The Pomp Podcast - Is Bitcoin Ready To Rip While Wall Street Breaks? | Jordi Visser

Episode Date: October 17, 2026

Jordi Visser is a veteran macro investor with 30+ years of experience and the author of the VisserLabs Substack. In this conversation, we break down why hedge funds are blowing up, the lessons from LTCM, and how tokenization could reshape the entire industry. We also discuss why bitcoin is holding strong, why CPI doesn’t matter anymore, whether Anthropic’s growth is slowing, and Elon’s flying car.=======================Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! =======================Need liquidity without selling your crypto? Take out a Figure Crypto-Backed Loan, allowing you to borrow against your BTC, ETH, or SOL with 12-month terms, 8.91% interest rates, and no prepayment penalties. Or check out Democratized Prime (https://figuremarkets.co/pomp) and earn ~8.5% APY on real world assets. Unlock your crypto’s potential today at Figure! https://figuremarkets.co/pomp Figure Lending LLC dba Figure (NMLS 1717824). Loans subject to approval. Crypto collateral may be liquidated. Terms apply - see full disclosures at https://figure.com/disclosures/ =======================This episode is brought to you by Investor Health — clinician-prescribed protocols for weight, metabolism, energy, and longevity, delivered to your door in 48–72 hours. No office visits, no referrals. Plans start at $149/mo. Learn more at http://www.InvestorHealth.com/pomp. Investor Health is a telehealth platform, not a medical provider. Compounded medications are not FDA-approved. Individual results may vary and treatment requires evaluation by a licensed provider.=======================0:00 - Intro1:12 - What LTCM teaches us about today’s market14:10 - Tokenization & the death of hedge funds17:40 - Why bitcoin is holding strong23:33 - AI is offense, bitcoin is defense26:47 - When bitcoin’s next rally happens29:38 - Why CPI doesn’t matter anymore35:59 - Debate: is Anthropic’s growth slowing?54:02 - Elon’s flying car & a Tesla SpaceX merger57:26 - AI capital needs & market liquidity

You know what the hedge is, if I'm right? It's to go buy Bitcoin. So if you believe that you're going to get disrupted by AI, then you start asking, if I'm getting disrupted, who isn't going to get disrupted? It's really hard to come up with any company, which is why I focus my attention on the agenda compute side. I have total confidence over the next three years that as a basket of semiconductors, of the optical companies, of the transportation, you know, the industrial companies that make the

data centers that over the next three years, that over the next three years, with humanoid coming and everything else. What's going on, guys? Today we've got an excellent conversation with Jordi Visser. In this, he's going to talk about the death of hedge funds and why tokenization may be the thing that brings that right to their doorstep. We talk about long-term capital management,

Bitcoin, tokenization, what is going on with CPI, why we don't care about it anymore, how AI is now inevitable, what's going on in financial markets, what it means for your portfolio, and then, of course, we've got to disagree on something. So we're going to get into a very heated debate, heated for two gentlemen,

and in that conversation, conversation, I think you're going to learn a lot about how AI is working, token prices, and how we see the world evolving over time, both for big companies, small companies, and how you can invest along all these themes. That and much more in today's conversation with Jordie Visser. All right, Jordy, you've got some very unique thoughts this week on long-term capital management and how we may be living through a very similar time right now. Can you give us context on how you're thinking about this moment in time? Yeah, and for those of you who are my subscribers, you saw me do a very brief video on Thursday.

And the reason I put it out is because so many people had reached out. And I had a busy week, but because people had reached out and said, what's going on? Is this something I should be worried about? The sell-off and all of the fears around the AI trip. Yeah, semiconductors are down seven days in a row, core weave, CDS, all this stuff. And of course, the echo chamber of bears gets louder and louder

whenever there's a, oh, it's popping now finally. To give you like a brief sports analogy, this is like you go into a game and you've decided to bet on a football team that is given 28 points. So there are four touchdown underdog, and you get the first touchdown and you start banging your chest.

That is what bearish people on the AI bubble popping when the S&P is a couple percent off the all-time heist feels like to me. Like, I've never met anyone who predicted the end of a bubble, and I certainly didn't, don't think anyone who's waiting every day for anything to happen. So this week brought out a lot of fear. And I want to share some thoughts on how LTCM fits into this, because I think it's really important for people to understand leverage.

So I'm a believer, and this is the reason why I'm not in the hedge fund industry. I have no interest in being in a competition against artificial intelligence, which everyone who's staying in the industry is competing. They're competing against AI agents, the fact that any retail person can set up a long short hedge fund, instantaneously now backtest things and do it. So I didn't believe this was going to be an easy period. But there is no doubt in my mind with 100% certainty,

just like before the dot-com bubble. We knew before the dot-com bubble that the internet would change our lives. What we didn't know was how long it would take. So when the dot-com bubble happened, which was right after LTCM, which I'll get into, people have to understand every single thought on the internet ended up being right. The problem was the capital that was borrowed to build the pipes necessary for it, took a long time to get there.

Now, let's go back to LTCM. I was in Brazil. I got to see LTCM on the other side of their trades. And to give you the kinds of trades they did, Telebras, which was one of the largest trading stocks in the world in 1997, was going through a privatization. So the company basically was going to be, or not, they were going to be privatized. And what was going to end up happening was, ordinary and preferred shares would converge

to the same price. So one of the trades at LTCM did was to basically short the preferred stocks, trading at a premium, to the ordinary shares. And they'd converge as the privatization got, the date became more certain. Well, before that date happened, the spread widened out. Now, why did it widen out? Why would it widen out? Well, there's a variety of reasons that go into why a spread with widen out,

and that's what hedge funds are going through right now. And the reason I say with certainty, AI and the compute needs for it are an inevitability. You can debate whether it's going to take 20 years and we'll go through some form of a dot-com bubble. You can have that debate. Everyone knows my views, which are, as long as demand is greater than supply, There's no chance in my mind of having an unwind that is very similar to the dot-com bubble because the people that are financing it are very different than the telecom companies. I made a joke on my video on Thursday when I compared it to the housing market. I'm like, okay, let's go through Corweave.

Corweave doesn't have strippers funding their needs for capital. It's actually coming from Microsoft, from OpenAI, from go-through. meta, go through the list of really big companies. And I made the joke about the stripper funding because that's what was going on with the housing bubble. Like they started defaulting on their payments. Microsoft's not defaulting. Meta's not defaulting.

Open AI is not defaulting. So for CoreWeave to be an issue, the Gartner Group said that they think by 2030. When companies report earnings, they have visibility with orders sold out to 2030. This has been coming on repeatedly. So for the first time in the history of markets and certainly the first time in the history of my life, everyone is worried about whether we're going to hit revenues in five years.

That is not going to drive the inevitability of AI. And I find it almost impossible that we won't hit there because I listen to people like Jensen Yuang. I listen to people that have been in the technology field for a long time that realize that every day the orders keep coming in for compute, for compute, for compute. So everyone can take the nuance. I'm bearish anthropic, I'm bearish, open AI, I'm bearish this. The problem people have to understand is the only leverage that I see in the system that is being knocked out is hedge funds.

We recorded last week at the end of that day, on Friday of last week, one of the best hedge funds of this century, this century, not situational awareness, not some guy who just started managing money, loan pine capital. was up 40 plus percent in the first half of the year. And as of the end of September, and I want to say in a quarter that the S&P was up 2%, never did the VIX go higher in any meaningful way, never in an entire time was there a big move on a monthly basis.

And yet somehow they gave up the entire performance. And so people understand how that means. If you're up 40 plus percent, and I don't know what their fees are, but let's assume you're charging 20 percent and let's leave the management fee out. Well, that means by definition, and you were up more than 50% because you gave it all back, and now your net return is zero.

That just says that something big is happening. It wasn't just sensual awareness. It was some of the best hedge funds that have ever existed. And in my opinion, what is going on and will persist for the entire five years to the inevitable is what I watched with LTCM. You are making a bet as to how long your investors will stay with you. You are making a bet on how long the prime broker will give you leverage for whatever leverage you're using.

We are watching leverage come out of the system. And the hedge fund industry, in my opinion, is going through a process, which is going to weed out a lot of leverage in the system. And this process is going to continue and continue because the concentration of the winners in AI is so small. And the losers are so big that this process will leave people needing to invest in certainty. And with certainty, you're making a bet on time and your ability to navigate that So I think this was a big week.

And when you listen to the bears going, the bubbles unwinding, the irony is the bubbles are in really smart people that have used leverage to make money for a long time. When you look at investment strategies, there is the Buffett era, buy great things, hold them forever. There are gold bugs, bitcoins, buy great asset, hold it forever. Hedge funds, they really, outside of the rent tax and maybe the Citadel's market makers, most of the hedge funds have found, you know, kind of structural, misprudgeoning or structural arbitrages, they've used a lot of leverage, and they've been able to generate significant returns. What I think I hear you saying is that that section of investing is now rapidly evolving on a day-to-day, week-to-week,

month-to-month basis. And so you can't sit here and say, hey, you know what? I'm going to buy the clothes and sell the open every day, and I'm going to do that for months or years, and I'm going to do it with lots of leverage. And so I'm going to clip my 100 basis points each day, and I'm going to end up with this great return. And because everything is evolving so much,

that that's really where now these people have to evolve with the market and you're just increasing the odds, so they make mistakes? Is that the way to think about it? So I'm gonna go a little bit further backwards and say this. If I asked you what has her private credit, if you really think about it, it was AI.

So AI. So the majority, as we learned, of the private credit investments, They're from 21, 22, and they're SaaS companies. What did AI destroy was SaaS companies. And it didn't move them all to zero. But what it did was, if you make investments in these companies and they're in competition with AI, it just eats at you. My thesis has always been that human beings are no longer the top of the intelligence food chain.

If everything that was made was about LTCM, when genius failed, we are now at the point where An AI agent can do everything that a hedge fund can do. Everything. There is not a single thing. And who would you rather lend to risk management that is instantaneous in seeing everything happening that can read every single thing from a company can understand, am I in a crowded position or not by going through the 13F findings? Hey, I heard, I mean, there's a new hedge fund, VARA, not new, but VARA AI, reportedly with 26,

they were down 40-something percent in July. So this is a new story today. I don't know anything about them. I don't know what the reality is in terms of where they are. But they're going through a similar situation. And I'm sure, just like with LTCM, if you go back, all of the positions

that were unwound from LTCM made the people that took them on money. So Ken Griffin got the whole Leo like acknowledgement. I don't think people realized. When LTCM went out, the Fed didn't bail them out, they gathered 14 banks, hedge funds, whatever, that contributed, I think it was slightly less and $4 billion to take their stuff out.

Now, I was part of the LTSA to see I'm closed down when I went back to New York after Brazil. So I was on one side of LTSA, Sam, I saw the other. I don't want to pick on the hedge fund industry. What I want to pick is that illiquid assets have been impacted. VC's been impacted. Private credit's been impacted. Private equity's been impacted.

Bonds have been impacted. Real estate's been impacted, meaning remote work. AI is going to bring digital agents. What are we going to do with all these seats? I just think that when you look at the returns you're getting relative to where interest rates are You your bogey is getting higher and higher and AI is pushing rates higher at the same time So AI is crowding out all inefficient businesses, but it's also going to crowd out hedge funds who use leverage That depends on the volatility correlation of the market and the crowded nature of the positions and I just think the industry is too big on a levered basis relative to the liquidity that exists this will merge with token

because the final piece of this, and I was at Morgan Stanley this week, and at the very end, we talked about tokenization. If you're a hedge fund listening to this and you haven't thought about the way tokenization will change your life, forget your business, your life. Risk managing 24-7, 365, it's an unthinkable process to me, but that's where we're headed to. The capital that will be immediately changing. It has huge implications for the volatility in the long. market has huge implications for the way you hedge your book and the the ability for prime brokers to provide leverage. Now, that may not be this year's business, but just like with AI, these things are moving

so fast that over time, your bogey becomes, hey, where's the cost of capital? That's why when you and I talk about, for me personally, my cost of capital is related to Bitcoin. It's not related to this because that's the way I see this ending. And so for AI, if you really go through when the hedge fund industry entered this abyss, it started in June. And since June, let's say exactly four months ago, go look at what Bitcoin has done. It's up close to 30%.

Go look what Ethereum has done. It's up more than 30%. The S&P, flat. NASDAQ, flat. Hedge funds? I mean, I just told you, a lot of these funds are down 40 plus percent and nothing has happened. This should be scaring people because the only way this ends is if this isn't the case. So every time we get another one of these little episodes like this week, the core weave thing is ridiculous.

They have cash flow coming from big companies. This is not the same situation as telecom. Are they good equity investments? I don't know. Are they good bond investments? I don't know. But I know this. We won't know for sure whether they're going to be in trouble, according to Gartner, until 2028, 2029, 2030.

That's not going to drive the market from there. tokenization, you think, brings both liquidity and transparency. And you're arguing that tokenization could be the death of the hedge funds? I think as time goes on, it will put so much pressure on the way hedge funds. And again, there are the mega hedge funds, which will sustain the longest over time. And for no other reason, they've just met, most of them gone to like five-year lockups. So they've locked capital in. I think this tokenization and this concept of bringing in locked up capital,

So let's go back to private credit. If you go into private credit and you look where the BDCs are trading, so real-time marks on this. And let's assume right now the BDCs are trading at 20% below where retail investors who got into private credit, so they're basically over the course of, let's say, the next four years. Let's just use all this. They end up losing 20% on their investments, okay?

It's not going to kill them. It hurts in the fact that if they would have had to have had it, the fact that if they would have had that capital and been able to sell out at 20% below here and then put the money back in the market, well, that's double the impact. It's the trapped nature. When tokenization comes and people are like, okay, where can I get out of this? Well, someone is willing to buy into private credit at some level. So you have trapped capital that doesn't want to be there anymore.

This is the same thing for endowment, same thing for a lot of it. As tokenization comes, it will free up the ability for there to be a price on And once there's a clearing price on things, then capital will go to where it should be. What it will also do is, what would I rather own, core weave debt at 75 cents on the dollar, or the private credit garbage that I own from the 21, 22 vintages that I'm sitting in? I'd rather own core weave right now for the next whatever years than this. So that capital would come in and core weave would go back up. Remember when Stretch Michael Saylor's product traded down to 75?

I heard the same, the exact same people, sending out ex post on core weave. The stretch things went all the way back up to par. So these arguments of people looking at short-term things and saying this is the end of it, this is the, these are mainly hedge fund people or people that made most of their money on leverage. There are two ways, like general ways, that hedge funds end up making money. So Dracke Miller never talks about, like, leverage, and I'm not sure what he's ever used in leverage. He talks about putting a position on, being concentrated, and that's the risk he's taking, his concentration risk.

On a diversified hedge fund that's using leverage, like an LTCM that's levered 30 to 1, they're betting on correlations and volatility staying in some kind of way that they don't have margin calls come in because of the amount of leverage. Well, that's the way most of the multistrats are set up. And so if we end up in a scenario, biotech blew up in September. So everyone who runs a long, short portfolio in biotech, and I say everyone, I don't like absolute statements. a lot of funds from what I've heard, pods in particular,

had trouble. Converts. Converts are part of core weave. They're also part of micro strategy. When you get these little things happening where people are running some kind of leverage where it's like I'm long this convert, I'm sure this convert, they're depending on these things not to widen out,

like LTCM, well, this has been another widening out. So I think for people that are trading and like, I'm trying to give my subscribers thing of like, if you need to make money on a position over the next month, You're in trouble. Like, take advantage of the time that you have. So maybe the most shocking thing to me in a positive way, all of the weakness in the stock market, all the weakness in the Neo Clouds and, you know, the AI trade, Bitcoin has held in really strong. It's been trading pretty much between $82,000 and $85,000.

And it almost feels like it's defying the market momentum where everything else was trading down and Bitcoin holds in. what do you read into that? So what I read in is as it gets harder and harder to own other things, whether it's a computer decided, whatever it is, human beings and computers look for good sharp ratios. Bitcoin sharp ratio right now over the last four months stands out. And it stands out as the rest of the world is kind of going through this chaos. And I do want to say, this is not just the AI trade. Like I said, the NASDAQ's unchanged over four months.

The SMP is unchanged over four months. The bond market is down. It's getting very hard to find investments just using a trailing period that do well. I believe it's because the size of the space is too small. tokenization is a reality. Like I said, I created my crypto ecosystem. You know, we talk about Bitcoin. I also can say that I watch near every single.

single day as kind of one of these AI agentic where I think it should do well, Ethereum, the same thing. It's not just Bitcoin that's hung in there. It is the most quality parts of crypto. And I still believe that this is a reality of something for next year. If you ask me when the AI trade, because if the AI trade is an inevitability, the time for it to rally is when people have just taken off the risk. And when do we learn this first with situational awareness? Right now, someone sent me something saying the AI long short trade on the Morgan Stanley Prime Brokridge list is now in the seventh percentile of the last year. Seven.

So the risk has been completely taken off. Now, it's in the seventh percentile. It could still be high, but that is relative to the last year. For me, that means that people have bailed out. There are three trigger points that I'm looking in terms of timing for the next wave. And this year, if you look at the S&P 500, it was very frustrating start to the year, first two and a half months, and then all of a sudden we had a big fall, 9%.

And then out of nowhere, with the expectations that oil was going to 200, the S&P started to rally purely from short covering and things like that. So there was really only a window of about three months this year where the S&P rallied, and during half of that time was the fear over oil. Now, what drove the S&P hire? it was all the AI trade. So it was only a three-month window. And aside from that, that takes you from March to June.

There's been no rally in the S&P the entire year. So your windows of making alpha have gotten smaller and smaller. And this is the way Nvidia's traded for the last three years. They make money on an alpha basis. It's like 20% of the time. I think the entire market's going to be like that. So for people that are watching Bitcoin, on a relative basis, it is starting to do what I thought it should do.

And when we get into the end of the year, I still will say the biggest positive for me is that the amount of really smart people are starting to call up every day going, will you talk to me about tokenization? If I write enough thoughtful pieces on how it affects M2 and how it affects hedge funds, more people want to hear because they're interested in, what if he's right? You know what the hedge is, if I'm right? It's to go buy Bitcoin. So if you believe that you're going to get disrupted by AI,

then you start asking, if I'm getting disrupted, who isn't going to get disrupted? It's really hard to come up with any company, which is why I focus my attention on the agenda compute side. I have total confidence over the next three years that as a basket of semiconductors, of the optical companies, of the industrial companies that make the data centers that over the next three years, years with humanoid's coming and everything else, that earnings will come to those companies.

And I have faith that relative to home builders and autos, they're going to outperform, which means those companies will go up. I just think if you're betting for it to happen at any month, you're going to have a really hard time because hedge funds, I think, are playing the same game and they're crowded into the exact same trades. Today's episode is brought to you by figure. If you're under Bitcoin, you already know. Selling's the last thing you want to do.

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So you keep your upside, but still get liquidity. And I know the first question people ask is, yeah, but is it safe? It's a good question. Figure uses MPC custody, which basically means your Bitcoin stays in its own segregated wallet. It's not being lent out, pulled, or sitting on some exchange. They also have optional liquidation protection, which helps if the market gets volatile. And if you're on the other side, like you've got cash and you want to yield, they've got something called democratized prime. It's earning up to 9% APY, paid hourly, and is backed by real-world assets, not just token inflation.

So whether you're trying to hold your Bitcoin long term or are, actually put capital to work, it's a pretty interesting setup. If you want to check it out, I've got a link in the description that you can go to, or you can go to figuremarkets.com slash pomp. When you play sports, when you play a board game, there's always, at certain times you want to play offense, other times you want to play defense, and actually understanding when to flip back and forth between those is pretty important. What I love about having conversation with you every week is you come from a very different world than I come from, but we both have arrived at the same thing. And for years, I've always thought about these complex financial trends

or developments are very hard to communicate. The phrase that I keep using is AI is offense, Bitcoin is defense. And it feels like if you go back to that board game analogy, you want to use AI to go disrupt the market, disrupt a competitor, disrupt something. And so that offensive move of using this technology, immense amount of opportunity to do that. At the same time, if you play 100% offense, you expose yourself, almost like boxing, right? If you don't cover your chin, you can get knocked out. And so Bitcoin then becomes defense. And it feels like if you can use AI offensively to go and get revenue, get profit, you bring that back.

Now you have to somehow protect it from being disrupted. And that's where you stored in Bitcoin. Is that kind of a good summary of your worldview as to, you can? to how this comes together. So let me use a real-life example, and I do want to give- Sylvia.com. I'll plug here. Early in the podcast.

Peter, where did Peter Thiel just move to? Well, I know the truth, but go ahead. You can go with the public store. What did he tell people? What did he tell people? Or what's the news reporting? That he moved to Argentina? Yeah, he's in Argentina.

You guys, Google his address. Okay. Let's just use the reported news story and the reasons why. Okay. AI is going to take down the world. Humanity is going to be destroyed. Okay. Did he move there for economic opportunities?

Assuming you move there. Do you move to Argentina for economic opportunities? Malay is doing a great job, but I don't think so. Do you move there for safety? Do you move there for... I lived in Brazil. One of the reasons that people moved to Brazil, shortly after World War II,

is because of the fear of nuclear war and everything happening and where they would be the safest and where to hide and where to go through it. So I do believe, and I've always believed this, this is where the debasement crowd gets mad at me on one side. The programmable side gets mad at me on the other. I believe in a deflationary world accelerating right now. So instead of disruption, I believe in deflation

is just going to tear apart everything, literally everything, leverage the whole thing. You don't need the leverage. You don't need the returns that you're able to get from these things in a world where AI is coming to just be deflationary. So Bitcoin to me is more about where agents make decisions going, hey, I don't want to take risk today. Where do I move my money for a store of value that is creating good returns

and it's safe or safer for that. than everything else type thing. So I do believe that's happening. I want to make sure I answer one thing that you said before that fits into this. So when will Bitcoin have its next rally? Why do believe that comes to when the AI trade starts to have, let's say, its next bounce?

Either right during or after the hypers report, because it'll coincide with two things. It's happening at the end of the month. So people start realizing, when did situational awareness happen? When did the last bottom? them happen in AI. It was at the end of the month. The end of months are really important when hedge funds are in distress because they play short stacked until there's a new month. And if people don't realize this, as someone who's in the hedge fund industry for a long time, the stress on people

in December versus January. Different ball game. Different ball. It's, oh, my gosh, when you're in December and you've got a big stack of chips and you're like, I don't want to take any risks this last month. So the end of this month is a big one. You have the midterms. So right around there also kind of coincide. So if I had to guess, I'm going to take two times where the next AI upswing second. Secondly good November? No, no, no. I would say right, but it usually happens before the event. So this would happen when the hypers report. And I do think there's an opportunity for the hypers to because the stocks are trading so well, this ROIC thing to me is so stupid. The anthropic and open AI thing the last two weeks is just so stupid.

Everyone please go listen to Jensen Yuan with Brad Gersoner on the BG2 podcast. I will be covering it for at least five or six slides in this weekend's video. Just go listen to a guy who actually knows what's going on and how simple he makes the whole thing about where the revenues are going to come from. They're not all about open AI and anthropic. The second time would be December. And it would happen in the month of December because that is the time when a lot of people just say, I'm done with the year, and it gets away from them going into next year. Those are the kind of channels where if I only think the AI trade is going to work like

three months of the year, which is what I think, maximum, it could happen three months in a row or it could, like the S&P did this year, or it could happen one month, it goes up dramatically, then nowhere, then another month. That has been the nature of the game. And so I do believe that those are the two times for the rest of the years ago. For Bitcoin, I expect it to have its next move up to the highs, but I'm going to say, again, that my belief is that next year, because of all of the things that are happening on tokenization

between now and the end of the year, real stuff is happening. More and more people are paying attention to crypto, and the more people that pay attention to it, the more people that get involved in it, the more the reality becomes that there's money flowing into the space. And if money flows into the space, Bitcoin is going to do well as well. Now, when we sit down for this, we try our hardest not to talk all week. We do a good job of that.

Yeah, although it's sad. We tried not to. We make a little list. Here's all the topics we want to talk about. This week's list does not have the CPI report on it. CPI came in, quote, quote, hot. Everyone was freaking out. You nor I seem to care nor think it's a big deal.

you're talking about deflation, and it struck me as I was reviewing the list three minutes before I came in here, that neither one of us were planning to talk about CPI, even though most people in the traditional world will think that's the biggest story of the week. Yep. Why do you not care? So right now, core CPI is 2.6%,

whether it's 2.6% or 3.2% or 2.2% or 2.2% it's not going to help you make money. It doesn't matter. So if I come in here and say that interest rates where the level is is not going to be the thing that makes you money, it's just a reality of the situation. I've actually become numb to all of these things

because they're so inconsequential to the reality of the AI trade. And that's the thing I just want people to understand. If only 20%, it's really 24% of the stocks in the S&P 1500, have created Alpha since ChachyPT, a time when inflation was actually up at close to double digits. This has become insanity. And I think the Fed makes it insane.

I think history makes it insane. It really does not matter whether inflation is 2.3% or 3.2%. The only time in history of markets that something really bad happens is when we lose lots of jobs and the country goes into a recession because credit starts to unwind. That is not going to happen. So I have complete certainty that that will not happen. Can the stock market be down 10% over a year because the CPI surprises and goes up to 3.5%? Yes, it can.

Is that the end of the world? No. I'm going to highlight this weekend that from today, if you look back over the last 10 years, the S&P has given you about 17% a year. If you look back over the last 20 years, it's greater than 10%. Last 30 years, greater than 10%, last 40 years, last 50 years, last 50 years, less 60 years, less 80 years, less 80 years, less 80 years, greater than 10%. Do you know how the majority of people get wealthy through compounding of money in investments? The S&P 500, that is 10, 20, 30, 40, 50, 60, 70, 80, 90, double digits in total return for the entire time period.

Why are you sitting here worried about people telling you that a bubble is going to unwind? Why? Now, if you're 90, I get it. If you've got money in the market and you're 90, you may not live long enough to get the benefits of staying in the market. If the market goes down, as I told my kids, I'm like, that's where you stop spending money and you put more money into the compounding machine. You buckle down and you go, okay, I have a job. Everyone has a job in this country who wants a job.

Everyone. You may not have the job you want, but you have a job. That's why the jobless claims are at all time low. And when I say all time low, so people know, that number that comes out every Thursday, the weekly jobless claims, that is not adjusted for population. So it being at 200,000 and sitting at 200,000, that is the amount of people that have had to go claim insurance for being unemployed. That is the lowest number, basically in history. And if you adjust it for the population, it's lower than it was when the population was half as much.

It's lower than all of these other times. So there's no job loss. And my grandmother taught me very well. Like, unless people are losing their jobs, they're still spending. And they might be spending more than they have and they're taking out credit cards. But when the real problems come up, it's when people stop paying their debt because they're out of work. And if they're out of work, we start having housing bubbles. We start having the telecom companies because the telecom companies built stuff.

They didn't have any revenues coming in the door. I know the revenues are coming into companies like CoreWeave. I know the revenues are coming in because Anthropic is the fastest growing company in the history of the world. And what do people talk about? I think it may have slowed down for a month. I mean... Are you worried? About what?

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Individual results may vary. And treatment requires evaluation by a licensed provider. Terms and conditions apply. C.investorhealth.com. Anthropics growth rate is going to continue to decelerate. We can disagree on it because people are realizing that there is, they have the worst position in business possible. Ready?

Okay. They have increasing competition from well-funded, good entrepreneurial competitors. Disagree. Go ahead. Hold on. So it used to be Open A-I and Anthropic. Now it is Open Eye, Anthropic, GROC, Gemini, Mews, etc. Everyone is now getting in the game.

Disagree. Keep going. And then that is just the major labs. But then you have all of these companies that are starting to come out and say, wait a second here. Coinbase comes out and says, hey, we're using open source models and we're training our own stuff. We don't need those guys anymore. We can do it better ourselves.

We come out, we say that. Harvey comes out and says it. And so you have pressure from basically people saying, hey, I'm going to fine-tune open source. If you look at open router, you see massive acceleration and all of the open source stuff. And so a company like Anthropic, which used to benefit from an oligopoly,

that oligopoly doesn't exist anymore. It is now becoming decentralized. And people having lots of options. Disagree. And okay. And what ends up occurring at the same time that you're getting competition, death by thousand cuts from open source,

owning your own intelligence, and the other models, is token costs are falling off a cliff because there's massive pressure there as well. So when you see GROC, Open AI, etc. So what you basically do is the equation that I use is number of tokens processed times price per token equals revenue. The number of tokens process on a percentage basis going through Anthropic on a per customer basis,

my guess is it's falling. Ramps AI Index shows this. The rise of open source shows this. The increase of competition from major labs shows this. Then your price per token is falling. as well. So they will continue to grow. I'm not here to say that they are going to stop growing, but the growth rate is going to go from, oh, my God, this is the greatest thing ever, to it will go from asymmetric to it slowly become more and more linear because not anything that they're doing.

I actually think they're continuing to innovate. It's just the market pressures end up being good for us as consumers. But like, that's a very different business. And we sell that. Their valuation, people that are going to come out at $2 trillion now. It looks like one, one, and a half trillion, it's a 25% decrease in potential valuation, $500 billion that they've lost in six weeks, eight weeks. So. You disagree, go ahead. Have the floor professor.

So, Professor Jordy. We've only had, I think, so let's separate when we have different views on things that are related to the next month or two or things like that and longer term views. One of the ones that we disagreed on, which to me is the exact same situation is when you thought the budget would be balanced. Okay? Guy goes back to the one time that he got me. No, no, no, no, not the one time,

but when you're taking a long-term view of something, you're making a long-term statement based on one-month trend of something, and where we agree is there is no way. So Anthropic has 10 times. At the end of this year, they will be around 10 times where they were a year ago on ARR. No question about it. They're on that pace still.

Even if they do what they did from Q2 to Q3, they will be close to 100 billion of ARR at the end of this year. Allegedly. Okay. So the beauty of that is they've 10 times. If you ask me where I think they'll be next year, I don't know, three times, three and a half times. So we agree on the fact that it won't grow at the same pace

that it has. Of course. It's bigger company. And where I disagree, and this is the most important thing, we haven't talked about this. So I'm gonna, I'm gonna get to it in the end by comparing Sylvia to J.P. Morgan, okay, in terms of what they're going to use. Okay?

You're saying everyone's going to say, I'm telling you, I've worked at a bank. When you're spending $16 billion a year or whatever they're spending now in their technology, you are not putting open source as your big thing. That is not happening. I disagree. I'll tell you why. No, no, no, no. It's not even, this one I won't even like let you go too far.

If you're going to tell me exclusively. No, no, no. Okay. Just so, and let me the back up for a second. Forget all the competitions every second. I can just tell you from my experience, when we started with Sylvia using the models, and I've got a lot of questions, actually, maybe it's helpful for me to understand that. I explain this.

We start out chatGBT wrapper. So basically build a bunch of software. You hook up your accounts. When you hook up your accounts, you can talk to AI, and it feeds in the context window your query, how to get my taxes down, along with the context of your personal finances, and it goes asset by asset and says, okay, this is a tax loss harvest here. bonus depreciation here, et cetera. So it's better than Google.

It's better than just a regular LM because you get the context plus that. We went from zero to $550,000 per month of compute cost in like five months or something. It was explosive. That was like an alarm going off saying, oh my God, every time I tweet and tell people to go use Sylvia,

money is coming out of my pocket because they're using more compute. Now, the first thing we did was, we didn't even touch the model stuff. It was just like architecturally, if you refresh a page and it hits the model, well, like, when we refresh the page, we shouldn't hit the model, right? So there's a bunch of, like, people were just trying to figure out how do you build architectural technology today with this whole model computing.

Once we got all this low-hanging fruit stuff, then we looked at the model. I was not convinced to switch from the frontier models to open source until I realized that it was going to be lower latency and better performance. The cost is incredible. If we process 500 million tokens on Anthropic versus our own hardware and software, we paid 97% less. That alone should be a big incentive for people to go do it. But the thing that got me convinced was, wait a minute, you're telling me that the answers will be more accurate. You're telling me that they'll be quicker.

It'll be a better performing experience for the user. Oh, and by the way, it's 97% cheaper? Of course we're going to go this way. So what I think ends up being a huge headwind, which again, people, they're still trying to like kind of feel in the dark on this is I find it very hard to believe that J.P. Morgan is going to take all of their information and they are going to send it to Anthropic and they're going to say, please don't look, please don't use this for training, please don't do any of this stuff. And instead, they have the option to go and take open source software and then they can train it on their own internal

data architecture, et cetera. There are still regulatory concerns, legal concerns, data privacy, security, like there's all this kind of stuff. But I actually think that this experience is more secure, more private, more regulatory friendly, than we're going to use this open, you know, we're going to use the Anthropic, Open AI, et cetera. So to me, it's not just the cost. It is controlling.

Think of it as sovereignty. JP Morgan wants sovereignty over their AI. They do not want to be reliant on Dario. Do you agree or disagree on that? See, the problem is your thought is coming from your experience at Sylvia. Yes. Okay. Maybe I'm blind. Well, here's the thing. You would die for the valuation of Sylvia to be equal to the tech budget of J.P. Morgan. Of course. Okay. J.P. Morgan... Just a matter of time, J.P. Morgan... Exactly. So... But this gets into the difference between the two economies,

and this is the part that I want to say. J.P. Morgan doesn't have time to wait. You mentioned OpenRouter. Who just bought OpenRouter? Shripe. What is Stripe's valuation? $200 billion about. Like $160 is the last one, but the people telling me who are thinking investing is closer to $200. What's Citibank's market cap?

$200 billion. How many people to Stripe have? $10,000. How many people to Citibank have? $200,000. So Stripe bought OpenRouter, why? They're not a routing company. J.P. Morgan's net interest income,

did you see the number on their most recent earnings report? Tens of billions. It was a hundred. $107 billion. Okay, I want to put that number, $107 billion. So J.P. Morgan is going to be in a speed race to not lose that money because what does Stripe offer you? The ability of not, you put your money in, you're getting paid yield, as opposed to I

put my money into JPM Morgan, I get zero yield. They're borrowing money at zero and they're lending it out at four, five, six, seven, and they're making a huge spread. there's two parts of a bank. There's the, let me put it in the bank and keep it there. And then there's the, okay, the bank is making money borrowing and spread. So I believe what Torson's lock, that AI agents will move that money out. I've said it publicly.

I'll say it again. If you go from 2022 and you look at money market fund growth, it's been 70% growth since 2022. Bank deposits have grown by 5, 6%. The taking money out of the bank, is already happening. So the spread has gotten wider and they've been able to lend it out. The reason I bring that up is when you talk about the intelligence side, the only thing that matters to J.P. Morgan over the next three years is the agent workflow. They need to basically

deal with people because their spreads are going to be going down. So the game for profit margins is how does AI in the Fortune 500 companies, the Citibank, the only way Citibank can complete with Stripe, who has 190,000 less people, they need to get rid of people and still do the business and keep their spreads. It is a very complicated game to do that with agents on the one side that are killing you because they are eating at your net interest income. But at the same point, you have to find a way to replace the people's workflows. So you're dealing it from a position of no employees.

You want the user to have a better experience. and you want the company to find a cheaper way to get that experience to be good. I completely agree with that whole thing. I have no problem with the fact that that'll go. But in a Fortune 500 company, so let's separate the consumers, and let's separate what I consider Sylvia as being part of. I consider this the tokenized digital economy. The digital economy, the Amazon versus retail malls, the Google versus newspapers, all of that rise has led to the most profits. So the part that I agree with is the winners of the next 10 years are the people that only use OpenSepard.

So we agree on that. But the enterprises will pay Anthropic and Open AI because of the smarter intelligence and the companies that have the most money, they should be spending the most money on their AI and not taking a risk. Jensen Yu-Wong talks about it all the time, and he did on BG2 that people don't want to take the risk of buying these chips that are cheaper when I can deliver them an entire system for $100 billion that will work because I have decades of doing this, or at least the last five years. The same thing will happen with Anthropic and Open AI at the higher levels of things,

but gradually each company will do what you're saying, which is, okay, I got to find a better way because I can't have these costs keep going up because my income is going at a faster pace. So I do view this in a very similar way to you that the open source win. But if you listen to Jensen Huang, he said it perfectly. He goes, I think it's a mistake to view Anthropic and Open AI and focus on their revenues. They will be very successful of what they're doing. They have the best models. They have the highest intelligence.

they will dominate research and science, no question about it. Agreed. They're not letting anyone see their models anymore, which means distillation goes down, and we're already seeing that in the China data. So all the open-source people that think they have a smart model, that's great, but not for math, not for science, not for rebuilding things there.

I think all of that's gonna start to take shape, and we're in the very early innings, but I think it's a mistake for people to doubt. The revenues will come in. I think they're gonna come in from so many different sources. And Anthropic and Open AI may never meet the valuation of the... company of what people thought.

If we sat here in five years and anthropic and open AI combined were four and a half trillion dollars, there's a waste of money to talk about the whole thing, both from, are they going to make it or go extinct or is it the greatest investment opportunity? We already missed the greatest investment opportunity. Yeah, I actually think they will continue to grow and people are they going to be a great company. They're already great companies, right? So, like, this is not me like shitting on them in any form or fashion.

What I think is, maybe to be explicitly clear, the per company or per customer token consumption is going to keep going down over time because what they, Open AIA and Anthropic are the starter pack for a company to get involved in AI. You go and you adopt them first because you don't know nothing, right? You need, hey, what is the thing to get this going? I'm going to build software and then I need to plug in AI. They have intelligence. As companies move up the curve of I need to now customize it, improve it, optimize it, whatever, then you start to move off of the general purpose models

into the specialized models to find tuning, the open source, like all that kind of stuff. And so for us, it's super easy to do that in a matter of six months for JP Morgan or even large law firms or these big companies. Maybe it takes six to 10 years. But the end result is they're going to end up wanting to own as much that as possible so it's sovereign, it's cheaper, it's better, whatever.

I think that there is a window of time where the other aspect we haven't talked about is like, it's got a sales team, right? Open source doesn't have a sales team. And so if you're the guy sitting at JP Morgan and you get to make the decision as to what you're going to do, well, I don't know, maybe the dude taking me to the Knicks game is going to get some business, right?

And so there is a whole other element of this that isn't just like, what is the long-term best thing for the company? There's human relationships and all of this. So I'm not arguing that they're zeros or they're not bad investments or anything of stuff. I'm just arguing that if I fast forward 15 years from now, most companies that they're going to want to own their full stack,

big companies are going to be slower, small companies are already doing it. And so the trend to me is like, there is way more headwind here than just like, have we ever talked on this podcast about the fat protocol thesis? No, no. So, all right, so let me go back for a second. Most of my view of AI comes from my experience on crypto.

And if you look at all the people who are saying AI is going to kill us, they were telling us that the government was going to shut down crypto. Right? So, like, there's a lot of parallels between new technology, whatever. And I was only now fortunate enough to have lived through one of these, like, zero to one moments in technology. And now I'm seeing it, I'm like, oh, this must be like every technology. But in crypto, if you go back 12 years ago or so, there was this very famous fat protocol thesis. And the whole idea was all of the value accrues to the protocol. So the apps, the infrastructure, like all of that, there's going to be no value there.

it all goes to Bitcoin, Ethereum, Salana, whatever. And it ended up not being true, because obviously there's lots of value at the app layer, the infrastructure layer, and the protocol layer. AI is very similar in that, no one has called it this yet, but there's basically this like fat model thesis that people have had for a couple of years, which is like all of the value is going to accrue

just to Open AI or Anthropic. I think now, you know, UI, many others are realizing, hey, no, there's going to be apps, there's going to be infrastructure, there's going to be also value at the model layer. And so the fat protocol thesis was wrong. I think the fat model thesis is wrong as well. But it doesn't mean that it's a zero.

It just means that it doesn't take 100%. Maybe it takes 40% of the value. There's still value in these other layers as well. And so companies have to choose where do they play in the stack? And like, I'm going to put dollars out. Do I put it to the model companies? Do I put it to the infrastructure? Do I put it to open source?

Where does my money go in that stack? It's not all going to go to the model companies. And I, so you brought up the point that I think everyone listening should be paying attention to, which is we're getting caught too much, and I think this is where our original conversation went on this, which is, if you focus on the economics of something, you're wasting your time.

Meaning to think that anthropic and open AI are losing everything to open source is just stupid. I agree. It doesn't make any sense. Do I think that the pie of Tam of intelligence is so big that everyone has a chance, not to win, but to survive, yes. I think that's the key thing is that when Jensen talks about it, he literally says there's $90 trillion going into compute and AI.

He's been right about almost everything, and yet he still doubted, and that was the part about BG2. If you go listen to Zuckerberg and Alexander Wang talk on Cheeky Pine, it's the same thing. Go listen to what he said the benefits are for meta over the neoclouds. He didn't say the neoclods weren't necessary. He's heavily involved with core weath. So is invidia. Invita supplies the GPUs. I mean, Jensen came out and said their cost of capital is actually getting lower. And if you go read on how their structure is set up, there's a lot of

truth to that. So I just think there's a separation for people from the economics of a business and the companies. Anthropic was a $50 billion valued company 18 months ago that is now valued at two trillion. Whether it's 2.4 trillion, 1.9 trillion is irrelevant. The one thing I know for sure is to bet that you're going to get the same kind of return on it over the course of the next three years is silly. Like, you know, stupid. We're running out of time, but I have to ask you. Did you see Elon's demo of his new cars? What are your thoughts? You know, I've avoided talking about SpaceX, and I'm driving this into SpaceX for a reason, because Elon has also said that he sees SpaceX as being bigger than the global economy.

I want to put that in perspective of how my brain finally got to the place that he could be right. Okay? Now, do I think that's going to happen? No. But do I, could I come to the terms of what my vision is of the future and how Elon could be right? Here's the way it could be right.

There are $900 trillion on the asset. I've been thinking about the equity market as the total sum. So he was basically saying I'd be all public equity. And I went, well, that's not possible. But what he's really saying is a world that I believe in, which is the $900 trillion, which is predominantly illiquid assets, actually moves through tokenization into liquid assets. It's no longer trapped in this part. And that way, you could have one company worth $50 trillion.

I have no problem with it. Because Bitcoin, to me, same argument. Like, could it be $50 trillion? Of course it could. That is why when I saw the flying car thing, and I saw some funny memes that came out from people saying, you know, talking about different things, I just went, I believe this.

I saw Bald Eagle three times outside my apartment in Brooklyn this week. So if I can see Bald Eagle's nesting outside of my balcony, I think I can see flying cars everywhere. All right. I got some alpha for everybody. This is, if you listen to the end of the podcast, guys is where the good stuff is. Ready? I tweeted on Thursday morning, as a shareholder, I would fully support a Tesla

SpaceX merger. It is clear that Elon Musk is the best entrepreneur of our generation, give him as many resources as possible, and let him do his thing. I'm explicitly saying that I support it. Do you want to know what the alpha is? Who is at the top there who liked it? For those who can see, Mr. Elon Musk, which I think is kind of the subtle way, if you've noticed, you know, he likes that tweet. He put SpaceX X, Tesla.

Like, he's probably going to merge them. I don't know if he does it this year. The rumor is that he could possibly do it before the end of the year, which would be pretty, you know, epic. Now, the reason I bring that up is maybe one of the alpha-generating ideas from this podcast is it is likely that SpaceX would acquire Tesla and would have to do it at a premium to the current Tesla valuation. And if that's the case, then, I don't know, 15, 20, 30%, you know, kind of upside from there.

And so my guess is that we are going to see Tesla's stock start to kind of grind up here because there's going to be a bunch of hedge fund guys who start speculating on, hey, is he actually going to do this or not? Yeah. And then on top of that, by the way, he's got a fucking flying car that, you know, hops over traffic. And so you get these kind of like, there's like fundamentals of the technology of the product, plus just pure speculation on, hey, is this guy going to merge these two? And if he does it at a premium, Tesla stock could run here into the end of the year.

It could. And I think the Starlink situation is really important. I think Elon has, here's where I think he's become very smart in this thing. At the very beginning, we talked about LTCM. I want to make sure people understand that at some point, and this is what we've seen this year, the amount of capital needed for the AI trade from the public markets is enormous. This is another reason why tokenization has to happen fast. You need to free up capital from other places

to where the economics can be distributed to places that people want. The problem we're running into with the capital side is it's not that these trades are bad. It's that if Broadcon comes to the market for $100 billion and Google comes to the market for $100 billion, well, then someone is buying that money. They have a portfolio of investments.

You do? I do. Do I have 100% of my investments in Bitcoin? No. And nor should anyone have all of their investments in one thing. You scared? You scared? The problem with a, I don't know. and this is the issue,

if you keep coming with all of this, what's the difference between a core weave bond and a Broadcom bond and an NVIDIA stock? And they're all part of a very concentrated portfolio. So the amount of capital coming to the market, not the size of it, but the concentration of it is why the CDS blows out. It's why there's so much correlation with the names

that are not winners of AI. And I think this is a very unique situation in time. And so what needs to happen is the capital needs to basically be digested. And OpenAI is coming to the market. Anthropics coming to the market. These are big things. SpaceX came fast. Like, if you really go down, it starts to make sense. So what's happening to the market? Why are hedge funds blowing up? They're blowing up because they underestimated the impact that all this capital would mean to people who can't handle buying any more of it. They'll eventually buy more of it, but you know when they'll buy more of it when they start having profits in their portfolio because then that de-levers that position

purely through the profits that have come through the gains in the other positions. That's what needs to happen for the next year. And that's why when Paul Truder Jones goes out, and I don't know if he actually said this as some of the stuff, but he did say that it's going to be a negative liquidity year in 2027 because you're going to have so many companies coming to the market. Although I don't agree with him that the market will necessarily be down or that it's worth talking about in that manner, I do believe that what is happening is there's an enormous amount of capital that is needed for this buildout, and it's growing bigger and bigger every year. It won't take the market down because the economics behind it are supported, but it does mean that as an investor,

you have to be patient with the timeside, and that goes back to the leverage. If you're leveraged and you need the AI positions in your portfolio to work for the next year, you might be in trouble. That's it, folks. Make sure you go to Jordi Visser on YouTube. Subscribe to his channel there. If you want to use AI to better manage your finances, go check out Sylvia at sylvia.com. It's all we got. See you guys next time.