01:52:24 · Jordi Hays, John Coogan, Gavin Baker
[01:52:24] S0: has be that. [01:52:25] S1: It's over or or we're back. This is the best thing ever in the world. Because then we can have a debate. At least you took a stand. Yes. Yeah. It's great. [01:52:31] S2: Yes. [01:52:31] S1: Jordy mentioned, getting sharp on bio, starting to think about opportunities there. How deep have you gone in the AI stack? I saw a a funny post that was like, you could spend all your time thinking about OpenAI and Anthropic and Google or... And then, you know, meet all the neo clouds and, meet Lynn and Tuan and figure out what's going on in the private markets, or you could just buy copper. And you could just sit there and hold copper. Right? Because, like Yeah. It's almost a perfect proxy or something like that. But how far have you gone down into energy infrastructure, commodities? Like, how how sharp are you on those? How how relevant or interesting is the... Are those markets to you, in this world since they do seem adjacent? [01:53:12] S2: No. I pay close attention to all of those. I ran a diversified fund in prior life for nine years. You know, I was an energy investor. Yeah. You know, natural resources. I always... Many years, did would do like kind of marketing meetings with the with the gold analyst at at at my my prior employer Fidelity. So I'd always, you know, knew about the merits of gold from a portfolio construction perspective would always have it in the fund. By the way, just because it triggers people, I wanna say it. I find it so amusing how upset gold bulls get at the idea of asteroid
01:53:12 · Gavin Baker, John Coogan, Jordi Hays
[01:53:12] S2: No. I pay close attention to all of those. I ran a diversified fund in prior life for nine years. You know, I was an energy investor. Yeah. You know, natural resources. I always... Many years, did would do like kind of marketing meetings with the with the gold analyst at at at my my prior employer Fidelity. So I'd always, you know, knew about the merits of gold from a portfolio construction perspective would always have it in the fund. By the way, just because it triggers people, I wanna say it. I find it so amusing how upset gold bulls get at the idea of asteroid [01:53:47] S1: mining. Like, it is the idea of asteroid mining. Oh, yeah. [01:53:54] S2: No one no one has ever been... I've never gotten more hate [01:53:59] S1: Yeah. [01:53:59] S2: Than from the gold crowd about the idea of asteroid binding in the in the asteroid [01:54:03] S1: space.... That's so funny. [01:54:06] S2: I mean, it was like, talk about a challenge to your world's view. Wait. [01:54:09] S1: Are are they mad about that? It's it's one of those things [01:54:11] S0: you have to... Like, you need to imagine technological disruption. Right? Like Oh, look at the diamond industry. Yeah. Right? [01:54:19] S2: Totally. Yes. Absolutely. If you [01:54:20] S0: understood that that technology disruption was possible, you probably built labs, like, you know, twenty years ago.
01:54:20 · Jordi Hays, Gavin Baker, John Coogan
[01:54:20] S0: understood that that technology disruption was possible, you probably built labs, like, you know, twenty years ago. [01:54:28] S2: You would have done something different with that, you know, with the diamonds in your family. But but as far as... I mean, I do... We have spent a lot of time on, like, energy, on the industrial infrastructure, on on natural resources, but we have not made it a big part of the portfolio. We've done some things in private markets as far as trying to help with rare earths. [01:54:53] S1: Mhmm. [01:54:53] S2: And but this is not through acquiring minds. Yeah. It's more you know, the problem with rare earths, it's not that they're rare, it's that refining them is a very dirty process. So we we've we've you know, that we've invested in a company that you know, has a chemical process for refining rare earths and you know, I actually think DARPA has done some pretty smart stuff. Like they kind of have a lot of different efforts around this. But yeah, I mean I try to pay as close attention to all of it as I can because you you know, as an investor, you you you never know where a weak but important signal is gonna come from. And so I wanna cast as wide a net as possible. Mhmm. But then also kind of focus maybe the portfolio on the areas where I do feel like maybe we have the the biggest competitive advantage as a firm.
01:55:44 · John Coogan, Gavin Baker
[01:55:44] S1: How are you thinking about the evolution of, like, the the marginal capital decider sort of changing in 2027 potentially? Like, if you go back a couple of years, you have essentially, like, seed stage VCs making bets on these AI labs and then eventually some, know, more scaled up venture firms being important capital partners. Some of them have taken board seats, but they are not deciding the race now. It's big hedge funds, pre IPO rounds. But we're coming up to a world where the fidelities of the world, the insurance agencies are gonna be involved, and the insurance funds and sovereign wealth funds are gonna be increasingly involved in financing the build out. Like, what does the next year look like from a perspective of, like, how we get the big dollars into the AI build out? [01:56:36] S2: I mean, I think you named all the big dollar sources. [01:56:39] S1: Yeah. [01:56:39] S2: And something that I think is pretty underappreciated is, you know, American mutual funds. [01:56:44] S1: Okay. [01:56:44] S2: You are limited in the percentage you can hold in a liquid asset. [01:56:48] S1: Sure. [01:56:49] S2: And so SpaceX and Anthropic [01:56:53] S1: Yep. [01:56:53] S2: Going public [01:56:54] S1: Yep. [01:56:55] S2: Is actually gonna free up a huge amount of buying power [01:57:00] S1: Interesting. [01:57:00] S2: In private markets [01:57:02] S1: Yep.
01:57:02 · John Coogan, Gavin Baker
[01:57:02] S1: Yep. [01:57:04] S2: Once those are fully unlocked because they have to be public and unlocked.: Interesting.: So I think you will see mutual funds, you know, and they they they've always been involved. You know, my former colleagues, Capital Research, Price, M Sam, G Sam, you know, Franklin Templeton. If I forgot anyone, I'm sorry. I love you all. But like they've been they've been pretty involved. I mean, the sovereigns have been very involved, particularly, you know, particularly the ones in the GCC and particularly the ones in The UAE. Yeah. Like MGX. Mubadala. Mubadala, all the sovereigns there. I mean, Atreides and Valor, we co led Crusoe with Mubadala. [01:57:48] S1: Yeah. [01:57:48] S2: So I think the The UAE in particular has been extremely front footed [01:57:53] S1: Yeah. [01:57:54] S2: With all their sovereigns with respect to AI. Yeah. [01:57:58] S1: And now Apollo's taking a stake in Mubadala, which sort of completes the the cycle. [01:58:04] S2: Yes. Yeah. But I mean, that that's gonna have to evolve. But it's also I do think we're probably getting... Has these underpriced... So all these clouds, they signed contracts at well below what are below market values. And has those contracts reprice higher? Has they bring on more compute with more spot like we discussed with, you know, the same thing that CoreWeave is is is trying to do. I do think you're going to see... Like, there's a pretty big acceleration in the clouds last quarter. [01:58:42] S1: Mhmm.
01:58:42 · John Coogan, Gavin Baker, Jordi Hays
[01:58:42] S1: Mhmm. [01:58:42] S2: And, you know, forget relative to expectations this or that, but I think you're gonna see a pretty continuous acceleration in the sum of the big hyperscalers cloud revenue growth, the neo clouds, that number is just going to continue to accelerate. And then, you know, it's it's dropping down at very high margins so that, you know, operating cash flow is following. And then you're gonna be able to, I think, finance probably more than people think of the 2027 build out out of cash flow. Like I don't know if we've seen the peak of external financing but I think we're getting close. [01:59:27] S1: Yeah. Yeah. That's... [01:59:29] S2: And that'll be really helpful. [01:59:30] S1: Totally. Yeah. No. No one can complain about that. That's just, yeah, investing in the future. [01:59:34] S0: AI skeptics will be... In a bad place. In a horrible place. [01:59:39] S1: We're gonna have to check on [01:59:39] S0: check on them. For sure. You're gonna have to go around. [01:59:42] S2: And look, maybe I'm maybe I'm wrong and, you know, but, like, I will change my mind when the facts change and I'm just gonna try and keep calling balls and strikes. And then trying to, you know, be an advocate to help understand ordinary Americans that this technology can and should be awesome for them. [02:00:00] S1: Yeah. Yeah.