The AI Pendulum Swings the Market Hard

18:31Ejaaz:Well, I think people are worried about job security, to be honest with you. I think they don't see, they fear themselves being replaced by AI and not being able to get back to what they built themselves up to. I think that's what the fear is, right? And that they might not be able to find another position that can get to their, you know, the lifestyle they become accustomed to.

18:54Bijan Maleki:And I completely understand that. And I actually agree with them. No one's job is safe, including my own. But I guess I choose to take a more optimistic view of that. People had very similar sentiment around the dot-com era and the internet boom. And listen, it did actually happen. There was a bunch of displacement around jobs. But almost immediately after, you had a flurry of new jobs, workers rescaled themselves, and they actually ended up being in a better position where they would make even more money than they originally would from their previous jobs. So listen, I'm not saying it's going to be a smooth journey, but I just kind of like have heard, seen, and read about a bunch of these trends happening before.

19:39Bijan Maleki:People often always take the more Duma take or path or imagination. I don't think it's going to end up like that. I think there's going to be a way forwards. Now, of course, there hasn't been a technology like AI before where in those previous trends, it's happened in silos, right? It's like, oh, yeah, software can replace only certain things, but not everything, not manual stuff, right? But AI is like way more pervasive. Any sector you can get access to, like that user software or a computer, we got you. Now, manual labor is safe for a bit longer until robots scale, right? But that's going to happen soon over the next like five years to a decade.

20:13Bijan Maleki:So it's not happening immediately, but I do positively believe there'll be other jobs and other skills available, which will end up, I think people will end up richer than they think they will, is basically my take.

20:25Ejaaz:I love that take. Like I'm signing out.

20:28Bijan Maleki:I genuinely believe it. I genuinely believe it. I think we're going to end up, people are going to end up with more money and more better healthcare. Like think about this personalized medicine. Like if you have an AI that can like weed all your vitals, you know, we've got, everyone's wearing an Apple watch these days. If you can weed your vitals, predict certain things, find trends that doctors can't do because you go to the doctor after you feel ill, right? No one's being proactive about their health or the majority of people aren't. Like imagine that it feeds into your health costs. Imagine you're exercising and it's like, lower health cost.

20:57Bijan Maleki:There's so many good things that can happen here. We scientific research to find cures for a bunch of different things. That's all going to happen. People aren't pricing that in. And it's going to be amazing. It's going to be way more affordable. So chill out to all the doomers is all I'm going to say. Yeah.

21:11Ejaaz:Yeah. I guess it just comes down to that age old thing where people just, they're scared of change, right? I guess that's essentially what it might come down to. But so I want to ask you before we kind of move on. So if you're kind of that 25 to 40-year-old professional watching this and you are someone that's worried about AI replacing you and you don't know what to do, what do you think is that practical move for them so that they don't get caught flat-footed with this?

21:39Bijan Maleki:Pay$20 a month. It is the best ROI. Ditch your Netflix subscription, by the way. I know you all have it. We all have a bunch of subscriptions. You can afford$20 a month. The ROI that you will get from just talking to your chatbot or your LLM, whether it's ChatGPT, Claude, which is my personal favorite right now, Grok, whatever, take your pick and just do me a favor. Try and apply it to your regular tasks that you go to on your day-to-day. And what I mean by that is you need to keep an open mind. Like I've caught myself many times in instances where I'm like, ah, no, I subconsciously dismiss using AI because I'm like, no, I could never do that.

22:19Bijan Maleki:And then someone tells me, hey, by the way, I've just use AI to do this? And I'm like, oh, I need to remind myself that I need to just keep trying and asking it because every single update, there is a gargantuan leak. We're not talking about little increments where it's like, we're not talking about your Apple iOS updating. And it's like, oh yeah, great. We've got like a new Siri voice. Like, whoa, I don't care. A few bug fixes. We're talking about gargantuan leaps where this AI can do many different things. So my simple request is get a subscription and start using it. Take the default approach where it's like, I'm going to try using AI for everything.

22:55Bijan Maleki:And there are going to be some ridiculous cases. You can't use AI to order a coffee yet, but soon there will, right? You've got ChatGPT that's plugging into every single vendor and soon it'll be able to geolocate via Google's Gemini. And it'll be like, hey, dude, there's a coffee there. I'm connected to your DoorDash account. You want to just pick you one up? Or it'll start recognizing when you wake up and when you drink coffee, and they'll say, hey, don't worry. You did actually great work yesterday and you earned about 50 bucks extra than I thought, than we estimated. So there's a coffee waiting for you outside your door.

23:24Bijan Maleki:Obviously that sounds insane, but I'm just telling you, you need to start using these tools. And without knowing, you're going to get to a point where you're like, oh, I actually understand how these things work. That instantly makes you more valuable than your colleague who hasn't touched these tools. And let me tell you, more people than you expect have not touched these tools. You can get so far ahead right now today if you just start using these things.

23:47Ejaaz:That's such a great point. I don't know the percentage, but I feel like it's 99 % of people aren't even using AI.

23:55Bijan Maleki:There was that amazing infographic. Sorry to Bajan. Do you see this? I wish we could find it. Someone did the math. And basically, the majority of the world hasn't even touched AI. We are very much in a bubble. If you're listening to this, you're already way ahead. So stay ahead. Yeah, you're right.

24:14Ejaaz:Yeah, no, that's a great point. And then I think and I want to even take that a step further, because I think even within those people that are using AI, a lot of them are just using it for like just very silly tasks. They're not really they're just saying like Google talk to AI to be a friend or whatever, but they're not like actually using it to to make themselves more productive or efficient or just kind of improve. But I'm not saying you have to do that all the time, but I'm just saying within that there is an advantage for people that actually take it seriously and use it to improve their daily lives and tasks.

24:43Bijan Maleki:Absolutely. Yeah.

24:44Ejaaz:There it is. 84 % of humans have never used AI. That's either a crisis or an opportunity.

24:50Bijan Maleki:That's absolutely. Yeah. It's insane. It's insane. Like, I think the opportunity has never been larger for people. And I think because like, listen, I understand it's very easy to feel like you get left behind when it comes to AI, because there's a new model releasing every other day. Like, listen, this is like, kind of like my full-time job now. And I still miss so many different things. So I can empathize with that. But the ability to catch up on all the good things that have happened and learn those skills has never been easier. Like put it this way, you're almost at an advantage not knowing what's gone on.

25:23Bijan Maleki:And then now leaning into it fully now, you can get way ahead than people who have kind of been in this space and have kind of like burnt out a bit using all these different tools. And they're like, oh, I need to take some time out. You can just come in with a fresh mind and be like, wow, okay, I can do this now. Bunch of college kids, bunch of university kids in the US have been using AIs to code and do a bunch of different things. They're going to come out way ahead of the software engineers that have been born and brought up on manual coding and are refusing to shift. You know what I mean? So it's a mental thing.

25:52Ejaaz:No, absolutely. So I want to shift a little bit because I asked you a question about where's the investment idea within agents. And I want to bring that into AI as a whole, because obviously the Mag 7, Mag 7 is obvious, right? But what are some other sectors within AI that make for interesting investments? Is it data centers, infrastructure, energy compute, robotics? What's your take on what's interesting beyond the Mag7?

26:17Bijan Maleki:Yeah. The issue with the way things are set up is it's such a private market that the majority of the hot companies are private right now. But you mentioned a sector there that I'm extremely bullish on right now, which is energy and power generation infrastructure, which for your yawn, right? Like it sounds so boring. But the point around it is none of this stuff works if you don't have energy or power. And prior to this kind of event shift with AI, all our power grids and stuff are built for humans. Basically, if you can find a sector that is very ripe to be taken over by AI or robotics in the next decade, but is very much still designed and optimized for humans, That is typically a good investment opportunity right there.

27:06Bijan Maleki:I can use a clear example, actually. Leopold Aschenbrenner, who is this 23-year-old kid who was one of OpenAI's lead researchers, and he left and he started a fund, basically, and he wrote this whole thesis. It was like a 68-page long essay called Situational Awareness, and it was one of the most in-depth predictions of where AI is going to be over the next five years. And by the way, so far, he's absolutely nailed it. He released this essay, I think, two years ago, or a year and a half ago, and he's absolutely killing it. But he raised this fund of$1 billion, and he has just been absolutely murdering the scene.

27:43Bijan Maleki:All his investments have been killing it. And he took a position in Q4, the filings came out yesterday, of$854 million in this company called Bloom Energy. What's their product? they sell like these unique infrastructure to generate power and it can be kind of localized and specified for AI data centers. So again, like look at companies like Bloom Energy and a few other things and you will start to see the names that kind of pop up, Wolf Energy, all that kind of stuff. Yeah.

28:16Ejaaz:And how do you like, so how do you, when you're like, I guess, considering these and you're looking into that, what's like, what's like a viable way to analyze these? Is it like, Is it their order backlog? Is it who they have collaborations and partnerships with? It's the distribution model? It's all of those things.

28:31Bijan Maleki:It's all of those things. Yeah, it's like you have to look at who they're partnering with. If it's some no-name energy company that's partnering with some random AI startup, probably don't focus all your attention there. But if they're partnering with the likes of hyperscalers and neoclouds like CoreWeave or like Broadcom and stuff like that, These are all the big name companies that are co-producing GPUs and running these data centers. So if they're using it, great. If they're partnering with Amazon for AWS, also great, right? All these companies need power. And so you need to find the ones that are making the right partnerships.

29:06Bijan Maleki:Number two, it's maybe a boring answer, but you need to make sure that they're tested at scale. A lot like operating an energy scaling, an energy distribution company for like a thousand to 10 ,000 clients versus a couple hundred clients is a very different game. So it's important to make sure that they have that track record as well. But, you know, there are a million other frameworks you can apply to it. I'm no expert, but that's just my take.

29:31Ejaaz:yeah yeah and you know with this with this ai talk right a lot and and i've been hearing it a lot too uh it's like now we're kind of we we were we were in software phase with ai now we're shifting into to hardware phase can you kind of explain what that means is it as simple as like taking the software and you know putting it into a robot and now that's hardware like how does is it infrastructure build like what exactly does that mean yeah i mean i'm i'm with you there like

29:59Bijan Maleki:Like, okay, listen, the reason why this narrative of, oh my God, wait, we're going back to hardware is happening, has been partly due to OpenClaw because basically they sold out all of Apple's Mac minis, which is about a, it's up there. It's like an$800 device, I believe. They're all sold out because it caused everyone to believe that you need to run your AI agent and your AI locally at home. Now, listen, I come from a Web3 background. I support that a lot. I quite like that because it could be run privately and you don't have to expose your data and you know what the thing can do. It can't just go randomly outside of your realm.

30:41Bijan Maleki:But there are issues with that. It doesn't scale to the average person, the normal person who has become so used to just being like, actually, could you just give me that thing for me? Like we went from cell phones, remember, being like these big bulky bricks. Then they outsource all the compute to clouds and that's why it's so thin and easy to use, right? So I think we're going to see the same thing happen with all the AI stuff as well. That being said, it's different strokes for different folks. If you're an enterprise, you don't want to be giving your data to OpenAI and Anthropic. Not really, unless they can prove that they are privately holding your data.

31:15Bijan Maleki:But even then, you're like, how can I trust Sam Altman and make sure that he's not taking my data to train an even better model? How do I sue almost$1 trillion valued company? You know what I mean? It starts getting a little murky. So what these companies are doing, these enterprise companies, are they're running their own data servers and racks on-premise, on-prem, right? And it's weird because now the GPU becomes this kind of like weaponized, not weaponized, but like unique asset, almost as valuable as gold, right? You need to keep it protected, make sure there's guards outside, because that becomes the new kind of like gold or physical important asset.

31:49Bijan Maleki:But for consumer companies that act as a platform for different regular consumers like UI, they might not actually care that much. They just want a quick, easy service. And I think both will win. I think Apple is actually primed the best to basically facilitate both sides of those things because they have a private cloud. They have the best devices with the most cutting-edge components to be able to run local models. Put it this way. If there's a local AI model that can run on a device, it's going to be an Apple device. They're going to be the first ones there. So yeah, it could be either or.

32:25Ejaaz:Yeah, especially with like, I mean, yeah, that'd be very powerful, especially with the amount of Apple users there are around the world. Could be very interesting. So I want to ask you another question that I've been hearing a lot about and want to get your take on, right? Because apparently we're in like an AI race right now between the US and China. And I've been hearing that whoever wins is going to become the superpower for the next generations. But is it really that simple? Is it only just between the U.S. and China? I'll ask you that first before I have some follow-ups on that.

33:00Bijan Maleki:Sure. I guess that's the most obvious rivalry right now. China is probably the most advanced country after the U.S. when it comes to AI. And to be honest, they're even more advanced in quite a few different ways. They're leading the open source charge. They have the most energy and power generation set up. I just spent like 10 minutes explaining how power generation was a constraint in the US. Not really in China. They have a ton of it. Where they lack is GPUs and hardware devices to train these AIs. But they're leveling up pretty quickly. Guess who's the manufacturing giant of the world? It's China.

33:38Bijan Maleki:They can do it with cheap labor and scale it out massively. But then the counter argument to that would be like, ah, but robots are going to really be the cheapest way to scale. And like, OK, well, China also has the most robots. They produce three times more robots than the entirety of the rest of the world combined. Right. Last year. So, you know, China is definitely I don't know whether you would want to consider them a competitor or a threat. I do think these models are going to be used as a geopolitical weapon in the future. we saw this week, Anthropic announced that China had actively attacked Claw to steal its blueprints.

34:11Bijan Maleki:And this comes a week after OpenAI and Google said the same thing. So it's definitely a thing. They even named Labs Moonshot AI, Kimi K2, and then DeepSeek as well. So it's definitely happening. It's become like a very contentious point. And whoever wins, wins. So, you know, gloves are off. It's like, it's a big deal. It's something that we should be taking seriously. Yeah.

34:32Ejaaz:And what I've been hearing, too, is like they also seem to be going down U.S. and China, right? They seem to be going down different paths of like how they're focusing on AI, right? Where in the U.S. it's kind of private sector driven, right? We have the Googles and videos kind of driving that. And then China, like you were saying, it's they're looking at low cost, open source, right? And I've been reading that they're pushing adoption in areas like healthcare, I think education as well. So what are, I guess, what are the pros and cons to you of each approach?

35:03Bijan Maleki:To be clear, I think if China was ahead in the AI model race, that would not be open source. No way. Open source is a strategy they're pursuing to dismantle USA's head start. How do they do this? Well, if you can steal AI model secrets from the frontier US labs and then train your own Chinese models and then open source it to everyone, what happens? Now, OpenAI, Anthropic, and Google don't really have the moat that they can charge a premium on and make loads of money on. So their stock price tags, their offerings tag, they need to be reduced closer to what the Chinese people are pricing, right?

35:43Bijan Maleki:So it gives them more leverage. So that's what Meta tried to pursue when they realized they were behind on the AI race and they tried to catch up. They open source all their lumber models that failed. So now they're trying to like hire a bunch of like people for billions of dollars and train their own model. My bet is the model that they're going to release in a few weeks or even a month's time is going to be closed source. So it's a, it's a, it's a game, but China's not doing this altruistically. Don't make that mistake. Yeah. Yeah.

36:11Ejaaz:So I want to, I want to, I feel like I might be jumping all over the place, but like with this, right? And we discussed the human impact. I want to kind of ask you, what do you think maybe in the next three to five years are like some of the biggest human impacts this will have that we might not be talking about right now?

36:32Bijan Maleki:It's a good question. So the obvious one is job displacement. And I think white collar workers are going to be the ones that get hit the first. The conversation that hasn't been taken seriously yet, but will happen in the next five years, three to five years, is manual labor. People don't take it seriously because they don't see robots walking around them normally in the world. Let me tell you, by the time you do, it's already too late. These robots started as a toy. They were a toy for a very long time. And as of the last six months, they became much, much less of a toy. And I think this year, you're going to see them being scaled to industries that doesn't affect you specifically, but they'll be automating factories at this point.

37:17Bijan Maleki:The fun part is robots have existed for a while and have been displacing people out of jobs already. Amazon is one of the biggest users of robots. And in their warehouses, they operate everywhere and they're way more efficient and cheaper and they can run 24-7. But they've worked in cohesion with humans because some of these robots aren't adept enough to do some of these actions, like pick things up, visually look at something and be like, I don't think this works or blah, blah, blah. You need humans, right? So humans have always worked in cooperation. That's not going to happen in three to five months.

37:50Bijan Maleki:Three to five months, three to five years. These robots, these human robots are getting really good. They can pick things up. They are super strong and they can work 24 seven. So you don't need to rely on a human not waking up and making their shift. You can just use a robot. So that's another thing that I feel like humans aren't really ready for. And then the other general take is kind of like the point Matt Schumer was making in his article, which is like, if you think your job is safe, it's probably not. So just, I'm not saying it's going to change tomorrow or in the next year, but you should very much be aware because this isn't a joke anymore.

38:23Bijan Maleki:You know, you've got companies cutting 40 % of their staff and it's not just a couple hundred people, it's 4 ,000 people. You're going to see more of this trend happen this year alone. And just because it's not your company or sector doesn't mean it's not coming in for you. Yeah.

38:36Ejaaz:Yeah, very well said. And I think, you know, what we saw yesterday with Block, and I think that's just the first of many future dominoes to fall in that. And to bring it back to a more optimistic note, you did say something here and last time on on Rec, you were on Rec Division about the progress it can have in health care, right, and solving diseases and, and illnesses that, you know, humans never have even come close to. And I think that's a really powerful human, positive human impact that it could have in our future as well. I don't know if it's three to five years away, but I definitely think that's.

39:14Bijan Maleki:Agreed. Yeah.

39:16Ejaaz:So I know we kind of discussed this when I asked about what that 25 to 40-year-old can do if they're worried about AI taking their job. But I want to take that another step further. What about people that are excited about this? I know we said we can have a$20 subscription and just start using it. But like, what is like, how can someone capitalize on this transition productively, financially, beyond just buying the same tickers that, you know, someone is saying on Twitter or anything like that?

39:48Bijan Maleki:Are you asking from like an investment perspective or like productivity?

39:52Ejaaz:Oh, let's go with both because I think those are both very powerful. Got it.

39:57Bijan Maleki:Yeah. Got it. So from a productivity point, listen, like if you're excited about AI, you've probably figured out that even a couple hundred dollars a month, which is very expensive, by the way, a subscription, excuse me, can pay for itself if you use it correctly. And so those people are already kind of pretty much power users if they can afford it. And these things are expensive, but they're going to get cheaper with every single model release. So keep using it. I personally love using Anthropics Flawed Cowork, which is a, call it a safer version of OpenClaw where there's less security risks.

40:34Bijan Maleki:You're more limited in what you can do, but it gives you a good taster. So what you can do, you can get access to that with a pro plan or with a max plan if you want unlimited use. Try and get access to spinning up an agent and getting it to do very basic things for you, whether it's giving you a morning news brief in the morning, or if it's like, you know, helping you automate a very boring, arduous task, which you just can't be bothered to do. Just try getting an agent to do that. It's a weekend project. It'll take you, you might think it'll take you a couple of hours. It'll probably take you 10 minutes because these models can just code up an app for you.

41:06Bijan Maleki:You know, the next time you can't open an app on your desktop, just like literally add it to a code or GPT and say, hey, can you code me up an app that helps me look at this? And also like is intuitive for me to use and it'll just do it in five minutes. It's a very weird way to kind of get your head around. In terms of investments, I don't want to be dishing out specific investment advice, but all I will say is that if you think that all the important tickers and companies have reached their climactic point, my personal take is that's not the case because people aren't pricing in how powerful these things are going to become.

41:41Bijan Maleki:If you were surprised by NVIDIA absolutely smashing their quarterly earnings estimates, by the way, they've done this for like almost a year and a half straight. I don't be surprised if they do it again, the next quarter is all I'm going to say. So there's a lot more room for these things to go, assuming demand keeps up. And right now, all the data shows that demand is sky high. Like you've got 10-year-old, five-year-old GPUs, sorry, that are selling for above the price that they sold when they officially were launched I mean, they were new. It's crazy.

42:13Ejaaz:Yeah, just absolutely crazy stuff. And I couldn't agree with you more, Ejaz. I think we barely scratched the surface of where this thing is going. And one thing I want to just kind of button home, you guys mentioned this last time, and Raul and Andreas actually talked about this most recently. What makes this different, because people talk about this as an AI bubble, this is not being funded by debt. These companies are actually using real cash to buy this. So it's very different from 1999.com bubble. So that is optimistic in and of itself.

42:45Bijan Maleki:Even if they wanted to go use like a bunch of debt, and there's a bunch of private market stuff, but it's nowhere near as big as the.com bubble just yet. But even if they wanted to go into debt, they can't because there's no power to power the things that they're trying to go into debt for. So it's like, yeah, it's hard.

43:00Ejaaz:Ejaz, it's been a pleasure having you on as always. We look forward to having you back on Rectivision. Just fantastic conversations. Likewise. You have a great, great week. Yep. Take care, everyone.

43:12Bijan Maleki:Thank you. See you guys. You obviously enjoyed the episode because you're here with me at the end. But listen, don't forget to go to realvision.com forward slash join and grab a free membership. It's an incredible community packed with alpha, great investment ideas, and the research that you need to help you unfuck your future. So get started now. Go to realvision.com forward slash join.

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