Coatue’s Laffont Brothers. AI, Public & VC Mkts, Macro, US Debt, Crypto, IPO's, & more | BG2

**Philippe Laffont** (0:00)
Sometimes you make some venture bets and they don't work. And then you're like, I just invested in the wrong trend. And in fact, sometimes you invest in the wrong company, but it is the right trend. And those bad investment cloud your judgment.

**Brad Gerstner** (0:28)
Bill, we're back. I think it's the 10th anniversary. Congratulations, Philippe and Thomas.

**Philippe Laffont** (0:33)
Thank you.

**Brad Gerstner** (0:33)
Of course, we're at Coatue's East Meets West down here in Los Angeles. I think it's an event that founders, I certainly know you and I look forward to every year. As I said to you both, it's hard to put together something that has this much durability, this much impact. You do this incredible overview on public markets, on venture markets and technology that I think you published today online and that everybody should go out and download and take a look at. And so we've been at this now for a couple of decades. Having built something like this is really cool. So I just wanted to say thank you and congratulations on the 10th anniversary. And Bill and I thought, why don't we just go through? You had this slide today. We got to sit through and listen to you guys commentate about some of these slides. We wanted to share it with everybody else.

**Thomas Laffont** (1:22)
So we're also excited to make our debut as a podcast duo, the world premiere. We've done them individually, but not as a team.

**Brad Gerstner** (1:31)
Or we're announcing our new pod. Yeah, exactly.

**Philippe Laffont** (1:34)
We got BG2 and now we got-

**Brad Gerstner** (1:36)
What is it?

**Philippe Laffont** (1:37)
LB2, Laffont Brothers 2

**Brad Gerstner** (1:39)
Let's go.

**Philippe Laffont** (1:40)
So we're squared, squared.

**Thomas Laffont** (1:42)
But yeah.

**Bill Gurley** (1:43)
By the way, I would just add, I think the conference is a really amazing gift to the industry. And for the founders to get to come, like it harkens back to the- like when I was really young in this industry, the Agenda Conference, everyone would stay for the whole thing. And so your opportunity to network is so much higher. And a lot of conferences today, people fly in and fly out. But here you've got some amazing people that are around for the entire thing. It's just incredible.

**Brad Gerstner** (2:13)
Yeah. Agreed.

**Thomas Laffont** (2:14)
Well, let's dive in.

**Brad Gerstner** (2:15)
You have a big budget for smoothies. Your smoothie budget really keeps people in touch.

**Bill Gurley** (2:20)
And by the way, for people that are listening, this deck, we're going to reference some of the slides. The Coatue team put it on their website just a few hours ago. And so if you want to download it and have that as we go through this, it might be helpful.

**Brad Gerstner** (2:35)
Yeah, you should. I mean, Philippe, let's just start off. I mean, you and I, it seems like we spend most of our time talking when things get bad in the world. And yet this is probably the most optimistic that I've heard you on this stage in the 10 years that you've been doing this, right?
You talked us through this slide four, which is the AI super cycle slide. And this slide, which I thought was incredible, slide six, which is, when will AI reach 75 percent of total US market cap, which I think is incredibly provocative how you compare that to industrials and transport, because everybody is saying it's so big already, it can't get any bigger. So just kick us off, you know, contextualizing your level of optimism and this slide, like, can it really be 75 percent of total cap?

**Philippe Laffont** (3:23)
Yeah. So listen, every time I'm optimistic, I'm worried this is it, you know, this is the peak. And now that Thomas and I are doing this podcast together, we're guaranteed to be doomed. But I think that at the end of the day, that's how everybody thinks, first of all. So it's never priced in. Everybody's worried that it's all the time the peak. And yet despite that, things tend to work out. I think today we've learned from these founders and stuff like that, that AI is probably the defining and biggest tech trend that we're going to see. And I showed you the different waves. There's only been a few waves over the last 70 years or so, going back to mainframes. And one person made the point that the networking, we needed the PCs. The internet, we needed network PCs. SaaS, we needed what happened before. And AI is also built. So one of the reasons these trends get bigger, they're built on top of each other. Exactly. So I think that's one. Second part, we've tried to do, and Bill, you've been great at it. And Brad, you've done too is, let's always try to look back at the past. I find that this concept that like, even though we're talking about new trends, there've been new trends, you know, since the canals and whale oil and things like that, right? And so you look in the 1800s and stuff, you know, we started having a real finance and real estate industry. Then probably at some point, especially after the second world war, we had a real manufacturing industry. And then we've had also a market dominated by energy. And right now, it's about 50% tech. But we had the CEO of the largest power plant sort of utility with us today. We had the CEO of the largest equipment maker for utilities today. You're sort of wondering, not just AI is going to become bigger, TMT is going to become bigger, but there's some sectors that, should we reclassify them as TMT, our utilities now, like the next semi-cap, what's the difference between a nuclear energy plant and a semi-cap guy? They're both there at the beginning to help you create something that delivers a tech product.