Cathie Wood: AI will drive GDP above 7%, Bitcoin to $16T by 2030, and the biggest entrepreneurial explosion in history

business today. And without further ado, we have Kathy Wood in the Reream waiting room. Let's bring her in to the TV Ultra Do. She is the CEO of Arc Invest.

Welcome to the show.

Welcome to the show. Thank you so much for taking the time to talk to us. How are you doing?

Oh, thrilled. I'm I'm so happy to meet you. I've heard so much about you. Congratulations on all your success.

Thank you. Thank you. How is your 2026 going so far?

Ah, it's great. It really is. Uh I wrote a new year letter, new year's letter.

Yes.

And then we put out big ideas yesterday

and it's been a whirlwind. A whirlwind. I feel this is a very important year for us.

And is AI the only thing that you're tracking? Is it is it as all-encompassing in your world as it is has as it has been in ours?

Uh it is by far the biggest catalyst to innovation out there today. Um but we we're very focused on our five major platforms and AI is involved in every one of them. So robotics, energy storage,

AI itself, uh uh blockchain technology and multiomic sequencing in the life science space.

And so we're really focused on the convergence among those platforms. They involve 15 different technologies. uh and and so AI is is part and parcel of all the convergences taking place today.

Yes. And how are you uh setting up the firm to actually cover those five trends? What does the team look like? Who do you like to work with? And what are the keys to success to uh growing a career at ARC?

Uh that's a great question. uh we have set ourselves up very differently from traditional asset management research.

Um in that world uh the the research responsibilities are organized by sector or or industry or subindustry. And in fact uh many firms are very proud that they have five different health care analysts uh following very narrow uh silos of companies uh or five consumer analysts. Uh we have set up arc around this idea that um these technologies are converging and are going to impact every sector every industry. So our uh analyst re research responsibilities are broken down by uh by technologies. So the 15 different technologies in involved in those five innovation platforms. So and and and what they are looking for is okay how is this technology going to scale across sectors? How big is this opportunity going to be? I don't think traditional research is set up to do that. I think to uh really understand how big the opportunities are going to be out there, uh you almost have to set up research this way.

Yeah. Yeah. I mean, you're you're you're famous for taking very large positions, very concentrated positions in really important companies. What does it what does it look like to get comfortable with a a new management team, a new CEO? Uh is it just endless phone calls, meeting in person? Do you have any uh rules for how you grow a relationship over time with a new business leader who you think is working on a breakout technology?

Well, I think very important is understanding uh the background of the the new business leaders. You know, I've been in the business for a very long time. I actually started in college in the late '7s. And while most of my career had

overnight success

and it's a true overnight success. We love it.

No, but we know I know a lot of people out there and I've always loved the part of our business where I get to meet uh the people making uh making these companies happen. Uh so I'm a a devout follower of talent where it's going where it has come from

uh I usually have some frame of reference uh that I can use as a line of questioning uh just to see you know is this uh is this the kind of leader uh and the right leader uh for this company at this time. Mhm.

How do you what's your framework for understanding uh if a management team or CEO is really set up for this AI transition that every company is going through? Because every comp every CEO wants to say that they're getting the most out of AI, they're getting the most efficiency, they're running the most pilots, etc. Uh but clearly many companies are are just kind of, you know, doing the demos but not actually evolving their businesses. Uh so now are you speaking about uh more in the startup world or are you talking about enterprises?

Both. Both really. It it's everything from a from a company uh you know like an enterprise software company maybe a system of record that that is looking to evolve all the way through like a manufacturing company who uh you know maybe has been using robotics for years. And so they're like I don't really see why people are are uh so

uh We've seen a number of founder CEOs that have been completely reinvigorated by the AI boom. They've built a great business, but you can tell that they're completely in a new gear, working harder than ever. There's also legacy players that just placed the right bets at the right time and they're just paying off and reaping the reward. And then there are some big company CEOs who it does feel like they got caught a little flatfooted and have to adjust their business models.

Yes. uh and the way we do our research and and again a lot of people know us for our top- down research. So the big ideas that came out last night

uh we are as uh bottomup stock research driven or equity research driven as any other team you'll uh find out there that that's where I came from. Uh so uh we took from a top-own point of view uh two years ago uh in big ideas we took the position that uh because we were seeing it play out in the numbers uh that the the the tech stack would change uh that the the um you have the infrastructure layer which of course very strong. Uh you have the platform as a service layer. Poster child for that Palunteer um was gaining share significant share and then you had application layers software as a service uh growing but losing share of incremental growth. We put that chart in uh and we had no idea how quickly this was all going to happen. you know software stocks more traditional software stocks last year were terrible and even this year uh they are they're still suffering so uh AI is happening faster I think than anyone could have imagined uh anyone who thought they had time to adapt um I think has been mistaken uh and you know I even see it with large enterprises when we go in there and ask them okay what's your what's your AI strategy um you know they they they treated it in the beginning like yeah we'll let our our teams experiment with all these new tools coming up chaty GP no no no no no that's not the way this is going to work

[laughter]

uh it's there's there's going to have to be complete restructuring yeah

uh around AI or else you're probably gonna fail maybe not outright but you'll become irrelevant So um I think even ARC for example uh we have brought in Palunteer. We're only 70 people uh but we've brought in Palunteer and I can see we brought it into research first. I wanted to see how could we transform our research process

uh and uh and we're already seeing incredible results in terms of productivity gains uh by by the research team but uh I can see that in the rest of the firm it is going to take uh well first of all you have to have someone other than the CTO and that's true even in our CA case saying we're doing we're doing this. Our research is telling us this is the way the world's going.

We cannot be caught flatfooted.

Uh and so I really think you need the CEO, not the CTO, CEO, CFO, uh to drive this change. And I think you know many people think oh the results are so immediate and they are with our writing and editing perhaps but uh when you're trying to transform an enterprise uh it takes it's hard work. You have to collect all the data far even data that you didn't know existed. So you have to figure that out. You have to clean it up. You have to integrate it. uh you have to map out workflows in excruciating de uh detail and and that all takes time and a lot of people in this world are impatient. They don't see results right away. Um but I think the results are going to pay off. I I think the way Palanteer is doing it just put it software on top of legacy. no rip and replace and uh over time it will usurp the role of all of those leg that inefficient legacy software. So I think it's going to take time in the enterprise and I know there was the MIT study that said hey this isn't happening this is a figment of Silicon Valley's imagination and we disagree

mightily on that.

That's good. uh how how are you hoping to see the private markets evolve uh in the next five years or so? It's you know we've seen this tremendous growth of companies like uh OpenAI, Anthropic, etc. these sort of

uh leading XAI leading labs uh that are happening all in the private markets and if people really really work hard they can probably figure out how to get exposure to them but certainly it's been cut off uh and I know you guys have your uh uh the private side of the business as well but uh any sort of wishes or hopes in terms of um uh how uh how the interaction between the private market and the public market can can evolve. Uh well, I think the lines are going to start blurring a bit hopefully because the SEC under Paul Atkins is going to get rid of all of the the regulations and bureaucracy. And I I do think his aim is in that direction. Um, in terms of the the private markets, I I think we're starting to see venture capital firms move into crossover funds because uh well, first of all, there was a big arbitrage opportunity uh you know when the public when innovation in the public markets was getting crucified and believe me we were the poster child for that. Um uh I think a lot of these funds were looking at the valuations in the private markets so much higher than in the public markets that that kind of started the conversation going. And then of course this administration is talking more and more about the democratization of opportunities and uh of venture of course being a big one. And you know this idea that you have to be accredited in order to have access to companies that you know our our uh investors the younger investors in particular you know they don't have the the net worth or or even the annual income but they know more about these technologies than many of the institutions uh investing in venture. So, you know, we felt it was important uh to open it up and and to be very um complimentary uh to what's going on out there. Uh we're not taking board seats, we're not leading uh but we are putting out research and we are willing to bring visibility to companies in our uh venture fund. uh and we're bringing you know a a new kind of investor who really uh has been yearning for this uh opportunity for years.

Uh want to talk about Bitcoin uh and specifically there was news yesterday Coinbase is rolling out an advisory firm on quantum computing and blockchain. There's obviously been kind of FUD, people uh uh talking about the potential implications for Quantum uh and Bitcoin and and crypto broadly. Uh how are you thinking about the asset today? Uh I know this is uh certainly uh a topic that you've talked about many many times on on CNBC and other shows, but we'd love to uh hear the latest.

Sure. Uh first I'll start with quantum. So in our big ideas report and it's in the first section called the great acceleration uh there is a page in there u I think it's titled some interesting technologies will not be disruptive for 20 to 40 years and uh Brett Winton our chief futurist uh and you know with with that title chief futurist uh you've got to be thinking about these things and and um coming up with analysis ies that either support or refute the conventional wisdom out there. Uh so if you if you go in you'll see a very interesting chart. Google has doubled the n its number of uh cubits. It's taken four years for them to do that. So it's even slower than Moore's law in the semiconductor space. Uh and so we what what Brett did was illustrate okay let's assume they accelerate progress here if they can to a Moore's law pace okay then in 2044 let's talk

about um about uh quantum computing and and the risks

uh that that uh uh are in sort of the whole blockchain techn technology infrastructure particularly Bitcoin. So um we are not worried. We are seeing whales so the original the OGs uh they are shifting Bitcoin from wallet to wallet because of quantum fears.

Uh so that's happening but it's also created some FUD for for the markets. Um, are they selling because uh they know something we don't know? Um, are they selling simply because they don't want to go through the downside of another four-year cycle? Have we hit the low at down only 35% this time in instead of 85%. So, we're in that kind of a market and I I do think we're in a basing period. Um, which really started uh 1010 on 1010 the flash crash

um it was the software software glitch at Binance caused a lot of auto deleveraging. It was kind of crazy to learn uh about that kind of deleveraging. Meaning firms who thought they were hedged, if they were on two different exchanges uh and Binance was one of them, they were auto deleveraged on one side of a trade and so they were totally exposed in a way they never expected. That caused we think 28 billion dollars of carnage. Uh and we think that is washing through the system. We are very positive on Bitcoin uh for the three reasons I always say you know it's a new technology really important uh uh it is a glo a new and a first uh rules-based global private meaning no government oversight monetary system. That's huge. That is huge. That is its calling card. a big hedge against inflation and a hedge against deflation if we end up in a banking crisis like 089 and it is the first the leader of a new asset class. Many people are looking at gold and they're saying well wait a minute gold is doubled in the last uh year or so what Bitcoin's way behind. Well, if you if you start the clock at the end of the bare market in 22, gold is up, I think, 170% and uh these are maybe dated by a couple of weeks and uh Bitcoin uh by 360%. So, uh we think that uh uh Bitcoin

Oh, what happened?

That was just a little [laughter] air horn we used. I You said 360%. It was a nice number. sound effects over here. [laughter] Not to be not to be jarring.

They didn't prepare me for this. Anyway, okay. So, [laughter]

did they brief you about our flashbang?

We will we will save that one for another time,

but yes. Sorry. Continue, please.

Yeah. Can Yeah. So, I'll just say it's very interesting over the full market cycle from 20. Yeah. Uh to now. Yeah. Uh gold and Bitcoin's correlation hardly it's almost non-existent.

Yeah. hardly anything. Uh but we think Bitcoin uh is is especially as intergenerational wealth wealth transfer takes place in the next five to 10 years.

Yep. Uh it is the digital gold

and its supply growth is lower than golds will be. Yeah.

And especially now that the gold price is up, miners can go out there, they're being paid to find even more.

So that can't happen with Bitcoin. So

yeah,

um I think in a big ideas you'll see uh we expect Bitcoin to scale to $16 trillion in market cap by 2030.

Uh and it's uh below two now. So

yeah. Uh can you talk about the name of the fund? Where did the name come from? What does it mean?

The name of the company

ARC. Yeah.

ARC. Yeah. Yeah. So um there are two ways to talk about this. I can talk about this from a regulatory point of view

uh or the personal point of view and I'm happy to share both

please. I would love it.

Okay. So the regul um ARC was the name I chose for a personal reason. I'll get into that but I was or we were told by the I think it was SEC that we could not have all caps.

Okay. uh we had to have lowercase R and K unless it was an acronym.

And so as soon as we got that

that word uh that immediately I thought okay active

research knowledge okay

active means more in the public world because there's passive in the public world doesn't mean as much in the venture world.

Um so that's why we have it in all caps. Uh the personal reason was in 2006

I decided I needed to figure a way out of the traditional asset management world because it was going passive. It was going benchmark sensitive which means

you take uh the QQQ so the NASDAQ 100. Yeah. If that's your benchmark, then you pretty much invest in all of those companies and tweak a little bit here, a little bit there. That's what benchmark sensitive is

to me. That's not investing. Mhm.

Uh and in fact, um so back then, you know, I would just um I was trying to figure out how to do this because if I quit, uh my prior uh position, I would have lost all of my deferred comp, which was

sizable.

Yeah.

And so I worked took me seven years,

you know, should I say seven lean years, but whatever. Seven years. And I just used to open the Bible. And this started in ' 06. Open the Bible. Okay, God, just tell me. This seems like an impossible situation.

Uh, what do I do? Just help me. Help me. And um, how many times did I hit Ark of the Covenant?

Yeah. Ark of the Covenant, which is what the Israelites took into battle before them, believing it was the presence of God

and that they would be protected

uh because they were going into battle. Uh and so it kind of was appropriate. I was going counter uh counter uh the pendulum swing to passive and benchmark sensitive. And you know, especially after COVID, a lot of people, you know, they they just thought we were going to fail because this was not the way to do things.

How do you think about uh the relationship between religion and markets? I've always been fascinated. We've had Pat Gellzinger on the show and uh yeah,

he there's been a number of times when he was uh either quoting scripture or Bible verses and people were sort of reading into that how he was processing what's going on at Intel at the time. Um I I would love to know more about the the interaction between religion and investing um because it's it's it's so rarely discussed but it's a fascinating topic and crossover.

Yeah.

Yeah. It it is interesting. So, you know, I can say I was moved

in the way I mean, you could uh the way I think about what happened there and what I just described is many people uh would use the universe. They're responding to the universe or the force.

Yeah.

Or the Holy Spirit or that. Right. So, we're all moved by something. Sometimes it's unhappiness, you know, whatever. [laughter] Um, you know, I just I use prayer as other people would use meditation, let's say. Uh, and I certainly don't go in there, you know, daytoday and say, "Okay, God, what should I do? Buy or sell this stock?" No, not at all. Not at all. Um, it's it's I would say it's those moments of meditation that bring uh mental clarity. you know, you clean the clean the the the the brain waves out or whatever. And uh that that's more it's and it's also, you know, uh I would say it's a way of living just generally.

Yeah. Sorry. Uh not to completely change uh gears, but back to [laughter] back to AI productivity. I want your reaction to this Wall Street Journal report yesterday that uh it showed that uh CEOs uh reported that that you know 20% of the seauite executives that the journal uh interviewed said that they were saving 12 hours a day or 12 hours a week some massive number and then they pulled workers and workers uh 40% of workers said they're saving no time with AI and I'm wondering if what your read on that is is it that uh one thing that we were kind of kicking around as an idea was potentially that uh the work of the seauite executive is more ready to be transformed by AI because like in your role you are a CEO you you do a lot of research every question that you're faced with over the course of a day in your life you probably want more information you want it neatly organized and delivered to you and AI is uniquely good at that um whereas many workers might not be in that level of information processing role but how do you do do Do you think that this is going to be a report from the journal that we look back on like that MIT study where h it was just sort of an anomaly in the data and everything continues unabated?

Well, this is a survey of course, right? It's it's not quantitatively measured. And so what could be going on

is uh you know the seauite is really trying to

um lead lead the charge into the AI world.

Yeah. Yeah. and and the the th we're all in the knowledge industry. It's going to change everyone's job dramatically. So those who are saying it's not saving me any time,

I don't believe or they're not harnessing any tools. What I do believe is they are saving time and if they're saying they're not, then it might be going to a longer lunch hour or, you know, an earlier end of the day. The history of technology is um is that it increases productivity and the number of work hours is goes uh down over time during the industrial revolution. Big decline in number of work hours. Uh farmers used to have to work six and a half days a week or whatever. And you know their families, the children, they got room and board. There wasn't much more. Uh but then they went out into the working world. So the farmers and these unpaid family members, you know, their work week got shorter. And I think that's part of what's going on.

Yeah. Um we've been tracking the optimism around AI and progress sort of loosely along two axes. There's there's a view that uh GDP will start growing as AI diffuses and we go into a new technical revolution. We're already seeing some green shoots on the GDP figures, but it's still early. We're not at 10% GDP growth, but that's what some AI leaders are predicting. Uh, but then you also have the employment question, and there's some leaders of AI labs that say the future will be high GDP growth, high unemployment, which seems like it will have, you know, significant social consequences and we will have to grapple with that as a society and deal with those problems. Um, but I'm wondering if you have a view between what we should expect in a decade from AI as it rolls out. Do you do you fall into that camp of high GDP growth, high unemployment, or are you more, you know, the jobs we'll find new jobs and so maybe we will see an economic boom, but we will also still all find ways to, you know, fill our time during the day with employment. Yeah, I think that uh one of the reasons uh this question is popping up more and more well first of all is our imaginations but also

because the unemployment rate for uh 16 to 24 year olds

has increased uh much more than the overall unemployment rate. It's now up to double digits 12%. The average duration of unemployment, the average is about 24 weeks. And so that's kind of scary. A lot of entrylevel jobs uh are uh are are going unfilled. In other words, maybe the people answering that survey

uh are are now being faced with the um reality that wait a minute, they're not going to hire someone to come in and handle this grunt work. I have to do that too. Maybe maybe that's what's happening at the low end to give them some credibility or at the lower end there.

Um we're in the camp and you'll find this in big ideas as well. Uh we're and we've been saying this for a while and at first when we said it, we probably said it three years ago for the first time. We think there's going to be a step function change here in real GDP growth just as there is with every technology super cycle. So just to illustrate that

in the 400 years uh between 1500 and 1900 uh Brett Winton working with academia found out or learned or

uh that real GDP growth was 0.6%. Then we had railroads, internal combustion engine, telephone, electricity

and it went to 3% for the next 125 years. Here we are.

We think it's going north of 7%.

Uh and that's conservative.

Fantastic.

That's conservative. I think it's conservative. Really productivity driven.

Yes. [laughter] and and we think that uh that this is one of the greatest times to start a business. When I started ARC,

there was no chat GBT to say,

okay, do a deck

for my startup because this is what I want to do.

Yeah.

Uh there wasn't anything like that. I had to create everything. Yeah. Now you can look at an unmet need out there and say, "Hey Chat GBT, uh or hey Grock, uh come help me build this business, right?"

Uh so we think that fears of unemployment, sure there's displacement, uh short term, but think about what's also happening.

1.3 million pe baby boomers are retiring every year.

Yeah.

Right. And we've just had or we're in the midst of an exodus of u immigrants.

Sure.

Uh and and and you know little in migration.

So that I think is helping

uh keep the unemployment rate low

but entrylevel jobs can be done by AI.

Sure.

And so that's what we're seeing at the younger level. And so what I say to young people is you all in your mind have thought of a a new business that would really fulfill an unmet need, something that frustrates you.

Why don't you do it?

Yeah.

Uh and use AI to do it to plan it

and uh just get going while you also look for a job if you're unemployed. Uh, I think we're going to see the biggest entrepreneurial explosion in history.

I love it. I love it. Thank you.

Uh, we got to hit the gong for 7% GDP growth. We have a gong around here.

I love the sound effects.

We have We have real sound effects in addition to the soundboard.

Thank you so much for joining.

Can I give

Yes, please. What?

Can I just give you one more stat? One more step.

Yes, please. Please.

We think we think inflation will go negative. Oh,

I love that.

Yes. And that's [music] technology.

This is amazing. This is uh this is a very optimistic picture of the future and I'd love to hear it. Thank you so much for taking the time to come on the show and explain all of that. A very wide-ranging conversation. I love the history and the personal story and everything that you're doing. So, thank you so much for taking time out of your busy day to come chat with a bunch of people with a funny soundboard.

We will see you later. Hopefully hopefully we made a good impression and you will be back soon.

We did. [laughter] Now I know why you're famous.

Thank you so much.

Byebye.

Goodbye. [laughter] Have a great day, Jordy. Oh, that was amazing. Plaid. Plaid powers the apps you use to spend, save, borrow, and invest. Securely connecting bank accounts to move money, fight fraud, and improve lending. now with AI. Go and check it out.

I couldn't keep it together. The chat the whole time.

I know. The chat was going insane. [laughter]

I could I literally [snorts] I was fighting for my life.

Oh my god. The

Every time I look up at the screen, I was just trying to

I know. I know. It was just wallto-wall flashbang and I'm just [laughter] trying to hold it together.

I love I love you guys, chat. I love you, but also you make the job a little difficult [laughter] sometimes.

That was the hardest battle of my life. That was insane. And I'm like, and there's nowhere to look cuz I look at the chat, I look at Tyler, I look at my phone, I have a hundred notifications, I assume, as people texting me, they pull the flashbang. And also, by the way, I can't I can't trigger the flashbang. That's Jordy exclusive. We need a smoke to clear the air. We need we need to tell you about Gemini 3 Pro, Google's most intelligent model yet. Next level vibe coding, state-of-the-art reasoning, and deep multimodal understanding.

Okay. Uh, so some news. So, we're going to have uh Pedro from Brex is going to we're working on getting him on. Uh Delian's also going to join separately, of course. So, I don't know who's coming on first show. We can uh in the waiting room,

but we have another guest jumping on right now. We have John.

We're going to push uh we're going to push John just because the stories

and he's okay. He has some time. So, we'll so we'll hop on with him later in the show. Fantastic. Well, before we bring in our next guest, let's tell you about public.com. I saw someone in the chat asking for public.com read. Here it is. Investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with amazing customer service.

I've never I've never cried on air [laughter] before.

It this is a unique experience. The the chat is is a wild wild exper uh wild wild experience. But thank you to everyone who's been supporting. She was a great sport. Uh had a bunch of interesting things to share. And I I I truly do love the optimistic view because we so we we had actually written a chart for uh high growth, high GDP growth, high employment, low employment, low GDP growth. And we were trying to track where the other AI leaders were because Daario of course came out and said, I think we'll have high GDP growth and I think we'll have high unemployment. I think there's going to be a lot of labor displacement. And me and Jordy and Tyler were going back and forth on where we all sit. Where does the US sit right now? Where do different leaders uh feel like they the world is going if they're charted on this two axis uh chart? And and I kind of jokingly put myself all the way in the most optimistic camp. I said 10% GDP growth and less than 5% unemployment. Um I don't know if I have my I don't know if I have it in myself to truly believe that. I do think that there might be some girrations in the employment market, but uh it was great to hear it