And that is, what is more valuable for NVIDIA? Is it the products, the technology, or is it the leadership?

Well, I guess the short answer is we're going to find out.

Because the leadership is, I think, clearly going to change now.

I don't think you can survive that.

I think he maybe could have survived the first one just because it's not a direct report, et cetera, et cetera.

But it was a fair within the direct report.

I mean, that's just a corporate no, no.

Is that really necessary, though, from a Wall Street perspective? Don't you want someone who can actually fit that role of CEO? Is that more important? Or what do you think? Do you want somebody like a Steve Jobs that has his hands in these projects?

land with his feet

on the ground.

But, um, Listen, it's difficult to replace Jensen Wang.

I mean, he is Jesus among CEOs.

He is charismatic.

He has a technology vision.

He can execute at the quarterly level as well as the long-term level.

Is that really necessary, though, from a Wall Street perspective? Don't you want someone who can actually fit that role of CEO? Is that more important, or what do you think? Do you want somebody like Steve Jobs that has his hands in these projects?

What are you watching today that convinces you we are not going to repeat history?

Well, as they say, history sometimes rhymes, but often rhymes, I should say.

But I do think that in this case, it is different, which is a scary word on Wall Street.

This time it's different.

In 1999, Cisco was trading at about 120 times earnings.

It was growing about 40%.

All of its customers were pretty much nonprofitable.com, funded by Wall Street.

Healthcare, what's the thesis on this? The

Do you think that markets overreacted and perhaps this AI trait is still intact? Well,

I certainly think for terms of AI, it is intact.

I think the problem with the alphabet was clearly the search business decelerated more than people expected.

and searches their golden goose, as we say, maybe the greatest business ever invented in the history of man.

And it decelerated from the mid-teens down to the low teens.

So I think that was the issue.

And I think everything else about the AI part of Google seemed pretty good.

But why do you think that, I mean, you have AI people, AI analysts, Wall Street analysts that actually think that search could be cannibalized? I mean, is that a realistic narrative, though, as we go forward?

Are you an oil trader? Are you thinking oil buying is the place to be right now? Because AI stocks certainly aren't.

I can tell you that for sure.

But on the on the energy side, I think we've talked about this in the past.

I think it's a great hedge.

And and I don't think actually energy stocks have not been paid for where oil is and especially where diesel prices are, because they've been exceptionally strong, much stronger than gasoline prices.

So I think it's a very good hedge.

And I'm I'm overweight energy.

You were around for the telephone era.

I'm going to give you the money and

then you're going to buy my chips.

There's some of that, but not all of that.

But anyway, but but what really affected the market yesterday, because I think AI in general was outperforming in the month of October until yesterday.

And the reason for that was there was a report of the FT, which suggested that that that open AI had exaggerated their revenues.

And of course, there's nothing worse than saying that in public.

And so basically everything in the whole AI infrastructure trade lost a lot of money yesterday.

Do you think that we will have issues going into the holiday shopping season, for instance? And then what does that mean for future earnings?

[laughs]

To be honest with you, I, uh, uh, nobody knows.

It does feel like today there's sort of a feeling a bit of a bottom, um, uh, at least short term.

Um, I do think that it's very overdone.

The, the algos and the quants really pushed everything up in April, May, June.

Um, and, and, and then you had the situational awareness and some core weave bonds going up.

But I think the central thing people should look at, is why I don't think it's over, is nobody said, "Okay, we- we've got this completed data center and nobody's interested." Everybody wants the data center finished yesterday.

... are you, are you at all nervous at all that, that we are now going down a path when it comes to investing, and you think about prediction markets, et cetera, that it's just going to start bringing in a flood of new investors that probably shouldn't be investing at all?

Do, do we s-

...

the bond market has done a lot of work, uh, for, for the Fed in terms of, uh, uh, uh, you know, and, and certainly anybody that's connected to this interest rate environment is gonna be increasingly hurt.

I mean, we haven't even discussed all the real estate loans that are rolling over the next couple of years, and people borrowed at 2% to 3%, and now they're gonna have to refi at 7% to 9%.

Th- that's, you know, that, that's onerous.

You know, you're gonna see some, some real credit losses, uh, going forward u- un- unless things stabilize.

So I definitely think outside of that data center boom, which is still up and to the right, the rest of the economy's gonna slow, and these interest rates that you're seeing here will, will look like good ones six months from now.

So if that's the case, and we do have any type of a slowdown in the economy, Reece, do you believe that that could cause an im- a slowdown in, say, AI infrastructure building? 'Cause that would be, I would, I would think, just a huge issue for the overall economy.

issue

if it happens.

And I don't think it'll happen.

And the reason is, at least as of right now, whenever you bring a data center on, it fills up immediately.

And by the way, the four generations ago NVIDIA chip, which is called the Ampere, it was the one before the Hopper.

The current one is Blackwell.

They're about to go with Vero Rubin.

But what are your thoughts?

What are your thoughts here? Do you think the American consumer right now needs some type of economic stimulus to keep them afloat?

Well, it depends on who you def-, uh, who you define as the American consumer.

I think the top, uh, 20, 30% has no issue.

They have assets.

Uh, there's been asset inflation both in stocks and real estate.

Um, so, so they're fine.

Uh, but the bottom 50 probably does need, you know, something.

Mm

Rhys, what happens to AI valuations if, say, the 10-year treasury doesn't begin retreating back to 4%?

Well, AI valuations have come in.

I think it's also a big myth that at least in the public market, the private market remains, you know, loony tunes a little bit in terms of the valuations that some of these companies are getting.

But in the public markets, you've had a huge valuation contraction since June 30th.

I mean, most of these stocks are still well down from their, you know, mid-June highs.

and earnings have done nothing but keep going up.

So you're going to look at some of these companies like Lumentum and Coherent, which were trading about 14 or 15 times before the AI bubble, or if you want to call it a bubble, before this AI extravaganza came in, they're back to 14 or 15 times.

But that's where I think there's going to be opportunities for entrepreneurs out there to do wonderful things.

Do, do we st-

...

the bond market has done a lot of work, uh, for, for the Fed in terms of, uh, uh, uh, you know, and, and certainly anybody that's connected to this interest rate environment is going to be increasingly hurt.

I mean, we haven't even discussed all the real estate loans that are rolling over the next couple of years, and people borrowed at 2 to 3%, and now they're going to have to refi at 7 to 9%.

Th- that's, you know, that, that's onerous.

You know, you're going to see some, some real credit losses, uh, going forward u- un- unless things stabilize.

So I definitely think outside of that data center boom, which is still up and to the right, r- the rest of the economy's going to slow, and these interest rates that you're seeing here will, will look like good ones six months from now.

So if that's the case, and we do have any type of a slowdown in the economy, Reece, do you believe that that could cause an im- a slowdown in, say, AI infrastructure building? 'Cause that would be, I would, I would think, just a huge issue for the overall economy.