Leo Cui, General Partner, FoundersX Ventures "From CRISPR to AI - Investing at the Frontier of Deep Tech"

So what's interesting is that if you look, and you're probably too young for this, but I'm sure you did your research.

But from back in the dot-com days, the internet infrastructure build-out, which you can make an analogy to today, the AI infrastructure build-out.

So call this around early two thousands.

If you looked at three companies, for example, Cisco for example, router, and it was one of the largest market cap.

Every quarter, it was beating earnings by a penny [laughs], but like-

Mm-hmm

... people thought that that was going to be the most valuable company in the world if it wasn't there already.

But if you look twenty-five, twenty-six years later, up until this recent rally, the stock really did nothing.

But then over that twenty-five, twenty-six years, it underperformed the S&P five hundred by a little bit.

The last time I looked at it, eight point nine percent compounded versus the S&P at nine point six.

So that's one.

Nortel Networks was basically building everything.

It-- At one point, growing part of your life up in Canada, right? It was one-third of the Toronto Stock Exchange, Nortel Networks at that point in time, and then ultimately it went bankrupt right after the financial crisis, to call it twenty ten, twenty eleven-ish or so.

And then you mentioned Amazon.

Amazon, in that twenty five-year period, it five hundred X compounded at twenty eight percent.

There are going to be winners, there are going to be losers from every kind of build-out, if you will, but it's hard.

And so that's why for most people that don't do their research, you're just better off just going into the S&P [laughs].

Or if you want to be a little bit more bold, Nasdaq.

But even Nasdaq, from the heights of the bubble, it had a seventy eight percent drawdown, even though it's compounding at, call it thirteen percent versus ten percent S&P.

So that's interesting.

So the question I want to ask you is, if you look today, giving all the hyperscalers are spending, I think in your video, seven hundred and twenty five billion this year on their data center build out, if you will, in CapEx, going to one point two trillion, if you look at some of the numbers that Goldman Sachs is predicting for the next couple of years, right?

It's-

Is everyone going to win? Are all the picks and shovels going to win? And I know in your videos you go into valuations like, ah, is it priced in already? What are your thoughts on that? Long term, how do you think about that?

The way I think about it is in long term, for the companies to make money long term and make revenue is you have to focus on bottleneck.

For example, in today's AI data center, a lot of people focus on chips, the GPUs.