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Updates From the #1 AI Investor: Leopold's NVIDIA & Anthropic Strategy · In the Loop AI

0:00
Josh: Leopold Aschenbrenner, that 24-year-old guy who invests in AI,
0:03
Josh: he's very clearly the best AI investor in the world.
0:06
Josh: There is word on the street that his notional position in this fund is now over $20 billion.
0:12
Josh: And Ejaz, we were looking at one of your posts from, what, a month ago,
0:14
Josh: and it was 13. So the fund seems to be doubling basically every quarter.
0:18
Josh: And we have some pretty serious and interesting updates on what Leopold has been investing in.
0:22
Josh: You'll note that in the last episode, we covered his portfolio.
0:25
Josh: He was actually short a company that a lot of people are familiar with,
0:28
Josh: the largest one in the world, NVIDIA.
0:31
Josh: And nobody could figure out why. He had over $9 billion worth of shorts on the
0:35
Josh: largest and hottest AI company in the world.
0:37
Josh: Today, we have some news that might actually uncover the reason why.
0:41
Josh: It comes in the form of a debt offering. NVIDIA is actually raising money,
0:44
Josh: which doesn't seem to make sense on the surface.
0:46
Josh: Why would a company as big as NVIDIA be raising what just closed as $25 billion
0:51
Josh: in cash when their margins in particular are so, so high?
0:54
Josh: So on the episode today, we're going to talk about Leopold's portfolio,
0:58
Josh: how he's doing so well, what he's looking forward to, and what he's positioning
1:01
Josh: himself to, to go next, but also what's going on with NVIDIA.
1:05
Ejaaz: So Leopold Ashenbrenner, for context, ex-open AI researcher,
1:10
Ejaaz: raised a fund about one and a half to two years ago. It was a small casual raise
1:14
Ejaaz: of $200 million, I believe.
1:17
Ejaaz: And since then, since his last 13F filings, the fund is worth $13.7 billion.
1:24
Ejaaz: And so everyone obviously wanted to know what positions he was taking,
1:28
Ejaaz: what his thesis was, what was the next major trade. Now, it's important to understand
1:32
Ejaaz: up until a month ago, Leopold was extremely bullish about everything AI,
1:37
Ejaaz: particularly picks and shovels.
1:38
Ejaaz: So we're talking about the NVIDIAs, the GPU makers, all that kind of stuff.
1:42
Ejaaz: And then a month ago, it was revealed that he wasn't especially bullish on the
1:47
Ejaaz: semiconductor landscape. He was still bullish on things like memory and power,
1:51
Ejaaz: those kinds of bottleneck constraints.
1:53
Ejaaz: And maybe he was bullish near clouds as well. But he wasn't bullish,
1:57
Ejaaz: the most valuable company in the world, NVIDIA.
1:59
Ejaaz: And we have a total of $9 billion worth of puts in NVIDIA, ASML,
2:03
Ejaaz: and Oracle. So these are companies that are key to the infrastructure boom,
2:06
Ejaaz: which is what has been heralded as the best and most certain trade in AI.
2:10
Ejaaz: So people started getting concerned. and they were like, is this the AI bubble
2:13
Ejaaz: popping? Like, we don't see any signs of this. NVIDIA is still selling so many GPUs.
2:17
Ejaaz: What could be the problem? And since then, we've uncovered...
2:22
Ejaaz: A few things. The major one being that NVIDIA just raised $25 billion in a bond
2:29
Ejaaz: offering from external capital.
2:31
Ejaaz: So what this means effectively is they're raising money outside of their balance
2:36
Ejaaz: sheet. So it causes the question, which is why on earth is the most valuable
2:39
Ejaaz: company in the world that has the most money that's making the most money that
2:42
Ejaaz: has the highest margins raising $25 billion?
2:45
Josh: In fact, they weren't only going to plan to raise, they were only going to plan
2:48
Josh: to raise 20 billion and they actually wound up raising 25 billion which was
2:52
Josh: more than three times oversubscribed and it's funny when in the last episode
2:55
Josh: that we were talking about this portfolio are we in a bubble
2:59
Josh: how do we know when the top is getting closer to being in we're like don't worry
3:03
Josh: about it all these companies are spending a tremendous amount of capex but they
3:05
Josh: have a huge amount of revenue to fund all that it's coming right off the balance
3:08
Josh: sheet this is the first time since 2021 in the case of nvidia where they're actually raising money
3:13
Josh: outside of the balance sheet they're not taking their money on the balance sheet
3:16
Josh: which i believe is about 12 billion dollars they currently have.
3:19
Josh: And that leads me to a few questions. It's like, Leopold is short,
3:23
Josh: NVIDIA is raising some debt, when it seems like they have infinite cash and infinite margins.
3:27
Josh: What's actually going on here? So IJAS, maybe you could help us unpack what
3:30
Josh: this deal actually was. This is a bond offering, which is not just a general
3:34
Josh: fundraise. It's a little bit different.
3:36
Josh: And at the end of the day now, NVIDIA now has 25 billion additional dollars
3:40
Josh: on their balance sheet for what I assume is a pretty low rate.
3:43
Ejaaz: So let me give you both sides of the story here.
3:47
Ejaaz: NVIDIA has around $13.7 billion on their cash balance sheet.
3:53
Ejaaz: So this is money that they could just spend to do whatever they want.
3:56
Ejaaz: So the question then is, why are they raising external capital?
4:00
Ejaaz: Well, the analogy is, think of you purchasing a house. Typically,
4:04
Ejaaz: most people would, if they have the money, they would still,
4:08
Ejaaz: take a mortgage out. Why? Because you can, you know, use your capital for other
4:11
Ejaaz: purposes, and you can just borrow money at a really cheap rate.
4:14
Ejaaz: Now, interest rates have been pretty cataclysmic for a while now.
4:19
Ejaaz: But if you're NVIDIA, the most valuable company in the world,
4:21
Ejaaz: that has the most valuable stock in the world, the most desirable stock in the
4:23
Ejaaz: world, hey, you could raise at pretty decent rates. And I've got the breakdown
4:27
Ejaaz: over here for the $25 billion bond offering.
4:31
Ejaaz: They've got bonds that range between two to 30 years. So it's effectively free
4:37
Ejaaz: money that they're raising at. The interest rates are almost nothing.
4:41
Ejaaz: It's almost as good as government yield bond rates itself, which is like the
4:46
Ejaaz: best kind of offering that you could potentially get.
4:48
Ejaaz: And there were 4x oversubscribed for people who wanted to help invest in this money.
4:54
Ejaaz: So $85 billion worth of capital wanted to kind of pummel into this $25 billion
4:59
Ejaaz: raise. So NVIDIA could just have their pick of the litter. Now,
5:02
Ejaaz: if you want to look at the reasons behind and why they're doing this.
5:06
Ejaaz: Nvidia's stated claim officially is, this is just financial bookkeeping.
5:11
Ejaaz: We wanna pay off and refinance some debt that we have on our balance sheet,
5:15
Ejaaz: which sounds familiar because Google did something very similar about three
5:21
Ejaaz: weeks ago, and then they did it earlier on this year in February.
5:23
Ejaaz: So you could take the stated claim that this is financial bookkeeping,
5:27
Ejaaz: but the other side of it is.
5:29
Ejaaz: Does it seem pretty coincidental that NVIDIA, Amazon, Google,
5:34
Ejaaz: and I think three of the other hyperscalers have all raised external debt financing
5:39
Ejaaz: in the last month and a half?
5:41
Ejaaz: And it's a mixture of equity selling, which is what kind of like Google's done
5:44
Ejaaz: just last week or three weeks ago.
5:47
Ejaaz: And it's a mixture of bond raises as well. So Leopold could be right in the
5:50
Ejaaz: sense that this might be marking the start of a bubble popping or coming down.
5:56
Ejaaz: The house of cards are coming down.
5:57
Ejaaz: If this is the sign of a levered bet or a levered raise. But right now,
6:02
Ejaaz: if you look at the financial structuring of this entire thing,
6:04
Ejaaz: it doesn't entirely say that.
6:06
Josh: That's what I'm thinking too, is I'm looking at Leopold's portfolio.
6:09
Josh: I'm like, man, $9 billion is a lot of money to be short NVIDIA.
6:13
Josh: And another thing that I found out as we were researching is on May 18th,
6:17
Josh: the board of NVIDIA actually authorized an additional $80 billion in buybacks
6:21
Josh: and raised their dividend from a penny to 25 cents per share.
6:24
Josh: So they multiplied the dividend by 25 times.
6:26
Josh: They pledged 80 billion dollars to buy back shares from shareholders and a company
6:31
Josh: doesn't really hand 80 billion dollars back to shareholders and raise their dividend 25x
6:35
Josh: in the same month that it borrows out of need so there are these two conflicting
6:39
Josh: things it's like well they're clearly not borrowing out of need because they're
6:41
Josh: actually giving back to the shareholders so the question why why are they doing
6:45
Josh: this well because it's cheap money and it seems like the way that this ai
6:50
Josh: pump this ai bubble is being funded is just slightly shifting to a new model because
6:55
Josh: everyone wants to be participating everyone wants to be involved in these capital
6:58
Josh: raises nvidia has recognized this they could do so even more cheaply by issuing
7:02
Josh: their own bonds than they can from going anywhere else so they're like hey
7:05
Josh: if we could take some money off the table we're going to do that and it seems
7:08
Josh: like nvidia is actually just doing just fine which leads us to the question
7:12
Josh: of like what is leopold actually thinking how is his
7:15
Josh: mind changed over time i mean you looked at the nvidia stock it hasn't been
7:19
Josh: doing great the one you were just showing on screen it's not like nvidia has
7:21
Josh: been crushing recently but it's still like five trillion dollars most valuable
7:26
Josh: company in the world i mean only down seven percent in a month is
7:29
Josh: nowhere, considering everything else has been pumping. But it's still like,
7:33
Josh: I don't know, it doesn't seem like it's doing that bad.
7:35
Ejaaz: So listen, I think that NVIDIA is not going anywhere. I think their products,
7:39
Ejaaz: their GPUs, and now the CPU line that they just opened up a few weeks ago is
7:43
Ejaaz: going to do overwhelmingly well. There is a surplus, an exponential surplus
7:47
Ejaaz: of demand for AI products.
7:49
Ejaaz: And there's only one main machine provider that can support that type of demand.
7:54
Ejaaz: And that is NVIDIA. So I don't think they're going anywhere.
7:56
Ejaaz: What I do think is the picks and shovel AI trade is extremely overcrowded.
8:03
Ejaaz: And that's what Leopold's most recent portfolio positioning tells us.
8:07
Ejaaz: Like, I mean, let's take a look at this, right? So as of their last 13F filing,
8:11
Ejaaz: they were pretty bearish on the semiconductor landscape,
8:15
Ejaaz: through the form of a short position or put position in NVIDIA,
8:19
Ejaaz: ASML, Oracle, and a few other infrastructure scale providers.
8:22
Ejaaz: But at the same time, Leopold was very long companies in the memory sector or
8:27
Ejaaz: in the power sector or in the neocloud sector iron is one of his biggest positions.
8:31
Ejaaz: And that since his 30 net filing is up 20 so like you know again he's hitting
8:35
Ejaaz: some nails on the head but he's bearish some layers of the semiconductor or
8:39
Ejaaz: infrastructure stack specifically and that tells me one very clear thing which is
8:44
Ejaaz: leopold isn't bearish um ai infrastructure i don't think he's calling it a top
8:49
Ejaaz: on the bubble he just thinks that the
8:51
Ejaaz: trade itself on picks and shovel is overcrowded and that money is going to rotate somewhere else.
8:57
Ejaaz: So if the question is, where is that money rotating?
9:00
Ejaaz: There's two answers. The most obvious answer is it's going to the next infrastructure
9:05
Ejaaz: bottleneck, which we've spoken about on previous episodes is power,
9:08
Ejaaz: it's memory, it's data center networking, it's stuff like that.
9:11
Ejaaz: We've spoken about this on previous episodes.
9:14
Ejaaz: And then there's this other secret investment that was uncovered a few weeks ago, right?
9:19
Josh: Yeah, this is the weird one for me. I was like, wait, this came out of left
9:22
Josh: field. You actually told me this yesterday. And I was like, no way that's true.
9:26
Josh: There's surely no chance that Leopold's Fund, Situational Awareness,
9:31
Josh: 20% of the fund owns Anthropic Equity.
9:35
Josh: Yes, the AI company that everyone knows and loves, Anthropic,
9:39
Josh: 20% of Leopold Asch and Brenner's fund is involved in Anthropic.
9:44
Josh: How do we know this? Well, it's not totally confirmed, but the Wall Street Journal
9:47
Josh: and a few other publications have apparently sources that are very close to
9:50
Josh: the matter that confirm this.
9:52
Josh: And it seems as if this is a huge wildcard that we were not anticipating in
9:57
Josh: his fund. Because when you publish these 13F filings, the way it works is you
10:01
Josh: just publish your public positions.
10:03
Josh: It doesn't have anything to do with privately held equity.
10:05
Josh: Anthropic, turns out, is a huge amount of privately held equity.
10:09
Josh: And that's where we get to this $20 billion expected valuation of his portfolios.
10:13
Josh: Because, I mean, 20% of the fund being in Anthropic, and he's been in it,
10:17
Josh: what, EJAS, for over a year now? Like he invested early 2025?
10:20
Josh: That's like, being invested in Anthropic is like dog years. Each year is like
10:23
Josh: seven. So a year in Anthropic feels like a tremendous return.
10:27
Josh: And that's a huge readjustment to his portfolio when we see this?
10:30
Josh: Because now it feels like we have a much more clear picture.
10:32
Ejaaz: Yeah. So the first time he invested either privately or through the fund in
10:37
Ejaaz: a VC investment in Anthropic was in March 2025.
10:41
Ejaaz: That was when Anthropic was worth $60 billion.
10:45
Ejaaz: Double digits. Now of Anthropic's recent valuation, they're valued at $965 billion.
10:52
Ejaaz: That is a 15x markup. And if you do the math, as we're showing on the screen
10:57
Ejaaz: today, his liquid portfolio, so that's the thing that's reported in the 13F,
11:01
Ejaaz: as of his recent 13F filings was worth $13.7 billion,
11:06
Ejaaz: with the anthropic stake that he supposedly has as reported by the Wall Street
11:10
Ejaaz: Journal, adds another $7 billion,
11:14
Ejaaz: bringing him to a total AUM of $20 billion. Now, if you're,
11:20
Ejaaz: how crazy this is. Bill Ackman, one of the most famed investors in the entire
11:26
Ejaaz: world who's been in this game for 30 to 40 years.
11:31
Ejaaz: His fund is worth just around $20 billion, Pershing Capital.
11:36
Ejaaz: Leopold's been in the game for about a year and a half.
11:39
Ejaaz: And this guy is 24 years old. He has zero, and I must emphasize,
11:44
Ejaaz: zero investing experience, right?
11:47
Ejaaz: But he's made some of the most amazing calls ever. And the craziest part about
11:51
Ejaaz: all of this, and I've said this on previous episodes, is that he gave us the
11:55
Ejaaz: entire thesis in a 65-page.
11:58
Ejaaz: AI essay about a year and a half ago when he started his fund,
12:02
Ejaaz: Situational Awareness, called Situational Awareness, that broke down his entire trade.
12:08
Ejaaz: He even described how the money will rotate from semiconductors and infrastructures
12:13
Ejaaz: specifically into other bottleneck constraints.
12:16
Ejaaz: And that's the trade that's playing out today. So it's just extremely impressive.
12:20
Ejaaz: And that tells me where the rest of the money is flowing. If he's bearish NVIDIA,
12:25
Ejaaz: money's going to power, memory, but also he wants to invest in the mines themselves.
12:30
Ejaaz: Screw the picks and shovels, invest in the mines, and Anthropoc is his favorite bet.
12:33
Josh: This seems like the trend. And I think this is probably a little bit ahead of his time.
12:37
Josh: Again as always but it seems like the new trend is pivoting away from the bottleneck
12:42
Josh: thesis over the last what 12 months or so it's been everyone's trying to find
12:46
Josh: the bottlenecks where are they it's in the precious metals it's in the memory
12:49
Josh: it's in ram it's in all these
12:51
Josh: these things that people perceive to be bottlenecks and it's true and that run
12:54
Josh: has happened but it seems as if those are getting close to
12:57
Josh: more fairly priced everyone kind of understands the business they understand
13:00
Josh: the market they understand the revenues that are projected forward and they
13:03
Josh: kind of have a reasonable valuation so a lot of that value has been captured
13:07
Josh: the next rotation is what we're interested in it's where does the money flow
13:10
Josh: after this as you mentioned land power shell kind of the physical infrastructure
13:14
Josh: this seems to be directionally correct
13:17
Josh: when we think about the companies that are most important moving forward when
13:21
Josh: you think about the things most critical to ai it's the actual physical build
13:24
Josh: out it's it's what xai has been doing when you look at xai the company or spacex
13:29
Josh: i should say which is now publicly traded
13:30
Josh: where does all of the revenue come from it has absolutely nothing to do with
13:34
Josh: rocket ships it's the ai build out look at the deal this time with anthropic
13:37
Josh: look at the deal this time with google those account for more than starlink
13:41
Josh: and starship and their entire satellite business combined there's clearly a
13:43
Josh: tremendous amount of value
13:45
Josh: a huge amount of demand and then the question now shifts to who are the people
13:49
Josh: that are building this okay spacex is the obvious answer spacex
13:52
Josh: I mean, after hours last night, he traded at $230 a share. That's $3.1 trillion
13:56
Josh: In value. And we're going to have an entire episode about SpaceX this week because
13:59
Josh: my God, what a run. They just closed the cursor acquisition.
14:02
Josh: They're now valued at $3 trillion.
14:04
Josh: Elon made more money in a day than Warren Buffett did in his whole career.
14:06
Josh: So that is a whole separate thing. But what are they best at?
14:08
Josh: They're best at that hardware infrastructure, at developing the machines that build the machines.
14:13
Josh: And that is where we think, based on Leopold's direction, based on just general
14:18
Josh: trends, that's where the money heads to. So what does that actually look like
14:21
Josh: Ejaz physically manifest? Who are the companies involved?
14:24
Josh: Who is there at the rotation ready to just receive this hot ball of money that's flowing around?
14:28
Ejaaz: Yeah, so it's a lot of the unsexy infrastructure companies, as you mentioned.
14:33
Ejaaz: One popular name that's been passed around over the last month is Marvel.
14:39
Ejaaz: Marvel is the company that Jensen Huang went on stage at Computex,
14:43
Ejaaz: which is like a major AI conference two weeks ago in Taiwan.
14:48
Ejaaz: And he said, this is the next trillion dollar company.
14:51
Ejaaz: Three months prior to him making that statement, NVIDIA had made a one and a
14:55
Ejaaz: half billion dollar investment in Marvel.
14:57
Ejaaz: I don't know where the lines are in terms of like insider trading or market
15:01
Ejaaz: manipulation at this point, but the stock did pump 70% subsequently after he made that statement.
15:06
Ejaaz: I think it's easy to call a top on AI infrastructure right now.
15:12
Ejaaz: And if you think about previous financial crisis, like in 2008,
15:18
Ejaaz: there was a lot of levered positions. There was a lot of financial and market manipulation.
15:23
Ejaaz: We don't quite see the same here yet.
15:27
Ejaaz: And I'll tell you what the distinct differences are. Number one,
15:30
Ejaaz: there are people paying for the products that these companies are creating.
15:34
Ejaaz: So there are real customers buying the products. Back in the dot-com boom,
15:38
Ejaaz: back in the financial crisis, you don't really have this. And then the second thing is.
15:43
Ejaaz: We physically, by the laws of physics, can't lever up right now because we're
15:48
Ejaaz: constrained by human capital.
15:51
Ejaaz: What I mean by that is no matter how much money you raise or throw at the thing,
15:56
Ejaaz: you can't build data centers fast enough. You can't scale memory chips fast
16:01
Ejaaz: enough. You can't build the power lines and scale the energy grid and the infrastructure fast enough.
16:06
Ejaaz: We don't have enough men on the ground. We don't have the capacity to do that.
16:09
Ejaaz: There are laws, regulations, and a ton of red tape that is currently blocking you.
16:14
Ejaaz: So what you have here is an advantage, in my opinion, which is you can view
16:19
Ejaaz: where the money's gonna go, right? So you think that the picks and shovels trade
16:22
Ejaaz: is overtraded or it's overcrowded.
16:24
Ejaaz: That money's gonna flow into power. It's gonna flow into data networking like
16:28
Ejaaz: Astero Labs. It's gonna flow into a bunch of these different companies.
16:30
Ejaaz: And so you need to start thinking, hmm, okay, when will these contracts start to be materialized?
16:35
Ejaaz: When will these chip fabs end up being created? When will SpaceX's rockets start
16:40
Ejaaz: being launched into space, releasing his AI-1 satellites and harvesting the
16:44
Ejaaz: sun's energy to train AI models?
16:47
Ejaaz: What is that timeline? And then the bet I'm taking at least is like I'm investing
16:52
Ejaaz: accordingly based on that.
16:53
Ejaaz: Again, not investment advice, but I just it's how I generally see the money
16:56
Ejaaz: flowing because it's how we've seen it flow from general AI stocks into the
17:00
Ejaaz: semiconductor infrastructure trades, which we've seen over the last year and a half.
17:04
Josh: And if we scroll down a little bit in this artifact we we see that story playing
17:07
Josh: out in his portfolio where it shows
17:09
Josh: the ownership stake that he has on a relative basis the number one category
17:13
Josh: what is it it's power it's energy second to that it's the memory and then it's
17:17
Josh: the the clouds and the gpu miners it's the actual physical infrastructure he wants to
17:22
Josh: own core weave the neo clouds he wants to own the the miners who have switched
17:26
Josh: over to clouds he wants to just own that physical infra because that's where
17:29
Josh: that the true bottleneck is and so sure there's smaller parts along the way.
17:33
Josh: Like you mentioned, the actual build out, the actual hardware,
17:36
Josh: the physical manufacturing of these data centers is such a challenging thing.
17:41
Josh: And it's the biggest bottleneck, if anything, just to get the permits to go build it.
17:44
Josh: Who's solving this problem? Well, SpaceX is trying to put them into outer space.
17:48
Josh: Who's solving the human problem? Well, Tesla is trying to build humanoid robots.
17:50
Josh: But both of those things are a pretty long way out. So in the intermediary,
17:53
Josh: there's a lot of opportunity in white space.
17:55
Josh: And that's what he's going for. So as we start to wrap up this episode,
17:58
Josh: there's like one last thing I think we probably want to mention,
18:01
Josh: which is the subtle nuances that exist in his portfolio that I think are a little
18:05
Josh: surprising and we didn't highlight before.
18:07
Josh: For anyone who's looking to go a little bit deeper, a little more alpha,
18:09
Josh: a lot of it comes in optical and like kind of lower down the stack technology.
18:15
Josh: Ejaz, I know you've been in the weeds about this. How does it work?
18:17
Josh: What is his position? What is his thinking around, I guess, optics in general?
18:22
Ejaaz: Well, if you just generally look at his portfolio position that we're showing
18:24
Ejaaz: on the screen here, CoreWeave and Iron are basically some of the top neocloud providers.
18:30
Ejaaz: So what I mean by that is think of Amazon Web Services, like they create cloud
18:34
Ejaaz: services for any internet company that wants to create a thing.
18:37
Ejaaz: That's what these companies do for any AI company. They have the GPU infrastructure,
18:41
Ejaaz: they set it up for you, they do all the networking such that you don't need
18:44
Ejaaz: to focus on it. You can just train your models, get access to compute,
18:47
Ejaaz: and don't worry about any of the other kind of stuff.
18:50
Ejaaz: CoreWeave and Iron have been Leopold's biggest positions since he started the
18:54
Ejaaz: fund, or he's had very concentrated positions, and they have provided him the biggest returns.
18:59
Ejaaz: Now, I think it's worth pointing out that he still has the biggest positions
19:02
Ejaaz: focused in these two companies. In fact, he's privately invested in a company
19:06
Ejaaz: called Core Scientific, which helps unlock a lot of Core Weave's infrastructure.
19:12
Ejaaz: Provision, which means that he's effectively taken a levered bet on CoreWeave.
19:16
Ejaaz: And the fact that he still has major positions in these companies tells us that
19:19
Ejaaz: that trade, in his opinion, typically isn't over yet.
19:22
Ejaaz: And then if you look at cores and light, these are all optical fiber providers.
19:27
Ejaaz: Now, if you want to understand what that means at a very basic level,
19:30
Ejaaz: typically if you need a semiconductor or GPU chips to speak to each other,
19:34
Ejaaz: requires like a lot of copper wires. And at some point when you have so many of these GPUs,
19:40
Ejaaz: copper wires get overheated. There's a lot of heat resistance.
19:42
Ejaaz: You lose a lot of energy. It becomes extremely inefficient. You know what isn't as inefficient?
19:47
Ejaaz: If you start using optical fibers. And that is kind of like the next leap,
19:50
Ejaaz: the next iteration to build data centers, to network and connect these GPUs,
19:55
Ejaaz: which will allow much quicker data transfer.
19:57
Ejaaz: That's much cheaper, much more cost efficient. And you can end up making more
20:00
Ejaaz: money on the inference or the training compute that you provide.
20:03
Ejaaz: That's another, it's very infrastructure heavy is the point that I'm making.
20:06
Ejaaz: So he's invested in those companies and invested in them at the power level
20:09
Ejaaz: as well. And I think, you know, it's very unsexy to say and talk about,
20:13
Ejaaz: but that is inevitably where the money is falling right now, in my opinion.
20:16
Josh: Yeah, the copper thing was interesting for me because I learned how critical
20:19
Josh: copper has been recently.
20:21
Josh: For a lot of the close data transfer, copper is the only material that anybody wants.
20:27
Josh: And the only time you stop using copper is when it becomes unviable.
20:30
Josh: When you have to transfer data over too long of a distance, or like you mentioned,
20:33
Josh: it gets too hot that's when you switch over to fiber but the combination of
20:37
Josh: these two seems to be all that anybody wants so it's been interesting watching the copper trade
20:41
Josh: as well even though leopold's not really invested in oh yeah you got the copper
20:44
Josh: futures pulled up copper if you go to that one-year chart it's probably looking
20:47
Josh: pretty strong yeah it's like a very strong
20:50
Josh: commodity here because everyone needs it that is the the single most important
20:55
Josh: critical element when transferring high bandwidth data over a very short distance
20:59
Josh: but fiber is the next one so that's been an interesting thing to watch play
21:01
Josh: out i think the materials play is always interesting that is the the base of
21:06
Josh: all base layers is like what is the core material that goes in in order to get intelligence out
21:10
Josh: copper's one of them of course lithium there's a whole bunch of them i think we
21:13
Ejaaz: Need to do uh we're due for that episode material episode josh i i think we need to do this.
21:18
Josh: Um we should go down there because you know what leopold hasn't made his way
21:20
Josh: down there yet and maybe we could front run him for the next rotational thesis
21:24
Josh: we could go all the way down to the bottom of the stack we could go visit the
21:27
Josh: copper mines see how they're making all this stuff happen
21:29
Josh: but i think that is generally speaking the next rotation is from these perceived
21:34
Josh: smaller bottlenecks into the real hard thing which is the hardware and building
21:39
Josh: out these large data centers
21:41
Josh: And whoever's capable of building out the data centers will collect all the
21:44
Josh: money. We just saw what happened with SpaceX, how much money they were able
21:47
Josh: to make because of how in demand these data centers are to have them online.
21:51
Josh: And anyone who's capable of spinning them up, of producing enough,
21:55
Josh: of producing power GPUs. If you could create GPUs with power,
21:58
Josh: you are going to make all the money. And that's kind of where Leopold's at.
22:01
Josh: I guess in summary, we're not in a bubble.
22:04
Josh: Leopold has rotated, should probably still copy trade. Is that right? Does that sound okay?
22:09
Ejaaz: Yeah. Yeah, I'll admit, when I read his 13F, I was like, you're bearish the
22:15
Ejaaz: most valuable company in the world that has like demand projected into 2029.
22:19
Ejaaz: Like that is the worst take ever.
22:21
Ejaaz: And now I see this raise and I'm like, wow, if Nvidia continues to raise external
22:25
Ejaaz: debt, sell equity potentially in the future, if this trend continues,
22:29
Ejaaz: Leopold might be right again.
22:31
Ejaaz: And his portfolio will eclipse the best traders and the best investment funds in the world.
22:36
Ejaaz: I don't know, the guy keeps winning and it's very impressive to see.
22:39
Josh: Yeah. So, I mean, here's the thing is he's never needed to sell anything.
22:43
Josh: Dude's just been long only his whole life. So we'll see how,
22:46
Josh: like you talk about, we talked about Bill Ackman earlier in this episode and
22:49
Josh: dude's been around for 30 years and turns out being around for 30 years is actually
22:52
Josh: harder than making like a 30X.
22:53
Josh: If you can actually sustain this growth, if you can learn how to push the sell
22:57
Josh: button, learn how to kind of hedge against risk, we're starting to see that.
23:01
Josh: I mean, those $9 billion in shorts, he's not actually exposed
23:05
Josh: with $9 billion of cash sitting there short that is through options that is
23:08
Josh: through some leverage so it's
23:10
Josh: not a direct one-to-one short but it's fascinating to watch we will see
23:15
Josh: i am going to continue copy trading the boy leopold because dude has just been
23:19
Josh: correct he is just not wrong so of his entire
23:22
Ejaaz: Portfolio josh what is the one stock that you'd be buying from him.
23:26
Josh: I like the energy stocks i'm a big energy guy i think no matter what even in
23:29
Josh: the case that ai demand slows down energy is still very much in high demand
23:34
Josh: and And the demands of it from the general world are going up only.
23:40
Josh: So even in the absence of AI, we need more energy. We need more electricity.
23:44
Josh: Bloom Energy, a lot of companies that are building electricity throughput,
23:47
Josh: I think, are the ones that I'm most excited about because they seem to be the
23:51
Josh: most hedged. What is the singular trend that is not going to stop no matter
23:55
Josh: what is our demand for energy, electricity, and power?
23:59
Josh: And companies like Bloom Energy deliver on that. So that's the companies that
24:02
Josh: I'm most excited about being long in. when I invest it's on a very long time
24:05
Josh: frame I don't really like to trade much so that's why and that's kind of how
24:08
Josh: I think of things what about you do you have any favorites
24:10
Ejaaz: I uh this is a cheat answer but it's wherever the intersection of what Jensen's
24:15
Ejaaz: investing in and whatever Leopold is investing in so the company that I'm like,
24:21
Ejaaz: copy trading is Marvel, which isn't something that Leopold currently owns,
24:26
Ejaaz: but it does sit very firmly in his optical fiber and power investment bet.
24:30
Ejaaz: And it's the one that Jensen put $1.5 billion behind. I've just noted that whatever
24:35
Ejaaz: Jensen invests in via NVIDIA, whether it's Intel, CoreWeave,
24:38
Ejaaz: or whatever it is, has just gone up only.
24:41
Ejaaz: And so that's currently where I'm at right now. I own some CoreWeave as well,
24:44
Ejaaz: which both Jensen and Leopold have been extremely bullish.
24:47
Josh: Home so dude marvel up 270 in six months i think this is a good pro tip when
24:53
Josh: people like jensen when people like trump they say go buy this stock
24:56
Josh: you should probably go buy it it's paid off in pretty big ways like intel is
24:59
Josh: up how many multiples from the time he bought it marvel is up how many multiples
25:03
Josh: from jensen it's like these guys know what they're talking about or at least
25:06
Josh: they have the ability to influence the outcomes of these companies and in that sense
25:10
Josh: it has been a very wild ride i hope it continues
25:12
Josh: i hope this keeps going it seems like it's probable to keep going
25:15
Josh: i think we're all still long we're all still pretty optimistic and excited and
25:19
Josh: we'll just continue to evaluate day by day
25:21
Josh: coming up next is a spacex episode which i think we're very excited about spacex
25:25
Josh: has been the biggest ipo ever they just closed their deal with cursor and there are a lot of new updates
25:31
Josh: and interesting takes i believe on how to navigate this ipo how the unlock schedule
25:37
Josh: is going to work where all the shares are and and how this is going to play
25:40
Josh: out over the next six months i think is something a lot of people may be interested
25:43
Josh: so that one's coming up next
25:45
Josh: any final thoughts before we wrap up here on leopold portfolio update
25:49
Ejaaz: I'm curious about the skeptics that are listening to this that think that everything
25:54
Ejaaz: we've just said is incorrect and might potentially be wrong um tell us where
25:59
Ejaaz: we're wrong like i'm genuinely curious like i've i stared at the 25 billion,
26:04
Ejaaz: nvidia raised news yesterday and i was like i want to hate on this but,
26:09
Ejaaz: Look at it, looking at it financially, this seems like a sound thing.
26:13
Ejaaz: Like, why wouldn't you raise debt, like risk-free money? Like that makes complete
26:16
Ejaaz: sense. Like borrow other people's money and spend that versus like selling your
26:19
Ejaaz: own equity. Obviously that makes sense. Keep more equity, earn more money in the future.
26:23
Ejaaz: But if there's something that we're missing, if there's a pattern that you're
26:25
Ejaaz: seeing that we aren't seeing, that we haven't spoken about, leave us a comment,
26:29
Ejaaz: DM us, do whatever you can to get in contact with us.
26:32
Ejaaz: And then if you'll listen to this as well, and if you enjoyed this episode,
26:35
Ejaaz: if you're one of the majority that enjoyed this episode, please make sure you're
26:39
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26:42
Ejaaz: Do the same on Spotify. Do the same on Apple Music or wherever you're listening to us.
26:46
Ejaaz: We also have a newsletter that goes out twice a week. We put out an essay.
26:49
Ejaaz: That's the first essay of this week is coming out tomorrow. And then we're going
26:53
Ejaaz: to have the five weekly highlights that we always do at the end of the week.
26:57
Ejaaz: We are doing anything and everything to keep you up to date with everything
27:00
Ejaaz: that's going on with AI. And with that, I believe the episode's over. It's done.
27:05
Josh: That's it. Well, thank you all so much for watching. And yeah, let us know.
27:09
Josh: Share with your friends if you enjoyed this episode leave a comment and yeah
27:13
Josh: I think that's everything so thank you so much for watching as always and we
27:15
Josh: will see you in the next one
27:16
Ejaaz: See you guys.