BG2 with Bill Gurley & Brad Gerstner | MANG VC Gone Wild, Can You Trust AI Valuations, 2024 Set Up for Public Tech Stocks, & the VC Correction Grinds On | E01

**Brad Gerstner** (0:00)
You know, the number one question I get from founders who come in here, the number one question I get from my LPs is where are we in this correction? What stage of grief are we in, Bill?

**Bill Gurley** (0:12)
And when does it end?

**Brad Gerstner** (0:25)
Hey man, good to see you.

**Bill Gurley** (0:26)
Good to be seen.

**Brad Gerstner** (0:27)
Of course, you know, to the audience, do your own homework, make your own investing decisions. We are not your investment gurus.
So Bill, talk to me a little bit about what you've been thinking about this week.

**Bill Gurley** (0:38)
Yeah. So one of the things I've been thinking about lately, and we'll go into it more in depth, is how some of the big decisions, and there's been kind of sequence of events in the large LLM market, I think are going to create some pretty big market distortions that might be felt along the way by a number of different players. So I want to go in deep on that.
What about yourself?

**Brad Gerstner** (1:02)
I was prepping for our annual LP update today. I mean, I've been doing these now for over 15 years, and it's always that time of year where I stop, it forces me to telescope out, I think about valuations, about what's going on with Mag7 over the last year, about long run tech compounding, about this AI cycle and what's going to happen this year. Then I also had this, I guess my first tweet that went over a million views over the course of last week, which it's still amazing to me that because of regulatory capture, people just aren't getting their calcium CT exam, they're still enslaved to looking at their cholesterol. We saw the tragic news on that Warriors coach this week, so I'm just thinking everybody over the age of 40 needs to get this CT scan.

**Bill Gurley** (1:54)
Let me ask you a quick question on this before we dive in. So you shared this with me. I had had a spiked LDL on just a simple test, and I went and did this, and it was pretty simple. I mean, I was in and out in a flash. It's not like it was a big invasive thing.
And so if it's so simple and so powerful, why do you think the establishment is fighting it?

**Brad Gerstner** (2:18)
You know, I think we established standards of care in this country, and in this case, the standard of care is to track people's cholesterol. And no doctors have an incentive to do anything other than standard of care. And so I think they worry about liability. I think other doctors just aren't on top of it. But the reality is a CT scan. You don't need a doctor referral. It costs less than 100 bucks, as you know, takes less than 30 minutes in and out, non-invasive at all. And it actually will tell you whether or not you have black in your artery. So, you know, it's, you know, I saw I saw after this tragic death this week, the head of preventative cardiology at Stanford, Dr. Marin said, you know, perhaps had he had a calcium CT be alive today. So it's just a no brainer. I'm thrilled that you did it.
I know we've been on this with all of our friends. And so that's good news.
Well, let's dig in.
We may as well start with the hardest topic of the day in Silicon Valley, which is AI. You know, you stirred the pot a bit this week.

**Bill Gurley** (3:23)
And it was it was reacting to a tweet out of your firm.

**Brad Gerstner** (3:26)
So, I know, put the tweet up.

**Bill Gurley** (3:29)
Let's tell the story. So put the tweet up. What was the point of the tweet and what was in the graph? Like what was being discussed?

**Brad Gerstner** (3:37)
You know, as you know, so a poor of on my team who helps cover AI, he started looking into the amount of venture capital invest. Everybody's talking about whether or not we're in a VC winter. But if you look at the aggregated amount of VC capital that's being invested, it's a big number. But if you deconstruct it a little bit, what you see is that we have this explosion in venture capital investing coming out of four companies, right? He called them MANG, Microsoft, Amazon, Nvidia, and Google. And so as you can see on this chart, we go from almost no venture capital investing out of these folks six or seven years ago to all of a sudden this $25 billion last year in VC investing. It led to the question like, why is this happening?