01:02:56 · Will Manidis, John Coogan
[01:02:56] S3: Yeah. I mean one of my favorite pieces of push back we got five minutes after we published the essay. It's a 140 pages. We got an incredible six page push back generated by AI, which means criticism itself is, you know, contained within the cast net of the models. Yeah. Look, it's not a rosy picture, but it's a picture that I think is inevitable. Technology progress has never been a thing that has happened easily. Technology progress has never been a thing that has diffused into economies without some degree of upset and turmoil. I think any kind of positive AI futurism is just going to have to process that these things have drag on effects. We've certainly seen pushback on how dark pieces of the piece are. We do think this technology will be massively destabilizing for Southeast Asia in particular in a way that is not rosy. And we've also seen pushback on particularly where command economics will happen. I think our exuberance for things like hyper liquid are not universally shared. I do think hyper liquid is an important primitive for where we're going, but certainly pushed back across the board and really fun to engage in it. [01:04:05] S1: Yeah. How are you taking this thesis to some of those more adjacent, less like bottleneck trades, but still like real world economy businesses? I'm thinking about like trucking, home building, lumber, things that aren't in the path of the data center construction, but aren't really affected by AI in an obvious way in the short term. How do you think about those?
01:04:05 · John Coogan, Will Manidis, Jordi Hays
[01:04:05] S1: Yeah. How are you taking this thesis to some of those more adjacent, less like bottleneck trades, but still like real world economy businesses? I'm thinking about like trucking, home building, lumber, things that aren't in the path of the data center construction, but aren't really affected by AI in an obvious way in the short term. How do you think about those? [01:04:29] S3: Yeah. I mean, like, a really great example trade was Thrive buying ADT. Sure. Sure. Right? ADT probably has the greatest sensor network on Earth. Right? Cameras, more infrastructure [01:04:41] S1: Yep. [01:04:41] S3: On the edge being able to capture novel data than almost anyone Mhmm. Else has. And I think the reaction to that has been very telling Also between who realizes. Yeah. [01:04:49] S0: Also, think that the upsell opportunity for ADT, I I believe really strongly that like robots are are gonna have like home security applications before they have like laundry applications. Mhmm. It just feels like much easier to... For a robot to like make it more difficult to break and enter a home than it is for a robot to be like extremely effective at like cleaning... [01:05:12] S1: Yeah. Not breaking your wine glass. Right.
01:05:12 · John Coogan, Will Manidis, Tyler
[01:05:12] S1: Yeah. Not breaking your wine glass. Right. [01:05:15] S3: Like one... Mutual friend in the group chat this morning. I'm sure you saw it. He was in San Francisco asking people why they bought unitary robotics and this kid who had spent like $6,000,000 of his seat around buying unitary robots. Friend asked him what he has done with it and he said, don't really know. The robots can just kind of karate chop me. They can kick me, but they can't really do anything else. And, you know, Jeremy's riff on this. It's like, you know, singularity is here. Right? The robot can beat you up. Who knows what else it can do? So certainly, like, a karate chopping robot kicking people is probably the first use case. But like you have to be a d p... ADT pill even on the sensor modalities. Like, even if they're not able to get any lift out of the core business, that has to be the most valuable data set in the world. [01:06:00] S1: What's your view on interest rates in this neo dollar inflationary regime? [01:06:06] S3: Well, you can certainly track the great stagnation ending in treasury rates. Right? Like, you can literally look at the treasury yield curve and see kind of the twenty year stagnation that we lived through. [01:06:17] S1: Was it twenty or was it fifty? I feel like people go back to 1979 often or, like, [01:06:22] S2: forty years. I mean, I feel like the [01:06:23] S3: last time rates were at this level... I mean, yeah. Certainly, if if...
01:06:23 · Will Manidis, John Coogan
[01:06:23] S3: last time rates were at this level... I mean, yeah. Certainly, if if... [01:06:28] S1: Yeah. We did have high rates in the nineties. You're you're correct. High rates in the... But but at the same time, like, the stagnation thesis starts with, like, the moon landing in many tellings of it. Right? [01:06:36] S3: It's probably true. Probably not, you know, not adequately. We didn't have the Bloomberg terminal then, [01:06:39] S1: so it probably [01:06:40] S3: took twenty years to price in or something. Right now, Twitter. [01:06:44] S1: Sure. [01:06:45] S3: But certainly, like, if if the rate of technology progress continues at the rate that we think it will, then rates are gonna have to go much much higher. [01:06:52] S1: Yeah. And is that a crowding out effect, like just piling into AI investment that's driving up rates or something that's going on with the neo dollar specifically? [01:07:00] S3: I think partially neo dollar, partially I think a thing people have not totally processed is that when the risk free rate increases, the rate that risk demands does not increase linearly with the increase in the risk free rate. These things are actually exponentially related. So in a world where kind of yield increases two x, you may see a four to five x increase in risk rate on top of that. But certainly, just there's so much productive use for dollars at this point, where even the data center build out alone could saturate the monetary supply. Like, it's it's just... It's really important to be clear eyed about where all these dollars are going to go.
01:07:00 · Will Manidis, John Coogan
[01:07:00] S3: I think partially neo dollar, partially I think a thing people have not totally processed is that when the risk free rate increases, the rate that risk demands does not increase linearly with the increase in the risk free rate. These things are actually exponentially related. So in a world where kind of yield increases two x, you may see a four to five x increase in risk rate on top of that. But certainly, just there's so much productive use for dollars at this point, where even the data center build out alone could saturate the monetary supply. Like, it's it's just... It's really important to be clear eyed about where all these dollars are going to go. [01:07:37] S1: How do you think the shape of the median or average firm changes in America or globally?
01:07:37 · John Coogan, Will Manidis
[01:07:37] S1: How do you think the shape of the median or average firm changes in America or globally? [01:07:46] S3: We think there will be a lot less public companies in The US. A piece we developed at the end of it is what we call the forced settlement, which is if you can think about all of history as negotiated compromises between management, capital, and labor as kind of the three countervailing forces that make up the firm. Capital and management are going to become much more similar over time. You're going to see smaller management teams that are comped as if they are capital. You already see this with things like Meta where you have Alex Wang, basically a $20,000,000,000 employee. Certainly not a down, you know, 20,000,000,000 employees. Yeah. And you're going to see labor leave the firm, right? In the same way that The US offshored in the nineties and two thousands. I think we're going to see an offshoring two models, right? Maybe an onshoring into data centers Mhmm. Which will mean that firms will have probably much stronger but much leaner balance sheets as they push labor out of their doors and onto the models. And that means that capital management can begin to merge. [01:08:47] S1: And do you buy that returns [01:08:49] S3: to scale are really high. [01:08:50] S1: Yeah. Do you you buy that there will be more firms in the future?