01:45:32 · Stacy Rasgon, John Coogan, Luca Ferrari
[01:45:32] S6: So it it's it's [01:45:33] S0: It's still a pretty reasonable debt to equity ratio, in my opinion, if you think about that way or debt to cash flow. [01:45:37] S6: For now. Yeah. For now. Yeah. So that's right. And then in terms of, like, the the call the circularity. So I mean Sure. NVIDIA's behind us. They're investing a lot. Yep. They have deals in opening eye. But I mean Jensen's got his fingers pretty much in every [01:45:49] S0: Oh, yeah. [01:45:49] S6: He's he's in every startup. Right? [01:45:50] S0: He's been doing it for a long time [01:45:51] S5: too. [01:45:51] S6: But think about, like, what else can he do with the cash? And and so I'm I'm hard pressed to think of a better usage. And if you we'll see where the numbers go. But if you believe the numbers Mhmm. They're gonna be generating hundreds and hundreds and hundreds of billions of dollars of free cash flow over the next, like, five years. Mhmm. So what can he do with it? He can't do big m and a. Nobody will let him. [01:46:09] S0: Mhmm. [01:46:09] S6: Right? You just nothing's gonna get through any trust. They have a buyback and a dividend, but relative to their market cap, it's it's gonna be de minimis. There's no choice. And so is there anything better than he does except invest and help to grow the AI?
01:46:09 · Stacy Rasgon, John Coogan, Jordi Hays
[01:46:09] S6: Right? You just nothing's gonna get through any trust. They have a buyback and a dividend, but relative to their market cap, it's it's gonna be de minimis. There's no choice. And so is there anything better than he does except invest and help to grow the AI? [01:46:21] S0: Also have a lot of different business That's fine. In terms of m and a. Like, with Microsoft, they buy LinkedIn. That makes a lot of sense in the Microsoft ecosystem. You know, Teams, they grow Azure. Like, there's always different places where they can plug other businesses in. Like, if NVIDIA bought LinkedIn, we'd just be like, what is [01:46:38] S6: But but he tried to buy other stuff. Right? He tried [01:46:40] S0: to buy ARM. You know? Certainly certainly other pieces of this [01:46:43] S6: Could you imagine if he'd been able to buy ARM, [01:46:45] S0: by the way? He'd [01:46:46] S6: be unstoppable. [01:46:46] S0: He'd be unstoppable. [01:46:47] S6: Nobody's gonna let him do anything. [01:46:49] S0: Nobody's gonna let him. Yeah. [01:46:50] S1: How, how important do you think the Chinese market is to NVIDIA? Because we we debate this [01:46:56] S6: quite a lot. And it isn't. In the near at least it's not important to the numbers right now because it's out of the numbers. Yeah. So and and and NVIDIA with even AMD, they they took it out. So that was smart because it's still questionable whether or not they will be allowed to sell. And so from a number standpoint, it's okay. From a strategic standpoint, I I think it is important. And Jensen hasn't hidden it.
01:46:56 · Stacy Rasgon, Jordi Hays
[01:46:56] S6: quite a lot. And it isn't. In the near at least it's not important to the numbers right now because it's out of the numbers. Yeah. So and and and NVIDIA with even AMD, they they took it out. So that was smart because it's still questionable whether or not they will be allowed to sell. And so from a number standpoint, it's okay. From a strategic standpoint, I I think it is important. And Jensen hasn't hidden it. [01:47:16] S1: Second largest computing market.
01:47:17 · Stacy Rasgon
[01:47:17] S6: It's it's more than that, though. So it it is the second largest, and he's talking about $50,000,000,000 of lost opportunity. And over the long term, it's probably bigger than that. Right? I mean, China China's big, but I think it's more strategic. You have to remember the the Chinese developers want to use NVIDIA. They have better products. Right? They do. However, you're not gonna stop China. So China has has, like, companies like like Huawei, for example, that's basically state owned enterprise. And they already have parts in China that have higher performance than what NVIDIA is allowed to sell there. They they do. They burn a lot more power. Chinese don't care. They just throw another plant. But the thing is they're much harder to use. They don't use NVIDIA's ecosystem. It's called CUDA. The Chinese developers want to use NVIDIA's ecosystem. If you don't allow him to sell there, what you do is you potentially encourage those local developers of whom there are a lot to coalesce potentially around a local alternative, like a Huawei, for example, and start to build up potentially over time a more robust eco system in in China. Then then you're shut out. And then the longer term word would be is once it's it's robust in China, does it move out of China? Now do you have a more robust global competitor? Yeah. And so that's why I think strategic is what and he said almost exactly that. He hasn't tried to sugarcoat it. Where I think he gets a little bit of a benefit is, at least with Huawei, the parts because of some of the other US sanctions, they have to make their chips at local companies like SMIC on deficient process technology so the chips don't work as well. They're not as power efficient. I do not think those chips will really be competitive outside of China, where they will be competing on a global basis with much better products from NVIDIA or AMD or or whoever. So I think that helps. Yeah. But ideally, you you and and, you know, Lutnick said this. He what did he say? He said, we wanna get them addicted to our technology. And and Yeah. To your I wouldn't have said it that way, but he's got a lot of things right. Right? We'd like him using it and to have some control over it. And and and if and we're letting that slip away.
01:49:11 · Jordi Hays, Stacy Rasgon, John Coogan, Healey Cypher
[01:49:11] S1: Yeah. [01:49:11] S6: And so yeah. And I don't I don't think it's it's great that he's not able to sell strategically. At least from a number standpoint, it's it's out right now. [01:49:18] S0: I want you to react to this, quote from the CEO of KKR. He says, and candidly, when we read some of these headlines, it's clear that many of us have PTSD from the financial crisis and are looking for what will trigger the next one. Like, where is the next boogeyman? From our standpoint, this market and economy really don't provide a simple narrative like that. What do you think? [01:49:43] S6: I think that's true. And to be fair, I started this job in April 2008 about three weeks after Bear Stearns failed. That that's when I made my move to Wall Street. [01:49:51] S3: Yeah. [01:49:52] S6: And so I was forged in that fire, and I have the financial crisis tattooed on the inside of my eyelids. I lived through it. It was a remarkable time, by the way, to live through Wall Street. Yeah. This is not like that. Yeah. That was People thought the world was coming. But we'll see. Like, if there is an air pocket, maybe it will become like that. But people really thought the world was coming to an end back then. [01:50:11] S0: But [01:50:12] S6: are people looking for the Yeah. Maybe. Right? Always People looking for pattern recognition.
01:50:12 · Stacy Rasgon, John Coogan, Luca Ferrari
[01:50:12] S6: are people looking for the Yeah. Maybe. Right? Always People looking for pattern recognition. [01:50:18] S0: One thing that I go back to on the pattern recognition side is just I feel like for it to feel like there there is a world where there's some massive correction and, like, a lot of the top players see big haircuts. But it's just hard to imagine a big widespread like, with the .com boom, random person on the street was trading .com stocks. With the NFT boom. Everyone had Bitcoin. They were telling you, oh, you gotta buy Cardano. You gotta buy this. You gotta buy that. You gotta buy this NFT. And then in the housing bubble, everyone was like, yeah. I just got a second house. Morton didn't zero down mortgage. They didn't check my income. And so there was a lot of, like, places where just hundreds of millions of Americans could participate in the bubble on the way up and on the way down. Yeah. And here, it just feels harder. [01:51:06] S6: There there's some. I mean, there there's a lot more retail participation, I think, in [01:51:09] S0: market than there yeah. And having [01:51:11] S6: Robinhood and all this. [01:51:12] S0: Yeah. Yeah. Yeah. Know? [01:51:12] S6: And frankly, they they they get a little nasty sometimes. They trade these zero data expiration options. Yeah. So there there's some of that. I don't think it's maybe it's as widespread as as what we've [01:51:21] S5: seen in the past, but there [01:51:22] S6: is is some of some of that.