Rich Habits Podcast - AI & Bioscience w/ Miles Harrison (CEO of Conexeu), SK Hynix IPO & Blue Origin Fundraise

Starting point is 00:00:00 You are listening to the Rich Habits Radar, our Friday episode of the Rich Habits podcast where every Friday morning we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name's Austin Hankwitz. I'm joined by my co-host, Robert Croke, and the three things sitting at the top of our rich habits radar this week include Trump saying the Iran ceasefire is over. Yeah, that just happened. S.K. Hynix going public on Friday.

Starting point is 00:00:27 and the U.S. Treasury warning of an AI bubble, like straight up U.S. Treasury. Really interesting. But before we talk about these three super important radar points, Miles Harrison, president and CEO of Connectu, is joining us on the show. Our conversation is going to be about the intersection of artificial intelligence and biotechnology and how his company Connectu is now operating inside of a massive tailwind created by the rise of GLP1s. I mean, it's like buzzword after buzzword after buzzword. It's really cool. It's a great conversation. We filmed it actually a couple days ago here.

Starting point is 00:01:01 So we're going to drop it into this episode before we get started because we're really, really excited about it. And y'all are going to love it. So we'll see you back here in about 20 minutes. All right. Let's jump to our conversation with Miles. All right, everyone. So before we jump to our radar points for this week's episode, we've got a guest joining us that I've been really excited about. And I want to set this up because it ties directly into something that we've been watching all year long. Back in January, Eli Lilly and Invidia announced a billion-dollar AI-powered drug discovery lab. Lilly biologists working now side-by-side with Nvidia AI engineers over 1,000 Blackwell Ultra GPUs, the whole thing. Then, in May, Google's isomorphic labs, their AlphaFold spin-off, raised $2.1 billion in a series B to start pushing AI design drug candidates into actual clinical.

Starting point is 00:01:55 trials. And then just this month, biotech mergers and acquisitions hit $106 billion year-to-date, already on pace to be the best year since before COVID. So a lot of big money is flowing and flooding into now this intersection of artificial intelligence and biotech. So today we're sitting down with someone who's building at that exact intersection. Miles Harrison, the CEO of Connects Sciences, ticker CNXU, which just started trading on the NASDAQ last month. And for all of you joining today, Miles is not new to this game. This guy ran Galderma's entire North American business. Maybe the Cetafil brand rings a bell to you guys, scaling it from $1.2 billion to over

Starting point is 00:02:38 $2.1 billion in revenue. He also co-founded an aesthetics company, built it from scratch, and sold it in another eight-figure exit in about four years. He also sits on the board of Castle Biosciences, which is another NASDAQ listed company. Now he's leading ConnectU, which is developing a patented collagen-based tissue regeneration platform. And we are going to get into all of that. What does it mean? Why AI is about to blow the doors off of biotech and why GLP-1s might be creating an entirely new market for what his company is building. Miles, I'm super excited and welcome to the show.

Starting point is 00:03:14 Thank you very much. Thanks for having him. So let's get right into it. This has been a big topic for Austin and I for quite some time. And I'm excited to learn more for my own health reasons in this episode. So let's talk about artificial intelligence. It's disrupting basically every part of our lives at this point. We talk about it on this show pretty much every single week. But biotech seems like it might be the next major benefactor of this technology. When you look at where AI is headed, why do you think biotech could end up being the biggest AI winner in the coming years? Great question. So biology is always been hardest, you know, in terms of finding data. And for the first time, I believe, we have a tool that can actually keep up with it. So I spend my careers, you mentioned, Galderma and previously

Starting point is 00:04:01 in Novartis. And I'd been on the commercial side. And always did you find that biology moves a little slower than, you know, the capital wants it to? So when you're watching a compound, a promising compound, sort of play out, it can take three to four years. Drug discovery can take 10 to 12 years. You can iterate in the lab before anybody can actually tell you that it really works and the way that science, you know, the predictability of the science. So AI changes that slope. You can search chemical and biological space. You can flag formulations. You can also look at, you know, how to shorten the distance between your hypothesis and a real answer. So software disruption was really about distribution and getting in a good idea to people faster. And biotech

Starting point is 00:04:47 disruption is more about discovery itself moving faster. So that's a bigger prize. And healthcare touches every single person on the planet, so in a way that no app ever will. And our founder, Dr. Claudia Chavez, she's a co-founder actually, she's a chief scientific officer. She's been living inside this extracellular matrix science that we've been working on for over a decade. And she put it well to me recently where biology generates more data than we've even been able to interpret. But AI is the first technology that closes that gap. So I think that's where we will win speed. And getting around all of that data, which is quite significant for biology.

Starting point is 00:05:25 I love that breakdown miles. And I think it's really important because it really ties into my question here, which is, you know, the healthcare innovation cycles. I would argue how it has been traditionally is someone has research on a drug or some sort of hypothesis. and then they spend years or decades trying to really hone in on the best deliveries, they do the different types of trials, like all these other different things. But now with artificial intelligence, I got a hunch that healthcare innovation cycles are getting compressed. Things that used to take a decade or more now might take three, four, five years. Are you seeing that yourself in the data?

Starting point is 00:06:02 Well, research and design side, yes, I think meaningfully, right? So I think that you can go much faster. but on the clinical and the regulatory side, no, and it shouldn't because, you know, AI can compress how fast you can analyze literature or optimize a formulation or design an experiment or interpret, you know, imaging data. And we've seen those cycles shrink. We've seen populations in clinical trials reduced because there's more data and you can act faster. But there's a part of the business that AI cannot and should not compress, and that's the clinical validation. So patient safety operates on biological time and not computational time. So, you know, you can,

Starting point is 00:06:38 can't simulate your way to a 510K clearance, for example, or a pre-marketing authorization, a PMA approval, and you wouldn't want to. So what we see is that in some parts of the business, you know, you can speed up the first bit, but certainly for safety and efficacy and how products work in the body, I don't think you can speed that up because, you know, it's biology at work. So the honest answer is that, you know, the funnel maybe gets faster, but the finish line doesn't move dramatically just because the funneled it. That's a great perspective to share. I appreciate that. Yeah, I've seen, you know, I want to say I was listening to a podcast the other day

Starting point is 00:07:14 and someone was talking about how like, I don't know much about DNA and genomics and like all the fun stuff. But they were talking about, you know, leaps and bounds and strides that have been made because of artificial intelligence just in the last couple of years here. But I completely agree, you know, that's a computational clock that is getting compressed from a research perspective. But the trials, the biological, how it actually affects the body. Definitely should not rush that one. Well, I'm excited about all of it because for me, it's, you know, I want to live forever. And if we can figure all this out with AI and modern technology and medicines and reverse aging or slow aging down, I am all for it.

Starting point is 00:07:54 But Miles, we've seen Eli Lilly become one of the most valuable companies on the planet, largely off the back of the GLP ones and innovation in that weight loss and metabolic health space. Could the next trillion-dollar companies come from AI-powered healthcare rather than software? Is Lilly an early example of what that looks like? Break that down for our listeners. Yeah, I think it's not just possible. I think it's already underway. I think that Lily is a fair, there's an early adopter here, and they bet big, right? And they have big pockets, so they can beg big and good for them.

Starting point is 00:08:27 Lily didn't become one of the most valuable healthcare companies through a software multiple. It's really got there with a biological problem at scale, that people have. have worked on for years and it touches an enormous percentage of the population. You know, in 2030, GLP ones are going to be worth $200 billion, McKinsey recommends. $200 billion prescription market. I mean, that's phenomenal. So there's a, you know, I think the last 25 years of trillion dollar companies came from software because software was the technology that could scale a single idea to, you know,

Starting point is 00:08:59 billions of dollars. And healthcare can't do that. Biology doesn't scale like code. So AI is starting to close that gap and it's helping to scale the discovery process itself. So if we can speed up the discovery process, then literally we can touch more humans and more potential solving for humankind. Then that's a huge upside, I think, where AI lets healthcare innovation move at a fraction of software speed, but the ceiling is enormous. You can arguably build bigger, more addressable problems from AI. Something that we are big proponents here, Miles, on the show, is finding the picks and shovels of big secular growth trends, right?

Starting point is 00:09:39 Who's really going to benefit from a $200 billion market with GLP-1s? And you actually wrote a piece earlier this year about why the GLP1 boom now demands a new aesthetic playbook. There's millions of people who are losing weight rapidly on these drugs and experiencing real tissue depletion. So my question is, are GLP1s creating now an entirely new healthcare markets that maybe didn't exist five or 10 years ago? Absolutely. If you think about weight loss and if you think about taking a GLP one, we're having so many amazing results, you know, for people who are using it for weight loss and they're seeing massive gains in terms of how their, you know, weight is disproportionately just dropping off every day. So what are they seeing, though? They're seeing weight being lost around their stomach or in the middle where they want to lose the weight,

Starting point is 00:10:32 but they're also seeing weight being lost in other errors, errors that maybe they don't want weight loss. Fat pads in the face, for example, some body contouring errors, areas where they probably wouldn't want to lose weight. So GOP-1s were initially built to treat metabolic disease, and what they're actually doing is creating this, you know, massive downstream patient population at scale. And, you know, this volume loss gives loose skin. And the match doesn't really match what people expect it. It's not a niche.

Starting point is 00:10:59 But, you know, now one in eight U.S. adults is on a GLP1. So we talked about that $200 billion. One in eight on a GLP1. And 63% are going out into an aesthetic practice or a plastic surgeon or dermatologist looking for a solution. These are new patients. So this is a big upside, I think, for plastic surgeons and for injectors who can help them on that journey.

Starting point is 00:11:22 So I've lived through, you know, aesthetics. It's been an amazing market. Genuinely, we've had some great tools for 20 plus years, but not really, you know, new tools, right? So I would say that they're just different components of the same thing. So a lot of good renovation and a lot of good marketing and access certainly has been dramatic, you know, with private equity coming in and building out big chains. So access has been there. Our pricing has been competitive with new companies.

Starting point is 00:11:51 But, you know, H.A. pyloronic acid injectables are really. really just phyllis, right? They just, they're volumizers. And biostimulators are there as a foreign body object. They just inject and they cause a foreign body object response and that's inflammation. And that inflammation helps create, you know, the collagen that you've lost and the elastin that you've lost over aging. So when this happens rapidly, you need, you need something to come in, but you need something to last. So the tools today were never actually designed for the GLP1 patient. You can argue, you can modify, but it's not really, solving the purpose. They were added for adding volume and therefore a structural framework,

Starting point is 00:12:30 but not for the structural framework that's collapsed. So you have this big demand, a real gap, and what I believe is extracellulometrics, so a tissue regeneration, an approach where you can bring cells, signals and structure through an injectable, which we have, really is the next category. This is a Botox-like moment. Botox in, you know, back in the day, wasn't for as a neuromodulator for freezing the forehead and for the glabella lines, Botox was actually for Strobismus as an eye product. And that's a $9 billion category. I think regenerative tissue opportunities like ECM-based approaches we have will be the next category.

Starting point is 00:13:11 And they will work the same way that biostimulators did back in the day and neuromodulators once did. I don't think GPs have created a new pharmaceutical market. They've created a patient population that the next generation of aesthetic, medicine is going to be built around. I want our listeners to bring out a notepad and start right now numbers here. So you said that one in eight American adults are on a GLP1. And then of that one and eight American adults on a GLP1, you said 63% of them or 60% of them or so are going and actively looking for different ways to make their appearances look better now that they've lost weight, which is tens of millions of Americans, like if you actually do the numbers on that. And so it's

Starting point is 00:13:52 your hunch that of these tens of millions of Americans, those people are also going to go want to look and find a solution for tissue regeneration and really fortify their body and the weight in the good places versus like the fat that they originally like tried to lose. Right. So like that's your hunch is that these tens of millions of people that are actively every year looking for and spending money on ways to make their bodies look better after they've lost weight are also going to say light bulb moment. I need to go do some tissue regeneration stuff as well. Well, they're going to say, I need to go and get a volumizer and then they're going to go to a practice and they can have something that last six to nine months or they can have something that is clean and natural beauty.

Starting point is 00:14:31 It's your own tissue being regenerative. Our product is a hydrogel and collagen-based product. So when you inject that, it adds volume, has volume just like an HA will. But then it doesn't go away. What happens is cells and signals and that structure provides an environment for tissue regeneration. So you maintain the volume. So you're not losing volume over time. You're not going to have to re-inject.

Starting point is 00:14:52 that same area. That's our hunch. That's what we're working on our preclinical work right now. I just want to be really clear. When you say tissue, like when I think tissue, I think like muscle tissue or like, you know, organ tissue and stuff like that is, is that the type of tissue that people are losing whenever they're on these GLP ones? And that's the type of tissue that they need to get back without gaining a proportional amount of fat across their bodies. Is that what you're saying? Is your regeneration is where we're coming from in terms of wound, care, and burns? That's where 11 publications, 12 years of history of design of this product, was to conform to an irregular wound, a dehescent wound, a surgical wound, a tunneling wound, you know, all these very tough wounds.

Starting point is 00:15:35 So that's where we're coming from. So we're not talking about organ regeneration here. So we're just talking about a volumizer right now. We can use certainly in aesthetics. It's tissue agnostic. Tissue meaning dental peridontitis meaning dermal, subcutaneous. And why do we know that? We've already shown on our website, you can see in the preclinical work that it's tissue agnostic.

Starting point is 00:15:57 Where we inject, we're seeing cell reorganization. We're seeing some vascularization. That's veins, right? And we're seeing adipose tissue being laid down, certainly in the subcutaneous. So this is phenomenal. So you're regenerating your own tissue. That's providing the volume. That maintains the volume.

Starting point is 00:16:13 And that's natural and clean beauty, as far as I'm concerned. And I want to click back on this even one more time. So I'm sure of this, because this is exciting for me of what. But I'm trying to do to stay youthful and all that. You talk about volumizer. So I assume this can be utilized in the face to restore volume as well, right? Because you mentioned Botox and all these other things, right? Sure.

Starting point is 00:16:34 So we've done rheology and we're, you know, we're on par with one of the top brands in the market. So it's important, you know, we have fine lines, the nasal labial folds that come down here from the side of the mouth. There's the crow's feet, you know, up here. So yes, in your facial areas, but there's volume. loss here, the fat tissues, the fat pads here, you need to get some rounding, jaw line, right? So this product will work across those, but also for the body, right? So if you think about other areas like cellulite, right? So you've got the dimpling, you could smooth that and certainly any other pockets. So whether it's aesthetics or corrective or GLP1 impacted, you know, sagging

Starting point is 00:17:15 skin. Absolutely. This is where you can inject. I love it, Miles. This is exactly right in my wheelhouse of what I'm trying to learn too. So this is going to be great for our audience because this is such a big sector. So I want to talk through this a little bit more technical for my next question. You have the CXU platform, a liquid extracellular matrix scaffold with applications across wound care, aesthetics, dental, even breast reconstruction with your breast program at Wake Forest. Is connects you building a product, a platform, or both, and what is the difference for our listener. Sure. So we're building a platform. So your listeners should be informed about the fact that this is one formula that can go across multiple areas. So in essence, it's a platform. What you should understand is that

Starting point is 00:18:04 to get this product to market, the fastest way and the way that we've been focused for many years is through wound care. So we will do a 510K, which is an FDA route to get a class two medical device on the market. So So the 510K is the regulatory route. Once that goes in, then that informs us on everything else that we want to do within the platform. It informs us from a manufacturing scaler, informs us from a chemical composition, it informs us from the bench to commercial. So what we're able to do then is use that as we get into other markets.

Starting point is 00:18:40 But at the same time, as we get an approval, the fastest way to get an approval is a predicate. We'll use our own predicate then to get into the other markets using our. predicate, which will be in wound care. That's the thinking that we have right now, as I said. Got it. I guess, you know, wrapping things up here, what does the next five years of Connects you look like? You guys just listed on the NASDAQ. Congratulations. That's so cool. You've got this week fours partnership, you know, 510K submission plan for wound care like you were just alluding to. Like, where is this company headed perhaps in the next four or five, six years? It's called by the end of the decade. It's 2030. What's Connect you working on? Well, I think we will be talking about

Starting point is 00:19:16 GLP1 patients and the benefits that they're going to be seeing with this portfolio of this product. I think we're going to be talking about the fact that there are not going to be the need for breast implants, but there could be the need for a resorbable breast, a natural, resorbable breast, that instead of having silicone, you can have a product that is fully resorvable. I mean, that's remarkable. And I think that, you know, longevity is playing a lot roles in every conversation that people have and longevity is really around regeneration. So I think the technology that we're bringing fits squarely into that, whether that's in dentistry, in veterinary, in 3D bioprinting, whether it's in breasts, you know, designing a breast, a resorvable

Starting point is 00:19:59 breast or whether that's injectable for Mo's surgery. It goes right across so many verticals. So I think regenerative medicine is here to stay. I think we're going to see a lot more competition coming, which is great for patients, certainly. And I think that, yeah, people no longer want to mask something or cover something in wound care. They want it to actually regenerate and the tissue to get better. And I think we can bring something that will really, really help those who suffer from that. This is awesome stuff. I just, I get so excited.

Starting point is 00:20:30 Robert, literally, you know, we've had conversations on the side because I know you've been, you've been really dialing your health over the last, let's call it, like 12 to 18 months. Yeah. And we've had conversations on the side. where you've like, listen, Austin, like all the best doctors I've talked to say, if you can just live for another five, seven, ten years, we're going to have so much technology now with biotech that living longer and being healthier is going to be so much easier than it is today in 2026 or even 10 years ago. And, you know, 2016, like it's going to be just so much better in talking with people like Miles here who are on the front just building this stuff and doing their best. Like, it's so fascinating to me.

Starting point is 00:21:07 And so Miles, like, thanks again so much for just cluing me in on this because, you know, You hear a lot about AI and biotech and GLP1 and Reda True Tide This or whatever's going on and sexy and fun on Instagram at the time. But this is real tech that's really moving and grooving in the right direction. And I'm just glad that I'm alive to witness it. Yeah. And I've been giddy about this interview for days now. Just because I am living through it right now, I'm trying to get my A1C in order. I'm trying to like figure out how to get the volume back in my face and keep my skin looking good.

Starting point is 00:21:40 It's crazy to think with all of what you're building miles and what's happening in the biotech and medical field that I might be able to live another 50 years of healthy life, 40, 50 years of healthy life pretty easily. That excites me because I want to keep doing this with Austin for many decades to come here in the Rich Abbots podcast. And it's guests like you that make it so exciting to share all this information with our audience. Well, Robert, I think, you know, you're one of those who is getting hold of their own health. and working it out, right, which is fantastic. The other thing you can do is, you know where you're going to go with your health. So you can, there's a prognostic way, rather than the diagnostic way. So you can start to inform yourself, what can I do to help myself going forward now

Starting point is 00:22:24 rather than to support the eventual maybe loss of loose skin, you know. So get to it sooner earlier, you know. And that's what we see. Well, that's what we've seen in aesthetics over years. And that's what we're going to see across many of these other verticals that we're talking about. Wow. Thanks again for joining. us Miles. Really appreciate it, man. Thank you. Appreciate your time. Welcome back, everyone. What an

Starting point is 00:22:45 awesome conversation with Miles. Austin, let's dig into our radar points. Starting off today is the Iran ceasefire actually over. On Wednesday morning, President Trump stood at the NATO summit in Ankara, Turkey, and said, for me, I think it's over. Talking about the 60-day ceasefire with Iran, the deal struck on June 17th that was supposed to suspend hostels and let diplomats negotiate the free passage through the state of Hermos. The deal is now apparently dead. Trump told reporters, we're going to hit them hard again tonight, and I'll give them little warning.

Starting point is 00:23:17 We're going to hit them hard again tonight. So, Austin, I just want this to be over. Yeah, same here, man. Well, let's talk through the chain of events. Iran's Revolutionary Guard Corps attacked three commercial tankers in the Strait of Hermuz earlier this week. Then the U.S. retaliated on Tuesday night by striking over 80

Starting point is 00:23:33 Iranian targets. Sent, calm confirmed. And then Iran escalated things even further, launching ballistic missiles and drones at Bahrain and Kuwait, two U.S. Gulf allies who had nothing to do with the original dispute, and now Kuwait confirmed that they intercepted two ballistic missiles and 13 drones, and Bahrain confirmed interceptions of its own. Now, Iran's parliament released a statement saying the U.S. must, and I quote, recognize the new Iranian order in the Strait of Hormuz. That is a sovereignty claim over a waterway that carries 20% of the world's oil supply every single day. This is nuts and I'm over it. I have shots

Starting point is 00:24:13 wrap it up. I can't do this anymore. But more specifically, Robert, what does this mean for everyone listening right now and their money? Yeah, it means you're right. We have to get this over with. This is a geopolitical risk repricing event. For months, oil has been falling back towards pre-war levels and the market was pricing in a soft landing where energy costs weren't a variable anymore. And that assumption might now be wrong. If crude oil stays above that $80 a barrel for any sustained period, it feeds directly into inflation expectations. And if inflation expectations rise, the Fed has less room to pause, let alone cut rates. Remember, we just got the June jobs report last week, and only 57,000 jobs were added. This is the biggest miss of the year. And investors were starting

Starting point is 00:24:57 to believe the labor market was cooling enough for a rate relief. And this oil shock throws that entire thesis into question. And I know this seems like a lot of gloom and doom, but Austin, walk us through it. Yeah. So when you think about your portfolio and we've kind of played this energy game all year long inside the rich habits network, but energy stocks are the obvious near-term hedge if you're someone that's like freaking out about volatility. XLE, Exxon, Conoco Phillips, Chevron, they all benefit from a higher crude oil per barrel price. But the bigger risk is what does this do to consumer spending, corporate margins, rate-sensitive sectors like real estate and small caps. You know, Robert, we just hosted inside the Rich Habits Network our weekly live stream that takes

Starting point is 00:25:39 place every Tuesday. And I had shared a chart with everyone that had illustrated how oil right now, as of, I guess, like a week ago, was one of the most shorted names with 40% of managed money, like money managers being bearish on oil and shorting it, the third highest reading in 15 years. So now what I said is I said, wait a second, when every one, right 40% right that's that's a lot third highest reading in 15 years when a lot of people have a consensus view of something being bearish and bad that usually marks a local bottom for that specific name that said i don't know how high oil might go from here but if you kept a couple oil names in your portfolio like we have this year maybe it's uh it's a good hedge right now against market

Starting point is 00:26:21 volatility yeah great breakdown austin because we all know the markets don't like uncertainty and right now, every single day, it seems like there's volatility around all of these headlines. And this has been the biggest narrative we've faced with this Iran war and all the uncertainty around oil. Now let's jump to our second store today, Robert, which I think is an exciting one, which is the S-K-H-Nex IPO taking place this Friday. So on Friday, a company that most Americans have never heard of is expected to begin trading on the NASDAQ, under the ticker symbol S-K-H-Y. The company is S-K-K-H-E-Nex, and the listing is S-K-H-E-Nex, and the listing is,

Starting point is 00:26:56 set to raise $28 billion, making it one of the largest share offerings in modern history. For comparison, and I know SpaceX was massive, but let's talk about it for a second, right? SpaceX IPO raised $85 billion. S.K. Hynex is going to be $28 billion. So, you know, about $50 billion short, but still pretty big, if you ask me. Well, this leads to what we talked about a few weeks back leading into the SpaceX IPO of where is all of this liquidity going to come from. And this is a big IPO.

Starting point is 00:27:26 even though we're looking at SpaceX just, you know, from a couple weeks ago. And S.K. Heinex is a South Korean semiconductor company. And it is arguably one of the single most important suppliers in the entire AI supply chain. And I like that you alluded that most people don't even know what it is. It's kind of like reminds me of Taiwan semiconductor. They're one of the backbones of AI. But because they're not in the United States, they're just not followed as much. And they make these high bandwidth memory, HBM.

Starting point is 00:27:52 And these are the specialized chips that sit on top of Nvidia's GPUs. and make AI training possible. Without SK-Hinix's memory chips, NVIDIA's H-200 and B-200 processors are just looked at as expensive paperweights. I love that headline, and I'm going to say it, but yes, that's interesting to see.

Starting point is 00:28:10 But without this memory, the processing units inside the Nvidia chips simply cannot access or transfer data at the speeds required for modern AI and these LLM workloads. So Robert alluded to, SK Hynix makes these high bandwidth memory specialized chips and the company actually controls over 50% of the global high bandwidth memory

Starting point is 00:28:33 market HBM. They've secured 70% of Nvidia's next generation HBM4 orders. So think Blackwell, Viro Rubin, like, Nvidia needs S.K. Hynix and their HBMs to ensure that the chips that NVIDIA is building in these stacks for large language models and AI training is actually useful. And their head of sales said on their most recent earnings call that client requests for HBM chip supplies over the next three years already far exceeds our production capacity. SK. Hennix is already trading on the Korean Stock Exchange. They hit a $1 trillion market cap on May 27th. Now they're hanging around a trillion, a trillion three, depending on the day.

Starting point is 00:29:14 But it is definitely something I'm keeping an eye on, Robert. Yeah, this could be a really good IPO for everyone listening and following along because I think it is going to sneak under the radar a little bit because everyone's talking about Anthropic, Open AI, SpaceX and all that. And this is a really good one for everyone to watch. And when looking at a Q1, 2026 revenue came in at about $35.5 billion and profit surge fivefold year over year. The stock is up over 200% year to date on the Korean Exchange. And Goldman Sachs, UBS, and every major bank. has rated them as a dominant player in AI memory through at least 2027. And the U.S. listing isn't a traditional IPO. It's an ADR offering. What does that mean? It's an American depository receipt, meaning S.K. Hynix is issuing new shares that will trade on the NASDAQ while also remaining listed in Seoul Korea.

Starting point is 00:30:06 Trading is expected to begin Friday, July 10th. So keep an eye on it. Yeah, South Korean stock market's been on an absolute tear and an absolute roller coaster at the same time. K-O-S-P-I is up a ton this year, driven almost entirely by SK Hynix and Samsung. Korean retail investors have been pouring money into these two and three-X leverage ETFs on chip stocks, and regulators are beginning to be worried if this has turned into some sort of, you know, AI-Mania taking place over there. Yeah, I feel like AI-Mania is taking place just about everywhere where there's development

Starting point is 00:30:38 in this sector. So S-K. Hynix wants access to institutional capital that doesn't panic sell on overnight K-O-S-P-I swings. We've seen that happen a lot. And they want to be valued more like NVIDIA on fundamentals, not leveraged ETF flows. And they also want U.S. passive fund inclusion.

Starting point is 00:30:57 If S-K-H-Y gets added to major U.S. indices, the same automatic buying machine that just added SpaceX would start flowing into S-K-Hinix. Austin, that was a lot. What does this mean for you and your money? Well, right now, Nvidia gets all the headlines and all the excitement. But the company is building the,

Starting point is 00:31:16 actual memory, the actual chips that make AI physically possible, have been trading at a fraction of Nvidia's multiples over the years, partly because they were stuck on foreign exchanges that American institutions couldn't easily access. So when SK Hinex starts trading on the NASDAQ, American fund managers, ETFs, retail investors, all the above, will be able to buy one of the most critical AI memory suppliers as easily as they can buy Nvidia or AMD. Even if they eventually get added to the NASDAQ 100, that's hundreds of billions of dollars. of index tracking pools and funds that start automatically buying the stock. Now, what's interesting, though, and I saw a chart on X about this, is that we are in a memory

Starting point is 00:31:55 shortage. So I want to make sure we're on the same page here. Samsung and SK Hynix have been able to quadruple their profits year over a year because they were able to raise prices on their products by 30, 50, 80 percent to their customers, and their customers had to pay those higher prices because of the shortage. They were the only one selling memory. But in the back half of 26 and the first half of 27, I've seen rumblings by banks online, specifically on X, talking about how we'll be in a surplus. So I don't know if that same pricing power is as durable as investors might think.

Starting point is 00:32:30 So if you are looking into an SK-Hinex IPO, we are looking into Micron and looking into these names to add it to your portfolio today, just be weary as to how important the surplus versus contraction and restriction around their products. and how that could impact the durability of their pricing. Yeah, I think that's a great point for everyone to understand. Is AI overhyped at this point? Is there a chance for this bubble that we're hearing about any of those things? But I think for me, for people's portfolio, the question should be simple. Do you want exposure to the AI trade at the infrastructure layer or the application layer? S.K. Hynix is as infrastructure as it gets.

Starting point is 00:33:10 With 50% of the HBM market share, 70% of Nvidia's next-gen orders, and demand exceeding production capacity for the next three years. The AI trade is definitely globalizing, and the NASDAQ is becoming the world's stock exchange, and every major AI company on Earth wants to list here, because that's where the capital is. It certainly is. And NASDAQ, if you're listening,

Starting point is 00:33:32 I'd love to go check you out. We've been in the New York Stock Exchange a dozen times now. We'd love to go check out the NASDAQ. Email us at Rich Habitspodcast at gmail.com. All right, Robert, our final story, the U.S. Treasury warning us about an AI bubble. So the NOTUS, which is a nonpartisan news outlet, obtained a draft internal report from the Treasury Department

Starting point is 00:33:54 that compares the current AI market to the dot-com bubble. Career Treasury analysts wrote a report for Secretary Scott Bessent, Fed Chair Kevin Warsh, and federal financial regulators, warning that AI firms are now more deeply entrenched in the U.S. economy than their dot-com predecessors. And if the bubble pops, the damage would, be systemic. Here's what the analysts found. The AI sector is increasingly concentrated within a small number of firms. It's heavily reliant on private market financing as well. It's massively

Starting point is 00:34:24 invested in physical infrastructure data centers that only pay off if growth targets are met. Supply chain disruptions, geopolitical tensions, electricity bottlenecks and utility shortfalls could all stall this momentum. We've been talking about this for a very, very long time, finding those picks and shovels within those sectors. And if AI companies can't monetize their products fast enough, the effects would ripple through the big banks, the hedge funds, private credit markets, chip manufacturers, cloud providers, and even utilities,

Starting point is 00:34:54 the entire financial ecosystem. Now this part stood out to me, Robert. So the analysts that wrote this report noted that fewer retail investors are backing AI than backed the dot-com stocks of the late 90s. You're thinking about on the surface, okay, that just means that less readers. retail investors might get torched if things go bad. True, maybe, but it could also mean that the AI

Starting point is 00:35:15 trade now is dominated by institutional investors, right? They've had to raise this money from someone, and if retail's not buying, the pensions, the endowments, the hedge funds, the banks, those people are giving them money. So if AI and growth AI and all this stuff starts to, you know, stumble, those losses hit institutions that the rest of the economy now depends on. The analyst wrote that a sustained AI downturn would have a greater impact on institutional investors, fundamental to economic stability that the dot-com crash did on retail investors. Yeah, two weeks ago, June 25th, Treasury Secretary Bessent, stood in New York and praised the hyperscalers for spending $750 billion on AI buildout this year.

Starting point is 00:35:54 He compared it favorably to the dot-com era and asked, could we do at least that? Can we do maybe more? At the G7 meeting, when other leaders raised concerns about AI safety and job losses, Besant told them, quote, the biggest risk to AI is China getting ahead of us. Now the weird part, though, Robert, is while he's saying that, his own analysts sitting in his own building are riding the report that we're talking about right now saying the biggest risk is the bubble popping. Treasury Department spokesperson dismissed the report as unvetted and not representation of the agency's policies and views. And they said the official position of the secretary in the U.S. Treasury is that AI will be a key driver of America's new golden age, which like, yeah, true, that's great. But also, like, really interesting to see kind of how this, like, back and forth is going.

Starting point is 00:36:38 And just on July 7th, the Bank of England released its own financial stability report, warning that an AI crash should cause a 2.2% drop in UK GDP and plunge Britain into a recession. And Governor Andrew Bailey flagged cyber vulnerabilities, high leverage in AI sectors, and correlated investor behavior as systemic risks. Senator Elizabeth Warren has proposed a bill requiring financial firms to disclose their AI exposure to the Treasury and for the agency to report how the financial system. would be affected by this AI downturn that they're talking about. Sounds to me like a lot of scare tactics and mumbo-jumbo and people are just doing their jobs of like, let's think of complete downside the worst part of this. But what's your take, Robert? What does this mean for you and your money?

Starting point is 00:37:27 It's a tough one because we see all the CAPEX spending. We see all of the advancements in AI. There's so much build out and infrastructure happening in the United States. But let's be clear what this is. is and what it isn't. This is not a prediction that AI is going to crash. The Treasury analysts themselves said AI companies are more mature, more profitable, and have healthier balance sheets than dot-com-era firms. I think, Austin, about a year ago, we did a whole big thing about this because back in the dot-com era, I lived through it. There just wasn't the revenue. There was a lot of hype

Starting point is 00:37:59 and hyperbole around these companies, but there just wasn't the revenue and profits that we see today. But here's what it is. It's the first time the U.S. government's own financial analysts have formally documented the systemic risks of the AI trade. Yeah, no, it definitely is. And I think, you know, if I'm someone listening right now and I'm like, oh, my gosh, is the secretary telling me that the AI bubble's here and we're all going to get cooked and torched and it's over? Like, no, not at all.

Starting point is 00:38:24 Like, I think a lot of this is just noise. And as someone who owns the S&P and the NASDAQ and a ton of invidia and AMD and Micron, like, I'm just, ride the wave, baby. Like, obviously, the entire Earth is being rebuilt right now with AI in mind. And Nvidia is going to be a $10 trillion company sometime in my life. AMD will be a $5 trillion company sometime in my life as that continues. So four major hyperscalers, spending hundreds of billions of dollars in CAPEX, that money's got to flow to something. It's flowing to Nvidia to the SK-Hinix.

Starting point is 00:38:55 The data center reads the utilities, construction firms, like that's GDP growth if you'll like it or not. If you own the S&P 500, you're already massively exposed to AI through the Mag 7. The question isn't whether is AI real. It's obviously real. The question is whether the hundreds of billions of dollars that the Magnificent Seven is spending on capital expenditures is going to be sustained if revenue growth does not keep pace. We've seen great revenue growth. Alphabet is a wonderful example of this. So I think it's great.

Starting point is 00:39:21 Last thing, I'll leave you here with Robert as we talk about this, Invidia right now at $194 a share, whatever it is today, is now trading below 20 times their 2026 earnings expectations. and below 15 times their 2027 earnings expectations, which is the cheapest valuation since 2019 and the lowest valuation multiple of the AI boom. Literally when I was writing this with Robert, I was like, oh, I need to go buy more Nvidia stock. And I put 10 grand into Nvidia at 194. Now, who knows where it's going to go in the short term?

Starting point is 00:39:55 I don't care. But I'm thinking about the next 3, 5, 7, 10 years into the future. Hopefully a $4.5 trillion dollar valuation, and Nvidia bodes well for my portfolio in the future as obviously they're going to grow their earnings so much over the coming years. Nvidia is still the AI platform layer across GPUs, networking, software, robotics, physical AI. People selling quality stocks out of their portfolio because they're bored and they're looking

Starting point is 00:40:20 for the next, you know, micron or the next insert other company here that goes up by 200% in three weeks. Like, that is a terrible mistake. Do not make that mistake. Know what you own. and dollar cost average into durable blue chip stocks and ETFs and index funds in your portfolio. I love that so much because how many times in the Rich Habits Network does someone DMS or ask us live? What's the next Palantir? What's the next? Invitya. And now it's what's the next

Starting point is 00:40:49 micron? They're always chasing the next when we still love these companies. I think AMD is cheap. I think Nvidia is cheap. I think Amazon is cheap. There's so much opportunity right in front of people, but they're always chasing the next thing. And I just love that you brought that up and broke that down for us. So, Austin, before we go to our radar points, support from this show comes from VCX. The public ticker for private tech.

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Starting point is 00:41:57 So visit getVcX.com For more information, that's getvcx.com. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the funds of prospectus at getvcx.com. This is a paid sponsorship. All right, Robert, let's now jump to our radar points for this episode. I've got three great radar points, Robert.

Starting point is 00:42:18 I know you've got three as well, so I will kick us off. The first one being the UAE has now certified the world's first commercial vertiport and Joby Air Taxis are definitely going to benefit from this. So the UAE just became the first country on Earth to certify a purpose-built commercial vertiport for electric air taxis like Joby. The facility called VDX sits next to Dubai's International Airport and was certified by the UAE's General Civil Aviation Authority for full commercial operations. Joby Aviation has a six-year exclusive contract to operate air taxis out of Dubai using its

Starting point is 00:42:55 S4 aircraft, which carries about four passengers at a 200 mile per hour speed with zero emissions. I think that's awesome. And I hope to see more of these vertiports, hopefully, around the United States. My second point to talk about today is Eli Lilly's Reda-Trutide results that I think are insanely interesting. So Eli-Lillie's next generation obesity drug, Reda-Trutide, Reda, that I'm sure a lot of you all have seen on Instagram and TikTok, just delivered their phase three results that make Zepbound look like a warm-up. In the Triumph 1 trials, patients on the highest dose lost an average of 85 pounds over two years, which is a third of their body weight, matching outcomes that used to require gastric bypass

Starting point is 00:43:40 surgery. It's the first drug in its class. Eli-Lili is expected to file for FDA approval by Q4 this year. Seven more phase three readouts are still coming in 2006. All lands as Medicare just started covering GLP-1s for obesity at $50 a month on July. life first and a gallop poll this week showed 11% of Americans are now using GLP1s. I own Eli Lilly's stock. I would encourage y'all to do your own research and perhaps nibble on the stock as well. My last point here, Robert, and this one's kind of dystopian and weird, but like,

Starting point is 00:44:09 I'm actually looking forward to it. The first full-length movie starring an AI-generated actress is coming sooner than you think. A full-length film called Missaligned is heading into production starring Tilly Norwood, an entirely AI-generated actress created by the the AI studio Particle 6. It's built as a comedy drama set inside the Tillyverse, with traditional writers, editors, and directors working alongside some of these AI creators. Particle 6 claims using Norwood instead of human actors slashes production costs by 90%, which is exactly what SAG Afterra is afraid of. The actors union called it a threat that devalues human artistry and uses stolen performances to put actors out of work. This comes after Dreams of Violet, a 75-minute

Starting point is 00:44:55 film made entirely with AI video generation and no human actors became the first fully AI generated movie accepted into a major film festival. That to me is going to be the start of a very interesting secular growth trend of AI only actors, actresses, videos, movies, like figure out how to profit from that. That's not going away in my opinion. Yeah, your radar points are fire today because I think about like we've been talking about GLP ones and the picks and shovels and how to make money in that sector and Eli Lilly is just right at the forefront of that. But then also, you think about Hollywood moving forward, you know, these actors that are used to getting 20, 30, 50 million dollars of film, I feel like they're going to be cooked.

Starting point is 00:45:37 And we might see a lot more of them in TV commercials coming soon. So we'll see more people that are A&B Listers doing these insurance commercials sooner than we think. So let me just go through my radar points real quick, Austin. SpaceX is now included in the NASDAQ. They officially joined the NASDAQ 100 index. on July 7th of this year, trading under the ticker symbol SPCX.

Starting point is 00:46:00 The aerospace giant that everyone knows made its debut June 12th, 2026 for their IPO and was fast-tracks the index. We're keeping an eye on it. We think SpaceX is going to be a great long-term buy, but just not yet for me. I want to see that price come down a little bit more. Now, here's my favorite one today.

Starting point is 00:46:17 43% of Gen Ziers claim that they need a side hustle to survive. Surveys indicate that anywhere from 40, to 57% of Gen Z actually maintain active side gigs with these ventures accounting for up to 57% of their total income, which is just a crazy stat to me. So for many, the wages from their primary 9 to 5 job are just no longer sufficient to keep up with the rising cost of living. I see this a lot with my younger employees, and we see these headlines a lot, but I was shocked that 57% of their total income is coming from the side gigs, not their primary job. And my last radar point today is Jeff Bezos, Blue Origin, is raising $10 billion at $130 billion pre-money valuation, according to NYT deal book. Making the first time in the company's 26-year history that Bezos has taken outside funding.

Starting point is 00:47:11 Until now, Bezos is personally bankrupt the entire operation. And this is something we need to keep an eye on because this is very, very important after the SpaceX IPO. And it's also interesting because Austin and I have been talking. for a long time about Rocket Lab and AST Space Mobile valuations and the stocks and what they bring to the table in this space race that's going on right now. So we'll keep an eye on those for the future. I really like that callout on Blue Origin. I mean, I'm not saying that they're going to become the next SpaceX or anything like that, but $130 billion valuation and Rocket Lab at $50 billion. And they have a very similar business model. It's like, is Rocket Lab undervalued right now? Like, I don't know.

Starting point is 00:47:51 I think that's interesting. So good callouts, Robert, appreciate. everyone hanging out with us on this week's episode of The Rich Habits Radar. Be sure to go check out Connects you and all the fun things that they've got going on more about that in the links in the show notes below. And don't forget about the seven day free trial taking place inside the rich habits radar. I talked about oil being a shorted name right now by money managers. We talked about that on this episode, but we talked about it for this episode inside our weekly live streams. We talk about so much incredible information. It's a seven day free trial. So join get a live stream completely for free. See if you like it. If you don't, that's fine. No problem.

Starting point is 00:48:28 But if you do like it, you also get invited to invest alongside Robert and myself. And we are investing in the coolest pre-IPO companies. Thanks, everyone. And we'll see you tomorrow for our Q&A episode.

Rich Habits Podcast - AI & Bioscience w/ Miles Harrison (CEO of Conexeu), SK Hynix IPO & Blue Origin Fundraise

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