Episode Transcript
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Matt Allen (00:01):
Welcome back to the Matt Allen Show. I'm your host,
Matt Allen, here with, mentor,philosopher wife, Rob. We have a
lot to talk about today. We haveBowen and Palantir. EA Sports
was acquired by the Saudis.
Shout out to our friends out inSaudi Arabia. And Alibaba. So a
few geopolitical and financestories. Let's let's get into
(00:21):
it. Ra, what's going on?
Rob (00:24):
No. What isn't going on is a better question, but some
interesting topics todayentering the busy time of year
and in six weeks we'll haveChristmas decorations up. So
it's pretty crazy how fast timeis going.
Matt Allen (00:39):
Yep. It was my, it was my birthday yesterday.
Rob (00:41):
So. Oh yeah. That's right. I saw you on your birthday.
Matt Allen (00:44):
You did. You did. So,
Rob (00:47):
I hope nobody takes that information. Seals your identity
now.
Matt Allen (00:51):
So was mine or yours?
Rob (00:53):
Yours, you're the one giving out your birthday.
Matt Allen (00:56):
Well, I know. I'm not, that's the least of my
concerns. You know, it was good.We, went to, my parents came
down and to Florida and we hadlunch and then did work and then
met up with some buddies forhappy hour. So it was a good
day.
Rob (01:15):
I agree. I agree. Every birthday should be like that.
Matt Allen (01:19):
Sure. And I had a we had a wedding in, Saint Simons
this weekend. So that was fun. Igot to see some buddies there as
well. A weird town.
That's all I got to say. Maybeit was just maybe just the
places we were we were going.That that that could be part of
it as well.
Rob (01:35):
I've never been there. Oh, I guess the other thing on my
mind is Penn State's gonnaabsolutely fire James Franklin.
This guy cannot win against anysort of ranked opponent. It's
pathetic.
Matt Allen (01:45):
Yeah. Well, I felt I felt bad for you when, when
y'all, when they, when y'alllost. So
Rob (01:50):
that's how look, I didn't go there, but been a fan since a
little kid, but yes, she shoulddefinitely be fired.
Matt Allen (01:57):
It was not a very me and our friend Halsey was
talking about yesterday. Youknow, he's a FSU fan. Like FSU
lost, Georgia lost, and then hisdaughter went to LSU. They lost.
Pitt State lost.
It a bad it was a bad sportsweekend.
Rob (02:13):
Yeah. As far as circle of friends, it was not great.
Matt Allen (02:15):
It was not it was not good at all. So Yeah.
Rob (02:19):
Is there anything else? No. I think that's it. Excited to
get into these three threetopics.
Matt Allen (02:25):
So we'll open up with the with the news out of
last week, which is Boeing andPalantir. Boeing just announced
a partnership with Palantir tobring artificial intelligence to
defense programs and even itsfactories. This means Palantir's
foundry program, which will bedeployed across production lines
for fighter jets, helicopters,missiles, and satellites.
They'll also be working togetheron classified projects for
military customers. Now, isn'tjust a small software upgrade,
(02:49):
Rob.
This is Boeing essentiallyadmitting that future defense
advantage is gonna be built onAI. Palantir, co founded by,
which is obviously co founded byPeter Thiel, already has deep
roots in the national security.They just landed an
administrative defense deal inThe United Kingdom. So what
we're seeing here is really justanother case of Palantir truly
emerging. Interesting fact isthat Boeing, you know, Boeing
(03:10):
was a total disaster in 2024.
Their stock was a disaster.Their PR was a disaster. The new
CEO has made a lot of changes.They're really kicking things
high up high in gear. I've beenimpressed with her with the
turnaround so far.
So my first question to you,Rob, is this bigger for Boeing,
or is it bigger for Palantir?Oh. And and I wanna make one
(03:33):
note one more note for, beforethat is that Palantir is a one
of the first ever stocks that Isent out to our premium
newsletter subscribers a longtime ago. I've been in Palantir
for a long time is but now it isit's really big into conspiracy
theories. A lot of things goahead.
We'll get into that. So sorry tointerrupt, but go on.
Rob (03:54):
No, that's okay. And then, I want to also talk about, do
you think it's too late to getinto Palantir at this point? But
let's, let's table that for asecond. The big winner here is
obviously Boeing because as wetalked about a couple of weeks
ago, they are an absolute trashdumpster fire of a company,
completely ruining everythingthey touch. And so they have
(04:16):
nowhere to go with up andhopefully Palantir with through
this AI software can maybe helpwith the logistics and their
efficiencies and maybe they canactually build something.
As you can tell, I'm not big onBoeing. I just, they're an awful
company. They're an absolutedisgrace embarrassment of a
company. Well, I would, but Iwanna keep this kid friendly.
Matt Allen (04:44):
I think it's interesting because one of the
biggest tailwinds for Palantirhas always been is that they've
only had, you know, majority ofthe revenue came from government
contracts. That's for thecompany. Palantir helped us kill
Osama Bin Laden. That's theoriginal thing they would do.
They were a military contractcompany.
They would find land mines outin The Middle East and that's
(05:06):
what they were there for. In thelast couple of years, really led
actually by a hospital you'revery familiar with, Tampa
General. That was one of theirbig, big first commercial
clients. And they, you know, andthey completely changed how
Tampa General operates on a dayto day basis. And, you know,
their operational efficienciesis way better.
At least that's what the casestudies say, obviously. And wait
(05:29):
times, things like that, allbecause of Palantir systems. And
so when Palantir's stocks reallyexploded is because they've
added commercial clients, andnow they keep on stacking, keep
on stacking. So I don'tpersonally think that Boeing is
a is a big enough name brandbecause it's still in that
defense space. So I'm with youthat I I think it's massive for
(05:49):
Boeing, but it doesn't you know,if you had Palantir and Disney
partner with, you know, thatthat that adds even more
credibility to what Palantir cando on the commercial side.
I don't think Boeing has thatpop for it of, hey. How can it
get even more commercialclients? Because Boeing's Boeing
is what Palantir does. And thered flag about Palantir is, hey,
(06:10):
they're good at they're good atthe Fitz contracts. Can they do
other stuff?
And we know they can Let
Rob (06:17):
me interrupt you to counterpoint you. Don't you
think if Palantir can somehowchange Boeing around and
actually make them what theyused to be, doesn't other
companies then look at it andsay, well, there's something to
this Palantir software, we needto start looking at it.
Matt Allen (06:33):
Well, I agree, but I think it's, I think though,
because they're going do so muchdefense stuff that people will
still have that associationwith, oh, it's, it's a defense
company first.
Rob (06:45):
But do you think, okay, but also their commercial side of
Boeing is a complete dumpsterfire as well. Don't you think
this bleeds over into thecommercial aspect as well? And
maybe Boeing starts producingplanes again and maybe the
domestic airline industrybenefits from that. Do you see a
world where maybe Palantir getsBoeing doing what they're
(07:09):
supposed to do throughlogistics? And then all of a
sudden, it's been in the newsfor the last year.
Southwest logistics is awful.United's had trouble. Like, you
think, is there a world wherePalantir uses this and in three
years from now they are into thelogistics of commercial airfare
and trying to clean up what is ahuge mess right now.
Matt Allen (07:32):
I could see that, but I can see that coming
through, a contract with the,with the FFA, the federal
regulators. I could see that. Ithink they're gonna have a hand
on everything, but I don't thinkthis moves the needle
immediately where a CEO is gonnapick up the phone and say, you
know what? That's my whole pointis that because Yeah,
Rob (07:54):
I agree. Not immediately, but if they have success here,
don't you think then it opens aton more doors?
Matt Allen (08:00):
Yeah. For sure. But it's still hard to like because
a lot of people don't evenunderstand what Palantir does.
And so it's gonna be hard forthat CEO is not thinking, hey,
why would I invest tons of thismoney? But I do think if they
had a name, I mean, like a Teslaor just a name brand that makes
people go wide eyed and figureout, Hey, this is why their
commercial business is doingthis.
(08:21):
This is what I could help with.Think the floodgates would open
for balance here. I just don'tthink Boeing does that because
people associate Boeing withmilitary stuff still. Does that
make It
Rob (08:31):
does. I guess I'm looking at it from the aspect of
everybody, people are flyingmore now than ever as their main
mode of transportation. Flyingis a mess domestically. Boeing
is a huge cause of that becausethey cannot produce planes fast
enough. So if Palantir goes in,cleans up the defense side, it
bleeds over to the commercialside.
(08:53):
Does Delta, does AmericanAirlines, does United, the
Southwest, do other companiesthen look at Palantir and say,
look, we're having logisticalissues. Does it bleed into
there? And then all of a suddenit's like the flood gates are
open. That's the only thing I'malluding to. I agree with you,
probably doesn't do anythingnow, but I think it gives the
chance for Palantir really tobleed over into the mainstream
(09:14):
because they have straightenedout a company that is so trash
right now.
Matt Allen (09:18):
Yeah. And and that's what it's really gonna because
one only a few people will beable to to use Palantir, but I I
I do think I do completelyunderstand what you're saying.
And I I think it's gonna if thatchanges, it would if if that if
if they do that, it would behuge for Palantir's business
outside of commercial. I justdon't know if it's gonna do that
(09:40):
immediately just for the deal. Ido have a follow-up question to
that, though.
With all these conspiracytheories about Palantir, do you
think that it could be anegative headline and people
would not use your business?
Rob (09:53):
No, because I think the people who are gonna use
Palantir don't worry aboutconspiracy theories.
Matt Allen (09:59):
But they worry about customers. Let's take let's take
let's take let's take the Disneyexample. A lot of people would
be outraged at Disney's partnerwith them.
Rob (10:08):
And a of people are outraged at Disney already
because of their philosophicalneeds.
Matt Allen (10:11):
But okay. I'm just I'm just using Disney's example.
Rob (10:14):
Yeah. I don't think so. I don't think so. I guess And so
now I have a question for you.What does this do to their two
stocks?
Boeing down, way down overhistorical highs. Do they even
still have a dividend? I knowthey paused it at one point. I
don't follow it anymore becauseit's so bad. Do you think this,
(10:34):
do you think this starts anupward trend for Boeing and
what's it do for Palantir stock?
Matt Allen (10:41):
So it will not do anything for Palantir stock.
Boeing's up 41% on the year.They moved on the news, but I
don't think there's anything forPalantir stock because Palantir
stock, in my opinion, isincredibly overvalued. It has a
PE ratio of 600. I think it's adefinition of the AI bubble.
(11:02):
Doesn't mean I I I think one dayit would be truly valued as a
company. So that is get I Ithink in the valuation, you look
at what it is. The valuation'scrazy.
Rob (11:11):
Buying it now though, what you're saying is buying it now,
you're paying an ultra premium.So probably not the best
investment.
Matt Allen (11:17):
Not right now. No. I I think I think it is a long
term for sure if you can get itat a reasonable price. And I
think as long as AI bubble isstill going on, it will keep on
going up. But I think it'll beone of the first to falter.
It is currently worth$428,000,000,000 on parallels.
How much revenue do they do? In2024 in 2024, they did they did
(11:46):
$3,000,000,000 worth of revenueand valued at a $400,000,000,000
company. And that's crazy.
Rob (11:51):
That is crazy. I wish I could get that valuation on any
sort of business I have.
Matt Allen (11:56):
And there's nothing against talent towards business
at all. They're just they'rejust the definition. Like, it's
gonna be worth that one day. Itruly believe that, but I just
it's just part the AI bubble.And then also, when you have all
these commercial stuffs comingin, as you just said, the
floodgates, know, we talk aboutgoing mainstream.
I mean, the technology'sunbelievable. I actually
listened to Alex Karp, the CEO,who is obviously very
controversial. One of thefounders, Peter Till. It's a
(12:19):
very plural company because JDVance, vice president, they
invested in JD Vance's venturefund. They're the ones that
kinda brought JD Vance up along.
So there's a lot of experiencesgoing along along. Yada yada.
One interesting thing aboutPalantir is sort the Ukraine
Ukraine war, our our department,wanted them to go and work in
(12:40):
Ukraine, and they're doing thatagainst the Russian military and
basically for free as a way forus to test our own software if
we ever need to use it. So it'skind of interesting. Alex Carr
was talking about a lot ofthings that are helping Ukraine
and the United States military,has gone to test some of the
things that we were using thewar one day.
So that was an interesting angleto look at.
Rob (13:01):
Yeah. So I think to sum things up, what we would say is
Palantir wildly overvalued now,but has a ton of potential to be
valued properly in the future.
Matt Allen (13:12):
For sure. Oh, yeah. For sure. Yeah. When the when
the AI bubble crashes, which itis in a bubble, it'll be one of
first to fall out, I would Iwould think.
But it's it's but it's I said,that doesn't take anything away
from the from the actualcompany.
Rob (13:26):
Well, we agree on that. So I won't be winning any more
lunches from you on that deal.Maybe on the next topic.
Matt Allen (13:33):
Well, speaking of the the same kind of
geopolitical stuff is next up.We have a massive geopolitical
twist. EA's or EA, the videogames, is being taken private in
a $55,000,000,000 all cash dealled by Saudi Arabia's public
investment funds. Rob, they own10% of the company while it was
(13:56):
public, along with Silver Lake,who's just got part of TikTok,
and then Jared Kushner, thepresident Trump's son in law's
Affinity Partners. After thisdeal, they'll control a massive
stake in the company.
This this the Saudis will. Whatmakes this even more interesting
to me is that Kushner's privateequity fund is heavily backed by
Saudi Arabian money. So you gotSaudi Arabia, Silver Lake, and
(14:18):
Jared Kushner shaping the futureof one of America's biggest
gaming companies that has apretty big influence on kids.
Interesting fact, Rob, is theyhad a complete business model
shift where whenever I wasgrowing up, you know, they made
a lot of money off just thegames. In 2024, 75% of their
(14:38):
revenue came from live in gameexperiences where where kids are
buying tokens or where, youknow, whatever you buy.
So so, Rob, I think the thinggood place to start here is two
places. One, what do you thinkabout the Saudis doing this? And
then two, do you think morecompanies will follow suit and
(14:59):
go private?
Rob (15:02):
Okay. So, first of all, what do I think about the Saudis
doing this? I think it's a greatmove for them, right? As they
try to expand their reach in thepublic affairs region and what
they have going on. I think theyhave very smartly and
strategically looked at theyounger generations, right?
And what are the youngergenerations doing? They're in
(15:23):
the technology, they're playingvideo games. E sports is still
in its infancy. And so I thinkthis is a great move by the
Saudis, the investment fund andtheir partners. It is
interesting to me, not to nerdout on the deal too much, but
(15:44):
it's interesting that I think itwas JP Morgan that underwrote,
what was it?
20,000,000,000 of debt in this?
Matt Allen (15:50):
It's all that.
Rob (15:52):
So what I think is fascinating about that is, they
must think that either currentrevenue, so that their current
revenue can either pay off thatdebt either by streamlining what
they have going on there, orsomebody somewhere has
identified an untapped,unbelievable revenue source,
(16:15):
which I'm guessing is onlinegaming. What's also interesting
to me is, I think this is thedeal that is going to bring e
sports to the mainstream. Andwhat I mean by that is, look at
how much money Saudi Arabia haspoured into lip golf and how
(16:37):
competitive it came right awaywith the PGA Tour. I think
they're gonna do the same thingfor eSports. Now that they
control the That's company agood That makes all the games, I
think you're they're gonna put aton of resources in the
marketing, a ton of resourcesinto development of teams, a ton
of resources into prizes.
(16:57):
I wouldn't be a bit surprised iftwo years from now you can go on
Netflix or HBO or a broadcastchannel or a cable channel and
watch e gaming.
Matt Allen (17:11):
That's huge. So do you think they're gonna pour
just tons of money into it whenthey did live to make it
competitive or they're gonna use
Rob (17:16):
their own? No, think they have to do that to increase the
pool of So I think by doingthat, they get more online
gamers, more people buying forthe online gaming experience,
increases revenue, pays off thedebt, and makes EA more
valuable. I don't thinkincreasing EA's value is in new
game development. Right? I don'tthink they're saying, Hey, we
(17:40):
can make, we can go from, Ithink their annual revenue over
the last three years kind offlat around 8 and a half
billion.
I think that's what it was. Idon't think they can say, Hey,
we can get to 12,000,000,000 bycoming up with new games. I
think they're thinking we canget to 12,000,000,000 by making
online gaming more popular andmore exciting and more awesome.
(18:02):
Yeah, that's
Matt Allen (18:05):
very true. It's interesting that they've done
such a good job, the Saudishave, like you said, of really
going to the youth generation. Ihave a few friends in Saudi
Arabia. I talk to them a lot.Yasir was telling me that, you
know, the crown prince has tonsof support among the younger
people, which is around 70%.
I think he has the vision, youknow, that they're not going to
(18:26):
rely on oil, even, even if it'snot him. You know, the crown
prince is in his thirties.There's gonna be one day, we
don't know when, that they'renot going to be relying on oil
as their mainstream of revenuelike they do now. And they're
doing such a good job of almost,like you said, investing in the
youths, investing in youngpeople, making their investments
where they're kind of thinkingforty, fifty years out.
Rob (18:46):
Yes. I think that's what this move is about for sure.
Matt Allen (18:49):
Yeah. I mean, and if they can do what you're saying
and kind of create a whole esports league that's super
popular and they own it, that'sgonna be massive.
Rob (18:57):
And they have the resources to do that.
Matt Allen (19:00):
For sure. Have
Rob (19:01):
some EA did not. And so, I think this allows by going
private. I think the Saudisowning a 10% stake already
realized this, realized theycould not do this as a publicly
traded company. And so they tookit private in order to expand
online stuff. And that's howthey see EA growing.
(19:24):
And they paid a huge premium,
Matt Allen (19:27):
you know, for the company. But like, I mean, when
they had the cash, they did. Itwas interesting to me that they
brought in Jared Kushner. Idon't know. And Silver Lake, I I
don't get that because they canthey can easily do this deal by
themselves.
I'm not sure if it's because ofpolitics that they wanted to
(19:47):
have insurance there because nowthe government will not do that
there's no, we literally don't.
Rob (19:52):
I don't think the government would have done
anything. I think it might be asimple case of, Hey, yes, we
could do it ourselves, but whynot bring in partners and
diversify our risk a little bit?And by the way, with Jared
Kushner, you get someone of thegeneration that probably grew up
playing the games, probably hasa little bit of a pulse on the
(20:13):
market, has a name in America,which means if they are going to
go, like at some point, whywouldn't you just make him
commissioner of E League if it'sbig enough, the first one? Then
you have a name, then you have afollowing, you have a brand. I
think there were a number ofreasons outside of the political
realm for including them.
Matt Allen (20:32):
Yeah, for sure. I mean, that makes sense. Silver
Lake, you know, is in thatTikTok deal as well. So I mean,
they're making some pretty bigmoves.
Rob (20:40):
Definitely.
Matt Allen (20:42):
Do you think more companies will follow suit and
go private? Because, you know,there's, we have trends, if you
look at the history of the stockmarket, we have trends, as you
know, where people, companies goprivate or they, everyone goes
public, where, you know, or it.
Rob (20:56):
So, the only other one I can think of, if any of our
listeners are heavy into thecollectible space, I. E. Comic
books, trading cards, TCG, whichis trading card gaming, I. E.
Pokemon and some other things,They will be familiar with a
company called CollectorsUniverse, which owns
(21:17):
professional sportsauthenticators.
Nat Turner took them private, Iwant to say maybe 2021 or 2020
for 3 quarters of a billiondollars or right around there.
And ever since then has expandedthe company tremendously.
They've got into doing somevertical integration, put
(21:38):
fingers into a whole bunch ofdifferent areas now. And I bet
you their revenue has exploded.I think what you're seeing is
when you're a publicly tradedcompany, it's hard to be
innovative because you to benimble, but then you also have
to deliver a premium to yourstockholders.
And so if you wanna take yourcompany in an innovation level
(21:59):
and try to go to the next levelup, make it worth more, you're
gonna go private. I think that'swhat this was about.
Matt Allen (22:06):
Yeah, we saw that at Twitter big time. Twitter had a
lot of things that were going onthat were, the stock was
horrible. And there was, as wefound out, there was a lot of
other things going on there, butthey really couldn't mean the
stock was already so bad thatthey couldn't spend tons of
money to do exactly what yousaid, to innovate. Because, you
(22:27):
know, when you do R and D likeZuckerberg does at Facebook and
Meta, he does have failures.Right.
But he's allowed to get awaywith that. He's in all the
success he had. If you wereTwitter's that Twitter CEO, the
new one, if he started putting abillion dollars into R and D for
to innovate, which he probablyshould have done, he would get
fired. And so, when Elon tookhim private, he was able to do
(22:48):
that quickly.
Rob (22:51):
Yeah. I think, and this goes back to what's happening in
the world. You're seeing such aconcentration of wealth in
certain areas that for the firsttime in a long time, you're
gonna start seeing the abilityto take companies private. And
so I think you are gonna see ifpeople with the resources can
(23:12):
identify other companies thatyou can do this, take it private
and then innovate and explodeyour revenue without answering
the stockholders, you know, takerisks, then I think you're gonna
see more of this.
Matt Allen (23:25):
Yeah. I mean, because it all comes down to
like, for example, have coming,Bean Media, Bean like, if we
would never want to take itpublic unless we needed money.
But then also I think there's aworld to say, well, if we
weren't running Bean anymore,there's a good thing of it being
public because then you havemore say, there's a lot of pros
(23:47):
and cons to having a publiccompany and not. I think a lot
of it comes down to thefounders. And then once you have
the founders, I think it's liketwo conversations almost.
When you company have led by afounder, when you have a company
not led by a founder. I thinkit's like two conversations, and
they almost like two differentones because there's just so
many different rules andregulations in my, like, how
(24:08):
people operate when they're nota founder. And I'm a big
believer in investing in founderled companies. I think every,
every slog in my laundryportfolio is led by a founder.
Rob (24:19):
Yeah. Cause they still have the passion and they still have
the vision
Matt Allen (24:22):
for sure. I mean, we sleep, we're seeing that in the
video right now. If you've, if,if, if we talked about this last
week, if Jensen was not part ofNvidia for all this time and
someone was selling a messageof, oh, we're gonna have, we're
gonna have this AI thing. It'sgonna blow up, blow up like
this. He would've got fired.
He or she would've got fired.Cause they weren't producing the
(24:42):
results they should have. But hewas there. They believed in him.
But that's the big difference ifyou're listening when you're at
home.
I do have some good news foryou. I have some exciting news
for you.
Rob (24:51):
Oh, I could use some good and exciting news.
Matt Allen (24:53):
Because you probably haven't seen it as you because
you're pretty busy withsomething you got going on this
week, but you're a big boxingfan.
Rob (25:01):
I am.
Matt Allen (25:02):
You know, Saudi Arabia and Dana White have a
league, Zufa Boxing. They justannounced a deal deal with
Paramount Plus and the Ellisonfamily, and they're gonna host
12 main events coming up andthey're gonna have their own
title belt. And Dana Whiteprobably just said again that
they're gonna, that he's gonnabring him back bigger than it
(25:23):
was, which is gonna be hard tobe bigger than it was, but if
anyone can do it, it's down.
Rob (25:27):
I agree. That's that's that's great news for sports
fans. Sports fans, entertainmentfans, there is nothing like a
main event heavyweight fight.
Matt Allen (25:36):
It's the the WWE I think the WWE is involved as
well. Don't they own
Rob (25:40):
Well, yeah. You know? So, no, TKO TKO. Acquired WWE last
year. So TKO TKO owns WWE andUFC.
Matt Allen (25:51):
Do you know anything about that stock?
Rob (25:54):
I know. I think WWE, when they acquire when TKO acquired,
WWE was trading at around 90 or$95 a share. And I think after
the merger, it hit $1.20. TKOstocked it. I I don't know where
it's at now, but I know theirtheir revenue is at an all time
high.
Matt Allen (26:12):
I just pulled up. It at $2.00 4 now. Yeah. It's as
you know, I have this we have amutual friend, so I won't say
his name, but who loves owningstock of a publicly traded
company. And I'm sorry, owningstock of a publicly traded
sports team.
Rob (26:31):
Yeah. Mutual friend's a strong, strong term there, but
Matt Allen (26:35):
but it, you know
Rob (26:36):
Anyways, this was was thinking so, though, is a
Matt Allen (26:38):
TKO is a good deal, it sounds like.
Rob (26:40):
Yeah. Right. Because they're a legitimate company.
Matt Allen (26:43):
Yeah. For sure. So but, yeah, I thought you'd be
excited about that since we'reon top of the Saudis. I wanted
to tell you that right here.
Rob (26:48):
I think it's gonna be great.
Matt Allen (26:49):
Yep. They I mean, this there it goes again to
bring a conversation we had lastweek. Parabat making making
moves. Right. So it's pretty inpretty interesting.
For our third story, still stillin geopolitical world and the
tech world, let's head over toChina. Alibaba's stock is
absolutely ripping. Shares arealmost 50% this month, making it
(27:13):
one of the best performers inHong Kong and one the best
performers in United States. Ifyou didn't if you didn't know,
when you own a Chinese stock,you you aren't actually a
shareholder. It's if you own itin Hong Kong, you'd be a
shareholder in China.
If, like, they're calleddepositories. And so basically,
you're you're just owning a deedalmost. You can't vote. You
(27:36):
can't vote as a shareholder.It's a lot different.
So when I when you wheneverwhenever you refer to a stock
like Alibaba, a lot of times onWall Street, they'll refer to
what it's doing in Hong Kong. SoI thought you might find it a
little interesting. Mhmm. Butwhat's driving it is Alibaba has
been obviously pouring moneyinto data centers. They're
expanding internationally, andthen they just released one of
their new AIs, and it's rightnow the best performance
(27:59):
performing AI is outperformingthings like ChatGPT, Grok,
Perplexity for now that thosechange literally every week.
But Rob, do think this is, whatdo you think this means for the
race AI gets shine up?
Rob (28:16):
Well, I think it takes it up a whole level because now we
know the way China operates as atotalitarian type government. So
if you're going to putgovernment resources behind the
AI race and Alibaba in China,which I believe they would, why
wouldn't they? Because of thegeopolitical aspects of it. I
think this gives Alibaba a legup on all the American and
(28:38):
international companies.
Matt Allen (28:40):
Yeah. They had that competitor, DeepSeek, which is a
popular model. You can downloadit here in America. Play around
with occasionally. Do you thinkthat America should ban DeepSeek
and Alibaba's AI?
Yes. From the out store? Yep.Completely agree with you. And
(29:00):
the reason is before peoplemight get up in arms that
there's, I have, I can give youa bunch of reasons, Rob.
One I'll give you that's justpetty is that Zuckerberg goes in
2010 to China. They say, Hey, wewanna create our own version of
Facebook. We want you to do it.Okay? He does it.
(29:21):
American government, thepresident Obama administration
was like, Hey, this is awesome.This is a good way for
businesses to get in America, toget in China. He deploys it all.
They kick them out the next dayand steal the IP. Google goes
back again, does the same thing.
They steal the IP, steal thealgorithms, kick them out. I
cannot stand that. They stealall intellectual property. It's
(29:43):
one of the biggest things thatno one talks about and they
should absolutely be banned justsimply because of that. Even
TikToks and NareRidlet here.
I don't even talk about what isthe national security stuff.
Just need it I because of
Rob (29:59):
argued this last week. You took the opposite side.
Matt Allen (30:02):
No. I mean, from that angle of, Hey, why are we
letting all these, app storesfrom Shopify, all these Chinese
companies come in the app storewhen they don't let us like, I'm
very passionate about apps.
Rob (30:12):
I agree. I totally agree with you.
Matt Allen (30:16):
But I just I don't that that's not gonna happen,
obviously, especially when we'renegotiating.
Rob (30:22):
Well, but here's the thing. Alibaba is also now working on a
chip to compete with Nvidia. Soif they become vertically
integrated like that, where theycan do the GPU and they have the
AI, I mean, puts the rest of theworld at a real disadvantage to
China. And so we should bepaying attention to these
(30:43):
things.
Matt Allen (30:44):
But I will say this, I do believe So do you remember
when DeepSeek was released acouple of months ago and it was
a bombshell? Like, hey, weanticipate we we anticipate
Alibaba doing this. Right?They're a great company.
DeepSeek was released and it wasa bombshell.
People were wondering how'd theyget the GPUs? Sam Altman comes
(31:06):
out and says, this doesn't addup. And we found out, hey,
Nvidia was selling them toQatar. Qatar was taking them and
selling them illegally to China.And I think Alibaba's doing that
with their GPUs.
Hot take, but I I think I thinkthey're still an American GPUs,
and that's how they're doing it.And I I think we need to put a
(31:28):
ban on that quickly. And we we
Rob (31:31):
should be putting our heads in the sand.
Matt Allen (31:33):
We we we we addressed it just recently, but,
I mean, I I have to questionanytime they have they have AI
that comes out better than ours,where where are they getting the
GPUs? Where are they getting thethe semiconductors? I mean,
that's a that's a real question.
Rob (31:47):
Look, think we can both agree. This is a problem that
goes back to we could all blameRichard Nixon and Henry
Kissinger for opening up China.What do you have to say about
that?
Matt Allen (31:59):
America would not be where it was at today if we
didn't open up China. It was oneof the greatest things from a
president. What killed, whathelped China was NAFTA. What
made our economy great
Rob (32:15):
was nobody the economy. Yes. Our listeners ought to know
how much you love Richard Nixon.
Matt Allen (32:20):
He's one of the greatest presidents we ever had.
Rob (32:24):
Would say he's definitely one of the most underrated
presidents we ever had
Matt Allen (32:28):
for sure. Yes. He has the second largest win
besides he only lost two statesin 1972. And he thought he had
the cheat to win, which ispretty wild, but he just
Rob (32:40):
Well, there's a real debate on whether he thought that or
his people did. And then he justhad he got caught in the cover
up, but we we we can addressthat another time. But, yeah,
Matt is a fanboy for RichardNixon. And so I wanted to gig
him while I could. So, yeah,this is all your boy's fault.
Matt Allen (32:57):
No, it's absolutely not. American economy would not
be where it was at today. Itwasn't for opening up to the
East. And we have Richard Nixon.
Rob (33:04):
Hey, I'd also argue, get going back to your boy, Richard
Nixon, the American economy, wewould not have all of this debt
and inflation had he not takenus off the gold standard.
Matt Allen (33:13):
Not true. Germany in the thirties was on tons of was
backed by the gold standard.
Rob (33:20):
No, they were not. They that's what caused her
hyperinflation. They were notbacked by the gold standard.
Matt Allen (33:26):
I'm not, I don't
Rob (33:27):
know about that. Don't argue with a former history
teacher. The hyperinflation iswhat caused, because they went
away and they just startedprinting money.
Matt Allen (33:34):
If you're a history teacher, you would know how good
what Nixon did to this country.
Rob (33:40):
Just saying if we were still on the gold standard.
Matt Allen (33:43):
No. What? We would not have the economic growth
that we've had.
Rob (33:47):
Agreed. At the same time, a house would probably cost a
100,000 or 150,000 or-
Matt Allen (33:54):
Yeah. Then people would making $15,000 a year.
Correct.
Rob (33:58):
But hey, if you could live
Matt Allen (34:00):
on We would have no growth.
Rob (34:01):
If you could live on 10,000 a year, making fifteen's not
bad. I'm just.
Matt Allen (34:06):
You wouldn't have your the new car you got. You
wouldn't even have a touchscreenradio if we were still on the
gold standard.
Rob (34:13):
I'll take it. Please, please. I'd much rather the old
push button. You went to nineeighty am. I'll take that in
three seconds.
Well, anyway. Instead of mypushing all things, I have no
idea what to do.
Matt Allen (34:28):
Anyway, that was a pretty outrageous statement
about Nixon, I just wanna say.
Rob (34:33):
One But could argue either way.
Matt Allen (34:36):
If, I'm not if we did, if, if we, if we didn't
have NAFTA, we never we that'swe propped them up with NAFTA.
Rob (34:46):
You're not going to get a argue mad at me about that.
Matt Allen (34:49):
It wasn't for NAFTA. Were just trading with them,
making money. Then
Rob (34:54):
I was like, the way this podcast is going, we ought to
just scrap the whole thing andjust talk about foreign policy.
What we always end up with onevery on every single issue we
talk about.
Matt Allen (35:04):
Oh, yeah. There we go. Yeah. The well, back to
Alibaba. Do you think that therethat a ban's coming for them?
That's a serious question in theApp Store. And do you think that
it's a No.
Rob (35:19):
No. Because I don't think we have the backbone to do it.
Matt Allen (35:21):
Is that just because of trade? I mean, because
because here's your big thing.Listeners at home, it doesn't
sound weird, especially when mymom was talking about my mom was
asking me all this, and it wasit's hard to explain, but China
has the biggest thing over ourhead, which is massive, which is
minerals. Minerals are the mostimportant element in the world,
(35:44):
in the world of defense and AI.We have a list of, of critical
minerals that are, that areessential to national security.
And now essential to AI islisted. There's like 35 of them.
We only have five of themaccess. We get the rest from
China.
Rob (36:03):
Has the Trump administration really taking any
interest in Greenland?
Matt Allen (36:07):
There we go. So we don't have the backbone policy.
But we say we don't have thebackbone to ban them from from
AI or from from the ads becauseof those that kind of stuff.
Because we we need the mineralsfor chips and
Rob (36:19):
I don't know why we don't have the backbone, but we don't
have it. And so therefore itwon't be banned. That's the
answer to your question.
Matt Allen (36:27):
Yeah. Well, you got anything else?
Rob (36:32):
I don't think so. Not, not this week.
Matt Allen (36:35):
Oh, I have one for you. Huge, huge new deal out of,
of OpenAI. Two things, theyreleased their Sora two, which
is Sora is their video makingapp. It's unbelievable.
Actually, when we get off thepodcast, I'll send you the their
Instagram really just released.
(36:55):
The technology there is awesome.I mean, it's crazy. It looks
better than a movie, Rob. It'sunbelievable where you just type
in a prompt. The other thing isthey just made a deal with
Shopify.
And this deal with Shopify iswhen you start searching for
products, you can buy them inChatGPT or go immediately to a
Shopify website. So if you're ifyou wanna search if you wanna
Rob (37:15):
Why would somebody wanna do that? It make Yeah. It
Matt Allen (37:19):
And so like when they search on Google for, say,
shoes.
Rob (37:23):
Okay. So I think so what you're saying is if someone's
using ChatGPT as their searchengine
Matt Allen (37:28):
Yes.
Rob (37:28):
It will and I'm looking for a shirt with flowers embroidered
on it, it'll take me right tothe It'll take you
Matt Allen (37:35):
to a Shopify owned store. Got it. Which is, which
is huge. It's Sam Alban said hewon't do that because you know,
a lot of, entrepreneurs, smallbusinesses are all on Shopify.
So that would, so it was, it wassupporting the little man.
So I thought it was prettyinteresting news.
Rob (37:49):
Yeah. I agree with that. Had not heard that.
Matt Allen (37:51):
Yeah. It just came out. So
Rob (37:54):
Okay.
Matt Allen (37:55):
But I think that's huge. It's gonna make another
revenue. I'm I'm sure I could II assume OpenAI, since they're
not a public company, they don'ttalk much about their finances,
I assume they're gonna get sometype of kickback from Shopify.
Oh, of course. So, is, I mean,that's how it's
Rob (38:11):
Yeah. Much like, an affiliate network through
YouTube or something else likethat. Yeah.
Matt Allen (38:16):
I mean, it's, it's, it's huge. I mean, they're,
they're building a companythat's they're doing all the
right things in my opinion, whenit comes to how to monetize,
especially we, you don't, theydon't, there's no playbook on
how to monetize this type ofstuff besides the Google one,
but it's a lot different.
Rob (38:33):
Yeah. But do you think the other search engines like Yahoo
and Google, they'll follow suitwith all that?
Matt Allen (38:41):
Not Google. Because Google has what they have now. I
do think this probably scaresthem and ramps it up a lot more
into, they're already spendingbillions of dollars. I think
they're gonna probably have ameeting right now. So, we need
to spend more billions to notlet them take over.
So, owns 95% of search, like allthe traffic. And obviously
(39:04):
ChatGPT has came in been amassive hit on them because you
can just go to ChatGPT or yourlarge language model of choice
to answer some of the questionsthat you would just always use
for Google. But now I stillshop. You still do all kinds of
stuff on Google, but now thisis, they're getting into their
land again a little bit. So it'sinteresting.
(39:26):
And Wall Street's beenembarrassed on Google stock.
It's actually, if you wanna robone the best blue chip stocks to
own right now is probably Googlebecause it's so undervalued for
all this nonsense. Google'sturning into a lot bigger
company just in search. They'realmost taking a Saudi Arabian
method where they're not gonnayou know, we're just talking
about Saudi's not relying onoil. Google's positioned itself
(39:48):
so greatly to not have to worryabout search engine revenue ten,
fifteen.
Rob (39:52):
Well, they own YouTube as well. Right?
Matt Allen (39:55):
Yeah, for sure. They own Waymo, which is the, Thomas
driving, car company. They, youknow, they make so much money
just off their data. They own,because they changed from Google
to alphabet and they have likeevery letter on the actual
alphabet, they have a companythat they own underneath that,
or that's their vision. So it'sa, they do really well.
(40:16):
But in the short term, that'swhy the stock's not performed as
well as it should have,especially during the AI boom,
is the fear of search traffictaken. Then also you have a lot
of people using Gemini, forexample, who does, is, is the
state of Florida, partneredwith, like if, if you are a
state employee, like a stateemployee of Florida, are you
using Microsoft or Google? LikeMicrosoft, Microsoft office or
(40:39):
Google suite?
Rob (40:42):
I would guess it's Microsoft. I know if you have to
have a meeting with somebodyover the internet, you have to
use Microsoft teams.
Matt Allen (40:51):
Okay. Well, and that's how a lot of these
companies like Microsoft'sobviously part of ChatBet, but
that's Google's, model too, isthat a lot of people or
employers use Google. And so youhave access to Gemini, which is
their large language model. Sothey've wrangled that in there.
So they're, they're gettingreally creative about it.
I'm not worried about Google. Idon't own this stock, but I'm
not worried about it.
Rob (41:11):
I also do not own the stock.
Matt Allen (41:14):
But it's a, this AI race is, as I said over and over
again, it's a bubble. This is afun bubble to watch.
Rob (41:22):
Definitely. And I might argue that some of the winners
coming out of the AI race mightnot be in a bubble because once
there's some clear winners, Ithink those stocks will explode
again.
Matt Allen (41:33):
So you you you you live the, the .com bubble. We
have clear leaders in AI, right?With revenue and things like
that. Were there any clearwinners besides the name of like
Amazon stock obviously went,went so high, went crazy, but
they weren't doing this type ofrevenue that like a OpenAI is,
(41:55):
was doing. Is that like, doesthat make sense?
Rob (41:59):
Yes. I guess I don't understand the question though.
Matt Allen (42:04):
So for example, when Amazon stock went all the way up
to in the hundreds and it cameall the way back down to $4 or
$5 or whatever, Let's takePalantir, for example. Let's say
that happens at Palantir. You'renot worried about Palantir.
Right? It's gonna bounce back.
It's gonna be fine. They haveOpen ChatGPT seven fifty million
weekly users. They're gonna befine. Snapchat's the only
(42:25):
company in the world that has abillion active users that can't
figure out how to monetize.ChatGET will figure it out.
ChatGET will figure that out.But during the .com era, when
Amazon came back to $4 a shareor whatever it was, a crazy
fall, people were worried aboutAmazon. Like, were they? Or,
where is it, where is it?
Rob (42:44):
Yeah. Because, well, they had more diversified.
Matt Allen (42:47):
Oracle's another good one too.
Rob (42:49):
Yeah. Oracle was super expensive. Yeah.
Matt Allen (42:52):
Yeah. But like now
Rob (42:53):
it's back up.
Matt Allen (42:54):
But like at the time, could you have sat here on
a podcast and said, Hey, I'm notworried about Oracle or Amazon
at that time? Like, just like,like do a balance. Okay. Was
there any company out there likethat?
Rob (43:06):
Microsoft maybe.
Matt Allen (43:09):
Yeah. They they were around. Yeah. Was they were
hardware, smooth software. Butdo see what
Rob (43:12):
I'm I mean, back yeah. Back then, every computer had
Microsoft operating system.
Matt Allen (43:17):
But do you see the analogy I'm kind of running is
that I think that there's gonnabe companies that survive no
matter what happens on a stockprice that are doing just fine.
Whereas the .com era, I don'tknow if there was anyone you
could just say, wow. Like ifTalendor were to $4 a share,
we'd go bankrupt buying it. ButI don't think people were doing
that with Amazon back when itcrashed.
Rob (43:37):
Yeah. Look, I just think it was people were putting record
money into the stock market, youknow? To me, the nineties was
the golden era of everybody. Itwas the first time people were
actively thinking aboutretirement accounts, you know,
taking ownership of all thatkind of stuff, investing in new
(43:57):
technology, the internet wasnew. And so it was like, Hey,
I'm operating a e commercewebsite.
Let's go public and watch peoplego crazy with it.
Matt Allen (44:09):
For sure. Yeah. And so that's what I think is gonna
come out of the AI era is that,you're have winners. You're have
ones we don't know about,obviously. But as of right now,
I don't see anyone that that Idon't think is not gonna be
around or a competitor at thistime.
Rob (44:26):
I mean, look, during the height of the .com era, one
could argue they wouldn't see aworld where AOL didn't exist.
Matt Allen (44:33):
For sure. Yeah. But I I that's what I was asking is
that though, is, was it, was itsuch a sure bet when he really
looked into their financials,when he looked into what they
were doing?
Rob (44:43):
Yeah. I mean, I I think I think AOL is probably the best
example of that. I mean, theythey were able to acquire Time
Warner, which was acquired byTurner and, you know, a a true
blue old American company. Andso maybe, I mean, even before
that to go go older, you know, Ican remember a time when you
(45:05):
went to RadioShack to getcomputers and they were Tandy
models that RadioShack built.And if you wanted a personal
computer that I guess thesethings evolve, Matt.
So yes. Can we see in today'sworld, a world that chat GPT or
Google doesn't exist? Yes. But Ithink history also tells us that
a lot of these companies sunsetand we don't even, no one
(45:29):
realizes it until it's over. SoI don't know.
I don't know. It's interestingto think about.
Matt Allen (45:35):
Yeah. It's exciting. We're all going to experience
these types of revolutions orbooms that you guys would call
it a few times in our life.
Rob (45:43):
Correct. And with all that being said, I would not put my
whole retirement egg inPalantir. Oh, I would. Right
now?
Matt Allen (45:51):
Right now I'm saying it went down to $4 a
Rob (45:53):
share. Yeah, of course. What I'm saying that that's the
point. The point of looking atthe last.com boom is I wouldn't
put all my retirement egg andpatent here right now.
Matt Allen (46:04):
Oh yeah, for sure.
Rob (46:05):
Or companies like it.
Matt Allen (46:06):
Yeah, said, yeah, I said it. I would do that at $4 a
share, but it's right now, it'sjust crazy. I do have one more
thing before the end of thepodcast. Actually, Ty, do you
know who Ty Lopez is? Nope.
You Internet personality YouTubeguy. Really, really famous.
Actually, I took I took hiscourse and learned about Bitcoin
in 2015. He taught me a lot.Millions of hours worth.
(46:29):
Just got him and a few othersjust got charged by the SEC
because they because they, youknow, they in 2021, they raised
capital and bought RadioShack,Pier one, and a few other known
retail brands. It's got accusedof running a Ponzi scheme.
Rob (46:44):
That's interesting. They bought Ray I thought RadioShack
was long gone by 2021.
Matt Allen (46:48):
No. That's RadioShack is still in existence
today. They own all the IP forit.
Rob (46:53):
Really? Well, then I'm glad they got charged because then
I'll I'll blame him for ruiningRadioShack. I have very fond
memories of going to RadioShackwhen I was a kid.
Matt Allen (47:05):
You don't wanna go down this rabbit hole, but I
will say this is that I don'tbelieve if the SEC can charge
you Ponzi scheme when it is acrime. So either arrest them or
the SEC is not should is isdoing stuff they shouldn't be.
Rob (47:22):
Yeah. I don't know enough to comment. Here's what I know.
In 1987, if you went into RadioShack, that store was awesome.
I'll leave, Hey, I'll leave ourlisteners with that thought.
Matt Allen (47:36):
It's radioshack.com is still, you can go go to it
right now.
Rob (47:40):
And what do they sell on there?
Matt Allen (47:42):
The same thing. Out
Rob (47:43):
of curiosity.
Matt Allen (47:44):
Sold in stores.
Rob (47:46):
So you can get electrical component. I could, I remember
going there and lovingelectricity, buying books on
electricity. You could buy allkinds of components. You could
buy radio components. You couldbuy anything to work on anything
electrical there And then buypersonal computers, software.
Matt Allen (48:00):
AMFM radio.
Rob (48:03):
Okay. I like that.
Matt Allen (48:06):
But, yeah, they just got charged with pony scheme.
Guess what they like I said, isthey took up the IP of it and
tried to move it online. Sowe'll see what comes from that.
Lot, lot of people were talking,because he's such a known
person, a lot of, influencersand people like that were
commenting on it and talkingabout it. So that's on the
monitor.
But like I said, I don't believethe SEC should be charged with
(48:28):
people upon this scheme. Ibelieve the FBI should be.
Rob (48:31):
Okay. Well, I could be convinced of that. I would say
to you, every town was at least10,000 in population before 1992
had a Radio Shack in it.
Matt Allen (48:46):
The fall Radio Shack. What do you think was
bigger? The fall Radio Shack orthe fall Blockbuster?
Rob (48:53):
Well, probably the fall blockbuster at
Matt Allen (48:57):
Me and my mom used to go every Friday to a
blockbuster, get a movie and avideo game and get some
Rob (49:01):
It was awesome. Look, I can remember before blockbuster
drove out all the littleindependents. I remember when
cause I'm much older than you,video stores popped up and you
just had a guy, you know, guyslike you and I would invest and
run out videos. And Blockbusterdrove out most of them, but
still Blockbuster was fun to goto. You could rent video games
(49:22):
or movies.
And so it was bigger for sure,but to me, Radio Shack sort of
embodied the technological boomof the 1980s.
Matt Allen (49:39):
We'll leave it there. Yep. Alright. We'll talk
to you next week.
Rob (49:44):
Alright. Take care.
Welcome back to the Matt Allen Show. I'm your host,
Matt Allen, here with, mentor,philosopher wife, Rob. We have a
lot to talk about today. We haveBowen and Palantir. EA Sports
was acquired by the Saudis.
Shout out to our friends out inSaudi Arabia. And Alibaba. So a
few geopolitical and financestories. Let's let's get into
(00:21):
it. Ra, what's going on?
Rob (00:24):
No. What isn't going on is a better question, but some
interesting topics todayentering the busy time of year
and in six weeks we'll haveChristmas decorations up. So
it's pretty crazy how fast timeis going.
Matt Allen (00:39):
Yep. It was my, it was my birthday yesterday.
Rob (00:41):
So. Oh yeah. That's right. I saw you on your birthday.
Matt Allen (00:44):
You did. You did. So,
Rob (00:47):
I hope nobody takes that information. Seals your identity
now.
Matt Allen (00:51):
So was mine or yours?
Rob (00:53):
Yours, you're the one giving out your birthday.
Matt Allen (00:56):
Well, I know. I'm not, that's the least of my
concerns. You know, it was good.We, went to, my parents came
down and to Florida and we hadlunch and then did work and then
met up with some buddies forhappy hour. So it was a good
day.
Rob (01:15):
I agree. I agree. Every birthday should be like that.
Matt Allen (01:19):
Sure. And I had a we had a wedding in, Saint Simons
this weekend. So that was fun. Igot to see some buddies there as
well. A weird town.
That's all I got to say. Maybeit was just maybe just the
places we were we were going.That that that could be part of
it as well.
Rob (01:35):
I've never been there. Oh, I guess the other thing on my
mind is Penn State's gonnaabsolutely fire James Franklin.
This guy cannot win against anysort of ranked opponent. It's
pathetic.
Matt Allen (01:45):
Yeah. Well, I felt I felt bad for you when, when
y'all, when they, when y'alllost. So
Rob (01:50):
that's how look, I didn't go there, but been a fan since a
little kid, but yes, she shoulddefinitely be fired.
Matt Allen (01:57):
It was not a very me and our friend Halsey was
talking about yesterday. Youknow, he's a FSU fan. Like FSU
lost, Georgia lost, and then hisdaughter went to LSU. They lost.
Pitt State lost.
It a bad it was a bad sportsweekend.
Rob (02:13):
Yeah. As far as circle of friends, it was not great.
Matt Allen (02:15):
It was not it was not good at all. So Yeah.
Rob (02:19):
Is there anything else? No. I think that's it. Excited to
get into these three threetopics.
Matt Allen (02:25):
So we'll open up with the with the news out of
last week, which is Boeing andPalantir. Boeing just announced
a partnership with Palantir tobring artificial intelligence to
defense programs and even itsfactories. This means Palantir's
foundry program, which will bedeployed across production lines
for fighter jets, helicopters,missiles, and satellites.
They'll also be working togetheron classified projects for
military customers. Now, isn'tjust a small software upgrade,
(02:49):
Rob.
This is Boeing essentiallyadmitting that future defense
advantage is gonna be built onAI. Palantir, co founded by,
which is obviously co founded byPeter Thiel, already has deep
roots in the national security.They just landed an
administrative defense deal inThe United Kingdom. So what
we're seeing here is really justanother case of Palantir truly
emerging. Interesting fact isthat Boeing, you know, Boeing
(03:10):
was a total disaster in 2024.
Their stock was a disaster.Their PR was a disaster. The new
CEO has made a lot of changes.They're really kicking things
high up high in gear. I've beenimpressed with her with the
turnaround so far.
So my first question to you,Rob, is this bigger for Boeing,
or is it bigger for Palantir?Oh. And and I wanna make one
(03:33):
note one more note for, beforethat is that Palantir is a one
of the first ever stocks that Isent out to our premium
newsletter subscribers a longtime ago. I've been in Palantir
for a long time is but now it isit's really big into conspiracy
theories. A lot of things goahead.
We'll get into that. So sorry tointerrupt, but go on.
Rob (03:54):
No, that's okay. And then, I want to also talk about, do
you think it's too late to getinto Palantir at this point? But
let's, let's table that for asecond. The big winner here is
obviously Boeing because as wetalked about a couple of weeks
ago, they are an absolute trashdumpster fire of a company,
completely ruining everythingthey touch. And so they have
(04:16):
nowhere to go with up andhopefully Palantir with through
this AI software can maybe helpwith the logistics and their
efficiencies and maybe they canactually build something.
As you can tell, I'm not big onBoeing. I just, they're an awful
company. They're an absolutedisgrace embarrassment of a
company. Well, I would, but Iwanna keep this kid friendly.
Matt Allen (04:44):
I think it's interesting because one of the
biggest tailwinds for Palantirhas always been is that they've
only had, you know, majority ofthe revenue came from government
contracts. That's for thecompany. Palantir helped us kill
Osama Bin Laden. That's theoriginal thing they would do.
They were a military contractcompany.
They would find land mines outin The Middle East and that's
(05:06):
what they were there for. In thelast couple of years, really led
actually by a hospital you'revery familiar with, Tampa
General. That was one of theirbig, big first commercial
clients. And they, you know, andthey completely changed how
Tampa General operates on a dayto day basis. And, you know,
their operational efficienciesis way better.
At least that's what the casestudies say, obviously. And wait
(05:29):
times, things like that, allbecause of Palantir systems. And
so when Palantir's stocks reallyexploded is because they've
added commercial clients, andnow they keep on stacking, keep
on stacking. So I don'tpersonally think that Boeing is
a is a big enough name brandbecause it's still in that
defense space. So I'm with youthat I I think it's massive for
(05:49):
Boeing, but it doesn't you know,if you had Palantir and Disney
partner with, you know, thatthat that adds even more
credibility to what Palantir cando on the commercial side.
I don't think Boeing has thatpop for it of, hey. How can it
get even more commercialclients? Because Boeing's Boeing
is what Palantir does. And thered flag about Palantir is, hey,
(06:10):
they're good at they're good atthe Fitz contracts. Can they do
other stuff?
And we know they can Let
Rob (06:17):
me interrupt you to counterpoint you. Don't you
think if Palantir can somehowchange Boeing around and
actually make them what theyused to be, doesn't other
companies then look at it andsay, well, there's something to
this Palantir software, we needto start looking at it.
Matt Allen (06:33):
Well, I agree, but I think it's, I think though,
because they're going do so muchdefense stuff that people will
still have that associationwith, oh, it's, it's a defense
company first.
Rob (06:45):
But do you think, okay, but also their commercial side of
Boeing is a complete dumpsterfire as well. Don't you think
this bleeds over into thecommercial aspect as well? And
maybe Boeing starts producingplanes again and maybe the
domestic airline industrybenefits from that. Do you see a
world where maybe Palantir getsBoeing doing what they're
(07:09):
supposed to do throughlogistics? And then all of a
sudden, it's been in the newsfor the last year.
Southwest logistics is awful.United's had trouble. Like, you
think, is there a world wherePalantir uses this and in three
years from now they are into thelogistics of commercial airfare
and trying to clean up what is ahuge mess right now.
Matt Allen (07:32):
I could see that, but I can see that coming
through, a contract with the,with the FFA, the federal
regulators. I could see that. Ithink they're gonna have a hand
on everything, but I don't thinkthis moves the needle
immediately where a CEO is gonnapick up the phone and say, you
know what? That's my whole pointis that because Yeah,
Rob (07:54):
I agree. Not immediately, but if they have success here,
don't you think then it opens aton more doors?
Matt Allen (08:00):
Yeah. For sure. But it's still hard to like because
a lot of people don't evenunderstand what Palantir does.
And so it's gonna be hard forthat CEO is not thinking, hey,
why would I invest tons of thismoney? But I do think if they
had a name, I mean, like a Teslaor just a name brand that makes
people go wide eyed and figureout, Hey, this is why their
commercial business is doingthis.
(08:21):
This is what I could help with.Think the floodgates would open
for balance here. I just don'tthink Boeing does that because
people associate Boeing withmilitary stuff still. Does that
make It
Rob (08:31):
does. I guess I'm looking at it from the aspect of
everybody, people are flyingmore now than ever as their main
mode of transportation. Flyingis a mess domestically. Boeing
is a huge cause of that becausethey cannot produce planes fast
enough. So if Palantir goes in,cleans up the defense side, it
bleeds over to the commercialside.
(08:53):
Does Delta, does AmericanAirlines, does United, the
Southwest, do other companiesthen look at Palantir and say,
look, we're having logisticalissues. Does it bleed into
there? And then all of a suddenit's like the flood gates are
open. That's the only thing I'malluding to. I agree with you,
probably doesn't do anythingnow, but I think it gives the
chance for Palantir really tobleed over into the mainstream
(09:14):
because they have straightenedout a company that is so trash
right now.
Matt Allen (09:18):
Yeah. And and that's what it's really gonna because
one only a few people will beable to to use Palantir, but I I
I do think I do completelyunderstand what you're saying.
And I I think it's gonna if thatchanges, it would if if that if
if they do that, it would behuge for Palantir's business
outside of commercial. I justdon't know if it's gonna do that
(09:40):
immediately just for the deal. Ido have a follow-up question to
that, though.
With all these conspiracytheories about Palantir, do you
think that it could be anegative headline and people
would not use your business?
Rob (09:53):
No, because I think the people who are gonna use
Palantir don't worry aboutconspiracy theories.
Matt Allen (09:59):
But they worry about customers. Let's take let's take
let's take let's take the Disneyexample. A lot of people would
be outraged at Disney's partnerwith them.
Rob (10:08):
And a of people are outraged at Disney already
because of their philosophicalneeds.
Matt Allen (10:11):
But okay. I'm just I'm just using Disney's example.
Rob (10:14):
Yeah. I don't think so. I don't think so. I guess And so
now I have a question for you.What does this do to their two
stocks?
Boeing down, way down overhistorical highs. Do they even
still have a dividend? I knowthey paused it at one point. I
don't follow it anymore becauseit's so bad. Do you think this,
(10:34):
do you think this starts anupward trend for Boeing and
what's it do for Palantir stock?
Matt Allen (10:41):
So it will not do anything for Palantir stock.
Boeing's up 41% on the year.They moved on the news, but I
don't think there's anything forPalantir stock because Palantir
stock, in my opinion, isincredibly overvalued. It has a
PE ratio of 600. I think it's adefinition of the AI bubble.
(11:02):
Doesn't mean I I I think one dayit would be truly valued as a
company. So that is get I Ithink in the valuation, you look
at what it is. The valuation'scrazy.
Rob (11:11):
Buying it now though, what you're saying is buying it now,
you're paying an ultra premium.So probably not the best
investment.
Matt Allen (11:17):
Not right now. No. I I think I think it is a long
term for sure if you can get itat a reasonable price. And I
think as long as AI bubble isstill going on, it will keep on
going up. But I think it'll beone of the first to falter.
It is currently worth$428,000,000,000 on parallels.
How much revenue do they do? In2024 in 2024, they did they did
(11:46):
$3,000,000,000 worth of revenueand valued at a $400,000,000,000
company. And that's crazy.
Rob (11:51):
That is crazy. I wish I could get that valuation on any
sort of business I have.
Matt Allen (11:56):
And there's nothing against talent towards business
at all. They're just they'rejust the definition. Like, it's
gonna be worth that one day. Itruly believe that, but I just
it's just part the AI bubble.And then also, when you have all
these commercial stuffs comingin, as you just said, the
floodgates, know, we talk aboutgoing mainstream.
I mean, the technology'sunbelievable. I actually
listened to Alex Karp, the CEO,who is obviously very
controversial. One of thefounders, Peter Till. It's a
(12:19):
very plural company because JDVance, vice president, they
invested in JD Vance's venturefund. They're the ones that
kinda brought JD Vance up along.
So there's a lot of experiencesgoing along along. Yada yada.
One interesting thing aboutPalantir is sort the Ukraine
Ukraine war, our our department,wanted them to go and work in
(12:40):
Ukraine, and they're doing thatagainst the Russian military and
basically for free as a way forus to test our own software if
we ever need to use it. So it'skind of interesting. Alex Carr
was talking about a lot ofthings that are helping Ukraine
and the United States military,has gone to test some of the
things that we were using thewar one day.
So that was an interesting angleto look at.
Rob (13:01):
Yeah. So I think to sum things up, what we would say is
Palantir wildly overvalued now,but has a ton of potential to be
valued properly in the future.
Matt Allen (13:12):
For sure. Oh, yeah. For sure. Yeah. When the when
the AI bubble crashes, which itis in a bubble, it'll be one of
first to fall out, I would Iwould think.
But it's it's but it's I said,that doesn't take anything away
from the from the actualcompany.
Rob (13:26):
Well, we agree on that. So I won't be winning any more
lunches from you on that deal.Maybe on the next topic.
Matt Allen (13:33):
Well, speaking of the the same kind of
geopolitical stuff is next up.We have a massive geopolitical
twist. EA's or EA, the videogames, is being taken private in
a $55,000,000,000 all cash dealled by Saudi Arabia's public
investment funds. Rob, they own10% of the company while it was
(13:56):
public, along with Silver Lake,who's just got part of TikTok,
and then Jared Kushner, thepresident Trump's son in law's
Affinity Partners. After thisdeal, they'll control a massive
stake in the company.
This this the Saudis will. Whatmakes this even more interesting
to me is that Kushner's privateequity fund is heavily backed by
Saudi Arabian money. So you gotSaudi Arabia, Silver Lake, and
(14:18):
Jared Kushner shaping the futureof one of America's biggest
gaming companies that has apretty big influence on kids.
Interesting fact, Rob, is theyhad a complete business model
shift where whenever I wasgrowing up, you know, they made
a lot of money off just thegames. In 2024, 75% of their
(14:38):
revenue came from live in gameexperiences where where kids are
buying tokens or where, youknow, whatever you buy.
So so, Rob, I think the thinggood place to start here is two
places. One, what do you thinkabout the Saudis doing this? And
then two, do you think morecompanies will follow suit and
(14:59):
go private?
Rob (15:02):
Okay. So, first of all, what do I think about the Saudis
doing this? I think it's a greatmove for them, right? As they
try to expand their reach in thepublic affairs region and what
they have going on. I think theyhave very smartly and
strategically looked at theyounger generations, right?
And what are the youngergenerations doing? They're in
(15:23):
the technology, they're playingvideo games. E sports is still
in its infancy. And so I thinkthis is a great move by the
Saudis, the investment fund andtheir partners. It is
interesting to me, not to nerdout on the deal too much, but
(15:44):
it's interesting that I think itwas JP Morgan that underwrote,
what was it?
20,000,000,000 of debt in this?
Matt Allen (15:50):
It's all that.
Rob (15:52):
So what I think is fascinating about that is, they
must think that either currentrevenue, so that their current
revenue can either pay off thatdebt either by streamlining what
they have going on there, orsomebody somewhere has
identified an untapped,unbelievable revenue source,
(16:15):
which I'm guessing is onlinegaming. What's also interesting
to me is, I think this is thedeal that is going to bring e
sports to the mainstream. Andwhat I mean by that is, look at
how much money Saudi Arabia haspoured into lip golf and how
(16:37):
competitive it came right awaywith the PGA Tour. I think
they're gonna do the same thingfor eSports. Now that they
control the That's company agood That makes all the games, I
think you're they're gonna put aton of resources in the
marketing, a ton of resourcesinto development of teams, a ton
of resources into prizes.
(16:57):
I wouldn't be a bit surprised iftwo years from now you can go on
Netflix or HBO or a broadcastchannel or a cable channel and
watch e gaming.
Matt Allen (17:11):
That's huge. So do you think they're gonna pour
just tons of money into it whenthey did live to make it
competitive or they're gonna use
Rob (17:16):
their own? No, think they have to do that to increase the
pool of So I think by doingthat, they get more online
gamers, more people buying forthe online gaming experience,
increases revenue, pays off thedebt, and makes EA more
valuable. I don't thinkincreasing EA's value is in new
game development. Right? I don'tthink they're saying, Hey, we
(17:40):
can make, we can go from, Ithink their annual revenue over
the last three years kind offlat around 8 and a half
billion.
I think that's what it was. Idon't think they can say, Hey,
we can get to 12,000,000,000 bycoming up with new games. I
think they're thinking we canget to 12,000,000,000 by making
online gaming more popular andmore exciting and more awesome.
(18:02):
Yeah, that's
Matt Allen (18:05):
very true. It's interesting that they've done
such a good job, the Saudishave, like you said, of really
going to the youth generation. Ihave a few friends in Saudi
Arabia. I talk to them a lot.Yasir was telling me that, you
know, the crown prince has tonsof support among the younger
people, which is around 70%.
I think he has the vision, youknow, that they're not going to
(18:26):
rely on oil, even, even if it'snot him. You know, the crown
prince is in his thirties.There's gonna be one day, we
don't know when, that they'renot going to be relying on oil
as their mainstream of revenuelike they do now. And they're
doing such a good job of almost,like you said, investing in the
youths, investing in youngpeople, making their investments
where they're kind of thinkingforty, fifty years out.
Rob (18:46):
Yes. I think that's what this move is about for sure.
Matt Allen (18:49):
Yeah. I mean, and if they can do what you're saying
and kind of create a whole esports league that's super
popular and they own it, that'sgonna be massive.
Rob (18:57):
And they have the resources to do that.
Matt Allen (19:00):
For sure. Have
Rob (19:01):
some EA did not. And so, I think this allows by going
private. I think the Saudisowning a 10% stake already
realized this, realized theycould not do this as a publicly
traded company. And so they tookit private in order to expand
online stuff. And that's howthey see EA growing.
(19:24):
And they paid a huge premium,
Matt Allen (19:27):
you know, for the company. But like, I mean, when
they had the cash, they did. Itwas interesting to me that they
brought in Jared Kushner. Idon't know. And Silver Lake, I I
don't get that because they canthey can easily do this deal by
themselves.
I'm not sure if it's because ofpolitics that they wanted to
(19:47):
have insurance there because nowthe government will not do that
there's no, we literally don't.
Rob (19:52):
I don't think the government would have done
anything. I think it might be asimple case of, Hey, yes, we
could do it ourselves, but whynot bring in partners and
diversify our risk a little bit?And by the way, with Jared
Kushner, you get someone of thegeneration that probably grew up
playing the games, probably hasa little bit of a pulse on the
(20:13):
market, has a name in America,which means if they are going to
go, like at some point, whywouldn't you just make him
commissioner of E League if it'sbig enough, the first one? Then
you have a name, then you have afollowing, you have a brand. I
think there were a number ofreasons outside of the political
realm for including them.
Matt Allen (20:32):
Yeah, for sure. I mean, that makes sense. Silver
Lake, you know, is in thatTikTok deal as well. So I mean,
they're making some pretty bigmoves.
Rob (20:40):
Definitely.
Matt Allen (20:42):
Do you think more companies will follow suit and
go private? Because, you know,there's, we have trends, if you
look at the history of the stockmarket, we have trends, as you
know, where people, companies goprivate or they, everyone goes
public, where, you know, or it.
Rob (20:56):
So, the only other one I can think of, if any of our
listeners are heavy into thecollectible space, I. E. Comic
books, trading cards, TCG, whichis trading card gaming, I. E.
Pokemon and some other things,They will be familiar with a
company called CollectorsUniverse, which owns
(21:17):
professional sportsauthenticators.
Nat Turner took them private, Iwant to say maybe 2021 or 2020
for 3 quarters of a billiondollars or right around there.
And ever since then has expandedthe company tremendously.
They've got into doing somevertical integration, put
(21:38):
fingers into a whole bunch ofdifferent areas now. And I bet
you their revenue has exploded.I think what you're seeing is
when you're a publicly tradedcompany, it's hard to be
innovative because you to benimble, but then you also have
to deliver a premium to yourstockholders.
And so if you wanna take yourcompany in an innovation level
(21:59):
and try to go to the next levelup, make it worth more, you're
gonna go private. I think that'swhat this was about.
Matt Allen (22:06):
Yeah, we saw that at Twitter big time. Twitter had a
lot of things that were going onthat were, the stock was
horrible. And there was, as wefound out, there was a lot of
other things going on there, butthey really couldn't mean the
stock was already so bad thatthey couldn't spend tons of
money to do exactly what yousaid, to innovate. Because, you
(22:27):
know, when you do R and D likeZuckerberg does at Facebook and
Meta, he does have failures.Right.
But he's allowed to get awaywith that. He's in all the
success he had. If you wereTwitter's that Twitter CEO, the
new one, if he started putting abillion dollars into R and D for
to innovate, which he probablyshould have done, he would get
fired. And so, when Elon tookhim private, he was able to do
(22:48):
that quickly.
Rob (22:51):
Yeah. I think, and this goes back to what's happening in
the world. You're seeing such aconcentration of wealth in
certain areas that for the firsttime in a long time, you're
gonna start seeing the abilityto take companies private. And
so I think you are gonna see ifpeople with the resources can
(23:12):
identify other companies thatyou can do this, take it private
and then innovate and explodeyour revenue without answering
the stockholders, you know, takerisks, then I think you're gonna
see more of this.
Matt Allen (23:25):
Yeah. I mean, because it all comes down to
like, for example, have coming,Bean Media, Bean like, if we
would never want to take itpublic unless we needed money.
But then also I think there's aworld to say, well, if we
weren't running Bean anymore,there's a good thing of it being
public because then you havemore say, there's a lot of pros
(23:47):
and cons to having a publiccompany and not. I think a lot
of it comes down to thefounders. And then once you have
the founders, I think it's liketwo conversations almost.
When you company have led by afounder, when you have a company
not led by a founder. I thinkit's like two conversations, and
they almost like two differentones because there's just so
many different rules andregulations in my, like, how
(24:08):
people operate when they're nota founder. And I'm a big
believer in investing in founderled companies. I think every,
every slog in my laundryportfolio is led by a founder.
Rob (24:19):
Yeah. Cause they still have the passion and they still have
the vision
Matt Allen (24:22):
for sure. I mean, we sleep, we're seeing that in the
video right now. If you've, if,if, if we talked about this last
week, if Jensen was not part ofNvidia for all this time and
someone was selling a messageof, oh, we're gonna have, we're
gonna have this AI thing. It'sgonna blow up, blow up like
this. He would've got fired.
He or she would've got fired.Cause they weren't producing the
(24:42):
results they should have. But hewas there. They believed in him.
But that's the big difference ifyou're listening when you're at
home.
I do have some good news foryou. I have some exciting news
for you.
Rob (24:51):
Oh, I could use some good and exciting news.
Matt Allen (24:53):
Because you probably haven't seen it as you because
you're pretty busy withsomething you got going on this
week, but you're a big boxingfan.
Rob (25:01):
I am.
Matt Allen (25:02):
You know, Saudi Arabia and Dana White have a
league, Zufa Boxing. They justannounced a deal deal with
Paramount Plus and the Ellisonfamily, and they're gonna host
12 main events coming up andthey're gonna have their own
title belt. And Dana Whiteprobably just said again that
they're gonna, that he's gonnabring him back bigger than it
(25:23):
was, which is gonna be hard tobe bigger than it was, but if
anyone can do it, it's down.
Rob (25:27):
I agree. That's that's that's great news for sports
fans. Sports fans, entertainmentfans, there is nothing like a
main event heavyweight fight.
Matt Allen (25:36):
It's the the WWE I think the WWE is involved as
well. Don't they own
Rob (25:40):
Well, yeah. You know? So, no, TKO TKO. Acquired WWE last
year. So TKO TKO owns WWE andUFC.
Matt Allen (25:51):
Do you know anything about that stock?
Rob (25:54):
I know. I think WWE, when they acquire when TKO acquired,
WWE was trading at around 90 or$95 a share. And I think after
the merger, it hit $1.20. TKOstocked it. I I don't know where
it's at now, but I know theirtheir revenue is at an all time
high.
Matt Allen (26:12):
I just pulled up. It at $2.00 4 now. Yeah. It's as
you know, I have this we have amutual friend, so I won't say
his name, but who loves owningstock of a publicly traded
company. And I'm sorry, owningstock of a publicly traded
sports team.
Rob (26:31):
Yeah. Mutual friend's a strong, strong term there, but
Matt Allen (26:35):
but it, you know
Rob (26:36):
Anyways, this was was thinking so, though, is a
Matt Allen (26:38):
TKO is a good deal, it sounds like.
Rob (26:40):
Yeah. Right. Because they're a legitimate company.
Matt Allen (26:43):
Yeah. For sure. So but, yeah, I thought you'd be
excited about that since we'reon top of the Saudis. I wanted
to tell you that right here.
Rob (26:48):
I think it's gonna be great.
Matt Allen (26:49):
Yep. They I mean, this there it goes again to
bring a conversation we had lastweek. Parabat making making
moves. Right. So it's pretty inpretty interesting.
For our third story, still stillin geopolitical world and the
tech world, let's head over toChina. Alibaba's stock is
absolutely ripping. Shares arealmost 50% this month, making it
(27:13):
one of the best performers inHong Kong and one the best
performers in United States. Ifyou didn't if you didn't know,
when you own a Chinese stock,you you aren't actually a
shareholder. It's if you own itin Hong Kong, you'd be a
shareholder in China.
If, like, they're calleddepositories. And so basically,
you're you're just owning a deedalmost. You can't vote. You
(27:36):
can't vote as a shareholder.It's a lot different.
So when I when you wheneverwhenever you refer to a stock
like Alibaba, a lot of times onWall Street, they'll refer to
what it's doing in Hong Kong. SoI thought you might find it a
little interesting. Mhmm. Butwhat's driving it is Alibaba has
been obviously pouring moneyinto data centers. They're
expanding internationally, andthen they just released one of
their new AIs, and it's rightnow the best performance
(27:59):
performing AI is outperformingthings like ChatGPT, Grok,
Perplexity for now that thosechange literally every week.
But Rob, do think this is, whatdo you think this means for the
race AI gets shine up?
Rob (28:16):
Well, I think it takes it up a whole level because now we
know the way China operates as atotalitarian type government. So
if you're going to putgovernment resources behind the
AI race and Alibaba in China,which I believe they would, why
wouldn't they? Because of thegeopolitical aspects of it. I
think this gives Alibaba a legup on all the American and
(28:38):
international companies.
Matt Allen (28:40):
Yeah. They had that competitor, DeepSeek, which is a
popular model. You can downloadit here in America. Play around
with occasionally. Do you thinkthat America should ban DeepSeek
and Alibaba's AI?
Yes. From the out store? Yep.Completely agree with you. And
(29:00):
the reason is before peoplemight get up in arms that
there's, I have, I can give youa bunch of reasons, Rob.
One I'll give you that's justpetty is that Zuckerberg goes in
2010 to China. They say, Hey, wewanna create our own version of
Facebook. We want you to do it.Okay? He does it.
(29:21):
American government, thepresident Obama administration
was like, Hey, this is awesome.This is a good way for
businesses to get in America, toget in China. He deploys it all.
They kick them out the next dayand steal the IP. Google goes
back again, does the same thing.
They steal the IP, steal thealgorithms, kick them out. I
cannot stand that. They stealall intellectual property. It's
(29:43):
one of the biggest things thatno one talks about and they
should absolutely be banned justsimply because of that. Even
TikToks and NareRidlet here.
I don't even talk about what isthe national security stuff.
Just need it I because of
Rob (29:59):
argued this last week. You took the opposite side.
Matt Allen (30:02):
No. I mean, from that angle of, Hey, why are we
letting all these, app storesfrom Shopify, all these Chinese
companies come in the app storewhen they don't let us like, I'm
very passionate about apps.
Rob (30:12):
I agree. I totally agree with you.
Matt Allen (30:16):
But I just I don't that that's not gonna happen,
obviously, especially when we'renegotiating.
Rob (30:22):
Well, but here's the thing. Alibaba is also now working on a
chip to compete with Nvidia. Soif they become vertically
integrated like that, where theycan do the GPU and they have the
AI, I mean, puts the rest of theworld at a real disadvantage to
China. And so we should bepaying attention to these
(30:43):
things.
Matt Allen (30:44):
But I will say this, I do believe So do you remember
when DeepSeek was released acouple of months ago and it was
a bombshell? Like, hey, weanticipate we we anticipate
Alibaba doing this. Right?They're a great company.
DeepSeek was released and it wasa bombshell.
People were wondering how'd theyget the GPUs? Sam Altman comes
(31:06):
out and says, this doesn't addup. And we found out, hey,
Nvidia was selling them toQatar. Qatar was taking them and
selling them illegally to China.And I think Alibaba's doing that
with their GPUs.
Hot take, but I I think I thinkthey're still an American GPUs,
and that's how they're doing it.And I I think we need to put a
(31:28):
ban on that quickly. And we we
Rob (31:31):
should be putting our heads in the sand.
Matt Allen (31:33):
We we we we addressed it just recently, but,
I mean, I I have to questionanytime they have they have AI
that comes out better than ours,where where are they getting the
GPUs? Where are they getting thethe semiconductors? I mean,
that's a that's a real question.
Rob (31:47):
Look, think we can both agree. This is a problem that
goes back to we could all blameRichard Nixon and Henry
Kissinger for opening up China.What do you have to say about
that?
Matt Allen (31:59):
America would not be where it was at today if we
didn't open up China. It was oneof the greatest things from a
president. What killed, whathelped China was NAFTA. What
made our economy great
Rob (32:15):
was nobody the economy. Yes. Our listeners ought to know
how much you love Richard Nixon.
Matt Allen (32:20):
He's one of the greatest presidents we ever had.
Rob (32:24):
Would say he's definitely one of the most underrated
presidents we ever had
Matt Allen (32:28):
for sure. Yes. He has the second largest win
besides he only lost two statesin 1972. And he thought he had
the cheat to win, which ispretty wild, but he just
Rob (32:40):
Well, there's a real debate on whether he thought that or
his people did. And then he justhad he got caught in the cover
up, but we we we can addressthat another time. But, yeah,
Matt is a fanboy for RichardNixon. And so I wanted to gig
him while I could. So, yeah,this is all your boy's fault.
Matt Allen (32:57):
No, it's absolutely not. American economy would not
be where it was at today. Itwasn't for opening up to the
East. And we have Richard Nixon.
Rob (33:04):
Hey, I'd also argue, get going back to your boy, Richard
Nixon, the American economy, wewould not have all of this debt
and inflation had he not takenus off the gold standard.
Matt Allen (33:13):
Not true. Germany in the thirties was on tons of was
backed by the gold standard.
Rob (33:20):
No, they were not. They that's what caused her
hyperinflation. They were notbacked by the gold standard.
Matt Allen (33:26):
I'm not, I don't
Rob (33:27):
know about that. Don't argue with a former history
teacher. The hyperinflation iswhat caused, because they went
away and they just startedprinting money.
Matt Allen (33:34):
If you're a history teacher, you would know how good
what Nixon did to this country.
Rob (33:40):
Just saying if we were still on the gold standard.
Matt Allen (33:43):
No. What? We would not have the economic growth
that we've had.
Rob (33:47):
Agreed. At the same time, a house would probably cost a
100,000 or 150,000 or-
Matt Allen (33:54):
Yeah. Then people would making $15,000 a year.
Correct.
Rob (33:58):
But hey, if you could live
Matt Allen (34:00):
on We would have no growth.
Rob (34:01):
If you could live on 10,000 a year, making fifteen's not
bad. I'm just.
Matt Allen (34:06):
You wouldn't have your the new car you got. You
wouldn't even have a touchscreenradio if we were still on the
gold standard.
Rob (34:13):
I'll take it. Please, please. I'd much rather the old
push button. You went to nineeighty am. I'll take that in
three seconds.
Well, anyway. Instead of mypushing all things, I have no
idea what to do.
Matt Allen (34:28):
Anyway, that was a pretty outrageous statement
about Nixon, I just wanna say.
Rob (34:33):
One But could argue either way.
Matt Allen (34:36):
If, I'm not if we did, if, if we, if we didn't
have NAFTA, we never we that'swe propped them up with NAFTA.
Rob (34:46):
You're not going to get a argue mad at me about that.
Matt Allen (34:49):
It wasn't for NAFTA. Were just trading with them,
making money. Then
Rob (34:54):
I was like, the way this podcast is going, we ought to
just scrap the whole thing andjust talk about foreign policy.
What we always end up with onevery on every single issue we
talk about.
Matt Allen (35:04):
Oh, yeah. There we go. Yeah. The well, back to
Alibaba. Do you think that therethat a ban's coming for them?
That's a serious question in theApp Store. And do you think that
it's a No.
Rob (35:19):
No. Because I don't think we have the backbone to do it.
Matt Allen (35:21):
Is that just because of trade? I mean, because
because here's your big thing.Listeners at home, it doesn't
sound weird, especially when mymom was talking about my mom was
asking me all this, and it wasit's hard to explain, but China
has the biggest thing over ourhead, which is massive, which is
minerals. Minerals are the mostimportant element in the world,
(35:44):
in the world of defense and AI.We have a list of, of critical
minerals that are, that areessential to national security.
And now essential to AI islisted. There's like 35 of them.
We only have five of themaccess. We get the rest from
China.
Rob (36:03):
Has the Trump administration really taking any
interest in Greenland?
Matt Allen (36:07):
There we go. So we don't have the backbone policy.
But we say we don't have thebackbone to ban them from from
AI or from from the ads becauseof those that kind of stuff.
Because we we need the mineralsfor chips and
Rob (36:19):
I don't know why we don't have the backbone, but we don't
have it. And so therefore itwon't be banned. That's the
answer to your question.
Matt Allen (36:27):
Yeah. Well, you got anything else?
Rob (36:32):
I don't think so. Not, not this week.
Matt Allen (36:35):
Oh, I have one for you. Huge, huge new deal out of,
of OpenAI. Two things, theyreleased their Sora two, which
is Sora is their video makingapp. It's unbelievable.
Actually, when we get off thepodcast, I'll send you the their
Instagram really just released.
(36:55):
The technology there is awesome.I mean, it's crazy. It looks
better than a movie, Rob. It'sunbelievable where you just type
in a prompt. The other thing isthey just made a deal with
Shopify.
And this deal with Shopify iswhen you start searching for
products, you can buy them inChatGPT or go immediately to a
Shopify website. So if you're ifyou wanna search if you wanna
Rob (37:15):
Why would somebody wanna do that? It make Yeah. It
Matt Allen (37:19):
And so like when they search on Google for, say,
shoes.
Rob (37:23):
Okay. So I think so what you're saying is if someone's
using ChatGPT as their searchengine
Matt Allen (37:28):
Yes.
Rob (37:28):
It will and I'm looking for a shirt with flowers embroidered
on it, it'll take me right tothe It'll take you
Matt Allen (37:35):
to a Shopify owned store. Got it. Which is, which
is huge. It's Sam Alban said hewon't do that because you know,
a lot of, entrepreneurs, smallbusinesses are all on Shopify.
So that would, so it was, it wassupporting the little man.
So I thought it was prettyinteresting news.
Rob (37:49):
Yeah. I agree with that. Had not heard that.
Matt Allen (37:51):
Yeah. It just came out. So
Rob (37:54):
Okay.
Matt Allen (37:55):
But I think that's huge. It's gonna make another
revenue. I'm I'm sure I could II assume OpenAI, since they're
not a public company, they don'ttalk much about their finances,
I assume they're gonna get sometype of kickback from Shopify.
Oh, of course. So, is, I mean,that's how it's
Rob (38:11):
Yeah. Much like, an affiliate network through
YouTube or something else likethat. Yeah.
Matt Allen (38:16):
I mean, it's, it's, it's huge. I mean, they're,
they're building a companythat's they're doing all the
right things in my opinion, whenit comes to how to monetize,
especially we, you don't, theydon't, there's no playbook on
how to monetize this type ofstuff besides the Google one,
but it's a lot different.
Rob (38:33):
Yeah. But do you think the other search engines like Yahoo
and Google, they'll follow suitwith all that?
Matt Allen (38:41):
Not Google. Because Google has what they have now. I
do think this probably scaresthem and ramps it up a lot more
into, they're already spendingbillions of dollars. I think
they're gonna probably have ameeting right now. So, we need
to spend more billions to notlet them take over.
So, owns 95% of search, like allthe traffic. And obviously
(39:04):
ChatGPT has came in been amassive hit on them because you
can just go to ChatGPT or yourlarge language model of choice
to answer some of the questionsthat you would just always use
for Google. But now I stillshop. You still do all kinds of
stuff on Google, but now thisis, they're getting into their
land again a little bit. So it'sinteresting.
(39:26):
And Wall Street's beenembarrassed on Google stock.
It's actually, if you wanna robone the best blue chip stocks to
own right now is probably Googlebecause it's so undervalued for
all this nonsense. Google'sturning into a lot bigger
company just in search. They'realmost taking a Saudi Arabian
method where they're not gonnayou know, we're just talking
about Saudi's not relying onoil. Google's positioned itself
(39:48):
so greatly to not have to worryabout search engine revenue ten,
fifteen.
Rob (39:52):
Well, they own YouTube as well. Right?
Matt Allen (39:55):
Yeah, for sure. They own Waymo, which is the, Thomas
driving, car company. They, youknow, they make so much money
just off their data. They own,because they changed from Google
to alphabet and they have likeevery letter on the actual
alphabet, they have a companythat they own underneath that,
or that's their vision. So it'sa, they do really well.
(40:16):
But in the short term, that'swhy the stock's not performed as
well as it should have,especially during the AI boom,
is the fear of search traffictaken. Then also you have a lot
of people using Gemini, forexample, who does, is, is the
state of Florida, partneredwith, like if, if you are a
state employee, like a stateemployee of Florida, are you
using Microsoft or Google? LikeMicrosoft, Microsoft office or
(40:39):
Google suite?
Rob (40:42):
I would guess it's Microsoft. I know if you have to
have a meeting with somebodyover the internet, you have to
use Microsoft teams.
Matt Allen (40:51):
Okay. Well, and that's how a lot of these
companies like Microsoft'sobviously part of ChatBet, but
that's Google's, model too, isthat a lot of people or
employers use Google. And so youhave access to Gemini, which is
their large language model. Sothey've wrangled that in there.
So they're, they're gettingreally creative about it.
I'm not worried about Google. Idon't own this stock, but I'm
not worried about it.
Rob (41:11):
I also do not own the stock.
Matt Allen (41:14):
But it's a, this AI race is, as I said over and over
again, it's a bubble. This is afun bubble to watch.
Rob (41:22):
Definitely. And I might argue that some of the winners
coming out of the AI race mightnot be in a bubble because once
there's some clear winners, Ithink those stocks will explode
again.
Matt Allen (41:33):
So you you you you live the, the .com bubble. We
have clear leaders in AI, right?With revenue and things like
that. Were there any clearwinners besides the name of like
Amazon stock obviously went,went so high, went crazy, but
they weren't doing this type ofrevenue that like a OpenAI is,
(41:55):
was doing. Is that like, doesthat make sense?
Rob (41:59):
Yes. I guess I don't understand the question though.
Matt Allen (42:04):
So for example, when Amazon stock went all the way up
to in the hundreds and it cameall the way back down to $4 or
$5 or whatever, Let's takePalantir, for example. Let's say
that happens at Palantir. You'renot worried about Palantir.
Right? It's gonna bounce back.
It's gonna be fine. They haveOpen ChatGPT seven fifty million
weekly users. They're gonna befine. Snapchat's the only
(42:25):
company in the world that has abillion active users that can't
figure out how to monetize.ChatGET will figure it out.
ChatGET will figure that out.But during the .com era, when
Amazon came back to $4 a shareor whatever it was, a crazy
fall, people were worried aboutAmazon. Like, were they? Or,
where is it, where is it?
Rob (42:44):
Yeah. Because, well, they had more diversified.
Matt Allen (42:47):
Oracle's another good one too.
Rob (42:49):
Yeah. Oracle was super expensive. Yeah.
Matt Allen (42:52):
Yeah. But like now
Rob (42:53):
it's back up.
Matt Allen (42:54):
But like at the time, could you have sat here on
a podcast and said, Hey, I'm notworried about Oracle or Amazon
at that time? Like, just like,like do a balance. Okay. Was
there any company out there likethat?
Rob (43:06):
Microsoft maybe.
Matt Allen (43:09):
Yeah. They they were around. Yeah. Was they were
hardware, smooth software. Butdo see what
Rob (43:12):
I'm I mean, back yeah. Back then, every computer had
Microsoft operating system.
Matt Allen (43:17):
But do you see the analogy I'm kind of running is
that I think that there's gonnabe companies that survive no
matter what happens on a stockprice that are doing just fine.
Whereas the .com era, I don'tknow if there was anyone you
could just say, wow. Like ifTalendor were to $4 a share,
we'd go bankrupt buying it. ButI don't think people were doing
that with Amazon back when itcrashed.
Rob (43:37):
Yeah. Look, I just think it was people were putting record
money into the stock market, youknow? To me, the nineties was
the golden era of everybody. Itwas the first time people were
actively thinking aboutretirement accounts, you know,
taking ownership of all thatkind of stuff, investing in new
(43:57):
technology, the internet wasnew. And so it was like, Hey,
I'm operating a e commercewebsite.
Let's go public and watch peoplego crazy with it.
Matt Allen (44:09):
For sure. Yeah. And so that's what I think is gonna
come out of the AI era is that,you're have winners. You're have
ones we don't know about,obviously. But as of right now,
I don't see anyone that that Idon't think is not gonna be
around or a competitor at thistime.
Rob (44:26):
I mean, look, during the height of the .com era, one
could argue they wouldn't see aworld where AOL didn't exist.
Matt Allen (44:33):
For sure. Yeah. But I I that's what I was asking is
that though, is, was it, was itsuch a sure bet when he really
looked into their financials,when he looked into what they
were doing?
Rob (44:43):
Yeah. I mean, I I think I think AOL is probably the best
example of that. I mean, theythey were able to acquire Time
Warner, which was acquired byTurner and, you know, a a true
blue old American company. Andso maybe, I mean, even before
that to go go older, you know, Ican remember a time when you
(45:05):
went to RadioShack to getcomputers and they were Tandy
models that RadioShack built.And if you wanted a personal
computer that I guess thesethings evolve, Matt.
So yes. Can we see in today'sworld, a world that chat GPT or
Google doesn't exist? Yes. But Ithink history also tells us that
a lot of these companies sunsetand we don't even, no one
(45:29):
realizes it until it's over. SoI don't know.
I don't know. It's interestingto think about.
Matt Allen (45:35):
Yeah. It's exciting. We're all going to experience
these types of revolutions orbooms that you guys would call
it a few times in our life.
Rob (45:43):
Correct. And with all that being said, I would not put my
whole retirement egg inPalantir. Oh, I would. Right
now?
Matt Allen (45:51):
Right now I'm saying it went down to $4 a
Rob (45:53):
share. Yeah, of course. What I'm saying that that's the
point. The point of looking atthe last.com boom is I wouldn't
put all my retirement egg andpatent here right now.
Matt Allen (46:04):
Oh yeah, for sure.
Rob (46:05):
Or companies like it.
Matt Allen (46:06):
Yeah, said, yeah, I said it. I would do that at $4 a
share, but it's right now, it'sjust crazy. I do have one more
thing before the end of thepodcast. Actually, Ty, do you
know who Ty Lopez is? Nope.
You Internet personality YouTubeguy. Really, really famous.
Actually, I took I took hiscourse and learned about Bitcoin
in 2015. He taught me a lot.Millions of hours worth.
(46:29):
Just got him and a few othersjust got charged by the SEC
because they because they, youknow, they in 2021, they raised
capital and bought RadioShack,Pier one, and a few other known
retail brands. It's got accusedof running a Ponzi scheme.
Rob (46:44):
That's interesting. They bought Ray I thought RadioShack
was long gone by 2021.
Matt Allen (46:48):
No. That's RadioShack is still in existence
today. They own all the IP forit.
Rob (46:53):
Really? Well, then I'm glad they got charged because then
I'll I'll blame him for ruiningRadioShack. I have very fond
memories of going to RadioShackwhen I was a kid.
Matt Allen (47:05):
You don't wanna go down this rabbit hole, but I
will say this is that I don'tbelieve if the SEC can charge
you Ponzi scheme when it is acrime. So either arrest them or
the SEC is not should is isdoing stuff they shouldn't be.
Rob (47:22):
Yeah. I don't know enough to comment. Here's what I know.
In 1987, if you went into RadioShack, that store was awesome.
I'll leave, Hey, I'll leave ourlisteners with that thought.
Matt Allen (47:36):
It's radioshack.com is still, you can go go to it
right now.
Rob (47:40):
And what do they sell on there?
Matt Allen (47:42):
The same thing. Out
Rob (47:43):
of curiosity.
Matt Allen (47:44):
Sold in stores.
Rob (47:46):
So you can get electrical component. I could, I remember
going there and lovingelectricity, buying books on
electricity. You could buy allkinds of components. You could
buy radio components. You couldbuy anything to work on anything
electrical there And then buypersonal computers, software.
Matt Allen (48:00):
AMFM radio.
Rob (48:03):
Okay. I like that.
Matt Allen (48:06):
But, yeah, they just got charged with pony scheme.
Guess what they like I said, isthey took up the IP of it and
tried to move it online. Sowe'll see what comes from that.
Lot, lot of people were talking,because he's such a known
person, a lot of, influencersand people like that were
commenting on it and talkingabout it. So that's on the
monitor.
But like I said, I don't believethe SEC should be charged with
(48:28):
people upon this scheme. Ibelieve the FBI should be.
Rob (48:31):
Okay. Well, I could be convinced of that. I would say
to you, every town was at least10,000 in population before 1992
had a Radio Shack in it.
Matt Allen (48:46):
The fall Radio Shack. What do you think was
bigger? The fall Radio Shack orthe fall Blockbuster?
Rob (48:53):
Well, probably the fall blockbuster at
Matt Allen (48:57):
Me and my mom used to go every Friday to a
blockbuster, get a movie and avideo game and get some
Rob (49:01):
It was awesome. Look, I can remember before blockbuster
drove out all the littleindependents. I remember when
cause I'm much older than you,video stores popped up and you
just had a guy, you know, guyslike you and I would invest and
run out videos. And Blockbusterdrove out most of them, but
still Blockbuster was fun to goto. You could rent video games
(49:22):
or movies.
And so it was bigger for sure,but to me, Radio Shack sort of
embodied the technological boomof the 1980s.
Matt Allen (49:39):
We'll leave it there. Yep. Alright. We'll talk
to you next week.
Rob (49:44):
Alright. Take care.
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