Where Brad Gerstner Is Investing Billions

This is our full conversation with Brad Gerstner, recorded live on TBPN. We discuss why he believes the AI boom is still in its early innings, how companies like Anthropic, Nvidia, and Snowflake are benefiting from the AI infrastructure buildout, why America must continue investing in data centers and compute capacity to stay ahead of China, and his vision for Trump Accounts, a new initiative designed to give every child a stake in the American economy through long-term stock ownership. Sign up for TBPN’s daily newsletter at TBPN.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  Welcome back. How are you doing?

• 0:02Brad Gerstner?

  Great to be here, guys. Great to be here.

• 0:03John Coogan?

  Fantastic.

• 0:04Jordi Hays?

  Back to back with Kyle.

• 0:06John Coogan?

  Yeah, yeah. He laid out one of the greatest SpaceX bull cases. We're going to throw it to you to try and one up him. He said, whoever controls space controls the world. And for that reason, you got to own SpaceX. I liked it. But take us a little level deeper. What are you thinking about in the SpaceX IPO in the lead up? What are you watching for? What unanswered questions are there? What do you think is misunderstood, maybe, that more people should be aware of?

• 0:29Brad Gerstner?

  I mean, I mean, come on, guys. We didn't even have any foreplay. You're already down, you know, and the SpaceX IPO. I mean, first, I haven't seen you guys. Did you sell this thing?

• 0:41Jordi Hays?

  Yeah, I think we did.

• 0:41John Coogan?

  I think we're working for you now. I think we're working for you now.

• 0:45Brad Gerstner?

  Did you guys get shares in OpenAI when you sold this thing?

• 0:48John Coogan?

  Yeah.

• 0:49Jordi Hays?

  Yeah.

• 0:49Brad Gerstner?

  Okay.

• 0:49John Coogan?

  Everybody on the team.

• 0:50Brad Gerstner?

  So we're all on.

• 0:51John Coogan?

  We're all on the same team.

• 0:52Brad Gerstner?

  OpenAI. Okay.

• 0:53Jordi Hays?

  Yeah.

• 0:54Brad Gerstner?

  How much money did you make?

• 0:56Jordi Hays?

  Yeah.

• 0:56Brad Gerstner?

  Come on. I mean, we got, we got to turn the tables a little bit. Hey, let's talk SpaceX.

• 1:02Jordi Hays?

  Well, well, well, maybe before that, we can rewind a little bit because I do remember the last time we were hanging out in person. It was at Katzenberg's event, right? You were basically, it was kind of this interesting moment because in some ways, we were going through a mini correction. Right? Like chatbots, you know, grew incredibly quickly.

• 1:22John Coogan?

  Yeah.

• 1:22Jordi Hays?

  Agents were just starting to work. And it's been interesting to see how the market did go through this correction in Q4. But then realize, hey, whoa, agents are a thing. And you had pretty much perfectly called that in the conversation that that we were having, which, yeah, in some ways, it's just been, it's been such a wild year for so many reasons. But I feel like you had a somewhat of a crystal ball back then.

• 1:49John Coogan?

  Yeah.

• 1:50Brad Gerstner?

  Well, I mean, thank you. And I recall that conversation. And the truth of the matter is, we've gone through several mini corrections over the course of the last two and a half years, right? There's been a wall of worry. I mean, on my podcast with Bill, Bill Gurley, you know, we debated this, you know, Bill was saying, will the revenue show up? Will there be gross margins? Will there be ROI? We're overbuilding or we, you know, every supply constraint turns into a glut and we saw all that wall of worry last year. I mean, I think for me, the turning point was when, when we hit inference time reasoning and we really had this whole other vector of scaling intelligence.

• 2:30Brad Gerstner?

  And I remembered having Jensen on the podcast and he said, Brad, inference isn't going to 100x, not going to 1000x, it's going to 1 billion x. Because agents are going to be talking to agents, right? And so I got very pilled. And then what we saw Opus 4.6 in the beginning of December, it was clear that we had crossed a threshold of intelligence that offered a level of utility that was fundamentally different. And if you were paying attention early in December, you could see that coming. But we started the year with the market very skeptical as to whether or not AI revenues would show up. And let me tell you this. Had Anthropic not delivered its revenues that it's delivered this year, I think the stock market would be down 10 or 15%. I think it's that important to the entire narrative.

• 3:15Brad Gerstner?

  Because the fact of the matter is OpenAI has not blown away their numbers. Google has not blown away their numbers. Like, numbers have been good. But the fundamental driver of, of, of outperformance in terms of offtake of AI revenues has been Anthropic, which is the fastest growing company in the history of capitalism. So that buoyed the entire AI segment. And it was when they started posting those numbers and then they said on top of that, we're doing it at high gross margins in a way that in Q2 may in fact actually lead to free cash, some positive free cash flow, the market really ascended. Oh, remember, two months ago, the market was basically down on the year. And a lot of these returns, we just had two of the biggest months in the history of Altimeter's

• 3:57Brad Gerstner?

  public funds. That's 18 years. I mean, we're going back a long time. But that's, you know, listen, I think we picked some pretty good stocks, memory, logic, etc. But I also think it's just a function of the market delivered. These companies delivered. You saw Dell's, I mean, listen, Michael Dell, one of my best buds and you watched the, the act, you know, that he's delivering with Dell. They just had AI server revenues up 750% year over year, went from a $1 billion business to a $16 billion business. This stuff is real, but in order for it to stay real. We have to continue to see usage by consumers that they're willing to pay for and growth in the enterprise, small, medium, and large that they're willing to pay for,

• 4:38Brad Gerstner?

  and growth in the sovereign domain. I think it will occur, but oftentimes, you know, there'll be some pockets along the way here where, you know, where revenues won't be as strong as people think, we'll have some pullbacks. We could have 10 to 20% pullbacks in the semiconductor stock as just like run-of-the-mill consolidation.

• 4:56John Coogan?

  Yeah, yeah.

• 4:57Brad Gerstner?

  Right? Run-of-the-mill consolidation. I mean, Micron has gone from a couple hundred bucks to a thousand bucks. Dell, this time last year, was, I think, $80 or $90. It's now at $400. These are seismic moves.

• 5:09John Coogan?

  Yeah.

• 5:10Brad Gerstner?

  Right? And so, uh, yeah, fortunately, we were pretty bullish when other people were skeptical.

• 5:16John Coogan?

  Yeah.

• 5:17Brad Gerstner?

  But...

• 5:18John Coogan?

  Yeah, it feels like, it feels like there's, uh, there's like this natural reaction. Anytime there's good news, someone has to dig up something that's like a little bit bearish. Right now, we're seeing, you know, incredible anthropic revenues, and then there's questions about ROI on token maxing and how much is going on there. How are you processing that? Are you thinking that, uh, we'll see CEOs and management teams on the next earnings cycle, uh, sort of start to dig into those numbers, or is it just, uh...

• 5:42Jordi Hays?

  Your honor, I had AI psychosis.

• 5:45John Coogan?

  Yeah, well, that's the most extreme version. The other one is, yeah, we actually did spend half a billion dollars in a month, and, you know, a quarter billion was super effective, so that's what we're doubling down on in the coming quarter. But how do you think that shakes out?

• 5:58Brad Gerstner?

  Well, I mean, if I, if I size up the debate in Silicon Valley.

• 6:01John Coogan?

  Yeah.

• 6:02Brad Gerstner?

  Right? There are the, the bears, who've been bearish on AI for, let's call it, a while.

• 6:06Jordi Hays?

  And anything that comes out, anything that comes out is actually just...

• 6:10Brad Gerstner?

  And so now, right, and so now they're saying, oh, all this AI revenue is bullshit. First, they were saying it won't show up at all.

• 6:17John Coogan?

  Yeah.

• 6:18Brad Gerstner?

  And then it showed up, and then they're saying, oh, it's all bullshit because it's all token maxing, and there's no ROI. So that's one side.

• 6:23John Coogan?

  Yep.

• 6:24Brad Gerstner?

  On the other side are the people who are super AI-pilled, and they're like, oh, no, this is perfectly, you know, Pareto optimal. Everybody's spending the exact right amount of money on tokens, which we also know is not true. And the truth lies in the center. Okay? When you have millions of independent actors, all making self rationalizing decisions, like Altimeter, on buying tokens, right? I don't like, I don't like to waste money. I'm spending money because I'm getting a return. Now, will we, will we experiment with some things that don't provide a return? Of course. I actually sent you guys a slide on this, I think it's pretty fascinating. I don't know if your team can pull up. But this is independent research that we did on this question of, of token maxing. And what we did is we went to 300 enterprises, right?

• 7:07Brad Gerstner?

  And we just asked them, are you starting to optimize your spend? And if so, how much do you expect that you're going to spend year over year, over the course of the next 12 months? And if you leave that chart up, what you will see, guys, is that in the first category, these are all people who are actively optimizing. But they still expect to grow revenues at over 50% over the next 12 months. The second category are people who are planning to optimize. And even if they're planning to optimize, they say they're going to grow revenue at 90% and so on. So here's my point on this, right? And this is across 300 firms who use a multiple of AI solutions.

• 7:48Brad Gerstner?

  This is what they expect of their AI, you know, API token usage. So what do we, what, what does that tell us? It tells us that, of course, people optimize along the way. But we are so early in the adoption curve, right? They're barely using coding today. They're just getting on the coding train and they haven't really even started on using AI for knowledge work more generally. So we're low in the use, the penetration of coding as a use case. We're almost nowhere in, in the penetration of knowledge work more generally as a use case. And then remember this, there are very few enterprises globally that are even using AI. So we are really early in the curve of the people who are actually using AI. So I'm somewhere in the middle.

• 8:32Brad Gerstner?

  Of course, I believe that optimization will continue. But my hunch is that Anthropic and OpenAI, these companies will continue to grow right through the optimization because the growth curve on penetration of both enterprise and use case is so steep. But, you know, we'll see.

• 8:49John Coogan?

  Yeah. Um, is this a, is this a zero sum market where every dollar spent on tokens comes out of a SaaS company? How are you reflecting on the SaaS apocalypse? Because we all saw what happened in the market. Uh, but there's been some really good news lately. How have you processed that?

• 9:07Brad Gerstner?

  Um, well, I, I, I popped on CNBC for a second yesterday and was talking about Snowflake as an example. And the stock was up, what, 35% yesterday?

• 9:15John Coogan?

  Yeah.

• 9:15Brad Gerstner?

  Now, of course, just to be fair, it's only up 10% for the year.

• 9:18John Coogan?

  Yeah.

• 9:19Brad Gerstner?

  Compared to a company like Micron, up 200% for the year, or a company like ARM, up 200% for the year. But they did bounce back and what, what I think we're starting to see is the bifurcation. There are companies that are in the token flow. So all these software companies, we just lump together. Right? We treat them as though they're all equal.

• 9:36John Coogan?

  Sure.

• 9:37Brad Gerstner?

  But there are certain software companies, Databricks, Snowflake and ClickHouse, all of which we're investors in. Which very clear to me, they're in the token flow. As you consume more tokens, the amount of your database queries goes up. I see it at Altimeter, right? In fact, our database queries are growing faster than our token usage, to give you a sense.

• 9:55John Coogan?

  Yeah.

• 9:56Brad Gerstner?

  And this is, I think, hap- so now they've proven they're in the token flow, so they're starting to get some love from an AI multiple perspective. That's very different than a company, I think, like, like Salesforce. And I love Marc Benioff and, and got, you know, he, if anybody can, you know, get in the token flow, it'll be him. But the reality is, the, the front-facing solutions that they offer are more competitive with the models than something like Snowflake. Snowflake's the enabler of the models, whereas I think that Salesforce competes a bit more, so it's going to be more challenging. But I also, I, I've heard so much about the SaaS apocalypse and, and listen. I did a pod with Satya, I don't know, 18 months ago, where he caused disturb by saying, "Software is a thin user interface on top of a crud database."

• 10:39Brad Gerstner?

  And Benioff and everybody freaked out. They're like, "What are you saying? It's way more than that," right? And then Bill and I did a pod, "Is software dead?" So it's not like this is new, but then everybody started freaking out in December, all these, uh, multiples reset. But the question is, what did they reset to? Okay? And this is what I want to focus on here. So if you show this slide that, that I prepared for you, fine esteemed gentlemen.

• 11:04Brad Gerstner?

  You know, what this slide shows is that the multiple correction just took software from a place where they were way more expensive than the market multiple and brought them into the category of the market multiple. Right? So now they're trading at about 22, 23 times real SBC included gap earnings.

• 11:25Jordi Hays?

  Yep.

• 11:25Brad Gerstner?

  That's about where the market is trading. So now, just follow me on this. Software is trading, mostly software names are trading at a higher multiple than Nvidia.

• 11:37Jordi Hays?

  Yeah.

• 11:37Brad Gerstner?

  Right? Nvidia is trading about 13 times earning for 70% growth for the thing that is the most essential thing in AI. And they're, they're, they're at twice the multiple. So like when I hear everybody crying that, hey, these multiples aren't fair. It looks to me like the multiples reset from an above market multiple where everybody thought the, the software revenues and, and earnings were impenetrable. So now they're saying, well, I don't know, some of this maybe three, four, or five years out will be replaced. So we're going to raise the discount rate. We're going to lower the multiple. They've only lowered it to the market multiple. Let me just suggest that there's a possibility these trade well below the market multiple.

• 12:16Jordi Hays?

  Sure.

• 12:16Brad Gerstner?

  Right? I'm not, I'm not wishing for that, but I'm just saying there's a distribution of potential outcomes here. If you get on the AI train, if you get in the token flow, you're going to get a above market multiple. If you don't, if you slow down and it looks like every time that computational intelligence improves, your business gets worse, then I promise you they will trade below the market multiple. And there's, and there's more room to the downside. So for us as investors, you know, Warren Buffett has this, you know, this old metaphor, you know, there's the easy basket, there's the hard basket. Uh, yeah, or the, the yes basket, the no basket, the too hard basket.

• 12:53Jordi Hays?

  Yes.

• 12:54Brad Gerstner?

  For me, software today is generally in this, in the too hard basket.

• 12:57Jordi Hays?

  Yeah, it's notable because you've been saying that, I think for months now.

• 13:02Brad Gerstner?

  Yeah.

• 13:02Jordi Hays?

  And there's a lot of people now that there's been a stabilization that, that say like, oh, I'm, I'm smart enough. I can, I can, I, I can outsmart the market here. And like you're saying, even with where multiples are now, you still could be catching a falling knife. Um, I wanted to ask you about, uh, the, uh, a potential data center moratorium and how, you know, the likelihood of something like that in your view, how that would. If you have less capacity coming online, that would obviously be bad for, you know, chip companies, various companies in the hardware supply chain, but it could be great

• 13:43Jordi Hays?

  for people that are actually have, you know, basically like have tokens to sell because they would potentially get more pricing power. How do you?

• 13:52Brad Gerstner?

  I think it's bad for everybody. It's bad for everybody, but most importantly, it would be horrific for America. And lest we be overconfident in Silicon Valley, let's remember the activists, a small group of activists, shut down supersonic technology, and a small group of activists shut down all nuclear clean energy in this country. Okay, we have 100 fission reactors being built in China. We have one in the United States. It's a disaster that happened. And so we can't take for granted that the kooks who are calling for data center moratoriums, right? Which, just think about this for a second. All of our GDP growth is coming from the fact that we are building data centers

• 14:33Brad Gerstner?

  and driving AI and driving productivity improvements in the economy. A data center moratorium would thrust us straight into a recession and high unemployment. Secondly, it would cede the entire global game to China. Like overnight, we would lose to China in the global AI race, which is not just about AI. It's about economic security. It's about jobs, and it's about national security. So it literally is insane that we would do this. I can't even believe there are people talking about it. However, what, why are they talking about? Because people are concerned. Local communities are concerned. I just got back from celebrating my mother's 90th in rural Indiana, you know, over the Memorial Day weekend.

• 15:15Jordi Hays?

  Congratulations, sir. Happy birthday.

• 15:17Brad Gerstner?

  Thank you, boys. She's incredible. She is so incredible. But you think about a place like Mishawaka, Indiana.

• 15:25Brad Gerstner?

  Where, you know, they're building a data center. I mean, folks here, they they're worried about their jobs. They're worried about their kids having jobs. And then they're told by these crazy activists who show up in their town. They're not going to have any water and their electricity bills are going to go up. So can we blame these people for being a little agitated about what's going on? So I'm actually working on an initiative. I'm not prepared to announce today, but with like everybody in the value chain, all of the cloud companies, all of the Nvidia's and AMD's and, you know, and off takers, et cetera, and the White House, that would deliver a very tangible and profound dividend to the communities that were building.

• 16:01Jordi Hays?

  There we go. There we go. And I think it, I think it's the, there's a very elegant solution there. You're the guy to do it. You're the hero that American capitalism deserves. You got Trump accounts done. I feel like this is a good, good next act for you.

• 16:16Brad Gerstner?

  Um, well, I'm, I'm in the mix. Um, I'm happy to do my part. There are extraordinary people around the table. Um, but here's the thing, we have to build the socio-political bridge for the next three years. Right? In three years, it's going to be obvious, I think, the abundance and the benefits that AI is driving for us as consumers. Everybody's going to have their own personal assistant in their pocket, right? For next to nothing. Think about that. Can do your calendar, can order your food, can, you know, get you a new black T-shirt, send mom a birthday present, all the things. And every enterprise is going to have things that up-level us all as humans. So I am firmly, just like, uh, you know, uh, John Maynard Keynes was at the start of the Industrial Revolution. I am firmly in camp optimism about technological progress.

• 17:01Brad Gerstner?

  But I'm also not head in the sand about the disruption and the concern people have for the next three years. So we have to give them tangible benefits that get us over that bridge. I think we're going to do it. I'm feeling pretty optimistic about it. But you're right to bring it up and you're right to be concerned about it. We cannot take it for granted.

• 17:18Jordi Hays?

  Yeah, the, I mean, this just goes back. I think it's entirely fair that individuals, you know, if you say, I'm going to put an AI factory in your backyard. Okay, is it gonna create jobs, uh, briefly, and then, you know, some, some, some maintenance? I think it's totally fair for people to not want it in their backyard because there's some, they, they, they perceive some risk, uh, and, uh, there's no direct benefits because they can just get AI anywhere, right? It doesn't matter where the data center is. But there's a solution.

• 17:47Brad Gerstner?

  Yep.

• 17:48Jordi Hays?

  Um, how are you thinking about adoption curves? Uh, it, it feels like part, part of the reason that we've had, you know, these kind of like rolling, uh, corrections is that, you know, technology gets adopted really quickly. People assume that it's just a, a straight line forever, but then there's a new capability, a new, a new technology, and it feels like stuff is just breaking through like instantly. Um, where have you, like, are you adopting new frameworks internally to, to try to understand how quickly new products can, uh, get to market? Obviously, enterprise is, is different, but, uh, it feels like the line between consumer and enterprise, at least in, you know, coding, has never been more blurred.

• 18:31Brad Gerstner?

  For sure. I mean, listen, I, I, I think about when I got into the game, guys, 1999, 2000, and we had about 35 million people connected to broadband internet, right? We all saw what Amazon was going to be, but where we got over our skis, right? Is we thought it would come a lot faster and we forgot that there were only 35 million people connected to broadband internet.

• 18:51Jordi Hays?

  Yeah.

• 18:52Brad Gerstner?

  Today, we have 4 billion, 3, 4 billion. Like, the rate of diffusion and the, the, the magnitude of diffusion is radically, radically different. And think about this: we have a natural constraint on how fast we can go because we only have so many memory wafers in the world. We only have so many logic wafers in the world. We only have so much powered shell in the world. That means we can only produce so many tokens, okay? And it's almost as though in 1999, 2000, we could only lay so much fiber. And I've said this a thousand times: when we were putting down the fiber in 2000, we called it dark fiber for a reason. There was nobody using it, and we knew there was nobody using it when we put it in the ground. There's not a dark GPU in the world today. Yep.

• 19:37Brad Gerstner?

  Okay, there's not a dark token in the world today. So I think it's a very different thing. I think it's a healthy thing. We have this wall of worry. We can't build that much supply. And I would say if I look at every company, what did they report on their earnings calls? Google was token constrained. They said if we had more tokens, we'd be able to generate more revenue. Same for Amazon, same for Microsoft, same for OpenAI, same for Anthropic. The world demands more intelligence. Intelligence can only be produced with tokens, and we have physical limits to the amount of tokens we're going to be able to bring online. So, yes, we will have these waves, but I think the rate, the parabolic rate at which these new models are going to produce intelligence, I think we're going to be blown away over the course of the next nine months.

• 20:19Brad Gerstner?

  You talk independently, uh, you know, to Michael Truul and the guys at Cursor and now, you know, taking over X.ai, or you talk to uh, the guys at Anthropic or OpenAI, and they kind of look you in the eyes with that Oppenheimer look, and they're like, we're here. Yeah. Right? Like, we're, like, like, we are going to, think about this. OpenAI and Anthropic combined to start the year had three gigawatts of compute, three combined. They're going to end the year closer to 10 and end next year closer to 20. Yeah. We're making algorithmic improvements. We're making massive steps up the scaling law because the amount of compute we're going to have available to us. Think about, you know, uh, macro hard and macro harder that, uh, Cursor is going to now be able to train a frontier level model on. So

• 21:03Brad Gerstner?

  we've got incredible competition in America. We got the right amount of compute coming along. I don't worry about the bubble as much, even though I know that, you know, uh, there, there will invariably be, you know, some months that revenue doesn't grow as fast. Um, I'm really worried about making sure that America stays foots on the accelerator, competing globally, and winning the AI race. Like, this is going to lead to a moment of, of, of abundance for our economy. And it's only through great national wealth that we can raise the floor for everybody else. Yeah, no, it makes no sense.

• 21:35Jordi Hays?

  Uh, there was some reporting this week that Meta is hiring FDEs. I was sort of surprised to see them going into the enterprise because it feels like they have every advantage on, you know, consumer. They have the billions of users. They have, uh, they have, you know, exciting hardware. Uh, all, all these things.

• 21:59Jordi Hays?

  How much did you, was that surprising to you at all? Do you expect more companies that weren't traditionally enterprise focused to say, hey, there's tens, maybe hundreds of billions of dollars of revenue here? We should be, we should be in this market?

• 22:13Brad Gerstner?

  I mean, the second you start spending a hundred billion dollars on CapEx annually, okay, you run into the AWS problem. What's the AWS problem? Now I have all this compute, but I don't use it every day equally. Right? Jeff built AWS because he said, I have to build my capacity for Christmas Day or the, you know, the week leading up to Christmas, Black Friday. But he's like, the rest of the year, half of that stuff sitting idle. It's expensive as hell, so I may as well rent it to everybody else, right? Turned into a blockbuster business, but it made his core business better because he could, he could build to Black Friday, right? And nobody else could because they didn't have AWS. So that's why Elon has launched EWS, right?

• 22:55Brad Gerstner?

  Elon Web Services, you know, with his compute and he's, you know, signed up a big first customer with Anthropic. Listen, nobody on earth is better at turning electrons into tokens than Elon. Right? So expect a lot more data centers out of Elon, expect them on earth and eventually in space. And I think that changed the whole tenor of the SpaceX IPO, both the Cursor deal and the Anthropic deal. I think that went from, you know, people being slightly concerned about it to people being quite excited about it. I'm happy to, you know, to unpack that. So I think that for Meta, if they're going to be in the game of spending that much money, listen, Susan Lee is, you know, incredible over there as the CFO. And I'm sure they're looking at the strategic plan and Mark is saying, I want to build

• 23:40Brad Gerstner?

  even more because that guy is never going to give up the race, right? The frontier level AI, none of these guys want to give up that race. And so they just have to figure out ways to monetize everything that they're building. Do I worry as a shareholder at some level? That it's, you know, that's hard. That's hard to take a business. It's been 120% consumer and say, okay, now we're going to be in the business of AWS and maybe even in the business of enterprise level agents. I think it is hard. I think they're up for the Paul, and remember, you suggested the merger between, you know, product-led growth, these coding agents kind of feel like consumer adoption.

• 24:17Jordi Hays?

  Yeah.

• 24:17Brad Gerstner?

  So there's a lot of shared consumer DNA with what's going on in the enterprise today. So they may surprise them, folks. But.

• 24:25John Coogan?

  And Meta does have links into like hundreds of thousands of businesses through the ads platform. So it's not like they don't have any relationship to businesses. They do, so.

• 24:34Jordi Hays?

  One more that I was curious to get your thoughts on Kirkland and Ellis is talking about investing half a billion dollars into their own software to help run their firm. A lot of people pushing back on that historically, you take a firm that doesn't have strong, you know, software competency and they spend, you know, hundreds of millions of dollars on their own software. There's a lot of examples where that hasn't gone well. Yet at the same time, software, making software today is wildly different. And it's very possible that that things are changing, especially if you can get the right partners around. And I know they have some great partners.

• 25:14Jordi Hays?

  Do you expect more companies of that scale, services, businesses to want to try to own as much of the stack as possible and not be reliant on, you know, the Harveys or the Lagoras of the world?

• 25:26Brad Gerstner?

  I mean, what else are they gonna do? I mean, it's kind of like, what else are you gonna announce? Oh, just we give up? You know, so like, and like, they gotta do something. The competition is coming straight at them. I, I don't think it's a high probability bet personally. Like if I was a partner at Kirkland and Ellis and somebody pitched me on that, I'd say, ah, I, I, I'm not sure that's the highest and best outcome here. So what is an alternative outcome? Well, a good friend, you know, Josh Kushner, what he's doing at Thrive Holdings, right? Where he's buying accounting companies. And now I have somebody who's just like deep in the weeds, recruiting the best engineers in the world, deep partnership with OpenAI. I saw Greg Brockman retweet the great, the work that they're, that they're benefiting. All these accounting firms, like they're driving just huge productivity gains in these accounting firms.

• 26:11Brad Gerstner?

  So it seems to me that that's a more likely outcome, you know, a Thrive Holdings buying a Kirkland and Ellis and saying now we're. Going to, you know, take this thing and AI turbocharge it. I think you're going to see a lot of that out of private equity firms, out of firms like Thrive Holdings. I think you're going to see take privates where people do that on an individual company basis. But am I confident that software has gotten so easy that a law firm that gets up every day and thinks about writing legal briefs is all of a sudden going to write killer legal software to compete with OpenAI and Anthropic? I think that's unlikely.

• 26:46John Coogan?

  That's hard.

• 26:47Jordi Hays?

  What, what is your thinking around the series A, B, C, these, you know, earlier growth rounds? Feels like a lot of investors are just kind of frozen. They, you know, you were talking earlier about not necessarily frozen in terms of their activity. They're doing a lot of deals, but they maybe don't have as much confidence knowing.

• 27:10John Coogan?

  What will get steamrolled?

• 27:11Jordi Hays?

  What will get steamrolled in the future? You were talking about being in the token flow. Is that like where you feel comfortable deploying at this early stage where you, you know, you're betting on it, you know, a 10-year outcome?

• 27:24Brad Gerstner?

  Yeah, I mean, listen, I, I think we all have to have the humility in these moments to know that looking out 10 years is almost impossible.

• 27:31Jordi Hays?

  Yeah.

• 27:31Brad Gerstner?

  Looking out 10 months is pretty damn hard. But I would say if you just looked across our portfolio and, and I think Altimeter is performing better than it has any time in its 18-year history, you know, our early-stage team, I think. Overnight success.

• 27:47Brad Gerstner?

  Awesome, you know, awesome work on the early-stage side. But if you look at the type of stuff that we're investing in, it is in the token flow. Right? We're building to those compute shortages. You know, we had the Cerebras IPO, you know, last week. We had been in that for nine years. You know, investors, you know, Grok, so we're looking at a lot of other semiconductor type businesses. We're looking at a lot of compute data center type businesses. And, you know, I, you just had, you know, your prior guests, you guys were talking about all the stuff you're doing in military modernization and the stuff that's adjacent to AI but benefiting from AI. We're doing a bunch of stuff there in modernization of the military.

• 28:28Brad Gerstner?

  So I think you find places that are either in the token flow or benefiting from the token flow. And then I would say in growth, like we're just not doing a lot in what I would call inflection stage growth. This is the company's at 5, 10, 15 billion. You know, we've really made massive bets, the biggest bets in the history of Altimeter, between OpenAI and Anthropic, which, you know, is consuming billions and billions of dollars. And so we think they are the principal beneficiaries. And then on the public side, for three years now, we basically had 100% of the portfolio in AI and compute. And, you know, as I sit here today, even though it's come up a lot, you know, HyNix is still trading at a single-digit multiple, and Micron's trading a single-digit multiple,

• 29:09Brad Gerstner?

  and Nvidia's trading at 13, you know, times. And you say, how is that even possible? Nvidia's up 15x, like, better than a venture market return over three years. Like, like, think about that. Like, all the venture returns have been had in the public markets, by the way, guys.

• 29:23John Coogan?

  But the earnings have come.

• 29:24Brad Gerstner?

  But their multiples have come down.

• 29:26John Coogan?

  Yeah, because the earnings have come.

• 29:27Brad Gerstner?

  Their multiples have actually come down. This is the cheapest multiple Nvidia has traded at in a decade, right now. Okay? And by the way, I think their growth is going to continue to sustain. They're now taking 50% of their free cash flow and returning it by way of dividend or buying back stock. I would encourage Jensen to do 70 or 75%. I think if he does that, by the way, a prediction, you know, look who invested in Apple. The second they bought back, or the second they committed to 50%, 75% of their free cash flow returning to investors? Warren Buffett.

• 30:01John Coogan?

  Yeah.

• 30:01Brad Gerstner?

  One of the greatest investment returns in history, right? And so, once you make that, cross that threshold, and I think this, you know, they're running that business incredibly well. So, the public markets, we've had, you know, basically 100% AI and compute, we're basically there, you know, today. So I think it is harder. If you're a Series B or Series C company, think about what we used to do in software. If it's Series A, you had a couple million in revenue, and then Series B, I don't know, you had 20 million in revenue. Shit, you would have a line out the door, people who wanted to do that deal. There's a, you wouldn't have a single taker today. Not a single take.

• 30:36John Coogan?

  You mentioned something I think that resonates with everyone. It's very hard to predict what's going to happen in 10 years. Obviously, your job is to, you know, look at individual trends and names. But I want to know about the Trump accounts, and I want to know about investing for the next generation, for children. Advice. Also, get me up to speed on the program, what's rolling out, what's the progress? But then, what is advice to parents in an uncertain time where setting their children up for success is maybe more critical than ever?

• 31:09Brad Gerstner?

  Well, um, the update is that after four years of working on this and, you know, getting it passed into law last July 4th, uh, the Invest America Act as part of the, the big beautiful bill, um, you know, it's set to, uh, launch and be funded on this July 4th. But we launched the app, guys, yesterday. So you can download the app. Every single family, you should tell every family you know who has a kid, they should download the app for their kids, get their kids signed up. There are 35 million kids in America under the age of 10, okay, who get at least 250 bucks. So if you're basically born after January 1st, 2025, so think about like under 2, you get a thousand bucks in the S and P 500. If you're between 2 and 10,

• 31:54Brad Gerstner?

  you get 250 bucks. Most of those kids will get 250 bucks from Michael and Susan Dell. If you live in Indiana, you'll get an extra 250 from me. If you live in Connecticut, you'll get an extra 250 from Ray Dalio. If you live in Oklahoma, you'll get 250 from the state of Oklahoma, okay? And that's just for starters. We have thousands and thousands of companies.

• 32:12Jordi Hays?

  There's a lot of billionaires in states that you didn't name.

• 32:15Brad Gerstner?

  Oh, no, listen, listen.

• 32:17Jordi Hays?

  They've heard from you. I'm sure if they haven't heard from you, they're going to.

• 32:20Brad Gerstner?

  It's, it's coming. And by the way, the generosity, this is the Giving Pledge 2.0. We have trillions and trillions of dollars that are going to change hands in this country. There's the single most efficient way for somebody like me to fund the next generation. A hundred cents on the dollar goes to the kid. It compounds for 18 years for their lifetime. It makes them a capitalist, an owner. We know they're more likely to graduate from high school and college, more likely to start a business, more likely to, to buy a home. The societal ROI on this is off the charts. So we launched it yesterday. Get a, get a rip of this, man. It is now the number three app in the United States. The number three app. We just passed Google. We're only behind ChatGPT and Claude. It's incredible.

• 33:05Jordi Hays?

  You're coming for your kids.

• 33:09John Coogan?

  Is in all three of the top app store apps right now.

• 33:12Jordi Hays?

  Total Gerstner, total Gerstner victory.

• 33:14John Coogan?

  It's a total Gerstner victory.

• 33:16Brad Gerstner?

  Well, I would say, um, you know, kudos to Vlad and the guys at Robinhood and BNY and Joe Gabia at the National Design Studio. And frankly, the whole team at the Treasury Department led by Luke Pettit and the Treasury Secretary. This is the way government should be done. A citizen had an idea. Yeah. He was able to go to Washington and actually get a law passed. Yeah. And then we put together a SWAT team of people who are experienced building these things to build them. And then the consumers, i.e. the citizens of America who pay for this shit, said, "Hey, we love that thing," and bid it up on the App Store. So we have a lot of people downloading the apps. There are a lot of improvements coming, so be patient with us, but download the app.

• 34:00Brad Gerstner?

  Get your kid on the path to compounding. On July 4th, guys, the money turns on. So every parent's gonna see that their kid owns a little Nvidia, a little Microsoft, a little Walmart, right? Their little slice of all the top 500 companies in America. And on July 6th, I hope we have a joint bell ringing of the New York Stock Exchange and the NASDAQ from the Oval Office to really signify the start of the trading of these accounts. Of course, parents don't have to know anything about investing. It all goes into the S and P 500. Yeah. Okay? But I'm cajoling some of our friends. You would know their names. I think it would be amazing if we had some of our friends gift a share of the most amazing companies in America. You know, the Facebooks, the SpaceXs, the Open AIs.

• 34:45Brad Gerstner?

  How about if they all gave just a share of those companies to every kid in America? Yeah, it'd be incredible. We are going to change and reorient how the 70% of people who have felt left out and left behind, they are not owners of capital, okay? We need to get them on the compounding journey. They need to feel like they're on Team America, they're in the game. This does that for every child. This is not a 529 account for the top 10% of Americans who can afford to save. This is for everybody, and it's so gratifying. I was in Durham last Friday. I adopted a school there. 700 kids. $250 to every one of the kids. Now, a lot of people say, "Well, how'd you do that?" Well, it's $250 times 700 kids. They made a Google spreadsheet. They got them all signed up.

• 35:30Brad Gerstner?

  I give the principal $150,000 and she QR codes the money and teaches the accounts. Okay, everybody in America can adopt a school. Raise a little bit of money, go to your principal and say, we want to juice up these accounts for all the kids. Get all the kids signed up and the teachers there, this was a school. That's 75% black and Latino, serving the rural poor in Durham. The level of excitement, a mom came up to me crying. I never thought my kids would, you know, own anything. The teacher so excited to teach the kids about what it means to to own something. You know, I grew up in rural Indiana. We had zero. And as I said to the president, when you're at zero, it's a despondent place to be. You don't know how to get to one.

• 36:11John Coogan?

  Yeah.

• 36:12Brad Gerstner?

  The hardest move in the world is going from zero to one. One to two is easier and two to three is easier yet. We're going to get all of these kids from zero to one. On this compounding journey, if you start with a thousand bucks and you say $50 a month, it's $50,000 at age 18. There's no reason we can't put every kid in America on that journey. And to celebrate our second 250 years, right, we're we're launching a natural, you know, we're going to launch this as a dividend for every kid in America. So I want to make sure that they all sign up, starting in 2027. The 3.7 million kids born in 2027, it will be automatic. Get your social security number, you get a Trump account.

• 36:54Brad Gerstner?

  Um, and then we just need to get every small, we're giving money to the, we have 80 kids. Uh, you know, to our, you know, roughly 35 employees, they're all going to get 500 bucks at the end of the year into their Trump accounts. I'm just going to QR the money. Uh, by my team into their accounts. You guys should do it for all the companies you're involved in.

• 37:12John Coogan?

  Yeah.

• 37:12Brad Gerstner?

  And really spread the word, small, medium, large business, realtors, restaurants, everybody can do this. And so we've created an open source platform of universal private ownership. Where the families have the title and they have the dignity, the dignity of savings. A 401k for life for every single American citizen, I think is a game changer for the country.

• 37:37John Coogan?

  Yeah. He did it. He did it. It was fantastic.

• 37:39Brad Gerstner?

  He fucking did it. Oh shit.

• 37:42John Coogan?

  No, I remember you, you, you talking about this and, uh, and you know, as, as, as much as respect as I have for you, uh, I put it in the, in the, it's too hard bucket, you know? I, I, I put it in the, it like, this is a thing that is just too hard for anyone, even, even the best. And fortunately it was not, which is fantastic to see. It's the ultimate white pill. So thank you. That's amazing.

• 38:05Brad Gerstner?

  It's a, we're, you know, it's still day one, but you know, we're off to a good start here and, um, you know, I think in the fullness of time, as the president said, we estimate over 15 years, it could transfer three to four trillion dollars of wealth from people who have it to the people who would otherwise have zero.

• 38:21John Coogan?

  Yeah.

• 38:21Brad Gerstner?

  Um, and, um, you know, the president said he thinks it's going to be his biggest legacy.

• 38:26John Coogan?

  Yeah.

• 38:26Brad Gerstner?

  Um, to me, I think it'll be more impactful in the fullness of time than social security. Because the difference is you actually own this.

• 38:34John Coogan?

  Yep.

• 38:34Brad Gerstner?

  You actually own, it's not a government program.

• 38:36John Coogan?

  Yeah. Yeah.

• 38:37Brad Gerstner?

  This is a private account and private ownership that can compound through your life.

• 38:40John Coogan?

  And you, and you have to imagine that, you know, if, if you get to that place where, uh, you know, there's, there's a whole new generation that's, uh, you know, becoming an adult, starting a family with 50, a hundred, $200,000, that's a down payment on a house. All of a sudden that can underwrite more building of houses because there's more buyers in the market. There's, there's a whole bunch of market forces that I think will knock on from this in 20 years that could be incredibly positive. So I'm, I'm extremely excited about it.

• 39:07Brad Gerstner?

  In, indeed. No, no doubt about it. It's a, uh, you know, you're gonna, you're gonna hear a lot of, a lot out of us over the course of the next several months, but it's, you know, uh, listen, I also should mention, I've got the best partner in the world on this, you know, Michael Dell.

• 39:20John Coogan?

  Yeah.

• 39:21Brad Gerstner?

  Joined me, uh, he and Susan joined me on, on, on this journey, really helped me over, to get it over the last one inch line,

• 39:29John Coogan?

  Yeah.

• 39:29Brad Gerstner?

  Uh, with the administration and then made the biggest philanthropic gift in history, 6.25 billion. Um, $250 to 25 million kids.

• 39:38John Coogan?

  Yeah.

• 39:38Brad Gerstner?

  And, you know, frankly, I think for Michael and Susan, they're just getting started. And I think their example that they've set for everybody else. Um, you know, if you have, if you, you, you guys look at the amount of wealth that's being created here in Silicon Valley. I mean, it's, it's, it's really, there is no historical precedent.

• 39:56John Coogan?

  Yeah.

• 39:56Brad Gerstner?

  There is no historical precedent. Um, and the fact of the matter, our charitable, our charities are not prepared or equipped. To take 10, 20, 50 billion dollars like and a lot of people want to give away this money during their lifetime or you know, within 10 years of dying.

• 40:11Jordi Hays?

  And targeted and targeted.

• 40:14Brad Gerstner?

  Right. And in a way, in a way that there's no.

• 40:16Jordi Hays?

  Tails up or down. It's like you can do the whole state.

• 40:20Brad Gerstner?

  Exactly.

• 40:20Jordi Hays?

  You can do your county. You could do a school.

• 40:23John Coogan?

  School. Yeah.

• 40:24Brad Gerstner?

  And there's not 30% overhead on the charity where somebody's getting paid $10 million and you know, all this stuff happens after you pass away. A hundred percent of it goes directly to the kid.

• 40:34John Coogan?

  Yeah. Charity was so vague for so long. It was like, great. Okay. You gave away half your money, but you're actually not transferring until you die. And then it's going to go into this charity that will deploy it later. And it gets so abstract that I think people, uh, all of those big donations that happened in like the previous era. Sort of fell on deaf ears and they weren't, didn't feel like they were moving the needle. And so this is just an entirely new way to do it. I love it.

• 40:56Jordi Hays?

  The chat is asking if you have any surf trips planned.

• 40:59Brad Gerstner?

  Ah, wow. I wonder who that's. I must be checking out my, uh, my Twitter picture, um, which by the way, was, uh, at the surf ranch.

• 41:07John Coogan?

  Okay.

• 41:07Brad Gerstner?

  With Ramondo.

• 41:08John Coogan?

  Oh, yeah.

• 41:08Brad Gerstner?

  And the picture actually is, some people think it's me. It's not me. That was my then 11 year old son.

• 41:15Jordi Hays?

  No way.

• 41:15Brad Gerstner?

  Getting barreled at the surf ranch because Ramondo was like telling him how to get into the barrel.

• 41:21John Coogan?

  That's awesome.

• 41:22Brad Gerstner?

  But I have to say, I'm 55 guys. I just had a birthday. I'm working harder than.

• 41:27John Coogan?

  Happy birthday.

• 41:28Jordi Hays?

  There we go.

• 41:28Brad Gerstner?

  I'm working harder than.

• 41:30Jordi Hays?

  Yeah. I feel like I just can't imagine you being like, yeah, now's a good time to take a surf trip. I feel like maybe a trip to surf ranch, but.

• 41:38John Coogan?

  Yeah.

• 41:39Jordi Hays?

  You gotta stay locked in.

• 41:40John Coogan?

  There's a lot of work to do.

• 41:40Brad Gerstner?

  We, we ought to get, we ought to get together and do that. By the way, I'm, I'm currently signing up somebody who's going to, uh, adopt all the kids in Los Angeles. We've got San Francisco already covered. We've got Oakland already covered. Um, and, uh, we're going to announce some big things here in the state of California. I'm not giving up on California.

• 41:58John Coogan?

  Yeah.

• 41:58Brad Gerstner?

  Right. We're going to defeat, we're going to defeat the unconstitutional taking tax.

• 42:02John Coogan?

  Yeah.

• 42:02Brad Gerstner?

  That some people call the wealth tax or the billionaire tax. Like this attack on success, uh, you know, trying to divide wedge, drive wedges between Americans. We're uniting people with the Trump accounts, with the Invest America accounts. We're raising the floor and getting everybody into the game. And this whole idea that we're going to demonize success and drive Elon out of the state, et cetera. Uh, shout out by the way, to my junior, uh, uh, son, Lincoln Gerstner. Who published his first paper this week and I show up at home and it's on the economic impact of tax policy in California. I show up at home and he said, hey dad, I finally, you know, posted that that paper I was writing. He's doing it with Josh Rowe, the incredible

• 42:45Brad Gerstner?

  professor over at Stanford. He's and then he says to me, he's like, has Marc Andreessen ever retweeted you?

• 42:51Jordi Hays?

  (laughing)

• 42:52Brad Gerstner?

  And I said, no, I was like, no, I don't think so. And he goes, I think he retweeted me. And I was like, no, he definitely didn't retweet you, but Marc did, so shout out to Marc.

• 43:04Jordi Hays?

  That's awesome.

• 43:05Brad Gerstner?

  And that's, you know, I think that we are, what people, there's a lot of despondency in California.

• 43:10Jordi Hays?

  Yeah.

• 43:11Brad Gerstner?

  I'm going to take a contrarian position here. Spencer Pratt's going to be the new mayor of Los Angeles. The wealth tax will be defeated. We will pass the Retirement and Personal Asset Protection Act as a referendum in California, which will prohibit people from stealing your retirement money or your personal assets. That will get passed, okay? That will send a shocking message to the rest of America. The rest of America thinks that California is as blue as it gets. It turns out California is pretty purple, right? And I think that common sense initiatives are going to, you know, reassert themselves in, you know, in the election in November. And I think it's great because we're the

• 43:55Brad Gerstner?

  fourth largest economy in the world. I know some of my friends moved out and said, listen, California's got it coming to them. My own view is this, as California goes, so goes the country. We cannot cede California. It is where we're going to battle for the best ideas that are consistent with the founding of the country. And we're going to, you know, win on those ideas. And so I think we're seeing a lot of progress. Shout out to Sergey and Building Better California and the incredible work that they did to get us moving in the right direction.

• 44:22Jordi Hays?

  Fantastic. Well, we kept you way too long. Thank you so much for having us on and hanging out. And excited for your next project. Yeah.

• 44:30Brad Gerstner?

  How much did you sell, how much did you sell this for?

• 44:32Jordi Hays?

  Let's go for, let's go for, let's go for a serve. Yeah, we can only say it far away from the microphone.

• 44:38Brad Gerstner?

  I'm going to turn this into a little BG2 and turn the tables on you guys. I need to get some more, some more the other way. It's great to see you. Have a great weekend.

• 44:45Jordi Hays?

  Great to see you, Brad. You're the man. We'll see you, Brad.