AI's Not in a Bubble w/ Dr. Ankur Crawford
Summary
TLDRIn this insightful discussion, Dr. Aner Crawford from Alger Management shares her expertise on market trends, particularly the potential of AI and big tech companies. She emphasizes AI's transformative impact, refuting claims of a bubble and highlighting the technology's early stages. Crawford discusses the concentrated Equity ETF, which focuses on high-growth companies with pricing power or unique business models. She also addresses the importance of understanding macroeconomic factors and the role of active management in portfolio construction, offering insights into the future of technology investments.
Takeaways
- 😀 Dr. Aner Crawford from Alger Management discusses her views on the market, AI, big tech, and their Concentrated Equity ETF.
- 🔍 Dr. Crawford appreciates the importance of macroeconomic factors like rate cuts but emphasizes the market has already anticipated these changes.
- 📉 She suggests that market movements are fundamentally driven by company performance and economic indicators, not just macroeconomic policy.
- 🤖 AI is considered by Dr. Crawford to be in its early stages, with the potential to exponentially increase innovation by enabling software to write software.
- 🚀 Dr. Crawford believes AI's current state is undervalued, and future versions could significantly boost productivity and create substantial ROI.
- 💹 The Concentrated Equity ETF (CNQ) focuses on companies with promising growth potential, including oligopolies with strong pricing power and those driving industry change.
- 💼 Dr. Crawford sees big tech companies like Microsoft, Meta, and Amazon continuing to lead the AI revolution and not being overvalued despite market sentiments.
- 💵 The ETF offers a waiver on expenses until the end of 2025, making it more attractive to new investors by reducing their cost burden.
- 🌐 Crawford predicts significant capital expenditure in areas like data centers and edge computing due to the growing importance of AI and its applications.
- 📈 For investors seeking growth, companies with unique business models, pricing power, and the ability to create free cash flow are ideal, which the Concentrated Equity ETF aims to provide.
- 🔗 The interview concludes with Dr. Crawford's belief that the public underestimates AI's potential impact on the world, including geopolitical and economic aspects.
Q & A
What is Dr. Aner Crawford's perspective on the current market and the influence of macroeconomic factors such as rate cuts?
-Dr. Aner Crawford believes that while macroeconomic factors like rate cuts are important to be aware of, they should not dictate day-to-day investment decisions. She emphasizes that the market has already anticipated rate cuts, and the key is understanding how much the Fed needs to cut, which is tied to economic fundamentals like GDP growth and the potential for a soft or hard landing.
Why does Dr. Crawford think that AI is still in the early innings despite some people considering it a bubble?
-Dr. Crawford views AI as a fundamental shift in computing technology, leading to exponential innovation. She believes that AI's potential is vast, with the possibility of creating digital versions of ourselves that can enhance productivity. She argues that the current AI applications are just the beginning, and future versions will offer significant productivity gains, making the current investments worthwhile.
How does Dr. Crawford respond to the idea that AI investments have no ROI currently?
-Dr. Crawford counters this notion by pointing out that AI is in its infancy and the current productivity gains, even if small, are just the beginning. She gives the example of how AI can reduce response times and improve efficiency, which already shows a significant ROI. She suggests that as AI evolves, the productivity enhancements will become more substantial.
What is Dr. Crawford's view on the role of big tech companies in driving the market and AI?
-Dr. Crawford sees big tech companies as the drivers of the AI revolution. She believes that companies like Microsoft, Meta, and Amazon, with their cloud services and AI applications, are well-positioned to lead the change. She thinks these companies are not overvalued and have room to grow, as they are investing in AI to create new business models and platforms.
Can you explain the concept of the concentrated Equity ETF as discussed by Dr. Crawford?
-The concentrated Equity ETF, with the ticker CNQ, focuses on companies with promising growth potential. It holds between 20 to 30 names, seeking businesses that are either changing their industries or have unique positioning within them. The fund is non-diversified, allowing for significant variation in position sizes relative to the benchmark, and is actively managed to capitalize on growth opportunities.
Why did Alger Management decide to offer a waiver on the concentrated Equity ETF's expenses?
-Alger Management offered a waiver on the expenses for the concentrated Equity ETF to alleviate the burden on new investors due to the fund's current sub-scale size. This waiver ensures that the initial investors are not disproportionately affected by the expenses typically associated with a young fund.
What type of investor does Dr. Crawford believe would benefit most from the concentrated Equity ETF?
-Dr. Crawford suggests that the concentrated Equity ETF is suitable for investors seeking growth in companies that have the potential to grow faster than the market and possess pricing power and unique business models. It is ideal for those who understand the fund's non-diversified nature and are interested in Alger's expertise in growth investing.
What are the key trends Dr. Crawford predicts will impact investors over the next decade?
-Dr. Crawford identifies AI as the most impactful trend for the next decade. She anticipates significant capex spending in areas like data centers, optical networking, and edge computing as the world becomes more AI-driven. She also highlights the potential geopolitical implications of AI dominance and the rapid pace at which AI could evolve.
How does Dr. Crawford address concerns about hyperscalers potentially reducing spending on AI and the impact on Nvidia?
-Dr. Crawford dismisses concerns about reduced spending on AI by hyperscalers, arguing that the potential for AI to create significant value, such as digital agents that can perform tasks more effectively, justifies ongoing capex. She believes that the end goal of AI monetization is much higher than current capabilities, necessitating continued investment, and thus, companies like Nvidia will continue to thrive.
What is the significance of the non-diversified nature of the concentrated Equity ETF according to Dr. Crawford?
-The non-diversified nature of the concentrated Equity ETF allows for greater flexibility in portfolio construction, as it is not bound by the 40 Act rules that limit position sizes in diversified funds. This enables the fund to take larger positions in its best ideas, potentially leading to higher returns, but also comes with higher risk due to the concentration in fewer names.
Outlines
📈 Introduction to Dr. Aner Crawford's Market Insights
The video begins with the host expressing excitement about the upcoming conversation with Dr. Aner Crawford from Alger, a portfolio manager with a keen eye for market trends, particularly in tech companies and AI. The host has noticed overlaps between Dr. Crawford's insights and their own investment portfolio, prompting a discussion on market perspectives, AI, big tech, and Alger's Concentrated Equity ETF. Dr. Crawford's expertise is highlighted, and the host sets the stage for an in-depth exploration of market dynamics and investment strategies.
💼 Macro Influences and AI's Market Potential
In this segment, the conversation delves into the macroeconomic factors influencing the market, with a focus on the Federal Reserve's actions and their implications for investment decisions. Dr. Crawford emphasizes the importance of being aware of macroeconomic trends but also stresses the significance of company fundamentals. The discussion pivots to AI, where Dr. Crawford argues that AI represents a foundational shift in computing, leading to exponential innovation. She counters the notion of an AI bubble, asserting that AI is in its early stages with significant growth potential ahead.
🚀 Big Tech's Role in Driving AI Evolution
Dr. Crawford discusses the pivotal role of big tech companies in the advancement of AI, suggesting that these firms are poised to lead the AI revolution. She mentions companies like Microsoft, Meta, and Amazon as key players, each with unique strengths that position them well in the evolving AI landscape. The conversation underscores the transformative impact of AI on enterprise software and business models, with Dr. Crawford providing examples of companies that have successfully integrated AI to enhance productivity and efficiency.
💹 The Concentrated Equity ETF: A Focus on Growth and Change
The host and Dr. Crawford explore the Alger Concentrated Equity ETF, which is actively managed and seeks companies with promising growth potential. Dr. Crawford explains the fund's strategy, focusing on businesses that are either driving industry change or have unique market positions. The ETF's non-diversified nature is highlighted as an advantage, allowing for more significant position sizes relative to the benchmark. The discussion also touches on the fund's waiver on expenses to attract investors, emphasizing the fund's commitment to growth and the potential for high returns.
🌐 AI's Geopolitical and Economic Impact
In the final paragraph, Dr. Crawford expands on the broader implications of AI, including its geopolitical aspects and the significant capital expenditure it entails. She discusses the potential for AI to revolutionize various sectors, such as data centers and edge computing, and the importance of maintaining AI dominance. The conversation also touches on the public's potential underestimation of AI's long-term impact and the transformative changes AI could bring to the global economy.
Mindmap
Keywords
💡AI
💡ETF
💡Macroeconomics
💡Big Tech
💡Concentrated Equity ETF
💡Fundamental Analysis
💡Portfolio Construction
💡Rate Cuts
💡Retail Investors
💡Geopolitics
Highlights
Interview with Dr. Aner Crawford from Alger, focusing on market insights and tech companies.
Discussion on the importance of being aware of macroeconomic factors like rate cuts.
Insight on how macro factors influence market views and investment decisions.
Dr. Crawford's perspective on the AI market being in its early stages despite some calling it a bubble.
The potential of AI to exponentially increase innovation through software writing software.
The significance of AI's impact on enterprise software and business models.
Dr. Crawford's view on the concentrated Equity ETF and its focus on companies driving AI evolution.
The role of big tech companies in continuing to drive the market.
Explanation of the concentrated Equity ETF's investment strategy and its non-diversified nature.
Dr. Crawford's thoughts on the type of investor who would benefit most from the concentrated Equity ETF.
Details on the waiver for the concentrated Equity ETF's expense ratios until the end of 2025.
Predictions on the trends that will impact investors over the next decade, with a focus on AI.
Dr. Crawford's opinion on the potential of AI in terms of productivity and innovation.
Discussion on the future of Nvidia and the misconceptions about capex spending in AI.
The potential for AI to create a digital version of oneself and the value of such technology.
Final thoughts on the importance of understanding AI's role in the future economy and society.
Transcripts
welcome back everybody today I have
something a little bit different for you
I had the opportunity to talk to Dr
encor Crawford from aler and I'd seen a
bunch of her interviews on CNBC and
really appreciated her thought process
on markets and especially tech companies
and Ai and I saw a lot of overlap in the
companies that she talked about and the
ones in my own portfolio so I think
you're really going to like this
conversation we talk about markets and
Ai and big Tech and their concentrated
Equity ETF and it's great to hear her
perspective on all those things now I
will say with the audio in this video
that I recorded from Zoom my voice
sounds super deep like even more deep
than normal so I don't know what that's
all about but the important part is that
her part sounds great and that's someone
you need to be listening to anyway so
let's Jump Right In welcome Dr aner
Crawford EVP and portfolio manager at
aler Dr Crawford it is great to get a
chance to speak with you today thank you
for being here ah thanks for having me
Matt looking forward to this
conversation all right well cool I want
to respect your time so let's kind of
Jump Right In and I wanted to start with
a question maybe more on the macro side
which is probably not as interesting as
the stuff that we'll probably talk about
but I think it gets talked about a lot
so I'd love your perspective CU there's
so much talk around about rate cuts and
people wanting to hear about what the
fed's going to do how much do things
like rate cuts and maybe macro overall
influence how you view the market and
investment decisions and you know maybe
an extension of that is how important do
you think it is for regular retail
investors who are just managing their
own
portfolios yeah look I think I think you
can't be um macro unaware or kind of
unaware of what's happening on um on the
macro side side because in part there
there are periods of time where you do
need to pay attention to what the FED is
doing I.E yeah you know the big
transition in November of 21 was an
important transition to to take note of
because that was a big pivot I think
this transition has been well well well
um anticipated and it is notable but
we've already anticipated in the market
that the FED is going to be cutting and
um and the question really is how much
do they cut or how much do they need to
cut and that's a function of the economy
it's a function of you know how much
does GDP slow are we going to have a
soft Landing are we going to have a hard
Landing so so but it really goes back to
the fundamentals as well I mean if the
economy isn't doing well then then
companies are going to miss their
numbers which means that the S&P
earnings numbers is is going to come
down and the multiple will go down on
the
S&P right which will warrant a rate cut
that is beyond you know kind of the
expectations of what people think so
it's a bit of a you know you start with
the fundamentals and you see what the
impact of the rate cut is and if the the
fundamentals don't get any better you
you have to continue to to cut rates um
and so for so when when I think of
portfolio construction and you know how
do you position in a market like this or
during these transitions I think you
have to be aware of what's happening so
might you add a little bit more interest
rate sensitivity to a portfolio at that
point in time right but it doesn't mean
that you should change your overall
philosophy so yeah sorry go ahead and
and I was goingon to say for retail
investors I think unless you are living
this Market on a day-to-day basis I
Think It's just tough you know it's
tough to to reorient your portfolios um
you know with the with the newest topic
dour on a weekly basis so you just have
to own what you believe in and um you
know and and own companies that can
compound their
growth no I I love that and you know one
of the things that we talk about a lot
on my channel is trying to ignore the
noise a little bit and concentrate on
what's your strategy what's your risk
tolerance and those things you know may
change over time but they shouldn't
change with a headline every day right
um but okay but but let's move on to
something that I really wanted to get to
because I've heard a couple of your your
interviews before and as recent as maybe
a month ago I heard you say that the AI
trade is still in the early Innings and
what are some of the reasons
why you feel that way in contrast to a
lot of people out there who say you know
what the AI thing is a bubble is going
to come crashing down there's no Roi on
these Investments I would love to get
your perspective on why you think it's
in the early Innings yeah so so my very
big perspective I'll start big and we
can get a little bit
narrower is that Ai and what we're
seeing today is a fundamental change in
the foundational technology of how we
compute right it's it's it's
accelerating us into a period of time
where software begins to write
software and when software begins to
write software Innovation becomes
exponential and if you think about the
impact of what that actually means that
Innovation becomes
exponential you will understand why AI
is not in a
b right because when we start thinking
about the end point for AI and maybe
that endpoint is having
a digital version of yourself that sits
with you and does many of the things
that you might have done but in an
intelligent way not just the mundane
tasks and actually may do them better
than you do right and enhances your work
product what is that
worth right when we think about you know
kind of capex replacing Opex or we think
about what what productivity we can add
using AI um and it's not today right
we're not we're not investing today for
the revenue today we're investing today
for revenue and for a a path to revenue
over the next four to five years and so
I think the misnomer that people have
today on AI is that you know AI in its
infancy is not productive enough so why
should we pay for co-pilot because you
know it's only 10% productivity it's not
worth it to me but this is version one
what does version three four and five
look like and how much productivity will
it add I will site like I I don't know
if you seen the Clara CEO's commentary
yeah I I was gonna bring it up actually
yeah I just saw it today yeah it's
amazing to me I mean he he said this two
weeks ago on a podcast um and first of
all what's what's amazing is he's saying
that you know he's disrup enterprise
software right that that that is which
has been core to one of our thesis um
here at aler um but he's also talking
about how many people he's able to kind
of digitize effectively or how much work
he's able to digitize I think that on
the order of 700 agents he was able to
to digitize and the results were
equivalent and he took response time
from 11 minutes to two minutes so that
that again that's version one right you
know
and it's huge Roi already right I mean
it's a huge Roi already so I don't know
when I when I hear people talk about the
AI bubble I feel like the end point of
how they're thinking about the market is
a little
narrow for sure no makes sense um I was
going to bring up the clar thing I'm
glad that you did because I'm really
interested to see if more stories like
that start to come out where you know
people are literally saying we ripped
out this Enterprise software that was
probably a bunch of their expenses
right and got better for much cheaper
and ongoing cheaper right so that that
has huge impacts and I'm just interested
to you know if we hear more stories like
that over the next year two years
whatever I think it'll be interesting to
know but yeah yeah I you know we
actually wrote a paper about this a year
ago it's called the declining cost to
create and it goes through what happens
when you can create software for free or
I I call it for free but I say the cost
goes to zero I call to to to just
exaggerate my point
but what happens when you can create
software for
free I mean what happens to the
enterprise software what happens to
their business models what happens to
the multiples and so so this is also why
I think you know when we think about Ai
and and the speculative bubble um you
know maybe it's time to make room for a
new kind of technological
advancement which takes market cap away
from what we've grown up with over the
last two decades right that's super
interesting and so I I think kind of as
we continue talking about this
specifically about the um the
concentrated Equity ETF I was taking a
look at it and I know we're going to
talk about it in more detail here but I
noticed that you know big Tech is
heavily represented in that fund and I'm
a little curious about that I think it
kind of happens to connect to what we
just talked about in terms of why but in
my own portfolio that I share on my
channel I have um a very similar
allocation I think over half of my
stocks and my portfolio were actually in
the fund which is why I was super
interested in it to begin with um but I
know why it made sense for me but I'm
curious to hear your thoughts on big
Tech kind of continuing to drive the
market um you know in contrast or
compared to people who say you know what
that runs over it's done it's time for
more small cap value and all those
things are kind of broaden out kind of
what are your thoughts on that yeah I I
think we're we're in the early Innings
of this ramp in Ai and the the companies
that are going to be driving this
Evolution SL Revolution are actually
going to be the big Tech players whether
um you know definitively a Microsoft of
the world is going to um you know kind
of take the cat bird seat on on where
we're going in this platformization
change I think companies like meta and
Amazon you know with Amazon with their
cloud and meta with really applying Ai
and broadening their industry from just
an advertising business to a marketing
business and being able to Pivot um you
know I think I think these are big
changes and we tend to invest in change
our Cor philosophy is investing in
change and in part because where there's
change oftentimes the the market
underestimates how much change there can
be and the numbers tend to be too low
I.E
Nvidia right um and so you know I think
that there's still room to run for a lot
of these businesses and in part because
if you look at the valuations they are
not stretched I mean two two days ago
was it I mean Nvidia is trading at $114
today but two days ago it was trading at
a multiple um Microsoft saying thing at
a $45 it was basically trading at a 20 a
low 20s multiple on on a 26 type number
so is that does that feel like the the
run is done it doesn't and in part
because the numbers will continue to ACC
create these are definitive growth
markets and um the multiple should
expand from a 20 multiple and I mean I
think I'm I'm looking at meta like meta
just again maybe a week week and a half
ago it was trading at a submarket
multiple right is that is that an
appropriate multiple for for a business
like meta I would say not and um so
looking at the fundamentals I would say
you know we're not done yet um you know
Microsoft in itself has probably not
performed as well as one might have
expected it's only been a market
performer this year so it has treaded
water Amazon the same thing it's since
February it's really gone nowhere um so
we've already seen this this period of
underperformance interestingly
enough so I I don't think that we have
like another year of this
underperformance to be completely Frank
yeah I think it's an interesting
perspective too especially because you
know how much those businesses have come
down even just over the past week um
it's it's just kind of that that whole
story of being overpriced and you know
stretch seems a little thin you know to
me too but uh let's move on to talk
about the con Equity ETF a little bit so
it's an actively managed ETF would you
say when I looked it up said quote
promising or it looks for companies with
promising growth potential now you I
think you probably touched on a little
bit when you said you invest in change
but without revealing anything
proprietary of course if there's
anything you can tell us a little bit
about the type of companies that you
look for for that ETF in particular yeah
so um concentrated Equity is basically
the ticker
cnq and it's anywhere from 20 to 30
names we've been airing on the on the
higher end of that 29 names today um
look for businesses that are core core
of growth IE they they're businesses
that are either you know changing the
industries that they live in um
radically or they have you know a
special kind of positioning in their
industry so I I would I would posit that
about 50% of the names in the in
concentrated Equity are oligopoly type
characteristics whether or not they're
oligopolies um but they have n of those
characteristics where they have great
pricing power they are still in grow
type end markets or they're they're
demand
creators um in their markets and and
this could be businesses that range from
any of the big tech companies whether
it's a Netflix or a Microsoft and Nvidia
that are I mean Nvidia is definitively a
a demand Creator um and so all of these
businesses have pricing power in part
because of of the market that they live
in but there are companies like Formula
1 that is a media company that also has
pricing power power with very different
characteristics or Ferrari that um you
know caters to a very exclusive Market
but has incredible amounts of pricing
power for a car company so I would say
so half of the portfolio has those kinds
of characteristics of really special
businesses um and then half the
portfolio is levered more to kind of
companies that are just you know they're
they're not necessarily olop but they
are somehow changing their business
models and um they are growing at a rate
in excess of not only the market but
their own markets I.E they're taking
share they are um again have pricing
power or they have very large markets
that they're addressing and companies
that I would I would highlight here are
companies like estera Labs small
semiconductor IND um company that is was
made in a garage really in
2017 and you know we predict that the
market predicts that they're going to
have a billion dollars in in 27 or 28 so
came out of nowhere and highly
successful or a company called applen
which is a um kind of a a a advertising
agent for um for gaming systems so these
are these are what we deem kind of
special type companies that are going to
um kind of flourish and grow and and
give off an immense amount of free cash
flow over the next few
years so one of the things that I like
to do when when I look at ETFs right is
I try to understand a little bit who
it's actually meant for right like not
every ETF is meant for every investor
and it's you know based on what it's
trying to accomplish and I know you've
touched on that but what type of
investor do you think the the
concentrated Equity ETF kind of makes
the most sense for like if you had a
Target investor customer who who is that
yeah look I think I think initially you
know to understand what what what um cnq
it's 30 names so it's not that
concentrated it's not 10 names where it
should have have a huge amount of
variability relative to a growth
Benchmark um but most importantly it's
non-
Diversified and a non-diversified fund
is relatively it's a relatively new um
offering and what it means is that
you're not constrained by the 40 act
rules that the SEC put in place many
many years ago that really handcuffs a
lot of portfolio managers today so um
you know and that is an important aspect
of of this fund because
the the position sizes can vary pretty
significantly relative to The
Benchmark I think the other thing is
that and it's not necessarily
concentrated Equity but at aler we we
have a very large team of people that
are working on understanding and
developing business these business
models and and developing these ideas
that make their way into the portfolio
this is basically 30 of the best names
that I can find across our research
staff so um one thing that we are is
very good stock Pickers and you know we
can pride ourselves in in our philosophy
lending itself to that and so what
you're getting is really the best of the
best um through this concentrated Equity
so um for any any kind of investor
that's looking for growth and looking
for the characteristics of having
businesses that should grow faster than
the market on a on the bottom line not
the stocks um looking for businesses
that have pricing power and have unique
business models I think that's this is
the kind of ETF for them no I love that
that's great um and I want to talk a
little bit I saw in the documentation um
the the conversation about expense
ratios always comes up anytime anyone
talks about any ETFs but especially
especially actively managed ones but I
saw that you guys had a waiver I think
until the end of 2025 I don't know if
you just wanted to talk about that real
quick or kind of what the um what the
waiver does yeah uh the waiver basically
for a young fund there are a lot of
expenses that generally get put onto the
um the consumption base or or the
investors in the fund and what we're
doing is we're offering a waiver such
that those expenses are actually taken
are borne by Fred alra management or by
Alger and so um you know that way our
our new investors are not burdened by
the fact that it's subscale
today very cool um so I I know that I
want to respect your time here here but
I have one last question for you it's a
two-part question and I think you've
touched on it already but I'm curious to
hear what you think about this so so one
you know what are the trends that you
think are going to be the most impactful
for investors over the next decade I'm
sure you probably touched on some but if
if you have any others that'd be great
and then two what's something that
whether it's a trend or actually part of
one of these trends that you think the
general public or in investors at large
are under estimating right now yeah I
think and I did answer both of these in
in kind of due course of our
conversation but it's definitively AI
right I I think I think if you think
about Ai and again if you think about
the Endo of what AI is going to be um it
kind of is a paradigm shift in the way
we have to think about our
world and that's why you see you know
$200 billion dollars being spent in
capex because right there are some in
the industry that recognize where we're
going and the impact it can have and you
know I think it we talk about it in in
terms of businesses but I think there's
a lot of geopolitical aspects to this
that you know I I believe that the the
market is under appreciating and how
important it is um from a geopolitical
aspect that we maintain AI dominance um
you know I think that's kind of
underestimated I think the pace at which
we can get to um kind of a superhuman
intelligence period of time I think it's
going to come faster than people think I
think the you know there's there's a a
long slew of other kinds of Investments
that are going to be made today we're
talking about data centers well what
happens when for example a data center
needs to be connected to another data
center my gosh then it sounds like 2000
where you have to lay all this cable and
then you have an optical you know cycle
that is decades long because the entire
Globe will have to connect data center
to Data Center what happens when you go
into iot and iot becomes a reality
because you can use that information to
become more intelligent in whatever
you're doing right that requires a
different kind of networking so I think
it's almost like that the data center is
the first entree into Ai and as we as we
start to spread out AI into
The Edge into um you know even even
geographically as we're spreading out
these data centers based on where
electricity is right it has this impact
on economies that I think is going to be
surprising um and there's going to be
big capex spending across the board
whether it's utilities whether it's um
you know on on optical and that aspect
um on the edge Network I mean I I saw
something he had done on cloud flare
totally
totally agree that you know over time
that edge aspect is going to be really
interesting and really important so um
yeah I think I think that covered both
of those question yeah no that's great
and and actually you had mentioned like
all the CeX spend the data center spend
Ju Just real quick I would love to hear
your thoughts on you know part of the
Nvidia obviously Nvidia is a huge name
that everybody talks about almost daily
and there's everybody's very strong
opinions about Nvidia on both sides and
one of the prevailing kind of I don't
know if it's criticisms or you know
whatever about Nvidia is that eventually
the hyperscalers are going to stop
spending they're making their own chips
and what does that mean for nvidia's
future I'm curious you know without
having to predict exactly what's going
to happen to Nvidia how do you view that
kind of viewpoint of hey all the cap exp
spending is going to stop and Nvidia you
know like their revenues are going to
just die yeah I think it's
ludicrous and and I think it's ludicrous
because again if and and let's just play
out the play out the math behind this
and I'm going to make up these numbers
so don't hold me to them in five years
but if I could you know give you an
agent right and that agent did I don't
know 50% of what you did with your
day um or I could and and I'm GNA cite
Eric Schmidt um where Eric Schmidt
talked about how you can create an agent
that for you you could say create an
avatar of me and have it have a video
that goes viral
I want you to make a video of my avatar
that looks exactly like me and speaks
like me and I want you to have it say
something with these boundary conditions
so it's not like way out there right
that goes
viral and all of a sudden you have a
video that goes viral and it you know
you are able to double and triple your
base of of users what is that worth to
you yeah I mean it's unbelievable to
think about yeah right and we're not
that far away from that right so if if
Microsoft let's hypothetically say
Microsoft can offer that to you or
Microsoft can offer me a a minime in in
a you know in in part of my thinking
right how much would we how much would
we pay for that agent could we pay you
know many tens of thousands of dollars
for it I would say we would right in
Enterprises we would pay many tens of
thousands of dollars for it today
Microsoft May collect $1,000 per seat
and the opportunity is many tens of
thousands right so when you put it in
that perspective Microsoft shouldn't
stop
spending because in order to get there
in five years they have to make all the
incremental capex spend that is
happening today to to refine and train
their models and I use Microsoft Loosely
and just to explain my point it could be
any one of these companies that can
offer you this digital agent um that
goes and does work for you I mean
Microsoft I mean uh Jensen today was at
the Goldman Sachs conference um he's the
CEO of
Nvidia and he talked about AI not only
replacing kind of data center like old
data centers you talk about a trillion
dollars of data center um compute out
there that needs to be replaced by
accelerated compute he talked about how
skills are going to get replaced by Ai
and or a I is going to produce skills or
be able to have skills and this is along
the same lines of thinking as as what I
just Illustrated so hearing him say that
gave me more conviction in in where
we're going and more conviction that you
know everyone thinks that you know capex
is just going to stop I mean capex is
not going to just stop because again if
you think about where we're going at the
end point for monetization it is order
of magnitude higher than what can be ma
what can be mon today and how much do
you spend to get there right you know
what's fascinating about that is when we
mentioned like the having like an agent
that can do these things they look like
you they you know all that type of stuff
you know there's there's one aspect of
that where it's the actual like the
productivity aspect right where hey you
can do these things make a viral video
then there's the aspect of hey you could
get all of your time back because you
have somebody who can do these things
right so how much would you pay for the
one resource in your life that's not
renewable a lot probably right right um
so I think that's a really interesting
angle yeah and the thing is Matt we're
not that far away it's going to happen
we've we've seen all of these Mega
transitions in our own careers over the
last you know two decades and we're not
that far away from getting to the point
of having this like you know digital mat
that's sit right that's scary but yes
let's do it
no that's awesome I love it so hey I
want to be respectful of your time um I
know we're out of time here but I love
the conversation I really appreciate you
being on I think it's great if people
want more information about what you
guys are doing at aler about the
concentrated Equity ETF what is the best
place for them to go yeah I think you
could go to our website um
www.al.com um for cnq you it's an
actively um managed ETF that you can
just buy in the open market um like a
ticker so C neq and you can effectively
buy it like it you'd buy any stock um
you know you can have there's a lot of
information that we've written a few a
few different papers on AI which I think
are fantastic everyone should read and
touches on some of the things that we've
talked about and are in process of of
writing some more um because I think
it's such a structural imperative that
people understand all of this so um our
website has just a lot of different um
it has different resources for for
people who are interested in any of us
or in growth investing no it's awesome
um I'll put links in the description of
this video as well so people have easy
access to it but yeah Dr Crawford thank
you so much for being here I really
appreciate it and yeah I thought it was
great hopefully get a chance to talk to
you again soon so what I loved about
this conversation number one is I just
get excited when other people are
excited about future Tech and where
things are going so I loved hearing her
perspective on AI and the vast kind of
opportunity that she still sees which is
a direct contrast to some of the things
that we see online today where everyone
saying it's over it's a bubble it you
know doesn't make any sense and hearing
the view of no actually it's the exact
opposite of that it's bigger than we can
kind of Imagine or Envision right now I
think is more closer to where I land and
clearly with the companies that I put in
my portfolio this year it's obvious that
that's kind of where my head's at now
whether that's right or wrong we only
know over time and one of the things
that's always interesting is when she
talked about the concentrated Equity ETF
was that yeah one of the differentiators
or strengths of the ETF is that it's not
Diversified and I've talked about this
with my own portfolio with you guys that
I don't have a diversification goal in
it and so from my perspective you know
who that ETF is for is people who want
really exposure to high growth companies
and don't want to be kind of held back
by a diversification Rule and I thought
that was a really clear differentiator
and it really makes sense when you talk
about if you believe Ai and future Tech
is really going to drive the market over
the next decade but it's not your area
of expertise then it may make sense to
say you know what I'm going to go with
these folks at aler because I like their
method I think they're experts and
that's where I'm going to put my money
so again it's about understanding what
ETFs can bring to your portfolio and
maybe how they complement the rest of
the stuff that you have based on what
your goals are as an investor but I was
excited she brought up Cloud flare and
Edge Computing because that was a big
part of my thesis with them and you all
hated it but that's okay I'm excited
about it and I'm going to see where it
goes but let me know what you thought
was the most interesting part of the
interview down in the comments I'll put
links to all the things that we talked
about there in the description and yeah
as always hope you guys have a great day
out there Financial Independence is true
Freedom so keep building and stacking
wins and I'll see you guys in the next
one peace
[Music]
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