Buying OpenAI With Robinhood's Tokenized Trading; Figma's S-1 Drop; Tesla's Dire Situation?

Summary

Chit Chat Stocks: Detailed Summary of "Buying OpenAI With Robinhood's Tokenized Trading; Figma's S-1 Drop; Tesla's Dire Situation?"

Release Date: July 4, 2025

Hosted by Ryan Henderson and Brett Schafer, Chit Chat Stocks delves deep into the latest developments in the stock market, providing insightful analysis and lively discussions. In this episode, titled "Buying OpenAI With Robinhood's Tokenized Trading; Figma's S-1 Drop; Tesla's Dire Situation?", Ryan and Brett explore significant topics ranging from high-profile IPOs to innovative trading platforms and the evolving landscape of AI investments. Below is a comprehensive summary of the episode's key segments.

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1. Figma's S-1 and IPO Prospects

Timestamp: [03:00] – [14:57]

Overview: Ryan Henderson initiates the discussion by spotlighting Figma, one of the most anticipated IPOs in recent years. He provides an in-depth analysis of Figma’s business model, financial health, and market penetration.

Key Points:

• Figma’s Business Model: A collaborative design platform that streamlines the transition from design to development, akin to “Google Docs for graphic design.”

• Financial Performance:

  • Revenue: $821 million in trailing twelve months.
  • Growth: 46% year-over-year.
  • Profitability: 18% non-GAAP operating margin.
  • Enterprise Adoption: 95% of Fortune 500 companies utilize Figma, showcasing a high penetration rate.
  • Net Dollar Retention: 132%, indicating robust revenue growth from existing customers.

• Historical Context: Two years prior, Adobe attempted a $20 billion acquisition, highlighting Figma's premium valuation.

Notable Discussion: Brett Shafer questions the inclusion of executive bonuses in Figma’s S-1 filing, expressing concerns over the ethical implications of rewarding executives despite the abandoned merger with Adobe.

Quotes:

• Ryan Henderson: “30% of their monthly active users are devs. It's a pretty slick platform.” [05:00]
• Brett Shafer: “If you're buying exposure to a special purpose vehicle... I think people will take advantage of this and companies will take advantage of investors through this process.” [34:21]

Market Outlook: Both hosts speculate on Figma's potential market cap at IPO, with estimates ranging from $16 billion to $30 billion, considering historical acquisition offers and current financial metrics. They express cautious optimism but highlight concerns over high valuation multiples and market skepticism.

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2. Tesla's Delivery Numbers and Future Outlook

Timestamp: [17:44] – [28:03]

Overview: Ryan and Brett shift focus to Tesla, analyzing recent delivery figures and the company's strategic challenges.

Key Points:

• Current Performance:

  • Total Deliveries: 384,000 vehicles this quarter, marking a 13.5% decline year-over-year.
  • Model X Deliveries: Down 50%, primarily attributed to the underperformance of the Cybertruck.

• Market Challenges:

  • Tax Credits: The removal of the $7,500 EV tax credit adversely impacts Tesla's demand.
  • Competition: Increasing market share from legacy automakers like General Motors.

• Strategic Concerns:

  • Autonomous Driving: Tesla's ambitious Level 5 self-driving goals face significant technological and operational hurdles.
  • Capital Intensity: High fixed costs due to manufacturing facilities make margin sustainability challenging despite production reductions.

Notable Discussion: The hosts debate Elon Musk's optimistic outlook versus the tangible decline in deliveries and the company's heavy reliance on future AI-driven margins.

Quotes:

• Elon Musk: “I'd encourage people to look beyond the bumps and the potholes of the road immediately ahead of us. Lift your gaze to the bright shining citadel on the hill.” [20:01]
• Ryan Henderson: “If all this stuff works out, it's not like you're gonna have that much upside. And the downside is the risk here at the moment is huge.” [26:49]

Market Outlook: Both hosts express skepticism about Tesla's near-term prospects, citing declining deliveries and loss of market share. They anticipate potential capital raises to sustain operations and warn of significant downside risks should current trends continue.

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3. Robinhood's Tokenized Trading of Private Companies

Timestamp: [28:00] – [36:47]

Overview: The episode delves into Robinhood's innovative yet controversial move to offer tokenized trading of private companies, including OpenAI and SpaceX, in European markets.

Key Points:

• Tokenized Stocks:

  • Over 200 tokenized stocks and ETFs are now tradable 24/5 on Robinhood's platform without commissions or spreads.
  • Private Companies: Introduction of tokenized shares for private entities like OpenAI and SpaceX.

• Regulatory Landscape:

  • Such offerings are currently illegal in the U.S., prompting Robinhood to target European markets.

• Investor Risks:

  • Lack of Rights: Tokens do not confer actual equity or voting rights.
  • Indirect Exposure: Tokens represent ownership in a special purpose vehicle (SPV), not the companies themselves.
  • Historical Precedent: Draws parallels to the 1920s unregulated stock issuances that led to the Great Depression.

• Industry Reaction:

  • OpenAI's Stance: Officially disassociates from Robinhood's tokenized offerings, warning investors to exercise caution.

Notable Discussion: Ryan and Brett debate the merits and pitfalls of democratizing access to private company investments. Brett criticizes the potential for fraud and companies taking advantage of unregulated platforms, while Ryan emphasizes the importance of regulatory protections.

Quotes:

• Ryan Henderson: “You have to understand this is exact... this is exactly what a boom bust cycle looks like and usage on the end consumer...” [56:29]
• Brett Shafer: “But I would prefer if markets went like the rest of those markets were regulated properly as opposed to, well, those aren't regulated. Let's make the stock market unregulated too.” [36:27]

Market Outlook: The hosts express concerns over the lack of regulatory safeguards, potential for investor exploitation, and the fundamental differences between tokenized trading and traditional equity investments. They stress the importance of considering the legal and financial implications before engaging with such platforms.

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4. AI Investments and Corporate Hiring Practices

Timestamp: [37:42] – [58:16]

Overview: Ryan and Brett explore the intersection of AI advancements with corporate operations, focusing on automation, hiring practices, and the broader economic implications.

Key Points:

• AI-Driven Workforce Changes:

  • Major corporations like Ford, Amazon, and JP Morgan are leveraging AI to enhance efficiency, leading to reductions in total headcount.
  • Layoffs: Microsoft announced layoffs of 9,000 employees (4% of workforce) amidst record earnings, highlighting a shift towards AI-driven productivity.

• Hiring Scandals:

  • Soam Parekh Incident: A prominent case where an individual secured multiple remote engineering jobs at AI startups, raising questions about hiring oversight.
  • North Korean Cyber Espionage: A fabricated identity used to infiltrate tech companies as a cybercriminal, underscoring vulnerabilities in remote hiring processes.

• Automation in E-commerce:

  • Amazon’s Warehouse Automation: Introduction of advanced robots like Vulcan that enhance order fulfillment efficiency, reducing the number of employees per facility and increasing package handling rates.
  • Impact on Margins: Significant capital investment in robotics is expected to lead to future margin expansion for e-commerce giants.

• Meta’s AI Investments:

  • Aggressive Hiring: Meta is spending heavily on acquiring AI talent, including $300 million in signing bonuses and $100 million salaries to secure top researchers.
  • Strategic Acquisitions: Acquisition of Scale AI for approximately $15 billion to bolster Meta’s AI capabilities.

Notable Discussion: The hosts debate the sustainability of AI-driven growth, comparing the current boom to historical boom-bust cycles in various industries. They highlight the concentration of AI investments in major players like Nvidia and Microsoft, raising concerns about potential market bubbles.

Quotes:

• Brett Shafer: “There's so much random stuff that you can put your money. Why draw the line here?” [36:47]
• Ryan Henderson: “I think probably properly hyped. Everyone's using it, some stuff's overhyped, some stuff under hyped.” [52:25]

Market Outlook: Ryan and Brett maintain a balanced view on AI's potential, acknowledging significant growth and adoption while cautioning against overvaluation and the inevitable cyclical nature of technological booms and busts. They emphasize the importance of discerning between sustainable advancements and speculative investments.

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5. Community Insights and Sponsor Highlights

Timestamp: [16:16] – [63:04]

Overview: Throughout the episode, Ryan and Brett intersperse discussions with promotional segments for their sponsors and community engagements, fostering a sense of community among listeners.

Key Highlights:

• Interactive Brokers Promotion: Emphasized for its superior international trading capabilities, supporting multi-currency accounts across 160 markets.

• Blue Chippers Club: An exclusive community for stock-focused investors offering portfolio reviews, stock pitches, and weekly calls. Both hosts are active members, sharing valuable research reports.

• Fiscal AI Sponsorship: Offers real-time financial data and analytics tools, with discounts available through the podcast link.

• TSOH Investment Research Service: Provides high-quality stock research reports and portfolio transparency for serious investors.

Notable Comments:

• Ryan Henderson: “The best way you can support the show, if you like it, is to give us a review wherever you listen.” [62:00]
• Brett Shafer: Promotional ending for Redis for AI, emphasizing the importance of accurate memory for AI agents. [63:04]

Community Engagement: Listeners are encouraged to join the Blue Chippers Club for enhanced investment discussions and to utilize sponsor services for better trading and research capabilities.

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6. Final Thoughts and Conclusion

Timestamp: [61:58] – [63:04]

Overview: As the episode wraps up, Ryan and Brett reiterate key takeaways, express gratitude to sponsors and listeners, and highlight the importance of prudent investing.

Key Takeaways:

• Figma and Tesla: Both companies present intriguing opportunities and challenges, with Figma poised for a significant IPO and Tesla navigating delivery declines amidst external pressures.

• Robinhood's Tokenized Trading: Represents a controversial move towards democratizing finance but raises substantial regulatory and ethical concerns.

• AI Investments: Continue to drive corporate strategies and market dynamics, presenting both opportunistic growth and potential risks.

Closing Quotes:

• Ryan Henderson: “Anything Brett says is not formal advice or recommendation. We are not financial advisors.” [62:30]
• Brett Shafer: “Redis for AI the right infrastructure, the right tools, the only way to scale. Learn [e-mail] Genai.” [63:04]

Conclusion: The hosts emphasize the importance of informed investing, staying updated with market trends, and leveraging community resources for enhanced financial decision-making. They invite listeners to engage, review the podcast, and explore sponsor offerings to support the show's growth.

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Final Note: This episode of Chit Chat Stocks provides a wealth of information on pivotal market developments, offering listeners a blend of analytical insights and strategic perspectives. Whether it's dissecting high-profile IPOs, exploring innovative trading platforms, or navigating the complexities of AI-driven market shifts, Ryan and Brett equip their audience with the knowledge to navigate the ever-evolving investment landscape.

Transcript

[Ryan Henderson]

Foreign.

[Brett Shafer]

Welcome to Chitchat Stocks. On this show, hosts Ryan Henderson and Brett Shafer analyze businesses and riff on the world of investing. As a quick reminder, Chitchat Stocks is a CCM Media Group podcast. Anything discussed on Chitchat Stocks by Ryan, Brett or any other podcast guest is not formal advice or recommendation. Now please enjoy this episode.

[Unknown]

Foreign.

[Ryan Henderson]

Welcome to Chitchat Stocks. I am one of your hosts, Ryan Henderson, and I am joined as always by the one and only Brett Schaefer. We have plenty to discuss this week. I guess I should preface this and say this is the Chit Chat Stocks Power Hour. We do these every week on Thursdays at 45 o' clock 5pm Eastern Time live on YouTube. They go out Friday morning, so if you listen listening to them on POD in podcast format and you want to ask questions, you can also do that on YouTube. Look up chitchat Stocks and tune in on Thursdays. But we've got plenty to discuss this week. Tesla delivery numbers figma files for IPO which is probably one of the most notable IPOs of the last two or three years. There's Robin Hood tokenizing trading. There's plenty of, I guess scandal and questions being raised with that. And then we have a whole bunch of AI topics we are talking about. Maybe Meta and Mark Zuckerberg's exorbitant payments for employees, some automation going on at Amazon, and a number of other topics as well. But before we get to that, we want to talk about our friends at Interactive Brokers. We love international investing here at Chit Chat Stocks and we know our listeners do too. No brokerage compares to Interactive Brokers, otherwise known as ibkr. When it comes to international trading, you can easily trade assets worldwide using a multi currency IBKR account in 160 markets, 36 countries and 28 currencies with low fees. Compare that to your existing brokerage and its limited trading ability and high fees on foreign exchange. There truly is no comparison. Trade stocks, options, futures, currencies and bonds globally with IBKR's unified brokerage platform. I wouldn't use any other brokerage for my investing needs. So switch to IBKR and level up your international trading game today. If you're interested in checking them out for yourself, head over to IBKR.com Interactive Brokers is a member of SIPC. Brett, where do you want to kick things off today?

[Unknown]

One sec was typing something to the chat there. Let's talk Ryan to either Tesla, Figma or Robinhood. I liked your topics this week. So dealer's choice.

[Ryan Henderson]

You go Ahead, let's start with figma. I think this is pretty big news. This is one of the companies that has, I imagine a lot of public markets, public market investors have been clamoring for this one to go public. I think sort of the big bucket is like OpenAI, Stripe, SpaceX and maybe you could lump Canva Anthropic in there as well. I guess there's a number of them. Yeah. But Figma pretty look, pretty good looking. S1 if you recall a couple years back, I think this was, must have been two years ago now Adobe tried to acquire them. I can't remember the exact price tag on it. I think it was around $20 billion. 20. I see Brett mouthing it there. He's currently on mute. You said 20 billion?

[Unknown]

20 billion, yeah, yeah.

[Ryan Henderson]

So it was a premium price tag. I would, I would call it a premium price tag. But the numbers do look pretty good. Let me give a little bit of context on what Figma actually does though. Figma is a collaborative design platform so companies can go from design to development a lot quicker using figma. Previously those segments were pretty siloed so you'd have designers come up. If we go back 10 years, even 15 years, the you would create a design, you download the file, you'd send it to someone. It wasn't even like this co working digital space. It was actually very siloed. You'd send over independent work from one another and then you could edit it from there. Now you can do that all in one place. It's like Google Docs except for graphic design essentially. And then once you had a design that you actually liked, you could, this is the old days, you would send it to the development teams and you typically say like make this, like I want you to make something like this. Now Figma eases that transition. So here's a quote from the S1. It says dev mode, which is one of the features of their platform. Dev mode organizes information and surfaces data like design specifications and measurements in ways that are both useful and intuitive for developers. So 30% of their monthly active users are devs. It's a pretty slick platform. Fiscal AI uses it, I, I, we use it on our own personal teams. 95% of Fortune 500 companies use it and it really does reduce friction for enterprises going from design to development to go through some of the numbers. They had $821 million in trailing twelve month revenue. They're growing 46% year over year. I believe that was the trailing twelve month figures. 18% non GAAP operating margin. And then here are the two numbers that stood out to me really. The first one, I Already mentioned it, 95% of Fortune 500 companies use Figma. That's really good penetration rate for enterprise adoption. The second one, 132 net dollar retention rate. So the majority of growth, the majority of revenue growth today is coming from existing customers and it really starts to spread within an organization once there's adoption. So say one designer picks it up, really likes it, you act, you can add multiple seats. At this point a lot of people know what FIGMA is but say you don't, it can. A single person who really likes figma can adopt it in an organization and it can start to spread. And you're seeing that in the net dollar retention rate. Now if you're looking at the gap figures, like if you're going through the S1 yourself, the numbers are going to look a little strange for two reasons. One, they got a $1 billion payment from Adobe for the merger. Breaking it was blocked by antitrust.

[Unknown]

Not bad.

[Ryan Henderson]

Phenomenal for their cash flow for 2023 I believe. Yeah, but the other part is they expensed a lot of employee options last year which makes profitability look horrible there. I think their margins look like minus 100%. That's not really what's going to happen moving forward as a public company. Margin should look a lot better. There was one weird thing that stood out to me from the S1 in general. I thought it was a really solid S1 and I thought it seemed, it looked like a pretty well run company. I thought the founder letter looked pretty good and he was pretty, pretty frank about basically we're going public in a world when a lot of private companies are staying private and we're going to try to basically keep, maintain the same attitude, which is we're going to continue to invest in the platform and the product. This we're not going to optimize for margins in the short term, we're going to make long term investments. They said they're making a lot of investments around AI right now, which I liked the candor. However, one weird thing that stood out to me there was a. Basically when you get down to the compensation segment, I'm not sure what they call that in the S1 says we awarded each of our named executive officers a one time cash bonus in recognition of their efforts with respect to the abandoned merger. So they gave it. When Figma got a billion dollars from Adobe for the merger not going through, they just, the CEO just took a $5 million bonus. Does it, does that seem weird?

[Unknown]

Is the CEO the founder?

[Ryan Henderson]

Yes.

[Unknown]

Do you know?

[Ryan Henderson]

Yes, he is.

[Unknown]

Yeah, that is weird. I assume he has a large stake in the business. So any sort of bonus payment and stuff like that frustrates me when say you have a company valued at $10 billion, the guy owns 10% of it, he is worth a billion dollars and we need to just keep paying him out of our capital structure and all the money we've gotten. Yeah, that's. That's never great. It seems like they got a good head on their shoulders. I don't know if we need to pat ourselves on the back for going public when you almost have a billion dollars in revenue. Not sure I really think that's going to make your company any sort of. Any, you know, special or anything like that. I think this business is good. The one thing is, and you mentioned the AI investments with software, with design software especially. We talked with Braden last week, Founder of Fiscal AI. There's so much uncertainty in this market right now and it makes me nervous about investing in these companies, which I'm assuming Figma is going to come out at probably 10, 15, 20 times sales. Not too attractive for me.

[Ryan Henderson]

Yeah, a little. This was kind of fascinating to. Adobe stock dropped 4% just purely on the S1 coming out, which doesn't. Didn't really make any sense, honestly. I would have expected, I was kind of expecting bigger revenue figures. I would have thought this had crossed a billion in revenue by now. Purely based on the fact that when they were, when the acquisition was announced initially I knew they were doing like half a billion. I knew they were growing really quickly, so I just assumed they were doing a billion by now. But yeah, Adobe stock dropped 4% on the. When the S1 came out. Adobe for context has $23 billion in revenue. Figma has $821 million in revenue. It. I did not realize how I guess big Adobe is relative to some of these competitors like Figma and canva. So I guess two questions. If you had to guess what market cap do you think FIGMA will come out at? And then second question, do you think there's the Adobe drop was warranted?

[Unknown]

I think Adobe and some like. I can understand the Adobe stock drop. I can also understand why people are getting long today because they believe it's a historical compounder, a really fantastic business just in a vacuum. You know those unit economics, recurring cash flows, really large market opportunity and now it's trading at a reasonable valuation. So I can understand both sides. The stock's not really for me but I definitely see it being warranted because of those risks. Now Figma, when it comes out, I would guess 20 billion. I don't think the market is that aggressive right now for this type of company. I could be wrong. I think it maybe has a chance of coming out at 20 billion and then seeing some stuff that's happened with Circle and those ones where you have the restricted float and then maybe it doubles from there, who knows? That seems to be the type of market we're in. Are we buying? No, but yeah, that's what I think. What about you?

[Ryan Henderson]

Yeah, I would guess my initial thought is like 20 times sales but that means you're looking at what, 16 billion dollar market cap. Yeah, Adobe offered to buy them for 20 billion dollars a year and a half ago. My suspicion is that it's going to fetch a premium to that. I don't know why, I just think people will anchor to that. So I would not be surprised if this came out at 25 or even $30 billion market cap.

[Unknown]

Do you have interest in buying this?

[Ryan Henderson]

Well, obviously depends on the price but yeah, I think the business is really solid and the enterprise adoption has been great. A lot of the numbers just look fantastic. It's a really well run software company and a really useful product product to a lot of teams. So yeah, I would certainly, it's in my wheelhouse I think in terms of, I can understand it and the numbers look good, I'd be up for it but I, I, if we assume this does trade at 20 times sales, I'd be a buyer of Adobe relative to figma.

[Unknown]

Yeah, makes sense, makes sense. All right, we have a question from the chat here. Do you guys think the Fed will cut in July and should they? I don't know if they should but I actually given the jobs report I don't think they will because that's what they've been signaling. That's about all I got there. And do you guys, Ryan, do you.

[Ryan Henderson]

Have any thoughts, no thoughts on whether or not they will or should lower interest rates? I personally trust Paul's judgment but I just think it's so gross what's happening with the political like pressure on him.

[Unknown]

Pti. Pti, yeah, the guy that got rugged by Bed Bath and Beyond.

[Ryan Henderson]

Yeah, and I believe the son of the founder of Pulte Group Homes which has maybe like the, of course they want interest rates to drop which yeah A, that's flawed that he runs it. I assume he has ownership and Pulte Group, which is one of the Biggest home builders in America. The of course he wants it to drop. He's like, we need to investigate Powell for being, for having some sort of political agenda. And then the other thing was this like Trump trying to name his replacement in advance like before Powell's even out of the seat. That stuff just irritates me. Like it's so, it feels so short sighted and kind of self serving, I guess. I don't know if that's to be unexpected, but it feels short sighted and self serving to put all this pressure to have interest rates at 1%, which is what they want.

[Unknown]

Like they want them at 1%. No, that's not happening.

[Ryan Henderson]

Did you see the table? There was like a drafted message from the President that it was like a list of all the federal interest rates and by country. And it was like the lowest ones I think were like Switzerland and some others, maybe Norway. It was all the countries. But he basically pointed, pointed to the lowest ones and he's like, we should be here. Like, you're too late. It's just. Yeah, why?

[Unknown]

I don't get it. Yeah. Switzerland, Japan. Yeah. Know the growth economies. Yeah. Not great. I'd say that investors should all want independent Federal reserves and independent central banks. Seems to be historically looking the best model out there. And that about sums up my thoughts. Another one that we want to talk macro from a question here. Do you guys have any thoughts about the July trade deal deadline coming up next week? Ryan, the chaos might be returning. I'll say. I don't know what's going to happen, but if you're talking about any risk over and we're not talking about risk the day after for your stock prices, I'm talking about risk over an 18 to 24 month period. The risk seems to skew to the downside.

[Ryan Henderson]

I'd say, yeah, yeah, nothing good can.

[Unknown]

Happen, but I think not much good can happen.

[Ryan Henderson]

I'm always surprised how good news that I already thought was priced in can make markets soar even more. Like when, when sort of the war was breaking out or the US involvement in the Israel and Iran conflict or Iran. I saw somebody post, this is good for markets because now you have a positive catalyst which is the end of the war. It's like, yeah, everything gets turned into a positive catalyst.

[Unknown]

I don't. I know, I know. It's like, oh, who were getting rid of tariffs on Vietnam? And he's like, well, you put them on. The same group of people put them on six weeks ago. So does it change much? In my mind, no, I really tried to invest without that stuff in mind or investing in things where I don't believe any of this macro changing of the guard or whatever, all this political stuff matters. For example, and maybe this is a good segue into your Tesla segment. Within the bill that passed, the spending bill, it looks like the $7,500 EV tax credit is no more and that can affect Tesla deliveries which, and you can go through the numbers, Ryan, are already pretty ugly. It's not looking good.

[Ryan Henderson]

Yeah, I'm going to go through all those Tesla numbers here in a second. I do want to give another shout out real quick to one of our new sponsors, the TSOH Investment Research Service. TSOH is run by recurring guest. I'm sure our listeners have heard him a number of times. He's a friend of ours, Alex Morris. Inside his research service, subscribers get access to 6 high quality stock research reports per month, including initiation reports, as well as regular updates on current TSOH holdings and watch list stocks. There is 100% portfolio transparency on the service. The coverage includes companies like Airbnb, Celsius, Roblox, Netflix, many others. And I will say tsoh, I personally lean on him a lot for a number of my holdings. For the quarterly coverage I probably shouldn't. It's kind of lazy on my part, but he does such a good job that, that I, I kind of wait for his analysis on any of the overlapping companies that we have. It is a premium research service if you're serious about investing. This is like outsourcing a professional analyst. If you're interested, head on over to the scienceofhitting.com the link will be in the description. Again, that is the science of hitting.com.

[Unknown]

Check out if you're interested in a preview and how he thinks. 1 There's some stuff on there that is free but he's come on the show before and you can get a full look at how he analyzes stuff, how he does things. And I read it weekly so I'd recommend it as well. All right, Ryan, I'm gonna let you get into the numbers, but here is a quote I think must have been from the investor call back in April. This is from a Wall Street Journal article. Just pulled it earlier this morning. This is a quote from Elon Musk about not focusing on the cars that is our whole business, but the future of our business. He goes quote, I'd encourage people to look beyond the bumps and the potholes of the road immediately ahead of us. Lift your gaze to the bright shining citadel on the hill. Now does that get you bullish or bearish? Because this, this seems like to be a guy that's really, really, uh, got a good head on his shoulders at the moment. Seems to be, you know, not, not going through a chaotic breakdown.

[Ryan Henderson]

He's got to be. So maybe I'm wrong, but he's got to be so uninvolved in that like day to day operations of the business.

[Unknown]

Yeah, yeah, yeah, I agree.

[Ryan Henderson]

Honestly, a human only has so much time in his day and for someone with like a lot of family and two other companies or three other companies that he's running on a daily basis, I would, I would bet that a lot of the day to day is not as privy to. But let's talk about the numbers. Tesla delivered 384,000 vehicles this quarter. That was down 13.5% compared to the same period a year ago and was below Analyst estimates of 387,000 vehicles. So basically 3,000 vehicles below estimates. They are still producing more than 400,000 a quarter. Now they can kind of temper that down if they choose to, but there's a lot of fixed costs involved in running a, you know, running these big manufacturing facilities. So theoretically if you're producing less of those facilities, the margins come down and.

[Unknown]

They'Re supposed to open new capacity soon.

[Ryan Henderson]

Right.

[Unknown]

Or they just have the.

[Ryan Henderson]

Now the delivery numbers in General. Total deliveries, 384,000. That's the biggest decline they've seen I think in 10 years. Basically 13 and a half percent decline year over year. They haven't seen that in at least five years. And that's so far. All the data that I have going back, it's looking really rough from a demand perspective. But something I thought in particular was weird is deliveries of the non model 3, model X were down 50% year over year. The which I believe at this point is primarily cybertruck. I read some headlines that it looks like they're going to be canceling the cybertruck. I think it's fair to say that's been probably an unsuccessful, maybe successful in terms of garnering attention, but unsuccessful product line in terms of moving the needle financially. And then to make matters worse, yes, as you mentioned, the new bill that I believe just passed the Senate is axing the electric vehicle and solar tax credits, which have both been very helpful for Tesla demand. So I guess my question to you, it looks like there's like he said, the potholes and bumps ahead. What like zoom out 24 months does how does this get much better?

[Unknown]

The bull case keeps getting. If you have one more pie in the sky by the day. I mean if you look at just the existing numbers, declining deliveries that from the forward looking indicators are going to just keep getting worse. You are supposed to be increasing capacity. You have no new models on the horizon. So you basically shuttered R D Within any sort of new automotive stuff that isn't related to the Cyber Cab, autonomous driving or humanoid robots. The cybertruck was a total bust. I remember people telling me they would sell 250,000 to 500,000 cybertrucks a year. I mean that was entirely fanciful. I mean I would be shocked if they're selling one a year in two years from now. It's a total bust. They probably burnt a ton of money on it. The Model 3 Model Y are losing market share in all three of their big markets. China, especially Europe, especially US, not as bad. But the legacy players such as General Motors are catching up in market share rapidly. What is there to like?

[Ryan Henderson]

Yeah. And the head of their unit, what's the PE100? I don't, I don't know. I mean there's a lot of variability in the E for their pe Variability.

[Unknown]

In one direction at the moment.

[Ryan Henderson]

Yeah, yeah. There's. I think a lot of people cling to the margin expansion opportunity of level 5 full self driving.

[Unknown]

When that arrives, let me know.

[Ryan Henderson]

Yeah. The other part is, aren't they doing it in a way at the moment that isn't applicable to the rest of the fleet? Like the rest of the fleet doesn't have the equipment to like the pilot program that they tried running. They might still be running it in Austin. Those vehicles.

[Unknown]

Did you get any local. Was there any crashes? Did it do okay?

[Ryan Henderson]

I don't know. I have no idea. The. Aren't those cars specialized for this purpose?

[Unknown]

Yeah. So they essentially admitted that Waymo is right. For years they said Waymo is wrong. Don't use LiDAR, don't do this geofence thing. We're gonna do it global and have more scale because we have all these cars that are gonna have the software there. And then this testing facility testing run which is essentially something that Waymo has done for the last 10 years. They are 10 years ahead at this moment. They decided to do a small geo fest area with supervised cars. They actually still have humans in the, in the cars at the moment. And I think they are just admitting that Waymo is 10 years ahead of them. And at the moment Waymo seems to be experiencing exponential, exponential growth across the country. I do not think that is a good position to be in if this is where your entire market cap is getting based on and the humanoid robots, maybe. I know, sure.

[Ryan Henderson]

Yeah. The head start they had an EVs is the head start that Waymo has in AVs. It's at this point, it's. They've done. Not only were they early, but they've been able to iterate on and learn from basically all that they've gathered using this approach. And the idea that, well, once level 5 is unlocked, full self driving, totally capable, it's just going to, we're going to give it to everyone and it's going to be applicable to every Tesla. That's not possible. Or at least that seems to be what Tesla's. Tesla's approach is stating that that is not the direction they're heading. So I don't see where the operating leverage comes from. I don't see where they have any margin expansion unless demand really starts to pick up again. So anyway.

[Unknown]

And the credits are gone. That was huge for their margins. Good luck. That's all I'm saying. Good luck. Look, they're, they're valued at. I know I'm preaching to the choir with our audience. They're valued at a trillion dollars. So if all this stuff works out, it's not like you're gonna have that much upside. And the downside is the risk here at the moment is huge. Huge. If things go. If the numbers keep worsening in China and Europe like they are, they're gonna need to raise money within the next 18 months. It's that dire. They just. I just saw today that registrations like demand for new. I think unit sales in the month of June in Germany were down 60 year over year for the brand.

[Ryan Henderson]

Yeah, I mean it's. They will probably have an easy time raising money would be my guess. And it'll be spun as like investments in growth.

[Unknown]

But you want to hear my hot take?

[Ryan Henderson]

Go for it.

[Unknown]

They're going to do an all stock deal for Xai.

[Ryan Henderson]

I could see that.

[Unknown]

Yeah.

[Ryan Henderson]

Very easily happening.

[Unknown]

Yep. Keep dangling the carrot. Yep.

[Ryan Henderson]

Okay. In other news, Robin Hood, which had had a big event this week that was eerily similar to that of Succession, if you've ever seen the show.

[Unknown]

I love it, Vlad. He's got an interesting style. I liked his suit. Kind of funny.

[Ryan Henderson]

Yeah. I actually thought it was a pretty impressive marketing stunt. Anyways, they are offering tokenized trading to European customers. So here's a quick quote from I believe a CNBC article. More than 200 tokenized stocks and ETFs are now tradable 24 hours a day, five days a week, with no commissions or spreads. The big news here, beyond the extended trading hours, is that they are offering tokenized shares of private companies. So two in particular, and I shouldn't say shares.

[Unknown]

That.

[Ryan Henderson]

That's a bit of a loose term. Tokenized tracking value, potentially. Yeah. Two in particular. OpenAI and SpaceX. They are doing this in Europe because it's technically illegal to do this in the US still. And there are a couple of ways to kind of look at this. Some people think that this is democratizing finance. And I can. I can see the theoretical argument for that. I'll talk about that in a second. But they are giving, or they are trying to give the general public the ability to invest in a private enterprise. The reason this is illegal is really because of what happened in the 1920s in the United States, where this, this pretty much was a thing essentially in the US in, in the 1920s. And really before that, too, there wasn't much laws governing this in terms of what was required to disclose to investors. So companies could say, we're building the next railroad, and tell a beautiful story. And they. They didn't have to report any financials.

[Unknown]

No disclosures, no audits, no three financial statements every quarter.

[Ryan Henderson]

Right. And so ultimately, a ton of people got hurt by this, obviously The Crash of 1929, the Great Depression that followed. And because of that, in 1933, they passed the securities act. And they also passed the Exchange act of 1934, Congress did, which basically just stated that you. If you're going to sell stock or ownership to the public, you have to disclose certain things, you have to have certain audits, you have to. Basically, all the things we see today was started by this. So what Robinhood is actually doing is they are offering the general public the ability to invest in contracts, or I guess call it shares if you want, but they're not in companies with. Without those companies having to disclose their financials. And here's what OpenAI had to say. They put out a tweet that said as soon as this got announced, they said, These OpenAI tokens in quotes are not OpenAI equity. We did not partner with Robinhood. We're not involved in this and do not endorse it. Any transfer of OpenAI equity requires our approval. We did not approve any transfer. Please be careful. So at first I was like, okay, I'm honestly very confused what this is backed by. So here's the technical description of what's happening. It says in quotes, these Tokens are financial derivative contracts that, quote, track the value of OpenAI stock, not real shares. You can't redeem them for actual equity or voting rights. Robinhood holds shares in something called a special purpose vehicle, which in turn holds actual OpenAI shares. The token represents an indirect exposure to that special purpose vehicle. So this is not direct ownership in the company itself. Now, sorry for all the technical jargon, but that is a big deal. A because as a shareholder of a company, you have certain rights, you have certain votes, and that does actually, at the end of the day, still matter. But this is you're basically buying the special purpose vehicle. You're not really buying OpenAI. Now, they are technically mirroring it because it's basically just like investing in a VC fund, but opening it up to anyone, essentially. So there's kind of the democratizing finance, I'm putting this in air quotes view, and maybe you could call it kind of a libertarian view, is that they are opening this up to anyone and so it's freeing up markets. This has previously been only accredited investors that could access these types of investments. Now it's open opening it up to anyone. You don't have to invest in it if you don't want to. The company doesn't have to disclose their financial statements if they don't want to. Look, I get that that's quote unquote, democratizing finance, but we tried this. America has done this. And my guess is that I think people will take advantage of this and companies will take advantage of investors through this process. And there's a reason that these protections have been in place. And I personally think they've been good for capital markets. I guess I'll open the discussion up to you. What do you think about this? Do you see this as a good thing at all?

[Unknown]

Well, it sounds exactly like Alibaba's adr, so can't be too different from that. Personally, will I be buying something like this? No, I worry. So the problem is, okay, you're buying exposure to a special purpose vehicle. So essentially you're buying an ownership stake in that and that's technically trying. That vehicle is trying to buy an ownership stake in OpenAI. But I worry if you're going to be able to perfectly track, okay, I put this amount in and then OpenAI's say their valuation doubled. Am I really going to track those returns when I get the money back? To me, that would be my number one concern. I honestly have more sympathy for robinhood here than OpenAI. OpenAI is complaining. Here's a Thought you are one of the largest businesses in the entire world. Go public. That's my thought. Do it. I'm sorry.

[Ryan Henderson]

See, here's the thing. And, and honestly, maybe it's interesting to buy the tokens for this reason. Then they have to deal with the scrutiny of a stock or the pressure of a stock that doesn't just go up because they don't ever have to mark their valuation down as a private company. And until they're.

[Unknown]

So if they're so worried about this, go public. Like, that's all I'm saying. Robinhood is just, they're trying to do it through the letter of the law. And I agree with you. The total downside here is scummy, scammy companies taking advantage of this and defrauding investors. There should be concerns about that. But I honestly think OpenAI has got more of an issue than Robin here. Robin is just trying to build a business. And yeah, I understand small companies saying, look, we have to spend a couple million dollars a year on audits and all the stuff regarding SEC disclosures, Sarbanes, Oxley, the stuff that came out, you know, in 1933 that you were just mentioning, all the stuff that has led up to today. But if you're a large enough company, go public, solves all your issues.

[Ryan Henderson]

Yeah. And I've seen a lot of people saying, hey, I can buy zero day out of the money call options. I can buy meme stocks in America that have no requirements in terms of disclosure. I can make bets on what tie. Donald Trump Award in his next speech. Like what color tie? There's so much random stuff, random places that you can put your money. Why draw the line here? But I would say, I would prefer if markets went like the rest of those markets were regulated properly as opposed to, well, those aren't regulated. Let's make the stock market unregulated too. So anyway, I'll leave it there. Yeah, I do think you're right. There's nothing wrong, I guess, with what Robinhood is trying to do. And they're trying to do it within the letter of the law.

[Unknown]

So they do worse things and they're listing fart coins. It's ridiculous stuff to make money because there's insanely high fees they can earn on, trying to use a nice term, ignorant buyers that lose all their money and then the fees roll to them. This is not worse than that.

[Ryan Henderson]

Correct. All right, before we move on, I want to talk about Blue Chippers Club real quick. Blue Chippers Club is a tight knit community of stock Focused investors. Brett and I are a part of that community and inside the community you get to share and break down your portfolios, pitch stocks, receive feedback and participate in weekly calls. I recently shared my report I believe of remitly on there. But Brett you recently reported your shared your report of the real brokerage as well as the Mexican airport. So you can look at them on there if you would like. There's a lot of great value that you can get out of a true tight knit online community, especially with those weekly calls. I think it's a just awesome to join every week. If you're interested in joining, head on over to bluetrippers club.com and hit apply. The link will be in the description again that is bluetrippers club.com all right, let's jump to your topics. I feel like I've been monologuing this episode. So what do you have?

[Unknown]

Okay, Circle banking licenses for stable coins or some interesting developments in AI hiring plus a funny anecdote talk AI hires. Okay, this one was more of A lot of different things are kind of forming together in this theme that people are talking about, which is more scrutiny around workers and people being productive. More executives talking about how AI is making their workers much more efficient and that they're going to need fewer total workers doing the same amount of productivity as they're doing today and some automation at Amazon Warehouse. So first one I have is some quotes around and there's some good reporting out there now about CEOs saying AI will lower total need of workers. We had Ford CEOs saying AI will replace about half of their white collar jobs. Amazon and JP Morgan says their total headcount will fall. Now those are two of the largest employers in the entire country. Microsoft just announced they are laying off another 9,000 people. That's about 4% of their workforce. It seems like when even though the economy is doing just fine, a lot of these companies are reporting record earnings. They're growing in their like they're it would seem that when you grow like this, when these companies are growing, revenue keeps growing for Amazon, the Magnificent Seven, all of them. Usually that correlates with needing more headcount, but they're actually saying we're lowering headcount. This could be a, that I, I think people are underrating how this can affect these companies and their profitability and just the economy at large. Now the second one I want to see here is and maybe you heard this because you're kind of in, you work in the startup world. Did you guys hire a Man named Soam Burek?

[Ryan Henderson]

Hopefully not, but I heard about this. Yes.

[Unknown]

Okay, so there was a. There's a man named Soam Parekh. Apologies if I'm mispronouncing him, but he seems to be kind of a criminal, so not really feeling too bad about that. But he got a ton of remote jobs at AI startups and it turned into a bit of a scandal when all of these executives and founders, they kind of started messaging each other and asking if they employed him and an absurd amount employed him. It's kind of an example of these. There's a subreddit out there called R not unemployed. It's overemployed or double employed. You'll be able to find it. It has like 500,000 people that are on it. There are probably thousands or tens of thousands of people that are these type of workers with multiple jobs working in remote. I have another tweet here. I actually don't know what it is. Oh yeah, there was one famous one on Hacker News. A famous post on Hacker News from a guy that said, I currently have 10 fully remote engineering jobs. The bar is so low, oversight is non existent and everyone is forgiving. For under performance, I can coast about four to eight weeks before a given job fires me. Currently on a 1.5 million run rate for comp this year.

[Ryan Henderson]

That was during COVID which I.

[Unknown]

That was a little while ago. But this type of stuff from the scandal that happened today shows it's still happening. Now, the second thing related to this is North Koreans getting hired at tech companies as spies. This one maybe you've seen flying a little more under the radar. Here's a quote. At first, Pemba Sherpa seemed like a great employee, eager to work. He began as a $35 an hour coder who sharpened up an app for his boss, Marlon Williams. But a few years later, Williams fired him, thinking he was probably a crook. But on Monday, federal authorities accused him of being something even more nefarious. According to court filings and cyber investigators, the man claiming to be Sherpa was actually Kim Kwong Jin, a North Korean cyber criminal using a stolen identity. He was a part of a group of men who traveled the world looking for ways to make money for their heavily sanctioned government. Their methods of choice were drawing paychecks and stealing from employers. So you kind of think, what's the guardrails for hiring at these companies? But the second order effect, I think, is, shouldn't this actually make you bullish? These companies are printing money and it seems like they have the hiring practices of a teenager.

[Ryan Henderson]

I think this is probably one of the downsides of AI. Oh, well, partly AI, because at this point you have people creating AI resumes for AI filters in the hiring process. And I think it's. There are people like the one you talked about who's been in the news all week that are good at technical interviews and they can like thrive in the interview.

[Unknown]

Exactly. What to say.

[Ryan Henderson]

Yeah, exactly. Go to getting hired and then kind of you coast. In a startup type environment, I don't know how you don't weed these out.

[Unknown]

Like, well, more personable.

[Ryan Henderson]

Sorry. I could see how they slip through the hiring process because they maybe seem qualified. You don't do total thorough background checks. Great. But you will quickly realize that they're unproductive in a startup environment. Like it's not enough. You don't have so many employees that someone could be really unproductive for six months and you not notice. For most startups would be my guess. But I, I saw an interview with him. Apparently he said there are two sides to the story. And he said I was in.

[Unknown]

That's like SPF saying there's two sides to the story.

[Ryan Henderson]

Yeah, I watched the interview and he's like, well, I was in a really dire financial situation, so this is what it called for. I'm like, okay, you were broke.

[Unknown]

That doesn't matter, dude.

[Ryan Henderson]

You can break the law or your, your employment agreements. Not the law. But yeah, anyway, it is concerning. You know what I thought you were going to mention here was the absurd signing bonuses from Meta.

[Unknown]

Yeah. Have you seen some of these numbers? Yeah. I wonder if the North Koreans are trying to get after this one as well. That one might be more in person for the actual, you know, 2% of people that create the value of big tech. From what, from what people say. Yeah, I've seen those. It looks to be a Zuckerberg money shoveling task. Just like he did for the Metaverse. He's unafraid to spend a boatload of money. Seems like he thinks that they're behind in AI and they need to get better. They need to get more researchers. If you believe this is a trillion dollar opportunity, going after the researchers that matter for a hundred million dollar contracts, probably fair, but maybe they're not sports fans and don't realize the thing that everyone is thinking, which is you have to confirm that they have to stick around for multiple years. Because in this world a lot of people jump around and someone could take $100 million and then just go, whoop I'm leaving in six months.

[Ryan Henderson]

Yeah, I, I, I saw. So basically for the actual numbers, apparently. So Meta acquired, what was the company called? I honestly can't remember. Scale AI basically is an Aqua hire to get their CEO to come run the AI department for Meta. And it was a, I believe $30 billion valuation. Roughly on the acquisition it was $15 billion, I think for the stake in it, which is like a 48% stake, all to get the CEO. And now they're going out and paying $300 million signing bonuses to recruit people over from companies like OpenAI and some of the other notable AI companies, including $100 million salaries. That was kind of the one that really stood out to me. I, I kind of agree with you. My hot take here is that I think this kind of makes sense. Like if you think about the, if these people are truly worth it, you think about them as like the top athletes that are going to drive serious revenue, which at a company, talent wise.

[Unknown]

Yeah.

[Ryan Henderson]

At a company like Meta, when you can apply a lot of these AI features to a massive pool of users, there is pretty clear revenue unlocks that emerge quickly. And so if you have the talent in AI, I don't see anything wrong with paying up for it. If you can see that the revenue contribution will be there. If they're doing this just to come out with them, like make their Llama.

[Unknown]

4 better passive benchmark. Yeah, that's what I worry is happening. And yes, they seem again, Meta seems to be admitting that they're behind I think right now. Well, some of the other AI startups are not nexpran, but to me it seems like a two horse race on the consumer side because I think Anthropic is More Enterprise in OpenAI and Alphabet at the moment. Does Amazon's native stuff do anything? Does Microsoft's native stuff do anything? No. Did. Microsoft signed a great deal with OpenAI and now they're feuding over it, but feels to me like it's a Gemini Chat GPT race at the moment.

[Ryan Henderson]

Yeah, the wild stat that I found this week, Microsoft spends 47% right now, is spending 47% of its operating cash flow on CapEx. Pretty sure two decades ago they were spending about 5% of their operating cash flow.

[Unknown]

Sounds about right.

[Ryan Henderson]

GM, which is like the, one of the notoriously most capital intensive businesses out there, spends 43%. Microsoft is more capital intensive at this moment than GM. Now maybe the return on that capital spend is potentially higher for Microsoft, but I think that paints a picture of just how Capital intensive big tech and the hyperscalers have become.

[Unknown]

Yeah, all of it's another example. All of the AI topics we have discussed today, it only works in the, let's say positive bullish direction. Only works investing wise, stock market wise. If the AI spending shows up. It is right now, but they're just, it's like going all in and keep going again. That's how I think of it. We have. I want, I want to talk about this stat too. I think this one again is something underplayed under the radar versus what other people are talking about just in regards to the OpenAI chat GPT vs Gemini race. And it's Amazon's warehouse automation. Here's a quote from an article. One of Amazon's newer robots called Vulcan has a sense of touch that enables it to pick items from numerous shelves. Amazon has taken recent steps to connect its robots to its order fulfillment process processes so the machines can work in tandem with each other and with humans. And apparently they are very close to the full integration of robots in their warehouses. If we look at the chart we have here, maybe on. I guess we don't have a newsletter directly attached to this episode, but you can find these online. Maybe we'll post it online. The number of Amazon employees per facility is lower than it was in 2015. And the packages handled by Amazon end to end per employee. So on their own delivery network has gone from essentially zero in 2015 to 4,000 per employee. So the efficiency of the warehouse workers are getting much, much higher. And over the last decade Amazon has invested a ton of money up front to build this robotics and that's probably greatly impacted their margins. And I think now we're going to see the fruits come to bear here. And this type of automation is going to lead to a lot of margin expansion across the E commerce business.

[Ryan Henderson]

Okay, I will say I'm going to raise a hand here on this first chart because number of Amazon employees per facility. It includes the corporate office employees which.

[Unknown]

Okay, well either way off, if I'm.

[Ryan Henderson]

Not mistaken, they had a big layoff which maybe at the. Which coincided with them adding a bunch of facilities and expanding fulfillment capacity. So either way there is some efficiency here, but I think it might be a little bit exaggerated on this chart.

[Unknown]

Yeah, it's a weird. Yeah, that is a weird chart if that is added into the definition. The second one I think tells the story.

[Ryan Henderson]

I don't understand the second chart. How did it.

[Unknown]

It was at zero because they used to use UPS synthetics. So this is end to end.

[Ryan Henderson]

Right.

[Unknown]

Yeah.

[Ryan Henderson]

Wow. Yeah. And the, the crazy part is this isn't showing up in the margins. They just continue to try to be the low cost provider. Actually, it is showing up a bit in the margins, but they continue to just lower costs and be the hardest company in the world to compete with. I'll also take this time to give a shout out to Fiscal AI, one of our sponsors. We mentioned the quarterly deliveries for Tesla earlier in the episode. Those were up within I believe 10 minutes of the report. And so you could automatically see Model X, Model 3, total deliveries, total production, all those stats and tons more on thousands of companies using. If you have a fiscal AI subscription, which if you use our link, fiscal AI chitchat, you'll get 15% off any of those subscriptions. I want to. We've kind of been beating around this topic a little bit, so I want to ask it you asked on Twitter, what topic should we talk about this week? And the Dutch investors, I believe it's called Dutch Investors is the Twitter handle said, do you think AI is currently over or under hyped based on its potential? So you and I have been somewhat skeptical, especially in the early days. We were definitely skeptical. I'm curious.

[Unknown]

Yeah. When Nvidia went up like 100% and we were like, well, but hey, it was right. People had the vision.

[Ryan Henderson]

And I remember thinking like Nvidia's at a $300 billion market cap. That's absurd. It's 10x.

[Unknown]

Maybe it was like 700 billion.

[Ryan Henderson]

But anyway, what are your thoughts now?

[Unknown]

I mean usage is growing and seems to be accelerating. There should be a difference in how you talk about look, is the growth, are more people going to be using Gemini ChatGPT, what have you in 5 or 10 years? Almost definitely seems to. I would have high conviction in saying yes, but there's a difference in saying that versus oh well, from an investing perspective, are we going to. Are these stocks going to work? Because the Internet was growing at what, 100% year over year 1999-2000-2001-2002. A lot different than the stock price's performance. And there's also a difference between the picks and shovel play working or not versus AI usage. There could be and I'm just talking about how I really don't know, like under overhyped. In what capacity? Like investing AI spending on data centers. There could be efficiency gains that lead to much less spending flowing to the computer chip part. There is so much we don't know. There are companies claiming that we're going to have artificial general intelligence within a couple of years. That could either be true or not. I'm guessing it's not but if it is, that changes a lot of stuff as well. Anyone that has some sort of hot take on whether it's like from an investing perspective, what's going to happen I think is way overconfident. But if someone said do you think AI is currently over under hyped? I don't even lean either way. I think probably properly hyped. Everyone's using it, some stuff's overhyped, some stuff under hype. What do you think Ryan?

[Ryan Henderson]

Yeah, it is. I think people, the Bill Gates quote of innovation tends to be overestimated in the short term, underestimated in the long term. I think it applies here but there, there is a lot of hype for it but there is a lot of usage matching it and the, the one thing that I find has been so encouraging about it is the amount of businesses being built on top of it. And, and I'm not talking about oh look, Booking holdings added an a chat interface to help you come up with your way to book a flight or a hotel. I'm talking about people powering really critical functions to their business using the reasoning of foundational model and they can really strip out a ton of costs and do some powerful stuff under the hood using an LLM. I thought I was reading through Nvidia's. I was kind of skimming Nvidia's annual meeting and there was actually a quote that really stood out to me here from and this is particular to Nvidia and some of the hype around that. But Jensen Huang says Blackwell's rollout has been extraordinary. It debuted with $11 billion in sales in the fourth quarter and went on to more than double the contribution in our first quarter this year. Easily the fastest ramp in our history. He says today nearly 100 Nvidia AI powered factory build outs are in flight around the world. That's double what we saw a year ago and they're getting larger. And the average number of GPUs per factory has also doubled.

[Unknown]

That is so it's not slowing down yet. It's not slowing down yet, but people need to understand this is exact. I'm not saying it is, but this is exactly what a boom bust cycle looks like and usage on the end consumer, you know, say for example our sponsor fiscal AI usage through a boom bust from the stock market and supply perspective will probably keep growing as will the rest of these products. But this type of spending Boom typically and we don't, we don't know if we're here yet but it typically leads to. To an eventual bust. That's just how it works. Happened to EVs, happened to telecom, happened to oil many many times and different sorts of energy things. Happened to the automotive business, happened to the railroad business. I could go on and on and on. This infrastructure boom bust is going through the classic playbook and I would. It would be hard for me to say it's not eventually going to happen. Even though usage is growing like a weed.

[Ryan Henderson]

There are certainly the do the pets.com versions of the AI revolution if we want to call it that. I mean the quantum stocks are I think you could call those sort of.

[Unknown]

The pets.com well that's like Big Bear AI. There's the ethers, there's some ridiculous ones. I'm interested in what the world comm is. The WorldCom will show up I think.

[Ryan Henderson]

Yeah, I don't. I honestly need to go back and study my dotcom history. The Intels of the world there were so many companies.

[Unknown]

Bubble history.

[Ryan Henderson]

Yeah but the thing is it's so concentrated. It's so concentrated in a few players like. Well maybe I shouldn't say that. The semiconductor industry broadly there are a lot of companies that have seen huge tailwinds from this that I'm not thinking of but Taiwan Semiconductor, Nvidia, a huge concentration of the spend on AI infrastructure has been allotted to them. I feel like that wasn't the case during the dot com it was a little more spread out.

[Unknown]

Yeah, perhaps, perhaps And I guess maybe it's because these were already the leaders in their field if you get what I'm saying. Whereas the other players were kind of sprung out of nowhere. Look it's, it's the only thing I'm confident saying is and without any timeline or any invest I have no high conviction on anything besides this. It's going to go through a boom bust cycle. It doesn't mean I'm going to get long or short anything. It's going to. This is quintessential technological boom. Eventually we build too much, then it busts.

[Ryan Henderson]

Well while we are on the topic of graphic processing units, my largest holding coupang had an announcement. Do you want to go through this?

[Unknown]

Yeah, close to my. Yeah, close to my largest holding as well. Guess we're in the core weave business now. Ryan, here is the quote and it came out of nowhere. Asked some people that also are close to the stock they said and we had no idea but maybe they just Want to make something focused in Korea for this industry. Coupang today announced the rebranding of its AI cloud computing service, which I didn't know even existed. They're a very secretive company as Coupang Intelligent Cloud cic. CIC represents the evolution of Coupang's AI infrastructure over the years. Coupang has extensively utilized its AI computing infrastructure to enhance its services and operations and also provides GPU as a service, including to external parties. Same thing. Definition of core weave. I guess it's nice that they have a lot of operating cash flow they can pour into this. They're really going after. We're just going to copy everything that Amazon did just 15 years later. This is one and I'll let you talk after this because we do have to wrap up where it reminded me how much or how important it is that you trust management. If this was a management team I didn't know much about, I would say, what are they doing? Are they just trying to get on this hype? But the fact that it's founder led, I really like Bomb soup. Kim. Yeah, I'm comfortable with this.

[Ryan Henderson]

Yeah, I would be worried if it was just about AI hype. The only thing is they're actually branding away from the AI hype kind of. So if I kind of reconfirm, I don't know. They are. It was the AI cloud computing service. That's what it was. Which sounds sexy for the era of AI. Now it's the Coupang Intelligent Cloud. So, yeah, I would be a little. I bet 90% of shareholders were like, wait, they have a cloud division?

[Unknown]

Yeah, I'd like to know how big it is. Yeah, it's. Well, I'm sure they'll ask on the conference call and then they'll say, well, we're working hard. And yeah, that's about it.

[Ryan Henderson]

All right, I, I think that's about time. So thank you to all our sponsors for advertising with us. Thank you to the science of hitting research service. Thank you to ibkr. Thank you to Blue Chippers Club and Fiscal AI. Thank you everyone for tuning in to this episode, this power hour. And I know we've got a lot of new listeners as well. Listenership's been pretty good here at Chit Chat Stock. So thank you for the new listeners for tuning in. The best way you can support the show, if you like it, is to give us a review wherever you listen. That really helps us grow and yeah, that's going to do it. Anything Brett Rye says is not formal advice or recommendation. We are not financial advisors. We may buy, sell, or hold any of the securities discussed in this podcast. Thanks again for tuning in. We'll see you next time.

[Brett Shafer]

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