Power Lunch - July Fed Minutes, Etched CEO Interview, Latest Ultra-Wealthy Investments 8/19/26

Episode Date: August 19, 2026

The markets are moving higher as the Treasury Department unveils a plan to relieve the recent bond market pressure.  Brian Sullivan and Kelly Evans are joined by Former Bridgewater Associates Chief Market Strategist, Rebecca Patterson, and Cboe Senior VP of Retail and Alt Investments, JJ Kinahan, to break down the latest Fed minutes and give their take on the state of the economy.  Later, the anchors sit down for an exclusive interview Etched CEO & Co-Founder, Gavin Uberti, to talk about his company’s latest $700 million fundraising round led by Jane Street.  Tiger 21’s Michael Sonnenfeldt also joins the program to reveal the key highlights from his company’s Q2 allocation report which provides an overall picture of where the ultra-wealthy are investing their capital.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Moderna exploding higher bond yields. They're lower all under the surface with an otherwise quiet day for stocks. Welcome to Power Lunch, everybody, with Kelly. I am Brian. Long-dated bond yields, they're down. Uncle Sam stepping up the debt buybacks. The meantime, health care energy, new records, the set up for markets and the fate of the A-I-trade all coming up.

And remember this guy, Koi? He was on set with us just months ago. Now his parent company, Unitri, is leaping higher in its Shanghai debut. So where can investors get a leg up on robotics here at home? Plus, we're not done with chips, 324-year-olds, a $21 billion dollar valuation, and one of Silicon Valley's hottest startups. The CEO of Etched joins us exclusively. But let's begin with some breaking news out of Washington, D.C.

The July Fed Minutes just posted with this is all we get out of the Fed anymore, Steve. The minutes for the July meeting, Kelly, say that most supported maintaining the current range. However, many thought a policy tightening would likely be necessary if inflation did not decline. Important to note there was a softer inflation report after this came out. Participants thought new information that they gathered between the meetings could help them make a decision to take some of the uncertainty out of it. Some saw financial conditions not tight enough to bring inflation down to 2%. Chairman Warsh spoke in favor at this meeting of six meetings per year, saying it would allow more information to accumulate between meetings. There's quite a robust inflation debate at this meeting.

Several saw price increases as broad-based over the past year, saying underlying inflation looked to be elevated, even after accounting for tariffs and those higher energy prices. They debated most thought inflation would step down, but some noted the possibility it might be more persistent. Several, they debated whether or not businesses could pass along, these higher prices or would they pass along to consumers and the impact of the AI buildout.

Just a couple more things here. Inflation risks were seen as skewed to the upside, and there was concerned about inflation expectations getting out of control after having been elevated for so long, especially with success of supply shocks. The labor market was seen as stable. There was concern a lot of talk about AI and the impact. There were several noted fears of widespread job loss from AI

had not materialized, but they discussed the possibility that AI developments could disappoint. This is something around the table at the Fed, where they said an AI discipline could lead, quote, to a significant repricing of stocks with consequent negative effects on consumer spending. There were also concerns about repricing of assets generating tighter financial conditions. So quite a lot of debate going on at that table. I guess the story here is Kevin Warsh wanted a family fight. He kind of got one over the inflation outlook, along with some concern about AI developments,

including, by the way, one where an intermeeting incident involved disruption to transaction settlements that was discussed. It was a public thing that happened in June, guys. but that made the minutes here. So there's a lot of meat there. I also want to get to the table setting because he wants the family fight around that table, but it sounds like he wants six family fights, six meetings a year.

There's eight this year, so two would go away. Any mention, Steve, of what might happen to the press conference as well, because I know from Steve Leesman, that maybe Chairman Warsh is not the same fan of that presser as his predecessors. Yeah, I don't know about that. You know, I think he was quoting George Schultz, who said, only have a press conference when you have something to say.

And it may be that Kevin Orsch doesn't feel like he has something to say after every meeting. And honestly, the way he answered some of the questions that didn't answer them, it wasn't clear he had something to say. So there's a question about whether or not he finds that rhythm, essentially, of how to either not answer the questions or to actually answer the questions that are out there. So there is nothing in the minutes about the press conferences, though you can bet that that is something under consideration, Brian. That's fascinating.

Steve, thanks. Like you said, a lot of meat there. We'll talk about it. Our Steve Leasman for now, we appreciate it. We have our wonderful panel standing by, so we'll see what they think. Joining us now is JJ Kiddahann, senior vice president at Sebo. And Rebecca Patterson, the former chief investment strategist at Bridgewater. And boy, I mean, there's so much more to talk about.

Rebecca, why don't you just kick it off here? Of everything that Steve just reported in the minutes, including maybe two fewer Fed meetings going forward. What jumps out to you? I mean, the fact that you had many participants suggesting that they would favor a rate hike if inflation doesn't moderate further before the September meeting, that's important. In Fed speak, many suggest eight or nine participants. So we know it's not just the three dissenters that we heard of at the meeting, but there is a larger group of Fed participants who want to see inflation come down

or else they are going to get more hawkish. Now, we know we've had a softer inflation print, CPI, and PPI in recent weeks, but we still have more inflation prints to go. We have PCE and then, of course, another CPI print, I believe, on September 11th. So basically, this tells me we're not out of the woods. It is going to be very data dependent over the next month or so before the next meeting. JJ, would you care if there were six Fed meetings a year versus the current eight Fed meetings per year? I don't think it matters quite as much, to be honest with you, Brian.

But the one thing I would say they probably want to do is make sure that they do then do a press conference after each one and keep people informed. If you're going to do fewer meetings, you have to let everybody know what's going on from one meeting to the other. I think to get rid of the meetings and to get rid of the after talk or whatever you want to call it is a mistake because then it lets the market sort of speculate on what the next step is. So let me follow up on that then. So let's assume that Chair Warsh gets his way. We go to six meetings from eight. Maybe there's not as much information. What would that mean for options markets?

What would that mean for alpha, for any volatility in the market? Well, I think it would add volatility for the options. It would seem to. It would be fantastic. Yeah, because you don't know, right? You're going to add that vol, that gamma, I guess. But I don't think that in general the market likes volatility being added for a reason that they feel can be mitigated. And in my opinion, I don't think 8 to 6 is actually as big a deal,

but I do think 8 to 6, with a lack of information, becomes a very big deal. And once you have that, you get wilder speculation in terms of what's going to happen between meetings, et cetera. And I don't think that long term that's actually healthy for the market. Same question, Rebecca, because when I hear fewer meetings, to me, that feels like a move in the wrong direction for the following reason. The markets are incredibly sophisticated.

Wouldn't we be better off? You could give me a daily Fed meeting. I want to know at 2 p.m. every day where do they think that red should go up rate should go. Why would we want to stick with? I mean, them setting it in the first place often creates these issues where they're always behind the curve or a little bit. They have to play catch up. Waiting longer in between each meeting feels like it could increase the risks of a policy error. I mean, the good news is the Fed can always have an intermeeting meeting, so to speak, right?

So if something was happening and they felt the need to address it, they could bring everyone together. The risk of that, of course, is when that's happened historically, people think there is an emergency, and perhaps they are behind the curve on whatever it is is going on. So they have a way to rectify that, but it's not optimal. I do think it's important to take a step back and remember that while monetary policy is the key thing the Fed does, federal reserve officials have a lot of other things that they need to do every single day, whether it's doing banking supervision or it's making sure America's payment systems, working well and looking for improvements, always looking for better data collection and analysis so they can do the right thing to help take care of the economy. So going from eight to six gives them more time to do a great job on the rest of what they're supposed to do when they go in those seats. I agree. I think eight to six isn't the end of the world as long as there's

six meetings with great communication. The risk, if you don't have the eight meetings, is that you're going to have members of the Fed current and former who are on your airwaves even more. And then the question is, is that communication enough to offset fewer meetings, or is it creating more noise and hence more volatility? So it's going to be interesting to see how this plays out. Or more private meetings, you know, which is always the concern. Let's see how Rick feels about this one. Rick Santelli is over at the CME, I think it is. So, Rick, on this question, I mean, should they do fewer meetings? What do you think? Well, first of all, before, we even get into that. Do you watch all these press conferences and listen to all the questions?

Well, I'm plugged in at 2.30 here when they start, so I will answer yes. I honestly don't think we'll be missing much. But here's the funny thing. I almost disagree with what everybody, like, I'd rather than have more meetings and tell us less about it. Because anyway, that's just me. What do you think? You know what? It's kind of a feel good thing, I guess. You know, touchy, feely, feel good, being led by the Fed. Listen, I understand, here's the real problem that nobody's talking about is we've gone through.

literally, decade and a half of major manipulation by markets, in markets, in interest rates, by central banks, not the least of which was the U.S. Federal Reserve. So unfortunately, Mr. Worse gets to sit in the seat at a time where all of that manipulation means the markets might not be where they're supposed to be because of things like balance sheet and all the turmoil that the Fed is caused by keeping rates too low. So now, at this point, to try to start to do the right thing, and I do think it is the right thing, let the market participants figure it out on their own, well, it's just problematic because of where the market is and what the Fed has done in the past. That's my opinion. Now, as far as what happened today with Besson,

very interesting. If you look at tens and 30s together, it's obvious that 30s had a much bigger, dramatic drop in percentage terms than the 10s did, as you see on that chart. But I also want to point out on that chart, You notice the way rates are now moving down again after the minutes. Hold that thought. Let's look at two years for that 12-hour period. You can see that two years dropped really nice on the minutes that were just released, but they were much higher in yield because the Besson Comits, of course, deal with long maturities, 10-year, 20-year, and 30-year.

And finally, it really flattened the curve. And I think that's one of the main reasons Besson picked this time to do it. There obviously are a couple of very large shorts playing around. around in that 30-year bond and his timing on doing this really sent the message and a signal to the markets. And I think that's not a bad thing. Okay. So Rick, I want to go back to you on your first point. JJ, please then jump in, obviously with your good friend Rick Santelli. Rick, so you heard JJ at the top say, yeah, he doesn't care the way except that he thinks it will raise volatility if we were. And it's a big if. There's no sign we're going to move down meetings.

But if we were, it would increase volatility. You don't sound worried about that. You know what? First of all, I don't see the volatility I used to see in the 80s or 90s, okay? So I grant you that. But then again, there is so much going on. We've tried to put big corral fences around so many markets. Maybe the volatility would pick up, but these are just kind of opinions on conventional wisdom in many ways. I think the market today was quite orderly in how it approached that. And I will stick to the following notion, whether it was easing in 24. that the market kicked back on and rates moved up bucking the fend trend. Well, if the markets didn't like Besson's message today or in general or if they believe

the Fed ought to tighten and they haven't, well, the markets are free to do what they want. And basically watching the way most of the Treasury curve responded today, I don't think it's an issue at this point to try to handicap what's going to happen if this happens or if this happens with meetings. Right now, everybody's pulling their hair out. And in my opinion, markets are awfully damn orderly. Well, Rick, I agree with you. We both grew up with free markets for free men, so to speak. But all that said, I also think that when you're going to stop communicating, no matter what the business is, that you have to segue your way out of it. Wait a minute. Wait a minute, JJ. I love you. But wait, we're talking about 17 people

telling you what to think. Okay. I'm not sure to tell you what to think. They're telling you what they're thinking, Rick. I think you could look at the data. But okay, so we have 17 people manipulating rates. We had Besson try to make a change on the long end today, and people call him irresponsible. Okay, what's the difference between him manipulating slightly on the long end and 17 people completely manipulating and controlling interest rates on the short end? How do we know where rates are supposed to be? How do they know what rates are supposed to be? But if they are wrong, the market will put it back into a line. Right, so you're back to the market. But hold on. Of course, you're always back to the market. But at the end of the day, Rick, I do think it

helps the people who are setting the policy communicate what you're thinking. Then you can disagree with them. The market can 100% disagree with them. You just cited two great examples. And I think that that's really healthy when they do. But I do think having good communication, just like a CEO running a company, is a really important. Rebecca Patterson, I want to get your take on this as well, because obviously you were part of strategy at about a hundred billion dollar hedge fund, one of the most important systemic global hedge funds in the world. Would you in your role, would you want more information or do you want to, I think, to send Rick Centelli's point, kind of make up your own mind and not be a little more spoon-fed what they're thinking? Well, first of all, I think

most investors make up their own mind. They'll look at what the Fed says and does. They'll look at the data, and then they will make up their own mind. That is how they make money by taking a view. So I don't think anyone's being spoon-fed, per se. I also have an issue with the word manipulation for the Fed because setting the policy interest rate is not manipulation. It is their job. It's the number one job is to figure out what are the... It's not manipulation. It is saying this is where we think the economy is going.

Why can't we let the market do it? Get rid of the Fed. Ah, and you've seen how well the Taylor Rule has worked over the last few decades. Well, the modify it, make a better one, but it's not any more or less air-prone and 17 people. But that's exactly what Kevin Warsh is trying to do, Rick. He is creating task forces to try to review their processes and improve them, which the Fed always tries to do. Kevin is doing it in a formal way, and I think that's great. But they're always trying to improve their processes, and they have modified their rules over time, and they're going to do that more going forward. I wouldn't call that

manipulation, and I wouldn't call that just 17 people sitting around with their finger in the air. I mean, you've got hundreds and hundreds of people. But that's kind of what. what they do. We got rid of umpires, and now we have computers calling balls and strikes. Maybe we should think about that more. I think you're great at making good TV, but I think what you're saying is not reality for the Fed or the U.S. economy. Maybe not for the current generation. That's never lived through a treasury bear market. I have. Yes. I'm not trying to jump in the middle. I just have a genuine question because I wonder about all the same stuff that Rick does. you know, we've had LIBOR, we've had, what is it, so far now.

I mean, all these kind of market set, quote, unquote, overnight rates. And I do wonder sometimes, you know, can, I don't know, maybe the LIBOR crisis showed you can't. It was just people setting those rates anyway. You are going to have investors, market participants who are trying to get optimal outcomes for whatever their businesses, for whatever their clients are. The Fed is obviously a key input into that. the U.S. Fed funds rate is the anchor for the global financial system. And it sets the tone for the whole yield curve. If you look at global bonds around the world, they take their cues from the U.S.

If you look at mortgage rates, auto rates, corporate borrowing rates, where do they start? They start with what the Fed sets the Fed funds at. So again, I think that chairman. So they're gaming the Fed. It's not gaming. It's your business. If I'm a large corporation and I'm trying to figure out. Look at the data and they trade on what they.

think the Fed's going to do. So whether the Fed's right or wrong, they don't care about that. They just want hints at to what's the Fed's going to do. I think that's treacherous. Well, I think they would probably prefer the Fed to be right, because if the Fed is working well, that's usually good news for the economy to have strong growth and stable and low inflation. So I don't think they don't care, Rick. But again, I... Well, they're not doing a very good job on either one of those pillars, are they? Rick, the one thing I guess I would say, I agree with you, the market's should always dictate how things go. But at the end of the day, shouldn't they dictate, can't

they dictate off a policy or off something else in order to do that? And I think that that's where the disconnect is, is my sense is that you just don't want a Fed, you just want a kind of a free-for-all on a market. And I shouldn't even use the order free-for-all. Markets do everything. But I think what the Fed does is provide some sort of anchor for everybody to trade one way or the other, and the market's opinion still will outweigh the Fed in my opinion. We'll leave it there. But I think, listen, either way, I want to be clear to the audience, if you're just joining us, there's no sign the Fed is going to reduce the number of meetings. Steve Releasman reported that's what Chairman Warshot of hinted he wanted was to reduce the number

of meetings. I wouldn't even know the mechanism, Kelly, for how that would happen. Maybe you do. I don't. Do you divide up the calendar the way that they have a longer break in the summer sometimes? They know, they vote on it? Be like, we're going down to six meetings. No, it doesn't have to be every six weeks by a rule. That's what I'm saying. They'd have to change their own, right? Rebecca, they'd have to vote to change their own rule, which is possible. They're just an organization. They can do whatever they want. I think they have a minimum of six meetings a year, so they can go down to six without

getting congressional approval or anyone's approval. It's not hard for them to make that change. I did not have fed 18-minute debate around the number of meetings at the top of this show's bingo card, but this is why I love all of you and this is why I love live television. Rick Santell and Rebecca. Lord did I. Listen, welcome. Rebecca, you've done this a million times.

You rolled. It's all good, JJ. We're going to ask you to probably stick around. I love to have your view at the end of the show as well. Thanks, guys. Rick, thanks as well. We're just getting started. Full menu still coming for you. What are the wealthy buying in this bull market?

Tiger 21's Michael Sonnetfeld will tell us. And Jane Street just made an investment in a chip startup led by three Harvard dropouts. We will ask that startup CEO why Jane Street uses their inference systems. But first, the big partnership between Alphabet and NVIDIA. Those details are next. Marvell shares jumping on a major expansion of its custom chip partnership with Google. We got a lot of time to dig into this. With Christina Parts at Evelace now, Christina, welcome.

We have so much time. I'm just, I can speak slowly. What is happening today? For the audience, it knows I was just like, oh, now we're going to have no time to chat because of the great A block. But now I'm here, Marvell and Google have a deal. The two signing a commercial agreement for Marvell to develop custom silken that attach us to Google's custom chip ecosystem. It involves inference, storage, networking chips, memory controllers, all of that included, and is definitely a wider scope than what the street was expecting. And it comes,

unfortunately, at a cost to existing shareholders. Marvell granting Google a warrant to buy up to 59 million shares at $206.58. Over a million of these shares vest during the first year of the deal, and then the remaining vest only overtrenches when Google makes purchases. Marvell's shares, you can see up almost 8%. Broadcom on the other opposite end. They're competitors. Google's custom chip business was always Broadcom territory. Now, Marvell is inside. Broadcom sentiment also has been, I would say, maybe, like, a little poor just over the last few weeks. There specifically reports Google could also engage AMD for some of its custom chips, the version 10 of the TPU. The bigger picture, though, is that every hyper-scaler essentially is building custom chips tuned to their own systems to lower their total cost of ownership, and, of course, lean less on Invidia.

I tried to do that fast, so we have more time to chat. You know, you look great today, too. Again, for the audience, it's because they're wearing matching dresses. So many inside jokes that were supposed to try. And I'm blaming me for the time when I'm not producing this show. And Kelly's like, oh, you look so great today. Invidias, H-200 chips, small batches into China. Remind us, what is the H-200?

Is that one of the older? It's a little bit older. A little bit older, but still valuable. Very, very valuable, especially in the training stage. So in March, I saw Jensen Wong in the hallway, asked him specifically, did you get a deal with China? He said, yes, they got a green light. In April, something. happened on the China front, they stopped the, like the deal was in place, the orders were in place,

they just hadn't shipped the chips to China. Now we're starting to hear more news trickling from specifically the FT today saying that 10,000 chips had been sent to Tencent and Bight Dent's to Chinese major tech giants, as we know, and more to come. This falls in line with what NVIDIA has shared that there are deals. It's a big question as whether this is going to be incremental to guidance in this upcoming earnings report on August 26, because it could potentially be, you know, billions and billions of dollars, especially if all of the smaller firms, too, are allowed to buy these H-200. So it is a strong sign for NVIDIA, even though the shares aren't really reacting because there's been so much back-and-forth with this. And sometimes they even exclude whatever's

going on in China from kind of what analysts are looking for just because it's so volatile. But exactly, it hasn't been modeled in reports for so long because of the back-and-forth in the headlines. And NVIDIA hasn't actually put out an official statement today, too, confirming this. So you saw him in the hallway here? Just wandering the hallway? No, at GTC. And he actually got mad at me because I, tweeted that I saw him as I came out of the bathroom. Oh, he's going to get mad at me for even

sharing this. But the semantics didn't look good because I said that I was coming out of the washroom, ran into Jensen with his security guards. He confirmed the China deal that made a story, but then it was more, I came out of the bathroom. I'm on live TV and I shouldn't be sharing this because now he's going to be even more mad about this. Keep sharing. I think it's fantastic. We have one more. If you want to go to SK Hinex, no. That was a really nice, long, meaty segment, Mr. Ponce. Nelson, listen, I appreciate it. Thank you. going to get in so much. No, you're not. Coming up. Why are the ultra wealthy suddenly selling their favorite investment? Ask me. Realistrate. We're going to ask you. We might ask Christina, who knows?

Michael Sonnafeld of Tiger 21 is with us next. That's next. Stick around. All right. This is fun. Let's get a very rare and inside look at out of the 1% of the 1% are investing. Some of the most successful entrepreneurial families and people in America belong to Tiger 21. It's a global peer network for ultra wealthy investors, nearly 2,000 members, roughly $200 billion combined. In every couple of months, Tiger asks its members a simple question, how are you investing and where are you putting your money right now? Let's find out joining us once again, Michael Sonafeld founder and chair of Tiger 21. And I've been, you know, we've been talking for over a decade, Michael. And I know that your members, many of whom I've gotten to know personally

and they're wonderful, they love real estate, except now they seem to be. to love real estate less than ever before? What's going on? Cash, first of all, is at the lowest. It's been since 2007, 7%. It had been 12% like rock steady for 20 years. Now it's 7% and private equity, all-time high at 34%. And some of that is allocation and some of that is distributions are slowing. So people are holding on because they have no choice and they're continuing to invest. What do you mean they have no choice? In other words, when you are in a private equity fund, or you're locked in.

You're locked in, and the distributions have been much less in the last few years. Some may be not by choice. Yeah. I'm just throwing that one out there. Yeah. It would seem to make sense that if you're selling real estate, you make cash. So cash should go up. But yet real estate and cash are both down.

I'm not tracking that one. I think the real estate is not so much down as private equity and now for the first time public equity has raced ahead of real estate. This is the first time that I can remember that real estate is number three. It had been king, but it's more that private equity has gone up than real estate has gone down. Are the wealthy a leading indicator or a contrarian one? Well, first of all, we're entrepreneurs who are preserving capital that's different than others. But when entrepreneurs, we have 2,000 entrepreneurs who've built great businesses,

So they're going to invest in great businesses. That's one reason the private equity is so high. If you took the same cohort, we have about $300 billion in assets, that's about $140 million per member. If you take that same cohort but not entrepreneurs, what you're going to find is not as big a private equity allocation because they don't have the expertise. It takes a lot of expertise. And these are not just fund investments. These are owning companies and owning direct stock in private. companies and venture capital. That takes a lot of talent. That's what our members bring to the

table. And I know that public equities, the stock market, what we talk about every day, right, that has historically not been the most loved place for your members. But I do know that if I had some of the wealth that they have, and I've watched the market double in five years, and their wealth is probably doubling in five. I might get more interested. So one of the amazing things is obviously one of the biggest plays is, AI. And what distinguishes the tech bubble of 2000 with today is all of the new technology startups in 2000 were small companies. But if you wanted to play AI, you could play the Big Seven, the metas, the Googles, the apples, the Amazon's. That was what was fundamentally different.

So if you wanted to do the AI play and you've done fabulously well, you're buying world-class franchises that would be great even without the AI, and you see what the AI has been doing. They, you know, we're always warned about debt crises, debasement, and that trade is flaring up today because of what's been announced with this kind of treasury operation twist. Crypto is higher again. Your clients have just a very, or your members, a very small allocation, 2% I think to crypto. Yeah. Would anything get them back into it at this point, or are they looking elsewhere? Well, when you say back into it, I would say when you're preserving capital as opposed to being a

full-time Bitcoin investor. Gold and Bitcoin are roughly the same, both about 2% assets. But what that really means is a subset of our members have 5 and 10 and 20% and others don't believe in it at all. So we have a lot of believers. I don't think it's ever been much higher. And you see crypto's having a fantastic week or day today. It's kind of amazing. But gold and crypto play much the same protection and safe haven as one another. It's just how you play it. Outside of the asset allocation report, one thing I like about your talking to your membership

is that it's people that might have started with one franchise or one self-storage or one Verizon store, then they have 100. Maybe they sell it, right? It's literally the American dream. I mean, I've met people with parents or high school dropouts and then they become fabulously wealthy. Do they feel like, I know you talk to a lot of them regularly,

Do they feel like it's a good time to start a business right now? Is anybody worried about bubbles? Kind of Kelly's point? I had a partner when I was 25 who said the deal of a lifetime crosses your desk every week. You just have to be looking for it. And I think our members have had a lifetime of taking that attitude. So there is excited today. One of the things that's amazing, one of the reasons the private equity allocation is so high is 20 years ago when you sold your company,

you probably sold it to a corporation that paid 100% for your and you were out. Today, you're selling it to a private equity fund and they're having you stay in with what's called a rollover. You have to keep 20% or something. So they're really excited. And if your company is growing in a private equity mode, you'll get more for the quarter that you held on to than the three quarters you sold five years from now. So that's one of the other reasons private equity is so high. And another more positive take on an industry that's been under a lot of pressure this year for sure. It's fascinating.

Michael, thanks. Really good to see you. Great to have you on today. Michael Sonnenfeld of Tiger 21. Coming up, the chip startup that Jane Street is already using, the CEO joins us next. Welcome back and let's get to one of the busiest names in the AI and chip space right now. All over the Wall Street Journal's front page today. The company is called Etched, and Jane Street liked their inference system so much that they led the 700 million.

billion-dollar series C round, giving this company a $21 billion valuation. And many of the Blue Chip Silicon Valley VCs and investors have joined in from Kleiner Perkins to Sequoia and Andrescent Horowitz. Jane Street was actually etched's first customer and is actively using the company's racks in their data centers. Joining us now as Etch CEO and co-founder Gavin Uberti. Gavin, welcome. It's great to have you here. Congratulations.

Great to be on the show. When and how did you start the company? We started out and raised our seed capital around three years ago, and it's been a crazy journey since then. And it's so exciting to go see our first systems shipped a customer hands and to finally be getting used. How many employees do you have? We're a little over 400 right now. 400 employees, three years old. I ask because, you know, this is a new company that's reached a $21 billion valuation in a very short period of time.

What's the plan? What do you think business is going to look like a year from now? Well, we're a big believer that if you're going to do a hard thing, you should do the whole hard thing. So we don't just build chips. We built the chip, the server, the power delivery system, the rack, the interconnect, and especially the production. And over the next year, we're going to go double down on that and invest very heavily in building way more capacity. Not to overly pry about your age, but did this start when you were in college? I dropped out.

So give me the whole timeline. I want the Gavin Uberti story. I dropped out three semesters into college, but really it's not a story about me. It's a story about the whole company. We're lucky to have a ton of folks from many of the best companies that's still looking valley. And it's the team that's been able to help us move as quickly as we have. So Gavin, okay, you dropped out because you obviously saw something. You saw demand that wasn't being met in the marketplace.

There was something that you created where there was a hole in what it existed before. or would be a hole in the future. What did you see in the market that didn't exist three years ago? GPT3, that when GPT3 came out, people didn't realize this was going to be a massive, massive market. Why? What did that do that didn't exist before? Well, the thing about GPT3 is that it was much smarter than its predecessors, largely by virtue of being way bigger. And that made me very confident that models.

would keep getting smarter as time went on. And if that happened, there would be enormous demand to run them. Now, when people are talking about training, training, training, people didn't realize the cost of training is kind of a fixed price. But if you want to go ahead and serve to many, many billions of people, that inference costs is what scales. We said, if we're going to go do one thing really well, we're going to build the world's best inference solution. That's what you see behind me. As Robbie Whalen put it in the journal today, you've raised $2 billion on the strength. of a product that was just an idea four months ago. So what is the new idea that you're working on? And what does it do to make clients like Jane Street or anybody else better?

Well, what it does is we have two core technologies, low voltage inference and cluster scale memory, and they allow you to serve way more inference for the same price. And now we're doubling down on that. We have multiple new product lines being built, also to go serve inference very low cost and very fast, and working on scaling production. The fact is, it's not enough to just build one of these racks. Now we have to go build gigawatts. And how last question, Gavin, how do you make sure that the next kid, the next three Harvard dropouts who are listening to this right now and saying, we're going to do him one better,

that they don't come and come up with an even better technology that's going to render you obsolete in a very short period of time? Well, no, we need way more entrepreneurs in the infrastructure space. This is going to be a massive trillion dollar buildout. And there have to be entrepreneurs at every level. the stack, helping build power semiconductors, new bare PCBs, new ways to do fabrication, new ways to do packaging, that I want there to be way more folks playing in the stack so we can go use of technologies to make even better inference solutions.

Well, we'd love to talk more with you, Gavin, going for. I want your point of view on data. I'm going to ask him everything. We're going to speak to this guy again because there was another 24-year-old Harvard dropout who started this thing called the Facebook, and that guy's done okay. I just want to point that out, Gavin, you may be the next. You might be bigger. Who knows? 24 years old. We have a long way to go, but I'm really excited.

Thank you for joining us today. And it takes a lot of maturity to deal with this much attention and money at 24. Really appreciate it, Gavin. Thanks. My pleasure. Gavin Uberti for matched. All right, let's get over to Frank Holland with a CNBC news update. Hey, good afternoon, Brian and Kelly. President Trump today nominated Dr. Heidi Overton to lead the Food and Drug Administration. Overton currently serves as a domestic policy advisor at the White House and briefs the

president on various health issues. In a truth social post, the president wrote that health secretary Robert F. Kennedy Jr. says, quote, Heidi is always right. Overton previously served as the chief policy officer at the America First Policy Institute, a conservative think tank. Harvard has agreed to pay $53 million to settle claims that a former employee stole cadavers donated to the medical school for research and then sold them. Cedric Lodge, who worked at the medical school morgue, pleaded guilty in December to the illegal sale of human remains and was sentenced to eight years. And WMBA star, Sophie Cunningham, tells USA Today in a new interview that while Commissioner Kathy Engelbert has done a lot of good things, the league needs leadership that is bold, confident, and wants

the best for the players. She said that's a position that could be open at the end of the year. Engelbert's current contract expires in December. Brian, back over to you. All right, Frank Colin? Thank you very much. Thank you. Coming up, the parent company of this robot here called Unitry, sword in its public market debut in China. What about other robotics plays? Perhaps one's a little closer to home. That's what our next guest will tell you after this. China's robot boom, now hitting the stock market. Unitary Robotics, soaring 460 percent. And in its Shanghai debut, company behind these running, dancing and back-flipping robots now valued at about $50 billion. But Unitary, not the only robotic stock that might want to be on your radar. That is the focus for

Today's market navigator and your next guest comes with PICS, joining us Zeno Mercer, head of robotics and A&I research at Vetify Zeno. Advantec is one that you like that's Taiwan listed, so I'm going to move on. Cloudflare, a name I know, what's the robotics hook there? Yeah, so I think the robotics hook is more of a longer-term player, but let's look at what Cloudflare is today. It's the glue that connects a lot of the modern Internet. It's security, it's connectivity, a lot of the framework and backbone of what connects

devices, even ourselves right now to each other. Now, the longer-term players, and this is not even something they're talking about yet. So let's kind of separate digital infrastructure from the physical infrastructure. What we like about Cloudflare is they're rebuilding for inference at the edge. And again, the world, we're talking about data centers and inference a lot, even, I guess, just a few moments ago. But the real opportunity that's going to be several trillion dollar, if not bigger than AI and data centers will be the robotic space. Now, you don't just have individual robots acting out of their own accord. They're going to be connected, tethered, and sharing information to a systems level controller. Now, again, Cloughler hasn't talked about this,

but if you think about where things are heading and where their CEO recently commented that agentic traffic, basically AI initiated traffic is now surpassing humans, we're on path where that's going to be, you know, thousands of times more traffic than humans. And we're going to a point where robotics is going to be a part of that conversation. They need to be secure, connected, controlled, and working properly. And so the real play here is that as we start to see more agents and embedded devices and robots and drones and all sorts of things orchestrating together, this is a type of company that can help secure and manage that.

They even have added areas like agentic commerce. So, you know, look out Visa and other players that are involved in commerce. If commerce shifts you more robot and agentic traffic, you know, they're a player that already has the backbone and pipes that make it happen. And they're innovating at a very fast level. You know, real pleasure to get you on, Cloudflare. And we got the opportunity to kind of rerun the robot video, which is always a win on TV. Just keep running the robot video. Really appreciate your time.

Zito. Thank you very much. Have a great day. More power lunch right after the short break. As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward. I think we're all part of an ecosystem, and I think that's what makes America great. I'm David Gekler. I'm chairman and CEO of Sandisk. It's not one individual company. It's not one individual person.

It's not one individual innovation. It's everybody working together, everybody building on other ideas. that just creates greatness. When you roll that forward for 250 years, you end up with where we are today, which is a spectacular place to be. Sandus builds semiconductor storage. Anything that you use in your life

that's technology-based and stores data, that's what we build. It's really been this spectacular story over the last three decades. That removable card that you put in your digital camera, that was like the genesis of the Sandus brand. I think innovation and technology have just played a tremendous role in shaping the future of the country. I think this is a big part of the American system that just relentlessly rewards innovation, risk-taking.

And here we are at 250 years. Think how far we've come. And it's this kind of relentless drive to improve the future. It's this optimism that the future can be better if we're willing to take risks in the present, and we're willing to change things, willing to innovate. I think that's the story of American business. I think that's a story of America. Welcome back, and we are welcoming back. Cibow's Senior VP of Retail and Alt Investments, J.J. Kenahan.

For some deep final thoughts as we wrap up the show, we've covered a lot of ground. What's been left undiscussed? Or where would you kind of focus the mind? I think for the next couple of days where I would focus the mind is on the health of the consumer. And, you know, we've seen that it's been pretty good. If you look at some of the earnings that have come out so far, far. You've had a Home Depot. You've had Target. The stocks may have gone down, but it's not because they didn't meet their KPIs. And so, you know, all the ways you measure a business were good. And we're

going to see Walmart. And Walmart tomorrow, we're expecting about a 3% move overall is what the options market's saying. What's interesting to me is, as of noon today, we had seen about seven times a normal amount of put trading we'd seen in there. So we'll have to watch the downside on there, especially at the 115 line. And so we'll also get Ross stores tomorrow. That one has been a lot more bullish activity, but I think what it's also showing is that for the past quarter at least, we haven't seen the effect on retail customers in stores that we thought we would. Do you think the consumer is strong? I think the consumer might be trading down, but it's still spending money on a lot of things. Let's face it. When did you come in from

CBO today? I just came in today. I was at O'Hare recently. You can't even walk through it. Oh, I was going to use the restaurant example. You can't go out to a restaurant that's not crowded. It's really unbelievable to me how much money people are spending on that. But that, to me, is also the biggest fear of interest rates going higher will be credit card defaults as the amount people have to pay month to month. We'll go up with that. I mean, they also say there's a wealth effect from the strong stock market. And that's certainly in some segments more than others.

But, yeah, it makes sense that that's having an impact, maybe carrying through. It is shocking to me that there wasn't a bigger effect from the spike in oil prices, notwithstanding that it may yet go up again. Well, we also had inflation with the Brewers winning 22 to nothing. Last night of of the Mariners going after your cubbies, JJ. I'm just throwing it out there. Cubs being the white socks, two in a row. There we go.

The battle is Chicago. J.J. Kinnahan, really love having you. Always a pleasure to be here. Thanks, guys. Thanks for watching, Power Lynch, everybody. Closing Bell starts right now.