then they're actually leaving on the table all the economic value they're delivering as they improve the system over time so I think autonomous systems are going to have to be kind of Engagement or utilization priced in some way so that they're not giving up all the followon economics after they sell in the vehicle right now Tesla's basically giving that to customers like I you know a BMW like maybe you have to pay $800 for the nav system upgrade or whatever right yeah whereas like my Tesla now tells me where all the stop lights and and stop signs are and I didn't pay any more for that that's just delivered to me in a software update so um kind of there's actually amazing kind of value per dollar being delivered by Tesla right now and I don't know if that's going to like you know once you cross into full self-driving land then it becomes a whole different business model and they can partly afford to do that because they know they have that like realization vent on the back end um whereas a traditional automaker will be like oh wow we can we can charge people to use Spotify through us and get a like lead generation on that and we can you know they'd be trying to nickel and dime customers because they're so and th right right I wish we had all day with you it was 11 months since the last one maybe we'll see you again in 11 months it may be a very different world you know it's very hard to be jaded or negative around you you're like a bundle of optimism and really good Insight so thank you for that like what what as like a final thought is there anything that makes you concerned I don't know nukes China Taiwan like there's got to be something negative I can't get anything negative well I mean optim I love it I think you know there's all or if anything can derail technology it's kind of like political and Regulatory um call it like intervention and so I think that the um and and it goes back to like pulling the levers of power it's kind of like the the AI executive order for example I think is perly very poorly written and written so poorly that like some of my Excel models I think run a foul of it and so am I going to have to like register my Excel models to the US government well obviously not unless the US government decides that they want me to right and so being in a place where kind of like the rules are written with enough latitude that then some regulator can kind of like force companies into comp compliance no matter who that like just if the company is doing something that they don't like I think um then puts a PO on kind of certainly like the open source development efforts and and that kind of thing so if you look across all the technologies that we've studied um there are two that stand out for not following a rights law style cost Decline and it was Rockets up until SpaceX launched and began Landing uh in nuclear power and uh if you nuclear power was was following rights law pretty cleanly until the 70s and kind of the the protest movement around nuclear power imposed you know really aggressive basically regulatory friction on being able to build the plants uh including you would get like 6 years in and then you'd have a two-year delay because you had to pass like an operating review that didn't even exist when you started right and so really that time to build it inverted it made nuclear more and more expensive over time until people gave up uh and so like the real seed of that kind of political concern about nuclear power was not nuclear power itself but nuclear proliferation and and nuclear weapons which are an existential risk to humanity and what's I think ironic and troubling about that is it's basically the the regulatory angst that was inspired clipped off all of the potential benefits of nuclear without without reducing any of the risk in a material way we still crossed a number of like major coin flip type thresholds where things could have gone catastrophically wrong for Humanity because of nuclear weapons so like the the often I think the political energy around concern of the impact of the things actually gets kind of thrust in a way that just reduces the utility to the average person while still exposing them to all the risks like there's no question that AI models are going to be used for disinformation campaigns used to generate all kinds of like there are lots of risk vectors for individuals and organizations that are going to spin off of this um and like without unless there's some kind of like you know suppression of momentum they are going to be on net massively beneficial for Humanity it will be I would be a lot more confident in that if people were freely able to develop them as opposed to basically you restricting the development efforts of the good faith actors while doing nothing to suppress the development act efforts of of the bad faith actors which is the likely result of most of the regulatory stuff that I've seen uh and so I I you know it's like is is you know a sovereign is like China going to like slow down because there's a US executive order on AI no you know or the CIA are they going to slow down because there's a US executive order on no they get an exclusion so so who's going to slow down it's like the open source efforts where we can see what the systems are actually capable of it's you know potentially in it like gives open Ai and anthropic like basically a a regulatory leeway to like suppress competition so it me's probably fewer commcial developers of the models um so that kind of thing I think you know extend that analogy across all of the technologies that we deal in uh I think that there is there is political risk and for the crypto asset ecosystem like it it was it really they I think they really tried to kill the Innovation like I think I think there was a a real concern about the impact of it and an attempt to suppress and prevent kind of innovation from occurring and the net result of that is a a lot of um goodfaith people lost money because they you know understood the potential of the technology and then they they had counterparty risk that they couldn't really assess because the government was like preventing kind of like legitimate counterparties to from coming to the table wow darn government Brett thank you so much for your time my pleasure thanks for having me did we miss miss anything I don't think we missed anything well we missed a lot but we don't have enough time in the day fair to be continued then thank you so much how can folks uh follow your firm and uh learn more about you I know you're on Twitter yes uh ark-invest decom is where kind of all of our research lives uh follow me at uh winon arc on Twitter and you know follow actually you should follow all of our analysts are all you know everything that I say is you know based on the great research that they do and that we do together and so um you know I think that you asked how I can be so optimistic I'm optimistic because like we actually do the work to Dimension and and forecast the impact of these Technologies and I think um by forcing ourselves by tying ourselves to the reality of like the numbers of what these things are going to do um it helps to solidify certainly my understanding of potential impact on the world and potential impact on markets and so from a very high level perspective we we think that um you know these Technologies are going to compound over the course of the decade at a 40% rate the value of the technology so we think that two-thirds of equity market cap layering in crypto assets into that is going to be disruptive technology tied in a profound way over the course of the decade up from you know it's in the mid teens percent today uh and so from a kind of like how do I think about asset allocation or time allocation it's like you are better off putting your time resources and energy into understanding using and investing in this stuff than almost anything else that you can do uh right now and so from like a young Talent perspective like what do you do it's like figure out how to like build invest or get involved with this you know from a capital markets perspective figure out how to you know carve out a reasonable allocation of your savings into disruptive innovation because this is you know the the actual innov cycle is accelerating now it's not slowing down and the capital markets are still kind of treating it like you know it's trash we've had a great year but like you know look at kind of uh the way in which like Tesla is underwritten it's underwritten as an automotive company that's not actually the present value of the company in our view at all uh and so there's still um there's plenty that people both don't understand or refuse to Discount because it's over seven years as opposed to over One MH uh and to get long-term wealthy you have to have a long-term point of view wow what a line that's amazing thank you thank you so much e
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