Michael Dell – Invest America Act Becomes Law, AI Talent Wars, Compute Demand, Market Update | BG2

Summary

BG2Pod Episode Summary: "Michael Dell – Invest America Act Becomes Law, AI Talent Wars, Compute Demand, Market Update"

Release Date: July 10, 2025

In this engaging episode of BG2Pod, host Brad Gerstner moderates a dynamic conversation with venture capital heavyweight Bill Gurley and tech titan Michael Dell. The discussion spans a wide array of topics, including the groundbreaking Invest America Act, the escalating AI talent wars, soaring compute demand, and a comprehensive market update. Below is a detailed summary capturing the essence of their dialogue.

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1. Introduction and Celebrating Michael Dell's Achievements

Brad Feld opens the episode by celebrating Michael Dell's remarkable journey from founding Dell Technologies in his dorm room over four decades ago to becoming a pivotal player in the AI landscape. Feld highlights Dell's significant contributions, including spinning off VMware, acquiring Broadcom, and his philanthropic efforts with his wife, Susan.

Notable Quote:

• Brad Feld [00:28]: "It's just going to be super easy for anyone to add to those accounts. I think it's also a chance to teach every child about financial literacy and about capitalism and free markets."

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2. The Invest America Act: A Revolutionary Step in Capitalism

The core of the conversation revolves around the recently signed Invest America Act. This bipartisan legislation establishes private investment savings accounts for every child born in the United States, seeded with $1,000 in the S&P 500. These accounts can be augmented by parents, companies, and philanthropists, growing until the child turns 18.

Key Details:

• Seed Funding: $1,000 per child at birth.
• Eligibility: All children born after January 1, 2025, with existing children under 18 eligible for contributions.
• Growth Strategy: Accounts are invested in the S&P 500, compounding over 18 years.
• Philanthropic Opportunities: Organizations and individuals can target contributions by zip codes to support low-income areas.

Notable Quotes:

• Brad Feld [09:00]: "We're gonna make it as frictionless as Venmo-ing this money. Apple paying money in."
• Michael Dell [13:16]: "This is a platform for unlocking dramatic compounding and savings in the upside of capitalism from birth."

3. Enhancing Financial Literacy Through Education

Bill Gurley emphasizes the synergy between the Invest America Act and financial literacy education. Partnering with organizations like NextGen Personal Finance, there's a push to incorporate financial literacy into high school curricula, ensuring that children understand the value and management of their Invest America accounts.

Notable Quote:

• Bill Gurley [22:51]: "From 2021 to 2025, in only a four-year window, we've gone from 11 states to 29 states."

4. Addressing the Budget Deficit and Legislative Perspectives

Brad Feld and Michael Dell delve into the financial implications of the Invest America Act amidst ongoing concerns about the national budget deficit. Feld argues that the Act's cost, approximately $3.7 billion annually, is negligible compared to other expenditures like foreign aid. Additionally, projections suggest that the Act could become revenue-neutral over time through capital gains taxes.

Notable Quotes:

• Brad Feld [25:24]: "3.7 billion is about what we contribute. We give to Afghanistan and Nigeria in terms of foreign aid every year."
• Michael Dell [27:45]: "The government shouldn't be spending what it's spending relative to what it takes in."

5. The AI Talent Wars: Meta Leads the Charge

The conversation shifts to the fierce competition for AI talent, spearheaded by Meta's unprecedented hiring spree. With offers rumored to reach $75-$100 million in annual pay packages, Meta's aggressive strategy raises questions about industry sustainability and cultural implications within companies.

Key Points:

• Meta's Strategy: Massive investment in AI talent to spearhead their AI division.
• Industry Impact: Challenges for startups and established companies in competing for top talent.
• Cultural Concerns: Potential disparities in employee compensation and organizational cohesion.

Notable Quotes:

• Brad Feld [37:04]: "Is this a bubble territory? Does it feel as a company that is kind of accurately reflecting?"
• Michael Dell [41:58]: "They have an incredible business that is aided by these advancements in a big way."

6. Productivity Gains from AI: Bigger than PCs and the Internet

Michael Dell confidently asserts that the productivity gains from AI will surpass those experienced from personal computers and the Internet. He emphasizes AI's potential to transform knowledge work, expand economic prosperity, and drive significant productivity improvements across industries.

Notable Quotes:

• Michael Dell [49:33]: "Oh, it's far bigger. It's far bigger. Yeah. I feel 98% confident that it's far bigger than the PC."
• Brad Feld [50:51]: "It really is a platform for unlocking dramatic compounding and savings in the upside of capitalism from birth."

7. Dell's Leadership in AI Infrastructure and Compute Demand

Dell Technologies showcases its pivotal role in the AI boom, with their server division experiencing explosive growth. The company reported a 58% year-over-year increase in its server networking business and significant AI server orders, positioning Dell as a leader in providing the necessary infrastructure for AI advancements.

Key Statistics:

• AI Orders: $12.1 billion in the first quarter.
• Annual Shipments: $10 billion in AI servers last year.
• Backlog: Over $14 billion pending orders.

Notable Quotes:

• Michael Dell [54:07]: "We're deploying these systems that will produce, you know, deliver more than 50 trillion tokens per month."
• Brad Feld [56:55]: "You have an incredible business that is aided by these advancements in a big way."

8. Market Update and Economic Outlook

The trio discusses the current state of the stock market, noting significant disparities among major indices and individual stocks. While the NASDAQ has rebounded impressively, other indices like the S&P 500 and sectors such as Tesla and Apple show mixed performances. Michael Dell remains optimistic about the long-term growth of US markets, attributing it to the transformative impact of AI and the sustained productivity gains.

Notable Quotes:

• Brad Feld [65:59]: "The market is estimating that the next move is down. Whether we're gonna have one or two rate cuts at the end of the year is the question."
• Michael Dell [66:43]: "Given where we sit today, I would bet they're higher."

9. Policy Concerns: Export Controls and Skilled Immigration

The discussion touches upon the implications of export controls on AI technologies and the importance of skilled immigration. The guests express concerns that restrictive policies could hinder the global competitiveness of American AI innovations and the broader technological leadership of the United States.

Notable Quotes:

• Brad Feld [72:20]: "It's critical that Washington follows through and that we accelerate diffusion around the world of the entire American AI stack."
• Michael Dell [73:12]: "We have to come up with more intelligent ways to restrict access to the most advanced technologies."

10. Conclusion: Balancing Innovation and Policy for Future Prosperity

Brad Feld wraps up the discussion by emphasizing the need for the United States to maintain its leadership in technology by supporting initiatives like the Invest America Act and fostering an environment conducive to AI innovation. He underscores the importance of balancing government intervention with Silicon Valley's entrepreneurial spirit to ensure continued economic growth and societal advancement.

Notable Quote:

• Brad Feld [77:00]: "If we're allowed to compete, our best days lie ahead. If we get in the way, Bill, like you talk about, then I think we can upend our advantage."

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Final Thoughts

This episode of BG2Pod offers a comprehensive exploration of critical issues shaping the intersection of technology, economics, and policy. Michael Dell's insights into the Invest America Act and AI's transformative potential are particularly noteworthy, providing listeners with a nuanced understanding of how these developments could redefine America's economic landscape for generations to come.

Transcript

[Brad Feld]

Are the productivity gains from this going to be as big or bigger than what we saw from personal computers and the Internet?

[Michael Dell]

Oh, it's far bigger. It's far bigger. Yeah. I feel 98% confident.

[Brad Feld]

Hey, guys, great to see you both. Bill, maybe, I don't know, you're up in Tahoe or something. And we're thrilled to have one of our great friends, Michael Dellon, to chop it up with us. Happy 4th of July, you guys. Most of you know Michael. He's built, obviously one of the most iconic technology companies, starting in his dorm room, I don't know what, 40 years ago. Michael, I think you just had your.

[Michael Dell]

40Th anniversary 41 years ago.

[Brad Feld]

41 years ago. And now a major player in AI. You spun off VMware, of course, and now you're a major owner of Broadcom. And Dell remains $100 billion business. I think you own, like Larry Ellison, you own a lot of the business, maybe half of the business. And it's one of the largest builders of AI servers on the planet. And obviously, in addition to that, you and your incredible wife Susan have an amazing foundation. You do great work in Texas and around the country. I saw that you just contributed to the disaster relief. What a traged in Texas. And so kudos to you both for all the good work you do on so many issues, but particularly in the state of Texas. And then, you know, of course, it was great to have you and Susan as partners on Invest America. I know we're going to talk about that today, and everybody should run out and read your book. Play nice, but win. I'm going to just ask you.

[Bill Gurley]

I would recommend they listen to it because Michael took what I understand to be a very painful process for an author to read their entire book. But it's Michael's voice and the inflection and the like. You get nuances I don't think you would get just with the writing.

[Michael Dell]

Well, thank you for saying that, Bill, and appreciate the kind introduction, guys. Look, I mean, I think if you're going to take the time to write a book, which is a major endeavor, if you really do it yourself and do it right. I did have somebody helping me, by.

[Bill Gurley]

The way, so I'm not going to.

[Michael Dell]

Take full credit for it. I think you should take the additional time to record the audiobook because you can display emotion, intonation, and really tell the story in your own voice. And it's a powerful way to convey thoughts and emotions at the same time. And I love audiobooks. I love going outside and walking, hiking and turning on a good audiobook is a great way to do it totally.

[Brad Feld]

Well in the spirit of storytelling. Michael, do you remember when you first met Gurley?

[Michael Dell]

Yeah, I do remember when I first met Gurley. This was in the 90s and Bill had written this research report that was super thick. And I'm reading this report, I'm like, how the bleep, bleep, bleep. Does this guy know more about our business than we do? It's like, what? We must be totally screwing up here. And he had uncovered a whole bunch of analysis and thoughts about our business. And we were so busy, kind of distracted by growth, that we had missed a few things. And Bill shined a massive light on that and it was super helpful. So I became a fan instantly of his work and have been a fan ever since.

[Bill Gurley]

Brad, that was 32 years ago.

[Michael Dell]

Even though when I read the report, I was like, damn, we should have figured this out.

[Bill Gurley]

This is 32 years ago. I was 28, Michael was 29 and running a public company. And I've always cherished the fact that Michael's a year older than me. So I always have time to catch up.

[Michael Dell]

It's great to be here with the kids.

[Brad Feld]

Bill, tell us just a second about. Because the 90s, I think, has some parallels to the period that we're living in now. So Dell was growing incredibly fast, obviously building low cost, high quality computers. What inspired you to start covering Dell.

[Michael Dell]

And then.

[Brad Feld]

What led you to these insights? Did you just focus on that company? Was this, you know, a breakthrough piece of work for you?

[Bill Gurley]

Well, Michael's heard this before, so I'll hopefully won't bore him. But I had worked in the PC industry. I spent over two years at Compaq in Houston. And you know, interestingly, I think being inside of Compact, we had a view of Dell that wasn't as respectful as it should have been. And once I got outside and was able to look at the numbers in a different way, I was able to see things more clearly. But, but the gentleman that, that made this all click in terms for me was Michael Maubison, who you know of, but he had taught me to look at return on invested capital. That's part of what Michael was referring to. The company had insane, you know, balance sheet turnover in a way that the, the cash flow relative to the earnings was really high and the roic was 10x anyone else in the business. And. Yeah, and then for some reason, probably just youth, I went and did a strong buy on the initiation, which Michael made a bunch of his employees rich. I, I ended up making a bunch of the salespeople rich there at CSFB just as a result of, of riding on their coattails. But it was, it was.

[Michael Dell]

The 90s were fun. The 90s were fun. I mean, you know. Yeah. Stock went up 130,000%. We had seven stock splits. Four.

[Brad Feld]

What was the value of the company when you went public? What was the total enterprise value or market cap when you went public, Michael?

[Michael Dell]

It was like, it was like $150 million or something like that.

[Brad Feld]

I mean, see, that's, that's the beautiful thing. That's like, I mean, that is a series A in venture capital.

[Bill Gurley]

It went up 100x after this initiation, like in the public markets.

[Michael Dell]

Yeah. So, Bill, I just need you to recommend our stock one more time.

[Bill Gurley]

And then there was an element that I think is super interesting. Like that was also part of what Michael was referring to. But their inventory turns were so damn high compared to the rest of the industry. So they were building to individual customer order. They weren't building to inventory. They're building to demand. And because component prices fell so much, we calculated they got a 200 basis point gross margin advantage just by having the FIFO.

[Brad Feld]

Q. Oh, my goodness. Yeah, exactly. Just in time.

[Michael Dell]

This was a structural competitive advantage, by the way. Still is. So the point is that the cost of the materials are always coming down. And if your competitor has, let's say, 90 days of inventory in a series of queues with distributors and dealers, and you have six days of inventory, which we actually had for about seven years in a row, six days of inventory. Think about that. It's a structural competitive advantage because you have fresher inventory, you have fresher costs, and of course, you don't have all that capital tied up. And so your, your return on capital is essentially infinite, Especially when you're paying your suppliers on a period longer than your customers pay you. And so you have a negative cash conversion cycle, which, which we still have typically around negative 50 days cash conversion cycle.

[Bill Gurley]

That's powerful.

[Michael Dell]

It's a beautiful thing.

[Bill Gurley]

Yes, it is. Well, let's transition from 32 years ago to the present.

[Brad Feld]

Cash is king.

[Michael Dell]

Everything else is an opinion.

[Bill Gurley]

No, no doubt, no doubt. So. So you two just had a big win with this Invest America program that was just announced as part of the Big Bill. And I know, I know that Brad, this was your baby and you spent a ton of time on it, But Michael came on board and helped out as well. So why don't you tell everyone the details? We've talked about it before, but tell them the details of what landed.

[Brad Feld]

Yeah, thanks. And, you know, I remember last 4th of July, we were talking about this bill, and I was sitting right here, and honestly, I thought the chance of getting this passed into legislation was maybe 10% at best. And we had some good fortune. As you know, the legislation was called the Invest America Act. It was a bipartisan, standalone bill, and it ended up like a lot of other pieces of legislation, getting subsumed by the reconciliation bill. Right. So a lot of these things got packaged together in this one bill. And of course, it was signed into law on July 4th down at the White House. I've been at this four years. I tried to get it done under Biden, but the stars just aligned in this moment. And Michael was pretty early to get on board and support this. Joined the CEO Council for Invest America, but played a critical role with the President to help get it into the reconciliation bill over the course of the last 60 days. But let's just talk about exactly what it means now that it's become law. So I think of this as a pretty significant evolution in the social contract. It creates private investment savings accounts, privately owned for every child at birth, seeded with 1,000 bucks in the S&P 500. So parents, companies, philanthropists can add money, anybody can add money to these accounts. You can't take the money out of the accounts. It just compounds in the S&P 500 until you're 18 years old. So we will spend the next year putting the program in place. It has to be launched under the terms of the legislation by July 4, 2026, the 250th birthday of America. And basically, we got it expanded so all kids under the age of 18, that's 65 million kids, are eligible. And I give a lot of credit to Senator Cruz, who fought to expand the the pool of eligibility here. So what that means is that they can open up an account, but only children born after January 1, 2025, get the thousand dollars from Treasury. Right.

[Bill Gurley]

The others will have an account that someone else could put money in on.

[Brad Feld]

Their behalf, and they can add money, too. And there are a lot of advantages for their parents adding money for companies, adding money to it. So it makes a lot of sense. And for Michael and I, I think the key performance indicator here is if we're having this conversation a year from now, we want to have 50 or 60 million kids signed up. Now, of course, if your child is born after July 4th of 2026, then they're going to automatically get an account set up when they get their Social Security number, and they will automatically get the thousand dollars. But we have this one time group, all kids under the age of 18. We're going to have a big campaign to get all those folks signed up over the course of the next year. And I guess for me, I was reflecting on this over the course of the last few days, and at a time when you have an avowed socialist like Mamdani winning the primary in New York, it seems like the Invest America act is really just the exact opposite. You're both trying to attack the problem of the wealth gap, but this is by getting everybody into the game of capitalism, making everybody actual owners in the upside of America's success, rather than resorting to price controls, attacking businesses and success, and creating really more dependency on government. So I think we're at this critical crossroads in America, and I think the Invest America act comes at an important point in time. I think a lot of people think of it like a 529 account bill, but I think that dramatically underestimates what this is. This is a lifetime investment account. So that can compound over the course of your life. If you start with $1,000 and you add $750 per year, at 18, that's worth $50,000. At 30, that's worth $170,000. And at 50, it's worth a million dollars. So it really is a platform for unlocking dramatic compounding and savings in the upside of capitalism from birth.

[Michael Dell]

And.

[Brad Feld]

And it wouldn't have happened without Michael.

[Michael Dell]

Well, and Brad, look, you deserve 99.9% of the credit, so I'm going to give it to you. You really drove this thing passionately for several years, and it's amazing that it got done. I do think you'll see many companies provide matching contributions, and a number of companies have already said they're going to do that. And it'll be like a benefit. Come work at our company and have a kid, and your child will get this. And it's just going to be super easy for anyone to add to those accounts. I think it's also a chance to teach every child about financial literacy and about capitalism and free markets. And, you know, look up in 15 or 18 years, and you've got 70 million kids with these accounts. I also think you're going to have philanthropists, and Susan and I will definitely be a part of that that will say, hey, you know, this is a really good way to get money directly to the next generation in a way that it's going to compound and have a difference in their life. Our foundation has studied this very carefully, and we believe it's worthy of a significant contribution. And Brad's been working with the Treasury Department and others to set this up so that any philanthropist would be able to say, hey, here's a zip code, here's a county, here's a state. Here's a group of kids that I'd like to help. I don't know who they are exactly, but I want to help them, and I want to help their future. I think you'll see a lot of philanthropists get very excited about this. I've had a discussion with a number of them, and this could be a major platform for philanthropy in our country.

[Bill Gurley]

And just to put a sharper lens on that, Michael, they might back every kid in a state or everyone in the nation on a year or.

[Michael Dell]

Yeah, adopt the state. Adopt a series of zip codes. I think, again, it'll be a platform for philanthropy.

[Brad Feld]

Yeah, I think of it, Bill, in some ways, like the Giving Pledge 2.0. I mean, we've had massive wealth creation in this country. Like, unprecedented wealth creation in this country. Right. But one unique feature of America that I don't think there's any other civilization in history that you can point to, okay, that has this character, which is the super wealthy in America, by and large, want to give away the vast majority of their wealth during their lifetime or shortly after they die. I certainly know that Michael's in that group. Okay, think about this. In Europe, right, they invented generation skipping trusts. It was about coming up with legal mechanisms for creating dynastic wealth so as to not give any of your money away. Okay? And we have a culture in this country where people want to give away large sums of money. The challenge is the charitable infrastructure has not necessarily scaled to meet the needs of people who want to give away billions of dollars at a time. And I said to. I asked Michael and Susan a question over a year ago. I said, you know, if you wanted to give away a lot of money in the state of Texas today, like, how would you do it directly to kids? And there's not a good answer. Right? Because there's not a financial infrastructure in place that has a set of rules associated with it. You know, where you could have somebody like the Treasury Department, we're going to have a pooled Invest America account at treasury where Michael and Susan or other philanthropists could give money to this pooled account and. And it would be dispersed to all these kids. Accounts subject to all the rules and regulations of use so the kids can't take the money out, but they can see it compound. That simply does not exist today. It's impossible to do that at scale today. And at the long end of the curve, if you think about my family as an example, we do a lot with the East Palo Alto school district, some of these low income school districts in the state of California where I can just adopt that school and say for every kid in that school, I'm going to give $1,000 a year to. So this unlocks, I think, massive creativity, Michael, around philanthropy. And that's what I mean. We know in Silicon Valley if you build an open platform, a million applications can bloom, a million ideas can be built on top of this. I mean, we've heard from states that want to add $10,000 for every kid born in the state if they graduate from high school in the state. So. So I think we haven't even scratched the surface of the beautiful competition and the beautiful philanthropy and the long tail of philanthropy churches and parents and friends that will be able to give to these accounts. And so our job is to make sure that we make it as frictionless as possible, that we work. And that's one of the core things that we're doing here.

[Bill Gurley]

When you're describing those accounts don't solely take money at the initiation, they can take money all along the way, which is how you could support a school or something like that.

[Brad Feld]

Correct. So the way it works bill, is and all of this, I mean, Michael and I, I think learned a lot about the, the, the act of, of legislation going through this because you know, it's one thing to get it put in the reconciliation bill, it's one thing to get high level buy in. But just in the last two weeks we were negotiating the nitty gritty. I think this was 23 pages of tax, you know, changes in the reconcilia with the Invest America act so families can give, or recipients can receive up to $5,000 a year from family, from friends, you know, et cetera. Companies can give $2,500 a year per recipient, tax free. So pre tax. So Dell Corporation, for example, has raised their hand and said, you know, we intend to give to the kids of our employees. So has Uber, so has Nvidia, so has Oracle, so has Salesforce, so has T Mobile, so has iheartmedia. So you know, it's an incredible list that has already come together. And we're gonna go to the business roundtable, we're gonna go to the Largest companies in America. And we're gonna ask them all to do it. Now, we're not telling them the amount they need to give. All we're saying is give an amount that's appropriate to your company and to your employee base. I just heard from Tony yesterday at Doordash. He retweeted something about this. Sam Altman I heard from over the weekend. Once he heard it was passed, retweeted something about this. So I think the business enthusiasm is going to be very big and substantial. But remember, the most powerful givers are moms and dads, grandparents, friends, birthdays and bar mitzvahs. And all of those dollars ultimately don't really generally find a home for savings and compounding. And we're going to make it as easy as Venmo Ing in this money. Apple paying money in. And you know, one of the studies that we did that was really profound in partnership with the Milken Institute, they found a whole host of things. One was that low income cohorts tend to save at about the same rate as higher income cohorts if they have an account. The problem is that nobody in a low income cohort has a savings account or investment account. So I think you're going to see a lot of contributions by all sorts of folks once we set this up. We also learned that once we do this, kids are more likely to graduate from high school and college, more likely to start a business, more likely to buy a home, less likely to be incarcerated. So I think the societal ROI of this will be really large over time.

[Bill Gurley]

And it sounds like you're going to try and find a way where if someone wanted to donate, Michael mentioned zip codes, but some other way that if people wanted to just target the low income, most needy, that there'll be a way to do that. Is that right?

[Brad Feld]

This was a really important issue to Michael and to myself. And I'll just give you a bit of a window into the weeds. We tried to get household income as one of the targeting mechanisms and we weren't able to get bipartisan agreement on that, but we were able to get a proxy for that, which is you can target by zip codes. So you can target down to groups of 5,000 or more by zip code. And we think through that geo targeting. So, for example, Michael could target the Rio Grande Valley, I could target East Oakland. So there are zip codes that you could target that I think certainly include a predominance of lower income households.

[Bill Gurley]

That's fantastic.

[Brad Feld]

Hey, Bill, I know you've been involved in financial Literacy and education for a long time. Tell us about the organization you're partnering with and perhaps as kind of a potential partnership for Invest America.

[Bill Gurley]

Yeah, my wife and I have been giving to an organization called NextGen Personal Finance. There's a gentleman there named Tim Ranzetta who, who has just been pushing for financial literacy in high schools. So we can add a link in here, but from 2021 to 2025, in only a four year window, we've gone from 11 states to 29 states. And Texas just passed this very recently, a few weeks ago. And so the idea, which sounds obvious, it's actually quite shocking that it's not true, is just to add a semester of financial literacy to the high school curriculum. We send kids out to get jobs and we haven't taught them how credit cards might take advantage of them and how to build a monthly budget and how to use a checkbook and how to plan. And so I think these two things complement each other quite a bit. But that's another movement that it's nice to see gaining momentum simultaneously with this one.

[Brad Feld]

Yeah, you know, I talked to Tim. Texas just became, you know, like you said, 29th state, I think, to require a semester of financial literacy education. And, you know, some people said, you know, the Treasury Department, Invest America, they're not going to own the financial literacy. What? What? Again, I think when you create a platform of ownership now, it makes all of these financial literacy programs and organizations across the country just way more effective. Right. Because when you're talking to a kid who actually you say, open up your Invest America account on your phone. Let's talk about how you got $12,000, $14,000 into that account. Let's look at how it's compounded. Let's talk about what it means to own the companies that are listed there, what it means to be a shareholder. I think you just have a much more engaged student. Right. Because today 95% of those students don't own anything. And they look at their parents and their parents don't really own things. And so it's a lot harder to get motivated to learn about something when you don't think you're going to have the prospect of ownership. There are so many great organizations like Tim's out there, and I look forward to seeing how they take this platform and run with it to turbocharge their own efforts.

[Bill Gurley]

Brad, I know you wanted to mention the budget deficit and, and the funding for this program and put it in a little bit of perspective, just with all the talk and concern about how big the budget deficit is?

[Brad Feld]

Yeah, I mean, listen, you know, we've had a, a huge debate among our, our, our friend group about this. And, you know, and some of my friends were even critical that, you know, this is part of the problem, if you will. So, you know, to break this down, the max cost of this is 3.7 billion a year. We have 3.7 million kids born every year. If you give them each $1,000, that's 3.7 billion. So just to, you know, kind of put that in context, 3.7 billion is about what we contribute. We give to Afghanistan and Nigeria in the terms of foreign aid every year. So I think one of the things as a country we just have to ask is about priorities. Is it more important to give every kid in America a private investment account, a little seed from birth, and get them on the right track, or to give $3.5 billion to Afghanistan, Nigeria? And I think those are the type of choices we're going to be forced to make. And I'm not saying that the dollars going to Afghanistan, Nigeria are wasted, but we make these decisions every single day in our budget. And so for me, this is, you know, that's one angle. The second angle is just as a percentage of our national revenue. This is 1/100 of 1% of our national revenue. So it's pretty inconsequential in terms of the overall budget. But the final point on it is, as you've heard me argue, according to the studies that were done on this, this will actually be revenue contributing 20 to 30 years out because the taxes you have to pay when you exit the accounts on the capital gains will be more than what the government is contributing on an annual basis into the accounts. And so among the things we should be worried about when it comes to the budget, I don't think this is one of them. However, I would say unquestionably that I remain as concerned about the budget deficit as ever and been a supporter of a balanced budget amendment for a long time. I happen to think that this is something that is aligned with that, not at odds with that. Making every kid a capitalist from birth is going to better align us with the policies that allow the country to continue to grow. And I think growth is a critical element to making sure that we get our deficit to GDP back in a manageable place. Michael, I know you care a lot about that issue. Any other thoughts on that particular point?

[Michael Dell]

Yeah, I mean, government's obviously been spending too much, and there's been some, some renewed attention and Focus on that. That's a good thing. It gets priced into the currency. Right. And we see it in all the effects, whether it's inflation or the value of the currency. And you can't really escape that. I think the spending has to come under control now. Maybe we get this incredible productivity lift. I'm sure we're going to talk about that as we get to the AI fund portion here. But we shouldn't be spending so much more than we're taking as a government. I've sort of stepped back from the hysterics and say we don't have a loan to value problem as a country. We have a spending problem.

[Brad Feld]

Talk to us about that. I want to dig into that because it's a really important point. Talk about loan to value. When you say loan to value, what do you mean by that?

[Michael Dell]

Yeah, what I mean is loan to value is a common term and phraseology used in banking and credit markets and essentially refers to the amount of a loan relative to the value that it's being borrowed upon. If you think about the deficit as against the value of all the assets in the United States, we don't have a loan to value problem.

[Brad Feld]

So the total value of all the assets in the United States are a couple hundred trillion. Our annual deficit is 2 trillion. So you would look at that and say as a loan to value, that's not an issue at all.

[Michael Dell]

Well, I would look at the total deficit as against the total value of the assets.

[Brad Feld]

Now you'd have to so 36 trillion of debt against 200 plus trillion of assets.

[Michael Dell]

Right now you have to take into account private assets and private debt also. So it would be a different equation there. But also the government has taxing authority and so it could increase the taxes but net it all out. The government shouldn't be spending what it's spending relative to what it takes in. And there's many ways to address that. But we should be worried about where the deficit is and the rate of increase.

[Brad Feld]

Let me ask you a question about that. Well, first maybe to level set. So the argument out of the White House is that the reconciliation bill cuts the deficit. So the deficit was about 1.9 trillion. Their argument is that it cuts the deficit by about 150 billion a year. So 1.5 trillion over 10. And then they also argue you get another $250 billion in tariff revenue incremental from the start of the year. We saw that in the run rate revenue in the month of May. So you add those two things together, now you're at 400 billion. So if you're at 1.9 trillion deficit now, you're down to about $1.5 trillion deficit. By my math, that drops it to about 5% deficit to GDP. Besant has said he will get it to 3% deficit to GDP, which is what most people say is reasonably healthy. I think people would like to not have any at all, but I think Most people view 2 to 3% as reasonable. He thinks he can get there by 27 or 28 through the two things I just mentioned. Tariff revenue and the deficit reduction in the reconciliation bill, plus an incremental 100 to 200 basis points of growth in the country caused by lower taxes, less regulation, AI productivity, et cetera. So is your view that we just have to wait and see? Does that show up or does it not show up?

[Michael Dell]

Well, obviously we have to wait and see. I think on the trade and tariffs front, I think this is very tricky. Right. We have products flowing back and forth and we have services flowing back and forth. And if you think about the market cap of the US companies versus the rest of the world, hey guys, the US is doing really well relative to the rest of the world in market cap. And the reason is that we have a substantial lead in the most valuable industries in the world.

[Bill Gurley]

Correct.

[Michael Dell]

And, and so the, the issue there is that if you, if you think.

[Brad Feld]

About.

[Michael Dell]

You know, the, the trade in products, you also have to think about the trade in services. And you know how that's going to be dealt with in a negotiation. I don't know how they'll all get sorted out, but I don't think it's a simple one line item fix.

[Brad Feld]

Right, right. No, I think it's, it's all relevant right now. Elon's talking about forming a third party, the American party. Really. In response, what appears to be frustration over Doge and the budget deficit and the concerns by folks like Ray Dalio about, you know, a debt spiral in the United States. You got guys like Scott Besant saying, elon, you catch rockets. Leave the finances to me. Besant seems very confident that he's going to get this back down to 2% to 3% deficit to GDP. I actually like the suggestion bill by DeSantis rather than forming a third party, which seems to me just chaotic and a lot of overhead and has not historically been that successful. I would love to see Elon, if this is his main issue, if it's the budget deficit and debt, which I would love to see him take on, he could do a series of Things, number one, he could really sponsor a balanced budget amendment to the Constitution of the United states under Article 5. If he put $10 billion against that effort, it would be the single largest constitutional effort in the history of the country. I think there's broad bipartisan support for a balanced budget Amendment. We have 30, 32 states that have supported this in the past. I think you only need 34 to get it. Constitutional Convention called, 38 states to get it ratified. You know, it hasn't happened. You know, the founders made it hard to amend the Constitution for a reason. But I actually think if he put those type of dollars and that type of focus behind it, we could get it done. And then on top of that, he could target both Democrats and Republicans in primaries around this issue. And to me, it just seems like that targeted approach, that very focused approach to balancing the budget would have all sorts of positive impacts. Number one, it keeps the country focused on this issue. It keeps this administration focused on this issue. And I think you have an outside chance at getting a constitutional amendment, and you certainly are gonna have a lot of of Republicans and Democrats who will run on that issue if they think they'll get Elon support. So I'm not sure how this will all evolve, whether there's gonna be a third political party or not. But I would love to see this issue get dealt with. I remember Ross perot Tackling it 1992. 1991. Michael, I know you knew Ross. And to me, that type of attention is the type of attention that we're going to need. Why don't we shift gears here for a second? This one I've been dying to ask you both about. There's this really unprecedented war for AI talent going on, and it was kicked off by Zuckerberg and Meta. They made the acqui hire of scale for $15 billion. They brought on board Alex Alexander Wang to help lead that effort. Then they brought on board Nat Friedman and Daniel Gross. They've poached a bunch of people from OpenAI, a bunch of people from Google. And now today, another announcement of somebody from Apple. The talk is 75 to $100 million annual pay packages, massive signing bonus. Really dollar amounts Michael and Bill I've never heard of, you know, in the tech industry. So, Bill, given that recent set of facts, like what is this? Is, is this a good thing? Is this a bad thing? What do you think the downstream implications of this are?

[Bill Gurley]

Well, I mean, I would, I would back up a little bit. I don't think it started with Meta. I mean, I Think it started with the cycle that we've been under in the private sector funding market. You know, we saw some of this stuff during zer, but, you know, we've moved to a world night. I talk about this in detail on, on Oshaughnessy's podcast if someone wants to go listen to it from a few weeks back. But we've evolved to a place where when there's a successful company, the late stage private market writ large tries to shovel feed cash into them. And so we have private companies that have raised not just 100 million, but a billion or more. And we have a handful of private companies, including OpenAI, who are voracious and audacious enough to burn 2, 3, 4, $5 billion a year. And so you start doing that and you create a situation where private companies, and we saw this a lot during zirt, but private companies have an odd advantage against public companies in that their investors are more willing to let them lose a lot of money than the public investment investors may be willing to. And so they get bold and they get audacious and OpenAI anthropic. They were all paying people tons of money before Meta did this. They were paying them 10 million a year, maybe smaller than what you were talking about, but they were doing it and they were providing liquidity earlier, like two years in instead of waiting for four. And liquidity is a private company and all of these things, which in some cases may have let these people leave because they didn't have any lock in. So that may, that part may have backfired. But in Zuck, you know, you have someone who's had his back against the wall a couple times and gotten bold and changed what he was doing and succeeded again. And so he has conviction that he's willing to take a big bet. I think he's very willing to look at cost as a percentage of his market cap. And if you risk is spending against a percentage of his market cap, not everyone's capable of doing that. I think it may be the right math, actually, in terms of, you know, how big a bet he wants to make. But yeah, it's an. What he has done here in the past three weeks is, is an experiment that's never been tried before, but there's unlimited free agency in business, unlike sports. And he just went and bought the, you know, 27 Yankees, you know, of AI.

[Brad Feld]

Yeah, I mean, and I think your point is a great one. And listen, we're shareholders in Metta, we're shareholders in OpenAI. I wouldn't be A shareholder in Metta if I didn't think, you know, in fact, I remember back in 22 when, you know, when we took our big position there and people said to me, oh, what are you doing? This is a founder controlled company. He's never going to become more efficient. He's never gonna do these things. I said, the whole reason I wanna be all in on this company is it's founder controlled. I think it is a massive advantage that he has today. Right. And he's talking about risking 1% of his company. Right. In order to reboot around AI. That seems to me to be a very, very rational economic decision. And there's no, this is just a, he's got a, you know, Llama four was not where it needed to be to compete. Heads up. But he has one advantage none of those other companies have. He has the world's biggest printing press shooting out billion dollar bills. Right. He's not relying on the beneficence of venture capitalists. The guy has a business model that is generating the cash to fund all this and so he's leveraging that cash as a source of competitive advantage, which seems to me to make a lot of sense. I think it's going to make it very difficult. And I'm, you know, that's why I was asking about the downstream implications. Bill, if you're a company that's trying to compete against that, I don't think many venture companies can compete against that on a, on a durable long term basis. Certainly not the real startups.

[Bill Gurley]

Yeah, yeah. I was having a discussion with a real AI startup founder this weekend and you know, he was asking about talent and like I don't know what you do. I mean, I don't think you hire anyone that's top thousand in the Bay Area. You won't be able to afford them. But, but I do think there is a fundamental question because it's easy to, and I want to get Michael's opinion on this. It's easy to say the percentage of market cap and make that bold decision. But there are cultural implications, right, of bringing in employees that make radically different amounts of money than the other employee base. How, how do you think that will be? How difficult will that be to manage?

[Michael Dell]

I think it'll be a challenge culturally for sure. You know, he could have a long line outside of his door with people, you know, wanting this or complaining about that and that could be a distraction. So I think people generally have a sense of fairness, right. And they want to be treated fairly relative to others and relative to the opportunities that they have out there in the overall market. And if they feel that they're not being treated fairly, that's going to be a problem. So I don't know how that gets sorted out. I do think the math could work for them given everything you guys just talked about. And obviously, if you reduce this down to a race to super intelligence or something along those lines, the size of the prize is tremendous. And they do have an incredible business that is aided by these advancements in a big way. And there aren't a whole ton of companies that can go do this.

[Bill Gurley]

Yeah, and by the way, Brad, you mentioned that they have the, this unfair advantage of this huge printing press, but Apple and Google have the same exact printing press and chose not to do this.

[Brad Feld]

Yeah, but neither of them are controlled by founders. And that's what I was. The point I was trying to make. These are the type of bets that I think it's very, very difficult for a Google or an Apple to make for the reasons you mentioned. Bill, can they sell it to the public markets? You know, do they have the type of decision making in the boardroom that allows this to occur? I mean, at the end of the day, I think at Meta, if Zuckerberg wants to do it, that's what's happening. And that board, you know, gets on board. In fact, he's reshaped the board over the course of the last couple years with folks who are, I think, signed up for this, for this mission with him. Michael, to your point, that's why I think he reorganized this into the kind of super intelligence division. I think the way they'll try to manage this culturally is to say, listen, there's going to be an elite SEAL Team 6 group, which is called Superintelligence, and we're going to pay them elite pay because it's good for the entire business. That doesn't mean we're going to inflate everybody else. And in fact, what I think that Meta will do is you'll probably see them rolling back like you see with Microsoft, like you see with Amazon. My sense is that companies are generally going to get smaller right on the backs of the productivity gains from AI, but they'll redeploy some of those profits into these areas. If you're in the model business and you want to be on the frontier competing in the front, you know, for super intelligence, and there are only whatever five to seven companies that really are in that game, then I think you're going to have to have something similar. Now in the case of OpenAI, it's only 2,800 employees and they're all part of that division effectively. But you have to really get scale quickly because if you're not bringing in 10, 20, 30, $40 billion of annual revenue, I don't think you can stay in this game. And so the question is whether or not Anthropic and X and OpenAI have a sufficient escape velocity, right, that they can take on this frontal assault by by Meta and still compete. My sense is OpenAI does. My sense is both of those companies do, but it's not a long list that can compete with it.

[Bill Gurley]

And by the way, the Nat Friedman edition was particularly interesting just with his GitHub background. We had talked in the past that Meta had made a couple of hires on the enterprise side and we had heard rumors of certain payments when they pass through the cap on the Open models. But you know, you have to wonder with Nat coming on board if there are more aspirations on the enterprise side.

[Brad Feld]

Yeah, it's a great point and certainly want to create some optionality there. Hey, Michael, question for you. You know, on this related topic of productivity gains from leveraging AI and kind of what you're seeing at Dell, we've talked on this podcast what we call the golden age of margin expansion. This idea that you're seeing, AI has certainly re accelerated your top line in a pretty dramatic way, but it's doing that at a lot of companies at the same time. You're able to do more with less. Is that overstated or do you think that we're in this phase over the next three, four or five years where generally as an economy, and certainly within a lot of companies, that they're going to be able to have their top pipelines grow faster than their operating costs because of AI.

[Michael Dell]

It's absolutely real, Brad. And we are doing it. We know of other companies that are doing it. And I think maybe only 10% of large companies have figured this out. And the other 90% are sort of a bit confused at this point. But you know, if I step back and look at this, you know, 10% productivity improvements, pretty easy, 20%, you know, reasonably common sightings of 30% or 40%. Those are massive numbers. If you sort of step back and you think about this, you know, you got $114 trillion global economy right in 2025 and services economy is two thirds of that. If we believe that a 10% improvement is possible in productivity, if you just keep it simple and you say 10% improvement, that's worth $10 trillion. Right. The amount of investment that is occurring today in AI could be quite a bit less than is really justified. I mean, if we believe in a 10 to 20% improvement, and I don't say that lightly because that's like an enormous thing if it were to occur. But let's just stick with this for a second. If we had a 10 to 20% improvement, the investment in AI should be more on the order of 2 to 4 trillion dollars per year. Yeah, yeah. And that's not where we are. It's a lot less than that. So, you know, I don't want to get too ahead of myself here, but I do think there is a big change that is occurring and we're just at the beginning of it and it's going to affect every part of our world.

[Brad Feld]

You have particular standing here, Michael. Right. You saw the productivity gain that came from a computer on every desktop. You saw the productivity gain.

[Michael Dell]

Yeah, that was the 90s. We were talking about that in the 90s. That was fun.

[Brad Feld]

You saw the productivity gain from the Internet and now you're two years into observing this. Are the productivity gains from this going to be as big or bigger than what we saw from personal computers and the Internet?

[Michael Dell]

Oh, it's far bigger. It's far bigger. It's far bigger. Yeah. I feel 98% confident that it's far bigger than the PC.

[Brad Feld]

What about the Internet?

[Michael Dell]

Yeah, I mean, so of course all these build on each other. Right. It's compounding, but this is bigger because it is essentially all knowledge work. And I think it's an expansion of the pie. Right. It's really easy to figure out what will be more efficient and how you can reduce costs. But if you go back 20 years ago, it was very hard to see where the new jobs would be. I think we're in a similar situation here as well. I do think it will be expansionary for the overall economy and for prosperity and for well being and human potential broadly across all domains, whether it's in education, health, societal outcomes, et cetera. But yeah, this feels bigger.

[Brad Feld]

I remember in 2001, 2002, Michael, some companies that were early to, for example, Google, they figured out how to gain, I think of booking.com, right, they figured out how to arbitrage the Internet and Google to build this giant business. Right. And so I would say, like they figured out productivity gains before the next person and that was hugely advantageous. And when you say that only 10% of companies are leveraging this today, it kind of sounds like the same Thing like the early companies are really there, but there's a huge amount yet to come.

[Michael Dell]

Well, I think about the big companies in the world, I'm talking like 10 billion plus revenue companies, 50 billion 100 billion plus revenue companies. These companies have an incumbency of sorts. They have data, they have customers, they have brands, they have ip, et cetera. But if they don't move quickly to reimagine their businesses, given all this technology, they will be destroyed by new companies that come in with a totally clean slate. And you can already see signs of that happening. So I think this is all going to play out in the next three to five years and it will become sort of an urgent priority for companies to reimagine themselves. And what we've done at Dell is our team knows this because we talk about it all the time internally. I think it was almost two years ago, I stood up in front of a group of our leaders and I said that five years from then, that would be three years from now. We're going to have a new competitor and that new competitor is going to be in every business that we're in, except they're going to be faster and more efficient and more capable and they're going to put us out of business. And the only way we're going to prevent that is we're going to become that company and this is how we're going to do it. And I sort of laid out our best guess as to how to do that, you know, two years ago. We're pretty far into that path and well on our way and it's working, but it's not an easy thing to do. Right. This is sort of gut wrenching stuff to reinvent reimagine. We've had to do it many times. If you don't do it, you just go out of business and that's no fun. So we're not doing that. And not everybody wants to do it. It's, it's true, it's hard.

[Bill Gurley]

Yeah, you're, you're, I was wondering if you could expand on that a little bit. So your server division is your fastest growing division. You've, you know, we've talked about on this podcast some of the big wins you've had as part of large AI clusters. How did, how did you get Dell in a position to be part of that next wave? And what are the key, what's the key value add from your products in those large deployments?

[Michael Dell]

Yeah, so last year our server networking business grew 58% year over year in the first quarter we received $12.1 billion in AI orders. And by the way, our shipments for all of last year in AI servers were about $10 billion.

[Brad Feld]

Two years ago were 2 billion.

[Michael Dell]

Yeah, it was not very much two years ago. So we took orders in the first quarter for over 12 billion. And last year we shipped about 10 billion. So this is growing super fast. And now we have a backlog of little over 14 billion. So what happened? Well, you know, we, we, we're already the leader in servers. We kind of saw the GPU thing and it's a, it's a combination of things. I mean, when, when Nvidia releases a reference design, it, it's kind of a reference design. It doesn't really work. We love Nvidia, but somebody's got to make all this stuff. And so tons of engineering and obviously there's a logistics of the supply chain. Building these 100,000 plus GPU clusters and making them work reliably is super complex. So it's a combination of engineering operations. We often will help with the financing of these with our Dell financial services. And the scale of these things is enormous. We talked about this at Deltec World. Right now we're deploying these systems that will produce, you know, deliver more than 50 trillion tokens per month. And if you put that in the context of Google statements or Microsoft statements, I mean, this is massive scale systems. And yeah, I don't think there are a ton of companies that are able to do this and have them work reliably.

[Brad Feld]

And Jensen has said you guys have distinguished yourself against your competitors, other ODMs like Foxconn or Quanta, et cetera. You know, you've been first to market. You're launching the GB3 hundreds right now. Your partner.

[Michael Dell]

Yeah, we delivered the first GB3 hundreds a couple days ago to CoreWeave. We announced that we actually have delivered another GB300 system to another customer. You don't think we've disclosed to that as yet, but informed listeners of this podcast can probably guess.

[Brad Feld]

So the thing that I'm, you know, a year ago we were all sitting around and talking about the ups and downs of the overbuild in 2000 right around the Internet. And you know, and yet when I look at the trajectory that we're on, right. I saw Mike Intrator on CNBC today and he said, listen, we're still underestimating the amount of demand that's out there in the world. And when he says it or when you say it or when Jensen says it, in some ways, People would argue it's self serving. Of course you guys are going to say that. That's your business. You're going to tell everybody your business is great. But you're known as a very sober guy who tells it like it is. And what I want you to do is reflect a little bit on the comparison between this and the period in early 2000 when we did get overbuilt. Right. And as the saying goes, every shortage ends up in a glut. Why are we not near that point yet today in this market?

[Michael Dell]

Well, I mean, you guys as students of the market can go back and sort of review what the multiples were on earnings and cash flow around that time. We're nowhere near that for the most part. Right. But if we go back to the underlying activity here, it's all about the tokens.

[Brad Feld]

Right?

[Michael Dell]

And as we go from basic queries to test time compute to deep reasoning to agents and multi agent systems, the number of tokens just explodes. And what are we talking about in tokens? When we're talking about tokens, we're talking about knowledge, Right?

[Brad Feld]

Exactly.

[Michael Dell]

I don't know about you, but I'm using these tools like 50 times a day as my thought partner to solve problems and quelch my curiosity. And my usage is skyrocketing and often multiple models. And it's going out there and querying all these websites, doing calculations for me and helping me solve problems faster than I ever could in the past. And I think it's just at the beginning. Right. And the substrate for all of this of course is compute and data. Right. So we love that at Dell Technologies because that's what we do. So there's just a ton of growth here. I think it will also be highly distributed. I think it will be, you know, it'll occur in devices, it'll occur in the edge, it'll occur in all sorts of places. And it does feel like we're still a lot closer to the beginning here.

[Bill Gurley]

What can you share about on PREM AI deployments? Michael? Are you seeing anything interesting there?

[Michael Dell]

Yeah. So we in the last year delivered a little over 3,000 of the Dell AI factories and those are increasingly to enterprise and commercial customers that want to bring the AI to their data, not the data to the AI. And there's just a ton of data that is still on PREM and being generated on prem. And it turns out these large models are fantastic. But you don't always need the largest model to solve every problem. A lot of the corporate use cases are perfectly done with smaller models. And open source models. And so you see this enormous proliferation and hugging face of models of all shapes and sizes, tons of cascading innovations. And so I think this is going to be highly distributed and we're definitely seeing growth in On Prem and Colos are also a big deal because many customers don't want to have the data center themselves and so they'll put it in a colocation facility. And we've also adopted the consumption type model so you can pay on a usage type basis.

[Brad Feld]

When you look at just kind of the relative distribution between kind of the custom ASICS world, what you see happening across folks like AMD and Nvidia, there's obviously a lot of chatter. You have an interesting perspective both as a consumer of these products, also as a builder and distributor of the products. Are there any pending big changes or as you look ahead over the course of the next year or two, that's probably as far ahead as you can see. Does it look like the relative landscape is stable or are there big breakthroughs coming that may unseat somebody like Nvidia?

[Michael Dell]

Nvidia is in a great spot to your question, I think for the larger model companies and hyperscalers, certainly custom Asics are gaining a lot of shares. And when you have control over the workload and you can take the time to optimize your workload, that's certainly going to be a part of what occurs in the infrastructure. But it's not a large number of customers. We're talking about the number of companies developing models. It's sort of that number of customers. But they're large. Right. As you've seen with Google and Meta and others who are deploying the ASICs.

[Brad Feld]

You know, maybe just in the. To be respectful of time, Bill, I could talk to Michael for, you know, for hours about this particular subject, but maybe to, you know, one of the people I talk to when the market's going wild is Michael. You know, we certainly saw that earlier this year. You know, it's pretty incredible to see the snapback that we've seen out of the Nasdaq, the S and P. I think the NASDAQ is now up 32% off of its bottom two months ago. Just as a data point, I think Dell got as low as, I don't know, 75, 72 bucks. It's back at 120 bucks now. That is an incredible bounce off the bottom, but it's still basically up, I don't know, 5 or 10% on the year. It's not like it's in this astronomical range when you look at kind of year to date or over the course of the last 12 months. And so when I look at the markets and I want to get both your read on this as well, Michael, here we are, we have the NASDAQ and the QS and the S and P at an all time highs. Bitcoin's near an all time high. The VIX is back to 15 or 16 basically where it was in February, despite all of the things around tariffs. The 10 year, everybody talks about this, the great debt spiral that we have in the country, but the ten year has been between 3.7 and 4.7 for the last two years, except 4.2 kind of smack dab in the middle, if not at the lower end of that range. And then you see companies like TSM and Nvidia and Microsoft, Oracle, booking.com, uber-they're at all time highs. But notwithstanding the fact that they're at all time highs, you have Tesla down over 20% on the year, Apple down 15% on the year. Google's down on the year. Amazon's basically flat on the year. So you have a lot of dispersion in the market. When you look at the market, does it feel to you again like we're in this bubble territory? Does it feel as a company that is kind of accurately reflecting. Set aside your stock, I don't want you to comment on your stock. I'm just talking about the market writ large. Are the US markets higher in three to five years or are they not?

[Michael Dell]

Given where we sit today, I would bet they're higher. I would bet that more and more companies figure out how to grow their businesses. I talked earlier about the productivity and efficiency. I think the ultimate benefit is going to come from the speed at which companies transform and the growth that they're able to create. That's certainly how we see it in our business. And yeah, I think a lot of these companies will be able to compound their earnings on a double digit basis and the market largely overall indices will become more valuable.

[Brad Feld]

Yeah, I do think that this moment in time we're seeing a lot of dispersion. I mentioned it, right? Some companies being down this year, some companies up a lot. I really think the companies that are leveraging AI that are in a position to leverage it and to capture that margin expansion, we're going to see a re acceleration. And we've heard this out of folks like McDermott and Sridhar and Jensen, you know, at all these companies, how they're re accelerating top Line, but they're not adding people, right. That, you know, it's kind of net flat. We see this out of Uber. We see it out of Dell.

[Michael Dell]

When the market dipped down, our share buyback program went into high gear, you know. Right. And we bought back 22. We bought back 22 million shares. So, you know, that worked out well for you.

[Brad Feld]

As I look at this flight path, we just. We just landed, you know, the reconciliation bill. So there was a lot of uncertainty in the world to start the year. One was what was going to happen? Was this reconciliation bill going to pass? Now it's passed. So we have tax predictability. Right. You have an extension of the existing tax regime, and then you have the no tax on tips, the no tax on overtime. So you have this incremental stimulus now coming from the reconciliation bill. On top of that, tariffs while still up in the air. The market kind of has digested the tariff stuff. Right. And absent some big blow up between us and China, if we follow the Besson Accords that they reached in Switzerland and then reiterated in London, it seems like the big pieces of the tariff puzzle are falling in place. And then on the rate front, the market is estimating that the next move is down. Whether we're gonna have one or two rate cuts at the end of the year is the question. Some people, the Fed is saying we're on hold. We're gonna wait and see whether or not inflation reaccelerates this summer due to tariffs. So that's what everybody's eyes are on over the course of the next six to eight weeks. Does core PCE tick up due to those tariffs? I'm taking the under on that, but we're going to have to wait and see. And then on fundamentals, I think what we're hearing from companies, and this is where the rubber meets the road. Earnings, I think we had 85% of companies beat in the S&P 500 in the quarter. And if you just go through and look at keywords, it was accelerating, it was AI. It was reinventing our business. There is a real growth feeling in the market among these companies. And so from our perspective, and we try to give people an indication of where we are. I mean, I was as negative, as you well know, Michael, early in the year, I was as negative as I've been in 10 years because I thought if we were going down the path of Navarro and $2 trillion of tariffs, that it was all, you know, every. All bets were off.

[Michael Dell]

That was a scary path, you know, and, you know, we Talked about how if they went down that path, I thought they would reverse course because it wouldn't work. You know, and this, I think this is a very iterative team that will experiment, lay some stuff out there. Not all of it's going to work. There'll be some bad ideas, and then they'll reverse course.

[Bill Gurley]

Yeah, I hope, I hope we don't.

[Michael Dell]

We did do that.

[Bill Gurley]

I hope we don't snatch defeat from the jaws of victory here with, with policy, though, you know, I think, you know, going back into the tariff game, some type of bold confrontation with China and, you know, our AI policy, I mean, one thing we didn't talk about in this past week, the, the AI moratorium got removed from the bill and we're going to have 70 state laws in the United States, which is not great for AI startups. So anyway, I hope we don't. I hope we don't. I hope we don't. I hope bad policy doesn't upset what would be an otherwise very potent landscape based on AI.

[Michael Dell]

Yeah, fully agree.

[Brad Feld]

I think it's one thing that the three of us are in violent agreement on. One of the things that's moved this country forward for the last three decades is we've led globally in technology and we've led globally in technology because we've allowed our best technologies to move freely around the world and to compete and to win. This is the first time since I've been in this business that we're talking about export controls and AI diffusion laws that are restricting the ability of our technology to go compete and win. Right. And there's both the question mark as it relates to inside of China, but also the question mark outside of China. And while we've seen the repeal of the Biden diffusion rule, what I'm told is that no new licenses have been granted for distribution of AI technologies around the world, despite all of the discussion around this. So it's critical that Washington follows through and that we accelerate diffusion around the world of the entire American AI stack, that we don't regulate that out of Washington. And then I think there are some legitimate regulations that you can have as it pertains to China. But even there, I would much rather let our deprecated chips out of Nvidia go compete against Huawei in China. Keep the developer mind share in China because it's going to make it easier for us to win globally and elsewhere around the world. And I think it's important that Michael, myself, everybody else bill you. Those voices are being heard. We're not out of the woods on this by a long shot.

[Bill Gurley]

By the way, you reminded me of one other thing I'd just like to harp on, which is the skilled immigration piece. So someone highlighted to me that they made like the huge wanted poster of all the people that Meta has borrowed from other companies, like 60 or 70% of them were of Chinese origin. And as I understand it right now there are PhD students are candidates in China that can't get visas and get in to the United States right now. And we go back to what Trump said on all in, that he wanted to staple a visa to every diploma I'd really like to get. Not that we're in charge, but I'd love to get that conversation going again. It would be very powerful for the country to increase skilled immigration and it feels like we might be decreasing it.

[Michael Dell]

Yeah, absolutely agree. And to your point, Brad, I mean, if, if we don't aggressively work to, you know, sell our technologies around the world, other countries are going to do that. And you know, reminded of story long time ago, the Defense Department had this thing called mtops. And it was, it was a bill, might remember this, but it was, it was like a restriction on how fast a computer was that you had to get approval from the government to sell it. And I was in this group of technology CEOs and we went to the Pentagon to talk to the generals. And before we went, we went to Toys R Us store and we bought a PlayStation and we took it out of the box and we brought it to the the Pentagon, you know, this big room and we set the PlayStation down on there and we said, you know, this exceeds the MTOP restriction.

[Brad Feld]

Right.

[Michael Dell]

But unfortunately, you know, it's not. It's made by a Japanese company. And so, you know, it doesn't fall under the rules, so anybody can buy it. It's also $399, right? So you guys think you're going to control the access to this thing or little things that move easily, you're kind of fooling yourselves. And so we have to come up with more intelligent ways to restrict access to the most advanced technologies. And oftentimes you just get all kinds of unintended consequences with these rules that are created. And it doesn't create the outcome that the government was originally looking for.

[Brad Feld]

Well, I think that's a good way to wrap Michael. It's awesome having you here. I wanted to say Michael and myself, Darakashirshahi, David Solomon from Goldman, rene Haas from ARM, Bill McDermott from Service Now. And a group of us were at the White House a few weeks ago to testify on the Invest America Act, Michael kicked it off. And if you haven't seen the video of it, we'll include it here. You should watch it. But he reminded everybody, captivated the entire room.

[D]

We view this initiative as a powerful platform for philanthropic innovation aimed at helping generation children thrive wherever they come from, particularly those families who have been historically left behind. Mr. President, you articulated it perfectly. These Invest America accounts will give every new American child a genuine opportunity to participate in history's greatest engine of economic growth, the American economy. The funds in these accounts, invested in American enterprise and innovation will grow over time into substantial nest eggs, providing support for education, home ownership and starting families. The ability of families, friends, benefactors and employers to match the government's generosity amplifies the life changing potential of this initiative. Thank you, Mr. President, for your visionary leadership on this critical issue. These Invest America accounts will profoundly impact, impact countless young Americans, ensuring they truly benefit from what Abraham Lincoln described as the right of every American, the right to rise.

[Brad Feld]

As I sit here on the 4th of July weekend, you know, I'm just, I'm super grateful to you, Michael. You did a huge service to the country by helping us get the Invest America act passed. And I think everything that we just talked about here, including allowing American technologies to go compete. Remember, these Invest America accounts are only worth something if America does great, right? And the fact of the matter is, Warren Buffett has said, Warren Buffett has said the smartest thing he did was just bet on America. He bet on America. And I'm betting that the next 50 years, next hundred years are going to be an American century again. But we can't get in the way of the innovation and the entrepreneurship and the creative destruction, frankly, that has allowed America to be so great. And finding that balance between, between government and Silicon Valley has always been, you know, challenging, you know, as you just related, Michael, with mtops. But you know, we have to show up, we have to have a voice. We have to, you know, continue to push in that direction. I think if we're allowed to compete, our best days lie ahead. If we get in the way, Bill, like you talk about, then I think we can upend our advantage. Thanks for joining us. Thank you, Michael. Michael, thank you.

[Bill Gurley]

Appreciate it.

[Michael Dell]

Great to see you. Bye bye.

[Brad Feld]

We'll talk soon. Take care. As a reminder to everybody, just our opinions, not investment advice.