The AI Trade

…you that we've already seen peak inflation, which is really very, very positive. And again, that's positive for a lot of sectors, a lot of people, consumers, which is 70% of the economy, but it's also businesses and their input costs. So if inflation has peaked and it's coming down... I know it's not at the 2% where the Fed wants it to be, but it's coming down. We were running 2.5% in February pre- war. So if we get back down to that, that's really very manageable, and again, very positive. So I think that there's upside to earnings. In fact, I actually thought this year we would see 10% to 12% earnings growth . We just put up 26% last quarter, and we 're going to probably do 20% this year. I think we are in the early stages of the AI boom. A lot of sectors are benefiting, and at the same time, the consumers hanging in there because they have a job, and wages are actually still around 4%, 4.5%. So a lot is good out there.…From: this video · 2 claims mined from it

…with the launch of Claude Design. So this was a new vertical app that Anthropic launched to compete in the design category. And Figma's founder said that Anthropic had not been completely honest with them, Anthropic's chief product officer had actually even served on Figma's board and didn't resign until three days before the launch of Claude Design. So obviously Figma again felt blind sided by this. And you can see the resulting impact on their stock price. Figma's stock has fallen something like 50% this year while Anthropic's valuation has surged. This is not an isolated example. Anthropic has also launched Claude Science, Claude Security, Claude Legal, Claude Financial, and of course Claude Code, and every single one of these vertical apps expanded into categories that was previously served by companies building on top of Anthropic's own models. And really, if you want to go back to when Anthropic's revenue explosion began, it was with the launch of Claude Code. And how did they know to launch that product? Because they saw that cursor was doing extremely well. Cursor was one of their biggest customers. They created the coding assistant first . They created that category. And Anthropic said, "Oh, like why don't we vertically integrate?" So in other words, they're watching where the value is being created on top of their models. Then they're moving in directly. And this is a formula that I think is…From: this video · 12 claims mined from it

…strong. But let's go back to this supposed crashout by Karp on CNBC. It was nothing of the sort. It was all these legacy media types making that claim. And that's the first clue that he's actually saying something insightful and maybe kind of brilliant. And I think the thing that he said that I hadn't really thought about in quite those terms is he started talking about AI safety in the enterprise and what that really looks like. And what he said is that what technical customers want is control over their compute, their models, their data stack, and their alpha, meaning their proprietary knowledge. They want to know they own the means of production, he said, and it's not being transferred to someone else. And what he's referring to there is that these enterprises are at risk of transferring their knowledge, their know-how, their trade secrets, their customer data to these model providers who might eventually decide to compete with them. Like you said, JCal, and you can see that enterprises are waking up to this threat and they're not happy about it. And I think Karp is exactly right about that. Now, I think this is a really interesting take on AI safety because what safety means for an enterprise is, again, that they get to control their own data, their model weights, their compute, so a frontier lab can't hoover up their proprietary knowledge, their alpha, and turn it into their next product.…From: this video · 12 claims mined from it

…it on a very typical enterprise task, which is you have an old piece of code, you want to migrate it, and you want to maintain it in a new framework so that it's easier and more flexible, pretty straightforward task. And so we ran it and we ran an experiment where we did Claude by itself, then we did US plus Claude, and then we ran it on the best frontier open source model, and then us plus that model. And the data is crazy. So when you use our harness with Claude , it was simultaneously 1.4 x cheaper and 1.5 x faster than just using Empropic Opus 4. 8 alone. But if you wrap the open source model with our software factory, it was 16.4 x cheaper . Now it was three times slower. But you know, you're talking about a couple of extra hours to save 16.4 x. So that one, the slowness, Chamath, is that slowness because of the hardware being served up by Claude? Or is it this is open router ? No, this was all using open router on a very traditional hardware stack. So look, I think the reality is, could that be optimized even further? Absolutely. But my point is, if you take Saksis points, and then if you take Alex Carp's point, and just this actual data , there is a very legitimate question, which is if you are a reasonable company, why are you…From: this video · 12 claims mined from it

…been they're approaching these large companies with large proprietary data sets and saying, hey, if you share your data, we will give you early access, some sort of proprietary value sign this NDA, and you can participate with us. And I think nearly everyone I've spoken with has woken up to the fact that they are basically trying to commoditize everyone's business because fundamentally, if all of the 10s of billions of dollars you as a life sciences company have invested in experiments and product development, and you've generated all of this proprietary data along the way, that data is a true asset of your organization. It's an asset that you've spent billions of dollars developing. And by handing it over to a model company to then combine with other people's data, you are effectively commoditizing the asset that you have the one kind of core differentiation that you have. And so everyone is largely saying no, the way I see this evolving is very much in line with what Alex Karp suggested on CNBC. If you go back a couple of years, I think we all assumed there was going to be this large hub, large spoke model for AI model development and deployment, meaning there would be these very large clusters. These large clusters would be ultimately capital advantage. So those who had the most capital, which is why everyone's raised 10s and hundreds of billions of dollars , would be able to…From: this video · 12 claims mined from it

…leadership by silicon stocks. And if you think about where our heads are at about AI, this makes perfect sense, right? This is actually quite a rational change in leadership because we know for a fact that the next two years is going to be all about building artificial intelligence infrastructure. And we know for a fact that's going to require a lot of memory chips and a lot of networking chips and GPUs and everything else. Those companies are making out like bandits and there's no reason to expect they will stop making out like bandits anytime soon. Whereas the implications of AI for the business models of the Magnificent Seven, in particular Microsoft, Alphabet, Amazon, and Meta, far from clear, could be great for them. Could not be so great, right? And so I would hate to make any predictions about that. And I think the market in general, after having made a bundle of money in those names for years, it's like, what's the next step? And they're spending a lot of money. They used to be free cash flow machines . They're not free cash flow machines anymore, right? And so like part of the nervous top here is about that change in leadership , which I think is super interesting. It's super interesting.…From: this video · 6 claims mined from it

…of momentum from OpenAI to Anthropic, we've seen another incredible flipp ening, but this is one that is geographic. And that is free Chinese models went from 30% of AI traffic to 60% in six months. The dominant AI models are now imports. I mean, the thing that rocked the automobile industry was a product called the Honda Civic. That was sort of a slow moving train wreck over 10 years. This has been 10 weeks, GPU rates are collapsing. The hyperscalers built $300 billion of infrastructure for customers who are switching to deep seek for free. The way to describe this historically is this is the fiber overbuild of 1999. The Chinese model problem is like another problem on top of all of their other problems because I mean, as you pointed out, a lot of these large companies are now switching. I can go through a list of some of them who have switched to Chinese models. Coinbase is now using Kimi, Cursor is using Kimi, Shopify is using Kwen, Airbnb is using Kwen, Siemens is using DeepSeek, Microsoft is now apparently testing DeepSeek. And the reason they're all doing this is because the Chinese models are way cheaper. And we talked about why is that the case? Some say it's because Chinese have cheaper energy and that might be part…From: this video · 6 claims mined from it

…bailout. And that is, according to the Financial Times, they've discussed giving a 5% stake to the US government. And so it seems as though instead of Silicon Valley subsidizing those losses , maybe now just the taxpayers will. And maybe that's the plan. And maybe that's a good idea, because that's what the banks did in 2008. And it didn't work for some of them, but it worked out for most of them. And so you have to think, maybe they see this collapsing. And that's why they go to the government. But either way, both of these pieces of news in the same week, that's very, very bearish, in my view, and seems to indicate that this is a growing bubble that is nearing a point of maybe not collapse, but certainly massive course correction. OpenAI, I predicted this six months ago , that the biggest bailout in corporate history was about to happen, and it was gonna be the bailout of Nadella, Altman, Dario Amadei, and it would be dressed up as investment or growth. It's not, it's a bailout. If the government were to take a 5% stake in OpenAI, great, they're gonna favor OpenAI. They're going to over-regulate their competitors and under-regulate OpenAI. They're going to provide them with protection money and direct access to…From: this video · 6 claims mined from it

…How is anthropic gonna ever monetize its research and development? Especially given the Chinese are massively basically cannibalizing basically the lower end models. So from that point of view already, like you think about as mythos is almost three months and then it's been still remains restricted access wholly. Then usually after three months, like any lead any LN has, it's completely vanished. All of a sudden you've got last week, the big news is that there are at least two Chinese startups in one Japanese startup to have developed AI models with the same capabilities of mythos. So you tell me, how can I get bullish about AI? When basically open AI is seriously in trouble. And in my view, anthropic is not too far behind. So I think from that point of view, again, this is the reason why I don't care about Micron and all these things. At the end of the day, 80% of all AI revenue goes through these two companies, anthropic and open AI. They're the ones who then pay the hyperscalers for computing power. And then the hyperscalers turn around to buy chips from Nvidia. And then Nvidia then goes out and basically buy chips from TSMC and TSMC by Applied Material ASML. But I didn't even date the money, the whole entire CapEx spending is being paid for by open AI…From: this video · 6 claims mined from it

…Let's get some perspective now. Joining me is Garrett Melson, Portfolio Strategist at Natixis Investment Managers. It's great to have you join us. Good morning. - Thanks for having me, Lizzie. - So now that we're at the kind of midway point of the year, what's your take on the market so far in the direction right now? - Yeah, well, it's certainly, to your point, has been a pretty stunning reversal in the second quarter. I think that sets up some interesting things to keep in mind as we move into the back end of the year. When you think about the broad macro backdrop, it's still fairly supportive in here. Growth, in our opinion, we've kind of coined the phrase ho-hum economy for the U.S. here in 2026. It's doing fine. It's not gangbusters growth, but it's certainly doing just well enough to continue supporting solid earnings upside here, and that I think is underpinning the market. The issue is the result of stronger returns in the second quarter, I think has led to some pretty serious crowding within the AI trade, and so it's not necessarily a death kn ell to the sector. What you have certainly seen, going back to the beginning of June, has been a pretty sharp sentiment shift , a little bit of skepticism around the AI durability, and ultimately that started translating to some rotations. I think that ultimately is encouraging. You're not seeing a whole scale liquid ation in investors bailing on the AI trade and moving to cash. They're simply moving to laggards in here, and so that may be a theme that we have to continue working through to work off some of that excess sentiment and positioning, but ultimately I think the backdrop is still fairly supportive into your end. - Are there any indicators that signal…From: this video · 2 claims mined from it

…there's their chief investment strategist and economist Lance Roberts. Every time I talk to you, you get a new title. All right, let's just start with this whole AI.com. Every morning you wake up and someone's making a comparison. I love this though, right? You go back five years into the bubble, right? When you go back to the peak of the bubble before burst, PE ratios went up 300%. Right now they're actually down. Stock prices went up 780%. We're up good, 160%. Of course, there's some stocks that are up 1,000%. Nonetheless, you must deal with this on a daily basis. What are you telling people? Well, there's a couple of things that are very important for investors. First of all, analogs are terrible. And you see these charts going around everywhere. Charles is like, oh, this looks just like 1999. Markets never play out the same way twice. It's kind of like lightning. So take those with a grain of salt. Also, there's just a massive difference . And you're pointing that out there on your charts is that back in the .com bubble, I lived through that .com bubble.…From: this video · 1 claim mined from it

…Once the AI bubble has burst, I'm telling you the US economy is going to hit a break and go into the recession, I would argue. And even a little tiny hint that, you know, the catback story is over, I'm telling you, Gnostics will be down 20% like in no time. There's no doubt in my mind, the US got its ass kicked, in Iran. To me, shocking, as an American, I'm ashamed. Trump decided to essentially concede defeat to the Chinese. This was actually the first proxy war between the United States and China. That if Iran got this far, it had a lot to do with China. I think oil will start hitting higher in about a week's time. I'm pleased to welcome back to the show , David Wu, CEO and founder of David Wu Unbound.…From: this video · 6 claims mined from it

…interview where he where he basically went after the frontier models like En thropic play the clip. Our clients are just to say they're unhappy with the frontier labs is to say I'm welcome at the Berkeley faculty. It's like there's just a level of discomfort and loss of trust. Sam and and Dario. There's nothing more fun than debating Dario and private. So it is I'm not throwing shade at them , but something has gone completely wrong. And the basic view among enterprises in this country is I'm going to chill out and waste my time with tokens. I'm going to get no value. And they're going to get my IP. When the Department of War goes to you and says, I need this application, do they get to control the weights to do it or do you get to control the weights? Are we really going to outsource the battlefield of this country to the consensus view in Silicon Valley ? That is effing insane. All right. And so some folks refer to this as a televised nervous breakdown. We here at all can call that Alex Carp on a Tuesday. And we talked about this, Chamath, Sachs, Friedberg. We talked about this a whole bunch back in February. I coined the term intelligence sovereignty here. Here's your victory fact. Do I want to give all of the secrets in…From: this video · 12 claims mined from it

…that I've seen in my lifetime. We usually had the country run by a consensus and a check in balance system and a separation of powers and that sort of thing. So I'm not in love with it, but I'm not against it. I think we have to recognize that Chinese have pumped their private sector economy with the help of their federal government. I think that makes total sense. Anthony, you've been doing a lot of work recently about the negative sentiment around AI. If you take away the market and investor gains for a moment, the public sentiment around AI has not been super positive. How do you think that impacts markets and the investment case for AI if it's hard to convince everyday Americans to get on board with it? I don't think it's had much of an impact. I think that the market is ruthless and the market is opportunistic and the market sees, in a case like anthropic and open AI, it sees the heavy spend and it sees the near-term losses, but it sees the long-term very bright, very rosy outlook. The AI companies remind me of Amazon. So I'll just take you back to the early stages of Amazon. Jeff Bezos came out there and said, "Hey, for a decade, I'm going to lose money. Every year, I 'm going to print a loss of money. I'm going to be borrowing. I'm going to be taking in bonds to buy…From: this video · 7 claims mined from it

…a, this apocalyptic dance is the wrong dance. We've done this before. We said we were running out of oil. Never ran out of oil. Tom Malthus in the 1840s said we're going to starve ourselves due to population growth. We got big and fat due to food technology. I don't buy the AI drama, but I do love listening to the booze at these commencement speeches when these geniuses bring up AI. I mean, the students, younger people definitely do not seem on board with it , generally speaking. Anthony, you mentioned that you don't know how big the bubble is going to be. Do you think we are currently in a bubble? Is that a today moment? Yeah. I mean, I don't know the answer. We probably are in a bubble. We'll know the answer. You know, bubbles work. We'll know the answer after the bubble bursts. If you asked me in February of 2000, 26 short years ago, are we in a NASDAQ tech web one bubble? I was like, yeah, maybe. I don't know. And then a month later, baboom, we went down 40, 50, and eventually 60 percent. And it turned out we were in a big bubble. And what do we know about bubbles? When the bubble bursts, it is absolutely ruthless and it's punishing. And so you have to invest wisely on a distribution…From: this video · 7 claims mined from it

…benchmark this year, which is a pretty historic number on large cap blend, 60 %, which is not as historic. So today, I would say growth managers probably missed a lot of that semi and DRAM rally. I think they're going to be chasing it in the second half, which is why I would probably stay bullish. I'm anxious about this market in a lot of ways, because I look at, you know, the Shiller PE as an example, which is extremely high right now, basically coming up on dotcom territory. And I guess there's a distinction between the forward earnings and the trailing earnings that I'm starting to feel is important. And that is a lot of these earnings that we're seeing that they hinge on these contracts with these AI companies whose ability to actually pay out on those contracts. I think it's not unreasonable to say that they should be at least questioned , open AI in their spending plans, ent ropic in their spending plans, SpaceX, etc. And so at the same time, we've also been looking at some of this research that was coming out recently that Goldman actually confirmed, which is that a lot of the earnings that we were seeing, especially from big tech companies. A lot of those earnings reflect the increase in their stakes in their private investments in AI companies,…From: this video · 8 claims mined from it

…it doesn't earn any money and so you know all it would take to if that if that hope were suddenly uh to get shattered by something uh it were you know the stock market would crumble and what about we talked about bubbles earlier and the bubbles the three bubbles leading up to 1873 what about the ai bubble do you believe that it is a bubble first of all what similarities can we draw well it it's a it's a it's certainly a boom and it um and it 's uh but um i suppose the the way to think about it is if you take the railroads in the u.s the amount of money that was going into railroad construction is about the same as the amount that's going into the construction of data centers and all of the infrastructure behind ai um if that were to stumble or even to take a pause if people were to suddenly say so what happened in the railroad case of the railroads is 500 new railroads were created and by the end of 1872 only a hundred were able to pay dividends and their profitability started declining and they were all…From: this video · 3 claims mined from it

…take to if that if that hope were suddenly uh to get shattered by something uh it were you know the stock market would crumble and what about we talked about bubbles earlier and the bubbles the three bubbles leading up to 1873 what about the ai bubble do you believe that it is a bubble first of all what similarities can we draw well it it's a it's a it's certainly a boom and it um and it 's uh but um i suppose the the way to think about it is if you take the railroads in the u.s the amount of money that was going into railroad construction is about the same as the amount that's going into the construction of data centers and all of the infrastructure behind ai um if that were to stumble or even to take a pause if people were to suddenly say so what happened in the railroad case of the railroads is 500 new railroads were created and by the end of 1872 only a hundred were able to pay dividends and their profitability started declining and they were all competing against each other uh so the…From: this video · 3 claims mined from it