401(k) From Birth? Inside the “Trump Accounts” With Brad Gerstner

Ed Elson is joined by Patrick Moorhead, CEO and Chief Analyst of Moor Insights & Strategy, to break down Amazon’s new Tranium3 chip and what it means for the escalating AI chip race. Then Brad Gerstner, founder, chairman, and CEO of Altimeter Capital, joins the show to discuss how he helped bring the new “Trump account” program to life. Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 1:29Ed Elson?

  Today's number? Five. That's how many hours it took to rescue a large bull moose that recently got trapped in a well in Maine. Authorities say the animal is now safe and sound, but they did not reveal his identity as he wished to remain anonymous.

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• 2:00Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is December 4th. Let's check in on yesterday's market vitals. The major indices climbed after ADP jobs data fueled bets on a rate cut next week. Private sector jobs fell the most since 2023 in November. That data also sent Treasury yields falling. Meanwhile, the dollar had its worst day since September. Bitcoin continued its rebound, reaching a two-week high. Microsoft also fell 2.5% on reports of lowered AI tool demand. And finally, Apple fell 1% after Meta poached its most prominent design executive.

• 2:42Ed Elson?

  Okay, what else is happening? Amazon just introduced a new chip to the AI wars, Tranium 3. AWS announced this new chip at its Reinvent Developer Conference on Tuesday. According to the company, Tranium 3 is four times faster than the previous version. It also has four times greater energy efficiency, and it can train AI models for half the cost of the previous generation. So here to tell us more about this Tranium 3 chip and also what we learned at Amazon's conference, we're speaking with someone who is at the conference right now. We're speaking with Patrick Moorhead, CEO and chief analyst of More Insights and Strategy. Patrick, good to see you again.

• 3:23Patrick Moorhead?

  Yeah, great to see you too. You know, another week, more chip talk.

• 3:28Ed Elson?

  More chip talk. It never gets old. And you're there. How is it? How's the conference?

• 3:33Patrick Moorhead?

  It's really big. And I mean, it seems to take over two or three hotels. And AWS is in so many things. They're a full-stack company. And so they're basically doing everything. And there are a lot of people here who are interested to hear what they have to say and how to get involved and how to do comparisons to other tech vendors.

• 3:57Ed Elson?

  Yeah. So the big news coming out of the conference is this Tranium 3 chip, which is better, faster, stronger, all of the above. Tell us about the Tranium 3 chip. Why is this important? Is it important? What does it mean for the chip race?

• 4:15Patrick Moorhead?

  The simple way to think about Tranium is if you've done, I think we talked about the TPU before from Google.

• 4:22Ed Elson?

  Right.

• 4:22Patrick Moorhead?

  This is Amazon's version of an ASIC. And, and like Google, they use GPUs as well. But when it comes to AWS's very close knit development network and the software that, that they run for AI, it's really the standard for that. And, and the other fun fact here is that Tranium is the chip that powers Anthropic. Who, we can debate whether it's, you know, OpenAI is number one or, or number two to Anthropic. But those are the, you know, the, the two big platforms. You've got Microsoft with OpenAI, you have AWS with Anthropic and you've got Google.

• 5:05Patrick Moorhead?

  And now everybody is working with pretty much everybody now because they just need capacity and they want choice.

• 5:12Ed Elson?

  Right. So the stats have seen Tranium 3 is four times faster than the previous models. It can load train models at half of the cost. Sounds good, but I'm almost more interested in how does it compare to other chips? Do we know anything about how Tranium would compare to say Nvidia's blue chip GPU chip? Or, or Google's? How, how does it compare?

• 5:38Patrick Moorhead?

  Yeah. So again, I'm going to just simplify this. A lot of details that go along with this, but

• 5:45Ed Elson?

  Yeah.

• 5:46Patrick Moorhead?

  Think of Nvidia Blackwell, if you want the highest raw performance and the broadest software ecosystem, you go with Blackwell, right? It's expensive hardware, very strong performance per watt, and it's everywhere. It's in every cloud. Tranium 3 is the best TCO inside AWS for their workloads that you're willing to port to. And it's not necessarily a raw performance leader. And then you've got Google TPUs, Trillium and Ironwood. Cost efficient, high performance training inside of GCP, particularly

• 6:25Patrick Moorhead?

  If you're tied to what's called JAKs, that's kind of like the CUDA equivalent. And then AMD, right, competitive to slightly better compute and memory footprint versus Blackwell, lower levels of vendor lock-in, software is still catching up.

• 6:43Ed Elson?

  So one of the things that I keep on seeing online is these benchmarks, trying to measure which one is the best, which is better than the other. And I can never tell whether to take it seriously because it seems like it's changing all of the time, or whether I should not. And I'm starting to think that maybe just the best benchmark is just the market. Whoever sells the most is the best. Is this an impossible game to figure out which one is the best?

• 7:12Patrick Moorhead?

  So the short answer is yes. And I've served on benchmarking committees before. I was an ex-executive at AMD where we did benchmarks. And having benchmarks are better than not having benchmarks. They're only good at a certain point in time, a snapshot. And what matters is the type of workload, right? Is it FP4, FP8? Is it written in CUDA? Is it JAKs? Is it something different? So there's a lot of variables. But you nailed it, Ed. The market does speak. And what happens before any of these companies make a giant investment is they go through the architecture,

• 7:57Patrick Moorhead?

  they run their code. But Ed, right now, because OpenAI and Anthropic are all running on everybody's hardware, right, that shows you their certainty, which is they're uncertain. And they want to support everything to see, in the end, which one has the best total cost of ownership.

• 8:19Ed Elson?

  Okay. Patrick Moorhead, CEO and chief analyst of Moore Insights and Strategy. Patrick, always good to hear about chips from you. I hope you are enjoying your time at the hotel at Reinvent. Where is it?

• 8:31Patrick Moorhead?

  It's in Las Vegas, right? The only city big enough to hold a conference this. It's kind of my second home, you know, as an analyst, kind of this professional event attender. That's my second job. So.

• 8:45Ed Elson?

  I love it. I love it. Good to see you, Patrick. Thank you for joining us.

• 8:49Patrick Moorhead?

  Thank you.

• 8:51Ed Elson?

  After the break, a look at the new Trump accounts. If you're enjoying the show, give Prof G Markets a follow.

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• 10:37Ed Elson?

  We're back with Prof G Markets. The White House has officially launched the long-awaited Trump Account Program. The federal government will be granting $1,000 to every child born between 2025 and 2028. The money will be housed in a tax-deferred account and invested in low-cost index funds, only accessible once the child turns 18. Additionally, 25 million children under the age of 10 will be eligible for an extra $250, and that is thanks to a $6 billion donation from Michael Dell and Susan Dell. So... For more on this new program, we are speaking with the man who played a crucial

• 11:17Ed Elson?

  part in making it happen. We're speaking with Brad Gerstner, founder, chairman and CEO of Altimeter Capital. Brad, good to see you. Thank you for joining us.

• 11:27Brad Gerstner?

  Great to see you too.

• 11:28Ed Elson?

  So I first wanted to say congratulations, your idea that you actually came on the podcast and discussed, it's now a reality.

• 11:36Brad Gerstner?

  Yeah.

• 11:37Ed Elson?

  You founded the nonprofit group Invest America, which was really the force that made this happen. Let's just start with that. How did this all come about? What does this mean for America?

• 11:51Brad Gerstner?

  Well, I think it's transformed. First, thanks for having me on, Ed. It's great to be back. And, you know, I know how much, you know, you and Scott, you know, worry about and think about the fact that too many Americans are left out and left behind, not in the game of capitalism. And when I was on before, I said, this will be transformational if we get it done. You know, this is a platform that literally creates universal private ownership from birth, a 401k from birth, that gets every child, 3.7 million kids born a year, gets every one of those kids into the game. Now, think about this, Ed. Under the age of 18, that's 65 million kids. And of those 65 million, 50 million would never own an account that compounds.

• 12:32Ed Elson?

  Yeah.

• 12:33Brad Gerstner?

  And now they will all own an account that compounds, that's aligned with the upside of capitalism. And we know, unless you have a compounding asset in this country, like there's no chance that you can keep up, you know, with, with, with the cost of living increases, et cetera. And so I think in that regard, it's a game changer. How did it, how did it come about? Well, you know, I've been working on this idea to first get it passed into law for four years. And, and we were working with both sides of the aisle. You probably saw the letter out today with Cory Booker and Ted Cruz that went out to a thousand chief executives, asking them all to contribute money into the accounts of, of, of our kids. And, you know, I've been working with both of those senators and many other people on

• 13:14Brad Gerstner?

  Capitol Hill across the political spectrum. And we were prepared. We tried to get this done with Biden. As I explained to you guys, we didn't make a ton of progress. There, even though we had a lot of support and we had an opening with this president. Um, you know, Michael Dell did, who's a good friend, played a key role in brokering the, the, the final relationship. He and I went and saw the president um, and the president loved the idea. He made the final call to the speaker that got included in the reconciliation bill. Um, that occurred in April of this year. Now, fortunately, we already had the beach softened in the House and the Senate. So when the president made the call that he wanted to see it in the reconciliation bill, we had already the draft of the Invest America Act on the Senate side.

• 13:56Brad Gerstner?

  We dropped into language, so it's pretty easy from there to get it included. And then, of course, uh, the bill passed, which, you know, let's just stop there for a second. This is a change to our social contract on the order of magnitude of social security itself. The, the federal government's going to launch the largest consumer project in the history of the federal government. Sixty million accounts for every kid under the age of eighteen. And so I think it was extraordinary that we were able to get that accomplished in the law is a, is a fact to celebrate. But as you know, uh, that was never what this was about. It wasn't just, you know, getting it passed into law. It was then executing it and making sure that we turned it into a platform for change.

• 14:39Ed Elson?

  Yeah, uh, just to put it out there, I think most people know this, but I think it's an incredible idea. I, I'm really excited about it, just the idea that, you know, so many people are losing their faith in the system. And a lot of that is because they've been left out of the system. So what are we doing here? We're automatically buying you into the system by investing you in the stock market in just low cost index funds, which we should really all be, uh, invested in. But I want to play devil's advocate and just throw out criticisms that I've been seeing online.

• 15:12Brad Gerstner?

  Yeah.

• 15:13Ed Elson?

  Uh, one criticism I've seen is this just makes rich people richer because rich people already own stocks. And so now we're putting more capital into the market, so they're going to get richer. Uh, I, I've also seen people say, oh, if everyone gets an investment account, then that's like no one getting. Investment account because you're not actually getting ahead. And I've also seen another criticism, which is this is billionaires appeasing the president. This has been a bit concerned with this administration. Michael Dell gives $6 billion and gets in good with Trump. I just want to hear what you would say to those criticisms.

• 15:53Brad Gerstner?

  Yeah, let's first start with this idea of, you know, the rich getting richer somehow. Because I think this is the biggest fallacy, Ed.

• 16:01Brad Gerstner?

  Listen, the rich already have a lot of money. Rich kids already have a lot of money. So the fact that they have an account is somewhat irrelevant to those kids. Because remember, in this country, we have something called 529 accounts. Right, there are 16.1 million 529 accounts. These are accounts for college savings. 15.8 million of those are owned by people in the top 10% of income. Okay, they already have all their kids already. My kids have these accounts. That's how, in fact, the motivation, the story with my kids, how Invest America started, was my older son Lincoln said, Dad, this is great that we have an account, but what about all the kids that don't? That was really the inspiration that drove this. So those kids are doing fine.

• 16:45Brad Gerstner?

  This takes the 50 million kids who would never, not only as children, but never in their lifetime, have an account that compounded with the stock market and getting them into the game from birth. So by definition, they disproportionately benefit because the alternative is zero, Ed.

• 17:02Ed Elson?

  Right.

• 17:02Brad Gerstner?

  Right? And now these kids, if they start with a thousand bucks and an employer or mom and dad or a philanthropist adds just $750 a year, that's $50,000 at the age of 18. That's $150,000 at age 30. And it's a million dollars at age 50 or 55, using the 75-year track record of the S and P 500. So undisputably, this will disproportionately benefit those who have less. And let's, let's talk about the Dell contribution. A key component of their announcement, Ed, was that their 6.25 billion is only going to families that live in zip codes where the average income is less than $150,000.

• 17:46Brad Gerstner?

  So they're targeting, they're excluding the highest earning zip codes in the country. And so I think you're going to see a lot of that as people start announcing additions to these programs, the philanthropic contributions, the corporate contributions. I think a lot of those will be income-based, and so that will also help to ameliorate that. Secondly, let's talk about this question of billionaires appeasing the president, right? There's no doubt, right, that I think in all administrations, you have people who are curry in favor with administrations, doing things that administrations, you know, might like. And, you know, when, when it comes to this president, certainly he's closer to the business community than Biden was.

• 18:28Brad Gerstner?

  But I'll tell you, if you look at the people who are, you know, in the White House, it's Democrat and Republican CEOs across the board. Even if you just look at the day that we announced, you know, had the Invest America Roundtable, Dara Khashoggi, who's been a critic, and, you know, and, and, and I think if you follow his Twitter feed, pretty clear he's on the left of a lot of issues. You know, he was there and he praised this program, Cory Booker and Mark Warner, lots of people on the left. The Clintons have been big supporters of this idea. And so like, this is a big bipartisan tent. And so the fact that Michael Dell, who nobody views as a diehard or super conservative, you know, raging Republican, steps forward and says, listen, I'm going to do this because my foundation has been investing in kids.

• 19:13Brad Gerstner?

  And you know the number one thing they like about it, Ed? If you want to give away $6 billion, okay? And you have to give it away today. How do you do it?

• 19:24Ed Elson?

  Uh.

• 19:25Brad Gerstner?

  You give it to a charity and then the charity somehow gives it to kids, but how much actually makes it to the kids? Ed.

• 19:31Ed Elson?

  Right.

• 19:32Brad Gerstner?

  And how do you track what makes it to the kids? And as entrepreneurs, a lot of people want to give away a lot of money, but they want it to be performance based. They want to know that it makes it to the kids. They don't want some charity apparatus in the middle to take half of it. So for the first time, we have a direct giving platform where these folks can give away billions and billions of dollars at scale. They know it goes directly into the kids' accounts. Nobody's taking a scrape in the middle and it's going to compound according to the rules that have been promulgated, which means that the kids can't take the money out, right? Until they're 18 and then at 18, they can only use it, a part of it, to buy a home, start a business, go to school, or it rolls into the IRA retirement rules.

• 20:16Brad Gerstner?

  And so now we've set up a platform. I think of it a lot like, you know, iOS and now these are the applications that are getting built on top of it. Um, we now have a universal operating system for kids. It's universal ownership, private accounts from birth.

• 20:30Ed Elson?

  Yeah, it certainly seems as though this is perhaps the, the infrastructure through which the ultra wealthy can start giving away money back and putting it, investing it back into America.

• 20:44Ed Elson?

  Michael gave away around 6% of his net worth. I'm waiting for someone to match him. I'm waiting for someone like a Zuckerberg.

• 20:52Brad Gerstner?

  Yeah.

• 20:53Ed Elson?

  Uh, to get out there and match him. Do you think that that's going to happen? Are we going to see more mega billionaires or just wealthy people in general contributing to this program?

• 21:02Brad Gerstner?

  We know, Michael and I are leading the Invest America Giving Council. We're calling everybody who's signed on to the Giving Pledge. These are a lot of our friends and I can tell you, our phones were blowing up yesterday with people who wanted to sponsor states. Right? The state of Texas or California or Indiana or Wisconsin or Ohio to give to all the kids who are born in those states, who wanted to adopt cities, who wanted, you know, to follow Michael's lead. And I see, you're going to see major announcements in this regard. And by the way, those were with people, CEOs, entrepreneurs and billionaires on both sides of the political aisle. Yeah. And so, Michael and Susan were bold in entrepreneurial in going first. Yeah. Right? They were gonna take the shrapnel to the extent there was any.

• 21:47Brad Gerstner?

  And I think now it's made it safe for other wealthy people to follow, but let's not just focus on the ultra wealthy. We have a long tail of extraordinary philanthropy in this country. Right? And so there are going to be people who adopt their school. Right? It may be, or maybe adopt a grade in their school. Say for all the kids in this grade and they'll work with their school to make sure that they contribute to every one of those accounts. There are going to be churches who raise money to make sure that all the kids at the church get money out into their accounts. Yeah. They're gonna be moms and dads that just say, all the friends of ours who have kids, I will tell you this, Ed. The number of children that have been born into my life, I did this with all my nieces and nephews when they were born. But it was hard. I had to set up custodial accounts for them. Yeah. Right?

• 22:32Brad Gerstner?

  This will be the best baby gift or birthday gift or bar mitzvah gift you can possibly give to anybody. Right? None of us really have good creative gift ideas. Now we can just give them a thousand dollars worth of stocks. Yeah. And, you know, let it grow and compound. And so I, I, I think, yes, the head end of philanthropy is going to be potent. It's going to be great. I myself am looking at adding to the accounts in the state of Indiana where I'm born. Uh, you know, it's state of Indiana, there are eighty seven thousand kids born a year. And so I'm talking with the senators, the governor and others in the state. How can we add money to the states of every kid born in the state of Indiana? The state of Texas just announced today, they're gonna add a thousand dollars to every account in the state of Texas.

• 23:12Brad Gerstner?

  All the kids born in the state of Texas. I'll tell you, I've heard from many states now, governors or aspiring governors who want to add to those accounts. So we're gonna set off a little competition in the country. And, uh, you know, God bless, man. This is what this country needs. It's gonna unify people. It's gonna get people back in the game. There's a reason less than half of people under the age of forty believe in capitalism, Ed. Right. It doesn't work for them. Exactly. They're left out, they're left behind, they don't own anything. And if you don't own anything, it's hard to get them excited about it. So why not burn the system down and say, let's start with a new system? Yeah. Right? But you get these, you get people into the game. You get them winning with America and they don't have to win at the same level as everybody else.

• 23:54Brad Gerstner?

  We're not guaranteeing everybody they're gonna be a millionaire, but going from nothing. To something?

• 24:00Ed Elson?

  Yes.

• 24:01Brad Gerstner?

  Going from zero and the perspective of zero your whole life to one? That is a far bigger move than going from one to five. I will tell you, this comes from a guy who had zero.

• 24:14Ed Elson?

  Yeah.

• 24:15Brad Gerstner?

  I know what it feels like to be on the outside looking in. I know how it felt to go from nothing to something. So that is the promise we're going to make to all of America's kids. We're going to get you from nothing to something. And then it's on you to get out there to hustle to add to the accounts.

• 24:31Ed Elson?

  Hundred percent. My final question before we let you go here. You again, you know, I love the idea. They're called Trump accounts.

• 24:39Brad Gerstner?

  Yeah.

• 24:40Ed Elson?

  Did we have to call them Trump accounts? I mean, if we want, it seems like that's the easiest way to politicize the thing. If we want to get everyone on both sides.

• 24:48Brad Gerstner?

  Yeah.

• 24:49Ed Elson?

  Can we call them Dell accounts? Can we call them Brad accounts?

• 24:51Brad Gerstner?

  Well, I, I, I, I was, I was saying this. You know, it's, uh, when you look at the history in the Senate, we call Roth IRAs Roths after Senator Roth. We call Pell Grants Pell Grants after Senator Pell. There, there, there actually is precedence for this. I know for some people it's polarizing, but I will tell you, they would not exist without the efforts of this president. And, you know, Roth IRAs would not exist without the efforts of Senator Roth. And so, um, you know, for, for, for the time being that he's president, they're going to be called Trump accounts and maybe be called Trump accounts forever. But history is ultimately the judge.

• 25:31Ed Elson?

  Yeah.

• 25:31Brad Gerstner?

  Right? And history will call these what history will call them. But I for one think due to his efforts, um, you know, I look at it. And by the way, I can tell you, he's talked to people on both sides of the aisle. He's, he's out there talking to corporations. He's out there talking to philanthropists. He really believes in this. He said to me, it's the whole meaning of my presidency to get everybody else in the game. Right? And so I know a lot of people, there are a lot of things people don't like about President Trump or do like about President Trump. I'm not going, I'm not here to litigate that battle over this piece of legislation.

• 26:07Ed Elson?

  Yeah.

• 26:07Brad Gerstner?

  The Invest America Act is unequivocally good for this country. It's a uniting feature for this country. It's a big bipartisan tent and I'm grateful for his leadership and helping make it happen.

• 26:18Ed Elson?

  Well, I think it's really exciting and I think it's really exciting that, that Michael Dell is contributing as much as he's contributing. I really do hope that this continues and, and creates something of a domino effect. Brad, really good to see you. Uh, thank you for joining us.

• 26:32Brad Gerstner?

  Great to see you and, and, and I love, I love watching you all the time, man. It's amazing what you, uh, you know, and Scott are out there doing, you know, keep it up. And, and let's, I'll come back and update you guys as this progresses.

• 26:43Ed Elson?

  Please do.

• 26:44Brad Gerstner?

  Because I think it's so consistent with the platform and the message you guys are delivering.

• 26:47Ed Elson?

  A hundred percent agree. We, yeah, we really appreciate it. Thank you, Brad.

• 26:51Brad Gerstner?

  All right. Great to see you.

• 26:56Ed Elson?

  So the other day, a friend asked me a question. He said, if Trump did something good, would you commend him for it on your podcast? Which I think was kind of a dig at me. He's basically saying that I'm biased or that I have Trump deranged his interim or something, but also kind of a fair question because I haven't really praised Trump for pretty much anything. And my response to him was, yes, I would if he does something good, if he does something worthy of praise. And to me, he hasn't really done that yet. But I want to be clear, this policy is good. This policy is worthy of praise. Now, does Trump deserve the credit?

• 27:40Ed Elson?

  I don't think so. I think he deserves maybe marginal credit. This wasn't his idea. This wasn't his agenda. I don't think his name should be plastered on the accounts for the reasons I just outlined. I think the credit is probably owed to Brad, maybe Michael Dell, who is helping to fund this. But the point still stands, these accounts are good. And the reason they're good is because they begin to address what we believe is the most pressing problem in America, and that is the unprecedented rise in inequality, the rift between what we call the earners versus the owners, what Karl Marx would call the proletariat versus the bourgeoisie. There are people who make their money through income, through labor, and then there are people who make their money through assets.

• 28:25Ed Elson?

  And the American system, for whatever reason, is heavily rigged in favor of those who have assets, in favor of those who own things, the owning class. And this is why inequality has run rampant, and it's why the top 1% own about a third of the nation's wealth today. It leads to a loss of faith in the system, which eventually leads to some form of civil unrest, which historically leads to mass violence. And this isn't hyperbole, this is just history. Now, there are a few ways to fix this. One fix is we could just pay earners more. We could increase the minimum wage, for example. I would love that, but

• 29:06Ed Elson?

  for whatever reason, our politics just isn't letting it happen. Another fix would be to tax owners more. I would also like that, but again, we've tried this many times and our politics doesn't really let it happen. Or we could simply make everyone an owner. We could give everyone a stake in this game that we call capitalism. And that is what this does. It recognizes the immense wealth creation that is afforded by the stock market, and it automatically buys you in, no matter who you are. It makes every American an owner. And that is a good thing. Now, will it fix all of the problems? Absolutely not. It will

• 29:50Ed Elson?

  not fix the cost of housing. It won't fix the cost of college. It won't fix the cost of healthcare. It won't even level the playing field. If you're already wealthy, as Brad said, you're still most likely to win the game. But if you're not wealthy, at the very least, you are now in the game. You start out on the playing field, versus what we've had before, where you start out on the sidelines. And that is a marginal improvement in the grand scheme of things, but it is still an improvement. So this is great policy and a great move from Michael Dell. And we are grateful to the billionaire who wants to try to save us. At the same time, we should recognize that we are living in a timeline where we are essentially

• 30:33Ed Elson?

  waiting on billionaires to save us, and that is not a good timeline, and I'm not going to pretend it is. But I'm also not going to pretend that this isn't a step in the right direction. Functionally speaking, these accounts are a good thing for America. They're a good thing to lessen the problem of inequality in this country, and I will be the first one to recognize that.

• 30:59Ed Elson?

  Okay, that's it for today. This episode was produced by Claire Miller, edited by Joel Passon and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Our research team is Dan Shalane, Isabella Kinsel, Chris Nodine and Mia Silverio, and our technical director is Drew Burrows. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. Tune in tomorrow for our conversation with Paul Krugman.