August 18, 2026 • 30 mins
Today we review major 13F filings and what they show about positioning across the AI stack, including memory, chips, power, and infrastructure. We highlight concentrated bets in names like SanDisk, Micron, and Alphabet, along with broader exposure to NVIDIA, TSMC, SpaceX, and related infrastructure plays.
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TIMESTAMPS
0:00 AI Money Stacks
2:51 Memory Theses
5:02 Buffett Bets on Google
10:19 The Infrastructure Layer
19:48 Payments and AI Rails
21:21 Consensus Winners Emerge
24:53 Power, Memory, Neoclouds
27:10 Closing
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RESOURCES
Josh: https://x.com/JoshKale
Ejaaz: https://x.com/cryptopunk7213
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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures
Josh works with Anthropic as a contractor. All views expressed are his own and do not represent Anthropic, its leadership, or its affiliates. Nothing in this episode is investment advice.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ejaaz:
This week, every famous investor in America published their investment portfolios for the world to see. (00:00):
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Ejaaz: We're talking about over $200 billion worth of investments across the entire (00:05):
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Ejaaz: AI stack from the likes of Warren Buffett, Ray Dalio, and even our good friend Leopold Ashenbrenner. (00:10):
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Ejaaz: And at surface value, it might look like it's quite bearish. (00:15):
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Ejaaz: They sold a lot of major stocks, including Nvidia and some memory stocks as well. (00:18):
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Ejaaz: But if you look carefully, there's two specific layers within the AI theme that (00:22):
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Ejaaz: they've not only doubled down on, but have increased the pie. (00:26):
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Ejaaz: There's never been more money in the AI sphere before. And we're going to unpack (00:29):
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Ejaaz: all of these and more on today's episode. (00:33):
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Josh: There was an episode that we recorded on July 31st in reference to Leopold's (00:35):
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Josh: 13F, where we said his next 13F filing is going to be one of the most exciting (00:38):
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Josh: episodes of all time. And listen, we are here. (00:43):
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Ejaaz: It's exciting. (00:46):
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Josh: It's exciting, guaranteed. I will say it's not exactly how we imagined this (00:48):
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Josh: forecast going, because what we're looking at here is basically a memoritum, (00:51):
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Josh: how do you say it when someone died? (00:58):
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Ejaaz: Like Leopold's dead. Moratorium. Yeah. Yes. (00:59):
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Josh: That's what we're looking at. We're looking at a sheet of paper from a company (01:02):
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Josh: that no longer exists because as we know, Leopold was liquidated tragically. (01:06):
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Josh: Now, 13 Fs, we might want to start there just so you kind of have an idea of (01:09):
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Josh: what's going on here. Basically, any company that trades (01:13):
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Josh: equities over $100 million must disclose their positions quarterly within 45 (01:16):
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Josh: days of the quarter end. So what we're looking at here and throughout this episode (01:21):
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Josh: is what those snapshots look like across all the top investment firms in the (01:24):
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Josh: country and in the world. (01:27):
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Josh: And we're going to try to derive some conclusions from that. (01:29):
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Josh: But to start, we have to go to Leopold's portfolio because everyone's going (01:31):
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Josh: to want to know what were the stocks that he was in that blew him up? (01:35):
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Josh: Because as we know from the previous episode, which if you haven't watched, (01:38):
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Josh: I highly suggest the Wall Street darling no longer owns public positions. (01:40):
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Josh: And it's because we have some numbers and it looks like the largest holding (01:45):
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Josh: by far was Sandisk and Micron. (01:49):
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Josh: He was very much memory pilled. I think the tough thing about this is like directionally, (01:51):
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Josh: I think he was correct. He just got totally liquidated, but Sandisk's position (01:56):
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Josh: was 28.5% of the book. He had Micron at 28% of the book. (01:59):
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Josh: And then, I mean, together, that's over half of the book is in Micron. (02:03):
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Josh: And then there's Bloom Energy at nine and a half percent. We know how much he was up on that. (02:06):
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Josh: We have TSMC, Nebius, Core, we have a couple of the neoclouds, (02:10):
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Josh: and then everything else combines for about 18% of the portfolio. (02:12):
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Josh: So he was heavily, heavily, heavily involved in these memory stocks. (02:15):
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Josh: We know he was using some leverage, and it appears as if that's what blew him up. (02:19):
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Ejaaz: Yeah. So the saddest part about this is probably all of these positions have been decimated. (02:23):
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Ejaaz: I saw rumors, I think it was reported from Bloomberg about a week ago that he (02:28):
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Ejaaz: now has a casual, you know, 500 to a billion dollar open equity position, (02:32):
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Ejaaz: but the majority still lies in his anthropic stake for now. (02:37):
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Ejaaz: But I think if we look at the Leopold thesis in general, which was doubling (02:40):
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Ejaaz: down on AI infrastructure, particularly in memory and neoclouds, (02:45):
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Ejaaz: That thesis is still very alive and well. (02:49):
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Ejaaz: And let's like pause on the memory position. It's had a pretty rocky month. (02:51):
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Ejaaz: If you remember, I think two weeks ago, we were reporting on SK Hynex reporting (02:57):
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Ejaaz: their best quarterly earnings ever. (03:02):
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Ejaaz: They made more money in a single quarter than they did in the entire year last year. (03:04):
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Ejaaz: But their stock tanked about 20% the preceding week. (03:09):
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Ejaaz: And so the thesis behind that was people thought that memory investors were (03:13):
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Ejaaz: too overleveraged and that we were reaching a top where GPU infrastructure, (03:18):
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Ejaaz: NVIDIA, and all the people that were buying memory could not want to buy more memory. (03:23):
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Ejaaz: Recent news has been revealed from SanDisk over their investing day that not (03:27):
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Ejaaz: only is that not true, but all these major investors that we're going to be (03:31):
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Ejaaz: covering in this episode today have doubled down and bought more, (03:35):
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Ejaaz: especially at the lows recently. (03:38):
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Ejaaz: And also SanDisk in particular has developed this new type of memory. (03:40):
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Ejaaz: It's called high bandwidth flash. And I just want to take like 20 seconds to describe what this is. (03:45):
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Ejaaz: There's a couple different types of memory. There's DRAM, which is like your standard memory type. (03:49):
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Ejaaz: There's HBM, which is your high bandwidth memory, which is specialized for AI GPU specifically. (03:53):
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Ejaaz: And then there's this thing called high bandwidth flash, which is this new thing, (03:58):
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Ejaaz: which was created by SanDisk and honestly dominated by them. (04:01):
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Ejaaz: And it's used for like inference mainly. and inference recently has become like (04:04):
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Ejaaz: the major trend in AI. It's actually consuming so much CapEx spend for the hyperscalers (04:08):
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Ejaaz: from Google, Amazon, and the likes. (04:14):
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Ejaaz: And so SanDisk in particular stands to benefit the most from this. (04:15):
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Ejaaz: And they have this new memory type, which is being ordered or backlogged already into the end of 2027. (04:19):
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Ejaaz: So this is a new revenue opportunity for them. And we haven't seen exceeding (04:24):
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Ejaaz: demand like this ever before. So the point is memory, the memory argument is (04:28):
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Ejaaz: still very strong. And Leopold was right. He just, he was too over-leathered, man. (04:31):
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Josh: That's the tragic part. is like the thesis is coherent and it still stands. (04:34):
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Josh: And there was nothing wrong about his positions or his like directional ideas (04:39):
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Josh: of where the market was going. (04:44):
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Josh: He just did it all wrong because he was using improper position sizing and most (04:45):
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Josh: importantly, leverage. I mean, this is what happens when you use leverage. (04:49):
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Josh: Everybody knows this. So I think it's an interesting peek into what could have (04:52):
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Josh: been like directionally, the stock names look strong. It's just the way he positioned (04:56):
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Josh: didn't look nearly as strong. (05:00):
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Josh: There is another company who reported their 13F this week that I think it's (05:02):
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Josh: worth highlighting who is. (05:06):
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Josh: When you think of the strongest, they're about as strong as it gets. (05:08):
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Josh: These people have been around forever. This is Warren Buffett's Berkshire Hathaway. (05:10):
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Josh: They are always really interesting because they move in a way similar to the (05:14):
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Josh: way Apple does. They move very slow. (05:19):
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Josh: They're normally the last mover. When they do so, they do so with a tremendous (05:21):
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Josh: amount of size and conviction. (05:24):
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Josh: Now, as we know, Berkshire Hathaway is no longer run by Warren Buffett. (05:26):
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Josh: Unfortunately, no longer run by Charlie Munger either. And Greg Abel is now (05:30):
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Josh: at the helm of this. So Greg Abel is the new guy in charge. And he has joined (05:34):
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Josh: Berkshire and has begun deploying capital at pretty high rates. (05:38):
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Josh: The biggest ad of the quarter, which was 17 billion added, was for Google or (05:42):
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Josh: Alphabet, which was really surprising to see because why would they be buying (05:47):
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Josh: Google instead of buying the memory companies? And I think we have like a thesis. (05:51):
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Josh: I'll cover the rest first before we get into why. (05:56):
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Josh: But it looks like they've added 44% of Delta, of Macy's, of Lenar. (05:57):
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Josh: So they're very much moving towards a (06:03):
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Josh: This is kind of like the Joshua Kushner thing where they're like, (06:06):
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Josh: okay, who's been around forever? And then who's going to win on the frontier? (06:08):
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Josh: And that feels like kind of how Warren Buffett and Berkshire are placing themselves (06:12):
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Josh: here. But the Google thing, I want to talk about the Google thing, (06:16):
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Josh: EJS. Why are they buying so much Google? (06:18):
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Ejaaz: So I think it's a thesis that you and I have been very fond of for over many years now. (06:19):
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Ejaaz: Google is the only company on earth that owns the entire stack for AI. (06:26):
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Ejaaz: Now, I just want to emphasize how important this is. Like, they're not only (06:31):
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Ejaaz: creators of AI models, but they're also creators of custom GPUs that run and train those AI models. (06:35):
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Ejaaz: They're also creators of the distribution platforms. The number one in the world, (06:41):
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Ejaaz: by the way, you've got Google search. Obviously, you've got Gmail, (06:45):
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Ejaaz: you've got G Suite, you've got Android, you've got so many different Google (06:47):
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Ejaaz: products that distribute to hundreds and hundreds of millions of people every single day. (06:51):
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Ejaaz: So they have the ultimate distribution platform, but they also own all the infrastructure, (06:55):
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Ejaaz: the power that is required to fund all of this. (06:59):
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Ejaaz: And they have amazing amounts of capbacks. I think Google actually this year (07:01):
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Ejaaz: takes the crown for spending the most. I think they're on track to spend around (07:05):
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Ejaaz: $250 billion by the end of the year. (07:08):
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Ejaaz: If Google is the only company that owns or dominates across the entire stack (07:11):
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Ejaaz: in AI, that is an amazing company to own because they can fine tune each of (07:15):
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Ejaaz: the different layers for their particular product. (07:20):
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Ejaaz: So why that's important is let's say you look at Google search data and you (07:23):
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Ejaaz: notice that customers really like buying houses in a specific area at this time (07:26):
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Ejaaz: of the year, they can orient their own AI model to (07:32):
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Ejaaz: Produce and serve up adverts or suggestions to people to shop in a particular type of way. (07:36):
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Ejaaz: And that kind of uniformity or like hyper-specificity is really hard to nail (07:42):
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Ejaaz: down if you are just a model lab creator or if you're just a GPU producer. (07:47):
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Ejaaz: So that's really powerful for the thesis in general for Google. (07:51):
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Ejaaz: Now, my question to you, Josh, is do you think... (07:54):
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Ejaaz: This happened before the fallout within Google. When Dan Sosibis stepped aside, (07:57):
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Ejaaz: Jeff Dean left, I have a feeling it is. So I wonder if they've cut down their (08:02):
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Ejaaz: position since, but I still think Google's a good bet. (08:06):
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Josh: Yeah, I would bet this happened beforehand. And I would bet that it's also not (08:09):
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Josh: really going to change their mind because I don't think it materially affects (08:12):
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Josh: the business. In fact, it may be a positive. (08:15):
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Josh: It's like, I remember seeing this post from a long time ago that was basically (08:18):
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Josh: like, Google isn't taking themselves seriously until they start firing the leadership (08:22):
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Josh: that put them in this position. (08:25):
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Josh: And I mean, in a way, that's kind of what's happening here. (08:26):
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Josh: The leadership who put them in this position where they had all the technology (08:29):
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Josh: did not capitalize is starting to rotate and cycle out. There is Fresh Blood, (08:32):
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Josh: who I'm sure is very hungry. (08:37):
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Josh: Sergey Brin is back. He is kind of in wartime mode. (08:38):
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Josh: And I mean, Google is this remarkably incredible business. And what we're going (08:41):
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Josh: to find as we go through the remaining 13 filings here is that, (08:44):
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Josh: I mean, spoiler alert, the two biggest winners this quarter are Amazon and Google. (08:47):
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Josh: Everyone loves the hyperscalers. Everyone loves the people who are spending (08:51):
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Josh: huge amounts of CapEx because it's easy for them to project revenues. (08:54):
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Josh: For these newer companies, when they spend a lot of money, it's high risk. (08:58):
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Josh: They haven't proven their revenue over time. (09:00):
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Josh: But in the case of Google, they're projecting unbelievable margins on their Google Cloud services. (09:02):
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Josh: They have the increasing capability of building their own hardware chips, (09:07):
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Josh: like their TPUs and their Ironwoods that they have. (09:10):
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Josh: And they have this entire ecosystem that they've built with a very strong moat. (09:12):
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Josh: And it seems like that's not going anywhere anytime soon. So Google is just (09:17):
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Josh: this unbelievable business. (09:20):
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Josh: Same thing with Amazon. They're companies with huge amounts of capital on their (09:21):
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Josh: balance sheets. They're companies that are spending it. (09:25):
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Ejaaz: These things are pretty underpriced, man. They're pretty underpriced. (09:27):
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Josh: On a relative basis, they're not trading at a very high multiple, (09:30):
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Josh: even though they're the only companies with proven track records that are showing quarter over quarter. (09:32):
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Josh: We're spending all this capex, but look at the returns that we've had on this capex. (09:37):
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Josh: There's this amazing stat about Google and I have no idea what the specifics (09:41):
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Josh: are, but I remember reading it and being like, oh my God, this is so right. (09:45):
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Josh: Where every dollar Google invested yielded say like $2.8 in return or something (09:48):
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Josh: like that, where since, since the inception of the company. (09:53):
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Josh: So when you hear a company like Google, who is one of the best capital allocators (09:56):
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Josh: in the world over the course of the last three decades saying, (09:59):
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Josh: not only are we going to spend a lot of money, because we are so high conviction (10:02):
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Josh: that these investments will pay off in the long run, I think you gotta get pretty (10:08):
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Josh: excited about that because as a capital allocator, there's not many people better than Google. (10:11):
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Josh: So that is why I presume Berkshire, we see taking a pretty large position in this. (10:15):
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Josh: But now we have to move over to what feels like a home for us. (10:19):
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Josh: I think this is the Brad Gershner, the Gavin Baker, the NVIDIA portfolio. (10:23):
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Josh: These are what the companies that I think like, when we think of the companies (10:27):
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Josh: we wanna invest in, this feels most true to me at least. (10:30):
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Josh: The number one holding of all of them, NVIDIA. (10:34):
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Josh: Like $2 billion is just crazy. It's like $1.9 billion they have. (10:36):
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Josh: Second for Brad Gerstner is Cerebrus at $1.6 billion. Then there's Meta, TSM, CoreWeave, ARM. (10:40):
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Josh: Gavin Baker, on the other hand, $4.7 billion position in SpaceX, (10:46):
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Josh: then Micron, Cerebrus, Astero Labs, Siena, and Credo. (10:51):
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Josh: Those bottom ones I don't even recognize, but that's kind of how we could think (10:55):
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Josh: of the top two, perhaps like Twitter traders, the top traders on X. (10:58):
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Josh: Here's kind of the position that they find themselves in. (11:02):
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Ejaaz: Yeah, I mean, if I were to bucket these investors in a particular group, (11:04):
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Ejaaz: it's like the forward looking group, right? They're like the higher risk takers, (11:07):
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Ejaaz: but they're playing with like much bigger capital allocations. (11:11):
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Ejaaz: It's funny you mentioned the SpaceX 4.6 billion position from Gavin Baker. (11:14):
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Ejaaz: This was his biggest win. I was listening to a podcast of him on the All In show just yesterday. (11:19):
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Ejaaz: And he was basically like, yeah, this is like one of my biggest winnings. (11:25):
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Ejaaz: But like what I'm most excited about right now is the power and optics trade, (11:27):
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Ejaaz: which seemingly is a big theme amongst these particular investors in particular. (11:33):
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Ejaaz: So just to give you a kind of like lay of the land, when you invest in AI, (11:37):
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Ejaaz: the typical names that people look at are things like NVIDIA, (11:42):
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Ejaaz: they look at some of the hyperscalers that were mentioned already, (11:45):
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Ejaaz: which is like Google and Amazon. (11:47):
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Ejaaz: And then if you kind of dig a layer deeper, they're like, oh no, (11:49):
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Ejaaz: all these guys are going to need a lot of memory. (11:51):
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Ejaaz: So you invest in the likes of SanDisk, Micron, SK Hynix, these are names that (11:54):
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Ejaaz: we've already mentioned on the show multiple times before. (11:58):
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Ejaaz: But something that we haven't really opined on is this idea of power. (12:01):
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Ejaaz: So if you have all these expensive GPUs that NVIDIA is making, (12:05):
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Ejaaz: if you have all this memory to make these GPUs, (12:08):
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Ejaaz: you still need power to turn these things on. But also, there is tons of data (12:10):
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Ejaaz: that these GPUs are generating that they need to kind of like transfer between these GPUs. (12:16):
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Ejaaz: And that's something that Gavin Baker specifically has identified really early on. (12:21):
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Ejaaz: And he's winning quite a lot through the likes of companies like Coherent Corp. (12:25):
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Ejaaz: So let me explain sort of very quickly why this is important. (12:29):
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Ejaaz: So if you look at the sector of photonics, which basically means light. (12:33):
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Ejaaz: When you have a ton of GPUs in your data centers, it gets really arduous to (12:38):
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Ejaaz: transfer data between these GPUs, especially if you rack up hundreds of thousands (12:43):
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Ejaaz: of millions of GPUs, which is what Elon Musk is basically doing. (12:48):
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Ejaaz: Right now, the way to transfer data between GPUs is using copper wires, (12:51):
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Ejaaz: and it uses electricity. (12:55):
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Ejaaz: It's pretty good. It's been used for decades now at this point, (12:56):
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Ejaaz: But we've reached a point where there's so many GPUs that it becomes incredibly (12:59):
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Ejaaz: inefficient and cost inefficient as well. So you waste power and you waste a lot of money. (13:03):
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Ejaaz: The solution to this is basically using light. And you heard me correctly, (13:07):
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Ejaaz: like literal light to transfer data. And this solves a problem where it's much, (13:11):
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Ejaaz: much cheaper and you can transfer data at rapid speeds over very great lengths. (13:16):
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Ejaaz: And the only way to do this is through companies like Coherent, (13:20):
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Ejaaz: through companies like GE Vanova, who basically create the materials and the (13:24):
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Ejaaz: kind of tiny infrastructure tools that kind of like latch onto your GPUs that'll (13:29):
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Ejaaz: allow yourself to do this. (13:33):
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Ejaaz: And we've seen this trade become quite consensus over the years so far. (13:34):
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Ejaaz: You look at Coherent Group is kind of like one of the major manufacturers here, (13:39):
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Ejaaz: which Gavin Baker has taken a pretty big position in. And year to date, they're up 85%. (13:42):
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Ejaaz: If you look at this position actually here on our artifact that we have here, (13:47):
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Ejaaz: he's taken a major position in Astero Labs, which helps with the interconnects (13:51):
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Ejaaz: between GPUs. So basically like the plumbing, (13:55):
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Ejaaz: The wiring, the ability to transfer tons of data and information across the (13:57):
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Ejaaz: GPUs is where all the money has been flowing. And it's not just a Gavin Baker thing. (14:02):
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Ejaaz: It is a Brad Gerstner thing. And it is pretty similar across traditional investors (14:06):
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Ejaaz: as well, including like Ray Dalio. So it's cool to see. And I think it's something (14:10):
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Ejaaz: that I'm keeping my eye on quite astutely, actually. (14:13):
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Josh: You can kind of see these companies based on their size and their risk exposure (14:16):
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Josh: going out the curve. Like we have Berkshire, who's right at the core. (14:19):
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Josh: You're buying Amazon, you're buying Google. (14:23):
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Josh: Those types of companies are going to be slower more steady growth much more (14:24):
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Josh: stable then there's people like gavin people like brad gerstner they're going (14:28):
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Josh: the next concentric circle out of the sloop they're going to the infrastructure layer (14:32):
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Josh: what is required in order to generate tokens it's optics it's memory it's like (14:36):
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Josh: going further and further out the stack that's kind of what we're seeing with (14:40):
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Josh: them and it has been playing out really well another thing i wanted to mention (14:43):
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Josh: in Gavin's portfolio is that (14:46):
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Josh: he has a huge $2.3 billion. (14:48):
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Josh: Position on QQQ puts. (14:52):
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Josh: And for those that aren't familiar, that basically means he's buying the right (14:54):
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Josh: to own shares of the QQQ, which is representative of the index at the current (14:57):
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Josh: price, meaning it's insurance in the case that it goes down. (15:01):
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Josh: So I find this interesting too. And we saw this with Leopold's portfolio as well, where everyone (15:04):
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Josh: has this or not everyone, but there are a few people that have this hedge baked (15:09):
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Josh: into their portfolios currently where if the market goes down they can still (15:12):
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Josh: survive they're really just making a very specific hyper concentrated bet in this case on ai hardware (15:16):
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Josh: the infrastructure layer so even if they're wrong even if the market does go down (15:22):
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Josh: but ai hardware still continues to do well they can win and i find it interesting (15:27):
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Josh: that they do have this hedge put in place which is kind of cool there's also (15:31):
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Josh: nvidia which i found interesting (15:34):
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Josh: and apparently they they also filed a 13f because they i mean as a company they (15:36):
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Josh: own quite a bit of things the first one being intel they own 30 billion dollars (15:40):
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Josh: of intel which is great a pretty large position yeah i mean good good place (15:45):
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Josh: to be it's funny you think of intel and nvidia as like. (15:48):
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Josh: Total competitors but nvidia owns like quite a big chunk of change in that company (15:51):
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Josh: nvidia also has a second biggest holding being spacex which we all know i mean (15:55):
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Josh: this clearly makes sense spacex is going to (16:00):
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Josh: be exclusively buying nvidia gpus to power all the new data centers then also (16:03):
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Josh: there's core weave there's coherent there's nokia there's synopsis (16:07):
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Josh: there's this interesting thing where there is kind of like the circular economy (16:10):
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Josh: type questions going on we're like okay nvidia invests core we have a nebius (16:15):
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Josh: then they take that capital to buy nvidia gpus which shows up as nvidia revenue (16:20):
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Josh: they have these companies on their cap table that they are investing in and (16:23):
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Josh: therefore collecting revenue from. (16:26):
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Josh: I mean, at the end of the day, this is kind of the general play from the people (16:28):
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Josh: who are in the trenches in the world of AI. (16:31):
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Josh: A lot of infrastructure, a lot of those like higher level purchases into Intel, (16:33):
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Josh: into SpaceX, into the neoclouds. That's what they're thinking about. (16:38):
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Ejaaz: If you are considering investing in this space, the number one North Star you (16:41):
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Ejaaz: should always ask yourself is, (16:47):
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Ejaaz: will the demand for AI products, AI tools, AI models be greater 10 years from now than it is today? (16:49):
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Ejaaz: If your belief is yes, then all of these things, infrastructurally, (16:57):
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Ejaaz: especially involved in physical atoms like GPUs, like energy, (17:02):
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Ejaaz: like power, is all going to be required and going up. (17:05):
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Ejaaz: Now, of course, you need to make sure that you are backing the types of companies (17:08):
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Ejaaz: and builders that are actually going to execute on this. (17:13):
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Ejaaz: And when I think of like the dummies guide to what to kind of like support, (17:15):
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Ejaaz: I look at NVIDIA's portfolio, essentially, because there's no one better than (17:20):
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Ejaaz: Jensen Huang, who has a much deeper insight as to what is actually being built (17:24):
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Ejaaz: and where the demand actually is. (17:28):
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Ejaaz: He said on a recent, I think it was like an interview panel, (17:30):
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Ejaaz: or maybe it was like at one of these conferences that he spoke at, (17:33):
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Ejaaz: that people are questioning (17:35):
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Ejaaz: Whether some of these AI labs or some of these hyperscalers are actually seeing (17:37):
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Ejaaz: demand for the AI models and products that they're offering, (17:41):
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Ejaaz: like Microsoft and Google, for example, prior to their quarterly earnings, (17:44):
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Ejaaz: everyone was doubting them. (17:47):
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Ejaaz: Then they released their quarterly earnings. And not only has their revenue (17:48):
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Ejaaz: gone up like 5x over the last quarter, but they've also seen revenue margins specifically go up. (17:51):
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Ejaaz: And it's the same trend that you see across neoclouds, hyperscalers, (17:58):
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Ejaaz: as well as some of these CPU companies. (18:02):
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Ejaaz: So you see his biggest position is a $30 billion stake in Intel. (18:04):
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Ejaaz: Now, I want to remind everyone that I think it was midway last year that he (18:08):
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Ejaaz: put a $5 billion investment into Intel to own, I think it was like, (18:12):
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Ejaaz: what was it, like a 5% stake in them? (18:16):
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Ejaaz: He invested alongside the US government. (18:18):
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Ejaaz: And the main reason for that was unclear at the time, but today is very clear. (18:21):
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Ejaaz: Intel creates bleeding-edge CPUs. In order to orchestrate all these hundreds (18:25):
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Ejaaz: of thousands of GPUs, you need (18:30):
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Ejaaz: things like CPUs to make sure that your AI agents make the right tool calls (18:32):
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Ejaaz: and to make sure that they operate efficiently and fast enough for you to get (18:37):
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Ejaaz: your answer to your prompt. (18:40):
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Ejaaz: And this is what all of these companies are that NVIDIA is investing in. (18:41):
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Ejaaz: And you see this collectively across so many of the different funds. (18:45):
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Ejaaz: They're betting on AI demand just being higher. (18:48):
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Ejaaz: And if that's the case, then you're going to need more neoclouds. (18:51):
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Ejaaz: You're going to need more hyperscalers you are going to need way more ai models (18:53):
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Ejaaz: and you're going to need a way to route across all of them you need the power (18:57):
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Ejaaz: to like power all of them so this just makes a lot of sense to (19:00):
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Josh: Me yeah no it's pretty interesting i guess now we could kind of move down to (19:03):
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Josh: the like the rapid fire versions of just like who who is left here one of the (19:05):
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Josh: noteworthy investors bill ackman (19:09):
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Josh: we have uh he is positioning himself mostly in payments which i find interesting (19:11):
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Josh: his new positions are visa mastercard, (19:16):
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Josh: s&p global and netflix which is a little bizarre and when you think about that (19:19):
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Josh: one you're like huh why payments and then you think well who did stripe just (19:23):
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Josh: acquire um it's just acquired open router it's like it turns out payment infrastructure (19:26):
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Josh: is due for an entire overhaul (19:31):
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Josh: and it seems like if (19:33):
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Josh: you are betting on that you are almost shorting visa and mastercard uh not buying (19:35):
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Josh: visa mastercard so i'd love to talk about, (19:40):
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Josh: why i'd love to ask him like why are you going along these companies when everybody's (19:42):
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Josh: actively working to sabotage and destroy them. (19:46):
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Josh: Like the credit card providers, for those who don't know, they normally take (19:49):
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Josh: an X amount of pennies and like 2.9%, 2.7% of every transaction, fairly large. (19:52):
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Josh: And a lot of people are kind of sick of paying that. And it seems like AA agents (19:57):
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Josh: are needing their own infrastructure lay in order to make these payments. (20:01):
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Josh: So I find the Visa and MasterCard pretty interesting. (20:03):
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Josh: There's a few other noteworthy ones. There's... (20:07):
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Josh: This guy, Sam Klarna, who runs apparently $5.4 billion worth of money. (20:09):
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Josh: His number one is Amazon. I mean, (20:14):
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Josh: it seems like there's a lot of people in Amazon being the number one. (20:17):
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Josh: Tiger Global, I think they had theirs as number one. Also, David Tepper, (20:20):
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Josh: his number one was Amazon. A lot of people are really excited about Amazon. (20:24):
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Ejaaz: I'm just looking at this and I'm seeing like a lot of confusion. (20:27):
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Ejaaz: Like you've got Bill Ackman buying all the finance rail companies, (20:30):
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Ejaaz: but he's trimming Amazon down 25%. Then you got Seth Klarman buying Amazon. (20:33):
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Ejaaz: On. Then you got Terry Smith dumping Visa, dumping Alphabet. (20:37):
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Ejaaz: And so I'm like, okay, some of these funds kind of agree with each other. Some of them don't. (20:41):
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Ejaaz: I think on your point around why Ackman might be buying the financial rails (20:46):
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Ejaaz: and why Stripe just acquired Open Router, I'm realizing that (20:50):
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Ejaaz: the whole thesis of plumbing AI, I want to buy tokens and I want to convert (20:54):
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Ejaaz: those tokens into intelligence that makes my business earn more money. (21:00):
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Ejaaz: Stripe is perfectly positioned for that. Visa and MasterCard perfectly positioned (21:03):
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Ejaaz: for that because they already have the distribution to all of these different (21:07):
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Ejaaz: companies' financial books, right? They're already getting paid. (21:09):
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Ejaaz: So for them to flip on a switch and say, hey, we can also provide you and serve (21:12):
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Ejaaz: you the inference for all these different models might actually be really attractive. (21:16):
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Ejaaz: Maybe that's my tinfoil hat guess, but. (21:19):
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Josh: Yeah, well, all of these things also require agents. And we're going to have (21:21):
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Josh: to talk about agents again because of our friend and sponsor Ledger, (21:24):
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Josh: who is building an infrastructure for agents in which there's a three part solution. (21:28):
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Josh: If the agents propose, the humans (21:32):
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Josh: approve, the Ledger signer enforces the transactions that are being made. (21:34):
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Josh: They built this really neat Ledger agent stack that allows you to use their (21:38):
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Josh: open source tools to work with agents because chances are, I mean, (21:41):
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Josh: if you're building with agents, you're pretty worried about security. (21:44):
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Josh: There's been a lot of breakouts from companies like open ai and anthropic recently (21:47):
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Josh: you want to lock that down you do so with this hardware (21:51):
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Josh: process that ledger has they work with cloud code they work with codex it works (21:54):
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Josh: with cursor it's all totally open source for you to try out today and you can find more in (21:59):
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Josh: the link in the description below thank you to ledger for sponsoring this video (22:02):
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Josh: and as we get to the final segment of the show we have to make the you have (22:06):
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Josh: to answer the question like okay what is the smart money actually buying in (22:10):
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Josh: consensus after going through all these portfolios after seeing all these companies (22:13):
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Josh: what are the largest winners and losers and we have this really nice chart on (22:17):
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Josh: screen for those who are watching on spotify youtube wherever you get your videos (22:21):
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Josh: it shows kind of where everyone's been adding and i see this line down the board (22:24):
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Josh: of tepper who seems to have added like pretty much everything they're going across the board. (22:28):
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Ejaaz: He's the new leopold dude (22:31):
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Josh: Uh it seems like tepper's like really making a strong play into amazon alphabet (22:33):
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Josh: tsmc power energy neoclouds spacex but what we do see is the most amount of (22:37):
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Josh: dots out of all of these funds across Alphabet. (22:41):
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Josh: Everyone's really bullish on Google. People want to own the company that's spending (22:44):
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Josh: how many hundreds of billions of CapEx this year with how large profit margins (22:49):
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Josh: in their cloud infrastructure with like a new leadership team that's coming (22:53):
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Josh: in probably a little more hunger than the old. It seems like this new... (22:56):
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Josh: Beginning for Google almost. And the hope is that a lot of people can capitalize on that. (23:00):
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Josh: The next most popular, I guess there's three of them here. It's Amazon, TSMC, and SpaceX. (23:04):
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Josh: Those all seem like pretty amazing opportunities. Amazon, we know, (23:09):
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Josh: is pretty much one of the largest mag seven companies for AI exposure. (23:12):
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Josh: You get AWS, you get the sneaky anthropic stake for the company, (23:17):
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Josh: and then you get terranium chips, (23:22):
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Josh: which are all three huge verticals that can play a large role in the earnings (23:23):
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Josh: of amazon i think people are pretty excited about these large cap companies (23:27):
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Josh: spacex again goes without saying we have 25 episodes on why they're going to (23:30):
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Josh: be one of the most valuable companies in the world (23:34):
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Josh: people are excited about ai data centers in space they're excited about grok (23:35):
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Josh: getting on the frontier they're excited about the data center build out there's (23:38):
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Josh: a lot of things to be excited about there and then tsmc (23:41):
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Josh: It's just buying the picks and shovels, man. Someone's got to make the chips. (23:43):
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Josh: TSMC is pretty damn good at it. (23:47):
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Ejaaz: I think when we look at this, it gives you a clear idea of where the consensus (23:48):
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Ejaaz: of investments are in AI right now. (23:53):
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Ejaaz: Like you look at Amazon Alphabet, that's not new news from like a couple of (23:55):
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Ejaaz: years back when these companies were making very heavy capex investments in AI in general. (23:59):
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Ejaaz: I still think that they have a long way to go. (24:04):
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Ejaaz: And I don't quite believe people think that AI is going to be as big as they (24:07):
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Ejaaz: could potentially conceive. (24:12):
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Ejaaz: Like when I look at Andy Jassy, CEO of Amazon's reports on AWS, (24:13):
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Ejaaz: I can't help but think that, I can't help but get like incredibly bullish about it because (24:18):
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Ejaaz: it's not only him making, what (24:23):
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Ejaaz: is it, like a $200 billion investment this year in AI CapEx, but it's him (24:25):
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Ejaaz: Showing us publicly, by the way, this is all reported on, the revenue and margins (24:30):
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Ejaaz: that are expanding for the company itself. (24:34):
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Ejaaz: So when you look at that and look at the investment, it kind of makes a lot (24:36):
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Ejaaz: of sense. Bear in mind, Andy Jassy has been running AWS well before he was CEO (24:39):
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Ejaaz: of Amazon. So he knows the infrastructure in and out the best, (24:44):
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Ejaaz: better than anyone, right? (24:49):
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Ejaaz: So when he says things like this, it's very important, I think, to pay attention. (24:50):
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Ejaaz: Now, if you lower your gaze to the bottom of this stack, it tells you where (24:54):
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Ejaaz: the money is effectively going to go. (24:58):
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Ejaaz: It's going to be in things like power and energy. It's going to be in things (24:59):
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Ejaaz: like payments and memory. Now, memory is already quite a consensus trade. (25:02):
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Ejaaz: But as you can see, a lot of people got scared after the Leopold blowout. (25:05):
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Ejaaz: Now, is it just a blot that was based off of leverage? (25:09):
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Ejaaz: Or have we reached some kind of top that maybe makes no sense? (25:12):
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Ejaaz: We're going to have to see over the next couple of months. (25:14):
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Ejaaz: It's my belief that like, memory is constrained by physical atoms. (25:17):
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Ejaaz: We do not have enough plumbing and chip fabs out there to meet demand going (25:21):
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Ejaaz: into 2028. I just want to emphasize that (25:26):
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Ejaaz: All the supply that is available for memory for next year is completely sold out. (25:29):
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Ejaaz: You've got SanDisk literally inventing brand new forms of memory to be able (25:33):
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Ejaaz: to serve up demand just to kind of get memory into the hands of AI providers. (25:38):
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Ejaaz: Now, when you look at payments, this is kind of like a brand new thing, (25:43):
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Ejaaz: you know? Maybe we'll have a few more episodes in the future about this, (25:45):
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Ejaaz: but you've got Stripe just acquiring Open Router. You've got Ramp creating their (25:48):
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Ejaaz: own router. There's a lot of movement in the AI router side of things, (25:51):
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Ejaaz: and that's a thesis to unpack on a separate episode. (25:55):
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Ejaaz: And then you have neoclouds and power and energy, which has been the case for (25:58):
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Ejaaz: so many years at this point, where we have all these GPUs, we're going to have (26:01):
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Ejaaz: way more GPUs in the future, and we don't have enough power to serve for this. (26:05):
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Ejaaz: So we're looking into nuclear, we're looking into solar, we're looking into (26:09):
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Ejaaz: ripping jet engines off planes and trying to like spit it up at the back of (26:12):
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Ejaaz: a data center, which is what Elon Musk is literally doing. (26:15):
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Ejaaz: He bought a company to help him do that. And so I think we're going to see a (26:18):
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Ejaaz: bunch more of these investments, whether it pays out or whether it plays out (26:21):
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Ejaaz: is something we're going to see over the next couple of months. (26:25):
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Ejaaz: It's my strong belief that we will but again this could all be a house of cards (26:27):
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Ejaaz: and a lot of people think so and so i don't want to negate that fact (26:31):
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Josh: It's also worth noting that these aren't uh specific ai filings for 13f companies (26:34):
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Josh: like these are just the standard 13fs it just so happens that it seems like (26:39):
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Josh: a lot of the large funds are investing in ai which is interesting is like if (26:43):
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Josh: if everyone's focused here is there an edge elsewhere is there some place that (26:47):
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Josh: other people aren't looking because everyone is seemingly interested in figuring (26:51):
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Josh: out how this ai trade plays out possibly (26:55):
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Josh: probably i don't see my voice tesla anywhere come on where's the love over there, (26:57):
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Josh: but it's interesting it's interesting to think like okay well if everyone's (27:01):
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Josh: focused on these things is there an edge is there alpha elsewhere that we may (27:04):
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Josh: be able to extract from the market like it's interesting. (27:08):
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Ejaaz: No one's holding nvidia josh like some of the like the major company that's making these these gpus (27:10):
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Josh: Yeah, that was a, yeah, actually Nvidia was missing from most of these, huh? (27:16):
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Josh: Except for, I believe, Gavin Baker, maybe, has it as his largest holding. (27:20):
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Josh: I think he's Jensen's biggest bull. He probably owns quite a bit. (27:25):
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Josh: Warren Buffett's still, Berkshire Hathaway's biggest holding is Apple. (27:27):
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Josh: And I find it ironic that it's been the biggest holding forever because everyone's (27:30):
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Josh: just kind of forgot about it. (27:33):
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Josh: They've moved past it. And yet Apple is currently sitting here, (27:35):
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Josh: the most valuable company in the world, even more so than Nvidia. (27:37):
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Josh: So it's pretty interesting to see kind of how these companies structure themselves, (27:40):
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Josh: see which ones are more nimble, like Leopold, and getting blown out of their (27:44):
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Josh: portfolios, which ones have been around since the beginning of time, like Berkshire. (27:47):
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Josh: And they're actually just long, some of these fantastic companies that is now (27:51):
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Josh: the most valuable company in the world. (27:56):
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Josh: And perhaps you can use that to kind of gauge your risk tolerance and see where (27:57):
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Josh: your personal portfolio fits into this. (28:01):
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Josh: But that is the entirety of the episode today. I want to just thank everyone (28:04):
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Josh: so much for watching, for being here with us, for hearing about the aftermath (28:08):
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Josh: of the Leopold blow up i thought this would be exciting for different reasons, (28:12):
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Josh: but um unfortunately it is exciting because we get to see the final holdings (28:17):
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Josh: before everything exploded and now what you're looking at is probably the citadel (28:21):
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Josh: portfolio because they bought the entire thing in a single block of trades so. (28:25):
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Ejaaz: Which there are about two and a half x just fyi from that (28:29):
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Josh: Purchase imagine oh my. (28:32):
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Ejaaz: God two weeks also didn't leopold make like a 500 million dollar private investment (28:33):
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Ejaaz: I saw his report on like Bloomberg or Reuters or somewhere. (28:39):
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Josh: Yeah, man, he's down, but far from out. (28:42):
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Ejaaz: He'll be back. Dude, he's already back. He's back. Where did he get that cash? (28:44):
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Josh: It's going to, you know, it's going to be really fun. You know what you really (28:47):
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Josh: need to stick around for is the next Leopold 13F. Because then we'll see what (28:49):
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Josh: rises from the ashes. It's like, okay, like what is left? Is it going to be zero? (28:55):
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Josh: Is he even going to have enough money on the balance sheet to be required to file a 13F? (28:59):
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Josh: We will see. I suspect the answer will be yes. I suspect it is a Phoenix rising (29:03):
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Josh: from the ashes, a strong comeback. (29:07):
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Josh: But that's the update if you enjoyed this episode as always uh first thank you (29:09):
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Josh: so much for watching we really appreciate you sticking around till the end (29:13):
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Josh: second uh don't forget to share with a friend who might also enjoy don't forget (29:15):
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Josh: to give us a thumbs up on youtube or wherever you view your podcast eejus any (29:18):
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Josh: final parting thoughts before we head out of here today. (29:22):
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Ejaaz: No i uh i'm curious for the folks who are listening who i i get are very investor (29:25):
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Ejaaz: oriented are there any layers of the stack or if there are any companies that (29:30):
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Ejaaz: were missed like we would love to to hear about it like leave us in the comments (29:34):
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Ejaaz: a note, DM us, whatever. (29:38):
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Ejaaz: We're always looking for like where the edge might potentially be. (29:40):
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Ejaaz: And, you know, Josh and I have got our rose-tinted glasses on, right? We love memory. (29:43):
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Ejaaz: We love power. We love NVIDIA. We love Google. So if you have any ideas, (29:46):
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Ejaaz: let us know. But that I think is it. (29:50):
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Ejaaz: And yeah, we will see you guys on the next one. (29:52):
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Ejaaz: We're talking about over $200 billion worth of investments across the entire (00:05):
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Ejaaz: AI stack from the likes of Warren Buffett, Ray Dalio, and even our good friend Leopold Ashenbrenner. (00:10):
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Ejaaz: And at surface value, it might look like it's quite bearish. (00:15):
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Ejaaz: They sold a lot of major stocks, including Nvidia and some memory stocks as well. (00:18):
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Ejaaz: But if you look carefully, there's two specific layers within the AI theme that (00:22):
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Ejaaz: they've not only doubled down on, but have increased the pie. (00:26):
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Ejaaz: There's never been more money in the AI sphere before. And we're going to unpack (00:29):
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Ejaaz: all of these and more on today's episode. (00:33):
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Josh: There was an episode that we recorded on July 31st in reference to Leopold's (00:35):
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Josh: 13F, where we said his next 13F filing is going to be one of the most exciting (00:38):
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Josh: episodes of all time. And listen, we are here. (00:43):
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Ejaaz: It's exciting. (00:46):
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Josh: It's exciting, guaranteed. I will say it's not exactly how we imagined this (00:48):
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Josh: forecast going, because what we're looking at here is basically a memoritum, (00:51):
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Josh: how do you say it when someone died? (00:58):
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Ejaaz: Like Leopold's dead. Moratorium. Yeah. Yes. (00:59):
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Josh: That's what we're looking at. We're looking at a sheet of paper from a company (01:02):
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Josh: that no longer exists because as we know, Leopold was liquidated tragically. (01:06):
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Josh: Now, 13 Fs, we might want to start there just so you kind of have an idea of (01:09):
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Josh: what's going on here. Basically, any company that trades (01:13):
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Josh: equities over $100 million must disclose their positions quarterly within 45 (01:16):
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Josh: days of the quarter end. So what we're looking at here and throughout this episode (01:21):
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Josh: is what those snapshots look like across all the top investment firms in the (01:24):
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Josh: country and in the world. (01:27):
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Josh: And we're going to try to derive some conclusions from that. (01:29):
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Josh: But to start, we have to go to Leopold's portfolio because everyone's going (01:31):
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Josh: to want to know what were the stocks that he was in that blew him up? (01:35):
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Josh: Because as we know from the previous episode, which if you haven't watched, (01:38):
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Josh: I highly suggest the Wall Street darling no longer owns public positions. (01:40):
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Josh: And it's because we have some numbers and it looks like the largest holding (01:45):
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Josh: by far was Sandisk and Micron. (01:49):
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Josh: He was very much memory pilled. I think the tough thing about this is like directionally, (01:51):
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Josh: I think he was correct. He just got totally liquidated, but Sandisk's position (01:56):
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Josh: was 28.5% of the book. He had Micron at 28% of the book. (01:59):
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Josh: And then, I mean, together, that's over half of the book is in Micron. (02:03):
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Josh: And then there's Bloom Energy at nine and a half percent. We know how much he was up on that. (02:06):
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Josh: We have TSMC, Nebius, Core, we have a couple of the neoclouds, (02:10):
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Josh: and then everything else combines for about 18% of the portfolio. (02:12):
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Josh: So he was heavily, heavily, heavily involved in these memory stocks. (02:15):
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Josh: We know he was using some leverage, and it appears as if that's what blew him up. (02:19):
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Ejaaz: Yeah. So the saddest part about this is probably all of these positions have been decimated. (02:23):
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Ejaaz: I saw rumors, I think it was reported from Bloomberg about a week ago that he (02:28):
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Ejaaz: now has a casual, you know, 500 to a billion dollar open equity position, (02:32):
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Ejaaz: but the majority still lies in his anthropic stake for now. (02:37):
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Ejaaz: But I think if we look at the Leopold thesis in general, which was doubling (02:40):
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Ejaaz: down on AI infrastructure, particularly in memory and neoclouds, (02:45):
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Ejaaz: That thesis is still very alive and well. (02:49):
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Ejaaz: And let's like pause on the memory position. It's had a pretty rocky month. (02:51):
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Ejaaz: If you remember, I think two weeks ago, we were reporting on SK Hynex reporting (02:57):
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Ejaaz: their best quarterly earnings ever. (03:02):
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Ejaaz: They made more money in a single quarter than they did in the entire year last year. (03:04):
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Ejaaz: But their stock tanked about 20% the preceding week. (03:09):
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Ejaaz: And so the thesis behind that was people thought that memory investors were (03:13):
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Ejaaz: too overleveraged and that we were reaching a top where GPU infrastructure, (03:18):
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Ejaaz: NVIDIA, and all the people that were buying memory could not want to buy more memory. (03:23):
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Ejaaz: Recent news has been revealed from SanDisk over their investing day that not (03:27):
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Ejaaz: only is that not true, but all these major investors that we're going to be (03:31):
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Ejaaz: covering in this episode today have doubled down and bought more, (03:35):
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Ejaaz: especially at the lows recently. (03:38):
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Ejaaz: And also SanDisk in particular has developed this new type of memory. (03:40):
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Ejaaz: It's called high bandwidth flash. And I just want to take like 20 seconds to describe what this is. (03:45):
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Ejaaz: There's a couple different types of memory. There's DRAM, which is like your standard memory type. (03:49):
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Ejaaz: There's HBM, which is your high bandwidth memory, which is specialized for AI GPU specifically. (03:53):
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Ejaaz: And then there's this thing called high bandwidth flash, which is this new thing, (03:58):
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Ejaaz: which was created by SanDisk and honestly dominated by them. (04:01):
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Ejaaz: And it's used for like inference mainly. and inference recently has become like (04:04):
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Ejaaz: the major trend in AI. It's actually consuming so much CapEx spend for the hyperscalers (04:08):
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Ejaaz: from Google, Amazon, and the likes. (04:14):
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Ejaaz: And so SanDisk in particular stands to benefit the most from this. (04:15):
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Ejaaz: And they have this new memory type, which is being ordered or backlogged already into the end of 2027. (04:19):
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Ejaaz: So this is a new revenue opportunity for them. And we haven't seen exceeding (04:24):
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Ejaaz: demand like this ever before. So the point is memory, the memory argument is (04:28):
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Ejaaz: still very strong. And Leopold was right. He just, he was too over-leathered, man. (04:31):
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Josh: That's the tragic part. is like the thesis is coherent and it still stands. (04:34):
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Josh: And there was nothing wrong about his positions or his like directional ideas (04:39):
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Josh: of where the market was going. (04:44):
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Josh: He just did it all wrong because he was using improper position sizing and most (04:45):
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Josh: importantly, leverage. I mean, this is what happens when you use leverage. (04:49):
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Josh: Everybody knows this. So I think it's an interesting peek into what could have (04:52):
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Josh: been like directionally, the stock names look strong. It's just the way he positioned (04:56):
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Josh: didn't look nearly as strong. (05:00):
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Josh: There is another company who reported their 13F this week that I think it's (05:02):
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Josh: worth highlighting who is. (05:06):
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Josh: When you think of the strongest, they're about as strong as it gets. (05:08):
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Josh: These people have been around forever. This is Warren Buffett's Berkshire Hathaway. (05:10):
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Josh: They are always really interesting because they move in a way similar to the (05:14):
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Josh: way Apple does. They move very slow. (05:19):
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Josh: They're normally the last mover. When they do so, they do so with a tremendous (05:21):
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Josh: amount of size and conviction. (05:24):
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Josh: Now, as we know, Berkshire Hathaway is no longer run by Warren Buffett. (05:26):
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Josh: Unfortunately, no longer run by Charlie Munger either. And Greg Abel is now (05:30):
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Josh: at the helm of this. So Greg Abel is the new guy in charge. And he has joined (05:34):
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Josh: Berkshire and has begun deploying capital at pretty high rates. (05:38):
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Josh: The biggest ad of the quarter, which was 17 billion added, was for Google or (05:42):
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Josh: Alphabet, which was really surprising to see because why would they be buying (05:47):
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Josh: Google instead of buying the memory companies? And I think we have like a thesis. (05:51):
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Josh: I'll cover the rest first before we get into why. (05:56):
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Josh: But it looks like they've added 44% of Delta, of Macy's, of Lenar. (05:57):
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Josh: So they're very much moving towards a (06:03):
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Josh: This is kind of like the Joshua Kushner thing where they're like, (06:06):
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Josh: okay, who's been around forever? And then who's going to win on the frontier? (06:08):
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Josh: And that feels like kind of how Warren Buffett and Berkshire are placing themselves (06:12):
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Josh: here. But the Google thing, I want to talk about the Google thing, (06:16):
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Josh: EJS. Why are they buying so much Google? (06:18):
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Ejaaz: So I think it's a thesis that you and I have been very fond of for over many years now. (06:19):
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Ejaaz: Google is the only company on earth that owns the entire stack for AI. (06:26):
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Ejaaz: Now, I just want to emphasize how important this is. Like, they're not only (06:31):
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Ejaaz: creators of AI models, but they're also creators of custom GPUs that run and train those AI models. (06:35):
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Ejaaz: They're also creators of the distribution platforms. The number one in the world, (06:41):
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Ejaaz: by the way, you've got Google search. Obviously, you've got Gmail, (06:45):
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Ejaaz: you've got G Suite, you've got Android, you've got so many different Google (06:47):
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Ejaaz: products that distribute to hundreds and hundreds of millions of people every single day. (06:51):
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Ejaaz: So they have the ultimate distribution platform, but they also own all the infrastructure, (06:55):
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Ejaaz: the power that is required to fund all of this. (06:59):
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Ejaaz: And they have amazing amounts of capbacks. I think Google actually this year (07:01):
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Ejaaz: takes the crown for spending the most. I think they're on track to spend around (07:05):
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Ejaaz: $250 billion by the end of the year. (07:08):
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Ejaaz: If Google is the only company that owns or dominates across the entire stack (07:11):
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Ejaaz: in AI, that is an amazing company to own because they can fine tune each of (07:15):
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Ejaaz: the different layers for their particular product. (07:20):
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Ejaaz: So why that's important is let's say you look at Google search data and you (07:23):
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Ejaaz: notice that customers really like buying houses in a specific area at this time (07:26):
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Ejaaz: of the year, they can orient their own AI model to (07:32):
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Ejaaz: Produce and serve up adverts or suggestions to people to shop in a particular type of way. (07:36):
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Ejaaz: And that kind of uniformity or like hyper-specificity is really hard to nail (07:42):
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Ejaaz: down if you are just a model lab creator or if you're just a GPU producer. (07:47):
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Ejaaz: So that's really powerful for the thesis in general for Google. (07:51):
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Ejaaz: Now, my question to you, Josh, is do you think... (07:54):
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Ejaaz: This happened before the fallout within Google. When Dan Sosibis stepped aside, (07:57):
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Ejaaz: Jeff Dean left, I have a feeling it is. So I wonder if they've cut down their (08:02):
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Ejaaz: position since, but I still think Google's a good bet. (08:06):
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Josh: Yeah, I would bet this happened beforehand. And I would bet that it's also not (08:09):
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Josh: really going to change their mind because I don't think it materially affects (08:12):
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Josh: the business. In fact, it may be a positive. (08:15):
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Josh: It's like, I remember seeing this post from a long time ago that was basically (08:18):
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Josh: like, Google isn't taking themselves seriously until they start firing the leadership (08:22):
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Josh: that put them in this position. (08:25):
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Josh: And I mean, in a way, that's kind of what's happening here. (08:26):
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Josh: The leadership who put them in this position where they had all the technology (08:29):
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Josh: did not capitalize is starting to rotate and cycle out. There is Fresh Blood, (08:32):
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Josh: who I'm sure is very hungry. (08:37):
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Josh: Sergey Brin is back. He is kind of in wartime mode. (08:38):
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Josh: And I mean, Google is this remarkably incredible business. And what we're going (08:41):
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Josh: to find as we go through the remaining 13 filings here is that, (08:44):
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Josh: I mean, spoiler alert, the two biggest winners this quarter are Amazon and Google. (08:47):
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Josh: Everyone loves the hyperscalers. Everyone loves the people who are spending (08:51):
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Josh: huge amounts of CapEx because it's easy for them to project revenues. (08:54):
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Josh: For these newer companies, when they spend a lot of money, it's high risk. (08:58):
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Josh: They haven't proven their revenue over time. (09:00):
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Josh: But in the case of Google, they're projecting unbelievable margins on their Google Cloud services. (09:02):
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Josh: They have the increasing capability of building their own hardware chips, (09:07):
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Josh: like their TPUs and their Ironwoods that they have. (09:10):
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Josh: And they have this entire ecosystem that they've built with a very strong moat. (09:12):
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Josh: And it seems like that's not going anywhere anytime soon. So Google is just (09:17):
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Josh: this unbelievable business. (09:20):
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Josh: Same thing with Amazon. They're companies with huge amounts of capital on their (09:21):
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Josh: balance sheets. They're companies that are spending it. (09:25):
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Ejaaz: These things are pretty underpriced, man. They're pretty underpriced. (09:27):
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Josh: On a relative basis, they're not trading at a very high multiple, (09:30):
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Josh: even though they're the only companies with proven track records that are showing quarter over quarter. (09:32):
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Josh: We're spending all this capex, but look at the returns that we've had on this capex. (09:37):
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Josh: There's this amazing stat about Google and I have no idea what the specifics (09:41):
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Josh: are, but I remember reading it and being like, oh my God, this is so right. (09:45):
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Josh: Where every dollar Google invested yielded say like $2.8 in return or something (09:48):
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Josh: like that, where since, since the inception of the company. (09:53):
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Josh: So when you hear a company like Google, who is one of the best capital allocators (09:56):
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Josh: in the world over the course of the last three decades saying, (09:59):
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Josh: not only are we going to spend a lot of money, because we are so high conviction (10:02):
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Josh: that these investments will pay off in the long run, I think you gotta get pretty (10:08):
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Josh: excited about that because as a capital allocator, there's not many people better than Google. (10:11):
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Josh: So that is why I presume Berkshire, we see taking a pretty large position in this. (10:15):
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Josh: But now we have to move over to what feels like a home for us. (10:19):
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Josh: I think this is the Brad Gershner, the Gavin Baker, the NVIDIA portfolio. (10:23):
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Josh: These are what the companies that I think like, when we think of the companies (10:27):
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Josh: we wanna invest in, this feels most true to me at least. (10:30):
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Josh: The number one holding of all of them, NVIDIA. (10:34):
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Josh: Like $2 billion is just crazy. It's like $1.9 billion they have. (10:36):
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Josh: Second for Brad Gerstner is Cerebrus at $1.6 billion. Then there's Meta, TSM, CoreWeave, ARM. (10:40):
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Josh: Gavin Baker, on the other hand, $4.7 billion position in SpaceX, (10:46):
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Josh: then Micron, Cerebrus, Astero Labs, Siena, and Credo. (10:51):
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Josh: Those bottom ones I don't even recognize, but that's kind of how we could think (10:55):
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Josh: of the top two, perhaps like Twitter traders, the top traders on X. (10:58):
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Josh: Here's kind of the position that they find themselves in. (11:02):
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Ejaaz: Yeah, I mean, if I were to bucket these investors in a particular group, (11:04):
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Ejaaz: it's like the forward looking group, right? They're like the higher risk takers, (11:07):
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Ejaaz: but they're playing with like much bigger capital allocations. (11:11):
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Ejaaz: It's funny you mentioned the SpaceX 4.6 billion position from Gavin Baker. (11:14):
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Ejaaz: This was his biggest win. I was listening to a podcast of him on the All In show just yesterday. (11:19):
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Ejaaz: And he was basically like, yeah, this is like one of my biggest winnings. (11:25):
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Ejaaz: But like what I'm most excited about right now is the power and optics trade, (11:27):
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Ejaaz: which seemingly is a big theme amongst these particular investors in particular. (11:33):
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Ejaaz: So just to give you a kind of like lay of the land, when you invest in AI, (11:37):
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Ejaaz: the typical names that people look at are things like NVIDIA, (11:42):
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Ejaaz: they look at some of the hyperscalers that were mentioned already, (11:45):
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Ejaaz: which is like Google and Amazon. (11:47):
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Ejaaz: And then if you kind of dig a layer deeper, they're like, oh no, (11:49):
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Ejaaz: all these guys are going to need a lot of memory. (11:51):
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Ejaaz: So you invest in the likes of SanDisk, Micron, SK Hynix, these are names that (11:54):
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Ejaaz: we've already mentioned on the show multiple times before. (11:58):
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Ejaaz: But something that we haven't really opined on is this idea of power. (12:01):
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Ejaaz: So if you have all these expensive GPUs that NVIDIA is making, (12:05):
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Ejaaz: if you have all this memory to make these GPUs, (12:08):
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Ejaaz: you still need power to turn these things on. But also, there is tons of data (12:10):
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Ejaaz: that these GPUs are generating that they need to kind of like transfer between these GPUs. (12:16):
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Ejaaz: And that's something that Gavin Baker specifically has identified really early on. (12:21):
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Ejaaz: And he's winning quite a lot through the likes of companies like Coherent Corp. (12:25):
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Ejaaz: So let me explain sort of very quickly why this is important. (12:29):
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Ejaaz: So if you look at the sector of photonics, which basically means light. (12:33):
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Ejaaz: When you have a ton of GPUs in your data centers, it gets really arduous to (12:38):
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Ejaaz: transfer data between these GPUs, especially if you rack up hundreds of thousands (12:43):
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Ejaaz: of millions of GPUs, which is what Elon Musk is basically doing. (12:48):
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Ejaaz: Right now, the way to transfer data between GPUs is using copper wires, (12:51):
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Ejaaz: and it uses electricity. (12:55):
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Ejaaz: It's pretty good. It's been used for decades now at this point, (12:56):
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Ejaaz: But we've reached a point where there's so many GPUs that it becomes incredibly (12:59):
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Ejaaz: inefficient and cost inefficient as well. So you waste power and you waste a lot of money. (13:03):
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Ejaaz: The solution to this is basically using light. And you heard me correctly, (13:07):
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Ejaaz: like literal light to transfer data. And this solves a problem where it's much, (13:11):
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Ejaaz: much cheaper and you can transfer data at rapid speeds over very great lengths. (13:16):
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Ejaaz: And the only way to do this is through companies like Coherent, (13:20):
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Ejaaz: through companies like GE Vanova, who basically create the materials and the (13:24):
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Ejaaz: kind of tiny infrastructure tools that kind of like latch onto your GPUs that'll (13:29):
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Ejaaz: allow yourself to do this. (13:33):
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Ejaaz: And we've seen this trade become quite consensus over the years so far. (13:34):
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Ejaaz: You look at Coherent Group is kind of like one of the major manufacturers here, (13:39):
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Ejaaz: which Gavin Baker has taken a pretty big position in. And year to date, they're up 85%. (13:42):
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Ejaaz: If you look at this position actually here on our artifact that we have here, (13:47):
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Ejaaz: he's taken a major position in Astero Labs, which helps with the interconnects (13:51):
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Ejaaz: between GPUs. So basically like the plumbing, (13:55):
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Ejaaz: The wiring, the ability to transfer tons of data and information across the (13:57):
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Ejaaz: GPUs is where all the money has been flowing. And it's not just a Gavin Baker thing. (14:02):
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Ejaaz: It is a Brad Gerstner thing. And it is pretty similar across traditional investors (14:06):
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Ejaaz: as well, including like Ray Dalio. So it's cool to see. And I think it's something (14:10):
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Ejaaz: that I'm keeping my eye on quite astutely, actually. (14:13):
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Josh: You can kind of see these companies based on their size and their risk exposure (14:16):
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Josh: going out the curve. Like we have Berkshire, who's right at the core. (14:19):
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Josh: You're buying Amazon, you're buying Google. (14:23):
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Josh: Those types of companies are going to be slower more steady growth much more (14:24):
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Josh: stable then there's people like gavin people like brad gerstner they're going (14:28):
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Josh: the next concentric circle out of the sloop they're going to the infrastructure layer (14:32):
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Josh: what is required in order to generate tokens it's optics it's memory it's like (14:36):
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Josh: going further and further out the stack that's kind of what we're seeing with (14:40):
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Josh: them and it has been playing out really well another thing i wanted to mention (14:43):
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Josh: in Gavin's portfolio is that (14:46):
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Josh: he has a huge $2.3 billion. (14:48):
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Josh: Position on QQQ puts. (14:52):
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Josh: And for those that aren't familiar, that basically means he's buying the right (14:54):
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Josh: to own shares of the QQQ, which is representative of the index at the current (14:57):
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Josh: price, meaning it's insurance in the case that it goes down. (15:01):
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Josh: So I find this interesting too. And we saw this with Leopold's portfolio as well, where everyone (15:04):
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Josh: has this or not everyone, but there are a few people that have this hedge baked (15:09):
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Josh: into their portfolios currently where if the market goes down they can still (15:12):
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Josh: survive they're really just making a very specific hyper concentrated bet in this case on ai hardware (15:16):
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Josh: the infrastructure layer so even if they're wrong even if the market does go down (15:22):
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Josh: but ai hardware still continues to do well they can win and i find it interesting (15:27):
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Josh: that they do have this hedge put in place which is kind of cool there's also (15:31):
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Josh: nvidia which i found interesting (15:34):
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Josh: and apparently they they also filed a 13f because they i mean as a company they (15:36):
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Josh: own quite a bit of things the first one being intel they own 30 billion dollars (15:40):
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Josh: of intel which is great a pretty large position yeah i mean good good place (15:45):
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Josh: to be it's funny you think of intel and nvidia as like. (15:48):
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Josh: Total competitors but nvidia owns like quite a big chunk of change in that company (15:51):
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Josh: nvidia also has a second biggest holding being spacex which we all know i mean (15:55):
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Josh: this clearly makes sense spacex is going to (16:00):
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Josh: be exclusively buying nvidia gpus to power all the new data centers then also (16:03):
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Josh: there's core weave there's coherent there's nokia there's synopsis (16:07):
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Josh: there's this interesting thing where there is kind of like the circular economy (16:10):
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Josh: type questions going on we're like okay nvidia invests core we have a nebius (16:15):
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Josh: then they take that capital to buy nvidia gpus which shows up as nvidia revenue (16:20):
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Josh: they have these companies on their cap table that they are investing in and (16:23):
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Josh: therefore collecting revenue from. (16:26):
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Josh: I mean, at the end of the day, this is kind of the general play from the people (16:28):
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Josh: who are in the trenches in the world of AI. (16:31):
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Josh: A lot of infrastructure, a lot of those like higher level purchases into Intel, (16:33):
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Josh: into SpaceX, into the neoclouds. That's what they're thinking about. (16:38):
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Ejaaz: If you are considering investing in this space, the number one North Star you (16:41):
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Ejaaz: should always ask yourself is, (16:47):
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Ejaaz: will the demand for AI products, AI tools, AI models be greater 10 years from now than it is today? (16:49):
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Ejaaz: If your belief is yes, then all of these things, infrastructurally, (16:57):
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Ejaaz: especially involved in physical atoms like GPUs, like energy, (17:02):
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Ejaaz: like power, is all going to be required and going up. (17:05):
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Ejaaz: Now, of course, you need to make sure that you are backing the types of companies (17:08):
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Ejaaz: and builders that are actually going to execute on this. (17:13):
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Ejaaz: And when I think of like the dummies guide to what to kind of like support, (17:15):
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Ejaaz: I look at NVIDIA's portfolio, essentially, because there's no one better than (17:20):
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Ejaaz: Jensen Huang, who has a much deeper insight as to what is actually being built (17:24):
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Ejaaz: and where the demand actually is. (17:28):
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Ejaaz: He said on a recent, I think it was like an interview panel, (17:30):
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Ejaaz: or maybe it was like at one of these conferences that he spoke at, (17:33):
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Ejaaz: that people are questioning (17:35):
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Ejaaz: Whether some of these AI labs or some of these hyperscalers are actually seeing (17:37):
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Ejaaz: demand for the AI models and products that they're offering, (17:41):
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Ejaaz: like Microsoft and Google, for example, prior to their quarterly earnings, (17:44):
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Ejaaz: everyone was doubting them. (17:47):
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Ejaaz: Then they released their quarterly earnings. And not only has their revenue (17:48):
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Ejaaz: gone up like 5x over the last quarter, but they've also seen revenue margins specifically go up. (17:51):
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Ejaaz: And it's the same trend that you see across neoclouds, hyperscalers, (17:58):
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Ejaaz: as well as some of these CPU companies. (18:02):
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Ejaaz: So you see his biggest position is a $30 billion stake in Intel. (18:04):
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Ejaaz: Now, I want to remind everyone that I think it was midway last year that he (18:08):
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Ejaaz: put a $5 billion investment into Intel to own, I think it was like, (18:12):
undefined
Ejaaz: what was it, like a 5% stake in them? (18:16):
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Ejaaz: He invested alongside the US government. (18:18):
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Ejaaz: And the main reason for that was unclear at the time, but today is very clear. (18:21):
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Ejaaz: Intel creates bleeding-edge CPUs. In order to orchestrate all these hundreds (18:25):
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Ejaaz: of thousands of GPUs, you need (18:30):
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Ejaaz: things like CPUs to make sure that your AI agents make the right tool calls (18:32):
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Ejaaz: and to make sure that they operate efficiently and fast enough for you to get (18:37):
undefined
Ejaaz: your answer to your prompt. (18:40):
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Ejaaz: And this is what all of these companies are that NVIDIA is investing in. (18:41):
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Ejaaz: And you see this collectively across so many of the different funds. (18:45):
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Ejaaz: They're betting on AI demand just being higher. (18:48):
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Ejaaz: And if that's the case, then you're going to need more neoclouds. (18:51):
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Ejaaz: You're going to need more hyperscalers you are going to need way more ai models (18:53):
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Ejaaz: and you're going to need a way to route across all of them you need the power (18:57):
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Ejaaz: to like power all of them so this just makes a lot of sense to (19:00):
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Josh: Me yeah no it's pretty interesting i guess now we could kind of move down to (19:03):
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Josh: the like the rapid fire versions of just like who who is left here one of the (19:05):
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Josh: noteworthy investors bill ackman (19:09):
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Josh: we have uh he is positioning himself mostly in payments which i find interesting (19:11):
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Josh: his new positions are visa mastercard, (19:16):
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Josh: s&p global and netflix which is a little bizarre and when you think about that (19:19):
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Josh: one you're like huh why payments and then you think well who did stripe just (19:23):
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Josh: acquire um it's just acquired open router it's like it turns out payment infrastructure (19:26):
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Josh: is due for an entire overhaul (19:31):
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Josh: and it seems like if (19:33):
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Josh: you are betting on that you are almost shorting visa and mastercard uh not buying (19:35):
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Josh: visa mastercard so i'd love to talk about, (19:40):
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Josh: why i'd love to ask him like why are you going along these companies when everybody's (19:42):
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Josh: actively working to sabotage and destroy them. (19:46):
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Josh: Like the credit card providers, for those who don't know, they normally take (19:49):
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Josh: an X amount of pennies and like 2.9%, 2.7% of every transaction, fairly large. (19:52):
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Josh: And a lot of people are kind of sick of paying that. And it seems like AA agents (19:57):
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Josh: are needing their own infrastructure lay in order to make these payments. (20:01):
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Josh: So I find the Visa and MasterCard pretty interesting. (20:03):
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Josh: There's a few other noteworthy ones. There's... (20:07):
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Josh: This guy, Sam Klarna, who runs apparently $5.4 billion worth of money. (20:09):
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Josh: His number one is Amazon. I mean, (20:14):
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Josh: it seems like there's a lot of people in Amazon being the number one. (20:17):
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Josh: Tiger Global, I think they had theirs as number one. Also, David Tepper, (20:20):
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Josh: his number one was Amazon. A lot of people are really excited about Amazon. (20:24):
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Ejaaz: I'm just looking at this and I'm seeing like a lot of confusion. (20:27):
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Ejaaz: Like you've got Bill Ackman buying all the finance rail companies, (20:30):
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Ejaaz: but he's trimming Amazon down 25%. Then you got Seth Klarman buying Amazon. (20:33):
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Ejaaz: On. Then you got Terry Smith dumping Visa, dumping Alphabet. (20:37):
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Ejaaz: And so I'm like, okay, some of these funds kind of agree with each other. Some of them don't. (20:41):
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Ejaaz: I think on your point around why Ackman might be buying the financial rails (20:46):
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Ejaaz: and why Stripe just acquired Open Router, I'm realizing that (20:50):
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Ejaaz: the whole thesis of plumbing AI, I want to buy tokens and I want to convert (20:54):
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Ejaaz: those tokens into intelligence that makes my business earn more money. (21:00):
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Ejaaz: Stripe is perfectly positioned for that. Visa and MasterCard perfectly positioned (21:03):
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Ejaaz: for that because they already have the distribution to all of these different (21:07):
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Ejaaz: companies' financial books, right? They're already getting paid. (21:09):
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Ejaaz: So for them to flip on a switch and say, hey, we can also provide you and serve (21:12):
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Ejaaz: you the inference for all these different models might actually be really attractive. (21:16):
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Ejaaz: Maybe that's my tinfoil hat guess, but. (21:19):
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Josh: Yeah, well, all of these things also require agents. And we're going to have (21:21):
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Josh: to talk about agents again because of our friend and sponsor Ledger, (21:24):
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Josh: who is building an infrastructure for agents in which there's a three part solution. (21:28):
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Josh: If the agents propose, the humans (21:32):
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Josh: approve, the Ledger signer enforces the transactions that are being made. (21:34):
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Josh: They built this really neat Ledger agent stack that allows you to use their (21:38):
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Josh: open source tools to work with agents because chances are, I mean, (21:41):
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Josh: if you're building with agents, you're pretty worried about security. (21:44):
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Josh: There's been a lot of breakouts from companies like open ai and anthropic recently (21:47):
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Josh: you want to lock that down you do so with this hardware (21:51):
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Josh: process that ledger has they work with cloud code they work with codex it works (21:54):
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Josh: with cursor it's all totally open source for you to try out today and you can find more in (21:59):
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Josh: the link in the description below thank you to ledger for sponsoring this video (22:02):
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Josh: and as we get to the final segment of the show we have to make the you have (22:06):
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Josh: to answer the question like okay what is the smart money actually buying in (22:10):
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Josh: consensus after going through all these portfolios after seeing all these companies (22:13):
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Josh: what are the largest winners and losers and we have this really nice chart on (22:17):
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Josh: screen for those who are watching on spotify youtube wherever you get your videos (22:21):
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Josh: it shows kind of where everyone's been adding and i see this line down the board (22:24):
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Josh: of tepper who seems to have added like pretty much everything they're going across the board. (22:28):
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Ejaaz: He's the new leopold dude (22:31):
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Josh: Uh it seems like tepper's like really making a strong play into amazon alphabet (22:33):
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Josh: tsmc power energy neoclouds spacex but what we do see is the most amount of (22:37):
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Josh: dots out of all of these funds across Alphabet. (22:41):
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Josh: Everyone's really bullish on Google. People want to own the company that's spending (22:44):
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Josh: how many hundreds of billions of CapEx this year with how large profit margins (22:49):
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Josh: in their cloud infrastructure with like a new leadership team that's coming (22:53):
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Josh: in probably a little more hunger than the old. It seems like this new... (22:56):
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Josh: Beginning for Google almost. And the hope is that a lot of people can capitalize on that. (23:00):
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Josh: The next most popular, I guess there's three of them here. It's Amazon, TSMC, and SpaceX. (23:04):
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Josh: Those all seem like pretty amazing opportunities. Amazon, we know, (23:09):
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Josh: is pretty much one of the largest mag seven companies for AI exposure. (23:12):
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Josh: You get AWS, you get the sneaky anthropic stake for the company, (23:17):
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Josh: and then you get terranium chips, (23:22):
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Josh: which are all three huge verticals that can play a large role in the earnings (23:23):
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Josh: of amazon i think people are pretty excited about these large cap companies (23:27):
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Josh: spacex again goes without saying we have 25 episodes on why they're going to (23:30):
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Josh: be one of the most valuable companies in the world (23:34):
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Josh: people are excited about ai data centers in space they're excited about grok (23:35):
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Josh: getting on the frontier they're excited about the data center build out there's (23:38):
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Josh: a lot of things to be excited about there and then tsmc (23:41):
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Josh: It's just buying the picks and shovels, man. Someone's got to make the chips. (23:43):
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Josh: TSMC is pretty damn good at it. (23:47):
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Ejaaz: I think when we look at this, it gives you a clear idea of where the consensus (23:48):
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Ejaaz: of investments are in AI right now. (23:53):
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Ejaaz: Like you look at Amazon Alphabet, that's not new news from like a couple of (23:55):
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Ejaaz: years back when these companies were making very heavy capex investments in AI in general. (23:59):
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Ejaaz: I still think that they have a long way to go. (24:04):
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Ejaaz: And I don't quite believe people think that AI is going to be as big as they (24:07):
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Ejaaz: could potentially conceive. (24:12):
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Ejaaz: Like when I look at Andy Jassy, CEO of Amazon's reports on AWS, (24:13):
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Ejaaz: I can't help but think that, I can't help but get like incredibly bullish about it because (24:18):
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Ejaaz: it's not only him making, what (24:23):
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Ejaaz: is it, like a $200 billion investment this year in AI CapEx, but it's him (24:25):
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Ejaaz: Showing us publicly, by the way, this is all reported on, the revenue and margins (24:30):
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Ejaaz: that are expanding for the company itself. (24:34):
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Ejaaz: So when you look at that and look at the investment, it kind of makes a lot (24:36):
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Ejaaz: of sense. Bear in mind, Andy Jassy has been running AWS well before he was CEO (24:39):
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Ejaaz: of Amazon. So he knows the infrastructure in and out the best, (24:44):
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Ejaaz: better than anyone, right? (24:49):
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Ejaaz: So when he says things like this, it's very important, I think, to pay attention. (24:50):
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Ejaaz: Now, if you lower your gaze to the bottom of this stack, it tells you where (24:54):
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Ejaaz: the money is effectively going to go. (24:58):
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Ejaaz: It's going to be in things like power and energy. It's going to be in things (24:59):
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Ejaaz: like payments and memory. Now, memory is already quite a consensus trade. (25:02):
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Ejaaz: But as you can see, a lot of people got scared after the Leopold blowout. (25:05):
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Ejaaz: Now, is it just a blot that was based off of leverage? (25:09):
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Ejaaz: Or have we reached some kind of top that maybe makes no sense? (25:12):
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Ejaaz: We're going to have to see over the next couple of months. (25:14):
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Ejaaz: It's my belief that like, memory is constrained by physical atoms. (25:17):
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Ejaaz: We do not have enough plumbing and chip fabs out there to meet demand going (25:21):
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Ejaaz: into 2028. I just want to emphasize that (25:26):
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Ejaaz: All the supply that is available for memory for next year is completely sold out. (25:29):
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Ejaaz: You've got SanDisk literally inventing brand new forms of memory to be able (25:33):
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Ejaaz: to serve up demand just to kind of get memory into the hands of AI providers. (25:38):
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Ejaaz: Now, when you look at payments, this is kind of like a brand new thing, (25:43):
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Ejaaz: you know? Maybe we'll have a few more episodes in the future about this, (25:45):
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Ejaaz: but you've got Stripe just acquiring Open Router. You've got Ramp creating their (25:48):
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Ejaaz: own router. There's a lot of movement in the AI router side of things, (25:51):
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Ejaaz: and that's a thesis to unpack on a separate episode. (25:55):
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Ejaaz: And then you have neoclouds and power and energy, which has been the case for (25:58):
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Ejaaz: so many years at this point, where we have all these GPUs, we're going to have (26:01):
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Ejaaz: way more GPUs in the future, and we don't have enough power to serve for this. (26:05):
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Ejaaz: So we're looking into nuclear, we're looking into solar, we're looking into (26:09):
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Ejaaz: ripping jet engines off planes and trying to like spit it up at the back of (26:12):
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Ejaaz: a data center, which is what Elon Musk is literally doing. (26:15):
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Ejaaz: He bought a company to help him do that. And so I think we're going to see a (26:18):
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Ejaaz: bunch more of these investments, whether it pays out or whether it plays out (26:21):
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Ejaaz: is something we're going to see over the next couple of months. (26:25):
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Ejaaz: It's my strong belief that we will but again this could all be a house of cards (26:27):
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Ejaaz: and a lot of people think so and so i don't want to negate that fact (26:31):
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Josh: It's also worth noting that these aren't uh specific ai filings for 13f companies (26:34):
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Josh: like these are just the standard 13fs it just so happens that it seems like (26:39):
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Josh: a lot of the large funds are investing in ai which is interesting is like if (26:43):
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Josh: if everyone's focused here is there an edge elsewhere is there some place that (26:47):
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Josh: other people aren't looking because everyone is seemingly interested in figuring (26:51):
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Josh: out how this ai trade plays out possibly (26:55):
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Josh: probably i don't see my voice tesla anywhere come on where's the love over there, (26:57):
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Josh: but it's interesting it's interesting to think like okay well if everyone's (27:01):
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Josh: focused on these things is there an edge is there alpha elsewhere that we may (27:04):
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Josh: be able to extract from the market like it's interesting. (27:08):
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Ejaaz: No one's holding nvidia josh like some of the like the major company that's making these these gpus (27:10):
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Josh: Yeah, that was a, yeah, actually Nvidia was missing from most of these, huh? (27:16):
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Josh: Except for, I believe, Gavin Baker, maybe, has it as his largest holding. (27:20):
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Josh: I think he's Jensen's biggest bull. He probably owns quite a bit. (27:25):
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Josh: Warren Buffett's still, Berkshire Hathaway's biggest holding is Apple. (27:27):
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Josh: And I find it ironic that it's been the biggest holding forever because everyone's (27:30):
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Josh: just kind of forgot about it. (27:33):
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Josh: They've moved past it. And yet Apple is currently sitting here, (27:35):
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Josh: the most valuable company in the world, even more so than Nvidia. (27:37):
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Josh: So it's pretty interesting to see kind of how these companies structure themselves, (27:40):
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Josh: see which ones are more nimble, like Leopold, and getting blown out of their (27:44):
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Josh: portfolios, which ones have been around since the beginning of time, like Berkshire. (27:47):
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Josh: And they're actually just long, some of these fantastic companies that is now (27:51):
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Josh: the most valuable company in the world. (27:56):
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Josh: And perhaps you can use that to kind of gauge your risk tolerance and see where (27:57):
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Josh: your personal portfolio fits into this. (28:01):
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Josh: But that is the entirety of the episode today. I want to just thank everyone (28:04):
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Josh: so much for watching, for being here with us, for hearing about the aftermath (28:08):
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Josh: of the Leopold blow up i thought this would be exciting for different reasons, (28:12):
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Josh: but um unfortunately it is exciting because we get to see the final holdings (28:17):
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Josh: before everything exploded and now what you're looking at is probably the citadel (28:21):
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Josh: portfolio because they bought the entire thing in a single block of trades so. (28:25):
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Ejaaz: Which there are about two and a half x just fyi from that (28:29):
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Josh: Purchase imagine oh my. (28:32):
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Ejaaz: God two weeks also didn't leopold make like a 500 million dollar private investment (28:33):
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Ejaaz: I saw his report on like Bloomberg or Reuters or somewhere. (28:39):
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Josh: Yeah, man, he's down, but far from out. (28:42):
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Ejaaz: He'll be back. Dude, he's already back. He's back. Where did he get that cash? (28:44):
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Josh: It's going to, you know, it's going to be really fun. You know what you really (28:47):
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Josh: need to stick around for is the next Leopold 13F. Because then we'll see what (28:49):
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Josh: rises from the ashes. It's like, okay, like what is left? Is it going to be zero? (28:55):
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Josh: Is he even going to have enough money on the balance sheet to be required to file a 13F? (28:59):
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Josh: We will see. I suspect the answer will be yes. I suspect it is a Phoenix rising (29:03):
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Josh: from the ashes, a strong comeback. (29:07):
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Josh: But that's the update if you enjoyed this episode as always uh first thank you (29:09):
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Josh: so much for watching we really appreciate you sticking around till the end (29:13):
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Josh: second uh don't forget to share with a friend who might also enjoy don't forget (29:15):
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Josh: to give us a thumbs up on youtube or wherever you view your podcast eejus any (29:18):
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Josh: final parting thoughts before we head out of here today. (29:22):
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Ejaaz: No i uh i'm curious for the folks who are listening who i i get are very investor (29:25):
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Ejaaz: oriented are there any layers of the stack or if there are any companies that (29:30):
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Ejaaz: were missed like we would love to to hear about it like leave us in the comments (29:34):
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Ejaaz: a note, DM us, whatever. (29:38):
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Ejaaz: We're always looking for like where the edge might potentially be. (29:40):
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Ejaaz: And, you know, Josh and I have got our rose-tinted glasses on, right? We love memory. (29:43):
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Ejaaz: We love power. We love NVIDIA. We love Google. So if you have any ideas, (29:46):
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Ejaaz: let us know. But that I think is it. (29:50):
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Ejaaz: And yeah, we will see you guys on the next one. (29:52):
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