AI's Not in a Bubble w/ Dr. Ankur Crawford

Summary

In 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

00:00

📈 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.

05:01

💼 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.

10:01

🚀 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.

15:02

💹 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.

20:03

🌐 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.

Keywords

💡AI

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the video, AI is a central theme as Dr. Crawford discusses its potential to revolutionize industries and create exponential innovation. The conversation touches on AI's current applications and its future impact, suggesting that AI is not a bubble but a transformative technology with significant long-term value.

💡ETF

An Exchange-Traded Fund (ETF) is a type of investment fund and exchange-traded product, traded on stock exchanges much like individual stocks. In the script, the discussion revolves around the Concentrated Equity ETF, which is actively managed and seeks to invest in companies with promising growth potential. The video highlights the ETF's strategy and how it fits into the broader investment landscape, particularly for investors interested in AI and technology sectors.

💡Macroeconomics

Macroeconomics is the study of the economy as a whole, including topics like inflation, unemployment, and economic growth. The video mentions macroeconomic factors like rate cuts and their influence on market views and investment decisions. Dr. Crawford suggests that while macroeconomic trends are important, investors should also focus on company fundamentals and long-term growth prospects.

💡Big Tech

Big Tech refers to a collection of large technology companies that have a significant influence on the market, economy, and culture. In the context of the video, Big Tech is discussed as a key driver of market growth, particularly in the realm of AI. Dr. Crawford argues that companies like Microsoft, Amazon, and Nvidia are well-positioned to lead the AI revolution due to their resources and strategic positioning.

💡Concentrated Equity ETF

A Concentrated Equity ETF is a type of investment fund that holds a relatively small number of stocks, typically between 20 to 30, focusing on companies with high growth potential. The video discusses the Concentrated Equity ETF managed by Alger, which is actively managed and seeks to capitalize on transformative changes in the market, particularly in the technology sector.

💡Fundamental Analysis

Fundamental analysis is a method of evaluating a security's intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. In the script, Dr. Crawford emphasizes the importance of fundamental analysis in assessing the potential of companies, especially in the context of AI and technology investments.

💡Portfolio Construction

Portfolio construction refers to the process of selecting and combining various assets, such as stocks, bonds, and ETFs, to achieve a desired level of risk and return. The video discusses how investors might adjust their portfolio construction in response to macroeconomic factors and market transitions, such as adding interest rate-sensitive assets during periods of rate cuts.

💡Rate Cuts

Rate cuts refer to the reduction of interest rates by a country's central bank, often done to stimulate economic growth. In the video, rate cuts are discussed as a potential influence on market behavior and investment decisions. Dr. Crawford suggests that while rate cuts are important to consider, they should be evaluated in conjunction with the broader economic context and company fundamentals.

💡Retail Investors

Retail investors are individual investors who invest in financial markets for their personal accounts, as opposed to institutional investors. The video addresses retail investors and their approach to market fluctuations, advising them to focus on long-term investment strategies rather than reacting to every market headline or macroeconomic event.

💡Geopolitics

Geopolitics is the study of how political dynamics are influenced by geographic factors, including the global distribution of power. In the context of the video, geopolitics is mentioned in relation to AI dominance, suggesting that maintaining a leading position in AI development is crucial for geopolitical reasons. Dr. Crawford implies that the geopolitical implications of AI are significant and potentially underappreciated by the market.

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

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