Latest / The Curve / TCW45: AI’s booming, fashion’s getting faster and crypto’s doing it dirty.

Transcript

TCW45: AI’s booming, fashion’s getting faster and crypto’s doing it dirty. · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can't afford it. Help me, I ain't poor.
• 0:15
  Hey Sophie, I'm gonna go to Vic, you're back in New Zealand. I'm on the other side of the
• 0:20
  world, how busy is that? I know, it's acting weird. How weird are planes? You know, you can just jump on
• 0:26
  and be on the other side of the world. Did Vic had her, like, leaving things like birthday
• 0:30
  over here before she left? And then I kind of forgot, I knew you were leaving, but because Saturday
• 0:35
  was a bit of a write-off, I sort of forgot that you were going first thing on Sunday. And then when
• 0:39
  I went to message you, I'd be like, oh my god, have a safe flight, you were already in the air.
• 0:42
  I was like, yeah, we're so weird, because normally we'll work together. I don't know, it's
• 0:49
  straight. Yeah, it must my arm. I know, how was the flight? Oh, so so fast before the record,
• 0:57
  how was your flight? And I was like, just you wait, babe, just you wait. It took me 48 hours to get
• 1:02
  from London to Auckland. 28. I have never experienced such a shit show in my life. I got into my bed
• 1:10
  at home midnight Tuesday night and I was just like, hello, yeah, I am home. So I left London
• 1:18
  Sunday morning, flew to Singapore. My flight from Singapore to Auckland was cancelled,
• 1:23
  but that was after a 10-hour stopover and then a four-hour delay. And then it was cancelled.
• 1:30
  Oh, no. So I had to go say night in the hotel and so you could have gone 14 hours earlier.
• 1:37
  I could have gone, yeah, I could have gone, they just kept delaying it and then I was just like,
• 1:41
  oh gosh, that's so shit. And there was a flight to Christchurch, which is in the South Island
• 1:46
  and I was like, oh no, I know my flights went delayed, but I don't want to go to Christchurch.
• 1:51
  I'll just wait for my Auckland flight. And I was like, I wish I just jumped on that flight.
• 1:55
  But when flights get cancelled, everyone's scrambling to book the next flight.
• 2:00
  And it was quite interesting, like, human nature. Everyone's like, have you got on one?
• 2:04
  Oh, have you got on one? Are you going to go to Sydney? Yeah, all these strangers, like,
• 2:07
  band together to try and like get on. It's quite funny. But at this point, I was exhausted.
• 2:12
  I was in tears. I was like, I just want to get home. And no one's awake in New Zealand.
• 2:16
  I couldn't get hold of the airline and I was just sitting there absolutely exhausted and jet lagged
• 2:23
  and I was just like, I just want to get home. I don't want to go to Australia and then have to
• 2:26
  wait for another flight. Anyway, I managed to get a Singapore Airlines flight the next day.
• 2:32
  Are you having to pay for this? Like, is this on top of your flight you've already paid for?
• 2:35
  So this, yeah, so this cost me $2,000 US dollars for one leg from Singapore ship for one leg.
• 2:42
  Yeah. But at this point, I was like, I would pay anything. This is for economy as well.
• 2:46
  I'm not paying like, this is just, I would hold onto the wing of the plane to get on.
• 2:54
  Honestly. But I think the key thing was, and I was sitting there at my witsend and I was like,
• 3:00
  look at the positive side. You don't have to be home for anything. You're not missing a wedding or
• 3:04
  a funeral or anything like that. You have the ability to pay for a flight because you have an
• 3:09
  emergency fund exactly for these situations. You have travel insurance. So it'll be covered.
• 3:15
  And there would have been people there that wouldn't have been in my situation that literally
• 3:19
  would have had to scramble around for a cheaper flight or call someone because I don't have the money
• 3:24
  or whatever. I don't know. I was just saying they're going, you know what, it's not the end of the
• 3:27
  world. You will get home. Did your flight, the 2000 US one, will that be covered by insurance?
• 3:34
  Yes. Yeah. Why, though? Because I had travel insurance because my flight was cancelled.
• 3:38
  So it wasn't like they were moving it. It was fully cancelled. It was fully cancelled, yeah.
• 3:42
  All these other flights are flying in and out and they set it with cancelled due to thunderstorms.
• 3:46
  I was like, hey, there's a lot of other flights that are flying in anyway. Oh my gosh.
• 3:52
  And it's funny. I had this list of stuff to do on the plane.
• 3:55
  I was about to say, did you get your stuff done? But like before she left, I was like,
• 3:58
  yeah, it's all my list to do. I'm doing it on the plane. But she said it about like everything.
• 4:02
  She was like, yeah, that's all my plane list. I'll be doing that on the plane. I was like,
• 4:06
  oh, she's going to be a very proactive flight home. I did the first leg and then as the tiredness
• 4:13
  and jet lag said in and the drama of the flights that kind of took priority. I was just like,
• 4:19
  oh my gosh, I'll wait. I'll do this when I get home. But yeah, it was not the most productive.
• 4:23
  But the intention was there. It's such a nightmare. Yeah. Oh, well, at least your home and how's your
• 4:28
  birthday? Like the second celebration, Vic purposely booked her flight so that she could be home for her
• 4:32
  birthday twice. So she had a birthday in London and a birthday in Auckland. I was sitting in
• 4:38
  Changi Airport in Singapore and I was like, I am not having my birthday in an airport. I am
• 4:44
  getting home. Even if I have to swim, I am not spending my birthday in an airport. I love that
• 4:50
  you love your birthday. So did you make your home in time? I got home about 1 a.m. on my birthday.
• 4:55
  So in the Uber, I was like, woo, it's my birthday. But no, it's so nice to be home. Nice and warm
• 5:00
  and sunny. Oh yeah, and me so. Oh my god, where is she? Oh my god, how was it being reunited
• 5:06
  with your daughter? Sit down. Sit down. Good girl. Did she recognise you? 100%. I'm unforgettable.
• 5:13
  She's unforgettable. So it hasn't just been a shit show in my life. It's actually been a
• 5:19
  shit show in the AI world. Oh no. How bad. So the company that owns ChatGPT is called OpenAI.
• 5:27
  And now this is a private company. It's one of the largest private companies, meaning it's not
• 5:32
  listed on the stock exchange. And so it's worth about $90 billion. And Microsoft, I know this.
• 5:40
  Microsoft owns a portion of it. Yes. Well done. Yes. So Microsoft owns 49%. So just under half.
• 5:46
  And during the week, the board at OpenAI kicked out the CEO. So he was effectively fired.
• 5:54
  And this is what boards can do. A board is effectively a group of people that shareholders
• 6:02
  vote in to control the company. And their role is to govern the company. Make sure that companies
• 6:08
  aren't taking too much risk. And one of their key roles is to hire and fire the CEO. And so
• 6:16
  this is what the board did. And it was a huge, huge shock because the main guy, the CEO of OpenAI,
• 6:22
  his name Sam Altman, is almost like the AI king. Like OpenAI and ChatGPT is kind of the pinnacle of
• 6:28
  AI at the moment. You know, it's a household name. They're really, I guess, commercialised AI
• 6:33
  in a sense for a lot of people. Why did they get rid of him? What did he do? So this was a thing
• 6:38
  they haven't actually said, oh my god, scandal. Yeah. So anyway, but it was a really shocking,
• 6:43
  I guess, kind of twist. And what happened was then the CEO of Microsoft was like, hey,
• 6:48
  come over here. We've got a job for you. And so they hired him no way to join Microsoft.
• 6:55
  And now this has given Microsoft this huge edge in its AI development and growth strategy.
• 7:00
  Has the share price just gone up? Yeah. So Microsoft share price went up. Obviously, OpenAI is not
• 7:05
  public. So it's share price hasn't moved as such, but the value of the business would have gone
• 7:10
  down because you lost one of your key people. And then what followed, this is honestly like
• 7:14
  desperate house. This is so scandalous. Yeah. 700 of OpenAI's employees. So they've only got
• 7:22
  770 staff. So nearly 90% of their staff said we're going to leave if the CEO leaves. So there's
• 7:29
  literally no company. Oh my god, what happened? I really want to know. I was trying to do some
• 7:34
  thing. And I think it's off the back of they're trying to have a profitable growing business
• 7:40
  while also giving AI to the masses. And I think it takes a lot of computing power and a lot of
• 7:47
  energy to to use chat GPT. And they've had to limit the number of people that can use it because
• 7:52
  of how much power it takes. And so I think there's probably a, sorry, a disagreement in strategy
• 7:59
  in terms of a business. That's the usual reason that a CEO gets fired is that, you know,
• 8:03
  they want to take the business one way and the board is like, no, that's too risky, for example.
• 8:07
  It would have been a disagreement along those lines, but anyway, they're the fact that he's drawing
• 8:11
  Microsoft and all the staff, pretty much all the staff at OpenAI, like we're going to walk two,
• 8:17
  has now made shareholders are like, we're going to get rid of the board because the board has made
• 8:22
  a ridiculous decision to fire him. And this is happening daily. The latest is that he is now back
• 8:29
  at OpenAI. Oh, he's gone back. He's gone back, but the board is being what we call kind of overturned.
• 8:35
  So the board is getting fired by shareholders. So there's been a huge turn of events.
• 8:41
  I cannot believe that. I would love to know what happened behind the scenes.
• 8:45
  I know. I'm going to imagine your ego if you got kept down. But usually it's those people like
• 8:50
  Elon Musk and Steve Jobs who have these audacious goals or these that there's a strive to create an
• 8:58
  amazing business, but not necessarily a profitable one. And that is what drives earnings per share,
• 9:03
  share price growth, which is what shareholders are concerned with. So there's always this kind of,
• 9:08
  it's like hilarious between what people want in a way. And don't get me wrong, there's some
• 9:12
  shareholders like we don't care about making a profit, just grow the business. But at the end of the day,
• 9:17
  kind of what grows the share price is earnings growth. So if a company is making loss after loss,
• 9:23
  yeah, eventually the board has to be like, hang on a second, the CEO is doing a shit job,
• 9:28
  see you later, we can get someone better. Wow. So sorry. So basically what's happened is they
• 9:34
  said to the CEO, you're out, you're done. And then all the employees were like,
• 9:38
  oh, if he's leaving so away, which by the way, side note, imagine how stoked you'd be if I know,
• 9:44
  basically every single employee like 700 people were like, nah, it's kind of cool. I love that story.
• 9:48
  Do you think they'll ever bring it like release or talk about why they decided to do that?
• 9:53
  Like, is that could that be public knowledge if it's a private company?
• 9:56
  My understanding would be very similar to Steve Jobs in an Elon Musk situation,
• 10:01
  where OpenAI and AI in general is going to change the world. But most of the time, you can't change
• 10:07
  the world by operating a profitable company. Does that make sense? So I feel like the CEO at OpenAI
• 10:14
  would have been like, we need to just grow and grow and grow. And in order to change the world,
• 10:18
  we can't be focused on profits right now. And the board was probably like, you're taking too
• 10:22
  much risk, because their main thing is about risk. You're taking too much risk. You need to chill
• 10:29
  out effectively and make this business profitable if it's going to succeed. So fascinating.
• 10:35
  Nine times out of 10, it is differences in the outlook of the business.
• 10:39
  Yeah. And what are you trying to achieve? Because of course, the person that's worried about
• 10:42
  the revenue and profits is probably looking at the numbers being like, shit, shit, shit,
• 10:47
  whereas he's like, big picture, blue sky thinking. Totally. Yeah. So very similar situation is in
• 10:53
  the video. You know that company that we spoke about a while ago, they make chips that are used
• 10:57
  in AI products. Yeah. So this stock was one of the best performing stock in the S&P 500 this year.
• 11:03
  It's up 245%, which is massive. Anyway, they had their results and they just blew the lights out.
• 11:10
  There was expectations of revenue growth and they just blew them out of the park. They're
• 11:13
  revenue is up over 200% and they're projected to deliver even faster growth. Like it's just insane
• 11:21
  what this company has produced. And it's writing that AI wave. And I think this kind of comes back to
• 11:27
  the initial story that we're talking about me like, do kind of have to run the whole AI boom.
• 11:32
  It is a boom. I guess there's just like a massive tidal wave at the moment of AI. And it's really
• 11:38
  an investing theme at the moment, but also be wary because that does mean there is huge expectations
• 11:44
  for these companies to deliver. And the video's share price actually went down after this result,
• 11:48
  because even though it produced a really, really good result, it wasn't as much as people had
• 11:52
  expected. People get greedy. I guess like a good way to do it though, if you're not wanting to just
• 11:56
  pick what's going to be the best biggest AI company would be looking at ETFs, right? Definitely.
• 12:01
  Yeah. Because you never know. Well, it's not a space that I know well enough to be able to pick
• 12:05
  who's going to win and who's not. But I know with pretty good certainty that this is overall
• 12:10
  an investing trend that's going to probably be around for a while. So
• 12:14
  and something I want to get exposure to. But like you said, I don't know necessarily which
• 12:18
  for specific companies are going to do well. So yes, an ETF is a great idea, Sophie.
• 12:23
  Where can people look up ETFs if they're wanting to have a look for that? They can just google
• 12:27
  go to exef.com. It's a really original website. I know I'm like, it sounds fake. No, no,
• 12:32
  and in there you can literally search artificial intelligence and it'll come up with all these
• 12:36
  artificial intelligence ETFs. You can search pets, you know, come up with all these pet ETFs,
• 12:41
  you can search woman, you can search healthcare, you can search Australia and it just comes up with
• 12:46
  a whole bunch of them. So if you do that and you find an ETF and you're like, oh, I don't really
• 12:51
  understand how to read it or like what the fees are or whatever, feel free to screenshot and send it
• 12:56
  to us on like Instagram or wherever. Because you can google it and then be overwhelmed when you see
• 13:01
  500 of the same thing. So if you do feel like that, definitely get in touch. And there's usually like
• 13:06
  weird words in the in the title that kind of make you just a bit confused. I hate finance sometimes.
• 13:12
  I know. I was doing this panel the other week and they were like, what do you want to see happen
• 13:17
  within the finance world and then within investing in the next five or 10 years? And I was like,
• 13:21
  less regulation, less confusing jargon. Just need to democratize it more. Like, doesn't need to be
• 13:26
  so confusing. Open up the exclusive club to everyone. Honestly, I was just everyone was like, yeah,
• 13:32
  power to the people. And Vic, one of the things that I wanted to ask you about, you can be so proud of
• 13:38
  me as if I've done my research. I saw a few things pop up about crypto. Oh, as there been like things
• 13:45
  happening in that space that are curfewickly worthy. Yeah, it's well done, Sophie. Well, you know,
• 13:51
  since you're on the plane, I thought must keep tabs on things, you know,
• 13:55
  I'll speak the news. Yes. So there's been a lot going on in the AI world. There's been a lot
• 13:59
  going on the crypto world. So remember that back in 2021 Bitcoin got to like $64,000 for one coin.
• 14:06
  It's now at 37,000. So it's still a long way off that peak. But it's up 124% this year. But anyway,
• 14:15
  yes, you're right. So do you remember a while ago that Sam Beckman freeze? Yes,
• 14:20
  was I was about to say this whole thing happening with open AI sounds kind of like that whole
• 14:25
  drama that happened in the crypto world. Yeah. So this was one of the biggest financial
• 14:29
  forwards in history. He is now facing up to 115 years in prison for his business FTX. For anyone
• 14:36
  that missed that, can you give like a quick top line? Yeah. So effectively, he had the second biggest
• 14:41
  crypto exchange called FTX. And so this is like a stock exchange where you trade cryptocurrencies.
• 14:47
  And then effectively what he was doing, he was shuffling money into I think it was like his
• 14:51
  girlfriend's company. Like there was a lot of moving money around, really dodgy stuff.
• 14:57
  Anyway, what happened was the largest crypto exchange finance went to acquire FTX because I reckon
• 15:04
  he knew he wasn't trouble. So he was like, let's get acquired. And then they they looked at their
• 15:08
  books and were like, you are so dodgy. Yeah. So then when they pulled out, we're like, we're not
• 15:12
  interested. That's when the kind of pants came down or the curtains opened. And everyone was like,
• 15:19
  okay, well, if this company is not interested, there must be something going on. And then that kind
• 15:24
  of unraveled. And it was just this massive scandal. So anyway, he's in prison, is he? Or going to
• 15:30
  face like 150 years, 115 years of prison. So he embezzled like $10 billion of clients money.
• 15:37
  Anyway, that kind of lead to Bitcoin falling off a cliff because people were like, oh my gosh,
• 15:41
  cryptocurrencies are dead. Now, the CEO of Binance has been found guilty of money laundering.
• 15:50
  Oh gosh. So this is just now put further skepticism in the crypto world. And I guess the thing
• 15:59
  about crypto is that the whole point of it is it's not traceable. If you think about dodgy people,
• 16:05
  drug dealers, I don't know, people with gambling money or just dodgy money, it's very easy to hide
• 16:11
  your tracks. And so well, that's a positive thing. It's also a negative thing. It means that there's
• 16:16
  a lot of dodgy money in crypto. So this is kind of what has happened with finance. What a bloody scandal
• 16:22
  also. Sorry. If he's been caught doing that and he was in his high horse being like, we're not
• 16:28
  buying FTX because they're dodgy. It's like, oh, come on, mate, like glass houses. Totally. Surely
• 16:34
  you were like, oh, gosh, quick, quick, let's clean our books because we're surely going to be next.
• 16:39
  So yes, some of the violations in terms of money laundering is to do with him us and other terrorist
• 16:44
  groups. So there's money that's being funded to them. So because you don't have that traceability,
• 16:49
  there's so much like dirty money that goes on in crypto. And so I think this is going to be a real big
• 16:55
  shakeup for the crypto world when you've got the two largest crypto exchanges now have been
• 17:00
  fined. It doesn't, personally, doesn't really instill a lot of confidence in crypto currencies
• 17:05
  for myself. No, definitely not. But I guess also if you're thinking of it as a long game,
• 17:10
  you would have the approach in your head of like, okay, yeah, these have been two massive blowouts,
• 17:16
  but there's just going to have to be a little bit more regulation and time. And maybe this is what
• 17:19
  needs to happen to make it. Although we did say that with FTX anyway. It's like, how many more?
• 17:25
  Like 10 broads later, we're like, no, this is the last one. This is the last one. I'm not getting
• 17:31
  up on it just yet. Yeah. And on a lighter note, Zara, the clothing store has also had a result,
• 17:37
  which a lot of people will know Zara. So it's parent company is in detects. So in detects,
• 17:42
  the parent company in Zara accounts for about 70% of in detects is sales. So when people refer to
• 17:47
  this company, they refer to it as Zara because it's the majority of the business. But it's listed on
• 17:51
  the Spanish stock exchange. And the owner of this business is now the second richest man in Europe.
• 17:59
  So remember, Bernard O'Neal from LVMH is the first. This guy is the second. And their share price
• 18:05
  has done fantastically. Well, it's up 50% this year. And that's all around. They've had a really
• 18:11
  good result. But that result was due to the fact that people are spending more money at these
• 18:16
  fast-fashion discount retailers because they're kind of trading down. If that makes sense.
• 18:21
  So yeah, yeah. And people that might not have spent, might not have shopped as much at Zara,
• 18:25
  for example. And now filling the pinch. And they're like, okay, we're going to have to spend more
• 18:30
  money there. I had a friend even the other day like I was I sent her a link to all these things
• 18:35
  from Paris Georgia that I wanted to buy. And she was like, don't do it. You're like, Matt,
• 18:39
  you're doing an impulsive. You're not thinking about it. You're just getting excited because it's
• 18:42
  a sale. I was like, you're so right. So I stopped. But she was like, honestly, at times like this,
• 18:48
  you've got to look at things like calls are like obviously buying fast-fashion's not great. But
• 18:54
  if you can't afford to buy your entire wardrobe from, you know, ethical, sustainable brands,
• 19:00
  then what do you meant to do? Yeah, I don't know. It's so hard. I'm really torn because there's no
• 19:04
  way I can afford an entire wardrobe of handmade New Zealand garments. But at the same time,
• 19:10
  I'm not that stoked that Zara's done really well. Like it's not. I know. It's a conflicting
• 19:16
  situation. Okay, understand it from a consumer perspective. And also, it's quite a good example
• 19:21
  of being like, look around you, what your friends are doing, what are people doing. And you're right,
• 19:24
  people are trading down because not everyone can afford the row. Exactly. I was literally
• 19:29
  sort of got served an ad that was like the rose-up boots, like a fake version of them.
• 19:34
  They're like, should I? No, I'm not. Yeah, I know. I was like, no, okay.
• 19:38
  Oh, I know, it's hard. And also those emails, I'm like, don't open it, don't open it. And I'm like,
• 19:43
  I'll just have a look. And then I look and I'm like, it's so gussier. And I'm like, oh, but, yes,
• 19:49
  they are doing well. I know that you were like, oh, it's an exciting thing. And I kind of thought
• 19:53
  it would be, I'm sorry, I'm being niggin and sound time. Yeah. I thought it was an exciting curve
• 19:58
  weekly. There was so much going on. Yeah, yeah, yeah. No, there definitely is. I think we should start
• 20:02
  that, you know, desperate husbands of crypto or something. Yes. Thank you so much for it. No,
• 20:08
  worry. Life up day, I feel like I'm in a need to have an evening coffee. I feel like I'm like
• 20:13
  starting to wind down. You're like, I'm really good. I think it's only because I'm jet lagged.
• 20:20
  And I have been up for a few hours already. And I'm like, well, I'm glad you made it home
• 20:26
  into your own bed. And you'll be here soon. And we can both be on the same time zone.
• 20:31
  I know, I know, I know. Actually, as soon as you left, I was like, I knew I'd regret not going
• 20:35
  at the same time. Okay. Have a good day. Bye. Thank you so much for listening to The Curve Weekly.
• 20:44
  Make sure you hit the subscribe button to stay up to date with all the many business stock market
• 20:48
  news. And if you like what you heard, we would love a review. Thank you. Yes. We would love a
• 20:54
  review. That if you didn't hate it, please don't leave one if you hate it. No, but in all
• 20:58
  series as could you please leave a review because it really helps other people find our cute little
• 21:02
  podcast. And we hope you have a good week and see you next Monday. Bye. Bye.
• 21:08
  So yeah, see you next Tuesday. Well, see you next Tuesday. I mean Monday.