00:00Do you think market conditions are going to prove challenging given each of these companies, you know, could potentially have
00:07that, you know, vacuum effect?
00:11I mean, look, in my view, I mean, this is really it's a tidal wave of IPOs that are coming,
00:16but they're all at the heart of the AI revolution.
00:19And I think to some extent, when you look where we are, we continue to believe this AI party started
00:259 p.m. to about 1130 p.m. Party goes to 4 a.m.
00:30This is this is going to continue to play out. Trillions of dollars being spent.
00:36Open AI, Anthropics, SpaceX front and center. I don't view this as any sort of speed bump for this market.
00:44Dan, we had an interesting piece on our MLive blog talking about the self-limitation of the success for some
00:51of these companies and that the raise by Alphabet Google is an indication of that because of the sort of
00:57stellar outperformance in its share price, resulting in increasing tax liabilities as well.
01:03Do you look at that as perhaps an underserved part of the risk profile?
01:09Look, I mean, there's always going to be risk with everything happening here.
01:13But with with companies are going to have to spend, I mean, what, a trillion dollars of CapEx next year
01:19for big tech.
01:20So when you look what Alphabet's doing in terms of the raise, you'll see more and more of it in
01:25terms of debt raises and potential stock sales.
01:28There's going to be a thing around around the edges.
01:31But the reality is that companies cannot watch this from the stands.
01:35They got to dive in the deep end of the pool.
01:38And the reality is, is that, you know, it's part of our view like Nasdaq 30,000.
01:43We continue to see a multi-year bull market playing.
01:47And I think the bears will continue to watch this AI revolution and bull market in those hibernation caves because
01:55they can't see AI in spreadsheets.
01:59Dan, let's talk a little bit about those bears.
02:01I mean, when's a reasonable timeline for companies like OpenAI and Anthropic to start actually making a profit?
02:08Look, that's the balance.
02:10I mean, because you're talking about companies where, look, if you go back to the early days of, you know,
02:15Meta, Amazon, obviously so many of these tech companies, it's a balance.
02:19At one point, you have to show profitability ultimately in the next few years.
02:24But for investors right now, they're focused on growth, compute.
02:29How do you make sure stakes in the ground that they're going to be core winners of the AI revolution?
02:34And look, it goes to SpaceX as well.
02:36You know, as we see this play out in the markets, I think investors, they're looking around the corner.
02:42They're trying to see what's around the corner, what ultimately the TAM, the total adjustment market looks like.
02:48And you start to look out three, four, five years.
02:52What could the valuation be?
02:54And I think that's how investors are balancing this, you know, in terms of what we're seeing in this fourth
02:58industrial revolution.
03:01Dan, ahead of these listings, there's been a pretty interesting debate about the rule changes that indexes have been bringing
03:07in to allow these to happen, particularly around seasoning, free float requirements, also weightings on the index.
03:14Do you have a view on all of this and how it might affect price action when these do come
03:19to market?
03:20Yeah, look, this is all unprecedented.
03:22And obviously, with the indexes, it's been a hot button issue relative to, you know, even when it comes to
03:27SpaceX and how many investors, they're going to own it one way or another, whether it's through index funds and,
03:32you know, through pensions and a lot of other mechanisms.
03:36Look, I think the reality is when you have three titans like this coming public, basically in the course of
03:44a few months, you're going to have to see some changes.
03:47And I think that's why you saw some of those index changes.
03:49And I think ultimately those are the right moves.
03:53There could be criticism as it plays out.
03:56But I think this is going to be, I don't view it as a test for the market.
04:00I actually view it as more transparency for the market with SpaceX, OpenAI and Anthropic now being public.
04:10So you don't think the depths of markets will necessarily be challenged by these mega IPOs, Dan?
04:16Like, I wonder whether there's so much demand and exuberance here.
04:21First of all, you know, who's got the early advantage, I guess, is one of these going to be stronger
04:26than the others?
04:27And second of all, does that just increase the concentration even more into these companies?
04:32What does that mean for the rest of the broader AI trade?
04:35Yeah, it's a great question.
04:37Call it, what, $7.5 trillion, $8 trillion, you know, in terms of, you know, the money markets.
04:44I think as it all plays out, could there definitely be some oxygen taken out on some names because of
04:52these IPOs?
04:52Yeah, that's possible.
04:54But I think when you look at it after the call to, you know, the weeks or the months as
05:00this navigates,
05:01for big tech, they need Anthropic and OpenAI to be successful.
05:06From NVIDIA to AMD to Microsoft to Amazon.
05:09And then when you think about where SpaceX plays and just the view of ultimately AI in space and our
05:16view of data centers in space, you know, before 2020 and 2030.
05:21This, the stronger it gets stronger, but it's the ripple effect across tech.
05:26And I just continue to believe this is truly a fourth industrial revolution.
05:31This is not a top.
05:32And that's why I view it's a 96, 97 moment, not 2000 bubble moment.
05:40Dan, who's going to get left behind, though?
05:42Because we're seeing a big divergence here between the performance of semiconductor manufacturers, chip makers, and software not doing so
05:50well.
05:50But we heard from Jensen Huang at Computex this week saying, look, it's a great time to be a software
05:54company.
05:55Is it really?
05:57Well, look, go back to the SaaS apocalypse, right?
06:00In terms of, I think, many of those, and we've talked about way oversold.
06:04And you're seeing cybersecurity across software, looking at names like Oracle and others.
06:08Look, there's going to be losers.
06:10And I think that's why, I mean, like when you look at, let's say, a name like Intuit.
06:15And that's a good example of a company.
06:17They're not on the right side of this trend.
06:18And Adobe, they're trying to change their tune.
06:22But look what Dell's done.
06:24Look at HP.
06:25So you're starting to see, I mean, look at Intel.
06:30I mean, you're talking about one of the comebacks of, really, of the last 30, 40 years in terms of
06:35what we saw with Intel.
06:37It can be done.
06:38But guess what?
06:39Have you watched the AI revolution on your treadmill?
06:43I mean, you could join typewriter companies back, you know, in the 90s.
06:51Dan, you talk about this being, SpaceX IPO, I should say, being a test for investors' appetite for space.
06:57Is it a space company, or is it going to be more of a bet on its AI ambitions?
07:01I view it more as an AI.
07:03I view it as AI disruptive tech.
07:05Now, of course, space, when you think about Starlink and obviously satellites and everything that they're doing.
07:11But why investors would pay this?
07:14It's about AI and data.
07:16And it's our view.
07:17I mean, you saw, obviously, SpaceX and XAI.
07:21But we believe, 2027, more than 80% chance that SpaceX and Tesla ultimately merge.
07:29Because I think that's the next step relative to AI and data.
07:33I think that's the next step.
07:34I think that's the next step.
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