October 8, 2025 • 34 mins
Matt Allen breaks down three huge stories moving the markets this week.
First, AMD strikes a multiyear deal with OpenAI worth up to six gigawatts of GPU power, but the real question is why AMD had to give up equity to make it happen. Matt explains what makes this deal different from Nvidia’s and why it raises new questions about how the AI buildout will actually be funded.
Then, Tesla drops Full Self-Driving version 14 just hours before teasing a mysterious new product reveal. Matt explains what FSD 14 can actually do, why this could be Tesla’s biggest leap in autonomy yet, and what the rumored $30,000 Tesla means for EV adoption and investors.
Finally, with Washington facing another possible government shutdown, Matt breaks down how markets historically react, which sectors tend to get hit first, and what investors should really focus on.
If you follow the stock market, AI, or Tesla, this is one episode you don’t want to miss.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Matt Allen (00:01):
All right, welcome back to the Matt Allen Show. We
got three big stories that we'retalking about today. The first
one, AMD and OpenAI have made amassive deal that had sent
another shock through thefinancial world, especially in
the valley. Second one, TeslaTesla has a has just made one, a
(00:23):
a major release for full selfdriving. Two, they're in the
middle of an event right nowwhere they going to unveil a
surprise announcement.
We I am monitoring that liveright now. So as if you don't
know, we record this on Tuesday.We release it on Wednesday. So
we're we're gonna speculateslash possibly break the news
(00:43):
live, and we'll get a livereaction. And third, we're gonna
talk about a little bit aboutthe government shutdown, what it
means to the stock market, wherewe see it go from here, and
getting after it.
Rob, what's going on, man?
Rob (00:55):
A lot of different things. A lot of different things, but
excited to be talking aboutthese three topics and to hang
out with you for about fortyfive minutes.
Matt Allen (01:02):
Oh, there we go. Yes. Yes. You have a good
weekend.
Rob (01:06):
Had a good weekend, way busier than I wanted it to be,
but, was glad I was able tocelebrate your birthday with
you.
Matt Allen (01:11):
Well, thank you. I appreciate that. We had a good
time. We got some our buddiestogether. In Tallahassee.
We, we had a good time. Then wewent to Florida state Miami
game. That was not a, what was afun time until, until the actual
game.
Rob (01:27):
But yeah, I was very happy. I skipped all those.
Matt Allen (01:29):
Yeah. Yeah. Traffic was crazy. The town was rocking
and then it got disappointed
Rob (01:37):
very much so.
Matt Allen (01:38):
And just, just, and then your, your Penn state,
lions did not have a very goodshowing.
Rob (01:42):
Well, just to be clear, I didn't graduate from Penn state.
Just been a long time band. Butagain, it's like I said last
week, it's like I told you twoyears ago. Penn State will never
do anything until they fireJames Franklin.
Matt Allen (01:53):
Go. Well, let let's get right into it. Wow. Well,
yesterday, before the marketopen opened, AMD finally got
their big AI moment. OpenAI justannounced a massive multiyear
deal with AMD to power the nextgeneration of AI data centers,
(02:14):
six gigawatts worth of compute,the first gigawatt of AMD's new
m one forty chips that startrolling out in 2026.
This this is a lot differentkinda deal than the one with
NVIDIA, Rob. NVIDIA'spartnership, as we talked about
a couple weeks ago, is focusedon training, which is kind of
the heavy lifting behind the newAI models. While AMD's is all
(02:37):
about inference, which if youdon't know, Rob, know you do,
but if you're listening to this,don't know, Anytime you type a
question in to ChatGPT and itresponds, that's what inference
is. So that's what AMDsemiconductors focus on while
NVIDIA's focus on the backboneand kinda power behind it. But
(02:58):
here's the part that's raised alot of eyebrows, mine
specifically.
AMD gave OpenAI a warrant for upto 160,000,000 shares of its own
stock, which is roughly close to10% of the company. So as OpenAI
builds out more data centers,they actually earn pieces of AMD
in return. That's not somethingyou see every day in the
(03:19):
semiconductor world for sure.For OpenAI, this deal means
guaranteed access to GPUs in theworld are still short on them.
So I'll start off with my takereal quick.
In my opinion, the fact that AMDhad to give up equity to a buyer
is very disappointing becausewe're supposed to be in a GPU
constrained environment. Right?So demand should be so strong
that companies are lining up tobuy these chips without AMD
(03:43):
having to sweep the deal withthe stock, which they are, but
it's also kinda telling me thatAMD is still playing catch up
because they're trying to buyinto its way into revelance
against Nvidia, up equity, whichis wild, but the bigger question
here to me is, where's all thismoney coming from? OpenAI now
has partnerships with NVIDIA,Stargate, and AMD that total
(04:05):
around for 26 gigawatts ofplanned data center capacity at
roughly $60,000,000,000 pergigawatt, so that's about a
$1,560,000,000,000 build out,Rob. And Rob, let me just put
this in perspective, right?
In the last five years, Apple,Amazon, Meta, Microsoft, and
Google combined generated$1,400,000,000,000 in free cash
(04:28):
flow. So OpenAI just agreed todeals that are a total of
$1,560,000,000,000 of build out,which is more the last more than
the last five years what thiscompany has made. So, Rob, I'll
go to you. What what are yourthoughts here?
Rob (04:45):
I think my thought would be it's confusing. So if I if I
were the way I understood itwas, NVIDIA invested into
OpenAI, correct?
Matt Allen (04:55):
Yes.
Rob (04:55):
What was it? To the tune of was it 100,000,000,000 for five
years? Is that right?
Matt Allen (05:01):
Yes. And that that deal, when you did the deal out
on paper, it made it made sensebecause they're gonna get a heck
of a return from that.
Rob (05:07):
Correct. They are. And that's what we discussed. So
then, you know, what? A fewweeks later now, OpenAI has
turned around and and doing thisdeal with AMD, putting money
into AMD.
I just Honestly, Matt, I thinkit's probably a little bit scary
for those who are heavilyinvested in the AI world. I
(05:30):
don't see To me, the old termpaper tiger comes into play with
this deal, And I I don't know.This may be the jumping the
shark moment.
Matt Allen (05:43):
Well, I haven't heard that term. Only time I
heard that term paper tiger wasfrom Trump recently. Where where
is that? What does that mean?
Rob (05:51):
We're from the we're from the same generation, him and I.
Matt Allen (05:55):
So what does that what does that mean?
Rob (05:56):
It it's just it's it's an old term. Obviously, tigers are
ferocious animals. So a companyApple is a tiger, right? You
know, they have all the healthsound financials. They have all
of this paper tiger means thaton the outside, looks like a
tiger on the inside, it's justpaper and could be crumbled and
thrown.
Matt Allen (06:17):
Kinda reminds me of our friend, Michael Fisher. But
Rob (06:19):
Yeah. Fair.
Matt Allen (06:20):
I mean, the thing I the thing that concerns me most
is if we have an economic it'snot it's not necessarily a paper
tiger argument as you just made,but it's it's if we have a
macroeconomic downturn orcapital gets really hard to
raise. OpenAI going to be ableto raise this money in the
current environment. Three, fouryears from now, they might not
(06:44):
be able to. No one might not beable to. Mean, there's times in
the condo where raising capitalis incredibly hard.
That's just economic turns. Andthen that's what they're banking
on. And the other thing is, isthat and there's a world where
they think they can monetizetheir 100,000,000 monthly users
because they announced thatyesterday. They just hit eight,
sorry, 800,000,000 weekly users.They just made that massive
(07:06):
announcement, which is huge aswell.
Rob (07:10):
Well, I think they are monetizing somewhat, right?
Isn't there like a premium $20 amonth for chat GPT? So they're
doing some monetization already.
Matt Allen (07:19):
They are, and they're close to getting break
even, but that's not includingthese build outs.
Rob (07:25):
Look, we haven't even mentioned the fact that I'm
telling you within the next fiveyears, if not sooner, building
these huge data centers is goingto be a political problem for
these companies. Cause I don'tsee a whole lot of communities
lining up to host these andsupply power to them. So again,
I know we've talked about thisbefore. I think it's something
that no one's talking about. Idon't know where they're gonna
(07:48):
put them.
Matt Allen (07:50):
What Bloomberg Originals on YouTube just did a
whole special about for aboutthirty minutes on it. And it's a
it's a it's a you're right,because the community is not
wanting it, but the localofficials are wanting it.
Rob (08:07):
Right, until the local Here's what I know about
politicians more than anythingelse. They care about themselves
and being reelected. And they'regonna want it, because they're
gonna want the revenue from it,right up until everybody that
votes for them figures out thattheir power is going to be a
whole lot more expensive becauseof it. And then nobody's going
to want them. It's a huge issue.
(08:28):
So we can talk about these dealsand building them all we want
until they start breaking groundand actually have deals to
locate them. Again, term papertiger comes to mind.
Matt Allen (08:40):
Well, they do have, they have broken ground on a few
of them already.
Rob (08:45):
Yeah, a few, but what we're talking about now between these
last two deals, they have not.And the size and scope of them
are going to be a politicalproblem.
Matt Allen (08:55):
Do you believe that this is gonna be a, you think it
will always be a local issueversus state issue? Or do you
think federal government canevolve?
Rob (09:03):
So again, I'm not a great believer in the federal
government for anything. And soI think this is going to boil
down to state and local issues.And it's, I think it's going to
Matt Allen (09:12):
become such a massive deal that even states
are gonna shy away from itbecause they're gonna become so
unpopular. So if you'rewondering at home, what's kinda
happening is that, if you don'tknow, is that we're seeing about
a 30% across the board cost ofelectricity going up across the
nation on median level. And thenwe're having, in some places,
(09:36):
having a water shortage becauseit takes a lot of water to
operate these data centers. Andthere's a lot of, one of the
problems they have out in thedesert out west is that, there,
a lot of companies are buildingdata centers out west in the
desert, but they're havingproblem getting water. And so
there's, Right.
Rob (09:55):
I mean, look at what's going on in California and the
watershed with Los Angeles, LosAngeles and everything else. I
mean, it's, if you can't supplydrinking and potable water to
your residents, and then you'regoing to put these data centers
in, I'm telling you, Matt, Idon't think we see some of this
come to fruition because ofpolitical aspects.
Matt Allen (10:14):
Yeah. It's interesting. The thing that
China's doing right now that'sdifferent from us is that
they're just forcing their localcities to do it. Well, that's
what
Rob (10:22):
a totalitarian government can do. We don't operate that
way.
Matt Allen (10:24):
We have, as of right now, I think last time I
checked, we have around close to5,500 data centers. The second
closest company, company countryhas around two fifty five, which
I think was Germany thatmight've been updated recently.
But China's trying to have10,000. I mean, we're trying to
match them. I mean, so thenumbers are going to increase
(10:47):
across the nation, but as youjust pointed out, you made a
great point, that there's a lotof issues that we're going to be
dealing with.
But if you're interested ininvesting in data centers and
things like that, I do have apart of me Trump tax bill. What
do you name it? What's the
Rob (11:06):
The big beautiful bill.
Matt Allen (11:07):
The big beautiful bill. Part of that is that you
massive, massive, massive taxwrite offs if you invest in data
centers or anything similar inthe AI race. So if you have any
questions about that, you canmessage me on Instagram and I
can give you some of thosedetails because the amount of
tax write offs people aregetting on that is, it's
(11:30):
obscene, because we're in anarms race. I had a buddy over
the weekend say new, that thethe arms race, the modern day
arms race is data centers.
Rob (11:43):
Totally agree with that. The problem is you can have all
the money in the world. You canhave all the want to do it. The
federal government can wanna doit. I'm telling you, I'm not
real sure where they can buildthese huge mega centers there in
Alcock.
Matt Allen (11:59):
Do you think it's bearish that AMD is giving up
10% equity, or do you think it'sbullish?
Rob (12:04):
I think it is. I think it's you know, I don't know, Matt.
Honestly, I can I can make anargument either way? I will say
this. I think this whole dealmakes me more bearish on the
whole industry.
Matt Allen (12:17):
Well, to to counter off our conversations that we
had about the Trumpadministration taking over
Timberson equity and companies,in my opinion, this type of deal
is more what I'm for in how Iview how the economy should
work, is that you have a now,now OpenAI has a, a capitalistic
(12:38):
partnership with.
Rob (12:40):
Oh, agree. I totally agree with you there. This is a
million times better than thetaxpayers owning 10% for sure.
Matt Allen (12:47):
My also thing too, is that I thought AMD would be
in a place where they didn'thave to do that, but I don't
mean, but they're, they're causethey also just bet on a horse.
Now, I don't know if this meansthat, that, that it's just
becoming everyone just saying,Hey, OpenAI is so far ahead. For
example, you know, loveperplexity, but almost
perplexity has taken a differentroute than OpenAI, which, and
(13:11):
maybe they didn't intend to dothat originally, but it's more
research focused. It's more, Imean, you know, I know in your
industry, I mean, you could beusing every day, truly. Whereas
ChadGBT, you could, but for justcompletely different, but you
could do hard research there.
A lot of people beyondPerplexity.
Rob (13:28):
Right.
Matt Allen (13:29):
And so they've kind of gone a different kind of
niche. And so maybe, maybepeople are taking these bets.
They're like, we want to be apart of this. I mean, that's
just my thought.
Rob (13:40):
Yeah. They're the clear leader in the clubhouse for
sure.
Matt Allen (13:42):
For sure. And and and maybe just, you know, Lisa
Hsu, CEO of AMD, just said, hey.There's so much far ahead. We
want we wanna make sure thatwe're secured there for the next
twenty years. Yep.
And and and maybe that turns outgood, or if open air something
happens, it'll be bad. Yes. Butyou got anything else on this
subject?
Rob (14:02):
I guess I would say now for sure. If something bad happens
with OpenAI, I mean, we're gonnasee a cataclysmic collapse of
that whole industry and thefinances of it. Right? Because
now it brings down Nvidia, itbrings down AMD. Mean, it just
across the board, it's theequivalent to what happens in
'eight in the banking industry.
Matt Allen (14:21):
Do you think though it will stretch off to private
equity and real estatedevelopers?
Rob (14:27):
I don't think so.
Matt Allen (14:29):
I mean, if these data centers are getting planned
and built and
Rob (14:32):
Yeah, but gotta be such a small niche of the overall real
estate market in America that Idon't see. I know you make that
face and these are hugeprojects, but again, there's, I
would think
Matt Allen (14:48):
there's a
Rob (14:48):
small percentage of people putting their money in the real
estate deals of these datacenters, I think.
Matt Allen (14:54):
But yeah, but the blackstones of the world are
leading this charge. And ifsomething, if they go, if
something were to happenseriously bad, you have a
trickle down effect.
Rob (15:04):
Yeah. Yeah. It's definitely something to keep an eye on for
sure.
Matt Allen (15:08):
Yeah. So those are your thoughts. I got some pretty
big news, a bombshell out ofTesla. Well, this is the one
that's not being talked about orI'm personally excited about.
Then we'll we'll kinda talkabout it.
So Tesla just dropped, in myopinion, a bombshell. So about
two hours ago, they rolled out along awaited full self driving
version 14, which is the biggestleap we've ever seen, Rob. The
(15:32):
the clips that are going aroundX and and Instagram are just
completely wild. One of the coolthings that we haven't seen at
two, like, crazy success is thecar automatically moved over
construction, avoided a loosecode in the row row in the road,
and then read the worker holdingup a stop sign. The car read it
when it flipped to go beforeproceeding, and it didn't stop
(15:56):
from there.
It was tested in a parkinggarage by just a random person.
The car was able to, wait forthe arm to open, knew when the
human grabbed a ticket, foundthe parking spot, and when it
was time to leave, it droveitself right off to the exit
stand, knew knew exactly whenthe person paid for it, which is
pretty wild. Then on top ofthat, we are still waiting for
(16:17):
the mystery announcement forTesla, And they posted two
cryptic videos, which is aspinning wheel and a set of
headlights, no context or nopress release, but, obviously,
that's a world that we live intoday, and the Internet is
completely losing it. The rumorthat would be pretty huge, a
game changer, would be is aTesla that costs under $30,000.
(16:41):
That's been Elon's dream for awhile, which is pretty
unprecedented in America, butit's we but it's very precedent
in China.
As you know, the I'm a massivebeliever in full self driving in
time. I think it's one of themost obvious things that's
coming in time. So this updatehere was awesome. I mean, we're
(17:06):
getting to the point of it'sbecoming every single day, was
more safe to have full selfdriving. Humans in the road are
one thing that's been a worry,and they've worked on that like
crazy.
And one thing, if you're at homeand you don't realize is that
every time a Waymo or a Teslafull self driving, any kind of
crash, anything they do, itseems like it's the opposite of
(17:28):
bearish, but it's the best thingfor it because the more data it
gets, the better and better andbetter and bettering it gets,
the better they get. And so it'spretty exciting news for me
personally. And then it'd hugeif if Tesla can get a car
underneath $30,000 because thatmeans their profit margins
obviously are still pretty highfor that. Rob, what do you think
(17:51):
is more bullish for Tesla? A carless than $30,000 or the full
self driving update?
Rob (17:58):
Alright. So this is where our generation gap is gonna come
in big time. So I am way morebullish on a car under $30,000 I
think if they can do that, theywill sell a ton of them. Because
I think people of yourgeneration love Tesla, love the
way they look for some reason.And I think they will sell a ton
of it.
(18:18):
The self driving car, you're tooyoung to know this, but when I
was a kid, one of my favoritecartoons was the Jetsons. I'm
going to guess nobody wholistens to this podcast knows
what the Jetsons cartoon is.They were a futuristic cartoon
where everything was autonomousand you know, when I used to
watch it, be like, Oh, isn'tthat so awesome? They can jump
in their flying automobile andit just takes them wherever they
(18:42):
wanna go. Now that we look atthis, I will tell you, I will
never, and I will look rightinto the camera and say this,
drive an autonomous vehicle.
I do not trust it, do not trustthe technology.
Matt Allen (18:55):
Right, it's
Rob (18:55):
the same way, I need a internal combustion engine, I
need to be driving the car aswell. I'm not bullish on that at
all. I think you're a fewgenerations away from people
trusting that, but a car under$30,000 for Tesla EV, I think
that that really changes thegame. And that I think they will
(19:16):
be right now there's the bigthree automakers that makes them
the big four.
Matt Allen (19:22):
Well, first of all, it's just the safety thing. When
you get the full self driving,there's gonna be while we're
alive, like, example, my kidsand your you're alive. Yes. No.
You're no.
Your my kids and your and yourgrandkids will will have a full
self driving car. It's justgonna be safe. I mean, do do you
(19:44):
mean all the amount of wrecks wehave on a daily basis from
people being on their phones andbeing stupid, it's crazy. Going
to to a
Rob (19:52):
point where
Matt Allen (19:52):
we're to to a point where it's so safe that you're
going to put people at risk bydriving. I think there's 20,000
wrecks a day. If you could lowerthat to to 10, that means Well,
Rob (20:05):
here's the thing. I've got news for the younger
generations. I will be puttingyou guys at risk for the rest of
my life.
Matt Allen (20:12):
I will be Yeah. Driving my But that's just, but
I'm saying that that's wherewe'd get to though, where it's
just so much safer to do, to,to, to have one that's once the
technology gets there. CauseElon's plan, this is what I
think's the next generation andnot what I'm not personally
gonna see, but like one in tenmillion lifetimes you get in a
car crash because of how,because all the neuro networks
(20:35):
and stuff, I mean, thetechnology on these things are
unbelievable. That's theultimate goal for that. So I do
believe from a safetystandpoint, it's gonna be
awesome.
I do believe it's gonna cut inthe next by the time I have kids
and they drive, it will cutdaily car wrecks effectively in
half. Not right now. Well, rightAnd unfortunately, you have to
(20:56):
have bad events that happen. Youhave to have things go wrong
because they have to get thedata and that's how they fix the
data. You have people who say,Oh, the technology, technology,
that.
Well, let's just take a simpleexample of, all right, the
people who went to the libraryand did all kinds of research
and stuff and books and stufflike, your life got a lot easier
when you use the computer. Likethere's things there that, yeah,
(21:20):
technology is not perfect,neither it is, but some things
in the past when you didn't havetechnology weren't perfect
either. And then also,technology makes your life
better in a in a sense of, hey.You're not having to do this.
You're not having do that.
Rob (21:31):
I love going to the library, searching the card
catalog. Trade that in a secondfor this internet thing.
Matt Allen (21:36):
Well, you still could, but you don't. You don't.
Right. Fair?
Rob (21:41):
Yeah. Fair.
Matt Allen (21:43):
I'm There's me one day that you say, you know what?
I I I'll miss driving, but youjust use full self driving
instead.
Rob (21:50):
We'll see. We'll see.
Matt Allen (21:52):
And also too, let's just say that thirty years from
now, And how many at your ageyou'd be in your eighties then,
you know, when they're eightiescan't drive?
Rob (22:06):
Well, so the whole time we're having this conversation,
I was thinking in the back of mymind, well, you know, thirty
years from now when I'm in myeighties, that would be easier
to be able to get around stillfor people. So we'll see. But I
also routinely tell people onceI hit 75, I'm gonna start
smoking so I don't have to worryabout it.
Matt Allen (22:24):
Well, but I just do think that it's from a safety
angle that that's a huge, huge,huge thing. And I and I I do
believe because Tesla doesn'tmean Tesla will charge a monthly
they charge a monthly or it's anadditional package now when you
buy the car, but you don't like,every car eventually will have
it because they'll they'll sellthe technology. Them and Waymo
(22:46):
will become competition. Soyou're like, the the car you
bought your Acura wouldeventually have it. They would
just have Teslas.
That's coming sooner than later.
Rob (22:54):
I'll go one step further with you. I would be very
bullish on Tesla if eventuallynot only did they sell the
technology and everything else,but they became the insurance
company because
Matt Allen (23:04):
They already have a insurance company.
Rob (23:05):
Theoretically insurance what I'm saying is they would
insure every car that they sellor every car on the road. Are
I'm thinking insurance goes waydown in the environment that you
speak of, the utopia.
Matt Allen (23:18):
They have an insurance part of the branch.
They didn't give you insurancefor Tesla. They're already
Rob (23:21):
doing that. Okay. Interesting. Good.
Matt Allen (23:23):
And they sell their autonomous technology to a lot
of defense stuff. And the onethat they're dealing with is
they're trying to land likeAcura and things like that, but
so is Chinese companies. And Ithink a lot of these companies
are waiting for the to pick awinner. Because to be fair,
probably from a legalstandpoint, they don't wanna
have to deal with what Tesla andstuff are gonna go through. I
(23:46):
mean, I'm not saying Absolutely.
Rob (23:48):
You and I are of the same mind on that. So you know what?
Hey, good luck to them. I enjoydriving my new car. I enjoy
being in control of it.
I'm old. You're not. And sohere's to the future, I guess.
Matt Allen (24:02):
There we go. And then one last thing is that they
are teasing an optimistannouncement coming soon, which
is supposed to be a massiveannouncement. Vaughn has, taken
over the project himself. He'sthe lead engineer, one of the
lead engineers on it. They're,he is working in the factory and
(24:23):
sleeping in the factory again.
Rob (24:25):
Okay.
Matt Allen (24:26):
They're saying he's putting in eighteen hours. They
actually had just one of the,humanoid robot, chief engineers,
AI engineers leave for Meta. Andthe kind of joke is saying this
guy's like, you know what? I cango work ten hours at Meta for
$50,000,000 a year. You know, wedon't know if that's true or
not, but I could see where thatreality is there.
(24:48):
Meta is offering $50,000,000 ata twelve hour workday instead of
what's sleeping in a factory. Sopretty exciting news coming out
of Tesla as well.
Rob (25:00):
If you're excited about all of these things, for those of us
who are not, not exciting newsat all, but go ahead.
Matt Allen (25:06):
Well, the next thing is that we have the government
shutdown going on. A lot ofpeople were bearish for the
first time in the economy, aboutthe stock market. But Rob, do
you kind of wanna lead thatdiscussion into, do you think a
government shutdown is bearishfor the stock market? Because
obviously statistics say it isnot, but there's a but to that.
(25:27):
Then I'll let you get, Tim.
Rob (25:29):
I don't think so. I mean, okay, so we're a few days into
the shutdown now, life seems tobe going on as normal, people
are getting their socialsecurity checks, the mail is
being delivered, defense isstill being done. I'm a little
concerned about the air trafficcontrollers. I'm a great
believer in if you have to work,then you should be paid for it,
(25:51):
right? To me, one of thefundamental ideas of America is
you give an honest day's worthof work for an honest day's pay.
So I don't quite understand whythey're in that conundrum and
I'm a little bit worried if theydon't fix that, what happens?
But again, by and large, withour bloated bureaucracy the way
it is, most of the governmentworkers that are shut down right
(26:14):
now are not gonna be missed.
Matt Allen (26:15):
Yeah, mean, and so from a stock market angle, out
of the last, like, 10 governmentshutdowns, it's kinda funny the
last eight ones after it haveabsolutely boomed. Does it
matter if you're a Republican orDemocrat? And I don't know if
that's I don't know if that hasanything to do with it or if
it's just a bunch of randomness,but we've had eight eight of
(26:37):
them. It's quite for example,last one in 2019 rallied 36% to
S and P 500 in.
Rob (26:44):
Would say it's this probably, don't you think? It's
all this doom and gloom. Oh mygosh, the government's going to
shut down. It shuts down.Nothing happens.
And then eventually, Oh, we'veworked out a deal. There's all
this euphoria. And so theneverybody's like, Oh, everything
is great, streets are paved togold, and then the stock market
explodes. Think that's generallywhy that happens.
Matt Allen (27:06):
Yeah, mean, that could be a good reason, because
when you have eight of the last10 have just absolutely
exploded, then and then the twoother ones, like, were were
broke even. So you're nottalking about I mean, you're not
talking about anything. And Ithink that's probably the best
way. Your answer is probably thebest one because I don't
wouldn't know what it tellsunless it's just completely
(27:27):
random. But when you have 10 ofthem, that's usually not.
Rob (27:32):
Right. Right. So unless the government shutdown led to
something catastrophic, I justthink that's how it is.
Matt Allen (27:40):
And then the only other thing that you have, if
you had one that lasted saysixty days, then you would start
impacting bottom lines ofcompanies, for example, let's
just take Delta. There's a lotof government employees who fly.
Like, you you would like, youyou could run into issues of
that where government contractsor, you know, usually you get
back. But if you do sixty days,say, that's where it starts
(28:02):
getting into a problem. Butbesides that For
Rob (28:04):
people who contract with the government, it's an issue, I
would think. Then If it if itgoes on and on.
Matt Allen (28:10):
Like, for example, Ford, well, you know, without
our government, I don't know ifFord would be would be doing as
well as we think as they think
Rob (28:15):
they are. They're getting crushed today.
Matt Allen (28:17):
Why?
Rob (28:18):
I I've been too busy to look. I just I just happen to
look. I I own some Ford stock inmy portfolio, and I just
happened to see that they werethey were getting pretty crushed
today.
Matt Allen (28:27):
They have a devastating fire at a major Ford
supplier.
Rob (28:31):
Okay. There it is. Interesting.
Matt Allen (28:35):
Well, yeah. But for example, they do a lot of
business with, with thegovernment buying cars and
things like that. So let's sayyou use sixty days and their
next earnings wouldn't be thatgood. Just, just obviously, but
you have, you know, for example,if you had worker A who was
supposed to go on a trip thatthey need to go to for the
government and the governmentshutdown lasts fourteen days,
(28:57):
they have to go, they're gonnago on it. But maybe in day six,
they wouldn't.
Correct. So there's some thingsthat, but outside that, I've had
a lot people text me and askoutside of those random events,
life will go on very, very soonagain.
Rob (29:13):
Yeah, I'd be willing to bet if he stopped somebody on the
street right now, they wouldhave probably forgotten that the
federal government is shut down.Think,
Matt Allen (29:22):
I think we think people have started realizing
that it's really not that big ofa deal.
Rob (29:25):
Right. If anything, just save some taxpayer money is
going into more debt.
Matt Allen (29:30):
Well, yeah. Well, they always, they'll get back to
pay out the wazoo. Yeah. The,the other thing I kind of want
to talk to you about, Rob, isthat we had big news out of
Japan and a prime minister,newly elected first woman prime
minister of Japan. And as youknow, I believe Japan's our
number one trade partner.
(29:50):
I also think it's one of ourgreatest allies. I wanna go to
Japan. I love the Japanese.
Rob (29:55):
Okay.
Matt Allen (29:56):
The reason why the market took off Monday on the
news worldwide is because she'spromised a lot of stimulus, a
lot of AI building, a lot of, Imean, she's very, very bullish.
How that impacts your stocks andthe things you own is because
they're gonna ramp up freight.And they called out America
specifically, so they want moreAmerican products, they want to
(30:18):
do more trade with America. Thatmeans they're gonna also buy
more bonds because they're gonnastimulate the economy. It was
very, very bullish news for us.
Rob (30:28):
I agree.
Matt Allen (30:28):
And I think people don't realize how much we're,
you know, politics and financeare married, especially in
modern day because trade is soimportant to companies' earnings
and things like that. And soit's huge news.
Rob (30:44):
I totally agree. So a couple of things that you said
there. If anybody is listeningto this podcast, they realize
that politics and finance arecompletely tied at the hip and
married. There's no in themodern world today, there's no
getting around it. And second,don't you, you know, Japan's
economy has sort of laggedbehind the rest of the developed
(31:05):
world for a long time now.
They, I feel like that was theCadillac, the catalyst to get
her elected. So I do be withyou. I think that was very
bullish news. And I think, Ithink it signals a new era for
the Japan United Statesrelationship.
Matt Allen (31:21):
For sure. We've always had a really good one
with them since, since postWorld War II. I don't think the
average person realizes how-
Rob (31:29):
Since we didn't.
Matt Allen (31:30):
Yeah. Since we didn't. Have a lot of comments
on that. Can tell you off air.Don't, you know, I truly don't
think, I mean, because everyonetalks about China owning our
debt and stuff.
They're our largest owner of ourbonds, which is our debt. Yes.
And they love it. Like, notbecause they, not because they
wanna hold her over her headlike China likes to, they just,
(31:52):
they're proud of it. Correct.
Which is another whole otherthing in my opinion. But she's
gonna, I can't, I don't know howto say her name. I don't even
want to try, but it's verybullish. It's gonna be bullish
for the stocks you own. It'sgonna be bullish for American
farmers.
And she pretty much outlined allthat. Our current president and
(32:12):
her have already spoke twice, Ithink. She wants to renegotiate
a trade deal and to add morestuff.
Rob (32:20):
Again, I firmly believe her platform on these issues is what
got her alive.
Matt Allen (32:27):
Definitely, definitely. And because they
just struggle with debt so muchsince the nineties. I read a
good book about TimothyGeithner, who was obviously
helped navigate TARP and all thefinancial crisis, but he helped
navigate China's or Japan'sfinancial crisis in the
nineties. He just always said,it's very interesting because
(32:49):
they're so modernized. They dothings all the right way, but
their government just got insuch a bad spot in the nineties
that they cannot get out of it.
And it's not, you know, theydon't even do frivolous spending
more than any other country oranything like that. For example,
Greece was just spending likecrazy when they didn't have it.
Japan just got in such a badhole that they just cannot get
(33:13):
out of it. So,
Rob (33:14):
yeah, I'm cautiously optimistic that I think this
might be the start of it.
Matt Allen (33:19):
Yeah. And that's the thing is to me, start of it. And
we have to, hopefully we go andhelp them and that will help our
farmers who are no longerselling soybeans to Chinese, the
trade war. So we need thingslike that to keep on going.
Rob (33:33):
Absolutely. Absolutely. So we wish her the absolute best.
Matt Allen (33:37):
Definitely. Well, I know it's that today is gonna be
little shorter. Do you have, doyou have anything else?
Rob (33:43):
No. I think today was a great episode. The issues were
very, very interesting to debateback and forth today. And so
looking forward to next week.
Matt Allen (33:50):
Let's, real quick, let's make sure there's no, no
announcement for Tesla. Wanna dothe fifth is that fair?
Rob (33:57):
Yeah. I hope the announcement is they're buying
this podcast and putting me intheir early retirement.
Matt Allen (34:02):
Well, they said you had to use full self driving
cars.
Rob (34:05):
Well, to stop doing this podcast, that might be a trade
off. I don't know. We'll see.
Matt Allen (34:09):
No, they have not made any announcement yet, so
we'll, we'll be staying tuned tothat.
Rob (34:13):
All right. We'll discuss it next week. See if we're right.
Matt Allen (34:16):
Sounds good. Talk to later, Rob.
Rob (34:19):
Yep. Bye.
All right, welcome back to the Matt Allen Show. We
got three big stories that we'retalking about today. The first
one, AMD and OpenAI have made amassive deal that had sent
another shock through thefinancial world, especially in
the valley. Second one, TeslaTesla has a has just made one, a
(00:23):
a major release for full selfdriving. Two, they're in the
middle of an event right nowwhere they going to unveil a
surprise announcement.
We I am monitoring that liveright now. So as if you don't
know, we record this on Tuesday.We release it on Wednesday. So
we're we're gonna speculateslash possibly break the news
(00:43):
live, and we'll get a livereaction. And third, we're gonna
talk about a little bit aboutthe government shutdown, what it
means to the stock market, wherewe see it go from here, and
getting after it.
Rob, what's going on, man?
Rob (00:55):
A lot of different things. A lot of different things, but
excited to be talking aboutthese three topics and to hang
out with you for about fortyfive minutes.
Matt Allen (01:02):
Oh, there we go. Yes. Yes. You have a good
weekend.
Rob (01:06):
Had a good weekend, way busier than I wanted it to be,
but, was glad I was able tocelebrate your birthday with
you.
Matt Allen (01:11):
Well, thank you. I appreciate that. We had a good
time. We got some our buddiestogether. In Tallahassee.
We, we had a good time. Then wewent to Florida state Miami
game. That was not a, what was afun time until, until the actual
game.
Rob (01:27):
But yeah, I was very happy. I skipped all those.
Matt Allen (01:29):
Yeah. Yeah. Traffic was crazy. The town was rocking
and then it got disappointed
Rob (01:37):
very much so.
Matt Allen (01:38):
And just, just, and then your, your Penn state,
lions did not have a very goodshowing.
Rob (01:42):
Well, just to be clear, I didn't graduate from Penn state.
Just been a long time band. Butagain, it's like I said last
week, it's like I told you twoyears ago. Penn State will never
do anything until they fireJames Franklin.
Matt Allen (01:53):
Go. Well, let let's get right into it. Wow. Well,
yesterday, before the marketopen opened, AMD finally got
their big AI moment. OpenAI justannounced a massive multiyear
deal with AMD to power the nextgeneration of AI data centers,
(02:14):
six gigawatts worth of compute,the first gigawatt of AMD's new
m one forty chips that startrolling out in 2026.
This this is a lot differentkinda deal than the one with
NVIDIA, Rob. NVIDIA'spartnership, as we talked about
a couple weeks ago, is focusedon training, which is kind of
the heavy lifting behind the newAI models. While AMD's is all
(02:37):
about inference, which if youdon't know, Rob, know you do,
but if you're listening to this,don't know, Anytime you type a
question in to ChatGPT and itresponds, that's what inference
is. So that's what AMDsemiconductors focus on while
NVIDIA's focus on the backboneand kinda power behind it. But
(02:58):
here's the part that's raised alot of eyebrows, mine
specifically.
AMD gave OpenAI a warrant for upto 160,000,000 shares of its own
stock, which is roughly close to10% of the company. So as OpenAI
builds out more data centers,they actually earn pieces of AMD
in return. That's not somethingyou see every day in the
(03:19):
semiconductor world for sure.For OpenAI, this deal means
guaranteed access to GPUs in theworld are still short on them.
So I'll start off with my takereal quick.
In my opinion, the fact that AMDhad to give up equity to a buyer
is very disappointing becausewe're supposed to be in a GPU
constrained environment. Right?So demand should be so strong
that companies are lining up tobuy these chips without AMD
(03:43):
having to sweep the deal withthe stock, which they are, but
it's also kinda telling me thatAMD is still playing catch up
because they're trying to buyinto its way into revelance
against Nvidia, up equity, whichis wild, but the bigger question
here to me is, where's all thismoney coming from? OpenAI now
has partnerships with NVIDIA,Stargate, and AMD that total
(04:05):
around for 26 gigawatts ofplanned data center capacity at
roughly $60,000,000,000 pergigawatt, so that's about a
$1,560,000,000,000 build out,Rob. And Rob, let me just put
this in perspective, right?
In the last five years, Apple,Amazon, Meta, Microsoft, and
Google combined generated$1,400,000,000,000 in free cash
(04:28):
flow. So OpenAI just agreed todeals that are a total of
$1,560,000,000,000 of build out,which is more the last more than
the last five years what thiscompany has made. So, Rob, I'll
go to you. What what are yourthoughts here?
Rob (04:45):
I think my thought would be it's confusing. So if I if I
were the way I understood itwas, NVIDIA invested into
OpenAI, correct?
Matt Allen (04:55):
Yes.
Rob (04:55):
What was it? To the tune of was it 100,000,000,000 for five
years? Is that right?
Matt Allen (05:01):
Yes. And that that deal, when you did the deal out
on paper, it made it made sensebecause they're gonna get a heck
of a return from that.
Rob (05:07):
Correct. They are. And that's what we discussed. So
then, you know, what? A fewweeks later now, OpenAI has
turned around and and doing thisdeal with AMD, putting money
into AMD.
I just Honestly, Matt, I thinkit's probably a little bit scary
for those who are heavilyinvested in the AI world. I
(05:30):
don't see To me, the old termpaper tiger comes into play with
this deal, And I I don't know.This may be the jumping the
shark moment.
Matt Allen (05:43):
Well, I haven't heard that term. Only time I
heard that term paper tiger wasfrom Trump recently. Where where
is that? What does that mean?
Rob (05:51):
We're from the we're from the same generation, him and I.
Matt Allen (05:55):
So what does that what does that mean?
Rob (05:56):
It it's just it's it's an old term. Obviously, tigers are
ferocious animals. So a companyApple is a tiger, right? You
know, they have all the healthsound financials. They have all
of this paper tiger means thaton the outside, looks like a
tiger on the inside, it's justpaper and could be crumbled and
thrown.
Matt Allen (06:17):
Kinda reminds me of our friend, Michael Fisher. But
Rob (06:19):
Yeah. Fair.
Matt Allen (06:20):
I mean, the thing I the thing that concerns me most
is if we have an economic it'snot it's not necessarily a paper
tiger argument as you just made,but it's it's if we have a
macroeconomic downturn orcapital gets really hard to
raise. OpenAI going to be ableto raise this money in the
current environment. Three, fouryears from now, they might not
(06:44):
be able to. No one might not beable to. Mean, there's times in
the condo where raising capitalis incredibly hard.
That's just economic turns. Andthen that's what they're banking
on. And the other thing is, isthat and there's a world where
they think they can monetizetheir 100,000,000 monthly users
because they announced thatyesterday. They just hit eight,
sorry, 800,000,000 weekly users.They just made that massive
(07:06):
announcement, which is huge aswell.
Rob (07:10):
Well, I think they are monetizing somewhat, right?
Isn't there like a premium $20 amonth for chat GPT? So they're
doing some monetization already.
Matt Allen (07:19):
They are, and they're close to getting break
even, but that's not includingthese build outs.
Rob (07:25):
Look, we haven't even mentioned the fact that I'm
telling you within the next fiveyears, if not sooner, building
these huge data centers is goingto be a political problem for
these companies. Cause I don'tsee a whole lot of communities
lining up to host these andsupply power to them. So again,
I know we've talked about thisbefore. I think it's something
that no one's talking about. Idon't know where they're gonna
(07:48):
put them.
Matt Allen (07:50):
What Bloomberg Originals on YouTube just did a
whole special about for aboutthirty minutes on it. And it's a
it's a it's a you're right,because the community is not
wanting it, but the localofficials are wanting it.
Rob (08:07):
Right, until the local Here's what I know about
politicians more than anythingelse. They care about themselves
and being reelected. And they'regonna want it, because they're
gonna want the revenue from it,right up until everybody that
votes for them figures out thattheir power is going to be a
whole lot more expensive becauseof it. And then nobody's going
to want them. It's a huge issue.
(08:28):
So we can talk about these dealsand building them all we want
until they start breaking groundand actually have deals to
locate them. Again, term papertiger comes to mind.
Matt Allen (08:40):
Well, they do have, they have broken ground on a few
of them already.
Rob (08:45):
Yeah, a few, but what we're talking about now between these
last two deals, they have not.And the size and scope of them
are going to be a politicalproblem.
Matt Allen (08:55):
Do you believe that this is gonna be a, you think it
will always be a local issueversus state issue? Or do you
think federal government canevolve?
Rob (09:03):
So again, I'm not a great believer in the federal
government for anything. And soI think this is going to boil
down to state and local issues.And it's, I think it's going to
Matt Allen (09:12):
become such a massive deal that even states
are gonna shy away from itbecause they're gonna become so
unpopular. So if you'rewondering at home, what's kinda
happening is that, if you don'tknow, is that we're seeing about
a 30% across the board cost ofelectricity going up across the
nation on median level. And thenwe're having, in some places,
(09:36):
having a water shortage becauseit takes a lot of water to
operate these data centers. Andthere's a lot of, one of the
problems they have out in thedesert out west is that, there,
a lot of companies are buildingdata centers out west in the
desert, but they're havingproblem getting water. And so
there's, Right.
Rob (09:55):
I mean, look at what's going on in California and the
watershed with Los Angeles, LosAngeles and everything else. I
mean, it's, if you can't supplydrinking and potable water to
your residents, and then you'regoing to put these data centers
in, I'm telling you, Matt, Idon't think we see some of this
come to fruition because ofpolitical aspects.
Matt Allen (10:14):
Yeah. It's interesting. The thing that
China's doing right now that'sdifferent from us is that
they're just forcing their localcities to do it. Well, that's
what
Rob (10:22):
a totalitarian government can do. We don't operate that
way.
Matt Allen (10:24):
We have, as of right now, I think last time I
checked, we have around close to5,500 data centers. The second
closest company, company countryhas around two fifty five, which
I think was Germany thatmight've been updated recently.
But China's trying to have10,000. I mean, we're trying to
match them. I mean, so thenumbers are going to increase
(10:47):
across the nation, but as youjust pointed out, you made a
great point, that there's a lotof issues that we're going to be
dealing with.
But if you're interested ininvesting in data centers and
things like that, I do have apart of me Trump tax bill. What
do you name it? What's the
Rob (11:06):
The big beautiful bill.
Matt Allen (11:07):
The big beautiful bill. Part of that is that you
massive, massive, massive taxwrite offs if you invest in data
centers or anything similar inthe AI race. So if you have any
questions about that, you canmessage me on Instagram and I
can give you some of thosedetails because the amount of
tax write offs people aregetting on that is, it's
(11:30):
obscene, because we're in anarms race. I had a buddy over
the weekend say new, that thethe arms race, the modern day
arms race is data centers.
Rob (11:43):
Totally agree with that. The problem is you can have all
the money in the world. You canhave all the want to do it. The
federal government can wanna doit. I'm telling you, I'm not
real sure where they can buildthese huge mega centers there in
Alcock.
Matt Allen (11:59):
Do you think it's bearish that AMD is giving up
10% equity, or do you think it'sbullish?
Rob (12:04):
I think it is. I think it's you know, I don't know, Matt.
Honestly, I can I can make anargument either way? I will say
this. I think this whole dealmakes me more bearish on the
whole industry.
Matt Allen (12:17):
Well, to to counter off our conversations that we
had about the Trumpadministration taking over
Timberson equity and companies,in my opinion, this type of deal
is more what I'm for in how Iview how the economy should
work, is that you have a now,now OpenAI has a, a capitalistic
(12:38):
partnership with.
Rob (12:40):
Oh, agree. I totally agree with you there. This is a
million times better than thetaxpayers owning 10% for sure.
Matt Allen (12:47):
My also thing too, is that I thought AMD would be
in a place where they didn'thave to do that, but I don't
mean, but they're, they're causethey also just bet on a horse.
Now, I don't know if this meansthat, that, that it's just
becoming everyone just saying,Hey, OpenAI is so far ahead. For
example, you know, loveperplexity, but almost
perplexity has taken a differentroute than OpenAI, which, and
(13:11):
maybe they didn't intend to dothat originally, but it's more
research focused. It's more, Imean, you know, I know in your
industry, I mean, you could beusing every day, truly. Whereas
ChadGBT, you could, but for justcompletely different, but you
could do hard research there.
A lot of people beyondPerplexity.
Rob (13:28):
Right.
Matt Allen (13:29):
And so they've kind of gone a different kind of
niche. And so maybe, maybepeople are taking these bets.
They're like, we want to be apart of this. I mean, that's
just my thought.
Rob (13:40):
Yeah. They're the clear leader in the clubhouse for
sure.
Matt Allen (13:42):
For sure. And and and maybe just, you know, Lisa
Hsu, CEO of AMD, just said, hey.There's so much far ahead. We
want we wanna make sure thatwe're secured there for the next
twenty years. Yep.
And and and maybe that turns outgood, or if open air something
happens, it'll be bad. Yes. Butyou got anything else on this
subject?
Rob (14:02):
I guess I would say now for sure. If something bad happens
with OpenAI, I mean, we're gonnasee a cataclysmic collapse of
that whole industry and thefinances of it. Right? Because
now it brings down Nvidia, itbrings down AMD. Mean, it just
across the board, it's theequivalent to what happens in
'eight in the banking industry.
Matt Allen (14:21):
Do you think though it will stretch off to private
equity and real estatedevelopers?
Rob (14:27):
I don't think so.
Matt Allen (14:29):
I mean, if these data centers are getting planned
and built and
Rob (14:32):
Yeah, but gotta be such a small niche of the overall real
estate market in America that Idon't see. I know you make that
face and these are hugeprojects, but again, there's, I
would think
Matt Allen (14:48):
there's a
Rob (14:48):
small percentage of people putting their money in the real
estate deals of these datacenters, I think.
Matt Allen (14:54):
But yeah, but the blackstones of the world are
leading this charge. And ifsomething, if they go, if
something were to happenseriously bad, you have a
trickle down effect.
Rob (15:04):
Yeah. Yeah. It's definitely something to keep an eye on for
sure.
Matt Allen (15:08):
Yeah. So those are your thoughts. I got some pretty
big news, a bombshell out ofTesla. Well, this is the one
that's not being talked about orI'm personally excited about.
Then we'll we'll kinda talkabout it.
So Tesla just dropped, in myopinion, a bombshell. So about
two hours ago, they rolled out along awaited full self driving
version 14, which is the biggestleap we've ever seen, Rob. The
(15:32):
the clips that are going aroundX and and Instagram are just
completely wild. One of the coolthings that we haven't seen at
two, like, crazy success is thecar automatically moved over
construction, avoided a loosecode in the row row in the road,
and then read the worker holdingup a stop sign. The car read it
when it flipped to go beforeproceeding, and it didn't stop
(15:56):
from there.
It was tested in a parkinggarage by just a random person.
The car was able to, wait forthe arm to open, knew when the
human grabbed a ticket, foundthe parking spot, and when it
was time to leave, it droveitself right off to the exit
stand, knew knew exactly whenthe person paid for it, which is
pretty wild. Then on top ofthat, we are still waiting for
(16:17):
the mystery announcement forTesla, And they posted two
cryptic videos, which is aspinning wheel and a set of
headlights, no context or nopress release, but, obviously,
that's a world that we live intoday, and the Internet is
completely losing it. The rumorthat would be pretty huge, a
game changer, would be is aTesla that costs under $30,000.
(16:41):
That's been Elon's dream for awhile, which is pretty
unprecedented in America, butit's we but it's very precedent
in China.
As you know, the I'm a massivebeliever in full self driving in
time. I think it's one of themost obvious things that's
coming in time. So this updatehere was awesome. I mean, we're
(17:06):
getting to the point of it'sbecoming every single day, was
more safe to have full selfdriving. Humans in the road are
one thing that's been a worry,and they've worked on that like
crazy.
And one thing, if you're at homeand you don't realize is that
every time a Waymo or a Teslafull self driving, any kind of
crash, anything they do, itseems like it's the opposite of
(17:28):
bearish, but it's the best thingfor it because the more data it
gets, the better and better andbetter and bettering it gets,
the better they get. And so it'spretty exciting news for me
personally. And then it'd hugeif if Tesla can get a car
underneath $30,000 because thatmeans their profit margins
obviously are still pretty highfor that. Rob, what do you think
(17:51):
is more bullish for Tesla? A carless than $30,000 or the full
self driving update?
Rob (17:58):
Alright. So this is where our generation gap is gonna come
in big time. So I am way morebullish on a car under $30,000 I
think if they can do that, theywill sell a ton of them. Because
I think people of yourgeneration love Tesla, love the
way they look for some reason.And I think they will sell a ton
of it.
(18:18):
The self driving car, you're tooyoung to know this, but when I
was a kid, one of my favoritecartoons was the Jetsons. I'm
going to guess nobody wholistens to this podcast knows
what the Jetsons cartoon is.They were a futuristic cartoon
where everything was autonomousand you know, when I used to
watch it, be like, Oh, isn'tthat so awesome? They can jump
in their flying automobile andit just takes them wherever they
(18:42):
wanna go. Now that we look atthis, I will tell you, I will
never, and I will look rightinto the camera and say this,
drive an autonomous vehicle.
I do not trust it, do not trustthe technology.
Matt Allen (18:55):
Right, it's
Rob (18:55):
the same way, I need a internal combustion engine, I
need to be driving the car aswell. I'm not bullish on that at
all. I think you're a fewgenerations away from people
trusting that, but a car under$30,000 for Tesla EV, I think
that that really changes thegame. And that I think they will
(19:16):
be right now there's the bigthree automakers that makes them
the big four.
Matt Allen (19:22):
Well, first of all, it's just the safety thing. When
you get the full self driving,there's gonna be while we're
alive, like, example, my kidsand your you're alive. Yes. No.
You're no.
Your my kids and your and yourgrandkids will will have a full
self driving car. It's justgonna be safe. I mean, do do you
(19:44):
mean all the amount of wrecks wehave on a daily basis from
people being on their phones andbeing stupid, it's crazy. Going
to to a
Rob (19:52):
point where
Matt Allen (19:52):
we're to to a point where it's so safe that you're
going to put people at risk bydriving. I think there's 20,000
wrecks a day. If you could lowerthat to to 10, that means Well,
Rob (20:05):
here's the thing. I've got news for the younger
generations. I will be puttingyou guys at risk for the rest of
my life.
Matt Allen (20:12):
I will be Yeah. Driving my But that's just, but
I'm saying that that's wherewe'd get to though, where it's
just so much safer to do, to,to, to have one that's once the
technology gets there. CauseElon's plan, this is what I
think's the next generation andnot what I'm not personally
gonna see, but like one in tenmillion lifetimes you get in a
car crash because of how,because all the neuro networks
(20:35):
and stuff, I mean, thetechnology on these things are
unbelievable. That's theultimate goal for that. So I do
believe from a safetystandpoint, it's gonna be
awesome.
I do believe it's gonna cut inthe next by the time I have kids
and they drive, it will cutdaily car wrecks effectively in
half. Not right now. Well, rightAnd unfortunately, you have to
(20:56):
have bad events that happen. Youhave to have things go wrong
because they have to get thedata and that's how they fix the
data. You have people who say,Oh, the technology, technology,
that.
Well, let's just take a simpleexample of, all right, the
people who went to the libraryand did all kinds of research
and stuff and books and stufflike, your life got a lot easier
when you use the computer. Likethere's things there that, yeah,
(21:20):
technology is not perfect,neither it is, but some things
in the past when you didn't havetechnology weren't perfect
either. And then also,technology makes your life
better in a in a sense of, hey.You're not having to do this.
You're not having do that.
Rob (21:31):
I love going to the library, searching the card
catalog. Trade that in a secondfor this internet thing.
Matt Allen (21:36):
Well, you still could, but you don't. You don't.
Right. Fair?
Rob (21:41):
Yeah. Fair.
Matt Allen (21:43):
I'm There's me one day that you say, you know what?
I I I'll miss driving, but youjust use full self driving
instead.
Rob (21:50):
We'll see. We'll see.
Matt Allen (21:52):
And also too, let's just say that thirty years from
now, And how many at your ageyou'd be in your eighties then,
you know, when they're eightiescan't drive?
Rob (22:06):
Well, so the whole time we're having this conversation,
I was thinking in the back of mymind, well, you know, thirty
years from now when I'm in myeighties, that would be easier
to be able to get around stillfor people. So we'll see. But I
also routinely tell people onceI hit 75, I'm gonna start
smoking so I don't have to worryabout it.
Matt Allen (22:24):
Well, but I just do think that it's from a safety
angle that that's a huge, huge,huge thing. And I and I I do
believe because Tesla doesn'tmean Tesla will charge a monthly
they charge a monthly or it's anadditional package now when you
buy the car, but you don't like,every car eventually will have
it because they'll they'll sellthe technology. Them and Waymo
(22:46):
will become competition. Soyou're like, the the car you
bought your Acura wouldeventually have it. They would
just have Teslas.
That's coming sooner than later.
Rob (22:54):
I'll go one step further with you. I would be very
bullish on Tesla if eventuallynot only did they sell the
technology and everything else,but they became the insurance
company because
Matt Allen (23:04):
They already have a insurance company.
Rob (23:05):
Theoretically insurance what I'm saying is they would
insure every car that they sellor every car on the road. Are
I'm thinking insurance goes waydown in the environment that you
speak of, the utopia.
Matt Allen (23:18):
They have an insurance part of the branch.
They didn't give you insurancefor Tesla. They're already
Rob (23:21):
doing that. Okay. Interesting. Good.
Matt Allen (23:23):
And they sell their autonomous technology to a lot
of defense stuff. And the onethat they're dealing with is
they're trying to land likeAcura and things like that, but
so is Chinese companies. And Ithink a lot of these companies
are waiting for the to pick awinner. Because to be fair,
probably from a legalstandpoint, they don't wanna
have to deal with what Tesla andstuff are gonna go through. I
(23:46):
mean, I'm not saying Absolutely.
Rob (23:48):
You and I are of the same mind on that. So you know what?
Hey, good luck to them. I enjoydriving my new car. I enjoy
being in control of it.
I'm old. You're not. And sohere's to the future, I guess.
Matt Allen (24:02):
There we go. And then one last thing is that they
are teasing an optimistannouncement coming soon, which
is supposed to be a massiveannouncement. Vaughn has, taken
over the project himself. He'sthe lead engineer, one of the
lead engineers on it. They're,he is working in the factory and
(24:23):
sleeping in the factory again.
Rob (24:25):
Okay.
Matt Allen (24:26):
They're saying he's putting in eighteen hours. They
actually had just one of the,humanoid robot, chief engineers,
AI engineers leave for Meta. Andthe kind of joke is saying this
guy's like, you know what? I cango work ten hours at Meta for
$50,000,000 a year. You know, wedon't know if that's true or
not, but I could see where thatreality is there.
(24:48):
Meta is offering $50,000,000 ata twelve hour workday instead of
what's sleeping in a factory. Sopretty exciting news coming out
of Tesla as well.
Rob (25:00):
If you're excited about all of these things, for those of us
who are not, not exciting newsat all, but go ahead.
Matt Allen (25:06):
Well, the next thing is that we have the government
shutdown going on. A lot ofpeople were bearish for the
first time in the economy, aboutthe stock market. But Rob, do
you kind of wanna lead thatdiscussion into, do you think a
government shutdown is bearishfor the stock market? Because
obviously statistics say it isnot, but there's a but to that.
(25:27):
Then I'll let you get, Tim.
Rob (25:29):
I don't think so. I mean, okay, so we're a few days into
the shutdown now, life seems tobe going on as normal, people
are getting their socialsecurity checks, the mail is
being delivered, defense isstill being done. I'm a little
concerned about the air trafficcontrollers. I'm a great
believer in if you have to work,then you should be paid for it,
(25:51):
right? To me, one of thefundamental ideas of America is
you give an honest day's worthof work for an honest day's pay.
So I don't quite understand whythey're in that conundrum and
I'm a little bit worried if theydon't fix that, what happens?
But again, by and large, withour bloated bureaucracy the way
it is, most of the governmentworkers that are shut down right
(26:14):
now are not gonna be missed.
Matt Allen (26:15):
Yeah, mean, and so from a stock market angle, out
of the last, like, 10 governmentshutdowns, it's kinda funny the
last eight ones after it haveabsolutely boomed. Does it
matter if you're a Republican orDemocrat? And I don't know if
that's I don't know if that hasanything to do with it or if
it's just a bunch of randomness,but we've had eight eight of
(26:37):
them. It's quite for example,last one in 2019 rallied 36% to
S and P 500 in.
Rob (26:44):
Would say it's this probably, don't you think? It's
all this doom and gloom. Oh mygosh, the government's going to
shut down. It shuts down.Nothing happens.
And then eventually, Oh, we'veworked out a deal. There's all
this euphoria. And so theneverybody's like, Oh, everything
is great, streets are paved togold, and then the stock market
explodes. Think that's generallywhy that happens.
Matt Allen (27:06):
Yeah, mean, that could be a good reason, because
when you have eight of the last10 have just absolutely
exploded, then and then the twoother ones, like, were were
broke even. So you're nottalking about I mean, you're not
talking about anything. And Ithink that's probably the best
way. Your answer is probably thebest one because I don't
wouldn't know what it tellsunless it's just completely
(27:27):
random. But when you have 10 ofthem, that's usually not.
Rob (27:32):
Right. Right. So unless the government shutdown led to
something catastrophic, I justthink that's how it is.
Matt Allen (27:40):
And then the only other thing that you have, if
you had one that lasted saysixty days, then you would start
impacting bottom lines ofcompanies, for example, let's
just take Delta. There's a lotof government employees who fly.
Like, you you would like, youyou could run into issues of
that where government contractsor, you know, usually you get
back. But if you do sixty days,say, that's where it starts
(28:02):
getting into a problem. Butbesides that For
Rob (28:04):
people who contract with the government, it's an issue, I
would think. Then If it if itgoes on and on.
Matt Allen (28:10):
Like, for example, Ford, well, you know, without
our government, I don't know ifFord would be would be doing as
well as we think as they think
Rob (28:15):
they are. They're getting crushed today.
Matt Allen (28:17):
Why?
Rob (28:18):
I I've been too busy to look. I just I just happen to
look. I I own some Ford stock inmy portfolio, and I just
happened to see that they werethey were getting pretty crushed
today.
Matt Allen (28:27):
They have a devastating fire at a major Ford
supplier.
Rob (28:31):
Okay. There it is. Interesting.
Matt Allen (28:35):
Well, yeah. But for example, they do a lot of
business with, with thegovernment buying cars and
things like that. So let's sayyou use sixty days and their
next earnings wouldn't be thatgood. Just, just obviously, but
you have, you know, for example,if you had worker A who was
supposed to go on a trip thatthey need to go to for the
government and the governmentshutdown lasts fourteen days,
(28:57):
they have to go, they're gonnago on it. But maybe in day six,
they wouldn't.
Correct. So there's some thingsthat, but outside that, I've had
a lot people text me and askoutside of those random events,
life will go on very, very soonagain.
Rob (29:13):
Yeah, I'd be willing to bet if he stopped somebody on the
street right now, they wouldhave probably forgotten that the
federal government is shut down.Think,
Matt Allen (29:22):
I think we think people have started realizing
that it's really not that big ofa deal.
Rob (29:25):
Right. If anything, just save some taxpayer money is
going into more debt.
Matt Allen (29:30):
Well, yeah. Well, they always, they'll get back to
pay out the wazoo. Yeah. The,the other thing I kind of want
to talk to you about, Rob, isthat we had big news out of
Japan and a prime minister,newly elected first woman prime
minister of Japan. And as youknow, I believe Japan's our
number one trade partner.
(29:50):
I also think it's one of ourgreatest allies. I wanna go to
Japan. I love the Japanese.
Rob (29:55):
Okay.
Matt Allen (29:56):
The reason why the market took off Monday on the
news worldwide is because she'spromised a lot of stimulus, a
lot of AI building, a lot of, Imean, she's very, very bullish.
How that impacts your stocks andthe things you own is because
they're gonna ramp up freight.And they called out America
specifically, so they want moreAmerican products, they want to
(30:18):
do more trade with America. Thatmeans they're gonna also buy
more bonds because they're gonnastimulate the economy. It was
very, very bullish news for us.
Rob (30:28):
I agree.
Matt Allen (30:28):
And I think people don't realize how much we're,
you know, politics and financeare married, especially in
modern day because trade is soimportant to companies' earnings
and things like that. And soit's huge news.
Rob (30:44):
I totally agree. So a couple of things that you said
there. If anybody is listeningto this podcast, they realize
that politics and finance arecompletely tied at the hip and
married. There's no in themodern world today, there's no
getting around it. And second,don't you, you know, Japan's
economy has sort of laggedbehind the rest of the developed
(31:05):
world for a long time now.
They, I feel like that was theCadillac, the catalyst to get
her elected. So I do be withyou. I think that was very
bullish news. And I think, Ithink it signals a new era for
the Japan United Statesrelationship.
Matt Allen (31:21):
For sure. We've always had a really good one
with them since, since postWorld War II. I don't think the
average person realizes how-
Rob (31:29):
Since we didn't.
Matt Allen (31:30):
Yeah. Since we didn't. Have a lot of comments
on that. Can tell you off air.Don't, you know, I truly don't
think, I mean, because everyonetalks about China owning our
debt and stuff.
They're our largest owner of ourbonds, which is our debt. Yes.
And they love it. Like, notbecause they, not because they
wanna hold her over her headlike China likes to, they just,
(31:52):
they're proud of it. Correct.
Which is another whole otherthing in my opinion. But she's
gonna, I can't, I don't know howto say her name. I don't even
want to try, but it's verybullish. It's gonna be bullish
for the stocks you own. It'sgonna be bullish for American
farmers.
And she pretty much outlined allthat. Our current president and
(32:12):
her have already spoke twice, Ithink. She wants to renegotiate
a trade deal and to add morestuff.
Rob (32:20):
Again, I firmly believe her platform on these issues is what
got her alive.
Matt Allen (32:27):
Definitely, definitely. And because they
just struggle with debt so muchsince the nineties. I read a
good book about TimothyGeithner, who was obviously
helped navigate TARP and all thefinancial crisis, but he helped
navigate China's or Japan'sfinancial crisis in the
nineties. He just always said,it's very interesting because
(32:49):
they're so modernized. They dothings all the right way, but
their government just got insuch a bad spot in the nineties
that they cannot get out of it.
And it's not, you know, theydon't even do frivolous spending
more than any other country oranything like that. For example,
Greece was just spending likecrazy when they didn't have it.
Japan just got in such a badhole that they just cannot get
(33:13):
out of it. So,
Rob (33:14):
yeah, I'm cautiously optimistic that I think this
might be the start of it.
Matt Allen (33:19):
Yeah. And that's the thing is to me, start of it. And
we have to, hopefully we go andhelp them and that will help our
farmers who are no longerselling soybeans to Chinese, the
trade war. So we need thingslike that to keep on going.
Rob (33:33):
Absolutely. Absolutely. So we wish her the absolute best.
Matt Allen (33:37):
Definitely. Well, I know it's that today is gonna be
little shorter. Do you have, doyou have anything else?
Rob (33:43):
No. I think today was a great episode. The issues were
very, very interesting to debateback and forth today. And so
looking forward to next week.
Matt Allen (33:50):
Let's, real quick, let's make sure there's no, no
announcement for Tesla. Wanna dothe fifth is that fair?
Rob (33:57):
Yeah. I hope the announcement is they're buying
this podcast and putting me intheir early retirement.
Matt Allen (34:02):
Well, they said you had to use full self driving
cars.
Rob (34:05):
Well, to stop doing this podcast, that might be a trade
off. I don't know. We'll see.
Matt Allen (34:09):
No, they have not made any announcement yet, so
we'll, we'll be staying tuned tothat.
Rob (34:13):
All right. We'll discuss it next week. See if we're right.
Matt Allen (34:16):
Sounds good. Talk to later, Rob.
Rob (34:19):
Yep. Bye.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.