Algebris Investments CEO on 'Likelihood of Significant Correction' in AI

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00:00AI valuation today requires $2 trillion revenue in 2030.

00:06The sum of the revenues of the MAG-7 ex-Tesla, it's lower than that.

00:14So that means someone is telling me that by 2030 we're going to find another MAG-6.

00:21Good luck, I tell you.

00:23You can keep your money there, certainly not mine.

00:25And third, the big risk, as Mark Krohn has said, of overengineering passive investing

00:38means has now become a function of money printing.

00:43Basically, as governments print money and people receive checks, it all goes into passive,

00:48it goes into seven stocks, and that, in my view, will have perverse ramification on the

00:54economic development.

00:56I think as a result today, a smart allocation is to reduce exposure to the MAG-7.

01:03Secondly, increase allocation to the rest of the world on a GDP basis.

01:10Why?

01:11Because if we're not going to find $2 trillion revenue to justify the AI revolution, which

01:18I think is impossible by 2030, given the level of public debt around the world and where taxes

01:23need to go to pay for this debt, the likelihood is we're going to have a significant correction.