Bill Ackman on His Investing Playbook, His Bullish and Bearish Bets, and What Could Trigger the Next 2008

**Bill Ackman** (0:00)
The key to being a successful long-term investor is being able to survive those kind of challenging market periods when everyone else is panicking. In fact, you want to have money to invest when others are panicking.

**Nicole Lapin** (0:09)
Bill Ackman doesn't just manage a portfolio. As the founder of Pershing Square, he has built one of the most closely watched hedge funds on Wall Street. When this guy tweets, he literally moves markets. Today, he tells me the biggest tip for investors.

**Bill Ackman** (0:24)
Invest in something that you believe will withstand the test of time, the value of business, is the present value of the cash it generates over its life.

**Nicole Lapin** (0:32)
The macroeconomic risks he's worried about.

**Bill Ackman** (0:34)
I think the biggest risk to markets is that there are a lot of very levered players in the market and we're at risk to some kind of extrinsic shock and stocks to go down a lot.

**Nicole Lapin** (0:43)
Which company will win the AI race?

**Bill Ackman** (0:45)
Some people are afraid of AI. I think it's going to be very destructive to jobs and so on. I think it will be a big driver of economic growth, a big driver of job growth, but you have to learn how to use the tools.

**Nicole Lapin** (0:55)
I'm Nicole Lapin, the only financial expert who don't need a dictionary to understand. It's time for some Money Rehab.
Bill Ackman, welcome to Money Rehab.

**Bill Ackman** (1:12)
Thanks for having me.

**Nicole Lapin** (1:12)
So the economy feeling funky, but to be fair, it always feels a little bit funky. I don't think there's ever been a time it hasn't. What's your overall take on what's going on in the economy and markets right now?

**Bill Ackman** (1:24)
So I think it's an unusual time in history. I think the big story is really AI. AI is driving an enormous amount of entrepreneurship. It's giving access to intelligence, to a very broad group of people at very low cost. Google is basically free.
Then you have this massive infrastructure build in connection with AI. So you have some of the largest companies in the world competing to build the model for super intelligence and they need access to compute and data.
We're seeing a land rush as people are literally acquiring land, building data centers, filling them with GPUs, memory and enabling this technology that's transforming the world. I think it's going to have an enormous impact on all of us. Some people are afraid of AI. They think it's going to be very destructive to jobs and so on. I think it will be a big driver of economic growth, a big driver of job growth, but you have to learn how to use the tools. But I think the big story is really AI. Yes, we have a war going on in Iran that I think will resolve itself. I don't think it's going to go on for years. I think it will resolve itself one way or another, in a way that won't be too impactful in the US.
And then I think you're seeing companies are actually doing quite well for the most part. But it is a bit of a bifurcated economy where some of the lower income people are challenged with inflation. And that's a major concern. So it's not all roses, I would say.

**Nicole Lapin** (2:53)
It's definitely not. It never is. So with open AI, anthropics, SpaceX all going public, who do you think the winner is going to be?

**Bill Ackman** (3:02)
Anthropics seems to be the leader in terms of frontier models and building a business that apparently turned profitable recently. That's pretty impressive. What concerns me about open AI is kind of a prediction of very significant losses for the foreseeable future. And also, I think the open source models are getting so good. And the people will have access to either lower costs or free models that will enable them to answer most of the important questions or solve the problems that they need. So I'm less of a believer in betting on the frontier model company. SpaceX is a very interesting business. The Starlink franchise is enormously profitable and a near monopoly on global satellites, Lefini, their space franchise is incredible.
And they have an amazing position in terms of data infrastructure. You want to rent 100,000 GPUs, but the only place you can do that today is SpaceX. And they're earning very high returns on those assets. And then they have their own AI models that launched a new one recently. So it's an incredible collection of assets run by the most talented technologist, entrepreneur of our generation. And I think the only question is just price. At a trillion, wherever it is, six or seven, there's less upside than if you could buy for half that price. But I wouldn't, the word is never to bet against you live. So I think that SpaceX will be an incredibly important company over the next whatever period of time. Now, it's not in the Pershing Square portfolio, because it doesn't have the degree of predictability that we're looking for. We like businesses that sort of today, when you think about a business, a business, people think about stocks and bonds, right? Bonds, you get paid a coupon, an interest rate a couple of times a year. And if it's a fixed rate bond, you're going to get your six or seven percent for sure. And at the end of the life of the bond, you're going to get your principal as long as it's a credit worthy company.