
Coatue founder and portfolio manager Philippe Laffont shares his perspective on AI, the investing mistakes he’s made, and much more in an extended interview. Once a ‘Tiger Cub,’ Laffont now has $90 billion under management and is looking for his next bet in space and tech. Plus, a tech selloff has rocked global markets, the Senate has advanced a housing bill that limits private equity purchases of single family housing, and Rep. Ro Khanna (D-CA) has challenged Elon Musk to a debate. Philippe Laffont 19:40 In this episode: Joe Kernen, @JoeSquawk Becky Quick, @BeckyQuick Katie Kramer, @Kramer_Katie
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Katie Kramer
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, a market sell off tech stocks routed across the globe. We have a special interview with noted investor Philippe Lafont of Cotu. With 90 billion under management, his bets are worth paying attention to like a stake in space.
Philippe Lafont
X Mining is going to move to space. Tourism is telecom is going to move to space. Data centers in real estate are going to move to space. So it feels like just a really
Katie Kramer
big idea and big bets on AI.
Philippe Lafont
All the stuff around agents and the ability to have thousands of people working for you, that sounds like one of the bigger idea, at least in my investment career.
Katie Kramer
What Lafont is betting on next?
Philippe Lafont
Are we going to work with Chinese AI companies? Most likely not. I think you'll have the Western AI on one side, you'll have the Chinese AI on the other side. And only countries like maybe Brazil, India and Indonesia will sort of do a bit of both.
Katie Kramer
Plus all the rest of today's news that got us squawking from Wall street to Washington to the social media, back and forth between Elon Musk and Congressman Ro Khanna who had big accusations for the world's richest man.
Joe Kernen
Musk immediately took issue with that and all weekend on X there was called him bro. The robbery.
Katie Kramer
It is Tuesday, June 23rd. Squawk Pod begins right now.
Philippe Lafont
Stand back. You buy in three, two, one.
Joe Kernen
Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out today.
Becky Quick
Asian markets giving up early Gains today ending deep in the red. South Korea's Cosby led the decline, falling 10% in a session that included a 20 minute trading halt. The Kospi though has shot up this year, nearly doubling since January 1st. So keep that in mind.
Joe Kernen
Key 94% year to date.
Philippe Lafont
Yeah.
Becky Quick
Key AI names, SK, Hynix, Samsung, both fell more than 12%. Shares of those companies have also multiplied this year. The Nikkei in Japan fell 3.5% following eight straight sessions of gains. So check out the charts and then put that today's sell off in perspective.
Joe Kernen
We are also watching shares of Space X. That stock coming off a 16% drop yesterday following declines of about 5 and 4% respectively last Wednesday and Thursday. This morning the stock is trading at about $149. That is just below the opening price of the IPO of $150. Shares began those trading at the beginning. What was it now, seven sessions ago? Maybe started on Friday? No, not even. It's been about six sessions since this happened. SpaceX stock jumped in its first few days with the company's market value surpassing Amazon's and briefly Microsoft's. This pullback that we've seen over the last few sessions is a decline of about $600 billion in market cap. SpaceX also turning to the bond market for the first time as it looks to raise more money. Post IPO reports say that the company will probably issue more than $20 billion in bonds with maturities of somewhere between five and 30 years. The company says that it will use proceeds from the debt sale in part to pay back a bridge loan. Before this IPO that we saw on all of these things. You know what's interesting about this? There had been so much concern about what was going to happen when this stock was going to go into the NASDAQ index. It was 15 days. So all of this activity has happened before it's gone into the nasdaq. I think there was another index somewhere along the line that put it in earlier. But all of this movement that we've seen to the upside and then the downside was before it got put into the NASDAQ index.
Becky Quick
So if you were pricing the bond, the 30 year bonds, what do you think you'd need to offer to get someone to take a 30 year piece of paper for SpaceX?
Joe Kernen
I mean, you think it's tougher because maybe you don't get the retail investors that you get.
Becky Quick
I guess in 30 years they ought to be doing great or they'd be. I don't, I don't Know, it's just a long way off.
Joe Kernen
My guess would be you'd have to offer a little more just because retail investors are going to go, they're going to be junk. Not into the bond or if it's junk, I don't know. That's, that's a good question. On the rating, I, I saw some
Becky Quick
ridiculous thing on this classic. You know, I don't even want to mention the aggregator because it's just, it's so annoying. I wish I'd stopped looking at it completely.
Joe Kernen
I know what you, I know what
Becky Quick
you're talking about now. They like to never click, click on it again. So they never get a click. However you do one of the things they say. No, they, they, they so on Drudge.
Philippe Lafont
Yeah, yeah.
Becky Quick
They don't care if what they say is either false, misleading or just completely.
Joe Kernen
They just point to other, point to other reports.
Becky Quick
Gets lowest rating possible. So I'm like, oh, oh, is this for the, at some ESG rating. And I think someone that knows SpaceX says it might have been Elon said, yeah, we're not launching a lot of electric rockets at this point. There might be a couple of emissions but you know, for Drudge, doesn't matter rating, rating, you know, they could, could care less about and they'll probably, you know, now I'll be on there God knows what. Shares of Google Pair and Alphabet, coming off their worst day in more than a year. The stock dropped 5% yester Alphabet, dealing with two high profile employee exits. Last week, Google's vice president of engineering announced he was leaving the company to join rival Open Air. Friday another top engineer said he would leave Alphabet for Anthropic. In addition, a Wall Street Journal interview with Microsoft CEO Satya Nadella may be spooking investors. He called for less dependence on what he called AI giants. And you have any interest in AI giants or AI or futurism or just technology starts really. Philippe is going to be, Philippe is Philippe Lafont. Last time Philippe Lafont was on a couture, I think we were asking him, he went to mit. He was a tiger cub. He started this thing in 1999 with I think $10 billion. Last time he was on, I think we said he had 55. He said, no, I got 70. And today it's 90. It's 90.
Joe Kernen
And although maybe a little less with the sell off globally this morning.
Becky Quick
Maybe, I don't know. Yeah, but he'll be on at 7 in studio and he's got some huge bets on like ASM. He's got Nvidia. I think he sold almost 2% of what he had, so 98%, I would call a lot, something like that. And has moved into. He's got some interest. He was in Vernova, which is going to be, you know, they're getting all the orders to power the data center so long before people figured out. And it's tripled since he's been. These are huge numbers that. I mean, big numbers. When he takes a stake in something, I think ASM is like, I don't know, a lot. 600. Yeah, a lot.
Joe Kernen
Yeah, it was a lot. I read through those notes too. Just where he sees things headed because he's always thinking like the next.
Becky Quick
He is, I know, ahead of anybody
Joe Kernen
else figuring it out.
Becky Quick
Andy's French. I talked to him a little yesterday. I said, and your French? Well, he laughs when I say that it's capitalism. It's like,
Joe Kernen
you know, he understands capitalism.
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Right.
Becky Quick
Maybe not totally comfortable with it, but
Joe Kernen
he, he understands that we're going to get a long time to talk with him, which is very exciting. By the way, the question they had on SpaceX bonds, they're triple B tier.
Becky Quick
They are.
Joe Kernen
They are. Moody's, Finch and S and P are all rating them triple B.
Becky Quick
That's not junk then.
Joe Kernen
No, not at all. It's investment grade.
Katie Kramer
Mr. Cornyn, Ms. Cortez, Masto, Mr. Cotton.
Becky Quick
On this vote, the yeas are 85 and the nays are 5. The motion to concur is agreed to the Senate passing that housing bill that would limit the number of single family homes that major investors can buy. The measure passed 85 to 5 and followed months of debate spanning both chambers of Congress. We've talked about it all along. We had Senator Scott on just a couple days ago talking about it. And this is kind of not just his baby, but one of his babies is meant to make homes more affordable at a time when both major political parties are trying to spotlight their work to bring down the cost of living. Ahead of the midterms last week, lawmakers found middle ground between the House version of the bill, which was viewed as more friendly to Wall street, and the Senate's version, which included more restrictions on institutional investors. And the House is expected to vote on the bill later this week. President Trump has signaled his support for the measure and he could sign it. So bipartisan. Crazy. That makes me think it can't be that great.
Joe Kernen
Elizabeth Warren was talking about it.
Becky Quick
Interesting thing. I know.
Joe Kernen
I'm proud to be a member of the Senate.
Becky Quick
Maybe that's why I think might not be so great.
Joe Kernen
We are closer than ever to passing the biggest housing bill since 1990, when the average price of a home in America sold for $150,000. Today, 36 years later, the average home is selling for over $500,000. Well, look, if there are things that you can do that both parties that can agree on and kind of move them quickly to improve, I'm all in favor of it. I'd love to see more bipartisan things because there are things that make complete logical sense. And if you can get enough of those 535 people to agree on it, great.
Philippe Lafont
Well, there's.
Becky Quick
They want to approach housing differently. There's a lot of red tape. That's what the Republicans want to get rid of. But I think some of the President Trump in the populace, in the populist, in one of his populist streaks, is, doesn't want big institutional investors buying up and raising the price of houses. But a lot of times they're refurbishing rentals for people. People got to live somewhere whether they own a house or not. I mean, you don't want to totally take the big money out of.
Joe Kernen
And that's why the President has come back to this idea of you need to lower interest rates, too, because lower interest rates would make it more affordable on a mortgage percentage. And you wonder how long Kevin Warsh will have before he gets pressured on that again.
Becky Quick
Money started at 95, 90, 85, 80, 75, 73.
Joe Kernen
Talking about oil, I was like, what are we talking about? You lost.
Becky Quick
That's oil.
Philippe Lafont
So.
Becky Quick
Well, 73, 73.
Joe Kernen
It comes down significantly.
Becky Quick
Certainly. It's not like if I was doing dot plots, I definitely would.
Joe Kernen
Well, he's not going to do a dot plot.
Becky Quick
He's not. But the idea of raising is, I think, getting less and less.
Joe Kernen
Oh, I agree. But if you're looking for a quick fix to make a price of a mortgage cheaper, that's the easiest way to go at it. And, you know, when everything else takes more time to develop and to show up in the marketplace, the ultimate answer is you've got to build more housing. To build more housing, if there's a bigger supply, it will bring down the prices because it will meet demand.
Becky Quick
The reason that.
Joe Kernen
And that takes a long time.
Becky Quick
The sea change in what we thought the next move in interest rates would be when we went from a cut to no action to a possible raise, a lot of that was oil. A lot of it. So now oil is 73, but we still got how many. How many years we've been above 2%?
Joe Kernen
What was it? 63 months?
Becky Quick
63 months. So the problem is still there, still ingrained, still built into whatever.
Joe Kernen
The stickiness.
Becky Quick
Yeah. So oil can't solve that, but it at least moved us back to where we weren't absolutely sure the next move,
Joe Kernen
that the next move was going to be a raise. California Democratic Congressman Ro Khanna challenging Elon Musk to a televised debate of the impact of speaker spending cuts that Mesk led during the Department of Government efficiency push. In an interview with cnbc, Khanna said that he wanted to get into what happened at Doge with Musk and explain why he supports a wealth tax. Earlier yesterday on his social media platform X, Musk said that Khanna should be sued or even jailed. Musk took issue with Khanna's recent sighting of a study in the Lancet that claims cuts to the U.S. agency for International Development could contribute to the deaths of more than four and a half million children. Doge effectively shuttered USAID as it worked to slash spending on X. Yesterday, Musk said the standard applied by Doge was very simple and easy. Provide contact information for the recipients of aid so that we can confirm that it is not fraudulent. This all really started over the weekend when Ro Khanna made some comments on a podcast where he said, you know, Elon Musk was responsible potentially for the deaths of four and a half million children. Musk immediately took issue with that. And all weekend on X there was. He called him Roe the Robber. He said that his stock trades were the most of any.
Becky Quick
Well, yeah, but the actual quote, Elon called Ro Ro the Robber. But it was on the I've had it podcast. And the quote was exact quote was, they're celebrating that he created 4400 millionaires, but they don't talk about the four and a half million children around the world who he possibly sentenced to death. Yeah, by dismantling usaid.
Joe Kernen
Yeah.
Becky Quick
Call for must to be subpoenaed. And then he said that it didn't dismantle it. You just had to prove that it wasn't fraudulent because we know how much fraud was actually found.
Joe Kernen
One of Elon Musk's responses on Twitter was, look, we found a lot of. A lot of aid that was being funneled to politicians and to others. And some of them pled guilty with some of the things that went through too, but got heated very quickly. Ro Khanna came on yesterday and said, I thought he was a defender of free speech. I should be able to say these things. Let's do it together. But Ro Khanna is also kind of vying for the White House potentially in the next election.
Becky Quick
It's not good to indirectly. You know, someone once said that, you know, I killed 100,000 people because of COVID Yeah. For supporting Donald Trump. So it's not good to make that leap to. Do you think.
Philippe Lafont
No.
Joe Kernen
That you're killing people.
Becky Quick
I mean, loose lips sinks ships.
Joe Kernen
Is that where you're headed?
Becky Quick
I see.
Philippe Lafont
Yeah.
Joe Kernen
Anyway, this is something that I'm sure we will see more of and we'll continue to hear about it.
Philippe Lafont
Tease will be next.
Katie Kramer
Coming up on squawk pod. 90 billion under management. A track record of big successful bets on technology. It's Tiger Cub Philippe Lafont, founder of cotu.
Philippe Lafont
That was one of the bigger mistakes I think that I've made in video selling it.
Katie Kramer
Even he regrets a few things.
Philippe Lafont
At what price? I think the question is, should we buy? But at what price? It's already sold. Sell cheap.
Katie Kramer
Plus CO2's bet to buy land for data centers and its investment in SpaceX right after this.
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Philippe Lafont
investing involves risk, including risk of loss.
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Katie Kramer
Welcome back to SQUAWKPOD from cnbc. I'm producer Katie Kramer. We bring you today Philippe Lafont. He's the founder and portfolio manager of CO2, an investment vehicle that is both a hedge fund and a venture capital arm. And $90 billion under management. Lafont made a name for himself at a different investing firm, Tiger Management. He's one of The Tiger Cub Cohort. That's a group of investors who learned from the late Julian Robertson at Tiger. Tiger was one of the very first hedge fund. Now for Lafont, CO2 has been on a tear. About a year ago, it launched the CO2 Innovation Fund, or CTEC, which got a boost from $1 billion of seed money from the offices of Michael Dell and Jeff Bezos. That fund's holding include things like Anthropic OpenAI, Amazon, Samsung, Kalshi Micron and SK Hynix, South Korea's most valuable company. Also, CO2 launched a venture called New Frontier that began snapping up land for data centers. Turned to be a Pretty good idea. CO2's portfolio includes SpaceX Anduril, Databricks and many others. And almost 60% of its holdings are in it. The second most represented sector is financials. Now here's our Joe Kernan on set with Becky Quick, kicking off an extended conversation with Philippe Lafont.
Becky Quick
You're very young to be this incredibly accomplished and wise and everything else mit, right.
Philippe Lafont
I'm not sure about why that's the only thing.
Becky Quick
You're pretty, pretty darn wise, Philippe, but it's great to have you, especially on a day like this, for, for an extended interview. I guess maybe the first thing I'd ask you before we get into the details of today is we saw Elon the other day talk about the size of the, of the economy in 10 years, the global economy, an unbelievable number. You have been early, I think, in identifying just how powerful this transformation that we're seeing is. And you, I think last time you were on, wasn't that long ago, were you at 55 billion or so? Now 90 billion. Things are, things are moving your way.
Philippe Lafont
You know, when you're at the center of everything, it's actually, I'm more nervous now than I'm on the edge. I don't like being in the center of everything, but I think that I really has the chance of being this really big wave. And as I think about the economy long term, I think you had the sort of the industrial age maybe a couple hundred years. Then you sort of had the information age, maybe that was sort of the last 40, 50 years. And now we have this sort of intelligence age. And it just feels to me in terms of the big trend, this is really a big trend. In the past, we got the gas utility, we got the water, we got electricity, we got transportation, we got broadband. Now it seems like intelligence is going to become this utility for $50 or 100 bucks a month, you just get hooked up to this sort of intelligence network. And so the world is moving very quickly. And so to your question, is the world going to also grow faster? Faster? Because there's just that much more intelligence. And even if it grows faster, 1% or 1 1/2% a year over 10 or 20 years, the numbers can get big. And that's probably what Elon is referring to.
Becky Quick
But you were early and, you know, in looking at some of your varied and sundry investments, you saw. When did you start with G.E. vernova? When did you find, make your first purchase?
Philippe Lafont
I think when I look back at sort of what I've done, I started in 2000, right, with 90, late 99. Obviously pretty bad timing, but I only come up in the last 30 years with about five good ideas. And people say, how many good ideas do you come up with? Probably had five. What are you. Yeah, I came up with like the Internet stocks a while ago.
Becky Quick
That's a good one.
Philippe Lafont
And then we came up with like the mobile Internet and Apple. And when I got to Apple, it was like this onion. And you just peel the onion and all these ideas fall off. Just the one big idea, people won't have the Internet in their pocket. And so when you go now to AI, you can sort of pick one idea, okay, is going to be big. But then it's like, okay, these brains, these GPUs, they need a house, okay, data center, they need food, okay, electricity, they need cooling like humans would. So you, you go and look at this, and I think these big trends, what's important as a tech investor is to try to really go deep and sort of unwrap all the different layers. And so obviously energy now is obvious, but maybe a year or two ago, people didn't think how much energy we would need to run all these GPUs.
Becky Quick
You even buying land, we are where the data centers need to be. How do you, how do you figure out where they're going to put the data center?
Philippe Lafont
I think if you go back, you know, upstream, all the way to the beginning, right? So you think, okay, I need the GPUs, the GPUs need to be connected, we need data centers, we need turbines. And then obviously we need land. And part of land is we also need the electricity, and then we need the regulators, we need the approvals, we need the zoning and all of that. And obviously there's a lot of pushback now around my backyard. Always a battle, and we can talk a bit about that, but it feels like Potentially we'll need 100 gigawatts or more of power over the next X number of years. And so it'll be interesting to see how much of it gets approved, how much of it gets approved on Earth, and will any of that also go in space?
Becky Quick
That is in. You ready to jump on that bandwagon too, at some point when it seems feasible. Is it. You have Space X already.
Philippe Lafont
You know, we own, we own obviously some Space X. On Space X, what I would say is the company came out with a trillion and a half or 2 trillion valuation, obviously very big valuation. And to me, the part to think about there is why is it that so many people thinks it's that valuable? I think sometimes it's easy in life to be like, oh, this is clearly overvalued, we're in a bubble. What the heck is going on? What is it that people who are waging their own dollars view in the 2 trillion? For me, what's interesting in space is sort of like every economic get code that happens here. These geckos like mining is going to move to space. Tourism is going to say, telecom is going to move to space.
Joe Kernen
Space.
Philippe Lafont
Data centers in real estate are going to move to space. So it feels like just a really big idea. I don't know exactly is Space X was X or Y today, but in 10 or in 15 years, is space going to be a really big idea? This, I would say fairly high certainty. Yes.
Joe Kernen
Can I just ask you, you, you owned Cursor. Space X just made a bid, a $60 billion bid for cursor in Space stock. Are you going to keep Space shares or would you cash out?
Philippe Lafont
I'm going to keep them. And first of all, once we get the shares, we have to keep them for six months anyway. Right. And so we have to be locked up. Then after that, the decision is more of a portfolio decision. How much do we own of Space X as a percentage of everything that we own? Different people will rebalance in different ways. Some people own a lot. We own a significant amount of Space X, but relative to everything else, it's not as big for us. And then I think that sometimes some of the biggest mistakes that I've made is I've optimized for the short run and then it's quite a bad decision over the long run. So I'm just trying to think about Space X in that lens.
Becky Quick
When did you do Cursor? Did you know Michael for. I mean, he was the only investor.
Philippe Lafont
Yes. No, no, they had, they had a
Becky Quick
few others Very beginning. But he said he knew two guys, they were smart, and he didn't even know what they were going to do.
Philippe Lafont
Yeah, it was a mit, MIT guy, undergrad to just started the business. So the bet on cursor is there's two or three really big models. You've got OpenAI, Anthropic and Gemini. Let's call those the big three. And then the question is, is there space? Space for a fourth or fifth? Grok is there. And Cursor, I think, was really an interesting business. And when you invest in these private companies, you need a little bit of faith. Okay. Can this become a fourth or fifth model? And I think Grok was falling a little bit behind and thought that bringing the cursive team would be helpful to them.
Becky Quick
You sold a lot of Tesla, right? You sold a lot of. In video. Almost all of it.
Philippe Lafont
When I was referring Joe a minute ago as to like optimizing for the short run, you're rubbing it in my face. That was one of the bigger mistakes, I think, video that I've made in video, selling it, you know, sometimes you're
Becky Quick
like, it could end up being right there.
Philippe Lafont
Sometimes you like, look, I've made so much money in this stock and maybe I should.
Becky Quick
So that's what it was. It was. It was purely based.
Philippe Lafont
When we started looking at Nvidia, the stock was. I mean, I think it's split and stuff. The stock was probably $20. So it's been maybe a 10 bites over the last period of time. And sometimes you're like, oh, maybe I'm so clever I can sell out of this and buy that. It rarely works.
Joe Kernen
So you're disappointed that you.
Philippe Lafont
Yes.
Joe Kernen
Would you buy back now?
Philippe Lafont
Yes. I knew you were going to ask that. I should have said something else. I would say that, yes, it's a great company. The only issue I think about with Nvidia is there's now other people making similar chips. They're not as good.
Becky Quick
He's crazy. You got a good reason for not having it right now, I think. Right. You just don't want to say that
Philippe Lafont
there's more people that build chips. The thing that I find fascinating with Nvidia is I think it trades for 13 times earnings next year. So it's like, Joe, like, at what price? I think the question is not, should we buy? But at what price? It's already so cheap. And that's why for me, it's more of a reflection for people who think, like, are we in a bubble? What's going on? Think it says 20 times earnings, but it's more 13 or 14, let's say buy side earnings on 20, 27. It's a very cheap stock.
Becky Quick
I guess it would help to buy a company that, that makes all these different chips or the equipment to make the chips. And you've decided to do that too, right?
Philippe Lafont
Yeah. So I think that sometimes you can capture some of these stocks, you know, through others and you can make a lot of money. Sometimes thinking who's around the hoop. Right. In my case I think of okay, you've got Nvidia, you've got Amazon with the training chip, you've got Google with the TPI chip, you've got newcomers on the GPU side. All of them at the end of the day will need the same machines. And so if I'm a supplier to the fabs, I don't need to make an exact bet on which of the chips is going to win. That's sort of the reasons why we own the semi cap stocks.
Becky Quick
Asm. And you don't like buy five shares?
Philippe Lafont
Well, we're already pretty big.
Becky Quick
You take big swings, don't you? How much ASM did you then you bought it over how long did it take to get in there and how much.
Philippe Lafont
It takes us a few weeks now to buy a position and probably takes us a few weeks to sell. But some of these stocks, like In Korea, trade 10, 15, $20 billion a day. I think one of the advantage of investing IT technology. It is a pretty liquid market. And I also would say that from a portfolio perspective, we'll try to always own positions that if something change, we could choose to change our mind. So we're not sort of solving for the maximum and the biggest return. We're trying to do a bit more of a Laffer curve. Like what is the return that we can get for the liquidity that we want.
Becky Quick
When you like something a lot, how you talk in billions and what you'll
Philippe Lafont
buy, we talk in billions. And I think if I like something a lot, it could be like 5 to 7%. See, I see some people, some friends,
Becky Quick
a lot of retail, 5 to 7% of what you have.
Philippe Lafont
Okay, over a. But I see some people that say they're willing to put 20 or 30% of their portfolio in one idea. I think that's a bad idea over the long run.
Becky Quick
So you go five to seven.
Philippe Lafont
I think five to seven.
Becky Quick
When did you buy Vernova? Right.
Philippe Lafont
Probably started two or three years ago. Met the CEO in Boston. Fabulous.
Becky Quick
No one we weren't talking about AI Three years ago.
Philippe Lafont
Well, you got to travel in this business and you got to go and use some new ideas.
Becky Quick
You figured they're going to need power. I'm going to go meet with this guy who sells turbines.
Philippe Lafont
Yeah. And he was in Cambridge. I remember his off his office. I came there was like, right next to mit. We spoke about the Boston Celtics for about a third of the meeting. And that was like, all right, let's talk about the turbines. And it was obvious in the way that he described them, he had, like, foam at his mouth. It was a brand new market.
Joe Kernen
The data center.
Philippe Lafont
The data center was a brand new market. They had never basically grown. The turbine was a very cyclical business. The US Added a lot of power to the grid. Then there was too much assets in the grid. The business went down. So he was very cautious to add value. But in the meantime, I was asking him, who are the new customers? So, well, it's Amazon, it's Facebook, it's Google. When you sometimes see a company, then
Becky Quick
you were frothing, right. Because you then you realize, holy crap. And you. And you acted big on this, too.
Philippe Lafont
It's obviously always fun when you sort
Becky Quick
of like a eureka moment.
Philippe Lafont
You. Yeah. You sort of untangle this new story, and that's a little bit what happened. I've always find it's a very interesting telltale when a large business has customers that are changing, they're no longer the same customers because it means the underlying current are changing. And there's.
Becky Quick
Amazon's a pretty good customer, I would think. When you. When you discover that. I'm transfixed and mesmerized. Philippe, we got to take a break. And we're going to come back to you again and again. Maybe so totally you can stay. What do you got in going on today?
Philippe Lafont
Nothing. Just looking at the markets.
Becky Quick
Yeah. And we talked ASM, which is when it's 20 year and it's down. Today we'll talk about whether. Would this be a day to buy more? Because I think. Was it, you know what the high. You know what the high was? 1929.
Philippe Lafont
And where is it now?
Becky Quick
7. 1780, 1790.
Philippe Lafont
I found that in general, when you have a 20% plus retracement, 20 to 25, the inverse of 25 is 33. On the upside, I like a 25% retracement because I think, wow, I can make 33% if it gets back. If it gets back to its high. And if it takes three years, it's still 10% a year. Nothing wrong with that.
Becky Quick
You know you didn't hear everything I said earlier, but I said he's brilliant. He's like unbelievable capitalist businessman. I go, and he's French. And Becky laughed at that.
Philippe Lafont
You know Becky, French people are very charming. I know redeeming quality.
Joe Kernen
I'm not the one who was dissing you. I was dissing you.
Becky Quick
I'm saying you.
Joe Kernen
Okay, that's a benefit.
Becky Quick
I gotta just figure it out. Anyway, we'll have more from Fleetwood.
Joe Kernen
He understands capitalism.
Katie Kramer
Yes, more. Philippe Lafont is up next. AI tech, you name it.
Philippe Lafont
There's this view that somehow models are going to be free, that you have this open source. And is intelligence going to be free? I don't think so. I think people are going to want to sort of do business with the best models in the world. And also you could have the best model that's expensive, but you could have the anthropic model for from three years ago. That's like super cheap.
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Katie Kramer
This is Squawk Pod with Joe Kernan and Becky Quick.
Philippe Lafont
Stand by Joe His Mike you.
Becky Quick
We're back with Philippe Lafont, founder and portfolio manager of CO2. Talk a little bit about Bitcoin. Do you still wake up and say why am I so stupid? And wake up at 3am in the morning, why didn't I buy more?
Philippe Lafont
Or I always wake up at 3am and I always think about something. Yeah, but now it's not bitcoin anymore.
Becky Quick
It's not.
Philippe Lafont
I don't know what to think about bitcoin anymore. The one thing I was wondering with bitcoin is there was a time where there were very few IPOs. Part of it is I think the public markets are a little bit broken with so many index funds and stuff, everybody thinks the same. Thus nobody really wants, you know, new IPOs. I wonder if bitcoin was a little bit sort of the off ramp for everybody that wants to have something a little bit more speculative.
Becky Quick
Yeah.
Philippe Lafont
Now that we have this big IPOs on one side and then we have stablecoin on the other. And stablecoin involves the word stable. So if you really want to just put your money offshore, put your money in a new system, you can go through stablecoins. Frankly, stablecoins more or less are already paying interest. I don't think there really are, but there's schemes where you get these like rewards and stuff like that. So if you want just a stable coin, you get, there's fabulous IPOs coming out, there's Space X, there's going to be some AI. And I just wonder like, well, where is bitcoin now and the purpose of bitcoin? And a little bit what you need to believe is almost this maximum maximalist view about bitcoin. Like when I speak to people about bitcoin, bitcoin, it's a bit like a culture either in or you're not. So that's just my new thoughts on bitcoin. I'm a little bit more worried and I would rather bet on a space going to quadruple over the next 20 years or these intelligence models going to be like, if you think today the market cap of the world is 70 trillion of the US 60 to 70, let's say maybe it's 130. 140. In 10 years it could be, let's say 200 plus. Is there going to be a $10 trillion company in 10 to 15 years? I find that debate and trying to figure out which of those companies might be a $10 trillion company sort of easier for me than figuring out where is bitcoin going to be in 10 years.
Joe Kernen
So what's the answer to that question? Is there going to be a. I think there is.
Philippe Lafont
I think yes. I think like today Nvidia is what, five, four and a half? Five. Let's say four. Keep it simple. And the market cap of the US is 60 and let's say the market cap of the world is 120. So a large company can represent 6 or 7% of the US and maybe 3, 4% of the world. So in the future, could a company be worth 5% of the world? No, that would be 10 trillion. In essence, if the world someday in 10 years or so gets to 200 trillion. And which one could it be? Could be one of the existing ones, could be one of the new ones, which is sort of fun because the Max 7 is sort of changing in front of our eyes. Right. It's really no longer quite the same. First I think it's more like mag 11, mag 12 if you think that the mag is every company over a trillion. So you've got 11 or 12 I think. Bert?
Becky Quick
Sure.
Philippe Lafont
Eli Lilly, there's a couple of non tech ones. You got tsm, Broadcom, you've got a few others. I think in the future there's a good chance that open an eye, anthropic could be there, Space X could be there. Maybe there'll be another space asset. Who knows, maybe Blue Origin or something like that could turn out to be a second very large company in space. So I find what's fun for me and what keeps me going is the to imagine sort of this index of the future and who's going to be in that index of the future. And if you can do that and sort of stomach the daily volatility like today, then you should be able to do well.
Becky Quick
You said five great ideas. We didn't get all five. But I know you have maybe a future one right now in agentic air and you've even referred to it as almost a big bang moment. Right.
Philippe Lafont
Is that one I have found like, you know, in thinking about anthropic in particular and OpenAI is doing equally well sometimes anthropic does a little bit better. Maybe like now I'm convinced that at some point open I will do a bit better, then it will be anthropic. To me the two key questions on the model is one, there's this view that somehow models are going to be free, that you have these open source. And is intelligence going to be free? I don't think so. I think people are going to want to sort of do business with the best models in the world. And also you could have the best model that's expensive but you could have the anthropic model from three years ago that's like super cheap. So anthropic could both be cheap and not with respect to these Models, all the stuff around agents and the ability to have thousands of people working for you. That sounds like one of the bigger idea, at least in my investment, investment career. This concept that you sort of go to bed at night, there's a thousand people working for you, and you got all this work done and ready for you the next day. It's a new way of working. I'm having a hard time. I'm still like scribbling on a piece of paper, my notes and stuff like that. But I see people, even in our own office, the way they come up with new ideas and the productivity they get from AI, it's really there and it's still moving quickly.
Becky Quick
So. And you would, you would participate in that the way that you are already?
Philippe Lafont
I think through anthropic, through open AI. And I also think, and it's a bit of a shame, like why are these companies not public earlier? And why isn't it that retail and small investors can't get access to them earlier? And I was going to ask you
Becky Quick
about that because you have. You saw some nice fees with the. But you've opened up. Why did you do that? You didn't need to bring in retail people into. So participate with your genius.
Philippe Lafont
Correct. Our business has sort of been mostly an institutional business. Basically there's laws that private companies shorts hedge funds. You have to be more or less accredited or institutional investor.
Becky Quick
Right.
Philippe Lafont
Because there's more risk.
Joe Kernen
Risk.
Philippe Lafont
And so with more risk, you're supposed to have more financial literacy. First of all, I find that offended, offending. Why is it that we think that institutions are more financially literate, you know, maybe than retail investors? I'm not sure that's true. I believe in the wisdom of the crowd. But there's things such as leverage and stuff. I think that's changing. I think the current administration is improving this. So for us, we started this new fund that basically allows us to offer public and private with some restrictions. And I do think that in the future, and this is one of the reasons why private markets are so big, Private markets in debt became very big precisely because in my mind, the public markets in debt, they were too dumb, too simple. Oh, if you're not Triple A, I'm not lending to you. Great people find an opportunity. Private market in tech is going to be the same. Hey, the IPO and the world is dominated by these indices that all think the same and sort of have abdicated their intellectual property to others that create the weights for them. Hey, well then there's going to be a private Market, private market today is probably 5 or so trillion public markets or let's say 60. A private market in tech, still a big market.
Becky Quick
So why. And off camera I said can I participate in one of these retail funds and that's A and B, will you lend me the money up front so I am able to participate?
Philippe Lafont
Answer to the second note of tell you is a definite no. We don't lend money to anybody. That's not, that's not think of you
Becky Quick
would especially you know, but.
Philippe Lafont
So Joe, if you are an investor you wouldn't ask these tough questions.
Becky Quick
Is this altruism though?
Philippe Lafont
Not at all.
Becky Quick
But you also get great 12 and a half percent.
Philippe Lafont
It's a great business opportunity for you. You get lower fees, you get longer dated capital. To me the longer dated capital is very, very important because I'm trying to figure out the index of the future 10 years out.
Becky Quick
Yeah.
Philippe Lafont
How do you do that? So that's why you need the funds. And at the end of the day, $1 of long dated capital might be worth $3 of that can leave in any given quarter. So from an economic viewpoint that might actually even be the right bet to make.
Joe Kernen
That makes sense. Can I ask you about Satya Nadella and what he said this week? Basically that open air anthropic shouldn't be so dominant and that we should be looking around for other models to bring in. He even mentioned the potential for using the Chinese model deep seek.
Philippe Lafont
What do you think?
Joe Kernen
That it's a weird transition after he was so intimately.
Philippe Lafont
I was a little surprised by it. But he said two things, one of which is he described how the world is going to work with AI and that was very interesting. How companies need to change and how your culture is going to be embedded in AI and your process and stuff. And I was like, wow, what an interesting new way. And then he also mentioned that. And what I can't tell when he said that is does he say it because he's behind? Does he say because he's lost a dominance in it.
Joe Kernen
Right.
Philippe Lafont
And he still owns an enormous amount of open air.
Joe Kernen
And now he's working with anthropic too.
Philippe Lafont
And he's also working with Anthropic.
Joe Kernen
Yeah.
Philippe Lafont
So is it better to have three or four people than one or two? Probably. Are we going to work with Chinese AI companies? Most likely not. I think you'll have the western AI on one side, you'll have the Chinese AI on the other. And only countries like maybe Brazil, India and Indonesia will sort of do a bit of both. But otherwise, people, in my mind, people are going to pick one side or the other, and most likely the Europeans are going to go with the American AI.
Becky Quick
Great to have you on, Philippe. And just trying to figure out how someone becomes you. So you get the master's and undergrads in electrical engineering and computer science and economics all at mit. So you knew what you were going to do? Did you know?
Philippe Lafont
I didn't know what I was going to do. And I've said that many times. After I left mit, I tried to work for Apple and I got five job interviews at Apple and five rejections. And for six months I did nothing. I went to Chile. I became a very good fisherman. That's what I did. And then my family cut the checking account and had to start working. So the answer is, you don't know what you need to do. You don't know what you do. You don't need to go to a great school, another school. But what I love about America is you really have a chance. And in my case, I sort of built this business at a chance. And the reason why I still work hard is I don't want to leave America. I always feel like if I don't do well, maybe I'm going to get kicked out, even though I'm an American citizen. But I have this thing that never leaves my mind and the chance of having been able to be here and build a great business and hopefully contribute a little bit, if not to the country, at these two taxes indirectly. It's really special for me. And thank you guys for having me. I really appreciate it.
Becky Quick
We can have you all the time. Thank you.
Katie Kramer
That is Squawk Pod for today. Thanks for listening. We hope you enjoyed this extended discussion with investor Philippe Lafont. Squawk Pox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. You can tune in weekday mornings on CNBC at 6 Eastern or get the best of our show interviews. You can't miss the latest news and economic headlines, even our bad jokes. When you follow Squawkpod. Wherever you get your podcasts, you can listen anytime. Have a great Tuesday. We'll meet you right back here tomorrow.
Philippe Lafont
We are clear. Thanks, guys.
Becky Quick
Foreign.
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This episode of Squawk Pod features an extended interview with Philippe Laffont, founder and portfolio manager of Coatue Management. With $90 billion under management, Laffont is renowned for his prescient technology investments, from early bets on Apple and the internet to current stakes in AI, data centers, and space technology via SpaceX. The conversation delves deep into the transformative impact of artificial intelligence, the future of space-based industries, data infrastructure, technology investing strategy, and industry dynamics, while also touching on topical news including the volatile tech market sell-off, bond offerings by SpaceX, and policy debates in Washington.
Tech Sell-Off:
“Asian markets giving up early Gains today ending deep in the red. South Korea's Cosby led the decline, falling 10%... The Kospi though has shot up this year, nearly doubling since January 1st.” – Becky Quick [02:43]
“This pullback that we've seen... is a decline of about $600 billion in market cap.” – Joe Kernen [03:23]
Housing Bill Passage:
“The measure passed 85 to 5 and followed months of debate spanning both chambers of Congress.” – Becky Quick [09:13]
Political Back-and-Forth:
“…they don't talk about the four and a half million children around the world who he possibly sentenced to death... by dismantling usaid.” – Becky Quick, quoting Ro Khanna [14:32] “Musk immediately took issue with that... He called him Roe the Robber.” – Joe Kernen [13:07]
Laffont frames the world as undergoing a transition—from the industrial era, through the information age, and now into the “intelligence age,” where AI will become a pervasive utility.
“Now it seems like intelligence is going to become this utility... For $50 or 100 bucks a month, you just get hooked up to this sort of intelligence network.” – Philippe Laffont [20:06]
He underscores the massive macro impact of intelligence as a utility, predicting that increased productivity could lift economic growth rates and expand market capitalizations dramatically.
“Even if it grows faster 1% or 1 1/2% a year over 10 or 20 years, the numbers can get big. And that's probably what Elon is referring to.” [20:06]
Laffont stresses focusing not just on the obvious plays, but on uncovering all the layers—chips, data centers, energy, cooling, land, and regulatory hurdles.
“They need a house, okay, data center, they need food, okay, electricity, they need cooling... What's important as a tech investor is to try to really go deep and... unwrap all the different layers.” [22:00]
On data centers and power, Laffont describes buying up land and investing in GE Vernova based on insight into future power demands for AI.
“It feels like we'll need 100 gigawatts or more of power over the next X number of years. And so it'll be interesting... will any of that also go in space?” [22:58]
Bullish on Space Markets: Laffont argues that entire industries—from mining and tourism to telecom and data storage—will migrate into space.
“Mining is going to move to space. Tourism is... Telecom is going to move to space. Data centers in real estate are going to move to space. So it feels like just a really big idea.” [24:41]
He views SpaceX as a core holding, despite its short-term volatility, favoring a long horizon.
“Some of the biggest mistakes that I've made is I've optimized for the short run and then it's quite a bad decision over the long run... I'm just trying to think about SpaceX in that lens.” [25:11]
Nvidia Regret:
Laffont confesses selling most of his Nvidia stake as a major regret, a cautionary tale against over-trading winners.
“That was one of the bigger mistakes, I think, video that I've made in video, selling it...” [26:54] “Sometimes you're like, oh, maybe I'm so clever I can sell out of this and buy that. It rarely works.” [27:14]
Now he finds Nvidia undervalued on a forward PE basis:
“I think the question is not, should we buy? But at what price? It's already so cheap... It's a very cheap stock.” [28:00]
Diversifying Chip Bets:
“If I'm a supplier to the fabs, I don't need to make an exact bet on which of the chips is going to win.” [28:44]
Risk Management:
“If I like something a lot, it could be like 5 to 7%... Some friends... willing to put 20 or 30%... I think that's a bad idea over the long run.” [30:24]
Signposts of Change:
“I've always found it's a very interesting telltale when a large business has customers that are changing, they're no longer the same customers because it means the underlying current are changing.” [32:08]
Agentic AI as the Next Big Bang:
“All the stuff around agents and the ability to have thousands of people working for you. That sounds like one of the bigger ideas, at least in my investment career... Go to bed at night, there's a thousand people working for you, and you got all this work done and ready for you the next day.” [40:00]
Open Source vs. Proprietary Models:
“There's this view that somehow models are going to be free, that you have this open source. And is intelligence going to be free? I don't think so.” [34:01]
Geopolitical Fault Lines in AI:
“Are we going to work with Chinese AI companies? Most likely not. I think you'll have the western AI on one side, you'll have the Chinese AI on the other... Most likely the Europeans are going to go with the American AI.” [45:37]
Access for Retail Investors & New Fund Structures:
“Why is it that we think that institutions are more financially literate... maybe than retail investors? I'm not sure that's true. I believe in the wisdom of the crowd.” [42:08] “For us, we started this new fund that basically allows us to offer public and private with some restrictions... $1 of long dated capital might be worth $3 of that can leave in any given quarter.” [44:19]
The Public Markets "Broken":
“The public markets are a little bit broken with so many index funds and stuff, everybody thinks the same. Thus nobody really wants, you know, new IPOs. I wonder if bitcoin was a little bit sort of the off ramp for everybody that wants to have something a little bit more speculative.” [36:10]
On Market Mega-Growth and $10 Trillion Companies:
“In 10 years it could be... 200 trillion. Is there going to be a $10 trillion company in 10 to 15 years? I find that debate and trying to figure out which of those companies might be a $10 trillion company sort of easier for me than figuring out where is bitcoin going to be in 10 years.” [37:57]
On Global AI Leadership:
“...you'll have the Western AI on one side, you'll have the Chinese AI on the other side. And only countries like maybe Brazil, India and Indonesia will sort of do a bit of both.” [45:37]
On Humble Beginnings & The American Dream:
“You don't need to go to a great school, another school. But what I love about America is you really have a chance... The reason why I still work hard is I don't want to leave America. I always feel like if I don't do well, maybe I'm going to get kicked out, even though I'm an American citizen. But I have this thing that never leaves my mind.” [46:25]
“Now it seems like intelligence is going to become this utility... For $50 or 100 bucks a month, you just get hooked up to this sort of intelligence network.” – Philippe Laffont [20:06]
“Mining is going to move to space. Tourism is... Telecom is going to move to space. Data centers in real estate are going to move to space. So it feels like just a really big idea.” – Philippe Laffont [24:41]
“All the stuff around agents and the ability to have thousands of people working for you, that sounds like one of the bigger ideas, at least in my investment career.” – Philippe Laffont [40:00]
“That was one of the bigger mistakes, I think, video that I've made in video, selling it...” [Nvidia] – Philippe Laffont [26:54]
“If I like something a lot, it could be like 5 to 7%... Some friends... willing to put 20 or 30%... I think that's a bad idea over the long run.” – Philippe Laffont [30:24]
“There's this view that somehow models are going to be free, that you have this open source... I don't think so.” – Philippe Laffont [34:01]
“Why is it that we think that institutions are more financially literate... maybe than retail investors? I'm not sure that's true. I believe in the wisdom of the crowd.” – Philippe Laffont [42:08]
“You do not know what you need to do. You don't know what you do. You don't need to go to a great school, another school. But what I love about America is you really have a chance.” – Philippe Laffont [46:25]
Philippe Laffont’s vision carries the episode: we are at the dawn of an economic transformation as historic as the industrial age, fueled by AI and penetrating everything from energy and infrastructure to the cosmos itself. Laffont combines candid admissions (his Nvidia "mistake"), practical investment lessons (diversification, sizing), and a contrarian take on public/private markets and inclusion of retail investors. He suggests the world’s first $10 trillion company is possible within the next decade, and its identity could emerge from frontiers as yet unimagined—very possibly in AI or space. Meanwhile, the tech giants’ geography will harden (US/Europe vs. China), and new industrial titans will be built not only on chips, but power, land, and access to intelligence utilities.
For investors and the tech-intrigued, Laffont’s perspective offers both grounded realism and audacious optimism for what lies ahead.