00:00So talk to us about that blurring. How much are investors, institutional, anyone really wanting to get more exposure to private markets right now?
00:07I think it's a core theme that we're seeing across asset classes, both in the equity market and the credit markets, of course.
00:13But as it relates to the equity lens, companies are staying private a lot longer.
00:17It's well understood from 1997 being five years on average and $20 million of sales to 2025, where it's $220 million of sales and 14 years of being a private company.
00:28But the demand is there. The depth of the private markets is there.
00:31I think the growth we're seeing is fueled by great innovation in the private markets.
00:36And so it's a theme that we're excited about.
00:38It's something that we think we're well positioned for as a firm and excited to see what the year ahead brings.
00:43I mean, look, your positioning is showing up in these valuations, $134 billion valuation for Databricks in an almost unheard of Series L.
00:51I mean, is there the depth in the public markets to support the ambitions of these CEOs and the need for capital to continue to expand?
00:58I think it's a really important question.
01:00I'm glad you asked because inherent in every valuation, of course, is it supported by the fundamentals?
01:06Ali and the Databricks management team have done an exceptional job of positioning themselves effectively for the AI wave, making sure that data and that infrastructure layer is well supported and that they're the market leader.
01:16And it shows up in the metrics. They're growing two times the rate of public high-growth SaaS comps.
01:22They're positioned effectively with net expansion rates of 140 percent.
01:26There are no public companies in the software space growing at that level.
01:30So I think that drives the valuation. It drives the demand for the company.
01:34They've also been aggressive in their pursuit of assets on the acquisition side that have effectively positioned them.
01:40So to us, it was a privilege to co-lead the financing. We think the public markets will view this as one of the premier darling assets in the private markets.
01:48And so when they go public, it will be an exciting moment for the company and certainly for us.
01:52There's a few other darling assets out there.
01:54One of them, as reported by the information, is currently fundraising at a $750 billion valuation.
01:59That's OpenAI. That's in your portfolio, too.
02:02Are they fundraising?
02:03So I will let the company speak for themselves on that.
02:06I would say we're very proud and excited investors to be backing OpenAI.
02:11I think Sam and his team time and time again, despite a little bit of the negative news or the challenges associated with it,
02:17have demonstrated an ability to innovate on the product side, to form formidable partnerships.
02:21I mean, Disney and what they're doing there, as well as the partnerships with universities across the countries are emblematic of that.
02:28It's not the first time that there's been a little bit of that focus and intensity of product market fit for them.
02:34And so to us, we think it's a great asset.
02:37We're excited to be investors in it.
02:39And they continue to be synonymous with growth in large language model space.
02:43And so I'll leave it at that.
02:44But it's certainly an exciting journey for the company.
02:46I mean, the same blurring and tussle and mental models are going on in public and private.
02:53Too many big names dominating certain indices.
02:58Too much VC capital really is totally exposed to the AI trade.
03:01How have you talked to your clients and potential future LPs about, well, the economy not supporting what is an AI bubble?
03:08I think there's a few things you have to root yourself in.
03:12And just taking a step back at times and zooming out makes it a little bit easier to appreciate the growth in the private markets and AI in particular.
03:19You go back three years ago, ChatGPT had just emerged on the scene.
03:22We're at a billion monthly active users.
03:24And it is one of the most intertwined assets within a tech stack at both the consumer level and the enterprise level.
03:30You have growth curves being completely redefined.
03:33That's the hardest part, I think, for public market investors is you have companies achieving $100 million of revenue one to two years faster than their public SaaS companies did when they were private at 20 to 30 percent the number of employees.
03:46Think about the compounding effects of that over time.
03:49So, yes, there will be in any tech cycle there are assets that are overvalued.
03:54There's excess.
03:55There are companies that may completely go bust.
03:57But inherent in every single tech cycle, cloud computing, infrastructure, 5G, mobile Internet, there is a new cohort of companies that define those generations.
04:07And we think we're seeing many of those play out in the private markets.
04:09Look, the leading one defining private market valuations at the moment is SpaceX.
04:14We're on tenterhooks waiting for Blue Origin to launch.
04:17And we're going to go back to it in a moment.
04:18But what are your perspectives in terms of where 2026 is going to see really the excitement, the exuberance?
04:25Is it going to be all about generative AI, the models, the LLMs, or more space, more broadly?
04:29I think it's very clear that defense technology and space is having a moment, and appropriately so.
04:35I think the rate of innovation, the Starlink business, just a handful of years ago, there was a lot of speculation on what the monetization profile of that asset would look like.
04:42For us, we are definitely focused on core assets where there's defensibility of spend from the chief information officer layer on the enterprise side, right?
04:50We benefit from J.P. Morgan's breadth of $18 billion of technology spend to drive insight there.
04:55But importantly, cybersecurity, artificial intelligence, those are resilient areas of spend.
05:01Why?
05:01Because the efficacy that you're seeing now from deploying AI in your organization exceeds the cost.
05:07It is very much an ROI positive trade for people now.
05:10So focusing on the right companies, defensible moats, clear and sophisticated management teams to manage the conflicts and competition that comes to the fore,
05:22and then being in a position to back the winners is very much where we're positioned.
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