00:00So let's talk about productivity and whether you really see a productivity boost from AI.
00:05If I were being optimistic, I'd say, look, the last tech trades we got excited about were around social media
00:10and the Internet of Things.
00:11And we got excited enough about those. And did they really ever threaten to deliver a productivity boom?
00:16But maybe AI really will. You're not a believer.
00:18I do think there's a productivity boom from AI, but it's how big of a one.
00:22We're pricing an extraordinary one.
00:24We're pricing that these companies are all going to make an extraordinary amount of profit in the same overlapping sector
00:30like Anthropic, ChatGPT, Gemini, XAI.
00:34They're all going to completely dominate this space.
00:36They're all going to take in a whole load of revenues from all these other industries,
00:40even though these industries don't make enough money on the projections to pay all these companies, all those made of
00:44earnings.
00:45And there's a real productivity boom. But how much of one and how quickly is it coming through?
00:49It's really hard to define. I think it's the key question.
00:51And when are we going to get that answer? And because that's the kind of earnings rug pull at some
00:56point.
00:56I think at the moment, you know, there's real earnings being made there, but it's the projections going out that
01:00really kind of worry me.
01:01So at the moment, I worry that we're conflating the fact that we can produce much more with actually value
01:06added.
01:07And that's why I don't think we're really getting it.
01:08Google Ads overnight is going to raise 80 billion, going to get the Anthropic IPO.
01:12They're all coming. These are massive risk transfer exercises.
01:16How do you feel about them?
01:17Well, you know, that goes into the point that this is such an interlinked system.
01:21We've talked about this a lot, right?
01:22They're all, you know, co-investing each other, co-financing each other.
01:25But also the fact is a lot of the incremental improvement in profit of the big, you know, meg cap
01:31tax is the increase in share value of their investments in these other.
01:35In each other.
01:35It's like, you know, Amazon's profits get boosted by the fact that its Anthropic share, you know, goes up X
01:40percent.
01:40And that means that when there's a problem, this is just going to be so bad because, you know, after
01:45the GFC.
01:46There is going to be a problem, right, at some point.
01:47There's definitely a problem at some point.
01:49But after the GFC, we kind of, the one bastion of like good kind of financial strength were the mega
01:56cap tech.
01:57You know, they were these kind of cash machines and they didn't have a massive amount of debt.
02:01And now they're suddenly building up their debt.
02:03Now, again, they're still pretty strong.
02:04There's not a sudden problem about them.
02:06But we're suddenly like we're really pushing this to the limit.
02:08Now, does that push to the limit for another six months, for a year or something?
02:11Like I, up until about a few weeks ago, I was like, it's at least another earnings season away.
02:16And whenever you get to another earnings season, you go at least another earnings season because it's going to be
02:19an earnings rug pull.
02:19But I have to say I'm no longer as complacent about the fact that it keeps on going forever because
02:23I really think we're just seeing an extraordinary euphoria.
02:25I think that was Mark admitting he was complacent.
02:27Yeah, yes.
02:29Maybe we need to put a pin in that.
02:32But we're talking about funding that's going towards, in many cases, data centers that suck in as much energy as
02:37a small city.
02:39And we're looking at energy.
02:40We're looking at Brent, right, at about $94 a barrel.
02:42So the Strait of Hormuz is closed.
02:44$94 a barrel.
02:44Data centers need energy.
02:46Increasingly in the U.S., they're turning to oil and gas.
02:48But there seems to be a lag there.
02:49How comfortable are you with the oil prices right now?
02:54Should we draw that connection to the A-strips?
02:56I'm very uncomfortable because the front contract's not really the big issue.
02:59It's the December contract, right?
03:00So December oil prices are still above $85 a barrel for December Brent crude.
03:05That's more than 35% above the one-year average price.
03:08That is a major inflationary shock coming through.
03:10And everyone kind of talks about fiber optic cables from the dot-com bubble.
03:12But they have much longer use case, right?
03:15These are like chips that are going to have to be usurped by better chips within only a few years,
03:18even though we've changed the accounting on that conveniently.
03:22Bloomberg Markets, what a joy to have you in the studio.
03:24That was him with jet lag.
03:25That was a lot of energy for jet lag.
03:27It's even better.
03:28I'll be a benchmark.
03:29I'll try and be a benchmark.
03:30What does that come from?
03:31We all need to bottle that.
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