AI, Middle East, China, Tariffs, Recon Bill, Invest America | BG2 w/ Bill Gurley & Brad Gerstner

**Brad Gerstner** (0:00)
Can you imagine if in the year 2000, Washington DC had said, Oh my God, Google is so powerful that we're not going to allow any other country in the world to have access to this Google machine that might give them answers to questions unless Google comes to Washington and gets federal approval before it launches in any of these countries? That's what we were doing in AI, and I think we've ripped the chains off of that. And I think now we're going to allow our companies to go compete and win. Hey Bill, it's great to see you, it's been a while.

**Bill Gurley** (0:45)
It has been a while. It's been, I think, three weeks since we did a podcast.

**Brad Gerstner** (0:49)
You know, honestly, and thanks as an aside to hundreds, if not thousands of listeners who are like, you know, remind us that they love the pod. It is hard to get it scheduled. Part of the reason it's been hard is I've been on the road, I've been in LA, I've been in Washington, DC, and then I spent 10 days in the Middle East. And I think about what's happened, Bill, over that period of time. We basically landed the plane on tariffs. We've had these huge deals announced in the Middle East. The reconciliation bill is on track to passing. And we have some talks of a ceasefire in Ukraine. The market, which was down 20% for the year, has now bounced 20% in the last 20 trading days. So maybe today we could just unpack this fury of activity that's occurred over the last three weeks.

**Bill Gurley** (1:38)
That sounds great. So you were at the big event, the one that everyone's talking about in the Middle East. Why don't you, if you would, give the listeners, I think at first just kind of, what did it feel like?
What was different this time you've been there before? But frame what happened, just at first from, what did this look like? And then I'd be interested in your takeaways.

**Brad Gerstner** (2:02)
Well, I have to say the whole orientation, if you just think about it, toward the Middle East over the last few years, has been kind of about control. We had CFIUS that was blocking all these deals in the Middle East. We had the Biden diffusion rule. That remember that in the final weeks of the Biden administration, they passed a rule known as the diffusion rule. They really created this complicated regulatory framework for selling advanced chips and models. And it broadly restricted the ability of the US to sell chips to like 100 countries around the world. And so I think that it felt like a massive 180 shift from what I would call the Washington approach of control and preventing diffusion of American technologies to much more of a Silicon Valley approach to partnership and openness. And that was the language that I heard.
I was happy to be part of an AI delegation with a lot of CEOs who were over there helping to craft these deals. But, you know, and getting to ride shotgun on some meetings with David Sachs, you know, who is obviously leading the AI initiatives for the administration. And I have to say, it just was incredibly well received in Riyadh and Doha and Abu Dhabi. And there was a spirit of partnership in every one of those places. And you saw the fruits of that. Major announcements of investments in the United States and major deals getting struck about, you know, AI data centers, et cetera, that are opening in that part of the world.

**Bill Gurley** (3:38)
That's amazing. Of all those things, which one surprised you the most?

**Brad Gerstner** (3:43)
It's a really big change. I mean, you can't underscore enough what it means, you know, like the Trump administration just repealed the Biden diffusion rule in May of 25 Right. And so it literally is fresh off of that. And if you would have told me that in the first five months of this year, we would have gotten a trillion-dollar deal signed with Saudi in terms of their investment in the United States, another trillion dollars with Qatar, another trillion dollars with the UAE. Those are all investments into the United States. And then let me give you a sense of the scale of magnitude of the deal that was announced in Abu Dhabi. So in Abu Dhabi, they announced a five gigawatt US AI, you know, it's a UAE US AI campus. It's an incredible architectural campus. It's in collaboration with NVIDIA and OpenAI and Oracle. And think of it as almost like a global Stargate. So to put that perspective, five gigs, every gig is about 500,000 GPUs. So that's about two and a half million GPUs worth of compute power to power the AI initiatives out of the UAE around the world. And so if you would have told me that that would have come together in this short period of time, I wouldn't have believed it. Howard Lutnick played an incredibly important role. Scott Bessent was there with the president. Of course, David Sacks helping to put those deals together. You had CEOs, you know, you were asking how it looked and felt, you know, you had pretty much every major CEO in US technology. Correct, Jensen Huang was there, et cetera. And they were putting these deals together. So there were just a feeling of the art of the deal, what is possible, partnership and acceleration, as opposed to the deceleration, you know, and the control that I think you and I have felt over the last few years. And frankly, you and I have been worried about, right? This idea that the US was going to somehow, you know, shut down our AI and not allow the rest of the world to have access to our AI. I think we not only thought that was bad policy from an economic perspective, but also just dangerous for the world. It was basically going to allow for this Huawei Belt and Road where Chinese full-stack technologies would move into the Middle East.