Rich Habits Podcast - Chinese Humanoid Robot $60B IPO, Big Tech's $3T of Hidden Debt & Bond Yields

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Starting point is 00:01:10 This episode is brought to you by VCX, the public ticker for private tech. My name's Austin Hankwitz, and 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 Scott Besson stepping into try and lower bond yields, big tech hiding three trillion dollars. of AI spending using some off-balance sheet vehicles, and the Fed's recent meeting minutes, which have a lot to say about where we could be headed between now and the end of the year. And be sure to stick around to the end

Starting point is 00:01:42 where we talk about China's humanoid robot frenzy taking place right now, as some of these companies are starting to go public on the stock market. Robert, let's take into our first story. On Wednesday morning, Treasury Secretary Scott Besson's department announced it significantly wrapping up its own bond buyback program. Not because the market asked for it, but because yields had

Starting point is 00:02:02 just hit their highest level since 2007. The 30-year Treasury yield topped 5.3% this week, the highest since 2007, right before the financial crisis. The 10-year sits around 4.7% well above the 4.1% the Congressional

Starting point is 00:02:18 Budget Office was forecasting for this year just months ago. Average mortgage rates are creeping back towards 7% as well. And the federal budget deficit is running near 6% percent of GDP double Besson's own stated long-term target of three percent. And as you alluded to, Robert, on Wednesday, the Treasury said that it would raise the maximum size of its buybacks on 10 to 30-year bonds from $2 billion per operation to at least $4 billion, starting September 9th and

Starting point is 00:02:49 running through at least November 4th. At that pace, the Treasury would buy back roughly $128 billion of long-dated debt over a year. That $128 billion sounds massive, but in the Texas calculates it's only about 2.4% of the total outstanding debt in that maturity range. And that math barely moves the needle. But markets didn't price the math. They priced the signal.

Starting point is 00:03:15 Within hours of the announcement, the 30-year yield dropped nearly a tenth of a percentage point, and the S&P 500, Dow and NASDAQ all ticked up. But now here's where it gets a little bit complicated. The Treasury officially labeled this as a technical move for what they call liquidity support, not an attempt to push down yields. But almost no one on Wall Street is actually buying that. Long-term Trump economic advisor, Steve Moore, said plainly, he's financially savvy,

Starting point is 00:03:42 and he sees this as a way to alleviate the pressure on the rates. Talking there about Scott Bessent. Yes, federal interest payments now consume nearly one in every $5 of government revenue. Interest cost of average 2.1% of GDP over the last 50 years. This year, they're at 3.3%. And the CBO projects 4.6% by 2036. Publicly held U.S. debt just crossed 100% of GDP, a level we have in touch since the World War II. And Robert, what's happening right now has been tried in the past, but it did not work.

Starting point is 00:04:16 Scott Bessent in the past intervened with the yen and the peso, pushed to have some bank capital rules be eased a little bit, but treasury yields climbed anyway. So who knows if it's actually going to work this time? But more importantly, Robert, what does this mean for you, our listeners, and their money? This tells you the government itself is worried enough about its own borrowing cost to intervene in the market for its own debt. And that, a single announcement, even a large one, can't undo a structural problem. So for your portfolio, I pulled up Lanar on Wall Streetfavits.com just this morning. of the homebuilders most directly exposed to where mortgage rates land, and it's sitting well off its highs as the streets prices in higher for longer instead of the rate relief. So companies

Starting point is 00:05:05 with low debt and real pricing power held up fine in this environment. What gets squeezed is anything that depends on cheap, easy borrowing, higher levered gross stocks, real estate home builders, and long duration bonds themselves. Yeah, Robert, I think like the really big takeaway here by the the Treasury's actions as of late is that for the last 15 years, ultra low interest rates were the water that we all swim in. And we didn't really notice it, right? We just kind of hung out in this ultra low rate environment. But this week now has been a very clear signal that that era might be coming to an end. And when the government has to step in to its own bond market to slow the bleeding, that's not a sign of strength. It's a sign that Washington sees the same thing that the bond

Starting point is 00:05:51 market does, which our yields are just too high. Yeah, I agree. It definitely, we're seeing some cracks in the surface of, you know, the economy and the bond market and everything else. And, you know, this could be a sign of things to come, but we'll keep an eye on it and make sure to keep all of you updated. Yeah. You know, Robert, and we'll get into this later, it's still my base case that the Federal Reserve does not change anything between now and the end of the year. But, you know, bond yields, treasury, Fed Reserve, like we'll see, we'll see. Yep. Now let's jump to our second story, which is, I think, a very interesting one.

Starting point is 00:06:26 This came from the Wall Street Journal. It was a big story they ran earlier this week, but I want to make sure everyone saw it. And we talked about this actually inside the Rich Habits Network, which is the $3 trillion of off-balance debt that these big AI companies have. So let's dissect that, Robert. every quarter, Amazon, Microsoft, Meta, and Alphabet stand up and they tell you how much they're spending on AI during their earnings calls. And those capital expenditure numbers are the ones that draw the headlines. They make the stock moves up and down, right? Like everyone's looking for how

Starting point is 00:07:01 much of these companies actually spending on AI. And these capital expenditure forecast for the last couple years have continued to rise over time. But the problem is, the numbers you see in the headlines are not actually what the companies have committed to spending. As I mentioned earlier, a Wall Street Journal analysis of nine of the biggest tech companies found roughly $3 trillion in AI-related obligations that do not show up right now on any of their balance sheets. Yeah, this is that funny money we've been talking about. We see all the headlines of circular economy, circular funding, and this is really a wild stat that everyone needs to be aware of, especially people investing in the AI trade and combined capital expenditures across these companies totaled over

Starting point is 00:07:47 $600 billion in the past year alone. And the off-balance sheet commitments are nearly five times that and growing far faster. These obligations break into two buckets. First, it's purchase commitments. The long-term contracts and chips, hardware from suppliers, stand at $1.9 trillion combined, and second is all the leases that have not started. These are the deals for data centers that haven't opened yet. So the payments haven't legally kicked in. That totals $1.2 trillion, which is four times higher than what these same companies reported just a year ago. So as we put that together here, Robert, that's triple of what the amount of money is that these companies owe on their existing on balance sheet leases and long-term debt.

Starting point is 00:08:33 Alphabet, which is Google, right? Their purchase commitments alone hit $811 billion as of June 30th, which is, up from $332 billion just three months ago, right? Alphabet didn't fully explain why the number is more than double in a single quarter. Some of these commitments run through 2054, which is just bonkers to me. But that's these energy contracts to the data centers, you know, as they're trying to figure out, I would love to know that I can have energy and power powering these data centers decades, right, into the future. Yeah, we all know that this takes time, this AI play, the data center play,

Starting point is 00:09:10 all of this build out the energy infrastructure. It all takes time, but we just need to make sure to stay on top of it because will all of this crazy capex spending play out for all these companies? And meta alone disclosed $347 billion in leases that haven't started yet.

Starting point is 00:09:27 And it's Hyperion Data Center in Louisiana, a campus the size of about 1,700 football fields, shows exactly how this works. Meta is building it and will occupy it as a tenant, but neither Hyperion, nor the $27 billion in debt financing, it shows on META's balance sheet because a joint venture majority owned by Blue Owl Capital technically owns the campus. So META guaranteed bondholders, it'll make them whole if it doesn't stay the full 20-year lease term. But because META says that payment isn't

Starting point is 00:09:59 probable, it records zero liability today. NVIDIA has their own version of it as well. They committed $27 billion in equity investments in other AI companies between April of this year and January of 2027, money that is promised, but also isn't sitting on Nvidia's balance sheet as a liability just yet. This, again, is all built on the bets, the bet that AI demand and the revenue surrounding this demand will continue to show up fast enough and big enough to cover the bills that these companies are signing up for and co-signing on. They're like, yeah, I'll pay that. That's cool. I'll pay that because they're thinking this revenue is going to come. And it certainly, in my opinion, as we see this, will come. Like, demand is insatiable. It's just skyrocketing. Everyone's using agents. Everyone's using,

Starting point is 00:10:43 you know, all these different Claude Co-work and Koddx and all this stuff. Like the demand is there. And so at the moment, I don't feel some type of way about it. But if the cash flow doesn't show up later, if that demand doesn't continue, then, yeah, things can get a little spooky. Yeah, I mean, these are the biggest companies in the United States. Some of them are biggest in the world. And, you know, we definitely, you know, if it doesn't stay caught up the revenue and the earnings to be able to pay for all this, then we'll have to see what happens not only with the stock market of those companies, but also the general economy in the United States. And Alphabet and Amazon both posted negative free cash flow in recent results, meaning their capital spending is already outrunning the actual cash flow coming in from their businesses before you add in the trillions of off-balance sheet. promises still to come. Morgan Stanley's accounting analyst flagged the exact risk and in April notes stating, as these off-balance sheet commitments become more frequent, larger and more complex,

Starting point is 00:11:45 it is becoming increasingly difficult for investors to assess companies' total potential leverage. Translation, even Wall Street's own analysts are saying they can no longer see the full picture of how much debt risk these companies are actually carrying. So that was a mouthful. Austin, you're the here. What does this mean for you and your money? Certainly not a genius, but I appreciate it. The AI buildouts, you know, this is the AI buildouts balance sheet, finally catching up to all of the ambition around this. And most investors have no idea that the number is actually three trillion and not, you know, the six or seven hundred billion that we see this year and the one trillion we're expecting next year. Like, if you take all of that future commitment, you put it together,

Starting point is 00:12:28 it's like, whoa, these companies have already said they're going to spend three trillion dollars. Like, that's money that was not included in their earnings call CAPX guidance because all these companies they give you, hey, we're going to make this much money next quarter, here's how much we're going to spend next quarter, here's how much we're going to spend between now and the end of the year, right? Like they give you these numbers, but these numbers are the on balance sheet income statement, cash flow statement, the real generally accepted accounting principles type, you know, guidance forecasts. But they don't include these SPVs, the blue owl, you know, bonds, all that stuff. Like, they don't include that stuff. And so at least until they need to.

Starting point is 00:13:08 And so that's just the most interesting part about all of this. So Robert, like the winners here, for now at least are these private capital firms like Blue Owl that are stepping in and owning the financing of this infrastructure buildout and, you know, sort of having their fingers and all the company books. They're collecting the yield without the hyperscalers taking on that accounting hit. But the risks continue to be pretty straightforward, which is these purchase. agreements and signed leases mostly can't be walked back. And so if AI revenue growth disappoints even modestly, these companies don't just miss earnings. They contractually are on the hook for infrastructure that they can't use in a profitable manner, which would force even more borrowing

Starting point is 00:13:49 on top of what's already off the books. But Robert, at the end of the day, I continue to believe that the demand is there. It's very, very high. Everyone will continue to use artificial intelligence, tokens, compute, all of that stuff, which all of these companies that are putting up trillions of dollars of off balance sheet commitments towards, it's going to pay off because the demand will make this a profitable bet for them. I continue to believe that. And I continue to invest in these companies because of that. I just refuse to believe that some of the smartest minds in the world, which are the management teams of the Magnificent Seven and others, right, are just saying, yeah, who knows, let's just put it all on black and see what happens, right? Like, there's

Starting point is 00:14:31 trillions of dollars at stake here. And I refuse to believe that those management teams are gambling or trying to do something crazy here that I feel as if a lot of people look at this and think it's like a parlay bet on six or seven things happening in the future. Well, I think it's a big bet, the biggest in history probably in American capitalism and us maintaining the lead in cryptocurrency, AI, infrastructure and all this stuff. And where China got ahead of us is they started building out their data center energy infrastructure before we did. So we have to play a lot of catch up there. But the real story now is, though, is look at how much more these companies already promised

Starting point is 00:15:14 to spend that you can't even see. When the country's biggest supposedly fortress balance sheet companies start structuring deals specifically to keep debt off their books, that's usually less than an accounting efficiency and more about how big the numbers have actually gotten. I'm with you, Austin. I still believe in the sector. I believe in the growth of innovation in the United States. I'm still betting my own money on it. And I think other people should as well. But we definitely have to keep an eye when we see cracks in the armor, these rounding, you know, accounting things that come up like this that weren't spoken of in the earnings calls and all that. So I definitely remain positive as you do because I always am willing to bet on the smartest and brightest companies. in the United States like we're doing right now. Robert, speaking of innovation, I think this is a great moment to talk about this episode, sponsor, VCX, the public ticker for private tech.

Starting point is 00:16:10 Definitely. Before we jump into our third story, support for the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be part of that journey through perhaps the greatest innovation of all the U.S. stock market. It did not matter whether you were a factory worker in Detroit or a farmer in Omaha.

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Starting point is 00:17:07 So visit getvcx.com for more information. That is getvcx.com. Carefully consider the investment material before investing, including objectives, risk, charges, and expenses. This and other information can be found in the fund's prospectus at getvcx.com. This is a paid sponsorship. So Robert, let's now jump to our third story, which is the Fed's meeting, minutes that were released about the meeting that took place a couple weeks ago. Yep. So when the Fed held interest rate steady at their July meeting, three officials formally dissented because they wanted a rate hike instead of just keeping things steady.

Starting point is 00:17:45 That looked like a small contained disagreement, but then on Wednesday, the meeting minutes came out, and it turned out that a lot more people in the room agreed that there needed to be rate hikes than people realized. The Fed held its benchmark rate steady. at 3.5% to 3.75% at the July 28 and 29 meeting. Three Fed presidents dissented arguing for a hike the first time since 2016 that three officials broke with a majority in the same direction on a policy decision. But the Minutes released Wednesday said many participants address that policy tightening

Starting point is 00:18:20 would likely be necessary if inflation did not decline. So there are 19 total officials who participate in these meetings, 12 are voters and seven are non-voting bank presidents, and the minutes suggest some of those non-voters would have backed a rate height to if they had to vote. Fed Chairman Kevin Warsh tried to argue at his press conference that holding interest rate steady wasn't really doing nothing because market interest rates had already risen since June,

Starting point is 00:18:48 both in nominal terms and adjusted for inflation, which inherently tightens financial conditions on its own without the Federal Reserve actually taking action. But the minutes reveal the catch in that logic that market tightening partly happened because investors expected the Fed to hike anyway. In other words, Worse's justification for not raising rates depended on markets betting that the Fed eventually would. But now you have inflation that has been running above the Federal Reserve's 2% target for five straight years stuck somewhere between 2.5% and 3.5% depending on which measure you're using. Some officials in that room said current policy, might not even be restrictive enough to get inflation back down to that 2% target,

Starting point is 00:19:31 which means even holding steady, in their view, isn't tight enough. We have to take action and raise interest rates. And the pressures haven't gone away either. AI build out demand is pulling capital into the economy faster than the power grid and equipment supply chains can absorb it. And the energy shock from the Iran War has proven more durable than expected. But here's the twist here, right, that makes this a, really interesting two-sided story instead of just a straight like raise interest rates headline.

Starting point is 00:20:02 Since that July meeting, the actual data has begun to lean the other way. The July jobs report showed that the unemployment rate ticked down from 4.2% to 4.1% even as job creation started to slow down. July's CPI came in mild, which is fine. It did not reaccelerate. And the futures markets are telling us that the odds of a rate hike at the Federal Reserve's next meeting on September 15th and 16th have dropped to below a 50% chance, according to the CME group. So you have a Federal Reserve where their internal debate is getting more and more hawkish, which means they want to raise interest rates. And that's fine.

Starting point is 00:20:40 But under the surface, and at the same time there, you're looking at the data that's coming in. And the data is telling us that we might not need interest rate hikes. Right. Things are actually getting better, right? Inflation's not re-accelerating. and things are taking shape the way they should. The meeting minutes themselves admit that most participants still expect inflation to retreat this year, but, and I quote, many participants noted the possibility that inflation might be more persistently elevated.

Starting point is 00:21:09 And one more detail buried in those minutes, worse floated cutting the number of Fed policy meetings from eight a year down to six, saying it would let more information accumulate between meetings and give the committee more time to consider strategic measurements. monetary policy issues. No decision was made and any change wouldn't take effect before 2027, but it tells you that the Fed chairman is already thinking about restructuring how the committee operates in general. Robert, meeting minutes are important. And I feel like we're talking about the Fed probably every week at this point, but that's just because it's an important

Starting point is 00:21:42 thing to talk about. What does this recent release of the Fed's meeting minutes mean for our listeners and their money? My take is this is a Fed that's more internally divided that the vote leads onto and the exact moment the data is giving them cover to do nothing. That combination, a hawkish undertone paired with cooling data is exactly what creates volatility heading into the September meeting because the market has to guess which signals win. For your portfolio, this argues against getting too comfortable with the rate cuts are coming narrative. So rate sensitive sectors, let's talk real estate, small caps, long duration growth, could get whipsawed if hawkish members gain the upper hand as new data comes in. The safer posture here is owning companies with pricing

Starting point is 00:22:26 power, strong ballot sheets that don't need the Fed to cut in order to perform well. We talk about this every week, and it is so important to keep an eye on those sectors of the market. So as we zoom out a little bit here, Robert, and think about, you know, for five straight years, inflation has refused to fully die. And now we're learning that the Fed itself is quietly a little bit more split on if they want to raise rates or keep them the same than what we had thought just a couple weeks ago. So when the people setting the cost of money can't agree themselves, that uncertainty certainly gets priced into every rate-sensitive asset you own, which, as I'm looking at here, I mean, we're recording this on Thursday,

Starting point is 00:23:06 August 20th. The Dow was down one and a half percent. The S&P and the NASDAQ are both down about 1%. I mean, there's a lot of volatility in the markets right now. And I would argue that between higher bond yields and the Federal Reserve having no idea what to do about interest rates. And that's certainly what's causing it. Yeah, definitely. You know, there's a few things we talk about all the time in the Rich Habits Network. And that is don't fight the Fed and markets don't like uncertainty. And we've obviously seen that with all the volatility in the past few days.

Starting point is 00:23:38 So I'm going to jump into my radar points. If that's cool and get us started, I think I have three really good ones. I know you have three really good ones. So I'm going to jump in. We saw this week that Trump urged Congress to pass the Clarity Act at the White House Summit. So in crypto news, President Trump called on Congress to pass a fair version of the Clarity Act at a White House event attended by the SEC chair, Paul Atkins, the CFTC chair Michael Selig. And according to Reuters, everyone else, including we saw Coinbase's CEO was there as well. It was a positive meeting.

Starting point is 00:24:13 and the bill which would split digital asset oversight between two agencies and define when a token is a security versus a commodity remains stalled in the Senate. This was temporarily propped up by the crypto sector with hopes of a passing on September 15th. So it is kind of strange. We've got the Fed meeting coming up September 15 and 16. We've got the vote on the Clarity Act on September 15th. So there's going to be a whole lot going on in that couple day timeframe. But for anyone watching today, Bitcoin is up 15% for the week on some positive news, although we don't know where the prices are going to go in crypto. We don't know what's going to happen.

Starting point is 00:24:53 Right now on Polly Market, I think they have it at like a 23% chance of this approval in September. But we'll keep you guys posted on that one because obviously it's important for anyone holding crypto in their portfolios. Number two for me today is Metafaces a $1.4 trillion threat that could mean. turning in the keys and walking away. I don't believe that because it's no secret. Meta is one of the wealthiest companies in the world. But last year, it brought in nearly $201 billion in revenue.

Starting point is 00:25:24 And at the end of this year, June, it was sitting on more than $90 billion in cash and market securities. But now a federal trial underway in Oakland, California, is testing what it would take to financially hurt a company that big. Interesting take there in this article. But several of these states have done. join together to go after meta essentially for misleading the public about the risk, its platforms pose for the young users of designing features in Instagram and Facebook that could keep

Starting point is 00:25:54 children and teenagers hooked. So we'll see what happens there. They are putting together this coalition of 29 states attorney generals to get involved in this case as well that's been going on for a long time. Meta has a war chest of capital and obviously they're a very powerful company. So we'll keep you abreast of what happens there because, you know, who knows what that's going to do to the stock price if this thing really gets legs in the courts. And lastly, for me today is Costco is now selling Medicare plans. Costco is entering the $600 billion Medicare market, launching Costco branded Medicare Advantage plans with nonprofit issuer scan group, starting small in just three states and covering about five million enrollees. The plan integrates directly. The plan integrates

Starting point is 00:26:41 directly with Costco's own pharmacy, vision, and hearing benefits with the scan CEO calling it an effort to make coverage incredibly simple. So I really like this one because, you know, Costco has so many great features. We know Amazon has health care now. And this could be really good for all of those Costco members out there and try to bring, you know, affordability to the health care situation here. So I really like this headline as well. So back to meta for a second. So are you saying that these states are suing meta for 1.4 trillion? What was the 1.4 trillion that you had mentioned? The 1.4 trillion right now is through these five states. I think it's four or five states, but there are 29 other states that are supposedly going to get in here because the four states

Starting point is 00:27:28 are going to bring the case in and get it started, but it's brought up through these 29 other state attorney generals that sued the company back in 2023, and now it's resurfacing. And it's at $1.4 trillion is what I read that they're going after against META for these unfair practices for children. Well, Robert, before we jump to my radar points, you know, we are officially in the second half of 2006. And we talked about the uncertainty with the Federal Reserve. We've talked about the uncertainty that's taking place with semiconductor stocks, this $3 trillion of off-balance sheet debt and commitments. I feel like volatility is everywhere, which is why it's never been more important to have a plan. stick with it. And if you're a long-term investor like us, that plan has never been easier to come up with

Starting point is 00:28:15 and implement through dollar cost averaging and riding the wave. We've been talking about how important it is to dollar cost average for years now. And when the market feels shaky and it's hard to see your progress, you need to be using the right tools to keep you trending in the right direction. We think Blossom social is that tool for you. On Blossom, you're able to see your entire portfolio in a very clean and simple way, including your holdings, your performance, your dividends, all it. You're also able to follow other long-term investors on the platform helping you stay motivated during these uncertain times. Not to mention the portfolios on Blossom are all verified. So if you're seeing someone buy or sell a name, it's because they actually did it in their own verified

Starting point is 00:28:56 brokerage account. We're both on there. Our portfolios are over there. So if you want to join us, be sure to search Blossom Social in the app store. Head over to Blossomsocial.com on your phone and desktop. Also a link in the show notes below. And be sure to check out BeVis, which is their AI agent tool that can help you analyze your portfolio using AI. It's pretty sweet. So definitely go check out Blossom. All, Robert, I've got three headlines here. Dron delivery, Stripe acquiring open router, and then China's robot IPO frenzy that I was alluding to before. So let's start with this drone delivery stuff. Amazon and Uber have both dropped major drone news this week. And together it shows that this is not just a novelty anymore, but it's actually a real business model.

Starting point is 00:29:41 So Amazon is scaling prime air from just 11 metro areas to nearly 500 cities by the end of 2006. Uber also made its biggest drone bet yet, partnering with Zipline, who I think we talked about this a couple weeks ago, Robert, with Walmart delivery with drones. So Uber partner with Zipline to launch in Dallas and Houston by the end of this year and targeting one million drone deliveries a day by 2029, which is just nuts. Uber's CEO has called the delivery demand insatiable, and Uber's now investing into Zipline, which I think is pretty interesting. Again, you add Walmart now expanding with Alphabet's Wing and DoorDash with this FAA drone delivery certification, and every major delivery player in America is now racing to figure out how do we get drones

Starting point is 00:30:28 involved, which I think is cool. If you want to deliver something in my house in like 30 minutes, because my Uber Eats order from Tripolti is still going to be hot by the time it gets here. I'm cool for that. Second call out of mine is Stripe acquiring OpenRouter, which is a 90 employee startup that I think was awesome. I've not used it myself, but I probably should have. It's essentially a company that routes developer requests across AI models. So you can choose what AI model you want to use for your AI agent.

Starting point is 00:30:57 It doesn't just stick to a Claude Opus or a Claude Fable or a Chat-GPT-Sole or you know, insert whatever model you want to use here or a grok, right? They acquired it for $7 billion, which is up from that $1.3 billion valuation that they had just a couple months ago. Largest deal in Stripe's history. CEO Patrick Collison calls tokens the central currency for companies building with AI, giving Stripe a direct cut of that AI spending on top of all of its payment business. OpenRouter's founder who previously built OpenC, I'm sure you guys remember that one, it was a $13.3 billion company that was allowing you to trade NFTs. He did that. And then his second act, of course, was building now and pivoting to AI with OpenRouter. The contrarian bet moving away from NFTs and instead focusing on AI, which of course Mark Zuckerberg also did, which is kind of funny, has definitely paid off because instead of one model just dominating, you've got developed.

Starting point is 00:31:59 that are mixing and matching different models for different tasks that are allowing them to accomplish their goals with those AI agents using a lot less money because anthropic tokens begin to get really expensive. Now my final story, Robert, is China's robot IPO frenzy. Chinese humanoid robot maker Unitry, famous for robots doing those Kung Fu Panda type vibe and running and boxing and stuff on national television. Doc pops like 500% in its Shanghai. market debut hitting a $60 billion valuation despite just generating $250 million in revenue and only $40 million in profit last year. Now, the IPO was the most oversubscribed IPO in the history of this Shanghai Star stock market with 9.8 million investors chasing shares and fewer than

Starting point is 00:32:52 1 in 5,000 actually getting the shares. Deep Seek and Chinese state-owned enterprise. grab the strategic allocations before retail. Now, this is happening one month after the U.S. banned most imports of new humanoid robot models as a national security risk, and more than 40% of Unitri's revenue now comes from outside China, meaning that the risks of this are cutting both ways. So Beijing is treating this as a national priority. Unitri shipped thousands of robots last year. Morgan Stanley thinks that Chinese humanoid robots are going to peek into the hundreds of thousands by 2030 and then on the flip side you've got tesla trying to scale optimist to eight thousand units a month by december i know figure a i has officially manufactured a thousand units of their figure

Starting point is 00:33:41 three already so like things are definitely starting to heat up here in the humanode robotic space i'm excited i'm invested i'm well positioned there's a ton of different etfs out there i think it's h um n a good one we've talked about inside the rich habits network this k o i d there's also just straight up BOT, which is a closed end fund. ETF we like a lot. Like there's a ton of ways that you can, you know, be invested into the rise of humanoid robotics. And we definitely think you should be

Starting point is 00:34:07 because humanoid robots are the future. And by 2030, you're going to have one as a pet at your house. I am so happy to be doing this episode today. Just thinking about everything we just talked about. We talked about getting deliveries from Amazon and Uber through the sky with drones. We talked about humanoid robotics coming into our house to do our dishes. We've got automatic driving cars so we don't even have to have steering wheels anymore. What a dystopian future that is happening right before our eyes. And that is why the Rich Habits Network is so

Starting point is 00:34:42 incredibly important for all of you is because you've got us here at the helm every single week, making sure to keep you guys ahead of the curve on all the information, all the technology, where to invest what to do with your money because it is a crazy future ahead of us and we are here to help you every step of the way. So if you learn something on this episode, please consider sharing it with a friend. And if you've not yet joined the Rich Habits Network, there's a thousand, 55 people hanging out with us over there. Highly recommend joining us. We've had over a hundred and twenty-three people join us just in the month of August. Why aren't you the 124th? Right? Like just join us in the Rich Habits Network. There's eight hours of video coursework.

Starting point is 00:35:24 We're investing in humanoid robot companies. We invested into Apptronic and figure AI and all these other cool names. Like, join us over there, invest alongside of us, learn about personal finance and investing, seven-day free trial using the link in the show notes below or just type in Rich Habits Network on Google or however you find things on the internet. It's actually funny. Someone came from Duck, Duck, Go. We get a little like notification.

Starting point is 00:35:47 Shout out to you all using Duck, Duck, Go. Really care about your privacy. But anyway, join us in the Rich Habits Network. Thanks, everyone. and we'll see you on Monday. Two and five Canadians will hear the words you have cancer. That's why every step and dollar raised matters. On September 19th, join thousands in Toronto for the Princess Margaret Cancer Foundation walk.

Starting point is 00:36:33 Challenge yourself, friends, and family to walk 21 kilometers in support of life-saving research. Together, we can carry the fire and help create a world free from the fear of cancer. Register today at pmcf walk.ca.ca.

Rich Habits Podcast - Chinese Humanoid Robot $60B IPO, Big Tech's $3T of Hidden Debt & Bond Yields

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