00:04:41 · Jaimin Rangwalla
[00:04:41] S0: Yeah. So I think that we are constantly rethinking how we're covering stocks, how we're covering themes, how we're covering subsectors, within the theme. Two or three years ago when we first started investing in NVIDIA, we thought about, oh, now we have to follow the GPU. Like, we we bet on NVIDIA early, but that's usually not enough. Like, what we really characterize a big theme being that there's many ideas across a theme because there's so many companies that are gonna be benefiting and impacting the the forward kind of future of a theme. And so we said that we had to follow the GPU, and so we were thinking about, okay, what does it mean if you're gonna sell, you know, billions and billions of dollars of GPUs? What are what's all the infrastructure that needs to support it? And now I think we've even hit a little bit of a different slice where we're thinking about follow the gigawatts. And really, the gigawatt is almost the the atomic unit of where the growth in AI is coming from, and it's one of the biggest shortages as well that's out there. And I think that we're now identifying, okay, well, what are all the inputs to the gigawatts? What are all the things that are helping reduce the lead times of gigawatts? Who are all the buyers of gigawatts? Who are all the users of output of tokens from the gigawatts? And so we're almost slicing it very differently than we have historically, where it may have just been, okay, semiconductors and internet and aerospace and defense, just kind of sector level, we're almost thinking what slice of the AI supply chain, and then who are the people we're going have covering those slices.
00:06:02 · Molly O'Shea, Jaimin Rangwalla
[00:06:02] S1: What's been the biggest surprise so far? [00:06:04] S0: I am surprised at how the tightness has persisted for this long. Historically, you look through waves of tightness of any kind of technology, memory has had many periods where it's been tight, but the fact that it is tight and it almost seems like it's getting tighter every week that goes by. And now in the case of memory, for example, you're now hearing supply agreements, guaranteed commitments through twenty nine, two thousand thirty. Like, I've never seen that level of tightness, and that number just keeps extending out, which to me just shows me that you have the largest companies in the world. Right? The buyers of everything are all trillion dollar plus companies, right, for the for the majority of it. They're not stupid. They're not investing hundreds and hundreds of billions of dollars growing at these high rates into something that they think is just going to kind of peak in trough. And to me, like that, the strength and the length of the strength is actually the thing that has surprised me the most. [00:07:03] S1: And you've started your career here in semis. [00:07:05] S0: Yeah, I started in 2007, right when the iPhone came out. Wow. I know I age myself a little bit, but [00:07:12] S1: I mean, it's pretty cool we have this as the backdrop, and like, there's so many little exhibitions around the office too.
00:07:12 · Molly O'Shea, Jaimin Rangwalla
[00:07:12] S1: I mean, it's pretty cool we have this as the backdrop, and like, there's so many little exhibitions around the office too. [00:07:19] S0: Yeah. I remember when I first started, we had sent four of our IT staff to go wait in line for the iPhone and we all got it and it was like, What is this? And you touch It was very, you know, we're all in a BlackBerry world before, and so it was just like, that was my first taste. I was 25 years old of, Wow, innovation happens. You don't expect it to happen. And then you see the power of what happened from that first million units of iPhones to what they're doing now, and it was really the best lesson I could have ever done. [00:07:48] S1: I don't think many people know about you, so I would love to get a little bit more into your background and how that scaled up to being CIO. [00:07:55] S0: Yeah, so I grew up outside of Philadelphia. I went to NYU for undergrad, and then I did [00:08:00] S1: So did I. [00:08:01] S0: Oh, really? [00:08:01] S1: Yeah. Go Violets.
00:08:01 · Molly O'Shea, Jaimin Rangwalla
[00:08:01] S1: Yeah. Go Violets. [00:08:03] S0: Yeah, I might have graduated a little earlier than you. And after that, I did two years of investment banking at Merrill Lynch back when Merrill Lynch existed as an independent entity. And then I was thinking through what I wanted to do next. A lot of the folks that I would consider my peers were like, Okay, you're going to go to private equity and then go to business school, and then figure out what you want do after business school. I kind of went to undergraduate business school, wasn't that excited about that idea, and so I started thinking, okay, who are people I can talk to to tell me about what my opportunities would be? And someone mentioned, you should go be an investor, a public markets investor. It's different than private equity. You're not handholding a bunch of consultants and things like that. It's much more like action based. You only need to find a couple of really big ideas a year and you can be super successful. [00:08:51] S1: Is that true?
00:08:53 · Jaimin Rangwalla
[00:08:53] S0: At an early age, it is. If you can really find one big idea and really get the firm to get behind it, that's enough to, I think, change a it can change a funds year, and I think it can change an investment analyst career. And so I met with five places in 2007, in the 2007, which was a nice peak in the market as well. The market had a really strong run. Four of the places did not offer me a job, and Philippe offered me a job. So my decision was almost made for me because I knew I wanted to do this. I was like, okay, I'm going go join. We were $700,000,000 at the time, one fund, which is very different. You know, we had half a floor on 56th Street. And the first lesson I learned was that you never know what type of market you're stepping into because we all know what happened in 2008. And those other four funds all went out of business. So some of life is luck and some of life is what you make of that. And I think I had a little bit of both because even though the other four places didn't offer me a job and Philippe did, Philippe was the one who taught me the lesson that what goes up sometimes does come down, at least for a temporary period of time, in particular in technology. But macro factors do matter, and so I think that having learned that very early on in my career was a priceless lesson. And I started covering semiconductors over time, grew to taking on more sectors, having more and more responsibility. And then two years ago, I was given the opportunity to run all of our public business with Philippe, and it's been an awesome journey. And every day I tell people that working at Cotu is sprinting a marathon. Every day you have to sprint. There's no time to rest, but it is still thinking about the long run. And so it's been an amazing experience.
00:10:37 · Molly O'Shea, Jaimin Rangwalla
[00:10:37] S1: Wow, amazing. Congrats. [00:10:39] S0: Thank you. [00:10:40] S1: And thanks for taking the time out of the sprint to do this. I know it might sound redundant talking about the size of the market today, but it is astronomical. It is crazy. So, could you talk about the size of the MAG-seven when they IPO ed versus today the AI leaders in their size. It's a wild comparison. [00:11:03] S0: Yeah. So the biggest of the Mag-seven was Meta in 2012, IPO ed around $100,000,000,000 All of the predecessors had IPO ed in the 90s, in the $10 to $50,000,000,000 range, which for that time was very large. But today you look, OpenAI's most recent round was 800. SpaceX is most recent, when they did the transaction with XAI, $1,250,000,000,000. Anthropics last round was high 3 hundreds of billions. It's rumored to be significantly higher their next round. And so the fact that you now have private companies that are breaking into pretty much the top 25 in the world before they even go public, it's an unprecedented time. But I think that's what makes AI so exciting, is that you have these private companies that are capturing so much value and so much growth while staying private, and I think that that is like nothing we've ever seen before. [00:12:00] S1: And you've had to reshuffle some parts of the team to account for that too, like Frank, the claw genius.