Latest / The Curve / We need to talk about Anthropic's trillion-dollar IPO.

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We need to talk about Anthropic's trillion-dollar IPO. · The Curve

• 0:00
  Coming up in today's episode, we speak about Anthropic. It's one of the biggest businesses
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  to go public and everyone is talking about us. It's so fascinating and rather than doing
• 0:12
  too many stories today, we've been quite a bit of time unpacking this. And we do a bit
• 0:15
  of comparing contrast with the .com bubble and is this going to be an AI bubble? Should
• 0:20
  we stay clear? Should we keep investing? Or should we do? We break it down.
• 0:24
  One of the most famous, successful investors of all time Warren Buffett has recently stepped
• 0:28
  away from being at the helm of virtue, I have the way, his investment company. There
• 0:33
  have been some really interesting investments made by the new person in charge. So we basically
• 0:38
  talk about, do we think these are total disasters or actually really good investments?
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  And in the podcasting space, there looks like there's going to be a new Alex Cooper. A podcast
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  has been bought for $100 million. I think the most interesting part of this, Netflix
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  and Spotify have bought it. So it's not just one owner, it's two. So we break down what
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  business made for the whole industry. This is the curve weekly, where we read the
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  finance news so you don't have to. I'm Vic Harris, I'm a finance professional and have
• 1:04
  made a career out of making money for other people. And I'm Sophie Hallwright, an ex-TV
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  radio producer who was just a very second-tired of not understanding the economy or anything
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  about money. So we set up this podcast. We're also joined by our producer Emily Regby
• 1:17
  and our social media manager Lucy Monroe, who are behind the scenes making this podcast
• 1:21
  possible. But before we dive in, we've got a quick word from today's sponsor.
• 1:28
  This episode of the Curve Weekly is made possible by Pathfinder Kiwis Ever Plan, helping
• 1:33
  you invest alongside your values. Pathfinder's one mindful money, best ethical investing
• 1:37
  provide up for five years running. So we've teamed up with them to bring you the ethical
• 1:41
  hotline. Got questions about the ethics of an investment? Or unsure where you draw the line?
• 1:45
  Submit your questions via the link in the podcast, show notes and thank you so much to Pathfinder
• 1:49
  for making this episode of the Curve Weekly possible. Pathfinder asset management limited
• 1:53
  is the issuer of the Pathfinder Kiwis Ever Plan. A product disclosure statement is available
• 1:57
  at Pathfinder.kiwis. I wonder if anyone's seen us on the news? Yeah. Because we Aussie,
• 2:02
  Aussie Pals, seeing us on Channel 7. We have an interview at 1am UK time, which I will say,
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  if there's anyone that's dedicated to the cause, it's us because that's what's like me too. You were
• 2:14
  good to do it. I was like, absolutely not. We are in this together. Oh yeah. It's like,
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  no, I think it's really importantly there. I'm like, no, you don't. You just want me up at one
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  in the morning. We both can suffer. No, really, exciting opportunity and we're really thankful.
• 2:30
  Sorry. Yeah. Have our agents listening. Thank you for the opportunity.
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  It's the morning show on Channel 7. We're basically talking about what you do when kids leave home,
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  how you think about your finances, how do you plan for the next sort of 20, 30 years.
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  And when we were planning for it, I was thinking this is actually quite good content too.
• 2:47
  Maybe we should make this podcast another. But maybe we should record the podcast at 1am,
• 2:52
  absolutely not. Are you going home to have a nap? No. Are you going to power through?
• 2:56
  Yeah. I think I'm going to go home and have a sleep. I'll just be so, I'll be so groggy,
• 3:00
  like waking up. So this is my plan. I mean, if you're going to sleep through the whole thing,
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  you're not going to wake up. No, no. You're going to be like, my mom didn't go. I'm sorry,
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  though. I've got a full alarm. No, no, no, excuse me. No, you're saying it worked for 1am.
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  No, no, no, no. I've been here since 7. I'm not doing that. My plan is 3pm. I'm going to go home
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  and then I'm going to come in for the interview and then I'm going to work all through the night
• 3:24
  and then I'm going to finish for the weekend. Oh, I'm going to, I'm working. It's quite good.
• 3:28
  I was like, I was saying to my man, I say, oh, it's great. I can have meetings with New Zealand
• 3:32
  right up until 1am. So I'm going to do it. I'm going to do the opposite way. Maybe I'll do that then.
• 3:38
  I'll work through and then I'll just take tomorrow off because if I'm working till 2 in the morning,
• 3:41
  it's just ridiculous. Anyway, sorry moving on. Hey, moving on, moving on, moving on.
• 3:45
  There is beans. Everyone's like, yeah, we saw you. You're a shit. So move on.
• 3:50
  It was bad. Follow you. I'll just bury that onto the rug and not talk about it. You
• 3:53
  definitely should have had an app for a like... God, it's like every podcast record. It's like
• 3:59
  another IPO. It's great. I know that's not really great, but like it is great. Well, yeah, I mean,
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  yeah. But there was a time when we had this podcast. We know businesses were going on the stock
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  market. Yeah. There were no new companies. And now we've got this IPO a day. It's quite fun.
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  And I will say, for anyone that does not date somebody that a reads the financial times or B,
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  maybe reads the news themselves, you may have missed this. But everybody is talking about this
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  particular business that's about to go public. It's, as I'm going to say, shaking some tail feathers.
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  That's not what I'm looking for, right? It's really ruffling some feathers. It's ruffling some feathers.
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  It's a big deal. It is a big deal. Anthropic. People might have thought we were talking about
• 4:41
  SpaceX. No. Don't you worry. Listen to last week's. Yeah. This is another new one, which
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  another new one, Anthropic. So Anthropic is the AI company behind Cords and they have
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  confidentially, it's not confidential, but confidentially filed their paperwork to go public,
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  which means you and I will be able to buy these shares on the stock exchange very, very shortly,
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  which is super exciting. The company is going to be valued just under a trillion dollars.
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  So remember we had SpaceX, IPI, at 1.8 trillion. And now we've got Anthropic, which is going
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  to be around about a trillion dollars as well, which is crazy. So before we get into the numbers
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  and what this means for the stock market, let's just remind people this business is run by a
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  brother and sister duo. They used to work at Gario and Dan Niala. And so they are both estimated
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  to be worth around 7 billion each, which is absolutely crazy. But the best part about this
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  story is that they used to work at CHATGBT OpenAI. And then they went and started Anthropic as the
• 5:48
  competitor. So this is kind of juicy and exciting. And they got asked to go back to OpenAI. And
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  they were like, no, it would be like Emily, our producer, going and creating a new the swirve,
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  which is all about finance news and investing. And then all of a sudden it being this huge
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  massive podcast that's like really arrival to us. And you know, our biggest competition is
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  the business Emily built. That would be and we're scrambling to IPI as well. But we're not going
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  to IPI for as much. But email is IPIing at Niala trillion. And we're like maybe 900 billion.
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  She went to South by Southwest. I went to South by Southwest in London yesterday. And I was
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  listening to a bunch of people in the podcasting space talk about podcasting. And there was like
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  the a cast CEO or founder like someone really hyper a cast. And then there was Kristiana. I can't
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  remember her last name, but she's now the CEO and founder of Flight Story, which is a massive
• 6:44
  competitor to a cast. And they were on this panel together talking about the future of
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  podcasting. And you could just tell it was uncomfortable. You were like, you left this business
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  to go and kind of start this other one. You're like, oh my god. But yes, I think there's just like
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  a lot of details to the story that's made quite interesting. But the main reason people are talking
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  about this is that SpaceX and now anthropic are two of the biggest companies to ever go public.
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  Yeah. And they're both AI companies. SpaceX is to an extent. And so is anthropic. And then we've
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  got open AI coming. Like that is just so much money and like highly valued businesses that are
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  coming to market in the AI space. Like if that doesn't screen bubble to me, I don't know what does.
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  Anyway, I'm not calling a bubble. I'm just saying that. But it is a bubble though. It's just kind of
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  like, I mean, if we take SpaceX, your your IPO, 100 times you're reviewing you. Like it's kind of
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  like when you start seeing numbers like that, like trillion dollars, it's like hype and exuberance.
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  And it's it's not normal. It's also not really real, right? Like if you think about when people value
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  a company, often it's based on a revenue multiple. So, you know, four or five times a revenue.
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  Or neither of these companies are making earnings, which is kind of the point, right? So like the
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  value of what you're paying for the business is a multiple of profit or revenue. Yeah.
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  Which did you just say it's 100 times? 100 times. Revenue SpaceX. So often when you talk about
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  buying a share in a company, and this is something we don't talk about a lot on the podcast,
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  because it's kind of complicated. But the whole price to earnings ratio situation, right? Like if
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  you're looking at investment, you're trying to decide, is it valued right? Or am I getting a good
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  deal here? It's kind of important because this is technically like, well, you look at it versus
• 8:30
  competitors. And like if you were buying Amazon, and it was 20 times, you know, the share price
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  was 20 times its earnings versus Google, which was 10 times, then you'd be like, oh, well, Google
• 8:42
  looks more attracted. So you're trying to like compare companies in the same industry or one company,
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  kind of over time. But it's the key thing within Thropic is that it is expected to earn a profit
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  than the first half of this year. So it is, I guess if you are going to buy an AI business,
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  that proves it can be profitable, then you'd be buying in Thropic. Like it's a proven model. Open
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  AI still hasn't generated a profit. SpaceX hasn't, you know, like when you buy a company, you're
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  buying its profitability, its future growth, its future profitability. So it's like the fact that
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  in Thropic has gives me like great confidence being like, okay, they're onto something here,
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  and something sustainable. They've got 500 corporate clients, spending over a million dollars
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  a year with them. That's only 500 corporates in the world. Like you just think about how
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  how much we are using it and we are such a small business. We are a blip. Every day it brings out
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  something new. So you bring out new new uses or new products. You've got new customers. There's
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  just so much growth still to go. And that's why people are flocking to AI is because there's just
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  increasingly, an increasingly expanding market of its uses. They have increased their revenue
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  five times. So five times over. It's multiplied five times since January to May. So each month,
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  they're effectively doubling their revenue. And in March 2025, so like a year ago, this company
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  was valued about 60 billion. And it's now going to be valued at trillion. Like the growth they're
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  just seeing is like out the gate. The one thing here is that the investment banks that are taking
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  this to market and effectively like help the business, access clients and actually get it across
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  the line, they're getting around 500 million in fees for taking this company public. Like that is
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  wild. And I was like, hang on a second. Maybe that's like, maybe that's the investment angle.
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  So to invest in the banks, when you've got three of the world's biggest IPO is coming to market
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  this year. If say like it's JP Morgan, Goldman Sachs and Morgan Stanley that are on the steel,
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  if you if I saw that like Goldman Sachs was on all three, I'd be like, I'm investing Goldman Sachs.
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  Yeah. But that's the whole question with this whole AI space is like, you have these tech companies
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  investing billions and billions of dollars. Alphabet will get to a second just doing a doing
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  a capital raise to raise money to invest more in AI. And that's the biggest question is,
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  will this come or all these companies investing? And we actually don't expect the AI demand to be there.
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  That's the big question. That's what you kind of have to everyone's kind of researching and trying
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  to figure out. And when yeah, you've got NVIDIA coming out with a great result. You've got Amazon,
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  you've got Google, you've got Microsoft, you've got AMD, which is like the second to NVIDIA,
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  all of them coming out with these fantastic results to say demands booming.
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  It makes you think, okay, there is, we are still just beginning of this like revolutionary change.
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  The reason, you know, the bubble situation that we mentioned before, which is what a lot of
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  I would say finance borrowers, but anyone really in the finance space or investing world is
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  fixating on is the idea that there has historically been lots of times, not lots, but like the
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  dot combo. I don't know a huge amount about it, but essentially there was all these businesses
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  that started getting enormous, enormous valuations. And they had no earnings. And they had no revenue.
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  Yeah, so it's like, yeah, it's like if we compare this, because it does scare me when you have three
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  companies this size, potentially coming to market, so open AI, SpaceX and Anthropic and two of
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  them are lost making. All three of them are beating on super high demand for AI to continue for
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  years and years and years. So it does kind of scream, okay, we're at the top of the market as
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  this the start of like a correction, I don't know. And so it's starting to look at, you know, the
• 12:41
  similarities between the dot com bubble and where we are now. And the dot com bubble was like in
• 12:49
  the late 1990s, and it was when the internet had just come into play. So everyone was like,
• 12:55
  oh my gosh, internet is going to change the world, which kind of has different hairs. And
• 13:00
  between 1995 and 2000, the NASDAQ stock index, which was kind of the tech focus one. So very similar
• 13:08
  to S&P 500, but more tech companies, and which has got all the tech companies we know today are on
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  that increased five times in five years. So it went from 1000 to like 5000. So it was just
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  incredible, incredible growth. And companies with no revenue, no profits, even sometimes no product
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  were being valued at like over a billion dollars. So that just, it's just shows the exuberance
• 13:34
  of everyone being like, this internet thing is going to be crazy. I just want to be sent anything
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  and everything. And not having the acumen or the, the woo, you know, like just chill, just chill,
• 13:45
  everyone's getting into the hype. And then you have people talking, have you invested in this
• 13:48
  internet company? Oh, I have, you know, it's, it creates this phomo and anything that had dot com.
• 13:54
  And it's name, kind of like now with anything that's like AI was just valued at a
• 14:00
  redixly valuation. And there was nothing like tangible. Whereas at least within Thropwick,
• 14:03
  you've got profits. That is tangible. You know, you've got something to fall back on.
• 14:07
  And I, I'd love to talk about the poster child for the dot com bubble and what happened with
• 14:11
  pets dot com because I feel like that's such a good example of this. And what is easy to forget
• 14:17
  is that while there was a dot com bubble and there was all these businesses like pet dot com,
• 14:21
  which we'll talk about in a second, there were also some amazing companies that came out of it
• 14:27
  that are still huge today and a massive part of the stock market. So while there are people
• 14:32
  floundering around, it's kind of selling fake news and fake businesses and raising all this money,
• 14:37
  there are also at the same time businesses that did really well are the dot com age totally.
• 14:42
  And it's always opportunistic when a company IPO's they are not doing it when the AI
• 14:47
  spaces in the toilet and people aren't excited. It's like with all birds, they IPO and did that when
• 14:52
  sustainability and like all of that was so hot and, and wellness and fitness like they,
• 15:00
  they IPO to the perfect time and wear the stupid ones that get caught up in the hype and don't
• 15:07
  focus on the fundamentals of a business. Yeah, there's a saying that Warren Buffett says it's far
• 15:12
  better to buy a wonderful company at a fair price than a fair company at a wonderful price.
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  So it's like it's way better to wait or, you know, find a find a company that's that's kind of like
• 15:23
  is undervalued or people, you know, it's had oversight from people, people are kind of ignoring
• 15:27
  it, but it's a wonderful company. It just doesn't have the exuberance and everything.
• 15:31
  Then pay for a company like, you know, could be an anthropical space, which is super exciting and
• 15:37
  super shiny, but they just like, you know, okay, company. Can you explain what happened with pets.com
• 15:43
  because I think that would be an example of paying a fair price. No, a wonderful, a wonderful
• 15:51
  price for a fair company. But to be fair, it's not even a good company and that was kind of the
• 15:55
  whole point of this. So at IPO and February, February 2000 in the market fell off a cliff in March
• 16:02
  2000. It raised 82 million and it was bankrupt nine months later. So people saw pets.com and thought,
• 16:10
  oh, perfect. I'm going to buy it. Oh, my God. And it became this huge thing. People bought it.
• 16:15
  They got on my delivery company. Did you say that? Or yeah, can't we see that? Yeah, no, no,
• 16:20
  we didn't. It was an online, yeah, and basically it was famous because it spent more money on
• 16:24
  it. So it's not super bad than it made in revenue ever. What? Yeah. Oh,
• 16:29
  food delivery. Oh, my God. I didn't even think. Here's a cat. Here's a dog. Here's a goldfish.
• 16:36
  I had a goldfish company. Do you remember? What do we call it a company? Sorry, that's
• 16:43
  for you're right. A little budding entrepreneur Vic here when she's like 17 and we had like
• 16:49
  young enterprises. 17. Who the hell is buying a goldfish at 17? It was really cool to like walk
• 16:54
  around school with a goldfish event. Oh, God. And this is a great example of, you know,
• 17:00
  probably being a wonderful priced company. I don't know. It was basically Vic was taking advantage
• 17:05
  of the.com bubble. She saw pets.com is there and she knew I'll get goldfish just to go. I saw
• 17:10
  finding Nemo just launched. And Eve rum was like, oh, I'm going to find Nemo and we were like,
• 17:16
  cool. It's so goldfish. I mean, it is quite clever. And we got first delivered to school. And
• 17:20
  Eve rum was walking around with the like it was the best marketing. Did you have a logo on your
• 17:24
  plastic bag with the fish? I spray painted my dad's fishing rod. And he lost it. I spray painted
• 17:30
  orange because it was like orange was our color. And he told me I couldn't and I just went
• 17:34
  even to that. You are such a little chef. And he to this day is not that we forget. I'm like,
• 17:38
  it was a fishing rod mate. Like, but it was, these are fishing rod and these are fishing rod.
• 17:42
  And it was a fishing rod. Oh, no. Like the big circles. It's got the, yeah, yeah. It's like
• 17:49
  really good rod. It's like a string. Yeah, I know it's actually made and it's got a really seamless
• 17:56
  thing. It was up and down and up and down. You know, like the. Oh, god. Okay, back to us. Okay,
• 18:03
  so the reason we're bringing this up is so pet.com was an online pet food delivery company.
• 18:08
  So they famously spent more money on their Super Boy ad than they made in revenue ever. Not a great
• 18:14
  business. Not a great material. Yeah. So the bubble burst in March 2000. And the average internet
• 18:21
  company lost 88% of its value. And the Nasdaq stock index declined about 80%. And 15 years later
• 18:32
  is what it took to get back to those levels. This is why people are panicking because they're
• 18:36
  looking at all these enormous companies that are going public for the first time. They have
• 18:41
  these huge valuations. People are obsessed with. If you have.ai in your website. If you have anything,
• 18:48
  people love it. Oh my god. So I'm doing this talk at London Techweek. And I feel like wanting to
• 18:54
  put the curve AI. Do it. Everyone else on these panels is like genius AI. Like all this like,
• 19:01
  every time there's AI and I'm saying, hi, we're the curve. You know, like I just.ai. Just
• 19:06
  don't just do it. Curve AI. You're gonna be like, oh, do you guys do AI? We use it. You should
• 19:13
  do. We should be the pets.com, you know, and give people to invest 100 billion. But the whole
• 19:18
  sorry, the whole point to this is that because it took 15 years for the Nasdaq to recover. So it
• 19:23
  was doing so well. Like, oh my god, we're absolutely peaking it. And then it fell off a cliff. And it
• 19:29
  took 15 years for it to recover. Like imagine if you had a million, a million US dollars in the stock
• 19:36
  market. And it fell like that. And it took you 15 years to get back to that. So a lot of people
• 19:41
  are thinking, should I be pulling my money out of the US? Is this going to happen? Is the bubble
• 19:45
  going to pop? And then, and for us, you know, for me, I'm putting 20 pounds or whatever, not a big
• 19:49
  deal. If you have a huge amount of wealth and all these people are talking about it being a bubble,
• 19:54
  quite scary to think you could just overnight lose a huge amount of wealth. Well, it's also,
• 19:59
  yeah, people that are close to a time that might not have 15 years to build a pack up or
• 20:03
  but I read these headlines like pets.com. And I'm like, will we be sitting here in a few years,
• 20:09
  in five years and 10 years going, yeah, and we had three companies thinking that could IPO for a
• 20:14
  trillion dollars. And we're, you know, it's happened again, because we're sitting here going,
• 20:20
  this is crazy. These companies, like a hundred times revenue, like, yeah, I'm trying to be like,
• 20:24
  will we be sitting here looking back on this being like, yes, that was ridiculous. Or is this
• 20:27
  the new norm? Like, that's how you're kind of trying to think about it. And when people invested in
• 20:32
  pets.com or companies like it, they lost their rationality. It was a FOMO trade. It was people
• 20:39
  getting FOMO and wanting to invest in these internet companies because everyone else was, which made,
• 20:44
  you know, the stock market go up and up and up and up and up. And they just lost their, you know,
• 20:50
  sticking to their, sticking to their nothing. And being like, no, I'm only going to invest in companies
• 20:54
  that have earnings. Or I'm only going to invest in companies that actually have a product or
• 20:58
  that actually show, you know, consistent revenue growth. I think the things hard with this,
• 21:02
  though, is that because they're going straight into indexes. For example, an ETF, if you aren't
• 21:10
  stockpicking and you're just buying the market or you're buying, you know, then, and then it falls
• 21:15
  by a huge amount. Because the reality is there's going to be businesses that end up being the
• 21:21
  Amazon or the Google's, but the AI version, maybe it is Amazon and Google, but it's more the idea
• 21:26
  that the.com bubble had incredible businesses come out of it. There's still going to be amazing AI
• 21:32
  businesses. It's just that there might also be a whole lot of shit ones too. And if the whole
• 21:36
  market crashes because there's so much exuberance and even though, yeah, there might be three or four
• 21:42
  that are amazing that stand the test of time. If you've like invested mainly in ETFs or indexes
• 21:49
  or whatever and you're just following the market, then you follow those big falls. And I think
• 21:53
  that's what I'm kind of like, how are you meant to know, like, what to do with your money?
• 21:57
  I have a lot of friends and people close to me that use index funds to invest. And so they will,
• 22:02
  they're basically following the market. They've picked the top 500 companies in America. They've
• 22:06
  got there some P500. They've got global indexes. They've got things like that, but they're
• 22:11
  definitely not stockpicking because they're fine following the market. And I think for a long time,
• 22:17
  ETFs in that type of investing has been great because it's been steadily going up. But now that
• 22:21
  it's almost scary, I think some of those people, particularly the ones that have a decent amount
• 22:26
  invested now, are like, well, I don't really want to maybe lose 85% of my investments to then
• 22:32
  wait 15 years for it to come back. They're trying to be a bit more active or...
• 22:36
  Yeah. And you're so spot on. That's ETFs have done, and index funds have done so well over the
• 22:41
  last 10 years because the market has gone up and up and up and up and up. And the way to prevent
• 22:48
  that massive impact of your portfolio following 80% like the index is to be using a professional
• 22:55
  investor that is trying to not only do better than the market when it goes up, but also
• 23:01
  protecting money on the way down. And so they're constantly researching, being like, okay,
• 23:05
  if we are in a, you know, heading into a .com era, again, what are the companies that are
• 23:11
  going to survive? Or what should we be investing in that's not related to AI that's also going
• 23:17
  to do well? And how do we protect your money as well as grow it in those times when the market
• 23:22
  as well? I think if you've got a decent amount of wealth, for example, if I had 500,000 invested
• 23:28
  in the stock market right now and I was in indexes, I think I would feel quite stressed out.
• 23:32
  You know, because you are just following what the market does, which if there is a bubble,
• 23:39
  you'd be so gutted. And I think that's why a lot of people are trying to figure out like,
• 23:42
  well, should I pull it out and like put it into, but that's where you get into territory of like,
• 23:47
  well, that's what the professionals do. Maybe you should just be, you know, give your money
• 23:50
  to a professional to make that decision. And they'll have all the information to see, okay,
• 23:54
  will this AI demand still continue for the next, you know, 3, 4, 5, 10 years? Or are we looking
• 24:02
  like we're at a peak and therefore should we start looking at other things to invest in? That's
• 24:05
  why you pay them. Yeah, because we can talk about this for ages. I think the reason that I find
• 24:10
  this bit really interesting is that we always say invest for the long term, you know, and that makes
• 24:16
  sense for sure. I'm not going to need the money in the stock market that I haven't there for 15
• 24:21
  years. So if it totally tanks, it's fine. I'm not going to be pulling that out. But it's so
• 24:25
  different for me with someone that doesn't have a huge amount of money in there compared to people
• 24:29
  who do and that are thinking, if I'm overexposed to the US and there's all these companies, you know,
• 24:36
  and your money is up here. I don't know. I just, I think it's a bit scarier when you're dealing with
• 24:41
  bigger amounts of money is what I'm saying. I would not want to be making those decisions by myself
• 24:45
  in maybe a drone, looking at articles and deciding if I think that they are. You know what I mean?
• 24:50
  Yeah, yeah, yeah. Classic finance, bro, in terms of making decision, don't do that. It's so
• 24:54
  funny. I was getting coffee the other morning and this guy had his headphones in and he was like,
• 24:58
  he had this tote, is he JP Morgan? I was like, oh, and anyway, and then he's like, nah, nah, bro,
• 25:05
  nah, no, market never goes down in the midterms. Oh, like which is the office of the midterm elections
• 25:10
  in US. And I was like, oh, I was like, listen, from this research that like have they gone down,
• 25:14
  you know, like I was like, oh, interesting, but I was also like, yeah, they do.
• 25:22
  That's what I wanted to like have some rebuttal, but I was like, oh, he just like, the epitome,
• 25:27
  I'm so, I'm like, do you realise? They must know that they're in a wheelchair. But maybe not.
• 25:32
  But anyway, I guess I don't think the question is like, are we at a bubble or not? I think it's
• 25:37
  if you are investing in stockpicking, just make sure that you're investing in quality companies,
• 25:41
  I think is really important. A lot of people feel scared about investing right now,
• 25:44
  but then a lot of people felt scared when markets were on the floor, you know, everyone's always
• 25:49
  scared. So like looking at actually what's happening at different times and history as the only
• 25:53
  dirty can go off. And look, when you're not going to get it right, even the best people in the world
• 25:57
  don't get it right. You know, it's my age and the pressure right now. Do I invest in it, don't
• 26:01
  tie it? Oh, I'm so glad there's on me. Yeah, imagine having, yeah, and billions and billions of
• 26:05
  client money and you have to make it cool. Oh, no, no. You know, you're like, do I invest my 20 pounds?
• 26:12
  Yeah. Yeah, yeah, yeah. It's so much easier. Do I invest my client's 20 billion?
• 26:18
  But also, if you don't invest in it and it does well, then you've got to answer to your clients like,
• 26:22
  why did you not invest in it? So there's so much to it. Coming up after the break,
• 26:27
  we talk about Berkshire Hathaway, which is the investment company that Warren Buffett used to run,
• 26:31
  but there's now got a new leader and he's making some mega, mega investment decisions.
• 26:36
  But first, we've got to work from today's sponsor. Something that we often get asked is whether you
• 26:40
  can actually invest ethically. It's such a common concern. Honestly, a lot of people think money is
• 26:45
  bad and so those human investing must be too. Yeah, I feel like pre-2000s, most investing focused
• 26:51
  entirely on profits and that was above planet people, all of those things, but things have changed
• 26:57
  now and it's so much easier to invest in a way that balances both financial returns as well as
• 27:02
  doing the right thing. And that's why we partner with Pathfinder because they make ethical,
• 27:06
  investing, understandable and accessible. Thanks to Pathfinder for making this episode of the
• 27:10
  Care of Weekly possible. Pathfinder asset management limited is the issue of the Pathfinder
• 27:14
  Kiwis ever plan. A product disclosure statement is available at Pathfinder.kiwi.
• 27:20
  So we're really, we've got a change of pace here. We're talking about a whole new industry and
• 27:25
  it's called AI. The reason that this is interesting is because Warren Buffett is the grand
• 27:32
  daddy of investing. He is just the OG hot buy and hold and he's retired after a very, very,
• 27:39
  very, very, very long stuff. Very, very, very, very, very long stuff. How old was he when he retired?
• 27:47
  Was this year, right? He's in his 90s. Yeah. So he's an amazing investor and he's, he's
• 27:52
  delivered incredible returns and Berkshire Hathaway is one of those businesses where people love it
• 27:57
  and it's done amazingly well. But it's also had a really signature investing style. So the reason
• 28:02
  that the story is super interesting is the person that's now taken over is a seemingly doing
• 28:08
  kind of the opposite, right? Yeah. He's been there like a couple of months and he has already made
• 28:13
  two massive investments and everyone's like, whoa, Warren Buffett, they they were sitting on
• 28:18
  remember that and we've spoken about this about 360 billion of cash. The most cash they've ever
• 28:22
  had and he's just gone boom, boom, this week and just dropped 10 billion into alphabet, which
• 28:30
  we'll get to in a second and about seven billion into a home builder in the US. So he's
• 28:36
  differently spending that cash quite fun. Major of the curve had 300 billion and we just gave it
• 28:43
  to someone else. I'm like, I actually think I'd be scared of you having that much money for some
• 28:48
  reason. I'm like, where would it go? No, you'd be like, where are you? Back? Back? She's like,
• 28:53
  anyone say to her? She's, oh, I'll bank balances defeated. I have a theory on this. Do you know how
• 28:58
  we've been speaking for ages? They've been sitting on all this cash and all of a sudden he's made
• 29:02
  these decisions. There is no way that he wasn't consulting talking to Warren Buffett and I almost
• 29:09
  wonder if it's a bit of a tactic. You know, like they were going to go and make these big investments.
• 29:13
  Of course, they researched them for a long time and now have made that decision when he's
• 29:18
  leading it so that probably it gets a bit of investor confidence because it will do well
• 29:23
  and then people are like, oh, he knows what he's doing. Okay, cool, I trust him. Yeah.
• 29:27
  Like, it's a perfect hand, the pattern, to be like, oh, what are you going to do?
• 29:31
  And everyone's lucky at home, but actually secretly everything he's decided to do is endorse
• 29:35
  by Warren Buffett, which is like so hard. Which is so cute. Warren Buffett, he's like,
• 29:39
  I want to go out with a bang and I want to do two last deals. He's like, so true. You take it,
• 29:43
  you take it Greek. Yeah. Is it Greek? Yeah. But the thing that people are looking at here and kind
• 29:51
  of a bit confused about is Warren Buffett and Berkshire Hathaway has always kind of been a bit
• 29:57
  inverse to technology. So they've always said, you know, in Warren Buffett has been like,
• 30:01
  that's a space I don't know. Like, I'm not going to jump into it. Even when they invested
• 30:05
  in Apple, everyone's like, whoa, but he was like, no, that's a consumer company essentially.
• 30:09
  That's why I like it. Got good brand, right? And now he has, they've invested a little bit
• 30:15
  in alphabet before. So there's Google and now they've kind of doubled down. And let's just remember,
• 30:21
  like, Google is up a ridiculous amount this year. So when we talk about that quote before
• 30:27
  around investing in a wonderful company at a fair price, people are like, hang on a second.
• 30:31
  And then the flow on question from that is like, well, what do you see or know that we don't?
• 30:36
  And therefore, should we be investing in alphabet as well? Because you have had such a consistent
• 30:41
  trick record. You're also a new CEO. You don't want to like rock the boat or like do anything
• 30:45
  outrageous. That's going to change the investment strategy. So yeah, it's like you're doubling down
• 30:52
  on alphabet and AI in particular, because alphabet is effectively an AI play now.
• 30:58
  I just don't think that that strategy of not investing in tech is going to work when it's
• 31:03
  almost like saying, I don't invest in the internet and then not changing your play at all
• 31:09
  and continuing to. But for 60 years, 60 years Warren Buffett has delivered like the best returns
• 31:16
  ever out of anyone. He's the world's best investor. That's a function of sticking true to your
• 31:22
  strategy, what you know, what you know does well, compounding over years after years after years,
• 31:28
  and not being flippant and changing your strategy when there's like new and exciting things happening
• 31:32
  and being like, you're taking the longest bets. You're going, what does the world look like in
• 31:38
  20 years time? And then our betting on AI. Yeah, alphabet. So I mentioned that
• 31:43
  Berkshire Catholic was investing 10 billion in alphabet. Alphabet is doing a capital race. So
• 31:48
  they're going to the market and being like, hey, we need, we need to earn more money off you
• 31:53
  as our investors. We need 80 billion to help finance AI infrastructure. So like data centers
• 32:01
  essentially, because they say they're seeing demand, exceeding supply. So they're seeing we just
• 32:07
  can't keep up. We need to go to the market. We need more money. We can't pay for this out of our
• 32:12
  out of our cash or out of our profits. We need we need 80 billion. And this is only the second time
• 32:17
  in 20 years that Google has even raised money. Whoa. Yeah. That's huge. Everything else has been
• 32:24
  funded by its cash and its profit and taken on debt, for example, but wow, that's actually massive.
• 32:29
  Yeah. What does that say? Is it basically the idea that they believe in it so much that they want
• 32:34
  to go fast? The confusing thing was it was buying back its own shares not that long ago.
• 32:40
  Like, why are we buying back your shares and not using that money to invest?
• 32:44
  Because buying back shares for anyone that doesn't know is basically like saying, we believe in
• 32:49
  this business so much, we want to own as much as possible. But also, we don't have any use for
• 32:54
  this cash right now except buying our own shares. Yeah. So it's like, yeah. That's an interesting
• 32:59
  point. Yeah. It's like, we've got this cash and we couldn't invest over here. We could buy this
• 33:05
  business. We could, but but there's nothing really. And the best return on that cash is to buy
• 33:11
  our own shares back and spend it that way. So then to now kind of reverse that and be like,
• 33:16
  oh, actually, we've found this investment that we need to make. It's just a bit weird, but
• 33:22
  because obviously to get money in to spend on AI, they have to make new shares. But then the
• 33:27
  cynic in me would say that when a company buys its own shares, which it was, you know,
• 33:35
  over 60 billion dollars of stock last year, that boosts up the share price because it's a
• 33:42
  green flag. It's like a great signal. So that increases the share price. And now you can do a
• 33:47
  capital raise at a much higher price because the share price is up here. I mean, that makes sense.
• 33:51
  That's what they've done. That's also like, I think that's been good. I mean, it's a bit like,
• 33:55
  I'd be not pissed off, but I'd be like, guys, come on. It's pretty obvious what you did.
• 34:00
  You know? Well, it's like, come on. Why didn't you just use that money? What a, I guess it's
• 34:04
  probably a good, good decision, good financial decision because the share price has gone out. Yeah.
• 34:09
  Kind of love that. It'd be worse if it didn't actually support the share price and the share price
• 34:13
  went down. And then you've spent this money, you've got to raise down it, yeah. So how much they
• 34:17
  raising? 80 billion. And 10 billion of that, but actually, I have the words, giving to them.
• 34:21
  Oh, okay. Okay. So they've obviously got a plan. Yeah. Are they going to tell investors what
• 34:26
  they're spending and what they're planning? It's to finance AI infrastructure investments.
• 34:32
  Could you be more value? Bloody hell. That's so interesting. No. Yeah. Oh, I really want to know,
• 34:38
  I wish, you know, it's so funny because I've been like reflecting on the curve weekly in general
• 34:43
  because in the not so just in future, we're going to be doing more news like this. And it just,
• 34:49
  I was looking at old episodes and you know, the sorts of things we used to speak about and reflecting
• 34:54
  on. Well, I was just thinking, I remember when you would talk about this stuff and I was so bloody
• 34:59
  bored and just had no interest in it. And I remember some of the things that you would talk about
• 35:04
  and you would say like, oh, it's so interesting because I get to, you know, listen to all the CEO's
• 35:09
  plans. And I'm like, oh my god, I'm falling asleep. But the idea of knowing what anthropic is saying
• 35:14
  that they'll be doing. Like, what is their big plan? What are they pitching? Or what is Amazon's
• 35:20
  or Alphabet's plan? Like, what do they pitch? I like, I love to know. Yeah. And like, the reason
• 35:26
  anthropic is coming to market and IPI is to raise money to spend on growth. That's why a company,
• 35:32
  most companies IPO, I know we spoke about lime and we spoke about them IPI-ing to pay down debt.
• 35:39
  But it's still, you're still raising money to do something with it. So it's like, it's the same with
• 35:44
  anthropic. They're raising money to spend on growth so that they can grow faster and reach
• 35:49
  more customers and roll out more products and all of that. So it's like, what are you doing now?
• 35:53
  Like, tell me your plan. Yeah. Because like, I was, you know, we don't even, let's not go back to
• 35:58
  anthropic. But I was thinking like, the amount of growth that they're almost saying they're going
• 36:02
  to see makes me think they're going into almost every industry. You know, like, they must be going
• 36:07
  into, they must be able to say we can disrupt basically every single industry with this money.
• 36:12
  Like, in terms of, I don't know, creating drugs that are going to be revolutionary. We can
• 36:17
  use this technology to do, you know, that must be how they're proven, the long-term.
• 36:21
  There will be investors that sell out as well. If the valuation of the business has gone up
• 36:25
  five times in a year, there will be founders and employees from the beginning that will be selling
• 36:30
  out, like, yes, Darryan getting a little bit off the table and being like, you know, there will be
• 36:36
  employees that have been there from day one that's probably going to be putting out.
• 36:40
  I don't know if I can buy some boats. Yeah.
• 36:47
  Um, let's find out a non-AI topic. Yeah.
• 36:50
  Jay Shetty. So, his on-purpose podcast, which is one of the world's most popular podcasts.
• 36:56
  They've got a billion lessons. I was about to say I cannot believe it's a billion.
• 36:59
  I can't wait for the day that we can say we've got a billion lessons.
• 37:02
  A billion? You'll be dead, I reckon, by the time that happens.
• 37:05
  Hey, ambitious. Sorry, but also, can we just say how weird is that to think that our podcast
• 37:09
  is going to be around more weird debt? Yeah. That's so weird.
• 37:14
  Isn't that so weird?
• 37:15
  To people can go back and listen to us talk for hours and hours and hours, bizarre.
• 37:20
  Anyway, so I went, I think I mentioned earlier in the podcast, I went to South by Southwest,
• 37:24
  and this was one of the things that came up quite a lot, just the idea of what is shifting in
• 37:29
  this industry. What it means for the media space in general, what it means for advertisers,
• 37:35
  what it means for, I mean, it's just basically what this signals to me is an enormous shift
• 37:42
  in the way that people are perceiving, podcasting, really.
• 37:46
  We haven't even told people what happened. I know. I hope there's sitting on the edge of their seats
• 37:50
  absolutely. So, getting to know. So, Jay Shetty has signed an exclusive video deal with Spotify
• 37:57
  and Netflix simultaneously. So, this deal is worth $100 million, and there was three other companies,
• 38:04
  which I'm like, baffled to know who they would be, bidding at the same time. So,
• 38:09
  he has just effectively jumped up to the same level as Joe Rogan and Alex Cooper right now,
• 38:14
  and as part of the deal, he's not allowed to have his videos on his video episodes on YouTube.
• 38:19
  YouTube, for context, is the biggest place for people to use to find watch and gay with podcast,
• 38:25
  which is odd because you would almost think that it was Spotify or Apple, but it's not.
• 38:29
  It's actually YouTube. So, the fact that he won't be on YouTube is a massive loss to YouTube.
• 38:36
  It's massive if you, to Google. Yeah. I mean, I think the interesting part here is the fact
• 38:40
  that Spotify and Netflix, who are essentially competitors, are fine to both be paying for it.
• 38:47
  I don't know what you took from that. There's any insight or thoughts, but I would have assumed
• 38:52
  he would either have to choose Spotify or Netflix. I mean, I hate to call it. I'm pretty sure
• 38:59
  I called it last year. Do you think they're going to buy it? No, I'm just a bit like, maybe.
• 39:03
  But what did you say? I can't remember. Was it that you thought Netflix would buy it? I thought
• 39:06
  it would be like a merger of mine. Yeah. And then I kind of thought throughout the year,
• 39:10
  it was like, well, no, Netflix is getting into podcasting. Maybe they'll just be like, just
• 39:13
  compete. He'd head. I think it just shows like both of them have such dominant reaches,
• 39:19
  like Spotify's got like 800 million users, right? And just what you can feed those users.
• 39:25
  And when you have that customer's taking us and all of that and that distribution,
• 39:29
  yeah, you've just got to keep, you've got to keep diversifying, right? Yes, you've gone into music.
• 39:33
  The next thing is this podcast, well, they're in podcasting, but with Netflix, it's like they were,
• 39:39
  you know, they used to have just every analysis content. Then they had their own content.
• 39:43
  Then they went into like games podcasting just such a natural next year.
• 39:47
  I don't think it's going to be called podcasting for much longer than podcasting.
• 39:51
  And this is what they were saying yesterday at the festival. It's just the idea that
• 39:54
  podcasting just shows now. And you should be expecting to see.
• 40:01
  I don't know. It was interesting. You know, Jamie Lang who has jam pop productions.
• 40:04
  Oh, yeah. He has newlyweds blah, blah, blah. There's a whole podcast. They are so funny.
• 40:08
  Yeah, they're so funny. I just find them hilarious. Yeah, they are so funny. Yeah.
• 40:12
  So and listening to him talk, I never thought I would say this, but I actually spoke to him afterwards.
• 40:17
  And I was like, if you just watch his content, you assume that he is
• 40:22
  the funny guy. And I was like, you're the brains of the operation. You're so clever and so creative.
• 40:27
  And I was like, actually really impressed with the way he was talking about the future of podcasting
• 40:30
  and shows and stuff. And he was sort of saying in the same way that when YouTube first started
• 40:34
  and everyone kind of could create, you know, you had TV and you had only a couple of shows.
• 40:39
  And then it went into like mass, like anyone could create anything.
• 40:44
  He was like, I think there's you're going to almost see like a consolidation again where there's
• 40:48
  like the ends up being less shows that are the big main ones. And he was like, you know,
• 40:55
  we're having conversations with like Disney and all these different businesses right now.
• 40:58
  And like, so basically the ones that are going to have the money to be able to grow,
• 41:02
  it's like race to the top kind of thing. Like Jason has been bought, Alex Cooper's been bought,
• 41:06
  but not all of them will be able to survive that. Well, it's like, it's so saturated, right?
• 41:10
  Yeah. And it's so hard to get sponsor dollars and like to get audience growth because there's
• 41:16
  so many podcasts now. So yeah, there will be a filtering of like the best survive. I also think
• 41:22
  what this also signals is just like how important audience reaches an authentic audience reach.
• 41:28
  Yeah, the fact that Netflix and Spotify are buying reach, you know, they're buying J-Shitty's
• 41:32
  audience essentially. I mean, there was the other thing that everyone was thinking about yesterday.
• 41:36
  It was just the idea that if you had money, what would you spend it on? And most people that
• 41:41
  have successful big brands are like, I would spend that on content creation. I would spend it on
• 41:45
  audience growth because or partnering with people that have big audiences. And this is the whole
• 41:50
  creator economy. The people that are going to rise and end up being the biggest business owners
• 41:54
  are the ones that have access to audience. And that's just because it's so hard to get people's
• 41:59
  attention. Like, even whoever's listening to this podcast right now, thank you for listening.
• 42:03
  Because it's a decent amount of your time. It's a really like intimate format and you're trusting
• 42:09
  them with your time and people are bloody busy and with so many podcasts everywhere. It's
• 42:14
  yeah, it's definitely it's such an interesting thing to see happen. And I also, yeah, I mean,
• 42:20
  they were also talking about just like how many live shows they're going to be from podcasts.
• 42:25
  And you're seeing like podcast shows pop up with, you know, 80 shows that are getting their
• 42:31
  audiences to come to the festival to see them live. The way that people are shifting in
• 42:35
  terms of how they engage with podcasts. It's a blurring of the lines. It's just content.
• 42:40
  It's just a content platform. Waters your what is your IP? What are you creating? But ultimately,
• 42:46
  it's yeah, it's not a podcast anymore. And so that what that also means is that way that people
• 42:50
  are spinning advertising and the way that people are looking at the different platforms to
• 42:54
  distribute. Yeah, people are choosing audience, which means that that's actually the most valuable
• 42:59
  thing. So the asset comes in audience, which is why Spotify and Netflix are buying these shows
• 43:05
  because they want that audience to only be on their platforms. Well, in the amount that Netflix
• 43:09
  spends on content, it's like billions of millions of dollars that you've got to spend to get growth
• 43:13
  essentially. So it's like you're buying content and they're buying audience reach. Can you imagine
• 43:18
  if your partner got a hundred million dollar deal? Like imagine if you're in a relationship like
• 43:22
  his wife. Yeah. Radee, like looks gorgeous. She just is just so amazing. She's got her own
• 43:28
  podcast, which if anyone hasn't listened, actually, I love, I think I actually like it more than
• 43:32
  her. It's called a really good cry. But imagine being a relationship with someone that has just
• 43:38
  had that deal. That's wild to me. I'd be like, well, we're in a relationship. So half of it's
• 43:43
  much. We do a recon middle. Yeah. Do you want to get married again? I don't want to be saying
• 43:47
  I don't want to get married again. I don't want to be saying I don't want to. Oh gosh. Yeah.
• 43:52
  No, quite quite outrageous. I hope he's got a good financial advisor. We did just want to quickly
• 43:57
  share. On Thursday, we're putting a podcast out with the amazing Ellen Joan Ford and I was
• 44:02
  such an interesting conversation. This was all about the tension between work and personal life.
• 44:06
  I think with the space that we're in and everything we've spoken about today in terms of AI,
• 44:11
  the biggest takeaway for me was just the idea of output versus hours and actually how people
• 44:15
  are being valued their time, their salaries. You know, like traditionally, we talk about, you know,
• 44:20
  your job is nine to five or nine to six, whatever it's actually like, should it be that? Should
• 44:24
  be based on output. So it was a really interesting conversation for anyone. But particularly,
• 44:29
  I think anyone that either is a mum or wants to be a mum, just you know, so many people go back
• 44:34
  to work and then have their salaries slashed because they are doing half the time. But generally,
• 44:40
  they're still doing the same output. So it was just it was an interesting conversation and that one's
• 44:44
  out on Thursday. Actually, we'll play a tiny snippet just to give you a taste of what it's like
• 44:48
  and what we speak about in this episode. What people deliver is more important than the
• 44:53
  hours that they put in. If we clear on the value that we are prepared to pay for that particular
• 44:59
  output, then that's the value exchange. We could have a person that we pay for hours and they take
• 45:06
  twice as long because they're not as efficient and weirdly will feel more comfortable about paying
• 45:11
  that salary, then we would about paying someone who can be more efficient and then go and do
• 45:15
  something else in their life that actually energises them and they come back to work in their
• 45:20
  own fire. We are quite literally encouraging under productivity. We as leaders are thinking,
• 45:28
  yeah, I feel more comfortable paying that salary if I know that they're there for 40 hours,
• 45:32
  but I feel less comfortable if they're there for 20. But why? They're doing it same amount of work.
• 45:37
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  And feel free to leave a comment to let us know what you thought about this episode because we
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• 46:15
  Okay, quickly, the curve was created to empower and educate you about investing, but we are not
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