Brad Gerstner on SpaceX IPO, Anthropic's historic growth, the SaaS multiple reckoning, and Trump Accounts launching July 4

Knicks. I think it'll be sick.

Yeah, that'd be sick. Well, thank you so much for coming on the show. Have a great weekend.

Super fun.

We'll talk soon.

We'll talk soon. See you.

Goodbye.

Up next, we have Brad Gersonner from Alimter Capital. We've been keeping him waiting and we're very happy to have him join the show again for the second time. Welcome back. How you doing?

Great to be here, guys. Great to be here.

Fantastic.

Back to back with Kyle.

Yeah. Yeah. He he laid out one of the greatest SpaceX bullcases. We're going to throw it to you to try and oneup him. He said, "Whoever controls space controls the world." And for that reason, you got to own SpaceX. I liked it. Um, but take us a level deeper. What are you thinking about in the SpaceX IPO in the leadup? What are you watching for? What unanswered questions are there? What do you think is misunderstood? Maybe.

I mean, I mean, come on, guys. We didn't even have any foreplay. You're already down, you know, at the SpaceX IPO. I mean, first, I haven't seen you guys. Did you sell this thing? Did you sell?

Yeah, I think.

I think we're working for you now. I think we're working for you now.

Did you guys get shares in OpenAI when you sold this thing?

Yeah.

Yeah. On the team.

So, we're all we're all on Open AI. Okay.

Yeah. I How much money did you make?

Come on. I mean, we got we got to turn the tables a little bit. Anyway,

let's talk SpaceX. Um

well well well maybe before that we can rewind a little bit because I do remember the last time we were hanging out in person.

Uh I it was at Katsenberg's event, right? You were basically it was kind of this interesting

moment cuz in some ways we were going through a mini correction,

right? Like chat bots, you know, grew incredibly quickly. agents were just starting to work. Uh, and it's been interesting to see how the market did go through this, you know, correction in Q4, but then realize, hey, wo, agents are a thing. And you had pretty much perfectly called that in the conversation

that uh that we were having, which um

yeah, in some ways it's just been uh it's been such a wild year for so many reasons, but I feel like you had a somewhat of a crystal ball back then.

Yeah.

Well, I mean, thank you. and and I recall that conversation and and the truth of the matter is we've gone through several many corrections over the course of the last two and a half years, right? There's been a wall of worry. I mean, on my p podcast with Bill, uh Bill Gurley, you know, we debated this uh you know, Bill was saying, "Will the revenue show up? Will there be gross margins? Will there be ROI? We're overbuilding. Are we, you know, every supply uh constraint turns into a glut?" And we saw all that wall of worry last year. I mean, I think for me the turning point was um when when we hit inference time reasoning and we really had this whole other vector of scaling intelligence. And I remember having Jensen on the podcast and he said, "Brad, inference isn't going to 100x, it's not going to thousandx, it's going to 1 billionx

because agents are going to be talking to agents." Yeah.

Right. And so I got very pilled.

And then when we saw Opus 4.6 six. In the beginning of December, it was clear that we had crossed a threshold of intelligence that offered a level of utility that was fundamentally different. And if you were paying attention early in December, you could see that coming. But we started the year

um with the market very skeptical as to whether or not AI revenues would show up. And let me tell you this, had Enthropic not delivered its revenues that it's delivered this year, I think the stock market would be down 10 or 15%. I think it's that important to the entire narrative because the fact of the matter is OpenAI has not blown away their numbers. Google has not blown away their numbers like numbers have been good but the fundamental driver of of of outperformance in terms of offtake of AI revenues has been Anthropic which is the fastest growing company in the history of capitalism. that buoyed the entire AI segment and it was when they started posting those numbers and then they said on top of that we're doing it at high gross margins in a way that in Q2 may in fact actually lead to free cash uh some positive free cash flow the market really ascended over the remember two months ago the market was basically down on the year

and a lot of these returns we just had two of the biggest months in the history of altimeters public funds that's 18 years I mean we're going back a long time but That's, you know, listen, I think we picked some pretty good stocks, Memory, Logic, etc. But I also think it's just a function of the market delivered, these companies delivered. You saw Dell's, I mean, listen, Michael Dell, one of my best buds, and you watched the the act, you know, that he's delivering with Dell. They just had AI server revenues up 750% year-over-year. Went from a $1 billion business to a $16 billion business. This stuff is real, but in order for it to stay real, we have to continue to see usage by consumers that they're willing to pay for and growth in the enterprise, small, medium, and large that they're willing to pay for and growth in the sovereign domain. I think it will occur, but often times, you know, there'll be some pockets along the way here where, you know, where where revenues won't be as strong as people think. We'll have some pullbacks. We could have 10 to 20% pullbacks in the semiconductor stock as just like run-of-the-mill consolidation.

Yeah. Yeah.

Right. Run-of-the-mill consolidation. I mean, Micron has gone from a couple hundred bucks to a,000 bucks. Dell this time last year was, I think, 80 or $90. It's now at $400. These are seismic moves.

Yeah.

Right. And so, uh, yeah, I fortunately we were pretty bullish when other people were skeptical. Yeah. Um but

yeah, it feels like it feels like there's uh there's like this natural reaction anytime there's good news, someone has to dig up something that's like a little bit bearish. Right now, we're seeing, you know, incredible anthropic revenues and then there's questions about ROI on token maxing and how much is going on there. How are you processing that? Are you thinking that uh we'll see CEOs and management teams on the next earnings cycle uh sort of start to dig into those numbers or is it just uh the better AI psychosis?

Yeah. Well, that's the most extreme version. The other one is, yeah, we actually did spend half a billion dollars in a month and, you know, a quarter billion was super effective. So, that's what we're doubling down on in the coming quarter. But how do you think that shakes out?

Well, I mean, if I if I size up the debate in Silicon Valley,

yeah,

right, there are the the bears who've been bearish on AI for, let's call it a while,

and anything that comes out anything that comes out is actually just bearish,

right? And so now they're saying, "Oh, all this AI revenue is bullshit." First they were saying it won't show up at all. Yeah.

And then it showed up and then they're saying, "Oh, it's all [ __ ] because it's all token maxing and there's no no ROI." So that's one side. Yep.

On the other side of the people who are super AI pilled and they're like, "Oh, no. This is perfectly, you know, paro optimal. Everybody's spending the exact right amount of money on tokens, which we also know is not true." And the truth lies in the center. Okay. when you have millions of independent actors all making self-rationalizing decisions like Altimeter on buying tokens, right? I don't like I don't like to waste money.

Yeah,

I'm spending money because I'm getting a return. Now, will we will we experiment with some things that don't provide a return? Of course. I actually sent you guys a slide on this. I think it's pretty fascinating. I don't know if your team can pull up, but this is independent research that we did on this question of of token maxing. And what we did is we went to 300 enterprises, right? And we just asked them, are you starting to optimize your spend? And if so, how much do you expect that you're going to spend year-over-year over the course of the next 12 months? And if you leave that chart up, what you will see, guys, is that in the first category, these are all people who are actively optimizing,

but they still expect to grow revenues at over 50% over the next 12 months. The second category are people who are planning to optimize and even if they're planning to optimize, they say they're going to grow revenue at 90%. And so on. So here's my point on this, right? And this is across 300 firms who use a multiple uh uh of AI solutions. This is what they expect of their AI uh uh you know uh API token usage.

Yeah.

So what are we what what does that tell us? It tells us that of course people optimize along the way but we are so early in the adoption curve right they're barely using coding today they're just getting on the coding train and they haven't really even started on using AI for knowledge work more generally so we're low in the use the penetration of coding as a use case we're almost nowhere in in the penetration of knowledge work more generally as a use case and then remember this

there are very few enterprises you know globally that are even using AI. So, we're really early in the curve of the people who are actually using AI. So, I'm somewhere in the middle. Of course, I believe that optimization will continue. But my hunch is that Anthropic and Open AI, these companies will continue to grow right through the optimization because the growth curve on penetration of both enterprise and use case is so steep. U but you know, we'll see.

Yeah. Um, is this a is this a zero sum market where every dollar spent on tokens comes out of a SAS company? How are you reflecting on the SAS apocalypse? Because we all saw what happened in the market. Uh, but there's been some really good news lately. How have you processed that?

Um, well, I I I popped on CNBC for a second yesterday and was talking about Snowflake as an example. I mean, the stock was up what, 35% yesterday. Now, of course, just to be fair, it's only up 10% for the year.

Yeah. compared to a company like Micron up 200% for the year, a company like ARM up 200% for the year,

but they did bounce back. And what what I think we're starting to see is the bifurcation. There are companies that are in the token flow. So all these software companies we just lump together, right? We treat them as though they're all equal.

But there are certain software companies, data bricks, snowflake, and click all of which we're investors in. It's very clear to me they're in the token flow. As you consume more tokens, the amount of your database queries goes up. I see it at alttimeter, right? In fact, our database queries are growing faster than our token usage to give you a sense. And this is I think so now they've proven they're in the token flow. So they're starting to get some love from an AI multiple perspective. That's very different than a company I think like like Salesforce. And I love Mark Beni off and and got you know he if anybody can you know get in the token flow it'll be him. But the reality is the the front-facing solutions that they offer are more competitive with the models than something like snowflake. Snowflake's the enabler of the models whereas I think that Salesforce competes a bit more. So it's going to be more challenging. But I also I I've heard so much about this SAS apocalypse and and listen I did a pod with Satcha I don't know 18 months ago where he caused disturb by saying software is a thin user interface on top of a CRUD database and Benny off and everybody freaked out. out there like what are you saying it's way more than that right and then Bill and I did a pod is software dead so it's not like this is new but then everybody started freaking out in December all these uh multiples reset but the question is what did they reset to

okay and this is what I want to focus on here so if you show this slide that that I prepared for you fine esteemed gentlemen

um you know what this slide shows is that the multiple correction just took software from a place where they were way more expensive than the market multiple

and brought them into the category of the market multiple. Right. So now they're trading at about 22 23 times real SBC included GAAP earnings.

Yep.

That's about where the market is trading.

Yeah.

So now just follow me on this.

Software is trading most of these software names are trading at a higher multiple than Nvidia.

Yeah.

Right. Nvidia is trading about 13 times earning for 70% growth for the thing that is the most

essential thing in AI and they're they're they're at twice the multiple. So like when I hear everybody crying that hey these multiples aren't fair, it looks to me like the multiples reset from an above market multiple where everybody thought this the software revenues and and earnings were impenetrable to now they're saying well I don't know some of this maybe three, four, five years out will be replaced. So, we're going to raise the discount rate. We're going to lower the multiple. They've only lowered it to the market multiple. Let me just suggest that there's a possibility these trade well below the market multiple.

Sure.

Right. I'm not I'm not wishing for that, but I'm just saying there's a distribution of potential outcomes here.

If you get on the AI train, if you get in the token flow, you're going to get a above market multiple. If you don't, if you slow down and it looks like every time that computational intelligence improves your business gets worse, then I promise you they will trade below the market multiple and there's and there's more room to the downside. So for us as investors, you know, Warren Buffett has this, you know, this old metaphor, you know, there's the easy basket, there's the hard basket, uh or the the yes basket, the no basket, and the too hard basket.

Hard basket. For me, software today is generally in this in the too hard basket.

It's notable because you've been saying that I I think for months now

and there's a lot of people now that there's been a stabilization that that say like, "Oh, I'm I'm smart enough. I can I can I I'm I can outsmart the market here." And like you're saying, even with where multiples are now, you still could be catching a falling knife. Um I wanted to ask you about uh the uh a potential data center moratorum and how you know the likelihood of something like that in your view. how that would if you have less capacity coming online that would obviously be bad for you know chip companies various companies in the hardware supply chain but it could be great for people that are actually have you know basically like have tokens to sell because they would potentially get more pricing power. How do you

I think it's bad for everybody. It's bad for everybody but most importantly it would be horrific for America.

Yeah. Un lest we be overconfident in Silicon Valley. Let's remember that activists, a small group of activists shut down supersonic technology and a small group of activists shut down all nuclear clean energy in this country.

Okay, we have a 100 fision reactors being built in China. We have one in the United States. It's a disaster that happened. And so we can't take for granted that the cooks who are calling for data center moratoriums, right? Which just think about this for a second. All of our GDP growth is coming from the fact that we are building data centers and driving AI and driving productivity improvements in the economy. A data center moratorum would thrust us straight into a recession and high unemployment.

Secondly, it would seed the entire global game to China. Mhm.

Like overnight we would lose to China in the global AI race, which is not just about AI. It's about economic security. It's about jobs and it's about national security.

Yeah.

So it literally is insane that we would do this. I can't even believe there are people talking about it. However, what why are they talking about it? Because people are concerned. Local communities are concerned. I just got back from celebrating my mother's 90th in rural Indiana um you know over the Memorial Day weekend. And what I'll tell you

happy birthday she's incredible. She is so incredible. But you think about a place like Mishawaka, Indiana.

Yeah.

Where you know they're building a data center. I mean folks here they they're worried about their jobs. They're worried about their kids having jobs and then they're told by these crazy activists who show up in their town they're not going to have any water and their electricity bills are going to go up. So can we blame these people for being a little agitated about what's going on? So I'm actually working on an initiative I'm not prepared to announce today but with like everybody in the value chain all of the cloud companies all of the NVIDIA and AMDs and you know and offtakers etc and the white house that would deliver a very tangible and profound dividend to the communities that we're building that would be I think it's the there's a very elegant solution there. You're the guy to do it. You're the hero that American capitalism deserves. you got Trump accounts done. I feel like this is a good good next act for you.

Um well, I'm I'm in the mix. Um I'm happy to do my part. There are extraordinary people around the table. Um but here's the thing. We have to build the socopolitical bridge for the next three years, right? In three years, it's going to be obvious, I think, the abundance and the benefits that AI is driving for us as consumers. Everybody's going to have their own personal assistant in their pocket, right? For next to nothing. Think about that. can do your calendar, can order your food, can you know get you a new black t-shirt, send mom a birthday present, all the things. And every enterprise is going to have things that uplevel us all as humans. So I am firmly just like uh you know uh John Mater Kanes was at the start of the industrial revolution. I am firmly in camp optimism about technological progress, but I'm also not head in the sand about the disruption and the concern people have for the next three years. So, we have to give them tangible benefits that get us over that bridge. I think we're going to do it. I'm feeling pretty optimistic about it. But, you're right to bring it up and you're right to be concerned about it. We cannot take it for granted.

Yeah. the I mean this just goes back I think it's entirely fair that individuals you know if you say I'm going to put an AI factory in your backyard okay is going to create jobs uh briefly and then you know some some some maintenance I think it's totally fair for people to not want it in their backyard because there's some they they they perceive some risk uh and uh there's no direct benefits because they can just get AI anywhere right it doesn't matter where the data center is but there's a solution Yep.

Um, how are you thinking about adoption curves? Uh, it it feels like part part of the reason that we've had, you know, these kind of like rolling uh corrections is that, you know, technology gets adopted really quickly. People assume that it's just a a straight line forever, but then there's a new capability, a new a new technology, and it feels like stuff is just breaking through like instantly. Um where have you like are you adopting new frameworks internally to to try to understand how quickly new products can uh get to market? Obviously enterprise is is different but uh it feels like the line between consumer and enterprise at least in you know coding has never been more blurred

for sure. I mean, listen, I I think about when I got into the game, guys, 1999, 2000, and we had about 35 million people connected to broadband internet, right? We all saw what Amazon was going to be. But where we got over our skis, right, is we thought it would come a lot faster and we forgot that there were only 35 million people connected to broadband internet.

Yeah.

Today, we have four billion, three, four billion. Like the rate of diffusion and the the the the magnitude of diffusion is radically radically different. And think about this. We have a natural constraint on how fast we can go because we only have so many memory wafers in the world. We only have so many logic wafers in the world.

We only have so much powered shell in the world. That means we can only produce so many tokens. Okay? And it's almost as though in 1999 2000 we could only lay so much fiber. I've said this a thousand times. When we were putting down the fiber in 2000, we called it dark fiber for a reason. There was nobody using it and we knew there was nobody using it when we put it in the ground. There's not a dark GPU in the world today.

Yeah.

Okay. There's not a dark token in the world today. So I think it's a very different thing. I think it's a healthy thing. We have this wall of worry. We can't build that much supply. And I would say if I look at every company, what did they report on their earnings calls? Google was token constrained. They said if we had more tokens, we'd be able to generate more revenue. Same for Amazon, same for Microsoft, same from OpenAI, same for Anthropic. The world demands more intelligence. Intelligence can only be produced with tokens. And we have physical limits to the amount of tokens we're going to be able to bring online. So yes, we will have these waves, but I think the rate, the parabolic rate at which these new models are going to produce intelligence, I think we're going to be blown away over the course of the next nine months. you talk independently uh you know to Michael Trul and the guys at Cursor and now you know taking over X.AI or you talk to uh the guys at Anthropic or OpenAI and they kind of look you in the eyes with that Oenheimer look and they're like we're here.

Yeah,

right. Like we're like like we are going think about this. Open AAI and Anthropic combined to start the year had three gigawatts of compute. Three combined.

They're going to end the year closer to 10 and end next year closer to 20. Yeah,

we're making algorithmic improvements. We're making massive steps up the scaling wall because the amount of compute we're going to have available to us. Think about, you know, uh macro hard and macro harder that, uh, cursor is going to now be able to train a frontier level model on. So, we've got incredible competition in America. We got the right amount of compute coming along. I don't worry about the bubble as much even though I know that, you know, uh, there there will invariably be, you know, some months that revenue doesn't grow as fast. Um, I'm really worried about making sure that America stays foot on the accelerator, competing globally, and winning the AI race. Like, this is going to lead to a moment of of of abundance for our economy. And it's only through great national wealth that we can raise the floor for everybody else.

Yeah. No, that makes a ton of sense.

Uh, there was some reporting this week that Meta is hiring FTEEs. I was sort of surprised to see them going into the enterprise because it feels like they have every advantage on you know consumer they have the billions of users they have uh they have you know exciting hardware uh all all these things. Um how much did you was that was that surprising to you at all? Do you expect more companies that weren't traditionally, you know, enterprise focused to say, "Hey, there's tens, maybe hundreds of billions of dollars of revenue here, we should be we should be in this market."

I mean, the second you start spending a hundred billion dollars on capex annually, okay, you run into the AWS problem.

What's the AWS problem? Now, I have all this compute, but I don't use it every day equally.

Yep.

Right. Jeff built AWS because he said I have to build my capacity for Christmas day or the, you know, the week leading up to Christmas, Black Friday,

but he's like, the rest of the year, half of that stuff's sitting idle. It's expensive as hell. So, I may as well rent it to everybody else, right? Turned into uh, you know, a blockbuster business, but it made his core business better

because he could he could build to Black Friday, right? And nobody else could because they didn't have AWS. So, that's why Elon has launched EWS, right? Elon Web Services. um you know with his comput you know signed up a big first customer with anthropic listen nobody on earth is better at turning electrons into tokens than Elon

right so expect a lot more data centers out of Elon expect them on earth and eventually in space and I think that changed the whole tenor of the SpaceX IPO both the cursor deal and the anthropic deal I think that went from you know people being slightly concerned about it to people being quite excited about I'm happy to you know to to unpack that so I think that for Meta, if they're going to be in the game of spending that much money, listen, Susan Lee is, you know, incredible over there

as the CFO

and I'm sure they're looking at their strategic plan and Mark is saying, I want to build even more because that guy is never going to give up the race, right, to frontier level AI. None of these guys want to give up that race and so they just have to figure out ways to monetize everything that they're building. Do I worry as a shareholder at some level that it's, you know, that's hard. That's hard to take a business that's been 120% consumer and say, "Okay, now we're going to be in the business of AWS and maybe even in the business of enterprise level agents." I think it is hard. I think they're up for the call. And remember, you suggested the merger between, you know, productled growth. These coding agents kind of feel like consumer adoption. Yeah.

So, there's a lot of shared consumer DNA with what's going on in the enterprise today. So, they may surprise some folks. Um, but um,

and does have links to like hundreds of thousands of businesses through the ads platform. So, it's not like they don't have any relationship to businesses. They do. So,

one more that I I was curious to get your thoughts on, Kirkland and Ellis uh, is talking about investing half a billion dollars into their own

uh, software to help run their firm. uh a lot of people pushing back on that. Historically, you take a a firm that doesn't have strong, you know, software competency and they spend, you know, hundreds of millions of dollars on their own software. There's a lot of examples where that hasn't gone well.

Yet, at the same time, software making software today is wildly

uh different and uh it's very possible that that things are changing, especially if you can get the right partners around and I know they have some great partners. uh do you expect more companies of that scale services businesses to want to try to own as much of the stack as possible and not be rellyant on you know the Harveys or the Loras of the world?

I mean what else are they going to do? I mean it's kind of like what else are you going to announce? Oh just we give up you know so like and like they got to do something. The competition is coming straight at them.

Yeah.

I I don't think it's a high probability bet personally. Like if I was a partner at Kirkland and Ellis and somebody pitched me on that, I'd say I I'm not sure that's the highest and best outcome here. Um so what is an alternative outcome? Well, good friend, you know, Josh Kushner, what he's doing at Thrive Holdings, right, where he's buying accounting companies. And now I have somebody who's just like deep in the weeds recruiting the best engineers in the world, deep partnership with OpenAI. I saw Greg Brockman retweet the great the work that they're are that they're benefiting all these accounting firms like they're driving just huge productivity gains in these accounting firms. So it seems to me that that's a more likely outcome. You know a Thrive Holdings buying a Kirkland and Ellis and saying now we're going to you know take this thing and AI turbocharge it. I think you're going to see a lot of that out of private equity firms out of out of firms like Thrive Holdings. I think you're going to see take privates where people do that on an individual company uh basis. But am I confident that software has gotten so easy that a law firm that gets up every day and thinks about writing legal briefs is all of a sudden going to write killer legal software to compete with OpenAI and Anthropic? Uh I think that's unlikely.

That's hard.

Uh what what is your thinking around the series A B C these you know earlier growth rounds? feels like a lot of investors are just kind of frozen. They, you know, you were talking earlier about not necessarily frozen in terms of their activity. They're doing a lot of deals, but they maybe don't have as much confidence knowing what will get steamrolled,

what will get steamrolled in the future. You were talking about being in the token flow. Is that like where you feel comfortable deploying at this early stage where, you know, you're betting on a you know, a 10-year outcome? Yeah, I mean listen, I I think we all have to have the humility in these moments to know that looking out 10 years is almost impossible. Um, looking out 10 months is pretty damn hard. Um, but I would say if you just looked across our portfolio and you know, I think Altimeter is performing better than it has any time in its 18year history. you know our early stage team I think

overnight success

awesome you know awesome work uh on the early stage side but if you look at the type of stuff that we're investing in it is in the token flow

right we're building to those compute shortages you know we had the cerebrus IPO you know last week we had been in that for nine years um you know investors you know grock so we're looking at a lot of other semiconductor uh type businesses we're looking at a lot of compute uh data center type businesses. Um, and you know, I I you just had, you know, your prior guest, you guys were talking about all the stuff you're doing in military modernization and the stuff that's adjacent to AI but are benefiting from AI. We're doing a bunch of stuff there um in modernization of the military. So, I think you find places that are either in the token flow or benefiting from the token flow. And then I would say in growth like we're just not doing a lot in what I would call inflection stage growth. This is the companies at 5, 10, 15 billion. You know, we've really made massive bets, the biggest bets in the history of Altimter between OpenAI and Anthropic, which uh you know is consuming billions and billions of dollars. Um and so we think they are the principal beneficiaries. And then on the public side, um for three years now, we basically had 100% of the portfolio in AI and compute. And you know as I sit here today even though it's come up a lot you know Highix is still trading at a single digit multiple and Micron's trading single digit multiple and Nvidia's trading at 13 you know times and you say how is that even possible?

Nvidia's up 15x like better than a venture market return over three years like like think about that like all the venture returns have been had in the public markets by the way guys

the earnings have come and but their multiples have come down.

Yeah cuz the earnings

their multiples have actually come down. is the cheapest multiple Nvidia has traded at in a decade right now.

Okay. And by the way, I think their growth is going to continue to sustain. They're now taking 50% of their free cash flow. Yeah.

And returning it by way of dividend or buying back stock. I would encourage Jensen to do 70 or 75%. I think if he does that, by the way, a prediction. Um, you know, look who invested in Apple the second they bought back or the second they committed to 50% 75% of their free cash flow returning to investors. Warren Buffett.

Yeah.

One of the greatest investment returns in history, right? And so once you make that cross that threshold and I think this, you know, they're running that business incredibly well. So the public markets, we've had, you know, basically 100% AI and compute. We're basically there uh, you know, today. So, I think it is harder if you're a series B or series C company. Think about what we used to do in software. If at series A you had a couple million in revenue and then series B, I don't know, you had 20 million in revenue. [ __ ] you would have a line out the door of people who wanted to do that deal. There's you wouldn't have a single taker.

Mhm.

Not a single take.

You mentioned uh something I think that resonates with everyone. It's very hard to predict what's going to happen in 10 years. Obviously your job is to, you know, look at trends and names, but uh I want to know about the Trump accounts and I want to know about uh investing for the next generation for children. Uh advice also get me up to speed on the program. What's rolling out? What's the progress? But then what is advice to parents in an uncertain time where setting their children up for success is maybe more critical than ever? Well, um the update is that after four years of working on this and, you know, getting it passed into law last July 4th, uh the Invest America Act as part of the the Big Beautiful bill,

um you know, it's set to uh launch and be funded on this July 4th.

But we launched the app, guys, yesterday. So, you can download the app. Every single family, you should tell every family you know who has a kid,

Yep. They should download the app for their kids, get their kids signed up. There are 35 million kids in America under the age of 10.

Okay. Who get at least 250 bucks.

Yeah.

So, if you're basically born after January 1st, 2025, so think about like under two, you get a,000 bucks in the S&P 500.

Yeah.

If you're between 2 and 10, you get 250 bucks. Most of those kids will get 250 bucks from Michael and Susan Dell. If you live in Indiana, you'll get an extra 250 from me. If you live in Connecticut, you'll get an extra 250 from Ray Dalio. If you live in Oklahoma, you'll get 250 from the state of Oklahoma. Okay? And that's just for starters. We have thousands and thousands of companies.

There's a lot of billionaires in states that you didn't name and they're starting to get a little They've heard from you. I'm sure if they haven't heard from you, they're going to

It's coming. And by the way, the generosity, this is the giving pledge 2.0.

Yeah.

We have trillions and trillions of dollars that are going to change hands in this country. This is the single most efficient way for somebody like me to fund the next generation. A hundred cents on the dollar goes to the kid. It compounds for 18 years for their lifetime. It makes them a capitalist, an owner. We know they're more likely to graduate from high school and college, more likely to start a business, more likely to to buy a home. The societal ROI on this is off the charts. So, we launched it yesterday. Get a get a rip of this, man.

It is now the number three app in the United States.

The number three app. We just passed Google. We're only behind Catch Eyebt and Claude. It's incredible. Your

other You're coming for your kids is in all three of the top app store apps right now. Total Gerson.

It's a total Gersonner victory. Well, well, I would say um you know, kudos to Vlad and the guys at Robin Hood and BNY and Joe Gabbia at the National Design Studio and frankly the whole team at the Treasury Department led by Luke Pettit and the Treasury Secretary.

This is the way government should be done. A citizen had an idea.

He was able to go to Washington and actually get a law passed

and then we put together a SWAT team of people who are experienced building these things to build them. And then the consumers, i.e. the citizens of America who pay for this [ __ ] said, "Hey, we love that thing and and and and bid it up on the app store." So, we have a lot of people downloading the apps. There are a lot of improvements coming. So, be patient with us, but download the app.

Get you get your kid on the path to compounding. Um, on July 4th, guys, the money turns on. So, you'll every parent's going to see that their kid owns a little Nvidia, a little Microsoft, a little Walmart, right? their little slice of all the top 500 companies in America. And on July 6, I hope we have a joint bell ringing of the New York Stock Exchange and the NASDAQ from the Oval Office uh to really signify the start of of of the trading these accounts. Of course, parents don't have to know anything about investing. It all goes into the S&P 500.

Yeah.

Okay. But I'm cajoling some of our friends. Um you would know their names. Um, I think it would be amazing if we had some of our friends gift a share of the most amazing companies in America. You know, the Facebooks, the SpaceX's, the Open AIS, how about if they all gave just a share of those companies to every kid in America?

Yeah. Be incredible.

Like we we are going to change and reorient how the 70% of people who have felt left out and left behind. They are not owners of capital. Okay. We need to get them on the compounding journey. They need to feel like they're on team America. they're in the game. This does that for every child. This is not a 529 account for the top 10% of Americans who can afford to save. This is for everybody. And it's so gratifying. I was in Durham last Friday. I adopted a school there. 700 kids, $250 to every one of the kids. Now, a lot of people say, "Well, how'd you do that?" Well, it's $250 times 700 kids. They made a Google spreadsheet. They got them all signed up. I give the principal $150,000 and she QR codes the money and teach you the accounts.

Okay? Everybody in America can adopt a school, raise a little bit of money, go to your principal and say, "We want to juice up these accounts for all the kids, get all the kids signed up." And the teachers there, this was a school that's 75% black and Latino, serving the rural poor in Durham. The level of excitement, a mom came up to me crying. I never thought my kids would, you know, own anything. the teachers so excited to teach the kids about what it means to to own something. You know, I grew up in rural Indiana and we had zero. And as I said to the president, when you're at zero, it's a despondent place to be. You don't know how to get to one.

Yeah.

The hardest move in the world is going from zero to one. One to two is easier and two to three is easier yet.

We're going to get all of these kids from zero to one on this compounding journey. If you start with a,000 bucks and you save $50 a month, it's $50,000 at age 18, there's no reason we can't put every kid in America on that journey. And to celebrate our second 250 years, right? We're we're launching a natural uh you you we're going to launch this as a dividend for every kid in America. So, I want to make sure that they all sign up starting in 2027. The 3.7 million kids born in 2027, it will be automatic.

Yeah.

Get your social security number. you get uh a Trump account. Um and then we just need to get every small We're giving money to the We have 80 kids uh you know to our you know roughly 35 employees. They're all going to get 500 bucks at the end of the year into their Trump accounts. I'm just going to QR the money uh by my team into their accounts. You guys should do it for all the companies you're involved in and and really spread the word. Small, medium, large business, realators, restaurants, everybody can do this. And so we've created an open-source platform of universal private ownership

where the families have the title and they have the dignity the dignity of savings. A 401k for life for every single American citizen. I think it's a game changer for the country.

Yeah.

You did it.

You did it. It was fantastic.

[ __ ] did it. No, I remember you you you talking about this and uh and you know, as as as much as respect as I have for you, uh I put it in the in the it's too hard bucket, you know. I I I put it in the it like this is a thing that is just too hard for anyone, even even the best. And fortunately, it was not, which is fantastic to see. It's the ultimate white pill. So, thank you.

That's amazing.

It's a we're you know, it's still day one, but you know, we're off to a good start here. And um you know I think in the fullness of time as the president said we estimate over 15 years it could transfer three to four trillion dollars

of wealth from people who have it to the people who would otherwise have zero.

Yeah.

Um and um you know the president has said he thinks it's going to be his biggest legacy. Yeah.

Um to me I think it'll be more impactful in the fullness of time than social security because the difference is

you actually own this.

Y

you actually own it's not a government program.

Yeah. Yeah. This is a private account and private ownership that can compound through your life.

And you and you have to imagine that you know if if you get to that place where uh you know there's there's a whole new generation that's uh you know becoming an adult starting a family with 50 100 $200,000. That's a down payment on a house. All of a sudden that can underwrite more building of houses because there's more buyers in the market. There's there's a whole bunch of market forces that I think will knock on from this in 20 years that could be incredibly positive. So, I'm I'm extremely excited about it

in indeed. No, no doubt about it. It's a uh you know, you're going to you're going to hear a lot of a lot out of us over the course of the next several months. But it's, you know, listen, I also should mention I've got the best partner in the world on this. You know, Michael Dell joined me. Uh he and Susan joined me on on on this journey. Really helped me over to get it over the last one inch line. Yeah. Um with the administration and then made the biggest philanthropic gift in history, 6.25 25 billion um $250 to 25 million kids. Yeah. And you know, frankly, I think for Michael and Susan, they're just getting started. And I think their example that they've set for everybody else, um you know, if you have if you you guys look at the amount of wealth that's being created here in Silicon Valley, I mean, it it's it's it's really there is no historical precedent. Yeah,

there is no historical precedent. Um and the fact of the matter our charitable our charities are not prepared or equipped to take 10 2050 billion dollars like and a lot of people want to give away this money during their lifetime or you know within 10 years of dying

and target and and targeted too

and in a way in a way that there's no

scales up or down. It's like you can do the whole state.

Exactly.

You can do your county, you could do school. Yeah. And there's not 30% overhead on the charity where somebody's getting paid $10 million and you know all this stuff happens after you pass away. A 100% of it goes directly to the kid.

Yeah. Charity was so vague for so long. It was like great, okay, you gave away half your money, but you're actually not transferring until you die and then it's going to go into this charity that we'll deploy it later. it gets so abstract that I think people uh all of those big donations that happened in like the previous era sort of fell on deaf ears and they weren't it didn't feel like they were moving the needle and so this is just an entirely new way to do it. I love it.

The chat is asking if you have any surf trips planned.

Wow. I wonder who that's must be checking out my uh my Twitter picture um which by the way was at the surf ranch. Okay.

With Raondo. Oh yeah.

And the picture actually it some people think it's me. It's not me. That was my then 11year-old son getting barreled at the surf ranch because Raondo was like telling him how to get into the barrel.

That's awesome.

Um, but I have to say I'm 55, guys. I just had a birthday.

I'm working hard.

There we go.

I'm working hard.

I feel like I just can't imagine you being like, "Yeah, now's a good time to take a surf trip." I feel like maybe a trip to Surf Ranch, but

you got to stay locked in. There's a lot of work. We ought to get we ought to get together and do that. By the way, I'm I'm I'm currently signing up somebody who's going to uh adopt all the kids in Los Angeles. We've got San Francisco already covered. We've got Oakland already covered.

Um and uh we're going to announce some big things here in the state of California. I'm not giving up on California. Yeah.

Right. We're going to defeat We're going to defeat the unconstitutional taking tax. Yeah.

That some people call the wealth tax or the billionaire tax like this attack on success. uh you know trying to divide wedge you drive wedges between Americans. We're uniting people with the Trump accounts with the Invest America accounts. We're raising the floor and getting everybody into the game. And this whole idea that we're going to demonize success and drive Elon out of the state etc. Uh shout out by the way to my junior uh uh son Lincoln

Gersonner

who published his first paper this week and I I show up at home and it's it's on the economic impact of tax policy in in California. I show up at home and he said, "Hey, Dad, I po I I I I I finally uh, you know, posted that that paper I was writing." He's doing it with Josh Row, the incredible professor over at Stanford. He's And then he says to me, he's like, "Has Mark Andrea ever retweeted you?" I said, "No." I was like, "No, I I don't think so." And he goes, "I think he retweeted me."

And I was like, "No, he definitely didn't retweet you, but Mark did." So, shout out to Mark.

That's awesome. Um,

and that's, you know, I I I think that we are what what people, there's a lot of dispondency in California.

Um, I'm going to take a contrarian position here.

Spencer Pratt's going to be the new mayor of Los Angeles.

The Wealth Tax will be defeated.

We We will pass the Retirement and Personal Asset Protection Act as a referendum in California, which will prohibit people from stealing your retirement money or your personal assets. That will get passed. Okay, that will send a shocking message to the rest of America. The rest of America thinks that California is as blue as it gets. It turns out California is pretty purple.

Mhm.

Right. And I think that common sense initiatives are going to uh you know, reassert themselves in uh you know, in the election in November. Um and I think it's great because we're the fourth largest economy in the world. I know some of my friends moved out and said, "Listen, California's got it coming to them." My own view is this. As California goes, so goes the country. We cannot seed California. It is where we're going to battle for the best ideas that are consistent with the founding of the country and we're going to, you know, win on those ideas. And so I think we're we're seeing a lot of progress. Shout out to Sergey um and Building Better California and the incredible work that they did to to get us moving in the right direction.

It's fantastic. Well, great stuff.

We've kept you way too long, but thank you so much for following the show and hanging out. This is

and excited for your next project.

Yeah. How much did you sell How much did you sell this for?

Let's go for Let's go for Let's go for a serve.

Yeah, we can stay far away from the

I'm going to turn I'm going to turn this into a little BG2 and turn the tables on you guys. I need to get some more some more the other way. Great to see you. Have a great weekend.

Great to see you, Brad. You're the man.

We'll see you.

Goodbye. What a performance.

Uh I'm I'm so excited about those accounts. I really can't uh I really can't

Oh, it's so cool being able to scale it up or down. just go, "Hey, everybody at the where you went to elementary school, you know,

this was how I first saved money. I had a physical safety deposit box at a bank. Every time I'd get paid, I'd go take out a couple hundred dollars in cash, put it in the safety deposit box. Couldn't really access it on the weekend when people were, oh, you want to go spend money, you want to go to the bar, save the money, watch it physically grow." This is kind of a similar example because you'll put money in, but you won't be able to pull it out until you're 18. So, it'll just compound and compound and compound. Hunt asked John about his new basketball.

Can someone Is the car here? We have the basketball. Uh Nick, can you go get the basketball that's in my driver's seat?

Uh or in the passenger seat because uh we were at Laurel Supply yesterday, which makes Arowan look like a 7-Eleven.

It makes it makes look like a 7-Eleven. It's so above Noal is is the new Arowan in

in LA. That is not

It's very nice. not an actual arowan. Everything is a onetoone copy of arowan. They didn't they did not they did not it's like dis it's disorienting. They did not

try to differentiate a single thing.

They copied every item on the menu. They copied every

delicious food.

Every every single item

in my culture that's very offensive because if you're going to go through the process of creation

Yeah. You think be able to do something differently. Okay. But outside of Laurel Supply, I receive from uh I get stopped by uh a person who I believe is in the chat. Um and uh and he says uh here is a basketball. I got this for you because uh he's raising money for a company, Punter. And it says, "Invest in the future of sports, punter.invest." And he had this basketball with a QR code on here. What a unique way to draw attention to your company. What a unique way to uh to pitch someone. And you know, you know, we love a basketball in the in the studio. Although we use a software basketball because there's a lot of camera gear, so we don't throw a fullsize basketball. We use a we use a foam one. But uh thank you uh to the punter team for making this possible. Uh very interesting drop. Very fun. Very fun way. And uh what what a great uh what a great way to end the show. We had an NBA star on the show and we finished with a basketball.

That's right. Anyway, have a great weekend. We'll see you on Monday.

Have an incredible weekend.

Have a great Have an incredible weekend. Leave us five stars on Apple Podcast and Spotify.

Sign up for our newsletter, tbp.com, and we'll see you

flash

on Monday. Goodbye.