Grok 3, AI Memory & Voice, China, DOGE, Public Market Pull Back | BG2 w/ Bill Gurley & Brad Gerstner

26:38Right. So that I have it and I could perhaps go back later. And then I started thinking about it. And I said, I don't need to be the interviewer. Right. Advanced voicemote could be the interviewer. And so I was sitting there with her last weekend. Here's the prompt, you know, that I gave to an advanced voicemote. I said, you know, I'm sitting with my 89 year old mother tonight who wants to write her life story. I want you to interview her about her life. Ask questions about her childhood stories, having kids working, growing up in the depression, her love of computers and travel to remember everything you talk about.

27:14And then compose a story of her life that her grandchildren would like to read. Okay. And then advanced voicemote just started asking her questions. How long did it go? I mean, my mom was really nervous at the start. But then like a little tear wells. And my mom's alive. You know, because she she realizes all the sudden that, oh my god, this could be a massive unlock. So here's the thing, Bill. Advanced voicemote and ChachyBT already has memory. You can already do these things. The problem is the nature of the product. You don't know that it can do those things. So part of the challenge about designing a product where prompt is your way in is you got to help people imagine like you and I could have imagined in the age of internet, somebody building an internet website that just did that thing.

28:03Okay. So I think that's one of the challenges all these companies faces. And the innovation around that top end of the funnel in the prompt that can help people better get into it. I'll give you another example. Deep reasoning, right, which is really fascinating. They basically took the O3 series of models and fine tuned to end to end based upon all these browser interactions, right. And but you need to the more specific the prompt of the better the deep research report is going to be. So a lot of people are using O1 to help them build sophisticated prompts that they then feed in to deep reasoning.

28:44And so I think that there's something in there where we're effectively using AI to get us to the point where we're better prompting and you know, one of the ways will be very simple. Right. Once I have this assistant and I'm having an interaction, I just say to my assistant, hey, my mom wants to tell her life story. I'm not sure how to go about doing that. If you have any ideas and she would say, hey, yeah, just use this prompt. And I also think that there are other assets that could play a role like a contact database, an email. Yes. I mean, I can even imagine moving my email to one that's integrated inside just because contacts is a great one.

29:22If they just cleaned up your contacts, but knowing my contact and know your contacts, but send an email, send a text. I mean, there's a there's a lot big. And then for anyone that works with content, there's some app, you know, I all my writing and everything I've done for the past 10 years has been equipped, but some people use notion. Yes. And like, like that type of repository and how these things can interact, there's just a lot of surface area to figure out. Well, where does that story land? Where is it stored? Right. Once you did it. Like, or do you have to take it out of open AI? Like, you know, you'd rather just have a place.

30:01Correct. And now you have projects in open AI and everything. So this is it brings me to a point when you think about these research labs and you look at the number of people who work there, right? Just the fact we even call them research labs. You and I haven't, you know, nobody called Google a research lab, right? It was a company. And then product teams had marketing teams, and finance teams, et cetera. But I think the net, because a lot of these people came out of research that you look at them and they're still very small teams, very heavily tilted toward building toward the benchmark. Open AI now is thousands of people.

30:35I know, you know, Kevin Wiley who runs the product team over there. You look, so all these companies, if you're going to win this race, you got to do all the things, great things that great product teams do and is building all the shit that you're talking about. And that's hard. And you got to be thoughtful and you got to growth hack and you got to, you know, get those customers to use the product more and more. One thing came out this week, which, which I don't know if it was intentional or not, you made no more than me. There was someone published the internal forecast of Open AI, which included, I think, in 25 and 26, losing 20 billion each year.

31:09And someone said to me, why would they publish that? Why would you lose that? And for me, I think there's a, there's a information war out there trying to scare capital in or out. And to, to, to, to lay a statement that if you want to be in this game and keep in mind, there's a variable cost every time you serve a deep research. And so if, if this is a, one of these situations where people think it's winter take all, just like we had with UberLift, and they're going to go hard at trying to win, you probably need to be willing to lose 20 billion a year to step into this game. And X looks like they have the potential to raise that kind of money.

31:56I don't know if a Microsoft or an Amazon are prepared to lose it, criminally, that amount of money. Well, this is, I mean, this is just such a fascinating segue into, by the way, there's one company we haven't even mentioned. Like when we went through all this, we didn't mention Apple. Right. Like at all. Pretty shocking. Right. Pretty shocked. Why didn't we mention? Well, I mean, so Apple has self selected out of the race. Right. They're not building a big model. They've been very public about. They think that they can be kind of late mover here. They did this Apple intelligence integration with chat GPT and now the rumors are going to do a Gemini.

32:35And the reality is, you know, as I shared with an Apple executive the other day, I said, here's the only integration that matters. My chat GPT app on the front page of my Apple phone. Right. That's me. Yeah. I mean, it's like the truth. It's the truth. Like I just don't use any of the integrated features on the phone, which I think creates vulnerabilities for Apple. But I think, you know, listen, this is the first time that they've been faced, I think, with this level of product risk. But the reality is they have such lock -in on this device. For somebody else to build a device, maybe Huawei around the world, they're going to be able to ship, you know, perhaps better AI phones around the world.

33:12They're not going to be able to ship them into the United States. We'll see what this Google ruling is at the end of the year. If Google is no longer allowed to be the default search app because of this consent decree, you know, do they really turn Android into the thing that it potentially could be? So I think there's a bunch of potential risks. So we didn't talk about Apple. I'd say the other company we didn't really talk about because we're so focused on the United States is when you look outside the United States, you really have to look to China because I would say the acceleration and velocity of AI in China is off the charts.

33:47You know, we talked a lot over the last few weeks about deep sea clearly coming out of left field, very efficiently building a frontier quality open source model. But most people have kind of quietly ignored probably the company that's the leader in AI in China. And that's bite -tains. Their AI, you know, their chat GPT equivalent is number one in China, right? And they've been using AI to drive TikTok globally for a very long period of time. So I know you have strong opinions on this. It seems to me the US has underestimated China at AI. And now we're at this inflection point where I think there are a lot of people who say, well, they must be smuggling GPUs into China or but the reality is China is going to have frontier AI and almost all the things we do to try to slow them down and stop them are backfiring on the United States.

34:43I couldn't agree more. I witnessed almost daily people that are either in government or even friends of ours who say we have to win the AI war with China. And I don't know what that means. Like I can't imagine an in -state where we control all the AI and they don't have any. It's already too late. It's too late. And they're smart. Yes. Possibly can be. Yeah. And they're innovating and you look at all the other products that they're crushing it in. Yeah, I just don't understand. And the reality is that we just need to focus on running our fastest race. We need the Teslas. We need the Open AI's.

35:27We need rockets that land themselves. We need all of this. But to think that they're not going to have BYD building great cars or they're not going to have deep -seek building great models or they're not going to have rocket companies that copy us and can land themselves like that. That would be naive. It's remarkably naive. Yeah. And like it's going to lead to people making decisions. Like you said, that either slow us down ourselves. A lot of the AI regulation would definitely do that or just provoke them in ways that isn't helpful. And it's not going to slow them down. Well, let me give you one example of this.

36:06And then I want to move on talking about the arms race, if you will. But during the BYD administration, they pass something called a diffusion rule out of the Commerce Department, which we've mentioned on this pod before, which created this convoluted set of rules by which US semiconductor companies could export outside the United States. Now, this wasn't exporting to China. We already have export restrictions with respect to China. But it basically made all these tiers and classifications on how much you could distribute. Did you have to distribute it through a hyperscaler or not? And the whole idea was to somehow prevent these chips from getting to China.

36:44But what it really does is it causes us to have to compete globally with Huawei with one hand tied behind our back. And it almost guarantees a Huawei level built and road initiative around the world. And the world's going to run on Huawei AI chips, which gives them then the demand that they need to build a frontier AI chip. And so again, well intention perhaps by the BYD administration, but totally backfires. And hopefully Howard Lutnik and this administration will throw that out. I think there are a remarkable amount of people in Washington on both sides of the aisle that have a perspective about China that they use words, enemy threat, have to win the AI war.

37:32And I just, those terms are so loaded. But I think they think they can achieve something. And if I owned Nvidia, my number one concern would be excessive regulation coming out of Washington. My number one concern. Let's shift gears here for a second. You talked about OpenAI losing this report that they were losing $20 billion a year. One thing I would just say, I'm not going to share anything that I shouldn't share. However, I think we one always has to keep in mind what is operating expense and what is capital expense. And there's a variable cost of serving a chat GPT query. I would posit that those variable expenses are not very high at mature.

38:21Although a deep O1 pro search or deep research could cost 2040, 50X. Correct. But I would just pause it for you that you'll be able to come up with a variable expense structure using the right mix of models that will be a great margin. It may not be as high as retrieval was for Google, but still a great margin. I think what people are conflating bill is when you decide to spend $20 billion a year to build out stargate, to build out clusters to do all these things. Now, as you know, a component of that is the CapEx needed to serve the inference. And a component of that is capital CapEx to build future products.

39:01And so, for example, if we're looking at Facebook or we're looking at Google or we're looking at Microsoft, Microsoft, I think is spending 80 % of their free cash flow on CapEx. Now, that doesn't, we don't quote that as their profitability. They have their net income. And then they have their net income less CapEx. I would keep that in mind. But what I would say is these folks are very committed to continue to invest aggressively in a future that they see as big. But we heard from Sacha on the Dwarfcish podcast, right? What many are characterizing as a pushback against, you know, what, you know, these high levels of spending?

39:44I think of my fleet even as a ratio of the I accelerated storage to compute. And at scale, you've got to grow it. And so, that infrastructure need for the world is just going to be exponentially growing. Right. So, in fact, it's mana from heaven to have these AI workloads because guess what, they're more hungry for more compute. Right. Not just for training, but we now know for test time. And as I said, test time, like here's an interesting thing. When you think of an AI agent, it turns out the AI agents is going exponentially increase compute usage because you now are not even bound by just one human invoking a program.

40:26It's one human invoking programs that invoke lots more programs. And so that's going to create massive, massive demand and scale for compute infrastructure. So our hyperscale business, Azure business, I think that's like get other hyperskilos. I think that's a big thing. And I think on the pod he reiterated, we're going to spend $80 billion this year. We'll spend more next year. But there's not a world in which we're just going to have unlimited unconstrained spending. Now this week, we also saw rumored that meta is out shopping for a campus, a data center campus. The rumored amount is $200 billion.

41:02Capable of building six to eight gigawatts. Now that sounds a lot like Stargate, which is kind of in that six to eight gigawatts. Microsoft, I think has five gigs installed. Probably is going to build a for what? What? Well, five gig worldwide. Is that what you mean? Correct. And going to build more. So again, it seems to me that if you want to be in the group of five or six, that's kind of the calling card you have to have. You have to either have a business or the ability to raise capital such that you can deploy a sufficient amount to build out that level of compute. Now in the case of open AI, enter masa back to lift Uber.

41:41And you know, masa's rumored to be leading, you know, a very big round, $40 billion round, you know, with a lot, which we saw they announced it at the White House. It is important. Many people interpreted such as comments as a tapping of the brakes. Yes. So tell me how you interpret it. And he said, because he said, I'm happy that some of these are leases. Yes. Which, which, I don't know any other way to interpret that. And whether there's two ways you can interpret. One is he's telling you like, I'm hedged against this being overbilt. Yes. Or I'm better off canceling a lease than sitting on infrastructure.

42:20I would say I'm saying even a little bit more like, let's be honest, such as said last June, we talked about on this pod that it was very likely that at some point there would be a supply and a demand mismatch. And you had to build a resilient company that could go through a zone of disillusionment. Right. So he basically said the reckoning is coming at some point in time. And so now he goes on to Argus. He kind of sounds like he's tapping the brakes a little bit, you know, and, and, and so I think that the interpretations of that should not be that he doesn't believe in AI. I think he very much believes in AI, but he's running a public company.

42:58And I think that he's made commitments to his shareholders. And he's saying, listen, I need to see a certain amount of inference revenue in real time to justify that level of cat -backs. Yep. Look, I mean, I think everyone believes in AI. This amount of spend and is, with something we've never seen before. That's why I've said, you know, that it's like better than watching succession. This is, it's a massive sport of kings. And there's, you know, and I think some of the things, whether it's the 20 billion losses or such, is saying he's glad he's got Lisa. Some of these might be part of an information, you know, war with other players trying to talk capital in or out, you know, and it's a, it's a high stakes game.

43:46It's fun to watch. Well, I think resiliency, business model resiliency is going to be critical here. Right. And what do I mean by that? It means liquidity. Because like, we know in the internet, there was a zone of disillusionment. We know in social, there was a zone of disillusionment. We know in cloud, there was a zone of disillusionment, right? A period, what do I mean by that? A period where the prices and the spend got ahead of the revenue. Right. And, you know, given the level of competition, some people describe as a prisoner's dilemma. Right. In the case of Google and Meta, they literally have a printing press in the backroom, spitting out billion dollar bills.

44:28Right. So they're resilient. Microsoft resilient. Right. In the case of OpenAI, they have to raise money. Right. So you need to have a big stack behind you. In the case of X, right, they need to be able to raise capital. I think there are some, some numbers out there last week. Obviously, Elon is, is the wealthiest person on the planet. He can sell shares and some things. But I think the most powerful thing Elon has is a global belief in him as an entrepreneur, which gives him an opportunity to raise capital from sovereigns around the world. And so, what if you said, is this still an open sport?

45:05I'd say no way. Right. I don't know anybody else other than the Elon and Sam at this point. Although deep sea surprise everybody. Well, I'm saying if you're going to play that game. Right. And remind you deep sea spent more than, you know, the amount reported in their last training run. But even more importantly, to serve an explosive amount of inference, they would have to spend a lot of money to build up. I want to make a point that will probably come back too much later. But when you have a scenario that has this much ambition and this much competition and this much cap access part of the game, it's easy to lose sight of the microeconomics.

45:52It's easy to lose sight of the unit economic. So if you're a, you know, an anthropic and you've you've got training credits over here and you've got CapEx and you do you or not. Am I thinking about depreciation or that when I say, oh, this is profitable or when I price my API product and you've got this razor edged pricing thing. Yes. That is I've never seen before. Explain what you mean by that. I mean, the the price difference between today's model. Yes. And yesterday's model is 20X. Yes. So it is a fast appreciating asset. The second you're off the frontier. Yes. Yes. Yes. And so it's just it's a dangerous.

46:37Yeah. Like they're these are all traps. Yeah. You know, and it makes it, you know, once again, fascinating. I'm maybe we can transition to the public markets a bit, but I'm there's a lot of talk that we're going to see a core weave filing. And I'm I'm just excited to see the numbers. Yeah. Like end of piece together more than information. Yeah. There's a rumor out there that the core weave is going to file an IPO and so you can see the numbers. Well, I just want to underscore this point that you just made though, because I mean, and there's there is some there is some rhyming to Masha coming back into the scene here.

47:10Right. Yeah. Now, Masha is one of one of the greats of this industry of the last 25 years. But I think people would also describe him as somebody who's a bit of a gambler in places gigantic bets. Right. And some people would say that he's a total visionary and other people would say he's just not price discriminating. Right. But clearly, he shoving all in with opening. I don't think he knows any I don't know if he has any other way of opportunity. Right. And so I think the the point being that we're at this moment in time where the danger for the company, I just want to underscore what you said, the danger for the company of getting this volume of capital is that it's hard to focus on really building the muscle and the grit and the ingenuity on how to drive unity economics.

48:07Think about what Elon had to do at Tesla. Right. Because capital was hard to come by. So he had to figure out how to make money on every damn car. How do I take costs out of the manufacturing at every single stage of production. And when you have access capital, right, you lose that discipline. You don't build that muscle. And so I think it's an important admonition for the board of an leadership at OpenAI and all these companies to hear that sure it's one thing to invest aggressively in the future. But you better make sure that along the way your unity economics work. No, I know you've been thinking a lot, let's switch gears.

48:44You've been thinking a lot about doge. And if it happens, what it means for the capital markets. And it's interesting to even say if it happens because as I watch the press every day, there's an equal number of people that say, oh, this is going to take out all these costs. And there's other people that say, oh, they're just saying things, but they're not. And so you're going to have them. So I am. You and I said some, you know, so I think on our pod on like February six or something, you know, when you asked me about the markets, I said, hey, we have peak political uncertainty, right? Because we have a lot of things changing.

49:17We have peak economic uncertainty. And that's not just doge because that's what we're doing. We have tariffs and other things. And I said, and we have peak technology uncertainty, i .e., it's hard to predict the future, you know, what software company is going to be worth what in five years. And that causes discount rates to go up. It causes multiples to come down. And I said, I was surprised how resilient the market was in the face of all this uncertainty. Well, now I would argue we're starting to see a few, you know, cracks in that. And so, you know, if you look at this chart bill, it's really the the NASDAQ since the election.

49:53And we ran way up. The NASDAQ was up as high as 10 % post election. And now we've come off four or five points from that high. And but we're still four or five points higher than we were on the night of the election. And so one thing I just have been thinking a lot about, and I've been talking a lot about is this this difference between stimulus and austerity. Okay. Over the last three or four years, we had massive stimulus into the economy. Now you and I both supported it in March and April of 2020. Right when we were in the in the depths of COVID, you had to prevent the economy from coming to a screeching halt.

50:35And so the Fed went all in and Congress went all in, you know, in order to save the economy. But then we also were very critical that the Fed moved way too slow. The second stimulus package was way too large. And it led to this runaway inflation. Resonflation hit 9%. But the one thing that all of that monetary liquidity did to the system is it caused risk assets to go up in value. Right. And now we're in this period where we're talking about not adding a trillion and a half of liquidity to the system. We're talking about pulling a trillion and a half out. Now what do I mean by that? Okay. So we last year we had $56 billion dollars of tariffs imposed on other countries.

51:19That's the amount of revenue we collected from tariffs. We're talking about that going to 500 billion. So 10 X in the amount of tariffs. Well, we know that some of those will be eaten by producers, right? The company that's producing something in China will just take a lower margin. But we know a lot of those will be felt by US consumers who just end up paying higher prices for their Dell computer because Dell passes along the price increase of the computer made in Mexico as an example. So that's 500 billion. On the other hand, I think Doge, there's no doubt in my mind at this point in time and we'll show the you know, show this chart of the of the likely spending cuts.

51:57They're not only making big cuts. And the president has now just last week said he wants Elon to be more aggressive, right? They sent this email out to every employee that said, you know, respond back to us or you'll be deemed, you know, to have resigned. Now they're giving them more, you know, shots on goal. But the message is very clear that I think there's going to be a downsizing of the federal government to the tune of let's call it 40 or 50%. Now a lot of people have been giving a lot of grief to Doge, but I remind you and I tweeted this the other day, the Bill Clinton, right? Did Doge in the late 90s?

52:34Yeah. I don't know the exact percentage of federal employees they let go is like between 10 and 20%. But we had a balanced budget, you know, in three fiscal years, we had a $230 billion surplus. Now it was helped by the internet, but now we're going to be helped by AI. So like I think that you can see some replay of that, but it does mean that we're probably going to take 500 billion to a trillion dollars out of federal spending over the course of the next couple of years. And all I'm suggesting is that austerity has the reverse impact of liquidity from government into the system. So if you think about go back to our GDP calculation, right, immaculate economics, C plus I plus G, where G is the amount of money the government spending, well, the amount of money the government spending is going down.

53:22So tariffs is a headwind to the economy and this austerity out of the government. Now I am 100 % in agreement. This is the short term shock therapy we need in order to get our fiscal house in order, right? But you got to think about this as, you know, somebody says, hey, you're out of shape. You're going to have a heart attack. You got to, you know, you got to take this medicine, this short term pain, you got to work out every day. You got to get fit, right? In order to avoid the heart attack, you would do it every day of the week. We need to get fit in order to avoid bankruptcy. And all I'm suggesting is it might affect markets.

53:54That it might affect markets. So markets may in fact, right? My risk profile is lower than our standard risk profile. What do I mean by that? Very simply, you know, I own half as much as I would normally own at a point in time. Now, do I think that's because the future, you know, is bleak? No, I believe aggressively in the future. But I think we're going to have to take a little bit of short term pain, which means we could see just a random run of the mill 10 to 15 % drawdown, right? In the markets, while the market gets its head around the fact that the economy is going to grow a little slower.

54:30When the economy grows a little slower, that means companies grow a little bit slower. When they grow slower, you know, the earnings goes down and the multiple goes down. Let me ask you this question. When Elon went into Twitter, one of the stories that came out was that they found there were software licenses for a whole bunch of people that weren't using and that they cut that dramatic. Do you anticipate that one of the outcomes of those will be a, you know, obviously a headwind for a bunch of companies that have sold software and or services in 100%. I mean, like there's just no way around it.

55:11You know, if you go from three million federal employees to a million and a half federal employees and you don't need as many licenses, you don't have as much cloud consumption, right? And so if you think about the multiplier, right? You take the federal government or federal person salary, employee salary. Now you have all the healthcare and benefits and pension and all the other stuff. And then you have all the ancillary spend. So I won't say the exact company, but I talked to an airline the other day. And at this airline, their number of government tickets sold year to date is down 50%. Already impacted.

55:4650%. Yeah, because they said we don't want, you know, you traveling, we want you in the office every day and all this other stuff. And so this airline has already been impacted. So I think everybody in the ecosystem, if you have revenue line items, if you're a business, if you're a public company of revenue line items from the federal government, it's not just that the rate of growth is going to slow. It's that they're actually going to be negative on a year on your basis. Now again, I happen to think this is a generally a good sacrifice for us to make. Those are our tax dollars. There is no government money.

56:18This is our money that's being, you know, being consumed. But I don't think the public markets or investors generally and certainly not Silicon Valley's kind of gotten their head around what this means. Now what's the what's the, well, in fact, I would say like ironically, this happens quite a bit in our world, but the Silicon Valley and the venture capitalists have just gotten comfortable with, with backing companies that sell the government. Exactly. We see a lot of that. It's an interesting time. People get excited about well, you saw what happened to Palantir's stock the other day when, you know, the president directed his secretary, his cabinet member secretary of defense to find 8 % cuts in the department of defense every year.

57:01Right. And so this austerity again is real. Now, that probably means we're going to have a rotation of money out of like the less technologically innovative folks into the more technologically innovative folks. But you know, he went further. He's sick. Trump was further. He suggested in one thing, which I was really blown away by this. I actually thought was kind of the most interesting thing he's done. He suggested to Xi that China and America should both cut their military budgets in half. Yes. Now, maybe that's the point. Maybe it's the part. That was extraordinary. Back to the, you know, this idea, you know, we've been, we both blocked the world many times over.

57:42Right. There's a certain camp of folks. Right. And I think Mir Shimer is in this camp, right, which is great power politics. And like you just got to build and build and build. And you know, eventually you're going to have a war or something like this or maybe the fact that you have these stockpiles deters, you know, the, the ultimate war. One thing that is just fascinating. I've never heard an American president in my lifetime suggest that he wanted to sit down on a table with China and Russia and talk about they could cut their, they could collectively cut their military spending in half. And just from an entrepreneur perspective, like, isn't it?

58:21It caused me to stop in my tracks and be like, hmm, that's an interesting idea. I thought it was a cool thing. He's got it. Yeah. That's an interesting idea. Well, I will tell you back on the public markets, the other interesting thing here, Warren Buffett, you know, just put out his annual letters, going to have his annual meeting coming up here has a $400 billion cash stock pile has been liquidating stocks, right? As biggest stockpile in ages, stand -druck and miller, Howard Marx, Stevie Cohen came out over the weekend and said, I'm nervous about the markets for the same reason that we were talking about a month ago.

58:58So I think there is a growing chorus of players. Now, the, what's the flip side to this? Well, since Trump's been elected, the cost of a mortgage or credit card or et cetera is starting to come down. Why is that? Right? There are two reasons. The first reason I think is because we're saying, okay, the economy is going to slow a little bit. And if the economy slows equities as an investment are a little less positive relative to a bond. So you rotate that into cash. And when the cash is sitting on the sideline, it's invested in a US treasury, just to put it in perspective. And the only anecdote I really ever hear about this is while China doesn't want to own our treasuries anymore, China buys 3 % of our treasuries annually.

59:45It's tiny. They used to buy, you know, 10 years ago, they bought 12 % of our treasuries and everybody panicked that they were too big a buyer. So, you know, what I see is just the opposite. Every sovereign around the world and every domestic investor who's starting to put more money into cash, who's hedging a little bit, all of that's going into US treasuries. So I just think that one should brace over the next three months. I think these tariffs are very real. They're structural and the president is committed to them. I think number two, the reconciliation package is now rolling. And I think they are very committed to balancing the budget within this president's term.

1:00:23And the only way you balance the budget is a trillion dollars has to come out as spending. Remember, 2019 baseline, we were spending about 5 trillion, the COVID high, 7 trillion, we got to get that back down to at least 6 trillion, probably to 5 .75 if you're going to balance the budget. That means a trillion out in a year, that's austerity, and that's going to be a headwind to the economy. But it's the right thing to do. Okay, that's a tough note to end on. So I'll switch to something more positive. I got invited to the Golden State Warrior game on Tuesday. Yes. The Butler trade looks like it's worth it.

1:01:02It's a great. It's a great one. I think since the trade, it's incredible. I was I related. I happened to go get an invite to the banner ceremony and dinner afterwards for good friend Andre Guadala. And Steph gave an incredible speech. And I had Andre speak at our investor day, maybe two years ago. And two things Steph said that really stood out to me, you know, about Andre. Number one, he said, there is no this without Andre. Right. And by this, and he explained it to me, he said, he came at a moment in time. He even his decision to come to the warriors made us believe in ourselves. And then he came here and he did whatever it took.

1:01:55And the second thing he said is Andre Guadala always put excellence over ego. The guy would be the first to, you know, never powdered on the bench. When he came off the floor, he was the first to get guys fired up. And Steph talked about game six in Boston. I remember that game. I was at that game. And I remember Andre. He was, he was, he was, he, I don't, he messed to play five minutes in that game. And he was so fired up and really willed all the players to up their game. And so I was so happy for him. But yes, and you, you know, are me and our good friend, Jason Chang, I'm, I never bet on sports.

1:02:36I never bet on sports. And he talks me in. We're at a warriors game during the losing street. And the odds are so, so great that they're not going to win, win at all. He talks me into, you know, placing a bet on them winning it on at the time. It was like 40 to one, right against them. And all of a sudden, they're on the six game winning street. They trade for, you know, for Jimmy Butler and like they may win this whole thing. So, you know, fingers crossed. I'm not, it now has me, it now has me with a focused mind with a focus mind straight to see you.

1:03:14As a reminder to everybody, just our opinions, not investment advice.