BG2Pod: "AI Bubble, Stablecoin Boom, and Runnin' Down a Dream"

Hosts: Brad Gerstner & Bill Gurley
Date: October 14, 2025

Episode Overview

In this episode of BG2Pod, Brad Gerstner and Bill Gurley reflect on two years of discussing technology, investing, and capitalism from an analyst’s perspective. Bill announces that he’ll step away from co-hosting to focus on new projects—including his upcoming book "Running Down a Dream." The pair dive deep into three major themes:

• The reality behind the so-called AI “bubble,” with scrutiny on circular revenues and massive CapEx
• The regulatory and competitive future of AI in the US, especially as states begin to pass their own laws
• The dramatic policy shift fueling a stablecoin boom and the broader implications for US payments and innovation

The discussion is rich in context and full of candid insights, with timestamps provided for easy navigation.

Key Discussion Points & Insights

1. Farewell: Bill Steps Back to Pursue New Passions

• [03:35 – 06:30] Bill Gurley announces he will step back from regular co-hosting duties to focus on writing, research, and policy work (“life begins where your comfort zone ends”).
• He reflects on the unexpected popularity of the pod:

  “I’ve been chased down in international cities... they had no idea what I looked like, but the minute they heard my voice, they're like, oh, you're the guy from the podcast.” – Bill [05:32]

• Bill shares how participating helped him “stay sharp and give back” and expresses some guilt at disappointing listeners.

2. Is the AI Sector in a "Bubble"? Revenue Quality, CapEx, and Red Flags

Circular Revenues & CapEx Concerns

• [06:30 – 15:22]
• Discussion begins with the recent OpenAI-Broadcom chip deal, part of a $1T incremental capex wave.
• Bill explains red flags around circular or “round-tripping” revenues, warning of historical precedents (Enron, WorldCom):

  “Any AI you talk to would know what you mean if you said circular revenues ... that’s just what historically has become the best practice and way to think about these things.” – Bill [07:36]

• Details:
  • Original Microsoft/OpenAI cloud credits deal set the precedent—an in-kind swap inflating revenues [10:18].
  • Other tech giants (AWS, Google) have followed similar practices, intensifying competition and risk.

Distinguishing Normal vs. Sham Transactions

• Brad and Bill break down the spectrum between legitimate business relationships and sham transactions with no real underlying demand. They spotlight grey areas, especially when deals fund purchases that wouldn’t happen otherwise.
• Bill points to troubling off-balance-sheet risk, like Meta agreeing to guarantee a debt on a facility they don’t own [11:54].

A “Highly Competitive Dynamic” & Over-provisioning Risk

• “I think it increases the chance that we go over the top, that we end up over provisioning ... you’ve just created more virtual leverage on the whole system...” – Bill [16:24]

• Example: Nvidia agreeing to buy unused CoreWeave compute—obfuscating true market demand [16:53].

3. Are We Overbuilding AI Infrastructure?

• [17:44 – 25:00]

• Brad brings data: $3T in CapEx expected over five years (~60 GW of data center capacity).

• Context for AI chip sales: Nvidia's forecasted growth from $200B to $350B/year in revenue [19:10].

• They agree that multiples are not yet at "bubble" levels; the majority of spending is from massive, cash-generating hyperscalers.

• Howard Marks’ view:

  "Multiples are too low for this to be... you can’t be on bubble watch if the multiples aren’t high enough.” – Bill, citing Howard Marks [21:13]

• On CapEx rationality:

  • The market currently tolerates heavy AI/data center capex (unlike Meta’s Reality Labs misadventure), as the utility is clearer [24:20].
  • The “race condition” (OpenAI locking up compute) could pressure others, possibly triggering overcapacity.

4. AI Regulatory Patchwork: State Laws vs. Federal Preemption

• [26:25 – 35:31]
• Brad flags Colorado’s AI Act and California’s SB243 as examples of state-level overreach.

  “If the chatbot provides information that’s used to discriminate, then there’s liability back at the frontier model level… I shit you not, you can’t make this stuff up.” – Brad [29:44]

• Bill’s concern:

  “If we implement 50 different state rules that these companies have to jump through … there is zero chance that's not going to create mud and slow down the US players.” – Bill [31:31]

• They agree this patchwork is especially harmful to startups (lacking legal resources) and argue for immediate federal preemption.

5. The Stablecoin Boom: Changing the Game in US Payments

A Policy Sea Change

• [35:31 – 45:06]
• Brad shares data:
  • Stablecoin supply: over $300B (from near-zero in 2021)
  • Over $18T settled monthly
  • Circle and Tether each issuing $15B/month, becoming major US Treasuries buyers [35:53]
• Bill shifts from skeptic to supporter:

  “I'm applauding the innovation. I'm jumping on board the crypto train and I hope the incumbents aren't able to strangle this thing in Washington.” – Bill [45:01]

• They discuss the failure of incumbents to modernize with real-time payments (e.g., comparing to Brazil's PIX, UK Faster Payments, etc.).
• The Coinbase-Circle 4% APY stablecoin offering is seen as disruptive (“the rails are there, they're ready, and it's working” – Bill [38:13]), but incumbents are already maneuvering to slow things down.

Regulatory Capture and US Competitiveness

• Regulatory capture has stunted real-time payments in the US; Stablecoin may finally shortcut that.
• On how the US is investigating Brazil’s PIX for “undercutting” Visa/Apple:

  "That’s the most absurd thing I’ve ever heard ... there’s no one that needs less protection than these guys." – Bill [42:34]

Future of Digital Money Networks

• Big-tech implications: Amazon, Meta predicted to re-enter stablecoin/payment innovation given their network effects.
• Lessons: Cheaper, faster rails lead to more and better innovation; startups thrive on open systems.

6. Running Down a Dream: Bill Gurley’s Book & New Direction

A Blueprint for Careers of Passion

• [45:08 – 58:25]
• Bill's inspiration: Patterns in biographies; turned into a lecture that went viral (“people have come to me and said that it’s changed their lives” – Bill [50:57]).
• The book structure alternates profiles (life stories) and actionable tools.
• Core message—don't let fear or comfort zones dictate your career:

  "Life is a use it or lose it proposition." – Bill [56:39]

• Advice inspired by Jeff Bezos’s regret minimization framework:

  "Over time, we are much more likely to regret the chances we didn’t take than the chances we did." – Bill, citing Daniel Pink [55:08]

Relevance to Today’s Anxiety About Work

• Only 23% of people are engaged at work (Gallup); 6 in 10 say they'd start over if they could.
• The book aims to relieve, not increase, pressure on young people and parents.
• Planned release: late February 2026. Brad will host a launch event [56:56].

On Tackling Big Societal Issues Next

• Bill intends to focus on “big problems”—regulatory capture, health care, nuclear, etc.—by applying investigative analysis (“learning expeditions”).
• The goal: Help shift public opinion ("meme flip") as with nuclear.

Notable Quotes & Memorable Moments

• “Life begins where your comfort zone ends.” – Bill [05:45]
• “Any AI you talk to would know what you mean if you said circular revenues … because someone has used it in the past in a way that, that wasn’t good.” – Bill [07:42]
• “I’ve talked about, you know, to see the Mag 7 go from being massive cash producers to where they're, many of them are taking the majority of their free cash flow in capex. It’s totally new.” – Bill [21:33]
• “If we implement 50 different state rules … there is zero chance that’s not going to create mud and slow down US players.” – Bill [31:31]
• “There’s no one that needs less protection than these guys [Visa, MasterCard].” – Bill [42:34]
• “Life is a use it or lose it proposition.” – Bill [56:39]
• “Over time, we are much more likely to regret the chances we didn’t take than the chances we did.” – Bill, citing Daniel Pink [55:08]

Timestamps for Key Segments

• Bill steps back from pod: [03:35 – 06:30]
• AI Bubble/Circular Revenue: [06:30 – 17:44]
• CapEx & Overbuilding: [17:44 – 25:00]
• AI Regulation, State vs. Federal: [26:25 – 35:31]
• Stablecoin boom & US payments: [35:31 – 45:06]
• Running Down a Dream (book): [45:08 – 58:25]
• Final reflections, next projects: [58:25 – End]

Episode Tone

Conversational, candid, energetic, and intellectually curious. Brad is enthusiastic, probing, and optimistic; Bill is analytical, thoughtful, and honest—frequently quoting others and referencing the weight of big decisions.

Concluding Thoughts

Bill and Brad deliver an episode packed with deep analysis of seismic trends in technology, capital flows, and fintech. They call out regulatory and financial red flags, celebrate disruptive progress (especially in payments), and end with personal mission statements about creating impact outside the familiar. Above all, the episode serves as both a fitting send-off (for now) for Bill as co-host and a rich resource for those navigating tech’s future.

Further Resources:

• [Preorder “Running Down a Dream” – Bill Gurley]
• Charts on AI CapEx and Mag 5 spending (as referenced)
• Info on Colorado AI Act, SB243
• Visa Stablecoin Activity Dashboard

(See show notes for links.)