00:00Let's talk now to Joshua Mahoney, Chief Market Analyst at Scope Markets.
00:04Good to see you, Josh.
00:05So, this is the first major new generative AI company to go public,
00:09and its performance suggests there is an appetite for this kind of thing from investors.
00:15Yeah, undoubtedly so.
00:16I mean, look, ultimately, this is the first opportunity to be able to buy into one of these large language models.
00:22Of course, we've all been talking about the likes of OpenAI and Anthropic over in the US,
00:27but whilst they seem to be gathering funding from some of their competitors
00:32or some of the companies they work alongside, it hasn't actually seen them go to market.
00:37This is an insight into the kind of demand that we're likely to see for them and some,
00:43but certainly it provides investors with the opportunity to be able to get in for one of the companies
00:50that perhaps down the line we might say could be a market leader.
00:53We just don't know exactly how things are going to settle and who's going to win out at this sort of early stage of the AI race.
01:00I mean, at this point, it is still an unprofitable company, isn't it?
01:03How do you assess it compared with some of the other AI firms we've seen debuting recently,
01:07more threads, Biron, for example?
01:11Well, I mean, look, ultimately being unprofitable as a tech company is part of the course, right?
01:17I mean, it's many of the major companies now that you now look at,
01:21and they're absolutely huge multi-billion or multi-trillion dollar companies started off as loss-making enterprises.
01:27That's not necessarily going to be too much of a concern over the near term.
01:32Certainly, I think the fact that over in China, some of the expenditures and the costs aren't anywhere near the kind of level seen over in the US
01:40will be attractive to many, and the willingness to try and expand out across the Asian region in particular,
01:47but also across some of the Middle East and Europe, means that perhaps this company, yes, it's making losses,
01:55but certainly the expenditures, nothing like what we're seeing over in the US,
01:58and therefore it maybe can be perceived as a lower risk play compared to some of their US competitors.
02:04Another potential headwind facing all AI companies, Jepu in particular, the changing trade environment.
02:13There are reports that there could be curbs on the use of NVIDIA chips on the way.
02:19Well, I mean, look, it's open to China, then they take them away,
02:23then suddenly Donald Trump says that they can sell the Blackwell chips.
02:27I mean, you know, it's not a great environment, quite frankly, for anyone to make investment decisions.
02:32You could say that as soon as they allow the sales of NVIDIA chips,
02:37suddenly the Chinese companies could just buy a huge amount of them in preparation for him to lock them off again once trade talks go sour.
02:46But also, I think NVIDIA and the US are well aware of the fact that if they completely lock it off,
02:52then the Chinese are likely to have greater emphasis to develop their own products.
02:56And if they catch up, then suddenly you don't necessarily have the US as any key part of the supply chain
03:03when it comes to the Chinese AI infrastructure build-out.
03:07Something that Jepu has already done, of course.
03:09We should say this isn't the last of the AI IPOs.
03:12More to come, including one later this week, Minimax.
03:15Yeah, I mean, look, this is going to be part of a major theme, probably for 2026,
03:22because whether it comes to the Chinese AI names,
03:26whether it comes to the large language models in the US,
03:30at some point they're going to have to likely come to market.
03:33And, you know, of course, we've come into this year off the back of a period
03:36where everyone's wondering whether the AI race is over.
03:39Suddenly you start to see these companies that are only just coming to market,
03:42and they still have a long way to go, a lot of growth to build on,
03:46and a lot of profitability to prove out.
03:49But certainly I would say that this really is a reminder of the fact
03:53that it's still sort of first innings when it comes to AI for many of these companies.
03:58Joshua, great to talk to you.
04:00Thanks so much for coming back on the program.
04:01That's Joshua Mahoney from Scope Markets.
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