So the period 1820 to 1900, it only takes 87 years to double GDP. And then 1900 to 1950, only 60 years. And by the time you get to the year 2000, we're doubling global GDP every 20 to 30 years. What have earnings compounded at for tech versus non-tech? And what have stock prices compounded at at tech versus non-tech?

Technology companies have compounded earnings at 13%. Their stock prices have compounded at 17%. So a little bit faster than earnings have compounded. But if you look at non-tech, they've only compounded earnings at about 6%. Their stock prices have grown at about 8%. Technology has gone from 5% of global GDP to 15% over the course of the last 15 years.

When we have this conversation five or 10 years now, is tech going to be more or less than 15% of global GDP? By the grace of God, Apple was created here. Google was created here, Microsoft was created here, Meadow was created here. It is not a given that in 20 years from now, those companies will be created here.

Why not just like seal that and lock that in as a monopoly and get all of that talent here? And the thing that is crazy to me is that US companies are currently employing all of the people we're talking about moving here. They're just employing them in a different country.

Would you rather have an assistant with the intelligence of like Einstein, but they have no access to the internet and they don't know anything about your history? Or would you like to have an assistant that's just above average intelligence, knows everything about you, and they can use the internet?

You would choose that. I think that is another 10x moment that's in front of us, which is we go from answers where I'm just asking for information to actions. And once it can start booking my hotel, booking, reserving my restaurant, and then I just say same thing, do it again.

And over the course of the next four to five years, we'll have 2 trillion of data centers powering software around the world, and it will all be accelerated compute. So this is the AI data center build out. In blue is the new accelerated compute. In green is the replacement data center that we think will go to accelerated.

And then in gray is the replacement that's non-accelerated compute. So this would be more like, you know, x86. I would make the argument that every company in Delaware has to move to a different domicile because they could be sued in a future derivative law suit for the risk they've taken by staying in Delaware.

Oh my God, you're so right. A dollar of stock-based compensation is actually, not only should it not be ignored, it's the most single valuable expense. We even have a court criticizing Elon for taking an options package where he made no money unless he saved the company from bankruptcy. Meanwhile, the CEO of his arch rival, who created no shareholder value over a period of five years, is making tens of millions of dollars a year in RSUs.

If you give one share of a restricted stock unit at a value of 20, then the recipient has $20 of value. Now if the stock happens to go down by 50%, the employee still has $10 of value. Whereas in the case of the stock option, if it goes down 1%, yet alone 50, it has zero value.

I like to take a hot shower. But if the cost of that was $100,000, right, not many people would take hot showers. But he's saying that if you drive down the price of the cost of compute, then the reflexivity is people will consume a lot more of it. Now, this is also known as the Jevons paradox, right?

As price goes down, we demand more of it. The aggregate amount of consumed, of the compute consumed, actually goes up, right? And that's really, you know, just a fancy way of talking about the elasticity of demand. If you're public with $100 million in revenue and a 10% growth rate, your valuation's not going to be all that great.

But guess what? If you're private at $100 million in revenue with a 10% growth rate, it's not like you're better off, like you're just fooling yourself. Elon is building a much, much bigger cluster to train a much, much bigger model as is OpenAI, as is Zuckerberg. I mean... What Sam just said, the bigger models aren't the problem.

Well, I mean, he may be doing the same game that everybody else is doing, Bill, and trying to throw everybody off the scent. Dario and Sam talk in these high-level platitudes about how this stuff's going to cure cancer and we're all going to not have to work anymore. And Zuck was down in the weeds in the meat.

He's in the arena. Yeah, being super transparent. And I was just like, holy shit, maybe this guy's in charge now. Hey, man, great to see you. That was fun to take some of your money in Vegas this past weekend. I can't believe you're bringing that up. This is classic, you know, freshman economics.

If someone's better at doing something than us, we should let them do it. We should buy it from them and we should send them what we're good at. It's interesting. We end up talking about AI every week, but I don't know what there is else to talk about because that's all anyone's talking about.

And so we're gearing up for a battle royale. That's what it feels like. The forecast we have in here is simply the consensus Morgan Stanley and Goldman Sachs forecast for the balance of the year, which has been pretty accurate. The backdrop around inflation continues to be constructive. We had a couple of months in there where I think people got scared.

Larry Summers said maybe the next rate move is up. Why does that matter so much, Bill? Just listen to the Berkshire Hathaway annual meeting. You know, Warren Buffett says, listen, I'm collecting my my interest payments every week. If I can earn five point four percent taking no risk, why would I take risks?

So, you know, I still am in the camp that, you know, we're on a glide path. It's going to take a little bit longer. But I do suspect that rates are going to come down. Jay Powell said yesterday we're on hold for a couple more months. I think you're going to get a rate cut before the election.

But I don't think the market actually needs a rate cut, Bill. What they need to know is that inflation is coming down and the Fed can give us a rate cut if they want to. It's very difficult to stay fit and efficient when you have a buffet of all options sitting in front of you and you can fund all of them.

Scarcity breeds necessity, scarcity breeds innovation. Elon set out a vision for rockets that could land themselves and auto fleets that would be replaced by electric cars. At the time he said these things, they sounded totally outlandish. You have to will the future. You have to manifest the future. You have to describe the future.

You have to motivate your employees. And importantly, you have to motivate sources of capital. People talk about the military industrial complex. We may have created a healthcare industrial complex that really can't stop maximizing profitability and not focus necessarily on the lowest cost, best, most preventative process. What do you do for yourself, your friends, and your family?

Just tell me your care, standard of care for yourself, your friends, and your family. And 100% of them follow the same protocol, which is a calcium CT scan no later than 40. Five times as many women die of a heart attack each year in this country as die of breast cancer.

Very, very few women do a calcium CT scan, which I might argue or I've heard argued is the mammogram for the heart. And instead of a $250 marginal cost to implement a rural broadband, we're going to get bulldozers out and drop fiber lines to a ranch in the middle of nowhere.

It's stupid. That shot fired at Trump was one inch different. If Trump had been assassinated, can you imagine what would happen to the U.S. markets? So when markets are at all-time highs and you're just hanging out and there's not a lot of upside return and you got these other things you're concerned about, you got to take down those units of risk because there are always things like this that can happen.

Take Tiablo Canyon. They built two nuclear reactors here. You know, this site was provisioned for six. I could imagine if you had four more reactors sitting here, you could have one reactor for Meta, one for Amazon, one for Microsoft, one for NVIDIA. You could have the data center sitting right next to them.

I think this anti-Chinese mentality is a little nuts because if you look at low-cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas. And we have this holier-than-thou attitude that America is the best and that we're the leader and we're being passed.

We would all be better off if nuclear energy were cheaper for everyone on the planet. I'm no longer going to program computers with C++. I'm going to program AIs with prompting. Isn't that right? Now, this is no different than me talking to my, you know, this morning. I wrote a bunch of emails before I came here.

I was prompting my teams, right? And I would describe the context. I would describe the fundamental constraints that I know of, and I would describe the mission for them. I would leave it sufficiently, I would be sufficiently directional so that they understand what I need. And I want to be clear about what the outcome should be, as clear as I can be.

But I leave enough ambiguous space on, you know, a creativity space so they can surprise me. Isn't that right? Isn't that how I prompt an AI today? It's exactly how I prompt an AI. Companies are only limited by the size of the fishpond, you know. A goldfish can only be so big.

What is our fishpond? What is our pond? And that requires a lot of imagination. And this is the reason why market makers think about that future, creating that new fishpond. It's hard to figure this out looking backwards and try to take share. The need to invent a new market to go serve it later is something that's very comfortable for us.

Exactly, exactly. I've said before, the data center is now the unit of computing. To me, when I think about a computer, I'm not thinking about that chip. I'm thinking about this thing. That's my mental model and all the software and all the orchestration, all the machinery that's inside. That's my computer.

And we're trying to build a new one every year. That's insane. Nobody has ever done that before. You may also be running up against the, even for the Mag7, the size of Capo X deployment where their CFOs start to talk at higher levels. You can have a thousand agents working together.

You can have one that's making sure that the credit card charge is not too big. You can have another one to make sure that the address is right. You can have another one checking against your calendar. And so all of that's free. So I'm on the under and Brad, I'll even go under one year.

Wow. Yeah. Wow. Yeah. That's crazy, Sonny. 10, 15 years ago, the funds were smaller. And as a GP, as an investor, you'll make money on that guaranteed portion, but not necessarily right. As I call it, get rich money. Bill, what were you making when you started, per year when you started in the business?

Every founder and every company and every board will tell you, if we raise money, we're not going to spend it. We're going to stay frugal. That never happens. You might ask a founder, what are the three things that matter most this year that are critical for your success? If you only focused on those three things, you might maximize your chance of success.

When you have lots of money, you're going to do six things at once, which means you are diluting the three things that matter. I think we're all actors stuck in the game. Right. You know, I'm not sure you can escape it. You know, a couple of observations. Is that the positive take on it?

No. I know he wanted one. I apologize. If 2024 was the chat GPT moment for full self-driving, Bill, where we started seeing Waymo's on every street corner in San Francisco, if this was the chat GPT year, I think next year really is the year of achievement of a safety standard that allows RoboTaxi to go into action.

The Department of Government Efficiency, the unofficial government department, which is run by Vivek and Elon, and is overseeing trying to reform government spending, government regulations, frankly, reducing the size of the federal government with the overall objective of getting control of our national deficit and our national debt, which we all agree is pretty egregious.

And, you know, if you look at the federal revenues, just over $5 trillion expected this year, government spending $7 trillion. So we basically have a $2 trillion deficit. That spending is up dramatically, by the way, from the $4.5 trillion that we spent in 2019. So in COVID, we just lost our mind and we've never regained our mind.

If you just grow revenues from here at 3% to 4% over the course of the next four years, Bill, and you cut costs in the first year by 5%, second year by 5%, third year by 2%, so all that does is get you back to trend line from 2019, as though we increased spending 3% a year from 2019, the budget balances.

That's tiny, these are tiny changes in costs. And I shared that with Vivek and Elon, and they both had separate and independent reactions, which is not nearly ambitious enough. Invest America, Bill, you know, Invest America is a project and now piece of legislation that I've been working on for three years, and it's truly gaining a ton of traction.

The federal government would cause to be created 3.7 million investment accounts a year for every child that's born in America. They would seed it with a very small amount of money that would be a roundy near to the federal government. It has a massive ROI, and we can achieve it while having less government, not more government.

I think the notion that business applications exist, that's probably where they'll all collapse, right, in the agent era. Because if you think about it, right, they are essentially CRUD databases with a bunch of business logic. The business logic is all going to these agents. And these agents are going to be multi-repo CRUD, right, so they're not going to discriminate between what the backend is.

They're going to update multiple databases and all the logic will be in the AI tier, so to speak. And once the AI tier becomes the place where all the logic is, then people will start replacing the backend. I think the company of this generation has already been created, which is open AI in some sense.

It's kind of like the Google or the Microsoft or the meta of this era. I mean, I always say Google makes more money on Windows than all of Microsoft. I mean, literally. I mean, and I say, wow. Very few people could use GPT-2 and 3, right? A lot of people can use GPT-4.

When we get to that quality of jump that we see for the next generation, the amount of people that can use it, the tasks that it can do, balloons out, and therefore the amount of sort of white-collar jobs that it can augment increased productivity on will grow, and therefore the market clearing price for that token will be very high.

That's super interesting. If that's going to be dead, then why is Mark Zuckerberg building a two-gigawatt data center in Louisiana? Right. Why is Amazon building these multi-gigawatt data centers? Why is Google, why is Microsoft building multiple gigawatt data centers, plus buying billions and billions of dollars of fiber to connect them together because they think, hey, I need to win on scale, so let me just connect all the data centers together with super high bandwidth so then I can make them act like one data center, right, towards one job, right?

So this whole, like, is scaling over narrative falls on its face when you see what the people who know the best are spending on. Until next year. Awesome. Thank you. Take care. As a reminder to everybody, just our opinions, not investment advice.