WEBVTT 1 00:00:07.585 --> 00:00:08.255 Hello on. 2 00:00:08.255 --> 00:00:12.015 Welcome to this educational field whose objective is 3 00:00:12.015 --> 00:00:14.215 to provide you with information 4 00:00:14.315 --> 00:00:17.775 and financial insight into an economic sector, 5 00:00:17.775 --> 00:00:21.975 which is definitely at the forefront of business news. 6 00:00:23.015 --> 00:00:24.215 Artificial intelligence, 7 00:00:25.195 --> 00:00:28.815 the man you see in the picture is named Jensen Huang. 8 00:00:29.435 --> 00:00:32.415 He is the founder of a company which is now very well known 9 00:00:32.415 --> 00:00:33.575 whose name is Nvidia. 10 00:00:33.755 --> 00:00:38.215 Nvidia was created by him in 1993. 11 00:00:38.835 --> 00:00:40.215 He is 30 years old. 12 00:00:40.445 --> 00:00:42.095 He's an experienced engineer, 13 00:00:42.155 --> 00:00:45.175 is very knowledgeable about all these technologies 14 00:00:45.395 --> 00:00:47.775 around microchips today. 15 00:00:48.135 --> 00:00:50.175 I mean, before January 27, 16 00:00:50.795 --> 00:00:54.535 Nvidia was the largest market capitalization in the world 17 00:00:55.005 --> 00:00:59.575 with about $3,600 billion 18 00:00:59.755 --> 00:01:02.015 of market value on a nasdaq. 19 00:01:02.835 --> 00:01:06.055 Now after some equity issues, of course Mr. 20 00:01:06.305 --> 00:01:08.495 Huang has been a little bit diluted 21 00:01:08.795 --> 00:01:12.215 and it seems that he holds 3.6% of his shares, 22 00:01:12.355 --> 00:01:15.055 but 3.6% of this amount money 23 00:01:15.575 --> 00:01:20.055 represents about $130 billion and positions. 24 00:01:20.115 --> 00:01:23.695 Mr. Huang at the number 10 of the Forbes list 25 00:01:23.755 --> 00:01:26.735 of billionaires, which is not bad news for him. 26 00:01:26.835 --> 00:01:28.935 Now, when you observe the evolution of Apple 27 00:01:29.195 --> 00:01:32.855 and Microsoft Giants in this business, in this industry 28 00:01:33.735 --> 00:01:36.495 compared with Nvidia over the last four 29 00:01:36.495 --> 00:01:38.535 or five years, what are the conclusions? 30 00:01:39.105 --> 00:01:42.695 Apple is up by 240%, which is great. 31 00:01:43.815 --> 00:01:46.975 Microsoft is up by 180%, which is great. 32 00:01:47.355 --> 00:01:52.095 Nvidia is up by 2700%, which is outstanding 33 00:01:52.875 --> 00:01:54.975 and rarely observed the stock market. 34 00:01:55.475 --> 00:01:58.055 Now obviously Nvidia is not alone the 35 00:01:58.055 --> 00:01:59.495 planet in this industry. 36 00:01:59.915 --> 00:02:02.975 You have the gamma former G, 37 00:02:03.675 --> 00:02:07.455 but you also have Chad D, pity, open ai, xai 38 00:02:07.635 --> 00:02:11.735 and Tropic menstrual AI and so on and so forth. 39 00:02:12.155 --> 00:02:13.695 My objective in this field is not 40 00:02:13.695 --> 00:02:15.935 to describe the entire ecosystem, 41 00:02:15.985 --> 00:02:20.175 which would be a little bit too long and certainly useless. 42 00:02:20.855 --> 00:02:23.215 I would like to select a few key players first, 43 00:02:23.275 --> 00:02:26.735 the largest ones, the ones which are described already 44 00:02:26.735 --> 00:02:29.775 already, apple, Microsoft and so on and so forth, 45 00:02:30.275 --> 00:02:33.615 but also a few additional key players in industry. 46 00:02:33.905 --> 00:02:35.215 These companies are going 47 00:02:35.215 --> 00:02:39.575 to definitely play a role in the future including open AI 48 00:02:39.595 --> 00:02:41.255 for Chad, GPT, but some others 49 00:02:41.555 --> 00:02:43.935 and now will take the financial perspective. 50 00:02:44.155 --> 00:02:47.695 Now observing the financial metrics of all these companies 51 00:02:48.285 --> 00:02:50.735 will lead us to a conclusion we have 52 00:02:50.735 --> 00:02:54.495 to go a little bit in theory of corporate finance. 53 00:02:55.085 --> 00:02:57.095 It's not going to be a theoretical firm, 54 00:02:57.555 --> 00:03:00.485 but you will understand that a a little bit of refurbishment 55 00:03:00.545 --> 00:03:03.565 of the portfolio theory is probably a bit useful. 56 00:03:04.315 --> 00:03:06.805 It's not going to be a debate on the threats 57 00:03:06.945 --> 00:03:10.565 and ethical issues which are created by the 58 00:03:11.085 --> 00:03:13.445 dramatic evolution of artificial intelligence. 59 00:03:13.705 --> 00:03:15.885 For a few reasons. First, it would take too long. 60 00:03:16.185 --> 00:03:18.085 Second, it's not my purpose. 61 00:03:18.465 --> 00:03:21.805 I'm not legitimate to deep dive into the insight 62 00:03:21.865 --> 00:03:23.325 of all these issues. 63 00:03:23.425 --> 00:03:27.005 So we are going to concentrate on financial metrics. 64 00:03:27.585 --> 00:03:30.525 Now, a few words of course about Chad gt. 65 00:03:30.915 --> 00:03:35.085 Chad GT number three is offered to people in 2022, 66 00:03:35.925 --> 00:03:39.885 a year later end of 2023 chat, GPT-4, 67 00:03:40.115 --> 00:03:42.125 durable plus and so on so forth, 68 00:03:42.745 --> 00:03:44.285 and that's going to be amazing. 69 00:03:45.145 --> 00:03:48.485 The propagation is going to be absolutely outstanding. 70 00:03:48.945 --> 00:03:51.645 How much time does it take to take the first 71 00:03:52.465 --> 00:03:55.925 1 million users Instagram, two and a half months? 72 00:03:56.665 --> 00:04:01.365 Wow, Netflix, three and a half years. Cha five days. 73 00:04:02.265 --> 00:04:05.885 The first 100 million users Instagram two 74 00:04:05.885 --> 00:04:10.645 and a half years Netflix, 10 euro cha, two months. 75 00:04:10.945 --> 00:04:14.325 So it's absolutely unique in the history of high tech. 76 00:04:14.865 --> 00:04:18.885 The speed of propagation of this fantastic application, 77 00:04:18.885 --> 00:04:19.925 which is T. 78 00:04:20.545 --> 00:04:23.365 Now about market values on the NASDAQ 79 00:04:23.785 --> 00:04:25.685 of all these AI firms, 80 00:04:25.825 --> 00:04:28.805 you can take the six largest capitalization. 81 00:04:29.035 --> 00:04:30.965 They are all involved more 82 00:04:30.965 --> 00:04:33.605 or less in the artificial intelligence business. 83 00:04:34.425 --> 00:04:36.165 Six capitalization out 84 00:04:36.185 --> 00:04:40.165 of more than 3000 companies listed in the nasdaq, 85 00:04:40.675 --> 00:04:44.565 it's 0.2% of the number of firms. 86 00:04:45.225 --> 00:04:46.605 The total capitalization 87 00:04:46.605 --> 00:04:51.405 of NASDAQ is more than 26,000 billions 88 00:04:51.505 --> 00:04:53.405 of dollars trillion dollars. 89 00:04:54.025 --> 00:04:57.125 Now, these six largest capitalized agents, they represent 90 00:04:57.585 --> 00:05:01.645 around 17 trillion, which is 63%. 91 00:05:02.465 --> 00:05:05.085 Now, if you, an extremely negligible number 92 00:05:05.085 --> 00:05:08.045 of firms represent about two thirds of the value, 93 00:05:08.505 --> 00:05:11.965 you understand that we are no more in a normal distribution 94 00:05:11.985 --> 00:05:15.485 in a Ian world, extremes have 95 00:05:16.005 --> 00:05:17.765 replaced the normal distribution. 96 00:05:18.585 --> 00:05:20.725 Now, if you look at the theory of corporate finance, 97 00:05:20.725 --> 00:05:22.565 which is named the portfolio theory, 98 00:05:22.875 --> 00:05:24.565 when you look at the models thanks 99 00:05:24.565 --> 00:05:27.605 to which you can make some option valuation, blackshaw 100 00:05:27.765 --> 00:05:31.565 and so on so forth, it's based about log normal distribution 101 00:05:31.565 --> 00:05:34.245 of returns in the portfolio theory. 102 00:05:34.625 --> 00:05:37.325 Now it's wrong. It does not work anymore. 103 00:05:37.915 --> 00:05:40.365 It's zero multiplied by infinity. 104 00:05:40.665 --> 00:05:44.485 So the portfolio theory needs a little bit of refurbishment 105 00:05:45.025 --> 00:05:47.805 or maybe complete reconstruction. 106 00:05:48.025 --> 00:05:51.365 Who has his sixth largest capitalization on nasdaq? 107 00:05:51.585 --> 00:05:56.445 The first one up to January 27 is Nvidia. 108 00:05:57.145 --> 00:06:00.965 Nvidia generates revenues of about $100 billion 109 00:06:02.325 --> 00:06:03.965 multiplied by two each and every year. 110 00:06:04.185 --> 00:06:07.845 By the way, the EBITDA is more than 60 billion, 111 00:06:08.385 --> 00:06:10.805 so you understand that the return on sales is absolutely 112 00:06:10.805 --> 00:06:14.085 outstanding, but free cash flow is a big diners. 113 00:06:14.085 --> 00:06:17.845 Capital expenditures CapEx a billion. Why? 114 00:06:17.845 --> 00:06:20.565 Because they don't manufacture the market. 115 00:06:20.665 --> 00:06:22.725 Capitalization is stratospheric. 116 00:06:23.225 --> 00:06:26.645 The price to book market value of equity divided 117 00:06:26.825 --> 00:06:28.285 by the book equity, which you are in, 118 00:06:28.285 --> 00:06:30.285 and the balance sheet is more than 60 119 00:06:31.145 --> 00:06:35.485 and the enterprise value represents about 60 euro 120 00:06:35.785 --> 00:06:38.805 of EBDA, which is absolutely outstanding. 121 00:06:39.965 --> 00:06:42.285 Interestingly, apple is number two. 122 00:06:43.025 --> 00:06:46.325 The EBITDA is larger, 130 something. 123 00:06:46.865 --> 00:06:51.085 The revenues of the last 12 months is about 400 billion, 124 00:06:52.025 --> 00:06:54.525 and capital expenditures are not that big 125 00:06:54.525 --> 00:06:57.085 because everything is outsourced at Apple, 126 00:06:57.785 --> 00:06:59.565 the market cap is not that far 127 00:06:59.745 --> 00:07:01.845 and the price to book is about the same. 128 00:07:02.705 --> 00:07:06.005 Now, the enterprise value in EBITDA is 25, 129 00:07:06.175 --> 00:07:10.365 which is much less than 57 or 60 for Nvidia, 130 00:07:10.705 --> 00:07:13.925 and what is interesting is to observe the next four 131 00:07:14.685 --> 00:07:18.045 Microsoft, Google, Amazon and meta. 132 00:07:18.385 --> 00:07:22.325 The revenues are from 150, 160 for meta to 133 00:07:22.865 --> 00:07:26.605 620 billion for Amazon, which is getting closer 134 00:07:26.665 --> 00:07:27.725 and closer to Walmart. 135 00:07:28.025 --> 00:07:30.445 By the way. What is interesting is 136 00:07:30.445 --> 00:07:32.725 that the EBIT D rate is quite high, 137 00:07:33.145 --> 00:07:37.485 but for these companies from rank three to rank six, 138 00:07:37.705 --> 00:07:40.525 the capital expenditures are significantly higher 139 00:07:40.955 --> 00:07:44.645 because they invest in not only warehousing for Amazon 140 00:07:44.645 --> 00:07:49.045 but also in data centers, networks and so on so forth. 141 00:07:49.425 --> 00:07:51.925 As a consequence, what is interesting to observe is 142 00:07:51.925 --> 00:07:54.245 that the price to book is a bit less 143 00:07:54.475 --> 00:07:57.045 because this company is in much more equity 144 00:07:57.145 --> 00:07:58.205 to finance their growth, 145 00:07:58.225 --> 00:08:00.045 to finance their capital expenditures, 146 00:08:00.345 --> 00:08:02.325 but the price to book is less 147 00:08:02.425 --> 00:08:07.405 and the enterprise value over EBITDA is quote normal, 148 00:08:08.235 --> 00:08:10.965 it's about 20 or a bit less than 20. 149 00:08:11.785 --> 00:08:15.085 We all know companies which are not in the artificial 150 00:08:15.085 --> 00:08:18.565 intelligence world and whose enterprise value represents 151 00:08:18.565 --> 00:08:20.085 about 20 years of abit. 152 00:08:20.425 --> 00:08:22.525 Why? Because these companies are profitable, 153 00:08:22.835 --> 00:08:25.445 they are prospects for growth and so on, so forth. 154 00:08:26.225 --> 00:08:27.765 Of course, these companies are much 155 00:08:28.435 --> 00:08:31.765 smaller than the big companies, which I describe here, 156 00:08:31.985 --> 00:08:34.885 but the multiple is not completely stupid. 157 00:08:35.265 --> 00:08:38.325 The last point I would like to discuss with you is the beta, 158 00:08:38.585 --> 00:08:40.525 the systematic risk coefficient. 159 00:08:40.915 --> 00:08:42.885 It's quite high for Nvidia 160 00:08:42.945 --> 00:08:47.405 and what happened recently will probably make the beta go up 161 00:08:47.415 --> 00:08:50.205 again, but if you look at the other five, 162 00:08:50.545 --> 00:08:52.245 the beta is about to one. 163 00:08:53.185 --> 00:08:56.325 You know what? These companies are completely embedded in 164 00:08:56.605 --> 00:09:00.925 economic life and this is why the beta is quite correlated 165 00:09:01.075 --> 00:09:04.405 with macroeconomic conditions about one. 166 00:09:05.525 --> 00:09:07.325 Interestingly, if you make the parallel 167 00:09:07.325 --> 00:09:10.005 with the telecommunication business telecommunication 168 00:09:10.005 --> 00:09:12.765 equipment, the beta is much higher than 169 00:09:12.885 --> 00:09:14.405 telecommunication operators. 170 00:09:14.915 --> 00:09:16.125 It's quite the same story, 171 00:09:16.665 --> 00:09:18.245 but I would like that you remember 172 00:09:18.245 --> 00:09:21.725 that the enterprise value over EBITDA of 20 is 173 00:09:22.305 --> 00:09:23.605 not abnormal. 174 00:09:24.245 --> 00:09:26.805 A couple of conclusions about observing these figures. 175 00:09:27.235 --> 00:09:30.805 Huge operating margins, ebitda, return on sales, 176 00:09:31.565 --> 00:09:35.205 absolutely fantastic, very significant free cash flows. 177 00:09:35.205 --> 00:09:37.925 Sometimes the free cash flow is very close to the EBITDA 178 00:09:37.925 --> 00:09:39.085 because there's no CapEx. 179 00:09:39.275 --> 00:09:41.445 Sometimes it's much less than the ebitda, 180 00:09:41.545 --> 00:09:43.045 but it's still quite big. 181 00:09:43.585 --> 00:09:45.525 So you have very large companies 182 00:09:45.795 --> 00:09:50.285 with fantastic operating margins and strong free cash flows. 183 00:09:50.755 --> 00:09:54.845 It's a fantastic and concentrated financial power. 184 00:09:55.245 --> 00:09:57.685 A few additional comments about returning 185 00:09:57.685 --> 00:09:58.725 the cash to shareholders. 186 00:09:59.385 --> 00:10:03.445 The return on equity for Apple is 150, 160 187 00:10:04.125 --> 00:10:05.965 NVD is more than 100%. 188 00:10:06.825 --> 00:10:08.685 The return on equity is the rate 189 00:10:08.685 --> 00:10:09.925 of return for the shareholders. 190 00:10:10.185 --> 00:10:13.365 Now, if the return on equity is very high, it's quite normal 191 00:10:13.435 --> 00:10:15.405 that the price to book is very high 192 00:10:16.065 --> 00:10:17.925 and for these two companies, a price 193 00:10:17.925 --> 00:10:19.325 to book is exceeding 60, 194 00:10:20.105 --> 00:10:22.645 but the return on equity is not only the performance 195 00:10:22.645 --> 00:10:24.605 of the company, it is the ability to grow. 196 00:10:25.505 --> 00:10:28.525 You remember this concept of sustainable growth rates, 197 00:10:28.525 --> 00:10:31.765 the ability of the company to self-finance its growth 198 00:10:32.105 --> 00:10:36.365 and then the ability to grow is more than 100% 199 00:10:37.185 --> 00:10:38.565 if you don't take into account 200 00:10:38.565 --> 00:10:40.085 returning the cash to shareholders. 201 00:10:40.865 --> 00:10:43.045 Now, let's take these two companies one after the other. 202 00:10:43.495 --> 00:10:47.605 Apple revenues are owe by about 10% per year 203 00:10:48.155 --> 00:10:50.965 earning soft tax 2024 204 00:10:51.505 --> 00:10:53.685 $94 billion. 205 00:10:54.555 --> 00:10:57.925 Just to give you an idea about transforming that into cash, 206 00:10:58.025 --> 00:11:00.045 the company generates a free cash flow 207 00:11:00.045 --> 00:11:03.405 of $1 million every five minutes. 208 00:11:04.425 --> 00:11:06.365 So when you are profitable, 209 00:11:06.915 --> 00:11:09.765 when you are immensely profitable in generating a lot 210 00:11:09.765 --> 00:11:12.845 of cash and the gross rate is on lead 10%, 211 00:11:13.545 --> 00:11:14.845 you generate much more cash 212 00:11:14.845 --> 00:11:16.405 and what you need to final your growth, 213 00:11:16.435 --> 00:11:18.325 then you can return the cash to shareholders 214 00:11:18.945 --> 00:11:23.565 buy back 95 billion dividends, 15 billion, 215 00:11:23.745 --> 00:11:26.925 so we can return $110 billion. 216 00:11:27.625 --> 00:11:29.645 But what is interesting about Nvidia, 217 00:11:29.945 --> 00:11:33.125 Nvidia is doubling the revenues each and every year. 218 00:11:33.545 --> 00:11:36.525 So the revenue growth is 100% earnings 219 00:11:36.525 --> 00:11:41.325 after tax 2023 last, last 12 months and about 30 billion. 220 00:11:42.525 --> 00:11:46.165 But as a company does not invest CapEx 1 billion, 221 00:11:46.665 --> 00:11:49.045 the company can return the cash to the shareholders 222 00:11:49.965 --> 00:11:53.045 dividends and buybacks altogether during the last two years, 223 00:11:53.200 --> 00:11:55.925 they represent $20 billion. 224 00:11:56.505 --> 00:11:59.125 So you understand that these companies are extremely strong 225 00:11:59.385 --> 00:12:01.725 and they can give the money back to the shareholders. 226 00:12:01.915 --> 00:12:04.165 What are shareholders going to do with this money? 227 00:12:05.205 --> 00:12:07.085 Reinvest in artificial intelligence. 228 00:12:07.265 --> 00:12:10.125 So you have plenty your financial resources ready 229 00:12:10.145 --> 00:12:12.645 to invest in the development of this industry 230 00:12:13.065 --> 00:12:15.765 and generated by the leaders of this industry. 231 00:12:16.065 --> 00:12:19.405 That's a huge value, but sometimes the value is fraud. 232 00:12:20.225 --> 00:12:22.925 We can take the example of what happened to Google 233 00:12:23.665 --> 00:12:26.285 barred the artificial intelligence application 234 00:12:26.285 --> 00:12:29.085 of Google in February, 2023. 235 00:12:29.785 --> 00:12:32.325 The company in the middle of a presentation 236 00:12:32.945 --> 00:12:35.405 is providing an inaccurate information. 237 00:12:36.345 --> 00:12:39.525 Rer is in a room and immediately circulates a mistake. 238 00:12:39.675 --> 00:12:43.165 What immediately happens in the stock market time magazine 239 00:12:43.175 --> 00:12:46.125 title an error just cost Google 240 00:12:46.425 --> 00:12:48.445 $100 billion. 241 00:12:49.105 --> 00:12:51.725 So this figure is absolutely stratospheric, 242 00:12:52.305 --> 00:12:54.085 but it's extremely temporary. 243 00:12:54.465 --> 00:12:57.605 If you look at the graph, the evolution of alphabet 244 00:12:57.605 --> 00:13:00.805 of Google throughout the years, you understand that it's up, 245 00:13:00.875 --> 00:13:04.765 it's down and there's a blip somewhere on the screen just 246 00:13:04.865 --> 00:13:07.765 for a few days, a few weeks, and then it's back. 247 00:13:08.115 --> 00:13:10.205 It's back up. The trend is there. 248 00:13:11.345 --> 00:13:14.525 If you remember Facebook now meta 249 00:13:14.875 --> 00:13:16.685 with Cambridge Analytica. 250 00:13:16.995 --> 00:13:20.845 Cambridge Analytica was very much an issue for Facebook. 251 00:13:21.345 --> 00:13:22.485 The third price went down. 252 00:13:23.055 --> 00:13:26.685 Three weeks later it was up and it started going up again. 253 00:13:27.185 --> 00:13:29.005 So it's just an accident. 254 00:13:29.355 --> 00:13:33.165 It's a $100 billion temporary accident. 255 00:13:33.705 --> 00:13:37.085 Now, AI is not limited to the big six, which I mentioned. 256 00:13:37.875 --> 00:13:40.525 Open AI of course is in the middle of the picture 257 00:13:41.265 --> 00:13:44.685 and tropic x ai, mytral ai, 258 00:13:45.365 --> 00:13:48.085 a few mobility cases and Reddit case. 259 00:13:48.395 --> 00:13:50.485 It's what I'm going to discuss now with you. 260 00:13:51.495 --> 00:13:52.925 Let's start with open ai. 261 00:13:53.305 --> 00:13:57.765 OpenAI, very well known Chad g PT founded in 2015 262 00:13:57.945 --> 00:14:01.925 by Sam Altman, who a very good friend of Sam Alman, 263 00:14:01.925 --> 00:14:04.725 who's name is Elon Musk and a few others. 264 00:14:05.625 --> 00:14:07.285 It seems that Sam Atman 265 00:14:07.285 --> 00:14:09.565 and Elon Musk are no more friends anymore, 266 00:14:09.975 --> 00:14:13.765 which happen in uh, in number of cases in this industry. 267 00:14:14.465 --> 00:14:18.405 Why did they create open AI for the benefit of humankind? 268 00:14:18.945 --> 00:14:21.125 The free cash flow is never that far from that. 269 00:14:21.705 --> 00:14:24.965 Now, at that time, Sam Atman is the president 270 00:14:25.065 --> 00:14:27.885 of an outstanding accelerator based in California. 271 00:14:28.025 --> 00:14:29.685 His name is Y Combinator. 272 00:14:30.345 --> 00:14:35.085 In 2019, he leaves Y Combinator to be 100% CEO 273 00:14:35.305 --> 00:14:36.525 of open ai. 274 00:14:37.355 --> 00:14:39.845 He's going to be host stood by the board 275 00:14:40.345 --> 00:14:42.725 and then back in the board, right? 276 00:14:43.025 --> 00:14:46.365 And then a few people are going to be out in the board 277 00:14:46.545 --> 00:14:50.205 and top managers, top people at OpenAI, three co-founders, 278 00:14:51.165 --> 00:14:53.925 C-S-O-C-T-O security r and d manager 279 00:14:54.425 --> 00:14:57.925 and a number of people are living open ai, 280 00:14:57.935 --> 00:15:01.085 which is definitely an issue for the company in the future 281 00:15:01.785 --> 00:15:04.245 as far as some money is concerned is still there 282 00:15:04.825 --> 00:15:06.965 and what's happened to the value of the company? 283 00:15:07.275 --> 00:15:11.125 Well, in 2023, Microsoft, the long term financial 284 00:15:11.705 --> 00:15:15.565 and business partner and technological partner of open AI 285 00:15:16.045 --> 00:15:17.645 provided $10 billion. 286 00:15:17.955 --> 00:15:20.645 This amount has to be compared with the primo valuation. 287 00:15:20.645 --> 00:15:24.325 So the value before you receive the cash of 19 billion. 288 00:15:24.985 --> 00:15:28.605 So post money, the value is 19%, which is 29, 289 00:15:29.055 --> 00:15:33.045 about 30 billion a year later, exactly 18 months later. 290 00:15:33.185 --> 00:15:36.685 In 2024, an additional cash injection 291 00:15:36.945 --> 00:15:40.245 of $6.6 billion out of a premium 292 00:15:40.625 --> 00:15:42.165 of 150. 293 00:15:42.825 --> 00:15:45.405 Now the 150 has to be compared with 30, 294 00:15:45.905 --> 00:15:48.285 and so the value of the company was multiplied 295 00:15:48.285 --> 00:15:50.645 by five in just 18 months. 296 00:15:51.505 --> 00:15:54.485 So we are not exactly in the same valuation process 297 00:15:54.785 --> 00:15:57.885 as normal companies and normal industries. 298 00:15:58.465 --> 00:16:00.605 Tropic is a company which was founded 299 00:16:00.745 --> 00:16:02.845 by former open AI people 300 00:16:02.845 --> 00:16:05.325 because a number of them left the company. 301 00:16:05.865 --> 00:16:08.365 The company was founded in 2021. 302 00:16:08.985 --> 00:16:12.525 The last valuation of the company series D, 303 00:16:13.165 --> 00:16:16.405 February, 2024 mentions about 17 304 00:16:16.505 --> 00:16:18.325 to $18 billion. 305 00:16:18.925 --> 00:16:21.525 A brother and a sister created the company. 306 00:16:22.145 --> 00:16:25.365 It seems that they signed a big contract with Amazon 307 00:16:25.425 --> 00:16:27.445 to provide service and so on so forth, 308 00:16:27.465 --> 00:16:31.925 and they received some financing interestingly from Google, 309 00:16:32.515 --> 00:16:35.805 from the speculative fund, which was created 310 00:16:36.025 --> 00:16:37.845 by SoftBank Vision Fund. 311 00:16:38.235 --> 00:16:40.525 Keep in mind, SoftBank, we're going 312 00:16:40.525 --> 00:16:42.325 to talk about the capital later 313 00:16:43.065 --> 00:16:45.765 and the financing was about $4 billion. 314 00:16:46.585 --> 00:16:48.725 The valuation are stratospheric, 315 00:16:48.745 --> 00:16:50.805 but it's just paper valuation. 316 00:16:51.145 --> 00:16:53.245 The MONA is available in cash. 317 00:16:53.675 --> 00:16:57.085 Elon Musk is no more friend of uh, Sam man. 318 00:16:57.425 --> 00:17:01.205 He left, uh, open ai. He said, we have to stop everything. 319 00:17:01.225 --> 00:17:02.405 Please stop everything 320 00:17:02.405 --> 00:17:05.005 because in the meantime, I'm creating my own company. 321 00:17:05.465 --> 00:17:10.165 His name is XAIX AI because of SpaceX, 322 00:17:10.165 --> 00:17:12.965 because of Twitter becoming X and so on. 323 00:17:13.105 --> 00:17:16.605 The company is founded in July, 2023. 324 00:17:17.425 --> 00:17:20.885 The name of the application is extremely poetic gr 325 00:17:21.785 --> 00:17:23.565 and in May, 2024, 326 00:17:24.025 --> 00:17:27.645 the company leads Monet $6 billion out 327 00:17:27.645 --> 00:17:32.565 of a pre month valuation of 18 billion who participated 328 00:17:32.665 --> 00:17:36.005 to the equity issue, the usual suspect, Sequoia 329 00:17:37.955 --> 00:17:40.645 plus a few sovereign funds and so on so forth. 330 00:17:41.025 --> 00:17:44.685 It was in May Primo 18 in December, 331 00:17:45.065 --> 00:17:49.325 we need an additional $6 billion, PRI Monet, 44 billion. 332 00:17:49.985 --> 00:17:53.965 So again, the value is up, but the value is not cash. 333 00:17:54.315 --> 00:17:56.205 What is injected in these companies 334 00:17:56.205 --> 00:17:58.205 to pay the salaries is cash. 335 00:17:58.425 --> 00:18:00.965 In Europe. In France, there's a company which seems 336 00:18:00.965 --> 00:18:03.565 to be quite promising in the same industry name is 337 00:18:03.845 --> 00:18:05.005 Mistrial ai. 338 00:18:05.745 --> 00:18:08.005 We have a contract with Microsoft 339 00:18:08.345 --> 00:18:12.165 and they have a nice credibility in terms of technology. 340 00:18:12.225 --> 00:18:16.485 The company was created in 20 23, 3 founders coming from 341 00:18:16.485 --> 00:18:20.125 Google DeepMind and from Meta Facebook, 342 00:18:20.665 --> 00:18:24.005 but in order to raise just $1.1 billion, 343 00:18:24.585 --> 00:18:27.805 the company needed 40 investors, which is 344 00:18:28.485 --> 00:18:31.365 complete different context in terms of venture capital 345 00:18:31.945 --> 00:18:34.485 series B in June, 2024. 346 00:18:35.025 --> 00:18:37.805 Now, premium evaluation is 5.2 billion. 347 00:18:37.905 --> 00:18:40.285 The capital is raising half a billion. 348 00:18:41.025 --> 00:18:44.885 The name of the application is Lucia Lecha, 349 00:18:45.585 --> 00:18:47.085 so it's about chat, 350 00:18:47.265 --> 00:18:51.805 but Lucia is a cartoon humoristic cartoon in Europe, 351 00:18:51.855 --> 00:18:53.205 which is extremely well known 352 00:18:53.265 --> 00:18:55.325 and very much appreciated by the way. 353 00:18:55.665 --> 00:18:56.885 Now if you look at 354 00:18:56.955 --> 00:19:01.725 what Crunchbase very serious website is giving us a list of 355 00:19:02.265 --> 00:19:06.085 who received more than $1 billion in the last two years. 356 00:19:06.105 --> 00:19:07.605 23 companies, 357 00:19:08.185 --> 00:19:10.765 of course the usual suspects I already mentioned, 358 00:19:11.065 --> 00:19:13.325 but two companies in the mobility business 359 00:19:13.385 --> 00:19:15.405 and it's interesting to spend a minute on that. 360 00:19:15.505 --> 00:19:20.365 The first one is Waymo Ymo is Google mobility activity 361 00:19:20.665 --> 00:19:24.405 and the company received in October 20, 24, 5 362 00:19:24.455 --> 00:19:27.725 $0.6 billion to develop autonomous driving 363 00:19:27.985 --> 00:19:29.045 and so on so forth. 364 00:19:29.825 --> 00:19:32.565 Cruise is also a very interesting case. 365 00:19:32.955 --> 00:19:36.805 It's about self-driving vehicles, it's about robo taxis. 366 00:19:36.805 --> 00:19:40.005 The company received plenty of money from GM 367 00:19:40.665 --> 00:19:42.965 and SoftBank Vision Fund, 368 00:19:43.545 --> 00:19:47.085 but now GM is a controlling interest in growth. 369 00:19:47.285 --> 00:19:48.525 I will describe a bit later. 370 00:19:49.145 --> 00:19:52.085 The company received 2.2 in 2022 371 00:19:52.585 --> 00:19:55.725 and 850 million in 2024 372 00:19:56.605 --> 00:19:58.125 provided by General Motor. 373 00:19:58.265 --> 00:20:01.165 It is a total of $16 billion 374 00:20:01.585 --> 00:20:03.565 of funds received from investors, 375 00:20:03.955 --> 00:20:06.565 including the largest one general models. 376 00:20:07.065 --> 00:20:09.165 Now, again, the value is fragile. 377 00:20:10.345 --> 00:20:12.525 GM grew, it's not a great investment. 378 00:20:12.915 --> 00:20:16.285 They developed a business fleet of Robax. 379 00:20:17.145 --> 00:20:20.405 The company took off in 2018 with GM 380 00:20:20.785 --> 00:20:22.485 and SoftBank Vision Fund. 381 00:20:22.565 --> 00:20:24.765 SoftBank provided $2 billion 382 00:20:25.705 --> 00:20:29.605 and GM bought the Southbank Vision fund stocks in 383 00:20:29.605 --> 00:20:30.805 2022, 384 00:20:31.345 --> 00:20:34.005 and now the company has almost the whole control, 385 00:20:34.105 --> 00:20:38.965 the entire control of uh, CRO revenues generated 386 00:20:39.025 --> 00:20:40.645 by the company throughout the years. 387 00:20:40.715 --> 00:20:44.605 It's about half a billion, but GM invested $10 billion 388 00:20:44.945 --> 00:20:46.765 and it's not successful at all. 389 00:20:47.315 --> 00:20:49.725 This is why GM recently said, we're going 390 00:20:49.725 --> 00:20:51.325 to stop everything about that. 391 00:20:51.825 --> 00:20:54.325 We are going to stop the robo taxi business. 392 00:20:54.505 --> 00:20:55.965 We are going to take the technology 393 00:20:56.025 --> 00:20:59.445 and bring the technology back to GM for personal vehicles, 394 00:20:59.755 --> 00:21:01.725 driving assistance and so on so forth. 395 00:21:01.945 --> 00:21:05.765 And instead of costing 10 billion wasted money, we are going 396 00:21:05.765 --> 00:21:07.685 to invest about a billion per year. 397 00:21:08.425 --> 00:21:12.725 So GM had bought the SoftBank Vision Fund shares, 398 00:21:13.155 --> 00:21:14.445 they had 90%. 399 00:21:14.545 --> 00:21:17.405 Now they have an option to go to 97%, they're going 400 00:21:17.405 --> 00:21:19.605 to buy back all the share end of the story, 401 00:21:20.145 --> 00:21:22.205 and Cruise is not a success. 402 00:21:22.265 --> 00:21:25.405 So it's not only about successes in this industry 403 00:21:25.785 --> 00:21:27.565 and sometimes life stops. 404 00:21:27.905 --> 00:21:30.765 Reddit is the last case I would like to discuss with you. 405 00:21:31.225 --> 00:21:34.685 You can't find on the academy an educational film dated 406 00:21:35.215 --> 00:21:38.245 April, 2024, not that far ago, 407 00:21:38.745 --> 00:21:41.725 and it was about E-S-G-E-S-G, 408 00:21:41.725 --> 00:21:46.365 which potentially creates value thanks to the evolution 409 00:21:46.425 --> 00:21:47.525 of ESG. 410 00:21:47.585 --> 00:21:50.645 At Reddit, the company could be listed 411 00:21:50.865 --> 00:21:52.845 and so it created value for its shareholders. 412 00:21:53.425 --> 00:21:55.645 Reddit is a community of communities, 413 00:21:55.925 --> 00:22:00.485 a sub Reddit company created in 2005. 414 00:22:01.145 --> 00:22:05.485 In 2014, series B, the company is raising $50 million. 415 00:22:06.115 --> 00:22:09.245 Most of the money comes from Sam Atman 416 00:22:09.585 --> 00:22:11.285 and was a good investment for Mr. 417 00:22:11.495 --> 00:22:12.805 Atman because the value 418 00:22:13.025 --> 00:22:16.565 of his equity stake in Reddi is supposedly about 419 00:22:16.705 --> 00:22:17.885 $600 million. 420 00:22:18.095 --> 00:22:21.285 Today, thanks to becoming ESG friendly, 421 00:22:21.625 --> 00:22:25.405 Reddit became public company could go for an IPO. 422 00:22:25.505 --> 00:22:29.805 The IPO started at $8 billion. Now it's about $11 billion. 423 00:22:29.945 --> 00:22:33.565 But the question is what is the main asset of Reddi? 424 00:22:33.655 --> 00:22:37.085 Reddi is publishing is communicating on its strategy 425 00:22:37.785 --> 00:22:39.725 and the evolution of the business model. 426 00:22:39.935 --> 00:22:44.045 First, it's about advertising, segmentation, positioning, 427 00:22:44.275 --> 00:22:47.045 data return investment for those people 428 00:22:47.265 --> 00:22:48.485 who need advertising. 429 00:22:48.775 --> 00:22:52.165 Great second layer data licensing, 430 00:22:52.945 --> 00:22:56.565 all these people discussing, interacting in the communities 431 00:22:56.625 --> 00:22:58.085 and in the subreddits. 432 00:22:58.715 --> 00:23:03.125 It's a fantastic playground to train your AI applications. 433 00:23:03.705 --> 00:23:07.565 And so at the end of the day, Reddit is making money selling 434 00:23:07.785 --> 00:23:10.725 to big companies the usual suspects. 435 00:23:10.765 --> 00:23:15.045 I already imagine selling the access to the subreddits so 436 00:23:15.045 --> 00:23:16.765 that they can train the application 437 00:23:17.145 --> 00:23:18.525 and you know how much it costs. 438 00:23:18.705 --> 00:23:19.845 You know how strategy 439 00:23:19.985 --> 00:23:23.045 and critical this activity is for those people, 440 00:23:23.215 --> 00:23:26.045 those companies providing the AI applications. 441 00:23:26.385 --> 00:23:29.165 Now, I provided some information about large 442 00:23:29.505 --> 00:23:32.565 and less, large, but key players in this industry. 443 00:23:33.055 --> 00:23:36.165 There are plenty of remaining issues. 444 00:23:36.765 --> 00:23:39.325 I said I'm not going to discuss threats on ethics, 445 00:23:39.705 --> 00:23:41.205 but it's nice to mention 446 00:23:41.435 --> 00:23:44.485 that these companies are consuming a lot of energy. 447 00:23:44.995 --> 00:23:46.845 They're issuing plenty of carbon. 448 00:23:47.515 --> 00:23:51.605 It's a oligo poly, an extremely restricted oligo poly. 449 00:23:52.305 --> 00:23:55.565 Not many companies with fantastic resources. 450 00:23:55.675 --> 00:23:59.405 Valuation and cash sovereignty is a little bit 451 00:23:59.405 --> 00:24:01.925 of problem consumption of metals 452 00:24:02.385 --> 00:24:05.285 and related with that, the recycling issue, 453 00:24:06.145 --> 00:24:09.365 the data centers, they consume huge space, 454 00:24:09.615 --> 00:24:11.685 which is not available to do anything else. 455 00:24:12.295 --> 00:24:14.605 These companies, they have plenty of cash 456 00:24:14.705 --> 00:24:16.525 and they attract competencies 457 00:24:17.345 --> 00:24:20.325 and technical competencies are quite scarce, 458 00:24:20.665 --> 00:24:22.685 but as they have plenty of money, 459 00:24:22.795 --> 00:24:24.605 they can offer extremely attractive 460 00:24:25.005 --> 00:24:26.165 remuneration for these people. 461 00:24:26.635 --> 00:24:29.605 This competence is now working for artificial intelligence, 462 00:24:29.665 --> 00:24:31.925 are not available for the classical 463 00:24:32.185 --> 00:24:33.845 and traditional industries. 464 00:24:34.275 --> 00:24:37.525 This is the advantage of being strong, powerful, 465 00:24:37.745 --> 00:24:39.525 and full of financial resources. 466 00:24:39.895 --> 00:24:42.805 There are also plenty of issues about cyber security, 467 00:24:43.545 --> 00:24:44.765 et cetera, et cetera. 468 00:24:45.085 --> 00:24:48.685 A couple of very recent examples to conclude this film. 469 00:24:49.305 --> 00:24:50.525 You remember in the nineties, 470 00:24:50.805 --> 00:24:54.005 Stargate Stargate was a science fiction film. 471 00:24:54.745 --> 00:24:59.325 Now 20, 25, January the 22nd of January, 472 00:24:59.835 --> 00:25:02.965 what is announced by open AI here on X, 473 00:25:03.585 --> 00:25:06.165 we have created the Stargate project. 474 00:25:06.275 --> 00:25:07.685 It's going to be joint venture 475 00:25:07.795 --> 00:25:11.365 with a few actors including open ai, of course, 476 00:25:11.715 --> 00:25:13.765 including SoftBank, Mai 477 00:25:13.765 --> 00:25:16.725 or Csan, including Larry Ellison Rockle, 478 00:25:17.025 --> 00:25:18.085 and we are going 479 00:25:18.085 --> 00:25:22.925 to invest $500 billion in artificial intelligence 480 00:25:23.435 --> 00:25:24.965 over the next four years. 481 00:25:25.545 --> 00:25:27.325 That's absolutely outstanding. 482 00:25:28.285 --> 00:25:32.485 I already did discussed Masayoshi son investment cycle 483 00:25:33.025 --> 00:25:36.685 at SoftBank, SoftBank Vision Fund and so on. 484 00:25:37.385 --> 00:25:40.165 Now, the person is very much involved in ai. 485 00:25:40.945 --> 00:25:44.365 The opportunity I had to discuss about some investments 486 00:25:44.365 --> 00:25:47.965 where about we work, which was not exactly successful, 487 00:25:48.505 --> 00:25:51.205 but Massa Oran says we have to bring 488 00:25:51.775 --> 00:25:53.645 brain computer to life. 489 00:25:54.105 --> 00:25:55.445 So we have to be able 490 00:25:55.465 --> 00:25:59.965 to transform the biological brain into a set of algorithm 491 00:26:00.725 --> 00:26:02.365 combined with microchips. 492 00:26:02.575 --> 00:26:05.085 Those this is brain, computer to life. 493 00:26:05.555 --> 00:26:07.245 This is a fantastic dream. 494 00:26:07.735 --> 00:26:10.285 Successful or not, we are going to see that in the future. 495 00:26:10.785 --> 00:26:14.605 But what is interesting that SoftBank was in a number 496 00:26:14.665 --> 00:26:16.045 of different businesses 497 00:26:16.505 --> 00:26:19.725 and now they are a little bit catching up about ai. 498 00:26:20.435 --> 00:26:25.125 They had a very good start buying ARM holdings, the company, 499 00:26:25.335 --> 00:26:27.485 which Nvidia wanted to buy by the way, 500 00:26:27.625 --> 00:26:29.365 and the antitrust author said, 501 00:26:29.735 --> 00:26:32.685 don't even think about it when they bought arm, 502 00:26:32.905 --> 00:26:37.485 it is in 2060 and they pay $31 billion for the acquisition. 503 00:26:37.485 --> 00:26:40.885 2023, the company goes public at the value, 504 00:26:40.885 --> 00:26:42.725 which is 54 billion. 505 00:26:42.955 --> 00:26:45.885 Billion. That's a good deal, and today it's 155. 506 00:26:46.025 --> 00:26:47.125 That's a good investment. 507 00:26:48.105 --> 00:26:51.685 Now, the very best investment ever made by Mr. 508 00:26:51.935 --> 00:26:55.445 Masai Oran in the tech business is Alibaba. 509 00:26:56.105 --> 00:26:57.885 He invested $100 million, 510 00:26:57.885 --> 00:27:00.565 which was transformed eventually into tens 511 00:27:00.585 --> 00:27:01.925 of billions of dollars. 512 00:27:02.305 --> 00:27:04.205 The second one is Nvidia. 513 00:27:04.625 --> 00:27:08.045 Congratulations because he invested $4 billion in 514 00:27:08.105 --> 00:27:11.965 May, 2017 when the market cap was about 515 00:27:12.225 --> 00:27:13.445 $80 billion. 516 00:27:14.025 --> 00:27:15.885 It was already a quite high figure, 517 00:27:15.985 --> 00:27:18.685 but it has been modified by 40 since then. 518 00:27:19.305 --> 00:27:22.445 He invested in cruise. You remember the GM story? 519 00:27:22.905 --> 00:27:26.485 He invested two point something billion in 2018 520 00:27:26.585 --> 00:27:29.965 and sold in 2022 for two point billion something 521 00:27:30.715 --> 00:27:34.005 plus minus zero per cm open AI yet, 522 00:27:34.065 --> 00:27:37.845 but quite late in October, 2024. 523 00:27:38.625 --> 00:27:42.805 So NVDI is definitely a very high success arm, 524 00:27:43.065 --> 00:27:44.845 is quite good profitability. 525 00:27:45.305 --> 00:27:49.645 And so SoftBank Vision Fund is a very significant 526 00:27:49.895 --> 00:27:51.125 actor in ai. 527 00:27:52.035 --> 00:27:54.325 This is why, and you see that on the picture. 528 00:27:54.785 --> 00:27:57.925 The president of the United States is welcoming 529 00:27:59.115 --> 00:28:02.445 maan together with Larry Ellison and Samba. 530 00:28:02.985 --> 00:28:06.085 The joint venture is going to be funded by OpenAI, 531 00:28:06.445 --> 00:28:10.285 19 billion, soft bank, 19 billion or rl. 532 00:28:10.285 --> 00:28:13.005 We don't know exactly how much plus one or two additional, 533 00:28:13.705 --> 00:28:15.045 and at the end of the day it's going 534 00:28:15.365 --> 00:28:19.165 to be $500 billion over the next four years. 535 00:28:19.865 --> 00:28:22.125 But on this picture, there are two people 536 00:28:22.345 --> 00:28:24.165 who are absolutely missing. 537 00:28:24.945 --> 00:28:27.165 The first one is Microsoft. 538 00:28:28.165 --> 00:28:30.845 Microsoft originally was a financial partner. 539 00:28:30.995 --> 00:28:34.565 They provide a lot of funding for open ai. 540 00:28:35.065 --> 00:28:37.005 Now they say, oh, this is going 541 00:28:37.005 --> 00:28:40.445 to be a very strong technology partner together with Arm, 542 00:28:41.205 --> 00:28:45.245 SoftBank, Microsoft, Nvidia, or Rackl, et cetera, et cetera. 543 00:28:46.085 --> 00:28:48.325 Microsoft is no more a financial partner. 544 00:28:48.615 --> 00:28:50.805 Maybe it's a technological called partner. 545 00:28:51.545 --> 00:28:54.485 So it's now tier two in the process. 546 00:28:55.825 --> 00:28:58.765 The other one who is missing is Elon Musk. 547 00:28:59.475 --> 00:29:03.805 Elon Musk co-created open AI with Sam Atman. 548 00:29:03.945 --> 00:29:06.085 Now they are not exactly friends 549 00:29:06.745 --> 00:29:09.805 and Elon Musk brought open AI 550 00:29:10.105 --> 00:29:13.365 and Sam Atman to the court now adding 551 00:29:13.965 --> 00:29:15.765 Microsoft antitrust claims. 552 00:29:15.945 --> 00:29:19.245 We are November, 2024 and definitely Mr. 553 00:29:19.345 --> 00:29:22.285 Maersk, who seems to be good friend with the president 554 00:29:22.285 --> 00:29:24.405 of the United States is not a good friend 555 00:29:24.825 --> 00:29:26.285 of Stargate Project. 556 00:29:26.705 --> 00:29:30.365 The second event, which extremely recently happened, 557 00:29:30.475 --> 00:29:35.165 January 27, is deep seek a Chinese startup 558 00:29:35.785 --> 00:29:37.725 and they say, okay, we are doing good job. 559 00:29:37.905 --> 00:29:41.325 We are proposing an application which is almost as good 560 00:29:41.425 --> 00:29:45.805 as Chad G, but we didn't pass same price as Chad G. 561 00:29:46.545 --> 00:29:51.085 In fact, developing the application cost about 3% of 562 00:29:51.085 --> 00:29:53.525 what it cost to open AI to develop Chad, 563 00:29:53.565 --> 00:29:55.405 GPT 1, 2, 3, 4, et cetera, et cetera. 564 00:29:55.465 --> 00:29:59.325 And the consequence, what happened to Nvidia stock price, 565 00:29:59.705 --> 00:30:01.605 it went down dramatically. 566 00:30:02.065 --> 00:30:05.205 The company lost $600 billion 567 00:30:05.225 --> 00:30:07.365 of market cap in one day, 568 00:30:08.345 --> 00:30:12.205 $1 trillion evaporated in one day as a consequence 569 00:30:12.225 --> 00:30:13.685 of Dipe announcement 570 00:30:13.785 --> 00:30:17.405 and what the market observe about the efficiency 571 00:30:17.425 --> 00:30:18.485 of the application. 572 00:30:18.865 --> 00:30:23.205 Why? Because very likely all these investments are probably 573 00:30:23.915 --> 00:30:27.005 overestimated in terms of value creation. 574 00:30:27.305 --> 00:30:29.205 And there are a few guys here over there 575 00:30:29.825 --> 00:30:33.845 who can do a quite good job spending much less than all 576 00:30:33.845 --> 00:30:36.685 these big companies, which I already mentioned. 577 00:30:37.195 --> 00:30:40.165 Consequence Nvidia Verage down together 578 00:30:40.195 --> 00:30:42.285 with some other companies. 579 00:30:43.465 --> 00:30:47.245 Now the Chinese AI business looks a little bit better, 580 00:30:47.345 --> 00:30:48.805 and this is why, for example, 581 00:30:48.965 --> 00:30:51.125 a company whose name is Merit Interactive. 582 00:30:51.425 --> 00:30:53.965 So the stock price is skyrocketing 583 00:30:54.515 --> 00:30:58.925 because the one man's misfortune is outta the man's gain in 584 00:30:58.925 --> 00:31:00.685 finance with him that the portfolio 585 00:31:01.145 --> 00:31:04.045 and diversifying the specific risk. 586 00:31:04.425 --> 00:31:05.965 So if these guys are able 587 00:31:05.965 --> 00:31:07.885 to do a good job spending much less, 588 00:31:07.985 --> 00:31:09.965 the value is much higher stock cross. 589 00:31:10.075 --> 00:31:12.765 He's plus 20% in one day, 590 00:31:13.455 --> 00:31:15.445 which is absolutely outstanding 591 00:31:15.905 --> 00:31:19.925 and drives me to the first of my four conclusions. 592 00:31:20.225 --> 00:31:23.165 The first one is when you watch this video, 593 00:31:23.715 --> 00:31:26.445 unfortunately it's going to be obsolete 594 00:31:26.475 --> 00:31:28.925 because life moves on very quickly 595 00:31:29.385 --> 00:31:31.685 and from the moment I recorded the video 596 00:31:31.985 --> 00:31:33.925 and the moment you watched it, plenty 597 00:31:33.985 --> 00:31:35.325 of things will have happened, 598 00:31:35.615 --> 00:31:37.845 which makes this video a little bit obsolete. 599 00:31:37.865 --> 00:31:41.365 At least it'll give you some information about the past 600 00:31:41.915 --> 00:31:44.525 hopefully second conclusion, 601 00:31:44.525 --> 00:31:46.125 which is a little bit more serious. 602 00:31:46.465 --> 00:31:51.245 The financial power is hugely concentrated in an extremely 603 00:31:51.245 --> 00:31:52.805 limited number of hands. 604 00:31:53.605 --> 00:31:57.045 I described the six big players plus a few additional. 605 00:31:57.105 --> 00:31:58.845 You understand their financial power. 606 00:31:59.195 --> 00:32:01.485 It's a oligopoly, it's a strong oligopoly 607 00:32:01.485 --> 00:32:05.765 with outstanding operating margins, huge free cash flows, 608 00:32:05.765 --> 00:32:09.645 fantastic power to develop the business and take the power 609 00:32:10.025 --> 00:32:11.045 and take the control. 610 00:32:11.745 --> 00:32:15.885 Hugely concentrated power, certainly not goals curve. 611 00:32:16.385 --> 00:32:18.525 And now we have to reconsider, we have 612 00:32:18.525 --> 00:32:21.165 to rebuild the corporate finance theory. 613 00:32:21.555 --> 00:32:24.925 It's no more, it's normal, a log normal distribution. 614 00:32:25.065 --> 00:32:27.965 It is zero multiplied by infinity. 615 00:32:28.275 --> 00:32:29.685 It's completely different context. 616 00:32:30.105 --> 00:32:31.885 We have to start from scratch again 617 00:32:32.705 --> 00:32:35.805 and we have observed friends Elon Musk 618 00:32:35.955 --> 00:32:38.885 with Sam Atman, Microsoft yesterday. 619 00:32:39.485 --> 00:32:41.645 Microsoft Today. And about friendship, 620 00:32:41.665 --> 00:32:44.725 it reminds me is a very well known Raider on Wall Street, 621 00:32:44.915 --> 00:32:48.285 Carl Aiken, who used to say about friendship. 622 00:32:48.385 --> 00:32:52.005 If you want a friend, you should buy yourself a dog. 623 00:32:52.195 --> 00:32:55.285 It's about friendship in artificial intelligence, 624 00:32:55.545 --> 00:32:57.525 in finance, and on Wall Street. 625 00:32:58.055 --> 00:32:58.885 Thank you very much.