This Week in European Tech: Europe’s AI wake-up call

23:00Lomax Ward:However, this week we've seen the most boring people in Britain do something I think is quite interesting. Pension funds have started buying venture. Okay, it's not much, bear with. Nest, the workplace pension for 14 million Brits, they've got 68 billion under management have committed 200 million per dedicated VC sleeve with Schroder's. Growing to a billion by 2030. I know small beans still stay with me. Their first names in the portfolio, Synthesian Wave. Okay, big guys, you know, not the wildest of bets. It's quite safe money, but it's a start. We've seen this before. We saw the Mansion House Compact.

23:40Lomax Ward:We've seen the Mansion House Accord, where 17 providers then pledged up to 10 % of default funds into private markets by 2030. We live in dog years, almost. That's a long, long way away. But half of that going into the UK, which is great news. Roughly 50 billion pledged. Now, for some context, three years ago, DC schemes had about 0.36%, 0.36 % of funds in unlisted equities. That's our world. Last year, that doubled. So we went from 800 million to 1.6 billion. Yes, nothing to nothing. But we saw obviously in April, the BBB, the British Growth Partnership hit its first close of 200 million with Aegon and Cushion, first ever VC investments.

24:22Lomax Ward:BBB, the British Business Bank, were looking to pull 2 billion of pension money into venture over the next five years. We saw the Pension Schemes Act passed in April. It's a bit of a gun on the table saying, come on, guys and girls, or we're going to make you. So my take is three years from now, pension capital will still be low. It'll be in the single digits, but it'll be billions a year into UK venture, starting safe and the B's and beyond. So up the tree from us down in seed and early stage, but we will see it come down when we get some kind of fund and fund fund structure like France's TB scheme, where France is doing great things here that we've always promised but have never quite built so Lomax can you tee that up a little bit better than I did please I think you did a really I think you did a very elegant job there but I would say bless you my man I would say that look and the backdrop here is that when in the US and we keep keep referring to the US but you know clearly it's not to be ignored when they keep churning out companies like Anthropic and OpenAI and SpaceX is when they loosened up the rules allowing pension funds to invest more in private markets, particularly in private equity and venture back in the 70s and 80s, eventually unlocked, married with strong performance.

25:43I always say this, you need strong performance to entice these managers to actually invest in the asset class.

25:49Lomax Ward:But that becomes chicken and egg, Lomax, isn't it? Sure, fine, but you need both. and that has unlocked a mother load of capital into the US venture ecosystem such that it is anywhere between five and ten times, at least ten times the size of the UK, five times the size of Europe. So we have been talking a lot here about the fact that there is roughly I think three, four billion dollars, three billion, sorry three trillion pounds, four trillion dollars of capital in the DC and DB pension schemes in the UK. And a tiny, tiny, tiny fraction of that A is allocated to privates. And within privates, because privates, of course, consists of private equity, infrastructure, private credit.

26:36VC is an even smaller sleeve in that. Of course, with the Mansion House Accords, so the two agreements slash voluntary petitions that Rachel Reeves and before her, Jeremy Hunt, got the pension trustees to sign up to. There's been more of a push, obviously, to push the capital into these areas, into these critical areas. So this is part of that. Nest, 68 billion AUM, largest pension scheme by membership, 14 million members, is allocating. But this is 200 million, right? So it's a laughably small amount of money in the context of something that's nearly a hundred billion dollars in AUM you got to start somewhere I guess you know I would say this is a very very small amount of money and also not only that it's going into the probably less risky end of the spectrum it's going to the companies this is going into late stage venture deals it's series b c d probably c d e when the risk is much lower.

27:39So it's actually arguably going to companies that are less risky and probably don't need the money or at least could get the money elsewhere, like Wave, AI, Synthesia, like great companies and we should be funding them. But actually, if you wanted to encourage pension funds to, pension fund capital to unlock and move the ecosystem in the UK, you want them to be investing in earlier stage, right? So in managers, ideally, I don't think they should be in direct deals. That would be madness. But investing either into funder funds or into probably, yeah, probably funder funds, not into individual funds.

28:17That would probably also be madness into individual seed funds. So it's a start. They're doing the less risky thing. I guess that's fine. They need to show performance. As I said, this stuff is only going to work if the capital performs. If you're sitting in nest and you're the one that championed this, you need to show results. And the problem with venture is it can sometimes take 10 years to show results so if you do a bunch of early stage funds you could actually wait 10 years before you kind of like everyone's like oh let's put more money in so in a way it kind of makes sense maybe through the later stage deals where you actually see the markups and the results within 24 months and then you can drive decision making internally

28:55Lomax Ward:to allocate more capital um isn't there a challenge though that they're also coming in and we're going to talk about this later in the show but isn't there a challenge they're coming in top of the market? That's a risk, yeah, which is why they should be, you know, phasing this in. I mean, this is a, I would hope that these people, obviously, you know, you need to give temporal diversification in any kind of investment. You know, they're committing the 200 million, but they're not deploying it all this year. At least I hope they're not. You know, they will probably have a kind of three to four year deployment period for that, I would hope.

29:27But there are investing companies with like, you know, Now, Synthesia depends what the multiple is on the company, but these are like proper tech companies. These are not speculative tech companies.

29:38Lomax Ward:I welcome it. I mean, I think there is going to be more movement. I think we've missed the boat. But Mads, what are your thoughts on this one? A couple of different thoughts. In terms of where they invest and is it a problem that they invest at later stages, I'd say I think it's fine. It's always a capital ladder. More money at C means that Series B investors get a better market. They get a better market. That means that Series A investors have a better market. If they have a better market, there'll be more capital for them to invest in the stuff we have that graduates from C. And I'd rather it was us, right?

30:13Lomax Ward:I'd rather it was us and not going to the American 401ks and the American investors. At least it's staying in the UK. At least we know there's money from us staying here. Look, it's supply and demand. And we know there's already some supply of capital today. And if that supply increases, that will benefit the whole stack. So I think that's fine. I think one of the things you brought up, Dan, is around this gun that's on the table in terms of forcing and mandation. And look, I think that's the wrong answer. We should use incentives rather than coercion. And there are so many ways you can incentivize this in the right way.

30:49the worry I have is that if it's forced, I mean, all that that's being said is that they need to invest up to 10 % in private markets and up to 5 % of that being UK specific. But you know what? You can comply on that by putting a lot of money into infrastructure. Private credit. They put 500 million into private credit. So more than double what they put into venture just now. And arguably private credit is a massive bubble, right? Yeah. Struggling at the moment. I'm not sure that the forcing function really works. And then there's the whole question around, is it just socialism? And you've got the whole model where pension funds are raising money, investing money into co-investment structures that are managed by the British Business Bank and maybe other government entities.

31:33And I think it's good to get more capital into the market. I think it would be better if the sovereign wealth fund, sovereign wealth institutions invested public money. And what do I mean by that? Well, today we have massive unfunded pension liabilities. Instead of the government having a lot of unfunded pension liabilities, put money aside, have a proper arms length sovereign wealth fund invest the capital so it can be used for pensions in the future. I think that would be better than trying to take the private capital that exists and then for the government to sort of playing it of being a fund manager, which I'm not sure is the right model.

32:09So, look, some movement's in the right direction, but it feels like there's still so much work to do here to get this to work properly.

32:18Lomax Ward:And also, it's not as pension funds. We need to get other institutional cash moving around, although pensions, as we know, is the major unlock. You know, Nest takes in 700 million a month in contributions, defined contribution scheme. Here they are putting 200 million into venture. One thing that's very interesting about Nest, though, actually, Nest already has pretty high allocation to privates versus other pension funds. So they're already at like 20 % privates, but it's mostly not in venture. Obviously, it's in infrastructure and private credit. I want to do something a bit tricksy. We often or have talked a lot on this pod about frothing the market.

32:56Lomax Ward:Are we top of the market? Is this the dot com? Is there a story to be told here? So what I've done is I've put 10 reasons why it is 1999. So I've tried to put 10, what I think are the top 10 reasons. Yes, it is. It's frothy. We're in trouble. This is super crazy bubble territory. I've also written no, it's not. And I've done 10 for a yes and a 10 for no. So what I'm going to do is very, very quickly give you both the 10 yeses. And then I'd like you both to chime in on each of the elemental points as to what you agree with, disagree with and unpack things that maybe aren't so common in the public discourse.

33:38Lomax Ward:And then we'll do the same for the nose. So on the yeses, it is 1999. This is top of the market. It's froth. It's crazy bubble territory. So the Shiller Index just flashed red. The CAPE ratio, the price to earnings ratio, has just crossed 40 for only the second time in history. Last time was in December 1999, just before the Nasdaq lost 78 % of its value. A leaked draft this week from the Treasury likens AI to the dot-com bubble. So the powers that be are talking about this. Money is chasing its own tail. This is number three. Over 800 billion of AI deals are now circular, e.g. NVIDIA puts 100 billion into OpenAI.

34:18Lomax Ward:OpenAI fills its data centers with NVIDIA chips. Or central banks are saying it. Taiwan Central Bank, BOE, even the BIS warned in late June that the bubble could pop and take the global economy with it. Concentration looks the same as the dot-com. AI Big Ten are now 40 % of the S &P. The CapEx metric is already past 2000. CapEx to sales hit 32 % at the dot-com peak. AI is projected to hit 34 % this year. Burn rate. OpenAI is reportedly losing$12 billion a quarter, on track$14 billion this year, against roughly$1.4 trillion in data center commits. Debt has now entered the story. Big tech is no longer the cash machine.

35:04Lomax Ward:Lending is happening. OpenAI borrowing$520 million. Hyperscale is now carrying a trillion in undisclosed data center releases. The cracks are showing. NVIDIA shed almost a trillion in under two months. Oracle, the most exposed hyperscaler, is down 40 % in a month. And finally, the silly money is moving in. Blue Origin, maybe you've seen this, now raising 10 billion at$130. So they are my 10 top reasons for, yes, it's crazy town. It is 1999. The bubble is going to pop. Mads, what do you say to the 10 yeses? I can make lots of arguments on either side. You politician, you, I love you. Well, I mean, look, you know, economists have predicted nine of the last five recessions.

35:54I love that question. There are always lots of reasons why stuff isn't going to work. And I think trying to predict the top of the market is a little bit of a fool's error. I don't know if anybody can ever truly do that because booms that can turn into bubbles often have a lot longer to run. than people think. Now, it's interesting that the BIS, the Bank of International Settlements, they are talking about this being a bubble and a mania. They're talking about the canal mania, the railway mania, the dot-com, kind of all these infrastructure manias that always work out in the same way every time, which is they drive a lot of capital into infrastructure.

36:34And the people that fund that capital, that provide the capital and build out all the infrastructure, they end up losing their shirt. but the world at large that ends up with a lot of infrastructure that's built out and benefits the economy and drives growth in the years after that and so just just to qualify mad so just for those

36:52Lomax Ward:that don't know the bis so i didn't know until researching this segment the bis is like the the central banks of central banks a swiss-based organization is that is that fair yeah yeah okay so if you didn't know yeah that's what the bis was i had to look that up so the bis is is like the the big daddy to all the central banks. And look, we're seeing some crazy town things happening. So SK Hynix, they've IPO'd now, right, in the US via the ADRs. And what is an ADR? Well, it's a way for a company that's listed somewhere else in the world to also list in the US and be traded in the US. And immediately following the listing, an ETF arrives that allows retail investors to invest in SK Hynix on a 2x leverage.

37:40It's bubble stuff. I mean, you can't get around that. And these companies are seesawing up and down. Even Samsung, which is a formidable company, I think is sometimes swinging more than 5 % a day. For a company that size, it just sort of tells you something about how volatile the market is. At the same time, we know that AI is world transformative. We see it every day. We see revenue growing, growing, growing for these companies. There is going to be a lot of value still to come. And yes, there are some concerns around whether SK Hynix and Micron and Samsung on the memory side can keep up the formidable growth and profitability they have.

38:21But I don't think anybody really expects sales to slow down this side of 2028. All we're discussing is at some point in the next few years, growth is going to stall. Nobody, I think, is suggesting that revenue will totally collapse. So you could argue it either way. I think if I was going to go back to some of the stuff we talked about last year, yes, this is certainly boom territory. Some of the stuff looks very bubblish. The opportunities are very real, and I think what will come out of it is there's going to be a painful consolidation across some of these things. We discussed some of it earlier in the pod.

38:56What is going to happen to the Frontier Labs? Can they keep climbing up the value stack into applications and take enough value there that they can create enough of a moat that they won't be displaced by commoditizing foundation models? And then, of course, you've got the hyperscalers that are doing all the CapEx build out. And now it started to go from kind of funding that with free cash flows to funding it with debt to actually now issuing equity. I mean, can you believe Google issuing shares? The company was printing so much money, they've never found a way to spend it. Now they're issuing equity.

39:31Lomax Ward:And bonds, yeah. Yeah, but bonds is one thing, right? But issuing equity for a company like that is just not something you thought you'd see. We're seeing lots of retail activity. Kind of there's that tell, right? Kind of the fourth horseman of the apocalypse of an impending doom is kind of when you see retail piling in. when you see corporates selling their equity, right? I mean, those are kind of two of the key ones. So yeah, it could be lots of arguments why this is the top. I just, the market will top at some point, okay? Nothing keeps going up forever. I just don't think we know for sure whether it's this summer or Q3 or Q4 or Q1 or exactly when it happens.

40:13Who knows?

40:15Lomax Ward:Lomax, it is$19.99. Well, I think, so I just picking up on a few things that you said, first of all, the central banks, I mean, yeah, it's kind of like, it's kind of in their job description to be harbingers of doom, or at least to, or at least to hold everyone. Harbingers of calm. yeah harbingers of calm at least like um rain everyone in a little bit and like get everyone a little bit bit back over their skis so you know even if you look back in in the 90s greenspan was warning against irrational exuberance in 1996 right so he was what three years early if you look at there's some things that interesting to look at when you are drawing the comparison the problem is comparisons only work to a certain extent right it's useful it's informative, but clearly what has happened and what will happen will unfold very, very differently.

41:04So we should be careful about leaning too heavily into the analogy. But, you know, NASDAQ is up 115 % since ChatGPT. Actually, post Netscape in the 90s, NASDAQ was up 700%. So the kind of the growth, yes, we've seen a huge growth, but nowhere near what we saw in the 90s. The biggest thing to worry about is what, which is similar to last time, is that you end up with a lot of extreme amount of capex, which cannot be justified. Here, of course, we do have real revenues underpinning many of these companies, unlike pets.com, Webvan, etc. back in the day. However, the sheer ratio of capex to revenue is a little bit off kilter.

41:51I don't know if we're talking about 70 to 80 billion dollars of AI revenue at the moment, depending on how you define it, with trillions of CapEx going into the ground, that growth rate has got to carry on pretty steeply to justify the CapEx against the backdrop of commoditization of the models. That is something that could leave us on a bit of a sticky wicket. I'd say our anthropic bills have started increasing so much now that we are starting to look at whether we can switch more workload off to other models or onto open source. And it's, look, the truth is the model is one thing, but the scaffolding, the kind of the, you know, clock code, all the harnesses, all the stuff that sits around, that's really where you get some of the lock-in.

42:45Because once you've got your whole setup, you're just not likely to switch out of it. And so I think it's stickier than just the raw model performance would have you believe.

42:56Lomax Ward:Yeah, but that sounds like an opportunity for some smart founders though, Mads. Yeah, I think it's a fairly battled over battleground, if you will. I mean, what's the open gap in that particular market today somebody would go after? I don't know. Anything top of mind for you? No, I just think, I think as we, as you see with all, all great things, especially in software, you see this kind of great bundling, this great unbundling, then you see this aggregation and this disaggregation. So I think there is going to be, as the commoditization becomes more known, integrated, available, and then you're going to get these great tools, which, like you say, are already out there that are enabling a little bit of this on-prem, a little bit of this super duper anthropic, this, a little bit of this open AI super duper.

43:44Lomax Ward:for that, a little bit of this quen or whatever it might be. So I think we're going to see, we're going to see this kind of blended approach, which I think will, obviously for us would ease the monthly costs. And I think that's where enterprise is going to end up. They're going to end up in this kind of slightly more blended approach, but I do sound like a broken record on that one. Let's move on to the no's. This is the no, it's not 1999 top 10. The technology already works. We've talked about this. In the dot-com, there was a lot of nonsense. The tech is working. We can see it. The leaders are the most profitable companies in history.

44:23Lomax Ward:And up until recently, the Microsoft, the Alphabet, the Metas, the Amazons, they've all been paying for the build out of free cash flow. Real usage, not eyeballs. In 1999, the metric was page views that never really did anything. We're already seeing trillions of tokens per week in usage. Valuations, I think to your point, low max valuations are less than half the dot-com peak. The Nasdaq forward earnings multiplied around 23 to 24x today versus 60 to 70x in March 2000. Fastest revenue ramps ever built. We're looking at 20 billion ARR from OpenAI. Anthropic through past nine billion, scaling in three years, what Amazon took a decade to reach.

45:03Lomax Ward:Demand is already physically constrained, so classically bubbles are not that. They're infinite hype chasing infinite supply. We have some limits in the box. They've got a chunk of demand that can't leave, so we're seeing governments now treat computers as national infrastructure, so there's a solid base to this. Even the bears concede the fundamentals. Leaked Treasury report also admits today that AI firms are more mature, profitable and better capitalised than their 90s peers or reflections. Retail isn't really holding the bag just yet. There are fewer small investors that are directly exposed.

45:40Lomax Ward:And last on the list, even if, maybe to your point, Mads, even if we do overbuild on the capex front, it won't be wasted. The dot-com fiber glut took years to reach its usage, but this is going to be used almost instantaneously. So they are my top 10 for it's not. It's not 1999. Now, Mads, you've answered a lot of these already, but any closing points or any conclusions before I hand over to LOMAT? Nothing. I think you've said it all, Dan. I think the main difference between now and 1999 is that today the technology is being used and is useful in generating more revenue much earlier in the cycle.

46:27In 1999, we had a big build out that was being used to generate eyeball metrics. today it's being used to generate revenue may not be profitable revenue yet but it's real money and revenue growth rates are formidable huge difference we've got a little bit of a uh of an old friend

46:46Lomax Ward:we've got ai corner coming back mads your happy place um there's only one item in ai corner which is basically our normal anthropic check-in so we saw fable 5 leaving subscription plans then coming back, Sonic 5 shipping, ID verification went live on Wednesday. What's the latest with Anthropic? I think you've rounded it up, Dan. I mean, we should probably have had the open AI model release in here as well. We pretty much talked about AI on the whole show. But yes, Fable 5 is back. Long may it live. It's a formidable model. It's also incredibly expensive. I have never seen anything chew through credits as fast.

47:25I've seen the email warnings.

47:26Lomax Ward:I've seen all the warnings coming in. You've hit 75 % of your... I only us two things yeah yeah yeah yeah so so that's a that's a whole new whole new story but it's out and then what they're doing effectively is they're releasing sonnet 5 which is also a really good model on a on the cheap so basically you know fable 5 pitched at the high end trying to figure out just how elastic is ai demand can we charge 5x the price for tokens on a really token hungry model and get away with it. So that's the test of Fable at the high end. And then they're using Sonnet 5 to mop up at a fifth of the price at the lower end to say, listen, if you want great models and great intelligence that's just a notch behind the frontier at a fifth of the price, then you can switch over here.

48:11So it's an interesting experiment they're running.

48:14Lomax Ward:Nice. Well done. Hopefully you can keep the money rolling in, Anthropik. Matt, you put a note here about a Lisbon story. Well, it's because you guys are in Lisbon, and I was suitably envious, and so I thought, what's an interesting story about Lisbon I can share? In 1755, there was an earthquake and then a tsunami and then fires for days in Lisbon, and the city got flattened completely. Did you know that, Lomax? I didn't know that. Of course, I think about it a lot, living here. It was actually on All Souls Day, the 1st of November, which led to a couple of things. One is all the churches were prepared for service.

48:58So all the candles were out, right, which led to all the, assisted with all the, aggravated all of the fires. And secondly, because it was on All Souls Day, it meant people felt it was particularly, the God-fearing of Lisbon, particularly ominous. But there is, so that's the sad part of it. There's an interesting kind of for geeks and engineers and technologists like us. There's a really interesting story, which is that the king at the time, he had sort of a prime minister called Pombal. And he said he had his chief military engineer, Manuel de Maia. He said, listen, you got to work this out. Can't have this again.

49:36And so de Maia, he set off to find a way to make the city more resistant to future earthquakes. And in fact, he built something called the Gaiola Pombalina. Your Portuguese is probably better than my Lomax. The idea was to create a flexible timber cage hidden inside the masonry of the building to absorb some of the seismic shocks. And so they figured out a way to build the cage. And they had soldiers sort of trample around and sink to fake the tremors, which was sort of the first structural earthquake test in history. So kind of using the army as a shake table. And so what happened was that when the Baisha went up again, they used this technology, which was effectively sort of partly a prefabricated components using this construction approach, which is, we believe, the first industrial prefab construction in history, sort of before industry really took over.

50:37And so in some way, you could say that Lisbon took that opportunity to answer catastrophe with a kind of engineering and with a new engineering standard that led to fast rebuild and much more resilient constructions. And so I just thought that was a nice story to share today. What a lovely history lesson. Thank you so much. It's very cool. And it reminds you that, you know, if you go back to the 16th century, Lisbon was effectively the Silicon Valley of Europe. Back when navigation, seafaring were the real frontier technologies. Yeah, you forget that. Lisbon was the absolute place to be for that.

51:14Yeah, the technology, Gaiolo, yeah, means birdcage. So you can see what Mads is talking about. The problem, I would say, is having lived in Tokyo and experienced many earthquakes at the top of skyscrapers where you're rocking from side to side, sadly we don't quite the technology has not quite caught up today i think we're probably still relying on these wooden bird cages and so that's the slight but i do think lisbon is a little bit exposed um to a big future shock you know in the four years that i've lived here we have had two kind of noticeable shakes um but nothing the size of 1755 i didn't know they were so seismic i

51:54Lomax Ward:remember being in tokyo in a in an earth tremor and the and the wardrobe doors opening and i also I remember being in a hotel in Tokyo and I couldn't quite work out why the bathrooms were this weird kind of almost oval plastic. And it was a really high end premium hotel. So I asked the receptionist, I said, why are the bathrooms made this way? And apparently they're like a string of pearls. So if the building collapses in an earthquake, you go into the bathroom, which is like a sealed container. And the rescuers can lift all of the bathrooms out of the rubble. And they're like little protection cocoons.

52:27Lomax Ward:and I thought that was quite an interesting architectural. You don't have that here. Yeah, that was an interesting thing. You talked about the Marques de Pombal, who was this very revolutionary figure. The other thing he did, when Baisha, the low area, got completely flattened by the tsunami, it was a kind of hodgepodge, higgledy-piggledy bunch of streets and alleys. He flattened it and he built the city on a grid pattern. And so if you go to Baisha and Lisbon today, even though you've got on the hills, very like higgledy-piggledy settlements, Baisha is absolute like American style grid pattern in a way that actually many European cities aren't because European cities generally just evolved organically over time.

53:13So that's why Baisha basically had this like clean out and then Mark Schponbaum put this pretty much the first, one of the first proper like grid city layouts in Europe.

53:24Lomax Ward:we are going to set up a new podcast all about the history of tech yeah there you go oh well there you go the rest is history meets upside um there is an amazing museum if your kids are the you know for me if you're a big kid like me it's i love it and actually got my wife to take me there on my birthday but there's a museum called the quake museum in lisbon where you you can actually go and relive the earthquake you actually go into you go into like a mock-up you got what is they rebuild parts of the city. That sounds horrific. Yeah, it is actually. You go into a church and you've got the kind and they read.

53:57But for children, you know, I don't know, the age of like 10 to 15, it's sort of a cool experience. Yeah, they'd love that.

54:04Lomax Ward:Let's get back onto the tech, boys. We're just about to round off. I love that. Thank you for the distraction. One thing, while we are in Lisbon, I happily give you an overview of the tech ecosystem here for like three minutes, if that's helpful. So there's been a lot of talk about Lisbon over the years being a tech center. I think clearly there's a lot of interesting things going on here. And Portugal, if you look at unicorns per capita or unicorns as a proportion of GDP, is probably one of the highest ranking countries in Europe after Sweden, probably. As a reminder, Portugal has roughly 10 million people, so the same size as Sweden.

54:45you've had seven multi-billion dollar companies or unicorns emerge from the ecosystem. And so probably the latest example is remote.com, Sword Health, which is a big digital health company doing hundreds of millions of revenue now backed by Kostler. So you've had some big outcomes from a relatively small ecosystem. Only about 400 to 500 million gets deployed here every year, if you compare that to wider Europe of 50 bits, less than 1 % effectively of the European market. But what you have is a disproportionately high number of unicorns, but you also have a kind of clustering of exited founders, GPs who live on a plane anyway, and so use this as a base.

55:31So I think on the investor side, you have a really kind of interesting group of people to swap notes with. So it's a wonderful place to live. It's a great place to bring up a family. And as a tech ecosystem. Clearly, it's got nowhere near the size or depth of capital of Berlin, Paris, London, Stockholm. But there are some interesting things going on here, for sure.

55:53Lomax Ward:But it is funny that you put Stockholm in that pot because it's only relatively recently that you'd have put Stockholm in that pot. Well, I mean, kind of, but I mean, Spotify is not exactly a recent phenomenon. No, it's 15 or so. North Klanet. North Klanet. Yeah. And actually, I would say in our portfolio, we've got 60 companies in our portfolio. We've backed one Portuguese founder and he's the best performing founder in the portfolio. I mean, he's moved to the US because he needed to, but I'm kind of proud and happy of that. But Portugal does produce some amazing, amazing entrepreneurs. Many of them leave, but still.

56:25Lomax Ward:I've got one very quick prediction after everything we said. So my prediction is that Europe has an opportunity to win as the bubble pops, deflates, whichever way you're going to, whichever way you're going to view that. So the last bubble gave us the fiber, obviously powering two decades of growth. Now, I think with this commoditized super intelligence, sure, that's a global offering. But I do think that Europe has the opportunity to lean into real world applications, industrial depth and get into regulated workflows. Said it before, but today's research just reinforced it a little bit stronger for me.

57:00Lomax Ward:I think Europe has got a real opportunity here to make some real inroads at an exciting time to be alive in tech. Mads, what is your deal of the week? A company called Luffy AI. They've just raised an 8.1 million pound Series A, and they make self-tuning AI control for industrial electric motors, which is interesting thing. So yes, that's the one I would highlight. Luffy Lovely. Lomax, what is yours? An absolute monster. It's Germany, or specifically Munich's Proxima Fusion, raises 411 million euros. So I guess that's over half a billion dollars at a two and a half billion dollar valuation. The largest fusion round ever in Europe.

57:52And one of the biggest European tech rounds of the year, led by XTX Ventures. It's actually a relatively young company. It's only two, three years old. And very... Good for them. it's very cool we actually often talk about europe's inability to build large deep tech companies the likes of spacex but we have also at the same time said lemax that quantum and fusion

58:14Lomax Ward:are possibly going to be somewhere that europe can yeah exactly these are these are proving what i was going to say was you know you have that and then and then like companies like north vault kind of continue that like that narrative but if we can like buck the trend with companies like this as you say quantum there's some iqm i think just did a ipo this week no in in finland this week recently last week yes yes last week so um for sure could be nice there's a lot of money that still needs to go into that pre-revenue so people are going to need to hold their nerve on that one yeah i bet well it's fusion huh mine is also a munich business quantum diamonds they raised raised 91 million this week to scale semiconductor inspection tech now only 15 mil is actually equity the rest is kind of some kind of pseudo government backed package however following the asml playbook and in quantum and creating value today i say bon chance and go for it quantum diamonds from munich and anything else yeah i would add you called so blue origin your jeff bezels's launch company raised 10 billion 130 billion now you referred to that earlier on in the pod is sort of being symptomatic of the um or emblematic of the um of the bubble that we're crazy crazy i mean really i mean it's raising a tenth of the price of not even a tenth of like five percent of the price of spacex um sure i saw eric schmitz um i can't remember what eric schmitz it's something called like the rocket company so we've got a very basic name but he's kind of slid under the radar as well raising a big chunk of change he basically took control and recapped a rocket company yeah which he now owns a lot of but you know if you put it in the context of the spacex valuation then blue origin is relatively well priced but i guess you would argue that blue origin is just at the moment a launch business and spacex really the the the driver of value is um starlink and not a launch business yes so on that basis then maybe is that it does look a bit pricey still it's an interesting you know spacex is going to have some more competition going forwards.

1:00:20Lomax Ward:Yeah. I also saw that the Chinese have offered the Russians a competitor to Starlink. I don't know where they've got to with it, but there's the tiny European activity. There's a lot more activity going on in China to produce that kind of what will become, I imagine, some kind of eye in the sky. So that'll be interesting to see how that pans out as well. Mads, what's happening this week that we need to keep an eye out for? Tuesday is big macro day in the US. You have the US CPI being released. You have five big banks announcing earnings. You know, Walsh's first testimony, the new governor of the Fed.

1:00:59So that'll give us a read of the US economy, which is, although we are in Europe, of course, is still the driver of the global economy and therefore very important. We also have some real AI CapEx verdicts, both ASML and TSMC are reporting next week. ASML Wednesday, TSMC Thursday. It's going to be interesting to see. We've got more news on the Volkswagen debacle here. There's an investor call on Monday. So there's sort of a showdown around what's going to happen. Will they be able to restructure and cut costs or not? And then, of course, most importantly of all, we have the continuation of the FIFA World Cup and some exciting matches coming up.

1:01:41Lomax Ward:So we're moving from history to sport. I'm loving it. Upside is moving and shaking. Let's go for it, boys. Looking forward to that. So that's our time of pod. England is playing on Saturday, so it's tomorrow. But I mean, that is it, I think, lovely people. Anything more before we close off? who do you support in the football mads you support england though surely over norway of course norway denmark don't call him norwegian no i know i know norway used to be part of the danish empire now um that's true once upon a time yes danes used to own everybody or something like that right um yeah for a long time too yeah back into the history lessons loving it uh gents thank you so much for your time and for everybody listening and watching we will catch you next week see you in the next one

1:02:34Upside!