First Draft Live Ep 15: AI Bubble Math Meets Real Estate (with Michael Pearce)

The AI trade is reshaping markets and CRE is riding shotgun.

A surge of capital into chips and data centers has turned AI into the backbone of U.S. growth — pushing tech spending to dot-com-era highs and doubling data center pipelines.

But will it pay off? Alarm bells are ringing that adoption may not match optimism. That could quickly mean swathes of massive data centers sitting vacant.

Michael Pearce, deputy chief U.S. economist at Oxford Economics, sees the opposite problem. On this week’s episode, he said adoption curves are running much closer to forecasts.

His concern: CRE can’t keep up.

“All the limits are on the supply side,” he said. “On the demand side it feels limitless.”

Episode Transcript

Mark Bonner (00:09):
Okay. Welcome to First Draft Live. It's Friday,
September 26. I'm Mark Bonner,editor in chief at BizNow coming
to you live from New York. Thankyou to so many of you for
joining the program today fromThe United States and overseas.
We really appreciate it. Forthose who are new to the program
this week, this is a show wherewe take the mess that is
commercial real estate andwrestle it into something you

(00:31):
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(00:52):
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(01:19):
Today, we've got a story thatfeels uncomfortably familiar.
For years, have warned of an AIbubble. Now the numbers are hard
to ignore. Bain says theindustry needs
$2,000,000,000,000 a year inrevenue by 2030 to fund its
compute build out. But it's onlyon track for about 1 to

(01:39):
1,200,000,000,000.0.
Let me do some math here. That'san $800,000,000,000 shortfall.
What are we gonna do about it?Meanwhile, OpenAI, Oracle,
SoftBank, they just rolled outplans for five more hyperscale
campuses pushing towards sevengigawatts of new load. That's a
lot.
And NVIDIA's market cap hasswollen bigger than the GDP of

(02:03):
most g seven economies. And onthe ground, Northern Virginia
land values are up 60% year overyear. Similar spikes can be seen
in places like Dallas, Phoenix,even Columbus, Ohio. Billions of
dollars are being poured intosites that either may be
tomorrow's backbone ortomorrow's stranded stock. What

(02:24):
does it all mean?
Well, it could be that CRE isunderwriting entire markets on
demand that might notmaterialize fast enough. If the
bubble burst, it won't just betech valuation at stake. It
could be land leases, financing,and the very backbone of
American reindustrialization. Sothe question is, is this the

(02:48):
start of a new generationalsupercycle or is this the setup
for commercial real estate'snext hangover? That's the
question that's on the tabletoday.
And to help us sort the hypefrom the fundamentals, we've got
Michael Pierce, deputy chief USeconomist at Oxford Economics.
Michael, welcome to First DraftLive.

Michael Pearce (03:08):
Thanks for having me. Pleasure to be here.

Mark Bonner (03:11):
So let's just get into it. Is this AI bubble real?
What do you make of it?

Michael Pearce (03:16):
Yeah, I mean, honest data has to be maybe, you
know, there's, I can't think ofany major, major boom in
investment that we've seen goingback centuries where there's not
been at least some speculativeactivity that ends up, making a
loss out of that. But for me, itcomes down to is AI, you know,
the core question here is AItruly a revolutionary technology

(03:38):
that's gonna make us moreproductive. And I, you know, my
answer so far is this, yeah,this does seem to be the real
deal. And everything that I cansee from kind of the demand side
and kind of how AI adoption isrippling through the economy
suggests we're still in the veryearly stages, of this boom. So
if it is a bubble, I thinkthere's still plenty of, plenty
of room left to run over thecoming years.

Mark Bonner (03:59):
There's been some really scary headlines over the
last six months. I assume someof this is media hype, maybe
not. I'd love for you to help mefigure out and my audience what
this really means. But this weekin particular, we've got two
things on deck here that I wannaget into. First, let's start
with Bain.
AI companies will need$2,000,000,000,000 in combined

(04:20):
annual revenue to fund computingpower by 02/1930, but the
revenue is likely to fall$800,000,000,000 short. This is
David Crawford, chairman ofBain's global technology
practice. And I quote, if thecurrent scaling laws hold, AI
will increasingly strain supplychains globally. Then this
morning, Greenlight Capitalfounder David Einhorn said the

(04:43):
trillion dollar build out bycompanies overall, such as
Apple, Meta and OpenAI is soextreme that the eventual
returns are highly uncertain.I'm gonna quote him here.
The numbers that are beingthrown around are so extreme
that it's really, really hard tounderstand them. I'm sure it's
not zero, but there's areasonable chance that a

(05:03):
tremendous amount of capitaldestruction is going to come
through the cycle. What's yourresponse to this, Michael?

Michael Pearce (05:10):
Yeah, I mean, they sound like sensible hedging
statements, know, there's a lotof language there, you know,
this reason, you know,reasonable chance, not zero
chance. Of course, there'salways a chance of, of all this
ending up being worth nothing.But, you know, I always come
back to actually, you know, thistime around, what we're seeing
is a lot of these companiesgenerating very significant

(05:31):
revenues. You know, and thatfeels different from kind of the
late stage bubble hype that,kind of you might associate with
say the .com bubble where, youknow, you had a lot of firms
that were burning through cash,they have no revenues. You know,
they were taking on a lot ofdebt.
I think what's striking so farabout this boom that we've seen
is how much of it is built onretained earnings on private

(05:55):
equity investments. You know,there's not a whole lot of debt
going into this boom relativelyspeaking and the revenues are
there, right? So it's, you know,so far the money is, you know,
the investments have been backedup by real money. And that
suggests to me that, you know,yeah, we, we may run into
problems further down the line,but, but right now this, this

(06:18):
looks like, you know, this hasfurther to run.

Mark Bonner (06:22):
Every boom looks permanent until it doesn't.
We've seen this movie before,Michael. Japan's asset bubble in
the nineteen eighties, the .combubble in the nineties, housing
in the February. Each of thosemoments in time for global
economies had real innovationand lasting winners. Right?
Coming out of the .com bubble,Amazon, they survived. Many did

(06:44):
not. What your your yourspecialty is macroeconomics.
What can the Japan asset bubbleof the eighties or the .com
bubble of the nineties or thehousing bubble in the February
tell us about the moment we'rein right now?

Michael Pearce (06:57):
Yeah. So I think first off, you know, is you're
right kind of looking at wherethe actual old value is and and
how sustainable this this is.And clearly, you know, you go
back to those those times, yousaw this huge unsustainable run
up in valuations, you know,valuations running way ahead of
actual earnings. In in the caseof Japan, you know, those land

(07:20):
values running well, well above,incomes. So what's the actual
investment case here?
I think the investment case isthis is potentially
transformative technology forthe global economy. And so I
always come back to, you know,demand and supply. The demand
for this AI technology is kindof this adoption and rollout
across the broader economy. Now,listen, we did a big study on

(07:42):
this a few years ago, kind ofpredicting out the net impact of
AI on the economy. And, youknow, you have to make all sorts
of assumptions kind of aroundadoption rates, how much it will
do for productivity.
We came up with these three kindof S curves for how demand for
AI will roll out. And so far,what we're seeing is those
actual adoption rates comparedto what we were saying a few

(08:05):
years ago are actually running,you know, much closer to kind of
the optimistic or the highscenario that we laid out rather
than a median expectation. So,you know, I think that's a sign
that we're still on the earlyupswing of the kind of this S
curve in adoption across theeconomy. And one other thing I

(08:25):
will just point out on that, youknow, great census data that
asks firms are you using AI toproduce goods and services, but
also what's your expectation insix months from now? When we
have this persistent optimismgap for the last few years, you
know, people always saying, oh,in six months, we're going to be
using a lot more AI than we aretoday.
Well, that's actually caught upto reality now. You know,

(08:46):
there's the actual adoption isrunning now in line with where
people thought it was going tobe. That, you know, we've had
that huge catch up. So I thinkthat's kind of the key driver of
the demand of this. The, youknow, from my perspective,
doesn't look like it's going toend in the next twelve, eighteen
months.

Mark Bonner (09:03):
So look, I'm going to get into the real estate
aspect aspects of this in a fewminutes, but let's just stay on
the bubble for a second. Allthese all these headlines that
are being made in the financeworld about these warnings, do
you think it's cynical? Do youthink it's in self interest? Is
the media making a mistake bygoing all in on this headline

(09:24):
knowing that it's gonna clickhard? Like, I guess what I'm
trying to figure out here is forall of our viewers and our
listeners, how do you separatethe hype from from the reality
of of the moment that we're inwhen it comes to that narrative
that the bubble is gonna burstand it's gonna be scary a lot of
people, commercial real estatein particular are going be left
holding the bag.
How do you look at this?

Michael Pearce (09:46):
Yeah. So for me, again, it comes down to looking
at those fundamentals. Is thedemand there? My view is yes, it
is there. And then looking atthe investment side, the supply
side of where is all this moneycoming from?
Is it being fueled by, you know,there's a lot of indicators that
would suggest this is highlyspeculative. There were no
revenues there, if a lot of it'sfinanced by debt. And there will

(10:09):
be some of that, and there willbe losers. That's why you always
hear this kind of forest ofwarnings because they, you know,
eventually, you know, can'tthink of any big boom where
there hasn't been accompanied bysome speculative activity that's
gone wrong. But, you know, byand large, I think what marks
out this boom is how much of itis backed by backed by real

(10:30):
money.
This isn't, we're not seeing ahuge rise in business debt. You
know, if we are going toeventually see some of these
more speculative elements thatkind of would be classic
indicators of a kind of a latestage boom, we're not seeing
them yet. Okay.

Mark Bonner (10:48):
If, big if here, if there was going to be a bubble
that burst, where would we feelit first? Now let's start macro
and then let's dive intocommercial real estate.

Michael Pearce (11:01):
Well, I think the big thing, you know, if you
saw this, the puncturing of theoptimism around AI right now, I
think that because so much of itis being driven by these
hyperscalers, and that's beenbacked by, you know, this
tremendous run up in equityvalues. For me, the key
vulnerability to the economytoday comes through that equity
market channel. And I think,know, you'd see that directly,

(11:23):
those firms reducing theirspending, maybe growing their
CapEx a lot more slowly, if wewere to see a major stock price
correction. But listen, I thinkthe broader economy would be at
risk here as well. You know, oneconsistent theme I've heard from
clients is the economy appearsto be defying gravity.
And I do think that AI stories alot of that, you know, strip out

(11:45):
AI related investment, privateinvestments actually declining
so far this year. Strip out thebig gains in the equity market,
chances are The US consumerprobably doesn't look so good
either. So really, I think, youknow, this huge rebound that
we've seen in the financialmarket since kind of April, a
lot of which has been driven byAI, not just, you know, feeding

(12:07):
the actual investment itself,but supporting this broader
consumption outlook, is liftingall boats and making people more
optimistic.

Mark Bonner (12:15):
You're bring it up a good point. Mean, we're
talking about a trillion dollarbuild out across the country
right now. Right? You can'tbuild it fast enough. There are
headwinds on the groundeverywhere, which we can get
into in a second.
But AI CapEx is largely carryingThe US economy, papering over a
lot of the pain that's below thesurface. And the physical
embodiment of that CapEx isphysical spaces. And in this

(12:39):
case, we're talking about datacenters, right? Those are the
structures and the equipmentthat need to be built to make AI
happen for all that innovation.You take that away and The U.
S. Economy looks pretty weak, orat least it's flatlining to some
degree. Supply and demand,right? Tell me about where

(13:03):
you're viewing that right now.Demand is stronger than garlic,
But if supply cools, right, orif AI CapEx slows down, that
does seem like it could be apotential house of cards.
What do you make of thatdynamic?

Michael Pearce (13:20):
Yeah, I think that's where I see kind of all
the risks to AI at the minute,you know, it seems like there's
still this huge latent pool ofdemand for AI services and
products. But really, you know,there's a lot of challenges that
I see on the supply side thatcould trip this trip this bubble
up. You know, just on thephysical side, you know, power
availability. And if it's notour availability, it's not on

(13:44):
impact on power prices. Notjust, you know, then you've got
you're running into issues of,well, you're going to get local
opposition.
People are suffering painbecause their household bills,
utility bills are going up. Andalso they're building this big
slab of concrete that doesn'tcreate any jobs in your area,
you could see a lot more localopposition to these

(14:06):
constructions. So I thinkthere's some physical risks on
the supply side. But there'sprobably a bunch of policy risks
here as well. You know, I thinkone that comes to mind is, you
know, given the tariff news wehad overnight, you know, on
pharma sector, well, you know,one big investigation that's
outstanding is semiconductortariffs.

(14:27):
We don't know what's goinghappen to that. That has the
potential to create a lot ofbottlenecks, and also push up,
push up the price of a lot ofthese investments as well.

Mark Bonner (14:35):
And that's to say nothing of the other tariffs,
right? Because you know, copperprices already super high with a
40% tariff going up even higherin the last forty eight hours
because of a disaster inIndonesia, which is the number
two copper producer in theworld. That is gonna screw up
pro formas on the constructionside even more. Right? So all of
this coming together all atonce, it makes for some

(14:59):
trepidation if you're makingthese big decisions, Michael.
I mean, what is the next shoe todrop you think? Or what is the
thing that you look at in thedata that you fear could be the
tipping point?

Michael Pearce (15:12):
Yeah, I mean, where we have more insight is
kind of on the policy side ofthings. And there, you know, I
think the clouds are gatheringand they're all inflationary and
potentially limiting the supplyside here. You know, whether
it's the direct impact oftariffs, whether it's tighter

(15:32):
immigration policy, which nowseems to be focusing also on
legal migration, you know,that's kind of raised the
challenges of finding skilledworkers to come and help build
out this infrastructure. Wealready see that. We already see
that firms across the economyreport that quality labor is one

(15:53):
of the biggest bottlenecks,biggest constraints on expanding
out there.
So those are kind of some of thefactors that could really help
weigh or slow down thisexpansion?

Mark Bonner (16:06):
So let's go back to this Bain report that came out
this week. Just to reset here,Bain estimates the AI ecosystem
needs $2,000,000,000,000 inannual revenue by 2030 to cover
its build out, but it's trackingcloser to 1,200,000,000,000.0.
That's an $800,000,000,000 hole.For CRE, potentially, that's not
abstract. It means hyperscalersmay lease space today on

(16:28):
assumptions that revenues don'tdeliver tomorrow.
How serious is that$800,000,000,000 funding gap for
real estate, Michael?

Michael Pearce (16:37):
Well, I think, you know, in the near term, it's
only gonna grow. Right? Becauseall the focus is on on building
out capacity first and worryingabout the the the revenues
later. You know, if this, youknow, if we're right that this
is a transformative technologythat we are seeing this adoption
pick up across the economy, thedemand is still going to be

(16:58):
there and we're going to seemuch stronger, much stronger
demand from a much wider baseacross the economy. And so I
think, know, the case isdefinitely there, but the
customers will certainly bethere.
The question is just the priceand the price is a balance
between the demand and supply.But as everything that I'm
seeing so far suggests that allthe problems are on this, you

(17:21):
know, all the limits are on thesupply side, the demand right
now at this stage feelslimitless, but that won't be the
case forever.

Mark Bonner (17:29):
Does it cap valuations for data center
assets?

Michael Pearce (17:33):
Well, I'm just talking about the demand and
supply of compute and thereforedata centers and for these AI
products. I think that adoptionis running very far and I expect
that to continue.

Mark Bonner (17:47):
If you're just joining us, this is First Draft
Live. We're unpacking the AIboom and whether it's really a
bubble with Michael Pierce,Deputy Chief US Economist at
Oxford Economics. Okay. Let'stalk about the ecosystem in
itself. NVIDIA sells trips intoprojects it helps fund.
SoftBank sees operators it alsobacks. Then Oracle lead leases

(18:09):
space it helps develop. It lookslike a virtuous loop, but CRE
has seen how quickly that kindof reflexive structure can flip
when revenues disappoint. We'refresh on our minds as CMBS in
the year 02/2007. Michael, isthis financing model
sustainable, or is it buildingfragility into the system?

Michael Pearce (18:29):
I mean, I always go back to the fundamentals. And
if, you know, if we're rightthat the demand is going to be
there, then I think every allthe other details, you know,
mostly take care of themselves.And for me, you know, when we're
tracking this, it's difficult toget a scale of what we should be
watching to track how usefulthis technology is to the

(18:50):
economy. Right now, it's veryeasy to measure the dollars
going in the investment, thecosts, The benefits, I think,
where people are a lot lessthan. And that has been true of
every technology that we've seengoing back centuries.
And very often, the economicstatistics are not the place to
see that impact first. You know,if we go back to the 2000.com

(19:13):
boom, what we saw there was theGDP statistics, you know, these
IT technologies were not addingto the economy, they weren't
showing up in the data. And itwas only when we changed or, you
know, added better datacollection that we saw that
positive impact build, buildlabor. You know, I think the
best for me leading indicatorright now is what's going on

(19:34):
with corporate profits. And wesee very strong profitability,
not just for these firmsinvolved in the build out, but
the firms across the economythat are already beginning to
start to apply this.
So I think that's, you know, theplace to track this adoption
might be building. And I thinkthat's a positive sign for
ultimately for future demandthere as well.

Mark Bonner (19:56):
So in this ecosystem, right, theoretically,
if something falls apart and theeconomics don't work anymore,
who's left holding the bag?Banks, vendors, landlords?

Michael Pearce (20:10):
Well, right now, it it there doesn't seem to be
much debt backing this. So, youknow, I I think mostly it's
gonna gonna be the direct equityholders that have invested in
these projects and are backingthese names. But like I say, you
know, they're the big spilloveris, you know, a lot of people
hold these names, you know, it'shard to see some part of the AI

(20:31):
ecosystem going down without,you know, seeing a major
friction in the large names, youknow, things like Nvidia method,
they're just too big for thepain to be, narrowly based.
Know, I think the whole economywould feel that slowdown and
that reduction in optimism.Okay.
Let me go to

Mark Bonner (20:49):
a question from the audience. I remember doing bank
workout of server hotel projectsduring the tech wreck of
02/2001. Warehouses that hadbeen converted to server use
with large costs spent on raisedfloors, electrical and
mechanical systems, etc. Thatultimately had to be demoed out
to restore the warehouse use.How will this boom be different

(21:12):
for lenders, Michael?

Michael Pearce (21:15):
Yeah. I mean, listen, you know, that brings up
a good point of of strandedassets. You know, if if this
build out does go too far, andlisten, I think that's that's a
very real risk eventually. Butright now I just don't see I
don't see that in the near term.But clearly, you know, there's a

(21:35):
lot of factors here.
You know, the supply for for me,the biggest factor is if the
supply pipeline is so strong,that we get to a point, you
know, right now demand is easilyoutpacing that supply, but we
get to that point, you know, theflattening of the kind of S
curve of adoption across theeconomy where that supply

(21:56):
outruns the demand. And you seethe price, you know, you see
that reflected in prices. And Ithink that would be the point at
which I'd be very worried aboutkind of this, fallout and the
rise of standard assets. But,you know, my big point is it
still feels like that point isat least a few years away.

Mark Bonner (22:16):
Okay. Let me get one more here. As AI
infrastructure develops over thelifespan of new buildings, will
its size requirements perbuilding decrease in response to
new technology and chips thathave higher capacity and less
space?

Michael Pearce (22:31):
I'm not sure I've got much to add on that
from a macro standpoint. Feelslike everything's building
towards great scale.

Mark Bonner (22:40):
Some of these mega campuses are the size of
Manhattan. Mean, at least that'stheoretically, they're going to
be that size. It's unbelievable.Michael, I know you're a student
of economic history, right? Imean, we kind of touched on a
few different moments in timewhere there were bubbles that
burst.
If you're a commercial realestate player today, right,

(23:02):
which that is the majority ofour audience on the call today
and we'll be listening to onSpotify and Apple later, what
lessons from past bubbles shouldcommercial real estate players
take most seriously right now?What's your greatest insight?

Michael Pearce (23:16):
Yeah, I think it's when, you know, the problem
with the bubble is everyone canfeel that you're in it. And
we're very clearly in the midstof this great transformation,
but knowing, you know, trying toidentify that point of where
you've gone beyond thefundamentals, there's more
speculation than fundamentaldrivers there. You know, for me,

(23:38):
the things I come back to are,is demand is the fundamental,
you know, is the technologyfundamentally useful? And are we
going to still see demand?Everything I see on that front
is still looking healthy.
And then I really worry aboutwell, what's what are the other
players doing in this space? Arewe building overcapacity?
Listen, one thing I will pointout is, know, that hyperscalers

(23:58):
have been sharply raising theirCapEx this year. But when you
look at the forward projections,the growth rates actually taper
off. So I kind of push back onthe notion that we're kind of in
this unconstrained CapEx boom,you know, is some moderation
kind of in the forecast.
You look at kind of theconsensus, what markets expect

(24:18):
the max seven to be spending.You know, if you were, if you
were seeing those continuallybeing ramped up and the other
big speculative development thatyou tend to see is when you get
a lot of investment, that's notbacked by real money. So you see
kind of measures of investment,or CapEx relative to, relative

(24:40):
to revenues relative to income,really beginning to decline. And
you can see, if you look back tothe early 2000s, you can see
that peaked in '98. So kind ofthose last few years of the it
boom, you had this continuinginvestment in the space, even as
the revenues began to start todisappoint.

(25:01):
So, know, that would be kind ofthe warning indicator to look at
for this boom. And and like Isay, that that's still that's
still rising. So there's nothingnothing on the immediate radar,
but it's challenging. It's afast moving space, and there's
there's you know, there's gonnabe some losers.

Mark Bonner (25:21):
So we have to remain vigilant. Speaker Like
who could be a loser?

Michael Pearce (25:27):
One
the friend.com measure thelittle pendant of a friend
speaking. There's clearly some,you know, maybe that's evidence
of speculation. Maybe I'm justgetting old, but an AI companion
or friend that you carry aroundwith you that's going to text

(25:48):
you doesn't seem like doesn'tfeel to me like a, you know, a
fantastic use of resources. So,you know, I think we will see
lots of applications that end upfalling well short of, of
expectations.

Mark Bonner (26:03):
Part of Bain report was and the reason why for the
$800,000,000,000 gap was becausethey don't believe that AI
companies are charging enoughfor the product, right? And
they're basically giving itaway. And there's great tension
there. Some of them are free andopen to the public. Gemini comes

(26:25):
to mind.
OpenAI ChatGPT has a free modelversus a premium model. The
premium model I believe isaround $9 a month. They
insinuated that it should bethree x that if you want to
close the gap, right? Andthere's great fear that on the
consumer level that there is anappetite to pay for it at that

(26:46):
level because it hasn't revealeditself to be that useful again
at the consumer level.Enterprise, a different matter.
How do you square that?

Michael Pearce (26:57):
Yeah, I mean, it feels like it's the same in
every tech revolution, right? Weget these new technologies that
come in, they're free or mostlyfree at the point of service.
And then once they've builtsufficient scale, that's when
you get the monetization piececome in. I feel like, you know,
you can see that happening overthe next few years, you know,
it's going be a range ofbottles. Don't think, you know,
these companies are wedded tothe free premium tier, you know,

(27:20):
obviously that's how theconsumer space is kind of played
out for now, but you know, therewill be advertising.
There will be, I'm sure a rangeof models that, you know, the
key is that other consumers andother firms getting the value
that they see. And that's goingto be the key to, you know, what
they're willing to pay and whatthey're willing to bear.

Mark Bonner (27:40):
I've got an audience member here who wants
to go back to the .com era.Dotcom involved the build out of
a brand new infrastructure,fiber, etcetera. AI is demanding
expansion of existing publicutility I. E. Electricity, which
is also a major headwind fordata centers right now in The
US.
Does that make things differentthis time, Michael?

Michael Pearce (28:01):
I mean, I think it means the challenges are a
lot. I think the challenges onthe supply side are great at
this time, you know, because alot of these things require
things that are controversial,right, like new power lines, new
power stations, you know,potentially, know, big data
centers near population centers.So these are all things that

(28:24):
could generate a lot of publicbacklash and are difficult to
deliver. We're already seeingthat, you know, this kind of
backlog of interconnectionrequests, it's difficult to add
that electricity capacity andwe've not done it. You know, the
last time we saw electricityproduction in this country rise
sustained basis kind of yearover year, you've got to go back
decades.

(28:44):
So it's something we're going tohave to learn to do and learn to
do very quickly. And that's why,you know, for now, kind of all
these risks on the supply sidethat you're just not going to
have the skilled labor base,production in place to support
all this supportinginfrastructure to build it out.
I think that's a lot morechallenging.

Mark Bonner (29:05):
Hey, Michael, my producer is starting to give me
the hook here, but I do want toland on one question. Looking
five years out, what do youthink is the biggest risk here,
that you see for real estate?

Michael Pearce (29:18):
I mean, for me, think the biggest risk is that
people put all their eggs inthis one basket. And, you know,
we see a collapse in the pricethat investment goes way down.
And you look for the bunch ofstranded assets, you know, if
this AI thesis is real, youknow, I think the big lesson

(29:40):
from history is that the effectsof these large technological
changes is to boost the economyoverall. I mean, right now we're
focused on all these negativeheadlines, you know, job losses,
it's getting a lot harder foryoung people to find jobs,
particularly recent collegegrads. And those are real
stories, but look back at everywave of technology.
The result is an economy that'sa lot more productive. It's a

(30:02):
lot larger. And guess what thepeople earning those, know,
generating those revenues go outand spend them. And that's good
for, I think that's good for allasset types, you know, boost
spending across the economy,boost productivity and raises
living standards. That should bea kind of this broader boost for
the entire portfolio rather thanjust narrowly, you know,

(30:23):
narrowly focusing on this one.

Mark Bonner (30:27):
We have to wrap up. Michael, thanks so much for
being here, man.

Michael Pearce (30:31):
Thanks. That was just pretty fun.

Mark Bonner (30:34):
If you missed any part of this episode or wanna
hear earlier shows, you'll findevery conversation on your
favorite podcast app. Justsearch First Live. We'll be back
next Friday with another deepdive into where capital
technology and CRE collide. I'mMark Bonner. This is First Draft
Live.
Have a great weekend, y'all.